INTERNATIONAL GAME TECHNOLOGY PLC REPORTS SECOND QUARTER 2024 RESULTS
- Achieved record H1'24 Operating income and Adjusted EBITDA excluding Separation and divestiture costs
-
Delivered Q2'24 revenue of
$1.05 billion and Operating income of$230 million , in line with outlook; Adjusted EBITDA was$420 million -
Best-in-class technology and solutions bolster
Global Lottery portfolio while advancing key strategic initiatives; compelling games driving Gaming & Digital performance -
Generated over
$460 million in cash from operations and over$260 million in free cash flow in the first half of the year
"IGT delivered strong first half results, including record operating income and Adjusted EBITDA net of Separation and divestiture costs," said
"We generated over
Overview of Consolidated Second Quarter 2024 Results
|
Quarter Ended |
Y/Y |
Constant |
||
|
|
||||
|
2024 |
|
2023 |
||
($ in millions) |
|
|
|
|
|
GAAP Financials: |
|
|
|
|
|
Revenue |
|
|
|
|
|
|
613 |
|
624 |
(2) % |
(2) % |
Gaming & Digital |
436 |
|
432 |
1 % |
1 % |
Total revenue |
1,049 |
|
1,055 |
(1) % |
— % |
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
212 |
|
229 |
(8) % |
(7) % |
Gaming & Digital |
103 |
|
89 |
16 % |
16 % |
Corporate support expense |
(51) |
|
(30) |
(67) % |
(68) % |
Other(1) |
(35) |
|
(38) |
8 % |
8 % |
Total operating income |
230 |
|
251 |
(8) % |
(8) % |
Operating income margin |
21.9 % |
|
23.8 % |
|
|
|
|
|
|
|
|
Operating income excluding Separation and divestiture costs |
256 |
|
254 |
1 % |
1 % |
Operating income margin excluding Separation and divestiture costs |
24.4 % |
|
24.0 % |
|
|
|
|
|
|
|
|
Earnings per share - diluted |
|
|
|
(10) % |
|
|
|
|
|
|
|
Net cash provided by operating activities |
343 |
|
34 |
NM |
|
|
|
|
|
|
|
Cash and cash equivalents |
438 |
|
461 |
(5) % |
|
|
|
|
|
|
|
Non-GAAP Financial Measures: |
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
311 |
|
332 |
(6) % |
(6) % |
Gaming & Digital |
151 |
|
133 |
13 % |
14 % |
Corporate support expense |
(43) |
|
(22) |
(94) % |
(95) % |
Total Adjusted EBITDA |
420 |
|
443 |
(5) % |
(5) % |
Adjusted EBITDA margin |
40.0 % |
|
42.0 % |
|
|
|
|
|
|
|
|
Adjusted EBITDA excluding Separation and divestiture costs |
446 |
|
446 |
— % |
— % |
Adjusted EBITDA margin excluding Separation and divestiture costs |
42.5 % |
|
42.2 % |
|
|
|
|
|
|
|
|
Adjusted earnings per share - diluted |
|
|
|
(20) % |
|
|
|
|
|
|
|
Free cash flow |
235 |
|
(72) |
NA |
|
|
|
|
|
|
|
Net debt |
5,109 |
|
5,355 |
(5) % |
|
|
|
|
|
|
|
(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:
- Recently awarded seven-year facilities management contract with the
Colorado Lottery and three-year contract extension with theMississippi Lottery Corporation - Signed five-year iLottery content contract with
Atlantic Lottery Corporation and launched iLottery inConnecticut - Continued success in securing instant ticket contract wins and extensions including a five-year agreement with ONCE in
Spain and three-year extension inMississippi - Launched Tiger and Dragon on the PeakCurve49 cabinet, which ranks as the #1 new premium leased & WAP game in industry performance reports; introduced
Whitney Houston on the new SkyRise™ cabinet - Recently launched award-winning Prosperity Link™ game in digital format in
