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International Game Technology PLC Reports Fourth Quarter And Full Year 2016 Results
- Fourth quarter net income of
$233 million ; adjusted EBITDA of$422 million reflects broad-based lottery growth and higher gaming product sales - 2016 net income of
$211 million ; adjusted 2016 EBITDA of$1,755 million on strongNorth America andItaly performance - Net debt of
$7,569 million at year end - Cash dividend declared of
$0.20 per ordinary share
"We reached many important milestones in 2016," said
"We achieved our financial goals for 2016 and ended the year in strong financial condition," said
Summary of Consolidated Fourth Quarter and Full Year Financial Results
Reported |
|||||||
Constant |
|||||||
Quarter Ended December 31, |
2016 |
2015 |
Change |
Currency |
|||
(%) |
Change (%) |
||||||
(In US $ millions, unless otherwise noted) |
|||||||
Revenue |
1,321 |
1,365 |
-3% |
-2% |
|||
Operating Income |
138 |
132 |
5% |
5% |
|||
Net income per diluted share |
1.15 |
0.37 |
NM |
NM |
|||
Net debt |
7,569 |
7,707 |
-2% |
- |
|||
Adjusted EBITDA |
422 |
449 |
-6% |
-6% |
|||
Adjusted Operating Income |
281 |
293 |
-4% |
-4% |
|||
Adjusted net income per diluted share |
0.88 |
0.63 |
40% |
NA |
|||
Reported |
Pro forma |
||||||
Constant |
|||||||
Year Ended December 31, |
2016 |
2015 |
Change |
2016 |
2015 |
Change |
Currency |
(%) |
(%) |
Change (%) |
|||||
(In US $ millions, unless otherwise noted) |
|||||||
Revenue |
5,154 |
4,689 |
10% |
5,154 |
5,088 |
1% |
2% |
Operating Income |
660 |
540 |
22% |
660 |
533 |
24% |
24% |
Net income (loss) per diluted share |
1.05 |
(0.39) |
NM |
1.05 |
NA |
NA |
NA |
Net debt |
7,569 |
7,707 |
-2% |
7,569 |
7,707 |
-2% |
- |
Adjusted EBITDA |
1,755 |
1,611 |
9% |
1,755 |
1,704 |
3% |
3% |
Adjusted Operating Income |
1,167 |
1,043 |
12% |
1,167 |
1,069 |
9% |
9% |
Adjusted net income per diluted share |
2.33 |
1.88 |
24% |
2.33 |
NA |
NA |
NA |
Note: Pro forma is defined as the combined results of GTECH and legacy IGT for period prior to the second quarter of 2015. Adjusted operating income, adjusted EBITDA, 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. |
Comparability of Results
All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise.
As a result of the combination of GTECH S.p.A. ("GTECH") and
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.
Reported 2016 results were impacted by the strengthening of the U.S. dollar compared to the euro; the daily average Euro to U.S. dollar foreign exchange rate was 1.08 in the fourth quarter of 2016 compared to 1.10 in the fourth quarter of 2015, and was 1.11 for the full year 2016 period compared to 1.11 in 2015. Constant currency changes for 2016 are calculated using the same foreign exchange rates as the corresponding 2015 period.
Management believes that referring to certain pro forma, constant currency, or adjusted measures is a more useful way to evaluate the Company's underlying performance.
Overview of Consolidated Fourth Quarter Results
Consolidated revenue declined 3% to
Global lottery same-store revenue, excluding
Adjusted EBITDA of
Interest expense was
Net income attributable to IGT was
Cash from operations was
Cash and cash equivalents were
Operating Segment Review
North America Gaming & Interactive
Revenue for the North America Gaming & Interactive segment was
Gaming service revenue was
Product sales rose 20% to
Operating income for North America Gaming & Interactive was
North America Lottery
North America Lottery revenue was
Service revenue of
Product sales were
Operating income for North America Lottery increased 54% to
International
International revenue was
International lottery same-store revenue increased 2.6% on broad-based geographical strength that was tempered by weakness in the United Kingdom.
International gaming service revenue rose 6% on a constant currency basis, primarily due to growth in the commercial gaming installed base, and despite approximately 600 units that were converted to product sales. The installed base grew in
Product sales were below the prior-year period, mostly on lottery product sales, which reflect the natural variability of that business. Gaming terminal sales declined slightly on lower unit volume. Systems sales increased double-digits year-over-year. The segment shipped a total of 4,901 gaming machines compared to 4,965 last year.
International operating income was
Total Lotto wagers in the quarter were €2,141 million, 15% greater than the €1,855 million achieved in the prior-year period. Strong Lotto performance was a result of significant late number activity and high single-digit growth in 10eLotto. Excluding late numbers, Lotto wagers increased 2% over the same period last year. Instant-ticket wagers were €2,289 million versus €2,391 million in the fourth quarter of 2015.
Machine gaming service revenue was down given the prior-year Stability Law reclassification. Sports betting wagers increased 6% on growth in live wagers.
Operating income for the
Overview of Consolidated Full Year 2016 Results
Reported consolidated revenue was
During the year, the Company shipped 33,147 gaming machines worldwide and global lottery same-store revenue, excluding
On a reported basis, adjusted EBITDA of
Reported operating income was
Interest expense was
Net income attributable to IGT was
Other Developments
In a separate news release issued today, the Company announced that
Additionally, the Company's board of directors has declared a quarterly cash dividend of
Outlook
The Company currently expects to achieve adjusted EBITDA of
Maintenance capital expenditures are expected to be
The Italy Lotto renewal will require an outlay of approximately
The Company's outlook assumes an average euro/dollar exchange rate of 1.10.
