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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
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: 001-11693 
LIGHT & WONDER, INC.
(Exact name of registrant as specified in its charter)
Nevada
81-0422894
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
 
6601 Bermuda Road, Las Vegas, Nevada 89119
(Address of principal executive offices)
(Zip Code) 
(702) 897-7150
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.001 par valueLNWThe NASDAQ Stock Market
Preferred Stock Purchase RightsThe NASDAQ Stock Market
 
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 every Interactive Data File required to be submitted 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 such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer 
Non-accelerated filer 
Smaller reporting company 
Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

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 May 5, 2022:
Common Stock: 95,665,390




LIGHT & WONDER, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL AND OTHER INFORMATION
THREE MONTHS ENDED MARCH 31, 2022
 
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2



Glossary of Terms
The following terms or acronyms used in this Quarterly Report on Form 10-Q are defined below:
Term or AcronymDefinition
2021 10-K2021 Annual Report on Form 10-K filed with the SEC on March 1, 2022
2025 Secured Notes5.000% senior secured notes due 2025 issued by SGI
2026 Secured Euro Notes3.375% senior secured notes due 2026 issued by SGI
2026 Unsecured Euro Notes5.500% senior unsecured notes due 2026 issued by SGI
2025 Unsecured Notes
8.625% senior unsecured notes due 2025 issued by SGI
2026 Unsecured Notes8.250% senior unsecured notes due 2026 issued by SGI
2028 Unsecured Notes7.000% senior unsecured notes due 2028 issued by SGI
2029 Unsecured Notes7.250% senior unsecured notes due 2029 issued by SGI
AEBITDAAdjusted EBITDA, our performance measure of profit or loss for our business segments
April 2022 Refinancing
On April 14, 2022, we completed a series of refinancing transactions, which included (1) entering into a new credit agreement consisting of a (a) $2,200 million new term loan facility maturing in April 2029 and (b) $750 million new revolving credit facility maturing in April 2027, along with (2) using the net proceeds from the divestiture of the Lottery Business and net proceeds from borrowings under the new term loan facility to pay off our existing term loan facility and to redeem all of our outstanding 5.000% Senior Secured Notes due 2025, 3.375% Senior Secured Euro Notes due 2026, 5.500% Senior Unsecured Euro Notes due 2026 and 8.250% Senior Unsecured Notes due 2026 and, in each case, to pay accrued and unpaid interest thereon plus any related premiums, fees and expenses (see Note 11 for additional details)
ASCAccounting Standards Codification
ASUAccounting Standards Update
CMScasino-management system
COVID-19Coronavirus disease first identified in 2019 (declared a pandemic by the World Health Organization on March 11, 2020), the resulting pandemic and the associated impacts on the macroeconomic environment in general and our business environment specifically
D&Adepreciation, amortization and impairments (excluding goodwill)
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
KPIsKey Performance Indicators
LBOlicensed betting office
LIBORLondon Interbank Offered Rate
Notea note in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, unless otherwise indicated
Participationrefers 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 the amount wagered less payouts; (2) fixed daily-fees; (3) a percentage of the amount wagered; or (4) a combination of (2) and (3)
Pending Divestituresthe intended sale of certain international Lottery business subsidiaries (Scientific Games International GmbH, and its two subsidiaries (the “Austria Business”)) that are awaiting regulatory approval in Austria, which approval is expected to be received and the transaction to be completed by the end of the second quarter of 2022 and the sale of our Sports Betting business, which is expected to be completed in the third quarter of 2022, both subject to applicable regulatory approvals and in the case of the sale of our Sports Betting business, other customary closing conditions. See Notes 1 and 2 in this form 10-Q and Notes 1 and 2 in our 2021 10-K
R&Dresearch and development
RMGreal-money gaming
RSUrestricted stock unit
SECSecurities and Exchange Commission
Secured Notesrefers to the 2025 Secured Notes and 2026 Secured Euro Notes, collectively
Senior Notesthe Secured Notes and the Unsecured Notes
SciPlaySciPlay Corporation, formerly referred to as our Social business segment
SciPlay Revolver$150 million revolving credit facility agreement entered into by SciPlay Holding Company, LLC, a subsidiary of SciPlay Corporation, that matures in May 2024

