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HomeGambling & CasinosINTERNATIONAL GAME TECHNOLOGY PLC REPORTS THIRD QUARTER 2023 RESULTS

INTERNATIONAL GAME TECHNOLOGY PLC REPORTS THIRD QUARTER 2023 RESULTS

INTERNATIONAL GAME TECHNOLOGY PLC REPORTS THIRD QUARTER 2023 RESULTS

  • Generated revenue of $1.06 billion, consistent with the prior year; up 6% net of Italy commercial services sale, driven by strong key performance indicators across business segments
  • Operating income increased 13% to $239 million, led by double-digit growth in Global Gaming and PlayDigital; operating income margin expands 250 basis points to 22%, a record level for a third-quarter period
  • Adjusted EBITDA up 8% to $433 million; Adjusted EBITDA margin improved 270 basis points to 41%
  • Strong cash flow generation contributed favorably to net debt, improving net debt leverage to a historic low of 3.0x
  • Tightening full-year 2023 revenue outlook to upper end of previous range; maintaining profit margin outlook

LONDON, Oct. 31, 2023 /PRNewswire/ — International Game Technology PLC (“IGT”) (NYSE:IGT) today reported financial results for the third quarter ended September 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.

“The strength of our leadership positions across Global Lottery, Global Gaming, and PlayDigital is evident in our third quarter and year-to-date results,” said Vince Sadusky, CEO of IGT. “Excellent momentum in key performance indicators is driving revenue growth and even stronger profit expansion. With a compelling pipeline of innovative products and solutions showcased at recent tradeshows, I am confident we can achieve our near and medium-term goals as we focus on unlocking the intrinsic value of IGT’s market-leading assets.”

“We are pleased with the financial results we delivered in the third quarter, including top-line growth, margin expansion, and strong cash flow generation,” said Max Chiara, CFO of IGT. “Our financial position is solid with net debt leverage at a historical low point and already comfortably within our long-term target range, which coupled with no meaningful near-term debt maturities and access to significant liquidity, greatly enhances our balance sheet and creates additional financial flexibility.”

Overview of Consolidated Third Quarter 2023 Results


Quarter Ended

Y/Y
Change

Constant
Currency
Change


September 30,


2023


2022

($ in millions)






GAAP Financials:






Revenue






Global Lottery

601


626

(4) %

(7) %

Global Gaming

409


379

8 %

8 %

PlayDigital

55


54

1 %

1 %

Total revenue

1,065


1,060

— %

(1) %







Operating income (loss)






Global Lottery

206


211

(2) %

(6) %

Global Gaming

93


65

42 %

43 %

PlayDigital

16


12

32 %

36 %

Corporate support expense

(38)


(36)

(7) %

(3) %

Other(1)

(37)


(41)

8 %

9 %

Total operating income

239


211

13 %

10 %

Operating income margin

22.4 %


19.9 %









Earnings per share – diluted

$0.46


$1.30

(65) %








Net cash provided by operating activities

296


236

25 %








Cash and cash equivalents

558


401

39 %








Non-GAAP Financial Measures:






Adjusted EBITDA






Global Lottery

306


310

(1) %

(6) %

Global Gaming

135


96

41 %

42 %

PlayDigital

19


16

16 %

18 %

Corporate support expense

(27)


(19)

(42) %

(35) %

Total Adjusted EBITDA

433


402

8 %

5 %

Adjusted EBITDA margin

40.7 %


38.0 %









Adjusted earnings per share – diluted

$0.52


$0.43

21 %








Free cash flow

181


163

11 %








Adjusted free cash flow

157


163

(3) %








Net debt

5,251


5,075

3 %








(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 seven-year lottery contract extension as primary technology provider to the California Lottery through October 2033 and 10-year contract extensions as retail and iLottery systems partner to the Kentucky Lottery Corporation through July 2036
  • Deployed end-to-end cloud-based iLottery platform for Totalizator Sportowy in Poland
  • Showcased a broad range of gaming products and solutions reflecting IGT’s commitment to performance, quality, and innovation at the Global Gaming Expo and Australasian Gaming Expo
  • Launched bespoke CAESARS CLEOPATRA® game for Caesars Palace Online Casino
  • Debuted award-winning PeakBarTop cabinet with sports betting, providing players the market’s most advanced sports betting interface for land-based casinos
  • Expanded PlaySports technology footprint, including IGT’s trading advisory services, with deployments at Palace Casino Resort in Mississippi and St. Croix Casino in Wisconsin
  • Good progress on ESG initiatives, including publication of 2022 Sustainability Report; improved ESG scores from FTSE Russell and S&P Global Corporate Sustainability Assessment; recognized as “Best Place to Work for Disability Inclusion” by the 2023 Disability Equality Index