Conference Call and Webcast
Today, at
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 Interactive 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
Contact:
International Game Technology PLC |
||||
Condensed Consolidated Statements of Operations |
||||
($ and shares in thousands, except per share data) |
||||
Unaudited |
||||
For the three months ended |
||||
December 31, |
||||
2016 |
2015 |
|||
Service revenue |
1,061,669 |
1,109,029 |
||
Product sales |
259,547 |
255,928 |
||
Total revenue |
1,321,216 |
1,364,957 |
||
Cost of services |
641,649 |
674,302 |
||
Cost of sales |
179,240 |
180,021 |
||
Selling, general and administrative |
236,547 |
242,997 |
||
Research and development |
87,182 |
84,552 |
||
Restructuring expense |
6,420 |
35,326 |
||
Impairment loss |
31,162 |
12,497 |
||
Transaction expense, net |
1,030 |
3,701 |
||
Total operating expenses |
1,183,230 |
1,233,396 |
||
Operating income |
137,986 |
131,561 |
||
Interest income |
2,553 |
4,765 |
||
Other income (expense), net |
23,359 |
(2,074) |
||
Foreign exchange gain, net |
195,587 |
91,105 |
||
Interest expense |
(115,520) |
(119,334) |
||
Total non-operating income (expenses) |
105,979 |
(25,538) |
||
Income before provision for income taxes |
243,965 |
106,023 |
||
(Benefit from) provision for income taxes |
(5,387) |
22,990 |
||
Net income |
249,352 |
83,033 |
||
Less: Net income attributable to non-controlling interests |
16,034 |
9,533 |
||
Net income attributable to IGT PLC |
233,318 |
73,500 |
||
Net income attributable to IGT PLC per common share - basic |
1.15 |
0.37 |
||
Net income attributable to IGT PLC per common share - diluted |
1.15 |
0.37 |
||
Weighted-average shares - basic |
202,324 |
199,862 |
||
Weighted-average shares - diluted |
203,146 |
200,731 |
International Game Technology PLC |
||||
Condensed Consolidated Statements of Operations |
||||
($ and shares in thousands, except per share data) |
||||
Unaudited |
||||
For the year ended |
||||
December 31, |
||||
2016 |
2015 |
|||
Service revenue |
4,375,586 |
3,977,693 |
||
Product sales |
778,310 |
711,363 |
||
Total revenue |
5,153,896 |
4,689,056 |
||
Cost of services |
2,553,479 |
2,417,315 |
||
Cost of sales |
582,358 |
520,343 |
||
Selling, general and administrative |
945,824 |
795,252 |
||
Research and development |
343,531 |
277,401 |
||
Restructuring expense |
27,934 |
76,896 |
||
Impairment loss |
37,744 |
12,497 |
||
Transaction expense, net |
2,590 |
49,396 |
||
Total operating expenses |
4,493,460 |
4,149,100 |
||
Operating income |
660,436 |
539,956 |
||
Interest income |
12,840 |
17,681 |
||
Other income (expense), net |
18,365 |
(122,295) |
||
Foreign exchange gain, net |
101,040 |
5,611 |
||
Interest expense |
(469,268) |
(457,984) |
||
Total non-operating expenses |
(337,023) |
(556,987) |
||
Income (loss) before provision for income taxes |
323,413 |
(17,031) |
||
Provision for income taxes |
59,206 |
38,896 |
||
Net income (loss) |
264,207 |
(55,927) |
||
Less: Net income attributable to non-controlling interests |
52,870 |
19,647 |
||
Net income (loss) attributable to IGT PLC |
211,337 |
(75,574) |
||
Net income (loss) attributable to IGT PLC per common share - basic |
1.05 |
(0.39) |
||
Net income (loss) attributable to IGT PLC per common share - diluted |
1.05 |
(0.39) |
||
Weighted-average shares - basic |
201,511 |
192,398 |
||
Weighted-average shares - diluted |
202,214 |
192,398 |
International Game Technology PLC |
|||
Condensed Consolidated Balance Sheets |
|||
($ thousands) |
|||
Unaudited |
|||
December 31, |
|||
2016 |
2015 |
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
294,094 |
627,484 |
|
Restricted cash and investments |
247,222 |
169,101 |
|
Trade and other receivables, net |
947,237 |
959,592 |
|
Inventories |
347,494 |
269,982 |
|
Other current assets |
424,727 |
423,701 |
|
Income taxes receivable |
28,792 |
35,514 |
|
Total current assets |
2,289,566 |
2,485,374 |
|
Systems, equipment and other assets related to contracts, net |
