Saturday, November 2, 2024

INTERNATIONAL GAME TECHNOLOGY PLC REPORTS SECOND QUARTER 2024 RESULTS

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  • Achieved record H1’24 Operating income and Adjusted EBITDA excluding Separation and divestiture costs
  • Delivered Q2’24 revenue of $1.05 billion and Operating income of $230 million, in line with outlook; Adjusted EBITDA was $420 million
  • Best-in-class technology and solutions bolster Global Lottery portfolio while advancing key strategic initiatives; compelling games driving Gaming & Digital performance
  • Generated over $460 million in cash from operations and over $260 million in free cash flow in the first half of the year

LONDON, July 30, 2024 /PRNewswire/ — International Game Technology PLC (“IGT”) (NYSE:IGT) today reported financial results for the second quarter ended June 30, 2024. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

“IGT delivered strong first half results, including record operating income and Adjusted EBITDA net of Separation and divestiture costs,” said Vince Sadusky, CEO of IGT. “Consistent investments in technology, game content, and other innovative solutions provide us a solid foundation to build from as we execute on our growth objectives. The recently announced sale of our Gaming & Digital business for $4.05 billion in cash is an important step in unlocking the intrinsic value of IGT’s best-in-class businesses.”

“We generated over $460 million in cash from operations in the first half of the year and our balance sheet is as strong as ever,” said Max Chiara, CFO of IGT. “Our ample liquidity and manageable near-term debt maturities provide us significant flexibility in light of upcoming investments to extend and secure our long-term lottery contract portfolio for the coming years.”

Overview of Consolidated Second Quarter 2024 Results


Quarter Ended

Y/Y
Change

Constant
Currency
Change


June 30,


2024


2023

($ in millions)






GAAP Financials:






Revenue






Global Lottery

613


624

(2) %

(2) %

Gaming & Digital

436


432

1 %

1 %

Total revenue

1,049


1,055

(1) %

— %







Operating income (loss)






Global Lottery

212


229

(8) %

(7) %

Gaming & Digital

103


89

16 %

16 %

Corporate support expense

(51)


(30)

(67) %

(68) %

Other(1)

(35)


(38)

8 %

8 %

Total operating income

230


251

(8) %

(8) %

Operating income margin

21.9 %


23.8 %









Operating income excluding Separation and divestiture costs

256


254

1 %

1 %

Operating income margin excluding Separation and divestiture costs

24.4 %


24.0 %









Earnings per share – diluted

$0.20


$0.23

(10) %








Net cash provided by operating activities

343


34

NM








Cash and cash equivalents

438


461

(5) %








Non-GAAP Financial Measures:






Adjusted EBITDA






Global Lottery

311


332

(6) %

(6) %

Gaming & Digital

151


133

13 %

14 %

Corporate support expense

(43)


(22)

(94) %

(95) %

Total Adjusted EBITDA

420


443

(5) %

(5) %

Adjusted EBITDA margin

40.0 %


42.0 %









Adjusted EBITDA excluding Separation and divestiture costs

446


446

— %

— %

Adjusted EBITDA margin excluding Separation and divestiture costs

42.5 %


42.2 %









Adjusted earnings per share – diluted

$0.36


$0.45

(20) %








Free cash flow

235


(72)

NA








Net debt

5,109


5,355

(5) %








(1) Primarily includes purchase price amortization


Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release

Key Highlights:

  • Recently awarded seven-year facilities management contract with the Colorado Lottery and three-year contract extension with the Mississippi Lottery Corporation
  • Signed five-year iLottery content contract with Atlantic Lottery Corporation and launched iLottery in Connecticut
  • Continued success in securing instant ticket contract wins and extensions including a five-year agreement with ONCE in Spain and three-year extension in Mississippi
  • Launched Tiger and Dragon on the PeakCurve49 cabinet, which ranks as the #1 new premium leased & WAP game in industry performance reports; introduced Whitney Houston on the new SkyRise™ cabinet
  • Recently launched award-winning Prosperity Link™ game in digital format in U.S.
  • Continued international progress including deployment of Diamond Mania MLP in Spain AWP market, Holland Casino purchase of 500 PeakBar Top™ Video Poker cabinets, and expansion of HHR footprint to Malta
  • Recently published 17th annual Sustainability Report, highlighting Environmental, Social, and Governance accomplishments
  • Won “Diversity and Inclusion” category at 2024 Women in Gaming Diversity Awards and recognized as “Best Place to Work for Disability Inclusion”

