International Game Technology PLC (IGT) 2014 Q3 法說會逐字稿

Good day and welcome to the GTECH 2014 third quarter and year-to-date results ended September 30th, 2014 conference call. Today's conference is being recorded.

At this time I would like to turn the conference over to Mr. Marco Sala, GTECH Chief Executive Officer. Please go ahead, sir.

Good evening and welcome to GTECH's third quarter conference call. Joining me today is our CFO, Alberto Fornaro. I will begin with some insights into our performance in the quarter and conclude with a high level update about our acquisition of IGT.

Looking at our performance, we achieved good results due in large part to the diversity of the sources of our revenue. Our Italian operation, driven by good performance in Lotto and sports betting, was able to help make up for a lack of jackpot activity and lower product sales that impacted our results in the Americas and international.

Last year's Canadian replacement cycle continues to impact quarter-over-quarter product sales, although that effect is diminishing and will not be a significant factor in future quarters. More importantly, we were able to bring in other VLT sales that helped offset the difference with last year.

I should also point out that the third quarter last year, that had some one-time charges, and the lack of those impacts in this quarter benefitted us in EBITDA and operating income on revenues that were mostly stable.

From a strategic perspective, we had some significant developments. In Greece, we are making steady progress and are becoming a substantial provider to OPAP. Just recently, we have been notified that we will be one of the providers to supply the soon to be launched VLT program. Negotiations to finalize that award are under way.

In the Americas, we were the successful bidder to provide the online lottery system in Missouri and Washington State, and we expect to sign a new contract in Mexico in the near term.

The Monopoly Millionaires' Club, a new national draw game in US, launched in late October. Promotion of it is just beginning, and we hope it will strengthen our efforts to sustain and grow same store sales.

In the area of game development, we were also able to obtain the rights for the use of the popular Wheel of Fortune and Jeopardy franchises in the lottery space. That will nicely complement IGT's similar rights to those franchises in the gaming space.

Our lottery management services agreements in Indiana and New Jersey are performing largely in line with our expectations, although they, like many other US lotteries, have been impacted by the lack of multistate jackpot activity.

Indiana is achieving results that are above the national average. However, a substantial part of their Lotto game performance is related to the national jackpot games.

After a review, we have taken an accounting decision to book a non-cash item related to our Indiana performance. Alberto will provide further details, but we expect to make up a good deal of that as we work with the state to adjust and execute our business plan and launch some innovations.

In Illinois, Northstar continues to provide good results for the state, and we are working with the state administration toward a resolution of past issues.

In the international region, despite lower product sales and the lack of EuroMillions jackpots, we experienced good same store revenue growth, driven by improved distribution of instant tickets and innovation in the national jackpot game in the UK. That is a good example of how changes introduced last year in the UK are producing positive results this year.

We expect the same to be the case in the United States, where improvements to the national jackpot games should drive growth in 2015. We also expect improved contribution from EuroMillions with the addition of some new countries in the first half of 2015. Overall, the diversity of our portfolio of jackpot games helps create a good balance to offset the natural ups and downs associated with them.

And we also had some additional commercial success. The National Lottery Board in South Africa published a notice that the consortium we are part of was chosen as the preferred bidder in the tender for the new lottery license. Negotiations are underway, and we are confident of a good conclusion.

In other developments, we were also chosen to provide new systems for casinos in Austria, Holland, and Russia.

And in Australia, Clubs New South Wales selected us to be their vendor partner in the upcoming bid to replace the central system that monitors over 90,000 VLTs. The award is expected in the first half of 2015, and we believe that the alignment with the clubs positions us well.

Turning now to Italy, our performance was encouraging. We were helped by the Lotto category that continues to benefit from innovations introduced in the 10eLotto game. Sports betting also contributed positively, helped by virtual betting, increased wagers, and the lower payout.

Overall we are encouraged by the results in Italy that, as I noted earlier, helped offset impacts in the other regions.

Now, I'd like to offer some brief comments on the IGT transaction. There have been some public notices about the progress we have made so far. Alberto will cover this in greater detail during his comments.

And just this past week, shareholders voted to approve the recommendation of the GTECH Board to go forward with the transaction. All in all, there has been good progress to date.

As previously noted, one of the most compelling aspects of the deal is the consolidation of the two companies will generate substantial synergies of approximately $280 million to be captured over the next three years. As we have begun the integration planning process with our counterparts at IGT, we have gained further confidence that the integration targets are achievable.

