International Game Technology PLC (IGT) 2007 Q1 法說會逐字稿

Ladies and gentlemen welcome to the Lottomatica's conference call to discuss 2007 first quarter in earnings results. [OPERATOR INSTRUCTIONS]. The meeting will be chaired by Mr. Bruce Turner, CEO of Lottomatica Group, together with Mr. Jaymin Patel, CFO of Lottomatica Group. Mr. Marco Salsa, Managing Director of Lottomatica for the Italian operations and Mr. Stefano Bortoli, CFO of Lottomatica Italy will join the Q&A session. Ms. Simona D'Agostino, Head of Investor Relations will attend the conference call. At the end of the conference call a recording will be available on Lottomatica's website.

Welcome everyone and good evening. Thanks for joining us. This begins our first year as a unified Company. Lottomatica and GTECH have successfully become one. Accordingly we've organized this call to reflect our new structure. Joining me today is Jaymin Patel, Chief Financial Officer for Lottomatica. Also joining us for the question and answer segment are Marco Sala, Managing Director for Italian operations, and Stefano Bortoli, CFO of our Italian operations.

For the sake of clarity, we will refer to Lottomatica when discussing items relating to corporate level performance. Then we will differentiate between our operating entities by referring to them as Italy and GTECH in discussing their performance and individual contributions. I'd like to start off today by giving you my perspective of Lottomatica's performance in the first quarter of 2007 after which we will hear from our CFO, Jaymin Patel, and then we'll take your questions.

As you have already seen in today's press release, Lottomatica's financial performance in the first quarter was good. Trends in the underlying business remain positive and we are pleased with the results. We also have made progress towards achieving our strategic goals which we set out recently in our three year plan. Let's take a closer look at each of these highlights, starting with our financial performance.

Revenue for the quarter was EUR435m, representing a year over year increase of approximately 129%. Revenue included EUR225m of contribution from GTECH and EUR210m contribution from Italy. GTECH revenues were comprised of EUR208m from service revenues and EUR17m associated with various product sales.

Overall Italian Lottery sales experienced continued growth totaling EUR3.8b, up from EUR2.9b in the first quarter of 2006, a 29% total increase. We remain impressed with the continued development of the Italian Instants market, which is a significant contributor to our total growth.

First quarter's operating income was approximately EUR140m, an increase of 49% versus the same period last year. Lottomatica's success in the first quarter can be attributed to a number of factors. I'd like to provide you with an operational overview, paying particular attention to the major drivers in our global business.

GTECH level same store sales growth was stable at approximately 4% with several levels of jackpot activity in the first quarter of 2006. GTECH experienced a continued positive flow of business activity. The Company competed for and won instant ticket vending machine contracts in the states of Missouri and Massachusetts, collectively worth in excess of EUR18m.

Although we made note of it in our previous call, the extension of GTECH'S contract with the New York Lottery, which has a value of approximately EUR147m, was awarded during the first quarter.

This year we will have some significant online lottery contracts up for bid as well. GTECH has submitted a proposal to the United Kingdom Lottery as part of the Camelot Consortium. Proposals have also been submitted in response to Denmark. And we are in discussions concerning opportunities in Russia. As well, we are anticipating RFPs in the coming months for online systems in South Korea, the Netherlands and Argentina.

In the U.S. market GTECH is currently competing for contracts in Kansas, New Mexico and soon to Michigan where RFP responses are due shortly. You should know that in each of these jurisdictions GTECH is the incumbent vendor. Other U.S. jurisdictions which include Ohio, New Jersey, Pennsylvania, South Carolina, West Virginia and South Dakota are expected to issue RFPs in the next few months. Of these states, only New Jersey and Ohio are current GTECH customers. The states of Indiana and Illinois are also expected to issue RFPs if privatization activities do not go forward.

In the Commercial Services segment, GTECH launched an extensive network in Colombia in partnership with Citibank using our [Dia] brand. The network will bring banking services to low and middle income areas of the country. The President of Colombia participated in the launch ceremony and praised our development activities as a great step forward for this country. This is a Lottery overlay solution.

In the Gaming Solutions area we are awaiting the outcome of an RFP in Sweden for video lottery terminals and a video lottery terminal central monitoring system. We anticipate that decision and announcement should be forthcoming soon.

