10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to        

Commission file number: 0-13063

SCIENTIFIC GAMES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	81-0422894
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

6650 S. El Camino Road, Las Vegas, Nevada 89118

(Address of principal executive offices)

(Zip Code)

(702) 897-7150

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

The registrant has the following number of shares outstanding of each of the registrant's classes of common stock as of August 2, 2016:

Class A Common Stock: 87,523,669

Class B Common Stock: None

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL INFORMATION

AND OTHER INFORMATION

THREE AND SIX MONTHS ENDED JUNE 30, 2016

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	7
	Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2016 and 2015	7
	Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	8
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	9
	Condensed Notes to Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 4.	Controls and Procedures	58
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	59
Item 6.	Exhibits	60

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Glossary of Terms
The following terms or acronyms used in this Quarterly Report on Form 10-Q are defined below:
Term or Acronym	Definition
2018 Notes	8.125% senior subordinated notes due 2018 issued by Scientific Games Corporation
2020 Notes	6.250% senior subordinated notes due 2020 issued by SGI
2021 Notes	6.625% senior subordinated notes due 2021 issued by SGI
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
Bally	Bally Technologies, Inc.
Bally acquisition	the acquisition of Bally by the Company on November 21, 2014
Barcrest	Barcrest Group Limited
Coin-in	the amount wagered
Company	refers to Scientific Games Corporation and its consolidated subsidiaries, unless otherwise specified or the context otherwise dictates
CSG	Beijing CITIC Scientific Games Technology Co., Ltd.
CSL	China Sports Lottery
CSP	Cooperative Services Program
D&A	depreciation and amortization
ESPP	employee stock purchase plan
EU	European Union
FASB	Financial Accounting Standards Board
GLB	Beijing Guard Libang Technology Co., Ltd.
Hellenic Lotteries	Hellenic Lotteries S.A.
ITL	International Terminal Leasing
LBO	licensed betting office
LNS	Lotterie Nazionali S.r.l.
Net win	Coin-in less payouts
Northstar Illinois	Northstar Lottery Group, LLC
Northstar New Jersey	Northstar New Jersey Lottery Group, LLC
Note	refers to a note in the Condensed Notes to our Consolidated Financial Statements in this Quarterly Report on Form 10-Q, unless otherwise indicated
Participation	with respect to our Gaming business, refers to gaming machines provided to customers through service or leasing arrangements in which we earn revenues and are paid based on: (1) a percentage of Net win; (2) fixed daily-fees; (3) a percentage of the Coin-in; or (4) a combination of a fixed daily-fee and a percentage of the Coin-in, and with respect to our Lottery business, refers to a contract or arrangement in which we earn revenues and are paid based on a percentage of retail sales
PMA	private management agreement
PTG	Proprietary table games
R&D	research and development
RCN	Roberts Communications Network, LLC
RFP	Request for proposal
RMG	real-money gaming
RSU	restricted stock unit
SEC	Securities and Exchange Commission
Secured Notes	7.00% senior secured notes due 2022 issued by SGI
Securities Act	Securities Act of 1933, as amended
SG&A	selling, general and administrative
SGI	Scientific Games International, Inc., a wholly-owned subsidiary of Scientific Games Corporation
SHFL	SHFL entertainment, Inc.
Shufflers	various models of automatic card shufflers, deck checkers and roulette chip sorters

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Unsecured Notes	10.00% senior unsecured notes due 2022 issued by SGI
U.K.	United Kingdom of Great Britain and Northern Ireland
U.S.	United States of America
U.S. GAAP	accounting principles generally accepted in the U.S.
VLT	video lottery terminal
WAP	wide-area progressive
WMS	WMS Industries, Inc.
WMS acquisition	the acquisition of WMS by the Company on October 18, 2013

Intellectual Property Rights

® and ™ indicate U.S. trademarks. Marks are owned by their respective owners.

4

Forward-Looking Statements

Throughout this Quarterly Report on Form 10-Q, we make "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. The forward-looking statements contained in this Quarterly Report on Form 10-Q are generally located in the material set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" but may be found in other locations as well. These statements are based upon management's current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. 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, including declines in or slow growth of gross gaming revenues or lottery retail sales, reductions in or constraints on capital spending by gaming or lottery operators and bankruptcies of, or credit risk relating to, customers;

• limited growth from new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of existing gaming machines;

• ownership changes and consolidation in the casino industry, including by casino operators;

• opposition to legalized gaming or the expansion thereof;

• inability to adapt to, and offer products that keep pace with, evolving technology;

• inability to develop successful gaming concepts and content;

• laws and government regulations, including those relating to gaming licenses and environmental laws;

• inability to identify and capitalize on trends and changes in the gaming, lottery and interactive gaming industries;

• dependence upon key providers in our social gaming business;

• inability to retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;

• 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;

• protection of intellectual property, inability to license third party intellectual property and the intellectual property rights of others;

• security and integrity of our products and systems and reliance on or failures in information technology and other systems;

• 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, including (1) the inability of our joint venture to realize the anticipated benefits under its PMA with the Illinois lottery or from the disentanglement services performed in connection with the termination thereof, (2) the inability of our joint venture to meet the net income targets or other requirements under its agreement to provide marketing and sales services to the New Jersey Lottery or otherwise to realize the anticipated benefits under such agreement and (3) the failure to realize the anticipated benefits related to our consortium's instant lottery game concession in Greece;

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• failure to achieve the intended benefits of the Bally acquisition, the WMS acquisition, our other recent acquisitions, or future acquisitions, including due to the inability to successfully complete or integrate such acquisitions or realize synergies in the anticipated amounts or within the contemplated time frames or cost expectations, or at all;

• disruption of current plans and operations in connection with our recent acquisitions (including in connection with the integration of Bally and WMS), including departure of key personnel or inability to recruit additional qualified personnel or maintain relationships with customers, suppliers or other third parties;

• incurrence of employee termination or restructuring costs and impairment or asset write-down charges;

• changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;

• implementation of complex revenue recognition standards;

• fluctuations in our results due to seasonality and other factors;

• dependence on suppliers and manufacturers;

• risks relating to foreign operations, including fluctuations in foreign currency exchange rates (including those fluctuations related to the affirmative vote in the U.K. to withdraw from the EU), 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 affirmative vote in the U.K. to withdraw from the EU and the potential impact to our instant lottery game concession or VLT lease arrangements resulting from the recent economic and political conditions in Greece;

• 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 and our strategic relationships;

• influence of certain 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 under Item 1A "Risk Factors" in our 2015 Annual Report on Form 10-K filed with the SEC on February 29, 2016 and under Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q. 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 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 Quarterly Report on Form 10-Q 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, lottery and interactive gaming industries than the same industries in the U.S.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, in millions, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenue:
Services	$	363.5		$	337.9		$	713.8		$	668.3
Product sales	214.8			218.1			412.4			417.5
Instant games	150.9			135.5			285.0			264.4
Total revenue	729.2			691.5			1,411.2			1,350.2
Operating expenses:
Cost of services (1)	101.4			98.6			196.3			189.1
Cost of product sales (1)	100.7			107.9			195.1			205.8
Cost of instant games (1)	74.1			68.8			141.1			135.8
Selling, general and administrative	144.9			140.9			287.2			286.8
Research and development	51.7			48.0			101.5			94.9
Employee termination and restructuring	4.2			5.2			6.9			13.4
Depreciation and amortization	193.1			222.2			373.7			406.4
Operating income (loss)	59.1			(0.1		)	109.4			18.0
Other (expense) income:
Interest expense	(165.3		)	(166.4		)	(331.0		)	(330.7		)
Earnings from equity investments	8.0			3.3			11.2			6.4
Gain on early extinguishment of debt	25.2			—			25.2			—
Other income (expense), net	1.7			(4.3		)	2.4			(9.9		)
Total other expense, net	(130.4		)	(167.4		)	(292.2		)	(334.2		)
Net loss before income taxes	(71.3		)	(167.5		)	(182.8		)	(316.2		)
Income tax benefit	19.6			65.3			38.8			127.6
Net loss	$	(51.7	)	$	(102.2	)	$	(144.0	)	$	(188.6	)
Other comprehensive (loss) income:
Foreign currency translation income (loss)	(35.1		)	17.8			(36.7		)	(88.4		)
Pension and post-retirement gain (loss), net of tax	0.3			(0.7		)	0.5			0.2
Derivative financial instruments unrealized gain, net of tax	4.6			6.0			3.6			1.1
Other comprehensive (loss) income	(30.2		)	23.1			(32.6		)	(87.1		)
Comprehensive loss	$	(81.9	)	$	(79.1	)	$	(176.6	)	$	(275.7	)
Basic and diluted net loss per share:
Basic	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)
Diluted	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)
Weighted average number of shares used in per share calculations:
Basic shares	87.3			85.9			86.9			85.6
Diluted shares	87.3			85.9			86.9			85.6

(1) Exclusive of D&A.

See accompanying condensed notes to consolidated financial statements.

7

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except par value)

	June 30, 2016			December 31, 2015
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	101.4		$	128.7
Restricted cash	24.5			20.2
Accounts receivable, net	501.3			487.1
Notes receivable, net	140.0			167.7
Inventories	249.0			248.5
Prepaid expenses, deposits and other current assets	120.9			123.3
Total current assets	1,137.1			1,175.5
Long-term restricted cash	17.4			17.9
Long-term notes receivable, net	43.8			51.3
Property and equipment, net	695.5			794.0
Goodwill	2,992.5			3,013.7
Intangible assets, net	1,891.9			1,920.0
Software, net	443.2			485.9
Equity investments	199.8			228.5
Other assets	43.9			45.4
Total assets	$	7,465.1		$	7,732.2
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt	$	49.7		$	50.3
Accounts payable	178.6			159.8
Accrued liabilities	417.1			443.8
Total current liabilities	645.4			653.9
Deferred income taxes	173.9			228.2
Other long-term liabilities	245.1			188.9
Long-term debt, excluding current portion	8,067.6			8,156.7
Total liabilities	9,132.0			9,227.7
Commitments and contingencies (see Note 16)
Stockholders' deficit:
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 104.7 and 103.7 shares issued and 87.5 and 86.5 shares outstanding, respectively	1.0			1.0
Additional paid-in capital	771.1			765.9
Accumulated loss	(2,009.0		)	(1,865.0		)
Treasury stock, at cost, 17.2 shares	(175.2		)	(175.2		)
Accumulated other comprehensive loss	(254.8		)	(222.2		)
Total stockholders' deficit	(1,666.9		)	(1,495.5		)
Total liabilities and stockholders' deficit	$	7,465.1		$	7,732.2

See accompanying condensed notes to consolidated financial statements.

8

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)

	Six Months Ended
	June 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(144.0	)	$	(188.6	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	373.7			406.4
Change in deferred income taxes	(57.0		)	(145.7		)
Stock-based compensation	12.5			12.1
Non-cash interest expense	20.2			19.0
Earnings from equity investments, net	(11.2		)	(6.4		)
Distributed earnings from equity investments	16.3			19.9
Gain on early extinguishment of debt	(25.2		)	—
Changes in current assets and liabilities:
Accounts and notes receivable, net	14.4			23.7
Inventories	(3.4		)	18.4
Other current assets and liabilities	15.2			10.8
Accounts payable	7.7			(9.4		)
Accrued liabilities	(26.1		)	(44.7		)
Other, net	(1.2		)	(1.1		)
Net cash provided by operating activities	191.9			114.4
Cash flows from investing activities:
Property and equipment expenditures	(8.7		)	(7.8		)
Gaming and lottery operations expenditures	(76.8		)	(103.7		)
Intangible assets and software expenditures	(47.1		)	(31.3		)
Proceeds from asset sales	3.1			—
Changes in other assets and liabilities and other	3.0			8.5
Restricted cash	(3.8		)	1.0
Distributions of capital on equity investments	22.5			35.2
Net cash used in investing activities	(107.8		)	(98.1		)
Cash flows from financing activities:
Borrowings under revolving credit facility	160.0			110.0
Repayments under revolving credit facility	(175.0		)	(120.0		)
Payments on long-term debt	(25.2		)	(26.2		)
Repurchase of notes	(39.9		)	—
Payments on license obligations	(25.0		)	(18.7		)
Contingent earnout payments	—			(0.5		)
(Redemptions) issuance of common stock under stock-based compensation plans	(4.4		)	0.9
Net cash used in financing activities	(109.5		)	(54.5		)
Effect of exchange rate changes on cash and cash equivalents	(1.9		)	(4.5		)
Decrease in cash and cash equivalents	(27.3		)	(42.7		)
Cash and cash equivalents, beginning of period	128.7			171.8
Cash and cash equivalents, end of period	$	101.4		$	129.1

 See accompanying condensed notes to consolidated financial statements.

9

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, table amounts in millions, except per share amounts)

(1) Description of the Business and Summary of Significant Accounting Policies

Description of the Business

We are a leading developer of technology‑based products and services and associated content for the worldwide gaming, lottery and interactive gaming industries. Our portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw‑based lottery games, server‑based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. We also gain access to technologies and pursue global expansion through strategic acquisitions and equity investments. We report our operations in three business segments—Gaming, Lottery and Interactive.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with SEC and U.S. GAAP requirements. All monetary values set forth in these financial statements are in United States dollars ("USD" or "$") unless otherwise stated herein. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations and comprehensive loss and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K. Interim results of operations are not necessarily indicative of results of operations for a full year.

Significant Accounting Policies

There have been no changes to our significant accounting policies described in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2015 Annual Report on Form 10-K.

New Accounting Guidance - Recently Adopted

In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory. ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted this guidance prospectively at the beginning of the second quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations, or cash flows.

In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The amended guidance simplifies the accounting for equity investments and eliminates the requirements in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this guidance prospectively at the beginning of the first quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations or cash flows. 

New Accounting Guidance - Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers. The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue from contracts with customers. The guidance (including subsequent amendments) supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. This guidance is effective for fiscal years beginning after December 15, 2017, and

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interim periods within those fiscal years with earlier adoption permitted for fiscal years beginning after December 15, 2016. We are currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact and timing of adopting this guidance.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amended guidance is intended to simplify several aspects of accounting for share-based payment award transactions, including income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 has separate transition guidance for each element of the new standard and is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance.

We do not expect that any other recently issued accounting guidance will have a significant effect on our financial statements.

(2) Business Segments

We report our operations in three business segments—Gaming, Lottery and Interactive—representing our different products and services. These are our reportable segments under ASC 280, Segment Reporting. Each of our business segments is managed by a separate executive who reports to our chief executive officer (who is our "chief operating decision maker" as defined under applicable accounting standards). Our three business segments represent separate standalone businesses based on the industries in which we operate. Our Gaming business segment generally sells gaming machines, VLTs and conversion kits and parts, leases or otherwise provides gaming machines, server-based systems and content, sells and supports casino-management systems-based software and hardware, and sells and leases PTG content and Shufflers, including automatic card shufflers, deck checkers and roulette chip sorters, to commercial, tribal and governmental gaming operators. Our Lottery business segment provides instant lottery games and related value-added services, as well as licensed brands utilized in instant lottery games and loyalty and reward services. Our Lottery business segment also provides systems products and services generally comprised of point-of-sale terminals, a central system, customized computer software, data communication services, support and/or related equipment. Our Interactive business segment provides social gaming and RMG services to online casino operators through our remote game servers. Additional discussion regarding the products and services from which each reportable business segment derives its revenue is included in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2015 Annual Report on Form 10-K.

The following tables present revenue, cost of revenue, SG&A, R&D, employee termination and restructuring, D&A, operating income and earnings from equity investments for the three and six months ended June 30,2016 and 2015, respectively, by business segment. Certain unallocated corporate amounts consisted primarily of general and administrative expenses, other income (expense) and D&A.

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	Three Months Ended June 30, 2016
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	236.0	$	44.1	$	83.4	$	363.5
Product sales	205.9		8.9		—		214.8
Instant games	—		150.9		—		150.9
Total revenue	441.9		203.9		83.4		729.2
Operating expenses:
Cost of services (1)	44.4		26.8		30.2		101.4
Cost of product sales (1)	93.4		7.3		—		100.7
Cost of instant games (1)	—		74.1		—		74.1
Selling, general and administrative	61.2		17.8		26.8		105.8
Research and development	38.5		2.6		8.4		49.5
Employee termination and restructuring	3.4		0.2		0.5		4.1
Depreciation and amortization	154.3		17.2		3.8		175.3
Segment operating income	$	46.7	$	57.9	$	13.7	$	118.3
Unallocated corporate costs							(59.2		)
Consolidated operating income							$	59.1
Earnings from equity investments	$	1.4	$	6.6	$	—	$	8.0

(1) Exclusive of D&A.

	Three Months Ended June 30, 2015
	Gaming			Lottery		Interactive		Total
Revenue:
Services	$	240.4		$	45.9	$	51.6	$	337.9
Product sales	209.3			8.8		—		218.1
Instant games	—			135.5		—		135.5
Total revenue	449.7			190.2		51.6		691.5
Operating expenses:
Cost of services (1)	53.1			27.5		18.0		98.6
Cost of product sales (1)	100.9			7.0		—		107.9
Cost of instant games (1)	—			68.8		—		68.8
Selling, general and administrative	71.2			16.4		15.2		102.8
Research and development	41.1			1.5		5.4		48.0
Employee termination and restructuring	2.7			—		0.3		3.0
Depreciation and amortization	181.5			20.0		5.4		206.9
Segment operating (loss) income	$	(0.8	)	$	49.0	$	7.3	$	55.5
Unallocated corporate costs								(55.6		)
Consolidated operating loss								$	(0.1	)
Earnings from equity investments	$	1.8		$	1.5	$	—	$	3.3

(1) Exclusive of D&A.

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	Six Months Ended June 30, 2016
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	468.6	$	89.2	$	156.0	$	713.8
Product sales	395.0		17.4		—		412.4
Instant games	—		285.0		—		285.0
Total revenue	863.6		391.6		156.0		1,411.2
Operating expenses:
Cost of services (1)	85.6		54.9		55.8		196.3
Cost of product sales (1)	181.2		13.9		—		195.1
Cost of instant games (1)	—		141.1		—		141.1
Selling, general and administrative	129.1		34.3		51.3		214.7
Research and development	76.7		5.2		15.7		97.6
Employee termination and restructuring	5.0		1.3		0.5		6.8
Depreciation and amortization	295.9		35.0		7.5		338.4
Segment operating income	$	90.1	$	105.9	$	25.2	$	221.2
Unallocated corporate costs							(111.8		)
Consolidated operating income							$	109.4
Earnings from equity investments	$	1.4	$	9.8	$	—	$	11.2

(1) Exclusive of D&A.

	Six Months Ended June 30, 2015
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	478.3	$	91.5	$	98.5	$	668.3
Product sales	397.2		20.3		—		417.5
Instant games	—		264.4		—		264.4
Total revenue	875.5		376.2		98.5		1,350.2
Operating expenses:
Cost of services (1)	98.6		55.9		34.6		189.1
Cost of product sales (1)	188.7		17.1		—		205.8
Cost of instant games (1)	—		135.8		—		135.8
Selling, general and administrative	145.4		33.5		30.3		209.2
Research and development	80.9		3.1		10.9		94.9
Employee termination and restructuring	6.9		0.2		1.0		8.1
Depreciation and amortization	324.8		41.3		10.5		376.6
Segment operating income	$	30.2	$	89.3	$	11.2	$	130.7
Unallocated corporate costs							(112.7		)
Consolidated operating income							$	18.0
Earnings from equity investments	$	1.7	$	4.7	$	—	$	6.4

(1) Exclusive of D&A.

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The following table presents a reconciliation of business segment operating income to net loss before income taxes for each period:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Business segment operating income	$	118.3		$	55.5		$	221.2		$	130.7
Unallocated corporate costs	(59.2		)	(55.6		)	(111.8		)	(112.7		)
Consolidated operating income (loss)	59.1			(0.1		)	109.4			18.0
Interest expense	(165.3		)	(166.4		)	(331.0		)	(330.7		)
Earnings from equity investments	8.0			3.3			11.2			6.4
Gain on early extinguishment of debt	25.2			—			25.2			—
Other income (expense), net	1.7			(4.3		)	2.4			(9.9		)
Net loss before income taxes	$	(71.3	)	$	(167.5	)	$	(182.8	)	$	(316.2	)

In evaluating financial performance, we focus on operating income (loss) as a segment's measure of profit or loss. The accounting policies of our business segments are the same as those described in our summary of significant accounting policies in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2015 Annual Report on Form 10-K.

(3) Restructuring Plans

We began integrating Scientific Games and WMS subsequent to the WMS acquisition in October 2013. This integration was completed during the first quarter of 2016. We began integrating Scientific Games and Bally subsequent to its acquisition in November 2014 by implementing our plans to streamline our operations and cost structure.

We recorded pre-tax employee termination and restructuring costs of $4.2 million and $5.2 million for the three months ended June 30, 2016 and 2015, respectively, and$6.9 millionand$13.4 millionfor the six months ended June 30, 2016 and 2015, respectively.No new material employee termination and restructuring plans were initiated during the six months ended June 30, 2016. We expect to complete the integration-related restructuring plan actions discussed below relating to the Bally integration during 2016. All other employee termination and restructuring actions reported in 2015 were completed as of March 31, 2016.

The following table presents a summary of employee termination and restructuring costs by business segment related to the restructuring plans described above, including the costs incurred during the three and six months ended June 30, 2016, the cumulative costs incurred through June 30, 2016 from initiation of the relevant restructuring activities and the total expected costs related to the relevant restructuring activities that have been initiated. As additional integration-related activities

14

are initiated, we expect to incur additional costs related to those activities.

Business Segment		Employee Termination Costs		Property Costs		Other		Total
Gaming	Three Months Ended June 30, 2016	$	2.2	$	—	$	1.2	$	3.4
	Six Months Ended June 30, 2016	3.4		0.4		1.2		5.0
	Cumulative	24.6		0.4		2.8		27.8
	Expected Total	27.1		0.4		2.8		30.3
Lottery	Three Months Ended June 30, 2016	—		—		0.2		0.2
	Six Months Ended June 30, 2016	1.1		—		0.2		1.3
	Cumulative	2.3		—		0.2		2.5
	Expected Total	2.3		—		0.2		2.5
Interactive	Three Months Ended June 30, 2016	0.2		—		0.3		0.5
	Six Months Ended June 30, 2016	0.2		—		0.3		0.5
	Cumulative	2.7		—		2.0		4.7
	Expected Total	2.7		—		2.0		4.7
Unallocated corporate (1)	Three Months Ended June 30, 2016	0.1		—		—		0.1
	Six Months Ended June 30, 2016	0.1		—		—		0.1
	Cumulative	6.4		4.3		2.1		12.8
	Expected Total	8.9		4.3		2.1		15.3
Total	Three Months Ended June 30, 2016	$	2.5	$	—	$	1.7	$	4.2
	Six Months Ended June 30, 2016	$	4.8	$	0.4	$	1.7	$	6.9
	Cumulative	$	36.0	$	4.7	$	7.1	$	47.8
	Expected Total	$	41.0	$	4.7	$	7.1	$	52.8

(1) Cumulative unallocated corporate employee termination costs primarily includes cash severance paid to our former chief executive officer and special termination benefits related to the retirement of our former chief financial officer.

The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the six months ended June 30, 2016:

	Employee Termination Costs			Property Costs			Other			Total
Balance as of December 31, 2015	$	7.3		$	0.8		$	1.4		$	9.5
Additional accruals	4.8			0.4			1.7			6.9
Cash payments	(6.2		)	(0.9		)	(0.2		)	(7.3		)
Balance as of June 30, 2016	$	5.9		$	0.3		$	2.9		$	9.1

(4) Basic and Diluted Net Loss Per Share

The following represents a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share available to common stockholders for the three and six months ended June 30, 2016 and 2015:

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	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Loss (numerator):
Net loss	$	(51.7	)	$	(102.2	)	$	(144.0	)	$	(188.6	)
Shares (denominator):
Basic weighted-average common shares outstanding	87.3			85.9			86.9			85.6
Diluted weighted-average common shares outstanding	87.3			85.9			86.9			85.6
Basic and diluted net loss per share amounts:
Basic net loss per share	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)
Diluted net loss per share	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)

Basic and diluted net loss per share were the same for all periods presented as all common stock equivalents would be anti-dilutive. We excluded 3.0 million and 1.9 million of stock options from the diluted weighted-average common shares outstanding as of June 30, 2016 and 2015, respectively, and 5.3 million and 6.4 million of RSUs from the calculation of diluted weighted-average common shares outstanding as of June 30, 2016 and 2015, respectively.

(5) Accounts and Notes Receivable and Credit Quality of Notes Receivable

Accounts and Notes Receivable

The following summarizes the components of current and long-term accounts and notes receivable, net:

	June 30, 2016			December 31, 2015
Current:
Accounts receivable	$	514.0		$	497.7
Notes receivable	154.5			180.4
Allowance for doubtful accounts	(27.2		)	(23.3		)
Current accounts and notes receivable, net	$	641.3		$	654.8
Long-term:
Notes receivable, net	43.8			51.3
Total accounts and notes receivable, net	$	685.1		$	706.1

Credit Quality of Notes Receivable

We have provided extended payment terms and development financing to certain customers in the form of notes receivable. We carry our notes receivable at face amounts less an allowance for doubtful accounts and imputed interest, if any. Interest income is recognized ratably over the life of the note receivable and any related fees or costs to establish the notes are expensed as incurred, as they are considered insignificant. Actual or imputed interest, if any, is determined based on stated rates or current market rates at the time the note originated and is recorded as interest income in other income (expense), net, ratably over the payment period. We generally impute interest income on notes receivable with terms greater than one year that do not contain a stated interest rate. The interest rates on our outstanding notes receivable ranged from 3.25% to 10.42% at June 30, 2016 and December 31, 2015.

We monitor the credit quality of our accounts and notes receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within the agreed-upon terms. We also review a variety of other relevant qualitative information such as collection experience, economic conditions and customer-specific financial conditions to evaluate credit risk in recording the allowance for doubtful accounts or as an indicator of an impaired loan. Where possible, we seek payment deposits, collateral, pledge agreements, bills of exchange, foreign bank letters of credit, post-dated checks or personal guarantees with respect to notes receivable from our customers. However, the majority of our international notes receivable do not have these features. Currently, we have not sold our notes receivable to third parties; therefore, we do not have any off-balance sheet liabilities for factored receivables.

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Over the past few years, the government authorities in Argentina had limited the exchange of pesos into USD and the transfer of funds from Argentina. In December 2015, the newly elected government removed the limitations of the previous government and also devalued the "official" peso to the market rate. Our accounts and notes receivable, net, from customers in Argentina at June 30, 2016 was $19.0 million, which is denominated in USD, although, under the terms of our arrangements with our customers in Argentina, they are required to pay us in pesos at the spot exchange rate between the peso and the USD on the date of payment. With the recent devaluation of the peso, our customers will now have to pay more pesos to reduce their obligations. In evaluating the collectability of customer receivables in Argentina at June 30, 2016, we specifically evaluated recent government actions, payments, receivables aging, any additional security or collateral we had (bills of exchange, pledge agreements, etc.) and other facts and circumstances relevant to our customers' ability to pay. Our customers in Argentina have continued to pay us in pesos based on the spot exchange rate between the peso and the USD on the payment date. We collected $11.4 million of outstanding receivables from customers in Argentina during the six months ended June 30, 2016.

Government actions and challenges affecting the gaming industry in Mexico have increased the credit quality risk with respect to certain of our current Mexico customers. Our accounts and notes receivable, net, from these certain customers in Mexico at June 30, 2016 was $36.4 million. We collected $14.4 million of outstanding receivables from these certain customers during the six months ended June 30, 2016.

The following summarizes the components of total notes receivable, net:

	June 30, 2016			Balances over 90 days past due			December 31, 2015			Balances over 90 days past due
Notes receivable:
Domestic	$	39.6		$	2.0		$	62.4		$	2.6
International	159.0			41.5			169.8			26.6
Total notes receivable	198.6			43.5			232.2			29.2
Notes receivable allowance for doubtful accounts:
Domestic	(2.3		)	(2.3		)	(2.6		)	(2.5		)
International	(12.5		)	(12.5		)	(10.6		)	(9.5		)
Total notes receivable allowance for doubtful accounts	(14.8		)	(14.8		)	(13.2		)	(12.0		)
Notes receivable, net	$	183.8		$	28.7		$	219.0		$	17.2

At June 30, 2016, 15.6% of our total notes receivable, net, was past due by over 90 days, compared to 7.9% at December 31, 2015.

The following tables detail our evaluation of notes receivable for impairment as of June 30, 2016 and December 31, 2015:

	June 30, 2016		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	39.6	$	13.7	$	25.9
International	159.0		81.7		77.3
Total notes receivable	$	198.6	$	95.4	$	103.2

	December 31, 2015		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	62.4	$	20.7	$	41.7
International	169.8		101.8		68.0
Total notes receivable	$	232.2	$	122.5	$	109.7

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The following table reconciles the allowance for doubtful notes receivable from December 31, 2015 to June 30, 2016:

	Total			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
Beginning balance at December 31, 2015	$	13.2		$	12.9		$	0.3
Charge-offs	(1.3		)	(1.3		)	—
Recoveries	(0.2		)	(0.2		)	—
Provision	3.1			3.1			—
Ending balance at June 30, 2016	$	14.8		$	14.5		$	0.3

The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to June 30, 2015:

	Total			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
Beginning balance at December 31, 2014	$	5.9		$	5.9		$	—
Charge-offs	(2.1		)	(2.1		)	—
Recoveries	(0.5		)	(0.4		)	(0.1		)
Provision	6.4			5.2			1.2
Ending balance at June 30, 2015	$	9.7		$	8.6		$	1.1

For the six months ended June 30, 2016 and 2015, we had no significant modifications to the original financing terms.

In certain international jurisdictions, we offer extended payment terms to our customers. Such payment terms subject us to increased credit risk, which could be exacerbated by, among other things, unfavorable economic conditions or political or economic instability in those regions. Our notes receivable were concentrated in the following international gaming jurisdictions at June 30, 2016:

Mexico	26	%
Peru	17	%
Argentina	9	%
Columbia	6	%
Other (less than 5% individually)	22	%
Total international notes receivable as a percentage of total notes receivable	80	%

(6) Inventories

Inventories consisted of the following as of the dates presented below:

	June 30, 2016		December 31, 2015
Parts and work-in-process	$	128.6	$	118.3
Finished goods	120.4		130.2
Total inventories	$	249.0	$	248.5

Parts and work-in-process include parts for gaming machines, lottery terminals and instant lottery ticket materials, as well as labor and overhead costs for work-in-process associated with the manufacturing of instant lottery games and lottery terminals. Our finished goods inventory primarily consists of gaming machines for sale, instant games for our Participation arrangements and our licensed branded merchandise.

During the three months ended June 30, 2015, we recorded an impairment of $7.1 million related to the discontinuance of certain product lines as a result of the Bally acquisition. The impairment is included in the cost of product sales in our Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2015.

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(7) Property and Equipment, net

Property and equipment, net consisted of the following:

	June 30, 2016			December 31, 2015
Land	$	38.4		$	38.5
Buildings and leasehold improvements	184.7			185.2
Gaming and lottery machinery and equipment	1,048.5			1,084.6
Furniture and fixtures	31.4			36.0
Construction in progress	27.9			25.5
Other property and equipment	264.5			271.0
Less: accumulated depreciation	(899.9		)	(846.8		)
Total property and equipment, net	$	695.5		$	794.0

Depreciation expense for the three and six months ended June 30, 2016 was $86.8 million and $167.4 million, respectively. Depreciation expense for the three and six months ended June 30, 2015 was $93.9 million and $176.3 million, respectively. Depreciation expense is excluded from cost of services, cost of product sales, cost of instant games and other operating expenses and is separately included within D&A in the Consolidated Statements of Operations and Comprehensive Loss.

During the six months ended June 30, 2016, the Gaming and Lottery business segments disposed of certain gaming and lottery assets with gross balances of approximately $90.2 million and $3.1 million, respectively. These disposals did not result in receipt of material cash proceeds and had an immaterial impact on property and equipment, net in our Consolidated Balance Sheet as of June 30, 2016 and the Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2016.

During the three months ended June 30, 2015, the Gaming business segment disposed of certain fully depreciated gaming assets with a historical cost of $59.9 million. The disposal had no impact on property and equipment, net in our Consolidated Balance Sheet as of June 30, 2015 or D&A in the Consolidated Statements of Operations and Comprehensive Loss for three and six months ended June 30, 2015. In addition, during the three months ended June 30, 2015, we recorded an impairment of $5.2 million related to gaming equipment assets for certain product lines that were discontinued as a result of the Bally acquisition, and recorded an impairment of $4.9 million for a Reno, Nevada facility we sold later in the year. The impairments were included in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2015.

(8) Intangible Assets, net and Goodwill

Intangible Assets, net

The following tables present certain information regarding our intangible assets as of June 30, 2016 and December 31, 2015. Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value, which materially approximates the expected pattern of use of these intangible assets.

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Intangible Assets	Gross Carrying Amount		Accumulated Amortization			Net Balance
Balance as of June 30, 2016
Amortizable intangible assets:
Patents	$	26.3	$	(13.1	)	$	13.2
Customer relationships	877.7		(136.8		)	740.9
Licenses	412.5		(121.8		)	290.7
Intellectual property(1)	731.5		(170.3		)	561.2
Trade names	97.4		(4.9		)	92.5
Brand names	124.4		(25.6		)	98.8
Non-compete agreements	0.2		(0.2		)	—
	2,270.0		(472.7		)	1,797.3
Non-amortizable intangible assets:
Trade names	96.7		(2.1		)	94.6
Total intangible assets	$	2,366.7	$	(474.8	)	$	1,891.9
Balance as of December 31, 2015
Amortizable intangible assets:
Patents	$	26.8	$	(12.5	)	$	14.3
Customer relationships	877.7		(109.1		)	768.6
Licenses	326.1		(91.6		)	234.5
Intellectual property(1)	731.1		(124.5		)	606.6
Trade names	97.5		(1.9		)	95.6
Brand names	124.0		(18.9		)	105.1
Non-compete agreements	0.3		(0.3		)	—
	2,183.5		(358.8		)	1,824.7
Non-amortizable intangible assets:
Trade names	97.4		(2.1		)	95.3
Total intangible assets	$	2,280.9	$	(360.9	)	$	1,920.0

(1) Includes $33 million of in-process R&D assets that will not be subject to amortization until they reach commercial feasibility.

In January 2016, we amended and extended the terms of one of our existing license agreements through December 31, 2022. Under the terms of the amended agreement, we are obligated to pay aggregate minimum guarantees of $88.0 million over the life of the contract in exchange for the right to use certain licensed properties in game content themes, which are incorporated into our slot games, online games, lottery products and promotional materials. We account for the minimum guaranteed obligations within other long-term liabilities (or, with respect to the portion that is a current liability within accounts payable or accrued liabilities) at the onset of the license arrangement and record a corresponding licensed asset within intangible assets, net in our Consolidated Balance Sheets. The current and long-term portions of our minimum guaranteed obligations related to the amended license agreement were $8.8 million and $74.6 million, respectively, and are recorded in accounts payable and other long-term liabilities, respectively, in our Consolidated Balance Sheet as of June 30, 2016.

The aggregate intangible asset amortization expense for the three and six months ended June 30, 2016 was $62.3 million and $127.9 million, respectively. The aggregate intangible amortization expense for the three and six months ended June 30, 2015 was $87.2 million and $150.3 million, respectively. Intangible amortization expense is included within D&A in the Consolidated Statements of Operations and Comprehensive Loss.

As a result of an interim review of assets with indefinite useful lives, we recorded an impairment charge of $25.0 million in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2015 to reduce the gross carrying amount of one indefinite-lived trade name asset to its fair value (which was

20

subsequently reclassified to finite-life during the third quarter of 2015).

Goodwill

The table below reconciles the change in the carrying amount of goodwill by business segment for the period from

December 31, 2015 to June 30, 2016.

Goodwill	Gaming			Lottery		Interactive		Totals
Balance as of December 31, 2015	$	2,486.0		$	417.9	$	109.8	$	3,013.7
Foreign currency adjustments	(23.0		)	1.8		—		(21.2		)
Balance as of June 30, 2016	$	2,463.0		$	419.7	$	109.8	$	2,992.5

(9) Software, net

Software, net consisted of the following:

	June 30, 2016			December 31, 2015
Software	$	894.8		$	854.2
Accumulated amortization	(451.6		)	(368.3		)
Software, net	$	443.2		$	485.9

Amortization expense for the three and six months ended June 30, 2016 was $44.0 million and $78.4 million, respectively. Amortization expense for the three and six months ended June 30, 2015 was $41.1 million and $79.8 million, respectively. Amortization expense is included within D&A in the Consolidated Statements of Operations and Comprehensive Loss.

(10) Equity Investments

The following provides an update for events that occurred during the six months ended June 30, 2016 related to our equity investments, which are disclosed in Note 11 (Equity Investments) in our 2015 Annual Report on Form 10-K.

ITL

During the six months ended June 30, 2016, we received a distribution of capital of €2.8 million, or $3.1 million. During the six months ended June 30, 2015, we received a distribution of capital of €5.8 million, or $6.5 million.

RCN

During the six months ended June 30, 2016, we received a dividend of $1.4 million. During the six months ended June 30, 2015, we received a dividend of $1.8 million.

LNS

During the six months ended June 30, 2016, we received a dividend of €13.5 million, or $14.9 million, and a distribution capital of €17.6 million, or $19.4 million. During the six months ended June 30, 2015, we received a dividend of €12.9 million, or $14.5 million, and a distribution capital of €15.0 million, or $16.8 million.

