LAS VEGAS, April 25, 2013 /PRNewswire/ --
Second Quarter Highlights (compared to last year's second
quarter)
- Total revenues increased 11% to $600
million
- North America product sales
revenue increased 25%
- GAAP earnings per share from continuing operations increased
38% to $0.29
- Adjusted earnings per share from continuing operations
increased 33% to $0.36
- GAAP operating income increased 10% to $129 million
- Adjusted operating income increased 13% to $164 million
- Sold 8,400 North America
replacement units, up 68%
- Social gaming revenues increased 31% to $54 million sequentially from our 2013 fiscal
first quarter, as average revenue per daily active user grew 19% to
$0.37 sequentially.
International Game Technology (NYSE: IGT) today reported
operating results for the second quarter ended March 31, 2013.
(Logo:
http://photos.prnewswire.com/prnh/20130130/LA50769LOGO)
"We are very pleased with our momentum through the second
quarter, demonstrating the strength of our comprehensive strategy –
leveraging our core business, broadening the distribution of our
premier content, and generating shareholder returns," said
Patti Hart, CEO of IGT. "As we
continue to deliver on this strategy, we expect that this will be
our fourth consecutive year of double digit growth in adjusted
earnings per share from continuing operations."
Consolidated Results
|
($ in
millions, except per share amounts)
|
|
Quarters Ended
|
|
|
Six
Months Ended
|
|
March
31,
|
|
|
March
31,
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
GAAP
Measures
|
|
|
|
|
|
|
|
|
Revenue
|
$
600.0
|
|
$
541.2
|
|
11%
|
|
|
$
1,130.2
|
|
$
986.8
|
|
15%
|
|
Operating
income
|
$
129.3
|
|
$
118.0
|
|
10%
|
|
|
$
247.7
|
|
$
217.9
|
|
14%
|
|
Income
from continuing operations
|
$
78.2
|
|
$
62.4
|
|
25%
|
|
|
$
143.5
|
|
$
112.7
|
|
27%
|
|
Earnings
per share from continuing operations
|
$
0.29
|
|
$
0.21
|
|
38%
|
|
|
$
0.54
|
|
$
0.38
|
|
42%
|
|
Net
operating cash flows
|
|
|
|
|
|
|
|
$
182.5
|
|
$
176.7
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
|
|
|
|
|
|
|
|
|
Adjusted
operating income
|
$
163.5
|
|
$
144.7
|
|
13%
|
|
|
$
301.0
|
|
$
245.8
|
|
22%
|
|
Adjusted
income from continuing operations
|
$
95.1
|
|
$
79.5
|
|
20%
|
|
|
$
171.5
|
|
$
130.6
|
|
31%
|
|
Adjusted
earnings per share from continuing operations
|
$
0.36
|
|
$
0.27
|
|
33%
|
|
|
$
0.64
|
|
$
0.44
|
|
45%
|
|
Free cash
flow (after dividends)
|
|
|
|
|
|
|
|
$
91.4
|
|
$
17.4
|
|
425%
|
|
|
Adjusted
operating income, adjusted income from continuing operations,
adjusted earnings per share from continuing operations and free
cash flow are non-GAAP financial measures. Reconciliations between
GAAP and non-GAAP measures are provided at the end of this
release.
|
- Revenues increased 11% to $600
million in the second quarter, driven by growth in
North America machine sales and
social gaming.
- Adjusted earnings per share from continuing operations
increased 33% to $0.36 for the second
quarter.
- Non-GAAP adjusted financial measures for the second quarter
ended March 31, 2013 exclude
acquisition-related charges for DoubleDown, fees related to the
proxy contest, Alabama note
impairment and certain discrete tax benefits.
Gaming Operations (excluding Interactive)
|
($ in
millions, unless otherwise noted)
|
|
Quarters Ended
|
|
|
Six
Months Ended
|
|
March
31,
|
|
|
March
31,
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
254.3
|
|
$
266.1
|
|
-4%
|
|
|
$
496.9
|
|
$
518.1
|
|
-4%
|
|
Gross
profit
|
$
156.7
|
|
$
163.1
|
|
-4%
|
|
|
$
309.8
|
|
$
317.1
|
|
-2%
|
|
Gross
margin
|
62%
|
|
61%
|
|
2%
|
|
|
62%
|
|
61%
|
|
2%
|
|
Installed
base
|
56,700
|
|
56,100
|
|
1%
|
|
|
56,700
|
|
56,100
|
|
1%
|
|
Average
revenue per unit per day (0.00)
|
$
49.26
|
|
$
52.34
|
|
-6%
|
|
|
$
47.99
|
|
$
51.75
|
|
-7%
|
- Revenues decreased 4% to $254
million in the second quarter primarily due to lower
MegaJackpots® revenue.
- Gross margin increased to 62% from 61% in the second quarter,
primarily due to lower jackpot expenses and depreciation.
