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Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 1 of 26

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J. Randall Jones
Nevada State Bar Number 1927
r.jones@kempjones.com
Spencer H. Gunnerson
Nevada State Bar Number 8810
s.gunnerson@kempjones.com
KEMP, JONES & COULTHARD, LLP
3800 Howard Hughes Pkwy, 17th Floor
Las Vegas, Nevada 89169
Telephone: (702) 385-6000
Timothy C. Meece
tmeece@bannerwitcoff.com
Michael J. Harris
mharris@bannerwitcoff.com
Audra C. Eidem Heinze
aheinze@bannerwitcoff.com
BANNER & WITCOFF, LTD.
Ten South Wacker Drive, Suite 3000
Chicago, Illinois 60606-7407
Telephone: (312) 463-5000
Attorneys for Plaintiff Bally Gaming, Inc.

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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BALLY GAMING, INC.

v.

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Case No.:

Plaintiff,

ARISTOCRAT TECHNOLOGIES, INC.,


VIDEO GAMING TECHNOLOGIES, INC.,
AND ARISTOCRAT LEISURE LIMITED
Defendants.

COMPLAINT FOR PATENT


INFRINGEMENT, TRADEMARK
INFRINGEMENT AND FALSE
DESIGNATION OF ORIGIN/UNFAIR
COMPETITION
JURY TRIAL DEMANDED

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Plaintiff, Bally Gaming, Inc. (Bally Gaming, which includes Bally Gaming, Inc. and its
predecessors-in-interest and successors-in-interest), for its complaint against Defendants,
Aristocrat Technologies, Inc. (ATI), Video Gaming Technologies, Inc. (VGT), and
Aristocrat Leisure Limited (Aristocrat Leisure), for patent infringement, trademark
infringement, and false designation of origin/unfair competition arising under the patent and
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Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 2 of 26

trademark laws of the United States, 35 U.S.C. 271, et seq. and 15 U.S.C. 1114 and 1125, et

seq., and the trademark and unfair competition laws of Nevada, hereby demands a jury trial and

alleges as follows:
THE PARTIES

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1.

Bally Gaming is a corporation organized under the laws of the State of Nevada,

with a principal place of business at 6650 El Camino Road, Las Vegas, Nevada 89118.
2.

ATI is a corporation organized under the laws of the State of Nevada, with a

principal place of business at 7230 Amigo Street, Las Vegas, Nevada 89119.
3.

VGT is a corporation organized under the laws of the State of Tennessee, with a

principal place of business at 308 Mallory Station Road, Franklin, Tennessee 37067.
4.

Aristocrat Leisure Limited is a corporation organized under the laws of Australia

with a principal place of business at 85 Epping Road, North Ryde NSW 2113, Australia.

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5.

On information and belief, ATI and VGT are subsidiaries of Aristocrat Leisure.

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6.

On information and belief, Aristocrat Leisure controls and directs ATI and VGT.

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7.

On information and belief, Aristocrat Leisure prepares and files consolidated

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financial statements on behalf of itself, ATI and VGT. For example, on information and belief,

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Aristocrat Leisure prepared and filed a consolidated 2015 Annual Report on behalf of itself, ATI,

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and VGT. (Exhibit F.) In its 2015 Annual Report, Aristocrat Leisure refers to ATI and VGT as

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controlled entities. (Id., at p. 108.) In its 2015 Annual Report, Aristocrat Leisure also states

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that the acquisition of Video Gaming Technologies Inc. (VGT) was completed on 20 October

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2014 and that VGT has a complementary product offering and provides a unique opportunity

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to accelerate our growth in the US recurring revenue segment. (Id., at p. 21.) In its 2015

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Annual Report, Aristocrat Leisure refers to itself and its controlled entities, including ATI and

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VGT, as The Group, and further states that The Group continued to grow its Class III

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premium gaming operations footprint through the commercialisation of innovative content and

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hardware . . . [including Accused Products at issue in this case]. (Id., at p. 18.)

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8.

On information and belief, Aristocrat Leisure, ATI, and VGT have common

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directors and officers. For example, on information and belief, Maureen Sweeny is on Aristocrat

Leisures Executive Leadership Team, she is the Chief Commercial Officer for Aristocrat

Leisure and its controlled entities, and she is also a Director of ATI.

https://www.aristocratgaming.com/about/board-executive-team/ and Exhibit G.)

example, on information and belief, Jayme Sevigny is on Aristocrat Leisures Executive

Leadership Team and he is also the President of VGT. (Id.)

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(See

As another

On information and belief, Aristocrat Leisure, ATI, and VGT have common

business departments. For example, on information and belief, Maureen Sweeny is the Chief

Commercial Officer for Aristocrat Leisure and its controlled entities, including ATI and VGT.

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(See https://www.aristocratgaming.com/about/board-executive-team/.)
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Aristocrat Leisure, ATI, and VGT issued a joint press release on September 14,

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2016, in advance of the industrys largest annual trade show, the Global Gaming Expo (the G2E

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show). (Exhibit H.) The press release states that Aristocrat Leisure, ATI, and VGT will share a

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booth -- booth #1141 at the G2E show. (Id.) The press release also quotes Maureen Sweeny

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as stating, [o]ur combined offerings from Aristocrat and VGT present the most diverse product

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portfolio in gaming, one that has the content, comparability and configurability to appeal to

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every type of casino player. (Id.)

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On information and belief, Aristocrat Leisure, ATI and VGT shared a booth at the

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2016 G2E show in Las Vegas, Nevada show where they displayed, promoted, and offered to sell

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products at issue in this case.

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12.

On information and belief, Aristocrat Leisure operates and maintains a website at

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https://www.aristocratgaming.com/ where it directs visitors, including customers and potential

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customers, to websites for its controlled entities, including ATI and VGT.
JURISDICTION AND VENUE

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13.

This is an action for patent infringement, trademark infringement, and false

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designation of origin/unfair competition arising under the patent and trademark laws of the

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United States, 35 U.S.C. 271, et seq. and 15 U.S.C. 1114 and 1125, et seq., and the trademark

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 4 of 26

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and unfair competition laws of Nevada.


14.

This Court has jurisdiction over this action under 15 U.S.C. 1121 and 28 U.S.C.

1331, 1338(a)-(b), and 1367.


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This Court has personal jurisdiction over ATI because, on information and belief,

ATI is incorporated in Nevada and maintains substantial, continuous and systematic contacts in

Nevada, ATI has purposefully availed itself of the benefits and protections of Nevadas laws

such that it should reasonably anticipate being hauled into court here, ATI transacts business

within Nevada, including but not limited to the sale, lease, and/or operation of products at issue

in this case, and ATI displayed, promoted, and offered to sell products at issue in this case at the

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2016 G2E show in Nevada.


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This Court has personal jurisdiction over VGT because, on information and

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belief, VGT maintains substantial, continuous and systematic contacts in Nevada, VGT has

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purposefully availed itself of the benefits and protections of Nevadas laws such that it should

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reasonably anticipate being hauled into court here, VGT transacts business within Nevada,

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including but not limited to the sale, lease, and/or operation of products at issue in this case, and

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VGT displayed, promoted, and offered to sell products at issue in this case at the 2016 G2E show

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in Nevada.

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17.

This Court has personal jurisdiction over Aristocrat Leisure because, on

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information and belief, Aristocrat Leisure maintains substantial, continuous and systematic

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contacts in Nevada through at least its controlled entities ATI and VGT, Aristocrat Leisure has

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purposefully availed itself of the benefits and protections of Nevadas laws through at least its

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controlled entities ATI and VGT such that it should reasonably anticipate being hauled into court

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here, Aristocrat Leisure transacts business within Nevada through at least its controlled entities

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ATI and VGT, including but not limited to the sale, lease, and/or operation of products at issue in

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this case, and Aristocrat Leisure, through at least its controlled entities ATI and VGT, displayed,

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promoted, and offered to sell products at issue in this case at the 2016 G2E show in Nevada.

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18.

Venue is proper in this district pursuant to 28 U.S.C. 1391 and 1400(b).

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 5 of 26

BACKGROUND

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Bally Gaming Design Patent


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Founded in 1932, Bally Gaming provides innovative products and designs to the

gaming industry. One example is the design of Bally Gamings ALPHA 2 Pro Wave product

(the Pro Wave Design). It is the industrys first cabinet with a curved monitor, and it brings a

whole new look and feel to casino floors. An example of Bally Gamings Pro Wave Design is

shown below.

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20.

Pro Wave Design immediately received industry praise, including at least the following:

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Global Gaming Business magazine named the Pro Wave Design the Best Slot
Product in its 12th Annual Gaming & Technology Awards. (Exhibit I.)

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Bally Gaming introduced the Pro Wave Design at the G2E show in 2013. The

The Pro Wave Design was named to the top 10 list in the 8th Annual Slot Floor
Technology Awards. (Exhibit J.)

Casino Journal magazine named the Pro Wave Design one of the Top 20 Most

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Innovative Gaming Technology Products of 2013, and of those Top 20 products

the Pro Wave Design received the Gold Award, meaning it received the highest

score from the judges. (Exhibit K.)

Hospitality Operations Technology Award. (Exhibit L.)

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Casino Enterprise Management magazine awarded the Pro Wave Design its 2014

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Another of Bally Gamings innovative designs is its ALPHA Pro Wave 360,

which has video toppers forming a 360-degree video display (the Pro Wave 360 Design). An

example of Bally Gamings Pro Wave 360 Design is shown below.

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22.

Bally Gaming introduced the Pro Wave 360 Design at the G2E show in 2014.

Like the Pro Wave Design, the Pro Wave 360 Design received industry praise, including at least
the following:

Global Gaming Business magazine named the Pro Wave 360 Design the Best
Slot Product in its 13th Annual Gaming & Technology Awards. (Exhibit M.)

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Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 7 of 26

Most Innovative Gaming Technology Products for 2014. (Exhibit N.)

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Casino Journal magazine named the Pro Wave 360 Design one of the Top 20

23.

Bally Gaming has taken steps to protect its Pro Wave Design and Pro Wave 360

Design. Relevant to this dispute, Bally Gaming owns all right, title, and interest in, and has the

right to sue and recover for past, present, and future infringement of, U.S. Patent No. RE46,169

(the 169 Patent), U.S. Patent No. D714,875 (the 875 Patent), and U.S. Patent No.

D715,364 (the 364 Patent) (collectively, the Bally Gaming Patents).

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24.

The U.S. Patent and Trademark Office (USPTO) duly and legally issued the

169 Patent on October 4, 2016. A true and correct copy of the 169 Patent is attached to this
Complaint as Exhibit A, and a figure from the patent is reproduced below.

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25.

The 169 Patent is presumed to be valid.

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26.

The USPTO duly and legally issued the 875 Patent on October 7, 2014. A true

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and correct copy of the 875 Patent is attached to this Complaint as Exhibit B, and a figure from

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the patent is reproduced below.

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Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 8 of 26

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27.

The 875 Patent is presumed to be valid.

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28.

The USPTO duly and legally issued the 364 Patent on October 14, 2014. A true

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and correct copy of the 364 Patent is attached to this Complaint as Exhibit C, and figures from

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the patent are reproduced below.

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29.

The 364 Patent is presumed to be valid.

30.

Without Bally Gamings authorization, ATI, as controlled and directed by

Aristocrat Leisure, has made, used, offered for sale, sold, and/or imported into the United States
products having designs that violate the Bally Gaming Patents (hereafter, the ATI Infringing
Products). The ATI Infringing Products with respect to the 169 Patent include at least ATIs

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ARC Single, ARC Double, and ARC Wheel products (the ARC Products).

Infringing Products with respect to the 875 Patent and the 364 Patent include at least the

Sharknado product that ATI displayed at the 2016 G2E show in Las Vegas, Nevada (the

Sharknado Product). Examples of the ATI Infringing Products are shown in the table below.

ARC Single

ARC Wheel

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Sharknado Product

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The ATI

ARC Double

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31.

The overall appearance of the designs of the Bally Gaming Patents and the

corresponding designs of the ATI Infringing Products are substantially the same.
32.

An ordinary observer will perceive the overall appearance of the designs of the

Bally Gaming Patents and the corresponding designs of the ATI Infringing Products to be

substantially the same.

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33.

The table below illustrates the infringement by comparing figures from the Bally

Gaming Patents with exemplary images of the ATI Infringing Products.


Bally Gaming Patent

Example ATI Infringing Product

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Bally Gaming Patent

Example ATI Infringing Product

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Bally Gaming Patent

Example ATI Infringing Product

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34.

On information and belief, ATI and Aristocrat Leisure have had knowledge of the

Bally Gaming Patents.


35.

Bally Gaming has given ATI and Aristocrat Leisure notice of the Bally Gaming

Patents, including at least by marking its products pursuant to 35 U.S.C 287(a).


36.

On information and belief, ATI, as controlled and directed by Aristocrat Leisure,

intended to copy the Bally Gaming Patents by creating the same or similar overall impression of
Bally Gamings patented designs.

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37.

On information and belief, ATI, as controlled and directed by Aristocrat Leisure,

intended to copy, and did copy, the Bally Gaming Patents as evidenced by at least the similarity

between the ATI Infringing Products and Bally Gamings Pro Wave Design and Pro Wave 360

Design.

Bally Gaming Trademarks

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38.

Bally Gaming began making, promoting, selling, and/or leasing gaming machines

under its EASY MONEY trademark at least as early as 1998.


39.

Bally Gaming subsequently began using other trademarks in the EASY MONEY

family in connection with gaming machines, including DOUBLE EASY MONEY beginning in
at least 2003 and SUPER EASY MONEY beginning in at least 2007.
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Bally Gaming has continued to use its EASY MONEY family of trademarks over

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the years, including introducing a gaming machine under its EASY MONEY trademark at the

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G2E show in 2015.

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41.

Bally Gaming owns U.S. Trademark Registration No. 3,004,885 for DOUBLE

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EASY MONEY for use on or in connection with currency and credit operated slot machines

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and gaming devices, namely, gaming machines for use in gaming establishments (the 885

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Registration, a copy of which is attached as Exhibit D).

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42.

The USPTO issued the 885 Registration on October 4, 2005, and the 885

Registration is incontestable under 15 U.S.C. 1065 and 1115(b).


43.

Bally Gaming owns U.S. Trademark Registration No. 3,399,131 for SUPER

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EASY MONEY for use on or in connection with gaming machines that generate or display

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wager outcomes; gaming software that generates or displays wager outcomes of gaming

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machines (the 131 Registration, a copy of which is attached as Exhibit E).

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44.

The USPTO issued the 131 Registration on March 18, 2008, and the 131

Registration is incontestable under 15 U.S.C. 1065 and 1115(b).


45.

As a result of its use of its EASY MONEY family of trademarks over the years

and its registrations, Bally Gaming owns common law and/or federally registered rights for

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EASY MONEY, DOUBLE EASY MONEY, and SUPER EASY MONEY for use in connection

with gaming machines (the Bally Gaming Trademarks).

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46.

Bally Gaming has given VGT, as controlled and directed by Aristocrat Leisure,

notice of its rights in the Bally Gaming Trademarks.


47.

Nonetheless, without authorization or permission from Bally Gaming, VGT, as

controlled and directed by Aristocrat Leisure, has used, and continues to use, in commerce the

Bally Gaming Trademarks and colorable imitation thereof in connection with the sale, offering

for sale, distribution, and advertising of gaming machines (the VGT Infringing Products). For

example, VGT, as controlled and directed by Aristocrat Leisure, is selling, offering to sell,

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distributing, and advertising a wide area progressive gaming machine platform under the mark

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EASY MONEY JACKPOT.

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Trademarks and colorable imitations thereof in connection with the VGT Infringing Products.

Below are examples of VGTs use of the Bally Gaming

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48.

According to VGT, the VGT Infringing Products are a 3-reel mechanical wide

area progressive and appears on top of eight player-favorite VGT game titles: 777 Bourbon
Street, Crazy Cherry, Hot Red Ruby, King of Coin, Lucky Ducky, Mr. Money Bags,
Reel Fever and Smooth as Silk. (Exhibit O.)
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On information and belief, however, VGT is also using the mark EASY MONEY

JACKPOT with other game titles and as a standalone mark. For example, at the 2016 G2E
show, VGT, as controlled and directed by Aristocrat Leisure, displayed, promoted, and offered to
sell gaming machines bearing EASY MONEY JACKPOT as a standalone mark. Those gaming
machines, which are shown in the photos below, had game titles Star Spangled Sevens, Cash
Barn, Crazy Bills Gold Strike, and Gems & Jewels.

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50.

As can be seen in the examples above, VGTs use of EASY MONEY JACKPOT

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emphasizes EASY MONEY, such that the wording EASY MONEY is the more dominant

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element of the mark and JACKPOT is less significant in terms of affecting the marks

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commercial impression.

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51.

On February 5, 2015, VGT filed a U.S. trademark application for EASY MONEY

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JACKPOT. The application is U.S. Trademark Application Serial No. 86525799 for EASY

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MONEY JACKPOT for use with gaming devices, namely, gaming machines, slot machines,

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bingo machines, with or without video input and gaming devices, namely, computer software

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for use with gaming machines to enable the gaming machine to run (the VGT Application, a

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copy of which is attached as Exhibit P).

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On February 2, 2016, the USPTO refused the VGT Application because, among

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other things, the USPTO found a likelihood of confusion between VGTs Application for EASY

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MONEY JACKPOT and Bally Gamings 885 Registration for DOUBLE EASY MONEY and

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Bally Gamings 131 Registration for SUPER EASY MONEY (the Refusal, a copy of which is

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attached as Exhibit Q).

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53.

As part of the Refusal, the USPTO found that VGTs Application for EASY

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MONEY JACKPOT and Bally Gamings trademarks for DOUBLE EASY MONEY and SUPER

EASY MONEY are highly similar because they share the identical wording EASY MONEY.

(Id., at p. 3.)

54.

The USPTO also found in its Refusal that VGTs Application for EASY MONEY

JACKPOT does not create a distinct commercial impression because it contains the same

common wording as [Bally Gamings trademarks], and there is no other wording to distinguish it

from [Bally Gamings trademarks]. (Id., at p. 3.)

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The USPTO also found in its Refusal that the wording JACKPOT in VGTs

Application for EASY MONEY JACKPOT is merely descriptive of or generic for VGTs

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gaming machines. (Id., at p. 3.) As such, the UPSTO held that the wording JACKPOT in

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VGTs Application for EASY MONEY JACKPOT is less significant in terms of affecting the

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marks commercial impression, and renders the wording EASY MONEY the more dominant

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element of the mark. (Id., at p. 3.)

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The USPTO also found in its Refusal that VGTs Application for EASY MONEY

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JACKPOT and Bally Gamings trademarks for DOUBLE EASY MONEY and SUPER EASY

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MONEY are highly similar in sound and meaning and impart a confusingly similar

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commercial impression. (Id., at p. 3.)

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The USPTO also found in its Refusal that VGTs and Bally Gamings goods as

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identified in the VGT Application, Bally Gamings 885 Registration, and Bally Gamings 131

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Registration are closely relat[ed] because they are all gaming devices likely to come from a

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common source. (Id., at p. 4.)

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The USPTO also found in its Refusal that purchasers of [VGTs] goods could

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mistakenly assume such goods were produced by [Bally Gaming], or that [VGT] and [Bally

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Gaming] are related in some way. (Id., at p. 4.)

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The USPTO also found in its Refusal that [b]ecause the marks are highly similar

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and the goods are closely related, the similarities among the marks and the goods are so great to

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create a likelihood of confusion among consumers as to the source of the goods. (Id., at p. 4.)

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60.

Although the USPTO refused the VGT Application, the USPTO gave VGT an

opportunity to respond to the finding of a likelihood of confusion. (Id., at p. 4.) Specifically, the

USPTO stated, [a]lthough [VGTs] mark has been refused registration, [VGT] may respond to

the refusal(s) by submitting evidence and arguments in support of registration. (Id.)

61.

Despite an opportunity to do so, VGT did not substantively respond to the

USPTOs Refusal and VGT did not attempt to argue against the finding of likelihood of

confusion between its application for EASY MONEY JACKPOT and Bally Gamings

trademarks for DOUBLE EASY MONEY and SUPER EASY MONEY. (Exhibit R.) Instead,

VGT expressly abandoned the VGT Application on August 1, 2016. (Id.)

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62.

After the USPTOs Refusal of VGTs Application for EASY MONEY

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JACKPOT, and after VGT and Aristocrat Leisure had notice of the Bally Gaming Trademarks,

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VGT nonetheless filed additional intent-to-use trademark applications for POLAR HIGH

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ROLLER EASY MONEY JACKPOT, HOT RED RUBY EASY MONEY JACKPOT, LUCKY

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DUCKY EASY MONEY JACKPOT, and MR. MONEY BAGS EASY MONEY JACKPOT all

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for intended use in connection with gaming devices, namely, gaming machines, bingo

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machines, with or without video output (the Additional VGT Applications). (Exhibits S-V.)

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63.

The USPTO has refused all of the Additional VGT Applications because it found

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a likelihood of confusion between the Additional VGT Applications and Bally Gamings 885

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Registration for DOUBLE EASY MONEY and Bally Gamings 131 Registration for SUPER

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EASY MONEY. (Exhibits W-Z.)

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COUNT I PATENT INFRINGEMENT UNDER 35 U.S.C. 271

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THE 169 PATENT

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64.

Bally Gaming incorporates the allegations in the preceding paragraphs as if fully

set forth herein.


65.

Bally Gaming has never licensed or permitted ATI or Aristocrat Leisure to

practice any of the legal rights granted under the 169 Patent.
66.

Without authorization from Bally Gaming, ATI, as controlled and directed by

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Aristocrat Leisure, has made, used, offered for sale, sold, and/or imported in or into the United

States, and continues to make, use, offer for sale, sell, and/or import in or into the United States,

at least the infringing ARC Products having designs that infringe the 169 Patent.

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67.

By reason of their infringement of the 169 Patent, ATI and Aristocrat Leisure

have caused and continue to cause Bally Gaming to suffer damage and irreparable harm.
68.

Bally Gaming has no adequate remedy at law for ATIs and Aristocrat Leisures

infringement of the 169 Patent.


69.

On information and belief, ATIs and Aristocrat Leisures infringement of the

169 Patent will continue unless enjoined by this Court.

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COUNT II PATENT INFRINGEMENT UNDER 35 U.S.C. 271

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THE 875 PATENT

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70.

Bally Gaming incorporates the allegations in the preceding paragraphs as if fully

set forth herein.


71.

Bally Gaming has never licensed or permitted ATI or Aristocrat Leisure to

practice any of the legal rights granted under the 875 Patent.
72.

Without authorization from Bally Gaming, ATI, as controlled and directed by

17

Aristocrat Leisure, has made, used, offered for sale, sold, and/or imported in or into the United

18

States, and continues to make, use, offer for sale, sell, and/or import in or into the United States,

19

at least the infringing Sharknado Product having designs that infringe the 875 Patent.

20
21
22
23
24
25

73.

By reason of their infringement of the 875 Patent, ATI and Aristocrat Leisure

have caused and continue to cause Bally Gaming to suffer damage and irreparable harm.
74.

Bally Gaming has no adequate remedy at law for ATIs and Aristocrat Leisures

infringement of the 875 Patent.


75.

On information and belief, ATIs and Aristocrat Leisures infringement of the

875 Patent will continue unless enjoined by this Court.

26
27

19

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 20 of 26

COUNT III PATENT INFRINGEMENT UNDER 35 U.S.C. 271

THE 364 PATENT

3
4
5
6
7

76.

Bally Gaming incorporates the allegations in the preceding paragraphs as if fully

set forth herein.


77.

Bally Gaming has never licensed or permitted ATI or Aristocrat Leisure to

practice any of the legal rights granted under the 364 Patent.
78.

Without authorization from Bally Gaming, ATI, as controlled and directed by

Aristocrat Leisure, has made, used, offered for sale, sold, and/or imported in or into the United

States, and continues to make, use, offer for sale, sell, and/or import in or into the United States,

10
11
12
13
14
15
16
17
18
19
20

at least the infringing Sharknado Product having designs that infringe the 364 Patent.
79.

By reason of their infringement of the 364 Patent, ATI and Aristocrat Leisure

have caused and continue to cause Bally Gaming to suffer damage and irreparable harm.
80.

Bally Gaming has no adequate remedy at law for ATIs and Aristocrat Leisures

infringement of the 364 Patent.


81.

On information and belief, ATIs and Aristocrat Leisures infringement of the

875 Patent will continue unless enjoined by this Court.


COUNT IV TRADEMARK INFRINGEMENT UNDER 15 U.S.C. 1114
82.

Bally Gaming incorporates the allegations in the preceding paragraphs as if fully

set forth herein.


83.

VGT, as controlled and directed by Aristocrat Leisure, has knowingly used and

21

continues to use in commerce the Bally Gaming Trademarks and colorable imitations thereof in

22

connection with the sale, offering for sale, distribution, and/or advertising of gaming machines,

23

including at least the VGT Infringing Products, in violation of 15 U.S.C. 1114.

24

84.

VGT, as controlled and directed by Aristocrat Leisure, has used the Bally Gaming

25

Trademarks and colorable imitations thereof with the knowledge of, and the intent to call to mind

26

and create a likelihood of confusion with regard to the Bally Gaming Trademarks.

27

85.

Bally Gaming has given VGT and Aristocrat Leisure notice of its Bally Gaming

20

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 21 of 26

Trademarks.

Trademarks and colorable imitations thereof.

86.

VGT and Aristocrat Leisure, nonetheless, continue to use the Bally Gaming

VGTs use of the Bally Gaming Trademarks and colorable imitations thereof, as

controlled and directed by Aristocrat Leisure, constitutes trademark infringement, is likely to

confuse, mislead, or deceive customers, purchasers, and members of the general public, and is

likely to cause such people to believe in error that VGTs gaming machines have been

authorized, sponsored, approved, endorsed, or licensed by Bally Gaming or that VGT or

Aristocrat Leisure is in some way affiliated with Bally Gaming.

87.

Bally Gaming has no control over the nature and quality of the goods VGT or

10

Aristocrat Leisure offer, and Bally Gamings reputation and goodwill will be damaged and the

11

value of the Bally Gaming Trademarks jeopardized by VGTs and Aristocrat Leisures

12

continued use of the Bally Gaming Trademarks and colorable imitations thereof. Because of the

13

likelihood of confusion between VGTs and Aristocrat Leisures marks and the Bally Gaming

14

Trademarks, any defects, objections, or faults found with VGTs and Aristocrat Leisures

15

products will negatively reflect upon and injure the reputation that Bally Gaming has established

16

for the products it offers in connection with the Bally Gaming Trademarks.

17

88.

VGTs and Aristocrat Leisures acts alleged above have caused, and if not

18

enjoined will continue to cause, irreparable and continuing harm to Bally Gamings trademarks,

19

business, reputation, and goodwill. Bally Gaming has no adequate remedy at law as monetary

20

damages are inadequate to compensate Bally Gaming for the injuries caused by VGT and

21

Aristocrat Leisure.

22

89.

VGTs and Aristocrat Leisures infringement of Bally Gamings registered

23

trademarks is deliberate, willful, fraudulent and without any extenuating circumstances, and

24

constitutes a knowing use of the Bally Gaming Trademarks, and an exceptional case within the

25

meaning of 15 U.S.C. 1117(b).

26
27

90.

Bally Gaming is entitled to injunctive relief and Bally Gaming is also entitled to

recover VGTs and Aristocrat Leisures profits, actual damages, enhanced profits and damages,

21

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 22 of 26

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

costs, and reasonable attorney fees under 15 U.S.C. 1114, 1116, and 1117.
COUNT V FALSE DESIGNATION OF ORIGIN / UNFAIR COMPETITION
UNDER 15 U.S.C. 1125
91.

Bally Gaming incorporates the allegations in the preceding paragraphs as if fully

set forth herein.


92.

VGT, as controlled and directed by Aristocrat Leisure, has used, and continues to

use, in commerce the Bally Gaming Trademarks and colorable imitations thereof, as described in
this Complaint, which has caused and is likely to cause confusion, deception, and mistake by
creating the false and misleading impression that VGTs and Aristocrat Leisures products
bearing the Bally Gaming Trademarks and colorable imitations thereof are manufactured or
distributed by Bally Gaming, are affiliated, connected, or associated with Bally Gaming, or have
the sponsorship, endorsement, or approval of Bally Gaming.
93.

VGT, as controlled and directed by Aristocrat Leisure, has made false

representations, false descriptions, and false designations of Bally Gamings goods in violation
of 15 U.S.C. 1125(a). VGTs activities, as controlled and directed by Aristocrat Leisure, have
caused and, unless enjoined by this Court, will continue to cause a likelihood of confusion and
deception of members of the trade and public, as well as injury to Bally Gamings goodwill and
reputation as symbolized by the Bally Gaming Trademarks, for which Bally Gaming has no
adequate remedy at law.
94.

VGTs and Aristocrat Leisures actions demonstrate an intentional, willful, and

malicious intent to trade on the goodwill associated with the Bally Gaming Trademarks, to the
irreparable injury of Bally Gaming.
95.

VGTs and Aristocrat Leisures conduct has caused, and is likely to continue

causing, substantial injury to Bally Gaming. Bally Gaming is entitled to injunctive relief and to
recover VGTs and Aristocrat Leisures profits, actual damages, enhanced profits and damages,
costs and reasonable attorneys fees under 15 U.S.C. 1125(a), 1116 and 1117.

27

22

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 23 of 26

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

COUNT VI COMMON LAW TRADEMARK INFRINGEMENT AND UNFAIR


COMPETITION
96.

set forth herein.


97.

20
21

98.

24
25
26
27

VGTs use of the Bally Gaming Trademarks and colorable imitations thereof, as

controlled and directed by Aristocrat Leisure, infringes upon Bally Gamings interest in common
law trademark rights in the Bally Gaming Trademarks and is likely to cause confusion, mistake,
or deception among consumers, who will believe that VGTs and Aristocrat Leisures products
originate from, are affiliated with, or are endorsed by Bally Gaming when, in fact, they are not.
99.

As a direct and proximate result of VGTs and Aristocrat Leisures infringements

Bally Gaming has suffered, and will continue to suffer, monetary loss and irreparable injury to
its business, reputation, and goodwill.
100.

In addition to monetary damages, Bally Gaming is entitled to permanent

injunctive relief preventing VGTs and Aristocrat Leisures continued infringement of Bally
Gamings rights in the Bally Gaming Trademarks.
DEMAND FOR JURY TRIAL
101.

Pursuant to Federal Rule of Civil Procedure 38 and the Seventh Amendment to

the Constitution of the United States of America, Bally Gaming hereby demands a trial by jury
on all issues raised in this action that are so triable.
PRAYER FOR RELIEF

22
23

By virtue of having used and continuing to use the Bally Gaming Trademarks,

Bally Gaming has acquired common law trademark rights in the marks.

18
19

Bally Gaming incorporates the allegations in the preceding paragraphs as if fully

WHEREFORE, Bally Gaming prays that this Court award to it the following relief:
A.

Judgment that ATI and Aristocrat Leisure have infringed the Bally Gaming

Patents in violation of 35 U.S.C. 271;


B.

A permanent injunction against further infringement of the Bally Gaming Patents

and colorable imitations thereof by ATI and Aristocrat Leisure, their officers, agents, servants,

23

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 24 of 26

1
2

employees, and attorneys, and all others in active concert or participation with any of them;
C.

An award of damages adequate to compensate Bally Gaming for the patent

infringements that have occurred pursuant to 35 U.S.C. 284, or an award of ATIs and

Aristocrat Leisures profits from its infringements pursuant to 35 U.S.C. 289, whichever is

greater, together with prejudgment interest and costs;

6
7
8

D.

An assessment of costs, including reasonable attorney fees and expenses, pursuant

to 35 U.S.C. 285, with prejudgment interest;


E.

Judgment that VGT and Aristocrat Leisure have willfully infringed the Bally

Gaming Trademarks in violation of 15 U.S.C. 1114, willfully used false designations of

10

origin/unfair competition in violation of 15 U.S.C. 1125(a), and willfully violated Bally

11

Gamings common law rights in the Bally Gaming Trademarks;

12

F.

A permanent injunction against further infringement, false designation of origin,

13

and unfair competition of the Bally Gaming Trademarks and colorable imitations thereof by

14

VGT and Aristocrat Leisure, their officers, agents, servants, employees, and attorneys, and all

15

others in active concert or participation with any of them;

16

G.

An award of VGTs and Aristocrat Leisures profits, actual damages, enhanced

17

profits and damages, costs, and reasonable attorney fees under 15 U.S.C. 1114, 1116, and

18

1117 for VGTs and Aristocrat Leisures trademark infringements; and

19

H.

Such other and further relief as this Court deems just and proper.

20
21
22
23
24
25
26
27

24

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 25 of 26

1
2
3
4
5
6
7
8
9
10

Dated: October 7, 2016

/s/ Timothy C. Meece


J. Randall Jones (Nevada # 1927)
Spencer H. Gunnerson (Nevada Bar # 8810)
KEMP, JONES & COULTHARD, LLP
3800 Howard Hughes Pkwy, 17th Floor
Las Vegas, Nevada 89169
Tel: (702) 385-6000
Timothy C. Meece
Michael J. Harris
Audra C. Eidem Heinze
BANNER & WITCOFF, LTD.
Ten South Wacker Drive, Suite 3000
Chicago, Illinois 60606-7407
Tel: (312) 463-5000
Attorneys for Plaintiff Bally Gaming, Inc.

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

25

Case 2:16-cv-02359 Document 1 Filed 10/10/16 Page 26 of 26

INDEX OF EXHIBITS TO COMPLAINT

1
2
3
4
5
6
7
8
9
10
11
12
13
14

Exhibit
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q

15
16
17

R
S

18

19

20
21

V
W

22
23

24

25

26

Description
U.S. Patent No. RE46,169
U.S. Patent No. D714,875
U.S. Patent No. D715,364
U.S. Trademark Registration No. 3,004,885 for DOUBLE EASY MONEY
U.S. Trademark Registration No. 3,399,131 for SUPER EASY MONEY
Aristocrat Leisure Limiteds 2015 Annual Report
Nevada Secretary of State report for Aristocrat Technologies, Inc.
Press Release re 2016 Global Gaming Expo
Article re 12th Annual Gaming & Technology Awards
Press Release re 8th Annual Slot Floor Technology Awards
Article re Casino Journal magazines Top 20 Most Innovative Gaming
Technology Products of 2013
Press Release re Casino Enterprise Management magazines 2014
Hospitality Operations Technology Awards
Press Release re 13th Annual Gaming & Technology Awards
Article re Casino Journal magazines Top 20 Most Innovative Gaming
Technology Products for 2014
Press Release re EASY MONEY JACKPOT
U.S. Trademark Application Serial No. 86525799 for EASY MONEY
JACKPOT
USPTO Office Action dated February 2, 2016, refusing U.S. Trademark
Application Serial No. 86525799 for EASY MONEY JACKPOT
Notice of Abandonment of U.S. Trademark Application Serial No.
86525799 for EASY MONEY JACKPOT
U.S. Trademark Application Serial No. 86958109 for POLAR HIGH
ROLLER EASY MONEY JACKPOT
U.S. Trademark Application Serial No. 86958118 for HOT RED RUBY
EASY MONEY JACKPOT
U.S. Trademark Application Serial No. 86958097 for LUCKY DUCKY
EASY MONEY JACKPOT
U.S. Trademark Application Serial No. 86958093 for MR. MONEY BAGS
EASY MONEY JACKPOT
USPTO Office Action dated July 14, 2016, refusing U.S. Trademark
Application Serial No. 86958109
USPTO Office Action dated July 14, 2016, refusing U.S. Trademark
Application Serial No. 86958118
USPTO Office Action dated June 1, 2016, refusing U.S. Trademark
Application Serial No. 86958097
USPTO Office Action dated June 1, 2016, refusing U.S. Trademark
Application Serial No. 86958093

27

26

Case 2:16-cv-02359 Document 1-1 Filed 10/10/16 Page 1 of 2

CIVIL COVER SHEET

JS 44 (Rev. 11/15)

The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS

DEFENDANTS

BALLY GAMING, INC.

ARISTOCRAT TECHNOLOGIES, INC.,


VIDEO GAMING TECHNOLOGIES, INC., AND ARISTOCRAT
LEISURE LIMITED

Clark County, NV

(b) County of Residence of First Listed Plaintiff

County of Residence of First Listed Defendant

(EXCEPT IN U.S. PLAINTIFF CASES)


NOTE:

(c) Attorneys (Firm Name, Address, and Telephone Number)

(IN U.S. PLAINTIFF CASES ONLY)


IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

Attorneys (If Known)

J. Randall Jones; Spencer H. Gunnerson; KEMP, JONES &


COULTHARD, LLP; 3800 Howard Hughes Pkwy, 17th Floor, Las Vegas,
NV 89169 Telephone: (702) 385-6000

II. BASIS OF JURISDICTION (Place an X in One Box Only)


1

U.S. Government
Plaintiff

Federal Question
(U.S. Government Not a Party)

U.S. Government
Defendant

Diversity
(Indicate Citizenship of Parties in Item III)

III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an X in One Box for Plaintiff


(For Diversity Cases Only)
PTF
Citizen of This State
1

DEF
1

and One Box for Defendant)


PTF
DEF
Incorporated or Principal Place
4
4
of Business In This State

Citizen of Another State

Incorporated and Principal Place


of Business In Another State

Citizen or Subject of a
Foreign Country

Foreign Nation

IV. NATURE OF SUIT (Place an X in One Box Only)


CONTRACT

TORTS

110 Insurance
120 Marine
130 Miller Act
140 Negotiable Instrument
150 Recovery of Overpayment
& Enforcement of Judgment
151 Medicare Act
152 Recovery of Defaulted
Student Loans
(Excludes Veterans)
153 Recovery of Overpayment
of Veterans Benefits
160 Stockholders Suits
190 Other Contract
195 Contract Product Liability
196 Franchise

REAL PROPERTY
210 Land Condemnation
220 Foreclosure
230 Rent Lease & Ejectment
240 Torts to Land
245 Tort Product Liability
290 All Other Real Property

PERSONAL INJURY
310 Airplane
315 Airplane Product
Liability
320 Assault, Libel &
Slander
330 Federal Employers
Liability
340 Marine
345 Marine Product
Liability
350 Motor Vehicle
355 Motor Vehicle
Product Liability
360 Other Personal
Injury
362 Personal Injury Medical Malpractice
CIVIL RIGHTS
440 Other Civil Rights
441 Voting
442 Employment
443 Housing/
Accommodations
445 Amer. w/Disabilities Employment
446 Amer. w/Disabilities Other
448 Education

FORFEITURE/PENALTY

PERSONAL INJURY
365 Personal Injury Product Liability
367 Health Care/
Pharmaceutical
Personal Injury
Product Liability
368 Asbestos Personal
Injury Product
Liability
PERSONAL PROPERTY
370 Other Fraud
371 Truth in Lending
380 Other Personal
Property Damage
385 Property Damage
Product Liability
PRISONER PETITIONS
Habeas Corpus:
463 Alien Detainee
510 Motions to Vacate
Sentence
530 General
535 Death Penalty
Other:
540 Mandamus & Other
550 Civil Rights
555 Prison Condition
560 Civil Detainee Conditions of
Confinement

625 Drug Related Seizure


of Property 21 USC 881
690 Other

BANKRUPTCY
422 Appeal 28 USC 158
423 Withdrawal
28 USC 157
PROPERTY RIGHTS
820 Copyrights
830 Patent
840 Trademark

LABOR
710 Fair Labor Standards
Act
720 Labor/Management
Relations
740 Railway Labor Act
751 Family and Medical
Leave Act
790 Other Labor Litigation
791 Employee Retirement
Income Security Act

SOCIAL SECURITY
861 HIA (1395ff)
862 Black Lung (923)
863 DIWC/DIWW (405(g))
864 SSID Title XVI
865 RSI (405(g))

FEDERAL TAX SUITS


870 Taxes (U.S. Plaintiff
or Defendant)
871 IRSThird Party
26 USC 7609

IMMIGRATION
462 Naturalization Application
465 Other Immigration
Actions

OTHER STATUTES
375 False Claims Act
376 Qui Tam (31 USC
3729(a))
400 State Reapportionment
410 Antitrust
430 Banks and Banking
450 Commerce
460 Deportation
470 Racketeer Influenced and
Corrupt Organizations
480 Consumer Credit
490 Cable/Sat TV
850 Securities/Commodities/
Exchange
890 Other Statutory Actions
891 Agricultural Acts
893 Environmental Matters
895 Freedom of Information
Act
896 Arbitration
899 Administrative Procedure
Act/Review or Appeal of
Agency Decision
950 Constitutionality of
State Statutes

V. ORIGIN (Place an X in One Box Only)


1 Original
Proceeding

2 Removed from
State Court

Remanded from
Appellate Court

4 Reinstated or
Reopened

5 Transferred from
Another District
(specify)

6 Multidistrict
Litigation

Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):

35 U.S.C. 100 et seq.

VI. CAUSE OF ACTION Brief description of cause:

Patent Infringement; Trademark Infringement

CHECK IF THIS IS A CLASS ACTION


VII. REQUESTED IN
UNDER RULE 23, F.R.Cv.P.
COMPLAINT:
VIII. RELATED CASE(S)
(See instructions):
IF ANY
JUDGE
DATE

CHECK YES only if demanded in complaint:


Yes
No
JURY DEMAND:

DEMAND $

DOCKET NUMBER

SIGNATURE OF ATTORNEY OF RECORD

/s/ Spencer H. Gunnerson

10/10/2016
FOR OFFICE USE ONLY
RECEIPT #

AMOUNT

Print

APPLYING IFP

Save As...

JUDGE

MAG. JUDGE

Reset

JS 44 Reverse (Rev. 11/15)

Case 2:16-cv-02359 Document 1-1 Filed 10/10/16 Page 2 of 2

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44


Authority For Civil Cover Sheet
The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I.(a)

(b)

(c)

Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".

II.

Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X"
in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)

III.

Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
section for each principal party.

IV.

Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.

V.

Origin. Place an "X" in one of the six boxes.


Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
When the petition for removal is granted, check this box.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407.
When this box is checked, do not check (5) above.

VI.

Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service

VII.

Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.

VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.
Date and Attorney Signature. Date and sign the civil cover sheet.

Case 2:16-cv-02359 Document 1-2 Filed 10/10/16 Page 1 of 2


AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT


for the

District
of Nevada
__________
District
of __________
BALLY GAMING, INC.

Plaintiff(s)

v.
ARISTOCRAT TECHNOLOGIES, INC.,
VIDEO GAMING TECHNOLOGIES, INC., AND
ARISTOCRAT LEISURE LIMITED
Defendant(s)

)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No.

SUMMONS IN A CIVIL ACTION


To: (Defendants name and address) ARISTOCRAT LEISURE LIMITED
85 Epping Road
North Ryde NSW 2113, Australia

A lawsuit has been filed against you.


Within 21 days after service of this summons on you (not counting the day you received it) or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiffs attorney,
whose name and address are:
Spencer H. Gunnerson
KEMP, JONES & COULTHARD, LLP
3800 Howard Hughes Pkwy, 17th Floor
Las Vegas, Nevada 89169

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.

CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk

Case 2:16-cv-02359 Document 1-2 Filed 10/10/16 Page 2 of 2


AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No.


PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for (name of individual and title, if any)
was received by me on (date)

I personally served the summons on the individual at (place)


on (date)

; or

I left the summons at the individuals residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date)

, and mailed a copy to the individuals last known address; or

I served the summons on (name of individual)

, who is

designated by law to accept service of process on behalf of (name of organization)


on (date)

; or

I returned the summons unexecuted because

; or

Other (specify):
.
My fees are $

for travel and $

for services, for a total of $

0.00

I declare under penalty of perjury that this information is true.

Date:
Servers signature

Printed name and title

Servers address

Additional information regarding attempted service, etc:

Print

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Case 2:16-cv-02359 Document 1-3 Filed 10/10/16 Page 1 of 2


AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT


for the

District
of Nevada
__________
District
of __________
BALLY GAMING, INC.

Plaintiff(s)

v.
ARISTOCRAT TECHNOLOGIES, INC.,
VIDEO GAMING TECHNOLOGIES, INC., AND
ARISTOCRAT LEISURE LIMITED
Defendant(s)

)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No.

SUMMONS IN A CIVIL ACTION


To: (Defendants name and address) ARISTOCRAT TECHNOLOGIES, INC.
7230 Amigo Street
Las Vegas, Nevada 89119

A lawsuit has been filed against you.


Within 21 days after service of this summons on you (not counting the day you received it) or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiffs attorney,
whose name and address are:
Spencer H. Gunnerson
KEMP, JONES & COULTHARD, LLP
3800 Howard Hughes Pkwy, 17th Floor
Las Vegas, Nevada 89169

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.

CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk

Case 2:16-cv-02359 Document 1-3 Filed 10/10/16 Page 2 of 2


AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No.


PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for (name of individual and title, if any)
was received by me on (date)

I personally served the summons on the individual at (place)


on (date)

; or

I left the summons at the individuals residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date)

, and mailed a copy to the individuals last known address; or

I served the summons on (name of individual)

, who is

designated by law to accept service of process on behalf of (name of organization)


on (date)

; or

I returned the summons unexecuted because

; or

Other (specify):
.
My fees are $

for travel and $

for services, for a total of $

0.00

I declare under penalty of perjury that this information is true.

Date:
Servers signature

Printed name and title

Servers address

Additional information regarding attempted service, etc:

Print

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Reset

Case 2:16-cv-02359 Document 1-4 Filed 10/10/16 Page 1 of 2


AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT


for the

District
of Nevada
__________
District
of __________
BALLY GAMING, INC.

Plaintiff(s)

v.
ARISTOCRAT TECHNOLOGIES, INC.,
VIDEO GAMING TECHNOLOGIES, INC., AND
ARISTOCRAT LEISURE LIMITED
Defendant(s)

)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No.

SUMMONS IN A CIVIL ACTION


To: (Defendants name and address) VIDEO GAMING TECHNOLOGIES, INC.
308 Mallory Station Road
Franklin, Tennessee 37067

A lawsuit has been filed against you.


Within 21 days after service of this summons on you (not counting the day you received it) or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiffs attorney,
whose name and address are:
Spencer H. Gunnerson
KEMP, JONES & COULTHARD, LLP
3800 Howard Hughes Pkwy, 17th Floor
Las Vegas, Nevada 89169

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.

CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk

Case 2:16-cv-02359 Document 1-4 Filed 10/10/16 Page 2 of 2


AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No.


PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for (name of individual and title, if any)
was received by me on (date)

I personally served the summons on the individual at (place)


on (date)

; or

I left the summons at the individuals residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date)

, and mailed a copy to the individuals last known address; or

I served the summons on (name of individual)

, who is

designated by law to accept service of process on behalf of (name of organization)


on (date)

; or

I returned the summons unexecuted because

; or

Other (specify):
.
My fees are $

for travel and $

for services, for a total of $

0.00

I declare under penalty of perjury that this information is true.

Date:
Servers signature

Printed name and title

Servers address

Additional information regarding attempted service, etc:

Print

Save As...

Reset

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 1 of 10

EXHIBIT A
U.S. Patent No. RE46,169

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 2 of 10

Exhibit A, pg. 1

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 3 of 10

Exhibit A, pg. 2

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 4 of 10

Exhibit A, pg. 3

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 5 of 10

Exhibit A, pg. 4

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 6 of 10

Exhibit A, pg. 5

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 7 of 10

Exhibit A, pg. 6

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 8 of 10

Exhibit A, pg. 7

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 9 of 10

Exhibit A, pg. 8

Case 2:16-cv-02359 Document 1-5 Filed 10/10/16 Page 10 of 10

Exhibit A, pg. 9

Case 2:16-cv-02359 Document 1-6 Filed 10/10/16 Page 1 of 6

EXHIBIT B
U.S. Patent No. D714,875

Case 2:16-cv-02359 Document 1-6 Filed 10/10/16 Page 2 of 6

Exhibit B, pg. 1

Case 2:16-cv-02359 Document 1-6 Filed 10/10/16 Page 3 of 6

Exhibit B, pg. 2

Case 2:16-cv-02359 Document 1-6 Filed 10/10/16 Page 4 of 6

Exhibit B, pg. 3

Case 2:16-cv-02359 Document 1-6 Filed 10/10/16 Page 5 of 6

Exhibit B, pg. 4

Case 2:16-cv-02359 Document 1-6 Filed 10/10/16 Page 6 of 6

Exhibit B, pg. 5

Case 2:16-cv-02359 Document 1-7 Filed 10/10/16 Page 1 of 6

EXHIBIT C
U.S. Patent No. D715,364

Case 2:16-cv-02359 Document 1-7 Filed 10/10/16 Page 2 of 6

Exhibit C, pg. 1

Case 2:16-cv-02359 Document 1-7 Filed 10/10/16 Page 3 of 6

Exhibit C, pg. 2

Case 2:16-cv-02359 Document 1-7 Filed 10/10/16 Page 4 of 6

Exhibit C, pg. 3

Case 2:16-cv-02359 Document 1-7 Filed 10/10/16 Page 5 of 6

Exhibit C, pg. 4

Case 2:16-cv-02359 Document 1-7 Filed 10/10/16 Page 6 of 6

Exhibit C, pg. 5

Case 2:16-cv-02359 Document 1-8 Filed 10/10/16 Page 1 of 2

EXHIBIT D
U.S. Trademark Registration No. 3,004,885 for
DOUBLE EASY MONEY

Case 2:16-cv-02359 Document 1-8 Filed 10/10/16 Page 2 of 2

Exhibit D, pg. 1

Case 2:16-cv-02359 Document 1-9 Filed 10/10/16 Page 1 of 2

EXHIBIT E
U.S. Trademark Registration No. 3,399,131 for
SUPER EASY MONEY

Case 2:16-cv-02359 Document 1-9 Filed 10/10/16 Page 2 of 2

Exhibit E, pg. 1

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 1 of 136

EXHIBIT F
Aristocrat Leisure Limiteds 2015 Annual Report

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 2 of 136

20
15
Exhibit F, pg. 1

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 3 of 136

Contents

2015 Annual Report


This 2015 Aristocrat Leisure Limited Annual Report for
the nancial year ended 30 September 2015 complies
with reporting requirements and contains statutory
nancial statements.
This document is not a concise report prepared
under section 314 (2) of the Corporations Act. The
Aristocrat Group has not prepared a concise report
for the 2015 nancial year.
2015 Online Business Review
The 2015 Online Business Review contains reports
from the Chairman and Managing Director on the
Groups business and operational highlights, an
overview of Group strategy and its business initiatives.

2 Company Prole and Key Dates


3 Directors Report
8 Review of Operations
24 Remuneration Report
53 Auditors Independence Declaration
54 Nevada Information Statement
56 Five Year Summary
58 Financial Statements
127 Independent Auditors Report
129 Shareholder Information
133 Corporate Directory

The 2015 Online Business Review can be found on


the Groups website: www.aristocratgaming.com.
2016 Annual General Meeting
The 2016 Annual General Meeting will be held at
11.00am on Wednesday, 24 February 2016 at
The Aristocrat Head Ofce, Building A, Pinnacle
Ofce Park, 85 Epping Road, North Ryde, 2113.
Details of the business of the meeting will be
contained in the notice of Annual General Meeting,
to be sent to shareholders separately.
2015 Corporate Governance Statement
The 2015 Corporate Governance Statement can
be found on the Groups website:
www.aristocratgaming.com.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 2

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 4 of 136

Company Prole
Aristocrat Leisure Limited (ASX: ALL) is a leading global provider of gaming solutions. The Company is licensed by
over 200 regulators and its products and services are available in over 90 countries around the world. Aristocrat
offers a diverse range of products and services including Class II and Class III gaming machines and casino
management systems. The Group also operates within the on-line social gaming and real money wager markets.
For further information visit the Groups website at www.aristocratgaming.com.

Key Dates*
2015

Record date for Final 2015 Dividend

2 December 2015

Payment date for Final 2015 Dividend

18 December 2015

2016

2016 Annual General Meeting

24 February 2016

Interim Results Announcement (6 months ending 31 March 2016)

26 May 2016

Full Year Results Announcement (12 months ending 30 September 2016)

30 November 2016

*Dates subject to change.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 3

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 5 of 136

Directors Report
For the 12 months ended 30 September 2015
The Directors present their report together with the nancial statements of the Company and its subsidiaries (the
Group) for the 12 months ended 30 September 2015 (the nancial year). The information in this report is current as
at 25 November 2015 unless otherwise specied.
This Directors Report has been prepared in accordance with the requirements of Division 1 of part 2M.3 of the
Corporations Act 2001 (Cth) (the Act).
Review and results of operations
A review of the operations of the Group for the nancial year is set out in the Review of Operations which forms part
of this Directors Report.
Financial results
The reported result of the Group attributable to shareholders for the 12 months ended 30 September 2015 was a
prot of $186.4 million after tax (2014: loss of $16.4 million).
Further details regarding the nancial results of the Group are set out in the Review of Operations and nancial
statements.
Dividends
Since the end of the nancial year, the Directors have authorised the payment of a nal dividend of 9.0 cents (2014:
8.0 cents) per fully paid ordinary share. Details of the dividends paid and declared during the nancial year are set
out in Note 7 to the nancial statements.
Remuneration Report
Details of the remuneration policies in respect of the Groups Key Management Personnel are detailed in the
Remuneration Report which forms part of this Directors Report.
Sustainability
The sustainability section contained within the 2015 Online Business Review forms part of this Directors Report
and integrates a wider range of non-nancial management issues as the Group moves to improve its sustainable
reporting standards.
Directors particulars, experience and special responsibilities
Current Directors
The Directors of the Company throughout the nancial year and up to the date of this report are:
Director

Experience and other directorships

Special responsibilities

ID Blackburne
BSc (Hons),
MBA, PhD
Age 69

Nominated December 2009.


Appointed 17 September 2010.
Chairman, Recall Holdings Limited
Director, Teekay Corporation (listed on the NYSE)
Former Chairman, CSR Limited and Australian Nuclear
Science and Technology Organisation
Former Director, Suncorp-Metway Limited and
Symbion Health Limited
Former Managing Director, Caltex Australia Limited

Non-Executive Chairman

JR Odell
MBA
Age 57

Nominated December 2008. Appointed May 2009.


Former Managing Director, Australia, Asia and Pacic,
Fosters Group Limited
Former Executive, Allied Domecq in the UK and
Asia Pacic
Former Managing Director, Lyons Tetley Australia

Managing Director and


Chief Executive Ofcer

Member of each Board


Committee

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 4

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 6 of 136

Directors Report

Current Directors continued


Director

Experience and other directorships

Special responsibilities

DCP Banks
BBus (Mgt)
Age 63

Nominated October 2010. Appointed 12 July 2011.


Former Group Chief Operating Ofcer of Galaxy
Entertainment Group (Macau)
Former Chief Executive (Casinos Division) of
Tabcorp Holdings Limited
Former Chief Executive Ofcer of Star City
Holdings Limited
Former President, Australasian Casinos Association
Former Director, Australian Gaming Council

Chair, Audit Committee

KM Conlon
BEc, MBA
Age 52

Nominated January 2014. Appointed 21 February 2014.


Director of REA Group Limited and Lynas
Corporation Limited
Member, Chief Executive Women
Former President, NSW Council and National Board,
Australian Institute of Company Directors
Former Partner and Director, Boston Consulting Group
(BCG), and former Director of CSR Limited

Chair, Human Resources and


Remuneration Committee

RA Davis
BEc (Hons),
M Philosophy
Age 64

Member, Audit Committee


Nominated November 2004. Appointed June 2005.
Chairman, Bank of Queensland Limited
Member, Human Resources
Director, Argo Investments Limited, AIG Australia Limited and Remuneration Committee
and Ardent Leisure Management Limited
Former Chairman, Centric Wealth Advisors Limited
and Charter Hall Ofce REIT
Former Director, Territory Insurance Ofce and Trust
Company Limited
Former Senior Executive, Citicorp and CitiGroup Inc
in the United States and Japan
Former Group Managing Director, ANZ Banking
Group Limited

RV Dubs
BSc (Hons),
Dr s Sc,
FTSE, FAICD
Age 63

Nominated December 2008. Appointed June 2009.


Director, ASC Pty Ltd and ANU Enterprise Pty Ltd
Former Chair, Space Industry Innovation Council
Former Deputy Vice-Chancellor (External Relations),
University of Technology Sydney
Former VP Operations, Thales ATM SA (France)
Former Director, Structural Monitoring Systems Plc,
Thales ATM Pty Limited, Thales ATM Inc (USA) and
Thales ATM Navigation GmbH (Germany)
Former Chairman, Thales ATM spA (Italy)

SW Morro
BA, Business
Administration
Age 57

Nominated December 2009. Appointed 17 December 2010. Lead US Director


Former Chief Operating Ofcer and President,
Member, Regulatory and
IGT Gaming Division
Compliance Committee

Member, Regulatory and


Compliance Committee

Member, Regulatory and


Compliance Committee

Chair, Regulatory and


Compliance Committee
Member, Audit Committee

Member, Human Resources


and Remuneration Committee

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 5

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 7 of 136

Directors Report

Directors attendance at Board and committee meetings during the nancial year
The attendance of members of the Board at Board meetings and attendance of members of committees at
committee meetings of which they are voting members is set out below.
(Meetings attended/held)
Human Resources
and Remuneration
Committee

Regulatory and
Compliance
Committee

5/5

Director

Board

Audit
Committee

ID Blackburne

12/12

4/4

4/4

JR Odell

12/12

DCP Banks

11/12

4/4

5/5

KM Conlon

12/12

4/4

5/5

RA Davis

12/12

4/4

4/4

SW Morro

12/12

4/4

5/5

RV Dubs

12/12

4/4

5/5

Company Secretary
Mrs A Korsanos was Company Secretary during the nancial year.
Principal activities
The principal activities of the Group during the nancial year were the design, development and distribution of
gaming content, platforms and systems. The Group also operates within the on-line social gaming and real money
wager markets. The Companys objective is to be the leading global provider of gaming solutions. There were no
signicant changes in the nature of those activities during the nancial year.
Signicant changes in the state of affairs
Except as outlined below and elsewhere in this Directors Report, there were no signicant changes in the state of
affairs of the Group during the nancial year.
Events after balance date
There has not arisen in the interval between the end of the nancial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect signicantly
the operations of the Group, the results of those operations, or the state of affairs of the Group, in future nancial
reporting periods.
Likely developments and expected results
Likely developments in the operations of the Group in future nancial years and the expected results of operations
are referred to in the Review of Operations which forms part of this Directors Report.
The Directors believe that disclosure of further information as to likely developments in the operations of the Group
and the likely results of those operations would, in their opinion, be speculative and/or prejudice the interests of
the Group.
Options over share capital
No options over Company shares were granted to executives or Directors during the nancial year. There were
no unissued shares or interests in the Company subject to options at the date of this Directors Report and no
Company shares or interests issued pursuant to exercised options during or since the end of the nancial year.
Indemnities and insurance premiums
The Companys Constitution provides that the Company will indemnify each ofcer of the Company against any
liability incurred by that ofcer in or arising out of the conduct of the business of the Company or in or arising out of
the discharge of that ofcers duties to the extent permitted by law.
An ofcer for the purpose of this provision includes any Director or Secretary of the Company or the Companys
subsidiaries, executive ofcers or employees of the Company or its subsidiaries and any person appointed as a
trustee by, or acting as a trustee at the request of, the Company, and includes former Directors.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 6

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 8 of 136

Directors Report

In accordance with the Companys Constitution,


the Company has entered into deeds of access,
indemnity and insurance and deeds of indemnity
for identity theft with each Director and nominated
ofcers of the Company. No amount has been paid
pursuant to those indemnities during the nancial year
to the date of this Directors Report.
The Company has paid a premium in respect of a
contract insuring ofcers of the Company and its
related bodies corporate against any liability incurred
by them arising out of the conduct of the business of
the Company or in or arising out of the discharge of
their duties. In accordance with normal commercial
practices, under the terms of the insurance contracts,
the details of the nature and extent of the liabilities
insured against and the amount of premiums paid
are condential.
Environmental regulation
The Groups operations have a limited impact on the
environment. The Group is subject to a number of
environmental regulations in respect of its integration
activities. The Company does not manufacture
gaming machines, it only integrates (assembles)
machines and systems in Australia, the USA,
Macau, the UK, South Africa and New Zealand.
The Company uses limited amounts of chemicals in
its assembly process. The Directors are not aware
of any breaches of any environmental legislation or
of any signicant environmental incidents during the
nancial year.
Based on current emission levels, the Company is
not required to register and report under the National
Greenhouse and Energy Reporting Act 2007 (Cth)
(NGER Act). However, the Company continues to
receive reports and monitors its position to ensure
compliance with the NGER Act.
The Company is committed to not only complying
with the various environmental laws to which
its operations are subject, but also to achieving
a high standard of environmental performance
across all its operations. The Company is aware
of, and continues to plan for, new Australian
regulatory requirements on climate change. It is
the Companys view that climate change does
not pose any signicant risks to its operations
in the short to medium term. Throughout the
Group, new programs and initiatives have been
introduced to ensure the Company is well
prepared for new regulatory regimes and to
reduce its carbon footprint.

