Same-store revenue in the North America Lottery segment grew approximately one percent for the year. That is a notable accomplishment when, in comparison, there was a record $1.6 billion Powerball jackpot in 2016. During 2017, IGT secured contract extensions with the California Lottery and New York Lottery, a seven-year contract with the West Virginia Lottery, as well as product sales with customers in Canada. The IGT PlaySpot™ mobile solution was also introduced to the Rhode Island Lottery. CEO STATEMENT In Italy, we secured the Scratch & Win concession through 2028. Lottery performance was noteworthy, as well. Excluding Late Numbers, which were also exceptionally high in 2016, we reached a record level of wagers in 2017. Non-late number wagers grew three percent for the year, driven by the 10eLotto game. The success in Lottery in Italy is a testament to how innovation can drive meaningful growth, even in a mature market. International Lottery same-store revenues were relatively stable in the full-year period. We expect more normal, low-to-mid-single digit International same-store revenue growth in 2018. During the year, we announced new contracts with customers in Colombia, Germany, Switzerland, Norway, New Zealand, and Sweden. Dear Recipient, I am pleased to report that IGT had a strong finish to 2017, amplifying our progress throughout the year. We delivered robust performance in the Lottery segment, improved results in the Gaming segment, and reinforced our disciplined cost management. An intense focus on bringing innovative content and technology to market is the cornerstone of IGT's strategy. Strengthening the Global Gaming Business Our Gaming business made considerable Meeting Our Financial Objectives progress during 2017. We brought compelling new products to market during the year, including six new game cabinets. The CrystalCurve™ cabinet is the flagship of IGT's new offerings, and we leverage it for both participation and for-sale games. It has become a significant driver of the Company's growth, and we expect that trend to continue. A strong second-half performance enabled IGT to meet all its financial objectives for the year, including the top end of our EBITDA guidance. Net debt was slightly better than the Company's outlook, despite the upfront Italian Scratch & Win concession payment. The results for the full year highlight the diversity and resilience of the IGT enterprise. Over 32,000 gaming machines were shipped in 2017, including four percent growth in replacement units. Internationally, replacement demand was strongest in Latin America. The success of our test-bank process and demand for the CrystalCurve™ Growing the Global Lottery Business Global lottery same-store revenues outside of Italy were up approximately one percent for the year. It's important to note that this performance was on top of high single-digit growth in each of the preceding two years. cabinet drove adouble-digit increase in replacement sales to North America casino customers. Annual Reports and Accounts 2017 Page \ 4

We grew our global installed base for the second consecutive year. This was led by robust International expansion, especially in South Africa and Greece, and with the addition of a new video bingo business. We also stabilised our North America installed base starting in the second half of the year. solutions that help our customers protect their players. In 2017, the Global Gambling Compliance Group (G4) named IGT the first gaming supplier to achieve responsible gaming accreditation for our land-based casino and lottery segments. IGT also received the Internet Responsible Gambling Compliance Assessment Program (iCAP) re-certification, which provides assurance to It was a strong year for systems and software sales for our Gaming customers. The IGT Advantage® casino management system was selected for the industry's most high-profile openings around the world, including Resorts World Catskills and MGM Cotai casinos. For VLTs, IGT had large system and software sales in Canada and Oregon during the year. operators and consumers that IGT's B2C websites and IGT platforms offered in the B2B market are compliant with the Internet Responsible Gambling Standards. During the year, we established our first-ever Office of Diversity and Inclusion at IGT. This office is working with the Company's senior leaders and business units to place a strong emphasis on ensuring that diversity and inclusion are not only embedded in our Company culture, but also into how we operate our business and interact with our customers and community. We've built on our core central system offerings with compelling add-on products such as Service Window,IGT PlaySpot™ mobile solution, Cardless Connect™, and Resort Wallet. These innovative products demonstrate IGT's commitment to player-centric design. Global Gaming Focus Our B2B sports betting platform is used by several lottery and commercial casino customers around the world, mostly in the International segment. The Company also has a full B2C sports betting offering in Italy that operates through a large network of IGT's 2017 results represent a combination of dynamics we expect to characterise our performance for the years to come: consistent global lottery expansion; better trends in gaming; and a continued focus on disciplined expense management. The diversity and scope of IGT's business, both in terms of products and geographies, are the key features and drivers of our full-year results. We have established a solid foundation for our continued growth in 2018, which we are confident will continue creating value for our shareholders. 1,750 points-of-sale, interactive offer. complemented by a full Awards In 2017, the IGT PlaySpot™ mobile solution was named Lottery Product of the Year at the International Gaming Awards. IGT was also chosen as Casino Supplier of the Year at the International Gaming Awards ceremony. Equally as noteworthy, the SPHINX 4D™ game and Cardless Connect™ mobile technology won Land-Based Gaming Innovation of the Year and Land-Based Product of the Year, respectively, at the Global Gaming Awards. Marco Sala Chief Executive Officer Responsible Gaming and Diversity & Inclusion IGT partners with gaming operators around the world to provide innovative technology and services, and it is our responsibility to create Annual Reports and Accounts 2017 Page \ 5

1. STRATEGIC REPORT The board of directors (the Directors) present their Strategic Report on International Game Technology PLC (the Company) and its subsidiaries (together the Group or IGT) for the financial year ended December 31, 2017. In these Annual Reports and Accounts we define International Game Technology PLC (the Company) and the Company and its subsidiaries (the Group or IGT), however, in the consolidated financial statements and in the notes to the consolidated financial statements we define International Game Technology PLC (IGT PLC or the Parent) and IGT PLC or the Parent and its subsidiaries (the Company). The Consolidated Balance Sheet is set out on page 76 and presents the financial position as at December 31, 2017 and December 31, 2016. Movements in cash balances are presented in the consolidated statement of cash flows. Major movements in the assets and liabilities have been explained within the respective notes to the consolidated financial statements. The net assets as at December 31, 2017 were $2.7 billion (2016: $3.7 billion). The cash and cash equivalents were $1.1 billion (2016: $0.3 billion). OPERATIONAL HIGHLIGHTS CORPORATE HIGHLIGHTS • Robust growth in our global lottery operations: secured several important new lottery contracts and extensions Reduces net debt and improves leverage profile Ships more than 32,000 gaming machines worldwide during 2017 Expansion of Lakeland, FL instant ticket printing with new state-of-the-art printing press • IGT receives Responsible Gaming Certification for its Global Gaming Operations IGT-led joint venture accepts 9 year extension for Italian Scratch and Win Concession Sale of Double Down Interactive LLC to Double U Games for cash of $825 million Appoints Professor Heather J. McGregor to Board of Directors Wins Casino Equipment Supplier at 10th Annual International Gaming Awards • • • • • • • • IGT PlaySpot™ Mobile Solution completes Nevada regulatory trial phase for MGM Resorts, International's playMGM Sports Betting App Introduces industry-first 4D Video Slots • There are no significant post balance sheet events. Annual Reports and Accounts 2017 Page \ 6

BUSINESS OVERVIEW The Group is the world's leading end-to-end gaming company, with leading market positions in North America and Italy, and the largest gaming content library in the world. The Group operates and provides an integrated portfolio of leading technology products and services across all gaming markets, including lottery management services, online and instant lotteries, instant ticket printing, electronic gaming machines, sports betting as well as interactive gaming. Leveraging a wealth of premium content, substantial investment in technology, in-depth customer intelligence, and operational expertise, the Group's gaming solutions anticipate the demands of consumers wherever they decide to play, providing its customers with cutting-edge solutions. The Group provides business-to-consumer (B2C) and business-to-business (B2B) products and services to customers in over 100 countries. The Group's integrated portfolio of technology, products, and services, including its best-in-class content, is shaping the future of the gaming industry by delivering the innovation that players want. The Group enables players to experience their favourite games across all channels and regulated segments, from gaming machines and lotteries to interactive and social gaming. The Group strives to create stakeholder value by adhering to the highest levels of service, integrity, responsibility, and innovation. Social responsibility is vital and the Group is committed to responsible gaming, giving back to its communities, and doing its part to protect the environment. IGT's lottery operations have been certified for compliance with the WLAAssociate Member Corporate Social Responsibility (CSR) Standards and Certification Framework. In February 2017, IGT achieved Internet Responsible Gambling Compliance Assessment Program (iCAP) re-certification. Also in 2017, IGT became the first gaming supplier to achieve responsible gaming accreditation for its land-based casino and lottery segments from the Global Gambling Guidance Group (G4).The certifications awarded to IGT by the most important industry associations worldwide are testimony to the Group's commitment to responsible gaming. The Company is headquartered in London, with its principal operating facilities located in Providence (Rhode Island, U.S.), Las Vegas (Nevada, U.S.), and Rome (Italy). Research and development and manufacturing are centralized in North America. The Group had over 12,000 employees as at December 31, 2017. The Group is organized into four business segments, which are supported by corporate shared services: North America Gaming and Interactive, North America Lottery, International, and Italy has five broad categories of products and services: • • • • • Lottery; Machine Gaming; Sports Betting; Interactive and Social Gaming; and Commercial Services. Annual Reports and Accounts 2017 Page \ 8

PRODUCTS AND SERVICES Lottery The Group supplies a unique set of lottery solutions to more than 100 customers worldwide. Lottery revenues are frequently designated for particular purposes, such as education, economic development, conservation, transportation, programs for senior citizens and veterans, health care, sports facilities, capital construction projects, cultural activities, tax relief, and others. Many governments have become increasingly dependent on their lotteries as revenues from lottery ticket sales are often a significant source of funding for these programs. The Group designs, sells, and operates a complete suite of point-of-sale terminals that are electronically linked with a centralized transaction processing system. The Group also specializes in the production of high-quality instant ticket games and provides printing services such as instant ticket marketing plans and graphic design, programming, packaging, shipping and delivery services. The Group has developed and continues to develop new lottery games, licenses new game brands from third parties and installs a range of new lottery distribution devices, all of which are designed to drive responsible same-store sales growth for its customers. In connection with its delivery of lottery services, the Group actively advises its customers on growth strategies. The Group also provides marketing services, in particular retail optimization and lottery brand awareness campaigns. The Group works closely with its lottery customers and retailers to help retailers sell lottery games more effectively. These programs include product merchandising and display recommendations, selection of appropriate lottery product mix for each location, and account reviews to plan lottery sales growth strategies. The Group leverages years of experience accumulated from being the concessionaire for the Italian Lotto, one of the world's largest lotteries. This B2C expertise in Italy, which includes management of all of the activities along the lottery value chain, allows the Group to better serve B2B customers in its North America Lottery and International segments, described below. Annual Reports and Accounts 2017 Page \ 9

Machine Gaming The Group designs, develops, manufactures and provides cabinets, games, systems and software for customers in regulated gaming markets throughout the world under fixed fee, participation and product sales contracts. The Group holds more than 450 global gaming licenses and does business with commercial casino operators, tribal casino operators, and governmental organizations (primarily consisting of Lottery operators). Large customers include MGM Resorts International, Caesars Entertainment, Boyd Gaming, and Station Casinos. The Group also offers a diverse range of machine cabinets which land-based casino customers can choose from to maximize functionality, flexibility, and player comfort. In addition to cabinets, the Group develops a wide range of casino games taking into account local jurisdictional requirements, market dynamics and player preferences. The Group provides video lottery terminals (VLTs), VLT central systems and VLT games primarily to government customers worldwide. VLTs are usually connected to a central system. The Group provides a dedicated client service team to each of its VLT and VLT systems customers. In addition, it provides amusement with prize machines (AWPs) and games to licensed operators in Italy and the rest of Europe. AWPs are typically low-denomination gaming machines installed in retail outlets and connected to a central system. The Group's game content combines elements of math, play mechanics, sound, art, and technological advancements with a library of entertainment licenses and a proprietary intellectual property portfolio to provide gaming products designed to provide a high degree of player appeal and entertainment. New content, popular brands, and appealing bonuses address player preferences and other market trends. The Group offers a wide array of casino-style games, in a variety of multi-line, multi-coin and multi-currency configurations. Examples of successful game content from the Group include: Wheel of Fortune®, Fort Knox®, and SPHINX 4D™. In addition, the Group offers a comprehensive range of system modules and applications for all areas of casino management. Gaming systems products include infrastructure and applications for casino management, customer relationship management, patron management, and server-based gaming. The Group's main casino management system offering is the Advantage System, which offers solutions and modules for a wide-range of activities from accounting and payment processing to patron management and regulatory compliance. Sports Betting The Group provides sports betting technology to lotteries and commercial operators in regulated markets, primarily in Italy and other countries in Europe as well as in the U.S. The Group offers a sports betting platform localized and certified for each market composed of either (1) core engine and associated support modules, as well as trading and risk management tools, provided to customers as a fully managed service, or (2) "software only" technical solutions to create a complete one-stop solution or to integrate new functionality to existing operations. The Group also provides secure retail betting solutions, point-of-sale display systems, call center facilities, internet and mobile betting technology, and fixed odds or pool betting options. WLA customers of the Group include: OPAP and Lottery National Belgium (LNB). Commercial customers include BetFred and MGM Resorts International. Through sports betting point-of-sale locations, the Group offers direct betting to customers on sports events (including basketball, horse racing, soccer, cycling, downhill skiing, cross country skiing, tennis, sailing, and volleyball), motor sports (car and motorcycle racing), and non-sports events connected with the world of entertainment, music, culture, and current affairs of primary national and international importance. Interactive and Social Gaming Interactive gaming (or iGaming) enables game play via the internet for real money or for fun (social). The Group designs, manufactures, and distributes a full suite of award-winning configurable products, systems, Annual Reports and Accounts 2017 Page \ 10

and services including: poker, table games, slot games, bingo, iLottery, virtual reality, mobile-to-retail products, player management systems, and market intelligence services. The Group holds more than 20 interactive gaming licenses worldwide and in Italy acts as both a complete internet gaming operator and mobile casino operator. The Group's diverse interactive B2B customer base includes Caesar's Entertainment, the Georgia Lottery, and William Hill. The interactive gaming B2B competitive landscape has evolved to mirror industry-wide trends of product and channel (online and mobile) convergence and vertical integration. The Group is playing a key role in this environment, with its omni-channel offering that connects retail offerings to mobile device offerings. As for content, the Group is launching premium brands across interactive channels (i.e., Wheel of Fortune® is a casino slot machine, VLT, iCasino game, eInstant game, and an instant ticket in several jurisdictions) offering extension of gameplay across multiple platforms. In the Customer Relationship Management (CRM) part of the interactive business, a single player account management system connects retail with online together with an advanced analytics framework, thereby ensuring a single view of the player which allows cross-selling and upselling via effective promotions, churn management and customer care programs. Commercial Services The Group develops innovative technology to enable lotteries to offer commercial services over their existing lottery infrastructure or over standalone networks separate from the lottery. Leveraging its distribution network and secure transaction processing experience, the Group offers high-volume processing of commercial transactions including prepaid cellular telephone recharges, bill payments, e-vouchers and retail-based programs, electronic tax payments, stamp duty services, prepaid card recharges, and money transfers. These services are primarily offered outside North America. BUSINESS SEGMENTS North America Gaming and Interactive (NAGI) The NAGI segment develops and delivers leading games, systems and solutions for land-based casinos, DoubleU Games' DoubleDown casino free-to-play social casino app, and interactive for-wager online play. The segment is responsible for research and development for commercial gaming products that are distributed to casinos throughout the world. NAGI's operations are based in Las Vegas, Nevada, and has sales offices throughout North America. NAGI provides a full suite of casino-related products and solutions to its commercial, government, and tribal customers in the U.S. and Canada. The NAGI segment includes revenue from the sale or lease of commercial gaming machines and software to casinos and government entities in the U.S. and Canada. NAGI develops, sells, and licenses casino management systems. These systems help casino customers to increase operational efficiencies and enhance player engagement by delivering personalized player amenities and promotional offers. Additionally, service revenue is generated for commercial gaming from the maintenance of machines and systems. For land-based casino customers, NAGI provides leadership in the development and distribution of global premium product, including licensed content such as Wheel of Fortune® slots. In addition, the Global Core Product organization within NAGI develops slot themes such as Cleopatra® and Double Diamond® and video poker themes such as Game King®. Annual Reports and Accounts 2017 Page \ 11

North America Lottery (NALO) The NALO segment develops and delivers innovative and future-focused lottery solutions, performing research and development for all lottery-related products globally. Based in Providence (Rhode Island, U.S.), NALO is the Group's global lottery product development and delivery organization that supports WLA customers worldwide and provides end-to-end support to WLA North America customers with a single point of contact, leveraging the Group's full lottery product suite. The NALO segment supports 39 of the 45 U.S. lotteries. NALO includes revenue related to the sale or lease of lottery central system hardware and software, and the sale or lease of lottery and gaming terminals to government entities. The majority of the revenue earned in the NALO segment is derived from facilities management contracts. The Group also has lottery management agreements in Indiana and New Jersey. NALO generates revenue from the sale of physical instant tickets to government entities, and earns recurring revenue from participation games in the form of VLTs in Rhode Island, Delaware, and New York. International The International segment is a global leader in delivering innovative end-to-end solutions and services across all channels to regulated clients in Commercial Gaming and Lottery sectors. The International segment is responsible for the strategic development and operation management for all markets in Europe (except Italy), the Middle East, Africa, Central, and Latin America (including Mexico), the Caribbean, Asia Pacific, and Oceania, across the Group's entire product portfolio. In Italy, the International segment supplies AWP content and commercial gaming systems and gaming machines to third parties. The Group's global strategy capitalizes on its experience in Italy and North American markets, while customizing products for foreign languages, unique local preferences, and regulatory requirements. The International segment includes revenue from the sale, lease or revenue share of commercial gaming machines, game software, central systems, loyalty and bonusing systems and services, field services supplied to gaming operators and government entities, and from the sale or hosting or real-money interactive wagering games played over the internet. The Group offers a variety of interactive gaming products within the International segment, including poker, casino, bingo, and mobile systems. In addition, it offers products and services to sports betting operators, including retail and full online support. The International segment includes revenue from the sale or lease of lottery central system hardware and software, related marketing, operations and technical services, and the sale or lease of lottery terminals to government entities. The International segment also includes revenue from professional services in the form of lottery facility management and lottery operation fees. Another source of revenue from some lottery customers in Latin America and Caribbean regions includes point-of-sale transaction processing services such as prepaid cellular telephone recharges, bill payments, and money transfers. Italy The majority of the revenue earned in the Italy segment is derived from lottery and machine gaming concessions. The Italy segment also includes sports betting, interactive gaming, and commercial services. The Italy segment operates and provides a full range of B2C gaming products, including: Lottery Since 1998, the Group has been the concessionaire for the Italian Lotto game (management of operations commenced in 1994). Beginning in November of 2016, the Group's new Lotto concession includes partners as part of a joint venture. The Group has gained substantial experience in managing the activities along the Annual Reports and Accounts 2017 Page \ 12

lottery value chain, such as collecting wagers through its network, paying out prizes, managing all accounting and other back-office functions, running advertising and promotions, operating data transmission networks and processing centers, training staff, providing retailers with assistance and supplying materials including play slips, tickets and receipts, and marketing and point-of-sale materials for the game. Since 2004, the Group also has been the concessionaire for instant ticket lotteries, which are games involving pre-printed paper tickets for the Gratta e Vinci instant game. The Group operates approximately 40,000 terminals in 34,000 Lotto points-of-sale and has 62,400 instant ticket points-of-sale. Machine Gaming With respect to the Group's machine gaming concessions in Italy, the Group directly manages stand-alone AWPs and VLTs that are installed in various retail outlets and linked to a central system. The Group collects the wagers, deducts the applicable gaming taxes, and pays out prizes to winners and fees to retailers. The Group also provides systems and machines to other machine gaming concessionaires, either as a product sale or with long-term, fee-based contracts where the service revenue earned is generally based on a percentage of wagers, net of applicable gaming taxes. At December 31, 2017, the Group had approximately 76,000 machines in the Italian installed base. Sports Betting The Group operates an expansive land-based B2C betting network in Italy through its "Better" brand on a fixed odds, parimutuel, or virtual betting basis. Sports events and non-sports events connected with current affairs are the subjects of legal betting in Italy. As a sports betting license concessionaire, with approximately 1,400 corner shops and 350 points-of-sale, the Group offers a sports betting platform composed of a core engine and associated support modules. It also provides secure retail betting solutions, point-of-sale display systems, call center facilities, internet betting technology, and fixed odds or pool betting options. Interactive The Group provides all of the internet games currently authorized in the Italian market, including skill games such as poker and other board and skill games; bingo; casino games such as roulette and blackjack and reel games; live dealer roulette, blackjack, baccarat, and poker; horse and sports betting (fixed odds); pool games, such as a local game based on soccer events (parimutuel); virtual betting on events such as car, motorcycle, horse, and dog races and tennis or soccer matches; lottery including Lotto and "10 and Lotto" and Superenalotto with "Win for Life" and "Eurojackpot"; and instant lottery (iGratta e Vinci online). Commercial Services In addition to the gaming products and related services described above, the Group processes high volumes of transactions in commercial, payment, and eMoney services in Italy including prepaid cellular telephone recharges, e-vouchers and retail-based programs, bill payments, electronic tax payments, stamp duty services, and prepaid card recharges. The Group's commercial payment and eMoney services network comprises approximately 60,000 points-of-sale divided among tobacconists, bars, petrol stations, newspaper stands, and motorway restaurants. Annual Reports and Accounts 2017 Page \ 13

STRATEGIC APPROACH TO SUSTAINABILITY As a group operating on a global scale, IGT embraces the fundamental principles that need to guide corporate actions in the marketplace, from being a good corporate citizen to actively engaging on a local level in the jurisdictions in which the Group operates. The Group's long-term sustainability strategy identifies three main categories: • Economic sustainability: the generation and distribution of direct economic value to meet the expectations of shareholders, while creating value for all of the corporate stakeholders; • Social sustainability: the Group supports and promotes responsible gaming throughout the industry, while supporting research and development of tools addressing problem gambling, including preventing underage and excessive gambling. In addition, IGT fosters a diverse and inclusive workforce, promotes human rights, and ensures the safety at work across the entire supply chain. Finally, the Group supports a variety of charitable initiatives and employee volunteerism opportunities to make a positive and meaningful impact on local communities; and • Environmental sustainability: the Group works to minimise its environmental impact across its entire value chain, and strives to develop new products and processes that meet rigorous quality and safety standards. From sourcing and production to the use and disposal of products, the Group works in partnership with suppliers and customers to lower its environmental footprint. The Group's sustainability efforts go beyond government-mandated regulations to ensure value creation for all stakeholders, including governing and regulatory bodies, customers, and our employees. Our internal corporate culture is guided by a set of five values: being passionate, pioneering, responsible, authentic, and collaborative. While operating globally, the Group also conducts business with local governments and organizations, which calls for a strong corporate culture supporting a system of checks and balances to ensure strict adherence to the principles of lawful conduct in every jurisdiction served. The Group's Code of Conduct specifies the integrity expected of all employees, directors, officers, and consultants, as well as any third-party representatives who deal with or act on behalf of the Group and its controlled affiliates, inspiring good corporate governance standards. Integrity in terms of behaviour, as well as business conduct are the foremost prerequisites for creating value for all stakeholders. Corporate Social Responsibility (CSR) touches upon every aspect of the business, from marketing and technology all the way to the supply chain. The Group is committed to pursuing global sustainability goals according to advanced sustainability practices, such as: • • • • • Acknowledging all stakeholders' legitimate interests; Communicating transparently via an open dialogue with stakeholders; Managing direct and indirect impacts for all stakeholders; Acknowledging and minimizing potential negative impacts; and Adopting transparent and accountable practices. By being compliant with emerging regulations and voluntarily disclosing information through an annual Sustainability Report, the Group is leveraging the long-standing results of its CSR strategy to strengthen its reputation, improve customer confidence, and create a competitive advantage. IGT values workplace diversity and respect for all employees. The Group follows the principles set by the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work in the Annual Reports and Accounts 2017 Page \ 14

adhering countries where it operates and is committed to providing a work environment where everyone is treated with fairness, dignity, and respect. The Group will not discriminate against anyone based on race, creed, religion or belief, national origin, age, disability, sexual preference, sexual identity, marital or civil partner status, pregnancy and maternity, military status, veteran status, or any other legally protected status in accordance with applicable law and regulations. Any Group employee found to have discriminated against another Group employee will be subject to disciplinary action, which could result in dismissal. The Group has a confidential Integrity Line, managed by an independent third party, which can be used anonymously to report activities that may involve unethical and unlawful conduct. The Group has conducted an ISO 26000 assessment (social responsibility standards guidance published by the International Organization for Standardization). One takeaway from this assessment was the reinforcement that the Group's operations should be properly protected and not directly exposed to relevant human rights violation risks. The Group currently has in place a due diligence system to identify the real risks related to its supply chain structure and operations, mitigate the risk of such exposure in its supply chain, and undertake proper preventative actions to ensure human rights are properly protected. IGT has a zero-tolerance approach to modern slavery. The Group is committed to acting ethically and with integrity in all business dealings and relationships, including implementing and enforcing effective systems and controls to reduce the risk of modern slavery, and human rights violations generally, from occurring in both our businesses and our suppliers' businesses. The Group is committed to working toward the goal of eliminating such breaches of human rights globally by starting with its supply chain as part of the Group's CSR initiative. Annual Reports and Accounts 2017 Page \ 15

KEY PERFORMANCE INDICATORS The Group assesses its performance against a wide range of measures. These key performance indicators help the business measure progress against the Group's core strategies. Group revenue comprises service revenue and product sales. Group service revenue is principally derived from multi-year contracts under which we earn revenue over time as we provide the related services. Product sales are derived principally from the installation of new and replacement systems, software and lottery terminals, and gaming machines. Product sales in our business fluctuate due to the mix, volume, and timing of product sales contracts and therefore may not be comparable from period to period. The Group uses certain key performance indicators and terminology, which we believe are useful in explaining the trends of our business, including: Constant Currency Information: The discussion below includes information calculated at constant currency. The Company calculates constant currency by applying the prior-year/period exchange rates to current financial data expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations originating from translating the income statement of the Company's foreign entities into U.S. dollars. These constant currency measures are non-GAAP measures. Although the Company does not believe that these measures are a substitute for GAAP measures, it does believe that such results excluding the impact of currency fluctuations period-on-period provide additional useful information to investors regarding operating performance on a local currency basis. For example, if an entity with euro functional currency recorded net revenues of €100 million for 2017 and 2016, the Group would report $120.0 million in net revenues for 2017 (using an average exchange rate of 1.20) compared to $110.0 million for 2016 (using an average exchange rate of 1.10). The constant currency presentation would translate the 2017 net revenue using the 2016 exchange rates, and indicate that the underlying net revenue on a constant currency basis were unchanged year-on-year. The Group presents such information in order to assess how the underlying business has performed prior to the translation impact of fluctuations in foreign currency exchange rates. Service revenue For the years ended December 31 Change ($ thousands) 2017 2016 $ % North America Gaming and Interactive 780,633 975,206 (194,573) (20.0) International 557,049 512,668 44,381 8.7 4,134,631 4,376,023 (241,392) (5.5) Purchase accounting 722 (437) 1,159 > 200.0 Service revenue in 2017 decreased by $239.0 million, or 5.5%, compared to 2016. On a constant currency basis, service revenue in 2017 decreased by $295.4 million, or 10.9%, compared to 2016. Annual Reports and Accounts 2017 Page \ 16 4,136,5564,375,586(239,030)(5.5) Corporate Support1,203 1,203 Italy1,703,9011,759,843(55,942)(3.2) North America Lottery1,093,0481,128,306(35,258)(3.1) Business Segments

Service revenue in the NAGI segment in 2017 decreased by $194.6 million, or 20.0%, compared to 2016. On a constant currency basis, service revenue in the NAGI segment decreased by $194.5 million, or 19.9%, compared to 2016. Service revenue in the NALO segment in 2017 decreased by $35.3 million, or 3.1%, compared to 2016. On a constant currency basis, service revenue in the NALO segment decreased by $35.9 million, or 3.2%, compared to 2016. Service revenue in the International segment in 2017 increased by $44.4 million, or 8.7%, compared to 2016. On a constant currency basis, service revenue in the International segment in 2017 increased by $47.4 million, or 9.2%, compared to 2016. Service revenue in the Italy segment in 2017 decreased by $55.9 million, or 3.2%, compared to 2016. Product sales For the years ended December 31 Change ($ thousands) 2017 2016 $ % North America Gaming and Interactive 377,065 398,248 (21,183) (5.3) International 332,015 314,637 17,378 5.5 802,403 779,449 22,954 2.9 802,403 778,310 24,093 3.1 Product sales fluctuate from period to period due to the mix, volume, and timing of product sales transactions. Product sales in 2017 increased by $24.1 million, or 3.1%, compared to 2016. On a constant currency basis, product sales in 2017 increased by $16.3 million, or 2.1%, compared to 2016. Product sales in the NAGI segment in 2017 decreased by $21.2 million, or 5.3%, compared to 2016. On a constant currency basis, product sales in the NAGI segment decreased by $22.0 million, or 5.5%, compared to 2016. Product sales in the NALO segment in 2017 increased by $26.9 million, or 41.2%, compared to 2016. On a constant currency basis, product sales in the NALO segment increased by $26.1 million, or 40.0%, compared to 2016. Product sales in the International segment in 2017 increased by $17.4 million, or 5.5%, compared to 2016. On a constant currency basis, product sales in the International segment increased by $11.2 million, or 3.6%, compared to 2016. Annual Reports and Accounts 2017 Page \ 17 Purchase accounting(1,139)1,139100.0 Italy1,1491,295(146)(11.3) North America Lottery92,17465,26926,90541.2 Business Segments

Segment operating (loss) income For the years ended December 31 Change ($ thousands) 2017 2016 $ % North America Gaming and Interactive 278,963 349,275 (70,312) (20.1) International 163,799 142,200 21,599 15.2 1,210,327 1,374,161 (163,834) (11.9) Purchase accounting (1,064,330) (468,125) (596,205) (127.4) Operating income in the NAGI segment in 2017 decreased by $70.3 million, or 20.1% ($69.0 million, or 19.8% on a constant currency basis), compared to 2016, while segment operating margin decreased from 25.4% in 2016 to 24.1% in 2017, principally due to the product sales versus service revenue margin mix. The principal driver of the $69.0 million constant currency decrease in segment operating income was the $47.4 million decrease in operating income related to DoubleDown, principally related to the sale of DoubleDown on June 1, 2017. Operating income in the NALO segment decreased by $10.2 million, or 3.4%, compared to 2016. On a constant currency basis, operating income in the NALO segment decreased by $11.0 million, or 3.7%, compared to 2016. Operating income in the International segment increased by $21.6 million, or 15.2%, compared to 2016. On a constant currency basis, operating income in the International segment increased by $24.5 million, or 17.3%, compared to 2016. Operating income in the Italy segment decreased by $105.0 million, or 18.0%, compared to 2016. On a constant currency basis, operating income in the Italy segment decreased by $119.6 million, or 20.5%, compared to 2016. Operating expense related to Corporate support decreased by $49.4 million compared to 2016, principally due to the $27.2 million gain on the sale of DoubleDown to DoubleU Games Co., Ltd. on June 1, 2017 and a reduction of selling, general and administrative expense of $17.9 million associated with the January 2017 sale of a pre-merger IGT receivable that was substantially fully reserved at the date of acquisition. Operating expense related to Purchase accounting increased by $596.2 million compared to 2016, principally due to the $714.0 million impairment loss in the NAGI segment, partially offset by the absence of the prior year impairment loss of $30.0 million for certain indefinite lived trademarks in the NAGI segment and a decrease in depreciation and amortization of $43.3 million from DoubleDown, principally associated with the sale of DoubleDown on June 1, 2017. Annual Reports and Accounts 2017 Page \ 18 (51,092)660,436(711,528)(107.7) Corporate support(197,089)(245,600)48,51119.8 Italy478,540583,504(104,964)(18.0) North America Lottery289,025299,182(10,157)(3.4) Business Segments

Segment operating results The following section gives an overview of the Group's revenue and operating income by business segment. NAGI segment Revenue in the NAGI segment in 2017 decreased by $215.8 million, or 15.7%, compared to 2016. At constant currency, revenue in the NAGI segment in 2017 decreased by $216.4 million, or 15.8%, compared to 2016. Service revenue Service revenue in the NAGI segment in 2017 decreased by $194.6 million, or 20.0%, compared to 2016. At constant currency, service revenue in the NAGI segment decreased by $194.5 million, or 19.9%, compared to 2016. The following table shows changes in service revenue for 2017 compared to 2016 on a constant currency basis: Service Revenue Change Constant Currency Foreign Currency ($ thousands) Change Social gaming (167,016) (565) (167,581) Other 9,879 26 9,905 The principal drivers of the $194.5 million decrease in service revenue were as follows: • A decrease of $167.0 million in Social gaming associated with a decrease in service revenue of $149.2 million related to the sale of DoubleDown on June 1, 2017, along with a decrease in service revenue from a lower volumes of chips wagered; and • A decrease of $37.3 million in Machine revenue principally associated with a 6.8% decrease in the casino installed base (24,472 machines installed at December 31, 2016 compared to 22,807 machines installed at December 31, 2017) and a decrease in the average yield. Product sales Product sales in the NAGI segment in 2017 decreased by $21.2 million, or 5.3%, compared to 2016. At constant currency, product sales in the NAGI segment decreased by $22.0 million, or 5.5%, compared to 2016. The following table shows changes in product sales for 2017 compared to 2016 on a constant currency basis: Product Sale Change Constant Currency Foreign Currency ($ thousands) Change Gaming machine sales (5,879) 283 (5,596) (21,958) 775 (21,183) Annual Reports and Accounts 2017 Page \ 19 Non-machine sales(16,079)492(15,587) (194,458)(115)(194,573) Machine revenue(37,321)424(36,897)

The principal drivers of the $22.0 million decrease in product sales were as follows: • A decrease of $5.9 million in Gaming machine sales principally associated with a decrease of 1,665 machines sold in 2017 compared to 2016; and • A decrease of $16.1 million in Non-machine sales driven by significant system related and intellectual property sales in 2016 that did not recur in 2017. Operating income Operating income in the NAGI segment in 2017 decreased by $70.3 million ($69.0 million on a constant currency basis) compared to 2016, while segment operating margin decreased from 25.4% in 2016 to 24.1% in 2017, principally due to the product sales versus service revenue margin mix. The principal driver of the $69.0 million constant currency decrease in segment operating income was the $47.4 million decrease in operating income related to DoubleDown, principally related to the sale of DoubleDown on June 1, 2017. NALO segment Revenue in the NALO segment in 2017 decreased by $8.4 million, or 0.7%, compared to 2016, driven by a $35.3 million decrease in service revenue partially offset by a $26.9 million increase in product sales. At constant currency, revenue in the NALO segment in 2017 decreased by $9.8 million, or 0.8%, compared to 2016. Service revenue Service revenue in the NALO segment in 2017 decreased by $35.3 million, or 3.1%, ($35.9 million, or 3.2%, at constant currency) compared to 2016. The following table shows changes in service revenue for 2017 compared to 2016 on a constant currency basis: Service Revenue Change Constant Currency Foreign Currency ($ thousands) Change Lottery (22,116) 13 (22,103) Machine revenue (374) (1) (375) (35,865) 607 (35,258) The principal drivers of the $35.9 million decrease in service revenue were as follows: • A decrease in Lottery service revenue of $22.1 million, principally driven by lower service revenue related to the record multi-state jackpot activity in 2016, partially offset by an increase in same-store revenue (revenue from existing customers as opposed to new customers) of 5.1% from an increase in instant tickets and other draw-based games; and • A decrease in Lottery management services revenues of $17.0 million in 2017, primarily related to a decrease in pass through service revenue related to reimbursable expenses and a $1.7 million decrease in incentives from the Company's contract in New Jersey. Annual Reports and Accounts 2017 Page \ 20 Other3,5835954,178 Lottery management services(16,958)(16,958)

Product sales Product sales in the NALO segment in 2017 increased by $26.9 million, or 41.2%, ($26.1 million, or 40.0%, at constant currency), compared to 2016. The following table shows changes in product sales for 2017 compared to 2016 on a constant currency basis: Product Sale Change Constant Currency Foreign Currency ($ thousands) Change Lottery 13,955 598 14,553 26,075 830 26,905 The principal driver of the $26.1 million increase in product sales was as follows: • An increase in Lottery product sales of $14.0 million driven primarily by terminal sales in Canada and instant ticket printing sales; and • An increase in Gaming product sales of $12.1 million driven by system and related hardware sales in Canada and Oregon. Operating income Operating income in the NALO segment in 2017 decreased by $10.2 million, or 3.4%, ($11.0 million, or 3.7%, on a constant currency basis) compared to 2016, while segment operating margin decreased from 25.1% in 2016 to 24.4% in 2017. The principal drivers of the $11.0 million constant currency decrease in segment operating income was the decrease in service revenue related to lower multi-state jackpot activity in 2017, partially offset by a decrease in depreciation and amortization of $14.5 million driven by contract extensions with several customers in the U.S. International segment Revenue in the International segment in 2017 increased by $61.8 million, or 7.5%, compared to 2016. At constant currency, revenue in the International segment in 2017 increased by $58.6 million, or 7.1%. Service revenue Service revenue in the International segment in 2017 increased by $44.4 million, or 8.7%, ($47.4 million, or 9.2%, at constant currency) compared to 2016. The following table shows changes in service revenue for 2017 compared to 2016 on a constant currency basis: Annual Reports and Accounts 2017 Page 1 21 Gaming (non-machine sales)12,12023212,352

Service Revenue Change Constant Currency Foreign Currency ($ thousands) Change Lottery 23,615 (5,078) 18,537 Other 6,900 2,124 9,024 The principal drivers of the $47.4 million increase in service revenue were as follows: • An increase of $16.9 million in gaming service revenue principally associated with: • An increase of $13.0 million from VLT software service revenue from a customer in central Europe principally related to the achievement of certain contractual milestones; • An increase of $6.6 million from the launch of the Greece video lottery terminal (VLT) program; and • A decrease of $2.6 million associated with conversion sales principally in Europe. • An increase of $23.6 million in Lottery service revenue driven by a $23.0 million increase in service revenue from a customer in central Europe principally related to the achievement of certain contractual milestones. Product sales Product sales in the International segment in 2017 increased by $17.4 million, or 5.5%, ($11.2 million, or 3.6% at constant currency) compared to 2016. The following table shows changes in product sales for 2017 compared to 2016, on a constant currency basis: Product Sales Change Constant Currency Foreign Currency ($ thousands) Change Gaming machine (3,493) 3,765 272 11,198 6,180 17,378 The principal drivers of the $11.2 million constant currency increase in product sales were an increase of $14.7 million in Lottery principally associated with an $8.2 million increase in Europe and a $5.8 million increase in Latin America. Operating income Operating income in the International segment in 2017 increased by $21.6 million, or 15.2%, (an increase of $24.5 million, or 17.3%, on a constant currency basis) compared to 2016, while segment operating margin increased from 17.2% in 2016 to 18.4% in 2017. The principal drivers of the $24.5 million constant currency increase in segment operating income were as follows: Annual Reports and Accounts 2017 Page 1 22 Other(12)1,4321,420 Lottery14,70398315,686 47,382(3,001)44,381 Gaming16,867(47)16,820

• An increase of $21.5 million related to the decrease in selling, general, and administrative costs principally due to actions taken to reduce costs and a decrease in incentive based compensation of $8.2 million; • An increase of $14.5 million associated with the $47.4 million constant currency increase in service revenue; • An increase of $4.3 million related to the absence of the prior year impairment loss; and • A decrease of $17.8 million associated with product sales, due principally to product mix, an increase in delivery costs principally related to product sales in Greece, Germany and Argentina. Italy segment Service revenues Service revenues in the Italy segment in 2017 decreased by $55.9 million, or 3.2%, compared to 2016, driven by a $132.6 million decrease in Lotto service revenues. The components of service revenues in the Italy segment in 2017 and 2016 are as follows: For the years ended December 31 Change ($ thousands) 2017 2016 $ % Service revenue Instant tickets 303,605 289,792 13,813 4.8 Machine gaming 652,548 626,371 26,177 4.2 Sports betting 146,021 118,243 27,778 23.5 1,703,901 1,759,843 (55,942) (3.2) The following table shows changes in service revenue for 2017 compared to 2016 on a constant currency basis: Service Revenue Change Constant Currency Foreign Currency Change ($ thousands) $ % Lotto (145,334) 12,728 (132,606) (26.4) Lottery (140,831) 22,038 (118,793) (16.8) Commercial Services (355) 3,774 3,419 (0.30) Interactive gaming 3,877 1,600 5,477 8.10 The constant currency movements in service revenues for each of the core activities within the Italy segment are discussed below. Annual Reports and Accounts 2017 Page 1 23 (108,838)52,896(55,942)(6.20) Sports Betting21,5936,18527,77818.30 Machine gaming6,87819,29926,1771.1 Instant tickets4,5039,31013,8131.6 Interactive gaming53,41147,9345,47711.4 Commercial services130,273126,8543,4192.7 Lottery721,648840,441(118,793)(14.1) Lotto418,043550,649(132,606)(24.1)

