International Game Technology PLC Reports First Quarter 2015 Results For Predecessor Companies

Stand-alone results presented for GTECH S.p.A. and for International Game Technology, which were separately managed operations for the period

Solid GTECH EBITDA and stable net financial position reflect portfolio diversity and operational discipline

Integration and synergy plans on track

May 13, 2015, 07:01 ET from International Game Technology PLC

LONDON, May 13, 2015 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported results for GTECH S.p.A.'s ("GTECH") first quarter of 2015 and for International Game Technology's ("Legacy IGT") second quarter of 2015, ended March 31, 2015. The combination of GTECH and Legacy IGT was completed on April 7, 2015. As such, results presented in this news release are for periods predating the combination and during which each company was under separate management. The respective reporting formats of the legacy companies have been maintained in this release for ease of comparison. The results in this news release relating to GTECH are presented in Euros under International Financial Reporting Standards ("IFRS") and results relating to Legacy IGT are presented in U.S. Dollars under U.S. generally accepted accounting principles ("GAAP"). IGT will begin reporting as a combined entity with its second quarter of 2015 results under GAAP.

Commenting on the first quarter performance, Marco Sala, CEO of IGT, noted:  "We had a solid first quarter for GTECH operations, continuing to run the underlying business efficiently and profitably, at the same time as we were completing a transformative merger. We were ready to launch the integration from day one, focusing on revitalizing our R&D capabilities. Exciting content delivered across the whole range of platforms is the key to consolidating our leadership of the global gaming industry."

"We achieved near-record GTECH EBITDA during the first quarter on top of challenging, multi-year comparisons. We also improved our net financial position excluding one-off items linked to the transaction. We have confirmed our $280 million target for cost and revenue synergies and are on track to deliver them on schedule," said Alberto Fornaro, CFO of IGT.

GTECH S.p.A. First Quarter 2015 Results Comparison

Consolidated Income Statement (€/M)

Q1 2015

Q1 2014

% chg

Revenues

807.7

781.3

+3.4

EBITDA 

295.6

296.0

--

Operating Income

149.3

180.8

-17.5

Net Income (Loss) Attributable to Owners

(26.9)

75.0

nm

Diluted Earnings (Loss) Per Share

(0.16)

0.43

nm

EBITDA is principally comprised of operating income plus depreciation, amortization, and impairment. EBITDA is considered an alternative performance measure that is not a defined measure under IFRS and may not take into account the recognition, measurement and presentation requirements associated with IFRS. We believe that EBITDA assists in explaining trends in our operating performance, provides useful information about our ability to incur and service indebtedness and is a commonly used measure of performance by securities analysts and investors in the gaming industry. EBITDA should not be considered as an alternative to operating income as an indicator of our performance or to cash flows as a measure of our liquidity. As we define it, EBITDA may not be comparable to other similarly titled measures used by other companies.

Consolidated Revenues grew 3% to €808 million from €781 million in the first quarter of 2014. This increase was principally driven by higher service revenues, which rose 4% to €755 million from €729 million in the prior year, reflecting net favorable foreign currency effects and lottery growth in Italy and the Americas. Product sales of €52 million were in line with the prior year as lower lottery product sales in the Americas and International machine gaming revenues were offset by favorable currency translation.

EBITDA of €296 million was in line with the first quarter of last year and near all-time peak levels, reflecting growth in the Americas and stability in the International segment, in addition to net favorable foreign currency effects, which offset the impact of a higher sports betting payout in Italy.

Operating Income was €149 million compared to €181 million in the first quarter of 2014. Operating Income was €170 million excluding one-off items, primarily transaction and restructuring costs associated with the acquisition of Legacy IGT.

Interest Expense was €81 million compared to €41 million last year, the increase being principally due to financing associated with the acquisition of Legacy IGT.

Net Loss Attributable to the Owners was €27 million compared to net income of €75 million in the first quarter of 2014. The Net Loss Attributable to the Owners primarily reflects higher Interest Expense and other charges associated with the acquisition of Legacy IGT. Diluted Loss-Per-Share was €0.16 compared to Diluted Earnings-Per-Share of €0.43 in the comparable prior year period, again reflecting acquisition-related items.

Cash from Operations was €158 million compared to €163 million in the prior year. Capital Expenditures in the first quarter were €65 million.

At March 31, 2015, Consolidated Shareholders' Equity totaled €2.59 billion. GTECH had a Net Financial Position (NFP) of €3.16 billion versus €2.59 billion as of December 31, 2014. Excluding one-off items primarily related to the acquisition of Legacy IGT, NFP was €2.56 billion at the end of the first quarter of 2015.

First Quarter Results by Segment

Americas Revenues in the Americas segment grew 23% to €300 million in the quarter. In constant currency and excluding pass-through reimbursements, Revenues were up 4%. Service revenues increased 26%, supported by favorable foreign currency effects; strong instant ticket sales and multistate jackpot activity; and substantial growth for machine gaming operations. Product sales of €34 million in the quarter were modestly above the prior year period, as a significant increase in machine gaming revenues and favorable foreign currency effects were partially offset by lower lottery product sales.

Operating Income from the Americas segment of €46 million was 51% greater than the prior year period, reflecting favorable foreign currency effects, strong lottery same-store revenue growth, and higher machine gaming profits from both product sales and the contribution from a larger installed base of gaming machines.

International Revenues in the International segment were €77 million, €1 million greater than the prior year, driven by favorable foreign currency effects and increased lottery revenues that were partially offset by lower machine gaming product sales.

International lottery same-store revenues were up approximately 11% compared to the same period in 2014, reflecting continued strength in instant ticket sales in the United Kingdom and robust jackpot growth in Eastern Europe. 

Operating Income in the International segment was €13 million versus €15 million in the first quarter of last year, as higher lottery profits were more than offset by lower product sales and a broad mix of items.

Italy Revenues in Italy were €430 million compared to €461 million in the first quarter of 2014, principally due to higher sports betting payout. While sports betting wagers were up 2% in the first quarter, sports betting revenues were €39 million compared to €62 million last year due to a 10 percentage point increase in payout.

