Scientific Games Announces Second Quarter 2009 Results

Net Income per Diluted Share of $0.22

NEW YORK, July 30 /PRNewswire-FirstCall/ -- Scientific Games Corporation
(Nasdaq: SGMS) today reported second quarter 2009 results.

Key Highlights
-- Generated $46 million of Free Cash Flow in the second quarter of 2009 and
$74 million year-to-date
-- Improved our liquidity and debt maturity profile by issuing $225 million of
Senior Subordinated Notes due 2019, deferring a portion of the Global Draw
earn-out payment, and repurchasing nearly $100 million of outstanding debt
during the quarter
-- Achieved over $6 million of Profitability Improvement Program savings in
the second quarter of 2009 and $11 million year-to-date; remain on target to
achieve expected full-year savings of $15 - $20 million
-- Second quarter 2009 gross margin improved to 43% compared to 40% in the
second quarter of 2008 and 39% in the first quarter of 2009
-- China Sports Lottery instant ticket retail sales grew 38% to $684 million
in the second quarter of 2009 from $495 million in the second quarter of 2008
-- Amended existing agreement with Puerto Rico to include instant tickets,
cooperative services and two optional two-year extensions
-- Awarded U.S. lottery sports wagering system contract with the Delaware
Lottery and the primary instant ticket vendor contract by the Massachusetts
Lottery
-- Global Draw grew its installed terminal base to 15,957 and was awarded new
contracts in the United Kingdom and the Caribbean
-- Successfully converted the Pennsylvania Lottery's online terminal network
to our new state-of-the-art IP-based communications network
-- Signed an agreement to accelerate the termination of our lottery systems
contract in Mexico

Second Quarter 2009 Results

Second quarter 2009 revenue was $225.0 million compared to $306.0 million in
the second quarter of 2008. The decline in year-over-year revenue was
primarily attributable to $25.1 million of lower hardware and software sales
in the Company's Lottery Systems and Diversified Gaming Groups, $15.5 million
from the negative impact of foreign exchange rates, $12.7 million from the
impact of operating under the revised terms of previously announced lottery
contract awards, $11.6 million due to China instant tickets now being produced
in China by our joint venture, a $9.2 million decline in sales in our licensed
properties division, and a $6.2 million decline in phone card sales. These
declines were partially offset by $4.6 million of higher sales in Italy, $4.6
million of constant currency growth in the Company's Global Draw and Games
Media units, and a $2.5 million increase in instant ticket validation revenue
in China.

Gross profit margin in the second quarter of 2009 was 43% compared to 40% in
the second quarter of 2008 and 39% in the first quarter of 2009. The
year-over-year increase in gross margin was primarily attributable to the
successful launch of local instant ticket production in China, lower but more
profitable Lottery Systems sales, and $4.2 million of savings related to the
Company's previously announced Profitability Improvement Program.

In the second quarter of 2009, the Company's selling, general and
administrative expenses declined to $39.1 million from $49.1 million in the
second quarter of 2008. The year-over-year decline in selling, general and
administrative expenses was primarily related to $2.6 million of savings
related to the Company's Profitability Improvement Program, $2.5 million of
lower incentive compensation expense, $3.3 million of non-recurring items
reported in the second quarter of 2008, and $1.0 million from a favorable
impact of foreign exchange rates, offset by $1.0 million of non-recurring
items in the second quarter of 2009.

Adjusted EBITDA for the second quarter of 2009 was $80.6 million compared to
$104.0 million in the second quarter of 2008. The year-over-year decline in
adjusted EBITDA was primarily related to the above mentioned factors and lower
equity in earnings of joint ventures, which is primarily the result of a
negative impact of foreign exchange rates. Adjusted EBITDA margin in the
second quarter of 2009 was 36%, compared to 34% in both the second quarter of
2008 and the first quarter of 2009.

Net income in the second quarter of 2009 was $20.3 million or $0.22 per
diluted share, down from net income of $25.8 million or $0.27 per diluted
share in the second quarter of 2008. In addition to the items mentioned above,
the year-over-year decline in net income in the second quarter of 2009 was
attributable to higher interest expense related to the May 2009 issuance of
9.25% Senior Subordinated Notes and the June 2008 debt refinancing, partially
offset by lower depreciation expense and a lower effective tax rate. The
decline in the effective tax rate in the second quarter of 2009 was primarily
the result of the release of certain tax reserves related to tax settlements
reached during the quarter. Non-GAAP adjusted net income for the second
quarter of 2009 was $24.3 million or $0.26 per diluted share, compared to
$37.8 million or $0.40 per diluted share in the second quarter of 2008.

Free cash flow, defined as net cash provided by operations less total capital
expenditures, was $46.4 million in the second quarter of 2009, compared to
$16.9 million in the second quarter of 2008. The year-over-year improvement
in free cash flow was primarily related to lower working capital requirements
and lower total capital expenditures.

