Delivered Consolidated Revenue Growth of 20%
Year-Over-Year with Double Digit Growth Across all
Businesses
Nine Consecutive Quarters of Consolidated
Revenue Growth
Healthy Balance Sheet Position, Strong
Cashflow Generation and Continued Deleveraging Profile
Commenced Trading on Australian Securities
Exchange
Light & Wonder, Inc. (NASDAQ and ASX: LNW) (“Light &
Wonder,” “L&W,” or the “Company”) today reported results for
the second quarter ended June 30, 2023.
We continued with strong momentum and delivered a ninth
consecutive quarter of consolidated revenue growth year-over-year.
Consolidated revenue in the quarter grew 20%, resulting in strong
margins and cash flows as we continued our advancement toward our
long-term financial targets. The growth was driven by double-digit
growth across all of our businesses, including another quarter of
record revenues for SciPlay and iGaming:
- Gaming revenue increased 21% compared to the prior year period
to $471 million, primarily due to continued momentum in Gaming
machine sales, which increased 41% driven by increases in North
American and Australian machine sales, coupled with strong
performance in North American Gaming operations, Gaming systems and
Table products.
- SciPlay achieved record revenue of $190 million, a 19% increase
compared to the prior year period, driven by the core social casino
business, which once again delivered strong payer metrics and
outpaced the market and gained share.
- iGaming revenue reached another record quarterly revenue of $70
million, a 17% increase from the prior year period, primarily
driven by continued growth in the U.S. market.
Matt Wilson, President and Chief Executive Officer of Light
& Wonder, said, “Our reported numbers continue to validate
the investments that we’ve made in our business and demonstrate the
significant progress we are making towards our long-term targets.
Year to date, we delivered double-digit top and bottom line growth
across all three of our businesses, generated strong cash flows and
reduced leverage, resulting in an exceptional second quarter. I am
also pleased to share that Light & Wonder is expanding its
global presence, with a successful ASX listing during the quarter
that is gaining momentum with the investment community. We will
continue to execute on our core strategy and product roadmap, and
look forward to sharing more with you at Australasian Gaming Expo
in August and Global Gaming Expo in October.”
Connie James, Chief Financial Officer of Light &
Wonder, added, “I am proud to have been part of such a diverse
and capable team, and of our many accomplishments during my time
here as my tenure comes to an end at Light & Wonder. We
accomplished a number of meaningful milestones in transforming the
Company and are now well-positioned with a healthy balance sheet
and a strategic capital allocation plan. The continued growth we
saw in the second quarter reflects the focused execution that is in
our DNA. With a wealth of talent, sound financials, and an
outstanding portfolio of assets, Light & Wonder continues to be
in good hands moving forward as the leading cross-platform global
games company.”
LEVERAGE, CAPITAL RETURN, AND STRATEGY UPDATE
- Principal face value of debt outstanding(1) of $3.9
billion, translating to net debt leverage ratio(2) of 2.9x,
within our targeted net debt leverage ratio(2) range of 2.5x to
3.5x, as of June 30, 2023, a decrease of 0.4x from December 31,
2022, and the lowest level in the Company’s recent history.
- Secondary listing on the Australian Securities Exchange
(ASX) — the Company’s common stock is listed as CHESS
Depositary Interests (CDIs) on the ASX and commenced active trading
on May 22, 2023 (AEST) under the ticker symbol “LNW.” The Company
believes this secondary listing will create substantial benefits
for L&W and its shareholders, including enhancing the Company’s
profile in Australia, one of the leading markets for L&W’s
Gaming business, and providing the Company access to new long-term
Australian institutional investors that complement our strong
existing base of shareholders.
- Agreement to acquire the remaining 17% equity interest in
SciPlay — On August 8, 2023, the Company entered into a
definitive agreement to acquire the remaining equity interest in
SciPlay not already owned by the Company (approximately 17%)
pursuant to a merger in which SciPlay’s shareholders will receive
$22.95 for each share of SciPlay Class A common stock they own
(subject to certain exceptions set forth in the Merger Agreement,
dated as of August 8, 2023, by and among Light & Wonder, Bern
Merger Sub, Inc. and SciPlay (the “Merger Agreement”)) in an
all-cash transaction (the “SciPlay Acquisition”). As a result of
the SciPlay Acquisition, SciPlay will cease to be publicly traded
and will become a wholly owned subsidiary of L&W. The Company
believes that this transaction will enable seamless collaboration
with SciPlay that will add further momentum to the Company’s
already robust cross-platform strategy, provide flexibility for use
of SciPlay cash flows for investments across the enterprise, and
facilitate long-term margin enhancement opportunities via
synergies, all of which are expected to increase shareholder
value.
SUMMARY RESULTS
Unless otherwise noted, amounts, percentages and discussion
included below reflect the results of operations and financial
condition of the Company’s continuing operations, which includes
its Gaming, SciPlay and iGaming businesses. We have reflected our
former Lottery business (disposed during the second quarter of
2022) and Sports Betting business (disposed during the third
quarter of 2022) (collectively referred to as the “Divestitures”)
as discontinued operations.
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions)
2023
2022
2023
2022
Revenue
$
731
$
610
$
1,400
$
1,183
Net income (loss)
5
(150
)
32
(217
)
Net (loss) income attributable to
L&W
(1
)
3,291
21
3,317
Net cash provided by (used in) operating
activities(3)
34
(37
)
219
57
Capital expenditures
59
57
112
100
Non-GAAP Financial
Measures
Consolidated AEBITDA(2)
$
281
$
212
$
529
$
414
Free cash flow(2)(3)(4)
24
(95
)
98
(106
)
As of
Balance Sheet
Measures
June 30, 2023
December 31, 2022
Cash and cash equivalents
$
909
$
914
Total debt
3,886
3,894
Available liquidity(5)
1,797
1,802
(1) Principal face value of debt
outstanding represents outstanding principal value of debt balances
that conforms to the presentation found in Note 11 to the Condensed
Consolidated Financial Statements in our June 30, 2023 Form
10-Q.
