
~~Item 7.~~	~~Major Shareholders and Related Party Transactions~~


A. Item 7.Major Shareholders and Related Party Transactions A.Major Shareholders	~~Major Shareholders~~

At February ~~28, 2019,~~24, 2022, the ~~Parent's~~Parent’s outstanding capital stock consisted of ~~204,210,731~~203,805,647 ordinary shares having a nominal value of $0.10 per share, ~~204,210,731 special voting shares~~205,878,508 Special Voting Shares of $0.000001 each, and 50,000 sterling non-voting shares of £1£1.00 each, held by ~~Elian~~Intertrust Corporate Services ~~(U.K.)~~(UK) Limited. Each ordinary share carries one vote and each special voting share carries 0.9995 votes.

The following table sets forth information with respect to beneficial ownership of the ~~Parent's~~Parent’s ordinary shares by persons known by the Parent to beneficially own 5% or more of voting rights as a result of their ownership of ordinary shares and election to exercise the votes of ~~special voting shares~~Special Voting Shares by placing the associated ordinary shares on the Loyalty Register as of February ~~28, 2019.~~24, 2022.


Name of Beneficial Owner	Number of Ordinary Shares Owned	Percent of Ordinary Shares Owned(1)	Number of Ordinary Shares on the Loyalty Register	Percent of Total Voting Power(1)
De Agostini S.p.A.	103,422,324	50.75%	85,422,324	65.29%

Name of Beneficial Owner
Number of
Ordinary
Shares Owned
Percent of
Ordinary
Shares Owned
Number of Ordinary Shares on the Loyalty Register
Percent of Total
Voting Power
De Agostini S.p.A. 103,422,324
50.64 % 103,422,324
67.23 %
(1) Excluding treasury shares.

At February ~~28, 2019,~~24, 2022, B&D Holding ~~di Marco Drago e C. S.a.p.a. ("~~S.p.A. (“B&D ~~Holding"~~Holding”) owned ~~72.68%~~61.24% of De Agostini. Marco Drago is the chairperson and a director of B&D Holding, and Lorenzo Pellicioli is a director of B&D Holding. B&D Holding is in turn owned by members of the Boroli and Drago families.

Significant Changes in Ownership

Prior to January 1, 2018, De Agostini's wholly-owned subsidiary, DeA Partecipazioni S.p.A., held 10,073,006 ordinary shares. Effective January 1, 2018, DeA Partecipazioni S.p.A. merged into De Agostini, resulting in the transfer of ownership of 10,073,006 ordinary shares from DeA Partecipazioni S.p.A. to De Agostini.

On May 22, 2018, De Agostini entered into a variable forward transaction (the ~~"Variable~~“Variable Forward ~~Transaction"~~Transaction”) with Credit Suisse Securities, Sociedad de Valores S.A., as assignee of Credit Suisse International ("(“Credit ~~Suisse"~~Suisse”) relating to ~~18.0~~18 million of the ~~Company's~~Company’s ordinary shares owned by De Agostini (the ~~"Variable~~“Variable Forward Transaction ~~Shares"~~Shares”). As part of the Variable Forward Transaction, to hedge its exposure Credit Suisse or its affiliates borrowed approximately 13.2 million of the ~~Company's~~Company’s ordinary shares from third-party stock lenders and subsequently sold such ordinary shares in an underwritten public offering through Credit Suisse Securities (USA) LLC, acting as the underwriter, pursuant to an automatically effective registration statement on Form F-3 (including a base prospectus) filed by the Company with the SEC on May 21, 2018.

The Variable Forward Transaction does not currently impact De Agostini's ownership and voting rights with respect to the Variable Forward Transaction Shares, though if De Agostini pledges any of the Variable Forward Transaction Shares to Credit Suisse as part of the Variable Forward Transaction at a future date, the Variable Forward Transaction Shares will be removed from the Loyalty Register. Credit Suisse will also have, in the event of a De Agostini default or similar enforcement event pursuant to the Variable Forward Transaction, the right to vote or direct the vote and dispose of or direct the disposition of the Variable Forward Transaction Shares pledged by De Agostini, but not to direct the votes of the related Special Voting Shares unless they subsequently elect to place such shares on the Loyalty Register in accordance with the terms of the Loyalty Plan.

De Agostini elected, effective as of May 25, 2018, to place all its owned ordinary shares, including the Variable Forward Transaction Shares, on the Loyalty Register, thereby gaining the power to exercise the votes of the related Special Voting Shares. In April 2020, De Agostini pledged the Variable Forward Transaction Shares to Credit Suisse as part of the Variable Forward Transaction and as a result removed the Variable Forward Transaction Shares from the Loyalty Register. As of February ~~28, 2019,~~24, 2022, no other shareholder has elected to place any ordinary shares on the Loyalty Register. For more information regarding the Special Voting Shares and the Loyalty Register, please see “Item 10.BMemorandum and Articles of ~~Association—~~Association—Loyalty Plan.”

Credit Suisse has, in the event of a De Agostini default or similar enforcement event under the pledge, the right to vote or direct the vote and dispose of or direct the disposition of the Variable Forward Transaction Shares, but not to direct the votes of the related Special Voting Shares unless Credit Suisse subsequently elects to place such shares on the Loyalty Register in accordance with the terms of the Loyalty Plan.

Voting Rights

De Agostini controls the Parent but does not have different voting rights from the ~~Parent's~~Parent’s other shareholders, aside from the election to exercise the votes of the ~~special voting shares~~Special Voting Shares related to the shares owned by De Agostini. However, through its voting rights, De Agostini has the ability to control the Company and significantly influence the decisions submitted to a vote of the ~~Parent's~~Parent’s shareholders, including approval of annual dividends, the election and removal of directors, mergers or other business combinations, the acquisition or disposition of assets, and issuances of equity, and the incurrence of indebtedness.

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Additional Share Information

The ~~Parent's~~Parent’s ordinary shares are listed and can be traded on the NYSE in U.S. dollars. The ~~Parent's~~Parent’s ordinary shares may be held in the following two ways:

•beneficial interests in the ~~Parent's~~Parent’s ordinary shares that are traded on the NYSE are held through the book-entry system provided by The Depository Trust Company (“DTC”) and are registered in the register of shareholders in the name of Cede & Co., as DTC’s nominee; and

•in certificated ~~form~~form.

All of the ~~Parent's~~Parent’s ordinary shares are held on the U.S. registry. ~~As at~~At February ~~28, 2019,~~24, 2022, there were ~~110~~168 record holders in the U.S. holding approximately ~~49.35%~~49.25% of the ~~Parent's~~Parent’s outstanding ordinary shares, including ordinary shares held by Cede & Co., the nominee for DTC. Ordinary shares held through DTC may be beneficially owned by holders within or outside of the U.S. The shares held by De Agostini are beneficially owned by an entity organized under the laws of Italy. At February ~~28, 2019,~~24, 2022, there were ~~204,210,731 special voting shares~~205,878,508 Special Voting Shares of the Parent outstanding, which are all held by Computershare Company Nominees Limited in its capacity as the nominee appointed by the Parent to hold the ~~special voting shares~~Special Voting Shares under the terms of the Parent’s Loyalty Plan.

The ~~Parent's special voting shares~~Parent’s Special Voting Shares are not listed on the NYSE and will be transferable only in very limited circumstances. For more information regarding the Special Voting Shares, please see “Item 10.B Memorandum and Articles of ~~Association—~~Association—Loyalty Plan.”


B.	~~Related Party Transactions~~

B.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~~Parent’s Board of Directors, executives with authority for planning, directing, and controlling the activities of the Company and such ~~Directors'~~Directors’ and ~~executives'~~executives’ close family members are also considered related parties.

The Company is majority-owned by De Agostini. Amounts receivable from De Agostini and subsidiaries of De Agostini (the “De Agostini Group”) are non-interest bearing. Transactions with the De Agostini Group include payments for support services provided and office space rented pursuant to a lease entered into prior to the formation of the Company. In addition, certain of the Company’s Italian subsidiaries have a tax unit agreement, and in some cases, a value-added tax agreement, with De Agostini pursuant to which De Agostini consolidates certain Italian subsidiaries of De Agostini for the collection and payment of taxes to the Italian tax authority. Tax-related receivables from De Agostini were $4 million and $0 million at December 31, 2021 and 2020, respectively. Tax-related payables to De Agostini were $3 million and $19 million at December 31, 2021 and 2020, respectively.

The Company generally carries out transactions with related parties on commercial terms that are normal in their respective markets, considering the characteristics of the goods or services involved. For a further discussion of transactions with related parties, including transactions with De Agostini and companies in which we have strategic investments that develop software, hardware, and other technologies or provide services supporting the Company’s technologies, please see “Notes to the Consolidated Financial Statements - 26. 24.Related Party ~~Transactions.”~~Transactions” included in Item 18. “Financial Statements”.


C.	~~Interests of Experts and Counsel~~

C.Interests of Experts and Counsel

Not applicable.

Item 8.Financial Information


A.	~~Consolidated Statements and Other Financial Information~~

A.Consolidated Statements and Other Financial Information

See “Item 18. Financial Statements” for the ~~Company's~~Company’s Consolidated Financial Statements including the Notes thereto and ~~reports~~report of its independent registered accounting firm. The Company has not yet implemented a formal policy on dividend distributions.


B.	~~Significant Changes~~

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B.Significant Changes

~~Not applicable.~~No significant changes have occurred since December 31, 2021, the date of the financial statements included in this annual report on Form 20-F, other than those referenced in Notes to the Consolidated Financial Statements - 15. Debt, 19. Shareholders’ Equity and25.Subsequent EventswithinItem 18. Financial Statements.

Item 9.The Offer and Listing


A. A.Offer and Listing Details	~~Offer and Listing Details~~

The ~~Parent's~~Parent’s ordinary shares are listed on the NYSE under the symbol “IGT.”


B. B.Plan of Distribution	~~Plan of Distribution~~

Not applicable.

C.Markets


C.	~~Markets~~

The ~~Parent's~~Parent’s outstanding ordinary shares are listed on the NYSE under the symbol “IGT.”


D.	~~Selling Shareholders~~

~~Not applicable.~~D.Selling Shareholders


E.	~~Dilution~~

~~Not applicable.~~


F.	~~Expenses of the Issue~~

Not applicable.

E.Dilution


~~Item10.~~	~~Additional Information~~

Not applicable.

F.Expenses of the Issue


A.	~~Share Capital~~

Not applicable.

Item10.Additional Information

A.Share Capital

Not applicable.


B.	~~Memorandum and Articles of Association~~

B. Memorandum and Articles of Association

The Parent is a public limited company registered in England and Wales under company number 09127533. Its objects are unrestricted, in line with the default position under the ~~CA 2006.~~Companies Act 2006, as amended. The following is a summary of certain provisions of the Articles and of the applicable laws of England. The following is a summary and, therefore, does not contain full details of the Articles, which are attached as Exhibit 1.1 to this annual report on Form 20-F.

~~Board~~The Parent’s board of directors (the “Board”)

Directors’ interests

Except as otherwise provided in the Articles, a director may not vote on or be counted in the quorum in relation to a resolution of the directors or committee of the directors concerning a matter in which he has a direct or indirect interest which is, to his knowledge, a material interest (otherwise than by virtue of his interest in shares or debentures or other securities of or otherwise in or through the Parent), ~~including with respect to compensation,~~ but this prohibition does not apply to any interest arising only because a resolution concerns any of the following matters:

•the giving of a guarantee, security, or indemnity in respect of money lent or obligations incurred by him or any other person at the request of or for the benefit of the Parent or any of its subsidiary undertakings;

•the giving of a guarantee, security, or indemnity in respect of a debt or obligation of the Parent or any of its subsidiary undertakings for which the director has assumed responsibility in whole or in part, either alone or jointly with others, under a guarantee or indemnity or by the giving of security;

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•a transaction or arrangement concerning an offer of shares, debentures, or other securities of the Parent or any of its subsidiary undertakings for subscription or purchase, in which offer he is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which he is to participate;

•a transaction or arrangement to which the Parent is or is to be a party concerning another company (including a subsidiary undertaking of the Parent) in which he or any person connected with him is interested (directly or indirectly) whether as an officer, shareholder, creditor, or otherwise (a “relevant company”), if he and any persons connected with him do not to his knowledge hold an interest in shares (as that term is used in ~~sections~~Sections 820 to 825 of the CA 2006) representing 1% or more of either any class of the equity share capital (excluding any share of that class held as treasury shares) in the relevant company or of the voting rights available to members of the relevant company;

•a transaction or arrangement for the benefit of the employees of the Parent or any of its subsidiary undertakings (including any pension fund or retirement, death or disability scheme) which does not award him a privilege or benefit not generally awarded to the employees to whom it relates; or

•a transaction or arrangement concerning the purchase or maintenance of any insurance policy for the benefit of directors or for the benefit of persons including directors.

Directors’ borrowing powers

The directors may exercise all the powers of the Parent to borrow money and to mortgage or charge all or part of the undertaking, property, and assets (present or future) and uncalled capital of the Parent and, subject to the CA 2006, to issue debentures and other securities, whether outright or as collateral security for a debt, liability, or obligation of the Parent or of a third party.

Directors’ shareholding requirements

A director need not hold shares in the Parent to qualify to serve as a director.

Age limit

There is no age limit applicable to directors in the Articles.

Compliance with NYSE Rules

For as long as the Parent’s ordinary shares are listed on the NYSE, the Parent will comply with all NYSE corporate governance standards set forth in Section ~~303A~~3 of the NYSE Listed Company Manual applicable to non-controlled domestic U.S. issuers, regardless of whether the Parent is a foreign private issuer.

Classes of shares

The Parent has three classes of shares in issue. This includes ordinary shares of U.S. $0.10 each; ~~special voting shares~~Special Voting Shares of U.S. $0.000001 ~~each (the “Special Voting Shares”);~~each; and sterling non-voting shares of £1.00 each (the “Sterling Non-Voting Shares”).

Dividends and distributions

Subject to the CA 2006, the ~~Parent's~~Parent’s shareholders may declare a dividend on the ~~Parent's~~Parent’s ordinary shares by ordinary resolution, and the Board may decide to pay an interim dividend to holders of the ~~Parent's~~Parent’s ordinary shares in accordance with their respective rights and interests in the Parent, and may fix the time for payment of such dividend. Under English law, dividends may only be paid out of distributable reserves, defined as accumulated realized profits (so far as not previously utilized by distribution or ~~capitalization~~capitalization) less accumulated realized losses ~~to the extent~~(so far as not previously written off in a reduction or reorganization of capital duly ~~made,~~made), and not out of share capital, which includes the share premium account.

The Special Voting Shares and Sterling Non-Voting Shares do not entitle their holders to dividends.

If 12 years have passed from the date on which a dividend or other sum from the Parent became due for payment and the distribution recipient has not claimed it, the distribution recipient is no longer entitled to that dividend or other sum and it ceases to remain owing by the Parent.

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The Articles also permit a scrip dividend scheme under which the directors may, with the prior authority of an ordinary resolution of the Parent, allot to those holders of a particular class of shares who have elected to receive them further shares of that class or ordinary shares in either case credited as fully paid instead of cash in respect of all or part of a dividend or dividends specified by the resolution.

Voting rights

Subject to any rights or restrictions as to voting attached to any class of shares and subject to disenfranchisement in the event of non-payment of any call or other sum due and payable in respect of any shares not fully paid, the voting rights of shareholders of the Parent in a general meeting are as follows:

1.On a show of hands,

a.the shareholder of the Parent who (being an individual) is present in person or (being a corporation) is present by a duly authorized corporate representative at a general meeting of the Parent will have one vote; and

b.every person present who has been appointed by a shareholder as a proxy will have one vote, except where:

i.that proxy has been appointed by more than one shareholder entitled to vote on the resolution; and

ii.the proxy has been instructed:

A.by one or more of those shareholders to vote for the resolution and by one or more of those shareholders to vote against the resolution; or

B. by one or more of those shareholders to vote in the same way on the resolution (whether for or against) and one or more of those shareholders has permitted the proxy discretion as to how to vote,

in which case, the proxy has one vote for and one vote against the resolution.

2.On a poll taken at a meeting, every ~~qualifying~~ shareholder present and entitled to vote on the resolution has one vote for every ordinary share of the Parent of which he, she, or it is the holder, and 0.9995 votes for every Special Voting Share for which he, she, or it is entitled under the terms of the Parent’s loyalty voting structure to direct the exercise of the vote.

Under the Articles, a poll on a resolution may be demanded by the chairperson, the directors, five or more people having the right to vote on the resolution, or a shareholder or shareholders (or their duly appointed proxies) having not less than 10% of either the total voting rights or the total paid up share capital. Once a resolution is declared, such persons may demand the poll both in advance of, and during, a general meeting, either before or immediately after a show of hands on such resolution.

In the case of joint holders, only the vote of the senior holder who votes (or any proxy duly appointed by him) may be counted by the Parent.

The necessary quorum for a general shareholder meeting is the shareholders who together represent at least a majority of the voting rights of all the shareholders entitled to vote at the meeting, present in person or by proxy, save that if the Parent only has one shareholder entitled to attend and vote at the general meeting, one shareholder present in person or by proxy at the meeting and entitled to vote is a quorum.

In case of a meeting requisitioned by the shareholders, where the quorum is not met the meeting is dissolved. In case of other meetings, where the quorum is not met, the meeting is adjourned. If a meeting is adjourned for lack of quorum, the quorum of the adjourned meeting will be one shareholder present in person or by proxy.

The Sterling Non-Voting Shares carry no voting rights (save where required by law).

Winding up

On a return of capital of the Parent on a winding up or otherwise, the holders of the ~~Parent's~~Parent’s ordinary shares (and any other shares outstanding at the relevant time which rank equally with such shares) will share equally, on a share for share basis, in the Parent’s assets available for distribution, ~~save that:~~after paying:

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•the holders of the Special Voting Shares who will be entitled to receive out of the assets of the Parent available for distribution to its shareholders the sum of, in aggregate, U.S. $1.00 but shall not be entitled to any further participation in the assets of the Parent; and

•the holders of the Sterling Non-Voting Shares who will be entitled to receive out of the assets of the Parent available for distribution to its shareholders the sum of, in aggregate, £1.00 but shall not be entitled to any further participation in the assets of the ~~Parent,~~

~~but in no case will any of such holders be entitled to any further participation in the assets of the~~ Parent.

Redemption provisions

The ~~Parent's~~Parent’s ordinary shares are not redeemable.

The Special Voting Shares may be redeemed by the Parent for nil consideration in certain circumstances (as set out in the Articles).

The Sterling Non-Voting Shares may be redeemed by the Parent for nil consideration at any time.

Sinking fund provisions

None of the ~~Parent's~~Parent’s shares are subject to any sinking fund provision under the Articles or as a matter of English law.

Liability to further calls

No holder of any share in the Parent is liable to make additional contributions of capital in respect of its shares.

Discriminating provisions

There are no provisions discriminating against a shareholder because of his or her ownership of a particular number of shares.

Variation of class rights

The Articles treat the Parent’s ordinary shares and the Special Voting Shares as a single class for the purposes of voting. Any special rights attached to any shares in the ~~Parent's~~Parent’s capital may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated, either while the Parent is a going concern or during or in contemplation of a winding up, with the consent in writing of those entitled to attend and vote at general meetings of the Parent representing ~~75.0%~~75% of the voting rights attaching to the ~~Parent's~~Parent’s ordinary shares and the Special Voting Shares, in aggregate, which may be exercised at such meetings, or with the sanction of 75% of those votes attaching to the ~~Parent's~~Parent’s ordinary shares and the Special Voting Shares, in aggregate, cast on a special resolution proposed at a separate general meeting of all those entitled to attend and vote at the ~~Parent's~~Parent’s general meetings, but not otherwise. The CA 2006 allows an English company to vary class rights of shares by a resolution of ~~75.0%~~75% of the shareholders of the class in question. ~~The Articles treat the Parent's ordinary shares and the Special Voting Shares as a single class for the purposes of voting.~~

A resolution to vary any class rights relating to the giving, variation, revocation or renewal of any authority of the directors to allot shares or relating to a reduction of the Parent’s capital may only be varied or abrogated in accordance with the CA 2006 but not otherwise.

The rights attached to a class of shares are not, unless otherwise expressly provided for in the rights attaching to those shares, deemed to be varied by the creation, allotment, or issue of further shares ranking pari passu with or subsequent to them or by the purchase or redemption by the Parent of its own shares in accordance with the CA 2006.

General meetings and notices

The Board has the power to call a general meeting of shareholders at any time. The Board shall determine whether a general meeting (including an annual general meeting) is to be held as a physical general meeting or an electronic general meeting (or a combination thereof). In addition, the Board must convene such a meeting if it has received requests to do so from shareholders representing at least 5% of the ~~paid up~~paid-up share capital of the Parent as carries voting rights at general meetings in accordance with ~~section~~Section 303 of the CA 2006.

An annual general meeting must be called by not less than 21 clear days’ notice (i.e., excluding the date of receipt or deemed receipt of the notice and the date of the meeting itself). All other general meetings will be called by not less than 14 clear days’

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notice. A general meeting may be called by shorter notice if it is agreed to by a majority in number of the shareholders having the

right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving that right. At least seven clear days’ notice is required for any meeting adjourned for 28 days or more or for an indefinite period.

The notice of a general meeting will be given to the shareholders (other than any who, under the provisions of the Articles or the terms of allotment or issue of shares, are not entitled to receive notice), to the Board, to the beneficial owners nominated to enjoy information rights under the CA 2006, and to the auditors. The shareholders entitled to receive notice of and attend a general meeting are those on the share register at the close of business on a day determined by the directors. Under English law, the Parent is required to hold an annual general meeting within six months from the day following the end of its fiscal year and, subject to the foregoing, the meeting may be held at a time and place (whether physical or electronic or a combination thereof) determined by the Board whether within or outside of the U.K.

The notice of general meeting must specify a time (which must not be more than 48 hours, excluding any part of a day that is not a working day, before the time fixed for the meeting) by which a person must be entered on the share register in order to have the right to attend or vote at the meeting. Only such persons or their duly appointed proxies have the right to attend and vote at the meeting of shareholders.

Limitations on rights to own shares

There are no limitations imposed by the Articles or the applicable laws of England on the rights to own shares, including the right of non-residents or foreign persons to hold or vote the ~~Parent's~~Parent’s shares, other than limitations that would generally apply to all shareholders.

Change of control

There is no specific provision in the Articles that directly would have an effect of delaying, deferring, or preventing a change in control of the Parent and that would operate only with respect to a merger, acquisition, or corporate restructuring involving the Parent or any of its subsidiaries. However, the loyalty voting structure may make it more difficult for a third party to acquire, or attempt to acquire, control of the Parent. As a result of the loyalty voting structure, it is possible that a relatively large portion of the voting rights of the Parent could be concentrated in a relatively small number of holders who would have significant influence over the Parent. Such shareholders participating in the loyalty voting structure could reduce the likelihood of change of control transactions that may otherwise benefit holders of the ~~Parent's~~Parent’s ordinary shares. For a discussion of this risk, see “Item 33. Key Information - D. Risk Factors."”

Disclosure of ownership interests in shares

Under ~~article 59 of~~ the Articles, shareholders must comply with the notification obligations to the Parent contained in Chapter 5 (Vote Holder and Issuer Notification Rules) of the Disclosure Guidance and Transparency Rules (“DTR”) (including, without limitation, the provisions of DTR 5.1.2) as if the Parent were an issuer whose home member state is in the United Kingdom, save that the obligation arises if the percentage of voting rights reaches, exceeds, or falls below 1% and each one percent threshold thereafter (up or down) up to 100%. In effect, this means that a shareholder must notify the Parent if the percentage of voting rights in the Parent it holds reaches 1% and crosses any one percent threshold thereafter (up or down).

Section 793 of the CA 2006 gives the Parent the power to require persons whom it knows have, or whom it has reasonable cause to believe have, or within the previous three years have had, any ownership interest in any shares of the Parent to disclose specified information regarding those shares. Failure to provide the information requested within the prescribed period (or knowingly or recklessly providing false information) after the date the notice is sent can result in criminal or civil sanctions being imposed against the person in default.

Under ~~article 60 of~~ the Articles, if any shareholder, or any other person appearing to be interested in the ~~Parent's~~Parent’s shares held by such shareholder, fails to give the Parent the information required by a ~~section~~Section 793 notice, then the Board may withdraw voting rights and ~~certain other rights,~~ place restrictions on the rights to receive dividends, and transfer of such shares (including any shares allotted or issued after the date of the Section 793 notice in respect of those shares).

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Changes in share capital

The Articles authorize the Company to allot (with or without conferring rights of renunciation), issue, grant options over or otherwise deal with or dispose of shares in the capital of the Company and to grant rights to subscribe for, or to convert any security into, shares in the capital of the Company to such persons, at such times and upon such terms as the directors may decide, provided that no share may be issued at a discount. Pursuant to a shareholder resolution passed on May 11, 2021, for a period expiring (unless previously revoked, varied or renewed) at the end of the next annual general meeting of the Company or, if sooner, on August 10, 2022, directors are authorized to:

(i) allot ordinary shares in the Parent, or to grant rights to subscribe for or to convert or exchange any security into shares in the Parent, up to ~~five years from~~an aggregate nominal amount (i.e., par value) of U.S. $6,828,552.20 and up to a further aggregate nominal amount of $6,828,552.20 where the ~~date~~allotment is in connection with an offer by way of a rights issue;

(ii) allot Special Voting Shares and to grant rights to subscribe for, or to convert any security into, Special Voting Shares, up to a maximum aggregate nominal amount of $136.60; and

(iii) exclude pre-emption rights: first, in relation to offers of equity securities by way of rights issue; second, in relation to the allotment of equity securities for cash up to an aggregate nominal amount (i.e., par value) of U.S. $1,024,282.90; and third, in relation to an acquisition or other capital investment up to an aggregate nominal amount (i.e., par value) of U.S. $1,024,282.90.

These provisions are more restrictive than required under English law which does not prescribe a limit for the maximum amounts for allotment of shares or exclusion of pre-emption rights.

Pursuant to a shareholder resolution passed on May 11, 2021, for a period expiring (unless previously revoked, varied or renewed) at the end of the ~~shareholder resolution granting them authority (which resolution was passed~~next annual general meeting of the Company or, if sooner, on ~~March 13, 2015),~~November 10, 2022, the Parent is authorized to purchase its own ordinary shares ~~of any class,~~ on the terms of ~~any buyback contract~~the share repurchase contracts approved by the shareholders, ~~(or otherwise as may be permitted by the CA 2006),~~ provided that:

1.(i)the maximum aggregate number of the ~~Parent's~~Parent’s ordinary shares authorized to be purchased equals ~~20%~~20,485,656, representing 10% of the total then issued ordinary ~~shares~~shares;

(ii) the minimum price (exclusive of expenses) which may be paid by the ~~relevant class on April 7, 2015 (subject to adjustments~~Company for ~~consolidation or division);~~each ordinary share shall be U.S. $0.10; and

2.(iii)the maximum price ~~that~~(exclusive of expenses) which may be paid to purchase an ordinary share of the Parent is 105% of the average market value of an ordinary share for the five business days prior to the day the purchase is made (subject to any further price restrictions contained in any ~~buyback~~share repurchase contract);.

3.the maximum aggregate number of Special Voting Shares authorized to be purchased will equal 20% of the total issued Special Voting Shares of the relevant class on April 7, 2015 (subject to adjustments for consolidation or division); and

4.~~the maximum price that may be paid to purchase a Special Voting Share is its nominal value.~~

These provisions are more restrictive than required under English ~~law; an English company is~~law which does not ~~required to set limits in its articles on~~prescribe a limit for the maximum aggregate number or price paid for ~~the~~an "off market" repurchase of ~~its~~ shares.

The Articles authorize the directors, for a period of up to five years from the date of the shareholder resolution granting them authority (which resolution was passed on March 13, 2015), to allot shares in the Parent, or to grant rights to subscribe for or to convert or exchange any security into shares in the Parent, up to an aggregate nominal amount (i.e., par value) of U.S. $185,000,000.

The Articles authorize the directors, for a period of up to five years from the date of the shareholder resolution granting them authority (which resolution was passed on March 13, 2015), to exclude pre-emption rights in respect of such issuances up to an aggregate nominal amount (i.e., par value) of U.S. $185,000,000.

These provisions are more restrictive than required under English law; an English company is not required to set limits in its articles on the maximum amounts for allotment of shares or exclusion of pre-emption rights.

Loyalty Plan

Scope

The Parent has implemented a ~~loyalty plan (the “Loyalty Plan”),~~Loyalty Plan, the purpose of which is to reward long-term ownership of the ~~Parent's~~Parent’s ordinary shares and promote stability of the ~~Parent's~~Parent’s shareholder base by granting long-term shareholders, subject to certain terms and conditions, with the equivalent of 1.9995 votes for each ordinary share that they hold. The Loyalty Plan is governed by the provisions of the Articles and the Loyalty Plan Terms and Conditions from time to time adopted by the Board, a copy of which is available on the ~~Company's~~Company’s website, together with some Frequently Asked Questions.

Characteristics of Special Voting Shares

Each Special Voting Share carries 0.9995 votes. 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 (save upon a resolution in respect of any proposed termination of the Loyalty Plan).

The Special Voting Shares have only minimal economic entitlements. Such economic entitlements are designed to comply with English law but are immaterial for investors.

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Issue

The number of Special Voting Shares on issue equals the number of ordinary shares on issue. A nominee appointed by the Parent (the “Nominee”), which is currently Computershare Company Nominees Limited, holds the Special Voting Shares on behalf of the shareholders of the Parent as a whole, and will exercise the voting rights attached to those shares in accordance with the Articles.

Participation in the Loyalty Plan

In order to become entitled to elect to participate in the Loyalty Plan, a person must maintain ownership in accordance with the Loyalty Plan for a continuous period of three years or more (an “Eligible Person”).

An Eligible Person within the Loyalty Plan Terms and Conditions may elect to participate in the Loyalty Plan by submitting a validly completed and signed election form (the “Election Form”) and, if applicable, the requisite custodial documentation, to the Parent’s designated agent (the “Agent”). The Election Form is available on the ~~Company's~~Company’s website. Upon receipt of a valid Election

Form and, if applicable, custodial documentation, the Agent will register the relevant ordinary shares on a separate register (the “Loyalty Register”). In order for an Eligible Person’s ordinary shares to remain on the Loyalty Register, they may not be sold, disposed of, transferred, pledged or subjected to any lien, fixed or floating charge or other encumbrance, except in very limited circumstances.

Voting arrangements

The Nominee will exercise the votes attaching to the Special Voting Shares held by it from time to time at a general meeting or a class meeting: (a) in respect of any Special Voting Shares associated with ordinary shares held by an Eligible Person, in the same manner as the Eligible Person exercises the votes attaching to those IGT PLC ordinary shares; and (b) in respect of all other Special Voting Shares, in the same percentage as the outcome of the vote of any general meeting (taking into account any votes exercised pursuant to (a) above).

The proxy or voting instruction form in respect of an Eligible Person’s ordinary shares will contain an instruction and authorization in favor of the Nominee to exercise the votes attaching to the Special Voting Shares associated with those ordinary shares in the same manner as that Eligible Person exercises the votes attaching to those ordinary shares.

Transfer or withdrawal

If, at any time and for any reason, one or more ordinary shares are de-registered from the Loyalty Register, or any ordinary shares held by an Eligible Person on the Loyalty Register are sold, disposed of, transferred (other than with the benefit of a waiver in respect of certain permitted transfers), pledged or subjected to any lien, fixed or floating charge or other encumbrance, the Special Voting Shares associated with those ordinary shares will cease to confer on the Eligible Person any voting rights (or any other rights) in connection with those Special Voting Shares and such person will cease to be an Eligible Person in respect of those Special Voting Shares.

A shareholder may request the de-registration of their ordinary shares from the Loyalty Register at any time by submitting a validly completed Withdrawal Form to the Agent. The Agent will release the ordinary shares from the Loyalty Register within three business days thereafter. Upon de-registration from the Loyalty Register, such ordinary shares will be freely transferable. From the date on which the Withdrawal Form is processed by the Agent, the relevant shareholder will be considered to have waived their rights in respect of the relevant Special Voting Shares.

Termination of the Plan

The Loyalty Plan may be terminated at any time with immediate effect by a resolution passed on a poll taken at a general meeting with the approval of members representing 75% or more of the total voting rights attaching to the ordinary shares of members who, being entitled to vote on that resolution, do so in person or by proxy. For the avoidance of doubt, the votes attaching to the Special Voting Shares will not be exercisable upon such resolution.

Upon termination of the Loyalty Plan, the directors may elect to redeem or repurchase the Special Voting Shares from the Nominee for nil consideration or ~~to reclassify~~cancel them, or convert the Special Voting Share into deferred shares carrying no voting rights and no economic rights (or any other rights), save that on a return of capital or a winding up, the holder of the deferred shares shall be entitled to, in aggregate, $1.00.

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Transfer

The Special Voting Shares may not be transferred, except in exceptional circumstances, e.g., for transfers between Loyalty Plan nominees.

Repurchase or redemption

Special Voting Shares may only be purchased or redeemed by the Parent in limited circumstances, including to reduce the number of Special Voting Shares held by the Nominee in order to align the aggregate number of ordinary shares and Special Voting Shares in issue from time to time or upon termination of the Loyalty ~~Plan or pursuant to an off-market purchase arrangement.~~Plan. Special Voting Shares may be redeemed or repurchased for nil ~~consideration~~consideration.

C.Material Contracts

Share Sale and ~~repurchased~~Purchase Agreement with PostePay S.p.A. – Patrimonio Destinato IMEL

On February 25, 2022, the Parent’s wholly-owned subsidiary, IGT Lottery S.p.A. entered into a share sale and purchase agreement to sell 100% of the share capital of Lis Holding S.p.A., a wholly-owned subsidiary of IGT Lottery S.p.A. that conducts the Company’s Italian commercial services business, to PostePay S.p.A. – Patrimonio Destinato IMEL, an entity of the Italian postal service provider group, for ~~(depending~~a purchase price of €700 million. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close during the third quarter of 2022.

Share Sale and Purchase Agreement with Gamenet Group S.p.A.

On December 7, 2020, the Parent’s wholly-owned subsidiary, IGT Lottery S.p.A. (formerly Lottomatica Holding S.r.l.), entered into a share sale and purchase agreement with Gamenet Group S.p.A. Pursuant to the share sale and purchase agreement, and subject to the terms and conditions therein, Lottomatica agreed to sell 100% of the share capital of Lottomatica Videolot Rete S.p.A. and Lottomatica Scommesse S.r.l., which conducted the IGT group's Italian B2C gaming machine, sports betting, and digital gaming businesses, to Gamenet Group S.p.A, a subsidiary of funds managed by an affiliate of Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”) for a cash sale price of €950 million, €725 million of which was paid at closing, €100 million of which was paid on August 5, 2021, and the ~~circumstances) nil consideration or their nominal value.~~remaining €125 million of which is payable on September 30, 2022. The remaining payment is not subject to any conditions other than closing and is secured by an equity commitment letter from Apollo-managed funds.

C.~~Material Contracts~~

Observer Agreement with De Agostini

On May 16, 2018, the ~~Parent's~~Parent’s directors approved anthe observer agreement (the “Observer Agreement”) between De Agostini and the Company permitting De Agostini to appoint an observer to attend meetings of the ~~Parent's~~Parent’s directors. On ~~May 17, 2018,~~November 15, 2021, the Observer Agreement was renewed for a new two-year term and Paolo Ceretti, a former director of the Parent, acknowledged and agreed to his renewed appointment by De Agostini as an observer pursuant to the terms of the Observer Agreement. ~~The~~Unless renewed, the Observer Agreement ~~expires~~is set to expire following the meeting of the ~~Parent's~~Parent’s directors at which the financial results for the third quarter of ~~2019~~2023 are reviewed.

Agreements Related to the Italian Lotto License

In March 2016, the Parent, through its subsidiary IGT Lottery S.p.A. (formerly Lottomatica Holding S.r.l.), Italian Gaming Holding a.s. ~~("IGH")~~, Arianna 2001, and Novomatic Italia (the ~~"Consortium"~~“Consortium”) entered into a consortium agreement (the ~~"Consortium Agreement"~~“Consortium Agreement”) to bid on the Italian Gioco del Lotto license (the “Lotto License”). On May 16, 2016, the Consortium was awarded management of the Lotto License for a nine-year term. Under the terms of the Consortium Agreement, ~~Lottomatica~~IGT Lottery S.p.A. is the principal operating partner to fulfill the requirements of the Lotto License. According to the bid procedure and Consortium Agreement, a joint venture company called Lottoitalia s.r.l ~~("Lottoitalia"~~(“Lottoitalia”) has been established with ~~Lottomatica~~IGT Lottery S.p.A. having 61.5% equity ownership interest, and the remainder of the equity ownership shared among the other three Consortium members. For a further discussion of the Consortium Agreement's terms, please see ~~"Notes~~“Notes to the Consolidated Financial Statements—~~19. Non-Controlling Interests."~~20. Variable Interest Entities” included in Item 18. “Financial Statements”.

~~Illinois Contract Letter Agreement~~

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Italian Scratch & Win License

~~Commencing in July 2011, the Company provided lottery management services in Illinois through Northstar Lottery Group, LLC (“Northstar”), a consortium in which a subsidiary of~~

In December 2017, the Parent, through its subsidiary Lotterie Nazionali S.r.l. (“LN”) accepted a contract extension of nine years for the Italian Scratch & Win license. The Italian Scratch & Win license is managed exclusively by LN, a joint venture owned 64% by IGT Global Solutions Corporation ("IGT Global") holds an 80% controlling interest. IGT Global provided certain hardware, equipment, software, and support services to Northstar under a supply agreement (the "IGT Supply Agreement"). On December 9, 2014, the Illinois Department of Lottery ~~and Northstar entered into an agreement (the “Termination Agreement”~~S.p.A. (formerly Lottomatica Holding S.r.l.) ~~to terminate their relationship under the private management agreement (the “PMA”) between them.~~

~~In 2015, the Illinois Attorney General questioned the validity of the Termination Agreement which resulted in Northstar, IGT Global, and~~, with Scientific Games ~~International, Inc. entering into a Letter Agreement (the “Letter Agreement”~~Corporation (20%), Arianna 2001 (15%), and Servizi in Rete S.p.A. (1%) with the State of Illinois and the Illinois Department of Lottery, effective September 18, 2015, that superseded the Termination Agreement. The Letter Agreement sets forth the terms governing the termination of the PMA, the transition services to be provided by Northstar, and the amendment and expiration terms of the IGT Supply Agreement. Under the terms of the Letter Agreement and extensions thereof, the PMA terminated effective as of January 1, 2018, the IGT Supply Agreement was assigned by Northstar to the new private manager of the Illinois Lottery, and the term of the IGT Supply Agreement was extended through April 1, 2019. The new private manager terminated the IGT Supply Agreement effective February 18, 2019. Pursuant to the terms of the Letter Agreement, IGT Global will be paid a fee in 2019 as consideration for the early termination of the IGT Supply Agreement.minority shareholders.

Related Party Agreements

For a discussion of the ~~Company's~~Company’s related party transactions, including additional transactions with De Agostini, please see “Notes to the Consolidated Financial Statements—~~26.~~24. Related Party ~~Transactions.”~~Transactions” included in Item 18. “Financial Statements”.

Compensation Arrangements

For a description of compensation arrangements with the ~~Parent's~~Parent’s directors and executive officers, please see “Item 6. Directors, Senior ~~Managements~~Management, and Employees — B. ~~Compensation.~~Compensation.”

Financing

For a description of the ~~Company's~~Company’s outstanding financing agreements, please see section “Item ~~3. Key Information—B.~~ 5.B. Liquidity and Capital ~~Resources—Credit Facilities and Indebtedness.~~Resources.”


D.	~~Exchange Controls~~

D.Exchange Controls

Other than applicable taxation, anti-money laundering, and counter-terrorist financing law and regulations and certain economic sanctions which may be in force from time to time, there are currently no English laws or regulations, or any provision of the

Articles, which would prevent the transfer of capital or remittance of dividends, interest, and other payments to holders of the Parent’s securities who are not residents of the U.K. on a general basis.


E.	~~Taxation~~

E.Taxation

Material United States Federal Income Tax Considerations

This section summarizes certain material U.S. federal income tax considerations regarding the ownership and disposition of the ~~Parent's~~Parent’s ordinary shares by a U.S. holder (as defined below). This summary is based on U.S. federal income tax law, including the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated thereunder, administrative guidance and court decisions in effect on the date hereof, all of which are subject to change, possibly with retroactive effect, and to differing interpretations. No ruling from the Internal Revenue Service (the ~~"IRS"~~“IRS”) has been sought with respect to any U.S. federal income tax considerations described below, and there can be no assurance that the IRS or a court will not take a contrary position. The discussion assumes that the ~~Parent's~~Parent’s shareholders hold their ordinary shares, as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion further assumes that all items or transactions identified as debt will be respected as such for U.S. federal income tax purposes.

This summary does not constitute tax advice and does not address all aspects of U.S. federal income taxation that may be relevant to the ~~Parent's~~Parent’s shareholders in light of their personal circumstances, including any tax consequences arising under the tax on certain investment income pursuant to the Health Care and Education Reconciliation Act of 2010 or arising under the U.S. Foreign Account Tax Compliance Act, (or any Treasury regulations or administrative guidance promulgated thereunder, any intergovernmental agreement entered into in connection therewith or any non-U.S. laws, rules or directives implementing or relating to any of the foregoing), or to shareholders subject to special treatment under the Code, including (but not limited to):

•banks, thrifts, mutual funds, and other financial institutions;

•regulated investment companies;

•real estate investment trusts;

•traders in securities that elect to apply a mark-to-market method of accounting;

•broker-dealers;

•tax-exempt organizations and pension funds;

•U.S. holders that own (directly, indirectly, or constructively) 10% or more of the ~~Company's~~Company’s stock (by vote or value);

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•insurance companies;

•dealers or brokers in securities or foreign currency;

•individual retirement and other deferred accounts;

•U.S. holders whose functional currency is not the U.S. dollar;

•U.S. expatriates;

•“passive foreign investment companies” or “controlled foreign corporations”;

•persons subject to the alternative minimum tax;

•U.S. holders that hold their shares as part of a straddle, hedging, conversion constructive sale or other risk reduction transaction;

•partnerships or other entities or other arrangements treated as partnerships for U.S. federal income tax purposes and their partners and investors; and

•U.S. holders that received their shares through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan.

This discussion does not address any non-income tax considerations or any state, local or non-U.S tax consequences. For purposes of this discussion, a ~~"U.S. holder"~~“U.S. holder” means a beneficial owner of the ~~Parent's~~Parent’s ordinary shares that is, for U.S. federal income tax purposes:

•an individual who is a citizen or resident of the United States;

•a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof or the District of Columbia;

•an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

•a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes.

