PR Newswire | Aug 3, 2021 06:41AM EDT

08/03 05:40 CDT

International Game Technology PLC Reports Second Quarter 2021 Results- Revenue up 74% to over $1.0 billion, fueled by strong increases in all businesses, including 35% Global Lottery same-store sales growth- Delivered operating income of $244 million, highlighting impressive Global Lottery operating leverage and excellent progress on structural cost savings- Net income of $365 million comprised of $39 million loss from continuing operations and income from discontinued operations of $404 million, including gain on sale of assets- Adjusted EBITDA increases 170% to $442 million, among the highest in Company history- Generated $500 million in cash from continuing operations and a record-level $380 million of free cash flow during the first half of the year- $1.0 billion net debt reduction in first half; net debt leverage improved from 6.4x to 4.3x, reaching target six months early- Raising 2021 outlook; now expect to exceed 2019 levels for key financial metrics this year LONDON, Aug. 3, 2021

LONDON, Aug. 3, 2021 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the second quarter ended June 30, 2021. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

"Impressive second quarter results highlight the vitality of our portfolio," said Marco Sala, CEO of IGT. "Outstanding Lottery performance, the progressive recovery in land-based Gaming, and strong increase in Digital & Betting activities drove substantial revenue and profit growth, delivering Adjusted EBITDA that is among the highest recorded in a quarterly period. On the strength of the first half performance, we are raising our outlook for the year and now expect to exceed 2019 levels for key financial metrics this year."

"Record free cash flow from continuing operations and proceeds from recent asset sales fueled significant debt reduction in the first half," said Max Chiara, CFO of IGT. "Our leverage profile improved substantially, reaching pre-pandemic levels well ahead of expectations, and improving our credit profile and overall financial condition."

Overview of Consolidated Second Quarter 2021 Results

Quarter Ended Y/Y ConstantAll amounts from continuing operations June 30, Change Currency (%) Change (%) 2021 2020

($ in millions, unless otherwise noted)

GAAP Financials:

Revenue

Global Lottery 725 460 58% 50%

Global Gaming 316 140 126% 120%

Total revenue 1,041 600 74% 67%

Operating income (loss)

Global Lottery 300 107 180% 163%

Global Gaming 10 (111) NA NA

Corporate support expense (26) (26) -% 11%

Other^(1) (40) (43) 7% 7%

Total operating income (loss) 244 (72) NA

Net cash provided by operating activities 249 127 95%

Cash and cash equivalents 639 1,338 (52)%

Non-GAAP Financial Measures:

Adjusted EBITDA

Global Lottery 414 221 87% 76%

Global Gaming 49 (36) NA NA

Corporate support expense (21) (20) (2)% 12%

Total Adjusted EBITDA 442 164 170% 157%

Free cash flow 176 73 140%

Net debt^(2) 6,312 7,297 (13)%

^(1) Primarily includes purchase price amortization

^(2) Historical net debt recast to only reflect continuing operations

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

Key Highlights:

* Global Lottery delivers second-highest revenue and profit levels in segment history, driven by strong player demand * Achieved approximately two-thirds of $200M+ 2021 OPtiMa savings targets year-to-date * Global Gaming returns to profitability as progressive recovery continues; Digital & Betting revenue increases 41% in the quarter * Growing adoption of IGT's best-in-class cashless solutions, most recently with Agua Caliente Casinos and Washington's Lottery * Completed sale of Italy B2C gaming businesses; net proceeds used to partially fund full redemption, by make-whole call, of 4.750% Senior Secured Euro Notes due February 2023 * Announced 25th anniversary of Wheel of Fortune(r) Slots; deployed Wheel of Fortune(r)-themed Historical Horse Racing games at Churchill Downs in Kentucky * Signed seven-year systems contract with Maryland Lottery connecting 11,500 Video Lottery Terminals and Electronic Table Games across six casinos * Expanded availability of PeakSlant49(tm) cabinet, with high-performing core video content, under purchase model * Recently won "Casino Supplier of the Year" award in 2021 Global Gaming Awards London

Financial highlights:

