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Business Segments
 6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Business Segments
Business Segments
In connection with the NYX acquisition (see Note 1), in the first quarter of 2018, we reviewed our operating and business segments in light of certain changes in the organizational and operational structure of the Company. Based on this review, we determined that our Social gaming business, previously included in our Interactive business segment, is a separate business segment and the remaining business-to-business Interactive business component was integrated with the acquired NYX business, collectively forming the new Digital business segment.
As a result of the above changes, we now report our operations in four business segments—Gaming, Lottery, Social and Digital—representing our different products and services. A detailed discussion regarding the products and services from which our Gaming and Lottery business segments generally derive their revenue is included in our 2017 10-K Note 2. Our Social business segment provides social gaming services through our own B2C applications. Our Digital business segment provides highly customizable software design, development, licensing, maintenance and support services from a comprehensive suite of technology solutions to enable our customers to operate sports books, including betting markets across both fixed-odds and pari-mutuel betting styles, a distribution platform, full gaming process support services, brand and player management, including SG Universe services, and RMG services to online casino operators through our remote game servers. The products and services from which each reportable segment derives its revenues are further discussed in Note 2.
We also reviewed and considered the change in our Chief Executive Officer during the second quarter of 2018, who is also our Chief Operating Decision Maker (CODM), and how resources are allocated and financial information is regularly reviewed to evaluate operating results and performance of our business segments. As a result of this change and starting with the second quarter of 2018, we changed our business segment performance measure of profit or loss from operating income (loss) to Attributable EBITDA (AEBITDA), which we have described below. Business segment information for the three and six months ended June 30, 2017 has been recast to reflect these changes. The accounting policies of our business segments are the same as those described within the Notes in our 2017 10-K and in Note 1 and Note 2 (for revenue recognition) in this Quarterly Report on Form 10-Q. The following tables present our segment information:
 
Three Months Ended June 30, 2018
 
Gaming
 
Lottery
 
Social
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
470.7

 
$
207.1

 
$
99.7

 
$
67.2

 
$
—

 
$
844.7

AEBITDA(2)
235.7

 
99.4

 
25.2

 
13.2

 
(33.1
)
 
340.4

Reconciling items to consolidated net loss before income taxes:
D&A
(121.0
)
 
(13.9
)
 
(6.5
)
 
(16.7
)
 
(14.6
)
 
(172.7
)
Restructuring and other
(1.5
)
 
3.2

 
(0.5
)
 
(4.4
)
 
(30.3
)
 
(33.5
)
EBITDA from equity investments(2)
 
 
 
 
 
 
 
 
(16.5
)
 
(16.5
)
Earnings from equity investments
 
 
 
 
 
 
 
 
4.6

 
4.6

Interest expense
 
 
 
 
 
 
 
 
(146.1
)
 
(146.1
)
Gain on remeasurement of debt
 
 
 
 
 
 
 
 
34.5

 
34.5

Other expense, net
 
 
 
 
 
 
 
 
(0.9
)
 
(0.9
)
Stock-based compensation
 
 
 
 
 
 
 
 
(15.6
)
 
(15.6
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
(5.8
)
 
 
 
 
 
 
 
 
 
 
 
 
Assets as of June 30, 2018
$
5,210.7

 
$
1,146.3

 
$
190.5

 
$
862.2

 
$
203.2

 
$
7,612.9

(1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes.
(2) AEBITDA is net income (loss) before the following adjustments: (1) restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management changes; (iii) restructuring and integration; (iv) M&A and other, which includes: (a) M&A transaction costs, (b) purchase accounting, (c) unusual items (including certain litigation), and (d) other non-cash items; and (v) cost savings initiatives; (2) depreciation and amortization expense and impairment charges (including goodwill impairment charges); (3) change in fair value of investments and remeasurement of debt; (4) interest expense; (5) income taxes expense (benefit); (6) stock-based compensation; and (7) loss (gain) on debt financing transactions. In addition to the preceding adjustments, we exclude earnings from equity method investments and add (without duplication) our pro rata share of EBITDA of our equity investments, which represents our share of earnings (whether or not distributed to us) before income tax expense, depreciation and amortization expense, and interest (income) expense, net. AEBITDA is presented exclusively as our segment measure of profit or loss.


