XML 21 R23.htm IDEA: XBRL DOCUMENT v3.19.3
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries
 9 Months Ended
Sep. 30, 2019
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract]  
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries
We conduct substantially all of our business through our U.S. and foreign subsidiaries. As of September 30, 2019, SGI’s obligations under the Secured Notes (other than the 2022 Secured Notes, which were redeemed in March 2018), the Unsecured Notes and the Subordinated Notes were fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI, and certain immaterial subsidiaries of SGC. The guarantees of our Secured Notes (other than the 2022 Secured Notes, which were redeemed in March 2018), Unsecured Notes and Subordinated Notes will terminate under the following customary circumstances: (1) the sale or disposition of the capital stock of the guarantor (including by consolidation or merger of the guarantor into another person); (2) the liquidation or dissolution of the guarantor; (3) the defeasance or satisfaction and discharge of the notes; (4) the release of the guarantor from any guarantees of indebtedness of SGC and SGI; and (5) the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the respective notes.
Presented below is condensed consolidating financial information for (1) SGC, (2) SGI, (3) the Guarantor Subsidiaries and (4) the Non-Guarantor Subsidiaries as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018. The condensed consolidating financial information has been presented to show the nature
of assets held, results of operations and cash flows of SGC, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the current guarantee structures of the Secured Notes (other than the 2022 Secured Notes, which were redeemed in March 2018), the Unsecured Notes and the Subordinated Notes were in effect at the beginning of the periods presented.
     The condensed consolidating financial information reflects the investments of SGC in SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries using the equity method of accounting. They also reflect the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries. Net changes in intercompany due from/due to accounts are reported in the accompanying Supplemental Condensed Consolidating Statements of Cash Flows as investing activities if the applicable entities have a net investment (asset) in intercompany accounts and as a financing activity if the applicable entities have a net intercompany borrowing (liability) balance.    

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2019
 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
194

 
$
—

 
$
—

 
$
170

 
$
(1
)
 
$
363

Restricted cash
—

 
1

 
37

 
8

 
—

 
46

Accounts receivable, net
—

 
105

 
193

 
338

 
—

 
636

Notes receivable, net
—

 
—

 
110

 
13

 
—

 
123

Inventories
—

 
53

 
114

 
103

 
(13
)
 
257

Prepaid expenses, deposits and other current assets
6

 
57

 
70

 
92

 
1

 
226

Property and equipment, net
32

 
95

 
223

 
197

 
(31
)
 
516

Operating lease right-of-use asset
1

 
24

 
32

 
50

 
—

 
107

Investment in subsidiaries
3,147

 
992

 
1,162

 
—

 
(5,301
)
 
—

Goodwill
—

 
240

 
1,897

 
1,114

 
—

 
3,251

Intangible assets, net
34

 
34

 
1,137

 
374

 
—

 
1,579

Intercompany balances
—

 
5,871

 
70

 
—

 
(5,941
)
 
—

Software, net
59

 
36

 
98

 
77

 
—

 
270

Other assets(2)
105

 
436

 
45

 
385

 
(438
)
 
533

Total assets
$
3,578

 
$
7,944

 
$
5,188

 
$
2,921

 
$
(11,724
)
 
$
7,907

Liabilities and stockholders’ (deficit) equity
 
 
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
$
—

 
$
285

 
$
2

 
$
1

 
$
—

 
$
288

Other current liabilities
79

 
215

 
250

 
246

 
(33
)
 
757

Long-term debt, excluding current portion
—

 
8,474

 
8

 
—

 
—

 
8,482

Operating lease liabilities
1

 
20

 
27

 
43

 
—

 
91

Other long-term liabilities
92

 
25

 
593

 
174

 
(470
)
 
414

Intercompany balances
5,629

 
—

 
—

 
312

 
(5,941
)
 
—

Total SGC stockholders’ (deficit) equity
(2,223
)
 
(1,075
)
 
4,308

 
2,047

 
(5,280
)
 
