International Game Technology PLC Reports First Quarter 2021 Results

- May 11th, 2021

International Game Technology PLC today reported financial results for the first quarter ended March 31, 2021. Today, at 8:00 a.m. EDT management will host a conference call and webcast to present the results; access details are provided below. “We delivered some of our strongest profit results ever during the first quarter, fueled by robust player demand and significant, structural cost savings,” said Marco Sala …

International Game Technology PLC (“IGT”) (NYSE: IGT) today reported financial results for the first quarter ended March 31, 2021. Today, at 8:00 a.m. EDT management will host a conference call and webcast to present the results; access details are provided below.

“We delivered some of our strongest profit results ever during the first quarter, fueled by robust player demand and significant, structural cost savings,” said Marco Sala , CEO of IGT . “Our Global Lottery segment achieved record same-store sales levels on impressive increases around the world. The Global Gaming segment is demonstrating swift, progressive recovery, including accelerated momentum for Digital & Betting activities. We expect to return to 2019 levels for key financial metrics this year.”

“With the recovery in our business in full swing, we are delivering strong operating leverage which, when coupled with invested capital discipline, drove strong cash flows in the quarter,” said Max Chiara , CFO of IGT . “This enabled us to accelerate our debt retirement strategy and gives us confidence in a return to pre-pandemic leverage levels by the end of the current year.”

Overview of Consolidated First Quarter 2021 Results

All amounts from continuing operations

Quarter Ended

Y/Y
Change
(%)

Constant
Currency
Change
(%)

March 31,

2021

2020

(In $ millions, unless otherwise noted)

GAAP Financials:

Revenue

Global Lottery

749

505

48%

42%

Global Gaming

266

310

(14)%

(16)%

Total revenue

1,015

814

25%

20%

Operating income/(loss)

Global Lottery

337

144

133%

121%

Global Gaming

(19)

(6)

(208)%

(177)%

Corporate support expense

(19)

(13)

(50)%

(32)%

Other (1)

(39)

(343)

89%

89%

Total operating income/(loss)

260

(218)

NA

NA

Net cash provided by operating activities

251

26

NM

Cash and cash equivalents

748

1,449

(48)%

Non-GAAP Financial Measures:

Adjusted EBITDA

Global Lottery

447

243

84%

74%

Global Gaming

19

31

(39)%

(35)%

Corporate support expense

(16)

(13)

(26)%

(10)%

Total Adjusted EBITDA

450

261

72%

64%

Free cash flow

204

(60)

Net debt

7,069

7,170

(1)%

(1) Primarily includes purchase price amortization and goodwill impairment

Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release

Key Highlights:

  • Achieved among highest revenue and profit levels in Company history, fueled by Global Lottery
  • Delivered strong cash flow driven by performance and invested capital discipline; return to pre-pandemic leverage expected by end of the year
  • Achieved ~1/3 of $200M+ 2021 OPtiMa savings targets during the first quarter
  • Sequential improvement in Global Gaming as industry recovers from pandemic-driven restrictions; growth in Digital & Betting continues with 85% year-over-year increase in revenue in the quarter
  • Successfully refinanced ~$1.0 billion in 6.25% Notes due 2022 with $750 million 4.125% Notes due 2026 and draws on revolving credit facilities
  • Signed seven-year contract extension with Jamaica Lottery; four-year iLottery contract extension with Kentucky Lottery; two-year contract extension with Mexico Lottery

Financial highlights:

Consolidated revenue of $1,015 million , up 25% from the prior year

  • Global Lottery revenue of $749 million , up 48%, driven by 32.4% growth in same-store sales
  • Global Gaming revenue totals $266 million , versus $310 million in the prior year; up sequentially from $255 million in Q4’20 as U.S. gaming markets continue to recover

Operating income of $260 million , compared to operating loss of $218 million in the prior year

  • Global Lottery same-store sales growth translates into high profit flow-through
  • Benefits from OPtiMa structural cost-savings
  • Goodwill impairment of $296 million in prior-year period

Net interest expense of $94 million compared to $100 million in the prior year

Provision for income taxes of $148 million , compared to a benefit from income taxes of $1 million in the prior year