- Installed base increase was driven by lease operations growth
globally.
- Average revenue per unit per day in the second quarter was
$49.26, down 6% over the prior year
quarter, primarily due to lower yields, most significant in
MegaJackpots®, and up 5% sequentially due to seasonal gaming
trends.
Product Sales
|
($ in
millions, unless otherwise noted)
|
|
Quarters Ended
|
|
|
Six
Months Ended
|
|
March
31,
|
|
|
March
31,
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
279.0
|
|
$
240.8
|
|
16%
|
|
|
$
513.7
|
|
$
421.8
|
|
22%
|
|
Gross
profit
|
$
144.0
|
|
$
132.0
|
|
9%
|
|
|
$
269.5
|
|
$
223.6
|
|
21%
|
|
Gross
margin
|
52%
|
|
55%
|
|
-5%
|
|
|
52%
|
|
53%
|
|
-2%
|
|
Units
recognized ('000)
|
14.3
|
|
10.2
|
|
40%
|
|
|
25.0
|
|
17.5
|
|
43%
|
|
Average
machine sales price ('000)
|
$
14.1
|
|
$
15.8
|
|
-11%
|
|
|
$
14.4
|
|
$
15.8
|
|
-9%
|
- Revenues increased 16% to $279
million and units recognized increased 40% to 14,300 in the
second quarter, primarily due to increased North America machine sales related to
Canadian VLT customers, as well as an increase in North America new openings.
- Gross margin decreased to 52% from 55% in the second quarter
due to targeted promotional activity, unfavorable mix shift and
higher non-standard manufacturing costs.
- Average machine sales price in the second quarter decreased 11%
compared to the prior year quarter mainly due to targeted
promotional activity and an increased mix of lower-priced VLT
sales.
Interactive
|
($ in
millions, unless otherwise noted)
|
|
|
Quarters Ended
|
|
|
Six
Months Ended
|
|
March
31,
|
|
|
March
31,
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
66.7
|
|
$
34.3
|
|
94%
|
|
|
$
119.6
|
|
$
46.9
|
|
155%
|
|
Social gaming
|
$
54.3
|
|
$
21.3
|
|
155%
|
|
|
$
95.6
|
|
$
21.3
|
|
349%
|
|
IGTi
|
$
12.4
|
|
$
13.0
|
|
-5%
|
|
|
$
24.0
|
|
$
25.6
|
|
-6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
61%
|
|
54%
|
|
13%
|
|
|
60%
|
|
53%
|
|
13%
|
|
Social gaming
|
61%
|
|
61%
|
|
-
|
|
|
61%
|
|
61%
|
|
-
|
|
IGTi
|
59%
|
|
42%
|
|
40%
|
|
|
55%
|
|
47%
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Double
Down Average User Statistics*
|
|
|
|
|
|
|
|
|
DAU (Daily active users)
('000)
|
1,690
|
|
1,350
|
|
25%
|
|
|
1,575
|
|
1,350
|
|
17%
|
|
MAU (Monthly active users)
('000)
|
6,276
|
|
4,975
|
|
26%
|
|
|
5,596
|
|
4,975
|
|
12%
|
|
Bookings per DAU (0.00)
|
$
0.37
|
|
$
0.24
|
|
54%
|
|
|
$
0.34
|
|
$
0.24
|
|
42%
|
|
|
*as
a single application with multiple games, active users equal unique
users
|
|
- Social gaming revenues in the second quarter increased 31%
sequentially to $54 million,
primarily driven by an increase in both average DAU and average
bookings per DAU.
- Average DAU were 1.7 million in the second quarter, an increase
of 16% compared to the prior sequential quarter and an increase of
25% compared to the prior year quarter.
- Average bookings per DAU increased 19% sequentially to
$0.37 in the second quarter and 54%
over the same quarter last year.
Operating Expenses and Other Income/Expense
|
($ in
millions)
|
|
|
|
|
Quarters Ended
|
|
|
Six
Months Ended
|
|
March
31,
|
|
|
March
31,
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general & administrative
|
$
110.7
|
|
$
109.3
|
|
1%
|
|
|
$
210.9
|
|
$
199.1
|
|
6%
|
|
Research
& development
|
58.1
|
|
55.3
|
|
5%
|
|
|
112.5
|
|
102.2
|
|
10%
|
|
Depreciation & amortization
|
19.7
|
|
19.3
|
|
2%
|
|
|
38.7
|
|
34.7
|
|
12%
|
|
Contingent
acquisition related costs
|
21.9
|
|
11.7
|
|
87%
|
|
|
39.3
|
|
11.7
|
|
236%
|
|
Impairment
|
1.6
|
|
-
|
|
*
|
|
|
1.6
|
|
-
|
|
*
|
|
Total
operating expenses
|
$ 212.0
|
|
$ 195.6
|
|
8%
|
|
|
$ 403.0
|
|
$ 347.7
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Expenses
|
|
|
|
|
|
|
|
|
|
Total
|
$ 180.1
|
|
$ 171.2
|
|
5%
|
|
|
$ 349.3
|
|
$ 322.1
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
operating expenses is a non-GAAP financial measure.
