Scientific Games to Be Rebranded “Light & Wonder,” Reflecting Transformation to a Cross-platform Global Game Company
Company Expects to Significantly De-lever, Targeting Net Debt Leverage Ratio(1) Range of 2.5x to 3.5x
Company Provides Capital Allocation Strategy and Authorizes $750 Million Share Repurchase Program
Lottery Divestiture Expected to Close in March(2) Providing Approximately $5 Billion in Net Cash Proceeds, Sports Betting Divestiture on Track to Close in Q2(2)
Strong Double Digit Growth in Consolidated Revenue From Continuing Operations, Up 21% in 4th Quarter and Up 27% for the Full Year
LAS VEGAS–(BUSINESS WIRE)–Scientific Games Corporation (NASDAQ: SGMS) (“Scientific Games,” “SGC” or the “Company”) today reported results for the fourth quarter and fiscal year ended 31 Dicembre 2021.
Jamie Odell, Executive Chair, stated, “from the outset we recognized the enormous opportunity to drive increased shareholder value through re-structuring the balance sheet, redefining the portfolio and becoming a sustainable growth company. We are already seeing the early stages of the strategy successfully executed and with the announced divestitures, the Company will immediately shift from a debt to an equity story and achieve gearing significantly below the levels we underwrote in our investment thesis. We couldn’t be happier with the way the entire team have executed on the transformation strategy, and our initial expectations are already being exceeded.”
Barry Cottle, President and Chief Executive Officer of Scientific Games, said, “I want to thank our teams for a tremendously successful 2021. We would not be where we are today without their hard work and dedication that has enabled our transformative journey. We executed on a number of significant initiatives this past year including the announced sales of our Lottery and Sports Betting businesses, as we delivered on our promises. We want to be really clear on our capital priorities. First, debt reduction to a target net debt leverage ratio range of 2.5x to 3.5x. We expect to dedicate more than 90% of the Lottery proceeds to pay down debt, which combined with the expected Sports Betting proceeds will put us within our target range. Second, the Board has authorized a three-year, $750 million share repurchase program. We see buy-backs at current share price levels as highly accretive to shareholder value. And, third, we will always prefer using our capital for buy-backs, debt reduction and organic investments unless we are convinced that M&A will deliver greater long-term shareholder value than other uses of our capital.”
“Operationally, we are very pleased with the strong performance we achieved in the quarter which capped what was an outstanding year, as we grew double-digits on both top and bottom line and generated substantial cash flow while laying the foundation for future growth. As we begin this new chapter we have chosen a new name, Light & Wonder. A name that evokes the kind of feelings we want to capture in the work we do every day, excitement, inspiration, imagination and maybe even a little bit of magic and certainly a lot of fun. As we embark on this next phase, we’re grateful to be able to focus our energy on creating those experiences for our players.”
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1 |
Non-GAAP financial measure, defined below. Additional information on the non-GAAP financial measure targeted long-term net debt leverage ratio is available below. |
|
|
2 |
Subject to applicable regulatory approvals and customary closing conditions. |
BUSINESS STRATEGY UPDATE
- Overall the Company, now rebranded as Light & Wonder, is moving rapidly to execute on its vision with a singular focus to be the leading cross-platform global game company, accelerating efforts to de-lever and invest for sustainable growth.
- Progressing on Asset Divestitures, we expect the Lottery transaction to close by the end of March(1) with approximately $5 Billion in net after-tax cash proceeds; the Sports Betting transaction is on track to close in Q2(1).
- De-levering and transforming the balance sheet is a key focus, establishing a long-term net debt leverage ratio target range of 2.5x to 3.5x, rapidly moving from a debt to an equity story. We expect to be squarely in this range by the end of Q2 with the sale of Lottery and Sports Betting businesses.
- Provided Capital Allocation Strategy, taking a balanced and opportunistic approach, significantly de-levering, returning substantial capital to shareholders, while investing in key growth opportunities.