  • Higher valuation allowances on deferred tax assets in the current period
  • Income taxes paid of $4 million versus $11 million in the prior year

Net income attributable to IGT was $92 million versus a net loss attributable to IGT of $248 million in the prior-year period

  • After-tax goodwill impairment of $296 million in prior-year period
  • Higher non-cash foreign exchange gains, primarily on Euro-denominated debt instruments, in the current period

Net income per diluted share of $0.38 compared to a net loss per diluted share of $1.28 in the prior year

Adjusted EBITDA of $450 million compared to $261 million in the prior-year period; Global Lottery achieves among the highest segment-level Adjusted EBITDA

Net debt of $7.07 billion compared to $7.32 billion at December 31, 2020; Net debt to LTM Adjusted EBITDA of 5.40x, down from 6.39x at December 31, 2020, driven by strong financial results and cash flow generation

Cash and Liquidity Update

  • Total liquidity of $2.1 billion as of March 31, 2021 ; $748 million in unrestricted cash and $1.4 billion in additional borrowing capacity

Other Developments

  • As previously announced, completed sale of Italy B2C gaming businesses on May 10, 2021 ; net proceeds to partially fund full redemption, by make-whole call, of €850 million 4.75% Senior Secured Euro Notes due February 2023
  • In March 2021 , issued $750 million 4.125% Notes due 2026, as previously announced
    • Net proceeds used to fund redemption of 6.25% Notes due 2022
    • Lowest USD-denominated coupon ever issued by the Company

Recast historical financial information for Q2’20 and Q3’20 included at the end of this release

Conference Call and Webcast:

May 11, 2021, at 8:00 a.m. EDT

Live webcast available under “News, Events & Presentations” on IGT’s Investor Relations website at www.IGT.com ; replay available on the website following the live event

Dial-In Numbers

  • US/ Canada toll-free dial-in number: +1 844 842 7999
  • Outside the US/ Canada toll-free number: +1 612 979 9887
  • Conference ID/confirmation code: 6783961
  • A telephone replay of the call will be available for one week
    • US/ Canada replay number: +1 855 859 2056
    • Outside the US/ Canada replay number: +1 404 537 3406
    • ID/Confirmation code: 6783961

Note: Certain totals in the tables included in this press release may not add due to rounding

Comparability of Results

All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2021 are calculated using the same foreign exchange rates as the corresponding 2020 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with U.S. GAAP.

About IGT
IGT (NYSE:IGT) is the global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Gaming Machines and Lotteries to Sports Betting and Digital. Leveraging a wealth of compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, our solutions deliver unrivalled gaming experiences that engage players and drive growth. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 11,000 employees. For more information, please visit www.IGT.com .

Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the “Company”) and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall”, “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company’s annual report on Form 20-F for the financial year ended December 31, 2020 and other documents filed from time to time with the SEC, which are available on the SEC’s website at www.sec.gov and on the investor relations section of the Company’s website at www.IGT.com . Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. You should carefully consider these factors and other risks and uncertainties that affect the Company’s business. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that the financial performance of International Game Technology PLC for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.

Non-GAAP Financial Measures
Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional useful information, but it is not intended to nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Adjusted EBITDA represents net income (loss) from continuing operations (a GAAP measure) before income taxes, interest expense, foreign exchange gain (loss), other non-operating expenses, depreciation, impairment losses, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income) and certain other non-recurring items. Management believes that the non-GAAP measures just mentioned are useful in providing period-to-period comparisons of the results of the Company’s ongoing operational performance.

Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash and equivalents. Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing  IGT’s  ability to fund its activities, including debt service and distribution of earnings to shareholders.

Constant currency is a non-GAAP financial measure that expresses the current financial data using the prior-year/period exchange rate (i.e., the exchange rates used in preparing the financial statements for the prior year). Management believes that constant currency is a useful measure to compare period-to-period results without regard to the impact of fluctuating foreign currency exchange rates.

