Third Quarter 2018 Financial Highlights:

• Third quarter revenue rose 7 percent to $821.0 million, up from $768.9 million in the year ago period, reflecting $46.5 million in revenue from NYX, along with growth in our Lottery and Social businesses.


• Net loss was$351.6 million compared to $59.3 million in the prior year period, primarily driven by $338.7 million in restructuring and other charges. The restructuring and other charges are inclusive of $309.6 million recorded during the quarter related to the verdict in the Shuffle Tech legal matter, which did not result in any cash outflow as the verdict is subject to post-trial motions and the appeal process.


• Consolidated Attributable EBITDA ("Consolidated AEBITDA"), a non-GAAP financial measure defined below, increased 9 percent to $325.7 million from $299.0 million in the prior year period, primarily driven by higher revenue and continued operational efficiencies. Consolidated AEBITDA margin, a non-GAAP financial measure defined below, was 39.7 percent, compared to 38.9 percent in the prior year period.


• Net cash provided by operating activities increased to $223.5 million from $109.5 million in the year ago period driven primarily by improvements in operating results, working capital and timing of interest payments resulting from the February 2018 refinancing. Free cash flow, a non-GAAP financial measure, increased by $95.4 million from the year ago period to $123.0 million. Our net debt leverage ratio, a non-GAAP financial measure, was down 0.3x from the prior quarter to 6.7x as a result of lower debt and higher LTM AEBITDA.


• The Company is considering a possible initial public offering of a minority interest in its social gaming business in 2019. The social gaming business continues to experience rapid growth and has reached significant scale. The Company believes an IPO would provide greater flexibility to pursue additional growth initiatives specifically designed for its social gaming business, as well as unlocking additional value for Scientific Games stakeholders. The Company anticipates that the proceeds from the IPO would primarily be used to repay debt.

Barry Cottle, CEO and President of Scientific Games, said "We are very pleased with the growth we are seeing across our businesses as we continue to lead our industry into the future. Our investments in digital, sports betting, and new games are producing the most innovative and engaging products in the market and we are excited about the customer response here in the U.S. and around the world. For our rapidly growing social business, an IPO would give us greater flexibility to pursue growth for the business and drive value for stakeholders. We remain focused on delivering for our customers and running our business efficiently and effectively to drive revenue, reduce costs and continue to build momentum across the Company."

Michael Quartieri, Chief Financial Officer of Scientific Games, added, "This quarter marks our twelfth consecutive quarter of year over year growth in revenue and Consolidated AEBITDA. Our focus on generating cash flows provides us a clear avenue to strengthen our balance sheet."

SUMMARY CONSOLIDATED RESULTS

GAMING HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018

• Total gaming revenue decreased $6.7 million, including an unfavorable $4.5 million impact on Gaming operations from revenue recognition accounting effective in 2018, and AEBITDA increased 5 percent, or $11.3 million, to $232.5 million, primarily reflecting a 320 basis point improvement in the AEBITDA margin to 51.9 percent.


• Gaming operations revenue declined $16.8 million in the third quarter 2018, inclusive of the negative impact from the new revenue recognition accounting. Our WAP, premium and participation ending installed base decreased sequentially by 1,554 units. This ending installed base decrease is reflective of a strategic long-term relationship entered into during the quarter that converted a number of units that were on lease to product sales in Oklahoma and also to a lesser degree the redeployment of lower yielding Oregon VLT units. The installed base of other leased and participation games increased sequentially by 152 units with average daily revenue down $0.98, which reflects the replacement in the installed base of higher yielding U.K. units with lower yielding units in Greece.


• Gaming machine sales revenue increased $4.1 million year over year, benefiting from our new strategic long-term relationship. The average sales price increased 3 percent to $18,199, reflecting the benefit of the premium received from the strategic relationship described above and a more favorable mix of gaming machines.


• Gaming systems revenue increased $7.7 million to $69.7 million, primarily due to ongoing system installations in Canada, coupled with increased hardware sales, primarily the iVIEW®4. The Canadian systems deployments are expected to continue throughout 2018, and beyond.


• Table products revenue decreased $1.7 million to $51.8 million, reflecting strength in recurring utility products, which was offset by lower product sales as the prior year featured a large international expansion.

LOTTERY HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018

• Total lottery revenue increased $3.9 million, or 2 percent, to $206.8 million, and AEBITDA increased 3 percent to $92.3 million, compared to $89.2 million in the prior year, with AEBITDA margin improving to 44.6 percent, primarily reflecting the revenue increase and a more profitable revenue mix.


• Instant products revenue of $142.0 million was flat from the prior year driven by a 3 percent decrease in U.S. revenue, offset by a 10 percent increase internationally.


• Lottery systems revenue increased $4.6 million, or 8 percent to $64.8 million driven largely by domestic organic growth.

SOCIAL HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018

• Social revenue grew 11 percent to $105.1 million, reflecting the ongoing popularity of Bingo Showdown^™ and the success of the recently launched MONOPOLY themed casino app along with continued growth in our core apps including Jackpot Party® Social Casino.


• AEBITDA rose 34 percent to $27.0 million, and AEBITDA margin increased to 25.7 percent, primarily reflecting the continued growth in revenue and improved operating leverage.

DIGITAL HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018

• Total digital revenue increased to $61.2 million, primarily reflecting $46.5 million of revenue from NYX.


• AEBITDA was $11.9 million and AEBITDA margin was 19.4 percent, both reflecting the addition of NYX.


• On November 1, 2018 we completed the acquisition of Don Best Sports Corporation and DBS Canada Corporation (together "Don Best"), enhancing our offerings by adding a leading global supplier of real-time betting data and pricing of North American sporting events.

LIQUIDITY

• During the quarter ended September 30, 2018, the Company made net payments of $122.2 million on its debt, including $110.0 million of voluntary net repayments under its revolving credit facility and $12.2 million in mandatory amortization of its term loans, as well as payments to reduce capital leases.


• Net cash provided by operating activities increased $114.0 million to $223.5 million, principally related to improvements in operating results, working capital and a $63.4 million favorable change in accrued interest.


• Capital expenditures totaled $92.6 million in the third quarter of 2018, compared with $73.9 million in the prior-year period. The increase from the prior year was related to several long-term and highly accretive projects including ongoing platform development in Digital for expansion in U.S. and around the world, lottery systems installations in Maryland and Kansas and the acceleration of our installed base of participation games and WAP games, including the successful rollout of our James Bond franchise. For 2018, we continue to expect capital expenditures will be within a range of $360-$390 million, based on existing contractual obligations, planned investments and the inclusion of NYX.


• Subsequent to quarter end, we sold a real estate asset for $40.0 million in proceeds.