Total Lotto wagers for the quarter were up 16% to €1.82 billion compared to €1.57 billion last year, driven by strong performance in 10eLotto and late-numbers. Instant-ticket wagers declined 7% to €2.30 billion versus €2.48 billion last year, partially due to the cadence of new product introductions.

Machine gaming revenues were €135 million versus €145 million last year, reflecting the impact of the new Italian Stability Law.

Operating Income of €140 million compared to €158 million last year primarily reflects the impact of the higher sports betting payout.

Other News

Pursuant to the Agreement and Plan of Merger, as amended, providing for the combination of GTECH and Legacy IGT, Philip G. Satre was appointed as Chairman of the Board of Directors and each of Patti S. Hart and Lorenzo Pellicioli was appointed as Vice Chairman of the Board of Directors.

Conference call and webcast

Today, at 8:00 a.m. EDT / 1:00 p.m. BST / 2:00 p.m. CEST, management will host a conference call to present the first quarter 2015 results. Listeners may access a live webcast of the conference call along with accompanying slides under "News and Presentations" on IGT's Investor Relations website at www.merger.igt.com/investors. 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 3450 9571 for participants in the United Kingdom and +1 646 254-3387 for listeners outside the United Kingdom. The conference ID/confirmation code is 2660253. 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 2660253.

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 generated approximately $6 billion in revenues in 2014 and has more than 13,000 employees. For more information, please visit www.merger.igt.com.

Cautionary Statement Regarding Forward-Looking Statements This communication 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, projections and expectations as to future plans, strategies, strengths, trends, events, results of operations or financial condition, revenue, income, earnings (or loss) per share, capital expenditures, dividends, capital structure or other financial items, 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 such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) risks that the businesses of Legacy IGT and GTECH S.p.A. will not be integrated successfully, following the recent completion of their business combination, or that the combined companies will not realize estimated cost savings, value of certain tax assets, synergies, growth or other anticipated benefits or that such benefits may take longer to realize than expected; risks relating to 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; ability to hire and retain key personnel; the potential impact of the consummation of the business combination on relationships with third parties, including customers, employees and competitors; 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 legal 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 the company's business, including those described in IGT's registration statement on Form F-4 and other documents filed from time to time with the Securities and Exchange Commission (the "SEC"). Forward-looking statements speak only as of the date on which such statements are made, Except as required under applicable law, the company does not assume any obligation to update these forward-looking statements. Nothing in this announcement 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 communication 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 its entirety by the cautionary statements contained throughout this communication.

Contact: Robert K. Vincent, Corporate Communications, +1 (401) 392-7452 James Hurley, Investor Relations, +1 (401) 392-7190 Simone Cantagallo, Italian Media Relations, +39 06 51899030

GTECH S.P.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS 

For the three months ended

March 31,

2015

2014

(€ thousands)

Unaudited

Service revenue

755,435

729,475

Product sales

52,254

51,778

Total revenue

807,689

781,253

Raw materials, services and other costs

387,915

374,405

Personnel

170,416

134,868

Depreciation 

66,324

61,970

Amortization

53,623

49,022

Capitalization of internal construction costs - labor and overhead

(29,941)

(19,855)

Unusual expense, net

10,080

-

658,417

600,410

Operating income 

149,272

180,843

Interest income

556

794

Equity income (loss), net

(203)

66

Other income

490

453

Other expense

(121,530)

(2,234)

Foreign exchange gain (loss), net

8,542

(1,162)

Interest expense

(81,256)

(40,597)

(193,401)

(42,680)

Income (loss) before income tax expense

(44,129)

138,163

Income tax expense (benefit)

(20,560)

56,648

Net income (loss)

(23,569)

81,515

Attributable to:

Owners of the parent

(26,930)

75,029

Non-controlling interests

3,361

6,486

(23,569)

81,515

Earnings (loss) per share/ADRs

Basic - net income (loss) attributable to owners of the parent

€             (0.16)

€              0.43

Diluted - net income (loss) attributable to owners of the parent

€             (0.16)

€              0.43

GTECH S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 March 31,  

 December 31,  

2015

2014

(€ thousands)

 Unaudited 

 Audited 

ASSETS

Non-current assets

Systems, equipment and other assets related to contracts, net

980,232

910,095

Property, plant and equipment, net

83,468

77,394

Goodwill

3,731,622

3,402,201

Intangible assets, net

1,165,976

1,151,472

Investments in associates and joint ventures

24,670

24,474

Other non-current assets

82,206

75,495

Non-current financial assets

23,470

21,557

Deferred income taxes

9,275

22,026

Total non-current assets

6,100,919

5,684,714

Current assets

Inventories

178,298

152,042

Trade and other receivables, net

776,647

757,444

Other current assets

292,814

255,288

Current financial assets

40,496

10,386

Income taxes receivable

5,247

5,459

Cash and cash equivalents

254,620

261,184

Total current assets

1,548,122

1,441,803

TOTAL ASSETS

7,649,041

7,126,517

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Issued capital

175,122

174,976

Share premium 

1,653,307

1,651,498

Treasury shares

(418,596)

(40,211)

Retained earnings 

158,936

171,065

Other reserves

774,530

378,947

2,343,299

2,336,275

Non-controlling interests

242,811

281,814

Total equity

2,586,110

2,618,089

Non-current liabilities

Long-term debt, less current portion

2,847,954

1,725,738

Deferred income taxes

143,841

177,296

Long-term provisions

10,377

13,038

Other non-current liabilities

58,990

57,728

Non-current financial liabilities

62,280

60,518

Total non-current liabilities

3,123,442

2,034,318

Current liabilities

Accounts payable

922,427

1,022,194

Short-term borrowings

2

8,895

Other current liabilities

435,226

356,414

Current financial liabilities

501,828

275,019

Current portion of long-term debt

41,486

786,878

Short-term provisions

1,120

991

Income taxes payable

37,400

23,719

Total current liabilities

1,939,489

2,474,110

TOTAL EQUITY AND LIABILITIES

7,649,041

7,126,517

GTECH S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

 For the three months ended  

 March 31, 

2015

2014

(€ thousands)

 Unaudited 

Cash flows from operating activities

Income (loss) before income tax expense

(44,129)

138,163

Adjustments for:

Interest expense

81,256

40,597

Tender premium paid in connection with the early extinguishment of debt

66,834

-

Depreciation 

66,324

61,970

Intangibles amortization 

53,649

49,044

Write-off of bridge facility costs

45,279

-

Provisions

919

955

Share-based payment expense 

305

1,618

Interest income

(556)

(794)

Non-cash foreign exchange (gain) loss, net

(10,686)

781

Other non-cash items

8,407

2,251

Cash foreign exchange loss, net

2,144

381

Income tax paid

(12,160)

(17,946)

Cash flows before changes in operating assets and liabilities

257,586

277,020

Changes in operating assets and liabilities:

Inventories

(15,043)

5,826

Trade and other receivables

(29,936)

49,798

Accounts payable

(73,300)

(117,410)

Other assets and liabilities

18,396

(51,739)

Net cash flows from operating activities

157,703

163,495

Cash flows from investing activities

Purchases of systems, equipment and other assets related to contracts

(58,787)

(40,529)

Purchases of intangible assets

(4,437)

(3,755)

Purchases of property, plant and equipment

(1,518)

(980)

Interest received

1,240

416

Escrow deposit

-

(21,858)

Other

873

(3,989)

Net cash flows used in investing activities

(62,629)

(70,695)

Cash flows from financing activities

Principal payments on long-term debt

(704,505)

-

Dividends paid 

(114,746)

-

Interest paid

(109,190)

(108,486)

Tender premium paid in connection with the early extinguishment of debt

(64,905)

-

Debt issuance costs paid

(64,863)

-

Payments on bridge facility

(45,737)

-

Net payments on financial liabilities

(21,452)

-

Escrow payment related to dividend on rescission shares

(14,850)

-

Repayments of short-term borrowings

(9,562)

(836)

Dividends paid - non-controlling interest

(566)

(32,059)

Proceeds from issuance of long-term debt

1,034,470

-

Return of capital - non-controlling interest

-

(42,145)

Acquisition of non-controlling interest

-

(72,328)

Other

(431)

4,328

Net cash flows used in financing activities

(116,337)

(251,526)

Net decrease in cash and cash equivalents

(21,263)

(158,726)

Effect of exchange rate changes on cash

14,699

(4,092)

Cash and cash equivalents at the beginning of the period

261,184

419,118

Cash and cash equivalents at the end of the period

254,620

256,300

GTECH S.P.A. AND SUBSIDIARIES

KEY FINANCIAL INDICATOR COMPARISONS

For the three months ended

March 31,

Change

(€ thousands, except per share data)

2015

2014

%

Revenue

807,689

781,253

26,436

3.4

EBITDA

295,598

296,037

(439)

(0.1)

Operating income

149,272

180,843

(31,571)

(17.5)

Net income (loss) attributable to owners of the parent

(26,930)

75,029

(101,959)

(135.9)

Diluted earnings (loss) per share

(0.16)

0.43

(0.59)

(137.2)

March 31,

December 31,

Change

2015

2014

%

Net financial position

3,158,433

2,585,478

572,955

22.2

Reconciliations of IFRS to Non-IFRS Financial Measures

Operating income

149,272

180,843

(31,571)

(17.5)

Depreciation 

66,324

61,970

4,354

7.0

Amortization

53,623

49,022

4,601

9.4

Restructuring costs

13,349

3,033

10,316

 >200.0 

Unusual expense, net 

10,080

-

10,080

-

Other

2,950

1,169

1,781

152.4

EBITDA

295,598

296,037

(439)

(0.1)

Operating income

149,272

180,843

(31,571)

(17.5)

IGT Acquisition related items:

Transaction costs

10,080

-

10,080

-

Transaction related restructuring costs

10,621

-

10,621

-

Operating income as adjusted

169,973

180,843

(10,870)

(6.0)

GTECH S.P.A. AND SUBSIDIARIES

OPERATING SEGMENT RESULTS

For the three months ended 

March 31, 2015

March 31, 2014

Change

(€ thousands)

Italy

Americas

International

Total

Italy

Americas

International

Total

Italy

Americas

International

Total

Service revenue

Lottery

208,855

192,766

42,821

444,442

200,267

151,521

41,092

392,880

8,588

41,245

1,729

51,562

Lottery Management Services

-

33,546

-

33,546

-

31,663

-

31,663

-

1,883

-

1,883

Total Lottery

208,855

226,312

42,821

477,988

200,267

183,184

41,092

424,543

8,588

43,128

1,729

53,445

Machine Gaming

134,219

25,959

5,991

166,169

144,587

17,903

5,691

168,181

(10,368)

8,056

300

(2,012)

Sports Betting

38,745

1,112

1,798

41,655

62,267

547

1,475

64,289

(23,522)

565

323

(22,634)

Commercial Services

29,126

8,947

4,686

42,759

34,167

8,649

4,627

47,443

(5,041)

298

59

(4,684)

Interactive Gaming

18,810

3,205

4,688

26,703

19,211

935

4,743

24,889

(401)

2,270

(55)

1,814

Total service revenue

429,755

265,535

59,984

755,274

460,499

211,218

57,628

729,345

(30,744)

54,317

2,356

25,929

Product sales

Lottery

-

10,971

7,406

18,377

-

17,525

3,185

20,710

-

(6,554)

4,221

(2,333)

Machine Gaming

636

23,516

8,806

32,958

622

15,628

13,868

30,118

14

7,888

(5,062)

2,840

Sports Betting

-

-

790

790

-

-

910

910

-

-

(120)

(120)

Interactive Gaming

-

-

129

129

-

-

40

40

-

-

89

89

Total product sales

636

34,487

17,131

52,254

622

33,153

18,003

51,778

14

1,334

(872)

476

Total segment revenue

430,391

300,022

77,115

807,528

461,121

244,371

75,631

781,123

(30,730)

55,651

1,484

26,405

Purchase accounting

161

130

31

Total revenue

807,689

781,253

26,436

Segment operating income

139,626

45,991

12,542

198,159

157,768

30,492

15,330

203,590

(18,142)

15,499

(2,788)

(5,431)

Corporate support (1)

(34,270)

(9,996)

(24,274)

Purchase accounting

(14,617)

(12,751)

(1,866)

Operating income

149,272

180,843

(31,571)

Segment operating margin

32.4%

15.3%

16.3%

24.5%

34.2%

12.5%

20.3%

26.1%

Operating income margin

18.5%

23.1%

(1) Corporate support expenses are principally comprised of general and administrative expenses and other expenses that are managed at the corporate level, including Restructuring, Corporate Headquarters and Board of Directors expenses.