U.S. - Continued international progress including deployment of Diamond Mania MLP in
Spain AWP market,Holland Casino purchase of 500 PeakBar Top™ Video Poker cabinets, and expansion of HHR footprint toMalta - Recently published 17th annual Sustainability Report, highlighting Environmental, Social, and Governance accomplishments
- Won "Diversity and Inclusion" category at 2024 Women in Gaming Diversity Awards and recognized as "Best Place to Work for Disability Inclusion"
Financial Highlights:
Consolidated revenue of
-
Global Lottery revenue of$613 million decreased 2% year-over-year, primarily due to a multi-year software license sale in the prior year - Gaming & Digital revenue of
$436 million , up 1% versus the prior year, driven by installed base growth with resilient yields and elevated intellectual property and software license sales, offset by lower terminal unit shipments
Operating income of
-
Global Lottery operating income of$212 million versus$229 million in the prior year, primarily due to a multi-year software license sale and resolution of a customer contract dispute in the prior-year period - Gaming & Digital operating income of
$103 million compared to$89 million in the prior-year period on high-margin intellectual property and software sales and easing of supply chain costs, partially offset by lower terminal sales; operating income margin expands 300 basis points to 23.7% - Corporate support and other expense of
$86 million versus$68 million driven by$26 million in Separation and divestiture costs
Adjusted EBITDA of
Net interest expense of
No foreign exchange gain or loss, compared to a $5 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 other non-operating income, net, of $2 million in the prior year
Income tax provision of $71 million, compared to
Net income of $85 million versus $90 million in the prior-year period
Diluted earnings per share of
Net debt of
Cash and Liquidity Update
Total liquidity of
Other Developments
The Company's Board of Directors declared a quarterly cash dividend of
- Record date of
August 13, 2024 - Payment date of
August 27, 2024
As announced on
Withdrawing Full Year 2024 Outlook
Due to the planned sale of the Gaming & Digital business, the Company expects to classify and report Gaming & Digital results as discontinued operations beginning in the third quarter of 2024. As a result, the Company is withdrawing its previously provided full year financial outlook. The Company expects to provide an outlook for full year 2024 continuing operations once the preparation of the discontinued operations reporting is complete.
Earnings Conference Call and Webcast
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
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 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
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/
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:
Select Performance and KPI data: ($ in millions, unless otherwise noted) |
|||||||||||
|
|||||||||||
|
|
|
|
|
|
|
|
Constant |
|
|
Sequential |
|
|
Q2'24 |
|
Q2'23 |
|
|
|
Currency |
|
|
Change as |
GLOBAL LOTTERY |
|
|
|
Y/Y Change |
|
Change(1) |
|
Q1'24 |
Reported |
||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Service |
|
|
|
|
|
|
|
|
|
|
|
