International Game Technology PLC : Reports Third Quarter 2019 Results

LONDON, Nov. 14, 2019 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the third quarter ended September 30, 2019. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the results; access details are provided below.

"Our core businesses achieved significant momentum in the third quarter and year-to-date periods," said Marco Sala, CEO of IGT. "Key performance indicators were solid in the quarter – gaming machine unit shipments increased 44%, while same-store revenue for draw games and instants rose 4%. Our leading positions are rooted in our focus on player-driven performance, which was on display at recent lottery and gaming trade shows and should sustain our momentum going forward."

"IGT has generated free cash flow in excess of $450 million in the first nine months," said Alberto Fornaro, CFO of IGT. "This confirms the inflection we expected to achieve this year. We are well positioned to achieve our 2019 strategic and financial goals."

Overview of Consolidated Third Quarter 2019 Results

				Constant
	Quarter Ended		Y/Y	Currency
	September 30,		Change	Change
	2019	2018	(%)	(%)
(In $ millions, unless otherwise noted)
Revenue	1,153	1,156	0%	3%
Operating income	154	200	-23%	-19%
Net income/(loss) per diluted share	$0.51	$0.11	NM
Adjusted EBITDA	407	443	- 8%	-5%
Adjusted operating income	221	257	-14%	-11%
Adjusted net income per diluted share	$0.21	$0.31	-32%
Net debt	7,354	7,570	-3%

Note: Adjusted EBITDA, adjusted operating income, and adjusted net income per diluted share are non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release.

Consolidated revenue of $1.15 billion, up 3% at constant currency

• Sharp growth in global gaming product sales
• Overcame significant Finland multi-year software sale in prior-year quarter and impact of higher machine gaming taxes in Italy

At constant currency, operating income down 19% to $154 million; adjusted operating income down 11% to $221 million

• Non-cash write-down of pre-paid social gaming-related license

Adjusted EBITDA declined 5% at constant currency to $407 million

• Differential profit flow-through on revenue mix, primarily due to high-margin Finland software transaction in prior year
• Higher R&D and SG&A expenses, primarily due to timing

Interest expense, net was $103 million, down 1% from the prior-year quarter

Income taxes of $45 million; adjusted taxes of $51 million, down from $60 million on lower pre-tax income

Net income attributable to IGT was $104 million; adjusted net income attributable to IGT was $43 million, down from $64 million in the prior year

Net income per diluted share of $0.51; adjusted net income per diluted share of $0.21 versus $0.31 in the prior year

Net debt of $7.35 billion, down 5% from $7.76 billion at December 31, 2018

Operating Segment Review

North America Gaming & Interactive

Select Financial Data						Constant		Key Performance Indicators			%
Period Ended September 30				Q3 '19	Q3 '18	FX		Period Ended September 30	Q3 '19	Q3 '18	Change
Gaming		Total revenue		253	231	10%		Installed base units (end of period)
		Gaming services		146	152	-4%		Casino	21,071	23,357	-9.8%
			Terminal	103	106	-2%
			Other	43	46	-7%		Machine units shipped
		Product sales		107	79	36%		New/expansion	791	843	-6.2%
			Terminal	74	54	37%		Replacement	4,150	2,998	38.4%
			Other	33	25	34%		Total machines shipped	4,941	3,841	28.6%
Other		Total revenue		4	0	NM
		Service revenue		4	0	NM
								Note:  Oklahoma agreement executed in Q2'19 reduces installed base by 2,223 units; no impact to units shipped
Total		Revenue		257	231	12%
		Operating income		62	45	34%

Revenue of $257 million, up 11%

• Product sales revenue of $107 million, up 36% over the prior year
• Terminal product sales rose 37%
• Significant increase in replacement units driven by strength of product offering; higher average selling price
• Lower new/expansion activity compared to the prior year
• Other product sales up 34% on high-margin, multi-year technology license
• Gaming service revenue of $146 million, compared to $152 million in the prior-year period
• Installed base stable year-over-year and sequentially on an underlying basis; yields higher
• Impact of multi-year poker contracts executed in prior periods
• Other service revenue driven by contribution from sports betting