Reconciliations between GAAP and non-GAAP measures are provided at
the end of this release.
|
- Second quarter operating expenses increased over the prior year
quarter primarily due to additional expenses from DoubleDown and
unfavorable bad debt provisions.
- Adjusted operating expenses were 30% of revenues for the second
quarter compared to 32% of revenues in the prior year quarter.
Balance Sheet and Capital Deployment
|
($ in
millions)
|
|
|
|
|
|
|
March
31,
|
|
September 30,
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
Cash and
equivalents (including restricted amounts)
|
$
312.3
|
|
$
288.2
|
|
8%
|
|
Working
capital
|
$
663.9
|
|
$
633.0
|
|
5%
|
|
Contractual debt obligations
|
$
1,770.0
|
|
$
1,790.0
|
|
-1%
|
- During the second quarter the company returned $94 million to shareholders. The company
repurchased 4.4 million shares of common stock at an average price
of $17.03 per share for a total cost
of $75 million and also returned
$19 million in the form of
dividends.
Other
References to per share amounts in this release are based on
diluted shares of common stock, unless otherwise specified.
Reconciliations of all GAAP to Non-GAAP financial measures are
provided at the end of this release.
Outlook
Based on current expectations and the operating results for the
second quarter of fiscal 2013, the company is increasing its fiscal
year 2013 guidance for adjusted earnings from continuing operations
to $1.26 to $1.32 per
share.
GAAP earnings per share from continuing operations for fiscal
year 2013 will include acquisition-related expenses, primarily
related to DoubleDown, proxy contest-related fees and certain
tax-related benefits the amount of which are not determinable at
this time. The company may also recognize charges for
impairment, other acquisition-related expenses, resolution of
certain tax items, and/or other items that are not currently
determinable, but may be significant. For this reason, the Company
is unable to provide estimates for full-year GAAP earnings per
share from continuing operations at this time.
Earnings Conference Call
As previously announced on Apr. 4,
2013, IGT will host a conference call to discuss its Second
Quarter 2013 earnings results on Thursday,
Apr. 25, 2013, at 2:00 p.m.
PDT (or 5:00 p.m. EDT). The
access numbers are as follows:
Domestic callers dial +1 800-369-1753, passcode IGT
International callers dial +1 312-470-7067, passcode IGT
The conference call will also be broadcast live over the
Internet. A link to the webcast is available at the IGT website:
http://www.IGT.com/investors. The call will be archived until
Thursday, May 9, 2013 at
http://www.IGT.com/investors, for those interested parties that are
unable to participate during the live webcast.
A taped replay of the conference call will be available after
the conference call. This replay will run through Thursday, May 9, 2013. The access numbers
are as follows:
Domestic callers dial +1 888-566-0041
International callers dial +1 402-998-0492
Q2 FY 2013 Excel file
Q2 FY 2013 PDF of this press release
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. These statements include our
expected future financial and operational performance (including
our guidance for fiscal year 2013) and our strategic and
operational plans. These statements involve a number of risks
and uncertainties that could cause actual results to differ
materially from the results predicted, and reported results should
not be considered an indication of future performance. Among
the factors that could cause actual results and outcomes to differ
materially from those contained in such forward-looking statements
are the following: general economic conditions and changes in
economic conditions affecting the gaming industry; new or changing
laws or regulations or new interpretations of existing laws or
regulations affecting our business; difficulties or delays in
obtaining or maintaining necessary licenses or approvals; slow
growth in the number of new gaming jurisdictions or new casinos or
the rate of replacement of existing gaming machines; changes in
operator or player preferences for our products; our ability to
compete in the gaming industry with new or existing competitors;
our ability to develop and introduce new products and their
acceptance by our customers; risks related to our international
operations; our ability to protect our intellectual property;
adverse results of litigation, including intellectual property
infringement claims; risks related to business combinations,
investments in intellectual property and the integration of
acquisitions; and future developments or changes affecting online
gaming or social casino-style gaming, which is a new and evolving
industry. A further list and description of these and other
risks, uncertainties and other matters can be found in our annual
report and other reports filed with the Securities and Exchange
Commission, including under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for fiscal
2012 filed with the SEC on November 28,
2012 and our Quarterly Report on Form 10-Q for our fiscal
quarter ended December 31, 2012 filed
with the SEC on February 6, 2013 and
available on the SEC website at www.sec.gov and on the investor
relations section of our website at www.IGT.com/investors.