Proceedings on behalf of the Company


No proceedings have been brought on behalf of the
Company under section 236 of the Act nor has any
application been made in respect of the Company
under section 237 of the Act.
Auditor
PricewaterhouseCoopers continues in ofce in
accordance with section 327 of the Act.
Non-audit services provided by the auditor
The Company, with the prior approval of the Chair
of the Audit Committee, may decide to employ
PricewaterhouseCoopers, the Companys auditor, on
assignments additional to its statutory audit duties
where the auditors expertise and experience with
the Company and/or the Group are important. The
Company has a Charter of audit independence which
species those non-audit services which cannot be
performed by the Company auditor. The Charter also
sets out the procedures which are required to be
followed prior to the engagement of the Companys
auditor for any non-audit related service.
Details of the amounts paid or payable to the
Companys auditor, for audit and non-audit services
provided during the nancial year, are set out in Note
29 to the nancial statements.
The Board of Directors has considered the position
and, in accordance with the advice received from
the Audit Committee, is satised that the provision
of the non-audit services as set out in Note 29 to the
nancial statements is compatible with the general
standard of independence for auditors imposed by
the Act for the following reasons:
All non-audit services have been reviewed by the
Audit Committee to ensure they do not impact the
impartiality and objectivity of the auditor.
None of the services undermine the general
principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the
auditors own work, acting in a management or a
decision-making capacity for the Company, acting
as advocate for the Company or jointly sharing
economic risk and rewards.
A copy of the auditors independence declaration is
attached to this Directors Report.
Loans to Directors and executives
No Director or executive held any loans with the
Company during the nancial year.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 7

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 9 of 136

Directors Report

Rounding of amounts to nearest thousand


dollars
The Company is of a kind referred to in Australian
Securities and Investments Commission Class Order
98/0100 dated 10 July 1998 (updated by Class Order
05/641 effective 28 July 2005 and Class Order 06/51
effective 31 January 2006) relating to the rounding
off of amounts in the Directors Report and the
nancial statements. Amounts in the Directors Report
and the nancial statements have been rounded off to
the nearest thousand dollars in accordance with that
Class Order.
This report is made in accordance with a resolution
of the Directors and is signed for and on behalf of the
Directors.

Dr ID Blackburne
Chairman
25 November 2015

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 8

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 10 of 136

Review of Operations
for the 12 months to 30 September 2015
Key performance indicators for the current period and prior period are set out below on a normalised basis
excluding signicant items and results of discontinued operations. Refer to page 13 for a reconciliation of statutory
prot to normalised prot after tax and before amortisation of acquired intangibles and details of signicant items
and discontinued operations.

A$ million

Constant
currency2
12 months to 12 months to 12 months to
30 Sept 2015 30 Sept 2015 30 Sept 2014

Variance vs 12 months
to 30 September 2014
Constant
currency2
%

Reported
%

Normalised results1
Total segment revenue from ordinary
activities

1,381.6

1,582.4

839.0

64.7

88.6

Earnings before interest, tax and


depreciation (EBITDA)

441.7

523.1

219.3

101.4

138.5

Earnings before interest, tax and


amortisation of acquired intangibles
(EBITA)

361.9

431.0

178.3

103.0

141.7

Prot after tax

158.2

191.5

130.2

21.5

47.1

Net prot after tax before amortisation


of acquired intangibles (NPATA)

194.2

236.1

132.0

47.1

78.9

Earnings per share (fully diluted)

24.9c

30.1c

22.8c

9.2

32.0

Earnings per share before amortisation


of acquired intangibles (fully diluted)

30.5c

37.1c

23.1c

32.0

60.6

Total dividend per share

17.0c

17.0c

16.0c

6.3

6.3

Prot after tax

177.6

186.4

(16.4)

n/a

n/a

Net prot after tax before amortisation


of acquired intangibles (NPATA)

213.6

231.0

(14.6)

n/a

n/a

14.5pts

Reported results

Balance sheet/cash ow
Net working capital/revenue

10.3%

9.0%

23.5%

13.2pts

Operating cash ow

369.5

437.6

158.8

132.7

175.6

Normalised operating cash ow1

379.4

449.3

164.4

130.8

173.3

Normalised operating cash ow


conversion1

195%

190%

125%

70.0pts

65.0pts

Closing (net debt)/cash

n/a

(1,450.6)

171.3

n/a

n/a

Gearing (net debt/consolidated EBITDA


as dened in Credit Agreement)

n/a

2.6

(0.8)

n/a

n/a

1.

Normalised results and operating cash ow are statutory prot (before and after tax) and operating cash ow, excluding the impact of certain
signicant items and discontinued operations. Signicant items are items of income or expense which are either individually or in aggregate,
material to Aristocrat and are either outside the ordinary course of business or part of the ordinary activities of the business but unusual
due to their size and nature. Discontinued operations relate to the Lotteries business which was sold on 29 September 2014 and the Japan
Pachislot business which was sold on 29 May 2015.

2.

Results for 12 months to 30 September 2015 adjusted for translational exchange rates using rates applying in 2014.

The information presented in this Review of Operations has not been audited in accordance with the Australian
Auditing Standards.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 9

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 11 of 136

Review of Operations

Group performance summary


Normalised prot after tax and before amortisation of acquired intangibles (NPATA) of $236.1 million for the period
represented a 78.9% increase (47.1% in constant currency) compared to $132.0 million in the prior corresponding
period. Revenue increased by 88.6% (64.7% in constant currency) due largely to the sustained performance
in North American Gaming Operations across both Class III and Class II with the acquisition of Video Gaming
Technologies Inc (VGT) completed on 20 October 2014, outstanding growth in the Australian outright sales
market and strengthening performance in Digital. Normalised fully diluted earnings per share before amortisation
of acquired intangibles of 37.1 cents represent a 60.6% increase on the prior corresponding period.
Normalised operating cash ow was higher than the prior corresponding period. The Group has continued to
invest in talent and technology in line with our strategy during the reporting period, with a particular focus on key
recurring revenue segments, and important outright sales markets.
Discontinued operations relate to the Lotteries business, sold in September 2014 and the Japan Pachislot
business, which was sold in May 2015.
The Groups performance between years is reconciled in the table below:
12 months to
30 September

A$ million

NPATA 2014

132.0

Americas

156.8 q

ANZ

18.7 q

Digital

19.4 q
1.2 q

International Class III


Corporate costs

(15.2) q

Group D&D expense

(38.6) q

Interest

(48.5) q

Income tax rate movement

(31.6) q
41.9 q

Foreign exchange movements


NPATA 2015

236.1

Strong growth in our North America business drove a $156.8 million improvement in post-tax prot compared
to the prior period, due to the inclusion of VGT Class II gaming operations, supported by improved outright
sales share and signicant share, fee per day (FPD) and prot growth from our Class III premium gaming
operations business.
Australia delivered signicant share gains across key markets driven by the top performing Helix cabinet and
strong performing new games. Digital delivered strong earnings growth due to continued success on Facebook
and the launch and growth of Heart of Vegas on mobile since the prior corresponding period.
Asia Pacic performance improved with strong sales into new Macau openings during the period.
The Groups strategic investments in talent and technology are delivering strong competitive product across all key
markets and segments in line with its strategy.
The Groups interest charge and effective tax rate (ETR) have both increased signicantly following the acquisition
of VGT.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 10

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 12 of 136

Review of Operations

Regional performance summary


Operational improvement continues as is evidenced
by the following key performance drivers across the
Groups core segments during this reporting period:
1. Americas
Signicant share and prot growth in the Class III
premium gaming operations segment with the
install base increasing 8.1% to 9,808 units, in a
at market.

Revenue enhancement and oor optimisation


initiatives in VGT Class II gaming operations
commenced in the second half of 2014 drove an
increase in average FPD of 7.5% to US$39.21.

Incremental ship share in the outright sales


segment, despite a declining market, on the
strength of an expanding product portfolio,
strong market penetration of the Helix cabinet
and the highly successful launch of the Arc
cabinet late in the year.

Continued market penetration of the OASIS


Onelink and OASIS HALo systems product
offerings into the OASIS install base and across
multiple platforms.

3. International Class III


Secured market leading share of new Macau
openings.

Good Fortune link with over 800 shipments


throughout the Asia Pacic region continues to
perform above oor in all venues.

Successful launch of the new Helix cabinet


throughout rest of world markets.

Strong interest across all markets for premium


content on new innovative cabinet forms like
Wonder Wheels, Behemoth, Arc Single and
Arc Double cabinets.

4. Digital
Continued growth in Product Madness protability
driven by growth of Heart of Vegas (HOV) on
Facebook and iOS, and the launch on Android
late in the period.

Daily active user (DAU) numbers averaged


799,840 and ended 1,089,584.

Overall average revenue per daily active user


(ARPDAU) was US 38c for the period.

2. Australia and New Zealand


Market leading ship share was achieved across
the region led by the key markets of NSW and
Queensland driven by a portfolio of games
which provides breadth of product categories and
depth of performing games. Share gains were
delivered across other markets as the new Helix
cabinet and proven performing game content
were introduced.

Since launch, the Helix cabinet has been the


top performing cabinet across the key markets
of NSW and Queensland. Performance has been
driven by both cabinet design and the quality of
supporting content. The breadth and depth of
content has also ensured strong performance
support for the Viridian WS cabinet.

In NSW, the share of units in the Top 50 has


increased from 64% to 76% and has increased in
Queensland from 19% to 64%.

Aristocrat again demonstrated market leadership


at the Australasian Gaming Expo showcasing new
innovative cabinets and content and the launch of
the Precinct bringing customers and the industry
together.

10

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 11

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 13 of 136

Review of Operations

Prot and loss


Results in the current period and prior corresponding period are at reported currency and normalised for signicant
items and discontinued operations. Segment prot is stated before amortisation of acquired intangibles.
Summary prot and loss
A$ million

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance
$

Variance
%

Segment revenue
Australia and New Zealand

314.1

223.8

90.3

40.3

Americas

980.4

459.7

520.7

113.3

International Class III

140.3

105.2

35.1

33.4

Digital
Total segment revenue

147.6

50.3

97.3

193.4

1,582.4

839.0

743.4

88.6

Segment prot
Australia and New Zealand

113.8

89.7

24.1

26.9

Americas

451.3

176.9

274.4

155.1

51.7

41.4

10.3

24.9

International Class III


Digital
Total segment prot

50.2

17.0

33.2

195.3

667.0

325.0

342.0

105.2

(191.4)

(121.2)

(70.2)

(57.9)

1.0

(5.1)

6.1

119.6

(45.6)

(20.4)

(25.2)

(123.5)

(236.0)

(146.7)

(89.3)

(60.9)

431.0

178.3

252.7

141.7

(70.2)

(2.4)

(67.8)

(2,825.0)

360.8

175.9

184.9

105.1

(81.3)

(8.0)

(73.3)

(916.3)

279.5

167.9

111.6

66.5
(133.4)

Unallocated expenses
Group D&D expense
Foreign exchange
Corporate
Total unallocated expenses
EBIT before amortisation of acquired intangibles
(EBITA)
Amortisation of acquired intangibles
EBIT
Interest
Prot before tax
Income tax

(88.0)

(37.7)

(50.3)

Prot after tax

191.5

130.2

61.3

47.1

Amortisation of acquired intangibles after tax

44.6

1.8

42.8

2,377.8

Prot after tax and before amortisation of


acquired intangibles (NPATA)

236.1

132.0

104.1

78.9

Aristocrat Leisure Limited Annual Report 2015

11

Exhibit F, pg. 12

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 14 of 136

Review of Operations

% of revenue

Key metrics

Variance

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Segment prot margin

Australia and New Zealand

Pts

36.2

40.1

(3.9)

Americas

46.0

38.5

7.5

International Class III

36.8

39.4

(2.6)

Digital

34.0

33.8

0.2

Overall segment prot margin

42.2

38.7

3.5

Group D&D expense

12.1

14.4

(2.3)

EBITA

27.2

21.3

5.9

NPATA

14.9

15.7

(0.8)

Effective tax rate (%)

31.5

22.5

9.0

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

Revenue by strategic segment


A$ million

Segment revenue
Gaming Operations

574.8

150.1

424.7

282.9

Digital

147.6

50.3

97.3

193.4

Class III Outright Sales and Other

860.0

638.6

221.4

34.7

1,582.4

839.0

743.4

88.6

Total segment revenue

% of revenue

Variance

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Share of segment revenue from recurring sources

45.7

23.9

Pts

21.8

Revenue
Segment revenue increased $743.4 million or 88.6% in reported currency (64.7% in constant currency). In addition
to VGT, which drove $357.2 million of the growth, revenue grew across all three of our strategic segments: Gaming
Operations; Digital; and Class III Outright Sales and Other.
The Class III premium gaming operations installed base grew 8.1% to 9,808.
In Class III Outright Sales, overall North American ship share increased circa 2.3 ppts, despite a contraction in
market size of approximately 11.4% compared to the prior corresponding period. Unit sales revenue was up 12.5%,
driven by the sales volume increase and an improvement in average selling price (ASP). In Latin America, revenue
in USD terms increased 43.5% due to growth in new unit sales volume combined with continued emphasis on
recurring revenue.
In Australia and New Zealand revenue increased by 40.3% to A$313.9 million in constant currency terms, due to
strong ship share gains across all key markets. ASP increased 19.0% as a result of a more favourable product mix
of high performing premium content and the release of the Helix cabinet across all markets.
In International Class III revenue was up 14.2% to A$120.1 million in constant currency terms, driven by growth in
Asia Pacic.
In Digital revenue increased by 145.3% to A$123.4 million in constant currency terms, primarily due to the launch
and growth of Heart of Vegas on mobile platforms.

12

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 13

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 15 of 136

Review of Operations

Earnings
Segment prot increased $342.0 million in reported currency, up 105.2% compared with the prior corresponding
period (77.8% in constant currency).
Consistent with revenue delivery, earnings were strengthened by the inclusion of VGT as well as growth across
our strategic segments, Class III premium gaming operations and Digital, both part of our increasing recurring
revenue footprint.
The Group continues to invest signicantly in better games through new talent and new technology, with ongoing
efciencies reinvested in core product development and capability. The Groups investment in D&D spend, as a
percentage of revenue, was 12.1% (12.4% on a constant currency basis) compared to 14.4% of revenues in the prior
corresponding period. Total reported spend increased $70.2 million or 57.9% (41.1% in constant currency).
Corporate costs increased by $19.1 million compared to the prior corresponding period mainly driven by higher
legal costs and variable employee compensation.
Amortisation of acquired intangibles increased by $67.8 million, driven by the intangibles recognised on the
acquisition of the VGT business.
Interest expense increased $73.3 million to $81.3 million reecting the cash interest and amortisation of upfront fees
on the US$1.3 billion Term Loan B facility drawn down on 20 October 2014 to fund the VGT acquisition.
The ETR for the reporting period was 31.5% compared to 22.5% in the prior corresponding period. The increase in
ETR is driven by mix of earnings particularly impacted by the acquisition of VGT.
Reconciliation of statutory prot to NPATA
A$ million

30 Sep 2015

30 Sep 2014

186.4

(16.4)

44.6

1.8

Reported prot after tax before amortisation of acquired intangibles


(Reported NPATA)

231.0

(14.6)

Add back (prot)/loss from discontinued operations Japan

(28.0)

87.9

Statutory prot/(loss) as reported in the nancial statements


Amortisation of acquired intangibles (tax effected)

Add back (prot)/loss from discontinued operations Lotteries


Add back net (prot)/loss from signicant items
Normalised Prot After Tax before amortisation of acquired intangibles
(Normalised NPATA)

(1.7)

45.6

34.8

13.1

236.1

132.0

Signicant items
12 months to 30 Sep 2015
A$ million

Contingent consideration related to acquisition of Product Madness

Before tax

After tax

(8.4)

(8.4)

Impairment of legacy inventory

(11.9)

(7.4)

Acquisition related transaction, integration and restructuring costs

(30.7)

(19.0)

Net loss from signicant items

(51.0)

(34.8)

Discontinued Operations: The Group sold the Lotteries business in September 2014 and sold the Japan
Pachislot business in May 2015 following the de-risking of this business via a signicant impairment charge in
scal 2014. The Review of Operations has restated the prior corresponding period to reect the treatment of these
businesses as discontinued operations.
Signicant Items:
Contingent consideration related to acquisition of Product Madness: The Groups reported result after tax
for the year included an abnormal expense of $8.4 million relating to contingent consideration in the acquisition of
Product Madness. The earn-out period concludes 31 December 2015.
Impairment of legacy inventory: The Groups reported result after tax for the year included an abnormal expense
of $7.4 million relating to the impairment of legacy inventory in the North America business following the successful
launch of the Helix cabinet.

Aristocrat Leisure Limited Annual Report 2015

13

Exhibit F, pg. 14

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 16 of 136

Review of Operations

Acquisition related transaction and restructuring costs: The Groups reported result after tax for the year
included an abnormal expense of $19.0 million relating to the acquisition of VGT for US$1.3 billion. Costs incurred
primarily represent transaction fees payable on completion to advisors, in addition to legal and consulting costs and
restructuring costs arising from organisation changes made in relation to the VGT acquisition.
Balance sheet and cash ows
Balance sheet
The balance sheet can be summarised as follows:
A$ million

Cash and cash equivalents


Property, plant and equipment

30 Sep 2015

31 Mar 2015

30 Sept 2014

329.0

159.7

285.9

203.5

185.7

121.4

1,941.8

1,814.1

130.5

Other assets

744.4

694.7

574.9

Total assets

3,218.7

2,854.2

1,112.7
114.4

Intangible assets

Current borrowings
Non-current borrowings
Payables, provisions and other liabilities
Total equity
Total liabilities and equity
Net working capital
Net working capital % revenue
Normalised net working capital % revenue
Net debt/(cash)

0.1

2.7

1,779.5

1,633.9

0.2

521.7

431.4

292.0

917.4

786.2

706.1

3,218.7

2,854.2

1,112.7

142.7

242.7

196.9
23.5

9.0

20.9

14.4

27.5

25.0

1,450.6

1,476.9

(171.3)

The balance sheet was signicantly inuenced by the acquisition of VGT. The transaction closed on
20 October 2014.
Signicant balance sheet movements from 30 September 2014 are:
Net working capital: Normalised for deferred and contingent consideration on the VGT and Product Madness
acquisitions, net working capital as a percentage of annual revenue reduced to 14.4% from 25.0%. This was due
to a higher recurring revenue mix driven by the highly cash generative prole of VGT in addition to returns from
improved cash management.
Property, plant and equipment: The $82.1 million increase primarily relates to the acquisition of VGT.
Intangible assets: The $1.8 billion increase relates primarily to the acquisition of the VGT business predominantly
goodwill, customer relationships and technology intangible assets.
Total equity: The change in total equity reects the result for the year and changes in reserves due to currency
movements, net of dividends paid during the year.

14

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 15

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 17 of 136

Review of Operations

Statement of cash ows


The movement in net debt (debt less cash), after eliminating foreign exchange movements, is set out below:
Operating cash ow
A$ million

EBITDA

12 months to 12 months to
30 Sep 2015 30 Sep 2014

523.1

219.3

Change
%

138.5

Change in net working capital

54.2

22.0

146.4

Interest and tax

(90.9)

(26.5)

(243.0)

Other cash and non-cash movements

(48.8)

(56.0)

12.9

Operating cash ow

437.6

158.8

175.6

11.7

5.6

108.9

Operating cash ow (normalised)

449.3

164.4

173.3

Operating cash ow (normalised) less capex

309.8

74.2

317.5

Operating cash ow (normalised) % NPATA

190.3

124.5

52.9

Operating cash ow (normalised) % EBITDA

85.9

75.0

14.5

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Change
%

One-off and discontinued items

Consolidated cash ow
A$ million

Operating cash ow
Capex

437.6

158.8

175.6

(139.5)

(90.2)

(54.7)

Acquisitions and divestments

(1,452.8)

4.4

n/a

Investing cash ow

(1,592.3)

(85.8)

n/a

1,446.8

277.2

421.9

Repayment of borrowings

(153.5)

(406.5)

62.2

Dividends and share payments

(103.3)

(91.1)

(13.4)

1,190.0

(220.4)

n/a

35.3

(147.4)

1,291.4

Proceeds from borrowings

Financing cash ow
Net increase/(decrease) in cash

Normalised operating cash ow increased 173.3% compared to the prior corresponding period.
The increase in operating cash ows related to the inclusion of VGT as well as higher receipts from customers on
higher revenues and cash management initiatives.
Net interest paid at $52.2 million was $51.0 million higher than the prior corresponding period due to the Term Loan
B debt for the acquisition of VGT.
Taxes paid in the period increased to $38.7 million driven by the increase in mix of business in North America at a
higher tax rate.
Cash ow in the statutory format is set out in the nancial statements.

Aristocrat Leisure Limited Annual Report 2015

15

Exhibit F, pg. 16

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 18 of 136

Review of Operations

Funding and Liquidity


In October 2014, the Group renanced its $375.0 million bank debt facility with a new US$1.3 billion Term Loan
B facility maturing in October 2021. This new facility was fully drawn and used to fund the acquisition of VGT on
20 October 2014 as well as repay bank debt drawn under the existing bank debt facility. In addition, the Group also
put in place a new $100 million Revolving facility at this time to provide for additional liquidity. This facility matures in
October 2019 and remains undrawn.
The Group repaid and cancelled US$30 million from the Term Loan B facility in March 2015, with US$1.27 billion
($1.81 billion) outstanding as at 30 September 2015.
The Groups facilities are summarised as follows:
Drawn as at
30 Sept 2015

Limit

Maturity date

US$1.27bn

US$1.27bn

October 2021

Revolving facility

A$0.0m

A$100.0m

October 2019

Overdraft facilities

A$0.0m

A$7.9m

Annual Review

Facility

Term Loan B facility

The Groups interest and debt coverage ratios are as follows:


Ratio

30 Sep 2015

31 Mar 2015

30 Sep 2014

Debt/EBITDA*

3.1X

3.2X

0.5X

Net debt (cash)/EBITDA*

2.6X

2.9X

(0.8X)

EBITDA*/interest expense**

7.4X

7.0X

16.9X

* EBITDA refers to Consolidated EBITDA for the Group as dened in Aristocrats Syndicated Facility Agreement and other Credit agreements (also
referred to as Bank EBITDA). EBITDA and interest for the periods ended 30 September 2015 and 31 March 2015 is calculated on a pro forma
basis assuming a full year of ownership of VGT and based on results for a 12 month period ending on each reporting date.
** Interest expense shown above includes ongoing nance fees relating to bank debt facility arrangements, such as line fees.

On 7 July 2014, the Group announced the acquisition of VGT together with a calculation of pro forma net debt/
Bank EBITDA, based on the US$1.3 billion Term Loan B facility and other acquisition funding, of 3.6X. The Group
also provided a gearing target and stated that it was targeting below 3.0X within 12 months of completion. The
Group achieved that gearing target within a six month period with net debt/EBITDA declining to 2.9X as at 31
March 2015. Gearing has declined further in the six months to 30 September 2015 falling to 2.6X. The reduction
in net debt/EBITDA over the reporting period reects both earnings growth and strong free cash ow generation
across the Group.
Credit Ratings
The Group obtained credit ratings from both Moodys Investor Services and Standard & Poors in order to support
the launch of the US $1.3 billion Term Loan B facility.
As at 30 September 2015, Aristocrat holds credit ratings of Ba2 from Moodys and BB from Standard & Poors.
Dividends
The Directors have authorised a nal dividend in respect of the full year ended 30 September 2015 of 9.0 cents per
share ($57.3 million). Total dividends in respect of the 2015 year amount to 17.0 cents per share ($108.0 million) and
represent an increase of 6.3%, reective of growth in performance, strength of cash ows and improved gearing.
The dividend will be unfranked and is expected to be declared and paid on 18 December 2015 to shareholders on
the register at 5.00pm on 2 December 2015. 100% of the unfranked dividend will be paid out of conduit foreign
income. As a result of the Groups concentration of earnings outside Australia and accumulated Australian tax
losses, the dividend declared for this period will not be franked.

16

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 17

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 19 of 136

Review of Operations

Foreign exchange
Given the extent of the Groups global operations and the percentage of its earnings derived from overseas, its
reported results are impacted by movements in foreign exchange rates.
In the 12 months to 30 September 2015, the Australian dollar was, on average, weaker against the US dollar when
compared to the prior corresponding period. The impact of translating foreign currency (translational impact)
increased revenue by $200.8 million while increasing normalised prot after tax and before amortisation of acquired
intangibles by $41.9 million on a weighted average basis when compared with rates prevailing in the respective
months in the prior year. In addition, as at 30 September 2015, the cumulative effect of the retranslation of the
net assets of foreign controlled entities (recognised through the foreign currency translation reserve) was a credit
balance of $62.8 million (compared to a debit balance of $51.3 million as at 30 September 2014).
Based on the Groups mix of protability, the major exposure to translational foreign exchange results from the
Groups US dollar prots. A US dollar 1 cent change in the US$:A$ exchange rate will result in an estimated
$3.0 million translational impact on the Groups annual prot after tax and before amortisation of acquired
intangibles. This impact will vary as the magnitude and mix of overseas prots change.
Foreign exchange rates compared with prior corresponding periods for key currencies are as follows:
12 months to
30 Sept 2015
A$:

12 months to
30 Sept 2014

Average1

Average1

30 Sept 2015

31 Mar 2015

30 Sept 2014

USD

0.7010

0.7634

0.8752

0.7790

0.9159

NZD

1.0998

1.0195

1.1216

1.0789

1.0996

EUR

0.6236

0.7070

0.6898

0.6815

0.6769

GBP

0.4623

0.5164

0.5384

0.5046

0.5524

ZAR

9.7079

9.2784

9.8548

9.3584

9.7064

ARS

6.5999

6.7295

7.4184

6.8948

6.9993

1.

Average of monthly exchange rates only. No weighting applied.

Regional segment review


Segment prot/(loss) represents earnings before interest and tax, and before signicant items, charges for D&D
expenditure, amortisation of acquired intangibles and corporate costs. The total amount of these items is disclosed
in the Groups statement of comprehensive income. Constant currency amounts refer to 2015 results restated using
exchange rates applying in 2014.
Americas
US$ million

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

Revenue
North America

709.4

388.8

320.6

82.5

Latin America

42.9

29.9

13.0

43.5

752.3

418.7

333.6

79.7

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

124.9

Total
US$ million

Prot
North America
Latin America
Total
Margin

338.4

150.5

187.9

8.8

10.0

(1.2)

(12.0)

347.2

160.5

186.7

116.3

46.2%

38.3%

7.9 pts

Aristocrat Leisure Limited Annual Report 2015

17

Exhibit F, pg. 18

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 20 of 136

Review of Operations

North America

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

217

2.3

Volume
Platforms
Conversions
Average US$ price/unit
Class III premium gaming operations units

9,636

9,419

3,210

3,661

(451)

(12.3)

16,814

15,289

1,525

10.0

9,808

9,071

737

8.1

Class II gaming operations units

20,681

n/a

n/a

n/a

Total gaming operations units

30,489

9,071

21,418

236.1

42.70

46.02

(3.32)

(7.2)

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

27.9

Gaming operations US$/day


Latin America

Volume
Platforms
Conversions
Average US$ price/unit

2,302

1,800

502

195

195

n/a

14,413

12,672

1,741

13.7

20 Oct 2013
to
30 Sep 2014

Variance

Variance
%

VGT Disclosures including pro forma values for the prior corresponding period:

US$ million

20 Oct 2014
to
30 Sep 2015

Revenue

274.6

244.1

30.5

12.5

EBITDA

190.2

161.5

28.7

17.8

EBITDA Margin

69.3%

66.2%

3.1 pts

Class II gaming operations units

20,681

19,790

891

4.5

39.21

36.46

2.75

7.5

Class II gaming operations US$/day

North American performance has been transformed by the inclusion of the VGT Class II gaming operations
business. In local currency, North American revenue increased 82.5% and prots increased by 124.9%.
Through its programs of revenue enhancements and oor optimisation, VGT Class II gaming operations
successfully increased average FPD by 7.5% compared to pro forma nancials for the prior corresponding period.
The installed base grew 4.5% to 20,681 units with gains in the Midwest, new casino locations and expansions
driving the increase. The Mexico operation ceased in the second half and the units have been excluded from the
current and prior corresponding period disclosures.
The Group continued to grow its Class III premium gaming operations footprint through the commercialisation of
innovative content and hardware. The newly released content portfolio included a successful mix of both licensed
and proprietary titles including Sons of Anarchy, The Big Bang Theory, Britney Spears, Buffalo Grand
and Lightning Link. The introduction of leading-edge hardware congurations, including the Arc Double and
Behemoth cabinets, coupled with the top performing Helix upright cabinet, supported growth in the install
base. Continued strong performance of products like Tarzan, Cash Express Gold Class, Buffalo Stampede
and The Walking Dead, as well as further penetration of the Wonder Wheels platform, sustained revenues and
protability while new products and hardware stimulated growth. Multi-site progressive products have increased as
a percentage in the overall mix.
The Class III premium gaming operations install base will continue to be supported by the release of blockbuster
titles including the upcoming release of Game of Thrones on Arc Double, Ted on the Wonder Wheels
platform, A Christmas Story on Arc Wheel and the highly anticipated sequel to The Walking Dead with
The Walking Dead II on the Arc Double cabinet.

18

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 19

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 21 of 136

Review of Operations

In Outright Sales, the Group was able to grow total market ship share circa 2.3 ppts and video ship share circa
6.0 ppts in a market that declined approximately 11.4% on fewer new openings, expansions and replacements.
In this smaller market, unit sales increased 2.3% compared to the prior corresponding period driven by strong
product performance. ASP increased 10.0% to US$16,814 per unit, compared to the prior corresponding period
driven by strong sales of Helix cabinets. Sales of Class III conversions decreased 12.3% compared to the prior
period as a result of strong unit sales.
The successful launch of Arc Single late in the scal year was launched with a strong portfolio of proprietary
brands including Buffalo Gold, Sky Rider 2 and Wonder 4 Tower. The Helix cabinet gained further market
penetration during the period supported by a strong portfolio of games in all key segments. The core portfolio
included Wonder 4 Jackpots, Wicked Winnings Legends and Wild LepreCoins. The launch of Super Wheel
Blast further complemented the J-Series segment portfolio which included Quick Fire Jackpots, Gold
Pays, and Jackpot Streak. In the E-Series segment Sacred Guardians, Fire & Rain and Flowers of
Babylon provided further depth in the games library.
In Latin America, unit sales volume was up 27.9%. In addition, overall ASP increased by 13.7% due to a higher mix
of new units. Revenue increased 43.5% driven by higher unit volumes and product mix. Latin America continues to
see growth in recurring revenue as E-Series and J-Series gain penetration in the region.
Australia and New Zealand

A$ million

Constant
currency
12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

Revenue

313.9

223.8

90.1

40.3

Prot

113.8

89.7

24.1

26.9

Margin

36.3%

40.1%

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

(3.8) pts
Variance
%

Volume
Platforms
Conversions
Average A$ price/unit

10,537

7,337

3,200

43.6

2,703

3,891

(1,188)

(30.5)

20,564

17,277

3,287

19.0

ANZ revenue and prot increased 40.3% and 26.9% respectively to $313.9 million and $113.8 million compared to
the prior corresponding period. This reects signicant ship share gains in all key markets with Aristocrat unit sales
increasing by 43.6% in a market that grew by circa 12.6% during the period.
The ship share gains were the result of bringing to market a portfolio of games which provides breadth of product
categories and depth of performing games. These games included Players Choice Gold Jackpots, Players
Choice Sapphire Edition, Players Choice High Limits, Super Wheel Blast, Weird Wicked & Wild, Pure
Gold, African Big 5, Dragons Choice, Globetrotter and the Lightning Link and Lightning Cash family
of games. The performance of these games led to the Helix cabinet being the best performing cabinet across all
key markets.
Average Selling Price increased 19.0% due to an improved games mix of high performing premium content and the
rollout of the Helix cabinet.
Segment margin decreased to 36.3% from 40.1% due to a combination of the weaker Australian dollar impacting
margin (USD denominated cost of sales); one time launch costs related to the new cabinet rollout; lower
contribution from sales of conversions which are at a higher margin; and higher variable employee compensation.

Aristocrat Leisure Limited Annual Report 2015

19

Exhibit F, pg. 20

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 22 of 136

Review of Operations

International Class III


Constant
currency
12 months to 12 months to
30 Sep 2015 30 Sep 2014

A$ million

Revenue
Prot
Margin
Volume Class III Platforms

Variance

Variance
%

120.1

105.2

14.9

14.2

43.0

41.4

1.6

3.9

35.8%

39.4%

4,457

4,935

(478)

(3.6) pts
(9.7)

International Class III revenue and prot increased 14.2% and 3.9% respectively to $120.1 million and $43.0 million
compared to the prior corresponding period. Asia Pacic performance was strong, driven by new openings in
Macau where market leading ship share was achieved together with increased expansion activity outside of
Macau. Europe was relatively stable however margins were impacted by a weaker Euro (versus GBP and USD).
South Africa was down versus the prior year due to reduced spending in the Casino market and lower sales into
the low payout market.
Segment margin decreased to 35.8% from 39.4% due to a combination of the weaker Euro impacting margin in
Europe and one time launch costs related to new cabinet rollout.
Digital
Constant
currency
12 months to 12 months to
30 Sep 2015 30 Sep 2014

A$ million

Revenue

50.3

73.1

145.3

42.0

17.0

25.0

147.1

34.0%

33.8%

0.2 pts

12 months to 12 months to
30 Sep 2015 30 Sep 2014

Variance

Variance
%

Margin

Prot
Daily average users (DAU)

Variance
%

123.4

Prot

A$ million

Variance

42.0

17.0

25.0

147.1

799,840

477,269

322,571

67.6

1,089,584

669,255

420,329

62.8

Full year
End of year
Average US$ net revenue per DAU (ARPDAU)
Full year

0.38 $

0.23

0.15

65.2

End of year

0.38 $

0.29

0.09

31.0

(1)

Daily Average Users for the period and prior corresponding period have been restated to exclude legacy products for which a third party
licence expired in December 2014. As these products had lower monetisation rates than Heart of Vegas, ARPDAU has increased.

Digital revenues increased almost three-fold to $123.4 million in constant currency ($147.6 million in reported
currency).
The Digital segment result increased to $42.0 million in constant currency or $50.2 million in reported currency
terms driven by sustained growth in the Heart of Vegas suite of applications throughout the period. Higher
monetisation rates were driven primarily by the mobile launches (iOS and Android) and increasingly sophisticated
product and marketing features offset by increasing user acquisition costs. Margins remained broadly at at 34% in
the reporting period.
The Groups social digital business, Product Madness, was awarded Social Slots Operator of the Year by eGaming
Review North America Awards in April 2015. Portfolio-wide ARPDAU was US 38c at period end with the successful
launch of mobile contributing to the positive trend.

20

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 21

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 23 of 136

Review of Operations

Business strategies and prospects for


future nancial years
The Groups strategy is structured around three
key pillars:

Core momentum to drive a more competitive


core business to achieve our strategic objectives
of delivering a sustainable business.

Industry and business transformation to enable


our technology and leverage our content in
high-growth, emerging distribution channels. To
continuously improve our systems and processes.

People and culture to build a high performance


organisation with a positive culture across our
global business.

The strategies described below are expected to


provide revenue growth and further diversify revenue
sources for the Group.
Core momentum
Core momentum is about focusing on producing
the best content by market and segments and
encompasses our short to mid-term growth drivers.
The Groups traditional land-based markets include
Australia, Asia Pacic, North America and EMEA with
segmentation focused on for-sale product, gaming
operations and systems products.
As these traditional land-based markets continue to
mature, we are increasingly focused on share taking.
This strategy requires careful product segmentation
in order to appropriately leverage our design and
development base across a diverse portfolio of
markets with a focus on innovation and product
differentiation.
We are focused on recurring revenue elements of the
business to drive strong operational performance.
We continue to invest in the acquisition of key talent
and strengthen our insights function to enhance
our ability to aggressively take share in the following
categories:

Traditional Australian Style Content through


brand extension and building new brands.

Entertainment Style Segment through purposebuilt games and specialist creative talent.

Recurring Revenue Segment through securing


industry talent and key licensed brands to
accelerate growth.

Jackpot Products through investments in a new


dedicated studio and specialist creative talent.

Digital through distributing content through new


channels (e.g. mobile).

Industry and business transformation


With the progress we are making in our core
business, we now nd ourselves in a position to look
outward to an evolving gaming sector and consider
new ways to invest wisely and enter emerging
distribution channels.
Whether online/digital gaming, server-based gaming,
centrally served gaming systems, mobile gaming or
social gaming, players are increasingly choosing to
interact with content in new distribution channels
that do not involve a stand-alone gaming machine.
At the same time, players are demanding new and
innovative content in our core business that requires
us to adapt through new and better platforms and
tools. These changes create opportunity for Aristocrat
as a producer of the worlds greatest gaming content!
Over the past nancial year we have taken a
disciplined approach and invested wisely in emerging
value streams. As always we are guided by our
commitment to generate superior and sustainable
shareholder returns over the long term.
The acquisition of Video Gaming Technologies
Inc. (VGT) was completed on 20 October 2014.
VGT has a complementary product offering and
provides a unique opportunity to accelerate our
growth in the US recurring revenue segment. The
acquisition is aligned to our strategy as it transforms
the scale of our gaming operations business and
contribution of recurring revenues overall as well
as preserves the Groups options to pursue future
acquisitions in key growth segments given the
combined free cash ows.
Aristocrats recurring revenue base and strong
cash ows should give the business the capacity
to consider additional organic and inorganic
investments in line with our strategy and
shareholders longer term interests.
People and culture
Fostering our people and culture is fundamental
to driving our success. Attracting, retaining
and developing the best talent, celebrating and
learning from the diversity present within our
global organisation and embedding our core
values and behaviours are all fundamental traits
of a high performance culture and what will
enable the successful execution of the Groups
strategic priorities.

Aristocrat Leisure Limited Annual Report 2015

21

Exhibit F, pg. 22

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 24 of 136

Review of Operations

Material risks to business strategies and


prospects for future nancial years
Identifying and managing risks which may affect the
success of our strategy and nancial prospects for
future years is an essential part of our governance
framework. While the Group has a strong track
record of managing a multitude of risks, some risks
still remain, many of which are not directly within the
control of the Group.
Our risk management approach involves the ongoing
assessment, monitoring and reporting of risks which
could impede our progress in delivering our strategic
priorities. Key management and staff are responsible
for the day-to-day management of risks. The Group
also has an Internal Audit and Risk Management
function which, supported by external advisers,
provides independent and objective assurance on the
effectiveness of our governance, risk management and
internal control processes.
The Group has established a formal risk management
framework, which is based on ISO3100 Risk
Management and the ASX Principles and
Recommendations. This framework is supported by
the Groups Code of Conduct and risk management
policy. The policy denes material business risks which,
once identied, are captured on the global risk register.
Material business risks are regularly reported to the
Board via the Audit Committee along with their controls
and treatments.
The main risks affecting the Group are set out below.
The Group may also face a range of other risks from
time to time in conducting its business activities. While it
aims to manage risks in order to avoid adverse impacts
on its nancial standing, some risks are outside the
control of the Group.
Changing economic conditions and other factors
affecting the gaming industry
Demand for our products and services can be
dependent upon favourable conditions in the gaming
industry, which is highly sensitive to players disposable
incomes and gaming preferences. Discretionary
spending on entertainment activities could decline for
reasons beyond the Groups control; for example, due
to negative economic conditions or natural disasters.
A decline in the relative health of the gaming industry
and the difculty or inability of our customers to obtain
adequate levels of capital to nance their ongoing
operations might reduce the resources available to
purchase products and services, which could affect
Group revenues.
To address this we are working to develop and deliver
new and innovative technologies and products to
meet customer needs and working to partner with our
customers to provide value adding solutions.

Increasing competition
Competition in the gaming industry (both land-based
and online) has intensied from the consolidation
of existing competitors as well as the entry of new
competitors. Increasingly, price, reliability and product
innovation are among the factors affecting a providers
success in selling its products.
As traditional land-based markets continue to
mature, the Groups success and protability is
dependent in part on our ability to successfully enter
new segments in existing markets and new markets
as well as new distribution channels, such as mobile
and online gaming.
To address this we continue to invest in key skills and
talent and have also strengthened our insights function
to enhance our ability to produce innovative new
product portfolios to drive entry into new markets and
support share growth.
Government gaming regulation
The global gaming industry is subject to extensive
governmental regulation. While the regulatory
requirements vary by jurisdiction, most require:
(a) licences and/or permits;
(b) ndings of suitability;
(c) documentation of qualications, including evidence
of nancial stability; and
(d) individual suitability of ofcers, directors, major
shareholders and key employees.
Changes in laws or regulations or the manner of
their interpretation or enforcement could impact the
Groups nancial performance and restrict our ability
to operate our business or execute our strategies.
Difculties or delays in obtaining or maintaining
required licences or approvals could also have a
negative impact on the business.
A material breach of internal processes may result in
violation of existing regulations which could also impact
our ability to maintain required licenses or approvals.
Gaming laws and regulations serve to protect the public
and ensure that gaming related activity is conducted
honestly, competitively, and free of corruption. A change
in government (or governmental policy towards gaming)
may also impact our operations. This political risk
increases in jurisdictions where there is signicant
anti-gaming opposition or vocal minority interests.
The Group has established a comprehensive
regulatory assurance function and governance
framework to ensure that we continue to monitor
the political environment and regulations in the
jurisdictions in which we operate and to monitor our
adherence to internal processes to ensure we comply
with existing regulations.

Entities within the Group may from time to time become


subject to material litigation, regulatory actions, legal or
arbitration proceedings which, if they crystallise, may
adversely affect the Groups results.
22

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 23

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 25 of 136

Review of Operations

Intellectual property
The gaming industry is constantly employing new
technologies in both new and existing markets.
The Group relies on a combination of patents
and other technical security measures to protect
our products, and continues to apply for patents
protecting such technologies.
Competitors and others may infringe on our intellectual
property rights, or may allege that we have infringed on
theirs. Monitoring infringement and misappropriation of
intellectual property can be difcult and expensive. We
may also incur signicant litigation expenses protecting
or defending our intellectual property.
The Group has an established framework to identify
and protect its global intellectual property assets as
well as monitor infringement by competitor products.
The Group has established a comprehensive
regulatory assurance function and governance
framework to ensure that we continue to monitor
the political environment and regulations in the
jurisdictions in which we operate and to monitor our
adherence to internal processes to ensure we comply
with existing regulations.
Tax
The risk that changes in tax law (including goods and
services taxes and stamp duties), or changes in the way
tax laws are interpreted in the various jurisdictions in
which the Group operates, may impact the tax liabilities
of the Group and the assets in which it holds an interest.
The Group seeks to manage this risk by monitoring
changes in legislation, utilising external tax and legal
advisors and employing highly experienced qualied
accounting and tax experts who regularly monitor the
taxation relevant to the Groups operations.

The debt issue used to partly fund the acquisition


of Video Gaming Technologies Inc. resulted in an
increase in the Groups total debt and also resulted
in a level of debt which is exposed to a oating
rate of interest. The Group is therefore exposed to
movements in interest rates. The Group seeks to
mitigate this risk with a capital management strategy
which examines periodic debt paydown and with the
implementation, and continued assessment, of an
interest rate hedging strategy.
Ability to manage and frequently introduce
innovative products on a timely basis
The Groups success is dependent on its ability to
develop and sell new products that are attractive
to casino operators and other gaming enterprises
and their customers, for both land-based and online
gaming operations.
If the Groups land-based or online gaming content
does not meet or sustain revenue and protability
expectations, it may be replaced or we may experience
a reduction in revenue generated and an increased
exposure to obsolete inventory. Therefore, success
depends upon the Groups ability to continue to
produce technologically sophisticated land-based and
online products that meet its customers needs and
achieve high levels of player appeal and sustainability.
Further, newer products are generally more
sophisticated than those produced in the past and
the Group must continually rene design, production
and approval capabilities to meet the needs of its
product innovation.
The Group has invested, and intends to continue to
invest, signicant resources into its insights function,
research and development efforts and the acquisition
of key talent to mitigate this risk.

Fluctuations in foreign exchange rates and


interest rates
The Group operates internationally and is exposed to
foreign exchange risk arising from various currency
exposures, primarily with respect to the US dollar
and Euro.
Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities
denominated in a currency that is not the entitys
functional currency. The risk is measured using
sensitivity analysis and cash ow forecasting. The
Groups foreign exchange hedging policy is to reduce
the foreign exchange risk associated with transactional
exposures, primarily over a 12 month horizon. External
foreign exchange contracts are designated at the Group
level as hedges of foreign exchange risk on specic
foreign currency denominated transactions.

Aristocrat Leisure Limited Annual Report 2015

23

Exhibit F, pg. 24

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 26 of 136

Remuneration Report
for the 12 months ended 30 September 2015
Introduction
The Directors of Aristocrat Leisure Limited (Company) present the Remuneration Report prepared in accordance
with section 300A of the Corporations Act 2001 (Cth) (the Act) and Corporations Regulation 2M.3.03 for the
Aristocrat Group of companies (Group) for the year ended 30 September 2015 (the Reporting Period).
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Act.
This Remuneration Report forms part of the Directors Report.
The Remuneration Report details the policy and principles that govern the remuneration of the Companys NonExecutive Directors and the Executive KMP (as that term is dened in the Glossary), the link between remuneration
policy and principles and the Groups performance for the Reporting Period, and the remuneration and service
agreements of Executive KMP.
For the year ended 30 September 2015, the KMP were:
KMP

Position

Term as KMP

Dr ID Blackburne

Chair; Director

Full Year

DCP Banks

Director

Full Year

KM Conlon

Director

Full Year

RA Davis

Director

Full Year

Dr RV Dubs

Director

Full Year

SW Morro

Director

Full Year

JR Odell

CEO and Managing Director

Full Year

T Korsanos

Chief Financial Ofcer, Global Services and Company Secretary

Full Year

M Sweeny

Chief Commercial Ofcer

Full Year

Non-Executive Directors

Executive KMP

Contents
This Remuneration Report is set out in the following sections:
Section 1 Executive Summary
Section 2 Remuneration Outcomes for the Reporting Period
Section 3 Human Resources and Remuneration Committee
Section 4 Remuneration policy and structure
Section 5 Non-Executive Director remuneration
Section 6 Alignment between remuneration and Group performance
Section 7 Remuneration tables and data
Section 8 Shareholdings
Section 9 Glossary of terms commonly used in this Remuneration Report

24

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 25

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 27 of 136

Remuneration Report

Below is an overview of the components of remuneration of the Executive KMP and Non-Executive
Directors. Further details on each remuneration component are set out in the corresponding page in
the Remuneration Report.
Table 1 Components of remuneration
Remuneration component

Participants
Executive KMP

Fixed

Fixed remuneration

Non-Executive Directors

5 (page 33)
5 (page 42)

Fees
Short Term Incentive

5 (page 34)

Long Term Incentive

5 (page 37)

Post-employment

Superannuation

5 (page 45)

5 (page 42)

Section 1 Executive Summary


The Group aims to deliver sustainable, superior returns to its shareholders. The remuneration strategy adopted by
the Group is a key driver in achieving these objectives and in attracting, motivating, rewarding and retaining senior
management. As such, the Group has developed a remuneration framework that is aligned with value growth for
shareholders and the Groups business strategy, is globally relevant, performance and outcome driven, competitive
and transparent.
1.1 Implications of the change of nancial year-end
The at-risk component of total target remuneration is linked to Group performance over one or more nancial
reporting periods. As a result of the change to the Groups nancial year-end (the rst of which occurred on 30
September 2012 resulting in a nine month reporting period), certain transitional arrangements (as detailed in the
2012 Remuneration Report) were approved by the Board to ensure that remuneration was consistent. These
transitional arrangements have now been completed but, importantly, the 2014 Remuneration Report did not reect
the outcome of the 2012 LTI grant as the performance period (being three years to 31 December 2014) concluded
after the end of the 2014 reporting period (being 30 September 2014). This Remuneration Report discloses the
results of both the 2012 LTI grant (which vested and converted into shares in February 2015) as well as the 2013
LTI grant (which had a three year performance period ending 30 September 2015 and vested and converting into
shares in November 2015).
The diagram below sets out timings in respect of the 2011, 2012 and 2013 LTI Grants.
LTI Grant Reporting
Periods

31 Dec
2011

31 Dec
2012

31 Dec
2013

31 Dec
2014

2011 LTI Grant 1


(100% allocation granted)

2012 LTI Grant 2


(100% allocation granted)

2013 LTI Grant 3


(75% allocation granted)
30 Sep
2012

1. Vested 31 January 2014


2. Vested 2 February 2015
3. Vested 25 November 2015

30 Sep
2013

30 Sep
2014

30 Sep
2015

2015 Reporting
Period containing
two LTI vestings
due to change in
nancial year end

Aristocrat Leisure Limited Annual Report 2015

25

Exhibit F, pg. 26

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 28 of 136

Remuneration Report

Section 1 Executive Summary continued


1.2 Summary of Performance, Remuneration initiatives and remuneration outcomes during the
Reporting Period
Focus

Description

Key nancial
highlights

Further
Information

The LTI and STI outcomes noted below reect and reward the strong
results across all measures of incentive performance during the
relevant performance periods, including in FY15.
The Groups NPATA for the Reporting Period was $236.1 million,
representing a 78.9% increase on the prior corresponding period.
The Groups FCF conversion for the Reporting Period was 124%.
From 1 October 2012 to 30 September 2015, the Groups:
TSR performance exceeded its Peer Comparator Group by
37.7%;
compounded EPS growth rate across this period was 22.9%,
which was at the upper end of the EPS growth targets set by the
Board; and
share price grew from $2.69 to $8.61, delivering a share price
return of 220%.

Section 2;
Section 6 and
the Financial
Statements
(within the
Financial Report)

Share Price Performance


10

Share Price ($)

9
8

Share price $

7
6
5
4
3
2
1

LTI Outcomes

2012 LTI Grant outcome


A xed number of PSRs were allocated to executives in January 2012,
and based on performance over the performance period (ending 31
December 2014), 87.1% of PSRs vested following testing in February
2015, and converted into shares.

30/09/15

30/06/15

31/03/15

31/12/14

30/09/14

30/06/14

31/03/14

31/12/13

30/09/13

30/06/13

31/03/13

31/12/12

30/09/12

30/06/12

31/03/12

31/12/11

Section 2;
Table 5;
Section 6;
Table 15

2013 LTI Grant outcome


A xed number of PSRs were allocated to executives in October 2012,
and based on performance over the performance period (ending 30
September 2015), 94.4% of PSRs vested following testing in November
2015, and converted into shares.
STI Outcomes

26

170% of the Group target STI was awarded for the 12 months to 30
September 2015, reective of record nancial performance over this
performance period.

Section 2;
Section 6;
Table 12; Table
17; Table 18

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 27

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 29 of 136

Remuneration Report

Further
Information

Focus

Description

Remuneration
initiatives

Following the acquisition of VGT in October 2014, a majority of the


Groups revenue is now generated within the United States (US) and a
majority of its senior leadership team is US based. As such, during the
Reporting Period, the Board conducted a review of market data and
executive remuneration practices in Australia and the US and identied
some meaningful differences, primarily with respect to the design of
variable reward programs.
The performance and structure of the STI and LTI Plans were
benchmarked against that of the Groups US peers and the general
market (in both Australia and the US). The review highlighted
inconsistencies in STI and LTI structures relative to industry peers and the
market in general.
Consequently, set out below are the key changes approved by the Board
and implemented during the Reporting Period in order to:
maintain a market competitive approach to Senior Executive
remuneration;
provide a common interest between Senior Executives and
shareholders by aligning the rewards that accrue to management to
the creation of shareholder value; and
provide a relative, objective, external, market-based performance
measure against those companies with which the Company
competes for capital and talent.

(a) Changes to
STI Plan

The Board considered it appropriate that the following renements apply


to grants under the 2015 STI Plan:
NPATA replace NPAT as one of the target metrics comprising the
Business Score Goals. The following two performance target metrics
be used to align reward with shareholder returns;
NPATA with a weighting of 70%; and
FCF with a weighting of 30%.
the Business Score Threshold be set to 85%; and
enhanced rewards for signicant outperformance be built into the STI
Plan.

4.2.1; 4.2

(b) Changes to
LTI Plan

The Board considered it appropriate that the following renements apply


to grants under the 2015 LTI Plan:
inclusion of a third vesting condition in relation to 40% of the LTI grant,
being the achievement of strategic objectives as set by the Board (for
the CEO) and service based vesting (for all other participants); and
a move from fair value to face value to determine the number of
PSRs to be granted to participants.
These changes were previously disclosed to the market
in the Companys 2015 Notice of Meeting in connection with a resolution
seeking approval for the grant of PSRs to the CEO.

4.2; 4.2.2

Changes to CEO
Total Target
Remuneration

Mr Odells total target remuneration (TTR) increased during the Reporting


Period from $4.3 million to $5.7 million. Mr Odells pay mix percentages
(xed/short-term/long-term) were also amended from 38/38/24 to
29/29/42, respectively. This change resulted in the percentage of Mr
Odells at risk compensation increasing from 62% to 71%.

Table 6
Table 13

Non-Executive
Director Fees

The maximum aggregate Non-Executive Remuneration for the Reporting


Period remained unchanged from the A$2 million limit approved by
shareholders at the Groups 2013 Annual General Meeting. A proposal to
increase this maximum amount to A$2.75 million, to (among other things)
support Board succession and increase in Board size, will be presented
for shareholder approval at the Groups 2016 Annual General Meeting.

N/A

Aristocrat Leisure Limited Annual Report 2015

27

Exhibit F, pg. 28

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 30 of 136

Remuneration Report

Section 2 Remuneration Outcomes for the Reporting Period


This Remuneration Report discloses outcomes of both the 2012 and 2013 LTI Grants.
2013 LTI grant outcome
As set out in Table 2 below, 100% of the Relative TSR component of grants under the 2013 LTI Plan (30% of total
grants) vested in November 2015 as the Groups TSR exceeded Peer Comparator Group returns by more than
10% per year compound.
92% of the Relevant EPS component vested given that the Groups actual EPS CAGR across the consecutive
three year performance period was 22.9% (36.1% at reported foreign exchange rates) which was at the upper end
of the EPS growth target rates set by the Board.
Table 2 below sets out the outcomes of the 2013 LTI grant.
Table 2 Outcomes of 2013 LTI grant
Relative TSR (30%)
1 Oct 2012 to 30 Sep 2015

Outcomes

Compound annual TSR of the Peer Comparator Group

12.04%

Aristocrat compound annual TSR

49.72%
100%1

TSR vesting percentage (of the 30%)


Relevant EPS (70%)
1 Oct 2012 to 30 Sep 2015

Aggregate EPS2
EPS vesting percentage (of the 70%)
Total percentage of vesting under the 2013 LTI Plan

Threshold
EPS Target

Maximum
EPS Target

Actual Outcome

58.84 cents

70.58 cents

68.68 cents

50%

100%

92.0%
94.4%

1.

For 100% vesting, the Companys TSR performance had to exceed Peer Comparator Group returns by more than 10% per year compound.
The Companys actual TSR exceeded Peer Comparator Group returns by 37.68% per year compound.

2.

The EPS targets represent annual growth rates of 10% (Threshold EPS Target) and 20% (Maximum EPS Target) across the consecutive three
year performance period. The actual CAGR for the three year period at parity (AUD:USD) was 22.9% (36.1% at reported rates).

28

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 29

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 31 of 136

Remuneration Report

2012 LTI grant outcome


As a result of the Groups change of nancial year end, the relevant target and outcomes of the 2012 LTI grant were
not reported in the Remuneration Report for the year ended 30 September 2014. Vesting of the 2012 LTI grant was
tested at the conclusion of the relevant performance period, being the three years to 31 December 2014. On 2
February 2015, the Company announced to the market that 87.1% of the total 2012 LTI grant vested:

100% of the Relevant TSR component of grants under the 2012 LTI Plan vested given that the Groups actual
TSR exceeded Peer Comparator Group returns by 32.52% per year compound; and

81.5% of the Relevant EPS component vested given that the Groups actual EPS CAGR across the consecutive
three year performance period was 21.0% (26.8% at reported foreign exchange rates) which was at the upper
end of the EPS growth targets rates set by the Board.

Table 3 Outcomes of 2012 LTI grant


Relative TSR (30%)
1 Jan 2012 to 31 Dec 2014

Outcomes

Compound annual TSR of the Peer Comparator Group

15.37%

Aristocrat compound annual TSR

47.89%
100%1

TSR vesting percentage (of the 30%)


Relevant EPS (70%)
1 Jan 2012 to 31 Dec 2014
2

Aggregate EPS

EPS vesting percentage (of the 70%)

Threshold
EPS Target

Maximum
EPS Target

Actual Outcome

48.13 cents

57.44 cents

53.99 cents

50%

100%

81.5%

Total percentage of vesting under the 2012 LTI Plan

87.1%

1.

For 100% vesting, the Companys TSR performance had to exceed Peer Comparator Group returns by more than 10% per year compound.
The Companys actual TSR exceeded Peer Comparator Group returns by 32.52% per year compound.

2.

The EPS targets represent annual growth rates of 15% (Threshold EPS Target) and 25% (Maximum EPS Target) across the consecutive three
year performance period. The actual CAGR for the three year period at parity (AUD:USD) was 21.0% (26.8% at reported rates).

2015 STI grant outcomes


170% of Group target STI was awarded for the 12 months to 30 September 2015.
Table 14 provides full details of the 2015 short term incentive awards for Executive KMP.
Individual key performance objectives are determined for each Executive KMP to deliver the Groups short-term and
long-term success, in line with the business plan.

Aristocrat Leisure Limited Annual Report 2015

29

Exhibit F, pg. 30

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 32 of 136

Remuneration Report

The table below sets out an example of key areas of focus during the Reporting Period:
Section 2 Remuneration Outcomes for the Reporting Period continued
1.2 Summary of Performance, Remuneration initiatives and remuneration outcomes during the
Reporting Period continued
Table 4 Executive KMP KPOs
Key Performance Objective

Outcome

Commentary

Financial results

Exceeded

NPATA $236.1 million representing a 78.9% increase


on the prior corresponding period (47.1% in constant
currency).

Value-based leadership,
behaviours and developing
people

Exceeded

Improved organisational culture and internal


communications program.
Increased level of talent and capability across the Group,
with focus on critical talent retention.
Intensive leadership program undertaken by extended
leadership team.
Focus on cascading the Groups core values and
behaviours.

Execution of strategic priorities

Exceeded

Completion of acquisition of Video Gaming Technologies


Inc. and successful implementation of integration of Video
Gaming Technologies Inc. into the Group.
Focus on ANZ market strength.
Increased focus on recurring revenue elements of the
business (e.g. Class III gaming ops, Class II and Digital)
to drive strong operational performance.
Clear mobile strategy communicated and executed,
with Product Madness integrated into the Group.

Product innovation and great


game content

Exceeded

Aristocrat won rst place for Best Slot Product, Game of


Thrones in the 15th Annual Global Gaming Business (trade
publication) Gaming and Technology Awards.
Slot managers cite Aristocrats games as the most
anticipated and Aristocrats Buffalo takes the top
position in games with the highest win with 18% of
responses (Goldman Sachs Global Investment Research,
Slot Survey, 18 August 2015).

Product quality and delivery

Met

Continued focus on delivery and quality metrics.


Improved regional product delivery and go to market
capability.

Safety, health and environment

Met

Ongoing education among all managers about their role in


safety, particularly timely injury reporting.
Reduction in number and severity of workplace injuries.

Disclosures under Listing Rule 4.10.22


In accordance with Listing Rule 4.10.22, during the Reporting Period 337,500 securities were acquired on-market
(at an average price of $6.59 per security) to satisfy the Companys obligations under its various equity plans. The
Appendix 3Bs released to the ASX on 18 December 2014, 2 February 2015 and 25 September 2015 highlight
those shares issued to the Aristocrat Employee Equity Trust during the Reporting Period to satisfy the Companys
obligations under the various equity and related plans. No securities were purchased or allocated by the Company
to any Director or related party during the Reporting Period.

