Release

Printer Friendly Version View printer-friendly version
<< Back
International Game Technology PLC Reports Third Quarter 2020 Results
- Consolidated revenue of $982 million driven by the strongest lottery same-store sales growth in seven quarters; sharp improvement from the second quarter across all major revenue sources
 
- Delivered $285 million in cash from operating activities and $220 million in free cash flow during the third quarter; reduced net debt by $46 million as reported and $228 million at constant currency during the third quarter
 
- Net loss of $128 million includes $149 million in foreign exchange losses, primarily non-cash; Adjusted net income was $54 million
 
- Solid lottery profit flow-through and benefit of cost-saving actions led to $354 million in Adjusted EBITDA

LONDON, Nov. 11, 2020 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported financial results for the third quarter ended September 30, 2020. Tomorrow, at 8:00 a.m. EST, management will host a conference call and webcast to present the results; access details are provided below.

"The resilience of our portfolio, particularly in lottery, and benefits from our swift cost reduction initiatives are on full display in our third quarter results," said Marco Sala, CEO of IGT. "Strong player demand and a host of compelling new games, systems, and digital solutions led to a sharp, sequential improvement in our most important markets. We continue to monitor the evolution and impact of the pandemic around the world. With a simplified organization firmly in place, we are creating a leaner, stronger IGT."

"Robust cash flow generation during the quarter and year-to-date periods have enabled us to improve our liquidity and reduce net debt," said Max Chiara, CFO of IGT. "We are on track to achieve our 2020 temporary cost-reduction targets and have identified a number of initiatives that will enable us to deliver over $200 million of structural savings over the next two years. As a result, the improvement in our profitability should support our continued focus on reducing debt."

Overview of Consolidated Third Quarter 2020 Results

 

Quarter Ended

Y/Y

Constant 

 

September 30,

Change

Currency

 

2020

 

2019

(%)

Change (%)

(In $ millions, unless otherwise noted)

         

GAAP Financials:

         

Revenue

         

 Global Lottery

570

 

552

3%

0%

    Global Gaming

412

 

601

(31)%

(34)%

Total revenue

982

 

1,153

(15)%

(17)%

           

Operating income (loss)

         

 Global Lottery

196

 

161

22%

17%

    Global Gaming

(8)

 

68

NA

NA

    Corporate support expense

(18)

 

(26)

33%

37%

    Other(1)

(42)

 

(49)

13%

13%

Total operating income

129

 

154

(16)%

(22)%

           

Net (loss) income attributable to IGT PLC

(128)

 

104

NA

 
           

Non-GAAP Financial Measures:

         

Adjusted net income attributable to IGT PLC

54

 

43

25%

 
           

Adjusted EBITDA

         

 Global Lottery

309

 

270

14%

10%

    Global Gaming

58

 

156

(63)%

(65)%

    Corporate support expense

(13)

 

(20)

32%

36%

Total Adjusted EBITDA

354

 

407

(13)%

(17)%

           

Net debt

7,243

 

7,354

(2)%

 
           

(1) Primarily includes purchase price amortization

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:

  • Delivered $220 million in positive free cash flow in the quarter; generated $610 million in cash from operations and $384 million in free cash flow year-to-date
  • Robust player demand drives highest Global Lottery same-store sales growth and Adjusted EBITDA in seven quarters
  • Signed 2-year contract extension with New York Lottery
  • Recently awarded 7-year contracts with Poland and Nebraska Lotteries following competitive bid processes
  • Sharp, sequential improvement in Global Gaming revenue and profit following acute impact of the pandemic in the second quarter
  • 41% increase in Digital & Betting revenue; launched full-service, in-house U.S. sports betting trading team in the third quarter and recently established new partnerships with Boyd Gaming and the National Basketball Association (NBA)
  • Awarded three spots on Casino Journal's esteemed "Top 20 Most Innovative Gaming Technology Products Awards," the most of any gaming supplier
  • Cashless solutions gaining traction as Resort Wallet™ launched at Resorts World Catskills

Financial highlights:

Third quarter 2020 results reflect the continued, global impact of the COVID-19 pandemic, but at a lower level compared to the second quarter