Additional information will also be set forth in our Quarterly
Report on Form 10-Q for our fiscal quarter ended March 31, 2013, which we expect to file with the
SEC in the second quarter of calendar 2013. All information
provided in this release is as of April 25,
2013, and IGT does not intend, and undertakes no duty, to
update this information to reflect subsequent events or
circumstances.
IGT Resources:
- Like us on Facebook
- Play DoubleDown Casino Games
- Like DoubleDown Casino on Facebook
- Follow us on Twitter
- View IGT's YouTube Channel
- Check out our other Games and Gaming Systems
About IGT
International Game Technology (NYSE: IGT) is a global
leader in casino gaming entertainment and continues to transform
the industry by translating casino player experiences to social,
mobile and interactive environments for markets around the world.
IGT's acquisition of DoubleDown Interactive provides engaging
social casino style entertainment to more than 6 million players
monthly. More information about IGT is available
at IGT.com or connect with IGT at @IGTNews or
facebook.com/IGT. Anyone can play at the DoubleDown
Casino by
visiting http://apps.facebook.com/doubledowncasino or
doubledowncasino.com
|
CONSOLIDATED STATEMENTS OF INCOME (Unaudited and
Condensed)
|
|
|
|
|
|
|
|
Periods
Ended March 31,
|
|
Second
Quarters
|
|
Six
Months
|
|
2013
|
2012
|
|
2013
|
2012
|
|
(In
millions, except per share amounts)
|
|
Revenues
|
|
|
|
|
|
|
Gaming
operations
|
$
254.3
|
$
266.1
|
|
$
496.9
|
$
518.1
|
|
Product
sales
|
279.0
|
240.8
|
|
513.7
|
421.8
|
|
Interactive
|
66.7
|
34.3
|
|
119.6
|
46.9
|
|
Total
revenues
|
600.0
|
541.2
|
|
1,130.2
|
986.8
|
|
Costs
and operating expenses
|
|
|
|
|
|
|
Cost of
gaming operations
|
97.6
|
103.0
|
|
187.1
|
201.0
|
|
Cost of
product sales
|
135.0
|
108.8
|
|
244.2
|
198.2
|
|
Cost of
interactive
|
26.1
|
15.8
|
|
48.2
|
22.0
|
|
Selling,
general and administrative
|
110.7
|
109.3
|
|
210.9
|
199.1
|
|
Research
and development
|
58.1
|
55.3
|
|
112.5
|
102.2
|
|
Depreciation and amortization
|
19.7
|
19.3
|
|
38.7
|
34.7
|
|
Contingent
acquisition related costs
|
21.9
|
11.7
|
|
39.3
|
11.7
|
|
Impairment
|
1.6
|
-
|
|
1.6
|
-
|
|
Total
costs and operating expenses
|
470.7
|
423.2
|
|
882.5
|
768.9
|
|
Operating income
|
129.3
|
118.0
|
|
247.7
|
217.9
|
|
Other
income (expense)
|
|
|
|
|
|
|
Interest
income
|
11.1
|
10.8
|
|
22.4
|
22.9
|
|
Interest
expense
|
(30.3)
|
(30.0)
|
|
(62.0)
|
(60.1)
|
|
Other
|
(2.5)
|
(2.0)
|
|
(2.7)
|
(4.8)
|
|
Total
other income (expense)
|
(21.7)
|
(21.2)
|
|
(42.3)
|
(42.0)
|
|
Income
from continuing operations before tax
|
107.6
|
96.8
|
|
205.4
|
175.9
|
|
Income tax
provision
|
29.4
|
34.4
|
|
61.9
|
63.2
|
|
Income
from continuing operations
|
78.2
|
62.4
|
|
143.5
|
112.7
|
|
Loss from
discontinued operations, net of tax
|
-
|
(0.5)
|
|
-
|
(1.5)
|
|
Net
income
|
$ 78.2
|
$ 61.9
|
|
$ 143.5
|
$ 111.2
|
|
Basic
earnings (loss) per share
|
|
|
|
|
|
|
Continuing
operations
|
$
0.30
|
$
0.21
|
|
$
0.54
|
$
0.38
|
|
Discontinued operations
|
-
|
-
|
|
-
|
(0.01)
|
|
Net
income
|
$ 0.30
|
$ 0.21
|
|
$ 0.54
|
$ 0.37
|
|
Diluted
earnings (loss) per share
|
|
|
|
|
|
|
Continuing
operations
|
$
0.29
|
