LAS VEGAS, July 29, 2014 /PRNewswire/ -- International Game Technology (NYSE: IGT) today reported operating results for the third quarter ended June 30, 2014.

http://photos.prnewswire.com/prnvar/20131003/LA91408LOGO

"July saw the culmination of our process to evaluate strategic alternatives for IGT and our shareholders," said Patti Hart, IGT CEO. "We successfully balanced this effort during the third quarter with our focus on continuous improvement in our business evidenced by expanded gross margins and expected EPS performance. Our effective cost management has improved efficiencies in a challenging industry environment and has positioned us for future market opportunities."

Consolidated Results



                                    Third Quarters                       Nine Months
                                    --------------                       -----------

    Periods Ended June
     30,                  2014                     2013             %               2014 2013                 %

                                                               Change                                  Change
    ---                                                        ------                                  ------

    (In millions, except
     per share amounts)

    GAAP Measures

    Revenue                    $467.6                   $579.0        -19%                    $1,521.6           $1,709.2     -11%

    Operating income            109.6                    123.0        -11%                       285.4              370.7     -23%

    Net income                   72.1                     65.7         10%                       177.1              209.2     -15%

    Earnings per share          $0.29                    $0.25         16%                       $0.71              $0.79     -10%

    Net operating cash
     flows                                                                                     $61.4             $335.2     -82%


    Non-GAAP Measures (1)

    Adjusted operating
     income                    $119.3                   $154.1        -23%                      $350.6             $455.2     -23%

    Adjusted net income          69.3                     86.4        -20%                       181.7              258.1     -30%

    Adjusted earnings per
     share                      $0.28                    $0.33        -15%                       $0.72              $0.97     -26%

    Free cash flow
     (before dividends)                                                                       $(7.7)            $238.1    -103%


    (1) Adjusted operating income, adjusted net
     income, adjusted earnings per share and free
     cash flow are non-GAAP financial measures.
     Reconciliations between GAAP and non-GAAP
     measures are provided at the end of this
     release.

    --  Revenue decreased 19% to $468 million in the third quarter primarily due
        to declines in product sales and gaming operations.
    --  GAAP earnings per share increased 16% to $0.29.
    --  Non-GAAP adjusted financial measures for the third quarter excluded
        acquisition-related charges primarily for DoubleDown and certain
        discrete tax benefits.

Gaming Operations



                              Third Quarters                      Nine Months
                              --------------                      -----------

    Periods Ended
     June 30,     2014                       2013             %               2014 2013               %

                                                         Change                                Change
    ---                                                  ------                                ------

    (In millions,
     unless
     otherwise
     noted)

    Revenue            $217.6                     $247.3        -12%                    $671.0          $744.3    -10%

    Gross profit        135.1                      151.7        -11%                     411.7           461.6    -11%

    Gross margin          62%                       61%         2%                       61%            62%    -2%

    Installed
     base ('000)         50.5                       56.7        -11%                      50.5            56.7    -11%

    Yield
     (average
     revenue per
     unit per day
     -$0.00)           $46.02                     $47.96         -4%                    $46.75          $47.91     -2%

    --  Revenue decreased 12% to $218 million in the third quarter, most
        significantly due to installed base declines and lower yields.
    --  Gross margin increased to 62% from 61% primarily due to mix shift to
        higher-margin lease operations and lower depreciation.
    --  Installed base decreased 11% driven by declines in International largely
        due to lease operation unit conversions and North America MegaJackpots®
        primarily in the standalone category.
    --  Average revenue per unit per day was $46.02, down 4% over the prior year
        quarter, largely due to lower MegaJackpots® performance, and down 2%
        sequentially in line with seasonal trends.

Product Sales



                              Third Quarters                      Nine Months
                              --------------                      -----------

    Periods Ended
     June 30,     2014                       2013             %               2014 2013               %

                                                         Change                                Change
    ---                                                  ------                                ------

    (In millions,
     unless
     otherwise
     noted)

    Revenue            $166.9                     $259.2        -36%                    $613.1          $772.9   -21%

    Gross profit         97.5                      139.9        -30%                     328.3           409.2   -20%

    Gross margin          58%                       54%         7%                       54%            53%    2%

    Machine units
     recognized
     ('000)               7.3                       13.4        -46%                      28.0            38.4   -27%

