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 Commission file number: 001-11693 LIGHT & WONDER, INC. For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (Exact name of registrant as specified in its charter) Nevada 81-0422894 (State or other jurisdiction of incorp ...

LIGHT & WONDER March 1, 2023 In this presentation, Light & Wonder, Inc. ("Light & Wonder," "L&W" or the "Company") makes "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," ...

Light & Wonder, Inc. (LNW) Q4 2022 Earnings Conference Call March 1, 2023 4:30 PM ET Corporate Participants Steve Wan - Director, Investor Relations Matt Wilson - President and Chief Executive Officer Connie James - Chief Financial Officer Conference Call Participants Barry Jonas - Truist David Katz - Jefferies Ryan Sigdahl - Craig-Hallum Jeff Stantial - Stifel Chad Beynon - Macquarie Operator Welcome to the Light & Wonder 2022 Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions]. ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Light & Wonder, Inc. transformed into a cross-platform global games company by divesting its Lottery and Sports Betting businesses, now focusing on core gaming segments under extensive global regulation - In 2022, the company completed the divestitures of its Lottery and Sports Betting businesses, marking a strategic shift to become a leading cross-platform global games company[27](index=27&type=chunk) - On April 18, 2022, the company changed its name from Scientific Games Corporation to Light & Wonder, Inc. and its stock ticker from SGMS to LNW[28](index=28&type=chunk) - The company's strategic roadmap focuses on growing market share, streamlining the organization, driving sustainable growth, and disciplined capital allocation[31](index=31&type=chunk) - The business is structured into three reporting segments: Gaming, SciPlay, and iGaming[29](index=29&type=chunk) [Segments Overview](index=10&type=section&id=Item%201.%20Business%20-%20Segments%20Overview) The company operates through three core segments: Gaming, SciPlay, and iGaming, each providing distinct products and services within the global gaming industry and facing specific competitors - The Gaming segment provides machines, CMS, and table products to regulated U.S. and approximately **185 international jurisdictions**, competing with Aristocrat, IGT, and Konami[34](index=34&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - The SciPlay segment develops and publishes digital social casino and casual games on mobile and web platforms, competing with companies like Playtika and Take-Two Interactive[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - The iGaming segment provides digital gaming content, distribution platforms, and player account management systems for real-money online casinos, competing with Evolution Gaming, IGT, and Playtech[45](index=45&type=chunk)[46](index=46&type=chunk) [Operations and Human Capital](index=12&type=section&id=Item%201.%20Business%20-%20Operations%20and%20Human%20Capital) The company emphasizes R&D and intellectual property protection, utilizing a mix of in-house and third-party manufacturing, and employed approximately 6,100 people globally as of December 31, 2022 - The company relies on a mix of owned and licensed intellectual property, including popular brands like MONOPOLY and JAMES BOND™, to enhance product appeal[49](index=49&type=chunk)[52](index=52&type=chunk) - Manufacturing and assembly of gaming machines and shufflers are conducted at facilities in Las Vegas, Sydney, and Europe, utilizing a just-in-time delivery model[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - As of December 31, 2022, Light & Wonder employed approximately **6,100 people**, with about **2,700 in the U.S.** and **3,400 internationally**[61](index=61&type=chunk) - The company's Corporate Social Responsibility (CSR) initiatives are built on five pillars: Community, People, Planet, Players (Responsible Gaming), and Corporate Governance[68](index=68&type=chunk)[69](index=69&type=chunk) [Government Regulation](index=14&type=section&id=Item%201.%20Business%20-%20Government%20Regulation) All business segments operate under extensive and evolving government regulations, including stringent licensing for Gaming, data privacy compliance for SciPlay, and complex internet gaming laws for iGaming across global jurisdictions - The company holds licenses and permits to operate in approximately **468 jurisdictions worldwide**, including **185 international gaming jurisdictions**[77](index=77&type=chunk) - The SciPlay business is subject to evolving laws around social gaming and data privacy, such as the EU's GDPR and California's CCPA/CPRA[80](index=80&type=chunk)[81](index=81&type=chunk) - The iGaming business in the U.S. is shaped by the Unlawful Internet Gambling Enforcement Act (UIGEA) and the 2018 Supreme Court decision overturning PASPA, which opened the path for state-level sports wagering legalization[82](index=82&type=chunk)[83](index=83&type=chunk) - Internationally, the iGaming market is evolving, with the U.K. government reviewing its Gambling Act 2005 and Ontario, Canada, opening its regulated iGaming market in 2022[86](index=86&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including adverse economic conditions, intense competition, significant debt, technological vulnerabilities, evolving regulatory landscapes, and potential litigation, all of which could materially affect its business [Economic and Business Conditions](index=20&type=section&id=Item%201A.