IGT Reports Record Revenues

RENO, Nevada – (PRESS RELEASE) -- International Game Technology (NYSE: IGT) today reported operating results for the second quarter ended March 31, 2006.

Second quarter financial highlights:

* Record total revenues of $644.4 million, up 17%, and related gross profit up 28% from the prior year

* Product sales revenues of $333.2 million, up 32%

* Record gaming operations revenues of $311.2 million, up 4%, and related gross profit up 26%

* Non-machine revenues totaled $88.5 million, up 16%

* Strong international results, operating income up $23.9 million or 228%

* Record EBITDA totaled $257.8 million, up 26%

* Earnings per share of $0.35, up 35%

"We achieved a number of financial records in the second quarter, despite limited visibility into new unit growth in the domestic market. These accomplishments reflect our continued focus on growing our international business, increasing the installed base and efficiency of our game operations business and expanding the contribution from non-machine product sales," said IGT Chairman and CEO TJ Matthews. "During the quarter, we also achieved record EBITDA and returned a significant amount of cash to our shareholders in the form of share repurchases and dividends. We installed our first communal gaming device, the Wheel of Fortune(R) Super Spin(TM), and it has been met with enthusiasm from both customers and players alike. We continue to invest heavily in new technologies for the future as our server-based gaming initiatives progress, and we believe that our recent agreement with Walker Digital will position us to deliver exciting new gaming experiences to the players."

For the second quarter of fiscal 2006, net income totaled $124.0 million or $0.35 per diluted share compared to $93.9 million or $0.26 per diluted share in the prior year. For the six months ended March 31, 2006, net income totaled $244.6 million or $0.69 per diluted share compared to $216.4 million or $0.59 per diluted share in the same prior year period.

Gaming Operations

Second quarter revenues and gross profit from gaming operations totaled a record $311.2 million and $183.9 million, respectively, compared to $298.9 million and $145.8 million in the prior year. Gross margins on gaming operations expanded to 59% compared to 49% in the prior year. Prior year results included asset obsolescence charges of $19.9 million, pre-tax, as demand transitioned toward our innovative new gaming operations products and cabinet styles. Margin improvement was also due to the expansion into new Central Determination and Class II markets, the success of our low- denomination and multi-level progressive games, decreased jackpot-related expense, and positive shifts in interest rates.

For the six-month period ended March 31, 2006, revenues and gross profit from gaming operations totaled $602.9 million and $349.4 million, respectively, compared to $585.8 million and $295.3 million in the prior year- to-date period.

The installed base of recurring revenue machines ended the quarter at a record 44,400 units, an increase of 6,500 units from the prior year and an increase of 1,100 units from the immediately preceding quarter.

In casino operations markets, year-over-year growth was driven by additional placements in domestic Central Determination and Class II markets including Oklahoma, California, Florida and Alabama. Internationally, casino operations market placements increased with the introduction of wide-area progressive units in South Africa during the current year.

In lease operations markets, year-over-year growth was primarily the result of international placements in the emerging Mexico market. Incremental domestic placements were also realized in New York, Rhode Island and Delaware.