A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this release. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

Contact:
Phil O’Shaughnessy , Global Communications, toll free in U.S./ Canada +1 (844) IGT-7452; outside U.S./ Canada +1 (401) 392-7452
Francesco Luti , +39 3485475493; for Italian media inquiries
James Hurley , Investor Relations, +1 (401) 392-7190

Select Performance and KPI data: ($ in millions, unless otherwise noted)

Constant

Q1’21

Q1’20

Y/Y Change

Currency

GLOBAL LOTTERY

(%)

Change (%) (1)

Revenue

Service

Operating and facilities management contracts

695

454

53%

47%

Upfront license fee amortization

(52)

(48)

(9)%

—%

Operating and facilities management contracts, net

643

406

58%

52%

Other

83

66

24%

15%

Total service revenue

725

472

54%

47%

Product sales

23

32

(28)%

(30)%

Total revenue

749

505

48%

42%

Operating income

337

144

133%

121%

Adjusted EBITDA (1)

447

243

84%

74%

Global same-store sales growth (%)

Instant ticket & draw games

27.4%

(4.8)%

Multi-jurisdiction jackpots

94.7%

(30.0)%

Total

32.4%

(7.2)%

North America & Rest of world same-store sales growth (%)

Instant ticket & draw games

20.9%

0.3%

Multi-jurisdiction jackpots

94.7%

(30.0)%

Total

27.8%

(3.5)%

Italy same-store sales growth (%)

Instant ticket & draw games

52.2%

(19.8)%

(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

Constant

Q1’21

Q1’20

Y/Y Change

Currency

GLOBAL GAMING

(%)

Change (%) (1)

Revenue

Service

Terminal

90

106

(16)%

(16)%

Systems, software, and other

86

77

11%

8%

Total service revenue

175

184

(5)%

(6)%

Product sales

Terminal

62

53

17%

14%

Other

29

73

(61)%

(62)%

Total product sales revenue

91

126

(28)%

(30)%

Total revenue

266

310

(14)%

(16)%

Operating loss

(19)

(6)

(208)%

(177)%

Adjusted EBITDA (1)

19

31

(39)%

(35)%

Installed base units

Casino

48,230

48,911

(1)%

Casino – L/T lease (2)

1,135

917

24%

Total installed base units

49,365

49,828

(1)%

Installed base units (by geography)

US & Canada

34,138

35,065

(3)%

Rest of world

15,227

14,763

3%

Total installed base units

49,365

49,828

(1)%

Yields (by geography) (3) , in absolute $

US & Canada

$32.27

$33.72

(4)%

Rest of world (ex-Italy)

$2.58

$6.55

(61)%

Total yields (ex-Italy)

$22.93

$25.67

(11)%

Global machine units sold

New/expansion

884

119

NM

Replacement

3,521

3,563

(1)%

Total machine units sold

4,405

3,682

20%

US & Canada machine units sold

New/expansion

620

36

NM

Replacement

2,276

2,036

12%

Total machine units sold

2,896

2,072

40%

(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

(2) Excluded from yield calculations due to treatment as sales-type leases

(3) Excludes Casino L/T lease units due to treatment as sales-type leases

Constant

Q1’21

Q1’20

Y/Y Change

Currency

GLOBAL GAMING (Continued)

(%)

Change (%) (1)

Rest of world machine units sold

New/expansion

264

83

218%

Replacement

1,245

1,527

(18)%

Total  machine units sold

1,509

1,610

(6)%

Average Selling Price (ASP), in absolute $

US & Canada

$13,900

$14,300

(3)%

Rest of world

$13,700

$13,600

1%

Total ASP

$13,800

$14,000

(1)%

Gaming Systems Revenue

30

44

(32)%

CONSOLIDATED

Revenue (by geography)

US & Canada

542

447

21%

21%

Italy

348

202

72%

58%

Rest of world

124

166

(25)%

(29)%

Total revenue

1,015

814

25%

20%

Digital & Betting Revenue (2)

58

32

85%

78%

(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

(2) Included within consolidated revenue

International Game Technology PLC

Consolidated Statements of Operations

($ in millions and shares in thousands, except per share amounts)

Unaudited

For the three months ended

March 31,

2021

2020

Service revenue

901

656

Product sales

114

158

Total revenue

1,015

814

Cost of services

441

415

Cost of product sales

73

92

Selling, general and administrative

186

164

Research and development

55

61

Goodwill impairment

296

Restructuring

4

Total operating expenses

755

1,032

Operating income (loss)