1,199,674 |
1,127,518 |
|
Property, plant and equipment, net |
357,841 |
349,677 |
|
Goodwill, net |
6,810,012 |
6,830,499 |
|
Intangible assets, net |
2,874,031 |
3,335,633 |
|
Other non-current assets |
1,497,662 |
937,917 |
|
Deferred income taxes |
31,376 |
48,074 |
|
Total non-current assets |
12,770,596 |
12,629,318 |
|
Total Assets |
15,060,162 |
15,114,692 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
1,216,079 |
1,057,860 |
|
Other current liabilities |
1,097,045 |
922,586 |
|
Current portion of long-term debt |
77 |
160 |
|
Income taxes payable |
28,590 |
30,020 |
|
Total current liabilities |
2,341,791 |
2,010,626 |
|
Long-term debt, less current portion |
7,863,085 |
8,334,013 |
|
Deferred income taxes |
761,924 |
941,418 |
|
Other non-current liabilities |
444,556 |
462,493 |
|
Total non-current liabilities |
9,069,565 |
9,737,924 |
|
Total Liabilities |
11,411,356 |
11,748,550 |
|
Commitments and contingencies |
- |
- |
|
Shareholders' and mezzanine equity |
3,648,806 |
3,366,142 |
|
Total liabilities and shareholders' equity |
15,060,162 |
15,114,692 |
International Game Technology PLC |
||||
Consolidated Statements of Cash Flows |
||||
($ thousands) |
||||
Unaudited |
||||
For the year ended December 31, |
||||
2016 |
2015 |
|||
Operating activities |
||||
Net income (loss) |
264,207 |
(55,927) |
||
Adjustments for: |
||||
Amortization |
492,021 |
410,264 |
||
Depreciation |
390,448 |
369,564 |
||
Amortization of upfront payments to customers |
116,980 |
107,812 |
||
Impairment loss |
37,744 |
12,497 |
||
Stock-based compensation expense |
26,346 |
36,067 |
||
Debt issuance cost amortization |
18,347 |
40,366 |
||
Foreign exchange gain, net |
(101,040) |
(5,611) |
||
Loss on extinguishment of debt |
- |
73,806 |
||
Other, net |
(142) |
50,626 |
||
Cash flows before changes in operating assets and liabilities |
1,244,911 |
1,039,464 |
||
Changes in operating assets and liabilities: |
||||
Trade and other receivables |
(23,758) |
83,218 |
||
Inventories |
(61,026) |
72 |
||
Accounts payable |
(27,123) |
(53,762) |
||
Other assets and liabilities |
(147,661) |
(282,995) |
||
Net cash flows from operating activities |
985,343 |
785,997 |
||
Investing activities |
||||
Upfront payments to customers |
(665,260) |
- |
||
Capital expenditures |
(557,238) |
(402,634) |
||
Purchases of jackpot annuity investments |
(2,596) |
(6,799) |
||
Proceeds from jackpot annuity investments |
16,565 |
36,215 |
||
Proceeds from sale of assets |
185,798 |
230,587 |
||
Acquisition of IGT, net of cash acquired |
- |
(3,241,415) |
||
Other |
2,735 |
22,523 |
||
Net cash flows used in investing activities |
(1,019,996) |
(3,361,523) |
||
Financing activities |
||||
Principal payments on long-term debt |
(357,513) |
(2,714,867) |
||
Dividends paid |
(161,179) |
(209,589) |
||
Return of capital - non-controlling interest |
(35,407) |
(30,568) |
||
Dividends paid - non-controlling interest |
(32,717) |
(29,156) |
||
Debt issuance costs paid |
(10,825) |
(84,859) |
||
Payments for accelerated stock awards |
(3,489) |
(14,867) |
||
Proceeds from stock options |
12,699 |
10,672 |
||
Net receipts from (payments of) financial liabilities |
30,595 |
(21,539) |
||
Capital increase - non-controlling interest |
256,455 |
9,049 |
||
Payments in connection with note consents |
- |
(29,022) |
||
Payments on bridge facility |
- |
(51,409) |
||
Payments in connection with the early extinguishment of debt |
- |
(79,526) |
||
Payments to withdrawing shareholders |
- |
(407,759) |
||
Proceeds from interest rate swaps |
- |
67,773 |
||
Proceeds from issuance of long-term debt |
- |
6,521,991 |
||
Other |
(10,758) |
(16,158) |
||
Net cash flows (used in) provided by financing activities |
(312,139) |
2,920,166 |
||
Net (decrease) increase in cash and cash equivalents |
(346,792) |
344,640 |
||
Effect of exchange rate changes on cash |
13,402 |
(34,262) |
||
Cash and cash equivalents at the beginning of the period |
627,484 |
317,106 |
||