Operating and facilities management contracts |
|
620 |
|
623 |
|
(1) % |
|
— % |
|
653 |
(5) % |
Upfront license fee amortization |
|
(47) |
|
(47) |
|
1 % |
|
— % |
|
(47) |
1 % |
Operating and facilities management contracts, net |
|
573 |
|
576 |
|
(1) % |
|
— % |
|
605 |
(5) % |
Other |
|
13 |
|
13 |
|
7 % |
|
11 % |
|
13 |
— % |
Total service revenue |
|
586 |
|
588 |
|
— % |
|
— % |
|
619 |
(5) % |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
27 |
|
35 |
|
(25) % |
|
(25) % |
|
42 |
(37) % |
Total revenue |
|
613 |
|
624 |
|
(2) % |
|
(2) % |
|
661 |
(7) % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
212 |
|
229 |
|
(8) % |
|
(7) % |
|
258 |
(18) % |
Adjusted EBITDA(1) |
|
311 |
|
332 |
|
(6) % |
|
(6) % |
|
355 |
(12) % |
|
|
|
|
|
|
|
|
|
|
|
|
Global same-store sales growth (%) |
|
|
|
|
|
|
|
|
|
|
|
Instant ticket & draw games |
|
(0.5 %) |
|
2.3 % |
|
|
|
|
|
(0.2 %) |
|
Multi-jurisdiction jackpots |
|
20.2 % |
|
(5.3 %) |
|
|
|
|
|
(1.0 %) |
|
Total |
|
0.9 % |
|
1.8 % |
|
|
|
|
|
(0.3 %) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instant ticket & draw games |
|
(1.4 %) |
|
0.8 % |
|
|
|
|
|
(1.6 %) |
|
Multi-jurisdiction jackpots |
|
20.2 % |
|
(5.3 %) |
|
|
|
|
|
(1.0 %) |
|
Total |
|
0.6 % |
|
0.2 % |
|
|
|
|
|
(1.5 %) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instant ticket & draw games |
|
2.3 % |
|
8.0 % |
|
|
|
|
|
4.4 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measure; see disclaimer on page 5 and reconciliations to the most directly comparable GAAP measure in Appendix for further details |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant |
|
|
Sequential |
|
|
Q2'24 |
|
Q2'23 |
|
|
|
Currency |
|
|
Change as |
GAMING & DIGITAL |
|
|
|
Y/Y Change |
|
Change(1) |
|
Q1'24 |
Reported |
||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Service |
|
|
|
|
|
|
|
|
|
|
|
Terminal |
|
133 |
|
128 |
|
4 % |
|
4 % |
|
131 |
1 % |
iGaming |
|
45 |
|
48 |
|
(7) % |
|
(6) % |
|
48 |
(6) % |
Systems, software, and other |
|
73 |
|
71 |
|
3 % |
|
3 % |
|
75 |
(3) % |
Total service revenue |
|
250 |
|
247 |
|
2 % |
|
2 % |
|
253 |
(1) % |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
|
|
|
|
|
|
|
|
|
Terminal |
|
120 |
|
139 |
|
(14) % |
|
(14) % |
|
110 |
9 % |
Systems, software, and other |
|
66 |
|
45 |
|
45 % |
|
46 % |
|
43 |
54 % |
Total product sales revenue |
|
186 |
|
185 |
|
1 % |
|
1 % |
|
153 |
21 % |
Total revenue |
|
436 |
|
432 |
|
1 % |
|
1 % |
|
406 |
7 % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
103 |
|
89 |
|
16 % |
|
16 % |
|
81 |
28 % |
Adjusted EBITDA(1) |
|
151 |
|
133 |
|
13 % |
|
14 % |
|
127 |
19 % |
|
|
|
|
|
|
|
|
|
|
|
|
Installed base units |
|
|
|
|
|
|
|
|
|
|
|
Casino |
|
53,588 |
|
51,304 |
|
4 % |
|
|
|
53,368 |
|
Casino - L/T lease(2) |
|
697 |
|
851 |
|
(18) % |
|
|
|
701 |
|
Total installed base units |
|
54,285 |
|
52,155 |
|
4 % |
|
|
|
54,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Installed base units (by geography) |
|
|
|
|
|
|
|
|
|
|
|
US & |
|
34,320 |
|
33,554 |
|
2 % |
|
|
|
34,146 |
|
Rest of world |
|
19,965 |
|
18,601 |
|
7 % |
|
|
|
19,923 |
|
Total installed base units |
|
54,285 |
|
52,155 |
|
4 % |
|
|
|
54,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Yields (by geography)(3), in absolute $ |