Consolidated revenue of $1.0 billion, up 74% from the prior year

* Global Lottery revenue rises 58% to $725 million, driven by 35% growth in same-store sales * Global Gaming revenue totals $316 million, up 126% from the prior year and 19% sequentially on continued recovery trends

Operating income of $244 million compared to operating loss of $72 million in the prior year

* High profit flow-through of Global Lottery same-store sales growth * Mix of high-margin Italy lottery sales * Disciplined cost management and benefits from OPtiMa structural cost-savings program

Net interest expense of $91 million compared to $96 million in the prior year, driven by lower average debt balances and interest rates

Provision for income taxes of $32 million compared to a benefit from income taxes of $3 million in the prior year, on significant increase in operating profitability

Net loss of $39 million versus net loss of $268 million in the prior-year period, primarily driven by significant increase in revenue

Adjusted EBITDA of $442 million compared to $164 million in the prior-year period; Global Lottery delivers near record segment-level Adjusted EBITDA

Net debt of $6.3 billion, down over $1.0 billion from $7.3 billion at December 31, 2020; Net debt leverage of 4.3x, down from 6.4x at December 31, 2020, driven by strong financial results, cash flow generation, and proceeds from sale of Italy gaming businesses

Cash and Liquidity Update

* Total liquidity of $1.9 billion as of June 30, 2021; $639 million in unrestricted cash and $1.3 billion in additional borrowing capacity * $748 million in net cash proceeds from sale of Italy gaming businesses used to fund redemption of 4.750% Euro bonds due 2023 * Executed amendment and extension of Term Loan Facility in July, increasing liquidity, extending debt maturities, and lowering interest costs

Outlook

* Second half 2021 revenue and operating income from continuing operations of $2.0 billion and $300 million, respectfully, meaningfully higher than prior year * Global Lottery returns to more normal growth rates applied to higher levels of consumption; third quarter-to-date same-store sales up double digits versus 2019 * Global Gaming progressive recovery continues

* Second half 2021 compared to first half 2021 * Revenue, operating income, and cash from operations lower on normalization of lottery growth trends * Capital expenditures of approximately $175 million, sequentially accelerating to support growth; full year capital expenditures below 2019 levels * Depreciation and amortization stable

* Does not factor in any additional impact from COVID-19 restrictions

Conference Call and Webcast

August 3, 2021, at 8:00 a.m. EDT

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: +1 866 968-0344 * Outside the US/Canada toll-free number: +1 873 415-0264 * Conference ID/confirmation code: 8589154 * A telephone replay of the call will be available for one week * US/Canada replay number: +1 800 585-8367 * Outside the US/Canada replay number: +1 416 621-4642 * ID/Confirmation code: 8589154

Note: Certain totals in the tables included in this press release may not add due 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 2021 are calculated using the same foreign exchange rates as the corresponding 2020 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 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 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.

Adjusted EBITDA represents net income (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, 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. Adjusted EBITDA - discontinued operations represents income (loss) from discontinued operations (a GAAP measure) before income taxes, interest expense, depreciation and amortization, and gain on sale of discontinued operations. Adjusted EBITDA - combined represents Total Adjusted EBITDA plus Adjusted 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 capitalized debt issuance costs and cash and 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.

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. Prior to the disposal of the Italian B2C gaming businesses in the second quarter of 2021, management calculated the Net debt leverage ratio as the ratio of Net debt as of a particular balance sheet date to the LTM of Adjusted EBITDA - combined prior to such date. Management believes that Net debt leverage is a useful measure to assess our 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. 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)



Sequential

Constant Change as

Y/Y ChangeCurrency Reported Q2'21 GLOBAL LOTTERY Q2'20 (%) Change (%)^(1)Q1'21 (%)

Revenue

Service

Operating and facilities management contracts 675 416 62% 55% 695 (3)%

Upfront license fee amortization (53) (48) (9)% -% (52) (1)%

Operating and facilities management contracts, net 623 367 70% 62% 643 (3)%

Other 79 70 12% 4% 83 (4)%

Total service revenue 702 438 60% 53% 725 (3)%



Product sales 23 22 6% 3% 23 (1)%

Total revenue 725 460 58% 50% 749 (3)%



Operating income 300 107 180% 163% 337 (11)%

Adjusted EBITDA^(1) 414 221 87% 76% 447 (7)%



Global same-store sales growth (%)

