International Game Technology PLC Reports Second Quarter 2020 Results

LONDON, Aug. 4, 2020 /PRNewswire/ — International Game Technology PLC («IGT») (NYSE: IGT) today reported financial results for the second…

LONDON, Aug. 4, 2020 /PRNewswire/ — International Game Technology PLC («IGT») (NYSE: IGT) today reported financial results for the second quarter ended June 30, 2020. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

«Our second quarter results reflect the intense impact of global lockdowns caused by the pandemic,» said Marco Sala, CEO of IGT. «That said, thanks to strong North America Lottery performance and our swift adoption of cost-saving and avoidance measures, we delivered better cash flow than we expected back in May. Our resilience is a direct consequence of the diversity of our global portfolio of products and solutions. The improving trends we are currently seeing are encouraging, but we remain prudent with our planning. Our new organizational structure enhances our readiness to adapt to changes in market conditions.»

«Cash generation and liquidity remain our top financial priority,» said Max Chiara, CFO of IGT. «The proactive efficiency initiatives and focused capital markets activity we executed in the quarter have us tracking ahead of plan on all key measures and we expect to deliver positive free cash flow this fiscal year. We have the resources we need to navigate the impact COVID-19 is having on our business and we are making important, strategic decisions to enhance our operational flexibility. This includes over $200 million in structural and discretionary cost savings compared to pre-pandemic levels.»

Overview of Consolidated Second Quarter 2020 Results


Quarter Ended

June 30,

Y/Y

Change

Constant

Currency

Change 


2020

2019

(%)

(%)

(In $ millions, unless otherwise noted)





Revenue

637

1,234

-48%

-48%

Operating (loss)/income

(94)

224

NM


Net (loss)/income per diluted share

($1.37)

$0.02

NM


Adjusted EBITDA

168

454

-63%

-63%

Adjusted net (loss)/income per diluted share

($0.59)

$0.44

NM


Net debt

7,289

7,637

-5%


Note: Adjusted EBITDA and adjusted net (loss)/income per diluted share are non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release.

Second quarter 2020 results reflect the impact of global COVID-19 restrictions. Revenue was down across all business segments and all primary revenue streams except for digital activities, where revenue increased 35%. Progressive easing of restrictions during the quarter and cost-saving initiatives helped mitigate impact.

Financial highlights:

Consolidated revenue of $637 million, down 48% from the prior year

  • Global gaming revenue declined 72%, driven by the closure of casinos and gaming halls, fewer unit shipments, and lower systems and software sales compared to the prior year
  • Global lottery revenue down 26% on reduced traffic to points of sale and temporary game shutdowns in Italy
  • Gaming and lottery trends improved each month as venues re-opened and restrictions eased

Operating loss of $94 million, down from income of $224 million in the prior year

  • Lower profit contribution from reduced business volumes
  • Includes $43 million in restructuring expense
  • Oklahoma strategic transaction and high-margin poker and systems sales embedded in the prior year
  • Accelerating benefit from actions taken to reduce costs

Net interest expense of $96 million compared to $104 million in the prior year

  • Capital market transactions drive lower cost of debt

Benefit from income taxes of $11 million, compared to a provision of $63 million, driven by lower pre-tax income

Net loss attributable to IGT was $280 million; adjusted net loss attributable to IGT of $121 million versus adjusted net income of $91 million in the prior year

  • Reflects operating loss and higher foreign exchange and debt extinguishment losses in the current year

Net loss per diluted share of $1.37; adjusted net loss per diluted share of $0.59 compared to adjusted net income of $0.44 in the prior year

Adjusted EBITDA of $168 million compared to $454 million in the prior-year period

Net debt of $7.29 billion improved $93 million from $7.38 billion at December 31, 2019; Net debt to LTM adjusted EBITDA of 5.52x, up from 4.31x at December 31, 2019, primarily due to lower EBITDA in the first half of 2020

Cash and Liquidity Update

  • Preserving cash and liquidity is the top financial priority
  • At June 30, 2020, liquidity totalled $2.3 billion, comprised of $1.3 billion in unrestricted cash and $1.0 billion available under revolving credit facilities

Other Developments

  • In an effort to accelerate the Company’s response to market conditions, over $200 million has been identified in structural cost savings compared to pre-pandemic levels. These savings are mostly expected in 2021 and to come from:
    • Eliminating duplicative functions and streamlining back-office activities
    • Optimizing the global investment in technology to focus on value-accretive know-how
    • Rationalizing R&D based on disciplined risk/return priorities
    • Optimizing our supply chain for maximum cost efficiency