- Authorized a 3-year, $750 million share repurchase program, underscoring a clear commitment and opportunity to return significant capital to shareholders. It reflects our strengthened balance sheet, the recurring nature of our revenue, our strong cash flow generation and the tremendous value we see in our shares. The share repurchase program will be via one or more open market repurchases, privately negotiated transactions, including block trades, accelerated share repurchases, issuer tender offers or other derivative contracts or instruments, “10b5-1” plan, or other financial arrangements or other arrangements.
- Investing in our largest growth opportunities, both organically and inorganically, in content and digital markets to accelerate growth. Organic investments directed at R&D, capex and the launch of our new Las Vegas iGaming studio. Announced SciPlay’s acquisition of proven casual game developer Alictus as we rapidly expand in the casual market. Further bolstering our portfolio and digital mix through acquisitions of Koukoi, Lightning Box Studio, Elk Studio and Authentic Gaming.
KEY ANNOUNCEMENTS
- Rebranding Scientific Games – on 1 Marzo 2022, we announced our intention to rebrand Scientific Games Corporation to Light & Wonder as part of the Lottery sale and to align to our vision of becoming the leading cross-platform global game company. Our legal name “Scientific Games Corporation” is expected to be legally changed to “Light & Wonder, Inc.” during the second quarter of 2022, upon satisfying all applicable legal requirements in the state of Nevada.
- You will be able to access the Investor Relations section of our website at scientificgames.com/investors up to 3 Marzo 2022, at which time the Light & Wonder website officially launches.
- The ticker symbol for the Company’s common stock will be changed from SGMS to LNW at the time of the legal name change. The Company’s common stock will continue to be listed on The NASDAQ Stock Exchange. No action is required by existing stockholders with respect to the planned name and ticker symbol changes.
- Light & Wonder is planning to hold an Investor Day on 17 Maggio 2022, in New York City.
|
1 |
Subject to applicable regulatory approvals and customary closing conditions. |
SUMMARY RESULTS
We have reflected our Lottery and Sports Betting businesses as discontinued operations, for all periods presented. Unless otherwise noted, amounts, percentages and discussion included below reflect the results of operations and financial condition from the Company’s continuing operations which includes its Gaming, SciPlay and iGaming businesses.
|
|
Three Months Ended December 31, |
|||||||||||||||||||
|
($ in millions) |
2021 |
|
2020 |
|||||||||||||||||
|
|
Continuing |
|
Discontinued |
|
Combined |
|
Continuing |
|
Discontinued |
|
Combined |
|||||||||
|
Revenue |
$ |
580 |
|
$ |
297 |
|
$ |
877 |
|
$ |
480 |
|
|
$ |
282 |
|
$ |
762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income (loss) |
|
62 |
|
|
37 |
|
|
99 |
|
|
(143 |
) |
|
|
59 |
|
|
(84 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net cash provided by operating activities(1) |
|
105 |
|
|
121 |
|
|
226 |
|
|
32 |
|
|
|
127 |
|
|
159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Capital expenditures |
|
53 |
|
|
45 |
|
|
98 |
|
|
37 |
|
|
|
11 |
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Non-GAAP Financial Measures(2) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
AEBITDA |
$ |
216 |
|
$ |
130 |
|
$ |
346 |
|
$ |
129 |
|
|
$ |
115 |
|
$ |
244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Free cash flow(1) |
|
29 |
|
|
71 |
|
|
100 |
|
|
(24 |
) |
|
|
96 |
|
|
72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(1) Net cash provided by operating activities from continuing operations and free cash flow from continuing operations for the three months ended 31 Dicembre 2021 and 2020 include $104 million and $136 million, respectively, of cash interest payments. |
||||||||||||||||||||
|