Resilient consolidated revenue of $982 million, down 15% from the prior year

  • Global Lottery revenue of $570 million, up 3%, driven by double-digit growth in North America same-store sales
  • Global Gaming revenue totals $412 million, down 31% on pandemic-related closures and restrictions; positive sequential trends as casinos re-open and installed base is gradually reactivated

Operating income of $129 million, compared to $154 million in the prior year

  • Benefit of disciplined cost-saving actions
  • Global Lottery same-store sales growth translates into high profit flow-through
  • Contribution from Global Gaming impacted by $36 million higher bad debt and obsolescence charges, primarily due to the protracted pandemic slow-down in business activities

Net interest expense of $101 million compared to $103 million in the prior year

Benefit from income taxes of $27 million, compared to a provision for income taxes of $45 million, driven by lower pre-tax income and the tax impact of significant foreign exchange losses in the third quarter of 2020 versus significant foreign exchange gains in the prior-year period   

Net loss attributable to IGT was $128 million; adjusted net income attributable to IGT of $54 million compared to adjusted net income of $43 million in the prior year

  • Net loss includes $149 million in non-cash foreign exchange loss, primarily on Euro-denominated debt instruments

Net loss per diluted share of $0.62; adjusted net income per diluted share of $0.26 compared to adjusted net income per diluted share of $0.21 in the prior year

Adjusted EBITDA of $354 million compared to $407 million in the prior-year period

  • Benefit from previously mentioned cost-saving actions
  • Global Lottery achieves highest segment-level Adjusted EBITDA in seven quarters

Net debt of $7.24 billion compared to $7.38 billion at December 31, 2019; Net debt to LTM adjusted EBITDA of 5.72x up from 4.31x at December 31, 2019, due to pandemic's impact on EBITDA in the first nine months of 2020

Cash and Liquidity Update

  • At September 30, 2020, liquidity totaled $2.55 billion, an improvement from the second quarter level on strong cash flow generation; comprised of $943 million in unrestricted cash and $1.61 billion available under revolving credit facilities

Conference Call and Webcast:

November 12, 2020, 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: 9189642
  • 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: 9189642

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, 2019 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.

Consolidated Adjusted EBITDA represents net income (loss) (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. Adjusted net (loss) income attributable to IGT PLC represents Net (loss) income attributable to IGT PLC before foreign exchange, purchase accounting depreciation and amortization, restructuring expenses, loss on extinguishment of debt and certain other non-recurring items. Adjusted Diluted EPS represents Adjusted net (loss) income attributable to IGT PLC per weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the IGT PLC share-based payment awards, when inclusion is not antidilutive. Other non-recurring items are discrete, infrequent in nature and are not reflective of on-going operational activities. 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 equivalent 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.

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)

   

Q3'20

 

Q3'19

 

% Change

As Reported

 

% Change

GLOBAL LOTTERY

   

At Constant FX

Revenue

               

Service

               

   Operating and facilities management contracts

 

525

 

502

 

5%

 

1%

   Upfront license fee amortization

 

(52)

 

(48)

 

(7)%

 

0%

   Operating and facilities management contracts, net

 

474

 

454

 

4%

 

2%

   Other

 

76

 

66

 

15%

 

9%

Total service revenue

 

549

 

520

 

6%

 

3%

                 

Product sales

 

20

 

33

 

(38)%

 

(38)%

Total revenue

 

570

 

552

 

3%

 

0%

                 

Operating income

 

196

 

161

 

22%

 

17%

Adjusted EBITDA

 

309

 

270

 

14%

 

10%

                 

Global same-store sales growth (%)

               

Instant ticket & draw games

             

10.6%

Multi-jurisdiction jackpots

             

(14.3)%

Total

             

8.7%

                 

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

               

Instant ticket & draw games

             

15.0%

Multi-jurisdiction jackpots

             

(14.3)%

Total

             

12.1%

                 

Italy same-store sales growth (%)

               

Instant ticket & draw games

             

(3.5)%

                 
 
 
   

Q3'20

 

Q3'19

 

% Change

As Reported

 

% Change

GLOBAL GAMING

   

At Constant FX

Revenue

               

Service

               

   Terminal

 

193

 

276

 

(30)%

 

(33)%

   Systems, software, and other

 

138

 

126

 

10%

 

6%

Total service revenue

 

331

 

402

 

(18)%

 

(21)%

                 

Product sales

               

