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Equity Investments | 12 Months Ended
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Dec. 31, 2018
Equity Method Investments and Joint Ventures [Abstract] |
Equity Investments | Equity Investments We account for our equity investments where we own a non-controlling interest, but exercise significant influence, under the equity method of accounting. Under the equity method of accounting, our original cost of the investment is adjusted for our share of equity in the earnings of the equity investee and reduced by dividends and distributions of capital received. We evaluate our investments in unconsolidated affiliates, for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an “other-than-temporary” decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determine whether the impairment is “other-than-temporary” based on an assessment of all relevant factors, including consideration of our intent and ability to retain our investment until the recovery of the unrealized loss. We estimate fair value using a discounted cash flow analysis based on estimated future results of, or cash distributions from, the investee. Impairment charges, if any, are recorded in earnings (loss) from equity investment. During the fourth quarter of 2016, we recorded an impairment charge of $11.3 million related to our investment in GLB. At December 31, 2018, we had investments in a number of entities (principally in our Lottery business segment) which are accounted for under the equity method of accounting because we do not have a controlling financial interest but we have the ability to exercise significant influence. For these investments, equity method income (loss) is recorded in “Earnings (loss) from equity investments”, with our investment recorded in “Equity investments.” See the tables below for details of our equity investments:
Equity Investment | Purpose | Concession and/or Supplier Agreement Term | Ownership Interest | Segment
LNS(1) | Exclusive operator of Italian instant game lottery | Initial term of nine years beginning October 2010, which was subsequently extended for up to nine years (September 2028) | 20% | Lottery
Northstar IL(2) | Private manager of Illinois lottery under a PMA | January 2011 through January 2018 | 20% | Lottery
Northstar NJ(3) | Provision of marketing and sales services to New Jersey Lottery | October 1, 2013 through 2029 | 17.69% | Lottery
Northstar SupplyCo New Jersey LLC (NJ SupplyCo) | Separate agreement under which we provide instant games to Northstar NJ | October 1, 2013 through 2029 | 30% | Lottery
(1) Other members of consortium are Lottomatica Holdings, S.r.l. and Arianna 2001. LNS succeeded Consorzio Lotterie Nazionali, a consortium comprised of essentially the same group that owns LNS, as holder of the concession as the exclusive operator of the Italian Gratta e Vinci instant game lottery. (2) Other member of Northstar Illinois is IGT Global Solutions Corporation, a subsidiary of IGT. (3) Other members are IGT Global Solutions Corporation and a subsidiary of the administrator of the Ontario Municipal Employees Retirement System, this agreement provides us substantive participating rights.
|  | Equity investment Balance as of December 31, |  | Equity earnings (loss) recognized for the Year Ended December 31, |  | Cash distributions and dividends received for the Year Ended December 31,
Equity Investment |  | 2018 |  | 2017 |  | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
LNS |  | $ | 224.1 |  |  | $ | 75.1 |  |  | $ | 16.4 |  |  | $ | 14.3 |  |  | $ | 14.0 |  |  | $ | 37.3 |  |  | $ | 40.4 |  |  | $ | 34.3 |
Northstar IL |  | — |  |  | — |  |  | (0.6 | ) |  | 2.8 |  |  | (0.4 | ) |  | — |  |  | — |  |  | — |
Northstar NJ and NJ Supply Co |  | 25.5 |  |  | 21.2 |  |  | 3.3 |  |  | 0.9 |  |  | 1.0 |  |  | — |  |  | 4.6 |  |  | 4.8 |
GLB and CSG |  | 23.1 |  |  | 35.3 |  |  | 0.6 |  |  | (0.1 | ) |  | (8.0 | ) |  | 10.8 |  |  | 5.0 |  |  | 1.7 |
International Terminal Leasing |  | 3.8 |  |  | 8.1 |  |  | 0.1 |  |  | 0.8 |  |  | — |  |  | 4.3 |  |  | 5.6 |  |  | 5.9 |
Other |  | 21.9 |  |  | 23.8 |  |  | 5.1 |  |  | 8.0 |  |  | 6.4 |  |  | 10.1 |  |  | 11.7 |  |  | 5.0 |
Total under equity method |  | $ | 298.4 |  |  | $ | 163.5 |  |  | $ | 24.9 |  |  | $ | 26.7 |  |  | $ | 13.0 |  |  | $ | 62.5 |  |  | $ | 67.3 |  |  | $ | 51.7 |
NYX(1) |  | — |  |  | 90.4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total equity investment |  | $ | 298.4 |  |  | $ | 253.9 |  |  | $ | 24.9 |  |  | $ | 26.7 |  |  | $ | 13.0 |  |  | $ | 62.5 |  |  | $ | 67.3 |  |  | $ | 51.7 |
(1) We elected the fair value option to account for our 36% non-controlling equity investment in NYX during and as of and for the year ended December 31, 2017.
|  | Revenue recognized from sales to investee for the Year Ended December 31,
Equity Investment |  | 2018 |  | 2017 |  | 2016
LNS |  | $ | 40.0 |  |  | $ | 44.9 |  |  | $ | 45.3 |
Northstar IL(1) |  | — |  |  | 22.8 |  |  | 22.6 |
Northstar NJ and NJ Supply Co |  | 23.3 |  |  | 20.6 |  |  | 20.9 |
Other |  | 6.6 |  |  | 6.7 |  |  | 4.9 |
Total |  | $ | 69.9 |  |  | $ | 95.0 |  |  | $ | 93.7 |
(1) Effective January 1, 2018, Camelot Illinois, LLC assumed our and IGT’s supply agreements (see below).
LNS On December 4, 2017, we announced that LNS had accepted a contract extension of up to nine years for the Italian Scratch and Win concession. As a part of the contract extension, LNS was required to pay an upfront fee of €800 million in three installments. The first installment of €50 million was paid as of December 31, 2017; payments of the second installment of €300 million and third installment of €450 million were made in April 2018 and October 2018, respectively. Our pro-rata concession funding payments to LNS were €10 million ($11.9 million), €60 million ($74.3 million) and €90 million ($104.2 million), respectively, and were treated as contributions to our equity method investment as contributions were made. As of December 31, 2018 we had accounts receivable of $11.3 million from LNS. Northstar Illinois In August 2015, Northstar Illinois, the State of Illinois, SGI and Gtech Corporation (now known as IGT Global Solutions Corporation (“IGT”)) entered into a termination agreement with respect to the PMA (the “Termination Agreement”). In September 2016, Northstar Illinois, the State of Illinois, SGI and IGT entered into a letter agreement that (a) extended the term of the PMA (which expired January 2018) and (b) extended our instant lottery product supply agreement (and IGT’s lottery systems supply agreement) with Northstar Illinois which now expires April 1, 2019 (though it may be terminated earlier upon at least thirty (30) days prior written notice). The new PMA between the state of Illinois and Camelot Illinois, LLC commenced in January 2018, and Camelot Illinois, LLC has accepted the assignment and assumption of the SGI and IGT supply agreements. Northstar New Jersey Northstar New Jersey is entitled to receive annual incentive compensation payments from the State of New Jersey to the extent the lottery's net income for the applicable year exceeds specified target levels, subject to a cap of 3% of the applicable year’s net income. Northstar New Jersey is responsible for payments to the State of New Jersey to the extent certain net income targets are not achieved by the New Jersey Lottery, subject to a cap of 2% of the applicable year’s net income and a $20.0 million shortfall payment credit that was fully used by the end of the fourth quarter of 2015.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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