International Game Technology PLC Reports Fourth Quarter And Full Year 2015 Results

- Pro forma, adjusted 2015 EBITDA of $1,704 million reached the top of guidance; achieved fourth quarter adjusted EBITDA of $449 million on strong North America and Italy performance

- Free cash flow totaled $205 million in the fourth quarter; net debt of $7,707 million at year end

- Actions yielding two-thirds of total cost synergies completed a quarter early; realized approximately $110 million in cash synergies in 2015

- Cost synergy target increased to $270 million from $230 million

- Expects to achieve $1,740-$1,790 million in adjusted EBITDA in 2016; net debt estimated at $7,700-$7,900 million, inclusive of Lotto-related capital expenditures

- Cash dividend declared of $0.20 per ordinary share

Mar 17, 2016, 06:45 ET from International Game Technology PLC

LONDON, March 17, 2016 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported financial results for the fourth quarter and year ended December 31, 2015. Today, at 8:00 a.m. EDT / 12:00 p.m. GMT / 1:00 p.m. CET, management will host a conference call and webcast to present the fourth quarter and full year 2015 results; access details are provided below.

"We ended a year of transformation with a strong quarter for our lottery and gaming operations, enabling us to reach the high end of our EBITDA guidance," said Marco Sala, CEO of IGT. "We established IGT as the global gaming leader with a commitment to being a customer-first organization and to deliver the content, technology, and expertise that drives player demand. We are confident that we have established a solid foundation from which we can continue to lead the gaming industry and grow our business."

"Our financial and operational discipline is evidenced in our fourth quarter and full year results," said Alberto Fornaro, CFO of IGT. "We achieved our first-year synergy goals three months ahead of plan and have increased our total cost synergy target. Strong free cash flow resulted in a significant reduction in net debt and leverage. As we look to 2016, we are forecasting growth for our core operations, while incremental synergies are expected to mitigate certain anticipated headwinds. Our financial condition is solid, placing us in a strong position to pursue our growth objectives, continue to reduce debt, and remunerate our shareholders."

Summary of Consolidated Fourth Quarter and Full Year Financial Results


Reported

Pro forma








Constant

Quarter Ended December 31,

2015

2014

Change

2015

2014

Change

Currency




(%)



(%)

Change (%)

(In US $ millions, unless otherwise noted)








Revenue

1,365

951

44%

1,365

1,402

-3%

5%

Adjusted EBITDA

449

321

40%

449

448

0%

8%

Adjusted Operating Income

293

182

61%

293

268

9%

17%

Operating Income

132

114

15%

132

178

-26%

-15%

Net income per diluted share

0.37

(0.87)

NM

0.37

 NA 



Adjusted net income (loss) per diluted share

0.63

(0.08)

NM

0.63

 NA 



Net debt

7,707

2,642

NM

7,707

 NA 




Reported

Pro forma








Constant

Year Ended December 31,

2015

2014

Change

2015

2014

Change

Currency




(%)



(%)

Change (%)

(In US $ millions, unless otherwise noted)








Revenue

4,689

3,812

23%

5,088

5,780

-12%

-4%

Adjusted EBITDA

1,611

1,389

16%

1,704

2,027

-16%

-7%

Adjusted Operating Income

1,043

855

22%

1,069

1,317

-19%

-9%

Operating Income

540

715

-24%

533

1,083

-51%

-39%

Net income per diluted share

(0.39)

0.49

NM

 NA 

 NA 



Adjusted net income (loss) per diluted share

1.87

1.58

18%

 NA 

 NA 



Net debt

7,707

2,642

NM

7,707

 NA 




Note: Pro forma is defined as the combined results of GTECH and legacy IGT for period prior to the second quarter of 2015. Adjusted operating income, adjusted EBITDA, and adjusted net income per diluted share are non-GAAP financial measures.  Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release. 

 

Comparability of Results

All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise.

As a result of the combination of GTECH S.p.A. ("GTECH") and International Game Technology ("legacy IGT"), which was completed on April 7, 2015, a number of items affect the comparability of reported results.  Reported financial information for the fourth quarter of 2015 includes the results of operations of IGT for the entire period, while reported financial information for the fourth quarter of 2014 includes only GTECH operations. Reported financial information for the full year 2015 period includes IGT for the second, third, and fourth quarters and only GTECH operations in the first quarter, while the reported full year 2014 figures are for GTECH only. Pro forma figures represent the combined results of both companies. 

Adjusted figures exclude the impact of purchase price amortization, impairment charges, restructuring expense, and certain one-time, primarily transaction-related items.  Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release.

Reported 2015 results were adversely affected by the strengthening of the U.S. dollar compared to the euro; the daily average U.S. dollar to euro foreign exchange rate was 1.10 in the fourth quarter of 2015 compared to 1.25 in the fourth quarter of 2014, and was 1.11 for the full year 2015 period compared to 1.33 in 2014. Constant currency changes for 2015 are calculated using the same foreign exchange rates as the corresponding 2014 period.

Management believes that referring to certain pro forma, constant currency, or adjusted measures is a more useful way to evaluate the Company's underlying performance.

Overview of Consolidated Fourth Quarter Results

Reported consolidated revenue grew 44% to $1,365 million from $951 million in the fourth quarter of 2014, reflecting GTECH's acquisition of legacy IGT. On a pro forma, constant currency basis, consolidated revenue rose 5%. Revenue growth reflects strong gaming product sales, continued progress toward stabilizing the global casino installed base, and sustained lottery growth. During the quarter, the Company sold 11,562 gaming machines worldwide and global lottery same-store revenue, excluding Italy, increased 6%.

On a reported basis, adjusted EBITDA of $449 million was 40% above the fourth quarter of 2014.  On a pro forma, constant currency basis, adjusted EBITDA was 8% greater than the prior-year period as overall sales growth was accentuated by synergy savings and certain one-time items. 

Reported operating income was $132 million compared to $114 million in the fourth quarter of 2014. On a pro forma, constant currency basis, adjusted operating income was 17% above the year-earlier period, supported by revenue growth and synergy savings. Both adjusted EBITDA and operating income also benefited from a multi-year value-added tax ("VAT") credit in Italy as well as the absence of lottery management agreement ("LMA") penalties that negatively affected operating income in the fourth quarter of 2014. 

Interest expense was $119 million compared to $75 million in the prior-year period due to increased debt incurred to finance the legacy IGT acquisition.

Net income attributable to IGT was $74 million in the fourth quarter of 2015. On an adjusted basis, net income was $127 million. The Company reported net income per diluted share of $0.37 and earned $0.63 per diluted share on an adjusted basis.

Cash from operations was $786 million in the full year period, inclusive of approximately $160 million in one-time, transaction-related costs. Capital expenditures were $403 million on a reported basis and $429 million on a pro forma basis in 2015.

Cash and cash equivalents were $627 million as of December 31, 2015, compared to $317 million as of December 31, 2014.

At December 31, 2015, consolidated shareholders' equity totaled $3,366 million and net debt was $7,707 million.