For the six months ended June 30, 2009, revenue was $455.7 million as compared
to $563.0 million for the six months ended June 30, 2008. Gross profit margin
was flat in the first six months of 2009 as compared to the same period in
2008 at 41% as the year-over-year improvement in gross margin in the second
quarter of 2009 was offset by lower year-over-year gross margin in the first
quarter of 2009. Adjusted EBITDA in the first six months of 2009 declined to
$155.9 million from $193.9 million in the first six months of 2008. Adjusted
EBITDA margin was flat as compared to the same period in 2008 at 34%. Net loss
for the six months ended June 30, 2009 was $4.8 million or $0.05 per share,
compared to net income of $42.4 million or $0.45 per diluted share for the
same period in 2008. Non-GAAP adjusted net income for the six months ended
June 30, 2009 was $45.3 million or $0.48 per diluted share as compared to
$66.3 million or $0.70 per diluted share for the six months ended June 30,
2008. Free cash flow for the first six months of 2009 was $74.4 million as
compared to negative $8.7 million for the same period in 2008.

Joe Wright, Chief Executive Officer of the Company, commented, "At the
beginning of the year, we announced that we were going to undertake a
substantial effort to reduce costs and increase margin and free cash flow, and
as you can see from our second quarter results we've done exactly that.
Year-to-date, we have now achieved $11.3 million of savings related to the
Profitability Improvement Program, and we believe we are on track to achieve
our 2009 goal of $15 - $20 million. Furthermore, we continue to make good
progress on our goal to save another $15 - $20 million in 2010 from our
procurement initiatives that are in process. Also, we experienced both gross
margin and EBITDA margin growth during the quarter. Lastly, in the first half
of the year we have used our free cash flow to repurchase our debt, which we
believe is an efficient use of our cash and now puts us in the position to
pursue future growth opportunities."

Consorzio Loterie Nazionali Update

On July 1, 2009, the Italian government promulgated a decree, subject to
legislative prerogatives, outlining terms for a tender process involving the
Italian instant ticket concession. The decree also provides for potential
extension of the existing contract to January 2012. Through our consortium in
Italy, we are proud to have assisted our customer in growing instant ticket
sales from approximately euro 200 million in 2003 to euro 9.2B in 2008. In
preparing for the potential bid, the Company and the other consortium members
have developed a memorandum of understanding to participate in a tender
together.

Printed Products Group

In the second quarter of 2009, Printed Products Group revenue, which
represented 51% of the Company's total revenue, was $114.9 million as compared
to $155.3 million in the second quarter of 2008. The decline in revenue was
primarily attributable to a decrease of $11.6 million from China instant
tickets now being produced in China by our joint venture, a $9.2 million
decline in revenue from our licensed properties division, $6.2 million from
the impact of operating under the revised terms of previously announced
contract awards, a $6.2 million decline in phone card sales, $4.7 million from
the negative impact of foreign exchange rates, and $2.0 million of lower
revenue from our new contract in the U.K. The decline was partially offset by
a $4.6 million year-over-year increase in instant ticket sales to Italy.

Printed Products Group gross profit margin in the second quarter of 2009 was
41%, which is an improvement from 40% in the second quarter of 2008 and 39% in
the first quarter of 2009. The year-over-year improvement in gross profit
margin in the second quarter of 2009 from the second quarter of 2008 was due
to savings of $3.2 million related to the Company's Profitability Improvement
Program and reduced operating costs. The year-over-year improvement in gross
margin was also partially attributable to the successful launch of our joint
venture's instant ticket printing operations in China in December of 2008.

Printed Products Group adjusted EBITDA in the second quarter of 2009 was $37.3
million compared to $47.2 million in the second quarter of 2008. The
year-over-year decline in adjusted EBITDA was primarily attributable to the
above-mentioned factors, partially offset by $1.0 million of selling, general
and administrative expense savings related to the Company's Profitability
Improvement Program.

Wright commented, "Despite the weak U.S. retailing environment, second quarter
domestic instant ticket retail sales were essentially flat year-over-year.
This is quite an achievement and is a testament to the resiliency of the
instant ticket business, which represents over half of our revenue and EBITDA.
We are encouraged by the results to date and the proactive measures taken by
several of our customers to grow revenue and the considerable success they are
achieving in this challenging economic environment. We continue to believe
the current business environment will create opportunities for us to work
closely with our customers to increase their revenue and provide relief to
their growing budget deficits."

On July 15, 2009, the Company amended its online lottery system and marketing
contracts with Loteria Electronica de Puerto Rico to include the supply of
instant tickets and cooperative services for the remainder of the lottery
systems contract through 2012 with options to extend for two additional
two-year periods. The Company will now handle the manufacturing and
distribution of instant tickets throughout Puerto Rico, including shipping,
warehousing, telemarketing, distribution, advising on game design and
marketing issues, and provide support on retail network optimization and
expansion.

Lottery Systems Group

In the second quarter of 2009, Lottery Systems Group revenue, which
represented 26% of the Company's total revenue, was $59.1 million compared to
$85.8 million in the second quarter of 2008. The decrease in revenue was
primarily attributable to $18.9 million of lower hardware and software sales,
$6.5 million from the impact of operating under the revised terms of
previously announced contract awards, $2.6 million from the negative impact of
foreign exchange rates, and $1.4 million from the loss of the South Carolina
online contract. The decrease in revenue was partially offset by a $2.5
million increase in instant ticket validation revenue in China.