$
0.21
|
|
$
0.54
|
$
0.38
|
|
Discontinued operations
|
-
|
-
|
|
-
|
(0.01)
|
|
Net
income
|
$ 0.29
|
$ 0.21
|
|
$ 0.54
|
$ 0.37
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
Basic
|
263.6
|
296.7
|
|
264.7
|
297.0
|
|
Diluted
|
265.6
|
298.1
|
|
266.7
|
298.6
|
|
|
CONSOLIDATED BALANCE SHEET (Unaudited and
Condensed)
|
|
|
|
|
|
March 31,
|
|
September 30,
|
|
2013
|
|
2012
|
|
(In
millions)
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and
equivalents
|
$
236.5
|
|
$
206.3
|
|
Restricted
cash and investments
|
75.8
|
|
81.9
|
|
Jackpot
annuity investments
|
58.5
|
|
60.2
|
|
Receivables, net
|
578.3
|
|
564.8
|
|
Inventories
|
89.4
|
|
92.9
|
|
Other
assets and deferred costs
|
249.1
|
|
257.2
|
|
Total current assets
|
1,287.6
|
|
1,263.3
|
|
Property,
plant and equipment, net
|
511.5
|
|
555.7
|
|
Jackpot
annuity investments
|
279.6
|
|
295.7
|
|
Contracts
and notes receivable, net
|
115.2
|
|
139.3
|
|
Goodwill
and other intangibles, net
|
1,629.1
|
|
1,663.1
|
|
Other
assets and deferred costs
|
376.7
|
|
368.0
|
|
Total
Assets
|
$ 4,199.7
|
|
$
4,285.1
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
86.4
|
|
$
87.5
|
|
Jackpot
liabilities, current portion
|
140.2
|
|
152.4
|
|
Dividends
payable
|
20.8
|
|
16.0
|
|
Other
accrued liabilities
|
376.3
|
|
374.4
|
|
Total current liabilities
|
623.7
|
|
630.3
|
|
Long-term
debt
|
1,829.3
|
|
1,846.4
|
|
Jackpot
liabilities
|
308.9
|
|
328.6
|
|
Other
liabilities
|
195.3
|
|
282.0
|
|
Total
Liabilities
|
2,957.2
|
|
3,087.3
|
|
Total
Equity
|
1,242.5
|
|
1,197.8
|
|
Total
Liabilities and Shareholders' Equity
|
$ 4,199.7
|
|
$
4,285.1
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited
and Condensed)
|
|
|
|
|
|
Six
Months Ended
|
|
March
31,
|
|
2013
|
|
2012
|
|
(In
millions)
|
|
|
|
|
Operating
|
|
|
|
|
Net
income
|
$
143.5
|
|
$
111.2
|
|
Depreciation and amortization
|
117.8
|
|
115.2
|
|
Other
non-cash items
|
54.8
|
|
42.1
|
|
Changes in
operating assets and liabilities, excluding
acquisitions:
|
|
|
|
|
Receivables
|
(21.2)
|
|
(28.5)
|
|
Inventories
|
9.4
|
|
(14.6)
|
|
Accounts
payable and accrued liabilities
|
(61.8)
|
|
3.8
|
|
Jackpot
liabilities
|
(40.7)
|
|
(21.9)
|
|
Income
taxes, net of employee stock plans
|
(21.9)
|
|
(13.8)
|
|
Other
assets and deferred costs
|
2.6
|
|
(16.8)
|
|
Net
operating cash flows
|
182.5
|
|
176.7
|
|
Investing
|
|
|
|
|
Capital
expenditures
|
(56.4)
|
|
(123.6)
|
|
Proceeds
from assets sold
|
8.3
|
|
19.8
|
|
Jackpot
annuity investments, net
|
27.1
|
|
23.6
|
|
Changes in
restricted cash
|
5.8
|
|
3.2
|
|
Loans
receivable, net
|
15.1
|
|
14.9
|
|
Business
acquisitions, net of cash acquired
|
-
|
|
(233.0)
|
|
Net
investing cash flows
|
(0.1)
|
|
(295.1)
|
|
Financing
|
|
|
|
|
Debt
related proceeds (payments), net
|
(20.0)
|
|
-
|
|
Employee
stock plan proceeds
|
8.3
|
|
14.3
|
|
Share
repurchases
|
(75.1)
|
|
(50.1)
|
|
Noncontrolling interest acquired
|
-
|
|
(2.5)
|
|
Dividends
paid
|
(34.7)
|
|
(35.7)
|
|
Acquisition-related contingent
consideration
|
(27.9)
|
|
-
|
|
Net
financing cash flows
|
(149.4)
|
|
(74.0)
|
|
Foreign
exchange rates effect on cash
|
(2.8)
|
|
3.5
|
|
Net
change in cash and equivalents
|
30.2
|
|
(188.9)
|
|