GTECH S.P.A. AND SUBSIDIARIES

AMERICAS SEGMENT

The following tables set forth changes in revenue on a constant currency basis:

Service Revenue Change

For the three months ended March 31, 2015 

compared to March 31, 2014

Constant

Foreign 

(€ thousands)

Currency

Currency

Change

Lottery

5,933

35,312

41,245

Machine Gaming

3,524

4,532

8,056

Interactive Gaming

2,198

72

2,270

Sports Betting

475

90

565

Commercial Services

(196)

494

298

Lottery Management Services

(4,827)

6,710

1,883

7,107

47,210

54,317

Service Revenue Change

For the three months ended

March 31,

Change

(€ thousands)

2015

2014

%

Lottery Same-Store Revenues

140,200

133,637

6,563

4.9

Wins

3,241

-

3,241

-

Gaming & Other

48,048

45,918

2,130

4.6

Lottery Management Services

26,836

31,663

(4,827)

(15.2)

Foreign Exchange Impact

47,210

-

47,210

-

Total Service Revenue

265,535

211,218

54,317

25.7

Product Sales Change

For the three months ended March 31, 2015 

compared to March 31, 2014

Constant

Foreign 

(€ thousands)

Currency

Currency

Change

Lottery

(8,452)

1,898

(6,554)

Machine Gaming

6,014

1,874

7,888

(2,438)

3,772

1,334

GTECH S.P.A. AND SUBSIDIARIES INTERNATIONAL SEGMENT

The following tables set forth changes in revenue on a constant currency basis:  

Service Revenue Change

For the three months ended March 31, 2015 

compared to March 31, 2014

Constant

Foreign 

(€ thousands)

Currency

Currency

Change

Lottery

(1,279)

3,008

1,729

Interactive Games

(253)

198

(55)

Commercial Services

(6)

65

59

Sports Betting

163

160

323

Machine Gaming

452

(152)

300

(923)

3,279

2,356

Service Revenue Change

For the three months ended

March 31,

Change

(€ thousands)

2015

2014

%

Lottery Same Store Revenue

24,891

22,343

2,548

11.4

Gaming & Other

31,814

35,285

(3,471)

(9.8)

Foreign Exchange Impact

3,279

-

3,279

-

Total Service Revenue

59,984

57,628

2,356

4.1

Product Sales Change

For the three months ended March 31, 2015 

compared to March 31, 2014

Constant

Foreign 

(€ thousands)

Currency

Currency

Change

Machine Gaming

(5,191)

129

(5,062)

Sports Betting

(220)

100

(120)

Interactive Games

89

-

89

Lottery

3,242

979

4,221

(2,080)

1,208

(872)

GTECH S.P.A. AND SUBSIDIARIES

ITALY SEGMENT

For the three months ended

March 31,

Change

(€ thousands)

2015

2014

%

Service revenue

Lotto

118,929

103,461

15,468

15.0

Instant tickets 

89,926

96,806

(6,880)

(7.1)

Lottery

208,855

200,267

8,588

4.3

Lotto (€ millions)

Core wagers

1,712.2

1,509.3

202.9

13.4

Wagers for late numbers

104.6

59.5

45.1

75.8

1,816.8

1,568.8

248.0

15.8

Instant Tickets

Total sales (in millions)

€ 2,302.1

€ 2,475.9

(€ 173.8)

(7.0)

Total tickets sold (in millions)

455.7

500.9

(45.2)

(9.0)

Average price point

€ 5.05

€ 4.94

€ 0.11

2.2

Machine Gaming (€ millions)

VLT wagers 

1,372.5

1,497.1

(124.6)

(8.3)

AWP wagers 

1,130.6

1,140.5

(9.9)

(0.9)

Total wagers

2,503.1

2,637.6

(134.5)

(5.1)

(Installed at the end of March)

VLT's installed 

10,938

10,675

263

2.5

AWP machines installed 

63,840

69,385

(5,545)

(8.0)

Total machines installed

74,778

80,060

(5,282)

(6.6)

Sports Betting (€ millions)

Fixed odds sports betting and other wagers

256.5

251.4

5.1

2.0

Interactive Gaming (€ millions)

Interactive gaming wagers

473.7

478.6

(4.9)

(1.0)

GTECH S.P.A. AND SUBSIDIARIES

NET FINANCIAL POSITION

March 31, 

December 31, 

(€ thousands)

2015

2014

Change

Cash at bank

251,064

256,757

(5,693)

Cash on hand

3,556

4,427

(871)

Cash and cash equivalents

254,620

261,184

(6,564)

Current financial receivables

40,496

10,386

30,110

Cash exit rights

378,384

-

378,384

Dividends payable

42,519

129,594

(87,075)

Capital Securities

-

747,585

(747,585)

Other

122,412

193,613

(71,201)

Current financial debt

543,315

1,070,792

(527,477)

Net current financial debt 

248,199

799,222

(551,023)

Revolving Credit Facilities

1,046,555

721,938

324,617

Term Loan

795,332

-

795,332

2010 Notes (due 2018) 

485,916

484,837

1,079

2012 Notes (due 2020) 

473,373

472,229

1,144

Capital Securities

45,320

45,280

40

Other

63,738

61,972

1,766

Non current financial debt

2,910,234

1,786,256

1,123,978

Net financial position

3,158,433

2,585,478

572,955

GTECH S.P.A. AND SUBSIDIARIES

DEBT

March 31,

December 31,

(€ thousands)