    Machine
     average
     sales price
     ('000)             $11.9                      $13.3        -11%                     $13.2           $14.0    -6%

    --  Revenue decreased 36% to $167 million in the third quarter, primarily
        due to lower machine unit volume, with the most significant decrease in
        North America replacement units. The current quarter did not include
        Canadian replacement units while the prior year quarter included 3,300
        Canadian replacement units. Also, the current quarter included 400 new
        Illinois units as compared to the prior year quarter that included 1,300
        new Illinois units.
    --  Gross margin increased to 58% from 54% due to a favorable mix of
        higher-margin intellectual property revenue.
    --  Machine average sales price decreased 11% to $11,900. North America
        machine average sales price increased 4% to $12,900 primarily due to
        favorable product mix. International machine average sales price
        decreased 34% largely due to a high volume of lease unit conversions.

Interactive



                                     Third Quarters                      Nine Months
                                     --------------                      -----------

    Periods Ended June
     30,                 2014                       2013             %              2014 2013               %

                                                                Change                               Change
    ---                                                         ------                               ------

    (In millions, unless
     otherwise noted)

    Revenue                    $83.1                      $72.5         15%                   $237.5          $192.0    24%

    Social gaming               71.8                       61.4         17%                    205.4           157.1    31%

    IGTi                        11.3                       11.1          2%                     32.1            34.9    -8%


    Gross Margin                 63%                       63%          -                      62%            61%    2%


    DoubleDown average
     user statistics (1)

    DAU (Daily active
     users) ('000)             1,833                      1,690          8%                    1,774           1,613    10%

    MAU (Monthly active
     users) ('000)             5,975                      6,658        -10%                    6,130           5,950     3%

    Bookings per DAU
     ($0.00)                  $0.43                      $0.40          7%                    $0.42           $0.36    17%


    (1) as a single application with multiple games, active users equal unique users

    --  Social gaming revenue increased 31% to $205 million in the first nine
        months and increased 17% to $72 million in the third quarter, driven by
        increases in average DAU and average bookings per DAU.
    --  Average DAU were 1.8 million, an increase of 8% over the prior year
        quarter.
    --  Average MAU were 6.0 million, a decrease of 10% primarily due to
        increased focus on improving player conversion rates.
    --  Average bookings per DAU were $0.43, an increase of 7% over the same
        quarter last year.

Operating Expenses



                                Third Quarters                      Nine Months
                                --------------                      -----------

    Periods Ended June
     30,               2014                    2013             %              2014 2013                %

                                                           Change                                Change
    ---                                                    ------                                ------

    (In millions)

    Selling, general &
     administrative         $103.3                  $114.4        -10%                   $345.2           $325.0    6%

    Research &
     development              53.4                    59.8        -11%                    172.1            172.3     -

    Depreciation &
     amortization             16.4                    19.3        -15%                     49.7             58.0  -14%

    Contingent
     acquisition-
     related costs             2.2                    19.2        -89%                     17.2             58.6  -71%

    Impairment and
     restructuring               -                    1.5           *                     17.8              3.1     *
                               ---                    ---         ---                     ----              ---   ---

    Total operating
     expenses               $175.3                  $214.2        -18%                   $602.0           $617.0   -2%
                            ======                  ======         ===                    ======           ======   ===


    Adjusted Operating
     Expenses (1)           $168.4                  $185.4         -9%                   $545.6           $534.4    2%


    (1) Adjusted operating expenses is a non-GAAP financial measure.
     Reconciliations between GAAP and non-GAAP measures are provided
     at the end of this release.

    --  The decrease in third quarter total operating expenses was primarily due
        to lower contingent acquisition-related costs and cost savings resulting
        from the March 2014 business realignment.
    --  Selling, general and administrative expenses included an increase in bad
        debt provisions, as the prior year quarter benefited from significant
        bad debt recoveries.
    --  Adjusted operating expenses were 36% of revenue compared to 32% in the
        prior year quarter due to lower total revenue.

Balance Sheet, Cash Flow and Capital Deployment



     (in
      millions)  June 30, 2014         September 30, 2013            %

                                                                  Change
                                                                  ------

    Cash and
     equivalents
     (including
     restricted
     amounts)                   $299.0                     $809.1        -63%

    Working
     capital                     691.1                      267.5        158%

     Contractual
     debt
     obligations               1,925.0                    2,150.0        -10%

    --  Operating cash flow was $127 million in the third quarter on net income
        of $72 million.
    --  Contractual debt obligations decreased $225 million as the company's
        3.25% Convertible Notes matured on May 1, 2014. The notes were paid
        using a combination of borrowings on the revolving credit facility and
        cash on hand.
    --  Outstanding borrowings under the company's revolving credit facility
        were $625 million as of June 30, 2014.
    --  The company returned $27 million to its shareholders through dividends.

