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International Game Technology PLC Reports Fourth Quarter And Full Year 2020 Results
Fourth Quarter:
- $885 million in revenue and $96 million in operating income from continuing operations includes highest Global Lottery revenue and profit performance in two years
- Cash from operating activities of $255 million; combined free cash flow of $191 million in line with prior-year level
- Net loss of $220 million, includes $155 million non-cash foreign exchange loss; combined Adjusted EBITDA of $321 million driven by high profit flow-through of Global Lottery same-store sales growth and benefit from cost-saving actions
Full Year:
- 2020 revenue from continuing operations of $3.12 billion reflects resilience of Global Lottery, including double-digit same-store sales growth in North America in the second half of the year and growing contribution from Digital & Betting activities
- Cash from operating activities totaled $866 million and combined free cash flow was $576 million, among the highest levels in five years
- Reduced net debt by $71 million as reported, $433 million excluding unfavorable foreign currency impact

LONDON, March 2, 2021 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the fourth quarter and full year ended December 31, 2020. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the results; access details are provided below.

"The solid results we achieved for this pandemic-impacted year have given us momentum into 2021. They are a result of the vision, agility, and discipline of the IGT team as well as the distinct advantages of our diverse portfolio," said Marco Sala, CEO of IGT. "We also made important strategic progress. The Company undertook a comprehensive reorganization to sharpen our focus on our core competencies and drive structural operational efficiencies. This provides a clear path to increasing shareholder value as we build on our leadership positions with a stronger revenue and profit growth profile."

"We generated $866 million in cash from operating activities during the year, among the highest level in five years, primarily driven by resilient Global Lottery performance and rigorous cost and invested capital controls," said Max Chiara, CFO of IGT. "Liquidity improved more than $300 million to over $2.7 billion. As a leaner, stronger Company, we expect leverage to return to pre-pandemic levels in the next 12-18 months."

Overview of Consolidated Fourth Quarter and Full Year 2020 Results

All amounts from continuing operations unless otherwise noted

Quarter Ended

Y/Y

Change

(%)

Constant

Currency

Change

(%)

Year Ended

Y/Y

Change

(%)

Constant

Currency

Change

(%)

December 31,

December 31,

2020

 

2019

2020

 

2019

(In $ millions, unless otherwise noted)

                   

GAAP Financials:

                   

Revenue

                   

    Global Lottery

630

 

568

11%

8%

2,164

 

2,293

(6)%

(6)%

    Global Gaming

255

 

476

(46)%

(47)%

951

 

1,739

(45)%

(45)%

Total revenue

885

 

1,044

(15)%

(17)%

3,115

 

4,032

(23)%

(23)%

                     

Operating income/(loss)

                   

    Global Lottery

195

 

154

26%

21%

642

 

697

(8)%

(10)%

    Global Gaming

(39)

 

59

NA

NA

(206)

 

180

NA

NA

    Corporate support expense

(20)

 

(25)

20%

32%

(76)

 

(105)

28%

29%

    Other(1)

(40)

 

(148)

73%

73%

(468)

 

(294)

(59)%

(59)%

Total operating income/(loss)

96

 

40

138%

132%

(107)

 

478

NA

NA

                     

Net cash provided by operating activities from continuing operations

251

 

278

(10)%

 

595

 

907

(34)%

 

Net cash provided by operating activities from discontinued operations

4

 

26

(83)%

 

271

 

186

46%

 

Net cash provided by operating activities

255

 

304

(16)%

 

866

 

1,093

(21)%

 
                     

Cash and cash equivalents 

907

 

655

39%

 

907

 

655

39%

 
                     

Non-GAAP Financial Measures:

                   

Adjusted EBITDA

                   

    Global Lottery

313

 

268

17%

12%

1,086

 

1,136

(4)%

(6)%

    Global Gaming

(2)

 

115

NA

NA

(16)

 

397

NA

NA

    Corporate support expense

(16)

 

(18)

12%

21%

(62)

 

(79)

21%

21%

Total Adjusted EBITDA

295

 

