LAS VEGAS, May 7, 2019 /PRNewswire/ -- Scientific Games
Corporation (NASDAQ: SGMS) ("Scientific Games" or the "Company")
today reported results for the first quarter ended March 31,
2019.
First Quarter 2019 Financial Highlights:
- First quarter revenue rose 3 percent to $837 million, up from $812
million in the year ago period, reflecting growth in our
Lottery and Social businesses.
- Net loss was $24 million
compared to $202 million in the prior
year period, driven by higher operating income, partly attributable
to a $45 million reduction in
restructuring and other expenses. The prior year net loss also
included a $93 million charge related
to our February 2018
refinancing.
- Consolidated Adjusted EBITDA ("Consolidated AEBITDA"), a
non-GAAP financial measure defined below, increased 3 percent to
$328 million from $320 million in the prior year period, reflecting
the revenue growth.
- Net cash provided by operating activities increased to
$167 million from $30 million in the year ago period driven by the
improved operating results, lower restructuring and other expenses
and a $66 million favorable change in
accrued interest.
- On May 7, 2019, the Company
completed the initial public offering of a 17.4% minority interest
in its Social gaming business, SciPlay Corporation ("SciPlay").
SciPlay is trading on The NASDAQ Global Select Market under the
ticker symbol "SCPL". Scientific Games received $301 million in proceeds from the offering, which
enables us to make substantial payments to reduce debt. The Company
believes the offering provides SciPlay greater flexibility to
pursue additional growth initiatives.
Barry Cottle, President and
Chief Executive Officer of Scientific Games, said, "We are
incredibly proud that we have continued to build on our momentum
and are looking forward to the year ahead. We are focused on
effectively operating our businesses, reducing costs and building
upon the strong foundation for profitable growth that we see today.
Last week, we successfully took SciPlay public as a new company,
which accelerates our ability to pay down debt. All of these
actions support our steadfast commitment to smartly grow our
business, drive free cash flow and create meaningful value for our
stakeholders."
Michael Quartieri, Chief
Financial Officer of Scientific Games, added, "This quarter, we
paid down $145 million in debt and
completed a major refinancing that lowered our borrowing costs and
extended our debt maturities. As a result of the SciPlay IPO, we
expect to continue our deleveraging path and the efficient
deployment of our resources to generate the returns needed to
enhance our free cash flow."
SUMMARY CONSOLIDATED RESULTS
($ in
millions)
|
Three Months Ended
March 31,
|
|
|
2019
|
|
2018
|
|
Revenue
|
$
|
837
|
|
|
$
|
812
|
|
|
Net loss
|
(24)
|
|
|
(202)
|
|
|
Net cash provided by
operating activities(1)
|
167
|
|
|
30
|
|
|
Capital
expenditures
|
67
|
|
|
88
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures(2)
|
|
|
|
|
Consolidated
AEBITDA
|
$
|
328
|
|
|
$
|
320
|
|
|
Consolidated AEBITDA
margin
|
39
|
%
|
|
39
|
%
|
|
Free cash
flow
|
$
|
96
|
|
|
$
|
(63)
|
|
|
|
|
|
|
|
Balance Sheet
Measures
|
As of March 31,
2019
|
|
As of December 31,
2018
|
|
Cash and cash
equivalents(3)
|
1,213
|
|
|
168
|
|
|
Principal face value
of debt outstanding(4)
|
10,172
|
|
|
9,219
|
|
|
Available
liquidity
|
1,619
|
|
|
439
|
|
|
|
(1) The 2019 and
2018 first quarters include a $66 million favorable and a $50
million unfavorable change, respectively, in accrued interest due
to the February 2018 refinancing. The 2018 first quarter includes
approximately $30 million of payments related to NYX transaction
costs.
|
(2) The financial
measures "Consolidated AEBITDA", "Consolidated AEBITDA margin",
and "free cash flow" are non-GAAP financial measures defined
below under "Non-GAAP Financial Measures" and reconciled to the
most directly comparable GAAP measures in the accompanying
supplemental tables at the end of this release.
|
(3) Includes $1
billion principal balance of the 2022 Unsecured Notes that were
redeemed on April 4, 2019 using the proceeds from the March 2019
issuance of 2026 Unsecured Notes, which proceeds are reflected in
cash and cash equivalents as of March 31, 2019.
|
(4) Principal face
value of outstanding 2026 Secured Euro Notes and 2026 Unsecured
Euro Notes are translated at the constant foreign exchange rate at
issuance of these notes. Euro to USD exchange rates at issuance and
as of March 31, 2019 were 1.24 and 1.13, respectively, resulting in
a $63 million adjustment increasing the principal face value of
debt outstanding presented above. Additionally, principal face
value excludes $11 million in proceeds received from transactions
completed in 2018 which are presented as debt.
|
BUSINESS SEGMENT HIGHLIGHTS FOR THE THREE MONTHS ENDED
MARCH 31, 2019
($ in
millions)
|
Revenue
|
|
AEBITDA
|
|
AEBITDA
Margin
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
PP
Change(2)
|
Gaming
|
$
|
422
|
|
$
|
443
|
|
(21)
|
|
(5)
|
%
|
|
$
|
215
|
|
$
|
218
|
|
(3)
|
|
(1)
|
%
|
|
51
|
%
|
|
49
|
%
|
|
2
|
Lottery
|
227
|
|
202
|
|
25
|
|
12
|
%
|
|
104
|
|
94
|
|
10
|
|
11
|
%
|
|
46
|
%
|
|
47
|
%
|
|
(1)
|
Social(1)
|
118
|
|
97
|
|
21
|
|
22
|
%
|
|
25
|
|
23
|
|
2
|
|
9
|
%
|
|
21
|
%
|
|
23
|
%
|
|
(2)
|
Digital
|
70
|
|
70
|
|
—
|
|
—
|
%
|
|
13
|
|
17
|
|
(4)
|
|
(24)
|
%
|
|
19
|
%
|
|
25
|
%
|
|
(6)
|
|
PP- percentage
points.
|
|
(1) As a
result of the initial public offering of a minority interest in our
Social gaming business and starting with the first quarter of 2019,
we changed the calculation of Social business segment AEBITDA,
which now reflects intercompany payments for corporate services and
certain royalties paid for by our Social business segment to other
segments or to Corporate. Social business segment information for
the prior comparable period has been recast to reflect these
changes.
|
(2) As
calculations are made using whole dollar numbers, results may vary
compared to calculations presented in this table.
|
Key Highlights
- Gaming operations – revenues increased slightly on a
quarter sequential basis as our international operations average
daily revenue per unit increased $0.59 and the installed base increased 206 units,
while our U.S. and Canadian operations average daily revenues
increased $0.25 and the installed
based decreased by 627 units.