Operating Segment Review

North America Gaming & Interactive   
Revenue for the North America Gaming & Interactive segment was $378 million compared to $45 million in the fourth quarter of 2014. On a pro forma basis, revenue was 3% below the prior year, primarily due to negative foreign currency effects; at constant currency, revenues were 1% below the prior year.

Service revenue was $263 million compared to $13 million in the prior-year period. On a pro forma basis, service revenue declined 4%, primarily as a result of a lower installed base. On a sequential basis, the installed base at North American casinos rose by 181 units, the first sequential increase since June 2013. DoubleDown revenues rose 5% on strong growth in bookings per daily average user and despite having six fewer days in the quarter. Product sales were $115 million compared to $32 million in the fourth quarter of 2014. On a pro forma, constant currency basis, product sales were 6% above the prior year. The Company sold 6,597 machines compared to 5,482 units in the fourth quarter of 2014. Product sales also benefited from higher system sales during the fourth quarter of 2015. 

Operating income for North America Gaming & Interactive was $106 million compared to $8 million in the fourth quarter of 2014. On a pro forma basis, North America Gaming & Interactive operating income rose 3% as increased DoubleDown profits and synergy savings more than offset unfavorable revenue mix impacts.

North America Lottery
Revenue for the North America Lottery segment was $269 million in the fourth quarter of 2015, 20% higher than the prior year on a reported basis and 10% greater on a pro forma basis.

Service revenue increased 18% on a reported basis and was 8% higher than the prior year on a pro forma basis, reflecting the net impact of 6% same-store revenue growth, favorable LMA comparisons, and the contribution from new contracts in Canada and Colorado. Strong instant ticket sales and solid draw-based game performance were the primary drivers of same-store revenue growth during the quarter. Powerball sales were also strong in the period, although that growth was more than offset by a decline in Mega Millions sales. Product sales of $14 million in the quarter were nearly double those in the fourth quarter of 2014, reflecting the natural variability of the business.

Operating income for North America Lottery was $43 million compared to $17 million in the fourth quarter of 2014. On a pro forma basis, operating income for North America Lottery rose 47% on favorable LMA comparisons and strong same-store revenue growth.

International
International revenue was $265 million compared to $192 million in the fourth quarter of 2014 on a reported basis. On a pro forma, constant currency basis, International revenue increased 5% from the prior year, primarily on strong gaming product sales.

International lottery same-store revenue was up approximately 4% on continued strength in instant tickets and local draw-based games. Lottery product sales were below the prior-year period on a pro forma, constant currency basis due to unfavorable comparisons with a large sale in Belgium in the fourth quarter of 2014.

International gaming service revenue was below the fourth quarter of 2014 on a pro forma, constant currency basis, primarily due to a contraction in the installed base, principally as a result of the conversion of leased units to product sales in Mexico over the last year. Revenue from gaming product sales was significantly above the prior year on both a reported and pro forma basis as the Company sold a total of 4,965 gaming machines internationally during the fourth quarter, with particular strength in Latin America.

International operating income was $55 million compared to $61 million in the fourth quarter of 2014. On a pro forma, constant currency basis, International operating income was down 9%, primarily reflecting the mix of products and services sold during the periods.  

Italy
Revenue in the Italy segment was $455 million compared to $489 million in the fourth quarter of 2014 due to the strengthening of the U.S. dollar against the euro. Excluding currency translation, Italian revenue rose 6% on underlying operating expansion, primarily from machine gaming.

Total Lotto wagers in the quarter were €1,855 million, 6% greater than the €1,746 million achieved in the prior-year period. Strong Lotto performance was a result of low-teens growth in 10eLotto that was partially offset by lower late number activity. Instant-ticket wagers were €2,391 million versus €2,436 million last year, as several new product introductions have helped to improve on the year-to-date trend.

Machine gaming service revenue rose 15% in constant currency, as improved machine productivity and mix continue to offset lower AWP units.

Operating income for Italy was $132 million, 17% greater than the fourth quarter of 2014 on a reported basis and 42% higher on a pro forma, constant currency basis. Approximately half of the growth in operating income reflects underlying performance improvement and cost discipline despite unfavorable Stability Law impacts. Operating income also benefited from the multi-year VAT credit mentioned earlier and the favorable comparison with expenses related to the sale of the ticketing business in the prior year period.

Overview of Consolidated Full Year 2015 Results

Reported consolidated revenue was $4,689 million compared to $3,812 million in 2014. On a pro forma, constant currency basis, consolidated revenue declined 4%, primarily reflecting lower gaming product sales and service revenues that were partially offset by growth in lottery and social gaming operations. During the year, the Company sold 35,159 gaming machines worldwide and global lottery same-store revenue, excluding Italy, increased 6%.

On a reported basis, adjusted EBITDA of $1,611 million was 16% greater than the 2014 level. Pro forma adjusted EBITDA was $1,704 million, which was at the high end of management's guidance and included approximately $95 million in synergy savings. 

Reported operating income was $540 million compared to $715 million in 2014. On a pro forma, constant currency basis, adjusted operating income was 9% below 2014, primarily reflecting weaker commercial gaming trends and higher taxes in Italy that were partially offset by synergy savings.

Interest expense was $458 million compared to $262 million in the prior-year period due to increased debt incurred to finance the legacy IGT acquisition.

Net loss attributable to IGT was $76 million in 2015. On an adjusted basis, net income was $362 million. The Company reported a net loss per diluted share of $0.39 but earned $1.87 per diluted share on an adjusted basis in 2015.

Other Developments

The Company's Board of Directors has declared a quarterly cash dividend of $0.20 per ordinary share. The dividend is payable on April 14, 2016 to all shareholders of record as of the close of business on March 31, 2016.

The Company also announced that, effective March 16, 2016, Tracey Weber has stepped down as a member of its Board of Directors. The Company's Board is now comprised of 12 members. As a result of Ms. Weber's departure, Jeremy Hanley has been appointed to the Company's Nominating and Corporate Governance Committee. "On behalf of the IGT PLC Board, I would like to thank Tracey for her valuable contributions to the Company," said Phil Satre, Chairman of the IGT PLC Board.

In a news release issued on March 16, 2016, the Company announced that it has entered into a consortium of strategic and financial partners to bid for the Italian Lotto concession. If the consortium is awarded the Lotto concession, a joint venture company will be established. IGT, through its Lottomatica subsidiary, will serve as the operating partner with a 61.5% equity ownership of the joint venture.

Outlook

The Company's outlook assumes it is successful in securing the Italian Lotto concession. The Company currently expects to achieve adjusted EBITDA of $1,740-$1,790 million for the full year period, supported by growth in core operations and using an average euro/dollar exchange rate of 1.10 versus 1.11 last year. A modest headwind is expected from other currencies, notably the British pound, Australian dollar, and certain Latin American currencies.

The Company has increased its cost synergy target to $270 million from its prior expectation of $230 million and continues to expect revenue synergies of $50 million. Compared to 2015, at least $70 million in incremental synergies is included in the EBITDA guidance for 2016. The synergies are expected to mitigate the anticipated impacts of currency translation, higher gaming machine taxes in Italy, and a lower contribution from Lotto as a result of new concession terms.