Beginning cash and equivalents
|
206.3
|
|
460.0
|
|
Ending
cash and equivalents
|
$ 236.5
|
|
$ 271.1
|
|
|
SUPPLEMENTAL DATA (Unaudited)
|
|
|
|
|
|
|
|
Periods
Ended March 31,
|
|
Revenue
Metrics
|
Second
Quarters
|
|
Six
Months
|
|
2013
|
2012
|
|
2013
|
2012
|
|
In
millions, unless otherwise noted
|
|
|
|
|
|
|
Gaming
Operations
|
|
|
|
|
|
|
Revenues
|
$
254.3
|
$
266.1
|
|
$
496.9
|
$
518.1
|
|
North
America
|
220.3
|
233.1
|
|
428.8
|
452.6
|
|
International
|
34.0
|
33.0
|
|
68.1
|
65.5
|
|
Gross
margin
|
62%
|
61%
|
|
62%
|
61%
|
|
North
America
|
60%
|
59%
|
|
61%
|
59%
|
|
International
|
69%
|
75%
|
|
69%
|
74%
|
|
Installed base ('000)
|
56.7
|
56.1
|
|
56.7
|
56.1
|
|
North
America
|
42.6
|
42.7
|
|
42.6
|
42.7
|
|
International
|
14.1
|
13.4
|
|
14.1
|
13.4
|
|
Average
revenue per unit per day (0.00)
|
$49.26
|
$52.34
|
|
$47.99
|
$51.75
|
|
Product
Sales
|
|
|
|
|
|
|
Revenues
|
$
279.0
|
$
240.8
|
|
$
513.7
|
$
421.8
|
|
North
America
|
200.6
|
160.8
|
|
359.5
|
263.9
|
|
International
|
78.4
|
80.0
|
|
154.2
|
157.9
|
|
Machines
|
$
202.4
|
$
161.1
|
|
$
359.8
|
$
276.8
|
|
North
America
|
148.7
|
101.4
|
|
250.5
|
160.5
|
|
International
|
53.7
|
59.7
|
|
109.3
|
116.3
|
|
Non-machine
|
$
76.6
|
$
79.7
|
|
$
153.9
|
$
145.0
|
|
North
America
|
51.9
|
59.4
|
|
109.0
|
103.4
|
|
International
|
24.7
|
20.3
|
|
44.9
|
41.6
|
|
Gross
margin
|
52%
|
55%
|
|
52%
|
53%
|
|
North
America
|
53%
|
57%
|
|
54%
|
55%
|
|
International
|
49%
|
50%
|
|
48%
|
49%
|
|
Units
recognized ('000)
|
14.3
|
10.2
|
|
25.0
|
17.5
|
|
North
America
|
11.1
|
6.8
|
|
18.3
|
10.6
|
|
International
|
3.2
|
3.4
|
|
6.7
|
6.9
|
|
Units
shipped ('000) [includes units where revenues
deferred]
|
14.3
|
10.5
|
|
23.7
|
17.0
|
|
North
America
|
11.1
|
6.7
|
|
18.0
|
10.2
|
|
New
|
2.7
|
1.7
|
|
4.4
|
2.4
|
|
Replacement
|
8.4
|
5.0
|
|
13.6
|
7.8
|
|
International
|
3.2
|
3.8
|
|
5.7
|
6.8
|
|
New
|
1.0
|
2.0
|
|
1.9
|
3.3
|
|
Replacement
|
2.2
|
1.8
|
|
3.8
|
3.5
|
|
Average
machine sales price ('000)
|
$
14.1
|
$
15.8
|
|
$
14.4
|
$
15.8
|
|
North
America
|
13.4
|
14.9
|
|
13.7
|
15.1
|
|
International
|
16.6
|
17.6
|
|
16.3
|
16.9
|
|
Interactive
|
|
|
|
|
|
|
Revenues
|
$
66.7
|
$
34.3
|
|
$
119.6
|
$
46.9
|
|
North
America
|
54.8
|
21.6
|
|
96.7
|
21.7
|
|
International
|
11.9
|
12.7
|
|
22.9
|
25.2
|
|
Social
|
54.3
|
21.3
|
|
95.6
|
21.3
|
|
North
America
|
54.3
|
21.3
|
|
95.6
|
21.3
|
|
International
|
-
|
-
|
|
-
|
-
|
|
IGTi
|
12.4
|
13.0
|
|
24.0
|
25.6
|
|
North
America
|
0.5
|
0.3
|
|
1.1
|
0.4
|
|
International
|
11.9
|
12.7
|
|
22.9
|
25.2
|
|
Gross
margin
|
61%
|
54%
|
|
60%
|
53%
|
|
North
America
|
61%
|
58%
|
|
61%
|
58%
|
|
International
|
58%
|
47%
|
|
54%
|
49%
|
|
DoubleDown Casino®Average User
Statistics*
|
|
|
|
|
|
|
Daily
active users (DAU) ('000)
|
1,690
|
1,350
|
|
1,575
|
1,350
|
|
Monthly
active users (MAU) ('000)
|
6,276
|
4,975
|
|
5,596
|
4,975
|
|
Bookings
per DAU (0.00)
|
$0.37
|
$0.24
|
|
$0.34
|
$0.24
|
|
|
*as
a single application with multiple games, active users equal unique
users
|
|
|
Reconciliations of GAAP to Non-GAAP Adjusted
Financial Measures
|
|
(In
millions, except EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter Ended March 31, 2013
