LAS VEGAS, Nov. 6, 2014 /PRNewswire/ -- International Game
Technology (NYSE: IGT) today reported operating results for the
fourth quarter and fiscal year ended September 30, 2014.
"Our focus on profitability resulted in significant improvements
in our gross margins for the year, and in our gross and operating
margins for the fourth quarter, in large part due to cost saving
actions we took earlier this year," said Patti Hart, IGT Chief Executive Officer.
"While we continue to see muted demand in our core business, our
DoubleDown Casino business drove 28% revenue growth for the full
year while maintaining industry- leading player monetization rates
and growing daily active users."
Consolidated Results
|
|
Fourth
Quarters
|
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
536.5
|
|
|
$
|
632.3
|
|
|
|
-15
|
%
|
|
|
$
|
2,058.1
|
|
|
$
|
2,341.6
|
|
|
|
-12
|
%
|
Operating
income
|
|
|
123.2
|
|
|
|
123.4
|
|
|
|
-
|
|
|
|
|
408.6
|
|
|
|
494.1
|
|
|
|
-17
|
%
|
Net income
|
|
|
70.9
|
|
|
|
63.5
|
|
|
|
12
|
%
|
|
|
|
247.9
|
|
|
|
272.7
|
|
|
|
-9
|
%
|
Earnings per
share
|
|
$
|
0.28
|
|
|
$
|
0.24
|
|
|
|
17
|
%
|
|
|
$
|
0.99
|
|
|
$
|
1.03
|
|
|
|
-4
|
%
|
Net operating cash
flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
199.2
|
|
|
$
|
462.6
|
|
|
|
-57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Measures (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
156.7
|
|
|
$
|
148.2
|
|
|
|
6
|
%
|
|
|
$
|
507.3
|
|
|
$
|
603.5
|
|
|
|
-16
|
%
|
Adjusted net
income
|
|
|
93.1
|
|
|
|
79.8
|
|
|
|
17
|
%
|
|
|
|
274.1
|
|
|
|
336.7
|
|
|
|
-19
|
%
|
Adjusted earnings per
share
|
|
$
|
0.37
|
|
|
$
|
0.30
|
|
|
|
23
|
%
|
|
|
$
|
1.09
|
|
|
$
|
1.27
|
|
|
|
-14
|
%
|
Free cash flow
(before dividends)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
110.9
|
|
|
$
|
334.8
|
|
|
|
-67
|
%
|
(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.
|
- Fiscal 2014 revenue decreased 12% to $2.1 billion, due to declines in product sales
and gaming operations, partially offset by an increase in social
gaming revenue.
- Fiscal 2014 adjusted earnings per share decreased 14% to
$1.09.
- Free cash flow for the year decreased 67% to $111 million primarily due to the company's
investment to extend land-based licensing rights for Wheel of
Fortune® and Jeopardy!
® through 2024, as well as expand
rights to include social gaming and online real-money wagering in
the U.S.
Gaming Operations
|
|
Fourth
Quarters
|
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
215.9
|
|
|
$
|
247.1
|
|
|
|
-13
|
%
|
|
|
$
|
886.9
|
|
|
$
|
991.4
|
|
|
|
-11
|
%
|
Gross
profit
|
|
|
135.6
|
|
|
|
155.5
|
|
|
|
-13
|
%
|
|
|
|
547.4
|
|
|
|
617.1
|
|
|
|
-11
|
%
|
Gross
margin
|
|
|
63
|
%
|
|
|
63
|
%
|
|
|
-
|
|
|
|
|
62
|
%
|
|
|
62
|
%
|
|
|
-
|
|
Installed base
('000)
|
|
|
47.6
|
|
|
|
54.6
|
|
|
|
-13
|
%
|
|
|
|
47.6
|
|
|
|
54.6
|
|
|
|
-13
|
%
|
Yield (average
revenue per unit per day - $0.00)
|
|
$
|
48.39
|
|
|
$
|
48.78
|
|
|
|
-1
|
%
|
|
|
$
|
47.69
|
|
|
$
|
48.74
|
|
|
|
-2
|
%
|
- Fourth quarter revenue decreased 13% to $216 million primarily due to installed base
declines.
- Gross margin in the fourth quarter was consistent with the
prior year quarter, as lower revenue was offset by lower
depreciation.
- Installed base decreased 13% driven largely by declines in
International primarily due to lease operation unit conversions and
North America MegaJackpots® ("MJP"), most significantly in the
standalone category.
- Average revenue per unit per day in the fourth quarter was
$48.39, down slightly over the prior
year quarter, driven by lower international MJP yields, partially
offset by higher North America MJP yields.