Lotto At constant currency, Lotto service revenue in 2017 decreased by $145.3 million or 26.4% compared to 2016, due principally to $85.6 million of service revenue amortization associated with the €770.0 million upfront payment related to the new Lotto concession in 2016, a reduction in the fee earned (which is a fixed percentage of wagers under the new concession) and a decrease in wagers for late numbers (one of the 90 numbers of the Lotto game in Italy that has not been drawn for 100 drawings), partially offset by a 9.4% increase in 10eLotto wagers, as shown in the table below: For the years ended December 31 Change (€ millions) 2017 2016 Wagers % 10eLotto wagers 5,160 4,716 444.0 9.4 Wagers for late numbers 310 1,150 (840.0) (73.0) Instant tickets At constant currency, instant ticket service revenue in 2017 increased by $4.5 million, or 1.6%, compared to 2016, principally due to a 3.1% increase in the number of tickets sold which was partially offset by a 1.6% decrease in the average price point (the average value of the ticket sold), as detailed below: For the years ended December 31 Change (€ millions) 2017 2016 Amount % Total sales 9,065 8,935 130 1.5 Average price point 4.98 5.06 (0.08) (1.6) Machine Gaming At constant currency, machine gaming service revenue in 2017 increased by $6.9 million, or 1.1%, compared to 2016. Increased vertical integration in 2017 drove increased service revenues, which were almost fully offset by the 1.6% decrease in total machine gaming wagers (as shown in the table below) and an increase in gaming machine taxes that went into effect at the end of April 2017. For the years ended December 31 Change (€ millions) 2017 2016 Amount % VLT wagers 5,543 5,460 83 1.5 Total wagers 9,492 9,648 (156) (1.6) (Installed at the end of December) VLTs installed (B2B) 8,592 8,840 (248) (2.8) Total machines installed 76,167 78,813 (2,646) (3.4) Total wagers and machines installed corresponds to the management of VLTs and AWPs under the Group's concession. Annual Reports and Accounts 2017 Page 1 24 AWP machines installed56,59058,937(2,347)(4.0) VLTs installed (B2C)10,98511,036(51)(0.5) AWP wagers3,9494,188(239)(5.7) Total tickets sold1,8201,766543.1 7,4818,093(612.0)(7.6) Core wagers2,0112,227(216.0)(9.7)

Commercial Services At constant currency, commercial services service revenue in 2017 decreased by $0.4 million, or 0.3%, compared to 2016, principally due to a decrease in the number of transactions processed. Sports Betting At constant currency, Sports Betting service revenue in 2017 increased by $21.6 million, or 18.3% compared to 2016, principally due to a 12.2% increase in wagers in 2017 compared to 2016 along with a decrease in the payout as shown in the table below. Network optimization and higher levels of online play drove the increase in wagers. For the years ended December 31 Change (€ millions) 2017 2016 Wagers % Fixed odds sports betting and other wagers 959 855 104 12.2 Interactive Gaming At constant currency, interactive gaming service revenue in 2017 increased by $3.9 million, or 8.1%, compared to 2016, driven by a 5.2% increase in interactive game wagers. For the years ended December 31 Change (€ millions) 2017 2016 Wagers % Product sales Product sales in the Italy segment amounted to $1.1 million and $1.3 million in 2017 and 2016, respectively. Operating income Operating income in the Italy segment in 2017 decreased by $105.0 million, or 18.0% compared to 2016, while segment operating margin amounted to 28.1% and 33.1% in 2017 and 2016, respectively. The $119.6 million constant currency decrease in operating income in the Italy segment in 2017 was principally driven by the $145.3 million decrease in Lotto service revenue, partially offset by a $30.5 million increase in operating income from Sports Betting driven by the $21.6 million increase in Sports Betting service revenues and the $11.9 million decrease in Sports Betting depreciation and amortization. Non-financial measures Non-financial measures have a useful role alongside financial measures to inform decision making and to evaluate the Group's performance. The Group is evolving the way it evaluates performance in areas such as people, corporate responsibility and customers, and will aim to disclose non-financial measures in the future. Annual Reports and Accounts 2017 Page 1 25 Interactive game wagers1,7451,659865.2 Sports betting payout82.7%84%

FUTURE STRATEGY The Group's vision is to maintain our leading presence in the gaming industry through continued innovation, compelling product offerings, and excellent government and customer relationships. The Group has the resources, content, technologies, and the largest research and development budget in the industry, to support this vision. The Group is focused on five broad strategic initiatives: • • • • • Grow lottery worldwide; Gain gaming market share globally; Expand the Interactive segment and distribution of IGT's content library; Protect the Italy business; and Grow profits and generate cash. NAGI NAGI is focused on regaining its market leading position by supporting a continued turnaround in its premium recurring category, recapturing market share in the core business, and expanding into new gaming verticals and concepts. The Group will support these efforts through concentrated research and development investment, disciplined game and cabinet development, comprehensive customer engagement, and thorough exploration of player preferences. The Group is also well positioned to continue to increase its systems' market share with the Group's best-in-class systems agnostic software technology, and to pursue opportunities in under-served markets. NALO NALO is focused on continuing to drive same-store sales growth and to achieve growth in instant tickets by innovating game development, changing the distribution paradigm, modernising customer and retailer technology solutions, and driving customer engagement, loyalty and performance. International The International segment is focused on stabilizing its position in commercial gaming by growing its installed base, achieving market share expansion for shipped units, installing new systems, and continuing to turnaround the Australia business. The International lottery segment is focused on securing several new contracts, rebids, and multiple contract extensions, thereby strengthening the business's recurring revenue stream and further strengthening its competitive positioning for upcoming contract opportunities. Italy The Italy segment is focused on continuing to protect profitability by continuing to pursue operational efficiency and investing to reinforce long-term strategic positioning. In lottery, the segment will focus on sustaining long-term scratch and win growth and overall wager stability, leveraging digital, product innovation, and channel convergence, while gaming revenue and profitability will to continue to be supported by new content development and a strengthened distribution network. In addition, the Italy segment will continue to see improvements in its betting and interactive performance through strengthened product offering, improved platform quality, and other enhancements. Annual Reports and Accounts 2017 Page 1 26

MARKET TRENDS Lottery A main driver behind lottery growth in maturing markets is same-store sales optimization, while new or under penetrated markets are more focused on driving growth in the player base. The Group anticipates that in North America, instant tickets will continue to outpace online growth through portfolio optimization and advancements in the procurement process. Interactive lottery has increased current player engagement and reached new audiences, and it will continue to be a growth driver in existing regulated markets (many of which are in Europe) as well as a source of growth in newly regulated markets. Gaming Machine The North America casino market recovery is expected to continue, with gross gaming revenue (GGR) forecasted to grow at a 1.5% compound annual growth rate (CAGR) over the next four years, according to H2 Gambling Capital. Machine replacement rates are expected to continue to experience low single digit growth in North America while new and expansionary opportunities are expected to achieve more stable short-term growth than in recent years. International markets are expected to benefit from ongoing appreciation in gaming replacements while new market expansion is expected to experience volatility over the next few years. Interactive The expansion of the Interactive business is expected from new nationally regulated markets, ongoing adoption of mobile devices, and product innovation. Growth in existing regulated markets is expected to continue to come mainly from interactive betting, engagement with existing and new players alike. lottery, and casino with mobile adoption increasing Annual Reports and Accounts 2017 Page 1 27

PRINCIPAL RISKS AND UNCERTAINTIES The Group seeks to minimise, control, and monitor the impact of risks to profitability whilst maximising the opportunities they present. The Group acknowledges that it faces a number of risks which could impact the achievement of its strategy. While it is not possible to identify or anticipate every risk due to the changing business environment, the Group has an established risk management process to manage and mitigate risk. The Group's process for identifying and managing risk is set by the board of directors. Risks are considered in terms of their impact and likelihood from both a financial and reputational perspective. Although not exhaustive, the principal risks facing the Group are essentially categorised into the following broad risk categories: • • • • Risks relating to the Group's business and industry; Legal and compliance risks; Operational risks; and Financial and tax risks. The potential impact of these risks and the mitigating controls in place to manage their impact are as follows: business strategy and remain and other policy makers across Annual Reports and Accounts 2017 Page 1 28 RISK IMPACT MITIGATION Business and industry Reductions in market discretionary consumer spending, being affected by general economic or political conditions. The global economic and political climate may impact the Group and its operations, business, financial conditions or prospects. We constantly review our closely aligned with governments our markets. We also have a diverse portfolio across many regions. Termination of or failure to renew or extend contracts and early termination or non-renewal of government concessions. A significant portion of the Group's business and profitability will continue to depend upon the portfolio of long-term contracts and the concessions awarded. Failure in the continued ability to retain and extend our existing contracts and win new contracts could have a materially adverse effect on the results of the Group's operations, business, financial conditions or prospects. We maintain strong and open relationships with the regulators and operators, carefully monitoring, reviewing, and improving our customer base relationships. We have also successfully secured the Lotto contract for nine consecutive years. Slow growth and competition in the lottery and gaming industries. Reduced demand for our products and services may impact the Group and its operations, business, financial conditions or prospects. We work with other participants in the lottery industry to attract and retain new players, and devote significant resources to developing innovative services, products, and distribution methods/systems.

improve network security safeguards, including a disaster systems. systems, which would result in downtime. Annual Reports and Accounts 2017 Page 1 29 RISK IMPACT MITIGATION Intellectual property laws may afford differing and limited protection for our proprietary technology and intellectual property. Our competitors may duplicate our products, design around our patented products, or gain access to our proprietary technology and intellectual property. We vigorously protect our proprietary technology and intellectual property to ensure that our competitors do not use such technology and intellectual property. We also prevent disclosure of trade secrets and proprietary know-how through non-disclosure and confidentiality agreements and other contractual restrictions. Legal and Compliance Facing risks related to the extensive and complex governmental regulation applicable to our operations. Responding to changes in or breach of regulatory or legislative requirements. Lower than anticipated sales due to legal and compliance (including regulatory) issues could have a materially adverse effect on the results of the Group's operations, business, financial conditions or prospects. We continuously evaluate our exposure to such types of risks for any changes in government regulations and their effect on our operations, business, financial conditions or prospects. Operational Failure to attract, retain, and motivate key management and employees. Our success relies on the continued service of our senior management and technical personnel, and on our ability to continue to attract, motivate, and retain highly qualified employees. Provide well-structured and competitive reward and benefit packages that ensure our ability to attract and retain the employees we need. We invest in training and career development opportunities for our people to support them in their careers. Lack of integrity of our employees, directors, and agents and the security of our systems. The real and perceived integrity and security of our systems are critical to our ability to attract customers. The Group strives to set exacting standards of personal integrity for its employees and directors, as well as system security for the systems that it provides to its customers. The Group has a robust global compliance programme that requires employees to acknowledge they understand and comply with Group policies. Systems, network or telecommunications failures or cyber-attacks may disrupt the Group's business and have an adverse effect on its results of operations. Any disruption in our network or telecommunications services, or those of third parties that we utilise in our operations, could affect the Group's ability to operate our games or financial reduced revenues and customer We continuously implement and measures and data protection recovery strategy for back office Financial and Tax Covenants in the Group's debt agreements may limit our ability to operate our business. The breach of such covenants could materially and adversely affect our business, financial conditions and results of operations. We maintain long debt maturities and reasonable net debt to EBITDA leverage to help minimise our refinancing risk.

2. REMUNERATION REPORT REMUNERATION REPORT: ANNUAL STATEMENT BY THE COMPENSATION COMMITTEE CHAIRMAN Dear Recipient, As the Chairman of the Compensation Committee (the Committee), I am pleased to present the Remuneration Report of the Directors of IGT for the financial year ended December 31, 2017 for which we seek your support at our annual general meeting (AGM) in London on May 17, 2018. The Remuneration Report is designed to demonstrate the link between the Group's strategy, its performance and the remuneration outcomes of our Directors and particularly that of our Chief Executive Director (CEO), Marco Sala. The Remuneration Report has been prepared in accordance with U.K. legislation, taking advantage of corporate governance guidance, and is divided into two sections: the annual report on remuneration, which shows how last year's remuneration policy was applied and implemented (the Remuneration Implementation Report) and the proposed remuneration policy, which summarizes our intended practices and policy on directors' remuneration (the Remuneration Policy). The Remuneration Implementation Report The Remuneration Implementation Report (including this statement) is legally subject to an annual advisory vote and this is the third year in which a report on remuneration is being put to a shareholder vote at an AGM. Shareholders are asked to vote, by ordinary resolution, to approve the Directors' remuneration for the financial year ended December 31, 2017 as detailed in the Remuneration Implementation Report. The Remuneration Implementation Report sets out the remuneration paid to Directors in 2017 and which comprises, as deemed appropriate by the Compensation Committee, fixed compensation in the form of base salary, the receipt of certain benefits, participation in a pension plan and variable compensation in the form of short and long-term incentive plans and co-investment plans. The remuneration policy approved at last year's AGM sets out the policy on each of these remuneration elements while the Remuneration Implementation Report shows how remuneration under that policy was paid for the financial year ended December 31, 2017. Next year's Remuneration Implementation Report will reflect how remuneration under this year's proposed Remuneration Policy, if approved, was paid for the financial year ending December 31, 2018. Annual Reports and Accounts 2017 Page 1 31

The Group achieved its objectives for operating profits in accordance with the metrics of the short term incentive plan and exceeded its objectives for net debt, each being the current primary metrics on which the CEO, Marco Sala, is paid under the terms of the short-term incentive plan. For the financial year ended December 31, 2017, therefore, the CEO received a bonus equal to 183.23% of his base salary under the Company's short-term incentive plan. In addition, the performance metrics of the long-term investment plan were also met and therefore the CEO's award vested at 118% of the total awards granted (being 85.8% of the maximum opportunity) in accordance with its terms. The Remuneration Policy Last year a remuneration policy was put to a binding shareholder vote under U.K. law and became effective on May 22, 2017. The purpose of a remuneration policy is to set out, among other items, our Directors' remuneration structure and the details of the discretion available to the Committee. The Company does not currently intend to implement any new elements of remuneration, but has determined that the current remuneration policy is not flexible enough to allow it to fully operate all of the existing available remuneration structures. In particular, the current policy does not reflect all of the different types of awards which can be made under the Company's Equity Incentive Plan (referred to below as the LTIP and previously approved by shareholders). Shareholders are therefore being asked to approve a new Remuneration Policy, which will, if approved, give the Committee the flexibility necessary to operate the existing available remuneration structures over the next three years, subject always to the limits set out in those structures and in the proposed Remuneration Policy. A policy on remuneration will be put to shareholders for approval again no later than at the Company's AGM in 2021. We are committed to the principles of our proposed Remuneration Policy which are designed to support the Group's strategy. These principles are maintaining: • • • • Market competitive compensation levels; High standards of corporate governance and engagement; Alignment with shareholders' interests; and For Executive Directors, a link between performance and strategy. We believe our proposed Remuneration Policy is important in supporting and driving forward the long-term goals of the Group by retaining Executive Directors and management with the requisite skills and expertise to effectively deliver the Group's strategy. Major Decisions on Executive Director's Remuneration No changes were made to the remuneration package of the Executive Director during the financial year ended December 31, 2017. Key Changes to Non-Executive Directors' Remuneration The annual fees of the Non-Executive Directors did not change during the financial year ended December 31, 2017. The remuneration of the Non-Executive Directors is fixed in amount and is unrelated to the results of the Group for the period. Directors' Remuneration Implementation Report and Remuneration Policy This is the third year in which both the Directors' Remuneration Implementation Report and a Remuneration Policy will be put to a shareholder vote at the AGM. Annual Reports and Accounts 2017 Page 1 32

REMUNERATION REPORT: REMUNERATION IMPLEMENTATION REPORT This Remuneration Implementation Report is presented to shareholders for an advisory vote at the AGM of the Company on May 17, 2018. It demonstrates how last year's approved remuneration policy was implemented in 2017 and how we intend to operate the proposed Remuneration Policy in 2018 if approved by shareholders at this year's AGM. This part of the report has been prepared in accordance with Schedule 8 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). The information in this section has been audited where required under the regulations save for the paragraphs on the performance graph, the relative importance of spend on pay, the implementation of last year's remuneration policy, the consideration by the directors of matters relating to directors' remuneration, the statement of voting at last year's AGM, the proposed Remuneration Policy, the approach to remuneration on recruitment, the service agreements, and the statement of consideration of shareholder views. The Company was incorporated on July 11, 2014 and was an inactive shell company until the completion of the business merger with IGT and GTECH S.p.A. on April 7, 2015 (the Merger). As such, the principal period of remuneration of the Directors of the Company did not effectively begin until April 7, 2015. Certain totals in the tables included in this Remuneration Implementation Report may not add due to rounding. Directors' remuneration as a single figure The remuneration of the Directors for the financial years ended December 31, 2017 and 2016 is set out below and relates to each Director's performance of his or her role as a Director of the Company or in connection with the management of the affairs of any subsidiary of the Company. Annual Reports and Accounts 2017 Page 1 34 Salary& Fees ($) Benefits ($) Annual Bonus ($) LTIP/RSU($) Pension ($) Total ($) Executive Director Marco Sala (CEO) 2017 887,588 3,415,827 1,832,250 5,453,150 558,172 12,146,987 2016 905,293 1,002,466 2,457,750 2,497,700 690,703 7,553,912 Non-Executive Directors Philip Satre (Chairman) 2017 150,000 - - 276,632 - 426,632 2016 150,000 - - 250,117 - 400,117 Patti Hart (Vice-Chairman) 2017 100,000 - - 221,310 - 321,310 2016 100,000 - - 200,098 - 300,098 Lorenzo Pellicioli (Vice-Chairman) 2017 100,000 - - 221,310 - 321,310 2016 173,333 - - 200,098 - 373,431 Paget Alves

Notes: Salary and Fees: - Marco Sala's remuneration reflects all remuneration related to Marco Sala's employment contract with the Company, and for the avoidance of doubt, under his employment contract with Lottomatica S.p.A. - Marco Sala's salary is equal to $1,000,000. He is paid 70% in the U.K. in pounds sterling (£450,520) and 30% in Italy in euros (€272,003.55). This payment arrangement requires periodic true up for currency fluctuations to ensure he is paid an equivalent to $1,000,000. The disclosed figures are not $1,000,000 due to the average foreign exchange rate used to calculate the dollar value from pounds sterling (1.2882) and euros (1.1295). - Marco Sala's total remuneration for 2017 as compared to 2016 is higher due to U.K./Foreign Tax Allowance/Payments (explained below) and the vesting of the 2017 LTIP which vested at a higher percentage and share price than the percentage of the LTIP that vested in 2016. - Amounts shown for Lorenzo Pellicioli, Paolo Ceretti and Marco Drago in 2016 include $73,333 each for 2015 fees not previously paid in 2015. - Alberto Dessy receives a slightly higher fee of $104,000 to reflect an annual $4,000 integrative contribution that Alberto is obligated to apply to his invoices and pay to the Italian social security provider for professional registered accountants. Alberto also received $104,000 in 2016. - Sir Jeremy Hanley's fee for 2017 has been pro-rated for the period from January 1, 2017 to his retirement on November 1, 2017. - Heather McGregor's fee for 2017 has been pro-rated for the period from her appointment in March 8, 2017 to December 31, 2017. Benefits: - Marco Sala's benefits include Company Car ($4,433), Car Fringe Benefit ($18,449), Health Insurance ($4,232), Meal Tickets ($1,090), U.K. Housing ($12,673) Travel Allowance ($6,668)and U.K./Foreign Tax Allowance/Payments ($3,368,281) grossed up. The figure for the U.K./Foreign Tax Allowance/Payments increase is due to a higher STIP payout made in the U.K. during the calendar year of 2017, a higher LTIP vesting value in calendar year 2017 and foreign exchange fluctuation. Annual Reports and Accounts 2017 Page 1 35 Salary& Fees ($) Benefits ($) Annual Bonus ($) LTIP/RSU($) Pension ($) Total ($) 2017 100,000 - - 221,310 - 321,310 2016 100,000 - - 200,098 - 300,098 Paolo Ceretti 2017 100,000 - - 221,310 - 321,310 2016 173,333 - - 200,098 - 373,431 Alberto Dessy 2017 104,000 - - 221,310 - 325,310 2016 104,000 - - 200,098 - 304,098 Marco Drago 2017 100,000 - - 221,310 - 321,310 2016 173,333 - - 200,098 - 373,431 Sir Jeremy Hanley 2017 86,389 - - 483,420 - 569,809 2016 100,000 - - 200,098 - 300,098 James McCann 2017 120,000 - - 221,310 - 341,310 2016 120,000 - - 200,098 - 320,098 Heather McGregor 2017 81,667 44,054 125,721 2016 - - - - - - Vincent Sadusky 2017 140,000 - - 221,310 - 361,310 2016 140,000 - - 200,098 - 340,098 Gianmario Tondato Da Ruos 2017 130,000 - - 221,310 - 351,310 2016 130,000 - - 200,098 - 330,098

Annual Bonus: - Marco Sala's annual bonus comprises: 50% operating income - 100% achievement; 30% net debt - 135% achievement; 20% Individual - 158% achievement, resulting in a 122.15% total achievement, therefore a base salary of $1,000,000 multiplied by a 150% target which results in $1,500,000 which is in turn multiplied by a 122.15% achievement which results in the annual bonus of $1,832,250. LTIP/RSU: - Marco Sala's LTIP represents LTIP vested in 2017 multiplied by the market value on the vesting date per share. The 2017 LTIP vested at a higher percentage and share price (in some but not all cases) than the percentage of the LTIP that vested in 2016. - The RSUs for the Non-Executive Directors represent RSUs vested in 2017 multiplied by the market value on the vesting date per share. - Heather McGregor was awarded a pro-rated grant of 2,080 RSUs at a grant price of $27.66 on her appointment on March 8, 2017 for service through the date of last year's AGM which vested in May 2017 at $21.18 per share and was granted a second award of RSUs for service from the date of last year's AGM, in line with all Non-Executive Directors. - Sir Jeremy Hanley was awarded RSUs during the financial year ended 31 December 2016 which vested in 2017, and during 2017 was awarded RSUs in respect of the financial year ended 31 December 2017, in line with all Non-Executive Directors. Sir Jeremy Hanley's RSUs for 2017 vested shortly after his retirement on November 1, 2017, whereas the remaining Non-Executive Directors' RSUs will vest in 2018, hence Sir Jeremy Hanley has a higher RSU value. Pension: - Marco Sala's pension figure includes base pension contributions, severance and social tax contributions in respect of his Italian service agreement. Indicative level of remuneration to be received by each Non-Executive Director The bar chart below relates to each Non-Executive Director and shows the remuneration receivable. There is no variation in pay due to performance. Non-Executive Remuneration 300,000 250,000 200,000 150,000 100,000 50,000 Salary& Fees ($) RSU ($) Pensions Under the U.K. Government's Workplace Pension Scheme the Executive Director is entitled to a U.K. pension. The Company offers a group personal pension plan, under which, if an Executive Director's pension contributions are between 2% and 6% of base salary, the Company may match the contributed percentage Annual Reports and Accounts 2017 Page 1 36

of base salary plus one percent up to a maximum of 7% for contributions at 6% or above. Marco Sala does not currently participate in the group personnel pension plan. According to E.U. regulations relating to Social Security, Marco Sala remains subject only to the Italian Social Security legislation with reference to his service agreement with Lottomatica S.p.A. (Lottomatica). The mandatory social security liability for pension purposes is owed by both the company, being Lottomatica, and the employee on a monthly basis. The employee contributions rate is equal to 10.19% and the employer quota is approximately 27%. The estimated retirement date for Marco Sala is in January 2027, which, in accordance with Italian regulations, could be postponed to March 2027. As far as the contributions to the Italian integrative pension fund are concerned, Marco Sala's contributions are levied at a rate of 3.45% on remuneration earned for his employment under the Lottomatica service agreement. Lottomatica contributes 8.55% of such remuneration. This pension fund is structured as a contribution scheme. During the financial year ended December 31, 2017, there was no accrual for an Italian severance payment for Marco Sala. Directors' share options and share awards The table below sets out the details of the share awards and share options granted under the LTIP from January 1, 2017 through December 31, 2017: vesting in 2020 and Notes: - The face value of Marco Sala's Performance Shares are calculated as follows: 184,576 Performance Shares multiplied by $20.63 (fair market value on the grant date). - Except as noted below, the face value of the Directors' shares are based on the fair market value of $21.18 per share as of the grant date. - Heather McGregor was awarded a pro-rated grant of 2,080 RSUs at a price of $27.66 on her appointment on March 8, 2017 for service through the date of last year's AGM and was granted a second award of RSUs for service from the date of last year's AGM, in line with all Non-Executive Directors. - Philip Satre receives a higher reward as compared to the other Non-Executive Directors to reflect his status as Chairman of the Company. Annual Reports and Accounts 2017 Page 1 37 Director Type of Award Number of Shares on Grant Date Face Value on Grant Date Vesting Marco Sala Performance Shares 184,576 $3,807,803 Based on 2017, 2018 and 2019 performance. 50% remaining 50% vesting in 2021 Paolo Ceretti Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Alberto Dessy Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Marco Drago Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Lorenzo Pellicioli Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Gianmario Tondato Da Ruos Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Paget Alves Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Patti Hart Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 James McCann Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Heather McGregor Restricted Shares 11,522 $257,514 After AGM on May 17, 2018 Vincent Sadusky Restricted Shares 9,442 $199,982 After AGM on May 17, 2018 Philip Satre Restricted Shares 11,803 $249,988 After AGM on May 17, 2018

The table below sets out details of the interests of the Directors in share awards and share options which are outstanding: On Notes: - Certain restricted shares are impacted by the declaration of a dividend. In the event of a declaration of a dividend, any unvested restricted shares are multiplied by the value of the dividend and then divided by the fair market value of such shares at that time. If those shares later vest a percentage of such shares shall be issued. Annual Reports and Accounts 2017 Page 1 38 Awards Held at January 1, 2017 Granted During the Year Date of Grant Options Exercised / Shares Vested During the Year Awards Held as at December 31, 2017 Exercise Price Market Price at Grant Date End of Performance Period Vesting Date Expires Restricted Shares Marco Sala 55,170 425 July 30, 2013 55,595 - - $21.74 2015 2016 & 2017 - 96,347 1,816 July 31, 2014 37,865 38,938 - $20.29 2016 2017 & 2018 - 257,108 - November 10, 2015 151,693 128,554 - $16.00 2017 2017 & 2018 - 250,000 - November 30, 2015 - 250,000 - $15.53 2017 2018 - 223,025 - July 26, 2016 - 223,025 - $21.11 2018 2019 & 2020 - - 184,576 May 23, 2017 - 184,576 - $20.63 2019 2020 & 2021 Share Options Marco Sala 137,022 - July 28, 2011 137,022 - $13.96 $13.96 2013 2014 2017 150,740 - July 26, 2012 150,740 - $16.54 $16.54 2014 2015 2018 251,329 - July 30, 2013 - 251,329 $21.74 $21.74 2015 2016 2019 420,673 - July 31, 2014 - 328,124 $20.29 $20.29 2016 2017 2020 250,000 - November 30, 2015 - 250,000 $15.53 $15.53 2017 2018 2022

Directors' share interests The table below shows the Directors' share interests as at December 31, 2017, including shares held by connected persons. Beneficially Outright Note: - All shareholding ownership guideline requirements have been complied with to the extent applicable. - In last year's remuneration report Marco Sala's 250,000 co-investment shares were listed as Restricted Shares but given the requirement for an increase in share price to vest, these 250,000 shares are now described as Performance Shares. - The figure for Restricted Shares allocated to Heather McGregor reads 9,442 and not 11,552 due to the vesting of 2,080 shares on May 22, 2017 reflecting the pro-rated award from her appointment on March 8, 2017 for service through the date of last year's AGM. Payments to past Directors and payments for loss of office Sir Jeremy Hanley retired as a member of the board of directors of the Company on November 1, 2017. The Committee considered Sir Jeremy Hanley's RSU award agreement and his performance as a valuable member of the board of directors of the Company during the financial year. In light of his long service as a Non-Executive Director of the Company and a director of Lottomatica Group S.p.A. and GTECH Holding Corporation prior to the Merger and his personal reasons for his retirement, the Committee determined that it was appropriate for the RSUs he was awarded in 2017 to vest on or around the date he retired, as permitted under the terms of his award agreement, rather than following the approval of the Annual Reports and Accounts by shareholders at this year's AGM, as will be the case for the remaining Non-Executive Directors. Sir Jeremy Hanley therefore received 9,442 shares, (in line with all other Non-Executive Directors, save for Annual Reports and Accounts 2017 Page 1 39 Date Name Restricted Shares Performance Shares Share Option Grant Total of Outstanding Options and Shares Shares Owned As at 31 December 2017 Marco Sala - 825,093 829,453 1,654,546 887,792 Philip Satre 11,803 - - 11,803 68,421 Lorenzo Pellicioli 9,442 - - 9,442 18,164 Patti Hart 9,442 - - 9,442 20,986 Paget Alves 9,442 - - 9,442 20,241 Paolo Ceretti 9,442 - - 9,442 24,046 Alberto Dessy 9,442 - - 9,442 17,215 Marco Drago 9,442 - - 9,442 20,986 Sir Jeremy Hanley 9,442 - - 0 25,990 James McCann 9,442 - - 9,442 89,496 Heather McGregor 9,442 - - 9,442 1,102 Vincent Sadusky 9,442 - - 9,442 29,293 Gianmario Tondato Da Ruos 9,442 - - 9,442 15,951

the Chairman who receives a higher number of RSUs), following his retirement in November 2017, with a value of $262,110. The value of the RSUs was calculated by reference to the fair market value of RSUs on the date they vested. There have been no other payments of money or other assets to any director of the Company who was not a director of the Company or for loss of office, in each case, at any time during the financial year ended December 31, 2017. Total remuneration of Chief Executive Officer The table below sets out the total remuneration of the CEO, Marco Sala, for the financial year ended December 31, 2017 and the financial years ended December 31, 2011 to 2016, inclusive. Please note that Marco Sala was CEO of the Company from April 7, 2015 to the year ended December 31, 2017 and remains CEO as at the date of this document. Prior to this time, Marco Sala was a director of the subsidiaries Lottomatica Holding S.r.l., Lottomatica, and, GTECH S.p.A. LTI Notes: Salary and Benefits: - Salary and Benefits includes base salary, benefits and pension. - In 2015, the Executive Director's benefits included a three year lump-sum advance payment of a housing allowance. - 2017 benefits payment includes an increase in U.K./Foreign Tax Allowance/Payments due to a higher STIP payout made in the U.K. during the calendar year of 2017, a higher LTIP vesting value in calendar year 2017 and foreign exchange fluctuation. LTIP/STIP: - In 2017, Marco Sala had a 2014 legacy GTECH LTIP award which vested at 78% of maximum. - The first year the LTIP vested is noted and performance is determined although shares are released over two years. The LTIP for 2017 vested at 118% of available shares out of a maximum opportunity of 137.5% under the award. - Variable remuneration is based on maximum STIP paid/to be paid. U.K. and Italy pay is combined for 2015, 2016 and 2017. Percentage change in the remuneration of the Chief Executive Officer The following table shows the percentage change in the base salary, benefits and annual bonus of the CEO between the year ended on December 31, 2017 and the previous financial year compared to the average for all employees of the Group. Notes: Annual Reports and Accounts 2017 Page 1 40 Category Executive Director Group Salary 1% 0.01% Benefits 141% 5.99% Annual Bonus -25% -15.89% 2011 - 2014 (€) 2015 - 2017 ($) 2017 2016 2015 2014 2013 2012 2011 Salary and Benefits 4,861,587 2,598,463 3,139,008 1,768,256 1,727,901 1,710,893 1,626,110 STIP paid as % of maximum 61.0% 81.9% 75.0% 96.3% 93.3% 96.1% 85.0% LTIP vested as a % of maximum (awards actually vested in year) 85.8% 72% 78% 100% 92% 66% 0% - 2008

- In effect, there has been no percentage change in Marco Sa a's Sa ary for 2017. The 1% difference is due to foreign exchange rate f uctuations between pounds ster ing, euro and do ar figures for 2016 and 2017. The same foreign exchange rate was used in each year for Sa ary and Annua Bonus to remove f uctuation due to changes in currency exchange rates. - The percentage change for the Executive Director's Benefits is primari y caused by high U.K./Foreign Tax A owance/Payments resu ting from a higher STIP pay-out made in the U.K. during the 2017 financia year, a higher lTIP vesting va ue in the 2017 financia year and foreign exchange f uctuations. Tota shareho der return performance graph The chart be ow shows the tota shareho der return (TSR) index for the Company as against the Russe Mid-Cap Index. The Company considers it appropriate to benchmark its performance to the Russe Mid-Cap Index due to the Company's nature and size. TSR Performance 200 180 160 140 120 100 80 60 29 June 2015 31 Dec 2015 31 Dec 2016 Period Ending 31 Dec 2017 Company Russe Mid-Cap Index Re ative importance of spend on pay The fo owing tab e shows the year-on-year movement in tota remuneration of a emp oyees, compared to the eve of dividends paid and dec ared on ordinary shares in respect of the financia years ended December 31, 2016 and 2017. $1,700.0 $1,500.0 $1,300.0 $1,100.0 $900.0 $700.0 $500.0 $300.0 $100.0 -$100.0 2017 2016 Tota Pay Dividends Annua Reports and Accounts 2017 Page 1 41 Index Va ue $1,152.7$1,175.6 $162.0$161.0

Notes: Total Pay: - The Company is not aware of any other extraordinary payments uti ising cash f ow or profit. Tota Pay inc udes wages, benefits, STIP, lTIP, and training and other personne costs. 2017 Tota Pay is ca cu ated at the prior year's foreign exchange rate to 2016 actua Tota Pay. Dividends and Share Buybacks: - There were no share buy-backs for the financia years ended December 31, 2016 and 2017. Meetings and attendance The Compensation Committee he d five meetings during the year. Attendance at the meetings is shown in the tab e be ow. Externa advisors No externa advisors assisted the Company with the preparation of this report. Externa directorships Executive and Non-Executive Directors are required to inform the Nominating and Corporate Governance Committee in the event that an externa directorship is taken up. Sa ary and fees for such externa appointments may be retained by the Executive and Non-Executive Directors. Statement of voting At the 2017 AGM, 98.85% of voting shareho ders voted in favour of the 2016 Report on Remuneration, with 1.04% voting against the reso ution and 0.11% abstaining from voting. On ast year's remuneration po icy, 77.48% of voting shareho ders voted in favour of the reso ution, with 22.40% voting against the reso ution and 0.12% abstaining from voting. Annua Reports and Accounts 2017 Page 1 42 Director Attendance Percentage Gianmario Tondato Da Ruos (Chairman) 100% Paget A ves 100% A berto Dessy 100%

REMUNERATION REPORT: REMUNERATION POLICY The Compensation Committee The Committee current y comprises three independent Non-Executive Directors. As at the date of this document, the Committee is chaired by Gianmario Tondato Da Ruos, and its other members are Paget A ves and A berto Dessy. A members served on the Committee since its estab ishment on Apri 7, 2015 up to the date of this document. The Executive Director does not attend the meetings of the Committee, however, certain officers and emp oyees, such as the Executive Vice President of Peop e and Transformation, the Chief Financia Officer and the Company Secretary of the Company, may attend meetings of the Committee, save in circumstances in which that person is the subject of the meeting. During its meetings, the Committee may a so receive assistance and advice from third parties. The Committee has been advised by Mercer for the financia year ended December 31, 2017. Mercer is part of the Marsh & Mclennan Companies, Inc., a g oba professiona services firm, a third party unconnected to the Group. The Committee has therefore satisfied itse f that the advice received from Mercer was objective and independent. The tota fees in re ation to the advice provided to the Committee and the Board during the year were $361,657. Mercer a so assists the Group in providing genera consu ting services, sa ary surveys, and advice on its 401(k) p ans in the U.S. The principa activities undertaken by the Committee for the year ended December 31, 2017 consisted of: • Reviewing the compensation of the Directors and management inc uding the 2017 short term incentive p an (STIP) and ong term incentive p an (lTIP) in accordance with guide ines pre-approved by the Directors and the treatment of Non-Executive Directors and senior management compensation (inc uding the key princip es of governing the individua arrangements for the CEO); • Monitoring comp iance with guide ines on ownership of shares in the Company by the Directors and executive officers; • Reviewing ega and market practice updates in the U.K. and the U.S.; and • Approving updates to the Compensation Committee charter. Whi e the po icy provides the framework for Directors' remuneration, it is intended that the Committee be entit ed to exercise a eve of discretion in certain circumstances, when it deems appropriate. The Committee may not use any discretion outside the po icy without separate shareho der approva . Po icy overview The current remuneration po icy was approved by shareho ders at the Company's 2017 AGM. The Company does not current y intend to imp ement any new e ements of remuneration, but has determined that the current remuneration po icy is not f exib e enough to a ow it to fu y operate a of the existing avai ab e remuneration structures. In particu ar, the current po icy does not ref ect a of the different types of awards which can be made under the lTIP. Shareho ders are therefore being asked to approve a new Remuneration Po icy, which wi , if approved, give the Committee the f exibi ity necessary to operate the existing avai ab e remuneration structures over the next three years, subject a ways to the imits set out in those structures and in the proposed Remuneration Po icy. Annua Reports and Accounts 2017 Page 1 43

The proposed Remuneration Po icy, if approved at this year's AGM, wi remain in effect unti changes to the po icy are made, which require shareho der approva , or unti the po icy is put before shareho ders for approva at the 2021 AGM, whichever is sooner. The proposed Remuneration Po icy begins with an out ine of remuneration structures and is fo owed by the Executive Director and Non-Executive Director Remuneration Po icy tab es and narrative. The aim of the po icy is to: • Attract, retain, and motivate high ca ibre directors; • Focus those directors on the de ivery of the Group's strategic and business objectives; • Promote a strong and sustainab e performance cu ture; and • A ign the interests of directors with those of the shareho ders. Remuneration of the Executive Director is determined by the Committee subject to the provisions of the artic es of association of the Company in addition to the Company's proposed Remuneration Po icy. Imp ementation of the proposed Remuneration Po icy for the year ending December 31, 2018 The proposed Remuneration Po icy, if approved at the AGM, wi be imp emented in 2018 in broad y the same manner as ast year's remuneration po icy. For the financia year ending December 31, 2018, the Committee has determined not to increase the CEO's sa ary. The resu ts of the sa ary review are set out in the tab e be ow: Notes: - Marco Sa a's sa ary is equa to $1,000,000. He is paid 70% in the U.K. in pounds ster ing (£450,520) and 30% in Ita y in euros (€272,003.55). This payment arrangement requires periodic true up for currency f uctuations to ensure he is paid $1,000,000. The disc osed figures are not $1,000,000 due to the average foreign exchange rate used to ca cu ate the do ar va ue from pounds ster ing and euros. As at the date of this document, the Chairman fees and the fees of the other Non-Executive Directors remain unchanged from the year ended December 31, 2017, noting that the Committee retains discretion to review the fees of the Non-Executive Directors for the remainder of this financia year ending December 31, 2018, and any changes to fees wi be in ine with the proposed Remuneration Po icy, if approved by shareho ders at the AGM. The fees of Non-Executive Directors are therefore as fo ows: Committee Chairman Note: - A berto Dessy receives a s ight y higher fee of $104,000 to ref ect an annua $4,000 integrative contribution that A berto is ob igated to app y to his invoices and pay over to the Ita ian socia security provider for professiona registered accountants. Annua Reports and Accounts 2017 Page 1 44 FY18 Chairman Vice Chairmen Non-Executive Director Basic Fee Nominating and Corporate Governance Committee Chairman Compensation Committee Chairman Audit Fees $150,000 $100,000 $100,000 $120,000 $130,000 $140,000 Director Sa ary FY18 Sa ary FY17 Percentage Change Marco Sa a $1,000,000 $1,000,000 0%

Benefits Executive Directors wi continue to be e igib e to receive se ected benefits inc uding housing a owance, ife insurance, private medica care, income protection, and critica i ness insurance. Expenses re ating to the performance of a Directors' duties in carrying out business-re ated activities, such as trave , are c assified as taxab e expenses, may be reimbursed by the Company. Pension The Company wi continue to offer to match an Executive Director's pension contributions between 2% and 6% of base sa ary, p us one percent, up to a maximum of 7% for contributions at 6% or above. STIP The annua bonus for an Executive Director wi operate in a broad y simi ar manner to the year ended December 31, 2017. The maximum annua bonus award wi remain at 300% of base sa ary. The Committee reviews the performance measures and targets on an annua basis to eva uate whether they remain appropriate y a igned to the overa business strategy. The Committee has reviewed the Company's performance measures and targets and, based on such review, has determined that they do not encourage excessive risk taking. lTIP The Committee is yet to approve how the lTIP sha be operated for the financia year ending December 31, 2018. It is expected that awards under the lTIP sha be subject to EBITDA, Net Debt and Tota Shareho der Return performance measures. Awards granted in 2018 wi vest 50% in 2021 and 50% in 2022 based on 2018, 2019, and 2020 performance and continued service during the app icab e vesting period. RSU The Committee has reviewed the terms of the Non-Executive Directors' RSU agreements and has determined that RSU agreements wi operate in a broad y simi ar manner to the year ended December 31, 2017. The proposed Remuneration Po icy The tab e on the fo owing page sets out the proposed Remuneration Po icy for Executive Directors and Non-Executive Directors which shareho ders wi be asked to approve at this year's AGM. Annua Reports and Accounts 2017 Page 1 45

recovery. an annua basis is 10% of that rising to a maximum of 20% of circumstances as determined discretion. Therefore, where arger increases may be a ro e has increased in recovery. benefits wi depend on the items based on the Annua Reports and Accounts 2017 Page 1 46 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Withholding Fixed Pay Base sa ary: to pay a sa ary that ref ects the ro e, responsibi ities, experience and know edge of the individua , provide a sa ary intended to be competitive with other emp oyers in our industry, in addition to attracting and retaining appropriate Executive Directors to support the ong-term interests of the Group. Sa aries are reviewed annua y by the Committee. Annua reviews take into account increases to the sa aries of the workforce as a who e, performance of the Group and the individua , ski set and experience of the individua and externa factors such as inf ation, and an assessment of the competitive market. There are no performance conditions other than a qua itative assessment of individua performance. The maximum opportunity for an increase in base sa ary on year's annua base sa ary that base sa ary in exceptiona by the Committee in its so e appropriate and necessary, awarded (for examp e, where scope). There is no provision for Benefits: to provide market competitive benefits to enab e Executive Directors to undertake their ro e through ensuring Executive Directors receive a range of benefits which may inc ude, but are not imited to, private medica insurance, private denta insurance, ife insurance, tax preparation benefits, and housing and car a owances. Benefits are reviewed regu ar y but not on a pre-determined schedu e. There is no maximum eve of benefit; the overaeve of cost of providing individua individua 's circumstances. There is no provision for

po icy. The Committee may repay any reasonab e proper y incurs in performing his or her duties as meetings, committee meetings, genera meetings or or of debentures of the Company, or otherwise in discharge of his or her responsibi ities in re ation to the may make arrangements to provide a director with by him or her for the purposes of the Company, as an officer of the Company; or enab ing him or her to reimbursement po icy a so permits the reimbursement connection with the performance of his or her duties as recovery. contributed percentage of 6% p us one percent up to a contributions at 6% or above. 6% of base sa ary, the Company may match the up to a maximum of 7% for contributions at 6% or Annua Reports and Accounts 2017 Page 1 47 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Withholding we -being and security. The Company has in p ace an expense reimbursement trave ing, hote and other expenses, which a Director director in connection with his attendance at directors' separate meetings of the ho ders of any c ass of shares connection with the exercise of their powers and the Company. Subject to the U.K. Companies Act 2006, the directors funds to meet expenditure incurred (or to be incurred) enab ing him or her to proper y perform his or her duties avoid incurring any such expenditure. The expense of expenses of individua s accompanying a Director in a director. There are no performance conditions. Pension: to attract and retain appropriate Executive Directors to support the ong-term interests of the Group. Under the U.K. Government's Workp ace Pension Scheme, Executive Directors are entit ed to a U.K. pension. The Company offers a group persona pension p an, or any other pension scheme as required by aw, to current and new Executive Directors. If an Executive Director's pension contributions are between 2% and contributed percentage of base sa ary p us one percent above. A pension is provided for any Executive Director ocated in other jurisdictions. There are no performance conditions. The maximum Company contribution is a matching of a Non-Executive Director's base sa ary between 2% and maximum of 7% for There is no provision for

imp emented an executive po icy pursuant to which made to Executive recouped in certain materia restatement of the statements or fraud, and genera y subject to any forfeiture provisions app icab e to the Company affi iates. The executive po icy may be amended Board or a committee a ways to the imit in the adjacent co umn and to ensure Annua Reports and Accounts 2017 Page 1 48 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Withholding Variable Pay Annua bonus: to encourage Executive Directors to achieve both short-term financia resu ts and individua targets. The STIP is performance-based, measured against a combination of financia and non-financia targets determined by the Committee by reference to the then current business strategy. Non-financia targets sha on y be used in combination with financia targets, with financia targets constituting a majority of the payout. Non-financia targets sha on y be used if they are materia to the business and quantifiab e. Payments may be based on financia and non-financia targets which may inc ude, but are not imited to, EBITDA, conso idated operating income, net debt, and individua performance, at the discretion of the Committee. Where non-financia targets are used, the majority of the bonus opportunity wi be subject to financia targets. The metrics under ying the financia and non-financia targets may be adjusted or amended at the discretion of the Committee. Payments may be adjusted upwards or downwards at the discretion of the Committee to account for certain events, which may inc ude, but are not imited to, currency f uctuations, securitizations, unbudgeted acquisitions, refinancings, and unusua y negative or positive financia resu ts due to events outside the contro of an Executive Director, subject that the rewards proper y ref ect business performance. The maximum pay out is 300% of base sa ary. The Company has compensation recoupment incentive compensation Directors may be instances, such as a Company's financia incentive compensation is c awback, recoupment, or required by aws or its subsidiaries or compensation recoupment from time to time by the thereof.

