PR Newswire | Mar 2, 2021 06:45AM EST

Results

03/02 05:45 CST

International Game Technology PLC Reports Fourth Quarter And Full Year 2020 ResultsFourth Quarter:- $885 million in revenue and $96 million in operating income from continuing operations includes highest Global Lottery revenue and profit performance in two years- Cash from operating activities of $255 million; combined free cash flow of $191 million in line with prior-year level- Net loss of $220 million, includes $155 million non-cash foreign exchange loss; combined Adjusted EBITDA of $321 million driven by high profit flow-through of Global Lottery same-store sales growth and benefit from cost-saving actionsFull Year:- 2020 revenue from continuing operations of $3.12 billion reflects resilience of Global Lottery, including double-digit same-store sales growth in North America in the second half of the year and growing contribution from Digital & Betting activities- Cash from operating activities totaled $866 million and combined free cash flow was $576 million, among the highest levels in five years- Reduced net debt by $71 million as reported, $433 million excluding unfavorable foreign currency impact LONDON, March 2, 2021

LONDON, March 2, 2021 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the fourth quarter and full year ended December 31, 2020. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the results; access details are provided below.

"The solid results we achieved for this pandemic-impacted year have given us momentum into 2021. They are a result of the vision, agility, and discipline of the IGT team as well as the distinct advantages of our diverse portfolio," said Marco Sala, CEO of IGT. "We also made important strategic progress. The Company undertook a comprehensive reorganization to sharpen our focus on our core competencies and drive structural operational efficiencies. This provides a clear path to increasing shareholder value as we build on our leadership positions with a stronger revenue and profit growth profile."

"We generated $866 million in cash from operating activities during the year, among the highest level in five years, primarily driven by resilient Global Lottery performance and rigorous cost and invested capital controls," said Max Chiara, CFO of IGT. "Liquidity improved more than $300 million to over $2.7 billion. As a leaner, stronger Company, we expect leverage to return to pre-pandemic levels in the next 12-18 months."

Overview of Consolidated Fourth Quarter and Full Year 2020 Results

Quarter Ended ConstantYear Ended Constant Y/Y Y/Y All amounts from Currency Currencycontinuing December 31, Change December 31,Change operations unless Change Change otherwise noted (%) (%) 20202019 (%) 2020 2019 (%)

(In $ millions, unless otherwise noted)

GAAP Financials:

Revenue

Global Lottery630 568 11% 8% 2,1642,293(6)% (6)%

Global Gaming 255 476 (46)% (47)% 951 1,739(45)% (45)%

Total revenue 885 1,044 (15)% (17)% 3,1154,032(23)% (23)%



Operating income/ (loss)

Global Lottery195 154 26% 21% 642 697 (8)% (10)%

Global Gaming (39)59 NA NA (206)180 NA NA

Corporate (20)(25) 20% 32% (76) (105)28% 29% support expense

Other^(1) (40)(148) 73% 73% (468)(294)(59)% (59)%

Total operating 96 40 138% 132% (107)478 NA NA income/(loss)



Net cash provided by operating activities from 251 278 (10)% 595 907 (34)% continuing operations

Net cash provided by operating activities from 4 26 (83)% 271 186 46% discontinued operations

Net cash provided by operating 255 304 (16)% 866 1,093(21)% activities



Cash and cash 907 655 39% 907 655 39% equivalents



Non-GAAP Financial Measures:

Adjusted EBITDA

Global Lottery313 268 17% 12% 1,0861,136(4)% (6)%

Global Gaming (2) 115 NA NA (16) 397 NA NA

Corporate (16)(18) 12% 21% (62) (79) 21% 21% support expense

Total Adjusted 295 365 (19)% (22)% 1,0081,454(31)% (32)% EBITDA

EBITDA from discontinued 26 69 (63)% 138 256 (46)% operations

Adjusted EBITDA - 321 435 (26)% 1,1461,710(33)% combined



Free cash flow 201 186 8% 340 530 (36)%

Free cash flow from discontinued (10)9 NA 236 121 94% operations

Free cash flow - 191 195 (2)% 576 651 (12)% combined



Net debt 7,3197,390(1)%



^(1) Primarily includes purchase price amortization and goodwill impairment

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

Fourth Quarter and Full Year 2020 Key Highlights:

* Consolidated: * Generated $866 million in cash from operating activities and $576 million in combined free cash flow during 2020; cash flow performance especially strong in the back half of the year * Achieved $500 million in 2020 temporary cost savings/avoidance * Launched OPtiMa business efficiency program and accelerated timing with $200M+ in targeted savings to be achieved in 2021 * Implemented a simplified global organizational structure focused primarily on two business segments: Global Lottery and Global Gaming * Announced agreement to sell Italian B2C gaming businesses for (euro)950 million

* Global Lottery: * Delivered highest quarterly segment-level revenue and Adjusted EBITDA in two years in the fourth quarter; full year same-store sales up 7% in North America including the strongest annual growth for instant tickets and draw games in seven years * Awarded long-term contracts with the Czech Republic, Poland and Nebraska lotteries following competitive bid processes in 2020 * In 2020, signed two-year contract extensions with the New York, Tennessee, and Minnesota lotteries; seven-year contract extensions with Western Canada Lottery Corporation and, more recently, with the Jamaica lottery

* Global Gaming: * Sequential stability in Global Gaming revenue and profit in the fourth quarter; KPIs stable to improving * 2020 product highlights: growing acceptance of cashless solutions with Resort Wallet(tm) launched at Resorts World Catskills and, more recently, obtaining Nevada regulatory approval; entered Historical Horse Racing market; launched Peak family of cabinets * Strong double-digit growth in Digital & Betting for the year

Fourth Quarter 2020 Financial Highlights:

The Company's B2C gaming machine and sports betting activities in Italy have been classified as discontinued operations due to the pending sale of these businesses. Unless otherwise noted, results presented in this release are from continuing operations.

Fourth quarter results reflect the continued, global impact of the COVID-19 pandemic.

Total revenue of $885 million compared to $1.04 billion in the prior-year period

* Global Lottery revenue totals $630 million, up 11% from the prior year * Double-digit same-store sales growth in North America with a return to growth in Italy * Reduced by $19 million catch-up adjustment for unspent advertising in Italy

* Global Gaming revenue of $255 million, down 46% from the prior year * Impacted by pandemic-related casino closures and operating restrictions * Sequential stability with the third quarter supported by stable to improving KPIs * Digital & Betting service revenue rose nearly 55% compared to the prior year; overall increase of 4% includes impact of non-recurring software sale in the prior year

Operating income of $96 million, up from $40 million in the prior year

* Goodwill impairment of $99 million in the prior-year period * High profit flow-through of Global Lottery same-store sales growth * Global Gaming impacted by pandemic-related decline in revenue * Benefit of disciplined cost-saving actions across segments

Net interest expense of $101 million, in line with prior-year period

Provision for income taxes of $73 million compared to $2 million

* Higher valuation allowances on deferred tax assets in the current period * Income taxes paid of $51 million versus $77 million in the prior year

Net loss attributable to IGT was $242 million versus $168 million, driven by higher non-cash foreign exchange losses, primarily on Euro-denominated debt instruments

Net loss attributable to IGT per diluted share of $(1.18) compared to $(0.82)

Adjusted EBITDA of $295 million versus $365 million in the prior year

Net debt of $7.32 billion compared to $7.39 billion at December 31, 2019; reduced $71 million as reported, $433 million excluding unfavorable foreign currency impact

Full Year 2020 Financial Highlights:

Year-over-year comparisons reflect the global impact of the COVID-19 pandemic in 2020.

Total revenue was $3.12 billion versus $4.03 billion in the prior year

* Global Lottery revenue of $2.16 billion, down 6%, demonstrating remarkable resilience * Global same-store sales stable * Steep recovery in second half driven by double-digit North America same-store sales growth

* Global Gaming revenue was $951 million, down 45%, as the pandemic caused protracted casino closures and operating restrictions around the world

Operating loss of $107 million compared to operating income of $478 million in the prior-year period

* Impact of lower revenue * Goodwill impairment of $296 million in the current year compared to $99 million in the prior year * Benefit of disciplined cost-saving actions across segments

Net interest expense of $398 million versus $411 million in the prior year, on lower average cost of debt

Provision for income taxes of $28 million versus $131 million in the prior year

* Pre-tax loss in 2020 compared to income in 2019, in addition to higher valuation allowances on deferred tax assets in 2020 * Income taxes paid of $89 million compared to $197 million in the prior year