260

(218)

Interest expense, net

94

100

Foreign exchange gain, net

(145)

(70)

Other expense, net

25

Total non-operating (income) expenses

(27)

30

Income (loss) from continuing operations before provision for (benefit from) income
taxes

287

(248)

Provision for (benefit from) income taxes

148

(1)

Income (loss) from continuing operations

138

(247)

Income from discontinued operations, net of tax

11

13

Net income (loss)

149

(234)

Less: Net income attributable to non-controlling interests from continuing operations

59

15

Less: Net loss attributable to non-controlling interests from discontinued operations

(2)

(1)

Net income (loss) attributable to IGT PLC

92

(248)

Net income (loss) from continuing operations attributable to IGT PLC per
common share – basic

0.39

(1.28)

Net income (loss) from continuing operations attributable to IGT PLC per
common share – diluted

0.38

(1.28)

Net income (loss) attributable to IGT PLC per common share – basic

0.45

(1.21)

Net income (loss) attributable to IGT PLC per common share – diluted

0.44

(1.21)

Weighted-average shares – basic

204,857

204,435

Weighted-average shares – diluted

206,504

204,435

International Game Technology PLC

Consolidated Balance Sheets

($ in millions)

Unaudited

March 31,

December 31,

2021

2020

Assets

Current assets:

Cash and cash equivalents

748

907

Restricted cash and cash equivalents

184

199

Trade and other receivables, net

912

846

Inventories

167

169

Other current assets

489

480

Assets held for sale

808

839

Total current assets

3,308

3,440

Systems, equipment and other assets related to contracts, net

1,018

1,068

Property, plant and equipment, net

128

132

Operating lease right-of-use assets

274

288

Goodwill

4,679

4,713

Intangible assets, net

1,531

1,577

Other non-current assets

1,622

1,774

Total non-current assets

9,252

9,552

Total assets

12,560

12,992

Liabilities and shareholders’ equity

Current liabilities:

Accounts payable

1,201

1,126

Current portion of long-term debt

375

393

Other current liabilities

804

847

Liabilities held for sale

174

250

Total current liabilities

2,554

2,615

Long-term debt, less current portion

7,441

7,857

Deferred income taxes

430

333

Operating lease liabilities

256

266

Other non-current liabilities

330

360

Total non-current liabilities

8,458

8,816

Total liabilities

11,012

11,431

Commitments and contingencies

IGT PLC’s shareholders’ equity

835

777

Non-controlling interests

714

784

Shareholders’ equity

1,548

1,561

Total liabilities and shareholders’ equity

12,560

12,992

International Game Technology PLC

Consolidated Statements of Cash Flows

($ in millions)

Unaudited

For the three months ended

March 31,

2021

2020

Cash flows from operating activities

Net income (loss)

149

(234)

Less: Income from discontinued operations, net of tax

11

13

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating
activities from continuing operations:

Deferred income taxes

100

(23)

Depreciation

82

86

Amortization of upfront license fees

55

50

Amortization

49

56

Loss on extinguishment of debt

24

Debt issuance cost amortization

6

5

Stock-based compensation

4

(13)

Goodwill impairment

296

Foreign exchange gain, net

(145)

(70)

Other non-cash items, net

(5)

Changes in operating assets and liabilities, excluding the effects of acquisitions:

Trade and other receivables

(86)

279

Inventories

4

(15)

Accounts payable

115

(195)

Other assets and liabilities

(95)

(178)

Net cash provided by operating activities from continuing operations

251

26

Net cash (used in) provided by operating activities from discontinued operations

(36)

132

Net cash provided by operating activities

215

157

Cash flows from investing activities

Capital expenditures

(48)

(85)

Proceeds from sale of assets

6

6

Other

11

Net cash used in investing activities from continuing operations

(42)

(69)

Net cash used in investing activities from discontinued operations

(10)

(14)

Net cash used in investing activities

(51)

(83)

Cash flows from financing activities

Principal payments on long-term debt

(1,387)

(432)

Payments in connection with the extinguishment of debt

(22)

Payments of debt issuance costs

(6)