Withholding imp emented an compensation pursuant to which compensation made to may be recouped in as a materia Company's financia and incentive genera y subject to recoupment, or required by aws Company or its affi iates. The recoupment po icy may to time by the Board or subsidiaries as permitted by, and in accordance with, Annua Reports and Accounts 2017 Page 1 49 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or long-term share incentive p an (the 2015 Equity Incentive P an): to encourage Executive Directors to achieve ong-term performance targets. The lTIP is performance-based, measured against a combination of financia and non-financia targets determined by the Committee by reference to the then current business strategy. Non-financia targets sha on y be used in combination with financia targets, with financia targets constituting a majority of the payout. Non-financia targets sha on y be used if they are materia to the business and quantifiab e. Payments may be based on financia and non-financia targets which may inc ude, but are not imited to, EBITDA, conso idated operating income, net debt, re ative tota shareho der return, and individua performance, at the discretion of the Committee. The metrics under ying the financia and non-financia targets may be adjusted or amended at the discretion of the Committee acting in accordance with the terms of the lTIP. Payments may be adjusted upwards or downwards at the discretion of the Committee acting in accordance with the terms of the lTIP, to account for certain events, which may inc ude, but are not imited to, currency f uctuations, securitizations, unbudgeted acquisitions, refinancings, and unusua y negative or positive financia resu ts due to events outside the contro of an Executive Director, subject a ways to the imits in the adjacent co umn and to ensure that the rewards proper y ref ect business performance. The Committee may grant share options, share appreciation rights, performance units, performance shares, restricted shares, other share-based awards or any combination thereof to current or prospective directors and emp oyees of the Company or any of its the terms of the lTIP. The maximum target is 600% of base sa ary. The Company has executive recoupment po icy incentive Executive Directors certain instances, such restatement of the statements or fraud, compensation is any c awback, forfeiture provisions app icab e to the subsidiaries or executive compensation be amended from time a committee thereof.

Withholding number of shares in respect of which an award can be agreement, which may inc ude, but are not imited to, the fair market va ue of a share), vesting conditions, waiver based on such factors as the Committee may terms of the lTIP, which may inc ude, but are not imited shareho der di ution. amend or adjust the terms and conditions of any grant, which may inc ude, but are not imited to, its to determine sett ement in cash, shares, other property has the discretion to adopt, a ter and repea the the lTIP. Executive Directors are required to acquire and east two times base sa ary (or such ower imit as time) (the "Minimum") and a maximum of up to at east ownership criteria inc ude shares which are beneficia y p an or purchased on the market, and vested shares fami y members. Unearned performance shares do not Annua Reports and Accounts 2017 Page 1 50 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or The Committee has the discretion to determine the granted and to approve the terms and form of award the exercise price (if any, which must be no ower than restrictions, imitations, acce eration, forfeiture and determine as permitted by, and in accordance with, the to, individua performance, market conditions and The Committee a so has the discretion to modify, award or shares re ating thereto from time to time, performance targets, metrics, as we as the discretion or a combination of the foregoing. The Committee a so administrative ru es, guide ines and practice governing Share Ownership Guide ines: to further a ign Executive Directors' interests with the interests of shareho ders. Fo owing the date of their appointment to the Board, maintain shares with a fair market va ue equa to at specified in institutiona investor guide ines from time to five times base sa ary. Shares inc uded in the owned regard ess of whether issued under a Company he d in trust to benefit the Executive Director or his count towards the ownership criteria unti such shares have been earned. N/A N/A

Withholding taken into account for purposes of the guide ines. If the shares committed to the co-investment may be taken in comp iance with the share ownership guide ines, minimum of 50% of the after tax va ue of shares options, the exercise) of awards after the effective date ownership is met. ownership guide ines, there is an additiona of shares acquired through the vesting and/or exercise date those shares were acquired or for as ong as the discretion to amend the shareho ding guide ines at any be ow the Minimum nor count unearned performance Annua Reports and Accounts 2017 Page 1 51 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Unvested RSUs and unexercised share options are not Director has a co-investment agreement, up to 50% of into account. If an Executive Director is at any time not there is an additiona ho ding requirement to ho d a acquire on the vesting (and, for awards granted as of the share ownership guide ines unti the target share If an Executive Director is in comp iance with the share requirement to ho d a minimum of 20% of the number of an award for a period of up to 3 years fo owing the Executive Director is in situ. The Committee has the time, but not so as to reduce the required ho ding to shares, unvested RSUs or unexercised share options against the Minimum.

Withholding imp emented an compensation pursuant to which compensation made to may be recouped in as a materia Company's financia and incentive genera y subject to recoupment, or required by aws Company or its affi iates. The Annua Reports and Accounts 2017 Page 1 52 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Co-investment p an: to encourage Executive Directors to commit to the short-to-medium term interests of the Company. The Committee has the discretion to require that an Executive Director enter into a co-investment agreement with the Company, subject to any contractua ob igations. Any such co-investment agreement sha on y be entered into once over up to a three-year period. Under a co-investment agreement the Company may issue and/or grant options over shares, share appreciation rights, units or restricted shares or other share-based awards or any combination thereof (in each case being "awarded shares") to an Executive Director resu ting in a shareho ding of up to 500,000 awarded shares he d by the Executive Director. Vesting of the awarded shares wi be subject to continued service of the Executive Director and the Executive Director continuing to ho d up to 500,000 shares in the Company (the "committed shares") as the Committee may deem appropriate, and may be subject to certain further conditions, if the Committee determines it necessary in its so e discretion, which may inc ude, but are not imited to, performance targets and associated metrics and the Executive Director agreeing to re-invest up to a given amount of the tota committed and awarded shares into a subsequent co-investment agreement fo owing vesting of any previous co-investment agreement. 500,000 share awards. The Company has executive recoupment po icy incentive Executive Directors certain instances, such restatement of the statements or fraud, compensation is any c awback, forfeiture provisions app icab e to the subsidiaries or executive

Withholding recoupment po icy may to time by the Board or number of matching awarded shares issued or shares share based award subsists), the Committee has the of any co-investment agreement, inc uding, but not issued, the quantity of any matched shareho ding as be reinvested, and, whether or not such Executive co-investment arrangements fo owing vesting, as we and metrics, and determine sett ement in cash, shares, we as terminate the co-investment agreement where a co-investment agreement, the Committee sha take institutiona investor guide ines. Annua Reports and Accounts 2017 Page 1 53 Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or If an Executive Director ceases to be a director or CEO, as appropriate, of the Company prior to the vesting date any options over awarded shares apse and any matching awarded shares are forfeited. Within the above imits on terms of the agreement and on the over which an option is granted (or over which another discretion to set, and amend, the terms and conditions imited to, the number of shares under option, shares we as the percentage of shares which are required to Director wou d be required to reinvest into subsequent as discretion to inc ude or amend performance targets other property or a combination of the foregoing, as appropriate. In determining the terms and conditions of into consideration corporate governance and compensation be amended from time a committee thereof.

Withholding increase in fees on an annua basis rising to a maximum of 20% of circumstances, as determined by serving as a Chairman of the board, the Audit and Corporate Governance Committee. Non-Executive Directors periodica y, taking into annua bonus. Executive Directors certain instances, such restatement of the and the RSUs are any c awback, forfeiture provisions app icab e to the subsidiaries or Annua Reports and Accounts 2017 Page 1 54 Non-Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Fixed Pay Fees: to attract and retain high-ca ibre individua s, with appropriate experience or industry-re ated ski s, by offering market competitive fee eve s A Non-Executive Director is provided an annua fee, payab e in quarter y tranches. When recruiting a new Non-Executive Director, fees wi be in ine with the prevai ing fee schedu e app icab e to other Non-Executive Directors at that time. Higher cash retainers are provided for Non-Executive Directors Committee, Compensation Committee and Nominating The Committee reviews the annua cash retainer for the account an assessment of the competitive market. The Non-Executive Directors do not participate in any The maximum opportunity for an is 10% of that year's annua fees those fees in exceptiona the Committee in its so e discretion. N/A RSU - Annua Equity Awards for Continuing Non-Executive Directors On the date of each AGM of the Company's shareho ders, each Non-Executive Director continuing to serve after that date may granted restricted share unit (RSU) award, a time-based award, vesting on a year y basis in each case unconnected to the performance of such Non-Executive Director. The number of RSUs covered by each such award wi be determined by dividing (1) the "Annua Equity Award" (current y $250,000 for the ro e of Chairman and $200,000 for other Non-Executive Director ro es subject to change at the discretion of the Committee capped by the maximum opportunity set out opposite) grant va ue by (2) the c osing share price as of the date of grant (rounded down to the nearest who e unit), (2) being subject to change at the discretion of the Committee taking market considerations into account. The maximum opportunity for an increase in the Annua Equity Award on an annua basis is 10% of that year's Annua Equity Award rising to a maximum of 20% of that Annua Equity Award in exceptiona circumstances, as determined by the Committee in its so e discretion, taking market considerations into account. Awards made to Non-may be recouped in as a materia Company's financia statements or fraud, genera y subject to recoupment, or required by aws Company or its

Withholding recoupment po icy may to time by the Board or for Non-Executive Directors periodica y with reference assessment of the competitive market. The Committee and vesting mechanics by reference to the then current current institutiona investor guide ines when making amend the formu a to ca cu ate the Annua Equity Executive Directors certain instances, such restatement of the statements or fraud, genera y subject to recoupment, or Company or its Annua Reports and Accounts 2017 Page 1 55 Non-Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or Annua RSU awards granted to Non-Executive Directors under this po icy wi vest fo owing the approva of financia statements by shareho ders that occurs in the Company's financia year after the financia year in which the date of grant occurs. The Committee reviews the terms of the RSU awards to any change in the time commitment required and an has the discretion to determine the appropriate awards business strategy, and wi take into account the then their decision. The Committee has the discretion to Award. affi iates. Such be amended from time a committee thereof. RSU - Initia Equity Awards for New Non-Executive Directors Each new Non-Executive Director may be granted an award of RSUs determined by dividing (1) a pro-rata portion of the "Initia Equity Award" (current y $250,000 for the ro e of Chairman and $200,000 for other Non-Executive Director ro es, subject to change at the discretion of the Committee capped by the maximum opportunity set out opposite) va ue by (2) the c osing share price as of that date (rounded down to the nearest who e unit), (2) being subject to change at the discretion of the Committee taking market considerations into account. The pro-rata portion of the Initia Equity Award va ue wi equa the Initia Equity Award va ue mu tip ied by the fraction which resu ts from the fo owing formu a: X - Y X The maximum opportunity for an increase in the Initia Equity Award on an annua basis is 10% of that year's Annua Equity Award rising to a maximum of 20% of that Initia Equity Award in exceptiona circumstances, as determined by the Committee in its so e discretion, taking market considerations into account. Awards made to Non-may be recouped in as a materia Company's financia and the RSUs are any c awback, forfeiture provisions required by aws app icab e to the subsidiaries or

Withholding recoupment po icy may to time by the Board or appointment date (the Next AGM); inc uding) the date of the Previous AGM and ending on "AGM" means the Company's ast annua meeting of by the Company to the Non-Executive Directors. The approva of financia statements by shareho ders at each AGM is not known, the RSUs sha be granted on the first anniversary of the Previous AGM. to ca cu ate the Initia Equity Award. for Non-Executive Directors periodica y and has the vesting mechanics by reference to the then current required, and an assessment of the competitive market. joining the Board if such date is subsequent to expected to ho d, for as ong as they remain on the market va ue equa to up to at east three times the Annua Reports and Accounts 2017 Page 1 56 Non-Executive Directors Element, Purpose and Link to Strategy Operation and Performance Conditions Maximum Opportunity Recovery or where: X is the number of days in the period beginning with (and inc uding) the date of the AGM immediate y preceding the appointment date (the Previous AGM) and ending on (and inc uding) the date of the AGM immediate y after the Y is the number of days in the period beginning with (and (and inc uding) the appointment date; and shareho ders at which annua equity awards were granted RSUs granted at the previous AGM vest fo owing the annua genera meeting of the Company. If, on the date RSUs are granted, the date of the Next basis that the date of the Next AGM is the date of the The Committee has the discretion to amend the formu a The Committee reviews the terms of the RSU awards discretion to determine the appropriate awards and business strategy, any change in the time commitment affi iates. Such be amended from time a committee thereof. Share Ownership Guide ines: to a ign Non-Executive Directors' interests with the interests of shareho ders. Beginning November 10, 2020 (or five years after November 10, 2020), a Non-Executive Director is Board, ordinary shares of the Company that have a fair base annua retainer amount then in effect for that Non-Executive Director. Unvested RSUs and unexercised share options are not taken into account for the purposes of the guide ines. N/A N/A

Executive Directors' Remuneration Po icy The remuneration structure for Executive Directors is designed to incentivise the de ivery of sustained performance consistent with the Group's strategic goa s and appropriate risk management, and to reward success in doing so. At the date of this document the on y Executive Director of the Company is its CEO, Marco Sa a. Executive Directors p ay key ro es in the management and business success of a group. The Group's Remuneration Po icy and structure are designed to ref ect these combined ro es. When setting the po icy for Executive Directors' remuneration, the Committee takes into account tota remuneration eve s in companies of a simi ar size and comp exity, the responsibi ities of the individua 's ro e, the individua 's performance and the individua 's experience. The Committee a so considers deve opments in market practice and the pay and emp oyment conditions within the wider Group. The Company's Remuneration Po icy for Executive Directors, as an emp oyee of the Company or of members of its Group, is to provide a base sa ary and participation in an annua cash bonus p an, or STIP, and an equity based lTIP, seeking to give a proportion of the tota annua remuneration in the form of variab e remuneration, which is inked to the performance of the Group. Differences in Remuneration Po icy for Executive Directors compared to other emp oyees like the Executive Director, emp oyees at management eve and above receive a fixed sa ary and the potentia for an up ift by way of a variab e annua bonus through the same STIP. The STIP differs between emp oyee eve s of seniority: the Executive Director and senior management emp oyees are subject to an 80% bonus weighting as to financia resu ts based on either any of or a of operating income, EBITDA and net debt of the Company and a bonus weighting of 20% based on persona performance. The STIP is paid out on an annua basis subject to financia resu ts of the Company and the persona performance of each emp oyee. Manager and above eve emp oyees in genera a so participate in the same STIP. The percentage of the p an a ocated to financia and individua objectives varies by eve . Target as a percentage of base sa ary a so varies by eve . On y Non-Executive Directors receive RSUs. Director eve emp oyees and above a so participate in the same lTIP as the Executive Director. Approach to remuneration for new Executive Directors On the recruitment of a new Executive Director, the eve of fixed remuneration wi be determined after considering the candidate's ski s and experience and the market data for the ro e that they wi be undertaking. New Executive Directors wi be e igib e for the STIP and lTIP as set out in the proposed Remuneration Po icy. A new Executive Director may be required to enter into a co-investment agreement with the Company simi ar to that described in the Executive Directors' Remuneration Po icy paragraph above. The Compensation Committee recognises that a new Executive Director may forfeit remuneration as a resu t of eaving a previous emp oyer and the Committee wi consider mitigating that oss or part of that oss by making an award in addition to the remuneration out ined above. In determining remuneration, the Committee wi consider any re evant factors, inc uding any performance conditions attached to any previous incentive arrangements and the ike ihood of these conditions being met. Annua Reports and Accounts 2017 Page 1 58

Directors' contractua arrangements and oss of office payment po icy The Executive Director's contractua arrangements The current so e Executive Director, Marco Sa a, CEO, has a service agreement with the Company and a service agreement with its who y owned subsidiary, lottomatica, on y. The Company service agreement The CEO's service agreement with the Company (70% of emp oyment) can be terminated by either party on the giving of three months' notice, if not, immediate y for cause. The CEO cannot resign without prior approva from the Directors. Fo owing termination for a period of 9 months thereafter, the CEO is subject to certain restrictive covenants, inc uding restrictions on so iciting or providing goods or services to certain customers, emp oying or enticing away from the Group certain persons emp oyed by any Group company or being invo ved with any business in competition with the any Group company, among others. The Company sha pay the CEO a sa ary of £450,520 per annum and this sa ary sha be reviewed by the Directors annua y, but the Company is under no ob igation to award an increase in sa ary. The Company has made avai ab e to the CEO an apartment rented in the Company's name. In addition, the Company wi fu y reimburse the CEO for any expenses incurred as a resu t of his appointment. The CEO does not receive any other benefits under his service agreement with the Company. Under this agreement, the CEO a so participates in the lTIP, of which the co-investment agreement (described be ow) forms part, whereby the Company grants the CEO an award of restricted share units and/ or share options. The awards under the lTIP vested on the date on which the audited financia statements of the Company for the financia year ending December 31, 2017 were approved by the Directors. The lottomatica service agreement Under the lottomatica service agreement, the CEO's base sa ary is €271,500, which has been subject to an Ita ian statutory increase to €272,003.55, paid in 13 equa gross insta ments, p us additiona benefits, inc uding a company car. The CEO a so receives an integrative pension fund in accordance with Ita ian aw. The base sa ary paid by lottomatica wi not be ess than 25% of the tota sa ary paid to him by the Company. The stabi ity agreement According to a stabi ity agreement origina y entered into on February 20, 2012 between Marco Sa a and egacy GTECH S.p.A. and then assigned to lottomatica S.p.A. as part of the merger, Marco Sa a is entit ed to a severance payment worth three years of base sa ary and of short-term incentive assumed at the maximum pay-out eve if terminated other than for cause, mirroring the combination of the severance indemnity with the payment in ieu of notice due under the app icab e Ita ian nationa abour contract. The co-investment agreement On November 30, 2015, the current Executive Director, Marco Sa a, entered into a co-investment agreement with the Company. The purpose of the agreement is to focus the CEO on the strategic and business objectives of the Group as we as further a igning the interests of the CEO with those of the shareho ders of the Company. Under the agreement, the Company agreed to match (up to a maximum 500,000 ordinary shares) the CEO's existing ownership of 500,000 ordinary shares in the Company. The 500,000 ordinary shares were to be comprised of up to 250,000 ordinary shares and 250,000 options for ordinary shares, as ong as the fo owing conditions were met: Annua Reports and Accounts 2017 Page 1 59

• Continued service with the Company as CEO unti the date on which the annua accounts for the year ending December 31, 2017 were approved by the Directors (the Vesting Period); • The ordinary shares were continuous y he d by the Executive Director for the duration of the Vesting Period; • The Company's share price was equa to or greater than $16.83 with the fina price based on an average three month share price ending on the date of approva of the Company's financia statements for the year ending December 31, 2017; and • There was a re-investment of 50% of the tota committed and awarded shares (invo ving the use of cash proceeds for any exercised share options) (after-tax) in a subsequent three-year co-investment award agreement if in the financia year ending December 31, 2018 Marco Sa a is re-appointed in his ro e as CEO for another three year mandate. The percentage re-invested into the requisite shares wou d be accounted for to satisfy the Company's share ownership requirements under the agreement. A of the conditions have been met and a shares and a options wi vest fu y. This agreement was not amended during the financia year ended December 31, 2017, however, the Committee has the discretion to amend the agreement as appropriate. In the event that an additiona Executive Director is appointed during the financia year ending December 31, 2018, the Committee may consider that it is appropriate for such a director to enter into a simi ar agreement. Non-Executive Directors' appointment agreements A Non-Executive Directors' services are provided for in accordance with the prior approva of the Directors and their individua appointment agreements. They current y equa y receive RSUs to the va ue of a $200,000 equity award save for the Chairman who receives a $250,000 equity award. No remuneration is payab e on termination of the appointment of the Non-Executive Directors, other than accrued fees and expenses, subject to the discretion of the Committee. Detai s of the terms of the appointment of the current Non-Executive Directors are as fo ows: Sir Jeremy Han ey was a Non-Executive Director of the Company from Apri 2017. 7, 2015 to November 1, Annua Reports and Accounts 2017 Page 1 60 Non-Executive Director Start of Current Term Expiry of Current Term Phi ip Satre (Chairman) Apri 7, 2015 Apri 7, 2018 Patti Hart (Vice-Chairman) Apri 7, 2015 Apri 7, 2018 lorenzo Pe icio i (Vice-Chairman) Apri 7, 2015 Apri 7, 2018 Paget A ves Apri 7, 2015 Apri 7, 2018 Pao o Ceretti Apri 7, 2015 Apri 7, 2018 A berto Dessy Apri 7, 2015 Apri 7, 2018 Marco Drago Apri 7, 2015 Apri 7, 2018 James McCann Apri 7, 2015 Apri 7, 2018 Vincent Sadusky Apri 7, 2015 Apri 7, 2018 Gianmario Tondato Da Ruos Apri 7, 2015 Apri 7, 2018 Heather McGregor March 8, 2017 Apri 7, 2018

Loss of office When an Executive Director leaves the Company, the Compensation Committee will review the circumstances and apply the appropriate treatment. Where applicable, the Committee aims to avoid rewarding poor performance. Salary and benefits will continue to be paid throughout the notice period although the Committee has the discretion to make a payment in lieu of notice. In the event of a termination of the role of any of the Directors for any reason prior to their vesting date, all outstanding and unvested restricted shares, restricted share units and/or options shall be automatically and immediately forfeited for no consideration as of such termination, subject to good and bad leaver provisions and any provision permitting a waiver of such forfeit at the discretion of the Committee, as appropriate. How the views of shareholders and employees are taken into account Shareholders The Compensation Committee values shareholder feedback when forming the remuneration policy and takes into account shareholder views received in relation to resolutions to be considered at the AGM each year. Employees When determining Executive Director remuneration arrangements, the Committee takes into account pay and conditions throughout the Group as well as those of our peer companies to evaluate whether the structure and quantum of the Executive Director's pay remains appropriate in this context. The Committee does not consider it appropriate to consult directly with other Directors when developing a directors' remuneration policy. The Committee does receive, however, periodic updates from the People and Transformation (HR) department on the overall remuneration structures and policies for all employees. At other levels of the Group, employees will receive a remuneration package that is reflective of their role and responsibilities, set by reference to relative remuneration throughout the Group and external market data, where applicable. Employees at an executive level will typically have a greater emphasis on performance-related and long-term pay compared to those below this level. Annual incentives may be payable based on performance measures which are suitable to the nature and responsibility of the role. This is considered when determining the policy for Executive Directors. Remuneration illustrations The chart below gives an indication of what could be received by an Executive Director under the proposed Remuneration Policy. The bar chart shows (1) the minimum remuneration receivable as a percentage of total remuneration, (2) the remuneration receivable for performance in line with the Company's expectations as a percentage of total remuneration, and (3) the maximum remuneration receivable as a percentage of total remuneration on the implementation of the proposed Remuneration Policy. Fixed remuneration, shown in the chart below, is comprised of salary, pension contributions, other benefits and any cash alternative. Variable remuneration comprises remuneration under the STIP and LTIP. Future remuneration will be determined based on profitability and performance as described in the proposed Remuneration Policy. Annual Reports and Accounts 2017 Page 1 61

3. DIRECTORS' REPORT The Directors present their report and the audited financial statements for International Game Technology PLC (the Company) and its subsidiaries (the Group) for the period from January 1, 2017 to December 31, 2017. The Directors' Report should be read in conjunction with the other sections of this Annual Reports and Accounts: the Strategic Report and the Directors' Remuneration Report, all of which are incorporated into this Directors' Report by reference. General information The Strategic Report and the notes to the financial statements contain information on the domicile and legal form of the Company, its country of incorporation and the address of its registered office. Future developments and important events The Strategic Report contains details of likely future developments and important events which have occurred since the end of the financial year ended December 31, 2017 affecting the Group. Dividends There are no recommended dividend payments for approval by shareholders for the period from January 1, 2017 to December 31, 2017. The Directors approved and paid $162,528,155 of interim dividends for the financial year ended December 31, 2017. As at the date of this Directors' Report, there are sufficient distributable reserves available to pay dividends in accordance with the U.K. Companies Act 2006 (the Act). Related party transactions Internal controls are in place to ensure that any related party transactions involving Directors or their connected persons are carried out on an arm's length basis and are disclosed in the financial statements. Accordingly, related party transactions are set out in note 24 to the consolidated financial statements and form part of this Directors' Report. Directors and their interests The directors of the Company for the financial year ended December 31, 2017 are set out below: Marco Sala (CEO), Philip Satre (Chairman), Patti Hart (Vice-Chairman), Lorenzo Pellicioli (Vice-Chairman), Paget Alves, Paolo Ceretti, Alberto Dessy, Marco Drago, James McCann, Heather McGregor, Vincent Sadusky and Gianmario Tondato Da Ruos. All of the directors listed above were appointed on April 7, 2015 and remain as Directors of the Company, save for Heather McGregor, who was appointed on March 8, 2017 and Sir Jeremy Hanley who resigned on November 1, 2017. Annual Reports and Accounts 2017 Page 1 63

The Directors have interests in the Company's ordinary shares, options held over ordinary shares or interests in share options and long term incentive plans that are detailed in the Remuneration Report that is set out in section 2 of this Annual Reports and Accounts. Financial risk management objectives and policies The Group's activities expose us to a variety of risks including interest rate risk, foreign currency exchange rate risk, liquidity risk and credit risk. The Group's overall risk management strategy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on our performance through ongoing operational and financial activities. We monitor and manage our exposure to such risks both centrally and at local levels, as appropriate, as part of our overall risk management program with the objective of seeking to reduce the potential adverse effects of such risks on our results of operations and financial position. Depending upon the risk assessment, we use selected derivative hedging instruments, including interest rate swaps and forward currency contracts for the purposes of managing interest rate risk and currency risks arising from our operations and sources of financing. Further disclosures relating to financial risk management objectives and policies, as well as disclosures relating to exposure to price risk, credit risk, liquidity risk and cash flow risk, are set out in note 4 to the Company's financial statements. The Group's accounting policies regarding derivatives and our policy on hedging are set out in note 8 to the consolidated financial statements. Directors' indemnities In accordance with the Company's articles of association and to the extent permitted by law, the Directors are granted a qualifying third party indemnity from the Company in respect of liability incurred as a result of their office. In addition, we maintained a directors' and officers' liability insurance policy throughout the financial year and continue to do so. Neither the indemnity nor the insurance provides cover in the event that a director of the Company is proven to have acted dishonestly or fraudulently. Share capital The issued share capital of the Company as at March 12, 2018 is $20,346,274.16 and £50,000, consisting of 203,460,707 ordinary shares of $0.10 each, 203,460,707 special voting shares of $0.000001 each, and 50,000 sterling non-voting shares of £1 each. The special voting shares carry a voting right of 0.9995 each and are held at all times by a nominee appointed by the Company. Shareholders who maintain their ownership of ordinary shares continuously for at least three years are eligible to elect to direct the voting rights in respect of one special voting share per ordinary share held for such period, provided that such shareholders meet certain conditions set out in the Company's Loyalty Plan (details of which are available at www.IGT.com). Once those conditions have been met and that eligible shareholder has successfully elected to participate in the Loyalty Plan, that shareholder will have the voting power of the equivalent of 1.9995 votes for each ordinary share held. The special voting shares and ordinary shares will be treated as if they are a single class of shares and not divided into separate classes for voting purposes. Further details of the special voting shares and the rights attaching to them are set out in the Company's articles of association. The Directors are authorised to issue share capital up to an aggregate nominal amount of $185,000,000 for a period of five years from March 13, 2015. The Company currently has the authority to purchase a maximum Annual Reports and Accounts 2017 Page 1 64

of 20% of the aggregate issued share capital of each class of shares in the Company. This authority will expire on July 28, 2020. The Company did not purchase any of its own share capital for the financial year ended December 31, 2017. Research and Development The Group intends to continue investing resources toward its research and development efforts. During the financial year ended December 31, 2017 the Group spent $313.1 million on its research and development efforts. The Group's research and development efforts cover multiple creative and engineering disciplines, including game content, hardware, electrical, systems and software for lottery, land-based gaming, online social, and online real-money applications. The Group specialises in progressive creative game development including design, math, graphics and audio. The gaming products are created primarily by employee designers, engineers, and artists, as well as third party content creators. Third party technologies are used to improve the yield from development investment and concentrate increased resources on product differentiation engineering. Branches As the Group is a global business there are activities operated through many jurisdictions. In 2017 the Group was active in over 100 countries and had 30 branches. Political donations and political expenditure During the financial year ended December 31, 2017 non-European Union (E.U.) subsidiaries of the Company made various forms of contributions (i.e. charitable donations, membership dues, sponsorships) to non-E.U. organisations and entities in the U.S., Canada, China, South Africa and the West Indies that have political, charitable, social welfare, trade and business sector affiliations and missions. Some of these organisations and entities have affiliations with government officials. These contributions totalled $2,041,946 in the U.S., $500 in Canada, ¥100,000 in China, $1,235.19 in South Africa and $7,791 in the West Indies. The Group has fully complied with jurisdictional reporting of these contributions and such contributions are permissible under the relevant countries' laws. The Group policy is that no political donations be made or political expenditure incurred outside the U.S. or Canada. Save as set out above, neither the Company nor any of its subsidiaries during the period from January 1, 2017 to December 31, 2017: • Made any donations to a registered political party or other political or any independent election candidate or organisation in or outside the E.U.; or • Incurred any political expenditure in or outside the E.U. Equal employment policies The Group is committed to providing equal opportunities in employment and a work environment that values workplace diversity and an inclusive environment, where all employees are valued and respected. In 2017, the Group updated its policies, outlining the Group's commitment to Equal Employment Opportunities and non-discrimination. Annual Reports and Accounts 2017 Page 1 65

It is the Group's policy to provide equal employment opportunities for all applicants and employees on the basis of qualification and merit. The Group will not permit discrimination on the basis of characteristics such as, race, colour, religion sex or gender, sexual orientation, gender identity or expression, pregnancy, marital status or civil partnership status, national origin, citizenship, covered veteran status, ancestry, age, physical or mental disability, medical condition, genetic information, or any other legally protected status in accordance with applicable local, state, and federal laws. To the extent reasonably possible, the Group will accommodate employees with disabilities. Reasonable accommodation is available to all employees and applicants as long as the accommodation does not create an undue hardship for the Group and can be provided without posing a substantial safety risk to the employee or others. It is the responsibility of management to support and enforce the policy and to address and report any known conduct that might violate this policy. Employees who believe they have been subjected to discrimination or are aware of incidents of discrimination in the workplace are asked to immediately report the incident. Any allegation of discrimination brought to the attention of the Group will be promptly investigated. It is expected that all parties cooperate with the investigative process. Retaliation against any individual for reporting discrimination will not be tolerated. Individuals who are not themselves complainants, but who assist in an investigation, will also be protected from retaliation. The Group enforces compliance with this policy by implementing practices to execute this policy in the conduct of our business, training employees in the application of such procedures, and taking appropriate disciplinary action, up to and including termination of employment, for violation of the Group's policy (except where prohibited by law or contrary to local collective bargaining agreements). Employee involvement The Group maintains communication tools and channels that allow for the distribution of information to employees through email, social networking and print materials covering, among others, aspects such as financial and economic factors affecting the Group. The Group has an internal website that enables employees to access certain corporate information, which, in addition to providing corporate information and commercial updates, provides a platform for employees to ask anonymous questions to be answered by the senior executive team as appropriate and responses are published on the internal website. The Group also hosts Group-wide meetings in which employees or their representatives are consulted on a regular basis so that the views of employees can be taken into account in making decisions that are likely to affect their interests. The Group has conducted a global survey on employee engagement in 2017 which enabled employees to provide feedback, influencing employee-related programmes for implementation by the Group. As part of encouraging employee involvement in the performance of the Group, the Group offers a performance-based share award programme for employees at a senior management level. The share award is based on a three year performance cycle, measured from the achievement of several financial metrics. Setting these thresholds and offering this share incentive helps drive leadership accountability which significantly impacts overall performance of the Group. Annual Reports and Accounts 2017 Page 1 66

Greenhouse gas emissions As part of IGT's sustainability strategy, the Group is committed to ensuring that its business interacts with the environment in a socially responsible manner. The collection of emissions data is performed globally on a business-site basis. Notes: *Scope I: Fuel consumption (including natural gas and LPG for heating, diesel consumption for generators, diesel, gasoline, LPG and propane consumption for vehicles such as company cars, small trucks or forklifts) and fugitive emissions of refrigerants. Ton CO2 eq = data (fuel consumption or refrigerants refill). Data has been collected from invoices (from refrigerants assuming each kg of refill has been a kg of fugitive emissions during the year). **Scope II: Electricity consumption only. Ton CO2 eq = kWh*Emission Factor. kWh have been collected from invoices. To express this information as a ratio of the annual emissions associated with the Group's activities based on the quantity of tonnage per thousand dollars is equal to 0.0149 (scope I and II divided by total revenues in U.S. thousand dollars). The methodology used is based on voluntary and mandatory GHG reporting guidance issued by DEFRA. For fuels and operations we have utilised DEFRA protocol conversion factors within our reporting methodology. For GHG emissions related to electricity we have used DEFRA EFs, except for U.S. states for which we used state-based EPA emission factors, for Italy and countries for which the DEFRA EFs were not available we used Terna and GHG Protocol EFs. Due to data typology and collection methodology, reporting scope might increase and figures reported here might be subject to further updates in later IGT public documents. The Group's activities are mainly related to office work: software implementation, research and development, and administrative work. IGT's industrial activities are printing, which takes place in Lakeland (Florida, U.S.) and in Tito Scalo (Italy), and assembling, which occurs in Reno (Nevada, U.S.). The Group also has several environmental management systems that comply with the ISO 14001 (environmental management standards published by the International Organisation for Standardisation). Potential environmental impacts are related to: • Material consumption: this can be (1) an indirect impact in IGT's assembling plant with sub-products provided by suppliers, and (2) a direct impact in terms of paper and ink consumption in the printing activities; Energy use: (1) direct: fuel consumption for heating, company fleet (cars and small trucks) and emergency electricity supplies, and (2) indirect: electricity consumption (office, manufacturing and printing); • • Emissions related to energy use (direct and indirect) and transportation of goods made by IGT's service providers; Waste production: the Group's assembling process and printing processes do not produce a significant amount of waste; generally the waste is not hazardous. It is the Group's policy to recycle; and • Annual Reports and Accounts 2017 Page 1 67 Greenhouse Gas emissions For the year ended December 31, 2017 Combustion of fuel and operation of facilities* 27,740 Electricity, heat, steam and cooling purchased for own use** 46,032 Total emissions (tCO2e) 73,772

• Indirect environmental potential impacts can be significant for some processes relating to the production of the sub-products that are assembled in Reno (Nevada, U.S.) (such as chroming). The suppliers used for such processes are periodically monitored through on-site inspections in order to verify their compliance with environmental regulations. The annual amount in tons of emissions of carbon dioxide from activities for which the Group is responsible, including for fuel consumption and facility operations, refers to the following facilities: • • Main facilities in the U.S.: fuel consumption, electricity and refrigerant gases; U.S. fleet consumption (100%): cars and small trucks; • Facilities in Italy (the headquarters in Rome and the other facilities owned or leased in Italy): fuel consumption, electricity and refrigerant gases; Italian fleet consumption; • • Main facilities outside the U.S. and Italy: fuel consumption, electricity, refrigerant gases and fleet consumption; and Remaining data centers worldwide: electricity. • In 2017, an improved internal web-based tool was used to collect environmental data from Group sites all over the world. The tool has enabled the collection process to be systemised and harmonised, giving a more comprehensive overview of the Group's environmental impact. Thanks to the tool, reporting boundaries increased further compared to 2016, where facilities, constituting 85% of all of the Group's employees by location, provided information for these greenhouse gas emissions disclosures. Going concern The current activities of the Group and those factors likely to affect its future development, together with a description of its financial position, are described in the Strategic Report. Principal risks and uncertainties affecting the Group are described in the Principal Risks and Uncertainties section of the Strategic Report. Critical accounting estimates affecting the carrying values of assets and liabilities of the Group are discussed in note 2 to the consolidated financial statements. Having reviewed management's forecasts, Group cash flow and net debt, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore will be well placed to manage its business risks successfully. Accordingly, the Directors consider it appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements contained in these Annual Reports and Accounts. Statement of Directors' responsibilities The Directors are responsible for preparing the Strategic Report, Directors' Report, the Remuneration Report and the financial statements in accordance with applicable law and regulations. The Act and its associated regulations require directors to prepare financial statements for each financial year. Under that law the Directors have prepared the consolidated financial statements in accordance with the accounting principles generally accepted in the U.S. (U.S. GAAP) and the Company financial statements in accordance with International Financial Reporting Standards as adopted by the E.U. (IFRS). Under the Act, the Directors must not approve the financial statements unless they are satisfied that they give a true Annual Reports and Accounts 2017 Page 1 68

and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Company and the Group for that period. In preparing these financial statements, the Directors are required to: • • • Select suitable accounting policies and then apply them consistently; Make judgements and accounting estimates that are reasonable and prudent; State whether applicable standards issued under U.S. GAAP have been followed for the consolidated financial statements and IFRSs have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements; and • Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company and the Group's transactions and disclose with reasonable accuracy the financial position of the Company and the Group at any time and enable them to ensure that the financial statements comply with the Act and, in respect of the Group financial statements, Article 4 of the Regulation (E.C.) no. 1606/2002. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps toward the prevention and detection of fraud and other irregularities. The auditor and disclosure of information to the auditor In accordance with section 418 of the Act, each of the Directors confirms that: • So far as he or she is aware, there is no relevant audit information of which the Company's auditor is unaware; and He or she has taken all the steps that he or she ought to have taken as a director in order to make him or her aware of any relevant audit information, and to establish that the Company's auditor is aware of that information. • Independent auditor The auditor, PricewaterhouseCoopers LLP, has indicated its willingness to continue in office and a resolution concerning its re-appointment will be proposed at the AGM. Approval This Directors' Report has been approved by the Board of Directors on March 22, 2018. Signed on behalf of the Board of Directors by: Marco Sala Chief Executive Officer Annual Reports and Accounts 2017 Page 1 69

