LAS VEGAS, July 29, 2014 /PRNewswire/ -- International Game
Technology (NYSE: IGT) today reported operating results for the
third quarter ended June 30,
2014.
"July saw the culmination of our process to evaluate strategic
alternatives for IGT and our shareholders," said Patti Hart, IGT CEO. "We successfully
balanced this effort during the third quarter with our focus on
continuous improvement in our business evidenced by expanded gross
margins and expected EPS performance. Our effective cost management
has improved efficiencies in a challenging industry environment and
has positioned us for future market opportunities."
Consolidated Results
|
|
Third
Quarters
|
|
|
|
Nine
Months
|
|
Periods Ended June
30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
467.6
|
|
|
$
|
579.0
|
|
|
|
-19
|
%
|
|
|
$
|
1,521.6
|
|
|
$
|
1,709.2
|
|
|
|
-11
|
%
|
Operating
income
|
|
|
109.6
|
|
|
|
123.0
|
|
|
|
-11
|
%
|
|
|
|
285.4
|
|
|
|
370.7
|
|
|
|
-23
|
%
|
Net income
|
|
|
72.1
|
|
|
|
65.7
|
|
|
|
10
|
%
|
|
|
|
177.1
|
|
|
|
209.2
|
|
|
|
-15
|
%
|
Earnings per
share
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
|
16
|
%
|
|
|
$
|
0.71
|
|
|
$
|
0.79
|
|
|
|
-10
|
%
|
Net operating cash
flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
61.4
|
|
|
$
|
335.2
|
|
|
|
-82
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Measures (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
119.3
|
|
|
$
|
154.1
|
|
|
|
-23
|
%
|
|
|
$
|
350.6
|
|
|
$
|
455.2
|
|
|
|
-23
|
%
|
Adjusted net
income
|
|
|
69.3
|
|
|
|
86.4
|
|
|
|
-20
|
%
|
|
|
|
181.7
|
|
|
|
258.1
|
|
|
|
-30
|
%
|
Adjusted earnings per
share
|
|
$
|
0.28
|
|
|
$
|
0.33
|
|
|
|
-15
|
%
|
|
|
$
|
0.72
|
|
|
$
|
0.97
|
|
|
|
-26
|
%
|
Free cash flow
(before dividends)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(7.7)
|
|
|
$
|
238.1
|
|
|
|
-103
|
%
|
(1) Adjusted
operating income, adjusted net income, adjusted earnings per share
and free cash flow are non-GAAP financial measures.
Reconciliations between GAAP and
non-GAAP measures are provided at the end of this
release.
|
- Revenue decreased 19% to $468
million in the third quarter primarily due to declines in
product sales and gaming operations.
- GAAP earnings per share increased 16% to $0.29.
- Non-GAAP adjusted financial measures for the third quarter
excluded acquisition-related charges primarily for DoubleDown and
certain discrete tax benefits.
Gaming Operations
|
|
Third
Quarters
|
|
|
|
Nine
Months
|
|
Periods Ended June
30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
217.6
|
|
|
$
|
247.3
|
|
|
|
-12
|
%
|
|
|
$
|
671.0
|
|
|
$
|
744.3
|
|
|
|
-10
|
%
|
Gross
profit
|
|
|
135.1
|
|
|
|
151.7
|
|
|
|
-11
|
%
|
|
|
|
411.7
|
|
|
|
461.6
|
|
|
|
-11
|
%
|
Gross
margin
|
|
|
62
|
%
|
|
|
61
|
%
|
|
|
2
|
%
|
|
|
|
61
|
%
|
|
|
62
|
%
|
|
|
-2
|
%
|
Installed base
('000)
|
|
|
50.5
|
|
|
|
56.7
|
|
|
|
-11
|
%
|
|
|
|
50.5
|
|
|
|
56.7
|
|
|
|
-11
|
%
|
Yield (average
revenue per unit per day - $0.00)
|
|
$
|
46.02
|
|
|
$
|
47.96
|
|
|
|
-4
|
%
|
|
|
$
|
46.75
|
|
|
$
|
47.91
|
|
|
|
-2
|
%
|
- Revenue decreased 12% to $218
million in the third quarter, most significantly due to
installed base declines and lower yields.
- Gross margin increased to 62% from 61% primarily due to mix
shift to higher-margin lease operations and lower
depreciation.
- Installed base decreased 11% driven by declines in
International largely due to lease operation unit conversions and
North America MegaJackpots® primarily in the standalone
category.
- Average revenue per unit per day was $46.02, down 4% over the prior year quarter,
largely due to lower MegaJackpots® performance, and down 2%
sequentially in line with seasonal trends.
