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Share Name | Share Symbol | Market | Type |
---|---|---|---|
International Game Technology PLC | NYSE:IGT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.16 | 0.81% | 19.90 | 20.205 | 19.48 | 19.73 | 1,449,084 | 01:00:00 |
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Page
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PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
Condensed Consolidated Financial Statements (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
400,928
|
|
|
250,669
|
|
Restricted cash and cash equivalents
|
|
|
|
256,105
|
|
|
261,108
|
|
Trade and other receivables, net
|
|
|
|
948,520
|
|
|
949,085
|
|
Inventories
|
|
4
|
|
264,911
|
|
|
282,698
|
|
Other current assets
|
|
|
|
489,440
|
|
|
504,061
|
|
Income taxes receivable
|
|
|
|
45,576
|
|
|
39,075
|
|
Total current assets
|
|
|
|
2,405,480
|
|
|
2,286,696
|
|
Systems, equipment and other assets related to contracts, net
|
|
|
|
1,350,575
|
|
|
1,404,426
|
|
Property, plant and equipment, net
|
|
|
|
140,033
|
|
|
185,349
|
|
Operating lease right-of-use assets
|
|
5
|
|
360,021
|
|
|
—
|
|
Goodwill
|
|
|
|
5,572,217
|
|
|
5,580,227
|
|
Intangible assets, net
|
|
|
|
1,940,656
|
|
|
2,044,723
|
|
Other non-current assets
|
|
|
|
2,030,137
|
|
|
2,108,964
|
|
Deferred income taxes
|
|
|
|
37,738
|
|
|
38,117
|
|
Total non-current assets
|
|
|
|
11,431,377
|
|
|
11,361,806
|
|
Total assets
|
|
|
|
13,836,857
|
|
|
13,648,502
|
|
|
|
|
|
|
|
|
||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
1,063,886
|
|
|
1,142,371
|
|
Other current liabilities
|
|
|
|
867,639
|
|
|
816,722
|
|
Current portion of long-term debt
|
|
6
|
|
829,601
|
|
|
—
|
|
Short-term borrowings
|
|
6
|
|
55,349
|
|
|
34,822
|
|
Income taxes payable
|
|
|
|
74,001
|
|
|
8,209
|
|
Total current liabilities
|
|
|
|
2,890,476
|
|
|
2,002,124
|
|
Long-term debt, less current portion
|
|
6
|
|
7,152,523
|
|
|
7,977,267
|
|
Deferred income taxes
|
|
|
|
450,003
|
|
|
446,083
|
|
Income taxes payable
|
|
|
|
25,654
|
|
|
25,654
|
|
Operating lease liabilities
|
|
5
|
|
325,477
|
|
|
—
|
|
Other non-current liabilities
|
|
|
|
386,584
|
|
|
445,445
|
|
Total non-current liabilities
|
|
|
|
8,340,241
|
|
|
8,894,449
|
|
Total liabilities
|
|
|
|
11,230,717
|
|
|
10,896,573
|
|
Commitments and contingencies
|
|
8
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
Common stock, par value $0.10 per share; 204,435,333 and 204,210,731 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
|
|
|
|
20,443
|
|
|
20,421
|
|
Additional paid-in capital
|
|
|
|
2,463,290
|
|
|
2,534,134
|
|
Retained deficit
|
|
|
|
(963,020
|
)
|
|
(1,008,193
|
)
|
Accumulated other comprehensive income
|
|
9
|
|
271,031
|
|
|
261,537
|
|
Total IGT PLC’s shareholders’ equity
|
|
|
|
1,791,744
|
|
|
1,807,899
|
|
Non-controlling interests
|
|
|
|
814,396
|
|
|
944,030
|
|
Total shareholders’ equity
|
|
|
|
2,606,140
|
|
|
2,751,929
|
|
Total liabilities and shareholders’ equity
|
|
|
|
13,836,857
|
|
|
13,648,502
|
|
|
|
|
|
For the three months ended
June 30, |
|
For the six months ended
June 30, |
||||||||
|
|
Notes
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Service revenue
|
|
10
|
|
980,031
|
|
|
1,007,067
|
|
|
1,971,062
|
|
|
2,054,018
|
|
Product sales
|
|
10
|
|
254,222
|
|
|
195,271
|
|
|
408,107
|
|
|
355,276
|
|
Total revenue
|
|
10
|
|
1,234,253
|
|
|
1,202,338
|
|
|
2,379,169
|
|
|
2,409,294
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of services
|
|
|
|
594,598
|
|
|
607,684
|
|
|
1,189,925
|
|
|
1,225,742
|
|
Cost of product sales
|
|
|
|
160,786
|
|
|
122,403
|
|
|
260,971
|
|
|
225,754
|
|
Selling, general and administrative
|
|
|
|
213,263
|
|
|
196,088
|
|
|
415,100
|
|
|
411,306
|
|
Research and development
|
|
|
|
65,383
|
|
|
63,957
|
|
|
131,501
|
|
|
135,220
|
|
Other operating (income) expense, net
|
|
11
|
|
(23,492
|
)
|
|
3,129
|
|
|
(20,195
|
)
|
|
5,200
|
|
Total operating expenses
|
|
|
|
1,010,538
|
|
|
993,261
|
|
|
1,977,302
|
|
|
2,003,222
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
|
10
|
|
223,715
|
|
|
209,077
|
|
|
401,867
|
|
|
406,072
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
|
6
|
|
(103,860
|
)
|
|
(102,888
|
)
|
|
(206,929
|
)
|
|
(210,168
|
)
|
Foreign exchange (loss) gain, net
|
|
|
|
(41,061
|
)
|
|
172,546
|
|
|
17,541
|
|
|
75,851
|
|
Other income (expense), net
|
|
12
|
|
23,493
|
|
|
(31,304
|
)
|
|
22,995
|
|
|
(28,323
|
)
|
Total non-operating (expenses) income
|
|
|
|
(121,428
|
)
|
|
38,354
|
|
|
(166,393
|
)
|
|
(162,640
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before provision for income taxes
|
|
7
|
|
102,287
|
|
|
247,431
|
|
|
235,474
|
|
|
243,432
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for income taxes
|
|
7
|
|
63,300
|
|
|
52,232
|
|
|
115,992
|
|
|
112,737
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
|
|
38,987
|
|
|
195,199
|
|
|
119,482
|
|
|
130,695
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Net income attributable to non-controlling interests
|
|
|
|
34,131
|
|
|
33,703
|
|
|
74,372
|
|
|
52,019
|
|
Less: Net income attributable to redeemable non-controlling interests
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,326
|
|
Net income attributable to IGT PLC
|
|
13
|
|
4,856
|
|
|
161,496
|
|
|
45,110
|
|
|
58,350
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to IGT PLC per common share - basic
|
|
13
|
|
0.02
|
|
|
0.79
|
|
|
0.22
|
|
|
0.29
|
|
Net income attributable to IGT PLC per common share - diluted
|
|
13
|
|
0.02
|
|
|
0.79
|
|
|
0.22
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares - basic
|
|
13
|
|
204,407
|
|
|
204,118
|
|
|
204,309
|
|
|
203,859
|
|
Weighted-average shares - diluted
|
|
13
|
|
204,412
|
|
|
204,516
|
|
|
204,532
|
|
|
204,345
|
|
|
|
|
|
For the three months ended
June 30, |
|
For the six months ended
June 30, |
||||||||
|
|
Notes
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Net income
|
|
|
|
38,987
|
|
|
195,199
|
|
|
119,482
|
|
|
130,695
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Change in foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
9
|
|
22,084
|
|
|
(97,491
|
)
|
|
(2,555
|
)
|
|
(62,390
|
)
|
Reclassification of income to net income
|
|
9
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
Total foreign currency translation adjustments
|
|
|
|
22,084
|
|
|
(97,491
|
)
|
|
(2,601
|
)
|
|
(62,390
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unrealized (loss) gain on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on cash flow hedges
|
|
9
|
|
97
|
|
|
3,051
|
|
|
872
|
|
|
(3,061
|
)
|
Reclassification of (income) loss to net income
|
|
9
|
|
(546
|
)
|
|
172
|
|
|
(732
|
)
|
|
1,397
|
|
Total change in unrealized (loss) gain on cash flow hedges
|
|
|
|
(449
|
)
|
|
3,223
|
|
|
140
|
|
|
(1,664
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain (loss) on available-for-sale securities
|
|
9
|
|
2,819
|
|
|
(185
|
)
|
|
4,023
|
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on defined benefit plans
|
|
9
|
|
(61
|
)
|
|
—
|
|
|
(124
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other
|
|
9
|
|
748
|
|
|
—
|
|
|
748
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), before tax
|
|
|
|
25,141
|
|
|
(94,453
|
)
|
|
2,186
|
|
|
(63,014
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax benefit (provision) related to items of other comprehensive income (loss)
|
|
9
|
|
59
|
|
|
(784
|
)
|
|
(26
|
)
|
|
349
|
|
Other comprehensive income (loss)
|
|
|
|
25,200
|
|
|
(95,237
|
)
|
|
2,160
|
|
|
(62,665
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive income
|
|
|
|
64,187
|
|
|
99,962
|
|
|
121,642
|
|
|
68,030
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Total comprehensive income attributable to non-controlling interests
|
|
|
|
43,010
|
|
|
34,117
|
|
|
67,038
|
|
|
52,389
|
|
Less: Total comprehensive income attributable to redeemable non-controlling interests
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,326
|
|
Total comprehensive income (loss) attributable to IGT PLC
|
|
|
|
21,177
|
|
|
65,845
|
|
|
54,604
|
|
|
(4,685
|
)
|
|
|
For the six months ended June 30,
|
||||
|
|
2019
|
|
2018
|
||
Cash flows from operating activities
|
|
|
|
|
|
|
Net income
|
|
119,482
|
|
|
130,695
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
209,271
|
|
|
202,448
|
|
Amortization
|
|
137,201
|
|
|
136,450
|
|
Service revenue amortization
|
|
103,935
|
|
|
111,115
|
|
Stock-based compensation expense
|
|
12,502
|
|
|
17,119
|
|
Debt issuance cost amortization
|
|
11,523
|
|
|
11,534
|
|
Loss on extinguishment of debt
|
|
9,628
|
|
|
29,584
|
|
Deferred income taxes
|
|
6,515
|
|
|
(9,817
|
)
|
Foreign exchange gain, net
|
|
(17,541
|
)
|
|
(75,851
|
)
|
Gain on sale of assets
|
|
(63,239
|
)
|
|
(1,129
|
)
|
Other non-cash costs, net
|
|
31,392
|
|
|
1,610
|
|
Changes in operating assets and liabilities, excluding the effects of acquisitions:
|
|
|
|
|
|
|
Trade and other receivables
|
|
49,059
|
|
|
49,832
|
|
Inventories
|
|
802
|
|
|
(20,787
|
)
|
Upfront Italian license fees
|
|
—
|
|
|
(366,270
|
)
|
Accounts payable
|
|
(57,317
|
)
|
|
(56,732
|
)
|
Other assets and liabilities
|
|
38,508
|
|
|
(39,651
|
)
|
Net cash provided by operating activities
|
|
591,721
|
|
|
120,150
|
|
|
|
|
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
Capital expenditures
|
|
(231,003
|
)
|
|
(258,967
|
)
|
Proceeds from sale of assets
|
|
65,429
|
|
|
6,065
|
|
Other
|
|
2,545
|
|
|
1,458
|
|
