International Game Technology PLC
Q2 2013 Earnings Call Transcript

Published: 26 Apr 2013

[Operator:]

Welcome to International Game Technology's Second Quarter Fiscal Year 2013 Results Conference Call. [Operator Instructions] This call is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the call over to Kate Pearlman, Vice President of Investor Relations and Treasury. Thank you, you may begin.

[Kate Pearlman:]

Thanks, Kim. Good afternoon and welcome to IGT's Second Quarter Fiscal Year 2013 Earnings Conference Call. Leading our call today will be Patti Hart, our Chief Executive Officer; and John Vandemore, Chief Financial Officer. Before we begin, I'd like to remind listeners that our discussion today will contain forward-looking statements concerning matters such as our expected financial and operational performance, including our guidance for fiscal 2013; our expectations for the economy in general and the gaming industry in particular; the expected impact of the DoubleDown acquisition; and our strategic, operational and product plans. Actual results may differ materially from the results predicted and reported results should not be considered as indicative of future performance. Potential risks and uncertainties that could cause our business and financial results to differ materially from our forward-looking statements are included in our filings with the SEC, including our most recent Annual Report on Form 10-K and our most recent quarterly report on Form 10-Q. All information discussed on this call is as of today, April 25, 2013. And IGT does not intend and undertakes no obligation, to update this information to reflect future events or circumstances. In addition, on today's call, we'll discuss certain non-GAAP financial measures, including adjusted earnings per share from continuing operations, adjusted operating expenses and adjusted earnings per share from continuing operations guidance. Reconciliations of these non-GAAP measures to the GAAP measures we consider most comparable can be found in today's earnings release, which is posted on IGT's Investor Relations website, igt.com/investors, and included as Exhibit 99.1 to the Form 8-K we furnished today to the SEC. We would also like to invite you to download the IGT Investor Relations app, where you'll be able to access our earnings release and other information about the company. Finally, all references to 2013 or 2013 year refer to our fiscal year 2013. And now I will turn the call over to IGT's Chief Executive Officer, Patti Hart.

[Patti S. Hart:]

Thank you, Kate, and welcome, everyone. We are very pleased with the momentum demonstrated by our second quarter results, which is our best second quarter in 5 years, as we made progress on the execution of our strategy by focusing on our core operations, capitalizing on growth opportunities, leveraging our best-in-class content in all channels and returning cash to our shareholders. There are a number of highlights in our operating results, but I'd like to focus on 3 notable areas. First, we delivered stellar performance in product sales, particularly in North America, where we estimate that we captured over 40% market share in the Canadian replacement cycle. We are equally proud of our efforts domestically, where we delivered strong performance in new markets, like Illinois and Ohio, as well as in the traditional replacement orders. Second, we delivered dramatic growth in our social gaming business at DoubleDown. This quarter in particular, we are very pleased to see that the IGT content library, games like Cleopatra, Wolf Run and Grand Monarch, is now driving over half of our revenue in the DoubleDown Casino. During the quarter, DoubleDown consistently ranked in the top 5 grossing Facebook apps and in the top 10 iPad apps, achieving as high as the #3 position in both. Our mobile gaming platform saw remarkable increases in gameplay, fueled by the rollout of IGT content, as well as the introduction of our new mobile slot tournament product. We remain confident that our investment in DoubleDown will yield long-term shareholder return, well in excess of our cost of capital. Third, we returned $94 million directly to shareholders this quarter, as we repurchased $75 million of common stock and paid $19 million in dividends. Further, we invested $58 million in research and development, which we will leverage for both our land-based and online products, as we lead the industry in the funding of future innovation. Before I turn the call over to John, I want to take a moment to make a few observations. First, we experienced a pivotal moment in February with the passage of legislation in New Jersey that legalized both online poker and online casino-style gaming. IGT is well positioned to capitalize on this opportunity, given our proven track record in this business, as well as our experience in social gaming. We firmly believe that our success is aligned with the success of our customers as we enhance their revenues by extending our premier class casino content into their branded environment. One great example of our collaboration with our customers in this area is in Canada, where we partnered with the British Columbia Lottery Corporation this quarter to expand their online offering by hosting our content on their website, playnow.com, via our remote game server. In the U.K., we have provided online slot content for over 10 years in support of our customers and we look forward to the opportunity to leverage this expertise in online gaming in the U.S. Turning to our International markets, our measured approach to growing our business and expanding our footprint has proven successful, as there is strong demand for gaming products and services, generally, and for IGT's offerings, specifically. However, there are systemic issues that have impeded participation in some markets, which we are working to overcome. And the economic headwinds in certain regions continue. However, we remain committed to harvesting the investments that we have made in this business, particularly in expanding our portfolio of localized content. Long term, we still expect International markets to outpace the growth of our North American business. Finally, I'd like to thank the people of IGT for their dedication and for delivering these impressive results. And with that, I'll ask John to cover some of the financials. John?