(2) These non-GAAP financial measures are defined below and are reconciled to the most directly comparable GAAP financial measure in the accompanying supplemental tables at the end of this release. |
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|
|
Year Ended December 31, |
|||||||||||||||||||
|
($ in millions) |
2021 |
|
2020 |
|||||||||||||||||
|
|
Continuing |
|
Discontinued |
|
Combined |
|
Continuing |
|
Discontinued |
|
Combined |
|||||||||
|
Revenue |
$ |
2,153 |
|
$ |
1,157 |
|
$ |
3,310 |
|
$ |
1,699 |
|
|
$ |
1,025 |
|
$ |
2,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income (loss) |
|
24 |
|
|
366 |
|
|
390 |
|
|
(801 |
) |
|
|
253 |
|
|
(548 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net cash provided by operating activities(1) |
|
304 |
|
|
381 |
|
|
685 |
|
|
33 |
|
|
|
438 |
|
|
471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Capital expenditures |
|
171 |
|
|
94 |
|
|
265 |
|
|
137 |
|
|
|
53 |
|
|
190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Non-GAAP Financial Measures(2) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
AEBITDA |
$ |
793 |
|
$ |
538 |
|
$ |
1,331 |
|
$ |
374 |
|
|
$ |
426 |
|
$ |
800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Free cash flow(1) |
|
95 |
|
|
348 |
|
|
443 |
|
|
(134 |
) |
|
|
320 |
|
|
186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
As of |
|||||||||||||||||||
|
Balance Sheet Measures |
31 Dicembre 2021 |
|
31 Dicembre 2020 |
|||||||||||||||||
|
Combined cash and cash equivalents |
$ |
629 |
|
$ |
1,016 |
|
||||||||||||||
|
Total debt |
|
8,690 |
|
|
9,303 |
|
||||||||||||||
|
Available liquidity(3) |
|
1,417 |
|
|
1,269 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(1) Net cash provided by operating activities from continuing operations and free cash flow from continuing operations for the year ended 31 Dicembre 2021 and 2020 include $453 million and $471 million, respectively, of cash interest payments. |
||||||||||||||||||||
|
(2) These non-GAAP financial measures are defined below and are reconciled to the most directly comparable GAAP financial measure in the accompanying supplemental tables at the end of this release. |
||||||||||||||||||||
|
(3) Available liquidity is calculated as cash and cash equivalents including those in the businesses held for sale, plus remaining revolver capacity, including the SciPlay Revolver. |
||||||||||||||||||||
Fourth Quarter 2021 Financial Highlights:
- Fourth quarter consolidated revenue was $580 million compared to $480 million, up 21% compared to the prior year period. Our Gaming business demonstrated continued momentum with revenue growing year over year and sequentially across all segments. Revenue also benefited from strong growth at iGaming with U.S. revenues up 112% compared to the prior year period. SciPlay delivered 2nd highest revenue quarter ever with growth in key payer metrics.
- Net income from continuing operations was $62 million compared to a net loss of $143 million in the prior year, due to higher revenue, the reversal of our valuation allowance on deferred taxes and $11 million gain on remeasurement of Euro denominated debt compared to the prior loss of $25 million, partially offset by higher Restructuring and other charges in the current year period.
- Consolidated AEBITDA from continuing operations, a non-GAAP financial measure defined below, was $216 million compared to $129 million, up 67% as compared to the prior year period, driven by double-digit AEBITDA growth in Gaming and iGaming.
- Net cash provided by operating activities from continuing operations was $105 million compared to $32 million in the prior year period on improved operating results, and $226 million on the combined basis.
- Combined free cash flow, a non-GAAP financial measure defined below, was $100 million, which include both continuing and discontinued operations. This represents a 39% increase from the prior year period, driven by growth in earnings and the benefit of prior period receivable collections.
