Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

We conduct substantially all of our business through our domestic and foreign subsidiaries. SGI’s obligations under the Credit Agreement, the 2016 Notes and the 2019 Notes are fully and unconditionally and jointly and severally guaranteed by Scientific Games Corporation (the “Parent Company”) and our 100%-owned domestic 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 our 100% owned domestic subsidiaries, including SGI.

Presented below is condensed consolidating financial information for (i) the Parent Company, (ii) SGI, (iii) the Guarantor Subsidiaries and (iv) our 100%-owned foreign subsidiaries and our non-100%-owned domestic and foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011. 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 reflecting the guarantee structures of our obligations as disclosed in Note 8 of the Notes to Consolidated Financial Statements in our 2011 Annual Report on Form 10-K for all periods presented.

The condensed consolidating financial information reflects the investments of the Parent Company in the Guarantor and Non-Guarantor Subsidiaries using the equity method of accounting. Corporate interest and administrative expenses have not been allocated to the subsidiaries.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2012



	Parent Company		SGI		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	35,800	$	1,092	$	—	$	77,547	$	(2,008	)	$	112,431
Accounts receivable, net	—		48,193		34,100		84,589		—			166,882
Inventories	—		25,681		16,024		41,879		—			83,584
Other current assets	6,655		4,104		4,666		27,539		—			42,964
Property and equipment, net	4,238		163,026		31,285		203,987		—			402,536
Investment in subsidiaries	522,824		768,570		—		842,791		(2,134,185		)	—
Goodwill	—		273,656		78,618		425,464		—			777,738
Intangible assets	—		41,296		22,745		22,984		—			87,025
Intercompany balances	75,950		—		263,852		—		(339,802		)	—
Other assets	74,665		19,872		14,590		343,677		(2,614		)	450,190
Total assets	$	720,132	$	1,345,490	$	465,880	$	2,070,457	$	(2,478,609	)	$	2,123,350
Liabilities and stockholders’ equity
Current installments of long-term debt	$	—	$	6,280	$	—	$	8,503	$	—		$	14,783
Other current liabilities	24,101		50,604		28,292		91,580		(2,001		)	192,576
Long-term debt, excluding current installments	250,000		1,102,059		—		2,861		—			1,354,920
Other non-current liabilities	4,978		38,856		11,941		64,243		—			120,018
Intercompany balances	—		112,671		—		227,148		(339,819		)	—
Stockholders’ equity	441,053		35,020		425,647		1,676,122		(2,136,789		)	441,053
Total liabilities and stockholders’ equity	$	720,132	$	1,345,490	$	465,880	$	2,070,457	$	(2,478,609	)	$	2,123,350

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2011



	Parent Company		SGI		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated
Assets
Cash and cash equivalents	$	24,042	$	56	$	—	$	81,482	$	(1,178	)	$	104,402
Accounts receivable, net	—		53,531		41,238		87,698		—			182,467
Inventories	—		23,714		16,884		39,144		—			79,742
Other current assets	8,699		3,409		5,117		23,277		—			40,502
Property and equipment, net	3,522		166,637		36,028		220,301		—			426,488
Investment in subsidiaries	551,256		721,909		—		909,379		(2,182,544		)	—
Goodwill	—		273,656		78,618		416,508		—			768,782
Intangible assets	—		41,520		25,849		19,490		—			86,859
Intercompany balances	125,440		—		231,357		—		(356,797		)	—
Other assets	17,002		82,748		12,265		367,209		(6,101		)	473,123
Total assets	$	729,961	$	1,367,180	$	447,356	$	2,164,488	$	(2,546,620	)	$	2,162,365
Liabilities and stockholders’ equity
Current installments of long-term debt	$	—	$	6,280	$	—	$	19,911	$	—		$	26,191
Other current liabilities	31,231		56,050		30,140		95,146		(1,211		)	211,356
Long-term debt, excluding current installments	250,000		1,104,884		—		9,592		—			1,364,476
Other non-current liabilities	5,016		38,772		13,427		59,413		—			116,628
Intercompany balances	—		71,603		—		285,162		(356,765		)	—
Stockholders’ equity	443,714		89,591		403,789		1,695,264		(2,188,644		)	443,714
Total liabilities and stockholders’ equity	$	729,961	$	1,367,180	$	447,356	$	2,164,488	$	(2,546,620	)	$	2,162,365