%20Risk%20Factors%20-%20Economic%20and%20Business%20Conditions) The company's performance is sensitive to economic conditions, public health crises, and geopolitical uncertainty, with risks from strategic execution, foreign currency fluctuations, and the gaming machine replacement cycle - The COVID-19 pandemic and similar health crises can negatively impact operations by reducing consumer discretionary spending, causing casino closures, and disrupting supply chains[108](index=108&type=chunk)[109](index=109&type=chunk) - Failure to successfully execute the new strategy to become a leading cross-platform global games company and establish the 'Light & Wonder' brand could negatively impact financial results[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Approximately **31% of revenue** for the year ended December 31, 2022, was derived from outside the U.S., exposing the company to foreign currency exchange rate fluctuations and other international risks[119](index=119&type=chunk)[120](index=120&type=chunk) - Unfavorable economic conditions, such as inflation and rising interest rates, may reduce players' disposable income and casino operators' capital expenditures, adversely affecting all business segments[125](index=125&type=chunk)[126](index=126&type=chunk) [Industry and Operations](index=24&type=section&id=Item%201A.%20Risk%20Factors%20-%20Industry%20and%20Operations) The company faces intense competition and technology risks, with R&D investments not guaranteed to succeed, and is vulnerable to third-party platform policy changes and supply chain disruptions - The company faces intense competition in Gaming, SciPlay, and iGaming from both established players and new entrants, competing on content, technology, price, and distribution[132](index=132&type=chunk)[133](index=133&type=chunk)[138](index=138&type=chunk) - Success is dependent on adapting to changing technology and investing in R&D, but there is no guarantee these investments will result in commercially viable products[147](index=147&type=chunk)[149](index=149&type=chunk) - The SciPlay business is heavily reliant on third-party platforms (Apple, Google, Facebook, Amazon) for distribution and revenue collection, with policy changes potentially impacting the business[167](index=167&type=chunk)[168](index=168&type=chunk) - The company relies on third-party suppliers and manufacturers for components and services; any interruption or quality lapse could disrupt operations and fulfillment of customer orders[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) [Capital Structure](index=30&type=section&id=Item%201A.%20Risk%20Factors%20-%20Capital%20Structure) The company's significant indebtedness of **$3.9 billion** as of December 31, 2022, poses a major risk, impacting financial flexibility, requiring substantial cash flow for debt service, and imposing restrictive covenants - As of December 31, 2022, the company had total indebtedness of **$3.9 billion**, which could affect its ability to obtain financing and requires a significant portion of cash flow for debt service[176](index=176&type=chunk) - A significant portion of borrowings are at variable interest rates, exposing the company to risk from rising rates[177](index=177&type=chunk) - Debt agreements, including the LNWI Credit Agreement and SciPlay Revolver, impose operating and financial restrictions, such as limitations on dividends, liens, and additional debt[182](index=182&type=chunk)[183](index=183&type=chunk) - The Board of Directors has authorized a **$750 million** share repurchase program, but changes to or elimination of this program could adversely affect the stock price[175](index=175&type=chunk) [Technology and Legal](index=32&type=section&id=Item%201A.%20Risk%20Factors%20-%20Technology%20and%20Legal) The company faces significant technological and legal risks, including cybersecurity threats, intellectual property protection, complex and evolving government regulations, data privacy laws, and potential impacts from tax law changes or litigation - The business is vulnerable to security breaches, including cyber-attacks, which could compromise sensitive data, disrupt operations, and expose the company to liability and reputational harm[191](index=191&type=chunk)[192](index=192&type=chunk)[206](index=206&type=chunk) - The company's success depends on protecting its own intellectual property and its ability to license IP from third parties, with infringement claims potentially being costly[195](index=195&type=chunk)[198](index=198&type=chunk)[210](index=210&type=chunk) - The company and its industries are subject to strict and evolving government regulations regarding licensing, product approvals, and suitability of key personnel, which can limit operations and growth[216](index=216&type=chunk)[222](index=222&type=chunk) - Evolving data privacy laws, such as the EU's GDPR and California's CCPA/CPRA, increase operational costs and expose the company to significant penalties for non-compliance[252](index=252&type=chunk)[253](index=253&type=chunk) - Changes in tax laws, such as the requirement to capitalize and amortize R&D expenses for U.S. tax purposes and the OECD's global minimum tax proposals, could materially affect financial results[243](index=243&type=chunk)[245](index=245&type=chunk)[247](index=247&type=chunk) [Properties](index=46&type=section&id=Item%202.