INTERNATIONAL GAME TECHNOLOGY PLC REPORTS FIRST QUARTER 2024 RESULTS

BY PR Newswire | CORPORATE | 05/14/24 06:40 AM EDT
  • Revenue of $1.07 billion, up 1% from the prior year, driven by strong Global Lottery growth, partially offset by timing of Gaming & Digital product sales
  • Operating income of $256 million in line with the prior year while operating income margin of 24.0% exceeded expectations by approximately 400 basis points; excluding Separation & divestiture costs, operating income increased 7% to a record $273 million and the margin expanded 150 basis points
  • Adjusted EBITDA of $443 million and Adjusted EBITDA margin of 41.5%; excluding Separation & divestiture costs, Adjusted EBITDA was $461 million and the margin improved 80 basis points to 43.1%
  • Upgrading FY'24 outlook on strong Q1'24 results

LONDON, May 14, 2024 /PRNewswire/ -- International Game Technology PLC (IGT) today reported financial results for the first quarter ended March?31, 2024. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

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 11,000 employees. For more information, please visit www.igt.com.

"Innovative game, hardware, and systems solutions drove better-than-expected Global Lottery and Gaming & Digital performance in the first quarter," said Vince Sadusky, CEO of IGT. "As a result, we are upgrading our full-year 2024 revenue and profit goals, which reflect broad-based momentum across key performance indicators in the balance of the year. We continue to make progress on separating Global Lottery from Gaming & Digital and preparing for the proposed transaction with Everi."

"We delivered a record organic profit performance in the first quarter, if we exclude Separation & divestiture costs," said Max Chiara, CFO of IGT. "The Company is operating from a position of strength with historically low net debt leverage, ample liquidity, and manageable near-term debt maturities."

Overview of Consolidated First Quarter 2024 Results


Quarter Ended

Y/Y
Change

Constant
Currency
Change


March 31,


2024


2023

($ in millions)






GAAP Financials:






Revenue






Global Lottery

661


624

6?%

6?%

Gaming & Digital

406


436

(7)?%

(7)?%

Total revenue

1,067


1,060

1?%

1?%







Operating income (loss)






Global Lottery

258


240

8?%

7?%

Gaming & Digital

81


83

(3)?%

(2)?%

Corporate support expense

(47)


(26)

(85)?%

(83)?%

Other(1)

(35)


(42)

16?%

16?%

Total operating income

256


255

??%

??%

Operating income margin

24.0?%


24.1?%









Operating income excluding Separation & divestiture costs

273


255

7?%

7?%

Operating income margin excluding Separation & divestiture costs

25.6?%


24.1?%









Earnings per share - diluted

$0.40


$0.11

264?%








Net cash provided by operating activities

120


311

(61)?%








Cash and cash equivalents

377


669

(44)?%








Non-GAAP Financial Measures:






Adjusted EBITDA






Global Lottery

355


339

5?%

4?%

Gaming & Digital

127


129

(1)?%

(1)?%

Corporate support expense

(39)


(19)

(108)?%

(106)?%

Total Adjusted EBITDA

443


449

(1)?%

(1)?%

Adjusted EBITDA margin

41.5?%


42.3?%









Adjusted EBITDA excluding Separation & divestiture costs

461


449

3?%

2?%

Adjusted EBITDA margin excluding Separation & divestiture costs

43.1?%


42.3?%









Adjusted earnings per share - diluted

$0.46


$0.49

(6)?%








Free cash flow

29


216

(86)?%








Net debt

5,161


5,118

1?%








(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:

  • Announced Gaming & Digital business to be spun off and combined with Everi Holdings, Inc.; transaction expected to close in late 2024/early 2025
  • Recognized with top honors at ICE London 2024 awards programs including "Lottery Product of the Year" and "Best Diversity and Inclusion Employer"
  • Received a supply contract extension from the UK National Lottery
  • Executed licensing agreement with the Maryland Lottery for IGT's patented Cash Pop? draw-based game
  • Mystery of the Lamp? named "Top Performing New Premium Game" at 2024 EKG Slot Awards Show
  • Awarded contract to provide PeakDual? 27 video lottery terminals across Quebec
  • Launched iGaming content in Rhode Island
  • Achieved AAA MSCI ESG rating, the highest rating possible, and earned a gold medal sustainability rating from EcoVadis

