Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

We conduct substantially all of our business through our U.S. and foreign subsidiaries. As of September 30, 2016, SGI's obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. As of September 30, 2016, our 2018 Notes, which were issued by SGC, were fully and unconditionally and jointly and severally guaranteed by the Guarantor Subsidiaries. The guarantees of our 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes will terminate under the 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 SGC and SGI (or, in the case of the 2018 Notes, the release of the guarantor from any guarantees of indebtedness of SGC); 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.

During the third quarter, we designated certain of our wholly owned direct and indirect subsidiaries that hold substantially all of the assets of, and operate, our social gaming business, as “Unrestricted Subsidiaries” under our credit agreement and each of the indentures governing the 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes. As a result of these designations, our 100%-owned social gaming subsidiaries are no longer guarantors under our credit agreement and indentures. Therefore, the historical condensed consolidating financial information presented has been reclassified to show the nature of assets held, results of operations and cash flows assuming the "Unrestricted Subsidiary" designations were in effect at the beginning of all periods presented, consistent with their status as non-guarantors as of September 30, 2016. The affected subsidiaries are no longer allocated interest in this condensed consolidating financial information due to their present status as non-guarantors. Accordingly, for all periods presented, we no longer present an allocation of interest to any entities, including the Unrestricted Subsidiaries, other than the legal entity issuer of the associated debt.

Presented below is condensed consolidating financial information for (1) SGC, (2) SGI, (3) the Guarantor Subsidiaries and (4) the Non-Guarantor Subsidiaries as of September 30, 2016 and December 31, 2015 and for the three and nine months ended September 30, 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 SGC, 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 SGC in SGI and 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 September 30, 2016



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	42.7		$	0.5		$	—	$	84.8	$	(7.1	)	$	120.9
Restricted cash	—			—			24.2		0.1		—			24.3
Accounts receivable, net	—			58.2			193.2		213.9		—			465.3
Notes receivable, net	—			—			94.3		34.7		—			129.0
Inventories	—			37.9			93.2		156.8		(17.8		)	270.1
Prepaid expenses, deposits and other current assets	32.2			17.5			35.2		41.1		—			126.0
Property and equipment, net	8.1			106.3			406.8		166.1		(23.5		)	663.8
Investment in subsidiaries	3,166.1			859.5			888.1		—		(4,913.7		)	—
Goodwill	—			188.3			1,931.7		871.0		—			2,991.0
Intangible assets, net	196.5			38.5			1,386.0		220.0		—			1,841.0
Intercompany balances	—			5,505.1			—		89.3		(5,594.4		)	—
Software, net	71.0			22.9			285.5		51.7		—			431.1
Other assets	270.1			223.9			44.8		217.9		(442.6		)	314.1
Total assets	$	3,786.7		$	7,058.6		$	5,383.0	$	2,147.4	$	(10,999.1	)	$	7,376.6
Liabilities and stockholders' (deficit) equity
Current portion of long-term debt	$	—		$	43.0		$	—	$	6.6	$	—		$	49.6
Other current liabilities	66.7			194.0			206.9		208.4		(7.1		)	668.9
Long-term debt, excluding current portion	248.5			7,774.2			—		11.1		—			8,033.8
Other long-term liabilities	179.4			12.1			517.4		108.0		(442.6		)	374.3
Intercompany balances	5,042.1			—			552.3		—		(5,594.4		)	—
Stockholders' (deficit) equity	(1,750.0		)	(964.7		)	4,106.4		1,813.3		(4,955.0		)	(1,750.0		)
Total liabilities and stockholders' (deficit) equity	$	3,786.7		$	7,058.6		$	5,383.0	$	2,147.4	$	(10,999.1	)	$	7,376.6