%20Properties) The company occupies approximately **561,000 sq. ft.** in the U.S. and **763,000 sq. ft.** internationally, with principal facilities in Las Vegas (corporate headquarters) and India, some encumbered by debt Principal Properties | Location | Sq. Ft. | Supports | Tenancy | | :--- | :--- | :--- | :--- | | Las Vegas, Nevada | 426,986 | Corporate Headquarters, Gaming and iGaming | Lease/Own | | India (Bangalore and Chennai) | 143,604 | Corporate, Gaming, SciPlay and iGaming | Lease | [Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including ongoing litigation in Colombia, settled matters in Italy, multiple U.S. antitrust lawsuits, and a **$25 million** social casino class action settlement, with **$11 million** accrued for contingencies as of December 31, 2022 - As of December 31, 2022, the company had accrued liabilities of **$11 million** for legal matters, down from **$27 million** in 2021[643](index=643&type=chunk) - A putative class action in Washington State regarding social casino games was settled for **$25 million**, fully paid by the SciPlay segment in the third quarter of 2022[655](index=655&type=chunk) - The company faces several antitrust lawsuits alleging illegal monopolization of the automatic card shuffler market[656](index=656&type=chunk)[657](index=657&type=chunk)[658](index=658&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'LNW', has never paid cash dividends, and repurchased **3.4 million shares** for **$202 million** in Q4 2022 under its share repurchase program - The company's common stock is listed on the Nasdaq Global Select Market under the symbol 'LNW', with **583 holders of record** as of February 24, 2023[280](index=280&type=chunk) - The company has never paid cash dividends on its common stock and does not intend to in the foreseeable future[281](index=281&type=chunk) Issuer Purchases of Equity Securities (Q4 2022) | Period | Total Number of Shares Purchased (millions) | Average Price Paid per Share | Total Cost of Repurchase (millions) | | :--- | :--- | :--- | :--- | | 10/1/2022 - 10/31/2022 | 0.7 | $48.15 | $31 | | 11/1/2022 - 11/30/2022 | 1.1 | $62.76 | $69 | | 12/1/2022 - 12/31/2022 | 1.6 | $62.67 | $102 | | **Total** | **3.4** | **$59.88** | **$202** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Light & Wonder completed its strategic transformation by divesting Lottery and Sports Betting businesses for approximately **$6.5 billion**, leading to **17% revenue growth** from continuing operations, a **148% increase in operating income**, and a net income of **$3.7 billion** attributable to L&W after divestiture gains - Completed divestitures of the Lottery and Sports Betting businesses in 2022, receiving approximately **$5.7 billion** and **$0.8 billion** in gross proceeds, respectively[293](index=293&type=chunk) - Reduced the outstanding face value of debt by approximately **$4.9 billion** following a series of refinancing transactions in April 2022[297](index=297&type=chunk) - Initiated a **$750 million** share repurchase program in March 2022, returning **$413 million** to shareholders through February 24, 2023[298](index=298&type=chunk) Consolidated Results Summary (2022 vs 2021) | (in millions) | 2022 | 2021 | Variance | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $2,512 | $2,153 | $359 | 17% | | Operating income | $273 | $110 | $163 | 148% | | Net (loss) income from continuing operations | $(176) | $24 | $(200) | nm | | Net income from discontinued operations, net of tax | $3,873 | $366 | $3,507 | nm | | Net income attributable to L&W | $3,675 | $371 | $3,304 | nm | [Business Segment Results](index=52&type=section&id=Item%207.%20MD%26A%20-%20Business%20Segment%20Results) In 2022, Gaming revenue grew **21% to $1.6 billion**, SciPlay revenue increased **11% to $671 million**, and iGaming revenue rose **6% to $240 million**, with U.S. iGaming growth partially offset by foreign currency impacts Gaming Segment Revenue and KPIs (2022 vs 2021) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue (in millions) | $1,601 | $1,321 | 21% | | AEBITDA (in millions) | $767 | $659 | 16% | | Total New Unit Shipments | 26,803 | 18,203 | 47% | | Avg. Sales Price per New Unit | $17,462 | $16,833 | 4% | SciPlay Segment Revenue and KPIs (2022 vs 2021) | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenue (in millions) | $671 | $606 | 11% | | AEBITDA (in millions) | $187 | $186 | 1% | | ARPDAU | $0.78 | $0.71 | +$0.07 | | Payer Conversion Rate | 9.6% | 8.5% | +1.1 pp | iGaming Segment Revenue (2022 vs 2021) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue (in millions) | $240 | $226 | 6% | | AEBITDA (in millions) | $80 | $75 | 7% | - iGaming revenue growth was driven by a **47% year-over-year increase** in the U.S. market, but was partially offset by a **$15 million** unfavorable impact from foreign currency translation[365](index=365&type=chunk) [Critical Accounting Estimates](index=59&type=section&id=Item%207.