PR Newswire
LONDON, March 8, 2018
LONDON, March 8, 2018 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE: IGT) today reported financial results for the fourth quarter and year ended December 31, 2017. Today, at 8:00 a.m. EST, management will host a conference call and webcast to present the fourth quarter and full year 2017 results; access details are provided below.
"We had a strong finish to 2017, amplifying the progress we made throughout the year," said Marco Sala, CEO of IGT. "We delivered outstanding results in our Lottery business and improved our key performance indicators in the Gaming business. These achievements were enhanced by disciplined expense management. Bringing innovative content and technology to market remains the cornerstone of our strategy. Last year, we executed well along this path and established a solid foundation for growth in 2018 and beyond."
"We met all of our financial objectives for the year, including the top end of our EBITDA expectations. Net debt was slightly better than our outlook, despite the early Scratch & Win renewal in the fourth quarter," said Alberto Fornaro, CFO of IGT. "The results for the fourth quarter and full year highlight the diversity and resilience of the IGT franchise."
Summary of Consolidated Fourth Quarter and Full Year 2017 Financial Results
Summary of Consolidated Fourth Quarter 2017 Financial Results | | |||
| Quarter Ended | Change | Constant Currency | |
| 2017 | 2016 | (%) | (%) |
(In $ millions, unless otherwise noted) | | | | |
Revenue | 1,346 | 1,321 | 2% | -2% |
Operating income | 194 | 138 | 41% | 32% |
Net income per diluted share | $0.39 | $1.15 | N/M | |
Net debt | 7,319 | 7,569 | -3% | |
Adjusted EBITDA | 452 | 422 | 7% | 2% |
Adjusted operating income | 268 | 281 | -4% | -9% |
Adjusted net income per diluted share | $0.02 | $0.88 | N/M | |
| | | | |
| Year Ended | Change | Constant | |
| 2017 | 2016 | (%) | (%) |
(In $ millions, unless otherwise noted) | | | | |
Revenue | 4,939 | 5,154 | -4% | -5% |
Operating income | (51) | 660 | - | |
Net income per diluted share | ($5.26) | $1.05 | - | |
Net debt | 7,319 | 7,569 | -3% | |
Adjusted EBITDA | 1,676 | 1,755 | -5% | -6% |
Adjusted operating income | 1,028 | 1,167 | -12% | -13% |
Adjusted net income per diluted share | $0.86 | $2.33 | N/M | |
|
Note: Adjusted EBITDA, adjusted operating income, and adjusted net income per diluted share are non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release. |
Comparability of Results
All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2017 are calculated using the same foreign exchange rates as the corresponding 2016 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company's financial performance. Management believes these non-GAAP financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with U.S. GAAP.
Overview of Consolidated Fourth Quarter Results
Consolidated revenue was $1,346 million compared to $1,321 million in the fourth quarter of 2016. At constant currency and scope (which adjusts for the Italy Lotto upfront payment amortization and the sale of Double Down Interactive LLC ("DoubleDown")), revenue was up 3%.
Adjusted operating income was $268 million compared to $281 million in the prior-year period. Adjusted EBITDA was $452 million compared to $422 million in the fourth quarter of 2016, on strong International performance, Italy sports betting results, and lower operating expenses.
Interest expense was $114 million compared to $116 million in the prior-year period.
Benefit from income taxes rose to $83 million from $5 million in the fourth quarter of 2016. Tax dynamics in the fourth quarter of 2017 primarily reflect the non-cash impacts of recent U.S. tax reform. Additional detail on the tax impacts is provided with the reconciliation tables in this news release.
Net income attributable to IGT was $80 million in the fourth quarter of 2017. On an adjusted basis, net income attributable to IGT was $4 million. The Company reported net income per diluted share of $0.39 and earned $0.02 per diluted share on an adjusted basis, which includes $0.66 of non-cash, net negative tax impacts.
Cash from operations was $686 million in 2017 versus $281 million in 2016. As previously disclosed, gross upfront payments for Italian license fees are now included in Cash Flows from Operating Activities. Capital expenditures were $698 million in 2017 compared to $542 million in the prior year.
Cash and cash equivalents were $1,057 million as of December 31, 2017, compared to $294 million as of December 31, 2016. Net debt was $7,319 million as of December 31, 2017, compared to $7,569 million as of December 31, 2016.
Operating Segment Review
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