Lottery Systems Group gross profit margin was 49% in the second quarter of
2009 as compared to 39% in the second quarter of 2008 and 38% in the first
quarter of 2009. The year-over-year increase in gross margin was primarily
attributable to an increase in instant ticket validation revenue in China,
improved margin from Lottery Systems sales revenue, and $0.7 million of
savings related to the Profitability Improvement Program.

Lottery Systems Group adjusted EBITDA in the second quarter of 2009 was $21.9
million as compared to $25.7 million in the second quarter of 2008. The
year-over-year decline in adjusted EBITDA was attributable to the
above-mentioned factors, partially offset by $2.0 million of savings related
to the Profitability Improvement Program.

"The introduction of the new 20 RMB instant ticket price point drove retail
sales for the China Sports Lottery to record levels in the second quarter. We
are very pleased that the China Sports Lottery has chosen to introduce the
higher price point and remain enthusiastic about the prospects for this early
stage lottery market and operation," commented Michael Chambrello, the
Company's President and Chief Operating Officer.
On July 29, 2009, the Company announced that it had been awarded the contract
to operate the Delaware State Lottery Sports Wagering System and Bookmaking
Services, which includes a statewide network of lottery sports wagering
terminals at the three racetracks (racinos), connected through a central
processing system, with supporting sports bookmaking services. The system
will provide communications, monitoring, sports book risk management, and
accounting services for the lottery sports wagering operation. The Company
was chosen with the highest point total in all categories in a competitive
procurement process. The contract begins in the third quarter of this year,
will have an initial term of six years, and will provide for four one-year
extension options. Expected revenues to the Company depend on the form of
wagers the Lottery offers, one of which has been challenged by the
professional sports leagues and NCAA through a lawsuit filed on July 24, 2009.

On June 30, 2009, the Company and its Lottery Systems Group customer in Mexico
entered into a series of agreements that accelerated the termination of their
contract from October 1, 2009 to July 31, 2009 and transferred the system and
responsibility for its operation to the customer. The customer agreed to
purchase the Company's remaining lottery assets located in Mexico for $3.0
million plus a value added tax and the potential for additional compensation
if net sales exceed a predetermined level. Separately, the Company entered
into a four-year licensing agreement for its lottery system software that
provides for revenue based on a percentage of the retail lottery sales
generated by the customer above a defined minimum level.

Diversified Gaming Group

In the second quarter of 2009, Diversified Gaming Group revenue, which
represented 23% of the Company's total revenue, was $51.0 million compared to
$64.8 million in the second quarter of 2008. The decrease in revenue was
primarily attributable to $8.1 million from the negative impact of foreign
exchange rates, $6.2 million of lower terminal and content sales revenue, and
a $2.9 million decline in handle in the Company's Racing and Venue Management
divisions. The decrease in revenue was partially offset by constant currency
growth in the Global Draw and Games Media units.

Diversified Gaming Group gross profit margin was 39% in the second quarter of
2009 compared to 43% in the second quarter of 2008 and 38% in the first
quarter of 2009. The year-over-year decline in gross margin was primarily
attributable to the second quarter of 2008 including a high margin content
sale and a decline in racing handle.

Diversified Gaming Group adjusted EBITDA in the second quarter of 2009 was
$14.9 million as compared to $23.1 million in the second quarter of 2008. The
year-over-year decline in adjusted EBITDA was attributable to the
above-mentioned factors.

In the second quarter of 2009, Global Draw's installed terminal base grew to
15,957 as the division successfully placed 502 new terminals during the
quarter. The growth in Global Draw's terminal installed base was primarily
attributable to incremental placements in the U.K. and international expansion
in Mexico, Puerto Rico, Barbados, Malta, and Slovakia.

On July 3, 2009, Global Draw entered into an agreement with Ladbrokes to
supply 296 server-based gaming terminals to 78 of Ladbrokes' betting shops
across the U.K. for three years. This is the first time Global Draw and
Ladbrokes have worked together to provide gaming machines to betting shop
customers. In addition, on July 10, 2009, Global Draw entered into an
agreement to extend its terminal footprint in William Hill betting shops.

Games Media's installed terminal base grew to 2,312 in the second quarter of
2009 at almost 1,000 pubs as the division successfully placed 475 new
terminals during the quarter. The increase was a result of new contract
awards and incremental growth on existing contracts. We believe the
flexibility and speed of the Games Media system was demonstrated as a
substantial portion of the installed terminal base was converted to higher
stakes and prize limits upon the implementation of new stakes and prizes
legislation on June 10, 2009.

Chambrello commented, "Global Draw and Games Media's additional terminal
placements with the largest U.K. betting shop and pub operators, respectively,
further demonstrates their superior performance and success in growing our
customers' revenue. We believe their success in the U.K. can be replicated in
other wide area gaming environments and anticipate further international
expansion going forward."

Liquidity and Capital Resources

Free cash flow in the second quarter of 2009 was $46.4 million as compared to
$16.9 million in the second quarter of 2008. The increase in free cash flow
during the quarter was primarily the result of a $6.0 million improvement in
net cash provided by operating activities, which was primarily the result of a
$6.0 million increase in the Company's dividend from Consorzio Loterie
Nazionali, the Company's instant ticket joint venture in Italy, lower working
capital requirements, and a $20.2 million decline in total capital
expenditures. During the second quarter of 2009, the Company's total capital
expenditures were $33.7 million compared to $53.9 million in the second
quarter of 2008. The decline in total capital expenditures was primarily the
result of a $20.9 million decline in wagering systems expenditures.