3



SG&Aselling, general and administrative
L&WLight & Wonder, Inc.
SGIScientific Games International, Inc., a wholly-owned subsidiary of L&W
SGI Revolver
Revolving credit facility with aggregate commitments of $650 million extended pursuant to that certain credit agreement, dated as of October 18, 2013 (and amended, supplemented and modified from time to time), by and among SGI, as the borrower, L&W, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto
SGI Term Loan B-5
Term loan facility, issued pursuant to that certain credit agreement, dated as of October 18, 2013 (and amended, supplemented and modified from time to time), by and among SGI, as the borrower, L&W, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto
Shufflersvarious models of automatic card shufflers, deck checkers and roulette chip sorters
SOFRSecured Overnight Financing Rate
Unsecured Notesrefers to the 2026 Unsecured Euro Notes, 2026 Unsecured Notes, 2028 Unsecured Notes and 2029 Unsecured Notes, collectively
U.S. GAAPaccounting principles generally accepted in the U.S.
U.S. jurisdictionsthe 50 states in the U.S. plus the District of Columbia, U.S. Virgin Islands and Puerto Rico
VGTvideo gaming terminal
VLTvideo lottery terminal
Intellectual Property Rights 
All ® notices signify marks registered in the United States. © 2022 Light & Wonder, Inc. All Rights Reserved.
The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the board, cards, and the playing pieces are trademarks of Hasbro for its property trading game and game equipment and are used with permission. © 2022 Hasbro. All Rights Reserved. Licensed by Hasbro.
sgms-20220331_g1.jpg and James Bond indicia © 1962-2022 Danjaq, LLC and MGM. sgms-20220331_g1.jpg and all other James Bond related trademarks are trademarks of Danjaq, LLC. All Rights Reserved.
THE FLINTSTONES™ and all related characters and elements © & ™ Hanna-Barbera.
©2022 Playboy Enterprises International, Inc. PLAYBOY, PLAYMATE, PLAYBOY BUNNY, and the Rabbit Head Design are trademarks of Playboy Enterprises International, Inc. and used under license by Light & Wonder, Inc.

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. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. 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:
the impact of the COVID-19 pandemic and any resulting unfavorable social, political, economic and financial conditions, including the temporary and potentially recurring closure of casinos and lottery operations on a jurisdiction-by-jurisdiction basis;
risks relating to the Pending Divestitures, including lack of assurance regarding the timing of completion of the pending and proposed transactions and related risks associated with the ongoing operations and activities of the Sports Betting Business, that certain deferred tax assets may not be realized relative to the anticipated tax gain from these divestitures, that the transactions will yield additional value or will not adversely impact our business, financial results, results of operations, cash flows or stock price;
our inability to successfully execute our new strategy and impending rebranding initiative;
our inability to further de-lever and position the Company for enhanced growth with certain net proceeds from the completed Lottery business sale and the Pending Divestitures;
slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
risks relating to foreign operations, including anti-corruption laws, fluctuations in currency rates, 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 continuing uncertainty following the U.K.’s withdrawal from the European Union;
difficulty predicting what impact, if any, new tariffs imposed by and other trade actions taken by the U.S. and foreign jurisdictions could have on our business;
U.S. and international economic and industry conditions;
level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
the transition from LIBOR to SOFR, which may adversely affect interest rates;
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;
competition;
inability to win, retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
the impact of U.K. legislation approving the reduction of fixed-odds betting terminals maximum stakes limit on LBO operators, including the related closure of certain LBO shops;
inability to adapt to, and offer products that keep pace with, evolving technology, including any failure of our investment of significant resources in our R&D efforts;
changes in demand for our products and services;
inability to benefit from, and risks associated with, strategic equity investments and relationships;
inability to achieve some or all of the anticipated benefits of SciPlay being a standalone public company;
dependence on suppliers and manufacturers;
SciPlay’s dependence on certain key providers;
ownership changes and consolidation in the gaming industry;
fluctuations in our results due to seasonality and other factors;
security and integrity of our products and systems, including the impact of any security breaches or cyber-attacks;

