International Game Technology PLC Reports First Quarter 2021 Results

Rhea-AI Summary

International Game Technology PLC (IGT) reported strong financial results for Q1 2021, with total revenue increasing by 25% year-over-year to $1,015 million. The Global Lottery segment achieved record sales, contributing $749 million and a 48% increase. While Global Gaming revenues declined 14% to $266 million, there was a notable recovery with a sequential increase from Q4 2020. Operating income surged to $260 million from a loss of $218 million last year. Adjusted EBITDA reached $450 million, marking a 72% increase, driven by significant operational efficiencies.

Positive

• Total revenue increased by 25% year-over-year to $1,015 million.
• Global Lottery revenue rose 48% to $749 million, achieving record same-store sales.
• Operating income improved to $260 million from a loss of $218 million in the previous year.
• Adjusted EBITDA grew 72% to $450 million, driven by operational efficiencies.
• Strong cash flow of $204 million, reversing a previous cash outflow.

Negative

• Global Gaming revenue decreased 14% year-over-year to $266 million.
• Net cash and cash equivalents dropped 48% compared to the previous year.

LONDON, May 11, 2021 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported financial results for the first quarter ended March 31, 2021. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

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

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

Overview of Consolidated First Quarter 2021 Results

All amounts from continuing operations	Quarter Ended			Y/Y Change (%)	Constant Currency Change (%)
	March 31,
	2021		2020
(In $ millions, unless otherwise noted)
GAAP Financials:
Revenue
Global Lottery	749		505	48%	42%
Global Gaming	266		310	(14)%	(16)%
Total revenue	1,015		814	25%	20%
Operating income/(loss)
Global Lottery	337		144	133%	121%
Global Gaming	(19)		(6)	(208)%	(177)%
Corporate support expense	(19)		(13)	(50)%	(32)%
Other(1)	(39)		(343)	89%	89%
Total operating income/(loss)	260		(218)	NA	NA
Net cash provided by operating activities	251		26	NM
Cash and cash equivalents	748		1,449	(48)%
Non-GAAP Financial Measures:
Adjusted EBITDA
Global Lottery	447		243	84%	74%
Global Gaming	19		31	(39)%	(35)%
Corporate support expense	(16)		(13)	(26)%	(10)%
Total Adjusted EBITDA	450		261	72%	64%
Free cash flow	204		(60)
Net debt	7,069		7,170	(1)%

(1) Primarily includes purchase price amortization and goodwill impairment

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

Key Highlights:

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

Financial highlights:

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

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

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

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

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

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

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

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

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

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

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

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

Cash and Liquidity Update

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

Other Developments

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

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

Conference Call and Webcast:

May 11, 2021, at 8:00 a.m. EDT

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

Dial-In Numbers

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

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

Comparability of Results

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

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

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

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

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

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

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

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

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

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

Select Performance and KPI data: ($ in millions, unless otherwise noted)									Constant
		Q1'21		Q1'20			Y/Y Change		Currency
GLOBAL LOTTERY							(%)		Change (%)(1)
Revenue
Service
Operating and facilities management contracts		695		454			53%		47%
Upfront license fee amortization		(52)		(48)			(9)%		—%
Operating and facilities management contracts, net		643		406			58%		52%
Other		83		66			24%		15%
Total service revenue		725		472			54%		47%
Product sales		23		32			(28)%		(30)%
Total revenue		749		505			48%		42%
Operating income		337		144			133%		121%
Adjusted EBITDA(1)		447		243			84%		74%
Global same-store sales growth (%)
Instant ticket & draw games		27.4%		(4.8)%
Multi-jurisdiction jackpots		94.7%		(30.0)%
Total		32.4%		(7.2)%
North America & Rest of world same-store sales growth (%)
Instant ticket & draw games		20.9%		0.3%
Multi-jurisdiction jackpots		94.7%		(30.0)%
Total		27.8%		(3.5)%
Italy same-store sales growth (%)
Instant ticket & draw games		52.2%		(19.8)%

