PR Newswire | Nov 11, 2020 04:33PM EST

11/11 15:32 CST

International Game Technology PLC Reports Third Quarter 2020 Results- Consolidated revenue of $982 million driven by the strongest lottery same-store sales growth in seven quarters; sharp improvement from the second quarter across all major revenue sources- Delivered $285 million in cash from operating activities and $220 million in free cash flow during the third quarter; reduced net debt by $46 million as reported and $228 million at constant currency during the third quarter- Net loss of $128 million includes $149 million in foreign exchange losses, primarily non-cash; Adjusted net income was $54 million- Solid lottery profit flow-through and benefit of cost-saving actions led to $354 million in Adjusted EBITDA LONDON, Nov. 11, 2020

LONDON, Nov. 11, 2020 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported financial results for the third quarter ended September 30, 2020. Tomorrow, at 8:00 a.m. EST, management will host a conference call and webcast to present the results; access details are provided below.

"The resilience of our portfolio, particularly in lottery, and benefits from our swift cost reduction initiatives are on full display in our third quarter results," said Marco Sala, CEO of IGT. "Strong player demand and a host of compelling new games, systems, and digital solutions led to a sharp, sequential improvement in our most important markets. We continue to monitor the evolution and impact of the pandemic around the world. With a simplified organization firmly in place, we are creating a leaner, stronger IGT."

"Robust cash flow generation during the quarter and year-to-date periods have enabled us to improve our liquidity and reduce net debt," said Max Chiara, CFO of IGT. "We are on track to achieve our 2020 temporary cost-reduction targets and have identified a number of initiatives that will enable us to deliver over $200 million of structural savings over the next two years. As a result, the improvement in our profitability should support our continued focus on reducing debt."

Overview of Consolidated Third Quarter 2020 Results

Quarter Ended Y/Y Constant

September 30, ChangeCurrency

2020 2019 (%) Change (%)

(In $ millions, unless otherwise noted)

GAAP Financials:

Revenue

Global Lottery 570 552 3% 0%

Global Gaming 412 601 (31)% (34)%

Total revenue 982 1,153 (15)% (17)%



Operating income (loss)

Global Lottery 196 161 22% 17%

Global Gaming (8) 68 NA NA

Corporate support expense (18) (26) 33% 37%

Other^(1) (42) (49) 13% 13%

Total operating income 129 154 (16)% (22)%



Net (loss) income attributable to IGT PLC (128) 104 NA



Non-GAAP Financial Measures:

Adjusted net income attributable to IGT PLC 54 43 25%



Adjusted EBITDA

Global Lottery 309 270 14% 10%

Global Gaming 58 156 (63)% (65)%

Corporate support expense (13) (20) 32% 36%

Total Adjusted EBITDA 354 407 (13)% (17)%



Net debt 7,243 7,354 (2)%



^(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:

* Delivered $220 million in positive free cash flow in the quarter; generated $610 million in cash from operations and $384 million in free cash flow year-to-date * Robust player demand drives highest Global Lottery same-store sales growth and Adjusted EBITDA in seven quarters * Signed 2-year contract extension with New York Lottery * Recently awarded 7-year contracts with Poland and Nebraska Lotteries following competitive bid processes * Sharp, sequential improvement in Global Gaming revenue and profit following acute impact of the pandemic in the second quarter * 41% increase in Digital & Betting revenue; launched full-service, in-house U.S. sports betting trading team in the third quarter and recently established new partnerships with Boyd Gaming and the National Basketball Association (NBA) * Awarded three spots on Casino Journal's esteemed "Top 20 Most Innovative Gaming Technology Products Awards," the most of any gaming supplier * Cashless solutions gaining traction as Resort Wallet(tm) launched at Resorts World Catskills

Financial highlights:

Third quarter 2020 results reflect the continued, global impact of the COVID-19 pandemic, but at a lower level compared to the second quarter

Resilient consolidated revenue of $982 million, down 15% from the prior year

* Global Lottery revenue of $570 million, up 3%, driven by double-digit growth in North America same-store sales * Global Gaming revenue totals $412 million, down 31% on pandemic-related closures and restrictions; positive sequential trends as casinos re-open and installed base is gradually reactivated