Operating income of $62 million, up 38% compared to the prior year

• Increased unit shipments
• High-margin, multi-year technology license

North America Lottery

Select Financial Data						Constant		Key Performance Indicators			%
Period Ended September 30				Q3 '19	Q3 '18	FX		Period Ended September 30	Q3 '19	Q3 '18	Change
Gaming		Total revenue		38	37	1%		Installed base units (end of period)
		Gaming services		37	37	1%		VLT - Government sponsored	14,294	14,965	-4.5%
			Terminal	24	25	-4%
			Other	13	12	11%		Lottery same-store revenue growth
		Product sales		0	0	0%		Instant ticket & draw games			3.9%
								Multistate jackpots			-28.2%
Lottery		Total revenue		242	242	0%		Total lottery same-store revenue growth			0.0%
		Lottery services		215	225	-4%
			FMC	193	200	-4%
			Instant ticket & draw games	157	164	-4%
			Other services	36	36	0%
			LMA	23	25	-10%
		Product sales		26	17	54%
Other		Total revenue		1	0	NM
		Service revenue		1	0	NM
Total		Revenue		281	279	1%
		Operating income		51	60	-15%

Revenue of $281 million, essentially in line with the prior year

• Lottery service revenue of $215 million, compared to $225 million in the prior year
• Instant ticket & draw game same-store revenue up 3.9% driven by broad-based strength across jurisdictions
• Lower multistate jackpot activity
• Impact of Illinois contract conclusion
• Lottery product sales revenue up on strong demand for self-service vending machines
• Gaming service revenue stable

Operating income of $51 million, down from $60 million

• Impact of Illinois and lower jackpot activity (including effect on LMAs)
• Expenses related to Rhode Island contract extension

International

Select Financial Data						Constant		Key Performance Indicators			%
Period Ended September 30				Q3 '19	Q3 '18	FX		Period Ended September 30	Q3 '19	Q3 '18	Change
Gaming		Total revenue		118	98	27%		Installed base units (end of period)
		Gaming services		27	33	-12%		Casino	9,877	12,332	-19.9%
			Terminal	11	13	-13%		VLT - Government sponsored	4,455	3,675	21.2%
			Other	16	19	-11%		Total installed base units	14,332	16,007	-10.5%
		Product sales		91	65	46%
			Terminal	65	47	42%		Machine units shipped
			Other	26	18	57%		New/expansion	210	529	-60.3%
								Replacement	5,034	2,681	87.8%
Lottery		Total revenue		79	100	-19%		Total machines shipped	5,244	3,210	63.4%
		Lottery services		73	69	9%
			FMC	73	69	9%		Lottery same-store revenue growth
			Instant ticket & draw games	55	54	7%		Instant ticket & draw games			5.0%
			Other services	17	15	17%		Multistate jackpots			29.3%
		Product sales		6	31	-80%		Total lottery same-store revenue growth			6.5%
Other		Total revenue		16	18	0%
		Service revenue		16	17	2%
		Product sales		0	0	0%
Total		Revenue		213	216	3%
		Operating income		30	56	-40%

Revenue of $213 million, up 3% at constant currency

• Gaming product sales revenue of $91 million, up 46% at constant currency
• Broad-based geographic demand drives significant increase in units shipped, including 1,547 Sweden VLTs
• Other product sales up on higher systems revenue
• Gaming service revenue was $27 million
• Year-over-year and sequential declines in the installed base due to conversions in prior periods
• Lower interactive performance
• Other revenue stable
• Lottery service revenue of $73 million, up 9% at constant currency, fueled by 6.5% same-store revenue growth
• Lottery product sales reflect significant Finland software sale in the prior year

Operating income of $30 million compared to $56 million in the prior year

• Differential profit flow-through of revenue mix (high-margin Finland software sale in prior year)