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

 

								Constant
		Q1'21		Q1'20		Y/Y Change		Currency
GLOBAL GAMING						(%)		Change (%)(1)
Revenue
Service
Terminal		90		106		(16)%		(16)%
Systems, software, and other		86		77		11%		8%
Total service revenue		175		184		(5)%		(6)%
Product sales
Terminal		62		53		17%		14%
Other		29		73		(61)%		(62)%
Total product sales revenue		91		126		(28)%		(30)%
Total revenue		266		310		(14)%		(16)%
Operating loss		(19)		(6)		(208)%		(177)%
Adjusted EBITDA(1)		19		31		(39)%		(35)%
Installed base units
Casino		48,230		48,911		(1)%
Casino - L/T lease (2)		1,135		917		24%
Total installed base units		49,365		49,828		(1)%
Installed base units (by geography)
US & Canada		34,138		35,065		(3)%
Rest of world		15,227		14,763		3%
Total installed base units		49,365		49,828		(1)%
Yields (by geography)(3), in absolute $
US & Canada		$32.27		$33.72		(4)%
Rest of world (ex-Italy)		$2.58		$6.55		(61)%
Total yields (ex-Italy)		$22.93		$25.67		(11)%
Global machine units sold
New/expansion		884		119		NM
Replacement		3,521		3,563		(1)%
Total machine units sold		4,405		3,682		20%
US & Canada machine units sold
New/expansion		620		36		NM
Replacement		2,276		2,036		12%
Total machine units sold		2,896		2,072		40%

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

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

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

 

								Constant
		Q1'21		Q1'20		Y/Y Change		Currency
GLOBAL GAMING (Continued)						(%)		Change (%)(1)
Rest of world machine units sold
New/expansion		264		83		218%
Replacement		1,245		1,527		(18)%
Total  machine units sold		1,509		1,610		(6)%
Average Selling Price (ASP), in absolute $
US & Canada		$13,900		$14,300		(3)%
Rest of world		$13,700		$13,600		1%
Total ASP		$13,800		$14,000		(1)%
Gaming Systems Revenue		30		44		(32)%
CONSOLIDATED
Revenue (by geography)
US & Canada		542		447		21%		21%
Italy		348		202		72%		58%
Rest of world		124		166		(25)%		(29)%
Total revenue		1,015		814		25%		20%
Digital & Betting Revenue (2)		58		32		85%		78%

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

(2) Included within consolidated revenue

 

International Game Technology PLC
Consolidated Statements of Operations
($ in millions and shares in thousands, except per share amounts)
Unaudited
	For the three months ended
	March 31,
	2021		2020
Service revenue	901		656
Product sales	114		158
Total revenue	1,015		814
Cost of services	441		415
Cost of product sales	73		92
Selling, general and administrative	186		164
Research and development	55		61
Goodwill impairment	—		296
Restructuring	—		4
Total operating expenses	755		1,032
Operating income (loss)	260		(218)
Interest expense, net	94		100
Foreign exchange gain, net	(145)		(70)
Other expense, net	25		—
Total non-operating (income) expenses	(27)		30
Income (loss) from continuing operations before provision for (benefit from) income taxes	287		(248)
Provision for (benefit from) income taxes	148		(1)
Income (loss) from continuing operations	138		(247)
Income from discontinued operations, net of tax	11		13
Net income (loss)	149		(234)
Less: Net income attributable to non-controlling interests from continuing operations	59		15
Less: Net loss attributable to non-controlling interests from discontinued operations	(2)		(1)
Net income (loss) attributable to IGT PLC	92		(248)
Net income (loss) from continuing operations attributable to IGT PLC per common share - basic	0.39		(1.28)
Net income (loss) from continuing operations attributable to IGT PLC per common share - diluted	0.38		(1.28)
Net income (loss) attributable to IGT PLC per common share - basic	0.45		(1.21)
Net income (loss) attributable to IGT PLC per common share - diluted	0.44		(1.21)
Weighted-average shares - basic	204,857		204,435
Weighted-average shares - diluted	206,504		204,435