Net cash used in investing activities
|
|
(163,029
|
)
|
|
(251,444
|
)
|
|
|
|
|
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
Principal payments on long-term debt
|
|
(833,129
|
)
|
|
(1,058,753
|
)
|
Dividends paid - non-controlling interests
|
|
(129,394
|
)
|
|
(125,808
|
)
|
Dividends paid
|
|
(81,729
|
)
|
|
(81,553
|
)
|
Return of capital - non-controlling interests
|
|
(70,399
|
)
|
|
(53,600
|
)
|
Net payments of financial liabilities
|
|
(11,395
|
)
|
|
(36,586
|
)
|
Payments in connection with extinguishment of debt
|
|
(8,598
|
)
|
|
(24,281
|
)
|
Debt issuance costs paid
|
|
(5,934
|
)
|
|
(4,047
|
)
|
Capital increase - non-controlling interests
|
|
1,075
|
|
|
134,536
|
|
Net proceeds from short-term borrowings
|
|
19,573
|
|
|
73,980
|
|
Proceeds from long-term debt
|
|
846,975
|
|
|
863,911
|
|
Other
|
|
(6,733
|
)
|
|
(17,696
|
)
|
Net cash used in financing activities
|
|
(279,688
|
)
|
|
(329,897
|
)
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents
|
|
149,004
|
|
|
(461,191
|
)
|
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents
|
|
(3,748
|
)
|
|
22,352
|
|
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period
|
|
511,777
|
|
|
1,305,430
|
|
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period
|
|
657,033
|
|
|
866,591
|
|
|
|
|
|
|
||
Supplemental Cash Flow Information
|
|
|
|
|
||
Interest paid
|
|
(211,591
|
)
|
|
(262,886
|
)
|
Income taxes (paid) refunded
|
|
(49,777
|
)
|
|
13,313
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
IGT PLC
Equity
|
|
Non-
Controlling
Interests
|
|
Total
Equity
|
|||||||
Balance at December 31, 2018
|
20,421
|
|
|
2,534,134
|
|
|
(1,008,193
|
)
|
|
261,537
|
|
|
1,807,899
|
|
|
944,030
|
|
|
2,751,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
40,254
|
|
|
—
|
|
|
40,254
|
|
|
40,241
|
|
|
80,495
|
|
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,827
|
)
|
|
(6,827
|
)
|
|
(16,213
|
)
|
|
(23,040
|
)
|
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
40,254
|
|
|
(6,827
|
)
|
|
33,427
|
|
|
24,028
|
|
|
57,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock-based payment expense
|
—
|
|
|
9,590
|
|
|
—
|
|
|
—
|
|
|
9,590
|
|
|
—
|
|
|
9,590
|
|
Capital increase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
333
|
|
|
333
|
|
Return of capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,888
|
)
|
|
(28,888
|
)
|
Dividends declared
|
—
|
|
|
(40,842
|
)
|
|
—
|
|
|
—
|
|
|
(40,842
|
)
|
|
(128,868
|
)
|
|
(169,710
|
)
|
Other
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
|
4,167
|
|
|
4,253
|
|
Balance at March 31, 2019
|
20,421
|
|
|
2,502,882
|
|
|
(967,853
|
)
|
|
254,710
|
|
|
1,810,160
|
|
|
814,802
|
|
|
2,624,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
4,856
|
|
|
—
|
|
|
4,856
|
|
|
34,131
|
|
|
38,987
|
|
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
16,321
|
|
|
16,321
|
|
|
8,879
|
|
|
25,200
|
|
Total comprehensive income
|
—
|
|
|
—
|
|
|
4,856
|
|
|
16,321
|
|
|
21,177
|
|
|
43,010
|
|
|
64,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock-based payment expense
|
—
|
|
|
2,912
|
|
|
—
|
|
|
—
|
|
|
2,912
|
|
|
—
|
|
|
2,912
|
|
Capital increase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
742
|
|
|
742
|
|
Shares issued upon exercise of stock options
|
22
|
|
|
(1,617
|
)
|
|
—
|
|
|
—
|
|
|
(1,595
|
)
|
|
—
|
|
|
(1,595
|
)
|
Return of capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,465
|
)
|
|
(41,465
|
)
|
Dividends declared
|
—
|
|
|
(40,887
|
)
|
|
—
|
|
|
—
|
|
|
(40,887
|
)
|
|
(706
|
)
|
|
(41,593
|
)
|
Other
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|
(1,987
|
)
|
|
(2,010
|
)
|
Balance at June 30, 2019
|
20,443
|
|
|
2,463,290
|
|
|
(963,020
|
)
|
|
271,031
|
|
|
1,791,744
|
|
|
814,396
|
|
|
2,606,140
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
IGT PLC
Equity
|
|
Non-
Controlling
Interests
|
|
Total
Equity
|
|||||||
Balance at December 31, 2017
|
20,344
|
|
|
2,676,854
|
|
|
(1,032,372
|
)
|
|
340,169
|
|
|
2,004,995
|
|
|
349,936
|
|
|
2,354,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
(103,146
|
)
|
|
—
|
|
|
(103,146
|
)
|
|
18,316
|
|
|
(84,830
|
)
|
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
32,616
|
|
|
32,616
|
|
|
(44
|
)
|
|
32,572
|
|
Total comprehensive (loss) income
|
—
|
|
|
—
|
|
|
(103,146
|
)
|
|
32,616
|
|
|
(70,530
|
)
|
|
18,272
|
|
|
(52,258
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adoption of new accounting standards
|
—
|
|
|
—
|
|
|
45,527
|
|
|
—
|
|
|
45,527
|
|
|
—
|
|
|
45,527
|
|
Stock-based payment expense
|
—
|
|
|
14,172
|
|
|
—
|
|
|
—
|
|
|
14,172
|
|
|
—
|
|
|
14,172
|
|
Shares issued upon exercise of stock options
|
12
|
|
|
(1,801
|
)
|
|
—
|
|
|
—
|
|
|
(1,789
|
)
|
|
—
|
|
|
(1,789
|
)
|
Dividends declared
|
—
|
|
|
(40,196
|
)
|
|
—
|
|
|
—
|
|
|
(40,196
|
)
|
|
(728
|
)
|
|
(40,924
|
)
|
Other
|
—
|
|
|
149
|
|
|
(516
|
)
|
|
—
|
|
|
(367
|
)
|
|
—
|
|
|
(367
|
)
|
Balance at March 31, 2018
|
20,356
|
|
|
2,649,178
|
|
|
(1,090,507
|
)
|
|
372,785
|
|
|
1,951,812
|
|
|
367,480
|
|
|
2,319,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
161,496
|
|
|
—
|
|
|
161,496
|
|
|
33,703
|
|
|
195,199
|
|
Other comprehensive (loss) income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(95,651
|
)
|
|
(95,651
|
)
|
|
414
|
|
|
(95,237
|
)
|
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
161,496
|
|
|
(95,651
|
)
|
|
65,845
|
|
|
34,117
|
|
|
99,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Reclassification of redeemable non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
377,243
|
|
|
377,243
|
|
Capital increase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134,536
|
|
|
134,536
|
|
Stock-based payment expense
|
—
|
|
|
2,947
|
|
|
—
|
|
|
—
|
|
|
2,947
|
|
|
—
|
|
|
2,947
|
|
Shares issued upon exercise of stock options
|
2
|
|
|
251
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|
—
|
|
|
253
|
|
Shares issued under stock award plans
|
62
|
|
|
(10,574
|
)
|
|
—
|
|
|
—
|
|
|
(10,512
|
)
|
|
—
|
|
|
(10,512
|
)
|
Return of capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,600
|
)
|
|
(53,600
|
)
|
Dividends declared
|
—
|
|
|
(41,357
|
)
|
|
—
|
|
|
—
|
|
|
(41,357
|
)
|
|
(112,491
|
)
|
|
(153,848
|
)
|
Other
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Balance at June 30, 2018
|
20,420
|
|
|
2,600,446
|
|
|
(929,012
|
)
|
|
277,134
|
|
|
1,968,988
|
|
|
747,285
|
|
|
2,716,273
|
|
1.
|
Description of the Business
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Revenue Recognition
|
($ thousands)
|
|
June 30, 2019
|
|
December 31, 2018
|
|
Balance Sheet Classification
|
||
Receivables, net
|
|
948,520
|
|
|
949,085
|
|
|
Trade and other receivables, net
|
|
|
|
|
|
|
|
||
Contract assets:
|
|
|
|
|
|
|
||
Current
|
|
83,860
|
|
|
58,739
|
|
|
Other current assets
|
Non-current
|
|
77,929
|
|
|
69,691
|
|
|
Other non-current assets
|
|
|
161,789
|
|
|
128,430
|
|
|
|
|
|
|
|
|
|
|
||
Contract liabilities:
|
|
|
|
|
|
|
||
Current
|
|
(78,309
|
)
|
|
(72,005
|
)
|
|
Other current liabilities
|
Non-current
|
|
(58,798
|
)
|
|
(67,022
|
)
|
|
Other non-current liabilities
|
|
|
(137,107
|
)
|
|
(139,027
|
)
|
|
|
4.
|
Inventories
|
($ thousands)
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Raw materials
|
|
113,543
|
|
|
140,143
|
|
Work in progress
|
|
32,517
|
|
|
32,835
|
|
Finished goods
|
|
118,851
|
|
|
109,720
|
|
|
|
264,911
|
|
|
282,698
|
|
5.
|
Leases
|
($ thousands)
|
|
Balance Sheet Classification
|
|
June 30, 2019
|
|
Assets
|
|
|
|
|
|
Operating ROU asset
|
|
Operating lease right-of-use assets
|
|
360,021
|
|
Finance ROU asset, net (1)
|
|
Other non-current assets
|
|
34,391
|
|
Total lease assets
|
|
|
|
394,412
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Operating lease liability, current
|
|
Other current liabilities
|
|
52,556
|
|
Finance lease liability, current
|
|
Other current liabilities
|
|
7,366
|
|
Operating lease liability, non-current
|
|
Operating lease liabilities
|
|
325,477
|
|
Finance lease liability, non-current
|
|
Other non-current liabilities
|
|
36,422
|
|
Total lease liabilities
|
|
|
|
421,821
|
|
|
|
Weighted Average
|
|||
|
|
Remaining Lease Term (in years)
|
|
Discount Rate
|
|
Operating leases
|
|
8.81
|
|
6.82
|
%
|
Finance leases
|
|
6.63
|
|
5.61
|
%
|
|
|
For the three months ended
|
|
For the six months ended
|
||
($ thousands)
|
|
June 30, 2019
|
|
June 30, 2019
|
||
Operating lease costs
|
|
20,436
|
|
|
42,588
|
|
Finance lease costs (1)
|
|
2,482
|
|
|
4,990
|
|
Variable lease costs (2)
|
|
12,481
|
|
|
30,205
|
|
Year
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
|||
2019 (1)
|
|
38,989
|
|
|
4,841
|
|
|
43,830
|
|
2020
|
|
70,740
|
|
|
9,276
|
|
|
80,016
|
|
2021
|
|
60,829
|
|
|
8,886
|
|
|
69,715
|
|
2022
|
|
52,716
|
|
|
6,775
|
|
|
59,491
|
|
2023
|
|
48,900
|
|
|
5,106
|
|
|
54,006
|
|
Thereafter
|
|
251,887
|
|
|
17,654
|
|
|
269,541
|
|
Total lease payments
|
|
524,061
|
|
|
52,538
|
|
|
576,599
|
|
Less: Imputed interest
|
|
(146,028
|
)
|
|
(8,750
|
)
|
|
(154,778
|
)
|
Present value of lease liabilities
|
|
378,033
|
|
|
43,788
|
|
|
421,821
|
|
|
|
For the six months ended
|
|
($ thousands)
|
|
June 30, 2019
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
Operating cash flows from operating and finance leases
|
|
42,097
|
|
Finance cash flows from finance leases
|
|
3,520
|
|
|
|
|
|
Non-cash activity:
|
|
|
|
ROU assets obtained in exchange for lease obligations
|
|
|
|
Operating leases
|
|
5,802
|
|
Finance leases
|
|
4,055
|
|
6.