365

(19)%

(22)%

1,008

 

1,454

(31)%

(32)%

EBITDA from discontinued operations

26

 

69

(63)%

 

138

 

256

(46)%

 

Adjusted EBITDA - combined

321

 

435

(26)%

 

1,146

 

1,710

(33)%

 
                     

Free cash flow

201

 

186

8%

 

340

 

530

(36)%

 

Free cash flow from discontinued operations

(10)

 

9

NA

 

236

 

121

94%

 

Free cash flow - combined

191

 

195

(2)%

 

576

 

651

(12)%

 
                     

Net debt

         

7,319

 

7,390

(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

Fourth Quarter and Full Year 2020 Key Highlights:

  • Consolidated:
    • Generated $866 million in cash from operating activities and $576 million in combined free cash flow during 2020; cash flow performance especially strong in the back half of the year
    • Achieved $500 million in 2020 temporary cost savings/avoidance
    • Launched OPtiMa business efficiency program and accelerated timing with $200M+ in targeted savings to be achieved in 2021
    • Implemented a simplified global organizational structure focused primarily on two business segments: Global Lottery and Global Gaming
    • Announced agreement to sell Italian B2C gaming businesses for €950 million
  • Global Lottery:
    • Delivered highest quarterly segment-level revenue and Adjusted EBITDA in two years in the fourth quarter; full year same-store sales up 7% in North America including the strongest annual growth for instant tickets and draw games in seven years
    • Awarded long-term contracts with the Czech Republic, Poland and Nebraska lotteries following competitive bid processes in 2020
    • In 2020, signed two-year contract extensions with the New York, Tennessee, and Minnesota lotteries; seven-year contract extensions with Western Canada Lottery Corporation and, more recently, with the Jamaica lottery
  • Global Gaming:
    • Sequential stability in Global Gaming revenue and profit in the fourth quarter; KPIs stable to improving
    • 2020 product highlights: growing acceptance of cashless solutions with Resort Wallet™ launched at Resorts World Catskills and, more recently, obtaining Nevada regulatory approval; entered Historical Horse Racing market; launched Peak family of cabinets
    • Strong double-digit growth in Digital & Betting for the year

Fourth Quarter 2020 Financial Highlights:

The Company's B2C gaming machine and sports betting activities in Italy have been classified as discontinued operations due to the pending sale of these businesses. Unless otherwise noted, results presented in this release are from continuing operations.

Fourth quarter results reflect the continued, global impact of the COVID-19 pandemic.

Total revenue of $885 million compared to $1.04 billion in the prior-year period

  • Global Lottery revenue totals $630 million, up 11% from the prior year
    • Double-digit same-store sales growth in North America with a return to growth in Italy
    • Reduced by $19 million catch-up adjustment for unspent advertising in Italy
  • Global Gaming revenue of $255 million, down 46% from the prior year
    • Impacted by pandemic-related casino closures and operating restrictions
    • Sequential stability with the third quarter supported by stable to improving KPIs
    • Digital & Betting service revenue rose nearly 55% compared to the prior year; overall increase of 4% includes impact of non-recurring software sale in the prior year

Operating income of $96 million, up from $40 million in the prior year

  • Goodwill impairment of $99 million in the prior-year period
  • High profit flow-through of Global Lottery same-store sales growth
  • Global Gaming impacted by pandemic-related decline in revenue
  • Benefit of disciplined cost-saving actions across segments

Net interest expense of $101 million, in line with prior-year period

Provision for income taxes of $73 million compared to $2 million

  • Higher valuation allowances on deferred tax assets in the current period
  • Income taxes paid of $51 million versus $77 million in the prior year

Net loss attributable to IGT was $242 million versus $168 million, driven by higher non-cash foreign exchange losses, primarily on Euro-denominated debt instruments

Net loss attributable to IGT per diluted share of $(1.18) compared to $(0.82)

Adjusted EBITDA of $295 million versus $365 million in the prior year

Net debt of $7.32 billion compared to $7.39 billion at December 31, 2019; reduced $71 million as reported, $433 million excluding unfavorable foreign currency impact

Full Year 2020 Financial Highlights:

Year-over-year comparisons reflect the global impact of the COVID-19 pandemic in 2020.