2015

2014

Long-term debt, less current portion

Revolving Credit Facilities

1,046,555

721,938

Term Loan

795,332

-

2010 Notes (due 2018)

485,916

484,837

2012 Notes (due 2020)

473,373

472,229

Capital Securities 

45,320

45,280

Other

1,458

1,454

2,847,954

1,725,738

Short-term borrowings

Short-term borrowings

2

8,895

2

8,895

Current portion of long-term debt 

Senior Notes

31,776

-

2010 Notes (due 2018)

5,337

24,549

2012 Notes (due 2020)

1,692

14,408

Revolving Credit Facilities

414

189

Capital Securities 

-

747,585

Other

2,267

147

41,486

786,878

Total debt

2,889,442

2,521,511

GTECH S.P.A. AND SUBSIDIARIES

INTEREST EXPENSE

For the three months ended 

March 31,

(€ thousands)

2015

2014

Senior Notes

(32,305)

-

Bridge facility

(16,690)

-

2010 Notes (due 2018)

(8,793)

(6,932)

Revolving Credit Facilities

(8,732)

-

2012 Notes (due 2020)

(5,980)

(4,633)

Capital Securities

(4,840)

(16,133)

Term Loan

(2,428)

-

2009 Notes (due 2016) 

-

(9,235)

Facilities

-

(2,421)

Other

(1,488)

(1,243)

(81,256)

(40,597)

OPERATING SEGMENT INFORMATION

Third-party revenue

Operating income

For the three months ended March 31,

(€ thousands)

2015

2014

2015

2014

Operating Segments

Italy

430,391

461,121

139,626

157,768

Americas

300,022

244,371

45,991

30,492

International

77,115

75,631

12,542

15,330

807,528

781,123

198,159

203,590

Corporate support

-

-

(34,270)

(9,996)

Purchase accounting

161

130

(14,617)

(12,751)

807,689

781,253

149,272

180,843

Depreciation

Amortization

For the three months ended March 31,

(€ thousands)

2015

2014

2015

2014

Operating Segments

Italy

18,772

20,211

37,257

35,962

Americas

37,893

32,474

1,789

1,456

International

5,200

4,270

212

-

61,865

56,955

39,258

37,418

Corporate support

3,595

3,641

451

97

Purchase accounting

864

1,374

13,914

11,507

66,324

61,970

53,623

49,022

Legacy IGT Second Quarter Fiscal Year 2015 Results

Second quarter results for Legacy IGT (compared to last year's second quarter)

  • Total revenue decreased 22% to $399 million
  • Adjusted earnings per share decreased to $0.09 from $0.20
  • GAAP earnings per share decreased to ($0.05) from $0.10
  • Social gaming revenue increased 17% to $81 million and average bookings per daily active user grew 9% to $0.47
  • Returned $27 million to shareholders in the form of dividends

Consolidated Results

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

%

Change

2015

2014

%

Change

(In millions, except per share amounts)

GAAP Measures

Revenue

$

399.4

$

512.8

-22

%

$

850.0

$

1,054.0

-19

%

Operating income

(7.2)

72.1

-110

%

56.3

175.7

-68

%

Net income (loss)

(13.1)

25.7

-151

%

21.9

105.0

-79

%

Earnings (loss) per share

$

(0.05)

$

0.10

-150

%

$

0.09

$

0.42

-79

%

Net operating cash flows

$

185.6

$

(65.2)

385

%

Non-GAAP Measures (1)

Adjusted operating income

$

47.5

$

107.5

-56

%

$

133.0

$

231.2

-42

%

Adjusted net income

23.4

49.4

-53

%

71.0

112.4

-37

%

Adjusted earnings per share

$

0.09

$

0.20

-55

%

$

0.28

$

0.45

-38

%

Free cash flow (before dividends)

$

135.0

$

(111.4)

221

%

(1) Adjusted operating income, adjusted net income, adjusted earnings per share and free cash flow are non-GAAP financial measures.  Reconciliations between GAAP and non-GAAP measures are provided at the end of this release.

  • Revenue decreased 22% to $399 million in the quarter primarily due to declines in product sales and gaming operations, partially offset by an increase in interactive revenue.
  • Non-GAAP adjusted financial measures for the quarter excluded $24 million in bad debt provision and $19 million in merger-related costs.
  • Operating cash flow for the first six months increased by $251 million, primarily due to the prior year investment of $185 million to extend land-based licensing rights for Wheel of Fortune® and Jeopardy!® through 2024, as well as expand rights to include social gaming and online real-money wagering in the U.S.

Gaming Operations

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

%

 Change

2015

2014

%

Change

(In millions, unless otherwise noted)

Revenue

$

190.7

$

230.4

-17

%

$

401.8

$

453.4

-11

%

Gross profit

116.0

140.4

-17

%

247.3

276.6

-11

%

Gross margin

61

%

61

%

-

 pp

62

%

61

%

1

 pp

Installed base ('000)

43.6

53.4

-18

%

43.6

53.4

-18

%

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

$

47.06

$

47.00

-

%

$

46.62

$

46.11

1

%

  • Revenue decreased 17% to $191 million in the quarter primarily due to installed base declines.
  • Gross margin for the quarter was consistent with prior-year results.
  • Installed base decreased 18% driven largely by declines in International lease units converted to sales in the prior year, as well as declines in North America MegaJackpots®  most significantly in the standalone category.
  • Average revenue per unit per day in the quarter was $47.06, slightly above the prior-year quarter.

Product Sales

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

%

 Change

2015

2014

%

Change

(In millions, unless otherwise noted)

Revenue

$

114.6

$

202.6

-43

%

$

262.5

$

446.2

-41

%

Gross profit

44.2

104.0

-58

%

115.2

230.9

-50

%

Gross margin

39

%

51

%

(12)

pp

44

%

52

%

(8)

pp

Machine units recognized ('000)

5.1

7.9

-35

%

10.9

20.7

-47

%

Machine average sales price ('000)

$

12.0

$

14.7

-18

%

$

13.0

$

13.7

-5

%

  • Revenue decreased 43% to $115 million in the quarter, primarily due to lower new unit sales, as well as lower non-machine sales
  • North America replacement sales increased 400 units to 3,800 units in the quarter compared to 3,400 units in the prior-year quarter primarily due to lease units converted to sales.
  • Gross margin decreased to 39% from 51% primarily due to lower manufacturing productivity and inventory charges associated with reduced volume.
  • Average machine sales price decreased 18% to $12,000 in the quarter primarily due to product mix, mostly due to lower-priced lease units converted to sales.

