LAS VEGAS, Nov. 7, 2013 /PRNewswire/ --
Fiscal 2013 Highlights (compared to last year)
- Total revenues increased 9% to $2.34
billion
- Social gaming revenues increased 151% to $219 million and average bookings per daily
active user grew 42% to $0.37
- Adjusted earnings per share from continuing operations
increased 22% to $1.27
- GAAP earnings per share from continuing operations increased
20% to $1.03
- Shipped 32,900 North America
replacement units, up 50%
- Returned $270 million to
shareholders in the form of share repurchases and dividends
Fourth Quarter Highlights (compared to last year's fourth
quarter)
- Total revenues increased to $632
million
- Social gaming revenues increased 72% to $61 million and average bookings per daily active
user grew 43% to $0.40
- Shipped 11,500 North America
replacement units, up 35%
Announcement of $200 million
Accelerated Share Repurchase Transaction
- IGT announces that it intends to enter into a $200 million accelerated share repurchase
agreement, further demonstrating its continued commitment to
shareholder returns
International Game Technology (NYSE: IGT) today reported
operating results for the fourth quarter and fiscal year ended
September 30, 2013.
(Logo:
http://photos.prnewswire.com/prnh/20131003/LA91408LOGO)
"We are extremely pleased to report our fiscal year 2013
financial results," said Patti Hart,
CEO of IGT. "We continue to drive significant revenue and earnings
per share growth through the successful execution of our strategy
and disciplined approach to capital allocation. Our goal, as
always, is to maximize our returns to shareholders through targeted
share repurchases, consistent dividends and robust earnings
growth."
|
Consolidated
Results
|
|
|
Periods Ended
September 30,
|
|
Fourth
Quarters
|
|
|
Years
|
|
2013
|
2012
|
%
Change
|
|
|
2013
|
2012
|
%
Change
|
|
($ in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
GAAP
Measures
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 632.3
|
$ 631.1
|
0%
|
|
|
$ 2,341.6
|
$ 2,150.7
|
9%
|
|
Operating
income
|
123.4
|
108.3
|
14%
|
|
|
494.1
|
421.7
|
17%
|
|
Income from
continuing operations
|
63.5
|
90.1
|
-30%
|
|
|
272.7
|
249.7
|
9%
|
|
Earnings per share
from continuing operations
|
$0.24
|
$0.33
|
-27%
|
|
|
$1.03
|
$0.86
|
20%
|
|
Net operating cash
flows
|
|
|
|
|
|
$
462.6
|
$
446.5
|
4%
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Measures
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
$ 148.2
|
$ 188.6
|
-21%
|
|
|
$
603.5
|
$
563.8
|
7%
|
|
Adjusted income from
continuing operations
|
79.8
|
101.9
|
-22%
|
|
|
336.7
|
301.1
|
12%
|
|
Adjusted earnings per
share from continuing operations
|
$0.30
|
$0.38
|
-21%
|
|
|
$1.27
|
$1.04
|
22%
|
|
Free cash
flow
|
|
|
|
|
|
$
334.8
|
$
237.8
|
41%
|
|
|
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.
|
- Fiscal 2013 revenues increased 9% to $2.34 billion, primarily driven by North America growth in social gaming and
machine sales.
- For fiscal 2013, North America
revenue increased 12% to $1.84
billion and international revenue was flat at $507 million.
- Fiscal 2013 adjusted earnings per share from continuing
operations increased 22% to $1.27.
- Free cash flow increased 41% to $335
million largely due to lower capital expenditures in gaming
operations.
|
Gaming
Operations
|
|
|
Periods Ended
September 30,
|
|
Fourth
Quarters
|
|
|
Years
|
|
2013
|
2012
|
%
Change
|
|
|
2013
|
2012
|
%
Change
|
|
($ in millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 247.1
|
$ 263.8
|
-6%
|
|
|
$
991.4
|
$ 1,040.0
|
-5%
|
|
Gross
profit
|
155.5
|
161.7
|
-4%
|
|
|
617.1
|
634.3
|
-3%
|
|
Gross
margin
|
63%
|
61%
|
3%
|
|
|
62%
|
61%
|
2%
|
|
Installed base
('000)
|
54.6
|
57.1
|
-4%
|
|
|
54.6
|
57.1
|
-4%
|
|
Yield (average
revenue per unit per day - $0.00)
|
$48.78
|
$50.83
|
-4%
|
|
|
$48.74
|
$51.49
|
-5%
|
- Revenues decreased 6% to $247
million in the fourth quarter primarily due to lower North
America MegaJackpots® revenue.
