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INTERNATIONAL GAME TECHNOLOGY PLC REPORTS SECOND QUARTER 2023 RESULTS

  • Delivered strong Q2'23 financial performance with revenue and operating income margin meeting high end of outlook range
  • Revenue of $1.06 billion increased 3% as reported, 11% net of Italy commercial services sale, driven by strong key performance indicators and player demand trends
  • Operating income rose 10% to $251 million; 24% operating income margin up 150 basis points on margin expansion across segments
  • Adjusted EBITDA up 8% to $443 million; adjusted EBITDA margin increased 190 basis points to 42%
  • Raising full-year 2023 revenue and profit outlook on strong first-half 2023 performance

LONDON, Aug. 1, 2023 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the second quarter ended June 30, 2023. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

"Our second-quarter and first-half results reflect solid revenue and profit momentum across all business segments," said Vince Sadusky, CEO of IGT. "We achieved the high end of our outlook by executing key strategic initiatives and growing demand for IGT's compelling content and solutions. We are solidly on track to deliver on our 2025 objectives and remain focused on unlocking the intrinsic value of IGT's market-leading businesses."

"Our year-to-date performance showcases the strong cash generation of the business. We have a solid foundation to build from as we continue to invest in our growth objectives, further reduce debt, and return capital to shareholders," said Max Chiara, CFO of IGT. "Based on our first-half results, we are confidently raising our full-year 2023 revenue and operating margin outlook."

Overview of Consolidated Second Quarter 2023 Results


Quarter Ended

Y/Y
Change

Constant
Currency
Change


June 30,


2023


2022

($ in millions)






GAAP Financials:






Revenue






Global Lottery

624


648

(4) %

(5) %

Global Gaming

373


330

13 %

14 %

PlayDigital

59


43

38 %

39 %

Total revenue

1,055


1,021

3 %

3 %







Operating income (loss)






Global Lottery

229


230

— %

(2) %

Global Gaming

71


57

25 %

25 %

PlayDigital

18


8

125 %

132 %

Corporate support expense

(30)


(29)

(4) %

(4) %

Other(1)

(38)


(39)

2 %

2 %

Total operating income

251


228

10 %

9 %

Operating income margin

23.8 %


22.3 %









Earnings per share - diluted

$0.23


$(0.02)

NA








Net cash provided by operating activities

34


196

(83) %








Cash and cash equivalents

461


673

(32) %








Non-GAAP Financial Measures:






Adjusted EBITDA






Global Lottery

332


330

1 %

(1) %

Global Gaming

112


87

28 %

29 %

PlayDigital

22


12

78 %

82 %

Corporate support expense

(22)


(20)

(10) %

(10) %

Total Adjusted EBITDA

443


409

8 %

7 %

Adjusted EBITDA margin

42.0 %


40.1 %









Adjusted earnings per share - diluted

$0.45


$0.57

(21) %








Free cash flow

(72)


117

NA








Adjusted free cash flow

136


117

16 %








Net debt

5,355


5,722

(6) %








(1) Primarily includes purchase price amortization

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

Key Highlights:

  • Secured 10-year brand licensing extension with Sony Pictures Television granting IGT exclusive rights to the legendary Wheel of Fortune® brand across Gaming, Lottery, iGaming, and iLottery as well as non-exclusive rights to distribute Wheel of Fortune content for free-to-play social casinos
  • Awarded 20-year license, as part of a consortium, to operate certain lottery games for Minas Gerais State Lottery in Brazil; executed 10-year contracts in Malta for lottery technology and instant ticket printing; won eight-year iLottery contract in Connecticut; executed four-year transition agreement in Belgium and contract extension in Costa Rica
  • Executed agreement to deploy IGT's award-winning IGT ADVANTAGE™ system at the Rio Hotel & Casino
  • Launched Mystery of the Lamp™ on new PeakCurve™49 cabinet
  • Launched first-ever omnichannel Wheel of Fortune jackpot game in the U.S. and exclusively digital MegaJackpots™ games in Alberta and expanded omnichannel Powerbucks™ games to Alberta, building on success in other Canadian provinces
  • Named "Sportsbook Supplier of the Year" at 2023 SBC Awards North America
  • Won "Diversity and Inclusion" category at 2023 Women in Gaming (WIG) Diversity & Employee Wellbeing Awards

