James Hurley - Investor Relations Marco Sala - Chief Executive Officer Alberto Fornaro - Executive Vice President and Chief Financial Officer.

Barry Jonas - Bank of America Merrill Lynch Chad Beynon - Macquarie Capital (USA) Inc. David Katz - Telsey Advisory Group Domenico Ghilotti - Equita SIM SpA David Farber - Credit Suisse John DeCree - Union Gaming Research.

Good day and welcome to the IGT 2016 Third Quarter Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. James Hurley. Please go ahead, sir..

Thank you, and thank you all for joining us on IGT’s third quarter 2016 conference call. Marco Sala, our CEO, will provide an overview of the quarter and comment on some of our broader strategic initiatives, then Alberto Fornaro, our CFO, will provide operational and financial perspective on the period.

After those prepared remarks, we will open the call up for your questions. During today’s call, we will be making some forward-looking statements within the meaning of the federal securities laws.

Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements. The principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings.

With that, I’ll turn the call over to Marco Sala, CEO of IGT..

Thank you, Jim, and welcome, everyone. Our third quarter results demonstrated the benefits of our globally diversified business model. We achieved growth across our main geographic regions and for both lottery and the land-based gaming.

Revenue rose 6% in constant currency in the period, which was also our fourth consecutive quarter-over-quarter of year-over-year growth in adjusted EBITDA and adjusted operating income. We had a strong lottery performance across each of our main geographic regions.

Same-store revenues were up 6% outside of Italy, with robust growth in North America and Latin America. In Italy, lottery wagers rose an impressive 7%. We secured important lottery contract wins and extensions over the last few months. We won the Florida lottery business capturing this important business through 2031.

We signed a six-year extension with Texas Lottery through 2016 and a seven-year extension with Georgia running until 2025. At this point the average revenue weighted duration of the North America’s top 20 contracts is 8.5 years.

Combined with the recent win of the nine-year Italy Lotto concession, we have tremendous long-term visibility on a significant portion of our consolidated sales and profits. We also posted good KPIs in our global gaming operations this quarter. Sequentially, our worldwide installed base of gaming machines rose by over 1,000 units to more than 58,000.

We significantly expanded the installed base of our International segment, demonstrating our ability to leverage compelling games and hardware with the on the ground resources around the world. The North American installed base was stable compared with the second quarter.

Thanks to the momentum of our new premium offerings, particularly the Wheel of Fortune franchise in addition to the growing popularity of our 3D games. Gaming product sales were also higher in the period.

We shipped nearly 9,000 gaming machines in the third quarter, a significant increase from the prior year and an acceleration from the second quarter. Global interest in the S3000 and CrystalDual cabinets is strong, while the newly released AXXIS 23 cabinet that is gaining momentum internationally. DoubleDown’s performance continues to be challenging.

Competition in the social casino market as it has intensified with a proliferation of new ops that offer compelling content and player experiences. DoubleDown has proven competitive content and stable monetization rate, but no longer enjoys the early mover market advantages.

We recognize this and are focused on restoring its leadership in this attractive market segment. We are investing in platform upgrade to DoubleDown that will make for better player experiences and provide greater flexibility for faster gaming productions and updates.

We also have a plan to pursue a multi-app strategy, focusing in particular on some of our traditional stepper titles that we expect will generate a great deal of player interest, and we will continue to introduce IGT’s best performance – performing land-based games, which is an important driver of increased play.

We have seen encouraging response to some of our recent initiatives, the loyalty program launched this summer already has over 1.2 million members, and we have established advertising as a new revenue stream. I’m confident, DoubleDown is focused on the right turnaround strategies.

But it won’t happen overnight and we don’t expect to begin seeing the impacts of these strategies before the first quarter of next year. Now, let me provide some insight into recent market activities.

