Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 05, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-11693 | |
Entity Registrant Name | SCIENTIFIC GAMES CORPORATION | |
Entity Central Index Key | 0000750004 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 81-0422894 | |
Entity Address, Address Line One | 6601 Bermuda Road | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89119 | |
City Area Code | 702 | |
Local Phone Number | 897-7150 | |
Title of 12(b) Security | Common Stock, $.001 par value | |
Trading Symbol | SGMS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 94,474,877 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Revenue: | |||
Total revenue | $ 725 | $ 837 | |
Operating expenses: | |||
Selling, general and administrative | 198 | 186 | |
Research and development | 51 | 49 | |
Depreciation, amortization and impairments | 138 | 165 | |
Restructuring and other | 22 | 7 | |
Operating Income (Loss), Total | (32) | 123 | |
Other (expense) income: | |||
Interest expense | (124) | (154) | |
(Loss) earnings from equity investments | (2) | 6 | |
Gain (Loss) on Extinguishment of Debt | 10 | 5 | |
Gain on remeasurement of debt | 10 | 5 | |
Other expense, net | (3) | 0 | |
Total other expense, net | (119) | (143) | |
Net income (loss) before income taxes | (151) | (20) | |
Income tax expense | (4) | (4) | |
Net Income (Loss) Attributable to Parent, Total | (155) | (24) | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (83) | 55 | |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | 2 | 1 | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | (16) | (5) | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent, Total | (97) | 51 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total | $ (256) | $ 27 | |
Basic and diluted net loss attributable to SGC per share: | |||
Basic (in dollars per share) | $ (1.69) | $ (0.26) | |
Diluted (in dollars per share) | $ (1.69) | $ (0.26) | |
Weighted average number of shares used in per share calculations: | |||
Basic (in shares) | 94 | 92 | |
Diluted (in shares) | 94 | 92 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | $ 4 | $ 0 | |
Goodwill, Impairment Loss | 54 | 0 | |
Accumulated Loss | |||
Other (expense) income: | |||
Net Income (Loss) Attributable to Parent, Total | (159) | (24) | |
Services | |||
Revenue: | |||
Total revenue | 422 | 459 | |
Operating expenses: | |||
Cost of services, cost of product sales and cost of instant products | [1] | 130 | 133 |
Product sales | |||
Revenue: | |||
Total revenue | 168 | 238 | |
Operating expenses: | |||
Cost of services, cost of product sales and cost of instant products | [1] | 91 | 107 |
Instant Products [Member] | |||
Revenue: | |||
Total revenue | 135 | 140 | |
Operating expenses: | |||
Cost of services, cost of product sales and cost of instant products | [1] | $ 73 | $ 67 |
[1] | Exclusive of D&A |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 334 | $ 313 |
Restricted cash | 55 | 51 |
Receivables, net of allowance for credit losses of $61 and $36, respectively | 624 | 755 |
Inventories | 248 | 244 |
Prepaid expenses, deposits and other current assets | 235 | 252 |
Total current assets | 1,496 | 1,615 |
Non-current assets: | ||
Restricted cash | 11 | 11 |
Receivables, net of allowance for credit losses of $9 and $-, respectively | 48 | 53 |
Property and equipment, net | 474 | 500 |
Operating lease right-of-use assets | 98 | 105 |
Goodwill | 3,162 | 3,280 |
Intangible assets, net | 1,429 | 1,516 |
Software, net | 248 | 258 |
Equity investments | 263 | 273 |
Other assets | 229 | 198 |
Total assets | 7,458 | 7,809 |
Current liabilities: | ||
Current portion of long-term debt | 45 | 45 |
Accounts payable | 215 | 226 |
Accrued liabilities | 475 | 495 |
Total current liabilities | 735 | 766 |
Deferred income taxes | 87 | 91 |
Operating lease liabilities | 81 | 88 |
Operating lease liabilities | 293 | 292 |
Long-term Debt and Lease Obligation | 8,620 | 8,680 |
Total liabilities | 9,816 | 9,917 |
Commitments and contingencies (Note 16) | ||
Stockholders’ deficit: | ||
Common stock, par value $0.001 per share: 199.3 shares authorized; [108.6] and 109.1 shares issued and [91.4] and 91.9 shares outstanding, respectively | 1 | 1 |
Additional paid-in capital | 1,216 | 1,208 |
Accumulated loss | (3,119) | (2,954) |
Treasury stock, at cost, 17 shares | (175) | (175) |
Accumulated other comprehensive loss | (389) | (292) |
Total SGC stockholders’ deficit | (2,466) | (2,212) |
Liabilities and Equity, Total | 7,458 | 7,809 |
Stockholders' Equity Attributable to Noncontrolling Interest | 108 | 104 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (2,358) | $ (2,108) |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 199,000,000 | 199,000,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jan. 10, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 199,000,000 | 199,000,000 | |
Common stock, shares issued (in shares) | 112,000,000 | 111,000,000 | |
Common stock, shares outstanding (in shares) | 94,000,000 | 94,000,000 | |
Treasury stock, at cost, shares held (in shares) | 17,000,000 | 17,000,000 | |
Shares of surviving corporation (in shares) | 1 | ||
Condensed Financial Statements | |||
Accounts Receivable, Allowance for Credit Loss, Current | $ 61 | $ 36 | |
Accounts Receivable, Allowance for Credit Loss, Noncurrent | $ 9 | $ 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (155) | $ (24) |
Adjustments to reconcile net loss to cash provided by operating activities | 243 | 179 |
Changes in working capital accounts, net of effects of acquisitions | 25 | 6 |
Changes in deferred income taxes and other | 7 | 6 |
Net cash provided by operating activities | 120 | 167 |
Cash flows from investing activities: | ||
Capital expenditures | (53) | (67) |
Proceeds from Equity Method Investment, Distribution, Return of Capital | 0 | 3 |
Proceeds from Sale of Productive Assets | 22 | 0 |
Net Cash Provided by (Used in) Investing Activities, Total | (31) | (64) |
Cash flows from financing activities: | ||
Proceeds from Lines of Credit | 50 | 40 |
Repayments under SGI revolving credit facility | (90) | (175) |
Proceeds from issuance of senior notes and term loans | 0 | 1,100 |
Payments on long-term debt | (10) | (12) |
Payments of Financing Costs | 0 | 14 |
Increase (Decrease) in Royalties Payable | (8) | (7) |
Proceeds From Sale Of Financing Receivables And Other | (1) | 10 |
Net Cash Provided by (Used in) Financing Activities, Total | (59) | 942 |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (5) | 1 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total | 25 | 1,046 |
Cash, cash equivalents and restricted cash, beginning of period | 375 | 220 |
Cash, cash equivalents and restricted cash, end of period | 400 | 1,266 |
Supplemental cash flow information: | ||
Cash paid for interest | 110 | 80 |
Income taxes paid | 6 | 10 |
Supplemental non-cash transactions: | ||
Non-cash interest expense | 5 | 7 |
Proceeds from Sale of Equity Method Investments | $ 4 | $ 4 |
Statement of Other Comprehensiv
Statement of Other Comprehensive Income (Statement) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Other Comprehensive Income [Abstract] | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | $ (83) | $ 55 |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | 2 | 1 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | (16) | (5) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (97) | 51 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | (252) | 27 |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 4 | 0 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ (256) | $ 27 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies | Description of the Business and Summary of Significant Accounting Policies Description of the Business We are a leading developer of technology-based products and services and associated content for the worldwide gaming, lottery, 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 gaming solutions to retail consumers; and providing a comprehensive suite of digital RMG and sports wagering solutions, distribution platforms, content, products and services. We report our operations in four business segments—Gaming, Lottery, SciPlay and Digital. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The accompanying condensed consolidated financial statements include the accounts of SGC, 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. In the opinion of SGC and its management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations, comprehensive (loss) income and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2019 10-K. Interim results of operations are not necessarily indicative of results of operations to be expected for a full year. Impact of COVID-19 In March 2020, the World Health Organization declared the rapidly spreading COVID-19 outbreak a pandemic. In response to the COVID-19 pandemic, governments across the world implemented a number of measures to prevent its spread, including but not limited to, the temporary closure of a substantial number of gaming operations establishments and disruptions to lottery operations, travel restrictions, and cancellation of sporting events, which are affecting our business segments in a number of ways. These disruptions to our business segments as a result of COVID-19 have had and continue to have an adverse impact on our results of operations, cash flows and financial condition. Based on our current estimates regarding the magnitude and length of the disruptions to our business, we do not anticipate these disruptions will impact our ability to meet our obligations when due or our ability to maintain compliance with our debt covenants for at least the next 12 months. However, the ultimate magnitude and length of time that the disruptions from COVID-19 will continue is highly uncertain. This uncertainty will require us to continually assess the situation, including the impact of changes to government imposed restrictions, market by market. Accordingly, our estimates regarding the magnitude and length of time that these disruptions will continue to impact our results of operations, cash flows and financial condition may change in the future and such changes could be material. As of March 31, 2020, our total available liquidity (excluding our SciPlay business segment) was $684 million, which included $483 million of undrawn availability under SGI’s revolving credit facility. On April 9, 2020, we borrowed $480 million under SGI’s revolving credit facility, which was substantially all of the remaining availability thereunder. We have implemented a number of measures to proactively reduce operating costs, conserve liquidity and navigate through this unprecedented situation. These include measures such as: reductions in both salaries and workforce, including voluntary 50% or greater reductions in salaries by our executive leadership team (100% as to our President and Chief Executive Officer), unpaid employee furloughs, reductions in hours, temporary elimination of 401(k) matching among other compensation and benefits reductions, and deferral of certain operating and capital expenditures. We are also engaging with our vendors to negotiate concessions on the timing and amount of payments to preserve liquidity through the COVID-19 disruption period. We continue to actively manage our daily cash flows and continue to evaluate additional measures that will reduce operating costs and conserve cash. Our only financial maintenance covenant (excluding SciPlay’s Revolver) is contained in SGI’s credit agreement. Prior to the Credit Agreement Amendment (as defined below) dated May 8, 2020, this covenant was tested at the end of each fiscal quarter and required us to not exceed a maximum consolidated net first lien leverage ratio of 5.00x Consolidated EBITDA (as defined in the credit agreement). Prior to the Credit Agreement Amendment, this ratio stepped down to 4.75x beginning with the fiscal quarter ended December 31, 2020 and to 4.50x beginning with the fiscal quarter ended December 31, 2021. Our consolidated net first lien leverage ratio as of March 31, 2020 was 4.38x. Additionally, the SciPlay Revolver requires that SciPlay maintain a maximum total net leverage ratio not to exceed 2.50x and maintain a minimum fixed charge coverage ratio of no less than 4.00x. We had no amounts drawn on our SciPlay Revolver