Financial Highlights:
Consolidated revenue grew 3% to $1.06 billion, up from $1.02 billion in the prior year; net of the Italy commercial services sale in September 2022, revenue increased 11%

  • Global Lottery revenue of $624 million was down 4% year-over-year; net of the Italy commercial services sale, revenue rose 8% on strong same-store sales in Italy, execution of a multi-year software licensing agreement for a lottery central management system, and higher LMA incentives
  • Global Gaming revenue of $373 million, up 13% from $330 million in the prior year, on record U.S. & Canada unit shipments for a second quarter period, higher global average selling prices, growth in the installed base across geographies, and robust system sales
  • PlayDigital revenue increased 38% to $59 million, up from $43 million in the prior year, primarily driven by strong player demand trends and contributions from the iSoftBet acquisition

Operating income of $251 million increased 10% from $228 million in the prior year; operating income margin expanded 150 basis points to 24%

  • Global Lottery operating income of $229 million was in line with the prior year despite the sale of Italy commercial services business; operating income margin increased 120 basis points on strong Italy same-store sales, high-margin software license, and LMA incentives
  • Global Gaming operating income rose 25% to $71 million; operating income margin expanded 190 basis points to 19% on strong operating leverage
  • PlayDigital operating income more than doubled to $18 million; operating income margin improved 1,200 basis points to 31% on strong gross margin expansion and despite higher investments in research and development and talent
  • Corporate support and other expense of $68 million was stable with the prior year

Adjusted EBITDA of $443 million, compared to $409 million in the prior-year period, on higher operating income and depreciation and amortization; Adjusted EBITDA margin increased to 42% from 40% in the prior year on improved margins across operating segments

Net interest expense of $71 million, compared to $75 million in the prior year, primarily driven by lower average debt balances

Foreign exchange loss of $5 million, compared to foreign exchange gain of $19 million in the prior year, primarily reflecting the non-cash impact of fluctuations in the EUR/USD exchange rate on debt

Other non-operating income, net of $2 million, versus other non-operating expense, net of $150 million in the prior year, driven by an accrual related to the DDI/Benson matter in the prior-year period

Income tax provision of $86 million, compared to a benefit of $11 million in the prior year, primarily driven by higher pre-tax income; pre-tax income in the prior year was impacted by accrual for the DDI/Benson matter

Net income of $90 million versus $34 million in the prior-year period

Diluted earnings per share of $0.23, versus diluted loss per share of $0.02 in the prior year, primarily reflects $150 million in non-operating expense in the prior year related to the DDI/Benson matter that has since been settled; Adjusted diluted earnings per share of $0.45 versus $0.57 primarily due to a higher quarterly effective tax rate

Net debt of $5.4 billion compared to $5.2 billion at December 31, 2022; Net debt leverage of 3.1x, in line with 3.1x at December 31, 2022

Cash and Liquidity Update
Total liquidity of $1.8 billion as of June 30, 2023; $0.5 billion in unrestricted cash and $1.4 billion in additional borrowing capacity from undrawn credit facilities

Other Developments
On June 8, 2023, the Company announced its Board of Directors is exploring strategic alternatives for the Global Gaming and PlayDigital segments with the goal of unlocking the full value of the portfolio

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

  • Ex-dividend date of August 14, 2023
  • Record date of August 15, 2023
  • Payment date of August 29, 2023

Paid $220M in final settlement of the DDI/Benson matter in the second quarter, in addition to $50 million  paid to escrow in the fourth quarter of 2022; full-year 2023 after-tax impact estimated at ~$170 million

