INTERNATIONAL GAME TECHNOLOGY PLC REPORTS THIRD QUARTER 2023 RESULTS

Rhea-AI Summary

IGT reported Q3 2023 financial results with generated revenue of $1.06 billion, consistent with the prior year; operating income increased 13% to $239 million; adjusted EBITDA up 8% to $433 million; net debt leverage improved to a historic low of 3.0x. The company secured a lottery contract extension in California and Kentucky, deployed a cloud-based iLottery platform in Poland, and launched new gaming products and solutions. The full-year 2023 revenue outlook was tightened to the upper end of the previous range.

Positive

• Generated revenue of $1.06 billion, consistent with the prior year
• Operating income increased 13% to $239 million
• Adjusted EBITDA up 8% to $433 million
• Net debt leverage improved to a historic low of 3.0x

Negative

• None.

• Generated revenue of $1.06 billion, consistent with the prior year; up 6% net of Italy commercial services sale, driven by strong key performance indicators across business segments
• Operating income increased 13% to $239 million, led by double-digit growth in Global Gaming and PlayDigital; operating income margin expands 250 basis points to 22%, a record level for a third-quarter period
• Adjusted EBITDA up 8% to $433 million; Adjusted EBITDA margin improved 270 basis points to 41%
• Strong cash flow generation contributed favorably to net debt, improving net debt leverage to a historic low of 3.0x
• Tightening full-year 2023 revenue outlook to upper end of previous range; maintaining profit margin outlook

LONDON, Oct. 31, 2023 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the third quarter ended September 30, 2023. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

"The strength of our leadership positions across Global Lottery, Global Gaming, and PlayDigital is evident in our third quarter and year-to-date results," said Vince Sadusky, CEO of IGT. "Excellent momentum in key performance indicators is driving revenue growth and even stronger profit expansion. With a compelling pipeline of innovative products and solutions showcased at recent tradeshows, I am confident we can achieve our near and medium-term goals as we focus on unlocking the intrinsic value of IGT's market-leading assets."

"We are pleased with the financial results we delivered in the third quarter, including top-line growth, margin expansion, and strong cash flow generation," said Max Chiara, CFO of IGT. "Our financial position is solid with net debt leverage at a historical low point and already comfortably within our long-term target range, which coupled with no meaningful near-term debt maturities and access to significant liquidity, greatly enhances our balance sheet and creates additional financial flexibility."

Overview of Consolidated Third Quarter 2023 Results

	Quarter Ended			Y/Y Change	Constant Currency Change
	September 30,
	2023		2022
($ in millions)
GAAP Financials:
Revenue
Global Lottery	601		626	(4) %	(7) %
Global Gaming	409		379	8 %	8 %
PlayDigital	55		54	1 %	1 %
Total revenue	1,065		1,060	— %	(1) %
Operating income (loss)
Global Lottery	206		211	(2) %	(6) %
Global Gaming	93		65	42 %	43 %
PlayDigital	16		12	32 %	36 %
Corporate support expense	(38)		(36)	(7) %	(3) %
Other(1)	(37)		(41)	8 %	9 %
Total operating income	239		211	13 %	10 %
Operating income margin	22.4 %		19.9 %
Earnings per share - diluted	$0.46		$1.30	(65) %
Net cash provided by operating activities	296		236	25 %
Cash and cash equivalents	558		401	39 %
Non-GAAP Financial Measures:
Adjusted EBITDA
Global Lottery	306		310	(1) %	(6) %
Global Gaming	135		96	41 %	42 %
PlayDigital	19		16	16 %	18 %
Corporate support expense	(27)		(19)	(42) %	(35) %
Total Adjusted EBITDA	433		402	8 %	5 %
Adjusted EBITDA margin	40.7 %		38.0 %
Adjusted earnings per share - diluted	$0.52		$0.43	21 %
Free cash flow	181		163	11 %
Adjusted free cash flow	157		163	(3) %
Net debt	5,251		5,075	3 %

(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:

• Secured seven-year lottery contract extension as primary technology provider to the California Lottery through October 2033 and 10-year contract extensions as retail and iLottery systems partner to the Kentucky Lottery Corporation through July 2036
• Deployed end-to-end cloud-based iLottery platform for Totalizator Sportowy in Poland
• Showcased a broad range of gaming products and solutions reflecting IGT's commitment to performance, quality, and innovation at the Global Gaming Expo and Australasian Gaming Expo
• Launched bespoke CAESARS CLEOPATRA^® game for Caesars Palace Online Casino
• Debuted award-winning PeakBarTop™ cabinet with sports betting, providing players the market's most advanced sports betting interface for land-based casinos
• Expanded PlaySports technology footprint, including IGT's trading advisory services, with deployments at Palace Casino Resort in Mississippi and St. Croix Casino in Wisconsin
• Good progress on ESG initiatives, including publication of 2022 Sustainability Report; improved ESG scores from FTSE Russell and S&P Global Corporate Sustainability Assessment; recognized as "Best Place to Work for Disability Inclusion" by the 2023 Disability Equality Index

Financial Highlights:
Consolidated revenue of $1.06 billion, in line with the prior year; net of the Italy commercial services sale in September 2022, revenue increased 6%

• Global Lottery revenue of $601 million was down 4% year-over-year; net of the Italy commercial services sale, revenue rose 5% on strong same-store sales in Italy, with continued strength in both instant ticket and draw games, and elevated U.S. multi-state jackpot activity
• Global Gaming revenue of $409 million, up 8% from $379 million in the prior year, primarily driven by growth in the installed base and higher system and software sales
• PlayDigital revenue of $55 million, in line with the prior year, as growth in iCasino was offset by the impact of exiting certain legacy iSoftBet jurisdictions and unusually high sports betting hold levels in the prior year

Operating income of $239 million increased 13% from $211 million in the prior year, led by contributions from Global Gaming and PlayDigital; operating income margin expanded 250 basis points to 22%

• Global Lottery operating income of $206 million versus $211 million in the prior year reflects impact from sale of Italy commercial services; Italy commercial services contributed $12 million in operating income in the prior year
• Global Gaming operating income increased 42% to $93 million; operating income margin expanded 550 basis points to 23% on research and development process improvements, easing of supply chain costs, and high-margin system sales
• PlayDigital operating income up 32% to $16 million; operating income margin expanded 660 basis points to 28% on strong operating leverage
• Corporate support and other expense of $75 million was in line with the prior year as project costs in the current year offset transaction costs in the prior year

Adjusted EBITDA of $433 million rose 8% from $402 million in the prior-year period, on higher operating income and depreciation and amortization, partially offset by lower transaction expense associated with the sale of Italy commercial services in the prior year; Adjusted EBITDA margin increased to 41% from 38% in the prior year, led by margin expansion in Global Gaming and PlayDigital

Net interest expense of $73 million was in line with the prior year

Foreign exchange gain of $23 million, compared to $37 million in the prior year, on higher foreign exchange losses related to the Argentine peso in the current year; foreign exchange gain in both periods primarily driven by non-cash impact of fluctuations in the EUR/USD exchange rate on debt

Other non-operating expense, net of $1 million, versus other non-operating income, net of $139 million in the prior year, driven by gain on sale of Italy commercial services and accrual related to the DDI/Benson matter in the prior-year period

Income tax provision of $66 million, compared to $21 million in the prior year, primarily driven by settlement of a tax audit in Italy in the current year and a non-recurring benefit arising from the DDI/Benson matter in the prior year

Net income of $123 million versus $294 million in the prior-year period

Diluted earnings per share of $0.46, versus $1.30 in the prior year, primarily reflects non-operating income related to the gain on sale of Italy commercial services and non-operating expense related to the DDI/Benson Matter in the prior year; Adjusted diluted earnings per share of $0.52 compared to $0.43 in the prior year on higher operating income

Net debt of $5.3 billion compared to $5.2 billion at December 31, 2022; Net debt leverage of 3.0x versus  3.1x at December 31, 2022