Other

References to per share amounts in this release are based on weighted average diluted shares of common stock outstanding, unless otherwise specified.

Outlook

The company is updating its fiscal year 2014 guidance for adjusted earnings from continuing operations to $1.00 to $1.06 per share.

GAAP earnings per share from continuing operations for fiscal year 2014 will include acquisition-related expenses, primarily related to DoubleDown, severance costs, business realignment expenses, asset impairment charges, legal accrual charges, merger-related professional fees and certain discrete tax items or benefits, the amount of which is not determinable at this time. The company may also recognize other items that are not currently determinable, but may be significant. For this reason, the company is unable to provide estimates for full-year GAAP earnings per share from continuing operations at this time.

Earnings Conference Call

There will be no earnings conference call.

Q3 FY 2014 Excel file

Q3 FY 2014 PDF of this press release

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These statements include our expected future financial and operational performance (including our guidance for fiscal year 2014) and our strategic and operational plans. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the results predicted, and reported results should not be considered an indication of future performance. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: general economic conditions and changes in economic conditions affecting the gaming industry; new or changing laws or regulations or new interpretations of existing laws or regulations affecting our business; difficulties or delays in obtaining or maintaining necessary licenses or approvals; slow growth in the number of new gaming jurisdictions or new casinos or the rate of replacement of existing gaming machines; changes in operator or player preferences for our products; our ability to compete in the gaming industry with new or existing competitors; our ability to develop and introduce new products and their acceptance by our customers; risks related to our international operations; our ability to protect our intellectual property; adverse results of litigation, including intellectual property infringement claims; our ability to leverage cost reduction initiatives; risks related to business combinations, investments in intellectual property and the integration of acquisitions; and future developments or changes affecting online gaming or social casino-style gaming, which is a new and evolving industry.

Additional factors relating to the proposed merger transactions with GTECH S.p.A. ("GTECH") include failure to obtain applicable regulatory or securityholder approvals in a timely manner or otherwise; the possibility that the proposed transactions will not close, including by any failure to satisfy closing conditions or a termination of the merger agreement; risks that the businesses of IGT and GTECH will not be integrated successfully or that the combined companies will not realize estimated cost savings, value of certain tax assets, synergies and growth or that such benefits may take longer to realize than expected; failure to realize anticipated benefits of the combined operations of IGT and GTECH; risks relating to unanticipated costs of integration; ability to hire and retain key personnel; and the potential impact of announcement or consummation of the proposed transactions on relationships with third parties, including customers, employees and competitors.

A further list and description of these and other risks, uncertainties and other matters can be found in our annual report and other reports filed with the Securities and Exchange Commission, including under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for fiscal 2013 filed with the SEC on November 26, 2013 and our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2014 filed with the SEC on May 7, 2014 and available on the SEC website at www.sec.gov and on the investor relations section of our website at www.IGT.com/investors. Additional information will also be set forth in our Quarterly Report on Form 10-Q for our fiscal quarter ended June 30, 2014, which we expect to file with the SEC in the third quarter of calendar 2014. All information provided in this release is as of July 29, 2014, and IGT does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances.

Important Information for Investors and Securityholders

This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed merger transactions involving GTECH or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and applicable European regulations. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.

Georgia Worldwide Limited ("NewCo") will file with the SEC a registration statement on Form S-4 or F-4, which will include the proxy statement of IGT that also constitutes a prospectus of NewCo (the "proxy statement/prospectus"). INVESTORS AND SECURITYHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, IN THEIR ENTIRETY CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT IGT, GTECH, NEWCO, THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and securityholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by the parties through the website maintained by the SEC at www.sec.gov. In addition, investors and securityholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC on IGT's website at IGT.com within the "Investor Relations" section or by contacting Investor Relations at 866-296-4232 (for documents filed with the SEC by IGT) or on GTECH's website at gtech.com or by contacting Corporate Communications at 401-392-7452 (for documents filed with the SEC by NewCo).

