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International Game Technology PLC Reports Second Quarter 2021 Results

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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) 392-7452
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)













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

International Game Technology PLC

NYSE:IGT

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Casinos (except Casino Hotels)
Arts, Entertainment, and Recreation
Link
Consumer Services, Casinos/Gaming, Arts, Entertainment, and Recreation, Casinos (except Casino Hotels)
United Kingdom
66 Seymour Street

About IGT

a winning combination. gtech, the largest global lottery business, and igt, the world leader in the gaming equipment space, have merged to create the world's leading end-to-end gaming company. by adopting the igt name and gtech's visual identity, we've melded two iconic brands into one. together, we're uniquely positioned to provide the government-sponsored and commercial gaming industry with proven solutions across the entire continuum of products and channels.