International Game Technology (FRA:IGT) Operating Income : €280 Mil (TTM As of Dec. 2014)

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What is International Game Technology Operating Income?

International Game Technology's Operating Income for the three months ended in Dec. 2014 was €51 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2014 was €280 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. International Game Technology's Operating Income for the three months ended in Dec. 2014 was €51 Mil. International Game Technology's Revenue for the three months ended in Dec. 2014 was €365 Mil. Therefore, International Game Technology's Operating Margin % for the quarter that ended in Dec. 2014 was 14.09%.

International Game Technology's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. International Game Technology's annualized ROC % for the quarter that ended in Dec. 2014 was 5.33%. International Game Technology's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2014 was 45.50%.

International Game Technology Operating Income Historical Data

The historical data trend for International Game Technology's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

International Game Technology Operating Income Chart

International Game Technology Annual Data

Trend

Sep05

Sep06

Sep07

Sep08

Sep09

Sep10

Sep11

Sep12

Sep13

Sep14

Operating Income

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324.12

367.06

327.24

369.59

317.07

International Game Technology Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
Operating Income	Get a 7-Day Free Trial															75.70	52.13	80.67	95.60	51.50

International Game Technology Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2014 adds up the quarterly data reported by the company within the most recent 12 months, which was €280 Mil.

International Game Technology (FRA:IGT) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

International Game Technology's annualized ROC % for the quarter that ended in Dec. 2014 is calculated as:

	ROC % (Q: Dec. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2014 )	+	Invested Capital (Q: Dec. 2014 ))	/ count )
=	205.992 * ( 1 - 32.3% )	/	( (2566.309	+	2667.622)	/ 2 )
=	139.456584	/	2616.9655
=	5.33 %

where

	Invested Capital		(Q: Sep. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	3095.852	-	331.585	-	( 197.958	-	max(0, 422.765	-	947.574	+	197.958	))
=	2566.309

	Invested Capital		(Q: Dec. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	3088.775	-	257.655	-	( 163.498	-	max(0, 352.947	-	886.18	+	163.498	))
=	2667.622

Note: The Operating Income data used here is four times the quarterly (Dec. 2014) data.

2. Joel Greenblatt's definition of Return on Capital:

International Game Technology's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2014 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2014 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2014		Q: Dec. 2014
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	236.812	/	( ( (320.255 + max(170.953, 0))	+	(328.617 + max(220.997, 0)) )	/	2 )
=	236.812	/	( ( 491.208	+	549.614 )	/	2 )
=	236.812	/	520.411
=	45.50 %

where Working Capital is:

	Working Capital		(Q: Sep. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(255.537	+	55.406	+	282.775)	-	(331.585	+	0	+	91.18)
=	170.953

	Working Capital		(Q: Dec. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(227.485	+	58.392	+	288.067)	-	(257.655	+	0	+	95.292)
=	220.997

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2014) EBIT data.

3. Operating Income is also linked to Operating Margin %:

International Game Technology's Operating Margin % for the quarter that ended in Dec. 2014 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2014 )	/	Revenue (Q: Dec. 2014 )
	=	51.498	/	365.437
	=	14.09 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

International Game Technology Operating Income Related Terms

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International Game Technology (FRA:IGT) Business Description

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International Game Technology was incorporated in Nevada in December 1980. It is a gaming Company specializing in the design, development, manufacture, and marketing of casino-style gaming equipment, systems technology, and game content across multiple platforms land-based, online real-money and social gaming. The Company manages operations in two geographic segments namely North America and International. North America consists of operations in the US and Canada and International encompasses its efforts in all other jurisdictions. The Company has two revenue streams within each business segment gaming operations and product sales. It includes the sales of gaming equipment, systems, services, licensing, and component parts in Product Sales. It provides casino games, gaming equipment and systems technology for land-based and online social gaming and wagering markets under for-sale or revenue sharing arrangements. IGT systems products include infrastructure and applications for casino management, customer relationship management, player management, and server-based gaming. Casino management solutions include integrated modules for machine accounting, patron management, cage and table accounting, ticket-in/ticket-out, bonusing, and table game automation. The Company's competitors include Ainsworth Game Technology Ltd, Aristocrat Leisure Limited, Bally Technologies, Inc., Konami Gaming Inc., Novomatic Group of Companies, and WMS Industries, Inc. At September 30, 2013, the Company held approximately 6,000 patents or patent applications and approximately 4,100 trademarks filed and registered around the world. he manufacture and distribution of casino games, gaming equipment, systems technology, and related services, as well as the operation of casinos, is subject to regulation by a variety of federal, state, international, tribal, and local agencies, with the majority of oversight provided by individual state gaming control boards.