- Gross margin increased to 63% from 61% compared to the prior
year quarter, primarily due to lower jackpot expenses and
depreciation.
- Installed base decreased primarily driven by a decline in North
America MegaJackpots® units.
- Average revenue per unit per day in the quarter was
$48.78, down 4% over the prior year
quarter primarily due to lower MegaJackpots® yields and up 2%
sequentially reflecting positive international trends.
|
Product
Sales
|
|
|
Periods Ended
September 30,
|
|
Fourth
Quarters
|
|
|
Years
|
|
2013
|
2012
|
%
Change
|
|
|
2013
|
2012
|
%
Change
|
|
($ in millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
312.2
|
$
313.4
|
0%
|
|
|
$ 1,085.2
|
$
966.8
|
12%
|
|
Gross
profit
|
155.7
|
174.3
|
-11%
|
|
|
565.0
|
522.3
|
8%
|
|
Gross
margin
|
50%
|
56%
|
-10%
|
|
|
52%
|
54%
|
-4%
|
|
Machine units
recognized ('000)
|
18.8
|
14.5
|
30%
|
|
|
57.2
|
43.6
|
31%
|
|
Machine average sales
price ('000)
|
$
11.6
|
$
15.0
|
-23%
|
|
|
$
13.2
|
$
15.0
|
-12%
|
- Revenues were relatively flat for the quarter, and up 12% to
$1.09 billion for the year primarily
due to increased North America
machine sales largely related to Canadian VLT sales and higher
systems installations.
- Gross margin decreased to 50% from 56% while average machine
sales prices declined to $11,600 in
the fourth quarter, due to targeted promotional activity and
product mix.
|
Interactive
|
|
|
Periods Ended
September 30,
|
|
Fourth
Quarters
|
|
|
Years
|
|
2013
|
2012
|
%
Change
|
|
|
2013
|
2012
|
%
Change
|
|
($ in millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
73.0
|
$
53.9
|
35%
|
|
|
$ 265.0
|
$ 143.9
|
84%
|
|
Social gaming
|
61.4
|
35.8
|
72%
|
|
|
218.5
|
87.0
|
151%
|
|
IGTi
|
11.6
|
18.1
|
-36%
|
|
|
46.5
|
56.9
|
-18%
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
62%
|
62%
|
0%
|
|
|
61%
|
56%
|
9%
|
|
Social gaming
|
63%
|
61%
|
3%
|
|
|
62%
|
61%
|
2%
|
|
IGTi
|
57%
|
65%
|
-12%
|
|
|
58%
|
49%
|
18%
|
|
|
|
|
|
|
|
|
|
|
DoubleDown average
user statistics*
|
|
|
|
|
|
|
|
|
|
DAU (Daily active users) ('000)
|
1,705
|
1,415
|
20%
|
|
|
1,636
|
1,372
|
19%
|
|
MAU (Monthly active users) ('000)
|
6,720
|
5,072
|
32%
|
|
|
6,141
|
5,097
|
20%
|
|
Bookings per DAU ($0.00)
|
$
0.40
|
$
0.28
|
43%
|
|
|
$
0.37
|
$
0.26
|
42%
|
|
*as a single
application with multiple games, active users equal unique
users
|
- Social gaming revenues increased 72% to $61 million in the fourth quarter compared to the
prior year quarter, primarily driven by an increase in both average
DAU and bookings per DAU.
- Average DAU were 1.7 million, an increase of 20% over the prior
year quarter.
- Average MAU were 6.7 million, an increase of 32% compared to
the prior year quarter.
