PR Newswire | Aug 4, 2020 06:46AM EDT

08/04 05:45 CDT

International Game Technology PLC Reports Second Quarter 2020 Results- Results highlight value of diverse business portfolio, global reach, resilience of lottery, and swift response to unprecedented conditions- Liquidity and net debt improved on positive cash flow performance; generated $168 million in cash from operating activities and $107 million in free cash flow during the second quarter- Net loss of $280 million; adjusted net loss of $121 million- Delivered $168 million in adjusted EBITDA with important contribution from strict cost discipline- On track to achieve $500 million in 2020 cost reduction/avoidance; identified over $200 million in longer-term, structural and discretionary cost savings LONDON, Aug. 4, 2020

LONDON, Aug. 4, 2020 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported financial results for the second quarter ended June 30, 2020. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

"Our second quarter results reflect the intense impact of global lockdowns caused by the pandemic," said Marco Sala, CEO of IGT. "That said, thanks to strong North America Lottery performance and our swift adoption of cost-saving and avoidance measures, we delivered better cash flow than we expected back in May. Our resilience is a direct consequence of the diversity of our global portfolio of products and solutions. The improving trends we are currently seeing are encouraging, but we remain prudent with our planning. Our new organizational structure enhances our readiness to adapt to changes in market conditions."

"Cash generation and liquidity remain our top financial priority," said Max Chiara, CFO of IGT. "The proactive efficiency initiatives and focused capital markets activity we executed in the quarter have us tracking ahead of plan on all key measures and we expect to deliver positive free cash flow this fiscal year. We have the resources we need to navigate the impact COVID-19 is having on our business and we are making important, strategic decisions to enhance our operational flexibility. This includes over $200 million in structural and discretionary cost savings compared to pre-pandemic levels."

Overview of Consolidated Second Quarter 2020 Results

Quarter Ended Y/Y Constant June 30, Change Currency Change

2020 2019 (%) (%)

(In $ millions, unless otherwise noted)

Revenue 637 1,234 -48% -48%

Operating (loss)/income (94) 224 NM

Net (loss)/income per diluted share ($1.37) $0.02 NM

Adjusted EBITDA 168 454 -63% -63%

Adjusted net (loss)/income per diluted share ($0.59) $0.44 NM

Net debt 7,289 7,637 -5%

Note: Adjusted EBITDA and adjusted net (loss)/income per diluted share are non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release.

Second quarter 2020 results reflect the impact of global COVID-19 restrictions. Revenue was down across all business segments and all primary revenue streams except for digital activities, where revenue increased 35%. Progressive easing of restrictions during the quarter and cost-saving initiatives helped mitigate impact.

Financial highlights:

Consolidated revenue of $637 million, down 48% from the prior year

* Global gaming revenue declined 72%, driven by the closure of casinos and gaming halls, fewer unit shipments, and lower systems and software sales compared to the prior year * Global lottery revenue down 26% on reduced traffic to points of sale and temporary game shutdowns in Italy * Gaming and lottery trends improved each month as venues re-opened and restrictions eased

Operating loss of $94 million, down from income of $224 million in the prior year

* Lower profit contribution from reduced business volumes * Includes $43 million in restructuring expense * Oklahoma strategic transaction and high-margin poker and systems sales embedded in the prior year * Accelerating benefit from actions taken to reduce costs

Net interest expense of $96 million compared to $104 million in the prior year

* Capital market transactions drive lower cost of debt

Benefit from income taxes of $11 million, compared to a provision of $63 million, driven by lower pre-tax income

Net loss attributable to IGT was $280 million; adjusted net loss attributable to IGT of $121 million versus adjusted net income of $91 million in the prior year

* Reflects operating loss and higher foreign exchange and debt extinguishment losses in the current year

Net loss per diluted share of $1.37; adjusted net loss per diluted share of $0.59 compared to adjusted net income of $0.44 in the prior year

Adjusted EBITDA of $168 million compared to $454 million in the prior-year period