30

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 31

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 33 of 136

Remuneration Report

Section 3 Human Resources and


Remuneration Committee
Details of the composition and responsibilities of
the Human Resources (HR) and Remuneration
Committee are set out in the Corporate Governance
Statement. These responsibilities include making
recommendations to the Board on Non-Executive
Director and executive remuneration pay, policy and
structure.
In making recommendations to the Board, the
HR and Remuneration Committee considers
proposals from management and seeks advice
from external advisers from time to time to assist
in its deliberations. The HR and Remuneration
Committee has appointed Ernst & Young (EY) as
the Companys Remuneration Consultant for
the purposes of the Corporations Amendment
(Improving Accountability on Director and Executive
Remuneration) Act 2011.
The Board takes an active role in the governance and
oversight of the Groups remuneration policies and
practices. Approval of certain key human resources
and remuneration matters is reserved for the Board,
including setting remuneration for Non-Executive
Directors, Executive KMP, Senior Executives and
other employees and any exercise of its discretion in
relation to the targets, goals or available funding pools
in connection with the Groups incentive plans.
During the Reporting Period, EY provided
independent advice to the Board in its review of
remuneration arrangements. Remuneration advisers
are engaged by the Chairperson of the HR and
Remuneration Committee with an agreed set of
protocols to be followed by the advisers, the HR
and Remuneration Committee and management
that determine the way in which remuneration
recommendations would be developed and provided
to the Board. This process is intended to ensure there
could be no undue inuence by Executive KMP for
whom any recommendations may relate.
No remuneration recommendations, as dened
by the Corporations Act 20011, were made by the
remuneration advisers during the Reporting Period.

1.

A Remuneration Recommendation is a recommendation


about (i) how much remuneration should be and/or (ii) what
elements the remuneration should have, for members of the
Groups key management personnel. It does not include the
provision of market data, advice about the operation of the law
or accounting principles or the provision of information of a
general nature relevant to all employees of the Group.

Section 4 Remuneration policy and structure


4.1 Board policy on Senior Executive
remuneration
Aristocrats executive remuneration approach is
designed to remunerate executives for increasing
shareholder value and achieving nancial targets
and business strategies. As a global organisation,
it is also set to attract, retain and motivate
appropriately qualied and experienced executives
in each relevant labour market. Accordingly, the
Board considers it desirable for remuneration
packages of Senior Executives to include both a
xed component and an at-risk or performance
related component (governing both short term and
long term incentives). The approach is consistent
with generally accepted Australian corporate
practice. The HR and Remuneration Committee
has recommended, and the Board has adopted, a
policy that remuneration will:
(a) support the short, medium and long-term
nancial targets and business strategies of the
Group as set out in the strategic business plans
endorsed by the Board;
(b) provide a common interest between executives
and shareholders by aligning the rewards
that accrue to management to the creation of
shareholder value; and
(c) be competitive in the markets in which the Group
operates in order to attract, motivate and retain
high calibre executives.
The Board also considers it important that key
employees have ongoing share ownership in the
Company through the award of PSRs.
4.2 Overview of Senior Executive (including
Executive KMP) remuneration approach and
framework
The key features of the Groups Senior Executive
remuneration framework are outlined below.

Fixed/variable mix Total remuneration


includes both a xed component and an at-risk
or performance related component (governing
both short term and long term incentives). The
approach is consistent with generally accepted
Australian corporate practice. The Board views
the at-risk component as an essential driver
of a high performance culture and superior
shareholder returns.

Market positioning Senior Executives


receive competitive xed remuneration
comprising cash salary, superannuation
and other benets which make up the xed
remuneration component of their total
remuneration package. Fixed remuneration
is reviewed annually against the external
market and compared to similar roles from a
specically identied peer group of companies
for each role to ensure competitive positioning.
Aristocrat Leisure Limited Annual Report 2015

31

Exhibit F, pg. 32

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 34 of 136

Remuneration Report

Section 4 Remuneration policy and structure continued


4.2 Overview of Senior Executive (including Executive KMP) remuneration approach and framework
continued
STI Plan The STI Plan provides rewards for achievement of Business Score Goals and individual
performance goals (the Individual Performance Goals) during the performance period.
Senior Executives can earn between nil and 200% of that Senior Executives target STI, subject to the
satisfaction of business and individual performance objectives.
For Senior Executives participating in the STI Plan, part of the STI is delivered in cash and the remainder is
deferred for up to 24 months as an equity award. As PSRs are granted at the conclusion of the performance
period (i.e. following testing of the performance criteria) and are then used as a retention tool, the Board has
determined that an amount (based upon the dividends paid by the Company during the deferral period) will
accrue on the PSRs and will be paid in cash at the end of the deferral period to the extent that the PSRs vest.

LTI Plan During the Reporting Period, the Board determined that the following vesting conditions be applied
to grants under the 2015 LTI Plan:
(i) a Relative TSR vesting condition, in relation to thirty percent (30%) of the PSRs granted;
(ii) a Relevant EPSA (rather than a Relevant EPS) vesting condition, in relation to thirty percent (30%) of the
PSRs granted; and
(iii) achievement of strategic objectives set by the Board (Strategic Objectives) for the CEO and service based
vesting (Service Based) for all other participants, in relation to forty percent (40%) of the PSRs granted.
Prior to the 2015 LTI Plan, participants with grants of PSRs would vest based on the Companys three year:
(i) Relative TSR, in relation to thirty percent (30%) of the PSRs granted; and
(ii) Relevant EPS for the 2013 LTI Plan and Relevant EPSA for the 2014 LTI Plan, in relation to seventy percent
(70%) of the PSRs granted.
Any PSRs which vest will be converted automatically into fully paid ordinary shares. Holders of LTI PSRs are not
entitled to dividends until the rights have vested and converted into shares.

Table 5 Components of remuneration


Market competitive
Attract and retain executive
talent in a highly competitive
global market

Annual performance-based
Reward for contribution to
annual Group and business unit
outcomes and achievement of
personal objectives

Shareholder interest aligned


Reward for long-term
shareholder value creation

Total remuneration
Fixed remuneration
Between 29-42% of total target
annual remuneration

Comprising cash salary,


superannuation and other
benets
Positioned comparably to
other companies of similar
market capitalisation and
global competitors

Performance-based/deferred at-risk remuneration


Between 58-71% of total target annual remuneration

Short Term Incentive


program
Targets linked to annual
performance at a:
Group level
Business unit level
Individual level

Long Term Incentive program


Vesting conditions based on:
TSR
EPSA
Strategic Objectives (for
CEO)/Service (Time) Based
Conditions

Creation of high performance culture


Remunerate executives for creating shareholder value

32

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 33

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 35 of 136

Remuneration Report

The Groups remuneration policy requires that remuneration levels properly reect the duties and responsibilities
of Executive KMP. Typically, when Executive KMP meet target levels of performance, the combined elements of
remuneration are designed to provide remuneration at the market median. For superior performance, the Group
aims to remunerate Executive KMP in the range between the market median and the 75th percentile for total
remuneration, in comparison to benchmark companies for each role. Factors such as the comparative size of the
role and the individuals experience in the role are considered in setting remuneration levels relative to the policy.
The Board aims to achieve a balance between xed and performance related components of remuneration.
The actual remuneration mix for the Executive KMP will vary depending on the level of performance achieved at
a Group, business unit and individual level. Where stretch targets for short term and long term incentives are met,
then the proportion of total remuneration derived from at-risk components will be higher. This higher weighting of
performance related remuneration reects the Boards commitment to performance-based rewards.
The relative target proportions of Executive KMP remuneration that are at-risk and those that are xed are
as follows:
Table 6 Details of remuneration: xed and at-risk as a percentage of target remuneration

Name

Fixed
remuneration At-risk STI
%
%

At-risk LTI1
%

Total
%

CEO and Managing Director


JR Odell

29

29

42

100

A Korsanos

39

26

35

100

M Sweeny

42

27

31

100

Other Executive KMP

1.

Represents the target remuneration package value at grant assuming all performance conditions have been met, excluding any contractual
severance entitlements.

For full details of Executive KMP remuneration for the Reporting Period, refer to Table 13.
Fixed remuneration
Executive KMP receive a competitive xed remuneration comprising cash salary, superannuation and other benets
which make up the xed remuneration component of their total remuneration package.
Fixed remuneration is reviewed annually against the external market and compared to similar roles from a
specically identied peer group of companies. The international nature of the Groups operations and the global
responsibilities of the Executive KMP, in addition to the mix of knowledge, skills, experience and performance,
are considered when determining remuneration. The onerous probity requirements placed on certain Executive
KMP by regulators of the global jurisdictions in which the Group operates are also considered in determining
remuneration levels.
Executive KMP have the choice to have a combination of benets including additional superannuation contributions
and the provision of a vehicle provided from their xed remuneration.
Executive KMP also (in certain instances) receive other benets, including salary continuance, trauma, death and
disability insurance. Executives are able to maintain memberships to appropriate professional associations. As
appropriate, expatriate executives receive additional support including accommodation allowances, travel and life
insurance and taxation advice.
Executive KMP do not receive retirement benets other than those disclosed in Table 13.

Aristocrat Leisure Limited Annual Report 2015

33

Exhibit F, pg. 34

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 36 of 136

Remuneration Report

Section 4 Remuneration policy and structure


continued

4.2.1 STI Plan


What is the STI Plan and who participates?
The STI Plan is an annual incentive program that,
in respect of Senior Executives, may involve a cash
and/or equity-based reward, payable subject to the
satisfaction of performance conditions.
Participants in the STI Plan include Senior Executives
and other employees who hold positions that are
identied as being able to directly inuence the
Groups performance.
Recent remuneration initiatives
Following the acquisition of VGT, a majority of the
Groups revenue is generated within the US and a
majority of its senior leadership team is US based.
As such, during the Reporting Period, the Board
conducted a review of market data and executive
remuneration practices in Australia and the US and
identied some meaningful differences, primarily with
respect to the design of variable reward programs.
Arising out of that exercise, the following elements
of the STI Plan were identied as needing to be
addressed:

the signicant increase in the impact of


amortisation of acquired intangibles on Group
performance following the acquisition of VGT;

the Business Score Threshold of 90% was high


in comparison to market practice, where it is
generally set between 80 and 85%; and

the funding curve above target was less


competitive compared to market practice,
providing less upside for outperformance against
Business Score Goals.

Consequently, the Board determined that the


following renements apply to grants under the 2015
STI Plan in order to: (i) maintain a market competitive
approach to Senior Executive remuneration, (ii)
provide a common interest between executives and
shareholders by aligning the rewards that accrue
to management to the creation of shareholder
value, and (iii) provide a relative, objective, external,
market-based performance measure against those
companies with which the Company competes for
capital and talent:

34

Replacing NPAT with NPATA as part of


Business Score Goals: NPATA replaced
NPAT as one of the target metrics comprising
the Business Score Goals. The following two
performance target metrics be used to align
reward with shareholder returns:

NPATA with a weighting of 70%; and


FCF with a weighting of 30%.

Reducing the entry point into the STI Plan:


The Business Score Threshold be set to 85%.

Enhanced rewards (self-funded) for Business


scores in excess of target: Enhanced rewards
for signicant outperformance be built into the STI
Plan. The modication to the funding curve above
the Business Score Goals is self-funding.

What are the maximum and minimum amounts


that Senior Executives can earn under the
STI Plan?
Senior Executives can earn between nil and 200%
of that Senior Executives target STI, subject to the
satisfaction of business and individual performance
objectives.
As set out in Table 6, the target STI of an Executive
KMP will vary from 27% to 29% of their total
remuneration depending on the role, seniority of the
individual and geographical location.
No payment is made under the STI Plan if the
Business Score Threshold is not met. Special
mitigating circumstances may be accepted,
determined or approved on a case by case basis
by the CEO and Managing Director, and subject to
approval by the HR and Remuneration Committee
and the Board.
Equally, no payment is made unless Individual
Performance Goals are achieved at a satisfactory
level, signied by the Board approving an Individual
Performance Rating of Meets Most Requirements
or better. The Individual Performance Rating is further
explained below.
In combination, incentive opportunities increase
with improved Business and Individual performance
with higher range payments achievable when both
the Business and the Individual have performed at a
superior level.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 35

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 37 of 136

Remuneration Report

How are STI payments determined?


STI payments are determined based on the following calculation:
Individual STI
Payment (capped
at 200% of target)

Individual
STI Target

Business Score
Multiplier

Individual
Performance
Multiplier

Business Score Multiplier


This is a multiplier to the incentive of between 0% and 200% based on the Business Score. For employees in a
region or business unit, the Business Score result is based 50% on the Group result and 50% on their regional or
business unit result.
Business Score for employees in a region or business unit
The Business Score is a combination (average) of the Group Score and the Regional Score.
Group Score (50%)

Regional Score (50%)

1.

NPATA with a weighting of 70%


FCF with a weighting of 30%

EBIT with a weighting of 70%


FCF 1 with a weighting of 30%

In the case of employees in a region or business unit, the FCF metric is measured as operating cash ow against an EBIT (not NPATA)
conversion rate set by the Board.

For employees whose role is multi-regional or global in nature including all Executive KMP the Regional
component is replaced by the Group component, meaning they are judged entirely on the Groups result.
The nal Business Score is converted to the Business Score Multiplier according to the following chart:

Business Score Multiplier

200%
160%
120%
80%
40%
0

85%

100%

105%

110%

115%

120%

No incentive is paid if the Business Score is below the Business Score Threshold (being 85% of the Business Score
Goals). If the Business Score is above 120%, the multiplier will cap at 200%.

Aristocrat Leisure Limited Annual Report 2015

35

Exhibit F, pg. 36

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 38 of 136

Remuneration Report

Section 4 Remuneration policy and structure continued


4.2.1 STI Plan continued
Individual Performance Multiplier
This is a multiplier to the incentive of between 0% and 150% based on the performance of the individual.
The following ratings summary is used to assess individual performance for all STI Plan participants:
Table 7 Individual Performance Ratings
Underperforms

Meets Most
Requirements

is not meeting many

of the inherent
requirements of the job
and/or delivering the

expected results
is not exhibiting
some or many of the

corporate behaviours

Meets Requirements

has achieved most,

but not all, of their


objectives

exhibiting some of, but


not all of, the corporate
behaviours
may be new to role and
demonstrating strong
potential

Exceeds Requirements

meets the expectations


of their job
clearly and consistently

demonstrates the
corporate behaviours

has achieved all of their


stretch objectives at a
superior level
role models the
corporate behaviours

Individual key Performance Goals are determined for each Senior Executive to deliver the Groups short-term and
long-term success, in line with the business plan. See Table 4 for more details.
The nal performance rating is converted to the Individual Performance Multiplier according to the following:
Outcome

Min

Underperforms

0%

Meets most
requirements

Meets
requirements

Exceeds
requirements

60%

80%

120%

Mid

0%

75%

100%

130%

Max

0%

90%

120%

150%

Below a Meets Most Requirements level no incentive will be paid, and for an Exceeds Requirements level the
multiplier will cap at 150%. The nal percentage applied within the range will be determined by the individuals
manager. In the case of Executive KMP and other CEO direct reports, these will be reviewed by the Board.
The maximum incentive that can be paid to any individual is capped at 200% of STI target.
Why were these performance conditions chosen?
The Board considers these performance measures to be appropriate as they are aligned with the Groups
objectives of delivering sustainable growth and sustainable superior returns to shareholders. In addition, Senior
Executives have a clear line of sight to the targets and are able to affect results through their actions.
Performance measures and conditions are reviewed annually and are subject to change as considered
appropriate. Financial targets are established following Board review and approval of the annual plan for the
following year.
The Board has a discretion to review and amend the Business Score Goals during the performance period (up or
down) where signicant unforeseen events have occurred which are outside of the control of management.
Who assesses performance and when?
In respect of the performance of the CEO and Managing Director, the Board assesses performance against the
performance conditions with the benet of advice from the HR and Remuneration Committee.
In respect of the Executive KMP (other than the CEO and Managing Director), the CEO and Managing Director
assesses the Executive KMPs performance against the performance conditions and makes recommendations
to the HR and Remuneration Committee which advises the Board in relation to the CEO and Managing Directors
recommendations and the review process.
The assessment process as set out above is consistent with current market practice.

36

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 37

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 39 of 136

Remuneration Report

Is the STI a cash award and when is it paid?


For Senior Executives participating in the STI Plan,
part of the STI is delivered in cash and the remainder
is deferred as an equity award. If an STI award is
at target, a minimum of 50% of the award will be
deferred as an equity award (being PSRs). The Board
has the discretion to determine the percentage which
will be deferred as an equity award if the award is
less or greater than target. During the deferral period,
dividends will be accrued and will be paid at the end
of the deferral period to the extent that the PSRs vest.
Once the HR and Remuneration Committee
recommends and the Board determines that the
performance conditions have been met, the payment
of cash and the grant of PSRs will also then be
approved.
Fifty percent (50%) of the PSRs granted to the Senior
Executive will vest after one year and the remaining
50% will vest after two years. There will be no
additional performance conditions applicable to the
vesting of the PSRs to the Senior Executive, with
the exception of the continued employment by the
Senior Executive with the Group (see below for further
information on forfeiture of PSRs).
The PSRs will be issued at the volume-weighted
average price (VWAP) over the ve trading days
immediately prior to and including the last day of the
performance period (for awards under the 2015 STI
Plan this was 30 September 2015).
Can the PSRs be forfeited?
Unvested PSRs will be forfeited if the Senior Executive
leaves the Groups employment. The Board has
discretion to determine otherwise for a Qualifying
Reason (such as death, redundancy or if the
participant is a good leaver) or any other reason.
As a general rule, a Senior Executive will not be
deemed to be a good leaver to the extent they are
terminated for cause, breach or underperformance or
they resign from the Company.
Specic information relating to the percentage of
the STI which was paid and the percentage that
was forfeited for the Senior Executives is set out in
Table 14.
Is there a clawback mechanism?
The STI Plan rules contain clawback provisions which
apply to awards from the nancial year commencing
1 January 2011 onwards. Pursuant to the
provisions, in the event of a material misstatement
of performance, or other factors deemed by
the Board to be materially signicant, the Board
has the discretion to clawback STI payments
from deferred amounts and (if necessary) future
earnings of the CEO and Managing Director and
Executive Leadership Team. The Board considers
that the clawback provisions enhance the Groups
remuneration governance framework by providing
an additional control to ensure reward is aligned to
performance and shareholder interests.

4.2.2 LTI Plan


This section summarises the terms of the 2015
LTI Plan (Series 28 and 29).
What is the LTI Plan?
The LTI Plan links reward with ongoing creation of
shareholder value through the grant of PSRs. Each
PSR granted will entitle the participant to one ordinary
share in the Company, subject to satisfaction of
vesting conditions.
Details of the grants made to Executive KMP during
the 2015 nancial year are set out in Table 15.
Who participates in the LTI Plan?
Participants in the LTI Plan include Executive KMP as
well as any employee of the Group who is invited by
the Board to participate. Following the most recent
review of incentive arrangements across the Group,
the Board determined that participation in the LTI Plan
will be limited to Senior Executives in 2015.
What are the key terms of the PSRs?
PSRs are granted at no cost to the participant.
Each PSR granted will entitle the participant to one
ordinary share in the Company, subject to satisfaction
of vesting conditions set by the Board in respect of
the grant.
If the relevant vesting conditions are satised
at the end of the performance period, then the
PSRs will vest (ordinarily following the FY results
announcement, on or around November) and fully
paid shares in the Company will be allocated to the
participant at no cost.
PSRs granted under the plan are not transferable.
Participating Senior Executives are prohibited from
entering into hedging arrangements in respect of
unvested PSRs.
Vesting conditions, the designated performance
period and the quantity of the PSRs offered to each
participant are determined by the Board on advice
from the HR and Remuneration Committee. Further
information in relation to the vesting conditions and
performance periods is set out below.
Why does the Board consider the LTI to be an
appropriate incentive?
The LTI Plan facilitates share ownership by the
Senior Executives and other key employees and
links a signicant proportion of their potential
remuneration with the key performance and retention
drivers which underpin sustainable and superior
shareholder returns.

Aristocrat Leisure Limited Annual Report 2015

37

Exhibit F, pg. 38

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 40 of 136

Remuneration Report

Section 4 Remuneration policy and structure


continued
4.2.2 LTI Plan continued
Recent remuneration initiatives
Following on from the review of market data and
executive remuneration practices (noted in the
Executive Summary), the following elements of the
LTI Plan were identied during the Reporting Period
as needing to be addressed:

two nancial measures (TSR and EPS) were less


competitive to peers and others in the market who
have elements of service based vesting (restricted
stock) or achievement of strategic goals; and

a participants LTI dollar target value was set


reecting the use of fair value to determine
number of PSRs, however there is an emerging
trend for the use of face value to calculate
PSR grants. Fair value methodology takes into
account the probability or likelihood of achieving
performance hurdles in valuing the LTI instrument
for allocation purposes, whilst face value
methodology typically calculates the number of
instruments for allocation based on the share
price at date of grant (more particularly, based
on the 5 day VWAP leading up to the start of the
performance period).

Consequently, the Board determined that the


following renements apply to grants under the 2015
LTI Plan in order to (i) maintain a market competitive
approach to Senior Executive remuneration, (ii)
provide a common interest between Senior Executive
and shareholders by aligning the rewards that accrue
to management to the creation of shareholder
value, and (iii) provide a relative, objective, external,
market-based performance measure against those
companies with which the Company competes for
capital and talent:

Strategic and Service based vesting


conditions: Inclusion of a third vesting condition
in relation to 40% of the LTI grant, being the
achievement of strategic objectives as set by the
Board (for the CEO) and service based vesting
(for all other participants); and
Fair value to face value: A move from fair value
to face value to determine the number of PSRs
to be granted to participants.

These changes were previously disclosed to the


market in the Companys 2015 Notice of Meeting in
connection with a resolution seeking approval for the
grant of PSRs to the CEO.

How is the number of PSRs determined?


The actual number of PSRs to be granted to a Senior
Executive will be determined by:
(a) calculating the face value of the Companys
shares based on the volume-weighted average
price for the ve trading days up to and including
the day before the start of the performance period
(the Face Value); and
(b) dividing the LTI Opportunity by the Face Value and
rounding to the nearest whole gure.
In determining the LTI Opportunity, the Board will
take into account the nature of the position, the
context of the current market, the function and
purpose of the long-term component and other
relevant information. For grants under the 2015 LTI
Plan, a participants LTI Opportunity will be grossed
up to ensure that the value of the grant (taking into
account all other factors) will be the same as if done
under the fair value methodology.
What are the vesting conditions for the PSRs?
The Board determined that the following vesting
conditions will apply to grants under the 2015
LTI Plan:
a Relative TSR vesting condition in relation to
30% of the PSRs granted;

a Relevant EPSA vesting condition in relation


to 30% of the PSRs granted; and

a vesting condition relating to achievement


of strategic objectives set by the Board
(Strategic Objectives) for the CEO and service
based vesting conditions (Service Based) for
all other participants in relation to 40% of the
PSRs granted.

Series 28 and 29 PSRs were granted in 2015.


The performance period for Series 28 and 29 is
1 October 2014 to 30 September 2017.
Table 15 sets out further information on the PSRs
granted to Executive KMP in 2015.
How is the number of vested PSRs determined?
Series A Relative TSR vesting condition
(30% of total PSRs)
Relative TSR performance will be assessed over a
three year period which will commence at the start of
the nancial year during which the PSRs are granted.
In order for any of the PSRs to vest pursuant to
the Relative TSR vesting condition, the Companys
compound TSR (calculated by reference to share
price appreciation plus dividends) must be equal to or
greater than the median ranking of constituents of the
Peer Comparator Group.
For grants made during the Reporting Period, the
entities comprising the Peer Comparator Group are
the constituents of the S&P/ASX100 Index as at
1 October 2014.

38

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 39

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 41 of 136

Remuneration Report

The link between the Companys TSR performance and the percentage of the PSRs which will vest pursuant to the
Relative TSR vesting condition is represented in the following table:
Table 8 TSR vesting percentages
Company TSR ranking against
Peer Comparator Group

PSRs subject to Relative TSR vesting condition that vest (%)

Below the median ranking

0%

At the median ranking

50%

Above the median ranking but below the


75th percentile

Between 50% and 100%, increasing on a straight line basis

At or above the 75th percentile

100%

The Board may adjust the TSR vesting conditions to ensure that an executive is neither advantaged nor
disadvantaged by matters outside of managements control that affect achievement of the vesting conditions.
Series B Relevant EPSA vesting condition (30% of total PSRs)
The Relevant EPSA vesting condition is measured by comparing the Companys compound annual EPSA growth
rate (CAGR) over a three year period (1 October 2014 to 30 September 2017 in respect of grants under the 2015
LTI Plan) against the minimum EPSA growth and the maximum EPSA growth thresholds, as set by the Board at
the beginning of the performance period. The Board selected Relevant EPSA as a vesting condition on the basis
that it:

is a relevant indicator of increases in shareholder value;

neutralises the tax effected amortisation expense of acquired intangibles (most notably VGT), which is a noncash charge and not representative of underlying performance of the business and cash ow generation; and

is a target that provides a suitable line of sight to encourage executive performance.

Relevant EPSA performance will be measured using the most recent nancial year-end prior to the award as the
base year, and the nal nancial year in the three year performance period as the end year.
Relevant EPSA will be calculated by dividing the Companys NPATA for the relevant reporting period by the
weighted average number of ordinary shares in the Company on issue during that period.
The EPSA growth thresholds set by the Board for the performance period will be disclosed in the Remuneration
Report published in respect of the year in which PSR vesting is tested.
As the Relevant EPSA component is determined as the compound EPSA growth over a three year period, the
extent of vesting of the Relevant EPSA component of the LTI cannot be determined until the conclusion of the three
year performance period.
The link between the Companys compound annual EPSA growth rate and the percentage of the PSRs which will
vest pursuant to the Relevant EPSA vesting conditions is represented in the following table:
Table 9 EPSA vesting percentages
Companys EPS performance

% of vesting of PSRs

Less than the minimum EPS growth threshold

0%

Equal to the minimum EPS growth threshold

50%

Greater than the minimum EPS growth threshold,


up to the maximum EPS growth threshold

Between 50% and 100%, increasing on a straight line basis

Greater than the maximum EPS growth threshold

100%

The Board may adjust the Relevant EPSA vesting conditions to ensure that an executive is neither advantaged nor
disadvantaged by matters outside of managements control that affect achievement of the vesting conditions.

Aristocrat Leisure Limited Annual Report 2015

39

Exhibit F, pg. 40

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 42 of 136

Remuneration Report

Section 4 Remuneration policy and structure


continued

The Board selected Relevant EPSA as a vesting


condition on the basis that it:

4.2.2 LTI Plan continued

is a relevant indicator of increases in


shareholder value;

neutralises the tax effected amortisation expense


of acquired intangibles (most notably VGT), which
is a non-cash charge and not representative of
underlying performance of the business and cash
ow generation; and

is a target that provides a suitable line of sight


for executives.

How is the number of vested PSRs determined?


continued
Series C Strategic objectives/service (time) based
vesting condition (40% of total PSRs)
Strategic Objectives (for the CEO)
Achievement of the Strategic Objectives condition
will be measured based on the Boards qualitative
assessment of performance during the three year
period against dened strategic parameters which
include developments in the Companys recurring
revenue and digital businesses, maximising
opportunities in the Class II market and successful
development of senior management capabilities.
As the objectives set by the Board are assessed over
a three year period, the extent of vesting of the
Strategic Objectives component of the LTI Plan
cannot be determined until the conclusion of the three
year performance period.
The objectives and the Boards assessment of the
Companys achievement of these objectives will be
disclosed in the Remuneration Report published in
respect of the year in which PSR vesting is tested.
Service (time) based (all other participants)
The serviced (time) based element of the LTI Plan will
vest subject to the participant being employed by
a member of the Group for the entire performance
period, and having maintained an adequate level of
individual performance, as determined by the Board
(Service/Time Based Conditions).
Why were these vesting conditions chosen?
The Board selected Relative TSR as a vesting
condition on the basis that it:

ensures an alignment between comparative


shareholder return and reward for the executive;

provides a relative, objective, external, marketbased performance measure against those


companies with which the Company competes
for capital and talent; and

is widely understood and accepted by various


key stakeholders.

40

The Serviced Based Condition ensures that the


Groups LTI Plan is competitive to peers who have
elements of service based vesting (restricted stock).
Who assesses performance and when?
Relative TSR and Relevant EPSA results are
calculated by the Company and the remuneration
adviser, as soon as practicable after the end of
the relevant performance period. The calculations
are considered by the Board to determine vesting
outcomes. This process is consistent with current
market practice.
Is there any retesting of vesting conditions?
The vesting conditions are tested only at the end
of the performance period. There is no retesting of
vesting conditions.
Are the shares granted upon vesting of PSRs
subject to restrictions?
Shares allocated on vesting of the PSRs are subject
to the terms of the Groups Share Trading Policy, and
carry full dividend and voting rights upon allocation.
Are the shares issued or acquired on-market?
It is the current policy of the Group to issue new
shares to satisfy the vesting of PSRs. The Board
also has discretion to acquire shares on-market
to satisfy vesting of PSRs when they believe it to
be appropriate.

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 41

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 43 of 136

Remuneration Report

What happens if the Senior Executive ceases employment during the performance period?
If a participant in the LTI Plan ceases employment with the Group during the rst 12 months of the performance
period, regardless of the reason, then any PSRs in relation to that performance period will lapse.
If a participant ceases employment with the Group after the rst 12 months of the performance period, the Board
has the express discretion to determine that some or all PSRs vest or lapse.
Where a participant acts fraudulently, dishonestly, joins a competitor or is, in the Boards opinion, in breach of his or
her obligations to the Group, then any unvested PSRs will lapse and any shares in the Group allocated but not yet
withdrawn pursuant to the terms of the LTI Plan Rules will be forfeited.
What happens if a change of control event occurs?
If a change of control event occurs, the Board determines (in its discretion) the appropriate treatment regarding
PSRs. Where the Board does not exercise this discretion, there will be a pro rata vesting of PSRs.
4.3 Service agreements
The remuneration and other terms of employment for the Executive KMP are formalised in service agreements,
which have no specied term. Each of these agreements provide for performance related bonuses under the STI
program (the terms of which are described in Section 4.2.1), and participation, where eligible, in the Groups LTI
program (the terms of which are described in Section 4.2.2). Other major provisions of the service agreements of
the Executive KMP are as follows:
Table 10 Service agreements
Notice to
be given
by Group1

Termination payment

Postemployment
restraint

6 months

12 months

12 months (xed remuneration)

12 months

A Korsanos

3 months

3 months

6 months (xed remuneration)

6 months

M Sweeny

3 months

12 months (xed remuneration)

12 months

Notice to
be given
by executive

CEO and Managing Director


JR Odell
Other Executive KMP

1.

Payments may be made in lieu of notice period.

4.4 Share trading policy


The Groups share trading policy prohibits the use of Derivatives (as dened in the policy) in relation to unvested
equity instruments, including PSRs and vested securities which are subject to disposal restrictions. Derivatives may
be used in relation to vested positions which are not subject to disposal restrictions, subject to compliance with the
other provisions of the share trading policy.
Senior Executives are strictly prohibited from entering into a margin loan or similar funding arrangement to
acquire the Companys securities and from using Company securities as security for a margin loan or similar
funding arrangements.
Breaches of the Groups share trading policy are regarded very seriously and may lead to disciplinary action being
taken (including termination of employment).

Aristocrat Leisure Limited Annual Report 2015

41

Exhibit F, pg. 42

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 44 of 136

Remuneration Report

Section 5 Non-Executive Director remuneration


Details of the Non-Executive Directors of the Company during the Reporting Period are provided in the
Directors Report.
5.1 Board policy on Non-Executive Director remuneration
The remuneration of the Non-Executive Directors is not linked to the performance of the Group in order to maintain
their independence and impartiality. In setting fee levels, the HR and Remuneration Committee, which makes
recommendations to the Board, obtains advice from an independent remuneration adviser and takes into account
the demands and responsibilities associated with the Directors roles and the global scope and highly regulated
environment in which the Group operates. The Board will continue to review its approach to Non-Executive Director
remuneration to ensure it remains in line with high standards of corporate governance.
5.2 Components and details of Non-Executive Director remuneration
Non-Executive Directors receive a xed fee (inclusive of superannuation and committee memberships) for services
to the Board. The Chair of each committee receives an additional fee for that service.
Non-Executive Directors fees (including committee fees) are set by the Board within the maximum aggregate
amount of A$2,000,000 approved by shareholders at the AGM in February 2013. Prior to this, the annual fee cap
was A$1,750,000.
During the Reporting Period, the Board engaged Egan Associates to undertake a review of contemporary market
practices in relation to Non-Executive Director emoluments. Egan Associates also benchmarked market practices
for non-resident Directors who are required to attend Board meetings away from their principal residential domicile.
No remuneration recommendations, as dened by the Corporations Act 2001 (Cth), were made by Egan Associates
in this regard.
The Board determined that the fees below be payable to Non-Executive Directors during the Reporting Period.
Table 11 Non-Executive Director fees
From 1 April 2015
Other fees per annum1

Board fees per annum

$215,000 for Non-Executive Director


$460,000 for Chairman2

Additional $25,000 for Committee Chair2


Additional $40,000 for Lead US Director

1.

Fees paid to Australian-based Non-Executive Directors are paid in AUD. Fees paid to US-based Non-Executive Directors are paid in USD
converted at a rate of A$1 to US$1. Inclusive of statutory superannuation obligations made on behalf of Australian-based Non-Executive
Directors.

2.

Inclusive of all statutory superannuation obligations and committee service.

From 1 October 2014 to 31 March 2015


Board fees per annum

Committee Chair fees per annum

A$200,000 for Non-Executive Director


A$425,000 for Chairman

Additional A$15,000 for Committee Chair

The regulatory requirements of the environment in which the Company operates impose a considerable burden
on the Non-Executive Directors and their families who are required to disclose detailed personal and nancial
information and submit to interviews, including in foreign jurisdictions. These requirements are taken into account
in determining the fees payable to Non-Executive Directors. Regard was also had to time commitments required
of Non-Executive Directors in connection with the number of Board and Committee meetings that Non-Executive
Directors attend each year.
Non-Executive Directors are entitled to be reimbursed for all reasonable business related expenses, including travel,
as may be incurred in the discharge of their duties.
The Group does not make sign-on payments to new Non-Executive Directors and the Board does not provide for
retirement allowances for Non-Executive Directors.
Given the large amount of additional work undertaken by the Board during the Reporting Period, particularly in
relation to the diligence, negotiation and execution of the VGT acquisition and associated equity and debt nancing,
it was determined that each NED would receive a xed sum of A$25,000 in addition to the fees noted above.
The remuneration details of Non-Executive Directors for the Reporting Period are set out in Table 17.

42

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 43

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 45 of 136

Remuneration Report

Section 6 Alignment between remuneration and Group performance


As detailed in Sections 4.2.1 and 4.2.2, various elements of the Groups remuneration policy are linked to Group
performance, in particular, the achievement of the Business Score Goals set by the Board under the STI Plan (being
NPATA, EBIT and FCF targets) and the Relevant EPSA, Relative TSR and strategic objectives/service based vesting
conditions set by the Board under the LTI Plan.
When target performance is achieved, target executive rewards are earned. When above target STI performance is
achieved, executives earn above target rewards.
Over the past ve nancial years, the Groups remuneration policy has been aligned to Group performance and
value growth for shareholders.
The table and graph below set out information about movements in shareholder wealth for the nancial years
ended 31 December 2011 to 30 September 2015. Further details about the Groups performance over this period
can be found in the Five Year Summary contained in this Annual Report.
Table 12 Summary of movement in shareholder wealth
12 months to
30 Sept 2015

12 months to
30 Sept 2014

Share price as at nancial


year-end (A$)

8.61

5.84

4.62

2.69

2.20

Total dividends paid (cps)

17.0

16.0

14.5

6.0

6.5

30.1/37.1

22.8/23.1

19.4

8.3

12.3

50.3%

29.9%

77%

25%

-24.2%

170%

110%

66%

100%

27%

94.4%

n/a

n/a

n/a

n/a

87.1%

30%

0%

0%

0%

EPS (fully diluted)/EPSA


(fully diluted) (cps)2
TSR (%)
Short term cash incentives
(% of maximum Group target)
Long term incentives (% vesting)
3 year performance period to
30 September
3 year performance period to
31 December

12 months to
9 months to
30 Sept 2013 30 Sept 20121

12 months to
31 Dec 2011

1.

For comparative purposes, the percentage of short term cash incentives and long term incentives disclosures relates to the 2012 STI award
and 2010 LTIP awards tested following the end of the performance period, being 31 December 2012.

2.

Excluding the effect of signicant items which are not representative of the underlying operational performance of the Group.

TSR performance
The following graphs demonstrate the Companys TSR performance versus that of the Peer Comparator Group
over (i) the 2012 LTI Grant performance period 1 January 2012 to 31 December 2014, and (ii) the 2013 LTI Grant
performance period 1 October 2012 to 30 September 2015.
Diagram: Aristocrat TSR Performance v Peer Comparator Group (%)
TSR: 1 January 2012 31 December 2014
250
ASX100 Index

ALL

221%

200
150
100

62%

Dec-14

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

50

Aristocrat Leisure Limited Annual Report 2015

43

Exhibit F, pg. 44

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 46 of 136

Remuneration Report

Section 6 Alignment between remuneration and Group performance continued


TSR performance continued
The Group achieved a TSR of 47.89% over the three year 2012 LTI Grant performance period compared to the
Peer Comparator Group of 15.37%. As a result, 100% of the PSRs linked to this measure vested.
TSR: 1 October 2012 30 September 2015
250
ASX100 Index

ALL

242%

200
150
100
50

Sept-15

Aug-15

Jun-15

Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

38%

The Group achieved a TSR of 49.72% over the three year 2013 LTI Grant performance period compared to the
Peer Comparator Group of 12.04%. As a result, 100% of the PSRs linked to this measure vested.
Diagram: Relationship between LTI outcomes and TSR/EPS
The graph below shows the correlation between Executive KMP LTI outcomes and key LTI nancial metrics
(TSR and EPS) over the past ve years.
Relationship between LTI outcomes and performance
40

Fully Diluted EPS (cents)

90%

35

Total percentage of vesting

80%

30

LTI outcomes %

70%
60%

25

50%

20

40%

15

30%

10

20%

Fully diluted EPS (cents)

100%

10%
0

0
Dec 2011

Sept 2012

Sept 2013

Sept 2014

Sept 2015(1)

Financial Year
(1) September 2015 LTI % vesting

44

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 45

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 47 of 136

Remuneration Report

Section 7 Remuneration tables and data


7.1 Details of Executive KMP remuneration
The following table reects the accounting value of remuneration attributable to Executive KMP, derived from the
various components of their remuneration. This does not necessarily reect actual amounts paid to Executive KMP
due to the conditional nature (for example, performance criteria) of some of these accrued amounts.
As required by the Accounting Standards, the table includes credits for PSRs which were forfeited during the year
and the amortised value of PSRs that may vest in future reporting periods.
Table 13 Statutory Executive KMP remuneration table

Longterm
benets

Postemployment
benets

Short-term benets

NonCash
Cash monetary
TermSuper1
2
salary bonuses benets3 annuation ination4
$
$
$
$
$

Long
service
leave4
$

Share-based
payments5
STI
PSRs6
$

% of
sharebased
remuneration
(LTI PSRs)

Total

LTI
PSRs7
$

26,939 1,322,500 2,065,058

6,717,731

30.7

CEO and Managing Director


JR Odell
12 months to
30 Sept 2015

1,617,205 1,650,000

3,234

32,795

12 months to
30 Sept 2014

1,624,705 1,622,500

13,337

25,117

47,818

937,791

944,569

5,215,837

18.1

Other Executive KMP


A Korsanos
12 months to
30 Sept 2015

661,746

480,000

19,045

14,138

421,370

556,471

2,152,770

25.8

12 months to
30 Sept 2014

619,473

552,000

18,027

18,632

290,461

282,988

1,781,581

15.9

12 months to
30 Sept 2015

765,124

433,248

330,118

182,030

1,710,520

10.6

12 months to
30 Sept 2014

17,688

168,350

112,233

3,988

302,259

12 months to
30 Sept 2015
Total
3,044,075 2,563,248

3,234

51,840

41,077 2,073,988 2,803,559 10,581,021

26.5

125,570

43,144

66,450 1,232,240 1,227,557

16.8

M Sweeny8

12 months to
30 Sept 2014
Total

2,261,866 2,342,850

7,299,677

Aristocrat Leisure Limited Annual Report 2015

45

Exhibit F, pg. 46

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 48 of 136

Remuneration Report

Section 7 Remuneration tables and data continued


7.1 Details of Executive KMP remuneration continued
1.

Amounts shown as cash salary and fees include amounts sacriced in lieu of other benets at the discretion of the individual. To the extent
that benets are paid and subject to Fringe Benets Tax (FBT), the above amount includes FBT.

2.

Amounts reect the non-deferred cash component of the 2015 STI incentives.

3.

Non-monetary benets include insurance and travel costs, relocation costs, expatriate related costs and associated FBT.

4.

The amounts provided for by the Group during the nancial year in relation to accruals for long service leave.

5.

In accordance with the requirements of the Australian Accounting Standards, remuneration includes a proportion of the fair value of equity
compensation granted or outstanding during the year. The fair value of equity instruments which do not vest during the reporting period is
determined as at the grant date and is progressively allocated over the vesting period. The amount included as remuneration is not related
to or indicative of the benet (if any) that individual Executive KMP may ultimately realise should the equity instruments vest. An independent
accounting valuation for each tranche of PSRs at their respective grant dates has been performed by EY. In undertaking the valuation of the
PSRs, EY has used a TSR model and an EPSA model. These models are described below:
TSR model
EY uses the Monte-Carlo simulation-based model which incorporates the impact of performance hurdles and the vesting scale on the value
of the PSRs. This pricing model takes into account factors such as the Companys share price at the date of grant, volatility of the underlying
shares, the risk-free rate of return, expected dividend yield and the likelihood that vesting conditions will be met. The accounting valuation of
rights issued is allocated equally over the vesting period.
EPSA model
The Binomial Tree model was used to determine the fair value of PSRs. This pricing model takes into account factors such as the Companys
share price at the date of grant, the risk-free rate of return, expected dividend yield and time to maturity. The accounting valuation of rights
issued is allocated over the vesting period so as to take into account the expected level of vesting over the performance period.
For the purposes of remuneration packaging, the face value (volume-weighted average price for the ve trading days up to and including
the day before the start of the performance period) is adopted for determining the total number of PSRs to be allocated as this valuation best
reects the fair value of PSRs to each executive at that time. The requirements of AASB 2 in relation to the treatment of non-market vesting
conditions, such as earnings per share growth and share-based remuneration requiring shareholder approval, results in accounting expense
and disclosures differing from the value allocated for the purposes of remuneration packaging.

6.

A component of STI awards payable to Executives KMP will be satised by the grant of deferred share rights. Half will vest after one year, with
the remainder vesting after two years, both subject to relevant forfeiture conditions. The accounting expense for STI share rights represents
the expense attributable to the service period that has been completed for each deferred award. Therefore, the amounts reected for the
12 months to 30 September 2015 include the accounting accruals attributable to deferred share rights pursuant to the 2013, 2014 and 2015
STI awards.

7.

The share-based payments expense includes the impact of PSRs that were granted in previous years that are being expensed for accounting
purposes over the vesting period, as well as the PSRs that were granted in the reporting period. Remuneration in the form of PSRs includes
credits for the earnings per share (EPS) component of 2012 LTI grant forfeited during the period.

8.

M Sweeny joined the Company on 22 September 2014.

Table 14 Details of 2014 short term awards paid and deferred


For the
12 months
ended 30
Sept 2015

Total
award1
$

Cash
payment2
$

Deferred
component3
$

No. Share
Rights
vesting
1 Oct 20163

1,650,000

1,650,000

97,141

No. Share Total award


Rights
as % of
vesting
target
3
1 Oct 2017
STI

% of total
award
deferred

CEO and Managing Director


JR Odell

3,300,000

97,141

200%

50%

Other Executive KMP


A Korsanos

960,000

480,000

480,000

28,259

28,259

200%

50%

M Sweeny

821,491

433,248

388,243

28,345

28,345

180%

50%

1.

Amounts reect the value of the total 2015 awards. See footnotes 2 and 3 for an explanation of the cash and deferred components of the
total award.

2.

Amounts reect the cash component of the 2015 awards paid to participants. Amounts in USD are translated at the average rate for the year.

3.

Amounts reect the value of 2015 awards deferred into PSRs. Part of the deferred component of awards will vest on 1 October 2016 and the
remainder on 1 October 2017. The number of PSRs is determined using the ve day VWAP up to and including 30 September 2015, being
$8.4928. Amounts in USD are translated at the FX rate on the grant date.

46

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 47

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 49 of 136

Remuneration Report

LTI PSRs granted to Executive KMP, including their related parties, during the Reporting Period were as follows:
Table 15 Details of LTI PSRs granted to Executive KMP
Vested

Series1

Number
of PSRs
granted2,3

Grant date

Fair value4

Maximum
value of grant5

Forfeited

No.

No.

CEO and Managing Director


JR Odell

29A

122,867

27-Feb-2015

$5.07

$622,935

29B

122,867

27-Feb-2015

$6.91

$849,011

29C

163,822

27-Feb-2015

$6.91

$1,132,010

32,491

27-Feb-2015

$5.07

$164,729

Other Executive KMP


A Korsanos 28A

M Sweeny

28B

32,491

27-Feb-2015

$6.91

$225,513

28C

43,321

27-Feb-2015

$6.91

$299,348

28A

25,767

27-Feb-2015

$5.07

$130,639

28B

25,767

27-Feb-2015

$6.91

$178,050

34,356

27-Feb-2015

$6.91

$237,400

28C
Total

603,749

$3,839,635

1.

Series A is the Relative Total Shareholder Return (TSR) vesting condition, Series B is the Relevant Earnings Per Share before amortisation
of acquired intangibles from operating activities (EPSA) vesting condition and Series C is the Strategic Objectives/Service Based Element
vesting condition.

2.

As the PSRs only vest on satisfaction of vesting conditions, which are tested at the end of the performance period (1 October 2014 to 30
September 2017), none of the PSRs set out above have vested.

3.

Series 28 and 29 will vest in 2017 (testing occurs after the performance period), subject to the satisfaction of performance conditions.
Unvested PSRs will expire at that time if it has been determined that the vesting conditions were not met.

4.

The fair value of Series 28 and 29 PSRs was determined based on an accounting valuation performed by EY. For the TSR performance
condition, the valuation is calculated having regard to the likelihood that vesting conditions will be met. This value will not be equal to the
market value of a share at the commencement of the performance period as a result of PSRs being contingent rights to shares in the future.
The fair value of the PSR at the commencement of a performance period is inuenced by the Companys share price at the date of grant,
volatility of the underlying shares, the risk-free rate of return, expected dividend yield, time to maturity and the likelihood that vesting conditions
will be met.

5.

The maximum value of the grant is the fair value multiplied by the number of PSRs granted.

Aristocrat Leisure Limited Annual Report 2015

47

Exhibit F, pg. 48

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 50 of 136

Remuneration Report

Section 7 Remuneration tables and data continued


7.1 Details of Executive KMP remuneration continued
The following table sets out details of the movement in numbers of LTI PSRs during the Reporting Period:
Table 16 Details of the movement in numbers of LTI PSRs

Series

Performance
period
expiry date

Fair value
per right at
grant date

Balance at
1 Oct 2014

Granted
during
the year1

Vested2,3

Lapsed/
forfeited

Balance at
30 Sep 2015

CEO and Managing Director


JR Odell

20A4

31-Dec-2014

$2.03

405,000

(405,000)

20B4

31-Dec-2014

$2.80

945,000

(770,175)

(174,825)

229,850

22A

30-Sep-2015

$2.45

229,850

22B

30-Sep-2015

$3.50

536,150

536,150

25A

30-Sep-2016

$2.83

130,500

130,500

25B

30-Sep-2016

$4.52

304,500

304,500

29A

30-Sep-2017

$5.07

122,867

122,867

29B

30-Sep-2017

$6.91

122,867

122,867

29C

30-Sep-2017

$6.91

163,822

163,822

Other Executive KMP


A Korsanos 21A4

31-Dec-2014

$2.03

73,684

(73,684)

21B4

31-Dec-2014

$2.80

171,930

(140,123)

(31,807)

23A

30-Sep-2015

$2.45

49,000

49,000

23B

30-Sep-2015

$3.50

114,500

114,500

26A

30-Sep-2016

$2.83

42,391

42,391

26B

30-Sep-2016

$4.52

98,913

98,913

28A

30-Sep-2017

$5.07

32,491

32,491

28B

30-Sep-2017

$6.91

32,491

32,491

M Sweeny

1.

28C

30-Sep-2017

$6.91

43,321

43,321

27

21-Sep-2016

$5.80

55,775

55,775

28A

30-Sep-2017

$5.07

25,767

25,767

28B

30-Sep-2017

$6.91

25,767

25,767

28C

30-Sep-2017

$6.91

34,356

34,356

The value of the PSRs granted to Senior Executives during the year (including the aggregate value of PSRs granted) is set out in Table 14.
No Options were granted during the year to any Senior Executive.

2.

The value of each PSR on the date of vesting is the closing price of the Companys shares on the ASX on the preceding trading day.

3.

As shares are immediately allocated upon the vesting of PSRs, there will be no instances where PSRs are vested and exercisable, or vested
but not yet exercisable.

4.

On 2 February 2015, the Board determined that the (i) Relative TSR component of the PSRs under Series 20A, 20B, 21A and 21B had met
the required performance criteria and therefore vested and (ii) Relative EPS component of the PSRs under Series 20A, 20B, 21A and 21B had
achieved between threshold and target and therefore 81.5% vested. For the purposes of section 300A(1)(iv) of the Act the closing share price
on 2 February 2015 was $6.90.

48

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 49

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 51 of 136

Remuneration Report

7.2 Details of Non-Executive Director remuneration


The table below sets out NED remuneration for the Reporting Period.
Table 17 Details of Non-Executive Director remuneration

Short-term benets

Name

Year

Cash salary
and fees1
$

Sharebased
payments

Post-employment
benets

Fees
for extra
services2
$

Super- Retirement
annuation3
benets4
$
$

Options
and PSRs
$

Total
$

ID Blackburne12 months to
30 Sept 2015

423,586

25,000

18,914

467,500

12 months to
30 Sept 2014

421,870

3,130

425,000

12 months to
30 Sept 2015

189,498

25,000

18,002

232,500

12 months to
30 Sept 2014

193,442

16,558

210,000

12 months to
30 Sept 2015

207,763

25,000

19,737

252,500

12 months to
30 Sept 2014

190,684

24,316

215,000

12 months to
30 Sept 2015

277,374

25,000

1,324

303,698

12 months to
30 Sept 2014

212,399

2,601

215,000

12 months to
30 Sept 2015

207,763

25,000

19,737

252,500

12 months to
30 Sept 2014

187,531

17,469

205,000

12 months to
30 Sept 2015

207,763

25,000

19,737

252,500

12 months to
30 Sept 2014

141,800

13,200

155,000

12 months to
30 Sept 2015

1,513,747

150,000

97,451

1,761,198

12 months to
30 Sept 2014

1,347,726

77,274

1,425,000

RA Davis

RV Dubs

SW Morro

DCP Banks

KM Conlon

Total

1.

Amounts shown as cash salary and fees include amounts sacriced in lieu of other benets at the discretion of the individual. To the extent
that any non-monetary benets are subject to Fringe Benets Tax (FBT), amounts shown include FBT.

2.

Given the large amount of additional work undertaken by the Board during the Reporting Period, particularly in relation to the diligence,
negotiation and execution of the VGT acquisition and associated equity and debt nancing, it was determined that each NED would receive a
xed sum of A$25,000.

3.

Superannuation contributions include amounts required to satisfy the Groups obligations under applicable Superannuation Guarantee
legislation.

4.

Non-Executive Directors are not entitled to any retirement benet.

Aristocrat Leisure Limited Annual Report 2015

49

Exhibit F, pg. 50

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 52 of 136

Remuneration Report

Section 8 Shareholdings
8.1 Movement in shares
The number of shares (excluding those unvested under the STI Plan and the LTI Plan) in the Company held
during the year ended 30 September 2015 by each Non-Executive Director and Senior Executive, including their
personally related entities, are set out below.
No amounts are unpaid on any of the shares issued. Where shares are held by the Director or Executive KMP and
any entity under the joint or several control of the Director or Executive KMP, they are shown as benecially held.
Shares held by those who are dened by AASB 124 Related Party Disclosures as close members of the family of
the Director or Executive KMP or are held through a nominee or custodian are shown as non-benecially held.
The following sets out details of the movement in shares in the Company held by Non-Executive Directors or their
related parties during the year:
Table 18 Details of Non-Executive Director shareholdings

Type

Balance as Performance
shares
at 1 October
vested
2014

Other net
changes
during the
year

Balance
as at 30
September
2015

Non-Executive Directors
ID Blackburne

Benecially held
Non-benecially held

DCP Banks

Benecially held
Non-benecially held

KM Conlon

Benecially held
Non-benecially held

RA Davis
RV Dubs
SW Morro

127,851

10,000

137,851

30,851

30,851

5,418

5,418

Benecially held

19,335

19,335

Non-benecially held

14,005

14,005

Benecially held

32,851

32,851

Non-benecially held

Benecially held

30,000

5,000

35,000

Non-benecially held

All equity instrument transactions between the Non-Executive Directors, including their related parties, and the
Company during the year have been on arms length basis.

50

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 51

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 53 of 136

Remuneration Report

The following sets out details of the movement in shares in the Company held by Executive KMP or their related
parties during the year:
Table 19 Details of Executive KMP shareholdings not held under an employee share plan

Type

Balance as Performance
shares
at 1 October
vested
2014

Other net
changes
during the
year

Balance
as at 30
September
2015

CEO and Managing Director


JR Odell

Benecially held
Non-benecially held

334,077

1,367,875

(600,000)

1,101,952

107,187

281,850

(100,000)

289,037

Other Executive KMP


A Korsanos

Benecially held
Non-benecially held

M Sweeny

Benecially held

Non-benecially held

Other than share-based payment compensation effected through an employee share plan, all equity instrument
transactions between Executive KMP, including their related parties, and the Company during the year, have been
on arms length basis.
8.2 Loans with KMP
No KMP or their related parties held any loans from the Group during or at the end of the year ended 30 September
2015 or prior year.

Aristocrat Leisure Limited Annual Report 2015

51

Exhibit F, pg. 52

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 54 of 136

Remuneration Report

Section 9 Glossary
Business
Score

In the case of Executive KMP and employees in corporate functions, this is the result that is
based on the actual nancial performance of the Group in a nancial year, calculated by reference
to NPATA and FCF. In the case of employees in a region or business unit, this is the result that is
based 50% on the performance of the Group (as above) and 50% on the regional performance,
using EBIT in place of NPATA for both prot and FCF calculations.

Business
Score Goals

The Groups and individual business units/regions nancial performance goals, approved by the
Board at the start of the performance period, that need to be achieved under the STI Plan.

Business Score The minimum Business Score required to receive payment under the STI Plan. This is in effect the
Threshold
entry point into the STI Plan.
EBIT

Earnings before interest and tax, on a normalised basis excluding signicant items and results of
discontinued operations as disclosed in the Review of Operations section of the Annual Report.

EPS

Fully diluted earnings per share, normalised for signicant items and discontinued operations as
disclosed in the Review of Operations section of the Annual Report.

EPSA

Fully diluted EPS before amortisation of acquired intangibles.

Executive
KMP

Those KMP who were also part of the Groups Executive Leadership Team during the Reporting
Period, being (i) JR Odell (the CEO and Managing Director), (ii) A Korsanos (Chief Financial Ofcer,
Global Services and Company Secretary), and (iii) M Sweeny (the Chief Commercial Ofcer).

FCF

In the case of Executive KMP and employees in corporate functions, this is free cash ow
(measured as operating cash ow according to the Review of Operations net of capital
expenditure on gaming machines). In the case of employees in a region or business unit, EBIT is
used in place of NPATA for FCF calculations.

KMP

Key Management Personnel, being those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly, during the Reporting Period.

LTI Plan

The Groups long-term incentive plan.

NPAT

Net prot after tax normalised for signicant items and discontinued operations as disclosed in
the Review of Operations section of the Annual Report.

NPATA

Net prot after tax before amortisation of acquired intangibles, normalised for signicant items and
discontinued operations as disclosed in the Review of Operations section of the Annual Report.

Peer
Comparator
Group

For grants under each of the 2014 and 2015 LTI Plans, means constituents of the S&P/ASX100
Index, dened at the commencement of the performance period. For grants under LTI Plans prior
to the 2014 LTI Plan, means the S&P/ASX100 Index itself.

PSR

A performance share right that carries an entitlement to receive one ordinary share in the
Company when the PSR vests, subject to performance criteria being satised.

Relative TSR

The Companys compounded TSR measured against the ranking of constituents of the Peer
Comparator Group.

Relevant EPS

Cumulative EPS over the performance period compared to a target set by the Board at the
commencement of the performance period. This performance metric applied to grants under LTI
Plans prior to the 2014 LTI Plan.

Relevant EPSA EPSA for the nal nancial year of the relevant performance period. This performance metric has
been introduced in respect of grants under the 2014 LTI Plan.
Senior
Executives

The group of senior executives consisting of: (i) the Executive KMP, and (ii) other members of the
Executive Leadership Team of the Group. Details of the Executive Leadership Team of the Group
can be found on the Groups website www.aristocratgaming.com.

STI Plan

The Groups short-term incentive plan.

TSR

Total shareholder return measures the percentage growth in the share price together with the
value of dividends received during the relevant three year performance period, assuming all of
those dividends are reinvested into new securities.

VGT

Video Gaming Technologies Inc.