In Italy our market share increased to 88%. This compares to 84% in 2006. Overall lottery sales totaled EUR3.8b versus EUR2.9b in the first quarter of last year. As I noted earlier the Scratch and Win segment continues to perform well with total sales of EUR2.1b compared to EUR900m in the first quarter of last year. That represents impressive growth of over 150%.

In reviewing the performance of the Scratch and Win market, it is important to note that the EUR10 ticket performed well, but not at the expense of the performance of the other lower price point tickets which all experienced healthy growth. From our global experiences in other jurisdictions we believe that as a percentage of total Scratch and Win sales, there is room for continued growth in the top priced ticket segment of the Italian marketplace.

Lotto wagers were stable compared to the previous quarter at EUR1.6b. Comparing sequential quarters is a more indicative comparison than to the first quarter of last year when we experienced an exceptional late numbers trend. An examination of the underlying trend in core numbers provides what we believe is a useful insight into Lotto performance. Excluding late numbers, core wagers increased approximately 3.5% year over year.

We are also making good progress towards the launch of our new Italian Sports Betting network which is on track for launch in the third quarter. Of the over 1,600 retailer licenses we received, contracts for specific locations have been signed with approximately 1,200 retailers.

Commercial Service offerings in Italy continued to perform well, experiencing 14% increase over the comparable period in 2006. Growth was driven by increases in mobile top ups and stamp duties. While we are pleased with this performance, I should point out that regulatory changes will likely have a negative impact on performance in this segment for the remainder of this year.

And in Gaming Solutions segment we saw a healthy increase in wagers of approximately 55% driven by increased distribution of AWP machines. We currently have over 13,000 AWPs monitored by our system.

Now I'd like to briefly review with you the progress we've made towards the goals we set for ourselves in our three year strategic plan, [inaudible] our growth plan. At the high level you will remember in the core lottery business we were focused on the following five areas, first driving same store sales, second pursuing licensed lottery operator opportunities, third growing our instants for Scratch and Win business, fourth pursuing sports betting opportunities and finally fifth becoming lead provider of interactive lottery systems.

In the Commercial Services segment we committed to a lottery overlay model in which we would pursue only new commercial services opportunities in locations in which we could leverage our existing lottery presence and infrastructure. Further, in the Gaming Solutions segment we recommitted ourselves to becoming a significant gaming machine and games provider to take advantage of convergence trends with our core lottery business and the commercial gaming market worldwide. We've made good progress in building the solid foundation that will significantly help us to achieve those goals.

We continue to see same store sales revenue growth that is comparable to previous periods. Jaymin will review of the drivers behind that growth, but at a high level I can tell you that new game content remains a major contributor towards that growth. In the past quarter, GTECH developed 10 new games and launched 15, including seven sites with our new raffle game.

Privatization activities in the United States continued to move forward and we are an active participant in those discussions. The states of Indiana and Illinois are the most advanced. I anticipate only Illinois to move forward this year. Obviously this is a new area as the vast majority of lotteries worldwide are still owned predominantly by governments. Many other jurisdictions continue to actively watch this area with great interest. We will keep you posted.

In the area of Sports Betting we continue to leverage our experiences and expertise in upcoming bids in both Turkey and Taiwan. We firmly believe that sports betting will become a major area of value creation worldwide for Lottomatica.

In the area of Instant Tickets our CGI subsidiary is preparing to bid in numerous procurements worldwide. We have submitted bids and are awaiting notice of awards in Ohio, Connecticut and Rhode Island. Through our participation in these procurements we hope to build a base of business that enables us to demonstrate the quality of our products and services. Additionally we are leveraging our global expertise to continue the strong development of instant tickets in our core Italian market.

In the Commercial Services area we announced the sale of POLCARD, our credit card processing subsidiary in Poland. That sale is expected to close in the third quarter. The sale was another example of our commitment to the principles of the growth plan we outlined earlier this year. POLCARD was a stand alone Commercial Services operation that was not in keeping with our Lottery overlay model. The launch of our network in Colombia, that I noted earlier, is an example of how we intend to pursue Commercial Services going forward.

Finally we are moving steadily towards the closing of the Atronic transaction. Licensing, which is needed to complete that deal, is tracking toward to a closing at the end of this year. As I hope you can appreciate, Lottomatica is gaining momentum. Our first quarter results provide clarity on that point. There are many exciting and meaningful opportunities for us in the coming months. And we intend to take full advantage of the power of the new Lottomatica to successfully pursue them.