At some of the industry’s most important trade shows, G2E for gaming and the World Lottery Summit and NASPL for lottery, we solidified our industry leadership by demonstrating our focus on the future, serving customers needs with unique solutions and innovative player experiences.

At the lottery shows, we highlighted IGT’s retail interactive instant and through omni-channel capabilities, we continue to gain traction with Aurora, our next-generation lottery core platform solution. Aurora harnesses the business intelligence customers need to deliver improved results.

In addition to innovations in the interactive instant and virtual reality games, we introduced the technologies and concepts designed to make the retail environment the more engaging PlaySpot, a technology we are also implementing in gaming received a significant interest.

It provides consumers the ability to play lottery games on mobile devices in licensed lottery retail locations or other social spaces. We will be piloting a PlaySpot in Rhode Island later this year. Another highlights was our new state-of-the-art the Flex Lottery terminal.

It was developed for the network upgrade of our new Italian Lotto concession and we are leveraging this investment on a global scale. At G2E, our innovation at Playteam underscored our focus on content and enhanced the player experiences. We introduced six new cabinets.

And in order to support the investment in our new hardware, we provided detailed product roadmaps highlighting the steady stream and future availability of new content.

In the premium category, we are launching a new license brand such as, The Voice, expanding our successful 3D offering and reinvigorating our legacy game portfolio, such as the Wheel of Fortune and Fort Knox franchises.

In the core offering, we presented content that has successfully completed our new test-bank process and was immediately available for deployment. And we announced our leadership in stepper with new games and hardware, as a well as a video poker, where the new Multi Race Keno game was very well received. Excuse me.

Immersive gaming experiences were the real highlight, including new superior screen resolution on all cabinets, particularly the CrystalCurve family, a new production through 4D who was a standout. It combines multiple new technologies that give a player the very real impression of touching and interacting with objects floating in the air.

In fact, Sphinx 4D was voted the most highly anticipated gaming coming out of the show. Our commitment to growing our system business was also on display, particularly with mobile technologies.

Our Cardless Connect product transforms a player’s smartphone into their loyalty card, in addition to enabling cashless transfers between the slot machine and the phone. Our PlaySpot mobile technology, a version of which is being used by MGM was recognized as Casino Product of the Year at G2E.

In other system’s news, it is worth noting we were selected to provide comprehensive casino management systems for Lucky Dragon Hotel & Casino, which opens in Las Vegas in a few weeks. G2E 2016 was an important milestone for the new team and our gaming turnaround.

The progress was made even more tangible with IGT winning a Land-Based Supplier of the Year at the show. We are well-positioned to continue building on the strong momentum we displayed at the lottery and gaming tradeshows. Now, I will turn the call over to Alberto..

Thank you, Marco, and good morning or good afternoon to all of you. Our solid third quarter financial results are evident here on Slide 9. Revenue increased 6% in constant currency, reflecting strong growth with our North American Lottery in Italy segments. Adjusted EBITDA increased 4%, while adjusted operating income rose 9%.

We achieved adjusted EPS of $0.45, sorry, in the third quarter and have earned $1.45 per share year-to-date. Let’s turn to our operating segments starting with North America gaming and interactive on Slide 10. Lower gaming service revenue is primarily a result of the lower installed base versus the prior year.

Sequentially, the installed base was stable, reflecting the introduction of new titles such as Wheel of Fortune 3D, Wheel of Fortune Gold Spins and Aladdin 3D. Gaming service revenue also reflected targeted pricing action mostly taken earlier this year. DoubleDown revenue continued to be affected by a decline in the number of daily active users.

Monetization of the user base remains steady. This is consistent with what DoubleDown experienced in the second quarter. Product sales increased 3% in the third quarter. We shipped 2,017 new and expansion units and 3,221 replacement units for a total of 5,230 units in North America, which is up from the prior year.

A portion of revenue associated with new and expansion unit shipment was deferred and is expected to be recognizing the fourth quarter of 2016. Continued momentum for the S3000 Scepter and the Crystal Dual cabinet in addition to large Oregon VLT shipments drove replacement unit six.