Cash and cash equivalents at the end of the period |
294,094 |
627,484 |
||
Supplemental Cash Flow Information: |
||||
Interest paid |
(450,655) |
(365,479) |
||
Income taxes paid |
(183,278) |
(199,195) |
International Game Technology PLC |
|||
Net Debt |
|||
($ thousands) |
|||
December 31, |
|||
2016 |
2015 |
||
Long-term debt, less current portion |
|||
6.250% Senior Secured Notes due 2022 |
1,472,150 |
1,468,875 |
|
6.500% Senior Secured Notes due 2025 |
1,085,537 |
1,084,249 |
|
4.750% Senior Secured Notes due 2023 |
884,917 |
912,418 |
|
4.125% Senior Secured Notes due 2020 |
730,465 |
752,212 |
|
5.625% Senior Secured Notes due 2020 |
593,954 |
592,245 |
|
7.500% Senior Secured Notes due 2019 |
521,894 |
530,009 |
|
6.625% Senior Secured Notes due 2018 |
521,556 |
533,915 |
|
4.750% Senior Secured Notes due 2020 |
509,050 |
520,649 |
|
5.500% Senior Secured Notes due 2020 |
126,294 |
126,833 |
|
5.350% Senior Secured Notes due 2023 |
61,187 |
61,303 |
|
Senior Secured Notes |
6,507,004 |
6,582,708 |
|
Term Loan Facilities due 2019 |
839,552 |
866,785 |
|
Revolving Credit Facilities due 2021 |
516,529 |
834,968 |
|
Capital Securities |
- |
49,472 |
|
Other |
- |
80 |
|
Long-term debt, less current portion |
7,863,085 |
8,334,013 |
|
Current portion of long-term debt |
77 |
160 |
|
Total debt |
7,863,162 |
8,334,173 |
|
Cash and cash equivalents |
294,094 |
627,484 |
|
Net debt |
7,569,068 |
7,706,689 |
International Game Technology PLC |
||||
Adjusted EBITDA and Free Cash Flow |
||||
Reconciliations of Non-GAAP Financial Measures |
||||
($ thousands) |
||||
For the three months ended |
||||
December 31, |
||||
2016 |
2015 |
|||
Net income |
249,352 |
83,033 |
||
(Benefit from) provision for income taxes |
(5,387) |
22,990 |
||
Non-operating (income) expenses |
(105,979) |
25,538 |
||
Amortization |
114,858 |
124,000 |
||
Depreciation |
97,164 |
109,888 |
||
Amortization of upfront payments to customers |
31,820 |
26,634 |
||
Impairment loss |
31,162 |
12,497 |
||
Restructuring expense |
6,420 |
35,326 |
||
Stock-based compensation expense |
1,844 |
3,335 |
||
Transaction expense, net |
1,030 |
3,701 |
||
Non-cash purchase accounting (excluding D&A) |
(126) |
1,865 |
||
Adjusted EBITDA |
422,158 |
448,807 |
||
Cash flows from operating activities |
364,346 |
315,003 |
||
Capital expenditures |
(185,741) |
(113,891) |
||
Upfront payments to customers |
(274,870) |
- |
||
Free Cash Flow |
(96,265) |
201,112 |
International Game Technology PLC |
||||||||
Adjusted EBITDA and Free Cash Flow |
||||||||
Reconciliations of Non-GAAP Financial Measures |
||||||||
($ thousands) |
||||||||
For the year ended |
||||||||
December 31, 2016 |
December 31, 2015 |
|||||||
As Reported |
Legacy IGT |
Pro Forma |
||||||
Net income (loss) |
264,207 |
(55,927) |
(13,085) |
(69,012) |
||||
Provision for (benefit from) income taxes |
59,206 |
38,896 |
(4,126) |
34,770 |
||||
Non-operating expenses |
337,023 |
556,987 |
10,057 |
567,044 |
||||
Amortization |
492,021 |
410,264 |
6,107 |
416,371 |
||||
Depreciation |
390,448 |
369,564 |
28,960 |
398,524 |
||||
Amortization of upfront payments to customers |
116,980 |
107,812 |
3,556 |
111,368 |
||||
Impairment loss |
37,744 |
12,497 |
6,100 |
18,597 |
||||
Restructuring expense |
27,934 |
76,896 |
- |
76,896 |
||||
Stock-based compensation expense |
26,346 |
36,067 |
5,951 |
42,018 |
||||
Transaction expense, net |
2,590 |
34,529 |
18,782 |
53,311 |
||||
Non-cash purchase accounting (excluding D&A) |
795 |
23,099 |
- |
23,099 |
||||
Other |
- |
- |
30,956 |
30,956 |
||||
Adjusted EBITDA |
1,755,294 |
1,610,684 |
93,258 |
1,703,942 |
||||
Cash flows from operating activities |
985,343 |
785,997 |
82,698 |
868,695 |
||||
Capital expenditures |
(557,238) |
(402,634) |
(26,096) |
(428,730) |
||||
Upfront payments to customers |
(665,260) |
- |
- |
- |
||||
Free Cash Flow |
(237,155) |
383,363 |
56,602 |
439,965 |
International Game Technology PLC |
||||||||||||
Condensed Consolidated Statement of Operations |