- Gaming machine sales – total new unit shipments in the
U.S. and Canada increased to 4,801
compared to 4,667 in the prior year due to increased shipments for
new openings and expansions, partly from Encore Boston Harbor. We
recently launched our new Wave XL cabinet on a for sale
model with three of our top internal brands. This cabinet is the
successor to our highly successful Pro Wave that
revolutionized the look and feel of casino floors.
- Gaming systems – revenue was flat from the prior year
reflecting fewer major site installations than the prior year,
which was offset by strong maintenance revenue.
- Lottery systems revenue was $35
million higher than the prior year primarily related to
equipment hardware sales and new lottery contracts in Maryland and Kansas from the prior year period.
- Domestic instant product revenue was down 11% related to
a change in the mix shipment volumes among our contract types
- Social gaming revenue increased 22% from the prior year,
which was twice the rate of market growth according to estimates
from Eilers and Krejcik. The growth was driven by increased
monetization of our paying players, with ARPDAU up 14%, while our
average DAU also increased to 2.7 million from 2.6 million in the
prior year.
- Our Digital casino platform reliably processed nearly
$9 billion in total wagers in the
first quarter. In April 2019, we
announced a partnership with Wynn Resorts to support their launch
of both iGaming and sports in the U.S.
LIQUIDITY
($ in
millions)
|
Three Months Ended
March 31,
|
|
|
|
2019
|
|
2018
|
|
Increase /
(Decrease)
|
Net loss
|
$
|
(24)
|
|
|
$
|
(202)
|
|
|
$
|
178
|
|
Non-cash adjustments
included in net loss
|
168
|
|
|
302
|
|
|
(135)
|
|
Non-cash
interest
|
7
|
|
|
6
|
|
|
1
|
|
Changes in deferred
income taxes and other
|
6
|
|
|
1
|
|
|
5
|
|
Distributed earnings
from equity investments
|
4
|
|
|
1
|
|
|
4
|
|
Changes in working
capital accounts
|
6
|
|
|
(78)
|
|
|
84
|
|
Net cash provided by
operating activities
|
$
|
167
|
|
|
$
|
30
|
|
|
$
|
137
|
|
- Net cash provided by operating activities increased to
$167 million from $30 million in the year ago period driven by the
improved operating results and lower restructuring and other
expenses and a $66 million favorable
change in accrued interest.
- Free cash flow, a non-GAAP financial measure defined below, was
$96 million compared to a cash usage
of $63 million in the year ago
period, due to the operating cash flow increase and lower capital
expenditures.
- During the quarter ended March 31,
2019, the Company made debt repayments of $145 million, including $135 million of voluntary repayments under its
revolving credit facility and $10
million in mandatory amortization of its term loans.
- On March 19, 2019, we
successfully completed a private offering of $1.1 billion in aggregate principal amount of new
8.250% senior unsecured notes due 2026 and redeemed $1.0 billion of our 10.000% senior unsecured
notes due 2022 in April 2019. We also
used the proceeds to pay accrued and unpaid interest plus related
premiums, fees and costs, and pay offering related fees and
expenses. This transaction extended our maturities and lowered our
interest rates.
- Capital expenditures totaled $67
million in the first quarter of 2019, compared to
$88 million in the prior-year period.
For 2019, we continue to expect capital expenditures will be within
a range of $345-$375 million.
Earnings Conference Call
Scientific Games executive leadership will host a conference
call on Tuesday, May 7, 2019, at
4:30 p.m. EST to review the Company's
first quarter 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 (412) 317-5420
(U.S. and 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.
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.
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.
COMPANY CONTACTS
Media
Relations
|
Investor
Relations
|
Susan Cartwright +1
702-532-7981
|
Michael Quartieri +1
702-532-7658
|
Vice President,
Corporate Communications
|
Executive Vice
President and Chief Financial Officer
|
susan.cartwright@scientificgames.com
|
|
All ® notices signify marks registered in the United States. © 2019 Scientific Games
Corporation. All Rights Reserved.
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited,
in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2018
|
Revenue:
|
|
|
|
Services
|
$
|
459
|
|
|
$
|
438
|
|
Product
sales
|
238
|
|
|
224
|
|
Instant
products
|
140
|
|
|
150
|
|
Total
revenue
|
837
|
|
|
812
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
Cost of
services(1)
|
133
|
|
|
122
|
|
Cost of product
sales(1)
|
107
|
|
|
105
|
|
Cost of
instant products(1)
|
67
|
|
|
70
|
|
Selling, general and
administrative
|
186
|
|
|
172
|
|
Research and
development
|
49
|
|
|
54
|
|
Depreciation,
amortization and impairments
|
165
|
|
|
188
|
|
Restructuring and
other
|
7
|
|
|
52
|
|
Total operating
expenses
|
714
|
|
|
763
|
|
Operating
income
|
123
|
|
|
49
|
|
Other (expense)
income:
|
|
|
|
Interest
expense
|
(154)
|
|
|
(155)
|
|
Earnings from equity
investments
|
6
|
|
|
7
|
|
Loss on debt
financing transactions
|
—
|
|
|
(93)
|
|
Gain (loss) on
remeasurement of debt
|
5
|
|
|
(1)
|
|
Other expense,
net
|
—
|
|
|
(3)
|
|
Total other expense,
net
|
(143)
|
|
|
(245)
|
|
Net loss before
income taxes
|
(20)
|
|
|
(196)
|
|
Income tax
expense
|
(4)
|
|
|
(6)
|
|
Net loss
|
$
|
(24)
|
|
|
$
|
(202)
|
|
|
|
|
|
Basic and diluted net
loss per share:
|
|
|
|
Basic
|
$
|
(0.26)
|
|
|
$
|
(2.24)
|
|
Diluted
|
$
|
(0.26)
|
|
|
$
|
(2.24)
|
|
|
|
|
|
Weighted average
number of shares used in per share calculations:
|
|
|
|
Basic
shares
|
92
|
|
|
90
|
|
Diluted
shares
|
92
|
|
|
90
|
|
|
|
(1) Excludes
depreciation and amortization.