Net debt of $7.29 billion improved $93 million from $7.38 billion at December 31, 2019; Net debt to LTM adjusted EBITDA of 5.52x, up from 4.31x at December 31, 2019, primarily due to lower EBITDA in the first half of 2020

Cash and Liquidity Update

* Preserving cash and liquidity is the top financial priority * At June 30, 2020, liquidity totalled $2.3 billion, comprised of $1.3 billion in unrestricted cash and $1.0 billion available under revolving credit facilities

Other Developments

* In an effort to accelerate the Company's response to market conditions, over $200 million has been identified in structural cost savings compared to pre-pandemic levels. These savings are mostly expected in 2021 and to come from: * Eliminating duplicative functions and streamlining back-office activities * Optimizing the global investment in technology to focus on value-accretive know-how * Rationalizing R&D based on disciplined risk/return priorities * Optimizing our supply chain for maximum cost efficiency

* Issuance of $750 million 5.25% Notes due 2029, as previously announced * $500 million of net proceeds used to fund a partial tender of 6.25% Notes due 2022 * Lowest USD-denominated coupon ever issued by the Company * Longest duration issuance since 2015

Conference Call and Webcast

August 4, 2020, 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: +1 844 842 7999 * Outside the US/Canada toll-free number: +1 612 979 9887 * Conference ID/confirmation code: 4889985 * 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: 4889985

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 12,000 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 uncertainty of the duration, extent, and effects of the COVID-19 pandemic and the response of governments, including government-mandated property closures and travel restrictions, and other third parties on the Company's business, results of operations, cash flows, liquidity and development prospects and 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.

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

Second Quarter Operating Segment Review

North America Gaming & Interactive

Select Financial Data As Constant Key Performance Indicators %

3 Month Period Ended June 30th Q2 '20 Q2 '19 Reported FX 3 Month Period Ended June 30th Q2 '20 Q2 '19 Change

Total revenue 92 268 -66% -66% Installed base units (end of period)

Gaming services 47 165 -72% -72% Casino 18,410 21,073 -12.6%

Terminal 22 106 -79% -79% Casino - L/T lease ^(1) 930 -

Gaming Other 25 59 -58% -58% Total Installed base units 19,340 21,073 -8.2%

Product sales 45 104 -56% -56% (1) Yield calculations should exclude these units due to

Terminal 40 73 -45% -45% accounting treatment as sales-type leases

Other 5 30 -84% -84%

Machine units shipped

Total revenue 4 6 -30% -30% New/expansion 1,382 438 215.5%

Other Service revenue 4 6 -35% -35% Replacement 1,344 4,223 -68.2%

Product revenue 0 0 0% 0% Total machines shipped 2,726 4,661 -41.5%

Revenue 96 274 -65% -65%Total Operating (Loss)/Income (20) 85 NM NM

Revenue of $96 million, down from $274 million in the prior-year period

* Gaming service revenue of $47 million * Casino closures impact terminal revenue * Drop in other revenue reflects multi-year poker license in the prior year

* Gaming product sales revenue of $45 million * New/expansion shipments driven by 977 historical horse racing units * Shipped 1,344 replacement units * Systems revenue down from high level in the prior year

Operating loss of $20 million compared to operating income of $85 million in the prior year

* Impact of casino closures * Oklahoma strategic transaction and high-margin poker and systems sales in the prior year * Partly offset by benefit from cost-saving initiatives

North America Lottery

Select Financial Data As Constant Key Performance Indicators %

3 Month Period Ended June 30th Q2 '20 Q2 '19 Reported FX 3 Month Period Ended June 30th Q2 '20 Q2 '19 Change

Total revenue 20 37 -47% -46% Installed base units (end of period)