Product Sales
|
|
Third
Quarters
|
|
|
|
Nine
Months
|
|
Periods Ended June
30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
166.9
|
|
|
$
|
259.2
|
|
|
|
-36
|
%
|
|
|
$
|
613.1
|
|
|
$
|
772.9
|
|
|
|
-21
|
%
|
Gross
profit
|
|
|
97.5
|
|
|
|
139.9
|
|
|
|
-30
|
%
|
|
|
|
328.3
|
|
|
|
409.2
|
|
|
|
-20
|
%
|
Gross
margin
|
|
|
58
|
%
|
|
|
54
|
%
|
|
|
7
|
%
|
|
|
|
54
|
%
|
|
|
53
|
%
|
|
|
2
|
%
|
Machine units
recognized ('000)
|
|
|
7.3
|
|
|
|
13.4
|
|
|
|
-46
|
%
|
|
|
|
28.0
|
|
|
|
38.4
|
|
|
|
-27
|
%
|
Machine average sales
price ('000)
|
|
$
|
11.9
|
|
|
$
|
13.3
|
|
|
|
-11
|
%
|
|
|
$
|
13.2
|
|
|
$
|
14.0
|
|
|
|
-6
|
%
|
- Revenue decreased 36% to $167
million in the third quarter, primarily due to lower machine
unit volume, with the most significant decrease in North America replacement units. The current
quarter did not include Canadian replacement units while the prior
year quarter included 3,300 Canadian replacement units. Also, the
current quarter included 400 new Illinois units as compared to the prior year
quarter that included 1,300 new Illinois units.
- Gross margin increased to 58% from 54% due to a favorable mix
of higher-margin intellectual property revenue.
- Machine average sales price decreased 11% to $11,900. North
America machine average sales price increased 4% to
$12,900 primarily due to favorable
product mix. International machine average sales price decreased
34% largely due to a high volume of lease unit conversions.
Interactive
|
|
Third
Quarters
|
|
|
|
Nine
Months
|
|
Periods Ended June
30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
83.1
|
|
|
$
|
72.5
|
|
|
|
15
|
%
|
|
|
$
|
237.5
|
|
|
$
|
192.0
|
|
|
|
24
|
%
|
Social
gaming
|
|
|
71.8
|
|
|
|
61.4
|
|
|
|
17
|
%
|
|
|
|
205.4
|
|
|
|
157.1
|
|
|
|
31
|
%
|
IGTi
|
|
|
11.3
|
|
|
|
11.1
|
|
|
|
2
|
%
|
|
|
|
32.1
|
|
|
|
34.9
|
|
|
|
-8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
63
|
%
|
|
|
63
|
%
|
|
|
-
|
|
|
|
|
62
|
%
|
|
|
61
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DoubleDown average
user statistics (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DAU (Daily active
users) ('000)
|
|
|
1,833
|
|
|
|
1,690
|
|
|
|
8
|
%
|
|
|
|
1,774
|
|
|
|
1,613
|
|
|
|
10
|
%
|
MAU (Monthly active
users) ('000)
|
|
|
5,975
|
|
|
|
6,658
|
|
|
|
-10
|
%
|
|
|
|
6,130
|
|
|
|
5,950
|
|
|
|
3
|
%
|
Bookings per DAU
($0.00)
|
|
$
|
0.43
|
|
|
$
|
0.40
|
|
|
|
7
|
%
|
|
|
$
|
0.42
|
|
|
$
|
0.36
|
|
|
|
17
|
%
|
(1) as a single
application with multiple games, active users equal unique
users
|
|
- Social gaming revenue increased 31% to $205 million in the first nine months and
increased 17% to $72 million in the
third quarter, driven by increases in average DAU and average
bookings per DAU.
- Average DAU were 1.8 million, an increase of 8% over the prior
year quarter.
- Average MAU were 6.0 million, a decrease of 10% primarily due
to increased focus on improving player conversion rates.
- Average bookings per DAU were $0.43, an increase of 7% over the same quarter
last year.
Operating Expenses
|
|
Third
Quarters
|
|
|
|
Nine
Months
|
|
Periods Ended June
30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
& administrative
|
|
$
|
103.3
|
|
|
$
|
114.4
|
|
|
|
-10
|
%
|
|
|
$
|
345.2
|
|
|
$
|
325.0
|
|
|
|
6
|
%
|
Research &
development
|
|
|
53.4
|
|
|
|
59.8
|
|
|
|
-11
|
%
|
|
|
|
172.1
|
|
|
|
172.3
|
|
|
|
-
|
|
Depreciation &
amortization
|
|
|
16.4
|
|
|
|
19.3
|
|
|
|
-15
|
%
|
|
|
|
49.7
|
|
|
|
58.0
|
|
|
|
-14
|
%
|
Contingent
acquisition-related costs
|
|
|
2.2
|
|
|
|
19.2
|
|
|
|
-89
|
%
|
|
|
|
17.2
|
|
|
|
58.6
|
|
|
|
-71
|
%
|
Impairment and
restructuring
|
|
|
-
|
|
|
|
1.5
|
|
|
|
*
|
|
|
|
|
17.8
|
|
|
|
3.1
|
|
|
|
*
|
|
Total operating
expenses
|
|
$
|
175.3
|
|
|
$
|
214.2
|
|
|
|
-18
|
%
|
|
|
$
|
602.0
|
|
|
$
|
617.0
|
|
|
|
-2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Expenses (1)
|
|
$
|
168.4
|
|
|
$
|
185.4
|
|
|
|
-9
|
%
|
|
|
$
|
545.6
|
|
|
$
|
534.4
|
|
|
|
2
|
%
|
(1) Adjusted
operating expenses is a non-GAAP financial
measure. Reconciliations between GAAP and non-GAAP
measures are provided at the end of this
release.
|
- The decrease in third quarter total operating expenses was
primarily due to lower contingent acquisition-related costs and
cost savings resulting from the March
2014 business realignment.