%20MD%26A%20-%20Critical%20Accounting%20Estimates) Management identifies critical accounting estimates including business combinations, revenue recognition, goodwill impairment testing, gain on sale of discontinued operations, income taxes, and legal contingencies, with the October 1, 2022 goodwill test showing fair value substantially exceeded carrying value - Key estimates include business combinations, revenue recognition, goodwill and asset impairment, gain on sale of discontinued operations, income taxes, and legal contingencies[369](index=369&type=chunk)[373](index=373&type=chunk) - The annual goodwill impairment test as of October 1, 2022, concluded that the fair value of each reporting unit substantially exceeded its carrying value, requiring no further quantitative assessment[378](index=378&type=chunk) - Due to a corporate rebranding in late 2021, the company changed the useful life estimate for certain legacy trade names, resulting in accelerated amortization with incremental expenses of **$59 million in 2022** and **$10 million in 2021**[553](index=553&type=chunk) [Liquidity, Capital Resources and Working Capital](index=63&type=section&id=Item%207.%20MD%26A%20-%20Liquidity%2C%20Capital%20Resources%20and%20Working%20Capital) As of December 31, 2022, the company had **$1.8 billion** in total liquidity, with net cash used in operating activities of **$425 million** due to divestiture-related tax payments, while investing activities provided **$6.1 billion** and financing activities used **$5.5 billion** for debt repayment and share repurchases Cash and Available Liquidity (as of Dec 31, 2022) | (in millions) | Cash and cash equivalents | Revolver capacity | Total | | :--- | :--- | :--- | :--- | | L&W (excluding SciPlay) | $584 | $738 | $1,322 | | SciPlay | $330 | $150 | $480 | | **Total** | **$914** | **$888** | **$1,802** | - Net cash used in operating activities from continuing operations was **$425 million**, largely due to **$641 million** in cash tax payments related to the divestitures[399](index=399&type=chunk) - Net cash used in financing activities was **$5.5 billion**, reflecting debt repayments of approximately **$7.0 billion** and share repurchases, partially offset by **$2.2 billion** in new term loan proceeds[403](index=403&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its **$2.2 billion** variable-rate debt, with a **1% rate change impacting annual interest expense by $22 million**, mitigated by **$700 million** in interest rate swap contracts - The company is exposed to interest rate risk with **$2.2 billion** of variable rate debt outstanding as of December 31, 2022, where a hypothetical **1% change** in rates would impact interest expense by approximately **$22 million**[406](index=406&type=chunk) - To manage interest rate risk, the company entered into interest rate swap contracts with a total notional amount of **$700 million**, effectively fixing the interest rate on a portion of its variable rate debt, with hedges maturing in April 2027[407](index=407&type=chunk)[409](index=409&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, a conclusion affirmed by an unqualified audit opinion from Deloitte & Touche LLP - Based on an evaluation as of December 31, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[413](index=413&type=chunk) - Management concluded that as of December 31, 2022, the company's internal control over financial reporting was effective based on the criteria set forth by COSO[415](index=415&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, internal controls[417](index=417&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=69&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section presents the company's consolidated financial statements for 2020-2022, the independent auditor's report from Deloitte & Touche LLP, and a comprehensive index of all exhibits filed with the 10-K report - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[438](index=438&type=chunk)[444](index=444&type=chunk) - The auditor identified the 'Gain on sale of discontinued operations' as a critical audit matter due to the complexity of calculating the gains and the resulting income tax expense across multiple jurisdictions[442](index=442&type=chunk)[443](index=443&type=chunk) Consolidated Financial Statements Summary (FY 2022) | (in millions) | Amount | | :--- | :--- | | **Total Revenue** | $2,512 | | **Net (Loss) from Continuing Operations** | $(176) | | **Net Income from Discontinued Operations** | $3,873 | | **Net Income Attributable to L&W** | $3,675 | | **Total Assets (at Dec 31, 2022)** | $6,009 | | **Total Liabilities (at Dec 31, 2022)** | $4,848 | | **Total Stockholders' Equity (at Dec 31, 2022)** | $1,161 |

Light & Wonder, Inc. (NASDAQ:LNW) Q3 2022 Earnings Conference Call November 9, 2022 4:30 PM ET Company Participants James Bombassei - SVP, IR Matthew Wilson - CEO, President & Director Constance James - EVP & CFO Conference Call Participants Barry Jonas - Truist Securities David Katz - Jefferies Jeffrey Stantial - Stifel Chad Beynon - Macquarie Research Operator Welcome to the Light & Wonder 2022 Third Quarter Investor Conference Call. [Operator Instructions]. Now let me turn the call over to Jim Bombassei ...

