Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

We conduct substantially all of our business through our U.S. and foreign subsidiaries. SGI's obligations under our credit agreement, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes are fully and unconditionally and jointly and severally guaranteed by Scientific Games Corporation (the "Parent Company") and substantially all of our 100%-owned U.S. subsidiaries other than SGI (the "Guarantor Subsidiaries"). Our 2018 Notes, which were issued by the Parent Company, are fully and unconditionally and jointly and severally guaranteed by substantially all of our 100%-owned U.S. subsidiaries, including SGI. The guarantees of our 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes will terminate under following customary circumstances: (1) the sale or disposition of the capital stock of the guarantor (including by consolidation or merger of the guarantor into another person); (2) the liquidation or dissolution of the guarantor; (3) the defeasance or satisfaction and discharge of the notes; (4) the release of the guarantor from any guarantees of indebtedness of the Parent Company and SGI (or, in the case of the 2018 Notes, the release of the guarantor from any guarantees of indebtedness of the Parent Company); and (5) in the case of the 2020 Notes, the 2021 Notes and the Secured Notes and the Unsecured Notes, the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the respective Notes.

Presented below is condensed consolidated financial information for (1) the Parent Company, (2) SGI, (3) the Guarantor Subsidiaries and (4) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the "Non-Guarantor Subsidiaries") as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015. The condensed consolidating financial information has been presented to show the nature of assets held, results of operations and cash flows of the Parent Company, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the guarantee structures of our credit agreement, the 2018 Notes, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were in effect at the beginning of the periods presented.

The condensed consolidating financial information reflects the investments of the Parent Company in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method of accounting. They also reflect the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries. Net changes in intercompany due from/due to accounts are reported in the accompanying Supplemental Condensed Consolidating Statements of Cash Flows as investing activities if the applicable entities have a net investment (asset) in intercompany accounts and as a financing activity if the applicable entities have a net intercompany borrowing (liability) balance.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of March 31, 2016



	Parent Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	61.8		$	0.1		$	2.3	$	81.5	$	—		$	145.7
Restricted cash	—			—			21.1		0.1		—			21.2
Accounts receivable, net	—			89.4			225.4		157.3		—			472.1
Notes receivable, net	—			—			110.8		51.0		—			161.8
Inventories	—			45.7			96.6		129.0		(11.4		)	259.9
Prepaid expenses, deposits and other current assets	23.5			3.9			41.0		56.3		—			124.7
Property and equipment, net	7.3			98.2			468.2		172.1		(11.0		)	734.8
Investment in subsidiaries	3,234.8			853.4			784.4		—		(4,872.6		)	—
Goodwill	—			186.0			1,990.5		835.5		—			3,012.0
Intangible assets, net	215.1			39.3			1,459.1		232.5		—			1,946.0
Intercompany balances	—			6,576.5			—		—		(6,576.5		)	—
Software, net	44.2			26.9			344.8		54.0		—			469.9
Other assets	250.8			121.4			46.5		247.6		(323.7		)	342.6
Total assets	$	3,837.5		$	8,040.8		$	5,590.7	$	2,016.9	$	(11,795.2	)	$	7,690.7
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	7.0	$	—		$	50.0
Other current liabilities	50.4			190.8			231.9		146.0		—			619.1
Long-term debt, excluding current portion	248.2			7,873.2			—		15.7		—			8,137.1
Other long-term liabilities	185.0			15.3			501.4		90.3		(323.6		)	468.4
Intercompany balances	4,937.8			—			1,536.5		102.2		(6,576.5		)	—
Stockholders' (deficit) equity	(1,583.9		)	(81.5		)	3,320.9		1,655.7		(4,895.1		)	(1,583.9		)
Total liabilities and stockholders' (deficit) equity	$	3,837.5		$	8,040.8		$	5,590.7	$	2,016.9	$	(11,795.2	)	$	7,690.7