Total revenue was $3.12 billion versus $4.03 billion in the prior year

  • Global Lottery revenue of $2.16 billion, down 6%, demonstrating remarkable resilience
    • Global same-store sales stable
    • Steep recovery in second half driven by double-digit North America same-store sales growth
  • Global Gaming revenue was $951 million, down 45%, as the pandemic caused protracted casino closures and operating restrictions around the world

Operating loss of $107 million compared to operating income of $478 million in the prior-year period       

  • Impact of lower revenue
  • Goodwill impairment of $296 million in the current year compared to $99 million in the prior year
  • Benefit of disciplined cost-saving actions across segments

Net interest expense of $398 million versus $411 million in the prior year, on lower average cost of debt

Provision for income taxes of $28 million versus $131 million in the prior year

  • Pre-tax loss in 2020 compared to income in 2019, in addition to higher valuation allowances on deferred tax assets in 2020
  • Income taxes paid of $89 million compared to $197 million in the prior year

Net loss attributable to IGT was $898 million compared to $19 million in the prior-year period, driven by higher non-cash foreign exchange losses, primarily on Euro-denominated debt instruments, and goodwill impairment

Net loss attributable to IGT per diluted share of $(4.39) versus $(0.09)

Adjusted EBITDA totaled $1.01 billion compared to $1.45 billion

Cash from operations was $595 million compared to $907 million in 2019, relatively resilient despite pandemic impact, on solid Global Lottery financial results and diligent invested capital management

Capital expenditures of $255 million versus $377 million in the prior year, reflecting focus on cash cost savings during the pandemic

Cash and cash equivalents of $907 million as of December 31, 2020, versus $655 million as of December 31, 2019

Cash and Liquidity Update

  • Total liquidity increased over $300 million compared to December 31, 2019, due to strong cash flow generation
  • At December 31, 2020, liquidity totaled $2.72 billion, comprised of $907 million in unrestricted cash and $1.82 billion available under revolving credit facilities

Conference Call and Webcast:

March 2, 2021, at 8:00 a.m. EST

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: 4538018
  • 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: 4538018

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 2020 are calculated using the same foreign exchange rates as the corresponding 2019 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 or 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.

Total Adjusted EBITDA represents 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, and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of on-going 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, and certain other non-recurring items. EBITDA – discontinued operations represents income from discontinued operations (a GAAP measure) before income taxes, interest expense, depreciation and amortization. Adjusted EBITDA – combined represents Total Adjusted EBITDA plus EBITDA – discontinued operations. 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 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. Free cash flow – discontinued operations represents cash flows from operating activities – discontinued operations (a GAAP measure) less cash flows from investing activities – discontinued operations (a GAAP measure).  Free cash flow – combined represents Free Cash Flow plus Free Cash Flow – discontinued operations. 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)

GLOBAL LOTTERY

 

Q4'20

 

Q4'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

 

FY'20

 

FY'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

Revenue

                               

Service

                               

Operating and facilities management contracts

 

549

 

527

 

4%

 

1%

 

1,944

 

2,126

 

(9)%

 

(10)%

Upfront license fee amortization

 

(52)

 

(49)

 

(8)%

 

—%

 

(200)

 

(196)

 

(2)%

 

—%

Operating and facilities management contracts, net

 

497

 

479

 

4%

 

1%

 

1,744

 

1,931

 

(10)%

 

(11)%

Other

 

86

 

66

 

32%

 

24%

 

299

 

252

 

18%

 

17%

Total service revenue

 

583

 

544

 

7%

 

4%

 

2,043

 

2,183

 

(6)%

 

(7)%

                                 

Product sales

 

47

 

24

 

100%

 

97%

 

121

 

110

 

10%

 

10%

Total revenue

 

630

 

568

 

11%

 

8%

 

2,164

 

2,293

 

(6)%

 

(6)%

                                 

Operating income

 

195

 

154

 

