International Game Technology PLC Reports Second Quarter 2021 Results
08/03/2021 - 06:40 AM
LONDON , Aug. 3, 2021 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the second quarter ended June 30, 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.
"Impressive second quarter results highlight the vitality of our portfolio," said Marco Sala , CEO of IGT . "Outstanding Lottery performance, the progressive recovery in land-based Gaming, and strong increase in Digital & Betting activities drove substantial revenue and profit growth, delivering Adjusted EBITDA that is among the highest recorded in a quarterly period. On the strength of the first half performance, we are raising our outlook for the year and now expect to exceed 2019 levels for key financial metrics this year."
"Record free cash flow from continuing operations and proceeds from recent asset sales fueled significant debt reduction in the first half," said Max Chiara , CFO of IGT . "Our leverage profile improved substantially, reaching pre-pandemic levels well ahead of expectations, and improving our credit profile and overall financial condition."
Overview of Consolidated Second Quarter 2021 Results
Quarter Ended
Y/Y Change (%)
Constant Currency Change (%)
All amounts from continuing operations
June 30,
2021
2020
($ in millions, unless otherwise noted)
GAAP Financials:
Revenue
Global Lottery
725
460
58%
50%
Global Gaming
316
140
126%
120%
Total revenue
1,041
600
74%
67%
Operating income (loss)
Global Lottery
300
107
180%
163%
Global Gaming
10
(111)
NA
NA
Corporate support expense
(26)
(26)
—%
11%
Other(1)
(40)
(43)
7%
7%
Total operating income (loss)
244
(72)
NA
Net cash provided by operating activities
249
127
95%
Cash and cash equivalents
639
1,338
(52)%
Non-GAAP Financial Measures:
Adjusted EBITDA
Global Lottery
414
221
87%
76%
Global Gaming
49
(36)
NA
NA
Corporate support expense
(21)
(20)
(2)%
12%
Total Adjusted EBITDA
442
164
170%
157%
Free cash flow
176
73
140%
Net debt(2)
6,312
7,297
(13)%
(1) Primarily includes purchase price amortization
(2) Historical net debt recast to only reflect continuing operations
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:
Global Lottery delivers second-highest revenue and profit levels in segment history, driven by strong player demand Achieved approximately two-thirds of $200M+ 2021 OPtiMa savings targets year-to-date Global Gaming returns to profitability as progressive recovery continues; Digital & Betting revenue increases 41% in the quarter Growing adoption of IGT's best-in-class cashless solutions, most recently with Agua Caliente Casinos and Washington's Lottery Completed sale of Italy B2C gaming businesses; net proceeds used to partially fund full redemption, by make-whole call, of 4.750% Senior Secured Euro Notes due February 2023 Announced 25th anniversary of Wheel of Fortune® Slots; deployed Wheel of Fortune® -themed Historical Horse Racing games at Churchill Downs in Kentucky Signed seven-year systems contract with Maryland Lottery connecting 11,500 Video Lottery Terminals and Electronic Table Games across six casinos Expanded availability of PeakSlant49™ cabinet, with high-performing core video content, under purchase model Recently won "Casino Supplier of the Year" award in 2021 Global Gaming Awards London Financial highlights:
Consolidated revenue of $1.0 billion , up 74% from the prior year
Global Lottery revenue rises 58% to $725 million , driven by 35% growth in same-store sales Global Gaming revenue totals $316 million , up 126% from the prior year and 19% sequentially on continued recovery trends Operating income of $244 million compared to operating loss of $72 million in the prior year