|
|
|
|
|
|
|
|
|
|
|
US & |
|
|
|
|
|
— % |
|
|
|
|
|
Rest of world |
|
|
|
|
|
— % |
|
|
|
|
|
Total yields |
|
|
|
|
|
(1) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global machine units sold |
|
|
|
|
|
|
|
|
|
|
|
New/expansion |
|
1,060 |
|
1,061 |
|
— % |
|
|
|
203 |
|
Replacement |
|
6,570 |
|
7,208 |
|
(9) % |
|
|
|
6,424 |
|
Total machine units sold |
|
7,630 |
|
8,269 |
|
(8) % |
|
|
|
6,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
US & |
|
|
|
|
|
|
|
|
|
|
|
New/expansion |
|
696 |
|
1,046 |
|
(33) % |
|
|
|
46 |
|
Replacement |
|
4,436 |
|
5,278 |
|
(16) % |
|
|
|
5,014 |
|
Total machine units sold |
|
5,132 |
|
6,324 |
|
(19) % |
|
|
|
5,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measures; see disclaimer on page 5 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 |
|
|
Q2'24 |
|
Q2'23 |
|
|
|
Currency |
|
|
Change as |
GAMING & DIGITAL (Continued) |
|
|
|
Y/Y Change |
|
Change(1) |
|
Q1'24 |
Reported |
||
Rest of world machine units sold |
|
|
|
|
|
|
|
|
|
|
|
New/expansion |
|
364 |
|
15 |
|
NM |
|
|
|
157 |
|
Replacement |
|
2,134 |
|
1,930 |
|
11 % |
|
|
|
1,410 |
|
Total machine units sold |
|
2,498 |
|
1,945 |
|
28 % |
|
|
|
1,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Selling Price (ASP), in absolute $ |
|
|
|
|
|
|
|
|
|
|
|
US & |
|
|
|
|
|
(2) % |
|
|
|
|
|
Rest of world |
|
|
|
|
|
(16) % |
|
|
|
|
|
Total ASP |
|
|
|
|
|
(7) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant |
|
|
Sequential |
|
|
Q2'24 |
|
Q2'23 |
|
|
|
Currency |
|
|
Change as |
CONSOLIDATED |
|
|
|
Y/Y Change |
|
Change(1) |
|
Q1'24 |
Reported |
||
Revenue (by geography) |
|
|
|
|
|
|
|
|
|
|
|
US & |
|
661 |
|
650 |
|
2 % |
|
2 % |
|
660 |
— % |
|
|
237 |
|
240 |
|
(1) % |
|
(1) % |
|
258 |
(8) % |
Rest of world |
|
151 |
|
164 |
|
(8) % |
|
(8) % |
|
150 |
1 % |
Total revenue |
|
1,049 |
|
1,055 |
|
(1) % |
|
— % |
|
1,067 |
(2) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measure; see disclaimer on page 5 and reconciliations to the most directly comparable GAAP measure in Appendix for further details |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consolidated Statements of Operations |
|||||||
($ and shares in millions, except per share amounts) |
|||||||
Unaudited |
|||||||
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the six months ended |
||||
|
|
|
|
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Service revenue |
837 |
|
835 |
|
1,709 |
|
1,681 |
Product sales |
213 |
|
220 |
|
408 |
|
435 |
Total revenue |
1,049 |
|
1,055 |
|
2,117 |
|
2,116 |
|
|
|
|
|
|
|
|
Cost of services |
411 |
|
402 |
|
823 |
|
800 |
Cost of product sales |
130 |
|
131 |
|
248 |
|
258 |
Selling, general and administrative |
199 |
|
208 |
|
407 |
|
425 |
Research and development |
53 |
|
60 |
|
108 |
|
122 |
Separation and divestiture costs |
26 |
|
3 |
|
44 |
|
3 |
Total operating expenses |
819 |
|
805 |
|
1,631 |
|
1,610 |
|
|
|
|
|
|
|
|
Operating income |
230 |
|
251 |
|
486 |
|
506 |
|
|
|
|
|
|
|
|
Interest expense, net |
73 |
|
71 |
|
145 |
|
141 |
Foreign exchange loss (gain), net |
— |
|
5 |
|
(15) |
|
32 |
Other non-operating expense (income), net |
1 |
|
(2) |
|
3 |
|
2 |
Total non-operating expenses |
74 |
|
75 |
|
132 |
|
176 |
Income before provision for income taxes |