26%

 

21%

 

642

 

697

 

(8)%

 

(10)%

Adjusted EBITDA(1)

 

313

 

268

 

17%

 

12%

 

1,086

 

1,136

 

(4)%

 

(6)%

                                 
   

Q4'20

Constant

Currency

Change

(%) (1)

 

Q4'19

Constant

Currency

Change

(%) (1)

         

FY'20

Constant

Currency

Change

(%) (1)

 

FY'19

Constant

Currency

Change

(%) (1)

       

Global same-store sales growth (%)

                               

Instant ticket & draw games

 

8.2%

 

3.2%

         

1.6%

 

4.1%

       

Multi-jurisdiction jackpots

 

4.5%

 

(49.4)%

         

(17.0)%

 

(18.3)%

       

Total

 

7.9%

 

(4.6)%

         

0.1%

 

1.7%

       
                                 

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

                               

Instant ticket & draw games

 

10.7%

 

4.7%

         

7.3%

 

5.2%

       

Multi-jurisdiction jackpots

 

4.5%

 

(49.4)%

         

(17.0)%

 

(18.3)%

       

Total

 

10.1%

 

(5.5)%

         

4.7%

 

2.0%

       
                                 

Italy same-store sales growth (%)

                               

Instant ticket & draw games

 

0.4%

 

(1.3)%

         

(16.1)%

 

0.8%

       
                                 

(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

 
 

GLOBAL GAMING

 

Q4'20

 

Q4'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

 

FY'20

 

FY'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

Revenue

                               

Service

                               

Terminal

 

85

 

133

 

(36)%

 

(36)%

 

297

 

568

 

(48)%

 

(47)%

Systems, software, and other

 

81

 

80

 

1%

 

—%

 

299

 

350

 

(14)%

 

(14)%

Total service revenue

 

166

 

213

 

(22)%

 

(22)%

 

597

 

918

 

(35)%

 

(35)%

                                 

Product sales

                               

Terminal

 

59

 

188

 

(69)%

 

(69)%

 

205

 

581

 

(65)%

 

(65)%

Other

 

30

 

75

 

(60)%

 

(61)%

 

149

 

240

 

(38)%

 

(38)%

Total product sales revenue

 

89

 

263

 

(66)%

 

(67)%

 

355

 

821

 

(57)%

 

(57)%

Total revenue

 

255

 

476

 

(46)%

 

(47)%

 

951

 

1,739

 

(45)%

 

(45)%

                                 

Operating (loss) income

 

(39)

 

59

 

NA

 

NA

 

(206)

 

180

 

NA

 

NA

Adjusted EBITDA(1)

 

(2)

 

115

 

NA

 

NA

 

(16)

 

397

 

NA

 

NA

                                 

Installed base units

                               

Casino

 

48,232

 

50,834

 

(5)%

     

48,232

 

50,834

 

(5)%

   

Casino - L/T lease (2)

 

1,068

 

 

NA

     

1,068

 

 

NA

   

Total installed base units

 

49,300

 

50,834

 

(3)%

     

49,300

 

50,834

 

(3)%

   
                                 

Installed base units (by geography)

                               

US & Canada

 

34,275

 

35,977

 

(5)%

     

34,275

 

35,977

 

(5)%

   

Rest of world

 

15,025

 

14,857

 

1%

     

15,025

 

14,857

 

1%

   

Total installed base units

 

49,300

 

50,834

 

(3)%

     

49,300

 

50,834

 

(3)%

   
                                 

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

                               

US & Canada

 

$27.88

 

$40.29

 

(31)%

     

$24.34

 

$40.31

 

(40)%

   

Rest of world

 

$3.33

 

$7.75

 

(57)%

     

$3.67

 

$8.50

 

(57)%

   

Total yields

 

$20.32

 

$31.08

 

(35)%

     

$18.06

 

$31.45

 

(43)%

   
                                 

Global machine units sold

                               

New/expansion

 

666

 

1,811

 

(63)%

     

3,046

 

5,814

 

(48)%

   

Replacement

 

3,662

 