(11) Long-Term and Other Debt

Outstanding Debt and Capital Leases

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The following reflects our outstanding debt as of the dates indicated below:

	Principal		Unamortized debt discount			Unamortized deferred financing costs			Book value June 30, 2016
Senior Secured Credit Facilities:
Revolver, varying interest rate, due 2018	$	80.0	$	—		$	—		$	80.0
Term Loan, varying interest rate, due 2020	2,242.5		(6.9		)	(47.0		)	2,188.6
Term Loan, varying interest rate, due 2021	1,970.0		(15.2		)	(44.8		)	1,910.0
2018 Notes	250.0		—			(1.6		)	248.4
2020 Notes	243.5		—			(2.6		)	240.9
2021 Notes	340.6		(1.6		)	(5.1		)	333.9
Secured Notes	950.0		—			(15.1		)	934.9
Unsecured Notes	2,200.0		—			(39.1		)	2,160.9
Capital lease obligations, 3.9% interest as of June 30, 2016 payable monthly through 2019	19.7		—			—			19.7
Total long-term debt outstanding	$	8,296.3	$	(23.7	)	$	(155.3	)	$	8,117.3
Less: current portion of long-term debt									(49.7		)
Long-term debt, excluding current portion									$	8,067.6
	Principal		Unamortized debt discount			Unamortized deferred financing costs			Book value December 31, 2015
Senior Secured Credit Facilities:
Revolver, varying interest rate, due 2018	$	95.0	$	—		$	—		$	95.0
Term Loan, varying interest rate, due 2020	2,254.0		(7.8		)	(52.5		)	2,193.7
Term Loan, varying interest rate, due 2021	1,980.0		(16.7		)	(49.2		)	1,914.1
2018 Notes	250.0		—			(2.0		)	248.0
2020 Notes	300.0		—			(3.6		)	296.4
2021 Notes	350.0		(1.8		)	(5.6		)	342.6
Secured Notes	950.0		—			(16.4		)	933.6
Unsecured Notes	2,200.0		—			(42.1		)	2,157.9
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019	25.7		—			—			25.7
Total long-term debt outstanding	$	8,404.7	$	(26.3	)	$	(171.4	)	$	8,207.0
Less: current portion of long-term debt									(50.3		)
Long-term debt, excluding current portion									$	8,156.7

Senior Secured Credit Facilities

We and certain of our subsidiaries are party to a credit agreement dated as of October 18, 2013, by and among SGI, as the borrower, us, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto. Prior to the increase in the revolving credit facility and the assumption of the incremental term loans referred to below, the credit agreement provided for senior secured credit facilities in an aggregate principal amount of $2,600.0 million, including a $300.0 million revolving credit facility, which has USD and multi-currency tranches, and a $2,300.0 million term B-1 loan facility.

On October 1, 2014, in connection with the Bally acquisition, we amended our existing credit agreement pursuant to which our $300.0 million revolving credit facility was increased by $267.6 million effective upon the consummation of the Bally acquisition. In addition, we entered into an escrow credit agreement providing for a $2.0 billion senior secured

22

incremental term B-2 loan facility (which became an incremental term B-2 loan facility under our existing credit agreement upon the consummation of the Bally acquisition).

On February 11, 2015, SGI entered into a lender joinder agreement to the credit agreement with an additional commitment lender. Pursuant to the joinder agreement, the amount of the revolving credit facility under the credit agreement was increased by $25.0 million to $592.6 million. Up to $350.0 million of the revolving credit facility is available for issuances of letters of credit.

All of the debt incurred under the Credit Agreement is subject to accelerated maturity depending on our liquidity at the time our 2018 Notes, 2020 Notes and 2021 Notes become due.

During the second quarter of 2016, we repurchased and cancelled $56.5 million and $9.4 million of principal amount of the 2020 Notes and 2021 Notes, respectively, for $34.2 million and $5.7 million in cash, respectively, through separate open market purchases. In connection with this transaction, we recorded a $25.2 million gain on early extinguishment of debt, net of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt.

For additional information regarding our senior secured credit facilities, 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes, Unsecured Notes and capital lease obligations, see Note 15 (Long-Term and Other Debt) in our 2015 Annual Report on Form 10-K.

Fair Value of Debt

The estimated fair value of our long-term debt as of June 30, 2016 and December 31, 2015 was approximately $7,532.3 million and $6,931.6 million, respectively. We estimate the fair value of debt based on quoted market prices of our securities, if available, and indicative pricing derived from market information. We categorize inputs used to measure the fair value of debt as Level 2 in the fair value hierarchy due to the low volume and frequency of transactions in the market.

(12) Fair Value Measurements

The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, approximates their recorded values due to the short-term nature of these instruments. Our assets and liabilities measured at fair value on a recurring basis are described below.

Interest rate swap contracts

In August 2013, we entered into forward starting interest rate swap contracts with an aggregate notional value of $500.0 million. In October 2013, we entered into additional forward starting interest rate swap contracts with an aggregate notional value of $200.0 million. Interest payments pursuant to these contracts started in April 2015 and these contracts will mature in January 2018. We entered into the forward starting interest rate swap contracts, which are designated as cash flow hedges of the future interest payment transactions in accordance with ASC 815, Derivatives and Hedging, in order to eliminate the variability of a portion of cash flows attributable to the LIBOR component of interest expense to be paid on our variable rate debt. Under these hedges, beginning in April 2015, we began to pay interest on the notional amount at a weighted-average fixed rate of 2.151% and began to receive interest on the notional amount at the greater of 1% or the then prevailing three-month LIBOR rate.

These hedges are highly effective in offsetting changes in our future expected cash flows due to fluctuation in the three-month LIBOR rate associated with our variable rate debt. The effectiveness of these hedges is measured quarterly on a retrospective basis by comparing the cumulative change in the hedging instrument's fair value to the change in the hedged transaction's fair value. To the extent these hedges have no ineffectiveness, all gains and losses from these hedges are recorded in other comprehensive income (loss) until the future underlying payment transactions occur. Any realized gains or losses resulting from the hedges will be recognized (together with the hedged transaction) as interest expense in our Consolidated Statements of Operations and Comprehensive Loss.

For the three and six months ended June 30, 2016, we recorded gains, net of tax, of $4.6 million and $3.6 million, respectively, which represent the change in the fair value associated with these hedges, in other comprehensive income (loss) in our Consolidated Statements of Operations and Comprehensive Loss. For the three and six months ended June 30, 2015, we

23

recorded gains, net of tax, of $5.6 million and $0.8 million, respectively, all of which is recorded in other comprehensive (loss) income in our Consolidated Statements of Operations and Comprehensive Loss related to these hedges. We realized losses of $2.0 million and $4.1 million, which represent reclassifications from accumulated other comprehensive loss to interest expense in our Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2016, respectively. The Company expects to reclassify additional losses of $8.2 million from accumulated other comprehensive loss to interest expense in the next twelve months. As of June 30, 2016, the fair value of these hedges was $11.8 million, of which $8.2 million is recorded in accrued liabilities and $3.6 million is recorded in other long-term liabilities in our Consolidated Balance Sheet. As of December 31, 2015, the fair value of these hedges was $11.9 million, of which $7.9 million is recorded in accrued liabilities and $4.0 million is recorded in other long-term liabilities in our Consolidated Balance Sheet. We estimate the fair value of our interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy.

Other

As of June 30, 2016 and December 31, 2015, we had $14.5 million and $16.7 million of assets held for sale, respectively, which at year-end primarily consisted of our Waukegan, Illinois manufacturing facility and a portion of our Chicago, Illinois R&D campus. During the second quarter of 2016, we sold the portion of our Chicago, Illinois R&D campus which was previously held for sale at a price that materially approximated the carrying amount, less selling costs. Each of these facilities was included in our Consolidated Balance Sheets within Prepaid expenses, deposits and other current assets and is reported at the lower of the carrying amount or fair market value, less expected costs to sell, which approximated the fair value as of June 30, 2016 and December 31, 2015. The inputs used to measure the fair value of our assets held for sale were based on market approach and are categorized as Level 3 in the fair value hierarchy.

Notes Receivable

The fair value of notes receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of June 30, 2016 and December 31, 2015, the fair value of the notes receivable, net, approximated the carrying amount due to the short-term nature of notes receivable.

(13) Stockholders' Deficit

Stock-based and other incentive compensation

We offer stock-based compensation in the form of stock options and RSUs. We also offered an ESPP through June 30, 2015, at which point in time the shares allocated to this plan were fully issued and the ESPP terminated in accordance with its terms. See Note 18 (Stock-Based and Other Incentive Compensation) in our 2015 Annual Report on Form 10-K. At our annual meeting of stockholders, held on June 15, 2016 (the "Annual Meeting"), our stockholders approved the adoption of a new ESPP, the terms of which are described in our annual proxy statement, filed on Schedule 14A with the SEC on April 29, 2016. The first offering period under the new ESPP will commence on January 1, 2017.

We may grant certain awards in which the vesting is contingent upon the Company achieving certain performance targets. Upon determining that the performance target is probable, the fair value of the award is recognized over the service period, subject to potential adjustment.

We grant stock options to employees and directors under our stock-based compensation plans with exercise prices that are not less than the fair market value of our common stock on the date of grant, as determined pursuant to the terms of the applicable stock-based compensation plan. The terms of the stock option and RSU awards, including the vesting schedule of such awards, are determined at our discretion subject to the terms of the applicable stock-based compensation plan. Options granted over the last several years have generally become exercisable in fourequal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met, in each case, with a maximum period to exercise of ten years. RSUs typically vest in four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met. We record compensation cost for all stock options and RSUs based on the fair value at the grant date and in the case of performance-based awards, compensation costs may be adjusted to reflect the likelihood of achieving the performance targets.

Stock Options

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For the three and six months ended June 30, 2016, we granted 1.2 million options with a weighted average grant date fair value of approximately $4.81. We had approximately 3.0 million and 0.9 million of options outstanding and options exercisable as of June 30, 2016, respectively.

For the three and six months ended June 30, 2016, we recognized stock-based compensation expense of $0.6 million and $1.3 million, respectively, related to the service period of stock options. For the three and six months ended June 30, 2015, we recognized stock-based compensation expense of $0.5 million and $0.9 million, respectively.

As of June 30, 2016, we had $10.2 million of unrecognized stock-based compensation relating to unvested stock options that will be amortized over a weighted average period of approximately two years.

Restricted Stock Units

A summary of the changes in RSUs outstanding under our stock-based compensation plans during the six months ended June 30, 2016 is presented below:

	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Unvested RSUs as of December 31, 2015	5.6		$	13.05
Granted	0.2		8.21
Vested	(0.8	)	12.46
Canceled	(0.4	)	12.56
Unvested RSUs as of March 31, 2016	4.6		$	13.00
Granted	1.4		9.60
Vested	(0.6	)	12.51
Canceled	(0.1	)	13.35
Unvested RSUs as of June 30, 2016	5.3		$	12.16

The weighted average grant date fair value of RSUs granted during the three and six months ended June 30, 2016 was $9.60 and $9.42, respectively. During the three and six months ended June 30, 2016 we recognized stock-based compensation expense of $5.4 million and $11.2 million, respectively, related to the vesting of RSUs. For the three and six months ended June 30, 2015, we recognized stock-based compensation expense of $6.3 million and $11.0 million, respectively, related to the service period of RSUs.

As of June 30, 2016, we had $58.0 million of unrecognized stock-based compensation relating to unvested RSUs that will be amortized over a weighted average period of approximately two years. 

(14) Employee Benefit Plans

We have defined benefit pension plans for our U.K.-based union employees (the "U.K. Plan") and certain Canadian-based employees (the "Canadian Plan"). Retirement benefits under the U.K. Plan are generally based on an employee's average compensation over the two years preceding retirement. Retirement benefits under the Canadian Plan are generally based on the number of years of credited service. Our policy is to fund the minimum contribution permissible by the applicable authorities. See Note 19 (Pension and Other Post Retirement Plans) in our 2015 Annual Report on Form 10-K.

The net periodic benefit cost recognized for both the three months ended June 30, 2016 and 2015 was $0.4 million. The net periodic benefit cost recognized for the six months ended June 30, 2016 and 2015 was $0.7 million and $0.9 million, respectively.

We have a 401(k) plan for U.S.-based employees. Those employees who participate in our 401(k) plan are eligible to receive matching contributions of 35% from us for participant contributions up to the first 6% of their compensation (as defined in the plan document). Contribution expense for the three months ended June 30, 2016 and 2015 was $2.9 million and $2.7 million, respectively. Contribution expense for the six months ended June 30, 2016 and 2015 was $5.8 million and $5.8 million, respectively.

(15) Income Taxes

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The effective income tax rates for the three and six months ended June 30, 2016 were 27.5% and 21.2%, respectively, and39.0%and40.4%for the three and six months ended June 30, 2015, respectively, andwere determined using an estimated annual effective tax rate after considering any discrete items for such periods. The reduction in income tax rate for the three and six months ended June 30, 2016 when compared to the three and six months ended June 30, 2015 is primarily attributable to the impact of negative evidence related to the realizability of the deferred tax assets expected to be created by 2016 U.S. taxable losses.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company has remained in a three year cumulative loss in the U.S. federal tax jurisdiction. As of June 30, 2016, on the basis of this evaluation and considering the projected U.S. pre-tax losses for 2016 and the resulting net U.S. deferred tax asset position anticipated to occur during 2016, a valuation allowance has been contemplated as a component of the estimated annual effective tax rate in order to recognize only the portion of the benefit related to current year losses that is more likely than not to be realized.

As of December 31, 2015, the Company remained in a net U.S. deferred tax liability position and therefore a valuation allowance against its U.S. deferred tax assets was only necessary for certain state deferred tax assets and U.S. foreign tax credit carryforwards. The Company maintained other valuation allowances for certain non-U.S. jurisdictions with cumulative losses. The Company is projecting a pre-tax loss for its U.S. operations in 2016 in an amount that will more than exceed, on an after tax basis, the net deferred tax liability recorded as of December 31, 2015. Thus, we are projecting to be in a net U.S. deferred tax asset position at December 31, 2016.

Our effective income tax rate on foreign earnings is impacted by the mix of income and the statutory tax rates in our foreign jurisdictions, which range from a low of 0% to a high of 39%. The foreign jurisdictions that had the most impact on our foreign income tax expense (benefit) in the three and six months ended June 30, 2016 included Austria, Bermuda, Canada, India, Ireland and the U.K.

(16) Litigation

The Company is involved in various legal proceedings, including those discussed below. We record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss can be reasonably estimated (although, as discussed below, there may be an exposure to loss in excess of the accrued liability). We evaluate our accruals for legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect (1) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments, (2) the advice and analyses of counsel and (3) the assumptions and judgment of management. Legal costs associated with our legal proceedings are expensed as incurred. We had accrued liabilities of $9.0 million and $16.4 million for all of our legal matters that were contingencies as of June 30, 2016 and December 31, 2015, respectively.

Substantially all of our legal contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss involves a series of complex judgments about future events. Consequently, the ultimate outcomes of our legal contingencies could result in losses in excess of amounts we have accrued. We may be unable to estimate a range of possible losses for some matters pending against the Company or its subsidiaries, even when the amount of damages claimed against the Company or its subsidiaries is stated because, among other things: (1) the claimed amount may be exaggerated or unsupported; (2) the claim may be based on a novel legal theory or involve a large number of parties; (3) there may be uncertainty as to the likelihood of a class being certified or the ultimate size of the class; (4) there may be uncertainty as to the outcome of pending appeals or motions; (5) the matter may not have progressed sufficiently through discovery or there may be significant factual or legal issues to be resolved or developed; and/or (6) there may be uncertainty as to the enforceability of legal judgments and outcomes in certain jurisdictions. Other matters have progressed sufficiently that we are able to estimate a range of possible loss. For those legal contingencies disclosed below, as well as those related to the previously disclosed settlement agreement entered into in February 2015 with SNAI S.p.a., as to which a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a range of possible loss, the current estimated range is up to approximately $13.2 million in excess of the accrued liabilities (if any) related to those legal contingencies. This aggregate range represents management's estimate of additional possible loss in excess of the accrued liabilities (if any) with respect to these matters based on currently available information, including any damages claimed by the plaintiffs, and is subject to significant judgment and a variety of assumptions and inherent uncertainties. For example, at the time of making an estimate, management may have only preliminary, incomplete, or inaccurate information about the facts underlying a claim; its assumptions about the future rulings of the court or other tribunal on significant issues, or the behavior and incentives of adverse parties, regulators, indemnitors or co‑defendants, may prove to be wrong; and the outcomes it is attempting to predict are often not amenable to the use of

26

statistical or other quantitative analytical tools. In addition, from time to time an outcome may occur that management had not accounted for in its estimate because it had considered that outcome to be remote. Furthermore, as noted above, the aggregate range does not include any matters for which the Company is not able to estimate a range of possible loss. Accordingly, the estimated aggregate range of possible loss does not represent our maximum loss exposure. Any such losses could have a material adverse impact on our results of operations, cash flows or financial condition. The legal proceedings underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.

Colombia Litigation

Our subsidiary, SGI, owned a minority interest in Wintech de Colombia S.A., or Wintech (now liquidated), which formerly operated the Colombian national lottery under a contract with Empresa Colombiana de Recursos para la Salud, S.A. (together with its successors, "Ecosalud"), an agency of the Colombian government. The contract provided for a penalty against Wintech, SGI and the other shareholders of Wintech of up to $5.0 million if certain levels of lottery sales were not achieved. In addition, SGI delivered to Ecosalud a $4.0 million surety bond as a further guarantee of performance under the contract. Wintech started the instant lottery in Colombia but, due to difficulties beyond its control, including, among other factors, social and political unrest in Colombia, frequently interrupted telephone service and power outages, and competition from another lottery being operated in a province of Colombia that we believe was in violation of Wintech's exclusive license from Ecosalud, the projected sales level was not met for the year ended June 30, 1993.

In 1993, Ecosalud issued a resolution declaring that the contract was in default. In 1994, Ecosalud issued a liquidation resolution asserting claims for compensation and damages against Wintech, SGI and other shareholders of Wintech for, among other things, realization of the full amount of the penalty, plus interest, and the amount of the bond. SGI filed separate actions opposing each resolution with the Tribunal Contencioso of Cundinamarca in Colombia (the "Tribunal"), which upheld both resolutions. SGI appealed each decision to the Council of State. In May 2012, the Council of State upheld the contract default resolution, which decision was notified to us in August 2012. In October 2013, the Council of State upheld the liquidation resolution, which decision was notified to us in December 2013.

In July 1996, Ecosalud filed a lawsuit against SGI in the U.S. District Court for the Northern District of Georgia asserting many of the same claims asserted in the Colombia proceedings, including breach of contract, and seeking damages. In March 1997, the District Court dismissed Ecosalud's claims. Ecosalud appealed the decision to the U.S. Court of Appeals for the Eleventh Circuit. The Court of Appeals affirmed the District Court's decision in 1998.

In June 1999, Ecosalud filed a collection proceeding against SGI to enforce the liquidation resolution and recover the claimed damages. In May 2013, the Tribunal denied SGI's merit defenses to the collection proceeding and issued an order of payment of approximately 90 billion Colombian pesos (or approximately $30.8 million), plus default interest potentially accrued since 1994 at a 12% statutory interest rate. SGI has filed an appeal to the Council of State, which appeal has stayed the payment order.

SGI believes it has various defenses, including on the merits, against Ecosalud's claims. Although we believe these claims will not result in a material adverse effect on our consolidated results of operations, cash flows or financial position, it is not feasible to predict the final outcome, and there can be no assurance that these claims will not ultimately be resolved adversely to us or result in material liability.

Oregon State Lottery Matter

On December 31, 2014, a representative of a purported class of persons alleged to have been financially harmed by relying on the "auto hold" feature of various manufacturers' video lottery terminals played in Oregon, filed suit in the Circuit Court of Multnomah County, Oregon, against the Oregon State Lottery and various manufacturers, including WMS Gaming Inc.  The suit alleges that the auto hold feature of video poker games is perceived by players as providing the best possible playing strategy that will maximize the odds of the player winning, when such auto hold feature does not maximize the players' odds of winning. The plaintiffs are seeking in excess of $134.0 million in monetary damages.

In April 2015, the court granted the Oregon State Lottery's motion to dismiss, stating the plaintiffs had not satisfied the Oregon Tort Claims Act. As a result of the dismissal, the court indicated that all claims against WMS Gaming Inc. were moot. In June 2015, plaintiffs filed an appeal. We intend to vigorously defend against the claims asserted in the lawsuit.

Shuffle Tech Matter

In April 2015, Shuffle Tech International, LLC, Aces Up Gaming, Inc. and Poydras-Talrick Holdings LLC brought a civil action in the United States District Court for the Northern District of Illinois against the Company, Bally and Bally Gaming, Inc., alleging monopolization of the market for card shufflers in violation of federal antitrust laws, fraudulent procurement of patents on card shufflers, unfair competition and deceptive trade practices. Specifically, the plaintiffs claim that

27

the defendants utilized certain shuffler patents in a predatory manner to create and maintain a monopoly in the relevant shuffler market. The plaintiffs seek no less than $100.0 million in compensatory damages, treble damages and injunctive and declaratory relief. In June 2015, the defendants filed a motion to dismiss. In October 2015, the court dismissed all of the plaintiffs' claims against Bally and Bally Gaming, Inc. with prejudice, except for the claims of violation of antitrust laws related to the fraudulent procurement of patents on card shufflers. We intend to vigorously defend against the claims asserted in the lawsuit.

(17) Supplemental Disclosure of Cash Flow Information

Additional cash flow information is presented as follows:

	Six Months Ended June 30,
	2016		2015
Interest paid	$	313.6	$	294.6
Income taxes paid (received)	$	6.6	$	(4.1	)

Six months ended June 30, 2016

During the six months ended June 30, 2016, we recorded approximately $86.9 million of non-cash additions to intangible assets and corresponding current and long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period.     

Six months ended June 30, 2015

During the six months ended June 30, 2015, we recorded approximately $12.5 million of non-cash other assets and related long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period.

There were no other significant non-cash investing or financing activities for the six months ended June 30, 2016 and 2015.

(18) Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

We conduct substantially all of our business through our U.S. and foreign subsidiaries. As of June 30, 2016, SGI's obligations under our credit agreement, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were fully and unconditionally and jointly and severally guaranteed by Scientific Games Corporation (the "Parent Company") and substantially all of our 100%-owned U.S. subsidiaries other than SGI (the "Guarantor Subsidiaries"). As of June 30, 2016, our 2018 Notes, which were issued by the Parent Company, were fully and unconditionally and jointly and severally guaranteed by substantially all of our 100%-owned U.S. subsidiaries, including SGI. The guarantees of our 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes will terminate under the following customary circumstances: (1) the sale or disposition of the capital stock of the guarantor (including by consolidation or merger of the guarantor into another person); (2) the liquidation or dissolution of the guarantor; (3) the defeasance or satisfaction and discharge of the notes; (4) the release of the guarantor from any guarantees of indebtedness of the Parent Company and SGI (or, in the case of the 2018 Notes, the release of the guarantor from any guarantees of indebtedness of the Parent Company); and (5) in the case of the 2020 Notes, the 2021 Notes and the Secured Notes and the Unsecured Notes, the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the respective Notes.

Presented below is condensed consolidating financial information for (1) the Parent Company, (2) SGI, (3) the Guarantor Subsidiaries and (4) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the "Non-Guarantor Subsidiaries") as of June 30, 2016 and December 31, 2015 and for the three and six months ended June 30, 2016 and 2015. The condensed consolidating financial information has been presented to show the nature of assets held, results of operations and cash flows of the Parent Company, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the guarantee structures of our credit agreement, the 2018 Notes, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were in effect at the beginning of the periods presented. 

The condensed consolidating financial information reflects the investments of the Parent Company in SGI and in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method of accounting. They also reflect the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries. Net changes in intercompany due from/due to accounts are reported in the accompanying Supplemental Condensed Consolidating Statements of Cash Flows as investing

28

activities if the applicable entities have a net investment (asset) in intercompany accounts and as a financing activity if the applicable entities have a net intercompany borrowing (liability) balance.

29

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	32.4		$	0.5		$	—	$	68.5	$	—		$	101.4
Restricted cash	—			—			24.4		0.1		—			24.5
Accounts receivable, net	—			98.0			226.5		176.8		—			501.3
Notes receivable, net	—			—			91.2		48.8		—			140.0
Inventories	—			35.8			89.4		136.2		(12.4		)	249.0
Prepaid expenses, deposits and other current assets	31.6			14.1			35.1		40.1		—			120.9
Property and equipment, net	11.9			101.4			430.4		166.3		(14.5		)	695.5
Investment in subsidiaries	3,202.2			851.8			796.8		—		(4,850.8		)	—
Goodwill	—			188.3			1,988.2		816.0		—			2,992.5
Intangible assets, net	207.1			38.7			1,423.6		222.5		—			1,891.9
Intercompany balances	—			6,531.8			—		—		(6,531.8		)	—
Software, net	52.4			25.4			316.3		49.1		—			443.2
Other assets	291.0			119.3			44.7		214.6		(364.7		)	304.9
Total assets	$	3,828.6		$	8,005.1		$	5,466.6	$	1,939.0	$	(11,774.2	)	$	7,465.1
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	6.7	$	—		$	49.7
Other current liabilities	74.3			153.2			208.4		159.8		—			595.7
Long-term debt, excluding current portion	248.4			7,806.2			—		13.0		—			8,067.6
Other long-term liabilities	179.2			14.2			498.8		91.5		(364.7		)	419.0
Intercompany balances	4,993.6			—			1,503.7		34.5		(6,531.8		)	—
Stockholders' (deficit) equity	(1,666.9		)	(11.5		)	3,255.7		1,633.5		(4,877.7		)	(1,666.9		)
Total liabilities and stockholders' (deficit) equity	$	3,828.6		$	8,005.1		$	5,466.6	$	1,939.0	$	(11,774.2	)	$	7,465.1

30

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015

	Parent  Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	43.2		$	—		$	4.7	$	80.8	$	—		$	128.7
Restricted cash	—			—			20.0		0.2		—			20.2
Accounts receivable, net	—			94.6			233.6		158.9		—			487.1
Notes receivable, net	—			—			114.2		53.5		—			167.7
Inventories	—			36.9			104.2		119.6		(12.2		)	248.5
Prepaid expenses, deposits and other current assets	26.8			7.0			52.1		37.4		—			123.3
Property and equipment, net	8.2			106.4			502.2		188.7		(11.5		)	794.0
Investment in subsidiaries	3,280.9			838.1			648.3		—		(4,767.3		)	—
Goodwill	—			186.0			1,990.5		837.2		—			3,013.7
Intangible assets, net	138.3			39.8			1,505.8		236.1		—			1,920.0
Intercompany balances	—			6,511.1			—		—		(6,511.1		)	—
Software, net	35.6			32.7			359.8		57.8		—			485.9
Other assets	232.5			123.4			51.7		241.7		(306.2		)	343.1
Total assets	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	7.3	$	—		$	50.3
Other current liabilities	63.7			150.5			245.4		144.0		—			603.6
Long-term debt, excluding current portion	248.0			7,890.3			—		18.4		—			8,156.7
Other long-term liabilities	119.1			14.5			502.1		87.7		(306.3		)	417.1
Intercompany balances	4,830.2			—			1,558.2		122.6		(6,511.0		)	—
Stockholders' (deficit) equity	(1,495.5		)	(122.3		)	3,281.4		1,631.9		(4,791.0		)	(1,495.5		)
Total liabilities and stockholders' (deficit) equity	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2

31

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	126.4		$	408.6		$	265.5		$	(71.3	)	$	729.2
Cost of services, cost of product sales and cost of instant games (1)	—			86.1			108.8			152.6			(71.3		)	276.2
Selling, general and administrative	36.9			11.7			51.7			44.6			—			144.9
Research and development	1.9			2.3			39.1			8.4			—			51.7
Employee termination and restructuring	0.1			(0.1		)	3.3			0.9			—			4.2
Depreciation and amortization	13.0			10.3			141.1			28.7			—			193.1
Operating (loss) income	(51.9		)	16.1			64.6			30.3			—			59.1
Interest expense	—			(35.1		)	(130.1		)	(0.1		)	—			(165.3		)
Gain on early extinguishment of debt	—			25.2			—			—			—			25.2
Other (expense) income, net	(24.7		)	52.5			(24.2		)	6.1			—			9.7
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(76.6		)	58.7			(89.7		)	36.3			—			(71.3		)
Equity in (loss) income of subsidiaries	—			11.3			9.3			—			(20.6		)	—
Income tax benefit (expense)	24.9			—			—			(5.3		)	—			19.6
Net (loss) income	$	(51.7	)	$	70.0		$	(80.4	)	$	31.0		$	(20.6	)	$	(51.7	)
Other comprehensive (loss) income	(30.2		)	3.2			(8.1		)	(33.4		)	38.3			(30.2		)
Comprehensive (loss) income	$	(81.9	)	$	73.2		$	(88.5	)	$	(2.4	)	$	17.7		$	(81.9	)

(1) Exclusive of D&A.

32

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	106.4		$	430.6		$	261.5		$	(107.0	)	$	691.5
Cost of services, cost of product sales and cost of instant games (1)	—			79.0			139.5			163.8			(107.0		)	275.3
Selling, general and administrative	16.7			18.4			70.8			35.0			—			140.9
Research and development	—			1.4			39.3			7.3			—			48.0
Employee termination and restructuring	1.4			0.7			2.4			0.7			—			5.2
Depreciation and amortization	8.1			9.8			170.8			33.5			—			222.2
Operating (loss) income	(26.2		)	(2.9		)	7.8			21.2			—			(0.1		)
Interest expense	(5.3		)	(83.1		)	(77.9		)	(0.1		)	—			(166.4		)
Other (expense) income, net	6.2			18.3			(29.0		)	3.5			—			(1.0		)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(25.3		)	(67.7		)	(99.1		)	24.6			—			(167.5		)
Equity in (loss) income of subsidiaries	(143.0		)	22.7			9.5			—			110.8			—
Income tax benefit (expense)	66.1			(0.1		)	2.9			(3.6		)	—			65.3
Net (loss) income	$	(102.2	)	$	(45.1	)	$	(86.7	)	$	21.0		$	110.8		$	(102.2	)
Other comprehensive income (loss)	23.1			3.3			(25.4		)	42.4			(20.3		)	23.1
Comprehensive (loss) income	$	(79.1	)	$	(41.8	)	$	(112.1	)	$	63.4		$	90.5		$	(79.1	)

(1) Exclusive of D&A.

33

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Six Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	241.7		$	816.5		$	483.4		$	(130.4	)	$	1,411.2
Cost of instant games, cost of services and cost of product sales (1)	—			169.0			219.8			274.1			(130.4		)	532.5
Selling, general and administrative	61.0			22.9			119.4			83.9			—			287.2
Research and development	2.8			4.6			78.4			15.7			—			101.5
Employee termination and restructuring	0.1			—			4.1			2.7			—			6.9
Depreciation and amortization	25.8			21.1			267.9			58.9			—			373.7
Operating (loss) income	(89.7		)	24.1			126.9			48.1			—			109.4
Interest expense	(0.1		)	(69.9		)	(260.9		)	(0.1		)	—			(331.0		)
Gain on early extinguishment of debt	—			25.2			—			—			—			25.2
Other (expense) income, net	(50.3		)	102.8			(47.3		)	8.4			—			13.6
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(140.1		)	82.2			(181.3		)	56.4			—			(182.8		)
Equity in (loss) income of subsidiaries	(51.0		)	30.2			16.2			—			4.6			—
Income tax benefit (expense)	47.1			—			—			(8.3		)	—			38.8
Net (loss) income	$	(144.0	)	$	112.4		$	(165.1	)	$	48.1		$	4.6		$	(144.0	)
Other comprehensive income (loss)	(32.6		)	3.0			(6.2		)	(30.7		)	33.9			(32.6		)
Comprehensive (loss) income	$	(176.6	)	$	115.4		$	(171.3	)	$	17.4		$	38.5		$	(176.6	)

(1) Exclusive of D&A.

34

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Six Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	217.6		$	862.9		$	470.3		$	(200.6	)	$	1,350.2
Cost of instant games, cost of services and cost of product sales (1)	—			160.3			284.8			286.2			(200.6		)	530.7
Selling, general and administrative	31.6			34.6			145.1			75.5			—			286.8
Research and development	—			2.8			77.1			15.0			—			94.9
Employee termination and restructuring	3.2			0.9			6.9			2.4			—			13.4
Depreciation and amortization	16.0			19.6			299.6			71.2			—			406.4
Operating (loss) income	(50.8		)	(0.6		)	49.4			20.0			—			18.0
Interest expense	(3.9		)	(119.3		)	(207.3		)	(0.2		)	—			(330.7		)
Other (expense) income, net	18.0			35.9			(68.8		)	11.4			—			(3.5		)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(36.7		)	(84.0		)	(226.7		)	31.2			—			(316.2		)
Equity in (loss) income of subsidiaries	(281.3		)	29.3			3.3			—			248.7			—
Income tax benefit (expense)	129.4			(0.1		)	2.9			(4.6		)	—			127.6
Net (loss) income	$	(188.6	)	$	(54.8	)	$	(220.5	)	$	26.6		$	248.7		$	(188.6	)
Other comprehensive loss	(87.1		)	(9.8		)	(8.5		)	(77.2		)	95.5			(87.1		)
Comprehensive loss	$	(275.7	)	$	(64.6	)	$	(229.0	)	$	(50.6	)	$	344.2		$	(275.7	)

(1) Exclusive of D&A.

35

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(109.5	)	$	122.1		$	104.8		$	74.5		$	—		$	191.9
Cash flows from investing activities:
Capital expenditures	(26.7		)	(5.2		)	(77.3		)	(23.4		)	—			(132.6		)
Distributions of capital on equity investments	—			—			—			22.5			—			22.5
Restricted Cash	—			—			(3.8		)	—			—			(3.8		)
Changes in other assets and liabilities and other	0.3			—			8.0			(2.2		)	—			6.1
Other, principally change in intercompany investing activities	—			(39.9		)	—			—			39.9			—
Net cash used in investing activities	(26.4		)	(45.1		)	(73.1		)	(3.1		)	39.9			(107.8		)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	—			(76.5		)	—			(3.6		)	—			(80.1		)
Payments on license obligations	(15.1		)	—			(9.9		)	—			—			(25.0		)
Redemptions of common stock under stock-based compensation plans	(4.4		)	—			—			—			—			(4.4		)
Other, principally change in intercompany financing activities	144.6			—			(25.9		)	(78.8		)	(39.9		)	—
Net cash provided by (used in) financing activities	125.1			(76.5		)	(35.8		)	(82.4		)	(39.9		)	(109.5		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.6		)	(1.3		)	—			(1.9		)
Increase (decrease) in cash and cash equivalents	(10.8		)	0.5			(4.7		)	(12.3		)	—			(27.3		)
Cash and cash equivalents, beginning of period	43.2			—			4.7			80.8			—			128.7
Cash and cash equivalents, end of period	$	32.4		$	0.5		$	—		$	68.5		$	—		$	101.4

36

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(33.1	)	$	(69.4	)	$	127.7		$	89.2		$	—		$	114.4
Cash flows from investing activities:
Capital expenditures	(8.6		)	(12.4		)	(95.6		)	(26.2		)	—			(142.8		)
Distributions of capital on equity investments	—			0.8			—			34.4			—			35.2
Changes in other assets and liabilities and other	—			—			4.0			5.5			—			9.5
Other, principally change in intercompany investing activities	—			114.2			—			—			(114.2		)	—
Net cash (used in) provided by investing activities	(8.6		)	102.6			(91.6		)	13.7			(114.2		)	(98.1		)
Cash flows from financing activities:
Net payments on long-term debt	—			(31.5		)	—			(4.7		)	—			(36.2		)
Payments on license obligations	(13.5		)	—			(5.2		)	—			—			(18.7		)
Contingent earnout payments	—			—			(0.5		)	—			—			(0.5		)
Issuance (redemptions) of common stock under stock-based compensation plans	0.9			—			(29.6		)	(116.0		)	145.6			0.9
Other, principally change in intercompany financing activities	58.2			—			(12.0		)	(14.8		)	(31.4		)	—
Net cash provided by (used in) financing activities	45.6			(31.5		)	(47.3		)	(135.5		)	114.2			(54.5		)
Effect of exchange rate changes on cash and cash equivalents	0.1			(0.4		)	(1.8		)	(2.4		)	—			(4.5		)
Increase (decrease) in cash and cash equivalents	4.0			1.3			(13.0		)	(35.0		)	—			(42.7		)
Cash and cash equivalents, beginning of period	37.9			0.1			28.8			105.0			—			171.8
Cash and cash equivalents, end of period	$	41.9		$	1.4		$	15.8		$	70.0		$	—		$	129.1

37

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to enhance the reader's understanding of our operations and current business environment and should be read in conjunction with the description of our business included under "Item 1. Financial Statements" and Item 1. "Risk Factors" in this Quarterly Report on Form 10-Q and our "Management’s Discussion and Analysis of Financial Condition and Results of Operations," "Business" and "Risk Factors" sections included in our 2015 Annual Report on Form 10-K.

This "Management's Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be read in conjunction with the disclosures and information contained and referenced under "Forward-Looking Statements" and "Risk Factors" included in this Quarterly Report on Form 10-Q and "Risk Factors" included in our 2015 Annual Report on Form 10-K. As used in this MD&A, the terms "we," "us," "our" and the "Company" mean Scientific Games Corporation together with its consolidated subsidiaries.

BUSINESS OVERVIEW

We are a leading developer of technology‑based products and services and associated content for the worldwide gaming, lottery and interactive gaming industries. Our portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw‑based lottery games, server‑based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. We also gain access to technologies and pursue global expansion through strategic acquisitions and equity investments.

Segments

We report our operations in three business segments — Gaming, Lottery and Interactive —representing our different products and services. See "— Business Segments Results" below and Note 2 (Business Segments) for additional business segment information.

Foreign Exchange

Our results are impacted by changes in foreign currency exchange rates used in the translation of foreign functional currencies into USD and the re-measurement of foreign currency transactions or balances. The impact of foreign currency exchange rate fluctuations represents the difference between current rates and prior-period rates applied to current activity. We have exposure to foreign currency volatility, particularly the British Pound Sterling, the Euro and the Australian Dollar, which represented $61.1 million, or 8.4%, $31.2 million, or 4.3%, and $34.5 million, or 4.7%, respectively, of our revenue for the three months ended June 30, 2016 and $116.2 million, or 8.2%, $57.7 million, or 4.1%, and $52.0 million, or 3.7%, respectively, of our revenue for the six months ended June 30, 2016. During 2015, we had exposure to foreign currency volatility, particularly the British Pound Sterling, the Euro, and the Australian Dollar, which represented $58.9 million, or 8.5%, $21.2 million, or 3.1%, and $37.8 million, or 5.5%, respectively, of our revenue for the three months ended June 30, 2015 and $116.9 million, or 8.7%, $39.7 million, or 2.9%, and $57.1 million or 4.2%, respectively, of our revenue for the six months ended June 30, 2015.