Net proceeds from short-term borrowings

110

Net receipts from financial liabilities

9

51

Net proceeds from Revolving Credit Facilities

432

988

Proceeds from long-term debt

750

Dividends paid

(41)

Dividends paid – non-controlling interests

(69)

(16)

Return of capital – non-controlling interests

(11)

Capital increase – non-controlling interests

10

2

Other

(5)

(2)

Net cash (used in) provided by financing activities

(301)

660

Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents

(137)

734

Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents

(36)

(10)

Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period

1,129

894

Cash and cash equivalents and restricted cash and cash equivalents at the end of the period

956

1,618

Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations

24

18

Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing
operations

932

1,600

Supplemental Cash Flow Information

Interest paid

166

182

Income taxes paid

4

11

International Game Technology PLC

Net Debt

($ in millions)

Unaudited

March 31,

December 31,

2021

2020

6.250% Senior Secured U.S. Dollar Notes due February 2022

1,004

4.750% Senior Secured Euro Notes due February 2023

992

1,038

5.350% Senior Secured U.S. Dollar Notes due October 2023

61

61

3.500% Senior Secured Euro Notes due July 2024

583

610

6.500% Senior Secured U.S. Dollar Notes due February 2025

1,092

1,092

4.125% Senior Secured U.S. Dollar Notes due April 2026

743

3.500% Senior Secured Euro Notes due June 2026

873

913

6.250% Senior Secured U.S. Dollar Notes due January 2027

744

744

2.375% Senior Secured Euro Notes due April 2028

581

608

5.250% Senior Secured U.S. Dollar Notes due January 2029

743

743

Senior Secured Notes

6,413

6,813

Euro Term Loan Facility due January 2023

624

1,044

Euro Revolving Credit Facility B due July 2024

137

U.S. Dollar Revolving Credit Facility A due July 2024

267

Long-term debt, less current portion

7,441

7,857

Euro Term Loan Facility due January 2023

375

393

Current portion of long-term debt

375

393

Total debt

7,817

8,250

Less: Cash and cash equivalents

748

907

Less: Debt issuance costs, net – Revolving Credit Facilities due July 2024

24

Net debt

7,069

7,319

Note: Net debt is a non-GAAP financial measure

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the three months ended March 31, 2021

Business

Global

Global

Segment

Corporate

Total IGT

Lottery

Gaming

Total

and Other

PLC

Income from continuing operations

138

Provision for income taxes

148

Interest expense, net

94

Foreign exchange gain, net

(145)

Other non-operating expense, net

25

Operating income (loss)

337

(19)

318

(58)

260

Depreciation

47

35

83

(1)

82

Amortization – service revenue (1)

55

55

55

Amortization – non-purchase accounting

8

1

9

1

10

Amortization – purchase accounting

39

39

Stock-based compensation

1

1

2

2

4

Adjusted EBITDA

447

19

466

(16)

450

Cash flows from operating activities – continuing operations

251

Capital expenditures

(48)

Free Cash Flow

204

(1) Includes amortization of upfront license fees

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the three months ended March 31, 2020

Business

Global

Global

Segment

Corporate

Total IGT

Lottery

Gaming

Total

and Other

PLC

Loss from continuing operations

(247)

Benefit from income taxes

(1)

Interest expense, net

100

Foreign exchange gain, net

(70)

Operating income (loss)

144

(6)

138

(356)

(218)

Goodwill impairment

296

296

Depreciation

46

40

85

86

Amortization – service revenue (1)

50

50

50

Amortization – non-purchase accounting

7

1

8

1

9

Amortization – purchase accounting

47

47

Restructuring

1

1

3

4

Stock-based compensation

(4)

(5)

(9)

(4)

(13)

Adjusted EBITDA

243

31

274

(13)

261

Cash flows from operating activities – continuing operations

26

Capital expenditures

(85)

Free Cash Flow

(60)

(1) Includes amortization of upfront license fees

Recast Historical Financial Information

Recast data reflects the treatment of IGT’s Italian B2C gaming machine, sports betting, and digital gaming businesses as discontinued operations.