Introducing Third Quarter 2023 Expectations; Raising Full-Year 2023 Outlook
Third Quarter 

  • Revenue of approximately $1.0 billion
  • Operating income margin of 22% - 23%

Full Year

  • Revenue of $4.2 billion - $4.3 billion
  • Operating income margin of ~23%
  • Cash from operations of $900 million - $1,000 million
  • Capital expenditures of $400 million - $450 million

Earnings Conference Call and Webcast  
August 1, 2023, at 8:00 a.m. EDT

To register to participate in the conference call, or to listen to the live audio webcast, please visit the "Events Calendar" on IGT's Investor Relations website at www.IGT.com. A replay will be available on the website following the live event.

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 2023 are calculated using the same foreign exchange rates as the corresponding 2022 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. Amounts reported in millions are computed based on amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.

About IGT
IGT (NYSE:IGT) is a global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Lotteries and Gaming Machines 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 unrivaled 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 jurisdictions around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 10,500 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, transactions, trends, events, dividends, results of operations, and/or financial condition or measures, 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, 2022 and other documents filed or furnished from time to time with the SEC, which are available on the SEC's website at www.sec.gov and on the investor relations section of the Company's website at www.IGT.com. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. You should carefully consider these factors and other risks and uncertainties that affect the Company's business. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that the financial performance of International Game Technology PLC for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.

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

Adjusted EBITDA represents net income (loss) (a GAAP measure) before income taxes, interest expense, foreign exchange gain (loss), net, other non-operating expenses, depreciation, impairment losses, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue, purchase accounting, and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items.

Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding the effects of foreign exchange, impairments, amortization from purchase accounting, discrete tax items, and other significant non-recurring adjustments that are not reflective of on-going operational activities (e.g., DDI / Benson Matter provision, gains/losses on sale of business, gains/losses on extinguishment and modifications of debt, etc.). Adjusted EPS is calculated using diluted weighted-average number of shares outstanding, including the impact of any potentially dilutive common stock equivalents that are anti-dilutive to GAAP net income (loss) per share but dilutive to Adjusted EPS. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash equivalents. Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce the Company's debt obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet.

Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months ("LTM") prior to such date. Management believes that Net debt leverage is a useful measure to assess IGT's financial strength and ability to incur incremental indebtedness when making key investment decisions.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures (a component of investing cash flows) and payments on license obligations (a component of financing cash flows). 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.

Adjusted free cash flow is a non-GAAP financial measure that represents free cash flow excluding the net of tax cash payments in connection with material litigation (e.g. DDI / Benson Matter). To enhance investor understanding of the Company's performance in comparison with the prior year, the Company excluded the net of cash impacts related to the settlement of the DDI / Benson Matter. Management believes adjusted free cash flow is a useful measure of liquidity and an additional basis for assessing IGT's performance.

Constant currency is a non-GAAP financial measure that expresses current financial data using the prior-year/period exchange rate (i.e., the exchange rate 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 06 5189 9184; for Italian media inquiries
James Hurley, Investor Relations, +1 (401) 392-7190 

Select Performance and KPI data:  ($ in millions, unless otherwise noted)









Constant



Sequential



Q2'23


Q2'22




Currency



Change as

GLOBAL LOTTERY




Y/Y Change


Change(1)


Q1'23

Reported

Revenue












Service












  Operating and facilities management contracts


623


581


7 %


6 %


637

(2) %

  Upfront license fee amortization


(47)


(46)


(3) %


— %


(47)

(1) %

  Operating and facilities management contracts, net


576


535


8 %


6 %


590

(2) %

  Other


13


85


(85) %


(85) %


12

2 %

Total service revenue


588


621


(5) %


(6) %


602

(2) %













Product sales


35


27


30 %


27 %


22

61 %

Total revenue


624


648


(4) %


(5) %


624

— %













Operating income


229


230


— %


(2) %


240

(4) %

Adjusted EBITDA(1)