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents unaudited consolidated financial statements, detailing the impact of business divestitures and debt refinancing Consolidated Statements of Operations Highlights (in millions) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $648 | $539 | $1,830 | $1,572 | | **Operating Income** | $89 | $34 | $175 | $106 | | **Net Income (Loss) from Continuing Operations** | $20 | $100 | $(197) | $(38) | | **Net Income from Discontinued Operations** | $315 | $87 | $3,855 | $329 | | **Net Income Attributable to L&W** | $328 | $182 | $3,645 | $276 | Consolidated Balance Sheets Highlights (in millions) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $2,048 | $1,732 | | **Total Assets** | $6,246 | $7,883 | | **Total Current Liabilities** | $802 | $974 | | **Long-Term Debt** | $3,874 | $8,646 | | **Total Liabilities** | $5,014 | $9,989 | | **Total Stockholders' Equity (Deficit)** | $1,232 | $(2,106) | Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Net Cash (Used in) Provided by Operating Activities** | $(294) | $459 | | **Net Cash Provided by (Used in) Investing Activities** | $6,144 | $(206) | | **Net Cash Used in Financing Activities** | $(5,213) | $(492) | | **Increase (Decrease) in Cash** | $625 | $(242) | - The company completed the divestiture of its Lottery Business in Q2 2022 for **$5.7 billion** in gross cash proceeds and its Sports Betting Business in Q3 2022 for **$796 million** in gross proceeds (**$750 million** cash and **$46 million** stock) These are reported as discontinued operations[36](index=36&type=chunk)[53](index=53&type=chunk) - In April 2022, the company completed a major refinancing, reducing the face value of its debt by approximately **$5.0 billion**, from **$8.9 billion** to **$3.95 billion**[91](index=91&type=chunk)[218](index=218&type=chunk) - During the nine months ended September 30, 2022, the company repurchased **3.7 million** shares of its common stock for **$203 million** Its subsidiary, SciPlay, repurchased **1.4 million** shares of its Class A common stock for **$18 million**[122](index=122&type=chunk)[123](index=123&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic transformation, including divestitures and debt reduction, and analyzes consolidated and segment financial performance [Recent Events and Strategic Execution](index=35&type=section&id=Recent%20Events) - The company is executing a strategy to become a leading cross-platform global games company, focusing on content and digital markets[153](index=153&type=chunk) - Key strategic actions in 2022 include changing the company name to Light & Wonder, completing the divestitures of the Lottery and Sports Betting businesses, reducing debt by nearly **$5 billion** through refinancing, initiating a **$750 million** share repurchase program, and making strategic acquisitions like Alictus and Playzido[155](index=155&type=chunk) [Consolidated Results of Operations](index=36&type=section&id=Consolidated%20Results) Consolidated Revenue Growth (YoY) | Period | 2022 Revenue (M) | 2021 Revenue (M) | Growth | Growth % | | :--- | :--- | :--- | :--- | :--- | | **Q3** | $648 | $539 | $109 | 20% | | **9 Months** | $1,830 | $1,572 | $258 | 16% | - Operating income for Q3 2022 increased **162%** to **$89 million** from **$34 million** in Q3 2021 For the nine-month period, it increased **65%** to **$175 million**[158](index=158&type=chunk) - Interest expense decreased significantly to **$68 million** in Q3 2022 from **$120 million** in Q3 2021, reflecting the favorable impact of the April 2022 refinancing and lower outstanding debt[171](index=171&type=chunk) - A pre-tax gain of **$4.93 billion** was recorded for the nine months ended September 30, 2022, from the divestitures of the Lottery and Sports Betting businesses[158](index=158&type=chunk)[172](index=172&type=chunk) [Business Segments Results](index=39&type=section&id=Business%20Segments%20Results) Segment Revenue - Q3 2022 vs Q3 2021 (in millions) | Segment | Q3 2022 Revenue | Q3 2021 Revenue | YoY Growth % | | :--- | :--- | :--- | :--- | | **Gaming** | $419 | $339 | 24% | | **SciPlay** | $171 | $147 | 17% | | **iGaming** | $58 | $53 | 9% | - **Gaming:** Revenue growth was driven by a **47%** increase in gaming machine sales and continued momentum in gaming operations Total new unit shipments rose **45%** YoY in Q3 to **7,259 units**[178](index=178&type=chunk)[181](index=181&type=chunk) - **SciPlay:** Revenue growth was fueled by strong social casino player engagement and the Alictus acquisition The payer conversion rate reached a record high of **9.7%** in Q3 2022, up from **8.5%** in Q3 2021[193](index=193&type=chunk)[198](index=198&type=chunk)[202](index=202&type=chunk) - **iGaming:** Revenue growth was driven by the U.S. market, which saw **39%** YoY revenue growth in Q3 This was partially offset by a **$5 million** unfavorable foreign currency impact[208](index=208&type=chunk) [Liquidity, Capital Resources and Working Capital](index=45&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Working%20Capital) Cash and Available Liquidity as of Sep 30, 2022 (in millions) | Category | Cash and Cash Equivalents | Revolver Capacity | Total Available Liquidity | | :--- | :--- | :--- | :--- | | **L&W (excluding SciPlay)** | $978 | $738 | $1,716 | | **SciPlay** | $299 | $150 | $449 | | **Total** | **$1,277** | **$888** | **$2,165** | - Net cash used in operating activities was **$294 million** for the first nine months of 2022, a decrease of **$753 million** from the prior year, primarily due to unfavorable working capital changes, including a **$465 million** tax payment related to the Lottery divestiture[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - Net cash provided by investing activities was **$6.1 billion**, driven by **$6.4 billion** in gross cash proceeds from the divestitures[219](index=219&type=chunk)[225](index=225&type=chunk) - Net cash used in financing activities was **$5.2 billion**, primarily due to the repayment of **$6.98 billion** in debt as part of the April 2022 Refinancing, offset by **$2.2 billion** in new term loan proceeds[219](index=219&type=chunk)[226](index=226&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its variable-rate debt, mitigated by interest rate swap contracts - As of September 30, 2022, the company had **$2,195 million** of variable-rate debt A hypothetical **1%** change in interest rates would change annual interest expense by approximately **$22 million**[231](index=231&type=chunk) - In April 2022, the company entered into interest rate swap contracts with a **$700 million** notional amount to hedge a portion of its variable rate debt, effectively fixing the interest rate on that portion[232](index=232&type=chunk) - As part of the April 2022 Refinancing, the company settled its cross-currency interest rate swaps for approximately **$50 million** in cash proceeds and discontinued its net investment hedge on the redeemed Euro notes[233](index=233&type=chunk)[234](index=234&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures are effective as of September 30, 2022[237](index=237&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, internal controls[238](index=238&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16 for detailed legal proceedings, including ongoing antitrust claims and a recently settled Washington State matter - For a full description of legal proceedings, the report refers to Note 16 in the Condensed Consolidated Financial Statements[239](index=239&type=chunk) - The Washington State matter, previously accrued at **$25 million**, was fully paid and settled by SciPlay during the third quarter of 2022[139](index=139&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors were reported from those disclosed in the company's 2021 Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the company's 2021 10-K[240](index=240&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No stock repurchase activity occurred during the three months ended September 30, 2022, despite an ongoing share repurchase program - The company reported no stock repurchase activity during the three-month period ended September 30, 2022[241](index=241&type=chunk) [Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[242](index=242&type=chunk) [Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[243](index=243&type=chunk) [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[244](index=244&type=chunk) [Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, agreements, and CEO/CFO certifications - The report includes a list of filed exhibits, such as amendments to agreements, retention letters, and CEO/CFO certifications (Rule 13a-14(a) and Section 906)[246](index=246&type=chunk)

Light & Wonder, Inc. (NASDAQ:LNW) Q2 2022 Earnings Conference Call August 9, 2022 4:30 PM ET Company Participants James Bombassei - SVP, IR Barry Cottle - CEO, President & Director Constance James - EVP, CFO, Principal Accounting Officer, Treasurer & Corporate Secretary Conference Call Participants Barry Jonas - Truist Securities David Katz - Jefferies Ryan Sigdahl - Craig-Hallum Jeffrey Stantial - Stifel, Nicolaus & Company Operator Welcome to the Light & Wonder 2022 Second Quarter Investor Conference Cal ...