(2) Represents a non-GAAP financial
measure. Additional information on non-GAAP financial measures
presented herein is available at the end of this release.
(3) For the three and six months ended
June 30, 2022, these financial measures represent combined results
inclusive of discontinued operations.
(4) For the three and six months ended
June 30, 2023, free cash flow was impacted by $32 million in cash
taxes paid related to the Divestitures and $7 million related to
professional services associated with the ASX listing. For the
three and six months ended June 30, 2022, free cash flow was
impacted by $114 million in costs supporting strategic review and
related transactions (including the Lottery business closing
expenses) and accelerated interest payments related to debt pay
down and refinancing transactions.
(5) Available liquidity is calculated as
cash and cash equivalents plus remaining revolver capacity,
including the SciPlay Revolver.
Second Quarter 2023 Financial Highlights
- Second quarter consolidated revenue was $731 million
compared to $610 million, up 20% compared to the prior year period
driven by double-digit growth across all of our businesses,
representing a ninth consecutive quarter of growth. Gaming revenue
increased 21%, driven by another quarter of robust growth in Gaming
machine sales, which grew 41% year-over-year, while SciPlay and
iGaming each reached another quarterly revenue record.
- Net income was $5 million compared to a net loss of $150
million in the prior year period, which included a $147 million
loss on financing transactions associated with the debt pay down
and refinancing transactions in April 2022. The current year period
increased primarily due to higher revenue and operating income as
well as lower interest expense.
- Consolidated AEBITDA, a non-GAAP financial measure
defined below, was $281 million, an increase of 33% compared to the
prior year period, driven by double-digit growth across all of our
businesses and margin expansion.
- Net cash provided by operating activities was $34
million compared to combined net cash used in operating activities
of $(37) million in the prior year period. The current year period
cash flows benefited from lower interest payments, partially offset
by $32 million in cash taxes paid related to the Divestitures and
$7 million related to professional services associated with the ASX
listing, while prior year period combined cash flows were impacted
by costs associated with the strategic review and related
transactions and accelerated interest payments related to the debt
pay down and refinancing transactions.
- Free cash flow, a non-GAAP financial measure defined
below, was $24 million compared to combined free cash flow(1) of
$(95) million in the prior year period. The current year period
free cash flow was impacted by $32 million in cash taxes paid
related to the Divestitures and $7 million related to professional
services associated with the ASX listing, while the prior year
period combined free cash flow was primarily impacted by
approximately $114 million in costs supporting strategic review and
related transactions (including the Lottery business closing
expenses) and accelerated interest payments related to the debt pay
down and refinancing transactions.
- Net debt leverage ratio, a non-GAAP financial measure
defined below, was 2.9x as of June 30, 2023 compared to 3.3x as of
December 31, 2022, remaining in our targeted net debt leverage
ratio(1) range of 2.5x to 3.5x.
First Half 2023 Selected Financial Highlights
- First half consolidated revenue was $1,400 million
compared to $1,183 million, up 18% compared to the prior year
period driven by double-digit growth across all of our businesses.
Gaming revenue increased 19%, driven by robust growth in Gaming
machine sales, which grew 46% year-over-year, while SciPlay and
iGaming each reached record revenue.
- Net income was $32 million compared to a net loss of
$217 million in the prior year period, which included a $147
million loss on financing transactions associated with the debt pay
down and refinancing transactions in April 2022. The current year
period increased primarily due to higher revenue and operating
income as well as lower interest expense.
- Consolidated AEBITDA, a non-GAAP financial measure
defined below, was $529 million, an increase of 28% compared to the
prior year period, driven by double-digit growth across all of our
businesses and margin expansion.
- Adjusted NPATA, a non-GAAP financial measure defined
below, was $179 million.
(1) Represents a non-GAAP financial
measure. Additional information on non-GAAP financial measures
presented herein is available at the end of this release.
BUSINESS SEGMENT
HIGHLIGHTS
FOR THE THREE MONTHS ENDED
JUNE 30, 2023
($ in millions)
Revenue
AEBITDA
AEBITDA Margin(1)(2)
2023
2022
$
%
2023
2022
$
%
2023
2022
PP Change(2)
Gaming
$
471
$
390
$
81
21
%
$
233
$
179
$
54
30
%
49
%
46
%
3
SciPlay
190
160
30
19
%
59
41
18
44
%
31
%
26
%
5
iGaming
70
60
10
17
%
24
21
3
14
%
34
%
35
%
(1
)
Corporate and other(3)
—
—
—
—
%
(35
)
(29
)
(6
)
(21
)%
n/a
n/a
n/a
Total
$
731
$
610
$
121
20
%
$
281
$
212
$
69
33
%
38
%
35
%
3
BUSINESS SEGMENT
HIGHLIGHTS
FOR THE SIX MONTHS ENDED JUNE
30, 2023
($ in millions)
Revenue
AEBITDA
AEBITDA Margin(1)(2)
2023
2022
$
%
2023
2022
$
%
2023
2022
PP Change(2)
Gaming
$
890
$
745
$
145
19
%
$
438
$
350
$
88
25
%
49
%
47
%
2
SciPlay
376
318
58
18
%
113
85
28
33
%
30
%
27
%
3
iGaming
134
120
14
12
%
47
41
6
15
%
35
%
34
%
1
Corporate and other(3)
—
—
—
—
%
(69
)
(62
)
(7
)
(11
)%
n/a
n/a
n/a
Total
$
1,400
$
1,183
$
217
18
%
$
529
$
414
$
115
28
%
38
%
35
%
3
PP — percentage points.
n/a — not applicable.
(1) Segment AEBITDA Margin is calculated
as segment AEBITDA as a percentage of segment revenue.
(2) As calculations are made using whole
dollar numbers, actual results may vary compared to calculations
presented in this table.
(3) Includes amounts not allocated to the
business segments (including corporate costs) and other
non-operating expenses (income).