We also have foreign currency exposure related to certain of our equity investments. See further information regarding our foreign exchange exposure in "Quantitative and Qualitative Disclosures About Market Risk" under Item 7A of our 2015 Annual Report on Form 10-K and "Risk Factors" under Item 1A in this Quarterly Report on Form 10-Q.

38

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

CONSOLIDATED RESULTS

(in millions)	Three Months Ended   June 30,						Variance
	2016			2015			2016 vs. 2015
Revenue:
Services	$	363.5		$	337.9		$	25.6		7.6	%
Product sales	214.8			218.1			(3.3		)	(1.5	)%
Instant games	150.9			135.5			15.4			11.4	%
Total revenue	729.2			691.5			37.7			5.5	%
Operating expenses:
Cost of services (1)	101.4			98.6			2.8			2.8	%
Cost of product sales (1)	100.7			107.9			(7.2		)	(6.7	)%
Cost of instant games (1)	74.1			68.8			5.3			7.7	%
Selling, general and administrative	144.9			140.9			4.0			2.8	%
Research and development	51.7			48.0			3.7			7.7	%
Employee termination and restructuring	4.2			5.2			(1.0		)	(19.2	)%
Depreciation and amortization	193.1			222.2			(29.1		)	(13.1	)%
Operating income (loss)	59.1			(0.1		)	59.2			n/m
Other (expense) income:
Interest expense	(165.3		)	(166.4		)	1.1			(0.7	)%
Earnings from equity investments	8.0			3.3			4.7			142.4	%
Gain on early extinguishment of debt	25.2			—			25.2			n/m
Other income (expense), net	1.7			(4.3		)	6.0			139.5	%
Net loss before income taxes	(71.3		)	(167.5		)	96.2			(57.4	)%
Income tax benefit	19.6			65.3			(45.7		)	(70.0	)%
Net loss	$	(51.7	)	$	(102.2	)	$	50.5		(49.4	)%

(1) Exclusive of D&A.

n/m = not meaningful    

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

Revenue

Consolidated revenue increased by $37.7 million in 2016, despite the impact from $5.3 million of unfavorable currency translation and $6.6 million due to the January 2016 expiration of the CSL validation contract. During the period, Lottery and Interactive revenues increased by $13.7 million and $31.8 million, respectively, and Gaming revenues decreased by $7.8 million.

Services revenue increased by $25.6 million in 2016 due primarily to a $31.8 million increase in Interactive revenue driven by growth in our social gaming business and the success of our recently launched social gaming apps including Quick Hit® Slots and Hot Shot® Social Casino. This increase was partially offset by decreases of $4.4 million and $1.8 million in Gaming and Lottery services revenue, respectively.

Product sales revenue decreased by $3.3 million in 2016 due primarily to a $3.4 million decrease in Gaming revenue due to lower systems hardware and software and table products sales, which was partially offset by an increase in machine sales primarily due to a 863 unit increase in global shipments.

39

Instant games revenue increased by $15.4 million in 2016 due primarily to increases in U.S. instant game sales, which included strong growth from lottery customers with Participation contracts.

Cost of Revenue

Consolidated cost of revenue increased by $0.9 million in 2016. During the period, Interactive and Lottery cost of revenue increased by $12.2 million and $4.9 million, respectively, which was partially offset by a decrease in Gaming cost of revenue of $16.2 million.

Cost of services revenue increased by $2.8 million in 2016 due primarily to a $12.2 million, or 67.8%, increase in Interactive cost of services attributable to an increase in variable costs associated with the $31.8 million, or 61.6%, increase in Interactive revenue during the same period. The increase in Interactive cost of services was partially offset by a decrease in Gaming and Lottery cost of services of $8.7 million and $0.7 million, respectively, during the same period. Cost of product sales revenue decreased by $7.2 million in 2016, due primarily to decreases in variable costs associated with the reduction in Gaming revenue attributable to lower hardware and software and table products sales during the same period offset by an increased cost as a result of higher unit sales. Cost of instant games revenue increased by $5.3 million, or 7.7%, due primarily to increases in variable costs associated with higher instant games revenue which increased by $15.4 million during the current period.

SG&A

SG&A increased by $4.0 million in 2016 due primarily to increases in variable costs associated with higher consolidated revenue of $37.7 million during the current period, which were partially offset by benefits from cost synergies resulting from integration activities and $7.5 million of insurance proceeds in connection with the settlement of a legal matter.

R&D

R&D increased by $3.7 million in 2016 due primarily to our continued company-wide focus on innovation, primarily in game development.

Employee Termination and Restructuring

Employee termination and restructuring costs decreased by $1.0 million in 2016 to $4.2 million, due primarily to a reduction in employee termination costs, costs relating to the exiting of facilities and costs relating to existing contracts following the Bally acquisition and the WMS acquisition. For additional information regarding these charges, see Note 3 (Restructuring Plans).

D&A

D&A decreased by $29.1 million in 2016 due primarily to the non-recurrence of a $25.0 million impairment charge for certain trade name assets within our Gaming segment in the comparable prior year period.

Other Income and Expense

Interest expense decreased by $1.1 million in 2016 due primarily to a reduction in the principal amount outstanding during the period. For additional information regarding our indebtedness, see Note 11 (Long-Term and Other Debt) and Note 12 (Fair Value Measurements).

Earnings from equity investments increased by $4.7 million in 2016 due primarily to an increase in joint venture income of $3.1 million from LNS and $0.4 million from CSG. For additional information regarding our equity investments, see Note 10 (Equity Investments).

During the second quarter of 2016, we repurchased and cancelled an aggregate principal amount of $65.9 million of our 2020 Notes and 2021 Notes for $39.9 million in cash, which resulted in a $25.2 million gain on early extinguishment of debt inclusive of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt. We did not repurchase any of our notes during 2015.

Other income (expense), net increased by $6.0 million in 2016, due primarily to a $7.3 million reduction in losses on foreign currency translation in 2016 when compared to the same period last year.

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Income Tax Benefit

We recorded an income tax benefit of $19.6 million for the three months ended June 30, 2016, compared to an income tax benefit of $65.3 million for the three months ended June 30, 2015. The effective income tax rates for the three months ended June 30, 2016 and 2015 were 27.5% and 39.0%, respectively. The reduction in the income tax rate for the three months ended June 30, 2016, when compared to the prior year period, is primarily attributable to the impact of negative evidence related to the realizability of the deferred tax assets expected to be created by 2016 U.S. taxable losses.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company has remained in a three year cumulative loss in the U.S. federal tax jurisdiction. As of June 30, 2016, on the basis of this evaluation and considering the projected U.S. pre-tax losses for 2016 and the resulting net U.S. deferred tax asset position anticipated to occur during 2016, a valuation allowance has been contemplated as a component of the estimated annual effective tax rate in order to recognize only the portion of the benefit related to current year losses that is more likely than not to be realized.

Our income tax benefit may change from period to period based on, among other factors, the mix of earnings between U.S. and foreign jurisdictions and among foreign jurisdictions, the effect of any valuation allowance related to any of our deferred tax assets (or the release thereof), state and local taxes, specific events such as the settlement of income tax audits and changes in tax law and the effects of our global income tax strategies. See Note 21 (Income Taxes) in our 2015 Annual Report on Form 10-K for additional information regarding our foreign and domestic pre-tax income (loss), our foreign and domestic income tax benefit (expense), deferred tax assets and liabilities and the effect foreign taxes have on our overall effective tax rate.

Other Comprehensive Loss

The changes in other comprehensive loss were primarily related to foreign currency translation. The increase in unrealized foreign currency losses of $52.9 million during the three months ended June 30, 2016 was primarily attributable to volatility in the British Pound Sterling due to the Brexit vote, which is more fully described under Item 1. "Risk Factors" in this Quarterly Report on Form 10-Q.

See "—Business Segments Results" below for a more detailed explanation of the significant changes in our components of revenue within the individual segment results of operations.

BUSINESS SEGMENTS RESULTS

GAMING

Our Gaming business segment designs, develops, manufactures, markets and distributes a comprehensive portfolio of gaming products and services. We provide our Gaming portfolio of products and services to commercial casinos, Native American casinos, wide-area gaming operators such as LBOs, arcade and bingo operators in the U.K. and continental Europe, and government agencies and their affiliated operators. Our equity investments in RCN and ITL are part of our Gaming business segment.

We generate Gaming revenue from services and product sales. Our services revenue includes lease revenue earned from WAP, premium and daily-fee Participation gaming machines, other leased gaming machines (including VLTs and electronic table games), leased table products and services (including Shufflers), casino management technology solutions and systems, proprietary table game licensing and other services revenues. Our product sales revenue includes the sale of new and used gaming machines, electronic table games and VLTs, casino-management technology solutions and systems, table products, conversion kits (including game, hardware or operating system conversions) and spare parts.

Current Year Update

Our Gaming revenue decreased $7.8 million during the three months ended June 30, 2016 compared to the prior-year period, which included decreases in services and product sales revenue of $4.4 million and $3.4 million, respectively.

We believe that challenging market conditions impacted our Gaming results during the first half of 2016 and could continue to negatively impact our results of operations. These challenges included: (1) restrained investment in new gaming machines by our existing customers; (2) increased competition for new gaming machines, table products, gaming operations

41

and systems businesses; (3) political and economic conditions in Greece, resulting in a delay in the deployment of our VLTs; and (4) other economic and regulatory pressures that affect our business operations globally.

For the remainder of 2016, we expect to continue to face pricing pressure in our Gaming segment. We anticipate that replacement demand for gaming machines and constraints on capital spending by gaming operators will continue at current levels and that gaming machine demand will continue to be negatively impacted by the continued consolidation of casino and other gaming operators. We anticipate that demand for our gaming systems products and services will continue at current levels due to fewer large, multi-site installation opportunities, system replacements and new casino openings throughout 2016 and we have no multi-site installations scheduled for the remainder of 2016. We anticipate that our installed base of WAP, premium and daily-fee Participation gaming machines will begin to stabilize, benefiting from the expected release of a number of new games, including the scheduled launch of our new GameScape™ cabinet in the third quarter of 2016. The GameScape cabinet, a dedicated Participation platform, will feature a player-favorite branded WILLY WONKA'S WORLD OF WONKA™ game.

Results of Operations and Key Performance Indicators for Gaming

(in millions)	Three Months Ended   June 30,					Variance
	2016		2015			2016 vs. 2015
Revenue:
Services	$	236.0	$	240.4		$	(4.4	)	(1.8	)%
Product sales	205.9		209.3			(3.4		)	(1.6	)%
Total revenue	441.9		449.7			(7.8		)	(1.7	)%
Operating expenses:
Cost of services (1)	44.4		53.1			(8.7		)	(16.4	)%
Cost of product sales (1)	93.4		100.9			(7.5		)	(7.4	)%
Selling, general and administrative	61.2		71.2			(10.0		)	(14.0	)%
Research and development	38.5		41.1			(2.6		)	(6.3	)%
Employee termination and restructuring	3.4		2.7			0.7			25.9	%
Depreciation and amortization	154.3		181.5			(27.2		)	(15.0	)%
Operating income	$	46.7	$	(0.8	)	$	47.5		n/m
Earnings from equity investments	$	1.4	$	1.8		$	(0.4	)	(22.2	)%

(1) Exclusive of D&A.

nm = not meaningful

42

	Three Months Ended   June 30,				Variance
	2016		2015		2016 vs. 2015
Key Performance Indicators:
WAP, premium and daily-fee Participation units:
Installed base at period end	21,909		22,856		(947		)	(4.1	)%
Average daily revenue per unit	$	52.85	$	56.77	$	(3.92	)	(6.9	)%
Other Participation and leased units:
Installed base at period end	47,857		45,232		2,625			5.8	%
Average daily revenue per unit	$	15.95	$	15.46	$	0.49		3.2	%
Gaming machine sales:
U.S. and Canadian new unit shipments	4,678		4,001		677			16.9	%
International new unit shipments	2,990		2,804		186			6.6	%
Total new unit shipments	7,668		6,805		863			12.7	%
Average sales price per new unit	$	16,859	$	16,458	$	401		2.4	%

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

Revenue

Total revenue decreased by $7.8 million in 2016 due to a decrease in services revenue of $4.4 million and a decrease in product sales revenue of $3.4 million during the same period. This change in revenue includes an unfavorable foreign currency translation impact of $3.7 million.

Gaming operations revenue decreased by $3.8 million in 2016 primarily due to a 947 unit reduction in the installed base of WAP, premium and daily-fee Participation gaming machines. The average daily revenue per WAP, premium and daily-fee Participation units decreased by $3.92 per unit, or 6.9%, primarily reflecting a lower mix of higher-yielding WAP games. The ending installed base for other Participation and leased units as of June 30, 2016 increased by 2,625 units from June 30, 2015, reflecting higher placements of electronic table games and an increase in the number of leased units in the Caribbean and other international markets during the last three quarters. Average daily revenue for our other leased and Participation units increased 3.2% compared to the prior-year period. Several new premium licensed games were launched during the second quarter, including CHEERS™, CIRQUE DU SOLEIL KOOZA™, FRIENDS™ I'll Be There For You, MARGARITAVILLE™, MONOPOLY™ Money and TITANIC™ Heart of the Ocean.

Gaming machine sales increased by $15.7 million primarily due to a 863-unit increase in global shipments. During the three months ended June 30, 2016, total shipments of 7,668 new gaming machines included 4,678 units to U.S. and Canadian customers and 2,990 units to international customers. Contributing to the increase in shipments were increased sales of the Pro Series WAVE, TwinStar™ and Dualos cabinets. U.S. and Canadian shipments of 4,678 units encompassed 3,468 replacement units, inclusive of 431 Oregon VLT units (which completed the contract), and 1,210 units for new casino openings and expansions, including 740 Illinois VGT units. International shipments of 2,990 units included 125 units for new casino openings and expansions. The average sales price was $16,859 per unit, reflecting a greater mix of high-performing premium gaming machines, which offset lower-priced VLT and VGT units.

Gaming systems sales decreased by $18.1 million primarily due to fewer large, multi-site opportunities, system replacements and new casino openings in 2016. The decrease was partially offset by a 5% increase in systems maintenance revenue during the same period.

Table products revenue decreased by $1.6 million reflecting a slight decrease in sales of Shufflers and other utility products partially offset by ongoing growth in revenue from leased Shufflers, PTG and progressives. The installed base of Shufflers increased 6% and included the successful launch of the new blackjack Blazing 7s® Progressive.

Operating Income

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Operating income of $46.7 million increased by $47.5 million in 2016, which was primarily due to realized integration cost synergies largely implemented in prior periods coupled with a decline in integration costs and charges, including lower impairment charges, as well as lower SG&A expense, which benefitted from $7.5 million of insurance proceeds in connection with the settlement of a legal matter. These improvements were partially offset by a less profitable revenue mix, which was due to an increase in lower-margin gaming machine sales revenue and offset by a decline in higher-margin gaming systems revenue.

LOTTERY

The Lottery segment is primarily comprised of our systems-based services and product sales business and our instant games business. Our systems-based services and product sales business provides customized computer software, software support, equipment and data communication services, sports wagering systems and keno to lotteries. In the U.S., we typically provide the necessary point-of-sale terminals and equipment, software and maintenance services on a Participation basis under long-term contracts that typically have an initial term of at least five years. Internationally, we typically sell point-of-sale terminals and/or computer software to lottery authorities and may provide ongoing fee-based systems maintenance and software support services.

Our instant games business generates revenue from the manufacture and sale of instant games, as well as the provision of value-added services such as game design, sales and marketing support, specialty games and promotions, inventory management, warehousing, fulfillment services, as well as full instant game category management. In addition, we provide licensed games, promotional entertainment and internet-based marketing services to the lottery industry. These revenues are presented as instant games revenue in our Consolidated Statements of Operations and Comprehensive Loss.

Our equity investments in LNS, Northstar Illinois, Northstar New Jersey, CSG, Hellenic Lotteries and GLB are included in the Lottery segment.

Current Year Update

We were the exclusive instant game validation network provider to the CSL under an agreement that expired in January 2016 and was subsequently not renewed or extended. We have also seen a decline in the instant game printing revenue of CSG, our printing joint venture in China, which continues to service the CSL. We believe a decrease in retail sales is due in part to competition from other wagering products. We are actively seeking multiple opportunities to continue to provide value-added services to the CSL, as well as developing additional business initiatives to replace our revenue and profits previously generated by the CSL validation agreement. Until we are able to achieve these other opportunities and initiatives, or to the extent we are not able to do so, our operating results relating to our China lottery business will continue to be adversely affected.

In April, we signed a lottery instant games CSP agreement with the North Carolina lottery, which is anticipated to begin in March 2017 and has a term of eight years. The contract may be extended by the lottery for up to two additional years.

During the first quarter of 2016, we also launched innovative, multi-channel cross-over games, such as our Jackpot Party® instant game, for several customers. These new launches capitalize on our extensive proprietary games library and our expertise in mobile applications and second-chance promotional games and activities.

During the second quarter of 2016, we signed a new instant games agreement with the Belgium national lottery anticipated to begin in the second half of 2016. The one-year contract has extension options held by the customer for up to three additional years.

During the second quarter of 2016, we were awarded a new agreement by the Georgia Lottery that provided for a seven-year extension of the current instant games contract.         

For our Lottery services revenue, we believe that our U.S. lottery customers' retail sales is a key performance indicator. However, there may not always be a direct correlation between retail sales and our services revenue due to the terms of our contracts, the impact of changes in our customer contracts or other factors. Additionally, we believe the level of jackpots of the POWERBALL^® and MEGA MILLIONS^® multi-state draw games, and the number of drawings conducted before a jackpot is won, may have an impact on U.S. retail sales and, therefore, on our Lottery services revenue. Our Lottery services revenue can also be impacted by the retail sales of instant games where we provide instant game validation services, either on a standalone basis or as part of a lottery systems contract. Our Lottery product sales revenue primarily relates to sales of equipment to international customers that are not subject to long-term contracts and demand can be volatile between quarters.

We believe we will continue to face intense price-based competition in our Lottery business for the remainder of

44

2016. In the near term, we also expect to see an increase in the number of jurisdictions that seek to privatize or outsource lottery operations and to face strong competition from both traditional and new competitors with respect to these opportunities. In addition, we anticipate that lottery RFPs, specifically those for our PMA arrangements and certain of our international customers, could increasingly include terms that expose us to increased risk, such as requiring the guarantee of specific income thresholds or significant upfront payments.

We believe retail sales of instant games is a key performance indicator of our instant games revenue. However, there may not always be a direct correlation between retail sales and our instant games revenue due to various factors. These factors include, but are not limited to, the type of contract (e.g., Participation contracts versus price-per-unit contracts), the impact of changes to individual customer contracts, the performance of our licensed games and player loyalty business and foreign exchange volatility.

Based on third-party data, retail sales of our U.S. lottery customers' draw games increased 7.2% for the three months ended June 30, 2016 compared to the prior-year period. Retail sales of instant games in Italy decreased 0.8% for the three months ended June 30, 2016 compared to the prior-year period. Our U.S. customers' total instant games retail sales increased 4.1% for the three months ended June 30, 2016 compared to the prior-year period, driven by strong performance in those states where we provide instant game product management services.

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Results of Operations and Key Performance Indicators for Lottery

(in millions)	Three Months Ended   June 30,				Variance
	2016		2015		2016 vs. 2015
Revenue:
Services	$	44.1	$	45.9	$	(1.8	)	(3.9	)%
Product sales	8.9		8.8		0.1			1.1	%
Instant games	150.9		135.5		15.4			11.4	%
Total revenue	203.9		190.2		13.7			7.2	%
Operating expenses:
Cost of services (1)	26.8		27.5		(0.7		)	(2.5	)%
Cost of product sales (1)	7.3		7.0		0.3			4.3	%
Cost of instant games (1)	74.1		68.8		5.3			7.7	%
Selling, general and administrative	17.8		16.4		1.4			8.5	%
Research and development	2.6		1.5		1.1			73.3	%
Employee termination and restructuring	0.2		—		0.2			n/m
Depreciation and amortization	17.2		20.0		(2.8		)	(14.0	)%
Operating income	$	57.9	$	49.0	$	8.9		18.2	%
Earnings from equity investments	$	6.6	$	1.5	$	5.1		340.0	%
Key Performance Indicators:
Retail sales of instant games of U.S. instant game customers (2)(3)	$	11,064	$	10,625	$	439		4.1	%
Retail sales of U.S. lottery system customers (2)(4)	$	2,190	$	2,042	$	148		7.2	%
Italy retail sales of instant games (in Euros) (2)	€	2,200	€	2,217	€	(17	)	(0.8	)%

(1) Exclusive of D&A.

(2) Information provided by third-party lottery operators.

(3) U.S. instant games customers' retail sales include only sales of instant games.

(4) U.S. lottery systems customers' retail sales primarily include sales of draw games, keno and instant games validated by the relevant system.

nm = not meaningful

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

Revenue

Total revenue increased by $13.7 million in 2016, despite a $6.6 million unfavorable impact due to the expiration of the CSL validation contract and a $1.2 million unfavorable foreign currency impact.

Services revenue decreased by $1.8 million in 2016, reflecting lower international service revenue due to the cessation of the CSL validation contract in January 2016, partially offset by higher U.S. revenue, including increased retail sales of multi-state games. Product sales revenue was essentially flat compared to the prior year period. The $15.4 million increase in instant games revenue was primarily due to a 17.0% increase in U.S. instant game sales revenue with particular strength reflected in the growth of retail sales from customers with Participation contracts.

Operating Income

Operating income increased by $8.9 million in 2016, primarily reflecting the increased revenue, a more profitable revenue mix and lower D&A, partially offset by the expiration of the high-margin CSL validation contract and higher SG&A and R&D expense.

Earnings from equity investments

Earnings from equity investments increased $5.1 million in 2016 due primarily to increases in joint venture income of $3.1 million from LNS and $0.4 million from CSG during the period.

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INTERACTIVE

Within our Interactive segment, we generate revenue from the provision of Interactive gaming services available via desktop and mobile devices for social gaming, RMG and SG Universe™, the Company's interactive product suite for land-based casinos. This revenue is included in services revenue in our Consolidated Statements of Operations and Comprehensive Loss.

In our social gaming business, we generate revenue from the sale of virtual coins or chips, which players can use to play (i.e., spin in the case of slot games, bet in the case of poker) our WMS, Bally, Barcrest™ and SHFL® branded slot games, Dragonplay® branded slot and poker games or third-party branded slot games. In our RMG business, we provide game content to real-money online casino operators, primarily in Europe. We host the play of our game content on our centrally-located servers (often referred to as remote game servers) that are integrated with the online casino operators' websites. We typically earn a percentage of the operator's net gaming revenue generated by the games we host.

Our SG Universe service features multiple platforms, including Mobile Concierge, Play4Fun^TM and VenueBet which empower land-based casinos to increase engagement with their players at home, on-the-go, and during each visit to the casino floor. The Mobile Concierge platform provides casinos with the ability to customize marketing to players while giving players access to their loyalty reward credits and the ability to make on-property reservations. The Play4Fun network allows land-based casinos to provide their players with the ability to play free versions of web-based and mobile slot and table games. The VenueBet platform allows players to play their favorite casino games for real money on their mobile devices while anywhere on the casino property. Although we have limited installations at this time, we expect to increase placements as regulators amend their regulations to permit such wagering.

Current Year Update

In early 2016, our Hot ShotSocial Casino became one of the top 30 grossing apps on Facebook. We also expanded our RMG business with the launch of RMG products at fifteen additional online casino operators.

We believe that our Interactive platform business will continue to provide growth opportunities throughout the remainder of 2016. In addition, we anticipate that the percentage of Interactive revenue from mobile gaming will continue to grow.

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Results of Operations and Key Performance Indicators for Interactive    

(in millions)	Three Months Ended   June 30,				Variance
	2016		2015		2016 vs. 2015
Revenue:
Services	$	83.4	$	51.6	$	31.8		61.6	%
Total revenue	83.4		51.6		31.8			61.6	%
Operating expenses:
Cost of services (1)	30.2		18.0		12.2			67.8	%
Selling, general and administrative	26.8		15.2		11.6			76.3	%
Research and development	8.4		5.4		3.0			55.6	%
Employee termination and restructuring	0.5		0.3		0.2			66.7	%
Depreciation and amortization	3.8		5.4		(1.6		)	(29.6	)%
Operating income	$	13.7	$	7.3	$	6.4		87.7	%
Key Performance Indicators:
Social gaming:
Average MAU (2)	8.0		7.3		0.7			9.6	%
Average DAU (3)	2.4		2.2		0.2			9.1	%
ARPDAU (4)	$	0.31	$	0.21	$	0.10		47.6	%

(1) Exclusive of D&A.

(2) MAU = Monthly Active Users, a count of unique visitors to our sites during a month.

(3) DAU = Daily Active Users, a count of unique visitors to our sites during a day.

(4) ARPDAU =Average daily 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.

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

Revenue

The $31.8 million increase in services revenue was primarily due to an increase in social gaming revenue, reflecting the ongoing popularity of Jackpot Party®Social Casino and the success of the recently launched Quick Hit® Slots and Hot Shot® Social Casino social gaming apps. The Company also launched Blazing 7s® Hot Shot® Slots near the end of the first quarter of 2016, featuring simulated mechanical reel slot machines. Average DAU in the social gaming business grew by 9.1%. Interactive revenue growth also reflects $1.4 million growth in RMG revenue.

Operating Income

The $6.4 million increase in operating income reflects greater profitability as a result of revenue growth. SG&A expense and R&D expense increased as a result of higher marketing and player acquisition costs, coupled with new product development costs for which revenue has not yet been recognized.

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Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

CONSOLIDATED RESULTS

(in millions)	Six Months Ended June 30,						Variance
	2016			2015			2016 vs. 2015
Revenue:
Services	$	713.8		$	668.3		$	45.5		6.8	%
Product sales	412.4			417.5			(5.1		)	(1.2	)%
Instant games	285.0			264.4			20.6			7.8	%
Total revenue	1,411.2			1,350.2			61.0			4.5	%
Operating expenses:
Cost of services (1)	196.3			189.1			7.2			3.8	%
Cost of product sales (1)	195.1			205.8			(10.7		)	(5.2	)%
Cost of instant games (1)	141.1			135.8			5.3			3.9	%
Selling, general and administrative	287.2			286.8			0.4			0.1	%
Research and development	101.5			94.9			6.6			7.0	%
Employee termination and restructuring	6.9			13.4			(6.5		)	(48.5	)%
Depreciation and amortization	373.7			406.4			(32.7		)	(8.0	)%
Operating income	109.4			18.0			91.4			507.8	%
Other (expense) income:
Interest expense	(331.0		)	(330.7		)	(0.3		)	0.1	%
Earnings from equity investments	11.2			6.4			4.8			75.0	%
Gain on early extinguishment of debt	25.2			—			25.2			n/m
Other (expense) income, net	2.4			(9.9		)	12.3			(124.2	)%
Net loss before income taxes	(182.8		)	(316.2		)	133.4			(42.2	)%
Income tax benefit	38.8			127.6			(88.8		)	(69.6	)%
Net loss	$	(144.0	)	$	(188.6	)	$	44.6		(23.6	)%

(1) Exclusive of D&A.

nm = not meaningful

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

Revenue

Consolidated revenue increased by $61.0 million in 2016, despite the impact from $12.6 million of unfavorable currency translation. During the period, Lottery and Interactive revenues increased by $15.4 million and $57.5 million, respectively, and Gaming revenues decreased by $11.9 million.

Services revenue increased by $45.5 million in 2016 due primarily to a $57.5 million increase in Interactive revenue driven by growth in our social gaming business, the success of recently launched social gaming apps, and new customer agreements for our SG Universe and RMG products. This increase was partially offset by decreases of $9.7 million and $2.3 million in Gaming and Lottery services revenue, respectively.

Product sales revenue decreased by $5.1 million in 2016 due primarily to a $2.9 million decrease in Lottery revenue due to lower hardware sales to international customers, reflecting lower international lottery bid activity, and a decrease in Gaming revenue of $2.2 million due primarily to lower systems hardware and software sales, which was partially offset by an increase in machine sales primarily due to an 879 unit increase in global shipments.

Instant games revenue increased by $20.6 million in 2016 due primarily to increases in U.S. instant game sales, which included strong growth from lottery customers with Participation contracts and from lottery customers where we provide our CSP of strategic integrated services from game design through analytics and execution of support initiatives at retail.

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Cost of Revenue

Consolidated cost of revenue increased by $1.8 million in 2016. During the current period, Interactive and Lottery cost of revenue increased by $21.2 million and $1.1 million, respectively, which was partially offset by a decrease in Gaming cost of revenue of $20.5 million.

Cost of services revenue increased by $7.2 million in 2016 due primarily to a $21.2 million, or 61.3%, increase in Interactive cost of services attributable to an increase in variable costs associated with the $57.5 million, or 58.4%, increase in Interactive revenue during the same period. The increase in Interactive cost of services was partially offset by a decrease in Gaming and Lottery cost of services of $13.0 million and $1.0 million, respectively. Cost of product sales revenue decreased by $10.7 million in 2016, due primarily to decreases in variable costs of $7.5 million associated with the reduction in Gaming revenue attributable to lower hardware and software and table products sales and $3.2 million associated with the reduction in Lottery revenue attributable to lower hardware sales to international customers during the current period. Cost of instant games revenue increased $5.3 million, or 3.9%, due primarily to increases in variable costs associated with higher instant games revenue which increased by $20.6 million during the current period.

SG&A

SG&A increased by $0.4 million in 2016 due primarily to increases in variable costs associated with higher consolidated revenue of $61.0 million during the period, which were partially offset by benefits from cost synergies resulting from integration activities and $7.5 million of insurance proceeds in connection with the settlement of a legal matter.

R&D

R&D increased by $6.6 million in 2016 due primarily to our continued company-wide focus on innovation primarily in game development.

Employee Termination and Restructuring

Employee termination and restructuring costs decreased by $6.5 million in 2016 to $6.9 million, due primarily to a reduction in employee termination costs, costs relating to the exiting of facilities and costs relating to existing contracts following the Bally acquisition and the WMS acquisition. For additional information regarding these charges, see Note 3 (Restructuring Plans).

D&A

D&A decreased by $32.7 million in 2016 due primarily to the non-recurrence of a $25.0 million impairment charge for certain trade name assets within our Gaming segment in the comparable prior year period.

Other Income and Expense

Interest expense remained flat in 2016 when compared to the prior year period. For additional information regarding our indebtedness, see Note 11 (Long-Term and Other Debt) and Note 12 (Fair Value Measurements).

Earnings from equity investments increased by $4.8 million in 2016 due primarily to an increase in joint venture income of $3.1 million from LNS and $0.8 million from CSG. For additional information regarding our equity investments, see Note 10 (Equity Investments).

During the second quarter of 2016, we repurchased and cancelled an aggregate principal amount of $65.9 million of our 2020 Notes and 2021 Notes for $39.9 million in cash. The transaction resulted in a $25.2 million gain on early extinguishment of debt which was inclusive of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt. We did not repurchase any of our notes during 2015.

Other income (expense), net increased by $12.3 million in 2016, due primarily to a $14.4 million reduction in losses on foreign currency translation in 2016 when compared to the same period last year.

Income Tax Benefit

We recorded an income tax benefit of $38.8 million for the six months ended June 30, 2016, compared to an income tax benefit of $127.6 million for the six months ended June 30, 2015. The effective income tax rates for the six months ended June 30, 2016 and 2015 were 21.2% and 40.4%, respectively. The reduction in income tax rate for the six months ended June

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30, 2016, when compared to the same period last year, is primarily attributable to the impact of negative evidence related to the realizability of the deferred tax assets expected to be created by 2016 U.S. taxable losses.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company has remained in a three year cumulative loss in the U.S. federal tax jurisdiction. As of June 30, 2016, on the basis of this evaluation and considering the projected U.S. pre-tax losses for 2016 and the resulting net U.S. deferred tax asset position anticipated to occur during 2016, a valuation allowance has been contemplated as a component of the estimated annual effective tax rate in order to recognize only the portion of the benefit related to current year losses that is more likely than not to be realized.

Our income tax benefit may change from period to period based on, among other factors, the mix of earnings between U.S. and foreign jurisdictions and among foreign jurisdictions, the effect of any valuation allowance related to any of our deferred tax assets (or the release thereof), state and local taxes, specific events such as the settlement of income tax audits and changes in tax law and the effects of our global income tax strategies. See Note 21 (Income Taxes) in our 2015 Annual Report on Form 10-K for additional information regarding our foreign and domestic pre-tax income (loss), our foreign and domestic income tax benefit (expense), deferred tax assets and liabilities and the effect foreign taxes have on our overall effective tax rate.

Other Comprehensive Loss

The changes in other comprehensive loss were primarily related to foreign currency translation. The decrease in unrealized foreign currency losses of $51.7 million during the six months ended June 30, 2016 is primarily attributable to the strengthening of the Euro against the USD partially offset by volatility in the British Pound Sterling due to the Brexit vote, which is more fully described under "Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q.

See "—Business Segments Results" below for a more detailed explanation of the significant changes in our components of revenue within the individual segment results of operations.

GAMING

Results of Operations and Key Performance Indicators for Gaming

(in millions)	Six Months Ended June 30,				Variance
	2016		2015		2016 vs. 2015
Revenue:
Services	$	468.6	$	478.3	$	(9.7	)	(2.0	)%
Product sales	395.0		397.2		(2.2		)	(0.6	)%
Total revenue	863.6		875.5		(11.9		)	(1.4	)%
Operating expenses:
Cost of services (1)	85.6		98.6		(13.0		)	(13.2	)%
Cost of product sales (1)	181.2		188.7		(7.5		)	(4.0	)%
Selling, general and administrative	129.1		145.4		(16.3		)	(11.2	)%
Research and development	76.7		80.9		(4.2		)	(5.2	)%
Employee termination and restructuring	5.0		6.9		(1.9		)	(27.5	)%
Depreciation and amortization	295.9		324.8		(28.9		)	(8.9	)%
Operating income	$	90.1	$	30.2	$	59.9		198.3	%
Earnings from equity investments	$	1.4	$	1.7	$	(0.3	)	(17.6	)%

(1) Exclusive of D&A.

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	Six Months Ended June 30,				Variance
	2016		2015		2016 vs. 2015
Key Performance Indicators:
WAP, premium and daily-fee Participation units:
Installed base at period end	21,909		22,856		(947		)	(4.1	)%
Average daily revenue per unit	$	52.90	$	55.99	$	(3.09	)	(5.5	)%
Other Participation and leased units:
Installed base at period end	47,857		45,232		2,625			5.8	%
Average daily revenue per unit	$	15.66	$	15.88	$	(0.22	)	(1.4	)%
Gaming machine sales:
U.S. and Canadian new unit shipments	9,043		8,381		662			7.9	%
International new unit shipments	5,373		5,156		217			4.2	%
Total new unit shipments	14,416		13,537		879			6.5	%
Average sales price per new unit	$	16,719	$	16,226	$	493		3.0	%

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

Revenue

Total revenue decreased by $11.9 million in 2016 primarily due to a decrease in services revenue of $9.7 million and a decrease in product sales revenue of $2.2 million. This change in revenue includes an unfavorable foreign currency translation impact of $7.7 million.

Gaming Operations revenue decreased by $12.8 million in 2016 due primarily to a 947 unit reduction in the installed base of WAP, premium and daily-fee Participation gaming machines. The average daily revenue per WAP, premium and daily-fee Participation units decreased $3.09 per unit, or 5.5%, primarily reflecting a lower mix of higher-yielding WAP games. The ending installed base for other Participation and leased units as of June 30, 2016 increased by 2,625 units from June 30, 2015, reflecting higher placements of electronic table games and an increase in the number of leased units in the Caribbean and other international markets during the last three quarters. Average daily revenue for our other leased and Participation units decreased 1.4% compared to the prior-year period.

Gaming machine sales increased by $22.9 million in 2016 due primarily to an 879 unit increase in global shipments. During the six months ended June 30, 2016, total shipments included 14,416 new units combined with a 3.0% increase in the average sales price per new unit to $16,719, reflecting a mix of high-performing premium gaming machines sold during the period.

Gaming systems revenue decreased $25.4 million in 2016 primarily due to fewer large, multi-site opportunities, system replacements and new casino openings compared to the prior year period.

Table products revenue increased by $3.4 million reflecting a small increase in sales of Shufflers and other utility products and by ongoing growth in revenue from leased Shufflers, PTG and progressives. The installed base of Shufflers increased 6% and included the successful launch of the new blackjack Blazing 7s Progressive.

Operating Income

Operating income of $90.1 million increased by $59.9 million in 2016, which was primarily due to realized integration cost synergies largely implemented in prior periods coupled with a decline in integration costs and charges, $7.5 million of insurance proceeds in connection with the settlement of a legal matter, lower SG&A expense and lower D&A when compared to the prior year period. These improvements were partially offset by a less profitable revenue mix due to an increase in lower-margin gaming machine sales revenue and a decline in higher-margin gaming systems revenue.

LOTTERY

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Results of Operations and Key Performance Indicators for Lottery

(in millions)	Six Months Ended June 30,				Variance
	2016		2015		2016 vs. 2015
Revenue:
Services	$	89.2	$	91.5	$	(2.3	)	(2.5	)%
Product sales	17.4		20.3		(2.9		)	(14.3	)%
Instant games	285.0		264.4		20.6			7.8	%
Total revenue	391.6		376.2		15.4			4.1	%
Operating expenses:
Cost of services (1)	54.9		55.9		(1.0		)	(1.8	)%
Cost of product sales (1)	13.9		17.1		(3.2		)	(18.7	)%
Cost of instant games (1)	141.1		135.8		5.3			3.9	%
Selling, general and administrative	34.3		33.5		0.8			2.4	%
Research and development	5.2		3.1		2.1			67.7	%
Employee termination and restructuring	1.3		0.2		1.1			550.0	%
Depreciation and amortization	35.0		41.3		(6.3		)	(15.3	)%
Operating income	$	105.9	$	89.3	$	16.6		18.6	%
Earnings from equity investments	$	9.8	$	4.7	$	5.1		108.5	%
Key Performance Indicators:
Retail sales of instant games of U.S. instant game customers (2)(3)	$	22,395	$	21,098	$	1,297		6.1	%
Retail sales of U.S. lottery system customers (2)(4)	$	4,484	$	4,115	$	369		9.0	%
Italy retail sales of instant games (in Euros) (2)	€	4,555	€	4,519	€	36		0.8	%

(1) Exclusive of D&A.