Gaming services 19 37 -48% -47% VLT - Government sponsored 13,559 14,215 -4.6%

Gaming Terminal 1 25 -94% -94%

Other 18 12 45% 48% Lottery same-store revenue growth

Product sales 1 1 17% 17% Instant ticket & draw games 10.5%

Multistate jackpots -28.0%

Total revenue 254 270 -6% -6% Total lottery same-store revenue growth 6.2%

Lottery services 234 238 -2% -2%

FMC 214 202 6% 6%

Lottery Instant ticket & draw games 184 168 9% 9%

Other services 29 34 -13% -13%

LMA 20 36 -43% -43%

Product sales 19 32 -40% -40%

Total revenue 0 1 -87% -87%Other Service revenue 0 1 -87% -87%

Revenue 273 309 -12% -11%Total Operating income 75 78 -4% -3%

Revenue of $273 million, down from $309 million in the prior-year period

* Lottery service revenue of $234 million, down 2% * Strong double-digit same-store revenue growth for instant ticket & draw games nearly offsets impact of mobility restrictions and lower jackpot activity * LMA revenue reflects reduced play levels in NJ and lower pass-through revenue

* Gaming service revenue impacted by closure of VLT venues, partly offset by growth in Canada iGaming * Product sales revenue reflects lower systems revenue

Operating income of $75 million compared to $78 million in the prior year

* Same-store revenue growth and cost-saving initiatives mostly offset lower gaming and LMA contributions

International

Select Financial Data As Constant Key Performance Indicators %

3 Month Period Ended June 30th Q2 '20 Q2 '19 Reported FX 3 Month Period Ended June 30th Q2 '20 Q2 '19 Change

Total revenue 21 142 -85% -85% Installed base units (end of period)

Gaming services 12 28 -57% -56% Casino 9,724 10,039 -3.1%

Terminal 1 12 -95% -94% VLT - Government sponsored 5,110 4,436 15.2%

Gaming Other 11 16 -28% -25% Total installed base units 14,834 14,475 2.5%

Product sales 9 114 -92% -92%

Terminal 4 82 -95% -95% Machine units shipped

Other 6 33 -83% -83% New/expansion 61 700 -91.3%

Replacement 208 5,863 -96.5%

Total revenue 55 70 -22% -19% Total machines shipped 269 6,563 -95.9%

Lottery services 52 67 -22% -19%

FMC 52 67 -22% -19% Lottery same-store revenue growthLottery Instant ticket & draw games 34 53 -35% -33% Instant ticket & draw games -28.2%

Other services 18 14 27% 34% Multistate jackpots -7.8%

Product sales 2 3 -22% -21% Total lottery same-store revenue growth -27.1%

Total revenue 7 17 -55% -48%

Other Service revenue 7 16 -55% -48%

Product sales 0 0 -65% -64%

Revenue 84 229 -64% -62%Total Operating (Loss)/Income (20) 30 NM NM

Revenue of $84 million, down from $229 million in the prior-year period

* Lottery service revenue of $52 million * Same-store revenue growth impacted by mobility restrictions and shutdown of games in certain markets; trends progressively improving as restrictions ease

* Gaming product sales of $9 million * Fewer unit shipments, primarily in Latin America, impact terminal revenue; VLT shipments to Sweden in prior year * Other product sales reflect Italy AWP upgrades in the prior year

* Gaming service revenue lower on casino closures; installed base stable

Operating loss of $20 million compared to operating income of $30 million in the prior year

* Impact of lower unit volume and revenue mix * Partly offset by benefit from cost-saving initiatives

Italy

Select Financial Data As Constant Key Performance Indicators %

3 Month Period Ended June 30th Q2 '20 Q2 '19 Reported FX 3 Month Period Ended June 30th Q2 '20 Q2 '19 Change

Total revenue 33 153 -78% -78% (In (eu) millions, except machines)

Gaming services 33 153 -78% -78% Lottery

Gaming Terminal 12 136 -91% -91% Lotto wagers 914 2,064 -55.7%

Other 21 17 25% 27% 10eLotto 610 1,507 -59.5%

Product sales 0 0 -98% -98% Core 256 479 -46.5%

Late numbers 21 31 -32.4%

Total revenue 86 190 -55% -55% MillionDAY 26 47 -43.6%

Lottery services 86 190 -55% -55%

FMC 86 190 -55% -55% Scratch & Win wagers 1,649 2,257 -27.0%Lottery Instant ticket & draw games 133 238 -44% -44%