Net loss attributable to IGT was $898 million compared to $19 million in the prior-year period, driven by higher non-cash foreign exchange losses, primarily on Euro-denominated debt instruments, and goodwill impairment

Net loss attributable to IGT per diluted share of $(4.39) versus $(0.09)

Adjusted EBITDA totaled $1.01 billion compared to $1.45 billion

Cash from operations was $595 million compared to $907 million in 2019, relatively resilient despite pandemic impact, on solid Global Lottery financial results and diligent invested capital management

Capital expenditures of $255 million versus $377 million in the prior year, reflecting focus on cash cost savings during the pandemic

Cash and cash equivalents of $907 million as of December 31, 2020, versus $655 million as of December 31, 2019

Cash and Liquidity Update

* Total liquidity increased over $300 million compared to December 31, 2019, due to strong cash flow generation * At December 31, 2020, liquidity totaled $2.72 billion, comprised of $907 million in unrestricted cash and $1.82 billion available under revolving credit facilities

Conference Call and Webcast:

March 2, 2021, at 8:00 a.m. EST

Live webcast available under "News, Events & Presentations" on IGT's Investor Relations website at www.IGT.com; replay available on the website following the live event

Dial-In Numbers

* US/Canada toll-free dial-in number: +1 844 842 7999 * Outside the US/Canada toll-free number: +1 612 979 9887 * Conference ID/confirmation code: 4538018 * A telephone replay of the call will be available for one week * US/Canada replay number: +1 855 859 2056 * Outside the US/Canada replay number: +1 404 537 3406 * ID/Confirmation code: 4538018

Note: Certain totals in the tables included in this press release may not adddue to rounding

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 2020 are calculated using the same foreign exchange rates as the corresponding 2019 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.

About IGTIGT (NYSE:IGT) is the global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Gaming Machines and Lotteries 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 unrivalled 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 countries 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 StatementsThis news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the "Company") and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as "aim," "anticipate," "believe," "plan," "could," "would," "should," "shall", "continue," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "will," "possible," "potential," "predict," "project" or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company's control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company's annual report on Form 20-F for the financial year ended December 31, 2020 and other documents filed 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 affect the Company's business. 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 or 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 MeasuresManagement 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.

Total Adjusted EBITDA represents loss from continuing operations (a GAAP measure) before income taxes, interest expense, foreign exchange gain (loss), other non-operating expenses, depreciation, impairment losses, amortization (service revenue, purchase accounting and non-purchase accounting) restructuring expenses, stock-based compensation, and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of on-going 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, and certain other non-recurring items. EBITDA - discontinued operations represents income from discontinued operations (a GAAP measure) before income taxes, interest expense, depreciation and amortization. Adjusted EBITDA - combined represents Total Adjusted EBITDA plus EBITDA - discontinued operations. Management believes that the non-GAAP measures just mentioned are 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 cash and equivalents. Cash and cash equivalents 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.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Free cash flow - discontinued operations represents cash flows from operating activities - discontinued operations (a GAAP measure) less cash flows from investing activities - discontinued operations (a GAAP measure). Free cash flow - combined represents Free Cash Flow plus Free Cash Flow - discontinued operations. 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 the current financial data using the prior-year/period exchange rate (i.e., the exchange rates 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) 392-7452Francesco Luti, +39 3485475493; for Italian media inquiriesJames Hurley, Investor Relations, +1 (401) 392-7190

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

Constant Constant Y/Y Y/Y Currency CurrencyGLOBAL LOTTERY Q4'20 Q4'19 Change FY'20 FY'19 Change Change Change (%) (%) (%)^ (1) (%) ^(1)

Revenue

Service

Operating and facilities 549 527 4% 1% 1,944 2,126 (9)% (10)% management contracts

Upfront license (52) (49) (8)% -% (200) (196) (2)% -% fee amortization

Operating and facilities 497 479 4% 1% 1,744 1,931 (10)% (11)% management contracts, net

Other 86 66 32% 24% 299 252 18% 17%

Total service 583 544 7% 4% 2,043 2,183 (6)% (7)% revenue



Product sales 47 24 100% 97% 121 110 10% 10%

Total revenue 630 568 11% 8% 2,164 2,293 (6)% (6)%



Operating income 195 154 26% 21% 642 697 (8)% (10)%

Adjusted EBITDA^ 313 268 17% 12% 1,086 1,136 (4)% (6)% (1)