Financial Highlights:
Consolidated revenue of $1.05 billion, in line with the prior-year period, as strength in Gaming & Digital is offset by elevated prior year product sales in Global Lottery

  • Global Lottery revenue of $613 million decreased 2% year-over-year, primarily due to a multi-year software license sale in the prior year
  • Gaming & Digital revenue of $436 million, up 1% versus the prior year, driven by installed base growth with resilient yields and elevated intellectual property and software license sales, offset by lower terminal unit shipments

Operating income of $230 million, compared to $251 million in the prior-year period; excluding $26 million in Separation and divestiture costs, operating income rose to $256 million

  • Global Lottery operating income of $212 million versus $229 million in the prior year, primarily due to a multi-year software license sale and resolution of a customer contract dispute in the prior-year period
  • Gaming & Digital operating income of $103 million compared to $89 million in the prior-year period on high-margin intellectual property and software sales and easing of supply chain costs, partially offset by lower terminal sales; operating income margin expands 300 basis points to 23.7%
  • Corporate support and other expense of $86 million versus $68 million driven by $26 million in Separation and divestiture costs

Adjusted EBITDA of $420 million compared to $443 million in the prior-year period; excluding Separation and divestiture costs, Adjusted EBITDA was stable at $446 million and Adjusted EBITDA margin expanded 30 basis points

Net interest expense of $73 million compared to $71 million in the prior year

No foreign exchange gain or loss, compared to a $5 million loss in the prior year, primarily due to non-cash impact of fluctuations in the EUR/USD exchange rate on debt and reduced losses related to the devaluation of the Argentine peso

Other non-operating expense, net, of $1 million versus other non-operating income, net, of $2 million in the prior year

Income tax provision of $71 million, compared to $86 million in the prior year, primarily driven by lower valuation allowances on deferred tax assets and lower pre-tax income

Net income of $85 million versus $90 million in the prior-year period

Diluted earnings per share of $0.20 versus $0.23 in the prior year; Adjusted diluted earnings per share of $0.36 compared to $0.45 in the prior year primarily driven by lower net income, coupled with reduced foreign currency and discrete tax items

Net debt of $5.1 billion compared to $5.1 billion at December 31, 2023; Net debt leverage of 2.9x consistent with the December 31, 2023 level

Cash and Liquidity Update
Total liquidity of $1.7 billion as of June 30, 2024; $0.4 billion in unrestricted cash and $1.3 billion in additional borrowing capacity from undrawn credit facilities

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

  • Record date of August 13, 2024
  • Payment date of August 27, 2024

As announced on July 26, 2024, the Company entered into a definitive agreement to sell its Gaming & Digital business to funds managed by affiliates of Apollo for $4.05 billion in gross cash proceeds. The transaction is expected to be completed by the end of the third quarter of 2025.

Withdrawing Full Year 2024 Outlook
Due to the planned sale of the Gaming & Digital business, the Company expects to classify and report Gaming & Digital results as discontinued operations beginning in the third quarter of 2024. As a result, the Company is withdrawing its previously provided full year financial outlook. The Company expects to provide an outlook for full year 2024 continuing operations once the preparation of the discontinued operations reporting is complete.

Earnings Conference Call and Webcast
July 30, 2024, at 8:00 a.m. EDT 

To register to participate in the conference call, or to listen to the live audio webcast, please visit the “Events Calendar” on IGT’s Investor Relations website at www.IGT.com. A replay will be available on the website following the live event.

Comparability of Results
All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2024 are calculated using the same foreign exchange rates as the corresponding 2023 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with U.S. GAAP. Amounts reported in millions are computed based on amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.

