CONTENTS CEO STATEMENT 4 1. STRATEGIC REPORT 6 BUSINESS OVERVIEW 8 KEY PERFORMANCE INDICATORS 21 FUTURE STRATEGY 29 PRINCIPAL RISKS AND UNCERTAINTIES 30 2. REMUNERATION REPORT 36 ANNUAL STATEMENT BY THE COMPENSATION COMMITTEE CHAIRMAN 36 REMUNERATION IMPLEMENTATION REPORT 39 REMUNERATION POLICY 51 3. DIRECTORS' REPORT 63 4. INDEPENDENT AUDITORS' REPORT 71 5. FINANCIAL STATEMENTS 76 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 76 INDEX TO PARENT FINANCIAL STATEMENTS 140 Annual Report and Accounts 2019 Page | 3 other potential opportunities as Brazil further opens machine taxes that went into effect. Total operating Diversity & Inclusion CEO STATEMENT regulated gaming. Additionally, we signed a new income, excluding the impact of foreign currency facilities management contract in Slovakia and translation, in Italy was higher than the prior year. In 2019, IGT’s Office of Diversity and Inclusion extended our private management agreement with the continued to broaden its efforts by establishing four Barbados Lottery license holders. IGT also won the We expect to continue leveraging popular game themes regional advisory councils, tasked with implementing International Gaming Awards’ Lottery Product of the with proven game mechanics, including multi-link action plans reflecting the culture and business Year for our GameTouch™ 20 self-service vending progressives. dynamics of each region. These councils are in Italy; machine that was made specifically for big-box retailers. Latin America and Caribbean; Europe, Middle East, and Sports Betting Expansion in Africa; and Asia Pacific. New Diversity and Inclusion In Italy, we launched Simbolotto, which in combination Groups (DIGs) were also launched, bringing the with the continued success of 10eLotto, contributed to U.S. number of DIGs to five, with a total of 10 chapters. More increased wagers. than 750 employees now belong to one or more of the Our North America sports betting operations had a very DIGs that support women, military veterans, people with IGT is leading the lottery industry through new retailer good 2019. In the first full year of legalized sports betting disabilities, people over 50 years old, and the LGBTQ experiences, player convenience, and gameplay in the U.S., we established ourselves as one of the community. mechanics that attract new players, and we anticipate leading B2B sports betting platform providers for land- these trends to continue. based and online operators. IGT was also recognized within the gaming industry for our leadership in diversity and inclusion, having won the Record Growth in Global IGT’s PlaySports sports betting platform went live with Pride of Gaming award from CasinoBeats and the customers in six new states, bringing our presence to Diverse and Inclusive Team of the Year at the 2019 Gaming 11 jurisdictions. We are currently powering retail sports Women in Gaming Diversity Awards. betting in over two dozen land-based gaming venues Dear Stakeholder, Our global gaming business saw record level growth of across the U.S., as well as seven jurisdictions through more than 20% in gaming product sales. The growth online and mobile sports betting. In addition, the Looking Ahead I am pleased to report that we had a strong finish to was driven by a 29% increase in global unit shipments, CrystalBetting Terminal made its debut in Mississippi, Our 2019 results confirm the vitality of IGT’s business 2019 achieving $1.7 billion in adjusted EBITDA at the including a 35% increase in replacement unit allowing for players to have a VIP sports betting and demonstrate the advantage of having a diverse mix high end of our outlook and generating strong operating shipments. experience and place pre-match and in-game wagers. of business across products and geographies. 2020 has cash flow of $1.2 billion. These results were led by our seen a major shift in our attention as the coronavirus North America Gaming and Italy segments. Additionally, In North America, we achieved the highest average We continue to build upon the strategic sports betting (COVID-19) emerged as a global pandemic in the first global lottery same-store revenues and wagers also selling price in 12 years, based on the quality of our partnerships we have made thus far and look forward quarter. The evolution of the pandemic and correlated grew. We sustained our leadership in the global gaming games and the broad acceptance of our Crystal series to adding new relationships as more states regulate governmental restrictions to contain the virus have had industry by delivering gaming experiences that engage cabinets. Game titles including Fortune Coin™, Griffin’s sports betting. a significant impact on the business trend since mid- players and drive growth for customers. Throne™, and