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 June 30, 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. ...

Financial Data and Key Metrics Changes - Consolidated revenue increased by 26% year-over-year to $572 million, with consolidated EBITDA growing by 42% [12][32][33] - Net loss from continuing operations decreased to $67 million due to higher operating income driven by revenue growth [33] - Adjusted net debt leverage ratio improved from 10.5 times to 3.7 times post-lottery sale, a reduction of approximately seven turns [13][35] Business Line Data and Key Metrics Changes - Gaming revenue increased by 45% year-over-year to $355 million, with AEBITDA growth of 60% to $171 million [39] - iGaming revenue grew by 2% to $59 million, with U.S. revenues up 63% year-over-year [44][46] - SciPlay's revenue rose by 5% year-over-year, marking its second-highest revenue quarter ever [26][46] Market Data and Key Metrics Changes - North American premium game operations now represent 43% of the total installed base, showing strong market recovery [17][40] - iGaming in the U.S. experienced seven sequential quarters of GGR growth, with original content generating 50% of GGR on the platform [22][24] - SciPlay's monthly average users and average monthly paying users improved sequentially, reflecting strong player retention [26] Company Strategy and Development Direction - The company aims to capitalize on the $60 billion global games market by focusing on five key pillars: content creation, expansion in digital markets, seamless player experience, deleveraging, and fostering a high-performance culture [10][11] - The company is actively pursuing a capital allocation strategy that prioritizes debt reduction, share repurchases, and disciplined investments in growth opportunities [32][50] - Recent acquisitions, including Alictus and Playzido, are intended to enhance growth and expand the company's portfolio in the casual and iGaming markets [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the gaming industry despite macroeconomic challenges, noting strong GGR levels across gaming, iGaming, and social segments [55][57] - The company is proactively managing its cost base and supply chain to navigate inflationary pressures and maintain healthy margins [16][60] - Future growth is anticipated from the launch of Live Dealer in Q4 and continued expansion in the casual gaming market [76][86] Other Important Information - The company completed the sale of its lottery business, generating approximately $5.6 billion in gross cash proceeds, which has significantly improved its financial flexibility [12][31] - A $750 million share buyback program was authorized, with approximately $140 million of shares repurchased to date [14][50] Q&A Session Summary Question: Can you dive deeper into the inflationary and macro environment? - Management acknowledged the volatility in the market but noted strong GGR levels and demand across all segments, indicating resilience [55][56] Question: How much pressure are you seeing cost-wise in the supply chain? - Management confirmed that supply chain impacts have been timing-related, with proactive measures taken to maintain margins [59][61] Question: How is the Playzido acquisition complementary to OpenBet? - The acquisition allows for rapid customized game development, enhancing the company's offerings for major operating partners [66][68] Question: What is the confidence level in growing the premium lease market share? - Management expressed optimism about increasing the premium segment to over 50% of the installed base, supported by a strong product lineup [70][72] Question: What are the expectations for the Live Dealer launch? - The first Live Dealer studio is set to launch in Q4, targeting major products like Blackjack and Baccarat, which are expected to drive significant revenue [75][76] Question: How is the cashless initiative progressing? - The company reported strong demand for its cashless products, with significant market penetration and ongoing pipeline development [85][86]

LIGHT & WONDER First Quarter 2022 Earnings Presentation May 10, 2022 Forward-Looking Statements In this presentation, Light & Wonder, Inc. ("Light & Wonder," "L&W" or the "Company") makes "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, ...