   Terminal

 

49

 

139

 

(64)%

 

(65)%

   Other

 

32

 

60

 

(47)%

 

(48)%

Total product sales revenue

 

81

 

199

 

(59)%

 

(60)%

Total revenue

 

412

 

601

 

(31)%

 

(34)%

                 

Operating (loss) income

 

(8)

 

68

 

NA

 

NA

Adjusted EBITDA

 

58

 

156

 

(63)%

 

(65)%

                 

Installed base units

               

Casino

 

48,280

 

51,592

 

(6)%

   

Casino - L/T lease (1)

 

1,102

 

 

NA

   

Italy VLT - Operator (B2C)

 

10,845

 

10,984

 

(1)%

   

Italy VLT - Supplier (B2B)

 

7,112

 

7,514

 

(5)%

   

Italy AWP

 

36,279

 

41,129

 

(12)%

   

Total installed base units

 

103,618

 

111,219

 

(7)%

   
                 

Installed base units (by geography)

               

US & Canada

 

34,584

 

37,260

 

(7)%

   

Rest of world

 

14,798

 

14,332

 

3%

   

  Subtotal

 

49,382

 

51,592

 

(4)%

   

Italy

 

54,236

 

59,627

 

(9)%

   

Total installed base units

 

103,618

 

111,219

 

(7)%

   
                 

Yields (by geography)(2), in absolute $

               

US & Canada

 

$26.79

 

$41.31

 

(35)%

   

Rest of world (ex-Italy)

 

$4.31

 

$8.04

 

(46)%

   

Total yields (ex-Italy)

 

$19.88

 

$32.06

 

(38)%

   
                 

Global machine units sold

               

New/expansion

 

818

 

1,001

 

(18)%

   

Replacement

 

2,853

 

9,190

 

(69)%

   

Total machine units sold

 

3,671

 

10,191

 

(64)%

   
                 

US & Canada machine units sold

               

New/expansion

 

667

 

791

 

(16)%

   

Replacement

 

2,007

 

4,150

 

(52)%

   

Total machine units sold

 

2,674

 

4,941

 

(46)%

   
                 

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

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

   

Q3'20

 

Q3'19

 

% Change

As Reported

 

% Change

GLOBAL GAMING (Continued)

   

At Constant FX

Rest of world machine units sold

               

New/expansion

 

151

 

210

 

(28)%

   

Replacement

 

846

 

5,040

 

(83)%

   

Total machine units sold

 

997

 

5,250

 

(81)%

   
                 

Average Selling Price (ASP), in absolute $

               

US & Canada

 

13,800

 

14,800

 

(7)%

   

Rest of world

 

12,100

 

11,800

 

3%

   

Total ASP

 

13,300

 

13,300

 

0%

   
                 

Gaming Systems Revenue

 

32

 

53

 

(41)%

   
                 

Italy Wagers (€)

               

VLT (B2C)

 

940

 

1,324

     

(29)%

AWP

 

711

 

877

     

(19)%

                 

Italy sports betting wagers (€)

 

237

 

227

     

5%

Italy sports betting payout (%)

 

83.0%

 

83.4%

     

0%

                 
                 
                 
                 
                 
   

Q3'20

 

Q3'19

 

% Change

As Reported

 

% Change

CONSOLIDATED

   

At Constant FX

Revenue (by geography)

               

US & Canada

 

443

 

538

 

(18)%

 

(18)%

Italy

 

416

 

402

 

3%

 

(4)%

Rest of world

 

123

 

213

 

(42)%

 

(43)%

Total revenue

 

982

 

1,153

 

(15)%

 

(17)%

                 

Digital & Betting Revenue (1)

 

104

 

74

 

41%

 

35%

                 

(1) Included within consolidated revenue

               
 

 

 

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited

               
 

For the three months ended

 

For the nine months ended

 

September 30,

 

September 30,

 

2020

 

2019

 

2020

 

2019

Service revenue

880,133

   

921,712

   

2,223,772

   

2,892,774

 

Product sales

101,377

   

231,535

   

335,417

   

639,642

 

Total revenue

981,510

   

1,153,247

   

2,559,189

   

3,532,416

 
               

Cost of services

541,118

   

575,594

   

1,479,605

   

1,765,519

 

Cost of product sales

81,516

   