as of March 31, 2020. We were in compliance with the financial covenants under all debt agreements as of March 31, 2020. On May 8, 2020, the requisite lenders under SGI’s revolving credit facility agreed to amend the consolidated net first lien leverage ratio covenant in the credit agreement (the “Credit Agreement Amendment”) to (a) implement a financial covenant relief period through the end of the first quarter ending March 31, 2021 (the “Covenant Relief Period”), as a result of which SGI is not required to maintain compliance with the consolidated net first lien leverage ratio covenant during the Covenant Relief Period, (b) reset the consolidated net first lien leverage ratio covenant following the Covenant Relief Period, (c) impose a minimum liquidity requirement (excluding SciPlay) of at least $275 million during the Covenant Relief Period with a potential step-down to at least $200 million for April and May 2021, (d) further restrict our ability to incur indebtedness and liens, make restricted payments and investments and prepay junior indebtedness during the Covenant Relief Period, subject to certain exceptions and further subject, in some instances, to maintaining minimum liquidity (excluding SciPlay) of at least $400 million and (e) establish a LIBOR floor of 0.500% on borrowings under the revolving credit facility during the Covenant Relief Period. The revised consolidated net first lien leverage ratio will be 6.00x Consolidated EBITDA beginning with the fiscal quarter ending June 30, 2021, stepping down as follows: (1) 5.75x beginning with the fourth quarter of 2021, (2) 5.25x beginning with the second quarter of 2022, (3) 4.75x beginning with the fourth quarter of 2022 and (4) 4.50x beginning with the second quarter of 2023 and thereafter. The revised consolidated net first lien leverage ratio will be based on Consolidated EBITDA (as defined in the Credit Agreement Amendment) as follows: (1) for the testing period ending June 30, 2021, Consolidated EBITDA for the fiscal quarter ending June 30, 2021 multiplied by 4, (2) for the testing period ending September 30, 2021, Consolidated EBITDA for the fiscal quarters ending June 30, 2021 and September 30, 2021 multiplied by 2, (3) for the testing period ending December 31, 2021, Consolidated EBITDA for the fiscal quarters ending June 30, 2021, September 30, 2021 and December 31, 2021 multiplied by 4/3 and (4) for all subsequent testing periods, Consolidated EBITDA for the previous twelve months including the quarter for the which the test is performed. Additionally, changes to estimates related to the COVID-19 disruptions could result in other impacts, including but not limited to, additional goodwill impairments (see Note 8), indefinite-lived intangibles, long-lived asset and equity method investments impairment charges, inventory write downs and receivables credit allowance charges (see Note 5). Significant Accounting Policies There have been no changes to our significant accounting policies described within the Notes of our 2019 10-K other than adoption of ASC 326 as described in Note 5. Computation of Basic and Diluted Net Loss Per Share Basic and diluted net loss attributable to SGC per share were the same for all periods presented as all common stock equivalents during those periods would be anti-dilutive. We excluded 1 million and 2 million of stock options from the diluted weighted-average common shares outstanding for the three months ended March 31, 2020 and 2019, respectively. We excluded 2 million of RSUs from the calculation of diluted weighted-average common shares outstanding for each of the three months ended March 31, 2020 and 2019. New Accounting Guidance - Recently Adopted 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 legacy 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 are 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. We adopted ASC 326 as of January 1, 2020 using the modified retrospective method for all financial assets measured at amortized cost, which resulted in a $6 million cumulative-effect adjustment increase to accumulated loss. See Note 5 for our credit losses policy and the adoption impact of ASC 326 on our consolidated financial statements. The FASB issued ASU No. 2018-13, Fair Value Measurement , and several subsequent amendments (collectively, Topic 820) in 2018. The standard amends the required quantitative and qualitative disclosure requirements for recurring and nonrecurring fair value measurements. We adopted this standard effective January 1, 2020. The adoption of this standard did not have a material impact on our financial statement disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes, to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes, enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years with early adoption permitted. We adopted this standard effective January 1, 2020. The adoption of this guidance did not have a material effect on our consolidated financial statements. We do not expect that any recently issued accounting guidance will have a significant effect on our consolidated financial statements. |
Subsequent Events [Text Block] |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The following table disaggregates revenues by type within each of our business segments: Three Months Ended March 31, 2020 2019 Gaming Gaming operations $ 119 $ 152 Gaming machine sales 92 136 Gaming systems 55 74 Table products 52 60 Total $ 318 $ 422 Lottery Instant products $ 136 $ 140 Lottery systems 76 87 Total $ 212 $ 227 SciPlay Mobile $ 101 $ 97 Web and other 17 21 Total $ 118 $ 118 Digital Sports and platform $ 38 $ 30 Gaming and other 39 40 Total $ 77 $ 70 The amount of rental income revenue that is outside the scope of ASC 606 was $74 million and $96 million for the three months ended March 31, 2020 and 2019, respectively. Contract Liabilities and Other Disclosures The following table summarizes the activity in our contract liabilities for the reporting period: Three Months Ended March 31, 2020 Contract liability balance, beginning of period (1) $ 109 Liabilities recognized during the period 36 Amounts recognized in revenue from beginning balance (49) Contract liability balance, end of period (1) $ 96 (1) Contract liabilities are included within Accrued liabilities and Other long-term liabilities in our consolidated balance sheets. 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 sheets. 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 retail sales contracts. Revenue is recognized for such contracts upon delivery to our customers, while conversion to cash is based on the retail sale of the underlying ticket 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 $19 million and $23 million in the three months ended March 31, 2020 and 2019, respectively. The following table summarizes our balances in these accounts for the periods indicated (other than contract liabilities disclosed above): Receivables Contract Assets (1) Beginning of period balance (2) $ 808 $ 121 End of period balance, March 31, 2020 672 133 (1) Contract assets are included primarily within Prepaid expenses, deposits and other current assets in our consolidated balance sheets. (2) The beginning of period balance excludes the impact of adoption of ASC 326. As of March 31, 2020, 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. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We report our operations in four business segments—Gaming, Lottery, SciPlay and Digital—representing our different products and services. A detailed discussion regarding the products and services from which each reportable business segment derives its revenue is included in Notes 2 and 3 in our 2019 10-K. In evaluating financial performance, our Chief Operating Decision Maker focuses on AEBITDA as management’s segment measure of profit or loss, which is described in Note 2 in our 2019 10-K. The accounting policies of our business segments are the same as those described within the Notes in our 2019 10-K. The following tables present our segment information: Three Months Ended March 31, 2020 Gaming Lottery SciPlay Digital Unallocated and Reconciling Items (1) Total Total revenue $ 318 $ 212 $ 118 $ 77 $ — $ 725 AEBITDA 96 78 35 23 (32) $ 200 Reconciling items to consolidated net loss before income taxes: D&A (89) (14) (2) (21) (12) (138) Goodwill impairment (54) — — — — (54) Restructuring and other (12) (5) (1) (1) (3) (22) EBITDA from equity investments (7) (7) Loss from equity investments (2) (2) Interest expense (124) (124) Gain on remeasurement of debt 10 10 Other expense, net (4) (4) Stock-based compensation (10) (10) Net loss before income taxes $ (151) (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. Three Months Ended March 31, 2019 Gaming Lottery SciPlay Digital Unallocated and Reconciling Items (1) Total Total revenue $ 422 $ 227 $ 118 $ 70 $ — $ 837 AEBITDA 215 104 25 13 (29) $ 328 Reconciling items to consolidated net loss before income taxes: D&A (112) (19) (2) (19) (13) (165) Restructuring and other (2) — (1) (3) (1) (7) EBITDA from equity investments (17) (17) Earnings from equity investments 6 6 Interest expense (154) (154) Gain on remeasurement of debt 5 5 Other expense, net (2) (2) Stock-based compensation (14) (14) Net loss before income taxes $ (20) (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. |
Restructuring and other
Restructuring and other | 3 Months Ended |
Mar. 31, 2020 | |
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 costs and other unusual items. The following table summarizes pre-tax restructuring and other costs for the periods presented: Three Months Ended March 31, 2020 2019 Employee severance and related (1) $ 18 $ 3 Restructuring, integration and other 4 4 Total $ 22 $ 7 (1) The three months ended March 31, 2020 includes $14 million in severance and other benefits granted to employees as a result of COVID-19 related austerity measures. |
Accounts and Notes Receivable a
Accounts and Notes Receivable and Credit Quality of Receivables | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Accounts and Notes Receivable and Credit Quality of Receivables | Receivables Receivables are recorded at the invoiced amount less allowance for credit losses and imputed interest, if any. For a portion of our receivables, we have provided extended payment terms with installment payment terms greater than 12 months and in certain international jurisdictions up to 36 months. We have a total of $157 million in gross receivables with extended payment terms as of March 31, 2020. Interest income, if any, is recognized ratably over the life of the receivable, and any related fees or costs to establish the receivables 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 receivables with extended payment terms originated and is recorded ratably over the payment period, which approximates the effective interest method. We generally impute interest income on all receivables with payment terms greater than one year that do not contain a stated interest rate. Our general policy is to recognize interest on receivables until a 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. Accrued interest, non-performing receivables and interest income were immaterial for all periods presented. Effective January 1, 2020, we changed our receivables presentation and combined accounts receivable and notes receivable into a single line item on our balance sheets due to their similar characteristics and have reclassified the prior period balances to conform to the current year presentation . The following table summarizes the components of current and long-term receivables, net: As of March 31, 2020 December 31, 2019 Current: Receivables $ 685 $ 791 Allowance for credit losses (61) (36) Current receivables, net 624 755 Long-term: Receivables 57 53 Allowance for credit losses (9) — Long-term receivables, net 48 53 Total receivables, net $ 672 $ 808 Allowance for Credit Losses As described in Note 1, results for reporting periods effective January 1, 2020 are presented in accordance with ASC 326 while prior period amounts continue to be reported in accordance with previously applicable U.S. GAAP. We recorded a net increase to accumulated loss of $6 million for the cumulative effect of adopting ASC 326, which was primarily related to incremental allowance for credit losses associated with our