332


330


1 %


(1) %


339

(2) %













Global same-store sales growth (%)












Instant ticket & draw games


2.3 %


(8.6 %)






4.8 %


Multi-jurisdiction jackpots


(5.3 %)


10.8 %






48.2 %


Total


1.8 %


(7.4 %)






8.0 %














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












Instant ticket & draw games


0.8 %


(5.6 %)






3.2 %


Multi-jurisdiction jackpots


(5.3 %)


10.8 %






48.2 %


Total


0.2 %


(4.2 %)






7.4 %














Italy same-store sales growth (%)












Instant ticket & draw games


8.0 %


(17.5 %)






10.3 %













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

 









Constant



Sequential



Q2'23


Q2'22




Currency



Change as

GLOBAL GAMING




Y/Y Change


Change(1)


Q1'23

Reported

Revenue












Service












  Terminal


128


123


4 %


7 %


129

(1) %

  Systems, software, and other


59


56


6 %


7 %


60

— %

Total service revenue


188


179


5 %


7 %


189

(1) %













Product sales












  Terminal


139


108


30 %


30 %


135

3 %

  Other


45


44


4 %


5 %


57

(21) %

Total product sales revenue


185


151


22 %


23 %


192

(4) %

Total revenue


373


330


13 %


14 %


381

(2) %













Operating income


71


57


25 %


25 %


69

3 %

Adjusted EBITDA(1)


112


87


28 %


29 %


111

1 %













Installed base units












 Casino


51,304


46,765


10 %




50,030


 Casino - L/T lease(2)


851


1,133


(25) %




872


Total installed base units


52,155


47,898


9 %




50,902














Installed base units (by geography)












 US & Canada


33,554


32,270


4 %




33,175


 Rest of world


18,601


15,628


19 %




17,727


Total installed base units


52,155


47,898


9 %




50,902














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












 US & Canada


$41.89


$42.64


(2) %




$42.36


 Rest of world


$7.44


$6.20


20 %




$7.41


Total yields


$29.56


$30.55


(3) %




$30.13














Global machine units sold












 New/expansion


1,061


818


30 %




1,012


 Replacement


7,208


6,378


13 %




7,260


Total machine units sold


8,269


7,196


15 %




8,272














US & Canada machine units sold












 New/expansion


1,046


469


123 %




892


 Replacement


5,278


4,580


15 %




5,642


Total machine units sold


6,324


5,049


25 %




6,534













(1) Non-GAAP measures; 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

 









Constant



Sequential



Q2'23


Q2'22




Currency



Change as

GLOBAL GAMING (Continued)




Y/Y Change


Change(1)


Q1'23

Reported

Rest of world machine units sold












New/expansion


15


349


(96) %




120


Replacement


1,930


1,798


7 %




1,618


Total machine units sold


1,945


2,147


(9) %




1,738














Average Selling Price (ASP), in absolute $












US & Canada


$16,700


$15,200


10 %




$16,000


Rest of world


$16,000


$13,400


19 %




$15,400


Total ASP


$16,500


$14,600


13 %




$15,900













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

 









Constant



Sequential



Q2'23


Q2'22




Currency



Change as

PLAYDIGITAL




Y/Y Change


Change(1)


Q1'23

Reported

Revenue












Service


59


43


38 %


40 %


55

8 %

Product sales




(78) %


(78) %


(74) %

Total revenue


59


43


38 %


39 %


55

8 %













Operating income


18


8


125 %


132 %


14

30 %

Adjusted EBITDA(1)


22


12


78 %


82 %


18

23 %

























CONSOLIDATED












Revenue (by geography)












