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International Game Technology PLC Reports Fourth Quarter And Full Year 2020 Results


LONDON, March 2, 2021 /PRNewswire/ — International Game Technology PLC (“IGT”) (NYSE:IGT) today reported financial results for the fourth quarter and full year ended December 31, 2020. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the results; access details are provided below.

“The solid results we achieved for this pandemic-impacted year have given us momentum into 2021. They are a result of the vision, agility, and discipline of the IGT team as well as the distinct advantages of our diverse portfolio,” said Marco Sala, CEO of IGT. “We also made important strategic progress. The Company undertook a comprehensive reorganization to sharpen our focus on our core competencies and drive structural operational efficiencies. This provides a clear path to increasing shareholder value as we build on our leadership positions with a stronger revenue and profit growth profile.”

“We generated $866 million in cash from operating activities during the year, among the highest level in five years, primarily driven by resilient Global Lottery performance and rigorous cost and invested capital controls,” said Max Chiara, CFO of IGT. “Liquidity improved more than $300 million to over $2.7 billion. As a leaner, stronger Company, we expect leverage to return to pre-pandemic levels in the next 12-18 months.”

Overview of Consolidated Fourth Quarter and Full Year 2020 Results

All amounts from continuing operations unless otherwise noted

Quarter Ended

Y/Y

Change

(%)

Constant

Currency

Change

(%)

Year Ended

Y/Y

Change

(%)

Constant

Currency

Change

(%)

December 31,

December 31,

2020


2019

2020


2019

(In $ millions, unless otherwise noted)











GAAP Financials:











Revenue











    Global Lottery

630


568

11%

8%

2,164


2,293

(6)%

(6)%

    Global Gaming

255


476

(46)%

(47)%

951


1,739

(45)%

(45)%

Total revenue

885


1,044

(15)%

(17)%

3,115


4,032

(23)%

(23)%












Operating income/(loss)











    Global Lottery

195


154

26%

21%

642


697

(8)%

(10)%

    Global Gaming

(39)


59

NA

NA

(206)


180

NA

NA

    Corporate support expense

(20)


(25)

20%

32%

(76)


(105)

28%

29%

    Other(1)

(40)


(148)

73%

73%

(468)


(294)

(59)%

(59)%

Total operating income/(loss)

96


40

138%

132%

(107)


478

NA

NA












Net cash provided by operating activities from continuing operations

251


278

(10)%


595


907

(34)%


Net cash provided by operating activities from discontinued operations

4


26

(83)%


271


186

46%


Net cash provided by operating activities

255


304

(16)%


866


1,093

(21)%













Cash and cash equivalents 

907


655

39%


907


655

39%













Non-GAAP Financial Measures:











Adjusted EBITDA











    Global Lottery

313


268

17%

12%

1,086


1,136

(4)%

(6)%

    Global Gaming

(2)


115

NA

NA

(16)


397

NA

NA

    Corporate support expense

(16)


(18)

12%

21%

(62)


(79)

21%

21%

Total Adjusted EBITDA

295


365

(19)%

(22)%

1,008


1,454

(31)%

(32)%

EBITDA from discontinued operations

26


69

(63)%


138


256

(46)%


Adjusted EBITDA – combined

321


435

(26)%


1,146


1,710

(33)%













Free cash flow

201


186

8%


340


530

(36)%


Free cash flow from discontinued operations

(10)


9

NA


236


121

94%


Free cash flow – combined

191


195

(2)%


576


651

(12)%













Net debt






7,319


7,390

(1)%














(1) Primarily includes purchase price amortization and goodwill impairment

Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release

Fourth Quarter and Full Year 2020 Key Highlights:

  • Consolidated:
    • Generated $866 million in cash from operating activities and $576 million in combined free cash flow during 2020; cash flow performance especially strong in the back half of the year
    • Achieved $500 million in 2020 temporary cost savings/avoidance
    • Launched OPtiMa business efficiency program and accelerated timing with $200M+ in targeted savings to be achieved in 2021
    • Implemented a simplified global organizational structure focused primarily on two business segments: Global Lottery and Global Gaming
    • Announced agreement to sell Italian B2C gaming businesses for €950 million
  • Global Lottery:
    • Delivered highest quarterly segment-level revenue and Adjusted EBITDA in two years in the fourth quarter; full year same-store sales up 7% in North America including the strongest annual growth for instant tickets and draw games in seven years
    • Awarded long-term contracts with the Czech Republic, Poland and Nebraska lotteries following competitive bid processes in 2020
    • In 2020, signed two-year contract extensions with the New York, Tennessee, and Minnesota lotteries; seven-year contract extensions with Western Canada Lottery Corporation and, more recently, with the Jamaica lottery
  • Global Gaming:
    • Sequential stability in Global Gaming revenue and profit in the fourth quarter; KPIs stable to improving
    • 2020 product highlights: growing acceptance of cashless solutions with Resort Wallet™ launched at Resorts World Catskills and, more recently, obtaining Nevada regulatory approval; entered Historical Horse Racing market; launched Peak family of cabinets
    • Strong double-digit growth in Digital & Betting for the year

Fourth Quarter 2020 Financial Highlights:

The Company’s B2C gaming machine and sports betting activities in Italy have been classified as discontinued operations due to the pending sale of these businesses. Unless otherwise noted, results presented in this release are from continuing operations.

Fourth quarter results reflect the continued, global impact of the COVID-19 pandemic.

Total revenue of $885 million compared to $1.04 billion in the prior-year period

  • Global Lottery revenue totals $630 million, up 11% from the prior year
    • Double-digit same-store sales growth in North America with a return to growth in Italy
    • Reduced by $19 million catch-up adjustment for unspent advertising in Italy
  • Global Gaming revenue of $255 million, down 46% from the prior year
    • Impacted by pandemic-related casino closures and operating restrictions
    • Sequential stability with the third quarter supported by stable to improving KPIs
    • Digital & Betting service revenue rose nearly 55% compared to the prior year; overall increase of 4% includes impact of non-recurring software sale in the prior year

Operating income of $96 million, up from $40 million in the prior year

  • Goodwill impairment of $99 million in the prior-year period
  • High profit flow-through of Global Lottery same-store sales growth
  • Global Gaming impacted by pandemic-related decline in revenue
  • Benefit of disciplined cost-saving actions across segments

Net interest expense of $101 million, in line with prior-year period

Provision for income taxes of $73 million compared to $2 million

  • Higher valuation allowances on deferred tax assets in the current period
  • Income taxes paid of $51 million versus $77 million in the prior year

Net loss attributable to IGT was $242 million versus $168 million, driven by higher non-cash foreign exchange losses, primarily on Euro-denominated debt instruments

Net loss attributable to IGT per diluted share of $(1.18) compared to $(0.82)

Adjusted EBITDA of $295 million versus $365 million in the prior year

Net debt of $7.32 billion compared to $7.39 billion at December 31, 2019; reduced $71 million as reported, $433 million excluding unfavorable foreign currency impact

Full Year 2020 Financial Highlights:

Year-over-year comparisons reflect the global impact of the COVID-19 pandemic in 2020.

Total revenue was $3.12 billion versus $4.03 billion in the prior year

  • Global Lottery revenue of $2.16 billion, down 6%, demonstrating remarkable resilience
    • Global same-store sales stable
    • Steep recovery in second half driven by double-digit North America same-store sales growth
  • Global Gaming revenue was $951 million, down 45%, as the pandemic caused protracted casino closures and operating restrictions around the world

Operating loss of $107 million compared to operating income of $478 million in the prior-year period       

  • Impact of lower revenue
  • Goodwill impairment of $296 million in the current year compared to $99 million in the prior year
  • Benefit of disciplined cost-saving actions across segments

Net interest expense of $398 million versus $411 million in the prior year, on lower average cost of debt

Provision for income taxes of $28 million versus $131 million in the prior year

  • Pre-tax loss in 2020 compared to income in 2019, in addition to higher valuation allowances on deferred tax assets in 2020
  • Income taxes paid of $89 million compared to $197 million in the prior year

Net loss attributable to IGT was $898 million compared to $19 million in the prior-year period, driven by higher non-cash foreign exchange losses, primarily on Euro-denominated debt instruments, and goodwill impairment