current receivables and contract assets that were not required under previously applicable U.S. GAAP. The adoption impact of this standard to our consolidated statements of operations, balance sheets, and cash flows during the quarter ended March 31, 2020 was not material. The receivables allowance for credit losses is our best estimate of the amount of expected credit losses in our existing receivables over the contractual term. We evaluate our exposure to credit loss on both a collective and individual basis. We evaluate such receivables on a geographic basis and take into account any relevant available information, which begins with historical credit loss experience and consideration of current and expected conditions and market trends (such as general economic conditions, other microeconomic and macroeconomic considerations, etc.) and reasonable and supportable forecasts that could impact the collectability of such receivables over the contractual term individually or in the aggregate. Changes in circumstances relating to these factors may result in the need to increase or decrease our allowance for credit losses in the future. We manage our receivable portfolios using both geography and delinquency as key credit quality indicators. The following summarizes geographical delinquencies of total receivables, net : As of March 31, 2020 Balances over 90 days past due December 31, 2019 Balances over 90 days past due Receivables: U.S. and Canada $ 456 $ 82 $ 534 $ 65 International 286 63 310 55 Total receivables 742 145 844 120 Receivables allowance: U.S. and Canada (29) (21) (13) (8) International (41) (25) (23) (23) Total receivables allowance (70) (46) (36) (31) Receivables, net $ 672 $ 99 $ 808 $ 89 Account balances are charged against the allowances after all collection efforts have been exhausted and the potential for recovery is considered remote. The activity in our allowance for receivable credit losses for each of the three-month periods ended March 31, 2020 and 2019 is as follows: Three Months Ended March 31, 2020 2019 Total U.S. and Canada International Total Beginning allowance for credit losses (1) $ (42) $ (14) $ (28) $ (40) Provision (28) (15) (13) (1) Charge-offs and recoveries — — — 3 Ending allowance for credit losses $ (70) $ (29) $ (41) $ (38) (1) Reflects $6 million related to implementation of ASC 326 for the beginning balance of the three months ended March 31, 2020. At March 31, 2020, 15% of our total receivables, net, were past due by over 90 days compared to 11% at December 31, 2019. Credit Quality of Receivables 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 receivables 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 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 receivables 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 ongoing 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 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 have certain concentrations of outstanding receivables in international locations that impact our assessment of the credit quality of our receivables. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our receivables. 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 receivables, net, from certain customers in Mexico at March 31, 2020 was $25 million. We collected $7 million of outstanding receivables from these customers during the three months ended March 31, 2020. • Peru - Our receivables, net, from certain customers in Peru at March 31, 2020 was $7 million. We collected $1 million of outstanding receivables from these customers during the three months ended March 31, 2020. • Argentina - Our receivables, net, from customers in Argentina at March 31, 2020 was $12 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 $4 million of outstanding receivables from customers in Argentina during the three months ended March 31, 2020. During the first quarter, we increased our allowance for credit losses by $28 million. This increase was primarily related to Gaming customers in Latin America (which transact with both domestic and international subsidiaries) as we expect those customers to be particularly affected by COVID-19 closures of gaming operations establishments. As noted above, we have concentrations of receivables in Latin America, where customers generally take longer to pay us than those from other geographies. In addition, customers in this region expect and have often been granted extended payment terms as described above. Our customers in Argentina, Colombia and Peru have been and are expected to continue to be affected by the COVID-19-related closures of gaming operations establishments and the resulting impact on both their specific financial situations and the general macroeconomic environments in which they operate. The fair value of receivables is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of March 31, 2020 and December 31, 2019, the fair value of receivables, net, approximated the carrying value due to contractual terms of receivables generally being under 24 months. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of the dates presented below: As of March 31, 2020 December 31, 2019 Parts and work-in-process $ 149 $ 153 Finished goods 99 91 Total inventories $ 248 $ 244 Parts and work-in-process include parts for gaming machines, lottery terminals and instant lottery ticket materials, as well as labor and overhead costs for work-in-process associated with the manufacturing of instant lottery games and lottery terminals. Our finished goods inventory primarily consists of gaming machines for sale, instant products primarily for our Participation arrangements and our licensed branded merchandise. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following: As of March 31, 2020 December 31, 2019 Land $ 15 $ 15 Buildings and leasehold improvements 127 129 Gaming and lottery machinery and equipment 1,005 1,028 Furniture and fixtures 29 31 Construction in progress 29 30 Other property and equipment 261 263 Less: accumulated depreciation (992) (996) Total property and equipment, net $ 474 $ 500 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. Three Months Ended March 31, 2020 2019 Depreciation expense $ 44 $ 58 During the first quarter of 2020, we sold certain properties in Chicago that were held for sale as of December 31, 2019 and received total net proceeds of $22 million. |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net and Goodwill | Intangible Assets, net and Goodwill Intangible Assets, net The following tables present certain information regarding our intangible assets as of March 31, 2020 and December 31, 2019. As of March 31, 2020 December 31, 2019 Gross Carrying Value Accumulated Amortization Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 1,064 $ (398) $ 666 $ 1,086 $ (383) $ 703 Intellectual property 915 (573) 342 931 (563) 368 Licenses 563 (361) 202 548 (329) 219 Brand names 120 (73) 47 123 (72) 51 Trade names 116 (34) 82 116 (31) 85 Patents and other 24 (15) 9 24 (15) 9 2,802 (1,454) 1,348 2,828 (1,393) 1,435 Non-amortizable intangible assets: Trade names 83 (2) 81 83 (2) 81 Total intangible assets $ 2,885 $ (1,456) $ 1,429 $ 2,911 $ (1,395) $ 1,516 The following reflects intangible amortization expense included within D&A: Three Months Ended March 31, 2020 2019 Amortization expense $ 65 $ 77 Goodwill Legacy U.K. Gaming Impairment Charge 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. A substantial portion of our legacy U.K. Gaming reporting unit revenue comes from Ladbrokes Coral Group (acquired by GVC Holdings PLC in March 2018), which operates LBOs in the U.K. In May 2018, the U.K. government published its decision mandating that the maximum stakes limit on fixed-odds betting terminals be reduced from £100 to £2, which was effective as of April 1, 2019. As a result of this change, LBO operators began to rationalize their retail operations, which among other measures has included closure of certain LBO shops. Consequently, as of October 1, 2019, we concluded that an elevated risk of goodwill impairment existed for our legacy U.K. Gaming reporting unit as adverse changes in projections for future operating results or other key assumptions, such as projected revenue, profit margin, capital expenditures or cash flows associated with investments included in that reporting unit could lead to future goodwill impairments. During the first quarter of 2020, the COVID-19 disruptions resulted in the widespread closures of LBO shops across the U.K., which, along with global economic uncertainty, contributed to further deterioration in business conditions from our 2019 annual goodwill test date. This had an adverse effect on our legacy U.K. Gaming reporting unit, which necessitated performing a quantitative goodwill impairment test during the first quarter of 2020. We performed this quantitative impairment test by comparing the fair value of our legacy U.K. Gaming reporting unit to its carrying value, including goodwill. As described in further detail below, the fair value of our legacy U.K. Gaming reporting unit was determined using a combination of both an income approach, based on the present value of discounted cash flows, and a market approach. Due to current market volatility and limited market data points specific to the nature of our legacy U.K. Gaming reporting unit operations, we placed greater weight on the income approach than on the market approach. As a result of this analysis, during the first quarter of 2020 we recognized a partial impairment charge totaling $54 million, which is the amount by which the carrying value exceeded the estimated fair value. This impairment charge resulted in no tax benefit. We used projections of revenues, profit margin, operating costs, capital expenditures and cash flows that primarily considered general economic and market conditions and estimated future results including the estimated impact of the COVID-19 disruptions. We used a range of different scenarios and derived estimated fair value based on an equal weighting of these scenarios to reflect the economic uncertainty resulting from the COVID-19 disruptions and the timing and magnitude of the economic recovery following the COVID-19 disruptions coupled with the impact of the regulatory change. The following ranges of the key estimates and assumptions were used in the discounted cash flow analysis: • Revenue growth for FY 2021 between negative 9% and negative 20%, an average revenue growth for FY 2022 to FY 2027 between positive 3% and positive 5%, and terminal revenue growth rate of positive 2.0%; • An average profit margin ranging from 13% to 23%; • Assumptions regarding future capital expenditures reflective of maintaining our current customer contracts; and • An overall discount rate ranging from 8.5% to 10.0%. In our market comparable analysis, we considered revenue and EBITDA multiples ranging from 2.1x to 2.7x and 5.7x to 7.5x, respectively, and ultimately selected multiples at the low end of the range. The legacy U.K. Gaming reporting unit is included in our Gaming business segment. The table below reconciles the change in the carrying value of goodwill by business segment for the period from December 31, 2019 to March 31, 2020. Gaming (1) Lottery SciPlay Digital Totals Balance as of December 31, 2019 $ 2,449 $ 349 $ 115 $ 367 $ 3,280 Impairment (54) — — — (54) Foreign currency adjustments (33) (5) — (26) (64) Balance as of March 31, 2020 $ 2,362 $ 344 $ 115 $ 341 $ 3,162 (1) Accumulated goodwill impairment charges for the Gaming segment as of March 31, 2020 were $989 million. |
Software, net
Software, net | 3 Months Ended |
Mar. 31, 2020 | |
Capitalized Computer Software, Net [Abstract] | |
Software, net | Software, net Software, net consisted of the following: As of March 31, 2020 December 31, 2019 Software $ 1,184 $ 1,173 Accumulated amortization (936) (915) Software, net $ 248 $ 258 The following reflects amortization of software included within D&A: Three Months Ended March 31, 2020 2019 Amortization expense $ 29 $ 30 |
Equity Investments