Select Performance and KPI data: ($ in millions, unless otherwise noted)

GLOBAL LOTTERY

Q2’20

Q3’20

Revenue

Service

Operating and facilities management contracts

416

525

Upfront license fee amortization

(48)

(52)

Operating and facilities management contracts, net

367

474

Other

70

76

Total service revenue

438

549

Product sales

22

20

Total revenue

460

570

Operating income

107

196

Adjusted EBITDA (1)

221

309

Global same-store sales growth (%)

Instant ticket & draw games

(7.1)%

10.6%

Multi-jurisdiction jackpots

(24.2)%

(14.3)%

Total

(8.5)%

8.7%

North America and Rest of world same-store sales growth (%)

Instant ticket & draw games

3.5%

15.0%

Multi-jurisdiction jackpots

(24.2)%

(14.3)%

Total

0.6%

12.1%

Italy same-store sales growth (%)

Instant ticket & draw games

(40.5)%

(3.5)%

(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

GLOBAL GAMING

Q2’20

Q3’20

Revenue

Service

Terminal

25

81

Systems, software, and other

59

82

Total service revenue

84

163

Product sales

Terminal

44

49

Other

12

34

Total product sales revenue

56

83

Total revenue

140

247

Operating loss

(111)

(50)

Adjusted EBITDA (1)

(36)

(8)

Installed base units

Casino

48,704

48,280

Casino – L/T lease (2)

930

1,102

Total installed base units

49,634

49,382

Installed base units (by geography)

US & Canada

34,800

34,584

Rest of world

14,834

14,798

Total installed base units

49,634

49,382

Yields (by geography) (3) , in absolute $

US & Canada

$8.69

$26.79

Rest of world

$0.49

$4.31

Total yields

$6.21

$19.88

Global machine units sold

New/expansion

1,443

818

Replacement

1,538

2,853

Total machine units sold

2,981

3,671

US & Canada machine units sold

New/expansion

1,382

667

Replacement

1,330

2,007

Total machine units sold

2,712

2,674

Rest of world machine units sold

New/expansion

61

151

Replacement

208

846

Total machine units sold

269

997

Average selling price (ASP), in absolute $

US & Canada

$14,700

$13,800

Rest of world

$14,000

$12,100

Total ASP

$14,600

$13,300

Gaming systems revenue

23

31

(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

(2) Excluded from yield calculations due to treatment as sales-type leases

(3) Excludes Casino L/T lease units due to treatment as sales-type leases

CONSOLIDATED

Q2’20

Q3’20

Revenue (by geography)

US & Canada

369

443

Italy

150

246

Rest of world

80

127

Total revenue

600

816

Digital & Betting Revenue (1)

43

48

(1) Included within consolidated revenue

International Game Technology PLC

Consolidated Statements of Operations

($ in millions and shares in thousands, except per share amounts)

Unaudited

For the three months ended

June 30,

2020

September 30,

2020

Service revenue

522

713

Product sales

78

104

Total revenue

600

816

Cost of services

361

418

Cost of product sales

67

83

Selling, general and administrative

168

179

Research and development

31

48

Restructuring

43

Other operating expense, net

1

1

Total operating expenses

672

730

Operating (loss) income

(72)

87

Interest expense, net

96

101

Foreign exchange loss, net

74

149

Other expense, net

28

6

Total non-operating expenses

198

256

Loss from continuing operations before benefit from income taxes

(271)

(170)

Benefit from income taxes

(3)

(41)

Loss from continuing operations

(268)

(129)

(Loss) income from discontinued operations, net of tax

(15)

26

Net loss

(282)

(102)

Less: Net income attributable to non-controlling interests from continuing operations

25

Less: Net (loss) income attributable to non-controlling interests from discontinued
operations

(3)

1

Net loss attributable to IGT PLC

(280)

(128)

Net loss from continuing operations attributable to IGT PLC per common share –
basic and diluted

(1.31)

(0.75)

Net loss attributable to IGT PLC per common share – basic and diluted

(1.37)

(0.62)

Weighted-average shares – basic and diluted

204,748

204,857

International Game Technology PLC

Consolidated Statements of Cash Flows

($ in millions)

Unaudited

For the three months ended

June 30,

2020

September 30,

2020

Cash flows from operating activities

Net loss

(282)

