International Game cuts debt $500 million in Q4, boasts of cash flow

By Lisa Kerner

Charlotte, N.C., March 17 – International Game Technology plc made “good progress” on improving its debt and leverage profile during the fourth quarter, according to chief financial officer Alberto Fornaro.

Fornaro attributed the reductions in net debt and leverage to the company’s generation of $383 million of free cash flow in 2015. Free cash flow for the latest quarter totaled $205 million.

The CFO made his comments during the company’s fourth-quarter earnings call on Thursday.

At Dec. 31, International Game had cash and cash equivalents of $627 million and net debt of $7.7 billion, while net debt to EBITDA was 4.52 times.

This compares to net debt of $8.2 billion and net debt to EBITDA of 4.81 times at the end of the third quarter, according to the earnings presentation. Cash and cash equivalents totaled $317 million at the end of 2014.

International Game’s current long-term debt includes $4.8 billion of PLC senior notes and an $867 million PLC term loan.

The company expects net debt for 2016 to be between $7.7 billion and $7.9 billion, reflecting Lotto payments.

On Wednesday, the company announced it has entered into a consortium of strategic and financial partners to bid for the Italian Lotto concession. If awarded the Lotto concession, a joint venture company would be established with IGT, through its Lottomatica subsidiary, serving as the operating partner with a 61.5% equity ownership, according to a news release.

Financial highlights

International Game’s fourth-quarter consolidated revenue was up 44% year over year at $1.37 billion. Consolidated revenue was $4.69 billion for the full year, compared to $3.81 billion in 2014.

Reported operating income was $132 million for the quarter, compared to $114 million in the prior-year period. For the full year, reported operating income was $540 million compared to $715 million in 2014.

Net income attributable to International Game was $74 million in the fourth quarter. The company had a net loss of $76 million for 2015.

International Game Technology is a gaming company based in Las Vegas.

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