Other services (47) (48) -1% 0% Italy lottery revenue growth -54.8%

Product sales 0 0 0% 0%

Gaming

Total revenue 66 79 -17% -15% Installed base (end of period)

Other Service revenue 66 79 -17% -15% VLT - Operator (B2C) 10,844 10,929 -0.8%

Product sales 0 0 0% 0% VLT - Supplier (B2B) 7,253 7,524 -3.6%

AWP 37,138 40,268 -7.8%

Revenue 184 422 -56% -56% Total installed base 55,235 58,721 -5.9%Total Operating (Loss)/Income (7) 133 NM NM

Wagers

VLT - Operator (B2C) 150 1,427 -89.5%

AWP 83 916 -90.9%

Interactive wagers (gaming) 729 508 43.7%

Other

Sports betting wagers ^(1) 79 252 -68.5%

Sports betting payout (%) ^(1) 88.1% 82.2% 5.9 pp

(1) Includes virtual wagers and pools & horses

Revenue of $184 million, down from $422 million in the prior-year period

* Lottery service revenue reflects timing of game reopening and points of sale restrictions; trends improve each month in the quarter * Gaming service revenue reflects closure of gaming halls * Interactive wagers rise 44% * Commercial services revenue higher, more than offset by lower sports betting activity

Operating loss of $7 million compared to operating income of $133 million in the prior year

* Impact of COVID-19 restrictions * Partly offset by benefit from cost-saving initiatives

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited

For the three months ended

June 30,

2020 2019

Service revenue 560,338 980,031

Product sales 77,146 254,222

Total revenue 637,484 1,234,253

Cost of services 416,660 594,598

Cost of product sales 67,207 160,786

Selling, general and administrative 171,950 213,263

Research and development 31,335 65,383

Restructuring expense 43,429 2,412

Other operating expense (income), net 1,009 (25,904)

Total operating expenses 731,590 1,010,538

Operating (loss) income (94,106) 223,715

Interest expense, net (95,599) (103,860)

Foreign exchange loss, net (74,384) (41,061)

Other (expense) income, net (29,374) 23,493

Total non-operating expenses (199,357) (121,428)

(Loss) income before (benefit from) provision for income taxes (293,463) 102,287

(Benefit from) provision for income taxes (11,321) 63,300

Net (loss) income (282,142) 38,987

Less: Net (loss) income attributable to non-controlling interests (2,526) 34,131

Net (loss) income attributable to IGT PLC (279,616) 4,856

Net (loss) income attributable to IGT PLC per common share - basic (1.37) 0.02

Net (loss) income attributable to IGT PLC per common share - diluted (1.37) 0.02

Weighted-average shares - basic 204,748 204,407

Weighted-average shares - diluted 204,748 204,412

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited

For the six months ended

June 30,

2020 2019

Service revenue 1,343,639 1,971,062

Product sales 234,040 408,107

Total revenue 1,577,679 2,379,169

Cost of services 938,487 1,189,925

Cost of product sales 158,306 260,971

Selling, general and administrative 335,543 415,100

Research and development 92,072 131,501

Restructuring expense 47,053 5,701

Goodwill impairment ^(1) 296,000 -

Other operating expense (income), net 1,603 (25,896)

Total operating expenses 1,869,064 1,977,302

Operating (loss) income (291,385) 401,867

Interest expense, net (196,261) (206,929)

Foreign exchange (loss) gain, net (4,024) 17,541

Other (expense) income, net (32,760) 22,995

Total non-operating expenses (233,045) (166,393)