136,246

   

239,822

   

397,217

 

Selling, general and administrative

180,315

   

201,416

   

515,858

   

616,516

 

Research and development

48,039

   

68,804

   

140,111

   

200,305

 

Restructuring

(98)

   

16,152

   

46,955

   

21,853

 

Goodwill impairment

   

   

296,000

   

 

Other operating expense (income), net

2,118

   

1,153

   

3,721

   

(24,743)

 

Total operating expenses

853,008

   

999,365

   

2,722,072

   

2,976,667

 
               

Operating income (loss)

128,502

   

153,882

   

(162,883)

   

555,749

 
               

Interest expense, net

(101,023)

   

(102,551)

   

(297,284)

   

(309,480)

 

Foreign exchange (loss) gain, net

(149,403)

   

124,068

   

(153,427)

   

141,609

 

Other (expense) income, net

(7,031)

   

(308)

   

(39,791)

   

22,687

 

Total non-operating (expenses) income

(257,457)

   

21,209

   

(490,502)

   

(145,184)

 
               

(Loss) income before (benefit from) provision for income taxes

(128,955)

   

175,091

   

(653,385)

   

410,565

 
               

(Benefit from) provision for income taxes

(26,617)

   

44,530

   

(34,806)

   

160,522

 
               

Net (loss) income

(102,338)

   

130,561

   

(618,579)

   

250,043

 
               

Less: Net income attributable to non-controlling interests

25,652

   

26,998

   

37,315

   

101,370

 
               

Net (loss) income attributable to IGT PLC

(127,990)

   

103,563

   

(655,894)

   

148,673

 
               

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

(0.62)

   

0.51

   

(3.20)

   

0.73

 

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

(0.62)

   

0.51

   

(3.20)

   

0.73

 
               

Weighted-average shares - basic

204,857

   

204,435

   

204,680

   

204,352

 

Weighted-average shares - diluted

204,857

   

204,528

   

204,680

   

204,532

 

 

 

International Game Technology PLC

Consolidated Balance Sheets

($ thousands)

Unaudited

       
 

September 30,

 

December 31,

 

2020

 

2019

Assets

     

Current assets:

     

Cash and cash equivalents

943,346

   

662,934

 

Restricted cash and cash equivalents

196,252

   

231,317

 

Trade and other receivables, net

828,459

   

1,006,127

 

Inventories

183,220

   

161,790

 

Other current assets

556,607

   

571,869

 

Total current assets

2,707,884

   

2,634,037

 

Systems, equipment and other assets related to contracts, net

1,180,511

   

1,307,940

 

Property, plant and equipment, net

129,636

   

146,055

 

Operating lease right-of-use assets

332,121

   

341,538

 

Goodwill

5,188,657

   

5,451,494

 

Intangible assets, net

1,672,750

   

1,836,002

 

Other non-current assets

1,779,807

   

1,927,524

 

Total non-current assets

10,283,482

   

11,010,553

 

Total assets

12,991,366

   

13,644,590

 
       

Liabilities and shareholders' equity

     

Current liabilities:

     

Accounts payable

1,116,854

   

1,120,922

 

Current portion of long-term debt

374,656

   

462,155

 

Short-term borrowings

4

   

3,193

 

Other current liabilities

1,006,658

   

882,081

 

Total current liabilities

2,498,172

   

2,468,351

 

Long-term debt, less current portion

7,821,723

   

7,600,169

 

Deferred income taxes

272,555

   

366,822

 

Operating lease liabilities

305,805

   

310,721

 

Other non-current liabilities

372,428

   

413,549

 

Total non-current liabilities

8,772,511

   

8,691,261

 

Total liabilities

11,270,683

   

11,159,612

 

Commitments and contingencies

     

Shareholders' equity

1,720,683

   

2,484,978

 

Total liabilities and shareholders' equity

12,991,366

   

13,644,590

 

 

 

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited

               
 

For the three months ended

 

For the nine months ended

 

September 30,

 

September 30,

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities

             

Net (loss) income

(102,338)

 

130,561

 

(618,579)

 

250,043

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

             

Depreciation

102,578

 

106,020

 

300,826

 

315,291

Goodwill impairment

 

 

296,000

 

Amortization

65,624

 

69,960

 

201,581

 