(2,223
)
Noncontrolling interest
—

 
—

 
—

 
98

 
—

 
98

Total liabilities and total stockholders’ (deficit) equity
$
3,578

 
$
7,944

 
$
5,188

 
$
2,921

 
$
(11,724
)
 
$
7,907

(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes and the Secured Notes.
(2) Includes $11 million and $1 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively.
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2018
 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
74

 
$
1

 
$
—

 
$
94

 
$
(1
)
 
$
168

Restricted cash
—

 
1

 
32

 
6

 
—

 
39

Accounts receivable, net
—

 
79

 
205

 
315

 
—

 
599

Notes receivable, net
—

 
—

 
101

 
13

 
—

 
114

Inventories
—

 
40

 
82

 
111

 
(17
)
 
216

Prepaid expenses, deposits and other current assets
6

 
63

 
92

 
72

 
—

 
233

Property and equipment, net
31

 
112

 
219

 
218

 
(33
)
 
547

Investment in subsidiaries
2,836

 
975

 
1,093

 
—

 
(4,904
)
 
—

Goodwill
—

 
240

 
1,897

 
1,143

 
—

 
3,280

Intangible assets, net
43

 
34

 
1,291

 
441

 
—

 
1,809

Intercompany balances
—

 
6,054

 
—

 
—

 
(6,054
)
 
—

Software, net
58

 
39

 
128

 
60

 
—

 
285

Other assets(2)
110

 
404

 
46

 
308

 
(440
)
 
428

Total assets
$
3,158

 
$
8,042

 
$
5,186

 
$
2,781

 
$
(11,449
)
 
$
7,718

Liabilities and stockholders’ (deficit) equity
 
 
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
$
—

 
$
42

 
$
—

 
$
3

 
$
—

 
$
45

Other current liabilities
64

 
162

 
248

 
254

 
(26
)
 
702

Long-term debt, excluding current portion
—

 
8,991

 
—

 
1

 
—

 
8,992

Other long-term liabilities
106

 
8

 
637

 
172

 
(481
)
 
442

Intercompany balances
5,451

 
—

 
49

 
554

 
(6,054
)
 
—

Total SGC stockholders’ (deficit) equity
(2,463
)
 
(1,161
)
 
4,252

 
1,797

 
(4,888
)
 
(2,463
)
Total liabilities and total stockholders’ (deficit) equity
$
3,158

 
$
8,042

 
$
5,186

 
$
2,781

 
$
(11,449
)
 
$
7,718

(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes (other than the 2026 Unsecured Notes, which were not issued until March 2019) and the Secured Notes.
(2) Includes $12 million and $1 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Three Months Ended September 30, 2019
 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Revenue
$
—

 
$
139

 
$
376

 
$
419

 
$
(79
)
 
$
855

Cost of services, cost of product sales and cost of instant products(2)
—

 
93

 
119

 
170

 
(65
)
 
317

SG&A
34

 
9

 
55

 
88

 
(11
)
 
175

R&D
—

 
1

 
22

 
24

 
—

 
47

D&A
16

 
8

 
99

 
44

 
(5
)
 
162

Restructuring and other
—

 
1

 
2

 
8

 
—

 
11

Operating (loss) income
(50
)
 
27

 
79

 
85

 
2

 
143

Interest expense
—

 
(146
)
 
—

 
—

 
—

 
(146
)
Gain on remeasurement of debt
—

 
19

 
—

 
—

 
—

 
19

Other income (expense), net
14

 
129

 
(117
)
 
(27
)
 
—

 
(1
)
Net (loss) income before equity in income of subsidiaries and income taxes
(36
)
 
29

 
(38
)
 
58

 
2

 
15

Equity in income of subsidiaries
36

 
9

 
22

 
—

 
(67
)
 
—

Income tax benefit (expense)
14

 
(8
)
 
8

 
(11
)
 
—

 
3

Net income (loss)
14

 
30

 
(8
)
 
47

 
(65
)
 