Instant ticket & draw games 34.9% (7.1)% 27.4%

Multi-jurisdiction jackpots 28.8% (24.2)% 94.7%

Total 34.5% (8.5)% 32.4%



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

Instant ticket & draw games 20.5% 3.5% 20.9%

Multi-jurisdiction jackpots 28.8% (24.2)% 94.7%

Total 21.1% 0.6% 27.8%



Italy same-store sales growth (%)

Instant ticket & draw games 115.2% (40.5)% 52.2%



^(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein



Sequential

Constant Change as

Y/Y ChangeCurrency Reported Q2'21 GLOBAL GAMING Q2'20 (%) Change (%)^(1)Q1'21 (%)

Revenue

Service

Terminal 108 25 325% 323% 90 20%

Systems, software, and other 91 59 54% 50% 86 6%

Total service revenue 199 84 136% 132% 175 13%



Product sales

Terminal 86 44 97% 91% 62 40%

Other 31 12 160% 147% 29 7%

Total product sales revenue 117 56 110% 103% 91 29%

Total revenue 316 140 126% 120% 266 19%



Operating income (loss) 10 (111) NA NA (19) NA

Adjusted EBITDA^(1) 49 (36) NA NA 19 158%



Installed base units

Casino 47,964 48,704 (2)% 48,230

Casino - L/T lease^ (2) 1,136 930 22% 1,135

Total installed base units 49,100 49,634 (1)% 49,365



Installed base units (by geography)

US & Canada 33,820 34,800 (3)% 34,138

Rest of world 15,280 14,834 3% 15,227

Total installed base units 49,100 49,634 (1)% 49,365



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

US & Canada $38.41 $8.69 342% $32.27

Rest of world $4.03 $0.49 NM $2.58

Total yields $27.49 $6.21 343% $22.93



Global machine units sold

New/expansion 1,167 1,443 (19)% 884

Replacement 5,168 1,538 236% 3,521

Total machine units sold 6,335 2,981 113% 4,405



US & Canada machine units sold

New/expansion 643 1,382 (53)% 620

Replacement 3,485 1,330 162% 2,276

Total machine units sold 4,128 2,712 52% 2,896



^(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

^(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



Sequential

Constant Change as

Y/Y ChangeCurrency Reported Q2'21 GLOBAL GAMING (Continued) Q2'20 (%) Change (%)^(1)Q1'21 (%)

Rest of world machine units sold

New/expansion 524 61 NM 264

Replacement 1,683 208 NM 1,245

Total machine units sold 2,207 269 NM 1,509



Average Selling Price (ASP), in absolute $

US & Canada $13,900$14,700(5)% $13,900

Rest of world $12,700$14,000(9)% $13,700

Total ASP $13,400$14,600(8)% $13,800



Gaming Systems Revenue 39 23 66% 30







CONSOLIDATED

Revenue (by geography)

US & Canada 561 369 52% 51% 542 4%

Italy 353 146 141% 122% 348 1%

Rest of world 127 84 51% 40% 124 2%

Total revenue 1,041 600 74% 67% 1,015 3%



Digital & Betting Revenue ^(2) 61 44 41% 34% 58 5%



^(1) Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

^(2) Included within consolidated revenue



International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited



For the three months endedFor the six months ended

June 30, June 30,

2021 2020 2021 2020

Service revenue 901 522 1,802 1,178

Product sales 140 78 254 236

Total revenue 1,041 600 2,055 1,414



Cost of services 438 361 880 776

Cost of product sales 88 67 160 160

Selling, general and administrative 207 168 393 332

Research and development 61 31 116 92

Goodwill impairment - - - 296

Restructuring - 43 - 47

Other operating expense 1 1 1 2

Total operating expenses 796 672 1,551 1,704



Operating income (loss) 244 (72) 504 (290)



Interest expense, net 91 96 185 196

Foreign exchange loss (gain), net 90 74 (55) 4

Other expense, net 70 28 94 29

Total non-operating expenses 251 198 224 229

(Loss) income from continuing operations before provision for (benefit from) (7) (271) 280 (519) income taxes

Provision for (benefit from) income taxes 32 (3) 181 (4)