- Selling, general and administrative expenses included an
increase in bad debt provisions, as the prior year quarter
benefited from significant bad debt recoveries.
- Adjusted operating expenses were 36% of revenue compared to 32%
in the prior year quarter due to lower total revenue.
Balance Sheet, Cash Flow and Capital Deployment
(in millions)
|
|
June 30,
2014
|
|
|
September 30,
2013
|
|
|
%
Change
|
|
Cash and equivalents
(including restricted amounts)
|
|
$
|
299.0
|
|
|
$
|
809.1
|
|
|
|
-63
|
%
|
Working
capital
|
|
|
691.1
|
|
|
|
267.5
|
|
|
|
158
|
%
|
Contractual debt
obligations
|
|
|
1,925.0
|
|
|
|
2,150.0
|
|
|
|
-10
|
%
|
- Operating cash flow was $127
million in the third quarter on net income of $72 million.
- Contractual debt obligations decreased $225 million as the company's 3.25% Convertible
Notes matured on May 1, 2014. The
notes were paid using a combination of borrowings on the revolving
credit facility and cash on hand.
- Outstanding borrowings under the company's revolving credit
facility were $625 million as of
June 30, 2014.
- The company returned $27 million
to its shareholders through dividends.
Other
References to per share amounts in this release are based on
weighted average diluted shares of common stock outstanding, unless
otherwise specified.
Outlook
The company is updating its fiscal year 2014 guidance for
adjusted earnings from continuing operations to $1.00 to $1.06 per share.
GAAP earnings per share from continuing operations for fiscal
year 2014 will include acquisition-related expenses, primarily
related to DoubleDown, severance costs, business realignment
expenses, asset impairment charges, legal accrual charges,
merger-related professional fees and certain discrete tax items or
benefits, the amount of which is not determinable at this
time. The company may also recognize 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
There will be no earnings conference call.
Q3 FY 2014 Excel file
Q3 FY 2014 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 2014) 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; our ability to leverage cost reduction
initiatives; 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.
Additional factors relating to the proposed merger transactions
with GTECH S.p.A. ("GTECH") include failure to obtain applicable
regulatory or securityholder approvals in a timely manner or
otherwise; the possibility that the proposed transactions will not
close, including by any failure to satisfy closing conditions or a
termination of the merger agreement; risks that the businesses of
IGT and GTECH will not be integrated successfully or that the
combined companies will not realize estimated cost savings, value
of certain tax assets, synergies and growth or that such benefits
may take longer to realize than expected; failure to realize
anticipated benefits of the combined operations of IGT and GTECH;
risks relating to unanticipated costs of integration; ability to
hire and retain key personnel; and the potential impact of
announcement or consummation of the proposed transactions on
relationships with third parties, including customers, employees
and competitors.
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
2013 filed with the SEC on November 26,
2013 and our Quarterly Report on Form 10-Q for our fiscal
quarter ended March 31, 2014 filed
with the SEC on May 7, 2014 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 June 30, 2014, which we expect to file with the
SEC in the third quarter of calendar 2014. All information
provided in this release is as of July 29,
2014, and IGT does not intend, and undertakes no duty, to
update this information to reflect subsequent events or
circumstances.
Important Information for Investors and
Securityholders
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed merger transactions involving GTECH or otherwise, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended, and applicable European regulations. Subject to certain
exceptions to be approved by the relevant regulators or certain
facts to be ascertained, the public offer will not be made directly
or indirectly, in or into any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by use
of the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and the internet) of
interstate or foreign commerce, or any facility of a national
securities exchange, of any such jurisdiction.
Georgia Worldwide Limited ("NewCo") will file with the SEC a
registration statement on Form S-4 or F-4, which will include the
proxy statement of IGT that also constitutes a prospectus of NewCo
(the "proxy statement/prospectus"). INVESTORS AND
SECURITYHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS,
AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, IN
THEIR ENTIRETY CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT IGT, GTECH, NEWCO, THE
PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and
securityholders will be able to obtain free copies of the proxy
statement/prospectus and other documents filed with the SEC by the
parties through the website maintained by the SEC at www.sec.gov.
In addition, investors and securityholders will be able to obtain
free copies of the proxy statement/prospectus and other documents
filed with the SEC on IGT's website at IGT.com within the "Investor
Relations" section or by contacting Investor Relations at
866-296-4232 (for documents filed with the SEC by IGT) or on
GTECH's website at gtech.com or by contacting Corporate
Communications at 401-392-7452 (for documents filed with the SEC by
NewCo).
The release, publication or distribution of this communication
in certain jurisdictions may be restricted by law and therefore
persons in such jurisdictions into which this communication is
released, published or distributed should inform themselves about
and observe such restrictions.
Participants in the Distribution
IGT, GTECH and NewCo and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the securityholders of IGT in respect
of the proposed transactions contemplated by the proxy
statement/prospectus. Information regarding the persons who are,
under the rules of the SEC, participants in the solicitation of the
securityholders of IGT in connection with the proposed
transactions, including a description of their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the proxy statement/prospectus when it is filed with the SEC.