Second Quarter 2023 Business Segments Key Highlights
- Gaming revenue increased 21% to $471 million compared to
the prior year period, driven by continued momentum in Gaming
machine sales, growing 41%. Gaming operations maintained elevated
average daily revenue per unit, while Gaming systems continued
strong momentum, growing 20%, and Table products revenue returned
to growth increasing 34% compared to the prior year period. Gaming
AEBITDA was $233 million, up 30% compared to the prior year period
with AEBITDA margin improving 3 percentage points.
- Gaming operation revenues continue to benefit
from year-over-year growth in our North American and International
average daily revenue per unit, as a result of strong content
performance and the continued success of our KASCADA® and MURAL®
cabinets as well as recently launched COSMIC™ cabinet, validating
our continued investment in our R&D engine to drive our
long-term growth. Our North American premium installed base, which
represents 47% of our total installed base mix, and revenue per day
remained at elevated levels.
- SciPlay revenue increased 19% to $190 million compared
to the prior year period, breaking another record. SciPlay AEBITDA
was $59 million, up 44% compared to the prior year period with
AEBITDA margin improving 5 percentage points. Growth was primarily
driven by the core social casino business, which delivered strong
payer metrics and once again outpaced the market and gained share.
Payer conversion rates increased year-over-year to 10.5%, while
ARPDAU(1) grew 26% to a record $0.93 and AMRPPU(2) grew 12%,
reaching a record $102.04. The second quarter performance continues
to demonstrate strong player engagement and monetization leveraging
engaging game content, dynamic Live Ops and effective marketing
strategies.
- iGaming revenue increased 17% to $70 million record
quarterly revenue, and AEBITDA was $24 million compared to $21
million in the prior year period. The revenue and AEBITDA increases
were primarily driven by continued growth in the U.S. market and
also benefited from $2 million in certain termination fees. The
U.S. market delivered 32% year-over-year revenue growth, driven in
part by our continued strength in our land-based original content
launches and scaling third party aggregation on our platform. We
are on track to launch our live casino operations in Michigan
during the second half of 2023, pending final regulatory
approvals.
- Consolidated capital expenditures were $59 million in
the second quarter of 2023.
(1) Average Revenue Per Daily Active
User.
(2) Average Monthly Revenue Per Paying
User.
Earnings Conference Call
As previously announced, Light & Wonder executive leadership
will host a conference call on Tuesday, August 8, 2023, at 4:30
p.m. EDT to review the Company’s second quarter results. To access
the call live via a listen-only webcast and presentation, please
visit explore.lnw.com/investors/ and click on the webcast link
under the Events and Presentations section. To access the call by
telephone, please dial: +1 (833) 470-1428 for U.S. or +1 (404)
975-4839 for International and ask to join the Light & Wonder
call using conference ID: 667374. A replay of the webcast will be
archived in the Investors section on www.lnw.com.
About Light & Wonder
Light & Wonder, Inc. is a global leader in cross-platform
games and entertainment. The Company brings together approximately
6,000 employees from six continents to connect content between
land-based and digital channels with unmatched technology and
distribution. Guided by a culture that values daring teamwork and
creativity, the Company builds new worlds of play, developing game
experiences loved by players around the globe. Its OPENGAMING®
platform powers the largest digital-gaming network in the industry.
The Company is committed to the highest standards of integrity,
from promoting player responsibility to implementing sustainable
practices. To learn more, visit www.lnw.com.
You can access our filings with the Securities Exchange
Commission (“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 explore.lnw.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. ©
2023 Light & Wonder, Inc. and/or their respective affiliates.
All Rights Reserved.
Forward-Looking Statements
In this press release, Light & Wonder 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:
- our inability to successfully execute our strategy and
rebranding initiative;
- slow growth of new gaming jurisdictions, slow addition of
casinos in existing jurisdictions and declines in the replacement
cycle of gaming machines;
- 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;
- difficulty predicting what impact, if any, new tariffs imposed
by and other trade actions taken by the U.S. and foreign
jurisdictions could have on our business;
- U.S. and international economic and industry conditions,
including increases in benchmark interest rates and the effects of
inflation;
- public perception of our response to environmental, social and
governance issues;
- changes in, or the elimination of, our share repurchase
program;
- resulting pricing variations and other impacts of our common
stock being listed to trade on more than one stock exchange;
- 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 further reduce or refinance our indebtedness;
- restrictions and covenants in debt agreements, including those
that could result in acceleration of the maturity of our
indebtedness;
- competition;
- inability to win, retain or renew, or unfavorable revisions of,
existing contracts, and the inability to enter into new
contracts;
- risks and uncertainties of potential changes in U.K. gaming
legislation, including any new or revised licensing and taxation
regimes, responsible gambling requirements and/or sanctions on
unlicensed providers;
- 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;
- the possibility that the conditions to the completion of the
SciPlay Acquisition may not be satisfied on the anticipated
schedule or at all;
- the possibility that the SciPlay Acquisition may not be
consummated or that Light & Wonder and SciPlay may be unable to
achieve expected operational, strategic and financial benefits of
the SciPlay Acquisition;
- the possibility of any event, change or other circumstances
that could give rise to the termination of the Merger
Agreement;
- the outcome of any legal proceedings that may be instituted
following announcement of the SciPlay Acquisition;
- failure to retain key management and employees of SciPlay;
- unpredictability and severity of catastrophic events, including
but not limited to acts of terrorism, war or hostilities or the
COVID-19 pandemic, as well as management’s response to any of the
aforementioned factors;
- changes in demand for our products and services;
- inability to achieve some or all of the anticipated benefits of
SciPlay being a standalone public company;
- dependence on suppliers and manufacturers;
- SciPlay’s dependence on certain key providers;
- ownership changes and consolidation in the gaming
industry;
- fluctuations in our results due to seasonality and other
factors;
- security and integrity of our products and systems, including
the impact of any security breaches or cyber-attacks;
- protection of our intellectual property, inability to license
third-party intellectual property and the intellectual property
rights of others;
- reliance on or failures in information technology and other
systems;
- 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;
- reliance on technological blocking systems;
- challenges or disruptions relating to the completion of the
domestic migration to our enterprise resource planning system;
- 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;
- legislative interpretation and enforcement, regulatory
perception and regulatory risks with respect to gaming, especially
internet wagering, social gaming and sports wagering;
- changes in tax laws or tax rulings, or the examination of our
tax positions;
- opposition to legalized gaming or the expansion thereof and
potential restrictions on internet wagering;
- significant opposition in some jurisdictions to interactive
social gaming, including social casino gaming and how such
opposition could lead these jurisdictions to adopt legislation or
impose a regulatory framework to govern interactive social gaming
or social casino gaming specifically, and how this could result in
a prohibition on interactive social gaming or social casino gaming
altogether, restrict our ability to advertise our games, or
substantially increase our costs to comply with these
regulations;
- expectations of shift to regulated digital gaming or sports
wagering;
- 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 digital gaming;
- 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;
- incurrence of restructuring costs;
- goodwill impairment charges including changes in estimates or
judgments related to our impairment analysis of goodwill or other
intangible assets;
- stock price volatility;
- failure to maintain adequate internal control over financial
reporting;
- dependence on key executives;
- natural events that disrupt our operations, or those of our
customers, suppliers or regulators; and
- expectations of growth in total consumer spending on social
casino gaming.