||||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||||
($ and shares in thousands, except per share data) |
||||||||||||
Adjustments |
||||||||||||
Q4 2016 |
Impairment/ |
Transaction |
Q4 2016 |
|||||||||
As |
Purchase |
Foreign |
Restructuring |
(Income) |
As |
|||||||
Reported |
Accounting |
Exchange |
Expense |
Expense |
Adjusted |
|||||||
Total revenue |
1,321,216 |
244 |
- |
- |
- |
1,321,460 |
||||||
Cost of services |
641,649 |
(44,186) |
- |
- |
- |
597,463 |
||||||
Cost of sales |
179,240 |
(29,845) |
- |
- |
- |
149,395 |
||||||
Selling, general and administrative |
236,547 |
(29,468) |
- |
- |
- |
207,079 |
||||||
Research and development |
87,182 |
(277) |
- |
- |
- |
86,905 |
||||||
Restructuring expense |
6,420 |
- |
- |
(6,420) |
- |
- |
||||||
Impairment loss |
31,162 |
(30,000) |
- |
(1,162) |
- |
- |
||||||
Transaction expense, net |
1,030 |
- |
- |
- |
(1,030) |
- |
||||||
Total operating expenses |
1,183,230 |
(133,776) |
- |
(7,582) |
(1,030) |
1,040,842 |
||||||
Operating income |
137,986 |
134,020 |
- |
7,582 |
1,030 |
280,618 |
||||||
Foreign exchange gain, net |
195,587 |
- |
(195,587) |
- |
- |
- |
||||||
Other income, net |
23,359 |
11,672 |
- |
- |
- |
35,031 |
||||||
Interest expense, net |
(112,967) |
2,084 |
- |
- |
- |
(110,883) |
||||||
Total non-operating income (expenses) |
105,979 |
13,756 |
(195,587) |
- |
- |
(75,852) |
||||||
Income before provision for income taxes |
243,965 |
147,776 |
(195,587) |
7,582 |
1,030 |
204,766 |
||||||
(Benefit from) provision for income taxes (a) |
(5,387) |
51,662 |
(50,323) |
13,230 |
356 |
9,538 |
||||||
Net income |
249,352 |
96,114 |
(145,264) |
(5,648) |
674 |
195,228 |
||||||
Less: Net income attributable to non-controlling interests |
16,034 |
26 |
- |
- |
- |
16,060 |
||||||
Net income attributable to IGT PLC |
233,318 |
96,088 |
(145,264) |
(5,648) |
674 |
179,168 |
||||||
Net income per common share - diluted |
1.15 |
0.88 |
||||||||||
Weighted-average shares - diluted |
203,146 |
203,146 |
||||||||||
(a) Provision for income taxes was determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated. |
International Game Technology PLC |
|||||||||||||
Condensed Consolidated Statement of Operations |
|||||||||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||
($ and shares in thousands, except per share data) |
|||||||||||||
Adjustments |
|||||||||||||
Q4 2015 |
Impairment/ |
Transaction |
Q4 2015 |
||||||||||
As |
Purchase |
Foreign |
Restructuring |
and Refinancing |
As |
||||||||
Reported |
Accounting |
Exchange |
Expense |
Expense |
Adjusted |
||||||||
Total revenue |
1,364,957 |
1,622 |
- |
- |
- |
1,366,579 |
|||||||
Cost of services |
674,302 |
(44,064) |
- |
- |
- |
630,238 |
|||||||
Cost of sales |
180,021 |
(29,897) |
- |
- |
- |
150,124 |
|||||||
Selling, general and administrative |
242,997 |
(34,295) |
- |
- |
- |
208,702 |
|||||||
Research and development |
84,552 |
(466) |
- |
- |
- |
84,086 |
|||||||
Restructuring expense |
35,326 |
- |
- |
(35,326) |
- |
- |
|||||||
Impairment loss |
12,497 |
- |
- |
(12,497) |
- |
- |
|||||||
Transaction expense, net |
3,701 |
- |
- |
- |
(3,701) |
- |
|||||||
Total operating expenses |
1,233,396 |
(108,722) |
- |
(47,823) |
(3,701) |
1,073,150 |
|||||||
Operating income |
131,561 |
110,344 |
- |
47,823 |
3,701 |
293,429 |
|||||||
Interest expense, net |
(114,569) |
3,531 |
- |
- |
- |
(111,038) |
|||||||
Other (expense) income, net |
(2,074) |
13,540 |
- |
- |
- |
11,466 |
|||||||
Foreign exchange gain, net |
91,105 |
- |
(91,105) |
- |
- |
- |
|||||||
Total non-operating expenses |
(25,538) |
17,071 |
(91,105) |
- |
- |
(99,572) |
|||||||
Income before provision for income taxes |
106,023 |
127,415 |
(91,105) |
47,823 |
3,701 |
193,857 |
|||||||
Provision for income taxes (a) |
22,990 |
40,283 |
(22,895) |
16,165 |
414 |
56,957 |
|||||||
Net income |
83,033 |
87,132 |
(68,210) |
31,658 |
3,287 |
136,900 |
|||||||
Less: Net income attributable to non-controlling interests |