  • Issuance of $750 million 5.25% Notes due 2029, as previously announced
    • $500 million of net proceeds used to fund a partial tender of 6.25% Notes due 2022
    • Lowest USD-denominated coupon ever issued by the Company
    • Longest duration issuance since 2015

Conference Call and Webcast

August 4, 2020, 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: 4889985
  • 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: 4889985

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 12,000 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 uncertainty of the duration, extent, and effects of the COVID-19 pandemic and the response of governments, including government-mandated property closures and travel restrictions, and other third parties on the Company’s business, results of operations, cash flows, liquidity and development prospects and 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.

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

Second Quarter Operating Segment Review

North America Gaming & Interactive

Select Financial Data



As

Constant


Key Performance Indicators



%

3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Reported

FX


3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Change 

Gaming


Total revenue

92

268

-66%

-66%


Installed base units (end of period) 





Gaming services

47

165

-72%

-72%


    Casino

18,410

21,073

-12.6%



Terminal 

22

106

-79%

-79%


    Casino – L/T lease (1)

930




Other

25

59

-58%

-58%


   Total Installed base units

19,340

21,073

-8.2%


Product sales

45

104

-56%

-56%


(1) Yield calculations should exclude these units due to 




Terminal 

40

73

-45%

-45%


      accounting treatment as sales-type leases




Other

5

30

-84%

-84%















Machine units shipped




Other


Total revenue

4

6

-30%

-30%


   New/expansion

1,382

438

215.5%


Service revenue

4

6

-35%

-35%


   Replacement 

1,344

4,223

-68.2%


Product revenue

0

0

0%

0%


   Total machines shipped

2,726

4,661

-41.5%














Total


Revenue

96

274

-65%

-65%







Operating (Loss)/Income

(20)

85

NM

NM






Revenue of $96 million, down from $274 million in the prior-year period

  • Gaming service revenue of $47 million
    • Casino closures impact terminal revenue
    • Drop in other revenue reflects multi-year poker license in the prior year
  • Gaming product sales revenue of $45 million
    • New/expansion shipments driven by 977 historical horse racing units
    • Shipped 1,344 replacement units
    • Systems revenue down from high level in the prior year

Operating loss of $20 million compared to operating income of $85 million in the prior year

  • Impact of casino closures
  • Oklahoma strategic transaction and high-margin poker and systems sales in the prior year
  • Partly offset by benefit from cost-saving initiatives

North America Lottery  

Select Financial Data



As

Constant


Key Performance Indicators



%

3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Reported

FX


3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Change 

Gaming


Total revenue

20

37

-47%

-46%


Installed base units (end of period)





Gaming services

19

37

-48%

-47%


    VLT – Government sponsored

13,559

14,215

-4.6%



Terminal 

1

25

-94%

-94%








Other

18

12

45%

48%


Lottery same-store revenue growth





Product sales

1

1

17%

17%


   Instant ticket & draw games



10.5%










   Multistate jackpots



-28.0%

Lottery


Total revenue

254

270

-6%

-6%


   Total lottery same-store revenue growth


6.2%


Lottery services

234

238

-2%

-2%








FMC

214

202

6%

6%








  Instant ticket & draw games

184

168

9%

9%








  Other services

29

34

-13%

-13%








LMA

20

36

-43%

-43%







Product sales

19

32

-40%

-40%



















Other


Total revenue

0

1

-87%

-87%







Service revenue

0

1

-87%

-87%



















Total


Revenue

273

309

-12%

-11%







Operating income

75

78

-4%

-3%






 

Revenue of $273 million, down from $309 million in the prior-year period

  • Lottery service revenue of $234 million, down 2%
    • Strong double-digit same-store revenue growth for instant ticket & draw games nearly offsets impact of mobility restrictions and lower jackpot activity
    • LMA revenue reflects reduced play levels in NJ and lower pass-through revenue
  • Gaming service revenue impacted by closure of VLT venues, partly offset by growth in Canada iGaming
  • Product sales revenue reflects lower systems revenue

Operating income of $75 million compared to $78 million in the prior year

  • Same-store revenue growth and cost-saving initiatives mostly offset lower gaming and LMA contributions

International

Select Financial Data



As

Constant


Key Performance Indicators



%

3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Reported

FX


3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Change 

Gaming


Total revenue

21

142

-85%

-85%


Installed base units (end of period)