|
Debt
|
($ thousands)
|
|
June 30, 2019
|
|
December 31, 2018
|
||
4.125% Senior Secured Notes due February 2020 (2)
|
|
—
|
|
|
499,167
|
|
4.750% Senior Secured Notes due March 2020 (2)
|
|
—
|
|
|
438,252
|
|
5.500% Senior Secured Notes due June 2020 (1)
|
|
—
|
|
|
27,519
|
|
6.250% Senior Secured Notes due February 2022 (1)
|
|
1,488,631
|
|
|
1,469,609
|
|
4.750% Senior Secured Notes due February 2023 (2)
|
|
959,758
|
|
|
964,730
|
|
5.350% Senior Secured Notes due October 2023 (1)
|
|
60,936
|
|
|
60,983
|
|
3.500% Senior Secured Notes due July 2024 (2)
|
|
564,139
|
|
|
567,179
|
|
6.500% Senior Secured Notes due February 2025 (1)
|
|
1,089,159
|
|
|
1,088,385
|
|
3.500% Senior Secured Notes due June 2026 (2)
|
|
845,482
|
|
|
—
|
|
6.250% Senior Secured Notes due January 2027 (1)
|
|
743,021
|
|
|
742,667
|
|
Senior Secured Notes, long-term
|
|
5,751,126
|
|
|
5,858,491
|
|
|
|
|
|
|
||
Revolving Credit Facilities due July 2021 (1) (2)
|
|
69,114
|
|
|
413,381
|
|
Term Loan Facility due January 2023 (2)
|
|
1,332,283
|
|
|
1,705,395
|
|
Long-term debt, less current portion
|
|
7,152,523
|
|
|
7,977,267
|
|
|
|
|
|
|
||
4.750% Senior Secured Notes due March 2020 (2)
|
|
437,997
|
|
|
—
|
|
5.500% Senior Secured Notes due June 2020 (1)
|
|
27,444
|
|
|
—
|
|
Term Loan Facility due January 2023 (2)
|
|
364,160
|
|
|
—
|
|
Current portion of long-term debt
|
|
829,601
|
|
|
—
|
|
|
|
|
|
|
||
Short-term borrowings
|
|
55,349
|
|
|
34,822
|
|
|
|
|
|
|
||
Total Debt
|
|
8,037,473
|
|
|
8,012,089
|
|
|
|
June 30, 2019
|
|||||||||||||
($ thousands)
|
|
Principal
|
|
Debt issuance
cost, net
|
|
Premium
|
|
Swap
|
|
Total
|
|||||
4.750% Senior Secured Notes due March 2020
|
|
441,430
|
|
|
(3,433
|
)
|
|
—
|
|
|
—
|
|
|
437,997
|
|
5.500% Senior Secured Notes due June 2020
|
|
27,311
|
|
|
—
|
|
|
154
|
|
|
(21
|
)
|
|
27,444
|
|
6.250% Senior Secured Notes due February 2022
|
|
1,500,000
|
|
|
(9,933
|
)
|
|
—
|
|
|
(1,436
|
)
|
|
1,488,631
|
|
4.750% Senior Secured Notes due February 2023
|
|
967,300
|
|
|
(7,542
|
)
|
|
—
|
|
|
—
|
|
|
959,758
|
|
5.350% Senior Secured Notes due October 2023
|
|
60,567
|
|
|
—
|
|
|
369
|
|
|
—
|
|
|
60,936
|
|
3.500% Senior Secured Notes due July 2024
|
|
569,000
|
|
|
(4,861
|
)
|
|
—
|
|
|
—
|
|
|
564,139
|
|
6.500% Senior Secured Notes due February 2025
|
|
1,100,000
|
|
|
(10,841
|
)
|
|
—
|
|
|
—
|
|
|
1,089,159
|
|
3.500% Senior Secured Notes due June 2026
|
|
853,500
|
|
|
(8,018
|
)
|
|
—
|
|
|
—
|
|
|
845,482
|
|
6.250% Senior Secured Notes due January 2027
|
|
750,000
|
|
|
(6,979
|
)
|
|
—
|
|
|
—
|
|
|
743,021
|
|
Senior Secured Notes
|
|
6,269,108
|
|
|
(51,607
|
)
|
|
523
|
|
|
(1,457
|
)
|
|
6,216,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revolving Credit Facilities due July 2021
|
|
81,000
|
|
|
(11,886
|
)
|
|
—
|
|
|
—
|
|
|
69,114
|
|
Term Loan Facility due January 2023
|
|
1,707,000
|
|
|
(10,557
|
)
|
|
—
|
|
|
—
|
|
|
1,696,443
|
|
Total Debt, excluding short-term borrowings
|
|
8,057,108
|
|
|
(74,050
|
)
|
|
523
|
|
|
(1,457
|
)
|
|
7,982,124
|
|
|
|
December 31, 2018
|
|||||||||||||
($ thousands)
|
|
Principal
|
|
Debt issuance
cost, net |
|
Premium
|
|
Swap
|
|
Total
|
|||||
4.125% Senior Secured Notes due February 2020
|
|
501,058
|
|
|
(1,891
|
)
|
|
—
|
|
|
—
|
|
|
499,167
|
|
4.750% Senior Secured Notes due March 2020
|
|
444,146
|
|
|
(5,894
|
)
|
|
—
|
|
|
—
|
|
|
438,252
|
|
5.500% Senior Secured Notes due June 2020
|
|
27,311
|
|
|
—
|
|
|
234
|
|
|
(26
|
)
|
|
27,519
|
|
6.250% Senior Secured Notes due February 2022
|
|
1,500,000
|
|
|
(11,611
|
)
|
|
—
|
|
|
(18,780
|
)
|
|
1,469,609
|
|
4.750% Senior Secured Notes due February 2023
|
|
973,250
|
|
|
(8,520
|
)
|
|
—
|
|
|
—
|
|
|
964,730
|
|
5.350% Senior Secured Notes due October 2023
|
|
60,567
|
|
|
—
|
|
|
416
|
|
|
—
|
|
|
60,983
|
|
3.500% Senior Secured Notes due July 2024
|
|
572,500
|
|
|
(5,321
|
)
|
|
—
|
|
|
—
|
|
|
567,179
|
|
6.500% Senior Secured Notes due February 2025
|
|
1,100,000
|
|
|
(11,615
|
)
|
|
—
|
|
|
—
|
|
|
1,088,385
|
|
6.250% Senior Secured Notes due January 2027
|
|
750,000
|
|
|
(7,333
|
)
|
|
—
|
|
|
—
|
|
|
742,667
|
|
Senior Secured Notes
|
|
5,928,832
|
|
|
(52,185
|
)
|
|
650
|
|
|
(18,806
|
)
|
|
5,858,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revolving Credit Facilities due July 2021
|
|
428,158
|
|
|
(14,777
|
)
|
|
—
|
|
|
—
|
|
|
413,381
|
|
Term Loan Facility due January 2023
|
|
1,717,500
|
|
|
(12,105
|
)
|
|
—
|
|
|
—
|
|
|
1,705,395
|
|
Total Debt, excluding short-term borrowings
|
|
8,074,490
|
|
|
(79,067
|
)
|
|
650
|
|
|
(18,806
|
)
|
|
7,977,267
|
|
|
|
Calendar year
|
|||||||||||||||||||
($ thousands)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and
thereafter |
|
Total
|
|||||||
4.750% Senior Secured Notes due March 2020
|
|
441,430
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
441,430
|
|
5.500% Senior Secured Notes due June 2020
|
|
27,311
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,311
|
|
6.250% Senior Secured Notes due February 2022
|
|
—
|
|
|
—
|
|
|
1,500,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500,000
|
|
4.750% Senior Secured Notes due February 2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
967,300
|
|
|
—
|
|
|
—
|
|
|
967,300
|
|
5.350% Senior Secured Notes due October 2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,567
|
|
|
—
|
|
|
—
|
|
|
60,567
|
|
3.500% Senior Secured Notes due July 2024
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
569,000
|
|
|
—
|
|
|
569,000
|
|
6.500% Senior Secured Notes due February 2025
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,100,000
|
|
|
1,100,000
|
|
3.500% Senior Secured Notes due June 2026
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
853,500
|
|
|
853,500
|
|
6.250% Senior Secured Notes due January 2027
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
750,000
|
|
|
750,000
|
|
Senior Secured Notes
|
|
468,741
|
|
|
—
|
|
|
1,500,000
|
|
|
1,027,867
|
|
|
569,000
|
|
|
2,703,500
|
|
|
6,269,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revolving Credit Facilities due July 2021
|
|
—
|
|
|
81,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,000
|
|
Term Loan Facility due January 2023
|
|
364,160
|
|
|
364,160
|
|
|
364,160
|
|
|
614,520
|
|
|
—
|
|
|
—
|
|
|
1,707,000
|
|
Total Principal Payments
|
|
832,901
|
|
|
445,160
|
|
|
1,864,160
|
|
|
1,642,387
|
|
|
569,000
|
|
|
2,703,500
|
|
|
8,057,108
|
|
($ thousands)
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Carrying value (excluding swap adjustments)
|
|
7,983,581
|
|
|
7,996,073
|
|
Fair value
|
|
8,507,496
|
|
|
8,089,154
|
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Senior Secured Notes
|
|
(86,425
|
)
|
|
(86,590
|
)
|
|
(172,526
|
)
|
|
(178,092
|
)
|
Term Loan Facilities
|
|
(9,468
|
)
|
|
(9,848
|
)
|
|
(18,955
|
)
|
|
(20,013
|
)
|
Revolving Credit Facilities
|
|
(9,017
|
)
|
|
(7,033
|
)
|
|
(18,107
|
)
|
|
(13,276
|
)
|
Other
|
|
(1,649
|
)
|
|
(2,768
|
)
|
|
(3,000
|
)
|
|
(5,137
|
)
|
Interest expense
|
|
(106,559
|
)
|
|
(106,239
|
)
|
|
(212,588
|
)
|
|
(216,518
|
)
|
Interest income
|
|
2,699
|
|
|
3,351
|
|
|
5,659
|
|
|
6,350
|
|
Interest expense, net
|
|
(103,860
|
)
|
|
(102,888
|
)
|
|
(206,929
|
)
|
|
(210,168
|
)
|
7.
|
Income Taxes
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||
($ thousands, except percentages)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Provision for income taxes
|
|
63,300
|
|
|
52,232
|
|
|
115,992
|
|
|
112,737
|
|
Income before provision for income taxes
|
|
102,287
|
|
|
247,431
|
|
|
235,474
|
|
|
243,432
|
|
Effective income tax rate (determined using an estimated annual effective tax rate)
|
|
61.9
|
%
|
|
21.1
|
%
|
|
49.3
|
%
|
|
46.3
|
%
|
8.
|
Commitments and Contingencies
|
(a)
|
Steele, James et al. v. GTECH Corp., filed on December 9, 2014, in Travis County (No. D1GN145114). Through intervenor actions, over 1,200 plaintiffs claim damages in excess of $500.0 million. GTECH Corporation’s plea to the jurisdiction for dismissal based on sovereign immunity was denied. GTECH Corporation appealed. The appellate court ordered that plaintiffs' sole remaining claim should be reconsidered. On April 27, 2018, IGT Global Solutions Corporation petitioned for Texas Supreme Court review and the Texas Supreme Court has scheduled a hearing on December 3, 2019.
|
(b)
|
Nettles, Dawn v. GTECH Corp. et al., filed on January 7, 2015, in Dallas County (No. 051501559CV). Plaintiff claims damages in excess of $4.0 million. GTECH Corporation and the Texas Lottery Commission won pleas to the jurisdiction for dismissal based on sovereign immunity. Plaintiff lost her appeal and petitioned for Texas Supreme Court review. The Texas Supreme Court has scheduled a hearing on December 3, 2019.
|
(c)
|
Guerra, Esmeralda v. GTECH Corp. et al., filed on June 10, 2016, in Hidalgo County (No. C277716B). Plaintiff claims damages in excess of $0.5 million.
|
(d)
|
Wiggins, Mario & Kimberly v. IGT Global Solutions Corp., filed on September 15, 2016, in Travis County (No. D1GN16004344). Plaintiffs claim damages in excess of $1.0 million.
