We conduct substantially all of our business through our U.S. and foreign subsidiaries. As of December 31, 2019, SGI’s obligations under the 2021 Notes, the 2025 Secured Notes, the 2026 Secured Euro Notes, the 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, the 2028 Unsecured Notes, and the 2029 Unsecured Notes were fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. We redeemed all of our 2022 Unsecured Notes during the second and fourth quarters of 2019, which were previously issued by SGI and fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. The guarantees of our 2022 Unsecured Notes were released in connection with the redemption of the 2022 Unsecured Notes. We redeemed all of our 2020 Notes during the fourth quarter of 2019, which were previously issued by SGI and fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. The guarantees of our 2020 Notes were released in connection with the redemption of the 2020 Notes. We redeemed all of the outstanding 2022 Secured Notes during the first quarter of 2018, which were previously issued by SGI and fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. The guarantees of our 2022 Secured Notes were released in

connection with the redemption of the 2022 Secured Notes. We redeemed all of the outstanding 8.125% senior subordinated notes due 2018 issued by SGC during the first quarter of 2017, which were previously issued by SGC and fully and unconditionally and jointly and severally guaranteed by the Guarantor Subsidiaries. The guarantees of our 2021 Notes, 2025 Secured Notes, 2026 Secured Euro Notes, 2026 Unsecured Euro Notes, 2026 Unsecured Notes, 2028 Unsecured Notes, and 2029 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 SGC and SGI; and (5) 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) SGC, (2) SGI, (3) the Guarantor Subsidiaries and (4) the Non-Guarantor Subsidiaries as of December 31, 2019 and December 31, 2018 and for the years ended December 31, 2019, 2018 and 2017. The condensed consolidating financial information has been presented to show the nature of assets held, results of operations and cash flows of SGC, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the current guarantee structures of our 2021 Notes, 2025 Secured Notes, 2026 Secured Euro Notes, 2026 Unsecured Euro Notes, 2026 Unsecured Notes, 2028 Unsecured Notes, and 2029 Unsecured Notes were in effect at the beginning of the periods presented.

The condensed consolidating financial information reflects the investments of SGC 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.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	97		$	2		$	1	$	213	$	—		$	313
Restricted cash	—			1			40		10		—			51
Accounts receivable, net	—			91			221		337		—			649
Notes receivable, net	—			—			94		12		—			106
Inventories	—			53			113		87		(9		)	244
Prepaid expenses, deposits and other current assets	9			62			84		97		—			252
Property and equipment, net	31			95			197		209		(32		)	500
Operating lease right-of-use, net	1			24			30		50		—			105
Investment in subsidiaries	3,133			1,024			1,153		—		(5,310		)	—
Goodwill	—			240			1,897		1,143		—			3,280
Intangible assets, net	31			34			1,087		364		—			1,516
Intercompany balances	—			5,845			—		—		(5,845		)	—
Software, net	46			36			94		82		—			258
Other assets⁽²⁾	87			411			49		313		(325		)	535
Total assets	$	3,435		$	7,918		$	5,060	$	2,917	$	(11,521	)	$	7,809
Liabilities and stockholders’ (deficit) equity
Current portion of long-term debt	$	—		$	42		$	2	$	1	$	—		$	45
Other current liabilities	52			190			256		248		(25		)	721
Long-term debt, excluding current portion	—			8,673			7		—		—			8,680
Operating lease liabilities	1			19			25		43		—			88
Other long-term liabilities	52			22			547		179		(417		)	383
Intercompany balances	5,542			—			3		300		(5,845		)	—
Total SGC stockholders’ (deficit) equity	(2,212		)	(1,028		)	4,220		2,042		(5,234		)	(2,212		)
Noncontrolling interest	—			—			—		104		—			104
Total liabilities and stockholders’ (deficit) equity	$	3,435		$	7,918		$	5,060	$	2,917	$	(11,521	)	$	7,809
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, which were issued in March 2019, and the 2028 Unsecured Notes and the 2029 Unsecured Notes, which were issued in November 2019.
(2) Includes $11 million in non-current restricted cash for Guarantor Subsidiaries.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	74		$	1		$	—	$	94	$	(1	)	$	168
Restricted cash	—			1			32		6		—			39
Accounts receivable, net	—			79			205		315		—			599
Notes receivable, net	—			—			101		13		—			114
Inventories	—			40			82		111		(17		)	216
Prepaid expenses, deposits and other current assets	6			63			92		72		—			233
Property and equipment, net	31			112			219		218		(33		)	547
Investment in subsidiaries	2,836			975			1,093		—		(4,904		)	—
Goodwill	—			240			1,897		1,143		—			3,280
Intangible assets, net	43			34			1,291		441		—			1,809
Intercompany balances	—			6,054			—		—		(6,054		)	—
Software, net	58			39			128		60		—			285
Other assets⁽²⁾	110			404			46		308		(440		)	428
Total assets	$	3,158		$	8,042		$	5,186	$	2,781	$	(11,449	)	$	7,718
Liabilities and stockholders’ (deficit) equity
Current portion of long-term debt	$	—		$	42		$	—	$	3	$	—		$	45
Other current liabilities	64			162			248		254		(26		)	702
Long-term debt, excluding current portion	—			8,991			—		1		—			8,992
Other long-term liabilities	106			8			637		172		(481		)	442
Intercompany balances	5,451			—			49		554		(6,054		)	—
Stockholders’ (deficit) equity	(2,463		)	(1,161		)	4,252		1,797		(4,888		)	(2,463		)
Total liabilities and stockholders’ (deficit) equity	$	3,158		$	8,042		$	5,186	$	2,781	$	(11,449	)	$	7,718