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015



	Parent Company			SGI			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	43.2		$	—		$	4.7	$	80.8	$	—		$	128.7
Restricted cash	—			—			20.0		0.2		—			20.2
Accounts receivable, net	—			94.6			233.6		158.9		—			487.1
Notes receivable, net	—			—			114.2		53.5		—			167.7
Inventories	—			36.9			104.2		119.6		(12.2		)	248.5
Prepaid expenses, deposits and other current assets	26.8			7.0			52.1		37.4		—			123.3
Property and equipment, net	8.2			106.4			502.2		188.7		(11.5		)	794.0
Investment in subsidiaries	3,280.9			838.1			648.3		—		(4,767.3		)	—
Goodwill	—			186.0			1,990.5		837.2		—			3,013.7
Intangible assets, net	138.3			39.8			1,505.8		236.1		—			1,920.0
Intercompany balances	—			6,511.1			—		—		(6,511.1		)	—
Software, net	35.6			32.7			359.8		57.8		—			485.9
Other assets	232.5			123.4			51.7		241.7		(306.2		)	343.1
Total assets	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	7.3	$	—		$	50.3
Other current liabilities	63.7			150.5			245.4		144.0		—			603.6
Long-term debt, excluding current portion	248.0			7,890.3			—		18.4		—			8,156.7
Other long-term liabilities	119.1			14.5			502.1		87.7		(306.3		)	417.1
Intercompany balances	4,830.2			—			1,558.2		122.6		(6,511.0		)	—
Stockholders' (deficit) equity	(1,495.5		)	(122.3		)	3,281.4		1,631.9		(4,791.0		)	(1,495.5		)
Total liabilities and stockholders' (deficit) equity	$	3,765.5		$	7,976.0		$	5,587.1	$	2,011.9	$	(11,608.3	)	$	7,732.2

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31, 2016



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	115.3		$	407.9		$	217.9		$	(59.1	)	$	682.0
Cost of services, cost of product sales and cost of instant games (1)	—			82.9			111.0			121.5			(59.1		)	256.3
Selling, general and administrative	24.1			11.2			67.7			39.3			—			142.3
Research and development	0.9			2.3			39.3			7.3			—			49.8
Employee termination and restructuring	—			0.1			0.8			1.8			—			2.7
Depreciation and amortization	12.8			10.8			126.8			30.2			—			180.6
Operating (loss) income	(37.8		)	8.0			62.3			17.8			—			50.3
Interest expense	(0.1		)	(34.8		)	(130.8		)	—			—			(165.7		)
Other (expense) income, net	(25.6		)	50.3			(23.1		)	2.3			—			3.9
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(63.5		)	23.5			(91.6		)	20.1			—			(111.5		)
Equity in (loss) income of subsidiaries	(51.0		)	18.9			6.9			—			25.2			—
Income tax benefit (expense)	22.2			—			—			(3.0		)	—			19.2
Net (loss) income	$	(92.3	)	$	42.4		$	(84.7	)	$	17.1		$	25.2		$	(92.3	)

Other comprehensive (loss) income	(2.4		)	(0.2		)	1.9			2.7			(4.4		)	(2.4		)
Comprehensive (loss) income	$	(94.7	)	$	42.2		$	(82.8	)	$	19.8		$	20.8		$	(94.7	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31, 2015



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	111.3		$	432.3		$	208.7		$	(93.6	)	$	658.7
Cost of services, cost of product sales and cost of instant games (1)	—			81.3			145.4			122.3			(93.6		)	255.4
Selling, general and administrative	14.9			16.2			74.3			40.5			—			145.9
Research and development	—			1.4			37.8			7.7			—			46.9
Employee termination and restructuring	1.8			0.2			4.5			1.7			—			8.2
Depreciation and amortization	7.8			9.9			128.7			37.8			—			184.2
Operating (loss) income	(24.5		)	2.3			41.6			(1.3		)	—			18.1
Interest expense, net	1.4			(36.2		)	(129.6		)	0.1			—			(164.3		)
Other (expense) income, net	11.7			17.6			(39.8		)	8.0			—			(2.5		)
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(11.4		)	(16.3		)	(127.8		)	6.8			—			(148.7		)
Equity in (loss) income of subsidiaries	(138.3		)	6.6			(6.3		)	—			138.0			—
Income tax benefit (expense)	63.3			(0.1		)	—			(0.9		)	—			62.3
Net (loss) income	$	(86.4	)	$	(9.8	)	$	(134.1	)	$	5.9		$	138.0		$	(86.4	)