Financial Highlights:
Consolidated revenue of $1.07 billion, up 1% from $1.06?billion in the prior-year period, driven by strong Global Lottery growth, partially offset by timing of Gaming & Digital product sales

  • Global Lottery revenue of $661 million increased 6% year-over-year on significantly higher product sales, driven by delivery of GameTouch? 28 self-service terminals in Canada and software upgrades in Singapore and Germany, and continued same-store sales strength in Italy
  • Gaming & Digital revenue of $406 million, compared to $436 million in the prior year, reflects lower product sales due to fewer terminal unit shipments in the current year and elevated intellectual property and software licenses in the prior year, partially offset by higher service revenue driven by growth in the global installed base, which more than offset lower yields, and a 10% increase in iGaming revenue

Operating income of $256 million, in line with the prior year; excluding Separation & divestiture costs, operating income rose to a record $273 million and the margin increased 150 basis points to 25.6%

  • Global Lottery operating income of $258 million, up 8% compared to $240 million in the prior year, on strong Italy same-store sales and higher product sales margin
  • Gaming & Digital operating income of $81 million compared to $83 million in the prior-year period as research and development process improvements and easing of supply chain costs are offset by lower revenue and additional investments in the business; operating income margin expanded 80 basis points to 20%
  • Corporate support and other expense of $83 million versus $68 million driven by $18 million in Separation & divestiture costs

Adjusted EBITDA of $443 million compared to $449?million in the prior-year period; excluding Separation & divestiture costs Adjusted EBITDA increased 3% to $461 million and Adjusted EBITDA margin expanded 80 basis points to 43.1%

Net interest expense of $72 million compared to $70?million in the prior year

Foreign exchange gain of $15?million, compared to $26?million loss in the prior year, primarily due to non-cash impact of fluctuations in the EUR/USD exchange rate on debt and reduced losses related to the devaluation of the Argentine peso

Other non-operating expense, net of $1?million versus $4?million in the prior year driven by losses on extinguishment of debt in the prior year

Income tax provision of $69?million, compared to $87 million in the prior year, primarily driven by lower valuation allowances on deferred tax assets, partially offset by higher pre-tax income

Net income of $128?million versus $67?million in the prior-year period

Diluted earnings per share of $0.40, versus $0.11 in the prior year, primarily driven by foreign exchange gains, compared to foreign exchange losses in the prior year, and lower provision for income taxes; Adjusted diluted earnings per share of $0.46 compared to $0.49 in the prior year

Net debt of $5.2 billion compared to $5.1 billion at December?31, 2023; Net debt leverage of 2.9x consistent with the December?31, 2023 level

Cash and Liquidity Update
Total liquidity of $1.7?billion as of March?31, 2024; $0.4?billion in unrestricted cash and $1.3?billion in additional borrowing capacity from undrawn credit facilities

Other Developments
Marco Drago to step down from his role as non-executive director of the IGT Board of Directors following the Annual General Meeting on May 14, 2024; Enrico Drago appointed as a non-executive director

IGT Lottery S.p.A., IGT's operating holding company in Italy, has entered into memorandums of understanding with the current shareholders of Lottoitalia S.r.l., the joint venture responsible for managing the Italian Lotto license, for the shareholders to maintain the partnership for the upcoming Lotto license tender. Under the terms of the agreements, IGT will continue to serve as the principal operating partner to fulfill the requirements of the new Lotto license. IGT will maintain its 61.5% equity ownership and Allwyn, Arianna 2001, and Novomatic Italia will maintain their 32.5%, 4%, and 2% share, respectively. The Italian Lotto, and its associated games 10eLotto and MillionDAY, are deeply rooted in tradition and are among the most popular and successful games in Italy, with annual ticket sales of about ?8 billion.

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

  • Record date of May 30, 2024
  • Payment date of June 13, 2024

Introducing Second Quarter 2024 Expectations; Upgrading Full Year 2024 Outlook
Second Quarter

  • Revenue of ~$1.05 billion
  • Operating income margin of ~22%; ~24.5% excluding Separation & divestiture costs

Full Year

  • Revenue of ~$4.4 billion
  • Operating income margin of ~21%; ~24% excluding Separation & divestiture costs
  • Cash from operations of ? $1.0 billion
  • Capital expenditures of ~$500 million