This discussion does not purport to be a comprehensive analysis or description of all potential U.S. federal income tax considerations. Each of the ~~Parent's~~Parent’s shareholders is urged to consult with such shareholder’s tax advisor with respect to the particular tax consequences of the ownership and disposition of the ~~Parent's~~Parent’s ordinary shares to such shareholder.

If a partnership, including for this purpose any entity or arrangement that is treated as a partnership for U.S. federal income tax purposes, holds the ~~Parent's~~Parent’s ordinary shares, the tax treatment of a partner therein will generally depend upon the status of such partner, the activities of the partnership and certain determinations made at the partner level. Any such holder that is a partnership and the partners in such partnership should consult their tax advisors about the U.S. federal income tax consequences of the ownership and disposition of their ordinary shares.

Ownership and Disposition of the ~~Parent's~~Parent’s Ordinary Shares

The following discusses certain material U.S. federal income tax consequences of the ownership and disposition of the Parent's ordinary shares by U.S. holders and assumes that the Parent will be a resident exclusively of the U.K. for all tax purposes.

Taxation of Distributions

Subject to the discussion below under ~~"Passive~~“Passive Foreign Investment Company ~~Considerations",~~Considerations,” the gross amount of distributions with respect to the ~~Parent's~~Parent’s ordinary shares (including the amount of any non-U.S. withholding taxes) will be taxable as dividends, to the extent that they are paid out of the ~~Parent's~~Parent’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such dividends will be includable in a U.S. holder’s gross income as ordinary dividend income on the day actually or constructively received by the U.S. holder. Such dividends will not be eligible for the dividends-received deduction allowed to corporations under the Code.

The gross amount of the dividends paid by the Parent to non-corporate U.S. holders may be eligible to be taxed at reduced rates of U.S. federal income tax applicable to “qualified dividend income.” Recipients of dividends from non-U.S. corporations will be taxed at this rate, provided that certain holding period requirements are satisfied and certain other requirements are met, if the dividends are received from “qualified foreign corporations,” which generally include corporations eligible for the benefits of an income tax treaty with the United States that the U.S. Secretary of the Treasury determines is satisfactory and includes an information exchange program. The U.S. Department of the Treasury and the IRS have determined that the U.K.- U.S. Income Tax Treaty is satisfactory for ~~this~~these purposes and the Parent believes that it is eligible for benefits under such treaty. Dividends paid with respect to stock of a foreign corporation which stock is readily tradable on an established securities market in the

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United States will also be treated as having been received from a “qualified foreign corporation.” The U.S. Department of the Treasury and the IRS have determined that common stock is considered readily tradable on an established securities market if it is listed on an established securities market in the United States, such as the NYSE.

Non-corporate U.S. holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss, or that elect to treat the dividend income as ~~"investment income"~~“investment income” pursuant to Section 163(d)(4) of the Code, will not be eligible for the reduced rates of taxation regardless of the ~~Parent's~~Parent’s status as a qualified foreign corporation. In addition, even if the minimum holding period requirement has been met, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. Each U.S. holder should consult its own tax advisors regarding the application of these rules given its particular circumstances.

To the extent that the amount of any distribution exceeds the Parent’s current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the excess will first be treated as a tax-free return of capital to the extent of each U.S. holder’s adjusted tax basis in the ~~Parent's~~Parent’s ordinary shares and will reduce such U.S. ~~holder's~~holder’s basis accordingly. The balance of the excess, if any, will be taxed as capital gain, which would be long-term capital gain if the holder has held the ~~Parent's~~Parent’s ordinary shares for more than one year at the time the distribution is received. Long-term capital gain of certain non-corporate U.S. holders, including individuals, is generally taxed at reduced rates. The deduction of capital losses is subject to limitations.

The amount of any distribution paid in foreign currency will be the U.S. dollar value of the foreign currency distributed by the Parent, calculated by reference to the exchange rate in effect on the date the distribution is ~~includible~~includable in the U.S. holder’s income, regardless of whether the payment is in fact converted into U.S. dollars on the date of receipt. Generally, a U.S. holder would not recognize any foreign currency gain or loss if the foreign currency is converted into U.S. dollars on the date the payment is received. However, any gain or loss resulting from currency exchange fluctuations during the period from the date the U.S. holder includes the distribution payment in income to the date such U.S. holder actually converts the payment into U.S. dollars will generally be treated as ordinary income or loss.

Sale, Exchange, or Other Taxable Disposition

Subject to the discussion below under ~~"Passive~~“Passive Foreign Investment Company ~~Considerations",~~Considerations,” a U.S. holder will generally recognize taxable gain or loss on the sale, exchange or other taxable disposition of the ~~Parent's~~Parent’s ordinary shares in an amount equal to the difference, if any, between the amount realized on the sale, exchange, or other taxable disposition and the U.S. holder’s tax basis in such ~~Parent's~~Parent’s ordinary shares. Such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the ordinary shares have been held for more than one year. Long-term capital gain of certain non-corporate U.S. holders, including individuals, is generally taxed at reduced rates. The deduction of capital losses is subject to limitations.

Passive Foreign Investment Company Considerations

A Passive Foreign Investment Company ~~("PFIC"~~(“PFIC”) is any foreign corporation if, after the application of certain “look-through” rules, (a) at least 75% of its gross income is “passive income” as that term is defined in the relevant provisions of the Code, or (b) at least 50% of the average value of its assets produces “passive income” or is held for the production of “passive income.” The determination as to PFIC status is a fact-intensive determination that includes ascertaining the fair market value (or, in certain circumstances, tax basis) of all the ~~Parent's~~Parent’s assets on a quarterly basis and the character of each item of income, and cannot be completed until the close of a taxable year. If a U.S. holder is treated as owning PFIC stock, such U.S. holder will be subject to special rules generally intended to reduce or eliminate the benefit of the deferral of U.S. federal income tax that results from investing in a foreign corporation that does not distribute all of its earnings on a current basis. These rules may adversely affect the tax treatment to a U.S. holder of distributions paid by the Parent and of sales, exchanges, and other dispositions of the ~~Parent's~~Parent’s ordinary shares, and may result in other adverse U.S. federal income tax consequences.

The Parent believes that the ordinary shares should not be treated as shares of a PFIC in the current taxable year, and the Parent does not expect that it will become a PFIC in the future. However, there can be no assurance that the IRS will not successfully challenge this position or that the Parent will not become a PFIC at some future time as a result of changes in the ~~Parent's~~Parent’s assets, income, or business operations.

Each U.S. holder is urged to consult its tax advisor concerning the U.S. federal income tax consequences of acquiring, owning or disposing of the ~~Parent's~~Parent’s ordinary shares if the Parent is or becomes classified as a PFIC, including the possibility of making

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a mark-to-market election. The remainder of the discussion below assumes that the Parent is not a PFIC, has not been a PFIC and will not become a PFIC in the future.

Information Reporting

U.S. individuals and certain entities with interests in “specified foreign financial assets” (including, among other assets, the ~~Parent's~~Parent’s ordinary shares, unless such shares were held on such U.S. holder’s behalf through certain financial institutions) with values in excess of certain thresholds are required to file an information report with the IRS. Taxpayers that fail to file the information report when required are subject to penalties. U.S. holders should consult their own tax advisors as to the possible obligation to file such information reports in light of their particular circumstances.

Special Voting Shares

NO STATUTORY, JUDICIAL OR ADMINISTRATIVE AUTHORITY DIRECTLY DISCUSSES HOW THE RECEIPT, OWNERSHIP, OR LOSS OF ENTITLEMENT TO INSTRUCT THE NOMINEE ON HOW TO VOTE IN RESPECT OF SPECIAL VOTING SHARES SHOULD BE TREATED FOR U.S. FEDERAL INCOME TAX PURPOSES AND AS A RESULT, THE U.S. FEDERAL INCOME TAX CONSEQUENCES THEREOF ARE UNCERTAIN. ACCORDINGLY, U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE RECEIPT, OWNERSHIP, AND LOSS OF ENTITLEMENT TO INSTRUCT THE NOMINEE ON HOW TO VOTE IN RESPECT OF SPECIAL VOTING SHARES.

While the tax consequences of the receipt, ownership and loss of ~~special voting shares upon request from~~entitlement to instruct the ~~Nominee~~nominee on how to vote in respect of Special Voting Shares are unclear, such receipt, ownership and loss is not expected to constitute a separate transaction from ownership of the ordinary shares for U.S. federal income tax purposes. As such, neither the receipt of the ~~special voting shares~~Special Voting Shares nor the loss of entitlement to instruct the nominee on how to vote the Special Voting Shares is ~~not~~ expected to give rise to a taxable event for U.S. federal income tax purposes.

Material U.K. Tax Considerations

The following summary is intended to apply only as a general guide to certain ~~United Kingdom (“~~U.K.”) tax considerations, and is based on current U.K. tax law and current published practice of HMHer Majesty’s Revenue and Customs (“HMRC”), both of which are subject to change at any time, possibly with retrospective effect. They relate only to certain limited aspects of the U.K. taxation treatment of investors who are resident and, in the case of individuals, domiciled or deemed domiciled in (and only in) the U.K. for U.K. tax purposes (except to

the extent that the position of non-U.K. resident shareholders is expressly referred to), who will hold the ~~Parent's~~Parent’s ordinary shares as investments (other than under an individual savings account or a self-invested personal pension) and who are the absolute beneficial owners of the ~~Parent's~~Parent’s ordinary shares. The statements may not apply to certain classes of investors such as (but not limited to) persons acquiring their ordinary shares in connection with an office or employment, dealers in securities, insurance companies, and collective investment schemes.

Any shareholder or potential investor should obtain advice from his or her own investment or taxation advisor.

Dividends

The Parent will not be required to withhold U.K. tax at the source from dividend payments it makes.

U.K. resident individual shareholders

~~Individual shareholders are no longer entitled to credit in respect of any dividend~~All dividends received by an individual shareholder from the ~~Parent. Instead,~~Parent or from other sources will form part of that shareholder’s total income for income tax purposes and towill constitute the top slice of that income. For the tax year 2021/2022, the extent that the dividends they receive (whether from the Parent or other companies) exceed the tax free dividend allowance (£~~5,000 for the current tax year and £2,000~~2,000 for the tax year ~~beginning on April 6, 2018),~~2021/2022, they are taxed on such dividends at either 7.5% ~~(for~~(to the extent shareholders ~~who~~ are liable to tax only at the basic rate), 32.5% ~~(for~~(to the extent shareholders ~~who~~ are liable to pay tax at the higher rate) or 38.1% ~~(for~~(to the extent shareholders ~~who~~ are liable to pay tax at the additional rate). The dividend tax rate will increase to 8.75% (to the extent shareholders are liable to tax only at the basic rate), 33.75% (to the extent shareholders are liable to tax only at the higher rate), and 39.35% (to the extent shareholders are liable to tax only at the additional rate) from April 6, 2022.

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U.K. resident corporate shareholders

A corporate shareholder resident in the U.K. for tax purposes which is a “small company” for the purposes of Chapter 2 of Part 9A of the Corporation Tax Act 2009 will not be subject to U.K. corporation tax on any dividend received from the Parent provided that certain conditions are met (including an anti-avoidance condition).

Other corporate shareholders resident in the U.K. for tax purposes will not be subject to U.K. corporation tax on any dividend received from the Parent so long as the dividends fall within an exempt class and certain conditions are met. For example, (1) dividends paid on shares that are not redeemable and do not carry any present or future preferential rights to dividends or to a company’s assets on its winding up, and (2) dividends paid to a person holding less than a 10% interest in the Parent should generally fall within an exempt class. However, the exemptions mentioned above are not comprehensive and are subject to anti-avoidance rules.

If the conditions for exemption are not met or cease to be satisfied, if anti-avoidance provisions apply or if such a corporate shareholder elects an otherwise exempt dividend to be taxable, the shareholder will be subject to U.K. corporation tax on dividends received from the Parent, at the rate of corporation tax applicable to that corporate shareholder (currently ~~19%)~~19.0% for the tax year 2021/2022).

Non-U.K. resident shareholders

A shareholder resident outside the U.K. for tax purposes and who holds the ~~Parent's~~Parent’s ordinary shares as investments will not generally be liable to tax in the U.K. on any dividend received from the ~~Parent.~~Parent unless he or she carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency (or, in the case of a corporate holder of ordinary shares where the dividend exemption does not apply, through a permanent establishment) to which the ordinary shares are attributable. There are certain exceptions for trading in the United Kingdom through independent agents, such as some brokers and investment managers.

A non-U.K. resident shareholder may also be subject to taxation on dividend income under local law. A shareholder who is not solely resident in the U.K. for tax purposes should consult his or her own tax ~~advisers~~advisors concerning his or her tax liabilities (in the U.K. and any other country) on dividends received from the Parent, whether he or she is entitled to claim any part of the tax credit and, if so, the procedure for doing so, and whether any double taxation relief is due in any country in which he or she is subject to tax.

Taxation of Capital Gains

Disposal of the ~~Parent's~~Parent’s Ordinary Shares

A disposal or deemed disposal of the Parent's ordinary shares by a shareholder who is resident in the U.K. for tax purposes may, depending upon the shareholder’s circumstances and subject to any available exemptions and reliefs (such as the annual exempt amount for ~~individuals and indexation allowance for corporate shareholders)~~individuals), give rise to a chargeable gain or an allowable loss for the purposes of U.K. taxation of capital gains.

If an individual shareholder ~~who is subject to income tax at either the higher or the additional rate~~ becomes liable to U.K. capital gains tax on the disposal of the ~~Parent's~~Parent’s ordinary shares, the applicable rate (for the tax year 2021/2022) will be either 10% to the extent shareholders are liable to tax only at the basic rate or 20% (to the extent shareholders are liable to pay tax at the higher rate or the additional rate), respectively (save in some limited circumstances).

If a corporate shareholder becomes liable to U.K. corporation tax on the disposal (or deemed disposal) of ordinary shares, the main rate of U.K. corporation tax (at a rate of 19% for the tax year 2021/2022) would apply, subject to any exemptions, reliefs and/or allowable losses. A shareholder ~~who~~which is not resident in the U.K. for tax purposes should not normally be liable to U.K. taxation on chargeable gains on a disposal or deemed disposal of the ~~Parent's~~Parent’s ordinary ~~shares.~~shares unless the person is carrying on (whether solely or in a partnership) a trade, profession or vocation in the U.K. through a branch or agency (or, in the case of a corporate holder of ordinary shares, through a permanent establishment) to which the ordinary shares are attributable. However, an individual shareholder who has ceased to be resident in the U.K. for ~~tax~~the purposes of a double taxation treaty for a period of less than five years (and was UK resident for at least 4 out of the 7 tax years immediately prior to his year of departure) and who disposes of the ~~Parent's~~Parent’s ordinary shares during that period of temporary non-residence may be liable on his return to the U.K. (or upon ceasing to be regarded as resident outside the U.K. for purposes of double taxation relief) to U.K. taxation on any capital gain realized (subject to any available exemption or relief).

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Inheritance Tax

The ~~Parent's~~Parent’s ordinary shares will be assets situated in the U.K. for the purposes of U.K. inheritance tax. A gift or settlement of such assets by, or on the death of, an individual holder of such assets may (subject to certain exemptions and reliefs and depending upon the shareholder’s circumstances) give rise to a liability to U.K. inheritance tax even if the holder is not a resident of or domiciled in the U.K. for tax purposes. For inheritance tax purposes, a transfer of assets at less than market value may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some benefit.

A charge to inheritance tax may arise in certain circumstances where the ~~Parent's~~Parent’s ordinary shares are held by close companies and by trustees of settlements. Shareholders should consult an appropriate tax ~~adviser~~advisor as to any inheritance tax implications if they intend to make a gift or transfer at less than market value or intend to hold the ~~Parent's~~Parent’s ordinary shares through a close company or trust arrangement.

Shareholders and/or potential investors who are in any doubt as to their tax position, or who are subject to tax in any jurisdiction other than the U.K., should consult a suitable professional advisor.

~~Material Italian Tax Considerations~~

~~This section describes the material Italian tax consequences of the ownership~~F.Dividends and transfer of the Parent's ordinary shares. The following description does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to own or dispose of the shares (such as Italian inheritance and gift tax considerations, and transfer tax considerations, value-added and registration tax considerations) and, in particular does not discuss the treatment of shares that are held in connection with a permanent establishment or a fixed base through which a non-Italian resident shareholder carries on business or performs personal services in Italy.Paying Agents

~~For the purposes of this discussion, an “Italian Shareholder” is a beneficial owner of the Parent's ordinary shares that is:~~

~~an Italian resident individual; or~~

~~an Italian resident corporation.~~

~~This section does not apply to shareholders subject to special rules, including:~~

~~non-profit organizations, foundations and associations that are not subject to tax;~~

~~Italian commercial partnerships and assimilated entities (società in nome collettivo, in accomandita semplice~~);

~~Italian noncommercial partnerships (società semplice~~);

~~individuals holding the shares in connection with the exercise of a business activity; and~~

~~Italian real estate investment funds (fondi comuni di investimento immobiliare) and Italian real estate SICAF (società di investimento a capitale fisso~~).

~~In addition, where specified, this section also applies to Italian pension funds, Italian investment funds (fondi comuni di investimento mobiliare~~), ~~Società di Investimento Collettivo A Capitale Variabile~~ ~~(“SICAVs”) and~~ ~~Societa di Investimento Collettivo A Capitale Fisso~~ ~~(“SICAFs”) other than real estate investment funds and SICAFs.~~

For the purposes of this discussion, a Non-Italian Shareholder means a beneficial owner of the Parent's ordinary shares that is neither an Italian Shareholder nor a permanent establishment or a fixed base through which a non-Italian resident shareholder carries on business or performs personal services in Italy nor a partnership.

This discussion is limited to Italian Shareholders and Non-Italian Shareholders that hold their shares directly and whose shares represent, and have represented in any 12-month period preceding each disposal: (i) a percentage of voting rights in the ordinary

~~shareholders’ meeting not greater than 2% for listed shares, or (ii) a participation in the share capital not greater than 5% for listed shares.~~

This section is based upon tax laws and applicable tax treaties and what is understood to be the current practice in Italy in effect on the date of the filing of this Form 20-F which may be subject to changes in the future, even on a retroactive basis. Italian Shareholders and Non-Italian Shareholders should consult their own advisors as to the Italian tax consequences of the ownership and disposal of the Parent's ordinary shares in their particular circumstances.

~~Ownership of the Parent's Ordinary Shares~~

~~Italian Shareholders~~

~~Taxation of Dividends~~

~~The tax treatment applicable to dividend distributions depends upon the nature of the dividend recipient, as summarized below.~~

~~Italian resident individual shareholders~~

Dividends paid by a non-Italian resident company, such as the Parent, to Italian resident individual shareholders are subject to a 26% tax. Such tax (i) may be applied by the taxpayer in its tax return or (ii) if an Italian withholding agent intervenes in the collection of the dividends, may be withheld by such withholding agent.

~~In the event that a taxpayer elects to be taxed under the~~ ~~“Regime del Risparmio Gestito”~~ (discussed below in the paragraph entitled “—Taxation of Capital Gains—Italian resident individual shareholders”), dividends are not subject to the 26% tax, but are subject to taxation under such ~~“Regime del Risparmio Gestito.”~~

Subject to certain conditions and limitations, Italian resident individuals may be exempt from the 26% tax on dividends paid in relation to the Parent's ordinary shares if such shares are included in a long-term savings account (~~piano di risparmio a lungo termine) meeting the requirements set forth in Article 1(100-114) of Law No. 232 of 11 December 2016 (the “Budget Act 2017”).~~

Pursuant to Law Decree No. 167, dated June 28, 1990, as amended, Italian resident individual shareholders who hold (or are beneficial owners of) foreign financial activities not being deposited or otherwise held or traded through Italian resident financial intermediaries must, in certain circumstances, disclose the aforesaid to the Italian tax authorities in their income tax return.

~~Italian resident corporations~~

Subject to the paragraph below, Italian Shareholders subject to Italian corporate income tax (“IRES”) should benefit from a 95% exemption on dividends if certain conditions are met. The remaining 5% of dividends are treated as part of the taxable business income of such Italian resident corporations, subject to tax in Italy under the IRES.

Dividends, however, are fully subject to tax in the following circumstances: (i) dividends paid to taxpayers using IAS/IFRS in relation to shares deemed to be “held for trading” pursuant to art. 2 of the Ministerial Decree 10 January 2018; or (ii) dividends paid in relation to shares acquired through repurchase transactions, stock lending and similar transactions, unless the beneficial owner of such dividends would have benefited from the 95% exemption described in the above paragraph.

~~For certain companies operating in the financial field and subject to certain conditions, dividends are also included in the tax base for the regional tax on productive activities (Imposta regionale sulle attività produttive~~ ~~—“IRAP”).~~

~~Italian pension funds~~

Dividends paid to Italian pension funds (subject to the regime provided for by Article 17 of Italian Legislative Decree No. 252 dated December 5, 2005) are not subject to any withholding tax, but must be included in the result of the relevant portfolio accrued at the end of the tax period, which is subject to substitute tax at the rate of 20%.

~~Italian investment funds (fondi comuni di investimento mobiliare), SICAVs and SICAFs.~~

Dividends paid to Italian investment funds, SICAVs and SICAFs are neither subject to any withholding tax nor to any taxation at the level of the fund, SICAV or SICAF. A withholding tax may apply in certain circumstances at the rate of up to 26% on distributions made by the investment funds, SICAVs or SICAFs.

~~Taxation of Capital Gains~~

~~Italian resident individual shareholders~~

~~Capital gains realized upon disposal of shares or rights by an Italian resident individual shareholder are subject to Italian final substitute tax (imposta sostitutiva) at a 26% rate.~~

~~Capital gains and capital losses realized in the relevant tax year have to be declared in the annual income tax return (Regime di Tassazione in Sede di Dichiarazione dei Redditi~~). Losses in excess of gains may be carried forward against capital gains realized in the four subsequent tax years. While losses generated as of July 1, 2014 can be carried forward for their entire amount, losses realized until December 31, 2011 can be carried forward for 48.08% of their amount only, and losses realized between January 1, 2012 and June 30, 2014 for 76.92% of their amount.

~~As an alternative to the~~ ~~Regime di Tassazione in Sede di Dichiarazione dei Redditi~~ ~~described in the above paragraph, Italian resident individual shareholders may elect to be taxed under one of the two following regimes:~~

~~(i)~~ ~~Regime del Risparmio Amministrato:~~ ~~Under this regime, separate taxation of capital gains is allowed subject to (i) the shares and rights in respect of the shares being deposited with Italian banks,~~ ~~società di intermediazione mobiliare~~ ~~or certain authorized financial intermediaries resident in Italy for tax purposes and (ii) an express election for the~~ ~~Regime del Risparmio Amministrato~~ ~~being timely made in writing by the relevant shareholder. Under the~~ ~~Regime del Risparmio Amministrato,~~ the financial intermediary is responsible for accounting for the substitute tax in respect of capital gains realized on each sale of the shares or rights on the shares, and is required to pay the relevant amount to the Italian tax authorities on behalf of the taxpayer, deducting a corresponding amount from the proceeds to be credited to the shareholder. Under the ~~Regime del Risparmio Amministrato,~~ where a sale of the shares or rights on the shares results in a capital loss, such loss may be deducted (up to 48.08% for capital losses realized until December 31, 2011 and up to 76.92% for capital losses realized between January 1, 2012 and June 30, 2014) from capital gains of the same kind subsequently realized under the same relationship of deposit in the same tax year or in the four subsequent tax years. Under the ~~Regime del Risparmio Amministrato,~~ ~~the shareholder is not required to declare the capital gains in its annual tax return.~~

~~(ii)~~ ~~Regime del Risparmio Gestito:~~ Under this regime, any capital gains accrued to Italian resident individual shareholders that have entrusted the management of their financial assets, including the shares and rights in respect of the shares, to an authorized Italian-based intermediary, and have elected for the ~~Regime del Risparmio Gestito,~~ are included in the computation of the annual increase in value of the managed assets accrued, even if not realized, at year-end, subject to the 26% substitute tax to be applied on behalf of the taxpayer by the managing authorized Italian-based intermediary. Under the ~~Regime del Risparmio Gestito~~, any decline in value of the managed assets accrued at year-end may be carried forward (up to 48.08% if accrued until December 31, 2011 and up to 76.92% if accrued between January 1, 2012 and June 30, 2014) and set against increases in value of the managed assets which accrue in any of the four subsequent tax years. Under the ~~Regime del Risparmio Gestito,~~ ~~the shareholder is not required to report capital gains realized in its annual tax declaration.~~

Subject to certain conditions and limitations, Italian resident individuals may be exempt from the 26% tax on capital gains related to the Parent's ordinary shares if such shares are included in a long-term savings account (~~piano di risparmio a lungo termine) meeting the requirements set forth in Article 1(100-114) of Budget Act 2017.~~

~~Italian resident corporations~~

Capital gains realized through the disposal of the Parent's ordinary shares by Italian Shareholders which are companies subject to IRES benefit from a 95% exemption (referred to as the “Participation Exemption Regime”), if the following conditions are met:

i.~~the shares have been held continuously from the first day of the 12th month preceding the disposal; and~~

~~ii.~~the shares were accounted for as a long-term investment in the first balance sheet closed after the acquisition of the shares (for companies adopting IAS/IFRS, shares are considered to be a long-term investment if they are different from those deemed to be “held for trading” pursuant to art. 2 of the Ministerial Decree 10 January 2018).

Based on the assumption that the Parent is a resident of the U.K. for tax purposes, that its ordinary shares are listed on a regulated market, that its value will be predominantly composed of shareholdings in companies carrying on a business activity and not resident in a State with a preferential tax system, the two additional conditions set forth by Article 87 of the CTA in order to enjoy

~~the Participation Exemption Regime (i.e., the company is not resident in a State with a preferential tax system and carries on a business activity) are both met.~~

The remaining 5% of the amount of such capital gain is included in the aggregate taxable income of the Italian resident corporate shareholders and subject to taxation according to ordinary IRES rules and rates.

If the conditions for the Participation Exemption Regime are met, capital losses from the disposal of shareholdings realized by Italian resident corporate shareholders are not deductible from the taxable income of the Company.

Capital gains and capital losses realized through the disposal of shareholdings which do not meet at least one of the aforementioned conditions for the Participation Exemption Regime are, respectively, fully included in the aggregate taxable income and fully deductible from the same aggregate taxable income, subject to taxation according to ordinary rules and rates. However, if such capital gains are realized upon disposal of shares which have been accounted for as a long-term investment on the last three balance sheets, then if the taxpayer so chooses the gains can be taxed in equal parts in the year of realization and the four following tax years.

The ability to use capital losses to offset income is subject to significant limitations, including provisions against “dividend washing.” In addition, Italian resident corporations that recognize capital losses exceeding €50,000 are subject to tax reporting requirements in their annual income tax return (also in case such capital losses are realized as a consequence of a number of transactions). Furthermore, for capital losses of more than €5,000,000, deriving from transactions on shares booked as fixed financial assets, the taxpayer must report the relevant information in its annual income tax return (also in case such capital losses are realized as a consequence of a number of transactions). Such an obligation does not apply to parties who prepare their financial statements in accordance with IAS/IFRS international accounting standards. Italian resident corporations that recognize capital losses should consult their tax advisors as to the tax consequences of such losses.

~~For certain types of companies operating in the financial field and subject to certain conditions, the capital gains are also included in the IRAP taxable base.~~

~~Italian pension funds~~

Capital gains realized by Italian pension funds are not subject to any withholding or substitute tax. Capital gains and capital losses must be included in the result of the relevant portfolio accrued at the end of the tax period, which is subject to a 20% substitute tax.

~~Italian investment funds (fondi comuni di investimento mobiliare), SICAVs and SICAFs.~~

Capital gains realized by Italian investment funds, SICAVs and SICAFs are not subject to any withholding or substitute tax. Capital gains and capital losses must be included in the investment funds, SICAV’s and SICAF’s annual results, which are not subject to tax. A withholding tax may apply in certain circumstances at the rate of up to 26% on distributions made by the funds, SICAVs and SICAFs.

~~Non-Italian Shareholders~~

~~Taxation of Dividends~~

~~According to Italian tax laws, the distribution of dividends by the Parent will not trigger any taxable event for Italian income tax purposes for Non-Italian Shareholders.~~

~~Taxation of Capital Gains~~

According to Italian tax laws, capital gains on the Parent's ordinary shares will not trigger any taxable event for Italian income tax purposes for Non-Italian Shareholders provided that the shares are not held in Italy.

~~Loyalty Voting Structure~~

NO STATUTORY, JUDICIAL, OR ADMINISTRATIVE AUTHORITY HAS PROVIDED PUBLISHED GUIDANCE ON THE ITALIAN TAX CONSEQUENCES OF THE RECEIPT, OWNERSHIP OR LOSS OF THE ENTITLEMENT TO INSTRUCT THE NOMINEE ON HOW TO VOTE IN RESPECT OF SPECIAL VOTING SHARES AND AS A RESULT, SUCH TAX CONSEQUENCES ARE UNCERTAIN. ACCORDINGLY, WE URGE ITALIAN SHAREHOLDERS TO CONSULT THEIR

~~TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE RECEIPT, OWNERSHIP, AND LOSS OF THE ENTITLEMENT TO INSTRUCT THE NOMINEE ON HOW TO VOTE IN RESPECT OF SPECIAL VOTING SHARES.~~

~~Receipt of the entitlement to instruct the Nominee on how to vote in respect of special voting shares~~

An Italian Shareholder that receives the entitlement to instruct the Nominee on how to vote in respect of special voting shares issued by the Parent should in principle not recognize any taxable income upon the receipt of such entitlement. Under a possible interpretation, the issue of special voting shares can be treated as the issue of bonus shares free of charge to the shareholders out of existing available reserves of the Parent. Such issue should not have any material effect on the allocation of the tax basis of an Italian Shareholder between its Parent's ordinary shares and the corresponding Parent's special voting shares. Because the special voting shares are not transferable and their very limited economic rights (equal to a fraction of the aggregate sum of $1) can be enjoyed only at the time of a return of capital of the Company, of a winding up or otherwise, the Parent believes and intends to take the position that the tax basis and the fair market value of the special voting shares is minimal. However, because the determination of the tax basis and fair market value of the special voting shares is not governed by any guidance that directly addresses such a situation and is unclear, the Italian tax authorities could assert that the tax basis and fair market value of the special voting shares as determined by the Parent are incorrect.

~~Loss of the entitlement to instruct the Nominee on how to vote in respect of special voting shares~~

The tax treatment of an Italian Shareholder that loses its entitlement to instruct the Nominee on how to vote in respect of special voting shares for no consideration is uncertain. It is possible that an Italian Shareholder should recognize a loss to the extent of the Italian Shareholder’s tax basis (if any). The deductibility of such loss depends on individual circumstances and conditions required by Italian law. It is also possible that an Italian Shareholder would not be allowed to recognize a loss upon losing its entitlement to instruct the Nominee on how to vote in respect of special voting shares and instead should increase its basis in its Parent's ordinary shares by an amount equal to the tax basis (if any) in such Parent's special voting shares.

~~IVAFE (Imposta sul Valore delle Attività Finanziarie detenute all’Estero)~~

According to Article 19 of the Law Decree of December 6, 2011, No. 201 (“Decree No. 201/2011”), implemented by the Law dated December 22, 2011, No. 214, Italian resident individuals holding financial assets-including shares-outside the Italian territory are required to pay a special tax (“IVAFE”) at the rate of 0.20%. The tax applies on the market value (or, in the lack thereof, on the nominal value or the redemption value) at the end of the relevant year of such financial assets held outside the Italian territory.

~~Taxpayers may deduct from the tax due a tax credit equal to any wealth taxes paid in the State where the financial assets are held (up to the amount of the Italian tax due).~~

~~Stamp Duty (Imposta di bollo)~~

According to Article 19 of Decree No. 201/2011, a proportional stamp duty applies on a yearly basis on the market value (or, in the lack thereof, on the nominal value or the redemption value) of any financial product or financial instrument. The stamp duty applies at the rate of 0.20% and, in respect of Italian Shareholders or Non-Italian Shareholders other than individuals, it cannot exceed €14,000. The stamp duty applies with respect to any Italian Shareholders or Non-Italian Shareholders (other than banks, insurance companies, investments and pension funds and certain other financial intermediaries) to the extent that the shares are held through an Italian-based banking or financial intermediary or insurance company.


F.	~~Dividends and Paying Agents~~

Not applicable.


G.	~~Statement of Experts~~

G.Statement of Experts

Not applicable.


H.	~~Documents on Display~~

H.Documents on Display

The Parent files reports, including annual reports on Form 20-F, furnishes current reports on Form 6-K and discloses other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. These may be read without charge and copied, upon payment of prescribed rates, at the public reference facility maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. To obtain information on the operation of the public reference facility, the telephone number is 1-800-SEC-0330. Any SEC filings may also be accessed by visiting the SEC’s website at www.sec.gov.


I.	~~Subsidiary Information~~

I.Subsidiary Information

Not ~~applicable.~~applicable


~~Item 11.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 11. Quantitative and Qualitative Disclosures About Market Risk

The ~~Company's~~Company’s activities expose it to a variety of market risks including interest rate risk and foreign currency exchange rate ~~risk, liquidity risk and credit~~ risk. The ~~Company's~~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 its exposure to such risks both centrally and at the local level, as appropriate, as part of its overall risk management program with the objective of seeking to reduce the potential adverse effects of such risks on its results of operations and financial position.

Depending upon the risk assessment, the Company uses selected derivative hedging instruments, including principally interest rate swaps and foreign currency forward contracts, for the purposes of managing interest rate risk and currency risks arising from its operations and sources of financing. The ~~Company's~~Company’s policy is not to enter into such contracts for speculative purposes. ~~The Company's accounting policies and disclosures regarding its derivatives are set out in Note 9,~~ ~~Derivatives,~~ ~~to the Consolidated Financial Statements.~~

The following section provides qualitative and quantitative 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

Indebtedness

The ~~Company's~~Company’s exposure to changes in market interest rates relates primarily to its cash and financial liabilities which bear floating interest rates. The ~~Company's~~Company’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Company has historically used various techniques to mitigate the risks associated with future changes in interest rates, including entering into interest rate swap and treasury rate lock agreements.

~~In 2018 and 2017, the Company's exposure to floating rates~~

Ta ble of ~~interest related primarily to the Revolving Credit Facilities and Term Loan Facilities.~~Contents

At December 31, ~~2018~~2021 and ~~2017, the Company held $625.0 million (notional amount) in interest rate swaps that effectively convert $625.0 million~~2020, approximately 18% and 23% of the ~~6.250% Senior Secured Notes due June 2022 from fixed interest rate debt to variable rate debt. At December 31, 2018 and 2017, approximately 35% and 30% of the Company's~~Company’s net debt portfolio was exposed to interest rate fluctuations, respectively. The Company’s exposure to floating rates of interest primarily relates to the Euro Term Loan Facilities due January 2027. At December 31, 2020, the Company held $425 million notional amount of interest rate swaps that were no longer designated as hedging relationships and the fair value of the swaps was recognized in interest expense with no corresponding offset to debt. At December 31, 2021, the Company no longer held any interest rate swaps.

A hypothetical 10 basis points increase in interest rates for ~~2018, 2017~~2021 and ~~2016,~~2020, with all other variables held constant, would have resulted in ~~incremental pre-tax losses~~lower income from continuing operations before provision for income taxes of approximately ~~$2.8 million, $2.5~~$1 million and ~~$2.0~~$2 million, respectively.

Costs to Fund Jackpot Liabilities

Fluctuations in prime, treasury, and agency rates due to changes in market and other economic conditions directly impact the ~~Company's~~Company’s cost to fund jackpots and corresponding gaming operating income. If interest rates decline, jackpot cost increases and operating income decreases. The Company estimates a hypothetical decline of one percentage point in applicable interest rates would have reduced operating income by approximately ~~$7.1 million and $9.0~~$7 million in ~~2018~~2021 and ~~2017, respectively.~~2020. The Company does not manage this exposure with derivative financial instruments.

Foreign Currency Exchange Rate Risk

The Company operates on an international basis across a number of geographical locations. The Company is exposed to (i) transactional foreign exchange risk when an entity enters into transactions in a currency other than its functional currency, and (ii) translation foreign exchange risk which arises when the Company translates the financial statements of its foreign entities into U.S. dollars for the preparation of the consolidated financial statements.

Transactional Risk

The ~~Company's~~Company’s subsidiaries generally execute their operating activities in their respective functional currencies. In circumstances where the Company enters into transactions in a currency other than the functional currency of the relevant entity, the Company seeks to minimize its exposure by (i) sharing risk with its customers (for example, in limited circumstances, but whenever possible, the Company negotiates clauses into its contracts that allows for price adjustments should a material change in foreign exchange rates occur), (ii) creating a natural hedge by netting receipts and payments, (iii) utilizing foreign currency borrowings, and (iv) where applicable, by entering into foreign currency forward and option contracts.

The principal foreign currency to which the Company is exposed is the euro. A hypothetical 10% decrease in the U.S. dollar to euro exchange rate, with all other variables held constant, would have resulted in ~~incremental pre-tax losses~~lower income from continuing operations before provision for income taxes of approximately ~~$337.8 million, $362.2~~$28 million and ~~$337.0~~$363 million for ~~2018, 2017~~2021 and ~~2016,~~2020, respectively.

From time to time, the Company enters into foreign currency forward and option contracts to reduce the exposure associated with certain firm commitments, variable service revenues, and certain assets and liabilities denominated in foreign currencies. These contracts generally have average maturities of 12 months or less, and are regularly renewed to provide continuing coverage throughout the year. It is the ~~Company's~~Company’s policy to negotiate the terms of the hedge derivatives to match the terms of the hedged item to maximize hedge effectiveness.

At December 31, ~~2018,~~2021, the Company had forward contracts for the sale of approximately ~~$283.2~~$121 million of foreign currency (primarily euro, Colombian peso, South African rand, and British pounds) and the purchase of approximately ~~$309.5~~$204 million of foreign currency (primarily euro, U.S. ~~dollars, Canadian dollars~~dollar, British pounds, and ~~Swedish krona)~~Chilean peso).

At December 31, ~~2017,~~2020, the Company had forward contracts for the sale of approximately ~~$333.9~~$170 million of foreign currency (primarily ~~euro~~South African rand, Canadian dollars, Australian dollars, and British pounds) and the purchase of approximately ~~$227.5~~$187 million of foreign currency (primarily ~~U.S. dollars, Canadian dollars~~euro and ~~Swedish krona)~~Polish zlotys).

Translation Risk

Certain of the ~~Company's~~Company’s subsidiaries are located in countries that are outside of the United States, in particular the Eurozone. As the ~~Company's~~Company’s reporting currency is the U.S. dollar, the income statements of those entities are converted into U.S. dollars using the average exchange rate for the period, and while revenues and costs are unchanged in local currency, changes in exchange rates may lead to effects on the converted balances of revenues, costs, and the result in U.S. dollars. The monetary

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assets and liabilities of consolidated entities that have a reporting currency other than the U.S. dollar are translated into U.S. dollars at the period-end foreign exchange rate. The effects of these changes in foreign exchange rates are recognized directly in the consolidated statements of ~~changes in~~shareholders’ equity within accumulated other comprehensive income.

The ~~Company's~~Company’s foreign currency exposure primarily arises from changes between the U.S. dollar and the ~~euro and the U.S. dollar and Swedish krona.~~euro. A hypothetical 10% decrease in the U.S. dollar to euro exchange rate, with all other variables held constant, would have increased equity by $97 million for 2021 and reduced equity by ~~$143.7 million, $94.2 million and $77.1~~$118 million for 2018, 2017 and 2016, respectively. A hypothetical 10% decrease in the U.S. dollar to Swedish krona exchange rate, with all other variables held constant, would have reduced equity by $15.8 million, $21.9 million and $18.2 million for 2018, 2017 and 2016, respectively.2020.

~~Liquidity Risk~~

Item 12.Description of Securities Other than Equity Securities

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 the Company's debt, in terms of both interest and principal, and its payment obligations relating to its ordinary business activities. The Company believes that the cash which it generates from its operating activities, together with its committed borrowing capacity, will be sufficient to meet its financial obligations and operating requirements in the foreseeable future. Therefore, the Company does not believe that it is exposed to a significant concentration of liquidity risk.

~~Credit Risk~~

The Company's credit risk primarily arises from cash, trade receivables and customer financing receivables. The Company has established risk management policies, where it holds cash deposits with major, financially sound counterparties with high credit ratings, and that limit exposure to any one credit party.

The Company enters into commercial transactions only with recognized, creditworthy third parties. A significant portion of trade receivables are from government lottery entities which the Company considers to pose insignificant credit risk. Additionally, the Company does not have significant credit risk to any one customer. Geographically, credit risk is concentrated as follows:

December 31,
2018 2017
(in thousands) $ % $ %
Italy 427,148
35.4 432,533
37.2
United States 303,616
25.1 291,729
25.1
Latin America 218,577
18.1 189,730
16.3
Europe and Africa 159,311
13.2 210,516
18.1
Other 99,060
8.2 39,604
3.4
1,207,712
100.0 1,164,112
100.0

Reconciliation to Balance Sheet:

Trade and other receivables, net (Note 5) 949,085
937,854

Customer financing receivables, net - current (Note 7) 170,273
151,360

Customer financing receivables, net - non-current (Note 7) 88,354
74,898

1,207,712
1,164,112

~~Commodity Price Risk~~

~~The Company's exposure to commodity price changes is not considered material and is managed through its procurement and sales practices.~~


~~Item 12.~~	~~Description of Securities Other than Equity Securities~~

Not applicable.

PART II


~~Item 13.~~	~~Defaults, Dividends Arrearages and Delinquencies~~

Item 13.Defaults, Dividends, Arrearages, and Delinquencies

None.


~~Item 14.~~	~~Material Modifications to the Rights of Security Holders and Use of Proceeds~~

Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds

See the description of the ~~loyalty plan~~Loyalty Plan in “Item 10. Additional Information—B. Memorandum and Articles of ~~Association—~~Association—Loyalty Plan.”


~~Item 15.~~	~~Controls and Procedures~~

Item 15.Controls and Procedures

Disclosure Controls and Procedures

The ~~Company's~~Company’s management maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Company’s reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within time periods specified in the ~~Commission's~~Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating its disclosure controls and procedures, the Company recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as the ~~Company's~~Company’s are designed to do.