Operating income of $129 million, compared to $154 million in the prior year

* Benefit of disciplined cost-saving actions * Global Lottery same-store sales growth translates into high profit flow-through * Contribution from Global Gaming impacted by $36 million higher bad debt and obsolescence charges, primarily due to the protracted pandemic slow-down in business activities

Net interest expense of $101 million compared to $103 million in the prior year

Benefit from income taxes of $27 million, compared to a provision for income taxes of $45 million, driven by lower pre-tax income and the tax impact of significant foreign exchange losses in the third quarter of 2020 versus significant foreign exchange gains in the prior-year period

Net loss attributable to IGT was $128 million; adjusted net income attributable to IGT of $54 million compared to adjusted net income of $43 million in the prior year

* Net loss includes $149 million in non-cash foreign exchange loss, primarily on Euro-denominated debt instruments

Net loss per diluted share of $0.62; adjusted net income per diluted share of $0.26 compared to adjusted net income per diluted share of $0.21 in the prior year

Adjusted EBITDA of $354 million compared to $407 million in the prior-year period

* Benefit from previously mentioned cost-saving actions * Global Lottery achieves highest segment-level Adjusted EBITDA in seven quarters

Net debt of $7.24 billion compared to $7.38 billion at December 31, 2019; Net debt to LTM adjusted EBITDA of 5.72x up from 4.31x at December 31, 2019, due to pandemic's impact on EBITDA in the first nine months of 2020

Cash and Liquidity Update

* At September 30, 2020, liquidity totaled $2.55 billion, an improvement from the second quarter level on strong cash flow generation; comprised of $943 million in unrestricted cash and $1.61 billion available under revolving credit facilities

Conference Call and Webcast:

November 12, 2020, 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: 9189642 * 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: 9189642

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 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, 2019 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.

Consolidated Adjusted EBITDA represents net income (loss) (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. Adjusted net (loss) income attributable to IGT PLC represents Net (loss) income attributable to IGT PLC before foreign exchange, purchase accounting depreciation and amortization, restructuring expenses, loss on extinguishment of debt and certain other non-recurring items. Adjusted Diluted EPS represents Adjusted net (loss) income attributable to IGT PLC per weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the IGT PLC share-based payment awards, when inclusion is not antidilutive. Other non-recurring items are discrete, infrequent in nature and are not reflective of on-going operational activities. 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 equivalent 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. 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.

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)

% Change % Change Q3'20 Q3'19 GLOBAL LOTTERY As ReportedAt Constant FX

Revenue

Service

Operating and facilities management contracts 525 502 5% 1%

Upfront license fee amortization (52) (48) (7)% 0%

Operating and facilities management contracts, net474 454 4% 2%

Other 76 66 15% 9%

Total service revenue 549 520 6% 3%



Product sales 20 33 (38)% (38)%

Total revenue 570 552 3% 0%



Operating income 196 161 22% 17%

Adjusted EBITDA 309 270 14% 10%



Global same-store sales growth (%)

Instant ticket & draw games 10.6%

Multi-jurisdiction jackpots (14.3)%

Total 8.7%



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

Instant ticket & draw games 15.0%

Multi-jurisdiction jackpots (14.3)%

Total 12.1%



Italy same-store sales growth (%)

Instant ticket & draw games (3.5)%







% Change % Change Q3'20 Q3'19 GLOBAL GAMING As ReportedAt Constant FX

Revenue

Service

Terminal 193 276 (30)% (33)%

Systems, software, and other 138 126 10% 6%

Total service revenue 331 402 (18)% (21)%



Product sales

Terminal 49 139 (64)% (65)%

Other 32 60 (47)% (48)%

Total product sales revenue 81 199 (59)% (60)%

Total revenue 412 601 (31)% (34)%



Operating (loss) income (8) 68 NA NA

Adjusted EBITDA 58 156 (63)% (65)%



Installed base units

Casino 48,280 51,592 (6)%

Casino - L/T lease^ (1) 1,102 - NA

Italy VLT - Operator (B2C) 10,845 10,984 (1)%

Italy VLT - Supplier (B2B) 7,112 7,514 (5)%

Italy AWP 36,279 41,129 (12)%

Total installed base units 103,618111,219(7)%



Installed base units (by geography)