Full Year 2021 Financial Highlights:
- Consolidated revenue was $2,153 million compared to $1,699 million, up 27% compared to the prior year period, benefiting from strong growth across all businesses. Gaming performance was primarily driven by North America Premium Gaming Operations and the market recovery. SciPlay recorded record revenue with a strong core business and iGaming achieved record revenues with strong U.S. market performance enabled by our original content offerings. Gaming revenue also benefited by $44 million due to U.K. FOBT recovery.
- Net income from continuing operations was $24 million compared to a net loss of $801 million in the prior year period due to strong revenues in the Gaming business segment, which were significantly impacted by COVID-19 disruptions in the prior year period and an income tax benefit as a result of reversal of our valuation allowance on deferred taxes, partially offset by higher Restructuring and other charges in the current year period primarily related to the pending divestitures. The prior year period also included temporary austerity measures that were implemented due to COVID-19 disruptions and certain Gaming business segment goodwill impairment, inventory and credit loss charges, none of which recurred in the current year period.
- Consolidated AEBITDA from continuing operations, a non-GAAP financial measure defined below, was $793 million compared to $374 million, up 112% as compared to the prior year period, driven by double-digit growth in Gaming and iGaming. The current year Gaming segment AEBITDA growth benefited from a $44 million U.K. FOBT recovery and the prior year included $102 million in inventory and credit loss charges.
- Net cash provided by operating activities from continuing operations was $304 million compared to $33 million in the prior year period on improved operating results, and $685 million on the combined basis.
- Combined free cash flow, a non-GAAP financial measure defined below, was $443 million, which includes both continuing and discontinued operations. This represents a 138% increase from the prior year period, driven by growth in earnings and strong cash flow conversion.
- Net debt leverage ratio, a non-GAAP financial measure defined below, declined as we paid down $577 million of debt during 2021, reducing debt outstanding to $8,690 million at the end of 2021. Net debt leverage ratio declined to 6.2x, or over 40% during the course of 2021.
|
CONTINUING OPERATIONS BUSINESS SEGMENT HIGHLIGHTS FOR THE THREE MONTHS ENDED 31 Dicembre 2021 |
|||||||||||||||||||||||||||||||||||
|
($ in millions) |
Revenue |
|
AEBITDA(1) |
|
AEBITDA Margin(2)(3) |
||||||||||||||||||||||||||||||
|
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
PP Change(3) |
||||||||||||||
|
Gaming |
$ |
372 |
|
$ |
286 |
|
$ |
86 |
|
30 |
% |
|
$ |
186 |
|
|
$ |
103 |
|
|
$ |
83 |
|
|
81 |
% |
|
50 |
% |
|
36 |
% |
|
14 |
|
|
SciPlay |
|
154 |
|
|
147 |
|
|
7 |
|
5 |
% |
|
|
48 |
|
|
|
45 |
|
|
|
3 |
|
|
7 |
% |
|
31 |
% |
|
31 |
% |
|
— |
|
|
iGaming |
|
54 |
|
|
47 |
|
|
7 |
|
15 |
% |
|
|
15 |
|
|
|
12 |
|
|
|
3 |
|
|
25 |
% |
|
28 |
% |
|
26 |
% |
|
2 |
|
|
Corporate and other(4) |
|
— |
|
|
— |
|
|
— |
|
— |
% |
|
|
(33 |
) |
|
|
(31 |
) |
|
|
(2 |
) |
|
6 |
% |
|
— |
% |
|
— |
% |
|
— |
|
|
Total |
$ |
580 |
|
$ |
480 |
|
$ |
100 |
|
21 |
% |
|
$ |
216 |
|
|
$ |
129 |
|
|
$ |
87 |
|
|
67 |
% |
|
37 |
% |
|
27 |
% |
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
PP – percentage points. |
|||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
|