Cash and Liquidity Update
Total liquidity of $1.9 billion as of September 30, 2023; $0.6 billion in unrestricted cash and $1.3 billion in additional borrowing capacity from undrawn credit facilities

Other Developments
On October 27, 2023, the Company announced a make-whole call of the remaining €112 million of 3.500% Euro Notes due 2024

The Company's Board of Directors declared a quarterly cash dividend of $0.20 per common share

• Ex-dividend date of November 28, 2023
• Record date of November 29, 2023
• Payment date of December 13, 2023

Introducing Fourth Quarter 2023 Expectations; Tightening Full-Year 2023 Revenue Outlook to Upper End of Previous Range while Maintaining Profit Margin Outlook
Fourth Quarter

• Revenue of ~$1.1B
  • Global Lottery revenue up low-to-mid single-digits versus the prior-year period
  • Global Gaming and PlayDigital revenue in line with prior-year-period
• Operating income includes ~$25M in previously communicated restructuring and project costs

Full Year

• Revenue of ~$4.3 billion
• Operating income margin of ~23%
• Cash from operations of $900 million - $1,000 million
• Capital expenditures of $400 million - $450 million

Earnings Conference Call and Webcast
October 31, 2023, at 8:00 a.m. EDT

To register to participate in the conference call, or to listen to the live audio webcast, please visit the "Events Calendar" on IGT's Investor Relations website at www.IGT.com. A replay will be available on the website following the live event.

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 2023 are calculated using the same foreign exchange rates as the corresponding 2022 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. Amounts reported in millions are computed based on amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.

About IGT
IGT (NYSE:IGT) is a global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Lotteries and Gaming Machines 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 unrivaled 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 jurisdictions around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 10,500 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 and strategies, transactions, trends, events, dividends, results of operations, and/or financial condition or measures, 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, 2022 and other documents filed or furnished 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 may affect the Company's business, including management's discussion and analysis of potential or actual impacts to operations and financial performance. 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) (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other non-operating expenses (e.g., DDI/Benson Matter, gains/losses on extinguishment and modifications of debt, etc.), net, 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 Adjusted EBITDA is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding the effects of foreign exchange, impairments, amortization from purchase accounting, discrete tax items, and other significant non-recurring adjustments that are not reflective of on-going operational activities (e.g., DDI / Benson Matter provision, gains/losses on sale of business, gains/losses on extinguishment and modifications of debt, etc.). Adjusted EPS is calculated using diluted weighted-average number of shares outstanding, including the impact of any potentially dilutive common stock equivalents that are anti-dilutive to GAAP net income (loss) per share but dilutive to Adjusted EPS. Management believes that Adjusted EPS is 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 equivalents, including cash and cash equivalents classified as held for sale, 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.

Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months ("LTM") prior to such date. Management believes that Net debt leverage is a useful measure to assess IGT's financial strength and ability to incur incremental indebtedness when making key investment decisions.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures (a component of investing cash flows) and payments on license obligations (a component of financing cash flows). 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.

Adjusted free cash flow  is a non-GAAP financial measure that represents free cash flow excluding the net of tax cash payments in connection with material litigation (e.g. DDI / Benson Matter). To enhance investor understanding of the Company's performance in comparison with the prior year, the Company excluded the net of cash impacts related to the settlement of the DDI / Benson Matter. Management believes adjusted free cash flow is a useful measure of liquidity and an additional basis for assessing IGT's performance.

Constant currency is a non-GAAP financial measure that expresses current financial data using the prior-year/period exchange rate (i.e., the exchange rate 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 06 5189 9184; for Italian media inquiries
James Hurley, Investor Relations, +1 (401) 392-7190

 