Italy

Select Financial Data						Constant		Key Performance Indicators			%
Period Ended September 30				Q3 '19	Q3 '18	FX		Period Ended September 30	Q3 '19	Q3 '18	Change
Gaming		Total revenue		154	175	-7%		(In € millions, except machines)
		Gaming services		154	175	-7%		Lottery
			Terminal	138	159	-8%		Lotto wagers	1,882	1,913	-1.6%
			Other	16	16	1%		10eLotto	1,341	1,361	-1.5%
		Product sales		0	0	0%		Core	477	434	10.0%
								Late numbers	19	70	-72.3%
Lottery		Total revenue		172	184	-1%		MillionDAY	44	47	-6.4%
		Lottery services		172	184	-1%
			FMC	172	184	-1%		Scratch & Win wagers	2,197	2,179	0.8%
			Instant ticket & draw games	219	233	-1%
			Other services	(47)	(49)	1%		Italy lottery revenue growth			-1.1%
		Product sales		0	0	0%
								Gaming
Other		Total revenue		76	70	14%		Installed base (end of period)
		Service revenue		76	70	14%		VLT - Operator (B2C)	10,984	11,027	-0.4%
		Product sales		0	0	0%		VLT - Supplier (B2B)	7,514	8,094	-7.2%
								AWP	41,129	43,074	-4.5%
Total		Revenue		402	430	-1%		Total installed base	59,627	62,195	-4.1%
		Operating income		127	145	-7%
								Wagers
								VLT - Operator (B2C)	1,324	1,426	-7.1%
								AWP	877	879	-0.3%
								Interactive wagers (gaming)	492	447	10.1%
								Other
								Sports betting wagers (1)	227	225	0.8%
								Sports betting payout (%) (1)	83.4%	81.1%	2.3 pp
								(1) Includes virtual wagers and pools & horses

Revenue of $402 million, relatively stable at constant currency

• Lottery service revenue of $172 million, essentially in line with the prior year at constant currency, on stable wagers
• Gaming service revenue of $154 million compared to $175 million in the prior year
• Increased taxes on AWPs and VLTs
• Other service revenue of $76 million, up 14% at constant currency
• Growth in commercial services
• Lower sports betting payout in the prior year

Operating income of $127 million, down 7% at constant currency

• Higher gaming machine taxes and sports betting payout

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

• Record date of November 29, 2019
• Payment date of December 13, 2019

Issuance of €500 million 2.375% Notes due 2028, as previously announced

• Net proceeds used to pay €320 million term loan amortization due January 2020
• Balance used to repay all utilizations under revolving credit facilities

2019 Outlook

• Adjusted EBITDA of $1.675 - $1.735 billion remains unchanged
• Updating capital expenditures to $450 - $500 million; previously $450 - $550 million
• Full-year EUR/USD exchange rate of 1.12

Conference Call and Webcast

November 14, 2019, at 8:00 a.m. EST

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

Dial-In Numbers

• US/Canada toll-free dial-in number is [phone]
• Outside the US/Canada toll-free number is [phone]
• Conference ID/confirmation code is 1869816
• A telephone replay of the call will be available for one week
• US/Canada replay number is [phone]
• Outside the US/Canada replay number is [phone]
• ID/Confirmation code is 1869816

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 2019 are calculated using the same foreign exchange rates as the corresponding 2018 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 enable players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Digital and Social Gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. 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 over 12,000 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, 2018 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. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement.

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

International Game Technology PLC
Consolidated Statements of Operations
($ and shares in thousands, except per share amounts)
Unaudited
	For the three months ended
	September 30,
	2019		2018
Service revenue	921,712		963,265
Product sales	231,535		192,565
Total revenue	1,153,247		1,155,830
Cost of services	575,594		586,811
Cost of product sales	136,246		107,311
Selling, general and administrative	201,416		194,099
Research and development	68,804		63,277
Impairment	432		1,530
Other operating expense, net	16,873		2,774
Total operating expenses	999,365		955,802
Operating income	153,882		200,028
Interest expense, net	(102,551)		(103,553)
Foreign exchange gain, net	124,068		21,104
Other expense, net	(308)		(17,244)
Total non-operating income (expenses)	21,209		(99,693)
Income before provision for income taxes	175,091		100,335
Provision for income taxes	44,530		46,327
Net income	130,561		54,008
Less: Net income attributable to non-controlling interests	26,998		31,709
Net income attributable to IGT PLC	103,563		22,299
Net income attributable to IGT PLC per common share - basic	0.51		0.11
Net income attributable to IGT PLC per common share - diluted	0.51		0.11
Weighted-average shares - basic	204,435		204,219
Weighted-average shares - diluted	204,528		204,344

 