Product Sales
|
|
Fourth
Quarters
|
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
233.9
|
|
|
$
|
312.2
|
|
|
|
-25
|
%
|
|
|
$
|
847.0
|
|
|
$
|
1,085.2
|
|
|
|
-22
|
%
|
Gross
profit
|
|
|
136.5
|
|
|
|
155.7
|
|
|
|
-12
|
%
|
|
|
|
464.9
|
|
|
|
565.0
|
|
|
|
-18
|
%
|
Gross
margin
|
|
|
58
|
%
|
|
|
50
|
%
|
|
|
16
|
%
|
|
|
|
55
|
%
|
|
|
52
|
%
|
|
|
6
|
%
|
Machine units
recognized ('000)
|
|
|
9.8
|
|
|
|
18.8
|
|
|
|
-48
|
%
|
|
|
|
37.8
|
|
|
|
57.2
|
|
|
|
-34
|
%
|
Machine average sales
price ('000)
|
|
$
|
12.6
|
|
|
$
|
11.6
|
|
|
|
9
|
%
|
|
|
$
|
13.0
|
|
|
$
|
13.2
|
|
|
|
-2
|
%
|
- Revenue decreased 25% to $234
million in the fourth quarter due to lower machine unit
volume, as the prior year quarter benefited from 1,800 Canadian VLT
units, 1,000 additional Illinois VLT units, and 4,600 video poker
units under a large contract.
- Gross margin increased to 58% from 50%, while average machine
sales prices increased to $12,600 in
the fourth quarter due to a more favorable product mix. Gross
margin also benefited from higher intellectual property licensing
revenue.
Interactive
|
|
Fourth
Quarters
|
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
86.7
|
|
|
$
|
73.0
|
|
|
|
19
|
%
|
|
|
$
|
324.2
|
|
|
$
|
265.0
|
|
|
|
22
|
%
|
Social
gaming
|
|
|
75.1
|
|
|
|
61.4
|
|
|
|
22
|
%
|
|
|
|
280.5
|
|
|
|
218.5
|
|
|
|
28
|
%
|
IGTi
|
|
|
11.6
|
|
|
|
11.6
|
|
|
|
-
|
|
|
|
|
43.7
|
|
|
|
46.5
|
|
|
|
-6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
63
|
%
|
|
|
62
|
%
|
|
|
2
|
%
|
|
|
|
62
|
%
|
|
|
61
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DoubleDown average
user statistics (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DAU (Daily active
users) ('000)
|
|
|
1,816
|
|
|
|
1,705
|
|
|
|
7
|
%
|
|
|
|
1,785
|
|
|
|
1,636
|
|
|
|
9
|
%
|
MAU (Monthly active
users) ('000)
|
|
|
5,717
|
|
|
|
6,720
|
|
|
|
-15
|
%
|
|
|
|
6,027
|
|
|
|
6,141
|
|
|
|
-2
|
%
|
Bookings per DAU
($0.00)
|
|
$
|
0.46
|
|
|
$
|
0.40
|
|
|
|
15
|
%
|
|
|
$
|
0.43
|
|
|
$
|
0.37
|
|
|
|
16
|
%
|
(1) as a single
application with multiple games, active users equal unique
users
|
- Social gaming revenue in the fourth quarter increased 22% to
$75 million compared to the prior
year quarter, driven by increases in both average DAU and bookings
per DAU. Mobile revenue comprised 36% of total bookings in the
fourth quarter and increased 62% compared to the prior year
period.
- Fourth quarter average DAU were 1.8 million, an increase of 7%
over the prior year quarter.
- Fourth quarter average MAU were 5.7 million, a decrease of 15%
compared to the prior year quarter, primarily due to increased
marketing efforts to procure higher-quality players.
- Average bookings per DAU in the fourth quarter were
$0.46, an increase of 15% over the
same quarter last year.
Operating Expenses
|
|
Fourth
Quarters
|
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
& administrative
|
|
$
|
111.3
|
|
|
$
|
135.3
|
|
|
|
-18
|
%
|
|
|
$
|
455.2
|
|
|
$
|
460.4
|
|
|
|
-1
|
%
|
Research &
development
|
|
|
52.6
|
|
|
|
62.7
|
|
|
|
-16
|
%
|
|
|
|
224.8
|
|
|
|
235.0
|
|
|
|
-4
|
%
|
Depreciation &
amortization
|
|
|
16.5
|
|
|
|
19.4
|
|
|
|
-15
|
%
|
|
|
|
66.2
|
|
|
|
77.4
|
|
|
|
-14
|
%
|
Contingent
acquisition-related costs
|
|
|
2.4
|
|
|
|
15.3
|
|
|
|
-84
|
%
|
|
|
|
19.6
|
|
|
|
73.9
|
|
|
|
-73
|
%
|
Impairment,
restructuring, and merger related costs
|
|
|
21.1
|
|
|
|
0.4
|
|
|
|
*
|
|
|
|
|
40.2
|
|
|
|
3.6
|
|
|
|
*
|
|
Total operating
expenses
|
|
$
|
203.9
|
|
|
$
|
233.1
|
|
|
|
-13
|
%
|
|
|
$
|
806.0
|
|
|
$
|
850.3
|
|
|
|
-5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Expenses (1)
|
|
$
|
173.9
|
|
|
$
|
210.6
|
|
|
|
-17
|
%
|
|
|
$
|
719.6
|
|
|
$
|
745.1
|
|
|
|
-3
|
%
|
(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.
|
- Fourth quarter operating expenses decreased 13% to $204 million compared to the prior year quarter
primarily due to lower selling, general and administrative,
research and development, and acquisition-related expenses,
partially offset by higher impairment, restructuring, and
merger-related charges.