- Average bookings per DAU was $0.40, an increase of 43% over the same quarter
last year.
|
Operating
Expenses
|
|
|
Periods Ended
September 30,
|
|
Fourth
Quarters
|
|
|
Years
|
|
2013
|
2012
|
%
Change
|
|
|
2013
|
2012
|
%
Change
|
|
($ in millions,
unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
Selling, general
& administrative
|
$ 135.3
|
$ 106.7
|
27%
|
|
|
$ 460.4
|
$ 410.4
|
12%
|
|
Research &
development
|
62.7
|
59.6
|
5%
|
|
|
235.0
|
217.0
|
8%
|
|
Depreciation &
amortization
|
19.4
|
21.1
|
-8%
|
|
|
77.4
|
76.9
|
1%
|
|
Contingent
acquisition-related costs
|
15.3
|
31.3
|
-51%
|
|
|
73.9
|
69.1
|
7%
|
|
Impairment and
restructuring
|
0.4
|
42.5
|
*
|
|
|
3.6
|
42.5
|
*
|
|
Total operating
expenses
|
$
233.1
|
$
261.2
|
-11%
|
|
|
$
850.3
|
$
815.9
|
4%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Expenses
|
|
|
|
|
|
|
|
|
|
Total
|
$
210.6
|
$
182.7
|
15%
|
|
|
$
745.1
|
$
679.6
|
10%
|
|
|
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 over the prior year
quarter primarily due to decreases in impairment and
acquisition-related charges, partially offset by increases in
SG&A and R&D.
- SG&A increased over the prior year quarter primarily due to
increased advertising expenses in correlation with growing social
gaming revenues, the shift in timing of G2E 2013, and additional
head count. Higher professional fees, bad debt provisions, and a
legal settlement also contributed to the increase.
- Fiscal year operating expenses improved to 36% of revenues
compared to 38% in the prior year.
|
Balance Sheet and
Capital Deployment
|
|
|
September
30,
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
|
($ in millions,
unless otherwise noted)
|
|
|
|
|
|
|
Cash and equivalents
(including restricted amounts)
|
$
809.1
|
|
$
288.2
|
|
181%
|
|
Working
capital
|
267.5
|
|
633.0
|
|
-58%
|
|
Contractual debt
obligations
|
2,150.0
|
|
1,790.0
|
|
20%
|
- Cash and contractual debt obligations both increased during the
quarter driven by the issuance of $500
million, 5.35% bonds due 2023. The company intends to use
the net proceeds to redeem a portion of its convertible notes due
May 2014 and for general corporate
purposes.
- Working capital decreased primarily due to the reclassification
of our convertible notes due May 2014
from non-current to current liabilities, partially offset by
increased cash from the new long-term debt issuance.
- During the quarter, the company announced its fourth
consecutive quarterly cash dividend increase, up 67% compared to
the same quarter last year.
- During fiscal 2013, the company returned $270 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
Based on current expectations, the company is
providing its initial fiscal year 2014 guidance for adjusted
earnings from continuing operations of $1.28
to $1.38 per share.
GAAP earnings per share from continuing operations for fiscal
year 2014 will include acquisition-related expenses, primarily