(Loss) income before (benefit from) provision for income taxes (524,430) 235,474

(Benefit from) provision for income taxes (8,189) 115,992

Net (loss) income (516,241) 119,482

Less: Net income attributable to non-controlling interests 11,663 74,372

Net (loss) income attributable to IGT PLC (527,904) 45,110

Net (loss) income attributable to IGT PLC per common share - basic (2.58) 0.22

Net (loss) income attributable to IGT PLC per common share - diluted (2.58) 0.22

Weighted-average shares - basic 204,591 204,309

Weighted-average shares - diluted 204,591 204,532

^(1) Reduces the carrying value of the International and North America Gaming &Interactive segments by $193 million and $103 million, respectively

International Game Technology PLC

Consolidated Balance Sheets

($ thousands)

Unaudited

June 30, December 31,

2020 2019

Assets

Current assets:

Cash and cash equivalents 1,346,741 662,934

Restricted cash and cash equivalents 183,021 231,317

Trade and other receivables, net 860,351 1,006,127

Inventories 173,022 161,790

Other current assets 574,549 571,869

Total current assets 3,137,684 2,634,037

Systems, equipment and other assets related to contracts, net 1,214,903 1,307,940

Property, plant and equipment, net 139,634 146,055

Operating lease right-of-use-assets 336,561 341,538

Goodwill 5,150,931 5,451,494

Intangible assets, net 1,722,325 1,836,002

Other non-current assets 1,791,246 1,927,524

Total non-current assets 10,355,600 11,010,553

Total assets 13,493,284 13,644,590

Liabilities and shareholders' equity

Current liabilities:

Accounts payable 1,103,975 1,120,922

Current portion of long-term debt 358,336 462,155

Short-term borrowings 79,291 3,193

Other current liabilities 939,440 882,081

Total current liabilities 2,481,042 2,468,351

Long-term debt, less current portion 8,198,124 7,600,169

Deferred income taxes 331,919 366,822

Operating lease liabilities 309,556 310,721

Other non-current liabilities 378,515 413,549

Total non-current liabilities 9,218,114 8,691,261

Total liabilities 11,699,156 11,159,612

Commitments and contingencies

Shareholders' equity 1,794,128 2,484,978

Total liabilities and shareholders' equity 13,493,284 13,644,590

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited

For the six months ended

June 30,

2020 2019

Cash flows from operating activities

Net (loss) income (516,241) 119,482

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

Goodwill impairment 296,000 -

Depreciation 198,248 209,271

Amortization 135,957 137,201

Amortization of upfront license fees 101,347 103,935

Loss on extinguishment of debt 28,277 9,628

Debt issuance cost amortization 10,297 11,523

Foreign exchange loss (gain), net 4,024 (17,541)

Loss (gain) on sale of assets 66 (63,239)

Stock-based compensation (11,806) 12,502

Deferred income taxes (36,705) 6,515

Other non-cash items, net 2,504 31,392

Changes in operating assets and liabilities, excluding the effects ofacquisitions:

Trade and other receivables 139,578 49,059

Inventories (5,978) 802

Accounts payable (5,662) (57,317)

Other assets and liabilities (14,807) 38,508

Net cash provided by operating activities 325,099 591,721

Cash flows from investing activities

Capital expenditures (160,179) (231,003)

Proceeds from sale of assets 5,185 65,429

Other 10,897 2,545

Net cash used in investing activities (144,097) (163,029)

Cash flows from financing activities

Proceeds from long-term debt 1,475,071 846,975

Net proceeds from short-term borrowings 74,927 19,573

Net receipts from (payments of) financial liabilities 36,468 (11,395)

Debt issuance costs paid (19,616) (5,934)

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

Dividends paid (40,887) (81,729)

Principal payments on long-term debt (959,275) (833,129)

Capital increase - non-controlling interests 2,030 1,075

Return of capital - non-controlling interests - (70,399)

Dividends paid - non-controlling interests (91,376) (129,394)

Other (6,058) (6,733)

Net cash provided by (used in) financing activities 446,284 (279,688)

Net increase in cash and cash equivalents and restricted cash and cash 627,286 149,004equivalents

Effect of exchange rate changes on cash and cash equivalents and restricted 8,225 (3,748)cash and cash equivalents