156 |
|
176 |
|
353 |
|
330 |
Provision for income taxes |
71 |
|
86 |
|
141 |
|
173 |
Net income |
85 |
|
90 |
|
213 |
|
157 |
Less: Net income attributable to non-controlling interests |
43 |
|
44 |
|
89 |
|
88 |
Net income attributable to |
42 |
|
46 |
|
123 |
|
69 |
|
|
|
|
|
|
|
|
Net income attributable to |
0.21 |
|
0.23 |
|
0.61 |
|
0.35 |
Net income attributable to |
0.20 |
|
0.23 |
|
0.61 |
|
0.34 |
Weighted-average shares - basic |
201 |
|
200 |
|
201 |
|
200 |
Weighted-average shares - diluted |
203 |
|
203 |
|
203 |
|
202 |
|
||||
Consolidated Balance Sheets |
||||
($ in millions) |
||||
Unaudited |
||||
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
438 |
|
572 |
Restricted cash and cash equivalents |
|
121 |
|
167 |
Trade and other receivables, net |
|
651 |
|
685 |
Inventories, net |
|
310 |
|
317 |
Other current assets |
|
443 |
|
382 |
Total current assets |
|
1,963 |
|
2,123 |
Systems, equipment and other assets related to contracts, net |
|
895 |
|
928 |
Property, plant and equipment, net |
|
120 |
|
119 |
Operating lease right-of-use assets |
|
216 |
|
230 |
|
|
4,485 |
|
4,507 |
Intangible assets, net |
|
1,492 |
|
1,555 |
Other non-current assets |
|
871 |
|
1,004 |
Total non-current assets |
|
8,080 |
|
8,342 |
Total assets |
|
10,042 |
|
10,465 |
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
695 |
|
797 |
Current portion of long-term debt |
|
713 |
|
— |
Short-term borrowings |
|
— |
|
16 |
Other current liabilities |
|
923 |
|
879 |
Total current liabilities |
|
2,331 |
|
1,691 |
Long-term debt, less current portion |
|
4,833 |
|
5,655 |
Deferred income taxes |
|
349 |
|
344 |
Operating lease liabilities |
|
199 |
|
214 |
Other non-current liabilities |
|
453 |
|
609 |
Total non-current liabilities |
|
5,835 |
|
6,821 |
Total liabilities |
|
8,166 |
|
8,513 |
Commitments and contingencies |
|
|
|
|
|
|
1,503 |
|
1,443 |
Non-controlling interests |
|
374 |
|
510 |
Shareholders' equity |
|
1,877 |
|
1,952 |
Total liabilities and shareholders' equity |
|
10,042 |
|
10,465 |
|
|||||||
Consolidated Statements of Cash Flows |
|||||||
($ in millions) |
|||||||
Unaudited |
|||||||
|
For the three months ended |
|
For the six months ended |
||||
|
|
|
|
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Cash flows from operating activities |
|
|
|
|
|
|
|
Net income |
85 |
|
90 |
|
213 |
|
157 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation |
73 |
|
74 |
|
144 |
|
151 |
Amortization |
56 |
|
54 |
|
111 |
|
110 |
Amortization of upfront license fees |
50 |
|
50 |
|
100 |
|
100 |
Deferred income taxes |
13 |
|
28 |
|
12 |
|
55 |
Stock-based compensation |
11 |
|
12 |
|
22 |
|
23 |
Foreign exchange loss (gain), net |
— |
|
5 |
|
(15) |
|
32 |
Other non-cash items, net |
— |
|
3 |
|
3 |
|
9 |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Trade and other receivables |
67 |
|
39 |
|
24 |
|
6 |
Inventories |
14 |
|
(25) |
|
7 |
|
(63) |
Accounts payable |
(26) |
|
(118) |
|
(71) |
|
(7) |
DDI / |
— |
|
(220) |
|
— |
|
(220) |
Accrued interest payable |
13 |
|
15 |
|
(13) |
|
(4) |
Accrued income taxes |
(1) |
|
23 |
|
3 |
|
64 |
Other assets and liabilities |
(11) |
|
3 |
|
(75) |
|
(68) |
Net cash provided by operating activities |
343 |
|
34 |
|
463 |
|