(2) Information provided by third-party lottery operators.

(3) U.S. instant games customers' retail sales include only sales of instant games.

(4) U.S. lottery systems customers' retail sales primarily include sales of draw games, keno and instant games validated by the relevant system.

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

Revenue

Total revenue increased by $15.4 million in 2016, despite a $11.7 million unfavorable impact due to the expiration of the CSL validation contract and a $4.2 million unfavorable foreign currency impact.

Services revenue decreased by $2.3 million in 2016, reflecting lower international service revenue due to the cessation of the CSL validation contract in January 2016, partially offset by higher U.S. revenue, including increased retail sales of multi-state games, including sales leading up to the record $1.6 billion POWERBALL jackpot in January 2016. The $2.9 million decrease in product sales revenue was primarily due to lower international hardware sales, reflecting lower bid activity compared to the prior year. The $20.6 million increase in instant games revenue was primarily due to an increase in U.S. instant game sales revenue with particular strength at customers with Participation contracts and from customers where we provided our CSP for strategic integrated services from game design through analytics and execution of support initiatives at retail.

Operating Income

Operating income increased by $16.6 million in 2016, reflecting a more profitable revenue mix and lower D&A, partially offset by the expiration of the high-margin CSL validation contract and higher R&D expense.

Earnings from equity investments

Earnings from equity investments increased $5.1 million in 2016 due primarily to increases in joint venture income of $3.1 million from LNS and $0.8 million from CSG for the period.

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INTERACTIVE

Results of Operations and Key Performance Indicators for Interactive

(in millions)	Six Months Ended June 30,				Variance
	2016		2015		2016 vs. 2015
Revenue:
Services	$	156.0	$	98.5	$	57.5		58.4	%
Total revenue	156.0		98.5		57.5			58.4	%
Operating expenses:
Cost of services (1)	55.8		34.6		21.2			61.3	%
Selling, general and administrative	51.3		30.3		21.0			69.3	%
Research and development	15.7		10.9		4.8			44.0	%
Employee termination and restructuring	0.5		1.0		(0.5		)	(50.0	)%
Depreciation and amortization	7.5		10.5		(3.0		)	(28.6	)%
Operating income	$	25.2	$	11.2	$	14.0		125.0	%
Key Performance Indicators:
Social gaming:
Average MAU (2)	9.1		7.5		1.6			21.3	%
Average DAU (3)	2.5		2.2		0.3			13.6	%
ARPDAU (4)	$	0.29	$	0.20	$	0.09		45.0	%

(1) Exclusive of D&A.

(2) MAU = Monthly Active Users, a count of unique visitors to our sites during a month.

(3) DAU = Daily Active Users, a count of unique visitors to our sites during a day.

(4) ARPDAU =Average daily 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.

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

Revenue

The $57.5 million increase in services revenue was primarily due to an increase in social gaming revenue, reflecting the ongoing popularity of Jackpot Party®Social Casino and the success of the recently launched Quick Hit® Slots and Hot Shot® Social Casino social gaming apps. The Company also launched Blazing 7s® Hot Shot® Slots near the end of the first quarter of 2016, which features simulated mechanical reel slot machines. Average DAU in the social gaming business grew by 13.6%. Interactive revenue growth also reflects $3.2 million growth in RMG revenue.

Operating Income

The $14.0 million increase in operating income reflects greater profitability as a result of revenue growth. SG&A expense and R&D expense increased as a result of higher marketing and player acquisition costs, coupled with new product development costs for which revenue has not yet been recognized.

RECENTLY ISSUED ACCOUNTING GUIDANCE

For a description of recently issued accounting pronouncements, see Note 1 (Description of the Business and Summary of Significant Accounting Policies).  

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CRITICAL ACCOUNTING ESTIMATES

For a description of our policies regarding our critical accounting estimates, see "Critical Accounting Estimates" in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2015 Annual Report on Form 10-K.

There have been no significant changes in our critical accounting estimate policies or the application of those policies to our consolidated financial statements from those presented in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2015 Annual Report on Form 10-K.

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LIQUIDITY, CAPITAL RESOURCES AND WORKING CAPITAL

Sources of Liquidity

As of June 30, 2016, our principal sources of liquidity, other than cash flows provided by operating activities, were cash and cash equivalents and amounts available under our revolving credit facility discussed below under "Credit Agreement and Other Debt."

As of June 30, 2016, our available cash and cash equivalents and borrowing capacity totaled $558.8 million, including cash and cash equivalents of $101.4 million and availability of $457.4 million under our revolving credit facility, compared to $583.0 million as of December 31, 2015, which included cash and cash equivalents of $128.7 million and availability of $454.3 million under our revolving credit facility. We had $80.0 million in borrowings outstanding and $55.2 million of letters of credit outstanding under our revolving credit facility as of June 30, 2016, which reduces our capacity to borrow under our revolving credit facility. The amount of our available cash and cash equivalents fluctuates principally based on borrowings or repayments under our credit facilities, investments, acquisitions and changes in our working capital position. The borrowing capacity under our revolving credit facility will depend on the amount of outstanding borrowings and letters of credit issued and on us remaining in compliance with the covenants under our credit agreement, including a maintenance covenant based on consolidated net first lien leverage. We were in compliance with the covenants under our credit agreement as of June 30, 2016.

We believe that our cash flow from operations, available cash and cash equivalents and available borrowing capacity under our existing or anticipated financing arrangements will be sufficient to meet our liquidity needs for the foreseeable future; however, there can be no assurance that this will be the case. For example, our Lottery contracts are periodically subject to renewal or re-bid and there can be no assurance that we will be successful in sustaining our cash flow from operations if our contracts are not renewed or replaced or are renewed on less favorable terms, or if we are unable to enter into new contracts. We believe that substantially all cash held outside the U.S. is free from legal encumbrances or similar restrictions that would prevent it from being available to meet our global liquidity needs.

Total cash held by our foreign subsidiaries was $68.5 million as of June 30, 2016. To the extent that a portion of our foreign cash was required to meet liquidity needs in the U.S. (which we do not currently anticipate), we might incur a tax liability to repatriate it, the timing and amount of which would depend on a variety of factors. A significant amount of the cash held by our foreign subsidiaries as of June 30, 2016 could be transferred to the U.S. as intercompany loan repayments or tax-free basis reductions.

Our gaming Participation and lottery systems businesses generally require significant upfront capital expenditures. In connection with a renewal or bid of a gaming machine or lottery systems contract, a customer may seek to obtain new equipment or impose new service requirements, which may require additional capital expenditures in order to retain or win the contract. Our ability to generate revenue and to continue to procure new contracts will depend on, among other things, our then present liquidity levels or our ability to obtain additional financing on commercially reasonable terms. If we do not have adequate liquidity or are unable to obtain financing for these upfront cash payments on favorable terms or at all, we may not be able to bid on certain contracts, which could restrict our ability to grow and have a material adverse effect on our results of operations, cash flows and financial condition. Our ability to make payments on and to refinance our indebtedness and other obligations depends on our ability to generate cash in the future. We may also, from time to time, repurchase, or otherwise retire or refinance our debt, through our subsidiaries or otherwise. Such activities, if any, will depend on prevailing market conditions, contractual restrictions and other factors, and the amounts involved may or may not be material. If we need to refinance all or part of our indebtedness at or before maturity, there can be no assurance that we will be able to obtain new financing or to refinance any of our indebtedness on commercially reasonable terms or at all. During the second quarter of 2016, we repurchased and cancelled an aggregate principal amount of $65.9 million of our 2020 Notes and 2021 Notes for $39.9 million in cash, which resulted in a $25.2 million gain on early extinguishment of debt inclusive of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt. We did not repurchase any of our notes during 2015. In the event we pursue significant acquisitions or other expansion opportunities, conduct significant repurchases of our outstanding securities, or refinance or repay existing debt, we may need to raise additional capital either through the public or private issuance of equity or debt securities or through additional borrowings under our existing financing arrangements, which sources of funds may not necessarily be available on terms acceptable to us, if at all.   

In addition, lottery customers in the U.S. generally require service providers to provide performance bonds in connection with the relevant contract. As of June 30, 2016, our outstanding performance bonds totaled $196.3 million. Our ability to obtain performance bonds on commercially reasonable terms is subject to our financial condition and to prevailing market conditions, which may be impacted by economic and political events. Although we have not experienced difficulty in

56

obtaining such bonds to date, there can be no assurance that we will continue to be able to obtain performance bonds on commercially reasonable terms, or at all.

Cash Flow Summary

	Six Months Ended June 30,						Variance
	2016			2015			2016 vs. 2015
Net cash provided by operating activities	$	191.9		$	114.4		$	77.5
Net cash used in investing activities	(107.8		)	(98.1		)	(9.7		)
Net cash used in financing activities	(109.5		)	(54.5		)	(55.0		)
Effect of exchange rates on cash and cash equivalents	(1.9		)	(4.5		)	2.6
Decrease in cash and cash equivalents	$	(27.3	)	$	(42.7	)	$	15.4

Cash flows from operating activities

Net cash provided by operating activities for the six months ended June 30, 2016 increased $77.5 million over the prior year period. The increase in net cash provided by operating activities was primarily due to the increase in incremental net earnings after adjusting for non-cash items of $77.0 million and a $0.5 million increase in working capital and other items.

Cash flows from investing activities

The increase in net cash used in investing activities of $9.7 million for the six months ended June 30, 2016 was primarily due to a decrease of $12.7 million in distributions of capital on equity investments which was partially offset by $3.1 million in proceeds from asset sales. In addition, during the six months ended June 30, 2016, we decreased our capital expenditures by $10.2 million which was offset by a decrease in restricted cash of $4.8 million and a decrease in changes in other assets and liabilities and other of $5.5 million, when compared to the same period last year.

Cash flows from financing activities

The increase in net cash used in financing activities of $55.0 million for the six months ended June 30, 2016 was primarily due to a net increase in payments on debt of $43.9 million. The increase was primarily due to the repurchase of $65.9 million in aggregate principal face value of our 2020 Notes and 2021 Notes for $39.9 million, resulting in a $25.2 million gain on early extinguishment of debt. In addition, during the six months ended June 30, 2016, we increased our payments on license obligations by $6.3 million and made $5.0 million more in net payments on our revolving credit facility, when compared to the same period last year.

Credit Agreement and Other Debt

As of June 30, 2016, the aggregate principal amount of our outstanding debt of $8,296.3 million was comprised of our revolving credit facility of $80.0 million, our term B-1 loans in the amount of $2,242.5 million and our term B-2 loans in the amount of $1,970.0 million outstanding under our credit agreement, $250.0 million in aggregate principal amount of our 2018 Notes, $243.5 million in aggregate principal amount of our 2020 Notes, $340.6 million in aggregate principal amount of our 2021 Notes, $950.0 million in aggregate principal amount of our 2022 Secured Notes, $2,200.0 million in aggregate principal amount of our 2022 Unsecured Notes and $19.7 million in capital leases related to our U.K. gaming operations. We use interest rate swap derivatives to diversify our debt portfolio between fixed and variable rate instruments. For additional information regarding our interest rate risk and interest rate hedging instruments, see "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of our 2015 Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

As of June 30, 2016, we did not have any significant off-balance sheet arrangements.

Contractual Obligations

Other than the amendment and extension of terms of one of our existing license agreements, which is more fully described in Note 8 (Intangible Assets, net and Goodwill) and the repurchase and cancellation of $56.5 million and $9.4 million of principal amount of our 2020 Notes and 2021 Notes, respectively, which is more fully described in Note 11 (Long-Term and Other Debt), there have been no material changes to our contractual obligations disclosed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity, Capital Resources and Working Capital — Contractual Obligations" included in our 2015 Annual Report on Form 10-K.

57

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to the disclosure under "Item 7A. Quantitative and Qualitative Disclosures about Market Risk" included in our 2015 Annual Report on Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to the material weakness in our internal control over financial reporting ("ICFR") previously disclosed in our 2015 Annual Report on Form 10-K as filed on February 29, 2016 (the "2015 Form 10-K"), our disclosure controls and procedures were not effective as of June 30, 2016. Although we have completed our remediation measures designed to correct the material weakness as of June 30, 2016, we are unable to conclude that the remediation was successful until further testing can be performed, as described below. The material weakness, which is described more fully in Item 9A of our 2015 Form 10-K, is as follows: the Company's review control did not operate at a sufficient level of precision to identify the improper inclusion of deferred taxes in the fair value modeling used in our step two goodwill impairment test for our SG gaming reporting unit. Notwithstanding the material weakness identified by our management, our Chief Executive Officer and our Chief Financial Officer have concluded, based on their knowledge, that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present in all material respects the Company's financial condition, results of operations and cash flows as of and for the periods presented in this report, in conformity with accounting principles generally accepted in the United States.

Changes in Internal Control over Financial Reporting

As previously disclosed, we identified a material weakness in our ICFR, pertaining to the step two goodwill impairment testing for our SG gaming reporting unit that we performed in accordance with ASC 350, Intangibles- Goodwill and Other. As of June 30, 2016 we have completed remediation measures designed to correct this material weakness as follows:

Reviewed the processes and controls related to the fair value modeling in the step two goodwill impairment assessment.

Designed and documented a new review control with enhanced precision related to the review of the fair value modeling of the step two goodwill impairment assessment.

Conducted a training program for relevant personnel and developed specific review procedures for the step two goodwill impairment assessment.

We believe these actions have meaningfully strengthened our ICFR, but we will not be able to conclude whether the material weakness has been remediated until sufficient time has elapsed to provide evidence that the enhanced controls are operating effectively in connection with our routine annual goodwill impairment testing to be performed in accordance with ASC 350, or if events occur or circumstances change with respect to one or more of our goodwill reporting units that necessitate an interim impairment test prior to the performance of our next annual test. We will not perform our next routine annual goodwill impairment testing until October 2016.

Other than the completion of the remediation steps described above, there were no changes in our ICFR during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our ICFR.

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, see Note 16 (Litigation).

58

Item 1A. Risk Factors

Except for the risk factor set forth below, there have been no material changes in our risk factors from those disclosed under "Item 1A. Risk Factors" included in our 2015 Annual Report on Form 10-K.

The affirmative vote in the U.K. to withdraw from the EU may adversely affect our business.

On June 23, 2016, the U.K. held a referendum in which voters approved an exit from the EU, commonly

referred to as "Brexit". As a result of the referendum, it is expected that the British government will begin negotiating

the terms of the U.K.'s future relationship with the EU. The Brexit vote may result in regulatory uncertainty

throughout the region and could adversely affect business activity, restrict the movement of capital and the mobility of

personnel, and otherwise impair political stability and economic conditions in the U.K., the EU and elsewhere. Any of

these developments could have a material adverse effect on business activity in the U.K. or the EU. Given that we

conduct a substantial portion of our business in continental Europe and the U.K. any of these developments could have

a material adverse effect on our business prospects, results of operations, cash flows and financial condition.

The uncertainty concerning the timing and terms of the Brexit could have a negative impact on the growth of

the U.K. and EU economies and cause greater volatility in the British Pound Sterling, the Euro and other currencies.

Changes in currency exchange rates may reduce the reported value of our revenues outside the U.S. The announcement

of Brexit has caused significant volatility in global stock markets and currency exchange rate fluctuations, including

the strengthening of the U.S. dollar against foreign currencies.

Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K.

determines which EU laws to replace or replicate. Additionally, Brexit could allow the U.K. to significantly alter its

regulations affecting our industry, which may result in significant costs and potentially lost opportunities for us. It may

also be time-consuming and expensive for us to alter our internal operations in order to comply with new regulations.

Changes to U.K. border and immigration policy could likewise occur as a result of Brexit, affecting our ability to

recruit and retain employees from outside the U.K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There was no stock repurchase activity during the three months ended June 30, 2016, other than 170,452 shares acquired from employees to satisfy the withholding taxes associated with the vesting of RSUs during this period at an average price paid per share of $10.29.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number	Description
31.1	Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (†)
31.2	Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (†)
32.1	Certification of the Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
32.2	Certification of the Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
99.1	Terms and Conditions of Equity Awards to Key Employees under the Scientific Games Corporation 2003 Incentive Compensation Plan.*(†)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Label Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

(†) Filed herewith.

*Management contracts and compensation plans and arrangements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

		SCIENTIFIC GAMES CORPORATION
		(Registrant)
		By:	/s/ Michael A. Quartieri
		Name:	Michael A. Quartieri
		Title:	Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
		By:	/s/ Jeffrey B. Johnson
		Name:	Jeffrey B. Johnson
		Title:	Vice President, Finance, and Chief Accounting Officer
Dated:	August 4, 2016

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EX-31.1

Exhibit 31.1

Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, M. Gavin Isaacs, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Scientific Games Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2016

/s/ M. Gavin Isaacs

M. Gavin Isaacs

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael A. Quartieri, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Scientific Games Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2016

/s/ Michael A. Quartieri

Michael A. Quartieri

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Scientific Games Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, M. Gavin Isaacs, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ M. Gavin Isaacs

M. Gavin Isaacs

Chief Executive Officer

August 4, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Scientific Games Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,

Michael A. Quartieri, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Michael A. Quartieri

Michael A. Quartieri

Chief Financial Officer

August 4, 2016

EX-99.1

Exhibit 99.1

SCIENTIFIC GAMES CORPORATION

2003 INCENTIVE COMPENSATION PLAN

AS AMENDED AND RESTATED JUNE 10, 2015

TERMS AND CONDITIONS OF EQUITY AWARDS TO KEY EMPLOYEES

THIS AGREEMENT, made as of the [DAY] day of [MONTH], 20[YEAR], between SCIENTIFIC GAMES CORPORATION (the “Company”) and [PARTICIPANT NAME] (the “Participant”).

WHEREAS, the Compensation Committee (the “Committee”) administers the Scientific Games Corporation 2003 Incentive Compensation Plan, as amended from time to time (the “Plan”);

WHEREAS, the Participant is eligible to receive awards under the Plan in connection with the Participant’s employment with the Company (or any of its applicable affiliates) (“Employment”); and

WHEREAS, the Committee may from time to time approve awards for the Participant in such amounts and at such times as the Committee may determine in its sole discretion, which awards shall be subject to the terms and conditions of the Plan and this Agreement, as such terms and conditions may be amended or supplemented from time to time by the Committee;

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties agree as follows:

1.Grants. Pursuant and subject to the terms and conditions set forth herein and in the Plan, the Participant may be granted the following types of awards (“Awards”) with respect to the Company’s Class A Common Stock (“Common Stock”), pursuant to an Award notice, which will state the type of Award, the number of shares subject to the Award and any other terms determined by the Committee in its sole discretion:

(a)Stock Options (“Options”) -- representing a right to purchase shares of the Common Stock at an exercise price per share that is equal to or greater than the fair market value of a share of Common Stock on the date of grant. The Committee will generally set the exercise price of Options at the fair market value of the Common Stock on the date of grant. The Options do not become exercisable until satisfaction of an applicable vesting period. The Options are “Non-Qualified Stock Options” (i.e., they do not constitute “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (“Code”)).

(b)Restricted Stock Units (“Units”) -- representing a right to receive shares of Common Stock following satisfaction of an applicable vesting period subject to the conditions, restrictions and limitations set forth in Section 6(d) of the Plan, this Agreement and the Award notice.

(c)Performance Conditioned Restricted Stock Units (“Performance Units”) -- representing a right to receive shares of the Common Stock following satisfaction of an applicable vesting period and subject to performance requirements established by the Committee at the time of grant, which may be based on Company or individual performance criteria for an annual or other applicable performance period, and subject to such other conditions, restrictions and limitations set forth in Section 7 of the Plan, this Agreement and the Award notice.

2.Incorporation of Plan by Reference. All terms, conditions and restrictions of the Plan are incorporated in, and made a part of, this Agreement as if stated herein. If there is any conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as interpreted by the Committee, shall govern. Except as otherwise provided herein, all capitalized terms used in this Agreement shall have the meaning given to such terms in the Plan. In addition, if there is any conflict between this Agreement and the terms of any written employment contract between the Participant and the Company (or any of its applicable affiliates), the terms of the written employment contract will govern (except to the extent the terms set forth in this Agreement or the Award notice expressly apply notwithstanding anything to the contrary set forth in such employment contract), subject to the mandatory terms of the Plan.

3.Restriction on Transfer of Awards. Awards under the Plan may not be sold, assigned, transferred, pledged, hypothecated, margined, or otherwise encumbered or disposed of by the Participant, except for transfers upon the death of the Participant.

4.     Vesting Schedule for Awards. Unless otherwise set forth in the applicable Award notice, an Award under the Plan will be granted with a four-year ratable vesting schedule such that 25% of the total Award will vest on each of the first four anniversaries of

the grant date. In the case of Performance Units, vesting will also be conditioned on satisfaction of performance criteria established by the Committee. With respect to such Performance Units, the Committee will determine whether the performance criteria applicable to an Award have been satisfied within 90 days following the end of the applicable performance period(s) (but not later than the March 15 following the year in which the performance period ended). Notwithstanding anything contained to the contrary in this Agreement (or in any prior award agreement), in any Award notice or in any other document (including any employment contract), in the event that the Participant’s Employment is terminated other than as a result of death or “Disability” (as defined below) prior to the Committee’s determination as to the satisfaction of any performance criteria to which any Award of Performance Units is subject, such Performance Units will neither vest nor accelerate unless and until a determination is or has been made by the Committee that such criteria have been satisfied, at which time such Performance Units may vest or accelerate to the extent provided in, and in accordance with, any applicable contract and the Plan (it being understood and agreed that nothing in this Agreement shall grant any right to any such acceleration or vesting upon any such termination). For the avoidance of doubt, in the event that the criteria are determined not to have been satisfied, such Award shall immediately lapse and be forfeited.

5.     Method of Exercise of Vested Options. Awards of Options, to the extent vested, shall be exercisable in whole or in part by the Participant delivering notice to the Plan Administrator (as defined below) in accordance with the terms of the Award. Payment for shares of Common Stock purchased upon the exercise of an Option, and any applicable withholding taxes, shall be made on the effective date of such exercise through any of the following means: (i) in cash, by certified check, bank cashier’s check or wire transfer; (ii) through a brokered exercise with the Plan Administrator under which a portion of the proceeds from a sale are withheld for such exercise price and applicable taxes; or (iii) if permitted by the Company at the time of exercise, by surrendering shares of Common Stock. The notification to the Plan Administrator shall be made in accordance with its procedures. The shares of Common Stock purchased upon the exercise of an Option shall be delivered as soon as practicable following exercise in accordance with the procedures established by the Company or the Plan Administrator from time to time. Options may only be exercised by the Participant or, if the Participant is incapacitated, by the Participant's guardian or legal representative; provided that an exercise by a guardian or legal representative shall not be effective unless and until the Company has received evidence satisfactory to it as to the authority of such guardian or legal representative.

6.     Distribution of Vested Units and Performance Units. As soon as administratively practicable after each applicable vesting date of an Award of Units or Performance Units (generally within three business days and in no event more than 15 business days), the Company will deliver to the Participant a number of shares of Common Stock equal to the number of Units or Performance Units that vested as of an applicable vesting date less the number of shares, if any, withheld in satisfaction of applicable withholding taxes as discussed in Section 7(b).

7.     Taxes. To the extent required by applicable federal, state, local or foreign law, the Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to an Award. The Company shall not be required to issue shares until such obligations are satisfied. The methods permitted by the Company for the payment of taxes are as follows:

(a)Options. In the case of Options, the acceptable methods for making payment for taxes shall be the same as those for payment of the exercise price for Options as discussed in Section 5 above. If shares of Common Stock are used to satisfy the applicable taxes, the taxes must be calculated at the Participant’s minimum applicable tax rates.

(b)Units and Performance Units. In the case of Units and Performance Units, unless otherwise determined by the Committee, the Company will withhold from any shares deliverable upon the vesting of Units or Performance Units a number of shares sufficient to satisfy the minimum applicable withholding taxes; provided, however, that, unless otherwise determined by the Committee, the Participant will be permitted to elect, in accordance with procedures adopted from time to time by the Company, to pay the tax withholding amount in cash, in which case no shares will be withheld and the Participant will be required to pay the amount of the taxes in full by the vesting date, in cash, by certified check, bank cashier’s check or wire transfer.

8.     Expiration of Awards; Effect of Termination.

(a)Units and Performance Units. Subject to the provisions of the Plan and this Agreement, except to the extent otherwise specifically provided under the terms of any Award notice with respect to Units or Performance Units (as the case may be):

(i)in the event the Employment of the Participant terminates for any reason (other than by reason of death or Disability (as defined below)), all unvested Units and Performance Units shall be immediately forfeited; or

(ii)in the event the Employment of the Participant terminates by reason of death or Disability, all unvested Units or Performance Units shall fully vest and become non-forfeitable as of the date of death or the date of such termination, as the case may be, and, in all other respects, all such Units or Performance Units shall be governed by the plans and programs and the agreements and other documents pursuant to which such Units or Performance Units were granted.

(b)Options. The Options granted by the Company will expire at a date specified in the Award notice, which shall be not later than the tenth anniversary of the grant date (the “Scheduled Expiration Date”). Subject to the provisions of the Plan and this Agreement, except to the extent otherwise specifically provided under the terms of any Award notice with respect to Options:

(i)in the event the Employment of the Participant terminates for any reason (other than by reason of death or Disability), (A) all unvested Options shall immediately expire on the date of termination and (B) the portion of any Options that vested prior to such termination (other than a termination for “Cause” (as defined below), in which event all such vested Options shall be immediately forfeited) shall remain exercisable until the earlier of three (3) months after such termination and the Scheduled Expiration Date and, in all other respects, shall be governed by the plans and programs and the agreements and other documents pursuant to which such Options were granted; or

(ii)in the event the Employment of the Participant terminates by reason of death or Disability, all unvested Options shall fully vest and become non-forfeitable as of the date of death or the date of such termination, as the case may be, and such Options (together with the portion of any Options that vested prior to such death or termination) shall remain exercisable by the Participant (or, in the case of death, Participant’s executor or administrator or Beneficiary (as defined below)) until the earlier of (A) the first anniversary of such death or termination and (B) the Scheduled Expiration Date and, in all other respects, all such Options shall be governed by the plans and programs and the agreements and other documents pursuant to which such Options were granted.

For purposes of this Agreement, “Cause” shall mean any of the following: (i) the Participant’s breach of the terms of any employment or other agreement with any of the Company and its subsidiaries and affiliates (collectively, “SG”); (ii) the Participant’s failure substantially to perform his or her duties; (iii) the Participant’s material act or omission that is or may be injurious to the SG, monetarily or otherwise; (iv) the Participant’s material violation of the SG’s policies, including the Code of Conduct; and (v) the Participant’s commission of a felony, any other crime involving moral turpitude or any act involving dishonesty or fraud. Any rights SG may have hereunder in respect of the events giving rise to Cause shall be in addition to the rights SG may have under any other agreement with the Participant or at law or in equity. Any determination of whether the Participant is (or is deemed to have been) terminated for Cause shall be made by the Committee in its discretion. The Participant’s termination for Cause shall be effective as of the date of the occurrence of the event giving rise to Cause, regardless of when the determination of Cause is made.

For purposes of this Agreement, “Beneficiary” means the person, persons, trust, or trusts which have been designated by a Participant in his or her most recent written beneficiary designation filed with the Company to receive the benefits specified under the Plan upon such Participant's death. If, upon a Participant's death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means a person, persons, trust, or trusts entitled by will or the laws of descent and distribution to receive such benefits. A Beneficiary or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award agreement applicable to such Participant and to any additional terms and conditions deemed necessary or appropriate by the Committee.

(c) Definition of Disability. For purposes of this Agreement, “Disability” shall mean the Participant’s becoming eligible to receive benefits under any SG-sponsored long-term disability program under which the Participant is eligible for coverage, determined in accordance with Section 409A of the Code.

(d)    Last Day to Exercise an Option. If an Option’s expiration date determined under this Section 8 falls on a day which is not a business day, then the last day to exercise the Option shall be the last business day before such date.

9.     Other Terms.

(a)No Shareholder Rights. Until shares of Common Stock covered by an Award are issued to the Participant in connection with the exercise of an Option or the vesting of Units or Performance Units, the Participant shall have no voting, dividend or other rights as a stockholder of the Company for any purpose.

(b)Consideration for Grant. Participant shall not be required to pay any cash consideration for the grant of an Award. In the case of grants of Units and Performance Units, as to which cash consideration at the time of grant or vesting shall not be required, the Participant's Employment from the grant date to the date of vesting shall be deemed to be consideration for the grant, which services have a value at least equal to the aggregate par value of the shares being newly issued in connection with the grant. The foregoing notwithstanding, an Award may be granted in exchange for the Participant’s surrender of another Award or other right to compensation, if and to the extent permitted by the Committee.

(c)Insider Trading Policy Applicable. Participant acknowledges that sales of shares received with respect to Awards will be subject to the SG's policies regulating trading by employees.

10. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party hereto, upon any breach or default of any party under this Agreement, shall impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in a writing signed by such party and shall be effective only to the extent specifically set forth in such writing.

11.     Integration. This Agreement, the Plan and the other documents, including without limitation, the Award notice, which form a part of this Agreement, contain the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof (except for any other agreement related to non-competition, non-solicitation, proprietary or confidential information, inventions or similar agreements) other than those expressly set forth herein. This Agreement, including, without limitation, the Plan, supersedes all prior agreements and understandings (except for any other agreement related to non-competition, non-solicitation, proprietary or confidential information, inventions or similar agreements) between the parties with respect to its subject matter. The obligations under this Agreement shall supplement and be in addition to (and not replace or otherwise modify or affect) any restrictive covenant or other obligations set forth in any employment agreement, non-competition, non-solicitation, proprietary or confidential information, inventions or similar agreement and this Agreement shall remain in full force and effect even if any employment agreement, non-competition, non-solicitation, proprietary or confidential information, inventions or similar agreement, or any section thereof, is determined to be void, illegal, or otherwise unenforceable. If, notwithstanding the foregoing, obligations related to non-competition, non-solicitation, proprietary or confidential information and inventions in another agreement with Participant are deemed to conflict with provisions in this Agreement, then the obligation that provides the greatest protection to the Company’s legitimate protectable interests shall be the controlling obligation irrespective of the sequence in which the obligations were entered into by Participant.

12.     Governing Law; Venue/Forum. In order to promote uniformity and predictability of treatment concerning matters related to the Awards by the Company, the laws of the State of Delaware where the Company is incorporated will govern the Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties, regardless of any conflicts of law principles of Delaware or any other state. Any legal action arising from or related to this Agreement shall be litigated in a state or federal court of competent jurisdiction located in Las Vegas, Nevada. The parties expressly consent to the personal jurisdiction of the aforementioned courts over them and waive any all objections to the foregoing venue/forum selection (including, without limitation, any objection based on amount of contact with the selected venue, or the cost, convenience or location of relevant persons).

13.     Restrictive Covenants Condition. The Participant hereby acknowledges and agrees that the receipt of Awards, including any right to exercise an Option, receive the shares of Common Stock following a vesting date or retains the profit from the sale of shares of Common Stock subject to an Award, is conditioned upon Participant’s compliance with the restrictive covenants in Section 14-17 of this Agreement.

14. Noncompetition; Non-solicitation.

(a)Participant acknowledges the highly competitive nature of the business of SG and that Participant’s access to SG’s confidential records and proprietary information and ability to develop relationships with SG’s customers and employees renders Participant special and unique within SG’s industry. Participant hereby agrees that during his or her Employment, and during the Covered Time (as defined below), Participant, alone or with others, will not, directly or indirectly, engage (as owner, investor, partner, stockholder, employer, employee, consultant, advisor, director or otherwise) in any Competing Business.  For purposes of this Section 14, “Competing Business” shall mean any business or operations (i) (A) involving the design, development, manufacture, production, sale, lease, license, provision, operation, or management (as the case may be) of (I) instant lottery tickets or games or any related marketing, warehouse, distribution, category management or other services or programs; (II) lottery-related terminals or vending machines (whether clerk-operated, self-service or otherwise); (III) gaming machines, terminals or devices (including video or reel spinning slot machines, video poker machines, video lottery terminals and fixed odds betting terminals); (IV) lottery, video gaming (including server-based gaming), sports betting or other wagering or gaming systems, regardless of whether such systems are land-based, internet-based or mobile (including control and monitoring systems, local or wide-area progressive systems and redemption systems); (V) lottery-, real money gaming- or social gaming-related proprietary or licensed content (including themes, entertainment and brands), platforms, websites and loyalty and customer relationship management programs regardless of whether any of the foregoing are land-based, internet-based or mobile-based; (VI) social casino games or websites or mobile phone or tablet applications (or similar known, or hereafter existing, technologies) featuring social casino games or any related marketing, distribution, or other services or programs; (VII) interactive casino gaming products or services, including interactive casino-game themed games and platforms for websites or mobile phone or tablet applications (or similar known, or hereafter existing, technologies);(VIII) gaming utility products (including shufflers, card-reading shoes, deck checkers and roulette chip sorters), table games (including live, simulated, online, social gaming, interactive and electronic) and related products and services; (IX) slot accounting, casino management, casino marketing, player tracking, lottery, video lottery, bingo or similar gaming- or casino-related systems and related peripheral hardware, software and services; (X) prepaid cellular or other phone cards; or (XI) ancillary products (including equipment, hardware, software, marketing materials, chairs and signage) or services (including field service, maintenance and support) related to any of the foregoing under sub-clauses (I) through (X) above; or (B) in which SG is then or was within the previous 12 months engaged, or in which SG, to Participant’s knowledge, contemplates to engage in during Participant’s Employment or the Covered Time, (ii) in which Participant is or was engaged or involved (whether in a supervisory capacity or otherwise) on behalf of SG or with respect to which Participant has obtained proprietary or confidential information, and (iii) which is or was, to Participant’s knowledge, conducted or contemplated to be conducted anywhere in the United States or in any other geographic area where SG does business during Participant’s Employment or the Covered Time. 

(b)Participant hereby agrees that, during his or her Employment and for twelve months after the date of Participant’s termination from Employment, whether voluntary or involuntary and regardless of the reason for termination, (the “Termination Date”), Participant shall not, directly or indirectly:  (i) solicit or attempt to induce any of the employees, agents, consultants or representatives of SG to terminate his, her, or its relationship with SG; (ii) solicit or attempt to induce any of the employees, agents, consultants or representatives

of SG to become employees, agents, consultants or representatives of any other person or entity; or (iii) hire any person who, to Participant’s actual knowledge, is, or was within 180 days prior to such hiring, an employee of SG.

(c)Participant hereby agrees that, during his or her Employment and for twelve months after Participant’s Termination Date, Participant shall not, without SG’s prior written consent, directly or indirectly, whether for Participant’s own account or for the account of any other person, firm, corporation or business organization, solicit or perform services of a type offered by SG, for any customer, partner, vendor, distributor, with whom Participant worked with on behalf of SG or about which Participant received confidential information during his or her Employment. Participant shall also not solicit or provide services of a type offered by SG to any prospective customer, partner, vendor, or distributor to whom SG made a proposal within the last 12 months prior to the Termination Date in which the Participant participated or about which the Participant received confidential information. Participant further agrees not to solicit or attempt to induce any partner, customer, vendor or distributor of SG to curtail or cancel any business with SG. Participant acknowledges and agrees that the restrictions contained in this subsection 14(c) are reasonable and necessary to protect SG’s legitimate interests in its customer, partner, vendor, and distributor relationships, goodwill, and confidential information.

(d)Participant hereby agrees that, during his or her Employment and for twelve months after Participant’s Termination Date, upon the earlier of Participant (i) negotiating with any Competitor (as defined below) concerning possible employment with the Competitor, (ii) responding to (other than for the purpose of declining) an offer of employment from a Competitor, or (iii) becoming employed by a Competitor, (A) Participant will provide copies of this Agreement to the Competitor, and (B) in the case of any circumstance described in (i), (ii), or (iii) above occurring during Participant’s Employment or during the twelve months after Participant’s Termination Date, Participant will promptly provide notice to the Company of such circumstances.  Participant further agrees that the Company may provide notice to a Competitor of Participant’s obligations under this Agreement.  For purposes of this Agreement, “Competitor” shall mean any person or entity (other than SG) that engages, directly or indirectly, in the United States or anywhere else SG does business in any Competing Business.

(e)Participant understands that the restrictions in this Section 14 may limit Participant’s ability to earn a livelihood in a business similar to the business of SG but nevertheless agrees and acknowledges that Participant willingly entered into this Agreement and agreed that the consideration provided under this Agreement is sufficient to justify such restrictions and that Participant agreed to be bound by these restrictions in exchange for such consideration. In consideration thereof and in light of Participant’s education, skills and abilities, Participant hereby agrees that Participant will not assert in any forum that such restrictions prevent Participant from earning a living or otherwise should be held void or unenforceable.

(f) For purposes of this Section 14, “Covered Time” shall mean six months immediately following the Participant’s Termination Date and, if SG in its sole discretion elects, for up to an additional six months if SG, in its sole discretion, to pay Participant on regular paydays an amount equal to Participant’s base rate of pay at the time of termination, less standard withholdings, during this additional period of non-competition. SG shall give Participant written notice of the election to extend the non-competition period at least thirty days before the expiration of the initial six-month term. The written notice of election shall be mailed to the last address SG had on record for the Participant.