52

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 53

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 55 of 136

Auditors Independence Declaration

Aristocrat Leisure Limited Annual Report 2015

53

Exhibit F, pg. 54

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 56 of 136

Nevada Regulatory
Disclosure
The Nevada Gaming Commission has requested
that the following be brought to the attention of
shareholders.
Summary of the Nevada Gaming Regulations
The manufacture, sale and distribution of gaming
devices, internet and mobile gaming, and cashless
wagering systems for use or play in Nevada and the
operation of slot machine routes and inter-casino
linked systems are subject to:
i) the Nevada Gaming Control Act and the
regulations promulgated thereunder (collectively,
the Nevada Act); and
ii) various local ordinances and regulations.
Gaming and manufacturing and distribution
operations in Nevada are subject to the licensing and
regulatory control of the Nevada Gaming Commission
(Nevada Commission), the Nevada State Gaming
Control Board (Nevada Board) and various other
county and city regulatory agencies, collectively
referred to as the Nevada Gaming Authorities.
Nevada Regulatory Disclosure
The laws, regulations and supervisory procedures
of the Nevada Gaming Authorities are based upon
declarations of public policy which are concerned
with, among other things:
i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with
gaming, manufacturing or distributing activities at
any time or in any capacity;
ii) the establishment and maintenance of responsible
accounting practices and procedures;
iii) the maintenance of effective controls over the
nancial practices of licensees, including the
establishment of minimum procedures for internal
scal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and
requiring the ling of periodic reports with the
Nevada Gaming Authorities;
iv) the prevention of cheating and fraudulent
practices; and
v) providing a source of state and local revenues
through taxation and licensing fees.
Aristocrat Leisure Limited (the Company) is
registered with the Nevada Commission as a publicly
traded corporation (a Registered Corporation)
and has been found suitable to directly or indirectly
own the stock of two subsidiaries (collectively, the
Operating Subsidiaries), one subsidiary has been
licensed as a manufacturer and a distributor of
gaming devices and an Internet Gaming System
(IGS) Service Provider, the other subsidiary has
been licensed as a manufacturer and a distributor of
gaming devices, an operator of a slot machine route
and an IGS Service Provider.
54

A manufacturers and distributors license permits


the manufacturing, sale and distribution of gaming
devices and cashless wagering systems for use or
play in Nevada or for distribution outside of Nevada. A
license as an operator of a slot machine route permits
the placement and operation of gaming devices
upon the business premises of other licensees on
a participation basis and also permits the operation
of inter-casino linked systems consisting of gaming
devices only. The IGS Service Provider license allows
the provision of certain services of internet gaming to
licensed Internet Operators.
If it were determined that the Nevada Act was
violated by the Company or the Operating
Subsidiaries, the registration of the Company and
the licenses of the Operating Subsidiaries could be
limited, conditioned, suspended or revoked, subject
to compliance with certain statutory and regulatory
procedures. In addition, the Company, the Operating
Subsidiaries and the persons involved could be
subject to substantial nes for each separate
violation of the Nevada Act at the discretion of the
Nevada Commission.
Any benecial owner of a Registered Corporations
voting securities (in the case of the Company its
ordinary shares), regardless of the number of
voting securities owned, may be required to le
an application, be investigated, and have their
suitability as a benecial owner of the Registered
Corporations voting securities determined if the
Nevada Commission has reason to believe that such
ownership would otherwise be inconsistent with
the declared policies of the state of Nevada. The
applicant must pay all costs of investigation incurred
by the Nevada Gaming Authorities in conducting any
such investigation.
The Nevada Act requires any person who acquires a
benecial ownership of more than 5% of a Registered
Corporations voting securities to report the
acquisition to the Nevada Commission. The Nevada
Act requires that benecial owners of more than 10%
of a Registered Corporations voting securities apply
to the Nevada Commission for a nding of suitability
within thirty days after the Chairman of the Nevada
Board mails the written notice requiring such ling.
Under certain circumstances, an institutional
investor, as dened in the Nevada Act, which
acquires the benecial ownership of more than 10%,
but not more than 25%, of a Registered Corporations
voting securities may apply to the Nevada
Commission for a waiver of such nding of suitability
if such institutional investor holds the voting securities
for investment purposes only. An institutional investor
that has been granted a waiver by the Nevada
Commission may benecially own more than 25%,
but not more than 29%, of the voting securities of
a Registered Corporation, only if such additional
ownership results from a stock repurchase program
conducted by Registered Corporation, and upon the
condition that such institutional investor does not

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 55

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 57 of 136

Nevada Regulatory Disclosure

purchase or otherwise acquire any additional voting


securities of the Registered Corporation that would
result in an increase in the institutional investors
ownership percentage. Further, an institutional
investor that is subject to NRS 463.643(4) as a result
of its benecial ownership of voting securities of
a Registered Corporation and that has not been
granted a waiver by the Commission, may benecially
own more than 10%, but not more than 11%, of the
voting securities of such Registered Corporation,
only if such additional ownership results from a stock
repurchase program conducted by the Registered
Corporation, upon the condition that such institutional
investor does not purchase or otherwise acquire
any additional voting securities of the Registered
Corporation that would result in an increase in
the institutional investors ownership percentage.
Unless otherwise notied by the chairman, such an
institutional investor is not required to apply to the
commission for a nding of suitability, but shall be
subject to reporting requirements as prescribed by
the chairman.
The applicant is required to pay all costs of
investigation incurred by the Nevada Gaming
Authorities.
The Nevada Act provides that any person who fails
or refuses to apply for a nding of suitability or a
license within thirty days after being ordered to do so
by the Nevada Commission or the Chairman of the
Nevada Board, may be found unsuitable. The same
restrictions apply to a record holder (in the case of
the Company a registered holder) if the record owner,
after request, fails to identify the benecial owner.
Any person found unsuitable and who holds,
directly or indirectly, any of the voting securities of a
Registered Corporation beyond such period of time
as may be prescribed by the Nevada Commission
may be guilty of a criminal offence under Nevada
law. A Registered Corporation can be sanctioned,
including the loss of its approvals if, after it receives
notice that a person is unsuitable to be the holder of
the voting securities of the Registered Corporation
or to have any other relationship with the Registered
Corporation, it:
i) pays that person any dividend or interest upon its
voting securities;
ii) allows that person to exercise, directly or
indirectly, any voting right conferred through
securities held by that person;
iii) pays remuneration in any form to that person for
services rendered or otherwise; or
iv) fails to pursue all lawful efforts to require such
unsuitable person to relinquish his voting
securities including, if necessary, the immediate
purchase of said voting securities for cash at fair
market value.
The Nevada Commission may, in its discretion,
require the holder of any debt security of a Registered
Corporation to le applications, be investigated

and be found suitable to own the debt security of a


Registered Corporation. If the Nevada Commission
determines that a person is unsuitable to own such
security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including
the loss of its approvals, if without the prior approval
of the Nevada Commission, it:
i) pays to the unsuitable person any dividend,
interest, or any distribution whatsoever;
ii) recognises any voting right by such unsuitable
person in connection with such securities;
iii) pays the unsuitable person remuneration in any
form; or
iv) makes any payment to the unsuitable person
by way of principal, redemption, conversion,
exchange, liquidation, or similar transaction.
A Registered Corporation may not make a public
offering of its securities without the prior approval of
the Nevada Commission if the securities or proceeds
therefrom are intended to be used to construct,
acquire or nance gaming facilities in Nevada, or
to retire or extend obligations incurred for such
purposes. On June 21 2001, the Nevada Commission
granted the Company prior approval to make
public offerings for a period of two years subject to
certain conditions (Shelf Approval). This approval
has been extended and remains in place today.
However, the Shelf Approval may be rescinded for
good cause without prior notice upon the issuance
of an interlocutory stop order by the Chairman of
the Nevada Board. The Shelf Approval does not
constitute a nding, recommendation or approval
by the Nevada Commission or the Nevada Board
as to the accuracy or adequacy of the prospectus
or the investment merits of the securities offered.
Any representation to the contrary is unlawful. An
application to renew the Shelf Approval (which can
only be issued for a maximum term of three years) is
being lodged with the Commission.
Other Regulatory requirements Other Gaming
Authorities throughout the world may require any
person who acquires a benecial ownership of
more than 5% of a Registered Corporations voting
securities to report the acquisition to the Gaming
Authority and in some cases, apply to the Gaming
Authority for a nding of suitability within thirty
days of acquiring more than 5% of the Registered
Corporations voting securities. The applicant is
subject to the same rules as in Nevada in relation
to an unsuitable nding. The applicant is required
to pay all costs of investigation incurred by the
Gaming Authorities.
A more complete summary of the Nevada Act is
available on request from:
The Secretary, Aristocrat Leisure Limited
Building A, Pinnacle Ofce Park, 85 Epping Road,
North Ryde NSW 2113 Australia
Telephone: +612 9013 6000 Fax: +612 9013 6274

Aristocrat Leisure Limited Annual Report 2015

55

Exhibit F, pg. 56

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 58 of 136

Five Year Summary


$000 (except where indicated)

12 months
to
30 Sept 2015

12 months
to
30 Sept 2014

12 months
to
30 Sept 2013

9 months
to
30 Sept 2012

12 months
to
31 Dec 2011

Prot and loss items


Revenue (1)
EBITDA

(2)

Depreciation and amortisation


EBIT

(2)

Net interest revenue/(expense)


Prot before income tax expense (2)

1,582,427

839,082

813,787

586,181

709,013

523,081

219,217

188,146

95,534

147,949

(162,288)

(43,256)

(42,839)

(28,466)

(37,184)

360,793

175,961

145,307

67,068

110,765

(81,305)

(8,022)

(11,307)

(13,870)

(25,308)

279,488

167,939

134,000

53,198

85,457

Income tax expense

(87,969)

(37,739)

(26,800)

(6,647)

(18,558)

Prot after income tax expense (2)

191,519

130,200

107,200

46,551

66,899

(1,044)

(759)

Net prot attributable to members


of Aristocrat Leisure Limited

191,519

130,200

107,200

45,507

66,140

Signicant items and discontinued


operations after tax

Non-controlling interests

(5,089)

(146,629)

Reported net prot/(loss)


attributable to members of
Aristocrat Leisure Limited

186,430

(16,429)

107,200

45,507

66,140

Total dividend paid


parent entity only

101,108

85,463

49,640

43,747

21,422

693,834

641,603

233,137

233,137

209,043

15,661

(58,105)

(78,085)

(121,580)

(119,032)

207,928

122,582

224,392

166,735

164,863

(4,015)

(1,768)

(2,730)

917,423

706,080

375,429

276,524

252,144

Cash and cash equivalents

329,005

285,929

29,689

22,612

29,354

Other current assets

569,468

415,568

434,431

331,772

335,801

Property, plant and equipment

203,456

121,436

106,913

102,577

109,267

1,941,841

130,461

151,128

104,611

109,306

174,963

159,315

151,123

163,215

177,760

3,218,733

1,112,709

873,284

724,787

761,488

402,688

209,302

202,429

181,619

191,543

124

114,384

124

7,000

39,549

47,991

14,352

13,514

13,621
261,392

Balance sheet items


Contributed equity
Reserves
Retained earnings
Non-controlling interest
Total equity

Intangible assets
Other non-current assets
Total assets
Current payables and other liabilities
Current borrowings
Current tax liabilities and provisions
Non-current borrowings

1,779,508

243

237,759

207,453

Non-current provisions

14,686

13,162

14,130

14,759

16,096

Other non-current liabilities

64,755

21,547

29,061

23,918

26,692

2,301,310

406,629

497,855

448,263

509,344

917,423

706,080

375,429

276,524

252,144

Total liabilities
Net assets
See footnotes on page 58.
56

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 57

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 59 of 136

Five Year Summary

12 months
to
30 Sept 2015

$000 (except where indicated)

12 months
to
30 Sept 2014

12 months
to
30 Sept 2013

9 months
to
30 Sept 2012

12 months
to
31 Dec 2011

Other information
Employees at year end
Return on Aristocrat
shareholders equity (2)
Basic earnings per share (2)
Net tangible assets per share
Total dividends per share
ordinary
Dividend payout ratio

(2)

Issued shares at year end


Net (cash)/debt (3)
Net cash (debt)/equity

Number

2,912

2,274

2,173

2,135

2,111

20.9

18.4

28.6

16.5

26.2

Cents

30.3

23.0

19.5

8.3

12.3

(1.61)

0.91

0.41

0.31

0.26

Cents

17.0

16.0

14.5

6.0

6.5

56

70

74

72

53

000

637,120

630,022

551,418

551,418

543,181

$000

1,450,627

(171,302)

208,194

191,841

232,038

(158.1)

24.3

(55.5)

(69.4)

(92.0)

(1)

Revenue as per segment information.

(2)

Before the impact of abnormal and one-off items that are not representative of the underlying operational performance of the Group.
The non-IFRS information presented above has not been audited in accordance with the Australian Auditing Standards.

(3)

Current and non-current borrowings net of cash and cash equivalents.

Aristocrat Leisure Limited Annual Report 2015

57

Exhibit F, pg. 58

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 60 of 136

Financial Statements
Consolidated nancial statements for
the year ended 30 September 2015
These nancial statements cover the consolidated
entity consisting of Aristocrat Leisure Limited and
its subsidiaries (Group). The nancial statements are
presented in Australian dollars.
The Company is a company limited by shares,
incorporated and domiciled in Australia. Its registered
ofce and principal place of business is:
Aristocrat Leisure Limited
Building A, Pinnacle Ofce Park
85 Epping Road
North Ryde NSW 2113
Australia
A description of the nature of the consolidated
Groups operations and principal activities is included
in the Review of Operations, which is not part of these
nancial statements.
These nancial statements make reference to the
Directors Report and Remuneration Report which
are contained within the 2015 Annual Report.
PricewaterhouseCoopers has audited these nancial
statements and has issued an unqualied audit
report which is part of the 2015 Annual Report.
The nancial statements were authorised for issue
by the Directors on 25 November 2015. The
Company has the power to amend and reissue the
nancial statements.
Through the use of the internet, the Group ensures
that its corporate reporting is timely, complete
and available globally at minimum cost to the
Group. All press releases, nancial statements,
and other information are available in the investor
information section of the Companys website:
www .aristocratgaming.com.

58

Consolidated statement of
comprehensive income
59
Consolidated statement of nancial position
60
Consolidated statement of changes in equity
61
Consolidated statement of cash ows
62
Notes to the nancial statements
1 Summary of signicant accounting policies 63
2 Financial risk management
75
3 Critical accounting estimates
and judgements
81
4 Segment information
82
5 Prot/(loss) for the year
85
6 Income tax expense
86
7 Dividends
88
8 Cash and cash equivalents
89
9 Trade and other receivables
89
10 Inventories
93
11 Financial assets and nancial liabilities
93
12 Other assets
94
13 Property, plant and equipment
94
14 Deferred tax assets and liabilities
96
15 Intangible assets
97
16 Trade and other payables
100
17 Borrowings
101
18 Provisions
103
19 Other liabilities
103
20 Contributed equity
104
21 Reserves and retained earnings
104
22 Net tangible assets per share
106
23 Events occurring after reporting date
106
24 Contingent liabilities
106
25 Commitments
107
26 Subsidiaries
108
27 Share-based payments
110
28 Key management personnel disclosures
113
29 Remuneration of auditors
114
30 Related parties
115
31 Earnings per share
116
32 Reconciliation of prot/(loss) for the year
after income tax to net cash ow from
operating activities
117
33 Deed of cross guarantee
118
34 Parent entity nancial information
120
35 Business combinations
121
36 Discontinued operations
123
37 Disposal group classied as held for sale 125
Directors declaration
126

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 59

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 61 of 136

Financial Statements

Consolidated statement of comprehensive income


for the year ended 30 September 2015
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
Notes
$000
$000

Continuing operations
1,576,061

833,665

Cost of revenue

(679,182)

(375,893)

Gross prot

896,879

457,772

Revenue

Other income

Design and development costs


Sales and marketing costs
General and administration costs

Finance costs
Prot before income tax expense
Income tax expense

Prot from continuing operations


Prot/(loss) from discontinued operations

36

Prot/(loss) for the year

25,812

11,993

(191,376)

(122,747)

(118,303)

(70,035)

(294,633)

(112,150)

(89,858)

(14,043)

228,521

150,790

(71,865)

(33,812)

156,656

116,978

29,774

(133,407)

186,430

(16,429)

Other comprehensive income


Items that may be reclassied to prot or loss
Exchange difference on translation of foreign operations

21(a)(i)

136,446

9,160

Net investment hedge

21(a)(i)

(29,249)

(5,193)

Other comprehensive income for the year, net of tax

102,004

9,160

Total comprehensive income/(loss) for the year

288,434

(7,269)

Changes in fair value of interest rate hedge

21(a)(iii)

Total comprehensive income arises from:


Continuing operations
Discontinued operations

258,660

126,821

29,774

(134,090)

288,434

(7,269)

Cents

Cents

Earnings per share for prot/(loss) from continuing operations


attributable to ordinary equity holders of the Company
Basic earnings per share

31

24.8

20.6

Diluted earnings per share

31

24.6

20.5

Cents

Cents

Earnings per share for prot/(loss) attributable to ordinary equity


holders of the Company
Basic earnings per share

31

29.5

(2.9)

Diluted earnings per share

31

29.3

(2.9)

The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.

Aristocrat Leisure Limited Annual Report 2015

59

Exhibit F, pg. 60

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 62 of 136

Financial Statements

Consolidated statement of nancial position


as at 30 September 2015
30 Sept 2015
$000

30 Sept 2014
$000

329,005
439,720
102,193
10,082
2,164

883,164
15,309
898,473

285,929
328,371
75,840
8,340
2,026
991
701,497

701,497

9
11
13
14
15

86,035
7,745
203,456
81,183
1,941,841
2,320,260
3,218,733

74,671
4,527
121,436
80,117
130,461
411,212
1,112,709

16
17

361,386
124
11,425
28,124
331
40,063
441,453
908
442,361

176,174
114,384

47,991

33,128
371,677

371,677

16
17
18
11
19

43,228
1,779,508
14,686
8,212
13,315
1,858,949
2,301,310
917,423

6,954
243
13,162

14,593
34,952
406,629
706,080

20
21(a)
21(b)

693,834
15,661
207,928
917,423

641,603
(58,105)
122,582
706,080

Notes

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
Other assets
Current tax assets
Assets classied as held for sale
Total current assets
Non-current assets
Trade and other receivables
Financial assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Financial liabilities
Other liabilities
Liabilities directly associated with assets classied as held for sale
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Provisions
Financial liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Total equity

8
9
10
11
12

37

18
11
19
37

The above consolidated statement of nancial position should be read in conjunction with the accompanying notes.
60

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 61

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 63 of 136

Financial Statements

Consolidated statement of changes in equity


for the year ended 30 September 2015
Attributable to owners of
Aristocrat Leisure Limited

Notes

Balance at 1 October 2013

Noncontrolling
Total
interest
$000
$000

Contributed
equity
$000

Reserves
$000

Retained
earnings
$000

233,137

(78,085)

224,392

379,444

Loss for the 12 months to


30 September 2014

(16,429)

Other comprehensive income

9,160

Total comprehensive income/(loss)


for the year

9,160

(16,429)

Total
equity
$000

(4,015)

375,429

(16,429)

(16,429)

9,160

9,160

(7,269)

(7,269)

Foreign currency translation reserve


transferred to the prot and loss on
disposal of foreign operation

36

10,299

10,299

10,299

Foreign currency translation reserve


on discontinued operation

21(a)(i)

2,556

2,556

2,556

Transactions with owners in their


capacity as owners:
Contributions of equity, net of transaction
costs and tax
Transactions with non-controlling interests
Net movement in share-based payments
reserve
Dividends provided for and paid

20

408,466

408,466

408,466

30(b)

(7,050)

(7,050)

4,015

(3,035)

21(a)(ii)

5,015

(85,381)

408,466

10,820

Balance at 30 September 2014

5,015

5,015

(85,381)

(85,381)

4,015

337,920

(85,381) 333,905

641,603

(58,105)

122,582

706,080

706,080

Prot for the 12 months to


30 September 2015

186,430

186,430

186,430

Other comprehensive income

102,004

102,004

102,004

Total comprehensive income


for the year

102,004

186,430

288,434

288,434

Foreign currency translation reserve


transferred to the prot and loss on
disposal of foreign operation

36

7,170

7,170

7,170

Foreign currency translation reserve


on discontinued operation

21(a)(i)

(282)

(282)

(282)

20

52,231

52,231

52,231

21(a)(ii)

(35,126)

(35,126)

(35,126)
(101,084)

Transactions with owners in their


capacity as owners:
Contributions of equity, net of transaction
costs and tax
Net movement in share-based
payments reserve
Dividends provided for and paid
Balance at 30 September 2015

(101,084) (101,084)

52,231

(28,238)

(101,084)

(77,091)

(77,091)

693,834

15,661

207,928

917,423

917,423

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Aristocrat Leisure Limited Annual Report 2015

61

Exhibit F, pg. 62

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 64 of 136

Financial Statements

Consolidated statement of cash ows


for the year ended 30 September 2015
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
Notes
$000
$000

Cash ows from operating activities


Receipts from customers (inclusive of goods and services tax)

1,619,730

905,417

Payments to suppliers and employees (inclusive of goods and


services tax)

(1,076,874)

(713,064)

542,856

192,353

4,072

161

Other income
Interest received

10,549

10,727

(62,824)

(11,969)

35

(18,360)

(7,162)

(38,650)

(25,280)

32

437,643

158,830

35

(1,446,388)

(12,159)

(121,555)

(63,509)

(18,130)

(26,672)

Proceeds from sale of subsidiary (net of cash disposed)

1,757

13,543

Payments made for sale of subsidiary (net of cash disposed)

(8,154)

3,016

Interest paid
Transaction costs relating to acquisition of businesses
Income taxes paid
Net cash inow from operating activities
Cash ows from investing activities
Payment for acquisition of business (net of cash acquired)
Payments for property, plant and equipment
Payments for intangibles

Loan repayments from non-controlling interest


Proceeds from sale of property, plant and equipment
Net cash outow from investing activities

216

121

(1,592,254)

(85,660)

Cash ows from nancing activities


Payments for shares acquired by the Aristocrat Employee Share Trust

(2,225)

(5,083)

406,324

Repayments of borrowings

(153,271)

(406,310)

Proceeds from borrowings

1,446,831

277,247

Proceeds from issue of shares (net of transaction costs)

20

Finance lease payments


Transactions with non-controlling interests
Dividends paid to Company shareholders

Dividends paid to non-controlling shareholder

(3,016)

(101,084)

(85,381)

(614)
183,009

35,428

256,179

285,929

29,689

11,342

61

332,699

285,929

329,005

285,929

37

3,694

Net increase in cash and cash equivalents


Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of year

Included in the assets of the disposal group

(158)

1,190,039

Net cash inow from nancing activities

Included in cash and equivalents per the statement of nancial position

(212)

The above consolidated statement of cash ows should be read in conjunction with the accompanying notes.
62

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 63

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 65 of 136

Notes to the nancial statements


for the year ended 30 September 2015
Note 1. Summary of signicant accounting policies
The principal accounting policies adopted in the preparation of these consolidated nancial statements are set
out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
The nancial statements are for the consolidated entity consisting of Aristocrat Leisure Limited and its
subsidiaries (Group).
(a) Basis of preparation
These general purpose nancial statements have been prepared in accordance with Australian Accounting
Standards, and interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. Aristocrat Leisure Limited is a for-prot entity for the purposes of preparing the nancial statements.
(i) Compliance with IFRS
The consolidated nancial statements of the Group also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) Historical cost convention
These nancial statements have been prepared under the historical cost convention, as modied by the revaluation
of nancial assets and liabilities (including derivative instruments) at fair value through prot or loss and for certain
classes of property, plant and equipment which have been measured at deemed cost.
(iii) Critical accounting estimates
The preparation of nancial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Groups accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signicant to
the nancial statements, are disclosed in Note 3.
(iv) Comparatives
Comparative information is reclassied where appropriate to enhance comparability. The comparative information
has also been adjusted where indicated due to the impact of discontinued operations.
(v) New and amended standards adopted by the Group
There were no new or amended accounting standards effective for the period commencing 1 October 2014 that
required the Group to change its accounting policies for the September 2015 nancial year.
(vi) Signicant changes and events in the current reporting period
During the year ended 30 September 2015, the Group completed the acquisition of Video Gaming Technologies
Inc. (VGT). VGT is a leading provider of Class II gaming machines for the leased tribal gaming market in North
America. VGT is headquartered in Tennessee, USA with an installed base of approximately 20,000 machines at 30
September 2015. The results of the Group for the year ended 30 September 2015 include the nancial performance
for VGT from the date of acquisition, being 20 October 2014, as well as the nancial position of VGT as at 30
September 2015. Refer to Note 35 for details of the acquisition.
On 29 May 2015, the Group sold its Japanese subsidiaries K.K Aristocrat Technologies and K.K Spiky. The results
from these entities are shown in the statement of comprehensive income as a discontinued operation. Financial
information relating to the discontinued operation is set out in Note 36.
For a detailed discussion of the Groups nancial performance and position, refer to the Review of Operations.
(b) Principles of consolidation
(i) Subsidiaries
The consolidated nancial statements incorporate the assets and liabilities of all subsidiaries of the Company (or
parent entity) as at 30 September 2015 and the results of all subsidiaries for the year then ended. The Company
and its subsidiaries together are referred to in this nancial report as the Group or the consolidated entity.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for the business combinations by the Group; refer to
Note 1(i).

Aristocrat Leisure Limited Annual Report 2015

63

Exhibit F, pg. 64

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 66 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(i) Subsidiaries continued
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
(ii) Employee Share Trust
The Group has formed a trust to administer the Groups employee share scheme. This trust is consolidated, as the
substance of the relationship is that the trust is controlled by the Group. Treasury shares acquired by the Aristocrat
Employee Equity Plan Trust are recorded in share-based payment reserves.
(c) Segment reporting
Operating segments are determined in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing the performance of operating segments, has been identied as the Board of Directors and the Executive
Leadership Team, who have determined operating segments based primarily on a geographical perspective.
Further information is provided in Note 4.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the nancial statements of each of the Groups entities are measured using the currency of the
primary economic environment in which the entity operates (the functional currency). The consolidated nancial
statements are presented in Australian dollars, which is the Companys functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the prot or loss, except when deferred in equity as qualifying cash ow hedges and
qualifying net investment hedges, or are attributable to part of the net investment in a foreign operation.
(iii) Group companies
The results and nancial position of all the Group entities that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
assets and liabilities for each statement of nancial position presented are translated at the closing rate at the
date of that statement of nancial position;
income and expenses for each statement of comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and
of borrowings and other currency instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or borrowings forming part of a net investment are repaid,
the associated exchange differences are reclassied to prot or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities
of the foreign entity and translated at the closing rate.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, settlement discounts and duties and taxes paid. The Group recognises
revenue when the amount of revenue can be reliably measured, it is probable that future economic benets will ow
to the entity and specic criteria have been met for each of the Groups activities as described below. The Group
bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and
the contract terms of each arrangement.
(i) Revenue from the sale of goods and related licences
Machine sales
Revenue is recognised when goods have been dispatched to a customer pursuant to a sales order, the associated
risks have passed to the customer, and it is probable that future economic benets will ow to the Group.

64

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 65

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 67 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(e) Revenue recognition continued
(i) Revenue from the sale of goods and related licences continued
Systems contracts
Revenue for long term systems contracts is recognised progressively over the period of the individual contracts.
Revenue on short term contracts is recognised on installation of the systems, or on customer acceptance if there is
a signicant risk that the customer will not accept the installed system.
Licence income
Licence income is recognised in accordance with the substance of the agreement, corresponding with the time
when all obligations in relation to the contract have been met. Where there is an ongoing obligation, the revenue is
deferred and recognised when the obligations are met.
Multiple element arrangements
The Group offers certain arrangements whereby a customer can purchase an Electronic Gaming Machine (EGM)
together with other ongoing obligations. When such multiple element arrangements exist, the amount recognised
as revenue upon the sale of the EGM is the fair value of the EGM in relation to the arrangement taken as a whole.
The revenue relating to the ongoing obligations is recognised over the period that the obligations are satised.
The fair values of each element are determined based on the current market price of each of the elements when
sold separately. To the extent that there is a discount on the arrangement, such discount is allocated between the
elements of the contract in such a manner as to reect the fair value of the elements.
(ii) Revenue from gaming operations, on-line and services
Participation revenue
Participation revenue is where the Groups owned machines are placed directly by the Group or indirectly through a
licensed operator in venues in return for a fee per day which can either be xed or performance based. The amount
of revenue recognised is calculated by either: (i) multiplying a daily fee by the total number of days the machine has
been operating on the venue oor in the reporting period; or (ii) an agreed fee based upon a percentage of turnover
or the net win of participating machines.
Rental
Rental income from operating leases is recognised on a straight-line basis over the term of the operating lease
contract. Leases where substantially all the risks and rewards of ownership are transferred to the customer are
classied as nance leases. The Group recognises selling prot of nance leases, in accordance with the policy
followed by the Group for machine sales. Finance income is recognised based on a constant periodic rate of return
on the Groups net investment in the nance lease.
Service revenue
Service revenue is recognised as work is performed, other than for service agreements, where revenue is
recognised evenly over the period of the service agreement.
Revenue in advance
Revenue derived from prepaid service contracts is apportioned on a pro-rata basis over the life of each respective
agreement. Amounts received at reporting date in respect of future periods are treated as revenue in advance and
are included in liabilities.
On-line gaming revenue
Revenue from on-line gaming is recognised when the player uses the credits purchased. Amounts not used at
period end are included in deferred revenue in the statement of nancial position. As Aristocrat is the principal in
such transactions, commissions are presented as expenses.
(iii) Interest income
Interest income is recognised using the effective interest method.
(f) Income tax
The income tax expense for the year is the tax payable on the current periods taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities, current
income tax of prior years, unused tax losses and unused tax credits.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Companys subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulations are subject to interpretation. It establishes provisions where appropriate on the basis
of amounts expected to be paid to the tax authorities.

Aristocrat Leisure Limited Annual Report 2015

65

Exhibit F, pg. 66

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 68 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(f) Income tax continued
Deferred income tax is provided in full, using the liability method, on temporary differences arising between tax
bases of assets and liabilities and their carrying amount in the consolidated nancial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable prot or
loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted
by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses and unused tax
credits only if it is probable that future taxable amounts will be available to utilise those temporary differences,
losses and tax credits.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognised in prot or loss, except to the extent that it relates to items recognised
directly in other comprehensive income or directly in equity, respectively.
Companies within the Group may be entitled to claim special tax deductions in relation to qualifying expenditure. The
Group accounts for such allowances as tax credits, which means that the allowance reduces income tax payable and
current tax expense. A deferred tax asset is recognised for unclaimed tax credits that are carried forward.
(g) Tax consolidation legislation
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation as of 1 January 2004.
The head entity, Aristocrat Leisure Limited, and the controlled entities in the tax consolidated group account for
their own current and deferred tax amounts. These tax amounts are measured by applying a group allocation
approach, which uses a combination between the stand-alone tax payer and separate tax payer within a group
approach as described in UIG 1052 Tax Consolidation Accounting.
In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled
entities in the tax consolidated group.
Assets or liabilities arising under the tax funding agreement with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the tax consolidated group. Details about the tax funding
agreement are disclosed in Note 6.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
(h) Leases
Leases in which a signicant portion of the risks and rewards of ownership are not transferred to the Group as
lessee are classied as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to prot or loss on a straight-line basis over the period of the lease.
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of
ownership are classied as nance leases. Finance leases are capitalised at the leases inception at the fair value
of the leased property, or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of nance charges, are included in nance lease liabilities. Each lease payment is allocated between
the liability and nance cost. The nance cost is charged to prot or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and
equipment acquired under nance leases is depreciated over the shorter of the assets useful life and the lease
term, if it is not virtually certain that the Group will obtain ownership at the end of the lease term.
(i) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises the fair value of the assets transferred, shares issued or liabilities incurred or assumed by the Group.
The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair
value of any pre-existing equity interest in the subsidiary. Acquisition related costs for business combinations from 1
January 2010 are expensed as incurred. Identiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
66

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 67

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 69 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(j) Impairment of assets
Goodwill and intangible assets that have an indenite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate they might be impaired.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to
sell, and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identiable cash ows which are largely independent of the cash inows from other assets or
groups of assets (cash-generating units). Non-nancial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
(k) Cash and cash equivalents
For cash ow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at
call with nancial institutions, other short-term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignicant risk of changes
in value, and bank overdrafts.
(l) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision
for impairment. Trade receivables are presented as current assets unless collection is not expected for more than
12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off by reducing the carrying amount directly. A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to collect all amounts due according to the original
terms of the receivables. Signicant nancial difculties of the debtor and the probability that the debtor will default
on payments are considered indicators that the trade receivable is impaired. The amount of the impairment
allowance is the difference between the assets carrying amount and the present value of estimated future cash
ows, discounted at the original effective interest rate. Cash ows relating to short-term receivables are not
discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the prot or loss within expenses. When a trade receivable for
which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off
against the allowance account.
(m) Inventories
(i) Raw materials and stores, work in progress and nished goods
Raw materials and stores, work in progress and nished goods are stated at the lower of cost and net realisable
value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and xed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale.
(ii) Contract work in progress
Contract work in progress is stated at cost less progress billings. Cost includes all costs directly related to specic
contracts and an allocation of overhead expenses incurred in connection with the Groups contract operations.
Where a loss is indicated on completion, the work in progress is reduced to the level of recoverability less progress
billings.
(n) Intellectual property rights
A controlled entity purchases intellectual property rights in the form of licence tags to certain technology relating
to cashless gaming systems in the United States. These rights are capitalised and subsequently expensed as and
when the licence tags are consumed.

Aristocrat Leisure Limited Annual Report 2015

67

Exhibit F, pg. 68

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 70 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(o) Investments and other nancial assets
Classication
The Group classies its investments in the following categories: nancial assets at fair value through prot or loss,
loans and receivables, held-to-maturity investments, and available-for-sale nancial assets. The classication
depends on the purpose for which the investments were acquired. Management determines the classication of
the Groups investments at initial recognition and, in the case of assets classied as held-to-maturity, re-evaluates
this designation at each reporting date.
(i) Financial assets at fair value through prot or loss
Financial assets at fair value through prot or loss are nancial assets held for trading. A nancial asset is classied
in this category if acquired principally for the purpose of selling in the short term. Derivatives are classied as held
for trading unless they are designated as hedges. Assets in this category are classied as current assets if they are
expected to be settled within 12 months, otherwise they are classied as non-current.
(ii) Loans and receivables
Loans and receivables are non-derivative nancial assets with xed or determinable payments that are not quoted
in an active market. They are included in current assets, except for those with maturities greater than 12 months
after the end of the reporting period, which are classied as non-current assets. Loans and receivables are
included in trade and other receivables in the statement of nancial position.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative nancial assets with xed or determinable payments and xed
maturities that the Groups management has the positive intention and ability to hold to maturity. If the Group were
to sell other than an insignicant amount of held-to-maturity nancial assets, the whole category would be tainted
and reclassied as available-for-sale. Held-to-maturity nancial assets are included in non-current assets, except for
those with maturities less than 12 months from the reporting date, which are classied as current assets.
(iv) Available-for-sale nancial assets
Available-for-sale nancial assets, comprising principally marketable equity securities, are non-derivatives that
are either designated in this category or not classied in any of the other categories. They are included in noncurrent assets unless management intends to dispose of the investment within 12 months of the reporting date.
Investments are designated as available-for-sale if they do not have xed maturities and xed or determinable
payments and management intends to hold them for the medium to long term.
Recognition and derecognition
Regular purchases and sales of nancial assets are recognised on trade-date the date on which the Group
commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all
nancial assets not carried at fair value through prot or loss. Financial assets carried at fair value through prot or
loss are initially recognised at fair value and transaction costs are expensed in the prot or loss. Financial assets are
derecognised when the rights to receive cash ows from the nancial assets have expired or have been transferred
and the Group has transferred substantially all the risks and rewards of ownership.
Measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective
interest method.
Available-for-sale nancial assets and nancial assets at fair value through prot and loss are subsequently carried
at fair value. Gains or losses arising from changes in the fair value of the nancial assets at fair value through prot
or loss category are presented in the statement of comprehensive income within other income or other expenses
in the period in which they arise.
Details on how the fair value of nancial instruments is determined are disclosed in Note 1(q).
Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a nancial asset
or group of nancial assets is impaired. A nancial asset or a group of nancial assets is impaired and impairment
losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred
after the initial recognition of the asset (a loss event) and that loss event (or events) has an impact on the estimated
future cash ows of the nancial asset or group of nancial assets that can be reliably estimated.

68

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 69

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 71 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(p) Derivatives and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends
on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The
Group designates certain derivatives as either: (i) hedges of the fair value of recognised assets or liabilities or a rm
commitment (fair value hedges); (ii) hedges of a particular risk associated with the cash ows of recognised assets
and liabilities and highly probable forecast transactions (cash ow hedges); or (iii) hedges of a net investment in a
foreign operation (net investment hedges).
Where hedge accounting is adopted, the Group documents at the inception of the transaction the relationship
between hedging instruments and hedged items, as well as its risk management objective and strategy for
undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and
on an ongoing basis, of whether the derivatives that are used in hedging transactions have been, and will continue to
be, highly effective in offsetting changes in fair values or cash ows of hedged items. The full fair value of a hedging
derivative is classied as a non-current asset or liability when the remaining maturity of the hedged item is more than
12 months; it is classied as a current asset or liability when the remaining maturity of the hedged item is less than
12 months.
(i) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the
statement of comprehensive income, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps hedging
borrowings is recognised in the prot and loss within nance costs, together with changes in the fair value of the
hedged xed rate borrowings attributable to interest rate risk.
(ii) Cash ow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash ow hedges
is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the
ineffective portion is recognised immediately in the prot and loss within other income or other expenses.
Amounts accumulated in equity are reclassied to prot or loss in the periods when the hedged item will affect prot
or loss (for instance, when the forecast sale that is hedged takes place). The gain or loss relating to the effective
portion of interest rate swaps hedging variable rate borrowings is recognised in prot or loss within nance costs.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the
forecast transaction is ultimately recognised in prot or loss. When a forecast transaction is no longer expected to
occur, the cumulative gain or loss that was reported in equity is immediately reclassied to prot or loss.
(iii) Net investment hedge
Hedges of net investments in foreign operations are accounted for similarly to cash ow hedges. Any gain or loss on
the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income
and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in
prot or loss within other income or other expenses. Gains and losses accumulated in equity are reclassied to prot
or loss when the foreign operation is partially disposed of or sold.
(iv) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognised immediately in prot or loss and are included
in other income or other expenses.
(q) Fair value estimation
The fair value of nancial assets and nancial liabilities must be estimated for recognition and measurement and for
disclosure purposes.
The fair value of nancial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the end of the reporting period.
The fair value of nancial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques. The Group uses a variety of methods and makes assumptions
that are based on market conditions existing at each reporting date. Quoted market prices or dealer quotes for
similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted
cash ows, are used to determine fair value for the remaining nancial instruments. The fair value of interest rate
swaps is calculated as the present value of the estimated future cash ows. The fair value of forward exchange
contracts is determined using forward exchange market rates at the reporting date.

Aristocrat Leisure Limited Annual Report 2015

69

Exhibit F, pg. 70

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 72 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(q) Fair value estimation continued
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate
their fair values. The fair value of nancial liabilities for disclosure purposes is estimated by discounting the
future contractual cash ows at the current market interest rate that is available to the Group for similar nancial
instruments.
(r) Property, plant and equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benets associated with the item will ow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to the prot and loss during the
nancial period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their
cost, net of their residual values, over their estimated remaining useful lives, as follows:
Buildings
2530 years
Leasehold improvements
210 years
Plant and equipment
210 years
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is
greater than its estimated recoverable amount (refer to Note 1(j)).
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are
included in prot and loss.
(s) Intangible assets
(i) Goodwill
Goodwill is measured as described in Note 1(i). Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised, but is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains
and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. A cash-generating unit is the
smallest identiable groups of assets that generate cash inows that are largely independent of the cash inows from
other assets or groups of assets. Each of those cash-generating units represents the Groups investment in each
region of operation by each operating segment. Refer to Note 15.
(ii) Technology and software
Technology and software has a nite useful life and is carried at cost less accumulated amortisation and impairment
losses. Technology and software acquired through a business combination is measured at the fair value at
acquisition date. Amortisation is calculated using the straight-line method to allocate the value of technology and
software over its estimated useful life, which varies from 3 to 10 years.
(iii) Customer relationships and contracts acquired
The customer relationships and contracts were acquired as part of a business combination (see Note 35 for details).
They are recognised at their fair value at the date of acquisition and are subsequently amortised on a straight-line
basis over their estimated useful lives of 15 years.
(iv) Tradename and game names
The tradename and game names were acquired as part of a business combination (see Note 35 for details). Game
names are recognised at their fair value at the date of acquisition and are subsequently amortised on a straightline basis over their estimated useful lives of 15 years. The tradename is recognised at its fair value at the date of
acquisition and has an indenite life so is not amortised, and is tested for impairment at each reporting date.
(v) Intellectual property and licences
Intellectual property and licences that have a nite useful life are carried at cost less accumulated amortisation
and impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of intellectual
property and licences over their estimated useful lives, which vary from 3 to 10 years. Licences which have an
indenite life are not amortised, and are tested for impairment at each reporting date.

70

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 71

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 73 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(s) Intangible assets continued
(vi) Design and development
Design expenditure is recognised as an expense as incurred.
An intangible asset arising from development expenditure is only recognised when all of the recognition criteria can
be demonstrated. The recognition criteria for the development activity are:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
the generation by the intangible asset of probable future economic benets. Among other things, the Group can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is
to be used internally, the usefulness of the intangible asset;
the availability of adequate technical, nancial and other resources to complete the development and to use or
sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Only development costs relating to the creation of an asset that can be used or sold and can be reliably measured
are capitalised as intangible assets. Capitalised amounts are amortised over 1 to 7 years.
Other development costs that do not meet these criteria are recognised in the prot and loss as incurred.
(t) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the nancial
year which are unpaid. The amounts are unsecured and are usually paid within 30120 days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting
date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective
interest method.
Payables include short-term employee benets. Refer to Note 1(x).
(u) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in prot or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down,
the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which
it relates.
Borrowings are classied as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting period.
(v) Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed as
incurred.
(w) Provisions
Provisions are recognised when: (i) the Group has a present legal or constructive obligation as a result of past
events; (ii) it is probable that an outow of resources will be required to settle the obligation; and (iii) the amount has
been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outow with respect to any one item included in the same class of obligations may be small.
(i) Progressive jackpot liabilities
In certain jurisdictions in the United States, the Group is liable for progressive jackpots, which are paid as an initial
amount followed by either: (i) an annuity paid out over 19 or 20 years after winning; or (ii) a lump sum amount equal
to the present value of the progressive component. Base jackpots are charged to cost of sales when the jackpot
is won.

Aristocrat Leisure Limited Annual Report 2015

71

Exhibit F, pg. 72

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 74 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(ii) Warranties
Provision is made for the estimated liability on all products still under warranty at reporting date. The amount of the
provision is the estimated cash ows expected to be required to settle the warranty obligations, having regard to the
service warranty experience and the risks of the warranty obligations. The provision is not discounted to its present
value as the effect of discounting is not material.
(iii) Make good allowances
Provision is made for the estimated liability where required on leases still held at reporting date. The amount of the
provision is the estimated discounted cash ows expected to be required to satisfy the make good clauses in the
lease contracts.
(iv) Onerous contracts
A provision is recognised for contracts where the costs of fullling the contract exceed the benets expected to be
received. The provision includes inventory and other purchase commitments.
(x) Employee benets payable
(i) Short term obligations
Liabilities for wages and salaries, including non-monetary benets, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting date are recognised in other payables in respect of
employees services up to the reporting date and are measured at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
(ii) Other long-term benet obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after
the end of the period is recognised in the provision for employee benets and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using
the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outows.
The obligations are presented as current liabilities in the statement of nancial position if the entity does not have an
unconditional right to defer settlement for at least 12 months after the reporting date, regardless of when the actual
settlement is expected to occur.
(iii) Retirement benet obligations
The Group pays contributions to approved dened contribution funds. Contributions are recognised as an expense
when they become payable.
(iv) Share-based payments
Share-based compensation benets are provided to employees via the Performance Share Plan, Deferred Equity
Employee Plan, Deferred Short Term Incentive Plan, General Employee Share Plan and other arrangements under
employee contracts.
The fair value of rights granted is recognised as an employee benets expense with a corresponding increase in
equity. The total amount to be expensed is determined by reference to the fair value of the rights granted, which
includes any market performance conditions and the impact of non-vesting conditions but excludes the impact of
any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of rights that are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all the specied vesting
conditions are to be satised. At the end of each period, the Group revises its estimates of the number of rights that
are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original
estimates, if any, in prot or loss, with a corresponding adjustment to equity.
Upon the exercise of options or rights, the balance of the share-based payments reserve relating to those rights is
transferred to share capital only if the shares are a new issue from contributed equity.
Shares issued through the Aristocrat Employee Equity Plan Trust continue to be recognised in the share-based
payments reserve in equity. Similarly, treasury shares acquired by the Aristocrat Employee Equity Plan Trust are
recorded in share-based payments trust reserves. Information relating to these shares is disclosed in Note 21(a)(ii).
The market value of shares issued to employees for no cash consideration under the General Employee Share Plan
is recognised as an employee benets expense with a corresponding increase in reserves.

72

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 73

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 75 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(x) Employee benets payable continued
(v) Bonus plans
The Group recognises a liability and an expense for bonuses based on criteria that takes into account the prot
attributable to the Companys shareholders. The Group recognises a liability where contractually obliged or where
there is past practice that has created a constructive obligation. Where bonus plans are settled by way of the issue
of shares in the Company, the expense is accounted for as part of the share based payments expense.
(vi) Employee benet on-costs
Employee benet on-costs, including payroll tax, are recognised and included in employee benet liabilities and
costs when the employee benets to which they relate are recognised as liabilities.
(vii) Termination benets
Termination benets are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benets. The Group recognises termination benets
when it is demonstrably committed to either terminating the employment of current employees according to a
detailed formal plan without the possibility of withdrawal or to providing termination benets as a result of an offer
made to encourage voluntary redundancy. Benets falling due more than 12 months after the end of the reporting
period are discounted to present value.
(y) Contributed equity
Ordinary shares are classied as equity.
Incremental costs directly attributable to the issue of new shares are shown in contributed equity as a deduction,
net of tax, from the proceeds.
If the entity reacquires its own equity instruments, for example as the result of a share buy-back, those instruments
are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the prot
or loss and the consideration paid including any directly attributable incremental cost (net of income taxes) is
recognised directly in equity.
(z) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the nancial year but not distributed at reporting date.
(aa) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the prot attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the nancial year, excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the gures used in the determination of basic earnings per share to take into
account the post-income tax effect of interest and other nancing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
(ab) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST or other relevant taxes,
unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the
cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
statement of nancial position.
Cash ows are presented on a gross basis. The GST components of cash ows arising from investing or nancing
activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash ows.
(ac) Rounding of amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the rounding off of amounts in the nancial statements. Amounts in the nancial
statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in
certain cases, the nearest dollar.

Aristocrat Leisure Limited Annual Report 2015

73

Exhibit F, pg. 74

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 76 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(ad) Parent entity nancial information
The nancial information for the parent entity, Aristocrat Leisure Limited, disclosed in Note 34, has been prepared
on the same basis as the consolidated nancial statements, except as set out below.
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less impairment charges in the nancial statements of
Aristocrat Leisure Limited.
(ii) Tax consolidation legislation
Aristocrat Leisure Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, Aristocrat Leisure Limited, and the controlled entities in the tax consolidated group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Aristocrat Leisure Limited also recognises the current tax
liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed
from controlled entities in the tax consolidated group.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully
compensate Aristocrat Leisure Limited for any current tax payable assumed and are compensated by Aristocrat
Leisure Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused
tax credits that are transferred to Aristocrat Leisure Limited under the tax consolidation legislation. The funding
amounts are determined by reference to the amounts recognised in the wholly-owned entities nancial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from
the head entity, which is issued as soon as practicable after the end of each nancial year.
The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax
instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
current amounts receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
(ae) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for
30 September 2015 reporting periods. The Groups assessment of the impact of these new standards and
interpretations is set out below.
AASB 9 Financial Instruments addresses the classication, measurement and derecognition of nancial assets
and nancial liabilities and may affect Aristocrats accounting for nancial assets and liabilities. Aristocrat does not
expect the standard will have a signicant impact on its nancial statements. The standard is not applicable until
1 January 2018 but is available for early adoption.
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers
contracts for goods and services and AASB 111 which covers construction contracts. The new standard is based
on the principle that revenue is recognised when control of a good or service transfers to a customer. The notion of
control replaces the existing notion of risks and rewards. The Group has commenced consideration of the impact
of the new rules on its revenue recognition policies and will continue this assessment during the 2016 nancial year.
The standard will not be applicable until 1 January 2018 but is available for early adoption.
(af) Disposal groups held for sale and discontinued operations
Disposal groups are classied as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is considered highly probable. They are measured at the
lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets and
nancial assets which are specically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset
(or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date
of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classied as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classied
as held for sale continue to be recognised.

74

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 75

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 77 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 1. Summary of signicant accounting policies continued


(af) Disposal groups held for sale and discontinued operations continued
Non-current assets classied as held for sale and the assets of a disposal group classied as held for sale are
presented separately from the other assets in the balance sheet. The liabilities of a disposal group classied as
held for sale are presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classied as held for sale
and that represents a separate major line of business or geographical area of operations and is part of a single
co-ordinated plan to dispose of such a line of business or area of operations. The results of discontinued operations
are presented separately in the income statement.
Note 2. Financial risk management
The Groups activities expose it to a variety of nancial risks, which include: market risk (including cash ow and
fair value interest rate risk, foreign exchange risk and price risk), credit risk, and liquidity risk. The Groups overall
risk management program focuses on the unpredictability of nancial markets and seeks to minimise potential
adverse effects on the nancial performance of the Group. The Group uses derivative nancial instruments such
as foreign exchange contracts and interest rate swaps to hedge certain risk exposures. Derivatives are exclusively
used for hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods
to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of
interest rate, foreign exchange and other price risks and ageing analysis for credit risk.
Financial risk management is carried out by a central treasury department (Group Treasury) under policies
approved by the Board of Directors. Group Treasury identies, evaluates and hedges nancial risks in close
co-operation with the Groups operating units. The Board provides written principles for overall risk management,
as well as policies covering specic areas, such as foreign exchange risk, interest rate risk, credit risk, use of
derivative nancial instruments and investment of excess liquidity.
(a) Market risk
(i) Cash ow and fair value interest rate risk
The Groups main interest rate risk arises from oating rate borrowings drawn under a Term Loan B facility. If
deemed necessary, the Group has the ability to manage oating interest rate risk by using oating to xed interest
rate swaps. Such interest rate swaps have the economic effect of converting borrowings from oating to xed rates.
Under the Group Treasury policy, the mix between xed and oating rate debt is reviewed on a regular basis. At 30
September 2015 all debt was solely denominated in US dollars.
The Group manages its cash ow interest rate risk by using oating to xed interest rate swaps. Under these
swaps, the Group agrees with other parties to exchange, at specied intervals (mainly quarterly), the difference
between xed contract rates and oating rate interest amounts calculated by reference to the agreed notional
principal amounts. Generally, the Group raises long-term borrowings at oating rates and swaps them into xed
rates that are lower than those available if the Group borrowed at xed rates directly.
The weighted average interest rate on the Groups borrowings at 30 September 2015 was 4.75% (2014: 1.4%).
Refer to Note 17 for further details of the Groups borrowings.
Group sensitivity
A sensitivity analysis of interest rate risk on the Groups nancial assets and liabilities is provided in the table at
Note 2(a)(iv).
(ii) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the US dollar and Euro.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entitys functional currency. The risk is measured using sensitivity
analysis and cash ow forecasting. Refer to Notes 9(h) and 16(a) for receivables and payables denominated in
foreign currencies.
The Groups foreign exchange hedging policy is to reduce the foreign exchange risk associated with transactional
exposures, primarily over a 12-month horizon. External foreign exchange contracts are designated at the Group
level as hedges of foreign exchange risk on specic foreign currency denominated transactions.
Unrealised gains or losses on outstanding foreign exchange contracts are taken to the Groups prot or loss on a
monthly basis.

Aristocrat Leisure Limited Annual Report 2015

75

Exhibit F, pg. 76

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 78 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 2. Financial risk management continued


Hedge of net investment in foreign entity
In 2015, the Group entered into a Term Loan B amounting to US$1,300,000,000 which was taken out to acquire an
American subsidiary and is denominated in United States Dollars (USD). At 30 September 2015, US$290,000,000
of this loan, held within the Australian company, has been designated as a hedge of the net investment in
this American subsidiary. The fair value and carrying amount of the borrowing at 30 September 2015 was
$1,779,000,000 (30 September 2014: $nil). The foreign exchange loss of $29,249,000 (2014: $nil) on translation of
the borrowing to Australian dollars at the end of the reporting period is recognised in other comprehensive income
and accumulated in the foreign currency translation reserve within shareholders equity (Note 21). There was no
ineffectiveness to be recorded in the prot and loss from net investments in foreign entity hedges.
Group sensitivity
A sensitivity analysis of foreign exchange risk on the Groups nancial assets and liabilities is provided in the table at
Note 2(a)(iv).
(iii) Price risk
The Groups exposure to commodity price risk is indirect and is not considered likely to be material.
(iv) Summarised sensitivity analysis
The following table summarises the sensitivity of the Groups nancial assets and nancial liabilities to interest
rate risk, foreign exchange risk and price risk. These sensitivities are prior to the offsetting impact of hedging
instruments, and are shown on a pre-tax basis:
Group sensitivity
Interest rate risk

Foreign exchange risk


10%
Prot
$000

Price risk
10%
Equity
$000

+10%
Equity
$000

(282)

(3,776)

+10%
Prot
$000

Carrying
amount
$000

1%
Prot
$000

+1%
Prot
$000

Cash and cash equivalents

329,005

(3,290)

3,290

345

Receivables

525,755

4,615

14,405

(144)

144

3,422

2015

Financial assets

Debt securities held-to-maturity


Other investments
Financial liabilities
Payables
Borrowings
Progressive jackpot liabilities
Other nancial liabilities

404,614

(1,576)

1,289

1,779,632

(5,888)

21,755

218

(218)

8,543

Total increase/(decrease)

(3,216)

(2,672)

3,384

(2,769)

Interest rate risk

Foreign exchange risk


10%
Prot
$000

+10%
Prot
$000

Price risk
10%
Equity
$000

+10%
Equity
$000

Carrying
amount
$000

1%
Prot
$000

+1%
Prot
$000

Cash and cash equivalents

285,929

(2,859)

2,859

(290)

238

Receivables

403,042

3,464

(2,834)

12,208

(122)

122

2014

Financial assets

Debt securities held-to-maturity


Financial liabilities
Payables

183,128

(1,013)

829

Borrowings

114,627

1,146

(1,146)

9,995

100

(100)

(1,735)

1,735

2,161

(1,767)

Progressive jackpot liabilities


Total increase/(decrease)
76

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 77

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 79 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 2. Financial risk management continued


(b) Credit risk
Credit risk is managed on a Group basis. The Group has no signicant concentration of credit risk. The Group
has policies in place to ensure that sales of products and services are made to customers with an appropriate
credit history.
Derivative counterparties and cash transactions are limited to high credit quality nancial institutions. The Group has
policies that limit the amount of credit exposure to any one nancial institution.
For all cash and cash equivalents, these are held with counterparties which are rated A or higher.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufcient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities and the ability to close out market positions.
Due to the dynamic nature of the underlying businesses, Group Treasury aims at maintaining exibility in funding by
keeping committed credit lines available.
Management monitors rolling forecasts of the Groups liquidity reserve (comprising of the undrawn borrowing
facilities below) on the basis of expected cash ows.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
Consolidated
2015
2014
$000
$000

Floating Rate
Expiring within one year (bank loans and bank overdrafts)
Expiring beyond one year (bank loans)

7,853

16,709

100,000

260,740

107,853

277,449

The short term bank loans and overdraft facilities may be drawn at any time and are subject to annual review.
Maturities of nancial liabilities
The table below analyses the Groups nancial liabilities into relevant maturity groupings as follows:
(a) based on their contractual maturities:
(i) all non-derivative nancial liabilities; and
(ii) net and gross settled derivative nancial instruments for which the contractual maturities are essential for an
understanding of the timing of the cash ows.
(b) based on the remaining period to the expected settlement date:
(i) derivative nancial liabilities for which the contractual maturities are not essential for an understanding of the
timing of cash ows.
The amounts disclosed in the table are the contractual undiscounted cash ows. Balances due within 12 months
equal their carrying balances, as the impact of discounting is not signicant.

Aristocrat Leisure Limited Annual Report 2015

77

Exhibit F, pg. 78

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 80 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 2. Financial risk management continued

Contractual maturities of
nancial liabilities
Group at 30 September 2015

Less than
6 months
$000

6-12
months
$000

Between
1 and 2
years
$000

Between
2 and 5
years
$000

Total
Over 5 contractual
years cash ows
$000
$000

Carrying
Amount
(assets)/
liabilities
$000

Non-derivatives
Trade payables

107,134

107,134

107,134

Other payables

209,778

2,368

212,146

212,146

17,142

17,142

17,142

24,964

24,964

21,398

71,326

68,192

332

8,211

Borrowings interest payments

43,506

43,745

87,208

257,115

88,405

519,979

Progressive jackpot liabilities

16,732

700

1,221

2,067

1,035

21,755

21,755

419,256

47,145

121,604

85

3,267

(inow)

(45,168)

(18,324)

outow

45,020

18,803

(148)

479

(63)

479
$'000

Contingent consideration
Deferred consideration
Borrowings

Total non-derivatives

55,658 1,747,921

336,238 1,837,361

1,812,122 1,779,632

2,761,604 2,206,001

Derivatives
Net settled (interest rate swaps)

4,860

8,212

8,212

(63,492)

63,823

331

331

331

3,267

4,860

8,543

8,543

$'000

$'000

$'000

$'000

Gross settled (forward foreign


exchange contracts cash
ow hedges)

Total derivatives
Group at 30 September 2014

$'000

$'000

Non-derivatives
Trade payables

65,661

65,661

65,661

Other payables

104,260

571

104,831

104,831

7,143

6,507

13,650

12,636
114,627

Contingent consideration
Borrowings

114,627

114,627

802

802

67

1,671

4,444

1,024

977

2,306

1,244

9,995

9,995

182,310

1,826

122,749

2,306

1,244

310,435

307,750

(inow)

(28,540)

(28,540)

(28,540)

outow

27,881

27,881

27,881

(659)

(659)

(659)

Borrowings interest payments


Progressive jackpot liabilities
Total non-derivatives
Derivatives
Gross settled (forward foreign
exchange contracts cash
ow hedges)

78

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 79

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 81 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 2. Financial risk management continued


(d) Fair value measurements
This section explains the judgements and estimates made in determining the fair values of the nancial instruments
that are recognised and measured at fair value in the nancial statements. To provide an indication about the
reliability of the inputs used in determining fair value, the Group has classied its nancial instruments into the three
levels prescribed under the accounting standards. An explanation of each level follows underneath the table.
Level 1
$000

Level 2
$000

Level 3
$000

Total
$000

Interest rate swap contracts

8,212

8,212

Derivatives used for hedging

331

331

Contingent consideration

17,142

17,142

Total liabilities

8,543

17,142

25,685

Level 1
$000

Level 2
$000

Level 3
$000

Total
$000

Derivatives used for hedging

659

659

Total assets

659

659

Contingent consideration

12,636

12,636

Total liabilities

12,636

12,636

Group as at 30 September 2015

Liabilities

Group as at 30 September 2014

Assets

Liabilities

The Groups policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the
reporting period.
Level 1: The fair value of nancial instruments traded in active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The
quoted market price used for nancial assets held by the Group is the current bid price. These instruments are
included in Level 1. The Group did not have any Level 1 nancial instruments at the end of the current and prior
reporting periods.
Level 2: The fair value of nancial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and
rely as little as possible on entity-specic estimates. If all signicant inputs required to fair value an instrument are
observable, the instrument is included in Level 2.
Level 3: If one or more of the signicant inputs is not based on observable market data, the instrument is included
in Level 3. This is the case for the contingent consideration liability related to Product Madness.
(i) Valuation techniques used to derive Level 2 and Level 3 fair values
The fair value of nancial instruments that are not traded in an active market are determined using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available.
If all signicant inputs required to determine a fair value of an instrument are observable, then the instrument is
included in Level 2. If one or more of the signicant inputs is not based on observable market data, the instrument
is included in Level 3.
Valuation techniques used include using forward exchange rates at the balance sheet date for derivatives used for
hedging, and probability weighted payments for the contingent consideration liability, discounted to present value.
Derivatives used for hedging are included in Level 2. As the contingent consideration liability was calculated based
on unobservable inputs, it is included in Level 3. The unobservable inputs include revenue and EBITDA forecasts.

Aristocrat Leisure Limited Annual Report 2015

79

Exhibit F, pg. 80

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 82 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 2. Financial risk management continued


(ii) Fair value measurements using signicant unobservable inputs (Level 3)
The following table presents the changes in Level 3 instruments for the full year:
Contingent
consideration
liability
$000

Opening balance 30 September 2014

12,636

Interest expense

864

Payments made

(8,047)

Adjustments to fair value of liability recognised in expenses

9,358

Foreign exchange movements

2,331

Closing balance 30 September 2015

17,142

Of the adjustment to fair value included in general and administration expenses, expenses of $219,000 relates
to liabilities no longer held at 30 September 2015. A fair value adjustment to increase the liability amounting to
$9,139,000 relates to liabilities held at 30 September 2015.
(iii) Transfers between levels and changes in valuation techniques
There were no transfers between levels for recurring fair value measurements during the year. There were also no
changes to valuation techniques applied as of 30 September 2015.
(iv) Valuation inputs and relationships to fair value
The amounts payable for the contingent consideration liability are based on tiered earn-out bands payable to the
former owners of Product Madness. Amounts recorded are accrued based on the upper earn-out bands. Changes
in the unobservable inputs would not be expected to lead to a change in the fair value of the liability that is material
to the Group.
(v) Valuation processes
The valuation process for the contingent consideration liability uses forecasts developed by nance team members
of the Product Madness entities as an input into the valuations. The forecasts are reviewed by Group Finance
team members, including the chief nancial ofcer (CFO), with fair value estimates made following this review that
incorporate discounting to present value and probability weighting of earn-out outcomes. Discussions of the results
of the valuation processes between the CFO and Audit Committee are held annually, in line with the Groups full
year reporting dates.
(vi) Fair values of other nancial instruments
The Group also has a number of other nancial instruments which are not measured at fair value in the statement of
nancial position. The carrying value of these nancial instruments approximates their fair value.