Equity Investments | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Equity Investments Equity investments total ed $263 million and $273 million as of March 31, 2020 and December 31, 2019, respectively. We received distributions and dividends totaling $4 million and $7 million during the three months ended March 31, 2020 and 2019, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, restricted cash, receivables, 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 As of March 31, 2020, 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 mitigate gains or losses associated with the change in expected cash flows due to fluctuations in interest rates on our variable rate debt. 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 million as of March 31, 2020. 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 gain (loss) and interest expense recognized on our interest rate swap contracts: Three Months Ended March 31, 2020 2019 Loss recorded in accumulated other comprehensive loss, net of tax $ (16) $ (5) Interest expense recorded related to interest rate swap contracts 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: Three Months Ended March 31, 2020 2019 Interest expense Total interest expense which reflects the effects of cash flow hedges $ (124) $ (154) Hedged item (5) (5) Derivative designated as hedging instrument 3 5 Cross-Currency Interest Rate Swaps In connection with the February 2018 Refinancing described in Note 15 of our 2019 10-K, we entered into certain cross-currency interest rate swap agreements to achieve more beneficial interest rates by effectively converting $460 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 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 swap’s 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: As of Balance Sheet Line Item March 31, 2020 December 31, 2019 Interest rate swaps (1)(3) Other liabilities $ 32 $ 16 Cross-currency interest rate swaps (2)(3) Other assets 71 41 (1) A loss of $16 million and $6 million for the three months ended March, 31 2020 and 2019, respectively, is reflected in Derivative financial instruments unrealized loss in Other comprehensive (loss) income. (2) A gain of $30 million and $16 million for the three months ended March, 31 2020 and 2019, respectively, is reflected in Foreign currency translation (loss) gain in Other comprehensive (loss) income. (3) The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy. Net Investment Non-derivative Hedge - 2026 Secured Euro Notes For the first quarter of 2020, we designated $190 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 Gain (loss) on remeasurement of debt in our consolidated statements of operations. 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 Consideration Liabilities In connection with our prior acquisitions, we have recorded certain contingent consideration liabilities, of which the values are primarily based on reaching certain earnings-based metrics. 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. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Changes in Stockholders’ Deficit The following tables present certain information regarding our stockholders' deficit as of March 31, 2020 and March 31, 2019. Three Months Ended March 31, 2020 Common Stock Additional Paid in Capital Accumulated Loss Treasury Stock Accumulated Other Comprehensive Loss Noncontrolling interest Total January 1, 2020 $ 1 $ 1,208 $ (2,954) $ (175) $ (292) $ 104 $ (2,108) Net payment in connection with settlement of stock options and RSUs — (1) — — — — (1) Stock-based compensation — 9 — — — — 9 Net loss — — (159) — — 4 (155) Other comprehensive loss — — — — (97) — (97) Impact of ASC 326 adoption — — (6) — — — (6) March 31, 2020 $ 1 $ 1,216 $ (3,119) $ (175) $ (389) $ 108 $ (2,358) Three Months Ended March 31, 2019 Common Stock Additional Paid in Capital Accumulated Loss Treasury Stock Accumulated Other Comprehensive Loss Total January 1, 2019 $ 1 $ 835 $ (2,824) $ (175) $ (300) $ (2,463) Net proceeds of common stock in connection with stock options and RSUs — 2 — — — 2 Stock-based compensation — 11 — — — 11 Net loss — — (24) — — (24) Other comprehensive income — — — — 51 51 March 31, 2019 $ 1 $ 848 $ (2,848) $ (175) $ (249) $ (2,423) Stock Based Compensation The following reflects total stock-based compensation expense recognized under all programs: Three Months Ended March 31, 2020 2019 Related to SGC stock options $ 1 $ 2 Related to SGC RSUs 9 12 Total $ 10 $ 14 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe consider new evidence (both positive and negative) at each reporting date that could affect our view of the future realization of deferred tax assets. Based upon the evaluation of all available evidence, and considering the projected U.S. pre-tax losses for 2020, we maintain a valuation allowance for certain of our U.S. operations as of March 31, 2020. We also maintain other valuation allowances for certain non-U.S. jurisdictions with cumulative losses.The effective income tax rates for the three months ended March 31, 2020 and 2019 were (3)% and (18)%, |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases Our total operating lease expenses for the three months ended March 31, 2020 and 2019 were $8 million and $9 million, respectively. The total amount of variable and short term lease payments incurred during the three months ended March 31, 2020 are immaterial. Supplemental balance sheet and cash flow information related to operating leases is as follows: As of March 31, 2020 December 31, 2019 Operating lease right-of-use assets (1) $ 98 $ 105 Accrued liabilities 25 26 Operating lease liabilities 81 88 Total operating lease liabilities $ 106 $ 114 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases for the three month period ended March 31, 2020 and 2019, respectively $ 8 $ 8 Weighted average remaining lease term, years 5 5 Weighted average discount rate 5 % 5 % (1) Operating lease right-of use assets obtained in exchange for lease obligations were immaterial. Lease liability maturities: Remainder of 2020 2021 2022 2023 2024 Thereafter Less Imputed Interest Total Operating leases $ 22 $ 26 $ 21 $ 16 $ 13 $ 23 $ (15) $ 106 As of March 31, 2020, we did not have material additional operating leases that have not yet commenced. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation We are involved in various routine and other specific legal proceedings, including the following which are described in Note 21 within our 2019 10-K: the Colombia litigation, SNAI litigation, Washington State Matter and Raqqa Matter . There have been no material changes to these matters since the 2019 10-K was filed with the SEC, except as described below. We record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss can be reasonably estimated (although, as discussed below, there may be an exposure to loss in excess of the accrued liability). We evaluate our accruals for legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect (1) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments, (2) the advice and analyses of counsel and (3) the assumptions and judgment of management. Legal costs associated with our legal proceedings are expensed as incurred. We had accrued liabilities of $3 million for all of our legal matters that were contingencies as of March 31, 2020 and December 31, 2019. 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 in Note 21 in our 2019 10-K and this Note 16 as well as those related to the previously disclosed settlement agreement entered into in February 2015 with SNAI S.p.a., as to which a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a range of possible loss, the current estimated range is up to approximately $13 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. TCS John Huxley Matter On March 15, 2019, TCS John Huxley America, Inc., TCS John Huxley Europe Ltd., TCS John Huxley Asia Ltd., and Taiwan Fulgent Enterprise Co., Ltd. brought a civil action in the United States District Court for the Northern District of Illinois against SGC, Bally Technologies, Inc. and SG Gaming. In the complaint, the plaintiffs assert federal antitrust claims arising from the defendants’ procurement of particular U.S. and South African patents. The plaintiffs allege that the defendants used those patents to create an allegedly illegal monopoly in the market for automatic card shufflers sold to regulated casinos in the United States. On April 10, 2019, the defendants filed a motion to dismiss the plaintiffs’ complaint with prejudice. On April 25, 2019, the district court denied the defendants’ motion to dismiss without prejudice pursuant to the court’s local rules, after the plaintiffs advised that they intended to file an amended complaint. The plaintiffs filed their amended complaint on May 3, 2019, and on May 22, 2019, the defendants filed a motion to dismiss the plaintiffs’ amended complaint with prejudice. On March 20, 2020, the district court denied the defendants’ motion to dismiss the plaintiffs’ amended complaint, and the case is proceeding. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss. SciPlay IPO Matter (New York) On or about October 14, 2019, the Police Retirement System of St. Louis filed a putative class action complaint in New York state court against SciPlay, certain of its executives and directors, and SciPlay’s underwriters with respect to its initial public offering (the “PRS Action”). The complaint was amended on November 18, 2019. The plaintiff seeks to represent a class of all persons or entities who acquired Class A common stock of SciPlay pursuant and/or traceable to the Registration Statement filed and issued in connection with SciPlay’s initial public offering, which commenced on or about May 3, 2019. The complaint asserts claims for alleged violations of Sections 11 and 15 of the Securities Act, 15 U.S.C. § 77, and seeks certification of the putative class; compensatory damages of at least $146 million, and the award of the plaintiff’s and the class’s reasonable costs and expenses incurred in the action. On or about December 9, 2019, Hongwei Li filed a putative class action complaint in New York state court asserting substantively similar causes of action under the Securities Act of 1933 and substantially similar factual allegations as those alleged in the PRS Action (the “Li Action”). On December 18, 2019, the New York state court entered a stipulated order consolidating the PRS Action and the Li Action into a single lawsuit. On December 23, 2019, the defendants moved to dismiss the consolidated action. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss, if any. We believe that the claims in the lawsuit are without merit, and intend to vigorously defend against them. Sylebra Matter On October 23, 2019, Sylebra Capital Partners Master Fund, Limited and P Sylebra, Limited (together, “Sylebra”) filed a complaint in Delaware Chancery Court against SGC, SG Gaming, Inc., and certain of SGC’s current and former executives and directors. The complaint asserts claims for alleged breaches of fiduciary duty and alleged aiding and abetting of such alleged breaches of fiduciary duty; for alleged unjust enrichment; for alleged anticipatory breach of Sylebra’s alleged rights under SGC’s prior Restated Certificate of Incorporation (“prior Charter”) and for alleged breach of that prior Charter; for alleged violations of certain Delaware statutes; and for alleged tortious interference with contract. The complaint seeks injunctive relief, declaratory relief, money damages, and the award of the plaintiffs’ costs and expenses incurred in the action. On December 20, 2019, the defendants filed a motion to dismiss Sylebra’s complaint. In response, on January 27, 2020, Sylebra filed an amended complaint, and on February 28, 2020, the defendants filed a motion to dismiss Sylebra’s amended complaint. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the lawsuit are without merit, and intend to vigorously defend against them. SciPlay IPO Matter (Nevada) On or about November 4, 2019, plaintiff John Good filed a putative class action complaint in Nevada state court against SciPlay, certain of its executives and directors, SGC, and SciPlay’s underwriters with respect to SciPlay’s initial public offering. The plaintiff seeks to represent a class of all persons who purchased Class A common stock of SciPlay in or traceable to SciPlay’s initial public offering that it completed on or about May 7, 2019. The complaint asserts claims for alleged violations of Sections 11 and 15 of the Securities Act, 15 U.S.C. § 77, and seeks certification of the putative class; compensatory damages, and the award of the plaintiff’s and the class’s reasonable costs and expenses incurred in the action. On February 27, 2020, the trial court entered a stipulated order that, among other things, stayed the lawsuit pending entry of an order resolving the motion to dismiss that is pending in the SciPlay initial public offering matter in New York state court. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the lawsuit are without merit, and intend to vigorously defend against them. For additional information regarding our pending litigation matters, see Note 21 in our 2019 10-K. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | In the opinion of SGC and its management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations, comprehensive (loss) income and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2019 10-K. Interim results of operations are not necessarily indicative of results of operations to be expected for a full year. |