Net loss attributable to IGT per diluted share of $(4.39) versus $(0.09)

Adjusted EBITDA totaled $1.01 billion compared to $1.45 billion

Cash from operations was $595 million compared to $907 million in 2019, relatively resilient despite pandemic impact, on solid Global Lottery financial results and diligent invested capital management

Capital expenditures of $255 million versus $377 million in the prior year, reflecting focus on cash cost savings during the pandemic

Cash and cash equivalents of $907 million as of December 31, 2020, versus $655 million as of December 31, 2019

Cash and Liquidity Update

  • Total liquidity increased over $300 million compared to December 31, 2019, due to strong cash flow generation
  • At December 31, 2020, liquidity totaled $2.72 billion, comprised of $907 million in unrestricted cash and $1.82 billion available under revolving credit facilities

Conference Call and Webcast:

March 2, 2021, at 8:00 a.m. EST

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

Dial-In Numbers

  • US/Canada toll-free dial-in number: +1 844 842 7999
  • Outside the US/Canada toll-free number: +1 612 979 9887
  • Conference ID/confirmation code: 4538018
  • A telephone replay of the call will be available for one week
    • US/Canada replay number: +1 855 859 2056
    • Outside the US/Canada replay number: +1 404 537 3406
    • ID/Confirmation code: 4538018

Note: Certain totals in the tables included in this press release may not add due to rounding

Comparability of Results

All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2020 are calculated using the same foreign exchange rates as the corresponding 2019 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with U.S. GAAP.

About IGT
IGT (NYSE:IGT) is the global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Gaming Machines and Lotteries to Sports Betting and Digital. Leveraging a wealth of compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, our solutions deliver unrivalled gaming experiences that engage players and drive growth. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 11,000 employees. For more information, please visit www.IGT.com.

Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the “Company”) and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall”, “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company’s annual report on Form 20-F for the financial year ended December 31, 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 or International Game Technology PLC, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.

Non-GAAP Financial Measures
Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional useful information, but it is not intended to nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Total Adjusted EBITDA represents 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, and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of on-going operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, and certain other non-recurring items. EBITDA – discontinued operations represents income from discontinued operations (a GAAP measure) before income taxes, interest expense, depreciation and amortization. Adjusted EBITDA – combined represents Total Adjusted EBITDA plus 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 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.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Free cash flow – discontinued operations represents cash flows from operating activities – discontinued operations (a GAAP measure) less cash flows from investing activities – discontinued operations (a GAAP measure).  Free cash flow – combined represents Free Cash Flow plus Free Cash Flow – discontinued operations. 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)

GLOBAL LOTTERY


Q4’20


Q4’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)


FY’20


FY’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)

Revenue

















Service

















Operating and facilities management contracts


549


527


4%


1%


1,944


2,126


(9)%


(10)%

Upfront license fee amortization


(52)


(49)


(8)%


—%


(200)


(196)


(2)%


—%

Operating and facilities management contracts, net


497


479


4%


1%


1,744


1,931


(10)%


(11)%

Other


86


66


32%


24%


299


252


18%


17%

Total service revenue


583


544


7%


4%


2,043


2,183


(6)%


(7)%


















Product sales


47


24


100%


97%


121


110


10%


10%

Total revenue


630


568


11%


8%


2,164


2,293


(6)%


(6)%


















Operating income


195


154


26%


21%


642


697


(8)%


(10)%

Adjusted EBITDA(1)


313


268


17%


12%


1,086


1,136


(4)%


(6)%




















Q4’20

Constant

Currency

Change

(%) (1)


Q4’19

Constant

Currency

Change

(%) (1)






FY’20

Constant

Currency

Change

(%) (1)


FY’19

Constant

Currency

Change

(%) (1)





Global same-store sales growth (%)

















Instant ticket & draw games


8.2%


3.2%






1.6%


4.1%





Multi-jurisdiction jackpots


4.5%


(49.4)%






(17.0)%


(18.3)%





Total


7.9%


(4.6)%






0.1%


1.7%






















 North America and Rest of world same-store sales growth (%)

