 

International Game Technology PLC
Consolidated Balance Sheets
($ in millions)
Unaudited
		March 31,		December 31,
		2021		2020
Assets
Current assets:
Cash and cash equivalents		748		907
Restricted cash and cash equivalents		184		199
Trade and other receivables, net		912		846
Inventories		167		169
Other current assets		489		480
Assets held for sale		808		839
Total current assets		3,308		3,440
Systems, equipment and other assets related to contracts, net		1,018		1,068
Property, plant and equipment, net		128		132
Operating lease right-of-use assets		274		288
Goodwill		4,679		4,713
Intangible assets, net		1,531		1,577
Other non-current assets		1,622		1,774
Total non-current assets		9,252		9,552
Total assets		12,560		12,992
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		1,201		1,126
Current portion of long-term debt		375		393
Other current liabilities		804		847
Liabilities held for sale		174		250
Total current liabilities		2,554		2,615
Long-term debt, less current portion		7,441		7,857
Deferred income taxes		430		333
Operating lease liabilities		256		266
Other non-current liabilities		330		360
Total non-current liabilities		8,458		8,816
Total liabilities		11,012		11,431
Commitments and contingencies
IGT PLC's shareholders' equity		835		777
Non-controlling interests		714		784
Shareholders' equity		1,548		1,561
Total liabilities and shareholders' equity		12,560		12,992

 

International Game Technology PLC
Consolidated Statements of Cash Flows
($ in millions)
Unaudited
	For the three months ended
	March 31,
	2021		2020
Cash flows from operating activities
Net income (loss)	149		(234)
Less: Income from discontinued operations, net of tax	11		13
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:
Deferred income taxes	100		(23)
Depreciation	82		86
Amortization of upfront license fees	55		50
Amortization	49		56
Loss on extinguishment of debt	24		—
Debt issuance cost amortization	6		5
Stock-based compensation	4		(13)
Goodwill impairment	—		296
Foreign exchange gain, net	(145)		(70)
Other non-cash items, net	—		(5)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Trade and other receivables	(86)		279
Inventories	4		(15)
Accounts payable	115		(195)
Other assets and liabilities	(95)		(178)
Net cash provided by operating activities from continuing operations	251		26
Net cash (used in) provided by operating activities from discontinued operations	(36)		132
Net cash provided by operating activities	215		157
Cash flows from investing activities
Capital expenditures	(48)		(85)
Proceeds from sale of assets	6		6
Other	—		11
Net cash used in investing activities from continuing operations	(42)		(69)
Net cash used in investing activities from discontinued operations	(10)		(14)
Net cash used in investing activities	(51)		(83)
Cash flows from financing activities
Principal payments on long-term debt	(1,387)		(432)
Payments in connection with the extinguishment of debt	(22)		—
Payments of debt issuance costs	(6)		—
Net proceeds from short-term borrowings	—		110
Net receipts from financial liabilities	9		51
Net proceeds from Revolving Credit Facilities	432		988
Proceeds from long-term debt	750		—
Dividends paid	—		(41)
Dividends paid - non-controlling interests	(69)		(16)
Return of capital - non-controlling interests	(11)		—
Capital increase - non-controlling interests	10		2
Other	(5)		(2)
Net cash (used in) provided by financing activities	(301)		660
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents	(137)		734
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(36)		(10)
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period	1,129		894
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period	956		1,618
Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations	24		18
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations	932		1,600
Supplemental Cash Flow Information
Interest paid	166		182
Income taxes paid	4		11

 