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	43.2		$	—		$	0.5	$	85.0	$	—		$	128.7
Restricted cash	—			—			20.0		0.2		—			20.2
Accounts receivable, net	—			94.6			223.0		169.5		—			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			51.0		38.5		—			123.3
Property and equipment, net	8.2			106.4			501.1		189.8		(11.5		)	794.0
Investment in subsidiaries	3,319.6			838.1			819.0		—		(4,976.7		)	—
Goodwill	—			186.0			1,934.0		893.7		—			3,013.7
Intangible assets, net	138.3			39.8			1,505.0		236.9		—			1,920.0
Intercompany balances	—			5,857.1			—		—		(5,857.1		)	—
Software, net	35.6			32.7			358.0		59.6		—			485.9
Other assets	232.5			123.4			51.8		241.7		(306.3		)	343.1
Total assets	$	3,804.2		$	7,322.0		$	5,681.8	$	2,088.0	$	(11,163.8	)	$	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			238.8		150.6		—			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	4,868.9			—			966.8		21.4		(5,857.1		)	—
Stockholders' (deficit) equity	(1,495.5		)	(776.3		)	3,974.1		1,802.6		(5,000.4		)	(1,495.5		)
Total liabilities and stockholders' (deficit) equity	$	3,804.2		$	7,322.0		$	5,681.8	$	2,088.0	$	(11,163.8	)	$	7,732.2

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended September 30, 2016



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	114.2		$	330.8		$	358.4		$	(83.4	)	$	720.0
Cost of services, cost of product sales and cost of instant games ⁽³⁾	—			81.8			86.1			189.8			(83.4		)	274.3
Selling, general and administrative	30.9			14.8			43.1			64.0			—			152.8
Research and development	2.1			1.6			38.3			11.9			—			53.9
Restructuring and other	14.3			0.2			(0.7		)	—			—			13.8
Depreciation, amortization and impairments	13.8			8.7			140.6			28.6			—			191.7
Operating (loss) income	(61.1		)	7.1			23.4			64.1			—			33.5
Interest expense	(5.3		)	(159.5		)	—			(0.6		)	—			(165.4		)
Other (expense) income, net	(13.9		)	54.7			(26.7		)	(0.8		)	—			13.3
Net (loss) income before equity in income of subsidiaries and income taxes	(80.3		)	(97.7		)	(3.3		)	62.7			—			(118.6		)
Equity in income of subsidiaries	18.1			7.5			37.9			—			(63.5		)	—
Income tax (expense) benefit	(36.7		)	99.2			(16.9		)	(25.9		)	—			19.7
Net (loss) income	$	(98.9	)	$	9.0		$	17.7		$	36.8		$	(63.5	)	$	(98.9	)

Other comprehensive income (loss)	5.2			2.1			(48.0		)	19.0			26.9			5.2
Comprehensive (loss) income	$	(93.7	)	$	11.1		$	(30.3	)	$	55.8		$	(36.6	)	$	(93.7	)

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

^{3 - Exclusive of D&A.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended September 30, 2015



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	106.5		$	370.7		$	270.4		$	(76.0	)	$	671.6
Cost of services, cost of product sales and cost of instant games ⁽³⁾	—			77.7			113.1			135.2			(76.0		)	250.0
Selling, general and administrative	16.2			15.9			59.2			45.5			—			136.8
Research and development	—			0.8			35.4			9.7			—			45.9
Restructuring and other	1.4			0.6			2.9			0.7			—			5.6
Depreciation, amortization and impairments	8.3			10.5			232.2			35.5			—			286.5
Goodwill impairment	—			—			802.9			132.1			—			935.0
Operating (loss) income	(25.9		)	1.0			(875.0		)	(88.3		)	—			(988.2		)
Interest expense	(5.2		)	(161.4		)	—			(0.2		)	—			(166.8		)
Other (expense) income, net	6.9			19.3			(8.2		)	(22.5		)	—			(4.5		)
Net loss before equity in (loss) income of subsidiaries and income taxes	(24.2		)	(141.1		)	(883.2		)	(111.0		)	—			(1,159.5		)
Equity in (loss) income of subsidiaries	(1,137.5		)	11.8			(143.6		)	—			1,269.3			—
Income tax benefit (expense)	83.5			(0.1		)	(0.9		)	(1.2		)	—			81.3
Net loss	$	(1,078.2	)	$	(129.4	)	$	(1,027.7	)	$	(112.2	)	$	1,269.3		$	(1,078.2	)