Instant ticket & draw games


10.7%


4.7%






7.3%


5.2%





Multi-jurisdiction jackpots


4.5%


(49.4)%






(17.0)%


(18.3)%





Total


10.1%


(5.5)%






4.7%


2.0%






















Italy same-store sales growth (%)

















Instant ticket & draw games


0.4%


(1.3)%






(16.1)%


0.8%






















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



GLOBAL GAMING


Q4’20


Q4’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)


FY’20


FY’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)

Revenue

















Service

















Terminal


85


133


(36)%


(36)%


297


568


(48)%


(47)%

Systems, software, and other


81


80


1%


—%


299


350


(14)%


(14)%

Total service revenue


166


213


(22)%


(22)%


597


918


(35)%


(35)%


















Product sales

















Terminal


59


188


(69)%


(69)%


205


581


(65)%


(65)%

Other


30


75


(60)%


(61)%


149


240


(38)%


(38)%

Total product sales revenue


89


263


(66)%


(67)%


355


821


(57)%


(57)%

Total revenue


255


476


(46)%


(47)%


951


1,739


(45)%


(45)%


















Operating (loss) income


(39)


59


NA


NA


(206)


180


NA


NA

Adjusted EBITDA(1)


(2)


115


NA


NA


(16)


397


NA


NA


















Installed base units

















Casino


48,232


50,834


(5)%




48,232


50,834


(5)%



Casino – L/T lease (2)


1,068



NA




1,068



NA



Total installed base units


49,300


50,834


(3)%




49,300


50,834


(3)%




















Installed base units (by geography)

















US & Canada


34,275


35,977


(5)%




34,275


35,977


(5)%



Rest of world


15,025


14,857


1%




15,025


14,857


1%



Total installed base units


49,300


50,834


(3)%




49,300


50,834


(3)%




















Yields (by geography)(3), in absolute $

















US & Canada


$27.88


$40.29


(31)%




$24.34


$40.31


(40)%



Rest of world


$3.33


$7.75


(57)%




$3.67


$8.50


(57)%



Total yields


$20.32


$31.08


(35)%




$18.06


$31.45


(43)%




















Global machine units sold

















New/expansion


666


1,811


(63)%




3,046


5,814


(48)%



Replacement


3,662


11,808


(69)%




11,616


36,262


(68)%



Total machine units sold


4,328


13,619


(68)%




14,662


42,076


(65)%




















US & Canada machine units sold

















New/expansion


668


1,405


(52)%




2,753


4,116


(33)%



Replacement


2,636


5,986


(56)%




8,009


16,903


(53)%



Total machine units sold


3,304


7,391


(55)%




10,762


21,019


(49)%




















Rest of world machine units sold

















New/expansion


(2)


406


NA




293


1,698


(83)%



Replacement


1,026


5,822


(82)%




3,607


19,359


(81)%



Total  machine units sold


1,024


6,228


(84)%




3,900


21,057


(81)%





































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

(2) Excluded from yield calculations due to treatment as sales-type leases

(3) Excludes Casino L/T lease units due to treatment as sales-type leases, comparability on a Y/Y basis hindered due to fewer active units



GLOBAL GAMING (Continued)


Q4’20


Q4’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)


FY’20


FY’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)

Average selling price (ASP), in absolute $

















US & Canada


14,200


14,900


(5)%




14,200


15,100


(6)%



Rest of world


10,400


11,900


(13)%




12,400


11,700


6%



Total ASP


13,300


13,500


(1)%




13,800


13,400


3%




















Gaming systems revenue


38


58


(35)%




136


213


(36)%



CONSOLIDATED

















Revenue (by geography)

















US & Canada


489


580


(16)%


(16)%


1,748


2,236


(22)%


(22)%

Italy


266


237


12%


4%


862


949


(9)%


(12)%

Rest of world


131


228


(43)%


(44)%


505


846


(40)%


(40)%

Total revenue


885


1,044


(15)%


(17)%


3,115


4,032


(23)%


(23)%




















































Digital & Betting Revenue (2)


47


45


4%


2%


170


130


31%


31%



































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

(2) Included within consolidated revenue



DISCONTINUED OPERATIONS – ITALY B2C KPIs


Q4’20


Q4’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)


FY’20


FY’19


Y/Y

Change

(%)