|
(e)
|
Campos, Osvaldo Guadalupe et al. v. GTECH Corp., filed on October 20, 2016, in Travis County (No. D1GN16005300). Plaintiffs claim damages in excess of $1.0 million.
|
9.
|
Shareholders' Equity
|
Per share amount ($)
|
|
2019
|
|
2018
|
||
First quarter
|
|
0.20
|
|
|
0.20
|
|
Second quarter
|
|
0.20
|
|
|
0.20
|
|
Total cash dividends declared
|
|
0.40
|
|
|
0.40
|
|
|
|
|
|
Unrealized Gain (Loss) on:
|
|
|
|
Less: OCI attributable
to non-controlling
interests
|
|
Total
AOCI
attributable
to IGT PLC
|
||||||||||||||
($ thousands)
|
|
Foreign
Currency
Translation
|
|
Cash
Flow
Hedges
|
|
Hedge of
Net
Investment
|
|
Available
for Sale
Securities
|
|
Defined
Benefit
Plans
|
|
Other
|
|
|
||||||||||
Balance at December 31, 2018
|
|
247,362
|
|
|
(1,240
|
)
|
|
(5,518
|
)
|
|
6,195
|
|
|
(4,454
|
)
|
|
(748
|
)
|
|
19,940
|
|
|
261,537
|
|
Change during period
|
|
(24,639
|
)
|
|
775
|
|
|
—
|
|
|
1,204
|
|
|
(63
|
)
|
|
—
|
|
|
16,213
|
|
|
(6,510
|
)
|
Reclassified to operations (1)
|
|
(46
|
)
|
|
(186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(232
|
)
|
Tax effect
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
OCI
|
|
(24,685
|
)
|
|
507
|
|
|
—
|
|
|
1,201
|
|
|
(63
|
)
|
|
—
|
|
|
16,213
|
|
|
(6,827
|
)
|
Balance at March 31, 2019
|
|
222,677
|
|
|
(733
|
)
|
|
(5,518
|
)
|
|
7,396
|
|
|
(4,517
|
)
|
|
(748
|
)
|
|
36,153
|
|
|
254,710
|
|
Change during period
|
|
22,084
|
|
|
97
|
|
|
—
|
|
|
2,819
|
|
|
(61
|
)
|
|
748
|
|
|
(8,879
|
)
|
|
16,808
|
|
Reclassified to operations (1)
|
|
—
|
|
|
(546
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(546
|
)
|
Tax effect
|
|
—
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
OCI
|
|
22,084
|
|
|
(390
|
)
|
|
—
|
|
|
2,819
|
|
|
(61
|
)
|
|
748
|
|
|
(8,879
|
)
|
|
16,321
|
|
Balance at June 30, 2019
|
|
244,761
|
|
|
(1,123
|
)
|
|
(5,518
|
)
|
|
10,215
|
|
|
(4,578
|
)
|
|
—
|
|
|
27,274
|
|
|
271,031
|
|
|
|
|
|
Unrealized Gain (Loss) on:
|
|
|
|
Less: OCI attributable
to non-controlling
interests
|
|
Total
AOCI
attributable
to IGT PLC
|
||||||||||||||
($ thousands)
|
|
Foreign
Currency
Translation
|
|
Cash
Flow
Hedges
|
|
Hedge of
Net
Investment
|
|
Available
for Sale
Securities
|
|
Defined
Benefit
Plans
|
|
Other
|
|
|
||||||||||
Balance at December 31, 2017
|
|
338,146
|
|
|
(649
|
)
|
|
(4,578
|
)
|
|
11,588
|
|
|
(4,839
|
)
|
|
(748
|
)
|
|
1,249
|
|
|
340,169
|
|
Change during period
|
|
35,101
|
|
|
(6,112
|
)
|
|
—
|
|
|
1,225
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
30,258
|
|
Reclassified to operations (1)
|
|
—
|
|
|
1,225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,225
|
|
Tax effect
|
|
2,094
|
|
|
7
|
|
|
(969
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,133
|
|
OCI
|
|
37,195
|
|
|
(4,880
|
)
|
|
(969
|
)
|
|
1,226
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
32,616
|
|
Balance at March 31, 2018
|
|
375,341
|
|
|
(5,529
|
)
|
|
(5,547
|
)
|
|
12,814
|
|
|
(4,839
|
)
|
|
(748
|
)
|
|
1,293
|
|
|
372,785
|
|
Change during period
|
|
(97,491
|
)
|
|
3,051
|
|
|
—
|
|
|
(185
|
)
|
|
—
|
|
|
—
|
|
|
(414
|
)
|
|
(95,039
|
)
|
Reclassified to operations (1)
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
Tax effect
|
|
—
|
|
|
(788
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(784
|
)
|
OCI
|
|
(97,491
|
)
|
|
2,435
|
|
|
—
|
|
|
(181
|
)
|
|
—
|
|
|
—
|
|
|
(414
|
)
|
|
(95,651
|
)
|
Balance at June 30, 2018
|
|
277,850
|
|
|
(3,094
|
)
|
|
(5,547
|
)
|
|
12,633
|
|
|
(4,839
|
)
|
|
(748
|
)
|
|
879
|
|
|
277,134
|
|
10.
|
Segment Information
|
•
|
North America Gaming and Interactive
|
•
|
North America Lottery
|
•
|
International
|
•
|
Italy
|
|
|
For the three months ended June 30, 2019
|
||||||||||||||||||||||
($ thousands)
|
|
North America Gaming and Interactive
|
|
North America Lottery
|
|
International
|
|
Italy
|
|
Segment Total
|
|
Corporate Support
|
|
Purchase Accounting
|
|
Total
|
||||||||
Operating and Facilities Management Contracts
|
|
—
|
|
|
202,283
|
|
|
67,065
|
|
|
190,355
|
|
|
459,703
|
|
|
—
|
|
|
—
|
|
|
459,703
|
|
Machine gaming
|
|
105,678
|
|
|
24,600
|
|
|
12,216
|
|
|
137,549
|
|
|
280,043
|
|
|
—
|
|
|
—
|
|
|
280,043
|
|
Lottery Management Agreements
|
|
—
|
|
|
35,661
|
|
|
—
|
|
|
—
|
|
|
35,661
|
|
|
—
|
|
|
—
|
|
|
35,661
|
|
Other services
|
|
64,719
|
|
|
13,557
|
|
|
32,124
|
|
|
94,043
|
|
|
204,443
|
|
|
—
|
|
|
181
|
|
|
204,624
|
|
Service revenue
|
|
170,397
|
|
|
276,101
|
|
|
111,405
|
|
|
421,947
|
|
|
979,850
|
|
|
—
|
|
|
181
|
|
|
980,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gaming machines
|
|
73,104
|
|
|
—
|
|
|
81,689
|
|
|
—
|
|
|
154,793
|
|
|
—
|
|
|
—
|
|
|
154,793
|
|
Lottery product
|
|
—
|
|
|
32,250
|
|
|
3,157
|
|
|
—
|
|
|
35,407
|
|
|
—
|
|
|
—
|
|
|
35,407
|
|
Systems and other
|
|
30,404
|
|
|
617
|
|
|
32,621
|
|
|
380
|
|
|
64,022
|
|
|
—
|
|
|
—
|
|
|
64,022
|
|
Product sales
|
|
103,508
|
|
|
32,867
|
|
|
117,467
|
|
|
380
|
|
|
254,222
|
|
|
—
|
|
|
—
|
|
|
254,222
|
|
Total revenue
|
|
273,905
|
|
|
308,968
|
|
|
228,872
|
|
|
422,327
|
|
|
1,234,072
|
|
|
—
|
|
|
181
|
|
|
1,234,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
85,359
|
|
|
78,003
|
|
|
29,963
|
|
|
133,476
|
|
|
326,801
|
|
|
(55,012
|
)
|
|
(48,074
|
)
|
|
223,715
|
|
|
|
For the three months ended June 30, 2018
|
||||||||||||||||||||||
($ thousands)
|
|
North America Gaming and Interactive
|
|
North America Lottery
|
|
International
|
|
Italy
|
|
Segment Total
|
|
Corporate Support
|
|
Purchase Accounting
|
|
Total
|
||||||||
Operating and Facilities Management Contracts
|
|
—
|
|
|
197,341
|
|
|
70,126
|
|
|
193,097
|
|
|
460,564
|
|
|
—
|
|
|
—
|
|
|
460,564
|
|
Machine gaming
|
|
108,267
|
|
|
25,383
|
|
|
13,095
|
|
|
162,172
|
|
|
308,917
|
|
|
—
|
|
|
—
|
|
|
308,917
|
|
Lottery Management Agreements
|
|
—
|
|
|
38,914
|
|
|
—
|
|
|
—
|
|
|
38,914
|
|
|
—
|
|
|
—
|
|
|
38,914
|
|
Other services
|
|
60,893
|
|
|
12,840
|
|
|
39,531
|
|
|
85,226
|
|
|
198,490
|
|
|
—
|
|
|
182
|
|
|
198,672
|
|
Service revenue
|
|
169,160
|
|
|
274,478
|
|
|
122,752
|
|
|
440,495
|
|
|
1,006,885
|
|
|
—
|
|
|
182
|
|
|
1,007,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gaming machines
|
|
62,168
|
|
|
—
|
|
|
52,005
|
|
|
—
|
|
|
114,173
|
|
|
—
|
|
|
—
|
|
|
114,173
|
|
Lottery product
|
|
—
|
|
|
34,037
|
|
|
8,315
|
|
|
—
|
|
|
42,352
|
|
|
—
|
|
|
—
|
|
|
42,352
|
|
Systems and other
|
|
22,781
|
|
|
60
|
|
|
15,682
|
|
|
223
|
|
|
38,746
|
|
|
—
|
|
|
—
|
|
|
38,746
|
|
Product sales
|
|
84,949
|
|
|
34,097
|
|
|
76,002
|
|
|
223
|
|
|
195,271
|
|
|
—
|
|
|
—
|
|
|
195,271
|
|
Total revenue
|
|
254,109
|
|
|
308,575
|
|
|
198,754
|
|
|
440,718
|
|
|
1,202,156
|
|
|
—
|
|
|
182
|
|
|
1,202,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
65,578
|
|
|
80,428
|
|
|
36,103
|
|
|
130,951
|
|
|
313,060
|
|
|
(52,237
|
)
|
|
(51,746
|
)
|
|
209,077
|
|
|
|
For the six months ended June 30, 2019
|
||||||||||||||||||||||
($ thousands)
|
|
North America Gaming and Interactive
|
|
North America Lottery
|
|
International
|
|
Italy
|
|
Segment Total
|
|
Corporate Support
|
|
Purchase Accounting
|
|
Total
|
||||||||
Operating and Facilities Management Contracts
|
|
—
|
|
|
410,385
|
|
|
136,638
|
|
|
394,057
|
|
|
941,080
|
|
|
—
|
|
|
—
|
|
|
941,080
|
|
Machine gaming
|
|
205,568
|
|
|
49,652
|
|
|
24,569
|
|
|
276,260
|
|
|
556,049
|
|
|
—
|
|
|
—
|
|
|
556,049
|
|
Lottery Management Agreements
|
|
—
|
|
|
67,863
|
|
|
—
|
|
|
—
|
|
|
67,863
|
|
|
—
|
|
|
—
|
|
|
67,863
|
|
Other services
|
|
120,521
|
|
|
29,964
|
|
|
67,031
|
|
|
188,195
|
|
|
405,711
|
|
|
—
|
|
|
359
|
|
|
406,070
|
|
Service revenue
|
|
326,089
|
|
|
557,864
|
|
|
228,238
|
|
|
858,512
|
|
|
1,970,703
|
|
|
—
|
|
|
359
|
|
|
1,971,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gaming machines
|
|
136,553
|
|
|
—
|
|
|
117,013
|
|
|
—
|
|
|
253,566
|
|
|
—
|
|
|
—
|
|
|
253,566
|
|
Lottery product
|
|
—
|
|
|
46,256
|
|
|
7,564
|
|
|
—
|
|
|
53,820
|
|
|
—
|
|
|
—
|
|
|
53,820
|
|
Systems and other
|
|
51,200
|
|
|
890
|
|
|
48,114
|
|
|
517
|
|
|
100,721
|
|
|
—
|
|
|
—
|
|
|
100,721
|
|
Product sales
|
|
187,753
|
|
|
47,146
|
|
|
172,691
|
|
|
517
|
|
|
408,107
|
|
|
—
|
|
|
—
|
|
|
408,107
|
|
Total revenue
|
|
513,842
|
|
|
605,010
|
|
|
400,929
|
|
|
859,029
|
|
|
2,378,810
|
|
|
—
|
|
|
359
|
|
|
2,379,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
134,046
|
|
|
153,798
|
|
|
43,547
|
|
|
280,750
|
|
|
612,141
|
|
|
(113,436
|
)
|
|
(96,838
|
)
|
|
401,867
|
|
|
|
For the six months ended June 30, 2018
|
||||||||||||||||||||||
($ thousands)
|
|
North America Gaming and Interactive
|
|
North America Lottery
|
|
International
|
|
Italy
|
|
Segment Total
|
|
Corporate Support
|
|
Purchase Accounting
|
|
Total
|
||||||||
Operating and Facilities Management Contracts
|
|
—
|
|
|
402,782
|
|
|
141,761
|
|
|
407,013
|
|
|
951,556
|
|
|
—
|
|
|
—
|
|
|
951,556
|
|
Machine gaming
|
|
213,756
|
|
|
49,919
|
|
|
27,399
|
|
|
336,360
|
|
|
627,434
|
|
|
—
|
|
|
—
|
|
|
627,434
|
|
Lottery Management Agreements
|
|
—
|
|
|
74,636
|
|
|
—
|
|
|
—
|
|
|
74,636
|
|
|
—
|
|
|
—
|
|
|
74,636
|
|
Other services
|
|
109,704
|
|
|
26,183
|
|
|
84,127
|
|
|
180,019
|
|
|
400,033
|
|
|
—
|
|
|
359
|
|
|
400,392
|
|
Service revenue
|
|
323,460
|
|
|
553,520
|
|
|
253,287
|
|
|
923,392
|
|
|
2,053,659
|
|
|
—
|
|
|
359
|
|
|
2,054,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gaming machines
|
|
112,098
|
|
|
—
|
|
|
82,078
|
|
|
—
|
|
|
194,176
|
|
|
—
|
|
|
—
|
|
|
194,176
|
|
Lottery product
|
|
—
|
|
|
50,314
|
|
|
10,957
|
|
|
—
|
|
|
61,271
|
|
|
—
|
|
|
—
|
|
|
61,271
|
|
Systems and other
|
|
62,302
|
|
|
140
|
|
|
36,917
|
|
|
470
|
|
|
99,829
|
|
|
—
|
|
|
—
|
|
|
99,829
|
|
Product sales
|
|
174,400
|
|
|
50,454
|
|
|
129,952
|
|
|
470
|
|
|
355,276
|
|
|
—
|
|
|
—
|
|
|
355,276
|
|
Total revenue
|
|
497,860
|
|
|
603,974
|
|
|
383,239
|
|
|
923,862
|
|
|
2,408,935
|
|
|
—
|
|
|
359
|
|
|
2,409,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
122,737
|
|
|
156,824
|
|
|
57,662
|
|
|
278,085
|
|
|
615,308
|
|
|
(105,559
|
)
|
|
(103,677
|
)
|
|
406,072
|
|
11.