9,533 |
25 |
- |
- |
- |
9,558 |
|||||||
Net income attributable to IGT PLC |
73,500 |
87,107 |
(68,210) |
31,658 |
3,287 |
127,342 |
|||||||
Net income per common share - diluted |
0.37 |
0.63 |
|||||||||||
Weighted-average shares - diluted |
200,731 |
200,731 |
|||||||||||
(a) Provision for income taxes was determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated. |
International Game Technology PLC |
||||||||||||
Condensed Consolidated Statement of Operations |
||||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||||
($ and shares in thousands, except per share data) |
||||||||||||
Year to date |
Adjustments |
Year to date |
||||||||||
December 2016 |
Impairment/ |
December 2016 |
||||||||||
As |
Purchase |
Foreign |
Restructuring |
Transaction |
As |
|||||||
Reported |
Accounting |
Exchange |
Expense |
Expense |
Adjusted |
|||||||
Total revenue |
5,153,896 |
1,576 |
- |
- |
- |
5,155,472 |
||||||
Cost of services |
2,553,479 |
(181,552) |
- |
- |
- |
2,371,927 |
||||||
Cost of sales |
582,358 |
(118,936) |
- |
- |
- |
463,422 |
||||||
Selling, general and administrative |
945,824 |
(134,325) |
- |
- |
- |
811,499 |
||||||
Research and development |
343,531 |
(1,736) |
- |
- |
- |
341,795 |
||||||
Restructuring expense |
27,934 |
- |
- |
(27,934) |
- |
- |
||||||
Impairment loss |
37,744 |
(30,000) |
- |
(7,744) |
- |
- |
||||||
Transaction expense, net |
2,590 |
- |
- |
- |
(2,590) |
- |
||||||
Total operating expenses |
4,493,460 |
(466,549) |
- |
(35,678) |
(2,590) |
3,988,643 |
||||||
Operating income |
660,436 |
468,125 |
- |
35,678 |
2,590 |
1,166,829 |
||||||
Foreign exchange gain, net |
101,040 |
- |
(101,040) |
- |
- |
- |
||||||
Other income, net |
18,365 |
15,553 |
- |
- |
- |
33,918 |
||||||
Interest expense, net |
(456,428) |
8,231 |
- |
- |
- |
(448,197) |
||||||
Total non-operating expenses |
(337,023) |
23,784 |
(101,040) |
- |
- |
(414,279) |
||||||
Income before provision for income taxes |
323,413 |
491,909 |
(101,040) |
35,678 |
2,590 |
752,550 |
||||||
Provision for income taxes (a) |
59,206 |
174,000 |
(26,892) |
20,948 |
658 |
227,920 |
||||||
Net income |
264,207 |
317,909 |
(74,148) |
14,730 |
1,932 |
524,630 |
||||||
Less: Net income attributable to non-controlling interests |
52,870 |
102 |
- |
- |
- |
52,972 |
||||||
Net income attributable to IGT PLC |
211,337 |
317,807 |
(74,148) |
14,730 |
1,932 |
471,658 |
||||||
Net income per common share - diluted |
1.05 |
2.33 |
||||||||||
Weighted-average shares - diluted |
202,214 |
202,214 |
||||||||||
(a) Provision for income taxes was determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated. |
International Game Technology PLC |
||||||||||||||||
Condensed Consolidated Statement of Operations |
||||||||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||||||||
($ and shares in thousands, except per share data) |
||||||||||||||||
Year to date |
Adjustments |
Year to date |
Year to date |
|||||||||||||
December 2015 |
Impairment/ |
Transaction |
December 2015 |
December 2015 |
||||||||||||
As |
Purchase |
Foreign |
Restructuring |
and Refinancing |
As |
Pro Forma |
Pro forma |
|||||||||
Reported |
Accounting |
Exchange |
Expense |
Expense |
Adjusted |
Adjustments |
and Adjusted |
|||||||||
Total revenue |
4,689,056 |
15,541 |
- |
- |
- |
4,704,597 |
399,387 |
5,103,984 |
||||||||
Cost of services |
2,417,315 |
(148,750) |
- |
- |
- |
2,268,565 |
113,306 |
2,381,871 |
||||||||
Cost of sales |
520,343 |
(96,661) |
- |
- |
- |
423,682 |
63,355 |
487,037 |
||||||||
Selling, general and administrative |
795,252 |
(101,319) |
- |
- |
- |
693,933 |
134,166 |
828,099 |
||||||||
Research and development |
277,401 |
(2,159) |
- |
- |
- |
275,242 |
62,760 |
338,002 |
||||||||
Restructuring expense |
76,896 |
- |
- |
(76,896) |
- |
- |
- |
- |
||||||||
Impairment loss |
12,497 |
- |
- |
(12,497) |
- |
- |
- |
- |
||||||||
Transaction expense, net |
49,396 |
- |
- |
- |
(49,396) |
- |
- |
- |
||||||||
Total operating expenses |