207,161

Amortization of upfront license fees

54,229

 

50,695

 

155,576

 

154,630

Foreign exchange loss (gain), net

149,403

 

(124,068)

 

153,427

 

(141,609)

(Gain) loss on extinguishment of debt

(10)

 

2,336

 

28,267

 

11,964

Debt issuance cost amortization

5,451

 

5,481

 

15,748

 

17,004

Loss (gain) on sale of assets

389

 

(2,085)

 

455

 

(65,324)

Stock-based compensation

1,103

 

7,544

 

(10,703)

 

20,046

Deferred income taxes

(69,815)

 

(3,925)

 

(106,520)

 

2,590

Other non-cash items, net

2,621

 

17,339

 

5,125

 

48,731

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

             

Trade and other receivables

58,553

 

(32,513)

 

198,131

 

16,546

Inventories

(3,457)

 

23,073

 

(9,435)

 

23,875

Accounts payable

(17,984)

 

57,928

 

(23,646)

 

611

Other assets and liabilities

38,867

 

(111,362)

 

24,060

 

(72,854)

Net cash provided by operating activities

285,214

 

196,984

 

610,313

 

788,705

               

Cash flows from investing activities

             

Capital expenditures

(65,668)

 

(101,713)

 

(225,847)

 

(332,716)

Proceeds from sale of assets

1,272

 

35,314

 

6,457

 

100,743

Other

1,540

 

3,581

 

12,437

 

6,126

Net cash used in investing activities

(62,856)

 

(62,818)

 

(206,953)

 

(225,847)

               

Cash flows from financing activities

             

Principal payments on long-term debt

(579,175)

 

(431,518)

 

(959,275)

 

(1,264,647)

Payments in connection with extinguishment of debt

 

 

(25,000)

 

(8,598)

Payments of debt issuance costs

(1,863)

 

(18,853)

 

(21,479)

 

(24,787)

Net payments of short-term borrowings

(82,537)

 

(54,092)

 

(7,610)

 

(34,519)

Proceeds from long-term debt

 

550,050

 

895,896

 

1,397,025

Net receipts from financial liabilities

59,230

 

12,148

 

95,698

 

753

Dividends paid

 

(40,887)

 

(40,887)

 

(122,616)

Dividends paid - non-controlling interests

(44,516)

 

(6,290)

 

(135,892)

 

(135,684)

Return of capital - non-controlling interests

 

(9,985)

 

 

(80,384)

Capital increase - non-controlling interests

1,304

 

294

 

3,334

 

1,369

Other

(2,540)

 

(1,065)

 

(8,598)

 

(7,798)

Net cash used in financing activities

(650,097)

 

(198)

 

(203,813)

 

(279,886)

               

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

(427,739)

 

133,968

 

199,547

 

282,972

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

37,575

 

(27,343)

 

45,800

 

(31,091)

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

1,529,762

 

657,033

 

894,251

 

511,777

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

1,139,598

 

763,658

 

1,139,598

 

763,658

               

Supplemental Cash Flow Information

             

Interest paid

(141,263)

 

(160,256)

 

(372,127)

 

(371,847)

Income taxes paid

(41,637)

 

(88,232)

 

(59,432)

 

(138,009)

 

 

International Game Technology PLC

Net Debt

($ thousands)

Unaudited

       
 

September 30,

 

December 31,

 

2020

 

2019

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

1,004,662

   

1,491,328

 

4.750% Senior Secured Euro Notes due February 2023

989,909

   

948,382

 

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

60,811

   

60,885

 

3.500% Senior Secured Euro Notes due July 2024

581,534

   

557,331

 

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

1,091,210

   

1,089,959

 

3.500% Senior Secured Euro Notes due June 2026

871,151

   

835,105

 

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

743,958

   

743,387

 

2.375% Senior Secured Euro Notes due April 2028

580,333

   

556,403

 

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

743,004

   

 

Senior Secured Notes

6,666,572

   

6,282,780

 
       

Euro Term Loan Facility due January 2023

994,835

   

1,317,389

 

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

160,316

   

 

Long-term debt, less current portion

7,821,723

   

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

374,656

   

 

Current portion of long-term debt

374,656

   

462,155

 
       

Short-term borrowings

4

   

3,193

 

Total debt

8,196,383

   