About IGT
IGT (NYSE:IGT) is a global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Lotteries and Gaming Machines to Sports Betting and Digital. Leveraging a wealth of compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, our solutions deliver unrivaled gaming experiences that engage players and drive growth. We have a well-established local presence and relationships with governments and regulators in more than 100 jurisdictions around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 11,000 employees. For more information, please visit www.IGT.com.

Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the “Company”) and other matters, including with respect to the proposed sale of the Gaming & Digital business to the Apollo Funds. These statements may discuss goals, intentions, and expectations as to future plans and strategies, transactions, including the divestiture of Gaming & Digital, trends, events, dividends, results of operations, and/or financial condition or measures, including our expectations on the future release of revenue, operating income, cash, and capital expenditures guidance, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall,” “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “outlook,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company’s annual report on Form 20-F for the financial year ended December 31, 2023 and other documents filed or furnished from time to time with the SEC, which are available on the SEC’s website at www.sec.gov and on the investor relations section of the Company’s website at www.IGT.com. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. You should carefully consider these factors and other risks and uncertainties that may affect the Company’s business, including management’s discussion and analysis of potential or actual impacts to operations and financial performance. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that the financial performance of International Game Technology PLC for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.

Non-GAAP Financial Measures
Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional useful information, but it is not intended to nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Adjusted EBITDA represents net income (loss) (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other non-operating expenses (e.g., DDI/Benson Matter provision, gains/losses on extinguishment and modifications of debt, etc.), net, depreciation, impairment losses, amortization (service revenue, purchase accounting, and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue, purchase accounting, and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Management believes that Adjusted EBITDA is useful in providing period-to-period comparisons of the results of the Company’s ongoing operational performance.

Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue

Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding the effects of foreign exchange, impairments, amortization from purchase accounting, discrete tax items, and other significant non-recurring adjustments that are not reflective of on-going operational activities (e.g., gains/losses on sale of business, gains/losses on extinguishment and modifications of debt, etc.). Adjusted EPS is calculated using diluted weighted-average number of shares outstanding, including the impact of any potentially dilutive common stock equivalents that are anti-dilutive to GAAP net income (loss) per share but dilutive to Adjusted EPS. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of the Company’s ongoing operational performance.

Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash equivalents, including cash and cash equivalents classified as held for sale. Cash and cash equivalents, including cash and cash equivalents held for sale, are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet.

Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months (“LTM”) prior to such date. Management believes that Net debt leverage is a useful measure to assess IGT’s financial strength and ability to incur incremental indebtedness when making key investment decisions.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures (a component of investing cash flows) and payments on license obligations (a component of financing cash flows). Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing IGT’s ability to fund its activities, including debt service and distribution of earnings to shareholders.

Constant currency is a non-GAAP financial measure that expresses current financial data using the prior-year/period exchange rate (i.e., the exchange rate used in preparing the financial statements for the prior year). Management believes that constant currency is a useful measure to compare period-to-period results without regard to the impact of fluctuating foreign currency exchange rates.

A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this release. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

Contact:
Phil O’Shaughnessy, Global Communications, toll free in U.S./Canada +1 (844) IGT-7452; outside U.S./Canada +1 (401) 392-7452
Francesco Luti, +39 06 5189 9184; for Italian media inquiries
James Hurley, Investor Relations, +1 (401) 392-7190 

Select Performance and KPI data: ($ in millions, unless otherwise noted)










Constant



Sequential



Q2’24


Q2’23




Currency



Change as

GLOBAL LOTTERY




Y/Y Change


Change(1)


Q1’24

Reported

Revenue












Service












Operating and facilities management contracts


620


623


(1) %


— %


653

(5) %

Upfront license fee amortization


(47)


(47)


1 %


— %


(47)