The release, publication or distribution of this communication in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this communication is released, published or distributed should inform themselves about and observe such restrictions.

Participants in the Distribution

IGT, GTECH and NewCo and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the securityholders of IGT in respect of the proposed transactions contemplated by the proxy statement/prospectus. Information regarding the persons who are, under the rules of the SEC, participants in the solicitation of the securityholders of IGT in connection with the proposed transactions, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement/prospectus when it is filed with the SEC. Information regarding IGT's directors and executive officers is contained in IGT's Annual Report on Form 10-K for the year ended September 28, 2013 and its Proxy Statement on Schedule 14A, dated January 24, 2014, which are filed with the SEC and can be obtained free of charge from the sources indicated above.

IGT Resources:


    --  Like us on Facebook
    --  Play DoubleDown Casino Games
    --  Like DoubleDown Casino on Facebook
    --  Follow us on Twitter
    --  View IGT's YouTube Channel

About IGT

International Game Technology (NYSE: IGT) is a global leader in casino gaming entertainment and continues to transform the industry by translating casino player experiences to social, mobile and interactive environments for markets around the world. IGT's acquisition of DoubleDown Interactive provides engaging social casino style entertainment to approximately 6 million players monthly. More information about IGT is available at IGT.com or connect with IGT at @IGTNews or facebook.com/IGT. Anyone can play at the DoubleDown Casino by visiting http://apps.facebook.com/doubledowncasino or doubledowncasino.com .

IGT Contact:

Kate Pearlman
Vice President, Investor Relations and Treasury
+1 866-296-4232
InvestorRelations@IGT.com


    CONSOLIDATED STATEMENTS OF INCOME (Unaudited and Condensed)


                                                                 Third Quarters                                              Nine Months
                                                                 --------------                                              -----------

    Periods Ended June 30,                                   2014                               2013                                 2014      2013
    ----------------------                                   ----                               ----                                 ----      ----

                                                                              (In millions, except per share amounts)

    REVENUES

    Gaming operations                                                 $217.6                                          $247.3                $671.0     $744.3

    Product sales                                                      166.9                                           259.2                 613.1      772.9

    Interactive                                                         83.1                                            72.5                 237.5      192.0
                                                                        ----                                            ----                 -----      -----

    Total                                                              467.6                                           579.0               1,521.6    1,709.2


    COSTS AND OPERATING
     EXPENSES

    Cost of gaming
     operations                                                         82.5                                            95.6                 259.3      282.7

    Cost of product sales                                               69.4                                           119.3                 284.8      363.7

    Cost of interactive                                                 30.8                                            26.9                  90.1       75.1

    Selling, general and
     administrative                                                    103.3                                           114.4                 345.2      325.0

    Research and
     development                                                        53.4                                            59.8                 172.1      172.3

    Depreciation and
     amortization                                                       16.4                                            19.3                  49.7       58.0

    Contingent
     acquisition-related
     costs                                                               2.2                                            19.2                  17.2       58.6

    Impairment and
     restructuring                                                         -                                            1.5                  17.8        3.1
                                                                         ---                                            ---                  ----        ---

    Total                                                              358.0                                           456.0               1,236.2    1,338.5


    OPERATING INCOME                                                   109.6                                           123.0                 285.4      370.7
                                                                       -----                                           -----                 -----      -----


    OTHER INCOME (EXPENSE)

    Interest income                                                     10.4                                            11.5                  31.2       34.0

    Interest expense                                                  (26.6)                                         (30.5)               (99.9)    (92.4)

    Other                                                                0.7                                           (6.7)                (4.6)     (9.6)
                                                                         ---                                            ----                  ----       ----

    Total                                                             (15.5)                                         (25.7)               (73.3)    (68.0)


    INCOME BEFORE TAX                                                   94.1                                            97.3                 212.1      302.7


    Income tax provision                                                22.0                                            31.6                  35.0       93.5
                                                                        ----                                            ----                  ----       ----


    NET INCOME                                                         $72.1                                           $65.7                $177.1     $209.2
                                                                       =====                                           =====                ======     ======


    EARNINGS PER SHARE

    Basic                                                              $0.29                                           $0.25                 $0.71      $0.79

    Diluted                                                            $0.29                                           $0.25                 $0.71      $0.79


    WEIGHTED AVERAGE
     SHARES OUTSTANDING

    Basic                                                              247.0                                           260.6                 249.1      263.4