In May 2009, the Company's subsidiary, Scientific Games International, Inc.,
completed an offering of $225.0 million in aggregate principal amount of 9.25%
Senior Subordinated Notes due 2019 and received net proceeds of $212.0 million
after the original issue discount and fees and expenses. The Company intends
to use the net proceeds from this offering for general corporate purposes,
including the repurchase, through open market purchases or otherwise, of a
portion of our outstanding indebtedness.

During the second quarter of 2009, under the previously announced debt
repurchase programs, the Company repurchased $84.4 million in aggregate
principal amount of its 0.75% Convertible Senior Subordinated Debentures due
2024 (the "Convertible Debentures") and $12.9 million in aggregate principal
amount of its 6.25% Senior Subordinated Notes due 2012 (the "2012 Notes"). As
of June 30, 2009, the Company had net indebtedness of $1,134.2 million,
compared to $1,098.8 million on December 31, 2008. Subsequent to the quarter,
the Company repurchased $26.8 million in aggregate principal amount of its
Convertible Debentures. On July 30, 2009, there was $115.6 million in
aggregate principal amount of Convertible Debentures outstanding.

At June 30, 2009, the Company had cash and cash equivalents of $234.8 million
and availability of $199.4 million under its senior secured revolving credit
facility, after outstanding letters of credit, for a total of $434.2 million
of available liquidity.

As previously announced, during the second quarter of 2009, the Company
entered into an agreement with the principal selling shareholder and key
management of Global Draw related to the earn-out and contingent bonuses that
were payable to them in connection with the Company's 2006 acquisition. Based
on the performance of the business, the total amount payable was determined to
be approximately 60.6 million pounds Sterling, of which approximately 30.5
million pounds was paid during the second quarter of 2009. Approximately 28.1
million pounds of the total amount payable was deferred under the terms of
two-year, unsecured promissory notes issued by certain of the Company's
foreign subsidiaries (and guaranteed by the Company and certain of its U.S.
subsidiaries). The earn-out balance of approximately 2.0 million pounds is
scheduled to be paid by September 30, 2009.

During the second quarter of 2009, the Company refinanced RMB 130 million, or
approximately $19.0 million, of bank debt incurred in China to develop its
instant ticket validation system. Such debt will mature in the second quarter
of 2010.

Jeff Lipkin, Chief Financial Officer of the Company, commented, "The strong
free cash flow generated in the first half of the year, combined with our debt
financing in May 2009 and the deferral of a portion of the Global Draw
earn-out payment, substantially improved our maturity profile and liquidity
and allowed us to repurchase $144.3 million of debt. We expect to continue to
consider opportunities to further reduce debt as well as pursue attractive
growth opportunities going forward."

Convertible Debentures

A market price event did not occur for the quarter ended June 30, 2009 and,
accordingly, the Convertible Debentures are not convertible during the current
quarter ending September 30, 2009. During the second quarter of 2009, the
average price of the Company's common stock was lower than the conversion
price of the Convertible Debentures. Therefore, no shares related to the
Convertible Debentures were included in the Company's weighted-average diluted
common shares outstanding for the three and six months ended June 30, 2009.

Conference Call Details

We invite you to join our conference call tomorrow at 8:30 a.m. Eastern
Daylight Time. To access the call live via webcast please visit
www.scientificgames.com and click on the webcast link under the Investors tab.
To access the call by telephone, please dial (888) 396-2356 (US & Canada) or
(617) 847-8709 (International) fifteen minutes before the start of the call.
The Conference ID# is 61696901. The call will be archived for replay on the
Company's website for 30 days.

About Scientific Games

Scientific Games Corporation is a leading integrated supplier of instant
tickets, systems and services to lotteries worldwide, a leading supplier of
server-based gaming machines and systems, Amusement and Skill with Prize
betting terminals, interactive sports betting terminals and systems, and
wagering systems and services to pari-mutuel operators. It is also a licensed
pari-mutuel gaming operator in Connecticut, Maine and the Netherlands and is a
leading supplier of prepaid phone cards to telephone companies. Scientific
Games' customers are in the United States and more than 60 other countries.
For more information about Scientific Games, please visit our web site at
www.scientificgames.com.
Company Contact:
Investor Relations
Scientific Games
212-754-2233