1 %

Operating and facilities management contracts, net


573


576


(1) %


— %


605

(5) %

Other


13


13


7 %


11 %


13

— %

Total service revenue


586


588


— %


— %


619

(5) %













Product sales


27


35


(25) %


(25) %


42

(37) %

Total revenue


613


624


(2) %


(2) %


661

(7) %













Operating income


212


229


(8) %


(7) %


258

(18) %

Adjusted EBITDA(1)


311


332


(6) %


(6) %


355

(12) %













Global same-store sales growth (%)












Instant ticket & draw games


(0.5 %)


2.3 %






(0.2 %)


Multi-jurisdiction jackpots


20.2 %


(5.3 %)






(1.0 %)


Total


0.9 %


1.8 %






(0.3 %)














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












Instant ticket & draw games


(1.4 %)


0.8 %






(1.6 %)


Multi-jurisdiction jackpots


20.2 %


(5.3 %)






(1.0 %)


Total


0.6 %


0.2 %






(1.5 %)














Italy same-store sales growth (%)












Instant ticket & draw games


2.3 %


8.0 %






4.4 %














(1) Non-GAAP measure; see disclaimer on page 5 and reconciliations to the most directly comparable GAAP measure in Appendix for further details


































Constant



Sequential



Q2’24


Q2’23




Currency



Change as

GAMING & DIGITAL




Y/Y Change


Change(1)


Q1’24

Reported

Revenue












Service












Terminal


133


128


4 %


4 %


131

1 %

 iGaming


45


48


(7) %


(6) %


48

(6) %

Systems, software, and other


73


71


3 %


3 %


75

(3) %

Total service revenue


250


247


2 %


2 %


253

(1) %













Product sales












Terminal


120


139


(14) %


(14) %


110

9 %

Systems, software, and other


66


45


45 %


46 %


43

54 %

Total product sales revenue


186


185


1 %


1 %


153

21 %

Total revenue


436


432


1 %


1 %


406

7 %













Operating income


103


89


16 %


16 %


81

28 %

Adjusted EBITDA(1)


151


133


13 %


14 %


127

19 %













Installed base units












Casino


53,588


51,304


4 %




53,368


Casino – L/T lease(2)


697


851


(18) %




701


Total installed base units


54,285


52,155


4 %




54,069














Installed base units (by geography)












US & Canada


34,320


33,554


2 %




34,146


Rest of world


19,965


18,601


7 %




19,923


Total installed base units


54,285


52,155


4 %




54,069














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












US & Canada


$42.01


$41.89


— %




$41.17


Rest of world


$7.45


$7.44


— %




$7.13


Total yields


$29.14


$29.56


(1) %




$28.51














Global machine units sold












New/expansion


1,060


1,061


— %




203


Replacement


6,570


7,208


(9) %




6,424


Total machine units sold


7,630


8,269


(8) %




6,627














US & Canada machine units sold












New/expansion


696


1,046


(33) %




46


Replacement


4,436


5,278


(16) %




5,014


Total machine units sold


5,132


6,324


(19) %




5,060














(1) Non-GAAP measures; see disclaimer on page 5 and reconciliations to the most directly comparable GAAP measure in Appendix for further details


(2) Excluded from yield calculations due to treatment as sales-type leases




(3) Excludes Casino L/T lease units due to treatment as sales-type leases























Constant



Sequential



Q2’24


Q2’23




Currency



Change as

GAMING & DIGITAL (Continued)




Y/Y Change


Change(1)


Q1’24

Reported

Rest of world machine units sold












New/expansion


364


15


NM




157


Replacement


2,134


1,930


11 %




1,410


Total machine units sold


2,498


1,945


28 %




1,567














Average Selling Price (ASP), in absolute $












US & Canada


$16,400


$16,700


(2) %




$16,900


Rest of world


$13,500


$16,000


(16) %




$14,800


Total ASP


$15,400


$16,500


(7) %




$16,400


































Constant



Sequential



Q2’24


Q2’23




Currency



Change as

CONSOLIDATED




Y/Y Change


Change(1)


Q1’24

Reported

Revenue (by geography)