Financial Highlights:
Consolidated revenue of $1.06 billion, in line with the prior year; net of the Italy commercial services sale in September 2022, revenue increased 6%

  • Global Lottery revenue of $601 million was down 4% year-over-year; net of the Italy commercial services sale, revenue rose 5% on strong same-store sales in Italy, with continued strength in both instant ticket and draw games, and elevated U.S. multi-state jackpot activity
  • Global Gaming revenue of $409 million, up 8% from $379 million in the prior year, primarily driven by growth in the installed base and higher system and software sales
  • PlayDigital revenue of $55 million, in line with the prior year, as growth in iCasino was offset by the impact of exiting certain legacy iSoftBet jurisdictions and unusually high sports betting hold levels in the prior year

Operating income of $239 million increased 13% from $211 million in the prior year, led by contributions from Global Gaming and PlayDigital; operating income margin expanded 250 basis points to 22%

  • Global Lottery operating income of $206 million versus $211 million in the prior year reflects impact from sale of Italy commercial services; Italy commercial services contributed $12 million in operating income in the prior year
  • Global Gaming operating income increased 42% to $93 million; operating income margin expanded 550 basis points to 23% on research and development process improvements, easing of supply chain costs, and high-margin system sales
  • PlayDigital operating income up 32% to $16 million; operating income margin expanded 660 basis points to 28% on strong operating leverage
  • Corporate support and other expense of $75 million was in line with the prior year as project costs in the current year offset transaction costs in the prior year

Adjusted EBITDA of $433 million rose 8% from $402 million in the prior-year period, on higher operating income and depreciation and amortization, partially offset by lower transaction expense associated with the sale of Italy commercial services in the prior year; Adjusted EBITDA margin increased to 41% from 38% in the prior year, led by margin expansion in Global Gaming and PlayDigital

Net interest expense of $73 million was in line with the prior year

Foreign exchange gain of $23 million, compared to $37 million in the prior year, on higher foreign exchange losses related to the Argentine peso in the current year; foreign exchange gain in both periods primarily driven by non-cash impact of fluctuations in the EUR/USD exchange rate on debt

Other non-operating expense, net of $1 million, versus other non-operating income, net of $139 million in the prior year, driven by gain on sale of Italy commercial services and accrual related to the DDI/Benson matter in the prior-year period

Income tax provision of $66 million, compared to $21 million in the prior year, primarily driven by settlement of a tax audit in Italy in the current year and a non-recurring benefit arising from the DDI/Benson matter in the prior year

Net income of $123 million versus $294 million in the prior-year period

Diluted earnings per share of $0.46, versus $1.30 in the prior year, primarily reflects non-operating income related to the gain on sale of Italy commercial services and non-operating expense related to the DDI/Benson Matter in the prior year; Adjusted diluted earnings per share of $0.52 compared to $0.43 in the prior year on higher operating income

Net debt of $5.3 billion compared to $5.2 billion at December 31, 2022; Net debt leverage of 3.0x versus  3.1x at December 31, 2022

Cash and Liquidity Update
Total liquidity of $1.9 billion as of September 30, 2023; $0.6 billion in unrestricted cash and $1.3 billion in additional borrowing capacity from undrawn credit facilities

Other Developments
On October 27, 2023, the Company announced a make-whole call of the remaining €112 million of 3.500% Euro Notes due 2024

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

  • Ex-dividend date of November 28, 2023
  • Record date of November 29, 2023
  • Payment date of December 13, 2023

Introducing Fourth Quarter 2023 Expectations; Tightening Full-Year 2023 Revenue Outlook to Upper End of Previous Range while Maintaining Profit Margin Outlook
Fourth Quarter

  • Revenue of ~$1.1B
    • Global Lottery revenue up low-to-mid single-digits versus the prior-year period
    • Global Gaming and PlayDigital revenue in line with prior-year-period
  • Operating income includes ~$25M in previously communicated restructuring and project costs

Full Year

  • Revenue of ~$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
October 31, 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 and strategies, 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 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 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, net, foreign exchange gain (loss), net, other non-operating expenses (e.g., DDI/Benson Matter, 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 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, including cash and cash equivalents classified as 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.