Scarab™ fueled replacement unit shipments by 13% for its third consecutive year of March. We responded quickly with a focus on the safety growth. Our Commitment to Corporate and well-being of our people, our customers and Lottery Expansion and Social Responsibility communities all over the world. We implemented robust Our North America systems business also had a strong business continuity plans and took swift actions on our Innovation cost structure and other measures to preserve liquidity year with eight IGT Advantage® installations, including Our corporate social responsibility goal is to create in the current environment. These actions, in addition the highest-profile casino opening in 2019. We also value for all stakeholders. We are focused on supporting Channel expansion and innovation were integral factors to the resilient nature of many aspects of our business replaced an incumbent provider in six of the other seven the global gaming industry, our community, and the for driving same-store revenue growth for our Lottery and innovative solutions we have in our portfolio today Advantage deployments. world. In 2019, we strengthened our commitment to operations in 2019. Outside of Italy, same-store put us in a good position to emerge from the pandemic responsible gaming by successfully achieving revenue for instants and draw-games grew by 4.5%, as a stronger, leaner and more competitive Internationally, replacement unit shipments rose 63% responsible gaming accreditation for our PlayDigital marking the sixth consecutive year of at least mid-single organization. I want to thank our people for the largely due to Sweden video lottery terminals and operations from the Global Gambling Guidance Group digit growth. remarkable job they are doing in responding to the replacement sales to commercial gaming customers. (G4) for our PlayDigital operations. This accreditation pandemic and our customers for their continued Games such as Guardian of the Rose™ and made IGT the first gaming supplier to be certified by G4 In North America, we successfully launched a new state partnership as we work together during this difficult time. Dragonsphere™ on the Crystal series cabinets drove for both digital and gaming segments. Additionally, we lottery in Mississippi less than 90 days after winning I wish you all continued health and well-being. both the instant ticket and online lottery services much of this growth. received an improved ESG rating of AA from MSCI Inc, contracts. We also signed key facilities management affirming IGT as a leader among 19 listed casino and and product sale contracts in Oregon, as well as Our new Cobalt™ 27 cabinet was introduced in the third gaming companies. contract extensions in states such as Kentucky, quarter and made good progress in Latin America and Minnesota, Colorado, and Kansas. Eastern Europe. The cabinet represents the next We strive to enrich and strengthen the communities in evolution of IGT’s hardware solutions, appealing to which we operate. We launched our first-ever Global In our International segment, we were awarded the customers who want to increase performance and Book Drive where employees donated gently used Marco Sala significant 15-year Brazilian LOTEX license as part of diversify their gaming floors. books that were then given to local non-profit youth Chief Executive Officer a 50-50 joint venture. This is a greenfield opportunity organizations. Participation in our employee charitable that we expect to become one of the world’s largest Italy’s gaming machine performance was resilient in programs also continued to increase. instant games markets. It’s an important window into 2019 considering the profit impact of higher gaming Annual Report and Accounts 2019 Page | 4 Annual Report and Accounts 2019 Page | 5 1. STRATEGIC REPORT FINANCIAL HIGHLIGHTS $ millions (except per share amounts) The board of directors (the Directors or the Board) present their Strategic Report on International Game Technology PLC (the Parent) and its subsidiaries (together, the Company or IGT) for the year ended December 31, 2019. The consolidated balance sheet on page 77 presents the Company's financial position at December 31, 2019 and December 31, 2018. Movements in cash balances are presented in the consolidated statement of cash flows. Material assets and liabilities have been disclosed within the respective notes to the consolidated financial statements. Net assets were $2.2 billion and $2.4 billion at December 31, 2019 and 2018, respectively. Cash and cash equivalents were $0.7 billion and $0.3 billion at December 31, 2019 and 2018, respectively. OPERATIONAL HIGHLIGHTS CORPORATE HIGHLIGHTS Achieved profitability, in top half of outlook Bob Vincent named Chairperson, IGT Global Global Lottery same store