As required by Rule 13a-15(b) under the Exchange Act, an evaluation of the effectiveness of the ~~Company's~~Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, ~~2018~~2021 was conducted under the supervision and with the participation of its management including its Chief Executive Officer and Chief Financial Officer. Based on this evaluation, its Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective as of December 31, ~~2018~~2021 at a reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

The ~~Company's~~Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

The ~~Company's~~Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

•provide reasonable assurance that transactions are recorded, as necessary, to permit preparation of financial statements in accordance with generally accepted accounting principles; and that receipts and expenditures of the Company are made only in accordance with authorizations of the ~~Company's~~Company’s management and directors; and

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•provide reasonable assurance that unauthorized acquisition, use or disposition of the ~~Company's~~Company’s assets, that could have a material effect on the financial statements, would be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The ~~Company's~~Company’s management assessed the effectiveness of internal control over financial reporting as of December 31, ~~2018~~2021 based upon the framework presented in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway ~~Commission (“COSO”).~~Commission. Based on this assessment, management concluded that the ~~Company's~~Company’s internal control over financial reporting was effective as of December 31, ~~2018.~~2021.

The ~~Company's~~Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the ~~Company's~~Company’s internal control over financial reporting as of December 31, ~~2018~~2021 as stated in their report appearing in ~~"Report~~“Report of Independent Registered Public Accounting ~~Firm"~~Firm” included in ~~"Item~~“Item 18. Financial ~~Statements".~~Statements.”

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the year ended December 31, ~~2018~~2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 16A.Audit Committee Financial Expert

The ~~Company's~~Parent’s Board of Directors has determined that ~~Vincent L. Sadusky,~~Maria Pinelli, chairperson of the Audit Committee, isand Alberto Dessy and Heather McGregor, both members of the Audit Committee, are each an audit committee financial expert. HeEach of Ms. Pinelli, Mr. Dessy and Ms. McGregor is an independent director under the NYSE standards.

Item 16B.Code of Ethics

The Company has adopted a Code of Ethics for Principal Executive Officer and Senior Financial Officers which is applicable to its principal executive officer, principal financial officer, the principal accounting officer and controller, and any persons performing similar functions. The Code of Ethics was most recently amended in November 2020 to expressly permit persons reporting violations of the code to bring instances of retaliation, harassment or retribution to the attention of the Audit Committee, in addition to the Board of Directors. This code of ethics is posted on its website, www.igt.com, and may be found as follows: from the main page, first click on “Explore IGT” and then on ~~"Investor Relations"~~“Investor Relations” and then on ~~“Management and Governance”~~“ESG” and then on ~~“Documents.~~“Governance Documents.” The information contained on the ~~Company's~~Company’s website is not included in, or incorporated by reference into, this annual report on Form 20-F.

Item 16C.Principal Accountant Fees and Services

PricewaterhouseCoopers LLP (“PwC US”) has been serving as the Company’s independent auditor since 2015.

Aggregate fees for professional services and other services rendered by PwC US and its foreign entities belonging to the PwC network in ~~2018~~2021 and ~~2017~~2020 were as follows:

For the year ended December 31,
($ thousands) 2018 2017
Audit services 13,254
14,582
Tax services 1,242
552
Audit-related services 1,028
204
All other services 189
134
15,713
15,472


	For the year ended December 31,
($ in thousands)	2021	2020
Audit fees	9,482	10,929

Audit-related fees	431	357
Tax fees	677	335
All other fees	140	112
	10,730	11,733

•Audit ~~services~~fees consist of professional services performed in connection with the annual financial statements.

•Tax ~~services~~fees consist of professional services for tax planning and compliance.

•Audit-related ~~services~~fees consist of assurance and related services that are reasonably related to the performance of the audit or review of the financial statements and agreed upon procedures for certain financial statement areas.

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•All other ~~services,~~fees, other than those reported above, mainly consist of services in relation to ~~intellectual property royalty audits.~~compliance-related services and access to online accounting research software applications.

Audit Committee’s Pre-Approval Policies and Procedures

The Audit Committee pre-approves engagements of the ~~Company's~~Company’s independent registered public accounting firm to audit the ~~Company's~~Company’s consolidated financial statements. The Audit Committee has a policy requiring management to obtain the Audit Committee’s approval before engaging the ~~Company's~~Company’s independent registered public accounting firm to provide any other audit or permitted non-audit services to the Company or its subsidiaries. Pursuant to this policy, which is designed to ensure that such engagements do not impair the independence of the ~~Company's~~Company’s independent registered public accounting firm, the Audit Committee reviews and pre-approves, if appropriate, specific audit and non-audit services in the categories audit services, tax services, audit-related services, and any other services that may be performed by the ~~Company's~~Company’s independent registered public accounting firm.

Item 16D.Exemptions from the Listing Standards for Audit Committees

None.

Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers

~~The~~On November 15, 2021, the Parent’s Board of Directors authorized a share repurchase program pursuant to which the Company ~~currently has neither purchased any common shares~~may repurchase up to $300 million of the ~~Company nor~~Parent’s outstanding ordinary shares during a period of four years commencing on November 18, 2021. The share repurchase program was publicly announced ~~any share buyback plans. The Company has~~on November 16, 2021. At the Parent’s 2021 annual general meeting, the Parent’s shareholders granted authority to repurchase, subject to a maximum repurchase price, ~~a maximum of 20%~~up to 20,485,656 of the ~~aggregate issued share capital of~~Parent’s ordinary ~~shares as of April 7, 2015.~~shares. This authority ~~will expire on July 28, 2020.~~remains valid until November 10, 2022, unless previously revoked, varied, or renewed at the Parent’s 2022 annual general meeting.


	For the year ended December 31, 2021
Calendar Month	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced program	Approximate dollar value of shares that may yet be purchased under the program (in millions)










November	750,000	$	28.38	750,000	$	279
December	750,000	$	26.06	750,000	$	259
Total	1,500,000			1,500,000

Item 16F.Change in Registrant’s Certifying Accountant

None.

Item 16G.Corporate Governance

The Parent is a public limited company incorporated under the laws of England and Wales and qualifies as a foreign private issuer under the rules and regulations of the SEC and the listing standards of the NYSE. In accordance with the NYSE listing rules related to corporate governance, listed companies that are foreign private issuers are permitted to follow home-country practice in some circumstances in lieu of the provisions of the corporate governance rules contained in Section 303A of the NYSE Listed Company Manual that are otherwise applicable to listed companies. However, for as long as the Parent’s ordinary shares are listed on the NYSE, the Company will comply with all NYSE corporate governance standards set forth in Section 3 of the NYSE Listed Company Manual applicable to non-controlled domestic U.S. issuers, regardless of whether the Company is a foreign private issuer.

Item 16H. Mine Safety Disclosure

Not applicable.

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Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III


~~Item 17.~~	~~Financial Statements~~

~~The Company has responded to~~ Item ~~18 in lieu of responding to this item.~~17.Financial Statements

Not applicable.


~~Item 18.~~	~~Financial Statements~~

Item 18.Financial Statements

The audited Consolidated Financial Statements as required under Item 18 are attached hereto starting on page F-1 of this annual report on Form 20-F.


~~Item 19.~~	~~Exhibits~~

Item 19.Exhibits

A list of exhibits included as part of this annual report on Form 20-F is set forth in the Index to Exhibits immediately following this Item 19.

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INDEX TO EXHIBITS



Exhibit		Description

1.1		Articles of Association of International Game Technology PLC, adopted ~~May 17, 2018~~June 25, 2020 (incorporated herein by reference to Exhibit 99.2 of the Company’s Form 6-K furnished to the SEC on ~~May 18, 2018)~~June 29, 2020).

		There have not been filed as exhibits to this Form 20-F certain long-term debt instruments, none of which relates to indebtedness that exceeds 10% of the consolidated assets of International Game Technology PLC. International Game Technology PLC agrees to furnish the Securities and Exchange Commission, upon its request, a copy of any instrument defining the rights of holders of long-term debt of International Game Technology PLC and its consolidated subsidiaries.

2.1		International Game Technology PLC Loyalty Plan Terms and Conditions, adopted April 7, 2015, and amended December 24, 2017 and March 7, 2018 (incorporated herein by reference to Exhibit 2.1 of the ~~Company's~~Company’s Form 20-F filed with the SEC on March 15, 2018).

2.2		First Supplemental Trust Deed dated April 7, 2015 relating to the Trust Deed dated December 5, 2012 in respect of €500,000,000 3.500% Guaranteed Notes due March 5, 2020 among International Game Technology PLC, as the Issuer; certain subsidiaries of International Game Technology PLC, as the Initial Guarantors; certain subsidiaries of International Game Technology PLC, as the Additional Guarantors; and BNY Mellon Corporate Trustee Services Limited, as the Trustee (incorporated herein by reference to Exhibit 4.7 to the Current Report on Form 8-K filed by International Game Technology on April 10, 2015).

~~2.3~~	Senior Facilities Agreement dated November 4, 2014, as amended April 2, 2015, October 28, 2015, June 26, 2016, July 31, 2017, ~~and~~ December 17, 2018, July 24, 2019 and May 7, 2020 for the US$~~1,200,000,000~~1,050,000,000 and ~~€725,000,000~~€625,000,000 multicurrency revolving credit facilities among International Game Technology PLC (as successor to GTECH S.p.A.), as the Parent and a Borrower; GTECH Corporation, as a Borrower; J.P. Morgan Limited and Mediobanca — Banca di Credito Finanziario S.p.A., as the Global Coordinators, Bookrunners, and Mandated Lead Arrangers; the entities listed in Part III of Schedule I thereto, as the Bookrunners and Mandated Lead Arrangers, the entities listed in Part IV of Schedule I thereto, as the Mandated Lead Arrangers; the entities listed in Part V of Schedule I thereto, as the Arrangers, the financial institutions listed in Part IIA of Schedule I thereto, as the Original Lenders; The Royal Bank of Scotland plc, as the Agent; The Royal Bank of Scotland plc, as the Issuing Agent; KeyBank National Association, as the Swingline Agent; and the financial institutions listed in Part IIB of Schedule I thereto, as the Original US Dollar Swingline Lenders (incorporated herein by reference to Exhibit 99.3 of the Company’s Form 6-K furnished to the SEC on ~~December 21, 2018)~~May 13, 2020).

~~2.4~~2.3		Amendment and Restatement Agreement , dated July 21, 2021,relating to the Senior Facility Agreement dated July 25, 2017, as amended December 18, 2018, July 18, 2019 and May 8, 2020 for the €1,500,000,000 term loan facility among International Game Technology PLC, as the Borrower; Bank of America Merrill Lynch International Limited and Mediobanca - Banca di Credito Finanziario S.p.A. as Global Coordinators, Bookrunners, and Mandated Lead Arrangers; BNP Paribas, Italian Branch, Banca IMI S.p.A., and UniCredit Bank AG, Milan Branch, as Bookrunners and Mandated Lead Arrangers; Barclays Bank PLC, Credit Agricole Corporate & Investment Bank, Milan Branch, ING Bank N.V. - Milan Branch, National Westminster Bank PLC, Socgen Inversiones Financiers S.A.U., The Bank of Nova Scotia, and Credit Suisse AG, Milan Branch as Mandated Lead Arrangers; Mediobanca - Banca di Credito Finanziario S.p.A., as the Agent; and others (incorporated herein by reference to Exhibit ~~99.4~~99.2 of the Company’s Form 6-K furnished to the SEC on ~~December 21, 2018)~~July 2 6 , 2021 ).

~~2.5~~2.4		Indenture dated as of April 7, 2015 among International Game Technology PLC, as the Issuer; certain subsidiaries of International Game Technology PLC, as the Initial Guarantors; BNY Mellon Corporate Trustee Services Limited, as Trustee; The Royal Bank of Scotland plc, as Security Agent; The Bank of New York Mellon, London Branch, as Euro Paying Agent and Transfer Agent; The Bank of New York Mellon, as Dollar Paying Agent and Dollar Registrar; and The Bank of New York Mellon (Luxembourg) S.A., as Euro Registrar, with respect to $600,000,000 5.625% Senior Secured Notes due February 15, 2020, $1,500,000,000 6.250% Senior Secured Notes due February 15, 2022, $1,100,000,000 6.500% Senior Secured Notes due February 15, 2025, €700,000,000 4.125% Senior Secured Notes due February 15, 2020 and €850,000,000 4.750% Senior Secured Notes due February 15, 2023 (incorporated herein by reference to Exhibit 4.8 to the Current Report on Form 8-K filed by International Game Technology on April 10, 2015).



~~Exhibit~~2.5		~~Description~~
~~2.6~~	Indenture dated as of June 15, 2009 between International Game Technology, as the Company, and Wells Fargo Bank, National Association, as the Trustee (Senior Debt Securities) (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by International Game Technology on June 15, 2009, Commission file number 001-36906).

~~2.7~~2.6		Second Supplemental Indenture dated as of June 8, 2010 between International Game Technology, as the Company, and Wells Fargo Bank, National Association, as the Trustee (Creating a Series of Securities Designated 5.500% Notes due 2020) (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by International Game Technology on June 8, 2010).

~~2.8~~	Amendment No. 1 dated as of April 7, 2015 among International Game Technology, as the Company; Wells Fargo Bank, National Association, as the Trustee; and The Royal Bank of Scotland plc, as the Security Agent, to the Indenture dated as of June 15, 2009, as supplemented by the Second Supplemental Indenture dated as of June 8, 2010 (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by International Game Technology on April 10, 2015).

~~2.9~~	Amendment No. 2 dated as of April 22, 2015 among International Game Technology, as the Company; International Game Technology PLC and certain subsidiaries of International Game Technology PLC, as the Guarantors; and Wells Fargo Bank, National Association, as the Trustee, to the Indenture dated as of June 15, 2009, as supplemented by the Second Supplemental Indenture dated as of June 8, 2010 (incorporated herein by reference to Exhibit 4.26 of the Company’s Annual Report on Form 20-F filed by International Game Technology PLC on May 15, 2015).

~~2.10~~	Amendment No. 3 dated as of April 23, 2015 between International Game Technology, as the Company; and Wells Fargo Bank, National Association, as the Trustee, to the Indenture dated as of June 15, 2009, as supplemented by the Second Supplemental Indenture dated as of June 8, 2010 (incorporated herein by reference to Exhibit 4.28 of the Company’s Annual Report on Form 20-F filed by International Game Technology PLC on May 15, 2015).

~~2.11~~	Third Supplemental Indenture dated as of September 19, 2013 between International Game Technology, as the Company, and Wells Fargo Bank, National Association, as the Trustee (Creating a Series of Securities Designated 5.350% Notes due 2023) (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by International Game Technology on September 19, 2013).

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Exhibit						Description
~~2.12~~
2.7						Amendment No. 1 dated as of April 7, 2015 among International Game Technology, as the Company; Wells Fargo Bank, National Association, as the Trustee; and The Royal Bank of Scotland plc, as the Security Agent, to the Indenture dated as of June 15, 2009, as supplemented by the Third Supplemental Indenture dated as of September 19, 2013 (incorporated herein by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by International Game Technology on April 10, 2015).

~~2.13~~2.8						Amendment No. 2 dated as of April 22, 2015 among International Game Technology, as the Company; International Game Technology PLC and certain subsidiaries of International Game Technology PLC, as the Guarantors; and Wells Fargo Bank, National Association, as the Trustee, to the Indenture dated as of June 15, 2009, as supplemented by the Third Supplemental Indenture dated as of September 19, 2013 (incorporated herein by reference to Exhibit 4.27 of the Company’s Annual Report on Form 20-F filed by International Game Technology PLC on May 15, 2015).

~~2.14~~2.9						Amendment No. 3 dated as of April 23, 2015 between International Game Technology, as the Company; and Wells Fargo Bank, National Association, as the Trustee, to the Indenture dated as of June 15, 2009, as supplemented by the Third Supplemental Indenture dated as of September 19, 2013 (incorporated herein by reference to Exhibit 4.29 of the Company’s Annual Report on Form 20-F filed by International Game Technology PLC on May 15, 2015).

~~2.15~~2.10						Observer Agreement with an effective date of ~~May 18, 2018,~~November 15, 2021, between the Company and De Agostini S.p.A. ~~(incorporated herein by reference to Exhibit 99.1 to the Company's Form 6-K furnished to the SEC on May 30, 2018).~~


2.11
~~Exhibit~~	~~Description~~
~~2.16~~	Indenture dated as of June 27, 2018 among International Game Technology PLC, as Issuer; certain subsidiaries of International Game Technology PLC, as Guarantors; BNY Mellon Corporate Trustee Services Limited, as Trustee; The Bank of New York Mellon, London Branch, as Paying Agent and Transfer Agent; the Bank of New York Mellon SA/NV, Luxembourg Branch, as Registrar; and NatWest Markets Plc, as Security Agent with respect to €500,000,000 3.500% Senior Secured Notes due ~~2024.~~2024 (incorporated herein by reference to Exhibit 2.16 of the Company's Annual Report on Form 20-F filed by International Game Technology PLC on March 3, 2020).

~~2.17~~2.12		First Supplemental Indenture dated as of February 20, 2019, among International Game Technology PLC, as Issuer, BNY Mellon Corporate Trustee Services Limited, as Trustee, and NatWest Markets Plc, as Security Agent, to the Indenture dated as of June 27, ~~2018.~~2018 (incorporated herein by reference to Exhibit 2.17 of the Company's Annual Report on Form 20-F filed by International Game Technology PLC on March 3, 2020).

~~2.18~~2.13		Indenture dated as of September 26, 2018 among International Game Technology PLC, as Issuer; certain subsidiaries of International Game Technology PLC, as Guarantors; BNY Mellon Corporate Trustee Services Limited, as Trustee; The Bank of New York Mellon, London Branch, as Paying Agent and Transfer Agent; the Bank of New York Mellon SA/NV, Luxembourg Branch, as Registrar; and NatWest Markets Plc, as Security Agent with respect to $750,000,000 6.250% Senior Secured Notes due ~~2027.~~2027 (incorporated herein by reference to Exhibit 2.18 of the Company’s Annual Report on Form 20-F filed by International Game Technology PLC on March 3, 2020).

~~2.19~~2.14		Underwriting Agreement, dated as of May 22, 2018, by and among International Game Technology PLC, International Game Technology, De Agostini S.p.A., Credit Suisse Securities (USA) LLC and Credit Suisse International (incorporated herein by reference to Exhibit 1.1 to the ~~Company's~~Company’s Form 6-K furnished to the SEC on May 25, 2018).

~~4.1~~2.15		~~Video Lottery Concession for~~Indenture dated as of June 20, 2019 between International Game Technology PLC, as the ~~activation~~Issuer, and ~~operation of~~BNY Mellon Corporate Trustee Services Limited, as the network for managing legalized gaming machines—including amusement with prize machines “AWP” and (video lottery terminals) “VLT” between Amministrazione Autonoma dei Monopoli di Stato (now known as Agenzia delle Dogane e dei Monopoli) and Lottomatica Videolot Rete S.p.A. issued March 20, 2013 expiring March 19, 2022Trustee (incorporated herein by reference to Exhibit ~~10.9~~2.20 to the ~~Registration Statement~~Company's Annual Report on Form ~~F-4 filed by International Game Technology PLC (f/k/a Georgia Worldwide PLC) on January 2, 2015).~~

~~4.2~~	~~Lottomatica Group 2012-2018 Stock Option Plan (incorporated herein by reference to Exhibit 99.4 to the Post-Effective Amendment No. 1 on Form S-8 to Form F-4~~20-F filed by International Game Technology PLC on ~~April 6, 2015)~~March 3, 2020).

~~4.3~~2.16		~~GTECH 2013-2019 Stock Option Plan~~Indenture dated as of September 16, 2019 between International Game Technology PLC, as the Issuer, and BNY Mellon Corporate Trustee Services Limited, as the Trustee (incorporated herein by reference to Exhibit ~~99.5~~2.21 to the ~~Post-Effective Amendment No. 1~~Company's Annual Report on ~~Form S-8 to Form F-4~~Form-20-F filed by International Game Technology PLC on ~~April 6, 2015)~~March 3, 2020).

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~~4.4~~Exhibit		Description
2.17		Indenture dated as of June 19, 2020 among International Game Technology PLC, as the Issuer, the Guarantors named therein, BNY Mellon Corporate Trustee Services Limited, as Trustee, The Bank of New York Mellon, London Branch as paying agent, The Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar and transfer agent and NatWest Markets Plc as security agent (in corporated herein by reference to Exhibit No. 2.17 to the Company ’s Annual Report on Form 20-F filed by International Game Techno ogy PLC on March 2, 2021).

2.18		Indenture dated as of March 25, 2021 among International Game Technology PLC, as the Issuer, the Guarantors named therein BNY Mellon Corporate Trustee Services Limited, as Trustee, The Bank of New York Mellon, London Branch as paying agent, The Bank of New York Mellon SA/NV, Dublin Branch, as registrar and transfer agent and NatWest Markets Plc as security agent.

2.19		Description of the registrant’s securities registered pursuant to Section 12 of the Exchange Act.

4.1		GTECH 2014-2020 Stock Option Plan (incorporated herein by reference to Exhibit 99.6 to the Post-Effective Amendment No. 1 on Form S-8 to Form F-4 filed by International Game Technology PLC on April 6, 2015).

~~4.5~~4.2		GTECH 2014-2018 Share Allocation Plan (incorporated herein by reference to Exhibit 99.10 to the Post-Effective Amendment No. 1 on Form S-8 to Form F-4 filed by International Game Technology PLC on April 6, 2015).

~~4.6~~4.3		International Game Technology PLC 2015 Equity Incentive Plan, as amended (incorporated herein by reference to Exhibit 1.1 of the Company’s Annual Report on Form 20-F filed by International Game Technology PLC on April 29, 2016).

~~4.7~~4.4		International Game Technology PLC 2021 Equity Incentive Plan (incorporated herein by reference to Exhibit 4.2 to the Form S-8 filed by International Game Technology PLC on May 18, 2021)

4.5		The Lotto Concession for the activation and operation of the network for the national lotto game between the Agenzia delle Dogane e dei Monopoli and Lottoitalia S.r.l., issued April 14, 2016, expiring November 30, 2025 (incorporated herein by reference to Exhibit 4.20 of the Company's Annual Report on Form 20-F filed by International Game Technology PLC on April 20, 2017).

~~4.8~~4.6		Instant Ticket Concession for the operation of the national instant ticket lottery games between the Amministrazione Autonoma dei Monopoli di Stato (now known as Agenzia delle Dogane e dei Monopoli) and Lotterie Nazionali S.r.l., issued and effective from October 1, 2010, expiring September 30, 2019, extended to September 2028 (incorporated herein by reference to Exhibit 4.9 of the ~~Company's~~Company’s Annual Report on Form 20-F filed by International Game Technology PLC on March 15, 2018).

~~8.1~~	~~List of subsidiaries of the registrant.~~



~~Exhibit~~4.7						~~Description~~ Share Sale and Purchase Agreement relating to the sale and acquisition of Lottomatica Videolot Rete S.p.A. and Lottomatica Scommesse S.r.l., dated as of December 6, 2020, among Lottomatica Holding S.r.l. as the Seller, International Game Technology PLC as the Guarantor and Gamenet Group S.p.A. as the Buyer (incorporated herein by reference to Exhibit 4.8 of the Company ’s Annual Report on Form 20-F filed by International Game Technology PLC on March 2, 2021).

~~12.1~~4.8						Share Purchase Agreement (in respect of Lis Holding S.p.A.) between IGT Lottery S.p.A. and PostePay S.p.A. — Patrimonio Destinato IMEL, dated February 25, 2022

8.1						List of Subsidiaries of the Registrant

12.1						Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

12.2						Rule 13a-14(a)/15d-14(a) Certification of Executive Chair

12.3						Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

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~~13.1~~Exhibit						Description
13.1						Certification of the Chief Executive Officer and Executive Chair Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002

13.2						Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002

15.1						Consent of PricewaterhouseCoopers LLP

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf.



			INTERNATIONAL GAME TECHNOLOGY PLC


			/s/ ~~Alberto Fornaro~~MASSIMILIANO CHIARA
			Name: ~~Alberto Fornaro~~Massimiliano Chiara
			Title: Chief Financial Officer

Dated: March ~~8, 2019~~3, 2022

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ITEM 18. FINANCIAL STATEMENTS

INTERNATIONAL GAME TECHNOLOGY PLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			F-~~F-2~~2

Consolidated Balance ~~Sheets~~Sheets at December 31, ~~2018~~2021 and ~~2017~~2020			F-~~F-4~~4

Consolidated Statements of Operations for the years ended December 31, ~~2018, 2017~~2021, 2020, and ~~2016~~2019			F-~~F-5~~5

Consolidated Statements of Comprehensive Income (Loss) for the years endedDecember 31, ~~2018, 2017~~2021, 2020, and ~~2016~~2019			F-~~F-6~~6

Consolidated Statements of Cash Flows for the years ended December 31, ~~2018, 2017~~2021, 2020, and ~~2016~~2019			F-~~F-7~~7

Consolidated Statements of Shareholders’ Equity for the years ended December 31, ~~2018, 2017~~2021, 2020, and ~~2016~~2019			F-~~F-9~~9

Notes to the Consolidated Financial Statements			F-~~F-10~~10

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Report of Independent Registered Public Accounting Firm

To theBoard of Directors and Shareholders of International Game Technology PLC

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of International Game Technology PLC and its subsidiaries (the “Company”) as of December 31, ~~2018~~2021 and ~~2017,~~2020, and the related consolidated statements of operations, of comprehensive income ~~shareholders’~~(loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, ~~2018,~~2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, ~~2018,~~2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, ~~2018~~2021 and ~~2017,~~2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2018~~2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2018,~~2021, based on criteria established in Internal Control - Integrated Framework(2013)issued by the COSO.

~~Changes in Accounting Principles~~

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues from contracts with customers and the manner in which it presents restricted cash and restricted cash equivalents in the statement of cash flows in 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in ~~Management's~~Management’s Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Identifying and Evaluating Contractual Terms and Conditions

As described in Notes 2 and 4 to the consolidated financial statements, the Company generated service and product revenues of $3,483 million and $606 million, respectively, for the year ended December 31, 2021. The Company often enters into contracts with customers that consist of a combination of services and products that are accounted for as one or more distinct performance obligations. As disclosed by management, judgment is applied in identifying and evaluating the contractual terms and conditions that impact the identification of performance obligations and the pattern of revenue recognition.

The principal considerations for our determination that performing procedures relating to revenue recognition, specifically identifying and evaluating contractual terms and conditions, is a critical audit matter are the significant judgment by management in identifying and evaluating contractual terms and conditions that impact the identification of performance obligations and the pattern of revenue recognition, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate whether terms and conditions in contracts were appropriately identified and evaluated by management.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to revenue recognition, including controls related to the identification and evaluation of contractual terms and conditions impacting the identification of performance obligations and the pattern of revenue recognition. These procedures also included, among others, (i) evaluating and testing management’s process for identifying performance obligations and assessing the pattern of revenue recognition, and (ii) evaluating, on a test basis, the completeness and accuracy of the contractual terms and conditions identified in contracts with customers.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

March ~~8, 2019~~3, 2022

We have served as the Company’s auditor since 2015.

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International Game Technology PLC

Consolidated Balance Sheets

($ in millions and shares in thousands, except ~~par value and number of shares)~~per share amounts)


		December 31,
	Notes	2021	2020
Assets
Current assets:
Cash and cash equivalents		591	907
Restricted cash and cash equivalents		218	199
Trade and other receivables, net	5	903	846
Inventories	6	183	169
Other current assets	7	589	480
Assets held for sale	3	4	839
Total current assets		2,487	3,440
Systems, equipment and other assets related to contracts, net	10	937	1,068
Property, plant and equipment, net	10	119	132
Operating lease right-of-use assets	11	283	288
Goodwill	13	4,656	4,713
Intangible assets, net	14	1,413	1,577
Other non-current assets	7	1,429	1,774

Total non-current assets		8,836	9,552
Total assets		11,322	12,992

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable		1,035	1,126
Current portion of long-term debt	15	—	393
Short-term borrowings	15	52	—
Other current liabilities	16	828	846
Liabilities held for sale	3	—	250
Total current liabilities		1,914	2,615
Long-term debt, less current portion	15	6,477	7,857
Deferred income taxes	17	368	333
Operating lease liabilities	11	269	266
Other non-current liabilities	16	323	360

Total non-current liabilities		7,437	8,816
Total liabilities		9,351	11,431
Commitments and contingencies	18	0	0
Shareholders’ equity
Common stock, par value $0.10 per share; 205,188 shares issued and 203,688 shares outstanding at December 31, 2021; 204,857 shares issued and outstanding at December 31, 2020		21	20
Additional paid-in capital		2,329	2,347
Retained deficit		(1,439)	(1,920)
Treasury stock, at cost; 1,500 shares at December 31, 2021	19	(41)	—
Accumulated other comprehensive income	19	412	330
Total IGT PLC’s shareholders’ equity		1,282	777
Non-controlling interests		689	784
Total shareholders’ equity		1,971	1,561
Total liabilities and shareholders’ equity		11,322	12,992

December 31,
Notes 2018 2017
Assets

Current assets:

Cash and cash equivalents 250,669
1,057,418
Restricted cash and cash equivalents 261,108
248,012
Trade and other receivables, net 5 949,085
937,854
Inventories 6 282,698
319,545
Other current assets 7 504,061
407,520
Income taxes receivable 39,075
94,168
Total current assets 2,286,696
3,064,517
Systems, equipment and other assets related to contracts, net 10 1,404,426
1,434,194
Property, plant and equipment, net 10 185,349
193,723
Goodwill 11 5,580,227
5,723,815
Intangible assets, net 12 2,044,723
2,273,460
Other non-current assets 7 2,108,964
2,427,953
Deferred income taxes 15 38,117
41,546
Total non-current assets 11,361,806
12,094,691
Total assets 21 13,648,502
15,159,208

Liabilities, redeemable non-controlling interests, and shareholders' equity

Current liabilities:

Accounts payable 1,142,371
1,240,753
Other current liabilities 13 816,722
1,780,875
Current portion of long-term debt 14 —
599,114
Short-term borrowings 14 34,822
—
Income taxes payable 8,209
55,935
Total current liabilities 2,002,124
3,676,677
Long-term debt, less current portion 14 7,977,267
7,777,445
Deferred income taxes 15 446,083
491,460
Income taxes payable 25,654
55,665
Other non-current liabilities 13 445,445
446,113
Total non-current liabilities 8,894,449
8,770,683
Total liabilities 10,896,573
12,447,360
Commitments and contingencies 17

Redeemable non-controlling interests 19 —
356,917
Shareholders’ equity

Common stock, par value $0.10 per share; 204,210,731 and 203,446,572 shares issued and outstanding at December 31, 2018 and 2017, respectively 20,421
20,344
Additional paid-in capital 2,534,134
2,676,854
Retained deficit (1,008,193 ) (1,032,372 )
Accumulated other comprehensive income 18 261,537
340,169
Total IGT PLC’s shareholders’ equity 1,807,899
2,004,995
Non-controlling interests 19 944,030
349,936
Total shareholders’ equity 2,751,929
2,354,931
Total liabilities, redeemable non-controlling interests, and shareholders’ equity 13,648,502
15,159,208

The accompanying notes are an integral part of these consolidated financial statements.

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International Game Technology PLC

Consolidated Statements of Operations

($ in millions and shares in thousands, except per share amounts)

For the year ended December 31,
Notes 2018 2017 2016
Service revenue 3, 21 4,046,314
4,136,556
4,375,586
Product sales 3, 21 784,942
802,403
778,310
Total revenue 3, 21 4,831,256
4,938,959
5,153,896

Cost of services 2,450,658
2,553,083
2,553,479
Cost of product sales 491,030
579,431
582,358
Selling, general and administrative 844,059
816,093
945,824
Research and development 263,279
313,088
343,531
Restructuring expense 14,781
39,876
27,934
Impairment loss 23 120,407
715,220
37,744
Transaction expense (income), net 51
(26,740 ) 2,590
Total operating expenses 4,184,265
4,990,051
4,493,460

Operating income (loss) 21 646,991
(51,092 ) 660,436

Interest income 14,231
10,436
12,840
Interest expense 14 (431,618 ) (458,899 ) (469,268 )
Foreign exchange gain (loss), net 129,051
(443,977 ) 101,040
Other (expense) income, net 24 (54,607 ) (33,393 ) 18,365
Total non-operating expenses (342,943 ) (925,833 ) (337,023 )

Income (loss) before provision for (benefit from) income taxes 15 304,048
(976,925 ) 323,413

Provision for (benefit from) income taxes 15 189,401
(29,414 ) 59,206

Net income (loss) 114,647
(947,511 ) 264,207

Less: Net income attributable to non-controlling interests 115,671
55,400
45,413
Less: Net income attributable to redeemable non-controlling interests 20,326
65,665
7,457
Net (loss) income attributable to IGT PLC (21,350 ) (1,068,576 ) 211,337

Net (loss) income attributable to IGT PLC per common share - basic 25 (0.10 ) (5.26 ) 1.05
Net (loss) income attributable to IGT PLC per common share - diluted 25 (0.10 ) (5.26 ) 1.05

Weighted-average shares - basic 25 204,083
203,130
201,511
Weighted-average shares - diluted 25 204,083
203,130
202,214


		For the year ended December 31,
	Notes	2021	2020	2019
Service revenue	4, 21	3,483	2,640	3,101
Product sales	4, 21	606	476	931
Total revenue	4, 21	4,089	3,115	4,032
Cost of services		1,754	1,634	1,777
Cost of product sales		377	346	558
Selling, general and administrative		810	707	850
Research and development		238	191	266
Restructuring	12	6	45	25
Goodwill impairment	13	—	296	99
Other operating expense (income), net		1	4	(21)
Total operating expenses		3,187	3,223	3,554
Operating income (loss)	21	902	(107)	478
Interest expense, net	15	341	398	411
Foreign exchange (gain) loss, net		(66)	309	(40)
Other expense (income), net		98	33	(21)
Total non-operating expenses		373	740	350
Income (loss) from continuing operations before provision for income taxes	17	529	(848)	128
Provision for income taxes	17	274	28	131
Income (loss) from continuing operations		255	(875)	(3)
Income from discontinued operations, net of tax		24	37	114
Gain on sale of discontinued operations, net of tax		391	—	—
Income from discontinued operations	3	415	37	114
Net income (loss)		670	(839)	112
Less: Net income attributable to non-controlling interests from continuing operations		190	64	126

Less: Net (loss) income attributable to non-controlling interests from discontinued operations	3	(2)	(5)	5
Net income (loss) attributable to IGT PLC		482	(898)	(19)

Net income (loss) from continuing operations attributable to IGT PLC per common share - basic	23	0.32	(4.59)	(0.63)
Net income (loss) from continuing operations attributable to IGT PLC per common share - diluted	23	0.31	(4.59)	(0.63)

Net income (loss) attributable to IGT PLC per common share - basic	23	2.35	(4.39)	(0.09)
Net income (loss) attributable to IGT PLC per common share - diluted	23	2.33	(4.39)	(0.09)

Weighted-average shares - basic	23	204,954	204,725	204,373
Weighted-average shares - diluted	23	206,795	204,725	204,373

The accompanying notes are an integral part of these consolidated financial statements.

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International Game Technology PLC

Consolidated Statements of Comprehensive Income (Loss)

($ ~~thousands)~~in millions)

For the year ended December 31,
Notes 2018 2017 2016
Net income (loss) 114,647
(947,511 ) 264,207

Other comprehensive (loss) income, before tax:

Change in foreign currency translation:
Foreign currency translation adjustments 18 (90,309 ) 182,791
(49,881 )
Reclassification of (income) loss to net income 18 (4,254 ) —
118
Total foreign currency translation adjustments (94,563 ) 182,791
(49,763 )

Change in unrealized gain (loss) on cash flow hedges:

Unrealized (loss) gain on cash flow hedges 18 (163 ) (6,610 ) 8,351
Reclassification of loss (gain) to net income 18 536
1,744
(5,218 )
Total change in unrealized gain (loss) on cash flow hedges 373
(4,866 ) 3,133

Unrealized (loss) gain on available-for-sale securities 18 (5,408 ) (678 ) 8,772

Unrealized gain (loss) on defined benefit plans 18 429
(120 ) (682 )

Other comprehensive (loss) income, before tax (99,169 ) 177,127
(38,540 )

Income tax benefit related to items of other comprehensive income 18 1,846
1,936
4,548
Other comprehensive (loss) income (97,323 ) 179,063
(33,992 )

Total comprehensive income (loss) 17,324
(768,448 ) 230,215

Less: Total comprehensive income attributable to non-controlling interests 96,980
54,937
45,616
Less: Total comprehensive income attributable to redeemable non-controlling interests 20,326
65,665
7,457
Total comprehensive (loss) income attributable to IGT PLC (99,982 ) (889,050 ) 177,142


		For the year ended December 31,
	Notes	2021	2020	2019
Net income (loss)		670	(839)	112
Foreign currency translation adjustments, net of tax	19	28	128	(17)
Unrealized gain (loss) on hedges, net of tax	19	3	(1)	(1)
Unrealized (loss) gain on other, net of tax	19	(1)	—	3
Other comprehensive income (loss), net of tax	19	30	127	(15)
Comprehensive income (loss)		700	(712)	97
Less: Comprehensive income attributable to non-controlling interests		136	119	115
Comprehensive income (loss) attributable to IGT PLC		564	(831)	(18)

The accompanying notes are an integral part of these consolidated financial statements.

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International Game Technology PLC

Consolidated Statements of Cash Flows

($ ~~thousands)~~in millions)


		For the year ended December 31,
	Notes	2021	2020	2019
Cash flows from operating activities
Net income (loss)		670	(839)	112
Less: Income from discontinued operations		415	37	114
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation		325	355	386
Amortization of upfront license fees		216	210	206
Amortization		201	211	228
Loss on extinguishment of debt		92	28	12
Deferred income taxes		38	(78)	(68)
Stock-based compensation	22	35	(7)	27
Debt issuance cost amortization		19	21	22
Goodwill impairment	13	—	296	99
Gain on sale of assets		(9)	—	(65)
Foreign exchange (gain) loss, net		(66)	309	(40)
Other non-cash items, net		7	(2)	19
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:
Trade and other receivables		(95)	74	(49)
Inventories		(13)	17	84
Accounts payable		(36)	5	28

Other assets and liabilities		41	31	21
Net cash provided by operating activities from continuing operations		1,010	595	907
Net cash (used in) provided by operating activities from discontinued operations		(31)	271	186
Net cash provided by operating activities		978	866	1,093

Cash flows from investing activities
Capital expenditures		(238)	(255)	(377)
Proceeds from sale of assets		21	9	124
Other		1	12	6
Net cash used in investing activities from continuing operations		(216)	(233)	(248)
Net cash provided by (used in) investing activities from discontinued operations		852	(35)	(65)
Net cash provided by (used in) investing activities		636	(269)	(312)

Cash flows from financing activities
Principal payments on long-term debt		(2,846)	(959)	(848)
Payments in connection with the extinguishment of debt		(85)	(25)	(9)
Net (payments of) receipts from financial liabilities		(50)	67	(34)
Payments of debt issuance costs		(14)	(22)	(26)
Net proceeds from (repayments of) Revolving Credit Facilities		17	(29)	(417)
Net proceeds from (payments of) short-term borrowings		51	(7)	(32)
Proceeds from long-term debt		1,339	750	1,397
Repurchases of common stock		(41)	—	—
Dividends paid		(41)	(41)	(164)
Dividends paid - non-controlling interests		(91)	(136)	(137)
Return of capital - non-controlling interests		(127)	(32)	(99)
Capital increase - non-controlling interests		12	8	1
Other		(23)	(11)	(10)
Net cash used in financing activities		(1,898)	(438)	(376)

Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents		(284)	159	405
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(37)	76	(22)
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period		1,129	894	512
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period		808	1,129	894
Less: Cash and cash equivalents and restricted cash and cash equivalents of discontinued operations		—	23	19
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations		808	1,106	876

F-7

For the year ended December 31,
Notes 2018 2017 2016
Cash flows from operating activities

Net income (loss) 114,647
(947,511 ) 264,207
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation 432,899
401,085
390,448
Amortization 272,561
401,355
492,021
Service revenue amortization 217,341
209,774
116,980
Impairment loss 23 120,407
715,220
37,744
Loss on extinguishment of debt 24 54,423
25,733
—
Stock-based compensation expense 22 33,086
4,704
26,346
Debt issuance cost amortization 22,042
23,217
18,347
Deferred income tax provision 15 (34,494 ) (296,265 ) (153,649 )
Foreign exchange (gain) loss, net (129,051 ) 443,977
(101,040 )
Gain on sale of Double Down Interactive LLC 4 —
(51,348 ) —
Other non-cash costs, net 29,550
25,768
(142 )
Changes in operating assets and liabilities, excluding the effects of disposition and acquisitions:

Trade and other receivables (54,356 ) 45,465
(23,758 )
Inventories 12,556
51,406
(76,321 )
Upfront Italian license fees 13, 19 (878,055 ) (244,698 ) (665,260 )
Accounts payable (51,990 ) (3,031 ) 37,062
Other assets and liabilities (131,940 ) (141,463 ) (24,931 )
Net cash provided by operating activities 29,626
663,388
338,054

Cash flows from investing activities

Capital expenditures (533,052 ) (698,010 ) (541,943 )
Proceeds from sale of assets 19,243
167,452
185,798
Proceeds from sale of Double Down Interactive LLC, net of cash divested 4 —
823,788
—
Other 2,272
2,336
16,704
Net cash (used in) provided by investing activities (511,537 ) 295,566
(339,441 )

Cash flows from financing activities

Principal payments on long-term debt (1,899,888 ) (1,754,259 ) (357,513 )
Dividends paid (163,236 ) (162,528 ) (161,179 )
Dividends paid - non-controlling interests (126,926 ) (50,601 ) (32,717 )
Return of capital - non-controlling interests (85,121 ) (52,352 ) (35,407 )
Payments in connection with the extinguishment of debt (49,976 ) (38,832 ) —
Debt issuance costs paid (17,033 ) (16,378 ) (10,825 )
Net receipts from (payments of) financial liabilities 7,123
(150 ) 30,595
Net proceeds from short-term borrowings 14 34,822
—
—
Capital increase - non-controlling interests 321,584
41,011
40,771
Proceeds from long-term debt 1,687,761
1,762,270
—
Return of capital - redeemable non-controlling interests 19 —
(32,039 )
Dividends paid - redeemable non-controlling interests 19 —
(7,307 )
Capital increase - redeemable non-controlling interests 19 —
107,457
215,684
Other (20,655 ) (43,264 ) (1,548 )
Net cash used in financing activities (311,545 ) (246,972 ) (312,139 )

Net (decrease) increase in cash and cash equivalents, and restricted cash and cash equivalents (793,456 ) 711,982
(313,526 )
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents (197 ) 52,132
9,654
Cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period 1,305,430
541,316
845,188
Cash and cash equivalents, and restricted cash and cash equivalents at the end of the period 511,777
1,305,430
541,316

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International Game Technology PLC

Consolidated Statements of Cash Flows

($ ~~thousands)~~in millions)


	For the year ended December 31,
	2021	2020	2019
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	369	410	400
Income taxes	188	89	197

Non-cash investing and financing activities:
Capital expenditures	26	24	35

For the year ended December 31,
2018 2017 2016
Supplemental Cash Flow Information

Interest paid (445,698 ) (417,110 ) (450,655 )
Income taxes paid (239,831 ) (296,386 ) (183,278 )

Capital expenditures (51,805 ) (62,858 ) (76,174 )
Non-cash investing activities, net (51,805 ) (62,858 ) (76,174 )

Dividends declared - non-controlling interests —
(12,588 ) (12,696 )
Non-cash financing activities, net —
(12,588 ) (12,696 )

The accompanying notes are an integral part of these consolidated financial statements.