|
Other Operating (Income) Expense, Net
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Gain on sale of assets to distributor
|
|
(25,946
|
)
|
|
—
|
|
|
(25,946
|
)
|
|
—
|
|
Other
|
|
2,454
|
|
|
3,129
|
|
|
5,751
|
|
|
5,200
|
|
|
|
(23,492
|
)
|
|
3,129
|
|
|
(20,195
|
)
|
|
5,200
|
|
12.
|
Other Income (Expense), Net
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Redemption and tender premium
|
|
(8,521
|
)
|
|
(24,256
|
)
|
|
(8,521
|
)
|
|
(24,256
|
)
|
Unamortized debt issuance costs
|
|
(1,097
|
)
|
|
(4,259
|
)
|
|
(1,097
|
)
|
|
(4,259
|
)
|
Other
|
|
18
|
|
|
(1,355
|
)
|
|
2
|
|
|
(133
|
)
|
Total debt related
|
|
(9,600
|
)
|
|
(29,870
|
)
|
|
(9,616
|
)
|
|
(28,648
|
)
|
|
|
|
|
|
|
|
|
|
||||
Gain on sale of investments
|
|
33,882
|
|
|
—
|
|
|
33,882
|
|
|
—
|
|
Other
|
|
(789
|
)
|
|
(1,434
|
)
|
|
(1,271
|
)
|
|
325
|
|
|
|
23,493
|
|
|
(31,304
|
)
|
|
22,995
|
|
|
(28,323
|
)
|
13.
|
Earnings Per Share
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||
($ and shares in thousands, except per share amounts)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
||
Net income attributable to IGT PLC
|
|
4,856
|
|
|
161,496
|
|
|
45,110
|
|
|
58,350
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
|
|
|
|
|
|
||
Weighted-average shares - basic
|
|
204,407
|
|
|
204,118
|
|
|
204,309
|
|
|
203,859
|
|
Incremental shares under stock-based compensation plans
|
|
5
|
|
|
398
|
|
|
223
|
|
|
486
|
|
Weighted-average shares - diluted
|
|
204,412
|
|
|
204,516
|
|
|
204,532
|
|
|
204,345
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to IGT PLC per common share - basic
|
|
0.02
|
|
|
0.79
|
|
|
0.22
|
|
|
0.29
|
|
Net income attributable to IGT PLC per common share - diluted
|
|
0.02
|
|
|
0.79
|
|
|
0.22
|
|
|
0.29
|
|
•
|
North America Gaming and Interactive
|
•
|
North America Lottery
|
•
|
International
|
•
|
Italy
|
|
|
For the three months ended
|
||||||||||
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
($ thousands)
|
|
$
|
|
% of
Revenue
|
|
$
|
|
% of
Revenue
|
||||
Service revenue
|
|
980,031
|
|
|
79.4
|
|
|
1,007,067
|
|
|
83.8
|
|
Product sales
|
|
254,222
|
|
|
20.6
|
|
|
195,271
|
|
|
16.2
|
|
Total revenue
|
|
1,234,253
|
|
|
100.0
|
|
|
1,202,338
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of services
|
|
594,598
|
|
|
48.2
|
|
|
607,684
|
|
|
50.5
|
|
Cost of product sales
|
|
160,786
|
|
|
13.0
|
|
|
122,403
|
|
|
10.2
|
|
Selling, general and administrative
|
|
213,263
|
|
|
17.3
|
|
|
196,088
|
|
|
16.3
|
|
Research and development
|
|
65,383
|
|
|
5.3
|
|
|
63,957
|
|
|
5.3
|
|
Other operating (income) expense, net
|
|
(23,492
|
)
|
|
(1.9
|
)
|
|
3,129
|
|
|
0.3
|
|
Total operating expenses
|
|
1,010,538
|
|
|
81.9
|
|
|
993,261
|
|
|
82.6
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
|
223,715
|
|
|
18.1
|
|
|
209,077
|
|
|
17.4
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
|
(103,860
|
)
|
|
(8.4
|
)
|
|
(102,888
|
)
|
|
(8.6
|
)
|
Foreign exchange (loss) gain, net
|
|
(41,061
|
)
|
|
(3.3
|
)
|
|
172,546
|
|
|
14.4
|
|
Other income (expense), net
|
|
23,493
|
|
|
1.9
|
|
|
(31,304
|
)
|
|
(2.6
|
)
|
Total non-operating (expenses) income
|
|
(121,428
|
)
|
|
(9.8
|
)
|
|
38,354
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
||||
Income before provision for income taxes
|
|
102,287
|
|
|
8.3
|
|
|
247,431
|
|
|
20.6
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for income taxes
|
|
63,300
|
|
|
5.1
|
|
|
52,232
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
38,987
|
|
|
3.2
|
|
|
195,199
|
|
|
16.2
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Net income attributable to non-controlling interests
|
|
34,131
|
|
|
2.8
|
|
|
33,703
|
|
|
2.8
|
|
Net income attributable to IGT PLC
|
|
4,856
|
|
|
0.4
|
|
|
161,496
|
|
|
13.4
|
|
|
|
For the three months ended June 30,
|
|
$ Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
North America Gaming and Interactive
|
|
170,397
|
|
|
169,160
|
|
|
1,237
|
|
|
0.7
|
|
North America Lottery
|
|
276,101
|
|
|
274,478
|
|
|
1,623
|
|
|
0.6
|
|
International
|
|
111,405
|
|
|
122,752
|
|
|
(11,347
|
)
|
|
(9.2
|
)
|
Italy
|
|
421,947
|
|
|
440,495
|
|
|
(18,548
|
)
|
|
(4.2
|
)
|
Operating Segments
|
|
979,850
|
|
|
1,006,885
|
|
|
(27,035
|
)
|
|
(2.7
|
)
|
Corporate Support
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
181
|
|
|
182
|
|
|
(1
|
)
|
|
(0.5
|
)
|
|
|
980,031
|
|
|
1,007,067
|
|
|
(27,036
|
)
|
|
(2.7
|
)
|
|
|
Constant Currency Change
|
||||
($ thousands)
|
|
$
|
|
%
|
||
North America Gaming and Interactive
|
|
1,462
|
|
|
0.9
|
|
North America Lottery
|
|
1,717
|
|
|
0.6
|
|
International
|
|
(5,581
|
)
|
|
(4.5
|
)
|
Italy
|
|
2,963
|
|
|
0.7
|
|
Operating Segments
|
|
561
|
|
|
0.1
|
|
Corporate Support
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
—
|
|
|
—
|
|
|
|
561
|
|
|
0.1
|
|
•
|
A decrease of $2.4 million in Machine gaming, primarily driven by a shift in the mix of the installed base and a decrease in the average yield due to product mix; and
|
•
|
An increase of $3.9 million in Other services, principally due to a $5.6 million increase in sports betting; partially offset by a decrease of $2.0 million in usage-based royalties as a result of a contract renegotiation in the first quarter of 2019.
|
|
|
Service Revenue Change
|
||||
($ thousands)
|
|
Constant
Currency |
|
$ Change
|
||
Operating and Facilities Management Contracts
|
|
4,945
|
|
|
4,943
|
|
Lottery Management Agreements
|
|
(3,253
|
)
|
|
(3,253
|
)
|
Machine gaming
|
|
(783
|
)
|
|
(783
|
)
|
Other services
|
|
808
|
|
|
716
|
|
|
|
1,717
|
|
|
1,623
|
|
•
|
An increase of $4.9 million in Operating and Facilities Management Contracts, principally driven by strong same store revenue (revenue from existing customers as opposed to new customers) growth of 7.2%, primarily due to an increase of 5.4% in instant tickets and draw-based games and an increase of 23.8% in multi-state jackpot activity and recent contract wins and extensions with several customers within the United States, partially offset by the impact of the conclusion of the Illinois supply contract in the first quarter of 2019; and
|
•
|
A decrease of $3.3 million in Lottery Management Agreements ("LMA"), primarily related to a decrease in the amount of expected LMA incentives earned in the three months ended June 30, 2019 compared to the three months ended June 30, 2018.
|
|
|
Service Revenue Change
|
||||
($ thousands)
|
|
Constant
Currency |
|
$ Change
|
||
Operating and Facilities Management Contracts
|
|
(787
|
)
|
|
(3,060
|
)
|
Machine gaming
|
|
350
|
|
|
(879
|
)
|
Other services
|
|
(5,144
|
)
|
|
(7,408
|
)
|
|
|
(5,581
|
)
|
|
(11,347
|
)
|
•
|
A decrease of $2.4 million in interactive, primarily driven by lower levels of remote game server and multi-jackpot activity;
|
•
|
A decrease of $1.0 million in system service revenue, principally within Europe; and
|
•
|
A decrease of $0.9 million in commercial services, primarily related to Latin America.