4. INDEPENDENT AUDITORS' REPORT Independent auditors' report to the members of International Game Technology PLC Report on the audit of the financial statements Opinion In our opinion: • International Game Technology PLC's group financial statements and company financial statements (the "financial statements") give a true and fair view of the state of the group's and of the company's affairs as at 31 December 2017 and of the group's loss, the company's profit and the group's and the company's cash flows for the year then ended; the group financial statements have been properly prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP); the company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. • • • We have audited the financial statements, included within the Annual Reports and Accounts 2017 (the "Annual Report"), which comprise: the consolidated balance sheet as at 31 December 2017, the company balance sheet as at 31 December 2017, the consolidated statement of operations, the consolidated statement of comprehensive income, the consolidated statement of cash flows, the consolidated statement of shareholders' equity, the company income statement, the company statement of comprehensive income, the company statement of cash flows and the company statement of changes in equity for the year then ended; and the notes to the consolidated and company financial statements, which include descriptions of the significant accounting policies. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.' Our audit approach Overview Overall group materiality: $35 million (2016: $41 million), based on 2.5% of Adjusted Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA). Overall company materiality: $70 million (2016: $64 million), based on 1% of total liabilities. • • • We conducted full scope audit work over 3 components in which the group has significant operations (Rome, Italy; Las Vegas, Nevada and Providence, Rhode Island, USA.). In addition, we performed a full scope audit of 11 non-significant components and performed procedures on specific balances at 8 non-significant components. During the year, the group engagement team visited three components where full scope audits were performed • • Revenue recognition: multiple - element arrangements. Impairment of goodwill and indefinite-lived intangible assets. Accounting related to the sale and leaseback of the Reno facility. • • • Annual Reports and Accounts 2017 Page 1 70

Te scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Key audit matters Key audit matters are those matters that, in the auditors' professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit. Key audit matter How our audit addressed tTe key audit matter Revenue recognition: multiple - element arrangements The groups' revenue transactions include various complex aspects including multiple-element arrangements, software revenue recognition, and contingent revenue. We considered this a significant risk given the level of complexity and judgment involved in understanding the revenue-affecting terms and conditions in the Company's multiple-element arrangements, as well as the allocation of consideration in multiple-element arrangements, accounted for under ASC 605-25, Multiple-element arrangements and ASC 985 - Software. It is noted that under this guidance, the group allocates arrangement consideration to each of the elements in the arrangement based upon vendor specific objective evidence (VSOE) or best estimated selling price (BESP) which requires judgement. Based on the risk assessment performed and a consideration of the group's revenue process, the engagement team considered accuracy to be the relevant assertion with respect to the risk in multiple-element arrangements. We focused on revenue recognition in connection with these contracts which can be complex, can involve a significant degree of management judgement and may not be in accordance with group's stated accounting policy for such items (see note 2 in the notes to the consolidated financial statements). Our procedures included the following: • Assessing whether the revenue recognised on these contracts was in line with the group's accounting policy by performing a combination of controls testing and substantive procedures. Assessing the controls in place over the revenue recognition of complex contracts. In addition we also assessed the business processes and relevant controls related to order management, product sales, subscriptions, other services and deferred revenue recognition, invoicing, cash receipts credit memos, ledger maintenance, and standing data. Testing a sample of revenue recognised on contracts and orders by validating against source documentation and compliance with the groups' revenue recognition policies for multiple-element arrangements. Testing a sample of individually immaterial transactions that are selected on a haphazard basis by agreeing to documentation and compliance with US GAAP. Testing management's determination and application of fair value including VSOE and BESP. • • • • Based on the procedures performed, we noted no material issues from our work. Impairment of goodwill and indefinite-lived intangible assets The group holds goodwill and indefinite-lived intangible assets balances of $5.7 billion and $247 million respectively at 31 December 2017. We focused on this area because the estimates underlying the group's impairment tests around the recoverability of these goodwill and indefinite-lived intangible assets are subject to high estimation uncertainty. As disclosed in notes 10 and 11 to the consolidated financial statements, the group's annual impairment test identified an excess of fair value compared to carrying value in all but one of its reporting units. For the North America Gaming Interactive (NAGI) reporting unit, an impairment of $714 million was recorded as at 31 December 2017. We evaluated the appropriateness of management's identification of the group's reporting units and the continued satisfactory operation of the group's controls over the impairment assessment process. Our procedures included the following: • Assessing the business processes and controls related to impairments of indefinite-lived intangible assets and goodwill. Assessing the suitability of the impairment model and understanding management's process and judgements utilised for developing estimates and assumptions. Performing a retrospective review of the prior period estimates by comparing to actual results in the current period and agreed the current year cash flow assumptions to current year actual results. Using PwC valuation specialists to review significant assumptions and third party reports. Obtaining corroborating evidence to support significant assumptions and changes in the cash flow projections. Considering any contrary evidence to the assumptions used. Performing a sensitivity analysis based on reasonably possible outcomes. Checking the mathematical accuracy of the calculations. • • • • • • • Based on the procedures performed, we noted no material issues from our work. Annual Reports and Accounts 2017 Page 1 71

Accounting related to tTe sale and leaseback of tTe Reno facility The group entered into a significant sale and leaseback transaction in March 2017 in connection with their facility in Reno, Nevada. We focused on this area because under US GAAP, the accounting for sale and leaseback transactions, including the assessment of continuing involvement, is complex and therefore subject to an increased inherent risk of misstatement (see note 16 in the notes to the consolidated financial statements). Our procedures included the following: • Evaluating the design and implementation of controls around the transaction. Reviewing management's specialist's valuation report. Reviewing the purchase and sale agreement and lease agreement. Involvement of PwC valuations specialists to evaluate significant assumptions used. • • • Based on the procedures performed, we noted no material issues from our work. We determined that there were no key audit matters applicable to the company to communicate in our report. How we tailored tTe audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate. International Game Technology PLC ("IGT PLC") has its corporate headquarters in London, England, and operating headquarters in Rome, Italy; Las Vegas, Nevada and Providence, Rhode Island, USA. The worldwide engagement team is aligned to IGT PLC's geographical organization and mirrors the management structure. As the IGT PLC corporate headquarters are based in London, the Group engagement team is also based in London and supported by component teams in Rome, Italy, Boston, Massachusetts, and San Jose, California, USA with supplemental assistance over specified procedures from the team in Cyprus. Where work was performed by teams outside of the UK, we determine the level of independent involvement needed at those local operations to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the consolidated financial statements as a whole. We issued formal, written instructions to the teams outside the UK setting out the work to be performed by each of them and maintained regular communication throughout the audit cycle. These interactions included participating in the planning and clearance meetings with our teams in Rome, Boston and San Jose, holding regular conference calls, as well as reviewing work papers and assessing matters reported. We performed certain specified audit procedures across 8 non-significant components to gain sufficient audit coverage over certain balances in the consolidated financial statements. The balances covered at each individual component varied based on their size, but consisted of some or all of the following: service revenue, cost of services, interest expense, deferred revenues, long term debt, inventories, other assets, property plant and equipment and trade receivables. In total the audit work performed accounted for 90% of consolidated net revenue and 90% of the consolidated total assets. At the group level, we also carried out analytical and other procedures on the components not covered by the procedures described above. The group engagement team also performed audit procedures over the consolidation. Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: How we determined it Depreciation and Amortisation (EBITDA). 1% of total liabilities. one of the principal considerations for the financial performance of the group as it best We consider total liabilities to be one of the PLC in assessing the parent company's financial For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality allocated across components was between $1 million and $34.5 million (which was also used for the company, for the purposes of the group audit). We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $2.5 million (group audit) (2016: $2.5 million) and $3.5 million (company audit) (2016: $3.2 million) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons. Annual Reports and Accounts 2017 Page 1 72 Group financial statements Company financial statements Overall materiality $35 million (2016: $41 million).$70 million (2016: $64 million). 2.5% of Adjusted Earnings before Interest, Tax, We consider an adjusted EBITDA measure to be members of IGT PLC in assessing the recurringprincipal considerations for the members of IGT Rationale for benchmark applied represents results from underlying operations.position.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you when: • • the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's and company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group's and company's ability to continue as a going concern. Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. With respect to the Strategic Report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on the responsibilities described above and our work undertaken in the course of the audit, the Companies Act 2006 and ISAs (UK) require us also to report certain opinions and matters as described below. Responsibilities for the financial statements and the audit Responsibilities of tTe directors for tTe financial statements As explained more fully in the Statement of Directors' responsibilities set out on pages 68 and 69, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and the company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so. Auditors' responsibilities for tTe audit of tTe financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditors' report. Annual Reports and Accounts 2017 Page 1 73 Strategic Report and Directors' Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors' Report for the year ended 31 December 2017 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic Report and Directors' Report. Directors' Remuneration In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.

Use of tTis report This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Other required reporting Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: • • we have not received all the information and explanations we require for our audit; or adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or certain disclosures of directors' remuneration specified by law are not made; or the company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns. • • We have no exceptions to report arising from this responsibility. Gregory Briggs (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Uxbridge 22 March 2018 Annual Reports and Accounts 2017 Page 1 74

International Game Technology PLC Consolidated Balance Sheets ($ thousands, except par value and number of shares) December 31, 2017 2016 Current assets: Restricted cash and investments 248,012 247,222 Inventories 319,545 347,494 Income taxes receivable 94,168 28,792 Systems, equipment and other assets related to contracts, net 1,434,194 1,199,674 Goodwill 5,723,815 6,810,012 Other non-current assets 2,427,953 1,497,662 Total non-current assets 12,094,691 12,770,596 Current liabilities: Other current liabilities 1,780,875 1,097,045 Income taxes payable 55,935 28,590 Long-term debt, less current portion 7,777,445 7,863,085 Income taxes payable 55,665 Total non-current liabilities 8,770,683 9,069,565 Commitments and contingencies (Note 16) Shareholders' equity Additional paid-in capital 2,676,854 2,849,761 Accumulated other comprehensive income 340,169 160,643 Non-controlling interests 349,936 356,966 Total liabilities, redeemable non-controlling interests, and shareholders' equity 15,159,208 15,060,162 The accompanying notes are an integral part of these consolidated financial statements. These consolidated financial statements were approved by the Board of Directors on March 22, 2018 and signed on its behalf on March 22, 2018 by: Marco Sala Chief Executive Officer Company registration number: 09127533 Annual Reports and Accounts 2017 Page 1 76 Total shareholders' equity 2,354,9313,425,665 Total IGT PLC's shareholders' equity2,004,9953,068,699 Retained (deficit) earnings(1,032,372)38,067 Common stock, par value $0.10 per share; 203,446,572 and 202,285,166 shares issued and outstanding at December 31, 2017 and 2016, respectively20,34420,228 Redeemable non-controlling interests356,917223,141 Total liabilities12,447,36011,411,356 Other non-current liabilities446,113444,556 Deferred income taxes491,460761,924 Total current liabilities3,676,6772,341,791 Current portion of long-term debt599,11477 Accounts payable1,240,7531,216,079 Liabilities, redeemable non-controlling interests, and shareholders' equity Total assets 15,159,20815,060,162 Deferred income taxes41,54631,376 Intangible assets, net2,273,4602,874,031 Property, plant and equipment, net193,723357,841 Total current assets 3,064,5172,289,566 Other current assets407,520424,727 Trade and other receivables, net937,854947,237 Cash and cash equivalents1,057,418294,094 Assets

International Game Technology PLC Consolidated Statements of Operations ($ and shares in thousands, except per share amounts) For the year ended December 31, 2017 2016 2015 Product sales 802,403 778,310 711,363 Cost of product sales 579,431 582,358 520,343 Research and development 313,088 343,531 277,401 Impairment loss 715,220 37,744 12,497 Total operating expenses 4,990,051 4,493,460 4,149,100 Operating (loss) income (51,092) 660,436 539,956 Interest income 10,436 12,840 17,681 Foreign exchange (loss) gain, net (443,977) 101,040 5,611 Total non-operating expenses (925,833) (337,023) (556,987) (Loss) income before (benefit from) provision for income taxes (976,925) 323,413 (17,031) (Benefit from) provision for income taxes (29,414) 59,206 38,896 Net (loss) income (947,511) 264,207 (55,927) Less: Net income attributable to non-controlling interests 55,400 45,413 19,647 Net (loss) income attributable to IGT PLC (1,068,576) 211,337 (75,574) Net (loss) income attributable to IGT PLC per common share - basic (5.26) 1.05 (0.39) Weighted-average shares - diluted 203,130 202,214 192,398 The accompanying notes are an integral part of these consolidated financial statements. Annual Reports and Accounts 2017 Page 1 77 Weighted-average shares - basic 203,130201,511192,398 Net (loss) income attributable to IGT PLC per common share - diluted (5.26)1.05(0.39) Less: Net income attributable to redeemable non-controlling interests65,6657,457 Other (expense) income, net(33,393)18,365(122,295) Interest expense(458,899)(469,268)(457,984) Transaction (income) expense, net(26,740)2,59049,396 Restructuring expense39,87627,93476,896 Selling, general and administrative816,093945,824795,252 Cost of services2,553,0832,553,4792,417,315 Total revenue 4,938,9595,153,8964,689,056 Service revenue4,136,5564,375,5863,977,693

International Game Technology PLC Consolidated Statements of Comprehensive Income ($ thousands) For the year ended December 31, 2017 2016 2015 Foreign currency translation adjustments (49,881) 182,791 60,079 Total foreign currency translation adjustments 182,791 (49,763) 60,079 Change in unrealized (loss) gain on cash flow hedges: Reclassification of loss (gain) to net income (5,218) (244) 1,744 Other comprehensive income (loss) (33,992) 179,063 39,331 Total comprehensive (loss) income (768,448) (16,596) 230,215 Less: Total comprehensive income attributable to non-controlling interests 54,937 45,616 19,343 Total comprehensive (loss) income attributable to IGT PLC (889,050) (35,939) 177,142 The accompanying notes are an integral part of these consolidated financial statements. Annual Reports and Accounts 2017 Page 1 78 Less: Total comprehensive income attributable to redeemable non-controlling interests65,6657,457 Income tax benefit (provision) related to items of other comprehensive income1,9364,548(17,259) Other comprehensive income (loss), before tax177,127(38,540)56,590 Unrealized (loss) gain on defined benefit plans (120)(682)395 Unrealized (loss) gain on available-for-sale securities (678)8,772(3,046) Total change in unrealized (loss) gain on cash flow hedges (4,866)3,133(838) Unrealized (loss) gain on cash flow hedges(6,610)8,351(594) Reclassification of loss to net income118 Change in foreign currency translation: Other comprehensive income (loss), before tax: Net (loss) income (947,511)264,207(55,927)

International Game Technology PLC Consolidated Statements of Cash Flows ($ thousands) For the year ended December 31, 2017 2016 2015 Restated Net (loss) income (947,511) 264,207 (55,927) Impairment loss 715,220 37,744 12,497 Amortization 401,355 492,021 410,264 Service revenue amortization 209,774 116,980 107,812 Debt issuance cost amortization 23,217 18,347 40,366 Gain on sale of Double Down Interactive LLC (51,348) Other non-cash costs, net 25,768 (142) 50,626 Trade and other receivables 45,465 (23,758) 83,218 Upfront Italian license fees (244,698) (665,260) Other assets and liabilities (118,923) (21,736) (160,330) Proceeds from sale of Double Down Interactive LLC, net of cash divested 823,788 Capital expenditures (698,010) (541,943) (376,521) Other 5,435 40,160 51,939 Principal payments on long-term debt (1,754,259) (357,513) (2,714,867) Return of capital - non-controlling interests (52,352) (35,407) (30,568) Payments in connection with the early extinguishment of debt (38,832) (79,526) Debt issuance costs paid (16,378) (10,825) (84,859) Net (payments of) receipts from financial liabilities (150) 30,595 (21,539) Capital increase - redeemable non-controlling interests 107,457 215,684 Payments to withdrawing shareholders (407,759) Payments in connection with note consents (29,022) Other (43,264) (1,548) (20,353) Effect of exchange rate changes on cash 25,703 13,402 (34,262) Cash and cash equivalents at the end of the period 1,057,418 294,094 627,484 Annual Reports and Accounts 2017 Page 1 79 Cash and cash equivalents at the beginning of the period294,094627,484307,422 Net increase (decrease) in cash and cash equivalents737,621(346,792)354,324 Net cash (used in) provided by financing activities(246,972)(312,139)2,920,166 Proceeds from interest rate swaps67,773 Payments on bridge facility(51,409) Proceeds from long-term debt1,762,2706,521,991 Capital increase - non-controlling interests41,01140,7719,049 Dividends paid - redeemable non-controlling interests(7,307) Return of capital - redeemable non-controlling interests(32,039) Dividends paid - non-controlling interests(50,601)(32,717)(29,156) Dividends paid(162,528)(161,179)(209,589) Cash flows from financing activities Net cash provided by (used in) investing activities298,665(315,985)(3,335,410) Acquisition of IGT, net of cash acquired(3,241,415) Proceeds from sale of assets167,452185,798230,587 Cash flows from investing activities Net cash provided by operating activities 685,928281,332769,568 Accounts payable(3,031)(22,855)(53,762) Inventories51,406(76,321)10,219 Changes in operating assets and liabilities, excluding the effects of disposition and acquisitions: Deferred income tax provision(296,265)(153,649)(149,241) Stock-based payment expense4,70426,34636,067 Loss on extinguishment of debt25,73373,806 Depreciation401,085390,448369,564 Foreign exchange loss (gain), net443,977(101,040)(5,611) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Cash flows from operating activities

International Game Technology PLC Consolidated Statement of Shareholders' Equity ($ thousands) Accumulated Other Comprehensive Income Additional Paid-In Capital Total Non-Common Stock Retained Earnings (Deficit) IGT PLC Equity Controlling Interests Total Equity Treasury Stock Other comprehensive income (loss), net of tax 179,526 179,526 (463) 179,063 Stock-based payment expense 4,704 4,704 4,704 Shares issued under stock award plans 95 (11,514) (11,419) (11,419) Dividends paid (162,528) (162,528) (49,777) (212,305) Balance at December 31, 2017 20,344 2,676,854 (1,032,372) 340,169 2,004,995 349,936 2,354,931 The accompanying notes are an integral part of these consolidated financial statements. Annual Reports and Accounts 2017 Page I 81 Other (3) (1,863) (1,866)(2,778)(4,644) Return of capital (51,211)(51,211) Shares issued upon exercise of stock options21(3,566) (3,545) (3,545) Capital increase 41,79941,799 Total comprehensive (loss) income (1,068,576)179,526(889,050)54,937(834,113) Net (loss) income (1,068,576) (1,068,576)55,400(1,013,176) Balance at December 31, 2016 20,2282,849,761 38,067160,6433,068,699356,9663,425,665

International Game Technology PLC Consolidated Statement of Shareholders' Equity ($ thousands) Accumulated Additional Paid-In Capital Other Total Non-Common Stock Retained (Deficit) Earnings Comprehensive Income IGT PLC Equity Controlling Interests Total Equity Treasury Stock Other comprehensive (loss) income, net of tax (34,195) (34,195) 203 (33,992) Stock-based payment expense 26,346 26,346 26,346 Shares issued under stock award plans 108 (1,448) (1,340) (1,340) Return of capital (36,197) (36,197) Other 608 1,180 1,788 4,298 6,086 The accompanying notes are an integral part of these consolidated financial statements. Annual Reports and Accounts 2017 Page I 82 Balance at December 31, 201620,2282,849,76138,067160,6433,068,699356,9663,425,665 Dividends paid(161,179)(161,179)(46,016)(207,195) Payment for accelerated stock awards(3,489)(3,489)(3,489) Shares issued upon exercise of stock options9611,68711,78311,783 Capital increase40,77140,771 Total comprehensive income (loss)211,337(34,195)177,14245,616222,758 Net income211,337211,33745,413256,750 Balance at December 31, 201520,0242,816,057(13,271)194,8383,017,648348,4943,366,142

International Game Technology PLC Consolidated Statement of Shareholders' Equity ($ thousands) Accumulated Additional Paid-In Capital Retained Earnings (Deficit) Other Total Non-Common Stock Treasury Stock Comprehensive Income IGT PLC Equity Controlling Interests Total Equity Other comprehensive income (loss), net of tax 39,635 39,635 (304) 39,331 Stock-based payment expense 36,067 36,067 36,067 Escrow deposit returned-withdrawing shareholders 15,926 15,926 15,926 Shares issued upon exercise of stock options 221 10,610 10,831 10,831 Merger of GTECH S.p.A. into IGT PLC (217,332) (242,932) 460,264 Share issuance costs (3,034) (3,034) (3,034) Return of capital (29,695) (29,695) Treasury stock purchases (407,104) (407,104) (407,104) The accompanying notes are an integral part of these consolidated financial statements. Annual Reports and Accounts 2017 Page I 83 Balance at December 31, 201520,0242,816,057(13,271)194,8383,017,648348,4943,366,142 Dividends paid(79,869)(79,869)(28,086)(107,955) Shares issued under stock award plans112(3,195)(3,083)(3,083) GTECH S.p.A. shares exchanged for IGT PLC shares15,320(15,320) Capital increase9,0499,049 IGT stock awards attributable to purchase price11,62611,62611,626 Payment for accelerated stock awards(14,867)(14,867)(14,867) Shares issued to acquire IGT4,532912,725917,257917,257 Total comprehensive (loss) income(75,574)39,635(35,939)19,343(16,596) Net (loss) income(75,574)(75,574)19,647(55,927) Balance at December 31, 2014217,1712,204,246(53,160)46,377155,2032,569,837377,8832,947,720

Notes to Consolidated Financial Statements 1. Description of Business and Restatement and Revision of Consolidated Statements of Cash Flows Description of Business International Game Technology PLC, a public limited company organized under the laws of England and Wales (the Parent), has its corporate headquarters in London, England. The Parent is the successor to GTECH S.p.A., a societa per azioni incorporated under the laws of Italy (GTECH), and the sole stockholder of International Game Technology, a Nevada corporation (IGT). The Parent, together with its consolidated subsidiaries, has principal operating facilities in Rome, Italy; Providence, Rhode Island; and Las Vegas, Nevada. When used in these notes, unless otherwise specified or the context otherwise indicates, all references to IGT PLC and the Company refer to the business and operations of the Parent and its consolidated subsidiaries. The Company is a leading commercial operator and provider of technology in the regulated worldwide gaming markets that operates and provides a full range of services and leading-edge technology products across all gaming markets, including lotteries, machine gaming, sports betting and interactive gaming. The Company also provides high-volume processing of commercial transactions. The Company's state-of-the-art information technology platforms and software enable distribution of its products and services through land-based systems, Internet and mobile devices. Restatement and Revision of Consolidated Statements of Cash Flows The Company has restated the consolidated statement of cash flows for the year ended December 31, 2016 to correct the misclassification of the upfront payment of $665.3 million made in two installments in 2016 to the Italian governmental authority in connection with the Italian Gioco del Lotto service concession (the Upfront Payment) from investing activities to operating activities. The Company concluded that license fee payments made to a customer and amortized as a reduction of service revenue should be classified as a cash outflow from operating activities in accordance with Accounting Standards Codification (ASC) 230, Statement of Cash Flows. In addition to this correction, the consolidated statement of cash flows for the year ended December 31, 2016 has been corrected to reflect other immaterial misclassifications. Annual Reports and Accounts 2017 Page I 84

The impact of the restatement in the 2016 consolidated statement of cash flows is as follows ($ thousands): For the year ended December 31, 2016 As Reported Adjustment As Restated Upfront Italian license fees (665,260) (665,260) Capital expenditures (557,238) 15,295 (541,943) Upfront payments to customers (179,197) 179,197 The Company has revised the consolidated statement of cash flows for the year ended December 31, 2015 to correct the classification of other upfront payments made of a similar nature as the Upfront Payment as well as other immaterial misclassifications. The impact of the revision in the 2015 consolidated statement of cash flows is as follows ($ thousands): For the year ended December 31, 2015 As Reported Adjustment As Revised Inventories 72 10,147 10,219 Net cash flows provided by operating activities 785,997 (16,429) 769,568 Capital expenditures (402,634) 26,113 (376,521) Cash and cash equivalents at the beginning of the period 317,106 (9,684) 307,422 Annual Reports and Accounts 2017 Page I 85 Net increase in cash and cash equivalents 344,6409,684354,324 Net cash flows used in investing activities(3,361,523)26,113(3,335,410) Other assets and liabilities(282,995)122,665(160,330) Deferred income tax provision(149,241)(149,241) Non-cash investing activities, net(255,371)179,197(76,174) Supplemental Cash Flow Information Net cash flows used in investing activities(996,540)680,555(315,985) Upfront payments to customers(665,260)665,260 Net cash flows provided by operating activities961,887(680,555)281,332 Inventories(61,026)(15,295)(76,321)

2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements and notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Intercompany accounts and transactions have been eliminated. The consolidated financial statements are presented in U.S. dollars and all amounts are rounded to the nearest thousand (except share and per share data) unless otherwise indicated. Certain reclassifications have been made to prior periods to conform to the current period presentation. Principles of Consolidation The consolidated financial statements include the accounts of the Parent and its controlled subsidiaries, which are primarily majority owned. Investments in other entities that the Company has the ability to control, through a majority voting interest or otherwise, or with respect to which the Company is the primary beneficiary, are consolidated. Earnings or losses attributable to any non-controlling interests or redeemable non-controlling interests in a subsidiary are included in net income (loss) in the consolidated statements of operations. Any investments in affiliates over which the Company has the ability to exert significant influence, but do not control and with respect to which the Company is not the primary beneficiary, are accounted for using the equity method of accounting. Investments in affiliates for which the Company has no ability to exert significant influence are accounted for using the cost method of accounting. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates. Foreign Currency Translation Assets and liabilities of subsidiaries located outside of the United States that have a local functional currency are translated to U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense accounts for these subsidiaries are translated at the average exchange rates for the periods. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within shareholders' equity. The Company records gains and losses from currency transactions denominated in currencies other than the functional currency in its consolidated statement of operations. Revenue Recognition The Company has two categories of revenue: service revenue and product sales. Service revenue is derived from the following sources: • Operating contracts predominantly related to Italian concessions and Lottery Management Agreements (LMAs); Gaming operations arrangements where the Company provides customers with proprietary gaming equipment, systems, content licensing, and services; Facilities Management Contracts (FMCs); • • Annual Reports and Accounts 2017 Page I 86

• • Interactive contracts; and Other professional services. Product sales are derived from the following sources: • • Sale of lottery terminals and gaming machines, including game content; and Sale of lottery and gaming systems, including the licensing of proprietary software, and implementation services. Revenue is recognized when all of the following conditions are met: (i) (ii) (iii) (iv) Persuasive evidence of an arrangement exists; Delivery has occurred or services have been rendered; The price to the customer is fixed or determinable; and Collectability is reasonably assured (or probable under ASC 985, Software). Revenues are reported net of incentives, rebates, discounts and amortization of upfront payments to customers for licenses. Sales taxes, gaming taxes and other taxes of a similar nature are presented on a net basis (excluded from revenue). Amounts billed prior to completing the earnings process are deferred until revenue recognition criteria is met. Service revenue Service revenue is derived from the following types of arrangements: Operating contracts Certain of the Company's revenue, primarily revenue from the Italy segment and to a lesser extent the North America Lottery segment, is derived from concessions or LMAs (operating contracts). Under operating contracts, the Company manages all the activities along the lottery value chain including collecting wagers, paying out prizes, managing all accounting and other back-office functions, running advertising and promotions, operating data transmission networks and processing centers, training staff, providing retailers with assistance and supplying materials for the game. In arrangements where the Company is performing services on behalf of the government and the government is considered the Company's customer, revenue is recognized net of prize payments, taxes, retailer commissions and remittances to state authorities, because the Company is acting as an agent to the authorities. In arrangements where the Company's customers are the end players and/or retailers, the Company records revenue net of prizes and taxes only, and records the retailer commissions as a cost of service, because the Company is acting as the principal. The Company also provides sports pools and sports betting services. Under sports pools arrangements, the Company manages the sports pool where the sports pool prizes are divided among those players who select the correct outcome. There are no odds involved in sports pools and each winner's payoff depends on the number of players and the size of the pool. Under sports pools arrangements, the Company collects the wagers, pays prizes, pays a percentage fee to retailers, withholds its fee, and remits the balance to the respective regulatory agency. The Company assumes no risk associated with sports pool wagering. The Company records revenue net of prize payouts, gaming taxes, retailer commissions and remittances to state authorities, because the Company is acting as an agent to the authorities. In sports betting contracts, the Company establishes and assumes the risks related to the odds. Under fixed odds betting, the potential payout is fixed at the time bets are placed and the Company bears the risk of odds setting. The Company is responsible for collecting the wagers, paying prizes, and paying fees to Annual Reports and Accounts 2017 Page I 87

retailers. The Company retains the remaining cash as profits. Under these arrangements, the Company records revenue net, calculated as total wagers less the estimated payout for prizes, because the betting contract is considered a derivative and is required to be recorded at fair value. Taxes are recorded as contra revenue and retailer commissions are shown as expenses. Fees earned under operating contracts are recognized as revenue in the period earned and are classified as service revenue in the consolidated statement of operations when all of the criteria outlined above are met. Under operating contracts, the Company is generally required to pay an upfront license fee. When such upfront payments are made to the Company's customers, the payment is recorded as a non-current asset and amortized as a reduction of service revenue over the license term. Gaming Operations Gaming operations revenues are generated by providing customers with proprietary land-based gaming equipment, systems, content licensing, and services under a variety of recurring revenue arrangements, including a percentage of coin-in (amounts wagered), a percentage of net win, or a fixed daily/monthly fee. Included in gaming operations are Wide Area Progressive (WAP) systems. WAP systems consist of linked slot machines located in multiple casino properties, connected to a central computer system. WAP games differ from all other games in that a Company-sponsored progressive jackpot increases with every wager until a player wins the top award combination. Casinos with WAP machines pay a percentage of the coin-in (amounts wagered) for services related to the design, assembly, installation, operation, maintenance, and marketing of the WAP systems, as well as funding and administration of Company-sponsored progressive jackpots. A portion of the total fee collected is allocated to the WAP jackpot and is recorded as a component of the cost of providing the WAP service. Fees earned under gaming operations are recognized as revenue in the period earned and are classified as service revenue in the consolidated statement of operations when all of the criteria outlined above are met. Facilities Management Contracts Under FMCs, the Company constructs, installs, and operates the online system. Under a typical FMC, the Company maintains ownership of the technology and facilities, and is responsible for capital investments throughout the duration of the contract. The FMCs may also include a wide range of support services. These contracts, principally in the North America Lottery segment, generally provide for a variable amount of monthly or weekly service fees paid to the Company directly from the customer based on a percentage of sales. Fees earned under FMCs are recognized as revenue in the period earned, throughout the service period, and are classified as service revenue in the consolidated statement of operations when all of the criteria outlined above are met. Interactive Contracts Interactive revenues are principally generated from online social gaming and online real-money products and services (IGTi). Social gaming revenues are generated from the sale of virtual casino chips to players in the online DoubleDown Casino that can be used for additional play or game enhancements. Revenues from player purchases are recognized ratably over the estimated average service period in which the chips are consumed based on historical data analysis. Because DoubleDown is the principal, responsible for substantially all Annual Reports and Accounts 2017 Page I 88

aspects of the casino services and sale of virtual goods to the player, revenues are recorded on a gross basis. Payment processing fees paid to Facebook, Apple and Google on a revenue participation basis are recorded within cost of services. IGTi revenues are generated from online real-money gaming solutions offerings, which encompass gaming systems infrastructure, applications, content licensing, and back office operational support services, including WAP jackpot funding and administration. IGTi solutions are generally provided under revenue sharing arrangements based on a percentage of net win similar to gaming operations discussed above. Other Professional Services Product sales contracts generally include other professional services, which includes telephone support, software maintenance, hardware maintenance, the right to receive unspecified upgrades/enhancements on a when-and-if-available basis, and other professional services. Fees earned for these professional services are generally recognized as revenue in the period earned (i.e., over the support period) and are classified as service revenue in the consolidated statement of operations when all of the criteria outlined above are met. Product Sales Product sales are derived from the following types of arrangements: Sale of Lottery Terminals and Sale of Gaming Machines, including Game Content These arrangements include the sale of gaming machines including game content, non-machine gaming related equipment, licensing and royalty fees, and component parts (including game themes and electronics conversion kits). The Company's credit terms are predominantly short-term in nature. The Company also grants extended payment terms under contracts where the sale is secured by the related equipment sold. Revenue from the sale of lottery terminals and gaming machines is recognized based upon the contractual terms of each arrangement, but predominantly upon delivery or acceptance. If the sale of lottery terminals and gaming machines include multiple elements, these arrangements are accounted for under Multiple Element Accounting, discussed below. System Sales (Lottery and Gaming) System sale arrangements typically include multiple elements, where the Company constructs, sells, delivers and installs a turnkey system (inclusive of point-of-sale terminals, if applicable) or delivers equipment and licenses the computer software for a fixed price, and the customer subsequently operates the system. System sale arrangements generally include customer acceptance provisions and general rights to terminate the contract if the Company is in breach of the contract. Such arrangements include non-software elements, software, and other professional services. Amounts due to the Company and costs incurred by the Company in implementing the system prior to customer acceptance are deferred. Revenue attributable to the system is classified as product sales in the consolidated statement of operations and is recognized upon customer acceptance as long as there are no substantial doubts regarding collectability. Revenues attributable to other professional services provided subsequent to customer acceptance are classified as service revenue in the consolidated statement of operations in the period earned. Annual Reports and Accounts 2017 Page I 89

Shipping and Handling Shipping and handling reimbursements from customers are included in product sales revenue with the associated costs included in cost of product sales. Multiple Element Arrangements The Company enters into multiple element arrangements in which a customer may purchase both products and services. In some scenarios, all deliverables are considered one element, while other arrangements contain multiple elements. When arrangements contain multiple elements, the Company allocates revenue to each element based on a relative selling price hierarchy. The relative selling price for each element is determined using vendor-specific objective evidence (VSOE) if available, third-party evidence (TPE) if VSOE is not available, or best estimate of selling price (BESP) if neither VSOE nor TPE is available. • VSOE of selling price is based on the price charged when the element is sold separately. Establishing VSOE requires judgment to determine if there is a sufficient quantity of items sold on a stand-alone basis or if there are substantive contractual renewal rates and whether these prices demonstrate an appropriate level of concentration to conclude that VSOE exists. • TPE of selling price is established by evaluating largely interchangeable competitor products or services in stand-alone sales to similar customers. However, as the Company's products contain a significant element of proprietary technology and the Company's solutions offer different features and functionality, the comparable pricing of third-party products with similar functionality typically cannot be obtained. • BESP is established considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, and gross profit objectives. In some scenarios, contractual pricing may serve as the best estimate given the variability among jurisdictions and customers, while in other scenarios the cost for each deliverable plus a reasonable margin is used as management's best estimate of selling price. In scenarios where the Company's products include hardware containing required software that function together to provide the essential functionality of the product, the Company considers both the hardware and required software as "non-software deliverables" and has therefore concluded that such arrangements are not subject to the industry-specific software revenue recognition guidance. The Company recognizes revenue for these arrangements based on ASC 605, Revenue Recognition, and allocates the arrangement consideration based on the relative selling price of the deliverables. In scenarios where the Company's products include hardware where the software is not considered essential to the functionality of the hardware, the hardware revenue is recognized based on when the revenue recognition criteria is met (i.e., shipment, delivery and/or acceptance) and the software revenue is recognized under the software revenue recognition guidance provided under ASC 985, Software. Upfront License Fees The Company periodically makes long-term investments in contracts with customers and obtains licenses to supply products and services to the customers. As consideration, the Company pays license fees, which are classified as other non-current assets in the consolidated balance sheets. Consistent with the guidance in ASC Subtopic 605-50, Customer Payments and Incentives, the Company recognizes the amortization of the license fees as a reduction of service revenue over the estimated useful life of the contract. This method reflects the pattern in which economic benefits are expected to be realized. The recoverability of each payment is subject to significant estimates about future revenues related to the contracts' future cash flows. The Company evaluates these assets for impairment and updates amortization rates on an agreement Annual Reports and Accounts 2017 Page I 90

by agreement basis. The assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In periods in which payments are made to the customer, the Company classifies the payment as a cash outflow from operating activities in accordance with ASC 230, Statement of Cash Flows. Jackpot Accounting The Company incurs jackpot expense and accrues jackpot liabilities with every wager on devices connected to a WAP system. Only WAP games include Company-sponsored jackpots for which the Company incurs jackpot expense. A portion of the fees paid to the Company is used for the funding and administration of Company-sponsored WAP jackpot payments. Jackpot expense represents the estimated cost to fund jackpots and is recorded to cost of services in the consolidated statement of operations. Changes in estimates for WAP jackpot liabilities and expenses are attributable to regular analysis and evaluation of the following factors: variations in slot play; number of WAP units in service and volume of play; interest rate movements; and the size of WAP jackpots at initial setup or after a WAP jackpot is won. The Company's WAP jackpots are generally payable in equal annual installments over 20 to 26 years, or immediately in the case of instant wins. Winners may elect to receive a lump sum payment for the present value of the jackpot discounted at applicable interest rates in lieu of periodic annual installments. Discount rates eligible for use in the lump sum payment calculation vary by jurisdiction and are impacted by market forces and other economic conditions. Jackpot liabilities are composed of payments due to previous winners, as well as amounts due to future winners of WAP jackpots not yet won. Liabilities due to previous winners for periodic payments are carried at the accreted cost of a qualifying U.S. government or agency annuity investment that may be purchased at the time of the WAP jackpot win. If an annuity is subsequently sold and the periodic liability is instead guaranteed by surety bonds or letters of credit, the liability initially funded by an annuity continues to accrete at the same rate. If the periodic liability is not initially funded with an annuity investment, it is discounted and accreted using the risk-free rate (i.e. treasury rate) at the time of the WAP jackpot win. Liabilities due to future winners are recorded at the present value of the estimated amount of WAP jackpots not yet won. The Company estimates the present value of future winner liabilities using current market rates (prime, treasury, or agency, as applicable), weighted with historical lump sum payout election ratios. The most recent historical patterns indicate that approximately 90% of winners will elect the lump sum payment option. Additionally, the Company estimates the current portion of future winner liabilities based on historical experience with winner payment elections, in conjunction with the theoretical projected number of WAP jackpots. Restricted Cash and Investments The Company is required by gaming regulation to maintain sufficient reserves in restricted cash accounts to be used for the purpose of funding payments to WAP jackpot winners. In certain cases, regulators have allowed for surety bonds or letters of credit in lieu of restricted cash. Restricted amounts are based primarily on the WAP jackpot amount displayed to slot players and vary by jurisdiction. Compliance with restricted cash and investment or assurance requirements for jackpot funding is reported to gaming authorities in various jurisdictions. Additionally, restricted cash is maintained for interactive online player deposits, as well as collections on factored and serviced receivables not yet paid through to the third-party owner. Annual Reports and Accounts 2017 Page I 91

Cash and Cash Equivalents Cash and cash equivalents are composed of cash at banks and on-hand, and short-term highly liquid investments with a maturity of ninety days or less. Cash equivalents are stated at fair value. Allowance for Credit Losses The Company maintains an allowance for credit losses for the estimated probable losses on uncollectible trade and customer financing receivables. The allowance is estimated based upon the credit-worthiness of the Company's customers, historical experience, aging analysis, as well as current market and economic conditions. Receivables are written off against these allowances in the period they are determined to be uncollectible. The Company determines its allowances for credit losses on customer financing receivables based on two classes: contracts and notes. Contracts include extended payment terms granted to qualifying customers for periods from one to five years and are typically secured by the related products sold. Notes consist of development financing loans granted to select customers to assist in the funding of new or expanding gaming facilities, generally under terms of one to seven years, and are secured by the developed property and/or other customer assets. Customer financing interest income is recognized based on market rates prevailing at issuance. Legal and Other Contingencies Loss contingency provisions arising from a legal proceeding or claim are recorded for probable and estimable losses at the best estimate of a loss, or when a best estimate cannot be made, at the minimum estimated loss, the determination of which requires significant judgment. If it is reasonably possible but not probable that a liability has been incurred, or if the amount of a probable loss cannot be reasonably estimated, the amount or range of estimated loss is disclosed, if material. Legal costs are expensed as incurred. Redeemable Non-Controlling Interests Upon issuance, redeemable non-controlling interests are generally recorded at fair value. Subsequent to issuance, redeemable non-controlling interests are reported at their redemption value no later than the date they become redeemable by the holder. Income Taxes The Company records a tax provision for the anticipated tax consequences of its reported operating results. The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to the taxable income in effect for the years in which those assets and liabilities are expected to be realized and settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based upon the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Annual Reports and Accounts 2017 Page I 92