US & Canada 34,584 37,260 (7)%

Rest of world 14,798 14,332 3%

Subtotal 49,382 51,592 (4)%

Italy 54,236 59,627 (9)%

Total installed base units 103,618111,219(7)%



Yields (by geography)^(2), in absolute $

US & Canada $26.79 $41.31 (35)%

Rest of world (ex-Italy) $4.31 $8.04 (46)%

Total yields (ex-Italy) $19.88 $32.06 (38)%



Global machine units sold

New/expansion 818 1,001 (18)%

Replacement 2,853 9,190 (69)%

Total machine units sold 3,671 10,191 (64)%



US & Canada machine units sold

New/expansion 667 791 (16)%

Replacement 2,007 4,150 (52)%

Total machine units sold 2,674 4,941 (46)%



^(1) Excluded from yield calculations due to treatment as sales-type leases

^(2) Excludes Casino L/T lease units due to treatment as sales-type leases

% Change % Change Q3'20 Q3'19 GLOBAL GAMING (Continued) As ReportedAt Constant FX

Rest of world machine units sold

New/expansion 151 210 (28)%

Replacement 846 5,040 (83)%

Total machine units sold 997 5,250 (81)%



Average Selling Price (ASP), in absolute $

US & Canada 13,800 14,800 (7)%

Rest of world 12,100 11,800 3%

Total ASP 13,300 13,300 0%



Gaming Systems Revenue 32 53 (41)%



Italy Wagers ((eu))

VLT (B2C) 940 1,324 (29)%

AWP 711 877 (19)%



Italy sports betting wagers ((eu)) 237 227 5%

Italy sports betting payout (%) 83.0% 83.4% 0%











% Change % Change Q3'20 Q3'19 CONSOLIDATED As ReportedAt Constant FX

Revenue (by geography)

US & Canada 443 538 (18)% (18)%

Italy 416 402 3% (4)%

Rest of world 123 213 (42)% (43)%

Total revenue 982 1,153 (15)% (17)%



Digital & Betting Revenue ^(1) 104 74 41% 35%



^(1) Included within consolidated revenue

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited



For the three months endedFor the nine months ended

September 30, September 30,

2020 2019 2020 2019

Service revenue 880,133 921,712 2,223,772 2,892,774

Product sales 101,377 231,535 335,417 639,642

Total revenue 981,510 1,153,2472,559,189 3,532,416



Cost of services 541,118 575,594 1,479,605 1,765,519

Cost of product sales 81,516 136,246 239,822 397,217

Selling, general and administrative 180,315 201,416 515,858 616,516

Research and development 48,039 68,804 140,111 200,305

Restructuring (98) 16,152 46,955 21,853

Goodwill impairment - - 296,000 -

Other operating expense (income), net 2,118 1,153 3,721 (24,743)

Total operating expenses 853,008 999,365 2,722,072 2,976,667



Operating income (loss) 128,502 153,882 (162,883) 555,749



Interest expense, net (101,023) (102,551)(297,284) (309,480)

Foreign exchange (loss) gain, net (149,403) 124,068 (153,427) 141,609

Other (expense) income, net (7,031) (308) (39,791) 22,687

Total non-operating (expenses) income (257,457) 21,209 (490,502) (145,184)



(Loss) income before (benefit from) provision for income (128,955) 175,091 (653,385) 410,565 taxes



(Benefit from) provision for income taxes (26,617) 44,530 (34,806) 160,522



Net (loss) income (102,338) 130,561 (618,579) 250,043



Less: Net income attributable to non-controlling interests25,652 26,998 37,315 101,370



Net (loss) income attributable to IGT PLC (127,990) 103,563 (655,894) 148,673



Net (loss) income attributable to IGT PLC per common share(0.62) 0.51 (3.20) 0.73 - basic

Net (loss) income attributable to IGT PLC per common share(0.62) 0.51 (3.20) 0.73 - diluted



Weighted-average shares - basic 204,857 204,435 204,680 204,352

Weighted-average shares - diluted 204,857 204,528 204,680 204,532

International Game Technology PLC

Consolidated Balance Sheets

($ thousands)

Unaudited



September 30,December 31,

2020 2019

Assets

Current assets:

Cash and cash equivalents 943,346 662,934

Restricted cash and cash equivalents 196,252 231,317

Trade and other receivables, net 828,459 1,006,127

Inventories 183,220 161,790

Other current assets 556,607 571,869

Total current assets 2,707,884 2,634,037

Systems, equipment and other assets related to contracts, net1,180,511 1,307,940

Property, plant and equipment, net 129,636 146,055

Operating lease right-of-use assets 332,121 341,538

Goodwill 5,188,657 5,451,494

Intangible assets, net 1,672,750 1,836,002

Other non-current assets 1,779,807 1,927,524

Total non-current assets 10,283,482 11,010,553

Total assets 12,991,366 13,644,590



Liabilities and shareholders' equity

Current liabilities:

Accounts payable 1,116,854 1,120,922

Current portion of long-term debt 374,656 462,155

Short-term borrowings 4 3,193

Other current liabilities 1,006,658 882,081

Total current liabilities 2,498,172 2,468,351

Long-term debt, less current portion 7,821,723 7,600,169

Deferred income taxes 272,555 366,822

Operating lease liabilities 305,805 310,721

Other non-current liabilities 372,428 413,549

Total non-current liabilities 8,772,511 8,691,261

Total liabilities 11,270,683 11,159,612

Commitments and contingencies

Shareholders' equity 1,720,683 2,484,978

Total liabilities and shareholders' equity 12,991,366 13,644,590

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited



For the three months endedFor the nine months ended

September 30, September 30,

2020 2019 2020 2019

Cash flows from operating activities

Net (loss) income (102,338) 130,561 (618,579) 250,043

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

Depreciation 102,578 106,020 300,826 315,291

Goodwill impairment - - 296,000 -

Amortization 65,624 69,960 201,581 207,161

Amortization of upfront license fees 54,229 50,695 155,576 154,630

Foreign exchange loss (gain), net 149,403 (124,068) 153,427 (141,609)

(Gain) loss on extinguishment of debt (10) 2,336 28,267 11,964

Debt issuance cost amortization 5,451 5,481 15,748 17,004

Loss (gain) on sale of assets 389 (2,085) 455 (65,324)

Stock-based compensation 1,103 7,544 (10,703) 20,046

Deferred income taxes (69,815) (3,925) (106,520) 2,590

Other non-cash items, net 2,621 17,339 5,125 48,731

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

Trade and other receivables 58,553 (32,513) 198,131 16,546

Inventories (3,457) 23,073 (9,435) 23,875

Accounts payable (17,984) 57,928 (23,646) 611

Other assets and liabilities 38,867 (111,362) 24,060 (72,854)

Net cash provided by operating activities 285,214 196,984 610,313 788,705



Cash flows from investing activities

Capital expenditures (65,668) (101,713) (225,847) (332,716)

Proceeds from sale of assets 1,272 35,314 6,457 100,743

Other 1,540 3,581 12,437 6,126

Net cash used in investing activities (62,856) (62,818) (206,953) (225,847)



Cash flows from financing activities

Principal payments on long-term debt (579,175) (431,518) (959,275) (1,264,647)

Payments in connection with extinguishment of debt- - (25,000) (8,598)

Payments of debt issuance costs (1,863) (18,853) (21,479) (24,787)

Net payments of short-term borrowings (82,537) (54,092) (7,610) (34,519)

Proceeds from long-term debt - 550,050 895,896 1,397,025

Net receipts from financial liabilities 59,230 12,148 95,698 753

Dividends paid - (40,887) (40,887) (122,616)

Dividends paid - non-controlling interests (44,516) (6,290) (135,892) (135,684)

Return of capital - non-controlling interests - (9,985) - (80,384)

Capital increase - non-controlling interests 1,304 294 3,334 1,369

Other (2,540) (1,065) (8,598) (7,798)

Net cash used in financing activities (650,097) (198) (203,813) (279,886)



Net (decrease) increase in cash and cash equivalents and restricted cash and cash (427,739) 133,968 199,547 282,972 equivalents

Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash 37,575 (27,343) 45,800 (31,091) equivalents

Cash and cash equivalents and restricted cash and 1,529,762 657,033 894,251 511,777 cash equivalents at the beginning of the period

Cash and cash equivalents and restricted cash and 1,139,598 763,658 1,139,598 763,658 cash equivalents at the end of the period



Supplemental Cash Flow Information

Interest paid (141,263) (160,256) (372,127) (371,847)