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, which were issued in October 2017 and February 2018, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
(2) Includes $12 million and $1 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	590		$	1,538		$	1,648		$	(376	)	$	3,400
Cost of services, cost of product sales and cost of instant products⁽²⁾	—			387			446			776			(325		)	1,284
Selling, general and administrative	132			35			223			360			(43		)	707
Research and development	—			5			86			97			—			188
Depreciation, amortization and impairments	53			40			392			180			(18		)	647
Restructuring and other	4			1			6			17			—			28
Operating (loss) income	(189		)	122			385			218			10			546
Interest expense	—			(588		)	—			(1		)	—			(589		)
Loss on debt financing transactions	—			(100		)	—			—			—			(100		)
Gain on remeasurement of debt	—			9			—			—			—			9
Other income (expense), net	191			586			(660		)	(91		)	—			26
Net income (loss) before equity in (loss) income of subsidiaries and income taxes	2			29			(275		)	126			10			(108		)
Equity in (loss) income of subsidiaries	(109		)	8			6			—			95			—
Income tax (expense) benefit	(23		)	(8		)	65			(44		)	—			(10		)
Net (loss) income	(130		)	29			(204		)	82			105			(118		)
Less: Net income attributable to noncontrolling interest	—			—			—			12			—			12
Net (loss) income attributable to SGC	$	(130	)	$	29		$	(204	)	$	70		$	105		$	(130	)
Net (loss) income	$	(130	)	$	29		$	(204	)	$	82		$	105		$	(118	)
Other comprehensive income (loss)	8			9			(2		)	(1		)	(6		)	8
Total comprehensive (loss) income	(122		)	38			(206		)	81			99			(110		)
Less: comprehensive income attributable to noncontrolling interest	—			—			—			12			—			12
Comprehensive (loss) income attributable to SGC	$	(122	)	$	38		$	(206	)	$	69		$	99		$	(122	)