As in previous calls, due to pre-closing conditions we will not be entertaining any questions on the acquisition during this call. We will provide updates when and if there are material developments to report into the future.

Finally, I'd like to conclude with a few words about our guidance. Our business is performing well. Despite the lack of jackpots in North America and Europe as well as difficult comparisons with comparable quarters last year, we are firmly on track to achieve our full year EBITDA, operating income, and net financial position guidance.

Now I'd like to turn the call over to Alberto for his review of our performance, after which we will take questions.

Thank you, Marco. We achieved good year-over-year progress in the third quarter. Excluding costs related to the IGT transaction, our performance is fully consistent with the full year guidance we have provided. And apart from the impact of a slightly different revenue mix, it is also ahead of market consensus.

Now let's look at slide eight, which shows reported consolidated results for the quarter. Consolidated revenues were roughly unchanged in the third quarter.

In Italy, revenues were ahead of last year, driven by the product innovation in the Lotto category as well as wagers and lower payout in sports betting. This offset lower revenues in our other regions.

In the Americas, it reflects both the end of the Canadian replacement cycle and the lack of jackpots. And in our international region, it is mainly a question of timing, which will be made up for in the fourth quarter.

Consolidated EBITDA and operating income were up significantly. In a moment I will discuss certain one-offs that impacted these figures, as well as net income and EPS.

Finally, reported net financial position was up in the quarter. But, as you will see later on, stripped of the costs related to the IGT transaction, the net financial position was down sharply both sequentially and year-over-year.

Now let's look at the P&L on the next slide. Reported figures reflect an average US dollar/euro foreign exchange of 1.33, compared to 1.32 in the third quarter of 2013.

Service revenues in the third quarter were up 3%, driven by solid performance in Italy. As Marco alluded to earlier, this includes an approximate EUR14 million reduction related to the minimum profit level guarantee in Indiana for the lottery fiscal year in 2014 and 2015.

As anticipated, product sales were lower mainly to the winding down of the Canadian VLT replacement cycle.

As planned, we incurred EUR4 million of restructuring expenses in the quarter. These were offset by the net impact of the unusual items which I will describe shortly.

Virtually all of the increase in interest expense comes from the bridge loan facility tied to the IGT transaction.

On slide 10, I'd like to explain some one-offs and unusual items that impacted our third quarter performance. Third quarter EBITDA is EUR3 million higher than last year when we exclude the prior year machine gaming provision.

At the operating income level, in addition to the previously mentioned EUR30 million impact from the machine gaming provision, in the third quarter of this year we incurred transaction costs of EUR10 million associated with the IGT acquisition that were more than offset by the EUR14 million gain on sale of the company's sports and events ticketing business in Italy.

When including all of the above adjustments, operating income would be EUR3 million lower in the third quarter of this year versus last year.

After allowing for these items, as well as interest expense from the previously mentioned bridge facility and the resulting income tax impact, net income attributable to owners would have been comparable to the same period of last year.

The most significant adjustment related to the underlying net financial position, which benefited from our strong cash flow generation in the quarter. At the end of September, net financial position would have been EUR2.49 billion, down EUR38 million in the quarter when adjusted for one-offs.

These include IGT related transaction expenses and the financial liabilities related to the bridge loan fees as well as the share repurchase program, partially reduced by the proceeds from the sale of the Italian ticketing business.

Now let's move to the third quarter business performance by segment, starting with the Americas on slide number 11. In the Americas, service revenues were impacted by lower multistate jackpot activity and the previously mentioned reduction for Indiana, partially offset by strong instant ticket performance across multiple jurisdictions in the United States.

Product sales in the quarter were EUR11 million lower than prior year when adjusted for the impact of foreign exchange. We were able to offset approximately half of the anticipated decline in gaming product sales to Canada with sales to US-based customers.

The drop in operating income was the result of the three major items that reduced revenues.

A word regarding Indiana -- growth in Indiana considerably outperformed the average US lottery sales growth in Q1 and Q2 of 2014. In Q3, online and instant also outperformed the average US growth.

However, the timing of jackpots, in particular Powerball, combined with Indiana's heavy dependence on these jackpot games negatively impacted Q3 sales. We decided therefore to take the EUR14 million accrual in the quarter, and are looking at the growing impact of the Indiana supply contract to contribute to the overall profitability.

