IGT Launches Exchange Offer

RENO, Nevada – (PRESS RELEASE) -- International Game Technology (NYSE: IGT) announced today that it has commenced an exchange offer under which IGT is offering to exchange up to $969,712,000 in aggregate principal amount at maturity of new Zero-Coupon Convertible Debentures due January 29, 2033 for an equal aggregate principal amount at maturity of its currently outstanding Zero-Coupon Convertible Debentures due January 29, 2033. The exchange offer is being made pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. The new debentures will have substantially similar terms to the old debentures, except that the new debentures will include a net share settlement feature. Holders that tender the old debentures will receive a cash exchange fee in an amount equal to $1.56 per debenture, which represents 0.25% of the accreted value of each old debenture as of March 9, 2006, which is the anticipated expiration date of the exchange offer.

The net share settlement feature will allow us to satisfy our obligation due upon conversion to holders of the new debentures in cash for the accreted principal amount of the conversion obligation and in common shares for any conversion obligation in excess of the accreted principal amount. To the extent we experience conversions of the new debentures, this net share settlement modification will enable us to reduce the share dilution associated with conversion of the new debentures.

IGT will account for the new debentures under the "treasury stock equivalent" method for calculating diluted earnings per share. Under this method, IGT's diluted shares outstanding will reflect only shares issuable to settle the conversion obligation. IGT currently uses the "if converted" method which requires all of the shares underlying the debentures to be included in the diluted share count.