(Loss) income from continuing operations (39) (268) 100 (515)

Income (loss) from discontinued operations, net of tax 13 (15) 24 (1)

Gain on sale of discontinued operations, net of tax 391 - 391 -

Income (loss) from discontinued operations 404 (15) 415 (1)

Net income (loss) 365 (282) 514 (516)

Less: Net income attributable to non-controlling interests from continuing 60 - 119 15 operations

Less: Net loss attributable to non-controlling interests from discontinued - (3) (2) (4) operations

Net income (loss) attributable to IGT PLC 306 (280) 397 (528)



Net loss from continuing operations attributable to IGT PLC per common share - (0.48) (1.31) (0.09) (2.59) basic & diluted

Net income (loss) attributable to IGT PLC per common share - basic & diluted 1.49 (1.37) 1.94 (2.58)

Weighted-average shares - basic & diluted 205,096 204,748 204,977 204,591

International Game Technology PLC

Consolidated Balance Sheets

($ in millions)

Unaudited



June 30,December 31,

2021 2020

Assets

Current assets:

Cash and cash equivalents 639 907

Restricted cash and cash equivalents 180 199

Trade and other receivables, net 974 846

Inventories 167 169

Other current assets 627 480

Assets held for sale 4 839

Total current assets 2,591 3,440

Systems, equipment and other assets related to contracts, net990 1,068

Property, plant and equipment, net 122 132

Operating lease right-of-use assets 273 288

Goodwill 4,688 4,713

Intangible assets, net 1,499 1,577

Other non-current assets 1,727 1,774

Total non-current assets 9,300 9,552

Total assets 11,891 12,992



Liabilities and shareholders' equity

Current liabilities:

Accounts payable 1,113 1,126

Current portion of long-term debt - 393

Other current liabilities 908 847

Liabilities held for sale - 250

Total current liabilities 2,021 2,615

Long-term debt, less current portion 6,959 7,857

Deferred income taxes 404 333

Operating lease liabilities 254 266

Other non-current liabilities 322 360

Total non-current liabilities 7,940 8,816

Total liabilities 9,961 11,431

Commitments and contingencies

IGT PLC's shareholders' equity 1,216 777

Non-controlling interests 714 784

Shareholders' equity 1,930 1,561

Total liabilities and shareholders' equity 11,891 12,992

International Game Technology PLC

Consolidated Statements of Cash Flows

($ in millions)

Unaudited

For the three months endedFor the six months ended

June 30, June 30,

2021 2020 2021 2020

Cash flows from operating activities

Net income (loss) 365 (282) 514 (516)

Less: Income (loss) from discontinued operations 404 (15) 415 (1)

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

Foreign exchange loss (gain), net 90 74 (55) 4

Depreciation 83 88 165 173

Loss on extinguishment of debt 67 28 91 28

Amortization of upfront license fees 55 51 110 101

Amortization 50 52 100 108

Stock-based compensation 7 1 11 (12)

Debt issuance cost amortization 5 5 11 10

Goodwill impairment - - - 296

Deferred income taxes (18) (13) 82 (37)

Other non-cash items, net 4 4 5 (1)

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

Trade and other receivables (48) (192) (134) 88

Inventories 1 10 5 (6)

Accounts payable (91) 175 24 (19)

Other assets and liabilities 81 111 (14) (67)

Net cash provided by operating activities from continuing operations 249 127 500 153

Net cash provided by (used in) operating activities from discontinued 5 40 (31) 172 operations

Net cash provided by operating activities 254 168 469 325



Cash flows from investing activities

Capital expenditures (73) (54) (121) (140)

Proceeds from sale of assets 5 (1) 11 5

Other 2 - 1 11

Net cash used in investing activities from continuing operations (66) (55) (108) (124)

Net cash provided by (used in) investing activities from discontinued 743 (6) 734 (20) operations

Net cash provided by (used in) investing activities 677 (61) 626 (144)



Cash flows from financing activities

Principal payments on long-term debt (1,035) (527) (2,422) (959)

Payments in connection with the extinguishment of debt (63) (25) (85) (25)

Net (payments of) receipts from financial liabilities (6) (14) 3 36

Payments of debt issuance costs (1) (20) (7) (20)