- Selling, general and administrative, and research and
development expenses decreased over the prior year quarter
primarily due to cost savings resulting from the March 2014 business realignment.
- Adjusted operating expenses for the fourth quarter were 32% of
revenue compared to 33% in the prior year quarter.
Balance Sheet and Capital Deployment
|
|
September
30,
|
|
(in millions)
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
Cash and equivalents
(including restricted amounts)
|
|
$
|
314.4
|
|
|
$
|
809.1
|
|
|
|
-61
|
%
|
Working
capital
|
|
|
676.3
|
|
|
|
267.5
|
|
|
|
153
|
%
|
Contractual debt
obligations
|
|
|
1,825.0
|
|
|
|
2,150.0
|
|
|
|
-15
|
%
|
- Operating cash flow was $138
million in the fourth quarter on net income of $71 million.
- Contractual debt obligations decreased $325 million due to the maturity of the company's
$800 million convertible notes on
May 1, 2014.
- Outstanding borrowings under the company's revolving credit
facility were $525 million as of
September 30, 2014.
- During fiscal 2014, the company returned $319 million in the form of dividends and share
repurchases to its shareholders.
Other
References to per share amounts in this release are based on
diluted shares of common stock, unless otherwise specified.
Outlook
IGT will not provide financial guidance for fiscal year 2015.
As previously announced, IGT has entered into a definitive merger
agreement with GTECH S.p.A. for the acquisition of IGT by GTECH for
$6.4 billion, comprised of
$4.7 billion in cash and stock and
the assumption of $1.7 billion in net
debt. The transaction is currently expected to be completed
in the first half of calendar 2015.
Earnings Conference Call
There will be no earnings conference call.
Q4 FY 2014 Excel file
Q4 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 and our
strategic and operational plans, as well as the expected timing of
the closing of the proposed merger transactions with GTECH S.p.A.
("GTECH"). 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 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 June 30, 2014 filed
with the SEC on August 6, 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 Annual Report
on Form 10-K for our fiscal year ended September 30, 2014, which we expect to file with
the SEC in the fourth quarter of calendar 2014. All
information provided in this release is as of November 6, 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 for informational purposes only and 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 transactions
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 PLC, a newly formed holding company ("NewCo"),
has filed with the SEC a registration statement on Form F-4 (File
No. 333-199096), which includes a proxy statement of IGT that also
constitutes a prospectus of NewCo (the "proxy
statement/prospectus"). INVESTORS AND SECURITYHOLDERS ARE URGED TO
READ THE PRELIMINARY PROXY STATEMENT/PROSPECTUS, AND OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED WITH THE SEC, INCLUDING THE
DEFINITIVE PROXY STATEMENT/PROSPECTUS, 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, is set forth in the proxy
statement/prospectus 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 Contacts:
Kate Pearlman
Vice President, Investor Relations and Treasury
Cindy Klimstra
Director, Investor Relations
+1 866-296-4232
InvestorRelations@IGT.com
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited and Condensed)
|
|
|
|
|
|
|
|
|
|
Fourth
Quarters
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
(In millions,
except per share amounts)
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