4,149,100 |
(348,889) |
- |
(89,393) |
(49,396) |
3,661,422 |
373,587 |
4,035,009 |
||||||||
Operating income |
539,956 |
364,430 |
- |
89,393 |
49,396 |
1,043,175 |
25,800 |
1,068,975 |
||||||||
Interest expense, net |
(440,303) |
3,530 |
- |
- |
- |
(436,773) |
||||||||||
Other (expense) income, net |
(122,295) |
19,581 |
- |
- |
117,877 |
15,163 |
||||||||||
Foreign exchange gain, net |
5,611 |
- |
(5,611) |
- |
- |
- |
||||||||||
Total non-operating expenses |
(556,987) |
23,111 |
(5,611) |
- |
117,877 |
(421,610) |
||||||||||
(Loss) income before provision for income taxes |
(17,031) |
387,541 |
(5,611) |
89,393 |
167,273 |
621,565 |
||||||||||
Provision for income taxes (a) |
38,896 |
132,298 |
(3,127) |
29,165 |
41,529 |
238,761 |
||||||||||
Net (loss) income |
(55,927) |
255,243 |
(2,484) |
60,228 |
125,744 |
382,804 |
||||||||||
Less: Net income attributable to non-controlling interests |
19,647 |
102 |
- |
- |
- |
19,749 |
||||||||||
Net (loss) income attributable to IGT PLC |
(75,574) |
255,141 |
(2,484) |
60,228 |
125,744 |
363,055 |
||||||||||
Net (loss) income per common share - diluted |
(0.39) |
1.88 |
||||||||||||||
Weighted-average shares - diluted |
192,398 |
193,559 |
||||||||||||||
(a) Provision for income taxes was determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated. |
International Game Technology PLC Segment Performance (Pro forma) |
|||||||||||||
Revenue Detail |
|||||||||||||
($ millions) |
|||||||||||||
INTERNATIONAL GAME TECHNOLOGY PLC |
Quarter Change |
YTD Change |
|||||||||||
2015 |
2016 |
Percentage |
Constant FX |
Percentage |
Constant FX |
||||||||
Q4 |
YTD |
Q4 |
YTD |
Q4 |
Q4 |
YTD |
YTD |
||||||
Gaming |
Total Revenue |
762 |
2,725 |
730 |
2,667 |
-4.3% |
-3.3% |
-2.2% |
-1.4% |
||||
Gaming Services |
547 |
2,036 |
492 |
1,976 |
-9.9% |
-8.5% |
-3.0% |
-1.9% |
|||||
Terminal |
359 |
1,343 |
325 |
1,282 |
-9.6% |
-8.6% |
-4.6% |
-3.7% |
|||||
Social (DDI) |
84 |
317 |
61 |
279 |
-27.6% |
-27.4% |
-12.0% |
-12.0% |
|||||
Other |
104 |
375 |
107 |
415 |
3.1% |
6.8% |
10.5% |
13.1% |
|||||
Product Sales |
216 |
690 |
237 |
691 |
10.0% |
9.9% |
0.2% |
0.2% |
|||||
Terminal |
154 |
482 |
157 |
449 |
1.9% |
1.9% |
-6.7% |
-6.8% |
|||||
Other |
62 |
208 |
81 |
242 |
30.0% |
29.6% |
16.4% |
16.5% |
|||||
Lottery |
Total Revenue |
521 |
2,046 |
514 |
2,170 |
-1.3% |
-0.8% |
6.1% |
6.6% |
||||
Lottery Services |
484 |
1,930 |
494 |
2,086 |
1.9% |
2.5% |
8.0% |
8.6% |
|||||
FM/Concessions |
430 |
1,717 |
444 |
1,829 |
3.1% |
4.5% |
6.5% |
7.3% |
|||||
LMA |
35 |
128 |
37 |
174 |
5.0% |
5.0% |
36.3% |
36.3% |
|||||
Other Services |
19 |
85 |
13 |
82 |
-30.8% |
-49.8% |
-3.9% |
-6.9% |
|||||
Product Sales |
36 |
115 |
20 |
85 |
-44.6% |
-44.1% |
-26.5% |
-26.2% |
|||||
Terminal |
15 |
41 |
1 |
11 |
-96.5% |
-96.5% |
-74.4% |
-74.1% |
|||||
Systems/Other |
22 |
74 |
20 |
74 |
-9.2% |
-8.3% |
0.2% |
0.6% |
|||||
Other |
Total Revenue |
82 |
318 |
78 |
317 |
-4.7% |
-4.1% |
-0.2% |
1.1% |
||||
Service Revenue |
78 |
312 |
76 |
314 |
-2.8% |
-2.7% |
0.8% |
1.8% |
|||||
Product Sales |
4 |
5 |
2 |
3 |
-43.5% |
-32.1% |
-53.2% |
-42.2% |
|||||
Consolidated |
Revenue |
1,365 |
5,088 |
1,321 |
5,154 |
-3.2% |
-2.4% |
1.3% |
2.0% |
||||
Operating Income: |
|||||||||||||
Segment Total |
336 |
1,245 |
340 |
1,374 |
1.0% |
1.5% |
10.4% |
10.9% |
|||||
Purchase Accounting |
(110) |
(372) |
(134) |
(468) |
21.5% |
21.6% |
25.9% |
26.0% |
|||||
Corporate Support |
(94) |
(340) |
(68) |
(246) |
-28.3% |
-26.3% |
-27.7% |
-26.2% |
|||||
Total |
132 |
533 |
138 |
660 |
4.9% |
4.6% |
23.9% |
23.9% |
|||||
NORTH AMERICA GAMING & INTERACTIVE |
Quarter Change |
YTD Change |
|||||||||||
2015 |
2016 |
Percentage |
Constant FX |
Percentage |
Constant FX |
||||||||
Q4 |
YTD |
Q4 |
YTD |
Q4 |
Q4 |
YTD |
YTD |
||||||
Gaming |
Total Revenue |
378 |
1,413 |
368 |
1,373 |
-2.5% |
-2.6% |
-2.8% |
-2.7% |
||||
Gaming Services |
263 |
1,025 |
230 |
975 |
-12.3% |
-12.2% |
-4.8% |
-4.8% |
|||||
Terminal |
137 |
571 |
126 |