International Game Technology PLC
Net Debt
($ in millions)
Unaudited
		March 31,		December 31,
		2021		2020
6.250% Senior Secured U.S. Dollar Notes due February 2022		—		1,004
4.750% Senior Secured Euro Notes due February 2023		992		1,038
5.350% Senior Secured U.S. Dollar Notes due October 2023		61		61
3.500% Senior Secured Euro Notes due July 2024		583		610
6.500% Senior Secured U.S. Dollar Notes due February 2025		1,092		1,092
4.125% Senior Secured U.S. Dollar Notes due April 2026		743		—
3.500% Senior Secured Euro Notes due June 2026		873		913
6.250% Senior Secured U.S. Dollar Notes due January 2027		744		744
2.375% Senior Secured Euro Notes due April 2028		581		608
5.250% Senior Secured U.S. Dollar Notes due January 2029		743		743
Senior Secured Notes		6,413		6,813
Euro Term Loan Facility due January 2023		624		1,044
Euro Revolving Credit Facility B due July 2024		137		—
U.S. Dollar Revolving Credit Facility A due July 2024		267		—
Long-term debt, less current portion		7,441		7,857
Euro Term Loan Facility due January 2023		375		393
Current portion of long-term debt		375		393
Total debt		7,817		8,250
Less: Cash and cash equivalents		748		907
Less: Debt issuance costs, net - Revolving Credit Facilities due July 2024		—		24
Net debt		7,069		7,319
Note: Net debt is a non-GAAP financial measure

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions)
Unaudited
		For the three months ended March 31, 2021
								Business
		Global			Global			Segment			Corporate			Total IGT
		Lottery			Gaming			Total			and Other			PLC
Income from continuing operations														138
Provision for income taxes														148
Interest expense, net														94
Foreign exchange gain, net														(145)
Other non-operating expense, net														25
Operating income (loss)		337			(19)			318			(58)			260
Depreciation		47			35			83			(1)			82
Amortization - service revenue (1)		55			—			55			—			55
Amortization - non-purchase accounting		8			1			9			1			10
Amortization - purchase accounting		—			—			—			39			39
Stock-based compensation		1			1			2			2			4
Adjusted EBITDA		447			19			466			(16)			450
Cash flows from operating activities - continuing operations														251
Capital expenditures														(48)
Free Cash Flow														204

(1) Includes amortization of upfront license fees

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions)
Unaudited
		For the three months ended March 31, 2020
								Business
		Global			Global			Segment			Corporate			Total IGT
		Lottery			Gaming			Total			and Other			PLC
Loss from continuing operations														(247)
Benefit from income taxes														(1)
Interest expense, net														100
Foreign exchange gain, net														(70)
Operating income (loss)		144			(6)			138			(356)			(218)
Goodwill impairment		—			—			—			296			296
Depreciation		46			40			85			—			86
Amortization - service revenue (1)		50			—			50			—			50
Amortization - non-purchase accounting		7			1			8			1			9
Amortization - purchase accounting		—			—			—			47			47
Restructuring		—			1			1			3			4
Stock-based compensation		(4)			(5)			(9)			(4)			(13)
Adjusted EBITDA		243			31			274			(13)			261
Cash flows from operating activities - continuing operations														26
Capital expenditures														(85)
Free Cash Flow														(60)

(1) Includes amortization of upfront license fees

Recast Historical Financial Information

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

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

GLOBAL LOTTERY			Q2'20			Q3'20
Revenue
Service
Operating and facilities management contracts			416			525
Upfront license fee amortization			(48)			(52)
Operating and facilities management contracts, net			367			474
Other			70			76
Total service revenue			438			549
Product sales			22			20
Total revenue			460			570
Operating income			107			196
Adjusted EBITDA(1)			221			309
Global same-store sales growth (%)
Instant ticket & draw games			(7.1)%			10.6%
Multi-jurisdiction jackpots			(24.2)%			(14.3)%
Total			(8.5)%			8.7%
North America and Rest of world same-store sales growth (%)
Instant ticket & draw games			3.5%			15.0%
Multi-jurisdiction jackpots			(24.2)%			(14.3)%
Total			0.6%			12.1%
Italy same-store sales growth (%)
Instant ticket & draw games			(40.5)%			(3.5)%