|
$
|
215.9
|
|
|
$
|
247.1
|
|
|
$
|
886.9
|
|
|
$
|
991.4
|
|
Product
sales
|
|
|
233.9
|
|
|
|
312.2
|
|
|
|
847.0
|
|
|
|
1,085.2
|
|
Interactive
|
|
|
86.7
|
|
|
|
73.0
|
|
|
|
324.2
|
|
|
|
265.0
|
|
Total
|
|
|
536.5
|
|
|
|
632.3
|
|
|
|
2,058.1
|
|
|
|
2,341.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of gaming
operations
|
|
|
80.3
|
|
|
|
91.6
|
|
|
|
339.5
|
|
|
|
374.3
|
|
Cost of product
sales
|
|
|
97.4
|
|
|
|
156.5
|
|
|
|
382.1
|
|
|
|
520.2
|
|
Cost of
interactive
|
|
|
31.7
|
|
|
|
27.7
|
|
|
|
121.9
|
|
|
|
102.7
|
|
Selling, general and
administrative
|
|
|
111.3
|
|
|
|
135.3
|
|
|
|
455.2
|
|
|
|
460.4
|
|
Research and
development
|
|
|
52.6
|
|
|
|
62.7
|
|
|
|
224.8
|
|
|
|
235.0
|
|
Depreciation and
amortization
|
|
|
16.5
|
|
|
|
19.4
|
|
|
|
66.2
|
|
|
|
77.4
|
|
Contingent
acquisition-related costs
|
|
|
2.4
|
|
|
|
15.3
|
|
|
|
19.6
|
|
|
|
73.9
|
|
Impairment,
restructuring, and merger related costs
|
|
|
21.1
|
|
|
|
0.4
|
|
|
|
40.2
|
|
|
|
3.6
|
|
Total
|
|
|
413.3
|
|
|
|
508.9
|
|
|
|
1,649.5
|
|
|
|
1,847.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
123.2
|
|
|
|
123.4
|
|
|
|
408.6
|
|
|
|
494.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
9.1
|
|
|
|
10.4
|
|
|
|
40.4
|
|
|
|
44.4
|
|
Interest
expense
|
|
|
(19.6)
|
|
|
|
(31.0)
|
|
|
|
(119.5)
|
|
|
|
(123.4)
|
|
Other
|
|
|
(3.4)
|
|
|
|
(3.3)
|
|
|
|
(8.2)
|
|
|
|
(12.8)
|
|
Total
|
|
|
(13.9)
|
|
|
|
(23.9)
|
|
|
|
(87.3)
|
|
|
|
(91.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
TAX
|
|
|
109.3
|
|
|
|
99.5
|
|
|
|
321.3
|
|
|
|
402.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
38.4
|
|
|
|
36.0
|
|
|
|
73.4
|
|
|
|
129.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
|
70.9
|
|
|
$
|
63.5
|
|
|
$
|
247.9
|
|
|
$
|
272.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.29
|
|
|
$
|
0.24
|
|
|
$
|
1.00
|
|
|
$
|
1.04
|
|
Diluted
|
|
$
|
0.28
|
|
|
$
|
0.24
|
|
|
$
|
0.99
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
247.2
|
|
|
|
260.4
|
|
|
|
248.6
|
|
|
|
262.6
|
|
Diluted
|
|
|
249.3
|
|
|
|
264.7
|
|
|
|
250.5
|
|
|
|
265.2
|
|
CONSOLIDATED
BALANCE SHEET (Unaudited and Condensed)
|
|
|
|
September
30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
(In
millions)
|
|
ASSETS
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
255.1
|
|
|
$
|
713.3
|
|
Investment
securities
|
|
|
-
|
|
|
|
28.8
|
|
Restricted cash and
investment securities
|
|
|
59.3
|
|
|
|
67.0
|
|
Jackpot annuity
investments
|
|
|
53.0
|
|
|
|
56.5
|
|
Receivables,
net
|
|
|
530.2
|
|
|
|
577.9
|
|
Inventories
|
|
|
71.4
|
|
|
|
90.1
|
|
Other assets and
deferred costs
|
|
|
252.1
|
|
|
|
242.4
|
|
Total current
assets
|
|
|
1,221.1
|
|
|
|
1,776.0
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
412.7
|
|
|
|
483.9
|
|
Jackpot annuity
investments
|
|
|
236.7
|
|
|
|
268.6
|
|
Contracts and notes
receivable, net
|
|
|
115.5
|
|
|
|
165.6
|
|
Goodwill and other
intangible assets, net
|
|
|
1,542.5
|
|
|
|
1,601.7
|
|
Other assets and
deferred costs
|
|
|
461.0
|
|
|
|
317.0
|
|
TOTAL
ASSETS
|
|
$
|
3,989.5
|
|
|
$
|
4,612.8
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
-
|
|
|
$
|
826.6
|
|
Accounts
payable
|
|
|
77.7
|
|
|
|
110.0
|
|
Jackpot liabilities,
current portion
|
|
|
117.5
|
|
|
|
131.7
|
|
Dividends
payable
|
|
|
27.2
|
|
|
|
25.9
|
|
Other accrued
liabilities
|
|
|
322.4
|
|
|
|
414.3
|
|
Total current
liabilities
|
|
|
544.8
|
|
|
|
1,508.5
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,878.6
|
|
|
|
1,366.3
|
|
Jackpot
liabilities
|
|
|
261.6
|
|
|
|
293.3
|
|
Other
liabilities
|
|
|
106.9
|
|
|
|
190.6
|