New Accounting Guidance | New Accounting Guidance - Recently Adopted 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 legacy 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 are 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. We adopted ASC 326 as of January 1, 2020 using the modified retrospective method for all financial assets measured at amortized cost, which resulted in a $6 million cumulative-effect adjustment increase to accumulated loss. See Note 5 for our credit losses policy and the adoption impact of ASC 326 on our consolidated financial statements. The FASB issued ASU No. 2018-13, Fair Value Measurement , and several subsequent amendments (collectively, Topic 820) in 2018. The standard amends the required quantitative and qualitative disclosure requirements for recurring and nonrecurring fair value measurements. We adopted this standard effective January 1, 2020. The adoption of this standard did not have a material impact on our financial statement disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes, to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes, enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years with early adoption permitted. We adopted this standard effective January 1, 2020. The adoption of this guidance did not have a material effect on our consolidated financial statements. |
Revenue From Contract With Cust
Revenue From Contract With Customer (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue, Performance Obligation [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | 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 sheets. 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 retail sales contracts. Revenue is recognized for such contracts upon delivery to our customers, while conversion to cash is based on the retail sale of the underlying ticket to end consumers. As a result, revenue recognition under ASC 606 does not approximate conversion to cash in any periods post-adoption. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenues by Type | The following table disaggregates revenues by type within each of our business segments: Three Months Ended March 31, 2020 2019 Gaming Gaming operations $ 119 $ 152 Gaming machine sales 92 136 Gaming systems 55 74 Table products 52 60 Total $ 318 $ 422 Lottery Instant products $ 136 $ 140 Lottery systems 76 87 Total $ 212 $ 227 SciPlay Mobile $ 101 $ 97 Web and other 17 21 Total $ 118 $ 118 Digital Sports and platform $ 38 $ 30 Gaming and other 39 40 Total $ 77 $ 70 |
Summary of Balances in Receivables and Contract Asset Accounts | The following table summarizes the activity in our contract liabilities for the reporting period: Three Months Ended March 31, 2020 Contract liability balance, beginning of period (1) $ 109 Liabilities recognized during the period 36 Amounts recognized in revenue from beginning balance (49) Contract liability balance, end of period (1) $ 96 (1) Contract liabilities are included within Accrued liabilities and Other long-term liabilities in our consolidated balance sheets. Receivables Contract Assets (1) Beginning of period balance (2) $ 808 $ 121 End of period balance, March 31, 2020 672 133 (1) Contract assets are included primarily within Prepaid expenses, deposits and other current assets in our consolidated balance sheets. (2) The beginning of period balance excludes the impact of adoption of ASC 326. |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Operating Information by Segment | The following tables present our segment information: Three Months Ended March 31, 2020 Gaming Lottery SciPlay Digital Unallocated and Reconciling Items (1) Total Total revenue $ 318 $ 212 $ 118 $ 77 $ — $ 725 AEBITDA 96 78 35 23 (32) $ 200 Reconciling items to consolidated net loss before income taxes: D&A (89) (14) (2) (21) (12) (138) Goodwill impairment (54) — — — — (54) Restructuring and other (12) (5) (1) (1) (3) (22) EBITDA from equity investments (7) (7) Loss from equity investments (2) (2) Interest expense (124) (124) Gain on remeasurement of debt 10 10 Other expense, net (4) (4) Stock-based compensation (10) (10) Net loss before income taxes $ (151) (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. Three Months Ended March 31, 2019 Gaming Lottery SciPlay Digital Unallocated and Reconciling Items (1) Total Total revenue $ 422 $ 227 $ 118 $ 70 $ — $ 837 AEBITDA 215 104 25 13 (29) $ 328 Reconciling items to consolidated net loss before income taxes: D&A (112) (19) (2) (19) (13) (165) Restructuring and other (2) — (1) (3) (1) (7) EBITDA from equity investments (17) (17) Earnings from equity investments 6 6 Interest expense (154) (154) Gain on remeasurement of debt 5 5 Other expense, net (2) (2) Stock-based compensation (14) (14) Net loss before income taxes $ (20) (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. |
Restructuring and other (Tables
Restructuring and other (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Costs | The following table summarizes pre-tax restructuring and other costs for the periods presented: Three Months Ended March 31, 2020 2019 Employee severance and related (1) $ 18 $ 3 Restructuring, integration and other 4 4 Total $ 22 $ 7 (1) The three months ended March 31, 2020 includes $14 million in severance and other benefits granted to employees as a result of COVID-19 related austerity measures. |
Accounts and Notes Receivable_2
Accounts and Notes Receivable and Credit Quality of Receivables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Summary of Components of Accounts and Notes Receivable, Net | As of March 31, 2020 December 31, 2019 Current: Receivables $ 685 $ 791 Allowance for credit losses (61) (36) Current receivables, net 624 755 Long-term: Receivables 57 53 Allowance for credit losses (9) — Long-term receivables, net 48 53 Total receivables, net $ 672 $ 808 |
Summary of Components of Notes Receivable, Net | As of March 31, 2020 Balances over 90 days past due December 31, 2019 Balances over 90 days past due Receivables: U.S. and Canada $ 456 $ 82 $ 534 $ 65 International 286 63 310 55 Total receivables 742 145 844 120 Receivables allowance: U.S. and Canada (29) (21) (13) (8) International (41) (25) (23) (23) Total receivables allowance (70) (46) (36) (31) Receivables, net $ 672 $ 99 $ 808 $ 89 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following as of the dates presented below: As of March 31, 2020 December 31, 2019 Parts and work-in-process $ 149 $ 153 Finished goods 99 91 Total inventories $ 248 $ 244 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property and Equipment | Property and equipment, net consisted of the following: As of March 31, 2020 December 31, 2019 Land $ 15 $ 15 Buildings and leasehold improvements 127 129 Gaming and lottery machinery and equipment 1,005 1,028 Furniture and fixtures 29 31 Construction in progress 29 30 Other property and equipment 261 263 Less: accumulated depreciation (992) (996) Total property and equipment, net $ 474 $ 500 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. Three Months Ended March 31, 2020 2019 Depreciation expense $ 44 $ 58 |
Intangible Assets, net and Go_2
Intangible Assets, net and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite and Indefinite-lived Intangible Assets | The following tables present certain information regarding our intangible assets as of March 31, 2020 and December 31, 2019. As of March 31, 2020 December 31, 2019 Gross Carrying Value Accumulated Amortization Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 1,064 $ (398) $ 666 $ 1,086 $ (383) $ 703 Intellectual property 915 (573) 342 931 (563) 368 Licenses 563 (361) 202 548 (329) 219 Brand names 120 (73) 47 123 (72) 51 Trade names 116 (34) 82 116 (31) 85 Patents and other 24 (15) 9 24 (15) 9 2,802 (1,454) 1,348 2,828 (1,393) 1,435 Non-amortizable intangible assets: Trade names 83 (2) 81 83 (2) 81 Total intangible assets $ 2,885 $ (1,456) $ 1,429 $ 2,911 $ (1,395) $ 1,516 |
Schedule of Amortization Expense | The following reflects intangible amortization expense included within D&A: Three Months Ended March 31, 2020 2019 Amortization expense $ 65 $ 77 The following reflects amortization of software included within D&A: Three Months Ended March 31, 2020 2019 Amortization expense $ 29 $ 30 |
Reconciliation of the Carrying Amount of Goodwill, by Business Segment | The table below reconciles the change in the carrying value of goodwill by business segment for the period from December 31, 2019 to March 31, 2020. Gaming (1) Lottery SciPlay Digital Totals Balance as of December 31, 2019 $ 2,449 $ 349 $ 115 $ 367 $ 3,280 Impairment (54) — — — (54) Foreign currency adjustments (33) (5) — (26) (64) Balance as of March 31, 2020 $ 2,362 $ 344 $ 115 $ 341 $ 3,162 (1) Accumulated goodwill impairment charges for the Gaming segment as of March 31, 2020 were $989 million. |
Software, net (Tables)
Software, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of Software, net | Software, net consisted of the following: As of March 31, 2020 December 31, 2019 Software $ 1,184 $ 1,173 Accumulated amortization (936) (915) Software, net $ 248 $ 258 |
Schedule of Amortization Expense | The following reflects intangible amortization expense included within D&A: Three Months Ended March 31, 2020 2019 Amortization expense $ 65 $ 77 The following reflects amortization of software included within D&A: Three Months Ended March 31, 2020 2019 Amortization expense $ 29 $ 30 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of gains (loss) on interest rate swap contracts | The following table shows the gain (loss) and interest expense recognized on our interest rate swap contracts: Three Months Ended March 31, 2020 2019 Loss recorded in accumulated other comprehensive loss, net of tax $ (16) $ (5) Interest expense recorded related to interest rate swap contracts 2 — |
Schedule of the 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: Three Months Ended March 31, 2020 2019 Interest expense Total interest expense which reflects the effects of cash flow hedges $ (124) $ (154) Hedged item (5) (5) Derivative designated as hedging instrument 3 5 |
Fair value of liabilities measured on recurring basis | The following table shows the fair value of our hedges: As of Balance Sheet Line Item March 31, 2020 December 31, 2019 Interest rate swaps (1)(3) Other liabilities $ 32 $ 16 Cross-currency interest rate swaps (2)(3) Other assets 71 41 (1) A loss of $16 million and $6 million for the three months ended March, 31 2020 and 2019, respectively, is reflected in Derivative financial instruments unrealized loss in Other comprehensive (loss) income. (2) A gain of $30 million and $16 million for the three months ended March, 31 2020 and 2019, respectively, is reflected in Foreign currency translation (loss) gain in Other comprehensive (loss) income. (3) The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy. |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Schedule of Stockholders' Deficit | The following tables present certain information regarding our stockholders' deficit as of March 31, 2020 and March 31, 2019. Three Months Ended March 31, 2020 Common Stock Additional Paid in Capital Accumulated Loss Treasury Stock Accumulated Other Comprehensive Loss Noncontrolling interest Total January 1, 2020 $ 1 $ 1,208 $ (2,954) $ (175) $ (292) $ 104 $ (2,108) Net payment in connection with settlement of stock options and RSUs — (1) — — — — (1) Stock-based compensation — 9 — — — — 9 Net loss — — (159) — — 4 (155) Other comprehensive loss — — — — (97) — (97) Impact of ASC 326 adoption — — (6) — — — (6) March 31, 2020 $ 1 $ 1,216 $ (3,119) $ (175) $ (389) $ 108 $ (2,358) Three Months Ended March 31, 2019 Common Stock Additional Paid in Capital Accumulated Loss Treasury Stock Accumulated Other Comprehensive Loss Total January 1, 2019 $ 1 $ 835 $ (2,824) $ (175) $ (300) $ (2,463) Net proceeds of common stock in connection with stock options and RSUs — 2 — — — 2 Stock-based compensation — 11 — — — 11 Net loss — — (24) — — (24) Other comprehensive income — — — — 51 51 March 31, 2019 $ 1 $ 848 $ (2,848) $ (175) $ (249) $ (2,423) |