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
Assets:
|
|
|
|
|
Cash and cash
equivalents(1)
|
|
$
|
1,213
|
|
|
$
|
168
|
|
Restricted
cash
|
|
41
|
|
|
39
|
|
Accounts receivable,
net
|
|
621
|
|
|
599
|
|
Notes receivable,
net
|
|
104
|
|
|
114
|
|
Inventories
|
|
229
|
|
|
216
|
|
Prepaid expenses,
deposits and other current assets
|
|
238
|
|
|
233
|
|
Total current
assets
|
|
2,446
|
|
|
1,369
|
|
|
|
|
|
|
Restricted
cash
|
|
12
|
|
|
13
|
|
Notes receivable,
net
|
|
33
|
|
|
40
|
|
Property and
equipment, net
|
|
517
|
|
|
547
|
|
Operating lease
right-of-use assets
|
|
118
|
|
|
—
|
|
Goodwill
|
|
3,301
|
|
|
3,280
|
|
Intangible assets,
net
|
|
1,745
|
|
|
1,809
|
|
Software,
net
|
|
277
|
|
|
285
|
|
Equity
investments
|
|
296
|
|
|
298
|
|
Other
assets
|
|
92
|
|
|
77
|
|
Total
assets
|
|
$
|
8,837
|
|
|
$
|
7,718
|
|
|
|
|
|
|
Liabilities and
Stockholders' Deficit:
|
|
|
|
|
Current portion of
long-term debt(1)
|
|
$
|
1,046
|
|
|
$
|
45
|
|
Accounts
payable
|
|
200
|
|
|
225
|
|
Accrued
liabilities
|
|
540
|
|
|
477
|
|
Total current
liabilities
|
|
1,786
|
|
|
747
|
|
|
|
|
|
|
Deferred income
taxes
|
|
109
|
|
|
108
|
|
Operating lease
liabilities
|
|
98
|
|
|
—
|
|
Other long-term
liabilities
|
|
330
|
|
|
334
|
|
Long-term debt,
excluding current portion
|
|
8,937
|
|
|
8,992
|
|
Total stockholders'
deficit
|
|
(2,423)
|
|
|
(2,463)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
8,837
|
|
|
$
|
7,718
|
|
|
(1) Includes $1
billion principal balance of the 2022 Unsecured Notes that were
redeemed on April 4, 2019 using the proceeds from the March 2019
issuance of 2026 Unsecured Notes, which proceeds are reflected in
cash and cash equivalents as of March 31, 2019.
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited,
in millions)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2019
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
$
|
(24)
|
|
|
$
|
(202)
|
|
|
Adjustments to
reconcile net loss to cash provided by operating
activities
|
179
|
|
|
309
|
|
|
Changes in working
capital accounts, net of effects of acquisitions
|
6
|
|
|
(78)
|
|
|
Changes in deferred
income taxes and other
|
6
|
|
|
1
|
|
|
Net cash provided by
operating activities
|
167
|
|
|
30
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(67)
|
|
|
(88)
|
|
|
Acquisitions of
businesses and assets, net of cash acquired
|
—
|
|
|
(274)
|
|
|
Distributions of
capital from equity investments
|
3
|
|
|
2
|
|
|
Net cash used in
investing activities
|
(64)
|
|
|
(360)
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
long-term debt, net of payments
|
953
|
|
|
5
|
|
|
Repayment of assumed
NYX and other acquisitions debt
|
—
|
|
|
(288)
|
|
|
Payments of debt
issuance and deferred financing costs
|
(14)
|
|
|
(39)
|
|
|
Payments on license
obligations
|
(7)
|
|
|
(7)
|
|
|
Sale of future
revenue
|
11
|
|
|
—
|
|
|
Net redemptions of
common stock under stock-based compensation plans and
other
|
(1)
|
|
|
(17)
|
|
|
Net cash provided by
(used in) financing activities
|
942
|
|
|
(346)
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
1
|
|
|
2
|
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
1,046
|
|
|
(674)
|
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
220
|
|
|
834
|
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
1,266
|
|
|
$
|
160
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for
interest
|
$
|
80
|
|
|
$
|
161
|
|
|
Income taxes
paid
|
10
|
|
|
7
|
|
|
Distributed earnings
from equity investments
|
4
|
|
|
1
|
|
|
Supplemental non-cash
transactions:
|
|
|
|
|
Non-cash rollover and
refinancing of Term loans
|
—
|
|
|
3,275
|
|
|
Non-cash interest
expense
|
7
|
|
|
6
|
|
|
NYX non-cash
consideration transferred
|
—
|
|
|
93
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF
NET LOSS TO CONSOLIDATED ADJUSTED EBITDA
|
AND SUPPLEMENTAL
BUSINESS SEGMENT DATA
|
(Unaudited,
in millions)
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2019
|
|
2018
|
|
Reconciliation of
Net Loss to Consolidated Adjusted EBITDA
|
|
|
|
|
|
Net loss
|
|
$
|
(24)
|
|
|
$
|
(202)
|
|
|
Restructuring and
other(1)
|
|
7
|
|
|
52
|
|
|
Depreciation,
amortization and impairments
|
|
165
|
|
|
188
|
|
|
Other expense,
net
|
|
2
|
|
|
6
|
|
|
Interest
expense
|
|
154
|
|
|
155
|
|
|
Income tax
expense
|