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



Q3’23


Q3’22




Currency



Change as

GLOBAL LOTTERY




Y/Y Change


Change(1)


Q2’23

Reported

Revenue












Service












Operating and facilities management contracts


610


561


9 %


5 %


623

(2) %

Upfront license fee amortization


(47)


(44)


(9) %


— %


(47)

— %

Operating and facilities management contracts, net


563


518


9 %


5 %


576

(2) %

Other


13


70


(81) %


(80) %


13

6 %

Total service revenue


576


588


(2) %


(5) %


588

(2) %













Product sales


25


39


(36) %


(39) %


35

(30) %

Total revenue


601


626


(4) %


(7) %


624

(4) %













Operating income


206


211


(2) %


(6) %


229

(10) %

Adjusted EBITDA(1)


306


310


(1) %


(6) %


332

(8) %













Global same-store sales growth (%)












Instant ticket & draw games


0.2 %


(0.5 %)






2.3 %


Multi-jurisdiction jackpots


25.2 %


46.7 %






(5.3 %)


Total


3.1 %


3.3 %






1.8 %














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












Instant ticket & draw games


(1.0 %)


(0.2 %)






0.8 %


Multi-jurisdiction jackpots


25.2 %


46.7 %






(5.3 %)


Total


2.8 %


4.7 %






0.2 %














Italy same-store sales growth (%)












Instant ticket & draw games


4.7 %


(1.5 %)






8.0 %



(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



Q3’23


Q3’22




Currency



Change as

GLOBAL GAMING




Y/Y Change


Change(1)


Q2’23

Reported

Revenue












Service












Terminal


136


126


7 %


10 %


128

6 %

Systems, software, and other


61


58


6 %


6 %


59

3 %

Total service revenue


197


184


7 %


9 %


188

5 %













Product sales












Terminal


143


140


2 %


2 %


139

3 %

Other


68


55


24 %


23 %


45

50 %

Total product sales revenue


212


195


8 %


8 %


185

14 %

Total revenue


409


379


8 %


8 %


373

10 %













Operating income


93


65


42 %


43 %


71

31 %

Adjusted EBITDA(1)


135


96


41 %


42 %


112

21 %













Installed base units












Casino


51,786


47,411


9 %




51,304


Casino – L/T lease(2)


841


1,116


(25) %




851


Total installed base units


52,627


48,527


8 %




52,155














Installed base units (by geography)












US & Canada


33,778


32,303


5 %




33,554


Rest of world


18,849


16,224


16 %




18,601


Total installed base units


52,627


48,527


8 %




52,155














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












US & Canada


$43.23


$43.73


(1) %




$41.89


Rest of world


$7.72


$6.32


22 %




$7.44


Total yields


$30.32


$31.09


(2) %




$29.56














Global machine units sold












New/expansion


586


1,005


(42) %




1,061


Replacement


8,572


7,960


8 %




7,208


Total machine units sold


9,158


8,965


2 %




8,269














US & Canada machine units sold












New/expansion


211


959


(78) %




1,046


Replacement


6,410


5,448


18 %




5,278


Total machine units sold


6,621


6,407


3 %




6,324




(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



Q3’23


Q3’22




Currency



Change as

GLOBAL GAMING (Continued)




Y/Y Change


Change(1)


Q2’23

Reported

Rest of world machine units sold












New/expansion


375


46


NM




15


Replacement


2,162


2,512


(14) %




1,930


Total machine units sold


2,537


2,558


(1) %




1,945














Average Selling Price (ASP), in absolute $












US & Canada


$15,300


$15,900


(4) %




$16,700


Rest of world


$14,400


$13,900


4 %




$16,000


Total ASP


$15,100


$15,400


(2) %




$16,500




(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



Q3’23


Q3’22




Currency



Change as

PLAYDIGITAL




Y/Y Change


Change(1)