Schedule of Stock-based Compensation Expense Recognized | The following reflects total stock-based compensation expense recognized under all programs: Three Months Ended March 31, 2020 2019 Related to SGC stock options $ 1 $ 2 Related to SGC RSUs 9 12 Total $ 10 $ 14 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Operating Lease Information | Supplemental balance sheet and cash flow information related to operating leases is as follows: As of March 31, 2020 December 31, 2019 Operating lease right-of-use assets (1) $ 98 $ 105 Accrued liabilities 25 26 Operating lease liabilities 81 88 Total operating lease liabilities $ 106 $ 114 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases for the three month period ended March 31, 2020 and 2019, respectively $ 8 $ 8 Weighted average remaining lease term, years 5 5 Weighted average discount rate 5 % 5 % (1) Operating lease right-of use assets obtained in exchange for lease obligations were immaterial. |
Maturities of Lease Liabilities | Lease liability maturities: Remainder of 2020 2021 2022 2023 2024 Thereafter Less Imputed Interest Total Operating leases $ 22 $ 26 $ 21 $ 16 $ 13 $ 23 $ (15) $ 106 |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Details) shares in Thousands | May 08, 2020USD ($) | Apr. 09, 2020USD ($) | Mar. 31, 2020USD ($)Segmentshares | Mar. 31, 2019USD ($)shares | Jan. 01, 2020USD ($) |
Subsequent Event [Line Items] | |||||
Available Liquidity | $ 684,000,000 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 483,000,000 | ||||
Number of business segments | Segment | 4 | ||||
Proceeds from Lines of Credit | $ 50,000,000 | $ 40,000,000 | |||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 438.00% | ||||
Debt Instrument, Restrictive Covenants, Total Net Leverage Ratio | 250.00% | ||||
Debt Instrument, Restrictive Covenants, Minimum Fixed Charge Coverage Ratio | 400.00% | ||||
Debt Instrument | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 438.00% | ||||
Debt Instrument, Restrictive Covenants, Total Net Leverage Ratio | 250.00% | ||||
Debt Instrument, Restrictive Covenants, Minimum Fixed Charge Coverage Ratio | 400.00% | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (6,000,000) | ||||
Debt Instrument, Redemption, Period One [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 500.00% | ||||
Debt Instrument Amendment, Restrictive Covenants, First Lien Leverage Ratio | 600.00% | ||||
Debt Instrument | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 500.00% | ||||
Debt Instrument, Redemption, Period Two [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 475.00% | ||||
Debt Instrument Amendment, Restrictive Covenants, First Lien Leverage Ratio | 575.00% | ||||
Debt Instrument | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 475.00% | ||||
Debt Instrument, Redemption, Period Three [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 450.00% | ||||
Debt Instrument Amendment, Restrictive Covenants, First Lien Leverage Ratio | 525.00% | ||||
Debt Instrument | |||||
Debt Instrument, Restrictive Covenants, First Lien Leverage Ratio | 450.00% | ||||
Debt Instrument, Redemption, Period Four [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument Amendment, Restrictive Covenants, First Lien Leverage Ratio | 475.00% | ||||
Debt Instrument, Redemption, Period Five [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument Amendment, Restrictive Covenants, First Lien Leverage Ratio | 450.00% | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Lines of Credit | $ 480,000,000 | ||||
Debt Covenant, Minimum Liquidity Requirement | $ 275,000,000 | ||||
Subsequent Event | London Interbank Offered Rate (LIBOR) [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument Floor Interest Rate | 0.50% | ||||
Subsequent Event | Potential Stepdown [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Covenant, Minimum Liquidity Requirement | $ 200,000,000 | ||||
Subsequent Event | Certain Covenant Instances [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Covenant, Minimum Liquidity Requirement | $ 400,000,000 | ||||
Stock Options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities (in shares) | shares | 1,000 | 2,000 | |||
Restricted Stock Units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities (in shares) | shares | 2,000 | 2,000 | |||
Accounting Standards Update 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 6,000,000 |
Description of the Business a_4
Description of the Business and Summary of Significant Accounting Policies Initial Public Offering - Sub Event (Details) - USD ($) $ in Millions | Apr. 09, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Subsequent Event [Line Items] | |||
Proceeds from Sale of Productive Assets | $ 22 | $ 0 | |
Proceeds from Lines of Credit | $ 50 | $ 40 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from Lines of Credit | $ 480 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue by Type (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 725 | $ 837 |
Instant Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 135 | 140 |
Digital | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 77 | 70 |
Digital | Sports And Platform [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 38 | 30 |
Digital | Gaming And Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 39 | 40 |
Gaming Business Segment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 318 | 422 |
Gaming Business Segment | Gaming Operations [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 119 | 152 |
Gaming Business Segment | Gaming Machine Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 92 | 136 |
Gaming Business Segment | Gaming Systems [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 55 | 74 |
Gaming Business Segment | Table Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 52 | 60 |
Lottery Business Segment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 212 | 227 |
Lottery Business Segment | Instant Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 136 | 140 |
Lottery Business Segment | Lottery Systems [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 76 | 87 |
SciPlay Business Segment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 118 | 118 |
SciPlay Business Segment | Mobile | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 101 | 97 |
SciPlay Business Segment | Web and other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 17 | $ 21 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from External Customer [Line Items] | ||
Rental income revenue outside scope of new revenue standard | $ 74 | $ 96 |
Amounts recognized in revenue | 49 | |
Lottery | Instant Products [Member] | Accounting Standards Update 2014-09 | ||
Revenue from External Customer [Line Items] | ||
Amounts recognized in revenue | $ 19 | $ 23 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change In Contract Liabilities [Roll Forward] | |
Contract liability balance, beginning of period | $ 109 |
Liabilities recognized during the period | 36 |
Amounts recognized in revenue from beginning balance | (49) |
Contract liability balance, end of period | $ 96 |
Revenue Recognition - Balances
Revenue Recognition - Balances in Receivables and Contract Asset Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 672 | $ 808 |
Contract Assets | $ 133 | $ 121 |
Business Segments - Additional
Business Segments - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of business segments | 4 |
Business Segments - Schedule of
Business Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 725 | $ 837 |
AEBITDA | 200 | 328 |
Reconciling items to consolidated net loss before income taxes: | ||
D&A | (138) | (165) |
Restructuring and other | (22) | (7) |
EBITDA from equity investments | (7) | (17) |
(Loss) earnings from equity investments | (2) | 6 |
Interest expense | (124) | (154) |
Gain (Loss) on Extinguishment of Debt | 10 | 5 |
Gain on remeasurement of debt | 10 | 5 |
Other expense, net | (4) | (2) |
Stock-based compensation | (10) | (14) |
Net income (loss) before income taxes | (151) | (20) |
Goodwill, Impairment Loss | 54 | 0 |
Unallocated and Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
AEBITDA | (32) | (29) |
Reconciling items to consolidated net loss before income taxes: | ||
D&A | (12) | (13) |
Restructuring and other | (3) | (1) |
Goodwill, Impairment Loss | 0 | |
Digital | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 77 | 70 |
Reconciling items to consolidated net loss before income taxes: | ||
Goodwill, Impairment Loss | 0 | |
Digital | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 77 | 70 |
AEBITDA | 23 | 13 |
Reconciling items to consolidated net loss before income taxes: | ||
D&A | (21) | (19) |
Restructuring and other | (1) | (3) |
Goodwill, Impairment Loss | 0 | |
Gaming Business Segment | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 318 | 422 |
Reconciling items to consolidated net loss before income taxes: | ||
Goodwill, Impairment Loss | 54 | |
Gaming Business Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 318 | 422 |
AEBITDA | 96 | 215 |
Reconciling items to consolidated net loss before income taxes: | ||
D&A | (89) | (112) |
Restructuring and other | (12) | (2) |
Goodwill, Impairment Loss | 54 | |
Lottery Business Segment | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 212 | 227 |
Lottery Business Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 212 | 227 |
AEBITDA | 78 | 104 |
Reconciling items to consolidated net loss before income taxes: | ||
D&A | (14) | (19) |
Restructuring and other | (5) | 0 |
Goodwill, Impairment Loss | 0 | |
SciPlay Business Segment | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 118 | 118 |
Reconciling items to consolidated net loss before income taxes: | ||
Goodwill, Impairment Loss | 0 | |
SciPlay Business Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 118 | 118 |
AEBITDA | 35 | 25 |
Reconciling items to consolidated net loss before income taxes: | ||
D&A | (2) | (2) |
Restructuring and other | (1) | $ (1) |
Goodwill, Impairment Loss | $ 0 |
Restructuring and other (Detail
Restructuring and other (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | $ 22 | $ 7 |
Employee severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | 18 | 3 |
Restructuring, integration and other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | $ 4 | $ 4 |
Accounts and Notes Receivable_3
Accounts and Notes Receivable and Credit Quality of Receivables - Components of Accounts and Notes Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current: | ||||
Receivables | $ 685 | $ 791 | ||
Allowance for credit losses | (61) | (36) | ||
Current receivables, net | 624 | 755 | ||
Long-term: | ||||
Receivables | 48 | 53 | ||
Total receivables, net | 672 | 808 | ||
Financing Receivable, Allowance for Credit Losses | 70 | 42 | $ 38 | $ 40 |
Financing Receivable, Gross | 57 | 53 | ||
Financing Receivable, Allowance for Credit Loss, Noncurrent | $ 9 | $ 0 |
Accounts and Notes Receivable_4
Accounts and Notes Receivable and Credit Quality of Receivables - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 672 | $ 808 |
Argentina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Proceeds from collection of accounts and notes receivable, net | 4 | |
Financing Receivable, Deferred Income | 12 | |
Peru | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Proceeds from collection of accounts and notes receivable, net | 1 | |
Financing Receivable, Deferred Income | 7 | |
Notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 672 | $ 808 |
Accounts and Notes Receivable_5
Accounts and Notes Receivable and Credit Quality of Receivables - Components of Notes Receivable, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | $ 57 | $ 53 | ||