Interactive

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

%

Change

2015

2014

%

Change

(In millions, unless otherwise noted)

Revenue

$

94.1

$

79.8

18

%

$

185.7

$

154.4

20

%

Social gaming

80.6

68.8

17

%

160.0

133.6

20

%

IGTi

13.5

11.0

23

%

25.7

20.8

24

%

Gross Margin

63

%

61

%

2

 pp

62

%

62

%

-

 pp

DoubleDown average user statistics (1)

DAU (Daily active users) ('000)

1,929

1,775

9

%

1,919

1,745

10

%

MAU (Monthly active users) ('000)

4,734

6,218

-24

%

4,973

6,208

-20

%

Bookings per DAU ($0.00)

$

0.47

$

0.43

9

%

$

0.45

$

0.42

6

%

(1) as a single application with multiple games, active users equal unique users

  • Social gaming revenue increased 17% to $81 million compared to the prior year quarter, driven by increases in both average DAU and bookings per DAU.  Mobile revenue comprised 41% of total bookings in the quarter and increased 52% compared to the prior year quarter.
  • Average DAU were 1.9 million, an increase of 9% over the prior year quarter due to improved content and enhanced player retention and engagement strategies.
  • Average MAU were 4.7 million, a decrease of 24% compared to the prior year quarter, primarily due to increased marketing efforts to procure higher-quality players.
  • Average bookings per DAU in the first quarter were $0.47, an increase of 9% over the same quarter last year.

Operating Expenses

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

%

 Change

2015

2014

%

 Change

(In millions)

Selling, general & administrative

$

101.4

$

116.7

-13

%

$

206.4

$

229.2

-10

%

Bad debt provision

27.1

7.4

266

%

30.5

12.9

136

%

Research & development

59.5

58.5

2

%

116.9

118.8

-2

%

Depreciation & amortization

13.2

16.6

-20

%

26.9

33.2

-19

%

Contingent acquisition-related costs

0.4

3.7

-89

%

2.9

15.0

-81

%

Impairment, restructuring, and merger-related costs

25.0

17.8

*

37.9

17.8

*

Total operating expenses

$

226.6

$

220.7

3

%

$

421.5

$

426.9

-1

%

Adjusted Operating Expenses (1)

$

174.7

$

188.0

-7

%

$

351.1

$

377.4

-7

%

(1) Adjusted operating expenses is a non-GAAP financial measure.  Reconciliations between GAAP and non-GAAP measures are provided at the end of this release.

  • GAAP operating expenses increased 3% to $227 million, primarily due to an increase of $20 million in bad debt provision and an increase of $7 million in impairment, restructuring, and merger-related costs.
  • Adjusted operating expenses decreased 7% to $175 million, in part due to cost savings initiatives resulting from the March 2014 business realignment.

Balance Sheet and Capital Deployment

 (In millions)

March 31, 2015

September 30, 2014

% Change

Cash and equivalents (including restricted amounts)

$

296.7

$

314.4

-6

%

Working capital

669.4

676.3

-1

%

Contractual debt obligations

1,750.0

1,825.0

-4

%

  • Contractual debt obligations totaled $1.75 billion as of March 31, 2015.
  • Outstanding borrowings under the company's revolving credit facility were $450 million as of March 31, 2015.
  • The company returned $27 million to its shareholders in the form of dividends during the quarter.

Other

References to per share amounts in this release are based on diluted shares of common stock, unless otherwise specified.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited and Condensed)

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

2015

2014

(In millions, except per share amounts)

REVENUES

Gaming operations

$

190.7

$

230.4

$

401.8

$

453.4

Product sales

114.6

202.6

262.5

446.2

Interactive

94.1

79.8

185.7

154.4

Total

399.4

512.8

850.0

1,054.0

COSTS AND OPERATING EXPENSES

Cost of gaming operations

74.7

90.0

154.5

176.8

Cost of product sales

70.4

98.6

147.3

215.3

Cost of interactive

34.9

31.4

70.4

59.3

Selling, general and administrative

101.4

116.7

206.4

229.2

Bad debt provision

27.1

7.4

30.5

12.9

Research and development

59.5

58.5

116.9

118.8

Depreciation and amortization

13.2

16.6

26.9

33.2

Contingent acquisition-related costs

0.4

3.7

2.9

15.0

Impairment, restructuring, and merger-related costs

25.0

17.8

37.9

17.8

Total

406.6

440.7

793.7

878.3

OPERATING INCOME (LOSS)

(7.2)

72.1

56.3

175.7

OTHER INCOME (EXPENSE)

Interest income

7.6

10.7

16.9

20.9

Interest expense

(20.1)

(36.9)

(41.3)

(73.3)

Other  

2.5

(3.4)

2.6

(5.3)

Total

(10.0)

(29.6)

(21.8)

(57.7)

INCOME (LOSS) BEFORE TAX

(17.2)

42.5

34.5

118.0

Income tax provision (benefit)

(4.1)

16.8

12.6

13.0

NET INCOME (LOSS)

$

(13.1)

$

25.7

$

21.9

$

105.0

EARNINGS (LOSS) PER SHARE

Basic

$

(0.05)

$

0.10

$

0.09

$

0.42

Diluted

$

(0.05)

$

0.10

$

0.09

$

0.42

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

248.8

247.7

248.2

250.2

Diluted 

250.2

248.6

250.1

251.9

CONSOLIDATED BALANCE SHEET (Unaudited and Condensed)

March 31,

September 30,

2015

2014

(In millions)

ASSETS

Cash and equivalents

$

240.0

$

255.1

Restricted cash and investment securities

56.7

59.3

Jackpot annuity investments 

50.6

53.0

Receivables, net

388.8

530.2

Inventories

86.2

71.4

Other assets and deferred costs

260.3

252.1

Total current assets

1,082.6

1,221.1

Property, plant and equipment, net

391.8

412.7

Jackpot annuity investments 

226.3

236.7

Contracts and notes receivable, net

70.7

115.5

Goodwill and other intangible assets, net

1,505.9

1,542.5

Other assets and deferred costs

461.5

461.0

TOTAL ASSETS

$

3,738.8

$

3,989.5

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$

75.8

$

77.7

Jackpot liabilities, current portion

104.7

117.5

Dividends payable

-

27.2

Other accrued liabilities  

232.7

322.4

Total current liabilities

413.2

544.8

Long-term debt

1,818.8

1,878.6

Jackpot liabilities

251.4

261.6

Other liabilities

109.0

106.9

TOTAL LIABILITIES

2,592.4

2,791.9

TOTAL EQUITY

1,146.4

1,197.6

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

3,738.8

$

3,989.5

CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited and Condensed)