Q2’23

Reported

Revenue












Service


55


54


1 %


— %


59

(7) %

Product sales


1



NM


NM


NM

Total revenue


55


54


1 %


1 %


59

(7) %













Operating income


16


12


32 %


36 %


18

(16) %

Adjusted EBITDA(1)


19


16


16 %


18 %


22

(14) %

























CONSOLIDATED












Revenue (by geography)












US & Canada


677


651


4 %


4 %


650

4 %

Italy


221


247


(11) %


(18) %


240

(8) %

Rest of world


166


161


3 %


2 %


164

1 %

Total revenue


1,065


1,060


— %


(1) %


1,055

1 %



(1) 

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

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited










For the three months ended


For the nine months ended


September 30,


September 30,


2023


2022


2023


2022

Service revenue

828


826


2,508


2,514

Product sales

237


234


672


618

Total revenue

1,065


1,060


3,180


3,132









Cost of services

408


415


1,208


1,263

Cost of product sales

146


149


404


388

Selling, general and administrative

217


207


645


595

Research and development

55


67


177


185

Other operating expense


8



9

Total operating expenses

826


849


2,435


2,441









Operating income

239


211


745


691









Interest expense, net

73


73


214


223

Foreign exchange (gain) loss, net

(23)


(37)


8


(59)

Other non-operating expense (income), net

1


(139)


4


8

Total non-operating expenses (income)

50


(103)


226


172

Income before provision for income taxes

189


315


519


519

Provision for income taxes

66


21


239


74

Net income

123


294


280


445

Less: Net income attributable to non-controlling interests

29


29


117


105

Net income attributable to IGT PLC

94


264


164


339









Net income attributable to IGT PLC per common
share – basic

0.47


1.31


0.82


1.67

Net income attributable to IGT PLC per common
share – diluted

0.46


1.30


0.81


1.66

Weighted-average shares – basic

200,464


201,593


200,078


202,669

Weighted-average shares – diluted

203,113


203,105


202,482


204,104

International Game Technology PLC

Consolidated Balance Sheets

($ in millions)

Unaudited








September 30,


December 31,



2023


2022

Assets





Current assets:





Cash and cash equivalents


558


590

Restricted cash and cash equivalents


139


150

Trade and other receivables, net


643


670

Inventories, net


323


254

Other current assets


455


467

Total current assets


2,118


2,131

Systems, equipment and other assets related to contracts, net


925


899

Property, plant and equipment, net


114


118

Operating lease right-of-use assets


233


254

Goodwill


4,476


4,482

Intangible assets, net


1,582


1,375

Other non-current assets


1,009


1,174

Total non-current assets


8,340


8,302

Total assets


10,458


10,433






Liabilities and shareholders’ equity





Current liabilities:





Accounts payable


697


731

Current portion of long-term debt


330


61

Short term borrowings


58


DDI / Benson Matter provision



220

Other current liabilities


781


837

Total current liabilities


1,866


1,848

Long-term debt, less current portion


5,421


5,690

Deferred income taxes


370


305

Operating lease liabilities


218


239

Other non-current liabilities


614


372

Total non-current liabilities


6,624


6,607

Total liabilities


8,490


8,454

Commitments and contingencies





IGT PLC’s shareholders’ equity


1,487


1,429

Non-controlling interests


480


550

Shareholders’ equity


1,967


1,979

Total liabilities and shareholders’ equity


10,458


10,433

International Game Technology PLC

Consolidated Statements of Cash Flows

($ in millions)

Unaudited


For the three months ended


For the nine months ended


September 30,


September 30,


2023


2022


2023


2022

Cash flows from operating activities








Net income

123


294


280


445

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








Depreciation

76


75


228


223

Amortization

55


48


165


142

Amortization of upfront license fees

50


46


150


146

Stock-based compensation

13


12


36


34

Amortization of debt issuance costs

3


4


10


11

Loss on extinguishment of debt


13


4


13

DDI / Benson Matter provision


120



270

Gain on sale of business


(278)



(278)

Deferred income taxes

6


(59)


62


(91)

Foreign exchange (gain) loss, net

(23)


(37)


8


(59)

Other non-cash items, net

(2)


4


(5)


(6)

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








Trade and other receivables

14


(38)


20


29

Inventories

(5)


(21)


(67)


(74)

Accounts payable

(13)


