EX-99.1 2 a19-5981_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NEWS RELEASE

 

INTERNATIONAL GAME TECHNOLOGY PLC REPORTS

FOURTH QUARTER AND FULL YEAR 2018 RESULTS

 

·                  2018 full year net loss of $21 million includes $120 million of non-cash impairment charges; 2018 Adjusted EBITDA of $1,737 million within expected range when normalized for FX

 

·                  Fourth quarter net loss of $102 million reflects non-cash impairment charges; Adjusted EBITDA of $416 million on strong global Lottery performance and North America gaming machine unit shipments

 

·                  Net debt of $7,761 million; final installment of Scratch & Win license fee paid in fourth quarter

 

·                  Cash dividend declared of $0.20 per ordinary share

 

LONDON, U.K. — March 7, 2019 — International Game Technology PLC (“IGT”) (NYSE:IGT) today reported financial results for the fourth quarter and full year ended December 31, 2018. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the fourth quarter and full year results; access details are provided below.

 

“Our 2018 results are in line with the improved outlook we provided in October. The year was characterized by strong global Lottery performance, resilience in Italy, and progress in North America Gaming,” said Marco Sala, CEO of IGT. “We’ve established solid foundations to build on — securing large, long-term Lottery contracts in key markets and executing a full refresh of our gaming machine cabinet and content portfolio. These efforts will translate into improved free cash flow beginning in 2019.”

 

“We achieved 4% Adjusted EBITDA growth on stable revenue at constant currency and scope in 2018,” said Alberto Fornaro, CFO of IGT. “We managed our net debt effectively, while making large upfront payments for a key Lottery license in Italy, investing in long-term North America Lottery contracts, and returning capital to shareholders through dividends. Our outlook for 2019 Adjusted EBITDA of $1.70-$1.76 billion assumes underlying growth for our core Lottery and Gaming businesses.”

 

1


 

Overview of Consolidated Fourth Quarter and Full Year 2018 Results

 

 

 

Quarter Ended
December 31,

 

Y/Y
Change

 

Constant
Currency
Change

 

(In $ millions, unless otherwise noted)

 

2018(1)

 

2017

 

(%)

 

(%)

 

Revenue

 

1,266

 

1,346

 

-6%

 

-4%

 

Operating income

 

41

 

194

 

-79%

 

-76%

 

Net income/(loss) per diluted share

 

$

(0.50

)

$

0.39

 

NM

 

 

 

Net debt

 

7,761

 

7,319

 

6%

 

 

 

Adjusted EBITDA

 

416

 

452

 

-8%

 

-6%

 

Adjusted operating income

 

218

 

268

 

-19%

 

-17%

 

Adjusted net income per diluted share

 

$

0.24

 

$

0.02

 

NM

 

 

 

 

 

 

Year Ended
December 31,

 

Y/Y
Change

 

Constant
Currency
Change

 

(In $ millions, unless otherwise noted)

 

2018(1)

 

2017

 

(%)

 

(%)

 

Revenue

 

4,831

 

4,939

 

-2%

 

-3%

 

Operating income

 

647

 

(51

)

NM

 

 

 

Net income per diluted share

 

$

(0.10

)

$

(5.26

)

NM

 

 

 

Net debt

 

7,761

 

7,319

 

6%

 

 

 

Adjusted EBITDA

 

1,737

 

1,676

 

4%

 

2%

 

Adjusted operating income

 

990

 

1,028

 

-4%

 

-6%

 

Adjusted net income per diluted share

 

$

0.98

 

$

0.86

 

14%

 

 

 

 


Note: Adjusted EBITDA, Adjusted operating income, and Adjusted net 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.

 

(1) On January 1, 2018, IGT adopted ASU 2014-09 (Topic 606), Revenue from Contracts with Customers (“ASC 606”). This negatively impacted Revenue in the fourth quarter by $14 million and positively impacted Adjusted EBITDA by $8 million. For the full year, Revenue was negatively impacted by $65 million and Adjusted EBITDA was positively impacted by $15 million. Comparative schedules summarizing the impact on the fourth quarter and full year ended December 31, 2018 Consolidated Statements of Operations are included later in this release.

 

Overview of Consolidated Fourth Quarter 2018 Results

 

Consolidated revenue of $1,266 million, down 4% at constant currency

 

·                  Stable Gaming and Lottery revenue

·                  Decline driven by Sports Betting dynamics in the prior year, including exceptionally low payout percentage in Italy and large International product sales

·                  $14 million negative impact from ASC 606

 

2


 

Adjusted EBITDA of $416 million, down 6% at constant currency

 

·                  Lower revenue

·                  Increased SG&A due to timing differences of certain expense accruals between years

 

Adjusted operating income was $218 million, a decline of 17% at constant currency

 

·                  Higher depreciation associated with recent Lottery contract wins and extensions, upgrading of Gaming installed base

 

Interest expense was $108 million compared to $114 million in the prior-year quarter

 

Provision for income taxes was $30 million compared to a benefit of $83 million in the prior-year period

 

·                  One-time, non-cash benefit of $104 million related to U.S. tax reform in the prior year

 

Net loss attributable to IGT was $102 million in the quarter; Adjusted net income attributable to IGT was $48 million

 

·                  Includes non-cash, non-tax-deductible impairment charge of $119 million, reducing the carrying value of the International segment

 

·                  Underlying International growth outlook unchanged

·                  Charge has no impact on the Company’s operations, cash flow, ability to service debt, compliance with financial covenants, or underlying liquidity

 

Net loss per diluted share of $0.50; Adjusted net income per diluted share of $0.24

 

Overview of Consolidated Full Year 2018 Results

 

Consolidated revenue was $4,831 million, stable at constant currency and scope

 

·                  Constant scope adjusts for the sale of Double Down Interactive, LLC in June 2017

·                  Underlying improvement in North America for both Gaming and Lottery

·                  Broad-based strength in Italy

·                  Lower International revenue

·                  $73 million negative impact from reclass of jackpot expense to contra-revenue item under ASC 606

 

Adjusted EBITDA of $1,737 million, up 4% at constant currency and scope

 

·                  Stable revenue

·                  Optimization of R&D

 

Adjusted operating income was $990 million, a decline of 3% at constant currency and scope

 

·                  Higher depreciation associated with recent Lottery contract wins and extensions, upgrading of Gaming installed base

 

3


 

Capital Expenditures of $533 million compared to $698 million in the prior year

 

Cash from operations was $30 million for the full year

 

·                  Includes $878 million (gross) upfront payments for the Italy Scratch & Win license

 

Cash and cash equivalents were $251 million as of December 31, 2018, compared to $1,057 million as of December 31, 2017

 

Net debt was $7,761 million as of December 31, 2018, compared to $7,319 million as of December 31, 2017

 

·                  Increase driven by Italy Scratch & Win upfront license payments

 

4


 

Operating Segment Review

 

North America Gaming & Interactive

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

Q4 ‘18

 

Q4 ‘17

 

FX

 

Period Ended December 31

 

Q418

 

Q417

 

Change

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

273

 

281

 

-1%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

147

 

167

 

-12%

 

Casino

 

23,108

 

22,807

 

1.3%

 

Terminal

 

101

 

118

 

-14%

 

 

 

 

 

 

 

 

 

Social (DDI)

 

0

 

0

 

0%

 

Machine units shipped

 

 

 

 

 

 

 

Other

 

46

 

49

 

-5%

 

New/Expansion

 

247

 

805

 