Cash and cash equivalents and restricted cash and cash equivalents at the 894,251 511,777beginning of the period

Cash and cash equivalents and restricted cash and cash equivalents at the end 1,529,762 657,033of the period

Supplemental Cash Flow Information:

Interest paid (230,864) (211,591)

Income taxes paid (17,795) (49,777)

International Game Technology PLC

Net Debt

($ thousands)

Unaudited

June 30, December 31,

2020 2019

6.250% Senior Secured Notes due February 2022 ^(1) 1,005,593 1,491,328

4.750% Senior Secured Notes due February 2023 ^(2) 946,301 948,382

5.350% Senior Secured Notes due October 2023^(1) 60,836 60,885

3.500% Senior Secured Notes due July 2024 ^(2) 555,981 557,331

6.500% Senior Secured Notes due February 2025 ^(1) 1,090,786 1,089,959

3.500% Senior Secured Notes due June 2026 ^(2) 832,943 835,105

6.250% Senior Secured Notes due January 2027^(1) 743,765 743,387

2.375% Senior Secured Notes due April 2028 ^(2) 554,908 556,403

5.250% Senior Secured Notes due January 2029 ^(1) 742,827 -

Senior Secured Notes, long-term 6,533,940 6,282,780

Term Loan Facilities due January 2023 ^(2) 950,265 1,317,389

Revolving Credit Facilities due July 2024 ^(1) (2) 713,919 -

Long-term debt, less current portion 8,198,124 7,600,169

4.750% Senior Secured Notes due March 2020 ^(2) - 434,789

5.500% Senior Secured Notes due June 2020 ^(1) - 27,366

Term Loan Facilities due January 2023 ^(2) 358,336 -

Current portion of long-term debt 358,336 462,155

Short-term borrowings 79,291 3,193

Total debt 8,635,751 8,065,517

Less: Cash and cash equivalents 1,346,741 662,934

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

Net debt 7,289,010 7,382,119

^(1) U.S. dollar-denominated debt

^(2) Euro-denominated debt

Note: Net debt is a non-GAAP financial measure

International Game Technology PLC

Reconciliations of Non-GAAP Financial Measures

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

Unaudited

For the three months ended

June 30,

2020 2019

Net (loss) income (282,142) 38,987

(Benefit from) provision for income taxes (11,321) 63,300

Interest expense, net 95,599 103,860

Foreign exchange loss, net 74,384 41,061

Other non-operating expense (income), net 29,374 (23,493)

Operating (loss) income (94,106) 223,715

Depreciation 100,228 103,940

Amortization - purchase accounting 42,080 47,514

Amortization - non-purchase accounting ^(1) 74,602 73,249

Restructuring expense 43,429 2,412

Stock-based compensation 1,162 2,912

Other ^(2) 1,011 (33)

Adjusted EBITDA 168,406 453,709

Cash flows from operating activities 167,831 445,107

Capital expenditures (60,481) (111,818)

Free Cash Flow 107,350 333,289

Net (loss) income attributable to IGT PLC (279,616) 4,856

Foreign exchange loss, net 74,384 41,061

Depreciation and amortization - purchase accounting 42,391 48,146

Restructuring expense 43,429 2,412

Loss on extinguishment of debt 23,260 9,628

Other ^(2) 1,011 (33)

Income tax impact on adjustments ^(3) (26,339) (15,374)

Adjusted net (loss) income attributable to IGT PLC (121,480) 90,696

Weighted-average shares - diluted 204,748 204,412

Adjusted weighted-average shares - diluted ^(4) 204,748 204,412

Net (loss) income attributable to IGT PLC per common share - diluted (1.37) 0.02

Adjusted net (loss) income attributable to IGT PLC per common share - diluted (0.59) 0.44

^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

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

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

International Game Technology PLC

Reconciliations of Non-GAAP Financial Measures

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

Unaudited

For the six months ended

June 30,

2020 2019

Net (loss) income (516,241) 119,482

(Benefit from) provision for income taxes (8,189) 115,992

Interest expense, net 196,261 206,929

Foreign exchange loss (gain), net 4,024 (17,541)