Management believes it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with future reversals of existing taxable temporary differences, will be sufficient to fully recover the deferred tax assets not otherwise subject to a valuation allowance. In the event that the Company determines all or part of the deferred tax assets are not realizable in the future, the Company will record an adjustment to the valuation allowance that would be charged to earnings in the period such determination is made. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of GAAP and complex tax laws. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was enacted into law in the United States and the new legislation contains several key tax provisions that affected the Company, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, re-measuring U.S. deferred tax assets and liabilities as well as reassessing the net realizability of deferred tax assets and liabilities. In December 2017, the United States Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation is expected over the next 12 months, the Company considers the accounting of the transition tax, deferred tax re-measurements, global intangible low-taxed income (GILTI) and other items to be incomplete due to the forthcoming guidance and the Company's ongoing analysis of final year-end data and tax positions. The Company expects to complete its analysis within the measurement period in accordance with SAB 118. Refer to Note 14, Income Taxes, for additional information. Acquisitions and Intangible Assets Including Goodwill The Company accounts for acquired businesses using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree are recorded at their acquisition date fair values. Goodwill represents the excess of the purchase price, including the fair value of any contingent consideration, over the fair value of the net assets acquired, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired businesses and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Acquisition and disposition related costs are included in transaction (income) expense, net in the consolidated statements of operations. Transaction (income) expense, net is composed of transaction costs on significant business combinations and significant gains and losses incurred on disposals of group entities or businesses. The results of operations of acquired businesses are included in the consolidated financial statements from the date control is obtained. The fair value of identifiable intangible assets is based on significant judgments made by the Company, including the selection of the appropriate valuation methodologies and the determination of the economic lives of the assets acquired. These estimates and assumptions are based on historical and industry experience, information obtained from management of the acquired business, and also include, but are not limited to, future expected cash flows earned from the identified intangible assets and discount rates applied in determining the present value of those cash flows. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Acquired identifiable intangible assets are amortized on a straight-line basis over their estimated economic lives. Amortization of acquired software-related intangibles is included in cost of services and cost of product sales and amortization of other acquired intangible assets is included in selling, general and administrative expenses in the consolidated statement of operations. Annual Reports and Accounts 2017 Page I 93

Impairment Goodwill and other indefinite-lived intangible assets are tested at least annually, in the fourth quarter, for impairment and whenever changes in circumstances indicate an impairment may exist. Goodwill is tested at the reporting unit level, which is one level below or the same level as an operating segment. The process of evaluating the potential impairment related to goodwill and other indefinite-lived intangible assets requires the application of significant judgment. If an event occurs that would cause revisions to the estimates and assumptions used in analyzing the value of goodwill and other indefinite-lived intangible assets, the revision could result in a non-cash impairment loss that could have a material impact on the Company's financial results. Long-lived assets, other than goodwill and other indefinite-lived intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The impairment test is based on discounted cash flows and, if impaired, the asset is written down to fair value. If an event occurs that requires revised estimates and assumptions previously used in analyzing the value of long-lived assets, other than goodwill and indefinite-lived intangible assets, that revision could result in a non-cash impairment loss that could have a material impact on the Company's financial results. Depreciation and Amortization Systems, equipment and other assets relating to contracts and property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment loss, if any. Depreciation commences when the asset is placed in service and is recognized on a straight-line basis over the estimated useful lives of the assets. Repair and maintenance costs, including planned maintenance, are expensed as incurred. Definite-lived intangible assets are carried at cost and amortized over their estimated useful lives on a straight-line basis. Research and Development and Capitalized Software Development Costs Research and development (R&D) costs are expensed as incurred. R&D costs include salaries and benefits, stock-based compensation, consultants' fees, facilities-related costs, material costs, depreciation and travel. Costs incurred in the development of the Company's externally-sold software products are expensed as incurred, except certain software development costs eligible for capitalization. Material software development costs incurred subsequent to establishing technological feasibility and through the general release of the software products are capitalized. Technological feasibility is demonstrated by the completion of a detailed program design or working model, if no program design is completed. Capitalized costs are amortized to cost of product sales over the products' estimated economic life. Costs incurred in the development of software to be used only for services provided to customers are capitalized as internal-use software and amortized over the useful life to cost of services. Costs incurred in the development of software to be used only for internal use are capitalized as internal-use software and amortized over the useful life to selling, general and administrative expenses. Stock-Based Compensation Stock-based compensation represents the cost related to stock-based awards granted to directors and employees. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award and recognized as expense, net of estimated forfeitures, over the vesting period. For awards that contain only a service vesting feature, compensation cost is recognized on a straight-line basis Annual Reports and Accounts 2017 Page I 94

over the awards' vesting period. For awards with a performance condition, when achievement of the performance condition is deemed probable, compensation cost is recognized on a graded-vesting basis over the awards' expected vesting period. Advertising Advertising costs are expensed as incurred. Advertising expense was $111.9 million, $151.6 million and $130.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. New Accounting Standards - Recently Adopted In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation-Stock Compensation (Topic 718) - Scope of Modification Accounting. The amended guidance clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. The amended guidance is effective prospectively for annual periods beginning on or after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. The Company adopted the new standard prospectively on May 10, 2017. The adoption did not have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. In accordance with the amended guidance, the Company will perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value, and an impairment loss will be recognized for the amount by which the carrying value exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The amended guidance is effective for the Company in the first quarter of 2020 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017, and must be applied prospectively. Given the simplified nature of the new standard, the Company adopted it prospectively on January 1, 2017 and applied the guidance to its interim goodwill impairment test as discussed in Note 10, Goodwill. New Accounting Standards - Not Yet Adopted In November 2017, the FASB issued ASU No. 2017-14, Income Statement - Reporting Comprehensive Income (Topic CC), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). The new guidance amends portions of Topics 22, 605 and 606 to refer to guidance within ASC 606. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact and timing of adopting this guidance. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). The new guidance expands and refines hedge accounting for both financial and non-financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact and timing of adopting this guidance. In February 2017, the FASB issued ASU No. 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets. The new guidance clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in-substance non-financial asset. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual Annual Reports and Accounts 2017 Page I 95

periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The new guidance clarifies the definition of a business in order to allow for the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic C30): Restricted Cash. The amended guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amended guidance is effective for the Company in the first quarter of 2018 with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic C30): Classification of Certain Cash Receipts and Cash Payments. The new guidance reduces diversity in practice in financial reporting by clarifying certain existing principles in the Statement of Cash Flows. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 3C6). The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The new guidance will be effective for the Company beginning January 1, 2020, with early adoption permitted beginning January 1, 2018. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact and timing of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 84C). The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of the Company's operating leases, where the Company is the lessee, to be recognized on its consolidated balance sheet. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The amended guidance is effective for the Company in the first quarter of 2019 with early adoption permitted. The Company is currently evaluating the impact and timing of adopting this guidance. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 8C5-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance makes improvements specifically around recognition and measurement of financial assets and liabilities. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance. Annual Reports and Accounts 2017 Page I 96

In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers. The amended guidance, combined with all subsequent amendments (collectively ASU 2014-09), outlines a single comprehensive revenue model in accounting for revenue from contracts with customers. ASU 2014-09 supersedes existing revenue recognition guidance under GAAP, including industry-specific guidance, and replaces it with a five-step revenue model with a core principle to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Under ASU 2014-09, more judgment and estimates will be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company in the first quarter of 2018. The Company will adopt this guidance using a modified retrospective application approach which results in a cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of adopting this guidance by operating segment and revenue type. Given the comprehensive nature of the standard, the Company has already taken significant steps to identify the impact on its consolidated financial results. The Company has completed an evaluation by revenue type to identify potential differences between current accounting policies and ASU 2014-09. Additionally, the Company has engaged a third-party to assist in its evaluation of customer contracts, based on inherent complexity, to identify the attributes that could result in a different accounting treatment under ASU 2014-09. Based on the evaluations completed, ASU 2014-09 is not expected to change the revenue recognition practices for most of the Company's service revenue; however, it is expected to result in some differences regarding the timing of revenue recognition for the Company's product sales. Additionally, the new standard is expected to result in the reclassification of the Company's jackpot expense from cost of services to a reduction of service revenue on the consolidated statements of operations. For 2017, such amounts were approximately $64.0 million. The Company does not currently anticipate significant changes to its business processes and systems to support the adoption of the new guidance, and the Company is currently assessing the impact on its internal controls. The Company will continue to monitor and assess the impact of any changes to the standard and interpretations as they become available. The Company does not currently expect that any other recently issued accounting guidance will have a significant effect on its consolidated financial statements. Annual Reports and Accounts 2017 Page I 97

3. Dispositions and Acquisitions Sale of Double Down Interactive LLC On June 1, 2017, the Company sold Double Down Interactive LLC (DoubleDown) to DoubleU Games Co., Ltd. Details of the transaction are summarized in the table below. For the year ended December 31, ($ thousands) 2017 Less: Cash divested (1,963) Net book value (772,440) Selling costs (24,116) The $27.2 million gain on sale of DoubleDown, net of selling costs, is classified within transaction (income) expense, net on the consolidated statement of operations. Acquisition of IGT The acquisition of IGT was completed on April 7, 2015 (the Acquisition Date). IGT was a global gaming company specializing in the design, development, manufacturing and marketing of casino-style gaming equipment, systems technology and game content across multiple platforms land-based, online real money and social gaming. The acquisition of IGT established the Company as the world's leading end-to-end gaming company, uniquely positioned to capitalize on opportunities in global gaming markets. The Company combines best-in-class content, operator capabilities, and interactive solutions, joining IGT's leading game library and manufacturing and operating capabilities with GTECH's gaming operations, lottery technology and services. Total acquisition consideration of $4.545 billion consisted of $3.616 billion cash consideration and $0.929 billion equity consideration. Consistent with the terms of the transaction, equity consideration was determined based on the average of the volume-weighted average prices of GTECH common shares on the Italian Stock Exchange, converted to the U.S. dollar equivalent, for 10 randomly selected days within the period of 20 consecutive trading days ending on the second full trading day prior to the Acquisition Date. Under the terms of the transaction, IGT shareholders received 45.3 million common shares of the Parent, and IGT employees received 1.4 million restricted stock units. The Company utilized the closing stock price immediately prior to the merger and the number of shares issued to determine the fair value of the consideration. Equity consideration included the fair value of shares vested and outstanding immediately prior to the Acquisition Date of $917.3 million and the portion of outstanding restricted stock units deemed to have been earned as of the Acquisition Date of $11.6 million. The portion of outstanding restricted stock units deemed not to have been earned as of the Acquisition Date of $16.2 million were expensed over the remaining future vesting period. The transaction was accounted for as a business combination using the acquisition method of accounting. This method requires that the assets acquired and liabilities assumed be recognized at their fair values as of the Acquisition Date. In 2016, adjustments were made to finalize the fair value of tax assets and liabilities. Annual Reports and Accounts 2017 Page I 98 Gain on sale, net of selling costs27,232 Gain on sale51,348 Net cash proceeds823,788 Cash proceeds825,751

The cash outflow associated with the IGT acquisition is summarized as follows: ($ thousands) Cash payment for IGT employee stock awards 43,442 Less cash acquired (374,995) The fair values of acquired intangible assets as of the Acquisition Date along with the weighted-average useful lives over which the finite-lived intangibles approximates their economic use) are as follows: are being amortized on a straight-line basis (which Weighted Average Useful Life in Years ($ thousands) Fair Value Game library 360,000 2.5 Computer software 275,000 9.4 Product trademarks 90,000 7.3 In 2017, the Company recorded a $714.0 million non-cash goodwill impairment loss with no income tax benefit, and in 2016 recorded an impairment loss of $30.0 million related to certain of the acquired corporate trademarks. The Company incurred $1.7 million and $49.4 million of legal, accounting and other professional fees and expenses in 2016 and 2015, respectively, related to the IGT acquisition. These expenses are classified within transaction (income) expense, net on the consolidated statements of operations. The Company's consolidated financial statements for the year ended December 31, 2015 include IGT's results of operations from April 7, 2015 through December 31, 2015. Revenue and operating loss attributable to IGT during this period total $1.346 billion and $45.4 million, respectively. The $45.4 million operating loss includes $276.0 million of acquired intangible assets amortization, which are a direct result of the IGT acquisition. The following unaudited, pro forma financial information presents the combined results of operations as if the acquisition had been completed on January 1, 2014, the beginning of the comparable prior annual period. This pro forma information is provided for illustrative purposes only and is not necessarily indicative of the results that would have been obtained if the acquisition had occurred on the date assumed or that may occur in the future, and does not reflect synergies, integration costs, or other such costs or savings. For the year ended December 31, 2015 ($ thousands) Net loss (61,946) This pro forma financial information is based on historical results of operations adjusted for: Annual Reports and Accounts 2017 Page I 100 Revenue5,105,159 2,960,000 Developed technologies180,0003.8 Corporate trademarks340,000Indefinite Customer relationships1,715,00014.8 Net cash outflow3,241,415 3,616,410 Cash payment for IGT shares outstanding3,572,968

4. Trade and Other Receivables, net Trade and other receivables, net are recorded at cost. December 31, 2017 2016 Allowance for credit losses (53,323) (58,884) The following table presents the activity in the allowance for credit losses related to trade receivables: December 31, ($ thousands) 2017 2016 2015 Provisions, net (12,255) (13,594) (18,883) Foreign currency translation (5,885) 1,558 9,263 Balance at end of year (53,323) (58,884) (76,137) The Company has two agreements with major European financial institutions to sell certain trade receivables related to the Italy segment on a non-recourse basis. These receivables have been derecognized from the Company's consolidated balance sheets. The agreements have a three and five year duration, respectively, and are subject to early termination by either party. The aggregate amount of outstanding receivables is limited to a maximum amount of €300 million and €150 million for Scratch & Win and Commercial Services, respectively. At December 31, 2017 and 2016, the following receivables had been sold: December 31, 2017 December 31, 2016 (in thousands) euro $ euro $ Commercial services 45,417 54,469 59,334 62,544 The Company also sold trade receivables on a non-recourse basis and derecognized $18.6 million and $19.5 million at December 31, 2017 and 2016, respectively, primarily in the North America Gaming and Interactive segment. Annual Reports and Accounts 2017 Page 1 102 221,265265,363203,959214,993 Scratch & Win175,848210,894144,625152,449 Other5,875 (401) Amounts written off as uncollectible17,82629,28925,703 Balance at beginning of year(58,884)(76,137)(91,819) Net 937,854947,237 Gross991,1771,006,121

6. Other Assets Other current assets December 31, ($ thousands) 2017 2016 Other receivables 65,891 104,689 Value added tax receivable 49,962 37,623 Other 49,734 70,429 Other non-current assets December 31, ($ thousands) 2017 2016 Italian Scratch & Win 1,145,998 257,669 New Jersey 100,730 109,490 2,073,674 1,187,339 Prepaid royalties 103,322 138,314 Prepaid income taxes 72,176 14,309 2,427,953 1,497,662 Upfront License Fees Italian Scratch & Win In December 2017, Lotterie Nazionali S.r.l., a majority-owned subsidiary of the Company, was awarded a nine-year contract extension for the Italian Scratch & Win concession (the Italian Scratch & Win extension) that required an upfront license fee of €800 million ($959.4 million at the December 31, 2017 exchange rate), of which €50 million ($59.3 million) was paid in 2017. Annual Reports and Accounts 2017 Page 1 104 Other103,883103,738 Customer financing receivables, net74,89853,962 Indiana14,64216,038 Italian Lotto812,304804,142 Upfront license fees, net: 407,520424,727 Prepaid expenses30,97736,838 Prepaid royalties59,59665,375 Customer financing receivables, net151,360109,773

The upfront license fees are being amortized as follows: Amortization Start Date Upfront License Fee License Term Italian Scratch & Win extension 9 years October 2019 New Jersey 15 years, 9 months October 2013 Customer Financing Receivables Customer financing receivables, net are recorded at cost. At December 31, 2017 and 2016, $34.2 million and $29.2 million, respectively, of certain outstanding customer financing receivables were sold on a non-recourse basis. The allowance for customer financing receivables, net are as follows: December 31, 2017 Allowance for credit losses ($ thousands) Gross Net Non-current 77,847 (2,949) 74,898 December 31, 2016 Allowance for credit losses ($ thousands) Gross Net Non-current 56,914 (2,952) 53,962 The following table presents the activity in the allowance for credit losses related to customer financing receivables, net: December 31, ($ thousands) 2017 2016 2015 Provisions, net (5,236) (4,481) (3,706) Foreign currency translation (159) (59) 513 Balance at end of year (19,574) (7,856) (3,888) Annual Reports and Accounts 2017 Page 1 105 Other(6,323)(143) Amounts written off as uncollectible20 Balance at beginning of year(7,856)(3,888) 171,591(7,856)163,735 Current114,677(4,904)109,773 245,832(19,574)226,258 Current167,985(16,625)151,360 Indiana15 yearsJuly 2013 Italian Lotto9 yearsDecember 2016 Italian Scratch & Win9 yearsOctober 2010

7. Fair Value of Financial Assets and Liabilities Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets and liabilities based on the following fair value hierarchy: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly; and Level 3: Unobservable inputs for the assets or liabilities. The guidance requires the use of observable market data if such data is available without undue cost and effort. Valuation methods and assumptions used to estimate fair value, when quoted market prices are not available, are subject to judgments and changes in these factors can materially affect fair value estimates. For financial assets and financial liabilities that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and investments, accounts receivable, other current assets, accounts payable, and other current liabilities approximate fair value due to relatively short periods to maturity. Financial assets and liabilities carried at fair value The following tables represent the fair value hierarchy for financial assets and liabilities measured at fair value at December 31, 2017 and 2016: December 31, 2017 Total Fair Value ($ thousands) Level 1 Level 2 Level 3 Foreign Currency Forward Contracts 501 501 Call Option 2,638 2,638 Jackpot Investments 459 459 Foreign Currency Forward Contracts 4,399 4,399 Annual Reports and Accounts 2017 Page 1 106 Interest Rate Swaps14,95314,953 Derivative Liabilities: Contingent Consideration7,7557,755 Available-for-Sale Investments11,99111,991 Interest Rate Swaps479479 Derivative Assets: Restricted Investments57,46557,465

December 31, 2016 ($ thousands) Level 1 Level 2 Level 3 Total Foreign Currency Forward Contracts 8,339 8,339 Available-for-Sale Investments 12,666 12,666 Contingent Consideration 2,241 2,241 Derivative Liabilities: Interest Rate Swaps 13,709 13,709 For the contingent consideration liability, a net gain was recognized for approximately $2.2 million within selling, general and administrative expense on the consolidated statement of operations for the year ended December 31, 2017. Valuation Techniques and Balance Sheet Presentation Restricted investments are primarily composed of publicly-traded foreign government and corporate bonds and mutual funds, and were valued using quoted market prices. Restricted investments are presented in restricted cash and investments in the consolidated balance sheets. Foreign currency forward contracts were calculated by reference to current forward exchange rates for contracts with similar maturity profiles. Foreign currency forward contracts are presented as other current assets and other current liabilities in the consolidated balance sheets. Interest rate swaps were calculated by discounting future cash flows using LIBOR rates with an appropriate adjustment for credit risk. Interest rate swaps are presented as other current assets and other non-current liabilities in the consolidated balance sheets. The call option contract was valued based upon a free cash flow forecast and is presented as other non-current assets in the consolidated balance sheets. Jackpot investments were valued using quoted market prices. Jackpot investments are presented as other current and other non-current assets in the consolidated balance sheets. Available-for-sale investments were valued using quoted market prices. Available-for-sale investments are presented as other non-current assets in the consolidated balance sheets. Contingent consideration was valued using a multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) and is presented as other current liabilities in the consolidated balance sheets. Annual Reports and Accounts 2017 Page 1 107 Foreign Currency Forward Contracts126126 Jackpot Investments4,1844,184 Interest Rate Swaps1,0791,079 Derivative Assets: Restricted Investments46,71846,718

Assets and liabilities not carried at fair value The following tables represent the fair value hierarchy for assets and liabilities not measured at fair value at December 31, 2017 and 2016: December 31, 2017 Carrying Value Total Fair Value Unrealized Gain (Loss) Realized Loss ($ thousands) Level 1 Level 2 Level 3 receivables, net 226,258 225,718 225,718 (540) Available-for-sale investments 12,409 12,409 12,409 Jackpot liabilities 275,626 268,581 268,581 7,045 December 31, 2016 Carrying Value Total Fair Value Unrealized Gain (Loss) ($ thousands) Level 1 Level 2 Level 3 Available-for-sale investments 14,838 14,838 14,838 Debt 7,872,285 8,415,890 8,415,890 (543,605) Valuation Techniques and Balance Sheet Presentation Customer financing receivables, net are recorded and valued based on expected payments and market interest rates (ranging from 4.30% to 10.05%) relative to the credit risk of each customer region. Credit risk is determined on a number of factors, including customer size, type, financial condition, historical collection experience, account aging, and credit ratings derived from credit reporting agencies and other industry trade reports. Contracts are typically secured by the underlying assets sold and notes are secured by the developed property and/or other assets. The higher risk rate categories include most of the Company's development financing loans in new markets and customers in regions with a history of currency or economic instability, such as Latin America. Customer financing receivables, net are presented as other current and other non-current assets in the consolidated balance sheets. Available-for-sale investments are carried at cost (which approximates fair value) and are presented as other non-current assets in the consolidated balance sheets. During the third quarter of 2017, the Company recorded a $714.0 million non-cash impairment charge with no income tax benefit to reduce the carrying value of the North America Gaming and Interactive reporting unit to its implied fair value. The Company's assessment of goodwill for impairment includes various inputs, such as cash flow projections. In calculating the fair value of the North America Gaming and Interactive reporting unit using the income approach, the Company used projections of revenues, operating costs and capital expenditures. The projected cash flows considered historical and estimated future results and general economic and market conditions, as well as the impact of planned business and operational strategies. As a result, the Company classifies the North America Gaming and Interactive reporting unit's goodwill measured at fair value on a non-recurring basis within Level 3 of the fair value hierarchy. Jackpot liabilities were primarily valued using discounted cash flows, incorporating expected future payment timing, estimated funding rates based on the treasury yield curve, and nonperformance credit risk. Expected annuity payments over one to 25 years (average 10 years) were discounted using the 10-year treasury yield curve rate (2.40%) for the estimated funding rate and the 10-year credit default swap rate (1.87%) for Annual Reports and Accounts 2017 Page 1 108 Jackpot liabilities299,042291,026291,0268,016 Customer financing receivables, net163,735165,241165,2411,506 Debt8,391,6478,974,1268,974,126(582,479) Goodwill1,439,8671,439,8671,439,867(714,000) Customer financing

nonperformance risk. The present value (carrying value) of the expected lump sum payments were discounted using the 1-year treasury yield curve rate (1.76%) with the 1-year credit default swap rate (0.17%) for the current amounts and the 2-year treasury yield curve rate (1.89%) with the 2-year credit default swap rate (0.28%) for non-current amounts. Significant increases (decreases) in any of these inputs in isolation would result in a lower (higher) fair value measurement. Generally, changes in the estimated funding rates do not correlate with changes in non-performance credit risk. Jackpot liabilities are presented as other current and other non-current liabilities in the consolidated balance sheets. Debt is categorized within Level 2 of the fair value hierarchy. Senior Secured Notes are valued using quoted market prices or dealer quotes for the identical financial instrument when traded as an asset in markets that are not active. Revolving credit facilities and term loans with variable interest rates are valued using current interest rates, excluding the effect of debt issuance costs. Carrying values in the table exclude swap adjustments. Annual Reports and Accounts 2017 Page 1 109

8. Derivatives The Company uses derivatives to manage the impact of foreign currency exchange and interest rate changes on earnings and cash flows. The Company does not enter into derivatives for speculative purposes. Derivatives are recognized as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative depends on the nature of the hedge and the hedge effectiveness. The Company's policy is to negotiate the terms of the derivative to match the terms of the hedged item to maximize hedge effectiveness. Derivative gains and losses are reported in the consolidated statements of cash flows consistent with the classification of cash flows from the underlying hedged items. The Company uses foreign currency forward and option contracts to hedge its exposure on certain forecasted foreign currency revenue and expense transactions. The terms of the contracts are typically matched with the forecasted foreign currency transactions to be derived from operations up to a period of 12 months. These derivatives are designated as cash flow hedges. All outstanding cash flow hedges are recognized in the consolidated balance sheets at fair value with the effective portion of the gain or loss recorded in accumulated other comprehensive income (loss). When the underlying hedged transaction is recognized, the effective portion of the gain or loss on the derivative is reclassified from accumulated other comprehensive income (loss) to the consolidated statement of operations. Any ineffectiveness is recognized immediately into earnings. The Company also uses foreign currency forward and option contracts to offset its exposure to the change in value of certain foreign currency denominated monetary assets and liabilities. Because these derivatives hedge existing exposures that are denominated in foreign currencies, the contracts do not qualify for hedge accounting. Accordingly, these outstanding non-designated derivatives are recognized in the consolidated balance sheet at fair value with the changes in fair value recorded in foreign exchange gain (loss), net, in the consolidated statements of operations. These derivative contracts mature in less than one year. The Company uses interest rate derivatives designated as fair value hedges to manage the exposure to interest rate movements and to reduce borrowing costs by converting fixed-rate debt into floating-rate debt. Under these derivatives, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to agreed-upon notional principal amounts. Changes in the fair value of the derivative are recorded in other income (expense), net and are offset by changes in the fair value of the underlying debt instrument due to changes in the benchmark interest rate. The cash flows from these contracts are reported as operating activities in the consolidated statements of cash flows. The gains (losses) from expired interest rate swaps (swaps) are recorded in long-term debt, increasing or decreasing the outstanding balances of the debt, and amortized as a reduction or addition of interest expense over the remaining life of the related debt. The cash flows from the termination of the swaps are reported as operating activities in the consolidated statements of cash flows. Cash flow hedges The gross notional amount of foreign currency forward contracts, designated as cash flow hedges, outstanding at December 31, 2017 and 2016 was $100.8 million and $120.9 million, respectively. The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. Refer to Note 18, Shareholders' Equity for more details on the reclassification of amounts from accumulated other comprehensive income into earnings. The ineffective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recognized directly in earnings. The amount retained in other comprehensive income at December 31, 2017 is expected to mature and affect the consolidated statement of operations in 2018. Annual Reports and Accounts 2017 Page 1 110

Fair value hedges In September 2015, the Company executed $625 million notional amount of swaps that effectively convert $625 million of the 6.250% Senior Secured Notes due 2022 from fixed interest rate debt to variable rate debt. Under the terms of these swaps, the Company is required to make variable rate interest payments based on six-month LIBOR plus a fixed spread, ranging between 5.90% and 6.02% at December 31, 2017, and will receive fixed rate interest payments from its counterparties based on a fixed rate of 6.25%. The LIBOR rate resets semiannually on February 15 and August 15. Settlement of the net amount of interest receivable or payable under the swaps occurs semiannually on February 15 and August 15. The swaps expire in February 2022. During 2015, the Company held swaps exchanging fixed rate interest payments for variable rate interest payments on a portion of the 7.500% Senior Secured Notes due 2019 and a portion of the 5.500% Senior Secured Notes due 2020. These swaps were canceled in 2015 and the Company received cash proceeds of $67.8 million from the swap counterparties upon settlement. Derivatives not designated as hedging instruments The notional amount of foreign currency forward contracts, not designated as hedging instruments, outstanding at December 31, 2017 and 2016 was $460.6 million and $364.5 million, respectively. Presentation of Derivative Amounts All derivatives are recorded gross, except netting of foreign exchange contracts and counterparty netting of swaps' interest receivable and payable, as applicable. Balance Sheet Location and Fair Value At December 31, 2017 2016 ($ thousands) Assets Liabilities Assets Liabilities Non-current financial liabilities 14,953 13,709 Gross Derivatives (135) 4,586 Non-Designated Hedges: Foreign Currency Contracts, net Current financial liabilities 2,037 126 Cash Flow Hedges: Foreign Currency Contracts, net Current financial liabilities 2,362 Counterparty Netting: Swap Interest nterest due from counterparty 479 1,079 Annual Reports and Accounts 2017 Page 1 111 Net Derivatives9804,2649,4184,712 Current financial assets: Current financial assets3,374 Current financial assets5014,965 Long-term debt(15,088)(9,123) Fair Value Hedges: Interest Rate Swaps

9. Systems, Equipment and Other Assets Related to Contracts, net and Property, Plant and Equipment, net The Company has two categories of fixed assets: systems, equipment and other assets related to contracts (Systems & Equipment); and property, plant and equipment (PPE). Systems & Equipment are assets that primarily support the Company's operating contracts and facilities management contracts (collectively, the Contracts) and are principally composed of lottery and gaming assets. The estimated useful lives for Systems & Equipment depends on the type of cost as follows: • • • Lottery hard costs (such as terminals, mainframe computers, communications equipment); Lottery soft costs (such as software development costs represented by internal personnel costs); and Commercial gaming machines. Lottery hard and soft costs are typically depreciated over the base term of the Contracts the asset relates to, generally not to exceed 10 years, and commercial gaming machines over three to five years. PPE are assets the Company uses internally, primarily in manufacturing, selling, general and administration, research and development, and commercial service applications not associated with contracts. Buildings are depreciated over 40 years, furniture and equipment over five to ten years, and leasehold improvements are amortized over the shorter of the lease term or estimated useful life. Systems & Equipment and PPE, net consist of the following: Systems & Equipment, net PPE, net December 31, December 31, ($ thousands) 2017 2016 2017 2016 Buildings 151,962 121,572 70,389 219,416 Furniture and equipment 197,610 172,666 241,632 234,458 Construction in progress 20,603 36,353 Accumulated depreciation (2,035,018) (1,917,247) (141,443) (151,173) Borrowing costs of $4.2 million and $1.5 million were capitalized to Systems & Equipment in 2017 and 2016, respectively. The rate used to determine the amount of borrowing costs eligible for capitalization was approximately 5.8% and 5.6% for 2017 and 2016, respectively, which was the effective interest rate of all borrowings. Impairment losses related to Systems & Equipment of $1.2 million, $7.7 million and $2.8 million were recorded in 2017, 2016 and 2015, respectively. Annual Reports and Accounts 2017 Page 1 113 1,434,1941,199,674193,723357,841 3,469,2123,116,921335,166509,014 Contracts in progress149,245169,367 Terminals and systems2,969,8482,652,742 Land5475742,54218,787

10. Goodwill Changes in the carrying amount of goodwill consist of the following: North America Gaming and Interactive North America Lottery ($ thousands) International Italy Total Foreign currency translation (7,470) (20,381) (27,851) Balance at December 31, 2016 2,625,880 1,221,529 1,527,549 1,435,054 6,810,012 Impairment loss (714,000) (714,000) Acquisitions 14,890 7,303 22,193 Other 987 60 156 (328) 875 Cost 2,625,880 1,225,622 1,639,282 1,436,635 6,927,419 2,625,880 1,221,529 1,527,549 1,435,054 6,810,012 Balance at December 31, Accumulated impairment loss (714,000) (4,093) (125,000) (1,799) (844,892) The Company assesses its reporting units annually and has four reporting units (which are equivalent to its segments) at December 31, 2017 as follows: • • • • North America Gaming and Interactive; North America Lottery; International; and Italy. Impairment Loss The Company performed an interim goodwill impairment test at September 30, 2017 for the North America Gaming and Interactive reporting unit that resulted in a $714.0 million non-cash goodwill impairment loss with no income tax benefit to reduce the carrying amount of the North America Gaming and Interactive reporting unit to fair value. The impairment loss had no impact on the Company's operations, cash flows, ability to service debt, compliance with financial covenants, or underlying liquidity. Annual Reports and Accounts 2017 Page 1 114 1,439,8671,221,5891,549,3811,512,9785,723,815 Cost2,153,8671,225,6821,674,3811,514,7776,568,707 Accumulated impairment loss(4,093)(111,733)(1,581)(117,407) Balance at December 31, Balance at December 31, 2017 1,439,8671,221,5891,549,3811,512,9785,723,815 Foreign currency translation6,78670,94977,735 Disposal(473,000)(473,000) Other(278)(278) Acquisitions(402)4,374(64)3,7347,642 Balance at December 31, 20152,626,2821,217,1551,535,0831,451,9796,830,499

11. Intangible Assets, net Intangible assets at December 31, 2017 and 2016 consist of: December 31, 2017 Weighted Gross Carrying Amount Accumulated Amortization Net Book Value Average Life (years) ($ thousands) Customer relationships 2,434,051 956,586 1,477,465 15.2 Trademarks 186,218 47,053 139,165 14.1 Developed technologies 220,213 155,870 64,343 5.4 Sports and horse racing betting rights 132,521 128,888 3,633 6.5 4,247,883 2,221,336 2,026,547 Trademarks 246,913 246,913 December 31, 2016 Weighted Gross Carrying Amount Accumulated Amortization Net Book Value Average Life (years) ($ thousands) Customer relationships 2,590,225 809,669 1,780,556 14.8 Trademarks 200,107 35,923 164,184 13.4 Concessions and licenses 255,299 153,277 102,022 10.3 Sports and horse racing betting rights 115,991 112,060 3,931 6.5 4,366,535 1,804,417 2,562,118 Trademarks 311,913 311,913 In connection with the June 2017 sale of DoubleDown, the Company recorded a $277.3 million reduction in net book value of intangible assets (principally customer relationships and trademarks) related to the sale. The Company recorded impairment losses of $30.0 million in its North America Gaming and Interactive segment in 2016 for certain indefinite lived trademarks relating to the forecasted slowing of growth in the social gaming market and $9.7 million in its International segment in 2015 for certain indefinite lived trademarks. The Company used the Relief from Royalty method in determining the amount of the impairment losses. Annual Reports and Accounts 2017 Page 1 115 Total intangible assets, excluding goodwill4,678,4481,804,4172,874,031 Not subject to amortization Other8,6543,5575,09716.1 Networks15,68911,2254,4647.0 Developed technologies234,420128,200106,2205.4 Computer software and game library946,150550,506395,6445.7 Subject to amortization Total intangible assets, excluding goodwill4,494,7962,221,3362,273,460 Not subject to amortization Other8,6604,1104,55016.1 Networks18,80613,5715,2357.0 Concessions and licenses300,207204,53395,67410.1 Computer software and game library947,207710,725236,4825.6 Subject to amortization

12. Other Liabilities Other current liabilities December 31, ($ thousands) 2017 2016 Accrued interest payable 179,230 165,290 Taxes other than income taxes 128,703 123,267 Current financial liabilities 113,217 108,915 Deferred revenue 48,222 80,528 Other 30,832 33,473 Payable to Italian Regulator At December 31, 2017, the Company owed €750 million ($899.5 million at the December 31, 2017 exchange rate) to Agenzia delle Dogane e Dei Monopoli, the governmental authority responsible for regulating and supervising gaming in Italy (ADM or the Italian regulator) related to the Italian Scratch & Win extension, which is expected to be paid in 2018. At December 31, 2016, the Company owed the Italian regulator €170 million ($179.2 million at the December 31, 2016 exchange rate) related to the Italian Gioco del Lotto service concession (the Lotto Concession). Other non-current liabilities December 31, ($ thousands) 2017 2016 Deferred revenue 60,831 66,220 Reserve for uncertain tax positions 34,447 14,733 Italian staff severance fund 12,577 11,454 446,113 444,556 Annual Reports and Accounts 2017 Page 1 117 Other53,11948,858 Royalties payable32,99737,681 Finance leases60,76662,142 Jackpot liabilities191,376203,468 1,780,8751,097,045 Advance payments from customers28,87425,473 Jackpot liabilities84,25095,574 Accrued expenses121,181127,092 Employee compensation146,891158,236 Payable to Italian regulator899,475179,197

The principal balance of each debt obligation and a reconciliation to the consolidated balance sheet follows: December 31, 2017 Debt issuance cost, net ($ thousands) Principal Premium Swap Total 2022 1,500,000 (14,808) (15,117) 1,470,075 6.500% Senior Secured Notes due 2025 1,100,000 (13,087) 1,086,913 4.125% Senior Secured Notes due 2020 839,510 (5,855) 833,655 4.750% Senior Secured Notes due 2020 599,650 (14,479) 585,171 5.500% Senior Secured Notes due 2020 124,143 1,757 (191) 125,709 Senior Secured Notes, long-term 5,987,578 (63,266) 5,980 (15,088) 5,915,204 Term Loan Facility due 2023 1,798,950 (13,589) 1,785,361 6.625% Senior Secured Notes due 2018 599,650 (536) 599,114 Annual Reports and Accounts 2017 Page 1 119 Total Debt 8,481,178(95,511)5,980(15,088)8,376,559 Revolving Credit Facilities due 202195,000(18,120)76,880 5.350% Senior Secured Notes due 202360,56751561,082 7.500% Senior Secured Notes due 2019144,3033,708220148,231 5.625% Senior Secured Notes due 2020600,000(4,233)595,767 4.750% Senior Secured Notes due 20231,019,405(10,804)1,008,601 6.250% Senior Secured Notes due

Principal payments for each debt obligation for the next five years and thereafter are as follows: Calendar year 2023 and thereafter ($ thousands) 2018 2019 2020 2021 2022 Total 6.500% Senior Secured Notes due 2025 1,100,000 1,100,000 4.125% Senior Secured Notes due 2020 839,510 839,510 4.750% Senior Secured Notes due 2020 599,650 599,650 5.500% Senior Secured Notes due 2020 124,143 124,143 Senior Secured Notes, long-term 144,303 2,163,303 1,500,000 2,179,972 5,987,578 Term Loan Facility due 2023 383,776 383,776 383,776 647,622 1,798,950 6.625% Senior Secured Notes due 2018 599,650 599,650 Annual Reports and Accounts 2017 Page 1 121 Total Principal Payments 599,650144,3032,547,079478,7761,883,7762,827,5948,481,178 Revolving Credit Facilities due 2021 95,000 95,000 5.350% Senior Secured Notes due 2023 60,56760,567 7.500% Senior Secured Notes due 2019 144,303 144,303 5.625% Senior Secured Notes due 2020 600,000 600,000 4.750% Senior Secured Notes due 2023 1,019,4051,019,405 6.250% Senior Secured Notes due 2022 1,500,000 1,500,000

Senior Secured Notes The key terms of the Company's senior secured notes (the Notes), which are rated Ba2 and BB+ by Moody's Investor Service (Moody's) and Standard & Poor's Ratings Services (S&P), respectively, are as follows: Principal (thousands) Effective Interest Rate Description Issuer Guarantors Collateral Redemption Interest payments 6.500% Senior Secured Notes due 2025 $1,100,000 6.71% Parent * t + Semi-annually in arrears 4.125% Senior Secured Notes due 2020 €700,000 4.47% Parent * t + Semi-annually in arrears 4.750% Senior Secured Notes due 2020 €500,000 6.00% Parent * t ++ Annually in arrears 5.500% Senior Secured Notes due 2020 $124,143 4.88% IGT** tt +++ Semi-annually in arrears 6.625% Senior Secured Notes due 2018 €500,000 7.74% Parent * t ++ Annually in arrears * Certain subsidiaries of the Parent. ** The Parent and certain subsidiaries of the Parent. t Ownership interests of the Parent in certain of its direct subsidiaries and certain intercompany loans with principal balances in excess of $10 million. tt Certain intercompany loans with principal balances in excess of $10 million. + The Parent may redeem in whole or in part at any time prior to (1) the date which is three months prior to maturity with respect to the notes which are due in 2020 and (2) the date which is six months prior to maturity with respect to the notes which are due in 2022, 2023 and 2025 at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. After such dates, the Parent may redeem in whole or in part at 100% of their principal amount together with accrued and unpaid interest. The Parent may also redeem in whole but not in part at 100% of their principal amount together with accrued and unpaid interest in connection with certain tax events. Upon the occurrence of certain events, the Parent will be required to offer to repurchase all of these notes at a price equal to 101% of their principal amount together with accrued and unpaid interest. ++ The Parent may redeem in whole but not in part at the greater of (1) 100% of their principal amount together with accrued and unpaid interest, or (2) at an amount specified in the terms and conditions of these notes. The Parent may also redeem in whole but not in part at 100% of their principal amount together with accrued and unpaid interest in connection with certain tax events. Upon the occurrence of certain events, the Parent will be required to redeem in whole or in part at 100% of their principal amount together with accrued and unpaid interest. +++ IGT may redeem in whole but not in part at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. Upon the occurrence of certain events, IGT will be required to offer to repurchase all of these notes at a price equal to 100% of their principal amount together with accrued and unpaid interest. 1 Subject to a 1.25% per annum decrease in the event of an upgrade in ratings by Moody's and S&P. The Notes contain customary covenants and events of default. At December 31, 2017, the issuers were in compliance with all covenants. Annual Reports and Accounts 2017 Page 1 122 5.350% Senior Secured$60,5675.47%IGT**tt+++Semi-annually Notes due 2023in arrears 7.500% Senior Secured$144,3035.67%IGT**tt+++Semi-annually Notes due 2019in arrears 5.625% Senior Secured$600,0005.98%Parent*t+Semi-annually Notes due 2020in arrears 4.750% Senior Secured€850,0004.98%Parent*t+Semi-annually Notes due 2023in arrears 6.250% Senior Secured$1,500,0006.52%Parent*t+Semi-annually Notes due 2022in arrears