Capital expenditures excluding the Lotto concession are expected to be $575-$625 million, including lottery maintenance and gaming capital expenditures of approximately $500 million and approximately $100 million for lottery growth capital. A successful renewal of the Italian Lotto concession would require additional capital expenditures in 2016 of at least $660 million at current rates. Net debt is expected to be $7,700-$7,900 million at the end of 2016.

Conference Call and Webcast

Today, at 8:00 a.m. EDT / 12:00 p.m. GMT / 1:00 p.m. CET, management will host a conference call to present the fourth quarter and full year 2015 results. Listeners may access a live webcast of the conference call along with accompanying slides under "News, Events and Presentations" on IGT's Investor Relations website at www.IGT.com. A replay of the webcast will be available on the website following the live event. To listen by telephone, the dial in number is +44 (0) 20 3427 1904 for participants in the United Kingdom and +1-646-254-3362 for listeners outside the United Kingdom. The conference ID/confirmation code is 6623346. A telephone replay of the call will be available for one week at +44 (0) 20 3427 0598 or +1-347-366-9565 using the conference ID/confirmation code 6623346.

About IGT
IGT (NYSE: IGT) is the global leader in gaming. We enable players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Interactive and Social Gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has over 12,000 employees. For more information, please visit www.IGT.com.

Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning IGT and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, dividends, results of operations or financial condition, or otherwise, based on current beliefs of the management of IGT 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 are subject to various risks and uncertainties, many of which are outside IGT'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 the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the possibility that that the businesses of International Game Technology and GTECH S.p.A. will not be integrated successfully, or that the combined companies will not realize estimated cost savings, synergies, growth or other anticipated benefits or that such benefits may take longer to realize than expected; the possibility that the Company will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than anticipated; the possibility that IGT may not obtain its anticipated financial results in one or more future periods; unanticipated costs of integration of the two companies; reductions in customer spending; a slowdown in customer payments and changes in customer demand for products and services; unanticipated changes relating to competitive factors in the industries in which the company operates; the Company's ability to hire and retain key personnel; the impact of the consummation of the business combination on relationships with third parties, including customers, employees and competitors; the Company's ability to attract new customers and retain existing customers in the manner anticipated; reliance on and integration of information technology systems; changes in legislation or governmental regulations affecting the company; international, national or local economic, social or political conditions that could adversely affect the company or its customers; conditions in the credit markets; risks associated with assumptions the company makes in connection with its critical accounting estimates; the resolution of pending and potential future legal, regulatory or tax proceedings and investigations; and the company's international operations, which are subject to the risks of currency fluctuations and foreign exchange controls. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect IGT's business, including those described in IGT's annual report on Form 20-F for the financial year ended December 31, 2014 and other documents filed from time to time with the Securities and Exchange Commission (the "SEC"), which are available on the SEC website at www.sec.gov and on the investor relations section of IGT's website at www.IGT.com. Except as required under applicable law, IGT does not assume any obligation to update the forward-looking statements. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per IGT share for the current or any future financial years will necessarily match or exceed the historical published earnings per IGT share, 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 IGT, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.

Contact:
Robert K. Vincent, Corporate Communications, toll free in U.S./Canada (844) IGT-7452; outside U.S./Canada (401) 392-7452
James Hurley, Investor Relations, (401) 392-7190
Simone Cantagallo, (+39) 06 51899030; for Italian media inquiries

International Game Technology PLC and Subsidiaries





Consolidated Income Statements












 For the three months ended  



 December 31, 



2015


2014

($ and shares in thousands, except per share data)


 Unaudited 

Service revenue


1,109,029


845,501

Product sales


255,928


105,558

Total revenue


1,364,957


951,059






Cost of services


674,302


595,730

Cost of sales


180,021


58,585

Selling, general and administrative


242,997


107,252

Research and development


84,552


27,088

Restructuring expense


35,326


10,136

Impairment loss


12,497


795

Transaction expense, net


3,701


37,195



1,233,396


836,781






Operating income


131,561


114,278






Interest income


4,765


1,660

Equity income, net


-


307

Other income


2,659


3,252

Other expense


(4,733)


(110,074)

Foreign exchange gain, net


91,105


1,597

Interest expense


(119,334)


(75,295)



(25,538)


(178,553)






Income (loss) before income tax expense


106,023


(64,275)






Income tax expense


22,990


85,859






Net income (loss)


83,033


(150,134)






Less: Net income attributable to non-controlling interests


9,533


479






Net income (loss) attributable to IGT


73,500


(150,613)











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

0.37


(0.87)

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

0.37


(0.87)






Weighted-average shares - basic


199,862


173,069

Weighted-average shares - diluted


200,731


173,069

 

International Game Technology PLC and Subsidiaries





Consolidated Income Statements












 For the years ended  



 December 31, 



2015


2014

($ and shares in thousands, except per share data)


 Unaudited 

Service revenue


3,977,693


3,489,969

Product sales


711,363


322,342

Total revenue


4,689,056


3,812,311






Cost of services


2,417,315


2,324,043

Cost of sales


520,343


190,454

Selling, general and administrative


795,252


413,001

Research and development


277,401


108,175

Restructuring expense


76,896


23,654

Impairment loss


12,497


2,597

Transaction expense, net


49,396


35,336



4,149,100


3,097,260






Operating income


539,956


715,051






Interest income


17,681


4,765

Equity income (loss), net


207


(2,114)

Other income


6,939


7,650

Other expense


(129,441)


(119,129)

Foreign exchange gain (loss), net


5,611


(3,786)

Interest expense


(457,984)


(262,220)



(556,987)


(374,834)






Income (loss) before income tax expense


(17,031)


340,217






Income tax expense


38,896


240,413






Net income (loss)


(55,927)


99,804






Less: Net income attributable to non-controlling interests


19,647


13,642






Net income (loss) attributable to IGT


(75,574)


86,162











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


(0.39)


0.50

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

(0.39)


0.49






Weighted-average shares - basic


192,398


173,792

Weighted-average shares - diluted


192,398


174,490

 

International Game Technology PLC and Subsidiaries




Condensed Consolidated Balance Sheets









 December 31,  


 December 31,  


2015


2014

($ thousands)

 Unaudited 

ASSETS




Cash and cash equivalents

627,484


317,106

Restricted cash

169,101


108,115

Trade and other receivables

959,592


919,606

Inventories

269,982


184,593

Other current assets

423,701


211,786

Income taxes receivable

35,514


6,628

Total current assets

2,485,374


1,747,834





Systems, equipment and other assets related to contracts, net

1,127,518


1,086,426

Property, plant and equipment, net

349,677


123,542

Goodwill

6,830,499


3,958,881

Intangible and other assets, net

4,273,550


1,500,835

Deferred income taxes

48,074


50,530

Total non-current assets

12,629,318


6,720,214





TOTAL ASSETS

15,114,692


8,468,048





LIABILITIES AND SHAREHOLDERS' EQUITY




LIABILITIES




Accounts payable

1,057,860


1,241,037

Other current liabilities

922,586


862,357

Current portion of long-term debt

160


849,600

Short-term borrowings

-


10,800

Income taxes payable

30,020


20,892

Total current liabilities

2,010,626


2,984,686





Long-term debt, less current portion

8,334,013


2,099,071

Deferred income taxes

941,150


236,154

Other non-current liabilities

462,493


200,417

Total non-current liabilities

9,737,656


2,535,642





TOTAL LIABILITIES

11,748,282


5,520,328





COMMITMENTS AND CONTINGENCIES

-


-





SHAREHOLDERS' EQUITY

3,366,410


2,947,720





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

15,114,692


8,468,048

 