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
for the year ended December 31, 2022 on March 1, 2023 (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.
You should also note that this press release may contain
references to industry market data and certain industry forecasts.
Industry market data and industry forecasts are obtained from
publicly available information and industry publications. Industry
publications generally state that the information contained therein
has been obtained from sources believed to be reliable, but that
the accuracy and completeness of that information is not
guaranteed. Although we believe industry information to be
accurate, it is not independently verified by us and we do not make
any representation as to the accuracy of that information. In
general, we believe there is less publicly available information
concerning the international gaming, social and digital gaming
industries than the same industries in the U.S.
Due to rounding, certain numbers presented herein may not
precisely recalculate.
No Offer or Solicitation
This earnings release does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a
solicitation of any vote or approval in any jurisdiction pursuant
to or in connection with the SciPlay Acquisition or otherwise, nor
shall there be any sale of securities in any jurisdiction in which
any such offer, solicitation or sale would be unlawful. Any
securities to be offered may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements.
Additional Information and Where to Find It
Certain participants in the transactions contemplated by the
Merger Agreement will prepare and file a Schedule 13E-3, which will
contain important information on Light & Wonder, SciPlay, the
Merger Agreement, the SciPlay Acquisition and related matters,
including the terms and conditions of the SciPlay Acquisition and
the Transactions. You may obtain copies of the Schedule 13E-3, any
amendment or supplements thereto, other relevant materials (when
available) and all documents filed by Light & Wonder with the
SEC regarding this transaction, free of charge, at the SEC’s
website, www.sec.gov or from Light & Wonder’s website at
https://explore.lnw.com/investors/.
LIGHT & WONDER, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, in millions,
except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue:
Services
$
496
$
445
$
973
$
876
Product sales
235
165
427
307
Total revenue
731
610
1,400
1,183
Operating expenses:
Cost of services(1)
110
92
218
182
Cost of product sales(1)
108
88
201
159
Selling, general and administrative
203
179
396
354
Research and development
58
56
112
109
Depreciation, amortization and
impairments
108
107
208
215
Restructuring and other
31
42
50
78
Total operating expenses
618
564
1,185
1,097
Operating income
113
46
215
86
Other (expense) income:
Interest expense
(78
)
(70
)
(153
)
(186
)
Loss on debt financing transactions
—
(147
)
—
(147
)
Gain on remeasurement of debt and
other
—
20
—
27
Other (expense) income, net
(15
)
2
(16
)
7
Total other expense, net
(93
)
(195
)
(169
)
(299
)
Net income (loss) from continuing
operations before income taxes
20
(149
)
46
(213
)
Income tax expense
(15
)
(1
)
(14
)
(4
)
Net income (loss) from continuing
operations
5
(150
)
32
(217
)
Net income from discontinued operations,
net of tax(2)
—
3,445
—
3,540
Net income
5
3,295
32
3,323
Less: Net income attributable to
noncontrolling interest
6
4
11
6
Net (loss) income attributable to
L&W
$
(1
)
$
3,291
$
21
$
3,317
Per Share - Basic:
Net (loss) income from continuing
operations
$
(0.01
)
$
(1.62
)
$
0.23
$
(2.33
)
Net income from discontinued
operations
—
36.23
—
36.94
Net (loss) income attributable to
L&W
$
(0.01
)
$
34.61
$
0.23
$
34.61
Per Share - Diluted:
Net (loss) income from continuing
operations
$
(0.01
)
$
(1.62
)
$
0.22
$
(2.33
)
Net income from discontinued
operations
—
36.23
—
36.94
Net (loss) income attributable to
L&W
$
(0.01
)
$
34.61
$
0.22
$
34.61
Weighted average number of shares used in
per share calculations:
Basic shares
91
95
91
96
Diluted shares
91
95
93
96
(1) Excludes depreciation, amortization
and impairments.
(2) The three- and six-month periods ended
June 30, 2022 include a pre-tax gain of $4,568 million on the sale
of the former Lottery business.
LIGHT & WONDER, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in millions except
for common shares outstanding)
June 30,
December 31,
2023
2022
Assets:
Cash and cash equivalents
$
909
$
914
Restricted cash
48
47
Receivables, net of allowance for credit
losses of $40 and $38, respectively
499
455
Inventories
183
161
Prepaid expenses, deposits and other
current assets
96
117
Total current assets
1,735
1,694
Restricted cash
7
6
Receivables, net of allowance for credit
losses of $2
12
14
Property and equipment, net
214
204
Operating lease right-of-use assets
43
49
Goodwill
2,930
2,919
Intangible assets, net
682
797
Software, net
153
145
Deferred income taxes
112
114
Other assets
74
67
Total assets
$
5,962
$
6,009
Liabilities and Stockholders’
Equity:
Current portion of long-term debt
$
23
$
24
Accounts payable
171
154
Accrued liabilities
371
380
Income taxes payable
12
64
Total current liabilities
577
622
Deferred income taxes
51
87
Operating lease liabilities
31
37
Other long-term liabilities
210
232
Long-term debt, excluding current
portion
3,863
3,870
Total stockholders’ equity(1)
1,230
1,161
Total liabilities and stockholders’
equity
$
5,962
$
6,009
(1) Includes $182 million and $171 million
in noncontrolling interest as of June 30, 2023 and December 31,
2022, respectively.