Six Months Ended March 31,

2015

2014

(In millions)

OPERATING

Net income

$

21.9

$

105.0

Adjustments:

Depreciation and amortization

76.9

99.4

Acquisition-related contingent earn-out costs

2.4

6.6

Bad debt provision

30.5

12.9

Other non-cash items

31.8

51.9

Changes in operating assets and liabilities, excluding acquisitions:

Receivables

134.3

15.5

Inventories

(25.6)

13.4

Accounts payable and accrued liabilities

(57.8)

(50.2)

Jackpot liabilities

(29.9)

(32.9)

Income taxes, net of employee stock plans

0.4

(50.4)

Other assets and deferred costs

0.7

(236.4)

Net operating cash flows

185.6

(65.2)

INVESTING

Capital expenditures

(50.6)

(46.2)

Proceeds from assets sold

18.8

7.8

Investment securities, net

-

13.9

Jackpot annuity investments, net

20.1

25.0

Changes in restricted cash

2.4

5.6

Loans receivable, net

-

14.9

Net investing cash flows

(9.3)

21.0

FINANCING

Debt-related proceeds (payments), net

(75.0)

(0.6)

Employee stock plan proceeds

10.5

12.0

Share repurchases, including net shares

(8.3)

(211.3)

Dividends paid

(81.9)

(53.4)

Acquisition-related contingent consideration

(27.9)

(56.1)

Net financing cash flows

(182.6)

(309.4)

FOREIGN EXCHANGE RATES EFFECT ON CASH AND EQUIVALENTS

(8.8)

(3.9)

NET CHANGE IN CASH AND EQUIVALENTS

(15.1)

(357.5)

BEGINNING CASH AND EQUIVALENTS

255.1

713.3

ENDING CASH AND EQUIVALENTS

$

240.0

$

355.8

SUPPLEMENTAL DATA (Unaudited)

REVENUE METRICS

Second Quarter

Six Months

Periods Ended March 31,

2015

2014

2015

2014

(In millions, unless otherwise noted)

GAMING OPERATIONS

Revenues

$

190.7

$

230.4

$

401.8

$

453.4

North America

169.7

200.1

357.7

391.7

International

21.0

30.3

44.1

61.7

Gross margin

61

%

61

%

62

%

61

%

North America

60

%

58

%

61

%

59

%

International

69

%

78

%

68

%

75

%

Installed base (units '000)

43.6

53.4

43.6

53.4

North America

34.8

40.4

34.8

40.4

International

8.8

13.0

8.8

13.0

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

$

47.06

$

47.00

$

46.62

$

46.11

PRODUCT SALES

Revenues

$

114.6

$

202.6

$

262.5

$

446.2

North America

77.5

143.8

171.6

313.8

International

37.1

58.8

90.9

132.4

Machines

$

61.3

$

116.0

$

141.3

$

282.9

North America

42.6

79.1

94.3

197.2

International

18.7

36.9

47.0

85.7

Non-machine

$

53.3

$

86.6

$

121.2

$

163.3

North America

34.9

64.7

77.3

116.6

International

18.4

21.9

43.9

46.7

Gross margin

39

%

51

%

44

%

52

%

North America

43

%

56

%

47

%

54

%

International

30

%

40

%

39

%

46

%

Machine units recognized ('000)

5.1

7.9

10.9

20.7

North America

4.0

5.7

7.9

15.3

International

1.1

2.2

3.0

5.4

Machine units shipped ('000) [includes units where revenues deferred]

5.1

7.6

11.0

20.6

North America

4.0

5.5

8.2

15.3

New

0.2

2.1

0.9

5.8

Replacement

3.8

3.4

7.3

9.5

International

1.1

2.1

2.8

5.3

New

0.3

0.6

0.8

1.2

Replacement

0.8

1.5

2.0

4.1

Machine ASP ('000)

$

12.0

$

14.7

$

13.0

$

13.7

North America

10.6

13.9

12.0

12.9

International

17.1

16.6

15.8

15.9

INTERACTIVE

Revenues

$

94.1

$

79.8

$

185.7

$

154.4

North America

82.9

70.3

164.4

136.1

International

11.2

9.5

21.3

18.3

Social Gaming

80.6

68.8

160.0

133.6

North America

80.6

68.8

160.0

133.6

IGTi

13.5

11.0

25.7

20.8

North America

2.3

1.5

4.4

2.5

International

11.2

9.5

21.3

18.3

Gross margin

63

%

61

%

62

%

62

%

North America

62

%

62

%

62

%

62

%

International

67

%

51

%

66

%

58

%

DoubleDown average user statistics [as a single application with multiple games, active users equal unique users]

DAU (daily active users) ('000)

1,929

1,775

1,919

1,745

MAU (monthly active users) ('000)

4,734

6,218

4,973

6,208

Bookings per DAU ($0.00)

$

0.47

$

0.43

$

0.45

$

0.42

Reconciliations of GAAP to Non-GAAP Adjusted Financial Measures

(in millions, except EPS)

Second Quarter Ended March 31, 2015

Cost of

Gaming

Operations

Cost of

Product

Sales

Cost of

Interactive

Operating

Expenses

Operating

Income

(loss)

Net

Earnings

(loss) (a)

Diluted

EPS

GAAP measures

$

74.7

$

70.4

$

34.9

$

226.6

$

(7.2)

$

(13.1)

$

(0.05)

% of revenue

57

%

-2

%

Acquisition-related charges: (b)

Contingent retention & earn-out

-

-

-

(0.4)

0.4

0.2

-

Amortization of intangibles

-

(0.1)

(2.4)

(2.2)

4.7

3.2

0.01

Bad debt provision

-

-

-

(24.3)