High profit flow-through of Global Lottery same-store sales growth Mix of high-margin Italy lottery sales Disciplined cost management and benefits from OPtiMa structural cost-savings program Net interest expense of $91 million compared to $96 million in the prior year, driven by lower average debt balances and interest rates
Provision for income taxes of $32 million compared to a benefit from income taxes of $3 million in the prior year, on significant increase in operating profitability
Net loss of $39 million versus net loss of $268 million in the prior-year period, primarily driven by significant increase in revenue
Adjusted EBITDA of $442 million compared to $164 million in the prior-year period; Global Lottery delivers near record segment-level Adjusted EBITDA
Net debt of $6.3 billion , down over $1.0 billion from $7.3 billion at December 31, 2020; Net debt leverage of 4.3x, down from 6.4x at December 31, 2020, driven by strong financial results, cash flow generation, and proceeds from sale of Italy gaming businesses
Cash and Liquidity Update
Total liquidity of $1.9 billion as of June 30, 2021 ; $639 million in unrestricted cash and $1.3 billion in additional borrowing capacity $748 million in net cash proceeds from sale of Italy gaming businesses used to fund redemption of 4.750% Euro bonds due 2023 Executed amendment and extension of Term Loan Facility in July, increasing liquidity, extending debt maturities, and lowering interest costs Outlook
Second half 2021 revenue and operating income from continuing operations of $2.0 billion and $300 million , respectfully, meaningfully higher than prior year Global Lottery returns to more normal growth rates applied to higher levels of consumption; third quarter-to-date same-store sales up double digits versus 2019 Global Gaming progressive recovery continues Second half 2021 compared to first half 2021 Revenue, operating income, and cash from operations lower on normalization of lottery growth trends Capital expenditures of approximately $175 million , sequentially accelerating to support growth; full year capital expenditures below 2019 levels Depreciation and amortization stable Does not factor in any additional impact from COVID-19 restrictions Conference Call and Webcast
August 3, 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: +1 866 968-0344 Outside the US/Canada toll-free number: +1 873 415-0264 Conference ID/confirmation code: 8589154 A telephone replay of the call will be available for one week US/Canada replay number: +1 800 585-8367 Outside the US/Canada replay number: +1 416 621-4642 ID/Confirmation code: 8589154 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. Adjusted EBITDA – discontinued operations represents income (loss) from discontinued operations (a GAAP measure) before income taxes, interest expense, depreciation and amortization, and gain on sale of discontinued operations. Adjusted EBITDA – combined represents Total Adjusted EBITDA plus Adjusted EBITDA – discontinued operations. 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.
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. Prior to the disposal of the Italian B2C gaming businesses in the second quarter of 2021, management calculated the Net debt leverage ratio as the ratio of Net debt as of a particular balance sheet date to the LTM of Adjusted EBITDA – combined prior to such date. Management believes that Net debt leverage is a useful measure to assess our 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. 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) 392-7452Francesco Luti , +39 3485475493; for Italian media inquiriesJames Hurley , Investor Relations, +1 (401) 392-7190
Select Performance and KPI data: ($ in millions, unless otherwise noted)
Sequential
Constant
Change as
Q2'21
Y/Y Change
(%)
Currency
Reported
GLOBAL LOTTERY
Q2'20
Change (%)(1)
Q1'21
(%)
Revenue
Service