LIGHT & WONDER, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
millions)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Cash flows from operating activities:
Net income
$
5
$
3,295
$
32
$
3,323
Less: Income from discontinued operations,
net of tax
—
(3,445
)
—
(3,540
)
Adjustments to reconcile net income (loss)
from continuing operations to net cash provided by operating
activities from continuing operations
182
248
320
369
Changes in working capital accounts,
excluding the effects of acquisitions
(129
)
(73
)
(97
)
(145
)
Changes in deferred income taxes and
other
(24
)
2
(36
)
6
Net cash provided by operating activities
from continuing operations
34
27
219
13
Net cash (used in) provided by operating
activities from discontinued operations
—
(64
)
—
44
Net cash provided by (used in) operating
activities
34
(37
)
219
57
Cash flows from investing activities:
Capital expenditures
(59
)
(57
)
(112
)
(100
)
Acquisitions of businesses, net of cash
acquired
(2
)
(8
)
(2
)
(116
)
Proceeds from settlement of cross-currency
interest rate swaps
—
50
—
50
Other
—
(4
)
(1
)
(4
)
Net cash used in investing activities from
continuing operations
(61
)
(19
)
(115
)
(170
)
Net cash (used in) provided by investing
activities from discontinued operations(1)
—
5,654
(3
)
5,629
Net cash (used in) provided by investing
activities
(61
)
5,635
(118
)
5,459
Cash flows from financing activities:
Payments of long-term debt, net
(5
)
(5,032
)
(11
)
(4,882
)
Payments of debt issuance and deferred
financing costs
—
(36
)
—
(37
)
Payments on license obligations
(6
)
(5
)
(18
)
(24
)
Purchase of L&W common stock
(5
)
(152
)
(33
)
(203
)
Purchase of SciPlay’s common stock
(15
)
(7
)
(23
)
(7
)
Net redemptions of common stock under
stock-based compensation plans and other
(9
)
(8
)
(20
)
(33
)
Net cash used in financing activities from
continuing operations
(40
)
(5,240
)
(105
)
(5,186
)
Net cash used in financing activities from
discontinued operations
—
(1
)
—
(3
)
Net cash used in financing activities
(40
)
(5,241
)
(105
)
(5,189
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1
(5
)
1
(6
)
(Decrease) increase in cash, cash
equivalents and restricted cash
(66
)
352
(3
)
321
Cash, cash equivalents and restricted
cash, beginning of period
1,030
670
967
701
Cash, cash equivalents and restricted
cash, end of period
964
1,022
964
1,022
Less: Cash, cash equivalents and
restricted cash of discontinued operations
—
43
—
43
Cash, Cash equivalents and restricted cash
of continuing operations, end of period
$
964
$
979
$
964
$
979
Supplemental cash flow information:
Cash paid for interest
$
84
$
102
$
147
$
219
Income taxes paid
87
14
96
23
Distributed earnings from equity
investments
1
3
1
4
Cash paid for contingent consideration
included in operating activities
9
—
9
—
Supplemental non-cash transactions:
Non-cash interest expense
$
2
$
3
$
5
$
9
(1) The three- and six-month periods ended
June 30, 2022 include $5,659 million in gross cash proceeds from
the former Lottery business sale, net of cash, cash equivalents and
restricted cash transferred.
LIGHT & WONDER, INC. AND
SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED
AEBITDA, CONSOLIDATED AEBITDA MARGIN AND SUPPLEMENTAL BUSINESS
SEGMENT DATA
(Unaudited, in
millions)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of
Net (Loss) Income Attributable to L&W to Consolidated
AEBITDA
Net (loss) income attributable to
L&W
$
(1
)
$
3,291
$
21
$
3,317
Net income attributable to noncontrolling
interest
6
4
11
6
Net income from discontinued operations,
net of tax
—
(3,445
)
—
(3,540
)
Net income (loss) from continuing
operations
5
(150
)
32
(217
)
Restructuring and other(1)
31
42
50
78
Depreciation, amortization and
impairments(2)
108
107
208
215
Other expense (income), net
16
(2
)
18
(4
)
Interest expense
78
70
153
186
Income tax expense
15
1
14
4
Stock-based compensation
28
17
54
32
Loss on debt financing transactions
—
147
—
147
Gain on remeasurement of debt and
other
—
(20
)
—
(27
)
Consolidated AEBITDA
$
281
$
212
$
529
$
414
Supplemental
Business Segment Data
Business segments AEBITDA
Gaming
$
233
$
179
$
438
$
350
SciPlay
59
41
113
85
iGaming
24
21
47
41
Total business segments AEBITDA
316
241
598
476
Corporate and other(3)
(35
)
(29
)
(69
)
(62
)
Consolidated AEBITDA
$
281
$
212
$
529
$
414
Reconciliation to
Consolidated AEBITDA Margin
Consolidated AEBITDA
$
281
$
212
$
529
$
414
Revenue
731
610
1,400
1,183
Net income (loss) margin from continuing
operations
1
%
(25
)%
2
%
(18
)%
Consolidated AEBITDA margin (Consolidated
AEBITDA/Revenue)
38
%
35
%
38
%
35
%
(1) Refer to the Consolidated AEBITDA
definition below for a description of items included in
restructuring and other.
(2) Includes $54 million and $105 million
in amortization related to acquired intangible assets for the three
and six months ended June 30, 2023, respectively, and $52 million
and $103 million for the three and six months ended June 30, 2022,
respectively.
(3) Includes amounts not allocated to the
business segments (including corporate costs) and other
non-operating expenses (income).