-69.3%

 

Product Sales

 

126

 

113

 

13%

 

Replacement

 

6,485

 

4,490

 

44.4%

 

Terminal

 

96

 

72

 

34%

 

Total machines shipped

 

6,732

 

5,295

 

27.1%

 

Other

 

30

 

41

 

-26%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

2

 

0

 

NM

 

 

 

 

 

 

 

 

 

Service Revenue

 

2

 

0

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

275

 

281

 

-1%

 

 

 

 

 

 

 

 

 

Operating Income

 

51

 

69

 

-27%

 

 

 

 

 

 

 

 

 

 

Revenue down slightly to $275 million compared to $281 million in the prior-year quarter

 

·                  Up $9 million, or 3%, after adjusting for $15 million jackpot expense reclass (ASC 606)

·                  Product sales revenue up 11% to $126 million

 

·                  27% increase in Gaming machine units shipped and higher average selling prices

·                  Decline in Other product sales primarily driven by higher intellectual property revenue in the prior year

 

·                  Gaming service revenue of $147 million compared to $167 million in the prior year

 

·                  Terminal service revenue stable after adjusting for jackpot expense reclass

·                  Installed base increased 301 units on strength of new games and cabinets

·                  Yields lower on shift in jurisdictional and machine mix

 

Operating income of $51 million compared to $69 million in the prior-year quarter

 

·                  Increased depreciation expense

·                  Contribution from high-margin intellectual property revenue in the prior year

 

5


 

North America Lottery

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

Q4 ‘18

 

Q4 ‘17

 

FX

 

Period Ended December 31

 

Q418

 

Q417

 

Change

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

40

 

42

 

-3%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

40

 

38

 

8%

 

VLT - Government Sponsored

 

14,939

 

15,294

 

-2.3%

 

Terminal

 

25

 

24

 

2%

 

 

 

 

 

 

 

 

 

Other

 

16

 

13

 

18%

 

Lottery same-store revenue growth

 

 

 

 

 

 

 

Product Sales

 

0

 

4

 

NM

 

Instants & draw games

 

 

 

 

 

5.0%

 

 

 

 

 

 

 

 

 

Multistate Jackpots

 

 

 

 

 

143.1%

 

Lottery

 

 

 

 

 

 

 

Total lottery same-store revenue growth

 

 

 

 

 

21.3%

 

Total Revenue

 

268

 

262

 

2%

 

 

 

 

 

 

 

 

 

Lottery Services

 

255

 

232

 

10%

 

 

 

 

 

 

 

 

 

FMC

 

193

 

165

 

17%

 

 

 

 

 

 

 

 

 

LMA

 

29

 

36

 

-19%

 

 

 

 

 

 

 

 

 

Other Services

 

33

 

32

 

5%

 

 

 

 

 

 

 

 

 

Product Sales

 

13

 

30

 

-56%

 

 

 

 

 

 

 

 

 

Terminal

 

0

 

2

 

NM

 

 

 

 

 

 

 

 

 

Systems/Other

 

13

 

28

 

-53%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

309

 

304

 

2%

 

 

 

 

 

 

 

 

 

Operating Income

 

79

 

66

 

21%

 

 

 

 

 

 

 

 

 

 

Revenue increased 2% to $309 million

 

·                  Lottery service revenue up 10% to $255 million

 

·                  Significant increase in Multistate Jackpots driven by $1.5 billion Mega Millions jackpot

·                  5.0% same-store revenue growth for instant tickets and draw-based games

·                  Lower LMA revenue (reimbursable expenses)

 

·                  Lottery product sales of $13 million compared to $30 million in prior year

 

·                  Prior year benefitted from higher lottery terminal sales and a large Canadian VLT central system sale

 

Operating income increased 21% to $79 million

 

·                  Significant profit flow-through on robust same-store revenue growth

·                  Partly offset by higher depreciation related to recent contract wins and extensions

 

6


 

International

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

Q4 ‘18

 

Q4 ‘17

 

FX

 

Period Ended December 31

 

Q418

 

Q417

 

Change

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

127

 

149

 

-11%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

34

 

55

 

-33%

 

Casino

 

10,636

 

12,818

 

-17.0%

 

Terminal

 

13

 

13

 

16%

 

VLT - Government Sponsored

 

4,269

 

2,725

 

56.7%

 

Other

 

21

 

42

 

-48%

 

Total installed base

 

14,905

 

15,543

 

-4.1%

 

Product Sales

 

94

 

94

 

2%

 

 

 

 

 

 

 

 

 

Terminal

 

64

 

73

 

-11%

 

Machine units shipped

 

 

 

 

 

 

 

Other

 

30

 

21

 

47%

 

New/Expansion

 

528

 

544

 

-2.9%

 

 

 

 

 

 

 

 

 

Replacement

 

4,730

 

5,021

 

-5.8%

 

Lottery

 

 

 

 

 

 

 

Total machines shipped

 

5,258

 

5,565

 

-5.5%

 

Total Revenue

 

76

 

99

 

-20%

 

 

 

 

 

 

 

 

 

Lottery Services

 

72

 

80

 

-8%

 

Lottery same-store revenue growth

 

 

 

 

 

 

 

FMC

 

56

 

55

 

7%

 

Instants & draw games

 

 

 

 

 

4.1%

 

Other Services

 

16

 

25

 

-38%

 

Multistate Jackpots

 

 

 

 

 

8.6%

 

Product Sales

 

4

 

19

 

-75%

 

Total lottery same-store revenue growth

 

 

 

4.4%

 

Systems/Other

 

4

 

19

 

-75%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

18

 

32

 

-41%

 

 

 

 

 

 

 

 

 

Service Revenue

 

17

 

20

 

-4%

 

 

 

 

 

 

 

 

 

Product Sales

 

0

 

12

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

221

 

280

 

-18%

 

 

 

 

 

 

 

 

 

Operating Income

 

28

 

72

 

-57%

 

 

 

 

 

 

 

 

 

 

Revenue of $221 million compared to $280 million in the prior-year period

 

·                  Comparisons reflect significant contract-specific milestones achieved in prior year

·                  Lottery service revenue of $72 million compared to $80 million in the prior year

 

·                  Same-store revenue growth of 4.4% driven by instant tickets, draw-based games, and jackpot games

·                  Prior-year benefit from contract milestone-driven revenue

 

·                  Lottery product sales reflect higher software sales in the prior year

 

·                  Gaming service revenue of $34 million compared to $55 million in the prior year

 

·                  Prior-year benefit from contract milestone-driven revenue

·                  Installed base decline includes 1,484-unit conversion sale, partly offset by an increase in Greece VLTs

·                  Jackpot expense reclass of $2 million

 

·                  Gaming product sales revenue stable at $94 million

 

·                  Terminal revenue impacted by lower unit shipments to Latin America and Europe

·                  Other product sales increased on higher software sales

 

Operating income of $28 million compared to $72 million in the prior-year period

 

·                  Lower revenue with less favorable mix

·                  Increased SG&A due to timing differences of certain expense accruals between years

 

7


 

Italy

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

Q4 ‘18

 

Q4 ‘17

 

FX

 

Period Ended December 31

 

Q418

 

Q417

 

Change

 

 

 

 

 

 

 

 

 

(In €millions, except machines)

 

 

 

 

 

 

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

192

 

193

 

4%

 

Lottery

 

 

 

 

 

 

 

Gaming Services

 

191

 

192

 

4%

 

Lotto wagers

 

2,089

 