Earnings Conference Call and Webcast
May?14, 2024, 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 2024 are calculated using the same foreign exchange rates as the corresponding 2023 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 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 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 (IGT) and its consolidated subsidiaries (the "Company") and other matters. These statements may discuss goals, intentions, and expectations as to future plans and strategies, transactions, including the Separation and divestiture, trends, events, dividends, results of operations, and/or financial condition or measures, including our expectations regarding revenue, operating income, cash, and capital expenditures for the second quarter and full year 2024, 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," "outlook," "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, 2023 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 may affect the Company's business, including management's discussion and analysis of potential or actual impacts to operations and financial performance. 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 (IGT) for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC (IGT), 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 (IGT), 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, net, foreign exchange gain (loss), net, other non-operating expenses (e.g., DDI/Benson Matter provision, gains/losses on extinguishment and modifications of debt, etc.), net, 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. Management believes that Adjusted EBITDA is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue

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., 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, including cash and cash equivalents classified as held for sale. Cash and cash equivalents, including cash and cash equivalents held for sale, 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.

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



Q1'24


Q1'23




Currency



Change as

GLOBAL LOTTERY




Y/Y Change


Change(1)


Q4'23

Reported

Revenue












Service












Operating and facilities management contracts


653


637


2?%


2?%


624

5?%

Upfront license fee amortization


(47)


(47)


(1)?%


??%


(47)

??%

Operating and facilities management contracts, net


605


590


3?%


2?%


577

5?%

Other


13


12


10?%


13?%


15

(11)?%

Total service revenue


619


602


3?%


2?%


592

5?%













Product sales


42


22


92?%


92?%


89

(52)?%

Total revenue


661


624


6?%


6?%


681

(3)?%













Operating income


258


240


8?%


7?%


238

8?%

Adjusted EBITDA(1)


355


339


5?%


4?%


343

4?%













Global same-store sales growth (%)












Instant ticket & draw games


(0.2?%)


4.8?%






??%


Multi-jurisdiction jackpots


(1.0?%)


48.2?%






(25.0?%)


Total


(0.3?%)


8.0?%






(3.5?%)














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












Instant ticket & draw games


(1.6?%)


3.2?%






(0.9?%)


Multi-jurisdiction jackpots


(1.0?%)


48.2?%






(25.0?%)


Total


(1.5?%)


7.4?%






(5.0?%)














Italy same-store sales growth (%)












Instant ticket & draw games


4.4?%


10.3?%






2.9?%














(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



Q1'24


Q1'23




Currency



Change as

GAMING & DIGITAL




Y/Y Change


Change(1)


Q4'23

Reported

Revenue












Service












Terminal


131


129


2?%


2?%


127

4?%

?iGaming


48


43


10?%


10?%


47

1?%

Systems, software, and other


75


71


5?%


5?%


73

2?%

Total service revenue


253


243


4?%


4?%


247

2?%













Product sales












Terminal


110


135


(19)?%


(18)?%


153

(28)?%

Systems, software, and other


43


57


(25)?%


(25)?%


49

(13)?%

Total product sales revenue


153


193


(21)?%


(20)?%


202

(24)?%

Total revenue


406


436


(7)?%


(7)?%


449

(10)?%













Operating income


81


83


(3)?%


(2)?%


97

(17)?%

Adjusted EBITDA(1)


127


129


(1)?%


(1)?%


144

(11)?%













Installed base units












Casino


53,368


50,030


7?%




53,190


Casino - L/T lease(2)


701


872


(20)?%




716


Total installed base units


54,069


50,902


6?%




53,906














Installed base units (by geography)












US & Canada


34,146


33,175


3?%




34,221


Rest of world


19,923


17,727


12?%




19,685


Total installed base units


54,069


50,902


6?%




53,906














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












US & Canada


$41.17


$42.36


(3)?%




$41.28


Rest of world


$7.13


$7.41


(4)?%




$7.02


Total yields


$28.51


$30.13


(5)?%




$28.71














Global machine units sold












New/expansion


203


1,012


(80)?%




425


Replacement


6,424


7,260


(12)?%




8,966


Total machine units sold


6,627


8,272


(20)?%




9,391














US & Canada machine units sold












New/expansion


46


892


(95)?%




248


Replacement


5,014


5,642


(11)?%




6,481


Total machine units sold


5,060


6,534


(23)?%




6,729














(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



Q1'24


Q1'23




Currency



Change as

GAMING & DIGITAL (Continued)




Y/Y Change


Change(1)