Operating income largely reflected the flow through of lower revenues in addition to incremental costs to revitalize the installed base, such as game merchandising as well as higher R&D expenses, sorry. Turning to North America lottery in Slide 11, we can see the total revenue rose 22%.

Same-store revenue growth was 6% was driven by large Powerball and Mega Millions Jackpot in July. The lottery management agreement impact include $30 million incentive from New Jersey’s State Lottery attributable in large part to the record Powerball jackpot in the first quarter of 2016.

Same-store revenues for instant ticket and draw-based games grew 2% on top of a challenging comparison, with 9% growth in the same period of last year. This quarter’s growth rate is more aligned with our long-term expectation for the business.

Product sales benefited from hardware sales in California as well as increased instant ticket printing revenue. Operating income was up substantially from the prior year, largely due to the lottery same-store revenue growth in the lottery management agreement incentives.

Moving to international on Side 12, we achieved total revenue growth of 5% at constant currency. Same-store revenue growth of 6% in lottery was supported by strength in Latin America and Eastern Europe and partially offset by continuous softness in the UK. Gaming service revenue was lower, mainly due to our exit of certain interactive operations.

Terminal services revenue was higher at constant currency and installed base grew to 10,268 units, up from 9,768 units in the previous year quarter. Most of the recent addition to the installed base were in Latin America, specifically Argentina and Peru, as well as in Eastern Europe.

Product sales benefited from the 3,742 machine units we shipped in the quarter, which had higher overall average selling price. Replacement units saw robust growth compared to the prior year on broad-based demand. We also had higher system sales in the quarter related to the opening of the Wynn Macau.

Operating income rose 6%, reflecting stronger lottery growth, improved contribution from the installed base, and higher product sales that were largely offset by unfavorable FX translation. At constant currency, international operating income increased 15% over the prior year. Our Italy results are on Slide 13.

During the third quarter, we experienced underline growth in all our main product categories, which contributed to higher revenues and profits in the period. Lotto wagers rose 17%, which included significant late number activity.

10eLotto and Numero ORO grew 8% in the quarter on top of 5% growth in the prior year and therefore offset a decline in core wagers. Excluding the effect of late numbers, Lotto wager posted 2% growth compared to the prior year. Scratch & Win wagers were relatively stable during the third quarter.

Higher productivity drove machine gaming growth despite the decline in AWP units installed. The novelty effect of new AWP content apps during this quarter. We have seen this trend moderated as players have become more attuned to the lower payout. Sports Betting wagers grew 7% in the third quarter, benefiting from the Euro Football Championship.

Payout and sports betting remains steady compared to the prior year. Italy third quarter operating income was up 12%, mainly driven by growth in Lotto and the contribution from sports betting.

On Slide 14, you see a consolidated view of reported revenue and adjusted operating income for the quarter, which is a summary of the segment level detail I just discuss. Revenue was up on stronger lottery growth, LMA contribution and higher product sales reflecting demand for North America lottery products and global gaming machine.

Operating expenses are higher than the prior year. This is primarily a function of three items; first, the timing of bad debt expenses, which account for nearly half of the increase. On a year-to-date base, our underlying bad debt expense in line with the previous year.

The balance of the increase include higher global market – global product marketing expenses in both gaming and lottery and then increase in R&D costs. The increase in operating income obviously include the contribution from higher than normal jackpot, the late number activity benefits we have had the whole year.

This is a normal part of our business, but the timing is not something we can plan for and it does create a high base of comparing zone for us next year. Let’s turn to our debt and leverage profile, which you can see on Slide 15. Net debt for the third quarter was $7.96 billion, including a negative FX impact of $88 million.

Our leverage ratio of 4.45x is better than where we started the year then stable with the last two quarters, despite the net of $240 million Italy Lotto upfront concession payment we made in the year-to-date period.

