The information contained in this Current Report is being furnished under Item 2.02. As such, the information contained herein shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On March 1, 2007, Scientific Games Corporation (the Company) issued a press release announcing, among other things, results for the three months and the year ended December 31, 2006. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The Companys press release, in addition to containing results that are determined in accordance with accounting principles generally accepted in the United States of America (GAAP), also contains the Companys EBITDA results, which are non-GAAP earnings results that exclude certain items. EBITDA, as used in the press release, represents net income plus income tax expense, interest expense and depreciation and amortization expenses, net of other income. EBITDA is included in the press release as, among other things, it is a basis upon which the Company assesses its financial performance, and it provides useful information regarding the Companys ability to service its debt. In addition, EBITDA is useful to investors in evaluating the Companys financial performance because it is a commonly used financial analysis tool for measuring and comparing gaming companies in several areas of liquidity, operating performance and leverage. EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP as measures of the Companys profitability or liquidity. EBITDA as used in the press release may differ from similarly titled measures presented by other companies. A table reconciling EBITDA to GAAP net income is included in the condensed consolidated financial statement data included in the Companys press release. Also included in the Companys press release is certain net income information presented on a non-GAAP adjusted basis to indicate the effect of certain items noted in the press release.
Adjusted EBITDA, non-GAAP adjusted net income and diluted non-GAAP adjusted net income per share are non-GAAP financial measures that are presented as supplemental disclosures and are reconciled to GAAP net income and GAAP net income per diluted share in financial schedules accompanying the Companys press release. In calculating the adjusted financial measures, the Company excludes certain items in order to better facilitate an understanding of the Companys operating performance.
The Companys management uses these adjusted financial measures in conjunction with GAAP financial measures to monitor and evaluate the performance of the Companys business operations; facilitate managements internal comparisons of the Companys historical operating performance of its business operations; facilitate managements external comparisons of the results of its overall business to the historical operating performance of other companies that may
have different
capital structures and debt levels; review and assess the operating performance
of the Companys management team and as a measure in evaluating employee
compensation and bonuses; analyze and evaluate financial and strategic planning
decisions regarding future operating investments; and plan for and prepare future
annual operating budgets and determine appropriate levels of operating
investments. The
Companys management believes that these adjusted financial measures are useful
to investors to provide them with disclosures of the Companys operating
results on the same basis as that used by the Companys management. The Companys
management also believes that because it has historically provided such
adjusted non-GAAP financial measures in its earnings releases, continuing to do
so provides consistency in its financial reporting and continuity to investors
for comparability purposes. Accordingly, the Companys management believes that
the presentation of the adjusted non-GAAP financial measures, when used in
conjunction with GAAP financial measures, provides both management and
investors with useful financial information that can be used in assessing the
Companys financial condition and operating performance. The
adjusted financial measures should not be considered in isolation or as a
substitute for net income or net income per diluted share prepared in
accordance with GAAP. The adjusted financial measures as used in the press
release may differ from similarly titled measures presented by other companies.
The adjusted financial measures, as well as other information in the press
release, should be read in conjunction with the Companys financial statements
filed with the Securities and Exchange Commission. Section 9
- Financial Statements and Exhibits Item 9.01. Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 99.1 Press Release of Scientific Games Corporation, dated
March 1, 2007. SIGNATURES Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized. SCIENTIFIC GAMES CORPORATION By: /s/ DeWayne E. Laird Name: DeWayne E. Laird Title: Vice President and Chief Financial Officer Date: March 1, 2007 Exhibit Index Exhibit No. Description 99.1 Press Release of Scientific Games Corporation, dated
March 1, 2007.