18

Less: Net income attributable to noncontrolling interest
—

 
—

 
—

 
4

 
—

 
4

Net income (loss) attributable to SGC
$
14

 
$
30

 
$
(8
)
 
$
43

 
$
(65
)
 
$
14

Net income (loss)
$
14

 
$
30

 
$
(8
)
 
$
47

 
$
(65
)
 
$
18

Other comprehensive (loss) income
(35
)
 
30

 
(1
)
 
(61
)

32


(35
)
Total comprehensive (loss) income
(21
)
 
60

 
(9
)
 
(14
)
 
(33
)
 
(17
)
Less: comprehensive income attributable to noncontrolling interest
—

 
—

 
—

 
4

 
—

 
4

Comprehensive (loss) income attributable to SGC
$
(21
)
 
$
60

 
$
(9
)
 
$
(18
)
 
$
(33
)
 
$
(21
)
(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes and the Secured Notes.
(2) Excludes D&A.
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Three Months Ended September 30, 2018
 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Revenue
$
—

 
$
138

 
$
404

 
$
361

 
$
(82
)
 
$
821

Cost of services, cost of product sales and cost of instant products(2)
—

 
90

 
119

 
160

 
(68
)
 
301

SG&A
38

 
12

 
57

 
76

 
(13
)
 
170

R&D
—

 
—

 
21

 
29

 
—

 
50

D&A
11

 
9

 
106

 
45

 
(5
)
 
166

Restructuring and other
320

 
3

 
4

 
12

 
—

 
339

Operating (loss) income
(369
)
 
24

 
97

 
39

 
4

 
(205
)
Interest expense
—

 
(147
)
 
—

 
—

 
—

 
(147
)
Gain on remeasurement of debt
—

 
(4
)
 
—

 
—

 
—

 
(4
)
Other income (expense), net
16

 
130

 
(123
)
 
(19
)
 
—

 
4

Net (loss) income before equity in income of subsidiaries and income taxes
(353
)
 
3

 
(26
)
 
20

 
4

 
(352
)
Equity in income (loss) of subsidiaries
—

 
4

 
(10
)
 
—

 
6

 
—

Income tax benefit (expense)
1

 
(1
)
 
6

 
(6
)
 
—

 
—

Net (loss) income
$
(352
)
 
$
6

 
$
(30
)
 
$
14

 
$
10

 
$
(352
)
Other comprehensive (loss) income
(5
)
 
11

 
(10
)
 
(2
)
 
1

 
(5
)
Comprehensive (loss) income
$
(357
)
 
$
17

 
$
(40
)
 
$
12

 
$
11

 
$
(357
)
(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes (other than the 2026 Unsecured Notes, which were not issued until March 2019) and the Secured Notes.
(2) Excludes D&A.


SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Nine Months Ended September 30, 2019
 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Revenue
$
—

 
$
444

 
$
1,092

 
$
1,211

 
$
(210
)
 
$
2,537

Cost of services, cost of product sales and cost of instant products(2)
—

 
288

 
329

 
498

 
(170
)
 
945

SG&A
100

 
29

 
162

 
276

 
(32
)
 
535

R&D
—

 
3

 
64

 
75

 
—

 
142

D&A
40

 
33

 
302

 
136

 
(14
)
 
497

Restructuring and other
2

 
2

 
5

 
15

 
—

 
24

Operating (loss) income
(142
)
 
89

 
230

 
211

 
6

 
394

Interest expense
—

 
(447
)
 
—

 
—

 
—

 
(447
)
Loss on debt financing transactions
—

 
(60
)
 
—

 
—

 
—

 
(60
)
Gain on remeasurement of debt
—

 
21

 
—

 
—

 
—

 
21

Other income (expense), net
50

 
392

 
(360
)
 
(63
)
 
—

 
19

Net (loss) income before equity in income of subsidiaries and income taxes
(92
)
 
(5
)
 
(130
)
 