Gaming services

12

28

-57%

-56%


    Casino

9,724

10,039

-3.1%



Terminal 

1

12

-95%

-94%


    VLT – Government sponsored

5,110

4,436

15.2%



Other

11

16

-28%

-25%


   Total installed base units

14,834

14,475

2.5%


Product sales

9

114

-92%

-92%








Terminal 

4

82

-95%

-95%


Machine units shipped






Other

6

33

-83%

-83%


   New/expansion

61

700

-91.3%










   Replacement 

208

5,863

-96.5%

Lottery


Total revenue

55

70

-22%

-19%


   Total machines shipped

269

6,563

-95.9%


Lottery services

52

67

-22%

-19%








FMC

52

67

-22%

-19%


Lottery same-store revenue growth






  Instant ticket & draw games

34

53

-35%

-33%


   Instant ticket & draw games



-28.2%



  Other services

18

14

27%

34%


   Multistate jackpots



-7.8%


Product sales

2

3

-22%

-21%


   Total lottery same-store revenue growth


-27.1%














Other


Total revenue

7

17

-55%

-48%







Service revenue

7

16

-55%

-48%







Product sales

0

0

-65%

-64%



















Total


Revenue

84

229

-64%

-62%







Operating (Loss)/Income

(20)

30

NM

NM






 

Revenue of $84 million, down from $229 million in the prior-year period

  • Lottery service revenue of $52 million
    • Same-store revenue growth impacted by mobility restrictions and shutdown of games in certain markets; trends progressively improving as restrictions ease
  • Gaming product sales of $9 million
    • Fewer unit shipments, primarily in Latin America, impact terminal revenue; VLT shipments to Sweden in prior year
    • Other product sales reflect Italy AWP upgrades in the prior year
  • Gaming service revenue lower on casino closures; installed base stable

Operating loss of $20 million compared to operating income of $30 million in the prior year

  • Impact of lower unit volume and revenue mix
  • Partly offset by benefit from cost-saving initiatives

Italy

Select Financial Data



As

Constant


Key Performance Indicators



%

3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Reported

FX


3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Change 

Gaming


Total revenue

33

153

-78%

-78%


(In € millions, except machines)





Gaming services

33

153

-78%

-78%


Lottery






Terminal 

12

136

-91%

-91%


Lotto wagers

914

2,064

-55.7%



Other

21

17

25%

27%


   10eLotto

610

1,507

-59.5%


Product sales

0

0

-98%

-98%


   Core

256

479

-46.5%










   Late numbers

21

31

-32.4%

Lottery


Total revenue

86

190

-55%

-55%


   MillionDAY

26

47

-43.6%


Lottery services

86

190

-55%

-55%








FMC

86

190

-55%

-55%


Scratch & Win wagers

1,649

2,257

-27.0%



  Instant ticket & draw games

133

238

-44%

-44%








  Other services

(47)

(48)

-1%

0%


Italy lottery revenue growth



-54.8%


Product sales

0

0

0%

0%















Gaming




Other


Total revenue

66

79

-17%

-15%


Installed base (end of period)





Service revenue

66

79

-17%

-15%


   VLT – Operator (B2C)

10,844

10,929

-0.8%


Product sales

0

0

0%

0%


   VLT – Supplier (B2B)

7,253

7,524

-3.6%










   AWP

37,138

40,268

-7.8%

Total


Revenue

184

422

-56%

-56%


   Total installed base

55,235

58,721

-5.9%


Operating (Loss)/Income

(7)

133

NM

NM















Wagers













   VLT – Operator (B2C)

150

1,427

-89.5%










   AWP

83

916

-90.9%










   Interactive wagers (gaming)

729

508

43.7%























Other













   Sports betting wagers (1)

79

252

-68.5%










   Sports betting payout (%) (1)

88.1%

82.2%

5.9 pp























(1) Includes virtual wagers and pools & horses



 

Revenue of $184 million, down from $422 million in the prior-year period

  • Lottery service revenue reflects timing of game reopening and points of sale restrictions; trends improve each month in the quarter
  • Gaming service revenue reflects closure of gaming halls
  • Interactive wagers rise 44%
  • Commercial services revenue higher, more than offset by lower sports betting activity

Operating loss of $7 million compared to operating income of $133 million in the prior year

  • Impact of COVID-19 restrictions
  • Partly offset by benefit from cost-saving initiatives

 