International Game Technology PLC and Subsidiaries


Consolidated Statements of Cash Flows









 For the years ended  


 December 31, 


2015


2014

($ thousands)

 Unaudited 

Cash flows from operating activities




Net income (loss)

(55,927)


99,804

Adjustments for:




Amortization 

410,264


148,823

Depreciation 

369,564


323,729

Service revenue amortization

107,812


126,253

Net expense in connection with the early extinguishment of debt

73,806


88,628

Debt issuance cost amortization

40,366


48,604

Share-based payment expense

36,067


13,823

Impairment loss

12,497


2,597

Other

45,015


38,398

Cash flows before changes in operating assets and liabilities

1,039,464


890,659

Changes in operating assets and liabilities:




Trade and other receivables

83,218


171,258

Inventories

72


3,620

Accounts payable

(53,762)


(20,184)

Other assets and liabilities

(282,995)


20,557

Net cash flows from operating activities

785,997


1,065,910





Cash flows from investing activities




Acquisition of IGT, net of cash acquired

(3,241,415)


-

Capital expenditures

(402,634)


(335,220)

Proceeds from sale of assets

230,587


1,390

Jackpot annuity investments, net

29,416


-

Other

22,523


13,705

Net cash flows used in investing activities

(3,361,523)


(320,125)





Cash flows from financing activities




Proceeds from issuance of long-term debt

6,521,991


897,115

Proceeds from interest rate swaps

67,773


15,294

Capital increase - non-controlling interest

9,049


7,789

Treasury shares purchased

-


(53,161)

Acquisition of non-controlling interest

-


(99,726)

Net (payments of) receipts from financial liabilities

(21,539)


58,911

Payments in connection with note consents

(29,022)


(6,773)

Dividends paid - non-controlling interest

(29,156)


(45,561)

Return of capital - non-controlling interest

(30,568)


(74,441)

Payments on bridge facility

(51,409)


(63,999)

Payments in connection with the early extinguishment of debt

(79,526)


(88,628)

Debt issuance costs paid

(84,859)


(23,542)

Dividends paid 

(209,394)


(177,608)

Payments to withdrawing shareholders

(407,759)


-

Principal payments on long-term debt

(2,714,867)


(1,295,575)

Other

(20,353)


(9,030)

Net cash flows provided by (used in) financing activities

2,920,361


(958,935)





Net increase in cash and cash equivalents

344,835


(213,150)

Effect of exchange rate changes on cash

(34,457)


(47,752)

Cash and cash equivalents at the beginning of the period

317,106


578,008

Cash and cash equivalents at the end of the period

627,484


317,106

 

International Game Technology PLC and Subsidiaries



Net Debt

















December 31,


December 31,

($ thousands)

2015


2014

Long-term debt, less current portion




Senior Secured Notes

4,809,999


-

Term Loan Facilities

866,785


-

Revolving Credit Facilities

834,968


876,505

Notes due February 2018

533,915


590,557

Notes due June 2019

530,009


-

Notes due March 2020

520,649


575,270

Notes due June 2020

126,833


-

Notes due October 2023

61,303


-

Capital Securities

49,472


54,975

Other

80


1,764


8,334,013


2,099,071





Current portion of long-term debt 

160


849,600

Short-term borrowings

-


10,800





Total debt

8,334,173


2,959,471





Cash and cash equivalents

627,484


317,106





Net debt

7,706,689


2,642,365

 


International Game Technology PLC and Subsidiaries








Operating Metrics and Reconciliations








($ and shares in thousands, except per share data)










For the three months ended



December 31,


Change



2015


2014


$


%










Revenue


1,364,957


951,059


413,898


43.5

Adjusted EBITDA


448,797


320,977


127,820


39.8

Operating income


131,561


114,278


17,283


15.1

Adjusted Operating income


293,430


182,307


111,123


61.0

Net income (loss) attributable to IGT


73,500


(150,613)


224,113


148.8

Adjusted Net income (loss) attributable to IGT


127,363


(13,892)


141,255


>500.0  

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


0.37


(0.87)


1.24


142.5

Adjusted Net income (loss) attributable to IGT per ordinary share - diluted


0.63


(0.08)


0.71


>500.0  

Weighted average shares - diluted


200,731


173,069


27,662


16.0










Reconciliations of Non-GAAP Financial Measures












For the three months ended



December 31,


Change



2015


2014


$


%










Net income (loss)


83,033


(150,134)


233,167


155.3

Income tax expense


22,990


85,859


(62,869)


(73.2)

Other expense, net


25,538


178,553


(153,015)


(85.7)

Depreciation 


109,888


80,446


29,442


36.6

Amortization


124,000


38,867


85,133


219.0

Transaction expense, net (1)


3,701


37,195


(33,494)


(90.0)

Service revenue amortization


26,634


29,929


(3,295)


(11.0)

Non-cash purchase accounting (excluding D&A)


1,855


-


1,855


-

Restructuring expense


35,326


10,136


25,190


248.5

Stock compensation


3,335


9,331


(5,996)


(64.3)

Impairment loss


12,497


795


11,702


>500.0  

Adjusted EBITDA


448,797


320,977


127,820


39.8



















Operating income


131,561


114,278


17,283


15.1

Purchase accounting


110,345


19,903


90,442


454.4

Transaction expense, net (1)


3,701


37,195


(33,494)


(90.0)

Restructuring expense


35,326


10,136


25,190


248.5

Impairment loss


12,497


795


11,702


>500.0  

Adjusted Operating income


293,430


182,307


111,123


61.0



















Net income (loss) attributable to IGT


73,500


(150,613)


224,113


148.8

Purchase accounting


127,411


19,294


108,117


>500.0  

Impairment loss


12,497


795


11,702


>500.0  

Debt extinguishment


-


106,203


(106,203)


(100.0)

Foreign exchange gain, net


(91,105)


(1,597)


(89,508)


>500.0  

Transaction expense, net (1)


3,701


37,195


(33,494)


(90.0)

Restructuring expense


35,326


10,136


25,190


248.5

Income tax benefit


(33,967)


(35,305)


1,338


3.8

Adjusted Net income (loss) attributable to IGT


127,363


(13,892)


141,255


>500.0  










Weighted average shares - diluted


200,731


173,069


27,662


16.0

Dilutive shares


-


923


(923)


(100.0)

Adjusted weighted average shares - diluted (2)


200,731


173,992


26,739


15.4










Adjusted Net income (loss) attributable to IGT per ordinary share - diluted


0.63


(0.08)


0.71


>500.0  










(1) Transaction expense, net is composed of transaction costs on significant business combinations and significant gains and losses incurred on disposals of group entities or businesses. These items are only incidentally related to our ordinary activities, are not expected to occur frequently and hinder comparability of our period-over-period performance. We believe separate identification allows users of the financial statements to take them into appropriate consideration when analyzing our performance.