|
|
|
Service Revenue Change
|
||||
($ thousands)
|
|
Constant Currency
|
|
$ Change
|
||
Operating and Facilities Management Contracts
|
|
6,962
|
|
|
(2,741
|
)
|
Machine gaming
|
|
(17,701
|
)
|
|
(24,623
|
)
|
Other services
|
|
13,702
|
|
|
8,816
|
|
|
|
2,963
|
|
|
(18,548
|
)
|
|
|
For the three months ended June 30,
|
|
Change
|
||||||||
(€ millions)
|
|
2019
|
|
2018
|
|
€
|
|
%
|
||||
10eLotto
|
|
1,507
|
|
|
1,422
|
|
|
85
|
|
|
6.0
|
|
Core
|
|
479
|
|
|
471
|
|
|
8
|
|
|
1.7
|
|
Million Day
|
|
47
|
|
|
54
|
|
|
(7
|
)
|
|
(13.0
|
)
|
Late Numbers
|
|
31
|
|
|
33
|
|
|
(2
|
)
|
|
(6.1
|
)
|
|
|
2,064
|
|
|
1,980
|
|
|
84
|
|
|
4.2
|
|
|
|
For the three months ended June 30,
|
|
Change
|
|||||||
(€ millions)
|
|
2019
|
|
2018
|
|
€
|
|
%
|
|||
Total wagers
|
|
2,257
|
|
|
2,237
|
|
|
20
|
|
|
0.9
|
|
|
For the three months ended June 30,
|
|
Change
|
|||||||
(€ millions)
|
|
2019
|
|
2018
|
|
€
|
|
%
|
|||
VLT wagers
|
|
1,427
|
|
|
1,407
|
|
|
20
|
|
|
1.4
|
AWP wagers
|
|
916
|
|
|
885
|
|
|
31
|
|
|
3.5
|
Total wagers
|
|
2,343
|
|
|
2,292
|
|
|
51
|
|
|
2.2
|
•
|
An increase of $8.8 million in commercial services, primarily related to an increase in POS fees as a result of a new service offering;
|
•
|
A 3.3% increase in sports betting wagers (€252.0 million for the three months ended June 30, 2019 compared to €244.0 million for the three months ended June 30, 2018) and a slightly lower combined payout in sports betting (82.3% for the three months ended June 30, 2019 compared to 82.9% for the three months ended June 30, 2018); and
|
•
|
An increase of 10.7% in interactive game wagers (€508.0 million for the three months ended June 30, 2019 compared to €459.0 million for the three months ended June 30, 2018).
|
|
|
For the three months ended June 30,
|
|
$ Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
North America Gaming and Interactive
|
|
103,508
|
|
|
84,949
|
|
|
18,559
|
|
|
21.8
|
|
North America Lottery
|
|
32,867
|
|
|
34,097
|
|
|
(1,230
|
)
|
|
(3.6
|
)
|
International
|
|
117,467
|
|
|
76,002
|
|
|
41,465
|
|
|
54.6
|
|
Italy
|
|
380
|
|
|
223
|
|
|
157
|
|
|
70.4
|
|
Operating Segments
|
|
254,222
|
|
|
195,271
|
|
|
58,951
|
|
|
30.2
|
|
Corporate Support
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
254,222
|
|
|
195,271
|
|
|
58,951
|
|
|
30.2
|
|
|
|
Constant Currency Change
|
||||
($ thousands)
|
|
$
|
|
%
|
||
North America Gaming and Interactive
|
|
18,652
|
|
|
22.0
|
|
North America Lottery
|
|
(1,067
|
)
|
|
(3.1
|
)
|
International
|
|
45,110
|
|
|
59.4
|
|
Italy
|
|
172
|
|
|
77.1
|
|
Operating Segments
|
|
62,867
|
|
|
32.2
|
|
Corporate Support
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
—
|
|
|
—
|
|
|
|
62,867
|
|
|
32.2
|
|
•
|
An increase of $11.0 million in Gaming machines, principally associated with 111 more machines sold during the current period, along with an increase in the average selling price driven by product mix; and
|
•
|
An increase of $7.7 million in Systems and other, primarily driven by systems related sales to a new casino opening in Massachusetts.
|
•
|
A decrease of $4.9 million in Lottery product, primarily related to product sales in Europe in the prior period;
|
•
|
An increase of $31.5 million in Gaming machines, primarily driven by a $17.5 million increase in terminal sales in Latin America and a $10.4 million increase in VLT sales in Europe; and
|
•
|
An increase of $18.5 million in Systems and other, principally due to a $20.0 million increase in software sales, primarily driven by an increase in AWP sales in Europe; partially offset by a $1.3 million decrease in system product sales, primarily related to sales in Asia Pacific in the prior period.
|
|
|
Constant Currency Change
|
|
$ Change
|
|||||||
($ thousands)
|
|
$
|
|
%
|
|
$
|
|
%
|
|||
Cost of services
|
|
3,093
|
|
|
0.5
|
|
(13,086
|
)
|
|
(2.2
|
)
|
Cost of product sales
|
|
41,228
|
|
|
33.7
|
|
38,383
|
|
|
31.4
|
|
Selling, general and administrative
|
|
21,454
|
|
|
10.9
|
|
17,175
|
|
|
8.8
|
|
Research and development
|
|
3,364
|
|
|
5.3
|
|
1,426
|
|
|
2.2
|
|
Other operating (income) expense, net
|
|
(26,620
|
)
|
|
> (200.0)
|
|
(26,621
|
)
|
|
> (200.0)
|
|
Total operating expenses
|
|
42,519
|
|
|
4.3
|
|
17,277
|
|
|
1.7
|
|
•
|
A $5.8 million increase in the North America Gaming and Interactive segment, primarily related to:
|
◦
|
A $3.3 million increase in other costs, principally due to a vendor contract cancellation;
|
◦
|
A $2.1 million increase in depreciation and amortization;
|
•
|
A $6.5 million increase in the North America Lottery segment, primarily related to:
|
◦
|
A $2.4 million increase in depreciation and amortization expense, primarily driven by capital expenditure requirements arising from new contract wins and extensions with several customers in the United States;
|
◦
|
A $1.8 million increase in other expenses, primarily driven by an increase in LMA reimbursable expenses and communication lease expense;
|
◦
|
A $1.4 million increase in outside services, principally due to an increase in sports betting and equipment removal costs;
|
•
|
A $9.1 million decrease in the Italy segment, primarily related to:
|
◦
|
A $4.7 million decrease in marketing and advertising expense, primarily related to costs incurred for lottery games that did not recur in the current period and the timing of when marketing and advertising expense will be incurred in 2019; and
|
◦
|
A $4.4 million decrease in POS fees, primarily related to a decrease in VLT and AWP POS fees, partially offset by an increase in commercial services POS fees.
|
•
|
An $8.6 million increase in the North America Gaming and Interactive segment, primarily related to the $18.7 million increase in product sales and the product mix sold during the three months ended June 30, 2019; and
|
•
|
A $35.5 million increase in the International segment, primarily related to the $45.1 million increase in product sales and the product mix sold during the three months ended June 30, 2019.
|
|
|
For the three months ended June 30,
|
||||
($ thousands)
|
|
2019
|
|
2018
|
||
Gain on sale of assets to distributor
|
|
(25,946
|
)
|
|
—
|
|
Other
|
|
2,454
|
|
|
3,129
|
|
|
|
(23,492
|
)
|
|
3,129
|
|
|
|
For the three months ended
June 30, |
|
$ Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
North America Gaming and Interactive
|
|
85,359
|
|
|
65,578
|
|
|
19,781
|
|
|
30.2
|
|
North America Lottery
|
|
78,003
|
|
|
80,428
|
|
|
(2,425
|
)
|
|
(3.0
|
)
|
International
|
|
29,963
|
|
|
36,103
|
|
|
(6,140
|
)
|
|
(17.0
|
)
|
Italy
|
|
133,476
|
|
|
130,951
|
|
|
2,525
|
|
|
1.9
|
|
Operating Segments
|
|
326,801
|
|
|
313,060
|
|
|
13,741
|
|
|
4.4
|
|
Corporate Support
|
|
(55,012
|
)
|
|
(52,237
|
)
|
|
(2,775
|
)
|
|
(5.3
|
)
|
Purchase Accounting
|
|
(48,074
|
)
|
|
(51,746
|
)
|
|
3,672
|
|
|
7.1
|
|
|
|
223,715
|
|
|
209,077
|
|
|
14,638
|
|
|
7.0
|
|
|
|
Constant Currency Change
|
||||
($ thousands)
|
|
$
|
|
%
|
||
North America Gaming and Interactive
|
|
17,886
|
|
|
27.3
|
|
North America Lottery
|
|
(2,320
|
)
|
|
(2.9
|
)
|
International
|
|
(4,031
|
)
|
|
(11.2
|
)
|
Italy
|
|
10,329
|
|
|
7.9
|
|
Operating Segments
|
|
21,864
|
|
|
7.0
|
|
Corporate Support
|
|
(4,611
|
)
|
|
(8.8
|
)
|
Purchase Accounting
|
|
3,655
|
|
|
7.1
|
|
|
|
20,908
|
|
|
10.0
|
|
|
|
Operating Margin
|
||||
|
|
For the three months ended
June 30, |
||||
|
|
2019
|
|
2018
|
||
North America Gaming and Interactive
|
|
31.2
|
%
|
|
25.8
|
%
|
North America Lottery
|
|
25.2
|
%
|
|
26.1
|
%
|
International
|
|
13.1
|
%
|
|
18.2
|
%
|
Italy
|
|
31.6
|
%
|
|
29.7
|
%
|
|
|
For the three months ended
June 30, |
|
Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
Senior Secured Notes
|
|
(86,425
|
)
|
|
(86,590
|
)
|
|
(165
|
)
|
|
(0.2
|
)
|
Term Loan Facilities
|
|
(9,468
|
)
|
|
(9,848
|
)
|
|
(380
|
)
|
|
(3.9
|
)
|
Revolving Credit Facilities
|
|
(9,017
|
)
|
|
(7,033
|
)
|
|
1,984
|
|
|
28.2
|
|
Other
|
|
(1,649
|
)
|
|
(2,768
|
)
|
|
(1,119
|
)
|
|
(40.4
|
)
|
Interest expense
|
|
(106,559
|
)
|
|
(106,239
|
)
|
|
320
|
|
|
0.3
|
|
Interest income
|
|
2,699
|
|
|
3,351
|
|
|
652
|
|
|
19.5
|
|
Interest expense, net
|
|
(103,860
|
)
|
|
(102,888
|
)
|
|
972
|
|
|
0.9
|
|
|
|
For the three months ended
June 30, |
|
Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
Gain on sale of investments
|
|
33,882
|
|
|
—
|
|
|
33,882
|
|
|
-
|
|
Debt related transactions
|
|
(9,600
|
)
|
|
(29,870
|
)
|
|
20,270
|
|
|
(67.9
|
)
|
Other
|
|
(789
|
)
|
|
(1,434
|
)
|
|
645
|
|
|
(45.0
|
)
|
|
|
23,493
|
|
|
(31,304
|
)
|
|
54,797
|
|
|
(175.0
|
)
|
|
|
For the three months ended
June 30, |
||||
($ thousands, except percentages)
|
|
2019
|
|
2018
|
||
Provision for income taxes
|
|
63,300
|
|
|
52,232
|
|
Income before provision for income taxes
|
|
102,287
|
|
|
247,431
|
|
Effective income tax rate (determined using an estimated annual effective tax rate)
|
|
61.9
|
%
|
|
21.1
|
%
|
|
|
For the six months ended
|
||||||||||
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
($ thousands)
|
|
$
|
|
% of
Revenue
|
|
$
|
|
% of
Revenue
|
||||
Service revenue
|
|
1,971,062
|
|
|
82.8
|
|
|
2,054,018
|
|
|
85.3
|
|
Product sales
|
|
408,107
|
|
|
17.2
|
|
|
355,276
|
|
|
14.7
|
|
Total revenue
|
|
2,379,169
|
|
|
100.0
|
|
|
2,409,294
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of services