Operating and facilities management contracts
675
416
62%
55%
695
(3)%
Upfront license fee amortization
(53)
(48)
(9)%
—%
(52)
(1)%
Operating and facilities management contracts, net
623
367
70%
62%
643
(3)%
Other
79
70
12%
4%
83
(4)%
Total service revenue
702
438
60%
53%
725
(3)%
Product sales
23
22
6%
3%
23
(1)%
Total revenue
725
460
58%
50%
749
(3)%
Operating income
300
107
180%
163%
337
(11)%
Adjusted EBITDA(1)
414
221
87%
76%
447
(7)%
Global same-store sales growth (%)
Instant ticket & draw games
34.9%
(7.1)%
27.4%
Multi-jurisdiction jackpots
28.8%
(24.2)%
94.7%
Total
34.5%
(8.5)%
32.4%
North America & Rest of world same-store sales growth (%)
Instant ticket & draw games
20.5%
3.5%
20.9%
Multi-jurisdiction jackpots
28.8%
(24.2)%
94.7%
Total
21.1%
0.6%
27.8%
Italy same-store sales growth (%)
Instant ticket & draw games
115.2%
(40.5)%
52.2%
(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein
Sequential
Constant
Change as
Q2'21
Y/Y Change
(%)
Currency
Reported
GLOBAL GAMING
Q2'20
Change (%)(1)
Q1'21
(%)
Revenue
Service
Terminal
108
25
325%
323%
90
20%
Systems, software, and other
91
59
54%
50%
86
6%
Total service revenue
199
84
136%
132%
175
13%
Product sales
Terminal
86
44
97%
91%
62
40%
Other
31
12
160%
147%
29
7%
Total product sales revenue
117
56
110%
103%
91
29%
Total revenue
316
140
126%
120%
266
19%
Operating income (loss)
10
(111)
NA
NA
(19)
NA
Adjusted EBITDA(1)
49
(36)
NA
NA
19
158%
Installed base units
Casino
47,964
48,704
(2)%
48,230
Casino - L/T lease (2)
1,136
930
22%
1,135
Total installed base units
49,100
49,634
(1)%
49,365
Installed base units (by geography)
US & Canada
33,820
34,800
(3)%
34,138
Rest of world
15,280
14,834
3%
15,227
Total installed base units
49,100
49,634
(1)%
49,365
Yields (by geography)(3) , in absolute $
US & Canada
$38.41
$8.69
342%
$32.27
Rest of world
$4.03
$0.49
NM
$2.58
Total yields
$27.49
$6.21
343%
$22.93
Global machine units sold
New/expansion
1,167
1,443
(19)%
884
Replacement
5,168
1,538
236%
3,521
Total machine units sold
6,335
2,981
113%
4,405
US & Canada machine units sold
New/expansion
643
1,382
(53)%
620
Replacement
3,485
1,330
162%
2,276
Total machine units sold
4,128
2,712
52%
2,896
(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; comparability on a Y/Y basis hindered due to fewer active units
Sequential
Constant
Change as
Q2'21
Y/Y Change
(%)
Currency
Reported
GLOBAL GAMING (Continued)
Q2'20
Change (%)(1)
Q1'21
(%)
Rest of world machine units sold
New/expansion
524
61
NM
264
Replacement
1,683
208
NM
1,245
Total machine units sold
2,207
269
NM
1,509
Average Selling Price (ASP), in absolute $
US & Canada
$13,900
$14,700
(5)%
$13,900
Rest of world
$12,700
$14,000
(9)%
$13,700
Total ASP
$13,400
$14,600
(8)%
$13,800
Gaming Systems Revenue
39
23
66%
30
CONSOLIDATED
Revenue (by geography)
US & Canada
561
369
52%
51%
542
4%
Italy
353
146
141%
122%
348
1%
Rest of world
127
84
51%
40%
124
2%
Total revenue
1,041
600
74%
67%
1,015
3%
Digital & Betting Revenue (2)
61
44
41%
34%
58
5%
(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein
(2) Included within consolidated revenue
International Game Technology PLC
Consolidated Statements of Operations
($ in millions and shares in thousands, except per share amounts)
Unaudited
For the three months ended
For the six months ended
June 30,
June 30,
2021
2020
2021
2020
Service revenue
901
522
1,802
1,178
Product sales
140
78
254
236
Total revenue
1,041
600
2,055
1,414
Cost of services
438
361
880
776
Cost of product sales
88
67
160
160
Selling, general and administrative
207
168
393
332
Research and development
61
31
116
92
Goodwill impairment
—
—
—
296
Restructuring
—
43
—
47
Other operating expense
1
1
1
2
Total operating expenses
796
672
1,551
1,704
Operating income (loss)
244
(72)
504
(290)
Interest expense, net
91
96
185
196
Foreign exchange loss (gain), net