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited






 For the three months ended 


 June 30, 


2020


2019





Service revenue

560,338


980,031

Product sales

77,146


254,222

Total revenue

637,484


1,234,253





Cost of services

416,660


594,598

Cost of product sales

67,207


160,786

Selling, general and administrative

171,950


213,263

Research and development

31,335


65,383

Restructuring expense

43,429


2,412

Other operating expense (income), net

1,009


(25,904)

Total operating expenses

731,590


1,010,538





Operating (loss) income

(94,106)


223,715





Interest expense, net

(95,599)


(103,860)

Foreign exchange loss, net

(74,384)


(41,061)

Other (expense) income, net

(29,374)


23,493

Total non-operating expenses

(199,357)


(121,428)





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

(293,463)


102,287





(Benefit from) provision for income taxes

(11,321)


63,300





Net (loss) income

(282,142)


38,987





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

(2,526)


34,131





Net (loss) income attributable to IGT PLC

(279,616)


4,856









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

(1.37)


0.02

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

(1.37)


0.02





Weighted-average shares – basic

204,748


204,407

Weighted-average shares – diluted

204,748


204,412

 

 

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited






 For the six months ended 


 June 30, 


2020


2019





Service revenue

1,343,639


1,971,062

Product sales

234,040


408,107

Total revenue

1,577,679


2,379,169





Cost of services

938,487


1,189,925

Cost of product sales

158,306


260,971

Selling, general and administrative

335,543


415,100

Research and development

92,072


131,501

Restructuring expense

47,053


5,701

Goodwill impairment (1)

296,000


Other operating expense (income), net

1,603


(25,896)

Total operating expenses

1,869,064


1,977,302





Operating (loss) income

(291,385)


401,867





Interest expense, net

(196,261)


(206,929)

Foreign exchange (loss) gain, net

(4,024)


17,541

Other (expense) income, net

(32,760)


22,995

Total non-operating expenses

(233,045)


(166,393)





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

(524,430)


235,474





(Benefit from) provision for income taxes

(8,189)


115,992





Net (loss) income

(516,241)


119,482





Less: Net income attributable to non-controlling interests

11,663


74,372





Net (loss) income attributable to IGT PLC

(527,904)


45,110









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

(2.58)


0.22

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

(2.58)


0.22





Weighted-average shares – basic

204,591


204,309

Weighted-average shares – diluted

204,591


204,532









(1) Reduces the carrying value of the International and North America Gaming & Interactive segments by $193 million and $103 million, respectively

 

 

International Game Technology PLC

Consolidated Balance Sheets

($ thousands)

Unaudited






June 30,


December 31,


2020


2019

Assets




Current assets:




Cash and cash equivalents

1,346,741


662,934

Restricted cash and cash equivalents

183,021


231,317

Trade and other receivables, net

860,351


1,006,127

Inventories

173,022


161,790

Other current assets

574,549


571,869

Total current assets

3,137,684


2,634,037

Systems, equipment and other assets related to contracts, net

1,214,903


1,307,940

Property, plant and equipment, net

139,634


146,055

Operating lease right-of-use-assets

336,561


341,538

Goodwill

5,150,931


5,451,494

Intangible assets, net

1,722,325


1,836,002

Other non-current assets

1,791,246


1,927,524

Total non-current assets

10,355,600


11,010,553

Total assets

13,493,284


13,644,590





Liabilities and shareholders’ equity




Current liabilities:




Accounts payable

1,103,975


1,120,922

Current portion of long-term debt

358,336


462,155

Short-term borrowings

79,291


3,193

Other current liabilities

939,440


882,081

Total current liabilities

2,481,042


2,468,351

Long-term debt, less current portion

8,198,124


7,600,169

Deferred income taxes

331,919


366,822

Operating lease liabilities

309,556


310,721

Other non-current liabilities

378,515


413,549

Total non-current liabilities

9,218,114


8,691,261

Total liabilities

11,699,156


11,159,612

Commitments and contingencies




Shareholders’ equity

1,794,128


2,484,978

Total liabilities and shareholders’ equity

13,493,284


13,644,590

 

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited






 For the six months ended 



June 30,



2020


2019

Cash flows from operating activities





Net (loss) income


(516,241)


119,482

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





Goodwill impairment


296,000


Depreciation 


198,248


209,271

Amortization 


135,957


137,201

Amortization of upfront license fees


101,347


103,935

Loss on extinguishment of debt


28,277


9,628

Debt issuance cost amortization


10,297


11,523

Foreign exchange loss (gain), net


4,024


(17,541)