International Game Technology PLC
Consolidated Statements of Operations
($ and shares in thousands, except per share amounts)
Unaudited
	For the nine months ended
	September 30,
	2019		2018
Service revenue	2,892,774		3,017,283
Product sales	639,642		547,841
Total revenue	3,532,416		3,565,124
Cost of services	1,765,519		1,812,553
Cost of product sales	397,217		333,065
Selling, general and administrative	616,516		605,405
Research and development	200,305		198,497
Impairment	432		1,530
Other operating (income) expense, net	(3,322)		7,974
Total operating expenses	2,976,667		2,959,024
Operating income	555,749		606,100
Interest expense, net	(309,480)		(313,721)
Foreign exchange gain, net	141,609		96,955
Other income (expense), net	22,687		(45,567)
Total non-operating expenses	(145,184)		(262,333)
Income before provision for income taxes	410,565		343,767
Provision for income taxes	160,522		159,064
Net income	250,043		184,703
Less: Net income attributable to non-controlling interests	101,370		104,054
Net income attributable to IGT PLC	148,673		80,649
Net income attributable to IGT PLC per common share - basic	0.73		0.40
Net income attributable to IGT PLC per common share - diluted	0.73		0.39
Weighted-average shares - basic	204,352		204,009
Weighted-average shares - diluted	204,532		204,375

 

International Game Technology PLC
Consolidated Balance Sheets
($ thousands)
Unaudited
	September 30,		December 31,
	2019		2018
Assets
Current assets:
Cash and cash equivalents	542,425		250,669
Restricted cash and cash equivalents	221,233		261,108
Trade and other receivables, net	899,665		949,085
Inventories	253,949		282,698
Other current assets	471,239		504,061
Income taxes receivable	49,214		39,075
Total current assets	2,437,725		2,286,696
Systems, equipment and other assets related to contracts, net	1,298,394		1,404,426
Property, plant and equipment, net	138,708		185,349
Operating lease right-of-use-assets	344,146		-
Goodwill	5,535,003		5,580,227
Intangible assets, net	1,873,123		2,044,723
Other non-current assets	1,939,337		2,108,964
Deferred income taxes	33,819		38,117
Total non-current assets	11,162,530		11,361,806
Total assets	13,600,255		13,648,502
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	1,069,275		1,142,371
Other current liabilities	790,326		816,722
Current portion of long-term debt	447,678		-
Short-term borrowings	740		34,822
Income taxes payable	53,414		8,209
Total current liabilities	2,361,433		2,002,124
Long-term debt, less current portion	7,468,948		7,977,267
Deferred income taxes	440,903		446,083
Income taxes payable	25,654		25,654
Operating lease liabilities	311,673		-
Other non-current liabilities	374,601		445,445
Total non-current liabilities	8,621,779		8,894,449
Total liabilities	10,983,212		10,896,573
Commitments and contingencies
Shareholders' equity	2,617,043		2,751,929
Total liabilities and shareholders' equity	13,600,255		13,648,502

 

International Game Technology PLC
Consolidated Statements of Cash Flows
($ thousands)
Unaudited
	For the nine months ended
	September 30,
	2019		2018
Cash flows from operating activities
Net income	250,043		184,703
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	315,291		312,203
Amortization	207,161		204,256
Service revenue amortization	154,630		164,952
Stock-based compensation expense	20,046		24,944
Debt issuance cost amortization	17,004		16,511
Loss on extinguishment of debt	11,964		49,460
Deferred income taxes	2,590		11,815
Impairment	432		1,530
Gain on sale of assets	(65,324)		(5,568)
Foreign exchange gain, net	(141,609)		(96,955)
Other non-cash costs, net	48,299		8,700
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Trade and other receivables	16,546		92,823
Inventories	23,875		(26,682)
Upfront Italian license fee	-		(366,270)
Accounts payable	611		(123,057)
Other assets and liabilities	(72,854)		(204,053)
Net cash provided by operating activities	788,705		249,312
Cash flows from investing activities
Capital expenditures	(332,716)		(374,313)
Proceeds from sale of assets	100,743		8,200
Other	6,126		2,064
Net cash used in investing activities	(225,847)		(364,049)
Cash flows from financing activities
Principal payments on long-term debt	(1,264,647)		(1,658,753)
Dividends paid - non-controlling interests	(135,684)		(126,926)
Dividends paid	(122,616)		(122,394)
Return of capital - non-controlling interests	(80,384)		(64,974)
Net (payments of) proceeds from short-term borrowings	(34,519)		29,957
Debt issuance costs paid	(24,787)		(10,199)
Payments in connection with extinguishment of debt	(8,598)		(42,148)
Net receipts from (payments of) financial liabilities	753		(36,407)
Capital increase - non-controlling interests	1,369		135,536
Proceeds from long-term debt	1,397,025		1,415,762
Other	(7,798)		(18,051)
Net cash used in financing activities	(279,886)		(498,597)
Net increase (decrease) in cash and cash equivalents, and restricted cash	282,972		(613,334)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(31,091)		10,924
Cash and cash equivalents, and restricted cash at the beginning of the period	511,777		1,305,430
Cash and cash equivalents, and restricted cash at the end of the period	763,658		703,020
Supplemental Cash Flow Information:
Interest paid	(371,847)		(419,508)
Income taxes paid	(138,009)		(125,388)