|
|
|
|
|
|
Continuing Operations
|
|
Revenue
|
Cost
of
Revenues
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
GAAP
measures
|
$
600.0
|
$
258.7
|
$
212.0
|
$
129.3
|
$
78.2
|
$0.29
|
|
% of
revenue
|
|
|
35%
|
22%
|
|
|
|
Acquisition related charges:(b)
|
|
|
|
|
|
|
|
Contingent
retention & earn-out
|
-
|
-
|
(21.9)
|
21.9
|
14.6
|
0.06
|
|
Amortization of intangibles
|
-
|
(2.3)
|
(4.5)
|
6.8
|
4.5
|
0.02
|
|
Proxy
fees
|
-
|
-
|
(3.9)
|
3.9
|
2.6
|
0.01
|
|
Alabama
Note impairment
|
-
|
-
|
(1.6)
|
1.6
|
1.1
|
-
|
|
Certain
discrete tax items (benefits)
|
-
|
-
|
-
|
-
|
(5.9)
|
(0.02)
|
|
Total
non-GAAP adjustments
|
-
|
(2.3)
|
(31.9)
|
34.2
|
16.9
|
0.07
|
|
|
|
|
|
|
|
|
Adjusted measures
|
$
600.0
|
$
256.4
|
$
180.1
|
$
163.5
|
$
95.1
|
$0.36
|
|
% of
revenue
|
|
|
30%
|
27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months Ended March 31, 2013
|
|
|
|
|
|
Continuing Operations
|
|
Revenue
|
Cost
of
Revenues
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
GAAP
measures
|
$
1,130.2
|
$
479.5
|
$
403.0
|
$
247.7
|
$
143.5
|
$0.54
|
|
% of
revenue
|
|
|
36%
|
22%
|
|
|
|
Acquisition related charges:(b)
|
|
|
|
|
|
|
|
Contingent
retention & earn-out
|
-
|
-
|
(39.3)
|
39.3
|
26.2
|
0.10
|
|
Amortization of intangibles
|
-
|
(4.6)
|
(8.9)
|
13.5
|
9.0
|
0.03
|
|
Proxy
fees
|
-
|
-
|
(3.9)
|
3.9
|
2.6
|
0.01
|
|
Alabama
Note impairment
|
-
|
-
|
(1.6)
|
1.6
|
1.1
|
-
|
|
Royalty
settlement
|
(5.0)
|
-
|
-
|
(5.0)
|
(5.0)
|
(0.02)
|
|
Certain
discrete tax items (benefits)
|
-
|
-
|
-
|
-
|
(5.9)
|
(0.02)
|
|
Total
non-GAAP adjustments
|
(5.0)
|
(4.6)
|
(53.7)
|
53.3
|
28.0
|
0.10
|
|
|
|
|
|
|
|
|
Adjusted measures
|
$
1,125.2
|
$
474.9
|
$
349.3
|
$
301.0
|
$
171.5
|
$0.64
|
|
% of
revenue
|
|
|
31%
|
27%
|
|
|
|
|
|
|
|
|
|
|
(a)Adjustments tax effected at 34%,
except no tax effect on royalty settlement
|
|
(b) Primarily related to
DoubleDown
|
|
Second
Quarter Ended March 31, 2012
|
|
|
|
|
Continuing Operations
|
|
Cost
of
Revenues
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
GAAP
measures
|
$
227.6
|
$
195.6
|
$
118.0
|
$
62.4
|
$0.21
|
|
% of
revenue
|
|
36%
|
22%
|
|
|
|
Acquisition related charges:(b)
|
|
|
|
|
|
|
Contingent
retention & earn-out
|
-
|
(11.7)
|
11.7
|
7.5
|
0.03
|
|
Amortization of intangibles
|
(2.3)
|
(3.9)
|
6.2
|
4.0
|
0.01
|
|
Professional fees
|
-
|
(4.5)
|
4.5
|
2.8
|
0.01
|
|
Distributor settlement
|
-
|
(3.1)
|
3.1
|
2.0
|
0.01
|
|
Severance
|
-
|
(1.2)
|
1.2
|
0.8
|
-
|
|
Total
non-GAAP adjustments
|
(2.3)
|
(24.4)
|
26.7
|
17.1
|
0.06
|
|
|
|
|
|
|
|
Adjusted measures
|
$
225.3
|
$
171.2
|
$
144.7
|
$
79.5
|
$0.27
|
|
% of
revenue
|
|
32%
|
27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months Ended March 31, 2012
|
|
|
|
|
Continuing Operations
|
|
Cost
of
Revenues
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
GAAP
measures
|
$
421.2
|
$
347.7
|
$
217.9
|
$
112.7
|
$0.38
|
|
% of
revenue
|
|
35%
|
22%
|
|
|
|
Acquisition related charges:(b)
|
|
|
|
|
|
|
Contingent
retention & earn-out
|
-
|
(11.7)
|
11.7
|
7.5
|
0.03
|
|
Amortization of intangibles
|
(2.3)
|
(3.9)
|
6.2
|
4.0
|
0.01
|
|
Professional fees
|
-
|
(5.7)
|
5.7
|
3.6
|
0.01
|
|
Distributor settlement
|
-
|
(3.1)