    Diluted                                                            247.9                                           263.2                 250.8      265.6



    CONSOLIDATED BALANCE SHEET (Unaudited and Condensed)


                                                         June 30, 2014                September 30, 2013
                                                         -------------                ------------------

                                                                        (In millions)

    ASSETS

    Cash and equivalents                                                 $235.6                            $713.3

    Investment securities                                                     -                             28.8

    Restricted cash and
     investment securities                                                 63.4                              67.0

    Jackpot annuity
     investments                                                           54.2                              56.5

    Receivables, net                                                      510.0                             577.9

    Inventories                                                            89.5                              90.1

    Other assets and deferred
     costs                                                                259.9                             242.4
                                                                          -----                             -----

      Total current assets                                              1,212.6                           1,776.0


    Property, plant and
     equipment, net                                                       435.6                             483.9

    Jackpot annuity
     investments                                                          248.2                             268.6

    Contracts and notes
     receivable, net                                                      116.4                             165.6

    Goodwill and other
     intangible assets, net                                             1,564.8                           1,601.7

    Other assets and deferred
     costs                                                                479.8                             317.0
                                                                          -----                             -----

    TOTAL ASSETS                                                       $4,057.4                          $4,612.8
                                                                       ========                          ========


    LIABILITIES AND
     SHAREHOLDERS' EQUITY

    Short-term debt                                                  $        -                           $826.6

    Accounts payable                                                       83.2                             110.0

    Jackpot liabilities,
     current portion                                                      123.0                             131.7

    Dividends payable                                                      27.2                              25.9

    Other accrued liabilities                                             288.1                             414.3
                                                                          -----                             -----

      Total current liabilities                                           521.5                           1,508.5


    Long-term debt                                                      1,987.7                           1,366.3

    Jackpot liabilities                                                   273.0                             293.3

    Other liabilities                                                     109.8                             190.6
                                                                          -----                             -----

    TOTAL LIABILITIES                                                   2,892.0                           3,358.7


    TOTAL EQUITY                                                        1,165.4                           1,254.1
                                                                        -------                           -------

    TOTAL LIABILITIES AND
     SHAREHOLDERS' EQUITY                                              $4,057.4                          $4,612.8
                                                                       ========                          ========



    CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited and Condensed)


    Nine Months Ended
     June 30,                                               2014              2013
    -----------------                                       ----              ----

                                                                (In millions)

    OPERATING

    Net income                                                       $177.1          $209.2


    Adjustments:

    Depreciation and
     amortization                                                     145.2           175.6

    Acquisition-
     related
     contingent earn-
     out costs                                                          8.8            28.0

    Other non-cash
     items                                                             70.8            74.6


    Changes in
     operating assets
     and liabilities,
     excluding
     acquisitions:

    Receivables                                                        87.0          (20.7)

    Inventories                                                       (0.9)            3.7

    Accounts payable
     and accrued
     liabilities                                                    (115.9)         (58.7)

    Jackpot
     liabilities                                                     (41.3)         (58.2)

    Income taxes, net
     of employee stock
     plans                                                           (48.5)         (25.5)

    Other assets and
     deferred costs                                                 (220.9)            7.2
                                                                     ------             ---

    Net operating cash
     flows                                                             61.4           335.2
                                                                       ----           -----


    INVESTING

    Capital
     expenditures                                                    (69.1)         (97.1)

    Proceeds from
     assets sold                                                       16.7            15.3

    Investment
     securities, net                                                   28.9               -

    Jackpot annuity
     investments, net                                                  34.6            39.3

    Changes in
     restricted cash                                                    3.8             8.8

    Loans receivable,
     net                                                                9.0            22.6

    Business
     acquisitions, net
     of cash acquired                                                 (1.5)              -
                                                                       ----             ---

    Net investing cash
     flows                                                             22.4          (11.1)
                                                                       ----           -----


    FINANCING

    Debt-related
     proceeds
     (payments), net                                                (225.6)        (143.2)

    Employee stock
     plan proceeds                                                     13.7            13.7

    Share repurchases,
     including net
     shares                                                         (211.4)         (81.0)

    Dividends paid                                                   (80.5)         (55.5)

    Acquisition-
     related
     contingent
     consideration                                                   (56.1)         (27.9)
                                                                      -----           -----