Select Performance and KPI data: ($ in millions, unless otherwise noted)
								Constant			Sequential
		Q3'23		Q3'22				Currency			Change as
GLOBAL LOTTERY						Y/Y Change		Change(1)		Q2'23	Reported
Revenue
Service
Operating and facilities management contracts		610		561		9 %		5 %		623	(2) %
Upfront license fee amortization		(47)		(44)		(9) %		— %		(47)	— %
Operating and facilities management contracts, net		563		518		9 %		5 %		576	(2) %
Other		13		70		(81) %		(80) %		13	6 %
Total service revenue		576		588		(2) %		(5) %		588	(2) %
Product sales		25		39		(36) %		(39) %		35	(30) %
Total revenue		601		626		(4) %		(7) %		624	(4) %
Operating income		206		211		(2) %		(6) %		229	(10) %
Adjusted EBITDA(1)		306		310		(1) %		(6) %		332	(8) %
Global same-store sales growth (%)
Instant ticket & draw games		0.2 %		(0.5 %)						2.3 %
Multi-jurisdiction jackpots		25.2 %		46.7 %						(5.3 %)
Total		3.1 %		3.3 %						1.8 %
North America & Rest of world same-store sales growth (%)
Instant ticket & draw games		(1.0 %)		(0.2 %)						0.8 %
Multi-jurisdiction jackpots		25.2 %		46.7 %						(5.3 %)
Total		2.8 %		4.7 %						0.2 %
Italy same-store sales growth (%)
Instant ticket & draw games		4.7 %		(1.5 %)						8.0 %

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

 

								Constant			Sequential
		Q3'23		Q3'22				Currency			Change as
GLOBAL GAMING						Y/Y Change		Change(1)		Q2'23	Reported
Revenue
Service
Terminal		136		126		7 %		10 %		128	6 %
Systems, software, and other		61		58		6 %		6 %		59	3 %
Total service revenue		197		184		7 %		9 %		188	5 %
Product sales
Terminal		143		140		2 %		2 %		139	3 %
Other		68		55		24 %		23 %		45	50 %
Total product sales revenue		212		195		8 %		8 %		185	14 %
Total revenue		409		379		8 %		8 %		373	10 %
Operating income		93		65		42 %		43 %		71	31 %
Adjusted EBITDA(1)		135		96		41 %		42 %		112	21 %
Installed base units
Casino		51,786		47,411		9 %				51,304
Casino - L/T lease(2)		841		1,116		(25) %				851
Total installed base units		52,627		48,527		8 %				52,155
Installed base units (by geography)
US & Canada		33,778		32,303		5 %				33,554
Rest of world		18,849		16,224		16 %				18,601
Total installed base units		52,627		48,527		8 %				52,155
Yields (by geography)(3), in absolute $
US & Canada		$43.23		$43.73		(1) %				$41.89
Rest of world		$7.72		$6.32		22 %				$7.44
Total yields		$30.32		$31.09		(2) %				$29.56
Global machine units sold
New/expansion		586		1,005		(42) %				1,061
Replacement		8,572		7,960		8 %				7,208
Total machine units sold		9,158		8,965		2 %				8,269
US & Canada machine units sold
New/expansion		211		959		(78) %				1,046
Replacement		6,410		5,448		18 %				5,278
Total machine units sold		6,621		6,407		3 %				6,324

(1)											Non-GAAP measures; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details
(2)											Excluded from yield calculations due to treatment as sales-type leases
(3)											Excludes Casino L/T lease units due to treatment as sales-type leases

 

								Constant			Sequential
		Q3'23		Q3'22				Currency			Change as
GLOBAL GAMING (Continued)						Y/Y Change		Change(1)		Q2'23	Reported
Rest of world machine units sold
New/expansion		375		46		NM				15
Replacement		2,162		2,512		(14) %				1,930
Total machine units sold		2,537		2,558		(1) %				1,945
Average Selling Price (ASP), in absolute $
US & Canada		$15,300		$15,900		(4) %				$16,700
Rest of world		$14,400		$13,900		4 %				$16,000
Total ASP		$15,100		$15,400		(2) %				$16,500

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

 