As a reminder, the second upfront concession payment of $250 million is scheduled for the fourth quarter, but which we are responsible for approximately €155 million. Our strong cash flow is demonstrated here on Slide 16. In the first nine months of the year, we have generated $621 million in cash from operations.

This is after significant interest in cash tax payment in the third quarter. Working capital was also use of cash during the third quarter due to higher gaming inventory heading into G2E and seasonally stronger fourth quarter for product sales, along with the timing of the Italian receivables.

Capital expenditure were approximately $370 million in the first three quarters of the year, which mainly correspond to maintenance investment, reflecting a fairly normalized run rate. The free cash flow you see here is before the capital contribution by minority partners to the Lotto concession payment.

Let me now provide an update on our outlook, which we have summarized on Slide 17. We’re comfortable with our full-year 2016 adjusted EBITDA guidance of $1.74 billion to $1.79 billion. We’re updating our 2016 outlook for capital expenditures to no more than $550 million.

This is quite down from our prior expectation of $550 million to $550 million and is mostly related to the shifting timing of Florida capital spending we expected in 2016 and will be now incurred next year.

We continue to expect net debt at year end over $7.7 billion to $7.9 billion, as a seasonally strong cash flow generation in the fourth quarter, France, the second installment of the upfront Lotto concession payment. At this point, we would like to open the call for your question. Operator, could you please proceed with the instructions..

Certainly, sir. Thank you. [Operator Instructions] Our first question is from Barry Jonas from Bank of America. Please go ahead..

Hi, guys. Just a few questions for me.

First, can you talk about your assumptions in hitting top end and low ends of your annual adjusted EBITDA guidance?.

Barry, we’re basically confirming what we have said at the entire year. So let me put a little bit of color regarding it, because the performance until the first nine months have been quite important.

First of all, last year, we were positively impacted by the – we mentioned about the one-off related to the V8 in Italy that generated in the – specifically, in the fourth quarter generated $14 million of increase in terms of performance last year.

Then when we look at the quarter for 2016, we have the – we are – we have already scheduled for product sales in 2016 and the heavy comparison, because last year, we delivered 11,500 units.

But on the heavy schedule of 2016, there are some potential risk, the one is related in North America to the opening of some casino widely expected to be in the fourth quarter. But until we get there, we’re not sure that we can recognize revenue.

On or on the international part of the business, the new products that need to be delivered in various parts of the world and go through customs and so on and there could be some timing issue that could impact the total product sales. So there is an area of risk for different reasons in both international and in North America regarding Q4 2016.

And finally, we have recently seen an appreciation of the dollar against the euro that, as you know, purely for translation purposes it impacts negatively EBITDA and we have based the guidance with euro dollar rate to 1.10 and now we are below that..

Great.

And then second question, can you just give an update on the Italian regulatory environment, maybe some thoughts on the risks specifically around machines?.

Yes, for sure, Barry. I can elaborate on it. Look, the current budget low has been drafted and it is under discussion in the Italian parliament. The two main items are the super in Lotto tender process and the proposed National Receipt Raffle, neither [ph] of which has an impact on our current operation.

At this point in time no additional taxes on VLTs and AWPs are being considered at this time. Regarding what you referred to the reduction of AWPs, those are not within – in the discussion of the budget low.

But it’s an ongoing discussion between the government and the regional administrations that is lasting nearly for one year and there’s – and there are still a lot of unknowns. It is difficult at this point in time to predict the outcome, but we do not expect anything to dramatically impact our business.

In other words, if the 33% reduction of the total number of AWPs is to happen by the end of 2017, we do not expect any major impact on wage earnings. We believe that the total number of outstanding machine is still sizable and able to capture the overall demand..

Great. And last one for me, I noticed you did a very small acquisition a few weeks ago.

Just wondering now that the IGT integration and turnaround is farther along, could we potentially see more and larger M&A from you guys?.