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International Game Technology PLC

Consolidated Statement of Shareholders’ Equity

($ ~~thousands)~~

in millions)


															Common Stock	Additional Paid-In Capital	Retained Deficit	Treasury Stock	Accumulated Other Comprehensive Income	Total IGT PLC Equity	Non- Controlling Interests	Total Equity
	Common Stock	Additional Paid-In Capital		Retained (Deficit) Earnings		Accumulated Other Comprehensive Income		Total IGT PLC Equity		Non- Controlling Interests		Total Equity
Balance at December 31, 2015	20,024	2,816,057		(13,271	)	194,838		3,017,648		348,494		3,366,142

Net income	—	—		211,337		—		211,337		45,413		256,750
Other comprehensive (loss) income, net of tax	—	—		—		(34,195	)	(34,195	)	203		(33,992	)
Total comprehensive income (loss)	—	—		211,337		(34,195	)	177,142		45,616		222,758

Capital increase	—	—		—		—		—		40,771		40,771
Stock-based compensation expense	—	26,346		—		—		26,346		—		26,346
Shares issued upon exercise of stock options	96	11,687		—		—		11,783		—		11,783
Shares issued under stock award plans	108	(1,448	)	—		—		(1,340	)	—		(1,340	)
Payment for accelerated stock awards	—	(3,489	)	—		—		(3,489	)	—		(3,489	)
Return of capital	—	—		—		—		—		(36,197	)	(36,197	)
Dividends paid	—	—		(161,179	)	—		(161,179	)	(46,016	)	(207,195	)
Other	—	608		1,180		—		1,788		4,298		6,086
Balance at December 31, 2016	20,228	2,849,761		38,067		160,643		3,068,699		356,966		3,425,665
Balance at December 31, 2018														Balance at December 31, 2018	20	2,534	(1,008)	—	262	1,808	944	2,752

Net (loss) income	—	—		(1,068,576	)	—		(1,068,576	)	55,400		(1,013,176	)	Net (loss) income	—	—	(19)	—	—	(19)	131	112
Other comprehensive income (loss), net of tax	—	—		—		179,526		179,526		(463	)	179,063		Other comprehensive income (loss), net of tax	—	—	—	—	1	1	(16)	(15)
Total comprehensive (loss) income	—	—		(1,068,576	)	179,526		(889,050	)	54,937		(834,113	)	Total comprehensive (loss) income	—	—	(19)	—	1	(18)	115	97

Stock-based compensation														Stock-based compensation	—	27	—	—	—	27	—	27
Capital increase	—	—		—		—		—		41,799		41,799		Capital increase	—	—	—	—	—	—	1	1
Stock-based compensation expense	—	4,704		—		—		4,704		—		4,704
Shares issued upon exercise of stock options	21	(3,566	)	—		—		(3,545	)	—		(3,545	)
Shares issued under stock award plans	95	(11,514	)	—		—		(11,419	)	—		(11,419	)	Shares issued under stock award plans	—	(2)	—	—	—	(2)	—	(2)
Return of capital	—	—		—		—		—		(51,211	)	(51,211	)	Return of capital	—	—	—	—	—	—	(99)	(99)
Dividends paid	—	(162,528	)	—		—		(162,528	)	(49,777	)	(212,305	)	Dividends paid	—	(164)	—	—	—	(164)	(137)	(300)
Other	—	(3	)	(1,863	)	—		(1,866	)	(2,778	)	(4,644	)	Other	—	—	7	—	—	7	2	9
Balance at December 31, 2017	20,344	2,676,854		(1,032,372	)	340,169		2,004,995		349,936		2,354,931
Balance at December 31, 2019														Balance at December 31, 2019	20	2,396	(1,020)	—	263	1,658	827	2,485

Net (loss) income	—	—		(21,350	)	—		(21,350	)	115,671		94,321		Net (loss) income	—	—	(898)	—	—	(898)	59	(839)
Other comprehensive loss, net of tax	—	—		—		(78,632	)	(78,632	)	(18,691	)	(97,323	)
Other comprehensive income, net of tax														Other comprehensive income, net of tax	—	—	—	—	67	67	59	127
Total comprehensive (loss) income	—	—		(21,350	)	(78,632	)	(99,982	)	96,980		(3,002	)	Total comprehensive (loss) income	—	—	(898)	—	67	(831)	119	(712)

Reclassification of redeemable non-controlling interests	—	—		—		—		—		377,243		377,243
Capital increase	—	—		—		—		—		319,254		319,254		Capital increase	—	—	—	—	—	—	9	9
Adoption of new accounting standards	—	—		45,527		—		45,527		—		45,527
Stock-based compensation expense	—	33,086		—		—		33,086		—		33,086
Shares issued upon exercise of stock options	15	(1,566	)	—		—		(1,551	)	—		(1,551	)
Shares issued under stock award plans	62	(11,153	)	—		—		(11,091	)	—		(11,091	)	Shares issued under stock award plans	—	(1)	—	—	—	(1)	—	(1)
Stock-based compensation														Stock-based compensation	—	(7)	—	—	—	(7)	—	(7)
Return of capital	—	—		—		—		—		(85,046	)	(85,046	)	Return of capital	—	—	—	—	—	—	(32)	(32)
Dividends paid	—	(163,236	)	—		—		(163,236	)	(114,337	)	(277,573	)	Dividends paid	—	(41)	—	—	—	(41)	(138)	(178)
Other	—	149		2		—		151		—		151		Other	—	—	(2)	—	—	(2)	—	(2)
Balance at December 31, 2018	20,421	2,534,134		(1,008,193	)	261,537		1,807,899		944,030		2,751,929
Balance at December 31, 2020														Balance at December 31, 2020	20	2,347	(1,920)	—	330	777	784	1,561

Net income														Net income	—	—	482	—	—	482	188	670
Other comprehensive income (loss), net of tax														Other comprehensive income (loss), net of tax	—	—	—	—	82	82	(52)	30
Total comprehensive income														Total comprehensive income	—	—	482	—	82	564	136	700

Stock-based compensation														Stock-based compensation	—	35	—	—	—	35	—	35
Capital increase														Capital increase	—	—	—	—	—	—	13	13
Shares issued under stock award plans														Shares issued under stock award plans	—	(12)	—	—	—	(12)	—	(12)
Divestiture of non-controlling interest														Divestiture of non-controlling interest	—	—	—	—	—	—	(30)	(30)
Repurchases of common stock														Repurchases of common stock	—	—	—	(41)	—	(41)	—	(41)
Return of capital														Return of capital	—	—	—	—	—	—	(127)	(127)
Dividends paid														Dividends paid	—	(41)	—	—	—	(41)	(91)	(132)
Other														Other	—	—	—	—	—	—	3	3
Balance at December 31, 2021														Balance at December 31, 2021	21	2,329	(1,439)	(41)	412	1,282	689	1,971

The accompanying notes are an integral part of these consolidated financial statements.

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International Game Technology PLC

Notes to the Consolidated Financial Statements


1.	~~Description of Business~~

1.Description of Business

International Game Technology PLC ~~a public limited company organized under the laws of England and Wales~~ (the ~~"Parent"~~“Parent”), ~~has its corporate headquarters at 66 Seymour Street, 2nd floor, London, W1H 5BT, United Kingdom. The Parent is the successor to GTECH S.p.A., a~~ ~~società 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~~(collectively referred to as “IGT PLC,” the “Company,” “we,” “our,” or “us”), is a global leader in ~~Providence, Rhode Island; Las Vegas, Nevada;~~gaming that delivers entertaining and ~~Rome, Italy.~~

~~When used in these notes, unless otherwise specified or the context otherwise indicates,~~responsible gaming experiences for players across all ~~references~~channels and regulated segments, from gaming machines and lotteries to ~~"IGT PLC," the "Company," "we," "our," or "us" refer to the business~~sports betting and ~~operations~~digital. We operate and provide an integrated portfolio of ~~the Parent and its consolidated subsidiaries.~~

~~We are a leading commercial operator and provider of technology in the regulated worldwide~~innovative gaming ~~markets that operates and provides a full range of services and leading-edge~~ technology products ~~across all~~and services, including: lottery management services, online and instant lottery systems, gaming ~~markets, including lotteries, machine~~systems, instant ticket printing, electronic gaming machines, sports betting, ~~interactive~~digital gaming, digital lottery, and commercial services. ~~Our state-of-the-art information technology platforms~~We have a local presence and ~~software enable distribution~~relationships with governments and regulators in more than 100 countries around the world.

2.Summary of ~~our products and services through land-based systems, internet and mobile devices.~~Significant Accounting Policies


2.	~~Summary of Significant Accounting Policies~~

Basis of Preparation

~~The accompanying~~Our consolidated financial statements and accompanying notes ~~of the Company have been~~are prepared in accordance with accounting principles generally accepted in the United States of America ~~("GAAP"~~(“GAAP”). The consolidated financial statements are stated in ~~thousands~~millions of United States (“U.S.”) dollars (except share and per share data) unless otherwise ~~indicated.~~indicated, and are computed based on the amounts in thousands. Certain amounts in columns and rows within tables may not foot due to rounding. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.

As further described in Note 3 - Discontinued Operations and Assets Held for Sale, on May 10, 2021, the Company completed the sale of its Italian B2C gaming machine, sports betting, and digital gaming businesses, which met the criteria to be reported as a discontinued operation during the fourth quarter of 2020. As a result, the historical financial results are reflected in the Company's consolidated financial statements as a discontinued operation, and assets and liabilities were classified as assets and liabilities held for sale at December 31, 2020.

Recasting of Certain Prior Period Information

During the third quarter of 2021, we modified the information that our chief operating decision maker, who was also our Chief Executive Officer, regularly reviewed for purposes of allocating resources and assessing performance, prompting a change in management, operating segments, and reporting units. As a result, beginning in the third quarter of 2021, we report our financial performance based on our new business segments described in Note 21 – Segment Information. We have ~~reclassified certain prior period amounts~~recast our historically presented comparative segment information to ~~align with the current period presentation. All references to “U.S. dollars,” “U.S. dollar” and “$” refer~~conform to the ~~currency of the United States of America. All references to "euro"~~way we internally manage and ~~"€" refer to the currency introduced at the start~~monitor segment performance as of the third ~~stage~~quarter of 2021. This change primarily impacted Note 4 - Revenue Recognition, Note 13 - Goodwill, andNote 21 – Segment Information, with no impact on consolidated revenue, net income, or cash flows.

Principles of Consolidation

The consolidated financial statements include the accounts of the ~~European Economic~~Parent, our majority-owned or controlled subsidiaries, and ~~Monetary Union pursuant~~any variable interest entities in which we are the primary beneficiary. Intercompany accounts and transactions have been eliminated in consolidation. Earnings or losses attributable to non-controlling interests in a subsidiary are included in net income (loss) in the ~~Treaty on~~consolidated statements of operations.

Investments in which we have the ~~Functioning~~ability to exercise significant influence, but do not control, and with respect to which we are not the primary beneficiary, are accounted for using the equity method of accounting. Equity investments in which we have no ability to exercise significant influence that do not have a readily determinable fair value and do not have a Net Asset Value per share are measured at cost, less impairment, plus or minus changes resulting from observable price changes. Equity method investments and equity investments in which we have no ability to exercise significant influence are included within other non-current assets in the ~~European Union, as amended.~~consolidated balance sheets.

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Use of Estimates

The preparation of our consolidated financial statements ~~in conformity with GAAP~~ requires ~~management~~us to make estimates, judgments, and assumptions ~~that~~which affect the reported amounts of assets, liabilities, equity, revenues and ~~liabilities~~expenses, and ~~disclosures~~related disclosure of ~~contingencies on the balance sheet dates and the reported amounts of revenue and expense during the reporting periods.~~

Wecontingent liabilities. On an ongoing basis we evaluate our estimates, ~~continuously~~judgments, and methodologies. We base ~~them~~our estimates on historical experience and on various other assumptions that we believe ~~to be~~are reasonable, ~~under~~ the ~~circumstances. Actual~~ results ~~may differ from these estimates if~~of which form the ~~assumptions prove incorrect. To~~basis for making judgments about the ~~extent there are material differences between~~carrying values of assets, liabilities, and equity, and the amount of revenues and expenses. Accordingly, actual results and ~~these estimates, our future results~~outcomes could be materially and adversely affected. We believe the accounting policies described below require us to make significant judgments and estimates in the preparation of our consolidated financial statements.

Our most critical accounting estimates include revenue recognition, allowance for doubtful accounts and credit losses, income taxes, legal and other contingencies and evaluation of long-lived assets for impairment.

~~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 we have the ability to control, through a majority voting interest or otherwise, or with respect to which we are the primary beneficiary, are consolidated. Intercompany accounts and transactions have been eliminated in the consolidation. 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.

Investments in affiliates, through which we have the ability to exercise significant influence, but do not control and with respect to which we are not the primary beneficiary, are accounted for using the equity method of accounting. Investments in affiliates through which we have no ability to exercise significant influence are accounted for using the cost method of accounting.

~~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 ("AOCI") within shareholders’ equity. We record gains and lossesdiffer from ~~currency transactions denominated in currencies other than the functional currency in the consolidated statement of operations.~~

those estimates.

Revenue ~~Recognition~~

We account for a contract with a customer when:


i.	~~we have written approval;~~


~~ii.~~	~~the contract is committed;~~


~~iii.~~	~~the rights of the parties, including payment terms, are identified;~~


~~iv.~~	~~the contract has commercial substance; and~~


v.	~~collectability~~ we have written approval; the parties are committed to perform their respective obligations; the rights of the parties, including payment terms, are identified; the contract has commercial substance; and collection of consideration is probable.

Performance obligations are identified at contract inception. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. If we enter into two or more contracts at or near the same time, the contracts may be combined and accounted for as one contract, in which case we determine whether the services or products in the combined contract are distinct. A service or product that is promised to a customer is distinct if both of the following criteria are met:

~~The~~the customer can benefit from the service or product either on its own or together with other resources that are readily available to the customer; and

~~Our~~ our promise to transfer the service or product to the customer is separately identifiable from other promises in the contract.

Revenue is recognized when (or as) control of a promised service or product transfers to a customer, in an amount that reflects the consideration (which represents the transaction price) to which we expect to be entitled in exchange for transferring that service or product. If the consideration promised in a contract includes a variable amount, we estimate the amount to which we expect to be entitled using either the expected value or most likely amount method. Our contracts may include terms that could cause variability in the consideration, including, for example, rebates, volume discounts, service-level penalties, and performance bonuses or other forms of contingent revenue.

Our standard payment terms dictate that payment is due upon receipt of invoice, payable within 30 days. Invoices are generally issued as control transfers and/or as services are rendered. Additionally, in determining the transaction price, we adjust the promised amount of consideration for the effects of the time value of money if the payment terms are not standard and the timing of payments agreed to by the parties to the contract provide the customer or the Company with a significant benefit of financing, in which case the contract contains a significant financing component. Most arrangements that contain a significant financing component include explicit financing terms.

We may include subcontractor services or third-party vendor services or products in certain arrangements. In these arrangements, revenue from sales of third-party vendor services or products are recorded net of costs when we are acting as an agent between the customer and the vendor, and gross when we are the principal for the transaction. To determine whether we are an agent or principal, we consider whether we obtain control of the services or products before they are transferred to the customer. In making this evaluation, several factors are considered, most notably whether we have primary responsibility for fulfillment to the customer, as well as inventory risk and pricing discretion.

Additional information on revenue recognition is included in Note 4.- Revenue Recognition.

Arrangements with Multiple Performance Obligations

We often enter into contracts that consist of a combination of services and products based on the needs of our customers, which may include post-contract support for the software and a contract for post-warranty maintenance service for the hardware. These contracts consist of multiple services and products, whereby the hardware and software may be delivered in one period and the software support and hardware maintenance services are delivered over time.

To the extent that a service or product in an arrangement with multiple performance obligations is subject to other specific accounting guidance, that service or product is accounted for in accordance with such specific guidance.

For all other distinct services and products in these arrangements, the arrangement transaction price is allocated to each performance obligation on a relative standalone selling price basis or another method that depicts the amount of consideration to which we expect to be entitled in exchange for transferring the promised services or products. If the services and products are

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not distinct, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation.

To the extent we grant the customer the option to acquire additional services or products in one of these arrangements, we account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that it would not receive without entering into the contract (i.e., a significant discount incremental to the range of discounts typically given for the service or product), in which case the customer in effect pays in advance for the option to purchase future services or products. We allocate a portion of the transaction price to the material right and recognize revenue when those future services or products are transferred or when the option expires.

Standalone Selling Price

We allocate the transaction price to each performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the price at which we would sell a promised service or product separately to a customer. In some instances, we are able to establish SSP based on the observable prices of services or products sold separately in comparable circumstances to a similar customer. We typically establish an SSP range for our services and products that are reassessed on a periodic basis or when facts and circumstances change.

In other instances, we may not be able to establish an SSP range based on observable prices, and we estimate the SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, competitive positioning, competitor actions, internal costs, profit objectives, and pricing practices. Estimating SSP is a formal process that includes review and approval by management.

Contract Costs

Certain eligible, non-recurring costs incurred in the initial phases of service contracts are capitalized and amortized ratably over the expected period of benefit, which includes anticipated contract renewals or extensions. Recurring operating costs in these contracts are recognized as incurred.

Practical Expedients and Exemptions

We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions.

We generally expense incremental costs of obtaining a contract (e.g., sales commissions) when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses in our consolidated statements of operations. For certain of our long-term contracts, recoverable costs are capitalized and amortized on a straight-line basis over the expected customer relationship period.

We do not account for significant financing components if the period between when we transfer the promised service or product to the customer and when the customer pays for that service or product will be one year or less.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) performance obligations for which we recognize revenue at the amount that we have the right to invoice for services performed, (iii) contracts for which variable consideration is accounted for in accordance with sales-based or usage-based royalty guidance, and (iv) wholly unperformed contracts.

Contract Assets and Liabilities

Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. Contract liabilities include deferred revenue, advance payments, and billings in excess of revenue recognized.

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 or modification date, based on the estimated fair value of the award and recognized as expense, net of estimated forfeitures, over the vesting periods. For awards subject to cliff vesting, compensation

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cost is recognized by way of a straight-line method over the award’s expected vesting period. For awards subject to graded vesting, compensation cost is recognized by way of an accelerated attribution method over the entire awards’ expected vesting periods.

Advertising

Advertising costs are expensed as incurred. Advertising expense was $33 million, $25 million, and $34 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Research and Development Costs

Research and development costs (“R&D”), which principally include employee compensation costs, are expensed as incurred.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of highly liquid investments purchased with an original maturity of three months or less at the date of acquisition, such as bank deposits, money market funds, and interest bearing bank accounts with insignificant interest rate risk. The fair value of cash and cash equivalents approximates the carrying amount.

Restricted Cash and Cash Equivalents

We are required by gaming regulations to maintain sufficient reserves in restricted cash accounts to be used for the purpose of funding payments to WAP jackpot winners. These restricted cash balances are based primarily on the jackpot meters displayed to slot players, or for previously won jackpots, and vary by jurisdiction. Under our Italian Lotto contract, we deposit wagers, net of prizes paid and retailer commissions retained by the retailer at point of sale, into bank accounts, the use of which is restricted based on the contract with our customer. Restricted cash is also maintained for interactive digital player deposits, collections on factored and serviced receivables not yet paid through to the third-party owner, and for customer funds received in relation to the provision of our commercial services. These amounts are restricted based on the contracts with our customers or local regulations.

Allowance for Credit Losses

We maintain an allowance for credit losses on receivables resulting from the expected failure or inability of our customers to make required payments. The allowance is regularly reviewed by considering factors such as the creditworthiness of our customers, historical experience, aging of receivables, and current market and economic conditions, as well as management’s expectations of future conditions when appropriate. The allowance is deducted from the amortized cost basis of the receivable to present the net amount expected to be collected.

We estimate expected credit losses on receivables on a collective (pool) basis when similar risk characteristics exist. Trade and other receivables and customer financing receivables represent the initial pools which are segregated further by business segment, geography, internal risk rating, and aging. The risk of loss is assessed over the contractual life of the receivables and we adjust historical loss rates for current and future conditions based on qualitative considerations. The expected loss rate for each receivable pool is applied to the aggregate receivable balance to determine the allowance requirement. Receivables are written off against the allowance in the period they are determined to be uncollectible.

We determine delinquency based on the contractual payment terms. An account may be considered delinquent if there are unpaid balances remaining on the account the day after the contractual due date.

For amounts due from certain government customers in the Global Lottery business segment, we have not established an allowance as we have no expectation of loss based on a long history of no credit losses and the explicit guarantee of a sovereign entity.

Inventories

Inventories are stated at the lower of cost (applying the first in, first out method) and net realizable value. Allowances are made for defective, obsolete, or excess inventory.

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Assets and Liabilities Held for Sale

We classify assets and liabilities (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal group; the disposal group is available for immediate sale in its present condition subject to terms customary for sales of such disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

We initially measure a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. We assess the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale.

Upon determining that a disposal group meets the criteria to be classified as held for sale, we report the assets and liabilities of the disposal group, if material, in the line items assets held for sale and liabilities held for sale in the consolidated balance sheet in each period presented. Refer to Note 3 -Discontinued Operations and Assets Held for Sale, for further information.

Systems, Equipment and Other Assets Related to Contracts, Net and Property, Plant and Equipment, Net

We have 2 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 our operating contracts, FMCs, and WAP systems (collectively, the “Contracts”) and are principally composed of lottery and gaming assets, including those that are accounted for as operating leases with our customers. PPE are assets we use internally, not associated with Contracts, primarily related to production and assembly, selling, general and administration, and R&D.

Systems & Equipment and PPE are stated at cost, net of accumulated depreciation and accumulated impairment loss, if any. Costs incurred for Systems & Equipment and PPE not yet placed into service are classified as construction in progress and are not depreciated until placed in service. Depreciation is recognized on a straight-line basis over the estimated useful lives of the assets. Repair and maintenance costs are expensed as incurred, whereas major improvements that increase asset values and extend useful lives are capitalized.

Systems & Equipment and PPE are tested for impairment whenever events or changes in circumstances indicate the carrying amount of those assets may not be recoverable. An impairment loss is recognized only if the carrying amount is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted forecasted cash flows resulting from the use and eventual disposition of such asset. An impairment loss is measured as the amount by which the carrying amount exceeds its fair value.

Goodwill

The assets and liabilities of acquired businesses are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. Goodwill represents costs in excess of fair values assigned to the underlying identifiable net assets of acquired businesses, and is stated at cost less accumulated impairment losses.

Goodwill has been allocated to and is tested for impairment at the reporting unit level, which is the same level as our operating segments. We evaluate our reporting units annually and if necessary, reassign goodwill using a relative fair value approach. As of December 31, 2021 we have identified 3 reporting units: Global Lottery, Global Gaming, and Digital & Betting.

Goodwill is tested for impairment annually, in the fourth quarter, or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount and an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. In performing the goodwill impairment test, we estimate the fair value of the reporting units using an income approach based on projected discounted cash flows. We have the option to first assess various qualitative factors (commonly

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referred to as “Step 0”) to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount and whether a quantitative analysis is necessary. If the Company does not elect to perform Step 0, it can voluntarily proceed directly to Step 1. In Step 1, the Company performs a quantitative analysis to compare the fair value of its reporting unit to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired, and the Company is not required to perform further testing. If the carrying value of a reporting unit exceeds its fair value, then the Company would record an impairment loss equal to the difference.

Other Intangible Assets

Other intangible assets, which include indefinite-lived and definite-lived intangible assets, are stated at cost, less accumulated amortization and accumulated impairment losses.

Indefinite-lived intangible assets are composed of trademarks for which there is no foreseeable limit of the period over which they are expected to generate net cash inflows. Definite-lived intangible assets, which are primarily composed of customer relationships and computer software and game library, are capitalized and amortized on a straight-line basis over their estimated economic lives. Estimated useful lives are determined considering the period the assets are expected to contribute to future cash flows. Amortization of software-related intangibles is included in cost of services and cost of product sales and amortization of other intangible assets is included in selling, general and administrative expenses in the consolidated statement of operations.

Indefinite-lived intangible assets other than goodwill are tested for impairment annually, in the fourth quarter, or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of indefinite-lived intangible assets are less than their carrying amount and whether the quantitative analysis is necessary. The quantitative analysis compares the fair value of indefinite-lived intangible assets to their carrying amount and an impairment loss is recognized when the carrying amount exceeds the fair value.

Capitalized Software Development Costs

Costs incurred in the development of our externally-sold software products are expensed as incurred, except certain software development costs eligible for capitalization. Software development costs incurred subsequent to establishing technological feasibility and through the general release of the software products are capitalized. Capitalized costs are amortized over the products’ estimated economic life to cost of product sales in the consolidated statements of operations.

Costs incurred during the application development phase of software for services provided to customers are capitalized as internal-use software and amortized over the useful life to cost of services in the consolidated statements of operations. Costs incurred during the application development of software for internal use, and not for use in services provided to customers, are capitalized and amortized over the useful life to selling, general and administrative expenses in the consolidated statements of operations.

Upfront License Fees

We periodically make long-term investments in contracts with customers and obtain licenses to supply products and services to our customers. As consideration, we pay license fees, which are classified as other non-current assets in the consolidated balance sheets. We recognize the amortization of the license fees as a reduction of service revenue over the estimated economic life of the license term. 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. We evaluate these assets for impairment and update amortization rates on an agreement by agreement basis. The assets are reviewed for impairment whenever events or changes in circumstances indicate their carrying amount may not be recoverable. In periods in which payments are made to the customer, we classify the payment as a cash outflow from operating activities in the consolidated statements of cash flows.

Jackpot Accounting

We incur costs to fund jackpots and accrue jackpot liabilities with every wager on devices connected to a WAP system. Jackpot liabilities are estimated based on the size of the jackpot, the number of WAP units in service, variations and volume of play, and interest rate movements. Jackpots are generally payable to winners immediately, in the case of instant wins, or in equal annual installments over 19 to 25 years. 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.

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Jackpot liabilities are composed of payments due to previous winners, and amounts due to future winners of 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 jackpot win. If the periodic liability is not initially funded with an annuity investment, it is discounted and accreted using the risk-free rate at the time of the jackpot win.

Liabilities due to future winners are recorded at the present value of the estimated amount of jackpots not yet won. We estimate the present value of these liabilities using current market rates, weighted with historical lump sum payout election ratios. Based on the most recent historical patterns, approximately 95% of winners will elect the lump sum payment option. The current portion of these liabilities are estimated based on historical experience with winner payment elections, in conjunction with the theoretical projected number of jackpots.

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. We evaluate our provisions for legal contingencies at least quarterly and, as appropriate, establish new provisions or adjust existing provisions to reflect the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings, and other relevant events and developments, the advice of counsel, and the assumptions and judgment of management. Legal costs are expensed as incurred.

Treasury Stock

We account for treasury stock acquisitions using the cost method. We account for the retirement of treasury stock by deducting its par value from common stock and reflecting any excess of cost over par value as a deduction from additional paid-in capital in the consolidated balance sheets.

Fair Value Measurements

We account for certain financial assets and liabilities at fair value. Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the use of observable inputs and the lowest priority to the use of unobservable inputs. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. These levels are as follows:

•Level 1 - inputs are based upon unadjusted quoted prices for identical instruments in active markets

•Level 2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the instruments

•Level 3 - inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability

Derivative Financial Instruments

We use derivative financial instruments for the management of foreign currency risks and interest rate risks. We do not enter into derivatives for speculative purposes. Derivatives are recognized as either assets or liabilities in the consolidated balance sheet at fair value. All derivatives are recorded gross, except netting of foreign exchange contracts and counterparty netting of interest receivable and payable related to interest rate swaps, as applicable. The accounting for changes in the fair value of a derivative depends on the nature of the hedge and the hedge effectiveness. Derivative gains and losses are reported in the consolidated statements of cash flows consistent with the classification of the cash flows from the underlying hedged items.

For derivative instruments designated as cash flow hedges, gains and losses are recorded in other comprehensive income (loss) and are subsequently reclassified when the hedged item affects earnings. At that time, the amount is reclassified from other comprehensive income (loss) to the same income statement line as the earnings effect of the hedged item.

For derivative instruments designated as fair value hedges, changes in fair value are recorded in interest expense and are offset by changes in the fair value of the underlying debt instrument due to changes in the benchmark interest rate. In the event the

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derivative instruments are subsequently de-designated as hedges, the change in fair value is recognized in interest expense, net in the consolidated statements of operations with no corresponding offset to debt.

For derivative instruments designated as net investment hedges, the spot portion of the derivative gain or loss is reported in foreign currency translation within other comprehensive income (loss) to offset any gains or losses on translation of the net investment in the subsidiary until the net investment is sold or liquidated, at which point the amounts are reclassified to earnings. All other components of the derivative fair value will be reported as either interest income or interest expense, on an amortized basis.

Derivative instruments not designated as hedges 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.

Leases

We determine whether a contract is or contains a lease at inception. As a lessee, we recognize right-of-use (“ROU”) assets and lease liabilities on the lease commencement date based on the present value of lease payments over the lease term. ROU assets also include any upfront lease payments or initial direct costs and are adjusted for lease incentives received.

We consider renewal and termination options, including whether they are reasonably certain to be exercised, in determining the lease term and establishing the ROU assets and lease liabilities. ROU assets and lease liabilities are calculated using our incremental borrowing rate, which is based on the lease currency and length of the lease, unless the implicit rate is determinable.

Most of our lease contracts contain both lease and non-lease components. As a lessee, we combine lease and non-lease components into a single lease component for all classes of underlying assets except certain communication equipment. For certain communication equipment, we allocate the consideration between lease and non-lease components based on relative standalone price. Lease expense is recognized on a straight-line basis over the lease term.

Variable lease payments are generally expensed as incurred except for certain rent payments that depend on an index, which are included in lease payments using the index rate in effect as of the lease commencement date.

Short-term leases, which are leases with an initial term of 12 months or less with no purchase options that are reasonably certain of exercise, are not recognized on the balance sheet. The rental payments are recognized as lease expense on a straight-line basis over the lease term.

Certain of our long term lottery and commercial gaming service arrangements include leases for equipment installed at customer locations. As the lessor, we combine lease and non-lease components for all classes of underlying assets in arrangements that involve operating leases. The single combined component is accounted for under ASC 842, Leases, or ASC 606, Revenue from Contracts with Customers (“ASC 606”), depending on which component is the predominant component in the arrangement. If a component cannot be combined, the consideration is allocated between the lease component and the non-lease component based on relative standalone selling price.

Income Taxes

Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using the enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enacted or substantively enacted date.

Accounting for uncertainty in income taxes recognized in the consolidated financial statements is in accordance with accounting authoritative guidance, which prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more likely than not” to be sustained, the tax position is then assessed to determine the amount of the benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement.

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We recognize interest and penalties related to unrecognized tax benefits in provision for income taxes in the consolidated statement of operations. Accrued interest and penalties are included within other non-current liabilities in the consolidated balance sheets.

We use the period cost method for global intangible low-taxed income (“GILTI”) provisions and therefore have not recorded deferred taxes for basis differences expected to reverse in future periods.

Foreign Currency Translation

The financial statements of subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars, with the resulting translation adjustments recorded as a component of accumulated other comprehensive income (“AOCI”) within shareholders’ equity. Assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet date, while income and expense items are translated using the average exchange rates during the period.

New Accounting Standards - Recently Adopted

In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842) - Lessors - Certain Leases with Variable Lease Payments (“ASU 2021-05”). This update requires sales-type or direct financing leases with variable payments that do not depend on a rate or an index and would have otherwise resulted in a day-one loss at lease commencement, to be classified as operating leases. The amendments in ASU 2021-05 are effective for annual periods beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted. The amendments can be applied retrospectively to leases that commenced or were modified on or after adoption of ASC 842, Leases, or prospectively to leases that commence or are modified on or after the date of adoption. We adopted ASU 2021-05 as of October 1, 2021 and applied the provisions prospectively to leases that commenced or were modified on or after October 1, 2021. The adoption did not have a material impact on our consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) (“ASU 2020-06”). This update simplifies the convertible debt accounting framework by reducing the number of accounting models used to account for convertible debt and preferred stock instruments. It also amends the accounting for certain contracts in an entity's own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies the diluted earnings per share calculations for convertible debt instruments. We adopted ASU 2020-06 as of January 1, 2021 using a modified retrospective approach. The adoption did not have a material impact on our consolidated financial statements and had no effect on earnings per share information in the period of adoption.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This update provides, among other things, simplifications for accounting for income taxes by removing certain exceptions. We adopted ASU 2019-12 as of January 1, 2021 and applied it prospectively. The adoption did not have a material impact on our consolidated financial statements.

New Accounting Standards - Not Yet Adopted

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments create an exception to the general recognition and measurement principal in ASC 805, Business Combinations to measure assets and liabilities acquired in a business combination at fair value. Instead, an acquirer in a business combination will be required to apply ASC 606 to recognize and measure contract assets and contract liabilities that result from contracts accounted for under ASC 606 on the acquisition date and will generally result in the acquirer recognizing amounts consistent with those recorded by the acquiree immediately before the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the timing and impact of adopting this guidance.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) - Scope (“ASU 2021-01”) to clarify that ASU 2020-04 may apply to certain derivative contracts and hedging relationships affected by changes in the interest rates used for margining, discounting, or contract price alignment in connection with reference rate reform activities. The

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amendments in ASU 2020-04 and ASU 2021-01 are effective upon issuance through December 31, 2022. We are currently evaluating these optional elections and the timing and impact of adopting this guidance.

We do not currently expect that any other recently issued accounting guidance will have a significant effect on the consolidated financial statements.

3.Discontinued Operations and Assets Held for Sale

On December 7, 2020, the Parent announced that its wholly-owned subsidiary, IGT Lottery S.p.A. (formerly Lottomatica Holding S.r.l.), had entered into a definitive agreement to sell 100 percent of the share capital of Lottomatica Videolot Rete S.p.A. and Lottomatica Scommesse S.r.l., the members of the IGT group which conducted its Italian B2C gaming machine, sports betting, and digital gaming businesses to Gamenet Group S.p.A. for a cash sale price of €950 million (€725 million of which was paid at closing, €100 million of which was paid on August 5, 2021, and the remaining €125 million of which is payable on September 30, 2022).

On May 10, 2021, the Company completed the sale and used the funds received at closing to pay transaction expenses and partially fund the May 20, 2021 full redemption of the 4.750% Senior Secured Euro Notes due February 2023 through the exercise of the make-whole call option. The consideration received, net of $139 million of cash and restricted cash transferred, was $1.0 billion and resulted in a pre-tax gain on sale of $396 million ($391 million net of tax).

Summarized financial information for discontinued operations is shown below:


	For the year ended December 31,
($ in millions)	2021	2020	2019
Total revenue	74	429	778

Operating income (1)	24	51	159

Income from discontinued operations before provision for (benefit from) income taxes	23	43	157
(Benefit from) provision for income taxes on discontinued operations	(1)	7	42
Gain on sale of discontinued operations before provision for income taxes	396	—	—
Provision for income taxes on sale of discontinued operations	5	—	—
Income from discontinued operations	415	37	114
Less: Net (loss) income attributable to non-controlling interests from discontinued operations	(2)	(5)	5
Income from discontinued operations attributable to IGT PLC	417	41	110

(1) Includes depreciation and amortization of $95 million and $100 million for the years ended 2020 and 2019, respectively. There was no depreciation and amortization in 2021.

The Company has continuing involvement with the businesses via a transition services agreement (“TSA”). As part of the TSA, the Company provides various telecommunications, information technology, and back-office services for which the Company will continue to receive compensation. These services generally expire after no more than three years.

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The following represents the major classes of assets and liabilities held for sale as part of our discontinued operations:


						December 31,
($ in millions)						2020
Assets:
Trade and other receivables, net						62
Other current assets						58
Systems, equipment and other assets related to contracts, net						86
Goodwill						520
Intangible assets, net						55
Other non-current assets						52
Assets held for sale						833
Liabilities:
Accounts payable						63
Other current liabilities						164
Other non-current liabilities						23
Liabilities held for sale						250

The Company allocated $520 million of goodwill to discontinued operations using a relative fair value approach. Prior to the allocation to discontinued operations, the goodwill was included within our Global Gaming segment.

At December 31, 2021 and 2020, there were $4 million and $5 million, respectively, of other disposal groups that meet the requirements to be classified as held for sale included in assets held for sale in our consolidated balance sheets.

4. Revenue Recognition

Disaggregation of Revenue

The following tables summarize revenue disaggregated by business segment and the source of the revenue for the years ended December 31, 2021, 2020, and 2019:


	For the year ended December 31, 2021
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	2,363	—	—	2,363
Gaming terminal services	—	424	—	424
Digital and betting services	—	—	163	163
Systems, software, and other	327	206	—	534
Service revenue	2,690	630	163	3,483

Lottery products	123	—	—	123
Gaming terminals	—	339	—	339
Other	—	143	1	144
Product sales	123	482	1	606
Total revenue	2,812	1,112	165	4,089

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	For the year ended December 31, 2020
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	1,744	—	—	1,744
Gaming terminal services	—	298	—	298
Digital and betting services	—	—	114	114
Systems, software, and other	299	186	—	484
Service revenue	2,043	483	114	2,640

Lottery products	121	—	—	121
Gaming terminals	—	205	—	205
Other	—	148	1	149
Product sales	121	354	1	476
Total revenue	2,164	837	115	3,115


	For the year ended December 31, 2019
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	1,931	—	—	1,931
Gaming terminal services	—	568	—	568
Digital and betting services	—	—	76	76
Systems, software, and other	252	274	—	527
Service revenue	2,183	842	76	3,101

Lottery products	110	—	—	110
Gaming terminals	—	581	—	581
Other	—	225	15	240
Product sales	110	806	15	931
Total revenue	2,293	1,648	91	4,032

Sources of Revenue

Service Revenue

Service revenue is derived from the following sources:

•Operating and ~~Facilities Management Contracts;~~facilities management contracts;

~~Lottery Management Agreements ("LMA");~~•Gaming terminal services;

~~Machine Gaming;~~•Digital and betting services; and

~~Other Services.~~•Systems, software, and other

Operating and Facilities Management Contracts – Global Lottery

Our revenue from operating contracts ~~primarily from the Italy segment,~~ is derived primarily from long-term exclusive operating ~~licenses.~~licenses in Italy. Under operating contracts, we manage 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 most cases, the arrangement is accounted for as a single performance obligation composed of a series of distinct services that are substantially the same and have the same pattern of transfer ~~(e.g.~~(i.e., distinct days of service).

Under operating contracts, we typically satisfy the performance obligation and recognize revenue over time because the customer simultaneously receives and consumes the benefits provided as we perform the services. The amount of consideration

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to which we are typically entitled is variable based on a percentage of sales. Revenue is typically recognized in the amount that we have the right to invoice the customer as this corresponds directly with the value to the customer of our performance completed ~~performance.~~to date. In arrangements where we are performing services on behalf of the government and the government is considered our customer, revenue is recognized net of prize payments, taxes, retailer commissions, and remittances to state authorities.

Under operating contracts, we are generally required to pay an upfront license fee. ~~When such upfront license payments are made~~Refer to ~~our customers,~~ the ~~payment is recorded as a non-current asset and amortized ratably as a reduction of service revenue over the period of usage of the license.~~Upfront License Fees policy above for further details.

Our revenue from facilities management contracts ~~("FMC"~~(“FMC”) is generated by ~~constructing,~~assembling, installing, and operating the online lottery system and related point-of-sale equipment. Under a typical FMC, we maintain ownership of the technology and are responsible for capital investments throughout the duration of the contract. FMCs typically include a wide range of support services that are provided throughout the contract and are part of the integrated solution that the customer has contracted to obtain. In most cases, the arrangement is accounted for as a single performance obligation composed of a series of distinct services that are substantially the same and that have the same pattern of transfer. Under FMCs, we typically satisfy the performance obligation and recognize revenue over time because the customer simultaneously receives and consumes the benefits provided as we perform the services. The amount of transaction price to which we are entitled is typically variable based on a percentage of ~~sales.~~sales, although under certain of its agreements, the Company receives fees based on a fixed fee arrangement. Revenue is typically recognized in the amount that we have the right to invoice the customer, as this corresponds directly with the value to the customer of our completed performance.

~~Lottery Management Agreements~~Gaming terminal services – Global Gaming

Our revenue from LMAs is primarily derived from two exclusive contracts within the North America Lottery segment. Similar to operating contracts, under LMAs we manage 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. The arrangement is a single performance obligation composed of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). In LMAs, we satisfy the performance obligation and recognize revenue over time because the customer simultaneously receives and consumes the benefits provided as we perform the services. These contracts are annual cost reimbursable contracts with incentives based on the achievement of contractual metrics. Annually, we estimate the amount of incentive to which we expect to be entitled and recognize the incentive and gross revenues on costs incurred as we perform the service. Changes in the annual estimated incentive are made cumulatively each reporting period.

Under LMAs, we can be required to pay an upfront license fee. When such upfront license payments are made to our customers, the payment is recorded as a non-current asset and amortized ratably as a reduction of service revenue over the period of usage of the license.

~~Machine Gaming~~

~~Our revenue from machine~~ gaming terminal services is generated by providing customers with proprietary land-based gaming systems and equipment under a variety of recurring revenue or lease arrangements, including a percentage of ~~coin-in (amounts wagered),~~amounts wagered, a percentage of net win, or a fixed daily/monthly fee.

Included in ~~machine~~ gaming terminal services are ~~Wide Area Progressive ("WAP"~~wide area progressive (“WAP”) systems. WAP systems consist of linked slot machines located in multiple casino properties, connected to a central computer system. WAP systems include a Company-sponsored progressive jackpot that 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. Since the jackpot is a payment to the customer, the portion allocated to the jackpot is classified as a reduction of revenue.

In some arrangements, there is a single performance obligation composed of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The amount of transaction price to which we are entitled typically is variable based on a percentage of wagers. This results in revenue recognition that corresponds with the value to the customer for the services transferred in the amount that we have the right to invoice. In other arrangements where the end customer is the player, we record revenue net of prize payouts once the wagering outcome has been determined.

~~Other Services~~Digital and betting services – Digital & Betting

We ~~also~~ generate revenue from ~~other services, including sports betting~~our iGaming solutions by providing gaming operators a license to offer IGT remote game server games on the operator websites and ~~commercial services.~~mobile applications. We typically offer customers a usage-based license under which we receive a fee based on the net gaming revenue derived by the operator attributable to the IGT remote game server games. Revenue is typically recognized when the usage occurs.