LIGHT & WONDER, INC. AND
SUBSIDIARIES
SUPPLEMENTAL INFORMATION -
SEGMENT KEY PERFORMANCE INDICATORS AND SUPPLEMENTAL FINANCIAL
DATA
(Unaudited, in millions,
except unit and per unit data or as otherwise noted)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
March 31, 2023
June 30, 2023
June 30, 2022
Gaming Business
Segment Supplemental Financial Data:
Revenue by Line of
Business:
Gaming operations
$
167
$
163
$
160
$
327
$
319
Gaming machine sales
173
123
158
331
226
Gaming systems
72
60
55
127
111
Table products
59
44
46
105
89
Total revenue
$
471
$
390
$
419
$
890
$
745
Gaming
Operations:
U.S. and Canada:
Installed base at period end
30,550
30,836
30,675
30,550
30,836
Average daily revenue per unit
$
47.54
$
45.86
$
45.47
$
46.59
$
44.52
International:(1)
Installed base at period end
25,329
28,966
26,220
25,329
28,966
Average daily revenue per unit
$
15.03
$
13.63
$
14.19
$
15.13
$
13.72
Gaming Machine
Sales:
U.S. and Canada new unit shipments
5,020
4,009
4,057
9,077
7,391
International new unit shipments
4,130
2,479
3,621
7,751
4,393
Total new unit shipments
9,150
6,488
7,678
16,828
11,784
Average sales price per new unit
$
17,445
$
17,176
$
18,748
$
18,040
$
17,141
Gaming Machine Unit
Sales Components:
U.S. and Canada unit shipments:
Replacement units
4,598
3,369
3,760
8,358
6,521
Casino opening and expansion units
422
640
297
719
870
Total unit shipments
5,020
4,009
4,057
9,077
7,391
International unit shipments:
Replacement units
3,899
2,443
2,210
6,109
4,357
Casino opening and expansion units
231
36
1,411
1,642
36
Total unit shipments
4,130
2,479
3,621
7,751
4,393
SciPlay Business
Segment Supplemental Financial Data:
Revenue by
Platform:
Mobile in-app purchases
$
170
$
138
$
166
$
335
$
277
Web in-app purchases and other(2)
20
22
21
41
41
Total revenue
$
190
$
160
$
186
$
376
$
318
In-App
Purchases:
Mobile penetration(3)
91
%
90
%
91
%
91
%
90
%
Average MAU(4)
5.8
5.9
6.1
5.9
6.1
Average DAU(5)
2.2
2.3
2.3
2.3
2.3
ARPDAU(6)
$
0.93
$
0.74
$
0.89
$
0.91
$
0.74
Average MPU(7) (in thousands)
609
560
625
617
560
AMRPPU(8)
$
102.04
$
90.99
$
97.43
$
99.74
$
91.72
Payer Conversion Rate(9)
10.5
%
9.4
%
10.3
%
10.4
%
9.2
%
iGaming Business
Segment Supplemental Data:
Wagers processed through Open Gaming
System (in billions)
$
20.7
$
17.8
$
20.3
$
41.0
$
35.3
(1) Excludes the impact of game content
licensing revenue.
(2) Other primarily consists of
advertising revenue which was not material for the periods
presented.
(3) Mobile penetration is defined as the
percentage of SciPlay revenue generated from mobile platforms.
(4) MAU = Monthly Active Users is a count
of visitors to our sites during a month. An individual who plays
multiple games or from multiple devices may, in certain
circumstances, be counted more than once. However, we use
third-party data to limit the occurrence of multiple counting.
(5) DAU = Daily Active Users is a count of
visitors to our sites during a day. An individual who plays
multiple games or from multiple devices may, in certain
circumstances, be counted more than once. However, we use
third-party data to limit the occurrence of multiple counting.
(6) 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.
(7) MPU = Monthly Paying Users is the
number of individual users who made an in-game purchase during a
particular month.
(8) AMRPPU = Average Monthly Revenue Per
Paying User is calculated by dividing average monthly revenue by
average MPUs for the applicable time period.
(9) Payer conversion rate is calculated by
dividing average MPU for the period by the average MAU for the same
period.
LIGHT & WONDER, INC. AND
SUBSIDIARIES
(Unaudited, in millions,
except for ratios)
RECONCILIATION OF NET INCOME
ATTRIBUTABLE TO L&W TO CONSOLIDATED AEBITDA
Twelve Months Ended
June 30, 2023
December 31, 2022
Net income attributable to L&W
$
379
$
3,675
Net income attributable to noncontrolling
interest
28
22
Net income from discontinued operations,
net of tax
(333
)
(3,873
)
Net income (loss) from continuing
operations
74
(176
)
Restructuring and other
117
146
Depreciation, amortization and
impairments
413
420
Other expense (income), net
17
(6
)
Interest expense
294
327
Income tax expense
23
13
Stock-based compensation
91
69
Loss on debt financing transactions
—
147
Gain on remeasurement of debt and
other
—
(27
)
Consolidated AEBITDA
$
1,029
$
913
RECONCILIATION OF PRINCIPAL
FACE VALUE OF DEBT OUTSTANDING TO NET DEBT AND NET DEBT LEVERAGE
RATIO
As of
June 30, 2023
December 31, 2022
Consolidated AEBITDA
$
1,029
$
913
Total debt
$
3,886
$
3,894
Add: Unamortized debt discount/premium and
deferred financing costs, net
43
47
Less: Debt not requiring cash repayment
and other
(1
)
(2
)
Principal face value of debt
outstanding
3,928
3,939
Less: Cash and cash equivalents
909
914
Net debt
$
3,019
$
3,025
Net debt leverage ratio
2.9
3.3
LIGHT & WONDER, INC. AND
SUBSIDIARIES
(Unaudited, in
millions)
RECONCILIATION OF NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW AND
COMBINED FREE CASH FLOW
Three Months Ended June
30,
2023
2022
Consolidated
Continuing Operations
Discontinued
Operations(1)
Combined(2)
Net cash provided by (used in) operating
activities
$
34
$
27
$
(64
)
$
(37
)
Less: Capital expenditures
(59
)
(57
)
(5
)
(62
)
Add: Payments on contingent acquisition
considerations
9
—
—
—
Less: Payments on license obligations
(6
)
(5
)
—
(5
)
Add: Change in restricted cash impacting
working capital
46
6
3
9
Free cash flow
$
24
$
(29
)
$
(66
)
$
(95
)
Supplemental cash flow information -
Strategic Review and Related Costs Impacting Free Cash Flow:
Income tax payments related to the
Divestitures
$
32
ASX listing advisory fees
7
Disposition and other closing expenses
$
80
Accelerated cash interest payments and
other payments related to April 2022 refinancing
16
Professional fees and services supporting
Strategic review and related activities
18
Six Months Ended June
30,
2023
2022
Consolidated
Continuing Operations
Discontinued
Operations(1)
Combined(2)
Net cash provided by operating