US & Canada


661


650


2 %


2 %


660

— %

Italy


237


240


(1) %


(1) %


258

(8) %

Rest of world


151


164


(8) %


(8) %


150

1 %

Total revenue


1,049


1,055


(1) %


— %


1,067

(2) %

























(1) Non-GAAP measure; see disclaimer on page 5 and reconciliations to the most directly comparable GAAP measure in Appendix for further details














International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited










For the three months ended


For the six months ended


June 30,


June 30,


2024


2023


2024


2023

Service revenue

837


835


1,709


1,681

Product sales

213


220


408


435

Total revenue

1,049


1,055


2,117


2,116









Cost of services

411


402


823


800

Cost of product sales

130


131


248


258

Selling, general and administrative

199


208


407


425

Research and development

53


60


108


122

Separation and divestiture costs

26


3


44


3

Total operating expenses

819


805


1,631


1,610









Operating income

230


251


486


506









Interest expense, net

73


71


145


141

Foreign exchange loss (gain), net


5


(15)


32

Other non-operating expense (income), net

1


(2)


3


2

Total non-operating expenses

74


75


132


176

Income before provision for income taxes

156


176


353


330

Provision for income taxes

71


86


141


173

Net income

85


90


213


157

Less: Net income attributable to non-controlling interests

43


44


89


88

Net income attributable to IGT PLC

42


46


123


69









Net income attributable to IGT PLC per common share – basic

0.21


0.23


0.61


0.35

Net income attributable to IGT PLC per common share – diluted

0.20


0.23


0.61


0.34

Weighted-average shares – basic

201


200


201


200

Weighted-average shares – diluted

203


203


203


202

International Game Technology PLC

Consolidated Balance Sheets

($ in millions)

Unaudited








June 30,


December 31,



2024


2023

Assets





Current assets:





Cash and cash equivalents


438


572

Restricted cash and cash equivalents


121


167

Trade and other receivables, net


651


685

Inventories, net


310


317

Other current assets


443


382

Total current assets


1,963


2,123

Systems, equipment and other assets related to contracts, net


895


928

Property, plant and equipment, net


120


119

Operating lease right-of-use assets


216


230

Goodwill


4,485


4,507

Intangible assets, net


1,492


1,555

Other non-current assets


871


1,004

Total non-current assets


8,080


8,342

Total assets


10,042


10,465






Liabilities and shareholders’ equity





Current liabilities:





Accounts payable


695


797

Current portion of long-term debt


713


Short-term borrowings



16

Other current liabilities


923


879

Total current liabilities


2,331


1,691

Long-term debt, less current portion


4,833


5,655

Deferred income taxes


349


344

Operating lease liabilities


199


214

Other non-current liabilities


453


609

Total non-current liabilities


5,835


6,821

Total liabilities


8,166


8,513

Commitments and contingencies





IGT PLC’s shareholders’ equity


1,503


1,443

Non-controlling interests


374


510

Shareholders’ equity


1,877


1,952

Total liabilities and shareholders’ equity


10,042


10,465

International Game Technology PLC

Consolidated Statements of Cash Flows

($ in millions)

Unaudited


For the three months ended


For the six months ended


June 30,


June 30,


2024


2023


2024


2023

Cash flows from operating activities








Net income

85


90


213


157

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








Depreciation

73


74


144


151

Amortization

56


54


111


110

Amortization of upfront license fees

50


50


100


100

Deferred income taxes

13


28


12


55

Stock-based compensation

11


12


22


23

Foreign exchange loss (gain), net


5


(15)


32

Other non-cash items, net


3


3


9

Changes in operating assets and liabilities:








Trade and other receivables

67


39


24


6

Inventories

14


(25)


7


(63)

Accounts payable

(26)


(118)


(71)


(7)

DDI / Benson Matter provision


(220)



(220)

Accrued interest payable

13


15


(13)


(4)

Accrued income taxes

(1)


23


3


64

Other assets and liabilities

(11)


3


(75)


(68)

Net cash provided by operating activities

343


34


463


345









Cash flows from investing activities








Capital expenditures

(101)