Q4'20 Q4'19 FY'20 FY'19 Constant Constant Constant Constant Currency Currency Currency Currency Change Change Change Change (%) ^(1) (%)^ (1) (%) ^(1) (%)^ (1)

Global same-store sales growth (%)

Instant ticket & 8.2% 3.2% 1.6% 4.1% draw games

Multi-jurisdiction4.5% (49.4)% (17.0)% (18.3)% jackpots

Total 7.9% (4.6)% 0.1% 1.7%



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

Instant ticket & 10.7% 4.7% 7.3% 5.2% draw games

Multi-jurisdiction4.5% (49.4)% (17.0)% (18.3)% jackpots

Total 10.1% (5.5)% 4.7% 2.0%



Italy same-store sales growth (%)

Instant ticket & 0.4% (1.3)% (16.1)% 0.8% draw games



^(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details





Constant Constant Y/Y Y/Y Currency CurrencyGLOBAL GAMING Q4'20 Q4'19 Change FY'20 FY'19 Change Change Change (%) (%) (%)^ (1) (%)^ (1)

Revenue

Service

Terminal 85 133 (36)% (36)% 297 568 (48)% (47)%

Systems, software,81 80 1% -% 299 350 (14)% (14)% and other

Total service 166 213 (22)% (22)% 597 918 (35)% (35)% revenue



Product sales

Terminal 59 188 (69)% (69)% 205 581 (65)% (65)%

Other 30 75 (60)% (61)% 149 240 (38)% (38)%

Total product 89 263 (66)% (67)% 355 821 (57)% (57)% sales revenue

Total revenue 255 476 (46)% (47)% 951 1,739 (45)% (45)%



Operating (loss) (39) 59 NA NA (206) 180 NA NA income

Adjusted EBITDA^ (2) 115 NA NA (16) 397 NA NA (1)



Installed base units

Casino 48,232 50,834 (5)% 48,232 50,834 (5)%

Casino - L/T lease1,068 - NA 1,068 - NA ^ (2)

Total installed 49,300 50,834 (3)% 49,300 50,834 (3)% base units



Installed base units (by geography)

US & Canada 34,275 35,977 (5)% 34,275 35,977 (5)%

Rest of world 15,025 14,857 1% 15,025 14,857 1%

Total installed 49,300 50,834 (3)% 49,300 50,834 (3)% base units



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

US & Canada $27.88 $40.29 (31)% $24.34 $40.31 (40)%

Rest of world $3.33 $7.75 (57)% $3.67 $8.50 (57)%

Total yields $20.32 $31.08 (35)% $18.06 $31.45 (43)%



Global machine units sold

New/expansion 666 1,811 (63)% 3,046 5,814 (48)%

Replacement 3,662 11,808 (69)% 11,616 36,262 (68)%

Total machine 4,328 13,619 (68)% 14,662 42,076 (65)% units sold



US & Canada machine units sold

New/expansion 668 1,405 (52)% 2,753 4,116 (33)%

Replacement 2,636 5,986 (56)% 8,009 16,903 (53)%

Total machine 3,304 7,391 (55)% 10,762 21,019 (49)% units sold



Rest of world machine units sold

New/expansion (2) 406 NA 293 1,698 (83)%

Replacement 1,026 5,822 (82)% 3,607 19,359 (81)%

Total machine 1,024 6,228 (84)% 3,900 21,057 (81)% units sold





^(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

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

^(3) Excludes Casino L/T lease units due to treatment as sales-type leases, comparability on a Y/Y basis hindered due to fewer active units





Constant Constant Y/Y Y/Y GLOBAL GAMING Currency Currency(Continued) Q4'20 Q4'19 Change FY'20 FY'19 Change Change Change (%) (%) (%)^ (1) (%)^ (1)

Average selling price (ASP), in absolute $

US & Canada 14,200 14,900 (5)% 14,200 15,100 (6)%

Rest of world 10,400 11,900 (13)% 12,400 11,700 6%

Total ASP 13,300 13,500 (1)% 13,800 13,400 3%



Gaming systems 38 58 (35)% 136 213 (36)% revenue

CONSOLIDATED

Revenue (by geography)