11,808

 

(69)%

     

11,616

 

36,262

 

(68)%

   

Total machine units sold

 

4,328

 

13,619

 

(68)%

     

14,662

 

42,076

 

(65)%

   
                                 

US & Canada machine units sold

                               

New/expansion

 

668

 

1,405

 

(52)%

     

2,753

 

4,116

 

(33)%

   

Replacement

 

2,636

 

5,986

 

(56)%

     

8,009

 

16,903

 

(53)%

   

Total machine units sold

 

3,304

 

7,391

 

(55)%

     

10,762

 

21,019

 

(49)%

   
                                 

Rest of world machine units sold

                               

New/expansion

 

(2)

 

406

 

NA

     

293

 

1,698

 

(83)%

   

Replacement

 

1,026

 

5,822

 

(82)%

     

3,607

 

19,359

 

(81)%

   

Total  machine units sold

 

1,024

 

6,228

 

(84)%

     

3,900

 

21,057

 

(81)%

   
                                 
                                 

(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

(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, comparability on a Y/Y basis hindered due to fewer active units

 
 

GLOBAL GAMING (Continued)

 

Q4'20

 

Q4'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

 

FY'20

 

FY'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

Average selling price (ASP), in absolute $

                               

US & Canada

 

14,200

 

14,900

 

(5)%

     

14,200

 

15,100

 

(6)%

   

Rest of world

 

10,400

 

11,900

 

(13)%

     

12,400

 

11,700

 

6%

   

Total ASP

 

13,300

 

13,500

 

(1)%

     

13,800

 

13,400

 

3%

   
                                 

Gaming systems revenue

 

38

 

58

 

(35)%

     

136

 

213

 

(36)%

   

CONSOLIDATED

                               

Revenue (by geography)

                               

US & Canada

 

489

 

580

 

(16)%

 

(16)%

 

1,748

 

2,236

 

(22)%

 

(22)%

Italy

 

266

 

237

 

12%

 

4%

 

862

 

949

 

(9)%

 

(12)%

Rest of world

 

131

 

228

 

(43)%

 

(44)%

 

505

 

846

 

(40)%

 

(40)%

Total revenue

 

885

 

1,044

 

(15)%

 

(17)%

 

3,115

 

4,032

 

(23)%

 

(23)%

                                 
                                 
                                 

Digital & Betting Revenue (2)

 

47

 

45

 

4%

 

2%

 

170

 

130

 

31%

 

31%

                                 
                                 

(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

(2) Included within consolidated revenue

 
 

DISCONTINUED OPERATIONS - ITALY B2C KPIs

 

Q4'20

 

Q4'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

 

FY'20

 

FY'19

 

Y/Y

Change

(%)

 

Constant

Currency

Change

(%) (1)

Italy installed base units

                               

VLT - Operator

 

10,774

 

11,020

 

(2)%

     

10,774

 

11,020

 

(2)%

   

AWP

 

36,168

 

40,892

 

(12)%

     

36,168

 

40,892

 

(12)%

   

Total Italy installed base units

 

46,942

 

51,912

 

(10)%

     

46,942

 

51,912

 

(10)%

   
                                 

Italy wagers (€)

                               

VLT

 

228

 

1,414

     

(84)%

 

2,062

 

5,669

     

(64)%

AWP

 

239

 

958

     

(75)%

 

1,719

 

3,690

     

(53)%

                                 

Italy sports betting wagers (€)

 

233

 

298

     

(22)%

 

767

 

1,050

     

(27)%

Italy sports betting payout (%)

 

82.9%

 

83.3%

     

—%

 

82.4%

 

83.1%

     

(1)%

                                 
                                 

(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

 

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited

               
 

For the three months ended

December 31,

 

For the year ended

December 31,

 

2020

 

2019

 

2020

 

2019

Service revenue

748,932

 

756,653

 

2,639,558

 

3,100,868

Product sales

136,193

 

286,875

 

475,898

 

930,889

Total revenue

885,125

 

1,043,528

 

3,115,456

 

4,031,757

               