 

International Game Technology PLC
Net Debt
($ thousands)
Unaudited
	September 30,		December 31,
	2019		2018
4.125% Senior Secured Notes due February 2020(2)	-		499,167
4.750% Senior Secured Notes due March 2020 (2)	-		438,252
5.500% Senior Secured Notes due June 2020 (1)	-		27,519
6.250% Senior Secured Notes due February 2022 (1)	1,491,826		1,469,609
4.750% Senior Secured Notes due February 2023 (2)	918,800		964,730
5.350% Senior Secured Notes due October 2023(1)	60,910		60,983
3.500% Senior Secured Notes due July 2024 (2)	540,006		567,179
6.500% Senior Secured Notes due February 2025 (1)	1,089,555		1,088,385
3.500% Senior Secured Notes due June 2026 (2)	809,246		-
6.250% Senior Secured Notes due January 2027(1)	743,203		742,667
2.375% Senior Secured Notes due April 2028 (2)	539,115		-
Senior Secured Notes, long-term	6,192,661		5,858,491
Term Loan Facilities due January 2023 (2)	1,276,287		1,705,395
Revolving Credit Facilities due July 2024 (1) (2)	-		413,381
Long-term debt, less current portion	7,468,948		7,977,267
4.750% Senior Secured Notes due March 2020 (2)	420,273		-
5.500% Senior Secured Notes due June 2020 (1)	27,405		-
Current portion of long-term debt	447,678		-
Short-term borrowings	740		34,822
Total debt	7,917,366		8,012,089
Less: Cash and cash equivalents	542,425		250,669
Less: Debt issuance costs, net - Revolving Credit Facilities due July 2024	21,311		-
Net debt	7,353,630		7,761,420
(1) U.S. dollar-denominated debt
(2) Euro-denominated debt
Note: Net debt is a non-GAAP financial measure

 

International Game Technology PLC
Adjusted EBITDA and Free Cash Flow
Reconciliations of Non-GAAP Financial Measures
($ thousands)
Unaudited
	For the three months ended
	September 30,
	2019		2018
Net income	130,561		54,008
Provision for income taxes	44,530		46,327
Non-operating (income) expenses	(21,209)		99,693
Depreciation	106,020		109,755
Amortization	69,960		67,806
Service revenue amortization	50,695		53,837
Stock-based compensation expense	7,544		7,825
Impairment	432		1,530
Other	18,543		2,541
Adjusted EBITDA	407,076		443,322
Cash flows from operating activities	196,984		129,162
Capital expenditures	(101,713)		(115,346)
Free Cash Flow	95,271		13,816

 

International Game Technology PLC
Adjusted EBITDA and Free Cash Flow
Reconciliations of Non-GAAP Financial Measures
($ thousands)
Unaudited
	For the nine months ended
	September 30,
	2019		2018
Net income	250,043		184,703
Provision for income taxes	160,522		159,064
Non-operating expenses	145,184		262,333
Depreciation	315,291		312,203
Amortization	207,161		204,256
Service revenue amortization	154,630		164,952
Stock-based compensation expense	20,046		24,944
Impairment	432		1,530
Other	24,149		7,308
Adjusted EBITDA	1,277,458		1,321,293
Cash flows from operating activities	788,705		249,312
Capital expenditures	(332,716)		(374,313)
Free Cash Flow	455,989		(125,001)

 