Q4'23

Reported

Rest of world machine units sold












New/expansion


157


120


31?%




177


Replacement


1,410


1,618


(13)?%




2,485


Total machine units sold


1,567


1,738


(10)?%




2,662














Average Selling Price (ASP), in absolute $












US & Canada


$16,900


$16,000


6?%




$16,300


Rest of world


$14,800


$15,400


(4)?%




$15,000


Total ASP


$16,400


$15,900


3?%




$15,900


































Constant



Sequential



Q1'24


Q1'23




Currency



Change as

CONSOLIDATED




Y/Y Change


Change(1)


Q4'23

Reported

Revenue (by geography)












US & Canada


660


666


(1)?%


(1)?%


707

(7)?%

Italy


258


243


6?%


6?%


244

5?%

Rest of world


150


151


(1)?%


(1)?%


178

(16)?%

Total revenue


1,067


1,060


1?%


1?%


1,130

(6)?%

























(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 (IGT)

Consolidated Statements of Operations

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

Unaudited








For the three months ended



March 31,



2024


2023

Service revenue


872


846

Product sales


195


215

Total revenue


1,067


1,060






Cost of services


412


398

Cost of product sales


118


127

Selling, general and administrative


208


217

Research and development


55


62

Separation and divestiture costs


18


?

Total operating expenses


812


805






Operating income


256


255






Interest expense, net


72


70

Foreign exchange (gain) loss, net


(15)


26

Other non-operating expense, net


1


4

Total non-operating expenses


58


101

Income before provision for income taxes


198


155

Provision for income taxes


69


87

Net income


128


67

Less: Net income attributable to non-controlling interests


47


44

Net income attributable to IGT PLC


82


23






Net income attributable to IGT PLC per common share - basic


0.41


0.12

Net income attributable to IGT PLC per common share - diluted


0.40


0.11

Weighted-average shares - basic


200


200

Weighted-average shares - diluted


203


202

?

International Game Technology PLC (IGT)

Consolidated Balance Sheets

($ in millions)

Unaudited








March 31,


December 31,



2024


2023

Assets





Current assets:





Cash and cash equivalents


377


572

Restricted cash and cash equivalents


119


167

Trade and other receivables, net


723


685

Inventories, net


321


317

Other current assets


404


382

Total current assets


1,944


2,123

Systems, equipment and other assets related to contracts, net


908


928

Property, plant and equipment, net


118


119

Operating lease right-of-use assets


222


230

Goodwill


4,491


4,507

Intangible assets, net


1,522


1,555

Other non-current assets


923


1,004

Total non-current assets


8,184


8,342

Total assets


10,128


10,465






Liabilities and shareholders' equity





Current liabilities:





Accounts payable


733


797

Current portion of long-term debt


715


?

Short-term borrowings


6


16

Other current liabilities


982


879

Total current liabilities


2,436


1,691

Long-term debt, less current portion


4,817


5,655

Deferred income taxes


337


344

Operating lease liabilities


206


214

Other non-current liabilities


475


609

Total non-current liabilities


5,834


6,821

Total liabilities


8,270


8,513

Commitments and contingencies





IGT PLC's shareholders' equity


1,504


1,443

Non-controlling interests


354


510

Shareholders' equity


1,858


1,952

Total liabilities and shareholders' equity


10,128


10,465

?

International Game Technology PLC (IGT)

Consolidated Statements of Cash Flows

($ in millions)

Unaudited


For the three months ended


March 31,


2024


2023

Cash flows from operating activities




Net income

128


67

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




Depreciation

71


77

Amortization

55


55

Amortization of upfront license fees

50


50

Stock-based compensation

11


11

Deferred income taxes

(2)


28

Foreign exchange (gain) loss, net

(15)


26

Other non-cash items, net

3


6

Changes in operating assets and liabilities:




Trade and other receivables

(44)


(32)

Inventories

(7)


(38)

Accounts payable

(45)


111

Accrued interest payable

(26)


(20)

Accrued income taxes

4


40

Other assets and liabilities

(63)


(71)

Net cash provided by operating activities

120


311





Cash flows from investing activities




Capital expenditures

(84)


(94)

Other

1


3

Net cash used in investing activities

(83)


(91)





Cash flows from financing activities




Net (repayments of) proceeds from Revolving Credit Facilities

(72)


392

Net (payments on) receipts from financial liabilities

(63)


8

Net (payments of) proceeds from short-term borrowings

(9)


53

Payments on license obligations

(7)


(1)

Principal payments on long-term debt

?