On June 12, 2017, the Company offered to purchase any and all of the $500.0 million 7.500% Senior Secured Notes due 2019 and on June 21, 2017 the Company purchased $355.7 million of these notes for total consideration, excluding interest, of $393.5 million. The Company recorded a $25.7 million loss on early extinguishment of debt in connection with the purchase, which is classified within other expense, net, on the consolidated statement of operations for the year ended December 31, 2017. Term Loan Facility On July 25, 2017, the Parent entered into a senior facility agreement (the Term Loan Facility Agreement) for a €1.5 billion term loan facility maturing in January 2023 (the Term Loan Facility). The Parent used the proceeds from the Term Loan Facility to: • • prepay the €800 million Term Loan Facilities due 2019 in the third quarter of 2017; redeem the €500 million 6.625% Senior Secured Notes due 2018 when they matured on February 2, 2018; and prepay €160 million under the Revolving Credit Facilities due 2021 in the fourth quarter of 2017. • The Parent used the remaining €40 million for general corporate purposes. TheParentmust repay the Term Loan Facility in four installments, as detailedbelow: Amount (€ thousands) Due Date January 25, 2021 320,000 January 25, 2023 540,000 Interest on the Term Loan Facility is payable between one and six months in arrears at rates equal to the applicable LIBOR or EURIBOR plus a margin based on the Company's long-term ratings by Moody's and S&P. At December 31, 2017, the effective interest rate on the Term Loan Facility was 2.05%. The Term Loan Facility is guaranteed by certain subsidiaries of the Parent and is secured by ownership interests of the Parent in certain of its direct subsidiaries and certain intercompany loans with principal balances in excess of $10 million. Upon the occurrence of certain events, the Parent may be required to prepay the Term Loan Facility in full. The Term Loan Facility Agreement contains customary covenants (including maintaining a minimum ratio of EBITDA to net interest costs and maximum ratio of total net debt to EBITDA) and events of default. At December 31, 2017, the Parent was in compliance with all covenants. Annual Reports and Accounts 2017 Page 1 123 January 25, 2022320,000 January 25, 2020320,000

Revolving Credit Facilities The senior facilities agreement (the RCF Senior Facilities Agreement) provides for the following multi-currency revolving credit facilities (the Revolving Credit Facilities): Maximum Amount Available (thousands) Facility Borrowers €725,000 Revolving Credit Facility BParent and Lottomatica Holding S.r.l. On July 31, 2017, the Company voluntarily reduced the Revolving Credit Facility A commitment from $1.8 billion to $1.2 billion and the Revolving Credit Facility B commitment from €1.05 billion to €725 million. Interest on the Revolving Credit Facilities is payable between one and six months in arrears at rates equal to the applicable LIBOR or EURIBOR plus a margin based on the Parent's long-term ratings by Moody's and S&P. At December 31, 2017 and 2016, the effective interest rate on the Revolving Credit Facilities was 3.48% and 2.42%, respectively. The RCF Senior Facilities Agreement provides that the following fees (which are recorded as interest expense) are payable quarterly in arrears: • Commitment fees - payable on the aggregate undrawn and un-cancelled amount of the Revolving Credit Facilities depending on the Parent's long-term ratings by Moody's and S&P. The applicable rate was 0.725% at December 31, 2017. Utilization fees - payable on the aggregate drawn amount of the Revolving Credit Facilities at a rate depending on the percentage of the Revolving Credit Facilities utilized. The applicable rate was 0.15% at December 31, 2017. • The Revolving Credit Facilities are guaranteed by the Parent and certain of its subsidiaries and are secured by ownership interests of the Parent in certain of its direct subsidiaries and certain intercompany loans with principal balances in excess of $10 million. Upon the occurrence of certain events, the borrowers may be required to repay the Revolving Credit Facilities and the lenders may have the right to cancel their commitments. At December 31, 2017 and 2016, the Company's available liquidity under the Revolving Credit Facilities was $1.974 billion and $2.367 billion, respectively. The RCF Senior Facilities Agreement contains customary covenants (including maintaining a minimum ratio of EBITDA to net interest costs and a maximum ratio of total net debt to EBITDA) and events of default. At December 31, 2017, the borrowers were in compliance with all covenants. Other Credit Facilities The Parent and certain of its subsidiaries may borrow under senior unsecured uncommitted demand credit facilities made available by several financial institutions. At December 31, 2017 and 2016, there were no borrowings under these facilities. Annual Reports and Accounts 2017 Page 1 124 $1,200,000Revolving Credit Facility AParent, IGT and IGT Global Solutions Corporation

14. Income Taxes On December 22, 2017, the President of the United States signed into law the Tax Act which has resulted in significant changes to the U.S. corporate income tax system. The Tax Act includes a federal statutory rate reduction from 35% to 21%, the elimination or reduction of certain domestic deductions and credits and further limitations on the deductibility of interest expense and executive compensation, and imposition of a territorial tax system with a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries (Transition Toll Tax) effective in 2017. The Tax Act also includes new tax provisions that potentially impact certain foreign income, expenses and credits, such as the global intangible low-taxed income (GILTI), the base-erosion and anti-abuse tax (BEAT), and the foreign derived intangible income (FDII). These provisions are effective beginning in 2018. ASC 740 requires companies to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff issued SAB 118 which allows a company to record provisional amounts when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change as a result of the Tax Act. The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year from the enactment date. The Company has recognized the provisional tax impacts related to its Transition Toll Tax and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. Transition Toll Tax The 2017 Tax Act eliminates the deferral of U.S. income tax on historical unrepatriated earnings by imposing the Transition Toll Tax, which is a mandatory deemed repatriation tax on undistributed foreign earnings. The Transition Toll Tax is assessed on the U.S. shareholder's share of the foreign corporation's accumulated foreign earnings that have not been previously taxed by the U.S. Earnings in the form of deemed cash and cash equivalents will be taxed at a rate of 15.5% and all other earnings will be taxed at a rate of 8.0%. As of December 31, 2017, the Company has accrued liabilities of $60.5 million under the Transition Toll Tax, of which $4.8 million is expected to be paid within one year. The Transition Toll Tax will be paid over an eight-year period starting in 2018, and will not accrue interest. Remeasurement of Deferred Tax Assets and Liabilities The Company's deferred tax assets and liabilities are measured at the enacted tax rate expected to apply when these temporary differences are expected to be realized or settled. As the Company's deferred tax liabilities exceed the balance of the deferred tax assets at the date of enactment, the Company has recorded an income tax benefit of $174.7 million, reflecting the decrease in the U.S. corporate income tax rate. Status of the Company's Assessment The Company's preliminary estimate of the Transition Toll Tax, the remeasurement of the deferred tax assets and liabilities and GILTI is subject to the finalization of management's analysis of certain matters and changes to certain estimates and amounts related to the earnings and profits of certain subsidiaries and the filing of the Company's tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in the Company's estimates. The final determination of the Transition Toll Tax and the remeasurement of the Company's deferred tax assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the Tax Act. For the GILTI provisions of the Tax Act, a provisional estimate could not be made as the Company has not yet completed its assessment or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. Annual Reports and Accounts 2017 Page 1 126

The components of (loss) income before the provision for income taxes, determined by tax jurisdiction, are as follows: For the year ended December 31, ($ thousands) 2017 2016 2015 United States (1,173,601) (355,451) (379,425) All other 125,420 13,374 93,753 The (benefit from) provision for income taxes consists of: For the year ended December 31, ($ thousands) 2017 2016 2015 Italy 131,155 192,712 168,915 United Kingdom (5,097) 733 711 266,851 212,855 188,137 Italy (5,837) 865 1,660 United Kingdom (16,242) 4,366 19,232 (296,265) (153,649) (149,241) Income taxes paid (net of refunds) were $296.4 million, $183.3 million and $199.2 million in 2017, 2016 and 2015, respectively. The Parent is tax resident in the United Kingdom. A reconciliation of the provision for income taxes, with the amount computed by applying the weighted average rate of the United Kingdom statutory main corporation tax rates enacted in each of the Parent's calendar year reporting periods (19.25% in 2017, 20.00% in 2016 and 20.25% in 2015) to (loss) income before the provision for income taxes is as follows: Annual Reports and Accounts 2017 Page 1 127 (29,414)59,20638,896 All other(125,957)(57,905)(13,627) United States(175,539)(109,139)(121,032) Deferred: All other54,82336,41448,753 United States80,140(16,982)(24,434) Current: (976,925)323,413(17,031) United Kingdom(408,595)87,269(150,475) Italy479,851578,221419,116

For the year ended December 31, ($ thousands) 2017 2016 2015 United Kingdom statutory tax rate 19.25% 20.00% 20.25 % Foreign tax and statutory rate differential (71,050) (17,013) (48,407) Research and development tax credit (5,052) (4,980) (4,393) Non-controlling interest (2,205) (3,605) 8,565 Nondeductible expenses 1,204 2,659 30,244 Foreign withholding and state taxes on unremitted earnings 9,290 Change in unrecognized tax benefits 20,624 (10,914) (15,593) Change in valuation allowances 58,672 3,610 7,495 Nondeductible goodwill impairment 137,445 Non-taxable gains on investments (5,880) Other (5,835) (5,069) 12,550 The Company's effective income tax rate was 3.0% in 2017 as compared to 18.3% in 2016. The principal drivers of the change were capital gains taxes incurred on the June 2017 sale of DoubleDown, a net increase in valuation allowances in U.K. and foreign jurisdictions, and impairment loss incurred with no associated tax benefit, partially offset by a favorable net tax benefit recorded related to the provisions of the Tax Act. The Company's effective income tax rate was 18.3% in 2016, as compared to (228.4)% in 2015 . The principal drivers of the change were one time non-deductible costs associated with the IGT acquisition in 2015, the non-recurring costs associated with the migration of the Parent company from Italy to the United Kingdom in 2015 and a reduction in operating losses in 2016 without tax benefits in certain foreign jurisdictions. The significant components reflected within the tax rate reconciliation labeled "Foreign tax and statutory rate differential" includes the effects of foreign subsidiaries' earnings taxed at rates other than the U.K. statutory rate. On December 18, 2015, the Consolidated Appropriations Act 2016 was signed into law in the United States. Some of the provisions were retroactive to January 1, 2015, including the permanent extension of the U.S. Annual Reports and Accounts 2017 Page 1 128 Effective tax rate3.0%18.3%(228.4)% (29,414)59,20638,896 Italian reorganization tax13,405 Italian tax litigation settlement15,256 Capital gain taxes on sale of DoubleDown94,303 IRAP and other state taxes 33,48436,75429,697 Foreign tax expense, net of federal benefit14,5003,4579,003 Tax cost of tax dividends3,0414,61912,888 Provision to return adjustments(1,334)(6,705)(1,434) Tax impact of tax law and rate changes excluding the Tax Act(2,463)(8,422)(4,746) Italian allowance for corporate equity(11,761)(9,243)(6,929) Tax Impact of 2017 Tax Act(114,219) Statutory tax (benefit) expense(188,058)64,682(3,449) (Loss) income before provision for income taxes(976,925)323,413(17,031)

research and development tax credit. The effective tax rate reflects the Company's estimated 2016 and 2015 U.S. research and development tax credit. The U.K. 2015 Finance Bill received Royal Assent in the fourth quarter of 2015, which resulted in the enactment of the U.K. corporate tax rate change from 20% in 2015 to 19% in 2017, then 18% in 2020. As a result, the Company recorded $1.4 million of income taxes in the fourth quarter of 2015 to write down the U.K. net deferred tax asset. In December 2015, the Italian Government approved the reduction of the Italian federal tax rate from the current rate of 27.5% to 24% in 2017. As a result, the Company recorded an $11.8 million tax benefit in the fourth quarter of 2015 to write down Italy's net deferred tax liability. The Company early adopted ASU 2016-09 in the fourth quarter of 2016. The primary impact of adoption required the Company to recognize all excess tax benefits and tax deficiencies in the income statement prospectively beginning in the first quarter of 2016. This could result in fluctuations in the effective tax rate period over period depending on how many awards vest during the year as well as the volatility of the stock price. At January 1, 2016, the Company had $3.3 million of excess tax deductions related to stock-based compensation that were tracked off balance sheet. The tax effect of these deductions was $1.2 million. The Company recorded a cumulative effect adjustment to retained earnings of $1.2 million to recognize these excess tax benefits on the balance sheet. The components of deferred tax assets and liabilities are as follows: December 31, ($ thousands) 2017 2016 Net operating losses 241,702 266,547 Depreciation and amortization 72,101 118,122 Inventory reserves 9,913 15,974 Stock-based compensation 2,402 7,468 Other 4,155 15,897 Valuation allowance (184,554) (151,653) Acquired intangible assets 635,471 1,115,345 Other 10,518 35,381 Annual Reports and Accounts 2017 Page 1 129 Net deferred income tax liability (449,914)(730,548) Total deferred tax liabilities784,7531,294,841 Depreciation and amortization138,764144,115 Deferred tax liabilities: Net deferred tax assets334,839564,293 Gross deferred tax assets519,393715,946 Credit carryforwards38,618 Deferred revenue5,3179,129 Jackpot timing differences51,43883,989 Provisions not currently deductible for tax purposes132,365160,202 Deferred tax assets:

The Company's net deferred income taxes are recorded in the consolidated balance sheets as follows: December 31, ($ thousands) 2017 2016 Deferred income taxes - non-current liability (491,460) (761,924) Net Operating Loss Carryforwards The Company has gross tax loss carryforwards in a number of tax jurisdictions of $1.061 billion of which $422.7 million relates to the U.K., $186.4 million relates to U.S. Federal, and $451.9 million relates to foreign tax jurisdictions that begin to expire in 2030, while others have an unlimited carryforward period. A valuation allowance has been provided on $819.7 million of the gross net operating loss carryfowards. Portions of these tax loss carryforwards are subject to annual limitations, including Section 382 of the U.S. Internal Revenue Code of 1986, as amended, for U.S. tax purposes and similar provisions under other countries laws. In addition, as of December 31, 2017 the Company had state tax net operating loss carryforwards, resulting in a deferred tax asset (net of federal tax benefit) of approximately $16.4 million. State tax net operating loss carryfowards generally expire in the years 2018 through 2037. Valuation Allowance A reconciliation of the beginning and ending amount of the valuation allowance is as follows: December 31, ($ thousands) 2017 2016 2015 Expiration of tax attributes (25,771) Balance at end of year 184,554 151,653 139,663 The valuation allowance pertains to certain U.K. and foreign net operating losses that are not expected to be realized. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of tax planning strategies. When the Company changes its determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to the provision for income taxes in the period in which such determination is made. In December 2017, the Company recorded a valuation allowance on its U.K. net operating losses. The net operating losses were primarily due to significant foreign exchange losses relating to its euro denominated debt that is recorded on a U.S. dollar functional currency U.K. company. In the future, this valuation allowance could be adjusted downward if the euro weakens against the U.S. dollar, and the Company still has euro denominated debt and the resulting income is taxable in the U.K. For the years ended December 31, 2017 and December 31, 2016, the Company recorded a net valuation increase of $32.9 million and $11.9 million, respectively. Unremitted Earnings The Company previously considered the earnings in its non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. The Tax Act eliminated the deferral of U.S. income Annual Reports and Accounts 2017 Page 1 130 Net charges to expense58,67211,99062,032 Balance at beginning of year151,653139,66377,631 (449,914)(730,548) Deferred income taxes - non-current asset41,54631,376

tax on these foreign earnings by imposing a mandatory one-time deemed repatriation transition tax. As a result, the Company now intends to repatriate substantially all of its accumulated foreign earnings (not including the earnings of its Italian sub-group of entities). The Company continues to have significant cash needs outside the United States and, accordingly, the extent and timing of repatriation of these earnings continues to be monitored. Tax reform, however, has given the Company more flexibility to manage and deploy cash globally. The Company has recorded $9.3 million of non-U.S. withholding taxes and U.S. state taxes as part of the provisional repatriation tax amount, which will be incurred as a result of certain future cash distributions. Additional tax effects, if any, related to the ultimate repatriation of these earnings will be recorded in the period that the tax effects become determinable and a reasonable estimate can be made. The Company continues to indefinitely reinvest the earnings of its subsidiary investments held by its Italian parent sub-holding company and, therefore, no deferred income taxes have been provided on these earnings. If the Company were to change its position with respect to the indefinite reinvestment of earnings on its Italian parent sub-holding company , the estimated deferred tax effects would be $10.2 million as of December 31, 2017. Accounting for Uncertainty in Income Taxes A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: For the year ended December 31, ($ thousands) 2017 2016 2015 Current year acquisition 49,934 Additions to tax positions - prior years 7,503 1,718 Reductions to tax positions - prior years (41) (12,755) (7,733) Lapses in statutes of limitations (413) (3,014) (15,276) At December 31, 2017, 2016 and 2015, $16.6 million, $10.8 million and $30.1 million, respectively, of the unrecognized tax benefits, if recognized, would affect the Company's effective tax rates. The Company recognizes interest expense and penalties related to income tax matters in the provision for income taxes. For 2017, 2016 and 2015, the Company recognized $12.1 million, $(0.1) million and $(10.0) million, respectively, in interest expense, penalties , and inflationary adjustments. At December 31, 2017, 2016 and 2015, the gross balance of accrued interest and penalties was $15.7 million, $3.6 million and $3.7 million, respectively. Unrecognized tax benefits increased during 2017 as a result of the Mexico Tax Audit. Unrecognized tax benefits decreased during 2016 as a result of the settlement with the U.S. Internal Revenue Service (IRS). For 2016, the additions to unrecognized tax benefits related to the current year are primarily attributable to U.S. tax issues. The Company files income tax returns in various jurisdictions of which the United Kingdom, United States and Italy represent the major tax jurisdictions. The Company is currently under audit with the IRS for calendar year 2014 and 2015. All years prior to calendar year 2014 are closed with the IRS. As of December 31, Annual Reports and Accounts 2017 Page 1 131 Balance at end of year 20,97514,34037,370 Settlements(8,750)(5,313) Reductions to tax positions - current year(893)(652) Additions to tax positions - current year4794239,462 Balance at beginning of year14,34037,3706,296

2017, the Company is subject to income tax audits in various tax jurisdictions globally, most significantly in Mexico and Italy. Mexico Tax Audit In November 2012, GTECH Mexico S.A. concluded a tax audit related to tax year 2006. This conclusion resulted in a tax assessment of approximately 424 million Mexican Pesos, including interest, inflationary adjustments and penalties. As of December 31, 2017, this assessment has increased as a result of additional interest, inflation, and penalty accruals to 520 million Mexican Pesos. While the Mexico assessment covers several issues, there were two main issues. One issue is associated with deductibility of cost of goods sold (approximately 65% of the updated total assessment) while the remaining assessment relates primarily to loan proceeds being treated as taxable income. GTECH Mexico S.A. filed appeals of the different components of the assessment and on the issue of the deductibility of cost of goods sold, the Supreme Court ruled against the company in 2017. This loss resulted in the company recording a tax charge in the amount of 341 million Mexican Pesos ($19.1 million when the reserve was recorded and $17.4 million at the December 31, 2017 exchange rate) in 2017. The other tax issues are still being addressed in the courts in Mexico. Italy Tax Audits In September 2017, the Italian Tax Agency started a tax audit focusing on the reorganization of the Italian business and the merger of the former GTECH with and into the Parent effective from April 7, 2015. The tax audit relates to 2014 and 2015 tax years. While the audit for 2015 is open, on December 21, 2017, the Italian Tax Agency served the Parent, as the successor of GTECH, a preliminary report (Tax Audit Report) for the fiscal year 2014. The main findings relate to the deductibility of certain transaction costs and related withholding taxes on fees paid for an aggregate proposed assessment of €3.2 million ($3.8 million at the December 31, 2017 exchange rate). Following the Tax Audit Report, the Parent submitted to the Italian Tax Agency a defense memorandum clarifying its position on these claims. While a tax reserve was booked for an amount of €0.3 million ($0.4 million at the December 31, 2017 exchange rate) in connection with the proposed assessment, the Company believes that it will prevail on this issue. In June 2015 a tax audit in Italy was initiated, which is also focused on the leveraged buyout transaction of GTECH Holdings Corporation in 2006 and subsequent acquisition debt refinancing. In July 2015, the Italian Tax Police issued a tax audit report (First Report) covering the years 2006-2010, alleging that GTECH did not recharge to GTECH Holdings Corporation all interest expense and other costs incurred in connection with the 2006 transaction and subsequent refinancing. Based on this tax report, in December 2015 the Italian Tax Agency issued a number of tax assessment notices to the Company covering the years 2006-2010 and alleging that additional taxes, penalties and interest for these years totaling €200.0 million are due. Under Italian Law, the Company had 60 days in which to appeal the tax assessment notice. On February 26, 2016, the Company submitted a Voluntary Settlement Request, which entitled the Company to an automatic 90 day extension. In the meantime, on April 12, 2016, the Parent received a Tax Audit report (Second Report) from the Italian Tax Police covering years 2011-2014. Based upon this report, the additional taxes, penalties and interest associated with the transfer pricing challenge was estimated to be approximately €275 million for those years. During the mentioned extension period the Tax Agency re-examined the preliminary conclusions of the Tax Police in both First and Second Report and offered a tax settlement of an aggregate amount of €13.5 million ($15.3 million). The settlement procedure concluded on June 20, 2016 with the relevant tax payments made by the Parent. The above-mentioned settlement was booked as a reserve in the Company's 2016 Financial Statements. Annual Reports and Accounts 2017 Page 1 132

Finally, the two additional claims contained in the Second Report regarding (i) the alleged improper deduction of €140.0 million in Value Added Tax and (ii) under-reported taxable income pursuant to Italy's controlled foreign corporation regime with specific reference to the Company's fully controlled subsidiary incorporated in Cyprus, were abandoned by the Italian Tax Agency. Consequently, all of the tax assessments, penalty and interest claims emanating from the aforementioned tax audits have been resolved. Based upon the timing and outcome of examinations of the Parent, or the result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the consolidated balance sheets. The Company does not anticipate that these audits will be finalized within the next twelve months. While the Company does not expect the amount of the unrecognized tax benefits to change in the next twelve months, the Company does not expect any change to have a significant impact on the consolidated balance sheet or statement of operations when these audits are finalized. Annual Reports and Accounts 2017 Page 1 133

15. Employee Benefit Plans Defined Contribution Plan The Company maintains a salary deferral 401(k) plan that allows eligible employees to contribute a portion of their base pay up to the IRS prescribed limit. The Company matches a portion of the employee's contribution. Employee and Company matching contributions vest immediately. The Company recognized expense related to the matching contribution of $13.8 million, $13.8 million and $10.8 million in 2017, 2016 and 2015, respectively. Defined Benefit Plan The Company has a defined benefit plan to provide certain post-employment benefits to Italian employees following termination from the Company. These employees may choose to participate in an unfunded plan within the Company or transfer their plan balance to independent external funds. These benefits are funded only to the extent paid to external funds. The cost of providing benefits under the plan, for those employees that participate in the unfunded plan within the Company, is determined using the projected unit credit actuarial valuation method. The cost of providing benefits for those employees that choose to transfer their plan to independent external funds are considered as defined contributions and are accrued as the employees render the related service. Net benefit expense was $8.1 million, $8.8 million and $6.8 million in 2017, 2016 and 2015, respectively. The present value of the defined benefit obligation was $12.3 million, $11.3 million and $11.2 million at December 31, 2017, 2016 and 2015, respectively. Employee Benefit Expense ($ thousands) 2017 2016 2015 Wages and salaries 875,005 856,500 787,899 Incentive compensation 87,008 101,625 102,460 Post-employment benefits 21,825 22,515 17,568 Annual Reports and Accounts 2017 Page 1 134 Employee benefit expense 1,161,5161,175,3861,102,784 Share-based payment4,70426,34621,200 Social Security and other benefits172,974168,400173,657 For the year ended December 31

16. Commitments and Contingencies Commitments Lease Commitments Rent and lease expense, net of sublease rent, was $81.9 million in 2017, $72.5 million in 2016, and $60.8 million in 2015. Rent and lease expense included no contingent rent payments. The minimum amounts due for non-cancellable leases at December 31, 2017 are as follows ($ thousands): Year Operating Capital Total 2019 61,258 7,643 68,901 2021 49,881 6,039 55,920 Thereafter 248,389 5,078 253,467 Less amount representing interest (10,252) Facility capital lease The Company has a finance lease for a facility in Providence, Rhode Island. The Company has the right to terminate the lease after June 30, 2023 if its facilities management contract with the State of Rhode Island is not renewed, in exchange for a termination fee equal to six months of base rent plus operating expenses. The lease includes two 10-year extension options. The Company has the unilateral right to extend the lease under the two extension options under the same terms as in the initial term. The Company may not assign the lease or sublease its portion of the building without the lessor's approval, which is not to be unreasonably withheld. The lease has been accounted for under build-to-suit guidance, under which the Company carries the entire cost of the facility on its books. The facility will remain on the books for the lease term and is depreciated over its useful life of 40 years. Sale and Leaseback Transactions On March 29, 2017, the Company entered into a sale-leaseback transaction for its main manufacturing and production facility located in Reno, Nevada. The transaction included a 15.5 year initial lease term, with four 5-year additional renewal periods exercisable at the Company's option, 3% annual rent increases, and payment and performance guarantees. A gain of $6.7 million on the sale of the facility was deferred and is being recognized on a straight-line basis over the initial term of the lease. Rent expense is recorded on a straight-line basis. The Company's straight-line rent calculation does not include an assumption of lease renewal periods. The Company recorded the difference between the amount charged to expense and the rent paid as deferred rent in the consolidated balance sheets. Rent expense was $10.1 million for the year ended December 31, 2017. On December 30, 2015, the Company sold its Las Vegas, Nevada campus and entered into a sale-leaseback agreement with the buyer for a portion of the facility for a term of 15 years with optional renewals. Annual Reports and Accounts 2017 Page 1 135 Capitalized lease obligation 27,699 Total minimum payments540,57437,951578,525 202248,4854,34852,833 202055,7826,84462,626 201876,7797,99984,778

The Company sold its technology center facility in West Greenwich, Rhode Island in December 2006 and entered into a sale-leaseback agreement for a portion of the facility with the buyer that was initially due to expire in November 2019 with renewal options. In August 2017 the Company renewed the lease agreement extending the lease term to November 2027 with an optional renewal. The facilities in Reno, Las Vegas and West Greenwich are accounted for as operating leases, and future minimum lease payments are included in the operating lease section in the table above. Communication equipment capital leases The Company has finance leases for certain communication equipment that expire between 2019 and 2022. The leases have options to extend and options to purchase the equipment, and do not contain escalation clauses. There are no restrictions placed upon the Company by entering into these leases. Point of sale capital leases The Company's finance leases for certain point of sale equipment expired in 2017. Jackpot Commitments Jackpot liabilities are recorded as current and non-current liabilities as follows: December 31, 2017 ($ thousands) Non-current liabilities 191,376 Future jackpot payments are due as follows ($ thousands): Previous Winners Year Future Winners Total 2019 32,127 8,674 40,801 2021 24,190 526 24,716 Thereafter 115,615 7,886 123,501 Unamortized discounts (48,519) Other Commitments Yeonama Holdings Co. Limited In 2013, the Company invested €19.8 million in Yeonama Holdings Co. Limited (Yeonama), a shareholder in Emma Delta Limited, the fund that holds a 33% interest in OPAP S.A., the Greek gaming and football betting operator. At December 31, 2017, the Company had a commitment to invest up to an additional €10.2 million ($12.2 million at the December 31, 2017 exchange rate) in Yeonama, representing a total potential €30.0 million ($35.9 million at the December 31, 2017 exchange rate) investment. Annual Reports and Accounts 2017 Page 1 136 Total jackpot liabilities275,626 Future jackpot payments due262,54761,598324,145 202221,41752621,943 202028,55452629,080 201840,64443,46084,104 275,626 Current liabilities84,250

CLS-GTECH Company Limited The Company has a 50% interest in CLS-GTECH Company Limited (CLS), a joint venture that was formed to provide a nationwide KENO system for Welfare lotteries throughout China. At December 31, 2017, the Company has a capital commitment to CLS of $3.8 million in the form of a non-interest bearing promissory note to be repaid at the discretion of the CLS board of directors, which is included in other current liabilities in the consolidated balance sheets. Contingencies Performance and other bonds In connection with certain contracts and procurements, the Company has delivered performance bonds for the benefit of customers and bid and litigation bonds for the benefit of potential customers. These bonds give the beneficiary the right to obtain payment and/or performance from the issuer of the bond if certain specified events occur. In the case of performance bonds, which generally have a term of one year, such events include the Company's failure to perform its obligations under the applicable contract. The following table provides information related to potential commitments for bonds outstanding at December 31, 2017: ($ thousands) Total bonds Wide Area Progressive bonds 266,218 All other bonds 24,827 Guarantees and Indemnifications Incentive Payments and Shortfall Payments under Minimum Profit Contracts The Company has two contracts (each of which is an LMA) where it has provided customers with minimum profit level guarantees (the Indiana contract and the New Jersey contract). Under these contracts, subject to certain caps, the Company may earn incentive compensation if it exceeds minimum profit level guarantees and may be required to make shortfall payments should it fail to achieve them. In relation to the Indiana contract, the Company guaranteed a minimum profit level to the State of Indiana commencing with the contract year ending June 30, 2014. The Company recorded a reduction of service revenue of $8.0 million in 2015 in connection with the Company's performance during the fiscal year ended June 30, 2015 related to this guarantee. In 2015, the Company and the State of Indiana renegotiated the Indiana contract which resulted in revised guarantee levels, and in consideration, the Company paid the State of Indiana $18.3 million which the Company capitalized to other non-current assets in its consolidated balance sheet and which the Company is amortizing to service revenue over the remaining contract term. The Company did not earn incentive compensation or make shortfall payments related to the guarantee in 2017 or 2016. In relation to the New Jersey contract, the Company guaranteed a minimum profit level to the State of New Jersey commencing with the contract year ending June 30, 2014. In 2015, the Company and the State of New Jersey renegotiated the New Jersey contract which resulted in revised guarantee levels, and in consideration, the Company paid the State of New Jersey $15.4 million which the Company capitalized to other non-current assets in its consolidated balance sheet and which the Company is amortizing to service revenue over the remaining contract term. The Company earned incentive compensation of $29.0 million Annual Reports and Accounts 2017 Page 1 137 746,659 Bid and litigation bonds8,600 Performance bonds447,014

and $30.6 million in 2017 and 2016, respectively based on its performance for the fiscal years ended June 30, 2017 and June 30, 2016, respectively, which was recorded as service revenue in the consolidated statements of operations. Loxley GTECH Technology Co., LTD Guarantee The Company has a 49% interest in Loxley GTECH Technology Co., LTD (LGT). LGT is a joint venture that was formed to provide an online lottery system in Thailand. The Company has guaranteed, along with the 51% shareholder in LGT, performance bonds provided on behalf of LGT by an unrelated commercial lender. The performance bonds relate to LGT's performance under the July 2005 contract between the Government Lottery Office of Thailand and LGT should such contract become operational. The Company is jointly and severally liable with the other shareholder in LGT for this guarantee. There is no scheduled termination date for the Company's guarantee obligation. At December 31, 2017, the maximum liability under the guarantee was Baht 375 million ($11.5 million), and the Company does not have any obligation related to this guarantee because the July 2005 contract to provide the online lottery system is not in operation due to continuing political instability in Thailand. Zest Gaming Contingent Consideration On July 25, 2017, the Company acquired the video bingo subsidiaries and related operating assets of Zest Gaming S.r.l., a leading supplier of multi-card video bingo solutions headquartered in Italy. The acquisition consideration included a fair value estimate of contingent consideration related to existing operations for the twelve month period ending June 30, 2018. At December 31, 2017, contingent consideration was €6.5 million ($7.8 million), and is capped at €17.2 million ($20.6 million at the December 31, 2017 exchange rate) for existing operations. Legal Proceedings From time to time, the Parent and/or one or more of its subsidiaries are party to legal, regulatory, or administrative proceedings regarding, among other matters, claims by and against the Company, injunctions by third parties arising out of the ordinary course of business, and investigations and compliance inquiries related to the Company's ongoing operations. Legal proceedings can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are often difficult to predict and the Company's view of these matters may change as the related proceedings and events unfold. The Company expenses legal fees as incurred and records a provision for contingent losses when it is both probable that a liability will be incurred and the amount or range of the loss can be reasonably estimated. At December 31, 2017, provisions for litigation matters amounted to $4.7 million. With respect to litigation and other legal proceedings where the Company has determined that a loss is reasonably possible but the Company is unable to estimate the amount or range of reasonably possible loss, in excess of amounts already accrued, no additional amounts have been accrued (given the uncertainties of litigation and the inherent difficulty of predicting the outcome of legal proceedings). If material, an unfavorable outcome to any legal matter could have an adverse effect on the Company's operations, financial position, liquidity, or results of operations. Brazil ICMS Tax Since 1997, GTECH Brazil paid ISS service taxes on its revenues derived from its lottery contract with Caixa Eonomica Federal. On July 26, 2005, the State of Siio Paulo challenged this tax classification, claiming the higher ICMS tax (Brazilian VAT) should have been applied on the value of printing ribbons, rolls of paper, and wagering slips (Consumables) distributed to lottery outlets. On February 27, 2017, the Brazilian court ruled that rolls of paper and wagering slips were not subject to ICMS, but printing ribbons were, although at a lower tax rate than the Siio Paulo tax authorities had applied. Both parties appealed the respective Annual Reports and Accounts 2017 Page 1 138

unfavorable aspects of the lower court's ruling to the Court of Appeals. On March 7, 2018, the Court of Appeals ruled in GTECH Brazil's favor with respect to its petition to also exclude the printer ribbons from the ICMS tax. The Court of Appeals also ruled against the petition of the tax authority to reverse the lower court's ruling to exclude rolls of paper and wagering slips from ICMS tax. If the tax authority elects to appeal the ruling to higher courts, the tax authority has 30 business days following publication of the decision by the Court of Appeals in the relevant website or journal to file such appeal. Should the tax authority decide to further appeal the matter, the proceedings are likely to take several years. The net claim after the current ruling, plus statutory interest and fees is approximately 18.5 million Brazilian Reals ($5.6 million at the December 31, 2017 exchange rate). Texas Fun 5's Instant Ticket Game Five lawsuits have been filed against IGT Global Solutions Corporation (f/k/a GTECH Corporation) in Texas state court arising out of the Fun 5's instant ticket game sold by the Texas Lottery Commission (TLC) from September 14, 2014 to October 21, 2014. Plaintiffs allege each ticket's instruction for Game 5 provided a 5x win (five times the prize box amount) any time the Money Bag symbol was revealed in the 5X BOX. However, TLC awarded a 5x win only when (1) the Money Bag symbol was revealed and (2) three symbols in a pattern were revealed. (a) Steele, James et al. v. GTECH Corp., filed on December 9, 2014, in Travis County (No. D1GN145114). Through intervenor actions, over 1,200 plaintiffs claim damages in excess of $500 million. GTECH Corporation's plea to the jurisdiction for dismissal based on sovereign immunity was denied. GTECH Corporation appealed. The appellate court ordered that plaintiffs' sole remaining claim should be reconsidered. Both sides may consider petitioning for Texas Supreme Court review. Nettles, Dawn v. GTECH Corp. et al., filed on January 7, 2015, in Dallas County (No. 051501559CV). Plaintiff claims damages in excess of $4 million. GTECH Corporation and the Texas Lottery Commission won pleas to the jurisdiction for dismissal based on sovereign immunity. Plaintiff appealed, lost the appeal, and is petitioning for Texas Supreme Court review. Guerra, Esmeralda v. GTECH Corp. et al., filed on June 10, 2016, in Hidalgo County (No. C277716B). Plaintiff claims damages in excess of $500,000. Wiggins, Mario & Kimberly v. IGT Global Solutions Corp., filed on September 15, 2016, in Travis County (No. D1GN16004344). Plaintiffs claim damages in excess of $1 million. Campos, Osvaldo Guadalupe et al. v. GTECH Corp., filed on October 20, 2016, in Travis County (No. D1GN16005300). Plaintiffs claim damages in excess of $1 million. (b) (c) (d) (e) The Company disputes the claims made in each of these cases and continues to defend against these lawsuits. Illinois State Lottery On February 2, 2017, putative class representatives of retailers and lottery ticket purchasers alleged the Illinois Lottery collected millions of dollars from sales of instant ticket games and wrongfully ended certain games before all top prizes had been sold. Raqqa, Inc. et al. v. Northstar Lottery Group, LLC., was filed in Illinois state court, St. Clair County (No. 17L51) against Northstar Lottery Group LLC, a consortium in which the Parent indirectly holds an 80% controlling interest. The claims include tortious interference with contract, violations of Illinois Consumer Fraud and Deceptive Practices Act, and unjust enrichment. The lawsuit was removed to the U.S. District Court for the Southern District of Illinois. On March 15, 2017, a second lawsuit, Atteberry, Dennis et al. v. Northstar Lottery Group, LLC, was filed in Illinois state court, Cook County (No. 2017CHO3755) seeking damages on the same matter. The Company disputes the claims made in both cases and continues to defend against these lawsuits. Annual Reports and Accounts 2017 Page 1 139

Mexican Inventory Tax The Mexican Tax Administration Service levied an assessment of income tax, VAT, profit sharing, interest and penalties on GTECH Mexico, S.A. de C.V. (GTECH Mexico), for the 2006 fiscal year that, as at December 31, 2017, amounted to 520,806,390 Mexican Pesos ($26.5 million at the December 31, 2017 exchange rate). Approximately 65% of the assessment relates to denial of a deduction for inventory sold (cost of goods sold deduction) by GTECH Mexico to its parent; the remaining assessment relates primarily to intercompany loan proceeds (treated as taxable income) received from GTECH Mexico's parent. Although lower courts upheld the assessment, the Mexican Appellate Court ruled the loan proceeds non-taxable, but denied the Company's cost of goods sold deduction. The Mexican Supreme Court upheld the Appellate Court's ruling that the cost of goods sold deduction would not apply. GTECH Mexico filed a constitutional appeal on November 23, 2017. The Company maintains that the assessment is without merit. For a further discussion of the Mexican cost of goods sold deduction tax issue, refer to Note 14, Income Taxes. Annual Reports and Accounts 2017 Page 1 140

17. Redeemable Non-Controlling Interests In March 2016, the Parent, through its subsidiary Lottomatica S.p.A. (Lottomatica), Italian Gaming Holding a.s. (IGH), Arianna 2001 and Novomatic Italia (collectively the Members) entered into a consortium (Lottoitalia S.r.l. or Lottoitalia) to bid on the Lotto Concession. On May 16, 2016, Lottoitalia was awarded management of the Lotto Concession for a nine-year term. Under the terms of the consortium agreement, Lottomatica is the principal operating partner fulfilling the requirements of the Lotto Concession. In 2016 and 2017, the Members made capital contributions to Lottoitalia of €908.2 million on a pro rata basis based on each party s equity ownership interest. These contributions financed €770.0 million in upfront concession payments and upgrades to the technological infrastructure supporting the Lotto Concession. The upfront concession payments made in 2016 and 2017 were as follows: Year Paid € $ 2017 170.0 185.4 Ownership in Lottoitalia at December 31, 2017 and 2016 is as follows: Name of entity % Ownership Italian Gaming Holding a.s. 32.50% Novomatic Italia 2.00% The Company fully consolidates Lottoitalia as a variable interest entity due to the Company's risks and rewards of the investment and Lottoitalia's current need for funding to finance planned operations. All annual profits of Lottoitalia are distributed to the Members within five business days of the approval of its annual financial statements. In addition, quarterly for a period of nine years beginning in 2017, Lottoitalia makes equal distributions of cash to the Members in an aggregate amount equal to that additional paid in surplus but excluding any reserves deriving from profits or retained earnings generated in previous quarters (return of capital). Each distribution of annual profits and return of capital will be made pro rata to the Members' ownership interest in Lottoitalia. In connection with the formation of Lottoitalia, Lottomatica entered into an agreement with IGH in May 2016, which contains the following put/call options: • Underperformance put option - IGH has the right, at its discretion, to sell its interest in Lottoitalia to Lottomatica in the event that Lottoitalia underperforms relative to certain thresholds related to pro forma cash from operations generated in 2017. The put option is exercisable by IGH beginning on the date of approval of Lottoitalia's financial statements for the year ending December 31, 2017 and ending 60 days thereafter. Deadlock put/call option - IGH has the right, at its discretion, to sell its interest in Lottoitalia to Lottomatica and Lottomatica has a reciprocal call right, in the event of certain specified events as defined in the agreement. The put/call options expire 60 days following written notice by either party following the applicable event. The strike price of the options is determined based on a specified formula as defined in the agreement. • Annual Reports and Accounts 2017 Page 1 141 Arianna 20014.00% Lottomatica S.p.A.61.50% 770.0850.7 2016600.0665.3