International Game Technology PLC
Consolidated Statement of Operations
Reconciliation of Non-GAAP Financial Measures
($ and shares in thousands, except per share amounts)
Unaudited
	Quarter to date										Quarter to date
	September 2019		Adjustments								September 2019
	As		Purchase		Foreign				Refinancing and		As
	Reported		Accounting		Exchange		Impairment		Other		Adjusted
Total revenue	1,153,247		(181)		-		-		-		1,153,066
Cost of services	575,594		(17,947)		-		-		-		557,647
Cost of product sales	136,246		(3,955)		-		-		-		132,291
Selling, general and administrative	201,416		(26,788)		-		-		-		174,628
Research and development	68,804		(1)		-		-		-		68,803
Impairment	432		-		-		(432)		-		-
Other operating expense (income), net	16,873		-		-		-		(18,615)		(1,742)
Total operating expenses	999,365		(48,691)		-		(432)		(18,615)		931,627
Operating income	153,882		48,510		-		432		18,615		221,439
Interest expense, net	(102,551)		25		-		-		-		(102,526)
Foreign exchange gain, net	124,068		-		(124,068)		-		-		-
Other (expense) income, net	(308)		-		-		-		2,336		2,028
Total non-operating income (expenses)	21,209		25		(124,068)		-		2,336		(100,498)
Income before provision for income taxes	175,091		48,535		(124,068)		432		20,951		120,941
Provision for income taxes (a)	44,530		11,666		(10,993)		-		5,368		50,571
Net income	130,561		36,869		(113,075)		432		15,583		70,370
Less: Net income attributable to non-controlling interests	26,998		25		-		-		-		27,023
Net income attributable to IGT PLC	103,563		36,844		(113,075)		432		15,583		43,347
Net income per common share - diluted	0.51										0.21
Weighted-average shares - diluted	204,528										204,528

(a) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated.

 

International Game Technology PLC
Consolidated Statement of Operations
Reconciliation of Non-GAAP Financial Measures
($ and shares in thousands, except per share amounts)
Unaudited
	Year to date										Year to date
	September 2019		Adjustments								September 2019
	As		Purchase		Foreign				Refinancing and		As
	Reported		Accounting		Exchange		Impairment		Other		Adjusted
Total revenue	3,532,416		(540)		-		-		-		3,531,876
Cost of services	1,765,519		(54,491)		-		-		-		1,711,028
Cost of product sales	397,217		(11,736)		-		-		-		385,481
Selling, general and administrative	616,516		(79,368)		-		-		-		537,148
Research and development	200,305		(293)		-		-		-		200,012
Impairment	432		-		-		(432)		-		-
Other operating income, net	(3,322)		-		-		-		(24,366)		(27,688)
Total operating expenses	2,976,667		(145,888)		-		(432)		(24,366)		2,805,981
Operating income	555,749		145,348		-		432		24,366		725,895
Interest expense, net	(309,480)		76		-		-		-		(309,404)
Foreign exchange gain, net	141,609		-		(141,609)		-		-		-
Other income, net	22,687		-		-		-		11,964		34,651
Total non-operating expenses	(145,184)		76		(141,609)		-		11,964		(274,753)
Income before provision for income taxes	410,565		145,424		(141,609)		432		36,330		451,142
Provision for income taxes (a)	160,522		34,908		(10,819)		-		6,730		191,341
Net income	250,043		110,516		(130,790)		432		29,600		259,801
Less: Net income attributable to non-controlling interests	101,370		76		-		-		-		101,446
Net income attributable to IGT PLC	148,673		110,440		(130,790)		432		29,600		158,355
Net income per common share - diluted	0.73										0.77
Weighted-average shares - diluted	204,532										204,532

(a) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated.

 

International Game Technology PLC
Consolidated Statement of Operations
Reconciliation of Non-GAAP Financial Measures
($ and shares in thousands, except per share amounts)
Unaudited
	Quarter to date										Quarter to date
	September 2018		Adjustments								September 2018
	As		Purchase		Foreign				Refinancing and		As
	Reported		Accounting		Exchange		Impairment		Other		Adjusted
Total revenue	1,155,830		(181)		-		-		-		1,155,649
Cost of services	586,811		(21,241)		-		-		-		565,570
Cost of product sales	107,311		(3,954)		-		-		-		103,357
Selling, general and administrative	194,099		(27,017)		-		-		-		167,082
Research and development	63,277		(232)		-		-		-		63,045
Impairment	1,530		-		-		(1,530)		-		-
Other operating expense, net	2,774		-		-		-		(2,774)		-
Total operating expenses	955,802		(52,444)		-		(1,530)		(2,774)		899,054
Operating income	200,028		52,263		-		1,530		2,774		256,595
Interest expense, net	(103,553)		524		-		-		-		(103,029)
Foreign exchange gain, net	21,104		-		(21,104)		-		-		-
Other (expense) income, net	(17,244)		-		-		-		19,875		2,631
Total non-operating expenses	(99,693)		524		(21,104)		-		19,875		(100,398)
Income before provision for income taxes	100,335		52,787		(21,104)		1,530		22,649		156,197
Provision for income taxes (a)	46,327		12,846		301		-		690		60,164
Net income	54,008		39,941		(21,405)		1,530		21,959		96,033
Less: Net income attributable to non-controlling interests	31,709		27		-		-		-		31,736
Net income attributable to IGT PLC	22,299		39,914		(21,405)		1,530		21,959		64,297
Net income per common share - diluted	0.11										0.31
Weighted-average shares - diluted	204,344										204,344

(a) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated.