Cost of services

439,816

 

445,158

 

1,633,899

 

1,777,225

Cost of product sales

103,096

 

157,254

 

345,800

 

558,011

Selling, general and administrative

195,895

 

229,163

 

706,895

 

849,620

Research and development

50,837

 

65,936

 

190,948

 

266,241

Restructuring

(1,910)

 

3,002

 

45,045

 

24,855

Goodwill impairment

 

99,000

 

296,000

 

99,000

Other operating expense (income), net

1,282

 

3,632

 

4,334

 

(21,111)

Total operating expenses

789,016

 

1,003,145

 

3,222,921

 

3,553,841

               

Operating income (loss)

96,109

 

40,383

 

(107,465)

 

477,916

               

Interest expense, net

(100,799)

 

(101,391)

 

(397,916)

 

(410,875)

Foreign exchange (loss) gain, net

(155,449)

 

(101,742)

 

(308,898)

 

39,874

Other income (expense), net

990

 

(3,954)

 

(33,428)

 

21,092

Total non-operating expenses

(255,258)

 

(207,087)

 

(740,242)

 

(349,909)

               

(Loss) income from continuing operations before provision for income taxes

(159,149)

 

(166,704)

 

(847,707)

 

128,007

Provision for income taxes

72,747

 

2,270

 

27,698

 

130,757

Loss from continuing operations

(231,896)

 

(168,974)

 

(875,405)

 

(2,750)

Income from discontinued operations, net of tax

11,751

 

30,589

 

36,681

 

114,408

Net (loss) income

(220,145)

 

(138,385)

 

(838,724)

 

111,658

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

23,830

 

27,877

 

63,926

 

126,144

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

(1,979)

 

1,436

 

(4,760)

 

4,539

Net loss attributable to IGT PLC

(241,996)

 

(167,698)

 

(897,890)

 

(19,025)

               

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

(1.25)

 

(0.96)

 

(4.59)

 

(0.63)

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

(1.18)

 

(0.82)

 

(4.39)

 

(0.09)

               

Weighted-average shares - basic and diluted

204,857

 

204,435

 

204,725

 

204,373

 

International Game Technology PLC

 

Consolidated Balance Sheets

 

($ thousands)

 

Unaudited

 
         
 

December 31,

 

December 31,

 
 

2020

 

2019

 

Assets

       

Current assets:

       

Cash and cash equivalents

907,015

 

654,628

 

Restricted cash and cash equivalents

199,246

 

220,962

 

Trade and other receivables, net

846,128

 

875,263

 

Inventories

169,207

 

161,790

 

Other current assets

479,649

 

513,015

 

Assets held for sale

838,840

 

208,379

 

Total current assets

3,440,085

 

2,634,037

 

Systems, equipment and other assets related to contracts, net

1,068,121

 

1,205,592

 

Property, plant and equipment, net

131,602

 

146,055

 

Operating lease right-of-use assets

288,196

 

296,751

 

Goodwill

4,713,489

 

4,931,235

 

Intangible assets, net

1,577,354

 

1,749,614

 

Other non-current assets

1,773,641

 

1,917,751

 

Assets held for sale

 

763,555

 

Total non-current assets

9,552,403

 

11,010,553

 

Total assets

12,992,488

 

13,644,590

 
         

Liabilities and shareholders' equity

       

Current liabilities:

       

Accounts payable

1,126,043

 

1,059,033

 

Current portion of long-term debt

392,672

 

462,155

 

Short-term borrowings

480

 

3,193

 

Other current liabilities

846,273

 

758,818

 

Liabilities held for sale

249,573

 

185,152

 

Total current liabilities

2,615,041

 

2,468,351

 

Long-term debt, less current portion

7,857,086

 

7,600,169

 

Deferred income taxes

333,010

 

393,040

 

Operating lease liabilities

266,227

 

272,350

 

Other non-current liabilities

359,961

 

395,866

 

Liabilities held for sale

 

29,836

 

Total non-current liabilities

8,816,284

 

8,691,261

 

Total liabilities

11,431,325

 