related to DoubleDown, 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
As previously announced on
October 29, 2013, IGT will host a
conference call to discuss its fourth quarter and fiscal year 2013
earnings results on Thursday, November 7,
2013, at 10:30 a.m. PST (or
1:30 p.m. EST). The access numbers
are as follows:
Domestic callers dial +1 877-891-6979, passcode IGT
International callers dial +1 773-756-4700, 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, November 21, 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, November 21, 2013. The access
numbers are as follows:
Domestic callers dial +1 800-841-8615
International callers dial +1 203-369-3833
Q4 FY 2013 Excel file
Q4 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 2014), our strategic and operational
plans, and repurchases of our common stock under the proposed
accelerated stock repurchase transaction. 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 June
30, 2013 filed with the SEC on August
2, 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 Annual Report on Form 10-K for our 2013 fiscal
year, which we expect to file with the SEC in the fourth quarter of
calendar 2013. All information provided in this release is as
of November 7, 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
September 30,
|
|
|
Fourth
Quarters
|
|
Years
|
|
|
2013
|
2012
|
|
2013
|
2012
|
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Gaming
operations
|
|
$ 247.1
|
$ 263.8
|
|
$
991.4
|
$1,040.0
|
|
Product
sales
|
|
312.2
|
313.4
|
|
1,085.2
|
966.8
|
|
Interactive
|
|
73.0
|
53.9
|
|
265.0
|
143.9
|
|
Total
revenues
|
|
632.3
|
631.1
|
|
2,341.6
|
2,150.7
|
|
Costs and
operating expenses
|
|
|
|
|
|
|
|
Cost of
gaming operations
|
|
91.6
|
102.1
|
|
374.3
|
405.7
|
|
Cost of
product sales
|
|
156.5
|
139.1
|
|
520.2
|
444.5
|
|
Cost of
interactive
|
|
27.7
|
20.4
|
|
102.7
|
62.9
|
|
Selling,
general and administrative
|
|
135.3
|
106.7
|
|
460.4
|
410.4
|
|
Research
and development
|
|
62.7
|
59.6
|
|
235.0
|
217.0
|
|
Depreciation and amortization
|
|
19.4
|
21.1
|
|
77.4
|
76.9
|
|
Contingent acquisition-related costs
|
|
15.3
|
31.3
|
|
73.9
|
69.1
|
|
Impairment
|
|
0.4
|
42.5
|
|
3.6
|
42.5
|
|
Total costs and
operating expenses
|
|
508.9
|
522.8
|
|
1,847.5
|
1,729.0
|
|
Operating
income
|
|
123.4
|
108.3
|
|
494.1
|
421.7
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest
income
|
|
10.4
|
11.4
|
|
44.4
|
45.3
|
|
Interest
expense
|
|
(31.0)
|
(31.3)
|
|
(123.4)
|
(122.2)
|
|
Other
|
|
(3.3)
|
4.3
|
|
(12.8)
|
(2.0)
|
|
Total other income
(expense)
|
|
(23.9)
|
(15.6)
|
|
(91.8)
|
(78.9)
|
|
Income from
continuing operations before tax
|
|
99.5
|
92.7
|
|
402.3
|
342.8
|
|
Income
tax provision
|
|
36.0
|
2.6
|
|
129.6
|
93.1
|
|
Income from
continuing operations
|
|
63.5
|
90.1
|
|
272.7
|
249.7
|
|
Loss
from discontinued operations, net of tax
|
|
-
|
(2.0)
|
|
-
|
(3.8)
|
|
Net
income
|
|
$ 63.5
|
$ 88.1
|
|
$ 272.7
|
$ 245.9
|
|
Basic earnings