(99)


(185)


(193)

Other

4



5


3

Net cash used in investing activities

(97)


(99)


(180)


(190)









Cash flows from financing activities








Payments on license obligations

(7)


(7)


(14)


(8)

Net (payments of) proceeds from short-term borrowings

(6)


(53)


(16)


Net payments on financial liabilities

(1)


(14)


(64)


(6)

Principal payments on long-term debt




(462)

Net proceeds from (repayments of) Revolving Credit Facilities

35


81


(37)


473

Dividends paid

(80)


(40)


(80)


(80)

Dividends paid – non-controlling interests

(61)


(61)


(162)


(152)

Return of capital – non-controlling interests

(35)


(36)


(45)


(46)

Other

(15)


(12)


(14)


(23)

Net cash used in financing activities

(170)


(141)


(433)


(303)









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

76


(206)


(149)


(149)

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

(14)


(1)


(31)


7

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

496


805


739


740

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

558


599


558


599









Supplemental Cash Flow Information








Interest paid

62


58


162


148

Income taxes paid

59


35


126


54

International Game Technology PLC

Net Debt

($ in millions)

Unaudited






June 30,


December 31,


2024


2023

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


499

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

747


747

3.500% Senior Secured Euro Notes due June 2026

801


826

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

747


747

2.375% Senior Secured Euro Notes due April 2028

533


550

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

746


745

Senior Secured Notes

3,574


4,113





Euro Term Loan Facilities due January 2027

636


876

Revolving Credit Facility A due July 2027

233


207

Revolving Credit Facility B due July 2027

391


458

Long-term debt, less current portion

4,833


5,655





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

499


Euro Term Loan Facilities due January 2027

214


Current portion of long-term debt

713






Short-term borrowings


16

Total debt

5,547


5,671





Less: Cash and cash equivalents

438


572

Net debt

5,109


5,099









Note: Net debt is a non-GAAP financial measure




International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited














For the three months ended June 30, 2024







Business







Global


Gaming &


Segments


Corporate


Total



Lottery


Digital


Total


and Other


IGT PLC

Net income










85

Provision for income taxes










71

Interest expense, net










73

Other non-operating expense, net










1

Operating income (loss)


212


103


315


(86)


230

Depreciation


43


31


74



73

Amortization – service revenue (1)


49



50



50

Amortization – non-purchase accounting


5


16


20


1


21

Amortization – purchase accounting





35


35

Stock-based compensation


2


1


3


7


11

Adjusted EBITDA


311


151


463


(43)


420












Cash flows from operating activities










343

Capital expenditures










(101)

Payments on license obligations










(7)

Free Cash Flow










235


















Pre-Tax
Impact


Tax Impact (2)(3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted






0.20

Adjustments:











Foreign exchange loss, net






(0.01)


0.01


(0.02)

Currency conversion impacts of hyper-inflationary economies




0.01



0.01

Amortization – purchase accounting






0.17


0.04


0.13

Discrete tax items







(0.03)


0.03

Net adjustments










0.16

Adjusted EPS attributable to IGT PLC – diluted (4)





0.36












(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 45.7%. Adjusted for the above items, the effective tax rate was 38.8%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 203 million, which includes the dilutive impact of share-based payment awards

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited














For the three months ended June 30, 2023







Business







Global


Gaming &


Segments


Corporate


Total



Lottery


Digital


Total


and Other


IGT PLC

Net income










90

Provision for income taxes










86

Interest expense, net










71

Foreign exchange loss, net










5

Other non-operating income, net










(2)

Operating income (loss)


229


89


319


(68)


251

Depreciation


44


31


75


(1)


74

Amortization – service revenue (1)


50



50



50

Amortization – non-purchase accounting


5


11


16


1


17

Amortization – purchase accounting





38


38

Stock-based compensation


2


2


4


8


12

Adjusted EBITDA


332


133


465


(22)


443























Cash flows from operating activities










34

Capital expenditures










(99)

Payments on license obligations










(7)

Free Cash Flow










(72)