11,159,612

 

Commitments and contingencies

       

IGT PLC's shareholders' equity

776,737

 

1,658,262

 

Non-controlling interests

784,426

 

826,716

 

Total shareholders' equity

1,561,163

 

2,484,978

 

Total liabilities and shareholders' equity

12,992,488

 

13,644,590

 

 

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited

               
 

For the three months ended

 

For the year ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities

             

Net (loss) income

(220,145)

 

(138,385)

 

(838,724)

 

111,658

Less: Income from discontinued operations, net of tax

11,751

 

30,589

 

36,681

 

114,408

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

             

Foreign exchange loss (gain), net

155,449

 

101,742

 

308,898

 

(39,874)

Depreciation

89,992

 

103,867

 

354,854

 

385,987

Amortization of upfront license fees

54,856

 

51,109

 

210,432

 

205,739

Amortization

50,900

 

57,902

 

211,340

 

227,956

Deferred income taxes

28,313

 

(70,883)

 

(78,207)

 

(68,293)

Debt issuance cost amortization

5,579

 

5,432

 

21,327

 

22,436

Stock-based compensation

3,826

 

6,468

 

(6,877)

 

26,514

Goodwill impairment

 

99,000

 

296,000

 

99,000

(Gain) loss on extinguishment of debt

(2)

 

 

28,265

 

11,964

(Gain) loss on sale of assets

(482)

 

610

 

(27)

 

(64,714)

Other non-cash items, net

(1,175)

 

1,980

 

(1,675)

 

18,942

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

             

Accounts payable

49,287

 

21,499

 

4,595

 

28,247

Inventories

26,063

 

60,597

 

16,628

 

84,472

Trade and other receivables

(95,495)

 

(55,464)

 

73,578

 

(49,267)

Other assets and liabilities

115,815

 

63,575

 

31,076

 

20,981

Net cash provided by operating activities from continuing operations

251,030

 

278,460

 

594,802

 

907,340

Net cash provided by operating activities from discontinued operations

4,287

 

25,970

 

270,829

 

185,795

Net cash provided by operating activities

255,317

 

304,430

 

865,631

 

1,093,135

               

Cash flows from investing activities

             

Capital expenditures

(50,210)

 

(92,142)

 

(254,689)

 

(377,248)

Proceeds from sale of assets

2,929

 

23,300

 

9,251

 

123,855

Other

(286)

 

(274)

 

12,151

 

5,851

Net cash used in investing activities from continuing operations

(47,567)

 

(69,116)

 

(233,287)

 

(247,542)

Net cash used in investing activities from discontinued operations

(14,051)

 

(17,226)

 

(35,284)

 

(64,648)

Net cash used in investing activities

(61,618)

 

(86,342)

 

(268,571)

 

(312,190)

               

Cash flows from financing activities

             

Principal payments on long-term debt

(175,000)

 

 

(988,379)

 

(1,264,647)

Net (payments of) receipts from financial liabilities

(28,560)

 

(35,077)

 

67,138

 

(34,324)

Payments of debt issuance costs

(105)

 

(1,143)

 

(21,584)

 

(25,930)

Payments in connection with the extinguishment of debt

 

(91)

 

(25,000)

 

(8,689)

Proceeds from long-term debt

 

 

750,000

 

1,397,025

Net proceeds from (payments of) short-term borrowings

475

 

2,452

 

(7,135)

 

(32,067)

Dividends paid

 

(40,887)

 

(40,887)

 

(163,503)

Return of capital - non-controlling interests

(32,309)

 

(18,404)

 

(32,309)

 

(98,788)

Dividends paid - non-controlling interests

(497)

 

(971)

 

(136,389)

 

(136,655)

Capital increase - non-controlling interests

4,778

 

130

 

8,112

 

1,499

Other

(2,828)

 

(2,397)

 

(11,426)

 

(10,195)

Net cash used in financing activities

(234,046)

 

(96,388)

 

(437,859)

 

(376,274)

               

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

(40,347)

 

121,700

 

159,201

 

404,671

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

29,971

 