(1) Gaming AEBITDA has been recast to exclude EBITDA from equity investments. Refer to Consolidated AEBITDA – continuing operations definition and Gaming Business Segment AEBITDA Change description below for further details. |
|||||||||||||||||||||||||||||||||||
|
(2) Segment AEBITDA margin is calculated as segment AEBITDA as a percentage of segment revenue. |
|||||||||||||||||||||||||||||||||||
|
(3) As calculations are made using whole dollar numbers, actual results may vary compared to calculations presented in this table. |
|||||||||||||||||||||||||||||||||||
|
(4) Includes amounts not allocated to the business segments (including corporate costs) and other non-operating expenses (income). |
|||||||||||||||||||||||||||||||||||
|
CONTINUING OPERATIONS BUSINESS SEGMENT HIGHLIGHTS FOR THE YEAR ENDED 31 Dicembre 2021 |
||||||||||||||||||||||||||||||||||||
|
($ in millions) |
Revenue |
|
AEBITDA(1) |
|
AEBITDA Margin(2)(3) |
|||||||||||||||||||||||||||||||
|
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
PP Change(3) |
|||||||||||||||
|
Gaming |
$ |
1,321 |
|
$ |
926 |
|
$ |
395 |
|
43 |
% |
|
$ |
659 |
|
|
$ |
240 |
|
|
$ |
419 |
|
|
175 |
% |
|
50 |
% |
|
26 |
% |
|
24 |
|
|
|
SciPlay |
|
606 |
|
|
582 |
|
|
24 |
|
4 |
% |
|
|
186 |
|
|
|
189 |
|
|
|
(3 |
) |
|
(2 |
) % |
|
31 |
% |
|
32 |
% |
|
(1 |
) |
|
|
iGaming |
|
226 |
|
|
191 |
|
|
35 |
|
18 |
% |
|
|
75 |
|
|
|
58 |
|
|
|
17 |
|
|
29 |
% |
|
33 |
% |
|
30 |
% |
|
3 |
|
|
|
Corporate and other(4) |
|
— |
|
|
— |
|
|
— |
|
— |
% |
|
|
(127 |
) |
|
|
(113 |
) |
|
|
(14 |
) |
|
12 |
% |
|
— |
% |
|
— |
% |
|
— |
|
|
|
Total |
$ |
2,153 |
|
$ |
1,699 |
|
$ |
454 |
|
27 |
% |
|
$ |
793 |
|
|
$ |
374 |
|
|
$ |
419 |
|
|
112 |
% |
|
37 |
% |
|
22 |
% |
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
PP – percentage points. |
||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
(1) Gaming AEBITDA has been recast to exclude EBITDA from equity investments. Refer to Consolidated AEBITDA – continuing operations definition and Gaming Business Segment AEBITDA Change description below for further details. |
||||||||||||||||||||||||||||||||||||
|
(2) Segment AEBITDA margin is calculated as segment AEBITDA as a percentage of segment revenue. |
||||||||||||||||||||||||||||||||||||
|
(3) As calculations are made using whole dollar numbers, actual results may vary compared to calculations presented in this table. |
||||||||||||||||||||||||||||||||||||
|
(4) Includes amounts not allocated to the business segments (including corporate costs) and other non-operating expenses (income). |
||||||||||||||||||||||||||||||||||||
Fourth Quarter 2021 Key Highlights
- Gaming revenue increased to $372 million, up 30% compared to the prior year quarter, primarily driven by strong growth in Gaming operations due to an increase in our premium installed base as well as growth in Game Sales and our Table Games business. AEBITDA grew 81% from the prior year quarter largely driven by growth in Gaming operations revenues.
- Gaming operations revenue increased driven by success of our product roadmap including new game launches as well as the growing footprint of Kascada™ and Mural™ cabinets, validating our continued investment in R&D to drive our long-term growth. Our North American premium installed base grew for the 6th consecutive quarter, now at a record 42% of our total installed base mix. North American Game Ops revenues and the premium installed base units exceeded 2019 levels as Dancing Drums, Coin Combo and Ultimate Fire Link franchises continue to pace growth in our installed base.