345 |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Capital expenditures |
(101) |
|
(99) |
|
(185) |
|
(193) |
Other |
4 |
|
— |
|
5 |
|
3 |
Net cash used in investing activities |
(97) |
|
(99) |
|
(180) |
|
(190) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Payments on license obligations |
(7) |
|
(7) |
|
(14) |
|
(8) |
Net (payments of) proceeds from short-term borrowings |
(6) |
|
(53) |
|
(16) |
|
— |
Net payments on financial liabilities |
(1) |
|
(14) |
|
(64) |
|
(6) |
Principal payments on long-term debt |
— |
|
— |
|
— |
|
(462) |
Net proceeds from (repayments of) Revolving Credit Facilities |
35 |
|
81 |
|
(37) |
|
473 |
Dividends paid |
(80) |
|
(40) |
|
(80) |
|
(80) |
Dividends paid - non-controlling interests |
(61) |
|
(61) |
|
(162) |
|
(152) |
Return of capital - non-controlling interests |
(35) |
|
(36) |
|
(45) |
|
(46) |
Other |
(15) |
|
(12) |
|
(14) |
|
(23) |
Net cash used in financing activities |
(170) |
|
(141) |
|
(433) |
|
(303) |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents |
76 |
|
(206) |
|
(149) |
|
(149) |
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents |
(14) |
|
(1) |
|
(31) |
|
7 |
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period |
496 |
|
805 |
|
739 |
|
740 |
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period |
558 |
|
599 |
|
558 |
|
599 |
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information |
|
|
|
|
|
|
|
Interest paid |
62 |
|
58 |
|
162 |
|
148 |
Income taxes paid |
59 |
|
35 |
|
126 |
|
54 |
|
|||
Net Debt |
|||
($ in millions) |
|||
Unaudited |
|||
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
6.500% Senior Secured |
— |
|
499 |
4.125% Senior Secured |
747 |
|
747 |
3.500% Senior Secured Euro Notes due |
801 |
|
826 |
6.250% Senior Secured |
747 |
|
747 |
2.375% Senior Secured Euro Notes due |
533 |
|
550 |
5.250% Senior Secured |
746 |
|
745 |
Senior Secured Notes |
3,574 |
|
4,113 |
|
|
|
|
Euro Term Loan Facilities due |
636 |
|
876 |
Revolving Credit Facility A due |
233 |
|
207 |
Revolving Credit Facility B due |
391 |
|
458 |
Long-term debt, less current portion |
4,833 |
|
5,655 |
|
|
|
|
6.500% Senior Secured |
499 |
|
— |
Euro Term Loan Facilities due |
214 |
|
— |
Current portion of long-term debt |
713 |
|
— |
|
|
|
|
Short-term borrowings |
— |
|
16 |
Total debt |
5,547 |
|
5,671 |
|
|
|
|
Less: Cash and cash equivalents |
438 |
|
572 |
Net debt |
5,109 |
|
5,099 |
|
|
|
|
|
|
|
|
Note: Net debt is a non-GAAP financial measure |
|
|
|
|
||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||
($ in millions, except per share amounts) |
||||||||||
Unaudited |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
||||||||
|
|
|
|
|
|
Business |
|
|
|
|
|
|
Global |
|
Gaming & |
|
Segments |
|
Corporate |
|
Total |
|
|
Lottery |
|
Digital |
|
Total |
|
and Other |
|
|
Net income |
|
|
|
|
|
|
|
|
|
85 |
Provision for income taxes |
|
|
|
|
|
|
|
|
|
71 |
Interest expense, net |
|
|
|
|
|
|
|
|
|
73 |
Other non-operating expense, net |
|
|
|
|
|
|
|
|
|
1 |
Operating income (loss) |
|
212 |
|
103 |
|
315 |
|
(86) |
|
230 |
Depreciation |
|
43 |
|
31 |
|
74 |
|
— |
|
73 |
Amortization - service revenue (1) |
|
49 |
|
— |
|
50 |
|
— |
|
50 |
Amortization - non-purchase accounting |
|
5 |
|
16 |
|
20 |
|
1 |
|
21 |