[John Vandemore:]

Thank you, Patti. We delivered strong results again this quarter, which reflect our focus on driving profitability and returns on invested capital. This quarter's highlights include

[Patti S. Hart:]

Thanks, John. It was a solid quarter with revenues of $600 million. As I mentioned, it was the strongest second quarter in 5 years. Our objectives for 2013 remain consistent with what we've shared with you previously. First, to reinforce our leadership position in our core business; second, to increase revenues and profitability in international markets; third, to propel our game content across the industry's broadest global gaming network; and last, to return capital to shareholders in both a consistent and efficient manner. As we execute on these objectives, we still anticipate delivering a fourth straight year of double-digit growth and adjusted EPS from continuing operations. I have to say, I have never been more encouraged by our company's prospects. We have the best games and products, the right talent and a proven strategy. As we shape the future of the industry, we will have truly unique opportunities for growth that will deliver value for all of our stakeholders. We'd now like to open up -- open the call to your questions.

[Operator:]

[Operator Instructions] And our first question comes from Steve Wieczynski with Stifel.

[Steven M. Wieczynski:]

I guess, first of all, on the product sales component, you highlighted in the release that you were -- you did a little bit more promotional activity and that impacted your margin, I guess, it dropped down 300 basis points. How should we be thinking about that going forward? And I guess, just -- and one of your competitors out there is saying that they're going to try to hold price, it looks like you guys are -- became a little more aggressive on price. Just the way you're thinking about that going forward.

[John Vandemore:]

So I think you would consider the comment relative to some targeted activity and we mean that as it relates to specific customers. And our goal on that was to take some share and we're also being aggressive with tapping into capital budgets in the early part of the year. It was targeted -- it follows on the quarter 1, where we did not offer much in the way of promotional activity at all. On balance, I wouldn't think of promotional activity as being an extraordinary item in the year. It was an impact on the quarter, but not the only impact on margins in the quarter.

[Steven M. Wieczynski:]

So John, I guess, margins can go back to that more kind of mid-50s level? Is that kind of what you're saying?

[John Vandemore:]

Traditionally, we're in kind of the low 51 to 53 range and that's where I would expect it to sustain over the remainder of the year.

[Steven M. Wieczynski:]

Okay. And then going into the game ops division. You talked about having -- I know you guys thought you'd be able to stabilize yield and basically keep yields flat for the year, but now you're saying that they might go lower than that. I mean, what -- what is kind of behind that commentary and what should we be looking for, I guess, for the next couple of quarters? And I guess what I'm getting at is, did you see through the first quarter -- or your second quarter, excuse me, did you see things get worse, did you see things get better? A little bit more commentary there would be helpful as well.

[John Vandemore:]

I'll start and then Patti, I'm sure, has some perspective with her conversations with customers. I think the biggest trend we see is a lack of stability and forward trend progress on gross gaming revenue trends. And that continues to be the most significant impediment, we believe, to getting back to a flat and then, hopefully, increasing our game op yields. As I mentioned, also, that we have many efforts underway that we believe will add support and, hopefully, continue to propel yields north, adding resources to the MJP product line, leveraging franchise titles, the direct-to-marketing efforts and then the new Game Changer product and other product categories. So we believe are doing what we can to support the business. But we do need some cooperation from GGR trends. And I would say, over the first kind of 2 quarters of our fiscal year, we haven't seen anything to indicate that were going to get some positive tailwind in that area.

[Patti S. Hart:]

Yes, I would agree. I think in my conversations with customers, continues to be confirmed that the market is not going to grow this business for us. We're going to -- if the yields are to come back, they'll come back because we're scratching it out in a pie that's, for the most part, fixed right now from a gross gaming revenue into the game ops space. So it does come down in that case, Steve, then to more discounting, which we have really tried to resist in that part of the business. So I think we're looking at it right now, saying we're very focused as we have been over the last several years, on maintaining margins in that business and not chasing what we think are anemic yields, in some cases, with capital. So I think we're at the point -- at this point in the year where we would say getting back to flat for the year, without doing something extraordinary, may be a bit of a challenge for us.