								Constant			Sequential
		Q3'23		Q3'22				Currency			Change as
PLAYDIGITAL						Y/Y Change		Change(1)		Q2'23	Reported
Revenue
Service		55		54		1 %		— %		59	(7) %
Product sales		1		—		NM		NM		—	NM
Total revenue		55		54		1 %		1 %		59	(7) %
Operating income		16		12		32 %		36 %		18	(16) %
Adjusted EBITDA(1)		19		16		16 %		18 %		22	(14) %
CONSOLIDATED
Revenue (by geography)
US & Canada		677		651		4 %		4 %		650	4 %
Italy		221		247		(11) %		(18) %		240	(8) %
Rest of world		166		161		3 %		2 %		164	1 %
Total revenue		1,065		1,060		— %		(1) %		1,055	1 %

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

 

International Game Technology PLC
Consolidated Statements of Operations
($ in millions and shares in thousands, except per share amounts)
Unaudited
	For the three months ended				For the nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
Service revenue	828		826		2,508		2,514
Product sales	237		234		672		618
Total revenue	1,065		1,060		3,180		3,132
Cost of services	408		415		1,208		1,263
Cost of product sales	146		149		404		388
Selling, general and administrative	217		207		645		595
Research and development	55		67		177		185
Other operating expense	—		8		—		9
Total operating expenses	826		849		2,435		2,441
Operating income	239		211		745		691
Interest expense, net	73		73		214		223
Foreign exchange (gain) loss, net	(23)		(37)		8		(59)
Other non-operating expense (income), net	1		(139)		4		8
Total non-operating expenses (income)	50		(103)		226		172
Income before provision for income taxes	189		315		519		519
Provision for income taxes	66		21		239		74
Net income	123		294		280		445
Less: Net income attributable to non-controlling interests	29		29		117		105
Net income attributable to IGT PLC	94		264		164		339
Net income attributable to IGT PLC per common share - basic	0.47		1.31		0.82		1.67
Net income attributable to IGT PLC per common share - diluted	0.46		1.30		0.81		1.66
Weighted-average shares - basic	200,464		201,593		200,078		202,669
Weighted-average shares - diluted	203,113		203,105		202,482		204,104

 

International Game Technology PLC
Consolidated Balance Sheets
($ in millions)
Unaudited
		September 30,		December 31,
		2023		2022
Assets
Current assets:
Cash and cash equivalents		558		590
Restricted cash and cash equivalents		139		150
Trade and other receivables, net		643		670
Inventories, net		323		254
Other current assets		455		467
Total current assets		2,118		2,131
Systems, equipment and other assets related to contracts, net		925		899
Property, plant and equipment, net		114		118
Operating lease right-of-use assets		233		254
Goodwill		4,476		4,482
Intangible assets, net		1,582		1,375
Other non-current assets		1,009		1,174
Total non-current assets		8,340		8,302
Total assets		10,458		10,433
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		697		731
Current portion of long-term debt		330		61
Short term borrowings		58		—
DDI / Benson Matter provision		—		220
Other current liabilities		781		837
Total current liabilities		1,866		1,848
Long-term debt, less current portion		5,421		5,690
Deferred income taxes		370		305
Operating lease liabilities		218		239
Other non-current liabilities		614		372
Total non-current liabilities		6,624		6,607
Total liabilities		8,490		8,454
Commitments and contingencies
IGT PLC's shareholders' equity		1,487		1,429
Non-controlling interests		480		550
Shareholders' equity		1,967		1,979
Total liabilities and shareholders' equity		10,458		10,433

 