activities
$
219
$
13
$
44
$
57
Less: Capital expenditures
(112
)
(100
)
(30
)
(130
)
Add: Payments on contingent acquisition
considerations
9
—
—
—
Less: Payments on license obligations
(18
)
(24
)
(2
)
(26
)
Less: Change in restricted cash impacting
working capital
—
(1
)
(6
)
(7
)
Free cash flow
$
98
$
(112
)
$
6
$
(106
)
Supplemental cash flow information -
Strategic Review and Related Costs Impacting Free Cash Flow:
Income tax payments related to the
Divestitures
$
32
ASX listing advisory fees
7
Disposition and other closing expenses
$
80
Accelerated cash interest payments and
other payments related to April 2022 refinancing
16
Professional fees and services supporting
Strategic review and related activities
64
(1) Free cash flow from discontinued
operations, a non-GAAP measure, is derived based on the historical
records and includes only those direct cash flows that are
allocated to discontinued operations. See below for further
description and disclaimers associated with this non-GAAP
measure.
(2) Combined free cash flow consists of
Free cash flow (representing Free cash flow from continuing
operations) and Free cash flow from discontinued operations. Refer
to non-GAAP financial measure definitions below for further
details.
LIGHT & WONDER, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET (LOSS)
INCOME ATTRIBUTABLE TO L&W TO ADJUSTED NPATA
(Unaudited, in
millions)
Three Months Ended June
30, 2023
Six Months Ended June
30, 2023
Reconciliation of
Net (Loss) Income Attributable to L&W to Adjusted
NPATA(1)
Net (loss) income attributable to
L&W
$
(1
)
$
21
Net income attributable to noncontrolling
interest
6
11
Net income from discontinued operations,
net of tax
—
—
Net income from continuing operations
5
32
Amortization of acquired intangibles and
impairments(2)
54
105
Restructuring and other(3)
31
50
Other expense, net
16
18
Income tax impact on adjustments
(13
)
(26
)
Adjusted NPATA(1)
$
93
$
179
(1) Represents a non-GAAP financial
measure. Additional information on non-GAAP financial measures
presented herein is available at the end of this release.
(2) Includes $5 million in impairment
charges for the three and six months ended June 30, 2023.
(3) Refer to the Consolidated AEBITDA
definition below for a description of items included in
restructuring and other.
Discontinued Operations
We sold our former Lottery business to Brookfield Business
Partners L.P. during the second quarter of 2022. We sold our former
Sports Betting business to Endeavor Operating Company, LLC, a
subsidiary of Endeavor Group Holdings, Inc., in a cash and stock
transaction completed during the third quarter of 2022.
Accordingly, the prior period financial results for these divested
businesses are presented as discontinued operations in accordance
with Accounting Standard Codification 205-20, Presentation of
Financial Statements - Discontinued Operations. We report our
continuing operations in three business segments—Gaming, SciPlay
and iGaming—representing our different products and services.
Non-GAAP Financial Measures
The Company’s management (“Management”) uses the following
non-GAAP financial measures in conjunction with GAAP financial
measures: Consolidated AEBITDA (representing continuing
operations), Consolidated AEBITDA margin, Free cash flow
(representing continuing operations), Free cash flow from
discontinued operations, Combined free cash flow, Net debt, Net
debt leverage ratio, and Adjusted NPATA (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, Management uses Consolidated AEBITDA to, among
other things: (i) monitor and evaluate the performance of the
Company’s continuing 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, Management uses Consolidated AEBITDA and
Consolidated AEBITDA margin to facilitate its 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.
Management uses Net debt and Net debt leverage ratio in
monitoring and evaluating the Company’s overall liquidity,
financial flexibility and leverage.
Following the ASX listing, Management introduced usage of
Adjusted NPATA, a non-GAAP financial measure, which is widely used
to measure the performance as well as a principal basis for
valuation of gaming and other companies listed on the ASX, and
which we now present on a supplemental basis.
As described in this earning release, the Company sold its
former Lottery business and Sports Betting business and as such,
historical financial information for these divested businesses is
classified as discontinued operations, as described above.
Management believes that Combined free cash flow is useful during
the period until the disposition occurred as it provided Management
and investors with information regarding the Company’s combined
financial condition under the structure at the time, including for
prior period comparisons, as the Company transformed its strategy
subsequent to the Divestitures.
Additionally, Combined free cash flow provided greater
visibility into cash available for the Company to use in investing
and financing decisions as that cash flow was available for such
decisions.
Management believes that 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, 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 are less
indicative of the ongoing underlying performance of continuing
operations (as more fully described below) and are better evaluated
separately. Management believes that Free cash flow and Combined
free cash flow provide useful information regarding the Company’s
liquidity and its ability to service debt and fund investments.
Management also believes that Free cash flow and Combined free
cash flow are useful for investors because they provide investors
with important perspectives on the cash available for debt
repayment and other strategic measures, after making necessary
capital investments in property and equipment, necessary license
payments to support the ongoing business operations and adjustments
for changes in restricted cash impacting working capital.