(2) Includes dilutive shares that are excluded from the diluted earnings per share computation as the impact would be anti-dilutive due to the loss incurred during the fourth quarter of 2014.

 


International Game Technology PLC and Subsidiaries








Operating Metrics and Reconciliations








($ and shares in thousands, except per share data)










For the years ended



December 31,


Change



2015


2014


$


%










Revenue


4,689,056


3,812,311


876,745


23.0

Adjusted EBITDA


1,610,685


1,389,266


221,419


15.9

Operating income


539,956


715,051


(175,095)


(24.5)

Adjusted Operating income


1,043,176


854,843


188,333


22.0

Net income (loss) attributable to IGT


(75,574)


86,162


(161,736)


(187.7)

Adjusted Net income attributable to IGT


361,964


275,462


86,502


31.4

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


(0.39)


0.49


(0.88)


(179.6)

Adjusted Net income attributable to IGT per ordinary share - diluted


1.87


1.58


0.29


18.4

Weighted average shares - diluted


192,398


174,490


17,908


10.3



















Reconciliations of Non-GAAP Financial Measures












For the years ended



December 31,


Change



2015


2014


$


%










Net income (loss)


(55,927)


99,804


(155,731)


(156.0)

Income tax expense


38,896


240,413


(201,517)


(83.8)

Other expense, net


556,987


374,834


182,153


48.6

Depreciation 


369,564


323,729


45,835


14.2

Amortization


410,264


148,823


261,441


175.7

Service revenue amortization


107,812


126,253


(18,441)


(14.6)

Transaction expense, net (1)


49,396


35,336


14,060


39.8

Restructuring expense


76,896


23,654


53,242


225.1

Non-cash purchase accounting (excluding D&A)


23,100


-


23,100


-

Stock compensation


21,200


13,823


7,377


53.4

Impairment loss


12,497


2,597


9,900


381.2

Adjusted EBITDA


1,610,685


1,389,266


221,419


15.9



















Operating income


539,956


715,051


(175,095)


(24.5)

Purchase accounting


364,431


78,205


286,226


366.0

Transaction expense, net (1)


49,396


35,336


14,060


39.8

Restructuring expense


76,896


23,654


53,242


225.1

Impairment loss


12,497


2,597


9,900


381.2

Adjusted Operating income


1,043,176


854,843


188,333


22.0










Net income (loss) attributable to IGT


(75,574)


86,162


(161,736)


(187.7)

Purchase accounting


386,835


76,446


310,389


406.0

Impairment loss


12,497


2,597


9,900


381.2

Debt extinguishment


117,252


106,203


11,049


10.4

Foreign exchange loss (gain), net


(5,611)


3,786


(9,397)


(248.2)

Transaction expense, net (1)


49,396


35,336


14,060


39.8

Restructuring expense


76,896


23,654


53,242


225.1

Income tax benefit


(199,727)


(58,722)


(141,005)


(240.1)

Adjusted Net income attributable to IGT


361,964


275,462


86,502


31.4










Weighted average shares - diluted


192,398


174,490


17,908


10.3

Dilutive shares


1,161


-


1,161


-

Adjusted weighted average shares - diluted (2)


193,559


174,490


19,069


10.9










Adjusted Net income attributable to IGT per ordinary share - diluted


1.87


1.58


0.29


18.4










Cash flows from operating activities


785,997


1,065,910


(279,913)


(26.3)

Capital expenditures


(402,634)


(335,220)


(67,414)


(20.1)

Free Cash Flow


383,363


730,690


(347,327)


(47.5)










(1) Transaction expense, net is composed of transaction costs on significant business combinations and significant gains and losses incurred on disposals of group entities or businesses. These items are only incidentally related to our ordinary activities, are not expected to occur frequently and hinder comparability of our period-over-period performance. We believe separate identification allows users of the financial statements to take them into appropriate consideration when analyzing our performance.


(2) Includes dilutive shares that are excluded from the diluted earnings per share computation as the impact would be anti-dilutive due to the loss incurred in 2015.

 

International Game Technology PLC and Subsidiaries






Segment Information








($ in thousands)



































For the three months ended December 31, 


2015


2014


2015


2014

Segments

Revenue


Operating income 

North America Gaming & Interactive

377,686


44,970


106,428


8,374

North America Lottery

269,181


224,380


42,506


17,220

International

265,085


192,100


54,955


60,673

Italy

454,625


489,428


132,413


113,313


1,366,577


950,878


336,302


199,580









Corporate support

-


-


(94,396)


(65,398)

Purchase accounting

(1,620)


182


(110,345)


(19,903)


1,364,957


951,060


131,561


114,279


































For the years ended December 31, 


2015


2014


2015


2014

Segments

Revenue


Operating income 

North America Gaming & Interactive

1,101,807


132,501


294,256


1,054

North America Lottery

1,045,670


940,097


182,615


74,293

International

853,074


630,629


164,949


156,295

Italy

1,704,046


2,108,362


554,937


711,881


4,704,597


3,811,589


1,196,757


943,523









Corporate support

-


-


(292,370)


(150,267)

Purchase accounting

(15,541)


722


(364,431)


(78,205)


4,689,056


3,812,311


539,956


715,051

 

International Game Technology PLC Segment Performance




















Pro Forma Revenue Detail 



























($ millions)

































































INTERNATIONAL GAME TECHNOLOGY PLC





As Reported


Legacy IGT


Pro Forma





2014

2015


2014

2015


2014

2015





Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY


Q1 

Q2 

Q3

Q4 

FY

Q1


Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY

Gaming


Total Revenue

305

312

290

319

1,225

250

676

656

768

2,349


513

468

537

451

1,968

399


818

779

826

769

3,193

649

676

656

768

2,748

































Gaming Services

264

259

249

251

1,023

213

479

513

552

1,758


328

317

319

319

1,284

301


592

577

568

571

2,307

514

479

513

552

2,059



Terminal 

210

206

194

198

808

165

321

320

356

1,162


213

197

196

190

796

175


423

403

391

388

1,604

340

321

320

356

1,337



Social (DDI)