Other comprehensive (loss) income	(49.0		)	(3.1		)	56.8			(104.1		)	50.4			(49.0		)
Comprehensive loss	$	(1,127.2	)	$	(132.5	)	$	(970.9	)	$	(216.3	)	$	1,319.7		$	(1,127.2	)

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

^{3 - Exclusive of D&A.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Nine Months Ended September 30, 2016



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	355.8		$	1,047.0		$	942.2		$	(213.8	)	$	2,131.2
Cost of instant games, cost of services and cost of product sales⁽³⁾	—			250.8			275.2			494.6			(213.8		)	806.8
Selling, general and administrative	91.9			37.6			132.8			177.7			—			440.0
Research and development	4.8			6.3			109.1			35.2			—			155.4
Restructuring and other	14.3			0.4			3.3			2.7			—			20.7
Depreciation, amortization and impairments	39.5			29.9			407.3			88.7			—			565.4
Operating (loss) income	(150.5		)	30.8			119.3			143.3			—			142.9
Interest expense	(15.8		)	(480.0		)	—			(0.6		)	—			(496.4		)
Gain on early extinguishment of debt	—			25.2			—			—			—			25.2
Other (expense) income, net	(64.2		)	157.5			(73.9		)	7.5			—			26.9
Net (loss) income before equity in (loss) income of subsidiaries and income taxes	(230.5		)	(266.5		)	45.4			150.2			—			(301.4		)
Equity in (loss) income of subsidiaries	(22.7		)	37.8			85.3			—			(100.4		)	—
Income tax benefit (expense)	10.3			99.2			(16.8		)	(34.2		)	—			58.5
Net (loss) income	$	(242.9	)	$	(129.5	)	$	113.9		$	116.0		$	(100.4	)	$	(242.9	)

Other comprehensive (loss) income	(27.4		)	5.0			(54.2		)	(11.8		)	61.0			(27.4		)
Comprehensive (loss) income	$	(270.3	)	$	(124.5	)	$	59.7		$	104.2		$	(39.4	)	$	(270.3	)

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

^{3 - Exclusive of D&A.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF

OPERATIONS AND COMPREHENSIVE LOSS

Nine Months Ended September 30, 2015




	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	324.1		$	1,163.3		$	811.0		$	(276.6	)	$	2,021.8
Cost of instant games, cost of services and cost of product sales ⁽³⁾	—			238.0			371.4			447.9			(276.6		)	780.7
Selling, general and administrative	47.8			50.5			186.9			138.4			—			423.6
Research and development	—			3.6			108.5			28.7			—			140.8
Restructuring and other	4.6			1.5			9.6			3.3			—			19.0
Depreciation, amortization and impairments	24.3			30.1			528.2			110.3			—			692.9
Goodwill impairment	—			—			802.9			132.1			—			935.0
Operating (loss) income	(76.7		)	0.4			(844.2		)	(49.7		)	—			(970.2		)
Interest expense	(15.8		)	(481.3		)	—			(0.4		)	—			(497.5		)
Other (expense) income, net	24.9			55.2			(77.0		)	(11.1		)	—			(8.0		)
Net loss before equity in (loss) income of subsidiaries and income taxes	(67.6		)	(425.7		)	(921.2		)	(61.2		)	—			(1,475.7		)
Equity in (loss) income of subsidiaries	(1,412.1		)	41.1			(112.6		)	—			1,483.6			—
Income tax benefit (expense)	212.9			(0.2		)	(7.0		)	3.2			—			208.9
Net loss	$	(1,266.8	)	$	(384.8	)	$	(1,040.8	)	$	(58.0	)	$	1,483.6		$	(1,266.8	)