8,065,517

 
       

Less: Cash and cash equivalents

943,346

   

662,934

 

Less: Debt issuance costs, net - Euro Revolving Credit Facility B due July 2024

10,422

   

20,464

 
       

Net debt

7,242,615

   

7,382,119

 
       

Note: Net debt is a non-GAAP financial measure

     

 

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

                   
 

For the three months ended September 30, 2020

         

Operating

       
 

Global

 

Global

 

Segment

 

Corporate

 

Total

 

Lottery

 

Gaming

 

Total

 

and Other

 

IGT PLC

Net loss

               

(102,338)

 

Benefit from income taxes

               

(26,617)

 

Interest expense, net

               

101,023

 

Foreign exchange loss, net

               

149,403

 

Other non-operating expense, net

               

7,031

 

Operating income (loss)

195,766

   

(7,550)

   

188,216

   

(59,714)

   

128,502

 

Depreciation

51,248

   

51,007

   

102,255

   

323

   

102,578

 

Amortization - service revenue (1)

54,229

   

   

54,229

   

   

54,229

 

Amortization - non-purchase accounting

7,926

   

15,178

   

23,104

   

762

   

23,866

 

Amortization - purchase accounting

   

   

   

41,758

   

41,758

 

Restructuring

(52)

   

(428)

   

(480)

   

382

   

(98)

 

Stock-based compensation

81

   

71

   

152

   

951

   

1,103

 

Other (2)

   

   

   

2,118

   

2,118

 

Adjusted EBITDA

309,198

   

58,278

   

367,476

   

(13,420)

   

354,056

 
                   

Cash flows from operating activities

               

285,214

 

Capital expenditures

               

(65,668)

 

Free Cash Flow

               

219,546

 
                   

Net loss attributable to IGT PLC

               

(127,990)

 

Foreign exchange loss, net

               

149,403

 


Depreciation and amortization - purchase accounting

               

42,069

 

Restructuring

               

(98)

 

Gain on extinguishment of debt

               

(10)

 

Other (2)

               

2,118

 

Income tax impact on adjustments (3)

               

(11,167)

 

Adjusted net income attributable to IGT PLC

               

54,325

 

Weighted-average shares - diluted

               

204,857

 

Adjusted weighted-average shares - diluted (4)

               

205,013

 

Net loss attributable to IGT PLC per common share - diluted

               

(0.62)

 

Adjusted net income attributable to IGT PLC per common share - diluted

               

0.26

 
                   

(1) Includes amortization of upfront license fees

           

(2) Primarily includes transaction-related costs

           

(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated

(4) Adjusted weighted-average shares - diluted includes shares that were excluded from the GAAP computation, due to the net loss as reported

 

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

                   
 

For the three months ended September 30, 2019

         

Operating

       
 

Global

 

Global

 

Segment

 

Corporate

 

Total

 

Lottery

 

Gaming

 

Total

 

and Other

 

IGT PLC

Net income

               

130,561

 

Provision for income taxes

               

44,530

 

Interest expense, net

               

102,551

 

Foreign exchange gain, net

               

(124,068)

 

Other non-operating expense, net

               

308

 

Operating income (loss)

160,820

   

68,025

   

228,845

   

(74,963)

   

153,882

 

Depreciation

50,099

   

55,160

   

105,259

   

761

   

106,020

 

Amortization - service revenue (1)

50,695

   

   

50,695

   

   

50,695

 

Amortization - non-purchase accounting

6,843

   

14,415

   

21,258

   

754

   

22,012

 

Amortization - purchase accounting

   

   

   

47,948

   

47,948

 

Restructuring

211

   

16,283

   

16,494

   

(342)

   

16,152

 

Stock-based compensation

1,582

   

2,126

   

3,708

   

3,836

   

7,544

 

Other (2)

   

432

   

432

   

2,391

   

2,823

 

Adjusted EBITDA

270,250

   

156,441

   

426,691

   

(19,615)

   

407,076

 
                   

Cash flows from operating activities

               

196,984

 

Capital expenditures

               

(101,713)

 

Free Cash Flow

               

95,271

 
                   

Net income attributable to IGT PLC

               

103,563

 

Foreign exchange gain, net

               

(124,068)

 


Depreciation and amortization - purchase accounting

               

48,580

 