|
4
|
|
|
6
|
|
|
Stock-based
compensation
|
|
14
|
|
|
9
|
|
|
Loss on debt
financing transactions
|
|
—
|
|
|
93
|
|
|
(Gain) loss on
remeasurement of debt
|
|
(5)
|
|
|
1
|
|
|
EBITDA from equity
investments(2)
|
|
17
|
|
|
19
|
|
|
Earnings from equity
investments
|
|
(6)
|
|
|
(7)
|
|
|
Consolidated Adjusted
EBITDA
|
|
$
|
328
|
|
|
$
|
320
|
|
|
|
|
|
|
|
|
Supplemental
Business Segment Data
|
|
Business segments
Adjusted EBITDA
|
|
|
|
|
|
Gaming
|
|
$
|
215
|
|
|
$
|
218
|
|
|
Lottery
|
|
104
|
|
|
94
|
|
|
Social(3)
|
|
25
|
|
|
23
|
|
|
Digital
|
|
13
|
|
|
17
|
|
|
Total business
segments Adjusted EBITDA
|
|
357
|
|
|
352
|
|
|
Corporate and
other(3)(4)
|
|
(29)
|
|
|
(32)
|
|
|
Consolidated Adjusted
EBITDA
|
|
$
|
328
|
|
|
$
|
320
|
|
|
|
|
|
|
|
|
Reconciliation to
Consolidated Adjusted EBITDA margin
|
|
Consolidated Adjusted
EBITDA
|
|
$
|
328
|
|
|
$
|
320
|
|
|
Revenue
|
|
837
|
|
|
812
|
|
|
Consolidated Adjusted EBITDA margin
|
|
39.2
|
%
|
|
39.4
|
%
|
|
|
|
(1) Refer to
Consolidated AEBITDA definition for description of items included
in restructuring and other.
|
(2) The Company
received $7 million and $3 million in cash distributions and return
of capital payments from its equity investees for the three months
ended March 31, 2019 and 2018, respectively.
|
(3) As a result of
the initial public offering of a minority interest in our Social
gaming business and starting with the first quarter of 2019, we
changed the calculation of Social business segment AEBITDA, which
now reflects intercompany payments for corporate services and
certain royalties paid for by our Social business segment to other
segments or to Corporate. Social business segment information for
the prior comparable period has been recast to reflect these
changes.
|
(4) Includes
amounts not allocated to the business segments (including corporate
costs) and other non-operating expenses (income).
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
SUPPLEMENTAL
INFORMATION - SEGMENTS KEY PERFORMANCE INDICATORS AND SUPPLEMENTAL
FINANCIAL DATA
|
(Unaudited,
in millions, except unit and per unit data)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
March
31,
|
|
December
31,
|
Gaming Business
Segment Supplemental Financial Data:
|
2019
|
|
2018
|
|
2018
|
Revenue by line of
business:
|
|
|
|
|
|
Gaming
operations
|
$
|
152
|
|
|
$
|
161
|
|
|
$
|
151
|
|
Gaming machine
sales
|
136
|
|
|
145
|
|
|
167
|
|
Gaming
systems
|
74
|
|
|
75
|
|
|
92
|
|
Table
products
|
60
|
|
|
62
|
|
|
60
|
|
Total
revenue
|
$
|
422
|
|
|
$
|
443
|
|
|
$
|
470
|
|
|
|
|
|
|
|
Gaming Operations
Revenue:
|
|
|
|
|
|
U.S. and
Canadian:
|
|
|
|
|
|
Installed base at
period end
|
32,958
|
|
|
35,336
|
|
|
33,585
|
|
Average daily revenue
per unit
|
$
|
38.46
|
|
|
$
|
38.39
|
|
|
$
|
38.21
|
|
International:
|
|
|
|
|
|
Installed base at
period end
|
33,950
|
|
|
33,075
|
|
|
33,744
|
|
Average daily revenue
per unit
|
$
|
11.43
|
|
|
$
|
12.33
|
|
|
$
|
10.84
|
|
|
|
|
|
|
|
Gaming Machine Sales
Revenue:
|
|
|
|
|
|
U.S. and Canadian new
unit shipments
|
4,801
|
|
|
4,667
|
|
|
4,733
|
|
International new
unit shipments
|
2,083
|
|
|
2,201
|
|
|
4,290
|
|
New unit
shipments
|
6,884
|
|
|
6,868
|
|
|
9,023
|
|
Average sales price
per new unit
|
$
|
17,140
|
|
|
$
|
17,722
|
|
|
$
|
16,113
|
|
|
|
|
|
|
|
Gaming Machine Unit
Sales Components:
|
|
|
|
|
|
U.S. and Canadian
unit shipments:
|
|
|
|
|
|
Replacement
units
|
3,194
|
|
|
3,743
|
|
|
4,447
|
|
Casino opening and
expansion units
|
1,607
|
|
|
924
|
|
|
286
|
|
Total unit
shipments
|
4,801
|
|
|
4,667
|
|
|
4,733
|
|
|
|
|
|
|
|
International unit
shipments:
|
|
|
|
|
|
Replacement
units
|
2,083
|
|
|
1,940
|
|
|
4,184
|
|
Casino opening and
expansion units
|
—
|
|
|
261
|
|
|
106
|
|
Total unit
shipments
|
2,083
|
|
|
2,201
|
|
|
4,290
|
|
|
|
|
|
|
|
Lottery Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Instant products
revenue by geography:
|
|
|
|
|
|
United
States
|
$
|
93
|
|
|
$
|
105
|
|
|
$
|
96
|
|
International
|
47
|
|
|
45
|
|
|
54
|
|
Instant products
revenue
|
$
|
140
|
|
|
$
|
150
|
|
|
$
|
150
|
|
|
|
|
|
|
|
Lottery systems
revenue by financial statement line item:
|
|
|
|
|
|
Services
|
$
|
54
|
|
|
$
|
47
|
|
|
$
|
60
|
|
Products
|
33
|
|
|
5
|
|
|
21
|
|
Lottery systems
revenue
|
$
|