105


(20)


(30)

DDI / Benson Matter provision



(220)


Accrued interest payable

(11)


(37)


(15)


(37)

Accrued income taxes

(12)


(70)


51


(64)

Other assets and liabilities

22


55


(46)


(53)

Net cash provided by operating activities

296


236


641


621









Cash flows from investing activities








Capital expenditures

(108)


(73)


(301)


(226)

Business acquisitions, net of cash acquired


(142)



(142)

Proceeds from sale of business, net of cash and restricted cash transferred


497



497

Proceeds from sale of assets

9


2


14


15

Other


1


(1)


1

Net cash (used in) provided by investing activities from continuing operations

(98)


284


(289)


145

Net cash provided by investing activities from discontinued operations


126



126

Net cash (used in) provided by investing activities

(98)


410


(289)


271









Cash flows from financing activities








Net payments on financial liabilities

(61)


(38)


(66)


(2)

Payments on license obligations

(7)



(15)


Payments of debt issuance costs


(10)



(10)

Principal payments on long-term debt


(597)


(462)


(597)

Net proceeds from (payments of) short-term borrowings

55


1


56


(51)

Net proceeds from (repayments of) Revolving Credit Facilities

5


(203)


478


42

Repurchases of common stock


(39)



(93)

Dividends paid

(40)


(40)


(120)


(121)

Dividends paid – non-controlling interests

(2)


(4)


(155)


(177)

Return of capital – non-controlling interests

(10)


(10)


(55)


(58)

Other

(8)


(10)


(30)


(16)

Net cash used in financing activities

(67)


(951)


(371)


(1,085)









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

130


(305)


(19)


(193)

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

(32)


(36)


(24)


(98)

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

599


858


740


808

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

697


517


697


517









Supplemental Cash Flow Information








Interest paid

88


110


236


259

Income taxes paid

72


150


126


229

International Game Technology PLC

Net Debt

($ in millions)

Unaudited






September 30,


December 31,


2023


2022

3.500% Senior Secured Euro Notes due July 2024


319

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

499


697

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

746


745

3.500% Senior Secured Euro Notes due June 2026

791


796

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

747


746

2.375% Senior Secured Euro Notes due April 2028

527


530

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

745


745

Senior Secured Notes

4,055


4,578





Euro Term Loan Facilities due January 2027

840


1,058

Revolving Credit Facility A due July 2027

76


55

Revolving Credit Facility B due July 2027

450


Long-term debt, less current portion

5,421


5,690





Euro Term Loan Facilities due January 2027

212


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


61

3.500% Senior Secured Euro Notes due July 2024

119


Current portion of long-term debt

330


61





Short-term borrowings

58


Total debt

5,810


5,750





Less: Cash and cash equivalents

558


590

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


9

Net debt

5,251


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 September 30, 2023









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












123

Provision for income taxes












66

Interest expense, net












73

Foreign exchange gain, net












(23)

Other non-operating expense, net












1

Operating income (loss)


206


93


16


314


(75)


239

Depreciation


45


29


3


77



76

Amortization – service revenue (1)


50




50



50

Amortization – non-purchase accounting


5


12



17


1


18

Amortization – purchase accounting






37


37

Stock-based compensation


1


1



3


10


13

Adjusted EBITDA


306


135


19


460


(27)


433



























Cash flows from operating activities












296

Capital expenditures












(108)

Payments on license obligations












(7)

Free Cash Flow












181














Payments on DDI / Benson Matter, net of cash tax benefit ($24 million)








(24)

Adjusted Free Cash Flow












157






















Pre-Tax
Impact


Tax Impact
(2)(3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted








0.46

Adjustments:













Foreign exchange gain, net








(0.12)


0.03


(0.15)

Amortization – purchase accounting








0.18


0.04


0.14

Discrete tax items









(0.06)


0.06

Net adjustments












0.05

Adjusted EPS attributable to IGT PLC – diluted (4)






0.52



(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 34.8%. Adjusted for the above items, the effective tax rate was 33.8% 

(4)

Adjusted EPS was calculated using weighted average shares outstanding of 203.1 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 three months ended September 30, 2022









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












294

Provision for income taxes












21

Interest expense, net












73

Foreign exchange gain, net












(37)

Other non-operating income, net












(139)

Operating income (loss)