Information regarding IGT's directors and executive officers is
contained in IGT's Annual Report on Form 10-K for the year ended
September 28, 2013 and its Proxy
Statement on Schedule 14A, dated January 24,
2014, which are filed with the SEC and can be obtained free
of charge from the sources indicated above.
IGT Resources:
- Like us on Facebook
- Play DoubleDown Casino Games
- Like DoubleDown Casino on Facebook
- Follow us on Twitter
- View IGT's YouTube Channel
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 approximately 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 .
IGT Contact:
Kate Pearlman
Vice President, Investor Relations and Treasury
+1 866-296-4232
InvestorRelations@IGT.com
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited and Condensed)
|
|
|
|
Third
Quarters
|
|
|
Nine
Months
|
|
Periods Ended June
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
(In millions,
except per share amounts)
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
|
$
|
217.6
|
|
|
$
|
247.3
|
|
|
$
|
671.0
|
|
|
$
|
744.3
|
|
Product
sales
|
|
|
166.9
|
|
|
|
259.2
|
|
|
|
613.1
|
|
|
|
772.9
|
|
Interactive
|
|
|
83.1
|
|
|
|
72.5
|
|
|
|
237.5
|
|
|
|
192.0
|
|
Total
|
|
|
467.6
|
|
|
|
579.0
|
|
|
|
1,521.6
|
|
|
|
1,709.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of gaming
operations
|
|
|
82.5
|
|
|
|
95.6
|
|
|
|
259.3
|
|
|
|
282.7
|
|
Cost of product
sales
|
|
|
69.4
|
|
|
|
119.3
|
|
|
|
284.8
|
|
|
|
363.7
|
|
Cost of
interactive
|
|
|
30.8
|
|
|
|
26.9
|
|
|
|
90.1
|
|
|
|
75.1
|
|
Selling, general and
administrative
|
|
|
103.3
|
|
|
|
114.4
|
|
|
|
345.2
|
|
|
|
325.0
|
|
Research and
development
|
|
|
53.4
|
|
|
|
59.8
|
|
|
|
172.1
|
|
|
|
172.3
|
|
Depreciation and
amortization
|
|
|
16.4
|
|
|
|
19.3
|
|
|
|
49.7
|
|
|
|
58.0
|
|
Contingent
acquisition-related costs
|
|
|
2.2
|
|
|
|
19.2
|
|
|
|
17.2
|
|
|
|
58.6
|
|
Impairment and
restructuring
|
|
|
-
|
|
|
|
1.5
|
|
|
|
17.8
|
|
|
|
3.1
|
|
Total
|
|
|
358.0
|
|
|
|
456.0
|
|
|
|
1,236.2
|
|
|
|
1,338.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
109.6
|
|
|
|
123.0
|
|
|
|
285.4
|
|
|
|
370.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
10.4
|
|
|
|
11.5
|
|
|
|
31.2
|
|
|
|
34.0
|
|
Interest
expense
|
|
|
(26.6)
|
|
|
|
(30.5)
|
|
|
|
(99.9)
|
|
|
|
(92.4)
|
|
Other
|
|
|
0.7
|
|
|
|
(6.7)
|
|
|
|
(4.6)
|
|
|
|
(9.6)
|
|
Total
|
|
|
(15.5)
|
|
|
|
(25.7)
|
|
|
|
(73.3)
|
|
|
|
(68.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
TAX
|
|
|
94.1
|
|
|
|
97.3
|
|
|
|
212.1
|
|
|
|
302.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
22.0
|
|
|
|
31.6
|
|
|
|
35.0
|
|
|
|
93.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
|
72.1
|
|
|
$
|
65.7
|
|
|
$
|
177.1
|
|
|
$
|
209.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
$
|
0.71
|
|
|
$
|
0.79
|
|
Diluted
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
$
|
0.71
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
247.0
|
|
|
|
260.6
|
|
|
|
249.1
|
|
|
|
263.4
|
|
Diluted
|
|
|
247.9
|
|
|
|
263.2
|
|
|
|
250.8
|
|
|
|
265.6
|
|
CONSOLIDATED
BALANCE SHEET (Unaudited and Condensed)
|
|
|
|
June 30,
2014
|
|
|
September 30,
2013
|
|
|
|
(In
millions)
|
|
ASSETS
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
235.6
|
|
|
$
|
713.3
|
|
Investment
securities
|
|
|
-
|
|
|
|
28.8
|
|
Restricted cash and
investment securities
|
|
|
63.4
|
|
|
|
67.0
|
|
Jackpot annuity
investments
|
|
|
54.2
|
|
|
|
56.5
|
|
Receivables,
net
|
|
|
510.0
|
|
|
|
577.9
|
|
Inventories
|
|
|
89.5
|
|
|
|
90.1
|
|
Other assets and
deferred costs
|
|
|
259.9
|
|
|
|
242.4
|
|
Total
current assets
|
|
|
1,212.6
|
|
|
|
1,776.0