US & Canada 489 580 (16)% (16)% 1,748 2,236 (22)% (22)%

Italy 266 237 12% 4% 862 949 (9)% (12)%

Rest of world 131 228 (43)% (44)% 505 846 (40)% (40)%

Total revenue 885 1,044 (15)% (17)% 3,115 4,032 (23)% (23)%







Digital & Betting 47 45 4% 2% 170 130 31% 31% Revenue ^(2)





^(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

^(2) Included within consolidated revenue





Constant Constant Y/Y Y/Y DISCONTINUED Currency CurrencyOPERATIONS - ITALYQ4'20 Q4'19 Change FY'20 FY'19 Change B2C KPIs Change Change (%) (%) (%)^ (1) (%)^ (1)

Italy installed base units

VLT - Operator 10,774 11,020 (2)% 10,774 11,020 (2)%

AWP 36,168 40,892 (12)% 36,168 40,892 (12)%

Total Italy installed base 46,942 51,912 (10)% 46,942 51,912 (10)% units



Italy wagers ((eu))

VLT 228 1,414 (84)% 2,062 5,669 (64)%

AWP 239 958 (75)% 1,719 3,690 (53)%



Italy sports betting wagers 233 298 (22)% 767 1,050 (27)% ((eu))

Italy sports 82.9% 83.3% -% 82.4% 83.1% (1)% betting payout (%)





^(1) Non-GAAP measure; see disclaimer on page 6 and reconciliations to the most directly comparable GAAP measure in Appendix for further details

International Game Technology PLC Consolidated Statements of Operations ($ and shares in thousands, except per share amounts) Unaudited



For the three monthsFor the year ended ended December 31, December 31,

2020 2019 2020 2019

Service revenue 748,932 756,653 2,639,5583,100,868

Product sales 136,193 286,875 475,898 930,889

Total revenue 885,125 1,043,5283,115,4564,031,757



Cost of services 439,816 445,158 1,633,8991,777,225

Cost of product sales 103,096 157,254 345,800 558,011

Selling, general and 195,895 229,163 706,895 849,620 administrative

Research and development 50,837 65,936 190,948 266,241

Restructuring (1,910) 3,002 45,045 24,855

Goodwill impairment - 99,000 296,000 99,000

Other operating expense (income), 1,282 3,632 4,334 (21,111) net

Total operating expenses 789,016 1,003,1453,222,9213,553,841



Operating income (loss) 96,109 40,383 (107,465)477,916



Interest expense, net (100,799)(101,391)(397,916)(410,875)

Foreign exchange (loss) gain, net (155,449)(101,742)(308,898)39,874

Other income (expense), net 990 (3,954) (33,428) 21,092

Total non-operating expenses (255,258)(207,087)(740,242)(349,909)



(Loss) income from continuing operations before provision for (159,149)(166,704)(847,707)128,007 income taxes

Provision for income taxes 72,747 2,270 27,698 130,757

Loss from continuing operations (231,896)(168,974)(875,405)(2,750)

Income from discontinued 11,751 30,589 36,681 114,408 operations, net of tax

Net (loss) income (220,145)(138,385)(838,724)111,658

Less: Net income attributable to non-controlling interests from 23,830 27,877 63,926 126,144 continuing operations

Less: Net (loss) income attributable to non-controlling (1,979) 1,436 (4,760) 4,539 interests from discontinued operations

Net loss attributable to IGT PLC (241,996)(167,698)(897,890)(19,025)



Net loss from continuing operations attributable to IGT PLC(1.25) (0.96) (4.59) (0.63) per common share - basic and diluted

Net loss attributable to IGT PLC per common share - basic and (1.18) (0.82) (4.39) (0.09) diluted



Weighted-average shares - basic 204,857 204,435 204,725 204,373 and diluted

International Game Technology PLC

Consolidated Balance Sheets

($ thousands)

Unaudited



December 31,December 31,

2020 2019

Assets

Current assets:

Cash and cash equivalents 907,015 654,628

Restricted cash and cash equivalents 199,246 220,962

Trade and other receivables, net 846,128 875,263

Inventories 169,207 161,790

Other current assets 479,649 513,015

Assets held for sale 838,840 208,379

Total current assets 3,440,085 2,634,037

Systems, equipment and other assets related to contracts, net1,068,121 1,205,592

Property, plant and equipment, net 131,602 146,055

Operating lease right-of-use assets 288,196 296,751

Goodwill 4,713,489 4,931,235

Intangible assets, net 1,577,354 1,749,614

Other non-current assets 1,773,641 1,917,751

Assets held for sale - 763,555

Total non-current assets 9,552,403 11,010,553

Total assets 12,992,488 13,644,590



Liabilities and shareholders' equity

Current liabilities:

Accounts payable 1,126,043 1,059,033

Current portion of long-term debt 392,672 462,155

Short-term borrowings 480 3,193

Other current liabilities 846,273 758,818

Liabilities held for sale 249,573 185,152

Total current liabilities 2,615,041 2,468,351

Long-term debt, less current portion 7,857,086 7,600,169

Deferred income taxes 333,010 393,040

Operating lease liabilities 266,227 272,350

Other non-current liabilities 359,961 395,866

Liabilities held for sale - 29,836

Total non-current liabilities 8,816,284 8,691,261

Total liabilities 11,431,325 11,159,612

Commitments and contingencies

IGT PLC's shareholders' equity 776,737 1,658,262

Non-controlling interests 784,426 826,716

Total shareholders' equity 1,561,163 2,484,978

Total liabilities and shareholders' equity 12,992,488 13,644,590

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited



For the three months endedFor the year ended

December 31, December 31,

2020 2019 2020 2019

Cash flows from operating activities

Net (loss) income (220,145) (138,385) (838,724)111,658

Less: Income from discontinued operations, 11,751 30,589 36,681 114,408 net of tax

Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities from continuing operations:

Foreign exchange loss 155,449 101,742 308,898 (39,874) (gain), net

Depreciation 89,992 103,867 354,854 385,987

Amortization of upfront 54,856 51,109 210,432 205,739 license fees

Amortization 50,900 57,902 211,340 227,956

Deferred income taxes 28,313 (70,883) (78,207) (68,293)

Debt issuance cost 5,579 5,432 21,327 22,436 amortization

Stock-based compensation 3,826 6,468 (6,877) 26,514

Goodwill impairment - 99,000 296,000 99,000

(Gain) loss on (2) - 28,265 11,964 extinguishment of debt

(Gain) loss on sale of (482) 610 (27) (64,714) assets

Other non-cash items, net (1,175) 1,980 (1,675) 18,942

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

Accounts payable 49,287 21,499 4,595 28,247

Inventories 26,063 60,597 16,628 84,472

Trade and other (95,495) (55,464) 73,578 (49,267) receivables

Other assets and 115,815 63,575 31,076 20,981 liabilities

Net cash provided by operating activities from 251,030 278,460 594,802 907,340 continuing operations

Net cash provided by operating activities from 4,287 25,970 270,829 185,795 discontinued operations

Net cash provided by 255,317 304,430 865,631 1,093,135 operating activities



Cash flows from investing activities

Capital expenditures (50,210) (92,142) (254,689)(377,248)

Proceeds from sale of 2,929 23,300 9,251 123,855 assets

Other (286) (274) 12,151 5,851

Net cash used in investing activities from continuing(47,567) (69,116) (233,287)(247,542) operations

Net cash used in investing activities from (14,051) (17,226) (35,284) (64,648) discontinued operations

Net cash used in investing(61,618) (86,342) (268,571)(312,190) activities



Cash flows from financing activities

Principal payments on (175,000) - (988,379)(1,264,647)long-term debt

Net (payments of) receipts(28,560) (35,077) 67,138 (34,324) from financial liabilities

Payments of debt issuance (105) (1,143) (21,584) (25,930) costs

Payments in connection with the extinguishment of- (91) (25,000) (8,689) debt

Proceeds from long-term - - 750,000 1,397,025 debt

Net proceeds from (payments of) short-term 475 2,452 (7,135) (32,067) borrowings

Dividends paid - (40,887) (40,887) (163,503)

Return of capital - (32,309) (18,404) (32,309) (98,788) non-controlling interests

Dividends paid - (497) (971) (136,389)(136,655) non-controlling interests

Capital increase - 4,778 130 8,112 1,499 non-controlling interests

Other (2,828) (2,397) (11,426) (10,195)

Net cash used in financing(234,046) (96,388) (437,859)(376,274) activities



Net (decrease) increase in cash and cash equivalents (40,347) 121,700 159,201 404,671 and restricted cash and cash equivalents

Effect of exchange rate changes on cash and cash 29,971 8,893 75,770 (22,197) equivalents and restricted cash and cash equivalents