|
TOTAL
LIABILITIES
|
|
|
2,791.9
|
|
|
|
3,358.7
|
|
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
1,197.6
|
|
|
|
1,254.1
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
|
3,989.5
|
|
|
$
|
4,612.8
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOW (Unaudited and Condensed)
|
|
Years Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
|
(In
millions)
|
|
OPERATING
|
|
|
|
|
|
|
Net income
|
|
$
|
247.9
|
|
|
$
|
272.7
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
189.0
|
|
|
|
231.6
|
|
Acquisition-related
contingent earn-out costs
|
|
|
11.2
|
|
|
|
35.0
|
|
Other non-cash
items
|
|
|
81.6
|
|
|
|
95.3
|
|
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities, excluding acquisitions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
66.6
|
|
|
|
(93.1)
|
|
Inventories
|
|
|
13.3
|
|
|
|
14.2
|
|
Accounts payable and
accrued liabilities
|
|
|
(89.4)
|
|
|
|
(33.6)
|
|
Jackpot
liabilities
|
|
|
(61.6)
|
|
|
|
(73.6)
|
|
Income taxes, net of
employee stock plans
|
|
|
(49.2)
|
|
|
|
(27.1)
|
|
Other assets and
deferred costs
|
|
|
(210.2)
|
|
|
|
28.6
|
|
Settlement of
treasury lock contracts
|
|
|
-
|
|
|
|
12.6
|
|
Net operating cash
flows
|
|
|
199.2
|
|
|
|
462.6
|
|
|
|
|
|
|
|
|
|
|
INVESTING
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(88.3)
|
|
|
|
(127.8)
|
|
Proceeds from assets
sold
|
|
|
28.2
|
|
|
|
24.6
|
|
Investment
securities, net
|
|
|
28.9
|
|
|
|
(28.8)
|
|
Jackpot annuity
investments, net
|
|
|
50.9
|
|
|
|
48.6
|
|
Changes in restricted
cash
|
|
|
7.8
|
|
|
|
14.9
|
|
Loans receivable,
net
|
|
|
9.0
|
|
|
|
32.4
|
|
Business
acquisitions, net of cash acquired
|
|
|
(1.5)
|
|
|
|
-
|
|
Net investing cash
flows
|
|
|
35.0
|
|
|
|
(36.1)
|
|
|
|
|
|
|
|
|
|
|
FINANCING
|
|
|
|
|
|
|
|
|
Debt-related proceeds
(payments), net
|
|
|
(325.6)
|
|
|
|
351.4
|
|
Employee stock plan
proceeds
|
|
|
15.5
|
|
|
|
30.0
|
|
Share repurchases,
including net shares
|
|
|
(211.6)
|
|
|
|
(190.5)
|
|
Dividends
paid
|
|
|
(107.7)
|
|
|
|
(79.0)
|
|
Acquisition-related
contingent consideration
|
|
|
(56.1)
|
|
|
|
(27.9)
|
|
Net financing cash
flows
|
|
|
(685.5)
|
|
|
|
84.0
|
|
|
|
|
|
|
|
|
|
|
FOREIGN EXCHANGE
RATES EFFECT ON CASH AND EQUIVALENTS
|
|
|
(6.9)
|
|
|
|
(3.5)
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND EQUIVALENTS
|
|
|
(458.2)
|
|
|
|
507.0
|
|
|
|
|
|
|
|
|
|
|
BEGINNING CASH AND
EQUIVALENTS
|
|
|
713.3
|
|
|
|
206.3
|
|
|
|
|
|
|
|
|
|
|
ENDING CASH AND
EQUIVALENTS
|
|
$
|
255.1
|
|
|
$
|
713.3
|
|
SUPPLEMENTAL DATA
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
METRICS
|
|
Fourth
Quarters
|
|
|
Years
|
|
Periods Ended
September 30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
(In millions,
unless otherwise noted)
|
|
GAMING
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
215.9
|
|
|
$
|
247.1
|
|
|
$
|
886.9
|
|
|
$
|
991.4
|
|
North
America
|
|
|
188.4
|
|
|
|
211.2
|
|
|
|
770.1
|
|
|
|
854.2
|
|
International
|
|
|
27.5
|
|
|
|
35.9
|
|
|
|
116.8
|
|
|
|
137.2
|
|
Gross margin
|
|
|
63
|
%
|
|
|
63
|
%
|
|
|
62
|
%
|
|
|
62
|
%
|
North
America
|
|
|
62
|
%
|
|
|
62
|
%
|
|
|
60
|
%
|
|
|
61
|
%
|
International
|
|
|
68
|
%
|
|
|
69
|
%
|
|
|
72
|
%
|
|
|
69
|
%
|
Installed base
(units '000)
|
|
|
47.6
|
|
|
|
54.6
|
|
|
|
47.6
|
|
|
|
54.6
|
|
North
America
|
|
|
38.0
|
|
|
|
41.4
|
|
|
|
38.0
|
|
|
|
41.4
|
|
International
|
|
|
9.6
|
|
|
|
13.2
|
|
|
|
9.6
|
|
|
|
13.2
|
|
Yield (average
revenue per unit per day - $0.00)
|
|
$
|
48.39
|
|
|
$
|
48.78
|
|
|
$
|
47.69
|
|
|
$
|
48.74
|
|
PRODUCT
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
233.9
|
|
|
$
|
312.2
|