(loss) per share
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
0.24
|
$
0.34
|
|
$
1.04
|
$
0.86
|
|
Discontinued operations
|
|
-
|
(0.01)
|
|
-
|
(0.01)
|
|
Net
income
|
|
$
0.24
|
$
0.33
|
|
$
1.04
|
$
0.85
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
0.24
|
$
0.33
|
|
$
1.03
|
$
0.86
|
|
Discontinued operations
|
|
-
|
-
|
|
-
|
(0.01)
|
|
Net
income
|
|
$
0.24
|
$
0.33
|
|
$
1.03
|
$
0.85
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
260.4
|
268.5
|
|
262.6
|
288.8
|
|
Diluted
|
|
264.7
|
270.0
|
|
265.2
|
290.4
|
|
CONSOLIDATED
BALANCE SHEET (Unaudited and Condensed)
|
|
|
September
30,
|
|
2013
|
|
2012
|
|
(In
millions)
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and
equivalents
|
$
713.3
|
|
$
206.3
|
|
Investment
securities
|
28.8
|
|
-
|
|
Restricted cash and
investments
|
67.0
|
|
81.9
|
|
Jackpot annuity
investments
|
56.5
|
|
60.2
|
|
Receivables,
net
|
577.9
|
|
564.8
|
|
Inventories
|
90.1
|
|
92.9
|
|
Other assets and
deferred costs
|
242.4
|
|
257.2
|
|
Total current
assets
|
1,776.0
|
|
1,263.3
|
|
Property, plant and equipment, net
|
483.9
|
|
555.7
|
|
Jackpot
annuity investments
|
268.6
|
|
295.7
|
|
Contracts and notes receivable, net
|
165.6
|
|
139.3
|
|
Goodwill
and other intangibles, net
|
1,601.7
|
|
1,663.1
|
|
Other
assets and deferred costs
|
317.0
|
|
368.0
|
|
Total
Assets
|
$
4,612.8
|
|
$
4,285.1
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Short-term
debt
|
$
826.6
|
|
$
-
|
|
Accounts
payable
|
110.0
|
|
87.5
|
|
Jackpot liabilities,
current portion
|
131.7
|
|
152.4
|
|
Dividends
payable
|
25.9
|
|
16.0
|
|
Other accrued
liabilities
|
414.3
|
|
374.4
|
|
Total current
liabilities
|
1,508.5
|
|
630.3
|
|
Long-term debt
|
1,366.3
|
|
1,846.4
|
|
Jackpot
liabilities
|
293.3
|
|
328.6
|
|
Other
liabilities
|
190.6
|
|
282.0
|
|
Total
Liabilities
|
3,358.7
|
|
3,087.3
|
|
Total
Equity
|
1,254.1
|
|
1,197.8
|
|
Total
Liabilities and Shareholders' Equity
|
$
4,612.8
|
|
$
4,285.1
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOW (Unaudited and Condensed)
|
|
|
Years
Ended
|
|
September
30,
|
|
2013
|
|
2012
|
|
(In
millions)
|
|
|
|
|
Operating
|
|
|
|
|
Net
income
|
$ 272.7
|
|
$ 245.9
|
|
Adjustments:
|
|
|
|
|
Depreciation and amortization
|
231.6
|
|
240.3
|
|
Acquisition-related contingent earn-out
costs
|
35.0
|
|
27.5
|
|
Other non-cash items
|
95.3
|
|
98.1
|
|
Changes in operating assets and liabilities, excluding
acquisitions:
|
|
|
|
|
Receivables
|
(93.1)
|
|
(101.1)
|
|
Inventories
|
14.2
|
|
(11.7)
|
|
Accounts payable and accrued
liabilities
|
(33.6)
|
|
53.8
|
|
Jackpot liabilities
|
(73.6)
|
|
(47.5)
|
|
Income taxes, net of employee stock
plans
|
(27.1)
|
|
(40.8)
|
|
Other assets and deferred
costs
|
28.6
|
|
(18.0)
|
|
Settlement of
treasury lock contracts
|
12.6
|
|
-
|
|
Net operating cash
flows
|
462.6
|
|
446.5
|
|
Investing
|
|
|
|
|
Capital
expenditures
|
(127.8)
|
|
(208.7)
|
|
Investment securities, net