211


65


12


287


(76)


211

Depreciation


44


27


4


75



75

Amortization – service revenue (1)


46




46



46

Amortization – non-purchase accounting


5


2



7


1


8

Amortization – purchase accounting






40


40

Stock-based compensation


2


2



5


7


12

Other






8


8

Adjusted EBITDA


310


96


16


422


(19)


402



























Cash flows from operating activities












236

Capital expenditures












(73)

Free Cash Flow












163






















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted







1.30

Adjustments:













Foreign exchange gain, net








(0.18)


0.04


(0.22)

Amortization – purchase accounting








0.20


0.05


0.15

Loss on extinguishment and modifications of debt, net






0.06



0.06

DDI / Benson Matter provision








0.59


0.14


0.45

Gain on sale of business








(1.37)


(0.01)


(1.36)

Other (non-recurring adjustments)








0.05



0.04

Net adjustments












(0.87)

Adjusted EPS attributable to IGT PLC – diluted (4)






0.43



(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 6.7%. Adjusted for the above items, the effective tax rate was 36.2%

(4)

Adjusted EPS was calculated using weighted average shares outstanding of 203.1 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 nine months ended September 30, 2023









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












280

Provision for income taxes












239

Interest expense, net












214

Foreign exchange loss, net












8

Other non-operating expense, net












4

Operating income (loss)


675


233


48


956


(211)


745

Depreciation


131


87


8


227


1


228

Amortization – service revenue (1)


149


1



150



150

Amortization – non-purchase accounting


15


32


1


48


3


50

Amortization – purchase accounting






115


115

Stock-based compensation


6


5


1


11


25


36

Adjusted EBITDA


977


358


58


1,393


(68)


1,325



























Cash flows from operating activities












641

Capital expenditures












(301)

Payments on license obligations












(15)

Free Cash Flow












324














Payments on DDI / Benson Matter, net of cash tax benefit ($36 million)








184

Adjusted Free Cash Flow












509






















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted







0.81

Adjustments:













Foreign exchange loss, net








0.04


0.01


0.03

Amortization – purchase accounting








0.57


0.13


0.43

Loss on extinguishment and modifications of debt, net






0.02



0.02

Discrete tax items









(0.16)


0.16

Other (non-recurring adjustments)








0.01



0.01

Net adjustments












0.65

Adjusted EPS attributable to IGT PLC – diluted (4)






1.46



(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 46.0%. Adjusted for the above items, the effective tax rate was 36.4%

(4)

Adjusted EPS was calculated using weighted average shares outstanding of 202.5 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 nine months ended September 30, 2022









Business







Global


Global




Segments


Corporate


Total



Lottery


Gaming


PlayDigital


Total


and Other


IGT PLC

Net income












445

Provision for income taxes












74

Interest expense, net












223

Foreign exchange gain, net












(59)

Other non-operating expense, net












8

Operating income (loss)


693


174


33


899


(208)


691

Depreciation


131


81


12


223


(1)


223

Amortization – service revenue (1)


146




146



146

Amortization – non-purchase accounting


18


5



23


2


25

Amortization – purchase accounting






117


117

Stock-based compensation


7


5


1


13


21


34

Other






9


9

Adjusted EBITDA


996


264


45


1,305


(60)


1,245



























Cash flows from operating activities












621

Capital expenditures












(226)

Free Cash Flow












395






















Pre-Tax
Impact


Tax Impact
(2) (3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted







1.66

Adjustments:













Foreign exchange gain, net








(0.29)


0.12


(0.41)

Amortization – purchase accounting








0.57


0.14


0.43

Loss on extinguishment and modifications of debt, net






0.06



0.06

Discrete tax items









(0.15)


0.15

DDI / Benson Matter provision








1.32


0.32


1.00

Gain on sale of business








(1.36)


(0.01)


(1.35)

Other (non-recurring adjustments)








0.04



0.04

Net adjustments












(0.06)

Adjusted EPS attributable to IGT PLC – diluted (4)






1.60



(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 14.3%. Adjusted for the above items, the effective tax rate was 26.9%

(4)

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

SOURCE International Game Technology PLC

Originally published at https://www.prnewswire.com/news-releases/international-game-technology-plc-reports-third-quarter-2023-results-301972094.html
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