Notes receivable allowance | (70) | (42) | $ (38) | $ (40) |
Total receivables, net | 672 | 808 | ||
Mexico | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Proceeds from collection of accounts and notes receivable, net | 7 | |||
Peru | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Proceeds from collection of accounts and notes receivable, net | 1 | |||
Argentina | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Proceeds from collection of accounts and notes receivable, net | 4 | |||
Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 742 | 844 | ||
Notes receivable allowance | (70) | (36) | ||
Total receivables, net | 672 | 808 | ||
U.S. and Canada | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 456 | 534 | ||
Notes receivable allowance | (29) | (13) | ||
International | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable allowance | (41) | (28) | ||
International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 286 | 310 | ||
Notes receivable allowance | (41) | (23) | ||
Balances over 90 days past due | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 145 | 120 | ||
Notes receivable allowance for balances over 90 days past due | (46) | (31) | ||
Notes receivable, net, balances over 90 days past due | 99 | 89 | ||
Balances over 90 days past due | U.S. and Canada | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 82 | 65 | ||
Notes receivable allowance for balances over 90 days past due | (21) | (8) | ||
Balances over 90 days past due | International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 63 | 55 | ||
Notes receivable allowance for balances over 90 days past due | $ (25) | $ (23) |
Accounts and Notes Receivable_6
Accounts and Notes Receivable and Credit Quality of Receivables - Allowance for Notes Receivable Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Allowance for notes receivable | ||
Financing Receivable, Allowance for Credit Loss | $ (42) | $ (40) |
Provision for Loan, Lease, and Other Losses | (28) | (1) |
Financing Receivable, Allowance for Credit Loss, Recovery | 0 | 3 |
Financing Receivable, Allowance for Credit Loss | (70) | $ (38) |
Allowance for Loan and Lease Losses, Period Increase (Decrease) | 28 | |
Notes receivable | ||
Allowance for notes receivable | ||
Financing Receivable, Allowance for Credit Loss | (36) | |
Financing Receivable, Allowance for Credit Loss | $ (70) |
Accounts and Notes Receivable_7
Accounts and Notes Receivable and Credit Quality of Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Financing Receivable, Allowance for Credit Losses | $ 70 | $ 38 | $ 42 | $ 40 | |
Provision for Loan, Lease, and Other Losses | 28 | 1 | |||
Financing Receivable, Allowance for Credit Loss, Recovery | 0 | $ 3 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (6) | ||||
Allowance for Loan and Lease Losses, Period Increase (Decrease) | 28 | ||||
Extended Maturity [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounts Receivable, before Allowance for Credit Loss | 157 | ||||
Accounts Receivable, before Allowance for Credit Loss | $ 157 | ||||
Balances over 90 days past due | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Financing Receivable, Percent Past Due | 15.00% | 11.00% | |||
Accounting Standards Update 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 6 | ||||
International | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Financing Receivable, Allowance for Credit Losses | $ 41 | $ 28 | |||
Provision for Loan, Lease, and Other Losses | 13 | ||||
Financing Receivable, Allowance for Credit Loss, Recovery | 0 | ||||
U.S. and Canada | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Financing Receivable, Allowance for Credit Losses | 29 | $ 14 | |||
Provision for Loan, Lease, and Other Losses | 15 | ||||
Financing Receivable, Allowance for Credit Loss, Recovery | 0 | ||||
Mexico | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Proceeds from collection of accounts and notes receivable, net | 7 | ||||
Financing Receivable, Deferred Income | 25 | ||||
Peru | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Proceeds from collection of accounts and notes receivable, net | 1 | ||||
Financing Receivable, Deferred Income | 7 | ||||
Argentina | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Proceeds from collection of accounts and notes receivable, net | 4 | ||||
Financing Receivable, Deferred Income | $ 12 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Parts and work-in-process | $ 149 | $ 153 |
Finished goods | 99 | 91 |
Total inventories | $ 248 | $ 244 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | $ (992) | $ (996) | |
Total property and equipment, net | 474 | 500 | |
Depreciation expense | 44 | $ 58 | |
Proceeds from Sale of Property Held-for-sale | 22 | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 15 | 15 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 127 | 129 | |
Gaming and lottery machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,005 | 1,028 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 29 | 31 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 29 | 30 | |
Other property and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 261 | $ 263 |
Intangible Assets, net and Go_3
Intangible Assets, net and Goodwill - Schedule of Finite and Indefinite-lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | $ 2,802 | $ 2,828 | |
Amortizable intangible assets, accumulated amortization | (1,454) | (1,393) | |
Amortizable intangible assets, net balance | 1,348 | 1,435 | |
Non-amortizable intangible assets: | |||
Total intangible assets, gross carrying value | 2,885 | 2,911 | |
Total intangible assets, accumulated amortization (excluding goodwill) | (1,456) | (1,395) | |
Total intangible assets, net | 1,429 | 1,516 | |
Goodwill, Impairment Loss | 54 | $ 0 | |
U.K. Gaming [Member] | |||
Non-amortizable intangible assets: | |||
Goodwill, Impairment Loss | 54 | ||
Trade names | |||
Non-amortizable intangible assets: | |||
Non-amortizable intangible assets, Gross Carrying Value | 83 | 83 | |
Non-amortizable intangible assets, Accumulated Amortization | (2) | (2) | |
Non-amortizable intangible assets, Net Balance | 81 | 81 | |
Customer relationships | |||
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | 1,064 | 1,086 | |
Amortizable intangible assets, accumulated amortization | (398) | (383) | |
Amortizable intangible assets, net balance | 666 | 703 | |
Intellectual property | |||
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | 915 | 931 | |
Amortizable intangible assets, accumulated amortization | (573) | (563) | |
Amortizable intangible assets, net balance | 342 | 368 | |
Licenses | |||
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | 563 | 548 | |
Amortizable intangible assets, accumulated amortization | (361) | (329) | |
Amortizable intangible assets, net balance | 202 | 219 | |
Brand names | |||
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | 120 | 123 | |
Amortizable intangible assets, accumulated amortization | (73) | (72) | |
Amortizable intangible assets, net balance | 47 | 51 | |
Trade names | |||
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | 116 | 116 | |
Amortizable intangible assets, accumulated amortization | (34) | (31) | |
Amortizable intangible assets, net balance | 82 | 85 | |
Patents and other | |||
Amortizable intangible assets: | |||
Amortizable intangible assets, gross carrying value | 24 | 24 | |
Amortizable intangible assets, accumulated amortization | (15) | (15) | |
Amortizable intangible assets, net balance | $ 9 | $ 9 |
Intangible Assets, net and Go_4
Intangible Assets, net and Goodwill - Intangible Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 65 | $ 77 |
Intangible Assets, net and Go_5
Intangible Assets, net and Goodwill - Reconciliation of the Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | $ 3,280 | |
Goodwill, Impairment Loss | (54) | $ 0 |
Foreign currency adjustments | (64) | |
Balance at the end of the period | 3,162 | |
Gaming(1) | ||
Goodwill [Roll Forward] | ||
Goodwill, Impaired, Accumulated Impairment Loss | 989 | |
Lottery | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 349 | |
Foreign currency adjustments | (5) | |
Balance at the end of the period | 344 | |
Digital | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 367 | |
Goodwill, Impairment Loss | 0 | |
Foreign currency adjustments | (26) | |
Balance at the end of the period | 341 | |
Gaming Business Segment | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 2,449 | |
Goodwill, Impairment Loss | (54) | |
Foreign currency adjustments | (33) | |
Balance at the end of the period | 2,362 | |
SciPlay Business Segment | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 115 | |
Goodwill, Impairment Loss | 0 | |
Foreign currency adjustments | 0 | |
Balance at the end of the period | 115 | |
Lottery Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Impairment Loss | $ 0 |
Intangible Assets, net and Go_6
Intangible Assets, net and Goodwill - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue, Estimated Terminal Growth Rate [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Revenue Growth | 2.00% |
Minimum [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Profit Margin | 13.00% |
Goodwill, Fair Value Input, Discount Rate | 8.50% |
Minimum [Member] | Revenue Growth Estimate, FY 2021 [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Revenue Growth | (9.00%) |
Minimum [Member] | Revenue Growth Estimate, FY2022 to FY2027 [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Revenue Growth | (3.00%) |
Minimum [Member] | Measurement Input, Revenue Multiple [Member] | |
Goodwill [Line Items] | |
Goodwill, Market Comparable Analysis, Measurement Input | 210.00% |
Minimum [Member] | Measurement Input, EBITDA Multiple [Member] | |
Goodwill [Line Items] | |
Goodwill, Market Comparable Analysis, Measurement Input | 570.00% |
Maximum [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Profit Margin | 23.00% |
Goodwill, Fair Value Input, Discount Rate | 10.00% |
Maximum [Member] | Revenue Growth Estimate, FY 2021 [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Revenue Growth | (20.00%) |
Maximum [Member] | Revenue Growth Estimate, FY2022 to FY2027 [Member] | |
Goodwill [Line Items] | |
Goodwill, Fair Value Input, Revenue Growth | (5.00%) |
Maximum [Member] | Measurement Input, Revenue Multiple [Member] | |
Goodwill [Line Items] | |
Goodwill, Market Comparable Analysis, Measurement Input | 270.00% |
Maximum [Member] | Measurement Input, EBITDA Multiple [Member] | |
Goodwill [Line Items] | |
Goodwill, Market Comparable Analysis, Measurement Input | 750.00% |
Software, net (Details)
Software, net (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Capitalized Computer Software, Net [Abstract] | |||
Software | $ 1,184 | $ 1,173 | |
Accumulated amortization | (936) | (915) | |
Software, net | 248 | $ 258 | |
Amortization expense | $ 29 | $ 30 |
Equity Investments (Details)
Equity Investments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity investments | $ 263 | $ 273 | |
Distributed earnings from equity investments | $ 4 | $ 7 |
Long-Term and Other Debt - Addi
Long-Term and Other Debt - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Instrument | ||
Gain (Loss) on Extinguishment of Debt | $ 10 | $ 5 |
Long-Term and Other Debt - Sche
Long-Term and Other Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Feb. 28, 2018 | |
Debt Instrument | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 31 | ||
Long-term Debt, Gross | 8,777 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (112) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 8,665 | $ 8,725 | |
Less: current portion of long-term debt | (45) | (45) | |
Long-term Debt and Lease Obligation | 8,620 | 8,680 | |
Fair value of debt | 6,631 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 383 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 42 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 42 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 4,089 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 4,180 | ||
2025 Secured Notes | |||
Debt Instrument | |||
Debt interest rate | 2.946% | ||
Senior Secured and Unsecured Notes, Maturing 2026 | |||
Debt Instrument | |||
Reduction of debt due to change in foreign currency exchange rate | (82) | ||
Gain (loss) on remeasurement of debt | $ 10 | ||
Senior Notes | 2025 Secured Notes | |||