US & Canada


650


585


11 %


11 %


666

(2) %

Italy


240


288


(16) %


(19) %


243

(1) %

Rest of world


164


148


11 %


12 %


151

9 %

Total revenue


1,055


1,021


3 %


3 %


1,060

— %


(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

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

Unaudited










For the three months ended


For the six months ended


June 30,


June 30,


2023


2022


2023


2022

Service revenue

835


842


1,681


1,688

Product sales

220


179


435


384

Total revenue

1,055


1,021


2,116


2,072









Cost of services

402


420


800


848

Cost of product sales

131


117


258


239

Selling, general and administrative

211


195


428


388

Research and development

60


60


122


117

Other operating expense


1



1

Total operating expenses

805


793


1,610


1,592









Operating income

251


228


506


480









Interest expense, net

71


75


141


151

Foreign exchange loss (gain), net

5


(19)


32


(22)

Other non-operating (income) expense, net

(2)


150


2


147

Total non-operating expenses

75


205


176


276

Income before provision for (benefit from) income taxes

176


22


330


204

Provision for (benefit from) income taxes

86


(11)


173


53

Net income

90


34


157


151

Less: Net income attributable to non-controlling interests

44


38


88


76

Net income (loss) attributable to IGT PLC

46


(4)


69


75









Net income (loss) attributable to IGT PLC per common share - basic

0.23


(0.02)


0.35


0.37

Net income (loss) attributable to IGT PLC per common share - diluted

0.23


(0.02)


0.34


0.37

Weighted-average shares - basic

200,079


202,696


199,882


203,217

Weighted-average shares - diluted

202,626


202,696


202,163


204,613

 

International Game Technology PLC

Consolidated Balance Sheets

($ in millions)

Unaudited








June 30,


December 31,



2023


2022

Assets





Current assets:





Cash and cash equivalents


461


590

Restricted cash and cash equivalents


138


150

Trade and other receivables, net


662


670

Inventories, net


316


254

Other current assets


492


467

Total current assets


2,069


2,131

Systems, equipment and other assets related to contracts, net


918


899

Property, plant and equipment, net


116


118

Operating lease right-of-use assets


240


254

Goodwill


4,493


4,482

Intangible assets, net


1,616


1,375

Other non-current assets


1,062


1,174

Total non-current assets


8,445


8,302

Total assets


10,514


10,433






Liabilities and shareholders' equity





Current liabilities:





Accounts payable


717


731

Current portion of long-term debt


217


61

Short term borrowings


3


DDI / Benson Matter provision



220

Other current liabilities


842


837

Total current liabilities


1,779


1,848

Long-term debt, less current portion


5,596


5,690

Deferred income taxes


362


305

Operating lease liabilities


226


239

Other non-current liabilities


650


372

Total non-current liabilities


6,834


6,607

Total liabilities


8,613


8,454

Commitments and contingencies





IGT PLC's shareholders' equity


1,427


1,429

Non-controlling interests


473


550

Shareholders' equity


1,900


1,979

Total liabilities and shareholders' equity


10,514


10,433

 

International Game Technology PLC

Consolidated Statements of Cash Flows

($ in millions)

Unaudited


For the three months ended


For the six months ended


June 30,


June 30,


2023


2022


2023


2022

Cash flows from operating activities








Net income

90


34


157


151

Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation

74


74


151


148

Amortization

54


46


110


94

Amortization of upfront license fees

50


48


100


100

Deferred income taxes

28


(40)


55


(31)

Stock-based compensation

12


12


23


22

Foreign exchange loss (gain), net

5


(19)


32


(22)

Amortization of debt issuance costs

3


4


6


8

DDI / Benson Matter provision


150



150

Other non-cash items, net


(2)


2


(10)

Changes in operating assets and liabilities:








Trade and other receivables

39


102


6


67

Inventories

(25)


(28)


(63)


(53)

Accounts payable

(118)


(154)


(7)


(136)

DDI / Benson Matter provision

(220)



(220)


Accrued interest payable

15


31


(4)