|
3.1
|
2.0
|
0.01
|
|
Severance
|
-
|
(1.2)
|
1.2
|
0.8
|
-
|
|
Total
non-GAAP adjustments
|
(2.3)
|
(25.6)
|
27.9
|
17.9
|
0.06
|
|
|
|
|
|
|
|
Adjusted measures
|
$
418.9
|
$
322.1
|
$
245.8
|
$
130.6
|
$0.44
|
|
% of
revenue
|
|
33%
|
25%
|
|
|
|
|
|
|
|
|
|
(a)Adjustments tax effected at
36%
|
|
(b) Primarily related to
DoubleDown
|
|
|
Adjusted Diluted EPS from Continuing
Operations
|
|
For the Years Ended September
30,
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
GAAP
Diluted EPS from Continuing Operations
|
$0.86
|
|
$0.97
|
|
$0.73
|
|
$0.50
|
|
Acquisition related charges (primarily
DoubleDown)
|
0.20
|
|
-
|
|
-
|
|
-
|
|
Impairment
and restructuring
|
(0.04)
|
|
0.03
|
|
0.15
|
|
0.24
|
|
Severance
|
0.01
|
|
-
|
|
-
|
|
-
|
|
Distributor settlement
|
0.01
|
|
-
|
|
-
|
|
-
|
|
IP Usage
settlements
|
-
|
|
0.01
|
|
-
|
|
-
|
|
Investment
(gain) loss
|
-
|
|
(0.01)
|
|
0.07
|
|
0.05
|
|
Debt
refinancing charges
|
-
|
|
-
|
|
0.01
|
|
0.01
|
|
Certain
discrete tax items (benefits)
|
-
|
|
(0.07)
|
|
(0.12)
|
|
(0.06)
|
|
Total
non-GAAP adjustments
|
0.18
|
|
(0.04)
|
|
0.11
|
|
0.24
|
|
Adjusted Diluted EPS from Continuing
Operations
|
$ 1.04
|
|
$ 0.93
|
|
$ 0.84
|
|
$ 0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA For The Periods Ended March
31,
|
|
Second
Quarters
|
|
Six
Months
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
GAAP
Income from continuing operations
|
$
78.2
|
|
$
62.4
|
|
$
143.5
|
|
$
112.7
|
|
Other
(income) expense, net
|
21.7
|
|
21.2
|
|
42.3
|
|
42.0
|
|
Income tax
provision
|
29.4
|
|
34.4
|
|
61.9
|
|
63.2
|
|
Depreciation and amortization
|
60.1
|
|
60.6
|
|
117.8
|
|
115.2
|
|
Other
charges:
|
|
|
|
|
|
|
|
|
Share-based compensation
|
9.9
|
|
8.5
|
|
18.6
|
|
16.7
|
|
Contingent
acquisition related costs
|
21.9
|
|
11.7
|
|
39.3
|
|
11.7
|
|
Impairment
|
1.6
|
|
-
|
|
1.6
|
|
-
|
|
Adjusted EBITDA
|
$ 222.8
|
|
$ 198.8
|
|
$ 425.0
|
|
$ 361.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free
Cash Flow For The Six Months Ended March 31,
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
GAAP
net operating cash flows
|
|
|
|
|
$
182.5
|
|
$
176.7
|
|
Investment
in property, plant and equipment
|
|
|
|
|
(8.1)
|
|
(34.5)
|
|
Investment
in gaming operations equipment
|
|
|
|
|
(48.1)
|
|
(87.1)
|
|
Investment
in intellectual property
|
|
|
|
|
(0.2)
|
|
(2.0)
|
|
Free
Cash Flow (before dividends)
|
|
|
|
|
126.1
|
|
53.1
|
|
Dividends
paid
|
|
|
|
|
(34.7)
|
|
(35.7)
|
|
Free
Cash Flow (after dividends)
|
|
|
|
|
$ 91.4
|
|
$ 17.4
|
We believe that certain non-GAAP financial measures, when
presented in conjunction with comparable GAAP (Generally Accepted
Accounting Principles) measures, are useful because that
information is an appropriate measure for evaluating our operating
performance. Non-GAAP information is used to evaluate business
performance and management's effectiveness. These measures should
be considered in addition to, not as a substitute for, or superior
to, measures of financial performance prepared in accordance with
GAAP. Non-GAAP financial measures may not be calculated in the same
manner by all companies and therefore may not be comparable.
SOURCE International Game Technology