0

0

0

0

0

0

73

80

84

236


69

72

75

79

295

81


69

72

75

79

295

81

73

80

84

317



Other

54

53

55

53

215

48

86

114

112

360


46

49

48

50

192

45


100

102

102

103

407

93

86

114

112

405

































Product Sales

41

53

41

67

202

37

197

142

216

591


185

150

218

131

684

99


226

203

258

199

886

135

197

142

216

690



Terminal 

32

26

33

51

141

27

143

95

154

419


117

88

125

82

412

62


148

114

157

132

553

90

143

95

154

482



Other

9

26

8

17

61

9

54

47

62

171


68

62

93

49

273

37


78

88

101

66

333

46

54

47

62

208

































Lottery


Total Revenue

578

508

533

548

2,167

523

524

478

521

2,046


0

0

0

0

0

0


578

508

533

548

2,167

523

524

478

521

2,046

































Lottery Services

549

481

513

512

2,055

502

481

463

484

1,930


0

0

0

0

0

0


549

481

513

512

2,055

502

481

463

484

1,930



FM/Concessions

491

461

460

458

1,870

446

424

416

430

1,717


0

0

0

0

0

0


491

461

460

458

1,870

446

424

416

430

1,717



LMA

43

0

36

24

102

33

38

22

35

128


0

0

0

0

0

0


43

0

36

24

102

33

38

22

35

128



Other Services

15

19

18

30

82

23

19

25

19

85


0

0

0

0

0

0


15

19

18

30

82

23

19

25

19

85

































Product Sales

29

28

20

36

112

21

43

15

36

115


0

0

0

0

0

0


29

28

20

36

112

21

43

15

36

115



Terminal 

1

2

3

19

25

5

21

0

15

41


0

0

0

0

0

0


1

2

3

19

25

5

21

0

15

41



Systems/Other

28

26

17

17

87

15

22

15

22

74


0

0

0

0

0

0


28

26

17

17

87

15

22

15

22

74

































Other


Total Revenue

132

105

99

85

420

75

74

68

76

294


0

0

0

0

0

0


132

105

99

85

420

75

74

68

76

294

































Service Revenue

130

101

98

82

412

75

74

68

72

289


0

0

0

0

0

0


130

101

98

82

412

75

74

68

72

289


Product Sales

1

3

1

2

8

1

0

0

4

5


0

0

0

0

0

0


1

3

1

2

8

1

0

0

4

5

































Total


Revenue

1,014

925

922

951

3,812

848

1,274

1,202

1,365

4,689


513

468

537

451

1,968

399


1,527

1,393

1,458

1,402

5,780

1,248

1,274

1,202

1,365

5,088

































OI

246

171

184

114

715

163

115

130

132

540


72

110

123

63

368

(7)


318

280

306

178

1,083

156

115

130

132

533
































 

International Game Technology PLC Segment Performance




















Pro Forma Revenue Detail 



























($ millions)

































































NORTH AMERICA GAMING & INTERACTIVE





As Reported


Legacy IGT


Pro Forma





2014

2015


2014

2015


2014

2015





Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY


Q1 

Q2 

Q3

Q4 

FY

Q1


Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY

Gaming


Total Revenue

22

28

37

45

133

30

353

341

378

1,102


393

354

383

343

1,473

311


416

383

420

388

1,606

341

353

341

378

1,413

































Gaming Services

8

9

15

13

46

13

237

267

263

780


263

255

257

261

1,036

245


271

264

272

275

1,082

257

237

267

263

1,025



Terminal 

6

7

13

11

37

10

140

144

137

431


170

157

157

155

639

141


176

164

170

166

676

152

140

144

137

573



Social (DDI)

0

0

0

0

0

0

73

80

84

236


69

72

75

79

295

81


69

72

75

79

295

81

73

80

84

317



Other

2

2

2

2

9

2

24

43

43

112


24

26

25

27

102

23


26

29

27

30

111

25

24

43

43

135

































Product Sales

14

19

22

32

87

17

116

73

115

322


131

99

126

82

437

66


145

118

148

113

524

83

116

73

115

388



Terminal 

13

12

21

30

76

15

84

46

80

224


80

52

60

52

244

43


93

64

81

82

320

57

84

46

80

267



Other

1

7

1

2

11

3

32

27

35

97


51

47

66

29

193

23


52

54

67

31

204

26

32

27

35

121































































































Total


Revenue

22

28

37

45

133

30

353

341

378

1,102


393

354

383

343

1,473

311


416

383

420

388

1,606

341

353

341

378

1,413

































OI

(6)

(4)

2

8

1

7

96

85

106

294


86

103

124

71

384

20


105

117

146

104

472

47

96

85

106

335




































































NORTH AMERICA LOTTERY





As Reported


Legacy IGT


Pro Forma





2014

2015


2014

2015


2014

2015





Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY


Q1 

Q2 

Q3

Q4 

FY

Q1


Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY

Gaming


Total Revenue

16

24

17

16

73

18

37

37

37

130


20

20

20

20

81

19


36

44

37

36

154

37

37

37

37

149

































Gaming Services

16

17

17

16

65

18

37

36

37

128


20

20

20

20

81

19


36

37

37

36

146

37

37

36

37

148



Terminal 

8

9

7

7

31

8

25

26

25

85


19

19

19

19

76

18


27

28

26

27

108

26

25

26

25

103



Social (DDI)

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Other

8

8

9

9

34

9

12

10

12

44


1

1

1

1

4

1


9

9

10

10

38

11

12

10

12

45

































Product Sales

0

7

0

0

8

0

0

0

0

1


0

0

0

0

0

0


0

7

0

0

8

0

0

0

0

1



Terminal 

0

0

0

0

0

0

0

(0)

(0)

0


0

0

0

0

0

(0)


0

0

0

0

0

(0)

0

(0)

(0)

0



Other

0

7

0

0

8

0

0

0

0

1


0

0

0

0

0

0


0

7

0

0

8

0

0

0

0

1































































































Lottery


Total Revenue

245

193

221

208

867

235

233

216

232

916


0

0

0

0

0

0


245

193

221

208

867

235

233

216

232

916

































Lottery Services

222

171

206

201

800

224

216

206

219

864


0

0

0

0

0

0


222

171

206

201

800

224

216

206

219

864



FM/Concessions

156

145

144

153

599

165

154

156

161

636


0

0

0

0

0

0


156

145

144

153

599

165

154

156

161

636



LMA

43

0

36

24

102

33

38

22

35

128


0

0

0

0

0

0


43

0

36

24

102

33

38

22

35

128



Other Services

23

25

26

24

99

25

25

29

22

101


0

0

0

0

0

0


23

25

26

24

99

25

25

29

22

101

































Product Sales

23

22

15

7

67

12

17

10

13

52


0

0

0

0

0

0


23

22

15

7

67

12

17

10

13

52



Terminal 

0

1

2

0

3

0

5

0

0

5


0

0

0

0

0

0


0

1

2

0

3

0

5

0

0

5



Systems/Other

23

21

13

7

64

11

12

10

13

46


0

0

0

0

0

0


23

21

13

7

64

11

12

10

13

46
































































Other


Total Revenue

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0

































Service Revenue

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0


Product Sales

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0
































































Total


Revenue

261

217

238

224

940

253

270

253

269

1,046


20

20

20

20

81

19


282

237

258

245

1,021

273

270

253

269

1,065

































OI

43

(6)

20

17

74

43

47

50

43

183


14

14

14

15

57

15


54

5

30

29

118

55

47

50

43

195
































 

 

International Game Technology PLC Segment Performance




















Pro Forma Revenue Detail 




























($ millions)

































