15. Proprietary Information; Inventions.

(a)Participant hereby acknowledges that, during the course of his or her Employment, Participant necessarily will have (and during any affiliation with SG prior to his or her Employment Participant may have had) access to and make use of proprietary information and confidential records of SG.  Participant covenants that Participant shall not during his or her Employment or at any time thereafter, directly or indirectly, use for his or her own purpose or for the benefit of any person or entity other than SG, nor otherwise disclose to any person or entity, any such proprietary information, unless and to the extent such disclosure has been authorized in writing by the Company or is otherwise required by law.  The term “proprietary information” means:  (i) the software products, programs, applications, and processes utilized by SG; (ii) the name or address of any customer or vendor of SG or any information concerning the transactions or relations of any customer or vendor of SG or with SG; (iii) any information concerning any product, technology, or procedure employed by SG but not generally known to its customers or vendors or competitors, or under development by or being tested by SG but not at the time offered generally to customers or vendors; (iv) any information relating to SG’s computer software, computer systems, pricing or marketing methods, sales margins, cost of goods, cost of material, capital structure, operating results, borrowing arrangements or business plans; (v) any information identified as confidential or proprietary in any line of business engaged in by SG; (vi) any information that, to Participant’s actual knowledge, SG ordinarily maintains as confidential or proprietary; (vii) any business plans, budgets, advertising or marketing plans; (viii) any information contained in any of SG’s written or oral policies and procedures or manuals; (ix) any information belonging to customers, vendors or any other person or entity which SG, to Participant’s actual knowledge, has agreed to hold in confidence; and (x) all written, graphic, electronic data and other material containing any of the foregoing.  Participant acknowledges that information that is not novel or copyrighted or patented may nonetheless be proprietary information.  The term “proprietary information” shall not include information generally known or available to the public or information that becomes available to Participant on an unrestricted, non-confidential basis from a source other than SG or any of its directors, officers, employees, agents or other representatives (without breach of any obligation of confidentiality of which Participant has knowledge, after reasonable inquiry, at the time of the relevant disclosure by Participant).  Notwithstanding the foregoing and Section 16, Participant may disclose or use proprietary information or confidential records solely to the extent (A) such disclosure or use may be required or appropriate in the performance of Participant’s Employment, (B) required to do so by a court of law, by any governmental agency having supervisory authority over the business of SG or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order Participant to divulge, disclose or make accessible such information (provided that in such case Participant shall first give the Company prompt written notice of any such legal requirement, disclose no more information than is so required and cooperate fully with all efforts by

SG to obtain a protective order or similar confidentiality treatment for such information), (C) such information or records becomes generally known to the public without Participant’s violation of this Agreement, or (D) disclosed to Participant’s spouse, attorney or personal tax and financial advisors to the extent reasonably necessary to advance Participant’s tax, financial and other personal planning (each an “Exempt Person”); provided, however, that any disclosure or use of any proprietary information or confidential records by an Exempt Person shall be deemed to be a breach of this Section 15 or Section 16 by Participant. Furthermore, nothing in this subsection 15(a) and nothing in this Agreement or any other agreement between Participant and SG shall in any way prohibit Participant from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by the Company of any reporting described in clause (i).

(b)    Participant hereby agrees that all processes, technologies and inventions (collectively, “Inventions”), including new contributions, improvements, ideas and discoveries, whether patentable or not, conceived, developed, invented or made by Participant during his or her Employment (and during any affiliation with SG prior to Participant’s Employment) shall belong to the SG, provided that such Inventions grew out of Participant’s work with SG, are related in any manner to the business (commercial or experimental) of SG or are conceived or made on SG’s time or with the use of SG’s facilities or materials.  Participant further agrees to: (i) promptly disclose such Inventions to the Company; (ii) assign to the SG, without additional compensation, all patent and other rights to such Inventions for the United States and foreign countries; (iii) sign all papers necessary to carry out the foregoing; and (iv) give testimony in support of Participant’s Inventions.  If any Invention is described in a patent application or is disclosed to third parties, directly or indirectly, by Participant within two (2) years after the termination of Participant’s Employment, it is to be presumed that the Invention was conceived or made during Participant’s Employment.  Participant agrees that Participant will not assert any rights to any Invention as having been made or acquired by him or her prior to the date of this Agreement, except for Inventions, if any, disclosed by Participant in writing in connection with his or her execution of this Agreement.

16. Confidentiality and Surrender of Records. Participant hereby agrees that Participant shall not, during his or her Employment or at any time thereafter (irrespective of the circumstances under which his or her Employment terminates), except to the extent required by law, directly or indirectly publish, make known or in any fashion disclose or retain any confidential records to, or permit any inspection or copying of confidential records by, any person or entity other than in the course of such person’s or entity’s employment or retention by SG, and Participant further agrees to deliver promptly to the Company, any of the same following termination of his or her Employment for any reason or upon request by SG.  For purposes hereof, “confidential records” means those portions of correspondence, memoranda, files, manuals, books, lists, financial, operating or marketing records, magnetic tape, or electronic or other media or equipment of any kind in Participant’s possession or under Participant’s control or accessible to Participant which contain any proprietary information.  All confidential records shall be and remain the sole property of the Company during Participant’s Employment and thereafter.

17. Non-disparagement.  Participant hereby agrees that Participant shall not, during his or her Employment and thereafter, disparage in any material respect SG, any of their respective businesses, any of their respective officers, directors or employees, or the reputation of any of the foregoing persons or entities, whether orally, in writing, or otherwise, directly or by implication in communication with any person, including, but not limited to, customers, partners, vendors, distributors, or independent contractors of SG or agents with whom SG does business.  Notwithstanding the foregoing, nothing in this Agreement shall preclude Participant from making truthful statements that are required by applicable law, regulation or legal process.

18. No Other Obligations.  Participant hereby represents that Participant is not precluded or limited in his or her ability to undertake or perform his or her Employment by any contract, agreement or restrictive covenant.  Participant covenants that Participant shall not employ the trade secrets or proprietary information of any other person in connection with his or her Employment without such person’s authorization.

19. Enforcement.  Participant acknowledges and agrees that, by virtue of his or her position, Employment and access to and use of confidential records and proprietary information, any violation by Participant of any of the obligations contained in this Agreement would cause SG immediate, substantial and irreparable injury for which it has no adequate remedy at law.  Accordingly, Participant hereby agrees and consents to the entry of an injunction or other equitable relief by a court of competent jurisdiction restraining any violation or threatened violation of any obligation contained in this Agreement in addition to any other remedies.  Participant waives posting of any bond otherwise necessary to secure such injunction or other equitable relief or to the extent such a bond is required by law it shall be limited to an amount of $1,000.  Rights and remedies provided for in this Agreement, including but not limited to injunctive relief, monetary damages, and all remedies contemplated by the Plan (including but not limited to termination or forfeiture of Awards), are cumulative and shall be in addition to rights and remedies otherwise available to the parties hereunder or under any other agreement or applicable law.

20. Data Privacy. For Participants in certain jurisdictions, the data privacy laws of such jurisdictions may require the Participant’s consent to the use, disclosure and transfer to the Company and its Plan Administrator (as defined below) in the United States of certain personal information necessary to administer the Plan and any Awards the Participants may receive. Accordingly, if applicable, the Participant hereby acknowledges and agrees that the Participant’s receipt of any Awards, including any right to exercise an Option, receive the shares of Common Stock following vesting of an award of Units or Performance Units or retain the profit from the sale of shares of Common Stock subject to an Award, is conditioned upon Participant’s consent to the use, disclosure and transfer to the Company and its Plan Administrator in the United States of such personal information.

21. Plan Administrator. The Company has retained Fidelity Stock Plan Services, LLC as a third-party administrator to

assist in the administration and management of the Plan (the “Plan Administrator” or “Fidelity”). A listing of all Awards may be viewed through the Plan Administrator’s website at www.NetBenefits.comonce the Participant has established an account with the Plan Administrator. The Plan Administrator shall handle the processing of Option exercises and vesting and settlement of Units and Performance Units. The Company reserves the right to replace Fidelity as the Plan Administrator at any time in the Company’s sole discretion.

22. Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy of the Plan. The Participant hereby acknowledges that all decisions, determinations and interpretations of the Committee in respect of the Plan, this Agreement and the Awards shall be final and conclusive.

23. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

24. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant or and the Participant’s beneficiaries, executors, administrators and the person(s) to whom the Award may be transferred by will or the laws of descent or distribution.

25. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.

[remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has signed this Agreement on his or her own behalf, thereby representing that he or she has carefully read and understands this Agreement and the Plan as of the day and year first written above.

SCIENTIFIC GAMES CORPORATION

By: __________________________________

PARTICIPANT:

_______________________________________

[PARTICIPANT NAME]

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 02, 2016
Entity Information [Line Items]
Entity Registrant Name	SCIENTIFIC GAMES CORP
Entity Central Index Key	0000750004
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A common stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		87,523,669
Class B Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		0

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenue:
Services		$ 363.5	$ 337.9	$ 713.8	$ 668.3
Product sales		214.8	218.1	412.4	417.5
Instant games		150.9	135.5	285.0	264.4
Total revenue		729.2	691.5	1,411.2	1,350.2
Operating expenses:
Cost of services	[1]	101.4	98.6	196.3	189.1
Cost of product sales	[1]	100.7	107.9	195.1	205.8
Cost of instant games	[1]	74.1	68.8	141.1	135.8
Selling, general and administrative		144.9	140.9	287.2	286.8
Research and development		51.7	48.0	101.5	94.9
Employee termination and restructuring		4.2	5.2	6.9	13.4
Depreciation and amortization		193.1	222.2	373.7	406.4
Operating (loss) income		59.1	(0.1)	109.4	18.0
Other (expense) income:
Interest expense		(165.3)	(166.4)	(331.0)	(330.7)
Earnings from equity investments		8.0	3.3	11.2	6.4
Gain on early extinguishment of debt		25.2	0.0	25.2	0.0
Other income (expense), net		1.7	(4.3)	2.4	(9.9)
Total other expense, net		(130.4)	(167.4)	(292.2)	(334.2)
Net loss before income taxes		(71.3)	(167.5)	(182.8)	(316.2)
Income tax benefit		19.6	65.3	38.8	127.6
Net loss		(51.7)	(102.2)	(144.0)	(188.6)
Other comprehensive (loss) income:
Foreign currency translation income (loss)		(35.1)	17.8	(36.7)	(88.4)
Pension and post-retirement gain (loss), net of tax		0.3	(0.7)	0.5	0.2
Derivative financial instruments unrealized gain, net of tax		4.6	6.0	3.6	1.1
Other comprehensive (loss) income		(30.2)	23.1	(32.6)	(87.1)
Comprehensive loss		$ (81.9)	$ (79.1)	$ (176.6)	$ (275.7)
Basic and diluted net loss per share:
Basic (in USD per share)		$ (0.59)	$ (1.19)	$ (1.66)	$ (2.20)
Diluted (in USD per share)		$ (0.59)	$ (1.19)	$ (1.66)	$ (2.20)
Weighted average number of shares used in per share calculations:
Weighted average basic (in shares)		87,300,000.00	85,900,000	86,900,000	85,600,000
Weighted average diluted (in shares)		87,300,000.00	85,900,000	86,900,000	85,600,000

[1] Exclusive of D&A.

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 101.4	$ 128.7
Restricted cash	24.5	20.2
Accounts receivable, net	501.3	487.1
Notes receivable, net	140.0	167.7
Inventories	249.0	248.5
Prepaid expenses, deposits and other current assets	120.9	123.3
Total current assets	1,137.1	1,175.5
Long-term restricted cash	17.4	17.9
Long-term notes receivable, net	43.8	51.3
Property and equipment, net	695.5	794.0
Goodwill	2,992.5	3,013.7
Intangible assets, net	1,891.9	1,920.0
Software, net	443.2	485.9
Equity investments	199.8	228.5
Other assets	43.9	45.4
Total assets	7,465.1	7,732.2
Current liabilities:
Current portion of long-term debt	49.7	50.3
Accounts payable	178.6	159.8
Accrued liabilities	417.1	443.8
Total current liabilities	645.4	653.9
Deferred income taxes	173.9	228.2
Other long-term liabilities	245.1	188.9
Long-term debt, excluding current portion	8,067.6	8,156.7
Total liabilities	9,132.0	9,227.7
Commitments and contingencies (see Note 16)
Stockholders' deficit:
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 104.7 and 103.7 shares issued and 87.5 and 86.5 shares outstanding, respectively	1.0	1.0
Additional paid-in capital	771.1	765.9
Accumulated loss	(2,009.0)	(1,865.0)
Treasury stock, at cost, 17.2 shares	(175.2)	(175.2)
Accumulated other comprehensive loss	(254.8)	(222.2)
Total stockholders' deficit	(1,666.9)	(1,495.5)
Total liabilities and stockholders' (deficit) equity	$ 7,465.1	$ 7,732.2

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Class A common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Class A common stock, shares authorized (in shares)	199,300,000.0	199,300,000.0
Class A common stock, shares issued (in shares)	104,700,000	103,700,000
Class A common stock, shares outstanding (in shares)	87,500,000	86,500,000
Treasury stock, at cost, shares held (in shares)	17,200,000	17,200,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net loss	$ (144.0)	$ (188.6)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	373.7	406.4
Change in deferred income taxes	(57.0)	(145.7)
Stock-based compensation	12.5	12.1
Non-cash interest expense	20.2	19.0
Earnings from equity investments, net	(11.2)	(6.4)
Distributed earnings from equity investments	16.3	19.9
Gain on early extinguishment of debt	(25.2)	0.0
Changes in current assets and liabilities:
Accounts and notes receivable, net	14.4	23.7
Inventories	(3.4)	18.4
Other current assets and liabilities	15.2	10.8
Accounts payable	7.7	(9.4)
Accrued liabilities	(26.1)	(44.7)
Other, net	(1.2)	(1.1)
Net cash provided by operating activities	191.9	114.4
Cash flows from investing activities:
Property and equipment expenditures	(8.7)	(7.8)
Gaming and lottery operations expenditures	(76.8)	(103.7)
Intangible assets and software expenditures	(47.1)	(31.3)
Proceeds from asset sales	3.1	0.0
Changes in other assets and liabilities and other	3.0	8.5
Restricted cash	(3.8)	1.0
Distributions of capital on equity investments	22.5	35.2
Net cash used in investing activities	(107.8)	(98.1)
Cash flows from financing activities:
Borrowings under revolving credit facility	160.0	110.0
Repayments under revolving credit facility	(175.0)	(120.0)
Payments on long-term debt	(25.2)	(26.2)
Repurchase of notes	(39.9)	0.0
Payments on license obligations	(25.0)	(18.7)
Contingent earnout payments	0.0	(0.5)
(Redemptions) issuance of common stock under stock-based compensation plans	(4.4)	0.9
Net cash provided by (used in) financing activities	(109.5)	(54.5)
Effect of exchange rate changes on cash and cash equivalents	(1.9)	(4.5)
Decrease in cash and cash equivalents	(27.3)	(42.7)
Cash and cash equivalents, beginning of period	128.7	171.8
Cash and cash equivalents, end of period	$ 101.4	$ 129.1

XML

Description of the Business and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business and Summary of Significant Accounting Policies

Description of the Business and Summary of Significant Accounting Policies

Description of the Business

We are a leading developer of technology‑based products and services and associated content for the worldwide gaming, lottery and interactive gaming industries. Our portfolio includes gaming machines and game content, casino management systems, table game products and services, instant and draw‑based lottery games, server‑based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs, interactive gaming and social casino solutions. We also gain access to technologies and pursue global expansion through strategic acquisitions and equity investments. We report our operations in three business segments—Gaming, Lottery and Interactive.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with SEC and U.S. GAAP requirements. All monetary values set forth in these financial statements are in United States dollars ("USD" or "$") unless otherwise stated herein. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations and comprehensive loss and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K. Interim results of operations are not necessarily indicative of results of operations for a full year.

Significant Accounting Policies

There have been no changes to our significant accounting policies described in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2015 Annual Report on Form 10-K.

New Accounting Guidance - Recently Adopted

In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory. ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted this guidance prospectively at the beginning of the second quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations, or cash flows.

In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The amended guidance simplifies the accounting for equity investments and eliminates the requirements in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this guidance prospectively at the beginning of the first quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations or cash flows. 

New Accounting Guidance - Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers. The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue from contracts with customers. The guidance (including subsequent amendments) supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with earlier adoption permitted for fiscal years beginning after December 15, 2016. We are currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact and timing of adopting this guidance.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amended guidance is intended to simplify several aspects of accounting for share-based payment award transactions, including income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 has separate transition guidance for each element of the new standard and is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance.

We do not expect that any other recently issued accounting guidance will have a significant effect on our financial statements.

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Business Segments

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business Segments

Business Segments

We report our operations in three business segments—Gaming, Lottery and Interactive—representing our different products and services. These are our reportable segments under ASC 280, Segment Reporting. Each of our business segments is managed by a separate executive who reports to our chief executive officer (who is our "chief operating decision maker" as defined under applicable accounting standards). Our three business segments represent separate standalone businesses based on the industries in which we operate. Our Gaming business segment generally sells gaming machines, VLTs and conversion kits and parts, leases or otherwise provides gaming machines, server-based systems and content, sells and supports casino-management systems-based software and hardware, and sells and leases PTG content and Shufflers, including automatic card shufflers, deck checkers and roulette chip sorters, to commercial, tribal and governmental gaming operators. Our Lottery business segment provides instant lottery games and related value-added services, as well as licensed brands utilized in instant lottery games and loyalty and reward services. Our Lottery business segment also provides systems products and services generally comprised of point-of-sale terminals, a central system, customized computer software, data communication services, support and/or related equipment. Our Interactive business segment provides social gaming and RMG services to online casino operators through our remote game servers. Additional discussion regarding the products and services from which each reportable business segment derives its revenue is included in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2015 Annual Report on Form 10-K.

The following tables present revenue, cost of revenue, SG&A, R&D, employee termination and restructuring, D&A, operating income and earnings from equity investments for the three and six months ended June 30,2016 and 2015, respectively, by business segment. Certain unallocated corporate amounts consisted primarily of general and administrative expenses, other income (expense) and D&A.

	Three Months Ended June 30, 2016
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	236.0	$	44.1	$	83.4	$	363.5
Product sales	205.9		8.9		—		214.8
Instant games	—		150.9		—		150.9
Total revenue	441.9		203.9		83.4		729.2
Operating expenses:
Cost of services (1)	44.4		26.8		30.2		101.4
Cost of product sales (1)	93.4		7.3		—		100.7
Cost of instant games (1)	—		74.1		—		74.1
Selling, general and administrative	61.2		17.8		26.8		105.8
Research and development	38.5		2.6		8.4		49.5
Employee termination and restructuring	3.4		0.2		0.5		4.1
Depreciation and amortization	154.3		17.2		3.8		175.3
Segment operating income	$	46.7	$	57.9	$	13.7	$	118.3
Unallocated corporate costs							(59.2		)
Consolidated operating income							$	59.1
Earnings from equity investments	$	1.4	$	6.6	$	—	$	8.0

(1) Exclusive of D&A.

	Three Months Ended June 30, 2015
	Gaming			Lottery		Interactive		Total
Revenue:
Services	$	240.4		$	45.9	$	51.6	$	337.9
Product sales	209.3			8.8		—		218.1
Instant games	—			135.5		—		135.5
Total revenue	449.7			190.2		51.6		691.5
Operating expenses:
Cost of services (1)	53.1			27.5		18.0		98.6
Cost of product sales (1)	100.9			7.0		—		107.9
Cost of instant games (1)	—			68.8		—		68.8
Selling, general and administrative	71.2			16.4		15.2		102.8
Research and development	41.1			1.5		5.4		48.0
Employee termination and restructuring	2.7			—		0.3		3.0
Depreciation and amortization	181.5			20.0		5.4		206.9
Segment operating (loss) income	$	(0.8	)	$	49.0	$	7.3	$	55.5
Unallocated corporate costs								(55.6		)
Consolidated operating loss								$	(0.1	)
Earnings from equity investments	$	1.8		$	1.5	$	—	$	3.3

(1) Exclusive of D&A.

	Six Months Ended June 30, 2016
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	468.6	$	89.2	$	156.0	$	713.8
Product sales	395.0		17.4		—		412.4
Instant games	—		285.0		—		285.0
Total revenue	863.6		391.6		156.0		1,411.2
Operating expenses:
Cost of services (1)	85.6		54.9		55.8		196.3
Cost of product sales (1)	181.2		13.9		—		195.1
Cost of instant games (1)	—		141.1		—		141.1
Selling, general and administrative	129.1		34.3		51.3		214.7
Research and development	76.7		5.2		15.7		97.6
Employee termination and restructuring	5.0		1.3		0.5		6.8
Depreciation and amortization	295.9		35.0		7.5		338.4
Segment operating income	$	90.1	$	105.9	$	25.2	$	221.2
Unallocated corporate costs							(111.8		)
Consolidated operating income							$	109.4
Earnings from equity investments	$	1.4	$	9.8	$	—	$	11.2

(1) Exclusive of D&A.

	Six Months Ended June 30, 2015
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	478.3	$	91.5	$	98.5	$	668.3
Product sales	397.2		20.3		—		417.5
Instant games	—		264.4		—		264.4
Total revenue	875.5		376.2		98.5		1,350.2
Operating expenses:
Cost of services (1)	98.6		55.9		34.6		189.1
Cost of product sales (1)	188.7		17.1		—		205.8
Cost of instant games (1)	—		135.8		—		135.8
Selling, general and administrative	145.4		33.5		30.3		209.2
Research and development	80.9		3.1		10.9		94.9
Employee termination and restructuring	6.9		0.2		1.0		8.1
Depreciation and amortization	324.8		41.3		10.5		376.6
Segment operating income	$	30.2	$	89.3	$	11.2	$	130.7
Unallocated corporate costs							(112.7		)
Consolidated operating income							$	18.0
Earnings from equity investments	$	1.7	$	4.7	$	—	$	6.4

(1) Exclusive of D&A.

The following table presents a reconciliation of business segment operating income to net loss before income taxes for each period:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Business segment operating income	$	118.3		$	55.5		$	221.2		$	130.7
Unallocated corporate costs	(59.2		)	(55.6		)	(111.8		)	(112.7		)
Consolidated operating income (loss)	59.1			(0.1		)	109.4			18.0
Interest expense	(165.3		)	(166.4		)	(331.0		)	(330.7		)
Earnings from equity investments	8.0			3.3			11.2			6.4
Gain on early extinguishment of debt	25.2			—			25.2			—
Other income (expense), net	1.7			(4.3		)	2.4			(9.9		)
Net loss before income taxes	$	(71.3	)	$	(167.5	)	$	(182.8	)	$	(316.2	)

In evaluating financial performance, we focus on operating income (loss) as a segment's measure of profit or loss. The accounting policies of our business segments are the same as those described in our summary of significant accounting policies in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2015 Annual Report on Form 10-K.

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Restructuring Plans

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Plans

Restructuring Plans

We began integrating Scientific Games and WMS subsequent to the WMS acquisition in October 2013. This integration was completed during the first quarter of 2016. We began integrating Scientific Games and Bally subsequent to its acquisition in November 2014 by implementing our plans to streamline our operations and cost structure.

We recorded pre-tax employee termination and restructuring costs of $4.2 million and $5.2 million for the three months ended June 30, 2016 and 2015, respectively, and$6.9 millionand$13.4 millionfor the six months ended June 30, 2016 and 2015, respectively.No new material employee termination and restructuring plans were initiated during the six months ended June 30, 2016. We expect to complete the integration-related restructuring plan actions discussed below relating to the Bally integration during 2016. All other employee termination and restructuring actions reported in 2015 were completed as of March 31, 2016.

The following table presents a summary of employee termination and restructuring costs by business segment related to the restructuring plans described above, including the costs incurred during the three and six months ended June 30, 2016, the cumulative costs incurred through June 30, 2016 from initiation of the relevant restructuring activities and the total expected costs related to the relevant restructuring activities that have been initiated. As additional integration-related activities are initiated, we expect to incur additional costs related to those activities.

Business Segment		Employee Termination Costs		Property Costs		Other		Total
Gaming	Three Months Ended June 30, 2016	$	2.2	$	—	$	1.2	$	3.4
	Six Months Ended June 30, 2016	3.4		0.4		1.2		5.0
	Cumulative	24.6		0.4		2.8		27.8
	Expected Total	27.1		0.4		2.8		30.3
Lottery	Three Months Ended June 30, 2016	—		—		0.2		0.2
	Six Months Ended June 30, 2016	1.1		—		0.2		1.3
	Cumulative	2.3		—		0.2		2.5
	Expected Total	2.3		—		0.2		2.5
Interactive	Three Months Ended June 30, 2016	0.2		—		0.3		0.5
	Six Months Ended June 30, 2016	0.2		—		0.3		0.5
	Cumulative	2.7		—		2.0		4.7
	Expected Total	2.7		—		2.0		4.7
Unallocated corporate (1)	Three Months Ended June 30, 2016	0.1		—		—		0.1
	Six Months Ended June 30, 2016	0.1		—		—		0.1
	Cumulative	6.4		4.3		2.1		12.8
	Expected Total	8.9		4.3		2.1		15.3
Total	Three Months Ended June 30, 2016	$	2.5	$	—	$	1.7	$	4.2
	Six Months Ended June 30, 2016	$	4.8	$	0.4	$	1.7	$	6.9
	Cumulative	$	36.0	$	4.7	$	7.1	$	47.8
	Expected Total	$	41.0	$	4.7	$	7.1	$	52.8

(1) Cumulative unallocated corporate employee termination costs primarily includes cash severance paid to our former chief executive officer and special termination benefits related to the retirement of our former chief financial officer.

The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the six months ended June 30, 2016:

	Employee Termination Costs			Property Costs			Other			Total
Balance as of December 31, 2015	$	7.3		$	0.8		$	1.4		$	9.5
Additional accruals	4.8			0.4			1.7			6.9
Cash payments	(6.2		)	(0.9		)	(0.2		)	(7.3		)
Balance as of June 30, 2016	$	5.9		$	0.3		$	2.9		$	9.1

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Basic and Diluted Net Loss Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Share

Basic and Diluted Net Loss Per Share

The following represents a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share available to common stockholders for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Loss (numerator):
Net loss	$	(51.7	)	$	(102.2	)	$	(144.0	)	$	(188.6	)
Shares (denominator):
Basic weighted-average common shares outstanding	87.3			85.9			86.9			85.6
Diluted weighted-average common shares outstanding	87.3			85.9			86.9			85.6
Basic and diluted net loss per share amounts:
Basic net loss per share	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)
Diluted net loss per share	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)

Basic and diluted net loss per share were the same for all periods presented as all common stock equivalents would be anti-dilutive. We excluded 3.0 million and 1.9 million of stock options from the diluted weighted-average common shares outstanding as of June 30, 2016 and 2015, respectively, and 5.3 million and 6.4 million of RSUs from the calculation of diluted weighted-average common shares outstanding as of June 30, 2016 and 2015, respectively.

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Accounts and Notes Receivable and Credit Quality of Notes Receivable

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Accounts and Notes Receivable and Credit Quality of Notes Receivable

Accounts and Notes Receivable and Credit Quality of Notes Receivable

Accounts and Notes Receivable

The following summarizes the components of current and long-term accounts and notes receivable, net:

	June 30, 2016			December 31, 2015
Current:
Accounts receivable	$	514.0		$	497.7
Notes receivable	154.5			180.4
Allowance for doubtful accounts	(27.2		)	(23.3		)
Current accounts and notes receivable, net	$	641.3		$	654.8
Long-term:
Notes receivable, net	43.8			51.3
Total accounts and notes receivable, net	$	685.1		$	706.1

Credit Quality of Notes Receivable

We have provided extended payment terms and development financing to certain customers in the form of notes receivable. We carry our notes receivable at face amounts less an allowance for doubtful accounts and imputed interest, if any. Interest income is recognized ratably over the life of the note receivable and any related fees or costs to establish the notes are expensed as incurred, as they are considered insignificant. Actual or imputed interest, if any, is determined based on stated rates or current market rates at the time the note originated and is recorded as interest income in other income (expense), net, ratably over the payment period. We generally impute interest income on notes receivable with terms greater than one year that do not contain a stated interest rate. The interest rates on our outstanding notes receivable ranged from 3.25% to 10.42% at June 30, 2016 and December 31, 2015.

We monitor the credit quality of our accounts and notes receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within the agreed-upon terms. We also review a variety of other relevant qualitative information such as collection experience, economic conditions and customer-specific financial conditions to evaluate credit risk in recording the allowance for doubtful accounts or as an indicator of an impaired loan. Where possible, we seek payment deposits, collateral, pledge agreements, bills of exchange, foreign bank letters of credit, post-dated checks or personal guarantees with respect to notes receivable from our customers. However, the majority of our international notes receivable do not have these features. Currently, we have not sold our notes receivable to third parties; therefore, we do not have any off-balance sheet liabilities for factored receivables.

Over the past few years, the government authorities in Argentina had limited the exchange of pesos into USD and the transfer of funds from Argentina. In December 2015, the newly elected government removed the limitations of the previous government and also devalued the "official" peso to the market rate. Our accounts and notes receivable, net, from customers in Argentina at June 30, 2016 was $19.0 million, which is denominated in USD, although, under the terms of our arrangements with our customers in Argentina, they are required to pay us in pesos at the spot exchange rate between the peso and the USD on the date of payment. With the recent devaluation of the peso, our customers will now have to pay more pesos to reduce their obligations. In evaluating the collectability of customer receivables in Argentina at June 30, 2016, we specifically evaluated recent government actions, payments, receivables aging, any additional security or collateral we had (bills of exchange, pledge agreements, etc.) and other facts and circumstances relevant to our customers' ability to pay. Our customers in Argentina have continued to pay us in pesos based on the spot exchange rate between the peso and the USD on the payment date. We collected $11.4 million of outstanding receivables from customers in Argentina during the six months ended June 30, 2016.

Government actions and challenges affecting the gaming industry in Mexico have increased the credit quality risk with respect to certain of our current Mexico customers. Our accounts and notes receivable, net, from these certain customers in Mexico at June 30, 2016 was $36.4 million. We collected $14.4 million of outstanding receivables from these certain customers during the six months ended June 30, 2016.

The following summarizes the components of total notes receivable, net:

	June 30, 2016			Balances over 90 days past due			December 31, 2015			Balances over 90 days past due
Notes receivable:
Domestic	$	39.6		$	2.0		$	62.4		$	2.6
International	159.0			41.5			169.8			26.6
Total notes receivable	198.6			43.5			232.2			29.2
Notes receivable allowance for doubtful accounts:
Domestic	(2.3		)	(2.3		)	(2.6		)	(2.5		)
International	(12.5		)	(12.5		)	(10.6		)	(9.5		)
Total notes receivable allowance for doubtful accounts	(14.8		)	(14.8		)	(13.2		)	(12.0		)
Notes receivable, net	$	183.8		$	28.7		$	219.0		$	17.2

At June 30, 2016, 15.6% of our total notes receivable, net, was past due by over 90 days, compared to 7.9% at December 31, 2015.

The following tables detail our evaluation of notes receivable for impairment as of June 30, 2016 and December 31, 2015:

	June 30, 2016		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	39.6	$	13.7	$	25.9
International	159.0		81.7		77.3
Total notes receivable	$	198.6	$	95.4	$	103.2

	December 31, 2015		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	62.4	$	20.7	$	41.7
International	169.8		101.8		68.0
Total notes receivable	$	232.2	$	122.5	$	109.7

The following table reconciles the allowance for doubtful notes receivable from December 31, 2015 to June 30, 2016:

	Total			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
Beginning balance at December 31, 2015	$	13.2		$	12.9		$	0.3
Charge-offs	(1.3		)	(1.3		)	—
Recoveries	(0.2		)	(0.2		)	—
Provision	3.1			3.1			—
Ending balance at June 30, 2016	$	14.8		$	14.5		$	0.3

The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to June 30, 2015:

	Total			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
Beginning balance at December 31, 2014	$	5.9		$	5.9		$	—
Charge-offs	(2.1		)	(2.1		)	—
Recoveries	(0.5		)	(0.4		)	(0.1		)
Provision	6.4			5.2			1.2
Ending balance at June 30, 2015	$	9.7		$	8.6		$	1.1

For the six months ended June 30, 2016 and 2015, we had no significant modifications to the original financing terms.

In certain international jurisdictions, we offer extended payment terms to our customers. Such payment terms subject us to increased credit risk, which could be exacerbated by, among other things, unfavorable economic conditions or political or economic instability in those regions. Our notes receivable were concentrated in the following international gaming jurisdictions at June 30, 2016:

Mexico	26	%
Peru	17	%
Argentina	9	%
Columbia	6	%
Other (less than 5% individually)	22	%
Total international notes receivable as a percentage of total notes receivable	80	%

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Inventories

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following as of the dates presented below:

	June 30, 2016		December 31, 2015
Parts and work-in-process	$	128.6	$	118.3
Finished goods	120.4		130.2
Total inventories	$	249.0	$	248.5

Parts and work-in-process include parts for gaming machines, lottery terminals and instant lottery ticket materials, as well as labor and overhead costs for work-in-process associated with the manufacturing of instant lottery games and lottery terminals. Our finished goods inventory primarily consists of gaming machines for sale, instant games for our Participation arrangements and our licensed branded merchandise.

During the three months ended June 30, 2015, we recorded an impairment of $7.1 million related to the discontinuance of certain product lines as a result of the Bally acquisition. The impairment is included in the cost of product sales in our Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2015.

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Property and Equipment, net

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consisted of the following:

	June 30, 2016			December 31, 2015
Land	$	38.4		$	38.5
Buildings and leasehold improvements	184.7			185.2
Gaming and lottery machinery and equipment	1,048.5			1,084.6
Furniture and fixtures	31.4			36.0
Construction in progress	27.9			25.5
Other property and equipment	264.5			271.0
Less: accumulated depreciation	(899.9		)	(846.8		)
Total property and equipment, net	$	695.5		$	794.0

Depreciation expense for the three and six months ended June 30, 2016 was $86.8 million and $167.4 million, respectively. Depreciation expense for the three and six months ended June 30, 2015 was $93.9 million and $176.3 million, respectively. Depreciation expense is excluded from cost of services, cost of product sales, cost of instant games and other operating expenses and is separately included within D&A in the Consolidated Statements of Operations and Comprehensive Loss.

During the six months ended June 30, 2016, the Gaming and Lottery business segments disposed of certain gaming and lottery assets with gross balances of approximately $90.2 million and $3.1 million, respectively. These disposals did not result in receipt of material cash proceeds and had an immaterial impact on property and equipment, net in our Consolidated Balance Sheet as of June 30, 2016 and the Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2016.

During the three months ended June 30, 2015, the Gaming business segment disposed of certain fully depreciated gaming assets with a historical cost of $59.9 million. The disposal had no impact on property and equipment, net in our Consolidated Balance Sheet as of June 30, 2015 or D&A in the Consolidated Statements of Operations and Comprehensive Loss for three and six months ended June 30, 2015. In addition, during the three months ended June 30, 2015, we recorded an impairment of $5.2 million related to gaming equipment assets for certain product lines that were discontinued as a result of the Bally acquisition, and recorded an impairment of $4.9 million for a Reno, Nevada facility we sold later in the year. The impairments were included in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2015.

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Intangible Assets, net and Goodwill

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, net and Goodwill

Intangible Assets, net and Goodwill

Intangible Assets, net

The following tables present certain information regarding our intangible assets as of June 30, 2016 and December 31, 2015. Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value, which materially approximates the expected pattern of use of these intangible assets.

Intangible Assets	Gross Carrying Amount		Accumulated Amortization			Net Balance
Balance as of June 30, 2016
Amortizable intangible assets:
Patents	$	26.3	$	(13.1	)	$	13.2
Customer relationships	877.7		(136.8		)	740.9
Licenses	412.5		(121.8		)	290.7
Intellectual property(1)	731.5		(170.3		)	561.2
Trade names	97.4		(4.9		)	92.5
Brand names	124.4		(25.6		)	98.8
Non-compete agreements	0.2		(0.2		)	—
	2,270.0		(472.7		)	1,797.3
Non-amortizable intangible assets:
Trade names	96.7		(2.1		)	94.6
Total intangible assets	$	2,366.7	$	(474.8	)	$	1,891.9
Balance as of December 31, 2015
Amortizable intangible assets:
Patents	$	26.8	$	(12.5	)	$	14.3
Customer relationships	877.7		(109.1		)	768.6
Licenses	326.1		(91.6		)	234.5
Intellectual property(1)	731.1		(124.5		)	606.6
Trade names	97.5		(1.9		)	95.6
Brand names	124.0		(18.9		)	105.1
Non-compete agreements	0.3		(0.3		)	—
	2,183.5		(358.8		)	1,824.7
Non-amortizable intangible assets:
Trade names	97.4		(2.1		)	95.3
Total intangible assets	$	2,280.9	$	(360.9	)	$	1,920.0

(1) Includes $33 million of in-process R&D assets that will not be subject to amortization until they reach commercial feasibility.

In January 2016, we amended and extended the terms of one of our existing license agreements through December 31, 2022. Under the terms of the amended agreement, we are obligated to pay aggregate minimum guarantees of $88.0 million over the life of the contract in exchange for the right to use certain licensed properties in game content themes, which are incorporated into our slot games, online games, lottery products and promotional materials. We account for the minimum guaranteed obligations within other long-term liabilities (or, with respect to the portion that is a current liability within accounts payable or accrued liabilities) at the onset of the license arrangement and record a corresponding licensed asset within intangible assets, net in our Consolidated Balance Sheets. The current and long-term portions of our minimum guaranteed obligations related to the amended license agreement were $8.8 million and $74.6 million, respectively, and are recorded in accounts payable and other long-term liabilities, respectively, in our Consolidated Balance Sheet as of June 30, 2016.

The aggregate intangible asset amortization expense for the three and six months ended June 30, 2016 was $62.3 million and $127.9 million, respectively. The aggregate intangible amortization expense for the three and six months ended June 30, 2015 was $87.2 million and $150.3 million, respectively. Intangible amortization expense is included within D&A in the Consolidated Statements of Operations and Comprehensive Loss.

As a result of an interim review of assets with indefinite useful lives, we recorded an impairment charge of $25.0 million in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2015 to reduce the gross carrying amount of one indefinite-lived trade name asset to its fair value (which was subsequently reclassified to finite-life during the third quarter of 2015).

Goodwill

The table below reconciles the change in the carrying amount of goodwill by business segment for the period from

December 31, 2015 to June 30, 2016.