87
|
|
|
$
|
52
|
|
|
$
|
81
|
|
|
|
|
|
|
|
Digital Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Revenue by Line of
Business;
|
|
|
|
|
|
Sports and
platform
|
$
|
30
|
|
|
$
|
26
|
|
|
$
|
33
|
|
Gaming and
other
|
40
|
|
|
44
|
|
|
38
|
|
Total
revenue
|
$
|
70
|
|
|
$
|
70
|
|
|
$
|
71
|
|
|
|
|
|
|
|
Wagers processed
through OGS (in billions)
|
$
|
8.9
|
|
|
$
|
8.9
|
|
|
$
|
8.9
|
|
|
|
|
|
|
|
Social Business
Segment Supplemental Financial Data:
|
|
|
|
|
|
Revenue by
Platform:
|
|
|
|
|
|
Mobile
|
$
|
97
|
|
|
$
|
73
|
|
|
$
|
91
|
|
Web and
other
|
21
|
|
|
24
|
|
|
23
|
|
Total
revenue
|
$
|
118
|
|
|
$
|
97
|
|
|
$
|
114
|
|
|
|
|
|
|
|
Mobile
penetration(1)
|
82
|
%
|
|
75
|
%
|
|
80
|
%
|
Average
MAU(2)
|
8.4
|
|
|
8.1
|
|
|
8.4
|
|
Average
DAU(3)
|
2.7
|
|
|
2.6
|
|
|
2.7
|
|
ARPDAU(4)
|
$
|
0.48
|
|
|
$
|
0.42
|
|
|
$
|
0.46
|
|
|
(1) Mobile
penetration is defined as the percentage of B2C social gaming
revenue generated from mobile platforms.
|
(2) MAU =
Monthly Active Users is a count of visitors to our sites during a
month. An individual who plays two different games or from two
different devices may, in certain circumstances, be counted twice.
However, we use third-party data to limit the occurrence of double
counting.
|
(3) DAU = Daily
Active Users is a count of visitors to our sites during a day. An
individual who plays two different games or from two different
devices may, in certain circumstances, be counted twice. However,
we use third-party data to limit the occurrence of double
counting.
|
(4) ARPDAU =
Average revenue per DAU is calculated by dividing revenue for a
period by the DAU for the period by the number of days for the
period.
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
(Unaudited,
in millions, except for ratio)
|
CALCULATION OF NET
DEBT LEVERAGE RATIO
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(174)
|
|
|
$
|
(343)
|
|
|
Restructuring and
other
|
|
208
|
|
|
89
|
|
|
Depreciation,
amortization and impairments
|
|
667
|
|
|
706
|
|
|
Other (income)
expense, net
|
|
(11)
|
|
|
20
|
|
|
Interest
expense
|
|
596
|
|
|
605
|
|
|
Income tax
expense
|
|
11
|
|
|
4
|
|
|
Stock-based
compensation
|
|
49
|
|
|
30
|
|
|
Loss on debt
financing transactions
|
|
—
|
|
|
102
|
|
|
(Gain) loss on
remeasurement of debt
|
|
(49)
|
|
|
1
|
|
|
EBITDA from equity
investments
|
|
65
|
|
|
70
|
|
|
Earnings from equity
investments
|
|
(24)
|
|
|
(25)
|
|
|
Consolidated
Adjusted EBITDA
|
|
$
|
1,338
|
|
|
$
|
1,259
|
|
|
|
|
|
|
|
|
Principal face value
of debt outstanding(1)(2)
|
|
$
|
10,172
|
|
|
$
|
8,989
|
|
|
Less:
Cash and cash equivalents(2)
|
|
1,213
|
|
|
110
|
|
|
Net debt
|
|
$
|
8,959
|
|
|
$
|
8,879
|
|
|
Net debt leverage
ratio
|
|
6.7
|
|
|
7.1
|
|
|
|
(1) Principal face
value of outstanding 2026 Secured Euro Notes and 2026 Unsecured
Euro Notes are translated at the constant foreign exchange rate at
issuance of these notes. Euro to USD exchange rates at issuance and
as of March 31, 2019 were 1.24 and 1.13, respectively, resulting in
a $63 million adjustment increasing the principal face value of
debt outstanding presented above. Additionally, principal face
value excludes $11 million in proceeds received from transactions
completed in 2018 which are presented as debt.
|
(2) Includes $1
billion principal balance of the 2022 Unsecured Notes that were
redeemed on April 4, 2019 using the proceeds from the March 2019
issuance of 2026 Unsecured Notes, which proceeds are reflected in
cash and cash equivalents as of March 31, 2019.
|
|
|
|
|
|
CALCULATION OF
FREE CASH FLOW
|
|
|
Three Months Ended
March 31,
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
Net cash provided by
operating activities(1)
|
|
$
|
167
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
Less: Capital
expenditures
|
|
(67)
|
|
|
(88)
|
|
|
Add:
Distributions of capital from equity investments
|
|
3
|
|
|
2
|
|
|
Less: Payments on
license obligations
|
|
(7)
|
|
|
(7)
|
|
|
Free cash
flow
|
|
$
|
96
|
|
|
$
|
(63)
|
|
|
|
(1) The 2019 and
2018 first quarters include a $66 million favorable and a $50
million unfavorable change, respectively, in accrued interest due
to the February 2018 refinancing. The 2018 first quarter includes
approximately $30 million of payments related to NYX transaction
costs.