Payments on DDI / Benson Matter, net of cash tax benefit ($12 million)








208

Adjusted Free Cash Flow










136


















Pre-Tax
Impact


Tax Impact (2) (3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted





0.23

Adjustments:











Foreign exchange loss, net








Currency conversion impacts of hyper-inflationary economies




0.02



0.02

Amortization – purchase accounting






0.19


0.05


0.14

Discrete tax items







(0.05)


0.05

Other (non-recurring adjustments)






0.01



0.01

Net adjustments










0.22

Adjusted EPS attributable to IGT PLC – diluted (4)





0.45












(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 48.9%. Adjusted for the above items, the effective tax rate was 38.8%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 203 million, which includes the dilutive impact of share-based payment awards

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited














For the six months ended June 30, 2024







Business







Global


Gaming &


Segments


Corporate


Total



Lottery


Digital


Total


and Other


IGT PLC

Net income










213

Provision for income taxes










141

Interest expense, net










145

Foreign exchange gain, net










(15)

Other non-operating expense, net










3

Operating income (loss)


470


184


654


(168)


486

Depreciation


83


61


145


(1)


144

Amortization – service revenue (1)


99


1


100



100

Amortization – non-purchase accounting


10


30


39


2


41

Amortization – purchase accounting





70


70

Stock-based compensation


5


3


7


15


22

Adjusted EBITDA


667


278


945


(82)


863























Cash flows from operating activities










463

Capital expenditures










(185)

Payments on license obligations










(14)

Free Cash Flow










264


















Pre-Tax
Impact


Tax Impact (2) (3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted





0.61

Adjustments:











Foreign exchange gain, net






(0.10)


0.03


(0.13)

Currency conversion impacts of hyper-inflationary






0.02



0.02

Amortization – purchase accounting






0.34


0.08


0.26

Discrete tax items







(0.06)


0.06

Net adjustments










0.22

Adjusted EPS attributable to IGT PLC – diluted (4)





0.82












(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 39.8%. Adjusted for the above items, the effective tax rate was 37.1%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 203 million, which includes the dilutive impact of share-based payment awards

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions, except per share amounts)

Unaudited














For the six months ended June 30, 2023







Business







Global


Gaming &


Segments


Corporate


Total



Lottery


Digital


Total


and Other


IGT PLC

Net income










157

Provision for income taxes










173

Interest expense, net










141

Foreign exchange loss, net










32

Other non-operating expense, net










2

Operating income (loss)


469


173


642


(136)


506

Depreciation


87


64


150


1


151

Amortization – service revenue (1)


99



100



100

Amortization – non-purchase accounting


10


21


31


2


32

Amortization – purchase accounting





77


77

Stock-based compensation


4


4


8


14


23

Adjusted EBITDA


671


262


933


(41)


891























Cash flows from operating activities










345

Capital expenditures










(193)

Payments on license obligations










(8)

Free Cash Flow










143












Payments on DDI / Benson Matter, net of cash tax benefit ($12 million)








208

Adjusted Free Cash Flow










351


















Pre-Tax
Impact


Tax Impact (2) (3)


Net
Impact

Reported EPS attributable to IGT PLC – diluted





0.34

Adjustments:











Foreign exchange loss, net






0.12


(0.02)


0.14

Currency conversion impacts of hyper-inflationary






0.04



0.04

Amortization – purchase accounting






0.38


0.09


0.29

Loss on extinguishment and modifications of debt, net




0.02



0.02

Discrete tax items







(0.10)


0.10

Other (non-recurring adjustments)






0.01



0.01

Net adjustments










0.60

Adjusted EPS attributable to IGT PLC – diluted (4)





0.94












(1) Includes amortization of upfront license fees

(2) Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction

(3) The reported effective tax rate was 52.5%. Adjusted for the above items, the effective tax rate was 37.5%

(4) Adjusted EPS was calculated using weighted average shares outstanding of 202 million, which includes the dilutive impact of share-based payment awards

SOURCE International Game Technology PLC

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