Amortization - purchase accounting |
|
— |
|
— |
|
— |
|
35 |
|
35 |
Stock-based compensation |
|
2 |
|
1 |
|
3 |
|
7 |
|
11 |
Adjusted EBITDA |
|
311 |
|
151 |
|
463 |
|
(43) |
|
420 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
343 |
Capital expenditures |
|
|
|
|
|
|
|
|
|
(101) |
Payments on license obligations |
|
|
|
|
|
|
|
|
|
(7) |
Free Cash Flow |
|
|
|
|
|
|
|
|
|
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax |
|
Tax Impact (2)(3) |
|
Net |
Reported EPS attributable to |
|
|
|
|
|
0.20 |
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss, net |
|
|
|
|
|
(0.01) |
|
0.01 |
|
(0.02) |
Currency conversion impacts of hyper-inflationary economies |
|
|
|
0.01 |
|
— |
|
0.01 |
||
Amortization - purchase accounting |
|
|
|
|
|
0.17 |
|
0.04 |
|
0.13 |
Discrete tax items |
|
|
|
|
|
— |
|
(0.03) |
|
0.03 |
Net adjustments |
|
|
|
|
|
|
|
|
|
0.16 |
Adjusted EPS attributable to |
|
|
|
|
0.36 |
|||||
|
|
|
|
|
|
|
|
|
|
|
(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 45.7%. Adjusted for the above items, the effective tax rate was 38.8% |
||||||||||
(4) Adjusted EPS was calculated using weighted average shares outstanding of 203 million, which includes the dilutive impact of share-based payment awards |
|
||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||
($ in millions, except per share amounts) |
||||||||||
Unaudited |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
||||||||
|
|
|
|
|
|
Business |
|
|
|
|
|
|
Global |
|
Gaming & |
|
Segments |
|
Corporate |
|
Total |
|
|
Lottery |
|
Digital |
|
Total |
|
and Other |
|
|
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 |
|
89 |
|
319 |
|
(68) |
|
251 |
Depreciation |
|
44 |
|
31 |
|
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 |
|
133 |
|
465 |
|
(22) |
|
443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
34 |
Capital expenditures |
|
|
|
|
|
|
|
|
|
(99) |
Payments on license obligations |
|
|
|
|
|
|
|
|
|
(7) |
Free Cash Flow |
|
|
|
|
|
|
|
|
|
(72) |
|
|
|
|
|
|
|
|
|
|
|
Payments on DDI / |
|
|
|
|
|
|
|
208 |
||
Adjusted Free Cash Flow |
|
|
|
|
|
|
|
|
|
136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax |
|
Tax Impact (2) (3) |
|
Net |
Reported EPS attributable to |
|
|
|
|
0.23 |
|||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss, net |
|
|
|
|
|
— |
|
— |
|
— |
Currency conversion impacts of hyper-inflationary economies |
|
|
|
0.02 |
|
— |
|
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 |
|
|
|
|
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 203 million, which includes the dilutive impact of share-based payment awards |
|
||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||
($ in millions, except per share amounts) |
||||||||||
Unaudited |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended |
||||||||
|
|
|
|
|
|
Business |
|
|
|
|
|
|
Global |
|
Gaming & |
|
Segments |
|
Corporate |
|
Total |
|
|
Lottery |
|
Digital |
|
Total |
|
and Other |
|
|
Net income |
|
|
|
|
|
|
|
|
|
213 |
Provision for income taxes |
|
|
|
|
|
|
|
|
|
141 |
Interest expense, net |
|
|
|
|
|
|
|
|
|
145 |
Foreign exchange gain, net |
|
|
|
|
|
|
|
|
|
(15) |
Other non-operating expense, net |
|
|
|
|
|
|
|
|
|
3 |
Operating income (loss) |
|
470 |
|
184 |
|
654 |
|
(168) |
|
486 |