1,951

 

7.1%

 

Terminal

 

174

 

176

 

3%

 

10eLotto

 

1,495

 

1,386

 

7.8%

 

Other

 

18

 

16

 

12%

 

Core

 

468

 

508

 

-7.9%

 

Product Sales

 

0

 

0

 

0%

 

Late Numbers

 

78

 

57

 

37.0%

 

 

 

 

 

 

 

 

 

MillionDAY

 

49

 

 

NM

 

Lottery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

202

 

198

 

6%

 

Scratch & Win Wagers

 

2,383

 

2,344

 

1.7%

 

Lottery Services

 

202

 

198

 

6%

 

 

 

 

 

 

 

 

 

FMC

 

248

 

246

 

5%

 

Italy lottery revenue growth

 

 

 

 

 

6.0%

 

Other Services

 

(46

)

(48

)

0%

 

 

 

 

 

 

 

 

 

Product Sales

 

0

 

0

 

0%

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installed base (end of period)

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

VLT - Operator (B2C)

 

10,991

 

10,985

 

0.1%

 

Total Revenue

 

68

 

90

 

-22%

 

VLT - Supplier (B2B)

 

8,058

 

8,592

 

-6.2%

 

Service Revenue

 

68

 

90

 

-22%

 

AWP

 

42,928

 

56,590

 

-24.1%

 

Product Sales

 

0

 

0

 

0%

 

Total Installed Base

 

61,977

 

76,167

 

-18.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

Wagers

 

 

 

 

 

 

 

Revenue

 

462

 

481

 

0%

 

VLT - Operator (B2C)

 

1,564

 

1,428

 

9.5%

 

Operating Income

 

118

 

115

 

7%

 

AWP

 

997

 

1,032

 

-3.4%

 

 

 

 

 

 

 

 

 

Interactive Wagers (Gaming)

 

492

 

461

 

6.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sports Betting Wagers (1)

 

273

 

271

 

0.6%

 

 

 

 

 

 

 

 

 

Sports Betting Payout (%) (1)

 

84.2%

 

76.2%

 

8.0pp

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes Virtual Wagers and Pools & Horses

 

Revenue of $462 million compared to $481 million in the prior year, stable at constant currency

 

·                  Lottery service revenue up 6% at constant currency

 

·                  Lotto wagers rose 7.1% on continued strength in 10eLotto and contribution from MillionDAY

·                  Scratch & Win wagers rose 1.7% on relaunch of Multiplier tickets

 

·                  Gaming service revenue up 4% at constant currency

 

·                  Strong improvement in machine productivity

·                  Increase in wagers helped mitigate state-mandated reductions in AWP units, incremental taxes, and certain regional restrictions

 

·                  Sports Betting wagers stable, payout of 84.2% reflects a more normalized level

 

Operating income increased 7% at constant currency to $118 million

 

·                  Broad-based wager growth with strong profit flow-through, especially for Lotteries

·                  Partly offset by higher Sports Betting payout and increased taxes on gaming machines

 

8


 

Other Developments

 

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

 

·                  Record date of March 21, 2019

·                  Payment date of April 4, 2019

 

Outlook

 

·                  2019 Adjusted EBITDA $1.70 - $1.76 billion

·                  Capital expenditures of $450 - $550 million

·                  Assumes a EUR/USD exchange rate of 1.15

 

Conference Call and Webcast

 

March 7, 2019, 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 is +1 844 842 7999

·                  Outside the US/Canada toll-free number is +1 612 979 9887

·                  Conference ID/confirmation code is 7055579

·                  A telephone replay of the call will be available for one week

 

·                  US/Canada replay number is +1 855 859 2056

·                  Outside the US/Canada replay number is +1 404 537 3406

·                  ID/Confirmation code is 7055579

 

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 2018 are calculated using the same foreign exchange rates as the corresponding 2017 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.

 

9


 

About IGT

 

IGT (NYSE:IGT) is the global leader in gaming. We enable players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Digital and Social Gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. 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 over 12,000 employees. For more information, please visit www.IGT.com.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the “Company”) and other matters. 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, 2017 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. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement.

 

Contact:

Angela Geryak Wiczek, Corporate Communications, toll free in U.S./Canada +1 (844) IGT-7452; outside U.S./Canada +1 (401) 392-7452

James Hurley, Investor Relations, +1 (401) 392-7190

Giuliano Frosini, +39 06 51899584; for Italian media inquiries

 

10


 

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited

 

 

 

For the three months ended

 

 

 

December 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

Service revenue

 

1,029,031

 

1,073,079

 

Product sales

 

237,101

 

272,591

 

Total revenue

 

1,266,132

 

1,345,670

 

 

 

 

 

 

 

Cost of services

 

638,105

 

686,802

 

Cost of product sales

 

157,965

 

176,375

 

Selling, general and administrative

 

238,654

 

208,522

 

Research and development

 

64,782

 

70,946

 

Restructuring expense

 

6,857

 

9,170

 

Impairment loss

 

118,877

 

 

Transaction expense (income), net

 

1

 

(58

)

Total operating expenses

 

1,225,241

 

1,151,757

 

 

 

 

 

 

 

Operating income

 

40,891

 

193,913

 

 

 

 

 

 

 

Interest income

 

4,632

 

2,444

 

Interest expense

 

(108,298

)

(114,405

)

Foreign exchange gain (loss), net

 

32,096

 

(59,228

)

Other expense, net

 

(9,040

)

(146

)

Total non-operating expenses

 

(80,610

)

(171,335

)

 

 

 

 

 

 

(Loss) income before provision for (benefit from) income taxes

 

(39,719

)

22,578

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

30,337

 

(83,346

)

 

 

 

 

 

 

Net (loss) income

 

(70,056

)

105,924

 

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

31,943

 

26,195

 

 

 

 

 

 

 

Net (loss) income attributable to IGT PLC

 

(101,999

)

79,729

 

 

 

 

 

 

 

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

 

(0.50

)

0.39

 

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

 

(0.50

)

0.39

 

 

 

 

 

 

 

Weighted-average shares - basic

 

204,307

 

203,513

 

Weighted-average shares - diluted

 

204,307

 

204,104

 

 

11


 

International Game Technology PLC

Consolidated Statements of Operations

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

Unaudited

 

 

 

For the year ended

 

 

 

December 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

Service revenue

 

4,046,314

 

4,136,556

 

Product sales

 

784,942

 

802,403

 

Total revenue

 

4,831,256

 

4,938,959

 

 

 

 

 

 

 

Cost of services

 

2,450,658

 

2,553,083

 

Cost of product sales

 

491,030

 

579,431

 

Selling, general and administrative

 

844,059

 

816,093

 

Research and development

 

263,279

 

313,088

 

Restructuring expense

 

14,781

 

39,876

 

Impairment loss

 

120,407

 

715,220

 

Transaction expense (income), net

 

51

 

(26,740

)

Total operating expenses

 

4,184,265

 

4,990,051

 

 

 

 

 

 

 

Operating income (loss)

 

646,991

 

(51,092

)

 

 

 

 

 

 

Interest income

 

14,231

 

10,436

 

Interest expense

 

(431,618

)

(458,899

)

Foreign exchange gain (loss), net

 

129,051

 

(443,977

)

Other expense, net

 

(54,607

)

(33,393

)

Total non-operating expenses

 

(342,943

)

(925,833

)

 

 

 

 

 

 

Income (loss) before provision for (benefit from) income taxes

 