INTERNATIONAL





As Reported


Legacy IGT


Pro Forma





2014

2015


2014

2015


2014

2015





Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY


Q1 

Q2 

Q3

Q4 

FY

Q1


Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY

Gaming


Total Revenue

41

42

35

51

169

31

134

120

148

433


99

93

134

87

413

69


141

135

168

139

583

100

134

120

148

502

































Gaming Services

15

17

17

17

65

13

50

50

47

160


45

42

42

38

167

37


60

59

59

54

232

49

50

50

47

197



Terminal 

1

1

2

2

6

2

15

15

13

44


24

21

20

16

81

15


25

22

22

18

87

17

15

15

13

59



Social (DDI)

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Other

14

16

15

15

60

11

35

36

34

117


21

21

22

22

86

21


35

37

37

37

146

32

35

36

34

138

































Product Sales

26

25

18

35

104

18

84

69

101

272


54

51

92

50

247

33


80

76

109

84

350

51

84

69

101

305



Terminal 

18

14

11

20

64

12

59

49

74

195


37

36

65

30

167

19


55

50

76

50

231

32

59

49

74

214



Other

8

11

6

14

40

6

25

20

27

78


17

15

27

20

79

13


25

26

33

34

119

19

25

20

27

91































































































































Lottery


Total Revenue

88

82

80

117

367

81

94

73

95

342


0

0

0

0

0

0


88

82

80

117

367

81

94

73

95

342

































Lottery Services

83

76

75

88

322

72

67

68

72

279


0

0

0

0

0

0


83

76

75

88

322

72

67

68

72

279



FM/Concessions

62

56

58

58

234

51

51

49

55

206


0

0

0

0

0

0


62

56

58

58

234

51

51

49

55

206



LMA

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Other Services

21

20

18

30

89

21

17

19

17

73


0

0

0

0

0

0


21

20

18

30

89

21

17

19

17

73

































Product Sales

6

6

5

29

45

9

26

5

23

63


0

0

0

0

0

0


6

6

5

29

45

9

26

5

23

63



Terminal 

1

1

1

19

22

5

16

0

15

36


0

0

0

0

0

0


1

1

1

19

22

5

16

0

15

36



Systems/Other

5

5

4

10

24

4

10

5

9

27


0

0

0

0

0

0


5

5

4

10

24

4

10

5

9

27
































































































Other


Total Revenue

22

24

23

24

94

19

19

18

22

78


0

0

0

0

0

0


22

24

23

24

94

19

19

18

22

78

































Service Revenue

21

21

22

22

86

18

19

17

18

73


0

0

0

0

0

0


21

21

22

22

86

18

19

17

18

73


Product Sales

1

3

1

2

8

1

0

0

4

5


0

0

0

0

0

0


1

3

1

2

8

1

0

0

4

5
































































Total


Revenue

152

148

138

192

631

131

247

210

265

853


99

93

134

87

413

69


251

241

272

279

1,044

200

247

210

265

923

































OI

36

30

29

61

156

27

47

37

55

165


33

40

64

32

169

24


41

48

69

68

227

27

47

37

55

165
































 

International Game Technology PLC Segment Performance





















Pro Forma Revenue Detail 




























($ millions)

































































ITALY





As Reported


Legacy IGT


Pro Forma





2014

2015


2014

2015


2014

2015





Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY


Q1 

Q2 

Q3

Q4 

FY

Q1


Q1 

Q2 

Q3

Q4 

FY

Q1 

Q2 

Q3

Q4 

FY

Gaming


Total Revenue

225

217

201

206

850

171

163

161

206

701


0

0

0

0

0

0


225

217

201

206

850

171

163

161

206

701

































Gaming Services

224

217

201

205

847

170

162

161

206

699


0

0

0

0

0

0


224

217

201

205

847

170

162

161

206

699



Terminal 

194

189

172

178

734

145

140

135

182

602


0

0

0

0

0

0


194

189

172

178

734

145

140

135

182

602



Social (DDI)

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Other

30

27

28

27

113

25

22

26

24

97


0

0

0

0

0

0


30

27

28

27

113

25

22

26

24

97

































Product Sales

1

1

1

1

3

1

1

0

0

2


0

0

0

0

0

0


1

1

1

1

3

1

1

0

0

2



Terminal 

0

0

0

1

1

0

0

0

0

1


0

0

0

0

0

0


0

0

0

1

1

0

0

0

0

1



Other

0

0

1

0

2

0

0

0

0

1


0

0

0

0

0

0


0

0

1

0

2

0

0

0

0

1































































































































Lottery


Total Revenue

244

234

232

222

932

207

197

188

194

787


0

0

0

0

0

0


244

234

232

222

932

207

197

188

194

787

































Lottery Services

244

234

232

222

932

207

197

188

194

787


0

0

0

0

0

0


244

234

232

222

932

207

197

188

194

787



FM/Concessions

273

260

258

247

1,038

230

220

211

215

876


0

0

0

0

0

0


273

260

258

247

1,038

230

220

211

215

876



LMA

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Other Services

(29)

(26)

(26)

(24)

(105)

(23)

(22)

(23)

(21)

(89)


0

0

0

0

0

0


(29)

(26)

(26)

(24)

(105)

(23)

(22)

(23)

(21)

(89)

































Product Sales

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Terminal 

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0



Systems/Other

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0
































































Other


Total Revenue

109

81

75

61

326

56

55

50

54

216


0

0

0

0

0

0


109

81

75

61

326

56

55

50

54

216

































Service Revenue

109

81

75

61

326

56

55

50

54

216


0

0

0

0

0

0


109

81

75

61

326

56

55

50

54

216


Product Sales

0

0

0

0

0

0

0

0

0

0


0

0

0

0

0

0


0

0

0

0

0

0

0

0

0

0
































































Total


Revenue

579

532

509

489

2,108

434

416

400

455

1,704


0

0

0

0

0

0


579

532

509

489

2,108

434

416

400

455

1,704

































OI

213

193

192

113

712

150

141

131

132

555


0

0

0

0

0

0


208

188

188

108

693

145

141

131

132

550
































 


International Game Technology PLC and Subsidiaries











Consolidated Pro Forma Income Statements & Reconciliations










($ millions)
















 As Reported 


 Legacy IGT 


 Pro Forma 



2014

2015


2014

2015


2014

2015



 Q4 

 FY 

 Q4 

 FY 


 Q4 

 FY 

 Q1 


 Q4 

 FY 

 Q4 

 FY 
















Service revenue

846

3,490

1,109

3,978


319

1,284

301


1,165

4,773

1,109

4,278

Product sales

106

322

256

711


131

684

99


237

1,006

256

810

Total revenue

951

3,812

1,365

4,689


451

1,968

399


1,402

5,780

1,365

5,088
















Cost of services

596

2,324

674

2,417


122

482

116


717

2,806

674

2,534

Cost of sales

59

190

180

520


71

315

63


130

506

180

584

Selling, general and administrative

107

413

243

795


116

498

138


223

911

243

934

Research and development

27

108

85

277


63

241

63


90

350

85

340

Restructuring expense

10

24

35

77


0

0

0


10

24

35

77

Impairment loss

1

3

12

12


1

40

7


2

43

12

19

Transaction expense, net1

37

35

4

49


14

24

19


51

59

4

68



837

3,098

1,233

4,149


387

1,600

406


1,224

4,697

1,233

4,555
















Operating income

114

715

132

540


63

368

(7)