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

 

GLOBAL GAMING			Q2'20			Q3'20
Revenue
Service
Terminal			25			81
Systems, software, and other			59			82
Total service revenue			84			163
Product sales
Terminal			44			49
Other			12			34
Total product sales revenue			56			83
Total revenue			140			247
Operating loss			(111)			(50)
Adjusted EBITDA(1)			(36)			(8)
Installed base units
Casino			48,704			48,280
Casino - L/T lease (2)			930			1,102
Total installed base units			49,634			49,382
Installed base units (by geography)
US & Canada			34,800			34,584
Rest of world			14,834			14,798
Total installed base units			49,634			49,382
Yields (by geography)(3), in absolute $
US & Canada			$8.69			$26.79
Rest of world			$0.49			$4.31
Total yields			$6.21			$19.88
Global machine units sold
New/expansion			1,443			818
Replacement			1,538			2,853
Total machine units sold			2,981			3,671
US & Canada machine units sold
New/expansion			1,382			667
Replacement			1,330			2,007
Total machine units sold			2,712			2,674
Rest of world machine units sold
New/expansion			61			151
Replacement			208			846
Total machine units sold			269			997
Average selling price (ASP), in absolute $
US & Canada			$14,700			$13,800
Rest of world			$14,000			$12,100
Total ASP			$14,600			$13,300
Gaming systems revenue			23			31

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

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

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

CONSOLIDATED			Q2'20			Q3'20
Revenue (by geography)
US & Canada			369			443
Italy			150			246
Rest of world			80			127
Total revenue			600			816
Digital & Betting Revenue (1)			43			48

(1) Included within consolidated revenue

 

International Game Technology PLC
Consolidated Statements of Operations
($ in millions and shares in thousands, except per share amounts)
Unaudited
		For the three months ended
		June 30, 2020			September 30, 2020
Service revenue		522			713
Product sales		78			104
Total revenue		600			816
Cost of services		361			418
Cost of product sales		67			83
Selling, general and administrative		168			179
Research and development		31			48
Restructuring		43			—
Other operating expense, net		1			1
Total operating expenses		672			730
Operating (loss) income		(72)			87
Interest expense, net		96			101
Foreign exchange loss, net		74			149
Other expense, net		28			6
Total non-operating expenses		198			256
Loss from continuing operations before benefit from income taxes		(271)			(170)
Benefit from income taxes		(3)			(41)
Loss from continuing operations		(268)			(129)
(Loss) income from discontinued operations, net of tax		(15)			26
Net loss		(282)			(102)
Less: Net income attributable to non-controlling interests from continuing operations		—			25
Less: Net (loss) income attributable to non-controlling interests from discontinued operations		(3)			1
Net loss attributable to IGT PLC		(280)			(128)
Net loss from continuing operations attributable to IGT PLC per common share - basic and diluted		(1.31)			(0.75)
Net loss attributable to IGT PLC per common share - basic and diluted		(1.37)			(0.62)
Weighted-average shares - basic and diluted		204,748			204,857

 