Cash and cash equivalents and restricted cash and 1,139,598 763,658 894,251 511,777 cash equivalents at the beginning of the period

Cash and cash equivalents and restricted cash and 1,129,222 894,251 1,129,222894,251 cash equivalents at the end of the period

Less: Cash and cash equivalents and restricted22,961 18,661 22,961 18,661 cash and cash equivalents of discontinued operations

Cash and cash equivalents and restricted cash and cash equivalents at the 1,106,261 875,590 1,106,261875,590 end of the period of continuing operations



Supplemental Cash Flow Information:

Interest paid (37,433) (28,175) (409,560)(400,022)

Income taxes paid (50,761) (77,495) (89,006) (196,831)

International Game Technology PLC

Net Debt

($ thousands)

Unaudited



December 31,December 31,

2020 2019

6.250% Senior Secured U.S. Dollar Notes due February 20221,003,822 1,491,328

4.750% Senior Secured Euro Notes due February 2023 1,038,052 948,382

5.350% Senior Secured U.S. Dollar Notes due October 2023 60,791 60,885

3.500% Senior Secured Euro Notes due July 2024 609,742 557,331

6.500% Senior Secured U.S. Dollar Notes due February 20251,091,641 1,089,959

3.500% Senior Secured Euro Notes due June 2026 913,330 835,105

6.250% Senior Secured U.S. Dollar Notes due January 2027 744,155 743,387

2.375% Senior Secured Euro Notes due April 2028 608,400 556,403

5.250% Senior Secured U.S. Dollar Notes due January 2029 743,125 -

Senior Secured Notes 6,813,058 6,282,780



Euro Term Loan Facility due January 2023 1,044,028 1,317,389

Long-term debt, less current portion 7,857,086 7,600,169



4.750% Senior Secured Euro Notes due March 2020 - 434,789

5.500% Senior Secured U.S. Dollar Notes due June 2020 - 27,366

Euro Term Loan Facility due January 2023 392,672 -

Current portion of long-term debt 392,672 462,155



Short-term borrowings 480 3,193

Total debt 8,250,238 8,065,517



Less: Cash and cash equivalents 907,015 654,628

Less: Debt issuance costs, net - Revolving Credit 23,937 20,464 Facilities due July 2024



Net debt 7,319,286 7,390,425



Note: Net debt is a non-GAAP financial measure

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited



For the three months ended December 31, 2020

Business Global Global CorporateTotal IGT Segment LotteryGaming and OtherPLC Total

Loss from continuing (231,896)operations

Provision for income taxes 72,747

Interest expense, net 100,799

Foreign exchange loss, net 155,449

Other non-operating (990) income, net

Operating income (loss) 194,725(38,763) 155,962 (59,853) 96,109

Depreciation 54,000 35,801 89,801 191 89,992

Amortization - service 54,856 - 54,856 - 54,856 revenue ^(1)

Amortization - 8,347 2,152 10,499 796 11,295 non-purchase accounting

Amortization - purchase - - - 39,605 39,605 accounting

Restructuring 67 (1,819) (1,752) (158) (1,910)

Stock-based compensation 839 745 1,584 2,242 3,826

Other ^(2) - 3 3 1,281 1,284

Adjusted EBITDA 312,834(1,881) 310,953 (15,896) 295,057



Income from discontinued 11,751 operations

Benefit from income taxes (3,517)

Interest expense, net 5

Depreciation 8,347

Amortization 9,172

EBITDA - discontinued 25,758 operations



Adjusted EBITDA - combined 320,815



Cash flows from operating activities - continuing 251,030 operations

Capital expenditures (50,210)

Free Cash Flow 200,820



Cash flows from operating activities - discontinued 4,287 operations

Cash flows from investing activities - discontinued (14,051) operations

Free Cash Flow - (9,764) discontinued operations



Free Cash Flow - combined 191,056





^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited



For the three months ended December 31, 2019

Business Global Global CorporateTotal IGT Segment LotteryGaming and OtherPLC Total

Loss from continuing (168,974)operations

Provision for income taxes 2,270

Interest expense, net 101,391

Foreign exchange loss, net 101,742

Other non-operating 3,954 expense, net

Operating income (loss) 153,94658,927 212,873 (172,490)40,383

Goodwill impairment - - - 99,000 99,000

Depreciation 52,622 50,481 103,103 764 103,867

Amortization - service 51,109 - 51,109 - 51,109 revenue ^(1)