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

Three Months Ended June 30, 2012



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	104,177		$	10,601		$	116,174		$	(1,645	)	$	229,307
Cost of instant ticket revenue, cost of services and cost of sales (1)	—			33,115			34,533			63,009			(2,726		)	127,931
Selling, general and administrative	15,126			14,170			2,937			15,705			(767		)	47,171
Employee termination and restructuring	—			—			—			6,046			—			6,046
Depreciation and amortization	150			7,568			7,916			23,452			—			39,086
Operating income (loss)	(15,276		)	49,324			(34,785		)	7,962			1,848			9,073
Interest expense	5,305			18,605			—			275			—			24,185
Other (income) expense, net	(1,027		)	42,589			(44,392		)	(4,825		)	1,848			(5,807		)
Income (loss) before equity in income of subsidiaries, and income taxes	(19,554		)	(11,870		)	9,607			12,512			—			(9,305		)
Equity in income (loss) of subsidiaries	8,324			9,589			—			—			(17,913		)	—
Income tax expense	1,359			44			—			1,881			—			3,284
Net income (loss)	$	(12,589	)	$	(2,325	)	$	9,607		$	10,631		$	(17,913	)	$	(12,589	)

Other comprehensive (loss) income	(27,859		)	1,099			—			(28,627		)	27,528			(27,859		)
Comprehensive (loss) income	$	(40,448	)	$	(1,226	)	$	9,607		$	(17,996	)	$	9,615		$	(40,448	)

(1) Exclusive of depreciation and amortization.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

Three Months Ended June 30, 2011



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	99,042		$	16,278		$	105,357		$	(429	)	$	220,248
Cost of instant ticket revenue, cost of services and cost of sales (1)	—			29,506			36,854			53,988			(1,394		)	118,954
Selling, general and administrative	14,891			12,199			2,517			15,247			(1,428		)	43,426
Depreciation and amortization	128			7,548			4,664			16,664			—			29,004
Operating income (loss)	(15,019		)	49,789			(27,757		)	19,458			2,393			28,864
Interest expense	5,357			20,624			—			427			1			26,409
Other (income) expense, net	(998		)	48,420			(50,615		)	(9,299		)	2,392			(10,100		)
Income (loss) before equity in income of subsidiaries, and income taxes	(19,378		)	(19,255		)	22,858			28,330			—			12,555
Equity in income (loss) of subsidiaries	30,019			22,752			—			—			(52,771		)	—
Income tax expense	3,622			(4		)	8			1,910			—			5,536
Net income (loss)	$	7,019		$	3,501		$	22,850		$	26,420		$	(52,771	)	$	7,019

Other comprehensive income (loss)	13,804			3,075			—			11,302			(14,377		)	13,804
Comprehensive income (loss)	$	20,823		$	6,576		$	22,850		$	37,722		$	(67,148	)	$	20,823

(1) Exclusive of depreciation and amortization.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

Six Months Ended June 30, 2012



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	210,828		$	20,150		$	235,122		$	(2,218	)	$	463,882
Cost of instant ticket revenue, cost of services and cost of sales (1)	—			66,105			68,747			130,180			(4,352		)	260,680
Selling, general and administrative	30,647			28,907			6,569			28,636			(1,416		)	93,343
Employee termination and restructuring	—			—			—			8,921			—			8,921
Depreciation and amortization	299			14,888			12,693			41,724			—			69,604
Operating income (loss)	(30,946		)	100,928			(67,859		)	25,661			3,550			31,334
Interest expense	10,607			37,777			—			699			—			49,083
Other (income) expense, net	(3,215		)	82,638			(89,713		)	(8,390		)	3,550			(15,130		)
Income (loss) before equity in income of subsidiaries, and income taxes	(38,338		)	(19,487		)	21,854			33,352			—			(2,619		)
Equity in income (loss) of subsidiaries	(25,996		)	21,696			—			—			4,300			—
Income tax expense	(53,564		)	58,243			—			3,472			—			8,151
Net income (loss)	$	(10,770	)	$	(56,034	)	$	21,854		$	29,880		$	4,300		$	(10,770	)

Other comprehensive income (loss)	(2,437		)	1,318			—			(3,596		)	2,278			(2,437		)
Comprehensive income (loss)	$	(13,207	)	$	(54,716	)	$	21,854		$	26,284		$	6,578		$	(13,207	)

(1) Exclusive of depreciation and amortization.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