[Operator:]

Your next question comes from Joseph Greff with JPMorgan. [Operator Instructions] And we'll proceed with the next. Let's have Shaun Kelley with Bank of America.

[Shaun C. Kelley:]

I'm wondering if you elaborate a little bit more on online gaming, it's obviously a very hot topic right now. And Patti, I think in the prepared remarks, you mentioned New Jersey. Could you talk a little bit about what product IGT is leading with to get access to New Jersey? Because obviously, you do need to own or partner with somebody who owns a casino there. And specifically, have you actually either signed any agreements or sold any product to get you access to that market?

[Patti S. Hart:]

Yes, I mean, first, we are very excited about New Jersey. It takes tipping points like this to change industries and we think New Jersey will be one. We like New Jersey because it does, also, include casino-style gaming, whereas some of the legislation is poker-only focused today. Our product that we will use in New Jersey is the product that we have been using for 10 years outside the United States in the real money wagering space, which is really the content that we generate and create for the marketplace that leads the market as far as performance. So the market has not matured yet with New Jersey to the point, Shaun, where we're actually -- we're talking to everybody, everybody's talking to everyone. But the first decisions will be to decide which platforms everyone will plug into. And so we will plug our content as we have in the platforms, the platforms that are being considered are platforms we have experience with. So we feel like it will be -- we will be in a position to allow our content to determine our success in that market, which we've been very successful with in other markets.

[Shaun C. Kelley:]

Sorry, but just to be clear, then, when you say content on the one hand, but kind of on another side, again, you kind of have to be a bit of a supplier. I mean, is it more of a classic B2B style or do you think you will have some sort of B2C relationship, somehow, in that market?

[Patti S. Hart:]

I mean, it's our expectation that we'll use the same model we have in Europe, which is to provide our content into the branded infrastructures of our customers. I mean, from a B2C perspective, we build our games on a B2C basis, right? Our games are designed directly to consumers, but the distribution, in this particular case, will be through others that have a full suite of products, since we'll be focused on the casino-style games only and not focused on poker content.

[Shaun C. Kelley:]

I got it. And then just one other one for John. John, the operating expenses, both R&D and total SG&A, did kind of tick up a little bit sequentially. And just kind of curious, is this good run rate going forward for those line items? Or should those -- will those vary a little bit based on kind of more of the timing of sales?

[John Vandemore:]

They ticked up, Shaun, because of a few unusual items in there. We had a little bit of a jump in bad debt. We had some extraordinary costs associated with our recently concluded proxy and we had a slight impairment associated with some properties in Alabama. So there were some unusual items there that would -- they caused it to tick up a bit. We expect it to retrench back to where it was in the first quarter, say, for cost associated with marketing and promoting DoubleDown, where we do engage in some marketing expenses. We'll be in line or probably grow less than the revenue growth that we experienced, as is the case this quarter.

[Operator:]

Our next question comes from Carlo Santarelli with Deutsche Bank.

[Carlo Santarelli:]

Just, John, you mentioned earlier and just to clarify, I thought you said yields coming out of the year would not be flat, i.e., the fourth quarter is likely to be down on a year-over-year basis. And I just wanted to confirm that and then, obviously, I have a follow-up.

[John Vandemore:]

Yes. No. And so our original goal was that by the fourth quarter, we wanted to see at least flat year-over-year yields in the quarter. And while that is still our objective and, as I mentioned, we're initiating a host of activities to drive that, we believe that will be more challenging now. So the guidance we're offering does not reflect achieving that goal.

[Carlo Santarelli:]

Right. Understood. Okay. So at the end of fiscal 2012, I believe the MegaJackpots, as a percentage of your installed base, was a little under 48, 47.5 or so. Could you kind of quantify what that number looks like as of the midway point here of the year?

[John Vandemore:]

So we don't -- I don't think we -- we don't give that precise a guidance. I'd say, we continue to see, within the MegaJackpots category, a shift away from the WAP into the standalone side. And I would say, we've also seen growth in our leased ops. So there's been some dilution of the relative percentage, but not because it's going unextraordinarily so, but leased ops is going up.