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
435.6
|
|
|
|
483.9
|
|
Jackpot annuity
investments
|
|
|
248.2
|
|
|
|
268.6
|
|
Contracts and notes
receivable, net
|
|
|
116.4
|
|
|
|
165.6
|
|
Goodwill and other
intangible assets, net
|
|
|
1,564.8
|
|
|
|
1,601.7
|
|
Other assets and
deferred costs
|
|
|
479.8
|
|
|
|
317.0
|
|
TOTAL
ASSETS
|
|
$
|
4,057.4
|
|
|
$
|
4,612.8
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
-
|
|
|
$
|
826.6
|
|
Accounts
payable
|
|
|
83.2
|
|
|
|
110.0
|
|
Jackpot liabilities,
current portion
|
|
|
123.0
|
|
|
|
131.7
|
|
Dividends
payable
|
|
|
27.2
|
|
|
|
25.9
|
|
Other accrued
liabilities
|
|
|
288.1
|
|
|
|
414.3
|
|
Total
current liabilities
|
|
|
521.5
|
|
|
|
1,508.5
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,987.7
|
|
|
|
1,366.3
|
|
Jackpot
liabilities
|
|
|
273.0
|
|
|
|
293.3
|
|
Other
liabilities
|
|
|
109.8
|
|
|
|
190.6
|
|
TOTAL
LIABILITIES
|
|
|
2,892.0
|
|
|
|
3,358.7
|
|
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
1,165.4
|
|
|
|
1,254.1
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
|
4,057.4
|
|
|
$
|
4,612.8
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOW (Unaudited and Condensed)
|
|
Nine Months Ended
June 30,
|
|
2014
|
|
|
2013
|
|
|
|
(In
millions)
|
|
OPERATING
|
|
|
|
|
|
|
Net income
|
|
$
|
177.1
|
|
|
$
|
209.2
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
145.2
|
|
|
|
175.6
|
|
Acquisition-related
contingent earn-out costs
|
|
|
8.8
|
|
|
|
28.0
|
|
Other non-cash
items
|
|
|
70.8
|
|
|
|
74.6
|
|
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities, excluding acquisitions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
87.0
|
|
|
|
(20.7)
|
|
Inventories
|
|
|
(0.9)
|
|
|
|
3.7
|
|
Accounts payable and
accrued liabilities
|
|
|
(115.9)
|
|
|
|
(58.7)
|
|
Jackpot
liabilities
|
|
|
(41.3)
|
|
|
|
(58.2)
|
|
Income taxes, net of
employee stock plans
|
|
|
(48.5)
|
|
|
|
(25.5)
|
|
Other assets and
deferred costs
|
|
|
(220.9)
|
|
|
|
7.2
|
|
Net operating cash
flows
|
|
|
61.4
|
|
|
|
335.2
|
|
|
|
|
|
|
|
|
|
|
INVESTING
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(69.1)
|
|
|
|
(97.1)
|
|
Proceeds from assets
sold
|
|
|
16.7
|
|
|
|
15.3
|
|
Investment
securities, net
|
|
|
28.9
|
|
|
|
-
|
|
Jackpot annuity
investments, net
|
|
|
34.6
|
|
|
|
39.3
|
|
Changes in restricted
cash
|
|
|
3.8
|
|
|
|
8.8
|
|
Loans receivable,
net
|
|
|
9.0
|
|
|
|
22.6
|
|
Business
acquisitions, net of cash acquired
|
|
|
(1.5)
|
|
|
|
-
|
|
Net investing cash
flows
|
|
|
22.4
|
|
|
|
(11.1)
|
|
|
|
|
|
|
|
|
|
|
FINANCING
|
|
|
|
|
|
|
|
|
Debt-related proceeds
(payments), net
|
|
|
(225.6)
|
|
|
|
(143.2)
|
|
Employee stock plan
proceeds
|
|
|
13.7
|
|
|
|
13.7
|
|
Share repurchases,
including net shares
|
|
|
(211.4)
|
|
|
|
(81.0)
|
|
Dividends
paid
|
|
|
(80.5)
|
|
|
|
(55.5)
|
|
Acquisition-related
contingent consideration
|
|
|
(56.1)
|
|
|
|
(27.9)
|
|
Net financing cash
flows
|
|
|
(559.9)
|
|
|
|
(293.9)
|
|
|
|
|
|
|
|
|
|
|
FOREIGN EXCHANGE
RATES EFFECT ON CASH AND EQUIVALENTS
|
|
|
(1.6)
|
|
|
|
(7.2)
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND EQUIVALENTS
|
|
|
(477.7)
|
|
|
|
23.0
|
|
|
|
|
|
|
|
|
|
|
BEGINNING CASH AND
EQUIVALENTS
|
|
|
713.3
|
|
|
|
206.3
|
|
|
|
|
|
|
|
|
|
|
ENDING CASH AND
EQUIVALENTS
|
|
$
|
235.6
|
|
|
$
|
229.3
|
|
SUPPLEMENTAL DATA
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarters
|
|
Nine
Months
|
Periods Ended June
30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(In millions,
unless otherwise noted)
|
GAMING
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
217.6
|
|
|
$
|
247.3
|
|
|
$
|
671.0
|
|
|
$
|
744.3
|
|
North
America
|
|
|
189.9
|