Finally we've taken some actions to reshape our reporting structure. The complexity of our existing global operations requires me to position leaders of character where we can best direct and grow our portfolio of global businesses. To that end I am pleased to announce that I have appointed Jaymin Patel to the newly created position of President and Chief Operating Officer, GTECH Corporation, reporting directly to me. Jaymin has been with GTECH for over 12 years in senior leadership roles and has served as the GTECH Chief Financial Officer during the period of tremendous growth and success beginning in the year 2000. Most recently, Jaymin led GTECH'S restructuring efforts while serving as the Chief Financial Officer for Lottomatica.

Jaymin begins a new adventure and brings a wealth of experience, enthusiasm and industry expertise to our global business. In his new role, Jaymin joins with Marco Sala, Managing Director of Italian operations for Lottomatica, as the two most senior leaders in the business divisions comprising Lottomatica.

To take up the position being vacated by Jaymin, I am pleased to announce that I have appointed Stefano Bortoli to the position of Senior Vice President and Chief Financial Officer for Lottomatica. Since September 2006, Stefano served as the Chief Financial Officer for our Italian operations. He is a seasoned business executive with a career of experience in the aerospace industry, most recently as the Chief Financial Officer at Alenia Aeronautica. Stefano is a Chartered Public Accountant, Chartered Public Auditor and served as Professor of International Economics and Professor of Management and Control at Loyola University and LUMSA University respectively. Stefano will relocate from Rome to Rhode Island and work from our global business headquarters facility in Providence.

Now I'd like to turn the call over to Jaymin for a review of our financial performance, his last appearance before he becomes President of GTECH.

Bruce, thank you very much and good evening my friends. Welcome to our 2007 first quarter results conference call. As a reminder this earnings announcement includes the combined results for the Lottomatica Group. In comparison, the results for the first quarter of 2006 reflect three months of Italy standalone operations. I am pleased to report that we experienced solid progress in all of our businesses and our performance has exceeded our initial expectations.

Combined revenues for the quarter were EUR435m which represents year over year increased of approximately 129%.

First quarter EBITDA was approximately EUR211m, an increase of 89% versus the same period last year. EBITDA margins for the quarter were 48.5% compared to 58.8% in the first quarter of 2006, reflecting Italy only. As a reminder please note that typically our Italian operations contribute higher margins for the first quarter of the year due to the decollage effect of the Lotto game.

Combined revenue growth for the first quarter of 2007 versus 2006 was approximately EUR245m, driven largely of course by the acquisition of GTECH.

The service revenue contribution from GTECH for the quarter was approximately EUR208m, representing underlying same store revenue growth of approximately 4% over the same period last year. Product sales in the first quarter were approximately EUR17m. This includes the sale of lottery terminals to customers in Poland, British Columbia, Argentina and a central system conversion and terminal sale for Suisse Romande in Switzerland.

Quarter over quarter revenues from Italian operations increased approximately 11%. The growth in Italy was driven primarily by the extraordinary growth in the Scratch and Win business, somewhat offset by lower Lotto revenues. Revenues from our Italian operations contributed EUR210m whilst GTECH operations contributed EUR225m.

Let's take a look at revenues by business segment. Our Italian Lottery revenue increased approximately 10% compared to the first quarter of 2006, driven again by the strong performance of Instant Tickets. Commercial Services in Italy increased by approximately 14% mainly driven by the growth in top ups and stamp duties.

Gaming Solutions performed extremely well with an increase of over 60% driven by the installation of approximately 4,000 additional AWP machines, bringing the total machines in our network to approximately 13,000 as at the end of the first quarter. As Bruce mentioned, the increase in AWP machines resulted in increased wagers of approximately 55% over the same period last year.

In the Commercial Services segment GTECH contributed approximately EUR11.4m and revenues for GTECH Gaming Solutions business contributed approximately EUR13m in the quarter.

Slide 13 reflects the key performance of GTECH operations. Starting with GTECH service revenues, first quarter same store revenue increased approximately EUR8m, or 4%, compared to the first quarter of 2006. The GTECH rebased figure for the first quarter of 2006 has been adjusted to eliminate the impact of foreign exchange changes. Please note that the quarter over quarter service revenue analysis excludes the Brazil contract which accounted for approximately EUR29m in the first quarter last year.

The approximate 4% growth in same store sales was driven by a number of factors including the mega-millions jackpot activity, U.S. instant games, interactive games in the U.K. and [Poland's] overall portfolio. Net other changes impacting GTECH's quarter over quarter service revenues included net contract wins and contractual rate changes.