We provide sports betting technology and services to ~~lotteries~~commercial and ~~commercial~~tribal operators and lotteries in regulated markets, primarily in ~~Italy and other countries in Europe as well as in~~ the U.S. ~~We currently offer two types of~~In the service contracts to our U.S. licensed sportsbook operators, we host a sports betting ~~services: fixed odds contracts~~platform and ~~sports pools arrangements.~~

~~In fixed odds contracts,~~a variety of services including installation, configuration and integration services. For customers who want to have an outsourcing model, we ~~establish and assume~~also offer trading services with the ~~risks related to the odds. The potential payout is fixed at the time bets are placed and we bear the risk~~inclusion of odds ~~setting. We are responsible for collecting the wagers, paying prizes,~~setting and ~~paying fees to retailers. We retain the remaining amounts as profits.~~risk management. Under these contracts, we generally record a percentage of net sports revenue ~~net of prize payouts, once~~over the ~~wagering outcome has been determined.~~contractual term.

Systems, software, and other – Global Lottery

Our revenue from sports pools arrangements is derived from the management of sports pools where the 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 playerslottery contracts generally include other services, including telephone support, software maintenance, hardware maintenance, and the ~~size~~right to receive unspecified upgrades or enhancements on a when-and-if-available basis, and other professional services including software development. Fees earned for other services are generally recognized as service revenue in the period the service is performed (i.e., over the support period).

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Ta ble of the pool. Under sports pools arrangements, we collect the wagers, pay prizes, pay a percentage fee to retailers, withhold our fee, and remit the balance to the respective regulatory agency. We assume no risk associated with sports pool wagering. We record revenue net of prize payouts, retailer commissions, and remittances to state authorities once the event occurs.Contents

We also develop technology to enable lotteries to offer commercial services over their existing lottery infrastructure or over standalone networks separate from the lottery. Leveraging our distribution network and secure transaction processing, we offer high-volume processing of commercial transactions ~~including:~~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 of North America. In most cases, these arrangements are considered to be short in duration. The amount of transaction price that we are typically entitled to is variable based on the number of transactions processed. Revenue is typically recognized in the amount that we have the right to invoice the customer as this corresponds directly with the value to the customer of our completed performance.

Systems, software, and other – Global Gaming

Our gaming contracts generally include other services, including telephone support, software maintenance, content licensing, royalty fees, hardware maintenance, and the right to receive unspecified ~~upgrades~~updates or enhancements on a when-and-if-available basis, and other professional services. We also generate revenue from other services, including video central system monitoring, system support, and sales or usage-based licensing of intellectual property. Fees earned for other ~~professional~~ services are generally recognized as service revenue in the period the service is performed (i.e., over the support period).

~~Product Sales~~Upfront License Fees

~~Product sales~~

Jackpot Accounting

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Legal and Other Contingencies

Treasury Stock

Fair Value Measurements

•Level 1 - inputs are based upon unadjusted quoted prices for identical instruments in active markets

•Level 3 - inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability

Derivative Financial Instruments

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Leases

Income Taxes

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Foreign Currency Translation

New Accounting Standards - Recently Adopted

New Accounting Standards - Not Yet Adopted

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We do not currently expect that any other recently issued accounting guidance will have a significant effect on the consolidated financial statements.

3.Discontinued Operations and Assets Held for Sale

Summarized financial information for discontinued operations is shown below:


	For the year ended December 31,
($ in millions)	2021	2020	2019
Total revenue	74	429	778

Operating income (1)	24	51	159

Income from discontinued operations before provision for (benefit from) income taxes	23	43	157
(Benefit from) provision for income taxes on discontinued operations	(1)	7	42
Gain on sale of discontinued operations before provision for income taxes	396	—	—
Provision for income taxes on sale of discontinued operations	5	—	—
Income from discontinued operations	415	37	114
Less: Net (loss) income attributable to non-controlling interests from discontinued operations	(2)	(5)	5
Income from discontinued operations attributable to IGT PLC	417	41	110

(1) Includes depreciation and amortization of $95 million and $100 million for the years ended 2020 and 2019, respectively. There was no depreciation and amortization in 2021.

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The following represents the major classes of assets and liabilities held for sale as part of our discontinued operations:


						December 31,
($ in millions)						2020
Assets:
Trade and other receivables, net						62
Other current assets						58
Systems, equipment and other assets related to contracts, net						86
Goodwill						520
Intangible assets, net						55
Other non-current assets						52
Assets held for sale						833
Liabilities:
Accounts payable						63
Other current liabilities						164
Other non-current liabilities						23
Liabilities held for sale						250

4. Revenue Recognition

Disaggregation of Revenue

The following tables summarize revenue disaggregated by business segment and the source of the revenue for the years ended December 31, 2021, 2020, and 2019:


	For the year ended December 31, 2021
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	2,363	—	—	2,363
Gaming terminal services	—	424	—	424
Digital and betting services	—	—	163	163
Systems, software, and other	327	206	—	534
Service revenue	2,690	630	163	3,483

Lottery products	123	—	—	123
Gaming terminals	—	339	—	339
Other	—	143	1	144
Product sales	123	482	1	606
Total revenue	2,812	1,112	165	4,089

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	For the year ended December 31, 2020
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	1,744	—	—	1,744
Gaming terminal services	—	298	—	298
Digital and betting services	—	—	114	114
Systems, software, and other	299	186	—	484
Service revenue	2,043	483	114	2,640

Lottery products	121	—	—	121
Gaming terminals	—	205	—	205
Other	—	148	1	149
Product sales	121	354	1	476
Total revenue	2,164	837	115	3,115


	For the year ended December 31, 2019
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	1,931	—	—	1,931
Gaming terminal services	—	568	—	568
Digital and betting services	—	—	76	76
Systems, software, and other	252	274	—	527
Service revenue	2,183	842	76	3,101

Lottery products	110	—	—	110
Gaming terminals	—	581	—	581
Other	—	225	15	240
Product sales	110	806	15	931
Total revenue	2,293	1,648	91	4,032

Sources of Revenue

Service Revenue

Service revenue is derived from the following sources:

~~Lottery~~•Operating and ~~gaming machines, including game content;~~facilities management contracts;

•Gaming terminal services;

•Digital and betting services; and

~~Lottery~~•Systems, software, and ~~gaming systems~~other

Operating and ~~other.~~Facilities Management Contracts – Global Lottery

~~Lottery and Gaming Machines, including Game Content~~

Our revenue from operating contracts is derived primarily from long-term exclusive operating licenses in Italy. Under operating contracts, we manage all the ~~sale~~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 most cases, the arrangement is accounted for as a single performance obligation composed of ~~lottery~~a series of distinct services that are substantially the same and ~~gaming machines includes game content, non-machine gaming services related equipment, licensing and royalty fees, and component parts (including game themes and electronics conversion kits)~~have the same pattern of transfer (i.e., distinct days of service). ~~Our credit terms are predominantly short-term in nature. We also grant extended payment terms under~~

Under operating contracts, ~~where the sale is~~we typically secured by the related equipment sold. Revenue from the sale of lottery and gaming machines is recognized based upon the contractual terms of each arrangement, but predominantly upon transfer of physical possession of the goods or the lapse of customer acceptance provisions. If the sale of lottery and gaming machines include multiple performance obligations, these arrangements are accounted

~~for under arrangements with multiple performance obligations, discussed below.~~

~~Lottery and Gaming Systems and Other~~

Our revenue from the sale of lottery systems and gaming systems typically includes multiple performance obligations, where we construct, sell, deliver and install a turnkey system (inclusive of point-of-sale terminals, if applicable) or deliver equipment and license the computer software for a fixed price, and the customer subsequently operates the system. These arrangements generally include customer acceptance provisions and general rights to terminate the contract if we are in breach of the contract or at the convenience of the customer. Such arrangements include hardware, software, and professional services. In these arrangements,satisfy the performance obligation ~~is satisfied~~and recognize revenue over time ifbecause the customer ~~controls~~simultaneously receives and consumes the ~~asset~~benefits provided as ~~it is created (i.e., when~~we perform the asset is built at the customer site) or if our performance does not create an asset with an alternative use and we have an enforceable right to payment plus a reasonable profit for performance completed to date. If revenue is not recognized over time, it is recognized based upon the contractual terms of each arrangement, but predominantly upon transfer of physical possession of the goods or the satisfaction of customer acceptance provisions. Our other product sales are primarily derived from the production and sales of instant ticket games under multi-year contracts. In these arrangements, the performance obligation is generally satisfied at a point in time (i.e., upon transfer of control of the game tickets to the customer) based on the contractual terms of each arrangement.

~~Arrangements with Multiple Performance Obligations~~

We often enter into contracts that consist of any combination of services and products based on the needs of our customers, which may include post-contract support for the software and a contract for post-warranty maintenance service for the hardware. These contracts consist of multiple services and products, whereby the hardware and software may be delivered in one period and the software support and hardware maintenance services are delivered over time.

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to which we ~~expect to be~~are typically entitled ~~in exchange for transferring the promised services or products. If the services and products are not distinct, we determine an appropriate measure of progress~~is variable based on ~~the nature~~a percentage of ~~our overall promise for the single performance obligation.~~

~~To the extent we grant the customer the option to acquire additional services or products~~sales. Revenue is typically recognized in one of these arrangements, we account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that it would not receive without entering into the contract (i.e., a discount incremental to the range of discounts typically given for the service or product), in which case the customer in effect pays in advance for the option to purchase future services or products. We recognize revenue when those future services or products are transferred or when the option expires.

~~Standalone Selling Price~~

We allocate the transaction price to each performance obligation on a relative standalone selling price ("SSP") basis. The SSP is the price at which we would sell a promised service or product separately to a customer. In some instances, we are able to establish SSP based on the observable prices of services or products sold separately in comparable circumstances to a similar customer. We typically establish an SSP range for our services and products that are reassessed on a periodic basis or when facts and circumstances change.

In other instances, we may not be able to establish an SSP range based on observable prices and we estimate the SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, competitive positioning, competitor actions, internal costs, profit objectives and pricing practices. Estimating SSP is a formal process that includes review and approval by management.

~~Contract Costs~~

Certain eligible, non-recurring costs incurred in the initial phases of service contracts are deferred and amortized ratably over the expected period of benefit, which includes anticipated contract renewals or extensions. Recurring operating costs in these contracts are recognized as incurred.

~~Practical Expedients and Exemptions~~

~~We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions.~~

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses in our consolidated statements of operations. For certain of our long-term contracts, we capitalize and amortize incremental costs of obtaining a contract (e.g., sales commissions) on a straight-line basis over the expected customer relationship period if we expect to recover those costs.

~~We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at~~ the amount that we have the right to invoice ~~for~~the customer as this corresponds directly with the value to the customer of our performance completed to date. In arrangements where we are performing services ~~performed.~~

~~Contract Assets~~on behalf of the government and ~~Liabilities~~

~~Contract assets arise from contracts when~~the government is considered our customer, revenue is recognized net of prize payments, taxes, retailer commissions, and remittances to state authorities. Under operating contracts, we are generally required to pay an upfront license fee. Refer to the Upfront License Fees policy above for further details.

Our revenue from facilities management contracts (“FMC”) is generated by assembling, installing, and operating the online lottery system and related point-of-sale equipment. Under a typical FMC, we maintain ownership of the technology and are responsible for capital investments throughout the duration of the contract. FMCs typically include a wide range of support services that are provided throughout the contract and are part of the integrated solution that the customer has contracted to obtain. In most cases, the arrangement is accounted for as a single performance obligation composed of a series of distinct services that are substantially the same and that have the same pattern of transfer. Under FMCs, we typically satisfy the performance obligation and recognize revenue over time because the customer simultaneously receives and consumes the benefits provided as we perform the services. The amount of transaction price to which we are entitled is typically variable based on a percentage of sales, although under certain of its agreements, the Company receives fees based on a fixed fee arrangement. Revenue is typically recognized in the amount ~~of revenue recognized exceeds the amount billed to the customer. These amounts are included in contract assets until~~that we have the right to ~~payment is no longer conditional on events other than~~invoice the ~~passage of time. Contract liabilities include deferred revenue, advance payments and billings in excess of revenue recognized.~~

~~Prior Accounting Standards~~

~~Prior to January 1, 2018, the Company recognized revenue under Accounting Standards Codification ("ASC") 605,~~ ~~Revenue Recognition~~ ~~("ASC 605") and ASC 985,~~ ~~Software~~ ~~("ASC 985"). Our accounting policies under Accounting Standards Update ("ASU") 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~ ~~("ASC 606"), are materially similar to our prior accounting policies~~customer, as this corresponds directly with the ~~following differences:~~value to the customer of our completed performance.

~~The Company recognized~~Gaming terminal services – Global Gaming

Our revenue ~~when persuasive evidence~~from gaming terminal services is generated by providing customers with proprietary land-based gaming systems and equipment under a variety of ~~an arrangement existed, delivery had occurred,~~recurring revenue or lease arrangements, including a percentage of amounts wagered, a percentage of net win, or a fixed daily/monthly fee.

Included in gaming terminal services 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 systems include a Company-sponsored progressive jackpot that increases with every wager until a player wins the ~~sales price was fixed~~top award combination. Casinos with WAP machines pay a percentage of amounts wagered for services related to the design, assembly, installation, operation, maintenance, and ~~determinable and collectability was reasonably assured (or probable under ASC 985, Software);~~

The Company allocated the transaction price based on the relative selling price for each element determined using vendor-specific objective evidence (“VSOE”), if available, third-party evidence (“TPE”) or best estimate of selling price (“BESP”) if neither VSOE nor TPE were available. The Company’s process for determining relative selling price was materially the same as its current allocationmarketing of the ~~transaction price~~WAP systems, as well as funding and administration of Company-sponsored progressive jackpots. A portion of the total fee collected is allocated to ~~each performance obligation; and~~

~~Jackpot expense for our~~the WAP ~~services were recognized as~~jackpot. Since the jackpot is a ~~cost of service, whereas similar payments under ASC 606 are recognized~~payment to the customer, the portion allocated to the jackpot is classified as a reduction of revenue.

Digital and betting services – Digital & Betting

We generate revenue from our iGaming solutions by providing gaming operators a license to offer IGT remote game server games on the operator websites and mobile applications. We typically offer customers a usage-based license under which we receive a fee based on the net gaming revenue derived by the operator attributable to the IGT remote game server games. Revenue is typically recognized when the usage occurs.

We provide sports betting technology and services to commercial and tribal operators and lotteries in regulated markets, primarily in the U.S. In the service contracts to our U.S. licensed sportsbook operators, we host a sports betting platform and a variety of services including installation, configuration and integration services. For customers who want to have an outsourcing model, we also offer trading services with the inclusion of odds setting and risk management. Under these contracts, we generally record a percentage of net sports revenue over the contractual term.

Systems, software, and other – Global Lottery

Our lottery contracts generally include other services, including telephone support, software maintenance, hardware maintenance, and the right to receive unspecified upgrades or enhancements on a when-and-if-available basis, and other professional services including software development. Fees earned for other services are generally recognized as service revenue in the period the service is performed (i.e., over the support period).

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We also develop technology to enable lotteries to offer commercial services over their existing lottery infrastructure or over standalone networks separate from the lottery. Leveraging our distribution network and secure transaction processing, we offer 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 of North America. In most cases, these arrangements are considered to be short in duration. The amount of transaction price that we are typically entitled to is variable based on the number of transactions processed. Revenue is typically recognized in the amount that we have the right to invoice the customer as this corresponds directly with the value to the customer of our completed performance.

Systems, software, and other – Global Gaming

Our gaming contracts generally include other services, including telephone support, software maintenance, content licensing, royalty fees, hardware maintenance, and the right to receive unspecified updates or enhancements on a when-and-if-available basis, and other professional services. We also generate revenue from other services, including video central system monitoring, system support, and sales or usage-based licensing of intellectual property. Fees earned for other services are generally recognized as service revenue in the period the service is performed (i.e., over the support period).

~~Upfront License Fees~~Other Intangible Assets

Other intangible assets, which include indefinite-lived and definite-lived intangible assets, are stated at cost, less accumulated amortization and accumulated impairment losses.

~~We periodically make long-term investments in contracts with customers and obtain licenses~~

Indefinite-lived intangible assets are composed of trademarks for which there is no foreseeable limit of the period over which they are expected to ~~supply products and services to the customers. As consideration, we pay license fees,~~generate net cash inflows. Definite-lived intangible assets, which are ~~classified as~~primarily composed of customer relationships and computer software and game library, are capitalized and amortized on a straight-line basis over their estimated economic lives. Estimated useful lives are determined considering the period the assets are expected to contribute to future cash flows. Amortization of software-related intangibles is included in cost of services and cost of product sales and amortization of other ~~non-current~~intangible assets is included in selling, general and administrative expenses in the consolidated ~~balance sheets. We recognize the amortization~~statement of ~~the license fees as a reduction of service revenue over the estimated economic life of the license term. This method reflects the pattern in which economic benefits~~operations.

Indefinite-lived intangible assets other than goodwill 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. We evaluate these assets~~tested for impairment ~~and update amortization rates on an agreement by agreement basis. The assets are reviewed for impairment~~annually, in the fourth quarter, or whenever events or changes in circumstances indicate ~~their~~the carrying amount may not be recoverable. ~~In periods in which payments are made~~We first perform a qualitative assessment to ~~the customer, we classify the payment as a cash outflow from operating activities in the consolidated statements of cash flows.~~

~~Jackpot Accounting~~

We incur costs to fund jackpots and accrue jackpot liabilities with every wager on devices connected to a WAP system. Jackpot liabilities are estimated based on the size of the jackpot, the number of WAP units in service, variations and volume of play, and interest rate movements. Jackpots are generally payable to winners immediately, in the case of instant wins, or in equal annual installments over 20 to 26 years. 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.

Liabilities due to future winners are recorded at the present value of the estimated amount of jackpots not yet won. We estimate the present value of these liabilities using current market rates, weighted with historical lump sum payout election ratios. Based on the most recent historical patterns, approximately 85% of winners will elect the lump sum payment option. The current portion of these liabilities are estimated based on historical experience with winner payment elections, in conjunction with the theoretical projected number of jackpots.

~~Cash and Cash Equivalents~~

Cash and cash equivalents consist primarily of highly liquid investments purchased with an original maturity of three months or less at the date of acquisition, such as bank deposits, money market funds and interest bearing bank accounts with insignificant interest rate risk.

~~Restricted Cash and Cash Equivalents~~

We are 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. These restricted cash balances are based primarily on the jackpot meters displayed to slot players or for previously won jackpots and vary by jurisdiction. Under our Italian Lotto contract, we deposit wagers, net of prizes paid and retailer commissions retained by the retailer at point of sale, into bank accounts, the use of which is restricted based on the contract with our customer. Restricted cash is also maintained for interactive online player deposits, collections on factored and serviced receivables not yet paid through to the third-party owner, and for customer funds received in relation to the provision of our commercial services. These amounts are restricted based on the contracts with our customers or local regulations.

~~Restricted cash equivalents are primarily composed of publicly-traded foreign government and corporate bonds and mutual funds, and are valued using quoted market prices.~~

~~Allowance for Credit Losses~~

We maintain 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 our customers, historical experience and 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.

We determine our 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 six 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.

~~Fair Value of Financial Instruments~~

~~Financial Accounting Standards Board ("FASB") ASC 820,~~ ~~Fair Value Measurement~~, 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. The fair value measurement hierarchy prioritizes the inputs to valuation techniques used to measure fair value as follows:

~~Level 1: Valuations based on inputs such as unadjusted quoted prices for identical assets or liabilities in active markets that the entity has the ability to access.~~

Level 2: Valuations based on inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

~~Level 3: Valuation based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. A financial instrument’s fair value classification is based on the lowest level of any input that is significant in the fair value measurement hierarchy. Valuation methods and assumptions used to estimate fair value, when Level 1 inputs 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, we~~ determine 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, trade and other receivables, other current assets, accounts payable, and other current liabilities approximate fair value due to relatively short periods to maturity.

~~Derivative Financial Instruments~~

For derivative instruments designated as cash flow hedges, gains and losses are recorded in other comprehensive income and are subsequently reclassified when the hedged item affects earnings. At that time, the amount is reclassified from other comprehensive income to the same income statement line as the earnings effect of the hedged item.

For derivative instruments designated as fair value hedges, changes in fair value are recorded in interest income (expense) and are offset by changes in the fair value of the underlying debt instrument due to changes in the benchmark interest rate.

For derivative instruments designated as net investment hedges, the spot portion of the derivative gain or loss is reported in foreign currency translation within other comprehensive income to offset any gains or losses on translation of the net investment in the subsidiary. All other components of the derivative fair value will be reported in income, as either interest income or interest expense, on an amortized basis.

Derivative instruments not designated as hedges 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.

~~Concentrations of Risks~~

Financial instruments that potentially subject us to concentration of credit risk consist principally of bank deposits, short and long-term investments, trade receivable, customer financing receivables and foreign currency exchange contracts. Deposits held with banks in the United States may exceed the amount of Federal Deposit Insurance Corporation ("FDIC") insurance provided on such deposits. Deposits held with banks outside the United States generally do not benefit from FDIC insurance. The majority of our day-to-day banking operations globally are maintained with major, financially sound counterparties with high-grade credit ratings, and we limit our exposure to any one counterparty.

We provide credit to customers in the normal course of business. Credit is extended to new customers based on checks of credit references, credit scores and industry reputation. Credit is extended to existing customers based on prior payment history and demonstrated financial stability. The credit risk associated with trade and customer financing receivables is generally limited due to the large number of customers and their geographic dispersion. We establish an allowance for the estimated uncollectible portion of trade and customer financing receivables. Product sales are generally dispersed among a large number of customers, minimizing the reliance on any particular customer or group of customers.

The counterparties to our foreign currency exchange contracts consist of a number of major financial institutions. In addition to limiting the amount of contracts we enter into with any one party, we monitor the credit quality of the counterparties on an ongoing basis.

We purchase or license many sophisticated components and products from one or a limited number of qualified suppliers. If any of our suppliers were to cancel or materially change contracts or commitments with the Company or fail to meet the quality or delivery requirements needed to satisfy customer orders for our products, we could lose customer orders. We attempt to minimize this risk by finding alternative suppliers or maintaining adequate inventory levels.

~~Inventories~~

~~Inventories are stated at the lower of cost (applying the first in, first out method) and net realizable value. Allowances are made for defective, obsolete or excess inventory.~~

~~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. We evaluate our provisions for legal contingencies at least quarterly and, as appropriate, establish new provisions or adjust existing provisions to reflect the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments; the advice of counsel; and the assumptions and judgment of management. Legal costs are expensed as incurred.

~~Income Taxes~~

Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using the enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that ~~some or all~~the fair value of indefinite-lived intangible assets are less than their carrying amount and whether the quantitative analysis is necessary. The quantitative analysis compares the fair value of indefinite-lived intangible assets to their carrying amount and an impairment loss is recognized when the carrying amount exceeds the fair value.

Capitalized Software Development Costs

Costs incurred in the development of our externally-sold software products are expensed as incurred, except certain software development costs eligible for capitalization. Software development costs incurred subsequent to establishing technological feasibility and through the general release of the ~~deferred tax assets will not be realized. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enacted or substantively enacted date.~~

Accounting for uncertainty in income taxes recognized in the consolidated financial statements is in accordance with accounting authoritative guidance, which prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed "more likely than not" to be sustained, the tax position is then assessed to determine the amount of the benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement.

~~We recognize interest and penalties related to unrecognized tax benefits on the provision for taxes line of the consolidated statement of operations. Accrued interest and penalties~~software products are ~~included on the related tax liability line in the consolidated balance sheets.~~

At December 31, 2018, we finalized our policy and have elected to use the period cost method for global intangible low-taxed income ("GILTI") provisions and therefore have not recorded deferred taxes for basis differences expected to reverse in future periods.

~~Business Combinations~~

~~We account for acquired subsidiaries using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree~~capitalized. Capitalized costs are ~~recorded at their acquisition date fair values. The excess of the costs of an acquired subsidiary~~amortized over the ~~net~~products’ estimated economic life to cost of the amounts assigned to identifiable assets acquired and liabilities incurred or assumed, is capitalized as goodwill. Acquisition and disposition related costs are included in transaction (income) expense, netproduct sales in the consolidated statements of operations. ~~Transaction (income) expense, net is composed~~

Costs incurred during the application development phase of ~~transaction costs on significant business combinations~~software for services provided to customers are capitalized as internal-use software and ~~gains and losses incurred on disposals~~amortized over the useful life to cost of ~~group entities or businesses. The results of operations of acquired subsidiaries are included~~services in the consolidated ~~financial~~ statements ~~from~~of operations. Costs incurred during the ~~date control is obtained.~~

~~Goodwill~~

~~Goodwill represents the excess~~application development of ~~the costs of an acquisition, including the fair value of any contingent consideration,~~software for internal use, and not for use in services provided to customers, are capitalized and amortized over the ~~fair value~~useful life to selling, general and administrative expenses in the consolidated statements of the amounts assigned to assets acquired and liabilities incurred or assumed of the acquired subsidiary at the date of acquisition. The primary drivers that generate goodwill are the value of synergies between the acquired subsidiary and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill is stated at cost less accumulated impairment losses.operations.

Other Intangible Assets

Other intangible assets, which include indefinite-lived and definite-lived intangible assets, are stated at cost, less accumulated amortization and accumulated impairment ~~losses, and include indefinite-lived and definite-lived intangible assets.~~losses.

Indefinite-lived intangible assets are composed of trademarks for which there is no foreseeable limit of the period over which they are expected to generate net cash inflows. Definite-lived intangible assets, which are primarily composed of customer relationships and computer software and game library, ~~licenses, and developed technologies,~~ are capitalized and amortized on a straight-line basis over their estimated economic lives. Estimated useful lives are determined considering the period the assets are expected to contribute to future cash flows. Amortization of software-related intangibles is included in cost of services and cost of product sales and amortization of other intangible assets is included in selling, general and administrative expenses in the consolidated statement of operations.

~~The estimated economic lives of our definite-lived intangible assets are as follows:~~



~~Category~~		~~Estimated economic life~~
~~Networks~~		~~7 years~~
~~Sports and horse racing betting rights~~		~~7 years~~
~~Computer software and game library~~		~~3 - 14 years~~
~~Licenses~~		~~3 - 15 years~~
~~Trademarks~~		~~3 - 20 years~~
~~Developed technologies~~		~~5 - 14 years~~
~~Customer relationships~~		~~7 - 20 years~~
~~Other~~		~~3 - 17 years~~

~~Systems, Equipment and Other Assets Related to Contracts, Net and Property, Plant and Equipment, Net~~

~~We have 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 our operating contracts and facilities management contracts (collectively, the "Contracts") and are principally composed of lottery and gaming assets. PPE are assets we use internally, primarily in manufacturing, selling, general and administration, research and development ("R&D"), and commercial service applications not associated with Contracts.

Systems & Equipment and PPE 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.

~~The estimated useful lives for Systems & Equipment depends on the type of cost as follows:~~

~~Lottery costs (such as terminals, mainframe computers, communications equipment, and software development costs); and~~

~~Commercial gaming machines.~~

~~Lottery costs are typically depreciated over their estimated useful lives, generally not to exceed 10 years, and commercial gaming machines over three to five years.~~

The estimated useful lives for PPE is 40 years for buildings and five to 10 years for furniture and equipment. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life.

~~Evaluation of Long-Lived Assets for Impairment~~

Goodwill is tested for impairment annually, in the fourth quarter, or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. In 2018, we changed our goodwill impairment testing date from November 1 to December 31 to better align with the timing and completion of our forecasting process. Goodwill is tested at the reporting unit level, which is one level below or the same level as an operating segment.

Goodwill is reviewed for impairment using either a qualitative assessment or a quantitative one-step process. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount and an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit. In performing the goodwill impairment test, we estimate the fair value of the reporting units using an income approach that analyzes projected discounted cash flows.

~~Other indefinite-lived~~Indefinite-lived intangible assets other than goodwill are tested for impairment annually, in the fourth quarter, or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of indefinite-lived intangible assets are less than their carrying amount and whether the quantitative analysis is necessary. The quantitative analysis compares the fair value of indefinite-lived intangible assets to their carrying amount and an impairment loss is recognized when the carrying amount exceeds the fair value.

Long-lived assets, other than goodwill and other indefinite-lived intangible assets, are tested for impairment whenever events or changes in circumstances indicate the carrying amount of those assets or asset groups may not be recoverable. An impairment loss is recognized only if the carrying amount is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted forecasted cash flows resulting from the use and eventual disposition of such asset. An impairment loss is measured as the amount by which the carrying amount exceeds its fair value.

~~Research and Development Costs~~

~~R&D costs, which include salaries and benefits, stock-based compensation, consultants' fees, facilities-related costs, material costs, depreciation and travel, are expensed as incurred.~~

Capitalized Software Development Costs

Costs incurred in the development of our externally-sold software products are expensed as incurred, except certain software development costs eligible for capitalization. ~~Material software~~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 over the products’ estimated economic life to cost of product sales in the consolidated ~~statement~~statements of operations.

Costs incurred induring the application development phase 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.~~services in the consolidated statements of operations. Costs incurred induring the application development of software ~~to be used only~~ for internal use, and not for use in services provided to customers, are capitalized ~~as internal-use software~~ and amortized over the useful life to selling, general and administrative expenses in the consolidated ~~statement~~statements of operations.

~~Stock-Based Compensation~~Upfront License Fees

~~Stock-based compensation represents~~

Jackpot Accounting

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Legal and Other Contingencies

Treasury Stock

Fair Value Measurements

•Level 1 - inputs are based upon unadjusted quoted prices for identical instruments in active markets

•Level 3 - inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability

Derivative Financial Instruments

We use derivative financial instruments for the management of foreign currency risks and interest rate risks. We do not enter into derivatives for speculative purposes. Derivatives are recognized as either assets or liabilities in the consolidated balance sheet at fair value. All derivatives are recorded gross, except netting of foreign exchange contracts and counterparty netting of interest receivable and payable related to ~~stock-based awards granted~~interest rate swaps, as applicable. The accounting for changes in the fair value of a derivative depends on the nature of the hedge and the hedge effectiveness. Derivative gains and losses are reported in the consolidated statements of cash flows consistent with the classification of the cash flows from the underlying hedged items.

For derivative instruments designated as cash flow hedges, gains and losses are recorded in other comprehensive income (loss) and are subsequently reclassified when the hedged item affects earnings. At that time, the amount is reclassified from other comprehensive income (loss) to ~~directors~~the same income statement line as the earnings effect of the hedged item.

For derivative instruments designated as fair value hedges, changes in fair value are recorded in interest expense and ~~employees. Stock-based compensation cost~~are offset by changes in the fair value of the underlying debt instrument due to changes in the benchmark interest rate. In the event the

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derivative instruments are subsequently de-designated as hedges, the change in fair value is ~~measured~~recognized in interest expense, net in the consolidated statements of operations with no corresponding offset to debt.

For derivative instruments designated as net investment hedges, the spot portion of the derivative gain or loss is reported in foreign currency translation within other comprehensive income (loss) to offset any gains or losses on translation of the net investment in the subsidiary until the net investment is sold or liquidated, at which point the ~~grant~~amounts are reclassified to earnings. All other components of the derivative fair value will be reported as either interest income or interest expense, on an amortized basis.

Leases

We determine whether a contract is or contains a lease at inception. As a lessee, we recognize right-of-use (“ROU”) assets and lease liabilities on the lease commencement date based on the ~~estimated fair~~present value of ~~the award and recognized as expense, net of estimated forfeitures,~~lease payments over the ~~vesting period.~~lease term. ROU assets also include any upfront lease payments or initial direct costs and are adjusted for lease incentives received.

Most of our lease contracts contain both lease and non-lease components. As a lessee, we combine lease and non-lease components into a single lease component for all classes of underlying assets except certain communication equipment. For ~~awards that contain only a service vesting feature, compensation cost~~certain communication equipment, we allocate the consideration between lease and non-lease components based on relative standalone price. Lease expense is recognized on a straight-line basis over the ~~awards’ vesting period. For awards with a performance condition, when achievement~~lease term.

~~Advertising~~Certain of our long term lottery and commercial gaming service arrangements include leases for equipment installed at customer locations. As the lessor, we combine lease and non-lease components for all classes of underlying assets in arrangements that involve operating leases. The single combined component is accounted for under ASC 842, Leases, or ASC 606, Revenue from Contracts with Customers (“ASC 606”), depending on which component is the predominant component in the arrangement. If a component cannot be combined, the consideration is allocated between the lease component and the non-lease component based on relative standalone selling price.

~~Advertising costs~~Income Taxes

Deferred tax assets and liabilities are ~~expensed as incurred. Advertising expense was $61.5 million, $111.9 million and $151.6 million~~recognized for the ~~years ended December 31, 2018, 2017~~expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and ~~2016, respectively.~~liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using the enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enacted or substantively enacted date.

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Foreign Currency Translation

New Accounting Standards - Recently Adopted

In ~~October 2018,~~July 2021, the FASB issued ASU No. ~~2018-16,~~ ~~Derivatives and Hedging~~2021-05, Leases (Topic ~~815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes~~842) - Lessors - Certain Leases with Variable Lease Payments (“ASU 2021-05”). This ~~guidance is~~update requires sales-type or direct financing leases with variable payments that do not depend on a rate or an index and would have otherwise resulted in a day-one loss at lease commencement, to be classified as operating leases. The amendments in ASU 2021-05 are effective ~~upon~~for annual periods beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted. The amendments can be applied retrospectively to leases that commenced or were modified on or after adoption of ~~ASU No. 2017-12 which we early adopted in the fourth quarter of 2018 and is applied on a prospective basis for qualifying new~~ASC 842, Leases, or ~~redesignated hedging relationships entered into~~prospectively to leases that commence or are modified on or after the ~~adoption date.~~date of adoption. We adopted ASU 2021-05 as of October 1, 2021 and applied the provisions prospectively to leases that commenced or were modified on or after October 1, 2021. The adoption ~~did not impact our hedging relationships and~~ did not have a material impact on our consolidated financial statements.

In August ~~2018,~~2020, the FASB issued ASU No. ~~2018-15,~~ ~~Intangibles~~2020-06, Debt - ~~Goodwill~~Debt with Conversion and ~~other~~Other Options (Subtopic 470-20) and Derivatives and Hedging - ~~Internal-use software~~Contracts in Entity's Own Equity (Subtopic ~~350-40): Customer’s Accounting~~815-40) (“ASU 2020-06”). This update simplifies the convertible debt accounting framework by reducing the number of accounting models used to account for ~~Implementation Costs Incurred~~convertible debt and preferred stock instruments. It also amends the accounting for certain contracts in ~~a Cloud Computing Arrangement That is a Service Contract~~ ~~("ASU 2018-15"), which allows~~an entity's own equity that are currently accounted for ~~capitalization~~as derivatives because of ~~implementation costs incurred in a hosting arrangement that is a service contract. The capitalized costs are then expensed over~~specific settlement provisions. In addition, the ~~term of~~new guidance modifies the ~~hosting arrangement.~~diluted earnings per share calculations for convertible debt instruments. We adopted ASU ~~2018-15~~2020-06 as of January 1, 2021 using a modified retrospective approach. The adoption did not have a material impact on our consolidated financial statements and had no effect on earnings per share information in the ~~third quarter~~period of ~~2018~~adoption.

~~In February 2018, the FASB issued ASU No. 2018-03,~~ ~~Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~ ("ASU 2018-03"), which provides clarity regarding measurement, presentation, and disclosure of equity securities, options, and forward contracts. We adopted ASU 2018-03 in the third quarter of 2018 and applied it prospectively. The adoption did not have a material impact on our consolidated financial statements.

~~In February 2018, the FASB issued ASU No. 2018-02,~~ ~~Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~ ("ASU 2018-02"), which permits entities to reclassify tax effects stranded in AOCI as a result of tax reform to retained earnings. Companies that elect to reclassify these amounts must reclassify stranded tax effects for all items accounted for in AOCI. We adopted ASU 2018-02 in the first quarter of 2018 and applied it prospectively. The adoption did not have a material impact on our consolidated financial statements.

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~ ("ASU 2017-12"), which 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. ASU 2017-12 was adopted in the fourth quarter of 2018. The adoption did not have a material impact on our consolidated financial statements. The amended presentation and disclosure guidance was applied prospectively as required, therefore, no changes were made to our prior year consolidated financial statements.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~ ("ASU 2017-01"), which 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. ASU 2017-01 was adopted in the first quarter of 2018 and did not have an impact on our consolidated financial statements.

~~In November 2016, the FASB issued ASU No. 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~ ("ASU 2016-18"), which 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.

~~We adopted ASU 2016-18 in the first quarter of 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows ($ thousands):~~

For the year ended
December 31, 2017 Under Prior
Accounting Restricted Cash Adjustment As Adjusted
Other assets and liabilities (118,923 ) (22,540 ) (141,463 )
Net cash provided by operating activities 685,928
(22,540 ) 663,388

Other 5,435
(3,099 ) 2,336
Net cash provided by investing activities 298,665
(3,099 ) 295,566

Net increase in cash and cash equivalents, and restricted cash and cash equivalents 737,621
(25,639 ) 711,982
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents 25,703
26,429
52,132
Cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period 294,094
247,222
541,316
Cash and cash equivalents, and restricted cash and cash equivalents at the end of the period 1,057,418
248,012
1,305,430

For the year ended
December 31, 2016 Under Prior
Accounting Restricted Cash Adjustment As Adjusted
Accounts payable (22,855 ) 59,917
37,062
Other assets and liabilities (21,736 ) (3,195 ) (24,931 )
Net cash provided by operating activities 281,332
56,722
338,054

Other 40,160
(23,456 ) 16,704
Net cash used in investing activities (315,985 ) (23,456 ) (339,441 )

Net decrease in cash and cash equivalents, and restricted cash and cash equivalents (346,792 ) 33,266
(313,526 )
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents 13,402
(3,748 ) 9,654
Cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period ⁽¹⁾
627,484
217,704
845,188
Cash and cash equivalents, and restricted cash and cash equivalents at the end of the period 294,094
247,222
541,316

(1) In connection with the adoption of ASU 2016-18, the Company corrected its balance sheet as of January 1, 2016 to include an additional $48.6 million in restricted cash and cash equivalents which had previously been offset against current liabilities of the same amounts. Accordingly, the revised restricted cash and cash equivalents balance as of January 1, 2016 is $217.7 million which is included in the cash and cash equivalents, and restricted cash and cash equivalents at the beginning of the period in the schedule above as well as in the consolidated statements of cash flows.

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory~~ ("ASU 2016-16"), which eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the income tax consequences from the intra-entity asset transfers other than inventory and associated changes to deferred

taxes will be recognized when the transfer occurs. We adopted ASU 2016-16 in the first quarter of 2018 using the modified retrospective method. The adoption did not have a material impact on our consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~ ("ASU 2016-15"), which reduces diversity in practice in financial reporting by clarifying certain existing principles in the statements of cash flows. ASU 2016-15 was adopted in the first quarter of 2018 and did not have a material impact on our consolidated financial statements.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~ ("ASU 2016-01"), which makes improvements specifically around recognition and measurement of financial assets and liabilities. ASU 2016-01 was adopted in the first quarter of 2018 and did not have a material impact on our consolidated financial statements.

In May 2014, the FASB issued ASC 606. The amended guidance, combined with all subsequent amendments, outlines a single comprehensive revenue model in accounting for revenue from contracts with customers. ASC 606 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 ASC 606, more judgment and estimates are required within the revenue recognition process than required under prior 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.

We adopted ASC 606 in the first quarter of 2018 using a modified retrospective application approach which was applied to customer contracts, in their modified state, that were not completed as of January 1, 2018. We recognized the cumulative effect of initially applying the new revenue recognition standard as an adjustment to beginning retained deficit.

On January 1, 2018, we recorded a pre-tax transition adjustment within retained deficit of $61.2 million ($50.9 million after tax) in our consolidated financial statements, primarily due to multi-year licenses, LMA incentives, and lottery machines wherein control transferred in advance of delivery. ASC 606 resulted in the reclassification of our jackpot expense from cost of services to a reduction of service revenue in our consolidated statements of operations. We did not experience significant changes to our business practices and systems to support the adoption of ASC 606. See Note 3, ~~Revenue Recognition, for additional information on the adoption of ASC 606.~~

New Accounting Standards - Not Yet Adopted

In ~~August 2018,~~October 2021, the FASB issued ASU No. ~~2018-13,~~ ~~Fair Value Measurement~~2021-08, Business Combinations (Topic ~~820)~~805): ~~Changes~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments create an exception to the ~~Disclosure Requirements~~general recognition and measurement principal in ASC 805, Business Combinations to measure assets and liabilities acquired in a business combination at fair value. Instead, an acquirer in a business combination will be required to apply ASC 606 to recognize and measure contract assets and contract liabilities that result from contracts accounted for ~~Fair Value Measurement~~ ("under ASC 606 on the acquisition date and will generally result in the acquirer recognizing amounts consistent with those recorded by the acquiree immediately before the acquisition date. ASU ~~2018-13"), which provides guidance around disclosure requirements for fair value measurement of investments. ASU 2018-13~~2021-08 is effective for fiscal years beginning after December 15, ~~2019,~~2022, and interim periods within those fiscal years, with early adoption permitted. We ~~will adopt ASU 2018-13 upon the effective date and~~ are currently evaluating the timing and impact of ~~adoption.~~adopting this guidance.

In ~~June 2016,~~March 2020, the FASB issued ASU No. ~~2016-13,~~ ~~Financial Instruments~~2020-04, Reference Rate Reform (Topic 848) - ~~Credit Losses (Topic 326): Measurement~~Facilitation of ~~Credit Losses~~the Effects of Reference Rate Reform on Financial ~~Instruments~~ Reporting ("“ASU ~~2016-13"~~2020-04”)~~, which replaces the incurred loss impairment methodology in current~~. This update provides optional expedients and exceptions for applying 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~~contracts, hedging relationships, and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses thattransactions affected by reference rate reform if certain criteria are ~~probable. ASU 2016-13 will be effective beginning~~met. In January 1, 2020, with early adoption permitted beginning January 1, 2018. Application of ASU 2016-13 is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact and timing of adopting this guidance.