5



protection of our intellectual property, inability to license third-party intellectual property and the intellectual property rights of others;
reliance on or failures in information technology and other systems;
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, environmental laws and our strategic relationships;
reliance on technological blocking systems;
challenges or disruptions relating to the completion of the domestic migration to our enterprise resource planning system;
laws and government regulations, both foreign and domestic, including those relating to gaming, data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information and other consumer data, and environmental laws, and those laws and regulations that affect companies conducting business on the internet, including online gambling;
legislative interpretation and enforcement, regulatory perception and regulatory risks with respect to gaming, especially internet wagering, social gaming and sports wagering;
changes in tax laws or tax rulings, or the examination of our tax positions;
opposition to legalized gaming or the expansion thereof and potential restrictions on internet wagering;
significant opposition in some jurisdictions to interactive social gaming, including social casino gaming and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;
expectations of shift to regulated digital gaming or sports wagering;
inability to develop successful products and services and capitalize on trends and changes in our industries, including the expansion of internet and other forms of digital gaming;
the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions;
incurrence of restructuring costs;
goodwill impairment charges including changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
stock price volatility;
failure to maintain adequate internal control over financial reporting;
dependence on key executives;
natural events that disrupt our operations, or those of our customers, suppliers or regulators; and
expectations of growth in total consumer spending on social casino gaming.
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 “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A in our 2021 10-K. 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 and expressly disclaim any 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, social and digital gaming industries than the same industries in the U.S.
Due to rounding, certain numbers presented herein may not precisely agree or total to the previously reported amounts.

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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share amounts)
Three Months Ended March 31,
20222021
Revenue:
Services$431 $364 
Product sales141 89 
Total revenue572 453 
Operating expenses:
Cost of services(1)
90 87 
Cost of product sales(1)
70 40 
Selling, general and administrative175 159 
Research and development53 45 
Depreciation, amortization and impairments108 97 
Restructuring and other36 21 
Operating income 40 4 
Other (expense) income:
Interest expense(116)(121)
Gain on remeasurement of debt7 25 
Other income, net5 7 
Total other expense, net(104)(89)
Net loss from continuing operations before income taxes
(64)(85)
Income tax expense(3)(3)
Net loss from continuing operations
(67)(88)
Net income from discontinued operations, net of tax95 79 
Net income (loss)28 (9)
Less: Net income attributable to noncontrolling interest2 6 
Net income (loss) attributable to L&W$26 $(15)
Per Share - Basic:
Net loss from continuing operations
$(0.72)$(0.98)
Net income from discontinued operations0.98 0.82 
Net income (loss) attributable to L&W$0.26 $(0.16)
Per Share - Diluted:
Net loss from continuing operations
$(0.72)$(0.98)
Net income from discontinued operations0.98 0.82 
Net income (loss) attributable to L&W$0.26 $(0.16)
Weighted average number of shares used in per share calculations:
 
Basic shares97 95 
Diluted shares97 95 
(1) Excludes D&A.
See accompanying notes to condensed consolidated financial statements.

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LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited, in millions)
Three Months Ended March 31,
20222021
Net income (loss)$28 $(9)
Other comprehensive income (loss)
Foreign currency translation loss, net of tax(32) 
Derivative financial instruments unrealized gain, net of tax3 5 
Other comprehensive (loss) income from continuing operations(29)5 
Other comprehensive (loss) income from discontinued operations(8)3 
Total comprehensive loss(9)(1)
Less: comprehensive income attributable to noncontrolling interest2 6 
Comprehensive loss attributable to L&W$(11)$(7)
See accompanying notes to condensed consolidated financial statements.

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LIGHT & WONDER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions, except par value)
As of
March 31, 2022December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$496 $585 
Restricted cash48 41 
Receivables, net of allowance for credit losses $48 and $52, respectively
431 423 
Inventories113 98 
Prepaid expenses, deposits and other current assets110 88 
Assets of businesses held for sale558 497 
Total current assets1,756 1,732 
Non-current assets:
Restricted cash9 9 
Receivables, net of allowance for credit losses $2 and $2, respectively
17 17 
Property and equipment, net197 213 
Operating lease right-of-use assets50 51 
Goodwill2,978 2,892 
Intangible assets, net893 946 
Software, net105 117 
Deferred income taxes344 349 
Other assets86 80 
Assets of businesses held for sale1,517 1,477 
Total assets$7,952 $7,883 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt
$44 $44 
Accounts payable
198 204 
Accrued liabilities
385 444 
Liabilities of businesses held for sale300 282 
Total current liabilities
927 974 
Deferred income taxes
42 35 
Operating lease liabilities
40 40 
Other long-term liabilities
155 170 
Long-term debt, excluding current portion
8,789 8,646 
Liabilities of businesses held for sale136 124 
Total liabilities
10,089 9,989 
Commitments and contingencies (Note 16)