International Game Technology PLC
Consolidated Statements of Cash Flows
($ in millions)
Unaudited
	For the three months ended
		June 30, 2020		September 30, 2020
Cash flows from operating activities
Net loss		(282)		(102)
Less: (Loss) income from discontinued operations, net of tax		(15)		26
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation		88		91
Foreign exchange loss, net		74		149
Amortization		52		53
Amortization of upfront license fees		51		54
Loss on extinguishment of debt		28		—
Debt issuance cost amortization		5		5
Stock-based compensation		1		1
Deferred income taxes		(13)		(70)
Other non-cash items, net		4		1
Changes in operating assets and liabilities, excluding the effects of dispositions and acquisitions:
Trade and other receivables		(192)		81
Inventories		10		(3)
Accounts payable		175		(25)
Other assets and liabilities		111		(18)
Net cash provided by operating activities from continuing operations		127		191
Net cash provided by operating activities from discontinued operations		40		95
Net cash provided by operating activities		168		285
Cash flows from investing activities
Capital expenditures		(54)		(65)
Proceeds from sale of assets		(1)		1
Other		—		2
Net cash used in investing activities from continuing operations		(55)		(62)
Net cash used in investing activities from discontinued operations		(6)		(1)
Net cash used in investing activities		(61)		(63)
Cash flows from financing activities
Principal payments on long-term debt		(790)		(579)
Net payments of short-term borrowings		(35)		(83)
Payments in connection with the extinguishment of debt		(25)		—
Payments of debt issuance costs		(20)		(2)
Net (payments of) receipts from financial liabilities		(14)		59
Proceeds from long-term debt		750		—
Dividends paid - non-controlling interests		(76)		(45)
Capital increase - non-controlling interests		—		1
Other		(4)		(3)
Net cash used in financing activities		(213)		(650)
Net decrease in cash and cash equivalents and restricted cash and cash equivalents		(106)		(428)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		18		38
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period		1,618		1,530
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period		1,530		1,140
Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations		19		19
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations		1,511		1,121
Supplemental Cash Flow Information:
Interest paid		49		141
Income taxes paid		7		20

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions)
Unaudited
		For the three months ended June 30, 2020
		Global Lottery			Global Gaming			Business Segment Total			Corporate and Other			Total IGT PLC
Loss from continuing operations														(268)
Benefit from income taxes														(3)
Interest expense, net														96
Foreign exchange loss, net														74
Other non-operating expense, net														28
Operating income (loss)		107			(111)			(4)			(69)			(72)
Depreciation		50			37			87			—			88
Amortization - service revenue (1)		51			—			51			—			51
Amortization - non-purchase accounting		7			2			9			1			10
Amortization - purchase accounting		—			—			—			42			42
Restructuring		5			35			40			3			43
Stock-based compensation		—			—			—			1			1
Other (2)		—			—			—			1			1
Adjusted EBITDA		221			(36)			184			(20)			164
Cash flows from operating activities - continuing operations														127
Capital expenditures														(54)
Free Cash Flow														73

(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

 

		For the three months ended September 30, 2020
		Global Lottery			Global Gaming			Business Segment Total			Corporate and Other			Total IGT PLC
Loss from continuing operations														(129)
Benefit from income taxes														(41)
Interest expense, net														101
Foreign exchange loss, net														149
Other non-operating expense, net														6
Operating income (loss)		196			(50)			146			(59)			87
Depreciation		51			40			91			—			91
Amortization - service revenue (1)		54			—			54			—			54
Amortization - non-purchase accounting		8			2			10			1			11
Amortization - purchase accounting		—			—			—			42			42
Stock-based compensation		—			—			—			1			1
Other (2)		—			—			—			1			1
Adjusted EBITDA		309			(8)			301			(13)			287
Cash flows from operating activities - continuing operations														191
Capital expenditures														(65)
Free Cash Flow														126

(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

 

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SOURCE International Game Technology PLC

FAQ

What were IGT's Q1 2021 financial results?

IGT reported total revenue of $1,015 million in Q1 2021, a 25% increase from the previous year.

How did IGT's Global Lottery segment perform in Q1 2021?

The Global Lottery segment achieved record revenue of $749 million, up 48% year-over-year.

What was the operating income for IGT in Q1 2021?

IGT reported an operating income of $260 million in Q1 2021, compared to a loss of $218 million in the prior year.

What is IGT's adjusted EBITDA for Q1 2021?

IGT's adjusted EBITDA for Q1 2021 was $450 million, reflecting a 72% increase year-over-year.

How did IGT's Global Gaming segment perform in Q1 2021?

The Global Gaming segment saw a 14% decline in revenue to $266 million, despite a sequential improvement.