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In preparation for IGT's F2Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.

FQ2 CONSENSUS ESTIMATES

  • Total revenues $499 million
  • EBITDA $167 million
  • EPS $0.19/share

GUIDANCE

  • 2014 FY EPS Guidance:  $1.00-$1.10
  • FQ2 EPS Guidance: $0.17-0.19

COMMENTARY

Demand Environment

  • Declines have been greater than anticipated. Certainly weather has contributed to that, but likely not weather alone.
  • Seeing some signs in March that make us feel a bit better about the business.

Argentina

  • Had assumed in 2014 that the restrictions would not improve.
  • In fact, the importation situation has tightened in Argentina
  • See a fraction of those units shipping into Argentina in 2014.

Cost Cuts

  • $30MM cost reduction in 2014 ($50MM annualized)

Powerbucks

  • Nevada, New Jersey, South Dakota and Canada opportunities

DoubleDowns

  • Growing 20%

Systems

  • Will experience the same sort of growth (as DoubleDowns) 

Replacement Cycle

  • Coming into the year, replacement units were expected to grow. It looks now like they will not grow.

Product Sales

  • Product sales is probably been disproportionately impacted given the effects now that we see on the market on replacement demand, on international market demand.

Game Ops

  • Increased pressure on MJP (Megajackpots)

Stock Repurchase

  • Concluded the previously announced accelerated share repurchase in January. That actually is an impact in the quarter. But in terms of material repurchase, activity was largely concentrated in the first quarter.
  • IGT will be less aggressive on the buyback front in the short term

2015/2016

  • Expect to deliver earnings growth in both 2015 and 2016 at this point.

FX

  • Facing a bit of a forex headwind.  Three major external currencies outside the euro in South Africa, in Argentina and Australia have all moved against IGT, Argentina obviously very dramatically in the year. There will be a devaluation charge in the quarter associated therewith. IGT expect those to moderate at some level.