Income taxes paid (41,637) (88,232) (59,432) (138,009)

International Game Technology PLC

Net Debt

($ thousands)

Unaudited



September 30,December 31,

2020 2019

6.250% Senior Secured U.S. Dollar Notes due February 2022 1,004,662 1,491,328

4.750% Senior Secured Euro Notes due February 2023 989,909 948,382

5.350% Senior Secured U.S. Dollar Notes due October 2023 60,811 60,885

3.500% Senior Secured Euro Notes due July 2024 581,534 557,331

6.500% Senior Secured U.S. Dollar Notes due February 2025 1,091,210 1,089,959

3.500% Senior Secured Euro Notes due June 2026 871,151 835,105

6.250% Senior Secured U.S. Dollar Notes due January 2027 743,958 743,387

2.375% Senior Secured Euro Notes due April 2028 580,333 556,403

5.250% Senior Secured U.S. Dollar Notes due January 2029 743,004 -

Senior Secured Notes 6,666,572 6,282,780



Euro Term Loan Facility due January 2023 994,835 1,317,389

U.S. Dollar Revolving Credit Facility A due July 2024 160,316 -

Long-term debt, less current portion 7,821,723 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 374,656 -

Current portion of long-term debt 374,656 462,155



Short-term borrowings 4 3,193

Total debt 8,196,383 8,065,517



Less: Cash and cash equivalents 943,346 662,934

Less: Debt issuance costs, net - Euro Revolving Credit Facility B due July 202410,422 20,464



Net debt 7,242,615 7,382,119



Note: Net debt is a non-GAAP financial measure

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited



For the three months ended September 30, 2020

Operating

Global Global Segment CorporateTotal

Lottery Gaming Total and OtherIGT PLC

Net loss (102,338)

Benefit from income taxes (26,617)

Interest expense, net 101,023

Foreign exchange loss, net 149,403

Other non-operating expense, net 7,031

Operating income (loss) 195,766(7,550)188,216 (59,714)128,502

Depreciation 51,248 51,007 102,255 323 102,578

Amortization - service revenue ^(1) 54,229 - 54,229 - 54,229

Amortization - non-purchase accounting 7,926 15,178 23,104 762 23,866

Amortization - purchase accounting - - - 41,758 41,758

Restructuring (52) (428) (480) 382 (98)

Stock-based compensation 81 71 152 951 1,103

Other ^(2) - - - 2,118 2,118

Adjusted EBITDA 309,19858,278 367,476 (13,420)354,056



Cash flows from operating activities 285,214

Capital expenditures (65,668)

Free Cash Flow 219,546



Net loss attributable to IGT PLC (127,990)

Foreign exchange loss, net 149,403

42,069 Depreciation and amortization - purchase accounting

Restructuring (98)

Gain on extinguishment of debt (10)

Other ^(2) 2,118

Income tax impact on adjustments^ (3) (11,167)

Adjusted net income attributable to IGT PLC 54,325

Weighted-average shares - diluted 204,857

Adjusted weighted-average shares - diluted^ (4) 205,013

Net loss attributable to IGT PLC per common share - (0.62) diluted

Adjusted net income attributable to IGT PLC per 0.26 common share - diluted



^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

^(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated

^(4) Adjusted weighted-average shares - diluted includes shares that were excluded from the GAAP computation, due to the net loss as reported

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited



For the three months ended September 30, 2019

Operating

Global Global Segment CorporateTotal

Lottery Gaming Total and OtherIGT PLC

Net income 130,561

Provision for income taxes 44,530

Interest expense, net 102,551

Foreign exchange gain, net (124,068)

Other non-operating expense, net 308

Operating income (loss) 160,82068,025 228,845 (74,963)153,882

Depreciation 50,099 55,160 105,259 761 106,020

Amortization - service revenue ^(1) 50,695 - 50,695 - 50,695

Amortization - non-purchase accounting 6,843 14,415 21,258 754 22,012

Amortization - purchase accounting - - - 47,948 47,948

Restructuring 211 16,283 16,494 (342) 16,152

Stock-based compensation 1,582 2,126 3,708 3,836 7,544

Other ^(2) - 432 432 2,391 2,823

Adjusted EBITDA 270,250156,441426,691 (19,615)407,076



Cash flows from operating activities 196,984

Capital expenditures (101,713)