|
|
|
|
RECONCILIATION OF
EARNINGS FROM EQUITY
INVESTMENTS TO EBITDA FROM EQUITY
INVESTMENTS
|
|
|
Three Months Ended
March 31,
|
|
|
|
2019
|
|
2018
|
|
EBITDA from equity
investments:
|
|
|
|
|
|
Earnings from equity
investments
|
|
$
|
6
|
|
|
$
|
7
|
|
|
Add: Income tax
expense
|
|
3
|
|
|
2
|
|
|
Add: Depreciation and
amortization
|
|
8
|
|
|
9
|
|
|
Add: Interest
(expense) income, net and other
|
|
—
|
|
|
1
|
|
|
EBITDA from equity
investments
|
|
$
|
17
|
|
|
$
|
19
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
SUPPLEMENTAL
INFORMATION - RECAST QUARTERLY SOCIAL BUSINESS SEGMENT FINANCIAL
DATA
|
(Unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recast Social
Business Segment Adjusted EBITDA
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY18
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY17
|
Social, as
reported
|
$
|
26
|
|
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
106
|
|
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
20
|
|
|
$
|
22
|
|
|
$
|
82
|
|
Less: Intercompany
charges and other(1)
|
(3)
|
|
|
(2)
|
|
|
(3)
|
|
|
(4)
|
|
|
(12)
|
|
|
(5)
|
|
|
(1)
|
|
|
(4)
|
|
|
(3)
|
|
|
(13)
|
|
Social,
recast
|
$
|
23
|
|
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
94
|
|
|
$
|
13
|
|
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
19
|
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recast Corporate
and Other Adjusted EBITDA(2)
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY18
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY17
|
Corporate and other,
as reported(2)
|
$
|
(35)
|
|
|
$
|
(33)
|
|
|
$
|
(38)
|
|
|
$
|
(35)
|
|
|
$
|
(141)
|
|
|
$
|
(31)
|
|
|
$
|
(32)
|
|
|
$
|
(35)
|
|
|
$
|
(35)
|
|
|
$
|
(133)
|
|
Add: Intercompany
charges and other(1)
|
3
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
12
|
|
|
5
|
|
|
1
|
|
|
4
|
|
|
3
|
|
|
13
|
|
Corporate and other,
recast(2)
|
$
|
(32)
|
|
|
$
|
(31)
|
|
|
$
|
(35)
|
|
|
$
|
(31)
|
|
|
$
|
(129)
|
|
|
$
|
(26)
|
|
|
$
|
(31)
|
|
|
$
|
(31)
|
|
|
$
|
(32)
|
|
|
$
|
(120)
|
|
|
As a result of the
initial public offering of a minority interest in our Social gaming
business and starting with the first quarter of 2019, we changed
the calculation of Social business segment AEBITDA, which now
reflects intercompany payments for corporate services and certain
royalties paid for by our Social business segment to other segments
or to Corporate. Social business segment information for the prior
comparable period has been recast in this presentation to reflect
these changes.
|
(1) Includes
corporate services, third-party royalties under intercompany IP
license charges and other.
|
(2) Includes
amounts not allocated to the business segments (including corporate
costs), other non-operating expenses (income) and certain
intercompany charges described in footnote 1 above.
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
GAMING OPERATIONS
KEY PERFORMANCE INDICATORS
|
(Unaudited, in
millions, except Average Daily Revenue per Unit
(ADRPU))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. and
Canadian:
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY18
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY17
|
Revenue
|
$
|
122
|
|
|
$
|
124
|
|
|
$
|
125
|
|
|
$
|
118
|
|
|
$
|
489
|
|
|
$
|
133
|
|
|
$
|
134
|
|
|
$
|
132
|
|
|
$
|
126
|
|
|
$
|
525
|
|
Ending installed
base
|
35,336
|
|
|
35,170
|
|
|
33,530
|
|
|
33,585
|
|
|
33,585
|
|
|
35,974
|
|
|
35,957
|
|
|
35,680
|
|
|
35,190
|
|
|
35,190
|
|
ADRPU
|
$
|
38.39
|
|
|
$
|
38.75
|
|
|
$
|
39.44
|
|
|
$
|
38.21
|
|
|
$
|
38.70
|
|
|
$
|
40.67
|
|
|
$
|
40.94
|
|
|
$
|
40.13
|
|
|
$
|
38.50
|
|
|
$
|
40.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
37
|
|
|
$
|
36
|
|
|
$
|
32
|
|
|
$
|
34
|
|
|
$
|
139
|
|
|
$
|
33
|
|
|
$
|
36
|
|
|
$
|
37
|
|
|
$
|
36
|
|
|
$
|
142
|
|
Ending installed
base
|
33,075
|
|
|
33,329
|
|
|
33,567
|
|
|
33,744
|
|
|
33,744
|
|
|
32,460
|
|
|
33,481
|
|
|
33,851
|
|
|
33,548
|
|
|
33,578
|
|
ADRPU
|
$
|
12.33
|
|
|
$
|
11.75
|
|
|
$
|
10.50
|
|
|
$
|
10.84
|
|
|
$
|
11.34
|
|
|
$
|
11.32
|
|
|
$
|
11.83
|
|
|
$
|
11.88
|
|
|
$
|
11.56
|
|
|
$
|
11.64
|
|
|
Effective the first
quarter of 2019, we changed our gaming operations KPIs, which now
reflect our U.S. and Canadian units as a stand-alone category and
our International units as a stand-alone category. This change was
made to align our external financial reporting with how our
management team evaluates the operating performance of the business
segment.