In order to continue to drive growth from jackpot games, the new multistate Monopoly Millionaires' Club was launched on October 19. It should help drive additional revenues. In addition, a change in the feature and in the matrix of Powerball has been approved, with an April 2015 start date.

Total revenues from international, here on slide 12, were down to exceptionally high product sales in prior year, partly offset by a 4% increase in lottery same store revenues driven by solid performance in UK, the Czech Republic, and Poland.

Operating income was primarily impacted by lower product sales.

We are expecting to recoup in the fourth quarter the product sales' shortfall of Q3, and we foresee significant improvement in Q4 and full year profitability in the international region driven by cost synergies, restructuring of less profitable contracts, and new business won.

Revenues in Italy, on slide 13, were up 7% in the third quarter, driven by significant growth in lottery and sports betting.

Total Lotto wagers were up 16%, driven by strong performance of 10eLotto, which was more than offset by lower contribution from late numbers.

Revenues from sports betting were up sharply on growth in wagers, driven by virtual betting, and on a lower payout.

Italy operating income, excluding last year's machine gaming provision and the sales of the ticketing business, jumped by EUR24 million, driven by Lotto and sports betting.

As usual, you see here on slide 14 your year-to-date performance. I will only comment on our effective income tax rate for the nine months, which stands at 41%, slightly higher than prior year. This increase is due to the impact of some nondeductible acquisition costs related to the pending acquisition of IGT.

The net financial position at the end of September was EUR2.58 billion, compared to EUR2.51 billion at the end of December.

When excluding IGT related transaction costs and the sales of the ticketing business in Italy, we reported strong cash flow from operations of EUR634 million in the first nine months, which compared favorably to EUR497 million in the prior year period. This improvement was primarily due to higher cash flow from changing working capital.

Total CapEx for the first nine months included EUR104 million as maintenance CapEx and EUR84 million as growth CapEx, mostly attributable to Colorado contract, sports betting in Italy, and the acquisition of Probability.

In terms of full year guidance, we remain well on track to achieve the EBITDA and the operating income, and we are anticipating closing 2014 with a net financial position in the lower part of the range that we have communicated at the beginning of the year, when adjusted for the impact of the IGT acquisition.

As you see on slide 16, we are progressing as expected with the acquisition of IGT related work streams. In August, we cleared US and Canadian antitrust hurdles, and we also closed on the bridge loan credit facility syndication.

We filed the preliminary Registration Statement with the SEC in October, and IGT's 2019 bondholder consent was completed in the same month. Last week, GTECH shareholders approved the cross-border merger of GTECH S.p.A. into Georgia Worldwide Plc, and we executed a new five year, approximately $2.6 billion multicurrency revolving credit facility.

We are in process of getting consent from bondholders on our 2018 and 2020 notes. At the early voting deadline, respectively 87% and 91% of the bondholders of the 2018 and 2020 bonds submitted instruction in favor of the consent solicitation. Therefore, we look positively to November 24 for final approval by the bondholders' meeting.

We have also launched a call on our 2016 notes as a liability management exercise. The recent developments on financing, consent, and RCF have allowed us to have committed financing in place for approximately 50% of this new entity pro forma capital structure after closing.

On the integration side, we have established a steering committee and program management office. We have identified and launched 20 critical work streams, and more obviously our progress here will be ongoing. Steps to moving closer to the completion of the IGT acquisition are on track.

So, all in all we are quite pleased with the progress we made in the quarter both with regards to our operation and to the implementation of our strategy.

Now I'd like to open up the lines for Q&A, after which we will hear closing statements from Marco.

Certainly. (Operator Instructions) Richard Carter, Deutsche Bank.

Good evening; three questions. Firstly, why did the AWP installation base go down 3% in the quarter? Is there anything we should know about what you're doing there?

Secondly, on the potential increase in VLT and AWP taxes in Italy, could you just talk a little bit about timing? And also, there's been a lot of speculation, and it varies, on how much it would actually theoretically cost to upgrade the machines for altering the payout ratio. So, could you just give a little bit of color there?

And then thirdly, why is deprecation in Italy falling? I thought it'd be increasing year-on-year, given you've got more VLTs and you're rolling out shops and things like that.

