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Stockholders' Equity (Deficit) | 12 Months Ended
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Dec. 31, 2024
Stockholders' Equity Note [Abstract] |
Stockholders' Deficit | The following reflects total stock-based compensation expense recognized under all programs:
|  |  | Year Ended December 31,
|  |  |  |  | 2024 |  | 2023 |  | 2022
Related to L&W stock options |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |
Related to L&W RSUs |  |  |  |  | 110 |  |  | 89 |  |  | 56 |
Related to SciPlay RSUs(1) |  |  |  |  | — |  |  | 29 |  |  | 12 |
Total(2) |  |  |  |  | $ | 110 |  |  | $ | 118 |  |  | $ | 69 |
(1) Stock-based compensation expense related to SciPlay RSUs was for awards granted prior to the SciPlay Merger. Upon completion of the SciPlay Merger in 2023, these RSUs were converted to awards denominated in L&W shares.
(2) The years ended December 31, 2024, 2023 and 2022 include $43 million, $63 million and $24 million, respectively, classified as liability awards.
The following table sets forth the change in the number of shares of common stock outstanding during the fiscal years ended December 31, 2024 and 2023:
|  | December 31,
|  | 2024 |  | 2023
Shares outstanding as of beginning of period |  | 90 |  |  | 91 |
Shares issued as part of equity-based compensation plans and the employee stock purchase plan (“ESPP”), net of shares surrendered |  | 1 |  |  | 1 |
Shares repurchased into treasury stock |  | (5) |  |  | (2) |
Shares outstanding as of end of period |  | 86 |  |  | 90 |
L&W Stock-Based and Other Incentive Compensation Pursuant to our incentive stock plans, we offer stock-based compensation in the form of stock options and RSUs to employees and our non-employee directors. The terms of such stock option and RSU awards, including the vesting schedule of such awards, are determined at our discretion and subject to the terms of the applicable equity-based compensation plan. We also offer an ESPP, which allows for a total of up to 2 million shares of common stock to be purchased by eligible employees under offerings made each January 1 and July 1. Employees participate through payroll deductions up to a maximum of 15% of eligible compensation. The term of each offering period is six months, and shares are purchased on the last day of the offering period at a 15% discount to the stock’s market value. For offering periods in 2024, 2023 and 2022, we issued approximately 45,000, 38,000 and 50,000 shares of common stock, respectively, at average prices of $79.91, $63.85 and $44.08 per share, respectively. Options granted over the last several years have generally become exercisable in four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met. All such options have been granted with a maximum term of ten years. RSUs typically vest in three or four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met. We recognize expense for stock-based compensation plans based on the estimated grant date fair value of the related awards in accordance with ASC 718. Stock options are granted with exercise prices that are not less than the fair market value of our common stock on the date of grant. We periodically grant certain stock-based awards that are contingent upon L&W or certain of our subsidiaries achieving certain pre-determined financial performance targets. Upon determining that the performance target is probable, the fair value of the award is recognized over the service period. Determining the probability of achieving a performance target requires estimates and judgment. As of December 31, 2024, we had approximately 27 million shares of common stock authorized for awards under the 2003 Incentive Compensation Plan, as amended and restated (the “2003 Plan”) (plus available shares from a pre-existing equity-based compensation plan). As of December 31, 2024, we had approximately 4 million shares reserved under the 2003 Plan for future grants of equity awards and less than 0.1 million shares available under a pre-existing plan. Stock Options A summary of the changes in stock options outstanding under our equity-based compensation plans during 2024 is presented below:
| Number of Options |  | Weighted Average Remaining Contract Term (Years) |  | Weighted Average Exercise Price (per share) |  | Aggregate Intrinsic Value
Options outstanding as of December 31, 2023 | 1.5 |  |  | 3.1 |  | $ | 34.98 |  |  | $ | 72 |
Granted | — |  |  | — |  |  | $ | 80.36 |  |  | $ | — |
Exercised | — |  |  | — |  |  | $ | 35.42 |  |  | $ | 2 |
Cancelled | — |  |  | — |  |  | $ | — |  |  | $ | — |
Options outstanding as of December 31, 2024 | 1.5 |  |  | 2.0 |  | $ | 35.27 |  |  | $ | 77 |
Options exercisable as of December 31, 2024 | 1.5 |  |  | 2.0 |  | $ | 34.90 |  |  | $ | 77 |
Options expected to vest as of December 31, 2024 | — |  |  | 8.5 |  | $ | 79.12 |  |  | $ | — |
No stock options were granted during the period ended December 31, 2023. The weighted-average grant date fair value of options granted during 2024 and 2022 was $80.36 and $57.67, respectively. The aggregate intrinsic value of the options exercised during the years ended December 31, 2024, 2023 and 2022 was approximately $2 million, $14 million and $3 million, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average assumptions used in the model are outlined in the following table:
| 2024 |  | 2023 |  | 2022
Assumptions: |  |  |  |  |
Expected volatility | 70 | % |  | N/A |  | 71 | %
Risk-free interest rate | 3.88 | % |  | N/A |  | 3.01 | %
Dividend yield | — |  |  | N/A |  | — |
Expected life (in years) | 6 |  | N/A |  | 6
The computation of the expected volatility is based on historical daily stock prices over a period commensurate with the expected life of the option. Expected life is based on annual historical employee exercise behavior of option grants with similar vesting periods and option expiration dates. The risk-free interest rate is based on the yield of zero-coupon U.S. Treasury securities of comparable terms. At December 31, 2024, unrecognized stock-based compensation expense relating to unvested stock options was not material. During the year ended December 31, 2024, we received $2 million in cash from the exercise of stock options. Restricted Stock Units A summary of the changes in RSUs outstanding under our equity-based compensation plans during 2024 is presented below:
| Number of Restricted Stock Units |  | Weighted Average Grant Date Fair Value
Unvested RSUs as of December 31, 2023 | 2.3 |  |  | $ | 55.53 |
Granted | 1.5 |  |  | $ | 99.11 |
Vested | (1.7) |  |  | $ | 69.64 |
Cancelled | (0.1) |  |  | $ | 65.07 |
Unvested RSUs as of December 31, 2024 | 2.0 |  |  | $ | 75.49 |
The weighted-average grant date fair value of RSUs granted during 2024 and 2023 was $99.11 and $59.10, respectively. The fair value of each RSU grant is based on the market value of our common stock at the time of grant. At December 31, 2024, we had $93 million of unrecognized stock-based compensation expense relating to all unvested RSUs amortized over a weighted-average period of approximately 1.0 year. The fair value at vesting date of RSUs vested during the years ended December 31, 2024, 2023 and 2022 was $172 million, $62 million and $118 million, respectively. Share Repurchase Program On March 1, 2022, our Board of Directors approved a share repurchase program under which the Company was authorized to repurchase up to an aggregate amount of $750 million of shares of outstanding common stock. We fully exhausted the authorized share repurchase amount under the program in the second quarter of 2024. On June 11, 2024, our Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase, from time to time through June 12, 2027, up to an aggregate amount of $1.0 billion of shares of outstanding common stock. Repurchases under the share repurchase program may be effected at the discretion of the Transaction Committee of the Board of Directors through one or more open market repurchases, privately negotiated transactions, including block trades, accelerated share repurchases, issuer tender offers or other derivative contracts or instruments, “10b5-1” plan, or other financial or other arrangements, or a combination of the foregoing. The share repurchase program may be suspended or discontinued at any time. During the year ended December 31, 2024, we repurchased 4.8 million shares of common stock under the repurchase programs at an aggregate cost of $465 million (including excise tax).

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