Other non-operating expense (income), net 32,760 (22,995)

Operating (loss) income (291,385) 401,867

Goodwill impairment 296,000 -

Depreciation 198,248 209,271

Amortization - purchase accounting 88,750 95,718

Amortization - non-purchase accounting ^(1) 148,554 145,418

Restructuring expense 47,053 5,701

Stock-based compensation (11,806) 12,502

Other ^(2) 1,505 (95)

Adjusted EBITDA 476,919 870,382

Cash flows from operating activities 325,099 591,721

Capital expenditures (160,179) (231,003)

Free Cash Flow 164,920 360,718

Net (loss) income attributable to IGT PLC (527,904) 45,110

Foreign exchange loss (gain), net 4,024 (17,541)

Goodwill impairment 296,000 -

Depreciation and amortization - purchase accounting 89,373 96,982

Restructuring expense 47,053 5,701

Loss on extinguishment of debt 23,260 9,628

Other ^(2) 1,505 (95)

Income tax impact on adjustments ^(3) (38,263) (24,778)

Adjusted net (loss) income attributable to IGT PLC (104,952) 115,007

Weighted-average shares - diluted 204,591 204,532

Adjusted weighted-average shares - diluted ^(4) 204,591 204,532

Net (loss) income attributable to IGT PLC per common share - diluted (2.58) 0.22

Adjusted net (loss) income attributable to IGT PLC per common share - diluted (0.51) 0.56

^(1) Includes amortization of upfront license fees

^(2) Primarily includes transaction-related costs

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

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

INTERNATIONAL GAME TECHNOLOGY PLC

Select Financial Data As Constant Key Performance Indicators %

3 Month Period Ended June 30th Q2 '20 Q2 '19 Reported FX 3 Month Period Ended June 30th Q2 '20 Q2 '19 Change

Total revenue 166 601 -72% -72% Installed base units (end of period)

Gaming services 111 382 -71% -71% Casino 28,134 31,112 -9.6%

Terminal 37 279 -87% -87% Casino - L/T lease ^(1) 930 - NM

Gaming Other 75 103 -28% -27% VLT - Government sponsored (ex-Italy) 18,669 18,651 0.1%

Product sales 55 219 -75% -75% VLT - Italy supplier (B2B) 7,253 7,524 -3.6%

Terminal 44 155 -72% -72% Total installed base units 54,986 57,287 -4.0%

Other 11 64 -82% -82% Yield (average gross revenue per unit per day) $ 5.41 $ 27.96 -80.7%

(1) Yield calculations should exclude these units due to

Total revenue 394 531 -26% -25% accounting treatment as sales-type leases

Lottery services 372 495 -25% -24%

FMC 352 460 -23% -23% Additional Italian network details:

Lottery Instant ticket & draw games 352 460 -24% -23% VLT - Operator (B2C) 10,844 10,929 -0.8%

Other services 0 0 0% 0% AWP 37,138 40,268 -7.8%

LMA 20 36 -43% -43%

Product sales 22 35 -39% -38% Machine units shipped

New/expansion 1,443 1,138 26.8%

Total revenue 77 102 -25% -22% Replacement 1,552 10,086 -84.6%

Other Service revenue 77 102 -25% -23% Total machines shipped 2,995 11,224 -73.3%

Product sales 0 0 186% 186%

Global lottery same-store revenue growth

Revenue 637 1,234 -48% -48% Instant ticket & draw games 0.9%

Operating (Loss)/Income: Multistate jackpots -25.5%

Segment total 29 327 -91% -91% Total lottery same-store revenue growth (ex-Italy) -1.7%Consolidated Purchase accounting (42) (48) -12% -12% Italy lottery revenue growth -54.8%

Corporate support (80) (55) -46% -47%

Total (94) 224 NM NM

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SOURCE International Game Technology PLC