Richard, two answers regarding your three questions. First of all, regarding the AWP installation that is going now, there it's perfectly in line with the normal movements in the number.

There is part of the machines that sometimes are under maintenance or that are relocated from one location or another. So, we don't see anything structural in the change that we have experienced in the quarter, considering also that they have been increasing over time every quarter in the last year and a half.

Regarding the impact and the proposed Italian legislation, you are aware that basically the Italian government proposed legislation would require -- would reduce basically the minimum payout. And this requires some time.

Now, if this proposal were to be enacted in its current form, it clearly would have a negative impact on the segment. However, we don't expect the law to be passed as it is.

In addition, this law, the way -- in the current format will be detrimental for the government revenues, directly and indirectly, and probably will encourage some players to move to the illegal segment.

So, overall, we believe the dialogue is here just starting, and we will see what are the developments. And we'll assess the impact on our business basically when we will get a better understanding regarding the final provisions of the law.

And finally, regarding the amortization of the VLT, it has been quite stable. There is a small reduction that sometimes is due to the fact that we reassess in the entire gaming machines the economic life of some of the machines that we have. But, it's really a minor impact.

Okay. Thank you.

Vaughan Lewis, Morgan Stanley.

Oh, hi. Evening. The first one's just a follow up on that tax rise proposal. If it does go through as planned, would it be possible to run the machines business profitably, do you think, or would it make it pretty much impossible?

Secondly, on the guidance, you sound confident about the EBITDA and operating income guidance. But, why is revenue running well below the initial guidance? What's been the change there, and how have you been able to offset the weaker than expected revenues? Are you including all the sort of one-offs and the disposals in your guidance to hit operating income?

And then, a final one on the US PMAs. I mean, Indiana is now losing money. Illinois has already lost a lot of money. Is it fair to say these are being very disappointing? And what do you think might change in the future that these might ever make some money, or should we pencil in losses forever now? Thanks.

Okay. Let me answer the second and third questions that are linked together. First of all, the fact that we are not going to achieve the revenues we anticipated is mostly related to the jackpot games in the United States.

Let's not forget that there is an important component of our revenues in the LMA that is basically the pass-through. And therefore, when we have a reduction of sales compared to our forecast, it impacts both the pass-through revenues and the total revenues for the facility management contract. And that's one of the major areas that is impacting the revenues.

For what is related to the LMA, let me just put in perspective the performance of Indiana. First of all, Indiana was a contract we didn't have before. So, the entire profitability that is coming from the facility management contract is going to build over time a buffer in total for whatever is going to be the result of the private manager agreement.

As you can imagine, in Indiana the volumes are going up. Therefore, the facility management contract year-over-year improves the profitability. But also, we are not 100% managing from the facility management contract the activities in Indiana, because there is still a part of the contract that we manage but we are transitioning part of the terminals from the prior incumbent for the Indiana contract.

Beginning July 1st, 2016, we will have 100% of the facility management revenues related to this contract, which further will increase this buffer that we build eventually to support the negative news we can get from the PMA.

On the other side, when we look to the private manager agreement regarding Indiana, again I want to stress the fact that we have in the first half of the year substantially outperformed the rest of the United States. And therefore, the contract is proving very successful from that point of view.

In Q3, we are basically -- for the jackpot, we are at that same level of growth experienced in the other contract in the United States. But, we still believe that there is a substantial improvement that we can achieve in the remaining part of the year.

So overall, again, we believe that in the long term -- this is a 15 year contract -- considering the fact that we have improved results from the facility management and later on the growth of the bid net income in the PMA will be limited, this contract will basically provide a good chunk of our profitability in the future years.

Look, I'll try to give some additional color on the question related to the budget law in Italy that regards the slot machine business. Here we want to be clear.

If the law is going to pass as it is, it will have a very negative impact on the segment. No doubt regarding that. The point is we doubt that it will pass in this way. As Alberto was saying, it will impact very negatively the net revenues of the Italian government, and will bring back to illegality part of the current legal market.

So, I think there will be a quite extensive debate in the Parliament regarding this law. And I think there are strong arguments to change, or to try to change, the law.

And do not forget that this law is not expecting any net tax increase deriving from this action. So, in the budget law, there are no provisions that are coming from the increase in taxation in VLTs. So, it means that also the government is realizing that the effect of this maneuver is so far very unclear.