International Game Technology PLC
Consolidated Statements of Cash Flows
($ in millions)
Unaudited
	For the three months ended				For the nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
Cash flows from operating activities
Net income	123		294		280		445
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	76		75		228		223
Amortization	55		48		165		142
Amortization of upfront license fees	50		46		150		146
Stock-based compensation	13		12		36		34
Amortization of debt issuance costs	3		4		10		11
Loss on extinguishment of debt	—		13		4		13
DDI / Benson Matter provision	—		120		—		270
Gain on sale of business	—		(278)		—		(278)
Deferred income taxes	6		(59)		62		(91)
Foreign exchange (gain) loss, net	(23)		(37)		8		(59)
Other non-cash items, net	(2)		4		(5)		(6)
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:
Trade and other receivables	14		(38)		20		29
Inventories	(5)		(21)		(67)		(74)
Accounts payable	(13)		105		(20)		(30)
DDI / Benson Matter provision	—		—		(220)		—
Accrued interest payable	(11)		(37)		(15)		(37)
Accrued income taxes	(12)		(70)		51		(64)
Other assets and liabilities	22		55		(46)		(53)
Net cash provided by operating activities	296		236		641		621
Cash flows from investing activities
Capital expenditures	(108)		(73)		(301)		(226)
Business acquisitions, net of cash acquired	—		(142)		—		(142)
Proceeds from sale of business, net of cash and restricted cash transferred	—		497		—		497
Proceeds from sale of assets	9		2		14		15
Other	—		1		(1)		1
Net cash (used in) provided by investing activities from continuing operations	(98)		284		(289)		145
Net cash provided by investing activities from discontinued operations	—		126		—		126
Net cash (used in) provided by investing activities	(98)		410		(289)		271
Cash flows from financing activities
Net payments on financial liabilities	(61)		(38)		(66)		(2)
Payments on license obligations	(7)		—		(15)		—
Payments of debt issuance costs	—		(10)		—		(10)
Principal payments on long-term debt	—		(597)		(462)		(597)
Net proceeds from (payments of) short-term borrowings	55		1		56		(51)
Net proceeds from (repayments of) Revolving Credit Facilities	5		(203)		478		42
Repurchases of common stock	—		(39)		—		(93)
Dividends paid	(40)		(40)		(120)		(121)
Dividends paid - non-controlling interests	(2)		(4)		(155)		(177)
Return of capital - non-controlling interests	(10)		(10)		(55)		(58)
Other	(8)		(10)		(30)		(16)
Net cash used in financing activities	(67)		(951)		(371)		(1,085)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents	130		(305)		(19)		(193)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(32)		(36)		(24)		(98)
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period	599		858		740		808
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period	697		517		697		517
Supplemental Cash Flow Information
Interest paid	88		110		236		259
Income taxes paid	72		150		126		229

 

International Game Technology PLC
Net Debt
($ in millions)
Unaudited
	September 30,		December 31,
	2023		2022
3.500% Senior Secured Euro Notes due July 2024	—		319
6.500% Senior Secured U.S. Dollar Notes due February 2025	499		697
4.125% Senior Secured U.S. Dollar Notes due April 2026	746		745
3.500% Senior Secured Euro Notes due June 2026	791		796
6.250% Senior Secured U.S. Dollar Notes due January 2027	747		746
2.375% Senior Secured Euro Notes due April 2028	527		530
5.250% Senior Secured U.S. Dollar Notes due January 2029	745		745
Senior Secured Notes	4,055		4,578
Euro Term Loan Facilities due January 2027	840		1,058
Revolving Credit Facility A due July 2027	76		55
Revolving Credit Facility B due July 2027	450		—
Long-term debt, less current portion	5,421		5,690
Euro Term Loan Facilities due January 2027	212		—
5.350% Senior Secured U.S. Dollar Notes due October 2023	—		61
3.500% Senior Secured Euro Notes due July 2024	119		—
Current portion of long-term debt	330		61
Short-term borrowings	58		—
Total debt	5,810		5,750
Less: Cash and cash equivalents	558		590
Less: Debt issuance costs, net - Revolving Credit Facility B due July 2027	—		9
Net debt	5,251		5,150