Constant

Currency

Change

(%) (1)

Italy installed base units

















VLT – Operator


10,774


11,020


(2)%




10,774


11,020


(2)%



AWP


36,168


40,892


(12)%




36,168


40,892


(12)%



Total Italy installed base units


46,942


51,912


(10)%




46,942


51,912


(10)%




















Italy wagers (€)

















VLT


228


1,414




(84)%


2,062


5,669




(64)%

AWP


239


958




(75)%


1,719


3,690




(53)%


















Italy sports betting wagers (€)


233


298




(22)%


767


1,050




(27)%

Italy sports betting payout (%)


82.9%


83.3%




—%


82.4%


83.1%




(1)%



































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

International Game Technology PLC

Consolidated Statements of Operations

($ and shares in thousands, except per share amounts)

Unaudited










For the three months ended

December 31,


For the year ended

December 31,


2020


2019


2020


2019

Service revenue

748,932


756,653


2,639,558


3,100,868

Product sales

136,193


286,875


475,898


930,889

Total revenue

885,125


1,043,528


3,115,456


4,031,757









Cost of services

439,816


445,158


1,633,899


1,777,225

Cost of product sales

103,096


157,254


345,800


558,011

Selling, general and administrative

195,895


229,163


706,895


849,620

Research and development

50,837


65,936


190,948


266,241

Restructuring

(1,910)


3,002


45,045


24,855

Goodwill impairment


99,000


296,000


99,000

Other operating expense (income), net

1,282


3,632


4,334


(21,111)

Total operating expenses

789,016


1,003,145


3,222,921


3,553,841









Operating income (loss)

96,109


40,383


(107,465)


477,916









Interest expense, net

(100,799)


(101,391)


(397,916)


(410,875)

Foreign exchange (loss) gain, net

(155,449)


(101,742)


(308,898)


39,874

Other income (expense), net

990


(3,954)


(33,428)


21,092

Total non-operating expenses

(255,258)


(207,087)


(740,242)


(349,909)









(Loss) income from continuing operations before provision for income taxes

(159,149)


(166,704)


(847,707)


128,007

Provision for income taxes

72,747


2,270


27,698


130,757

Loss from continuing operations

(231,896)


(168,974)


(875,405)


(2,750)

Income from discontinued operations, net of tax

11,751


30,589


36,681


114,408

Net (loss) income

(220,145)


(138,385)


(838,724)


111,658

Less: Net income attributable to non-controlling interests from continuing operations

23,830


27,877


63,926


126,144

Less: Net (loss) income attributable to non-controlling interests from discontinued operations

(1,979)


1,436


(4,760)


4,539

Net loss attributable to IGT PLC

(241,996)


(167,698)


(897,890)


(19,025)









Net loss from continuing operations attributable to IGT PLC per common share – basic and diluted

(1.25)


(0.96)


(4.59)


(0.63)

Net loss attributable to IGT PLC per common share – basic and diluted

(1.18)


(0.82)


(4.39)


(0.09)









Weighted-average shares – basic and diluted

204,857


204,435


204,725


204,373

International Game Technology PLC


Consolidated Balance Sheets


($ thousands)


Unaudited








December 31,


December 31,



2020


2019


Assets





Current assets:





Cash and cash equivalents

907,015


654,628


Restricted cash and cash equivalents

199,246


220,962


Trade and other receivables, net

846,128


875,263


Inventories

169,207


161,790


Other current assets

479,649


513,015


Assets held for sale

838,840


208,379


Total current assets

3,440,085


2,634,037


Systems, equipment and other assets related to contracts, net

1,068,121


1,205,592


Property, plant and equipment, net

131,602


146,055


Operating lease right-of-use assets

288,196


296,751


Goodwill

4,713,489


4,931,235


Intangible assets, net

1,577,354


1,749,614


Other non-current assets

1,773,641


1,917,751


Assets held for sale


763,555


Total non-current assets

9,552,403


11,010,553


Total assets

12,992,488


13,644,590







Liabilities and shareholders’ equity





Current liabilities:





Accounts payable

1,126,043


1,059,033


Current portion of long-term debt

392,672


462,155


Short-term borrowings

480


3,193


Other current liabilities

846,273


758,818


Liabilities held for sale

249,573


185,152


Total current liabilities

2,615,041


2,468,351


Long-term debt, less current portion

7,857,086


7,600,169


Deferred income taxes

333,010


393,040


Operating lease liabilities

266,227


272,350


Other non-current liabilities

359,961


395,866


Liabilities held for sale


29,836


Total non-current liabilities

8,816,284


8,691,261


Total liabilities

11,431,325


11,159,612


Commitments and contingencies





IGT PLC’s shareholders’ equity

776,737


1,658,262


Non-controlling interests

784,426


826,716


Total shareholders’ equity

1,561,163


2,484,978


Total liabilities and shareholders’ equity

12,992,488


13,644,590


International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited










For the three months ended


For the year ended


December 31,


December 31,


2020


2019


2020


2019

Cash flows from operating activities








Net (loss) income

(220,145)


(138,385)


(838,724)


111,658

Less: Income from discontinued operations, net of tax

11,751


30,589


36,681


114,408

Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities from continuing operations:








Foreign exchange loss (gain), net

155,449


101,742


308,898


(39,874)

Depreciation

89,992


103,867


354,854


385,987

Amortization of upfront license fees

54,856


51,109


210,432


205,739

Amortization

50,900


57,902


211,340


227,956

Deferred income taxes

28,313


(70,883)


(78,207)


(68,293)

Debt issuance cost amortization

5,579


5,432


21,327


22,436

Stock-based compensation

3,826


6,468


(6,877)


26,514

Goodwill impairment


99,000


296,000


99,000

(Gain) loss on extinguishment of debt

(2)



28,265


11,964

(Gain) loss on sale of assets

(482)


610


(27)


(64,714)

Other non-cash items, net

(1,175)


1,980


(1,675)


18,942

Changes in operating assets and liabilities, excluding the effects of dispositions and acquisitions:








Accounts payable

49,287


21,499


4,595


28,247

Inventories

26,063


60,597


16,628


84,472

Trade and other receivables

(95,495)


(55,464)


73,578


(49,267)

Other assets and liabilities

115,815


63,575


31,076


20,981

Net cash provided by operating activities from continuing operations

251,030


278,460


594,802


907,340

Net cash provided by operating activities from discontinued operations

4,287


25,970


270,829


185,795

Net cash provided by operating activities

255,317


304,430


865,631


1,093,135









Cash flows from investing activities








Capital expenditures

(50,210)


(92,142)


(254,689)


(377,248)

Proceeds from sale of assets

2,929


23,300


9,251


123,855

Other

(286)


(274)


12,151


5,851

Net cash used in investing activities from continuing operations

(47,567)


(69,116)


(233,287)


(247,542)

Net cash used in investing activities from discontinued operations

(14,051)


(17,226)


(35,284)


(64,648)

Net cash used in investing activities

(61,618)


(86,342)


(268,571)


(312,190)









Cash flows from financing activities








Principal payments on long-term debt

(175,000)



(988,379)


(1,264,647)

Net (payments of) receipts from financial liabilities

(28,560)


(35,077)


67,138


(34,324)

Payments of debt issuance costs

(105)


(1,143)


(21,584)


(25,930)

Payments in connection with the extinguishment of debt


(91)


(25,000)


(8,689)

Proceeds from long-term debt



750,000


1,397,025

Net proceeds from (payments of) short-term borrowings

475


2,452


(7,135)


(32,067)

Dividends paid


(40,887)


(40,887)


(163,503)

Return of capital – non-controlling interests

(32,309)


(18,404)


(32,309)


(98,788)

Dividends paid – non-controlling interests

(497)


(971)


(136,389)


(136,655)

Capital increase – non-controlling interests

4,778


130


8,112


1,499

Other

(2,828)


(2,397)


(11,426)


(10,195)

Net cash used in financing activities

(234,046)


(96,388)


(437,859)


(376,274)









Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents

(40,347)


121,700


159,201


404,671

Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents

29,971


8,893


75,770


(22,197)

Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period

1,139,598


763,658


894,251


511,777

Cash and cash equivalents and restricted cash and cash equivalents at the end of the period

