750004--3/1/2010--SCIENTIFIC_GAMES

related topics

{customer, product, revenue}

{acquisition, growth, future}

{debt, indebtedness, cash}

{cost, operation, labor}

{stock, price, operating}

{regulation, government, change}

{product, market, service}

{cost, regulation, environmental}

{condition, economic, financial}

{system, service, information}

{competitive, industry, competition}

{tax, income, asset}

{property, intellectual, protect}

{product, liability, claim}

{operation, international, foreign}

{personnel, key, retain}

We operate in highly competitive industries and our success depends on our ability to effectively compete with numerous domestic and foreign businesses. Unfavorable economic conditions may adversely affect our business and financial condition. We have foreign operations, which subjects us to additional risks. Our business is subject to evolving technology. We are heavily dependent on our ability to renew our long-term contracts with our customers and we could lose substantial revenue and profits if we are unable to renew certain of our contracts. We may not have sufficient cash flows from operating activities, cash on hand and available borrowings under our credit facilities to finance required capital expenditures under new contracts, service our indebtedness and meet our other cash needs. These obligations require a significant amount of cash. Our credit facilities and the indentures governing our senior subordinated notes and our Convertible Debentures impose certain restrictions. Failure to comply with any of these restrictions could result in the acceleration of the maturity of our indebtedness. Were this to occur, we would not have sufficient cash to pay our accelerated indebtedness. The Global Draw Promissory Notes will mature in May and June 2011, and our 6.25% senior subordinated notes due 2012 (the "2004 Notes") will mature in December 2012. The maturity of borrowings under our credit facilities will be accelerated to February 2011 or September 2012, respectively, if certain conditions related to the Global Draw Promissory Notes or 2004 Notes, as applicable, are not satisfied. Our business depends on the protection of our intellectual property and proprietary information. Our business competes on the basis of the security and integrity of our systems and products. Our industry is subject to strict government regulations that may limit our existing operations and have a negative impact on our ability to grow. We may not succeed in realizing the anticipated benefits of our joint ventures and strategic investments and relationships. We may not be able to successfully complete the proposed sale of our racing and venue management businesses. We may be required to recognize additional impairment charges. Our ability to complete future acquisitions of gaming and related businesses and integrate those businesses successfully could limit our future growth. Gaming opponents persist in their efforts to curtail the expansion of legalized gaming, which, if successful, could limit our existing operations. Our revenues fluctuate due to seasonality and timing of equipment sales and, therefore, our periodic operating results are not guarantees of future performance. Our success depends in part on our ability to develop, enhance and/or introduce successful gaming concepts and game content. We are dependent on our suppliers and contract manufacturers, and any failure of these parties to meet our performance and quality standards or requirements could cause us to incur additional costs or lose customers. We may be liable for product defects or other claims relating to our products. We recognize significant earnings from our investment in CLN but we do not control distributions of its cash. CLN's current concession to operate the Gratta e Vinci instant ticket lottery and our contract with CLN to supply CLN instant lottery tickets and other services are scheduled to expire in 2010. Certain holders of our common stock exert significant influence over the Company and may make decisions with which other stockholders may disagree. We are dependent on our employees. We could incur costs in the event of violations of or liabilities under environmental laws. Failure to perform under our lottery contracts may result in litigation, substantial monetary liquidated damages and contract termination. Labor disputes may have an adverse effect on our operations. The price of our common stock has been volatile and may continue to be volatile.

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750004--3/1/2010--SCIENTIFIC_GAMES_CORP