No, we have not under our radar in M&A at this point in time. We do not believe that acquisition is something that we need. We still have to work on our turnaround and to execute on our programs..

And, Barry, just to add to what Marco has said whatever we do and if we look at small acquisition that we do, they go into the total cap of $100 million or growth CapEx that we have anticipated at the beginning of the year. So it’s really some very small areas of our business..

I was referring to major acquisitions, I mean, that I intend that was our – your question?.

Yes, yes. Great. Well, thank you so much, guys..

Thank you, Barry..

Our next question comes from Chad Beynon from Macquarie. Please go ahead. Your line is open..

Hi, great. Good morning. Thanks for taking my questions. First, I just wanted to start on the lottery contracts. Marco, in your prepared remarks, I think, you gave a pretty important statistics and your average North American contract is 8.5 years, and that’s something that that gives a lot of investors comfort here.

I know one of the things that that your company talked about at your Investor Day was expanding the FM contracts. Could you talk a little bit more about when you’re renewing these or just in the average course of business.

If these are becoming a bigger piece of your lottery mix, or should we expect the growth in North American lottery will really just be consumption trends for your traditional FM contracts? Thanks..

If I understand, first of all, I agree about the statistic, because I think this year was a very important year and not only for having retained a lot of business in Italy and Florida, and North America, but also the extensions that we were able to achieve in Texas and Georgia and gives us – give us a better outlook going forward.

Now, the growth over the next period of time that we’re always mentioning is related generally speaking to the innovation our customers are willing to introduce in their markets. As we’re always saying, there’s more appetite to innovate the portfolio and this business is driven by a good and solid offer.

And what we’re appreciating is our customers asking or embracing innovation, innovative ideas to be deployed into the market. And that is providing us the confidence that over the next years, we could appreciate the same kind of growth we have appreciated in the last years, because we see this trend maintained over the time..

Great, thanks. My follow-up is on Greece, because that was also an headline for this quarter.

Could you just remind us in terms of what was announced? How that affects your CapEx in the placement of your machines and the system in Greece going forward?.

I’ll elaborate on the timing and then Alberto will elaborate with some numbers. Now, I mean, we expect the operation starting in 2017. And you might remind that we will have 5,500 VLTs to be deployed during the year.

I cannot elaborate very much on the details saying when we should start deploying the machines, but accordingly to our understanding and now the process is ready to go. And so we look forward to this part of the business to contribute to the international growth of our installed base during 2017..

Could you just clarify on the cap – oh, I’m sorry, go ahead..

Chad, regarding the CapEx, we will include. This is a growth for us, it will be included in the growth CapEx for next year. The units will be counted into the installed base and we also will provide – we’ll provide the system for the system we currently have it in our inventory.

And so we’ll go out of our inventory, the machines will be in our CapEx for next year. But we’re not assuming a huge number regarding 2017..

Okay. Thanks. Congrats on the results..

Thank you..

Our next question is from David Katz from Telsey Group. Please go ahead..

Hi, afternoon..

Hi, David..

Hi. I wanted to just ask if you could talk about for us anything qualitatively, because I assume quantitatively not or any data points that you can share regarding next year? Obviously, you’re having a terrific year and I ask the question obviously in the context that the stock has performed extremely well.

We have gotten some indications, obviously, that your North American turnaround is proceeding on plan.

But is there anything that you can tell us or share with us or any perspectives regarding next year for North America, or the other businesses, but primarily North America?.

Now what I can share is, again, it’s very preliminary to qualitative. So first of all, I already mentioned in my speech, there will be a couple of areas where we would – it will be difficult for us to have the same kind of positive impact in 2017.

I’m talking about the Jackpot in the North American lottery that has impacted, as I said, not only the first quarter in terms of volume, but it has given an important contribution to the size of our incentive on the lottery management agreement in this specific quarter.

