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%

77,734

84,664

-8.2%

Other

   Interactive Wagers (Gaming)

414

449

-8.0%

1,672

1,789

-6.6%

   Sports Betting Wagers1

236

250

-5.9%

864

893

-3.3%

   Sports Betting Payout (%)1

84.6%

86.3%

-1.7 pp

83.7%

80.2%

3.5 pp

1Includes Virtual Wagers and Pools & Horses

 

Logo - http://photos.prnewswire.com/prnh/20150406/196736LOGO

 

SOURCE International Game Technology PLC



RELATED LINKS

http://www.igt.com