148

 
6

 
(73
)
Equity in income of subsidiaries
12

 
18

 
45

 
—

 
(75
)
 
—

Income tax (expense) benefit
(7
)
 
1

 
30

 
(32
)
 
—

 
(8
)
Net (loss) income
(87
)
 
14

 
(55
)
 
116

 
(69
)
 
(81
)
Less: Net income attributable to noncontrolling interest
—

 
—

 
—

 
6

 
—

 
6

Net (loss) income attributable to SGC
$
(87
)
 
$
14

 
$
(55
)
 
$
110

 
$
(69
)
 
$
(87
)
Net (loss) income
$
(87
)
 
$
14

 
$
(55
)
 
$
116

 
$
(69
)
 
$
(81
)
Other comprehensive (loss) income
(35
)
 
24

 
(2
)
 
(56
)
 
34

 
(35
)
Total comprehensive (loss) income
(122
)
 
38

 
(57
)
 
60

 
(35
)
 
(116
)
Less: comprehensive income attributable to noncontrolling interest
—

 
—

 
—

 
6

 
—

 
6

Comprehensive (loss) income attributable to SGC
$
(122
)
 
$
38

 
$
(57
)
 
$
54

 
$
(35
)
 
$
(122
)
(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes and the Secured Notes.
(2) Excludes D&A.
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Nine Months Ended September 30, 2018

 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Revenue
$
—

 
$
404

 
$
1,196

 
$
1,107

 
$
(229
)
 
$
2,478

Cost of services, cost of product sales and cost of instant products(2)
—

 
263

 
369

 
472

 
(190
)
 
914

SG&A
119

 
32

 
166

 
238

 
(40
)
 
515

R&D
—

 
1

 
66

 
85

 
1

 
153

D&A
32

 
24

 
339

 
143

 
(11
)
 
527

Restructuring and other
375

 
—

 
8

 
42

 
(1
)
 
424

Operating (loss) income
(526
)
 
84

 
248

 
127

 
12

 
(55
)
Interest expense
—

 
(448
)
 
—

 
—

 
—

 
(448
)
Loss on debt financing transactions
—

 
(93
)
 
—

 
—

 
—

 
(93
)
Gain on remeasurement of debt
—

 
29

 
—

 
—

 
—

 
29

Other income (expense), net
49

 
399

 
(375
)
 
(59
)
 
—

 
14

Net (loss) income before equity in income of subsidiaries and income taxes
(477
)
 
(29
)
 
(127
)
 
68

 
12

 
(553
)
Equity in (loss) income of subsidiaries
(60
)
 
22

 
(17
)
 
—

 
55

 
—

Income tax (expense) benefit
(22
)
 
7

 
27

 
(18
)
 
—

 
(6
)
Net (loss) income
$
(559
)
 
$
—

 
$
(117
)
 
$
50

 
$
67

 
$
(559
)
Other comprehensive (loss) income
(37
)
 
23

 
(23
)
 
(48
)
 
48

 
(37
)
Comprehensive (loss) income
$
(596
)
 
$
23

 
$
(140
)
 
$
2

 
$
115

 
$
(596
)
(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes (other than the 2026 Unsecured Notes, which were not issued until March 2019) and the Secured Notes.
(2) Excludes D&A.
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2019
 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Net cash (used in) provided by operating activities
$
(36
)
 
$
77

 
$
146

 
$
216

 
$
—

 
$
403

Cash flows from investing activities:
 

 
 

 
 

 
 

 
 

 
 
Capital expenditures
(17
)
 
(22
)
 
(85
)
 
(83
)
 
—

 
(207
)
Distributions of capital from equity investments
—

 
—

 
—

 
18

 
—

 
18

Additions to equity method investments
—

 
(1
)
 
—

 
—

 
—

 
(1
)
Other, principally change in intercompany investing activities
—

 
268

 
(61
)
 
—

 
(207
)
 
—

Net cash (used in) provided by investing activities
(17
)
 
245

 
(146
)
 
(65
)
 
(207
)
 