8,893

 

75,770

 

(22,197)

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

1,139,598

 

763,658

 

894,251

 

511,777

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

1,129,222

 

894,251

 

1,129,222

 

894,251

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

22,961

 

18,661

 

22,961

 

18,661

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

1,106,261

 

875,590

 

1,106,261

 

875,590

               

Supplemental Cash Flow Information:

             

Interest paid

(37,433)

 

(28,175)

 

(409,560)

 

(400,022)

Income taxes paid

(50,761)

 

(77,495)

 

(89,006)

 

(196,831)

 

International Game Technology PLC

Net Debt

($ thousands)

Unaudited

         
   

December 31,

 

December 31,

   

2020

 

2019

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

 

1,003,822

 

1,491,328

4.750% Senior Secured Euro Notes due February 2023

 

1,038,052

 

948,382

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

 

60,791

 

60,885

3.500% Senior Secured Euro Notes due July 2024

 

609,742

 

557,331

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

 

1,091,641

 

1,089,959

3.500% Senior Secured Euro Notes due June 2026

 

913,330

 

835,105

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

 

744,155

 

743,387

2.375% Senior Secured Euro Notes due April 2028

 

608,400

 

556,403

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

 

743,125

 

Senior Secured Notes

 

6,813,058

 

6,282,780

         

Euro Term Loan Facility due January 2023

 

1,044,028

 

1,317,389

Long-term debt, less current portion

 

7,857,086

 

7,600,169

         

4.750% Senior Secured Euro Notes due March 2020

 

 

434,789

5.500% Senior Secured U.S. Dollar Notes due June 2020

 

 

27,366

Euro Term Loan Facility due January 2023

 

392,672

 

Current portion of long-term debt

 

392,672

 

462,155

         

Short-term borrowings

 

480

 

3,193

Total debt

 

8,250,238

 

8,065,517

         

Less: Cash and cash equivalents

 

907,015

 

654,628

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

 

23,937

 

20,464

         

Net debt

 

7,319,286

 

7,390,425

         

Note: Net debt is a non-GAAP financial measure

       

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited

                     
   

For the three months ended December 31, 2020

   

Global

Lottery

 

Global

Gaming

 

Business

Segment

Total

 

Corporate

and Other

 

Total IGT

PLC

Loss from continuing operations

                 

(231,896)

Provision for income taxes

                 

72,747

Interest expense, net

                 

100,799

Foreign exchange loss, net

                 

155,449

Other non-operating income, net

                 

(990)

Operating income (loss)

 

194,725

 

(38,763)

 

155,962

 

(59,853)

 

96,109

Depreciation

 

54,000

 

35,801

 

89,801

 

191

 

89,992

Amortization - service revenue (1)

 

54,856

 

 

54,856

 

 

54,856

Amortization - non-purchase accounting

 

8,347

 

2,152

 

10,499

 

796

 

11,295

Amortization - purchase accounting

 

 

 

 

39,605

 

39,605

Restructuring

 

67

 

(1,819)

 

(1,752)

 

(158)

 

(1,910)

Stock-based compensation

 

839

 

745

 

1,584

 

2,242

 

3,826

Other (2)

 

 

3

 

3

 

1,281

 

1,284

Adjusted EBITDA

 

312,834

 

(1,881)

 

310,953

 

(15,896)

 

295,057

                     

Income from discontinued operations

                 

11,751

Benefit from income taxes

                 

(3,517)

Interest expense, net

                 

5

Depreciation

                 

8,347

Amortization

                 

9,172

EBITDA - discontinued operations

                 

25,758

                     

Adjusted EBITDA - combined

                 

320,815

                     

Cash flows from operating activities - continuing operations

                 

251,030

Capital expenditures

                 

(50,210)

Free Cash Flow

                 

200,820

                     

Cash flows from operating activities - discontinued operations

                 

4,287

Cash flows from investing activities - discontinued operations

                 

(14,051)

Free Cash Flow - discontinued operations

                 

(9,764)

                     

Free Cash Flow - combined

                 

191,056