90
74
(55)
4
Other expense, net
70
28
94
29
Total non-operating expenses
251
198
224
229
(Loss) income from continuing operations before provision for (benefit from) income taxes
(7)
(271)
280
(519)
Provision for (benefit from) income taxes
32
(3)
181
(4)
(Loss) income from continuing operations
(39)
(268)
100
(515)
Income (loss) from discontinued operations, net of tax
13
(15)
24
(1)
Gain on sale of discontinued operations, net of tax
391
—
391
—
Income (loss) from discontinued operations
404
(15)
415
(1)
Net income (loss)
365
(282)
514
(516)
Less: Net income attributable to non-controlling interests from continuing operations
60
—
119
15
Less: Net loss attributable to non-controlling interests from discontinued operations
—
(3)
(2)
(4)
Net income (loss) attributable to IGT PLC
306
(280)
397
(528)
Net loss from continuing operations attributable to IGT PLC per common share - basic & diluted
(0.48)
(1.31)
(0.09)
(2.59)
Net income (loss) attributable to IGT PLC per common share - basic & diluted
1.49
(1.37)
1.94
(2.58)
Weighted-average shares - basic & diluted
205,096
204,748
204,977
204,591
International Game Technology PLC
Consolidated Balance Sheets
($ in millions)
Unaudited
June 30,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
639
907
Restricted cash and cash equivalents
180
199
Trade and other receivables, net
974
846
Inventories
167
169
Other current assets
627
480
Assets held for sale
4
839
Total current assets
2,591
3,440
Systems, equipment and other assets related to contracts, net
990
1,068
Property, plant and equipment, net
122
132
Operating lease right-of-use assets
273
288
Goodwill
4,688
4,713
Intangible assets, net
1,499
1,577
Other non-current assets
1,727
1,774
Total non-current assets
9,300
9,552
Total assets
11,891
12,992
Liabilities and shareholders' equity
Current liabilities:
Accounts payable
1,113
1,126
Current portion of long-term debt
—
393
Other current liabilities
908
847
Liabilities held for sale
—
250
Total current liabilities
2,021
2,615
Long-term debt, less current portion
6,959
7,857
Deferred income taxes
404
333
Operating lease liabilities
254
266
Other non-current liabilities
322
360
Total non-current liabilities
7,940
8,816
Total liabilities
9,961
11,431
Commitments and contingencies
IGT PLC's shareholders' equity
1,216
777
Non-controlling interests
714
784
Shareholders' equity
1,930
1,561
Total liabilities and shareholders' equity
11,891
12,992
International Game Technology PLC
Consolidated Statements of Cash Flows
($ in millions)
Unaudited
For the three months ended
For the six months ended
June 30,
June 30,
2021
2020
2021
2020
Cash flows from operating activities
Net income (loss)
365
(282)
514
(516)
Less: Income (loss) from discontinued operations
404
(15)
415
(1)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:
Foreign exchange loss (gain), net
90
74
(55)
4
Depreciation
83
88
165
173
Loss on extinguishment of debt
67
28
91
28
Amortization of upfront license fees
55
51
110
101
Amortization
50
52
100
108
Stock-based compensation
7
1
11
(12)
Debt issuance cost amortization
5
5
11
10
Goodwill impairment
—
—
—
296
Deferred income taxes
(18)
(13)
82
(37)
Other non-cash items, net
4
4
5
(1)
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:
Trade and other receivables
(48)
(192)
(134)
88
Inventories
1
10
5
(6)
Accounts payable
(91)
175
24
(19)
Other assets and liabilities
81
111
(14)
(67)
Net cash provided by operating activities from continuing operations
249
127
500
153
Net cash provided by (used in) operating activities from discontinued operations
5
40
(31)
172
Net cash provided by operating activities
254
168
469
325
Cash flows from investing activities
Capital expenditures
(73)
(54)
(121)
(140)
Proceeds from sale of assets
5
(1)
11
5
Other
2
—
1
11