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, which were issued in March 2019, and the 2028 Unsecured Notes and the 2029 Unsecured Notes, which were issued in November 2019.
(2) Excludes D&A.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	547		$	1,654		$	1,540		$	(378	)	$	3,363
Cost of services, cost of product sales and cost of instant products⁽²⁾	—			361			490			721			(317		)	1,255
Selling, general and administrative	154			42			227			326			(52		)	697
Research and development	—			3			87			112			—			202
Depreciation, amortization and impairments	44			33			440			188			(15		)	690
Restructuring and other	195			(1		)	9			50			—			253
Operating (loss) income	(393		)	109			401			143			6			266
Interest expense	—			(596		)	—			(1		)	—			(597		)
Loss on debt financing transactions	—			(93		)	—			—			—			(93		)
Gain on remeasurement of debt	—			43			—			—			—			43
Other income (expense), net	336			535			(745		)	(84		)	—			42
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(57		)	(2		)	(344		)	58			6			(339		)
Equity in (loss) income of subsidiaries	(219		)	44			(28		)	—			203			—
Income tax (expense) benefit	(76		)	—			82			(19		)	—			(13		)
Net (loss) income	$	(352	)	$	42		$	(290	)	$	39		$	209		$	(352	)
Other comprehensive (loss) income	(100		)	30			(66		)	(114		)	150			(100		)
Comprehensive (loss) income	$	(452	)	$	72		$	(356	)	$	(75	)	$	359		$	(452	)

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, which were issued in October 2017 and February 2018, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
(2) Excludes D&A.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	498		$	1,684		$	1,223		$	(321	)	$	3,084
Cost of services, cost of product sales and cost of instant products⁽²⁾	—			342			511			629			(318		)	1,164
Selling, general and administrative	127			41			244			250			(49		)	613
Research and development	2			7			101			74			—			184
Depreciation, amortization and impairments	72			31			463			128			(11		)	683
Restructuring and other	30			5			7			4			—			46
Operating (loss) income	(231		)	72			358			138			57			394
Interest expense	(5		)	(604		)	—			(1		)	—			(610		)
Loss on debt financing transactions	(1		)	(37		)	—			—			—			(38		)
Other income (expense), net	88			150			(185		)	(26		)	—			27
Net (loss) income before equity in income of subsidiaries and income taxes	(149		)	(419		)	173			111			57			(227		)
Equity in (loss) income of subsidiaries	(45		)	67			22			—			(44		)	—
Income tax (expense) benefit	(48		)	158			(86		)	(39		)	—			(15		)
Net (loss) income	$	(242	)	$	(194	)	$	109		$	72		$	13		$	(242	)
Other comprehensive income	134			10			66			129			(205		)	134
Comprehensive (loss) income	$	(108	)	$	(184	)	$	175		$	201		$	(192	)	$	(108	)

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, and the 2025 Secured Notes, which were issued in October 2017 and February 2018.
(2) Exclusive of D&A.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(57	)	$	173		$	109		$	320		$	1		$	546
Cash flows from investing activities:
Capital expenditures	(22		)	(28		)	(112		)	(123		)	—			(285		)
Distributions of capital from equity investments	—			—			—			23			—			23
Additions to equity method investments	—			(1		)	—			—			—			(1		)
Other, principally change in intercompany investing activities	—			289			—			—			(289		)	—
Net cash (used in) provided by investing activities	(22		)	260			(112		)	(100		)	(289		)	(263		)
Cash flows from financing activities:
Payments on long-term debt, net of proceeds	—			(395		)	—			(2		)	—			(397		)
Payments of debt issuance and deferred financing costs	—			(34		)	—			(1		)	—			(35		)
Payments on license obligations	(27		)	(1		)	(10		)	(2		)	—			(40		)
Sale of future revenue	—			—			11			—			—			11
Net proceeds from the sale of SciPlay common stock	—			—			—			342			—			342
Payments of deferred SciPlay common stock offering costs	—			—			—			(9		)	—			(9		)
Net redemptions of common stock under stock-based compensation plans and other	7			(2		)	(4		)	(2		)	—			(1		)
Other, principally change in intercompany financing activities	122			—			15			(426		)	289			—
Net cash provided by (used in) financing activities	102			(432		)	12			(100		)	289			(129		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			1			—			1
Increase in cash, cash equivalents and restricted cash	23			1			9			121			1			155
Cash, cash equivalents, and restricted cash, beginning of period	74			2			43			102			(1		)	220
Cash, cash equivalents and restricted cash, end of period	$	97		$	3		$	52		$	223		$	—		$	375

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, which were issued in March 2019, and the 2028 Unsecured Notes and the 2029 Unsecured Notes, which were issued in November 2019.