|
|
$
|
847.0
|
|
|
$
|
1,085.2
|
|
North
America
|
|
|
137.5
|
|
|
|
215.6
|
|
|
|
562.5
|
|
|
|
759.8
|
|
International
|
|
|
96.4
|
|
|
|
96.6
|
|
|
|
284.5
|
|
|
|
325.4
|
|
Machines
|
|
$
|
123.4
|
|
|
$
|
217.7
|
|
|
$
|
493.5
|
|
|
$
|
755.5
|
|
North
America
|
|
|
59.6
|
|
|
|
145.3
|
|
|
|
308.4
|
|
|
|
519.4
|
|
International
|
|
|
63.8
|
|
|
|
72.4
|
|
|
|
185.1
|
|
|
|
236.1
|
|
Non-machine
|
|
$
|
110.5
|
|
|
$
|
94.5
|
|
|
$
|
353.5
|
|
|
$
|
329.7
|
|
North
America
|
|
|
77.9
|
|
|
|
70.3
|
|
|
|
254.1
|
|
|
|
240.4
|
|
International
|
|
|
32.6
|
|
|
|
24.2
|
|
|
|
99.4
|
|
|
|
89.3
|
|
Gross
margin
|
|
|
58
|
%
|
|
|
50
|
%
|
|
|
55
|
%
|
|
|
52
|
%
|
North
America
|
|
|
62
|
%
|
|
|
51
|
%
|
|
|
58
|
%
|
|
|
54
|
%
|
International
|
|
|
52
|
%
|
|
|
48
|
%
|
|
|
49
|
%
|
|
|
48
|
%
|
Machine units
recognized ('000)
|
|
|
9.8
|
|
|
|
18.8
|
|
|
|
37.8
|
|
|
|
57.2
|
|
North
America
|
|
|
4.9
|
|
|
|
13.9
|
|
|
|
24.2
|
|
|
|
42.2
|
|
International
|
|
|
4.9
|
|
|
|
4.9
|
|
|
|
13.6
|
|
|
|
15.0
|
|
Machine units
shipped ('000) [includes units where revenues
deferred]
|
|
|
10.0
|
|
|
|
18.4
|
|
|
|
37.7
|
|
|
|
55.6
|
|
North
America
|
|
|
4.9
|
|
|
|
13.4
|
|
|
|
24.2
|
|
|
|
41.7
|
|
New
|
|
|
1.7
|
|
|
|
1.9
|
|
|
|
8.9
|
|
|
|
8.8
|
|
Replacement
|
|
|
3.2
|
|
|
|
11.5
|
|
|
|
15.3
|
|
|
|
32.9
|
|
International
|
|
|
5.1
|
|
|
|
5.0
|
|
|
|
13.5
|
|
|
|
13.9
|
|
New
|
|
|
0.8
|
|
|
|
2.1
|
|
|
|
2.3
|
|
|
|
4.8
|
|
Replacement
|
|
|
4.3
|
|
|
|
2.9
|
|
|
|
11.2
|
|
|
|
9.1
|
|
Machine ASP
('000)
|
|
$
|
12.6
|
|
|
$
|
11.6
|
|
|
$
|
13.0
|
|
|
$
|
13.2
|
|
North
America
|
|
|
12.1
|
|
|
|
10.5
|
|
|
|
12.8
|
|
|
|
12.3
|
|
International
|
|
|
13.0
|
|
|
|
15.0
|
|
|
|
13.6
|
|
|
|
15.8
|
|
INTERACTIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
86.7
|
|
|
$
|
73.0
|
|
|
$
|
324.2
|
|
|
$
|
265.0
|
|
North
America
|
|
|
76.9
|
|
|
|
62.3
|
|
|
|
286.6
|
|
|
|
221.1
|
|
International
|
|
|
9.8
|
|
|
|
10.7
|
|
|
|
37.6
|
|
|
|
43.9
|
|
Social
Gaming
|
|
|
75.1
|
|
|
|
61.4
|
|
|
|
280.5
|
|
|
|
218.5
|
|
North
America
|
|
|
75.1
|
|
|
|
61.4
|
|
|
|
280.5
|
|
|
|
218.5
|
|
International
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
IGTi
|
|
|
11.6
|
|
|
|
11.6
|
|
|
|
43.7
|
|
|
|
46.5
|
|
North
America
|
|
|
1.8
|
|
|
|
0.9
|
|
|
|
6.1
|
|
|
|
2.6
|
|
International
|
|
|
9.8
|
|
|
|
10.7
|
|
|
|
37.6
|
|
|
|
43.9
|
|
Gross
margin
|
|
|
63
|
%
|
|
|
62
|
%
|
|
|
62
|
%
|
|
|
61
|
%
|
North
America
|
|
|
63
|
%
|
|
|
63
|
%
|
|
|
62
|
%
|
|
|
62
|
%
|
International
|
|
|
65
|
%
|
|
|
55
|
%
|
|
|
62
|
%
|
|
|
57
|
%
|
DoubleDown
average user statistics [as a single application with
multiple games, active users equal unique users]
|
|
DAU (daily active
users) ('000)
|
|
|
1,816
|
|
|
|
1,705
|
|
|
|
1,785
|
|
|
|
1,636
|
|
MAU (monthly active
users) ('000)
|
|
|
5,717
|
|
|
|
6,720
|
|
|
|
6,027
|
|
|
|
6,141
|
|
Bookings per DAU
($0.00)
|
|
$
|
0.46
|
|
|
$
|
0.40
|
|
|
$
|
0.43
|
|
|
$
|
0.37
|
|
Reconciliations of
GAAP to Non-GAAP Adjusted Financial Measures
(in millions,
except EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
Ended September 30, 2014
|
|
Cost
of
Gaming
Operations
|
|
|
Cost
of
Product
Sales
|
|
|
Cost
of
Interactive
|
|
|
Operating
Expenses
|
|
|
Operating
Income
|
|
|
Net
Earnings
(a)
|
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures
|
|
$
|
80.3
|
|
|
$
|
97.4
|
|
|
$
|
31.7
|
|
|
$
|
203.9
|
|
|
$
|
123.2
|
|
|
$
|
70.9
|
|
|
$
|
0.28
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38
|
%
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.4)
|
|
|
|
2.4
|
|
|
|
1.6
|
|
|
|
0.01