Proceeds from long-term debt - 750 750 750

Net proceeds from (repayments of) short-term borrowings 4 (35) 3 75

Net proceeds from (repayments of) Revolving Credit Facilities 84 (263) 516 725

Dividends paid - - - (41)

Dividends paid - non-controlling interests (20) (76) (89) (91)

Return of capital - non-controlling interests (51) - (61) -

Capital increase - non-controlling interests 1 - 11 2

Other (5) (4) (10) (6)

Net cash (used in) provided by financing activities (1,091) (213) (1,392) 446



Net (decrease) increase in cash and cash equivalents and restricted cash and (160) (106) (297) 627 cash equivalents

Effect of exchange rate changes on cash and cash equivalents and restricted 23 18 (13) 8 cash and cash equivalents

Cash and cash equivalents and restricted cash and cash equivalents at the 956 1,618 1,129 894 beginning of the period

Cash and cash equivalents and restricted cash and cash equivalents at the end 819 1,530 819 1,530 of the period

Less: Cash and cash equivalents and restricted cash and cash equivalents of - 19 - 19 discontinued operations

Cash and cash equivalents and restricted cash and cash equivalents at the end 819 1,511 819 1,511 of the period of continuing operations



Supplemental Cash Flow Information

Interest paid 53 49 219 231

Income taxes paid 35 7 39 18

International Game Technology PLC

Net Debt

($ in millions)

Unaudited



June 30,December 31,

2021 2020

6.250% Senior Secured U.S. Dollar Notes due February 2022 - 1,004

4.750% Senior Secured Euro Notes due February 2023 - 1,038

5.350% Senior Secured U.S. Dollar Notes due October 2023 61 61

3.500% Senior Secured Euro Notes due July 2024 591 610

6.500% Senior Secured U.S. Dollar Notes due February 2025 1,093 1,092

4.125% Senior Secured U.S. Dollar Notes due April 2026 743 -

3.500% Senior Secured Euro Notes due June 2026 885 913

6.250% Senior Secured U.S. Dollar Notes due January 2027 745 744

2.375% Senior Secured Euro Notes due April 2028 590 608

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

Senior Secured Notes 5,450 6,813



Euro Term Loan Facility due January 2023 1,014 1,044

Euro Revolving Credit Facility B due July 2024 495 -

Long-term debt, less current portion 6,959 7,857



Euro Term Loan Facility due January 2023 - 393

Current portion of long-term debt - 393



Short-term borrowings 4 -

Total debt 6,963 8,250



Less: Cash and cash equivalents 639 907

Less: Debt issuance costs, net - Revolving Credit Facilities due July 202412 24

Net debt 6,312 7,319



Note: Net debt is a non-GAAP financial measure

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the three months ended June 30, 2021

Business

Global Global Segment Corporate Total IGT

Lottery Gaming Total and Other PLC

Loss from continuing operations (39)

Provision for income taxes 32

Interest expense, net 91

Foreign exchange loss, net 90

Other non-operating expense, net 70

Operating income (loss) 300 10 310 (66) 244

Depreciation 49 35 83 - 83

Amortization - service revenue ^(1) 55 - 55 - 55

Amortization - non-purchase accounting 9 1 10 1 11

Amortization - purchase accounting - - - 39 39

Stock-based compensation 2 2 3 4 7

Other ^(2) - - - 1 1

Adjusted EBITDA 414 49 463 (21) 442

Income from discontinued operations 404

Gain on sale of discontinued operations (396)

Provision for income taxes -

Interest expense, net -

Depreciation -

Amortization -

Adjusted EBITDA - discontinued operations 9

Adjusted EBITDA - combined 451

Cash flows from operating activities - continuing operations 249

Capital expenditures (73)

Free Cash Flow 176

^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the three months ended June 30, 2020

Business

Global Global Segment Corporate Total IGT

Lottery Gaming Total and Other PLC

Loss from continuing operations (268)

Benefit from income taxes (3)

Interest expense, net 96

Foreign exchange loss, net 74

Other non-operating expense, net 28

Operating income (loss) 107 (111) (4) (69) (72)