~~In February 2016,~~2021, the FASB issued ASU No. ~~2016-02,~~ ~~Leases~~2021-01, Reference Rate Reform (Topic ~~842)~~ ("848) - Scope (“ASU ~~2016-02"~~2021-01”) to ~~increase transparency~~clarify that ASU 2020-04 may apply to certain derivative contracts and ~~comparability among organizations~~hedging relationships affected by ~~recognizing lease assets~~changes in the interest rates used for margining, discounting, or contract price alignment in connection with reference rate reform activities. The

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amendments in ASU 2020-04 and ~~liabilities on the balance sheet and disclosing key information about leasing arrangements. In 2017 and 2018, the FASB amended~~ ASU ~~2016-02. ASU 2016-02 and related amendments (collectively "ASC 842")~~2021-01 are effective ~~for~~upon issuance through December 31, 2022. We are currently evaluating these optional elections and the Company as of January 1, 2019. The Company will adopt ASC 842 using the optional transition method which will result in a cumulative effect adjustment to retained earnings on January 1, 2019. Additionally, we have elected to apply the package of practical expedientstiming and ~~to use hindsight in determining the lease term and assessing impairment.~~

As a lessee of real estate globally, we expect the adoption of ASC 842 to have a significant impact on the consolidated balance sheet due to the recognition of right of use ("ROU") assets and lease liabilities for existing operating leases. As a lessee, we will record a ROU asset and lease liability on the balance sheet for substantially all leases with initial lease terms longer than 12 months. There will not be a significant change to our consolidated statements of operations, comprehensive income, cash flows, or liquidity.

While lessor accounting is largely unchanged under ASC 842, certain of our lottery and gaming arrangements may include leases for implicitly or explicitly identified equipment installed at customer locations as part of our long-term technology service contracts. In these arrangements, we are typically compensated based on a percentage of sales or other forms of variable payment. While most of these leases will be classified as operating leases, certain of these are leases that could be classified as sales-type financing leases either at inception or upon modification of existing contracts in future periods. After electing the practical expedient to combine lease and non-lease components as the lessor for an operating lease, most contracts will fall under the guidance of ASC 606 because the predominant component of a technology service contract is for non-lease components.

~~We will continue to assess the anticipated~~ impact of adopting this ~~guidance on ongoing business policies and processes.~~guidance.

We do not currently expect that any other recently issued accounting guidance will have a significant effect on the consolidated financial statements.

3.Discontinued Operations and Assets Held for Sale

Summarized financial information for discontinued operations is shown below:


	For the year ended December 31,
($ in millions)	2021	2020	2019
Total revenue	74	429	778

Operating income (1)	24	51	159

Income from discontinued operations before provision for (benefit from) income taxes	23	43	157
(Benefit from) provision for income taxes on discontinued operations	(1)	7	42
Gain on sale of discontinued operations before provision for income taxes	396	—	—
Provision for income taxes on sale of discontinued operations	5	—	—
Income from discontinued operations	415	37	114
Less: Net (loss) income attributable to non-controlling interests from discontinued operations	(2)	(5)	5
Income from discontinued operations attributable to IGT PLC	417	41	110

(1) Includes depreciation and amortization of $95 million and $100 million for the years ended 2020 and 2019, respectively. There was no depreciation and amortization in 2021.

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The following represents the major classes of assets and liabilities held for sale as part of our discontinued operations:


3.	~~Revenue Recognition~~	December 31,
($ in millions)		2020
Assets:
Trade and other receivables, net		62
Other current assets		58
Systems, equipment and other assets related to contracts, net		86
Goodwill		520
Intangible assets, net		55
Other non-current assets		52
Assets held for sale		833
Liabilities:
Accounts payable		63
Other current liabilities		164
Other non-current liabilities		23
Liabilities held for sale		250

4. Revenue Recognition

Disaggregation of Revenue

The following ~~table summarizes customer contract~~tables summarize revenue disaggregated by ~~reportable~~business segment and the source of the revenue for the ~~year~~years ended December 31, ~~2018:~~2021, 2020, and 2019:


	For the year ended December 31, 2021
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	2,363	—	—	2,363
Gaming terminal services	—	424	—	424
Digital and betting services	—	—	163	163
Systems, software, and other	327	206	—	534
Service revenue	2,690	630	163	3,483

Lottery products	123	—	—	123
Gaming terminals	—	339	—	339
Other	—	143	1	144
Product sales	123	482	1	606
Total revenue	2,812	1,112	165	4,089

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For the year ended December 31, 2018
($ thousands) North America Gaming and Interactive North America Lottery International Italy Other Total
Operating and Facilities Management Contracts —
828,641
282,864
793,315
—
1,904,820
Lottery Management Agreements —
129,104
—
—
—
129,104
Machine gaming 420,447
99,679
53,586
672,200
—
1,245,912
Other services 204,029
53,645
159,047
349,034
723
766,478
Service revenue 624,476
1,111,069
495,497
1,814,549
723
4,046,314

Lottery machines —
80,405
20,246
—
—
100,651
Gaming machines 261,696
—
193,092
—
—
454,788
Systems and other 116,997
428
111,148
930
—
229,503
Product sales 378,693
80,833
324,486
930
—
784,942
Total revenue 1,003,169
1,191,902
819,983
1,815,479
723
4,831,256


	For the year ended December 31, 2020
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	1,744	—	—	1,744
Gaming terminal services	—	298	—	298
Digital and betting services	—	—	114	114
Systems, software, and other	299	186	—	484
Service revenue	2,043	483	114	2,640

Lottery products	121	—	—	121
Gaming terminals	—	205	—	205
Other	—	148	1	149
Product sales	121	354	1	476
Total revenue	2,164	837	115	3,115


	For the year ended December 31, 2019
($ in millions)	Global Lottery	Global Gaming	Digital & Betting	Total
Operating and facilities management contracts	1,931	—	—	1,931
Gaming terminal services	—	568	—	568
Digital and betting services	—	—	76	76
Systems, software, and other	252	274	—	527
Service revenue	2,183	842	76	3,101

Lottery products	110	—	—	110
Gaming terminals	—	581	—	581
Other	—	225	15	240
Product sales	110	806	15	931
Total revenue	2,293	1,648	91	4,032

Sources of Revenue

Service Revenue

Service revenue is derived from the following sources:

•Operating and facilities management contracts;

•Gaming terminal services;

•Digital and betting services; and

•Systems, software, and other

Operating and Facilities Management Contracts – Global Lottery

Our revenue from operating contracts is derived primarily from long-term exclusive operating licenses in Italy. Under operating contracts, we manage 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 most cases, the arrangement is accounted for as a single performance obligation composed of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service).

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to which we are typically entitled is variable based on a percentage of sales. Revenue is typically recognized in the amount that we have the right to invoice the customer as this corresponds directly with the value to the customer of our performance completed to date. In arrangements where we are performing services on behalf of the government and the government is considered our customer, revenue is recognized net of prize payments, taxes, retailer commissions, and remittances to state authorities. Under operating contracts, we are generally required to pay an upfront license fee. Refer to the Upfront License Fees policy above for further details.

Our revenue from facilities management contracts (“FMC”) is generated by assembling, installing, and operating the online lottery system and related point-of-sale equipment. Under a typical FMC, we maintain ownership of the technology and are responsible for capital investments throughout the duration of the contract. FMCs typically include a wide range of support services that are provided throughout the contract and are part of the integrated solution that the customer has contracted to obtain. In most cases, the arrangement is accounted for as a single performance obligation composed of a series of distinct services that are substantially the same and that have the same pattern of transfer. Under FMCs, we typically satisfy the performance obligation and recognize revenue over time because the customer simultaneously receives and consumes the benefits provided as we perform the services. The amount of transaction price to which we are entitled is typically variable based on a percentage of sales, although under certain of its agreements, the Company receives fees based on a fixed fee arrangement. Revenue is typically recognized in the amount that we have the right to invoice the customer, as this corresponds directly with the value to the customer of our completed performance.

Gaming terminal services – Global Gaming

Our revenue from gaming terminal services is generated by providing customers with proprietary land-based gaming systems and equipment under a variety of recurring revenue or lease arrangements, including a percentage of amounts wagered, a percentage of net win, or a fixed daily/monthly fee.

Included in gaming terminal services 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 systems include a Company-sponsored progressive jackpot that increases with every wager until a player wins the top award combination. Casinos with WAP machines pay a percentage of 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. Since the jackpot is a payment to the customer, the portion allocated to the jackpot is classified as a reduction of revenue.

Digital and betting services – Digital & Betting

Systems, software, and other – Global Lottery

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We also develop technology to enable lotteries to offer commercial services over their existing lottery infrastructure or over standalone networks separate from the lottery. Leveraging our distribution network and secure transaction processing, we offer 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 of North America. In most cases, these arrangements are considered to be short in duration. The amount of transaction price that we are typically entitled to is variable based on the number of transactions processed. Revenue is typically recognized in the amount that we have the right to invoice the customer as this corresponds directly with the value to the customer of our completed performance.

Systems, software, and other – Global Gaming

Our gaming contracts generally include other services, including telephone support, software maintenance, content licensing, royalty fees, hardware maintenance, and the right to receive unspecified updates or enhancements on a when-and-if-available basis, and other professional services. We also generate revenue from other services, including video central system monitoring, system support, and sales or usage-based licensing of intellectual property. Fees earned for other services are generally recognized as service revenue in the period the service is performed (i.e., over the support period).

Product Sales

Product sales are derived from the following sources:

•Lottery products;

•Gaming terminals; and

•Other

Lottery products – Global Lottery

Lottery products revenue primarily includes the sale of lottery equipment, lottery systems and printed products.

Our revenue from the sale or sales-type lease of lottery systems and equipment typically includes multiple performance obligations, where we assemble, sell, deliver, and install a turnkey system (inclusive of point-of-sale terminals, if applicable) or deliver equipment and license the computer software for a fixed price, and the customer subsequently operates the system or equipment. Our credit terms are predominantly short-term in nature. We also grant extended payment terms under contracts where the sale is typically secured by the related equipment sold. Revenue from the sale of lottery systems and equipment is recognized based upon the contractual terms of each arrangement. These arrangements generally include customer acceptance provisions and general rights to terminate the contract if we are in breach of the contract or at the convenience of the customer. In these arrangements, the performance obligation is satisfied over time if the customer controls the asset as it is created (i.e., when the asset is built at the customer site) or if our performance does not create an asset with an alternative use and we have an enforceable right to payment plus a reasonable profit for performance completed to date. If revenue is not recognized over time, it is generally recognized upon transfer of physical possession of the goods or the satisfaction of customer acceptance provisions. If the transaction includes multiple performance obligations, it is accounted for under arrangements with multiple performance obligations, discussed below.

Our other lottery product sales are primarily derived from the production and sales of instant ticket games under multi-year contracts. In these arrangements, the performance obligation is generally satisfied at a point in time (i.e., upon transfer of control of the game tickets to the customer) based on the contractual terms of each arrangement.

Gaming terminals – Global Gaming

Our revenue from the sale or sales-type lease of gaming terminals includes embedded game content, machine related equipment, licensing and royalty fees, and component parts. Our credit terms are predominantly short-term in nature. We also grant extended payment terms under contracts where the sale is typically secured by the related equipment sold. Revenue from the sale of gaming machines is recognized based upon the contractual terms of each arrangement, but predominantly upon transfer of physical possession of the goods or the lapse of customer acceptance provisions. If the sale of gaming machines includes multiple performance obligations, these arrangements are accounted for under arrangements with multiple performance obligations, discussed below.

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Other – Global Gaming

Other gaming product revenue is primarily comprised of gaming system sales, content licensing, perpetual or long-term software licenses, non-machine related equipment and component parts (including game themes and electronic conversion kits). Our revenue from the sale of gaming systems typically includes multiple performance obligations, where we sell, deliver, and install a turnkey system or deliver equipment and license the computer software for a fixed price, and the customer subsequently operates the system. These arrangements generally include customer acceptance provisions and general rights to terminate the contract if we are in breach of the contract. Such arrangements include hardware, software, and professional services. In these arrangements, the performance obligation is generally satisfied upon transfer of physical possession of the goods or the satisfaction of customer acceptance provisions.

Other – Digital & Betting

Other digital and betting product revenue is primarily comprised of perpetual software licenses, the sale of equipment, and component parts.

Contract Balances

Information about ~~receivables,~~ contract assets and contract liabilities ~~subject to ASC 606~~ is as follows:


($ in millions)						($ in millions)	December 31, 2021	December 31, 2020	Balance Sheet Classification

($ thousands)	December 31, 2018		January 1, 2018 (As Adjusted)		Balance Sheet Classification
Receivables, net	949,085		938,958		Trade and other receivables, net

Contract assets:						Contract assets:
Current	58,739		27,903		Other current assets	Current	49	53	Other current assets
Non-current	69,691		43,511		Other non-current assets	Non-current	69	75	Other non-current assets
	128,430		71,414				118	128

Contract liabilities:						Contract liabilities:
Current	(72,005	)	(62,847	)	Other current liabilities	Current	(104)	(108)	Other current liabilities
Non-current	(67,022	)	(51,848	)	Other non-current liabilities	Non-current	(47)	(62)	Other non-current liabilities
	(139,027	)	(114,695	)			(151)	(170)

The amount of revenue recognized during the ~~year~~years ended December 31, ~~2018~~2021, 2020, and 2019 that was included in the contract liabilities balance at ~~January 1, 2018~~the beginning of each period was ~~$44.5 million.~~$107 million, $56 million, and$51 million, respectively.

Transaction Price Allocated to Remaining Performance Obligations

Estimated revenue expected to be recognized in the future related to remaining performance obligations includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property, the original duration of the contract is one year or less, or we apply the right to invoice practical expedient. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

At December 31, ~~2018,~~2021, the transaction price allocated to unsatisfied performance obligations for contracts expected to be greater than one year, or ~~contracts~~performance obligations for which we do not have a right to consideration from the customer in the amount that corresponds to the value to the customer for

our performance completed to date, ~~were~~variable consideration which is not accounted for in accordance with the sales-based or usage-based royalties guidance, or contracts which are not wholly unperformed, is approximately ~~3% of our annual~~$1.1 billion. Of this amount, we expect to recognize as revenue ~~for 2018, of which~~ approximately ~~25% is expected to be satisfied~~28% within ~~one year~~the next 12 months, approximately 34% between 13 and 36 months, approximately 22% between 37 and 60 months, and the ~~remainder is expected to be satisfied over the subsequent seven years.~~

~~Reconciliation of ASC 606 to Prior Accounting Standards~~

~~The following table summarizes the impacts of adopting ASC 606 to our consolidated statement of operations for the year ended~~remaining balance through December 31, ~~2018:~~2031.

F-24

For the year ended December 31, 2018
($ thousands, except per share amounts) Under Prior
Accounting Revenue Recognition
Adjustment As Adjusted
Revenue 4,896,300
(65,044 ) 4,831,256
Operating expenses (4,264,321 ) 80,056
(4,184,265 )
Provision for income taxes (187,897 ) (1,504 ) (189,401 )
Net income attributable to IGT PLC (34,858 ) 13,508
(21,350 )

Net income attributable to IGT PLC per common share - basic (0.17 ) 0.07
(0.10 )
Net income attributable to IGT PLC per common share - diluted (0.17 ) 0.07
(0.10 )

~~The following table summarizes the impacts~~Ta ble of ~~adopting ASC 606 to our consolidated balance sheet at December 31, 2018:~~

Contents

December 31, 2018
($ thousands) Under Prior
Accounting Revenue Recognition
Adjustment As Adjusted
Trade and other receivables, net 943,935
5,150
949,085
Inventories, net 298,234
(15,536 ) 282,698
Other current assets 446,285
57,776
504,061
Other non-current assets 2,081,115
27,849
2,108,964

Other current liabilities 802,589
14,133
816,722
Other non-current liabilities 448,757
(3,312 ) 445,445
Retained deficit (1,072,611 ) 64,418
(1,008,193 )
5. Trade and Other Receivables, net

~~The following table summarizes the impacts of adopting ASC 606 to our consolidated statement of cash flows for the year ended December 31, 2018:~~

For the year ended December 31, 2018
($ thousands) Under Prior
Accounting Revenue Recognition
Adjustment As Adjusted
Net income (loss) 101,102
13,545
114,647
Trade and other receivables (50,310 ) (4,046 ) (54,356 )
Inventories 18,429
(5,873 ) 12,556
Other assets and liabilities (128,314 ) (3,626 ) (131,940 )
Net cash provided by operating activities 29,626
—
29,626


4.	~~Dispositions~~

~~Sale of Double Down Interactive LLC~~

~~On June 1, 2017, we sold Double Down Interactive LLC ("DoubleDown") to DoubleU Games Co., Ltd. Details of the transaction are summarized in the table below.~~



~~($ thousands)~~	~~For the year ended~~ ~~December 31, 2017~~
~~Cash proceeds~~	~~825,751~~
~~Less: Cash divested~~	~~(1,963~~	)
~~Net cash proceeds~~	~~823,788~~
~~Net book value~~	~~(772,440~~	)
~~Gain on sale~~	~~51,348~~
~~Selling costs~~	~~(24,116~~	)
~~Gain on sale, net of selling costs~~	~~27,232~~

The $27.2 million gain on sale of DoubleDown, net of selling costs, is classified within transaction expense (income), net on the consolidated statement of operations for the year ended December 31, 2017.


5.	~~Trade and Other Receivables, net~~

Trade and other receivables ~~net~~ are recorded at ~~cost.~~amortized cost, net of allowance for credit losses, and represent a contractual right to receive money on demand or on fixed or determinable dates that are typically short-term with payment due within 90 days or less.

December 31,
($ thousands) 2018 2017
Gross 1,008,509
991,177
Allowance for credit losses (59,424 ) (53,323 )
Net 949,085
937,854


	December 31,
($ in millions)	2021	2020
Trade and other receivables, gross	917	862
Allowance for credit losses	(15)	(16)
Trade and other receivables, net	903	846

The following table presents the activity in the allowance for credit losses:


	December 31,
($ in millions)	2021	2020	2019
Balance at beginning of year	(16)	(22)	(29)
(Provisions) recoveries, net	(2)	(6)	3
Amounts written off as uncollectible	2	10	3

Other (1)	—	3	—
Balance at end of year	(15)	(16)	(22)

December 31,
($ thousands) 2018 2017 2016
Balance at beginning of year (53,323 ) (58,884 ) (76,137 )
Provisions, net (10,800 ) (12,255 ) (13,594 )
Amounts written off as uncollectible 2,222
17,826
29,289
Foreign currency translation 2,869
(5,885 ) 1,558
Other (392 ) 5,875
—
Balance at end of year (59,424 ) (53,323 ) (58,884 )
(1) Includes the effect of the adoption of ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments (“ASC 326”) in 2020.

We ~~have two~~enter into various factoring agreements with ~~major European~~third-party financial institutions to sell certain of our trade receivables. We factored trade receivables of $1.1 billion and $1.5 billion during the years ended December 31, 2021 and 2020, respectively, under these factoring arrangements, which reduced trade receivables. The cash received from these arrangements is reflected in net cash provided by operating activities in the consolidated statements of cash flows. In certain of these factoring arrangements, for ease of administration, we will collect customer payments related to the ~~Italy segment on a non-recourse basis.~~factored trade receivables, which we then remit to the financial institutions. At December 31, ~~2018~~2021 and ~~2017, there were €203.1~~2020, we had $57 million ~~($232.6~~and $110 million, atrespectively, that was collected on behalf of the ~~December 31, 2018 exchange rate)~~financial institutions and ~~€221.3 million ($265.4 million at the December 31, 2017 exchange rate) of trade receivables outstanding that had been sold~~recorded as restricted cash and ~~derecognized from~~cash equivalents and other current liabilities in the consolidated balance ~~sheet, respectively.~~

~~We also sell certain other trade receivables on a non-recourse basis which have been derecognized from~~sheets. The net cash flows relating to these collections are reported in net cash used in financing activities in the consolidated ~~balance sheet. At December 31, 2018 and 2017, there were $21.4 million and $18.6 million~~statements of ~~these receivables outstanding that had been sold, respectively, primarily~~cash flows.

6. Inventories


	December 31,
($ in millions)	2021	2020
Raw materials	107	86
Work in progress	25	23
Finished goods	78	103
Inventories, gross	211	212
Obsolescence reserve	(28)	(43)
Inventories, net	183	169

The following table presents the activity in the ~~North America Gaming and Interactive segment.~~obsolescence reserve:


	December 31,
($ in millions)	2021	2020	2019
Balance at beginning of year	(43)	(34)	(40)
Provisions, net	(1)	(34)	(29)
Amounts written off	11	24	23
Other	4	1	12
Balance at end of year	(28)	(43)	(34)


6.	~~Inventories~~

F-25

December 31,
($ thousands) 2018 2017
Raw materials 140,143
156,336
Work in progress 32,835
33,588
Finished goods 109,720
129,621
282,698
319,545

Ta ble of Contents

7. Other Assets


7.	~~Other Assets~~

Other Current Assets


					December 31,
	December 31,
($ thousands)	2018	2017
($ in millions)			($ in millions)	Notes	2021	2020
Customer financing receivables, net	170,273	151,360	Customer financing receivables, net		170	232
Other receivables	61,055	65,891	Other receivables		158	8
Income taxes receivable			Income taxes receivable		64	45
Prepaid expenses			Prepaid expenses		54	39
Contract assets			Contract assets	4	49	53
Value-added tax receivable	60,232	49,962	Value-added tax receivable		28	46
Contract assets	58,739	—
Prepaid royalties	52,712	59,596
Prepaid expenses	47,781	30,977
Other	53,269	49,734	Other		67	55
	504,061	407,520			589	480

Other Non-Current Assets


		December 31,
($ in millions)	Notes	2021	2020
Upfront license fees, net:
Italian Scratch & Win		680	845
Italian Lotto		380	516
New Jersey		66	74
Indiana		9	10
		1,134	1,446

Customer financing receivables, net		92	84
Contract assets	4	69	75
Deferred income taxes	17	39	33
Finance lease right-of-use assets	11	29	33

Other		66	103
		1,429	1,774

December 31,
($ thousands) 2018 2017
Upfront license fees, net:
Italian Scratch & Win 992,333
1,145,998
Italian Lotto 677,564
812,304
New Jersey 91,970
100,730
Indiana 13,247
14,642
1,775,114
2,073,674

Customer financing receivables, net 88,354
74,898
Contract assets 69,691
—
Prepaid royalties 64,598
103,322
Prepaid income taxes 25,942
72,176
Other 85,265
103,883
2,108,964
2,427,953

Upfront License Fees

~~Italian Scratch & Win~~

In December 2017, Lotterie Nazionali S.r.l., our majority-owned subsidiary, was awarded a nine-year contract extension for the Italian Scratch & Win license (the "Italian Scratch & Win extension") that required an upfront license fee of €800.0 million ($937.4 million).

The upfront license fees are being amortized on a straight-line basis as follows:

Upfront License Fee

License Term

Amortization Start Date

Italian Scratch & Win

9 years

October ~~2010~~2019

Italian ~~Scratch & Win extension~~Lotto

9 years

~~October 2019~~December 2016

~~Italian Lotto~~

~~9 years~~

~~December 2016~~

New Jersey

15 years, 9 months

October 2013

Indiana

15 years

July 2013

~~Contract Assets~~Yeonama Holdings Co. Limited

~~Contract~~In May 2019, we sold our ownership interest in Yeonama Holdings Co. Limited, an investment previously included within other non-current assets ~~were recorded as a result of our adoption of ASC 606~~ in the ~~first quarter~~consolidated balance sheet. The sale resulted in a pre-tax gain of ~~2018. Refer to~~€26 million ($29 million at the ~~revenue recognition policy~~May 31, 2019 exchange rate), which is classified in ~~Note 2,~~ ~~Summary~~other expense (income), net on the consolidated statements of ~~Significant Accounting Policies~~,operations for ~~more information.~~the year ended December 31, 2019.

F-26

Ta ble of Contents

Customer Financing Receivables

Customers' payment terms for customer financing receivables are confirmed with a written financing contract, lease contract, or promissory note and a security agreement is typically signed by the parties granting the Company a security interest in the related products sold or leased. Customer financing interest income is recognized based on market rates prevailing at issuance.

Customer financing receivables ~~net~~ are recorded at ~~cost.~~amortized cost, net of any allowance for credit losses, and are classified in the consolidated balance sheets as follows:


	December 31, 2021
($ in millions)	Current Assets	Non-Current Assets	Total
Customer financing receivables, gross	220	111	332
Allowance for credit losses	(51)	(20)	(71)
Customer financing receivables, net	170	92	261

December 31, 2018
Allowance for
($ thousands) Gross credit losses Net
Current 196,831
(26,558 ) 170,273
Non-current 91,005
(2,651 ) 88,354
287,836
(29,209 ) 258,627


	December 31, 2020
($ in millions)	Current Assets	Non-Current Assets	Total
Customer financing receivables, gross	275	91	365
Allowance for credit losses	(43)	(7)	(50)
Customer financing receivables, net	232	84	316

December 31, 2017
Allowance for
($ thousands) Gross credit losses Net
Current 167,985
(16,625 ) 151,360
Non-current 77,847
(2,949 ) 74,898
245,832
(19,574 ) 226,258

The following table presents the activity in the allowance for credit losses:


	December 31,
($ in millions)	2021	2020	2019
Balance at beginning of year	(50)	(32)	(29)
Provisions, net	(29)	(37)	(2)
Amounts written off as uncollectible	8	24	—
Other (1)	—	(5)	—
Balance at end of year	(71)	(50)	(32)

December 31,
($ thousands) 2018 2017 2016
Balance at beginning of year (19,574 ) (7,856 ) (3,888 )
Provisions, net (10,131 ) (5,236 ) (4,481 )
Amounts written off as uncollectible 317
—
—
Foreign currency translation 179
(159 ) 513
Other —
(6,323 ) —
Balance at end of year (29,209 ) (19,574 ) (7,856 )
(1) Includes the effect of the adoption of ASC 326 in 2020.

~~At December 31, 2018 and 2017, $6.9 million and $34.2 million, respectively, of certain outstanding~~The Company’s customer financing ~~receivables were sold on a non-recourse basis.~~

~~Customer financing receivables, net are recorded and valued based on expected payments and market interest rates relative to~~receivable portfolio is composed of customers primarily within the Global Gaming business segment. We internally assess the credit ~~risk of each customer region. At December 31, 2018 and 2017, the carrying value~~quality of customer financing receivables ~~approximated its fair value~~using a number of factors, including, but not limited to, credit scores obtained from external providers, trade references, bank references, and historical experience. Risk profiles differ based on customer location and are pooled as North America, Latin America and the Caribbean (“LAC”), and Europe, Middle East and Africa and Asia Pacific (“EMEA & APAC”). In 2021, we combined the EMEA & APAC regions as these customers have similar credit risk profiles and we apply the same expected loss rates when determining the allowance requirement.

During the year ended December 31, 2021 and 2020, customer financing receivables, primarily within LAC, of $8 million and $24 million, respectively, were ~~classified within Level 3~~written off as uncollectible due to the impacts of COVID-19. Additionally, due to the extended duration of the ~~fair value hierarchy.~~COVID-19 induced shutdowns in LAC and potential future impacts on our customers caused by COVID-19, we renegotiated payment plans to accommodate for the shutdowns and adjusted expected loss rates, increasing our allowance for credit losses during the year ended December 31, 2021 and 2020. At December 31, 2021 and 2020, we had $58 million and $43 million, respectively, of credit loss allowances associated with the LAC customer financing receivables.

F-27


8.	~~Fair Value of Financial Assets and Liabilities~~

Ta ble of Contents

The customer financing receivables at amortized cost by year of origination and the geography credit quality indicator at December 31, 2021 are as follows:


	Year of Origination
($ in millions)	2021	2020	2019	2018	Prior	Total
North America	31	26	7	—	2	67
LAC	34	14	88	28	10	174
EMEA & APAC	46	13	16	13	2	91
	111	54	112	41	14	332

The past due balance, which represents installments that are one day or more past their contractual due date, of customer financing receivables at amortized cost and the geography credit quality indicator at December 31, 2021 is as follows:


($ in millions)	North America	LAC	EMEA & APAC	Total
Past due	2	77	17	96
Short-term portion not yet due	35	47	42	124
Long-term portion not yet due	30	50	32	111
	67	174	91	332

8. Fair Value Measurements

Financial Assets and Liabilities ~~Carried~~Measured at Fair Value on a Recurring Basis

~~The following tables represent the fair value hierarchy for~~Our significant financial assets and liabilities measured at fair value aton a recurring basis as of December 31, ~~2018~~2021 and ~~2017:~~2020 are as follows:


		December 31, 2021
($ in millions)	Balance Sheet Location	Level 1	Level 2	Level 3	Total Fair Value
Assets:
Derivative assets	Other current and other non-current assets	—	3	—	3
Equity investments	Other non-current assets	6	—	—	6
Liabilities:
Derivative liabilities	Other current and other non-current liabilities	—	2	—	2

December 31, 2018
($ thousands) Level 1 Level 2 Level 3 Total Fair Value
Restricted cash equivalents 56,550
—
—
56,550
Derivative assets —
7,317
2,519
9,836
Available-for-sale investments 6,585
—
—
6,585
Derivative liabilities —
25,473
—
25,473

December 31, 2017
($ thousands) Level 1 Level 2 Level 3 Total
Restricted cash equivalents 57,465
—
—
57,465
Derivative assets —
501
2,638
3,139
Available-for-sale investments 11,991
—
—
11,991
Contingent consideration liabilities —
—
7,755
7,755
Derivative liabilities —
19,352
—
19,352


		December 31, 2020
($ in millions)	Balance Sheet Location	Level 1	Level 2	Level 3	Total Fair Value
Assets:
Derivative assets	Other current and other non-current assets	—	11	—	11
Equity investments	Other non-current assets	6	—	—	6
Liabilities:
Derivative liabilities	Other current and other non-current liabilities	—	10	—	10

Valuation Techniques ~~and Balance Sheet Presentation~~

Restricted cash equivalents are primarily composed of publicly-traded foreign government and corporate bonds and mutual funds, and were valued using quoted market prices. Restricted cash equivalents are presented in restricted cash and cash equivalents in the consolidated balance sheets.

Derivative assets and liabilities classified as Level 2 ~~in the table above~~ were derived from quoted market prices for similar instruments or by discounting the future cash flows with adjustments for credit risk as appropriate. All significant inputs were derived from or corroborated by observable market data including current forward exchange rates and LIBOR rates, among others. ~~The Level 3 derivative asset in~~

At December 31, 2021 and 2020, the ~~table above was valued based on a free~~carrying amounts for cash ~~flow forecast. Refer to Note 9,~~ ~~Derivative Financial Instruments,~~ ~~for additional information.~~

~~Certain of our available-for-sale investments are carried at fair value~~ and ~~were valued using quoted market prices. Available-for-sale investments are presented as~~cash equivalents, restricted cash, trade and other ~~non-current~~receivables, other current assets, ~~in the consolidated balance sheets.~~

~~Contingent consideration was valued using a multiple of earnings before interest, taxes, depreciation~~accounts payable, and ~~amortization ("EBITDA") and is presented as~~ other current liabilities ~~in the consolidated balance sheets.~~approximated their estimated fair values because of their short-term nature.

F-28

Ta ble of Contents

Financial Assets and Liabilities Not Carried at Fair Value

The ~~following tables represent the~~carrying amounts and fair value hierarchy ~~for~~classification of our significant financial assets and liabilities not ~~measured~~carried at fair value atas of December 31, ~~2018~~2021 and ~~2017:~~2020 are as follows:


	December 31, 2021
($ in millions)	Carrying Amount	Level 1	Level 2	Level 3	Total Fair Value
Assets:
Customer financing receivables, net	261	—	—	245	245
Equity investments	11	—	—	11	11
Liabilities:
Jackpot liabilities	196	—	—	184	184
Debt (1)	6,477	—	6,792	—	6,792


	December 31, 2020
($ in millions)	Carrying Amount	Level 1	Level 2	Level 3	Total Fair Value
Assets:
Customer financing receivables, net	316	—	—	313	313
Equity investments	12	—	—	12	12
Liabilities:
Jackpot liabilities	219	—	—	211	211
Debt (1)	8,243	—	8,702	—	8,702

(1) Excludes short-term borrowings and swap adjustments.

Level 3 equity investments are measured at cost, less impairment, plus or minus changes resulting from observable price changes, which approximates fair value.

December 31, 2018
($ thousands) Carrying
Value Level 1 Level 2 Level 3 Total Fair Value
Available-for-sale investments 13,509
—
—
13,509
13,509
Jackpot liabilities 254,567
—
—
229,089
229,089
Debt 7,996,073
—
8,089,154
—
8,089,154
9. Derivative Financial Instruments

December 31, 2017
($ thousands) Carrying
Value Level 1 Level 2 Level 3 Total Fair Value
Available-for-sale investments 12,409
—
—
12,409
12,409
Jackpot liabilities 275,626
—
—
268,581
268,581
Debt 8,391,647
—
8,974,126
—
8,974,126

~~Valuation Techniques and Balance Sheet Presentation~~

~~Certain of our 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.~~

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 (2.69%) for the estimated funding rate and the 10-year credit default swap rate (3.60%) for nonperformance risk. The present value (carrying value) of the expected lump sum payments were discounted using the 1-year treasury yield curve rate (2.63%) with the 1-year credit default swap rate (0.22%) for the current amounts, and the 2-year treasury yield curve rate (2.48%) with the 2-year credit default swap rate (0.60%) for non-current amounts. Significant increases (decreases) in any 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 and valued using quoted market prices, dealer quotes, or current interest rates. Carrying values in the table exclude swap adjustments.~~


9.	~~Derivative Financial Instruments~~

We use selected derivative hedging instruments, principally foreign currency forward contracts and interest rate swaps, for the purpose of managing currency risks and interest rate risk arising from our operations and sources of financing.

Cash Flow Hedges

The notional amount of foreign currency forward contracts, designated as cash flow hedges, outstanding at December 31, ~~2018~~2021 and ~~2017~~2020 were ~~$74.0~~$42 million and ~~$100.8~~$62 million, respectively. The amount recorded within other comprehensive income (loss) at December 31, ~~2018~~2021 is expected to impact the consolidated statement of operations in ~~2019.~~2022.

In March 2018, prior to the issuance of the €500 million of 3.500% Senior Secured Notes due July 2024 (the "3.500% Notes"), we executed €200.0 million notional amount of forward starting interest rate swaps to hedge against an increase in the interest rate benchmark applicable to the future expected issuance of euro denominated debt securities. We settled these swaps in June 2018 at a loss of €3.8 million ($4.4 million).

In March 2018, prior to the issuance of the $750 million of 6.250% Senior Secured Notes due January 2027 (the "6.250% Notes"), we executed $200.0 million notional amount of treasury rate lock contracts to hedge against an increase in the interest rate

benchmark applicable to the future expected issuance of U.S. dollar denominated debt securities. We settled these treasury rate lock contracts in June and September 2018 at a loss of $1.1 million and a gain $1.4 million, respectively.

~~There were no forward starting interest rate swaps or treasury locks outstanding at December 31, 2018 or 2017.~~

Fair Value Hedges

In September 2015, we executed ~~$625.0~~$625 million notional amount of interest rate swaps that effectively ~~convert $625.0~~converted $625 million of the 6.250% Senior Secured U.S. Dollar Notes due February 2022 from fixed interest rate debt to variable rate debt. Under the terms of these swaps, we are required to make variable rate interest payments based on six-month LIBOR plus a fixed spread, ranging between 6.95% and 7.07% at December 31, 2018, and will receive fixed rate interest payments from our counterparties based on a fixed rate of 6.25%. The LIBOR rate resets semiannually on February 15In March 2021 and August ~~15. Settlement~~2020, $425 million and $200 million notional amount of the ~~net amount of~~ interest ~~receivable or payable under the~~rate swaps, ~~occurs semiannually on February 15 and August 15. The swaps expire in February 2022.~~respectively, were early terminated.

Net Investment Hedges

In October 2018, we executed ~~$200.0~~$200 million notional amount of cross-currency swaps that ~~effectively converted fixed rate U.S. dollar denominated debt to euros. These~~are a hedge of foreign exchange risk associated with a net investment in foreign operations. In March 2021 and March 2020, $100 million notional amount of the cross-currency swaps ~~are being used to hedge a net investment. Under the terms~~were early terminated in each respective month.

F-29

Ta ble of these swaps, we are required to make semi-annual fixed rate interest payments in U.S. dollars based on a fixed rate of 6.25% and will receive fixed rate interest payments from our counterparties in euros based on a fixed rate of 2.86% on each February 15 and August 15. A final notional exchange will occur on settlement where we pay $200.0 million and receive €174.2 million. These cross-currency swaps expire in August 2021. There were no cross-currency swap contracts outstanding as of December 31, 2017.Contents

Derivatives Not Designated as Hedging Instruments

The notional amount of foreign currency forward contracts, not designated as hedging instruments, outstanding at December 31, ~~2018~~2021 and ~~2017~~2020 was ~~$518.7~~$283 million and ~~$460.6~~$295 million, respectively.

~~Balance Sheet Location and Fair Value~~

December 31,
($ thousands) Balance Sheet Location 2018 2017
Derivatives designated as hedging instruments
Foreign currency forward contracts Current assets 1,634
—
Current liabilities —
(2,362 )

Interest rate swaps Current liabilities (2,118 ) —
Non-current liabilities (17,839 ) (14,953 )

Cross-currency swaps Current assets 4,100
—
Non-current liabilities (1,850 ) —

Derivatives not designated as hedging instruments
Foreign currency forward contracts Current assets 1,583
501
Current liabilities (3,666 ) (2,037 )

Option contract Non-current assets 2,519
2,638

~~Income Statement Location and Effect~~

Gain (Loss) Recognized in Income
for the year ended December 31,
($ thousands) Income Statement Location 2018 2017 2016
Derivatives designated as hedging instruments
Foreign currency forward contracts Service revenue (536 ) (1,744 ) 5,218

Interest rate swaps Other income (expense), net (443 ) 427
(1,820 )
Interest income and Interest expense 941
—
—

Cross-currency swaps Interest income and Interest expense 1,340
—
—

Derivatives not designated as hedging instruments
Foreign currency forward contracts Foreign exchange gain (loss), net (17,944 ) (21,870 ) 16,873

Refer to Note ~~18,~~ 19 - Shareholders’ Equity- Accumulated Other Comprehensive Income for further information.


~~10.~~	~~Systems, Equipment and Other Assets Related to Contracts, net and Property, Plant and Equipment, net~~

10. Systems, Equipment and Other Assets Related to Contracts, net and Property, Plant and Equipment, net

Systems & Equipment and PPE, net consist of the following:


	Systems & Equipment, net		PPE, net
	December 31,		December 31,
($ in millions)	2021	2020	2021	2020
Land	—	—	1	1
Buildings	—	2	58	69
Terminals and systems	2,479	2,615	—	—
Furniture and equipment	138	150	255	259
Construction in progress	75	77	10	15
	2,691	2,844	324	344
Accumulated depreciation	(1,754)	(1,776)	(205)	(212)
	937	1,068	119	132

Systems & Equipment, net PPE, net
December 31, December 31,
($ thousands) 2018 2017 2018 2017
Land 303
547
2,462
2,542
Buildings 157,611
151,962
69,799
70,389
Terminals and systems 3,014,733
2,969,848
—
—
Furniture and equipment 205,305
197,610
257,444
241,632
Contracts in progress 74,382
149,245
—
—
Construction in progress —
—
12,777
20,603
3,452,334
3,469,212
342,482
335,166
Accumulated depreciation (2,047,908 ) (2,035,018 ) (157,133 ) (141,443 )
1,404,426
1,434,194
185,349
193,723

The estimated useful lives of assets are as follows:

Borrowing costs of $1.1 million and $4.2 million were capitalized to Systems & Equipment in 2018 and 2017, respectively. The rate used to determine the amount of borrowing costs eligible for capitalization was approximately 5.3% and 5.8% for 2018 and 2017, respectively, which was the effective interest rate of all borrowings.


~~11.~~Asset	~~Goodwill~~	Estimated life in years
Systems & Equipment
Buildings		40
Terminals and systems - lottery		Generally do not exceed 10 years
Terminals and systems - gaming		3-5
Furniture and equipment		Generally do not exceed 10 years
PPE
Buildings		40
Furniture and equipment		5-10

Leasehold improvements are amortized over the shorter of the corresponding lease term or estimated useful life.

Gain on Sale of Assets to Distributor

During 2019, we entered into a long-term strategic agreement with a distributor in Oklahoma that included the sale of used, non-premium equipment, which was previously included within systems, equipment and other assets related to contracts, net within the consolidated balance sheet. This sale resulted in a gain of $28 million which is classified in other operating expense (income), net on the consolidated statements of operations for the year ended December 31, 2019.

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11. Leases

Lessee

We have operating and finance leases for real estate (warehouses, office space, data centers), vehicles, communication equipment, and other equipment. Many of our real estate leases include one or more options to renew, while some include termination options. Certain vehicle and equipment leases include residual value guarantees and options to purchase the leased asset. Many of our real estate leases include variable payments for maintenance, real estate taxes, and insurance that are determined based on the actual costs incurred by the landlord.

The classification of our operating and finance leases in the consolidated balance sheets is as follows:


		December 31,
($ in millions)	Balance Sheet Classification	2021	2020
Assets:
Operating ROU asset	Operating lease right-of-use assets	283	288
Finance ROU asset, net (1)	Other non-current assets	29	33
Total lease assets		312	321

Liabilities:
Operating lease liability, current	Other current liabilities	39	44
Finance lease liability, current	Other current liabilities	10	11
Operating lease liability, non-current	Operating lease liabilities	269	266
Finance lease liability, non-current	Other non-current liabilities	27	31
Total lease liabilities		344	352

(1) Finance ROU assets are recorded net of accumulated amortization of $24 million and $16 million at December 31, 2021 and 2020, respectively.

Weighted-average lease terms and discount rates are as follows:


	December 31,
	2021		2020		2019
Weighted-Average Remaining Lease Term (in years)
Operating leases	8.47		8.32		8.80
Finance leases	4.73		5.13		6.01
Weighted-Average Discount Rate
Operating leases	6.71	%	7.01	%	7.74	%
Finance leases	4.98	%	5.16	%	5.45	%

Components of lease expense are as follows:


	For the year ended December 31,
($ in millions)	2021	2020	2019
Operating lease costs	71	72	76
Finance lease costs (1)	13	11	10
Variable lease costs (2)	23	23	22

(1) Includes amortization of ROU assets of $11 million, $9 million, and $8 million for the years ended December 31, 2021, 2020, and 2019, respectively and interest on lease liabilities of $2 million, $2 million, and $2 million, for the years ended December 31, 2021, 2020, and 2019, respectively.

(2) Includes immaterial amounts related to short-term leases and sublease income.

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Maturities of operating and finance lease liabilities at December 31, 2021 are as follows ($ in millions):


Year	Operating Leases	Finance Leases	Total (1)
2022	57	11	69
2023	52	9	60
2024	48	6	55
2025	44	6	49
2026	39	5	44
Thereafter	170	4	174
Total lease payments	410	41	451
Less: Imputed interest	(102)	(5)	(107)
Present value of lease liabilities	307	37	344

(1) The maturities above exclude leases that have not yet commenced. We have committed rental payments of $8.9 million for leases that will commence in 2022 with lease terms ranging from 7-9 years.