Goodwill	Gaming			Lottery		Interactive		Totals
Balance as of December 31, 2015	$	2,486.0		$	417.9	$	109.8	$	3,013.7
Foreign currency adjustments	(23.0		)	1.8		—		(21.2		)
Balance as of June 30, 2016	$	2,463.0		$	419.7	$	109.8	$	2,992.5

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Software, net

6 Months Ended

Jun. 30, 2016

Capitalized Computer Software, Net [Abstract]

Software, net

Software, net

Software, net consisted of the following:

	June 30, 2016			December 31, 2015
Software	$	894.8		$	854.2
Accumulated amortization	(451.6		)	(368.3		)
Software, net	$	443.2		$	485.9

Amortization expense for the three and six months ended June 30, 2016 was $44.0 million and $78.4 million, respectively. Amortization expense for the three and six months ended June 30, 2015 was $41.1 million and $79.8 million, respectively. Amortization expense is included within D&A in the Consolidated Statements of Operations and Comprehensive Loss.

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Equity Investments

6 Months Ended

Jun. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Equity Investments

Equity Investments

The following provides an update for events that occurred during the six months ended June 30, 2016 related to our equity investments, which are disclosed in Note 11 (Equity Investments) in our 2015 Annual Report on Form 10-K.

ITL

During the six months ended June 30, 2016, we received a distribution of capital of €2.8 million, or $3.1 million. During the six months ended June 30, 2015, we received a distribution of capital of €5.8 million, or $6.5 million.

RCN

During the six months ended June 30, 2016, we received a dividend of $1.4 million. During the six months ended June 30, 2015, we received a dividend of $1.8 million.

LNS

During the six months ended June 30, 2016, we received a dividend of €13.5 million, or $14.9 million, and a distribution capital of €17.6 million, or $19.4 million. During the six months ended June 30, 2015, we received a dividend of €12.9 million, or $14.5 million, and a distribution capital of €15.0 million, or $16.8 million.

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Long-Term and Other Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Long-Term and Other Debt

Long-Term and Other Debt

Outstanding Debt and Capital Leases

The following reflects our outstanding debt as of the dates indicated below:

	Principal		Unamortized debt discount			Unamortized deferred financing costs			Book value June 30, 2016
Senior Secured Credit Facilities:
Revolver, varying interest rate, due 2018	$	80.0	$	—		$	—		$	80.0
Term Loan, varying interest rate, due 2020	2,242.5		(6.9		)	(47.0		)	2,188.6
Term Loan, varying interest rate, due 2021	1,970.0		(15.2		)	(44.8		)	1,910.0
2018 Notes	250.0		—			(1.6		)	248.4
2020 Notes	243.5		—			(2.6		)	240.9
2021 Notes	340.6		(1.6		)	(5.1		)	333.9
Secured Notes	950.0		—			(15.1		)	934.9
Unsecured Notes	2,200.0		—			(39.1		)	2,160.9
Capital lease obligations, 3.9% interest as of June 30, 2016 payable monthly through 2019	19.7		—			—			19.7
Total long-term debt outstanding	$	8,296.3	$	(23.7	)	$	(155.3	)	$	8,117.3
Less: current portion of long-term debt									(49.7		)
Long-term debt, excluding current portion									$	8,067.6
	Principal		Unamortized debt discount			Unamortized deferred financing costs			Book value December 31, 2015
Senior Secured Credit Facilities:
Revolver, varying interest rate, due 2018	$	95.0	$	—		$	—		$	95.0
Term Loan, varying interest rate, due 2020	2,254.0		(7.8		)	(52.5		)	2,193.7
Term Loan, varying interest rate, due 2021	1,980.0		(16.7		)	(49.2		)	1,914.1
2018 Notes	250.0		—			(2.0		)	248.0
2020 Notes	300.0		—			(3.6		)	296.4
2021 Notes	350.0		(1.8		)	(5.6		)	342.6
Secured Notes	950.0		—			(16.4		)	933.6
Unsecured Notes	2,200.0		—			(42.1		)	2,157.9
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019	25.7		—			—			25.7
Total long-term debt outstanding	$	8,404.7	$	(26.3	)	$	(171.4	)	$	8,207.0
Less: current portion of long-term debt									(50.3		)
Long-term debt, excluding current portion									$	8,156.7

Senior Secured Credit Facilities

We and certain of our subsidiaries are party to a credit agreement dated as of October 18, 2013, by and among SGI, as the borrower, us, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto. Prior to the increase in the revolving credit facility and the assumption of the incremental term loans referred to below, the credit agreement provided for senior secured credit facilities in an aggregate principal amount of $2,600.0 million, including a $300.0 million revolving credit facility, which has USD and multi-currency tranches, and a $2,300.0 million term B-1 loan facility.

On October 1, 2014, in connection with the Bally acquisition, we amended our existing credit agreement pursuant to which our $300.0 million revolving credit facility was increased by $267.6 million effective upon the consummation of the Bally acquisition. In addition, we entered into an escrow credit agreement providing for a $2.0 billion senior secured incremental term B-2 loan facility (which became an incremental term B-2 loan facility under our existing credit agreement upon the consummation of the Bally acquisition).

On February 11, 2015, SGI entered into a lender joinder agreement to the credit agreement with an additional commitment lender. Pursuant to the joinder agreement, the amount of the revolving credit facility under the credit agreement was increased by $25.0 million to $592.6 million. Up to $350.0 million of the revolving credit facility is available for issuances of letters of credit.

All of the debt incurred under the Credit Agreement is subject to accelerated maturity depending on our liquidity at the time our 2018 Notes, 2020 Notes and 2021 Notes become due.

During the second quarter of 2016, we repurchased and cancelled $56.5 million and $9.4 million of principal amount of the 2020 Notes and 2021 Notes, respectively, for $34.2 million and $5.7 million in cash, respectively, through separate open market purchases. In connection with this transaction, we recorded a $25.2 million gain on early extinguishment of debt, net of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt.

For additional information regarding our senior secured credit facilities, 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes, Unsecured Notes and capital lease obligations, see Note 15 (Long-Term and Other Debt) in our 2015 Annual Report on Form 10-K.

Fair Value of Debt

The estimated fair value of our long-term debt as of June 30, 2016 and December 31, 2015 was approximately $7,532.3 million and $6,931.6 million, respectively. We estimate the fair value of debt based on quoted market prices of our securities, if available, and indicative pricing derived from market information. We categorize inputs used to measure the fair value of debt as Level 2 in the fair value hierarchy due to the low volume and frequency of transactions in the market.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, approximates their recorded values due to the short-term nature of these instruments. Our assets and liabilities measured at fair value on a recurring basis are described below.

Interest rate swap contracts

In August 2013, we entered into forward starting interest rate swap contracts with an aggregate notional value of $500.0 million. In October 2013, we entered into additional forward starting interest rate swap contracts with an aggregate notional value of $200.0 million. Interest payments pursuant to these contracts started in April 2015 and these contracts will mature in January 2018. We entered into the forward starting interest rate swap contracts, which are designated as cash flow hedges of the future interest payment transactions in accordance with ASC 815, Derivatives and Hedging, in order to eliminate the variability of a portion of cash flows attributable to the LIBOR component of interest expense to be paid on our variable rate debt. Under these hedges, beginning in April 2015, we began to pay interest on the notional amount at a weighted-average fixed rate of 2.151% and began to receive interest on the notional amount at the greater of 1% or the then prevailing three-month LIBOR rate.

These hedges are highly effective in offsetting changes in our future expected cash flows due to fluctuation in the three-month LIBOR rate associated with our variable rate debt. The effectiveness of these hedges is measured quarterly on a retrospective basis by comparing the cumulative change in the hedging instrument's fair value to the change in the hedged transaction's fair value. To the extent these hedges have no ineffectiveness, all gains and losses from these hedges are recorded in other comprehensive income (loss) until the future underlying payment transactions occur. Any realized gains or losses resulting from the hedges will be recognized (together with the hedged transaction) as interest expense in our Consolidated Statements of Operations and Comprehensive Loss.

For the three and six months ended June 30, 2016, we recorded gains, net of tax, of $4.6 million and $3.6 million, respectively, which represent the change in the fair value associated with these hedges, in other comprehensive income (loss) in our Consolidated Statements of Operations and Comprehensive Loss. For the three and six months ended June 30, 2015, we recorded gains, net of tax, of $5.6 million and $0.8 million, respectively, all of which is recorded in other comprehensive (loss) income in our Consolidated Statements of Operations and Comprehensive Loss related to these hedges. We realized losses of $2.0 million and $4.1 million, which represent reclassifications from accumulated other comprehensive loss to interest expense in our Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2016, respectively. The Company expects to reclassify additional losses of $8.2 million from accumulated other comprehensive loss to interest expense in the next twelve months. As of June 30, 2016, the fair value of these hedges was $11.8 million, of which $8.2 million is recorded in accrued liabilities and $3.6 million is recorded in other long-term liabilities in our Consolidated Balance Sheet. As of December 31, 2015, the fair value of these hedges was $11.9 million, of which $7.9 million is recorded in accrued liabilities and $4.0 million is recorded in other long-term liabilities in our Consolidated Balance Sheet. We estimate the fair value of our interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy.

Other

As of June 30, 2016 and December 31, 2015, we had $14.5 million and $16.7 million of assets held for sale, respectively, which at year-end primarily consisted of our Waukegan, Illinois manufacturing facility and a portion of our Chicago, Illinois R&D campus. During the second quarter of 2016, we sold the portion of our Chicago, Illinois R&D campus which was previously held for sale at a price that materially approximated the carrying amount, less selling costs. Each of these facilities was included in our Consolidated Balance Sheets within Prepaid expenses, deposits and other current assets and is reported at the lower of the carrying amount or fair market value, less expected costs to sell, which approximated the fair value as of June 30, 2016 and December 31, 2015. The inputs used to measure the fair value of our assets held for sale were based on market approach and are categorized as Level 3 in the fair value hierarchy.

Notes Receivable

The fair value of notes receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of June 30, 2016 and December 31, 2015, the fair value of the notes receivable, net, approximated the carrying amount due to the short-term nature of notes receivable.

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Stockholders' Deficit

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stockholders' Deficit

Stockholders' Deficit

Stock-based and other incentive compensation

We offer stock-based compensation in the form of stock options and RSUs. We also offered an ESPP through June 30, 2015, at which point in time the shares allocated to this plan were fully issued and the ESPP terminated in accordance with its terms. See Note 18 (Stock-Based and Other Incentive Compensation) in our 2015 Annual Report on Form 10-K. At our annual meeting of stockholders, held on June 15, 2016 (the "Annual Meeting"), our stockholders approved the adoption of a new ESPP, the terms of which are described in our annual proxy statement, filed on Schedule 14A with the SEC on April 29, 2016. The first offering period under the new ESPP will commence on January 1, 2017.

We may grant certain awards in which the vesting is contingent upon the Company achieving certain performance targets. Upon determining that the performance target is probable, the fair value of the award is recognized over the service period, subject to potential adjustment.

We grant stock options to employees and directors under our stock-based compensation plans with exercise prices that are not less than the fair market value of our common stock on the date of grant, as determined pursuant to the terms of the applicable stock-based compensation plan. The terms of the stock option and RSU awards, including the vesting schedule of such awards, are determined at our discretion subject to the terms of the applicable stock-based compensation plan. Options granted over the last several years have generally become exercisable in fourequal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met, in each case, with a maximum period to exercise of ten years. RSUs typically vest in four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met. We record compensation cost for all stock options and RSUs based on the fair value at the grant date and in the case of performance-based awards, compensation costs may be adjusted to reflect the likelihood of achieving the performance targets.

Stock Options

For the three and six months ended June 30, 2016, we granted 1.2 million options with a weighted average grant date fair value of approximately $4.81. We had approximately 3.0 million and 0.9 million of options outstanding and options exercisable as of June 30, 2016, respectively.

For the three and six months ended June 30, 2016, we recognized stock-based compensation expense of $0.6 million and $1.3 million, respectively, related to the service period of stock options. For the three and six months ended June 30, 2015, we recognized stock-based compensation expense of $0.5 million and $0.9 million, respectively.

As of June 30, 2016, we had $10.2 million of unrecognized stock-based compensation relating to unvested stock options that will be amortized over a weighted average period of approximately two years.

Restricted Stock Units

A summary of the changes in RSUs outstanding under our stock-based compensation plans during the six months ended June 30, 2016 is presented below:

	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Unvested RSUs as of December 31, 2015	5.6		$	13.05
Granted	0.2		8.21
Vested	(0.8	)	12.46
Canceled	(0.4	)	12.56
Unvested RSUs as of March 31, 2016	4.6		$	13.00
Granted	1.4		9.60
Vested	(0.6	)	12.51
Canceled	(0.1	)	13.35
Unvested RSUs as of June 30, 2016	5.3		$	12.16

The weighted average grant date fair value of RSUs granted during the three and six months ended June 30, 2016 was $9.60 and $9.42, respectively. During the three and six months ended June 30, 2016 we recognized stock-based compensation expense of $5.4 million and $11.2 million, respectively, related to the vesting of RSUs. For the three and six months ended June 30, 2015, we recognized stock-based compensation expense of $6.3 million and $11.0 million, respectively, related to the service period of RSUs.

As of June 30, 2016, we had $58.0 million of unrecognized stock-based compensation relating to unvested RSUs that will be amortized over a weighted average period of approximately two years.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

We have defined benefit pension plans for our U.K.-based union employees (the "U.K. Plan") and certain Canadian-based employees (the "Canadian Plan"). Retirement benefits under the U.K. Plan are generally based on an employee's average compensation over the two years preceding retirement. Retirement benefits under the Canadian Plan are generally based on the number of years of credited service. Our policy is to fund the minimum contribution permissible by the applicable authorities. See Note 19 (Pension and Other Post Retirement Plans) in our 2015 Annual Report on Form 10-K.

The net periodic benefit cost recognized for both the three months ended June 30, 2016 and 2015 was $0.4 million. The net periodic benefit cost recognized for the six months ended June 30, 2016 and 2015 was $0.7 million and $0.9 million, respectively.

We have a 401(k) plan for U.S.-based employees. Those employees who participate in our 401(k) plan are eligible to receive matching contributions of 35% from us for participant contributions up to the first 6% of their compensation (as defined in the plan document). Contribution expense for the three months ended June 30, 2016 and 2015 was $2.9 million and $2.7 million, respectively. Contribution expense for the six months ended June 30, 2016 and 2015 was $5.8 million and $5.8 million, respectively.

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rates for the three and six months ended June 30, 2016 were 27.5% and 21.2%, respectively, and39.0%and40.4%for the three and six months ended June 30, 2015, respectively, andwere determined using an estimated annual effective tax rate after considering any discrete items for such periods. The reduction in income tax rate for the three and six months ended June 30, 2016 when compared to the three and six months ended June 30, 2015 is primarily attributable to the impact of negative evidence related to the realizability of the deferred tax assets expected to be created by 2016 U.S. taxable losses.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company has remained in a three year cumulative loss in the U.S. federal tax jurisdiction. As of June 30, 2016, on the basis of this evaluation and considering the projected U.S. pre-tax losses for 2016 and the resulting net U.S. deferred tax asset position anticipated to occur during 2016, a valuation allowance has been contemplated as a component of the estimated annual effective tax rate in order to recognize only the portion of the benefit related to current year losses that is more likely than not to be realized.

As of December 31, 2015, the Company remained in a net U.S. deferred tax liability position and therefore a valuation allowance against its U.S. deferred tax assets was only necessary for certain state deferred tax assets and U.S. foreign tax credit carryforwards. The Company maintained other valuation allowances for certain non-U.S. jurisdictions with cumulative losses. The Company is projecting a pre-tax loss for its U.S. operations in 2016 in an amount that will more than exceed, on an after tax basis, the net deferred tax liability recorded as of December 31, 2015. Thus, we are projecting to be in a net U.S. deferred tax asset position at December 31, 2016.

Our effective income tax rate on foreign earnings is impacted by the mix of income and the statutory tax rates in our foreign jurisdictions, which range from a low of 0% to a high of 39%. The foreign jurisdictions that had the most impact on our foreign income tax expense (benefit) in the three and six months ended June 30, 2016 included Austria, Bermuda, Canada, India, Ireland and the U.K.

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Litigation

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Litigation

Litigation

The Company is involved in various legal proceedings, including those discussed below. We record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss can be reasonably estimated (although, as discussed below, there may be an exposure to loss in excess of the accrued liability). We evaluate our accruals for legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect (1) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments, (2) the advice and analyses of counsel and (3) the assumptions and judgment of management. Legal costs associated with our legal proceedings are expensed as incurred. We had accrued liabilities of $9.0 million and $16.4 million for all of our legal matters that were contingencies as of June 30, 2016 and December 31, 2015, respectively.

Substantially all of our legal contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss involves a series of complex judgments about future events. Consequently, the ultimate outcomes of our legal contingencies could result in losses in excess of amounts we have accrued. We may be unable to estimate a range of possible losses for some matters pending against the Company or its subsidiaries, even when the amount of damages claimed against the Company or its subsidiaries is stated because, among other things: (1) the claimed amount may be exaggerated or unsupported; (2) the claim may be based on a novel legal theory or involve a large number of parties; (3) there may be uncertainty as to the likelihood of a class being certified or the ultimate size of the class; (4) there may be uncertainty as to the outcome of pending appeals or motions; (5) the matter may not have progressed sufficiently through discovery or there may be significant factual or legal issues to be resolved or developed; and/or (6) there may be uncertainty as to the enforceability of legal judgments and outcomes in certain jurisdictions. Other matters have progressed sufficiently that we are able to estimate a range of possible loss. For those legal contingencies disclosed below, as well as those related to the previously disclosed settlement agreement entered into in February 2015 with SNAI S.p.a., as to which a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a range of possible loss, the current estimated range is up to approximately $13.2 million in excess of the accrued liabilities (if any) related to those legal contingencies. This aggregate range represents management's estimate of additional possible loss in excess of the accrued liabilities (if any) with respect to these matters based on currently available information, including any damages claimed by the plaintiffs, and is subject to significant judgment and a variety of assumptions and inherent uncertainties. For example, at the time of making an estimate, management may have only preliminary, incomplete, or inaccurate information about the facts underlying a claim; its assumptions about the future rulings of the court or other tribunal on significant issues, or the behavior and incentives of adverse parties, regulators, indemnitors or co‑defendants, may prove to be wrong; and the outcomes it is attempting to predict are often not amenable to the use of statistical or other quantitative analytical tools. In addition, from time to time an outcome may occur that management had not accounted for in its estimate because it had considered that outcome to be remote. Furthermore, as noted above, the aggregate range does not include any matters for which the Company is not able to estimate a range of possible loss. Accordingly, the estimated aggregate range of possible loss does not represent our maximum loss exposure. Any such losses could have a material adverse impact on our results of operations, cash flows or financial condition. The legal proceedings underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.

Colombia Litigation

Our subsidiary, SGI, owned a minority interest in Wintech de Colombia S.A., or Wintech (now liquidated), which formerly operated the Colombian national lottery under a contract with Empresa Colombiana de Recursos para la Salud, S.A. (together with its successors, "Ecosalud"), an agency of the Colombian government. The contract provided for a penalty against Wintech, SGI and the other shareholders of Wintech of up to $5.0 million if certain levels of lottery sales were not achieved. In addition, SGI delivered to Ecosalud a $4.0 million surety bond as a further guarantee of performance under the contract. Wintech started the instant lottery in Colombia but, due to difficulties beyond its control, including, among other factors, social and political unrest in Colombia, frequently interrupted telephone service and power outages, and competition from another lottery being operated in a province of Colombia that we believe was in violation of Wintech's exclusive license from Ecosalud, the projected sales level was not met for the year ended June 30, 1993.

In 1993, Ecosalud issued a resolution declaring that the contract was in default. In 1994, Ecosalud issued a liquidation resolution asserting claims for compensation and damages against Wintech, SGI and other shareholders of Wintech for, among other things, realization of the full amount of the penalty, plus interest, and the amount of the bond. SGI filed separate actions opposing each resolution with the Tribunal Contencioso of Cundinamarca in Colombia (the "Tribunal"), which upheld both resolutions. SGI appealed each decision to the Council of State. In May 2012, the Council of State upheld the contract default resolution, which decision was notified to us in August 2012. In October 2013, the Council of State upheld the liquidation resolution, which decision was notified to us in December 2013.

In July 1996, Ecosalud filed a lawsuit against SGI in the U.S. District Court for the Northern District of Georgia asserting many of the same claims asserted in the Colombia proceedings, including breach of contract, and seeking damages. In March 1997, the District Court dismissed Ecosalud's claims. Ecosalud appealed the decision to the U.S. Court of Appeals for the Eleventh Circuit. The Court of Appeals affirmed the District Court's decision in 1998.

In June 1999, Ecosalud filed a collection proceeding against SGI to enforce the liquidation resolution and recover the claimed damages. In May 2013, the Tribunal denied SGI's merit defenses to the collection proceeding and issued an order of payment of approximately 90 billion Colombian pesos (or approximately $30.8 million), plus default interest potentially accrued since 1994 at a 12% statutory interest rate. SGI has filed an appeal to the Council of State, which appeal has stayed the payment order.

SGI believes it has various defenses, including on the merits, against Ecosalud's claims. Although we believe these claims will not result in a material adverse effect on our consolidated results of operations, cash flows or financial position, it is not feasible to predict the final outcome, and there can be no assurance that these claims will not ultimately be resolved adversely to us or result in material liability.

Oregon State Lottery Matter

On December 31, 2014, a representative of a purported class of persons alleged to have been financially harmed by relying on the "auto hold" feature of various manufacturers' video lottery terminals played in Oregon, filed suit in the Circuit Court of Multnomah County, Oregon, against the Oregon State Lottery and various manufacturers, including WMS Gaming Inc.  The suit alleges that the auto hold feature of video poker games is perceived by players as providing the best possible playing strategy that will maximize the odds of the player winning, when such auto hold feature does not maximize the players' odds of winning. The plaintiffs are seeking in excess of $134.0 million in monetary damages.

In April 2015, the court granted the Oregon State Lottery's motion to dismiss, stating the plaintiffs had not satisfied the Oregon Tort Claims Act. As a result of the dismissal, the court indicated that all claims against WMS Gaming Inc. were moot. In June 2015, plaintiffs filed an appeal. We intend to vigorously defend against the claims asserted in the lawsuit.

Shuffle Tech Matter

In April 2015, Shuffle Tech International, LLC, Aces Up Gaming, Inc. and Poydras-Talrick Holdings LLC brought a civil action in the United States District Court for the Northern District of Illinois against the Company, Bally and Bally Gaming, Inc., alleging monopolization of the market for card shufflers in violation of federal antitrust laws, fraudulent procurement of patents on card shufflers, unfair competition and deceptive trade practices. Specifically, the plaintiffs claim that the defendants utilized certain shuffler patents in a predatory manner to create and maintain a monopoly in the relevant shuffler market. The plaintiffs seek no less than $100.0 million in compensatory damages, treble damages and injunctive and declaratory relief. In June 2015, the defendants filed a motion to dismiss. In October 2015, the court dismissed all of the plaintiffs' claims against Bally and Bally Gaming, Inc. with prejudice, except for the claims of violation of antitrust laws related to the fraudulent procurement of patents on card shufflers. We intend to vigorously defend against the claims asserted in the lawsuit.

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Supplemental Disclosure of Cash Flow Information

6 Months Ended

Jun. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure of Cash Flow Information

Supplemental Disclosure of Cash Flow Information

Additional cash flow information is presented as follows:

	Six Months Ended June 30,
	2016		2015
Interest paid	$	313.6	$	294.6
Income taxes paid (received)	$	6.6	$	(4.1	)

Six months ended June 30, 2016

During the six months ended June 30, 2016, we recorded approximately $86.9 million of non-cash additions to intangible assets and corresponding current and long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period.     

Six months ended June 30, 2015

During the six months ended June 30, 2015, we recorded approximately $12.5 million of non-cash other assets and related long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period.

There were no other significant non-cash investing or financing activities for the six months ended June 30, 2016 and 2015.

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Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

6 Months Ended

Jun. 30, 2016

Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract]

Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

We conduct substantially all of our business through our U.S. and foreign subsidiaries. As of June 30, 2016, SGI's obligations under our credit agreement, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were fully and unconditionally and jointly and severally guaranteed by Scientific Games Corporation (the "Parent Company") and substantially all of our 100%-owned U.S. subsidiaries other than SGI (the "Guarantor Subsidiaries"). As of June 30, 2016, our 2018 Notes, which were issued by the Parent Company, were fully and unconditionally and jointly and severally guaranteed by substantially all of our 100%-owned U.S. subsidiaries, including SGI. The guarantees of our 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes will terminate under the following customary circumstances: (1) the sale or disposition of the capital stock of the guarantor (including by consolidation or merger of the guarantor into another person); (2) the liquidation or dissolution of the guarantor; (3) the defeasance or satisfaction and discharge of the notes; (4) the release of the guarantor from any guarantees of indebtedness of the Parent Company and SGI (or, in the case of the 2018 Notes, the release of the guarantor from any guarantees of indebtedness of the Parent Company); and (5) in the case of the 2020 Notes, the 2021 Notes and the Secured Notes and the Unsecured Notes, the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the respective Notes.

Presented below is condensed consolidating financial information for (1) the Parent Company, (2) SGI, (3) the Guarantor Subsidiaries and (4) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the "Non-Guarantor Subsidiaries") as of June 30, 2016 and December 31, 2015 and for the three and six months ended June 30, 2016 and 2015. The condensed consolidating financial information has been presented to show the nature of assets held, results of operations and cash flows of the Parent Company, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the guarantee structures of our credit agreement, the 2018 Notes, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were in effect at the beginning of the periods presented. 

The condensed consolidating financial information reflects the investments of the Parent Company in SGI and in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method of accounting. They also reflect the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries. Net changes in intercompany due from/due to accounts are reported in the accompanying Supplemental Condensed Consolidating Statements of Cash Flows as investing activities if the applicable entities have a net investment (asset) in intercompany accounts and as a financing activity if the applicable entities have a net intercompany borrowing (liability) balance.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	32.4		$	0.5		$	—	$	68.5	$	—		$	101.4
Restricted cash	—			—			24.4		0.1		—			24.5
Accounts receivable, net	—			98.0			226.5		176.8		—			501.3
Notes receivable, net	—			—			91.2		48.8		—			140.0
Inventories	—			35.8			89.4		136.2		(12.4		)	249.0
Prepaid expenses, deposits and other current assets	31.6			14.1			35.1		40.1		—			120.9
Property and equipment, net	11.9			101.4			430.4		166.3		(14.5		)	695.5
Investment in subsidiaries	3,202.2			851.8			796.8		—		(4,850.8		)	—
Goodwill	—			188.3			1,988.2		816.0		—			2,992.5
Intangible assets, net	207.1			38.7			1,423.6		222.5		—			1,891.9
Intercompany balances	—			6,531.8			—		—		(6,531.8		)	—
Software, net	52.4			25.4			316.3		49.1		—			443.2
Other assets	291.0			119.3			44.7		214.6		(364.7		)	304.9
Total assets	$	3,828.6		$	8,005.1		$	5,466.6	$	1,939.0	$	(11,774.2	)	$	7,465.1
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	6.7	$	—		$	49.7
Other current liabilities	74.3			153.2			208.4		159.8		—			595.7
Long-term debt, excluding current portion	248.4			7,806.2			—		13.0		—			8,067.6
Other long-term liabilities	179.2			14.2			498.8		91.5		(364.7		)	419.0
Intercompany balances	4,993.6			—			1,503.7		34.5		(6,531.8		)	—
Stockholders' (deficit) equity	(1,666.9		)	(11.5		)	3,255.7		1,633.5		(4,877.7		)	(1,666.9		)
Total liabilities and stockholders' (deficit) equity	$	3,828.6		$	8,005.1		$	5,466.6	$	1,939.0	$	(11,774.2	)	$	7,465.1

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015

	Parent  Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	43.2		$	—		$	4.7	$	80.8	$	—		$	128.7
Restricted cash	—			—			20.0		0.2		—			20.2
Accounts receivable, net	—			94.6			233.6		158.9		—			487.1
Notes receivable, net	—			—			114.2		53.5		—			167.7
Inventories	—			36.9			104.2		119.6		(12.2		)	248.5
Prepaid expenses, deposits and other current assets	26.8			7.0			52.1		37.4		—			123.3
Property and equipment, net	8.2			106.4			502.2		188.7		(11.5		)	794.0
Investment in subsidiaries	3,280.9			838.1			648.3		—		(4,767.3		)	—
Goodwill	—			186.0			1,990.5		837.2		—			3,013.7
Intangible assets, net	138.3			39.8			1,505.8		236.1		—			1,920.0
Intercompany balances	—			6,511.1			—		—		(6,511.1		)	—
Software, net	35.6			32.7			359.8		57.8		—			485.9
Other assets	232.5			123.4			51.7		241.7		(306.2		)	343.1
Total assets	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	7.3	$	—		$	50.3
Other current liabilities	63.7			150.5			245.4		144.0		—			603.6
Long-term debt, excluding current portion	248.0			7,890.3			—		18.4		—			8,156.7
Other long-term liabilities	119.1			14.5			502.1		87.7		(306.3		)	417.1
Intercompany balances	4,830.2			—			1,558.2		122.6		(6,511.0		)	—
Stockholders' (deficit) equity	(1,495.5		)	(122.3		)	3,281.4		1,631.9		(4,791.0		)	(1,495.5		)
Total liabilities and stockholders' (deficit) equity	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	126.4		$	408.6		$	265.5		$	(71.3	)	$	729.2
Cost of services, cost of product sales and cost of instant games (1)	—			86.1			108.8			152.6			(71.3		)	276.2
Selling, general and administrative	36.9			11.7			51.7			44.6			—			144.9
Research and development	1.9			2.3			39.1			8.4			—			51.7
Employee termination and restructuring	0.1			(0.1		)	3.3			0.9			—			4.2
Depreciation and amortization	13.0			10.3			141.1			28.7			—			193.1
Operating (loss) income	(51.9		)	16.1			64.6			30.3			—			59.1
Interest expense	—			(35.1		)	(130.1		)	(0.1		)	—			(165.3		)
Gain on early extinguishment of debt	—			25.2			—			—			—			25.2
Other (expense) income, net	(24.7		)	52.5			(24.2		)	6.1			—			9.7
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(76.6		)	58.7			(89.7		)	36.3			—			(71.3		)
Equity in (loss) income of subsidiaries	—			11.3			9.3			—			(20.6		)	—
Income tax benefit (expense)	24.9			—			—			(5.3		)	—			19.6
Net (loss) income	$	(51.7	)	$	70.0		$	(80.4	)	$	31.0		$	(20.6	)	$	(51.7	)
Other comprehensive (loss) income	(30.2		)	3.2			(8.1		)	(33.4		)	38.3			(30.2		)
Comprehensive (loss) income	$	(81.9	)	$	73.2		$	(88.5	)	$	(2.4	)	$	17.7		$	(81.9	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	106.4		$	430.6		$	261.5		$	(107.0	)	$	691.5
Cost of services, cost of product sales and cost of instant games (1)	—			79.0			139.5			163.8			(107.0		)	275.3
Selling, general and administrative	16.7			18.4			70.8			35.0			—			140.9
Research and development	—			1.4			39.3			7.3			—			48.0
Employee termination and restructuring	1.4			0.7			2.4			0.7			—			5.2
Depreciation and amortization	8.1			9.8			170.8			33.5			—			222.2
Operating (loss) income	(26.2		)	(2.9		)	7.8			21.2			—			(0.1		)
Interest expense	(5.3		)	(83.1		)	(77.9		)	(0.1		)	—			(166.4		)
Other (expense) income, net	6.2			18.3			(29.0		)	3.5			—			(1.0		)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(25.3		)	(67.7		)	(99.1		)	24.6			—			(167.5		)
Equity in (loss) income of subsidiaries	(143.0		)	22.7			9.5			—			110.8			—
Income tax benefit (expense)	66.1			(0.1		)	2.9			(3.6		)	—			65.3
Net (loss) income	$	(102.2	)	$	(45.1	)	$	(86.7	)	$	21.0		$	110.8		$	(102.2	)
Other comprehensive income (loss)	23.1			3.3			(25.4		)	42.4			(20.3		)	23.1
Comprehensive (loss) income	$	(79.1	)	$	(41.8	)	$	(112.1	)	$	63.4		$	90.5		$	(79.1	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Six Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	241.7		$	816.5		$	483.4		$	(130.4	)	$	1,411.2
Cost of instant games, cost of services and cost of product sales (1)	—			169.0			219.8			274.1			(130.4		)	532.5
Selling, general and administrative	61.0			22.9			119.4			83.9			—			287.2
Research and development	2.8			4.6			78.4			15.7			—			101.5
Employee termination and restructuring	0.1			—			4.1			2.7			—			6.9
Depreciation and amortization	25.8			21.1			267.9			58.9			—			373.7
Operating (loss) income	(89.7		)	24.1			126.9			48.1			—			109.4
Interest expense	(0.1		)	(69.9		)	(260.9		)	(0.1		)	—			(331.0		)
Gain on early extinguishment of debt	—			25.2			—			—			—			25.2
Other (expense) income, net	(50.3		)	102.8			(47.3		)	8.4			—			13.6
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(140.1		)	82.2			(181.3		)	56.4			—			(182.8		)
Equity in (loss) income of subsidiaries	(51.0		)	30.2			16.2			—			4.6			—
Income tax benefit (expense)	47.1			—			—			(8.3		)	—			38.8
Net (loss) income	$	(144.0	)	$	112.4		$	(165.1	)	$	48.1		$	4.6		$	(144.0	)
Other comprehensive income (loss)	(32.6		)	3.0			(6.2		)	(30.7		)	33.9			(32.6		)
Comprehensive (loss) income	$	(176.6	)	$	115.4		$	(171.3	)	$	17.4		$	38.5		$	(176.6	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Six Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	217.6		$	862.9		$	470.3		$	(200.6	)	$	1,350.2
Cost of instant games, cost of services and cost of product sales (1)	—			160.3			284.8			286.2			(200.6		)	530.7
Selling, general and administrative	31.6			34.6			145.1			75.5			—			286.8
Research and development	—			2.8			77.1			15.0			—			94.9
Employee termination and restructuring	3.2			0.9			6.9			2.4			—			13.4
Depreciation and amortization	16.0			19.6			299.6			71.2			—			406.4
Operating (loss) income	(50.8		)	(0.6		)	49.4			20.0			—			18.0
Interest expense	(3.9		)	(119.3		)	(207.3		)	(0.2		)	—			(330.7		)
Other (expense) income, net	18.0			35.9			(68.8		)	11.4			—			(3.5		)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(36.7		)	(84.0		)	(226.7		)	31.2			—			(316.2		)
Equity in (loss) income of subsidiaries	(281.3		)	29.3			3.3			—			248.7			—
Income tax benefit (expense)	129.4			(0.1		)	2.9			(4.6		)	—			127.6
Net (loss) income	$	(188.6	)	$	(54.8	)	$	(220.5	)	$	26.6		$	248.7		$	(188.6	)
Other comprehensive loss	(87.1		)	(9.8		)	(8.5		)	(77.2		)	95.5			(87.1		)
Comprehensive loss	$	(275.7	)	$	(64.6	)	$	(229.0	)	$	(50.6	)	$	344.2		$	(275.7	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(109.5	)	$	122.1		$	104.8		$	74.5		$	—		$	191.9
Cash flows from investing activities:
Capital expenditures	(26.7		)	(5.2		)	(77.3		)	(23.4		)	—			(132.6		)
Distributions of capital on equity investments	—			—			—			22.5			—			22.5
Restricted Cash	—			—			(3.8		)	—			—			(3.8		)
Changes in other assets and liabilities and other	0.3			—			8.0			(2.2		)	—			6.1
Other, principally change in intercompany investing activities	—			(39.9		)	—			—			39.9			—
Net cash used in investing activities	(26.4		)	(45.1		)	(73.1		)	(3.1		)	39.9			(107.8		)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	—			(76.5		)	—			(3.6		)	—			(80.1		)
Payments on license obligations	(15.1		)	—			(9.9		)	—			—			(25.0		)
Redemptions of common stock under stock-based compensation plans	(4.4		)	—			—			—			—			(4.4		)
Other, principally change in intercompany financing activities	144.6			—			(25.9		)	(78.8		)	(39.9		)	—
Net cash provided by (used in) financing activities	125.1			(76.5		)	(35.8		)	(82.4		)	(39.9		)	(109.5		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.6		)	(1.3		)	—			(1.9		)
Increase (decrease) in cash and cash equivalents	(10.8		)	0.5			(4.7		)	(12.3		)	—			(27.3		)
Cash and cash equivalents, beginning of period	43.2			—			4.7			80.8			—			128.7
Cash and cash equivalents, end of period	$	32.4		$	0.5		$	—		$	68.5		$	—		$	101.4

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(33.1	)	$	(69.4	)	$	127.7		$	89.2		$	—		$	114.4
Cash flows from investing activities:
Capital expenditures	(8.6		)	(12.4		)	(95.6		)	(26.2		)	—			(142.8		)
Distributions of capital on equity investments	—			0.8			—			34.4			—			35.2
Changes in other assets and liabilities and other	—			—			4.0			5.5			—			9.5
Other, principally change in intercompany investing activities	—			114.2			—			—			(114.2		)	—
Net cash (used in) provided by investing activities	(8.6		)	102.6			(91.6		)	13.7			(114.2		)	(98.1		)
Cash flows from financing activities:
Net payments on long-term debt	—			(31.5		)	—			(4.7		)	—			(36.2		)
Payments on license obligations	(13.5		)	—			(5.2		)	—			—			(18.7		)
Contingent earnout payments	—			—			(0.5		)	—			—			(0.5		)
Issuance (redemptions) of common stock under stock-based compensation plans	0.9			—			(29.6		)	(116.0		)	145.6			0.9
Other, principally change in intercompany financing activities	58.2			—			(12.0		)	(14.8		)	(31.4		)	—
Net cash provided by (used in) financing activities	45.6			(31.5		)	(47.3		)	(135.5		)	114.2			(54.5		)
Effect of exchange rate changes on cash and cash equivalents	0.1			(0.4		)	(1.8		)	(2.4		)	—			(4.5		)
Increase (decrease) in cash and cash equivalents	4.0			1.3			(13.0		)	(35.0		)	—			(42.7		)
Cash and cash equivalents, beginning of period	37.9			0.1			28.8			105.0			—			171.8
Cash and cash equivalents, end of period	$	41.9		$	1.4		$	15.8		$	70.0		$	—		$	129.1

XML

Description of the Business and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with SEC and U.S. GAAP requirements. All monetary values set forth in these financial statements are in United States dollars ("USD" or "$") unless otherwise stated herein.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations and comprehensive loss and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K. Interim results of operations are not necessarily indicative of results of operations for a full year.

