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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 | Constant | ||
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 | 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 | 0.39 | (1.28) | |||
Net income (loss) from continuing operations attributable to IGT PLC per | 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 | |||
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 | 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 | (3) | 1 | ||||
Net loss attributable to IGT PLC | (280) | (128) | ||||
Net loss from continuing operations attributable to IGT PLC per common share - | (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 | ||||
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 | Global | Business | Corporate | Total IGT | |||||||||||
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 | Global | Business | Corporate | Total IGT | |||||||||||
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 |
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SOURCE International Game Technology PLC