Stockholders’ deficit:
Common stock, par value $0.001 per share: 199 shares authorized; 115 and 114 shares issued and 97 shares outstanding, respectively
1 1 
Additional paid-in capital
1,366 1,337 
Accumulated loss
(3,132)(3,158)
Treasury stock, at cost, 18 and 17 shares, respectively
(226)(175)
Accumulated other comprehensive loss
(298)(261)
Total L&W stockholders’ deficit
(2,289)(2,256)
Noncontrolling interest
152 150 
Total stockholders’ deficit
(2,137)(2,106)
Total liabilities and stockholders’ deficit
$7,952 $7,883 
See accompanying notes to condensed consolidated financial statements.

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LIGHT & WONDER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net income (loss)
$28 $(9)
Less: Income from discontinued operations, net of tax(95)(79)
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities from continuing operations
121 96 
Changes in working capital accounts, excluding the effects of acquisitions
(72)17 
Changes in deferred income taxes and other
4  
Net cash (used in) provided by operating activities from continuing operations
(14)25 
Net cash provided by operating activities from discontinued operations
108 98 
Net cash provided by operating activities94 123 
Cash flows from investing activities:
Capital expenditures(43)(35)
Acquisitions of businesses, net of cash acquired(108) 
Other 1 
Net cash used in investing activities from continuing operations
(151)(34)
Net cash used in investing activities from discontinued operations(25)(27)
Net cash used in investing activities(176)(61)
Cash flows from financing activities:
Borrowings under SGI revolving credit facility
230  
Repayments under SGI revolving credit facility
(70)(100)
Payments on long-term debt (10)(10)
Payments of debt issuance and deferred financing and offering costs
(1) 
Payments on license obligations
(19)(12)
Purchase of treasury stock(51) 
Net redemptions of common stock under stock-based compensation plans and other(25)(13)
Net cash provided by (used in) financing activities from continuing operations
54 (135)
Net cash used in financing activities from discontinued operations(2)(4)
Net cash provided by (used in) financing activities52 (139)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1)(1)
Decrease in cash, cash equivalents and restricted cash
(31)(78)
Cash, cash equivalents and restricted cash, beginning of period701 1,143 
Cash, cash equivalents and restricted cash, end of period
670 1,065 
Less: Cash, cash equivalents and restricted cash of discontinued operations117 117 
Cash, cash equivalents and restricted cash of continuing operations, end of period$553 $948 
Supplemental cash flow information:
Cash paid for interest$117 $123 
Income taxes paid
9 7 
Distributed earnings from equity investments1 4 
Supplemental non-cash transactions:
Non-cash interest expense
$6 $6 
 See accompanying notes to condensed consolidated financial statements.