304,048

 

(976,925

)

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

189,401

 

(29,414

)

 

 

 

 

 

 

Net income (loss)

 

114,647

 

(947,511

)

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

135,997

 

121,065

 

 

 

 

 

 

 

Net loss attributable to IGT PLC

 

(21,350

)

(1,068,576

)

 

 

 

 

 

 

Net loss attributable to IGT PLC per common share - basic

 

(0.10

)

(5.26

)

Net loss attributable to IGT PLC per common share - diluted

 

(0.10

)

(5.26

)

 

 

 

 

 

 

Weighted-average shares - basic

 

204,083

 

203,130

 

Weighted-average shares - diluted

 

204,083

 

203,130

 

 

12


 

International Game Technology PLC

Consolidated Balance Sheets

($ thousands)

Unaudited

 

 

 

December 31,

 

December 31,

 

 

 

2018

 

2017

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

250,669

 

1,057,418

 

Restricted cash and cash equivalents

 

261,108

 

248,012

 

Trade and other receivables, net

 

949,085

 

937,854

 

Inventories

 

282,698

 

319,545

 

Other current assets

 

504,061

 

407,520

 

Income taxes receivable

 

39,075

 

94,168

 

Total current assets

 

2,286,696

 

3,064,517

 

Systems, equipment and other assets related to contracts, net

 

1,404,426

 

1,434,194

 

Property, plant and equipment, net

 

185,349

 

193,723

 

Goodwill

 

5,580,227

 

5,723,815

 

Intangible assets, net

 

2,044,723

 

2,273,460

 

Other non-current assets

 

2,108,964

 

2,427,953

 

Deferred income taxes

 

38,117

 

41,546

 

Total non-current assets

 

11,361,806

 

12,094,691

 

Total assets

 

13,648,502

 

15,159,208

 

 

 

 

 

 

 

Liabilities, redeemable non-controlling interests, and shareholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

1,142,371

 

1,240,753

 

Other current liabilities

 

816,722

 

1,780,875

 

Current portion of long-term debt

 

 

599,114

 

Short-term borrowings

 

34,822

 

 

Income taxes payable

 

8,209

 

55,935

 

Total current liabilities

 

2,002,124

 

3,676,677

 

Long-term debt, less current portion

 

7,977,267

 

7,777,445

 

Deferred income taxes

 

446,083

 

491,460

 

Income taxes payable

 

25,654

 

55,665

 

Other non-current liabilities

 

445,445

 

446,113

 

Total non-current liabilities

 

8,894,449

 

8,770,683

 

Total liabilities

 

10,896,573

 

12,447,360

 

Commitments and contingencies

 

 

 

 

 

Redeemable non-controlling interests and shareholders’ equity

 

2,751,929

 

2,711,848

 

Total liabilities, redeemable non-controlling interests, and shareholders’ equity

 

13,648,502

 

15,159,208

 

 

13


 

International Game Technology PLC

Consolidated Statements of Cash Flows

($ thousands)

Unaudited

 

 

 

For the year ended

 

 

 

December 31,

 

 

 

2018

 

2017

 

Cash flows from operating activities

 

 

 

 

 

Net income (loss)

 

114,647

 

(947,511

)

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

 

 

 

 

 

Depreciation

 

432,899

 

401,085

 

Amortization

 

272,561

 

401,355

 

Service revenue amortization

 

217,341

 

209,774

 

Impairment loss

 

120,407

 

715,220

 

Loss on extinguishment of debt

 

54,423

 

25,733

 

Stock-based compensation expense

 

33,086

 

4,704

 

Debt issuance cost amortization

 

22,042

 

23,217

 

Deferred income tax provision

 

(34,494

)

(296,265

)

Foreign exchange (gain) loss, net

 

(129,051

)

443,977

 

Gain on sale of Double Down Interactive LLC

 

 

(51,348

)

Other non-cash costs, net

 

29,550

 

25,768

 

Changes in operating assets and liabilities:

 

 

 

 

 

Trade and other receivables

 

(54,356

)

45,465

 

Inventories

 

12,556

 

51,406

 

Upfront Italian license fees

 

(878,055

)

(244,698

)

Accounts payable

 

(51,990

)

(3,031

)

Other assets and liabilities

 

(131,940

)

(141,463

)

Net cash provided by operating activities

 

29,626

 

663,388

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Capital expenditures

 

(533,052

)

(698,010

)

Proceeds from sale of assets

 

19,243

 

167,452

 

Proceeds from sale of Double Down Interactive LLC, net of cash divested

 

 

823,788

 

Other

 

2,272

 

2,336

 

Net cash (used in) provided by investing activities

 

(511,537

)

295,566

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Principal payments on long-term debt

 

(1,899,888

)

(1,754,259

)

Dividends paid

 

(163,236

)

(162,528

)

Dividends paid - non-controlling interests

 

(126,926

)

(57,908

)

Return of capital - non-controlling interests

 

(85,121

)

(84,391

)

Payments in connection with the extinguishment of debt

 

(49,976

)

(38,832

)

Debt issuance costs paid

 

(17,033

)

(16,378

)

Net receipts from (payments of) financial liabilities

 

7,123

 

(150

)

Net proceeds from short-term borrowings

 

34,822

 

 

Capital increase - non-controlling interests

 

321,584

 

148,468

 

Proceeds from long-term debt

 

1,687,761

 

1,762,270

 

Other

 

(20,655

)

(43,264

)

Net cash used in financing activities

 

(311,545

)

(246,972

)

 

 

 

 

 

 

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

 

(793,456

)

711,982

 

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

 

(197

)

52,132

 

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

 

1,305,430

 

541,316

 

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

 

511,777

 

1,305,430

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

Interest paid

 

(445,698

)

(417,110

)

Income taxes paid

 

(239,831

)

(296,386

)

 

14


 

International Game Technology PLC

Net Debt

($ thousands)

Unaudited

 

 

 

December 31,

 

December 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

7.500% Senior Secured Notes due July 2019

 

 

148,231

 

4.125% Senior Secured Notes due February 2020

 

499,167

 

833,655

 

5.625% Senior Secured Notes due February 2020

 

 

595,767

 

4.750% Senior Secured Notes due March 2020

 

438,252

 

585,171

 

5.500% Senior Secured Notes due June 2020

 

27,519

 

125,709

 

6.250% Senior Secured Notes due February 2022

 

1,469,609

 

1,470,075

 

4.750% Senior Secured Notes due February 2023

 

964,730

 

1,008,601

 

5.350% Senior Secured Notes due October 2023

 

60,983

 

61,082

 

3.500% Senior Secured Notes due July 2024

 

567,179

 

 

6.500% Senior Secured Notes due February 2025

 

1,088,385

 

1,086,913

 

6.250% Senior Secured Notes due January 2027

 

742,667

 

 

Senior Secured Notes, long-term

 

5,858,491

 

5,915,204

 

 

 

 

 

 

 

Revolving Credit Facilities due July 2021

 

413,381

 

76,880

 

Term Loan Facilities due January 2023

 

1,705,395

 

1,785,361

 

Long-term debt, less current portion

 

7,977,267

 

7,777,445

 

 

 

 

 

 

 

6.625% Senior Secured Notes due February 2018

 

 

599,114

 

Current portion of long-term debt

 

 

599,114

 

 

 

 

 

 

 

Short-term borrowings

 

34,822

 

 

Total debt

 

8,012,089

 

8,376,559

 

 

 

 

 

 

 