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
(0.1)
|
|
|
|
(2.7)
|
|
|
|
(3.4)
|
|
|
|
6.2
|
|
|
|
4.1
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment -
land
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.1)
|
|
|
|
9.1
|
|
|
|
6.0
|
|
|
|
0.02
|
|
Impairment - Alabama
note
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.0)
|
|
|
|
4.0
|
|
|
|
2.6
|
|
|
|
0.01
|
|
Business realignment
restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.9
|
|
|
|
(0.9)
|
|
|
|
(0.6)
|
|
|
|
-
|
|
Merger-related
costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8.9)
|
|
|
|
8.9
|
|
|
|
5.9
|
|
|
|
0.02
|
|
Legal
accrual
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.1)
|
|
|
|
3.1
|
|
|
|
2.1
|
|
|
|
0.01
|
|
Severance
|
|
|
(0.7)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
0.5
|
|
|
|
-
|
|
Total non-GAAP
adjustments
|
|
|
(0.7)
|
|
|
|
(0.1)
|
|
|
|
(2.7)
|
|
|
|
(30.0)
|
|
|
|
33.5
|
|
|
|
22.2
|
|
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
79.6
|
|
|
$
|
97.3
|
|
|
$
|
29.0
|
|
|
$
|
173.9
|
|
|
$
|
156.7
|
|
|
$
|
93.1
|
|
|
$
|
0.37
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
%
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
(a) Adjustments
tax effected at 34%; (b) Primarily
DoubleDown
|
Fourth Quarter
Ended September 30, 2013
|
|
Cost
of
Gaming
Operations
|
|
|
Cost
of
Product
Sales
|
|
|
Cost
of
Interactive
|
|
|
Operating
Expenses
|
|
|
Operating
Income
|
|
|
Net
Earnings
(a)
|
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures
|
|
$
|
91.6
|
|
|
$
|
156.5
|
|
|
$
|
27.7
|
|
|
$
|
233.1
|
|
|
$
|
123.4
|
|
|
$
|
63.5
|
|
|
$
|
0.24
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15.3)
|
|
|
|
15.3
|
|
|
|
10.0
|
|
|
|
0.03
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.3)
|
|
|
|
(4.4)
|
|
|
|
6.7
|
|
|
|
4.4
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal
Settlement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.4)
|
|
|
|
2.4
|
|
|
|
1.6
|
|
|
|
0.01
|
|
Building
impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.4)
|
|
|
|
0.4
|
|
|
|
0.3
|
|
|
|
-
|
|
Total non-GAAP
adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.3)
|
|
|
|
(22.5)
|
|
|
|
24.8
|
|
|
|
16.3
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
91.6
|
|
|
$
|
156.5
|
|
|
$
|
25.4
|
|
|
$
|
210.6
|
|
|
$
|
148.2
|
|
|
$
|
79.8
|
|
|
$
|
0.30
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
|
%
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
(a) Adjustments
tax effected at 35%; (b) Primarily
DoubleDown
|
Year Ended
September 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
|
|
$
|
847.0
|
|
|
$
|
339.5
|
|
|
$
|
382.1
|
|
|
$
|
121.9
|
|
|
$
|
806.0
|
|
|
$
|
408.6
|
|
|
$
|
247.9
|
|
|
$
|
0.99
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19.6)
|
|
|
|
19.6
|
|
|
|
12.9
|
|
|
|
0.05
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.2)
|
|
|
|
(10.8)
|
|
|
|
(13.6)
|
|
|
|
24.6
|
|
|
|
16.2
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment -
land
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.1)
|
|
|
|
9.1
|
|
|
|
6.0
|
|
|
|
0.02
|
|
Impairment - Alabama
note
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5.3)
|
|
|
|
5.3
|
|
|
|
3.5
|
|
|
|
0.01
|
|
Business realignment
restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15.6)
|
|
|
|
15.6
|
|
|
|
10.3
|
|
|
|
0.05
|
|
Merger-related
costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10.2)
|
|
|
|
10.2
|
|
|
|
6.8
|
|
|
|
0.03
|
|
Legal
accrual
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10.9)
|
|
|
|
10.9
|
|
|
|
7.2
|
|
|
|
0.03
|
|
Severance
|
|
|
-
|
|
|
|
