SEGMENT AND GEOGRAPHICAL INFORMATION

3 Months Ended

Sep. 30, 2014

SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

11.          SEGMENT AND GEOGRAPHICAL INFORMATION

The Company operates in legalized casino gaming markets across the globe and provides state-of-the-art, value-add products in four distinct segments: (a) EGMs, which include the sale of gaming devices and related equipment, parts and conversion kits, (b) Gaming Operations, which include the operation of wide-area progressives, video lottery and centrally determined systems and the rental of gaming devices and content, (c) casino-management systems, which include the sale and support of computerized monitoring systems and related recurring hardware and software maintenance revenue, and (d) table game products, which include monthly royalties from proprietary table games as well as sale and lease of table utility products, including automatic card shufflers, deck checkers and roulette chip sorters. Our Chief Executive Officer is our Chief Operating Decision Maker (“CODM”).

The following is a summary of revenues and gross margin for each segment:

	Three Months Ended September 30,
	2014(1)		2013
	(in 000s)
Revenues:
EGMs	$	94,186	$	71,291
Gaming Operations	106,453		101,902
Systems	74,336		76,096
Table Products	45,830		—
Total revenues	$	320,805	$	249,289
Gross Margin(2):
EGMs	$	48,828	$	36,021
Gaming Operations	72,007		71,283
Systems	53,274		56,860
Table Products	37,721		—
Total gross margin	$	211,830	$	164,164

(1) Results for the three months ended September 30, 2014 include the Acquisition beginning on November 25, 2013 and the acquisition of Dragonplay beginning on July 1, 2014.

(2) Gross Margin excludes amortization related to intangible assets, which are included in depreciation and amortization.

Our CODM does not receive a report with a measure of total assets for each reportable segment as this information is not available or necessary for the CODM’s evaluation of segment performance. Therefore, the Company has not provided asset and capital expenditure information by reportable segment.

EGMs and Systems revenues and costs are included in Gaming equipment and systems revenues. Gaming Operations revenues and costs are included in Product lease, operation and royalty revenues.

Table Products revenues include $17.7 million and $28.1 million included in Gaming equipment and systems revenues and Product lease, operation and royalty revenues, respectively, for the three months ended September 30, 2014. Table Products gross margin includes $12.9 million and $24.8 million included in Gaming equipment and systems gross margin and Product lease, operation and royalty gross margin, respectively, for the three months ended September 30, 2014.

The Company has operations based primarily in the United States as well as significant sales and distribution offices based in Australia, Macau and Europe. The table below presents information as to the Company’s revenues and operating income by geographic region which is determined by country of destination:

	Three Months Ended September 30,
	2014(1)		2013
	(in 000s)
Revenues:
United States and Canada	$	234,989	$	219,012
International	85,816		30,277
Total revenues	$	320,805	$	249,289
Operating income:
United States and Canada	$	48,135	$	55,607
International	14,307		1,361
Total operating income	$	62,442	$	56,968

(1)           Results for the three months ended September 30, 2014 include the Acquisition beginning on November 25, 2013 and the acquisition of Dragonplay beginning on July 1, 2014.