International Game Technology PLC Reports Third Quarter 2020 Results

Rhea-AI Summary

International Game Technology PLC (IGT) reported third-quarter 2020 results showing consolidated revenue of $982 million, down 15% year-over-year, yet strong performance in the lottery segment drove a 3% revenue increase to $570 million. Adjusted net income rose 25% to $54 million despite a net loss of $128 million, primarily due to non-cash foreign exchange losses. IGT generated $220 million in positive free cash flow and improved liquidity to $2.55 billion. The company aims for over $200 million in structural savings over the next two years while managing ongoing pandemic impacts.

Positive

• 3% increase in Global Lottery revenue to $570 million.
• 25% rise in adjusted net income to $54 million.
• $220 million in positive free cash flow generated in the quarter.
• Improvement in liquidity to $2.55 billion.
• Identified initiatives for over $200 million in structural savings over two years.

Negative

• 15% decline in total revenue year-over-year.
• Global Gaming revenue decreased by 31% to $412 million.
• Net loss attributable to IGT of $128 million, including $149 million in foreign exchange losses.
• Adjusted EBITDA down 13% to $354 million.

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			8,942			11,104			20,046
Other (2)	—			432			432			2,296			2,728
Adjusted EBITDA	868,035			470,999			1,339,034			(61,576)			1,277,458
Cash flows from operating activities													788,705
Capital expenditures													(332,716)
Free Cash Flow													455,989
Net income attributable to IGT PLC													148,673
Foreign exchange gain, net													(141,609)
Depreciation and amortization - purchase accounting													145,562
Restructuring													21,853
Loss on extinguishment of debt													11,964
Other (2)													2,728
Income tax impact on adjustments (3)													(30,819)
Adjusted net income attributable to IGT PLC													158,352
Weighted-average shares - diluted													204,532
Adjusted weighted-average shares - diluted													204,532
Net income attributable to IGT PLC per common share - diluted													0.73
Adjusted net income attributable to IGT PLC per common share - diluted													0.77
(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

 

 

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SOURCE International Game Technology PLC

FAQ

What were IGT's third quarter financial results for 2020?

IGT reported total revenue of $982 million, down 15% year-over-year, with adjusted net income of $54 million.

How did COVID-19 impact IGT's financial performance in Q3 2020?

The pandemic caused a 31% decline in Global Gaming revenue but a 3% increase in Global Lottery revenue.

What is IGT's strategy for cost reduction?

IGT has identified initiatives aimed at generating over $200 million in structural savings over the next two years.

What was IGT's cash flow situation in Q3 2020?

IGT generated $220 million in positive free cash flow and improved its liquidity to $2.55 billion.

What were the main highlights from IGT's Q3 2020 results?

Key highlights include a 3% increase in lottery revenue, $220 million in free cash flow, and a focus on cost reduction.