Forward-Looking Statements

In this press release the Company makes "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Forward- looking statements describe future expectations, plans, results or
strategies and can often be identified by the use of terminology such as
"may"," "will," "estimate," "intend," "continue," "believe," "expect,"
"anticipate," "could," "potential," "opportunity," or similar terminology.
These statements are based upon management's current expectations, assumptions
and estimates and are not guarantees of future results or performance. Actual
results may differ materially from those projected in these statements due to
a variety of risks and uncertainties and other factors, including, among other
things: competition; material adverse changes in economic and industry
conditions in the Company's markets; technological change; retention and
renewal of existing contracts and entry into new or amended contracts;
availability and adequacy of cash flow to satisfy obligations and indebtedness
or future needs; protection of intellectual property; security and integrity
of software and systems; laws and government regulation, including those
relating to gaming licenses, permits and operations; inability to identify,
complete and integrate future acquisitions; seasonality; ability to enhance
and develop successful gaming concepts; dependence on suppliers and
manufacturers; liability for product defects; factors associated with foreign
operations; influence of certain stockholders; dependence on key personnel;
failure to perform on contracts; resolution of pending or future litigation;
labor matters; and stock price volatility. Additional information regarding
risks and uncertainties and other factors that could cause actual results to
differ materially from those contemplated in forward-looking statements is
included from time to time in the Company's filings with the Securities and
Exchange Commission, including the Company's Current Report on Form 8-K filed
on May 18, 2009. Forward-looking statements speak only as of the date they are
made, and except for the Company's ongoing obligations under the U.S. federal
securities laws, the Company undertakes no obligation to publicly update any
forward-looking statements whether as a result of new information, future
events or otherwise.

Non-GAAP Disclosure

Non-GAAP adjusted net income, as included herein, represents net income (loss)
less income tax expense and is adjusted to add back stock compensation
charges, employee termination costs, the Global Draw earn-out employee bonus
accrual, costs associated with a division president retirement, costs
associated with the California Horse Racing Board resolution, gains and losses
associated with the early extinguishment of debt, legal costs associated with
termination of our Lottery Systems contract in Mexico, costs associated with a
property tax settlement, gain on forward foreign exchange contract, imputed
interest in convertible debt less non-GAAP income tax expense. Adjusted
EBITDA, as included herein, represents net income (loss) plus income tax
expense, depreciation and amortization expenses, and interest expense, net of
other income (loss) and is adjusted to add back employee termination costs,
the Global Draw earn-out employee bonus accrual, costs associated with a
division president retirement, costs associated with the California Horse
Racing Board resolution, legal costs associated with termination of our
Lottery Systems contract in Mexico, costs associated with a property tax
settlement and stock compensation charges. Segment adjusted EBITDA excludes
unallocated corporate expense and equity in earnings in joint ventures.

Adjusted EBITDA margin, as included herein, represents adjusted EBITDA divided
by total revenue.

Free cash flow, as included herein, represents net cash provided by operations
less capital expenditures, wagering systems expenditures and other intangible
assets and software expenditures.

Non-GAAP adjusted net income, diluted non-GAAP adjusted net income per share,
adjusted EBITDA, adjusted EBITDA margin and free cash flow are non-GAAP
financial measures that are presented as supplemental disclosures and are
reconciled to the nearest comparable GAAP measures in financial schedules
accompanying this release. Management believes that the GAAP financial
measure most directly comparable to non-GAAP adjusted net income is net income
(loss), that the GAAP financial measure most directly comparable to adjusted
EBITDA and adjusted EBITDA margin is operating profit and operating profit
margin and that the GAAP financial measure most directly comparable to free
cash flow is net cash provided by operations.

The Company's management uses these non-GAAP financial measures in conjunction
with GAAP financial measures to: monitor and evaluate the performance of the
Company's business operations; facilitate management's internal comparisons of
the Company's historical operating performance of its business operations;
facilitate management's external comparisons of the results of its overall
business to the historical operating performance of other companies that may
have different capital structures and debt levels; review and assess the
operating performance of the Company's management team and as a measure in
evaluating employee compensation and bonuses; analyze and evaluate financial
and strategic planning decisions regarding future operating investments; and
plan for and prepare future annual operating budgets and determine appropriate
levels of operating investments.

In particular, management believes non-GAAP adjusted net income, adjusted
EBITDA, segment adjusted EBITDA and adjusted EBITDA margin are helpful in
assessing our operating performance and highlighting trends in our core
businesses that may not otherwise be apparent when relying solely on GAAP
financial measures, because these non-GAAP financial measures eliminate from
earnings financial items that management believes have less bearing on the
Company's performance. In addition, management believes that adjusted EBITDA
and adjusted EBITDA margin are useful in evaluating the Company's financial
performance because they are commonly used financial analysis tools for
measuring and comparing gaming companies in several areas, such as liquidity,
operating performance and leverage. Management believes adjusted EBITDA margin
is useful in assessing the profitability of the Company's core businesses and
the effect of the implementation of the Company's Profitability Improvement
Program. Management further believes that adjusted EBITDA and free cash flow
provide useful information regarding the Company's liquidity and its ability
to service debt and fund investments. In addition, free cash flow is one of
the criteria used to determine the achievement of performance-based bonuses.

The Company's management believes that these adjusted financial measures are
useful to investors to provide them with disclosures of the Company's
operating results on the same basis as that used by the Company's management.
The Company's management also believes that because it has historically
provided certain of these adjusted non-GAAP financial measures in its earnings
releases, continuing to do so provides consistency in its financial reporting
and continuity to investors for comparability purposes. Accordingly, the
Company's management believes that the presentation of the adjusted non-GAAP
financial measures, when used in conjunction with GAAP financial measures,
provides both management and investors with financial information that can be
useful in assessing the Company's financial condition and operating
performance.