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LIGHT & WONDER, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, amounts in USD, 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 cross-platform global game company with a focus on content and digital markets. Our portfolio of revenue-generating activities in our continuing operations primarily includes supplying game content and gaming machines, CMSs and table game products and services to licensed gaming entities; providing social casino and other mobile games to retail customers, including casual gaming; and providing a comprehensive suite of digital RMG, distribution platforms, content, products and services to various gaming entities. Our portfolio of revenue-generating activities in the discontinued operations primarily includes providing instant and draw‑based lottery products, lottery systems and lottery content and services to lottery operators along with providing sports wagering solutions to various gaming entities.
We report our results of continuing operations in three business segments—Gaming, SciPlay and iGaming—representing our different products and services. Unless otherwise noted, amounts and disclosures included herein relate to our continuing operations.
Effective April 28, 2022, we changed our name to Light & Wonder, Inc. This change is in part due to the sale of the Lottery Business that will continue to use the Scientific Games name and also to align with our vision of becoming the leading cross-platform global game company.
On September 27, 2021, we entered into a definitive agreement to sell our Sports Betting business to Endeavor Group Holdings, Inc. (“Endeavor”) in a cash and stock transaction. The sale of the Sports Betting Business is expected to be completed in the third quarter of 2022, subject to applicable regulatory approvals and other customary conditions.
On April 4, 2022, we completed the previously announced divestiture of the Lottery Business and received $5.6 billion in gross cash proceeds. This excludes the Austria Business, for which we are awaiting regulatory approval in Austria, which approval is expected to be received and the transaction to be completed by the end of the second quarter of 2022, which will provide an additional $104 million of expected gross cash proceeds.
We have reflected the financial results of these businesses as discontinued operations in our consolidated statements of operations and reflected the assets and liabilities of these businesses as held for sale in our consolidated balance sheets, for all periods presented. Refer to Note 2 for further information.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The accompanying condensed consolidated financial statements include the accounts of L&W, its wholly owned subsidiaries, and 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 L&W and its management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations, comprehensive loss and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2021 10-K. Interim results of operations are not necessarily indicative of results of operations to be expected for a full year.
Significant Accounting Policies
There have been no changes to our significant accounting policies described within the Notes of our 2021 10-K.
Computation of Basic and Diluted Net Income (Loss) Per Share Attributable to L&W
Basic and diluted net income (loss) attributable to L&W per share is based upon net income (loss) attributable to L&W divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the effect of the assumed exercise of stock options and RSUs only in the periods in which such effect would have been dilutive.
Basic and diluted net loss attributable to L&W per share were the same for all periods presented as all common stock equivalents would be anti-dilutive. We excluded 2 million of stock options from the diluted weighted-average common shares

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outstanding for the three months ended March 31, 2022 and 2021, respectively. We excluded 3 million of RSUs from the calculation of diluted weighted-average common shares outstanding for the three months ended March 31, 2022 and 2021, respectively.
SciPlay Acquisition of Alictus Yazilim Anonim Şirketi (“Alictus”)
On March 1, 2022, SciPlay acquired 80% of all issued and outstanding share capital of privately held Alictus, a Turkey-based hyper-casual game studio for approximately $106 million cash consideration, net of cash acquired. The remaining 20% will be acquired ratably for potential additional consideration payable annually based upon the achievement of specified revenue and earnings targets by Alictus during each of the five years following the acquisition date. Any future payments associated with the acquisition of the remaining 20% will represent a redeemable non-controlling interest, with a minimum payout of $0 million and a maximum payout of $200 million. The Alictus acquisition expands SciPlay’s business in the casual gaming market, growing its game pipeline and diversifying its revenue streams as it advances its strategy to be a diversified global game developer.
We accounted for this acquisition using the acquisition method of accounting whereby the total purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on respective estimated fair values. The estimated fair values of the acquired assets, assumed liabilities and resulting goodwill are subject to adjustment as we finalize our purchase price accounting. The following table summarizes an aggregate disclosure related to the acquisition of Alictus and is based on the preliminary purchase price allocation expected to be finalized by the fourth quarter of 2022:
Total Consideration
Cash paid, net of cash acquired(1)
Redeemable non-controlling interest(2)
Allocation of purchase price to Intangible assets, net(3)
Weighted average useful life of acquired intangible assets
Excess purchase price allocated to Goodwill(4)
$134 $106 $21 $34 6Years$93 
(1) Exclusive of $6 million acquired in short term investments.
(2) The fair value of the redeemable non-controlling interest was determined using a Monte Carlo simulation model with a discount rate ranging between 2% and 3% and primarily based on reaching certain revenue and earnings-based metrics, with a maximum payout of up to $200 million.
(3) Intangible assets primarily consist of intellectual property consisting of games technology and content and trade name. The fair value of these intangible assets was determined using an income approach method and level 3 inputs in the hierarchy as established by ASC 820. The discount rate used in the valuation analysis was 18%, and the royalty rate used was 1% for the valuation of the “Alictus” trade name and 21% for the valuation of the acquired game content and related technology.
(4) The factors contributing to the recognition of acquisition goodwill are based on game portfolio diversification, expected synergies, assembled workforce and other strategic benefits. None of the resultant goodwill is expected to be deductible for income tax purposes.
The revenue and earning associated with the above acquisition are immaterial to our current and historical consolidated financial statements.
In April 2022, we acquired Playzido, which will expand our iGaming content offering.
New Accounting Guidance - Not Yet Adopted
The FASB issued ASU No. 2020-04 and subsequently ASU No. 2021-01, Reference Rate Reform (Topic 848) in March 2020 and January 2021, respectively. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, including derivative instruments impacted by changes in the interest rates used for discounting cash flows for computing variable margin settlements, subject to meeting certain criteria, that reference LIBOR or other reference rates expected to be discontinued by June 2023. The ASUs establish certain contract modification principles that entities can apply in other areas that may be affected by reference rate reform and certain elective hedge accounting expedients and exceptions. The ASUs may be applied prospectively. Based on our preliminary assessment completed to date, we do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements.
We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements.
(2) Discontinued Operations
On April 4, 2022, we completed the divestiture of the Lottery Business (excluding the Austria Business as described in Note 1), for which we received $5.6 billion in gross cash proceeds.