80

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 81

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 83 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 3. Critical accounting estimates and judgements


Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a nancial impact on the Group and that are believed to be
reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
denition, seldom equal the related actual results. The estimates and assumptions that have a signicant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next nancial year are in
relation to impairment of intangibles, income taxes and the carrying value of inventories.
(i) Estimated recoverable amount of goodwill and intangible assets
The Group tests annually whether goodwill and other intangible assets that are not amortised have suffered
any impairment, in accordance with the accounting policy stated in Note 1(s). The recoverable amounts of
cash-generating units have been determined based on value-in-use calculations. These calculations require
the use of assumptions. Refer to Note 15 for details of these assumptions and the potential impact of changes
to the assumptions.
(ii) Income taxes
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Signicant
judgement is required in determining the worldwide provision for income taxes. There are certain transactions and
calculations undertaken during the ordinary course of business for which the ultimate determination is uncertain.
The Group estimates its tax liabilities based on the Groups understanding of the tax law. Where the nal outcome
of these matters is different from the amounts that were initially recorded, such differences will impact the current
and deferred income tax assets and liabilities in the period in which such determination is made.
(iii) Carrying value of inventories
The Group assesses at each reporting date whether inventory is recorded at the lower of cost and net realisable
value, including assessing the expected sales of slow moving inventories. These assessments involve estimates
and assumptions that are based on current expectations of demand and market conditions, including opportunities
to sell into new markets.

Aristocrat Leisure Limited Annual Report 2015

81

Exhibit F, pg. 82

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 84 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 4. Segment information


(a) Segment information provided to the chief operating decision maker
Segment revenues and results from
continuing operations
12 months to 30 September 2015

The Australia and


Americas New Zealand
$000
$000

Digital
$000

International
Class III
$000

Consolidated
$000

Revenue continuing
Revenue from external customers
Other segment revenue
Segment revenue

980,428

307,701

147,612

140,320

6,366

1,576,061
6,366

980,428

314,067

147,612

140,320

1,582,427

451,344

113,787

50,200

51,677

667,008

Result continuing
Segment result
Interest revenue not allocated to
segments

8,553

Interest expense

(89,858)

Design and development costs

(191,376)

Acquisition, transaction and


restructuring costs

(30,676)

Amortisation of acquired intangibles

(70,151)

Other expenses

(64,979)

Prot before income tax expense

228,521

Income tax expense

(71,865)

Prot from continuing operations

156,656

Loss from discontinued operation

29,774

Prot for the year

186,430

Other segment information


continuing
Non-current assets other than nancial
and deferred tax assets

2,119,000

90,947

989

20,396

2,231,332

Depreciation and amortisation expense

77,317

10,913

252

2,751

91,233

82

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 83

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 85 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 4. Segment information continued


(a) Segment information provided to the chief operating decision maker continued
Segment revenues and results from
continuing operations
12 months to 30 September 2014

The Australia and


Americas New Zealand
$000
$000

Digital
$000

International
Class III
$000

Consolidated
$000

Revenue continuing
Revenue from external customers
Other segment revenue
Segment revenue

459,731

218,373

50,300

105,261

5,417

833,665
5,417

459,731

223,790

50,300

105,261

839,082

176,898

89,669

17,000

41,426

324,993

Result continuing
Segment result
Interest revenue not allocated to
segments

5,867

Interest expense

(14,043)

Design and development costs

(122,747)

Acquisition, transaction and


restructuring costs

(17,074)

Amortisation of acquired intangibles

(2,392)

Other expenses

(23,814)

Prot before income tax expense

150,790

Income tax expense

(33,812)

Prot from continuing operations

116,978

Loss from discontinued operation

(133,407)

Loss for the year

(16,429)

Other segment information


continuing
Non-current assets other than nancial
and deferred tax assets

229,772

76,229

506

20,061

326,568

Depreciation and amortisation expense

33,077

5,792

83

1,900

40,852

Aristocrat Leisure Limited Annual Report 2015

83

Exhibit F, pg. 84

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 86 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 4. Segment information continued


(b) Notes to the segment information
Management has determined the operating segments based on the reports reviewed by the Board of Directors and
the Executive Leadership Team. Reports reviewed consider the business primarily from a geographical perspective.
The following reportable segments have been identied:
The Americas;
Australia and New Zealand;
Digital; and
International Class III.
Segment results
Digital has been split out from the prior segment Rest of World, with the remainder of Rest of World now termed
International Class III as compared to the description in the prior annual nancial statements. As Video Gaming
Technologies Inc. is located in North America, it is included in the Americas segment. The prior year information has
been shown in a manner consistent with the current year information.
Segment result represents earnings before interest and tax, and before signicant items, charges for design and
development expenditure, amortisation of acquired intangibles, selected intercompany charges and corporate costs.
Segment revenues are allocated based on the country in which the customer is located. Segment revenues and
expenses are those that are directly attributable to a segment and the relevant portion that can be allocated to the
segment on a reasonable basis.
Segment revenues, expenses and results exclude transfers between segments. The revenue from external parties
reported to the chief operating decision maker is measured in a manner consistent with that in the statement of
comprehensive income.
The activities of the entities in the Group are predominantly within a single business which is the development,
assembly, sale, distribution and service of gaming machines and systems. The Group also operates within the
on-line social gaming and real money wager markets.

84

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 85

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 87 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 5. Prot/(loss) for the year from continuing operations


Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
Notes
$000

(a) Revenue
Sale of goods and related licences
Gaming operations, on-line and services
Total revenue
(b) Other income
Interest
Foreign exchange gains
Gain on remeasurement of contingent consideration
Gain on disposal of property, plant and equipment
Sundry income
Total other income
(c) Expenses
(i) Depreciation and amortisation
Depreciation and amortisation of property, plant and equipment
Buildings
Plant and equipment
Leasehold improvements
Total depreciation and amortisation of property, plant and equipment
Amortisation of intangible assets
Customer relationships and contracts
Game names
Computer technology and software
Intellectual property and licences
Capitalised development costs
Total amortisation of intangible assets
Total depreciation and amortisation
(ii) Employee benets expense
Salaries and wages
Superannuation costs
Post-employment benets other than superannuation
Share-based payments expense
Total employee benets expense
(iii) Lease payments
Rental expense relating to operating leases
Minimum lease payments
(iv) General and administration costs
General and administration costs excluding signicant expense items
Acquisition related transaction, integration and restructuring costs
Fair value adjustments to contingent consideration
Amortisation of acquired intangibles included in general
and administration costs
Total general and administration costs
(v) Other signicant expense items
Write-down of inventories to net realisable value
Legal costs (excluding acquisition transaction costs)
Net foreign exchange (gain)/loss

1(e)(i)
1(e)(ii)

13

15

27(e)

708,705
867,356
1,576,061

507,347
326,318
833,665

14,919
6,821

4,072
25,812

11,284

534
14
161
11,993

830
79,262
4,050
84,142

695
35,877
2,565
39,137

40,541
674
28,060
2,408
5,559
77,242
161,384

3,299
298
510
4,107
43,244

318,273
10,911
3,659
16,293
349,136

206,414
9,032
3,499
8,506
227,451

21,579

16,290

189,128
30,676
9,358

95,076
17,074

65,471
294,633

112,150

21,542
14,654
(6,821)

5,646
8,857
5,493

Aristocrat Leisure Limited Annual Report 2015

85

Exhibit F, pg. 86

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 88 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 6. Income tax expense


Major components of income tax expense are:
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
$000

(a) Income tax expense


Current income tax

88,742

39,502

Deferred income tax

(11,847)

(5,147)

Adjustments in respect of current income tax of previous years

(5,030)

2,431

Income tax expense

71,865

36,786

71,865

33,812

Income tax expense is attributable to:


Prot from continuing operations
Prot from discontinued operations
Aggregate income tax expense

2,974

71,865

36,786

Deferred income tax expense included in income tax expense comprises:


(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
Deferred income tax expense included in income tax expense

(11,847)

6,022

(11,169)

(11,847)

(5,147)

(b) Reconciliation of income tax expense to prima facie tax payable


Prot from continuing operations before income tax expense
Prot/(loss) from discontinued operations before income tax expense
Prot before income tax expense
Tax at the Australian tax rate of 30% (2014: 30%)

228,521

150,790

29,774

(130,433)

258,295

20,357

77,489

6,107

Tax effect of amounts which are not deductible/(taxable) in calculating


taxable income:
Overseas exempt income and non-creditable taxes

(8,166)

(8,229)

(Gain)/loss on disposal of subsidiaries

(8,095)

15,538

Impairment (reversal)/loss

(5,132)

21,768

971

574

3,522

Legal and entertainment costs


Contingent consideration fair value adjustment
Impact of changes in tax rates and law

7,853

Other non-deductible expenses

4,450

2,595

72,892

38,353

Subtotal
Research and development tax credit

(2,976)

(2,927)

Previously unrecognised tax losses now recouped to reduce current tax expense

(6,820)

(3,038)

Deferred tax assets not recoverable

3,383

Current tax losses not recognised

2,057

8,440

2,217

(79)

(956)

Difference in overseas tax rates


Difference in exchange rates on overseas tax rates
Adjustment in respect of previous years income tax:
Current income tax

(5,030)

2,431

Deferred income tax

5,438

(4,734)

71,865

36,786

27.82%

180.70%

Income tax expense


Average effective tax rate
86

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 87

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 89 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 6. Income tax expense continued


Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
$000

(c) Amounts recognised directly in equity


Aggregate current and deferred tax arising in the reporting period and not recognised
in net prot or loss or other comprehensive income but directly credited or (debited) to
equity
Net deferred tax credited/(debited) directly to equity
Aggregate current and deferred tax arising in the reporting period directly credited
or (debited) to equity

2,345

3,792

2,345

3,792

822

6,109

(d) Revenue and capital tax losses


Unused gross tax losses for which no deferred tax asset has been recognised
Unused gross capital tax losses for which no deferred tax asset has been recognised
Potential tax benet

101,266

101,266

102,088

107,375

30,704

32,789

29,439

29,439

Unused revenue losses were incurred by Aristocrat Leisure Limiteds overseas


subsidiaries. All unused capital tax losses were incurred by Australian entities.
(e) Unrecognised temporary differences
Deferred tax assets on general temporary differences

Under Australian tax law, the taxable prot made by a tax consolidated group in relation to an entity leaving the
group depends on a range of factors, including the tax values and/or carrying values of assets and liabilities of the
leaving entity which vary in line with the transactions and events recognised in each entity. The taxable prot or loss
ultimately made on the disposal of investments within the tax consolidated group will therefore depend upon when
each entity leaves the tax consolidated group and the assets and liabilities that the leaving entity holds at that time.
The Australian tax consolidated group considers the effects of the entities entering or leaving the tax consolidated
group to be a change of tax status that is only recognised when those events occur. As a result, temporary
differences and deferred tax liabilities have not been measured or recognised in relation to investments within the
tax consolidated group.
The deferred tax balances in relation to Aristocrat Leisure Limiteds indirect overseas investments have not been
recognised. The accounting policy in relation to this is set out in Note 1(f).
(f) Tax consolidation legislation
Aristocrat Leisure Limited and its wholly-owned Australian controlled entities have implemented tax consolidation
legislation as of 1 January 2004. The accounting policy in relation to this legislation is set out in Note 1(g).
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing
agreement which, in the opinion of the Directors, limits the joint and several liability of the wholly-owned entities in
the case of a default by the head entity, Aristocrat Leisure Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully
compensate Aristocrat Leisure Limited for any current tax payable assumed and are compensated by Aristocrat
Leisure Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused
tax credits that are transferred to Aristocrat Leisure Limited under the tax consolidation legislation. The funding
amounts are determined by reference to the tax funding agreement which applies a group allocation approach,
taking into account a combination between the stand alone taxpayer and a separate taxpayer within a group
amounts recognised in the wholly-owned entities nancial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from
the head entity. The head entity may also require payment of interim funding amounts to assist with its obligations
to pay tax instalments.

Aristocrat Leisure Limited Annual Report 2015

87

Exhibit F, pg. 88

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 90 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 7. Dividends
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
$000

Ordinary shares
Final dividends paid

2014 8.0 cents, unfranked, per fully paid share paid on 19 December 2014

50,401

2013 7.5 cents, unfranked, per fully paid share paid on 20 December 2013

41,297

Interim dividends paid

2015 8.0 cents, unfranked, per fully paid share paid on 3 July 2015

2014 8.0 cents, unfranked, per fully paid share paid on 27 June 2014

Total dividends paid and provided during the year

50,683

44,084

101,084

85,381

101,108

82,534

Dividends paid were satised as follows:


Paid in cash
Dividend received by Aristocrat Employee Equity Plan Trust
Paid through the Dividend Reinvestment Plan

(24)

(82)

2,929

101,084

85,381

Dividends not recognised at year end


Since the end of the year, the Directors have recommended the payment of a nal dividend of 9.0 cents (2014: 8.0
cents) per fully paid ordinary share, unfranked. The aggregate amount of the proposed nal dividend expected to
be paid on 18 December 2015 out of retained earnings at 30 September 2015, but not recognised as a liability at
the end of the year, is $57,341,000.

Franked dividends

Estimated franking credits expected to be available for subsequent nancial years


based on a tax rate of 30% (2014: 30%)

Consolidated
2015
2014
$000
$000

The above amounts represent the balance of the franking account of the parent entity as at the end of the year,
adjusted for:
franking credits that will arise from the payment of the current tax liability;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that may be prevented from being distributed in subsequent nancial years.

88

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 89

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 91 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 8. Cash and cash equivalents


Consolidated
2014
2015
$000
$000

Cash at bank and in hand

329,005

285,929

Cash at bank and in hand earns interest at oating rates based on daily bank deposit rates.
Risk exposure
The Groups exposure to interest rate risk is discussed in Note 2. The maximum exposure to credit risk at the
reporting date is the carrying amount of each class of cash and cash equivalents mentioned above.
Note 9. Trade and other receivables
Current
Trade receivables
Provision for impairment of receivables
Other receivables

404,026

297,884

(13,268)

(4,497)

390,758

293,387

48,962

34,984

439,720

328,371

Current receivables are non-interest bearing and are generally on 30-120 day terms from the date of billing.
Some customers may be provided with terms that are longer than this range, based on an assessment of the
overall transaction with the customer.
Non-current
Trade receivables

79,001

Other receivables

7,034

71,641
3,030

86,035

74,671

91+ days
$000

(a) Trade receivables current


At year end, the ageing analysis of trade receivables is as follows:
Total
$000

Current
$000

0-30 days
$000

31-60 days
$000

61-90 days
$000

2015 Consolidated

404,026

353,882

33,406

4,963

1,953

9,822

2014 Consolidated

297,884

255,324

21,941

4,034

4,415

12,170

Amounts shown as current in the above table represent receivables that are within their trading terms. As of 30
September 2015, trade receivables of $7,250,000 (2014: $1,966,000) were past due and considered impaired and
trade receivables of $42,894,000 (2014: $40,594,000) were past due but not impaired. The ageing of past due and
not impaired amounts is as follows:
Total
$000

Current
$000

0-30 days
$000

31-60 days
$000

61-90 days
$000

91+ days
$000

2015 Consolidated

42,894

33,201

4,912

1,823

2,958

2014 Consolidated

40,594

21,714

3,825

4,231

10,824

An assessment of whether trade receivables are likely to be collected is performed at each reporting period, based
on the meeting of payment terms, past credit history and negotiations with customers.

Aristocrat Leisure Limited Annual Report 2015

89

Exhibit F, pg. 90

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 92 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 9. Trade and other receivables continued


Consolidated
2015
2014
$000
$000

(a) Trade receivables current continued


Movements in the provision for impairment of receivables is as follows:
At start of the year

(4,497)

(5,322)

Provision for impairment recognised during the year

(8,360)

(289)

Foreign currency exchange differences

(1,042)

(332)

631

1,446

(13,268)

(4,497)

Provisions no longer required


At end of the year

The creation and release of the provision for impaired receivables has been included in general and administration
costs in the statement of comprehensive income. Amounts charged to the provision account are generally written
off when there is no expectation of recovering additional cash. Included in the provision above is $6,600,000
(2014: $3,573,000) relating to Latin America trade receivables.
(b) Trade receivables non-current
No provision for impairment of receivables has been carried forward against the non-current receivables (2014:
$nil). There are no other non-current receivables that are impaired or past due but not impaired.
(c) Other receivables current
These include prepayments and other receivables incurred under normal terms and conditions and which do not
earn interest.
(d) Other receivables non-current
These include long-term deposits and prepayments and other receivables incurred under normal terms and
conditions and which do not earn interest.
(e) Fair value risk current
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.
(f) Fair value non-current
The fair values of non-current receivables approximate their discounted carrying values, which are discounted to
present value.

90

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 91

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 93 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 9. Trade and other receivables continued


(g) Interest rate and foreign currency risk
The carrying amounts of the Groups current and non-current receivables are denominated in the following
currencies:
Consolidated
2015
2014
$000
$000

US dollars

352,154

239,542

Australian dollars

137,901

123,691

35,700

39,809

525,755

403,042

439,720

328,371

86,035

74,671

525,755

403,042

Other(1)

Current receivables
Non-current receivables

(1)

Other refers to a basket of currencies (Japanese Yen, Euro, South African Rand, New Zealand Dollars).

Details regarding interest rate and foreign exchange risk exposure are disclosed in Note 2(a)(i) and (ii).
(h) Credit risk
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables
mentioned above. Refer to Note 2 for more information on the risk management policy of the Group. The Group
holds guarantees over the debts of certain customers. The value of debtor balances over which guarantees are
held is detailed below:
Consolidated
2015
2014
$000
$000

Trade receivables(2) with guarantees


(2)

Trade receivables without guarantees

(2)

14,265

11,426

455,494

353,602

469,759

365,028

Includes current and non-current trade receivables, net of provision for impairment of receivables.

Aristocrat Leisure Limited Annual Report 2015

91

Exhibit F, pg. 92

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 94 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 9. Trade and other receivables continued


(i) Leasing arrangements
Included in trade receivables are receivables from gaming machines that have been sold under nance lease
arrangements. The lease payments receivable under these contracts are as follows:
Consolidated
2015
2014
$000
$000

Minimum lease payments under nance leases are receivable as follows:


Within one year

9,372

8,435

Later than one year but not later than ve years

4,577

2,134

13,949

10,569

Within one year

227

532

Later than one year but not later than ve years

449

601

676

1,133

9,145

7,903

Gross investment in leases


Unearned nance income

The present value of minimum lease payments is as follows:


Within one year
Later than one year but not later than ve years

4,128

1,533

13,273

9,436

Lease receivables are classied as follows:


Current

9,145

7,903

Non-current

4,128

1,533

13,273

9,436

92

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 93

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 95 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 10. Inventories


Consolidated
2014
2015
$000
$000

Current
Raw materials and stores at cost
Provision for obsolescence and impairment losses
Work in progress at cost
Finished goods at cost
Provision for obsolescence and impairment losses
Inventory in transit at cost

85,118

83,488

(34,502)

(39,874)

50,616

43,614

6,920

4,979

43,631

27,810

(3,511)

(2,560)

40,120

25,250

4,537

1,997

102,193

75,840

Inventory expense
Inventories recognised as an expense during the year ended 30 September 2015 amounted to $317,240,000 (2014:
$205,169,000).
Note 11. Financial assets and nancial liabilities
2015
$000

2014
$000

10,082

7,681

659

10,082

8,340

Debt securities held-to-maturity

4,323

4,527

Other investments

3,422

7,745

4,527

Financial assets
Current
Debt securities held-to-maturity
Derivatives used for hedging

Non-current

Impairment and risk exposure held-to-maturity investments


The maximum exposure to credit risk at the reporting date is the carrying amount of the investments. None of the
held-to-maturity investments are either past due or impaired.
All held-to-maturity investments are denominated in US dollars. Details regarding interest rate and foreign
exchange risk exposure are disclosed in Note 2. There is also no exposure to price risk as the investments will be
held to maturity.
Financial liabilities

Notes

2015
$000

2014
$000

331

8,212

Current
Derivatives used for hedging
Non-current
Interest rate swap contracts cash ow hedges

Aristocrat Leisure Limited Annual Report 2015

93

Exhibit F, pg. 94

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 96 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 12. Other assets

Consolidated
Notes

2015
$000

2014
$000

237

2,026

Current
Intellectual property rights
Other current assets

1(n)

1,927

2,164

2,026

Note 13. Property, plant and equipment


2015
$000

2014
$000

Land and buildings


Land and buildings at cost

16,633

13,727

Leasehold improvements at cost

53,848

34,889

Accumulated amortisation and impairment losses

(25,675)

(22,183)

28,173

12,706

44,806

26,433

Plant and equipment owned at cost

386,368

254,354

Accumulated depreciation and impairment losses

(227,718)

(159,351)

Total land and buildings


Plant and equipment

Total plant and equipment

94

158,650

95,003

203,456

121,436

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 95

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 97 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 13. Property, plant and equipment continued


Reconciliations
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of
the current nancial year are set out below:
Land and
buildings
$000

Leasehold
improvements
$000

Plant and
equipment
$000

Total
$000

Consolidated
Carrying amount at 1 October 2013

13,567

15,053

78,293

106,913

Additions

49

995

68,460

69,504

Disposals

(149)

(120)

(269)

Impairment losses
Transfers
Depreciation and amortisation continuing operations
Depreciation and amortisation discontinued
operations
Foreign currency exchange differences
Carrying amount at 30 September 2014
Additions
Additions from acquisitions
Assets included in disposal group classied as held for
sale and other disposals
Impairment losses
Transfers
Depreciation and amortisation continuing operations
Depreciation and amortisation discontinued
operations
Foreign currency exchange differences
Carrying amount at 30 September 2015

(226)

(2,703)

(2,929)

(17)

(239)

(15,411)

(15,667)

(695)

(2,565)

(35,877)

(39,137)

(819)

(819)

823

(163)

3,180

3,840

13,727

12,706

95,003

121,436

412

669

119,288

120,369

14,994

33,217

48,211

(17)

(56)

(927)

(1,000)

46

(4,145)

(4,099)

(36,812)

(36,812)

(830)

(4,050)

(79,262)

(84,142)

(394)

(394)

3,341

3,864

32,682

39,887

16,633

28,173

158,650

203,456

Transfers in the table above predominantly relate to gaming operations assets that have been transferred to
inventory after being returned, or have been sold to customers.

Aristocrat Leisure Limited Annual Report 2015

95

Exhibit F, pg. 96

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 98 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 14. Deferred tax assets and liabilities


Consolidated
2014
2015
$000
$000

The balance comprises temporary differences attributable to:


Gross deferred tax assets
Employee benets

25,842

Accruals and other provisions

18,003

8,310

Provision for stock obsolescence

13,141

8,240

3,019

Financial liabilities
Share based equity
Unrealised foreign exchange losses
Tax losses

11,563

4,758

9,616

14,170

2,031

2,185

34,378

Other

18,744

10,290

Gross deferred tax assets

99,862

84,428

Plant, equipment and intangible assets

(18,528)

(4,311)

Subtotal

81,334

80,117

Set-off of deferred tax liabilities pursuant to set-off provisions:

Deferred tax assets on entity held for sale

(151)

81,183

80,117

Balance at start of year

80,117

75,001

Credited to prot and loss

11,847

5,147

Credited to other comprehensive income

15,554

2,345

3,792

(32,299)

(3,372)

Net deferred tax assets


Movements

Credited directly to equity


Tax losses utilised
Tax losses recognised

101

Deferred tax liability on disposal of subsidiary

1,058

Other deferred tax liabilities

(2,170)

Deferred tax assets on entity held for sale


Foreign exchange currency movements
Closing balance at year end
Net deferred tax assets to be utilised within 12 months
Net deferred tax assets to by utilised after more than 12 months

96

(151)

3,669

661

81,183

80,117

94,178

76,239

(12,995)

3,878

81,183

80,117

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 97

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 99 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 15. Intangible assets


Consolidated
2014
2015
$000
$000

1,088,974

94,026

Customer relationships and contracts

Goodwill

703,138

Accumulated amortisation

(44,372)

658,766

29,387

(738)

Tradenames and game names


Accumulated amortisation

28,649

Intellectual property and licences

11,554

9,328

Accumulated amortisation and impairment losses

(2,294)

(6,418)

9,260

2,910

Capitalised development costs

16,087

14,944

Accumulated amortisation

(4,625)

(510)

11,462

14,434

Technology and software

200,410

60,375

Accumulated amortisation and impairment losses

(55,680)

(41,284)

144,730

19,091

1,941,841

130,461

Total

Capitalised development costs are costs incurred on internal development projects where the criteria in Note 1(s)(iv)
are met.

Aristocrat Leisure Limited Annual Report 2015

97

Exhibit F, pg. 98

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 100 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 15. Intangible assets continued


Customer
relationships
and
Goodwill
contracts
$000
$000

Tradename
and game
names
$000

Intellectual
property
and
licences
$000

Capitalised
development
costs
$000

Technology
and
software
$000

Total
$000

Consolidated
Carrying amount
at 1 October 2013

106,122

9,394

7,269

28,343

151,128

Additions

12,586

565

14,802

4,411

32,364

Disposals

(32,399)

(2,088)

(6,968)

(41,455)

Impairment losses

(5,602)

(4,397)

(145)

(10,144)

Transfers

(1,143)

(1,143)

Amortisation
charge continuing
operations

(298)

(510)

(3,299)

(4,107)

Amortisation
charge
discontinued
operations

(642)

(3,720)

(4,362)

7,717

(6)

469

8,180

94,026

2,910

14,434

19,091

130,461

2,591

2,587

14,241

19,419

783,884

561,773

23,478

(8,264)

8,264

Foreign currency
exchange
movements
Carrying amount
at 30 September
2014
Additions
Additions on
acquisition of
subsidiaries
Transfers
Assets included
in disposal group
classied as held
for sale

112,036 1,481,171

(468)

(468)

Impairment losses

(2,533)

(2,533)

Amortisation
charge continuing
operations

(40,541)

(674)

(2,408)

(5,559)

(28,060)

(77,242)

Amortisation
charge
discontinued
operations

(29)

(29)

Foreign currency
exchange
movements

219,796

137,534

5,845

436

27,451

391,062

Carrying amount
at 30 September
2015

1,088,974

658,766

28,649

9,260

11,462

144,730 1,941,841

The intangible assets of the Group increased primarily as a result of the acquisition of Video Gaming Technologies
Inc. Refer to Note 35 for further information on this acquisition.
The tradename acquired which has a carrying value of $17,689,000 at 30 September 2015 has an indenite useful
life. The factors that determined that this asset had an indenite useful life included the history of the business and
tradename, the market position, stability of the industry and the expected usage.
98

Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 99

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 101 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 15. Intangible assets continued


(a) Impairment tests
Goodwill and other intangibles are allocated to the Groups cash-generating units (CGUs) which are identied as
the geographical business units within each segment.
A summary of the goodwill allocation by CGU is presented below:
2015
$000

2014
$000

Americas (excluding VGT)

81,295

73,139

Product Madness

25,502

20,426

461

South Africa
VGT

982,177

1,088,974

94,026

In the years ended 30 September 2015 and 30 September 2014, the recoverable amounts of the Groups CGUs
were determined based upon a value-in-use calculation.
Goodwill of $468,000 relating to South Africa forms part of the assets classied as held for sale in the statement of
nancial position.
(b) Key assumptions used for value-in-use calculations
A discounted cash ow model has been used based on operating and investing cash ows (before borrowing costs
and tax impacts) in valuing the Groups CGUs that contain intangible assets. The following inputs and assumptions
have been adopted:
1. Financial budgets and strategic plans, approved by the Board to 2016 and management projections from
2017 to 2020. These projections, which include projected revenues, gross margins and expenses, have been
determined based on past performance and management expectations for the future. Expected market
conditions in which each CGU operates have been taken into account in the projections. Refer below for
terminal growth rates used for each CGU.
2. A pre-tax annual discount rate of:
2015

2014

Americas (excluding VGT)

14.5%

14.6%

Product Madness

14.3%

14.6%

9.8%

Not applicable

Not applicable

16.4%

VGT
Japan

3. A terminal growth rate, which does not exceed the long-term average growth rate for the gaming industry in
the regions:

Americas (excluding VGT)

2015

2014

3.0%

3.0%

Product Madness

3.0%

3.0%

VGT

2.0%

Not applicable

Not applicable

2.0%

Japan

4. An allocation of head ofce assets.


In the 2014 year, following a review of impairment calculations for the Japan Pachislot business, an impairment
loss before tax of $72,560,000 was recorded, and non-recoverable deferred tax assets of $5,440,000, recorded as
a tax expense.
(c) Impact of possible changes in key assumptions
With regard to the assessment of the value-in-use of the CGUs, management does not believe that a reasonably
possible change in any one of the key assumptions would cause the carrying values of the CGUs to materially
exceed their recoverable amounts.
Aristocrat Leisure Limited Annual Report 2015

99

Exhibit F, pg. 100

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 102 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 16. Trade and other payables


Consolidated
2015
2014
$000
$000

Current
Trade payables
Contingent consideration
Deferred consideration
Other payables

107,134

65,661

17,142

6,253

24,964

212,146

104,260

361,386

176,174

6,383

Non-current
Contingent consideration
Deferred consideration
Other payables

43,228

571

43,228

6,954

301,533

100,077

(a) Foreign currency risk


The carrying amounts of the Groups payables are denominated in the following currencies:
US dollars
Australian dollars
Other(1)

(1)

94,628

63,974

8,453

19,077

404,614

183,128

Other refers to a basket of currencies (Japanese Yen, Euro, South African Rand, New Zealand Dollars).

(b) Fair value


Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.

100 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 101

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 103 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 17. Borrowings


Notes

Consolidated
2015
2014
$000
$000

Current
Secured
Bank loans

Lease liabilities

114,260

124

124

124

114,384

Non-current
Secured
Bank loans

1,779,207

301

243

1,779,508

243

(i)

7,853

7,285
375,000

Lease liabilities

(a) Financing arrangements


Unrestricted access was available at balance date to the following lines of credit:
Credit standby arrangements
Total facilities

Bank overdrafts

Bank loans

(ii)

1,879,207

Other

(iii)

10,000

1,887,060

392,285

Used at reporting date

Bank overdrafts

Bank loans

Other

576

1,779,207

114,260

1,779,207

114,836

Unused at reporting date

Bank overdrafts

Bank loans

Other

7,853

6,709

100,000

260,740

10,000

107,853

277,449

(i) The bank overdraft facilities ($5,000,000 and US$2,000,000) are subject to annual review.
(ii) The bank loan facilities were structured as follows:
Syndicated Facilities
US $1,270 million fully underwritten 7 year US Term Loan B debt facility maturing 20 October 2021.
AUD $100 million 5 year Revolving facility maturing 20 October 2019.
These facilities are provided by a syndicate of banks and nancial institutions. These secured facilities are
supported by guarantees from certain members of the Companys wholly owned subsidiaries and impose various
afrmative and negative covenants on the Company, including restrictions on encumbrances, and customary
events of default. As part of the corporate facility, the Group is subject to certain customary nancial covenants
measured on a six-monthly basis.
Borrowings are at a oating rate with a 1% LIBOR oor as specied in the Term Loan B Syndicated Facility
Agreement. A portion of the interest rate exposure has been xed under separate interest rate swap arrangements.
(iii) Other facilities relate to an uncommitted money market borrowing line with Westpac Banking Corporation.

Aristocrat Leisure Limited Annual Report 2015 101

Exhibit F, pg. 102

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 104 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 17. Borrowings continued


(b) Forward exchange contracts
The Group enters into derivatives in the form of forward exchange contracts to hedge foreign currency
denominated receivables and also to manage the purchase of foreign currency denominated inventory and capital
items. The following table provides information as at 30 September 2015 on the net fair value of the Groups existing
foreign exchange hedge contracts:
Maturity prole(1)
Weighted
average
exchange
rate

1 year
or less
$000

1 to 7
year(s)
$000

Net fair
value gain/
(loss)2
$000

0.6276

18,324

(478)

AUD/USD

0.6958

44,554

140

AUD/ZAR

9.6500

466

63,344

(331)

Currency pair

AUD/EUR

Total
(1)

The foreign base amounts are converted at the prevailing period end exchange rate to AUD equivalents.

(2)

The net fair value of the derivatives above is included in receivables/(payables).

(c) Net fair value of nancial assets and liabilities


(i) On-statement of nancial position
The fair value of current borrowings approximates the carrying amount. The fair value of non-current borrowings
also approximates the carrying value given that the USD borrowing is a oating rate.
(ii) Off-statement of nancial position
At 30 September 2015, there were no off-statement of nancial position nancial assets or liabilities, other than
those potential liabilities which may arise from certain contingencies disclosed in Note 24.
(d) Foreign currency risk
The carrying amounts of the Groups borrowings are denominated in the following currencies:
Consolidated
2015
2014
$000
$000

US dollars

1,779,632

114,260

Australian dollars

280

Japanese yen

87

1,779,632

114,627

For an analysis of the sensitivity of borrowings to interest rate and foreign exchange risk, refer to Note 2.

102 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 103

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 105 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 18. Provisions


Notes

Consolidated
2015
2014
$000
$000

Current
Employee benets

1(x)

10,515

9,740

Make good allowances

1(w)

128

Progressive jackpot liabilities

1(w)

17,431

5,467

Warranties

1(w)

50

374

Onerous contracts

1(w)

32,410

28,124

47,991

Non-current
Employee benets

1(x)

1,812

4,767

Make good allowances

1(w)

8,550

3,867

Progressive jackpot liabilities

1(w)

4,324

4,528

14,686

13,162

Movements in provisions
Movements in each class of provision during the nancial year, other than employee benets, are set out below:
Progressive
jackpot
liabilities
$000

Warranties
$000

3,867

9,995

(2,302)

Make good
allowances
$000

Onerous
contracts
$000

Total
$000

374

32,410

46,646

(11,800)

(14,102)

Consolidated current and non-current


Carrying amount at 1 October 2014
Payments
Acquisition of subsidiary
Additional provisions recognised
Assets included in a disposal group
classied as held for sale
Disposal of subsidiaries
Reversal of provisions recognised
Foreign currency exchange differences
Carrying amount at
30 September 2015

3,419

3,419

680

11,578

142

5,900

18,300

(193)

(193)

(140)

(25,100)

(25,240)

(285)

(2,600)

(2,885)

852

2,484

12

1,190

4,538

8,678

21,755

50

30,483

Note 19. Other liabilities


Consolidated
2015
2014
$000
$000

Current
Deferred revenue

40,063

33,128

9,320

6,262

Non-current
Deferred revenue
Other non-current liabilities

3,995

8,331

13,315

14,593

Aristocrat Leisure Limited Annual Report 2015 103

Exhibit F, pg. 104

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 106 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 20. Contributed equity


Notes

Ordinary shares, fully paid

Consolidated
2015
2014
Shares
Shares

637,119,632 630,022,253

Consolidated
2015
2014
$000
$000

693,834

641,603

Movements in ordinary share capital


Ordinary shares at the beginning of the year

(a) 630,022,253

551,418,047

641,603

233,137

7,097,379

78,604,206

52,231

413,463

(4,997)

637,119,632 630,022,253

693,834

641,603

Shares issued during the year


Less: Transaction costs arising on shares
issued (net of tax)
Ordinary shares at the end of the nancial year

(a) Ordinary shares


Ordinary shares have no par value and entitle the holder to participate in dividends and the winding up of the
Company in proportion to the number of, and amounts paid on, the shares held. Holders of ordinary shares are
entitled to one vote per share at meetings of the Company.
There is no current on-market buy back.
(b) Capital management
The Groups overall strategic capital management objective is to maintain a funding structure, which provides
sufcient exibility to fund the operational demands of the business and to underwrite any strategic opportunities.
The Group has managed its capital through interest and debt coverage ratios as follows:
2015

2014

Gross debt/bank EBITDA*

3.1X

0.5X

Net debt/(cash)/bank EBITDA*

2.6X

(0.8)X

Interest coverage ratio (bank EBITDA*/interest expense**)

7.4X

16.9X

Bank EBITDA refers to Consolidated EBITDA for the Group as dened in Aristocrats Syndicated Facility Agreement for 2015 and other credit
agreements for 2014. Bank EBITDA and interest for the period ended 30 September 2015 is calculated on a pro forma basis assuming a full
year of ownership of VGT.

**

Interest expense includes ongoing nance fees relating to bank debt facility arrangements, such as line fees.

Note 21. Reserves and retained earnings


Notes

Consolidated
2015
2014
$000
$000

(a) Reserves
Foreign currency translation reserve

(i)

62,795

(51,290)
235

Share-based payments reserve

(ii)

(34,891)

Interest rate hedge reserve

(iii)

(5,193)

Non-controlling interest reserve

(iv)

(7,050)

(7,050)

15,661

(58,105)

104 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 105

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 107 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 21. Reserves and retained earnings continued

Notes

Consolidated
2015
2014
$000
$000

(i) Foreign currency translation reserve


The foreign currency translation reserve records the foreign currency
exchange differences arising from the translation of foreign operations,
the translation of transactions that hedge the Companys net investment
in a foreign operation or the translation of foreign currency monetary items
forming part of the net investment in foreign operations.
Refer to Note 1(d)(iii).
Foreign currency translation reserve at the beginning of the nancial year
36

Realised exchange differences on net investment in foreign operation


Net exchange differences on translation of foreign operations
discontinued operation
Net exchange differences on translation of foreign operations and net
investment in foreign operations continuing operations
Net investment hedge

(51,290)

(73,305)

7,170

10,299

(282)

2,556

136,446

9,160

(41,784)

Deferred tax on net investment hedge

12,535

Foreign currency translation reserve at the end of the nancial year

62,795

(51,290)

(ii) Share-based payments reserve


The share-based payments reserve is used to recognise the fair value of
all shares, options and rights both issued and issued but not exercised
under the various employee share plans, as well as purchases of shares
by the Aristocrat Employee Share Trust.
Share-based payments reserve at the beginning of the nancial year

235

(4,780)

16,293

8,506

(54,455)

(5,083)

3,036

1,592

Net movement in share-based payments reserve

(35,126)

5,015

Share-based payments reserve at the end of the nancial year

(34,891)

235

Movement in fair value of interest rate hedges

(8,212)

Deferred tax

3,019

Interest rate hedge reserve at the end of the nancial year

(5,193)

Share-based payments expense


Issues of shares to and purchases of shares by the
Aristocrat Employee Share Trust
Share-based tax and other adjustments

(iii) Interest rate hedge reserve


The interest rate hedge reserve is used to record gains or losses on
interest rate hedges that are recognised in other comprehensive income.
Interest rate hedge reserve at the beginning of the year

(iv) Non-controlling interest reserve


The non-controlling interest reserve is used to record transactions with
non-controlling interests that do not result in the loss of control.
Non-controlling interest reserve at the beginning of the year
Transactions with non-controlling interests during the year
Non-controlling interest reserve at the end of the nancial year

30

(7,050)

(7,050)

(7,050)

(7,050)

Aristocrat Leisure Limited Annual Report 2015 105

Exhibit F, pg. 106

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 108 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 21. Reserves and retained earnings continued

Notes

Consolidated
2015
2014
$000
$000

(b) Retained earnings


Retained earnings at the beginning of the nancial year

122,582

224,392

Net prot/(loss) attributable to owners of Aristocrat Leisure Limited

186,430

(16,429)

Dividends paid or provided for


Retained earnings at the end of the year

(101,084)

(85,381)

207,928

122,582

Note 22. Net tangible assets per share


Net tangible assets per share

$(1.61)

$0.91

A large proportion of the Groups assets are intangible in nature, including goodwill and identiable intangible assets
relating to businesses acquired. These assets are excluded from the calculation of net tangible assets per share,
which results in a negative amount.
Net assets per share at 30 September 2015 were $1.44 (2014: $1.12).
Note 23. Events occurring after reporting date
There has not arisen in the interval between the end of the year and the date of this report any item, transaction or
event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect signicantly
the operations of the Group, the results of those operations, or the state of affairs of the Group, in future nancial
reporting periods.
Refer to Note 7 for information regarding dividends declared after reporting date.
Note 24. Contingent liabilities
The Group and parent entity have contingent liabilities at 30 September 2015 in respect of the following matters:
(i) a contingent liability may exist in relation to certain guarantees and indemnities given in the ordinary course of
business by the Group;
(ii) controlled entities within the Group are and become parties to various legal actions in the ordinary course of
business and from time to time. The Directors consider that any liabilities arising from this type of legal action
are unlikely to have a material adverse effect on the Group;
(iii) controlled entities within the Group are and become parties to various legal actions concerning intellectual
property claims. Intellectual property claims can include challenges to the Groups patents on various products
or processes and/or assertions of infringement of third party patents.
Most intellectual property claims involve highly complex issues. Often, these issues are subject to substantial
uncertainties and therefore the probability of damages, if any, being sustained and an estimate of the amount
of damages is difcult to ascertain. Based on the information currently available, the Directors consider that
current claims are unlikely to have a material adverse effect on the Group; and
(iv) Aristocrat Leisure Limited, Aristocrat International Pty Ltd, Aristocrat Technologies Australia Pty Ltd, Aristocrat
(Asia) Pty Limited and Aristocrat (Macau) Pty Limited are parties to a deed of cross guarantee which has been
lodged with and approved by the Australian Securities and Investments Commission as discussed in Note 33.

106 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 107

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 109 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 25. Commitments


Consolidated
2014
2015
$000
$000

Capital commitments
Signicant capital expenditure contracted for at the reporting date but not recognised
as liabilities is as follows:
Intangible assets technology and software

2,590

1,099

Property, plant and equipment

1,520

Within one year

20,988

16,054

Later than one year but not later than ve years

62,406

48,446

Later than ve years

23,531

15,855

106,925

80,355

7,122

8,272

Lease commitments
Non-cancellable operating leases
The Group leases various ofces and plant and equipment under non-cancellable
operating leases.
Commitments for minimum lease payments in relation to non-cancellable operating
leases are payable as follows:

Commitments not recognised in the nancial statements


Sub-lease payments
Future minimum lease payments expected to be received in relation to
non-cancellable sub-leases of operating leases

Aristocrat Leisure Limited Annual Report 2015 107

Exhibit F, pg. 108

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 110 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 26. Subsidiaries


Equity holding
Notes

Country of
incorporation

2015
%

2014
%

Ultimate parent entity


Aristocrat Leisure Limited

Australia

Controlled entities
Aristocrat Technical Services Pty Ltd

Australia

100

100

Aristocrat Properties Pty Ltd

Australia

100

100

Aristocrat (Holdings) Pty Ltd

Australia

100

100

Australia

100

100

Aristocrat Technologies Australia Pty Ltd


ASSPA Pty Ltd

Australia

100

100

Aristocrat Technology Gaming Systems Pty Limited

Australia

100

100

System 7000 Pty Ltd

Australia

100

Aristocrat International Pty Ltd


Aristocrat Leisure Cyprus Limited
Aristocrat Gaming LLC

Australia

100

100

Cyprus

100

100

Russia

100

100

Aristocrat (Argentina) Pty Limited

Australia

100

100

AI (Puerto Rico) Pty Limited

Australia

100

100

Aristocrat (Latin America) Pty Ltd

Australia

100

100

Aristocrat Technologies Mexico, S.A. DE C.V.

Mexico

100

100

Aristocrat Service Mexico, S.A. DE C.V.

Mexico

100

100

Aristocrat Hanbai KK

Japan

100

100

Aristocrat (Asia) Pty Limited

Australia

100

100

Aristocrat (Macau) Pty Limited

Australia

100

100

Aristocrat (Philippines) Pty Limited

Australia

100

100

Aristocrat (Singapore) Pty Limited

Australia

100

100

Aristocrat (Cambodia) Pty Limited

Australia

100

100

Aristocrat (Malaysia) Pty Limited

Australia

100

100

Aristocrat Leisure Technology Development (Beijing) Co. Ltd

China

100

100

UK

100

100

UK

100

100

Aristocrat Technologies Europe (Holdings) Limited


ASSPA (UK) Limited
Aristocrat Technologies LLC

Russia

100

100

Product Madness (UK) Limited

UK

100

100

Aristocrat Technologies Europe Limited

UK

100

100

UK

100

100

Aristocrat Technologies NZ Limited

Aristocrat Technologies Spain S.L.

New Zealand

100

100

Aristocrat Technologies, Inc.

USA

100

100

Aristocrat Funding Corporation Pty Ltd

Australia

100

100

Aristocrat Technologies Canada, Inc.

Canada

100

100

Product Madness Inc.

USA

100

100

USA

100

Red Ball Gaming, S. de R.L. de C.V.

USA

100

Servicios Tcnicos a Mquinas de Juego, S. de R.L. de C.V.

USA

100

Video Gaming Technologies, Inc.

35

108 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 109

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 111 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 26. Subsidiaries continued


Equity holding
Notes

VGT Manufacturing, Inc.

Country of
incorporation

USA

2015
%

2014
%

100

VGT LLC

USA

100

VGT-Oklahoma LLC

USA

100

OKM LLC (Tennessee)

USA

100

Aristocrat C.A.

Venezuela

100

100

Aristocrat Research & Development (Africa) Pty Ltd

South Africa

100

100

30

South Africa

100

100

Aristocrat Africa (Pty) Ltd


Aristocrat Technologies Africa (Pty) Ltd
KK Aristocrat Technologies
KK Spiky

30

South Africa

100

100

36

Japan

100

36

Japan

100

Aristocrat Technologies India Private Ltd

India

100

100

Aristocrat Technologies Hong Kong Limited

Hong Kong

100

100

Australia

100

100

Other controlled entities


Aristocrat Employee Equity Plan Trust

Aristocrat Leisure Limited Annual Report 2015 109

Exhibit F, pg. 110

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 112 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 27. Share-based payments


The Remuneration Report, presented in the Directors Report, also provides detailed disclosure on
share-based payments.
(a) Performance Share Plan (PSP)
The PSP is a long-term employee share scheme that provides for eligible employees to be offered conditional
entitlements to fully paid ordinary shares in the parent entity (Performance Share Rights). Performance Share
Rights issued under the PSP are identical in all respects other than performance conditions and periods, which are
detailed below.
As at 30 September 2015, 14 employees (2014: 13) were entitled to 4,156,763 (2014: 5,654,286) Performance
Share Rights under this plan.
Accounting fair value of Performance Share Rights granted
The assessed accounting fair values of Performance Share Rights granted during the nancial years ended 30
September 2015 and 30 September 2014 are as follows:
Performance
Share Right series

Performance
period start date

Performance
period expiry date

Performance
condition(1)

Accounting
valuation date

1 October 2014

30 September 2017

TSR

27 February 2015

Accounting
valuation(2)

Issued 2015
Series 28A

5.07

Series 28B

1 October 2014

30 September 2017

EPSG

27 February 2015

6.91

Series 28C

1 October 2014

30 September 2017

Service

27 February 2015

6.91

Series 29A

1 October 2014

30 September 2017

TSR

27 February 2015

5.07

Series 29B

1 October 2014

30 September 2017

EPSG

27 February 2015

6.91

Series 29C

1 October 2014

30 September 2017

Strategic

27 February 2015

6.91

Series 25A

1 October 2013

30 September 2016

TSR

20 February 2014

2.83

Series 25B

1 October 2013

30 September 2016

EPSG

20 February 2014

4.52

Series 26A

1 October 2013

30 September 2016

TSR

20 February 2014

2.83

Series 26B

1 October 2013

30 September 2016

EPSG

20 February 2014

4.52

Issued 2014

(1)

TSR Total Shareholder Return; EPSG Earnings Per Share Growth.

(2)

In accordance with accounting standards, the accounting valuation, as independently determined by Ernst & Young (EY), of a Performance
Share Right with a market vesting condition (for example, TSR), incorporates the likelihood that the vesting condition will be met. Whereas,
the accounting valuation, as independently determined by EY, of a Performance Share Right with a non-market vesting condition (for
example, EPSG), does not take into account the likelihood that the vesting condition will be met. Accordingly, the accounting value of a
Performance Share Right with a TSR vesting condition is lower than that with an EPSG vesting condition.

The accounting valuation represents the independent valuation of each tranche of Performance Share Rights at
their respective grant dates. The valuations have been performed by Ernst & Young (EY) using Total Shareholder
Return (TSR), Earnings Per Share Growth (EPSG), service condition and strategic objective condition models.
(i) Total Shareholder Return (TSR) model
EY has developed a Monte-Carlo Simulation-based model which incorporates the impact of performance hurdles
and the vesting scale on the value of the share rights. This pricing model takes into account such factors as the
Companys share price at the date of grant, volatility of the underlying share price, expected dividend yield, risk free
rate of return and time to maturity.
(ii) Earnings Per Share Growth (EPSG) model, service condition and strategic objective condition
EY has utilised a Binomial Tree model to determine the fair value of share rights. This pricing model takes into
account such factors as the Companys share price at the date of grant, volatility of the underlying share price,
expected dividend yield, risk-free rate of return and time to maturity.
The accounting valuation of the rights has been allocated equally over the vesting period.

110 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 111

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 113 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 27. Share-based payments continued


(a) Performance Share Plan (PSP) continued
The model inputs for share rights granted during the year ended 30 September 2015 and year ended
30 September 2014 included:
(a) share rights are granted for no consideration and have a three year life;
(b) exercise price: zero consideration;
(c) the grant date and expiry dates: refer to tables below:
(d) share price at grant date:
2015: $7.44
2014: $4.91
(e) price volatility of the Companys shares:
2015: 30%
2014: 30%
(f) dividend yield:
2015: 2.7%
2014: 3.2%
(g) risk-free interest rate:
2015: 1.77%
2014: 2.87%
The expected price volatility is based on the two year historical volatility of the share price of the Company due to
the long-term nature of the underlying share rights.
Performance Share Rights are detailed in the tables below:
Consolidated 2015
Add:
new
rights
issues
Number

Less:
rights
vested
Number

Less:
rights
lapsed
Number

Rights
at end
of year
Number

Grant
date

Performance
period expiry date

Rights
at start
of year
Number

Series 20A

2 May 2012

31 December 2014

405,000

405,000

Series 20B

2 May 2012

31 December 2014

945,000

770,175

174,825

Series 21A

1 January 2012

31 December 2014

337,111

337,111

Series 21B

1 January 2012

31 December 2014

786,597

641,076

145,521

Right
series

PSP

Series 22A

20 February 2013 30 September 2015

229,850

229,850

Series 22B

20 February 2013 30 September 2015

536,150

536,150

Series 23A

1 October 2012

30 September 2015

319,646

4,230

315,416

Series 23B

1 October 2012

30 September 2015

745,005

9,900

735,105

Series 25A

20 February 2014 30 September 2016

130,500

130,500

Series 25B

20 February 2014 30 September 2016

304,500

304,500

Series 26A

1 October 2013

30 September 2016

274,478

26,125

248,353

Series 26B

1 October 2013

30 September 2016

640,449

60,957

579,492

Series 28A

1 October 2014

30 September 2017

236,778

31,303

205,475

Series 28B

1 October 2014

30 September 2017

236,778

31,302

205,476

Series 28C 1 October 2014

30 September 2017

315,446

58,556

256,890

Series 29A

27 February 2015 30 September 2017

122,867

122,867

Series 29B

27 February 2015 30 September 2017

122,867

122,867

Series 29C 27 February 2015 30 September 2017

163,822

163,822

5,654,286 1,198,558 2,153,362

542,719 4,156,763

Aristocrat Leisure Limited Annual Report 2015 111

Exhibit F, pg. 112

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 114 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 27. Share-based payments continued


Consolidated 2014
Add:
new
rights
issues
Number

Less:
rights
vested
Number

Grant
date

Performance
period expiry date

Rights
at start
of year
Number

Series 18A

3 May 2011

31 December 2013

306,000

306,000

Series 18B

3 May 2011

31 December 2013

714,000

714,000

Right
series

Less:
rights
lapsed
Number

Rights
at end
of year
Number

PSP

Series 19A

1 January 2011

31 December 2013

210,234

210,234

Series 19B

1 January 2011

31 December 2013

490,547

490,547

Series 20A

2 May 2012

31 December 2014

405,000

405,000

Series 20B

2 May 2012

31 December 2014

945,000

945,000

Series 21A

1 January 2012

31 December 2014

350,471

13,360

337,111

Series 21B

1 January 2012

31 December 2014

817,771

31,174

786,597

Series 22A

20 February 2013 30 September 2015

229,850

229,850

Series 22B

20 February 2013 30 September 2015

536,150

536,150

Series 23A

1 October 2012

30 September 2015

356,300

36,654

319,646

Series 23B

1 October 2012

30 September 2015

829,700

84,695

745,005

Series 25A

20 February 2014 30 September 2016

130,500

130,500

Series 25B

20 February 2014 30 September 2016

304,500

304,500

Series 26A

1 October 2013

30 September 2016

274,478

274,478

Series 26B

1 October 2013

30 September 2016

640,449

640,449

6,191,023 1,349,927

516,234 1,370,430 5,654,286

(b) General Employee Share Plan


The General Employee Share Plan (GESP) is designed to provide employees with shares in the parent entity under
the provisions of Division 83A of the Australian Income Tax Assessment Act.
(c) Deferred equity employee plan
Certain eligible employees are offered incentives of being granted share rights that are based on individual and
Company performance, subject to continued employment. Should the performance criteria be met an amount of
share rights are granted. As a result of the meeting of performance criteria in the 2013 and 2014 nancial years,
361,903 performance shares rights are outstanding as at 30 September 2015. These rights are subject to the
respective employees remaining with the Group until October 2015 and October 2016.
(d) Deferred short term incentive plan
Upon the vesting of short term incentives, Executive Leadership Team members receive the incentives as 50%
cash, with 50% deferred as performance share rights. These share rights are expensed over the vesting periods,
being two and three years. The number of rights outstanding at 30 September 2015 was 622,649.

112 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 113

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 115 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 27. Share-based payments continued


(e) Share-based payments expense
Total expenses arising from share-based payment transactions recognised during the year as part of employee
benets expense were as follows:
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
$000

Performance Share Plan

5,547

General Employee Share Plan

3,127

541

90

4,164

703

Deferred Equity Employee Plan

1,158

2,459

Other grants

4,883

2,127

16,293

8,506

Deferred Short Term Incentive Plan

Note 28. Key management personnel disclosures


Key management personnel compensation
Key management personnel includes all Non-Executive Directors, Executive Directors and Senior Executives who
were responsible for the overall planning, directing and controlling of activities of the Group.
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$
$

Short-term employee benets


Post-employment benets
Long-term benets
Termination benets
Share-based payments

7,274,304

7,333,413

149,291

164,381

41,077

75,672

614,493

4,877,547

2,907,774

12,342,219

11,095,733

Detailed remuneration disclosures are provided in the Remuneration Report.

Aristocrat Leisure Limited Annual Report 2015 113

Exhibit F, pg. 114

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 116 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 29. Remuneration of auditors


During the year, the following fees were paid to the auditor of the parent entity and its related practices:
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$
$

Assurance services
Audit services
Fees paid to PricewaterhouseCoopers Australian rm:
Audit and review of nancial reports and other audit work under the
Corporations Act 2001

632,262

516,080

Fees paid to related practices of PricewaterhouseCoopers Australian rm

1,233,541

894,280

Total remuneration for audit services

1,865,803

1,410,360

Other assurance services


Fees paid to PricewaterhouseCoopers Australian rm

72,311

Fees paid to related practices of PricewaterhouseCoopers Australian rm

89,370

87,241

161,681

87,241

2,027,484

1,497,601

6,500

343,581

Fees paid to related practices of PricewaterhouseCoopers Australian rm

132,084

403,010

Total remuneration for advisory services

138,584

746,591

Total remuneration for other assurance services


Total remuneration for assurance services

Advisory services
Fees paid to PricewaterhouseCoopers Australian rm

It is the Groups policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit
duties where PricewaterhouseCooperss expertise and experience with the Group are important. These
assignments are principally tax advice and due diligence on acquisitions, or where PricewaterhouseCoopers is
awarded assignments on a competitive basis. It is the Groups policy to seek competitive tenders for all major
consulting projects.

114 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 115

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 117 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 30. Related parties


(a) Other transactions with key management personnel
Refer to Note 28 for disclosures relating to key management personnel.
(b) Transactions with non-controlling interest
On 26 August 2013, the Group signed a contract to acquire 28% of the ordinary shares and the sole preference
share of Aristocrat Africa (Pty) Limited. This resulted in Aristocrat Africa (Pty) Limited becoming 100% owned by
the Group in April 2014 following satisfaction of the conditions to close. Details of the transactions with the noncontrolling interest that were recognised in a reserve in the prior period are shown below:
Consolidated
2015
2014
$000
$000

Carrying amount of non-controlling interests at start of year

(4,015)

Consideration paid to non-controlling interests

(3,016)

Foreign currency exchange movements

(19)

Excess of consideration paid recognised in the transactions with non-controlling


interests reserve within equity

(7,050)

(c) Subsidiaries
Interests in subsidiaries are set out in Note 26.

Aristocrat Leisure Limited Annual Report 2015 115

Exhibit F, pg. 116

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 118 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 31. Earnings per share


Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
Cents
Cents

Basic earnings per share


From continuing operations attributable to the ordinary equity holders
of the Company
From discontinued operation
Total basic earnings per share attributable to the ordinary equity holders
of the Company

24.8

20.6

4.7

(23.5)

29.5

(2.9)

24.6

20.5

4.7

(23.4)

29.3

(2.9)

2015
Number

2014
Number

Diluted earnings per share


From continuing operations attributable to the ordinary equity holders
of the Company
From discontinued operation
Total diluted earnings per share attributable to the ordinary equity holders
of the Company

Weighted average number of ordinary shares used as the denominator in


calculating basic earnings per share
Effect of Performance Share Rights
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share

632,332,667 566,801,580
3,564,364

3,741,521

635,897,031

570,543,101

2015
$000

2014
$000

156,656

116,978

29,774

(133,407)

186,430

(16,429)

Reconciliation of earnings used in calculating basic and diluted earnings


per share
Net prot/(loss) attributable to members of Aristocrat Leisure Limited
From continuing operations
From discontinued operation
Earnings used in calculating basic and diluted earnings per share

Information concerning the classication of securities


(a) Share-based payments
Rights granted to employees under share-based payments arrangements are considered to be potential ordinary
shares and have been included in the determination of diluted earnings per share. The rights have not been
included in the determination of basic earnings per share. Details relating to the rights are set out in Note 27.
Included within the weighted average number of potential ordinary shares related to Performance Share Rights are
949,762 (2014: 557,485) Performance Share Rights that had lapsed during the year.
(b) Share-based payments trust
Shares purchased on-market and issued shares through the Aristocrat Employee Equity Plan Trust have been
treated as shares bought back and cancelled for the purpose of the calculation of the weighted average number of
ordinary shares used as the denominator in calculating basic earnings per share. At the end of the reporting period,
there were 3,574,752 shares held in the share trust (2014: 441,810).