Loss (gain) on sale of assets


66


(63,239)

Stock-based compensation


(11,806)


12,502

Deferred income taxes


(36,705)


6,515

Other non-cash items, net


2,504


31,392

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





Trade and other receivables


139,578


49,059

Inventories


(5,978)


802

Accounts payable


(5,662)


(57,317)

Other assets and liabilities


(14,807)


38,508

Net cash provided by operating activities


325,099


591,721






Cash flows from investing activities





Capital expenditures


(160,179)


(231,003)

Proceeds from sale of assets


5,185


65,429

Other


10,897


2,545

Net cash used in investing activities


(144,097)


(163,029)






Cash flows from financing activities





Proceeds from long-term debt


1,475,071


846,975

Net proceeds from short-term borrowings


74,927


19,573

Net receipts from (payments of) financial liabilities


36,468


(11,395)

Debt issuance costs paid


(19,616)


(5,934)

Payments in connection with extinguishment of debt


(25,000)


(8,598)

Dividends paid


(40,887)


(81,729)

Principal payments on long-term debt


(959,275)


(833,129)

Capital increase – non-controlling interests


2,030


1,075

Return of capital – non-controlling interests



(70,399)

Dividends paid – non-controlling interests


(91,376)


(129,394)

Other


(6,058)


(6,733)

Net cash provided by (used in) financing activities


446,284


(279,688)






Net increase in cash and cash equivalents and restricted cash and cash equivalents


627,286


149,004

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


8,225


(3,748)

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


894,251


511,777

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


1,529,762


657,033











Supplemental Cash Flow Information:





Interest paid


(230,864)


(211,591)

Income taxes paid


(17,795)


(49,777)

 

 

International Game Technology PLC

Net Debt

($ thousands)

Unaudited








June 30,


December 31,



2020


2019






6.250% Senior Secured Notes due February 2022 (1)


1,005,593


1,491,328

4.750% Senior Secured Notes due February 2023 (2)


946,301


948,382

5.350% Senior Secured Notes due October 2023(1)


60,836


60,885

3.500% Senior Secured Notes due July 2024 (2)


555,981


557,331

6.500% Senior Secured Notes due February 2025 (1)


1,090,786


1,089,959

3.500% Senior Secured Notes due June 2026 (2)


832,943


835,105

6.250% Senior Secured Notes due January 2027(1)


743,765


743,387

2.375% Senior Secured Notes due April 2028 (2)


554,908


556,403

5.250% Senior Secured Notes due January 2029 (1)


742,827


Senior Secured Notes, long-term


6,533,940


6,282,780






Term Loan Facilities due January 2023 (2)


950,265


1,317,389

Revolving Credit Facilities due July 2024 (1) (2)


713,919


Long-term debt, less current portion


8,198,124


7,600,169






4.750% Senior Secured Notes due March 2020 (2)



434,789

5.500% Senior Secured Notes due June 2020 (1)



27,366

Term Loan Facilities due January 2023 (2)


358,336


Current portion of long-term debt 


358,336


462,155






Short-term borrowings


79,291


3,193

Total debt


8,635,751


8,065,517






Less: Cash and cash equivalents


1,346,741


662,934

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



20,464






Net debt


7,289,010


7,382,119






(1) U.S. dollar-denominated debt





(2) Euro-denominated debt





Note: Net debt is a non-GAAP financial measure





 

 

International Game Technology PLC

Reconciliations of Non-GAAP Financial Measures

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

Unaudited













For the three months ended



June 30,



2020


2019






Net (loss) income


(282,142)


38,987

(Benefit from) provision for income taxes


(11,321)


63,300

Interest expense, net


95,599


103,860

Foreign exchange loss, net


74,384


41,061

Other non-operating expense (income), net


29,374


(23,493)

Operating (loss) income


(94,106)


223,715

Depreciation 


100,228


103,940

Amortization – purchase accounting


42,080


47,514

Amortization – non-purchase accounting (1)


74,602


73,249

Restructuring expense


43,429


2,412

Stock-based compensation


1,162


2,912

Other (2)


1,011


(33)

Adjusted EBITDA


168,406


453,709











Cash flows from operating activities


167,831


445,107

Capital expenditures


(60,481)


(111,818)

Free Cash Flow


107,350


333,289











Net (loss) income attributable to IGT PLC


(279,616)


4,856

Foreign exchange loss, net


74,384


41,061

Depreciation and amortization – purchase accounting


42,391


48,146

Restructuring expense


43,429


2,412

Loss on extinguishment of debt


23,260


9,628

Other (2)