Additionally, Management believes that Free cash flow from
discontinued operations provides useful information regarding the
Company’s operations as well as the impact of the discontinued
businesses on the overall financial results for the prior periods
presented as they remained under the structure of the Company for
those periods. This non-GAAP measure is derived based on the
historical records and includes only those direct costs that are
allocated to discontinued operations and as such does not include
all of the expenses that would have been incurred by these
businesses as a standalone company or other Corporate and shared
allocations and such differences might be material.
Management believes Adjusted NPATA is useful for investors
because it provides investors with additional perspective on
performance, as the measure eliminates the effects of amortization
of acquired intangible assets, restructuring, transaction,
integration, certain other items, and the income tax impact on such
adjustments, which Management believes are less indicative of the
ongoing underlying performance of continuing operations and are
better evaluated separately. Adjusted NPATA is widely used to
measure performance of gaming and other companies listed on the
ASX.
Consolidated AEBITDA (representing AEBITDA from continuing
operations)
Consolidated AEBITDA, as used herein, is a non-GAAP financial
measure that is presented as a supplemental disclosure of the
Company’s continuing operations and is reconciled to net income
(loss) from continuing operations as the most directly comparable
GAAP measure, as set forth in the schedule titled “Reconciliation
of Net (Loss) Income Attributable to L&W to Consolidated
AEBITDA.” 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 Net (loss) income
attributable to L&W and includes the following adjustments: (1)
Net income attributable to noncontrolling interest; (2) Net income
from discontinued operations, net of tax; (3) Restructuring and
other, which includes charges or expenses attributable to: (i)
employee severance; (ii) Management restructuring and related
costs; (iii) restructuring and integration (including costs
associated with strategic review, rebranding, divestitures and
ongoing separation activities and related activities); (iv) cost
savings initiatives; (v) major litigation; and (vi) acquisition-
and disposition-related costs and other unusual items; (4)
Depreciation, amortization and impairment charges and Goodwill
impairments; (5) Loss on debt financing transactions; (6) Change in
fair value of investments and Gain on remeasurement of debt and
other; (7) Interest expense; (8) Income tax expense; (9)
Stock-based compensation; and (10) Other expense (income), net,
including foreign currency gains or losses and earnings from equity
investments. 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) calculated as a percentage
of consolidated revenue. Consolidated AEBITDA margin is a non-GAAP
financial measure that is presented as a supplemental disclosure
for illustrative purposes only and is reconciled to net income
(loss) from continuing operations, the most directly comparable
GAAP measure, in a schedule above.
Free Cash Flow (representing free cash flow from continuing
operations)
Free cash flow, as used herein, represents net cash provided by
operating activities from continuing operations less total capital
expenditures, less payments on license obligations, plus payments
on contingent acquisition considerations and adjusted for changes
in restricted cash impacting working capital. Free cash flow is a
non-GAAP financial measure that is presented as a supplemental
disclosure for illustrative purposes only and is reconciled to net
cash provided by operating activities, the most directly comparable
GAAP measure, in the schedule above.
Free Cash Flow from Discontinued Operations
Free cash flow from discontinued operations, as used herein,
represents net cash provided by operating activities from
discontinued operations less total capital expenditures, less
payments on license obligations and adjusted for changes in
restricted cash impacting working capital. Free cash flow from
discontinued operations is a non-GAAP financial measure that is
presented as a supplemental disclosure for illustrative purposes
only and is reconciled to net cash provided by operating activities
from discontinued operations, the most directly comparable GAAP
measure, in a schedule above.
Combined Free Cash Flow
Combined free cash flow, as used herein, represents a non-GAAP
financial measure that combines Free cash flow (representing our
continuing operations) and Free cash flow from discontinued
operations and is presented as a supplemental disclosure for
illustrative purposes only.
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. Principal face value of debt outstanding
includes the face value of debt issued under Senior Secured Credit
Facilities and Senior Notes, which are described in Note 15 of the
Company's Annual Report on Form 10-K for the year ended December
31, 2022 and in Note 11 of the Company’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2023, but it does not include
other long term obligations of $1 million primarily comprised of
certain revenue transactions presented as debt in accordance with
ASC 470. Net debt leverage ratio, as used herein, represents Net
debt divided by Consolidated AEBITDA. The forward-looking non-GAAP
financial measure targeted net debt leverage ratio is presented on
a supplemental basis and does not reflect Company guidance. We are
not providing a forward-looking quantitative reconciliation of
targeted net debt leverage ratio to the most directly comparable
GAAP measure because we are unable to predict with reasonable
certainty the ultimate outcome of certain significant items without
unreasonable effort. These items are uncertain, depend on various
factors, and could have a material impact on GAAP reported results
for the relevant period.
Adjusted NPATA
Adjusted NPATA, as used herein, is a non-GAAP financial measure
that is presented as a supplemental disclosure of the Company’s
continuing operations and is reconciled to net income (loss) from
continuing operations as the most directly comparable GAAP measure,
as set forth in the schedule titled “Reconciliation of Net Income
Attributable to L&W to Adjusted NPATA.” Adjusted NPATA 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. Adjusted NPATA may differ
from similarly titled measures presented by other companies.
Adjusted NPATA is reconciled to Net income from continuing
operations and includes the following adjustments: (1) Amortization
of acquired intangible assets; (2) non-cash asset and goodwill
impairments; (3) Restructuring and other, which includes charges or
expenses attributable to: (i) employee severance; (ii) Management
restructuring and related costs; (iii) restructuring and
integration (including costs associated with strategic review,
rebranding, divestitures and ongoing separation activities and
related activities); (iv) cost savings initiatives; (v) major
litigation; and (vi) acquisition- and disposition-related costs and
other unusual items; (4) Loss on debt financing transactions; (5)
Change in fair value of investments and Gain on remeasurement of
debt and other; (6) Income tax impact on adjustments; and (7) Other
expense, net, including foreign currency gains or losses and
earnings from equity investments.
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version on businesswire.com: https://www.businesswire.com/news/home/20230808050980/en/
Media Relations Andy Fouché +1 206-697-3678 Vice
President, Corporate Communications media@lnw.com Investor
Relations Nick Zangari +1 702-301-4378 Senior Vice President,
Investor Relations ir@lnw.com
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