|
|
|
214.1
|
|
|
|
581.7
|
|
|
|
643.0
|
|
International
|
|
|
27.7
|
|
|
|
33.2
|
|
|
|
89.3
|
|
|
|
101.3
|
|
Gross
margin
|
|
|
62
|
%
|
|
|
61
|
%
|
|
|
61
|
%
|
|
|
62
|
%
|
North
America
|
|
|
61
|
%
|
|
|
60
|
%
|
|
|
59
|
%
|
|
|
61
|
%
|
International
|
|
|
71
|
%
|
|
|
69
|
%
|
|
|
74
|
%
|
|
|
69
|
%
|
Installed base
(units '000)
|
|
|
50.5
|
|
|
|
56.7
|
|
|
|
50.5
|
|
|
|
56.7
|
|
North
America
|
|
|
39.3
|
|
|
|
42.5
|
|
|
|
39.3
|
|
|
|
42.5
|
|
International
|
|
|
11.2
|
|
|
|
14.2
|
|
|
|
11.2
|
|
|
|
14.2
|
|
Yield (average
revenue per unit per day - $0.00)
|
|
$
|
46.02
|
|
|
$
|
47.96
|
|
|
$
|
46.75
|
|
|
$
|
47.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRODUCT
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
166.9
|
|
|
$
|
259.2
|
|
|
$
|
613.1
|
|
|
$
|
772.9
|
|
North
America
|
|
|
111.1
|
|
|
|
184.7
|
|
|
|
425.0
|
|
|
|
544.2
|
|
International
|
|
|
55.8
|
|
|
|
74.5
|
|
|
|
188.1
|
|
|
|
228.7
|
|
Machines
|
|
$
|
87.2
|
|
|
$
|
177.9
|
|
|
$
|
370.1
|
|
|
$
|
537.8
|
|
North
America
|
|
|
51.6
|
|
|
|
123.5
|
|
|
|
248.8
|
|
|
|
374.1
|
|
International
|
|
|
35.6
|
|
|
|
54.4
|
|
|
|
121.3
|
|
|
|
163.7
|
|
Non-machine
|
|
$
|
79.7
|
|
|
$
|
81.3
|
|
|
$
|
243.0
|
|
|
$
|
235.1
|
|
North
America
|
|
|
59.5
|
|
|
|
61.2
|
|
|
|
176.2
|
|
|
|
170.1
|
|
International
|
|
|
20.2
|
|
|
|
20.1
|
|
|
|
66.8
|
|
|
|
65.0
|
|
Gross
margin
|
|
|
58
|
%
|
|
|
54
|
%
|
|
|
54
|
%
|
|
|
53
|
%
|
North
America
|
|
|
62
|
%
|
|
|
56
|
%
|
|
|
56
|
%
|
|
|
55
|
%
|
International
|
|
|
52
|
%
|
|
|
50
|
%
|
|
|
48
|
%
|
|
|
49
|
%
|
Machine units
recognized ('000)
|
|
|
7.3
|
|
|
|
13.4
|
|
|
|
28.0
|
|
|
|
38.4
|
|
North
America
|
|
|
4.0
|
|
|
|
10.0
|
|
|
|
19.3
|
|
|
|
28.3
|
|
International
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
8.7
|
|
|
|
10.1
|
|
Machine units
shipped ('000) [includes units where revenues
deferred]
|
|
|
7.1
|
|
|
|
13.6
|
|
|
|
27.7
|
|
|
|
37.2
|
|
North
America
|
|
|
4.0
|
|
|
|
10.3
|
|
|
|
19.3
|
|
|
|
28.3
|
|
New
|
|
|
1.4
|
|
|
|
2.5
|
|
|
|
7.2
|
|
|
|
6.9
|
|
Replacement
|
|
|
2.6
|
|
|
|
7.8
|
|
|
|
12.1
|
|
|
|
21.4
|
|
International
|
|
|
3.1
|
|
|
|
3.3
|
|
|
|
8.4
|
|
|
|
8.9
|
|
New
|
|
|
0.3
|
|
|
|
0.9
|
|
|
|
1.5
|
|
|
|
2.7
|
|
Replacement
|
|
|
2.8
|
|
|
|
2.4
|
|
|
|
6.9
|
|
|
|
6.2
|
|
Machine ASP
('000)
|
|
$
|
11.9
|
|
|
$
|
13.3
|
|
|
$
|
13.2
|
|
|
$
|
14.0
|
|
North
America
|
|
|
12.9
|
|
|
|
12.4
|
|
|
|
12.9
|
|
|
|
13.2
|
|
International
|
|
|
10.7
|
|
|
|
16.1
|
|
|
|
13.9
|
|
|
|
16.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERACTIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
83.1
|
|
|
$
|
72.5
|
|
|
$
|
237.5
|
|
|
$
|
192.0
|
|
North
America
|
|
|
73.7
|
|
|
|
62.2
|
|
|
|
209.7
|
|
|
|
158.8
|
|
International
|
|
|
9.4
|
|
|
|
10.3
|
|
|
|
27.8
|
|
|
|
33.2
|
|
Social
Gaming
|
|
|
71.8
|
|
|
|
61.4
|
|
|
|
205.4
|
|
|
|
157.1
|
|
North
America
|
|
|
71.8
|
|
|
|
61.4
|
|
|
|
205.4
|
|
|
|
157.1
|
|
International
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
IGTi
|
|
|
11.3
|
|
|
|
11.1
|
|
|
|
32.1
|
|
|
|
34.9
|
|
North
America
|
|
|
1.9
|
|
|
|
0.8
|
|
|
|
4.3
|
|
|
|
1.7
|
|
International
|
|
|
9.4
|
|
|
|
10.3
|
|
|
|
27.8
|
|
|
|
33.2
|
|
Gross
margin
|
|
|
63
|
%
|
|
|
63
|
%
|
|
|
62
|
%
|
|
|
61
|
%
|
North
America
|
|
|
63
|
%
|
|
|
63
|
%
|
|
|
62
|
%
|
|
|
62
|
%
|
International
|
|
|
65
|
%
|
|
|
65
|
%
|
|
|
61
|
%
|
|
|
58
|
%
|
DoubleDown average
user statistics [as a single application with multiple
games, active users equal unique users]
|
|
DAU (daily active
users) ('000)
|
|
|
1,833
|
|
|
|
1,690
|
|
|
|
1,774
|
|
|
|
1,613
|
|
MAU (monthly active
users) ('000)
|
|
|