Less: Cash and cash equivalents

 

250,669

 

1,057,418

 

 

 

 

 

 

 

Net debt

 

7,761,420

 

7,319,141

 

 

Note: Net debt is a non-GAAP financial measure

 

15


 

International Game Technology PLC

Adjusted EBITDA and Free Cash Flow

Reconciliations of Non-GAAP Financial Measures

($ thousands)

Unaudited

 

 

 

For the three months ended

 

 

 

December 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

Net (loss) income

 

(70,056

)

105,924

 

Provision for (benefit from) income taxes

 

30,337

 

(83,346

)

Non-operating expenses

 

80,610

 

171,335

 

Depreciation

 

120,696

 

111,997

 

Impairment loss

 

118,877

 

 

Amortization

 

68,305

 

83,366

 

Service revenue amortization

 

52,389

 

54,456

 

Stock-based compensation expense

 

8,142

 

(398

)

Restructuring expense

 

6,857

 

9,170

 

Transaction expense (income), net

 

1

 

(58

)

Non-cash purchase accounting (excluding D&A)

 

(201

)

(223

)

Adjusted EBITDA

 

415,957

 

452,223

 

 

 

 

 

 

 

Cash flows from operating activities

 

(219,686

)

266,451

 

Capital expenditures

 

(158,739

)

(145,841

)

Free Cash Flow

 

(378,425

)

120,610

 

 

International Game Technology PLC

Adjusted EBITDA and Free Cash Flow

Reconciliations of Non-GAAP Financial Measures

($ thousands)

Unaudited

 

 

 

For the year ended

 

 

 

December 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

Net income (loss)

 

114,647

 

(947,511

)

Provision for (benefit from) income taxes

 

189,401

 

(29,414

)

Non-operating expenses

 

342,943

 

925,833

 

Depreciation

 

432,899

 

401,085

 

Amortization

 

272,561

 

401,355

 

Service revenue amortization

 

217,341

 

209,774

 

Impairment loss

 

120,407

 

715,220

 

Stock-based compensation expense

 

33,086

 

4,704

 

Restructuring expense

 

14,781

 

39,876

 

Transaction expense (income), net

 

51

 

(26,740

)

Non-cash purchase accounting (excluding D&A)

 

(867

)

(736

)

Bad debt recovery

 

 

(17,858

)

Adjusted EBITDA

 

1,737,250

 

1,675,588

 

 

 

 

 

 

 

Cash flows from operating activities

 

29,626

 

663,388

 

Capital expenditures

 

(533,052

)

(698,010

)

Free Cash Flow

 

(503,426

)

(34,622

)

 

16


 

International Game Technology PLC

ASC 606 - Revenue Recognition Impact

Consolidated Statements of Operations

($ thousands, except per share data)

Unaudited

 

 

 

Q4 2018

 

 

 

Under Prior
Accounting

 

Revenue
Recognition
Adjustment

 

As Adjusted

 

 

 

 

 

 

 

 

 

Revenue

 

1,280,449

 

(14,317

)

1,266,132

 

Operating expenses

 

(1,247,420

)

22,179

 

(1,225,241

)

Provision for income taxes

 

(28,703

)

(1,634

)

(30,337

)

Net loss attributable to IGT PLC

 

(108,227

)

6,228

 

(101,999

)

 

 

 

 

 

 

 

 

Net loss attributable to IGT PLC per common share - basic

 

(0.53

)

0.03

 

(0.50

)

Net loss attributable to IGT PLC per common share - diluted

 

(0.53

)

0.03

 

(0.50

)

 

 

 

 

 

 

 

 

 

 

Q4 2018 YTD

 

 

 

Under Prior
Accounting

 

Revenue
Recognition
Adjustment

 

As Adjusted

 

 

 

 

 

 

 

 

 

Revenue

 

4,896,300

 

(65,044

)

4,831,256

 

Operating expenses

 

(4,264,321

)

80,056

 

(4,184,265

)

Provision for income taxes

 

(187,897

)

(1,504

)

(189,401

)

Net loss attributable to IGT PLC

 

(34,858

)

13,508

 

(21,350

)

 

 

 

 

 

 

 

 

Net loss attributable to IGT PLC per common share - basic

 

(0.17

)

0.07

 

(0.10

)

Net loss attributable to IGT PLC per common share - diluted

 

(0.17

)

0.07

 

(0.10

)

 

17


 

International Game Technology PLC

Consolidated Statement of Operations

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

 

 

 

Quarter to date

 

Adjustments

 

Quarter to date

 

 

 

December 2018

 

 

 

 

 

Impairment/

 

Transaction

 

December 2018

 

 

 

As

 

Purchase

 

Foreign

 

Restructuring

 

and Refinancing

 

As

 

 

 

Reported

 

Accounting

 

Exchange

 

Expense

 

Expense, net

 

Adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

1,266,132

 

(183

)

 

 

 

1,265,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

638,105

 

(20,548

)

 

 

 

617,557

 

Cost of product sales

 

157,965

 

(3,955

)

 

 

 

154,010

 

Selling, general and administrative

 

238,654

 

(27,018

)

 

 

 

211,636

 

Research and development

 

64,782

 

(218

)

 

 

 

64,564

 

Restructuring expense

 

6,857

 

 

 

(6,857

)

 

 

Impairment loss

 

118,877

 

 

 

(118,877

)

 

 

Transaction expense, net

 

1

 

 

 

 

(1

)

 

Total operating expenses

 

1,225,241

 

(51,739

)

 

(125,734

)

(1

)

1,047,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

40,891

 

51,556

 

 

125,734

 

1

 

218,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(103,666

)

27

 

 

 

 

(103,639

)

Foreign exchange gain, net

 

32,096

 

 

(32,096

)

 

 

 

Other expense, net

 

(9,040

)

(127

)

 

 

5,004

 

(4,163

)

Total non-operating expenses

 

(80,610

)

(100

)

(32,096

)

 

5,004

 

(107,802

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before provision for income taxes

 

(39,719

)

51,456

 

(32,096

)

125,734

 

5,005

 

110,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes (a)

 

30,337

 

7,082

 

(10,124

)

1,764

 

1,095

 

30,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(70,056

)

44,374

 

(21,972

)

123,970

 

3,910

 

80,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

31,943

 

25

 

 

 

 

31,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to IGT PLC

 

(101,999

)

44,349

 

(21,972

)

123,970

 

3,910

 

48,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share - diluted

 

(0.50

)

 

 

 

 

 

 

 

 

0.24

 

Weighted-average shares - diluted (b)

 

204,307

 

 

 

 

 

 

 

 

 

204,328

 

 


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

 

(b) Weighted-average shares — diluted, as adjusted, include shares that were excluded from the as reported computation, due to the net loss as reported.