Depreciation |
|
83 |
|
61 |
|
145 |
|
(1) |
|
144 |
Amortization - service revenue (1) |
|
99 |
|
1 |
|
100 |
|
— |
|
100 |
Amortization - non-purchase accounting |
|
10 |
|
30 |
|
39 |
|
2 |
|
41 |
Amortization - purchase accounting |
|
— |
|
— |
|
— |
|
70 |
|
70 |
Stock-based compensation |
|
5 |
|
3 |
|
7 |
|
15 |
|
22 |
Adjusted EBITDA |
|
667 |
|
278 |
|
945 |
|
(82) |
|
863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
463 |
Capital expenditures |
|
|
|
|
|
|
|
|
|
(185) |
Payments on license obligations |
|
|
|
|
|
|
|
|
|
(14) |
Free Cash Flow |
|
|
|
|
|
|
|
|
|
264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax |
|
Tax Impact (2) (3) |
|
Net |
Reported EPS attributable to |
|
|
|
|
0.61 |
|||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain, net |
|
|
|
|
|
(0.10) |
|
0.03 |
|
(0.13) |
Currency conversion impacts of hyper-inflationary |
|
|
|
|
|
0.02 |
|
— |
|
0.02 |
Amortization - purchase accounting |
|
|
|
|
|
0.34 |
|
0.08 |
|
0.26 |
Discrete tax items |
|
|
|
|
|
— |
|
(0.06) |
|
0.06 |
Net adjustments |
|
|
|
|
|
|
|
|
|
0.22 |
Adjusted EPS attributable to |
|
|
|
|
0.82 |
|||||
|
|
|
|
|
|
|
|
|
|
|
(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 39.8%. Adjusted for the above items, the effective tax rate was 37.1% |
||||||||||
(4) Adjusted EPS was calculated using weighted average shares outstanding of 203 million, which includes the dilutive impact of share-based payment awards |
|
||||||||||
Reconciliation of Non-GAAP Financial Measures |
||||||||||
($ in millions, except per share amounts) |
||||||||||
Unaudited |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended |
||||||||
|
|
|
|
|
|
Business |
|
|
|
|
|
|
Global |
|
Gaming & |
|
Segments |
|
Corporate |
|
Total |
|
|
Lottery |
|
Digital |
|
Total |
|
and Other |
|
|
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 |
|
173 |
|
642 |
|
(136) |
|
506 |
Depreciation |
|
87 |
|
64 |
|
150 |
|
1 |
|
151 |
Amortization - service revenue (1) |
|
99 |
|
— |
|
100 |
|
— |
|
100 |
Amortization - non-purchase accounting |
|
10 |
|
21 |
|
31 |
|
2 |
|
32 |
Amortization - purchase accounting |
|
— |
|
— |
|
— |
|
77 |
|
77 |
Stock-based compensation |
|
4 |
|
4 |
|
8 |
|
14 |
|
23 |
Adjusted EBITDA |
|
671 |
|
262 |
|
933 |
|
(41) |
|
891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
345 |
Capital expenditures |
|
|
|
|
|
|
|
|
|
(193) |
Payments on license obligations |
|
|
|
|
|
|
|
|
|
(8) |
Free Cash Flow |
|
|
|
|
|
|
|
|
|
143 |
|
|
|
|
|
|
|
|
|
|
|
Payments on DDI / |
|
|
|
|
|
|
|
208 |
||
Adjusted Free Cash Flow |
|
|
|
|
|
|
|
|
|
351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax |
|
Tax Impact (2) (3) |
|
Net |
Reported EPS attributable to |
|
|
|
|
0.34 |
|||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss, net |
|
|
|
|
|
0.12 |
|
(0.02) |
|
0.14 |
Currency conversion impacts of hyper-inflationary |
|
|
|
|
|
0.04 |
|
— |
|
0.04 |
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 |
|
|
|
|
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 million, which includes the dilutive impact of share-based payment awards |
View original content to download multimedia:https://www.prnewswire.com/news-releases/international-game-technology-plc-reports-second-quarter-2024-results-302209177.html
SOURCE