The non-GAAP financial measures used herein should not be considered in
isolation of, as a substitute for or superior to the financial information
prepared in accordance with GAAP. The adjusted financial measures as defined
in this press release may differ from similarly titled measures presented by
other companies. The adjusted financial measures, as well as other information
in this press release, should be read in conjunction with the Company's
financial statements filed with the Securities and Exchange Commission.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30, 2008 and 2009
(Unaudited, in thousands, except per share amounts)

Three Months
Ended June 30,
---------------
2008 2009
---- ----
Operating revenues:
Services $264,661 $218,254
Sales 41,308 6,774
------ -----
305,969 225,028
------- -------
Operating expenses:
Cost of services (exclusive of
depreciation and amortization) 152,536 124,143
Cost of sales (exclusive of
depreciation and amortization) 29,707 4,963
Selling, general and administrative
expenses 49,050 39,132
Depreciation and amortization 35,108 30,261
------ ------
Operating income 39,568 26,529
------ ------
Other (income) expense:
Interest expense 17,680 21,395
Equity in earnings of joint ventures (18,397) (15,480)
Early extinguishment of debt 2,960 (1,756)
Other (income) expense (745) 931
---- ---
1,498 5,090
----- -----
Income before income tax expense 38,070 21,439
Income tax expense 12,316 1,093
------ -----
Net income $25,754 $20,346
======= =======

Basic and diluted net income per share:
Basic net income $0.28 $0.22
===== =====
Diluted net income $0.27 $0.22
===== =====
Weighted average number of shares
Basic shares 92,645 92,463
====== ======
Diluted shares 94,420 93,959
====== ======

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Six Months Ended June 30, 2008 and 2009
(Unaudited, in thousands, except per share amounts)

Six Months Ended
June 30,
----------------
2008 2009
---- ----
Operating revenues:
Services $498,614 $428,592
Sales 64,362 27,126
------ ------
562,976 455,718
------- -------
Operating expenses:
Cost of services (exclusive of
depreciation and amortization) 282,914 249,905
Cost of sales (exclusive of
depreciation and amortization) 46,551 20,385
Selling, general and administrative
expenses 96,066 80,618
Employee termination costs 2,772 3,920
Depreciation and amortization 69,612 61,404
------ ------
Operating income 65,061 39,486
------ ------
Other (income) expense:
Interest expense 34,825 40,204
Equity in earnings of joint ventures (35,256) (30,578)
Early extinguishment of debt 2,960 (4,044)
Other (income) expense (695) (986)
---- ----
1,834 4,596
----- -----
Income before income tax expense 63,227 34,890
Income tax expense 20,810 39,734
------ ------
Net income (loss) $42,417 $(4,844)
======= =======

Basic and diluted net income (loss) per share:
Basic net income (loss) $0.46 $(0.05)
===== ======
Diluted net income (loss) $0.45 $(0.05)
===== ======
Weighted average number of shares
Basic shares 92,979 92,500
====== ======
Diluted shares 94,473 92,500
====== ======

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED BALANCE SHEET DATA

December 31, 2008 and June 30, 2009
(Unaudited, in thousands)

December 31, June 30,
2008 2009
---- ----
Assets:
Cash and cash equivalents $140,639 $234,833
Other current assets 371,139 334,375
Property and equipment, net 575,479 574,758
Long-term assets 1,095,196 1,185,495
--------- ---------
Total assets $2,182,453 $2,329,461
========== ==========

Liabilities and Stockholders' Equity:
Current portion of long-term debt $43,384 $178,620
Other current liabilities 217,300 195,231
Long-term debt, excluding current
portion 1,196,083 1,190,458
Other long-term liabilities 129,857 125,350
Stockholders' equity 595,829 639,802
------- -------
Total liabilities and stockholders'
equity $2,182,453 $2,329,461
========== ==========

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED SEGMENT OPERATING DATA

Three Months Ended June 30, 2008 and 2009
(Unaudited, in thousands)

Three Months Ended June 30, 2008
--------------------------------
Printed Lottery Diversified
Products Systems Gaming
Group Group Group Totals
----- ----- ----- ------

Service revenues $146,785 $61,332 $56,544 $264,661
Sales revenues 8,546 24,499 8,263 41,308
----- ------ ----- ------
Total revenues 155,331 85,831 64,807 305,969
------- ------ ------ -------
Cost of services (1) 87,378 31,183 33,975 152,536
Cost of sales (1) 5,641 20,899 3,167 29,707
Selling, general and
administrative expenses 15,789 9,604 7,261 32,654
Depreciation and amortization (2) 9,476 15,382 9,970 34,828
----- ------ ----- ------
Segment operating income $37,047 $8,763 $10,434 $56,244
------- ------ ------- -------
Unallocated corporate expense 16,676
------
Consolidated operating income $39,568
=======

Three Months Ended June 30, 2009
--------------------------------
Printed Lottery Diversified
Products Systems Gaming
Group Group Group Totals
----- ----- ----- ------

Service revenues $112,795 $55,003 $50,456 $218,254
Sales revenues 2,151 4,075 548 6,774
----- ----- --- -----
Total revenues 114,946 59,078 51,004 225,028
------- ------ ------ -------
Cost of services (1) 65,617 27,895 30,631 124,143
Cost of sales (1) 1,928 2,486 549 4,963
Selling, general and
administrative expenses 10,850 7,383 6,493 24,726
Depreciation and amortization (2) 8,200 10,698 11,193 30,091
----- ------ ------ ------
Segment operating income $28,351 $10,616 $2,138 $41,105
------- ------- ------ -------
Unallocated corporate expense 14,576
------
Consolidated operating income $26,529
=======