Also, you know that historically, the late numbers in Italy in the entire year have been higher that the average historical rate. So, obviously, we cannot count on these elements in order to project the results of our next year.

There’s also another important variable that, at least, in terms of translation will impact as, which is the effects, because again, we’re going below 110 and here already where we’re if these current level is maintained, it has a significant impact on potential year – next year EBITDA. We’re not talking about real impact.

We’re talking about translation, because usually we have a currency policy that covers by now most of the exposure. I would refer to these three major items to look when you look at the – and next year and considering the fact that in gaming we’re continuing to work..

Okay. Thanks very much..

Thank you, David..

[Operator Instructions] Our next question comes from Domenico Ghilotti from Equita. Please go ahead. Your line is now open..

Good afternoon. A few questions. The first just a clarification on the comment that you gave on the attitude of the Italian players on the gaming machine. So I’m just checking if you have seen in starting Q4 some, say, stabilization or decline in the attitude towards the low payout games.

And still on the Italian market before it was announced – a question on the contribution of Greece, I wonder if you see also an opportunity for shipment of the new AWPs, the new mini-VLTs in the Italian market already starting in 2017, or if it is a more longer-term opportunity? And last question is on New Jersey.

In particular, you have commented the incentive that you have been able to achieve. I tried to understand how repeatable, how sustainable is the contribution probably not as we defend.

But so how beatable is the target in New Jersey for next year? you – if I’m not wrong you have already commented for a good jackpot in – also in Q3?.

Okay. Domenico, Alberto here. Let me respond to the first and the last question. The first one regarding the AWP, what I was mentioning is that, we were expecting with the change in the payout a negative impact on wagers.

However, given the fact that this change in the payout has been accompanied by new gains that were within a new mouthful, so that were delivered to the market. We have not seen at the beginning when the change was introduced. We have not seen a sign of wagers going down. Now that, the new games have been introduced.

We still cannot draw a conclusion that some kind of weakening cannot be seen in the future months. And therefore, we are quite cautious in saying that there has been no impact overall from the change in the tax and therefore on the change in the payout..

But – so far so good, sorry. So far so good….

Yes, the answer is yes..

The short answer is yes..

Okay..

Regarding New Jersey, obviously, we are very happy about that. Every year, there’s a change in what is the level of net income for the lottery that needs to be achieved and obviously, this year we have been favored by the jackpot.

Next year we will see certainly for the the first time it will reach an incentive, so it’s pretty good and put us in a good position for next year. But again, we need to see what are the trends particularly on the jackpot games to see how if it is re-buildable and the size of the – of this incentive..

Domenico, can you repeat the second question, because are you referring to the new generation of AWP in Italy?.

Yes.

I’m trying to understand the timing?.

No, I don’t know..

Okay..

Really I don’t know, because I think in principle, they could represent an opportunity for a company like ours. And we look forward to understand which kind of a regulation will be finally decided by the Italian regulator. But still we do not see that it’s very difficult to make an assessment on it. In principle, we are positive.

Unfortunately, without a clear frame, we cannot comment much more..

Okay. I was expecting that the reduction in installed base on the normal AWPs was – to capital was monotonous with also the replacement on new machine.

So when they will start with the reduction, they will go?.

No, on Europe, they will give guidance in this sense, because it’s not only the reduction of the machines.

But in the event of the AWPs of new generation, they are talking about a central system that are able to unload the products and somehow they could represent sort of, let me say, mini VLTs, in this sense, it’s clear that our company would be well-positioned to take advantage by this opportunity.

But again still when we will have more clarity regarding the way with this development will be regulated, it’s hard to make further comment..

Okay.

So your comment on marginal impact, no relevant impact on your, say, 2017 performance in case of reduction in the number of AWPs that was not counting on any, I’d say, any contribution from?.

No. You’re right..

Okay..