New Accounting Guidance

New Accounting Guidance - Recently Adopted

In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory. ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted this guidance prospectively at the beginning of the second quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations, or cash flows.

In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The amended guidance simplifies the accounting for equity investments and eliminates the requirements in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this guidance prospectively at the beginning of the first quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations or cash flows. 

New Accounting Guidance - Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers. The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue from contracts with customers. The guidance (including subsequent amendments) supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with earlier adoption permitted for fiscal years beginning after December 15, 2016. We are currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact and timing of adopting this guidance.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amended guidance is intended to simplify several aspects of accounting for share-based payment award transactions, including income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 has separate transition guidance for each element of the new standard and is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance.

XML

Business Segments (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Operating information by segment

The following tables present revenue, cost of revenue, SG&A, R&D, employee termination and restructuring, D&A, operating income and earnings from equity investments for the three and six months ended June 30,2016 and 2015, respectively, by business segment. Certain unallocated corporate amounts consisted primarily of general and administrative expenses, other income (expense) and D&A.

	Three Months Ended June 30, 2016
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	236.0	$	44.1	$	83.4	$	363.5
Product sales	205.9		8.9		—		214.8
Instant games	—		150.9		—		150.9
Total revenue	441.9		203.9		83.4		729.2
Operating expenses:
Cost of services (1)	44.4		26.8		30.2		101.4
Cost of product sales (1)	93.4		7.3		—		100.7
Cost of instant games (1)	—		74.1		—		74.1
Selling, general and administrative	61.2		17.8		26.8		105.8
Research and development	38.5		2.6		8.4		49.5
Employee termination and restructuring	3.4		0.2		0.5		4.1
Depreciation and amortization	154.3		17.2		3.8		175.3
Segment operating income	$	46.7	$	57.9	$	13.7	$	118.3
Unallocated corporate costs							(59.2		)
Consolidated operating income							$	59.1
Earnings from equity investments	$	1.4	$	6.6	$	—	$	8.0

(1) Exclusive of D&A.

	Three Months Ended June 30, 2015
	Gaming			Lottery		Interactive		Total
Revenue:
Services	$	240.4		$	45.9	$	51.6	$	337.9
Product sales	209.3			8.8		—		218.1
Instant games	—			135.5		—		135.5
Total revenue	449.7			190.2		51.6		691.5
Operating expenses:
Cost of services (1)	53.1			27.5		18.0		98.6
Cost of product sales (1)	100.9			7.0		—		107.9
Cost of instant games (1)	—			68.8		—		68.8
Selling, general and administrative	71.2			16.4		15.2		102.8
Research and development	41.1			1.5		5.4		48.0
Employee termination and restructuring	2.7			—		0.3		3.0
Depreciation and amortization	181.5			20.0		5.4		206.9
Segment operating (loss) income	$	(0.8	)	$	49.0	$	7.3	$	55.5
Unallocated corporate costs								(55.6		)
Consolidated operating loss								$	(0.1	)
Earnings from equity investments	$	1.8		$	1.5	$	—	$	3.3

(1) Exclusive of D&A.

	Six Months Ended June 30, 2016
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	468.6	$	89.2	$	156.0	$	713.8
Product sales	395.0		17.4		—		412.4
Instant games	—		285.0		—		285.0
Total revenue	863.6		391.6		156.0		1,411.2
Operating expenses:
Cost of services (1)	85.6		54.9		55.8		196.3
Cost of product sales (1)	181.2		13.9		—		195.1
Cost of instant games (1)	—		141.1		—		141.1
Selling, general and administrative	129.1		34.3		51.3		214.7
Research and development	76.7		5.2		15.7		97.6
Employee termination and restructuring	5.0		1.3		0.5		6.8
Depreciation and amortization	295.9		35.0		7.5		338.4
Segment operating income	$	90.1	$	105.9	$	25.2	$	221.2
Unallocated corporate costs							(111.8		)
Consolidated operating income							$	109.4
Earnings from equity investments	$	1.4	$	9.8	$	—	$	11.2

(1) Exclusive of D&A.

	Six Months Ended June 30, 2015
	Gaming		Lottery		Interactive		Total
Revenue:
Services	$	478.3	$	91.5	$	98.5	$	668.3
Product sales	397.2		20.3		—		417.5
Instant games	—		264.4		—		264.4
Total revenue	875.5		376.2		98.5		1,350.2
Operating expenses:
Cost of services (1)	98.6		55.9		34.6		189.1
Cost of product sales (1)	188.7		17.1		—		205.8
Cost of instant games (1)	—		135.8		—		135.8
Selling, general and administrative	145.4		33.5		30.3		209.2
Research and development	80.9		3.1		10.9		94.9
Employee termination and restructuring	6.9		0.2		1.0		8.1
Depreciation and amortization	324.8		41.3		10.5		376.6
Segment operating income	$	30.2	$	89.3	$	11.2	$	130.7
Unallocated corporate costs							(112.7		)
Consolidated operating income							$	18.0
Earnings from equity investments	$	1.7	$	4.7	$	—	$	6.4

(1) Exclusive of D&A.

Reconciliation of segment operating income (loss)

The following table presents a reconciliation of business segment operating income to net loss before income taxes for each period:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Business segment operating income	$	118.3		$	55.5		$	221.2		$	130.7
Unallocated corporate costs	(59.2		)	(55.6		)	(111.8		)	(112.7		)
Consolidated operating income (loss)	59.1			(0.1		)	109.4			18.0
Interest expense	(165.3		)	(166.4		)	(331.0		)	(330.7		)
Earnings from equity investments	8.0			3.3			11.2			6.4
Gain on early extinguishment of debt	25.2			—			25.2			—
Other income (expense), net	1.7			(4.3		)	2.4			(9.9		)
Net loss before income taxes	$	(71.3	)	$	(167.5	)	$	(182.8	)	$	(316.2	)

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Restructuring Plans (Tables)

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Summary of employee termination and restructuring cost by segment

As additional integration-related activities are initiated, we expect to incur additional costs related to those activities.

Business Segment		Employee Termination Costs		Property Costs		Other		Total
Gaming	Three Months Ended June 30, 2016	$	2.2	$	—	$	1.2	$	3.4
	Six Months Ended June 30, 2016	3.4		0.4		1.2		5.0
	Cumulative	24.6		0.4		2.8		27.8
	Expected Total	27.1		0.4		2.8		30.3
Lottery	Three Months Ended June 30, 2016	—		—		0.2		0.2
	Six Months Ended June 30, 2016	1.1		—		0.2		1.3
	Cumulative	2.3		—		0.2		2.5
	Expected Total	2.3		—		0.2		2.5
Interactive	Three Months Ended June 30, 2016	0.2		—		0.3		0.5
	Six Months Ended June 30, 2016	0.2		—		0.3		0.5
	Cumulative	2.7		—		2.0		4.7
	Expected Total	2.7		—		2.0		4.7
Unallocated corporate (1)	Three Months Ended June 30, 2016	0.1		—		—		0.1
	Six Months Ended June 30, 2016	0.1		—		—		0.1
	Cumulative	6.4		4.3		2.1		12.8
	Expected Total	8.9		4.3		2.1		15.3
Total	Three Months Ended June 30, 2016	$	2.5	$	—	$	1.7	$	4.2
	Six Months Ended June 30, 2016	$	4.8	$	0.4	$	1.7	$	6.9
	Cumulative	$	36.0	$	4.7	$	7.1	$	47.8
	Expected Total	$	41.0	$	4.7	$	7.1	$	52.8

(1) Cumulative unallocated corporate employee termination costs primarily includes cash severance paid to our former chief executive officer and special termination benefits related to the retirement of our former chief financial officer.

Summary of restructuring charges and accrual

The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the six months ended June 30, 2016:

	Employee Termination Costs			Property Costs			Other			Total
Balance as of December 31, 2015	$	7.3		$	0.8		$	1.4		$	9.5
Additional accruals	4.8			0.4			1.7			6.9
Cash payments	(6.2		)	(0.9		)	(0.2		)	(7.3		)
Balance as of June 30, 2016	$	5.9		$	0.3		$	2.9		$	9.1

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Basic and Diluted Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of the Computation of Earnings Per Share

The following represents a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share available to common stockholders for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Loss (numerator):
Net loss	$	(51.7	)	$	(102.2	)	$	(144.0	)	$	(188.6	)
Shares (denominator):
Basic weighted-average common shares outstanding	87.3			85.9			86.9			85.6
Diluted weighted-average common shares outstanding	87.3			85.9			86.9			85.6
Basic and diluted net loss per share amounts:
Basic net loss per share	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)
Diluted net loss per share	$	(0.59	)	$	(1.19	)	$	(1.66	)	$	(2.20	)

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Accounts and Notes Receivable and Credit Quality of Notes Receivable (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Summary of Components of Accounts Receivable, Net

The following summarizes the components of current and long-term accounts and notes receivable, net:

	June 30, 2016			December 31, 2015
Current:
Accounts receivable	$	514.0		$	497.7
Notes receivable	154.5			180.4
Allowance for doubtful accounts	(27.2		)	(23.3		)
Current accounts and notes receivable, net	$	641.3		$	654.8
Long-term:
Notes receivable, net	43.8			51.3
Total accounts and notes receivable, net	$	685.1		$	706.1

Summary of Components of Notes Receivable

The following summarizes the components of total notes receivable, net:

	June 30, 2016			Balances over 90 days past due			December 31, 2015			Balances over 90 days past due
Notes receivable:
Domestic	$	39.6		$	2.0		$	62.4		$	2.6
International	159.0			41.5			169.8			26.6
Total notes receivable	198.6			43.5			232.2			29.2
Notes receivable allowance for doubtful accounts:
Domestic	(2.3		)	(2.3		)	(2.6		)	(2.5		)
International	(12.5		)	(12.5		)	(10.6		)	(9.5		)
Total notes receivable allowance for doubtful accounts	(14.8		)	(14.8		)	(13.2		)	(12.0		)
Notes receivable, net	$	183.8		$	28.7		$	219.0		$	17.2

Schedule of Notes Receivable Evaluated For Impairment

The following tables detail our evaluation of notes receivable for impairment as of June 30, 2016 and December 31, 2015:

	June 30, 2016		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	39.6	$	13.7	$	25.9
International	159.0		81.7		77.3
Total notes receivable	$	198.6	$	95.4	$	103.2

	December 31, 2015		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	62.4	$	20.7	$	41.7
International	169.8		101.8		68.0
Total notes receivable	$	232.2	$	122.5	$	109.7

Schedule of Allowance For Doubtful Notes Receivable

The following table reconciles the allowance for doubtful notes receivable from December 31, 2015 to June 30, 2016:

	Total			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
Beginning balance at December 31, 2015	$	13.2		$	12.9		$	0.3
Charge-offs	(1.3		)	(1.3		)	—
Recoveries	(0.2		)	(0.2		)	—
Provision	3.1			3.1			—
Ending balance at June 30, 2016	$	14.8		$	14.5		$	0.3

The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to June 30, 2015:

	Total			Ending Balance Individually Evaluated for Impairment			Ending Balance Collectively Evaluated for Impairment
Beginning balance at December 31, 2014	$	5.9		$	5.9		$	—
Charge-offs	(2.1		)	(2.1		)	—
Recoveries	(0.5		)	(0.4		)	(0.1		)
Provision	6.4			5.2			1.2
Ending balance at June 30, 2015	$	9.7		$	8.6		$	1.1

Schedule of Notes Receivable Concentration Risk

Our notes receivable were concentrated in the following international gaming jurisdictions at June 30, 2016:

Mexico	26	%
Peru	17	%
Argentina	9	%
Columbia	6	%
Other (less than 5% individually)	22	%
Total international notes receivable as a percentage of total notes receivable	80	%

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Inventories (Tables)

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consisted of the following as of the dates presented below:

	June 30, 2016		December 31, 2015
Parts and work-in-process	$	128.6	$	118.3
Finished goods	120.4		130.2
Total inventories	$	249.0	$	248.5

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Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Schedule of Components of Property and Equipment

Property and equipment, net consisted of the following:

	June 30, 2016			December 31, 2015
Land	$	38.4		$	38.5
Buildings and leasehold improvements	184.7			185.2
Gaming and lottery machinery and equipment	1,048.5			1,084.6
Furniture and fixtures	31.4			36.0
Construction in progress	27.9			25.5
Other property and equipment	264.5			271.0
Less: accumulated depreciation	(899.9		)	(846.8		)
Total property and equipment, net	$	695.5		$	794.0

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Intangible Assets, net and Goodwill (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value, which materially approximates the expected pattern of use of these intangible assets.

Intangible Assets	Gross Carrying Amount		Accumulated Amortization			Net Balance
Balance as of June 30, 2016
Amortizable intangible assets:
Patents	$	26.3	$	(13.1	)	$	13.2
Customer relationships	877.7		(136.8		)	740.9
Licenses	412.5		(121.8		)	290.7
Intellectual property(1)	731.5		(170.3		)	561.2
Trade names	97.4		(4.9		)	92.5
Brand names	124.4		(25.6		)	98.8
Non-compete agreements	0.2		(0.2		)	—
	2,270.0		(472.7		)	1,797.3
Non-amortizable intangible assets:
Trade names	96.7		(2.1		)	94.6
Total intangible assets	$	2,366.7	$	(474.8	)	$	1,891.9
Balance as of December 31, 2015
Amortizable intangible assets:
Patents	$	26.8	$	(12.5	)	$	14.3
Customer relationships	877.7		(109.1		)	768.6
Licenses	326.1		(91.6		)	234.5
Intellectual property(1)	731.1		(124.5		)	606.6
Trade names	97.5		(1.9		)	95.6
Brand names	124.0		(18.9		)	105.1
Non-compete agreements	0.3		(0.3		)	—
	2,183.5		(358.8		)	1,824.7
Non-amortizable intangible assets:
Trade names	97.4		(2.1		)	95.3
Total intangible assets	$	2,280.9	$	(360.9	)	$	1,920.0

(1) Includes $33 million of in-process R&D assets that will not be subject to amortization until they reach commercial feasibility.

Reconciliation of the Carrying Amount of Goodwill, by Business Segment

The table below reconciles the change in the carrying amount of goodwill by business segment for the period from

December 31, 2015 to June 30, 2016.

Goodwill	Gaming			Lottery		Interactive		Totals
Balance as of December 31, 2015	$	2,486.0		$	417.9	$	109.8	$	3,013.7
Foreign currency adjustments	(23.0		)	1.8		—		(21.2		)
Balance as of June 30, 2016	$	2,463.0		$	419.7	$	109.8	$	2,992.5

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Software, net (Tables)

6 Months Ended

Jun. 30, 2016

Capitalized Computer Software, Net [Abstract]

Schedule of Software, net

Software, net consisted of the following:

	June 30, 2016			December 31, 2015
Software	$	894.8		$	854.2
Accumulated amortization	(451.6		)	(368.3		)
Software, net	$	443.2		$	485.9

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Long-Term and Other Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Outstanding Debt

The following reflects our outstanding debt as of the dates indicated below:

	Principal		Unamortized debt discount			Unamortized deferred financing costs			Book value June 30, 2016
Senior Secured Credit Facilities:
Revolver, varying interest rate, due 2018	$	80.0	$	—		$	—		$	80.0
Term Loan, varying interest rate, due 2020	2,242.5		(6.9		)	(47.0		)	2,188.6
Term Loan, varying interest rate, due 2021	1,970.0		(15.2		)	(44.8		)	1,910.0
2018 Notes	250.0		—			(1.6		)	248.4
2020 Notes	243.5		—			(2.6		)	240.9
2021 Notes	340.6		(1.6		)	(5.1		)	333.9
Secured Notes	950.0		—			(15.1		)	934.9
Unsecured Notes	2,200.0		—			(39.1		)	2,160.9
Capital lease obligations, 3.9% interest as of June 30, 2016 payable monthly through 2019	19.7		—			—			19.7
Total long-term debt outstanding	$	8,296.3	$	(23.7	)	$	(155.3	)	$	8,117.3
Less: current portion of long-term debt									(49.7		)
Long-term debt, excluding current portion									$	8,067.6
	Principal		Unamortized debt discount			Unamortized deferred financing costs			Book value December 31, 2015
Senior Secured Credit Facilities:
Revolver, varying interest rate, due 2018	$	95.0	$	—		$	—		$	95.0
Term Loan, varying interest rate, due 2020	2,254.0		(7.8		)	(52.5		)	2,193.7
Term Loan, varying interest rate, due 2021	1,980.0		(16.7		)	(49.2		)	1,914.1
2018 Notes	250.0		—			(2.0		)	248.0
2020 Notes	300.0		—			(3.6		)	296.4
2021 Notes	350.0		(1.8		)	(5.6		)	342.6
Secured Notes	950.0		—			(16.4		)	933.6
Unsecured Notes	2,200.0		—			(42.1		)	2,157.9
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019	25.7		—			—			25.7
Total long-term debt outstanding	$	8,404.7	$	(26.3	)	$	(171.4	)	$	8,207.0
Less: current portion of long-term debt									(50.3		)
Long-term debt, excluding current portion									$	8,156.7

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Stockholders' Deficit (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of RSUs Outstanding Under Stock-Based Compensation Plans

A summary of the changes in RSUs outstanding under our stock-based compensation plans during the six months ended June 30, 2016 is presented below:

	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Unvested RSUs as of December 31, 2015	5.6		$	13.05
Granted	0.2		8.21
Vested	(0.8	)	12.46
Canceled	(0.4	)	12.56
Unvested RSUs as of March 31, 2016	4.6		$	13.00
Granted	1.4		9.60
Vested	(0.6	)	12.51
Canceled	(0.1	)	13.35
Unvested RSUs as of June 30, 2016	5.3		$	12.16

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Supplemental Disclosure of Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Disclosure of Cash Flow Information

Additional cash flow information is presented as follows:

	Six Months Ended June 30,
	2016		2015
Interest paid	$	313.6	$	294.6
Income taxes paid (received)	$	6.6	$	(4.1	)

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Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables)

6 Months Ended

Jun. 30, 2016

Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract]

Supplemental Condensed Consolidating Balance Sheet

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	32.4		$	0.5		$	—	$	68.5	$	—		$	101.4
Restricted cash	—			—			24.4		0.1		—			24.5
Accounts receivable, net	—			98.0			226.5		176.8		—			501.3
Notes receivable, net	—			—			91.2		48.8		—			140.0
Inventories	—			35.8			89.4		136.2		(12.4		)	249.0
Prepaid expenses, deposits and other current assets	31.6			14.1			35.1		40.1		—			120.9
Property and equipment, net	11.9			101.4			430.4		166.3		(14.5		)	695.5
Investment in subsidiaries	3,202.2			851.8			796.8		—		(4,850.8		)	—
Goodwill	—			188.3			1,988.2		816.0		—			2,992.5
Intangible assets, net	207.1			38.7			1,423.6		222.5		—			1,891.9
Intercompany balances	—			6,531.8			—		—		(6,531.8		)	—
Software, net	52.4			25.4			316.3		49.1		—			443.2
Other assets	291.0			119.3			44.7		214.6		(364.7		)	304.9
Total assets	$	3,828.6		$	8,005.1		$	5,466.6	$	1,939.0	$	(11,774.2	)	$	7,465.1
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	6.7	$	—		$	49.7
Other current liabilities	74.3			153.2			208.4		159.8		—			595.7
Long-term debt, excluding current portion	248.4			7,806.2			—		13.0		—			8,067.6
Other long-term liabilities	179.2			14.2			498.8		91.5		(364.7		)	419.0
Intercompany balances	4,993.6			—			1,503.7		34.5		(6,531.8		)	—
Stockholders' (deficit) equity	(1,666.9		)	(11.5		)	3,255.7		1,633.5		(4,877.7		)	(1,666.9		)
Total liabilities and stockholders' (deficit) equity	$	3,828.6		$	8,005.1		$	5,466.6	$	1,939.0	$	(11,774.2	)	$	7,465.1

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015

	Parent  Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	43.2		$	—		$	4.7	$	80.8	$	—		$	128.7
Restricted cash	—			—			20.0		0.2		—			20.2
Accounts receivable, net	—			94.6			233.6		158.9		—			487.1
Notes receivable, net	—			—			114.2		53.5		—			167.7
Inventories	—			36.9			104.2		119.6		(12.2		)	248.5
Prepaid expenses, deposits and other current assets	26.8			7.0			52.1		37.4		—			123.3
Property and equipment, net	8.2			106.4			502.2		188.7		(11.5		)	794.0
Investment in subsidiaries	3,280.9			838.1			648.3		—		(4,767.3		)	—
Goodwill	—			186.0			1,990.5		837.2		—			3,013.7
Intangible assets, net	138.3			39.8			1,505.8		236.1		—			1,920.0
Intercompany balances	—			6,511.1			—		—		(6,511.1		)	—
Software, net	35.6			32.7			359.8		57.8		—			485.9
Other assets	232.5			123.4			51.7		241.7		(306.2		)	343.1
Total assets	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	7.3	$	—		$	50.3
Other current liabilities	63.7			150.5			245.4		144.0		—			603.6
Long-term debt, excluding current portion	248.0			7,890.3			—		18.4		—			8,156.7
Other long-term liabilities	119.1			14.5			502.1		87.7		(306.3		)	417.1
Intercompany balances	4,830.2			—			1,558.2		122.6		(6,511.0		)	—
Stockholders' (deficit) equity	(1,495.5		)	(122.3		)	3,281.4		1,631.9		(4,791.0		)	(1,495.5		)
Total liabilities and stockholders' (deficit) equity	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2

Supplemental Condensed Consolidating Statement of Income

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	126.4		$	408.6		$	265.5		$	(71.3	)	$	729.2
Cost of services, cost of product sales and cost of instant games (1)	—			86.1			108.8			152.6			(71.3		)	276.2
Selling, general and administrative	36.9			11.7			51.7			44.6			—			144.9
Research and development	1.9			2.3			39.1			8.4			—			51.7
Employee termination and restructuring	0.1			(0.1		)	3.3			0.9			—			4.2
Depreciation and amortization	13.0			10.3			141.1			28.7			—			193.1
Operating (loss) income	(51.9		)	16.1			64.6			30.3			—			59.1
Interest expense	—			(35.1		)	(130.1		)	(0.1		)	—			(165.3		)
Gain on early extinguishment of debt	—			25.2			—			—			—			25.2
Other (expense) income, net	(24.7		)	52.5			(24.2		)	6.1			—			9.7
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(76.6		)	58.7			(89.7		)	36.3			—			(71.3		)
Equity in (loss) income of subsidiaries	—			11.3			9.3			—			(20.6		)	—
Income tax benefit (expense)	24.9			—			—			(5.3		)	—			19.6
Net (loss) income	$	(51.7	)	$	70.0		$	(80.4	)	$	31.0		$	(20.6	)	$	(51.7	)
Other comprehensive (loss) income	(30.2		)	3.2			(8.1		)	(33.4		)	38.3			(30.2		)
Comprehensive (loss) income	$	(81.9	)	$	73.2		$	(88.5	)	$	(2.4	)	$	17.7		$	(81.9	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	106.4		$	430.6		$	261.5		$	(107.0	)	$	691.5
Cost of services, cost of product sales and cost of instant games (1)	—			79.0			139.5			163.8			(107.0		)	275.3
Selling, general and administrative	16.7			18.4			70.8			35.0			—			140.9
Research and development	—			1.4			39.3			7.3			—			48.0
Employee termination and restructuring	1.4			0.7			2.4			0.7			—			5.2
Depreciation and amortization	8.1			9.8			170.8			33.5			—			222.2
Operating (loss) income	(26.2		)	(2.9		)	7.8			21.2			—			(0.1		)
Interest expense	(5.3		)	(83.1		)	(77.9		)	(0.1		)	—			(166.4		)
Other (expense) income, net	6.2			18.3			(29.0		)	3.5			—			(1.0		)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(25.3		)	(67.7		)	(99.1		)	24.6			—			(167.5		)
Equity in (loss) income of subsidiaries	(143.0		)	22.7			9.5			—			110.8			—
Income tax benefit (expense)	66.1			(0.1		)	2.9			(3.6		)	—			65.3
Net (loss) income	$	(102.2	)	$	(45.1	)	$	(86.7	)	$	21.0		$	110.8		$	(102.2	)
Other comprehensive income (loss)	23.1			3.3			(25.4		)	42.4			(20.3		)	23.1
Comprehensive (loss) income	$	(79.1	)	$	(41.8	)	$	(112.1	)	$	63.4		$	90.5		$	(79.1	)

(1) Exclusive of D&A.

Supplemental Condensed Consolidating Statement of Cash Flows

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2016

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(109.5	)	$	122.1		$	104.8		$	74.5		$	—		$	191.9
Cash flows from investing activities:
Capital expenditures	(26.7		)	(5.2		)	(77.3		)	(23.4		)	—			(132.6		)
Distributions of capital on equity investments	—			—			—			22.5			—			22.5
Restricted Cash	—			—			(3.8		)	—			—			(3.8		)
Changes in other assets and liabilities and other	0.3			—			8.0			(2.2		)	—			6.1
Other, principally change in intercompany investing activities	—			(39.9		)	—			—			39.9			—
Net cash used in investing activities	(26.4		)	(45.1		)	(73.1		)	(3.1		)	39.9			(107.8		)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	—			(76.5		)	—			(3.6		)	—			(80.1		)
Payments on license obligations	(15.1		)	—			(9.9		)	—			—			(25.0		)
Redemptions of common stock under stock-based compensation plans	(4.4		)	—			—			—			—			(4.4		)
Other, principally change in intercompany financing activities	144.6			—			(25.9		)	(78.8		)	(39.9		)	—
Net cash provided by (used in) financing activities	125.1			(76.5		)	(35.8		)	(82.4		)	(39.9		)	(109.5		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.6		)	(1.3		)	—			(1.9		)
Increase (decrease) in cash and cash equivalents	(10.8		)	0.5			(4.7		)	(12.3		)	—			(27.3		)
Cash and cash equivalents, beginning of period	43.2			—			4.7			80.8			—			128.7
Cash and cash equivalents, end of period	$	32.4		$	0.5		$	—		$	68.5		$	—		$	101.4

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2015

	Parent  Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(33.1	)	$	(69.4	)	$	127.7		$	89.2		$	—		$	114.4
Cash flows from investing activities:
Capital expenditures	(8.6		)	(12.4		)	(95.6		)	(26.2		)	—			(142.8		)
Distributions of capital on equity investments	—			0.8			—			34.4			—			35.2
Changes in other assets and liabilities and other	—			—			4.0			5.5			—			9.5
Other, principally change in intercompany investing activities	—			114.2			—			—			(114.2		)	—
Net cash (used in) provided by investing activities	(8.6		)	102.6			(91.6		)	13.7			(114.2		)	(98.1		)
Cash flows from financing activities:
Net payments on long-term debt	—			(31.5		)	—			(4.7		)	—			(36.2		)
Payments on license obligations	(13.5		)	—			(5.2		)	—			—			(18.7		)
Contingent earnout payments	—			—			(0.5		)	—			—			(0.5		)
Issuance (redemptions) of common stock under stock-based compensation plans	0.9			—			(29.6		)	(116.0		)	145.6			0.9
Other, principally change in intercompany financing activities	58.2			—			(12.0		)	(14.8		)	(31.4		)	—
Net cash provided by (used in) financing activities	45.6			(31.5		)	(47.3		)	(135.5		)	114.2			(54.5		)
Effect of exchange rate changes on cash and cash equivalents	0.1			(0.4		)	(1.8		)	(2.4		)	—			(4.5		)
Increase (decrease) in cash and cash equivalents	4.0			1.3			(13.0		)	(35.0		)	—			(42.7		)
Cash and cash equivalents, beginning of period	37.9			0.1			28.8			105.0			—			171.8
Cash and cash equivalents, end of period	$	41.9		$	1.4		$	15.8		$	70.0		$	—		$	129.1

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Description of the Business and Summary of Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2016 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business segments	3

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Business Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenue:
Services		$ 363.5	$ 337.9	$ 713.8	$ 668.3
Product sales		214.8	218.1	412.4	417.5
Instant games		150.9	135.5	285.0	264.4
Revenue		729.2	691.5	1,411.2	1,350.2
Cost of services	[1]	101.4	98.6	196.3	189.1
Cost of product sales	[1]	100.7	107.9	195.1	205.8
Cost of instant games	[1]	74.1	68.8	141.1	135.8
Selling, general and administrative		144.9	140.9	287.2	286.8
Research and development		51.7	48.0	101.5	94.9
Employee termination and restructuring		4.2	5.2	6.9	13.4
Depreciation and amortization		193.1	222.2	373.7	406.4
Operating income		59.1	(0.1)	109.4	18.0
Earnings from equity investments		8.0	3.3	11.2	6.4
Operating Segments
Revenue:
Services		363.5	337.9	713.8	668.3
Product sales		214.8	218.1	412.4	417.5
Instant games		150.9	135.5	285.0	264.4
Revenue		729.2	691.5	1,411.2	1,350.2
Cost of services	[2]	101.4	98.6	196.3	189.1
Cost of product sales	[2]	100.7	107.9	195.1	205.8
Cost of instant games	[2]	74.1	68.8	141.1	135.8
Selling, general and administrative		105.8	102.8	214.7	209.2
Research and development		49.5	48.0	97.6	94.9
Employee termination and restructuring		4.1	3.0	6.8	8.1
Depreciation and amortization		175.3	206.9	338.4	376.6
Operating income		118.3	55.5	221.2	130.7
Unallocated corporate costs
Revenue:
Unallocated corporate costs		(59.2)	(55.6)	(111.8)	(112.7)
Gaming
Revenue:
Earnings from equity investments		1.4	1.8
Gaming | Operating Segments
Revenue:
Services		236.0	240.4	468.6	478.3
Product sales		205.9	209.3	395.0	397.2
Instant games		0.0	0.0	0.0	0.0
Revenue		441.9	449.7	863.6	875.5
Cost of services		44.4	53.1	85.6	98.6
Cost of product sales		93.4	100.9	181.2	188.7
Cost of instant games		0.0	0.0	0.0	0.0
Selling, general and administrative		61.2	71.2	129.1	145.4
Research and development		38.5	41.1	76.7	80.9
Employee termination and restructuring		3.4	2.7	5.0	6.9
Depreciation and amortization		154.3	181.5	295.9	324.8
Operating income		46.7	(0.8)	90.1	30.2
Earnings from equity investments				1.4	1.7
Lottery
Revenue:
Earnings from equity investments		6.6	1.5
Lottery | Operating Segments
Revenue:
Services		44.1	45.9	89.2	91.5
Product sales		8.9	8.8	17.4	20.3
Instant games		150.9	135.5	285.0	264.4
Revenue		203.9	190.2	391.6	376.2
Cost of services		26.8	27.5	54.9	55.9
Cost of product sales		7.3	7.0	13.9	17.1
Cost of instant games		74.1	68.8	141.1	135.8
Selling, general and administrative		17.8	16.4	34.3	33.5
Research and development		2.6	1.5	5.2	3.1
Employee termination and restructuring		0.2	0.0	1.3	0.2
Depreciation and amortization		17.2	20.0	35.0	41.3
Operating income		57.9	49.0	105.9	89.3
Earnings from equity investments				9.8	4.7
Interactive
Revenue:
Earnings from equity investments		0.0	0.0
Interactive | Operating Segments
Revenue:
Services		83.4	51.6	156.0	98.5
Product sales		0.0	0.0	0.0	0.0
Instant games		0.0	0.0	0.0	0.0
Revenue		83.4	51.6	156.0	98.5
Cost of services		30.2	18.0	55.8	34.6
Cost of product sales		0.0	0.0	0.0	0.0
Cost of instant games		0.0	0.0	0.0	0.0
Selling, general and administrative		26.8	15.2	51.3	30.3
Research and development		8.4	5.4	15.7	10.9
Employee termination and restructuring		0.5	0.3	0.5	1.0
Depreciation and amortization		3.8	5.4	7.5	10.5
Operating income		$ 13.7	$ 7.3	25.2	11.2
Earnings from equity investments				$ 0.0	$ 0.0

[1] Exclusive of D&A.

[2] Exclusive of D&A.

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Business Segments - Reconciliation of Segment Operating Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reconciliation of reportable segment operating income to consolidated income before income taxes
Segment operating income (loss) from continuing operations	$ 59.1	$ (0.1)	$ 109.4	$ 18.0
Interest expense	(165.3)	(166.4)	(331.0)	(330.7)
Earnings from equity investments	8.0	3.3	11.2	6.4
Gain on early extinguishment of debt	25.2	0.0	25.2	0.0
Other income (expense), net	1.7	(4.3)	2.4	(9.9)
Net loss from continuing operations before income taxes	(71.3)	(167.5)	(182.8)	(316.2)
Operating Segments
Reconciliation of reportable segment operating income to consolidated income before income taxes
Segment operating income (loss) from continuing operations	118.3	55.5	221.2	130.7
Unallocated corporate costs
Reconciliation of reportable segment operating income to consolidated income before income taxes
Segment operating income (loss) from continuing operations	$ (59.2)	$ (55.6)	$ (111.8)	$ (112.7)

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Business Segments - Additional Information (Details)	6 Months Ended
	Jun. 30, 2016 Segment
Segment Reporting [Abstract]
Number of business segments	3

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Restructuring Plans - Employee Termination and Restructuring Cost by Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	$ 4.2	$ 5.2	$ 6.9	$ 13.4
Cumulative	47.8		47.8
Expected Total	52.8		52.8
Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	2.5		4.8
Cumulative	36.0		36.0
Expected Total	41.0		41.0
Property Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		0.4
Cumulative	4.7		4.7
Expected Total	4.7		4.7
Other
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	1.7		1.7
Cumulative	7.1		7.1
Expected Total	7.1		7.1
Business Segment
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	4.1	3.0	6.8	8.1
Business Segment | Gaming
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	3.4		5.0
Cumulative	27.8		27.8
Expected Total	30.3		30.3
Business Segment | Gaming | Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	2.2		3.4
Cumulative	24.6		24.6
Expected Total	27.1		27.1
Business Segment | Gaming | Property Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		0.4
Cumulative	0.4		0.4
Expected Total	0.4		0.4
Business Segment | Gaming | Other
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	1.2		1.2
Cumulative	2.8		2.8
Expected Total	2.8		2.8
Business Segment | Lottery
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.2	$ 0.0	1.3	$ 0.2
Cumulative	2.5		2.5
Expected Total	2.5		2.5
Business Segment | Lottery | Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		1.1
Cumulative	2.3		2.3
Expected Total	2.3		2.3
Business Segment | Lottery | Property Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		0.0
Cumulative	0.0		0.0
Expected Total	0.0		0.0
Business Segment | Lottery | Other
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.2		0.2
Cumulative	0.2		0.2
Expected Total	0.2		0.2
Business Segment | Interactive
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.5		0.5
Cumulative	4.7		4.7
Expected Total	4.7		4.7
Business Segment | Interactive | Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.2		0.2
Cumulative	2.7		2.7
Expected Total	2.7		2.7
Business Segment | Interactive | Property Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		0.0
Cumulative	0.0		0.0
Expected Total	0.0		0.0
Business Segment | Interactive | Other
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.3		0.3
Cumulative	2.0		2.0
Expected Total	2.0		2.0
Unallocated corporate
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.1		0.1
Cumulative	12.8		12.8
Expected Total	15.3		15.3
Unallocated corporate | Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.1		0.1
Cumulative	6.4		6.4
Expected Total	8.9		8.9
Unallocated corporate | Property Costs
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		0.0
Cumulative	4.3		4.3
Expected Total	4.3		4.3
Unallocated corporate | Other
Restructuring Cost and Reserve [Line Items]
Employee termination and restructuring	0.0		0.0
Cumulative	2.1		2.1
Expected Total	$ 2.1		$ 2.1

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Restructuring Plans - Summary of Restructuring Charges and Accrual (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring Reserve [Roll Forward]
Beginning balance			$ 9.5
Additional accruals	$ 4.2	$ 5.2	6.9	$ 13.4
Cash payments			(7.3)
Ending balance	9.1		9.1
Employee Termination Costs
Restructuring Reserve [Roll Forward]
Beginning balance			7.3
Additional accruals	2.5		4.8
Cash payments			(6.2)
Ending balance	5.9		5.9
Property Costs
Restructuring Reserve [Roll Forward]
Beginning balance			0.8
Additional accruals	0.0		0.4
Cash payments			(0.9)
Ending balance	0.3		0.3
Other
Restructuring Reserve [Roll Forward]
Beginning balance			1.4
Additional accruals	1.7		1.7
Cash payments			(0.2)
Ending balance	$ 2.9		$ 2.9

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Restructuring Plans - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring and Related Activities [Abstract]
Pre-tax employee termination and restructuring costs	$ 4.2	$ 5.2	$ 6.9	$ 13.4

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Basic and Diluted Net Loss Per Share - Schedule of the Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Loss (numerator):
Net loss	$ (51.7)	$ (102.2)	$ (144.0)	$ (188.6)
Shares (denominator):
Basic weighted-average common shares outstanding (in shares)	87,300,000.00	85,900,000	86,900,000	85,600,000
Diluted weighted-average common shares outstanding (in shares)	87,300,000.00	85,900,000	86,900,000	85,600,000
Basic and diluted net loss per share:
Basic net loss per share (in USD per share)	$ (0.59)	$ (1.19)	$ (1.66)	$ (2.20)
Diluted net loss per share (in USD per share)	$ (0.59)	$ (1.19)	$ (1.66)	$ (2.20)

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Basic and Diluted Net Loss Per Share - Additional Information (Details) - shares shares in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	3.0	1.9
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	5.3	6.4

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Accounts and Notes Receivable and Credit Quality of Notes Receivable - Components Accounts and Notes Receivable, Net (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current:
Accounts receivable	$ 514.0	$ 497.7
Notes receivable	154.5	180.4
Allowance for doubtful accounts	(27.2)	(23.3)
Current accounts and notes receivable, net	641.3	654.8
Long-term:
Notes receivable, net	43.8	51.3
Total accounts and notes receivable, net	$ 685.1	$ 706.1