|
(28.8)
|
|
-
|
|
Jackpot
annuity investments, net
|
48.6
|
|
51.8
|
|
Changes
in restricted cash
|
14.9
|
|
10.7
|
|
Loans
receivable, net
|
32.4
|
|
29.0
|
|
Business
acquisitions, net of cash acquired
|
-
|
|
(233.9)
|
|
Other
|
24.6
|
|
42.3
|
|
Net investing cash
flows
|
(36.1)
|
|
(308.8)
|
|
Financing
|
|
|
|
|
Debt-related proceeds (payments), net
|
351.4
|
|
140.0
|
|
Employee
stock plan proceeds
|
30.0
|
|
15.7
|
|
Share
repurchases
|
(190.5)
|
|
(475.2)
|
|
Noncontrolling interest acquired
|
-
|
|
(2.5)
|
|
Dividends paid
|
(79.0)
|
|
(70.6)
|
|
Acquisition-related contingent consideration
|
(27.9)
|
|
-
|
|
Net financing cash
flows
|
84.0
|
|
(392.6)
|
|
Foreign exchange
rates effect on cash
|
(3.5)
|
|
1.2
|
|
Net change in cash
and equivalents
|
507.0
|
|
(253.7)
|
|
Beginning cash and
equivalents
|
206.3
|
|
460.0
|
|
Ending cash and
equivalents
|
$
713.3
|
|
$
206.3
|
|
SUPPLEMENTAL DATA
(Unaudited)
|
|
|
Periods Ended
September 30,
|
|
Revenue
Metrics
|
Fourth
Quarters
|
|
Years
|
|
2013
|
2012
|
|
2013
|
2012
|
|
In millions,
unless otherwise noted
|
|
|
|
|
|
|
Gaming
Operations
|
|
|
|
|
|
|
Revenues
|
$
247.1
|
$
263.8
|
|
$
991.4
|
$
1,040.0
|
|
North
America
|
211.2
|
229.6
|
|
854.2
|
907.8
|
|
International
|
35.9
|
34.2
|
|
137.2
|
132.2
|
|
Gross
margin
|
63%
|
61%
|
|
62%
|
61%
|
|
North
America
|
62%
|
60%
|
|
61%
|
60%
|
|
International
|
69%
|
71%
|
|
69%
|
70%
|
|
Installed base
(units '000)
|
54.6
|
57.1
|
|
54.6
|
57.1
|
|
North
America
|
41.4
|
43.4
|
|
41.4
|
43.4
|
|
International
|
13.2
|
13.7
|
|
13.2
|
13.7
|
|
Yield (average
revenue per unit per day - $0.00)
|
$48.78
|
$50.83
|
|
$48.74
|
$51.49
|
|
Product
Sales
|
|
|
|
|
|
|
Revenues
|
$
312.2
|
$
313.4
|
|
$
1,085.2
|
$
966.8
|
|
North
America
|
215.6
|
224.2
|
|
759.8
|
648.2
|
|
International
|
96.6
|
89.2
|
|
325.4
|
318.6
|
|
Machines
|
$
217.7
|
$
217.5
|
|
$
755.5
|
$
653.5
|
|
North
America
|
145.3
|
152.9
|
|
519.4
|
421.3
|
|
International
|
72.4
|
64.6
|
|
236.1
|
232.2
|
|
Non-machine
|
$
94.5
|
$
95.9
|
|
$
329.7
|
$
313.3
|
|
North
America
|
70.3
|
71.3
|
|
240.4
|
226.9
|
|
International
|
24.2
|
24.6
|
|
89.3
|
86.4
|
|
Gross
margin
|
50%
|
56%
|
|
52%
|
54%
|
|
North
America
|
51%
|
58%
|
|
54%
|
57%
|
|
International
|
48%
|
49%
|
|
48%
|
49%
|
|
Machine units
recognized ('000)
|
18.8
|
14.5
|
|
57.2
|
43.6
|
|
North
America
|
13.9
|
10.4
|
|
42.2
|
29.1
|
|
International
|
4.9
|
4.1
|
|
15.0
|
14.5
|
|
Machine units
shipped ('000) [includes units where revenues
deferred]
|
18.4
|
14.6
|
|
55.6
|
44.2
|
|
North
America
|
13.4
|
10.4
|
|
41.7
|
29.3
|
|
New
|
1.9
|
1.9
|
|
8.8
|
7.3
|
|
Replacement
|
11.5
|
8.5
|
|
32.9
|
22.0
|
|
International
|
5.0
|
4.2
|
|
13.9
|
14.9
|
|
New
|
2.1
|
1.2
|
|
4.8
|
5.6
|
|
Replacement
|
2.9
|
3.0
|
|
9.1
|
9.3
|
|
Machine ASP
('000)
|
$
11.6
|
$
15.0
|
|
$
13.2
|
$
15.0
|
|
North
America
|
10.5
|
14.7
|
|
12.3
|
14.5
|
|
International
|
15.0
|
15.8
|
|
15.8
|
16.0
|
|