(1) Exclusive of depreciation and amortization
(2) Includes amortization of service contract software

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED SEGMENT OPERATING DATA

Six Months Ended June 30, 2008 and 2009
(Unaudited, in thousands)

Six Months Ended June 30, 2008
------------------------------
Printed Lottery Diversified
Products Systems Gaming
Group Group Group Totals
----- ----- ----- ------

Service revenues $274,011 $115,978 $108,625 $498,614
Sales revenues 17,217 32,263 14,882 64,362
------ ------ ------ ------
Total revenues 291,228 148,241 123,507 562,976
------- ------- ------- -------
Cost of services (1) 158,191 59,832 64,891 282,914
Cost of sales (1) 11,886 26,771 7,894 46,551
Selling, general and
administrative expenses 30,758 18,882 14,044 63,684
Employee termination costs 2,772 - - 2,772
Depreciation and amortization (2) 19,452 30,356 19,255 69,063
------ ------ ------ ------
Segment operating income $68,169 $12,400 $17,423 $97,992
------- ------- ------- -------
Unallocated corporate expense 32,931
------
Consolidated operating income $65,061
=======

Six Months Ended June 30, 2009
------------------------------
Printed Lottery Diversified
Products Systems Gaming
Group Group Group Totals
----- ----- ----- ------

Service revenues $222,872 $107,071 $98,649 $428,592
Sales revenues 6,741 17,944 2,441 27,126
----- ------ ----- ------
Total revenues 229,613 125,015 101,090 455,718
------- ------- ------- -------
Cost of services (1) 132,711 56,770 60,424 249,905
Cost of sales (1) 4,529 14,294 1,562 20,385
Selling, general and
administrative expenses 22,373 14,873 11,669 48,915
Employee termination costs 2,016 125 433 2,574
Depreciation and amortization (2) 15,879 21,430 23,750 61,059
------ ------ ------ ------
Segment operating income $52,105 $17,523 $3,252 $72,880
------- ------- ------ -------
Unallocated corporate expense 32,048
Corporate employee termination costs 1,346
-----
Consolidated operating income $39,486
=======

(1) Exclusive of depreciation and amortization
(2) Includes amortization of service contract software

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CALCULATION OF NON-GAAP ADJUSTED NET INCOME
(Unaudited, in thousands)

Three Months Six Months
Ended June 30, Ended June 30,
--------------- ---------------
2008 2009 2008 2009
---- ---- ---- ----

Net income (loss) $25,754 $20,346 $42,417 $(4,844)
Less: Income tax expense 12,316 1,093 20,810 39,734
------ ----- ------ ------
Income before income tax expense 38,070 21,439 63,227 34,890
Add: Stock compensation charges 7,610 7,339 16,128 18,617
Add: Employee termination costs - - 2,772 3,920
Add: Global Draw earn-out employee
bonus accrual 1,670 - 3,446 -
Add: Division President retirement 930 - 930 -
Add: California Horse Race Board
resolution 700 - 700 -
Add: Early extinguishment of debt 2,960 (1,756) 2,960 (4,044)
Add: Lottery Systems Mexico legal
costs - - - 900
Add: Property tax settlement - 1,005 - 1,005
Add: Gain on forward foreign exchange
contract - - - (718)
Add: Imputed interest in convertible
debt 3,261 2,784 6,522 5,934
----- ----- ----- -----
Non-GAAP net income before income tax
expense 55,201 30,811 96,685 60,504
Non-GAAP income tax expense 17,394 6,546 30,383 15,209
------ ----- ------ ------
Non-GAAP adjusted net income $37,807 $24,265 $66,302 $45,295
------- ------- ------- -------

Diluted non-GAAP adjusted net income
per share $0.40 $0.26 $0.70 $0.48
Diluted GAAP net income (loss) per
share $0.27 $0.22 $0.45 $(0.05)
Weighted average number of shares
used in per share calculations 94,420 93,959 94,473 93,773
Less: Diluted shares included in
weighted average number of shares
related to potential conversion of
convertible debt 19 - 10 -
-- - -- -
Non-GAAP weighted average number of
shares used in per share calculations 94,401 93,959 94,463 93,773
------ ------ ------ ------

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Unaudited, in thousands)

Three Months Six Months Ended
Ended June 30, June 30,
--------------- ----------------
2008 2009 2008 2009
---- ---- ---- ----

Net income (loss) $25,754 $20,346 $42,417 $(4,844)
Add: Income tax expense 12,316 1,093 20,810 39,734
Add: Depreciation and amortization
expense 35,108 30,261 69,612 61,404
Add: Interest expense, net of
other income or loss 19,895 20,570 37,090 35,174
------ ------ ------ ------
EBITDA 93,073 72,270 169,929 131,468
------ ------ ------- -------