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Accounts and Notes Receivable and Credit Quality of Notes Receivable - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts and notes receivable, net	$ 685.1	$ 706.1
Argentina
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts and notes receivable, net	19.0
Proceeds from collection of accounts and notes receivable, net	11.4
Mexico
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts and notes receivable, net	36.4
Proceeds from collection of accounts and notes receivable, net	$ 14.4
Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivable with imputed interest, effective yield (interest rate)	3.25%	3.25%
Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivable with imputed interest, effective yield (interest rate)	10.42%	10.42%
Notes receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts and notes receivable, net	$ 183.8	$ 219.0
Percentage of total notes receivable over 90 days past due	15.60%	7.90%

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Accounts and Notes Receivable and Credit Quality of Notes Receivable - Components of Notes Receivable, Net (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total accounts and notes receivable, net	$ 685.1	$ 706.1
Notes receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable	198.6	232.2
Notes receivable allowance for doubtful accounts	(14.8)	(13.2)	$ (9.7)	$ (5.9)
Total accounts and notes receivable, net	183.8	219.0
Domestic | Notes receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable	39.6	62.4
Notes receivable allowance for doubtful accounts	(2.3)	(2.6)
International | Notes receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable	159.0	169.8
Notes receivable allowance for doubtful accounts	(12.5)	(10.6)
Balances over 90 days past due | Notes receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable over 90 days past due	43.5	29.2
Notes receivable allowance for doubtful accounts over 90 days past due	(14.8)	(12.0)
Notes receivable, net, balances over 90 days past due	28.7	17.2
Balances over 90 days past due | Domestic | Notes receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable over 90 days past due	2.0	2.6
Notes receivable allowance for doubtful accounts over 90 days past due	(2.3)	(2.5)
Balances over 90 days past due | International | Notes receivable
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable over 90 days past due	41.5	26.6
Notes receivable allowance for doubtful accounts over 90 days past due	$ (12.5)	$ (9.5)

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Accounts and Notes Receivable and Credit Quality of Notes Receivable - Evaluation of Notes Receivable For Impairment (Details) - Notes receivable - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable	$ 198.6	$ 232.2
Ending Balance Individually Evaluated for Impairment	95.4	122.5
Ending Balance Collectively Evaluated for Impairment	103.2	109.7
Domestic
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable	39.6	62.4
Ending Balance Individually Evaluated for Impairment	13.7	20.7
Ending Balance Collectively Evaluated for Impairment	25.9	41.7
International
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable	159.0	169.8
Ending Balance Individually Evaluated for Impairment	81.7	101.8
Ending Balance Collectively Evaluated for Impairment	$ 77.3	$ 68.0

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Accounts and Notes Receivable and Credit Quality of Notes Receivable - Allowance for Doubtful Accounts Receivable (Details) - Notes receivable - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 13.2	$ 5.9
Charge-offs	(1.3)	(2.1)
Recoveries	(0.2)	(0.5)
Provision	3.1	6.4
Ending balance	14.8	9.7
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment [Roll Forward]
Beginning balance	12.9	5.9
Charge-offs	(1.3)	(2.1)
Recoveries	(0.2)	(0.4)
Provision	3.1	5.2
Ending balance	14.5	8.6
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment [Roll Forward]
Beginning balance	0.3	0.0
Charge-offs	0.0	0.0
Recoveries	0.0	(0.1)
Provision	0.0	1.2
Ending balance	$ 0.3	$ 1.1

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Accounts and Notes Receivable and Credit Quality of Notes Receivable - Notes Receivable Concentration Risk (Details) - Geographic concentration risk - Notes receivable	6 Months Ended
	Jun. 30, 2016
Mexico
Concentration Risk [Line Items]
Concentration risk, percentage	26.00%
Peru
Concentration Risk [Line Items]
Concentration risk, percentage	17.00%
Columbia
Concentration Risk [Line Items]
Concentration risk, percentage	6.00%
Argentina
Concentration Risk [Line Items]
Concentration risk, percentage	9.00%
Other (less than 5% individually)
Concentration Risk [Line Items]
Concentration risk, percentage	22.00%
Concentration risk, individual percentage	0.05
Total international notes receivable as a percentage of total notes receivable
Concentration Risk [Line Items]
Concentration risk, percentage	80.00%

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Inventories (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Parts and work-in-process		$ 128.6	$ 118.3
Finished goods		120.4	130.2
Total inventories		$ 249.0	$ 248.5
Bally Technologies Inc.
Property, Plant and Equipment [Line Items]
Asset impairment charge	$ 7.1

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Property and Equipment, net - Property and Equipment, net (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (899.9)	$ (846.8)
Property and equipment, net	695.5	794.0
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	38.4	38.5
Buildings and leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	184.7	185.2
Gaming and lottery machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,048.5	1,084.6
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	31.4	36.0
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	27.9	25.5
Other property and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 264.5	$ 271.0

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Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 86.8	$ 93.9	$ 167.4	$ 176.3
Manufacturing Facility
Property, Plant and Equipment [Line Items]
Asset impairment charge					$ 4.9
Historical cost of assets disposed of | Gaming equipment
Property, Plant and Equipment [Line Items]
Property and equipment, disposals			90.2
Historical cost of assets disposed of | Lottery machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, disposals			$ 3.1
Gaming | Historical cost of assets disposed of | Gaming equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		59.9		$ 59.9
Bally Technologies Inc.
Property, Plant and Equipment [Line Items]
Asset impairment charge		7.1
Bally Technologies Inc. | Gaming equipment
Property, Plant and Equipment [Line Items]
Asset impairment charge		$ 5.2

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Intangible Assets, net and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	$ 2,270.0	$ 2,183.5
Amortizable intangible assets, accumulated amortization	(472.7)	(358.8)
Amortizable intangible assets, net balance	1,797.3	1,824.7
Non-amortizable intangible assets:
Total intangible assets, gross carrying amount	2,366.7	2,280.9
Total intangible assets, accumulated amortization (excluding goodwill)	(474.8)	(360.9)
Total intangible assets, net	1,891.9	1,920.0
Trade names
Non-amortizable intangible assets:
Non-amortizable intangible assets, Gross Carrying Amount	96.7	97.4
Non-amortizable intangible assets, Accumulated Amortization	(2.1)	(2.1)
Non-amortizable intangible assets, Net Balance	94.6	95.3
Patents
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	26.3	26.8
Amortizable intangible assets, accumulated amortization	(13.1)	(12.5)
Amortizable intangible assets, net balance	13.2	14.3
Customer relationships
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	877.7	877.7
Amortizable intangible assets, accumulated amortization	(136.8)	(109.1)
Amortizable intangible assets, net balance	740.9	768.6
Licenses
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	412.5	326.1
Amortizable intangible assets, accumulated amortization	(121.8)	(91.6)
Amortizable intangible assets, net balance	290.7	234.5
Intellectual property
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	731.5	731.1
Amortizable intangible assets, accumulated amortization	(170.3)	(124.5)
Amortizable intangible assets, net balance	561.2	606.6
Intellectual property | In Process Research and Development
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	33.0	33.0
Trade names
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	97.4	97.5
Amortizable intangible assets, accumulated amortization	(4.9)	(1.9)
Amortizable intangible assets, net balance	92.5	95.6
Brand names
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	124.4	124.0
Amortizable intangible assets, accumulated amortization	(25.6)	(18.9)
Amortizable intangible assets, net balance	98.8	105.1
Non-compete agreements
Amortizable intangible assets:
Amortizable intangible assets, gross carrying amount	0.2	0.3
Amortizable intangible assets, accumulated amortization	(0.2)	(0.3)
Amortizable intangible assets, net balance	$ 0.0	$ 0.0

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Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible amortization expense	$ 62,300,000	$ 87,200,000	$ 127,900,000	$ 150,300,000
Licenses
Finite-Lived Intangible Assets [Line Items]
Minimum aggregate guarantee	88,000,000		88,000,000
Minimum aggregate guarantee, due in one year	8,800,000		8,800,000
Minimum aggregate guarantee, noncurrent	$ 74,600,000		74,600,000
Trade names
Finite-Lived Intangible Assets [Line Items]
Asset impairment charge			$ 0	$ 25,000,000

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Intangible Assets, net and Goodwill - Reconciliation of the Carrying Amount of Goodwill (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Balance at the beginning of the period	$ 3,013.7
Foreign currency adjustments	(21.2)
Balance at the end of the period	2,992.5
Interactive
Goodwill [Roll Forward]
Balance at the beginning of the period	2,486.0
Foreign currency adjustments	(23.0)
Balance at the end of the period	2,463.0
Lottery
Goodwill [Roll Forward]
Balance at the beginning of the period	417.9
Foreign currency adjustments	1.8
Balance at the end of the period	419.7
Interactive
Goodwill [Roll Forward]
Balance at the beginning of the period	109.8
Foreign currency adjustments	0.0
Balance at the end of the period	$ 109.8

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Software, net (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Capitalized Computer Software, Net [Abstract]
Software	$ 894.8		$ 894.8		$ 854.2
Accumulated amortization	(451.6)		(451.6)		(368.3)
Software, net	443.2		443.2		$ 485.9
Amortization expense	$ 44.0	$ 41.1	$ 78.4	$ 79.8

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Equity Investments (Details) € in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2016 EUR (€)	Jun. 30, 2015 USD ($)	Jun. 30, 2015 EUR (€)
Schedule of Equity Method Investments [Line Items]
Distributed earnings from equity investments	$ 16.3		$ 19.9
ITL
Schedule of Equity Method Investments [Line Items]
Distribution of capital received	3.1	€ 2.8	6.5	€ 5.8
RCN
Schedule of Equity Method Investments [Line Items]
Distributed earnings from equity investments	1.4		1.8
LNS
Schedule of Equity Method Investments [Line Items]
Distribution of capital received	19.4	17.6	16.8	15.0
Distributed earnings from equity investments	$ 14.9	€ 13.5	$ 14.5	€ 12.9

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Long-Term and Other Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument
Principal	$ 8,296.3	$ 8,404.7
Unamortized debt discount	(23.7)	(26.3)
Unamortized deferred financing costs	(155.3)	(171.4)
Total long-term debt outstanding	8,117.3	8,207.0
Less: current portion of long-term debt	(49.7)	(50.3)
Long-term debt, excluding current portion	8,067.6	8,156.7
Term loan facility | Term Loan, varying interest rate, due 2020
Debt Instrument
Principal	2,242.5	2,254.0
Unamortized debt discount	(6.9)	(7.8)
Unamortized deferred financing costs	(47.0)	(52.5)
Total long-term debt outstanding	2,188.6	2,193.7
Term loan facility | Term Loan, varying interest rate, due 2021
Debt Instrument
Principal	1,970.0	1,980.0
Unamortized debt discount	(15.2)	(16.7)
Unamortized deferred financing costs	(44.8)	(49.2)
Total long-term debt outstanding	1,910.0	1,914.1
Senior subordinated notes | 2018 Notes
Debt Instrument
Principal	250.0	250.0
Unamortized debt discount	0.0	0.0
Unamortized deferred financing costs	(1.6)	(2.0)
Total long-term debt outstanding	248.4	248.0
Senior subordinated notes | 2020 Notes
Debt Instrument
Principal	243.5	300.0
Unamortized debt discount	0.0	0.0
Unamortized deferred financing costs	(2.6)	(3.6)
Total long-term debt outstanding	240.9	296.4
Senior subordinated notes | 2021 Notes
Debt Instrument
Principal	340.6	350.0
Unamortized debt discount	(1.6)	(1.8)
Unamortized deferred financing costs	(5.1)	(5.6)
Total long-term debt outstanding	333.9	342.6
Senior subordinated notes | Secured Notes
Debt Instrument
Principal	950.0	950.0
Unamortized debt discount	0.0	0.0
Unamortized deferred financing costs	(15.1)	(16.4)
Total long-term debt outstanding	934.9	933.6
Senior subordinated notes | Unsecured Notes
Debt Instrument
Principal	2,200.0	2,200.0
Unamortized debt discount	0.0	0.0
Unamortized deferred financing costs	(39.1)	(42.1)
Total long-term debt outstanding	$ 2,160.9	$ 2,157.9
Capital lease obligations
Debt Instrument
Capital lease interest rate	3.90%	3.90%
Capital lease obligations | Capital lease obligations, payable monthly
Debt Instrument
Principal	$ 19.7	$ 25.7
Unamortized debt discount	0.0	0.0
Unamortized deferred financing costs	0.0	0.0
Total long-term debt outstanding	19.7	25.7
Revolving credit facility | Revolver, varying interest rate, due 2018
Debt Instrument
Principal	80.0	95.0
Unamortized debt discount	0.0	0.0
Unamortized deferred financing costs	0.0	0.0
Total long-term debt outstanding	$ 80.0	$ 95.0

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Long-Term and Other Debt - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Feb. 12, 2015	Feb. 11, 2015	Oct. 01, 2014	Oct. 18, 2013
Debt Instrument
Cash paid to retire debt			$ 39,900,000	$ 0
Gain on early extinguishment of debt	$ 25,200,000	$ 0	25,200,000	$ 0
Fair value of debt	7,532,300,000		7,532,300,000		$ 6,931,600,000
Senior secured credit facilities
Debt Instrument
Line of credit facility, maximum borrowing capacity									$ 2,600,000,000.0
Revolver, varying interest rate, due 2018 | Revolving credit facility
Debt Instrument
Line of credit facility, maximum borrowing capacity						$ 592,600,000.0	$ 25,000,000.0		300,000,000.0
Revolver, varying interest rate, due 2018 | Revolving credit facility | Bally Technologies Inc.
Debt Instrument
Line of credit facility, maximum borrowing capacity								$ 267,600,000.0
Revolver, varying interest rate, due 2018 | Letter of credit
Debt Instrument
Line of credit facility, maximum borrowing capacity							$ 350,000,000.0
Term Loan, varying interest rate, due 2020 | Term loan facility
Debt Instrument
Line of credit facility, maximum borrowing capacity									2,300,000,000.0
B-2 Loan Facility | Revolving credit facility
Debt Instrument
Line of credit facility, maximum borrowing capacity									$ 2,000,000,000.0
2020 Notes
Debt Instrument
Principal amount of repurchased debt	56,500,000		56,500,000
Cash paid to retire debt	34,200,000
2021 Notes
Debt Instrument
Principal amount of repurchased debt	9,400,000		$ 9,400,000
Cash paid to retire debt	5,700,000
Gain on early extinguishment of debt	25,200,000
Unamortized debt write off	$ 800,000

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Fair Value Measurements (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Oct. 31, 2013	Aug. 31, 2013
Derivatives Fair Value
Loss to be reclassified during next 12 months	$ 8,200,000		$ 8,200,000
Assets held for sale	14,500,000		14,500,000		$ 16,700,000
Interest rate swap
Derivatives Fair Value
Derivative notional amount						$ 200,000,000.0	$ 500,000,000.0
Derivative average fixed interest rate							2.151%
Basis spread on variable rate (as a percent)							1.00%
Gain (loss) on derivatives representing change in fair value of hedges	4,600,000	$ 5,600,000	3,600,000	$ 800,000
Reclassification of loss recognized in other comprehensive income (loss), effective portion	2,000,000		4,100,000
Derivative liability fair value	11,800,000		11,800,000		11,900,000
Accrued Liabilities | Interest rate swap
Derivatives Fair Value
Derivative liability fair value	8,200,000		8,200,000		7,900,000
Other long-term liabilities | Interest rate swap
Derivatives Fair Value
Derivative liability fair value	$ 3,600,000		$ 3,600,000		$ 4,000,000

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Stockholders' Deficit - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted during the period (in shares)	1.2			1.2
Weighted average grant date fair value of options granted during the period (in dollars per share)	$ 4.81			$ 4.81
Options outstanding (in shares)	3.0			3.0
Options exercisable (in shares)	0.9			0.9
Employee stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award expiration period				10 years
Share-based compensation expense	$ 0.6		$ 0.5	$ 1.3	$ 0.9
Compensation cost not yet recognized	10.2			$ 10.2
Compensation cost not yet recognized, period for recognition				2 years
Employee stock option | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				4 years
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	5.4		$ 6.3	$ 11.2	$ 11.0
Compensation cost not yet recognized	$ 58.0			$ 58.0
Compensation cost not yet recognized, period for recognition				2 years
Weighted average grant date fair value (in USD per share)	$ 9.60	$ 8.21		$ 9.42
Restricted stock units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				4 years

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Stockholders' Deficit - Summary of Changes in RSUs Outstanding (Details) - Restricted stock units - $ / shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2016
Number of Restricted Stock Units
Unvested units at beginning of period (in shares)	4.6	5.6	5.6
Granted units (in shares)	1.4	0.2
Vested units (in shares)	(0.6)	(0.8)
Canceled units (in shares)	(0.1)	(0.4)
Unvested units at end of period (in shares)	5.3	4.6	5.3
Weighted Average Grant Date Fair Value
Unvested units at beginning of period (in USD per share)	$ 13.00	$ 13.05	$ 13.05
Granted units (in USD per share)	9.60	8.21	9.42
Vested units (in USD per share)	12.51	12.46
Canceled units (in USD per share)	13.35	12.56
Unvested units at end of period (in USD per share)	$ 12.16	$ 13.00	$ 12.16

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Employee Benefit Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Defined Benefit Plan Disclosure [Line Items]
Employer matching contribution			35.00%
Maximum annual contributions per employee (as percent)			6.00%
Contribution expense	$ 2.9	$ 2.7	$ 5.8	$ 5.8
Net periodic cost	$ 0.4	$ 0.4	$ 0.7	$ 0.9
United Kingdom Defined Benefit Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Period preceding retirement for measuring benefits			2 years

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Income Taxes - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax [Line Items]
Effective tax rates	27.50%	39.00%	21.20%	40.40%
Minimum
Income Tax [Line Items]
Effective income tax rate on foreign earnings			0.00%
Maximum
Income Tax [Line Items]
Effective income tax rate on foreign earnings			39.00%

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Litigation - Additional Information (Details) COP in Billions	1 Months Ended		6 Months Ended
	May 31, 2013 USD ($)	May 31, 2013 COP	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Loss Contingencies [Line Items]
Loss contingency accrual			$ 9,000,000	$ 16,400,000
Loss contingency liability, estimated range			13,200,000
Ecosalud
Loss Contingencies [Line Items]
Litigation settlement, amount	$ 30,800,000	COP 90
Statutory interest rate	12.00%	12.00%
Oregon State Lottery Matter
Loss Contingencies [Line Items]
Minimum monetary damages sought by plaintiffs			134,000,000.0
Bally Technologies Inc.
Loss Contingencies [Line Items]
Minimum comprehensive damages sought by plaintiffs			100,000,000.0
Guarantee of business revenue
Loss Contingencies [Line Items]
Loss contingency possible amount of damages			5,000,000.0
Performance guarantee
Loss Contingencies [Line Items]
Loss contingency deposit of surety bond			$ 4,000,000.0

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Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Supplemental Cash Flow Elements [Abstract]
Interest paid	$ 313.6	$ 294.6
Income taxes paid (received)	6.6	(4.1)
Noncash contribution expense	$ 86.9	$ 12.5

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Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 101.4	$ 128.7	$ 129.1	$ 171.8
Restricted cash	24.5	20.2
Accounts receivable, net	501.3	487.1
Notes receivable, net	140.0	167.7
Inventories	249.0	248.5
Prepaid expenses, deposits and other current assets	120.9	123.3
Property and equipment, net	695.5	794.0
Investment in subsidiaries	0.0	0.0
Goodwill	2,992.5	3,013.7
Intangible assets, net	1,891.9	1,920.0
Intercompany balances	0.0	0.0
Software, net	443.2	485.9
Other assets	304.9	343.1
Total assets	7,465.1	7,732.2
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	49.7	50.3
Other current liabilities	595.7	603.6
Long-term debt, excluding current portion	8,067.6	8,156.7
Other long-term liabilities	419.0	417.1
Intercompany balances	0.0	0.0
Stockholders' (deficit) equity	(1,666.9)	(1,495.5)
Total liabilities and stockholders' (deficit) equity	7,465.1	7,732.2
Reportable Legal Entities | Parent Company
Assets
Cash and cash equivalents	32.4	43.2	41.9	37.9
Restricted cash	0.0	0.0
Accounts receivable, net	0.0	0.0
Notes receivable, net	0.0	0.0
Inventories	0.0	0.0
Prepaid expenses, deposits and other current assets	31.6	26.8
Property and equipment, net	11.9	8.2
Investment in subsidiaries	3,202.2	3,280.9
Goodwill	0.0	0.0
Intangible assets, net	207.1	138.3
Intercompany balances	0.0	0.0
Software, net	52.4	35.6
Other assets	291.0	232.5
Total assets	3,828.6	3,765.5
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	0.0	0.0
Other current liabilities	74.3	63.7
Long-term debt, excluding current portion	248.4	248.0
Other long-term liabilities	179.2	119.1
Intercompany balances	4,993.6	4,830.2
Stockholders' (deficit) equity	(1,666.9)	(1,495.5)
Total liabilities and stockholders' (deficit) equity	3,828.6	3,765.5
Reportable Legal Entities | SGI
Assets
Cash and cash equivalents	0.5	0.0	1.4	0.1
Restricted cash	0.0	0.0
Accounts receivable, net	98.0	94.6
Notes receivable, net	0.0	0.0
Inventories	35.8	36.9
Prepaid expenses, deposits and other current assets	14.1	7.0
Property and equipment, net	101.4	106.4
Investment in subsidiaries	851.8	838.1
Goodwill	188.3	186.0
Intangible assets, net	38.7	39.8
Intercompany balances	6,531.8	6,511.1
Software, net	25.4	32.7
Other assets	119.3	123.4
Total assets	8,005.1	7,976.0
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	43.0	43.0
Other current liabilities	153.2	150.5
Long-term debt, excluding current portion	7,806.2	7,890.3
Other long-term liabilities	14.2	14.5
Intercompany balances	0.0	0.0
Stockholders' (deficit) equity	(11.5)	(122.3)
Total liabilities and stockholders' (deficit) equity	8,005.1	7,976.0
Reportable Legal Entities | Guarantor Subsidiaries
Assets
Cash and cash equivalents	0.0	4.7	15.8	28.8
Restricted cash	24.4	20.0
Accounts receivable, net	226.5	233.6
Notes receivable, net	91.2	114.2
Inventories	89.4	104.2
Prepaid expenses, deposits and other current assets	35.1	52.1
Property and equipment, net	430.4	502.2
Investment in subsidiaries	796.8	648.3
Goodwill	1,988.2	1,990.5
Intangible assets, net	1,423.6	1,505.8
Intercompany balances	0.0	0.0
Software, net	316.3	359.8
Other assets	44.7	51.7
Total assets	5,466.6	5,587.1
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	0.0	0.0
Other current liabilities	208.4	245.4
Long-term debt, excluding current portion	0.0	0.0
Other long-term liabilities	498.8	502.1
Intercompany balances	1,503.7	1,558.2
Stockholders' (deficit) equity	3,255.7	3,281.4
Total liabilities and stockholders' (deficit) equity	5,466.6	5,587.1
Reportable Legal Entities | Non-Guarantor Subsidiaries
Assets
Cash and cash equivalents	68.5	80.8	70.0	105.0
Restricted cash	0.1	0.2
Accounts receivable, net	176.8	158.9
Notes receivable, net	48.8	53.5
Inventories	136.2	119.6
Prepaid expenses, deposits and other current assets	40.1	37.4
Property and equipment, net	166.3	188.7
Investment in subsidiaries	0.0	0.0
Goodwill	816.0	837.2
Intangible assets, net	222.5	236.1
Intercompany balances	0.0	0.0
Software, net	49.1	57.8
Other assets	214.6	241.7
Total assets	1,939.0	2,011.9
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	6.7	7.3
Other current liabilities	159.8	144.0
Long-term debt, excluding current portion	13.0	18.4
Other long-term liabilities	91.5	87.7
Intercompany balances	34.5	122.6
Stockholders' (deficit) equity	1,633.5	1,631.9
Total liabilities and stockholders' (deficit) equity	1,939.0	2,011.9
Eliminating Entries
Assets
Cash and cash equivalents	0.0	0.0	$ 0.0	$ 0.0
Restricted cash	0.0	0.0
Accounts receivable, net	0.0	0.0
Notes receivable, net	0.0	0.0
Inventories	(12.4)	(12.2)
Prepaid expenses, deposits and other current assets	0.0	0.0
Property and equipment, net	(14.5)	(11.5)
Investment in subsidiaries	(4,850.8)	(4,767.3)
Goodwill	0.0	0.0
Intangible assets, net	0.0	0.0
Intercompany balances	(6,531.8)	(6,511.1)
Software, net	0.0	0.0
Other assets	(364.7)	(306.2)
Total assets	(11,774.2)	(11,608.3)
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	0.0	0.0
Other current liabilities	0.0	0.0
Long-term debt, excluding current portion	0.0	0.0
Other long-term liabilities	(364.7)	(306.3)
Intercompany balances	(6,531.8)	(6,511.0)
Stockholders' (deficit) equity	(4,877.7)	(4,791.0)
Total liabilities and stockholders' (deficit) equity	$ (11,774.2)	$ (11,608.3)

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Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Statement of Operations and Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements
Revenue	$ 729.2	$ 691.5	$ 1,411.2	$ 1,350.2
Cost of services, cost of product sales and cost of instant games	276.2	275.3	532.5	530.7
Selling, general and administrative	144.9	140.9	287.2	286.8
Research and development	51.7	48.0	101.5	94.9
Employee termination and restructuring	4.2	5.2	6.9	13.4
Depreciation and amortization	193.1	222.2	373.7	406.4
Operating (loss) income	59.1	(0.1)	109.4	18.0
Interest expense	(165.3)	(166.4)	(331.0)	(330.7)
Gain on early extinguishment of debt	25.2	0.0	25.2	0.0
Other (expense) income, net	9.7	(1.0)	13.6	(3.5)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(71.3)	(167.5)	(182.8)	(316.2)
Equity in (loss) income of subsidiaries	0.0	0.0	0.0	0.0
Income tax benefit (expense)	19.6	65.3	38.8	127.6
Net (loss) income	(51.7)	(102.2)	(144.0)	(188.6)
Other comprehensive (loss) income	(30.2)	23.1	(32.6)	(87.1)
Comprehensive (loss) income	(81.9)	(79.1)	(176.6)	(275.7)
Reportable Legal Entities | Parent Company
Condensed Financial Statements
Revenue	0.0	0.0	0.0	0.0
Cost of services, cost of product sales and cost of instant games	0.0	0.0	0.0	0.0
Selling, general and administrative	36.9	16.7	61.0	31.6
Research and development	1.9	0.0	2.8	0.0
Employee termination and restructuring	0.1	1.4	0.1	3.2
Depreciation and amortization	13.0	8.1	25.8	16.0
Operating (loss) income	(51.9)	(26.2)	(89.7)	(50.8)
Interest expense	0.0	(5.3)	(0.1)	(3.9)
Gain on early extinguishment of debt			0.0
Other (expense) income, net	(24.7)	6.2	(50.3)	18.0
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(76.6)	(25.3)	(140.1)	(36.7)
Equity in (loss) income of subsidiaries	0.0	(143.0)	(51.0)	(281.3)
Income tax benefit (expense)	24.9	66.1	47.1	129.4
Net (loss) income	(51.7)	(102.2)	(144.0)	(188.6)
Other comprehensive (loss) income	(30.2)	23.1	(32.6)	(87.1)
Comprehensive (loss) income	(81.9)	(79.1)	(176.6)	(275.7)
Reportable Legal Entities | SGI
Condensed Financial Statements
Revenue	126.4	106.4	241.7	217.6
Cost of services, cost of product sales and cost of instant games	86.1	79.0	169.0	160.3
Selling, general and administrative	11.7	18.4	22.9	34.6
Research and development	2.3	1.4	4.6	2.8
Employee termination and restructuring	(0.1)	0.7	0.0	0.9
Depreciation and amortization	10.3	9.8	21.1	19.6
Operating (loss) income	16.1	(2.9)	24.1	(0.6)
Interest expense	(35.1)	(83.1)	(69.9)	(119.3)
Gain on early extinguishment of debt	25.2		25.2
Other (expense) income, net	52.5	18.3	102.8	35.9
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	58.7	(67.7)	82.2	(84.0)
Equity in (loss) income of subsidiaries	11.3	22.7	30.2	29.3
Income tax benefit (expense)	0.0	(0.1)	0.0	(0.1)
Net (loss) income	70.0	(45.1)	112.4	(54.8)
Other comprehensive (loss) income	3.2	3.3	3.0	(9.8)
Comprehensive (loss) income	73.2	(41.8)	115.4	(64.6)
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Financial Statements
Revenue	408.6	430.6	816.5	862.9
Cost of services, cost of product sales and cost of instant games	108.8	139.5	219.8	284.8
Selling, general and administrative	51.7	70.8	119.4	145.1
Research and development	39.1	39.3	78.4	77.1
Employee termination and restructuring	3.3	2.4	4.1	6.9
Depreciation and amortization	141.1	170.8	267.9	299.6
Operating (loss) income	64.6	7.8	126.9	49.4
Interest expense	(130.1)	(77.9)	(260.9)	(207.3)
Gain on early extinguishment of debt	0.0		0.0
Other (expense) income, net	(24.2)	(29.0)	(47.3)	(68.8)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(89.7)	(99.1)	(181.3)	(226.7)
Equity in (loss) income of subsidiaries	9.3	9.5	16.2	3.3
Income tax benefit (expense)	0.0	2.9	0.0	2.9
Net (loss) income	(80.4)	(86.7)	(165.1)	(220.5)
Other comprehensive (loss) income	(8.1)	(25.4)	(6.2)	(8.5)
Comprehensive (loss) income	(88.5)	(112.1)	(171.3)	(229.0)
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Financial Statements
Revenue	265.5	261.5	483.4	470.3
Cost of services, cost of product sales and cost of instant games	152.6	163.8	274.1	286.2
Selling, general and administrative	44.6	35.0	83.9	75.5
Research and development	8.4	7.3	15.7	15.0
Employee termination and restructuring	0.9	0.7	2.7	2.4
Depreciation and amortization	28.7	33.5	58.9	71.2
Operating (loss) income	30.3	21.2	48.1	20.0
Interest expense	(0.1)	(0.1)	(0.1)	(0.2)
Gain on early extinguishment of debt			0.0
Other (expense) income, net	6.1	3.5	8.4	11.4
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	36.3	24.6	56.4	31.2
Equity in (loss) income of subsidiaries	0.0	0.0	0.0	0.0
Income tax benefit (expense)	(5.3)	(3.6)	(8.3)	(4.6)
Net (loss) income	31.0	21.0	48.1	26.6
Other comprehensive (loss) income	(33.4)	42.4	(30.7)	(77.2)
Comprehensive (loss) income	(2.4)	63.4	17.4	(50.6)
Eliminating Entries
Condensed Financial Statements
Revenue	(71.3)	(107.0)	(130.4)	(200.6)
Cost of services, cost of product sales and cost of instant games	(71.3)	(107.0)	(130.4)	(200.6)
Selling, general and administrative	0.0	0.0	0.0	0.0
Research and development	0.0	0.0	0.0	0.0
Employee termination and restructuring	0.0	0.0	0.0	0.0
Depreciation and amortization	0.0	0.0	0.0	0.0
Operating (loss) income	0.0	0.0	0.0	0.0
Interest expense	0.0	0.0	0.0	0.0
Gain on early extinguishment of debt			0.0
Other (expense) income, net	0.0	0.0	0.0	0.0
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	0.0	0.0	0.0	0.0
Equity in (loss) income of subsidiaries	(20.6)	110.8	4.6	248.7
Income tax benefit (expense)	0.0	0.0	0.0	0.0
Net (loss) income	(20.6)	110.8	4.6	248.7
Other comprehensive (loss) income	38.3	(20.3)	33.9	95.5
Comprehensive (loss) income	$ 17.7	$ 90.5	$ 38.5	$ 344.2

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Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Statement of Cash Flows (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements
Net cash (used in) provided by operating activities	$ 191.9	$ 114.4
Cash flows from investing activities:
Capital expenditures	(132.6)	(142.8)
Distributions of capital on equity investments	22.5	35.2
Restricted cash	(3.8)	1.0
Changes in other assets and liabilities and other	6.1	9.5
Other, principally intercompany balances	0.0	0.0
Net cash used in investing activities	(107.8)	(98.1)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	(80.1)	(36.2)
Payments on license obligations	(25.0)	(18.7)
Contingent earnout payments	0.0	(0.5)
Issuance (redemptions) of common stock under stock-based compensation plans	(4.4)	0.9
Other, principally change in intercompany financing activities	0.0	0.0
Net cash provided by (used in) financing activities	(109.5)	(54.5)
Effect of exchange rate changes on cash and cash equivalents	(1.9)	(4.5)
Increase (decrease) in cash and cash equivalents	(27.3)	(42.7)
Cash and cash equivalents, beginning of period	128.7	171.8
Cash and cash equivalents, end of period	101.4	129.1
Parent Company
Cash flows from financing activities:
Issuance (redemptions) of common stock under stock-based compensation plans	(4.4)
SGI
Cash flows from financing activities:
Issuance (redemptions) of common stock under stock-based compensation plans	0.0
Guarantor Subsidiaries
Cash flows from financing activities:
Issuance (redemptions) of common stock under stock-based compensation plans	0.0
Non-Guarantor Subsidiaries
Cash flows from financing activities:
Issuance (redemptions) of common stock under stock-based compensation plans	0.0
Reportable Legal Entities | Parent Company
Condensed Financial Statements
Net cash (used in) provided by operating activities	(109.5)	(33.1)
Cash flows from investing activities:
Capital expenditures	(26.7)	(8.6)
Distributions of capital on equity investments	0.0	0.0
Restricted cash	0.0
Changes in other assets and liabilities and other	0.3	0.0
Other, principally intercompany balances	0.0	0.0
Net cash used in investing activities	(26.4)	(8.6)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	0.0	0.0
Payments on license obligations	(15.1)	(13.5)
Contingent earnout payments		0.0
Issuance (redemptions) of common stock under stock-based compensation plans		0.9
Other, principally change in intercompany financing activities	144.6	58.2
Net cash provided by (used in) financing activities	125.1	45.6
Effect of exchange rate changes on cash and cash equivalents	0.0	0.1
Increase (decrease) in cash and cash equivalents	(10.8)	4.0
Cash and cash equivalents, beginning of period	43.2	37.9
Cash and cash equivalents, end of period	32.4	41.9
Reportable Legal Entities | SGI
Condensed Financial Statements
Net cash (used in) provided by operating activities	122.1	(69.4)
Cash flows from investing activities:
Capital expenditures	(5.2)	(12.4)
Distributions of capital on equity investments	0.0	0.8
Restricted cash	0.0
Changes in other assets and liabilities and other	0.0	0.0
Other, principally intercompany balances	(39.9)	114.2
Net cash used in investing activities	(45.1)	102.6
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	(76.5)	(31.5)
Payments on license obligations	0.0	0.0
Contingent earnout payments		0.0
Issuance (redemptions) of common stock under stock-based compensation plans		0.0
Other, principally change in intercompany financing activities	0.0	0.0
Net cash provided by (used in) financing activities	(76.5)	(31.5)
Effect of exchange rate changes on cash and cash equivalents	0.0	(0.4)
Increase (decrease) in cash and cash equivalents	0.5	1.3
Cash and cash equivalents, beginning of period	0.0	0.1
Cash and cash equivalents, end of period	0.5	1.4
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Financial Statements
Net cash (used in) provided by operating activities	104.8	127.7
Cash flows from investing activities:
Capital expenditures	(77.3)	(95.6)
Distributions of capital on equity investments	0.0	0.0
Restricted cash	(3.8)
Changes in other assets and liabilities and other	8.0	4.0
Other, principally intercompany balances	0.0	0.0
Net cash used in investing activities	(73.1)	(91.6)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	0.0	0.0
Payments on license obligations	(9.9)	(5.2)
Contingent earnout payments		(0.5)
Issuance (redemptions) of common stock under stock-based compensation plans		(29.6)
Other, principally change in intercompany financing activities	(25.9)	(12.0)
Net cash provided by (used in) financing activities	(35.8)	(47.3)
Effect of exchange rate changes on cash and cash equivalents	(0.6)	(1.8)
Increase (decrease) in cash and cash equivalents	(4.7)	(13.0)
Cash and cash equivalents, beginning of period	4.7	28.8
Cash and cash equivalents, end of period	0.0	15.8
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Financial Statements
Net cash (used in) provided by operating activities	74.5	89.2
Cash flows from investing activities:
Capital expenditures	(23.4)	(26.2)
Distributions of capital on equity investments	22.5	34.4
Restricted cash	0.0
Changes in other assets and liabilities and other	(2.2)	5.5
Other, principally intercompany balances	0.0	0.0
Net cash used in investing activities	(3.1)	13.7
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	(3.6)	(4.7)
Payments on license obligations	0.0	0.0
Contingent earnout payments		0.0
Issuance (redemptions) of common stock under stock-based compensation plans		(116.0)
Other, principally change in intercompany financing activities	(78.8)	(14.8)
Net cash provided by (used in) financing activities	(82.4)	(135.5)
Effect of exchange rate changes on cash and cash equivalents	(1.3)	(2.4)
Increase (decrease) in cash and cash equivalents	(12.3)	(35.0)
Cash and cash equivalents, beginning of period	80.8	105.0
Cash and cash equivalents, end of period	68.5	70.0
Eliminating Entries
Condensed Financial Statements
Net cash (used in) provided by operating activities	0.0	0.0
Cash flows from investing activities:
Capital expenditures	0.0	0.0
Distributions of capital on equity investments	0.0	0.0
Restricted cash	0.0
Changes in other assets and liabilities and other	0.0	0.0
Other, principally intercompany balances	39.9	(114.2)
Net cash used in investing activities	39.9	(114.2)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	0.0	0.0
Payments on license obligations	0.0	0.0
Contingent earnout payments		0.0
Issuance (redemptions) of common stock under stock-based compensation plans	0.0	145.6
Other, principally change in intercompany financing activities	(39.9)	(31.4)
Net cash provided by (used in) financing activities	(39.9)	114.2
Effect of exchange rate changes on cash and cash equivalents	0.0	0.0
Increase (decrease) in cash and cash equivalents	0.0	0.0
Cash and cash equivalents, beginning of period	0.0	0.0
Cash and cash equivalents, end of period	$ 0.0	$ 0.0