Light & Wonder(LNW) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2023 was $731 million, a 12.8% increase from $648 million in Q3 2022[22] - Operating income for Q3 2023 was $147 million, compared to $89 million in Q3 2022, reflecting a 65.2% increase[22] - Net income from continuing operations for Q3 2023 was $80 million, up from $20 million in Q3 2022, representing a 300% increase[22] - Total comprehensive income for Q3 2023 was $14 million, a decrease from $266 million in Q3 2022[25] - Net income for the nine months ended September 30, 2023, was $112 million, a significant decrease from $3,658 million in the same period of 2022[30] - Total revenue for the nine months ended September 30, 2023, was $2,131 million, compared to $1,830 million in 2022, indicating a growth of approximately 16.5%[56] - AEBITDA for the nine months ended September 30, 2023, was $815 million, compared to $648 million in the same period of 2022, representing a growth of approximately 25.8%[56] Expenses and Liabilities - Research and development expenses for Q3 2023 were $55 million, slightly down from $56 million in Q3 2022[22] - The company incurred interest expenses of $78 million in Q3 2023, compared to $68 million in Q3 2022[22] - Total operating expenses for Q3 2023 were $584 million, an increase from $530 million in Q3 2022[22] - Total liabilities decreased to $4,741 million as of September 30, 2023, from $4,848 million at the end of 2022, a reduction of approximately 2%[28] - The company reported a net cash used in financing activities of $251 million for the nine months ended September 30, 2023, compared to $5,213 million in the same period of 2022[30] - Total restructuring and other costs for the nine months ended September 30, 2023, amounted to $66 million, down from $106 million in the same period of 2022[60] Assets and Equity - Total assets decreased to $5,887 million as of September 30, 2023, down from $6,009 million at the end of 2022, representing a decline of approximately 2%[28] - Retained earnings increased to $613 million as of September 30, 2023, up from $517 million at the end of 2022, reflecting a growth of approximately 18.5%[28] - Stockholders' equity totaled $1,146 million as of September 30, 2023, reflecting changes in common stock and retained earnings[92] Revenue Segmentation - Gaming segment revenue for the three months ended September 30, 2023, was $465 million, up from $419 million in 2022, reflecting a year-over-year increase of about 11%[51] - SciPlay segment revenue for the three months ended September 30, 2023, reached $196 million, compared to $171 million in 2022, marking a growth of approximately 14.6%[51] - iGaming segment revenue for the three months ended September 30, 2023, was $70 million, an increase from $58 million in 2022, indicating a growth of about 20.7%[51] - Total rental income revenue for the three months ended September 30, 2023, was $127 million, up from $116 million in 2022, reflecting a year-over-year increase of about 9.5%[45] Shareholder Activities - The company repurchased 2.1 million shares of common stock at an aggregate cost of $146 million during the nine months ended September 30, 2023, under its $750 million share repurchase program[97] - SciPlay repurchased 1.4 million shares of Class A common stock at an aggregate cost of $23 million during the nine months ended September 30, 2023, as part of its share repurchase programs[98] Legal Matters - LNWI faces a potential penalty of up to $5 million due to unmet lottery sales levels, along with a $4 million surety bond provided to Ecosalud[106] - The Tribunal ordered LNWI to pay approximately 90 billion Colombian pesos (approximately $30 million) plus default interest, which could accrue at a 12% statutory interest rate since 1994[109] - The company believes that the claims in the lawsuits are without merit and intends to vigorously defend against them[112][115][116] - The outcomes of these legal proceedings are uncertain, and the company cannot assure that they will not result in material liability[110] Cash Flow and Financing - Cash provided by operating activities from continuing operations was $423 million for the nine months ended September 30, 2023, compared to a cash used of $346 million in the prior year[30] - Issued $550 million in 7.500% senior unsecured notes due 2031, with net proceeds of $544 million used to redeem all $550 million of the 2025 Unsecured Notes[76] - The company held interest rate swap contracts with a total notional amount of $700 million as of September 30, 2023, to hedge interest expense[83] Receivables and Inventories - Receivables increased from $469 million at the beginning of the period to $488 million at the end of September 30, 2023[47] - Total receivables, net, rose to $488 million as of September 30, 2023, compared to $469 million as of December 31, 2022, reflecting a 4.0% increase[61] - Total inventories increased to $183 million as of September 30, 2023, from $161 million as of December 31, 2022, marking a 13.7% rise[66]