    Net financing cash
     flows                                                          (559.9)        (293.9)
                                                                     ------          ------


    FOREIGN EXCHANGE
     RATES EFFECT ON
     CASH AND
     EQUIVALENTS                                                      (1.6)          (7.2)
                                                                       ----            ----


    NET CHANGE IN CASH
     AND EQUIVALENTS                                                (477.7)           23.0


    BEGINNING CASH AND
     EQUIVALENTS                                                      713.3           206.3
                                                                      -----           -----


    ENDING CASH AND
     EQUIVALENTS                                                     $235.6          $229.3
                                                                     ======          ======



    SUPPLEMENTAL DATA (Unaudited)

    Revenue Metrics

                                                                                                      Nine Months

                                                          Third Quarters
                                                          --------------

    Periods Ended June 30,                             2014                                2013                  2014        2013
    ----------------------                             ----                                ----                  ----        ----

                                                            (In millions, unless otherwise noted)

    GAMING OPERATIONS
    -----------------

    Revenues                                                             $217.6                                       $247.3      $671.0 $744.3

    North America                                                         189.9                                        214.1       581.7  643.0

    International                                                          27.7                                         33.2        89.3  101.3

    Gross margin                                                            62%                                         61%        61%   62%

    North America                                                           61%                                         60%        59%   61%

    International                                                           71%                                         69%        74%   69%

    Installed base (units '000)                                            50.5                                         56.7        50.5   56.7

    North America                                                          39.3                                         42.5        39.3   42.5

    International                                                          11.2                                         14.2        11.2   14.2

    Yield (average revenue per
     unit per day -$0.00)                                                $46.02                                       $47.96      $46.75 $47.91


    PRODUCT SALES
    -------------

    Revenues                                                             $166.9                                       $259.2      $613.1 $772.9

    North America                                                         111.1                                        184.7       425.0  544.2

    International                                                          55.8                                         74.5       188.1  228.7

    Machines                                                              $87.2                                       $177.9      $370.1 $537.8

    North America                                                          51.6                                        123.5       248.8  374.1

    International                                                          35.6                                         54.4       121.3  163.7

    Non-machine                                                           $79.7                                        $81.3      $243.0 $235.1

    North America                                                          59.5                                         61.2       176.2  170.1

    International                                                          20.2                                         20.1        66.8   65.0

    Gross margin                                                            58%                                         54%        54%   53%

    North America                                                           62%                                         56%        56%   55%

    International                                                           52%                                         50%        48%   49%

    Machine units recognized
     ('000)                                                                 7.3                                         13.4        28.0   38.4

    North America                                                           4.0                                         10.0        19.3   28.3

    International                                                           3.3                                          3.4         8.7   10.1

    Machine units shipped
     ('000) [includes units
     where revenues deferred]                                               7.1                                         13.6        27.7   37.2

    North America                                                           4.0                                         10.3        19.3   28.3

    New                                                                     1.4                                          2.5         7.2    6.9

    Replacement                                                             2.6                                          7.8        12.1   21.4

    International                                                           3.1                                          3.3         8.4    8.9

    New                                                                     0.3                                          0.9         1.5    2.7

    Replacement                                                             2.8                                          2.4         6.9    6.2

    Machine ASP ('000)                                                    $11.9                                        $13.3       $13.2  $14.0

    North America                                                          12.9                                         12.4        12.9   13.2

    International                                                          10.7                                         16.1        13.9   16.2


    INTERACTIVE
    -----------

    Revenues                                                              $83.1                                        $72.5      $237.5 $192.0

    North America                                                          73.7                                         62.2       209.7  158.8

    International                                                           9.4                                         10.3        27.8   33.2

    Social Gaming                                                          71.8                                         61.4       205.4  157.1

    North America                                                          71.8                                         61.4       205.4  157.1

    International                                                             -                                           -          -     -

    IGTi                                                                   11.3                                         11.1        32.1   34.9

    North America                                                           1.9                                          0.8         4.3    1.7

    International                                                           9.4                                         10.3        27.8   33.2

    Gross margin                                                            63%                                         63%        62%   61%

    North America                                                           63%                                         63%        62%   62%

    International                                                           65%                                         65%        61%   58%

    DoubleDown average user statistics [as a single application with multiple games, active users equal unique users]

    DAU (daily active users)
     ('000)                                                               1,833                                        1,690       1,774  1,613