Other comprehensive (loss) income	(110.3		)	(13.1		)	16.9			(119.6		)	115.8			(110.3		)
Comprehensive loss	$	(196.7	)	$	(22.9	)	$	(117.2	)	$	(113.7	)	$	253.8		$	(196.7	)

(1) Exclusive of D&A.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2016



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(70.0	)	$	88.7		$	57.7		$	24.7		$	—		$	101.1
Cash flows from investing activities:
Capital expenditures	(5.8		)	(2.6		)	(37.0		)	(5.8		)	—			(51.2		)
Distributions of capital on equity investments	—			—			—			1.5			—			1.5
Restricted Cash	—			—			(0.6		)	—			—			(0.6		)
Changes in other assets and liabilities and other	—			—			1.6			(0.1		)	—			1.5
Other, principally change in intercompany investing activities	—			(60.3		)	—			—			60.3			—
Net cash used in investing activities	(5.8		)	(62.9		)	(36.0		)	(4.4		)	60.3			(48.8		)
Cash flows from financing activities:
Net payments of long-term debt	—			(25.8		)	—			(1.7		)	—			(27.5		)
Payments on license obligations	(8.4		)	—			(1.2		)	—			—			(9.6		)
Other, principally change in intercompany financing activities	102.8			—			(22.9		)	(19.6		)	(60.3		)	—
Net cash provided by (used in) financing activities	94.4			(25.8		)	(24.1		)	(21.3		)	(60.3		)	(37.1		)
Effect of exchange rate changes on cash and cash equivalents	—			0.1			—			1.7			—			1.8
Increase (decrease) in cash and cash equivalents	18.6			0.1			(2.4		)	0.7			—			17.0
Cash and cash equivalents, beginning of period	43.2			—			4.7			80.8			—			128.7
Cash and cash equivalents, end of period	$	61.8		$	0.1		$	2.3		$	81.5		$	—		$	145.7

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2015



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash provided by (used in) operating activities	$	59.9		$	45.8		$	(163.4	)	$	135.5		$	—		$	77.8
Cash flows from investing activities:
Capital expenditures	(5.9		)	(3.1		)	(50.5		)	(12.6		)	—			(72.1		)
Distributions of capital on equity investments	—			—			—			3.8			—			3.8
Other, principally change in intercompany investing activities	—			(26.2		)	—			—			26.2			—
Net cash (used in) provided by investing activities	(5.9		)	(29.3		)	(50.5		)	(8.8		)	26.2			(68.3		)
Cash flows from financing activities:
Net payments on long-term debt	—			(15.8		)	—			(1.2		)	—			(17.0		)
Payments on license obligations	(7.5		)	—			(1.5		)	—			—			(9.0		)
Net redemptions of common stock under stock-based compensation plans	(0.7		)	—			—			—			—			(0.7		)
Other, principally change in intercompany financing activities	(26.0		)	—			206.2			(154.0		)	(26.2		)	—
Net cash (used in) provided by financing activities	(34.2		)	(15.8		)	204.7			(155.2		)	(26.2		)	(26.7		)
Effect of exchange rate changes on cash and cash equivalents	—			(0.5		)	—			(2.9		)	—			(3.4		)
Increase (decrease) in cash and cash equivalents	19.8			0.2			(9.2		)	(31.4		)	—			(20.6		)
Cash and cash equivalents, beginning of period	37.9			0.1			28.8			105.0			—			171.8
Cash and cash equivalents, end of period	$	57.7		$	0.3		$	19.6		$	73.6		$	—		$	151.2