Interactive
|
|
|
|
|
|
|
Revenues
|
$
73.0
|
$
53.9
|
|
$
265.0
|
$
143.9
|
|
North
America
|
62.3
|
36.1
|
|
221.1
|
88.1
|
|
International
|
10.7
|
17.8
|
|
43.9
|
55.8
|
|
Social Gaming
|
61.4
|
35.8
|
|
218.5
|
87.0
|
|
North
America
|
61.4
|
35.8
|
|
218.5
|
87.0
|
|
International
|
-
|
-
|
|
-
|
-
|
|
IGTi
|
11.6
|
18.1
|
|
46.5
|
56.9
|
|
North
America
|
0.9
|
0.3
|
|
2.6
|
1.1
|
|
International
|
10.7
|
17.8
|
|
43.9
|
55.8
|
|
Gross
margin
|
62%
|
62%
|
|
61%
|
56%
|
|
North
America
|
63%
|
61%
|
|
62%
|
61%
|
|
International
|
55%
|
64%
|
|
57%
|
49%
|
|
DoubleDown
average user statistics*
|
|
|
|
|
|
|
DAU
(Daily active users) ('000)
|
1,705
|
1,415
|
|
1,636
|
1,372
|
|
MAU
(Monthly active users) ('000)
|
6,720
|
5,072
|
|
6,141
|
5,097
|
|
Bookings per DAU ($0.00)
|
$0.40
|
$0.28
|
|
$0.37
|
$0.26
|
|
*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)
|
|
|
Fourth Quarter
Ended September 30, 2013
|
|
|
|
|
|
Continuing
Operations
|
|
Product
Sales
Revenue
|
Cost of
Interactive
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
GAAP
measures
|
$
312.2
|
$
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
|
|
Impairment
|
-
|
-
|
(0.4)
|
0.4
|
0.3
|
-
|
|
Certain
discrete tax items (benefits)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total non-GAAP
adjustments
|
-
|
(2.3)
|
(22.5)
|
24.8
|
16.3
|
0.06
|
|
|
|
|
|
|
|
|
Adjusted
measures
|
$
312.2
|
$
25.4
|
$
210.6
|
$
148.2
|
$
79.8
|
$0.30
|
|
%
of revenue
|
|
|
33%
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
September 30, 2013
|
|
|
|
|
|
Continuing
Operations
|
|
Product
Sales
Revenue
|
Cost of
Interactive
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
GAAP
measures
|
$
1,085.2
|
$
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
|
$
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
related to DoubleDown
|
|
Fourth Quarter
Ended September 30, 2012
|
|
|
|
|
Continuing
Operations
|
|
Cost of
Interactive
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
GAAP
measures
|
$
20.4
|
$
261.2
|
$
108.3
|
$
90.1
|
$0.33
|
|
%
of revenue
|
|
41%
|
17%
|
|
|
|
Acquisition-related charges: (b)
|
|
|
|
|
|
|
Contingent retention & earn-out
|
-
|
(31.3)
|
31.3
|
19.9
|
0.07
|
|
Amortization of intangibles
|
(1.8)
|
(4.7)
|
6.5
|
4.1
|
0.02
|
|
Impairment and restructuring
|
-
|
(42.5)
|
42.5
|
(12.2)
|
(0.04)
|
|
Total
non-GAAP adjustments
|
(1.8)
|
(78.5)
|
80.3
|
11.8
|
0.05
|
|
|
|
|
|
|
|
Adjusted
measures
|
$
18.6
|
$
182.7
|
$
188.6
|
$
101.9
|
$0.38
|
|
%
of revenue
|
|
29%
|
30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
September 30, 2012
|
|
|
|
|
Continuing
Operations
|
|
Cost of
Interactive
|
Operating
Expenses
|
Operating
Income
|
Net
Earnings (a)
|
Diluted
EPS
|
|
|
|
|
|
|
|
GAAP
measures
|
$
62.9
|
$
815.9
|
$
421.7
|
$
249.7
|
$0.86
|
|
%
of revenue
|
|
38%
|
20%
|
|
|
|
Acquisition-related charges: (b)
|
|
|
|
|
|
|
Contingent retention & earn-out
|
-
|
(69.1)
|
69.1
|
44.1
|
0.15
|
|
