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Business Segments
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Business Segments Business Segments
We report our operations in four business segments—Gaming, Lottery, SciPlay (formerly referred to as our Social business segment) and Digital—representing our different products and services. A detailed discussion regarding the products and services from which each reportable business segment derives its revenue is included in Notes 2 and 3 in our 2018 10-K.
In evaluating financial performance, our Chief Operating Decision Maker focuses on AEBITDA as management’s segment measure of profit or loss, which is described in Note 3 in our 2018 10-K. As a result of the IPO of a minority interest in our Social gaming business, which was completed on May 7, 2019, we now refer to our Social business segment as our SciPlay business segment, and we also changed our calculation of SciPlay business segment AEBITDA beginning with the first quarter of 2019. SciPlay business segment AEBITDA now reflects intercompany charges settled in cash for corporate services and certain royalties paid for by our SciPlay business segment to other segments or to Corporate (included in the “Unallocated and Reconciling Items” column in the tables below). Business segment information for the three and six months ended June 30, 2018 has been recast to reflect these changes. Additionally, see Note 1 for a description of the IP License Agreement executed in conjunction with the SciPlay IPO that impacts our Gaming business segment and SciPlay business segment AEBITDA commencing with the effectiveness of the IP License Agreement as of May 7, 2019. The accounting policies of our business segments are the same as those described within the Notes in our 2018 10-K. The following tables present our segment information:
 
Three Months Ended June 30, 2019
 
Gaming
 
Lottery
 
SciPlay
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
427

 
$
231

 
$
118

 
$
69

 
$
—

 
$
845

AEBITDA(2)
215

 
103

 
33

 
12

 
(28
)
 
$
335

Reconciling items to consolidated net loss before income taxes:
D&A
(114
)
 
(20
)
 
(2
)
 
(19
)
 
(15
)
 
(170
)
Restructuring and other
(2
)
 
(1
)
 
(1
)
 
(1
)
 
(1
)
 
(6
)
EBITDA from equity investments
 
 
 
 
 
 
 
 
(18
)
 
(18
)
Earnings from equity investments
 
 
 
 
 
 
 
 
7

 
7

Interest expense
 
 
 
 
 
 
 
 
(147
)
 
(147
)
Loss on debt refinancing transactions
 
 
 
 
 
 
 
 
(60
)
 
(60
)
Loss on remeasurement of debt
 
 
 
 
 
 
 
 
(3
)
 
(3
)
Other income, net
 
 
 
 
 
 
 
 
4

 
4

Stock-based compensation
 
 
 
 
 
 
 
 
(10
)
 
(10
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
$
(68
)
(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) Gaming AEBITDA decreased and SciPlay AEBITDA increased compared to prior periods as the IP charges are no longer being allocated to SciPlay per the IP License Agreement discussed in Note 1. The three months ended June 30, 2019 includes $3 million in intellectual property royalties paid by the SciPlay business segment, which were terminated as of May 7, 2019 in connection with the IP License Agreement described in Note 1. The IP charges for the three months ended June 30, 2018 were $6 million.


 
Three Months Ended June 30, 2018
 
Gaming
 
Lottery
 
SciPlay
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
471

 
$
207

 
$
100

 
$
67

 
$
—

 
$
845

AEBITDA
236

 
99

 
23

 
13

 
(31
)
 
$
340

Reconciling items to consolidated net loss before income taxes:
D&A
(121
)
 
(14
)
 
(6
)
 
(17
)
 
(15
)
 
(173
)
Restructuring and other
(2
)
 
3

 
(1
)
 
(4
)
 
(30
)
 
(34
)
EBITDA from equity investments
 
 
 
 
 
 
 
 
(16
)
 
(16
)
Earnings from equity investments
 
 
 
 
 
 
 
 
5

 
5

Interest expense
 
 
 
 
 
 
 
 
(146
)
 
(146
)
Gain on remeasurement of debt
 
 
 
 
 
 
 
 
34

 
34

Other expense, net
 
 
 
 
 
 
 
 
(1
)
 
(1
)
Stock-based compensation
 
 
 
 
 
 
 
 
(15
)
 
(15
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
$
(6
)
(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.


 
Six Months Ended June 30, 2019
 
Gaming
 
Lottery
 
SciPlay
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
849

 
$
458

 
$
236

 
$
139

 
$
—

 
$
1,682

AEBITDA(2)
430

 
207

 
58

 
25

 
(57
)
 
$
663

Reconciling items to consolidated net loss before income taxes:
D&A
(226
)
 
(39
)
 
(4
)
 
(38
)
 
(28
)
 
(335
)
Restructuring and other
(4
)
 
(1
)
 
(2
)
 
(4
)
 
(2
)
 
(13
)
EBITDA from equity investments
 
 
 
 
 
 
 
 
(35
)
 
(35
)
Earnings from equity investments
 
 
 
 
 
 
 
 
13

 
13

Interest expense
 
 
 
 
 
 
 
 
(301
)
 
(301
)
Loss on debt refinancing transactions
 
 
 
 
 
 
 
 
(60
)
 
(60
)
Gain on remeasurement of debt
 
 
 
 
 
 
 
 
2

 
2

Other income, net
 
 
 
 
 
 
 
 
2

 
2

Stock-based compensation
 
 
 
 
 
 
 
 
(24
)
 
(24
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
$
(88
)
(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) Gaming AEBITDA decreased and SciPlay AEBITDA increased compared to prior periods as the IP charges are no longer being allocated to SciPlay per the IP License Agreement discussed in Note 1. The six months ended June 30, 2019 includes $10 million in intellectual property royalties paid by the SciPlay business segment, which were terminated as of May 7, 2019 in connection with the IP License Agreement described in Note 1. The IP charges for the six months ended June 30, 2018 were $13 million.

 
Six Months Ended June 30, 2018
 
Gaming
 
Lottery
 
SciPlay
 
Digital
 
Unallocated and Reconciling Items(1)
 
Total
Total revenue
$
914

 
$
409

 
$
197

 
$
137

 
$
—

 
$
1,657

AEBITDA
454

 
193

 
46

 
30

 
(63
)
 
$
660

Reconciling items to consolidated net loss before income taxes:
D&A
(260
)
 
(28
)
 
(13
)
 
(33
)
 
(27
)
 
(361
)
Restructuring and other
(3
)
 
2

 
(19
)
 
(10
)
 
(56
)
 
(86
)
EBITDA from equity investments
 
 
 
 
 
 
 
 
(35
)
 
(35
)
Earnings from equity investments
 
 
 
 
 
 
 
 
12

 
12

Interest expense
 
 
 
 
 
 
 
 
(301
)
 
(301
)
Loss on debt financing transactions
 
 
 
 
 
 
 
 
(93
)
 
(93
)
Gain on remeasurement of debt
 
 
 
 
 
 
 
 
33

 
33

Other expense, net
 
 
 
 
 
 
 
 
(7
)
 
(7
)
Stock-based compensation
 
 
 
 
 
 
 
 
(24
)
 
(24
)
Net loss before income taxes
 
 
 
 
 
 
 
 
 
 
$
(202
)
(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.