Other comprehensive (loss) income	(136.1		)	(12.9		)	48.4			(181.4		)	145.9			(136.1		)
Comprehensive loss	$	(1,402.9	)	$	(397.7	)	$	(992.4	)	$	(239.4	)	$	1,629.5		$	(1,402.9	)

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

^{3 - Exclusive of D&A.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2016



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(213.3	)	$	(157.0	)	$	494.3		$	225.9		$	(7.1	)	$	342.8
Cash flows from investing activities:
Capital expenditures	(36.6		)	(22.1		)	(110.4		)	(45.3		)	—			(214.4		)
Distributions of capital on equity investments	—			—			—			24.0			—			24.0
Restricted Cash	—			—			(3.5		)	—			—			(3.5		)
Changes in other assets and liabilities and other	—			—			6.1			—			—			6.1
Other, principally change in intercompany investing activities	—			296.8			—			(198.8		)	(98.0		)	—
Net cash (used in) provided by investing activities	(36.6		)	274.7			(107.8		)	(220.1		)	(98.0		)	(187.8		)
Cash flows from financing activities:
Net payments of long-term debt including repurchases of notes	—			(117.2		)	—			(5.3		)	—			(122.5		)
Payments on license obligations	(24.2		)	—			(10.3		)	—			—			(34.5		)
Redemptions of common stock under stock-based compensation plans	(4.7		)	—			—			—			—			(4.7		)
Other, principally change in intercompany financing activities	278.3			—			(376.3		)	—			98.0			—
Net cash provided by (used in) financing activities	249.4			(117.2		)	(386.6		)	(5.3		)	98.0			(161.7		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.4		)	(0.7		)	—			(1.1		)
(Decrease) increase in cash and cash equivalents	(0.5		)	0.5			(0.5		)	(0.2		)	(7.1		)	(7.8		)
Cash and cash equivalents, beginning of period	43.2			—			0.5			85.0			—			128.7
Cash and cash equivalents, end of period	$	42.7		$	0.5		$	—		$	84.8		$	(7.1	)	$	120.9

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2015



	SGC (Parent and Issuer¹)			SGI (Issuer²)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(26.7	)	$	(339.9	)	$	454.6		$	167.5		$	—		$	255.5
Cash flows from investing activities:
Capital expenditures	(12.8		)	(19.7		)	(168.0		)	(33.1		)	—			(233.6		)
Distributions of capital on equity investments	—			1.0			—			36.0			—			37.0
Restricted cash	—			—			9.3			—			—			9.3
Changes in other assets and liabilities and other	—			(0.1		)	5.1			5.1			—			10.1
Other, principally change in intercompany investing activities	—			461.4			—			—			(461.4		)	—
Net cash (used in) provided by investing activities	(12.8		)	442.6			(153.6		)	8.0			(461.4		)	(177.2		)
Cash flows from financing activities:
Net payments on long-term debt	—			(102.3		)	—			(6.5		)	—			(108.8		)
Payments on license obligations	(19.5		)	—			(12.5		)	—			—			(32.0		)
Contingent earnout payments	—			—			(0.5		)	—			—			(0.5		)
Issuance (redemptions) of common stock under stock-based compensation plans	0.5			—			(37.1		)	(110.2		)	147.2			0.4
Other, principally change in intercompany financing activities	37.9			—			(270.6		)	(81.5		)	314.2			—
Net cash provided by (used in) financing activities	18.9			(102.3		)	(320.7		)	(198.2		)	461.4			(140.9		)
Effect of exchange rate changes on cash and cash equivalents	—			(0.5		)	(0.8		)	(5.8		)	—			(7.1		)
Decrease in cash and cash equivalents	(20.6		)	(0.1		)	(20.5		)	(28.5		)	—			(69.7		)
Cash and cash equivalents, beginning of period	37.9			0.1			27.3			106.5			—			171.8
Cash and cash equivalents, end of period	$	17.3		$	—		$	6.8		$	78.0		$	—		$	102.1

^{1 - Issuer of obligations under the 2018 Notes.}

^{2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes.}