Amortization - non-purchase6,828 2,290 9,118 826 9,944 accounting

Amortization - purchase - - - 47,958 47,958 accounting

Restructuring 1,166 1,404 2,570 432 3,002

Stock-based compensation 1,815 2,273 4,088 2,380 6,468

Other ^(2) 565 - 565 3,000 3,565

Adjusted EBITDA 268,051115,375383,426 (18,130) 365,296



Income from discontinued 30,589 operations

Provision for income taxes 10,318

Interest income, net (744)

Depreciation 15,105

Amortization 14,130

EBITDA - discontinued 69,398 operations



Adjusted EBITDA - combined 434,694



Cash flows from operating activities - continuing 278,460 operations

Capital expenditures (92,142)

Free Cash Flow 186,318



Cash flows from operating activities - discontinued 25,970 operations

Cash flows from investing activities - discontinued (17,226) operations

Free Cash Flow - 8,744 discontinued operations



Free Cash Flow - combined 195,062





^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited



For the year ended December 31, 2020

Business Global Global CorporateTotal IGT Segment Lottery Gaming and OtherPLC Total

Loss from continuing (875,405)operations

Provision for income 27,698 taxes

Interest expense, net 397,916

Foreign exchange loss, 308,898 net

Other non-operating 33,428 expense, net

Operating income 641,930 (205,657)436,273 (543,738)(107,465)(loss)

Goodwill impairment - - - 296,000 296,000

Depreciation 201,054 152,508 353,562 1,292 354,854

Amortization - service210,432 - 210,432 - 210,432 revenue ^(1)

Amortization - non-purchase 30,353 7,611 37,964 3,264 41,228 accounting

Amortization - - - - 170,112 170,112 purchase accounting

Restructuring 5,399 33,612 39,011 6,034 45,045

Stock-based (2,874) (4,318) (7,192) 315 (6,877) compensation

Other ^(2) - 3 3 4,235 4,238

Adjusted EBITDA 1,086,294(16,241) 1,070,053(62,486) 1,007,567



Income from discontinued 36,681 operations

Provision for income 6,726 taxes

Interest expense, net 172

Depreciation 44,310

Amortization 50,314

EBITDA - discontinued 138,203 operations



Adjusted EBITDA - 1,145,770combined



Cash flows from operating activities - 594,802 continuing operations

Capital expenditures (254,689)

Free Cash Flow 340,113



Cash flows from operating activities - 270,829 discontinued operations

Cash flows from investing activities - (35,284) discontinued operations

Free Cash Flow - discontinued 235,545 operations



Free Cash Flow - 575,658 combined





^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ thousands)

Unaudited



For the year ended December 31, 2019

Business Global Global CorporateTotal IGT Segment Lottery Gaming and OtherPLC Total

Loss from continuing (2,750) operations

Provision for income 130,757 taxes

Interest expense, net 410,875

Foreign exchange gain, (39,874) net

Other non-operating (21,092) income, net

Operating income (loss) 697,267 179,548876,815 (398,899)477,916

Goodwill impairment - - - 99,000 99,000

Depreciation 200,083 182,799382,882 3,105 385,987

Amortization - service 205,739 - 205,739 - 205,739 revenue ^(1)

Amortization - 25,002 8,150 33,152 3,180 36,332 non-purchase accounting

Amortization - purchase - - - 191,624 191,624 accounting

Restructuring 2,169 18,362 20,531 4,324 24,855

Stock-based compensation5,669 7,361 13,030 13,484 26,514

Other^ (2) 566 431 997 5,298 6,295

Adjusted EBITDA 1,136,495396,6511,533,146(78,884) 1,454,262



Income from discontinued 114,408 operations

Provision for income 42,352 taxes

Interest income, net (747)

Depreciation 48,277

Amortization 51,237

EBITDA - discontinued 255,527 operations



Adjusted EBITDA - 1,709,789combined



Cash flows from operating activities - 907,340 continuing operations

Capital expenditures (377,248)

Free Cash Flow 530,092



Cash flows from operating activities - 185,795 discontinued operations

Cash flows from investing activities - (64,648) discontinued operations

Free Cash Flow - 121,147 discontinued operations



Free Cash Flow - 651,239 combined





^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

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SOURCE International Game Technology PLC