 

18


 

International Game Technology PLC

Consolidated Statement of Operations

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

 

 

 

Year to date

 

Adjustments

 

Year to date

 

 

 

December 2018

 

 

 

 

 

Impairment/

 

Transaction

 

December 2018

 

 

 

As

 

Purchase

 

Foreign

 

Restructuring

 

and Refinancing

 

As

 

 

 

Reported

 

Accounting

 

Exchange

 

Expense

 

Expense, net

 

Adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

4,831,256

 

(723

)

 

 

 

4,830,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

2,450,658

 

(84,005

)

 

 

 

2,366,653

 

Cost of product sales

 

491,030

 

(15,690

)

 

 

 

475,340

 

Selling, general and administrative

 

844,059

 

(107,620

)

 

 

 

736,439

 

Research and development

 

263,279

 

(904

)

 

 

 

262,375

 

Restructuring expense

 

14,781

 

 

 

(14,781

)

 

 

Impairment loss

 

120,407

 

 

 

(120,407

)

 

 

Transaction expense, net

 

51

 

 

 

 

(51

)

 

Total operating expenses

 

4,184,265

 

(208,219

)

 

(135,188

)

(51

)

3,840,807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

646,991

 

207,496

 

 

135,188

 

51

 

989,726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(417,387

)

1,563

 

 

 

 

(415,824

)

Foreign exchange gain, net

 

129,051

 

 

(129,051

)

 

 

 

Other expense, net

 

(54,607

)

(2,311

)

 

 

54,463

 

(2,455

)

Total non-operating expenses

 

(342,943

)

(748

)

(129,051

)

 

54,463

 

(418,279

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

304,048

 

206,748

 

(129,051

)

135,188

 

54,514

 

571,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes (a)

 

189,401

 

44,183

 

(3,494

)

3,593

 

1,097

 

234,780

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

114,647

 

162,565

 

(125,557

)

131,595

 

53,417

 

336,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

135,997

 

102

 

 

 

 

136,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to IGT PLC

 

(21,350

)

162,463

 

(125,557

)

131,595

 

53,417

 

200,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share - diluted

 

(0.10

)

 

 

 

 

 

 

 

 

0.98

 

Weighted-average shares - diluted (b)

 

204,083

 

 

 

 

 

 

 

 

 

204,363

 

 


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

 

(b) Weighted-average shares — diluted, as adjusted, include shares that were excluded from the as reported computation, due to the net loss as reported.

 

19


 

International Game Technology PLC

Consolidated Statement of Operations

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

 

 

 

Quarter to date

 

 

 

 

 

 

 

 

 

Quarter to date

 

 

 

December 2017

 

Adjustments

 

December 2017

 

 

 

As

 

Purchase

 

Foreign

 

Restructuring

 

Transaction

 

As

 

 

 

Reported

 

Accounting

 

Exchange

 

Expense

 

Expense, net

 

Adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

1,345,670

 

(182

)

 

 

 

1,345,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

686,802

 

(27,563

)

 

 

 

659,239

 

Cost of product sales

 

176,375

 

(10,454

)

 

 

 

165,921

 

Selling, general and administrative

 

208,522

 

(27,183

)

 

 

 

181,339

 

Research and development

 

70,946

 

(230

)

 

 

 

70,716

 

Restructuring expense

 

9,170

 

 

 

(9,170

)

 

 

Transaction income, net

 

(58

)

 

 

 

58

 

 

Total operating expenses

 

1,151,757

 

(65,430

)

 

(9,170

)

58

 

1,077,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

193,913

 

65,248

 

 

9,170

 

(58

)

268,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(111,961

)

513

 

 

 

 

(111,448

)

Foreign exchange loss, net

 

(59,228

)

 

59,228

 

 

 

 

Other expense, net

 

(146

)

1

 

 

 

(8

)

(153

)

Total non-operating expenses

 

(171,335

)

514

 

59,228

 

 

(8

)

(111,601

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before (benefit from) provision for income taxes

 

22,578

 

65,762

 

59,228

 

9,170

 

(66

)

156,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes (a) (b) (c)

 

(83,346

)

267,714

 

(60,593

)

2,887

 

(2

)

126,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

105,924

 

(201,952

)

119,821

 

6,283

 

(64

)

30,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

26,195

 

25

 

 

 

 

26,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to IGT PLC

 

79,729

 

(201,977

)

119,821

 

6,283

 

(64

)

3,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - diluted

 

0.39

 

 

 

 

 

 

 

 

 

0.02

 

Weighted-average shares - diluted

 

204,104

 

 

 

 

 

 

 

 

 

204,104

 

 


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

 

(b) As Reported includes a net $103.6 million one-time, non-cash income tax benefit related to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) composed of (i) a $64.4 million non-cash income tax expense for the restatement of deferred tax assets and a $239.2 million non-cash income tax benefit for the restatement of deferred tax liabilities related to Purchase Accounting, both driven by the decrease in the income tax rate from 35% to 21% and (ii) a $71.2 million non-cash income tax expense in 2017 associated with unremitted foreign earnings. Separate from the Tax Act, As Reported includes a $73.3 million one-time, non-cash tax expense for the write-off of a deferred tax asset related primarily to unrealized foreign exchange losses.

 

(c) As Adjusted excludes the $239.2 million non-cash income tax benefit for the restatement of deferred tax liabilities related to Purchase Accounting and the $73.3 million one-time, non-cash tax expense for the write-of of a deferred tax asset related primarily to unrealized foreign exchange losses.

 

20


 

International Game Technology PLC

Consolidated Statement of Operations

Reconciliation of Non-GAAP Financial Measures

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

Unaudited

 

 

 

Year to date

 

Adjustments

 

Year to date

 

 

 

December 2017

 

 

 

 

 

Impairment/

 

Transaction

 

December 2017

 

 

 

As

 

Purchase

 

Foreign

 

Restructuring

 

and Refinancing

 

As

 

 

 

Reported

 

Accounting

 

Exchange

 

Expense

 

Expense, net

 

Adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

4,938,959

 

(722

)

 

 

 

4,938,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

2,553,083

 

(145,221

)

 

 

 

2,407,862

 

Cost of product sales

 

579,431

 

(87,715

)

 

 

 

491,716

 

Selling, general and administrative

 

816,093

 

(117,460

)

 

 

 

698,633

 

Research and development

 

313,088

 

(656

)

 

 

 

312,432

 

Restructuring expense

 

39,876

 

 

 

(39,876

)

 

 

Impairment loss

 

715,220

 

 

 

(715,220

)

 

 

Transaction income, net

 

(26,740

)

 

 

 

26,740

 

 

Total operating expenses

 

4,990,051

 

(351,052

)

 

(755,096

)

26,740

 

3,910,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(51,092

)

350,330

 

 

755,096

 

(26,740

)

1,027,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(448,463

)

2,928

 

 

 

 

(445,535

)

Foreign exchange loss, net

 

(443,977

)

 

443,977

 

 

 

 

Other (expense) income, net

 

(33,393

)

1,568

 

 

 

35,420

 

3,595

 

Total non-operating expenses

 

(925,833

)

4,496

 

443,977

 

 

35,420

 

(441,940

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before (benefit from) provision for income taxes

 

(976,925

)

354,826

 

443,977

 

755,096

 

8,680

 

585,654

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes (a) (b) (c)

 

(29,414

)

368,780

 

26,559

 

12,019

 

(88,161

)

289,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(947,511

)

(13,954

)

417,418

 

743,077

 

96,841

 

295,871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

121,065

 

102

 

 

 

 

121,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to IGT PLC

 

(1,068,576

)

(14,056

)

417,418

 

743,077

 

96,841

 

174,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share - diluted

 

(5.26

)

 

 

 

 

 

 

 

 

0.86

 

Weighted-average shares - diluted (d)

 

203,130

 

 

 

 

 

 

 

 

 

203,504

 

 


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

 

(b) As Reported includes a net $103.6 million one-time, non-cash income tax benefit related to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) composed of (i) a $64.4 million non-cash income tax expense for the restatement of deferred tax assets and a $239.2 million non-cash income tax benefit for the restatement of deferred tax liabilities related to Purchase Accounting, both driven by the decrease in the income tax rate from 35% to 21% and (ii) a $71.2 million non-cash income tax expense in 2017 associated with unremitted foreign earnings. Separate from the Tax Act, As Reported includes a $73.3 million one-time, non-cash tax expense for the write-off of a deferred tax asset related primarily to unrealized foreign exchange losses.