116 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 117

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 119 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 32. Reconciliation of prot/(loss) for the year after income tax to net cash ow from
operating activities
Consolidated
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
$000

Prot/(loss) for the year

186,430

Depreciation and amortisation

162,624

48,425

Impairment (reversal)/loss

(10,483)

72,560

Equity-settled share-based payments

16,293

8,506

Net loss/(gain) on sale and impairment of property, plant and equipment

(16,429)

2,344

(3)

27,322

3,785

(20,301)

43,367

8,834

Increase in receivables and deferred revenue

(96,718)

(10,788)

Decrease/(increase) in inventories

32,316

(10,147)

Decrease in other operating assets

Increase in payables

Increase in other provisions

1,335

765

Movement in tax balances

15,913

5,513

437,643

158,830

Net foreign currency exchange differences


(Gain)/loss on sale of subsidiaries
Non-cash borrowing costs amortisation
Change in operating assets and liabilities, net of effects of
acquisition/disposal of controlled entities:

Net cash inow from operating activities

331

2,196

111,403

11,080

Aristocrat Leisure Limited Annual Report 2015 117

Exhibit F, pg. 118

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 120 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 33. Deed of cross guarantee


Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998 (Class Order), the wholly owned
subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and
lodgement of a nancial report and Directors Report.
It is a condition of the Class Order that the Company and each of the participating subsidiaries enter into a Deed
of Cross Guarantee (Deed). The effect of the Deed, dated 22 December 2006, is that the Company guarantees to
each creditor payment in full of any debt in the event of winding up of any of the participating subsidiaries under
certain provisions of the Corporations Act. If a winding up occurs under other provisions of the Corporations
Act, the Company will only be liable in the event that after six months, any creditor has not been paid in full. The
subsidiaries have also given similar guarantees in the event the Company is wound up.
The subsidiaries subject to the deed are:
Aristocrat Technologies Australia Pty Limited
Aristocrat International Pty Limited
Aristocrat (Asia) Pty Limited
Aristocrat (Macau) Pty Limited
Aristocrat (Holdings) Pty Limited
The above named companies represent a Closed Group for the purposes of the Class Order, and as there are no
other parties to the deed that are controlled by the Company, they also represent the Extended Closed Group.
Set out below is a consolidated statement of comprehensive income of the Closed Group:
12 months to 12 months to
30 Sept 2015 30 Sept 2014
$000
$000

Revenue
Other income

451,383

306,835

3,046

8,175

Cost of revenue and other expenses

(184,525)

(138,138)

Employee benets expense

(146,967)

(117,623)
(11,532)

Finance costs

(22,595)

Depreciation and amortisation expense

(10,640)

(7,661)

Prot before income tax

89,702

40,056

(26,229)

(23,580)

63,473

16,476

Income tax expense


Prot for the year
Other comprehensive income
Changes in fair value of interest rate hedge

(1,674)

Other comprehensive income, net of tax

(1,674)

Total comprehensive income for the year

61,799

16,476

47,400

116,387

Set out below is a summary of movements in consolidated retained earnings of the


Closed Group:
Retained earnings at the beginning of the nancial year
Prot for the year
Dividends paid
Retained earnings at the end of the nancial year

63,473

16,476

(101,108)

(85,463)

9,765

47,400

118 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 119

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 121 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 33. Deed of cross guarantee continued


Set out below is a consolidated statement of nancial position of the Closed Group:
2015
$000

2014
$000

Cash and cash equivalents

166,856

215,622

Trade and other receivables

Current assets
123,755

114,895

Inventories

37,755

16,692

Tax assets

2,627

3,523

330,993

350,732

Total current assets


Non-current assets
Trade and other receivables
Investments

19,102

78,801

749,046

257,877

Property, plant and equipment

17,264

19,152

Deferred tax assets

52,694

66,864

Intangible assets

38,536

28,339

Total non-current assets


Total assets

876,642

451,033

1,207,635

801,765

122,939

77,432

Current liabilities
Trade and other payables
Borrowings
Provisions
Other liabilities
Total current liabilities

124

124

10,624

9,878

9,025

8,929

142,712

96,363

5,522

4,753

Non-current liabilities
Trade and other payables
Borrowings
Provisions
Other liabilities

407,408

155

6,010

4,845

6,959

5,491

Total non-current liabilities

425,899

15,244

Total liabilities

568,611

111,607

Net assets

639,024

690,158

693,833

641,603

(64,574)

1,155

Equity
Contributed equity
Reserves
Retained earnings
Total equity

9,765

47,400

639,024

690,158

Aristocrat Leisure Limited Annual Report 2015 119

Exhibit F, pg. 120

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 122 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 34. Parent entity nancial information


(a) Summary nancial information
The individual nancial statements for the parent entity show the following aggregate amounts:
2015
$000

2014
$000

Statement of nancial position


Current assets

3,426

3,616

661,071

554,221

Current liabilities

2,088

2,088

Total liabilities

2,088

2,088

693,833

641,603

Total assets

Shareholders equity
Contributed equity
Reserves
Accumulated losses

98,619

82,326

(133,469)

(171,796)

658,983

552,133

Prot for the year after tax

139,435

43,124

Total comprehensive income after tax

139,435

43,124

(b) Guarantees entered into by the parent entity


Cross guarantees given by the parent entity are set out in Note 33.
(c) Contingent liabilities of the parent entity
Contingent liabilities of the parent entity are set out in Note 24.

120 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 121

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 123 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 35. Business combinations


(a) Business combination during the year
On 20 October 2014 the Group acquired 100% of Video Gaming Technologies Inc (VGT). VGT is a leading
provider of Class II gaming machines for the leased tribal gaming market in North America. VGT has a
complementary product offering to Aristocrat, and has provided the opportunity to accelerate growth in the
recurring revenue market.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
2015
$000

Purchase consideration
Cash paid

1,491,908

Deferred consideration

52,656

Total purchase consideration

1,544,564

The assets and liabilities recognised as a result of the acquisition are as follows:
Fair value
$000

Cash

53,567

Receivables

28,151

Inventory
Property, plant and equipment

8,320
48,211

Intangible assets: Customer contracts and relationships

561,773

Intangible assets: Technology

112,036

Intangible assets: Trade name and game names


Other assets

23,478
3,761

Payables

(75,108)

Provisions

(4,445)

Net identiable assets acquired


Add: goodwill
Net assets acquired

759,744
784,820
1,544,564

The goodwill is attributable to key employees, tax benets and synergies from combining operations with Video
Gaming Technologies Inc. The goodwill is deductible for tax purposes.
(i) Acquisition related costs
Acquisition related costs of $17,568,000 are included in general and administration costs in the statement of
comprehensive income for the year and $18,360,000 in operating cash ows in the statement of cash ows.
(ii) Acquired receivables
The fair value of trade and other receivables on acquisition was $28,151,000, all of which were trade receivables.
The gross contractual amount for trade receivables due was $29,101,000. The fair value of the receivables have
been recovered from customers.
(iii) Revenue and prot contribution
The acquired business contributed revenues of $357,197,000 and a net prot of $27,951,000 to the Group for the
period from 20 October 2014 to 30 September 2015.
Had the acquisition occurred on 1 October 2014, the revenue and prot of the Group would not be materially
different to the amounts as included in the statement of comprehensive income.

Aristocrat Leisure Limited Annual Report 2015 121

Exhibit F, pg. 122

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 124 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 35. Business combinations continued


(iv) Purchase consideration cash outow
2015
$000

Outow of cash to acquire subsidiary


Less: Cash acquired
Add: Contingent consideration paid on Product Madness acquisition
Outow of cash investing activities

1,491,908
(53,567)
8,047
1,446,388

(b) Business combination subsequent to reporting date


In the prior period, the Group acquired assets and liabilities of complementary gaming products and systems
supplier Paltronics Inc. for a purchase consideration of $11,223,000. The identiable net assets acquired were
$6,901,000 with goodwill of $4,322,000 being recognised.
During the year, the acquisition accounting for Paltronics Inc. was completed, resulting in $8,264,000 being
transferred from goodwill to intellectual property and licences intangible assets. A purchase price adjustment of
$936,000 was received during the year.

122 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 123

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 125 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 36. Discontinued operations


(a) Discontinued operations during the year
(i) Description
On 29 May 2015, the Group sold the subsidiaries K.K Aristocrat Technologies and K.K Spiky. The results from
these entities are shown in the statement of comprehensive income as a discontinued operation. Financial
information relating to the discontinued operation is set out below.
(ii) Financial performance

Consolidated
2015
2014
$000
$000

Revenue

29,934

Other income

13,889

434

84

Impairment reversal/(loss)

13,016

(72,560)

Expenses

(33,911)

(25,572)

9,473

(84,159)

Prot/(loss) before income tax


Income tax expense
Prot/(loss) after income tax of discontinued operation

(3,730)

9,473

(87,889)

Gain on sale after income tax and reclassication of foreign currency


translation reserve (see iv) below

18,589

Prot/(loss) from discontinued operation

28,062

(87,889)

Net cash inow from operating activities

9,223

12,223

Net cash outow from investing activities

(9,820)

(6,530)

Net cash outow from nancing activities

(88)

(15,923)

(685)

(10,230)

(iii) Cash ow information

Net cash decrease generated by the discontinued operation


The cash outow from investing activities includes the payments on disposal of the
entities and assets less the cash disposed.
(iv) Details of the sale
Net consideration paid cash
Carrying amount of net liabilities sold
Costs of disposal
Gain on sale before income tax and reclassication
of foreign currency translation reserve
Reclassication of foreign currency translation reserve to prot and loss
Income tax expense
Gain on disposal after income tax

(72)

26,317

(486)

25,759

(7,170)

18,589

The carrying amounts of assets and liabilities as at the date of sale were:
29 May 2015
$000

Cash and cash equivalents

8,082

Trade and other receivables

8,403

Current tax assets

133

Total assets

16,618

Trade and other payables

16,021

Provisions

26,914

Total liabilities

42,935

Net liabilities

(26,317)

Aristocrat Leisure Limited Annual Report 2015 123

Exhibit F, pg. 124

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 126 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 36. Discontinued operations continued


(b) Discontinued operations in the prior reporting period
(i) Description
In the prior year, the Group sold Aristocrat Lotteries AB and Aristocrat Lotteries Italia S.r.L, together with related
intellectual property assets. The results from these entities are shown in the statement of comprehensive income
as a discontinued operation. The result for the current period primarily represents a purchase price adjustment
following the sale in the prior year. Financial information relating to the discontinued operation is set out below.
(ii) Financial performance

Revenue
Other income
Expenses
Prot/(loss) before income tax
Income tax benet
Prot/(loss) after income tax of discontinued operation
Gain on sale after income tax and reclassication of foreign currency
translation reserve (see iv) below

Consolidated
2015
2014
$000
$000

17,329

1,757

104

(45)

(20,340)

1,712

(2,907)

756

1,712

(2,151)

(43,367)

1,712

(45,518)

(225)

Net cash inow from investing activities

1,712

13,267

Net cash increase generated by the discontinued operation

1,712

13,042

Prot/(loss) from discontinued operation


(iii) Cash ow information
Net cash outow from operating activities

The cash inow from investing activities includes the proceeds on disposal of the
entities and assets.
(iv) Details of the sale
Consideration received cash
Carrying amount of net assets sold
Costs of disposal
Gain/(loss) on sale before income tax and reclassication of foreign currency
translation reserve

1,757

13,772

(46,568)

(45)

(272)

1,712

(33,068)

Reclassication of foreign currency translation reserve

(10,299)

Income tax

1,712

(43,367)

Gain/(loss) on disposal after income tax


The carrying amounts of assets and liabilities as at the date of sale were:

29 Sept 2014
$000

Cash and cash equivalents


Trade and other receivables
Inventory
Plant and equipment

230
9,287
524
92

Intangible assets

40,102

Total assets

50,235

Trade and other payables


Provisions
Total liabilities
Net liabilities

2,760
907
3,667
46,568

124 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 125

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 127 of 136

Notes to the Financial Statements


for the year ended 30 September 2015

Note 36. Discontinued operations continued


(c) Reconciliation to consolidated statement of comprehensive income continued

Prot/(loss) from operation discontinued during the year


Prot/(loss) from operation discontinued in the prior reporting period
Prot/(loss) from discontinued operations

2015
$000

2014
$000

28,062

(87,889)

1,712

(45,518)

29,774

(133,407)

Note 37. Disposal group classied as held for sale


In August 2015, the Group decided to sell the subsidiary Aristocrat Technologies Africa (Pty) Ltd to align the Groups
strategic objectives to achieve Broad Based Black Economic Empowerment specications. The sale is expected to
be completed before the end of September 2016. Following the sale, Aristocrat will sell into South Africa using
a distributor.
The following assets and liabilities were reclassied as held for sale in relation to the disposal group as at
30 September 2015:
2015
$000

Current assets held for sale


Cash and cash equivalents

3,694

Trade and other receivables

9,157

Inventories

1,764

Non-current assets held for sale


Trade and other receivables

26

Property, plant and equipment

49

Deferred tax assets

151

Intangible assets

468

Total assets of disposal group held for sale

15,309

Current liabilities directly associated with assets classied as held for sale
Trade and other payables
Current tax liabilities

1,232
(517)

Provisions

193

Total liabilities of disposal group held for sale

908

Aristocrat Leisure Limited Annual Report 2015 125

Exhibit F, pg. 126

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 128 of 136

Directors declaration
for the year ended 30 September 2015
In the Directors opinion:
(a) the nancial statements and notes set out on pages 59 to 126 are in accordance with the Corporations Act
2001 including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements;
(ii) giving a true and fair view of the consolidated entitys nancial position as at 30 September 2015 and of its
performance for the nancial year ended on that date; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the Extended
Closed Group identied in Note 33 will be able to meet any obligations or liabilities to which they are, or may
become, subject by virtue of the deed of cross guarantee described in Note 33.
Note 1(a) conrms that the nancial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given declarations by the Chief Executive Ofcer and Managing Director and Chief
Financial Ofcer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.

Dr ID Blackburne
Chairman
Sydney
25 November 2015

126 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 127

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 129 of 136

Independent Auditors Report

Aristocrat Leisure Limited Annual Report 2015 127

Exhibit F, pg. 128

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 130 of 136

Independent Auditors Report

128 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 129

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 131 of 136

Shareholder Information
Distribution of equity securities as at 24 November 2015

Size of holding

Holders of
Performance
Share Rights1 Shareholders

Number of
shares2

% of
issued
capital

0.420

6,294

2,674,985

1,001-5,000

10

4,573

10,841,560

1.702

5,001-10,000

19

887

6,271,553

0.984

10,001-100,000

19

572

12,265,581

1.925

100,001-over

14

86

605,065,953

94.969

Total

62

12,412

637,119,632

100.000

858

10,701

0.002

1-1,000

Less than a marketable parcel of $500.00


1.

All share rights are allocated under the Companys incentive programs to take up ordinary shares in the capital of the Company. These share
rights are subject to the rules of the relevant program and are unquoted and non-transferable.

2.

Fully paid ordinary shares (excludes unvested performance share rights that have not been converted into shares).

Substantial shareholders as at 24 November 2015


As at 24 November 2015, the following shareholders were registered by the Company as a substantial shareholder,
having notied the Company of a relevant interest in accordance with Section 671B of the Corporations Act 2001
(Cth), in the voting shares below:

Name of shareholder

Number of
ordinary
shares held

% of
issued
capital

Date of
notice

Commonwealth Bank of Australia

83,290,953

13.14%

01/06/2015

Aristocrat Leisure Limited Annual Report 2015 129

Exhibit F, pg. 130

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 132 of 136

Shareholder Information

Twenty largest ordinary shareholders as at 24 November 2015

Name of shareholder

Number of
ordinary
shares held

% of
issued
capital

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

127,474,127

20.0079%

CITICORP NOMINEES PTY LIMITED

107,427,949

16.8615%

92,647,168

14.5416%

NATIONAL NOMINEES LIMITED


JP MORGAN NOMINEES AUSTRALIA LIMITED

77,415,211

12.1508%

WRITEMAN PTY LIMITED

33,448,107

5.2499%

BNP PARIBAS NOMINEES PTY LTD

29,549,338

4.6380%

THUNDERBIRDS ARE GO PTY LTD

24,177,754

3.7949%

20,366,368

3.1966%

SERIOSO PTY LIMITED


UBS NOMINEES PTY LTD

13,983,115

2.1947%

BNP PARIBAS NOMINEES PTY LTD

13,421,889

2.1067%

MAAKU PTY LIMITED

12,131,440

1.9041%

10,655,500

1.6724%

ARMINELLA PTY LIMITED


RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD

8,902,422

1.3973%

ECA1 PTY LIMITED

8,667,713

1.3605%

AMP LIFE LIMITED

5,396,260

0.8470%

SHARE DIRECT NOMINEES PTY LTD

3,143,897

0.4935%

BOND STREET CUSTODIANS LIMITED

2,495,950

0.3918%

ARGO INVESTMENTS LIMITED

2,485,130

0.3901%

AUSTRALIAN EXECUTOR TRUSTEES LIMITED

2,246,787

0.3526%

UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD

1,526,350

0.2396%

Voting Rights
At meetings of shareholders, each shareholder may vote in person or by proxy, attorney or (if the shareholder is
a body corporate) corporate representative. On a show of hands, every person present who is a shareholder or
a representative of a shareholder has one vote and on a poll every shareholder present in person or by proxy or
attorney has one vote for each fully paid ordinary share. Performance share right holders have no voting rights.
Regulatory Considerations affecting Shareholders
Aristocrat Leisure Limited and its subsidiaries could be subject to disciplinary action by gaming authorities in some
jurisdictions if, after receiving notice that a person is unsuitable to be a shareholder, that person continues to be a
shareholder. Because of the importance of licensing to the Company and its subsidiaries, the Constitution contains
provisions that may require shareholders to provide information and also gives the Company powers to divest or
require divestiture of shares, suspend voting rights and withhold payments of certain amounts to shareholders or
other persons who may be unsuitable.
Shareholder enquiries
You can access information about Aristocrat Leisure Limited and your holdings via the internet. Aristocrats website,
www.aristocratgaming.com, has the latest information on Company announcements, presentations and reports.
Shareholders may also communicate with the Company via its website. In addition, there is a link to the Australian
Securities Exchange to provide current share prices. The share registry manages all your shareholding details.
Visit www.boardroomlimited.com.au and access a wide variety of holding information, make changes to your
holding record and download forms. You can access this information via a security login using your Securityholder
Reference Number (SRN) or Holder Identication Number (HIN).

130 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 131

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 133 of 136

Shareholder Information

Dividends
Electronic Funds Transfer
In 2007, the Company introduced a mandatory direct payment of dividends program for shareholders resident
in Australia who were requested to complete and submit a Direct Credit of Dividends Form (available from the
Companys website) and return it to the Companys share registrar. Shareholders who have not completed and
returned this form will receive a notice from the Companys share registrar advising that:
(i) the relevant dividend amount is being held as direct credit instructions have not been received;
(ii) the relevant dividend will be credited to the nominated bank account as soon as possible on receipt of direct
credit instructions; and
(iii) no interest is payable on the dividend being withheld.
Such notices are sent to shareholders who have not completed and submitted a Direct Credit of Dividends Form
on the record date of the relevant dividend.
Dividend Cheques
Dividend cheques (shareholders resident outside Australia) should be banked as soon as conveniently possible.
Dividend Reinvestment Plan
The Directors consider whether the Companys Dividend Reinvestment Plan (DRP) should operate each time a
dividend is declared.
The DRP Rules and the Dividend Reinvestment Plan Application or Variation Form are available from the
Companys share registrar, Boardroom Limited, on +61 2 9290 9682 or email enquiries@boardroomlimited.com.au.
Shareholders should note that: (i) Shareholders who elect to participate in the DRP and who do not revoke
their elections will automatically participate on the next occasion the DRP is activated; (ii) the fact that the DRP
operated in respect of any dividend does not necessarily mean that the DRP will operate in respect of any further
dividends (a separate decision is made for each dividend); and (iii) when the DRP does operate, the DRP rules
provide that the number of shares that DRP participants will receive will not be determinable on the Record Date
determined by the Board.

Aristocrat Leisure Limited Annual Report 2015 131

Exhibit F, pg. 132

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 134 of 136

This page has intentionally been left blank.

132 Aristocrat Leisure Limited Annual Report 2015

Exhibit F, pg. 133

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 135 of 136

Corporate
Directory
Directors
ID Blackburne
Non-Executive Chairman
JR Odell
Chief Executive Ofcer
and Managing Director
DCP Banks
Non-Executive Director
KM Conlon
Non-Executive Director
RA Davis
Non-Executive Director
RV Dubs
Non-Executive Director
SW Morro
Non-Executive Director
Company Secretary
A Korsanos
Global Headquarters
Aristocrat Leisure Limited
Building A, Pinnacle Ofce Park
85 Epping Road
North Ryde NSW 2113
Australia
Telephone: + 61 2 9013 6300
Facsimile: + 61 2 9013 6200
Internet Site
www.aristocratgaming.com
Australia
Building A, Pinnacle Ofce Park
85 Epping Road
North Ryde NSW 2113
Australia
Telephone: + 61 2 9013 6300
Facsimile: + 61 2 9013 6200

The Americas

New Zealand
Aristocrat Technologies NZ Limited
Unit E, 7 Echelon Place
East Tamaki
Auckland 2013, New Zealand
Telephone: + 649 259 2000
Facsimile: + 649 259 2001

North America
Aristocrat Technologies Inc.
7230 Amigo Street
Las Vegas
Nevada 89119
USA
Telephone: + 1 702 270 1000
Facsimile: + 1 702 270 1001
Video Gaming Technologies, Inc.
308 Mallory Station Road
Franklin
TN 37067
USA
Telephone: + 1 615 372 1000
Facsimile: + 1 615 372 1099
South America
Aristocrat (Argentina) Pty Limited
San Vladimiro 3056
1 Piso Of. 7
San Isidro
Buenos Aires CP 1642
Argentina, South America
Telephone: + 5411 4708 5400
Facsimile: + 5411 4708 5454
Asia
Macau
Aristocrat (Macau) Pty Limited
17th Floor, Hotline Centre
335-341 Alameda Drive
Carlos d Assumpcao
Macau
Telephone: + 853 2872 2777
Fax: + 853 2872 2783
Singapore
Aristocrat Technologies
61 Kaki Bukit Avenue 1
Shun Li Industrial Park #04-29
Singapore 417943
Telephone: + 656 444 5666
Facsimile: + 656 842 4533

South Africa
Aristocrat Technologies Africa (Pty)
Limited
70 Saturn Crescent, Cnr. Milk Way
Linbro Business Park
Frankenwald Extension 31
South Africa 2090
Telephone: + 27 11 997 4200
Facsimile: + 27 11 608 0030
Investor Contacts
Share Registry
Boardroom Limited
Level 7, 207 Kent Street
Sydney NSW 2000 Australia
Telephone: + 61 2 9290 9682
Fax: + 61 2 9279 0664
Email:
enquiries@boardroomlimited.com.au
Website:
www.boardroomlimited.com.au
Auditor
PricewaterhouseCoopers
201 Sussex Street
Sydney NSW 1171 Australia
Stock Exchange Listing
Aristocrat Leisure Limited
Ordinary shares are listed on the
Australian Securities Exchange
CODE: ALL
Investor Email Address
Investors may send email queries to:
investor.relations@ali.com.au

Europe
Great Britain
Aristocrat Technologies Europe
Limited
25 Riverside Way
Uxbridge
Middlesex UB8 2YF U.K.
Telephone: + 44 1895 618 500
Facsimile: + 44 1895 618 501

Aristocrat Leisure Limited Annual Report 2015 133

Exhibit F, pg. 134

Case 2:16-cv-02359 Document 1-10 Filed 10/10/16 Page 136 of 136

aristocrat.com.au

Aristocrat Leisure Limited


Building A, Pinnacle Ofce Park
85 Epping Road
North Ryde NSW 2113
P.O. Box 361
North Ryde BC NSW 1670
AUSTRALIA
Tel
Fax

+61 2 9013 6000


+61 2 9013 6200

ABN 44 002 818 368

Exhibit F, pg. 135

Case 2:16-cv-02359 Document 1-11 Filed 10/10/16 Page 1 of 8

EXHIBIT G
Nevada Secretary of State report for Aristocrat
Technologies, Inc.

Case 2:16-cv-02359 Document 1-11 Filed 10/10/16 Page 2 of 8

ARISTOCRATTECHNOLOGIES,INC.
BusinessEntityInformation
Status: Active

FileDate: 10/18/1963

Type: DomesticCorporation
QualifyingState: NV
ManagedBy:

EntityNumber: C18841963
ListofOfficersDue: 10/31/2017
ExpirationDate:

NVBusinessID: NV19631001575

BusinessLicenseExp: 10/31/2017

AdditionalInformation
CentralIndexKey:

RegisteredAgentInformation
Name: INCORPSERVICES,INC.

Address1:

Address2:

3773HOWARDHUGHESPKWY
STE500S

City: LASVEGAS

State: NV

ZipCode: 891696014

Phone:

Fax:

MailingAddress1:

MailingAddress2:

MailingCity:

MailingState: NV

MailingZipCode:

AgentType: CommercialRegisteredAgentCorporation
Jurisdiction: NEVADA

Status: Active

FinancialInformation
NoParShareCount: 0

CapitalAmount: $5,950,000.00

ParShareCount: 50,000.00

ParShareValue: $1.00

ParShareCount: 5,900,000.00

ParShareValue: $1.00

Officers

IncludeInactiveOfficers

PresidentCONSTANCEJAMES
Address1: 7230AMIGOSTREET
City: LASVEGAS
ZipCode: 89119
Status: Active

Address2:
State: NV
Country: USA
Email:

SecretaryCONSTANCEJAMES
Address1: 7230AMIGOSTREET
City: LASVEGAS
ZipCode: 89119
Status: Active

Address2:
State: NV
Country: USA
Email:

TreasurerCONSTANCEJAMES

Exhibit G, pg. 1

2:16-cv-02359
Address1:Case
7230AMIGOSTREET

Document 1-11 Filed


10/10/16
Page 3 of 8
Address2:

City: LASVEGAS
ZipCode: 89119
Status: Active

State: NV
Country: USA
Email:

DirectorCONSTANCEJAMES
Address1: 7230AMIGOSTREET
City: LASVEGAS
ZipCode: 89119
Status: Active

Address2:
State: NV
Country: USA
Email:

DirectorMAUREENSWEENY
Address1: 7230AMIGOSTREET
City: LASVEGAS
ZipCode: 89119
Status: Active

Address2:
State: NV
Country: USA
Email:

Actions\Amendments
ActionType: ArticlesofIncorporation
DocumentNumber: C18841963001
FileDate: 10/18/1963

#ofPages: 4
EffectiveDate:

S.R.356
ActionType: Amendment
DocumentNumber: C18841963004
FileDate: 8/4/1965

#ofPages: 3
EffectiveDate:

AINSWORTHCONSOLIDATEDINDUSTRIES(NEVADA)INC.B001
ActionType: Amendment
DocumentNumber: C18841963005
FileDate: 6/24/1970

#ofPages: 4
EffectiveDate:

ARTICLEIIIPURPOSES
ActionType: RegisteredAgentChange
DocumentNumber: C18841963006
FileDate: 3/19/1974

#ofPages: 1
EffectiveDate:

LEEEWALKER
319SO3RDSTLASVEGASNV
ActionType: RegisteredAgentAddressChange
DocumentNumber: C18841963007
FileDate: 5/30/1978

#ofPages: 1
EffectiveDate:

JACKSTREETER
30COURTSTREETRENONV
ActionType: RegisteredAgentChange
DocumentNumber: C18841963008
FileDate: 5/28/1987
JACKSTREETERP.O.BOX12460

#ofPages: 1
EffectiveDate:

Exhibit G, pg. 2

Case 2:16-cv-02359
1885S.ARLINGTONAVERENONV89109

Document 1-11 Filed 10/10/16 Page 4 of 8

ActionType: Amendment
DocumentNumber: C18841963009
FileDate: 6/24/1993

#ofPages: 4
EffectiveDate:

CAPITALSTOCKWAS200,000@$1.00.TLN
BREAKDOWNOFSTOCK:500,000CLASSBCOMMONAND25,000COMMON.TLN
ActionType: RegisteredAgentChange
DocumentNumber: C18841963010
FileDate: 8/2/1993

#ofPages: 1
EffectiveDate:

JOYCEMORRISSEY
750ASOROCKBLVD.RENONV89502TD
ActionType: Amendment
DocumentNumber: C18841963011
FileDate: 5/31/1996

#ofPages: 3
EffectiveDate:

CAPITALSTOCKWAS525000@1.00=525000SDB
CERTIFICATEOFAMENDMENTFILEDAMENDINGARTICLEIV.BREAKDOWNOFSTOCK:25,000
(COMMON)@1.00,AND900,000(CLASSB)@1.00.(3)PGSSDB
ActionType: Amendment
DocumentNumber: C18841963012
FileDate: 11/27/1996

#ofPages: 5
EffectiveDate:

CERTIFICATEOFAMENDMENTAMENDINGARTICLE4(5PAGES)RAJ
ActionType: RegisteredAgentResignation
DocumentNumber: C18841963013
FileDate: 2/13/1997

#ofPages: 1
EffectiveDate:

PAULA.BIBLE
232COURTST.RENONV89501JAH
ActionType: RegisteredAgentChange
DocumentNumber: C18841963014
FileDate: 2/28/1997

#ofPages: 1
EffectiveDate:

PAULA.BIBLE
232COURTST.RENONV89501JAH
ActionType: Amendment
DocumentNumber: C18841963015
FileDate: 7/14/1997

#ofPages: 3
EffectiveDate:

CAPITALSTOCKWAS925,000AT$1.00=$925,000.KRD
(3)PGS.KRD
ActionType: AnnualList
DocumentNumber: C18841963027
FileDate: 12/11/1998

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: C18841963028

#ofPages: 1

Exhibit G, pg. 3

Case 4/25/2000
2:16-cv-02359
FileDate:

Document 1-11 Filed


10/10/16 Page 5 of 8
EffectiveDate:

(Nonotesforthisaction)
ActionType: Amendment
DocumentNumber: C18841963016
FileDate: 5/3/2000

#ofPages: 2
EffectiveDate:

(2)PGS.DMF
ARISTOCRAT,INC.DMFB00002
ActionType: RegisteredAgentResignation
DocumentNumber: C18841963017
FileDate: 5/19/2000

#ofPages: 1
EffectiveDate:

BARTHF.AARON,ESQARISTOCRAT,INC.
750AS.ROCKBLVDRENONV89502MXL
ActionType: RegisteredAgentChange
DocumentNumber: C18841963018
FileDate: 6/7/2000

#ofPages: 2
EffectiveDate:

BARTHF.AARON,ESQARISTOCRAT,INC.
750AS.ROCKBLVDRENONV89502LMB
ActionType: AnnualList
DocumentNumber: C18841963026
FileDate: 11/2/2000

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: RegisteredAgentChange
DocumentNumber: C18841963019
FileDate: 10/31/2001

#ofPages: 3
EffectiveDate:

SCHRECKMORRISSUITE1200
300SOUTHFOURTHSTREETLASVEGASNV89101RAF
ActionType: Merger
DocumentNumber: C18841963020
FileDate: 12/26/2001

#ofPages: 2
EffectiveDate:

ARTICLESOFMERGERFILEDMERGINGARISTOCRATLEISUREINDUSTRIES,INC.,A(NV)
CORP.,#C117091991INTOTHISCORPORATION.(2)PGS.JEP
ActionType: Amendment
DocumentNumber: C18841963021
FileDate: 7/10/2002

#ofPages: 6
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CAPITALSTOCKWAS1,125,000@1.00RAF
CERTIFICATEOFAMENDED&RESTATEDARTICLESFILED,AMENDINGSHARES&ARTICLEIII
1PG.$225RAF
ActionType: RegisteredAgentChange
DocumentNumber: C18841963022
FileDate: 10/30/2002

#ofPages: 1
EffectiveDate:

SCHRECKBRIGNONEGODFREYSUITE1200
300SOUTHFOURTHSTREETLASVEGASNV89101NEH

Exhibit G, pg. 4

Case AnnualList
2:16-cv-02359
ActionType:

Document 1-11 Filed 10/10/16 Page 6 of 8

DocumentNumber: C18841963024
FileDate: 11/7/2002

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: C18841963025
FileDate: 11/19/2002

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: C18841963029
FileDate: 7/18/2003

#ofPages: 1
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(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: C18841963023
FileDate: 9/23/2003

#ofPages: 2
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(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: C18841963002
FileDate: 9/23/2004

#ofPages: 1
EffectiveDate:

ListofOfficersfor2004to2005
ActionType: AnnualList
DocumentNumber: 2005030564681
FileDate: 8/8/2005

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: RegisteredAgentChange
DocumentNumber: 2005053598885
FileDate: 11/4/2005

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2006060485021
FileDate: 9/20/2006

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: RegisteredAgentChange
DocumentNumber: 2006066957091
FileDate: 10/18/2006

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: AmendedList
DocumentNumber: 2007006928751
FileDate: 1/31/2007

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2007056109353

#ofPages: 1

Exhibit G, pg. 5

Case 8/15/2007
2:16-cv-02359
FileDate:

Document 1-11 Filed


10/10/16 Page 7 of 8
EffectiveDate:

(Nonotesforthisaction)
ActionType: ResignationofOfficers
DocumentNumber: 2007075653085
FileDate: 10/31/2007

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2008066944392
FileDate: 10/9/2008

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AmendedList
DocumentNumber: 2009013685832
FileDate: 2/13/2009

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: Amendment
DocumentNumber: 2009070064199
FileDate: 9/24/2009

#ofPages: 6
EffectiveDate:

PreviousStockValue:ParValueShares:1,550,000Value:$1.00NoParValueShares:0
TotalAuthorizedCapital:$1,550,000.00NewStockValue:ParValueShares:50,000Value:$1.00ParValue
Shares:3,000,000Value:$1.00NoParValueShares:0TotalAuthorized
Capital:$3,050,000.00
ActionType: AnnualList
DocumentNumber: 2009076572452
FileDate: 10/29/2009

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2010084711448
FileDate: 11/10/2010

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2011062511352
FileDate: 8/26/2011

#ofPages: 1
EffectiveDate:

1112
ActionType: AnnualList
DocumentNumber: 2012054495315
FileDate: 8/6/2012

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2013058224673
FileDate: 9/3/2013

#ofPages: 1
EffectiveDate:

1314
ActionType: AmendedList

Exhibit G, pg. 6

Case 2013084183272
2:16-cv-02359
DocumentNumber:

Document 1-11 Filed #ofPages:


10/10/16 2Page 8 of 8

FileDate: 12/24/2013

EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2014059968771
FileDate: 8/20/2014

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: Amendment
DocumentNumber: 2014068299354
FileDate: 9/24/2014

#ofPages: 1
EffectiveDate:

PreviousStockValue:ParValueShares:50,000Value:$1.00ParValueShares:3,000,000Value:$1.00NoParValue
Shares:0TotalAuthorizedCapital:$3,050,000.00NewStockValue:Par
ValueShares:50,000Value:$1.00ParValueShares:5,900,000Value:$1.00NoParValueShares:0
TotalAuthorizedCapital:$5,950,000.00
ActionType: Correction
DocumentNumber: 2014070720235
FileDate: 10/8/2014

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: RegisteredAgentChange
DocumentNumber: 2015016647890
FileDate: 4/13/2015

#ofPages: 1
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2015041489842
FileDate: 9/18/2015

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)
ActionType: AnnualList
DocumentNumber: 2016041672180
FileDate: 9/21/2016

#ofPages: 2
EffectiveDate:

(Nonotesforthisaction)

Exhibit G, pg. 7

Case 2:16-cv-02359 Document 1-12 Filed 10/10/16 Page 1 of 3

EXHIBIT H
Press Release re 2016 Global Gaming Expo

Case 2:16-cv-02359
Document 1-12 Filed 10/10/16 Page 2 of 3
AristocratandVGTBringPowerfulInnovationstoG2E2016|VideoGamingTechnologies,Inc.

9/27/2016

VideoGamingTechnologies,Inc.
Careers
ClientLogin

News&Events
AristocratandVGTBringPowerfulInnovations
toG2E2016
PostedonSep14,2016
NewCabinets,Games,SystemsProductsforClassIIandClassIIIonDisplayinBooth#1141
LASVEGAS,NV(MarketwiredSep14,2016)AtG2E2016,AristocratandVGTwillshowcasethe
powerofconnectionasthecompaniesbringpowerfulinnovationstobooth#1141withanewmixof
cabinets,gamesandsystemsolutionsthataddresscustomerbusinessneedsinClassIIandClassIII
jurisdictions.AristocratandVGTsdeepandbroadportfolioisdesignedtohelpcustomersservetheir
patronsevenbetterwithaconnectedgamingperspectivethatstrengthensoperatorpatroninteraction.
WatchThePowerofConnectionvideohere:https://vimeo.com/182162863/c6144f37f3
OurcombinedofferingsfromAristocratandVGTpresentthemostdiverseproductportfolioingaming,
onethathasthecontent,comparabilityandconfigurabilitytoappealtoeverytypeofcasinoplayer,said
AristocratChiefCommercialOfficerMaureenSweeny.
Theinnovationbeginswiththreenewcabinets,includinganewstepperline.AristocratsnewClassIII
gamesincludethrillingnewtitlesTimMcGraw,Sharknado,MyCousinVinny,DragonLink,
Wonder4WonderWheel,QuickFireFlamingJackpotsandSpinItGrand.
VGTwillshowcaseanewplatform,Ovation,thatbringsplayerfavoriteAristocratcontenttotheClass
IIspace,combiningmarketprovenbrandswithfieldprovenmathmodelsandcomestomarketwith
sevenstrongtitlesandaroadmaptoexpandthelibrary.
Insystemssolutions,AristocratsOasis360BrandConnectivitySuitecanhelpoperatorsincrease
customerinteractionwitharangeofintegratedsolutionsthatarmtheenterprisewithtools,empowering
themtousemarketingbudgetsmosteffectivelygivingthemlayersofmarketingprogramssothey
haveoptionsasvariedastheirpatrons.
http://www.vgt.net/blog/2016/09/14/aristocratandvgtbringpowerfulinnovationstog2e2016/

Exhibit H, pg. 1

1/2

Case 2:16-cv-02359
Document 1-12 Filed 10/10/16 Page 3 of 3
AristocratandVGTBringPowerfulInnovationstoG2E2016|VideoGamingTechnologies,Inc.

9/27/2016

JoinAristocratonline:
VisitAristocratswebsite
LikeAristocratonFacebook
JoinAristocratonTwitter
DiscoverAristocratgamesonYouTube
AboutAristocrat
AristocratTechnologiesInc.isasubsidiaryofAristocratLeisureLimited(ASX:ALL),aleadingglobal
provideroflandbasedandonlinegamingsolutions.TheCompanyislicensedbymorethan200
regulatorsanditsproductsandservicesareavailableinmorethan90countriesaroundtheworld.
Aristocratoffersadiverserangeofproductsandservicesincludingelectronicgamingmachinesand
casinomanagementsystems.Forfurtherinformation,visitthecompanyswebsiteatwww.aristocrat
us.com.
Contact:
PaulSpeirsHernandez
SteinbeckCommunications
+1(702)4134278
EmailContact
Newer
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RecentNews
AristocratsignsmajordealwithQuapawTribeofOklahoma
AristocratandVGTBringPowerfulInnovationstoG2E2016
VGTsEasyMoneyJackpotWideAreaProgressive:12ShortMonths,12BigWinners,
$4.6MillioninPayouts
LuckyPlayersatWindCreekCasino&HotelWetumpkaandChoctawCasinoResortDurant
WinTopJackpotsonVGTsEasyMoneyJackpotWideAreaProgressive
AristocratandVGTHelpTribalOperatorsMaketheBigPlayinClassIIandClassIIIatNIGA
2016
Copyright2016,VideoGamingTechnologies,Inc.AllRightsReserved
WebDesignbyConvoy

http://www.vgt.net/blog/2016/09/14/aristocratandvgtbringpowerfulinnovationstog2e2016/

Exhibit H, pg. 2

2/2

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 1 of 12

EXHIBIT I
Article re 12th Annual Gaming & Technology
Awards

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 2 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

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http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 1

1/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 3 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

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Vol.11No.38September30,2013PrintThisIssue
RSS2.0Feed PodcastFeedPodcasts
Vol.11No.38September30,2013,GOODS&SERVICES

WinnersAnnouncedfor12thAnnualGlobalGaming
BusinessGaming&TechnologyAwards
Sun,Sep29,2013
Theindustrysmostprestigioustechnologyawards,theGlobalGamingBusinessGaming
&TechnologyAwards,werepresentedlastweekattheindustryslargesttradeshow,
GlobalGamingExpo(G2E),featuringanunprecedentedthreewaytieforfirstplacein
theBestSlotProductcategory.IGTsDarrellRodriguezacceptstheawardforAvatar
fromGlobalGamingBusinessSalesDirectorDavidCoheen.

GlobalGamingBusinessmagazinelastweekannouncedthewinnersofthe11thAnnual
Gaming&TechnologyAwards.The2014Gaming&TechnologyAwardsarethe
industrysstandardinthisfield,recognizingexcellenceininnovationandpractical
http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 2

2/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 4 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

applicationinallgamingdisciplines.Theawardswillbepresentedtothewinnersat
todaysGlobalGamingExpo(G2E)inLasVegas.
Thewinnersofthe12thAnnualGlobalGamingBusinessGamingandTechnology
Awardsfor2014are:
BestConsumerServiceTechnology:
1stBallyTechnologiesDMTournamentsBonusTournament
2ndWMSBladeCabinet
3rdWilliamsInteractivePlay4FunNetworkiGaming&MarketingPlatform
BestProductivityEnhancementTechnology:
1stSightlinePaymentsSPAN
2ndNovomaticNovomaticApp
3rdBallyTechnologiesServiceTrackingManagerMachineEntryAuthorizationLog
MEAL
BestSlotProduct:
1stBallyTechnologiesProSeriesWaveCabinet
1stInternationalGameTechnologyJamesCameronsAVATARVideoSlots
1stGTECH(SpieloInternational)Sphinx3D
BestTableGameProductorInnovation:
1stTCSJohnHuxleySupernova
2ndGamingPartnersInternationalTotalMoneyManagement
3rdInterblockBig3Six
Therapiddevelopmentoftechnologyinthegamingindustry,alongwithquicker
responseofregulatorstoapprovetheseproductshavemadetheseawardsmuchmore
competitiveanddynamic,saidRogerGros,publisherofGlobalGamingBusiness
magazine,whichadministerstheawardsprogram.Forthefirsttimeinthehistoryofthe
Gaming&TechnologyAwards,wehadathreewaytieforfirstplaceforBestSlot
Product.Itshowshowequalandcompellingtheproductsareinallthecategories.
Judgesfortheawardsare:ClaudiaWinkler,president,GHISolutionsRobRussell,
gaminganalyst,RegulatoryManagementCounselors,P.C.FrankNeborsky,vice
presidentofslotoperations,MoheganSunandGerhardBurda,presidentandCEO,
ESCAPESAdvisoryServices.
GlobalGamingBusinessistheleadingtrademagazinepublishedmonthlyfocusingon
thecasinogamingindustryworldwide.GlobalGamingBusinessisanofficialpublication
http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 3

3/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 5 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

oftheAmericanGamingAssociationandGlobalGamingExpo(G2E).GlobalGaming
Business
alsopublishesGGBNews,acomprehensiveweeklyenewsmagazineTribal
GovernmentGaming,anannualpublicationcoveringIndiangamingCasinoDesign,an
annualmagazinecoveringdesignandconstructiontrendsingamingG2EPreview,an
advancelookattheindustryslargesttradeshowandGGBiGames,aweeklyonline
updateontheprogressoftheinternetgamingindustry.
ByStaff

Pleaselogintopostyourcomments.
Asamemberofthegaming
industry,DonaldTrumpasa
presidentialnominee
Isembarrassing
41%

Makesmeproud
5%

Addslegitimacytotheindustry
12%

Hasnothingtodowithgaming
42%

SeeDashboard

SurveyTools

http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 4

4/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 6 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 5

5/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 7 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 6

6/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 8 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

2.5%HARP
2.0Fixed
Rate
NoAppraisal,No
MaxLTV,2.7
APR*.Calculate
New
Rate/Payment

OpenTable
Reservations
BeatTheCrowd,
BookATable
Now!FindA
TableAtALocal
Diner.

http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 7

7/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 9 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

EnterSymbol
Quote

IGTNYQ

Web

$19.25

InternationalGameTechnology
O

BYINYQ
PNKNMS

$0.00
$10.98

PinnacleEntertainment,Inc.

MGMNYQ

$24.12

MGMResortsInternational
Commo

BYDNYQ

$19.53

BoydGamingCorporation
Common

WMSNYQ

$24.07

AdvancedDrainageSystems,
Inc.

LVSNYQ

$46.88

LasVegasSandsCorp.
CommonSt

WYNNNMS

$98.76

WynnResorts,Limited

$N/A

CZRNMS

$8.10

CDCnewswire
AtlanticCitysShowboatis
reopening_butwithout
casino
06/03/2016-13:08
Fightforpublicopinionon
northJerseycasinosis
underway
06/03/2016-12:10
NYlegislationadvancingto
regulatedailyfantasysports
06/03/2016-11:18
MonteCarlocasino-hotel
rebrandsasParkMGM,
NoMad
06/03/2016-11:01
VegasMonteCarlocasinohotelrebrandsasParkMGM,
NoMad
06/03/2016-09:15
MGMResortsInternational
AndSydellGroupPartnerTo

AlsoInThisSection
CasinoCustomerServiceBookReleasedasEBook
http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 8

8/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 10 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

QuixantUSAMovestoVegas
GLIApprovesPokerTekProCore
JCMSuppliesInterblock
SHFLInstallseTablesatResortsManila
FutureLogicMarks30Years
TransActInstallsatLittleRiver
GlobalGamingWomenLaunchesOnlineMentoringProgram
FutureLogicPartnerswithResortAdvantage
IGTExtendsAgreementwithJCM
IGTRevealsNewCorporateBrand,AnnouncesHugeVideoPokerDeal

CoverStory
Showtime!

FeaturedStories
WEEKLYFEATURE:WynnBackinJersey
VancouverCasinoHotelProjectRevived
JapanCasinoBillImminent
IGTRevealsNewCorporateBrand,AnnouncesHugeVideoPokerDeal
TownApprovesMassachusettsSlotsParlor
CuomoPredictsCasinoWin
MadridFearsLosingEuroVegas
AtlanticCityCasinosMeetStateDeadlineforOnlineApplications
NCGovernorOpposesCatawbaCasino
GLOBALGAMINGBUSINESSPODCAST:HowardWeiss,CEO,KGMGaming

Columns
ASIANGAMING
EUROPEANGAMING
GLOBALGAMING
ONLINEGAMING
UNITEDSTATESGAMING
TRIBALGAMING
PEOPLE
GOODS&SERVICES
WILDCARD
NUTSHELL
THEYSAIDIT
http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 9

9/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 11 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

WEEKLYFEATURE

Departments
GLOBALGAMINGBUSINESSPODCASTS

RecentArticles
QUOTABLEQUOTES
NEWS&NOTES
GLOBALGAMINGBUSINESSPODCAST:HowardWeiss,CEO,KGMGaming
VeraCokingDropsPriceonLandmarkAtlanticCityHome
CasinoCustomerServiceBookReleasedasEBook

Issues
Vol.14No.22May30,2016
Vol.14No.21May23,2016
Vol.14No.20May16,2016
Vol.14No.19May9,2016
Vol.14No.18May2,2016

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GGBMagazine|GGBNews|iGamingPlayer|CasinoDesign|TribalGovernmentGaming|GGBiGames|CasinoConnection

http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 10

10/11

Case 2:16-cv-02359 Document 1-13 Filed 10/10/16 Page 12 of 12


6/3/2016 WinnersAnnouncedfor12thAnnualGlobalGamingBusinessGaming&TechnologyAwards|GGBNewsYourSourcefortheUpToTheMinuteNews

Copyright2016GGBNewsPressPublisherOnlinePublishing
System

http://ggbnews.com/issue/vol11no38september302013/article/winnersannouncedfor12thannualglobalgamingbusinessgamingtechnologyawards1

Exhibit I, pg. 11

11/11

Case 2:16-cv-02359 Document 1-14 Filed 10/10/16 Page 1 of 5

EXHIBIT J
Press Release re 8th Annual Slot Floor Technology
Awards

Case 2:16-cv-02359 Document 1-14 Filed 10/10/16 Page 2 of 5

BallyTechnologiesWinsSixInnovationAwards
Company earns four of 10 Slot Floor Technology Awards, two honors in Top 20 Most
Innovative Gaming Technology Products Awards

Exhibit J, pg. 1

Case 2:16-cv-02359 Document 1-14 Filed 10/10/16 Page 3 of 5

BallyearnedhonorsfortheProWaveandPowerProgressivesinthe17thannualTop20Most
InnovativeGamingTechnologyProductsAwards.(Graphic:BusinessWire)

February19,201409:01AMEasternStandardTime
LASVEGAS--(BUSINESSWIRE)--BallyTechnologies,Inc.(NYSE:BYI)(Bally),aleaderingamingmachines,tablegameproducts,
casino-managementsystems,interactiveapplications,andnetworkedandserver-basedsystemsfortheglobalgamingindustry,today
announcedthatitwonfourof10awardsinthe2014SlotFloorTechnologyawardsandtooktwospotsintheannualTop20Most
InnovativeGamingTechnologyProductsawards.
Withtheselatesthonors,Ballyhasearnedmorethan80awardsforgaminginnovationoverthepastfouryears.
BallysTakenPlay,theALPHA2ProSeriesWave,SuperSlotline,andPowerProgressivesmadethetop10listintheeighthannualSlot
FloorTechnologyAwards.Noothergamingmanufacturerhadmorethantwospotsonthelist.
Inaddition,BallyearnedhonorsfortheProWaveandPowerProgressivesinthe17thannualTop20MostInnovativeGamingTechnology
ProductsAwards.Threeproductsfromamongthe20finalistswillwinPlatinum,Gold,andSilverawardsattheGamingTechnology
ConferenceinLasVegasnextmonth.ConferenceattendeeswillalsovotefortheAttendeesChoiceAward.
Bothawardscompetitionsarejudgedbyindependentpanelsofjudgesincludinggamingandhospitalityexecutives,gaminganalysts,
technologyconsultants,andotherindustryprofessionals.Theawardsrecognizethebestininnovationandtechnologyadvancements.

Exhibit J, pg. 2

Case 2:16-cv-02359 Document 1-14 Filed 10/10/16 Page 4 of 5


Wearehonoredthattheseproductswererecognizedintwoprestigiouscompetitions,saidBallysSeniorVicePresidentofNorth
AmericanSalesandCorporateMarketingRobertParente.Theseawardsdemonstrateourcontinuedcommitmenttoadvancementsin
gamingtechnology,andalsoreflectthehardworkanddedicationofourresearchanddevelopmentteams.Fromaportablegametoa
sleeknewcabinet,toproductsthatmakeiteasierforoperatorstoofferfloor-wideeventsandpopularprogressives,theseinnovations
deliverexcitinggamingexperienceswhileprovidingastrongreturn-on-investment.
BallysTakenPlayisaremarkablenewproductthatenablesplayerstotaketheirgameonthegoforthefirsttimebyplayingaphysical
slotmachineontheconvenienceofatablet.TakenPlayistheindustrysfirsttechnologythatallowsthesameslotmachinegametobe
playedinmorethanonelocationbystreamingthegamecontentdirectlyfromtheslotmachinetoatablet.Thisproductprovidescasinos
withaneasy,convenientsolutionforplayerswhogetupandleavetheirmachinetosmoke,usetherestroom,orhavetoleavewhentheir
friendorpartnerisreadytomoveon.
TheALPHA2ProSeriesWaveistheindustrysfirstplatformwithaconcaveLCDmonitor.Thecabinetscurved40-inchtouchscreen
monitorbringsawholenewlookandfeeltocasinofloors,whileprovidingoptimalviewingandincreasedinteractionforplayers.Ballys
entirelibraryofgamesfortheProSeriesV22/22andV32canbeplayedontheWave.Inaddition,fouradditionaltitleshavebeen
developedspecificallyfortheWavetotakeadvantageofitssuperiorhigh-resolutiongameplay.
ThepioneeringSuperSlotlineeasilyconvertsserialfloorstohigh-speedEthernet-stylenetworkedfloorsthatenabletheuseofthelatestin
powerfulfloor-widetechnologies.SuperSlotlineallowscasinoswithlegacynetworkstouseadvancedtechnologysuchasiVIEWDisplay
Manager(DM)andEliteBonusingSuite(EBS)torunfloor-widepromotionsandeventsthatdriveincreasedcoin-in,newplayersclub
registrations,playerexcitement,andevenpowerworldrecords.
PowerProgressivesfeaturestwonewprogressivejackpotapplicationsthatenablecustomerswithBallysEBSandiVIEWDMtorun
progressivesonanymachine,withnoadditionalin-gameorserverhardwarerequired.ThegroundbreakingPowerProgressiveStrikeand
PowerPaytableProgressivearepresentedonboththemaingamescreenandoverheaddigitaldisplaysforincreasedplayerawareness
andahigh-energyexperiencethatwilldrawplayersin.
AboutBallyTechnologies,Inc.
Foundedin1932,BallyTechnologies(NYSE:BYI)providestheglobalgamingindustrywithinnovativegames,tablegameproducts,
systems,mobile,andiGamingsolutionsthatdriverevenueandprovideoperatingefficienciesforgamingoperators.Formoreinformation,
pleasevisithttp://www.ballytech.com.ConnectwithBallyonFacebook,Twitter,YouTube,LinkedIn,andPinterest.
Thisnewsreleasemaycontainforward-lookingstatementswithinthemeaningoftheSecuritiesActof1933,asamended,andissubject
tothesafeharborcreatedthereby.Suchinformationinvolvesimportantrisksanduncertaintiesthatcouldsignificantlyaffecttheresultsin
thefutureand,accordingly,suchresultsmaydifferfromthoseexpressedinanyforward-lookingstatements.Futureoperatingresultsmay
beadverselyaffectedasaresultofanumberofrisksthataredetailedfromtimetotimeintheCompanysfilingswiththeSecuritiesand
ExchangeCommission.TheCompanyundertakesnoobligationtoupdatetheinformationinthispressreleaseandrepresentsthatthe
informationisonlyvalidasoftodaysdate.
BALLYTECHNOLOGIES,INC.
ThetrademarksBally,TakenPlay,ALPHA2,ProSeriesWave,SuperSlotline,PowerProgressivesiVIEW,EliteBonusingSuite,Power
ProgressiveStrike,andPowerPaytableProgressivearemarksowned,orunderlicense,byBallyTechnologies,Inc.,oroneormoreofits
whollyownedsubsidiariesintheUnitedStatesorelsewhere.

Contacts
BallyTechnologies,Inc.
LauraOlson-Reyes,702-532-7742
SeniorDirector,Marketing&CorporateCommunications
Lolson-reyes@ballytech.com

Exhibit J, pg. 3

Case 2:16-cv-02359 Document 1-14 Filed 10/10/16 Page 5 of 5


MichaelCarlotti,702-532-7995

VicePresidentofTreasuryandInvestorRelations
mcarlotti@ballytech.com
MikeTrask,702-532-7451
Mobile:702-330-6679
CorporateCommunicationsManager
MTrask@ballytech.com

Exhibit J, pg. 4

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 1 of 9

EXHIBIT K
Article re Casino Journal Magazines Top 20 Most
Innovative Gaming Technology Products of 2013

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 2 of 9

Top 20 Gaming Products Awards


winners unveiled

Platinum Award Winner, Sphinx 3D from GTECH

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Exhibit K, pg. 1

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 3 of 9

April 9, 2014
PaulDoocey

There was a clear winner of this years judged contest for the Top 20 Most
Innovative Gaming Technology Products of 2013, but things got tight from
there. And attendees at the Gaming Technology Conference weighed in with
their own judgment, expanding the list of winners to ve. The winners were
announced at last months Gaming Technology Conference at Caesars Palace in
Las Vegas.
In the judged contest, GTECH received the rst place Platinum Award for
Sphinx 3D; there was a tie for Gold between Bally Technologies for ProSeries
Wave and Global Cash Access for Everi; and Intermezzo, Inc.s ClubLinq API
placed third, winning Silver.
These winners received the highest scores from four distinguished judges, who
were asked to evaluate everything from the products contributions to
technological innovation to their practical value on the gaming oor. Judging
the products were Warren Davidson, slot director, Coushatta Casino Resort;
Donne Grable, vice president, gaming operations, VCAT LLC; Gaye Gullo,
corporate vice president marketing and CMO, Penn National Gaming; and
Claudia Winkler, president, G.H.I. Solutions.
In addition, attendees at the Gaming Technology Conference were asked to
pick their own favorite in voting that took place on the trade show oor during
the two-day event. That award, the Attendees Choice, went to Acres 4.0 for Kai.

Exhibit K, pg. 2

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 4 of 9

The fullTop 20 list of winners was announced in the March issue of Casino

Journal. Heres a re-cap and description of the Platinum, Gold, Silver and
Attendees Choice designated products:

PLATINUM AWARD
Sphinx 3D GTECH
Sphinx 3D is the rst title in GTECHs new True 3D product line, which uses a
glasses-free 3D display designed exclusively for GTECH for the gaming industry
by SeeFront. It uses autostereoscopic technology with integrated eye-tracking
to make images jump off the screen or stretch into in nity in high resolution.
Without wearing special or additional glasses, players can explore the onscreen vistas, change viewing angles without disrupting the 3D experience, and
see wilds stacked on the z-axis that seem to rotate toward and jump out at
them.
A ve-reel, 30-line game, Sphinx 3D features a base game and a total of seven
bonuses: two in the base game and ve dedicated bonuses that players can
select as part of the Sphinx Bonus selection.
Additionally, the new AXXIS cabinet is designed to create a sense of personal
space, maximize player comfort and immerse the player in the game with a
state-of-the-art multimedia chair that includes rumble, surround sound and a
sliding mechanism for easy entry and adjustable player seating position for
ultimate comfort. The high-resolution button panel with the latest touchscreen technology, full-scale illumination and an iconic illuminated sphinx
head topping the unique cabinet are the nal touches to the package.

Exhibit K, pg. 3

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 5 of 9

The execution of the 3D effect is simply stunning, said one judge. Another
great feature is the ability to reduce or eliminate the 3D effect if the player
desires to play the game that way.

GOLD AWARD
Pro Series Wave BALLY TECHNOLOGIES
Ballys ALPHA 2 Pro Series Wave features an industry- rst 40-inch concave
high-de nition monitor. The game screen curves gracefully inward, giving a
brand new look and feel to any casino oor. The cabinets curved touch-screen
monitor also provides optimal viewing and increased interaction for players.
The Wave integrates an LCD panel and custom, game-synchronized LED
cabinet lighting to enhance the play experience, as well as an iDeck multitouch button panel. An optional 22-inch Pro Digital Topper commands
attention from across the casino oor.
This cabinets ergonomic design is a big part of the story. The seat height and
placement of the display provide natural viewing of the screen with no player
fatigue, while the chair position makes it easier for players to reach the button
panel. This is Ballys rst cabinet designed speci cally for women, the core
slot-player demographic. The lower button panel height and angled footrest
provide support for smaller players, while the button panels slim design
provides more legroom for taller and larger male players.
Ballys entire library of video-slot games for the Pro Series V22/22 and V32 can
be played on the Wave.
Bally has hit on all cylinders with Pro Series Wave, said a judge. They have
focused on all the key components of player comfort and have used the new
LCD technology available to its fullest advantage.

Exhibit K, pg. 4

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 6 of 9

GOLD AWARD
Everi GLOBAL CASH ACCESS (GCA)
A payments and monetization solution for interactive gaming, Everibridges the
payments gap between land-based and interactive gaming, integrating with
GCAs extensive network of kiosks and land-based operations, while
simultaneously reducing operators PCI (payment card industry) compliance
burden, increasing operator brand awareness and giving operators more
control over their interactive gaming solutions.
Everi acts as a payment aggregator by consolidating numerous payment
optionstraditional and alternative methodsinto one simple-to-integrate
payment wall. Everi Digital Wallet, a funds management and payments
solution, manages real money and social currencies while bridging disparate
game and loyalty systems to provide operators with more robust player data
and unique marketing opportunities. Everi Productivity Suite focuses on
increasing revenue through player monetization and includes easily accessible
detailed reporting, player and transaction analytics and fully customizable
offer engines.
Each Everi product is a single integration with modular feature
implementation, allowing operators to select as few or as many of the
customizable options on offer. Leveraging the sophisticated technology of the
Live Gamers Elements platform, Everi navigates the ever changing regulatory
and legal landscapes to ensure interactive gaming and lottery payments are
always in compliance with jurisdictional gaming regulations as well as PCI and
PII rules.

Exhibit K, pg. 5

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 7 of 9

GCA is leaps and bounds ahead with their Everi product, said one judge. As
online gaming becomes a more prominent part of our landscape, Everi
addresses many of the issues players will have with accessibility to their money
along with funding their accounts conveniently.

SILVER AWARD
ClubLinq API INTERMEZZO
ClubLinq Identity is an open application programming interface (API), which
provides casino operators and players club members with a secure player
portal where they can view current entitlement balances, print or download
win/loss statements and update pro le information. Further, ClubLinq Identity
provides the connection or identi cation of a players social identity, which
is driving a paradigm shift in the importance of big data systems provided by
companies like IBM and MicroStrategy.
ClubLinq Offers is a module of the open ClubLinq API, which, through the
Identity Portal, provides players club members with the ability to view and
redeem their direct-mail, automated casino management system offers (i.e.
FreePlay) or lodging/dining offers via the secure player portal.
Gaming operators using ClubLinq can enjoy increased pro tability through
substantial savings via online opt-in for offers, reduction of operator liability
by customer ownership of their loyalty account, and heightened brand identity
through persistent interaction with club members.
I like the ability to print win/loss statements and change contact
information, a judge said. These are typically things the casino does not
allow players to do on their own.

Exhibit K, pg. 6

ATTENDEE CHOICE AWARD


Kai ACRES 4.0

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 8 of 9

At peak times, customer service transactions overwhelm the capacity of


employees to process every need in a timely and satisfying way. Kai allows
customers to express needs by text messaging from their mobile phones and
engages customers in entertaining games, even when they are not physically at
the casino. Kai also provides ef cient communication, coordination and
management oversight of employee actions on the casino oor by replacing
traditional two-way radios with smart mobile devices.
Kai possesses a central intelligence that is programmed with the best practices
of casino management and communicates through high-capacity wireless
channels to employees within the casino and to players within and beyond the
casino.
The product coordinates the activities of security, surveillance, slots, table
games, valet, maintenance, hotel and every other department that comprises a
modern resort. By unifying and coordinating the actions of employees
throughout the property and by better sensing the needs of customers and
providing new methods to entertain them, Kai makes possible a greater level of
customer service and stimulates revenues at a signi cant cost savings to
traditional methods.
Kai gets slot communication in line with todays world by eliminating the
radio and the dispatcher and communicates via iPods, said a judge. This form
of communication is the standard for todays busy world and a much needed
addition to the slot oor.