5,975
|
|
|
|
6,658
|
|
|
|
6,130
|
|
|
|
5,950
|
|
Bookings per DAU
($0.00)
|
|
$
|
0.43
|
|
|
$
|
0.40
|
|
|
$
|
0.42
|
|
|
$
|
0.36
|
|
Reconciliations of
GAAP to Non-GAAP Adjusted Financial Measures
(in millions,
except EPS)
|
|
Third Quarter
Ended June 30, 2014
|
|
Cost of
Product Sales
|
|
|
Cost of
Interactive
|
|
|
Operating Expenses
|
|
|
Operating Income
|
|
|
Net
Earnings (a)
|
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures
|
|
$
|
69.4
|
|
|
$
|
30.8
|
|
|
$
|
175.3
|
|
|
$
|
109.6
|
|
|
$
|
72.1
|
|
|
$
|
0.29
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
37
|
%
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.2)
|
|
|
|
2.2
|
|
|
|
1.5
|
|
|
|
0.01
|
|
Amortization of
intangibles
|
|
|
(0.1)
|
|
|
|
(2.7)
|
|
|
|
(3.4)
|
|
|
|
6.2
|
|
|
|
4.2
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-related
professional fees
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.3)
|
|
|
|
1.3
|
|
|
|
0.9
|
|
|
|
-
|
|
Certain discrete tax
items (benefits)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.4)
|
|
|
|
(0.04)
|
|
Total non-GAAP
adjustments
|
|
|
(0.1)
|
|
|
|
(2.7)
|
|
|
|
(6.9)
|
|
|
|
9.7
|
|
|
|
(2.8)
|
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
69.3
|
|
|
$
|
28.1
|
|
|
$
|
168.4
|
|
|
$
|
119.3
|
|
|
$
|
69.3
|
|
|
$
|
0.28
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
36
|
%
|
|
|
26
|
%
|
|
|
|
|
|
|
|
|
Third Quarter
Ended June 30, 2013
|
|
Cost of
Product Sales
|
|
|
Cost of
Interactive
|
|
|
Operating
Expenses
|
|
|
Operating
Income
|
|
|
Net
Earnings (a)
|
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures
|
|
$
|
95.6
|
|
|
$
|
26.9
|
|
|
$
|
214.2
|
|
|
$
|
123.0
|
|
|
$
|
65.7
|
|
|
$
|
0.25
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
37
|
%
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
(19.2)
|
|
|
|
19.2
|
|
|
|
12.8
|
|
|
|
0.05
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
(2.3)
|
|
|
|
(4.4)
|
|
|
|
6.7
|
|
|
|
4.4
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proxy Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.7)
|
|
|
|
3.7
|
|
|
|
2.5
|
|
|
|
0.01
|
|
Building
impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.5)
|
|
|
|
1.5
|
|
|
|
1.0
|
|
|
|
-
|
|
Total non-GAAP
adjustments
|
|
|
-
|
|
|
|
(2.3)
|
|
|
|
(28.8)
|
|
|
|
31.1
|
|
|
|
20.7
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
95.6
|
|
|
$
|
24.6
|
|
|
$
|
185.4
|
|
|
$
|
154.1
|
|
|
$
|
86.4
|
|
|
$
|
0.33
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
32
|
%
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
(a) Adjustments
tax effected at 33%; (b) Primarily
DoubleDown
|
Nine Months Ended
June 30, 2014
|
|
Product
Sales Revenue
|
|
|
Cost of
Gaming Operations
|
|
|
Cost of
Product Sales
|
|
|
Cost of
Interactive
|
|
|
Operating
Expenses
|
|
|
Operating
Income
|
|
|
Net
Earnings (a)
|
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures
|
|
$
|
613.1
|
|
|
$
|
259.3
|
|
|
$
|
284.8
|
|
|
$
|
90.1
|
|
|
$
|
602.0
|
|
|
$
|
285.4
|
|
|
$
|
177.1
|
|
|
$
|
0.71
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
%
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17.2)
|
|
|
|
17.2
|
|
|
|
11.5
|
|
|
|
0.04
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.1)
|
|
|
|
(8.1)
|
|
|
|
(10.2)
|
|
|
|
18.4
|
|
|
|
12.3
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-related
professional fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.3)
|
|
|
|
1.3
|
|
|
|
0.9
|
|
|
|
-
|
|
Business
realignment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.5)
|
|
|
|
16.5
|
|
|
|
11.0
|
|
|
|
0.05
|
|
Alabama note
impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.3)
|
|
|
|
1.3
|
|