|
Forward-Looking Statements
In this press release, Scientific Games makes "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements describe
future expectations, plans, results or strategies and can often be
identified by the use of terminology such as "may," "will,"
"estimate," "intend," "plan," "continue," "believe," "expect,"
"anticipate," "target," "should," "could," "potential,"
"opportunity," "goal," or similar terminology. These statements are
based upon management's current expectations, assumptions and
estimates and are not guarantees of timing, future results or
performance. Therefore, you should not rely on any of these
forward-looking statements as predictions of future events. Actual
results may differ materially from those contemplated in these
statements due to a variety of risks and uncertainties and other
factors, including, among other things: competition; U.S. and
international economic and industry conditions; slow growth of new
gaming jurisdictions, slow addition of casinos in existing
jurisdictions and declines in the replacement cycle of gaming
machines; ownership changes and consolidation in the gaming
industry; opposition to legalized gaming or the expansion thereof
and potential restrictions on internet wagering; inability to adapt
to, and offer products that keep pace with, evolving technology,
including any failure of our investment of significant resources in
our R&D efforts; inability to develop successful products and
services and capitalize on trends and changes in our industries,
including the expansion of internet and other forms of interactive
gaming; laws and government regulations, both foreign and domestic,
including those relating to gaming, data privacy and security,
including with respect to the collection, storage, use,
transmission and protection of personal information and other
consumer data, and environmental laws, and those laws and
regulations that affect companies conducting business on the
internet, including online gambling; the continuing evolution of
the scope of data privacy and security regulations, and our belief
that the adoption of increasingly restrictive regulations in this
area is likely within the U.S. and other jurisdictions; significant
opposition in some jurisdictions to interactive social gaming,
including social casinos and how such opposition could lead these
jurisdictions to adopt legislation or impose a regulatory framework
to govern interactive social gaming or social casinos specifically,
and how this could result in a prohibition on interactive social
gaming or social casinos altogether, restrict our ability to
advertise our games, or substantially increase our costs to comply
with these regulations; legislative interpretation and enforcement,
regulatory perception and regulatory risks with respect to gaming,
especially internet wagering, social gaming and sports wagering;
reliance on technological blocking systems; expectations of shift
to regulated online gaming or sports wagering; expectations of
growth in total consumer spending on social casino gaming;
dependence upon key providers in our Social gaming business;
inability to win, retain or renew, or unfavorable revisions of,
existing contracts, and the inability to enter into new contracts;
protection of our intellectual property, inability to license
third-party intellectual property and the intellectual property
rights of others; security and integrity of our products and
systems; reliance on or failures in information technology and
other systems; security breaches and cyber-attacks, challenges or
disruptions relating to the implementation of a new global
enterprise resource planning system; failure to maintain adequate
internal control over financial reporting; natural events that
disrupt our operations or those of our customers, suppliers or
regulators; inability to benefit from, and risks associated with,
strategic equity investments and relationships; risks related to
the initial public offering of a minority interest in our social
gaming business, including the possibility that the anticipated
benefits of the initial public offering are not realized or that we
may not be able to utilize the proceeds of the initial public
offering as expected; incurrence of restructuring costs;
implementation of complex new accounting standards; changes in
estimates or judgments related to our impairment analysis of
goodwill or other intangible assets; changes in demand for our
products; fluctuations in our results due to seasonality and other
factors; dependence on suppliers and manufacturers; risks relating
to foreign operations, including anti-corruption laws, fluctuations
in currency rates, restrictions on the payment of dividends from
earnings, restrictions on the import of products and financial
instability, including the potential impact to our business
resulting from the considerable uncertainty around the U.K.'s
withdrawal from the European Union ("EU") and the possibility of
the British parliament's failure to approve the U.K.'s withdrawal
from the EU, resulting in a "hard Brexit" or "no deal Brexit", and
the potential impact to our instant lottery product concession or
VLT lease arrangements resulting from the economic and political
conditions in Greece; possibility
that the renewal of LNS' concession to operate the Italian instant
games lottery is not finalized (including as the result of a
protest or any right of appeal on a court ruling on a protest); the
impact of the new U.K. legislation approving the reduction of
fixed-odds betting terminals maximum stakes limit; changes in tax
laws or tax rulings, or the examination of our tax positions;
difficulty predicting what impact, if any, the shutdown of the U.S.
government or new tariffs imposed by and other trade actions taken
by the U.S. and foreign jurisdictions could have on our business;
dependence on key employees; litigation and other liabilities
relating to our business, including litigation and liabilities
relating to our contracts and licenses, our products and systems,
our employees (including labor disputes), intellectual property,
environmental laws and our strategic relationships; level of our
indebtedness, higher interest rates, availability or adequacy of
cash flows and liquidity to satisfy indebtedness, other obligations
or future cash needs; inability to reduce or refinance our
indebtedness; restrictions and covenants in debt agreements,
including those that could result in acceleration of the maturity
of our indebtedness; influence of certain stockholders,
including decisions that may conflict with the interests of other
stockholders; and stock price volatility.
Additional information regarding risks and uncertainties and
other factors that could cause actual results to differ materially
from those contemplated in forward-looking statements is included
from time to time in our filings with the SEC, including the
Company's current reports on Form 8-K, quarterly reports on Form
10-Q and its latest annual report on Form 10-K filed with the SEC
on February 28, 2019 (including under
the headings "Forward Looking Statements" and "Risk Factors").
Forward-looking statements speak only as of the date they are made
and, except for our ongoing obligations under the U.S. federal
securities laws, we undertake no and expressly disclaim any
obligation to publicly update any forward-looking statements
whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Measures
The Company's management uses the following non-GAAP financial
measures in conjunction with GAAP financial measures: Consolidated
AEBITDA, Consolidated AEBITDA margin, free cash flow, EBITDA from
equity investments, net debt and net debt leverage ratio (each, as
described more fully below). These non-GAAP financial measures are
presented as supplemental disclosures. They should not be
considered in isolation of, as a substitute for, or superior to,
the financial information prepared in accordance with GAAP, and
should be read in conjunction with the Company's financial
statements filed with the SEC. The non-GAAP financial measures used
by the Company may differ from similarly titled measures presented
by other companies.