Restructuring

               

16,152

 

Loss on extinguishment of debt

               

2,336

 

Other (2)

               

2,823

 

Income tax impact on adjustments (3)

               

(6,041)

 

Adjusted net income attributable to IGT PLC

               

43,345

 

Weighted-average shares - diluted

               

204,528

 

Adjusted weighted-average shares - diluted 

               

204,528

 

Net income attributable to IGT PLC per common share - diluted

               

0.51

 

Adjusted net income attributable to IGT PLC per common share - diluted

               

0.21

 
                   

(1) Includes amortization of upfront license fees

           

(2) Primarily includes transaction-related costs

           

(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated

 

 

International Game Technology PLC

 

Reconciliation of Non-GAAP Financial Measures

 

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

 

Unaudited

 
                     
 

For the nine months ended September 30, 2020

 
         

Operating

         
 

Global

 

Global

 

Segment

 

Corporate

 

Total

 
 

Lottery

 

Gaming

 

Total

 

and Other

 

IGT PLC

 

Net loss

               

(618,579)

   

Benefit from income taxes

               

(34,806)

   

Interest expense, net

               

297,284

   

Foreign exchange loss, net

               

153,427

   

Other non-operating expense, net

               

39,791

   

Operating income (loss)

446,965

   

(124,787)

   

322,178

   

(485,061)

   

(162,883)

   

Goodwill impairment

   

   

   

296,000

   

296,000

   

Depreciation

147,055

   

152,670

   

299,725

   

1,101

   

300,826

   

Amortization - service revenue (1)

155,576

   

   

155,576

   

   

155,576

   

Amortization - non-purchase accounting

22,006

   

46,726

   

68,732

   

2,341

   

71,073

   

Amortization - purchase accounting

   

   

   

130,508

   

130,508

   

Restructuring

5,332

   

35,430

   

40,762

   

6,193

   

46,955

   

Stock-based compensation

(3,713)

   

(5,063)

   

(8,776)

   

(1,927)

   

(10,703)

   

Other (2)

   

   

   

3,623

   

3,623

   

Adjusted EBITDA

773,221

   

104,976

   

878,197

   

(47,222)

   

830,975

   
                     

Cash flows from operating activities

               

610,313

   

Capital expenditures

               

(225,847)

   

Free Cash Flow

               

384,466

   
                     

Net loss attributable to IGT PLC

               

(655,894)

   

Foreign exchange loss, net

               

153,427

   

Goodwill impairment

               

296,000

   


Depreciation and amortization - purchase accounting

               

131,442

   

Restructuring

               

46,955

   

Loss on extinguishment of debt

               

23,250

   

Other (2)

               

3,623

   

Income tax impact on adjustments (3)

               

(49,430)

   

Adjusted net loss attributable to IGT PLC

               

(50,627)

   

Weighted-average shares - diluted

               

204,680

   

Adjusted weighted-average shares - diluted

               

204,680

   

Net loss attributable to IGT PLC per common share - diluted

               

(3.20)

   

Adjusted net loss attributable to IGT PLC per common share - diluted

               

(0.25)

   
                     

(1) Includes amortization of upfront license fees

             

(2) Primarily includes transaction-related costs

             

(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated

 
   

 

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

                   
 

For the nine months ended September 30, 2019

         

Operating

       
 

Global

 

Global

 

Segment

 

Corporate

 

Total

 

Lottery

 

Gaming

 

Total

 

and Other

 

IGT PLC

Net income

               

250,043

 

Provision for income taxes

               

160,522

 

Interest expense, net

               

309,480

 

Foreign exchange gain, net

               

(141,609)

 

Other non-operating income, net

               

(22,687)

 

Operating income (loss)

542,913

   

239,940

   

782,853

   

(227,104)

   

555,749

 

Depreciation

147,461

   

165,490

   

312,951

   

2,340

   

315,291

 

Amortization - service revenue (1)

154,629

   

   

154,629

   

   

154,629

 

Amortization - non-purchase accounting

18,175

   

43,090

   

61,265

   

2,231

   

63,496

 

Amortization - purchase accounting

   

   

   

143,666

   

143,666

 

Restructuring

1,003

   

16,959

   

17,962

   

3,891

   

21,853

 

Stock-based compensation

3,854

   

5,088