|
|
0.9
|
|
|
|
-
|
|
Legal
accrual
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7.8)
|
|
|
|
7.8
|
|
|
|
5.2
|
|
|
|
0.02
|
|
Severance
|
|
|
-
|
|
|
|
(0.6)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.1)
|
|
|
|
2.7
|
|
|
|
1.8
|
|
|
|
0.01
|
|
Certain discrete tax
items (benefits)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(39.0)
|
|
|
|
(0.16)
|
|
Total non-GAAP
adjustments
|
|
|
-
|
|
|
|
(0.6)
|
|
|
|
(0.1)
|
|
|
|
(8.1)
|
|
|
|
(56.4)
|
|
|
|
65.2
|
|
|
|
4.6
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
613.1
|
|
|
$
|
258.7
|
|
|
$
|
284.7
|
|
|
$
|
82.0
|
|
|
$
|
545.6
|
|
|
$
|
350.6
|
|
|
$
|
181.7
|
|
|
$
|
0.72
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
%
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2013
|
|
Product
Sales Revenue
|
|
|
Cost of
Gaming Operations
|
|
|
Cost of
Product Sales
|
|
|
Cost of
Interactive
|
|
|
Operating
Expenses
|
|
|
Operating
Income
|
|
|
Net
Earnings (a)
|
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures
|
|
$
|
772.9
|
|
|
$
|
282.7
|
|
|
$
|
363.7
|
|
|
$
|
75.1
|
|
|
$
|
617.0
|
|
|
$
|
370.7
|
|
|
$
|
209.2
|
|
|
$
|
0.79
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
%
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(58.6)
|
|
|
|
58.6
|
|
|
|
39.1
|
|
|
|
0.14
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6.9)
|
|
|
|
(13.3)
|
|
|
|
20.2
|
|
|
|
13.5
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proxy Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7.6)
|
|
|
|
7.6
|
|
|
|
5.1
|
|
|
|
0.02
|
|
Impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.1)
|
|
|
|
3.1
|
|
|
|
2.1
|
|
|
|
0.01
|
|
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)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6.9)
|
|
|
|
(82.6)
|
|
|
|
84.5
|
|
|
|
48.9
|
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
767.9
|
|
|
$
|
282.7
|
|
|
$
|
363.7
|
|
|
$
|
68.2
|
|
|
$
|
534.4
|
|
|
$
|
455.2
|
|
|
$
|
258.1
|
|
|
$
|
0.97
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
%
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
(a) Adjustments
tax effected at 33%, except no tax effect on royalty settlement;
(b) Primarily DoubleDown
|
|
|
Third
Quarters
|
|
|
Nine
Months
|
|
Adjusted EBITDA
For The Periods Ended June 30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
|
$
|
72.1
|
|
|
$
|
65.7
|
|
|
$
|
177.1
|
|
|
$
|
209.2
|
|
Other (income)
expense, net
|
|
|
15.5
|
|
|
|
25.7
|
|
|
|
73.3
|
|
|
|
68.0
|
|
Income tax
provision
|
|
|
22.0
|
|
|
|
31.6
|
|
|
|
35.0
|
|
|
|
93.5
|
|
Depreciation and
amortization
|
|
|
45.8
|
|
|
|
57.8
|
|
|
|
145.2
|
|
|
|
175.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
6.6
|
|
|
|
10.1
|
|
|
|
23.1
|
|
|
|
28.7
|
|
Contingent
acquisition-related costs
|
|
|
2.2
|
|
|
|
19.2
|
|
|
|
17.2
|
|
|
|
58.6
|
|
Impairment
|
|
|
-
|
|
|
|
1.5
|
|
|
|
17.8
|
|
|
|
3.1
|
|
Adjusted
EBITDA
|
|
$
|
164.2
|
|
|
$
|
211.6
|
|
|
$
|
488.7
|
|
|
$
|
636.7
|
|
Free Cash Flow For
The Nine Months Ended June 30,
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
GAAP net operating
cash flows
|
|
$
|
61.4
|
|
|
$
|
335.2
|
|
Investment in
property, plant and equipment
|
|
|
(20.5)
|
|
|
|
(18.7)
|
|
Investment in gaming
operations equipment
|
|
|
(45.8)
|
|
|
|
(78.1)
|
|
Investment in
intellectual property
|
|
|
(2.8)
|
|
|
|
(0.3)
|
|
Free Cash Flow
(before dividends)
|
|
|
(7.7)
|
|
|
|
238.1
|
|
Dividends
paid
|
|
|
(80.5)
|
|
|
|
(55.5)
|
|
Free Cash Flow
(after dividends)
|
|
$
|
(88.2)
|
|
|
$
|
182.6
|
|
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.
|
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SOURCE International Game Technology