You’re right, also because, I think, it’s a much longer-term opportunity there. What I’m saying regarding the current AWPs, we have nearly 400,000 machines. Most of the – some of these machines are distributed in a very marginal point of sales. We think that even though the reduction appear to be very consistent.

We believe that the machines that will in many ways be available in the market will be sizeable enough to capture most part of the demand..

Okay. Thank you..

Next question?.

Our next question is from David Farber from Credit Suisse. Please go ahead..

Good morning, guys.

How are you?.

Very good.

What about you, David?.

Great. The results were encouraging. We’ve got a lot of questions that were already asked and answered. But I wanted to spend a minute just on the Interactive segment, which was a tough softer. You mentioned increased competition and some of the things you’re doing in the prepared remarks.

But I’m hoping maybe just dive a bit deeper, my question really is structurally, do you think customers are showing something less interest in the segment, or they’re perhaps simply looking for new content,. I guess, I was just curious maybe you could help us better understand this, and then I had a follow-up? Thanks..

Talking about our customers or the market customers?.

Both, I guess?.

The market has been growing to a lower rate, but still growing. At this point in time, we are struggling more about our market share than in the market overall. And it’s something that we know and that we have the strategy in order to fix it.

And as I said in my prepared remarks, this includes the multiple apps, new content, and infrastructure improvements, and we’re dedicating resources to make it successful. The market is still an attractive market and whether we intend there to be a leader.

On the other hand, one of the program we have recently introduced the loyalty program is getting some traction and helping to stabilize performance in the last weeks, but the turnaround won’t happen overnight.

And so, as I said, we expect the first quarter of next year to see more – the more visible outcome of the set of initiatives we are deploying in these weeks..

Okay. That’s helpful. And then the last piece that didn’t get us, so I wanted to hear about was the release – the recently announced cross-licensing deal with Aristocrat.

I guess, I was curious, can you potentially just talk about any economics involved? What areas you will use the IP and if the agreement you think will move you and the geographies maybe you might be underutilized, that would be helpful and that’s it for me? Thanks..

Well, David, obviously, we don’t provide specific, because we have agreements like this with different counterparties and so on. But let me just provide a little color regarding what we have done that is related to the fact that we were looking basically at different licensing agreement that we are mostly related to two areas.

One is the game features and another one on service window license. This is a discussion that we have with them and we are able to introduce an agreement that will impact some years in the future..

And I guess, the – any litigation that had prior existed has now been resolved as part of the agreement, is that correct?.

Yes, the agreement basically touch all the critical points we had listed..

Okay. That’s it for me. Thanks..

We’ll now take our next question from John DeCree from Union Gaming. Please go aheads..

Hey, everyone. Just one question for me. I was wondering if you could provide a little more color on the nice sequentially increase in the installed base in the international markets.

I think you mentioned Latin American, Eastern Europe, but I was wondering if you’re seeing momentum with products there, or maybe just a one-time conversion or installation, any any color you could provide there would be great?.

Look, I thin that we are having good momentum in the international business. And we expect this trend to continue, I mean, and consider that we have a new cabinet to be distributed in international part of the business. But in addition to that, Greece will definitely represent a growth engine for 2017.

Look, overall, we’re seeing good returns on our decision to bring in the various international areas our total management, and we’re always attuning content in the local markets in order to be more effective in capturing opportunities. This is through in the installed base, but it’s even more through when it comes to the product sales.

So we continue to see overall international business as an opportunity for growth in the – in our portfolio. Let me add also that that 3D cabinets are an area of particular interest for international operations. And we intend also to provide those kind of cabinets in some selected geographies for leasing. So we will see over the time.

But overall, we believe that the international part of the business will represent growth opportunity, as anticipated, while explaining the –this transaction 18 months ago..

Okay. Thanks, Marco..

Thank you..

We will now take a follow-on question from David Katz from Telsey Group..

Hi. Can I just ask about specifically the technology for the business? I had seen an article basically discussing a similar product on premise that is being launched in Asia.