Net cash used in investing activities from continuing operations
(66)
(55)
(108)
(124)
Net cash provided by (used in) investing activities from discontinued operations
743
(6)
734
(20)
Net cash provided by (used in) investing activities
677
(61)
626
(144)
Cash flows from financing activities
Principal payments on long-term debt
(1,035)
(527)
(2,422)
(959)
Payments in connection with the extinguishment of debt
(63)
(25)
(85)
(25)
Net (payments of) receipts from financial liabilities
(6)
(14)
3
36
Payments of debt issuance costs
(1)
(20)
(7)
(20)
Proceeds from long-term debt
—
750
750
750
Net proceeds from (repayments of) short-term borrowings
4
(35)
3
75
Net proceeds from (repayments of) Revolving Credit Facilities
84
(263)
516
725
Dividends paid
—
—
—
(41)
Dividends paid - non-controlling interests
(20)
(76)
(89)
(91)
Return of capital - non-controlling interests
(51)
—
(61)
—
Capital increase - non-controlling interests
1
—
11
2
Other
(5)
(4)
(10)
(6)
Net cash (used in) provided by financing activities
(1,091)
(213)
(1,392)
446
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents
(160)
(106)
(297)
627
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents
23
18
(13)
8
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period
956
1,618
1,129
894
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period
819
1,530
819
1,530
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
819
1,511
819
1,511
Supplemental Cash Flow Information
Interest paid
53
49
219
231
Income taxes paid
35
7
39
18
International Game Technology PLC
Net Debt
($ in millions)
Unaudited
June 30,
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
—
1,038
5.350% Senior Secured U.S. Dollar Notes due October 2023
61
61
3.500% Senior Secured Euro Notes due July 2024
591
610
6.500% Senior Secured U.S. Dollar Notes due February 2025
1,093
1,092
4.125% Senior Secured U.S. Dollar Notes due April 2026
743
—
3.500% Senior Secured Euro Notes due June 2026
885
913
6.250% Senior Secured U.S. Dollar Notes due January 2027
745
744
2.375% Senior Secured Euro Notes due April 2028
590
608
5.250% Senior Secured U.S. Dollar Notes due January 2029
743
743
Senior Secured Notes
5,450
6,813
Euro Term Loan Facility due January 2023
1,014
1,044
Euro Revolving Credit Facility B due July 2024
495
—
Long-term debt, less current portion
6,959
7,857
Euro Term Loan Facility due January 2023
—
393
Current portion of long-term debt
—
393
Short-term borrowings
4
—
Total debt
6,963
8,250
Less: Cash and cash equivalents
639
907
Less: Debt issuance costs, net - Revolving Credit Facilities due July 2024
12
24
Net debt
6,312
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 June 30, 2021
Business
Global
Global
Segment
Corporate
Total IGT
Lottery
Gaming
Total
and Other
PLC
Loss from continuing operations
(39)
Provision for income taxes
32
Interest expense, net
91
Foreign exchange loss, net
90
Other non-operating expense, net
70
Operating income (loss)
300
10
310
(66)
244
Depreciation
49
35
83
—
83
Amortization - service revenue (1)
55
—
55
—
55
Amortization - non-purchase accounting
9
1
10
1
11
Amortization - purchase accounting
—
—
—
39
39
Stock-based compensation
2
2
3
4
7
Other (2)
—
—
—
1
1
Adjusted EBITDA
414
49
463
(21)
442
Income from discontinued operations
404
Gain on sale of discontinued operations
(396)
Provision for income taxes
—
Interest expense, net
—
Depreciation
—
Amortization
—
Adjusted EBITDA - discontinued operations
9
Adjusted EBITDA - combined
451
Cash flows from operating activities - continuing operations
249
Capital expenditures
(73)
Free Cash Flow
176
(1) Includes amortization of upfront license fees
(2) Primarily includes transaction-related costs
International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions)
Unaudited
For the three months ended June 30, 2020
Business
Global
Global