18. Shareholders' Equity Shares Authorized and Outstanding The Board of Directors of the Parent (the Board) is authorized to issue shares of any class in the capital of the Parent. The authorized ordinary shares of the Parent consists of 1.850 billion ordinary shares with a $0.10 per share par value. Ordinary shares of common stock outstanding were as follows: December 31, 2017 2016 2015 Shares issued under restricted stock award plans 947,709 1,080,532 1,118,970 Shares issued upon acquisition of IGT 45,322,614 Balance at end of year 203,446,572 202,285,166 200,244,239 Shares Issued Upon Acquisition of IGT Upon the acquisition of IGT, IGT shareholders received accordance with the terms of the transaction. 45,322,614 common shares of the Parent in GTECH Rescission Shares GTECH shareholders who did not vote in favor of the merger of GTECH into the Parent were entitled to exercise a cash exit right equal to €19.174 per share. GTECH shareholders exercised the cash exit right on 19,796,852 GTECH shares, of which 62,607 were subsequently purchased by other GTECH shareholders, resulting in 19,734,245 net shares repurchased upon the merger. The Company paid $407.8 million to shareholders. Treasury Stock Purchases The Parent has the authority to purchase, subject to a maximum repurchase price, a maximum of 20% of the aggregate issued share capital of ordinary shares in the Parent as of April 7, 2015. This authority will expire on July 28, 2020. The Parent did not repurchase common shares in 2017, 2016 or 2015. Dividends The Company declared cash dividends per share during the periods presented as follows: 2016 2015 Per share amount ($) 2017 Second Quarter 0.20 0.20 Fourth Quarter 0.20 0.20 0.20 Annual Reports and Accounts 2017 Page 1 143 Total cash dividends declared0.800.800.40 Third Quarter0.200.200.20 First Quarter0.200.20 GTECH rescission shares(19,734,245) Shares issued upon exercise of stock options213,697960,395744,374 Balance at beginning of year202,285,166200,244,239172,792,526

Future dividends are subject to Board approval. The RCF Senior Facilities Agreement and Term Loan Facility Agreement limit the aggregate amount of dividends and repurchases of the Parent's ordinary shares in each year to $300 million based on the Company s current ratings by Moody s and S&P provided that the ratio of the sum of total net debt and the aggregate amount of dividends and repurchases to EBITDA does not exceed 90% of the applicable ratio of total net debt to EBITDA. Accumulated Other Comprehensive Income The following table details the changes in Accumulated Other Comprehensive Income (AOCI): Unrealized Gain (Loss) on: Less: OCI attributable to non-controlling interests Total AOCI attributable to IGT PLC Foreign Currency Translation Cash Flow Hedges Hedge of Net Investment Available for Sale Securities Defined Benefit Plans Share of OCI of Associate 158,131 971 (4,499) 5,019 (4,356) (748) 685 155,203 2014 Change during period 60,079 (594) (3,046) 395 304 57,138 Tax effect (14,024) 254 (64) (3,259) (166) (17,259) Balance at December 31, 2015 204,186 387 (4,563) (1,286) (4,127) (748) 989 194,838 Reclassified to operations 118 (5,218) (5,100) OCI (49,390) 2,518 (15) 13,495 (600) (203) (34,195) 154,796 2,905 (4,578) 12,209 (4,727) (748) 786 160,643 2016 Change during period 182,791 (6,610) (678) (120) 463 175,846 Tax effect 559 1,312 57 8 1,936 Balance at December 31, 2017 338,146 (649) (4,578) 11,588 (4,839) (748) 1,249 340,169 For the years ended December 31, 2017, 2016 and 2015, $1.7 million, $5.2 million, and $0.2 million, respectively, were reclassified from AOCI into service revenue in the consolidated statements of operations. Annual Reports and Accounts 2017 Page 1 144 OCI183,350(3,554)(621)(112)463179,526 Reclassified to operations1,7441,744 Balance at December 31, Tax effect373(615)(15)4,723824,548 Change during period(49,881)8,3518,772(682)(203)(33,643) OCI46,055(584)(64)(6,305)22930439,635 Reclassified to operations(244)(244) Balance at December 31,

19. Non-Controlling Interests Non-controlling interests share of equity in the accompanying consolidated balance sheets was $349.9 million and $357.0 million at December 31, 2017 and 2016, respectively. At December 31, 2017 the Company s material non-controlling interests were as follows: % Ownership held by the Company Name of subsidiary Northstar New Jersey Lottery Group, LLC 82.31% LN holds the Scratch & Win concession license in Italy. In December 2017, the Italian regulator exercised a nine-year contract extension option for the Scratch & Win concession, extending the concession through September 2028. LN is required to pay an upfront license fee of €800 million related to the extension, of which €50 million ($59.3 million) was paid in December 2017, and the remaining €750 million ($899.5 million at the December 31, 2017 exchange rate) is expected to be paid in 2018. Northstar New Jersey Lottery Group, LLC (Northstar NJ), is a consolidated joint venture which is party to an agreement with the State of New Jersey, Department of the Treasury, Division of Purchase and Property and Division of Lottery (the Division of Lottery) where Northstar NJ manages a wide range of the Division of Lottery s marketing, sales, and related functions. Annual Reports and Accounts 2017 Page 1 145 Lotterie Nazionali S.r.l. (LN)64.00%

20. Segment Information The structure of the Company s internal organization is customer-facing aligned around four business segments operating in three regions as follows: • • • • North America Gaming and Interactive North America Lottery International Italy The Company monitors the operating results of its operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating income. Segment accounting policies are consistent with those of the consolidated financial statements. Corporate support expenses, which are not allocated to the segments, are principally composed of selling, general and administrative expenses and other expenses that are managed at the corporate level, including restructuring, transaction, corporate headquarters and Board expenses. Purchase accounting principally represents the depreciation and amortization of acquired tangible and intangible assets in connection with acquired companies. Segment information is as follows ($ thousands): North America Gaming and Interactive North America Lottery Operating Segment Total For the year ended December 31, 2017 Corporate Support Purchase Accounting International Italy Total Product sales 377,065 92,174 332,015 1,149 802,403 802,403 Depreciation and amortization 81,355 129,517 66,745 161,484 439,101 11,554 351,785 802,440 Long-lived assets (at year end) 271,833 666,627 292,962 396,495 1,627,917 1,627,917 Annual Reports and Accounts 2017 Page 1 146 Total assets (at year end)3,683,2582,460,6763,038,8064,900,13014,082,8701,076,33815,159,208 Expenditures for long-lived assets(147,175)(204,104)(77,815)(188,013)(617,107)(3,964)(621,071) Operating income (loss)278,963289,025163,799478,5401,210,327(197,089)(1,064,330)(51,092) Total revenue 1,157,6981,185,222889,0641,705,0504,937,0341,2037224,938,959 Service revenue 780,6331,093,048557,0491,703,9014,134,6311,2037224,136,556

North America Gaming and Interactive North America Lottery Operating Segment Total For the year ended December 31, 2016 Corporate Support Purchase Accounting International Italy Total Product sales 398,248 65,269 314,637 1,295 779,449 (1,139) 778,310 Depreciation and amortization 86,380 143,941 50,879 150,736 431,936 12,481 438,052 882,469 Long-lived assets (at year end) 394,233 603,927 284,276 275,079 1,557,515 1,557,515 North America North Operating Segment Total For the year ended December 31, 2015 Gaming and Interactive America Lottery Corporate Support Purchase Accounting International Italy Total Product sales 321,624 52,986 341,064 1,872 717,546 (6,183) 711,363 Depreciation and amortization 71,886 154,619 45,855 152,293 424,653 13,123 342,052 779,828 Long-lived assets (at year end) 403,482 616,760 236,043 220,910 1,477,195 1,477,195 In connection with the June 2017 sale of DoubleDown, the Company recorded a $783.8 million reduction in assets in the North America Gaming and Interactive segment, principally composed of goodwill and intangible assets. In the second quarter of 2017, the Company made changes to management reporting lines within functions that support its segments, principally field services, data center and research and development. These changes resulted in insignificant changes in how certain shared operating expenses were allocated to segments. The Company has reclassified prior period amounts to conform to the current year presentation. The resulting changes in operating income (loss) by segment for the years ended December 31, 2016 and 2015 were as follows ($ thousands): Annual Reports and Accounts 2017 Page 1 147 Total assets (at year end)6,077,6802,476,1122,950,8072,855,79714,360,396754,29615,114,692 Expenditures for long-lived assets(82,834)(107,854)(93,666)(22,422)(306,776)(11,618)(318,394) Operating income (loss)295,531181,813164,190555,2231,196,757(292,371)(364,430)539,956 Total revenue 1,101,7931,045,670853,0781,704,0564,704,597(15,541)4,689,056 Service revenue 780,169992,684512,0141,702,1843,987,051(9,358)3,977,693 Total assets (at year end)5,577,4912,396,5573,021,4483,724,85614,720,352339,81015,060,162 Expenditures for long-lived assets(132,297)(148,641)(97,957)(91,834)(470,729)(3,460)(474,189) Operating income (loss)349,275299,182142,200583,5041,374,161(245,600)(468,125)660,436 Total revenue 1,373,4541,193,575827,3051,761,1385,155,472(1,576)5,153,896 Service revenue 975,2061,128,306512,6681,759,8434,376,023(437)4,375,586

North America Gaming and Interactive North America Lottery For the year ended December 31, 2016 Segment Total Corporate Support Purchase Accounting International Italy Total presented 344,125 300,394 144,125 585,517 1,374,161 (245,600) (468,125) 660,436 As currently presented 349,275 299,182 142,200 583,504 1,374,161 (245,600) (468,125) 660,436 North America North For the year ended December 31, 2015 Gaming and Interactive America Lottery Segment Total Corporate Support Purchase Accounting International Italy Total presented 294,256 182,615 164,949 554,937 1,196,757 (292,371) (364,430) 539,956 As currently presented 295,531 181,813 164,190 555,223 1,196,757 (292,371) (364,430) 539,956 Geographical Information Revenue from external customers, which is based on the geographical location of the Company s customers, is as follows: December 31, ($ thousands) 2017 2016 2015 Italy 1,728,472 1,778,750 1,712,583 United Kingdom 74,567 82,271 93,839 Total 4,938,959 5,153,896 4,689,056 Revenue from exclusive and non-exclusive concessions awarded to the Company by ADM represented 31.9%, 31.7% and 33.6% of consolidated revenue in 2017, 2016 and 2015, respectively. Long-lived assets are composed of the following: • • Systems, equipment and other assets relating to contracts; and Property, plant and equipment. Long-lived assets based on the geographical location of the assets are as follows: December 31, ($ thousands) 2017 2016 Italy 366,990 254,052 All other 278,623 266,701 Annual Reports and Accounts 2017 Page 1 148 Total1,627,9171,557,515 United Kingdom43,37947,388 United States938,925989,374 All other839,814730,924747,006 Canada100,31589,938105,377 United States2,195,7912,472,0132,030,251 Change1,275(802)(759)286 As previously Change5,150(1,212)(1,925)(2,013) As previously

21. Stock-Based Compensation Incentive Awards Stock-based incentive awards are provided to directors and employees under the terms of the Company s 2015 Equity Incentive Plan (the Plan) as administered by the Board. Awards available under the Plan principally include stock options, performance share units, restricted share units or any combination thereof. The maximum number of shares that may be granted under the Plan is 11.5 million shares. To the extent any award is forfeited, expires, lapses, or is settled for cash, the award is available for reissue under the Plan. The Company utilizes authorized and unissued shares to satisfy all shares issued under the Plan. Stock Options Stock options are awards that allow the employee to purchase shares of the Company s stock at a fixed price. Stock options are granted under the Plan at an exercise price not less than the fair market value of a share on the date of grant. No stock options were granted in 2017 or 2016. In 2015, stock options were granted solely to the Company s Chief Executive Officer, which will vest in 2018 subject to certain performance and other criteria, and have a contractual term of approximately seven years. Stock Awards Stock awards are principally made in the form of performance share units (PSUs) and restricted share units (RSUs). PSUs are stock awards where the number of shares ultimately received by the employee depends on the Company s performance against specified targets. PSUs typically vest 50% over an approximate three-year period and 50% over an approximate four-year period. PSUs awarded in 2015 vest 50% over an approximate one-year period and 50% over an approximate two-year period. Dividend equivalents are not paid under the Plan. The fair value of each PSU is determined on the grant date, based on the Company s stock price, adjusted for the exclusion of dividend equivalents, and assumes that performance targets will be achieved. Over the performance period, the number of shares of stock that will be issued is adjusted based upon the probability of achievement of performance targets. The ultimate number of shares issued and the related compensation cost recognized as expense is based on a comparison of the final performance metrics to the specified targets. RSUs are stock awards granted to directors that entitle the holder to shares of common stock as the award vests, typically over a one-year period, and have a contractual term of 10 years. Dividend equivalents are not paid under the Plan. Annual Reports and Accounts 2017 Page 1 150

Stock Option Activity A summary of the Company s stock option activity and related information is as follows: Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value ($ thousands) Stock Options Exercise Price Per Share ($) Granted Exercised (1,112,423) 17.21 Outstanding at December 31, 2017 2,192,707 19.76 1.97 At December 31, 2017: Exercisable 1,942,707 20.30 0.49 12,066 The total intrinsic value of stock options exercised was $9.3 million, $7.8 million and $3.3 million in 2017, 2016 and 2015, respectively. The total cash proceeds from stock options exercised was $12.7 million and $10.7 million in 2016 and 2015, respectively. There were no cash proceeds from stock options exercised in 2017. Fair Value of Stock Options Granted The Company estimates the fair value of stock options at the date of grant using a valuation model that incorporates key inputs and assumptions as detailed in the table below. The weighted average grant date fair value of stock options granted during 2015 was $2.31 per share. 2015 Carlo Exercise price ($) 15.53 Expected volatility of the Company s stock (%) 35.00 Dividend yield (%) 5.15 The expected volatility assumes the historical volatility is indicative of future trends, which may not be the actual outcome. The expected option term is based on historical data and is not necessarily indicative of exercise patterns that may occur. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company. Annual Reports and Accounts 2017 Page 1 151 Risk-free interest rate (%)1.06 Expected option term (in years)2.38 Valuation modelMonte Vested and expected to vest2,192,70719.761.9714,811 Expired Forfeited(442,138)20.30 Outstanding at January 1, 20173,747,26819.06

Stock Award Activity A summary of the Company s stock award activity and related information is as follows: Weighted Average Grant Date Weighted Average Grant Date Fair Value ($) PSUs Fair Value ($) RSUs Granted 1,723,730 17.74 117,745 21.12 Forfeited (632,397) 16.55 Unrecognized cost for nonvested awards ($ thousands) 375 878 The total vest-date fair value of PSUs vested was $28.8 million, $8.4 million and $13.4 million in 2017, 2016 and 2015, respectively. The total vest-date fair value of RSUs vested was $2.8 million, $15.9 million and $8.4 million for 2017, 2016 and 2015 respectively. Fair Value of Stock Awards Granted The Company estimated the fair value of PSUs at the date of grant using a Monte Carlo simulation valuation model, as the award includes a market condition. During 2017, 2016 and 2015, the Company estimated the fair value of RSUs at the date of grant based on the Company s stock price adjusted for the exclusion of dividend equivalents. Details of the grants are as follows: 2017 2016 2015 Weighted average grant date fair value ($) 17.74 21.08 7.58 RSUs granted during the year 117,745 117,551 1,538,583 Annual Reports and Accounts 2017 Page 1 152 Weighted average grant date fair value ($)21.1219.1419.52 PSUs granted during the year1,723,7301,788,0502,204,963 Weighted average future recognition period (in years)0.290.39 At December 31, 2017: Nonvested at December 31, 2017 4,083,49916.35106,22321.00 Vested(1,329,031)10.65(129,073)19.41 Nonvested at January 1, 20174,321,19715.04117,55119.14

Modifications 2017 During the second quarter of 2017, the Company modified the measurement of a performance condition for the PSUs granted in 2016. The modification affected 974 employees but did not result in any incremental compensation cost. 2015 During the first quarter of 2015, the Company modified the expiration date of outstanding stock options granted in July 2009 from April 8, 2015 to June 30, 2015. The modification affected 58 employees but did not result in any incremental compensation cost. During the fourth quarter of 2015, the Company modified the performance conditions of outstanding stock options and PSUs granted in July 2013 and 2014, as the original vesting conditions were not expected to be satisfied. The modification affected 223 employees and resulted in $14.6 million of incremental compensation cost. Stock-Based Compensation Expense Total compensation cost for the Company s stock-based compensation plans is recorded based on the employees respective functions as detailed below. For the year ended December 31, ($ thousands) 2017 2016 2015 Cost of product sales (8) 330 675 Research and development 58 2,410 4,223 Transaction (income) expense, net 14,867 Income tax benefit 975 7,846 15,349 Compensation cost recorded in transaction (income) expense, net, relates to the acceleration of unvested RSUs upon termination of employment following the acquisition of IGT. Annual Reports and Accounts 2017 Page 1 153 Total stock-based compensation, net of tax 3,72918,50020,718 Stock-based compensation expense before income taxes4,70426,34636,067 4,70426,34621,200 Selling, general and administrative4,62822,30415,700 Cost of services261,302602

22. Other (Expense) Income, Net The components of other (expense) income, net are as follows: For the year ended December 31, ($ thousands) 2017 2016 2015 Unamortized debt premium 12,394 Fees (1,039) Revolving Credit Facilities due 2021 (7,307) Third-party fees and costs (2,380) .250% enior ecured Notes due 2022 3,827 (5,220) Tender premium (73,376) Fees (2,040) Fees (3,640) Total debt related (31,593) (5,220) (117,877) Gain on sale of available-for-sale investment 20,365 (33,393) 18,365 (122,295) As discussed in Note 13, Debt, the Company completed several debt transactions in 2017, including the purchase of a portion of the 7.500% Senior Secured Notes due 2019 that resulted in a $25.7 million loss on early extinguishment of debt. In 2016, the Company sold an available-for-sale investment in the Italy segment for approximately $23.9 million and recognized a gain on sale of $20.4 million. In 2015, in anticipation of the acquisition of IGT, the Company completed several debt transactions that resulted in $117.9 million of expense. Annual Reports and Accounts 2017 Page 1 154 Other(1,800)3,220(4,418) Bridge Facility (38,166) Unamortized debt issuance cost(34,526) Caaital ecurities(79,711) Unamortized debt issuance cost(4,295) Gain (loss) on interest rate swaps3,827(5,220) Term Loan Facility due 2023 (2,380) Unamortized debt issuance costs(7,307) 7.500% enior ecured Notes due 2019 (25,733) Swap705 Tender premium(37,793)

23. Earnings Per Share Basic (loss) earnings per share is computed on the basis of the weighted-average number of common stock outstanding during the period. Diluted (loss) earnings per share is computed on the basis of the basic weighted-average shares plus the effect of potentially dilutive securities outstanding during the period using the treasury stock method. Potentially dilutive securities include outstanding stock options and unvested PSUs and RSUs. The following table presents the computation of basic and diluted (loss) earnings per share: For the year ended December 31, ($ and shares in thousands, except per share amounts) 2017 2016 2015 Net (loss) income attributable to IGT PLC (1,068,576) 211,337 (75,574) Denominator: Incremental shares under stock based compensation plans 703 Diluted (loss) earnings per share attributable to IGT PLC (5.26) 1.05 (0.39) Certain stock options to purchase common shares were outstanding, but were excluded from the computation of diluted earnings per share, because the exercise price of the options was greater than the average market price of the common shares for the full year, and therefore, the effect would have been antidilutive. In addition, during years when the Company is in a net loss position, certain outstanding stock options and unvested restricted stock awards were excluded from the computation of diluted earnings per share because including them would have had an antidilutive effect due to the net loss position of the Company. For the years ended December 31, 2017 and 2015, 0.4 million and 2.6 million stock options and unvested restricted stock awards, respectively, were excluded from the computation of diluted earnings per share because including them would have had an antidilutive effect. Annual Reports and Accounts 2017 Page 1 155 Basic (loss) earnings per share attributable to IGT PLC(5.26)1.05(0.39) Weighted-average shares, diluted 203,130202,214192,398 Weighted-average shares, basic203,130201,511192,398 Numerator:

24. Related Party Transactions The Company engages in business transactions with certain related parties which include (i) entities and individuals capable of exercising control, joint control, or significant influence over the Company, (ii) De Agostini or entities directly or indirectly controlled by De Agostini and (iii) unconsolidated subsidiaries or joint ventures of the Company. Members of the Company s Board of Directors, executives with authority for planning, directing and controlling the activities of the Company and such Directors' and executives' close family members are also considered related parties. The Company may make investments in such entities, enter into transactions with such entities, or both. Investments in Related Parties From time to time, the Company makes strategic investments in publicly traded and privately held companies that develop software, hardware, and other technologies or provide services supporting its technologies. The Company may also purchase from or make sales to these organizations. Ringmaster S.r.l. The Company has a 50% interest in Ringmaster S.r.l., an Italian joint venture, which is accounted for using the equity method of accounting. Ringmaster S.r.l. provides software development services for the Company s interactive gaming business pursuant to an agreement dated December 7, 2011. The Company's investment in Ringmaster S.r.l. was $0.8 million and $0.6 million at December 31, 2017 and 2016, respectively. Yeonama Holdings Co. Limited and OPAP S.A. The Company has a 30% interest in Yeonama Holdings Co. Limited (Yeonama), which is accounted for at cost. Yeonama is a shareholder in Emma Delta Limited, the fund that holds a 33% interest in OPAP S.A. (OPAP), the Greek gaming and football betting operator. Marco Sala, Chief Executive Officer of the Company and Board member, is a member of the board of directors of OPAP. The Company's investment in Yeonama was $23.1 million and $20.3 million at December 31, 2017 and 2016, respectively. The Company provides sports betting and player account management systems to OPAP S.A. The Company is also a technology provider of VLT central systems to OPAP S.A. Connect Ventures One LP and Connect Ventures Two LP The Company has held investments in Connect Ventures One LP and Connect Ventures Two LP (the Connect Ventures) since 2011 and 2015, respectively. The Connect Ventures are venture capital funds which target early stage investment operations, with the legal status of limited partnership under English law. Each fund is considered a related party because at least one key figure in the fund s management is related to a number of leading representatives of De Agostini S.p.A., as well as directors of the Company. The Company s investment in Connect Ventures One LP was $4.7 million and $4.2 million at December 31, 2017 and 2016, respectively. The Company accounts for this investment as an available-for-sale investment. The Company s investment in Connect Ventures Two LP was $3.8 million and $1.7 million at December 31, 2017 and 2016, respectively. The Company accounts for its investment as an available-for-sale investment. Annual Reports and Accounts 2017 Page 1 156

Transactions with Related Parties De Agostini Group The Company is majority owned by De Agostini S.p.A. Amounts receivable from De Agostini S.p.A. and subsidiaries of De Agostini S.p.A. (De Agostini Group) are non-interest bearing. Transactions with the De Agostini Group include payments for support services provided and office space rented. In addition, certain Italian subsidiaries of the Company have a tax unit agreement with De Agostini S.p.A. pursuant to which De Agostini S.p.A. consolidates certain Italian subsidiaries of De Agostini S.p.A. for the collection and payment of taxes to the Italian tax authority. Autogrill S.p.A. Gianmario Tondato da Ruos, a member of the board of directors of the Parent, is Chief Executive Officer and a director of Autogrill S.p.A. (Autogrill), a global operator of food and beverage services for travelers. Autogrill has a contract with the Company to sell scratch and win and lottery tickets in Italy. Assicurazioni Generali S.p.A. Assicurazioni Generali S.p.A. (Generali) is a related party of the Company as the Vice-Chairman of the Board also serves on Generali s board of directors. In 2012, the Company entered into a lease agreement to lease the Company s facility in Rome, Italy from a wholly-owned subsidiary of Generali. Willis Towers Watson A Board member, James McCann, is a member of the board of directors of Willis Towers Watson (previously Willis Group Holdings PLC) (Willis Towers), a global firm with offerings from insurance and reinsurance to retirement planning and health-care consulting. Another Board member, Sir Jeremy Hanley, was a member of the board of directors of Willis Ltd., a subsidiary of Willis Towers until February 2017. Effective November 1, 2017, Sir Jeremy Hanley retired from the Board and from his roles on the Audit Committee and the Nominating and Corporate Governance Committee. Willis Towers currently acts as a broker for the Company s insurance needs. Employment Arrangement Enrico Drago, the son of Board member Marco Drago, was the CEO and a board member of the Company s wholly owned subsidiary Lottomatica S.p.A. and a board member of Lottoitalia. On March 29, 2017, he resigned as CEO and board member of Lottomatica S.p.A. and on April 21, 2017, he resigned as a board member of Lottoitalia. Enrico Drago continues to work for the Company in a management position within the North America Gaming and Interactive business segment. Annual Reports and Accounts 2017 Page 1 157

The following table sets forth transactions with related parties: For the year ended December 31, ($ thousands) 2017 2016 2015 OPAP S.A. 37,512 4,437 4,036 Autogrill S.p.A. 55 59 6,060 37,723 4,671 10,356 Operating costs Assicurazioni Generali S.p.A. 3,765 3,102 3,003 Willis Towers Watson 550 550 5,000 De Agostini Group 120 57 569 Key Management Personnel - Officer Compensation Salary Bonus Other Total Awards Marco Sala, Chief Executive Officer 887,588 1,832,250 4,446,893 3,973,998 11,140,729 1 Represents the GAAP grant date fair value of equity compensation vested during fiscal year 2017. 2 Represents the value of health and welfare benefits received by the executive officers during 2017 (including medical, dental, disability, life insurance, relocation, tax preparation, and retirement benefits). Also includes car allowances, housing allowances, and perquisites. 2017 benefits payment includes an increase in U.K./ Foreign Tax Allowance/ Payments due to a higher STI payout made in the U.K. during the calendar year of 2017, a higher LTI vesting value in calendar year 2017 and exchange rate fluctuation. The Foreign Tax Allow/ Payments for Marco Sala is $3,368,281 grossed up 3 Marco Sala s salary is $1,000,000. He is paid 70% in the U.K. in pounds sterling (converted at an FX rate 1.2882) and 30% in Italy in euros (converted at an FX rate 1.1295). This payment arrangement will require periodic true up to ensure he is paid $1,000,000. Annual Reports and Accounts 2017 Page 1 159 Other Executive Officers4,663,2485,043,9695,716,8844,457,75519,881,856 Equity Name ($) (3)($)($)(1)($)(2)($) 17,77714,00921,223 OPAP S.A.1187 Autogrill S.p.A.2,391678 Ringmaster S.r.l.10,9409,53512,651 De Agostini Group201921 Ringmaster S.r.l.136156239 Service revenue and product sales

25. Auditors' Remuneration Beginning with the year ended December 31, 2016, PricewaterhouseCoopers LLP (PwC U.S.) is serving as the Company s independent auditor. "PwC Entities" means PricewaterhouseCoopers LLP, the auditor of the Company, as well as all of the foreign entities belonging to the PwC network. Aggregate fees for professional services and other services rendered by PwC Entities in 2017 and 2016 were approximately: ($ thousands) 2017 2016 Audit-related fees 204 1,660 All other fees 134 853 • Audit fees consist statements. of fees billed for professional services in connection with the annual financial • Audit-related fees are fees charged for assurance and related services that are reasonably related to the performance of the audit or review of the financial statements, agreed upon procedures for certain financial statement areas and are not reported under "Audit fees." Tax fees consist of fees billed for professional services for tax planning and compliance. All other fees consist of fees billed for services other than those reported above and mainly comprise services in relation to IP royalty audits. • • Annual Reports and Accounts 2017 Page 1 160 15,472 18,653 Tax fees552643 Audit fees14,58215,497 For the year ended December 31,

26. The Parent s Directly and Indirectly Owned Subsidiaries The Parent had the following subsidiaries for the year ended December 31, 2017: of ordinary shares non-interests United States Cross Streets, St. John s, Australia Annual Reports and Accounts 2017 Page 1 161 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion held by controlling (%) (%) (%) Acres Gaming ncorporated 6355 South Buffalo Drive, Las Vegas, Nevada 89113, Holding company 100.00 Anguilla Lottery and Gaming Company Limited Barrow Building, PO Box 771, The Valley, Anguilla Lottery operator 100.00 Antigua Lottery Company Limited Fitzgerald House, Church & Antigua Lottery operator 100.00 Atronic Australia Pty Ltd Level 10, 530 Collins Street, Melbourne Victoria 3000, Gaming machine operator and game designer 100.00 Atronic Australien GmbH Ravensberger Strae 41, 32312, Lubbecke, Germany Casino technology producer and distributor 100.00 Beijing GTECH Computer Technology Company Limited R1101-1102, 11F, Viva Plaza, No. 29 Suzhou Street, Haidian District, Beijing 100080, China Technical support and software development provider 100.00 Big Easy S.r.l. Viale del Campo Boario, 56/d Roma, taly Electronic devices consultancy and gaming hall management 56.00 44.00 BillBird S.A. ul. KAM ENNA, nr 21, lok., miejsc. KRAKOW, kod 31-403, poczta KRAKOW, Poland Electronic bill payment services 100.00 Bring t, nc. 6355 South Buffalo Drive, Las Vegas, Nevada 89113, United States Online social gaming provider 100.00

of ordinary held by non-interests services provider 0127, South Africa 00820, U.S. Virgin slands S.p.A.) 21. Stockhom. 11187, 00159 Roma, taly Annual Reports and Accounts 2017 Page 1 162 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Business Venture nvestments No 1560 Proprietary Limited GLM House, Harlequins Office Park, 164 Totius Street, Groenkloof Pretoria, Lottery technology and lottery support 100.00 Caribbean Lottery Services, nc. 2135 (11A) Company Street, Christiansted, St. Croix Lottery services and financial support provider 100.00 CartaLis stituto di Moneta Elettronica S.p.A. (also known as CartaLis MEL Viale del Campo Boario, 56/d Roma, taly E-money issuer 85.00 15.00 Casablanca Gaming Group AB Mannheimer Swartling Advokatbyra, Norrlansgatan Sweden Holding company 100.00 Casagaming Holding Ltd Vincenti Buildings, 28/19 (Suite 1140) Strait Street, Valletta VLT1432, Malta Holding company 99.00 1.00 Casagaming Ltd Vincenti Buildings, 28/19 (Suite 1140) Strait Street, Valletta VLT1432, Malta nactive company 99.00 1.00 CLS-GTECH Technology (Beijing) Co., Ltd. 2/F Block A, Raycom nfo Tech Park, 2 Kexueyuan South Road, Zhong Guan Cun, Haidian District, Beijing, 100190 China Lottery computer software and hardware developer 100.00 Consel Consorzio Elis Via Sandro Sandri, 45, Public services provider 0.10 99.90 Consorzio Lotterie Nazionali Via Buonconvento, 6 Roma, taly National deferred and instant lotteries automated management services 63.00 37.00

of ordinary held by non-interests Napoli, taly Las Vegas, Nevada 89113, United States 04602-000, Sao Paulo, Brazil Wilmington, DE 19801, Annual Reports and Accounts 2017 Page 1 163 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Cox S.r.l. Centro Direzionale. sola F/4 License operation and management 100.00 Cyberview nternational, nc. 6355 South Buffalo Drive, United States Gaming products distributor 100.00 Data Transfer System nc. 1209 Orange Street, Wilmington, DE 19801, Equipment and license software provider 100.00 DoubleDown nteractive B.V. Galwin 2, 1046 AW Amsterdam, Netherlands Holding company 100.00 Dreamport do Brasil Ltda. Rua Barao do Triunfo, 88 room 1211, Brooklin Paulista, Gaming, lottery consulting and services provider 100.00 Dreamport Suffolk Corporation 1209 Orange Street, United States Minority interest holding company 100.00 Dreamport, nc. 1209 Orange Street, Wilmington, DE 19801, United States Casino video lottery terminal development 100.00 Eagle ce AB Mannheimer Swartling Advokatbyra, Norrlansgatan 21. Stockhom. 11187. Sweden nactive company 100.00 Entraction Holding AB Mannheimer Swartling Advokatbyra, Norrlansgatan 21. Stockhom. 11187. Sweden Online gaming products and services provider 100.00 Entraction Mobile AB Mannheimer Swartling Advokatbyra, Norrlansgatan 21. Stockhom. 11187. Sweden nactive company 100.00

of ordinary held by non-interests Lancashire,BB2 6AH, United Lancashire,BB2 6AH, United (Suite 1140) Strait Street, States Annual Reports and Accounts 2017 Page 1 164 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Europrint (Promotions) Limited Lancaster House, 52 Preston New Road, Blackburn, Kingdom Newspaper lottery games designer 100.00 Europrint Holdings Limited Lancaster House, 52 Preston New Road, Blackburn, Kingdom Management services provider 100.00 Gaming Productions Holding Limited Vincenti Buildings, 28/19 Valletta VLT1432, Malta Holding company 99.00 1.00 GTECH (Gibraltar) Holdings Limited 23 Portland House, Glacis Road, GX11 1AA, Gibraltar Holding company 100.00 Hudson Alley Software, nc. 179 Christopher Street, New York, NY 10014, United Software solutions provider 100.00 GT (Gibraltar) Solutions Limited 23 Portland House, Glacis Road, GX11 1AA, Gibraltar Management services provider 100.00 GTECH Asia Corporation 1209 Orange Street, Wilmington, DE 19801, United States Holding company 100.00 GTECH Brasil Ltda. Rua Barao do Triunfo, 88 room 1211, Brooklin Paulista, 04602-000, Sao Paulo, Brazil Gaming, lottery consulting and services provider 100.00 GT Far East Pte Ltd 8 Marina Boulevard, #05-02, Marina Bay Financial Centre, 018981, Singapore Lottery terminal maintenance provider 100.00 GT France SARL 19, Boulevard Malesherbes, 75008 Paris, France Software provider, online lottery systems maintenance, and instant ticket validation 100.00 GTECH German Holdings Corporation GmbH Weseler Stra 253, MOnster,48151, Germany Holding company 100.00

of ordinary held by non-interests Qaliet, St. Julians STJ 3255, Qaliet, St. Julians STJ 3255, Qaliet, St. Julians STJ 3255, Wilmington, DE 19801, 261 Oxford Road, llovo Annual Reports and Accounts 2017 Page 1 165 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GTECH Malta Casino Limited 2, Belvedere Court, Triq l-Malta Web-based casino gaming provider 99.99 0.01 GTECH Malta Holdings Limited 2, Belvedere Court, Triq l-Malta Holding company 99.99 0.01 GTECH Malta Poker Limited 2, Belvedere Court, Triq l-Malta Web-based poker provider 99.99 0.01 GTECH Management P. . Corporation 1209 Orange Street, United States Maintenance support provider 100.00 GTECH Mexico S.A. de C.V. Av. Constituyentes 635, Mexico City, 11810, Mexico nactive company 100.00 GTECH Southern Africa (Pty) Ltd. Ground Floor, Orbach Place, 2196, South Africa nactive company 100.00 GT Spain Operations, S.A. f/k/a GTECH Spain S.A. El Prat de Llobregat, Calle Selva 12, planta 1a, Modulo A2 08820, Barcelona, Spain Gambling marketing and operations 100.00 GT SWEDEN AB f/k/a GTECH Sweden AB Halsingegatan 40 12tr, 113 43 Stockholm, Sweden Manufacturer, builder and supplier 100.00 GT Sweden nteractive AB f/k/a GTECH Sweden nteractive AB Box 3243, 350 53 Vaxjo, Sweden Gaming systems provider 100.00 GTECH Ukraine 3-A Leiptsygska Street, Kyiv, Ukraine Manufacturer, builder and supplier 100.00 GT V A DOM NN CAN REPUBL C SAS f/k/a GTECH V A DR, SAS Avenida Estrella Sadhala, Esquina Bartolome Colon, Edificio Hache, Primer Piso, Santiago, Dominican Republic Commercial services provider 100.00

of ordinary held by non-interests Wilmington, DE 19801, 5to piso - Munro, Argentina Australia States Manchester, M17 1HH, Annual Reports and Accounts 2017 Page 1 166 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GTECH WaterPlace Park Company, LLC 1209 Orange Street, United States Shell company 100.00 GTECH West Africa Lottery Limited 98, Awolowo Road, koyi, Nigeria Lottery infrastructure developer 100.00 .G.T. - Argentina S.A. Hipolito Alferez Bouchard 4191, Optima Park Tower, Sales and service provider 96.67 3.33 .G.T. (Australia) Pty Limited Level 5, 11 Talavera Road, Macquarie Park, NSW 2113 Gaming device manufacturer and distributor 100.00 GT 9295 Prototype Drive Reno, Nevada 89113, United Gaming device manufacturer and distributor 100.00 GT - U.K. Group Limited Quay West Trafford Wharf Road, Trafford Park, United Kingdom Holding company 100.00 GT (Alderney 1) Limited nchalla, Le Val, GY93UL, Alderney, Bristish Channel slands nternet gaming software provider and operator 100.00 GT (Alderney 2) Limited nchalla, Le Val, GY93UL, Alderney, Bristish Channel slands nternet gaming software provider and operator 100.00 GT (Alderney 4) Limited nchalla, Le Val, GY93UL, Alderney, Bristish Channel slands nternet gaming software provider and operator 100.00 GT (Alderney 5) Limited nchalla, Le Val, GY93UL, Alderney, Bristish Channel slands nactive company 100.00 GT (Alderney 7) Limited nchalla, Le Val, GY93UL, Alderney, Bristish Channel slands nternet gaming software provider and operator. 100.00

of ordinary held by non-interests slands operator operator United Kingdom Manchester, M17 1HH, Tower, 21/F, Room 2101, Annual Reports and Accounts 2017 Page 1 167 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT (Alderney) Limited nchalla, Le Val, GY93UL, Alderney, Bristish Channel ncurs operating costs 100.00 GT (Gibraltar) Limited 57 - 63 Line Wall Road, Gibraltar nternet gaming software provider and 100.00 GT (UK 1) Limited Quay West Trafford Wharf Road, Trafford Park, Manchester, M17 1HH, nternet gaming software provider and 100.00 GT (UK 2) Limited Quay West Trafford Wharf Road, Trafford Park, United Kingdom Lottery and mobile gaming provider 100.00 GT Asia - Macau, S.A. Avenida Comercial de Macau, nos. 251A-301, A A Macau, China Market gaming provider 99.92 0.08 GT AS A PTE. LTD. 1 Changi North St 1, 02-01 and 02-03, 498789, Singapore Gaming equipment distributor and manufacturer 100.00 GT Asiatic Development Limited Jayla Place, Wickhams Cay , Road Town, Tortola, British Virgin slands Computer hardware and computer software provider 100.00 GT Australasia Corporation f/k/a GTECH Australasia Corporation 1209 Orange Street, Wilmington, DE 19801, United States Lottery system maintenance services provider 100.00 GT Austria GmbH f/k/a GTECH Austria GmbH Seering 13-14, 8141 Unterpremstatten, Austria Gaming manufacturer 100.00 GT Canada Solutions ULC f/k/a GTECH Canada ULC 1959 Upper Water Street, Suite 900, Halifax B3J 3N2 Nova Scotia, Canada Video lottery games developer and manufacturer 100.00 GT Colombia Ltda. f/k/a GTECH Colombia Ltda. Carrera 45, #108A-50, Piso 5, Bogata, Colombia Commercial services 100.00

of ordinary held by non-interests City, 11810, Mexico Colombia Ltda. United States to Danish lottery customer United States Annual Reports and Accounts 2017 Page 1 168 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT Colombia Solutions S.A.S. Carrera 45, #108A-50, Piso 5, Bogata, Colombia Selling slot machines 100.00 GT Commercial Services, S de R L CV Avenida Constituyentes 635, 16 de Septiembre, Mexico Payment processing 100.00 GT Comunicaciones Colombia Ltda. f/k/a GTECH Comunicaciones Carrera 45, #108A-50, Piso 5, Bogata, Colombia Communication services provider 100.00 GT Czech Republic LLC f/ k/a GTECH Czech Republic LLC 1209 Orange Street, Wilmington, DE 19801, Maintain operate and manage the assets, equipment and licenses 37.00 63.00 GT Denmark Corporation f/k/a GTECH Northern Europe Corporation 1209 Orange Street, Wilmington, DE 19801, United States Lottery support & maintenance services 100.00 GT do Brasil Ltda. Avenida das Nagoes Unidas, 14171, 15° Andar, City of Sao Paulo, Brazil nactive company 99.99 0.01 GT Dutch nteractive LLC 160 Greentree Drive, Suite 101, Dover, DE 19904, United States Holding company 100.00 GT EMEA B.V. Galwin 2, 1046 AW Amsterdam, Netherlands Operate patents and licenses 100.00 GT Estonia O0 Kawe Plaza, Parnu mnt 15, 10141 Tallinn, Estonia Customer service provider 100.00 GT Foreign Holdings Corporation f/k/a GTECH Foreign Holdings Corporation 1209 Orange Street, Wilmington, DE 19801, Holding company 100.00 GT GAMES SAS f/k/a GTECH SAS Carrera 45, #108A-50, Piso 5, Bogata, Colombia Execution of licensing contracts 100.00