1,011


(33)

Income tax impact on adjustments (3)


(26,339)


(15,374)

Adjusted net (loss) income attributable to IGT PLC


(121,480)


90,696

Weighted-average shares – diluted


204,748


204,412

Adjusted weighted-average shares – diluted (4)


204,748


204,412

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


(1.37)


0.02

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


(0.59)


0.44






(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

Reconciliations of Non-GAAP Financial Measures

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

Unaudited













For the six months ended



June 30,



2020


2019






Net (loss) income


(516,241)


119,482

(Benefit from) provision for income taxes


(8,189)


115,992

Interest expense, net


196,261


206,929

Foreign exchange loss (gain), net


4,024


(17,541)

Other non-operating expense (income), net


32,760


(22,995)

Operating (loss) income


(291,385)


401,867

Goodwill impairment


296,000


Depreciation 


198,248


209,271

Amortization – purchase accounting


88,750


95,718

Amortization – non-purchase accounting (1)


148,554


145,418

Restructuring expense


47,053


5,701

Stock-based compensation


(11,806)


12,502

Other (2)


1,505


(95)

Adjusted EBITDA


476,919


870,382











Cash flows from operating activities


325,099


591,721

Capital expenditures


(160,179)


(231,003)

Free Cash Flow


164,920


360,718











Net (loss) income attributable to IGT PLC


(527,904)


45,110

Foreign exchange loss (gain), net


4,024


(17,541)

Goodwill impairment


296,000


Depreciation and amortization – purchase accounting


89,373


96,982

Restructuring expense


47,053


5,701

Loss on extinguishment of debt


23,260


9,628

Other (2)


1,505


(95)

Income tax impact on adjustments (3)


(38,263)


(24,778)

Adjusted net (loss) income attributable to IGT PLC


(104,952)


115,007

Weighted-average shares – diluted


204,591


204,532

Adjusted weighted-average shares – diluted (4)


204,591


204,532

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


(2.58)


0.22

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


(0.51)


0.56






(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










Select Financial Data



As

Constant


Key Performance Indicators



%

3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Reported

FX


3 Month Period Ended June 30th

Q2 ’20

Q2 ’19

Change 

Gaming


Total revenue

166

601

-72%

-72%


Installed base units (end of period)





Gaming services

111

382

-71%

-71%


   Casino

28,134

31,112

-9.6%



Terminal 

37

279

-87%

-87%


   Casino – L/T lease (1)

930

NM



Other

75

103

-28%

-27%


   VLT – Government sponsored (ex-Italy)

18,669

18,651

0.1%


Product sales

55

219

-75%

-75%


   VLT – Italy supplier (B2B)

7,253

7,524

-3.6%



Terminal 

44

155

-72%

-72%


   Total installed base units

54,986

57,287

-4.0%



Other

11

64

-82%

-82%


   Yield (average gross revenue per unit per day)

$    5.41

$  27.96

-80.7%










(1) Yield calculations should exclude these units due to 


Lottery


Total revenue

394

531

-26%

-25%


      accounting treatment as sales-type leases



Lottery services

372

495

-25%

-24%








FMC

352

460

-23%

-23%


   Additional Italian network details:






  Instant ticket & draw games

352

460

-24%

-23%


   VLT – Operator (B2C)

10,844

10,929

-0.8%



  Other services

0

0

0%

0%


   AWP

37,138

40,268

-7.8%



LMA

20

36

-43%

-43%







Product sales

22

35

-39%

-38%


Machine units shipped













   New/expansion

1,443

1,138

26.8%

Other


Total revenue

77

102

-25%

-22%


   Replacement 

1,552

10,086

-84.6%


Service revenue

77

102

-25%

-23%


   Total machines shipped

2,995

11,224

-73.3%


Product sales

0

0

186%

186%















Global lottery same-store revenue growth




Consolidated


Revenue

637

1,234

-48%

-48%


   Instant ticket & draw games



0.9%


Operating (Loss)/Income:






   Multistate jackpots



-25.5%



Segment total

29

327

-91%

-91%


   Total lottery same-store revenue growth (ex-Italy)

-1.7%



Purchase accounting

(42)

(48)

-12%

-12%


   Italy lottery revenue growth



-54.8%



Corporate support

(80)

(55)

-46%

-47%








Total

(94)

224

NM

NM






 

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SOURCE International Game Technology PLC