[Carlo Santarelli:]

Understood. I guess what I'm trying to get at is, if we go into the fiscal 4Q, obviously your September quarter, and we were to see regional gaming and, obviously, Las Vegas and the markets that you're more levered to, flatten out from a gaming revenue or, more specifically, a slot revenue standpoint, do you guys think, under those circumstances, you would be able to show flattish shields?

[John Vandemore:]

They'd certainly be better than what we have experienced lately in GGR trends. I mean, that's a difficult question to answer simply because we are concentrated with our MegaJackpots base and a handful of select markets. So we need those markets to cooperate as well. I'd certainly say, the characteristics of what you described would offer us a much better chance than what we've seen mature over the last 2 quarters.

[Carlo Santarelli:]

Understood. And then just quickly on the stock buyback in the quarter. Do you guys -- I'm assuming, just given everything that was going on with the proxy, you were blacked out for a long period of time. Could you kind of quantify how much -- how big the window was, actually, in the quarter?

[John Vandemore:]

Yes. So I'd say that we were, during the course of our proxy battle, unable to repurchase shares.

[Operator:]

Our next question comes from Robin Farley with UBS.

[Robin M. Farley:]

My question's already been answered.

[Patti S. Hart:]

All right. Thanks, Robin.

[Operator:]

And our next question comes from Harry Curtis with Nomura Securities.

[Harry C. Curtis:]

Yes, just a couple here. Just following up on Shaun's line of questioning. Do you envision pricing in New Jersey to be similar to your participation pricing in the sense that in order for customers to get your games, then you're probably going to ask for some share of the revenues?

[Patti S. Hart:]

Yes. I mean, the models that we have used in other markets, I would say, Harry, in Europe, as well as in Canada, have all been revenue-participation numbers. And they move around a little bit, I think, depending upon the market, depending upon where we are in the stack and those sorts of things, but they are structured as a percent of the revenue.

[Harry C. Curtis:]

And can you give us a sense of what the range has been in these other markets?

[Patti S. Hart:]

Yes. I think it's not something we typically share. Obviously, they're customer contracts and not something we make public. But they sit in a pretty tight range. They don't move around wildly fluctuation. They sit in a pretty tight range for all content providers.

[John Vandemore:]

And I would say, we certainly feel that the IGT content performance would warrant at the top end of what you see in the range. We've marked -- our content has performed extremely well in Europe. You saw revenue growth of 7% this quarter in our casino product alone. And we believe that we'll require and warrant premium price, the ones, clearly, that allows for both us and our customers to succeed.

[Harry C. Curtis:]

Okay. And then my second question goes back to product sales and the 40% year-over-year increase that you saw there. To what degree do you think the distraction, I guess, of one of your competitors, due to a merger, may have contributed to the outperformance in that segment?

[John Vandemore:]

I mean, I would say, while it's nice to think that we would benefit from that without doing anything, I would attribute the success more to the posture we took in the market, both in terms of being aggressive with customers and meeting their needs, as well as delivering some great game content. We've mentioned Reel Edge, we mentioned Dolly Parton. But we think we've got really good content hitting the market. What we wanted to do is be aggressive by taking wallet while we could because we've seen, over the last couple of years, capital budgets shrink over the course of the year when GGR trends dictate. So I would attribute it much more to our product and the performance of our expert sales force than anything else.

[Harry C. Curtis:]

And management, no doubt.

[John Vandemore:]

Well, thank you. Thank you.

[Patti S. Hart:]

I do think that there wasn't quite enough time in the quarter, I mean, between the announcement of the transaction and the closing of the quarter would have been very difficult to, really, impact shipment in the quarter in that timeframe.

[Operator:]

And our next question comes from Amir Markowitz with Morgan Stanley.

[Amir J. Markowitz:]

I guess, in your domestic installed base here, number of units has kind of declined for the past couple of quarters. Can you talk about your thoughts on that going forward and maybe some products that you have that you kind of feel good about and maybe that can reverse over time?