1,129,222


894,251


1,129,222


894,251

Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations

22,961


18,661


22,961


18,661

Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations

1,106,261


875,590


1,106,261


875,590









Supplemental Cash Flow Information:








Interest paid

(37,433)


(28,175)


(409,560)


(400,022)

Income taxes paid

(50,761)


(77,495)


(89,006)


(196,831)

International Game Technology PLC

Net Debt

($ thousands)

Unaudited








December 31,


December 31,



2020


2019

6.250% Senior Secured U.S. Dollar Notes due February 2022


1,003,822


1,491,328

4.750% Senior Secured Euro Notes due February 2023


1,038,052


948,382

5.350% Senior Secured U.S. Dollar Notes due October 2023


60,791


60,885

3.500% Senior Secured Euro Notes due July 2024


609,742


557,331

6.500% Senior Secured U.S. Dollar Notes due February 2025


1,091,641


1,089,959

3.500% Senior Secured Euro Notes due June 2026


913,330


835,105

6.250% Senior Secured U.S. Dollar Notes due January 2027


744,155


743,387

2.375% Senior Secured Euro Notes due April 2028


608,400


556,403

5.250% Senior Secured U.S. Dollar Notes due January 2029


743,125


Senior Secured Notes


6,813,058


6,282,780






Euro Term Loan Facility due January 2023


1,044,028


1,317,389

Long-term debt, less current portion


7,857,086


7,600,169






4.750% Senior Secured Euro Notes due March 2020



434,789

5.500% Senior Secured U.S. Dollar Notes due June 2020



27,366

Euro Term Loan Facility due January 2023


392,672


Current portion of long-term debt


392,672


462,155






Short-term borrowings


480


3,193

Total debt


8,250,238


8,065,517






Less: Cash and cash equivalents


907,015


654,628

Less: Debt issuance costs, net – Revolving Credit Facilities due July 2024


23,937


20,464






Net debt


7,319,286


7,390,425






Note: Net debt is a non-GAAP financial measure





International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited














For the three months ended December 31, 2020



Global

Lottery


Global

Gaming


Business

Segment

Total


Corporate

and Other


Total IGT

PLC

Loss from continuing operations










(231,896)

Provision for income taxes










72,747

Interest expense, net










100,799

Foreign exchange loss, net










155,449

Other non-operating income, net










(990)

Operating income (loss)


194,725


(38,763)


155,962


(59,853)


96,109

Depreciation


54,000


35,801


89,801


191


89,992

Amortization – service revenue (1)


54,856



54,856



54,856

Amortization – non-purchase accounting


8,347


2,152


10,499


796


11,295

Amortization – purchase accounting





39,605


39,605

Restructuring


67


(1,819)


(1,752)


(158)


(1,910)

Stock-based compensation


839


745


1,584


2,242


3,826

Other (2)



3


3


1,281


1,284

Adjusted EBITDA


312,834


(1,881)


310,953


(15,896)


295,057












Income from discontinued operations










11,751

Benefit from income taxes










(3,517)

Interest expense, net










5

Depreciation










8,347

Amortization










9,172

EBITDA – discontinued operations










25,758












Adjusted EBITDA – combined










320,815












Cash flows from operating activities – continuing operations










251,030

Capital expenditures










(50,210)

Free Cash Flow










200,820












Cash flows from operating activities – discontinued operations










4,287

Cash flows from investing activities – discontinued operations










(14,051)

Free Cash Flow – discontinued operations










(9,764)












Free Cash Flow – combined










191,056























(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited














For the three months ended December 31, 2019



Global

Lottery


Global

Gaming


Business

Segment

Total


Corporate

and Other


Total IGT

PLC

Loss from continuing operations










(168,974)

Provision for income taxes










2,270

Interest expense, net










101,391

Foreign exchange loss, net










101,742

Other non-operating expense, net










3,954

Operating income (loss)


153,946


58,927


212,873


(172,490)


40,383

Goodwill impairment





99,000


99,000

Depreciation


52,622


50,481


103,103


764


103,867

Amortization – service revenue (1)