Moving on to Italian operations, let's look at our Lotto and Instant Lottery sales performance for the first quarter of 2007 versus 2006. Lotto's game wagers were EUR1.6b compared to EUR2b in the first quarter of 2006, lower due to the decline in wagers for late numbers. Sales were particularly strong in the first quarter of last year due to a record number of wagers related to [Cagliari 34]. Lotto wagers are now stable compared to the performance of Lotto in the third and fourth quarters of last year. Lotto revenues were EUR104m compared to EUR133m, a decline of 21% period to period.

Our Instant Lottery performance continues to be impressive, resulting in gross sales of approximately EUR2.1b compared to sales of approximately EUR855m in the first quarter of 2006. Growth in Instant Ticket sales was driven primarily by the introduction of the EUR10 ticket which generated sales of over EUR700m in the first quarter of 2007, with no impact of existing games gross sales. Year over year, total gross sales were approximately 2.5 times the first quarter of 2006.

The number of instant tickets sold in the quarter was EUR636m compared to approximately EUR354m last year. And the average price point grew to approximately EUR3.4 compared to EUR2.4 in the prior year, again mainly driven by the introduction of the EUR10 ticket.

Revenues from Italy in Instant business were approximately EUR76.5m compared to EUR31m during the same period last year, an increase of 147%.

In total our global Lottery business contributed approximately 88% of total revenue whilst EBITDA for the Lottery segment was 92% of the total. EBITDA for your information includes the allocation of corporate overheads.

Next you are able to see a summary of the reported results for the three month period. Our operating income for the quarter was EUR140m, up 49% over the same period last year. Our operating income margins, adjusted for the amortization of purchase price, is 38%. This compares to 49% last year.

The impact on operating income for the purchase price amortization of intangible assets related to the acquisition of GTECH amounted to EUR26b for the quarter. Our future reported results will continue to be impacted by this non cash expense. As I mentioned last quarter, for 2007 we have estimated the impact of the purchase price amortization in the range of EUR90 to EUR100m.

Net income for the quarter was approximately EUR45m, up 9% compared to EUR41m in the same period last year.

Moving on to financial income and charges, on a net basis we incurred approximately EUR54.3m of financial charges compared to EUR17.8m in 2006 relating primarily to interest expense on our senior credit facility and capital securities. The interest expense on this debt approximated EUR43m for the period.

Our operating cash flow before changes in working capital was approximately EUR208m. The decrease in net working capital is primarily attributable to the increase in receivables related to the Instants Lotteries performance.

Capital expenditures for the quarter were approximately EUR89m including EUR55m for the purchase of sports betting and horse betting rights in Italy. Net cash at the end of the period was EUR318m. And as a reminder we will pay out dividends of EUR120m on May 24. Also for the future, we expect to receive approximately EUR125m of net after tax proceeds from the sale of POLCARD early in the third quarter of 2007.

Looking at the summary balance sheet you will note that Lottomatica has net invested capital of approximately EUR4.4b and shareholders equity of approximately EUR1.9b. Our net financial position, or net debt, was approximately EUR2.5b at the end of the period.

Now let's turn our attention to the updated guidance for 2007. Due to the strong performance of Scratch and Win in Italy, combined with the benefit of higher than expected jackpot activity in the first quarter, we are revising our revenue and profit guidance upwards for the year.

In particular, we now expect Scratch and Win sales in the range of EUR7 to EUR7.5b for the year, compared to our previous guidance of EUR6b. We now expect total revenues for Lottomatica Group to be in the range of EUR1.67 to EUR1.77b. Our operating income is expected to be in the range of EUR490 to EUR500m with operating income margins in the range of 28 to 29%. EBITDA for the full year is expected to be in the range of EUR700 to EUR710m, with margins of approximately 40 to 42%.

To summarize, the underlying performance of our business, both Italy and GTECH remains strong. Our performance in the first quarter of 2007 gives us confidence in our upwardly revised 2007 outlook and beyond.

In closing, as Bruce mentioned earlier, I will be assuming the role of President and Chief Operating Officer of GTECH and Stefano Bortoli will become the CFO of Gruppo Lottomatica. Going forward Bruce and Stefano will be reporting future results for Lottomatica, whereas Marco Sala and I will of course be available to answer your questions as the heads of our respective divisions. Thank you very much for your attention. And we will be happy to answer any questions that you may have.