	SGC (Parent)			SGI (Issuer¹)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(221	)	$	18		$	206		$	341		$	2		$	346
Cash flows from investing activities:
Capital expenditures	(35		)	(63		)	(146		)	(147		)	—			(391		)
Acquisitions of businesses and assets, net of cash acquired	—			—			(32		)	(265		)	—			(297		)
Proceeds from asset sales	—			—			40			—			—			40
Acquisitions and additions to equity method investments	—			(2		)	—			(178		)	—			(180		)
Distributions of capital from equity investments	—			—			—			30			—			30
Other, principally change in intercompany investing activities	—			(159		)	—			—			159			—
Net cash used in investing activities	(35		)	(224		)	(138		)	(560		)	159			(798		)
Cash flows from financing activities:
Payments on long-term debt, net of proceeds	—			246			—			(8		)	—			238
Payments of assumed NYX debt and other acquisitions debt	—			—			(2		)	(288		)	—			(290		)
Payments of debt issuance and deferred financing costs	—			(38		)	—			—			—			(38		)
Payments on license obligations	(43		)	—			(2		)	—			—			(45		)
Net redemptions of common stock under stock-based compensation plans and other	(18		)	—			(3		)	—			—			(21		)
Other, principally change in intercompany financing activities	(342		)	—			(62		)	563			(159		)	—
Net cash (used in) provided by financing activities	(403		)	208			(69		)	267			(159		)	(156		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			(6		)	—			(6		)
(Decrease) increase in cash, cash equivalents and restricted cash	(659		)	2			(1		)	42			2			(614		)
Cash, cash equivalents, and restricted cash, beginning of period	733			—			44			60			(3		)	834
Cash, cash equivalents and restricted cash, end of period	$	74		$	2		$	43		$	102		$	(1	)	$	220

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, which were issued in October 2017 and February 2018, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.

Year Ended December 31, 2017



	SGC (Parent¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(41	)	$	(300	)	$	567		$	283		$	(2	)	$	507
Cash flows from investing activities:
Capital expenditures	(53		)	(31		)	(129		)	(81		)	—			(294		)
Acquisitions of businesses, net of cash acquired	—			—			(26		)	(32		)	—			(58		)
Acquisitions and additions to equity method investments	—			—			—			(107		)	—			(107		)
Distributions of capital on equity investments	—			—			—			34			—			34
Changes in other assets and liabilities and other	—			—			8			2			—			10
Other, principally change in intercompany investing activities	—			(569		)	—			(120		)	689			—
Net cash (used in) provided by investing activities	(53		)	(600		)	(147		)	(304		)	689			(415		)
Cash flows from financing activities:
Net (payments) proceeds of long-term debt including senior notes and term loans	(250		)	958			—			(7		)	—			701
Payments of debt issuance and deferred financing costs	—			(59		)	—			—			—			(59		)
Payments on license obligations	(48		)	—			(5		)	—			—			(53		)
Net redemptions of common stock under stock-based compensation plans and other	(8		)	—			(1		)	—			—			(9		)
Other, principally change in intercompany financing activities	1,100			—			(411		)	—			(689		)	—
Net cash provided by (used in) financing activities	794			899			(417		)	(7		)	(689		)	580
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			5			—			5
Increase (decrease) in cash, cash equivalents and restricted cash	700			(1		)	3			(23		)	(2		)	677
Cash, cash equivalents, and restricted cash, beginning of period	33			1			41			83			(1		)	157
Cash, cash equivalents and restricted cash, end of period	$	733		$	—		$	44		$	60		$	(3	)	$	834

(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, and the 2025 Secured Notes, which were issued in October 2017 and February 2018.