(190
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Payments of long-term debt, net of proceeds
—

 
(306
)
 
—

 
(2
)
 
—

 
(308
)
Payments of debt issuance and deferred financing costs
—

 
(14
)
 
—

 
(1
)
 
—

 
(15
)
Payments on license obligations
(20
)
 
(1
)
 
(5
)
 
—

 
—

 
(26
)
Sale of future revenue
—

 
—

 
11

 
—

 
—

 
11

Net proceeds from the sale of SciPlay common stock
—

 
—

 
—

 
342

 
—

 
342

Payments of deferred SciPlay common stock offering costs
—

 
—

 
—

 
(9
)
 
—

 
(9
)
Net redemptions of common stock under stock-based compensation plans and other
—

 
(2
)
 
(2
)
 
(2
)
 
—

 
(6
)
Other, principally change in intercompany financing activities
193

 
—

 
—

 
(400
)
 
207

 
—

Net cash provided by (used in) financing activities
173

 
(323
)
 
4

 
(72
)
 
207

 
(11
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
—

 
—

 
—

 
(1
)
 
—

 
(1
)
Increase (decrease) in cash, cash equivalents and restricted cash
120

 
(1
)
 
4

 
78

 
—

 
201

Cash, cash equivalents and restricted cash, beginning of period
74

 
2

 
44

 
101

 
(1
)
 
220

Cash, cash equivalents and restricted cash, end of period
$
194

 
$
1

 
$
48

 
$
179

 
$
(1
)
 
$
421

(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes and the Secured Notes.
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2018

 
SGC (Parent)
 
SGI (Issuer1)
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Net cash (used in) provided by operating activities
$
(56
)
 
$
30

 
$
153

 
$
231

 
$
(2
)
 
$
356

Cash flows from investing activities:
 

 
 

 
 

 
 

 
 

 
 
Capital expenditures
(30
)
 
(57
)
 
(122
)
 
(84
)
 
—

 
(293
)
Acquisitions of businesses and assets, net of cash acquired
—

 
—

 
(10
)
 
(264
)
 
—

 
(274
)
Distributions of capital from equity investments
—

 
—

 
—

 
24

 
—

 
24

Additions to equity method investments
—

 
(2
)
 
—

 
(74
)
 
—

 
(76
)
Other, principally change in intercompany investing activities
—

 
91

 
(15
)
 
—

 
(76
)
 
—

Net cash (used in) provided by investing activities
(30
)
 
32

 
(147
)
 
(398
)
 
(76
)
 
(619
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds net of payments on long-term debt
—

 
(24
)
 
—

 
(6
)
 
—

 
(30
)
Repayment of assumed NYX debt
—

 
—

 
—

 
(288
)
 
—

 
(288
)
Payments of debt issuance and deferred financing costs
—

 
(39
)
 
—

 
—

 
—

 
(39
)
Payments on license obligations
(20
)
 
—

 
(2
)
 
—

 
—

 
(22
)
Net redemptions of common stock under stock-based compensation plans and other
(22
)
 
—

 
(2
)
 
—

 
—

 
(24
)
Other, principally change in intercompany financing activities
(565
)
 
—

 
—

 
489

 
76

 
—

Net cash (used in) provided by financing activities
(607
)
 
(63
)
 
(4
)
 
195

 
76

 
(403
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
—

 
—

 
—

 
(2
)
 
—

 
(2
)
(Decrease) increase in cash, cash equivalents and restricted cash
(693
)
 
(1
)
 
2

 
26

 
(2
)
 
(668
)
Cash, cash equivalents and restricted cash, beginning of period
732

 
1

 
44

 
60

 
(3
)
 
834

Cash, cash equivalents and restricted cash end of period
$
39

 
$
—

 
$
46

 
$
86

 
$
(5
)
 
$
166

(1) Issuer of obligations under the Subordinated Notes, the Unsecured Notes (other than the 2026 Unsecured Notes, which were not issued until March 2019) and the Secured Notes.