Cash flow information and non-cash activity related to leases is as follows:


	For the year ended December 31,
($ in millions)	2021	2020	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	67	68	74
Finance cash flows from finance leases	13	10	8

Non-cash activity:
ROU assets obtained in exchange for lease obligations (net of early terminations)
Operating leases	5	34	13
Finance leases	7	6	9

Lessor

We have various arrangements for lottery and gaming equipment under which we are the lessor.

Our lease arrangements typically have lease terms ranging from one month to 4 years. These leases generally meet the criteria for operating lease classification, as the lease payments are typically variable based on a percentage of sales, a percentage of amounts wagered, net win, or a daily fee per active gaming terminal. Our leases generally do not contain variable payments that are dependent on an index or rate. We provide lessees with the option to extend the lease, which is considered when evaluating lease classification. Lease income from operating leases is included within service revenue in the consolidated statements of operations. Operating lease income was approximately 6%, 6%, and 7% of total revenue for the years ended December 31, 2021, 2020, and 2019, respectively.

Our sales-type lease arrangements typically have lease terms ranging from one year to 10 years. We provide lessees with the option to extend the lease, which is considered when evaluating lease classification. Lease income from sales-type leases is included within product sales in the consolidated statements of operations. Total sales-type lease income was approximately 1% of total revenue for each of the years ended December 31, 2021, 2020, and 2019. Sales-type lease receivables are included within customer financing receivables, net, which are a component of other current assets and other non-current assets within the consolidated balance sheets. Additional information on customer financing receivables is included in Note 7 – Other Assets.

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12. Restructuring

During 2021 and 2020, we initiated the following restructuring plans as described below. During 2019, we expanded existing restructuring plans which were initiated in the prior year and were substantially completed by December 31, 2019.

2021 Italian Workforce Redundancies

In connection with the sale of our Italian B2C gaming machine, sports betting, and digital gaming businesses, management agreed to provide to the buyer information technology and back-office services for a period of one to three years via a TSA. As certain of these services are concluding, during the fourth quarter of 2021 management performed a detailed review of redundant roles and created a plan to eliminate certain redundancies as TSA services lapse, by commencing voluntary early retirement programs. We expect to incur approximately $38 million in severance and related employee costs associated with these early retirement programs through December 31, 2023, as management and the identified employees reach a mutual understanding of the separation benefits. Cash payments associated with these programs are expected to be made through 2030. During the year ended December 31, 2021 we incurred $11 million of severance and related employee costs under the plan, within our Global Lottery segment and corporate support function.

2020 Segment Reorganization

The 2020 segment reorganization plan was a global initiative that simplified our organizational structure and increased efficiency and effectiveness. During the year ended December 31, 2021 we revised our cost estimates resulting in a $1 million reduction of expense under the plan. Since the plan’s inception, we incurred severance and related employee costs primarily within our Global Lottery and Global Gaming segments and corporate support function totaling $15 million. This plan was substantially completed as of March 31, 2021.

2020 Global Supply Chain Optimization

The 2020 global supply chain optimization plan was an initiative that optimized our global supply chain and footprint resulting in a significant reduction to our primary manufacturing operations. During the year ended December 31, 2021 we revised our cost estimates resulting in a $1 million reduction of expense under the plan. Since the plan’s inception, we incurred severance and related employee costs, and other costs of $8 million, primarily within our Global Gaming segment. This plan was substantially completed as of March 31, 2021.

2020 Technology Organization Consolidation

The 2020 technology organization consolidation plan was an initiative that realigned and consolidated operations, reduced costs, and improved operational efficiencies within our Technology group. During the year ended December 31, 2021 we revised our cost estimates resulting in a $4 million reduction of expense under the plan. Since the plan’s inception, we incurred severance and related employee costs of $13 million, primarily within our Global Gaming segment. This plan was substantially completed as of December 31, 2021.

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Rollforward of Restructuring Liability

The following table presents the activity in the restructuring liabilities for the above plans for the years ended December 31, 2021 and December 31, 2020:


($ in millions)	Severance and Related Employee Costs	Other	Total
Balance at December 31, 2019	—	—	—
2020 segment reorganization plan expense, net	16	—	16
2020 global supply chain optimization plan expense, net (1)	5	3	8
2020 technology organization consolidation plan expense, net	17	—	17
Cash paid for all plans	(16)	(2)	(18)
Reversals of expense and other	1	—	1
Balance at December 31, 2020	23	1	24
2021 Italian workforce redundancies plan expense, net	11	—	11
Cash paid for all plans	(17)	—	(17)
Reversals of expense and other	(5)	(1)	(6)
Balance at December 31, 2021	12	1	13

(1) Other includes approximately $1 million of asset impairment costs, the offset of which is property, plant and equipment, net in the consolidated balance sheet.

Restructuring Expense

The following table summarizes consolidated restructuring expense by segment and type of cost:


	For the year ended December 31, 2021
($ in millions)	Severance and Related Employee Costs	Other	Total
Global Lottery	8	—	8
Global Gaming	(3)	(1)	(4)
Digital & Betting	(1)	—	(1)
Corporate and Other	2	—	2
Total	6	(1)	6


	For the year ended December 31, 2020
($ in millions)	Severance and Related Employee Costs	Other	Total
Global Lottery	5	—	5
Global Gaming	28	4	32
Digital & Betting	2	—	2
Corporate and Other	6	—	6
Total	41	4	45

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	For the year ended December 31, 2019
($ in millions)	Severance and Related Employee Costs	Other	Total
Global Lottery	2	—	2
Global Gaming	3	(1)	2
Digital & Betting (1)	—	16	16
Corporate and Other	2	3	4
Total	7	18	25

(1) Primarily consists of asset impairment costs.

13.Goodwill

As discussed in Note 21 – Segment Information, we established a dedicated Digital & Betting business segment, comprising our iGaming and sports betting activities that were previously included within our Global Gaming business segment. As a result, at September 1, 2021, we allocated a portion of goodwill associated with our Global Gaming reporting unit to the Digital & Betting reporting unit using a relative fair value approach. The goodwill allocated to the Global Gaming and Digital & Betting reporting units was $1.4 billion and $265 million, respectively, and the estimated fair values were determined to exceed the carrying values of each reporting unit, which indicated no impairment existed. In addition, we completed an assessment for any potential goodwill impairment for the former Global Gaming reporting unit immediately prior to the reallocation and determined that no impairment existed.

During 2020, we adopted a new organizational structure focused on 2 business segments: Global Lottery and Global Gaming. As a result of the change in reporting units, at July 1, 2020, we allocated goodwill to our new reporting units using a relative fair value approach. The goodwill allocated to the new Global Lottery and Global Gaming reporting units was $2.9 billion and $2.2 billion, respectively, and the estimated fair values were determined to exceed the carrying values, which indicated no impairment existed. In addition, we completed an assessment for any potential goodwill impairment for all the former reporting units immediately prior to the reallocation and determined that no impairment existed. Additionally, in connection with the sale of its Italian B2C gaming machine, sports betting, and digital gaming businesses, the Company allocated $520 million of goodwill to discontinued operations using a relative fair value approach. Prior to the allocation to discontinued operations, the goodwill was included within our Global Gaming segment.

Changes in the carrying amount of goodwill consist of the following:


		Reporting Units Prior to July 1, 2020			Reporting Units Subsequent to September 1, 2021(1)

($ in millions)	North America Gaming and Interactive	North America Lottery	International	Italy	Global Lottery	Global Gaming	Digital & Betting	Discontinued Operations	Total
Balance at December 31, 2019	1,440	1,222	1,308	1,482	—	—	—	(520)	4,931
Impairment	(103)	—	(193)	—	—	—	—	—	(296)
Segment realignment	(1,337)	(1,222)	(1,113)	(1,480)	2,942	2,209	—	—	—
Foreign currency translation	—	—	(2)	(2)	55	28	—	—	78
Discontinued operations	—	—	—	—	—	(520)	—	520	—
Balance at December 31, 2020	—	—	—	—	2,997	1,716	—	—	4,713
Segment realignment	—	—	—	—	—	(265)	265	—	—
Foreign currency translation	—	—	—	—	(49)	(5)	(3)	—	(58)
Balance at December 31, 2021	—	—	—	—	2,948	1,446	261	—	4,656

($ thousands)
North America
Gaming and
Interactive

North America
Lottery
International Italy Total
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 )
Disposal of DoubleDown (473,000 ) —
—
—
(473,000 )
Acquisitions —
—
14,890
7,303
22,193
Foreign currency translation —
—
6,786
70,949
77,735
Other 987
60
156
(328 ) 875
Balance at December 31, 2017 1,439,867
1,221,589
1,549,381
1,512,978
5,723,815
Impairment loss —
—
(118,000 ) —
(118,000 )
Foreign currency translation —
—
(8,534 ) (17,319 ) (25,853 )
Other —
—
—
265
265
Balance at December 31, 2018 1,439,867
1,221,589
1,422,847
1,495,924
5,580,227

Balance at December 31, 2017

Cost 2,153,867
1,225,682
1,674,381
1,514,777
6,568,707
Accumulated impairment loss (714,000 ) (4,093 ) (125,000 ) (1,799 ) (844,892 )
1,439,867
1,221,589
1,549,381
1,512,978
5,723,815

Balance at December 31, 2018

Cost 2,153,867
1,225,682
1,658,698
1,497,641
6,535,888
Accumulated impairment loss (714,000 ) (4,093 ) (235,851 ) (1,717 ) (955,661 )
1,439,867
1,221,589
1,422,847
1,495,924
5,580,227
(1) From July 1, 2020 to August 31, 2021, we operated under only 2 business segments: Global Lottery and Global Gaming.

~~We assess our reporting units annually and have four reporting units (which are equivalent to our segments)~~Total goodwill at December 31, ~~2018 as follows:~~

2021, 2020, and 2019 is net of $1.3 billion, $1.3 billion, and $1.1 billion, respectively, of accumulated impairment losses primarily arising from the former North America Gaming and ~~Interactive;~~Interactive and International segments of $817 million and $526 million in both 2021 and 2020, respectively, and $714 million and $333 million in 2019, respectively.

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Impairment

During the first quarter of 2020, we determined there was an interim goodwill impairment triggering event caused by COVID-19. As a result of the identified triggering event, we estimated the fair value of each of our former reporting units using an income approach based on projected discounted cash flows. Based principally on lower forecasted revenue and operating profits caused by lower demand for our commercial gaming products, we recorded a $296 million non-cash impairment loss with no income tax benefit, of which $193 million and $103 million was recorded within our former International and North America ~~Lottery;~~

~~International; and~~

~~Italy.~~

~~For a discussion~~Gaming reporting units, respectively, to reduce the carrying amount of the reporting units to fair value.

During the fourth quarter of 2019, we determined there was an impairment in the former International reporting unit’s goodwill due to lower forecasted cash flows along with a higher weighted-average cost of capital. As a result, we recorded a $99 million non-cash impairment ~~losses in 2018~~loss with no income tax benefit and ~~2017, refer~~reduced the carrying amount of our former International reporting unit to ~~Note 23,~~ ~~Impairment Loss~~.fair value.


~~12.~~	~~Intangible Assets, net~~

14.Intangible Assets, net

Intangible assets at December 31, ~~2018~~2021 and ~~2017 consist of:~~ 2020 are summarized as follows:


			December 31, 2021			December 31, 2020
($ in millions)	Estimated Life (Years)	Weighted- Average Amortization Period (Years)	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Amortized:
Customer relationships	2-20	15.5	2,298	1,349	949	2,300	1,230	1,070
Computer software and game library	3-14	5.6	918	809	109	918	784	134
Trademarks	1-20	14.1	185	106	80	186	92	94
Developed technologies	2-15	5.6	233	216	17	225	213	13
Licenses	3-23	3.5	65	58	6	69	59	11
Other	4-17	9.0	35	28	7	37	27	10
			3,734	2,566	1,168	3,736	2,403	1,332
Unamortized:
Trademarks			245	—	245	245	—	245
			3,979	2,566	1,413	3,981	2,403	1,577

December 31, 2018
($ thousands) Gross Carrying
Amount Accumulated
Amortization Net Book
Value Weighted Average
Life (years)
Subject to amortization

Customer relationships 2,428,946
1,093,753
1,335,193
15.2
Computer software and game library 967,828
753,160
214,668
5.5
Trademarks 185,590
61,806
123,784
14.1
Licenses 294,104
221,934
72,170
10.0
Developed technologies 220,097
179,192
40,905
5.4
Networks 18,808
13,978
4,830
7.0
Sports and horse racing betting rights 134,197
131,933
2,264
6.5
Other 8,652
4,656
3,996
16.1
4,258,222
2,460,412
1,797,810

Not subject to amortization

Trademarks 246,913
—
246,913

Total intangible assets, excluding goodwill 4,505,135
2,460,412
2,044,723

December 31, 2017
($ thousands) Gross Carrying
Amount Accumulated
Amortization Net Book
Value Weighted Average
Life (years)
Subject to amortization

Customer relationships 2,434,051
956,586
1,477,465
15.2
Computer software and game library 947,207
710,725
236,482
5.6
Trademarks 186,218
47,053
139,165
14.1
Licenses 300,207
204,533
95,674
10.1
Developed technologies 220,213
155,870
64,343
5.4
Networks 18,806
13,571
5,235
7.0
Sports and horse racing betting rights 132,521
128,888
3,633
6.5
Other 8,660
4,110
4,550
16.1
4,247,883
2,221,336
2,026,547

Not subject to amortization

Trademarks 246,913
—
246,913

Total intangible assets, excluding goodwill 4,494,796
2,221,336
2,273,460

In connection with the June 2017 sale of DoubleDown, we recorded a $277.3 million reduction in net book value of intangible assets (principally customer relationships and trademarks) related to the sale.

Intangible asset amortization expense of ~~$272.7~~$190 million, ~~$401.5~~$203 million, and ~~$492.1~~$220 million (which includes computer software amortization expense of ~~$29.6~~$23 million, ~~$31.4~~$26 million, and ~~$38.4~~$29 million) was recorded in ~~2018, 2017~~2021, 2020, and ~~2016,~~2019, respectively.

Amortization expense on intangible assets for the next five years is expected to be as follows ($ ~~thousands)~~in millions):


Year						Amount
2022						186
2023						163
2024						146
2025						122
2026						111
						728

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Year Amount
2019 255,892
2020 226,128
2021 196,190
2022 174,281
2023 147,970
Total 1,000,461


~~13.~~	~~Other Liabilities~~

~~Other Current Liabilities~~

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December 31,
($ thousands) 2018 2017
Taxes other than income taxes 149,203
128,703
Employee compensation 145,616
146,891
Accrued interest payable 139,276
179,230
Accrued expenses 115,165
121,181
Current financial liabilities 107,316
113,217
Jackpot liabilities 76,191
84,250
Contract liabilities 72,005
81,111
Payable to Italian regulator —
899,475
Other 11,950
26,817
816,722
1,780,875
15.Debt

~~Payable to Italian Regulator~~

The ~~Italian Scratch & Win extension required an upfront license fee to Agenzia delle Dogane e Dei Monopoli,~~Company’s long-term debt obligations consist of the ~~governmental authority responsible~~following:


	December 31, 2021
($ in millions)	Principal	Debt issuance cost, net	Total
5.350% Senior Secured U.S. Dollar Notes due October 2023	61	—	61
3.500% Senior Secured Euro Notes due July 2024	566	(3)	564
6.500% Senior Secured U.S. Dollar Notes due February 2025	1,100	(7)	1,093
4.125% Senior Secured U.S. Dollar Notes due April 2026	750	(6)	744
3.500% Senior Secured Euro Notes due June 2026	849	(5)	844
6.250% Senior Secured U.S. Dollar Notes due January 2027	750	(5)	745
2.375% Senior Secured Euro Notes due April 2028	566	(4)	562
5.250% Senior Secured U.S. Dollar Notes due January 2029	750	(6)	744
Senior Secured Notes	5,393	(36)	5,357

Euro Term Loan Facilities due January 2027	1,133	(12)	1,121


Long-term debt, less current portion	6,525	(48)	6,477






Short-term borrowings	52	—	52

Total debt	6,577	(48)	6,529


	December 31, 2020
($ in millions)	Principal	Debt issuance cost, net	Swap	Total
6.250% Senior Secured U.S. Dollar Notes due February 2022	1,000	(3)	7	1,004
4.750% Senior Secured Euro Notes due February 2023	1,043	(5)	—	1,038
5.350% Senior Secured U.S. Dollar Notes due October 2023	61	—	—	61
3.500% Senior Secured Euro Notes due July 2024	614	(4)	—	610
6.500% Senior Secured U.S. Dollar Notes due February 2025	1,100	(8)	—	1,092
3.500% Senior Secured Euro Notes due June 2026	920	(7)	—	913
6.250% Senior Secured U.S. Dollar Notes due January 2027	750	(6)	—	744
2.375% Senior Secured Euro Notes due April 2028	614	(5)	—	608
5.250% Senior Secured U.S. Dollar Notes due January 2029	750	(7)	—	743
Senior Secured Notes	6,851	(45)	7	6,813

Euro Term Loan Facilities due January 2027	1,055	(11)	—	1,044


Long-term debt, less current portion	7,906	(56)	7	7,857



Euro Term Loan Facility due January 2027	393	—	—	393
Current portion of long-term debt	393	—	—	393



Total debt	8,299	(56)	7	8,250

At December 31, 2021 and December 31, 2020, $17 million and $24 million, respectively, of debt issuance costs, net for ~~regulating and supervising gaming~~the Revolving Credit Facilities with no outstanding borrowings, are recorded as other non-current assets in ~~Italy ("ADM" or~~ the ~~"Italian regulator") of €800.0 million, of which €50.0 million ($59.3 million) was paid in 2017 and the remaining €750.0 million ($878.1 million) was paid in 2018.~~consolidated balance sheets.

~~Other Non-Current Liabilities~~

F-37

December 31,
($ thousands) 2018 2017
Jackpot liabilities 178,376
191,376
Contract liabilities 67,022
54,895
Capital leases 57,756
57,183
Reserve for uncertain tax positions 40,803
34,447
Royalties payable 26,686
32,997
Other 74,802
75,215
445,445
446,113


~~14.~~	~~Debt~~

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December 31,
($ thousands) 2018 2017
7.500% Senior Secured Notes due July 2019 —
148,231
4.125% Senior Secured Notes due February 2020 499,167
833,655
5.625% Senior Secured Notes due February 2020 —
595,767
4.750% Senior Secured Notes due March 2020 438,252
585,171
5.500% Senior Secured Notes due June 2020 27,519
125,709
6.250% Senior Secured Notes due February 2022 1,469,609
1,470,075
4.750% Senior Secured Notes due February 2023 964,730
1,008,601
5.350% Senior Secured Notes due October 2023 60,983
61,082
3.500% Senior Secured Notes due July 2024 567,179
—
6.500% Senior Secured Notes due February 2025 1,088,385
1,086,913
6.250% Senior Secured Notes due January 2027 742,667
—
Senior Secured Notes, long-term 5,858,491
5,915,204

Revolving Credit Facilities due July 2021 413,381
76,880
Term Loan Facility due January 2023 1,705,395
1,785,361
Long-term debt, less current portion 7,977,267
7,777,445

6.625% Senior Secured Notes due February 2018 —
599,114
Current portion of long-term debt —
599,114

Short-term borrowings 34,822
—

Total Debt 8,012,089
8,376,559

The principal ~~balance~~amount of ~~each~~long-term debt ~~obligation, excluding short-term borrowings, reconciles to the consolidated balance sheet as follows:~~

December 31, 2018
($ thousands) Principal
Debt issuance
cost, net
Premium Swap Total
4.125% Senior Secured Notes due February 2020 501,058
(1,891 ) —
—
499,167
4.750% Senior Secured Notes due March 2020 444,146
(5,894 ) —
—
438,252
5.500% Senior Secured Notes due June 2020 27,311
—
234
(26 ) 27,519
6.250% Senior Secured Notes due February 2022 1,500,000
(11,611 ) —
(18,780 ) 1,469,609
4.750% Senior Secured Notes due February 2023 973,250
(8,520 ) —
—
964,730
5.350% Senior Secured Notes due October 2023 60,567
—
416
—
60,983
3.500% Senior Secured Notes due July 2024 572,500
(5,321 ) —
—
567,179
6.500% Senior Secured Notes due February 2025 1,100,000
(11,615 ) —
—
1,088,385
6.250% Senior Secured Notes due January 2027 750,000
(7,333 ) —
—
742,667
Senior Secured Notes, long-term 5,928,832
(52,185 ) 650
(18,806 ) 5,858,491

Revolving Credit Facilities due July 2021 428,158
(14,777 ) —
—
413,381
Term Loan Facility due January 2023 1,717,500
(12,105 ) —
—
1,705,395
Total Debt, excluding short-term borrowings 8,074,490
(79,067 ) 650
(18,806 ) 7,977,267

December 31, 2017
($ thousands) Principal Debt issuance
cost, net Premium Swap Total
7.500% Senior Secured Notes due July 2019 144,303
—
3,708
220
148,231
4.125% Senior Secured Notes due February 2020 839,510
(5,855 ) —
—
833,655
5.625% Senior Secured Notes due February 2020 600,000
(4,233 ) —
—
595,767
4.750% Senior Secured Notes due March 2020 599,650
(14,479 ) —
—
585,171
5.500% Senior Secured Notes due June 2020 124,143
—
1,757
(191 ) 125,709
6.250% Senior Secured Notes due February 2022 1,500,000
(14,808 ) —
(15,117 ) 1,470,075
4.750% Senior Secured Notes due February 2023 1,019,405
(10,804 ) —
—
1,008,601
5.350% Senior Secured Notes due October 2023 60,567
—
515
—
61,082
6.500% Senior Secured Notes due February 2025 1,100,000
(13,087 ) —
—
1,086,913
Senior Secured Notes, long-term 5,987,578
(63,266 ) 5,980
(15,088 ) 5,915,204

6.625% Senior Secured Notes due February 2018 599,650
(536 ) —
—
599,114
Revolving Credit Facilities due July 2021 95,000
(18,120 ) —
—
76,880
Term Loan Facility due January 2023 1,798,950
(13,589 ) —
—
1,785,361
Total Debt, excluding short-term borrowings 8,481,178
(95,511 ) 5,980
(15,088 ) 8,376,559

~~Principal payments for each debt obligation, excluding short-term borrowings, for~~maturing over the next five years and thereafter ~~are~~ as ~~follows:~~of December 31, 2021 is as follows ($ in millions):


Year	U.S. Dollar Denominated	Euro Denominated	Total
2022	—	—	—
2023	61	—	61
2024	—	793	793
2025	1,100	227	1,327
2026	750	1,076	1,826
2027 and thereafter	1,500	1,019	2,519
Total principal payments	3,411	3,115	6,525

Calendar year
($ thousands) 2019 2020 2021 2022 2023 2024 and
thereafter Total
4.125% Senior Secured Notes due February 2020 —
501,058
—
—
—
—
501,058
4.750% Senior Secured Notes due March 2020 —
444,146
—
—
—
—
444,146
5.500% Senior Secured Notes due June 2020 —
27,311
—
—
—
—
27,311
6.250% Senior Secured Notes due February 2022 —
—
—
1,500,000
—
—
1,500,000
4.750% Senior Secured Notes due February 2023 —
—
—
—
973,250
—
973,250
5.350% Senior Secured Notes due October 2023 —
—
—
—
60,567
—
60,567
3.500% Senior Secured Notes due July 2024 —
—
—
—
—
572,500
572,500
6.500% Senior Secured Notes due February 2025 —
—
—
—
—
1,100,000
1,100,000
6.250% Senior Secured Notes due January 2027 —
—
—
—
—
750,000
750,000
Senior Secured Notes, long-term —
972,515
—
1,500,000
1,033,817
2,422,500
5,928,832

Revolving Credit Facilities due July 2021 —
—
428,158
—
—
—
428,158
Term Loan Facility due January 2023 —
366,400
366,400
366,400
618,300
—
1,717,500
Total Principal Payments —
1,338,915
794,558
1,866,400
1,652,117
2,422,500
8,074,490

Senior Secured Notes

The key terms of our senior secured notes (the ~~"Notes"~~“Notes”), which ~~are~~were rated ~~Ba2~~Ba3 and ~~BB+~~BB by Moody’s Investor Service ~~("Moody’s"~~(“Moody’s”) and Standard & Poor’s Ratings Services ("(“S~~&P"~~&P”), respectively, at December 31, 2021, are as follows:

Description Principal (thousands) Effective
Interest Rate Issuer Guarantors Collateral Redemption Interest payments
4.125% Senior Secured Notes due February 2020 €437,605 4.47% Parent * † + Semi-annually in arrears
4.750% Senior Secured Notes due March 2020 ⁽¹⁾
€387,900 6.00% Parent * † ++ Annually in arrears
5.500% Senior Secured Notes due June 2020 $27,311 4.88% IGT ** †† +++ Semi-annually in arrears
6.250% Senior Secured Notes due February 2022 $1,500,000 6.52% Parent * † ++++ Semi-annually in arrears
4.750% Senior Secured Notes due February 2023 €850,000 4.98% Parent * † ++++ Semi-annually in arrears
5.350% Senior Secured Notes due October 2023 $60,567 5.47% IGT ** †† +++ Semi-annually in arrears
3.500% Senior Secured Notes due July 2024 €500,000 3.68% Parent * † ++++ Semi-annually in arrears
6.500% Senior Secured Notes due February 2025 $1,100,000 6.71% Parent * † ++++ Semi-annually in arrears
6.250% Senior Secured Notes due January 2027 $750,000 6.41% Parent * † ++++ Semi-annually in arrears

~~(1)Subject to a 1.25% per annum decrease in the event of an upgrade in ratings by Moody’s and S&P.~~

Description

Principal
(in millions)

Effective
Interest Rate

Issuer

Guarantors

Collateral

Redemption

Interest payments

5.350% Senior Secured U.S. Dollar Notes due October 2023

$61

5.47%

IGT

††

Semi-annually in arrears

3.500% Senior Secured Euro Notes due July 2024

€500

3.68%

Parent

†

Semi-annually in arrears

6.500% Senior Secured U.S. Dollar Notes due February 2025

$1,100

6.71%

Parent

†

Semi-annually in arrears

4.125% Senior Secured U.S. Dollar Notes due April 2026

$750

4.34%

Parent

†

+++

Semi-annually in arrears

3.500% Senior Secured Euro Notes due June 2026

€750

3.65%

Parent

†

+++

Semi-annually in arrears

6.250% Senior Secured U.S. Dollar Notes due January 2027

$750

6.41%

Parent

†

Semi-annually in arrears

2.375% Senior Secured Euro Notes due April 2028

€500

2.50%

Parent

†

+++

Semi-annually in arrears

5.250% Senior Secured U.S. Dollar Notes due January 2029

$750

5.39%

Parent

†

+++

Semi-annually in arrears

* Certain subsidiaries of the Parent.

** The Parent and certain subsidiaries of the Parent.


†	~~Ownership interests of the Parent in certain of its direct subsidiaries and certain intercompany loans with principal balances in excess of $10 million.~~


††	~~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 the date which is three months prior to maturity at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. After such date, 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 the 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 any time prior to maturity at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. 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 or in part at any time prior maturity at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. IGT may also redeem in whole or in part at 100% of their principal amount together with accrued and unpaid interest in connection with certain gaming regulatory events. Upon the occurrence of certain events, IGT will be required to offer to repurchase all of the notes at a price equal to 101% of their principal amount together with accrued and unpaid interest.

† Ownership interests in certain subsidiaries of the Parent, certain intercompany loans with principal balances in excess of $10 million and certain accounts receivable.

~~++++~~

The Parent may redeem in whole or in part at any time prior to the date which is six months prior to maturity at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. After such date, 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 the notes at a price equal to 101% of their principal amount together with accrued and unpaid interest.

†† Certain intercompany loans with principal balances in excess of $10 million and certain accounts receivable.

+ International Game Technology (“IGT”) may redeem in whole or in part at any time prior to maturity at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. IGT may also redeem in whole or in part at 100% of their principal amount together with accrued and unpaid interest in connection with certain gaming regulatory events. Upon the occurrence of certain events, IGT will be required to offer to repurchase all of the notes at a price equal to 101% of their principal amount together with accrued and unpaid interest.

++ The Parent may redeem in whole or in part at any time prior to the date which is six months prior to maturity at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. After such date, 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 the notes at a price equal to 101% of their principal amount together with accrued and unpaid interest.

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+++ The Parent may redeem in whole or in part at any time prior to the first date set forth in the redemption price schedule at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. After such date, the Parent may redeem in whole or in part at a redemption price set forth in the redemption price schedule in the indenture, 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 the notes at a price equal to 101% of their principal amount together with accrued and unpaid interest.

The Notes contain customary covenants and events of default. At December 31, ~~2018,~~2021, the issuers were in compliance with ~~all~~the covenants.

~~6.250%~~On February 11, 2022, the Moody’s rating increased to Ba2 and on February 16, 2022, the S&P’s rating increased to BB+.

4.750% Senior Secured Euro Notes due ~~January 2027~~February 2023

~~On September 26, 2018,~~In May 2021, the ~~Parent issued $750 million of 6.250% Senior Secured Notes due January 2027 (the "6.250% Notes") at par.~~

~~The~~ Parent used the ~~net~~ proceeds from the ~~6.250% Notes~~sale of the Italian B2C gaming machine, sports betting, and digital gaming businesses and borrowings under the Revolving Credit Facilities ~~due July 2021~~ to redeem ~~$600.0 million~~$1.0 billion (€850 million) of the ~~5.625%~~4.750% Senior Secured Euro Notes due February ~~2020 (the "5.625% Notes"), $144.3 million~~2023 through the exercise of the ~~7.500% Senior Secured Notes due July 2019 (the "7.500% Notes") and $96.8 million of the 5.500% Senior Secured Notes due June 2020 (the "5.500% Notes"),~~make-whole call option for total consideration, excluding interest, of ~~$865.8 million.~~$1.1 billion. The Company recorded a ~~$24.8~~$67 million loss on extinguishment of debt in connection with the ~~redemptions,~~repurchase, which is classified in other expense (income), net onin the consolidated statement of operations for the year ended December 31, ~~2018.~~2021.

4.125% Senior Secured U.S. Dollar Notes due April 2026

In March 2021, the Parent issued $750 million of 4.125% Senior Secured U.S. Dollar Notes due April 2026 (the “4.125% Notes”) at par. The Parent used the proceeds to partially redeem the 6.250% Senior Secured U.S. Dollar Notes due February 2022.

Interest on the ~~6.250%~~4.125% Notes is payable semi-annually in arrears.

The ~~6.250%~~4.125% Notes are guaranteed by certain subsidiaries of the Parent and are secured by ownership interests in certain subsidiaries of the Parent, ~~in certain of its direct subsidiaries and~~ certain intercompany loans with principal balances in excess of $10 ~~million.~~million and certain accounts receivable.

Prior to ~~July~~April 15, ~~2026,~~2023, the Parent may redeem the ~~6.250%~~4.125% Notes in whole or in part at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. ~~On or after July~~From April 15, ~~2026,~~2023 to April 14, 2024, the Parent may redeem the ~~6.250%~~4.125% Notes in whole or in part at 102.063% of their principal amount together with accrued and unpaid interest. From April 15, 2024 to April 14, 2025, the Parent may redeem the 4.125% Notes in whole or in part at 101.031% of their principal amount together with accrued and unpaid interest. On or after April 15, 2025, the Parent may redeem the 4.125% Notes in whole or in part at 100% of their principal amount together with accrued and unpaid interest. The Parent may also redeem the ~~6.250%~~4.125% Notes 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 the ~~6.250%~~4.125% Notes at a price equal to 101% of their principal amount together with accrued and unpaid interest. In certain events of default, the ~~6.250%~~4.125% Notes outstanding may become due and payable immediately.

~~3.500%~~6.250% Senior Secured U.S. Dollar Notes due ~~July 2024~~February 2022

~~On June 27, 2018,~~In March 2021, the ~~Parent issued €500 million of 3.500% Senior Secured Notes due July 2024 (the "3.500% Notes") at par.~~

~~The~~ Parent used the ~~net~~ proceeds from the ~~3.500% Notes to repurchase €262.4 million ($303.6 million)~~sale of the 4.125% Notes and borrowings under the Revolving Credit Facilities to redeem $1.0 billion of the 6.250% Senior Secured U.S. Dollar Notes due February ~~2020 (the "4.125% Notes") and €112.1 million ($129.7 million) of the 4.750% Senior Secured Notes due March 2020 (the "4.750% Notes"),~~2022 for total consideration, excluding interest, of ~~€395.5 million ($457.5 million).~~$1.0 billion. The Company recorded ~~a $29.6~~an $18 million loss on extinguishment of debt in connection with the ~~repurchases,~~repurchase, of which a $24 million loss is classified in other expense (income), net onand an offsetting gain of $6 million is classified in interest expense, net in the consolidated statement of operations for the year ended December 31, ~~2018.~~2021.

5.250% Senior Secured U.S. Dollar Notes due January 2029

In June 2020, the Parent issued $750 million of 5.250% Senior Secured U.S. Dollar Notes due January 2029 (the “5.250% Notes”) at par.

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The Parent used the net proceeds from the 5.250% Notes to repurchase $500 million of the 6.250% Senior Secured U.S. Dollar Notes due February 2022 for total consideration, excluding interest, of $525 million. The Company recorded a $23 million loss on extinguishment of debt in connection with the repurchase, of which a $28 million loss is classified in other expense (income), net and an offsetting gain of $5 million is classified in interest expense, net in the consolidated statement of operations for the year ended December 31, 2020.

Interest on the ~~3.500%~~5.250% Notes is payable semi-annually in arrears.

The ~~3.500%~~5.250% Notes are guaranteed by certain subsidiaries of the Parent and are secured by ownership interests in certain subsidiaries of the Parent, ~~in certain of its direct subsidiaries and~~ certain intercompany loans with principal balances in excess of $10 ~~million.~~million and certain accounts receivable.

Prior to January 15, 2024, the Parent may redeem the ~~3.500%~~5.250% Notes in whole or in part at 100% of their principal amount together with accrued and unpaid interest and a make-whole premium. From January 15, 2024 to January 14, 2025, the Parent may redeem the 5.250% Notes in whole or in part at 102.625% of their principal amount together with accrued and unpaid interest. From January 15, 2025 to January 14, 2026, the Parent may redeem the 5.250% Notes in whole or in part at 101.313% of their principal amount together with accrued and unpaid interest. On or after January 15, ~~2024,~~2026, the Parent may redeem the ~~3.500%~~5.250% Notes in whole or in part at 100% of their principal amount together with accrued and unpaid interest. The Parent may also redeem the ~~3.500%~~5.250% Notes 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 the ~~3.500%~~5.250% Notes at a price equal to 101% of their principal amount together with accrued and unpaid interest. In certain events of default, the ~~3.500%~~5.250% Notes outstanding may become due and payable immediately.

~~6.625%~~5.500% Senior Secured U.S. Dollar Notes due ~~February 2018~~June 2020

~~The~~In June 2020, the Parent redeemed the~~€500~~$27 million ~~($625.5 million) 6.625%~~ 5.500% Senior Secured U.S. Dollar Notes due ~~February 2018~~June 2020 when they ~~matured on February 2, 2018, using~~matured.

4.750% Senior Secured Euro Notes due March 2020

In March 2020, the Parent redeemed the €388 million ($432 million) 4.750% Senior Secured Euro Notes due March 2020 when they matured.

2.375% Senior Secured Euro Notes due April 2028

In September 2019, the Parent issued €500 million of 2.375% Senior Secured Euro Notes due April 2028 (the “2.375% Notes”) at par.

The Parent used the net proceeds from the 2.375% Notes to pay the €320 million ($350 million) first installment on the Euro Term Loan Facility due January ~~2023.~~

~~7.500% Senior Secured Notes~~2020 on September 27, 2019 and to pay down $192 million of the Revolving Credit Facilities due July ~~2019~~

~~On June 12, 2017, the Parent offered to purchase any and all of the $500.0 million 7.500% Notes and on June 21, 2017 the Parent purchased $355.7 million of these notes~~2024, for total consideration, excluding interest, of ~~$393.5~~$543 million. The Company recorded a ~~$25.7~~$2 million loss on extinguishment of debt in connection with the ~~purchase,~~Term Loan repayment, which is classified in other expense (income), net on the consolidated statement of operations for the year ended December 31, ~~2017.~~2019.

3.500% Senior Secured Euro Notes due June 2026

In June 2019, the Parent issued €750 million of 3.500% Senior Secured Euro Notes due June 2026 (the “3.500% Notes due 2026”) at par.

The Parent used the net proceeds from the 3.500% Notes due 2026 to repurchase €438 million ($498 million) of the 4.125% Senior Secured Euro Notes due February 2020 (the “4.125% Notes”) and pay down $339 million of the Revolving Credit Facilities due July 2024, for total consideration, excluding interest, of $845 million. The Company recorded a €9 million ($10 million) loss on extinguishment of debt in connection with the repurchase, which is classified in other expense (income), net on the consolidated statement of operations for the year ended December 31, 2019.

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Euro Term Loan ~~Facility~~Facilities

OnThe Parent is a party to a Senior Facility Agreement dated July 25, 2017, ~~the Parent entered into a senior facility agreement~~as amended (the ~~"Term Loan Facility Agreement"~~“TLF Agreement”), which provided for a €1.5 billion term loan facility maturing on January 25, 2023 that was repayable in annual installments of €320 million due January ~~2023~~25 of each of 2020, 2021 and 2022 with a final installment of €540 million due January 25, 2023. The Parent prepaid the installment due January 25, 2020 with proceeds of the 2.375% Notes issued in September 2019 and repaid the installment due January 25, 2021 at the due date.

In May 2020, the Company entered into an amendment to the TLF Agreement which modified the TLF Agreement by, among other things:

•Providing a waiver of the covenants requiring the Company to maintain a minimum ratio of EBITDA to net interest costs and a maximum ratio of total net debt to EBITDA from the fiscal quarter ending June 30, 2020 through the fiscal quarter ending June 30, 2021 and established new thresholds for these financial covenants starting with the fiscal quarter ending September 30, 2021 as described in the amendments;

•Providing that the obligation to grant security over additional collateral be waived provided that the public debt ratings of the Company are not less than BB- or Ba3;

•Increasing the margin from 2.75% to 3.25% if the public debt ratings of the Company are B+ or B1 (or lower); and

•Prohibiting restricted payments (including dividends and ordinary share repurchases) during the period commencing on April 1, 2020 and expiring on June 30, 2021, and permitting restricted payments during the period commencing on July 1, 2021 and expiring on the maturity date of the respective agreements provided that the ratio of total net debt to EBITDA as adjusted to reflect the restricted payment is less than specified thresholds.

In addition, the amendment to the TLF Agreement provided that the margin applicable to all loans under the TLF Agreement outstanding as of April 11, 2020 was increased to 2.50%.

In July 2021, the Parent entered into an Amendment and Restatement Agreement (the ~~"Term~~“Amendment and Restatement Agreement”) with respect to the TLF Agreement. The Amendment and Restatement Agreement among other things: (i) added a second term loan facility with IGT Lottery Holdings B.V. as the borrower, (ii) increased the aggregate amount of the term loan facilities (the “Euro Term Loan ~~Facility"~~Facilities”). from €860 million to €1.0 billion (with each of the Parent and IGT Lottery Holdings B.V. borrowing €500 million), (iii) extended the maturity date of the Euro Term Loan Facilities to January 25, 2027, (iv) reduced the applicable interest rate by 35 basis points based on current debt ratings, (v) provided for a maximum decrease or increase of an additional 7.5 basis points in the margin based on environmental, social and governance factors, and (vi) maintained and extended existing financial covenant thresholds.

As a result of the Amendment and Restatement Agreement, the Company reclassified the €320 million current portion of long-term debt to long-term debt.

The ~~Parent~~borrowers must repay the Euro Term Loan ~~Facility~~Facilities in ~~four~~ installments, as detailed below:



Due Date						Amount ~~(€ thousands)~~ (€ in millions)
January 25, ~~2020~~2024						~~320,000~~200
January 25, ~~2021~~2025						~~320,000~~200
January 25, ~~2022~~2026						~~320,000~~200
January 25, ~~2023~~2027						~~540,000~~400

We recorded a $2 million loss on extinguishment of debt in connection with the Amendment and Restatement Agreement, which is classified in other expense (income), net in the consolidated statement of operations for the year ended December 31, 2021.

In September 2021, the Company received an upgraded environmental, social, and governance rating and pursuant to the Amendment and Restatement Agreement, the interest rate was decreased by 4 basis points effective September 17, 2021.

Interest on the Euro Term Loan ~~Facility~~Facilities is payable between one and six months in arrears at rates equal to the applicable ~~LIBOR or~~ EURIBOR plus a margin based on our long-term ratings by Moody’s and S&P. At December 31, ~~2018~~2021 and ~~2017,~~2020, the effective interest rate on the Euro Term Loan ~~Facility~~Facilities was ~~2.05%.~~2.11% and 2.50%, respectively.

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The Euro Term Loan ~~Facility is~~Facilities are guaranteed by certain subsidiaries of the Parent and isare secured by ownership interests in certain subsidiaries of the Parent, ~~in certain of its direct subsidiaries and~~ certain intercompany loans with principal balances in excess of $10 ~~million.~~million and certain accounts receivable.

Upon the occurrence of certain events, the ~~Parent~~borrowers may be required to prepay the Euro Term Loan ~~Facility~~Facilities in full.

The ~~Term Loan Facility~~TLF Agreement, as amended by the Amendment and Restatement 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, ~~2018,~~2021, the Parent was in compliance with ~~all~~the covenants.

Revolving Credit Facilities

The Parent and certain of its subsidiaries are party to a ~~senior facilities agreement~~Senior Facilities Agreement dated November 4, 2014, as amended (the ~~"RCF Agreement"~~“RCF Agreement”), which provides for the following multi-currency revolving credit facilities (the ~~"Revolving~~“Revolving Credit ~~Facilities"~~Facilities”):

which mature on July 31, 2024:

Maximum Amount

Available ~~(thousands)~~

(in millions)

Facility

Borrowers

$~~1,200,000~~1,050

Revolving Credit Facility A

Parent, IGT, and IGT Global Solutions Corporation

€~~725,000~~625

Revolving Credit Facility B

Parent, ~~and~~IGT Lottery S.p.A. (formerly Lottomatica Holding ~~S.r.l.~~S.r.l), and IGT Lottery Holdings B.V.

Interest on the Revolving Credit Facilities is payable between one and six months in arrears at rates equal to the applicable LIBOR (or the applicable EURIBOR if the borrower elects to borrow in Euros) with respect to Revolving Credit Facility A or the applicable EURIBOR (or the applicable LIBOR if the borrower elects to borrow in U.S. dollars) with respect to Revolving Credit Facility B, plus a margin based on the Parent’s long-term ratings by Moody’s and S&P. At December 31, ~~2018~~2021 and ~~2017, the effective interest rate on~~2020, there were no balances for the Revolving Credit ~~Facilities was 2.66% and 3.48%, respectively.~~Facilities.