 

(c) As Adjusted excludes the $239.2 million non-cash income tax benefit for the restatement of deferred tax liabilities related to Purchase Accounting and the $73.3 million one-time, non-cash tax expense for the write-of of a deferred tax asset related primarily to unrealized foreign exchange losses.

 

(d) Weighted-average shares — diluted, as adjusted, include shares that were excluded from the as reported computation, due to the net loss as reported.

 

21


 

INTERNATIONAL GAME TECHNOLOGY PLC

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

Q4 ‘18

 

Q4 ‘17

 

FX

 

Period Ended December 31

 

Q418

 

Q417

 

Change

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

632

 

664

 

-2%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

413

 

452

 

-6%

 

Casino

 

33,744

 

35,625

 

-5.3%

 

Terminal

 

312

 

331

 

-3%

 

VLT - Government Sponsored (ex-Italy)

 

19,208

 

18,019

 

6.6%

 

Social (DDI)

 

0

 

0

 

0%

 

VLT - Italy Supplier (B2B)

 

8,058

 

8,592

 

-6.2%

 

Other

 

100

 

121

 

-15%

 

Total installed base

 

61,010

 

62,236

 

-2.0%

 

Product Sales

 

220

 

212

 

6%

 

Yield
(average revenue per unit per day)

 

$

26.90

 

$

27.49

 

-2.1%

 

Terminal

 

159

 

146

 

12%

 

 

 

 

 

 

 

 

 

Other

 

60

 

66

 

-7%

 

Additional Italian Network Details:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VLT - Operator (B2C)

 

10,991

 

10,985

 

0.1%

 

Lottery

 

 

 

 

 

 

 

AWP

 

42,928

 

56,590

 

-24.1%

 

Total Revenue

 

547

 

559

 

0%

 

 

 

 

 

 

 

 

 

Lottery Services

 

530

 

511

 

6%

 

Machine units shipped

 

 

 

 

 

 

 

FMC

 

497

 

466

 

9%

 

New/Expansion

 

775

 

1,349

 

-42.6%

 

LMA

 

29

 

36

 

-19%

 

Replacement

 

11,215

 

9,511

 

17.9%

 

Other Services

 

3

 

9

 

-79%

 

Total machines shipped

 

11,990

 

10,860

 

10.4%

 

Product Sales

 

17

 

48

 

-63%

 

 

 

 

 

 

 

 

 

Terminal

 

(0

)

2

 

NM

 

Global lottery same-store revenue growth

 

 

 

 

 

 

 

Systems/Other

 

17

 

47

 

-62%

 

Instants & draw games

 

 

 

 

 

4.7%

 

 

 

 

 

 

 

 

 

Multistate Jackpots

 

 

 

 

 

122.7%

 

Other

 

 

 

 

 

 

 

Total lottery same-store revenue growth (ex-Italy)

 

 

 

16.9%

 

Total Revenue

 

87

 

122

 

-26%

 

Italy lottery revenue growth

 

 

 

 

 

6.0%

 

Service Revenue

 

87

 

110

 

-18%

 

 

 

 

 

 

 

 

 

Product Sales

 

0

 

12

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

1,266

 

1,346

 

-4%

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Total

 

277

 

322

 

-12%

 

 

 

 

 

 

 

 

 

Purchase Accounting

 

(170

)

(65

)

-160%

 

 

 

 

 

 

 

 

 

Corporate Support

 

(67

)

(63

)

-10%

 

 

 

 

 

 

 

 

 

Total

 

41

 

194

 

-76%

 

 

 

 

 

 

 

 

 

 

Full Year Comparisons by Segment:

 

NORTH AMERICA GAMING & INTERACTIVE

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

2018

 

2017

 

FX

 

Period Ended December 31

 

2018

 

2017

 

Change

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

1,001

 

1,158

 

-13%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

622

 

781

 

-20%

 

Casino

 

23,108

 

22,807

 

1.3%

 

Terminal

 

420

 

488

 

-14%

 

 

 

 

 

 

 

 

 

Social (DDI)

 

0

 

111

 

-100%

 

Machine units shipped

 

 

 

 

 

 

 

Other

 

202

 

181

 

11%

 

New/Expansion

 

3,917

 

4,099

 

-4.4%

 

Product Sales

 

379

 

377

 

1%

 

Replacement

 

14,922

 

14,030

 

6.4%

 

Terminal

 

262

 

244

 

8%

 

Total machines shipped

 

18,839

 

18,129

 

3.9%

 

Other

 

117

 

133

 

-12%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

2

 

(0

)

NM

 

 

 

 

 

 

 

 

 

Service Revenue

 

2

 

(0

)

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

1,003

 

1,158

 

-13%

 

 

 

 

 

 

 

 

 

Operating Income

 

219

 

279

 

-21%

 

 

 

 

 

 

 

 

 

 

22


 

NORTH AMERICA LOTTERY

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

2018

 

2017

 

FX

 

Period Ended December 31

 

2018

 

2017

 

Change 

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

154

 

162

 

-5%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

153

 

150

 

2%

 

VLT - Government Sponsored

 

14,939

 

15,294

 

-2.3%

 

Terminal

 

100

 

99

 

0%

 

 

 

 

 

 

 

 

 

Other

 

54

 

50

 

7%

 

Lottery same-store revenue growth

 

 

 

 

 

 

 

Product Sales

 

0

 

13

 

-97%

 

Instants & draw games

 

 

 

 

 

5.0%

 

 

 

 

 

 

 

 

 

Multistate Jackpots

 

 

 

 

 

34.0%

 

Lottery

 

 

 

 

 

 

 

Total lottery same-store revenue growth

 

 

 

 

 

8.9%

 

Total Revenue

 

1,038

 

1,023

 

1%

 

 

 

 

 

 

 

 

 

Lottery Services

 

958

 

943

 

2%

 

 

 

 

 

 

 

 

 

FMC

 

697

 

660

 

6%

 

 

 

 

 

 

 

 

 

LMA

 

129

 

157

 

-18%

 

 

 

 

 

 

 

 

 

Other Services

 

131

 

126

 

4%

 

 

 

 

 

 

 

 

 

Product Sales

 

80

 

80

 

1%

 

 

 

 

 

 

 

 

 

Terminal

 

24

 

4

 

NM

 

 

 

 

 

 

 

 

 

Systems/Other

 

57

 

76

 

-25%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

1,192

 

1,185

 

1%

 

 

 

 

 

 

 

 

 

Operating Income

 

297

 

289

 

3%

 

 

 

 

 

 

 

 

 

 

INTERNATIONAL

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

2018

 

2017

 

FX

 

Period Ended December 31

 

2018

 

2017

 

Change 

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

417

 

472

 

-10%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

140

 

197

 

-27%

 

Casino

 

10,636

 

12,818

 

-17.0%

 

Terminal

 

54

 

51

 

11%

 

VLT - Government Sponsored

 

4,269

 

2,725

 

56.7%

 

Other

 

86

 

146

 

-41%

 

Total installed base

 

14,905

 

15,543

 

-4.1%

 

Product Sales

 

277

 

275

 

2%

 

 

 

 

 

 

 