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As described in Note 1, we have reflected the Lottery and Sports Betting Businesses as discontinued operations in our consolidated statements of operations and reflected the assets and liabilities of these businesses as held for sale in our consolidated balance sheets, for all periods presented.
The summarized results of our discontinued operations were as follows:
Three Months Ended March 31,
20222021
Total revenue$288 $276 
Total cost of revenue(1)
150 139 
Other operating expenses(2)
41 60 
Operating income97 77 
Total other income, net8 2 
Net income from discontinued operations before income taxes
105 79 
Income tax expense(10) 
Net income from discontinued operations, net of tax included in the consolidated statement of operations$95 $79 
(1) Excludes D&A.
(2) Includes D&A of $— million and $26 million for the three months ended March 31, 2022 and 2021, respectively, along with stock-based compensation of $7 million and $4 million for the three months ended March 31, 2022 and 2021, respectively. Due to the discontinued operations classification of these businesses as of the third quarter of 2021, the D&A for these businesses has ceased.
The following table summarizes the major classes of assets and liabilities of businesses held for sale.
As of
March 31, 2022December 31, 2021
ASSETS
Cash and cash equivalents$86 $44 
Restricted cash31 22 
Receivables, net194 214 
Inventories113 94 
Prepaid expenses deposits and other current assets134 123 
Total current assets of businesses held for sale558 497 
Property and equipment, net229 217 
Intangible assets and software, net334 304 
Goodwill623 623 
Equity investments249 251 
Other assets82 82 
Total non-current assets of businesses held for sale1,517 1,477 
Total assets of businesses held for sale$2,075 $1,974 
LIABILITIES
Accounts payable$103 $95 
Accrued liabilities and other197 187 
Total current liabilities of businesses held for sale300 282 
Operating lease liabilities37 34 
Other99 90 
Total non-current liabilities of businesses held for sale136 124 
Total liabilities of businesses held for sale$436 $406 
(3) Revenue Recognition

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The following table disaggregates revenues by type within each of our business segments:
Three Months Ended March 31,
20222021
Gaming
Gaming operations(1)
$155 $113 
Gaming machine sales103 55 
Gaming systems51 42 
Table products46 34 
Total$355 $244 
SciPlay
Mobile in-app purchases$140 $133 
Web in-app purchases and other(2)
18 18 
Total$158 $151 
iGaming$59 $58 
(1) Gaming operations revenue for the three months ended March 31, 2021 benefited from $6 million U.K. fixed odds betting terminals (“FOBT”) recovery received from certain U.K. customers for value-added tax charged on FOBTs (“FOBT recovery”) related to a 2020 U.K. court ruling associated with overcharging of value-added tax for gaming operators that consequently reduced our net gaming revenues in those affected prior periods related to these customers and arrangements.
(2) Other primarily represents revenue generated from providing advertising platforms with access to our game software platform, which facilitates the placement of advertising inventory, which was not material in the periods presented.
The amount of rental income revenue that is outside the scope of ASC 606 was $113 million and $63 million for the three months ended March 31, 2022, and 2021, respectively.
Contract Liabilities and Other Disclosures
The following table summarizes the activity in our contract liabilities for the reporting period:
Three Months Ended March 31, 2022
Contract liability balance, beginning of period(1)
$37 
Liabilities recognized during the period5 
Amounts recognized in revenue from beginning balance(5)
Contract liability balance, end of period(1)
$37 
(1) Contract liabilities are included within Accrued liabilities and Other long-term liabilities in our consolidated balance sheets.
    