(1.3)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.1)
|
|
|
|
3.4
|
|
|
|
2.3
|
|
|
|
0.01
|
|
Certain discrete tax
items (benefits)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(39.0)
|
|
|
|
(0.16)
|
|
Total non-GAAP
adjustments
|
|
|
-
|
|
|
|
(1.3)
|
|
|
|
(0.2)
|
|
|
|
(10.8)
|
|
|
|
(86.4)
|
|
|
|
98.7
|
|
|
|
26.2
|
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
847.0
|
|
|
$
|
338.2
|
|
|
$
|
381.9
|
|
|
$
|
111.1
|
|
|
$
|
719.6
|
|
|
$
|
507.3
|
|
|
$
|
274.1
|
|
|
$
|
1.09
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35
|
%
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
(a) Adjustments
tax effected at 34%; (b) Primarily
DoubleDown
|
Year Ended
September 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
|
|
$
|
1,085.2
|
|
|
$
|
374.3
|
|
|
$
|
520.2
|
|
|
$
|
102.7
|
|
|
$
|
850.3
|
|
|
$
|
494.1
|
|
|
$
|
272.7
|
|
|
$
|
1.03
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
%
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related charges:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent retention
& earn-out
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(73.9)
|
|
|
|
73.9
|
|
|
|
48.4
|
|
|
|
0.17
|
|
Amortization of
intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.2)
|
|
|
|
(17.7)
|
|
|
|
26.9
|
|
|
|
17.6
|
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proxy Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7.6)
|
|
|
|
7.6
|
|
|
|
4.9
|
|
|
|
0.02
|
|
Legal
settlement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.4)
|
|
|
|
2.4
|
|
|
|
1.6
|
|
|
|
0.01
|
|
Impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.6)
|
|
|
|
3.6
|
|
|
|
2.4
|
|
|
|
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)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.2)
|
|
|
|
(105.2)
|
|
|
|
109.4
|
|
|
|
64.0
|
|
|
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
$
|
1,080.2
|
|
|
$
|
374.3
|
|
|
$
|
520.2
|
|
|
$
|
93.5
|
|
|
$
|
745.1
|
|
|
$
|
603.5
|
|
|
$
|
336.7
|
|
|
$
|
1.27
|
|
% of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
%
|
|
|
26
|
%
|
|
|
|
|
|
|
|
|
(a) Adjustments
tax effected at 35%, except no tax effect on royalty settlement;
(b) Primarily DoubleDown
|
|
|
Fourth
Quarters
|
|
|
Years
|
|
Adjusted EBITDA
For The Periods Ended September 30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
|
$
|
70.9
|
|
|
$
|
63.5
|
|
|
$
|
247.9
|
|
|
$
|
272.7
|
|
Other (income)
expense, net
|
|
|
13.9
|
|
|
|
23.9
|
|
|
|
87.3
|
|
|
|
91.8
|
|
Income tax
provision
|
|
|
38.4
|
|
|
|
36.0
|
|
|
|
73.4
|
|
|
|
129.6
|
|
Depreciation and
amortization
|
|
|
43.8
|
|
|
|
56.0
|
|
|
|
189.0
|
|
|
|
231.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
9.1
|
|
|
|
10.7
|
|
|
|
32.1
|
|
|
|
39.4
|
|
Contingent
acquisition-related costs
|
|
|
2.4
|
|
|
|
15.3
|
|
|
|
19.6
|
|
|
|
73.9
|
|
Impairment,
restructuring, and merger related costs
|
|
|
21.1
|
|
|
|
0.4
|
|
|
|
40.2
|
|
|
|
3.6
|
|
Adjusted
EBITDA
|
|
$
|
199.6
|
|
|
$
|
205.8
|
|
|
$
|
689.5
|
|
|
$
|
842.6
|
|
Free Cash Flow For
The Years Ended September 30,
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
GAAP net operating
cash flows
|
|
$
|
199.2
|
|
|
$
|
462.6
|
|
Investment in
property, plant and equipment
|
|
|
(23.7)
|
|
|
|
(21.9)
|
|
Investment in gaming
operations equipment
|
|
|
(61.8)
|
|
|
|
(105.5)
|
|
Investment in
intellectual property
|
|
|
(2.8)
|
|
|
|
(0.4)
|
|
Free Cash Flow
(before dividends)
|
|
|
110.9
|
|
|
|
334.8
|
|
Dividends
paid
|
|
|
(107.7)
|
|
|
|
(79.0)
|
|
Free Cash Flow
(after dividends)
|
|
$
|
3.2
|
|
|
$
|
255.8
|
|
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