    MAU (monthly active users)
     ('000)                                                               5,975                                        6,658       6,130  5,950

    Bookings per DAU ($0.00)                                              $0.43                                        $0.40       $0.42  $0.36


    Reconciliations of GAAP to Non-GAAP Adjusted Financial Measures

    (in millions, except EPS)


    Third Quarter Ended June                        Cost of               Cost of           Operating  Operating       Net
     30, 2014                                       Product             Interactive         Expenses    Income      Earnings
                                                     Sales                                                             (a)          Diluted EPS
    ------------------------                       --------            ------------        ---------- ----------   ---------        -----------


    GAAP measures                                                $69.4               $30.8                  $175.3           $109.6                 $72.1       $0.29

    % of revenue                                                                                             37%             23%


    Acquisition-related
     charges: (b)

    Contingent retention &
     earn-out                                                        -                  -                  (2.2)             2.2                   1.5        0.01

    Amortization of intangibles                                  (0.1)              (2.7)                  (3.4)             6.2                   4.2        0.02


    Merger-related
     professional fees                                               -                  -                  (1.3)             1.3                   0.9           -

    Certain discrete tax items
     (benefits)                                                      -                  -                      -               -                (9.4)     (0.04)
                                                                   ---                ---                    ---             ---                 ----       -----

    Total non-GAAP adjustments                                   (0.1)              (2.7)                  (6.9)             9.7                 (2.8)     (0.01)


    Adjusted measures                                            $69.3               $28.1                  $168.4           $119.3                 $69.3       $0.28

    % of revenue                                                                                             36%             26%


    Third Quarter Ended  Cost of          Cost of           Operating  Operating       Net
     June 30, 2013       Product        Interactive         Expenses    Income      Earnings
                          Sales                                                        (a)           Diluted EPS
    ------------------- --------       ------------        ---------- ----------   ---------         -----------


    GAAP measures                $95.6               $26.9                  $214.2            $123.0               $65.7   $0.25

    % of revenue                                                             37%              21%


    Acquisition-
     related charges:
     (b)

    Contingent
     retention & earn-
     out                             -                  -                 (19.2)             19.2                12.8    0.05

    Amortization of
     intangibles                     -              (2.3)                  (4.4)              6.7                 4.4    0.02


    Proxy Fees                       -                  -                  (3.7)              3.7                 2.5    0.01

    Building impairment              -                  -                  (1.5)              1.5                 1.0       -
                                   ---                ---                   ----               ---                 ---     ---

    Total non-GAAP
     adjustments                     -              (2.3)                 (28.8)             31.1                20.7    0.08


    Adjusted measures            $95.6               $24.6                  $185.4            $154.1               $86.4   $0.33

    % of revenue                                                             32%              27%


    (a) Adjustments tax effected at 33%;  (b)
     Primarily DoubleDown


    Nine Months Ended   Product           Cost of          Cost of    Cost of      Operating           Operating           Net Earnings
     June 30, 2014       Sales            Gaming           Product  Interactive    Expenses             Income                  (a)
                        Revenue         Operations           Sales                                                                      Diluted EPS
    -----------------  --------        -----------        -------- -----------    ----------          ----------          ------------  -----------


    GAAP measures               $613.1             $259.3                  $284.8               $90.1                $602.0                       $285.4       $177.1         $0.71

    % of revenue                                                                                                    40%                         19%


    Acquisition-
     related charges:
     (b)

    Contingent
     retention & earn-
     out                             -                 -                      -                  -               (17.2)                        17.2         11.5          0.04

    Amortization of
     intangibles                     -                 -                  (0.1)              (8.1)               (10.2)                        18.4         12.3          0.05


    Merger-related
     professional fees               -                 -                      -                  -                (1.3)                         1.3          0.9             -

    Business
     realignment                     -                 -                      -                  -               (16.5)                        16.5         11.0          0.05

    Alabama note
     impairment                      -                 -                      -                  -                (1.3)                         1.3          0.9             -

    Legal accrual                    -                 -                      -                  -                (7.8)                         7.8          5.2          0.02

    Severance                        -             (0.6)                      -                  -                (2.1)                         2.7          1.8          0.01

    Certain discrete
     tax items
     (benefits)                      -                 -                      -                  -                    -                           -      (39.0)       (0.16)
                                   ---               ---                    ---                ---                  ---                         ---       -----         -----