The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on our consolidated balance sheets. Other than contracts with customers with financing arrangements exceeding 12 months, revenue recognition is generally proximal to conversion to cash. The following table summarizes our balances in these accounts for the periods indicated (other than contract liabilities disclosed above):
Receivables
Contract Assets(1)
Beginning of period balance$440 $19 
End of period balance, March 31, 2022
448 25 
(1) Contract assets are included primarily within Prepaid expenses, deposits and other current assets in our consolidated balance sheets.
As of March 31, 2022, we did not have material unsatisfied performance obligations for contracts expected to be long-term or contracts for which we recognize revenue at an amount other than for which we have the right to invoice for goods or services delivered or performed.
(4) Business Segments

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We report our operations in three business segments—Gaming, SciPlay and iGaming—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 3 and 4 in our 2021 10-K.
In evaluating financial performance, our Chief Operating Decision Maker focuses on AEBITDA as management’s primary segment measure of profit or loss, which is described in footnote (2) to the below table. The accounting policies of our business segments are the same as those described within the Notes in our 2021 10-K. The following tables present our segment information:
Three Months Ended March 31, 2022
GamingSciPlayiGaming
Unallocated and Reconciling Items(1)
Total
Total revenue
$355 $158 59 $ $572 
AEBITDA(2)
171 44 21 (34)$202 
Reconciling items to Net loss from continuing operations before income taxes:
D&A
(83)(5)(14)(6)(108)
Restructuring and other
(3)(2)(1)(30)(36)
Interest expense
(116)(116)
Gain on remeasurement of debt7 7 
Other income, net
2 2 
Stock-based compensation
(15)(15)
Net loss from continuing operations before income taxes
$(64)
(1) Includes amounts not allocated to the business segments (including corporate costs) and items to reconcile the total business segments AEBITDA to our consolidated net loss from continuing operations before income taxes.
(2) AEBITDA is reconciled to net loss from continuing operations before income taxes with the following adjustments: (1) depreciation and amortization expense and impairment charges (including goodwill impairments); (2) restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition costs and other unusual items; (3) interest expense; (4) loss (gain) on debt financing transactions; (5) change in fair value of investments and remeasurement of debt; (6) other expense (income), net including foreign currency (gains), and losses and earnings (loss) from equity investments; and (7) stock-based compensation. AEBITDA is presented as our primary segment measure of profit or loss.

Three Months Ended March 31, 2021
GamingSciPlayiGaming
Unallocated and Reconciling Items(1)
Total
Total revenue
$244 $151 $58 $ $453 
AEBITDA(2)
107 46 21 (32)$142 
Reconciling items to Net loss from continuing operations before income taxes:
D&A
(75)(3)(12)(7)(97)
Restructuring and other
(3) (1)(17)(21)
Interest expense
(121)(121)
Gain on remeasurement of debt25 25 
Other income, net
6 6 
Stock-based compensation(19)(19)
Net loss from continuing operations before income taxes
$(85)
(1) Includes amounts not allocated to the business segments (including corporate costs) and items to reconcile the total business segments AEBITDA to our consolidated net loss from continuing operations before income taxes.
(2) AEBITDA is described in footnote (2) to the first table in this Note 4.
(5) Restructuring and Other
Restructuring and other includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi)