Accrued income taxes

23


(43)


64


6

Other assets and liabilities

3


(19)


(68)


(108)

Net cash provided by operating activities

34


196


345


385









Cash flows from investing activities








Capital expenditures

(99)


(79)


(193)


(153)

Other


2


3


13

Net cash used in investing activities

(99)


(78)


(190)


(139)









Cash flows from financing activities








Net (payments of) proceeds from short-term borrowings

(53)


(40)



(52)

Net (payments of) receipts from financial liabilities

(14)


(6)


(6)


36

Payments on license obligations

(7)



(8)


Principal payments on long-term debt



(462)


Net proceeds from Revolving Credit Facilities

81


212


473


245

Repurchases of common stock


(15)



(54)

Dividends paid

(40)


(41)


(80)


(81)

Dividends paid - non-controlling interests

(61)


(76)


(152)


(173)

Return of capital - non-controlling interests

(36)


(39)


(46)


(49)

Other

(12)



(23)


(7)

Net cash used in financing activities

(141)


(4)


(303)


(134)









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

(206)


115


(149)


111

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

(1)


(49)


7


(62)

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

805


791


740


808

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

599


858


599


858

Less: Cash and cash equivalents included within assets held for sale


58



58

Less: Restricted cash and cash equivalents included within assets held for sale


57



57

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

599


743


599


743









Supplemental Cash Flow Information








Interest paid

58


43


148


150

Income taxes paid

35


71


54


78

 

International Game Technology PLC

Net Debt

($ in millions)

Unaudited






June 30,


December 31,


2023


2022

3.500% Senior Secured Euro Notes due July 2024

121


319

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

498


697

4.125% Senior Secured U.S. Dollar Notes due April 2026

746


745

3.500% Senior Secured Euro Notes due June 2026

811


796

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

746


746

2.375% Senior Secured Euro Notes due April 2028

540


530

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

745


745

Senior Secured Notes

4,209


4,578





Euro Term Loan Facilities due January 2027

861


1,058

Revolving Credit Facility A due July 2027

71


55

Revolving Credit Facility B due July 2027

455


Long-term debt, less current portion

5,596


5,690





Euro Term Loan Facilities due January 2027

217


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


61

Current portion of long-term debt

217


61





Short-term borrowings

3


Total debt

5,816


5,750





Less: Cash and cash equivalents

461


590

Less: Debt issuance costs, net - Revolving Credit Facility B due July 2027


9

Net debt

5,355


5,150





Note: Net debt is a non-GAAP financial measure




 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited
















For the three months ended June 30, 2023









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












90

Provision for income taxes












86

Interest expense, net












71

Foreign exchange loss, net












5

Other non-operating income, net












(2)

Operating income (loss)


229


71


18


319


(68)


251

Depreciation


44


28


3


75


(1)


74

Amortization - service revenue (1)


50




50



50

Amortization - non-purchase accounting


5


11



16


1


17

Amortization - purchase accounting






38


38

Stock-based compensation


2


2



4


8


12

Adjusted EBITDA


332


112


22


465


(22)


443



























Cash flows from operating activities












34

Capital expenditures












(99)

Payments on license obligations












(7)

Free Cash Flow












(72)














Payments on DDI / Benson Matter, net of cash tax benefit ($12 million)








208

Adjusted Free Cash Flow












136






















Pre-Tax
Impact


Tax Impact
(2)(3)


Net
Impact

Reported EPS attributable to IGT PLC - diluted








0.23

Adjustments:













Foreign exchange loss, net








0.03



0.02

Amortization - purchase accounting








0.19


0.05


0.14

Discrete tax items









(0.05)


0.05

Other (non-recurring adjustments)








0.01



0.01

Net adjustments












0.22

Adjusted EPS attributable to IGT PLC - diluted (4)






0.45














(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 48.9%. Adjusted for the above items, the effective tax rate was 38.8%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 202.6 million, which includes the dilutive impact of share-based payment awards