24.3

16.2

0.06

Alabama note impairment

-

-

-

(6.1)

6.1

4.1

0.02

Merger-related costs

-

-

-

(18.9)

18.9

12.6

0.05

Severance

(0.3)

-

-

-

0.3

0.2

-

Total non-GAAP adjustments

(0.3)

(0.1)

(2.4)

(51.9)

54.7

36.5

0.14

Adjusted measures

$

74.4

$

70.3

$

32.5

$

174.7

$

47.5

$

23.4

$

0.09

% of revenue

44

%

12

%

(a)    Adjustments tax effected at 33%;  (b) Primarily DoubleDown

Second Quarter Ended March 31, 2014

Cost of

Gaming

Operations

Cost of

Product

Sales

Cost of

Interactive

Operating

Expenses

Operating

Income

Net

Earnings

(a)

Diluted

EPS

GAAP measures

$

90.0

$

98.6

$

31.4

$

220.7

$

72.1

$

25.7

$

0.10

% of revenue

43

%

14

%

Acquisition-related charges: (b)

Contingent retention & earn-out

-

-

-

(3.7)

3.7

2.5

0.01

Amortization of intangibles

-

-

(2.7)

(3.4)

6.1

4.1

0.02

Business realignment

-

-

-

(16.5)

16.5

11.0

0.05

Alabama note impairment

-

-

-

(1.3)

1.3

0.9

-

Legal settlement/accrual

-

-

-

(7.8)

7.8

5.2

0.02

Total non-GAAP adjustments

-

-

(2.7)

(32.7)

35.4

23.7

0.10

Adjusted measures

$

90.0

$

98.6

$

28.7

$

188.0

$

107.5

$

49.4

$

0.20

% of revenue

37

%

21

%

(a)    Adjustments tax effected at 33%;  (b) Primarily DoubleDown

Six Months Ended March 31, 2015

Cost of

Gaming

Operations

Cost of

Product

Sales

Cost of

Interactive

Operating

Expenses

Operating

Income

Net

Earnings

(a)

Diluted

EPS

GAAP measures

$

154.5

$

147.3

$

70.4

$

421.5

$

56.3

$

21.9

$

0.09

% of revenue

50

%

7

%

Acquisition-related charges: (b)

Contingent retention & earn-out

-

-

-

(2.9)

2.9

1.9

0.01

Amortization of intangibles

-

(0.2)

(4.9)

(4.4)

9.5

6.3

0.02

Bad debt provision

-

-

-

(24.3)

24.3

16.2

0.06

Alabama note impairment

-

-

-

(5.1)

5.1

3.4

0.01

Merger-related costs

-

-

-

(32.8)

32.8

21.8

0.09

Severance

(1.2)

-

-

(0.9)

2.1

1.4

0.01

Certain discrete tax items (benefits)

-

-

-

-

-

(1.9)

(0.01)

Total non-GAAP adjustments

(1.2)

(0.2)

(4.9)

(70.4)

76.7

49.1

0.19

Adjusted measures

$

153.3

$

147.1

$

65.5

$

351.1

$

133.0

$

71.0

$

0.28

% of revenue

41

%

16

%

(a)    Adjustments tax effected at 33%;  (b) Primarily DoubleDown

Six Months Ended March 31, 2014

Cost of

Gaming

Operations

Cost of

Product

Sales

Cost of

Interactive

Operating

Expenses

Operating

Income

Net

Earnings

(a)

Diluted

EPS

GAAP measures

$

176.8

$

215.3

$

59.3

$

426.9

$

175.7

$

105.0

$

0.42

% of revenue

41

%

17

%

Acquisition-related charges: (b)

Contingent retention & earn-out

-

-

-

(15.0)

15.0

10.0

0.04

Amortization of intangibles

-

-

(5.4)

(6.8)

12.2

8.1

0.03

Business realignment

-

-

-

(16.5)

16.5

11.0

0.05

Alabama note impairment

-

-

-

(1.3)

1.3

0.9

-

Legal settlement/accrual

-

-

-

(7.8)

7.8

5.2

0.02

Severance

(0.6)

-

-

(2.1)

2.7

1.8

0.01

Certain discrete tax items (benefits)

-

-

-

-

-

(29.6)

(0.12)

Total non-GAAP adjustments

(0.6)

-

(5.4)

(49.5)

55.5

7.4

0.03

Adjusted measures

$

176.2

$

215.3

$

53.9

$

377.4

$

231.2

$

112.4

$

0.45

% of revenue

36

%

22

%

(a)    Adjustments tax effected at 33%;  (b) Primarily DoubleDown

Second Quarter

Six Months

Adjusted EBITDA For The Second Quarters Ended March 31,

2015

2014

2015

2014

GAAP Net income (loss)

$

(13.1)

$

25.7

$

21.9

$

105.0

Other (income) expense, net

10.0

29.6

21.8

57.7

Income tax provision (benefit)

(4.1)

16.8

12.6

13.0

Depreciation and amortization

38.6

48.1

76.9

99.4

Other charges:

Share-based compensation 

6.0

7.6

14.7

16.5

Contingent acquisition-related costs

0.4

3.7

2.9

15.0

Impairment, restructuring, and merger-related costs

25.0

17.8

37.9

17.8

Adjusted EBITDA 

$

62.8

$

149.3

$

188.7

$

324.4

Free Cash Flow For The Six Months Ended March 31,

2015

2014

GAAP net operating cash flows

$

185.6

$

(65.2)

Investment in property, plant and equipment

(15.2)

(11.8)

Investment in gaming operations equipment

(35.3)

(31.6)

Investment in intellectual property

(0.1)

(2.8)

Free Cash Flow (before dividends)

135.0

(111.4)

Dividends paid

(81.9)

(53.4)

Free Cash Flow (after dividends)

$

53.1

$

(164.8)

Non-GAAP Financial Information

 

Legacy IGT believed that certain non-GAAP financial measures, when presented in conjunction with comparable GAAP measures, were useful because that information was an appropriate measure for evaluating its operating performance. Non-GAAP information was used to evaluate business performance and management's effectiveness. These measures should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures may not be calculated in the same manner by all companies and therefore may not be comparable.

 

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SOURCE International Game Technology PLC



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