Recent Articles By Paul Doocey


Exhibit K, pg. 7

Case 2:16-cv-02359 Document 1-15 Filed 10/10/16 Page 9 of 9


Scientic Games
EMPOWER Conference
overview

Gaming in the south is rising again


Casino Journals TOP 20 Most
Innovative Gaming Technology
Products of 2015
Controversy and new products take
center stage at Southern Gaming
Summit
Security system providers surveillance
case studies

Paul Doocey was appointed editor ofCasino


Journal, a BNP Media publication, in 2011.
He had previously served as editor of the
publication from 2003 to 2006. Paul also
served as editorial director of the Gaming
Group for Ascend Media and editor
ofInternational Gaming & Wagering
Businessmagazine from 2006 to 2008. He
had previously worked for IGWB from 1992
to 2000, the last three years as editor of the
publication. From 2000 to 2003, Paul was
editor-in-chief ofBank Systems &
Technologymagazine, a CMP publication.
He also served various editorial positions at
International Council of Shopping Centers
and Fairchild Publications. Paul has also had
freelance articles appear inBillboard,
Unique Homes, Hotel Businessand other
magazines. Paul is a graduate of Fordham
University.

Copyright 2016. All Rights Reserved BNP Media.


Design, CMS, Hosting & Web Development :: ePublishing

Exhibit K, pg. 8

Case 2:16-cv-02359 Document 1-16 Filed 10/10/16 Page 1 of 5

EXHIBIT L
Press Release re Casino Enterprise Management
magazines 2014 Hospitality Operations Technology
Awards

Case 2:16-cv-02359 Document 1-16 Filed 10/10/16 Page 2 of 5

BallyTechnologiesWinsFiveofSixHospitalityOperationsTechnology(HOT)Awards

Exhibit L, pg. 1

Case 2:16-cv-02359 Document 1-16 Filed 10/10/16 Page 3 of 5

BallyTechnologies,Inc.(NYSE:BYI)("Bally")wonfiveofthesixhonorsinthe2014Hospitality
OperationsTechnology(HOT)Awards.(Photo:BusinessWire)

May08,201409:02AMEasternDaylightTime
LASVEGAS--(BUSINESSWIRE)--CasinoEnterpriseManagementmagazineawardedBallyTechnologies,Inc.(NYSE:BYI)(Bally)five
ofthesixhonorsinthe2014HospitalityOperationsTechnology(HOT)Awards.
ItmakesthesecondyearinarowthatHOTAwardjudgeshaverecognizednumerousBallyproducts.Lastyear,Ballytookfourofthesix
honorsintheannualcontestrecognizingleadinggame-technologyproductsthatmakeapositivedifferenceinacasino-hotelsoperations.
Ballyhaswonatleastfourawardsinthecompetitioneachyearsince2011.Intotal,Ballyhasearnedmorethan80awardsforgaming
innovationinthepastfouryears.
Thesubmissionswerejudgedbyapanelofexpertjudgesincludingseveralcasinoandhospitalityexecutives.Ballyswinningproducts
are:

ALPHA2ProWaveforRevenueGeneration
TakenPlayforGuestExperienceEnhancement
MobileCreditsforSelf-ServiceProducts

Exhibit L, pg. 2

Case 2:16-cv-02359 Document 1-16 Filed 10/10/16 Page 4 of 5


CoolSign8KVideoWallControllerforMediaandContentManagement

EliteBonusingSuitesSocialLinkforInternetServices
Afterbeingrecognizedinfourofthesixcategorieslastyear,wereproudtotopourselvesagainwithwinsinfiveoutofthesixcategories,
saidBallyTechnologiesBryanKelly,SeniorVicePresidentofTechnology.Theseawardsreflectourcontinuedcommitmenttodeveloping
trailblazingproductsthatoffernewandthrillinggamingexperiencesforplayerswhileincreasingefficienciesandcompetitiveadvantages
foroperators.
TheALPHA 2 Pro WaveistheindustrysfirstplatformwithaconcaveLCDmonitor.Thecabinetscurved40-inchtouchscreenmonitor
bringsawholenewlookandfeeltocasinofloors,whileprovidingoptimalviewingandincreasedinteractionforplayers.ManyofBallys
gamesfortheProSeriesV22/22andV32canbeplayedontheWave.Inaddition,fouradditionaltitleshavebeendevelopedspecifically
fortheWavetotakeadvantageofitssuperiorhigh-resolutiongameplay.
BallysTake n Playisaremarkablenewproductthatenablesplayerstotaketheirgameonthegoforthefirsttimebyplayingaphysical
slotmachineontheconvenienceofatablet.TakenPlayistheindustrysfirsttechnologythatallowsthesameslotmachinegametobe
playedinmorethanonelocationbystreamingthegamecontentdirectlyfromtheslotmachinetoatablet.Thisproductprovidescasinos
withaneasy,convenientsolutionforplayerswhogetupandleavetheirmachine,whilecontinuingtoplay.
Mobile Creditsistheindustrysfirsttechnologythatempowersplayerstomanagetheirgamingfundsdirectlyfromtheirmobiledevice.
Thisgroundbreakingtechnologyenablesplayerstoloadcreditsontotheirgamefromamobilephoneortablet,removingtheneedtovisit
anATMorcarryvouchersaroundonthecasinofloor.Withthissimplesolution,casinoscanincreasecoin-inbyreducingthetimespent
awayfromagamewhileplayersvisitanATMorredeemvouchers.
ThenextgenerationCoolSign8KVideoWallControllerhasquadrupledthepreviouspowerofBallysCoolSignmedia-management
solutionbyenablingunprecedented4x4videowithmultipleregionsofcontentplaybackusingany1080pmonitorwithabsolutelynoloss
ofresolution.Thatmeansupto16individualscreenscanbeusedforanastonishing8,000-by-4,000pixelquality.TheCoolSignVideo
WallControllerincreasesefficiencyanddecreasescostforcasinooperatorsbecausenointermediarydeviceisneeded.
SocialLinkisapioneeringnewEliteBonusingSuitefeaturethatpostsdirectlyfromaslotgametoacasinosFacebookpage,enabling
casinostointegratebonusingeventswiththeirsocialmedia.SocialLinkisacost-effectivesocialmediasolutionthatencouragesawhole
newlevelofplayerengagementanddrivesincreasedexcitementforpromotions.
AboutBallyTechnologies,Inc.
Foundedin1932,BallyTechnologies(NYSE:BYI)providestheglobalgamingindustrywithinnovativegames,tablegameproducts,
systems,mobile,andiGamingsolutionsthatdriverevenueandprovideoperatingefficienciesforgamingoperators.Formoreinformation,
pleasevisithttp://www.ballytech.com.ConnectwithBallyonFacebook,Twitter,YouTube,LinkedIn,andPinterest.
Thisnewsreleasemaycontainforward-lookingstatementswithinthemeaningoftheSecuritiesActof1933,asamended,andissubject
tothesafeharborcreatedthereby.Suchinformationinvolvesimportantrisksanduncertaintiesthatcouldsignificantlyaffecttheresultsin
thefutureand,accordingly,suchresultsmaydifferfromthoseexpressedinanyforward-lookingstatements.Futureoperatingresultsmay
beadverselyaffectedasaresultofanumberofrisksthataredetailedfromtimetotimeintheCompanysfilingswiththeSecuritiesand
ExchangeCommission.TheCompanyundertakesnoobligationtoupdatetheinformationinthispressreleaseandrepresentsthatthe
informationisonlyvalidasoftodaysdate.
BALLYTECHNOLOGIES,INC.
Bally,ALPHA2ProWave,TakenPlay,MobileCredits,CoolSign,andEliteBonusingSuitearemarksownedby,orunderlicensetoor
from,BallyTechnologies,Inc.,oroneormoreofitswhollyownedsubsidiariesintheUnitedStatesorelsewhere.

Exhibit L, pg. 3

Contacts Case 2:16-cv-02359 Document 1-16 Filed 10/10/16 Page 5 of 5


BallyTechnologies,Inc.
LauraOlson-Reyes,702-532-7742
SeniorDirector,Marketing&CorporateCommunications
Lolson-reyes@ballytech.com
MichaelCarlotti,702-532-7995
VicePresidentofTreasuryandInvestorRelations
mcarlotti@ballytech.com
MikeTrask,702-532-7451
Mobile:702-330-6679
Sr.Manager,CorporateCommunications
MTrask@ballytech.com

Exhibit L, pg. 4

Case 2:16-cv-02359 Document 1-17 Filed 10/10/16 Page 1 of 3

EXHIBIT M
Press Release re 13th Annual Gaming & Technology
Awards

Case 2:16-cv-02359 Document 1-17 Filed 10/10/16 Page 2 of 3

October 6, 2014

Bally Technologies Wins Two Top Spots in 2015 Gaming & Technology Awards
Pro Wave 360 wins first place for Best Slot Product and Safe-Bacc takes first place for Best Table Game Product or Innovation
LAS VEGAS--(BUSINESS WIRE)-- Bally Technologies, Inc. (NYSE: BYI) ("Bally" or the "Company") earned three honors in the
2015 Gaming & Technology Awards, including top spots for two of the Company's game and table product innovations.
The Pro Wave 360 cabinet won first place for "Best Slot Product" and
Safe-Bacc won first place for "Best Table Game Product or Innovation." In
addition, Mobile Credits won second place for "Best Consumer Service
Technology."
With these latest honors, Bally has earned more than 80 awards for
gaming innovation over the past four years, more than all its major
competitors combined.
No other gaming manufacturer won more than two honors in the Gaming &
Technology Awards, which are sponsored by Global Gaming Business
magazine and recognize industry-leading technology and innovation. The
submissions were evaluated by a panel of expert judges from across the
casino gaming industry.
"It is an honor to win first place in two of the four categories because it
demonstrates that we are committed to developing differentiated products
that meet the needs of operators and players," said Derik Mooberry,
Bally's Senior Vice President of R&D. "The Pro Wave 360 takes our
award-winning Pro Wave cabinet to a whole new level, Safe-Bacc
increases security on the popular game of baccarat, and Mobile Credits
makes it easier for players to fund their gaming by allowing them to load
credits from their mobile device. We believe these award-winning products
elevate the gaming experience and offer more profit potential to our
customers."

Bally Technologies' Pro Wave 360 redefines


community-style gaming with its circular display
featuring five Pro Wave cabinets and five 40-inch
video toppers forming a 360-degree video display.
(Photo: Business Wire)

The Pro Wave 360 redefines community-style gaming with its circular
display featuring five Pro Wave cabinets and five 40-inch video toppers
forming a 360-degree video display for a towering centerpiece reaching
10 feet tall. The configuration synchronizes audio and visual events for a
community gaming experience in which players share the joys of winning
and bonuses together, while their play and coin-in stay separate.

Safe-Bacc is a revolutionary new product that combines Bally's best-inclass automatic shuffling, card reading, and scoring technology into one
solution that increases game speed and improves security on baccarat
tables. Safe-Bacc delivers cost savings by eliminating the need for additional security features, pre-shuffled cards, and the
multi-layered security checks that casinos currently perform while delivering cards to their tables.
Mobile Credits revolutionizes slot play by enabling players to fund their gaming directly from their mobile device. This next
generation of funds management removes the need for players to visit an ATM or carry vouchers around on the casino floor,
increasing potential coin-in by reducing the time spent away from a slot machine.
About Bally Technologies, Inc.
Founded in 1932, Bally Technologies (NYSE: BYI) provides the global gaming industry with innovative games, table game
products, systems, mobile, and iGaming solutions that drive revenue and provide operating efficiencies for gaming operators.

Exhibit M, pg. 1

Case 2:16-cv-02359 Document 1-17 Filed 10/10/16 Page 3 of 3


For more information, please visit http://www.ballytech.com. Connect with Bally on Facebook, Twitter, YouTube, LinkedIn, and
Instagram.
This news release may contain "forward-looking" statements within the meaning of the Securities Act of 1933, as amended, and
is subject to the safe harbor created thereby. Such information involves important risks and uncertainties that could significantly
affect the results in the future and, accordingly, such results may differ from those expressed in any forward-looking
statements. Future operating results may be adversely affected as a result of a number of risks that are detailed from time to
time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update
the information in this press release and represents that the information is only valid as of today's date.
- BALLY TECHNOLOGIES, INC. Bally, Pro Wave 360, Safe-Bacc, Mobile Credits, and Pro Wave are marks owned by, or under license to or from, Bally
Technologies, Inc., or one or more of its wholly owned subsidiaries in the United States or elsewhere.

Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20141006005192/en/


Bally Technologies, Inc.
Laura Olson-Reyes, 702-532-7742
Senior Director, Marketing & Corporate Communications
Lolson-reyes@ballytech.com
Michael Carlotti, 702-532-7995
Vice President of Treasury and Investor Relations
mcarlotti@ballytech.com
Mike Trask, 702-532-7451
Mobile: 702-330-6679
Sr. Manager, Corporate Communications
MTrask@ballytech.com
Source: Bally Technologies, Inc.
News Provided by Acquire Media

Exhibit M, pg. 2

Case 2:16-cv-02359 Document 1-18 Filed 10/10/16 Page 1 of 3

EXHIBIT N
Article re Casino Journal Magazines Top 20 Most
Innovative Gaming Technology Products for 2014

Case 2:16-cv-02359 Document 1-18 Filed 10/10/16 Page 2 of 3

Announcing the Top 20 Winners!

April 17, 2015

Casino Journal is pleased to announce the winners of its Top 20 Most


Innovative Gaming Technology Products Awards for 2014. These companies
and their products will be pro led in the September issue of Casino Journal.

The Top 20 winners (in alphabetical order by company) are:


Aristocrat Double Arc Cabinet
boostchatter Social Media Loyalty
Duetto GameChanger
Galaxy Gaming SpectrumVision
Infor Infor Talent Science
iovation iovation Trust Services
Konami Gaming Neo Contra with Symphonik 3D sound
Konami Gaming Synkiosk
Multimedia Games/GCA Apex V
Multimedia Games/GCA Twist & Win
New Millennium Gaming Omni-Table
NICE Systems NICE Suspect Search

Exhibit N, pg. 1

Case
2:16-cv-02359
Document 1-18 Filed 10/10/16 Page 3 of 3
Scienti c Games
Pro
Wave 360
Scienti c Games DM Wagering
Scienti c Games Safe Bacc
Scienti c Games Take n Play
Sightline Payments/Station Casinos Sports Connection Prepaid Card
SkyWire Mobile Connect Suite
VizExplorer hostViz
VizExplorer vizActionFactory
A panel of expert judges evaluated the entries from industry vendors showcasing their newest, most
creative products and services to decide Casino Journal's Top 20 Most Innovative Gaming Technology
Products Awards for 2014.
Judging this year's contest were Warren Davidson, Slot Director, Coushatta Casino Resort; Donne Grable,
Vice President of Gaming Operations, VCAT LLC; and Claudia Winkler, President, G.H.I. Solutions.
The Top 20 winners will be honored and plaques will be awarded at Casino Marketing & Technology
Conference, slated for July 14-16 at the Rio in Las Vegas. The winners of the Platinum, Gold and Silver
Awards, along with the winner of the contest's Attendee Choice Award, also will be announced. Show
attendees will vote during the Summit for the Attendee Choice Award winner, selecting from among the
Top 20 winners.

Copyright 2016. All Rights Reserved BNP Media.


Design, CMS, Hosting & Web Development :: ePublishing

Exhibit N, pg. 2

Case 2:16-cv-02359 Document 1-19 Filed 10/10/16 Page 1 of 3

EXHIBIT O
Press Release re EASY MONEY JACKPOT

Case 2:16-cv-02359 Document 1-19 Filed 10/10/16 Page 2 of 3


10/3/2016

VGTsEasyMoneyJackpotWideAreaProgressive:12ShortMonths,12BigWinners,$4.6MillioninPayouts|VideoGamingTechnologies,Inc.

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Exhibit O, pg. 1

1/2

Case 2:16-cv-02359 Document 1-19 Filed 10/10/16 Page 3 of 3


10/3/2016

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VGTAnAristocratCompanyistheleadingdesigner/manufacturer/distributorofClassIIgamesfor
NativeAmericancasinosandemergingmarkets.ThecompanyisheadquarteredinFranklin,Tenn.,with
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Exhibit O, pg. 2

2/2

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 1 of 8

EXHIBIT P
U.S. Trademark Application Serial No. 86525799
for EASY MONEY JACKPOT

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 2 of 8

PTO Form 1478 (Rev 9/2006)


OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86525799
Filing Date: 02/05/2015

The table below presents the data as entered.


Input Field
SERIAL NUMBER

Entered
86525799

MARK INFORMATION
*MARK

EASY MONEY JACKPOT

STANDARD CHARACTERS

YES

USPTO-GENERATED IMAGE

YES

LITERAL ELEMENT

EASY MONEY JACKPOT

MARK STATEMENT

The mark consists of standard characters, without claim to any


particular font, style, size, or color.

REGISTER

Principal

APPLICANT INFORMATION
*OWNER OF MARK

Video Gaming Technologies, Inc.

*STREET

308 Mallory Station Road

*CITY

Franklin

*STATE
(Required for U.S. applicants)

Tennessee

*COUNTRY

United States

*ZIP/POSTAL CODE
(Required for U.S. applicants)

37067

EMAIL ADDRESS

iptm@armstrongteasdale.com

LEGAL ENTITY INFORMATION


TYPE

corporation

STATE/COUNTRY OF INCORPORATION

Tennessee

GOODS AND/OR SERVICES AND BASIS INFORMATION


INTERNATIONAL CLASS

009

*IDENTIFICATION

gaming devices, namely computer software for use with


gaming machines to enable the gaming machine to run

FILING BASIS

SECTION 1(b)

INTERNATIONAL CLASS

028

*IDENTIFICATION

gaming devices, namely gaming machines, slot machines,


bingo machines, with or without video output

FILING BASIS

SECTION 1(b)

ATTORNEY INFORMATION

Exhibit P, pg. 1

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 3 of 8


NAME

Courtney Jackson

ATTORNEY DOCKET NUMBER

T0325-001 / 33050-TBD

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

Saint Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

EMAIL ADDRESS

iptm@armstrongteasdale.com

AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

CORRESPONDENCE INFORMATION
NAME

Courtney Jackson

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

Saint Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

EMAIL ADDRESS

iptm@armstrongteasdale.com;ip@vgt.net

AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

FEE INFORMATION
APPLICATION FILING OPTION

Regular TEAS

NUMBER OF CLASSES

FEE PER CLASS

325

*TOTAL FEE DUE

650

*TOTAL FEE PAID

650

SIGNATURE INFORMATION
SIGNATURE

/Keith D. Moore/

SIGNATORY'S NAME

Keith D. Moore

SIGNATORY'S POSITION

Director of IP

SIGNATORY'S PHONE NUMBER

314-621-5070

DATE SIGNED

02/04/2015

Exhibit P, pg. 2

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 4 of 8

Exhibit P, pg. 3

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 5 of 8


PTO Form 1478 (Rev 9/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86525799
Filing Date: 02/05/2015

To the Commissioner for Trademarks:


MARK: EASY MONEY JACKPOT (Standard Characters, see mark)
The literal element of the mark consists of EASY MONEY JACKPOT.
The mark consists of standard characters, without claim to any particular font, style, size, or color.
The applicant, Video Gaming Technologies, Inc., a corporation of Tennessee, having an address of
308 Mallory Station Road
Franklin, Tennessee 37067
United States

requests registration of the trademark/service mark identified above in the United States Patent and Trademark Office on the Principal Register
established by the Act of July 5, 1946 (15 U.S.C. Section 1051 et seq.), as amended, for the following:
International Class 009: gaming devices, namely computer software for use with gaming machines to enable the gaming machine to run
Intent to Use: The applicant has a bona fide intention to use or use through the applicant's related company or licensee the mark in commerce on
or in connection with the identified goods and/or services. (15 U.S.C. Section 1051(b)).
International Class 028: gaming devices, namely gaming machines, slot machines, bingo machines, with or without video output
Intent to Use: The applicant has a bona fide intention to use or use through the applicant's related company or licensee the mark in commerce on
or in connection with the identified goods and/or services. (15 U.S.C. Section 1051(b)).

The applicant's current Attorney Information:


Courtney Jackson of Armstrong Teasdale LLP
7700 Forsyth Blvd., Suite 1800
Saint Louis, Missouri 63105
United States
The attorney docket/reference number is T0325-001 / 33050-TBD.
The applicant's current Correspondence Information:
Courtney Jackson
Armstrong Teasdale LLP
7700 Forsyth Blvd., Suite 1800
Saint Louis, Missouri 63105
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com;ip@vgt.net (authorized)
A fee payment in the amount of $650 has been submitted with the application, representing payment for 2 class(es).
Declaration
The signatory believes that: if the applicant is filing the application under 15 U.S.C. Section 1051(a), the applicant is the owner of the
trademark/service mark sought to be registered; the applicant or the applicant's related company or licensee is using the mark in commerce on or
in connection with the goods/services in the application, and such use by the applicant's related company or licensee inures to the benefit of the
applicant; the specimen(s) shows the mark as used on or in connection with the goods/services in the application; and/or if the applicant filed an
application under 15 U.S.C. Section 1051(b), Section 1126(d), and/or Section 1126(e), the applicant is entitled to use the mark in commerce; the
applicant has a bona fide intention to use or use through the applicant's related company or licensee the mark in commerce on or in connection
with the goods/services in the application. The signatory believes that to the best of the signatory's knowledge and belief, no other person has the
right to use the mark in commerce, either in the identical form or in such near resemblance as to be likely, when used on or in connection with the

Exhibit P, pg. 4

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 6 of 8


goods/services of such other person, to cause confusion or mistake, or to deceive. The signatory being warned that willful false statements and
the like are punishable by fine or imprisonment, or both, under 18 U.S.C. Section 1001, and that such willful false statements and the like may
jeopardize the validity of the application or any registration resulting therefrom, declares that all statements made of his/her own knowledge are
true and all statements made on information and belief are believed to be true.
Declaration Signature
Signature: /Keith D. Moore/ Date: 02/04/2015
Signatory's Name: Keith D. Moore
Signatory's Position: Director of IP
RAM Sale Number: 86525799
RAM Accounting Date: 02/06/2015
Serial Number: 86525799
Internet Transmission Date: Thu Feb 05 15:40:05 EST 2015
TEAS Stamp: USPTO/BAS-XXX.XX.XXX.XXX-201502051540058
85047-86525799-5308374fe920c57ad6251c32a
f7ea7236a8817f22dd7a6b3235bcc82c93d99ad4
-DA-2170-20150203143559735590

Exhibit P, pg. 5

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 7 of 8

Exhibit P, pg. 6

Case 2:16-cv-02359 Document 1-20 Filed 10/10/16 Page 8 of 8

Exhibit P, pg. 7

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 1 of 60

EXHIBIT Q
USPTO Office Action dated February 2, 2016,
refusing U.S. Trademark Application Serial No.
86525799 for EASY MONEY JACKPOT

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 2 of 60

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86525799 - EASY MONEY JACKPOT - T0325-001 /

Sent:

2/2/2016 2:37:55 PM

Sent As:

ECOM104@USPTO.GOV

Attachments:

Attachment - 1
Attachment - 2
Attachment - 3
Attachment - 4
Attachment - 5
Attachment - 6
Attachment - 7
Attachment - 8
Attachment - 9
Attachment - 10
Attachment - 11
Attachment - 12
Attachment - 13
Attachment - 14
Attachment - 15
Attachment - 16
Attachment - 17
Attachment - 18
Attachment - 19
Attachment - 20
Attachment - 21
Attachment - 22
Attachment - 23
Attachment - 24
Attachment - 25
Attachment - 26
Attachment - 27
Attachment - 28
Attachment - 29
Attachment - 30
Attachment - 31
Attachment - 32
Attachment - 33
Attachment - 34
Attachment - 35
Attachment - 36
Attachment - 37
Attachment - 38
Attachment - 39
Attachment - 40
Attachment - 41
Attachment - 42
Attachment - 43
Attachment - 44

Exhibit Q, pg. 1

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 3 of 60


Attachment - 45
Attachment - 46
Attachment - 47
Attachment - 48
Attachment - 49
Attachment - 50
Attachment - 51
UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)
OFFICE ACTION (OFFICIAL LETTER) ABOUT APPLICANTS TRADEMARK APPLICATION

U.S. APPLICATION SERIAL NO. 86525799

MARK: EASY MONEY JACKPOT

*86525799*

CORRESPONDENT ADDRESS:
COURTNEY JACKSON

CLICK HERE TO RESPOND TO THIS LETTER:

Armstrong Teasdale

http://www.uspto.gov/trademarks/teas/response_forms.jsp

7700 Forsyth Blvd Ste 1800


Saint Louis, MO 63105-1847

VIEW YOUR APPLICATION FILE

APPLICANT: Video Gaming Technologies, Inc.

CORRESPONDENTS REFERENCE/DOCKET NO :
T0325-001 /
CORRESPONDENT E-MAIL ADDRESS:
iptm@armstrongteasdale.com

OFFICE ACTION
STRICT DEADLINE TO RESPOND TO THIS LETTER

TO AVOID ABANDONMENT OF APPLICANTS TRADEMARK APPLICATION, THE USPTO MUST RECEIVE APPLICANTS
COMPLETE RESPONSE TO THIS LETTER WITHIN 6 MONTHS OF THE ISSUE/MAILING DATE BELOW.
ISSUE/MAILING DATE: 2/2/2016
Upon further review, the examining attorney issues a Section 2(d) refusal based on a likelihood of confusion with the marks in U.S. Registration
Nos. 3004885 and 3399131. The previously issued disclaimer requirement is continued and maintained.
Summary of Issues That Applicant Must Address
Section 2(d) refusal based on a likelihood of confusion with the marks in U.S. Registration Nos. 3004885 and 3399131
Disclaimer of the wording JACKPOT
SECTION 2(d) REFUSAL LIKELIHOOD OF CONFUSION

Exhibit Q, pg. 2

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 4 of 60

Registration of the applied-for mark is refused because of a likelihood of confusion with the mark in U.S. Registration Nos. 3399131 and
3004885. Trademark Act Section 2(d), 15 U.S.C. 1052(d); see TMEP 1207.01 et seq. See the enclosed registrations.
The applicants mark is EASY MONEY JACKPOT for gaming devices, namely, computer software for use with gaming machines to
enable the gaming machine to run in International Class 9 and gaming devices, namely, gaming machines, slot machines, bingo machines,
with or without video output. The two cited marks owned by the same registrant are DOUBLE EASY MONEY for currency and credit
operated slot machines and gaming devices, namely, gaming machines for use in gaming establishments in International Class 9 and SUPER
EASY MONEY for Gaming machines that generate or display wager outcomes; Gaming software that generates or displays wager outcomes
of gaming machines in International Class 9.
Trademark Act Section 2(d) bars registration of an applied-for mark that so resembles a registered mark that it is likely a potential consumer
would be confused, mistaken, or deceived as to the source of the goods and/or services of the applicant and registrant. See 15 U.S.C. 1052(d).
A determination of likelihood of confusion under Section 2(d) is made on a case-by case basis and the factors set forth in In re E. I. du Pont de
Nemours & Co., 476 F.2d 1357, 1361, 177 USPQ 563, 567 (C.C.P.A. 1973) aid in this determination. Citigroup Inc. v. Capital City Bank Grp.,
Inc., 637 F.3d 1344, 1349, 98 USPQ2d 1253, 1256 (Fed. Cir. 2011) (citing On-Line Careline, Inc. v. Am. Online, Inc., 229 F.3d 1080, 1085, 56
USPQ2d 1471, 1474 (Fed. Cir. 2000)). Not all the du Pont factors, however, are necessarily relevant or of equal weight, and any one of the
factors may control in a given case, depending upon the evidence of record. Citigroup Inc. v. Capital City Bank Grp., Inc., 637 F.3d at 1355, 98
USPQ2d at 1260; In re Majestic Distilling Co., 315 F.3d 1311, 1315, 65 USPQ2d 1201, 1204 (Fed. Cir. 2003); see In re E. I. du Pont de
Nemours & Co., 476 F.2d at 1361-62, 177 USPQ at 567.
In this case, the following factors are the most relevant: similarity of the marks, similarity and nature of the goods and/or services, and similarity
of the trade channels of the goods and/or services. See In re Viterra Inc., 671 F.3d 1358, 1361-62, 101 USPQ2d 1905, 1908 (Fed. Cir. 2012); In
re Dakins Miniatures Inc. , 59 USPQ2d 1593, 1595-96 (TTAB 1999); TMEP 1207.01 et seq.
Similarity of the Marks
The applicants mark is EASY MONEY JACKPOT. The two cited marks owned by the same registrant are DOUBLE EASY MONEY
and SUPER EASY MONEY. The marks are highly similar because they share the identical wording EASY MONEY.
The mere deletion of wording from a registered mark may not be sufficient to overcome a likelihood of confusion. See In re Mighty Leaf Tea,
601 F.3d 1342, 94 USPQ2d 1257 (Fed. Cir. 2010); In re Optica Intl , 196 USPQ 775, 778 (TTAB 1977); TMEP 1207.01(b)(ii)-(iii).
Applicants mark does not create a distinct commercial impression because it contains the same common wording as the registered mark, and
there is no other wording to distinguish it from the registered mark.
Moreover, the added wording JACKPOT is merely descriptive in the context of the applicants goods. Although marks are compared in their
entireties, one feature of a mark may be more significant or dominant in creating a commercial impression. See In re Viterra Inc., 671 F.3d 1358,
1362, 101 USPQ2d 1905, 1908 (Fed. Cir. 2012); In re Natl Data Corp., 753 F.2d 1056, 1058, 224 USPQ 749, 751 (Fed. Cir. 1985); TMEP
1207.01(b)(viii), (c)(ii). Matter that is descriptive of or generic for a partys goods and/or services is typically less significant or less dominant
in relation to other wording in a mark. See Anheuser-Busch, LLC v. Innvopak Sys. Pty Ltd., 115 USPQ2d 1816, 1824-25 (TTAB 2015) (citing In
re Chatam Intl Inc. , 380 F.3d 1340, 1342-43, 71 USPQ2d 1944, 1946 (Fed. Cir. 2004)).
In the present case, the previously attached evidence shows that the wording JACKPOT in the applied-for mark is merely descriptive of or
generic for applicants goods. Thus, this wording is less significant in terms of affecting the marks commercial impression, and renders the
wording EASY MONEY the more dominant element of the mark.
Marks are compared in their entireties for similarities in appearance, sound, connotation, and commercial impression. Stone Lion Capital
Partners, LP v. Lion Capital LLP, 746 F.3d 1317, 1321, 110 USPQ2d 1157, 1160 (Fed. Cir. 2014) (quoting Palm Bay Imps., Inc. v. Veuve
Clicquot Ponsardin Maison Fondee En 1772, 396 F. 3d 1369, 1371, 73 USPQ2d 1689, 1691 (Fed. Cir. 2005)); TMEP 1207.01(b)-(b)(v).
Similarity in any one of these elements may be sufficient to find the marks confusingly similar. In re Davia, 110 USPQ2d 1810, 1812 (TTAB
2014) (citing In re 1st USA Realty Profls, Inc. , 84 USPQ2d 1581, 1586 (TTAB 2007)); In re White Swan Ltd., 8 USPQ2d 1534, 1535 (TTAB
1988)); TMEP 1207.01(b).
Since the marks are highly similar in in sound and meaning, they impart a confusingly similar commercial impression.

Exhibit Q, pg. 3

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 5 of 60

Relatedness of the Goods


The applicants goods are gaming devices, namely, computer software for use with gaming machines to enable the gaming machine to run in
International Class 9 and gaming devices, namely, gaming machines, slot machines, bingo machines, with or without video output. The goods
for the first cited mark DOUBLE EASY MONEY is for currency and credit operated slot machines and gaming devices, namely, gaming
machines for use in gaming establishments in International Class 9 and the goods for the second cited mark SUPER EASY MONEY is for
Gaming machines that generate or display wager outcomes; Gaming software that generates or displays wager outcomes of gaming machines
in International Class 9.
The goods and/or services of the parties need not be identical or even competitive to find a likelihood of confusion. See On-line Careline Inc. v.
Am. Online Inc., 229 F.3d 1080, 1086, 56 USPQ2d 1471, 1475 (Fed. Cir. 2000); Recot, Inc. v. Becton, 214 F.3d 1322, 1329, 54 USPQ2d 1894,
1898 (Fed. Cir. 2000) ([E]ven if the goods in question are different from, and thus not related to, one another in kind, the same goods can be
related in the mind of the consuming public as to the origin of the goods.); TMEP 1207.01(a)(i).
The respective goods and/or services need only be related in some manner and/or if the circumstances surrounding their marketing [be] such
that they could give rise to the mistaken belief that [the goods and/or services] emanate from the same source. Coach Servs., Inc. v. Triumph
Learning LLC, 668 F.3d 1356, 1369, 101 USPQ2d 1713, 1722 (Fed. Cir. 2012) (quoting 7-Eleven Inc. v. Wechsler, 83 USPQ2d 1715, 1724
(TTAB 2007)); TMEP 1207.01(a)(i).
In the present case, the applicants goods and the registrants goods are closely relate because they are all gaming devices likely to come from a
common source.
The trademark examining attorney has attached evidence from the USPTOs X-Search database consisting of a number of third-party marks
registered for use in connection with the same or similar goods and/or services as those of both applicant and registrant in this case. This
evidence shows that the goods and/or services listed therein, namely, general gaming machines, slot machines, gaming software, computer
software for gaming, and bingo machines, are of a kind that may emanate from a single source under a single mark. See In re Aquamar, Inc., 115
USPQ2d 1122, 1126 n.5 (TTAB 2015) (citing In re Mucky Duck Mustard Co., 6 USPQ2d 1467, 1470 n.6 (TTAB 1988)); In re Albert Trostel &
Sons Co., 29 USPQ2d 1783, 1785-86 (TTAB 1993); TMEP 1207.01(d)(iii).
Purchasers of applicants goods could mistakenly assume such goods were produced by registrant, or that applicant and registrant are related in
some way. Because the marks are highly similar and the goods are closely related, the similarities among the marks and the goods are so great
as to create a likelihood of confusion among consumers as to the source of the goods.
The overriding concern is not only to prevent buyer confusion as to the source of the goods and/or services, but to protect the registrant from
adverse commercial impact due to use of a similar mark by a newcomer. See In re Shell Oil Co., 992 F.2d 1204, 1208, 26 USPQ2d 1687, 1690
(Fed. Cir. 1993). Therefore, any doubt regarding a likelihood of confusion determination is resolved in favor of the registrant. TMEP
1207.01(d)(i); see Hewlett-Packard Co. v. Packard Press, Inc., 281 F.3d 1261, 1265, 62 USPQ2d 1001, 1003 (Fed. Cir. 2002); In re Hyper
Shoppes (Ohio), Inc., 837 F.2d 463, 464-65, 6 USPQ2d 1025, 1026 (Fed. Cir. 1988).
Accordingly, since the marks are confusingly similar and the goods are closely related, there is a likelihood of confusion and registration must be
refused under Section 2(d) of the Trademark Act.
Although applicants mark has been refused registration, applicant may respond to the refusal(s) by submitting evidence and arguments in
support of registration.
If applicant responds to the refusal(s), applicant must also respond to the requirement(s) set forth below.
Disclaimer Required
As previously stated, the applicant must disclaim the wording JACKPOT because it merely describes an ingredient, quality, characteristic,
function, feature, purpose, or use of applicants goods and/or services, and thus is an unregistrable component of the mark. See 15 U.S.C.

Exhibit Q, pg. 4

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 6 of 60


1052(e)(1), 1056(a); DuoProSS Meditech Corp. v. Inviro Med. Devices, Ltd., 695 F.3d 1247, 1251, 103 USPQ2d 1753, 1755 (Fed. Cir. 2012)
(quoting In re Oppedahl & Larson LLP, 373 F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004)); TMEP 1213, 1213.03(a).
As the previously attached Merriam-Webster online dictionary definition supports, the wording jackpot means a large amount of money
won in a game of chance. Accordingly, the proposed wording when used in connection with the applicants gaming goods immediately
conveys that the applicants gaming devices and machines have large payout amounts.
Also see previously attached third-party registrations containing the wording JACKPOT in which the wording JACKPOT is disclaimed in
connection with similar gaming related goods as the applicants goods. Third-party registrations featuring goods and/or services the same as or
similar to applicants goods and/or services are probative evidence on the issue of descriptiveness where the relevant word or term is
disclaimed, registered under Trademark Act Section 2(f) based on acquired distinctiveness, or registered on the Supplemental Register. See Inst.
Natl des Appellations DOrigine v. Vintners Intl Co. , 958 F.2d 1574, 1581-82, 22 USPQ2d 1190, 1196 (Fed. Cir. 1992); In re Box Solutions
Corp., 79 USPQ2d 1953, 1955 (TTAB 2006); In re Finisar Corp., 78 USPQ2d 1618, 1621 (TTAB 2006). Moreover, also attached is the
applicants own prior registration (U.S. Registration No. 4261722) in which the wording JACKPOTS is disclaimed for gaming goods.
Here, the dictionary definition, third-party registrations with the wording JACKPOT disclaimed and the applicants own prior disclaimer of
the wording JACKPOTS support that the wording JACKPOT is descriptive in the context of the applicants goods. Accordingly, the
requirement to disclaim the descriptive wording JACKPOT is continued and maintained .
An applicant may not claim exclusive rights to terms that others may need to use to describe their goods and/or services in the marketplace. See
Dena Corp. v. Belvedere Intl, Inc., 950 F.2d 1555, 1560, 21 USPQ2d 1047, 1051 (Fed. Cir. 1991); In re Aug. Storck KG, 218 USPQ 823, 825
(TTAB 1983). A disclaimer of unregistrable matter does not affect the appearance of the mark; that is, a disclaimer does not physically remove
the disclaimed matter from the mark. See Schwarzkopf v. John H. Breck, Inc., 340 F.2d 978, 978, 144 USPQ 433, 433 (C.C.P.A. 1965); TMEP
1213.
If applicant does not provide the required disclaimer, the USPTO may refuse to register the entire mark. See In re Stereotaxis Inc., 429 F.3d
1039, 1040-41, 77 USPQ2d 1087, 1088-89 (Fed. Cir. 2005); TMEP 1213.01(b).
Applicant should submit a disclaimer in the following standardized format:
No claim is made to the exclusive right to use JACKPOT apart from the mark as shown.
For an overview of disclaimers and instructions on how to satisfy this disclaimer requirement online using the Trademark Electronic Application
System (TEAS) form, please go to http://www.uspto.gov/trademarks/law/disclaimer.jsp.
Response to Office Action
For this application to proceed toward registration, applicant must explicitly address each refusal and/or requirement raised in this Office action.
If the action includes a refusal, applicant may provide arguments and/or evidence as to why the refusal should be withdrawn and the mark should
register. Applicant may also have other options for responding to a refusal and should consider such options carefully. To respond to
requirements and certain refusal response options, applicant should set forth in writing the required changes or statements.
If applicant does not respond to this Office action within six months of the issue/mailing date, or responds by expressly abandoning the
application, the application process will end, the trademark will fail to register, and the application fee will not be refunded. See 15 U.S.C.
1062(b); 37 C.F.R. 2.65(a), 2.68(a), 2.209(a); TMEP 405.04, 718.01, 718.02. Where the application has been abandoned for failure to
respond to an Office action, applicants only option would be to file a timely petition to revive the application, which, if granted, would allow
the application to return to active status. See 37 C.F.R. 2.66; TMEP 1714. There is a $100 fee for such petitions. See 37 C.F.R. 2.6,
2.66(b)(1).
If applicant has questions regarding this Office action, please telephone or e-mail the assigned trademark examining attorney. All relevant email communications will be placed in the official application record; however, an e-mail communication will not be accepted as a response to
this Office action and will not extend the deadline for filing a proper response. See 37 C.F.R. 2.62(c), 2.191; TMEP 304.01-.02, 709.04.05. Further, although the trademark examining attorney may provide additional explanation pertaining to the refusal(s) and/or requirement(s) in
this Office action, the trademark examining attorney may not provide legal advice or statements about applicants rights. See TMEP 705.02,
709.06.

Exhibit Q, pg. 5

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 7 of 60

/Jenny Park/
Examining Attorney
Law Office 104
571-272-8857
jenny.park@uspto.gov
TO RESPOND TO THIS LETTER: Go to http://www.uspto.gov/trademarks/teas/response_forms.jsp. Please wait 48-72 hours from the
issue/mailing date before using the Trademark Electronic Application System (TEAS), to allow for necessary system updates of the application.
For technical assistance with online forms, e-mail TEAS@uspto.gov. For questions about the Office action itself, please contact the assigned
trademark examining attorney. E-mail communications will not be accepted as responses to Office actions; therefore, do not respond to
this Office action by e-mail.

All informal e-mail communications relevant to this application will be placed in the official application record.
WHO MUST SIGN THE RESPONSE: It must be personally signed by an individual applicant or someone with legal authority to bind an
applicant (i.e., a corporate officer, a general partner, all joint applicants). If an applicant is represented by an attorney, the attorney must sign the
response.
PERIODICALLY CHECK THE STATUS OF THE APPLICATION: To ensure that applicant does not miss crucial deadlines or official
notices, check the status of the application every three to four months using the Trademark Status and Document Retrieval (TSDR) system at
http://tsdr.uspto.gov/. Please keep a copy of the TSDR status screen. If the status shows no change for more than six months, contact the
Trademark Assistance Center by e-mail at TrademarkAssistanceCenter@uspto.gov or call 1-800-786-9199. For more information on checking
status, see http://www.uspto.gov/trademarks/process/status/.
TO UPDATE CORRESPONDENCE/E-MAIL ADDRESS: Use the TEAS form at http://www.uspto.gov/trademarks/teas/correspondence.jsp.

Exhibit Q, pg. 6

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Exhibit Q, pg. 7

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 9 of 60

Exhibit Q, pg. 8

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 10 of 60

Exhibit Q, pg. 9

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Exhibit Q, pg. 10

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Exhibit Q, pg. 11

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Exhibit Q, pg. 12

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Exhibit Q, pg. 13

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Exhibit Q, pg. 14

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Exhibit Q, pg. 15

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Exhibit Q, pg. 16

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Exhibit Q, pg. 17

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Exhibit Q, pg. 18

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Exhibit Q, pg. 19

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Exhibit Q, pg. 20

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Exhibit Q, pg. 21

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Exhibit Q, pg. 22

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Exhibit Q, pg. 23

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Exhibit Q, pg. 24

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 26 of 60

Exhibit Q, pg. 25

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 27 of 60

Exhibit Q, pg. 26

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 28 of 60

Exhibit Q, pg. 27

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 29 of 60

Exhibit Q, pg. 28

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 30 of 60

Exhibit Q, pg. 29

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 31 of 60

Exhibit Q, pg. 30

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 32 of 60

Exhibit Q, pg. 31

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 33 of 60

Exhibit Q, pg. 32

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 34 of 60

Exhibit Q, pg. 33

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 35 of 60

Exhibit Q, pg. 34

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 36 of 60

Exhibit Q, pg. 35

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 37 of 60

Exhibit Q, pg. 36

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 38 of 60

Exhibit Q, pg. 37

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 39 of 60

Exhibit Q, pg. 38

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 40 of 60

Exhibit Q, pg. 39

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 41 of 60

Exhibit Q, pg. 40

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 42 of 60

Exhibit Q, pg. 41

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 43 of 60

Exhibit Q, pg. 42

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 44 of 60

Exhibit Q, pg. 43

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 45 of 60

Exhibit Q, pg. 44

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 46 of 60

Exhibit Q, pg. 45

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 47 of 60

Exhibit Q, pg. 46

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 48 of 60

Exhibit Q, pg. 47

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 49 of 60

Exhibit Q, pg. 48

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 50 of 60

Exhibit Q, pg. 49

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 51 of 60

Exhibit Q, pg. 50

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 52 of 60

Exhibit Q, pg. 51

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 53 of 60

Exhibit Q, pg. 52

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 54 of 60

Exhibit Q, pg. 53

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 55 of 60

Exhibit Q, pg. 54

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 56 of 60

Exhibit Q, pg. 55

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 57 of 60

Exhibit Q, pg. 56

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 58 of 60

Exhibit Q, pg. 57

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 59 of 60

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86525799 - EASY MONEY JACKPOT - T0325-001 /

Sent:

2/2/2016 2:37:57 PM

Sent As:

ECOM104@USPTO.GOV

Attachments:

UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)

IMPORTANT NOTICE REGARDING YOUR


U.S. TRADEMARK APPLICATION
USPTO OFFICE ACTION (OFFICIAL LETTER) HAS ISSUED
ON 2/2/2016 FOR U.S. APPLICATION SERIAL NO. 86525799
Please follow the instructions below:
(1) TO READ THE LETTER: Click on this link or go to http://tsdr.uspto.gov, enter the U.S. application serial number, and click on
Documents.
The Office action may not be immediately viewable, to allow for necessary system updates of the application, but will be available within 24
hours of this e-mail notification.
(2) TIMELY RESPONSE IS REQUIRED: Please carefully review the Office action to determine (1) how to respond, and (2) the applicable
response time period. Your response deadline will be calculated from 2/2/2016 (or sooner if specified in the Office action). For information
regarding response time periods, see http://www.uspto.gov/trademarks/process/status/responsetime.jsp.
Do NOT hit Reply to this e-mail notification, or otherwise e-mail your response because the USPTO does NOT accept e-mails as
responses to Office actions. Instead, the USPTO recommends that you respond online using the Trademark Electronic Application System
(TEAS) response form located at http://www.uspto.gov/trademarks/teas/response_forms.jsp.
(3) QUESTIONS: For questions about the contents of the Office action itself, please contact the assigned trademark examining attorney. For
technical assistance in accessing or viewing the Office action in the Trademark Status and Document Retrieval (TSDR) system, please e-mail
TSDR@uspto.gov.

WARNING
Failure to file the required response by the applicable response deadline will result in the ABANDONMENT of your application. For
more information regarding abandonment, see http://www.uspto.gov/trademarks/basics/abandon.jsp.
PRIVATE COMPANY SOLICITATIONS REGARDING YOUR APPLICATION: Private companies not associated with the USPTO are
using information provided in trademark applications to mail or e-mail trademark-related solicitations. These companies often use names that
closely resemble the USPTO and their solicitations may look like an official government document. Many solicitations require that you pay

Exhibit Q, pg. 58

Case 2:16-cv-02359 Document 1-21 Filed 10/10/16 Page 60 of 60


fees.
Please carefully review all correspondence you receive regarding this application to make sure that you are responding to an official document
from the USPTO rather than a private company solicitation. All official USPTO correspondence will be mailed only from the United States
Patent and Trademark Office in Alexandria, VA; or sent by e-mail from the domain @uspto.gov. For more information on how to handle
private company solicitations, see http://www.uspto.gov/trademarks/solicitation_warnings.jsp.

Exhibit Q, pg. 59

Case 2:16-cv-02359 Document 1-22 Filed 10/10/16 Page 1 of 4

EXHIBIT R
Notice of Abandonment of U.S. Trademark
Application Serial No. 86525799 for EASY
MONEY JACKPOT

Case 2:16-cv-02359 Document 1-22 Filed 10/10/16 Page 2 of 4

Side - 1

NOTICE OF ABANDONMENT
MAILING DATE: Aug 2, 2016

The trademark application identified below was abandoned because Applicant's letter of express abandonment was received on Aug 1, 2016 .

SERIAL NUMBER:
MARK:
OWNER:

86525799
EASY MONEY JACKPOT
Video Gaming Technologies, Inc.

Side - 2
UNITED STATES PATENT AND TRADEMARK OFFICE
COMMISSIONER FOR TRADEMARKS
P.O. BOX 1451
ALEXANDRIA, VA 22313-1451

FIRST-CLASS MAIL
U.S POSTAGE
PAID

COURTNEY JACKSON
Armstrong Teasdale
7700 Forsyth Blvd Ste 1800
Saint Louis , MO 63105-1847

Exhibit R, pg. 1

Case 2:16-cv-02359 Document 1-22 Filed 10/10/16 Page 3 of 4

PTO Form 2202 (Rev 09/2004)


OMB No. 0651-0054 (Exp 10/31/2017)

Request for Express Abandonment

The table below presents the data as entered.


Input Field

Entered

SERIAL NUMBER

86525799

LAW OFFICE ASSIGNED

LAW OFFICE 104

PUBLISH FOR OPPOSITION DATE

00/00/0000

MARK SECTION
MARK

EASY MONEY JACKPOT

REQUEST FOR EXPRESS ABANDONMENT SECTION


STATEMENT

The applicant hereby expressly abandons the application for trademark


registration made under the serial number identified above.

SIGNATURE SECTION
SIGNATURE

/Keith D. Moore/

SIGNATORY NAME

Keith D. Moore

SIGNATORY DATE

08/01/2016

SIGNATORY POSITION

Director of IP

SIGNATORY PHONE NUMBER

314-621-5070

AUTHORIZED SIGNATORY

YES

FILING INFORMATION SECTION


SUBMIT DATE

Mon Aug 01 12:06:47 EDT 2016

TEAS STAMP

USPTO/REA-XXX.XX.XX.XXX-2
0160801120647580342-86525
799-550b94e74b230479ec165
86226c087dd7fbde58ad94766
5864e3f52eee2faf5db-N/A-N
/A-20160801110952581375

Exhibit R, pg. 2

Case 2:16-cv-02359 Document 1-22 Filed 10/10/16 Page 4 of 4

PTO Form 2202 (Rev 09/2004)


OMB No. 0651-0054 (Exp 10/31/2017)

Request for Express Abandonment


To the Commissioner for Trademarks:
MARK: EASY MONEY JACKPOT
SERIAL NUMBER: 86525799

By submission of this request, the applicant hereby expressly abandons the application for trademark registration made under the serial number
identified above. Except as provided in 37 C.F.R Section 2.135. (concerning the commencement of an opposition, concurrent use, or interference
proceeding), the fact that an application has been expressly abandoned shall not, in any proceeding in the United State Patent and Trademark
Office, affect any right that the applicant may have in the mark which is the subject of the abandoned application.

Signature: /Keith D. Moore/


Date: 08/01/2016
Signatory's Name: Keith D. Moore
Signatory's Position: Director of IP
The signatory has confirmed that he/she is an attorney who is a member in good standing of the bar of the highest court of a U.S. state, which
includes the District of Columbia, Puerto Rico, and other federal territories and possessions; and he/she is currently the applicant's attorney or an
associate thereof; and to the best of his/her knowledge, if prior to his/her appointment another U.S. attorney or a Canadian attorney/agent not
currently associated with his/her company/firm previously represented the applicant in this matter: (1) the applicant has filed or is concurrently
filing a signed revocation of or substitute power of attorney with the USPTO; (2) the USPTO has granted the request of the prior representative to
withdraw; (3) the applicant has filed a power of attorney appointing him/her in this matter; or (4) the applicant's appointed U.S. attorney or
Canadian attorney/agent has filed a power of attorney appointing him/her as an associate attorney in this matter.

Serial Number: 86525799


Internet Transmission Date: Mon Aug 01 12:06:47 EDT 2016
TEAS Stamp: USPTO/REA-XXX.XX.XX.XXX-2016080112064758
0342-86525799-550b94e74b230479ec16586226
c087dd7fbde58ad947665864e3f52eee2faf5dbN/A-N/A-20160801110952581375

Exhibit R, pg. 3

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 1 of 7

EXHIBIT S
U.S. Trademark Application Serial No. 86958109
for POLAR HIGH ROLLER EASY MONEY
JACKPOT

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 2 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958109
Filing Date: 03/30/2016

The table below presents the data as entered.


Input Field
SERIAL NUMBER

Entered
86958109

MARK INFORMATION
*MARK

POLAR HIGH ROLLER EASY MONEY JACKPOT

STANDARD CHARACTERS

YES

USPTO-GENERATED IMAGE

YES

LITERAL ELEMENT

POLAR HIGH ROLLER EASY MONEY JACKPOT

MARK STATEMENT

The mark consists of standard characters, without claim to any


particular font, style, size, or color.

REGISTER

Principal

APPLICANT INFORMATION
*OWNER OF MARK

Video Gaming Technologies, Inc.

*STREET

308 Mallory Station Road

*CITY

Franklin

*STATE
(Required for U.S. applicants)

Tennessee

*COUNTRY

United States

*ZIP/POSTAL CODE
(Required for U.S. applicants)

63105

PHONE

615-372-1000

FAX

615-372-1099

EMAIL ADDRESS

ip@vgt.net

LEGAL ENTITY INFORMATION


TYPE

corporation

STATE/COUNTRY OF INCORPORATION

Tennessee

GOODS AND/OR SERVICES AND BASIS INFORMATION


INTERNATIONAL CLASS

028

*IDENTIFICATION

Gaming devices, namely, gaming machines, bingo machines,


with or without video output

FILING BASIS

SECTION 1(b)

ADDITIONAL STATEMENTS SECTION


ACTIVE PRIOR REGISTRATION(S)

The applicant claims ownership of active prior U.S.


Registration Number(s) 3755296.

Exhibit S, pg. 1

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 3 of 7

ATTORNEY INFORMATION
NAME

Courtney Jackson

ATTORNEY DOCKET NUMBER

30711-TBD

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

EMAIL ADDRESS

iptm@armstrongteasdale.com

AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

OTHER APPOINTED ATTORNEY

Donna F. Schmitt, Robert B. Reeser

CORRESPONDENCE INFORMATION
NAME

Courtney Jackson

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

*EMAIL ADDRESS

iptm@armstrongteasdale.com;ip@vgt.net

*AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

FEE INFORMATION
APPLICATION FILING OPTION

TEAS RF

NUMBER OF CLASSES

FEE PER CLASS

275

*TOTAL FEE DUE

275

*TOTAL FEE PAID

275

SIGNATURE INFORMATION
SIGNATURE

/Keith D. Moore/

SIGNATORY'S NAME

Keith D. Moore

SIGNATORY'S POSITION

Director of IP

SIGNATORY'S PHONE NUMBER

314-621-5070

Exhibit S, pg. 2

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 4 of 7


DATE SIGNED

03/30/2016

Exhibit S, pg. 3

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 5 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958109
Filing Date: 03/30/2016

To the Commissioner for Trademarks:


MARK: POLAR HIGH ROLLER EASY MONEY JACKPOT (Standard Characters, see mark)
The literal element of the mark consists of POLAR HIGH ROLLER EASY MONEY JACKPOT.
The mark consists of standard characters, without claim to any particular font, style, size, or color.
The applicant, Video Gaming Technologies, Inc., a corporation of Tennessee, having an address of
308 Mallory Station Road
Franklin, Tennessee 63105
United States
615-372-1000(phone)
615-372-1099(fax)
ip@vgt.net (not authorized)
requests registration of the trademark/service mark identified above in the United States Patent and Trademark Office on the Principal Register
established by the Act of July 5, 1946 (15 U.S.C. Section 1051 et seq.), as amended, for the following:
International Class 028: Gaming devices, namely, gaming machines, bingo machines, with or without video output
Intent to Use: The applicant has a bona fide intention, and is entitled, to use the mark in commerce on or in connection with the identified
goods/services.

Claim of Active Prior Registration(s)


The applicant claims ownership of active prior U.S. Registration Number(s) 3755296.
The applicant's current Attorney Information:
Courtney Jackson and Donna F. Schmitt, Robert B. Reeser of Armstrong Teasdale LLP
St. Louis, Missouri 63105
United States
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com (authorized)
The attorney docket/reference number is 30711-TBD.

7700 Forsyth Blvd., Suite 1800

The applicant's current Correspondence Information:


Courtney Jackson
Armstrong Teasdale LLP
7700 Forsyth Blvd., Suite 1800
St. Louis, Missouri 63105
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com;ip@vgt.net (authorized)
E-mail Authorization: I authorize the USPTO to send e-mail correspondence concerning the application to the applicant or applicant's attorney
at the e-mail address provided above. I understand that a valid e-mail address must be maintained and that the applicant or the applicant's
attorney must file the relevant subsequent application-related submissions via the Trademark Electronic Application System (TEAS). Failure to
do so will result in an additional processing fee of $50 per international class of goods/services.
A fee payment in the amount of $275 has been submitted with the application, representing payment for 1 class(es).
Declaration

Exhibit S, pg. 4

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 6 of 7

The signatory believes that: if the applicant is filing the application under 15 U.S.C. 1051(a), the applicant is the owner of the
trademark/service mark sought to be registered; the applicant is using the mark in commerce on or in connection with the goods/services in the
application; the specimen(s) shows the mark as used on or in connection with the goods/services in the application; and/or if the applicant filed
an application under 15 U.S.C. 1051(b), 1126(d), and/or 1126(e), the applicant is entitled to use the mark in commerce; the applicant has a
bona fide intention, and is entitled, to use the mark in commerce on or in connection with the goods/services in the application. The signatory
believes that to the best of the signatory's knowledge and belief, no other persons, except, if applicable, concurrent users, have the right to use the
mark in commerce, either in the identical form or in such near resemblance as to be likely, when used on or in connection with the goods/services
of such other persons, to cause confusion or mistake, or to deceive. The signatory being warned that willful false statements and the like are
punishable by fine or imprisonment, or both, under 18 U.S.C. 1001, and that such willful false statements and the like may jeopardize the
validity of the application or any registration resulting therefrom, declares that all statements made of his/her own knowledge are true and all
statements made on information and belief are believed to be true.
Declaration Signature
Signature: /Keith D. Moore/ Date: 03/30/2016
Signatory's Name: Keith D. Moore
Signatory's Position: Director of IP
RAM Sale Number: 86958109
RAM Accounting Date: 03/31/2016
Serial Number: 86958109
Internet Transmission Date: Wed Mar 30 14:08:40 EDT 2016
TEAS Stamp: USPTO/BAS-XXX.XX.XX.XXX-2016033014084097
9492-86958109-550288871acaefcd74c9629e53
563e61033704d77df3e226eb0f24a365151a3c3f
b-DA-398-20160329123133059653

Exhibit S, pg. 5

Case 2:16-cv-02359 Document 1-23 Filed 10/10/16 Page 7 of 7

Exhibit S, pg. 6

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 1 of 7

EXHIBIT T
U.S. Trademark Application Serial No. 86958118
for HOT RED RUBY EASY MONEY JACKPOT

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 2 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958118
Filing Date: 03/30/2016

The table below presents the data as entered.


Input Field
SERIAL NUMBER

Entered
86958118

MARK INFORMATION
*MARK

HOT RED RUBY EASY MONEY JACKPOT

STANDARD CHARACTERS

YES

USPTO-GENERATED IMAGE

YES

LITERAL ELEMENT

HOT RED RUBY EASY MONEY JACKPOT

MARK STATEMENT

The mark consists of standard characters, without claim to any


particular font, style, size, or color.

REGISTER

Principal

APPLICANT INFORMATION
*OWNER OF MARK

Video Gaming Technologies, Inc.

*STREET

308 Mallory Station Road

*CITY

Franklin

*STATE
(Required for U.S. applicants)

Tennessee

*COUNTRY

United States

*ZIP/POSTAL CODE
(Required for U.S. applicants)

37067

PHONE

615-372-1000

FAX

615-372-1099

EMAIL ADDRESS

ip@vgt.net

LEGAL ENTITY INFORMATION


TYPE

corporation

STATE/COUNTRY OF INCORPORATION

Tennessee

GOODS AND/OR SERVICES AND BASIS INFORMATION


INTERNATIONAL CLASS

028

*IDENTIFICATION

Gaming devices, namely, gaming machines, bingo machines,


with or without video output

FILING BASIS

SECTION 1(b)

ADDITIONAL STATEMENTS SECTION


ACTIVE PRIOR REGISTRATION(S)

The applicant claims ownership of active prior U.S.


Registration Number(s) 3172016.