Specifically, the Company's management uses Consolidated AEBITDA
to, among other things: (i) monitor and evaluate the performance of
the consolidated Company's business operations; (ii) facilitate
management's internal and external comparisons of the Company's
consolidated historical operating performance; and (iii) analyze
and evaluate financial and strategic planning decisions regarding
future operating investments and operating budgets.
In addition, the Company's management uses Consolidated AEBITDA
and Consolidated AEBITDA margin to facilitate management's external
comparisons of the Company's consolidated results to the historical
operating performance of other companies that may have different
capital structures and debt levels.
The Company's management uses EBITDA from equity investments to
monitor and evaluate the performance of the Company's equity
investments. The Company's management uses net debt and net debt
leverage ratio in monitoring and evaluating the Company's overall
liquidity, financial flexibility and leverage.
The Company's management believes that each of these non-GAAP
financial measures are useful as they provide management and
investors with information regarding the Company's financial
condition and operating performance that is an integral part of
management's reporting and planning processes. In particular, the
Company's management believes that Consolidated AEBITDA is helpful
because this non-GAAP financial measure eliminates the effects of
restructuring, transaction, integration or other items that
management believes is less indicative of the Company's ongoing
underlying operating performance and are better evaluated
separately. Management believes Consolidated AEBITDA margin is
useful for analysts and investors as this measure allows an
evaluation of the performance of our ongoing business operations
and provides insight into the cash operating income margins
generated from our business, from which capital investments are
made and debt is serviced. Moreover, management believes EBITDA
from equity investments is useful to investors because the
Company's Lottery business is conducted through a number of equity
investments, and this measure eliminates financial items from the
equity investees' earnings that management believes has less
bearing on the equity investees' performance. Management believes
that free cash flow provides useful information regarding the
Company's liquidity and its ability to service debt and fund
investments. Management also believes that free cash flow is useful
for investors because it provides them with an important
perspective on the cash available for debt repayment and other
strategic measures, after making necessary capital investments in
property and equipment and necessary license payments to support
the Company's ongoing business operations and taking into account
cash flows relating to the Company's equity investments. Management
believes that net debt and net debt leverage ratio are useful for
investors in evaluating the Company's overall liquidity.
Consolidated AEBITDA
Consolidated AEBITDA, as used herein, is a non-GAAP financial
measure that is presented as supplemental disclosure and is
reconciled to net income (loss) as the most directly comparable
GAAP measure, as set forth in the schedule titled "Reconciliation
of Net Loss to Consolidated Adjusted EBITDA" below. Consolidated
AEBITDA should not be considered in isolation of, as a substitute
for, or superior to, the consolidated financial information
prepared in accordance with GAAP, and should be read in conjunction
with the Company's financial statements filed with the SEC.
Consolidated AEBITDA may differ from similarly titled measures
presented by other companies.
Consolidated AEBITDA is reconciled to consolidated net income
(loss) and includes net loss with the following adjustments: (1)
restructuring and other, which includes charges or expenses
attributable to: (i) employee severance; (ii) management changes;
(iii) restructuring and integration; (iv) M&A and other, which
includes: (a) M&A transaction costs, (b) purchase accounting,
(c) unusual items (including certain litigation), and (d) other
non-cash items; and (v) cost savings initiatives; (2) depreciation
and amortization expense and impairment charges (including goodwill
impairment charges); (3) change in fair value of investments and
remeasurement of debt; (4) interest expense; (5) income taxes
expense (benefit): (6) stock-based compensation; and (7) loss
(gain) on debt financing transactions. In addition to the preceding
adjustments, we exclude earnings from equity method investments and
add (without duplication) our pro rata share of EBITDA of our
equity investments, which represents our share of earnings (whether
or not distributed to us) before income tax expense, depreciation
and amortization expense, and interest (income) expense, net of our
joint ventures and minority investees. AEBITDA is presented
exclusively as our segment measure of profit or loss.
Consolidated AEBITDA Margin
Consolidated AEBITDA margin, as used herein, represents our
Consolidated AEBITDA (as defined above) for the three-month periods
ended March 31, 2019 and 2018, each
calculated as a percentage of revenue. Consolidated AEBITDA margin
is a non-GAAP financial measure that is presented as supplemental
disclosures for illustrative purposes only and is reconciled to net
income (loss), the most directly comparable GAAP measure, in a
schedule below.
Free Cash Flow
Free cash flow, as used herein, represents net cash (used in)
provided by operating activities less total capital expenditures
(which includes lottery, gaming and digital systems expenditures
and other intangible assets and software expenditures), less
payments on license obligations, less additions to equity method
investments plus distributions of capital from equity investments.
Free cash flow is a non-GAAP financial measure that is presented as
supplemental disclosure for illustrative purposes only and is
reconciled to net cash provided by operating activities in a
schedule below.
EBITDA from Equity Investments
EBITDA from equity investments, as used herein, represents our
share of the EBITDA (i.e., earnings (whether or not distributed to
us) plus income tax expense, depreciation and amortization expense
(inclusive of amortization of payments made to customers for LNS),
interest (income) expense, net, and other non-cash and unusual
items of other of our joint ventures and minority investees. EBITDA
from equity investments is a non-GAAP financial measure that is
presented as supplemental disclosure for illustrative purposes only
and is reconciled to earnings from equity investments, the most
directly comparable GAAP measure, in a schedule below.
Net Debt and Net Debt Leverage Ratio
Net debt is defined as total principal face value of debt
outstanding, the most directly comparable GAAP measure, less cash
and cash equivalents. Net debt leverage ratio, as used herein,
represents net debt divided by Consolidated AEBITDA (as defined
above) for the trailing twelve-month period.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/scientific-games-reports-first-quarter-2019-results-300845642.html
SOURCE Scientific Games Corporation