[OPERATOR INSTRUCTIONS]. The first question is from Mr. Ian Rennardson.

Hello, it's Ian Rennardson from Merrill Lynch. I have two questions please and both regarding the guidance. It looks to me that your sales or your revenue guidance has barely changed, I think before you were EUR1,650 to EUR1,750, you've put that up 15. So the guidance is now all to do with the margin. It looks to me that you're going from 24 to 25% on the EBIT line to 28 to 29, and from 38 to 39 on the EBITDA to 40 to 42. Is that a function ---- well two questions, is it a function of Scratch and Win being higher margin business than Lotto?

And secondly your depreciation and amortization, your previous guidance implied EUR235m, your new guidance implies EUR210. Have you changed your depreciation policy here?

Ian this is Jaymin Patel speaking. Let me answer your two questions if I may. First of all with respect to revenue guidance you are right in that we have not changed the overall top line guidance too much. The reason behind that is that we have shifted some product sales from 2007 into 2008. And as you know in our business the timing of product sales is not always certain. We're still confident we'll get the product sales, but they'll happen in 2008.

That business has been replaced by the performance of Scratch and Wins which is higher margin business. So the revenues for product sales have come out, replaced by Scratch and Win which is higher margin business. Hence revenue is about the same but profitability and margin is higher due to mix. That's the answer to your first question.

The second question is we haven't changed our depreciation policy. We may have fine tuned our estimates for depreciation this year, but the policy obviously remains the same. We have slightly lowered our guidance for amortization of the purchase price intangibles by approximately EUR10m. But everything else remains the same Ian.

Okay, so leading on from that, how should we, sorry to give you this question, but how should we think about 2008 in terms of margin? Should we go back to your previous guidance, you know the EUR200? Because you're doing the guidance that you intimated for 2009, you're doing more than that in 2007. So I'm a bit confused as how we should think about going forward.

Well, that's a good question. Obviously we now have the benefit of the first quarter Scratch and Win performance behind us. And I'm going to ask my friend Mr. Marco Sala to comment here, but assuming sustainability of Scratch and Win, if you'll comment in just one second, obviously 2007 would be the starting point for 2008's margins. So I would expect that if the business is sustainable margins will certainly stay at this level, and then, as we discussed before, improve by approximately 50 basis points a year on average over the next several years. Marco, please comment on Scratch and Win.

Scratch and Win is confirming the splendid performance that we commented since the beginning of the year. The point is that we registered a wager of EUR2.1b, mainly is the reason by the EUR10 as we said several times. But what is important we are finding is that the rest of portfolio is performing, is increasing the wager over time. That is quite unusual in all the geographies we have verified around the world. All our businesses, all our price points are improving. Of course we do not consider that that can continue over the quarters, but it's clear that the signal of the performance we are registering is quite solid. And therefore share the view that this has to be considered stable over the time.

Thanks.

So I think in that respect margins will certainly remain stable going into '08. And there's, as we've discussed before, in the long term plan there's room for expansion.

Thank you. And finally just sorry about this, could you just remind me what sort of margin you would normally get on product sales?

The product sales margins vary, but typically you can expect gross profit margins in the mid thirties.

Okay. Thank you very much.

Next question is from Mr. Mauro Baragiola from Citigroup.

Hello everybody. A very quick question. The first one, if you can provide us with some information on the cost you charged in Q1 for Sport Betting in Italy and the estimates we should assume for the EUR700, EUR710 guidance you gave us for 2007.

And the second question is what is your ForEx assumption for the dollar for 2007? Thank you.

Mauro this is Bruce. We don't release detailed cost components for our various business units or individual contracts. As we have outlined to you previously, we do anticipate that in the start up mode it would be logical to anticipate some modest operating losses this year. And obviously we are at that start up mode now. And we expect as we get nearer to our launch in the third quarter that we will have some of those initial costs borne in the business. But they're not inconsistent with the previous guidance that we provided in that area.

Okay.

What was your second question?

It was on ForEx. Maura this is Jaymin here. Mauro we've assumed an average exchange rate for the year of 132 taking into account the first quarter. So for the balance of the year, it's approximately 133. We don't, just so it's clear, we don't have too much exposure from volatility in the dollar because roughly 75% of Group EBITDA is denominated in euros or euro zone currencies, due to the construct of our Group cost structure. So changes in Foreign Exchange rates don't have that much of an impact on our results. When you get down to the net income level, the impact really is not material, because, as you may recall, we have approximately EUR2.2b in U.S. debt, on the U.S. books, which offsets the profitability from GTECH.