Note: Net debt is a non-GAAP financial measure

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions, except per share amounts)
Unaudited
		For the three months ended September 30, 2023
								Business
		Global		Global				Segments		Corporate		Total
		Lottery		Gaming		PlayDigital		Total		and Other		IGT PLC
Net income												123
Provision for income taxes												66
Interest expense, net												73
Foreign exchange gain, net												(23)
Other non-operating expense, net												1
Operating income (loss)		206		93		16		314		(75)		239
Depreciation		45		29		3		77		—		76
Amortization - service revenue (1)		50		—		—		50		—		50
Amortization - non-purchase accounting		5		12		—		17		1		18
Amortization - purchase accounting		—		—		—		—		37		37
Stock-based compensation		1		1		—		3		10		13
Adjusted EBITDA		306		135		19		460		(27)		433
Cash flows from operating activities												296
Capital expenditures												(108)
Payments on license obligations												(7)
Free Cash Flow												181
Payments on DDI / Benson Matter, net of cash tax benefit ($24 million)												(24)
Adjusted Free Cash Flow												157
								Pre-Tax Impact		Tax Impact (2)(3)		Net Impact
Reported EPS attributable to IGT PLC - diluted												0.46
Adjustments:
Foreign exchange gain, net								(0.12)		0.03		(0.15)
Amortization - purchase accounting								0.18		0.04		0.14
Discrete tax items								—		(0.06)		0.06
Net adjustments												0.05
Adjusted EPS attributable to IGT PLC - diluted (4)												0.52

(1)	Includes amortization of upfront license fees
(2)	Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
(3)	The reported effective tax rate was 34.8%. Adjusted for the above items, the effective tax rate was 33.8%
(4)	Adjusted EPS was calculated using weighted average shares outstanding of 203.1 million, which includes the dilutive impact of share-based payment awards

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions, except per share amounts)
Unaudited
		For the three months ended September 30, 2022
								Business
		Global		Global				Segments		Corporate		Total
		Lottery		Gaming		PlayDigital		Total		and Other		IGT PLC
Net income												294
Provision for income taxes												21
Interest expense, net												73
Foreign exchange gain, net												(37)
Other non-operating income, net												(139)
Operating income (loss)		211		65		12		287		(76)		211
Depreciation		44		27		4		75		—		75
Amortization - service revenue (1)		46		—		—		46		—		46
Amortization - non-purchase accounting		5		2		—		7		1		8
Amortization - purchase accounting		—		—		—		—		40		40
Stock-based compensation		2		2		—		5		7		12
Other		—		—		—		—		8		8
Adjusted EBITDA		310		96		16		422		(19)		402
Cash flows from operating activities												236
Capital expenditures												(73)
Free Cash Flow												163
								Pre-Tax Impact		Tax Impact (2) (3)		Net Impact
Reported EPS attributable to IGT PLC - diluted												1.30
Adjustments:
Foreign exchange gain, net								(0.18)		0.04		(0.22)
Amortization - purchase accounting								0.20		0.05		0.15
Loss on extinguishment and modifications of debt, net								0.06		—		0.06
DDI / Benson Matter provision								0.59		0.14		0.45
Gain on sale of business								(1.37)		(0.01)		(1.36)
Other (non-recurring adjustments)								0.05		—		0.04
Net adjustments												(0.87)
Adjusted EPS attributable to IGT PLC - diluted (4)												0.43

(1)	Includes amortization of upfront license fees
(2)	Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
(3)	The reported effective tax rate was 6.7%. Adjusted for the above items, the effective tax rate was 36.2%
(4)	Adjusted EPS was calculated using weighted average shares outstanding of 203.1 million, which includes the dilutive impact of share-based payment awards

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions, except per share amounts)
Unaudited
		For the nine months ended September 30, 2023
								Business
		Global		Global				Segments		Corporate		Total
		Lottery		Gaming		PlayDigital		Total		and Other		IGT PLC
Net income												280
Provision for income taxes												239
Interest expense, net												214
Foreign exchange loss, net												8
Other non-operating expense, net												4
Operating income (loss)		675		233		48		956		(211)		745
Depreciation		131		87		8		227		1		228
Amortization - service revenue (1)		149		1		—		150		—		150
Amortization - non-purchase accounting		15		32		1		48		3		50
Amortization - purchase accounting		—		—		—		—		115		115
Stock-based compensation		6		5		1		11		25		36
Adjusted EBITDA		977		358		58		1,393		(68)		1,325
Cash flows from operating activities												641
Capital expenditures												(301)
Payments on license obligations												(15)
Free Cash Flow												324
Payments on DDI / Benson Matter, net of cash tax benefit ($36 million)												184
Adjusted Free Cash Flow												509
								Pre-Tax Impact		Tax Impact (2) (3)		Net Impact
Reported EPS attributable to IGT PLC - diluted												0.81
Adjustments:
Foreign exchange loss, net								0.04		0.01		0.03
Amortization - purchase accounting								0.57		0.13		0.43
Loss on extinguishment and modifications of debt, net								0.02		—		0.02
Discrete tax items								—		(0.16)		0.16
Other (non-recurring adjustments)								0.01		—		0.01
Net adjustments												0.65
Adjusted EPS attributable to IGT PLC - diluted (4)												1.46