Add: Employee termination costs - - 2,772 3,920
Add: Global Draw earn-out employee
bonus accrual 1,670 - 3,446 -
Add: Division President retirement 930 - 930 -
Add: California Horse Race Board
resolution 700 - 700 -
Add: Lottery Systems Mexico legal
costs - - - 900
Add: Property tax settlement - 1,005 - 1,005
Add: Stock compensation charges 7,610 7,339 16,128 18,617
----- ----- ------ ------
Adjusted EBITDA $103,983 $80,614 $193,905 $155,910
-------- ------- -------- --------

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO SEGMENT ADJUSTED EBITDA
(Unaudited, in thousands)

Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----

Printed Products Group operating
income $37,047 $28,351 $68,169 $52,105
Add: Depreciation and amortization
expense 9,476 8,200 19,452 15,879
----- ----- ------ ------
Printed Products Group EBITDA 46,523 36,551 87,621 67,984
------ ------ ------ ------

Add: Printed Products Employee
termination costs - - 2,772 2,016
Add: Stock compensation charges 724 780 1,205 1,738
--- --- ----- -----
Adjusted Printed Products Group
EBITDA $47,247 $37,331 $91,598 $71,738
------- ------- ------- -------

Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----

Lottery Systems Group operating
income $8,763 $10,616 $12,400 $17,523
Add: Depreciation and amortization
expense 15,382 10,698 30,356 21,430
------ ------ ------ ------
Lottery Systems Group EBITDA 24,145 21,314 42,756 38,953
------ ------ ------ ------

Add: Lottery Systems Division
President retirement 930 - 930 -
Add: Lottery Systems Mexico legal
costs - - - 900
Add: Lottery Systems Employee
termination costs - - - 125
Add: Stock compensation charges 577 573 957 1,328
--- --- --- -----
Adjusted Lottery Systems Group
EBITDA $25,652 $21,887 $44,643 $41,306
------- ------- ------- -------

Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----

Diversified Gaming Group operating
income $10,434 $2,138 $17,423 $3,252
Add: Depreciation and amortization
expense 9,970 11,193 19,255 23,750
----- ------ ------ ------
Diversified Gaming Group EBITDA 20,404 13,331 36,678 27,002
------ ------ ------ ------

Add: Global Draw earn-out employee
bonus accrual 1,670 - 3,446 -
Add: California Horse Racing Board
resolution 700 - 700 -
Add: Diversified Gaming Employee
termination costs - - - 433
Add: Property tax settlement - 1,005 - 1,005
Add: Stock compensation charges 370 553 675 1,316
--- --- --- -----
Adjusted Diversified Gaming Group
EBITDA $23,144 $14,889 $41,499 $29,756
------- ------- ------- -------

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CALCULATION OF FOREIGN EXCHANGE IMPACT ON TOTAL REVENUES

(Unaudited, in thousands)

Three Months Ended June 30, 2009
--------------------------------
Printed Lottery Diversified
Products Systems Gaming
Group Group Group Totals
----- ----- ----- ------

Total revenues $114,946 $59,078 $51,004 $225,028
Impact of foreign exchange
rates 4,718 2,629 8,119 15,466
----- ----- ----- ------
Adjusted total revenues $119,664 $61,707 $59,123 $240,494
-------- ------- ------- --------

Six Months Ended June 30, 2009
------------------------------
Printed Lottery Diversified
Products Systems Gaming
Group Group Group Totals
----- ----- ----- ------

Total revenues $229,613 $125,015 $101,090 $455,718
Impact of foreign exchange
rates 9,866 4,463 15,902 30,231
----- ----- ------ ------
Adjusted total revenues $239,479 $129,478 $116,992 $485,949
-------- -------- -------- --------

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW
(Unaudited, in thousands)

Three Months Six Months Ended
Ended June 30, June 30,
--------------- ----------------
2008 2009 2008 2009
---- ---- ---- ----

Net cash provided by
operations $70,727 $80,138 $106,443 $130,513

Less: Capital expenditures (4,382) (5,254) (8,062) (6,019)
Less: Wagering systems
expenditures (38,546) (17,637) (85,146) (31,750)
Less: Other intangible
assets and software
expenditures (10,928) (10,826) (21,959) (18,351)
------- ------- ------- -------
Total Capital Expenditures $(53,856) $(33,717) $(115,167) $(56,120)
-------- -------- --------- --------

------- ------- ------- -------
Free cash flow $16,871 $46,421 $(8,724) $74,393
------- ------- ------- -------

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
Key Performance Indicators
(Unaudited, in thousands)

Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2008 2009 2008 2009
---- ---- ---- ----

Revenues:
Domestic $196,051 $149,079 $366,626 $294,263
International 109,919 75,949 196,350 161,455
------- ------ ------- -------
$305,969 $225,028 $562,976 $455,718
-------- -------- -------- --------

Select market
instant ticket
retail revenues:
Italy - Gratta
e Vinci EUR2,397,000 EUR2,366,000 EUR4,874,000 EUR4,965,000
China - China
Sports Lottery RMB3,420,000 RMB4,670,000 RMB3,820,000 RMB7,450,000

Terminal installed
base at end of
period:
Global Draw 14,392 15,957 14,392 15,957
Games Media 457 2,312 457 2,312

Average terminal
installed base during
period:
Global Draw 14,041 15,798 13,724 15,337
Games Media 402 2,097 348 1,883

SOURCE Scientific Games

Investor Relations of Scientific Games, +1-212-754-2233