- SciPlay revenue was $154 million, a 5% increase from the prior year quarter and the 2nd highest quarterly revenue ever. Performance was driven by strong monetization metrics with the 5th consecutive record quarter at Gold Fish Casino® as well as strong growth at Quick Hit and Jackpot Party. SciPlay continues to make rapid progress as they advance their strategy to be a diversified game developer.
- iGaming revenue increased 15% and AEBITDA grew 25% from the prior year quarter with performance driven by the strength of our original content and new U.S. states coming online as U.S. revenue grew 112%. Wagers processed through our iGaming platform have increased to $17.2 billion in the fourth quarter.
LIQUIDITY
- Principal face value of debt outstanding of $8,830 million decreased by $577 million in 2021.
- Net debt leverage ratio, a non-GAAP financial measure defined below, declined as we paid down $577 million of debt in 2021, reducing total debt outstanding to $8,690 million at the end of the year. Net debt leverage ratio declined to 6.2x, a reduction of more than 4 turns, down from 10.5x at the beginning of the year.
- Net debt, a non-GAAP financial measure defined below, of $8,201 million decreased by $190 million compared to the prior year period.
- Capital expenditures from continuing operations were $53 million and including discontinued operations capital expenditures totaled $98 million in the fourth quarter of 2021.
- Combined net cash provided by operating activities was $226 million compared to $159 million in the prior year period.
- Combined free cash flow, a non-GAAP financial measure defined below, was $100 million, which includes both continuing and discontinued operations. The growth in combined free cash flow was driven by growth in earnings.
Earnings Conference Call
As previously announced, Scientific Games executive leadership will host a conference call on Tuesday, 1 Marzo 2022 at 4:30 p.m. EST to give a business strategy update and review the Company’s fourth quarter and full year 2021 results. To access the call live via a listen-only webcast and presentation, please visit http://www.scientificgames.com/investors/events-presentations/ and click on the webcast link under the Investor Information section. To access the call by telephone, please dial: +1 (844) 200-6205 for U.S. or +1 (646) 904-5544 for International and ask to join the Scientific Games Corporation call. A replay of the webcast will be archived in the Investors section on www.scientificgames.com and in the Investors section on www.lnw.com after 3 Marzo 2022, when the Light & Wonder website officially launches.
About Scientific Games
Scientific Games Corporation (NASDAQ: SGMS) is the world leader in offering customers a fully integrated portfolio of technology platforms, robust systems, engaging content and services. The Company is the global leader in technology-based gaming systems, digital real-money gaming and sports betting platforms, table games, table products and instant games, and a leader in products, services and content for gaming, lottery and social gaming markets. Scientific Games delivers what customers and players value most: trusted security, creative entertaining content, operating efficiencies and innovative technology. For more information, please visit www.scientificgames.com, which is updated regularly with financial and other information about the Company. You can access our filings with the SEC through the SEC website at www.sec.gov or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at www.scientificgames.com/investors/, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (Reg FD).
The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document, and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.
All ® notices signify marks registered in the United States. © 2022 Scientific Games Corporation. All Rights Reserved.