(1)	Includes amortization of upfront license fees
(2)	Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
(3)	The reported effective tax rate was 46.0%. Adjusted for the above items, the effective tax rate was 36.4%
(4)	Adjusted EPS was calculated using weighted average shares outstanding of 202.5 million, which includes the dilutive impact of share-based payment awards

 

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions, except per share amounts)
Unaudited
		For the nine months ended September 30, 2022
								Business
		Global		Global				Segments		Corporate		Total
		Lottery		Gaming		PlayDigital		Total		and Other		IGT PLC
Net income												445
Provision for income taxes												74
Interest expense, net												223
Foreign exchange gain, net												(59)
Other non-operating expense, net												8
Operating income (loss)		693		174		33		899		(208)		691
Depreciation		131		81		12		223		(1)		223
Amortization - service revenue (1)		146		—		—		146		—		146
Amortization - non-purchase accounting		18		5		—		23		2		25
Amortization - purchase accounting		—		—		—		—		117		117
Stock-based compensation		7		5		1		13		21		34
Other		—		—		—		—		9		9
Adjusted EBITDA		996		264		45		1,305		(60)		1,245
Cash flows from operating activities												621
Capital expenditures												(226)
Free Cash Flow												395
								Pre-Tax Impact		Tax Impact (2) (3)		Net Impact
Reported EPS attributable to IGT PLC - diluted												1.66
Adjustments:
Foreign exchange gain, net								(0.29)		0.12		(0.41)
Amortization - purchase accounting								0.57		0.14		0.43
Loss on extinguishment and modifications of debt, net								0.06		—		0.06
Discrete tax items								—		(0.15)		0.15
DDI / Benson Matter provision								1.32		0.32		1.00
Gain on sale of business								(1.36)		(0.01)		(1.35)
Other (non-recurring adjustments)								0.04		—		0.04
Net adjustments												(0.06)
Adjusted EPS attributable to IGT PLC - diluted (4)												1.60

(1)	Includes amortization of upfront license fees
(2)	Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
(3)	The reported effective tax rate was 14.3%. Adjusted for the above items, the effective tax rate was 26.9%
(4)	Adjusted EPS was calculated using weighted average shares outstanding of 204.1 million, which includes the dilutive impact of share-based payment awards

 

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SOURCE International Game Technology PLC

FAQ

What were IGT's Q3 2023 revenue and operating income?

IGT's Q3 2023 revenue was $1.06 billion, consistent with the prior year. The operating income increased 13% to $239 million.

What was IGT's adjusted EBITDA in Q3 2023?

IGT's adjusted EBITDA in Q3 2023 was $433 million, up 8% from the prior year.

What was IGT's net debt leverage in Q3 2023?

IGT's net debt leverage in Q3 2023 improved to a historic low of 3.0x.

What contracts did IGT secure in Q3 2023?

IGT secured a seven-year lottery contract extension as the primary technology provider to the California Lottery through October 2033 and 10-year contract extensions as retail and iLottery systems partner to the Kentucky Lottery Corporation through July 2036.

What new products and solutions did IGT launch?

IGT launched a cloud-based iLottery platform in Poland, showcased a broad range of gaming products and solutions at tradeshows, and debuted the PeakBarTop™ cabinet with sports betting.

What was IGT's full-year 2023 revenue outlook?

IGT tightened its full-year 2023 revenue outlook to the upper end of the previous range.