(102)

Less: (Loss) income from discontinued operations, net of tax

(15)

26

Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities from
continuing operations:

Depreciation

88

91

Foreign exchange loss, net

74

149

Amortization

52

53

Amortization of upfront license fees

51

54

Loss on extinguishment of debt

28

Debt issuance cost amortization

5

5

Stock-based compensation

1

1

Deferred income taxes

(13)

(70)

Other non-cash items, net

4

1

Changes in operating assets and liabilities, excluding the effects of dispositions and acquisitions:

Trade and other receivables

(192)

81

Inventories

10

(3)

Accounts payable

175

(25)

Other assets and liabilities

111

(18)

Net cash provided by operating activities from continuing operations

127

191

Net cash provided by operating activities from discontinued operations

40

95

Net cash provided by operating activities

168

285

Cash flows from investing activities

Capital expenditures

(54)

(65)

Proceeds from sale of assets

(1)

1

Other

2

Net cash used in investing activities from continuing operations

(55)

(62)

Net cash used in investing activities from discontinued operations

(6)

(1)

Net cash used in investing activities

(61)

(63)

Cash flows from financing activities

Principal payments on long-term debt

(790)

(579)

Net payments of short-term borrowings

(35)

(83)

Payments in connection with the extinguishment of debt

(25)

Payments of debt issuance costs

(20)

(2)

Net (payments of) receipts from financial liabilities

(14)

59

Proceeds from long-term debt

750

Dividends paid – non-controlling interests

(76)

(45)

Capital increase – non-controlling interests

1

Other

(4)

(3)

Net cash used in financing activities

(213)

(650)

Net decrease in cash and cash equivalents and restricted cash and cash equivalents

(106)

(428)

Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents

18

38

Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period

1,618

1,530

Cash and cash equivalents and restricted cash and cash equivalents at the end of the period

1,530

1,140

Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations

19

19

Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations

1,511

1,121

Supplemental Cash Flow Information:

Interest paid

49

141

Income taxes paid

7

20

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the three months ended June 30, 2020

Global
Lottery

Global
Gaming

Business
Segment
Total

Corporate
and Other

Total IGT
PLC

Loss from continuing operations

(268)

Benefit from income taxes

(3)

Interest expense, net

96

Foreign exchange loss, net

74

Other non-operating expense, net

28

Operating income (loss)

107

(111)

(4)

(69)

(72)

Depreciation

50

37

87

88

Amortization – service revenue (1)

51

51

51

Amortization – non-purchase accounting

7

2

9

1

10

Amortization – purchase accounting

42

42

Restructuring

5

35

40

3

43

Stock-based compensation

1

1

Other (2)

1

1

Adjusted EBITDA

221

(36)

184

(20)

164

Cash flows from operating activities – continuing operations

127

Capital expenditures

(54)

Free Cash Flow

73

(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

For the three months ended September 30, 2020

Global
Lottery

Global
Gaming

Business
Segment
Total

Corporate
and Other

Total IGT
PLC

Loss from continuing operations

(129)

Benefit from income taxes

(41)

Interest expense, net

101

Foreign exchange loss, net

149

Other non-operating expense, net

6

Operating income (loss)

196

(50)

146

(59)

87

Depreciation

51

40

91

91

Amortization – service revenue (1)

54

54

54

Amortization – non-purchase accounting

8

2

10

1

11

Amortization – purchase accounting

42

42

Stock-based compensation

1

1

Other (2)

1

1

Adjusted EBITDA

309

(8)

301

(13)

287

Cash flows from operating activities – continuing operations

191

Capital expenditures

(65)

Free Cash Flow

126

(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

Cision View original content to download multimedia: http://www.prnewswire.com/news-releases/international-game-technology-plc-reports-first-quarter-2021-results-301288342.html

SOURCE International Game Technology PLC

News Provided by PR Newswire via QuoteMedia

Insert Coin For The Future Of Esports Investments


Start Here For Ways In Investing And Earning In Esports Today!

Get the latest Gaming Investing stock information

Get the latest information about companies associated with Gaming Investing Delivered directly to your inbox.

Gaming Investing

Select None
Select All

Leave a Reply