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SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited, in millions, except per share amounts) |
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|
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|
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Three Months Ended |
Year Ended |
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|
December 31, |
December 31, |
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|
|
2021 |
2020 |
2021 |
2020 |
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Revenue: |
|
|
|
|
||||||||||||
|
Services |
$ |
425 |
|
$ |
340 |
|
$ |
1,642 |
|
$ |
1,259 |
|
||||
|
Product sales |
|
155 |
|
|
140 |
|
|
511 |
|
|
440 |
|
||||
|
Total revenue |
|
580 |
|
|
480 |
|
|
2,153 |
|
|
1,699 |
|
||||
|
|
|
|
|
|
||||||||||||
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Operating expenses: |
|
|
|
|
||||||||||||
|
Cost of services(1) |
|
92 |
|
|
88 |
|
|
365 |
|
|
338 |
|
||||
|
Cost of product sales(1) |
|
78 |
|
|
75 |
|
|
244 |
|
|
272 |
|
||||
|
Selling, general and administrative |
|
177 |
|
|
168 |
|
|
679 |
|
|
627 |
|
||||
|
Research and development |
|
50 |
|
|
38 |
|
|
190 |
|
|
148 |
|
||||
|
Depreciation, amortization and impairments |
|
109 |
|
|
113 |
|
|
398 |
|
|
449 |
|
||||
|
Goodwill impairment |
|
— |
|
|
— |
|
|
— |
|
|
54 |
|
||||
|
Restructuring and other |
|
71 |
|
|
8 |
|
|
167 |
|
|
56 |
|
||||
|
Total operating expenses |
|
577 |
|
|
490 |
|
|
2,043 |
|
|
1,944 |
|
||||
|
Operating income (loss) |
|
3 |
|
|
(10 |
) |
|
110 |
|
|
(245 |
) |
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|
Other (expense) income: |
|
|
|
|
||||||||||||
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Interest expense |
|
(118 |
) |
|
(124 |
) |
|
(478 |
) |
|
(503 |
) |
||||
|
Loss on debt financing transactions |
|
— |
|
|
— |
|
|
— |
|
|
(1 |
) |
||||
|
Gain (loss) on remeasurement of debt |
|
11 |
|
|
(25 |
) |
|
41 |
|
|
(51 |
) |
||||
|
Other income (expense), net |
|
12 |
|
|
4 |
|
|
33 |
|
|
(4 |
) |
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Total other expense, net |
|
(95 |
) |
|
(145 |
) |
|
(404 |
) |
|
(559 |
) |
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Net loss from continuing operations before income taxes |
|
(92 |
) |
|
(155 |
) |
|
(294 |
) |
|
(804 |
) |
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Income tax benefit |
|
154 |
|
|
12 |
|
|
318 |
|
|
3 |
|
||||
|
Net income (loss) from continuing operations |
|
62 |
|
|
(143 |
) |
|
24 |
|
|
(801 |
) |
||||
|
Net income from discontinued operations, net of tax |
|
37 |
|
|
59 |
|
|
366 |
|
|
253 |
|
||||
|
Net income (loss) |
|
99 |
|
|
(84 |
) |
|
390 |
|
|
(548 |
) |
||||
|
Less: Net income attributable to noncontrolling interest |
|
4 |
|
|
6 |
|
|
19 |
|
|
21 |
|
||||
|
Net income (loss) attributable to SGC |
$ |
95 |
|
$ |
(90 |
) |
$ |
371 |
|
$ |
(569 |
) |
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|
|
|
|
|
|
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Per Share – Basic: |
|
|
|
|
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Net income (loss) from continuing operations |
$ |
0.60 |
|
$ |
(1.57 |
) |
$ |
0.06 |
|
$ |
(8.69 |
) |
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|
Net income from discontinued operations |
|
0.38 |
|
|
0.62 |
|
|
3.80 |
|
|
2.67 |
|
||||
|
Net income (loss) attributable to SGC |
$ |
0.98 |
|
$ |
(0.95 |
) |
$ |
3.86 |
|
$ |
(6.02 |
) |
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|
|
|
|
|
|
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Per Share – Diluted: |
|
|
|
|
||||||||||||