|
|
1,189,925
|
|
|
50.0
|
|
|
1,225,742
|
|
|
50.9
|
|
Cost of product sales
|
|
260,971
|
|
|
11.0
|
|
|
225,754
|
|
|
9.4
|
|
Selling, general and administrative
|
|
415,100
|
|
|
17.4
|
|
|
411,306
|
|
|
17.1
|
|
Research and development
|
|
131,501
|
|
|
5.5
|
|
|
135,220
|
|
|
5.6
|
|
Other operating (income) expense, net
|
|
(20,195
|
)
|
|
(0.8
|
)
|
|
5,200
|
|
|
0.2
|
|
Total operating expenses
|
|
1,977,302
|
|
|
83.1
|
|
|
2,003,222
|
|
|
83.1
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
|
401,867
|
|
|
16.9
|
|
|
406,072
|
|
|
16.9
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
|
(206,929
|
)
|
|
(8.7
|
)
|
|
(210,168
|
)
|
|
(8.7
|
)
|
Foreign exchange gain, net
|
|
17,541
|
|
|
0.7
|
|
|
75,851
|
|
|
3.1
|
|
Other income (expense), net
|
|
22,995
|
|
|
1.0
|
|
|
(28,323
|
)
|
|
(1.2
|
)
|
Total non-operating expenses
|
|
(166,393
|
)
|
|
(7.0
|
)
|
|
(162,640
|
)
|
|
(6.8
|
)
|
|
|
|
|
|
|
|
|
|
||||
Income before provision for income taxes
|
|
235,474
|
|
|
9.9
|
|
|
243,432
|
|
|
10.1
|
|
Provision for income taxes
|
|
115,992
|
|
|
4.9
|
|
|
112,737
|
|
|
4.7
|
|
Net income
|
|
119,482
|
|
|
5.0
|
|
|
130,695
|
|
|
5.4
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Net income attributable to non-controlling interests
|
|
74,372
|
|
|
3.1
|
|
|
52,019
|
|
|
2.2
|
|
Less: Net income attributable to redeemable non-controlling interests
|
|
—
|
|
|
—
|
|
|
20,326
|
|
|
0.8
|
|
Net income attributable to IGT PLC
|
|
45,110
|
|
|
1.9
|
|
|
58,350
|
|
|
2.4
|
|
|
|
For the six months ended
June 30, |
|
$ Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
North America Gaming and Interactive
|
|
326,089
|
|
|
323,460
|
|
|
2,629
|
|
|
0.8
|
|
North America Lottery
|
|
557,864
|
|
|
553,520
|
|
|
4,344
|
|
|
0.8
|
|
International
|
|
228,238
|
|
|
253,287
|
|
|
(25,049
|
)
|
|
(9.9
|
)
|
Italy
|
|
858,512
|
|
|
923,392
|
|
|
(64,880
|
)
|
|
(7.0
|
)
|
Operating Segments
|
|
1,970,703
|
|
|
2,053,659
|
|
|
(82,956
|
)
|
|
(4.0
|
)
|
Corporate Support
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
359
|
|
|
359
|
|
|
—
|
|
|
—
|
|
|
|
1,971,062
|
|
|
2,054,018
|
|
|
(82,956
|
)
|
|
(4.0
|
)
|
|
|
Constant Currency Change
|
||||
($ thousands)
|
|
$
|
|
%
|
||
North America Gaming and Interactive
|
|
3,087
|
|
|
1.0
|
|
North America Lottery
|
|
4,802
|
|
|
0.9
|
|
International
|
|
(10,561
|
)
|
|
(4.2
|
)
|
Italy
|
|
(6,749
|
)
|
|
(0.7
|
)
|
Operating Segments
|
|
(9,421
|
)
|
|
(0.5
|
)
|
Corporate Support
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
—
|
|
|
—
|
|
|
|
(9,421
|
)
|
|
(0.5
|
)
|
•
|
A decrease of $7.8 million in Machine gaming, primarily driven by a shift in the mix of the installed base and a decrease in the average yield due to product mix; and
|
•
|
An increase of $10.9 million in Other services, principally due to an increase of $8.3 million in poker revenue, primarily due to two multi-year poker site license contracts and a $6.2 million increase in sports betting, partially offset by a decrease of $2.8 million in usage-based royalties as a result of a contract renegotiation in the first quarter of 2019.
|
|
|
Service Revenue Change
|
||||
($ thousands)
|
|
Constant
Currency |
|
$ Change
|
||
Operating and Facilities Management Contracts
|
|
7,607
|
|
|
7,604
|
|
Lottery Management Agreements
|
|
(6,773
|
)
|
|
(6,773
|
)
|
Machine gaming
|
|
(268
|
)
|
|
(268
|
)
|
Other services
|
|
4,236
|
|
|
3,781
|
|
|
|
4,802
|
|
|
4,344
|
|
•
|
An increase of $7.6 million in Operating and Facilities Management Contracts, principally driven by strong same store revenue (revenue from existing customers as opposed to new customers) growth of 4.9%, primarily due to an increase of 5.3% in instant tickets and draw-based games and an increase of 2.6% in multi-state jackpot activity and a reversal of contra-revenue related to service level agreement provisions incurred in the prior period, partially offset by the impact of the conclusion of the Illinois supply contract in the first quarter of 2019;
|
•
|
A decrease of $6.8 million in Lottery Management Agreements, primarily related to a $4.0 million decrease in pass through service revenue related to the timing of reimbursable expenses from a LMA contract and a decrease in the amount of expected LMA incentives earned in the six months ended June 30, 2019 compared to the six months ended June 30, 2018; and
|
•
|
An increase of $4.2 million in Other services, principally due to the launch of sports betting in Rhode Island in the last quarter of 2018 and the expansion of an online jackpot game in Canada.
|
|
|
Service Revenue Change
|
||||
($ thousands)
|
|
Constant
Currency |
|
$ Change
|
||
Operating and Facilities Management Contracts
|
|
1,048
|
|
|
(5,123
|
)
|
Machine gaming
|
|
177
|
|
|
(2,830
|
)
|
Other services
|
|
(11,786
|
)
|
|
(17,096
|
)
|
|
|
(10,561
|
)
|
|
(25,049
|
)
|
•
|
An increase of $1.0 million in Operating and Facilities Management Contracts, principally driven by same store revenue growth of 3.6%, primarily due to a 2.8% increase in instant tickets and draw-based games and a 16.7% increase in multi-jackpot activity; and
|
•
|
A decrease of $11.8 million in Other services, principally due to a decrease of $5.3 million in software service sales, primarily driven by a $4.1 million decrease in Europe and a decrease of $5.0 million in interactive, primarily driven by lower levels of remote game server and multi-jackpot activity.
|
|
|
Service Revenue Change
|
||||
($ thousands)
|
|
Constant Currency
|
|
$ Change
|
||
Operating and Facilities Management Contracts
|
|
13,875
|
|
|
(12,956
|
)
|
Machine gaming
|
|
(41,543
|
)
|
|
(60,101
|
)
|
Other services
|
|
20,919
|
|
|
8,177
|
|
|
|
(6,749
|
)
|
|
(64,880
|
)
|
|
|
For the six months ended
June 30, |
|
Change
|
||||||||
(€ millions)
|
|
2019
|
|
2018
|
|
€
|
|
%
|
||||
10eLotto
|
|
3,051
|
|
|
2,873
|
|
|
178
|
|
|
6.2
|
|
Core
|
|
980
|
|
|
975
|
|
|
5
|
|
|
0.5
|
|
Million Day
|
|
97
|
|
|
88
|
|
|
9
|
|
|
10.2
|
|
Late Numbers
|
|
78
|
|
|
79
|
|
|
(1
|
)
|
|
(1.3
|
)
|
|
|
4,206
|
|
|
4,015
|
|
|
191
|
|
|
4.8
|
|
|
|
For the six months ended
June 30, |
|
Change
|
||||||||
(€ millions)
|
|
2019
|
|
2018
|
|
€
|
|
%
|
||||
Total wagers
|
|
4,643
|
|
|
4,645
|
|
|
(2
|
)
|
|
—
|
|
•
|
An increase of $16.3 million in commercial services, primarily related to an increase in POS fees as a result of a new service offering during the six months ended June 30, 2019;
|
•
|
A 7.1% increase in sports betting wagers (€526.0 million for the six months ended June 30, 2019 compared to €491.0 million for the six months ended June 30, 2018), partially offset by a higher combined payout in sports betting (82.8% for the six months ended June 30, 2019 compared to 82.1% for the six months ended June 30, 2018); and
|
•
|
An increase of 4.8% in interactive game wagers (€997.0 million for the six months ended June 30, 2019 compared to €951.0 million for the six months ended June 30, 2018).
|
|
|
For the six months ended
June 30, |
|
$ Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
North America Gaming and Interactive
|
|
187,753
|
|
|
174,400
|
|
|
13,353
|
|
|
7.7
|
|
North America Lottery
|
|
47,146
|
|
|
50,454
|
|
|
(3,308
|
)
|
|
(6.6
|
)
|
International
|
|
172,691
|
|
|
129,952
|
|
|
42,739
|
|
|
32.9
|
|
Italy
|
|
517
|
|
|
470
|
|
|
47
|
|
|
10.0
|
|
Operating Segments
|
|
408,107
|
|
|
355,276
|
|
|
52,831
|
|
|
14.9
|
|
Corporate Support
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
408,107
|
|
|
355,276
|
|
|
52,831
|
|
|
14.9
|
|
|
|
Constant Currency Change
|
||||
($ thousands)
|
|
$
|
|
%
|
||
North America Gaming and Interactive
|
|
13,654
|
|
|
7.8
|
|
North America Lottery
|
|
(2,782
|
)
|
|
(5.5
|
)
|
International
|
|
48,970
|
|
|
37.7
|
|
Italy
|
|
70
|
|
|
14.9
|
|
Operating Segments
|
|
59,912
|
|
|
16.9
|
|
Corporate Support
|
|
—
|
|
|
—
|
|
Purchase Accounting
|
|
—
|
|
|
—
|
|
|
|
59,912
|
|
|
16.9
|
|
•
|
An increase of $24.7 million in Gaming machines, principally associated with 411 more machines sold during the current period, along with an increase in the average selling price driven by product mix; and
|
•
|
A decrease of $11.1 million in Systems and other, primarily driven by:
|
◦
|
A $4.4 million decrease in systems sales, principally due to significant systems related sales in the prior period, partially offset by systems related sales to a new casino opening in Massachusetts;
|
◦
|
A $4.0 million decrease in software sales, primarily due to fewer conversions and a decrease in software deliveries; and
|
◦
|
A $2.6 million decrease in intellectual property revenue, primarily related to a multi-year license in the prior period.
|
•
|
A decrease of $2.9 million in Lottery product, primarily related to higher product sales in Europe in the prior period;
|
•
|
An increase of $38.1 million in Gaming machines, primarily driven by a $19.8 million increase in terminal sales in Latin America and a $16.5 million increase in terminal and VLT sales in Europe; and
|
•
|
An increase of $13.8 million in Systems and other, principally due to a $22.5 million increase in software sales, primarily driven by an increase in AWP sales in Europe; partially offset by a $9.5 million decrease in system product sales, primarily related to sales in Asia Pacific in the prior period.