525 |
-7.8% |
-7.8% |
-8.1% |
-8.0% |
|||||
Social (DDI) |
84 |
317 |
61 |
279 |
-27.6% |
-27.4% |
-12.0% |
-12.0% |
|||||
Other |
42 |
137 |
44 |
171 |
3.2% |
3.2% |
25.3% |
25.3% |
|||||
Product Sales |
115 |
388 |
138 |
398 |
19.8% |
19.5% |
2.7% |
2.8% |
|||||
Terminal |
80 |
267 |
85 |
250 |
6.4% |
6.0% |
-6.4% |
-6.4% |
|||||
Other |
35 |
121 |
53 |
148 |
50.2% |
50.2% |
23.0% |
23.2% |
|||||
Total |
Revenue |
378 |
1,413 |
368 |
1,373 |
-2.5% |
-2.6% |
-2.8% |
-2.7% |
||||
Operating Income |
106 |
335 |
101 |
344 |
-5.3% |
-8.6% |
2.8% |
-0.7% |
|||||
NORTH AMERICA LOTTERY |
Quarter Change |
YTD Change |
|||||||||||
2015 |
2016 |
Percentage |
Constant FX |
Percentage |
Constant FX |
||||||||
Q4 |
YTD |
Q4 |
YTD |
Q4 |
Q4 |
YTD |
YTD |
||||||
Gaming |
Total Revenue |
37 |
149 |
35 |
146 |
-7.0% |
-6.9% |
-1.6% |
-1.5% |
||||
Gaming Services |
37 |
148 |
35 |
146 |
-5.9% |
-5.9% |
-1.0% |
-0.9% |
|||||
Terminal |
25 |
103 |
24 |
100 |
-5.6% |
-5.6% |
-2.8% |
-2.8% |
|||||
Social (DDI) |
0 |
0 |
0 |
0 |
0.0% |
0.0% |
0.0% |
0.0% |
|||||
Other |
12 |
45 |
11 |
46 |
-6.6% |
-6.4% |
3.2% |
3.5% |
|||||
Product Sales |
0 |
1 |
(0) |
0 |
0.0% |
0.0% |
-86.9% |
-86.6% |
|||||
Terminal |
(0) |
0 |
0 |
(0) |
0.0% |
0.0% |
0.0% |
0.0% |
|||||
Other |
0 |
1 |
(0) |
0 |
0.0% |
0.0% |
-84.4% |
-84.1% |
|||||
Lottery |
Total Revenue |
232 |
916 |
250 |
1,047 |
7.7% |
7.7% |
14.3% |
14.3% |
||||
Lottery Services |
219 |
864 |
232 |
982 |
6.3% |
6.3% |
13.6% |
13.6% |
|||||
FM/Concessions |
161 |
636 |
159 |
686 |
-1.1% |
-1.1% |
7.9% |
7.9% |
|||||
LMA |
35 |
128 |
37 |
174 |
5.0% |
5.0% |
36.3% |
36.3% |
|||||
Other Services |
22 |
101 |
36 |
122 |
62.0% |
62.0% |
21.1% |
21.1% |
|||||
Product Sales |
13 |
52 |
17 |
65 |
31.1% |
31.2% |
25.7% |
25.8% |
|||||
Terminal |
0 |
5 |
0 |
10 |
-28.0% |
-27.9% |
79.0% |
79.0% |
|||||
Systems/Other |
13 |
46 |
17 |
55 |
32.3% |
32.4% |
19.5% |
19.6% |
|||||
Total |
Revenue |
269 |
1,065 |
284 |
1,194 |
5.7% |
5.7% |
12.1% |
12.1% |
||||
Operating Income |
43 |
195 |
65 |
300 |
53.8% |
53.6% |
54.4% |
54.0% |
|||||
INTERNATIONAL |
Quarter Change |
YTD Change |
|||||||||||
2015 |
2016 |
Percentage |
Constant FX |
Percentage |
Constant FX |
||||||||
Q4 |
YTD |
Q4 |
YTD |
Q4 |
Q4 |
YTD |
YTD |
||||||
Gaming |
Total Revenue |
148 |
502 |
144 |
473 |
-3.0% |
0.5% |
-5.8% |
-2.0% |
||||
Gaming Services |
47 |
197 |
44 |
181 |
-5.5% |
5.5% |
-8.4% |
1.3% |
|||||
Terminal |
13 |
59 |
12 |
51 |
-1.6% |
13.0% |
-14.5% |
2.4% |
|||||
Social (DDI) |
0 |
0 |
0 |
0 |
0.0% |
0.0% |
0.0% |
0.0% |
|||||
Other |
34 |
138 |
32 |
130 |
-7.0% |
2.8% |
-5.8% |
0.8% |
|||||
Product Sales |
101 |
305 |
99 |
293 |
-1.8% |
-1.8% |
-4.1% |
-4.1% |
|||||
Terminal |
74 |
214 |
72 |
199 |
-2.7% |
-2.5% |
-6.9% |
-7.0% |
|||||
Other |
27 |
91 |
28 |
93 |
0.9% |
0.0% |
2.5% |
2.5% |
|||||
Lottery |
Total Revenue |
95 |
342 |
59 |
282 |
-38.2% |
-37.5% |
-17.4% |
-14.4% |
||||
Lottery Services |
72 |
279 |
56 |
263 |
-22.2% |
-21.5% |
-5.6% |
-2.1% |
|||||
FM/Concessions |
55 |
206 |
51 |
206 |
-6.1% |
0.4% |
0.3% |
6.1% |
|||||
LMA |
0 |
0 |
0 |
0 |
0.0% |
0.0% |
0.0% |
0.0% |
|||||
Other Services |
17 |
73 |
4 |
57 |
-74.6% |
-93.0% |
-22.3% |
-25.3% |
|||||
Product Sales |
23 |
63 |
3 |
19 |
-87.6% |
-86.8% |
-69.3% |
-68.7% |
|||||
Terminal |
15 |
36 |
0 |
1 |
-97.8% |
-97.8% |
-97.4% |
-97.1% |
|||||
Systems/Other |
9 |
27 |
3 |
18 |
-70.6% |
-68.6% |
-32.5% |
-31.6% |
|||||
Other |
Total Revenue |
22 |
78 |
18 |
72 |
-20.8% |
-21.1% |
-8.6% |
-3.8% |
||||
Service Revenue |
18 |
73 |
15 |
69 |
-15.9% |
-18.8% |
-5.2% |
-0.9% |
|||||
Product Sales |
4 |
5 |
2 |
3 |
-43.5% |
-32.1% |
-53.2% |
-42.2% |
|||||
Total |
Revenue |
265 |
923 |
220 |
827 |
-17.1% |
-14.9% |
-10.3% |
-6.8% |
||||
Operating Income |
55 |
165 |
44 |
144 |
-20.1% |
-13.3% |
-12.7% |
-1.7% |
|||||
ITALY |
Quarter Change |
YTD Change |
|||||||||||
2015 |
2016 |
Percentage |
Constant FX |
Percentage |
Constant FX |
||||||||
Q4 |
YTD |
Q4 |
YTD |
Q4 |
Q4 |