Six Months Ended June 30, 2011



	Parent Company			SGI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated
Revenue	$	—		$	197,099		$	25,798		$	194,730		$	(723	)	$	416,904
Cost of instant ticket revenue, cost of services and cost of sales (1)	—			61,799			69,025			101,657			(1,682		)	230,799
Selling, general and administrative	30,456			24,655			5,153			24,502			(1,786		)	82,980
Depreciation and amortization	256			15,112			9,610			34,930			—			59,908
Operating income (loss)	(30,712		)	95,533			(57,990		)	33,641			2,745			43,217
Interest expense	10,747			41,282			—			834			1			52,864
Other (income) expense, net	(2,219		)	89,195			(93,255		)	(16,909		)	2,744			(20,444		)
Income (loss) before equity in income of subsidiaries, and income taxes	(39,240		)	(34,944		)	35,265			49,716			—			10,797
Equity in income (loss) of subsidiaries	46,705			36,179			—			—			(82,884		)	—
Income tax expense	7,378			(295		)	8			3,619			—			10,710
Net income (loss)	$	87		$	1,530		$	35,257		$	46,097		$	(82,884	)	$	87

Other comprehensive income (loss)	48,874			4,379			—			44,675			(49,054		)	48,874
Comprehensive income (loss)	$	48,961		$	5,909		$	35,257		$	90,772		$	(131,938	)	$	48,961

(1) Exclusive of depreciation and amortization.

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2012



	Parent Company			SGI			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(20,287	)	$	2,646		$	25,011		$	74,864		$	1,122		$	83,356
Cash flows from investing activities:
Capital, lottery and gaming systems expenditures, other intangible assets and software expenditures	(879		)	(15,342		)	(7,459		)	(26,688		)	—			(50,368		)
Business acquisitions, net of cash acquired	—			—			—			(12,991		)	—			(12,991		)
Other assets and investments	(198		)	(20,860		)	156			84,219			(46,350		)	16,967
Net cash provided by (used in) investing activities	(1,077		)	(36,202		)	(7,303		)	44,540			(46,350		)	(46,392		)
Cash flows from financing activities:
Net proceeds (payments) on long-term debt	—			(3,140		)	—			(18,116		)	—			(21,256		)
Net redemptions of common stock under stock-based compensation plans	(3,595		)	—			5			(45,283		)	45,278			(3,595		)
Payment of financing fees	—			(57		)	—			—			—			(57		)
Purchase of treasury stock	(1,895		)	—			—			—			—			(1,895		)
Other, principally intercompany balances	38,612			37,908			(18,543		)	(57,928		)	(49		)	—
Net cash provided by (used in) financing activities	33,122			34,711			(18,538		)	(121,327		)	45,229			(26,803		)
Effect of exchange rate changes on cash	—			(119		)	—			(2,013		)	—			(2,132		)
Increase (decrease) in cash and cash equivalents	11,758			1,036			(830		)	(3,936		)	1			8,029
Cash and cash equivalents, beginning of period	24,042			55			2,379			77,926			—			104,402
Cash and cash equivalents, end of period	$	35,800		$	1,091		$	1,549		$	73,990		$	1		$	112,431

SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2011



	Parent Company			SGI			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminating Entries			Consolidated
Net cash (used in) provided by operating activities	$	(13,976	)	$	28,257		$	24,844		$	58,466		$	(8	)	$	97,583
Cash flows from investing activities:
Capital, lottery and gaming systems expenditures, other intangible assets and software expenditures	(1,037		)	(20,932		)	(6,524		)	(15,683		)	—			(44,176		)
Other assets and investments	(352		)	(9,858		)	(730		)	(502,429		)	470,247			(43,122		)
Net cash provided by (used in) investing activities	(1,389		)	(30,790		)	(7,254		)	(518,112		)	470,247			(87,298		)
Cash flows from financing activities:
Net proceeds (payments) on long-term debt	—			(3,140		)	—			(1,521		)	—			(4,661		)
Net redemptions of common stock under stock-based compensation plans	(1,353		)	—			11			470,236			(470,247		)	(1,353		)
Payment of financing fees	(8		)	(2,615		)	—			—			—			(2,623		)
Other, principally intercompany balances	(14,290		)	7,364			(23,501		)	30,419			8			—
Net cash (used in) provided by financing activities	(15,651		)	1,609			(23,490		)	499,134			(470,239		)	(8,637		)
Effect of exchange rate changes on cash	(720		)	911			—			1,136			—			1,327
Increase (decrease) in cash and cash equivalents	(31,736		)	(13		)	(5,900		)	40,624			—			2,975
Cash and cash equivalents, beginning of period	62,639			150			2,279			59,213			—			124,281
Cash and cash equivalents, end of period	$	30,903		$	137		$	(3,621	)	$	99,837		$	—		$	127,256