|
Net income (loss) from continuing operations |
$ |
0.58 |
|
$ |
(1.57 |
) |
$ |
0.05 |
|
$ |
(8.69 |
) |
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|
Net income from discontinued operations |
|
0.37 |
|
|
0.62 |
|
|
3.72 |
|
|
2.67 |
|
||||
|
Net income (loss) attributable to SGC |
$ |
0.95 |
|
$ |
(0.95 |
) |
$ |
3.77 |
|
$ |
(6.02 |
) |
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|
|
|
|
|
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Weighted average number of shares used in per share calculations: |
|
|
|
|
||||||||||||
|
Basic shares |
|
97 |
|
|
95 |
|
|
96 |
|
|
95 |
|
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|
Diluted shares |
|
100 |
|
|
95 |
|
|
98 |
|
|
95 |
|
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(1) Excludes depreciation and amortization. |
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SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited, in millions) |
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|
|
|
|
|
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|
|
|
|
|
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|
December 31, |
|
December 31, |
|||||
|
|
2021 |
|
2020 |
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|
Assets: |
|
|
|
|||||
|
Cash and cash equivalents |
$ |
585 |
|
|
$ |
928 |
|
|
|
Restricted cash |
|
41 |
|
|
|
45 |
|
|
|
Receivables, net of allowance for credit losses of $52 and $76, respectively |
|
423 |
|
|
|
438 |
|
|
|
Inventories |
|
98 |
|
|
|
119 |
|
|
|
Prepaid expenses, deposits and other current assets |
|
88 |
|
|
|
98 |
|
|
|
Assets of businesses held for sale |
|
497 |
|
|
|
553 |
|
|
|
Total current assets |
|
1,732 |
|
|
|
2,181 |
|
|
|
|
|
|
|
|||||
|
Restricted cash |
|
9 |
|
|
|
10 |
|
|
|
Receivables, net of allowance for credit losses of $2 and $5, respectively |
|
17 |
|
|
|
19 |
|
|
|
Property and equipment, net |
|
213 |
|
|
|
242 |
|
|
|
Operating lease right-of-use assets |
|
51 |
|
|
|
52 |
|
|
|
Goodwill |
|
2,892 |
|
|
|
2,730 |
|
|
|
Intangible assets, net |
|
946 |
|
|
|
1,088 |
|
|
|
Software, net |
|
117 |
|
|
|
143 |
|
|
|
Deferred income taxes |
|
349 |
|
|
|
106 |
|
|
|
Other assets |
|
80 |
|
|
|
47 |
|
|
|
Assets of businesses held for sale |
|
1,477 |
|
|
|
1,366 |
|
|
|
Total assets |
$ |
7,883 |
|
|
$ |
7,984 |
|
|
|
|
|
|
|
|||||
|
Liabilities and Stockholders’ Deficit: |
|
|
|
|||||
|
Current portion of long-term debt |
$ |
44 |
|
|
$ |
44 |
|
|
|
Accounts payable |
|
204 |
|
|
|
150 |
|
|
|
Accrued liabilities |
|
444 |
|
|
|
343 |
|
|
|
Liabilities of businesses held for sale |
|
282 |
|
|
|
295 |
|
|
|
Total current liabilities |
|
974 |
|
|
|
832 |
|
|
|
|
|
|
|
|||||
|
Deferred income taxes |
|
35 |
|
|
|
46 |
|
|
|
Operating lease liabilities |
|
40 |
|
|
|
43 |
|
|
|
Other long-term liabilities |
|
170 |
|
|
|
190 |
|
|
|
Long-term debt, excluding current portion |
|
8,646 |
|
|
|
9,259 |
|
|
|
Liabilities of businesses held for sale |
|
124 |
|
|
|
138 |
|
|
|
Total stockholders’ deficit(1) |
|
(2,106 |
) |
|
|
(2,524 |
) |
|
|
Total liabilities and stockholders’ deficit |
$ |
7,883 |
|
|
$ |
7,984 |
|
|
|
|
|
|
|
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|
(1) Includes $150 million and $129 million in noncontrolling interest as of 31 Dicembre 2021 and 31 Dicembre 2020, respectively. |
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Contacts
Media Relations
Christina Karas +1 702-532-7986
Vice President, Corporate Communications
christina.karas@scientificgames.com
Investor Relations
Jim Bombassei +1 702-532-7643
Senior Vice President, Investor Relations
james.bombassei@scientificgames.com