Can you talk strategically about what you are working on and what we can expect from just the sale of technology as a driver of revenue and profit please?.

But what I would say is the following. You know, that PlaySpot has been particularly in the application for sports betting, or is operating at MGM and we will soon see the implementation also the casino games to draw some conclusion regarding these tests.

We have seen a lot of interest also in general in Asia and we’re talking about simply through conversation with our customers.

And therefore, we’re looking at potential opportunities there to test in a different jurisdictions, I would say, in Asia that that kind of technology well in theory also the potential in the casino games is also wider in terms of application. This is where we’re now.

Basically, we know that there are other providers and so on, but what is important is the fact, obviously, this kind of technology for as it could go together with our system and then enhance the capabilities around..

David, I think there are some developments. I think we started one-year ago, I remember the first time we were having conversation and we were talking about this kind of a technology as a technology that could have represented the great opportunity going forward. We see here and there other products developed.

But we think that for the time being, we are having a very comprehensive suite of offering. And we intend to continue investing in this area to maintain these sort of leading position and we’re testing these concepts in North America.

But we’re having a very good advanced conversation with some selected operators in Asia that are very much interested in introducing this kind of technology. I cannot disclose much more than these for the time being. But I’m pretty comfortable with the fact that that this will represent a growth revenue stream for us..

Great. And if I can just follow-up my earlier question, excuse me, around, we saw some terrific product and we have been seeing some terrific product from G2E. And I assume that those are in some phase of testing and deployment.

Are there – is there any feedback qualitative or otherwise you can give us since G2E, I know, it’s a only a short time about how some of the new products have been performing in the field?.

No, I can tell you couple of things, I mean, that is not G2E related to be honest. But I’m very satisfied with Wheel of Fortune 3D that we introduced at the end of second quarter, it is doing very well and we’re enlarging the installed base. The other 3D products are doing very well, Aladdin being one of these.

But we’re rather satisfied also on the core part of the business, because our test-bank process started producing good contents. I’m referring to a couple of contents Golden Egypt and Big 5 Safari that are in the floor now and optically [ph] I can say that the feedbacks we are receiving are good.

But what the customers appreciated was the solidity and the consistency of the process that is providing us and confidence on the development we have now ongoing. So, I think, that over time we will continue producing good content that could enlarge our presence in the core part of the business..

Perfect. That’s all very clear. One last one if you don’t mind. When I look at the North American installed base and we track its revenue per day or its yield, clearly it has flattened out from what we meaningful declines.

Is there any real – when can we start to see that grow? And I assume or should I assume that that’s a function of some of these new products that we’ve seen getting out into the field and starting to contribute?.

Sorry, that is exactly so, I mean, the main contributor for this quarter stabilization has been Wheel of Fortune 3D and the other Wheel of Fortune and that’s – that is why we’re now, I mean, I’m always talking that we’re in the process of stabilizing the installed base.

But it’s clear that at this point in time, we tend to be quite positive regarding the pipeline of new products that starting next year. We will progressively deploying North American market, a new cabinet. So you have appreciated that we launched a number of new cabinets, but along with a suite of content that have to sustain the various cabinets.

So that is the reason why we expect that over the quarters next year, we should see an improvement of our position in that part of the market..

Very good. Great quarter. Thanks so much..

Thank you very much, David..

[Operator Instructions] And just to advise that as there no further questions, I would like to turn the call back to Mr. Marco Sala, CEO, for any further remarks..

Thank you for joining us today. Our year-to-date results confirm, we’re delivering on this strategic and financial objectives that we laid out for the year. Our commitment developing compelling player experiences that created value for our customers and our shareholders alike is under wavering.

As always, we thank you for your interest in IGT, and I wish you all wonderful holiday season. Thank you very much..

Thank you, sir. Ladies and gentlemen, that will conclude today’s conference call. Thank you for your participation. You may now disconnect..