 
Three Months Ended June 30, 2017
 
Gaming
 
Lottery
 
Social
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
457.2

 
$
202.3

 
$
91.1

 
$
15.7

 
$
—

 
$
766.3

AEBITDA(2)
226.9

 
95.6

 
21.9

 
2.7

 
(32.3
)
 
314.8

Reconciling items to consolidated net loss before income taxes:
D&A
(136.0
)
 
(13.3
)
 
(3.1
)
 
(1.3
)
 
(21.3
)
 
(175.0
)
Restructuring and other
(0.3
)
 
1.1

 
(0.2
)
 
(0.1
)
 
(1.6
)
 
(1.1
)
EBITDA from equity investments(2)
 
 
 
 
 
 
 
 
(13.1
)
 
(13.1
)
Earnings from equity investments
 
 
 
 
 
 
 
 
3.1

 
3.1

Interest expense
 
 
 
 
 
 
 
 
(151.2
)
 
(151.2
)
Other expense, net
 
 
 
 
 
 
 
 
(3.1
)
 
(3.1
)
Stock-based compensation
 
 
 
 
 
 
 
 
(7.1
)
 
(7.1
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
(32.7
)
 
 
 
 
 
 
 
 
 
 
 
 
Assets as of December 31, 2017
$
5,401.6

 
$
1,070.6

 
$
219.1

 
$
61.2

 
$
972.8

 
$
7,725.3

(1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 3.



 
Six Months Ended June 30, 2018
 
Gaming
 
Lottery
 
Social
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
913.7

 
$
408.8

 
$
197.1

 
$
136.9

 
$
—

 
$
1,656.5

AEBITDA(2)
453.8

 
193.5

 
51.4

 
30.4

 
(68.6
)
 
660.5

Reconciling items to consolidated net loss before income taxes:
D&A
(260.4
)
 
(28.1
)
 
(13.1
)
 
(32.7
)
 
(26.5
)
 
(360.8
)
Restructuring and other
(2.9
)
 
2.4

 
(18.6
)
 
(10.1
)
 
(56.5
)
 
(85.7
)
EBITDA from equity investments(2)
 
 
 
 
 
 
 
 
(35.3
)
 
(35.3
)
Earnings from equity investments
 
 
 
 
 
 
 
 
11.9

 
11.9

Interest expense
 
 
 
 
 
 
 
 
(300.9
)
 
(300.9
)
Loss on debt financing transactions
 
 
 
 
 
 
 
 
(93.2
)
 
(93.2
)
Gain on remeasurement of debt
 
 
 
 
 
 
 
 
33.4

 
33.4

Other expense, net
 
 
 
 
 
 
 
 
(6.9
)
 
(6.9
)
Stock-based compensation
 
 
 
 
 
 
 
 
(24.4
)
 
(24.4
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
(201.4
)
(1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 3.


 
Six Months Ended June 30, 2017
 
Gaming
 
Lottery
 
Social
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
897.2

 
$
391.4

 
$
171.3

 
$
31.8

 
$
—

 
$
1,491.7

AEBITDA(2)
436.6

 
180.9

 
39.8

 
7.8

 
(63.7
)
 
601.4

Reconciling items to consolidated net loss before income taxes:
D&A
(259.3
)
 
(27.2
)
 
(5.7
)
 
(2.7
)
 
(45.2
)
 
(340.1
)
Restructuring and other
(4.5
)
 
0.8

 
(1.0
)
 
(0.1
)
 
(5.5
)
 
(10.3
)
EBITDA from equity investments(2)
 
 
 
 
 
 
 
 
(29.1
)
 
(29.1
)
Earnings from equity investments
 
 
 
 
 
 
 
 
12.6

12.6

12.6

Interest expense
 
 
 
 
 
 
 
 
(310.6
)
 
(310.6
)
Loss on debt financing transactions
 
 
 
 
 
 
 
 
(29.7
)
 
(29.7
)
Other income, net
 
 
 
 
 
 
 
 
2.0

 
2.0

Stock-based compensation
 
 
 
 
 
 
 
 
(13.0
)
 
(13.0
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
(116.8
)
(1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 3.


The following table presents our recast quarterly selected segment financial data for 2017 and 2016:
 
Recast Quarterly Segment Financial Data
 
2017
 
2016
 
March 31
 
June 30
 
September 30
 
December 31
 
March 31
 
June 30
 
September 30
 
December 31
Total revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Social
$
80.2

 
$
91.1

 
$
95.1

 
$
95.5

 
$
60.2

 
$
69.1

 
$
70.3

 
$
74.8

Digital
16.1

 
15.7

 
16.3

 
17.8

 
12.4

 
14.3

 
14.9

 
16.8

Previous Interactive Segment
$
96.3

 
$
106.8

 
$
111.4

 
$
113.3

 
$
72.6

 
$
83.4

 
$
85.2

 
$
91.6

Total Attributable EBITDA(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Social
$
17.9

 
$
21.9

 
$
20.1

 
$
21.8

 
$
13.2

 
$
16.0

 
$
10.9

 
$
15.4

Digital
5.1

 
2.7

 
3.1

 
5.1

 
2.2

 
2.2

 
2.7

 
4.3

(1) AEBITDA is described in (2) to the first table in this Note 3.