[Patti S. Hart:]

Yes. I'll add my comments then, John, please add yours. I think that the installed base has really been driven by 3 things. It's been competition, the competition has really invested heavily in this part of the business over the last couple of years. We've made a decision, really, not to throw capital at yields. And so competition is one. The mix shift, as John indicated, the real mix shift from the wider progressive to standalone is happening. And then, GGR trends, which result in contraction, generally, on a floor, not just necessarily for us. We do have some very good products, I think, coming to market. John mentioned the Game Changer product line, which is a very interesting response to, actually, our customer request of really having something that sits somewhere between the higher-end product in game ops and our core sales products. And so this does this. This takes our core sales products in the base game and a bonus in the top box and puts it in a fully participation model. So we think that is a direct response to this void between the high end and the core and what we hear from customers, which is they want something that really sits in that category. We've just started putting CSI in the marketplace. It's getting very good reviews. So continuing to shift that. Family Guy launches here in a couple of weeks. We feel good about what that game looks like going in. I spent yesterday, my lunch hour, in the showroom looking at all the new games that are getting ready to go out and the games look good. I mean, the American Idol Encore game is also just making its way to the floor. So we feel good that we have a nice lineup that then will lead us to what we think will be a very strong lineup for the world to see in Q3.

[John Vandemore:]

I would just add, in addition to Patti's remarks, which I wholly agree with, you did see some floor shutdown and some contraction. Just from down the Strip, we had one go down for remodel and that impacts your base. So to the extent you have those contraction efforts in the marketplace, for whatever reason, they will impact our numbers because we have a lion's share of the floors that are out there, so...

[Amir J. Markowitz:]

Just one follow-up. With your new credit facility and kind of borrowing cost where they are, how do you -- has your thinking about capital returns changed at all?

[John Vandemore:]

No, not really. I think we have anticipated as we've set forth our capital deployment strategy over the last year, achieving not quite this good of a borrowing structure on the facility, but certainly, improvement. And we'll be looking to make improvements elsewhere, as opportunities permit. But no, it doesn't dramatically change our thinking on deployment. I think we're still, obviously, always going to put first dollar on the highest return, internally, to the extent opportunities present themselves. And then from there, we'll look at a balanced approach to returning cash through dividends and repurchase activities, as we've indicated.

[Operator:]

And our next question comes from Barry Jonas with Wells Fargo.

[Barry Jonas:]

Have you commented in terms of how many Canadian VLT units shipped this quarter?

[John Vandemore:]

We have not. We have not yet. We almost got through the whole call without doing so. It was about 3,500 units. And that's the VLT number, mind you.

[Barry Jonas:]

Right. And do you expect you'll finish all those shipments in the remainder of this or some may carry over to next?

[John Vandemore:]

That's -- it's always a bit of a toss-up there. We expect, at the moment, that we should see the vast majority of the remaining units shipped in the year. But keep in mind, these are large bulk orders and depending on either customer needs or other impacts, you can see swings and sometimes the swings border on a quarter. Right now I would say that we believe the vast majority of the remaining shipments will occur in the year. And then there may be some follow-on activity as locations top off their floors in '14.

[Barry Jonas:]

Got it. And can I also get the Illinois number in the quarter?

[John Vandemore:]

Yes, the Illinois number was a bit small, it's under 1,000. We've seen -- and we saw the pace of kind of new authorizations of -- and new licensures slow and that impacted our expectations for the quarter or so. It was in the 500 to 600 unit range, if I remember correctly.

[Operator:]

Our next question comes from Justin Sebastiano with Brean Capital.

[Justin T. Sebastiano:]

Most of the questions have been asked. But I think this was a question that Shaun asked and I'm not sure I heard the answer. But do you actually have an agreement signed with any of the New Jersey casinos for online content?

[Patti S. Hart:]

We do not at this point. It's a content-only deal. So the first round is to secure platform relationships. That's underway. And then once the platform relationships are clear, then the content relationships will be defined at that point.

[Justin T. Sebastiano:]

Okay. And then as far as CSI, Family Guy, American Idol Encore, where are the bulk of these games placed right now? Or where will they be launched? What markets?

[Patti S. Hart:]

Oh, wow. They're kind of everywhere, actually, there's not -- they're in, I would say generally, every market at this point. There are a few that are still pending the compliance clearance, but generally speaking, they're available. So we're just working through the process of actually getting them on the floor.

[Operator:]

And the next question comes from Edward Williams with BMO Capital Markets.

[Thomas Andrews:]

This is Tom Andrews standing in for Edward. You had a nice uptick on the performance of DoubleDown in terms of daily users, monthly users and bookings. Is that the kind of run rate we can expect through the balance of the year? And also, was there anything else driving that performance aside from the addition of IGT content?