Segment
Corporate
Total IGT
Lottery
Gaming
Total
and Other
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
Loss from discontinued operations
(15)
Benefit from income taxes
(8)
Interest expense, net
—
Depreciation
12
Amortization
14
Adjusted EBITDA - discontinued operations
4
Adjusted EBITDA - combined
167
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
International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions)
Unaudited
For the six months ended June 30, 2021
Business
Global
Global
Segment
Corporate
Total IGT
Lottery
Gaming
Total
and Other
PLC
Income from continuing operations
100
Provision for income taxes
181
Interest expense, net
185
Foreign exchange gain, net
(55)
Other non-operating expense, net
94
Operating income (loss)
637
(9)
628
(124)
504
Depreciation
96
70
166
(1)
165
Amortization - service revenue (1)
110
—
110
—
110
Amortization - non-purchase accounting
17
3
19
2
21
Amortization - purchase accounting
—
—
—
79
79
Restructuring
(1)
1
—
—
—
Stock-based compensation
2
3
5
6
11
Other (2)
—
—
—
1
1
Adjusted EBITDA
862
67
929
(37)
892
Income from discontinued operations
415
Gain on sale of discontinued operations
(396)
Provision for income taxes
4
Interest expense, net
—
Depreciation
—
Amortization
—
Adjusted EBITDA - discontinued operations
23
Adjusted EBITDA - combined
915
Cash flows from operating activities - continuing operations
500
Capital expenditures
(121)
Free Cash Flow
380
(1) Includes amortization of upfront license fees
(2) Primarily includes transaction-related costs
International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
($ in millions)
Unaudited
For the six months ended June 30, 2020
Business
Global
Global
Segment
Corporate
Total IGT
Lottery
Gaming
Total
and Other
PLC
Loss from continuing operations
(515)
Benefit from income taxes
(4)
Interest expense, net
196
Foreign exchange loss, net
4
Other non-operating expense, net
29
Operating income (loss)
251
(117)
135
(425)
(290)
Goodwill impairment
—
—
—
296
296
Depreciation
96
77
173
1
173
Amortization - service revenue (1)
101
—
101
—
101
Amortization - non-purchase accounting
14
3
17
2
19
Amortization - purchase accounting
—
—
—
89
89
Restructuring
5
36
41
6
47
Stock-based compensation
(4)
(5)
(9)
(3)
(12)
Other (2)
—
—
—
2
2
Adjusted EBITDA
464
(6)
458
(33)
425
Loss from discontinued operations
(1)
Benefit from income taxes
(4)
Interest expense, net
—
Depreciation
25
Amortization
28
Adjusted EBITDA - discontinued operations
48
Adjusted EBITDA - combined
473
Cash flows from operating activities - continuing operations
153
Capital expenditures
(140)
Free Cash Flow
13
(1) Includes amortization of upfront license fees
(2) Primarily includes transaction-related costs
The following table summarizes Adjusted EBITDA and Adjusted EBITDA - discontinued operations for the actual period end dates and LTM, and the respective net debt leverage calculations:
($ in millions)
Q3'20
Q4'20
Q1'21
Q2'21
Adjusted EBITDA
287
295
450
442
Adjusted EBITDA - discontinued operations
65
26
14
9
Adjusted EBITDA - combined
352
321
464
451
LTM Adjusted EBITDA (1)
1,078
1,008
1,196
1,474
LTM Adjusted EBITDA - combined (1)(2)
1,260
1,146
1,305
1,588
Net debt
7,243
7,319
7,069
6,312
Net debt leverage
LTM Adjusted EBITDA (3)
4.3x
LTM Adjusted EBITDA - combined (4)
5.7x
6.4x
5.4x
4.0x
(1) Adjusted EBITDA was $164 million, $261 million, and $365 million for the quarters ended June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
(2) Adjusted EBITDA - discontinued operations was $4 million, $44 million, and $69 million for the quarters ended June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
(3) Net debt / LTM Adjusted EBITDA
(4) Net debt / LTM Adjusted EBITDA - combined
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SOURCE International Game Technology PLC