Debt Instrument | |||
Debt interest rate | 5.00% | 2.946% | |
Long-term Debt, Gross | $ 1,250 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (14) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 1,236 | 1,235 | |
Principal debt amount | $ 460 | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 1,250 | ||
Senior Notes | 2026 Secured Euro Notes | |||
Debt Instrument | |||
Debt interest rate | 3.375% | ||
Long-term Debt, Gross | $ 356 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (4) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 352 | 359 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 274 | ||
Senior Notes | 2026 Unsecured Euro Notes | |||
Debt Instrument | |||
Debt interest rate | 5.50% | ||
Long-term Debt, Gross | $ 274 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (4) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 270 | 276 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 356 | ||
Senior Notes | Senior Unsecured Notes, Maturing 2026 [Member] | |||
Debt Instrument | |||
Debt interest rate | 8.25% | ||
Long-term Debt, Gross | $ 1,100 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (14) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 1,086 | 1,085 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 1,100 | ||
Senior Notes | Senior Unsecured Notes Maturing 2028 | |||
Debt Instrument | |||
Debt interest rate | 7.00% | ||
Long-term Debt, Gross | $ 700 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (10) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 690 | 690 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 700 | ||
Senior Notes | Senior Unsecured Notes Maturing 2029 | |||
Debt Instrument | |||
Debt interest rate | 7.25% | ||
Long-term Debt, Gross | $ 500 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (7) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 493 | 493 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 500 | ||
Subordinated Notes | Senior Subordinated Notes, Maturing 2021 [Member] | |||
Debt Instrument | |||
Debt interest rate | 6.625% | ||
Long-term Debt, Gross | $ 341 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (2) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 339 | 339 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | $ 341 | ||
Capital Lease Obligations | Capital lease obligations as of March 31, 2019 payable monthly through 2019 and other | |||
Debt Instrument | |||
Debt interest rate | 4.652% | ||
Long-term Debt, Gross | $ 10 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 0 | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 10 | 11 | |
Revolving Credit Facility | Senior Secured Credit Facilities | Senior Secured Credit Facility, Term Loan B-5, Maturing 2024 [Member] | |||
Debt Instrument | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 31 | ||
Long-term Debt, Gross | 4,091 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (57) | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 4,034 | 4,042 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 42 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 42 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 42 | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 3,934 | ||
Revolving Credit Facility | Senior Secured Credit Facilities | Senior Secured Revolver, Maturing 2024 | |||
Debt Instrument | |||
Long-term Debt, Gross | 155 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 0 | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | 155 | 195 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 155 | ||
SciPlay Revolver, Maturing 2024 [Member] [Member] | Senior Secured Credit Facilities | Senior Secured Revolver, Maturing 2024 | |||
Debt Instrument | |||
Long-term Debt, Gross | 0 | ||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 0 | ||
Long-term Debt and Lease Obligation, Including Current Maturities, Total | $ 0 | $ 0 |
Long-Term and Other Debt - Loss
Long-Term and Other Debt - Loss on Debt Financing Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Gain (Loss) on Extinguishment of Debt | $ (10) | $ (5) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Feb. 28, 2018 | |
Derivative [Line Items] | |||
Amount expected to be reclassified during next 12 months | $ 0 | ||
Contingent consideration | 10,000,000 | $ 14,000,000 | |
Accrued Liabilities | |||
Derivative [Line Items] | |||
Contingent consideration | $ 3,000,000 | $ 7,000,000 | |
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swap | |||
Derivative [Line Items] | |||
Derivative average fixed interest rate | 2.4418% | ||
Derivative, Notional Amount | $ 800,000,000 | ||
Senior Secured Notes, Maturing 2025 | |||
Derivative [Line Items] | |||
Debt interest rate | 2.946% | ||
Senior Secured Notes, Maturing 2025 | Senior Notes | |||
Derivative [Line Items] | |||
Debt interest rate | 5.00% | 2.946% | |
Senior Secured Notes, Maturing 2025 | Senior Notes | Cross-currency interest rate swaps | |||
Derivative [Line Items] | |||
Long-term debt | $ 460,000,000 | ||
Senior Secured Euro Notes, Maturing 2026 | Net Investment Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Designated as net investment non-derivative hedge | $ 190,000,000 | ||
Senior Secured Euro Notes, Maturing 2026 | Senior Notes | |||
Derivative [Line Items] | |||
Debt interest rate | 3.375% |
Fair Value Measurements - Gains
Fair Value Measurements - Gains (Loss) and Interest Expense on Interest Rate Swap Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recorded in accumulated other comprehensive loss, net of tax | $ (3) | $ (5) |
Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recorded in accumulated other comprehensive loss, net of tax | (16) | (5) |
Interest expense recorded related to interest rate swap contracts | $ 2 | $ 0 |
Fair Value Measurements - Effec
Fair Value Measurements - Effect of Interest Rate Swap Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Total interest expense which reflects the effects of cash flow hedges | $ (124) | $ (154) |
Hedged item | (5) | (5) |
Derivative designated as hedging instrument | $ 3 | $ 5 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivatives, Fair Value [Line Items] | |||
Gain (loss) recorded in other comprehensive income | $ 3 | $ 5 | |
Interest rate swap | |||
Derivatives, Fair Value [Line Items] | |||
Gain (loss) recorded in other comprehensive income | 16 | $ 5 | |
Interest rate swap | Other liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative fair value | 32 | $ 16 | |
Gain (loss) recorded in other comprehensive income | (6) | ||
Interest rate swap | Other assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative fair value | 71 | $ 41 | |
Cross-currency interest rate swaps | Other assets | |||
Derivatives, Fair Value [Line Items] | |||
Gain (loss) recorded in other comprehensive income | $ 16 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | $ (2,108) | $ (2,463) | |
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (6) | ||
Net payment in connection with settlement of stock options and RSUs | (1) | 2 | |
Stock-based compensation | 9 | 11 | |
Net loss | (155) | (24) | |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 4 | 0 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (97) | 51 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | (2,358) | (2,423) | |
Share-based compensation expense | 10 | 14 | |
Related to SGC stock options | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Share-based compensation expense | 1 | 2 | |
Related to SGC RSUs | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Share-based compensation expense | 9 | 12 | |
Common Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | 1 | 1 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | 1 | 1 | |
Additional Paid in Capital | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | 1,208 | 835 | |
Net payment in connection with settlement of stock options and RSUs | (1) | 2 | |
Stock-based compensation | 9 | 11 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | 1,216 | 848 | |
Accumulated Loss | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | (2,954) | (2,824) | |
Net loss | (159) | (24) | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | (3,119) | (2,848) | |
Treasury Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | (175) | (175) | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | (175) | (175) | |
Accumulated Other Comprehensive Loss | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | (292) | (300) | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (97) | 51 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | (389) | $ (249) | |
Noncontrolling Interest | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance | 104 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance | $ 108 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Goodwill, Impairment Loss | $ 54,000,000 | $ 0 |
Tax Adjustments, Settlements, and Unusual Provisions | $ 0.18 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Range [Axis] [Line Items] | |||
Operating Lease, Weighted Average Remaining Lease Term | 5 years | 5 years | |
Operating lease expenses | $ 8 | $ 9 |
Leases - Supplemental Operating
Leases - Supplemental Operating Lease Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 98 | $ 105 | |
Accrued liabilities | 25 | 26 | |
Operating lease liabilities | 81 | 88 | |
Operating lease liabilities | 106 | $ 114 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases for the three month period ended March 31, 2020 and 2019, respectively | $ 8 | $ 8 | |
Operating Lease, Weighted Average Remaining Lease Term | 5 years | 5 years | |
Weighted average discount rate | 5.00% | 5.00% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2019 | $ 22 |
2020 | 26 |
2021 | 21 |
2022 | 16 |
2023 | 13 |
Thereafter | 23 |
Less Imputed Interest | (15) |
Total | $ 106 |
Litigation (Details)
Litigation (Details) - USD ($) $ in Millions | Oct. 14, 2019 | Mar. 31, 2020 |
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 3 | |
Contractual penalty | $ 13 | |
SciPlay IPO Matter [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 146 |
Financial Information for Guara
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets [Abstract] | ||
Cash and cash equivalents | $ 334 | $ 313 |
Restricted cash | 55 | 51 |
Receivables, net of allowance for credit losses of $61 and $36, respectively | 624 | 755 |
Inventories | 248 | 244 |
Prepaid expenses, deposits and other current assets | 235 | 252 |
Property and equipment, net | 474 | 500 |
Operating lease right-of-use assets | 98 | 105 |
Goodwill | 3,162 | 3,280 |
Intangible assets, net | 1,429 | 1,516 |
Software, net | 248 | 258 |
Total assets | 7,458 | 7,809 |
Liabilities and Equity [Abstract] | ||
Debt, Current | 45 | 45 |
Long-term Debt and Lease Obligation | 8,620 | 8,680 |
Operating lease liabilities | 81 | 88 |
Stockholders' Equity Attributable to Parent | (2,466) | (2,212) |
Liabilities and Equity, Total | 7,458 | 7,809 |
Non-current restricted cash | $ 11 | $ 11 |
Financial Information for Gua_2
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Financial Statements | ||
Selling, general and administrative | $ 198 | $ 186 |
Research and development | 51 | 49 |
Depreciation, amortization and impairments | 138 | 165 |
Restructuring and other | 22 | 7 |
Operating Income (Loss), Total | (32) | 123 |
Interest expense | (124) | (154) |
Gain (Loss) on Extinguishment of Debt | 10 | 5 |
Gain on remeasurement of debt | 10 | 5 |
Net income (loss) before income taxes | (151) | (20) |
Income Tax Expense (Benefit) | (4) | (4) |
Net Income (Loss) Attributable to Parent, Total | (155) | (24) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (97) | 51 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total | $ (256) | $ 27 |
Financial Information for Gua_3
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | $ 120 | $ 167 |
Cash flows from investing activities: | ||
Net Cash Provided by (Used in) Investing Activities, Total | (31) | (64) |
Cash flows from financing activities: | ||
Net Cash Provided by (Used in) Financing Activities, Total | (59) | 942 |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (5) | 1 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total | 25 | 1,046 |
Cash, cash equivalents and restricted cash, beginning of period | 375 | 220 |
Cash, cash equivalents and restricted cash, end of period | $ 400 | $ 1,266 |