 

International Game Technology PLC
Consolidated Statement of Operations
Reconciliation of Non-GAAP Financial Measures
($ and shares in thousands, except per share amounts)
Unaudited
	Year to date										Year to date
	September 2018		Adjustments								September 2018
	As		Purchase		Foreign				Refinancing and		As
	Reported		Accounting		Exchange		Impairment		Other		Adjusted
Total revenue	3,565,124		(540)		-		-		-		3,564,584
Cost of services	1,812,553		(63,457)		-		-		-		1,749,096
Cost of product sales	333,065		(11,735)		-		-		-		321,330
Selling, general and administrative	605,405		(80,602)		-		-		-		524,803
Research and development	198,497		(686)		-		-		-		197,811
Impairment	1,530		-		-		(1,530)		-		-
Other operating expense, net	7,974		-		-		-		(7,974)		-
Total operating expenses	2,959,024		(156,480)		-		(1,530)		(7,974)		2,793,040
Operating income	606,100		155,940		-		1,530		7,974		771,544
Interest expense, net	(313,721)		1,536		-		-		-		(312,185)
Foreign exchange gain, net	96,955		-		(96,955)		-		-		-
Other (expense) income, net	(45,567)		(2,184)		-		-		49,459		1,708
Total non-operating expenses	(262,333)		(648)		(96,955)		-		49,459		(310,477)
Income before provision for income taxes	343,767		155,292		(96,955)		1,530		57,433		461,067
Provision for income taxes (a)	159,064		37,101		6,630		-		1,831		204,626
Net income	184,703		118,191		(103,585)		1,530		55,602		256,441
Less: Net income attributable to non-controlling interests	104,054		77		-		-		-		104,131
Net income attributable to IGT PLC	80,649		118,114		(103,585)		1,530		55,602		152,310
Net income per common share - diluted	0.39										0.75
Weighted-average shares - diluted	204,375										204,375

(a) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated.

 

INTERNATIONAL GAME TECHNOLOGY PLC
Select Financial Data						Constant		Key Performance Indicators			%
Period Ended September 30				Q3 '19	Q3 '18	FX		Period Ended September 30	Q3 '19	Q3 '18	Change
Gaming		Total revenue		563	541	7%		Installed base units (end of period)
		Gaming services		364	397	-5%		Casino	30,948	35,689	-13.3%
			Terminal	276	303	-6%		VLT - Government sponsored (ex-Italy)	18,749	18,640	0.6%
			Other	88	94	-4%		VLT - Italy supplier (B2B)	7,514	8,094	-7.2%
		Product sales		199	144	41%		Total installed base units	57,211	62,423	-8.3%
			Terminal	139	101	39%		Yield (average gross revenue per unit per day)	$ 28.46	$ 27.84	2.2%
			Other	60	43	44%
								Additional Italian network details:
Lottery		Total revenue		493	527	-4%		VLT - Operator (B2C)	10,984	11,027	-0.4%
		Lottery services		460	479	-1%		AWP	41,129	43,074	-4.5%
			FMC	438	454	-1%
			Instant ticket & draw games	431	452	-1%		Machine units shipped
			Other services	6	2	113%		New/expansion	1,001	1,372	-27.0%
			LMA	23	25	-10%		Replacement	9,184	5,679	61.7%
		Product sales		33	48	-32%		Total machines shipped	10,185	7,051	44.4%
Other		Total revenue		97	88	17%		Global lottery same-store revenue growth
		Service revenue		97	88	17%		Instant ticket & draw games			4.2%
		Product sales		0	0	0%		Multistate jackpots			-19.5%
								Total lottery same-store revenue growth (ex-Italy)			1.7%
Consolidated		Revenue		1,153	1,156	3%		Italy lottery revenue growth			-1.1%
		Operating Income:
			Segment total	270	306	-9%
			Purchase accounting	(49)	(52)	7%
			Corporate support	(67)	(54)	-28%
			Total	154	200	-19%

 

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SOURCE International Game Technology PLC