(462)

Dividends paid

?


(40)

Dividends paid - non-controlling interests

(101)


(92)

Return of capital - non-controlling interests

(10)


(10)

Other

1


(11)

Net cash used in financing activities

(262)


(163)





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

(225)


57

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

(18)


8

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

739


740

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

496


805





Supplemental Cash Flow Information




Interest paid

101


90

Income taxes paid

67


20

?

International Game Technology PLC (IGT)

Net Debt

($ in millions)

Unaudited






March 31,


December 31,


2024


2023

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

?


499

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

747


747

3.500% Senior Secured Euro Notes due June 2026

808


826

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

747


747

2.375% Senior Secured Euro Notes due April 2028

538


550

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

746


745

Senior Secured Notes

3,586


4,113





Euro Term Loan Facilities due January 2027

642


876

Revolving Credit Facility A due July 2027

197


207

Revolving Credit Facility B due July 2027

392


458

Long-term debt, less current portion

4,817


5,655





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

499


?

Euro Term Loan Facilities due January 2027

216


?

Current portion of long-term debt

715


?





Short-term borrowings

6


16

Total debt

5,538


5,671





Less: Cash and cash equivalents

377


572

Net debt

5,161


5,099









Note: Net debt is a non-GAAP financial measure

?

International Game Technology PLC (IGT)

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited














For the three months ended March 31, 2024







Business







Global


Gaming &


Segments


Corporate


Total



Lottery


Digital


Total


and Other


IGT PLC

Net income










128

Provision for income taxes










69

Interest expense, net










72

Foreign exchange gain, net










(15)

Other non-operating expense, net










1

Operating income (loss)


258


81


339


(83)


256

Depreciation


40


31


71


?


71

Amortization - service revenue (1)


50


?


50


?


50

Amortization - non-purchase accounting


5


14


19


1


20

Amortization - purchase accounting


?


?


?


35


35

Stock-based compensation


2


1


4


8


11

Adjusted EBITDA


355


127


482


(39)


443












Cash flows from operating activities










120

Capital expenditures










(84)

Payments on license obligations










(7)

Free Cash Flow










29


















Pre-Tax
Impact


Tax Impact
(2)(3)


Net
Impact

Reported EPS attributable to IGT PLC - diluted






0.40

Adjustments:











Foreign exchange gain, net






(0.09)


0.02


(0.11)

Currency conversion impacts of hyper-inflationary economies




0.01


?


0.01

Amortization - purchase accounting






0.17


0.04


0.13

Discrete tax items






?


(0.02)


0.02

Net adjustments










0.06

Adjusted EPS attributable to IGT PLC - diluted (4)





0.46












(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 35.1%. Adjusted for the above items, the effective tax rate was 35.5%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 203.5 million, which includes the dilutive impact of share-based payment awards

?

International Game Technology PLC (IGT)

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited














For the three months ended March 31, 2023







Business







Global


Gaming &


Segments


Corporate


Total



Lottery


Digital


Total


and Other


IGT PLC

Net income










67

Provision for income taxes










87

Interest expense, net










70

Foreign exchange loss, net










26

Other non-operating expense, net










4

Operating income (loss)


240


83


323


(68)


255

Depreciation


43


33


76


2


77

Amortization - service revenue (1)


49


?


50


?


50

Amortization - non-purchase accounting


5


10


15


1


16

Amortization - purchase accounting


?


?


?


40


40

Stock-based compensation


2


2


4


6


11

Adjusted EBITDA


339


129


468


(19)


449












Cash flows from operating activities










311

Capital expenditures










(94)

Payments on license obligations










(1)

Free Cash Flow










216


















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC - diluted





0.11

Adjustments:











Foreign exchange loss, net






0.12


(0.02)


0.14

Currency conversion impacts of hyper-inflationary economies




0.02


?


0.02

Amortization - purchase accounting






0.20


0.05


0.15

Loss on extinguishment and modifications of debt, net




0.02


?


0.02

Discrete tax items






?


(0.05)


0.05

Net adjustments










0.38

Adjusted EPS attributable to IGT PLC - diluted (4)





0.49












(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 56.5%. Adjusted for the above items, the effective tax rate was 36.3%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 201.7 million, which includes the dilutive impact of share-based payment awards

?

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/international-game-technology-plc-reports-first-quarter-2024-results-302144062.html

SOURCE International Game Technology PLC (IGT)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article