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acquisition and disposition related costs and other unusual items. The following table summarizes pre-tax restructuring and other costs for the periods presented:
Three Months Ended March 31,
20222021
Employee severance and related$1 $1 
Strategic review and related(1)
30 17 
Restructuring, integration and other5 3 
Total$36 $21 
(1) Includes costs associated with the Lottery and Sports Betting divestitures as described in Notes 1 and 2.
(6) Receivables, Allowance for Credit Losses and Credit Quality of Receivables
Receivables
The following table summarizes the components of current and long-term receivables, net:
As of
March 31, 2022December 31, 2021
Current:
Receivables
$479 $475 
Allowance for credit losses
(48)(52)
Current receivables, net
431 423 
Long-term:
Receivables
19 19 
Allowance for credit losses
(2)(2)
Long-term receivables, net17 17 
Total receivables, net
$448 $440 
Allowance for Credit Losses
We manage our receivable portfolios using both geography and delinquency as key credit quality indicators. The following summarizes geographical delinquencies of total receivables, net:
As of
March 31, 2022Balances over 90 days past dueDecember 31, 2021Balances over 90 days past due
Receivables:
U.S. and Canada$257 $17 $321 $37 
International241 21 173 44 
Total receivables498 38 494 81 
Receivables allowance:
U.S. and Canada(21)(4)(18)(6)
International(29)(19)(36)(19)
Total receivables allowance(50)(23)(54)(25)
Receivables, net$448 $15 $440 $56 

Account balances are charged against the allowances after all internal and external collection efforts have been exhausted and the potential for recovery is considered remote.
The activity in our allowance for receivable credit losses for each of the three months ended March 31, 2022 and 2021 is as follows:

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20222021
TotalU.S. and CanadaInternationalTotal
Beginning allowance for credit losses
$(54)$(18)$(36)$(81)
Provision
(3)(3) 1 
Charge-offs and recoveries
7  7 2 
Allowance for credit losses as of March 31$(50)$(21)$(29)$(78)
At March 31, 2022, 3% of our total receivables, net, were past due by over 90 days compared to 13% at December 31, 2021.

Credit Quality of Receivables
We have certain concentrations of outstanding receivables in international locations that impact our assessment of the credit quality of our receivables. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our receivables. The international customers with significant concentrations (generally deemed to be exceeding 10%) of our receivables with terms longer than one year are primarily in the Latin America region (“LATAM”) and are primarily comprised of Mexico, Peru and Argentina. The following table summarizes our LATAM receivables:
As of March 31, 2022
TotalCurrent or Not Yet DueBalances Over 90 days Past Due
Receivables$91 $40 $51 
Allowance for credit losses(28)(14)(14)
Receivables, net$63 $26 $37 
We continuously review receivables and as information concerning credit quality arise, reassess our expectations of future losses and record an incremental reserve if warranted at that time. Our current allowance for credit losses represents our current expectation of credit losses; however future expectations could change as international unrest or other macro-economic factors impact the financial stability of our customers.
The fair value of receivables 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 March 31, 2022 and December 31, 2021, the fair value of receivables, net, approximated the carrying value due to contractual terms of receivables generally being less than 24 months.
(7) Inventories
Inventories consisted of the following:
As of
March 31, 2022December 31, 2021
Parts and work-in-process
$88 $70 
Finished goods
25 28 
Total inventories
$113 $98 
    Parts and work-in-process include parts for gaming machines and our finished goods inventory primarily consists of gaming machines for sale.
(8) Property and Equipment, net
Property and equipment, net consisted of the following:

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As of
March 31, 2022December 31, 2021
Land$6 $6 
Buildings and leasehold improvements56 55 
Gaming machinery and equipment696 712 
Furniture and fixtures21 22 
Construction in progress11 9 
Other property and equipment86 84 
Less: accumulated depreciation(679)(675)
Total property and equipment, net$197 $213 
Depreciation expense is excluded from Cost of services, Cost of product sales and Other operating expenses and is separately presented within D&A.
Three Months Ended March 31,
20222021
Depreciation expense$28 $31 
(9) Intangible Assets, net and Goodwill
Intangible Assets, net
The following tables present certain information regarding our intangible assets as of March 31, 2022 and December 31, 2021:
As of
March 31, 2022December 31, 2021
Gross Carrying Value
Accumulated Amortization
Net Balance
Gross Carrying Value
Accumulated Amortization
Net Balance
Amortizable intangible assets:
Customer relationships$912 $(468)$444 $911 $(445)$466 
Intellectual property940 (686)254 914 (670)244 
Licenses436 (368)68 472 (380)92 
Brand names132 (101)31 132 (97)35 
Trade names162 (71)91 158 (54)104 
Patents and other12 (7)5 12 (7)5 
Total intangible assets$2,594 $(1,701)$893 $2,599 $(1,653)$946 
The following reflects intangible amortization expense included within D&A:
Three Months Ended March 31,
2022