of ordinary held by non-interests manufacturer and distributor Corporation Limited United States China No. 64, Madhapur, Telangana 500081, ndia Annual Reports and Accounts 2017 Page 1 169 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT Germany Gaming GmbH f/k/a GTECH Germany GmbH Weseler Stra 253, 48151, MOnster, Germany Slot machines and casino systems 100.00 GT Germany GmbH f/k/a GTECH GmbH Weseler Stra 253, 48151, MOnster, Germany Computer gambling systems provider 100.00 GT Global Services Limited f/k/a GTECH Global Services Grigori Afxentiou, 27, 6021, Larnaca, Cyprus Systems support services 100.00 GT Global Solutions Corporation f/k/a GTECH Corporation 1209 Orange Street, Wilmington, DE 19801, Gaming technology and services company 100.00 GT Hong Kong Limited 26th Floor, No. 8 Queen s Road Central. Hong Kong, Gaming equipment marketer and distributor 100.00 GT ndia Private Limited f/ k/a GTECH ndia Private Limited 2nd Floor, NCC House, Sy. Hyderabad, Kurnool, Software development services provider 100.00 GT ndiana LLC f/k/a GTECH ndiana, LLC 150 West Market Street, Suite 800, ndianapolis, N 46204, United States Lottery system and support services provider 100.00 GT nteractive (Malta) Holding Ltd Vincenti Buildings, 28/19 (Suite 1140) Strait Street, Valletta VLT1432, Malta Holding company 99.00 1.00 GT nteractive (Sweden) AB Mannheimer Swartling Advokatbyra, Norrlansgatan 21, Stockhom, 11187, Sweden Systems and software developer and distributor 100.00 GT nteractive C.V. Galwin 2, 1046 AW Amsterdam, Netherlands Holding company 35.83 64.17

of ordinary held by non-interests (Suite 1140) Strait Street, (Suite 1140) Strait Street, (Suite 1140) Strait Street, (Suite 1140) Strait Street, (Suite 1140) Strait Street, Annual Reports and Accounts 2017 Page 1 170 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT nteractive Emop (Malta) Limited Vincenti Buildings, 28/19 Valletta VLT1432, Malta Gaming operator 99.00 1.00 GT nteractive Holdings 2 C.V. Galwin 2, 1046 AW, Amsterdam, Netherlands Holding company 86.17 13.83 GT nteractive nvestment (Malta) Holding Limited Vincenti Buildings, 28/19 Valletta VLT1432, Malta nactive company 99.00 1.00 GT nteractive Network (Malta) Holding Limited Vincenti Buildings, 28/19 Valletta VLT1432, Malta Holding company 99.00 1.00 GT nteractive Network (Malta) Limited Vincenti Buildings, 28/19 Valletta VLT1432, Malta nactive company 99.00 1.00 GT nteractive Operation (Malta) Ltd Vincenti Buildings, 28/19 Valletta VLT1432, Malta nactive company 99.00 1.00 GT nteractive, nc. 160 Greentree Drive, Suite 101, Dover, DE 19904, United States nternet gaming software provider and operator 100.00 GT nternational Holdings 1 LLC 160 Greentree Drive, Suite 101, Dover, DE 19904, United States Holding company 100.00 GT nternational Treasury B.V. Galwin 2, 1046 AW, Amsterdam, Netherlands Holding company 100.00 GT nternational Treasury Holding LLC 160 Greentree Drive, Suite 101, Dover, DE 19904, United States Holding company 100.00 GT reland Operations Limited f/k/a GTECH reland Operations Limited Riverside One, Sir John Rogerson s Quay, Dublin 2, reland Gaming and lottery technology provider 100.00

of ordinary held by non-interests taly S.r.l. Minato-ku, Tokyo, 106-0047, Korea United States securities and real estate operations Annual Reports and Accounts 2017 Page 1 171 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT talia Gaming Machines Solutions S.r.l. f/ k/a Spielo nternational Viale del Campo Boario, 56/d Roma, taly Video lotteries machines 100.00 GT Japan K.K. Oak Minami-Azabu Building 2F, 3-19-23 Minami-Azabu, Japan nactive company 100.00 GT Juegos S.A.S. Carrera 45, #108A-50, Piso 5, Bogata, Colombia Online lottery operator 100.00 GT Korea LLC 16th, 17th Fl, Teheran-ro 134, Gangnam-gu, Seoul, Gaming and lottery software and hardware 100.00 GT Latin America Corporation f/k/a GTECH Latin America Corporation 1209 Orange Street, Wilmington, DE 19801, Lottery system and support services provider 80.00 20.00 GT Mexico Lottery S. De R.L. de C.V. f/k/a GTECH Servicios de Mexico, S. de R.L. de C.V. Rio Marine, No. 19, 5°. Piso, Col. Cuauhtemoc, Mexico Lotteries, betting and gambling services provider 100.00 GT Monaco S.A.M. f/k/a GTECH Monaco S.A.M. f/ k/a Spielo nternational Monaco S.A.M. 7, Rue Du Gabian, Le Gildo Pastor-Bloc C-8 ETG-N° 22, 98000, Monaco ndustrial, commercial, financial, 98.00 2.00 GT Peru Solutions S.A. f/ k/a GTECH Peru S.A. f/k/a Spielo nternational Peru S.A. Av. Manuel Olguin, Officina 1001-1002, Santiago de Surco, Lima, Peru Terminal assembly, production and distribution 100.00 GT Poland Sp. zoo.o f/k/a GTECH Poland Sp. z o.o. AL. JEROZOL MSK E, nr 92, 00-807, Warsaw, Poland Telecommunication network design and installation 100.00

of ordinary held by non-interests United States S.L. nvestment AB Suzhou Street, Haidian China development Balgat, Ankara, Turkey United Kingdom Annual Reports and Accounts 2017 Page 1 172 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT Slovakia Corporation f/k/a GTECH Slovakia Corporation 1209 Orange Street, Wilmington, DE 19801, Lottery system and support services provider 100.00 GT Spain Lottery S.L. f/k/ a GTECH Global Lottery El Prat de Llobregat, Barcelona 08820, Spain Lotteries, bets, draws, combinations at random provider 100.00 GT Sweden nvestment AB f/k/a GTECH Sweden Honnorsgatan 2, Vaxjo 35053, Sweden Provides employees with share-based incentive compensation 100.00 GT Technology Development (Beijing) Co. Ltd. 11F, Viva Plaza, No. 29 District, Beijing 100080, P.R. Game software and system software 100.00 GT Turkey Teknik Hizmetler Ve Musavirlik Anonim f/k/a GTECH Avrasya Teknik Hizmetler Ve Musavirlik A.S. Nasuh Akar Mah. Turkocagi cad. 1400. sok. No: 34/2, Hardware and software systems operator 99.90 0.10 GT U.K. Limited f/k/a GTECH U.K. Limited 1st Floor Building, 3 Croxley Green Business Park, Hatters Lane, Watford, WD18 8YG, United Kingdom Games and lottery provider 100.00 GT UK Games Limited f/ k/a GTECH UK Games Limited 3rd Floor 10 Finsbury Square, London, EC2A 1AF, United Kingdom Online interactive betting games provider 100.00 GT UK nteractive Holdings Limited f/k/a GTECH Sports Betting Solutions Limited 3rd Floor 10 Finsbury Square, London, EC2A 1AF, Manufacturer, builder and supplier 100.00 GT UK nteractive Limited f/k/a GTECH UK nteractive Limited 3rd Floor 10 Finsbury Square, London, EC2A 1AF, United Kingdom Sports betting systems provider 100.00

of ordinary held by non-interests United States Corporation (Quebec) G1S1E5, Canada Amsterdam, Netherlands 33-19. Riga, Latvia Annual Reports and Accounts 2017 Page 1 173 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) GT Worldwide Services Corporation f/k/a GTECH Worldwide Services 1209 Orange Street, Wilmington, DE 19801, Employment services 100.00 GT-Canada nc. 600-1134 Grande Allee O, bureau 600, Quebec Gaming services provider 100.00 GT-China, nc. 160 Greentree Drive, Suite 101, Dover, DE 19904, United States Holding company 100.00 GT-Europe B.V. Galwin 2, 1046 AW Distribution and sales 100.00 GT-fslandi ehf. ( GT-celand plc) Sigtuni 3800, Selfoss, celand Distribution 100.00 GT-Latvia S A Krisjana Valdemara Street Technical service provider 100.00 GT-Mexicana de Juegos, S. de R.L. de C.V. Andres Bello 45 Piso 14, Col. Polanco, Chapultepec, Deleg. Miguel Hidalgo, D.F.C.P. 11560, Mexico Commercialisation of gaming machines and software 99.99 0.01 GT-UK Gaming Limited Quay West, Trafford Wharf Road, Trafford Park, Manchester, M17 1HH, United Kingdom Casino market product distribution 100.00 nnoka Oy Rajatorpantie 41 C 01640 Vantaa, Finland Lottery applications and games developer 81.00 19.00 nteractive Games nternational Limited Lancaster House, 52 Preston New Road, Blackburn, BB2 6AH, United Kingdom Development, marketing and sale of interactive media games and lottery 100.00 nternational Game Technology 9295 Prototype Drive Reno, Nevada 89113, United States Holding company of the legacy G 100.00

of ordinary held by non-interests Hutt Road, Lower Hutt, New Madrid, Spain oficina 1001-1002, Santiago Cyprus Corner ndianapolis St, Midrand 1685, South Africa Annual Reports and Accounts 2017 Page 1 174 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) nternational Game Technology (NZ) Limited Birchwood Park, Unit 4, 483 Zeland Product support provider 100.00 nternational Game Technology Espana, S.L. Pza de Pablo Ruiz Picasso 1, Torre Picasso, 5, 28020, Amusement with prize design and development 100.00 nternational Game Technology S.R.L. Av. Manuel Olgufn 511, de Surco, Lima, Peru Products marketing and distribution 99.99 0.01 nternational Game Technology Services Limited 27 Grigori, 6021, Larnaca, Lottery and gaming systems support 100.00 nternational Game Technology-Africa (Pty) Ltd. 2 Brands Hatch Close, Kyalami Business Park, Distributor and operator 100.00 Leeward slands Lottery Holding Company, nc. C18, The Sands Complex, Bay Road, Basseterre, St. Christopher, St. Kitts Holding company 100.00 L S stituto di Pagamento S.p.A. Via Staro, 4 - Milano, taly Payment services and activities 100.00 Lotterie Nazionali S.r.l. Viale del Campo Boario, 56/d Roma, taly Automated management services 64.00 36.00 Lottery Equipment Company 39 Predslavynska Street, Kyiv, 03150, Ukraine n liquidation 100.00 Lottoitalia S.r.l. Viale del Campo Boario, 56/d Roma, taly Lottery and gaming management 61.50 38.50 Lottomatica Giochi e Partecipazioni S.r.l. Viale del Campo Boario, 56/d Roma, taly Undertaking and management of stock interests 100.00 Lottomatica Holding S.r.l. Viale del Campo Boario, 56/d Roma, taly Organization, management of traditional games and/or lotteries 100.00

of ordinary held by non-interests Roma, taly Metropolis, Thailand Attica, Greece Suite 814, Chicago, L Morocco Annual Reports and Accounts 2017 Page 1 175 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Lottomatica talia Servizi S.p.A. Viale del Campo Boario, 56/d Roma, taly Management of automated services 100.00 Lottomatica S.p.A. Viale del Campo Boario, 56/d Management of automated Lotto services 100.00 Lottomatica Scommesse S.r.l. Viale del Campo Boario, 56/d Roma, taly License operation and management 100.00 Lottomatica Videolot Rete S.p.A. Viale del Campo Boario, 56/d Roma, taly Operational management of the network for the management of gaming 100.00 Loxley GTECH Technology Co., Ltd 102 Na Ranong Road, Klongtoey, Bangkok Computer products and systems sales and leasing 49.00 51.00 Neurosoft S.A. 466, rakliou Avenue & Kiprou str., 141 22 raklio, Technology consultancy 16.32 83.68 Northstar Lottery Group, LLC 208 South LaSalle Street, 60601, United States Lottery operations 80.00 20.00 Northstar New Jersey Holding Company, LLC 820 Bear Tavern Road, West Trenton, NJ 08628, United States Holding Company 50.15 49.85 Northstar New Jersey Lottery Group, LLC 820 Bear Tavern Road, West Trenton, NJ 08628, United States Lottery management services 82.31 17.69 Northstar SupplyCo New Jersey, LLC 820 Bear Tavern Road, West Trenton, NJ 08628, United States Goods and services provider 70.00 30.00 Online Transaction Technologies SARL a Associe Unique Twin Center, Tour A Angle Bd Zerktouni et Al Massira El Khadra, Casablanca, nactive company 100.00 Optima Gaming Service S.r.l. Viale del Campo Boario, 56/d Roma, taly Gaming apparel management 100.00

of ordinary held by non-interests 31-403, Poland Veikkaus, Vantaa, Finland services development Valletta VLT1432, Malta Las Vegas, Nevada, 89113, Glacis Road, GX11 1AA, development and maintenance Annual Reports and Accounts 2017 Page 1 176 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Orbita S.p. z o.o. ul. KAM ENNA, nr 21, KRAKOW, Machine repair and maintenance 100.00 Oy GTECH Finland Ab c/o Veikkaus Oy, Karhunkierros 4, 01009 Games and lotteries installation 100.00 PCC Giochi e Servizi S.p.A. Viale del Campo Boario, 56/d Roma, taly Printed documents, forms and value papers sales and production 100.00 Playyoo SA Via Cantonale 19, Lugano 6900, Switzerland Software, applications and information 100.00 Poker Provider Limited Vincenti Buildings, 28/19 (Suite 1140) Strait Street, Holding company 99.00 1.00 Powerhouse Technologies, nc. 6355 South Buffalo Drive, United States nactive company 100.00 Probability Games Corporation Limited c/o Cork Gully LLP, 52 Brook Street, London, W1K 5DS, United Kingdom nformation technology consultancy 100.00 Probability (Gibraltar) Limited Suite 23, Portland House Gibraltar B2C Mobile online gaming 100.00 Prodigal Lottery Services, N.V. Walter J.A. Nisbeth Road, 63 Philipsburg, St. Maarten Lottery business operations 100.00 Retail Display and Service Handlers, LLC 1209 Orange Street, Wilmington, DE 19801, United States Lottery provider 100.00 Ringmaster S.r.l. Corso Francia, 110 - Torino, taly Software and hardware production, 50.00 50.00 SED Multitel S.r.l. Viale del Campo Boario, 56/d Roma, taly Telecommunication services implementation and management 100.00

of ordinary held by non-interests Polanco, Chapultepec, D.F.C.P. 11560, Mexico to customers District, Bangkok, Thailand Buenos Aires, Argentina Bay Road, Basseterre, St. 21, Stockhom, 11187, Annual Reports and Accounts 2017 Page 1 177 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Servicios Corporativos y de Administracion, S. de R.L. de C.V. Andres Bello 45 Piso 14, Col. Deleg. Miguel Hidalgo, Lease office space and provide services 100.00 Siam GTECH Company Limited No. 102, 16th Floor, Na Ranong Road, Klongtoey Computer hardware and software provider 99.96 0.04 Spielo nternational Argentina S.r.l. Paraguay 1365, Piso 4 Officiana 28, C1057AAU Computer hardware and software provider 86.54 13.46 St. Kitts and Nevis Lottery Company, Ltd. C18, The Sands Complex, Kitts Lottery operator 100.00 Surfit i Nacka AB Mannheimer Swartling Advokatbyra, Norrlansgatan Sweden nactive company 100.00 Technology and Security Printing S.r.l. Viale del Campo Boario, 56/d Roma, taly Gaming books and magazines printing and production 100.00 Technology Risk Management Services, nc. 1209 Orange Street, Wilmington, DE 19801, United States nsurance reinsurer 100.00 UTE LOG STA GT f/k/a UTE Logista-GTECH, Law 18/1982, No. 1 Trigo n° 39, Polfgono ndustrial Polvoranca, Legans, Madrid, 18104 Spain Rendering of services to charitable organisations 50.00 50.00 V A TECH Servicios SpA sadora Goyenechea, 3447 Piso 19, 2215-21, Las Condes, Santiago, Chile nstant tickets producer 100.00 VLC, nc. 6355 South Buffalo Drive, Las Vegas, Nevada, 89113, United States Video gaming devices manufacturer and distributor 100.00

of ordinary held by non-interests Barcelona, 8013, Spain Polanco, Mexico City, 11560, slands equipment Annual Reports and Accounts 2017 Page 1 178 Name of entity Address of registered office Nature of Business Proportion of ordinary shares directly held by parent Proportion of ordinary shares held by the Parent Proportion shares controlling (%) (%) (%) Zest Gaming Espana S.L. Calle Caspe 155-157 Video bingo 100.00 ZEST GAM NG MEX CO, S.A. DE C.V. Campos Eliseos169, Col. Mexico Video bingo 100.00 Joint Ventures CLS-GTECH Company Limited PO Box 957, Offshore ncorporations Centre, Road Town, Tortola, British Virgin Holding and provision of technical services 50.00 50.00 Technology and Security Printing S.r.l. Viale del Campo Boario, 56/d Roma, taly nactive company 50.00 50.00 Telling GT nformation Technology (Shenzhen) Co., Ltd. 503D, Tian An Chuangxin Keji Square (Phase ) East Block, the nterchange of Binhe Road and Xiangmihu Road, Shatou Street, Futian District, Shenzhen, China Wholesale and retail of computer hardware, software and related 49.00 51.00 Associates Ringmaster S.r.l. Corso Francia, 110 - Torino, taly Computer technology services 50.00 50.00 Yeonama Holdings Co. Limited Nicosia Tower Center, 8th Floor, Vyronos 36, Nicosia 1506, Cyprus Holding company 30.00 70.00

International Game Technology PLC Company Balance Sheets ($ thousands) December 31, Note 2017 2016 Non Current assets: Non current financial assets 19,068 17,894 nvestments in subsidiaries 5 4,244,416 3,995,618 Total non current assets 11,058,570 11,458,315 Cash and cash equivalents 692,894 29,904 ncome Tax Receivable 1,080 Receivables from related parties 6 34,890 9,186 Total current assets 1,284,184 101,906 Total assets 12,342,754 11,560,221 EQUITY AND LIABILITIES Share Capital 8 20,344 20,228 Retained earnings 8 3,480,825 3,605,004 Total equity 3,672,462 3,795,354 Non current liabilities Deferred income taxes 25 Non current financial liabilities 16,061 14,865 Other current liabilities 179,205 161,665 Loans payable to related parties 6 260,498 782,830 Current financial liabilities 5,118 Total current liabilities 1,175,972 977,602 Total liabilities 8,670,292 7,764,867 Total equity and liabilities 12,342,754 11,560,221 The accompanying notes are an integral part of these Company financial statements. These Company financial statements were approved by the Board of Directors on March 22, 2018 and signed on its behalf on March 22, 2018 by: Marco Sala Chief Executive Officer Company registration number: 09127533 Annual Reports and Accounts 2017 Page 1 180 ncome taxes payable 2,749 Payables to related parties6118,38614,718 Current portion of long term debt7599,061 Accounts payable13,70415,640 Total non-current liabilities 7,494,3206,787,265 Loans payable to related parties6126,582476,426 Long term debt, less current portion77,351,6526,295,974 Other reserves150,291151,192 Share Premium21,00218,930 Equity Loans receivable from related parties6551,95957,934 Current financial assets4791,079 Other current assets2,8823,803 Loans receivable from related parties66,793,3377,437,919 Deferred income taxes254,827 Property, plant and equipment, net1,7242,057 ASSETS

International Game Technology PLC Company Statements of Cash Flows ($ thousands) Operating activities For the years ended December 31 Note 2017 2016 Profit before income tax 56,131 112,435 Adjustments for: Interest expense 394,504 379,208 Non-cash foreign exchange gain (loss), net 388,962 (98,564) Related party interest expense 6 18,536 30,737 Share based payment expense 13 3,447 5,384 Depreciation 345 336 Interest income (67) (15) Zest contingent consideration (2,059) Income taxes paid (5,093) (14,690) Related party interest income 6 (440,842) (471,489) Cash flows before changes in operating assets and liabilities 413,864 (56,658) Changes in operating assets and liabilities: Amounts from/due to related parties 57,084 (3,115) Accounts payable 1,584 (1,424) Other assets and liabilities (5,152) 18,805 Net cash flows provided by (used in) operating activities 467,380 (42,392) Investing activities Investment in subsidiaries (252,289) (12,912) Investment in available for sale securities (3,320) (1,734) Capital expenditures (12) (68) Interest received 67 15 Related party loans receivable, net 418,219 207,754 Net cash flows provided by investing activities 162,665 193,055 Financing activities Related party loans payable, net (987,168) 34,358 Interest paid (346,730) (361,160) Dividends paid (162,528) (161,179) Principal payments on long-term debt (101,533) (145,952) Debt issuance costs paid (16,378) (10,239) Related party interest paid (12,929) Proceeds from share options 21 12,699 Proceeds from cash flow hedges 664 Related party interest received 341,431 468,794 Proceeds from issuance of long-term debt 1,293,190 Net cash flows provided by (used in) financing activities 20,969 (175,608) Net increase (decrease) in cash and cash equivalents 651,014 (24,945) Effect of exchange rate changes on cash 11,976 864 Cash and cash equivalents at the beginning of the year 29,904 53,985 Cash and cash equivalents at the end of the year 692,894 29,904 The accompanying notes are an integral part of these Company financial statements.

Notes to Company Financial Statements 1. General Information As indicated in the Strategic Report, International Game Technology PLC (the Company) is a public limited company incorporated in England and Wales. The Company is the successor to GTECH S.p.A., a societa per azioni incorporated under the laws of Italy (GTECH) and the sole shareholder of International Game Technology, a Nevada corporation (IGT). The Company s registered office is located at 2nd Floor, Marble Arch House, 66 Seymour Street, London, W1H 5BT, U.K., with registered number 09127533. On April 7, 2015, GTECH acquired IGT through: •The merger of GTECH with and into the Company (the Holdco Merger); and •The merger of Georgia Worldwide Corporation, a Nevada corporation and a wholly owned subsidiary of the Company with and into IGT (the Subsidiary Merger and, together with the Holdco Merger, the Mergers). Prior to the Mergers, the Company conducted no activities other than those incidental to its formation and essentially had no assets or operations. The principal activities of the Company are to make investments and provide loans to the subsidiaries in the Group.

2. Summary of Significant Accounting Policies The Company's financial statements and accompanying notes, which are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS, reflect the application of significant accounting policies described below and elsewhere in the notes to the Company's financial statements. Basis of Preparation The Company's financial statements have been prepared in accordance with IFRS and the interpretations issued by the IFRS Interpretations Committee. The financial statements have been prepared on a historical cost basis, except for financial assets at fair value through profit or loss, derivative financial instruments, and available-for-sale financial investments that have been measured at fair value. The financial statements are presented in U.S. dollars and all values are rounded to the nearest thousand ($000) (except share data) unless otherwise indicated. The principal accounting policies have been consistently applied throughout the year. The financial statements are prepared on a going concern basis. Format of the Company's Financial Statements The Company presents assets and liabilities in its balance sheet based on a current/non-current classification. An asset is current when it is: •Expected to be realised or intended to be sold or consumed in a normal operating cycle; •Held primarily for the purpose of trading; •Expected to be realised within 12 months after the reporting period; or •Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is current when: •It is expected to be settled in the normal operating cycle; •It is held primarily for the purpose of trading; •It is due to be settled within 12 months after the reporting period; or •There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities. The income statement is presented using a classification based on the function of expenses, rather than based on the nature of expense, as management believes this presentation provides information that is more relevant. The statement of changes in equity includes only details of transactions with owners. Comprehensive income is presented in two statements: a separate income statement and a statement of comprehensive income.

The statement of cash flows is presented using the indirect method. The Company s principal accounting policies are described below. Use of Estimates The preparation of the Company's financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues, costs, and expenses during the reporting period and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Significant estimates and judgments relied upon by the Company in preparing these financial statements include the timing of revenue recognition, allowance for doubtful accounts and credit losses, the amount of the provision for income taxes, and the valuation of deferred taxes. Foreign Currency Translation The Company s financial statements are presented in U.S. dollars, its functional currency. Transactions and Balances Transactions in currencies other than the entity s functional currency (foreign currencies) are recognized by the Company at their respective functional currency rates prevailing at the date of the transaction. At the end of each reporting period, foreign currency monetary items are retranslated at the functional currency spot exchange rate in effect at the reporting date. The resulting foreign currency exchange differences are recorded in the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as of the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Fair Value of Financial Instruments The Company applies the authoritative guidance on fair value measurements for financial assets and liabilities that are measured at fair value on a recurring basis, as well as those financial assets and liabilities that are not measured at fair value but for which fair value is disclosed. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price), in the principal or most advantageous market, in an orderly transaction between market participants, on the measurement date. The guidance establishes a three-tiered fair value hierarchy that prioritises inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: •Level 1: unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company at the measurement date; •Level 2: inputs that are observable in the marketplace other than those inputs classified as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, and •Level 3: inputs that are unobservable in the marketplace and significant to the valuation.

Valuation methods and assumptions used to estimate fair value, when quoted market prices are not available, are subject to judgements, and changes in these factors can materially affect fair value estimates. For financial assets and financial liabilities that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The carrying amounts reported in the Company s balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities approximate fair value due to relatively short periods to maturity. Debt Issuance Costs and Premiums/Discounts The Company accounts for incremental costs directly attributable to realising the proceeds of a debt issuance (debt issuance costs) and the difference between the net proceeds received upon debt issuance and the amount payable at maturity as adjustments to the carrying amount of the debt on its balance sheets. These adjustments are amortised to interest expense using the effective interest method over the estimated term of the debt, typically the contractual term. Investments in Subsidiaries Investments in subsidiaries are held at cost less accumulated impairment losses, if any. Cash and Cash Equivalents Cash and cash equivalents are composed of cash at banks and on hand and short-term highly liquid investments with an original maturity of 90 days or less. Cash equivalents are stated at cost. Income Taxes Current Income Tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated income statement. Management periodically evaluates positions taken in the income tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred Income Tax Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred income tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable income will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized except:

•When the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting income nor taxable income or loss; and •In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable income will be available against which the temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognized deferred income tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable income will allow the deferred income tax asset to be recovered. Deferred income tax liabilities are recognized for all taxable temporary differences, except: •When the deferred income tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting income nor taxable income or loss; and •In respect of taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized outside income or loss is recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. Share-based Compensation Share-based compensation represents the cost related to share-based awards granted to directors and employees. The Company measures share-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost as expense, net of estimated forfeitures, over the vesting period. The Company s accounting policy is to follow the tax law ordering approach regarding net operating losses and determining when tax benefits are realised related to excess share option deductions that are recorded to equity. For awards that contain only a service vesting feature, the Company recognizes compensation cost on a straight-line basis over the awards vesting period. For awards with a performance condition, when achievement of the performance condition is deemed probable, the Company recognizes compensation cost on a graded-vesting basis over the awards expected vesting period.

Adoption of New and Revised International Financial Reporting Standards The Company s accounting policies adopted in the preparation of the 2017 financial statements are consistent with those of the previous financial year. International Financial Reporting Standards issued and effective: The Company has considered new guidance applicable in 2017 and has concluded that it does not have a significant impact on the Financial Statements. International Financial Reporting Standards issued but not yet effective: The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they are endorsed and become effective. None of these are expected to have a significant effect on the Company's financial statements: •IFRS 9, Financial instruments which addresses the classification, measurement, and recognition of financial assets and liabilities, was issued in July 2014. IFRS 9 retains and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income, and fair value through profit and loss. The basis of the classification depends on the business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in other comprehensive income not recycling. There is now a new expected credit loss model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there are no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. The standard is effective for accounting periods beginning on or after January 1, 2018. Early adoption is permitted; •IFRS 15, Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity's contracts with customers. IFRS 15 will only impact revenue that is it not governed by IAS 39. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 Revenue and IAS 11 Construction contracts and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2018 and earlier adoption is permitted; •IFRS 16, Leases sets out the principles for the recognition, measurement, presentation, and disclosure of leases. The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 now requires lessees to recognize a lease liability reflecting future lease payments and a 'right-of-use asset' for virtually all lease contracts. This information gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance, and cash flows of the entity. The standard replaces IAS 17 Leases and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2019 and earlier adoption is permitted for entities that apply IFRS 15 at or before the date of initial application of IFRS 16; Only IFRS 9, IFRS 15 and IFRS 16 have been endorsed by the European Union. All other standards, amendments, and interpretation above are yet to be endorsed.

Financial assets and liabilities not carried at fair value The following tables represent the fair value hierarchy for financial assets and liabilities not measured at fair value at December 31, 2017 and 2016 Carrying As at December 31, 2017 ($ thousands) Value Fair Value Level 1Level 2Level 3Total Loans and Borrowings: Debt7,950,7138,527,2258,527,2258,527,225 Available for Sale Investments: Available for Sale Investments8,5498,5498,5498,549 Carrying As at December 31, 2016 ($ thousands) Value Fair Value Level 1Level 2Level 3Total Loans and Borrowings: Debt6,295,9746,783,5536,783,5536,783,553 Available for Sale Investments: Available for Sale Investments5,8765,8765,8765,876 Valuation Techniques and Balance Sheet Presentation Debt is predominantly level 2 and valued using quoted market prices or dealer quotes for the identical financial instrument when traded as an asset in an active market. Revolving facilities and term loans with variable interest rates are level 2 and valued using current interest rates, excluding the effect of debt issuance costs. Carrying values in the table exclude swap adjustment. Other financial assets and financial liabilities Management assessed that the fair value of cash and cash equivalents, other current assets, accounts payable, and other current liabilities approximate their carrying amounts due to the short-term maturities of these instruments. Loans receivable and payable from/to related parties are financial assets and liabilities not measured at fair value and can be considered level 2 in the fair value hierarchy. The carrying value at December 31, 2017 of the non-current loans receivable and payable is lower than fair value based on a third party appraisal.

4. Financial risk management The Company's activities expose it to a variety of risks including interest rate risk, foreign currency exchange rate risk, liquidity risk, and credit risk. The Company's overall risk management strategy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on its performance through ongoing operational and finance activities. The Company monitors and manages exposure to such risks, as appropriate, as part of the Group's overall risk management program with the objective of seeking to reduce the potential adverse effects of such risks on the results of its operations and financial position. The following section provides qualitative disclosures on the effects that these risks may have. The quantitative data reported below does not have any predictive value and does not reflect the complexity of the markets or reactions which may result from any changes that are assumed to have taken place. Interest Rate Risk Our exposure to changes in market interest rates relates primarily to our cash and financial liabilities which bear floating interest rates. Our policy is to manage interest cost using a mix of fixed and variable rate debt. We have historically used various techniques to mitigate the risks associated with future changes in interest rates, including entering into interest rate swap agreements. No sensitivity analysis is included as this is not considered material to the financial statements. Foreign Currency Exchange Rate Risk The Company is exposed to transactional foreign exchange risk when it enters into transactions in a currency other than its functional currency. No sensitivity analysis is included as this is not considered material to the financial statements. Liquidity Risk Liquidity risk is the risk of not being able to fulfill present or future obligations if the Company does not have sufficient funds available to meet such obligations. Liquidity risk arises mostly in relation to cash flows generated and used in working capital and from financing activities, particularly by servicing our debt, in terms of both interest and capital, and our payment obligations relating to our ordinary business activities. We believe that the cash which we generate through dividends, together with our committed borrowing capacity, will be sufficient to meet our financial obligations and operating requirements in the foreseeable future. Therefore, we do not believe that we are exposed to a significant concentration of liquidity risk. At December 31, 2017 and December 31, 2016, the Company's total available liquidity was $2.7 billion and $2.4 billion, respectively. The following table summarises the Company's total available liquidity As at December 31 ($ thousands)20172016

5.Investments in subsidiaries As at December 31 IGT On April 7, 2015, in connection with the Subsidiary Merger, each IGT common share (having a par value of $0.00015625 each) was converted into the right to receive (1) $14.3396 in cash without interest and (2) 0.1819 ordinary shares, nominal value $0.10 per share, in the Company. The final per share merger consideration for the IGT shareholders was determined pursuant to the process outlined in the Merger Agreement, which included the calculation of the Gold Share Trading Price of $20.2379. Lottomatica Holding S.r.l. The Company, as at December 31, 2017, fully owned Lottomatica Holding S.r.l., a company incorporated in Italy on October 6, 2014 as a societa a responsabilita limitata. Lottomatica Holding is the Italian holding company received as part of the net assets transferred in connection with the Holdco Merger in 2015. Lottomatica Holding directly owns all Italian subsidiaries previously transferred from GTECH, as part of the Italian reorganisation in anticipation of the Holdco Merger, by way of in-kind contributions or by way of sale and purchase agreements. Others This includes GTECH German Holdings Corporation GmbH, IGT Canada Solutions ULC, and Lottomatica Giochi e Partecipazioni S.r.l., fully owned companies received as part of the net assets transferred in connection with the Holdco Merger. The increase over 2016 was mainly due to a $240.0 million capital contribution to IGT that occurred in October 2017, and the acquisition of Zest Gaming Mexico S.A. and Zest Gaming Espana S.L.. For a full list of Group Companies see Note 26 of the consolidated financial statements.

6.Related party disclosures Loans receivable from related parties (which includes interest receivable shown as current) are as follows As at December 31 ($ thousands)20172016 IGT The non-current loans receivable outstanding as at December 31, 2017 from IGT are $6.1 billion, mainly detailed as follows •A $3,538.7 million loan receivable outstanding bearing interest at 6.5% per annum, with interest receivable in arrears on April 30 each year. The loan, together with all accrued and unpaid interest, is due on or before April 30, 2027; •A $1,600 million loan receivable outstanding bearing interest at 6.5% per annum, with interest receivable in arrears on April 7 each year. The loan, together with all accrued and unpaid interest, is due on or before April 7, 2027; •A $627.2 million loan receivable outstanding bearing interest at 6.5% per annum, with interest receivable in arrears on May 13 each year. The loan, together with all accrued and unpaid interest, is due on or before May 7, 2027; and •A $362.8 million loan receivable outstanding bearing interest at 5.625% per annum, with interest receivable in arrears on April 7 each year. The loan, together with all accrued and unpaid interest, is due on or before April 7, 2020. Lottomatica Holding S.r.l. The loan receivable outstanding as at December 31, 2017 from Lottomatica Holding is $501.3 million (including current portion) and bears interest at 5.1% per annum, with interest receivable in arrears on January 28 each year. The loan, together with all accrued and unpaid interest, is due on or before January 28, 2025.

Lottomatica S.p.A. The non-current loan receivable outstanding as at December 31, 2017 from Lottomatica S.p.A. is $163.4 million and bears interest at 2% per annum, with interest receivable in arrears on July 31 each year. The loan, together with all accrued and unpaid interest, is due on July 31, 2020. Big Easy S.r.l. The non-current loan receivable outstanding as at December 31, 2017 from Big Easy S.r.l. is $24.9 million and bears interest at 2.15% per annum, with interest receivable in arrears on December 27 each year. The loan, together with all accrued and unpaid interest, is due on December 27, 2020. IGT Global Solutions Corporation The current loan receivable outstanding as at December 31, 2017 from IGT Global Solutions Corporation is $370.3 million and bears interest at 3.6% per annum, with interest receivable in arrears on July 31 each year. The loan, together with all accrued and unpaid interest, is due on July 31, 2018. Other current loans receivable outstanding as at December 31, 2017 have maturity dates between February and October 2018 and interest rates ranging between 2% and 7%. Receivables from related parties are as follows As at December 31 ($ thousands)20172016 Receivables from related parties as at December 31, 2017 primarily resulted from •Receivables from IGT, Lottomatica Holding S.r.l. and IGT Global Solutions Corporation for audit and insurance fees recharges; •Receivables from Lottomatica S.p.A. mainly for debt issuance costs originally incurred by the company (as successor by merger of GTECH) being properly apportioned in connection with the splitting between the entities of the related term loan facility; •Receivables from IGT Alderney for cash pooling activity; and •Receivables from various other entities, mainly including Probability and IGT UK Limited, for cash pooling activity.

Loans payable to related parties (which includes interest payable) are as follows As at December 31 ($ thousands)20172016 Non-current IGT Global Services Limited73,69864,775 IGT Canada52,732 IGT International Treasury B.V.152152 IGT Canada Solutions ULC41,588 Lottomatica Holding S.r.l.369,911 126,582476,426 Current IGT Global Services Limited91,25379,699 IGT Canada Solutions ULC37,016 IGT Mexicana de Juegos, S. de R.L. d S.V.22,25023,181 IGT Austria GMBH16,73411,759 IGT (Alderney 4) Limited23,8909,330 IGT (Gibraltar) Limited11,3413,225 Lottomatica S.p.A.312,917 Lottomatica Holding S.r.l.319,511 IGT Canada23,195 IGT International Treasury B.V.13 Various58,014 260,498782,830 Loan payables are primarily to IGT Global Services Limited The outstanding loans payable as at December 31, 2017 to IGT Global Services Limited are valued $165.0 million (including current portion), detailed as follows •A $87.4 million outstanding loan payable (of which $13.7 million current) bearing interest at 5% per annum, with interest payable in arrears on June 30 each year. The loan, together with all accrued and unpaid interest, is due on or before June 30, 2020; and •A $77.6 million current loan payable outstanding bearing interest at 3.230% per annum, with interest payable on or before the maturity date. The loan, together with all accrued and unpaid interest, is due on or before May 9, 2018. IGT Canada The outstanding loan payable as at December 31, 2017 to IGT Canada is valued at $52.7 million and is due on or before December 30, 2020. The loan bears interest at a rate per annum equal to the greatest of the average yield of the Government of Canada 90-day T-bill rates sold during October of the previous year plus January, April and July of the current year (rounded to two decimal places) plus 4%.

IGT Canada Solutions ULC The outstanding loan payable as at December 31, 2017 to IGT Canada Solutions ULC is valued at $37.0 million and bears interest at 4.5% per annum, with interest payable in arrears on or before the maturity date. The loan, together with all accrued and unpaid interest, was due on or before March 3, 2018. Payables to related parties, including guarantee fees, are as follows As at December 31 ($ thousands)20172016 Payables to IGT Global Services Limited, GTECH Sweden Interactive and IGT Gibraltar Limited as at December 31, 2017 resulted from cash pooling activities. Related party income, net, is as follows For the years ended December 31 ($ thousands)20172016 Other income mainly includes audit fees for $11.7 million and insurance fees for $9.2 million recharged to subsidiaries. Other expenses mainly include guarantee fees ($15.6 million) and management fees ($7.1 million) recharges. Dividends were received by Lottomatica Holding ($213.7 million) in January 2017 and by IGT ($250 million) in June 2017. For detailed information on the Remuneration of Key Managerial personnel, see Note 24 of the consolidated financial statements.

8.Share capital and retained earnings Ordinary shares outstanding, issued and fully paid As at December 31 Ord nary shares203,446,572 USD par value per share$0.10 Share cap tal amounts to $20.3 m ll on ($20.2 m ll on at December 31, 2016). Even though some of the net assets transferred to the Company n connect on w th the Holdco Merger n 2015 were not nvestments, merger rel ef appl ed n respect of all of the shares ssued by the Company and therefore no share prem um arose on the transact on. Accord ngly, a merger reserve was recogn sed n 2015 for the d fference between the book values of the net assets recogn sed n the Company and the aggregate nom nal value of the newly ssued shares. G ven that the net assets relat ng to th s merger reserve d d not represent qual fy ng cons derat on ( .e. the reserve was unreal sed), t was determ ned to cap tal se the merger reserve (as such creat ng share prem um reserve) and reduce that cap tal v a a court approved cap tal reduct on n accordance w th the prov s ons of sect on 645 of the Compan es Act 2006. On June 3, 2015, the H gh Court of Just ce, through consent of all cred tors, ordered the reduct on of cap tal and the cancellat on of the Share Prem um account as such creat ng d str butable reserves as a matter of law. Reta ned earn ngs at December 31, 2017, net of the d v dends pa d dur ng the year, amount to $3,480.8 m ll on ($3,605.0 m ll on at December 31, 2016) and represent the d str butable reserve out of wh ch to declare and pay further d v dends. See Shareholders' Equ ty Note 18 of the consol dated f nanc al statements for add t onal nformat on on the d v dends declared and pa d throughout the year.

The s gn f cant components of ncome tax expense are as follows: For the years ended December 31 ($ thousands)20172016 Current tax Current tax on prof t for the year105 W thhold ng tax573559 Total current tax expense 573664 Deferred income tax The tax effects of temporary d fferences and carry forward that g ve r se to net deferred tax assets cons st of the follow ng: For the years ended December 31 ($ thousands)20172016 Tax loss carry forward72,7083,582 Stock compensat on expense5761,245 Net deferred tax assets 73,2844,827 Valuat on Allowance(73,284) 4,827 Reconciliation to deferred tax expense on income statement: Net deferred tax assets at December 31, 2017 Net deferred tax assets at December 31, 20164,827 Deferred income tax expense 4,827 Future tax rate The tax rate for the current year s lower than the pr or year due to changes n the U.K. Corporat on tax rate wh ch decreased from 20% to 19% from Apr l 1, 2017. Changes to the U.K. corporat on tax rates were substant vely enacted as part of f nance b ll 2015 (on October 26, 2015) and F nance B ll 2016 (on September 7, 2016). These nclude reduct ons to the ma n rate to reduce the rate to 19% from Apr l 1, 2017 and to 17% from Apr l 1, 2020. Deferred taxes at the balance sheet date have been measured us ng these enacted tax rates and reflected n these f nanc al statements.