    Total non-GAAP
     adjustments                     -             (0.6)                  (0.1)              (8.1)               (56.4)                        65.2          4.6          0.01


    Adjusted measures           $613.1             $258.7                  $284.7               $82.0                $545.6                       $350.6       $181.7         $0.72

    % of revenue                                                                                                    36%                         23%



    Nine Months Ended   Product           Cost of          Cost of    Cost of      Operating           Operating           Net Earnings
     June 30, 2013       Sales            Gaming           Product  Interactive    Expenses             Income                  (a)
                        Revenue         Operations           Sales                                                                      Diluted EPS
    -----------------  --------        -----------        -------- -----------    ----------          ----------          ------------  -----------


    GAAP measures               $772.9             $282.7                  $363.7               $75.1                $617.0                       $370.7      $209.2         $0.79

    % of revenue                                                                                                    36%                         22%


    Acquisition-
     related charges:
     (b)

    Contingent
     retention & earn-
     out                             -                 -                      -                  -               (58.6)                        58.6        39.1          0.14

    Amortization of
     intangibles                     -                 -                      -              (6.9)               (13.3)                        20.2        13.5          0.05


    Proxy Fees                       -                 -                      -                  -                (7.6)                         7.6         5.1          0.02

    Impairment                       -                 -                      -                  -                (3.1)                         3.1         2.1          0.01

    Royalty settlement           (5.0)                 -                      -                  -                    -                       (5.0)      (5.0)       (0.02)

    Certain discrete
     tax items
     (benefits)                      -                 -                      -                  -                    -                           -      (5.9)       (0.02)
                                   ---               ---                    ---                ---                  ---                         ---       ----         -----

    Total non-GAAP
     adjustments                 (5.0)                 -                      -              (6.9)               (82.6)                        84.5        48.9          0.18


    Adjusted measures           $767.9             $282.7                  $363.7               $68.2                $534.4                       $455.2      $258.1         $0.97

    % of revenue                                                                                                    31%                         27%


    (a) Adjustments tax effected at 33%, except
     no tax effect on royalty settlement; (b)
     Primarily DoubleDown


                       Third Quarters            Nine Months
                       --------------            -----------

    Adjusted EBITDA
     For The Periods
     Ended June 30,  2014             2013             2014     2013
    ---------------- ----             ----             ----     ----


    GAAP Net income           $72.1         $65.7            $177.1  $209.2

    Other (income)
     expense, net              15.5          25.7              73.3    68.0

    Income tax
     provision                 22.0          31.6              35.0    93.5

    Depreciation and
     amortization              45.8          57.8             145.2   175.6


    Other charges:

    Share-based
     compensation               6.6          10.1              23.1    28.7

    Contingent
     acquisition-
     related costs              2.2          19.2              17.2    58.6

    Impairment                    -          1.5              17.8     3.1
                                ---          ---              ----     ---

    Adjusted EBITDA          $164.2        $211.6            $488.7  $636.7
                             ======        ======            ======  ======


    Free Cash Flow For The Nine
     Months Ended June 30,        2014         2013
    ---------------------------   ----         ----


    GAAP net operating cash flows        $61.4       $335.2

    Investment in property, plant
     and equipment                      (20.5)      (18.7)

    Investment in gaming
     operations equipment               (45.8)      (78.1)

    Investment in intellectual
     property                            (2.8)       (0.3)
                                          ----         ----

    Free Cash Flow (before
     dividends)                          (7.7)       238.1

    Dividends paid                      (80.5)      (55.5)
                                         -----        -----

    Free Cash Flow (after
     dividends)                        $(88.2)      $182.6
                                        ======       ======


    We believe that certain non-GAAP
     financial measures, when presented in
     conjunction with comparable GAAP
     (Generally Accepted Accounting
     Principles) measures, are useful
     because that information is an
     appropriate measure for evaluating our
     operating performance. Non-GAAP
     information is used to evaluate
     business performance and management's
     effectiveness. These measures should
     be considered in addition to, not as a
     substitute for, or superior to,
     measures of financial performance
     prepared in accordance with GAAP. Non-
     GAAP financial measures may not be
     calculated in the same manner by all
     companies and therefore may not be
     comparable.
    ---------------------------------------

Logo - http://photos.prnewswire.com/prnh/20131003/LA91408LOGO

SOURCE International Game Technology