51,109



51,109



51,109

Amortization – non-purchase accounting


6,828


2,290


9,118


826


9,944

Amortization – purchase accounting





47,958


47,958

Restructuring


1,166


1,404


2,570


432


3,002

Stock-based compensation


1,815


2,273


4,088


2,380


6,468

Other (2)


565



565


3,000


3,565

Adjusted EBITDA


268,051


115,375


383,426


(18,130)


365,296












Income from discontinued operations










30,589

Provision for income taxes










10,318

Interest income, net










(744)

Depreciation










15,105

Amortization










14,130

EBITDA – discontinued operations










69,398












Adjusted EBITDA – combined










434,694












Cash flows from operating activities – continuing operations










278,460

Capital expenditures










(92,142)

Free Cash Flow










186,318












Cash flows from operating activities – discontinued operations










25,970

Cash flows from investing activities – discontinued operations










(17,226)

Free Cash Flow – discontinued operations










8,744












Free Cash Flow – combined










195,062























(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited














For the year ended December 31, 2020



Global

Lottery


Global

Gaming


Business

Segment

Total


Corporate

and Other


Total IGT

PLC

Loss from continuing operations










(875,405)

Provision for income taxes










27,698

Interest expense, net










397,916

Foreign exchange loss, net










308,898

Other non-operating expense, net










33,428

Operating income (loss)


641,930


(205,657)


436,273


(543,738)


(107,465)

Goodwill impairment





296,000


296,000

Depreciation


201,054


152,508


353,562


1,292


354,854

Amortization – service revenue (1)


210,432



210,432



210,432

Amortization – non-purchase accounting


30,353


7,611


37,964


3,264


41,228

Amortization – purchase accounting





170,112


170,112

Restructuring


5,399


33,612


39,011


6,034


45,045

Stock-based compensation


(2,874)


(4,318)


(7,192)


315


(6,877)

Other (2)



3


3


4,235


4,238

Adjusted EBITDA


1,086,294


(16,241)


1,070,053


(62,486)


1,007,567












Income from discontinued operations










36,681

Provision for income taxes










6,726

Interest expense, net










172

Depreciation










44,310

Amortization










50,314

EBITDA – discontinued operations










138,203












Adjusted EBITDA – combined










1,145,770












Cash flows from operating activities – continuing operations










594,802

Capital expenditures










(254,689)

Free Cash Flow










340,113












Cash flows from operating activities – discontinued operations










270,829

Cash flows from investing activities – discontinued operations










(35,284)

Free Cash Flow – discontinued operations










235,545












Free Cash Flow – combined










575,658























(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited














For the year ended December 31, 2019



Global

Lottery


Global

Gaming


Business

Segment

Total


Corporate

and Other


Total IGT

PLC

Loss from continuing operations










(2,750)

Provision for income taxes










130,757

Interest expense, net










410,875

Foreign exchange gain, net










(39,874)

Other non-operating income, net










(21,092)

Operating income (loss)


697,267


179,548


876,815


(398,899)


477,916

Goodwill impairment





99,000


99,000

Depreciation


200,083


182,799


382,882


3,105


385,987

Amortization – service revenue (1)


205,739



205,739



205,739

Amortization – non-purchase accounting


25,002


8,150


33,152


3,180


36,332

Amortization – purchase accounting





191,624


191,624

Restructuring


2,169


18,362


20,531


4,324


24,855

Stock-based compensation


5,669


7,361


13,030


13,484


26,514

Other (2)


566


431


997


5,298


6,295

Adjusted EBITDA


1,136,495


396,651


1,533,146


(78,884)


1,454,262












Income from discontinued operations










114,408

Provision for income taxes










42,352

Interest income, net










(747)

Depreciation










48,277

Amortization










51,237

EBITDA – discontinued operations










255,527












Adjusted EBITDA – combined










1,709,789












Cash flows from operating activities – continuing operations










907,340

Capital expenditures










(377,248)

Free Cash Flow










530,092












Cash flows from operating activities – discontinued operations










185,795

Cash flows from investing activities – discontinued operations










(64,648)

Free Cash Flow – discontinued operations










121,147












Free Cash Flow – combined










651,239























(1) Includes amortization of upfront license fees

(2) Primarily includes transaction-related costs

SOURCE International Game Technology PLC

Related Links

http://www.igt.com



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