The RCF Agreement provides that the following fees, which are recorded in interest expense, net in the consolidated statements of operations, 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%~~0.928% at December 31, ~~2018.~~2021.

•Utilization fees - payable on the aggregate drawn amount of the Revolving Credit Facilities at a rate ~~depending~~ranging from 0.15% to 0.60% dependent on the percentage of the Revolving Credit Facilities utilized. The applicable rate was 0.15% at December 31, ~~2018.~~2021.

The Revolving Credit Facilities are guaranteed by the Parent and certain of its subsidiaries and are secured by ownership interests in certain subsidiaries and of the Parent, ~~in certain of its direct subsidiaries and~~ certain intercompany loans with principal balances in excess of $10 ~~million.~~million and certain accounts receivable.

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, ~~2018 and 2017,~~2021 the aggregate amounts available ~~liquidity~~to be borrowed under the Revolving Credit Facilities ~~was $1.602 billion and $1.974 billion, respectively.~~were $1.7 billion.

The RCF 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, ~~2018,~~2021, the borrowers were in compliance with ~~all~~the covenants.

In May 2020, the Parent entered into an amendment to the RCF Agreement, which modified the RCF Agreement by, among other things:

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•Providing that the obligation to grant security over additional collateral be waived provided that the public debt ratings of the Company are not less than BB- or Ba3;

•Increasing the margin from 2.75% to 3.25% if the public debt ratings of the Company are B+ or B1 (or lower); and

In addition, the amendment to the RCF Agreement provided that the margin applicable to all loans under the RCF Agreement outstanding as of April 11, 2020 was increased to 2.475%.

The TLF Agreement and the RCF Agreement limit the aggregate amount that the Parent can pay with respect to dividends and repurchases of ordinary shares in each year to $300 million if our debt ratings by Moody’s or S&P are lower than Ba1 or BB+, respectively, and $400 million if our debt ratings by Moody’s and S&P are equal to or higher than Ba1 and BB+, respectively.

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, ~~2018,~~2021, there ~~was $34.8~~were $30 million inof short-term borrowings under these facilities with an effective interest rate of ~~3.64%~~1.63%. At December 31, ~~2017,~~2020, there were no borrowings under these facilities.

Additionally, at December 31, 2021, the Company had a $21 million swingline loan associated with the Revolving Credit Facilities with an effective interest rate of 3.25%, which is classified in short-term borrowings.

Letters of Credit

The Parent and certain of its subsidiaries may obtain letters of credit under the Revolving Credit Facilities and under senior unsecured uncommitted demand credit facilities. The letters of credit secure various obligations, including obligations arising under customer contracts and real estate leases. The following table summarizes the letters of credit outstanding at December 31, ~~2018~~2021 and ~~2017~~2020 and the ~~weighted average~~weighted-average annual cost of such letters of credit:


($ in millions)	Letters of Credit Outstanding (1)	Weighted- Average Annual Cost

December 31, 2021	335		1.08	%
December 31, 2020	427		1.06	%

(1) Represents letters of credit outstanding not under the Revolving Credit Facilities.

Interest Expense, Net


	For the year ended December 31,
($ in millions)	2021	2020	2019
Senior Secured Notes	292	344	351
Term Loan Facilities	30	37	36
Revolving Credit Facilities	29	31	28
Other	4	1	8
Interest expense	354	413	423
Interest income	(13)	(15)	(12)
Interest expense, net	341	398	411

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16.Other Liabilities

Other Current Liabilities


		December 31,
($ in millions)	Notes	2021	2020
Employee compensation		171	90
Contract liabilities	4	104	108
Income taxes payable		104	26
Accrued interest payable		100	138
Accrued expenses		75	118
Taxes other than income taxes		72	96
Jackpot liabilities	18	66	71
Current financial liabilities		61	128
Operating lease liabilities	11	39	44
Other		35	26
		828	846

Other Non-Current Liabilities


		December 31,
($ in millions)	Notes	2021	2020
Jackpot liabilities	18	130	148
Contract liabilities	4	47	62
Reserves for uncertain tax positions		47	48
Finance lease liabilities	11	27	31
Other		72	72
		323	360

17.Income Taxes

Letters of Credit Outstanding
($ thousands)
Not under the
Revolving Credit
Facilities

Under the
Revolving Credit
Facilities
Total
Weighted
Average
Annual Cost
December 31, 2018 453,719
—
453,719
0.98 %
December 31, 2017 510,962
—
510,962
1.02 %

~~Interest Expense~~

~~Interest expense is composed of the following:~~

For the year ended
December 31,
($ thousands) 2018 2017 2016
Senior Secured Notes (352,293 ) (389,879 ) (391,790 )
Term Loan Facilities (39,462 ) (23,567 ) (19,100 )
Revolving Credit Facilities (27,805 ) (34,984 ) (42,179 )
Other (12,058 ) (10,469 ) (16,199 )
(431,618 ) (458,899 ) (469,268 )


~~15.~~	~~Income Taxes~~

The components of income (loss) from continuing operations before provision for ~~(benefit from)~~ income taxes, determined by tax jurisdiction, are as follows:


								For the year ended December 31,
	For the year ended December 31,
($ thousands)	2018		2017		2016
($ in millions)							($ in millions)	2021	2020	2019
United Kingdom	195,629		(408,595	)	87,269		United Kingdom	40	(355)	35
United States	(363,507	)	(1,173,601	)	(355,451	)	United States	(20)	(776)	(301)
Italy	535,643		479,851		578,221		Italy	438	229	351
All other	(63,717	)	125,420		13,374
Other							Other	70	55	43
	304,048		(976,925	)	323,413			529	(848)	128

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The provision for ~~(benefit from)~~ income taxes consists of:


	For the year ended December 31,
($ in millions)	2021	2020	2019
Current:
United Kingdom	—	(1)	2
United States	41	10	46
Italy	155	66	104
Other	40	31	49
	236	106	202
Deferred:

United States	76	(62)	(69)
Italy	(22)	(1)	1
Other	(16)	(16)	(3)
	38	(78)	(71)
	274	28	131

For the year ended December 31,
($ thousands) 2018 2017 2016
Current:

United Kingdom 3,579
733
711
United States (12,028 ) 80,140
(16,982 )
Italy 186,402
131,155
192,712
All other 45,942
54,823
36,414
223,895
266,851
212,855
Deferred:

United Kingdom (282 ) 4,366
19,232
United States (20,900 ) (175,539 ) (109,139 )
Italy (3,186 ) 865
(5,837 )
All other (10,126 ) (125,957 ) (57,905 )
(34,494 ) (296,265 ) (153,649 )
189,401
(29,414 ) 59,206

Income taxes paid, net of refunds, were ~~$239.8~~$188 million, ~~$296.4~~$89 million, and ~~$183.3~~$197 million in ~~2018, 2017~~2021, 2020, and ~~2016,~~2019, respectively.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 (the "Tax Act") which has resulted in significant changes to the U.S. corporate income tax system. Changes include, but are not limited to: a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017; the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system; and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings (the "transition tax") as of December 31, 2017. In accordance with the Tax Act, we recorded a $114.2 million income tax benefit in the fourth quarter of 2017, the period in which the legislation was enacted. The total tax benefit included a $60.5 million tax expense related to the transition tax and a $174.7 million tax benefit related to the remeasurement of deferred tax assets and liabilities.

~~Additionally, Securities and Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No. 118,~~ ~~Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~ ("SAB 118") was issued to address the application of GAAP in situations when a Company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and recorded no significant adjustments as of December 31, 2018.

The Parent is a tax resident in the United Kingdom (the ~~"U.K."~~“U.K.”). A reconciliation of the provision for ~~(benefit from)~~ income taxes, ~~with~~from the amount computed by applying ~~the weighted average rate of~~ the U.K. statutory main corporation tax rates enacted in each of the Parent’s calendar year reporting periods to income (loss) from continuing operations before provision for ~~(benefit from)~~ income taxes is as follows:


	For the year ended December 31,
($ in millions)	2021		2020		2019
Income (loss) from continuing operations before provision for income taxes	529		(848)		128
United Kingdom statutory tax rate	19.0	%	19.0	%	19.0	%
Statutory tax expense (benefit)	100		(161)		24

Change in valuation allowances	125		128		1
Italy regional tax (“IRAP”) and state taxes	41		9		23
Non-deductible expenses	25		2		2
Base erosion and anti-abuse (“BEAT”) tax	17		13		31
Foreign tax and statutory rate differential (1)	17		(14)		3
Foreign tax expense, net of U.S. federal benefit	11		10		14
Provision to return	6		—		—
GILTI tax	5		3		5
Non-deductible goodwill impairment	—		56		19
Change in unrecognized tax benefits	—		1		7
Non-taxable gains on investments	—		—		(6)
Italian allowance for corporate equity	(3)		(4)		(2)
Non-taxable foreign exchange gain	(11)		—		(4)
Italian patent box tax benefit	(27)		—		—
Tax law changes	(38)		(20)		—
Other	5		4		15
	274		28		131

Effective tax rate	51.8	%	(3.3)	%	102.1	%

For the year ended December 31,
($ thousands) 2018 2017 2016
Income (loss) before provision for (benefit from) income taxes 304,048
(976,925 ) 323,413
United Kingdom statutory tax rate 19.00 % 19.25 % 20.00 %
Statutory tax expense (benefit) 57,769
(188,058 ) 64,682

Foreign tax and statutory rate differential ⁽¹⁾
48,040
(71,050 ) (17,013 )
IRAP and state taxes 38,820
33,484
36,754
Nondeductible goodwill impairment 22,420
137,445
—
Italian tax settlement 16,664
—
15,256
Foreign tax expense, net of U.S. federal benefit 14,930
14,500
3,457
BEAT tax 13,769
—
—
GILTI tax 11,079
—
—
Change in unrecognized tax benefits 9,166
20,624
(10,914 )
Tax cost of tax dividends 6,613
3,041
4,619
Tax impact of tax law and rate changes excluding the Tax Act 4,337
(2,463 ) (8,422 )
Nondeductible expenses 1,251
1,204
2,659
Foreign withholding and state taxes on unremitted earnings (880 ) 9,290
—
Non-controlling interest (1,132 ) (2,205 ) (3,605 )
U.S. research and development tax credit (2,823 ) (5,052 ) (4,980 )
Provision to return adjustments (2,909 ) (1,334 ) (6,705 )
Italian allowance for corporate equity (4,515 ) (11,761 ) (9,243 )
Tax impact of Tax Act (10,852 ) (114,219 ) —
Nontaxable foreign exchange gain (12,384 ) —
—
Change in valuation allowances (13,723 ) 58,672
3,610
Capital gain taxes on sale of DoubleDown —
94,303
—
Non-taxable gains on investments —
—
(5,880 )
Other (6,239 ) (5,835 ) (5,069 )
189,401
(29,414 ) 59,206

Effective tax rate 62.3 % 3.0 % 18.3 %

(1) Includes the effects of foreign ~~subsidiaries'~~subsidiaries’ earnings taxed at rates other than the U.K. statutory rate

~~In 2018, our effective tax rate was higher than~~

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On March 27, 2020, the ~~U.K. statutory rate of 19.00% primarily due~~U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide certain relief related to the ~~impact~~COVID-19 outbreak. Some of the ~~international~~key tax-related provisions of the ~~Tax~~CARES Act ~~(the base-erosion~~benefiting the Company include temporary five-year net operating loss carryback provisions, modifications to the 30% limitation on the deductibility of business interest, and ~~anti-abuse~~payroll tax ~~or "BEAT"~~deferral.

In the quarter ended September 30, 2020, the U.S. Treasury Department issued final regulations regarding GILTI. The Company has elected the GILTI high tax exception as allowed by the final regulations and ~~GILTI),~~has amended its 2018 and 2019 income tax returns. The benefit of the GILTI high tax exception as well as the NOL carryback provisions provided in the CARES Act resulted in a ~~goodwill impairment with no associated~~ tax benefit ~~increases in uncertain tax positions and the settlement~~ of ~~an Italian tax audit.~~$12 million.

In 2017, our effective tax rate was higher than the U.K. statutory rate of 19.25% primarily due to a goodwill impairment with no associated tax benefit, capital gain taxes incurred on the sale of DoubleDown, a net increase in valuation allowances in the U.K. and other foreign jurisdictions offset by a favorable net tax benefit recorded related to the impact of the Tax Act.

In 2016, our effective tax rate was lower than the U.K. statutory rate of 20.00% primarily due to a reduction in operating losses without tax benefits in certain foreign jurisdictions, decrease in uncertain tax positions as a result of a favorable settlement with the Internal Revenue Service (the "IRS"), tax benefits associated with tax law and tax rate changes during the year, offset by an Italian audit settlement.

The components of deferred tax assets and liabilities are as follows:


						December 31,
	December 31,
($ thousands)	2018		2017
($ in millions)					($ in millions)	2021	2020
Deferred tax assets:					Deferred tax assets:
Net operating losses	226,249		241,702		Net operating losses	286	300
Section 163(j) interest limitation					Section 163(j) interest limitation	190	155
Italian goodwill tax step-up					Italian goodwill tax step-up	119	—
Provisions not currently deductible for tax purposes	112,768		132,365		Provisions not currently deductible for tax purposes	85	88
Section 163(j) interest limitation	75,778		—
Lease liabilities					Lease liabilities	66	70
Jackpot timing differences					Jackpot timing differences	30	39
Depreciation and amortization	49,548		72,101		Depreciation and amortization	29	26
Jackpot timing differences	42,651		51,438
Inventory reserves	10,497		9,913		Inventory reserves	10	2
Stock-based compensation	4,077		2,402
Deferred revenue	3,946		5,317
Other	9,480		4,155		Other	63	47
Gross deferred tax assets	534,994		519,393		Gross deferred tax assets	878	728
Valuation allowance	(170,831	)	(184,554	)	Valuation allowance	(412)	(284)
Deferred tax assets, net of valuation allowance	364,163		334,839		Deferred tax assets, net of valuation allowance	466	444

Deferred tax liabilities:					Deferred tax liabilities:
Acquired intangible assets	589,993		635,471		Acquired intangible assets	462	506
Depreciation and amortization	157,260		138,764		Depreciation and amortization	163	161
Italian goodwill equity reserve liability					Italian goodwill equity reserve liability	105	—
Lease right-of-use assets					Lease right-of-use assets	60	65
Other	24,876		10,518		Other	6	12
Total deferred tax liabilities	772,129		784,753		Total deferred tax liabilities	795	744
Net deferred income tax liability	(407,966	)	(449,914	)	Net deferred income tax liability	(329)	(300)

Our net deferred income taxes are recorded in the consolidated balance sheets as follows:


						December 31,
	December 31,
($ thousands)	2018		2017
($ in millions)					($ in millions)	2021	2020
Deferred income taxes - non-current asset	38,117		41,546		Deferred income taxes - non-current asset	39	33
Deferred income taxes - non-current liability	(446,083	)	(491,460	)	Deferred income taxes - non-current liability	(368)	(333)
	(407,966	)	(449,914	)		(329)	(300)

Net Operating Loss Carryforwards

We have a ~~$1.021~~$1.1 billion gross tax loss carryforward, of which ~~$401.6~~$631 million relates to the U.K., ~~$220.3~~$137 million relates to U.S. Federal, and ~~$398.8~~$339 million relates to other foreign tax jurisdictions. Carryforwards in certain tax jurisdictions begin to expire in ~~2030,~~2031, while others have an unlimited carryforward period. A valuation allowance has been provided on ~~$755.1~~$910 million of the gross net operating loss ~~carryfowards.~~carryforwards. Portions of the tax loss carryforwards are subject to annual limitations in most of our significant tax jurisdictions, including ~~Section 382 of~~ the ~~U.S. Internal Revenue Code of 1986, as amended, for U.S. tax purposes,~~U.K. and ~~similar provisions under other countries' laws.~~U.S. In addition, as of December 31, ~~2018,~~2021, we had U.S. state tax net operating loss carryforwards, resulting in a deferred tax asset (net of U.S. federal tax benefit) of approximately ~~$13.9~~$13 million. U.S. state tax net operating loss ~~carryfowards~~carryforwards generally expire in the years ~~2019~~2027 through ~~2038.~~2040.

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Valuation Allowance

A reconciliation of the valuation allowance is as follows:


	December 31,
($ in millions)	2021	2020	2019
Balance at beginning of year	284	156	171
Net charges to expense	86	120	1
Tax rate change	39	8	—
Provision to return adjustment	3	—	—
Expiration of tax attributes	—	—	(15)
Balance at end of year	412	284	156

December 31,
($ thousands) 2018 2017 2016
Balance at beginning of year 184,554
151,653
139,663
Expiration of tax attributes —
(25,771 ) —
Net charges to (income) expense (13,723 ) 58,672
11,990
Balance at end of year 170,831
184,554
151,653

The valuation allowance primarily relates to U.K. and foreign net operating losses and the section 163(j) business interest expense limitation carryforward that are not more likely than not expected to be realized. In assessing the need for a valuation allowance, we 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 we change our 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 ~~(benefit from)~~ income taxes in the period in which such determination is made.

In December 2017, we recorded a valuation allowance on the U.K. net operating losses. The net operating losses were primarily due to significant foreign exchange losses relating to euro denominated debt that is recorded on a U.S. dollar functional currency U.K. company.

~~For the years ended December 31, 2018 and December 31, 2017, we recorded a net valuation (decrease) increase of $(13.7) million and $32.9 million, respectively.~~

~~Unremitted Earnings~~

Prior to the Tax Act, we considered the earnings in our foreign subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. The Tax Act eliminated the deferral of U.S. income tax on these foreign earnings by imposing the transition tax. As a result, we now intend to repatriate substantially all of our accumulated foreign earnings (not including the earnings of our Italian sub-group of entities). We continue to have significant cash needs outside the United States and, accordingly, the extent and timing of repatriation of these earnings continues to be monitored. The Tax Act, however, has given us more flexibility to manage and deploy cash globally. As of December 31, 2018, we have recorded an $8.4 million deferred tax liability associated with foreign withholding and other taxes resulting from our intention to repatriate foreign earnings.

We continue to indefinitely reinvest the earnings of our subsidiary investments held by our Italian parent sub-holding company and, therefore, no deferred income taxes have been provided on these earnings. If we were to change our position with respect to the indefinite reinvestment of earnings on our Italian parent sub-holding company, the estimated deferred tax effects would be $10.5 million as of December 31, 2018.

Accounting for Uncertainty in Income Taxes

A reconciliation of the unrecognized tax benefits is as follows:


								December 31,
	December 31,
($ thousands)	2018		2017		2016
($ in millions)							($ in millions)	2021	2020	2019
Balance at beginning of year	20,975		14,340		37,370		Balance at beginning of year	27	29	27
Additions to tax positions - current year	11,947		479		423		Additions to tax positions - current year	1	—	1
Additions to tax positions - prior years	16,973		7,503		1,718		Additions to tax positions - prior years	—	—	2
Reductions to tax positions - current year	—		(893	)	(652	)
Reductions to tax positions - prior years	(4,610	)	(41	)	(12,755	)	Reductions to tax positions - prior years	(1)	(2)	—
Settlements	(17,238	)	—		(8,750	)

Lapses in statutes of limitations	(1,412	)	(413	)	(3,014	)	Lapses in statutes of limitations	—	(1)	(1)
Balance at end of year	26,635		20,975		14,340		Balance at end of year	27	27	29



o☐			REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			OR
OR
☐
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

o☐		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Large accelerated filer	x	Accelerated filer	~~Accelerated filer~~o
Non-accelerated filero	o	Emerging growth company	o



Abbreviation/Term			Definition
~~2019 Opinion~~ASC			~~the opinion published on January 14, 2019 by the DOJ regarding enforcement of the Wire Act~~
~~ADM~~	~~Agenzia delle Dogane e Dei Monopoli~~
~~AGM~~	~~the annual general meeting of the Parent's shareholders~~
~~ASC~~	Accounting Standards Codification
~~AWPs~~ASU			~~amusement with prize machines~~Accounting Standards Update
~~Articles~~B2B			~~the Articles of Association of the Parent adopted on May 17, 2018~~business-to-business
~~B2B~~B2C			~~business-to-business~~business-to-consumer
~~B2C~~BEAT			~~business-to-consumer~~base-erosion and anti-abuse tax
~~B&D Holding~~Brexit			~~B&D Holding di Marco Drago e C. S.a.p.a.~~the United Kingdom’s withdrawal from the European Union
~~Board~~CEO			~~the board of directors of the Parent~~
~~Brexit~~	~~the vote by the U.K. to leave the E.U. and the terms of such departure~~
~~CA 2006~~	~~Companies Act 2006, as amended~~
~~CEO~~	Chief Executive Officer
CFO			Chief Financial Officer
~~Code~~Company			~~Internal Revenue Code of 1986, as amended~~
~~Company~~	the Parent together with its consolidated subsidiaries
~~COSO~~		~~Committee of Sponsoring Organizations of the Treadway Commission~~
~~Credit Suisse~~	~~Credit Suisse International~~
~~CTA~~	~~Italian Consolidated Tax Act~~
De Agostini		De Agostini S.p.A.
~~DOJ~~EBITDA			~~U.S. Department of Justice~~
~~DoubleDown~~	~~Double Down Interactive LLC~~
~~DTC~~	~~The Depository Trust Company~~
~~DTR~~	~~Disclosure and Transparency Rules~~
~~EBITDA~~	earnings before interest, taxes, depreciation and amortization
E.U.			European Union
~~Election Form~~GAAP			~~a form submitted by a holder of Ordinary Shares who wishes to exercise the votes of the related Special Voting Shares pursuant to the terms of the Loyalty Plan~~
~~Eligible Person~~	~~a person who has maintained ownership of Ordinary Shares in accordance with Articles and the Loyalty Plan for a continuous period of three years or more~~
~~Exchange Act~~	~~Securities Exchange Act of 1934, as amended~~
~~FASB~~	~~Financial Accounting Standards Board~~
~~FMCs~~	~~facilities management contracts~~
~~GAAP~~	United States Generally Accepted Accounting Principles
GDPR			E.U. General Data Protection Regulation
~~GTECH~~GILTI			~~GTECH S.p.A.~~global intangible low-taxed income
~~Gratta e Vinci~~iGaming			~~the Italian instant ticket lottery game~~
~~HMRC~~	~~Her Majesty’s Revenue & Customs of the United Kingdom~~
~~IAS~~	~~international accounting standards~~
~~IFRS~~	~~International Financial Reporting Standards~~
~~iGaming~~	digital (interactive) gaming
~~IGT~~		~~International Game Technology, a Nevada corporation, prior to April 7, 2015~~
IGT PLC		the Parent together with its consolidated subsidiaries
IP		~~intellectual property~~
~~late number~~	~~one of the 90 numbers of the Lotto game in Italy that has not been drawn for 100 drawings~~
~~LMAs~~	~~Lottery Management Agreements~~


Loyalty Plan
~~Abbreviation/Term~~	~~Definition~~
LN	~~Lotterie Nazionali S.r.l.~~
~~Lotto License~~	~~the Company's license for the operation of the Italian Gioco del Lotto game~~
~~Lottoitalia~~	~~Lottoitalia s.r.l., a joint venture company among Lottomatica, Italian Gaming Holding a.s., Arianna 2001 and Novomatic Italia~~
~~Lottomatica~~	~~Lottomatica Holding S.r.l.~~
~~Loyalty Plan~~	the terms and conditions related to the Special Voting Shares
Loyalty Register			the register of ordinary shares for which holders thereof have validly elected to exercise the related Special Voting Shares
~~LTI~~NYSE			~~long-term incentive compensation~~
~~LTIP~~	~~long-term incentive compensation plan~~
~~Moody’s~~	~~Moody’s Investor Service~~
~~MBOs~~	~~management by objectives~~
~~NAGI~~	~~North America Gaming and Interactive~~
~~NALO~~	~~North America Lottery~~
~~NYSE~~	New York Stock Exchange
OIParent			~~corporate operating income~~
~~Parent~~	International Game Technology PLC
~~PFICs~~R&D			~~Passive Foreign Investment Companies~~
~~PwC US~~	~~PricewaterhouseCoopers LLP~~
~~R&D~~	research and development
~~RSUs~~SEC			~~restricted share units~~
~~S&P~~	~~Standard & Poor’s Ratings Services~~
~~SAB~~	~~SEC Staff Accounting Bulletin~~
~~SAB 118~~	~~SAB No. 118,~~ ~~Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~
~~same store revenue~~	~~revenue from existing customers as opposed to new customers~~
~~SEC~~	United States Securities and Exchange Commission
~~SOG~~		~~stock ownership guidelines~~
Special Voting Shares		the special voting shares in the Parent, worth U.S.$~~000001~~0.000001 each and carrying 0.9995 votes
~~STI~~		~~short-term incentive compensation~~
~~10eLotto~~	~~a game of chance in Italy~~
Tax Act		the Tax Cuts and Jobs Act of 2017
~~TPE~~U.K.			~~third-party evidence~~United Kingdom
~~TSR~~U.S.			~~total shareholder return~~
~~U.K.~~	~~United Kingdom~~
~~U.S.~~	United States of America
~~UIGEA~~		~~U.S.Unlawful Internet Gambling Enforcement Act of 2006~~
~~Variable Forward Transaction~~	~~the variable forward transaction entered into between De Agostini and Credit Suisse on May 22, 2018~~
~~VLTs~~	~~video lottery terminals~~
~~VSOE~~	~~vendor specific objective evidence~~
~~WAP~~	~~wide area progressive~~
Wire Act		U.S. Interstate Wire Act of 1961
~~WLA~~	~~World Lottery Association~~



203,688,118	~~204,210,731~~	ordinary shares, nominal value $0.10 per ~~share.~~share



				Page

Presentation of Financial and Certain Other Information				3

Glossary of Certain Terms and Abbreviations				4

Forward-Looking Statements				65

PART I				76

Item 1.			Identity of Directors, Senior Management and ~~Advisers~~Advisors	76
Item 2.			Offer Statistics and Expected Timetable	76
Item 3.			Key Information	76
Item 4.			Information on the Company	1918
Item 4A.			Unresolved Staff Comments	32
Item 5.			Operating and Financial Review and Prospects	3233
Item 6.			Directors, Senior Management and Employees	6259
Item 7.			Major Shareholders and Related Party Transactions	81
Item 8.			Financial Information	82
Item 9.			The Offer and Listing	8283
Item 10.			Additional Information	83
Item 11.			Quantitative and Qualitative Disclosures About Market Risk	~~100~~96
Item 12.			Description of Securities Other than Equity Securities	~~102~~98

PART II				~~103~~98

Item 13.			Defaults, Dividend Arrearages and Delinquencies	~~103~~98
Item 14.			Material Modifications to the Rights of Security Holders and Use of Proceeds	~~103~~98
Item 15.			Controls and Procedures	~~103~~98
Item 16A.			Audit Committee Financial Expert	~~104~~99
Item 16B.			Code of Ethics	~~104~~99
Item 16C.			Principal Accountant Fees and Services	~~104~~99
Item 16D.			Exemptions from the Listing Standards for Audit Committees	~~104~~100
Item 16E.			Purchases of Equity Securities by the Issuer and Affiliated Purchasers	~~105~~100
Item 16F.			Change in Registrant’s Certifying Accountant	~~105~~100
Item 16G.			Corporate Governance	~~105~~100
Item 16H.			Mine Safety Disclosure	~~105~~100

~~PART III~~		~~105~~

~~Item 17.~~	~~Financial Statements~~	~~105~~
Item ~~18.~~16 I .			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	101

PART III				101

Item 17.			Financial Statements	~~105~~101
Item 18.			Financial Statements	101
Item 19.			Exhibits	~~105~~101

			Signature	106


~~Item 1.~~ Item 1.Identity of Directors, Senior Management and Advisors	~~Identity of Directors, Senior Management and Advisers~~


~~Item 2.~~ Item 2.Offer Statistics and Expected Timetable	~~Offer Statistics and Expected Timetable~~



	For the years ended December 31,
($ thousands, except per share and dividend amounts)	2018		2017		2016	2015 ⁽²⁾		2014 ⁽²⁾
Total revenue ⁽¹⁾	4,831,256		4,938,959		5,153,896	4,689,056		3,812,311
Operating income (loss)	646,991		(51,092	)	660,436	539,956		715,051
Income (loss) before provision for income taxes	304,048		(976,925	)	323,413	(17,031	)	340,217
Net income (loss)	114,647		(947,511	)	264,207	(55,927	)	99,804
Attributable to:
IGT PLC	(21,350	)	(1,068,576	)	211,337	(75,574	)	86,162
Non-controlling interests	115,671		55,400		45,413	19,647		13,642
Redeemable non-controlling interests	20,326		65,665		7,457	—		—
Net (loss) income attributable to IGT PLC per common share - basic	(0.10	)	(5.26	)	1.05	(0.39	)	0.50
Net (loss) income attributable to IGT PLC per common share - diluted	(0.10	)	(5.26	)	1.05	(0.39	)	0.49
Dividends declared per common share ($) ⁽³⁾	0.80		0.80		0.80	0.40		1.97



	December 31,
($ thousands, except share amounts)	2018	2017	2016	2015	2014 ⁽¹⁾
Cash and cash equivalents	250,669	1,057,418	294,094	627,484	307,422
Total assets ⁽²⁾	13,648,502	15,159,208	15,060,162	15,163,295	8,458,297
Debt⁽³⁾	8,012,089	8,376,559	7,863,162	8,334,173	2,959,471
Redeemable non-controlling interests	—	356,917	223,141	—	—
Total equity	2,751,929	2,354,931	3,425,665	3,366,142	2,947,720
Attributable to IGT PLC	1,807,899	2,004,995	3,068,699	3,017,648	2,569,837
Attributable to non-controlling interests	944,030	349,936	356,966	348,494	377,883
Common stock	20,421	20,344	20,228	20,024	217,171
Common shares issued	204,210,731	203,446,572	202,285,166	200,244,239	174,976,029


C. C.Reasons for the Offer and Use of Proceeds	~~Reasons for the Offer and Use of Proceeds~~


~~Item 4.~~ Item 4.Information on the Company A.History and Development of the Company	~~Information on the Company~~



Declaration Date	Payment Date	Per Share Amount ($)	Aggregate Payment
Declaration Date	Payment Date	Per Share Amount ($)	Aggregate Payment
October 31, 2018	November 28, 2018	0.20	$40,842,146.20
July 31, 2018	August 28, 2018	0.20	$40,840,804.00
May 21, 2018	June 19, 2018	0.20	$40,840,202.00
March 8, 2018	April 5, 2018	0.20	$40,713,190.60
			$163,236,342.80


•	~~Wide Area Progressives - games that are linked across several casinos and/or jurisdictions and share a large common jackpot, including The Wheel of Fortune~~^®~~franchise.~~


~~Item 3.~~	~~Key Information~~


A.	~~Selected Financial Data~~


D. D.Risk Factors	~~Risk Factors~~


~~(ii)~~	~~“software only” technical solutions to create a complete one-stop solution or to integrate new functionality to existing operations;~~


•	~~Multi-Level Progressives - games that are linked to a number of other games within the casino itself and offer players the opportunity to win different levels of jackpots, such as Fort Knox~~^® ~~Video Slots.~~


~~(i)~~	~~core engine and associated support modules, as well as trading and risk management tools, provided to customers as a fully managed service, or~~


						For the year ended December 31,
	Year Ended December 31,
($ thousands)	2018	2017	2016
($ in millions)					($ in millions)	2021	2020	2019
Service revenue	624,476	780,633	975,206		Service revenue	2,690	2,043	2,183
Product sales	378,693	377,065	398,248		Product sales	123	121	110
NAGI	1,003,169	1,157,698	1,373,454
Global Lottery					Global Lottery	2,812	2,164	2,293

Service revenue	1,111,069	1,093,048	1,128,306		Service revenue	630	483	842
Product sales	80,833	92,174	65,269		Product sales	482	354	806
NALO	1,191,902	1,185,222	1,193,575
Global Gaming					Global Gaming	1,112	837	1,648

Service revenue	495,497	557,049	512,668		Service revenue	163	114	76
Product sales	324,486	332,015	314,637		Product sales	1	1	15
International	819,983	889,064	827,305

Service revenue	1,814,549	1,703,901	1,759,843
Product sales	930	1,149	1,295
Italy	1,815,479	1,705,050	1,761,138

Other	723	1,925	(1,576	)
Digital & Betting					Digital & Betting	165	115	91

Total revenue	4,831,256	4,938,959	5,153,896		Total revenue	4,089	3,115	4,032


Location	Square Feet	Use and Productive Capacity	Extent of Utilization		Holding Status
9295 Prototype Drive, Reno, NV(1)	1,251,179	Office; Warehouse; Game Studios; Hardware/Software Engineering; Global Production Center; Electronic Gaming Machine and Instant Ticket Vending Machine Production	93	%	Leased
6355 S. Buffalo Drive, Las Vegas, NV(2)	222,268	U.S. Principal Operating Facility; Game Studio; Systems Software; Showroom	100	%	Leased
55 Technology Way, West Greenwich, RI	170,000	WG Technology Center: Office; Research and Testing; Storage and Distribution	100	%	Leased
4000 South Frontage Road, Suite 101 Lakeland, FL	174,720	Printing Plant: Printing facility; Storage and Distribution; Office	100	%	Leased
10 Memorial Boulevard, Providence, RI	124,769	U.S. Principal Operating Facility	100	%	Leased
300 California Street, Floor 8, San Francisco, CA(3)	15,457	PlayDigital HQ: Office	100	%	Leased
8520 Tuscany Way, Bldg. 6, Suite 100, Austin, TX	81,933	Texas Warehouse and National Response Center: Contact Center; Storage and Distribution; Office	95	%	Leased
8200 Cameron Road, Suite E120, Austin, TX	41,705	Data Center of the Americas: Data Center; Network Operations; Office	80	%	Leased
5300 Riata Park Court, Bldg. E, Suite 100, Austin, TX	26,759	Austin Tech Campus: Research and Test; Office	59	%	Leased
47 Technology Way, West Greenwich, RI	13,050	Enterprise Data Center: Data Center; Network Operations	100	%	Owned


Item 5.Operating and Financial Review and Prospects ~~Item 5.~~	~~Operating and Financial Review and Prospects~~


	For the year ended
	December 31, 2021		December 31, 2020		Change
($ in millions)	$	% of Revenue	$	% of Revenue	$	%
Service revenue by segment
Global Lottery	2,690	66	2,043	66	647	32
Global Gaming	630	15	483	16	147	30
Digital & Betting	163	4	114	4	50	44
Total service revenue	3,483	85	2,640	85	844	32

Product sales by segment
Global Lottery	123	3	121	4	1	1
Global Gaming	482	12	354	11	128	36
Digital & Betting	1	—	1	—	1	55
Total product sales	606	15	476	15	130	27

Total revenue	4,089	100	3,115	100	974	31

Operating expenses
Cost of services	1,754	43	1,634	52	120	7
Cost of product sales	377	9	346	11	31	9
Selling, general and administrative	810	20	707	23	103	15
Research and development	238	6	191	6	48	25
Restructuring	6	—	45	1	(39)	(87)
Goodwill impairment	—	—	296	10	(296)	(100)
Other operating expense, net	1	—	4	—	(3)	(66)
Total operating expenses	3,187	78	3,223	103	(36)	(1)

Operating income (loss)	902	22	(107)	(3)	1,009	> 200.0

Interest expense, net	341	8	398	13	(57)	(14)
Foreign exchange (gain) loss, net	(66)	(2)	309	10	(375)	(121)
Other expense, net	98	2	33	1	64	193
Total non-operating expenses	373	9	740	24	(367)	(50)

Income (loss) from continuing operations before provision for income taxes	529	13	(848)	(27)	1,376	162
Provision for income taxes	274	7	28	1	246	> 200.0
Income (loss) from continuing operations	255	6	(875)	(28)	1,130	129
Income from discontinued operations, net of tax	24	1	37	1	(13)	(34)
Gain on sale of discontinued operations, net of tax	391	10	—	—	391	—
Income from discontinued operations	415	10	37	1	378	> 200.0

Net income (loss)	670	16	(839)	(27)	1,508	180

Less: Net income attributable to non-controlling interests from continuing operations	190	5	64	2	126	197

Less: Net loss attributable to non-controlling interests from discontinued operations	(2)	—	(5)	—	3	57
Net income (loss) attributable to IGT PLC	482	12	(898)	(29)	1,379	154



	For the year ended
	December 31, 2018				December 31, 2017				December 31, 2016
($ thousands)	$		% of Revenue		$		% of Revenue		$		% of Revenue
Service revenue	4,046,314		83.8		4,136,556		83.8		4,375,586		84.9
Product sales	784,942		16.2		802,403		16.2		778,310		15.1
Total revenue	4,831,256		100.0		4,938,959		100.0		5,153,896		100.0

Cost of services	2,450,658		50.7		2,553,083		51.7		2,553,479		49.5
Cost of product sales	491,030		10.2		579,431		11.7		582,358		11.3
Selling, general and administrative	844,059		17.5		816,093		16.5		945,824		18.4
Research and development	263,279		5.4		313,088		6.3		343,531		6.7
Restructuring expense	14,781		0.3		39,876		0.8		27,934		0.5
Impairment loss	120,407		2.5		715,220		14.5		37,744		0.7
Transaction expense (income), net	51		—		(26,740	)	(0.5	)	2,590		0.1
Total operating expenses	4,184,265		86.6		4,990,051		101.0		4,493,460		87.2

Operating income (loss)	646,991		13.4		(51,092	)	(1.0	)	660,436		12.8

Interest income	14,231		0.3		10,436		0.2		12,840		0.2
Interest expense	(431,618	)	(8.9	)	(458,899	)	(9.3	)	(469,268	)	(9.1	)
Foreign exchange gain (loss), net	129,051		2.7		(443,977	)	(9.0	)	101,040		2.0
Other (expense) income, net	(54,607	)	(1.1	)	(33,393	)	(0.7	)	18,365		0.4
Total non-operating expenses	(342,943	)	(7.1	)	(925,833	)	(18.7	)	(337,023	)	(6.5	)

Income (loss) before provision for (benefit from) income taxes	304,048		6.3		(976,925	)	(19.8	)	323,413		6.3

Provision for (benefit from) income taxes	189,401		3.9		(29,414	)	(0.6	)	59,206		1.1

Net income (loss)	114,647		2.4		(947,511	)	(19.2	)	264,207		5.1

Less: Net income attributable to non-controlling interests	115,671		2.4		55,400		1.1		45,413		0.9
Less: Net income attributable to redeemable non-controlling interests	20,326		0.4		65,665		1.3		7,457		0.1
Net (loss) income attributable to IGT PLC	(21,350	)	(0.4	)	(1,068,576	)	(21.6	)	211,337		4.1



	For the year ended December 31,				$ Change
($ thousands)	2018	2017	2016		2018 vs. 2017				2017 vs. 2016
					$		%		$		%
North America Gaming and Interactive	624,476	780,633	975,206		(156,157	)	(20.0	)	(194,573	)	(20.0	)
North America Lottery	1,111,069	1,093,048	1,128,306		18,021		1.6		(35,258	)	(3.1	)
International	495,497	557,049	512,668		(61,552	)	(11.0	)	44,381		8.7
Italy	1,814,549	1,703,901	1,759,843		110,648		6.5		(55,942	)	(3.2	)
Operating Segments	4,045,591	4,134,631	4,376,023		(89,040	)	(2.2	)	(241,392	)	(5.5	)
Corporate support	—	1,203	—		(1,203	)	(100.0	)	1,203		-
Purchase accounting	723	722	(437	)	1		0.1		1,159		> 200.0
	4,046,314	4,136,556	4,375,586		(90,242	)	(2.2	)	(239,030	)	(5.5	)



	Constant Currency Change
	2018 vs. 2017				2017 vs. 2016
($ thousands)	$		%		$		%
North America Gaming and Interactive	(155,998	)	(20.0	)	(194,458	)	(19.9	)
North America Lottery	18,314		1.7		(35,865	)	(3.2	)
International	(60,249	)	(10.8	)	47,386		9.2
Italy	46,111		2.7		(108,838	)	(6.2	)
Operating Segments	(151,822	)	(3.7	)	(291,775	)	(6.7	)
Corporate support	—		—		1,203		—
Purchase accounting	—		—		1,159		>200.0
	(151,822	)	(3.7	)	(289,413	)	(6.6	)



	Service Revenue Change
	2018 vs. 2017				2017 vs. 2016
($ thousands)	Constant Currency		$ Change		Constant Currency		$ Change
Social gaming	(111,267	)	(111,267	)	(167,016	)	(167,581	)
Machine gaming	(67,577	)	(67,742	)	(37,321	)	(36,897	)
Other services	22,846		22,852		9,879		9,905
	(155,998	)	(156,157	)	(194,458	)	(194,573	)


◦	~~An increase of $11.7 million in poker revenue,~~offering primarily ~~due to a large, multi-year poker contract; and~~


◦	~~An increase of $10.1 million in interactive, principally due to a content licensing and support agreement entered into in June 2017.~~


◦	A decrease of $19.1 million in software revenue, primarily related to Europe, partially due to a $9.7 million decrease as a result of licenses being identified as distinct performance obligations and recognized in product sales in the current year in connection with ASC 606;


◦	A decrease of $14.8 million in Interactive Business-to-Business and Business-to-Consumer activities, primarily due to the release of a prior year jackpot liability and the exit from certain low-margin contracts:


◦	~~A decrease of $12.9 million in megajackpot revenue, primarily related to the $8.4 million reclassification of jackpot expense from cost of services upon adoption of ASC 606; and~~


◦	~~A decrease of $10.7 million from a customer in Europe, principally related to the achievement of certain contractual milestones that did not recur in the current year.~~


◦	~~An increase of $13.0 million from VLT software service revenue from a customer in Europe, principally related to the achievement of certain contractual milestones;~~


◦	An increase of $6.3 million in Interactive Business-to-Business and Business-to-Consumer activities, primarily related to the release of a jackpot liability during the year ended December 31, 2017, partially offset by the exit from certain low margin contracts; and


◦	~~An increase of $4.3 million from the launch of the Greece VLT program.~~



	For the year ended December 31,			€ Change
(€ millions)	2018	2017	2016	2018 vs. 2017				2017 vs. 2016
				€		%		€		%
10eLotto wagers	5,728	5,160	4,716	568		11.0		444		9.4
Core wagers	1,877	2,011	2,227	(134	)	(6.7	)	(216	)	(9.7	)
Wagers for late numbers	227	310	1,150	(83	)	(26.8	)	(840	)	(73.0	)
Million day	185	—	—	185		—		—		—
	8,017	7,481	8,093	536		7.2		(612	)	(7.6	)