Okay. Thank you.

Fabio Pavan, Mediobanca.

Yes, hello. Good evening, three very quick questions. The first one is related on costs. Was wondering if you could provide some more color on the savings plan you were mentioning before, also if you could elaborate a little bit more on the net debt expected for year-end, and finally an update on Italian lotteries for the last quarter of the year. Thank you very much.

Fabio, regarding the synergy we are on track, we are for achieving the EUR40 million that we have discussed at the beginning of the year. You have seen that sequentially every quarter we have increased the results that we have achieved.

On top of that, we have some additional cost savings, particularly related to some initiatives that we have in place in Italy that will add compared to the original target in terms of synergies. These cost savings will add an additional EUR10 million by year-end. So, good news on that front.

Regarding the net financial position at year-end, I would say we are progressing very well towards the lower end of the guidance. Depending on the timing of certain activities related to the acquisition of IGT, we may incur costs related to the IGT acquisition.

And so, the size of these are basically a function of timing. They could happen in Q4 or they can happen in Q1. Having said that, again I repeat we are going to be very comfortable inside the guidance and most probably towards the end of it.

And sorry, can you repeat the third question?

Just an update for the Italian lottery for the last quarter of 2014, or the trend you are experiencing in October. And then maybe you have already some color for November as well.

I can tell you that as far as Lotto is concerned October was slightly below last year, because last year we enjoyed a high -- a level of late numbers. But, on the other hand, the product innovations on 10eLotto are performing well, and they will produce good results in the remainder of the year.

On the other hand, in scratch and win, we launched a set of new products there. And the first results are rather encouraging, and so we are positive for the fourth quarter in the Italian lotteries.

Thank you very much. Thank you.

Domenico Ghilotti, Equita.

Good afternoon. I have three questions. The first is just a follow up on a previous question. So, on your revenue guidance, can you clarify where are the areas where you are down compared to your expectation, and in particular if you were able to offset in this area the profitability, or what are the areas where you were able offset the profitability?

The second question is on the CapEx. You seem quite below the full year guidance, so if you can confirm also the target in terms of capital spending.

Then just a clarification on the net financial position guidance in general on the confirmation of the full year guidance, if I am to understand that this guidance is excluding the one-off IGT refinancing and cost.

Okay, Domenico. Yes to the third question. You should consider our guidance net of the IGT costs, which are mostly related to the financing, but not only to that.

Regarding the CapEx, we are trending better than what we anticipated for the first nine months. And therefore we should probably be on the lower side of the guidance comfortably.

Regarding the revenue guidance, it's very simple. The two major areas where the revenues are short of the expectations are related to North America, and they are mostly linked to the jackpot games.

From one side, the reduction in revenue does not produce any impact on the operating income level when it impacts the so-called reimbursable cost that we book as revenues and 100% as cost. So, it's just basically inflating the two items in the P&L.

Partially the reduction in the jackpot did impact the revenues of all the facility management contracts. And that has some impact on the profitability of the year in terms of operating income.

These are the two major items. The factor that you don't see, at the consolidated, a big impact is because the revenues in Italy, particularly in the Lotto, are better than expectation, and they have a good profitability attached to it.

And just a clarification on the outlook for the lotteries, when Mr. Sala was referring to slightly down year-on-year in the lottery, it was including both, let's say, traditional business, so jackpot activity, and the 10eLotto innovation. So, it's the total wagers, correct?

Yes, but we do not have the jackpot in Lotto.

No, no, I mean -- you're right. Total wagers. Okay.

No, total wagers, on total wagers we are slightly below overall in October, just to say, because last year in October, as I already said, we had a high level of late numbers that we are not having -- that we didn't have, sorry, in October 2014, while 10eLotto is doing well, and looking forward I think will provide a good boost to the overall brand.

Okay. Thank you.

Richard Stuber, Nomura.

Yes, hi. Good evening. Just two questions, please, the first one going back to sort of the Hoosier contract. If jackpot lottery was normalized, would you have expected to take any shortfall on the back of that contract at all?

And the second question, just in terms of the timing of the IGT completion, do you expect now that should all be done by the end of Q1, or is your -- are you sticking with your official guidance as still sometime in H1? Thank you.