|
|
|
Constant Currency Change
|
|
$ Change
|
|||||||
($ thousands)
|
|
$
|
|
%
|
|
$
|
|
%
|
|||
Cost of services
|
|
7,595
|
|
|
0.6
|
|
(35,817
|
)
|
|
(2.9
|
)
|
Cost of product sales
|
|
39,551
|
|
|
17.5
|
|
35,217
|
|
|
15.6
|
|
Selling, general and administrative
|
|
14,350
|
|
|
3.5
|
|
3,794
|
|
|
0.9
|
|
Research and development
|
|
1,003
|
|
|
0.7
|
|
(3,719
|
)
|
|
(2.8
|
)
|
Other operating (income) expense, net
|
|
(25,392
|
)
|
|
> (200.0)
|
|
(25,395
|
)
|
|
> (200.0)
|
|
Total operating expenses
|
|
37,107
|
|
|
1.9
|
|
(25,920
|
)
|
|
(1.3
|
)
|
•
|
A $17.0 million increase in the North America Gaming and Interactive segment, primarily related to:
|
◦
|
A $10.6 million increase in depreciation and amortization;
|
◦
|
A $3.1 million increase in other costs, principally due to a vendor contract cancellation;
|
◦
|
A $2.4 million increase in licensing and royalties, primarily related to multi-year poker site licenses;
|
•
|
An $11.7 million increase in the North America Lottery segment, primarily related to:
|
◦
|
A $7.8 million increase in depreciation and amortization expense, primarily driven by capital expenditure requirements arising from new contract wins and extensions with several customers in the United States;
|
◦
|
A $1.5 million increase in postage and freight expense, primarily driven by increased instant ticket sales in the United States and distributions in Florida;
|
◦
|
A $1.5 million increase in outside services, principally due to an increase in sports betting and equipment removal costs;
|
•
|
A $10.1 million increase in the International segment, primarily related to:
|
◦
|
A $5.4 million increase in other operating expenses, primarily related to a lottery contract settlement;
|
◦
|
A $1.4 million increase in POS fees, principally due to the 3.6% increase in same store revenues;
|
◦
|
A $1.3 million increase in outside services, primarily due to various projects including bid activity;
|
•
|
A $27.2 million decrease in the Italy segment, primarily related to:
|
◦
|
A $15.0 million decrease in marketing and advertising expense, primarily related to costs incurred for lottery games that did not recur in the current period and the timing of when marketing and advertising expense will be incurred in 2019;
|
◦
|
An $11.4 million decrease in POS fees, primarily related to a decrease in VLT and AWP POS fees, partially offset by an increase in commercial services POS fees; and
|
•
|
A $5.6 million decrease in Purchase Accounting related to a decrease in depreciation and amortization.
|
•
|
A $5.4 million increase in the North America Gaming and Interactive segment, primarily related to the $13.7 million increase in product sales and the product mix sold during the six months ended June 30, 2019;
|
•
|
A $4.6 million decrease in the North America Lottery segment, primarily related to the $3.6 million decrease in lottery product sales; and
|
•
|
A $38.4 million increase in the International segment, primarily related to the $49.0 million increase in product sales and the product mix sold during the six months ended June 30, 2019.
|
|
|
For the six months ended June 30,
|
||||
($ thousands)
|
|
2019
|
|
2018
|
||
Gain on sale of assets to distributor
|
|
(25,946
|
)
|
|
—
|
|
Other
|
|
5,751
|
|
|
5,200
|
|
|
|
(20,195
|
)
|
|
5,200
|
|
|
|
For the six months ended
June 30, |
|
$ Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
North America Gaming and Interactive
|
|
134,046
|
|
|
122,737
|
|
|
11,309
|
|
|
9.2
|
|
North America Lottery
|
|
153,798
|
|
|
156,824
|
|
|
(3,026
|
)
|
|
(1.9
|
)
|
International
|
|
43,547
|
|
|
57,662
|
|
|
(14,115
|
)
|
|
(24.5
|
)
|
Italy
|
|
280,750
|
|
|
278,085
|
|
|
2,665
|
|
|
1.0
|
|
Operating Segments
|
|
612,141
|
|
|
615,308
|
|
|
(3,167
|
)
|
|
(0.5
|
)
|
Corporate support
|
|
(113,436
|
)
|
|
(105,559
|
)
|
|
(7,877
|
)
|
|
(7.5
|
)
|
Purchase Accounting
|
|
(96,838
|
)
|
|
(103,677
|
)
|
|
6,839
|
|
|
6.6
|
|
|
|
401,867
|
|
|
406,072
|
|
|
(4,205
|
)
|
|
(1.0
|
)
|
|
|
Constant Currency Change
|
||||
($ thousands)
|
|
$
|
|
%
|
||
North America Gaming and Interactive
|
|
6,671
|
|
|
5.4
|
|
North America Lottery
|
|
(2,487
|
)
|
|
(1.6
|
)
|
International
|
|
(9,058
|
)
|
|
(15.7
|
)
|
Italy
|
|
24,152
|
|
|
8.7
|
|
Operating Segments
|
|
19,278
|
|
|
3.1
|
|
Corporate support
|
|
(12,604
|
)
|
|
(11.9
|
)
|
Purchase Accounting
|
|
6,770
|
|
|
6.5
|
|
|
|
13,444
|
|
|
3.3
|
|
|
|
Operating Margin
|
||||
|
|
For the six months ended
June 30, |
||||
|
|
2019
|
|
2018
|
||
North America Gaming and Interactive
|
|
26.1
|
%
|
|
24.7
|
%
|
North America Lottery
|
|
25.4
|
%
|
|
26.0
|
%
|
International
|
|
10.9
|
%
|
|
15.0
|
%
|
Italy
|
|
32.7
|
%
|
|
30.1
|
%
|
|
|
For the six months ended
June 30, |
|
Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
Senior Secured Notes
|
|
(172,526
|
)
|
|
(178,092
|
)
|
|
(5,566
|
)
|
|
(3.1
|
)
|
Term Loan Facilities
|
|
(18,955
|
)
|
|
(20,013
|
)
|
|
(1,058
|
)
|
|
(5.3
|
)
|
Revolving Credit Facilities
|
|
(18,107
|
)
|
|
(13,276
|
)
|
|
4,831
|
|
|
36.4
|
|
Other
|
|
(3,000
|
)
|
|
(5,137
|
)
|
|
(2,137
|
)
|
|
(41.6
|
)
|
Interest expense
|
|
(212,588
|
)
|
|
(216,518
|
)
|
|
(3,930
|
)
|
|
(1.8
|
)
|
Interest income
|
|
5,659
|
|
|
6,350
|
|
|
691
|
|
|
10.9
|
|
Interest expense, net
|
|
(206,929
|
)
|
|
(210,168
|
)
|
|
(3,239
|
)
|
|
(1.5
|
)
|
|
|
For the six months ended
June 30, |
|
Change
|
||||||||
($ thousands)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||
Gain on sale of investments
|
|
33,882
|
|
|
—
|
|
|
33,882
|
|
|
-
|
|
Debt related transactions
|
|
(9,616
|
)
|
|
(28,648
|
)
|
|
19,032
|
|
|
(66.4
|
)
|
Other
|
|
(1,271
|
)
|
|
325
|
|
|
(1,596
|
)
|
|
> (200.0)
|
|
|
|
22,995
|
|
|
(28,323
|
)
|
|
51,318
|
|
|
(181.2
|
)
|
|
|
For the six months ended
June 30, |
||||
($ thousands, except percentages)
|
|
2019
|
|
2018
|
||
Provision for income taxes
|
|
115,992
|
|
|
112,737
|
|
Income before provision for income taxes
|
|
235,474
|
|
|
243,432
|
|
Effective income tax rate (determined using an estimated annual effective tax rate)
|
|
49.3
|
%
|
|
46.3
|
%
|
($ thousands)
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Revolving Credit Facilities due 2021(1)
|
|
1,944,050
|
|
|
1,601,968
|
|
Cash and cash equivalents
|
|
400,928
|
|
|
250,669
|
|
Total Liquidity
|
|
2,344,978
|
|
|
1,852,637
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
(in thousands)
|
|
euro
|
|
$
|
|
euro
|
|
$
|
||||
Scratch & Win
|
|
150,483
|
|
|
171,250
|
|
|
128,515
|
|
|
147,150
|
|
Commercial services
|
|
83,531
|
|
|
95,058
|
|
|
74,609
|
|
|
85,427
|
|
|
|
234,014
|
|
|
266,308
|
|
|
203,124
|
|
|
232,577
|
|
($ thousands)
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Trade receivables
|
|
25,965
|
|
|
21,383
|
|
Customer financing receivables
|
|
1,802
|
|
|
6,865
|
|
|
|
27,767
|
|
|
28,248
|
|
|
|
For the six months ended
June 30, |
||||
($ thousands)
|
|
2019
|
|
2018
|
||
Net cash provided by operating activities
|
|
591,721
|
|
|
120,150
|
|
Net cash used in investing activities
|
|
(163,029
|
)
|
|
(251,444
|
)
|
Net cash used in financing activities
|
|
(279,688
|
)
|
|
(329,897
|
)
|
Net cash flows
|
|
149,004
|
|
|
(461,191
|
)
|
•
|
An increase of $366.3 million related to the decrease in upfront Italian license fee payments for the six months ended June 30, 2019 compared to the six months ended June 30, 2018;
|
•
|
An increase of $51.3 million related to the decrease in interest paid;
|
•
|
An increase of $56.9 million in the change in other current assets, principally due to the adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) in the prior period;
|
•
|
An increase of $23.2 million in the change in accrued expenses related to timing;
|
•
|
An increase of $21.6 million related to changes in inventories; and
|
•
|
A decrease of $63.1 million related to the increase in income taxes paid.
|
•
|
Capital expenditures of $231.0 million, including:
|
◦
|
$80.2 million in the North America Lottery segment, principally for lottery contracts, including California, Florida and New York;
|
◦
|
$64.8 million in the North America Gaming and Interactive segment, primarily due to the investment in new machines in the casino installed base;
|
◦
|
$59.5 million in the Italy segment, principally for Lotto and Machine gaming; and
|
◦
|
$23.1 million in the International segment, principally related to the investment in new machines in the casino installed base.
|
•
|
Capital expenditures of $259.0 million, including:
|
◦
|
$82.7 million in the Italy segment, principally for Lotto and Machine gaming;
|
◦
|
$78.6 million in the North America Gaming and Interactive segment, primarily due to the investment in new machines in the casino installed base;
|
◦
|
$67.4 million in the North America Lottery segment, principally for lottery contracts, including South Carolina, West Virginia and New York; and
|
◦
|
$26.2 million in the International segment, principally related to upgrading the casino and VLT installed base to newer machines.
|
•
|
The Company made principal payments on long-term debt of $833.1 million, primarily composed of:
|
◦
|
Principal payments of $497.5 million on its €437.6 million 4.125% Notes in connection with the repurchase in June 2019; and
|
◦
|
Net payments of $335.6 million on the Revolving Credit Facilities due July 2021;
|
•
|
Dividends paid and capital returned to non-controlling shareholders of $129.4 million and $70.4 million, respectively;
|
•
|
Dividends paid of $81.7 million to shareholders; and
|
•
|
Proceeds of $847.0 million from the issuance of €750 million 3.500% Senior Secured Notes due June 2026;
|
•
|
The Company made principal payments on long-term debt of $1.059 billion, principally composed of:
|
◦
|
Principal payments of $625.5 million on the 6.625% Senior Secured Notes due February 2018 upon maturity; and
|
◦
|
Principal payments of $433.3 million on the 4.125% Notes and the 4.750% Notes in connection with the repurchases in June 2018;
|
•
|
Dividends paid and capital returned to non-controlling shareholders of $125.8 million and $53.6 million, respectively;
|
•
|
Dividends paid of $81.6 million to shareholders;
|
•
|
The Company received proceeds of $863.9 million from long term debt, primarily related to:
|
◦
|
Proceeds of $577.7 million from the issuance of €500 million 3.500% Senior Secured Notes due July 2024; and
|
◦
|
Net proceeds of $286.2 million from the Revolving Credit Facilities due July 2021.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
PART II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
|
INTERNATIONAL GAME TECHNOLOGY PLC
|
|
|
|
|
|
/s/ Alberto Fornaro
|
|
Name: Alberto Fornaro
|
|
Title: Chief Financial Officer
|
1 Year International Game Techn... Chart |
1 Month International Game Techn... Chart |
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