 

 

Terminal

 

193

 

200

 

-2%

 

Machine units shipped

 

 

 

 

 

 

 

Other

 

84

 

75

 

12%

 

New/Expansion

 

1,880

 

1,756

 

7.1%

 

 

 

 

 

 

 

 

 

Replacement

 

11,820

 

12,218

 

-3.3%

 

Lottery

 

 

 

 

 

 

 

Total machines shipped

 

13,700

 

13,974

 

-2.0%

 

Total Revenue

 

329

 

323

 

1%

 

 

 

 

 

 

 

 

 

Lottery Services

 

283

 

288

 

-2%

 

Lottery same-store revenue growth

 

 

 

 

 

 

 

FMC

 

222

 

206

 

7%

 

Instants & draw games

 

 

 

 

 

3.6%

 

Other Services

 

61

 

81

 

-25%

 

Multistate Jackpots

 

 

 

 

 

-1.4%

 

Product Sales

 

46

 

35

 

33%

 

Total lottery same-store revenue growth

 

 

 

 

 

3.3%

 

Systems/Other

 

46

 

35

 

33%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

74

 

94

 

-21%

 

 

 

 

 

 

 

 

 

Service Revenue

 

73

 

72

 

1%

 

 

 

 

 

 

 

 

 

Product Sales

 

2

 

22

 

-93%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

820

 

889

 

-7%

 

 

 

 

 

 

 

 

 

Operating Income

 

142

 

164

 

-13%

 

 

 

 

 

 

 

 

 

 

23


 

ITALY

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

2018

 

2017

 

FX

 

Period Ended December 31

 

2018

 

2017

 

Change 

 

 

 

 

 

 

 

 

 

(In € millions, except machines)

 

 

 

 

 

 

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

734

 

707

 

0%

 

Lottery

 

 

 

 

 

 

 

Gaming Services

 

733

 

706

 

0%

 

Lotto wagers

 

8,017

 

7,481

 

7.2%

 

Terminal

 

665

 

644

 

0%

 

10eLotto

 

5,728

 

5,160

 

11.0%

 

Other

 

68

 

62

 

6%

 

Core

 

1,877

 

2,011

 

-6.7%

 

Product Sales

 

1

 

1

 

-21%

 

Late Numbers

 

227

 

310

 

-26.9%

 

 

 

 

 

 

 

 

 

MillionDAY

 

185

 

 

NM

 

Lottery

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

793

 

721

 

6%

 

Scratch & Win Wagers

 

9,207

 

9,065

 

1.6%

 

Lottery Services

 

793

 

721

 

6%

 

 

 

 

 

 

 

 

 

FMC

 

991

 

912

 

5%

 

Italy lottery revenue growth

 

 

 

 

 

6.0%

 

Other Services

 

(198

)

(191

)

0%

 

 

 

 

 

 

 

 

 

Product Sales

 

0

 

0

 

0%

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installed base (end of period)

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

VLT - Operator (B2C)

 

10,991

 

10,985

 

0.1%

 

Total Revenue

 

288

 

277

 

0%

 

VLT - Supplier (B2B)

 

8,058

 

8,592

 

-6.2%

 

Service Revenue

 

288

 

277

 

0%

 

AWP

 

42,928

 

56,590

 

-24.1%

 

Product Sales

 

0

 

0

 

0%

 

Total Installed Base

 

61,977

 

76,167

 

-18.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

Wagers

 

 

 

 

 

 

 

Revenue

 

1,815

 

1,705

 

3%

 

VLT - Operator (B2C)

 

5,838

 

5,543

 

5.3%

 

Operating Income

 

541

 

479

 

8%

 

AWP

 

3,717

 

3,949

 

-5.9%

 

 

 

 

 

 

 

 

 

Interactive Wagers (Gaming)

 

1,890

 

1,745

 

8.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sports Betting Wagers (1)

 

988

 

959

 

3.1%

 

 

 

 

 

 

 

 

 

Sports Betting Payout (%) (1)

 

82.4%

 

82.7%

 

-0.3pp

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes Virtual Wagers and Pools & Horses

 

INTERNATIONAL GAME TECHNOLOGY PLC

 

Select Financial Data

 

 

 

 

 

Constant

 

Key Performance Indicators

 

 

 

 

 

%

 

Period Ended December 31

 

2018

 

2017

 

FX

 

Period Ended December 31

 

2018

 

2017

 

Change 

 

Gaming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

2,306

 

2,501

 

-8%

 

Installed base (end of period)

 

 

 

 

 

 

 

Gaming Services

 

1,649

 

1,836

 

-11%

 

Casino

 

33,744

 

35,625

 

-5.3%

 

Terminal

 

1,239

 

1,284

 

-5%

 

VLT - Government Sponsored (ex-Italy)

 

19,208

 

18,019

 

6.6%

 

Social (DDI)

 

0

 

111

 

-100%

 

VLT - Italy Supplier (B2B)

 

8,058

 

8,592

 

-6.2%

 

Other

 

410

 

440

 

-7%

 

Total installed base

 

61,010

 

62,236

 

-2.0%

 

Product Sales

 

657

 

665

 

-1%

 

Yield
(average revenue per unit per day)

 

$

27.72

 

$

29.26

 

-5.3%

 

Terminal

 

455

 

444

 

3%

 

 

 

 

 

 

 

 

 

Other

 

202

 

222

 

-9%

 

Additional Italian Network Details:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VLT - Operator (B2C)

 

10,991

 

10,985

 

0.1%

 

Lottery

 

 

 

 

 

 

 

AWP

 

42,928

 

56,590

 

-24.1%

 

Total Revenue

 

2,161

 

2,067

 

3%

 

 

 

 

 

 

 

 

 

Lottery Services

 

2,034

 

1,952

 

3%

 

Machine units shipped

 

 

 

 

 

 

 

FMC

 

1,910

 

1,778

 

5%

 

New/Expansion

 

5,797

 

5,855

 

-1.0%

 

LMA

 

129

 

157

 

-18%

 

Replacement

 

26,742

 

26,248

 

1.9%

 

Other Services

 

(4

)

17

 

-80%

 

Total machines shipped

 

32,539

 

32,103

 

1.4%

 

Product Sales

 

127

 

115

 

11%

 

 

 

 

 

 

 

 

 

Terminal

 

25

 

4

 

NM

 

Global lottery same-store revenue growth

 

 

 

 

 

 

 

Systems/Other

 

102

 

111

 

-8%

 

Instants & draw games

 

 

 

 

 

4.8%

 

 

 

 

 

 

 

 

 

Multistate Jackpots

 

 

 

 

 

28.5%

 

Other

 

 

 

 

 

 

 

Total lottery same-store revenue growth (ex-Italy)

 

 

 

7.6%

 

Total Revenue

 

364

 

371

 

-5%

 

Italy lottery revenue growth

 

 

 

 

 

6.0%

 

Service Revenue

 

363

 

349

 

1%

 

 

 

 

 

 

 

 

 

Product Sales

 

2

 

22

 

-93%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

4,831

 

4,939

 

-3%

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Total

 

1,199

 

1,210

 

-3%

 

 

 

 

 

 

 

 

 

Purchase Accounting

 

(325

)

(1,064

)

69%

 

 

 

 

 

 

 

 

 

Corporate Support

 

(226

)

(197

)

-14%

 

 

 

 

 

 

 

 

 

Total

 

647

 

(51

)

 

 

 

 

 

 

 

 

 

 

 

24