Thank you.

Next question is from Mr. Domenico Ghilotti from Euromobiliare.

Good afternoon to everybody. I have a few questions. The first is related to, on the tax rate. Could you help us in understanding taxation in Q1 and also going forward, because I don't have details?

The second question is related to the change in net working capital. You mentioned it was related to the scratch cards growth so I presume that it will normalize and stabilize in the rest of the year.

And still on scratch cards, your assumption, you are implying a stable growth of, stable collections, stable volumes of around EUR500, EUR600m, is it correct? And is the current level, is consistent with the current level, or you still have room for surprise?

I'm going to ask Jaymin to address those questions and Marco may comment on [something].

Why don't you start with the Italian and I'll do the tax rate if that's okay.

Yes, regarding your asking regarding Scratch and Win, there's a --- the point is we have to assess the performance of the demand. Now with the guidance we have is about [inaudible] and even more to come because have experienced these are very unusual performance as also compare with the whole [connection] experienced with GTECH provide [with]. And therefore for the time being that is the guidance we have assumed.

With respect to your question on the tax rate for the quarter, we're showing a corporate tax rate of approximately 47%. And that's made up of a Group tax rate in the low forties, plus the fact that we have some costs that are non deductible for tax purposes. The tax rate in the business has been normalized, with deferred tax releases to the income tax line for the impact of amortization from the purchase price intangibles. It's a fairly complex issue, so rather than take time now getting to all the complex issues around the tax rate, I can give you a call back if you would like.

Yes, sure. Thanks.

Net working capital, let me just take that question. Net working capital for the quarter, obviously we are using EUR148m of cash in the quarter. That's driven by the fact that we have tremendous growth in Scratch and Win in Italy. As sales levels grow, retailers are holding larger amounts of cash. And we collect cash roughly on a 15 day cycle. So, as the business grows we will certainly be net users of working capital although as Marco mentioned, we expect sales to stabilize. Hence for the second third and fourth quarter we wouldn't expect to see any more cash usage in terms of working capital.

Okay. You said 15 days cycle?

15, One, five.

One, five. Thank you.

There are no questions at the moment. [OPERATOR INSTRUCTIONS]. The next question is from [Barcenelle Euriani] from [Kirus].

Hi, good afternoon to everybody. I have basically two questions. The first is related to the acquisition [or overture] by Century Games. Did you take part to the deal or it was a private negotiation?

And the second question is related to the Italian consortium for the management of Scratch and Win. Did you start discussion about the renewal of the consortia, a comment on this? Thanks.

Okay. I'll answer the first question and ask Marco Sala to address your second question. Obviously we're aware of the purchase price [inaudible] whether to proceed. Certainly we don't comment on specific M&A activity, that's usually inappropriate. We look at all transactions and we are aware of all parties. So you can certainly anticipate that we would have been aware in this particular place. Obviously we're evaluating the whole transaction and if we have any further comments we'll make those in the future.

Regarding the consortium we didn't start any discussion because we are in 2007 we have more than two years to run before any change can be, can occur according to the regulator decision. Therefore we didn't start a discussion now with anybody within the consortium.

Thanks.

There are no questions at the moment. [OPERATOR INSTRUCTIONS].

Operator if there are no further questions please allow me to sum up. The Lottomatica first quarter results show that the underlying business is performing well. Our fundamental trends are strong, performance is sustainable. Our first quarter results provide continued confidence in the full year outlook. In addition, we're making excellent progress in meeting the specific goals I outlined for you on our three year strategic growth plan. And as we have detailed there are good opportunities in our core Lottery space in the coming year. And we have clear strategies to take advantage of those opportunities. We are well positioned to drive accelerating growth.

In closing I know that some of you were able to attend the Lottery World Leaders Forum that we recently hosted. The event is a showcase for us to provide our customers worldwide with a view of the future and how we intend to help them meet the challenges of an ever changing, ever evolving marketplace with new products and services. I can report to you that our customers came away from that experience with a genuine appreciation for the innovation and thought leadership that is at the core of our Company. We have produced a DVD of some of the highlights of that conference and I encourage you to give us a call if you'd like a copy. I think you'll find it worth viewing and certainly worth your time.

Thanks for joining us and we look forward to our next call in a few months.