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited
















For the three months ended June 30, 2022









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












34

Benefit from income taxes












(11)

Interest expense, net












75

Foreign exchange gain, net












(19)

Other non-operating expense, net












150

Operating income (loss)


230


57


8


295


(68)


228

Depreciation


43


27


4


74



74

Amortization - service revenue (1)


48




48



48

Amortization - non-purchase accounting


6


1



7


1


8

Amortization - purchase accounting






39


39

Stock-based compensation


2


1



4


8


12

Other






1


1

Adjusted EBITDA


330


87


12


429


(20)


409



























Cash flows from operating activities












196

Capital expenditures












(79)

Free Cash Flow












117






















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC - diluted







(0.02)

Adjustments:













Foreign exchange gain, net








(0.09)


0.04


(0.14)

Amortization - purchase accounting








0.19


0.05


0.14

Discrete tax items









(0.02)


0.02

DDI / Benson Matter provision








0.74


0.18


0.56

Net adjustments












0.59

Adjusted EPS attributable to IGT PLC - diluted (4)






0.57














(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was (50.8)%. Adjusted for the above items, the effective tax rate was 20.3%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 204.1 million, which includes the dilutive impact of share-based payment awards

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited
















For the six months ended June 30, 2023









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












157

Provision for income taxes












173

Interest expense, net












141

Foreign exchange loss, net












32

Other non-operating expense, net












2

Operating income (loss)


469


140


33


642


(136)


506

Depreciation


87


58


6


150


1


151

Amortization - service revenue (1)


99




100



100

Amortization - non-purchase accounting


10


20



31


2


32

Amortization - purchase accounting






77


77

Stock-based compensation


4


4



8


14


23

Adjusted EBITDA


671


223


39


933


(41)


891



























Cash flows from operating activities












345

Capital expenditures












(193)

Payments on license obligations












(8)

Free Cash Flow












143














Payments on DDI / Benson Matter, net of cash tax benefit ($12 million)








208

Adjusted Free Cash Flow












351






















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC - diluted







0.34

Adjustments:













Foreign exchange loss, net








0.16


(0.02)


0.18

Amortization - purchase accounting








0.38


0.09


0.29

Loss on extinguishment and modifications of debt, net






0.02



0.02

Discrete tax items









(0.10)


0.10

Other (non-recurring adjustments)








0.01



0.01

Net adjustments












0.60

Adjusted EPS attributable to IGT PLC - diluted (4)






0.94














(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 52.5%. Adjusted for the above items, the effective tax rate was 37.5%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 202.2 million, which includes the dilutive impact of share-based payment awards

 

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited
















For the six months ended June 30, 2022









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












151

Provision for income taxes












53

Interest expense, net












151

Foreign exchange gain, net












(22)

Other non-operating expense, net












147

Operating income (loss)


482


108


21


612


(132)


480

Depreciation


87


54


8


148


(1)


148

Amortization - service revenue (1)


100




100



100

Amortization - non-purchase accounting


13


3



16


1


17

Amortization - purchase accounting






77


77

Stock-based compensation


5


3



8


14


22

Other






1


1

Adjusted EBITDA


686


168


29


883


(41)


842



























Cash flows from operating activities












385

Capital expenditures












(153)

Free Cash Flow












232






















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC - diluted







0.37

Adjustments:













Foreign exchange gain, net








(0.11)


0.08


(0.19)

Amortization - purchase accounting








0.37


0.09


0.28

Discrete tax items









(0.15)


0.15

DDI / Benson Matter provision








0.73


0.18


0.56

Net adjustments












0.80

Adjusted EPS attributable to IGT PLC - diluted (4)






1.17














(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 26.0%. Adjusted for the above items, the effective tax rate was 22.8%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 204.6 million, which includes the dilutive impact of share-based payment awards

 

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SOURCE International Game Technology PLC