Free Cash Flow 95,271



Net income attributable to IGT PLC 103,563

Foreign exchange gain, net (124,068)

48,580 Depreciation and amortization - purchase accounting

Restructuring 16,152

Loss on extinguishment of debt 2,336

Other ^(2) 2,823

Income tax impact on adjustments^ (3) (6,041)

Adjusted net income attributable to IGT PLC 43,345

Weighted-average shares - diluted 204,528

Adjusted weighted-average shares - diluted 204,528

Net income attributable to IGT PLC per common share 0.51 - diluted

Adjusted net income attributable to IGT PLC per 0.21 common share - diluted



^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

^(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated

International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited



For the nine months ended September 30, 2020

Operating

Global Global Segment Corporate Total

Lottery Gaming Total and Other IGT PLC

Net loss (618,579)

Benefit from income taxes (34,806)

Interest expense, net 297,284

Foreign exchange loss, net 153,427

Other non-operating expense, net 39,791

Operating income (loss) 446,965(124,787)322,178 (485,061)(162,883)

Goodwill impairment - - - 296,000 296,000

Depreciation 147,055152,670 299,725 1,101 300,826

Amortization - service revenue ^(1) 155,576- 155,576 - 155,576

Amortization - non-purchase accounting 22,006 46,726 68,732 2,341 71,073

Amortization - purchase accounting - - - 130,508 130,508

Restructuring 5,332 35,430 40,762 6,193 46,955

Stock-based compensation (3,713)(5,063) (8,776) (1,927) (10,703)

Other ^(2) - - - 3,623 3,623

Adjusted EBITDA 773,221104,976 878,197 (47,222) 830,975



Cash flows from operating activities 610,313

Capital expenditures (225,847)

Free Cash Flow 384,466



Net loss attributable to IGT PLC (655,894)

Foreign exchange loss, net 153,427

Goodwill impairment 296,000

131,442 Depreciation and amortization - purchase accounting

Restructuring 46,955

Loss on extinguishment of debt 23,250

Other ^(2) 3,623

Income tax impact on adjustments^ (3) (49,430)

Adjusted net loss attributable to IGT PLC (50,627)

Weighted-average shares - diluted 204,680

Adjusted weighted-average shares - diluted 204,680

Net loss attributable to IGT PLC per common share - (3.20) diluted

Adjusted net loss attributable to IGT PLC per (0.25) common share - diluted



^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

^(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated



International Game Technology PLC

Reconciliation of Non-GAAP Financial Measures

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

Unaudited



For the nine months ended September 30, 2019

Operating

Global Global Segment Corporate Total

Lottery Gaming Total and Other IGT PLC

Net income 250,043

Provision for income taxes 160,522

Interest expense, net 309,480

Foreign exchange gain, net (141,609)

Other non-operating income, net (22,687)

Operating income (loss) 542,913239,940782,853 (227,104)555,749

Depreciation 147,461165,490312,951 2,340 315,291

Amortization - service revenue ^(1) 154,629- 154,629 - 154,629

Amortization - non-purchase accounting 18,175 43,090 61,265 2,231 63,496

Amortization - purchase accounting - - - 143,666 143,666

Restructuring 1,003 16,959 17,962 3,891 21,853

Stock-based compensation 3,854 5,088 8,942 11,104 20,046

Other ^(2) - 432 432 2,296 2,728

Adjusted EBITDA 868,035470,9991,339,034(61,576) 1,277,458



Cash flows from operating activities 788,705

Capital expenditures (332,716)

Free Cash Flow 455,989



Net income attributable to IGT PLC 148,673

Foreign exchange gain, net (141,609)

145,562 Depreciation and amortization - purchase accounting

Restructuring 21,853

Loss on extinguishment of debt 11,964

Other ^(2) 2,728

Income tax impact on adjustments^ (3) (30,819)

Adjusted net income attributable to IGT PLC 158,352

Weighted-average shares - diluted 204,532

Adjusted weighted-average shares - diluted 204,532

Net income attributable to IGT PLC per common share 0.73 - diluted

Adjusted net income attributable to IGT PLC per 0.77 common share - diluted



^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

^(3) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated



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SOURCE International Game Technology PLC