178

1,083

132

533














































Reconciliations of  Non-US GAAP Financial Measures






























 As Reported 


 Legacy IGT 


 Pro Forma 



2014

2015


2014

2015


2014

2015



 Q4 

 FY 

 Q4 

 FY 


 Q4 

 FY 

 Q1 


 Q4 

 FY 

 Q4 

 FY 

Operating income

114

715

132

540


63

368

(7)


178

1,083

132

533

Purchase accounting

20

78

110

364


7

31

7


27

109

110

372

Transaction expense, net1

37

35

4

49


14

24

19


51

59

4

68

Restructuring expense

10

24

35

77


0

0

0


10

24

35

77

Impairment loss

1

3

12

12


1

40

7


2

43

12

19

Adjusted Operating Income

182

855

293

1,043


86

462

26


268

1,317

293

1,069
















Net income (loss)

(150)

100

83

(56)


35

203

(13)


(115)

303

83

(69)

Income tax expense

86

240

23

39


17

94

(4)


103

334

23

35

Other expense, net

179

375

26

557


12

71

10


190

446

26

567

Depreciation 

80

324

110

370


28

123

28


108

447

110

397

Amortization

39

149

124

410


10

51

10


49

200

124

420

Service revenue amortization

30

126

27

108


0

0

0


30

126

27

108

Transaction expense, net1

37

35

4

49


14

24

19


51

59

4

68

Restructuring expense

10

24

35

77


0

0

0


10

24

35

77

Non-cash purchase accounting (excluding D&A)

0

0

2

23


0

0

0


0

0

2

23

Stock compensation

9

14

3

21


9

32

6


18

46

3

27

Impairment loss

1

3

12

12


1

40

7


2

43

12

19

Other


0

0

0

0


2

0

32


2

0

0

32

Adjusted EBITDA

321

1,389

449

1,611


127

638

93


448

2,027

449

1,704































NOTE:  The difference between the "As Reported" and "Pro Forma" results presented above reflect the contribution from legacy IGT.
















1Transaction expense (income), net is composed of transaction costs on significant business combinations and significant gains and losses incurred on disposals of group entities or businesses. These items are only incidentally related to our ordinary activities, are not expected to occur frequently and hinder comparability of our period-over-period performance. We believe separate identification allows users of the financial statements to take them into appropriate consideration when analyzing our performance.

 

Key Performance Indicators (KPIs)

Consolidated Key Performance Indicators (KPIs)











Fourth Quarter


Full Year 

Periods Ended December 31


2015

2014

% change 


2015

2014

% change 












Installed base (end of period)









   Casino




34,568

37,537

-7.9%


34,568

37,537

-7.9%

   VLT - Government Sponsored (ex-Italy)

15,491

16,240

-4.6%


15,491

16,240

-4.6%

   VLT - Italy Supplier (B2B)


8,291

8,392

-1.2%


8,291

8,392

-1.2%

   Total installed base



58,350

62,169

-6.1%


58,350

62,169

-6.1%

   Yield (average revenue per unit per day - $0.00)

32.71

33.95

-3.7%


33.74

35.17

-4.1%












   Additional Italian Network Details:









   VLT - Operator (B2C)



11,115

10,956

1.5%


11,115

10,956

1.5%

   AWP




58,328

65,316

-10.7%


58,328

65,316

-10.7%












Machine units shipped 1









   New/Expansion



2,640

1,358

94.4%


6,821

9,860

-30.8%

   Replacement 



8,922

8,170

9.2%


28,338

31,609

-10.3%

   Total machines shipped


11,562

9,528

21.3%


35,159

41,469

-15.2%












Global lottery same-store revenue growth








   Instants & draw games




7.1%




6.7%

   Multistate Jackpots





-6.2%




1.0%

   Total lottery same-store revenue growth (ex-Italy)


5.5%




6.0%












1Machine units shipped reflect mixed historical methodologies of legacy companies prior to 2Q 2015




































North America KPIs














Fourth Quarter


Full Year 

Periods Ended December 31


2015

2014

% change 


2015

2014

% change 












Installed base (end of period)


40,659

43,717

-7.0%


40,659

43,717

-7.0%












Machine units shipped 1









   New/Expansion



2,191

651

236.6%


4,389

7,417

-40.8%

   Replacement 



4,406

4,831

-8.8%


16,993

16,877

0.7%

   Total machines shipped


6,597

5,482

20.3%


21,382

24,294

-12.0%












DoubleDown 










   Revenue ($ Thousands)


83,598

79,353

5.4%


316,999

295,019

7.5%

   Mobile penetration



53%

39%

35.4%


48%

35%

35.0%

   DAU (Daily Active Users) 2 


1,897

1,910

-0.7%


1,879

1,833

2.5%

   MAU (Monthy Active Users) 2


4,411

5,212

-15.4%


4,526

5,780

-21.7%

   Bookings per DAU ($0.00) 2


$      0.47

$      0.43

9.3%


$      0.47

$      0.44

6.8%












Lottery same-store revenue growth








   Instants & draw games




7.6%




7.6%

   Multistate Jackpots





-5.4%




1.5%

   Total lottery same-store revenue growth



5.9%




6.8%












1Machine units shipped reflect mixed historical methodologies of legacy companies prior to 2Q 2015



2As a single application with multiple games, active users equal unique users






































International KPIs














Fourth Quarter


Full Year 

Periods Ended December 31


2015

2014

% change 


2015

2014

% change 












Installed base (end of period)


9,400

10,060

-6.6%


9,400

10,060

-6.6%












Machine units shipped 1









   New/Expansion



449

707

-36.5%


2,432

2,443

-0.5%

   Replacement 



4,516

3,339

35.3%


11,345

14,732

-23.0%

   Total machines shipped


4,965

4,046

22.7%


13,777

17,175

-19.8%












Lottery same-store revenue growth








   Instants & draw games




5.7%




4.5%

   Multistate Jackpots





-0.8%




-0.1%

   Total lottery same-store revenue growth



4.4%




4.1%












1Machine units shipped reflect mixed historical methodologies of legacy companies prior to 2Q 2015




































Italy KPIs















Fourth Quarter


Full Year 

Periods Ended December 31


2015

2014

% change 


2015

2014

% change 

(In € millions, except machines)









Lottery











Lotto wagers



1,855

1,746

6.2%


7,077

6,629

6.7%

   10eLotto




1,147

1,011

13.5%


4,287

3,619

18.5%

   Core




640

642

-0.3%


2,449

2,552

-4.0%

   Late Numbers



68

93

-27.6%


340

459

-25.8%












Scratch & Win Wagers


2,391

2,436

-1.9%


9,016

9,403

-4.1%












Gaming











Installed base (end of period)









   VLT - Operator (B2C)



11,115

10,956

1.5%


11,115

10,956

1.5%

   VLT - Supplier (B2B)



8,291

8,392

-1.2%


8,291

8,392

-1.2%

   AWP




58,328

65,316

-10.7%


58,328

65,316

-10.7%

   Total Installed Base



77,734

84,664

-8.2%