Okay. Regarding the IGT transaction, we are marching according to the timeline at the moment. Part of the timeline is also not related to us, and it's linked to the approval of the regulator. Therefore, we have not changed our initial expectation, even though -- I mean, again, we are marching according to what we have envisaged.

When we look at -- going into your first question related to Indiana, without the jackpot we would probably have taken a minor accrual, offset by the results on the facility management contract with the normal performance of the jackpot games.

Okay. Thank you very much.

Gian Magrini, Gabelli Asset Management.

Good evening, everyone, and thank you for taking my question. I just have two quick ones. First, if there are any updates on the financing, and so the options available to you after the term loan is up, and second if you have any updates on the recesso process. Any feedback on that would be highly appreciated. Thank you.

Okay. Regarding the financing, we have basically have split our activities in two phases. In the first one, we are -- our intent is basically to make sure that the current sources of funding of GTECH and partially of IGT are basically existent after closing through the bond consent process. And also, we have replaced our credit facility and enlarged it eventually to make it accessible also to IGT after closing.

The second part, which is the acquisition financing, will be a matter that will be addressed when we have certainty of transaction. And the process has just started, because we have just got the approval from the GTECH shareholders.

Regarding the withdrawal rights, the only fact that we know is that approximately 70% of the shares have voted in favor of the merger. And therefore, the pool available for withdrawal is the remaining 30% of the shares.

So, that's what we know as a fact. As you can imagine, the critical point, we think, will be how the stock price will move in the next days. So, it's very difficult to make any prediction regarding the final outcome.

Andrea Randone, Intermonte.

Thank you and good evening. Just a very quick question regarding sports betting. I wonder if you can tell us which is the contribution coming from bets on vehicle events in your total wagers. Thank you.

Regarding the breakdown, we don't disclose, by product inside the sports betting, the breakdown between the different channels and between the different products.

Thank you.

(Operator Instructions) Domenico Ghilotti, Equita.

I have a follow up question on the stability law, in particular what were your comments on the part of the law that is trying to enforce tax payment on unlicensed operators. Do you think in the current form this enforcement is really effective, can be effective?

You are asking me an opinion as a journalist. (laughter.) Look, I think I consider it positive that the Italian government is focusing on the illegal market, because we still believe that it is a source of revenue for the state. In many occasions, there were clear indications that part of the current offering in the Italian market is illegal.

I think I see with favor the fact that the Italian government is focusing its attention on that, because it can of course represent a source of business for the legal offering. And generally speaking, I'm positive with the provisions.

And the last question is some color on the launch of the new Monopoly Millionaires' Club.

No, that's -- you know it's too early to make an assessment regarding a product that has been just launched. And so, I cannot anticipate anything concrete.

Okay, that's fine.

But, it's positive. It's positive that there is a continuous thinking about national games, about innovating the portfolio within the American market. There are other thoughts regarding innovation on core games that I consider are positive and are providing us some optimism regarding the future.

The jackpot -- there was the first jackpot hit last week. So, we will see what the reaction will be. But, generally you know in this business innovation is the only driver for future growth.

Thank you.

Gian Magrini, Gabelli Asset Management.

Yes, guys. Thank you very much for taking the follow up, just very quickly regarding recesso process. In the event the 20% threshold gets breached, can you guys tell us how you would be thinking about that, given that essentially you have the unilateral right to walk away or stick with the deal? And there's a significant termination fee attached to it, so just trying to think how you will approach that eventuality.

Well, let me answer it this way. We really think that 20% for a company that is -- it has a float of 40% of the total because the remaining is weighted De Agostini, is really a very important number. You are talking about 50% of the float.

So, therefore, when we chose that number, it's because we had -- we made an estimate that it could be enough to allow the conclusion of the transaction. If not, we will decide at the moment. That's why we left the option open, but we believe it should be enough.

Fair enough. Thank you.

As there are no further questions at this time, I would like to hand the call back to Mr. Marco Sala for any concluding remarks.

Okay. It appears that I can wrap up. We are pleased with the third quarter results, and are confident that the plans and activities we have will ensure that we will achieve our guidance.

The IGT acquisition is progressing well. The synergies we expect are realistic and achievable.

From our customer perspective, we have just participated into a major exhibition in lottery and gaming. In each, it was clearly evident that our customers value our existing offerings and are excited about the potential of our merger with IGT.

Thank you for joining us. And we will provide updates as developments warrant. Good evening.

That will conclude today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.