[John Vandemore:]

Yes, I'm just, I'm chuckling. I think the accomplishment in the quarter was well above a nice uptick. No offense. Look, we think we have the right product in place, complemented by the IGT content to continue to grow those numbers. I mentioned we're penetrating a couple of different markets with new language offerings. We expect that will drive DAU, though it may slightly impact bookings for daily active users. As you get into a market, you need to build familiarity before you can convert to paying users. It's incredibly difficult to precisely identify which metric is going to go up. I mean, lately, we've seen them all rise and we continue to expect to make forward progress in all. And we will continue to balance that which will provide us the greatest long-term return. So I think you can expect to see them move north. I'm not sure they'll all move forth with the abundance that they drove this quarter. But quite frankly, every key driver we look at in that business has improved, quarter-over-quarter, for at least the last 3 or 4 quarters. And some that we don't even -- I mean, mobile in the quarter was a fantastic growth. And that's before we fully implemented the new mobile product. And I would encourage you all, actually, to take a look at the new mobile product. It isn't completely where we want it to be, but it's vastly improved and will continue to get better. We also have a new slot lobby on Facebook. It allows us to prioritize content and place content in highly marketable page positions. And we think all of that, combined with the continued delivery of IGT content on the side -- and by the way, it's not just slot content now, it's also other rgs-based content in the table games arena and in video poker that's hitting the site. And we that just provides a lot of runway to continue to grow this business, both domestically and now in other language locations.

[Operator:]

Our next question comes from Shaun Kelley with Bank of America.

[Shaun C. Kelley:]

Just one quick follow up, but I don't think it got addressed in anybody else's questions. Patti, the other thing you mentioned in the prepared remarks was, I think, a systemic issue a little bit on the International side. Could you elaborate a little bit on that? Whenever us analysts hear the word systemic, we always get a little bit scared. So just -- could you just tell us a little bit of what's going on there? And then maybe your -- kind of is there a new longer term forecast for where you think kind of the right run rate of growth is for International? I think, previously, you've talked about maybe mid to high single-digit type growth in that area of the business.

[Patti S. Hart:]

First, I didn't mean to scare anyone with the word systemic. We think about it, at IGT, as something that is an impediment in the system that -- part of the system in delivering products that we don't control. So, yes, I'll ask John to...

[John Vandemore:]

Yes, I mean, I think without being terribly specific, for fear of offending any one particular region or country, we have seen some impediments to our ability to import in select markets. That's an issue that we can't control. We certainly try to work through as best we can. We have many markets that actually, if you will, thirst for the content, the games, and we just can't deliver it into the market fast enough because of some of those restrictions. I also think you continue to see some major macro headwinds in other regions, in particular in Europe, that are difficult for us to, as a single company, overcome. What I think we're encouraged by, Shaun, and why I think we continue to believe that long term you do have the opportunity for mid to high single-digit growth, is there is demand for the product and services. We hear about it daily. In fact, we have customers who come to us and ask us to help them get over the hurdles in their own country because they want the product. And I think that level of demand is encouraging to us long term. It's just overcoming the obstacles that arise, that sometimes change, by the way, and almost quarterly, is the challenge we're trying to point out there. And again, we do have faith, long term, the International markets will get us that growth that's above and beyond what we expect domestically.

[Shaun C. Kelley:]

I get it. And I guess, can you just give us maybe a -- can you give us maybe a sense, is it more Asia Pacific, more Latin and South America? Again, I understand you don't want to pick on specific countries, but regionally, it sounds like Europe has kind of got their own issues. But is it more Latin and South America or is it more Asia Pacific?

[John Vandemore:]

Yes, it's really each region has its specific issue. I'd say Europe tend to be more macro. The other 2, as we look at them, probably have more of a systemic issue within the structure of how they allow the business to operate.

[Operator:]

Next question comes from Justin Sebastiano with Brean Capital.

[Justin T. Sebastiano:]

And the Illinois and the Canada numbers you gave were certainly helpful. But overall for the replacements, how much was video poker in total?

[John Vandemore:]

I'm sorry, I don't have that. I would say, it wasn't a substantial element in the period. But we can get that data. I don't have that at my fingertips. Unremarkable, though...

[Patti S. Hart:]

Unremarkable would be the way to describe it, yes.

[Operator:]

Thank you. And I show no further questions.

[Patti S. Hart:]

Great. Well, we want to say thank you for joining us today. Thanks for your good questions and thanks for following the story and your confidence in IGT.

[Operator:]

Thank you. And this concludes today's conference. You may disconnect at this time.