Depreciation 50 37 87 - 88

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

Amortization - non-purchase accounting 7 2 9 1 10

Amortization - purchase accounting - - - 42 42

Restructuring 5 35 40 3 43

Stock-based compensation - - - 1 1

Other ^(2) - - - 1 1

Adjusted EBITDA 221 (36) 184 (20) 164

Loss from discontinued operations (15)

Benefit from income taxes (8)

Interest expense, net -

Depreciation 12

Amortization 14

Adjusted EBITDA - discontinued operations 4

Adjusted EBITDA - combined 167

Cash flows from operating activities - continuing operations 127

Capital expenditures (54)

Free Cash Flow 73

^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the six months ended June 30, 2021

Business

Global Global Segment Corporate Total IGT

Lottery Gaming Total and Other PLC

Income from continuing operations 100

Provision for income taxes 181

Interest expense, net 185

Foreign exchange gain, net (55)

Other non-operating expense, net 94

Operating income (loss) 637 (9) 628 (124) 504

Depreciation 96 70 166 (1) 165

Amortization - service revenue ^(1) 110 - 110 - 110

Amortization - non-purchase accounting 17 3 19 2 21

Amortization - purchase accounting - - - 79 79

Restructuring (1) 1 - - -

Stock-based compensation 2 3 5 6 11

Other ^(2) - - - 1 1

Adjusted EBITDA 862 67 929 (37) 892

Income from discontinued operations 415

Gain on sale of discontinued operations (396)

Provision for income taxes 4

Interest expense, net -

Depreciation -

Amortization -

Adjusted EBITDA - discontinued operations 23

Adjusted EBITDA - combined 915

Cash flows from operating activities - continuing operations 500

Capital expenditures (121)

Free Cash Flow 380

^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

($ in millions)

Unaudited

For the six months ended June 30, 2020

Business

Global Global Segment Corporate Total IGT

Lottery Gaming Total and Other PLC

Loss from continuing operations (515)

Benefit from income taxes (4)

Interest expense, net 196

Foreign exchange loss, net 4

Other non-operating expense, net 29

Operating income (loss) 251 (117) 135 (425) (290)

Goodwill impairment - - - 296 296

Depreciation 96 77 173 1 173

Amortization - service revenue ^(1) 101 - 101 - 101

Amortization - non-purchase accounting 14 3 17 2 19

Amortization - purchase accounting - - - 89 89

Restructuring 5 36 41 6 47

Stock-based compensation (4) (5) (9) (3) (12)

Other ^(2) - - - 2 2

Adjusted EBITDA 464 (6) 458 (33) 425

Loss from discontinued operations (1)

Benefit from income taxes (4)

Interest expense, net -

Depreciation 25

Amortization 28

Adjusted EBITDA - discontinued operations 48

Adjusted EBITDA - combined 473

Cash flows from operating activities - continuing operations 153

Capital expenditures (140)

Free Cash Flow 13

^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

The following table summarizes Adjusted EBITDA and Adjusted EBITDA - discontinued operations for the actual period end dates and LTM, and the respective net debt leverage calculations:

($ in millions) Q3'20Q4'20Q1'21Q2'21

Adjusted EBITDA 287 295 450 442

Adjusted EBITDA - discontinued operations65 26 14 9

Adjusted EBITDA - combined 352 321 464 451



LTM Adjusted EBITDA ^(1) 1,0781,0081,1961,474

LTM Adjusted EBITDA - combined ^(1)(2) 1,2601,1461,3051,588



Net debt 7,2437,3197,0696,312



Net debt leverage

LTM Adjusted EBITDA ^(3) 4.3x

LTM Adjusted EBITDA - combined ^(4) 5.7x 6.4x 5.4x 4.0x





^(1) Adjusted EBITDA was $164 million, $261 million, and $365 million for the quarters ended June 30, 2020, March 31, 2020, and December 31, 2019, respectively.

^(2) Adjusted EBITDA - discontinued operations was $4 million, $44 million, and $69 million for the quarters ended June 30, 2020, March 31, 2020, and December 31, 2019, respectively.

^(3) Net debt / LTM Adjusted EBITDA

^(4) Net debt / LTM Adjusted EBITDA - combined

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SOURCE International Game Technology PLC