Amortization of intangibles
|
(5.8)
|
(13.3)
|
19.1
|
12.2
|
0.04
|
|
Professional fees
|
-
|
(5.8)
|
5.8
|
3.7
|
0.01
|
|
Impairment and restructuring
|
-
|
(42.5)
|
42.5
|
(12.2)
|
(0.04)
|
|
Distributor settlement
|
-
|
(3.1)
|
3.1
|
2.0
|
0.01
|
|
Severance
|
-
|
(2.5)
|
2.5
|
1.6
|
0.01
|
|
Total
non-GAAP adjustments
|
(5.8)
|
(136.3)
|
142.1
|
51.4
|
0.18
|
|
|
|
|
|
|
|
Adjusted
measures
|
$
57.1
|
$
679.6
|
$
563.8
|
$
301.1
|
$1.04
|
|
%
of revenue
|
|
32%
|
26%
|
|
|
|
|
(a) Adjustments
tax effected at 37%, except impairment included $44.7 million of
tax benefit related to Entraction closures
|
|
(b) Primarily
related to DoubleDown
|
|
Adjusted Diluted
EPS For The Years Ended September 30,
|
2013
|
2012
|
2011
|
2010
|
2009
|
|
|
|
|
|
|
|
GAAP Diluted EPS
from Continuing Operations
|
$1.03
|
$0.86
|
$0.97
|
$0.73
|
$0.50
|
|
Acquisition-related charges (a)
|
0.24
|
0.20
|
-
|
-
|
-
|
|
Impairment and restructuring
|
0.01
|
(0.04)
|
0.03
|
0.15
|
0.24
|
|
Proxy
fees
|
0.02
|
-
|
-
|
-
|
-
|
|
Legal
settlement
|
0.01
|
-
|
-
|
-
|
-
|
|
IP Usage
settlements
|
(0.02)
|
-
|
0.01
|
-
|
-
|
|
Severance
|
-
|
0.01
|
-
|
-
|
-
|
|
Distributor settlement
|
-
|
0.01
|
-
|
-
|
-
|
|
Investment (gain) loss
|
-
|
-
|
(0.01)
|
0.07
|
0.05
|
|
Debt
refinancing charges
|
-
|
-
|
-
|
0.01
|
0.01
|
|
Certain
discrete tax items (benefits)
|
(0.02)
|
-
|
(0.07)
|
(0.12)
|
(0.06)
|
|
Total
non-GAAP adjustments
|
0.24
|
0.18
|
(0.04)
|
0.11
|
0.24
|
|
|
|
|
|
|
|
Adjusted Diluted
EPS from Continuing Operations
|
$ 1.27
|
$ 1.04
|
$ 0.93
|
$ 0.84
|
$ 0.74
|
|
(a)
Primarily related to DoubleDown
|
|
Adjusted EBITDA
For The Periods Ended September 30,
|
|
Fourth
Quarters
|
|
Years
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
GAAP Income from
continuing operations
|
$
63.5
|
|
$
90.1
|
|
$
272.7
|
|
$
249.7
|
|
Other
(income) expense, net
|
23.9
|
|
15.6
|
|
91.8
|
|
78.9
|
|
Income
tax provision
|
36.0
|
|
2.6
|
|
129.6
|
|
93.1
|
|
Depreciation and amortization
|
56.0
|
|
61.0
|
|
231.6
|
|
240.3
|
|
Other
charges:
|
|
|
|
|
|
|
|
|
Share-based compensation
|
10.7
|
|
7.8
|
|
39.4
|
|
33.2
|
|
Contingent acquisition-related costs
|
15.3
|
|
31.3
|
|
73.9
|
|
69.1
|
|
Impairment
|
0.4
|
|
42.5
|
|
3.6
|
|
42.5
|
|
Adjusted
EBITDA
|
$
205.8
|
|
$
250.9
|
|
$
842.6
|
|
$
806.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow For
The Years Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
GAAP net operating
cash flows
|
|
|
|
|
$
462.6
|
|
$
446.5
|
|
Investment in property, plant and equipment
|
|
|
|
|
(21.9)
|
|
(43.8)
|
|
Investment in gaming operations equipment
|
|
|
|
|
(105.5)
|
|
(162.4)
|
|
Investment in intellectual property
|
|
|
|
|
(0.4)
|
|
(2.5)
|
|
Free Cash Flow
(before dividends)
|
|
|
|
|
334.8
|
|
237.8
|
|
Dividends paid
|
|
|
|
|
(79.0)
|
|
(70.6)
|
|
Free Cash Flow
(after dividends)
|
|
|
|
|
$
255.8
|
|
$
167.2
|
|
|
|
|
|
|
|
|
|
|
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 IGT