Exhibit T, pg. 1

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 3 of 7

ATTORNEY INFORMATION
NAME

Courtney Jackson

ATTORNEY DOCKET NUMBER

30711-TBD

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

EMAIL ADDRESS

iptm@armstrongteasdale.com

AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

OTHER APPOINTED ATTORNEY

Donna F. Schmitt

CORRESPONDENCE INFORMATION
NAME

Courtney Jackson

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

*EMAIL ADDRESS

iptm@armstrongteasdale.com;ip@vgt.net

*AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

FEE INFORMATION
APPLICATION FILING OPTION

TEAS RF

NUMBER OF CLASSES

FEE PER CLASS

275

*TOTAL FEE DUE

275

*TOTAL FEE PAID

275

SIGNATURE INFORMATION
SIGNATURE

/Keith D. Moore/

SIGNATORY'S NAME

Keith D. Moore

SIGNATORY'S POSITION

Director of IP

SIGNATORY'S PHONE NUMBER

314-621-5070

Exhibit T, pg. 2

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 4 of 7


DATE SIGNED

03/30/2016

Exhibit T, pg. 3

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 5 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958118
Filing Date: 03/30/2016

To the Commissioner for Trademarks:


MARK: HOT RED RUBY EASY MONEY JACKPOT (Standard Characters, see mark)
The literal element of the mark consists of HOT RED RUBY EASY MONEY JACKPOT.
The mark consists of standard characters, without claim to any particular font, style, size, or color.
The applicant, Video Gaming Technologies, Inc., a corporation of Tennessee, having an address of
308 Mallory Station Road
Franklin, Tennessee 37067
United States
615-372-1000(phone)
615-372-1099(fax)
ip@vgt.net (not authorized)
requests registration of the trademark/service mark identified above in the United States Patent and Trademark Office on the Principal Register
established by the Act of July 5, 1946 (15 U.S.C. Section 1051 et seq.), as amended, for the following:
International Class 028: Gaming devices, namely, gaming machines, bingo machines, with or without video output
Intent to Use: The applicant has a bona fide intention, and is entitled, to use the mark in commerce on or in connection with the identified
goods/services.

Claim of Active Prior Registration(s)


The applicant claims ownership of active prior U.S. Registration Number(s) 3172016.
The applicant's current Attorney Information:
Courtney Jackson and Donna F. Schmitt of Armstrong Teasdale LLP
St. Louis, Missouri 63105
United States
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com (authorized)
The attorney docket/reference number is 30711-TBD.

7700 Forsyth Blvd., Suite 1800

The applicant's current Correspondence Information:


Courtney Jackson
Armstrong Teasdale LLP
7700 Forsyth Blvd., Suite 1800
St. Louis, Missouri 63105
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com;ip@vgt.net (authorized)
E-mail Authorization: I authorize the USPTO to send e-mail correspondence concerning the application to the applicant or applicant's attorney
at the e-mail address provided above. I understand that a valid e-mail address must be maintained and that the applicant or the applicant's
attorney must file the relevant subsequent application-related submissions via the Trademark Electronic Application System (TEAS). Failure to
do so will result in an additional processing fee of $50 per international class of goods/services.
A fee payment in the amount of $275 has been submitted with the application, representing payment for 1 class(es).
Declaration

Exhibit T, pg. 4

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 6 of 7

The signatory believes that: if the applicant is filing the application under 15 U.S.C. 1051(a), the applicant is the owner of the
trademark/service mark sought to be registered; the applicant is using the mark in commerce on or in connection with the goods/services in the
application; the specimen(s) shows the mark as used on or in connection with the goods/services in the application; and/or if the applicant filed
an application under 15 U.S.C. 1051(b), 1126(d), and/or 1126(e), the applicant is entitled to use the mark in commerce; the applicant has a
bona fide intention, and is entitled, to use the mark in commerce on or in connection with the goods/services in the application. The signatory
believes that to the best of the signatory's knowledge and belief, no other persons, except, if applicable, concurrent users, have the right to use the
mark in commerce, either in the identical form or in such near resemblance as to be likely, when used on or in connection with the goods/services
of such other persons, to cause confusion or mistake, or to deceive. The signatory being warned that willful false statements and the like are
punishable by fine or imprisonment, or both, under 18 U.S.C. 1001, and that such willful false statements and the like may jeopardize the
validity of the application or any registration resulting therefrom, declares that all statements made of his/her own knowledge are true and all
statements made on information and belief are believed to be true.
Declaration Signature
Signature: /Keith D. Moore/ Date: 03/30/2016
Signatory's Name: Keith D. Moore
Signatory's Position: Director of IP
RAM Sale Number: 86958118
RAM Accounting Date: 03/31/2016
Serial Number: 86958118
Internet Transmission Date: Wed Mar 30 14:11:53 EDT 2016
TEAS Stamp: USPTO/BAS-XXX.XX.XX.XXX-2016033014115351
4556-86958118-550718a8a5e89a3c3d1f83025d
4fd8f7e8e7e3cec779bcf5e8a4ac97f7e79e7e-D
A-461-20160329124854843937

Exhibit T, pg. 5

Case 2:16-cv-02359 Document 1-24 Filed 10/10/16 Page 7 of 7

Exhibit T, pg. 6

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 1 of 7

EXHIBIT U
U.S. Trademark Application Serial No. 86958097
for LUCKY DUCKY EASY MONEY JACKPOT

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 2 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958097
Filing Date: 03/30/2016

The table below presents the data as entered.


Input Field
SERIAL NUMBER

Entered
86958097

MARK INFORMATION
*MARK

LUCKY DUCKY EASY MONEY JACKPOT

STANDARD CHARACTERS

YES

USPTO-GENERATED IMAGE

YES

LITERAL ELEMENT

LUCKY DUCKY EASY MONEY JACKPOT

MARK STATEMENT

The mark consists of standard characters, without claim to any


particular font, style, size, or color.

REGISTER

Principal

APPLICANT INFORMATION
*OWNER OF MARK

Video Gaming Technologies, Inc.

*STREET

308 Mallory Station Road

*CITY

Franklin

*STATE
(Required for U.S. applicants)

Tennessee

*COUNTRY

United States

*ZIP/POSTAL CODE
(Required for U.S. applicants)

37067

PHONE

615-372-1000

FAX

615-372-1099

EMAIL ADDRESS

ip@vgt.net

LEGAL ENTITY INFORMATION


TYPE

corporation

STATE/COUNTRY OF INCORPORATION

Tennessee

GOODS AND/OR SERVICES AND BASIS INFORMATION


INTERNATIONAL CLASS

028

*IDENTIFICATION

Gaming devices, namely, gaming machines, bingo machines,


with or without video output

FILING BASIS

SECTION 1(b)

ADDITIONAL STATEMENTS SECTION


ACTIVE PRIOR REGISTRATION(S)

The applicant claims ownership of active prior U.S.


Registration Number(s) 4274157, 4278098, and 3755296.

Exhibit U, pg. 1

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 3 of 7

ATTORNEY INFORMATION
NAME

Courtney Jackson

ATTORNEY DOCKET NUMBER

30711-TBD

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

EMAIL ADDRESS

iptm@armstrongteasdale.com

AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

OTHER APPOINTED ATTORNEY

Donna F. Schmitt

CORRESPONDENCE INFORMATION
NAME

Courtney Jackson

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

*EMAIL ADDRESS

iptm@armstrongteasdale.com;ip@vgt.net

*AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

FEE INFORMATION
APPLICATION FILING OPTION

TEAS RF

NUMBER OF CLASSES

FEE PER CLASS

275

*TOTAL FEE DUE

275

*TOTAL FEE PAID

275

SIGNATURE INFORMATION
SIGNATURE

/Keith D. Moore/

SIGNATORY'S NAME

Keith D. Moore

SIGNATORY'S POSITION

Director of IP

SIGNATORY'S PHONE NUMBER

314-621-5070

Exhibit U, pg. 2

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 4 of 7


DATE SIGNED

03/30/2016

Exhibit U, pg. 3

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 5 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958097
Filing Date: 03/30/2016

To the Commissioner for Trademarks:


MARK: LUCKY DUCKY EASY MONEY JACKPOT (Standard Characters, see mark)
The literal element of the mark consists of LUCKY DUCKY EASY MONEY JACKPOT.
The mark consists of standard characters, without claim to any particular font, style, size, or color.
The applicant, Video Gaming Technologies, Inc., a corporation of Tennessee, having an address of
308 Mallory Station Road
Franklin, Tennessee 37067
United States
615-372-1000(phone)
615-372-1099(fax)
ip@vgt.net (not authorized)
requests registration of the trademark/service mark identified above in the United States Patent and Trademark Office on the Principal Register
established by the Act of July 5, 1946 (15 U.S.C. Section 1051 et seq.), as amended, for the following:
International Class 028: Gaming devices, namely, gaming machines, bingo machines, with or without video output
Intent to Use: The applicant has a bona fide intention, and is entitled, to use the mark in commerce on or in connection with the identified
goods/services.

Claim of Active Prior Registration(s)


The applicant claims ownership of active prior U.S. Registration Number(s) 4274157, 4278098, and 3755296.
The applicant's current Attorney Information:
Courtney Jackson and Donna F. Schmitt of Armstrong Teasdale LLP
St. Louis, Missouri 63105
United States
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com (authorized)
The attorney docket/reference number is 30711-TBD.

7700 Forsyth Blvd., Suite 1800

The applicant's current Correspondence Information:


Courtney Jackson
Armstrong Teasdale LLP
7700 Forsyth Blvd., Suite 1800
St. Louis, Missouri 63105
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com;ip@vgt.net (authorized)
E-mail Authorization: I authorize the USPTO to send e-mail correspondence concerning the application to the applicant or applicant's attorney
at the e-mail address provided above. I understand that a valid e-mail address must be maintained and that the applicant or the applicant's
attorney must file the relevant subsequent application-related submissions via the Trademark Electronic Application System (TEAS). Failure to
do so will result in an additional processing fee of $50 per international class of goods/services.
A fee payment in the amount of $275 has been submitted with the application, representing payment for 1 class(es).
Declaration

Exhibit U, pg. 4

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 6 of 7

The signatory believes that: if the applicant is filing the application under 15 U.S.C. 1051(a), the applicant is the owner of the
trademark/service mark sought to be registered; the applicant is using the mark in commerce on or in connection with the goods/services in the
application; the specimen(s) shows the mark as used on or in connection with the goods/services in the application; and/or if the applicant filed
an application under 15 U.S.C. 1051(b), 1126(d), and/or 1126(e), the applicant is entitled to use the mark in commerce; the applicant has a
bona fide intention, and is entitled, to use the mark in commerce on or in connection with the goods/services in the application. The signatory
believes that to the best of the signatory's knowledge and belief, no other persons, except, if applicable, concurrent users, have the right to use the
mark in commerce, either in the identical form or in such near resemblance as to be likely, when used on or in connection with the goods/services
of such other persons, to cause confusion or mistake, or to deceive. The signatory being warned that willful false statements and the like are
punishable by fine or imprisonment, or both, under 18 U.S.C. 1001, and that such willful false statements and the like may jeopardize the
validity of the application or any registration resulting therefrom, declares that all statements made of his/her own knowledge are true and all
statements made on information and belief are believed to be true.
Declaration Signature
Signature: /Keith D. Moore/ Date: 03/30/2016
Signatory's Name: Keith D. Moore
Signatory's Position: Director of IP
RAM Sale Number: 86958097
RAM Accounting Date: 03/31/2016
Serial Number: 86958097
Internet Transmission Date: Wed Mar 30 14:05:02 EDT 2016
TEAS Stamp: USPTO/BAS-XXX.XX.XX.XXX-2016033014050293
5066-86958097-5507cfdefc5a8be1acfd6a070c
ddbc6a946f5c7679a9be84147a5a175d018e5b64
7-DA-335-20160329124003759148

Exhibit U, pg. 5

Case 2:16-cv-02359 Document 1-25 Filed 10/10/16 Page 7 of 7

Exhibit U, pg. 6

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 1 of 7

EXHIBIT V
U.S. Trademark Application Serial No. 86958093
for MR. MONEY BAGS EASY MONEY
JACKPOT

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 2 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958093
Filing Date: 03/30/2016

The table below presents the data as entered.


Input Field
SERIAL NUMBER

Entered
86958093

MARK INFORMATION
*MARK

MR. MONEY BAGS EASY MONEY JACKPOT

STANDARD CHARACTERS

YES

USPTO-GENERATED IMAGE

YES

LITERAL ELEMENT

MR. MONEY BAGS EASY MONEY JACKPOT

MARK STATEMENT

The mark consists of standard characters, without claim to any


particular font, style, size, or color.

REGISTER

Principal

APPLICANT INFORMATION
*OWNER OF MARK

Video Gaming Technologies, Inc.

*STREET

308 Mallory Station Road

*CITY

Franklin

*STATE
(Required for U.S. applicants)

Tennessee

*COUNTRY

United States

*ZIP/POSTAL CODE
(Required for U.S. applicants)

37067

PHONE

615-372-1000

FAX

615-372-1099

EMAIL ADDRESS

ip@vgt.net

LEGAL ENTITY INFORMATION


TYPE

corporation

STATE/COUNTRY OF INCORPORATION

Tennessee

GOODS AND/OR SERVICES AND BASIS INFORMATION


INTERNATIONAL CLASS

028

*IDENTIFICATION

Gaming devices, namely, gaming machines, bingo machines,


with or without video output

FILING BASIS

SECTION 1(b)

ADDITIONAL STATEMENTS SECTION


ACTIVE PRIOR REGISTRATION(S)

The applicant claims ownership of active prior U.S.


Registration Number(s) 4138672, 4306260, 3152743, and

Exhibit V, pg. 1

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 3 of 7


others.
ATTORNEY INFORMATION
NAME

Courtney Jackson

ATTORNEY DOCKET NUMBER

30711-TBD

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

EMAIL ADDRESS

iptm@armstrongteasdale.com

AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

OTHER APPOINTED ATTORNEY

Donna F. Schmitt, Robert B. Reeser

CORRESPONDENCE INFORMATION
NAME

Courtney Jackson

FIRM NAME

Armstrong Teasdale LLP

STREET

7700 Forsyth Blvd., Suite 1800

CITY

St. Louis

STATE

Missouri

COUNTRY

United States

ZIP/POSTAL CODE

63105

PHONE

314-621-5070

FAX

314-621-5065

*EMAIL ADDRESS

iptm@armstrongteasdale.com;ip@vgt.net

*AUTHORIZED TO COMMUNICATE VIA EMAIL

Yes

FEE INFORMATION
APPLICATION FILING OPTION

TEAS RF

NUMBER OF CLASSES

FEE PER CLASS

275

*TOTAL FEE DUE

275

*TOTAL FEE PAID

275

SIGNATURE INFORMATION
SIGNATURE

/Keith D. Moore/

SIGNATORY'S NAME

Keith D. Moore

SIGNATORY'S POSITION

Director of IP

SIGNATORY'S PHONE NUMBER

314-621-5070

Exhibit V, pg. 2

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 4 of 7

DATE SIGNED

03/30/2016

Exhibit V, pg. 3

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 5 of 7

Under the Paperwork Reduction Act of 1995 no persons are required to respond to a collection of information unless it displays a valid OMB control number.
PTO Form 1478 (Rev 09/2006)
OMB No. 0651-0009 (Exp 02/28/2018)

Trademark/Service Mark Application, Principal Register


Serial Number: 86958093
Filing Date: 03/30/2016

To the Commissioner for Trademarks:


MARK: MR. MONEY BAGS EASY MONEY JACKPOT (Standard Characters, see mark)
The literal element of the mark consists of MR. MONEY BAGS EASY MONEY JACKPOT.
The mark consists of standard characters, without claim to any particular font, style, size, or color.
The applicant, Video Gaming Technologies, Inc., a corporation of Tennessee, having an address of
308 Mallory Station Road
Franklin, Tennessee 37067
United States
615-372-1000(phone)
615-372-1099(fax)
ip@vgt.net (not authorized)
requests registration of the trademark/service mark identified above in the United States Patent and Trademark Office on the Principal Register
established by the Act of July 5, 1946 (15 U.S.C. Section 1051 et seq.), as amended, for the following:
International Class 028: Gaming devices, namely, gaming machines, bingo machines, with or without video output
Intent to Use: The applicant has a bona fide intention, and is entitled, to use the mark in commerce on or in connection with the identified
goods/services.

Claim of Active Prior Registration(s)


The applicant claims ownership of active prior U.S. Registration Number(s) 4138672, 4306260, 3152743, and others.
The applicant's current Attorney Information:
Courtney Jackson and Donna F. Schmitt, Robert B. Reeser of Armstrong Teasdale LLP
St. Louis, Missouri 63105
United States
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com (authorized)
The attorney docket/reference number is 30711-TBD.

7700 Forsyth Blvd., Suite 1800

The applicant's current Correspondence Information:


Courtney Jackson
Armstrong Teasdale LLP
7700 Forsyth Blvd., Suite 1800
St. Louis, Missouri 63105
314-621-5070(phone)
314-621-5065(fax)
iptm@armstrongteasdale.com;ip@vgt.net (authorized)
E-mail Authorization: I authorize the USPTO to send e-mail correspondence concerning the application to the applicant or applicant's attorney
at the e-mail address provided above. I understand that a valid e-mail address must be maintained and that the applicant or the applicant's
attorney must file the relevant subsequent application-related submissions via the Trademark Electronic Application System (TEAS). Failure to
do so will result in an additional processing fee of $50 per international class of goods/services.
A fee payment in the amount of $275 has been submitted with the application, representing payment for 1 class(es).
Declaration

Exhibit V, pg. 4

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 6 of 7

The signatory believes that: if the applicant is filing the application under 15 U.S.C. 1051(a), the applicant is the owner of the
trademark/service mark sought to be registered; the applicant is using the mark in commerce on or in connection with the goods/services in the
application; the specimen(s) shows the mark as used on or in connection with the goods/services in the application; and/or if the applicant filed
an application under 15 U.S.C. 1051(b), 1126(d), and/or 1126(e), the applicant is entitled to use the mark in commerce; the applicant has a
bona fide intention, and is entitled, to use the mark in commerce on or in connection with the goods/services in the application. The signatory
believes that to the best of the signatory's knowledge and belief, no other persons, except, if applicable, concurrent users, have the right to use the
mark in commerce, either in the identical form or in such near resemblance as to be likely, when used on or in connection with the goods/services
of such other persons, to cause confusion or mistake, or to deceive. The signatory being warned that willful false statements and the like are
punishable by fine or imprisonment, or both, under 18 U.S.C. 1001, and that such willful false statements and the like may jeopardize the
validity of the application or any registration resulting therefrom, declares that all statements made of his/her own knowledge are true and all
statements made on information and belief are believed to be true.
Declaration Signature
Signature: /Keith D. Moore/ Date: 03/30/2016
Signatory's Name: Keith D. Moore
Signatory's Position: Director of IP
RAM Sale Number: 86958093
RAM Accounting Date: 03/31/2016
Serial Number: 86958093
Internet Transmission Date: Wed Mar 30 14:02:35 EDT 2016
TEAS Stamp: USPTO/BAS-XXX.XX.XX.XXX-2016033014023501
7326-86958093-550ac8dc7a0798c9a53936fdb1
4c0a69ef3fe2549f45403c43f975f65c342e6-DA
-289-20160329121350434438

Exhibit V, pg. 5

Case 2:16-cv-02359 Document 1-26 Filed 10/10/16 Page 7 of 7

Exhibit V, pg. 6

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 1 of 11

EXHIBIT W
USPTO Office Action dated July 14, 2016, refusing
U.S. Trademark Application Serial No. 86958109

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 2 of 11

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958109 - POLAR HIGH ROLLER EASY MONEY - 30711TBD

Sent:

7/14/2016 12:06:13 PM

Sent As:

ECOM110@USPTO.GOV

Attachments:

Attachment - 1
Attachment - 2
Attachment - 3
Attachment - 4
Attachment - 5
UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)
OFFICE ACTION (OFFICIAL LETTER) ABOUT APPLICANTS TRADEMARK APPLICATION

U.S. APPLICATION SERIAL NO. 86958109


MARK: POLAR HIGH ROLLER EASY MONEY
CORRESPONDENT ADDRESS:
COURTNEY JACKSON
ARMSTRONG TEASDALE LLP
7700 FORSYTH BLVD., SUITE 1800
ST. LOUIS, MO 63105

*86958109*
CLICK HERE TO RESPOND TO THIS LETTER:
http://www.uspto.gov/trademarks/teas/response_forms.jsp

VIEW YOUR APPLICATION FILE

APPLICANT: Video Gaming Technologies, Inc.


CORRESPONDENTS REFERENCE/DOCKET NO :
30711-TBD
CORRESPONDENT E-MAIL ADDRESS:
iptm@armstrongteasdale.com

OFFICE ACTION
STRICT DEADLINE TO RESPOND TO THIS LETTER
TO AVOID ABANDONMENT OF APPLICANTS TRADEMARK APPLICATION, THE USPTO MUST RECEIVE APPLICANTS
COMPLETE RESPONSE TO THIS LETTER WITHIN 6 MONTHS OF THE ISSUE/MAILING DATE BELOW.
ISSUE/MAILING DATE: 7/14/2016

TEAS PLUS OR TEAS REDUCED FEE (TEAS RF) APPLICANTS TO MAINTAIN LOWER FEE, ADDITIONAL
REQUIREMENTS MUST BE MET, INCLUDING SUBMITTING DOCUMENTS ONLINE: Applicants who filed their application
online using the lower-fee TEAS Plus or TEAS RF application form must (1) file certain documents online using TEAS, including responses to
Office actions (see TMEP 819.02(b), 820.02(b) for a complete list of these documents); (2) maintain a valid e-mail correspondence address;
and (3) agree to receive correspondence from the USPTO by e-mail throughout the prosecution of the application. See 37 C.F.R. 2.22(b),
2.23(b); TMEP 819, 820. TEAS Plus or TEAS RF applicants who do not meet these requirements must submit an additional processing fee of
$50 per international class of goods and/or services. 37 C.F.R. 2.6(a)(1)(v), 2.22(c), 2.23(c); TMEP 819.04, 820.04. However, in certain
situations, TEAS Plus or TEAS RF applicants may respond to an Office action by authorizing an examiners amendment by telephone without
incurring this additional fee.
The referenced application has been reviewed by the assigned trademark examining attorney. Applicant must respond timely and completely to
the issue(s) below. 15 U.S.C. 1062(b); 37 C.F.R. 2.62, 2.65(a); TMEP 711, 718.03.

SUMMARY OF ISSUES:
Likelihood of confusion refusal

Exhibit W, pg. 1

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 3 of 11


Disclaimer requirement

SECTION 2(d) REFUSAL LIKELIHOOD OF CONFUSION


Registration of the applied-for mark is refused because of a likelihood of confusion with the marks in U.S. Registration Nos. 3004885 and
3399131. Trademark Act Section 2(d), 15 U.S.C. 1052(d); see TMEP 1207.01 et seq. See the enclosed registrations.
The Court in In re E. I. Du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (C.C.P.A. 1973), listed the principal factors to be considered
in determining whether there is a likelihood of confusion under Section 2(d). Any one of the factors listed may be dominant in any given case,
depending upon the evidence of record. In re Dixie Restaurants, Inc., 105 F.3d 1405, 41 USPQ2d 1531, 1533 (Fed. Cir. 1997); In this case, the
following factors are the most relevant: similarity of the marks, similarity of the goods and/or services, and similarity of trade channels of the
goods and/or services. See In re Opus One, Inc., 60 USPQ2d 1812 (TTAB 2001); In re Dakins Miniatures Inc., 59 USPQ2d 1593 (TTAB
1999); In re Azteca Restaurant Enterprises, Inc., 50 USPQ2d 1209 (TTAB 1999); In re L.C. Licensing Inc., 49 USPQ2d 1379 (TTAB 1998);
TMEP 1207.01 et seq.
Comparison of the Marks
When determining whether there is a likelihood of confusion under Section 2(d), the question is not whether people will confuse the marks, but
rather whether the marks will confuse the people into believing that the goods they identify emanate from the same source. In re West PointPepperell, Inc., 468 F.2d 200, 175 USPQ 558 (C.C.P.A. 1972). For that reason, the test of likelihood of confusion is not whether the marks can
be distinguished when subjected to a side-by-side comparison. The question is whether the marks create the same overall impression. Visual
Information Inst., Inc. v. Vicon Indus. Inc., 209 USPQ 179 (TTAB 1980). The focus is on the recollection of the average purchaser who
normally retains a general rather than specific impression of trademarks. Chemetron Corp. v. Morris Coupling & Clamp Co., 203 USPQ 537
(TTAB 1979); Sealed Air Corp. v. Scott Paper Co., 190 USPQ 106 (TTAB 1975); TMEP 1207.01(b).
The applicants mark, POLAR HIGH ROLLER EASY MONEY JACKPOT, is similar to the registrants marks, DOUBLE EASY MONEY
and SUPER EASY MONEY, and will lead to consumer confusion. The marks are similar because they contain the common portion, EASY
MONEY.
Marks may be confusingly similar in appearance where similar terms or phrases or similar parts of terms or phrases appear in the compared
marks and create a similar overall commercial impression. See Crocker Natl Bank v. Canadian Imperial Bank of Commerce , 228 USPQ 689,
690-91 (TTAB 1986), affd sub nom. Canadian Imperial Bank of Commerce v. Wells Fargo Bank, Natl Assn , 811 F.2d 1490, 1495, 1
USPQ2d 1813, 1817 (Fed. Cir. 1987) (finding COMMCASH and COMMUNICASH confusingly similar); In re Corning Glass Works, 229
USPQ 65, 66 (TTAB 1985) (finding CONFIRM and CONFIRMCELLS confusingly similar); In re Pellerin Milnor Corp., 221 USPQ 558, 560
(TTAB 1983) (finding MILTRON and MILLTRONICS confusingly similar); TMEP 1207.01(b)(ii)-(iii).
Where the marks of the respective parties are identical or highly similar, then the commercial relationship between the goods or services of the
respective parties must be analyzed carefully to determine whether there is a likelihood of confusion. In re Opus One Inc., 60 USPQ2d 1812,
1815 (TTAB 2001); In re Concordia Intl Forwarding Corp. , 222 USPQ 355 (TTAB 1983); TMEP 1207.01(a).
Comparison of the Goods and Services
When determining whether there is a likelihood of confusion, all circumstances surrounding the sale of the goods and/or services are considered.
Industrial Nucleonics Corp. v. Hinde, 475 F.2d 1197, 177 USPQ 386 (C.C.P.A. 1973). These circumstances include the marketing channels, the
identity of the prospective purchasers and the degree of similarity between the marks and between the goods and/or services. In comparing the
marks, similarity in any one of the elements of sound, appearance or meaning is sufficient to find a likelihood of confusion. In comparing the
goods and/or services, it is necessary to show that they are related in some manner. In re Mack, 197 USPQ 755, 757 (TTAB 1977); TMEP
1207.01 et seq.
The applicant has applied to register POLAR HIGH ROLLER EASY MONEY JACKPOT for Gaming devices, namely, gaming machines,
bingo machines, with or without video output.
The registered mark, DOUBLE EASY MONEY, is for CURRENCY AND CREDIT OPERATED SLOT MACHINES AND GAMING
DEVICES, NAMELY, GAMING MACHINES FOR USE IN GAMING ESTABLISHMENTS.
The registered mark, SUPER EASY MONEY, is for Gaming machines that generate or display wager outcomes; Gaming software that
generates or displays wager outcomes of gaming machines.

Exhibit W, pg. 2

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 4 of 11


The respective goods are similar because they include gaming machines. Accordingly, because confusion as to source is likely, registration is
refused under Trademark Act Section 2 (d) based on likelihood of confusion.
Although applicants mark has been refused registration, applicant may respond to the refusal(s) by submitting evidence and arguments in
support of registration.
If applicant responds to the refusal(s), applicant must also respond to the requirement(s) set forth below.
DISCLAIMER
Applicant must disclaim the wording JACKPOT because it merely describes an ingredient, quality, characteristic, function, feature, purpose,
or use of applicants goods, and thus is an unregistrable component of the mark. See 15 U.S.C. 1052(e)(1), 1056(a); DuoProSS Meditech
Corp. v. Inviro Med. Devices, Ltd., 695 F.3d 1247, 1251, 103 USPQ2d 1753, 1755 (Fed. Cir. 2012) (quoting In re Oppedahl & Larson LLP, 373
F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004)); TMEP 1213, 1213.03(a).
The attached evidence defines a jackpot as A large cash prize in a game or lottery, especially one that accumulates until it is won.
An applicant may not claim exclusive rights to terms that others may need to use to describe their goods and/or services in the marketplace. See
Dena Corp. v. Belvedere Intl, Inc. , 950 F.2d 1555, 1560, 21 USPQ2d 1047, 1051 (Fed. Cir. 1991); In re Aug. Storck KG, 218 USPQ 823, 825
(TTAB 1983). A disclaimer of unregistrable matter does not affect the appearance of the mark; that is, a disclaimer does not physically remove
the disclaimed matter from the mark. See Schwarzkopf v. John H. Breck, Inc., 340 F.2d 978, 978, 144 USPQ 433, 433 (C.C.P.A. 1965); TMEP
1213.
If applicant does not provide the required disclaimer, the USPTO may refuse to register the entire mark. See In re Stereotaxis Inc., 429 F.3d
1039, 1040-41, 77 USPQ2d 1087, 1088-89 (Fed. Cir. 2005); TMEP 1213.01(b).
Applicant should submit a disclaimer in the following standardized format:
No claim is made to the exclusive right to use JACKPOT apart from the mark as shown.
For an overview of disclaimers and instructions on how to satisfy this disclaimer requirement online using the Trademark Electronic Application
System (TEAS) form, please go to http://www.uspto.gov/trademarks/law/disclaimer.jsp.

USPTO
/Sani Khouri/
Examining Attorney
Law Office 110
571-272-5884- Phone
sani.khouri@uspto.gov

TO RESPOND TO THIS LETTER: Go to http://www.uspto.gov/trademarks/teas/response_forms.jsp. Please wait 48-72 hours from the
issue/mailing date before using the Trademark Electronic Application System (TEAS), to allow for necessary system updates of the application.
For technical assistance with online forms, e-mail TEAS@uspto.gov. For questions about the Office action itself, please contact the assigned
trademark examining attorney. E-mail communications will not be accepted as responses to Office actions; therefore, do not respond to
this Office action by e-mail.
All informal e-mail communications relevant to this application will be placed in the official application record.
WHO MUST SIGN THE RESPONSE: It must be personally signed by an individual applicant or someone with legal authority to bind an
applicant (i.e., a corporate officer, a general partner, all joint applicants). If an applicant is represented by an attorney, the attorney must sign the
response.
PERIODICALLY CHECK THE STATUS OF THE APPLICATION: To ensure that applicant does not miss crucial deadlines or official
notices, check the status of the application every three to four months using the Trademark Status and Document Retrieval (TSDR) system at
http://tsdr.uspto.gov/. Please keep a copy of the TSDR status screen. If the status shows no change for more than six months, contact the
Trademark Assistance Center by e-mail at TrademarkAssistanceCenter@uspto.gov or call 1-800-786-9199. For more information on checking
status, see http://www.uspto.gov/trademarks/process/status/.
TO UPDATE CORRESPONDENCE/E-MAIL ADDRESS: Use the TEAS form at http://www.uspto.gov/trademarks/teas/correspondence.jsp.

Exhibit W, pg. 3

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 5 of 11

Exhibit W, pg. 4

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 6 of 11

Exhibit W, pg. 5

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 7 of 11

Exhibit W, pg. 6

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 8 of 11

Exhibit W, pg. 7

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 9 of 11

Exhibit W, pg. 8

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 10 of 11

Exhibit W, pg. 9

Case 2:16-cv-02359 Document 1-27 Filed 10/10/16 Page 11 of 11

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958109 - POLAR HIGH ROLLER EASY MONEY - 30711TBD

Sent:

7/14/2016 12:06:14 PM

Sent As:

ECOM110@USPTO.GOV

Attachments:

UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)

IMPORTANT NOTICE REGARDING YOUR


U.S. TRADEMARK APPLICATION
USPTO OFFICE ACTION (OFFICIAL LETTER) HAS ISSUED
ON 7/14/2016 FOR U.S. APPLICATION SERIAL NO. 86958109
Please follow the instructions below:
(1) TO READ THE LETTER: Click on this link or go to http://tsdr.uspto.gov, enter the U.S. application serial number, and click on
Documents.
The Office action may not be immediately viewable, to allow for necessary system updates of the application, but will be available within 24
hours of this e-mail notification.
(2) TIMELY RESPONSE IS REQUIRED: Please carefully review the Office action to determine (1) how to respond, and (2) the applicable
response time period. Your response deadline will be calculated from 7/14/2016 (or sooner if specified in the Office action). For information
regarding response time periods, see http://www.uspto.gov/trademarks/process/status/responsetime.jsp.
Do NOT hit Reply to this e-mail notification, or otherwise e-mail your response because the USPTO does NOT accept e-mails as
responses to Office actions. Instead, the USPTO recommends that you respond online using the Trademark Electronic Application System
(TEAS) response form located at http://www.uspto.gov/trademarks/teas/response_forms.jsp.
(3) QUESTIONS: For questions about the contents of the Office action itself, please contact the assigned trademark examining attorney. For
technical assistance in accessing or viewing the Office action in the Trademark Status and Document Retrieval (TSDR) system, please e-mail
TSDR@uspto.gov.

WARNING
Failure to file the required response by the applicable response deadline will result in the ABANDONMENT of your application. For
more information regarding abandonment, see http://www.uspto.gov/trademarks/basics/abandon.jsp.
PRIVATE COMPANY SOLICITATIONS REGARDING YOUR APPLICATION: Private companies not associated with the USPTO are
using information provided in trademark applications to mail or e-mail trademark-related solicitations. These companies often use names that
closely resemble the USPTO and their solicitations may look like an official government document. Many solicitations require that you pay
fees.
Please carefully review all correspondence you receive regarding this application to make sure that you are responding to an official document
from the USPTO rather than a private company solicitation. All official USPTO correspondence will be mailed only from the United States
Patent and Trademark Office in Alexandria, VA; or sent by e-mail from the domain @uspto.gov. For more information on how to handle
private company solicitations, see http://www.uspto.gov/trademarks/solicitation_warnings.jsp.

Exhibit W, pg. 10

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 1 of 11

EXHIBIT X
USPTO Office Action dated July 14, 2016, refusing
U.S. Trademark Application Serial No. 86958118

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 2 of 11

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958118 - HOT RED RUBY EASY MONEY JACKPOT 30711-TBD

Sent:

7/14/2016 12:08:00 PM

Sent As:

ECOM110@USPTO.GOV

Attachments:

Attachment - 1
Attachment - 2
Attachment - 3
Attachment - 4
Attachment - 5
UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)
OFFICE ACTION (OFFICIAL LETTER) ABOUT APPLICANTS TRADEMARK APPLICATION

U.S. APPLICATION SERIAL NO. 86958118


MARK: HOT RED RUBY EASY MONEY JACKPOT
CORRESPONDENT ADDRESS:
COURTNEY JACKSON
ARMSTRONG TEASDALE LLP
7700 FORSYTH BLVD., SUITE 1800
ST. LOUIS, MO 63105

*86958118*
CLICK HERE TO RESPOND TO THIS LETTER:
http://www.uspto.gov/trademarks/teas/response_forms.jsp

VIEW YOUR APPLICATION FILE

APPLICANT: Video Gaming Technologies, Inc.


CORRESPONDENTS REFERENCE/DOCKET NO :
30711-TBD
CORRESPONDENT E-MAIL ADDRESS:
iptm@armstrongteasdale.com

OFFICE ACTION
STRICT DEADLINE TO RESPOND TO THIS LETTER
TO AVOID ABANDONMENT OF APPLICANTS TRADEMARK APPLICATION, THE USPTO MUST RECEIVE APPLICANTS
COMPLETE RESPONSE TO THIS LETTER WITHIN 6 MONTHS OF THE ISSUE/MAILING DATE BELOW.
ISSUE/MAILING DATE: 7/14/2016

TEAS PLUS OR TEAS REDUCED FEE (TEAS RF) APPLICANTS TO MAINTAIN LOWER FEE, ADDITIONAL
REQUIREMENTS MUST BE MET, INCLUDING SUBMITTING DOCUMENTS ONLINE: Applicants who filed their application
online using the lower-fee TEAS Plus or TEAS RF application form must (1) file certain documents online using TEAS, including responses to
Office actions (see TMEP 819.02(b), 820.02(b) for a complete list of these documents); (2) maintain a valid e-mail correspondence address;
and (3) agree to receive correspondence from the USPTO by e-mail throughout the prosecution of the application. See 37 C.F.R. 2.22(b),
2.23(b); TMEP 819, 820. TEAS Plus or TEAS RF applicants who do not meet these requirements must submit an additional processing fee of
$50 per international class of goods and/or services. 37 C.F.R. 2.6(a)(1)(v), 2.22(c), 2.23(c); TMEP 819.04, 820.04. However, in certain
situations, TEAS Plus or TEAS RF applicants may respond to an Office action by authorizing an examiners amendment by telephone without
incurring this additional fee.
The referenced application has been reviewed by the assigned trademark examining attorney. Applicant must respond timely and completely to
the issue(s) below. 15 U.S.C. 1062(b); 37 C.F.R. 2.62, 2.65(a); TMEP 711, 718.03.

SUMMARY OF ISSUES:
Likelihood of confusion refusal

Exhibit X, pg. 1

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 3 of 11


Disclaimer requirement

SECTION 2(d) REFUSAL LIKELIHOOD OF CONFUSION


Registration of the applied-for mark is refused because of a likelihood of confusion with the marks in U.S. Registration Nos. 3004885 and
3399131. Trademark Act Section 2(d), 15 U.S.C. 1052(d); see TMEP 1207.01 et seq. See the enclosed registrations.
The Court in In re E. I. Du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (C.C.P.A. 1973), listed the principal factors to be considered
in determining whether there is a likelihood of confusion under Section 2(d). Any one of the factors listed may be dominant in any given case,
depending upon the evidence of record. In re Dixie Restaurants, Inc., 105 F.3d 1405, 41 USPQ2d 1531, 1533 (Fed. Cir. 1997); In this case, the
following factors are the most relevant: similarity of the marks, similarity of the goods and/or services, and similarity of trade channels of the
goods and/or services. See In re Opus One, Inc., 60 USPQ2d 1812 (TTAB 2001); In re Dakins Miniatures Inc., 59 USPQ2d 1593 (TTAB
1999); In re Azteca Restaurant Enterprises, Inc., 50 USPQ2d 1209 (TTAB 1999); In re L.C. Licensing Inc., 49 USPQ2d 1379 (TTAB 1998);
TMEP 1207.01 et seq.
Comparison of the Marks
When determining whether there is a likelihood of confusion under Section 2(d), the question is not whether people will confuse the marks, but
rather whether the marks will confuse the people into believing that the goods they identify emanate from the same source. In re West PointPepperell, Inc., 468 F.2d 200, 175 USPQ 558 (C.C.P.A. 1972). For that reason, the test of likelihood of confusion is not whether the marks can
be distinguished when subjected to a side-by-side comparison. The question is whether the marks create the same overall impression. Visual
Information Inst., Inc. v. Vicon Indus. Inc., 209 USPQ 179 (TTAB 1980). The focus is on the recollection of the average purchaser who
normally retains a general rather than specific impression of trademarks. Chemetron Corp. v. Morris Coupling & Clamp Co., 203 USPQ 537
(TTAB 1979); Sealed Air Corp. v. Scott Paper Co., 190 USPQ 106 (TTAB 1975); TMEP 1207.01(b).
The applicants mark, HOT RED RUBY EASY MONEY JACKPOT, is similar to the registrants marks, DOUBLE EASY MONEY and
SUPER EASY MONEY, and will lead to consumer confusion. The marks are similar because they contain the common portion, EASY
MONEY.
Marks may be confusingly similar in appearance where similar terms or phrases or similar parts of terms or phrases appear in the compared
marks and create a similar overall commercial impression. See Crocker Natl Bank v. Canadian Imperial Bank of Commerce , 228 USPQ 689,
690-91 (TTAB 1986), affd sub nom. Canadian Imperial Bank of Commerce v. Wells Fargo Bank, Natl Assn , 811 F.2d 1490, 1495, 1
USPQ2d 1813, 1817 (Fed. Cir. 1987) (finding COMMCASH and COMMUNICASH confusingly similar); In re Corning Glass Works, 229
USPQ 65, 66 (TTAB 1985) (finding CONFIRM and CONFIRMCELLS confusingly similar); In re Pellerin Milnor Corp., 221 USPQ 558, 560
(TTAB 1983) (finding MILTRON and MILLTRONICS confusingly similar); TMEP 1207.01(b)(ii)-(iii).
Where the marks of the respective parties are identical or highly similar, then the commercial relationship between the goods or services of the
respective parties must be analyzed carefully to determine whether there is a likelihood of confusion. In re Opus One Inc., 60 USPQ2d 1812,
1815 (TTAB 2001); In re Concordia Intl Forwarding Corp. , 222 USPQ 355 (TTAB 1983); TMEP 1207.01(a).
Comparison of the Goods and Services
When determining whether there is a likelihood of confusion, all circumstances surrounding the sale of the goods and/or services are considered.
Industrial Nucleonics Corp. v. Hinde, 475 F.2d 1197, 177 USPQ 386 (C.C.P.A. 1973). These circumstances include the marketing channels, the
identity of the prospective purchasers and the degree of similarity between the marks and between the goods and/or services. In comparing the
marks, similarity in any one of the elements of sound, appearance or meaning is sufficient to find a likelihood of confusion. In comparing the
goods and/or services, it is necessary to show that they are related in some manner. In re Mack, 197 USPQ 755, 757 (TTAB 1977); TMEP
1207.01 et seq.
The applicant has applied to register HOT RED RUBY EASY MONEY JACKPOT for Gaming devices, namely, gaming machines, bingo
machines, with or without video output.
The registered mark, DOUBLE EASY MONEY, is for CURRENCY AND CREDIT OPERATED SLOT MACHINES AND GAMING
DEVICES, NAMELY, GAMING MACHINES FOR USE IN GAMING ESTABLISHMENTS.
The registered mark, SUPER EASY MONEY, is for Gaming machines that generate or display wager outcomes; Gaming software that
generates or displays wager outcomes of gaming machines.

Exhibit X, pg. 2

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 4 of 11


The respective goods are similar because they include gaming machines. Accordingly, because confusion as to source is likely, registration is
refused under Trademark Act Section 2 (d) based on likelihood of confusion.
Although applicants mark has been refused registration, applicant may respond to the refusal(s) by submitting evidence and arguments in
support of registration.
If applicant responds to the refusal(s), applicant must also respond to the requirement(s) set forth below.
DISCLAIMER
Applicant must disclaim the wording JACKPOT because it merely describes an ingredient, quality, characteristic, function, feature, purpose,
or use of applicants goods, and thus is an unregistrable component of the mark. See 15 U.S.C. 1052(e)(1), 1056(a); DuoProSS Meditech
Corp. v. Inviro Med. Devices, Ltd., 695 F.3d 1247, 1251, 103 USPQ2d 1753, 1755 (Fed. Cir. 2012) (quoting In re Oppedahl & Larson LLP, 373
F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004)); TMEP 1213, 1213.03(a).
The attached evidence defines a jackpot as A large cash prize in a game or lottery, especially one that accumulates until it is won.
An applicant may not claim exclusive rights to terms that others may need to use to describe their goods and/or services in the marketplace. See
Dena Corp. v. Belvedere Intl, Inc. , 950 F.2d 1555, 1560, 21 USPQ2d 1047, 1051 (Fed. Cir. 1991); In re Aug. Storck KG, 218 USPQ 823, 825
(TTAB 1983). A disclaimer of unregistrable matter does not affect the appearance of the mark; that is, a disclaimer does not physically remove
the disclaimed matter from the mark. See Schwarzkopf v. John H. Breck, Inc., 340 F.2d 978, 978, 144 USPQ 433, 433 (C.C.P.A. 1965); TMEP
1213.
If applicant does not provide the required disclaimer, the USPTO may refuse to register the entire mark. See In re Stereotaxis Inc., 429 F.3d
1039, 1040-41, 77 USPQ2d 1087, 1088-89 (Fed. Cir. 2005); TMEP 1213.01(b).
Applicant should submit a disclaimer in the following standardized format:
No claim is made to the exclusive right to use JACKPOT apart from the mark as shown.
For an overview of disclaimers and instructions on how to satisfy this disclaimer requirement online using the Trademark Electronic Application
System (TEAS) form, please go to http://www.uspto.gov/trademarks/law/disclaimer.jsp.

USPTO
/Sani Khouri/
Examining Attorney
Law Office 110
571-272-5884- Phone
sani.khouri@uspto.gov

TO RESPOND TO THIS LETTER: Go to http://www.uspto.gov/trademarks/teas/response_forms.jsp. Please wait 48-72 hours from the
issue/mailing date before using the Trademark Electronic Application System (TEAS), to allow for necessary system updates of the application.
For technical assistance with online forms, e-mail TEAS@uspto.gov. For questions about the Office action itself, please contact the assigned
trademark examining attorney. E-mail communications will not be accepted as responses to Office actions; therefore, do not respond to
this Office action by e-mail.
All informal e-mail communications relevant to this application will be placed in the official application record.
WHO MUST SIGN THE RESPONSE: It must be personally signed by an individual applicant or someone with legal authority to bind an
applicant (i.e., a corporate officer, a general partner, all joint applicants). If an applicant is represented by an attorney, the attorney must sign the
response.
PERIODICALLY CHECK THE STATUS OF THE APPLICATION: To ensure that applicant does not miss crucial deadlines or official
notices, check the status of the application every three to four months using the Trademark Status and Document Retrieval (TSDR) system at
http://tsdr.uspto.gov/. Please keep a copy of the TSDR status screen. If the status shows no change for more than six months, contact the
Trademark Assistance Center by e-mail at TrademarkAssistanceCenter@uspto.gov or call 1-800-786-9199. For more information on checking
status, see http://www.uspto.gov/trademarks/process/status/.
TO UPDATE CORRESPONDENCE/E-MAIL ADDRESS: Use the TEAS form at http://www.uspto.gov/trademarks/teas/correspondence.jsp.

Exhibit X, pg. 3

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 5 of 11

Exhibit X, pg. 4

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 6 of 11

Exhibit X, pg. 5

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 7 of 11

Exhibit X, pg. 6

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 8 of 11

Exhibit X, pg. 7

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 9 of 11

Exhibit X, pg. 8

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 10 of 11

Exhibit X, pg. 9

Case 2:16-cv-02359 Document 1-28 Filed 10/10/16 Page 11 of 11

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958118 - HOT RED RUBY EASY MONEY JACKPOT 30711-TBD

Sent:

7/14/2016 12:08:01 PM

Sent As:

ECOM110@USPTO.GOV

Attachments:

UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)

IMPORTANT NOTICE REGARDING YOUR


U.S. TRADEMARK APPLICATION
USPTO OFFICE ACTION (OFFICIAL LETTER) HAS ISSUED
ON 7/14/2016 FOR U.S. APPLICATION SERIAL NO. 86958118
Please follow the instructions below:
(1) TO READ THE LETTER: Click on this link or go to http://tsdr.uspto.gov, enter the U.S. application serial number, and click on
Documents.
The Office action may not be immediately viewable, to allow for necessary system updates of the application, but will be available within 24
hours of this e-mail notification.
(2) TIMELY RESPONSE IS REQUIRED: Please carefully review the Office action to determine (1) how to respond, and (2) the applicable
response time period. Your response deadline will be calculated from 7/14/2016 (or sooner if specified in the Office action). For information
regarding response time periods, see http://www.uspto.gov/trademarks/process/status/responsetime.jsp.
Do NOT hit Reply to this e-mail notification, or otherwise e-mail your response because the USPTO does NOT accept e-mails as
responses to Office actions. Instead, the USPTO recommends that you respond online using the Trademark Electronic Application System
(TEAS) response form located at http://www.uspto.gov/trademarks/teas/response_forms.jsp.
(3) QUESTIONS: For questions about the contents of the Office action itself, please contact the assigned trademark examining attorney. For
technical assistance in accessing or viewing the Office action in the Trademark Status and Document Retrieval (TSDR) system, please e-mail
TSDR@uspto.gov.

WARNING
Failure to file the required response by the applicable response deadline will result in the ABANDONMENT of your application. For
more information regarding abandonment, see http://www.uspto.gov/trademarks/basics/abandon.jsp.
PRIVATE COMPANY SOLICITATIONS REGARDING YOUR APPLICATION: Private companies not associated with the USPTO are
using information provided in trademark applications to mail or e-mail trademark-related solicitations. These companies often use names that
closely resemble the USPTO and their solicitations may look like an official government document. Many solicitations require that you pay
fees.
Please carefully review all correspondence you receive regarding this application to make sure that you are responding to an official document
from the USPTO rather than a private company solicitation. All official USPTO correspondence will be mailed only from the United States
Patent and Trademark Office in Alexandria, VA; or sent by e-mail from the domain @uspto.gov. For more information on how to handle
private company solicitations, see http://www.uspto.gov/trademarks/solicitation_warnings.jsp.

Exhibit X, pg. 10

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 1 of 19

EXHIBIT Y
USPTO Office Action dated June 1, 2016, refusing
U.S. Trademark Application Serial No. 86958097

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 2 of 19

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958097 - LUCKY DUCKY EASY MONEY JACKPOT 30711-TBD

Sent:

6/1/2016 9:35:07 AM

Sent As:

ECOM112@USPTO.GOV

Attachments:

Attachment - 1
Attachment - 2
Attachment - 3
Attachment - 4
Attachment - 5
Attachment - 6
Attachment - 7
Attachment - 8
Attachment - 9
Attachment - 10
Attachment - 11
Attachment - 12
UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)
OFFICE ACTION (OFFICIAL LETTER) ABOUT APPLICANTS TRADEMARK APPLICATION

U.S. APPLICATION SERIAL NO. 86958097

MARK: LUCKY DUCKY EASY MONEY JACKPOT

CORRESPONDENT ADDRESS:
COURTNEY JACKSON
ARMSTRONG TEASDALE LLP

*86958097*
CLICK HERE TO RESPOND TO THIS LETTER:
http://www.uspto.gov/trademarks/teas/response_forms.jsp

7700 FORSYTH BLVD., SUITE 1800


ST. LOUIS, MO 63105

VIEW YOUR APPLICATION FILE

APPLICANT: Video Gaming Technologies, Inc.

CORRESPONDENTS REFERENCE/DOCKET NO :
30711-TBD
CORRESPONDENT E-MAIL ADDRESS:
iptm@armstrongteasdale.com

OFFICE ACTION
STRICT DEADLINE TO RESPOND TO THIS LETTER
TO AVOID ABANDONMENT OF APPLICANTS TRADEMARK APPLICATION, THE USPTO MUST RECEIVE APPLICANTS
COMPLETE RESPONSE TO THIS LETTER WITHIN 6 MONTHS OF THE ISSUE/MAILING DATE BELOW.

Exhibit Y, pg. 1

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 3 of 19


ISSUE/MAILING DATE: 6/1/2016

The referenced application has been reviewed by the assigned trademark examining attorney. Applicant must respond timely and completely to
the issue(s) below. 15 U.S.C. 1062(b); 37 C.F.R. 2.62(a), 2.65(a); TMEP 711, 718.03.

SECTION 2(d) REFUSAL LIKELIHOOD OF CONFUSION

Registration of the applied-for mark LUCKY DUCKY EASY MONEY JACKPOT is refused because of a likelihood of confusion with the
marks in U.S. Registration Nos. 3004885 for DOUBLE EASY MONEY & 3399131 for SUPER EASY MONEY. Trademark Act Section 2(d),
15 U.S.C. 1052(d); see TMEP 1207.01 et seq. See the attached registrations.

Trademark Act Section 2(d) bars registration of an applied-for mark that so resembles a registered mark that it is likely a potential consumer
would be confused, mistaken, or deceived as to the source of the goods and/or services of the applicant and registrant. See 15 U.S.C. 1052(d).
A determination of likelihood of confusion under Section 2(d) is made on a case-by case basis and the factors set forth in In re E. I. du Pont de
Nemours & Co., 476 F.2d 1357, 1361, 177 USPQ 563, 567 (C.C.P.A. 1973) aid in this determination. Citigroup Inc. v. Capital City Bank Grp.,
Inc., 637 F.3d 1344, 1349, 98 USPQ2d 1253, 1256 (Fed. Cir. 2011) (citing On-Line Careline, Inc. v. Am. Online, Inc., 229 F.3d 1080, 1085, 56
USPQ2d 1471, 1474 (Fed. Cir. 2000)). Not all the du Pont factors, however, are necessarily relevant or of equal weight, and any one of the
factors may control in a given case, depending upon the evidence of record. Citigroup Inc. v. Capital City Bank Grp., Inc., 637 F.3d at 1355, 98
USPQ2d at 1260; In re Majestic Distilling Co., 315 F.3d 1311, 1315, 65 USPQ2d 1201, 1204 (Fed. Cir. 2003); see In re E. I. du Pont de
Nemours & Co., 476 F.2d at 1361-62, 177 USPQ at 567.

In this case, the marks may be confusingly similar in appearance because identical terms or phrases appear in the compared marks and create a
similar overall commercial impression. See Crocker Natl Bank v. Canadian Imperial Bank of Commerce , 228 USPQ 689, 690-91 (TTAB
1986), affd sub nom. Canadian Imperial Bank of Commerce v. Wells Fargo Bank, Natl Assn , 811 F.2d 1490, 1495, 1 USPQ2d 1813, 1817
(Fed. Cir. 1987) (finding COMMCASH and COMMUNICASH confusingly similar); In re Corning Glass Works, 229 USPQ 65, 66 (TTAB
1985) (finding CONFIRM and CONFIRMCELLS confusingly similar); In re Pellerin Milnor Corp., 221 USPQ 558, 560 (TTAB 1983) (finding
MILTRON and MILLTRONICS confusingly similar); TMEP 1207.01(b)(ii)-(iii). Specifically, the marks each incorporate the identical terms
EASY MONEY.

Indeed, it appears applicant has merely added its house mark LUCKY DUCKY onto the registered mark. Adding a house mark to an otherwise
confusingly similar mark will not obviate a likelihood of confusion under Section 2(d). See In re Fiesta Palms LLC, 85 USPQ2d 1360, 1366-67
(TTAB 2007) (finding CLUB PALMS MVP and MVP confusingly similar); In re Christian Dior, S.A., 225 USPQ 533, 534 (TTAB 1985)
(finding LE CACHET DE DIOR and CACHET confusingly similar); TMEP 1207.01(b)(iii). It is likely that goods and/or services sold under
these marks would be attributed to the same source. See In re Chica, Inc., 84 USPQ2d 1845, 1848-49 (TTAB 2007). Accordingly, in the present
case, the marks are confusingly similar.

Applicants goods include gaming devices, namely, gaming machines, bingo machines, with or without video output. The registrants goods
include, inter alia, gaming devices, namely, gaming machines for use in gaming establishments and gaming machines that generate or
display wager outcomes.

The parties goods need not be identical or even competitive to find a likelihood of confusion. See On-line Careline Inc. v. Am. Online Inc., 229
F.3d 1080, 1086, 56 USPQ2d 1471, 1475 (Fed. Cir. 2000); Recot, Inc. v. Becton, 214 F.3d 1322, 1329, 54 USPQ2d 1894, 1898 (Fed. Cir. 2000)
([E]ven if the goods in question are different from, and thus not related to, one another in kind, the same goods can be related in the mind of the
consuming public as to the origin of the goods.); TMEP 1207.01(a)(i). The goods need only be related in some manner and/or if the
circumstances surrounding their marketing [be] such that they could give rise to the mistaken belief that [the goods and/or services] emanate
from the same source. Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1369, 101 USPQ2d 1713, 1722 (Fed. Cir. 2012) (quoting
7-Eleven Inc. v. Wechsler, 83 USPQ2d 1715, 1724 (TTAB 2007)); TMEP 1207.01(a)(i).

In this case, the goods, in particular gaming machines are identical and directly competitive. Where the goods of an applicant and registrant are
identical or virtually identical, the degree of similarity between the marks required to support a finding of likelihood of confusion is not as great
as in the case of diverse goods and/or services. See In re Bay State Brewing Co., 117 USPQ2d 1958, 1960 (TTAB 2016) (citing Coach Servs.,
Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1368, 101 USPQ2d 1713, 1721 (Fed. Cir. 2012)); United Global Media Grp., Inc. v. Tseng, 112
USPQ2d 1039, 1049 (TTAB 2014) (quoting Century 21 Real Estate Corp. v. Century Life of Am., 970 F.2d 874, 877, 23 USPQ2d 1698, 1701
(Fed. Cir. 1992)); TMEP 1207.01(b).

Exhibit Y, pg. 2

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 4 of 19


Although applicants mark has been refused registration, applicant may respond to the refusal(s) by submitting evidence and arguments in
support of registration.

If applicant responds to the refusal(s), applicant must also respond to the requirement(s) set forth below.

Applicant must disclaim the wording JACKPOT because it merely describes a quality, characteristic, function, feature, purpose, or use of
applicants gaming machines, and thus is an unregistrable component of the mark. See 15 U.S.C. 1052(e)(1), 1056(a); DuoProSS Meditech
Corp. v. Inviro Med. Devices, Ltd., 695 F.3d 1247, 1251, 103 USPQ2d 1753, 1755 (Fed. Cir. 2012) (quoting In re Oppedahl & Larson LLP, 373
F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004)); TMEP 1213, 1213.03(a).

The attached evidence shows that JACKPOT means a large amount of money won in a game of chance. Applicants goods include gaming
machine which may net players a jackpot. Therefore, the wording JACKPOT merely describes a quality, feature or use of the gaming machines
and must be disclaimed.

An applicant may not claim exclusive rights to terms that others may need to use to describe their goods and/or services in the marketplace. See
Dena Corp. v. Belvedere Intl, Inc. , 950 F.2d 1555, 1560, 21 USPQ2d 1047, 1051 (Fed. Cir. 1991); In re Aug. Storck KG, 218 USPQ 823, 825
(TTAB 1983). A disclaimer of unregistrable matter does not affect the appearance of the mark; that is, a disclaimer does not physically remove
the disclaimed matter from the mark. See Schwarzkopf v. John H. Breck, Inc., 340 F.2d 978, 978, 144 USPQ 433, 433 (C.C.P.A. 1965); TMEP
1213.

If applicant does not provide the required disclaimer, the USPTO may refuse to register the entire mark. See In re Stereotaxis Inc., 429 F.3d
1039, 1040-41, 77 USPQ2d 1087, 1088-89 (Fed. Cir. 2005); TMEP 1213.01(b).

Applicant should submit a disclaimer in the following standardized format:

No claim is made to the exclusive right to use JACKPOT apart from the mark as shown.

For an overview of disclaimers and instructions on how to satisfy this disclaimer requirement online using the Trademark Electronic Application
System (TEAS) form, please go to http://www.uspto.gov/trademarks/law/disclaimer.jsp.

TEAS PLUS OR TEAS REDUCED FEE (TEAS RF) APPLICANTS TO MAINTAIN LOWER FEE, ADDITIONAL
REQUIREMENTS MUST BE MET, INCLUDING SUBMITTING DOCUMENTS ONLINE: Applicants who filed their application
online using the lower-fee TEAS Plus or TEAS RF application form must (1) file certain documents online using TEAS, including responses to
Office actions (see TMEP 819.02(b), 820.02(b) for a complete list of these documents); (2) maintain a valid e-mail correspondence address;
and (3) agree to receive correspondence from the USPTO by e-mail throughout the prosecution of the application. See 37 C.F.R. 2.22(b),
2.23(b); TMEP 819, 820. TEAS Plus or TEAS RF applicants who do not meet these requirements must submit an additional processing fee of
$50 per international class of goods and/or services. 37 C.F.R. 2.6(a)(1)(v), 2.22(c), 2.23(c); TMEP 819.04, 820.04. However, in certain
situations, TEAS Plus or TEAS RF applicants may respond to an Office action by authorizing an examiners amendment by telephone without
incurring this additional fee.

/Kimberly Boulware Perry/


Trademark Attorney, Law Office 112

Exhibit Y, pg. 3

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 5 of 19

571-272-9208 (direct),571-273-9208 (fax)


kimberly.perry@uspto.gov

TO RESPOND TO THIS LETTER: Go to http://www.uspto.gov/trademarks/teas/response_forms.jsp. Please wait 48-72 hours from the
issue/mailing date before using the Trademark Electronic Application System (TEAS), to allow for necessary system updates of the application.
For technical assistance with online forms, e-mail TEAS@uspto.gov. For questions about the Office action itself, please contact the assigned
trademark examining attorney. E-mail communications will not be accepted as responses to Office actions; therefore, do not respond to
this Office action by e-mail.

All informal e-mail communications relevant to this application will be placed in the official application record.
WHO MUST SIGN THE RESPONSE: It must be personally signed by an individual applicant or someone with legal authority to bind an
applicant (i.e., a corporate officer, a general partner, all joint applicants). If an applicant is represented by an attorney, the attorney must sign the
response.

PERIODICALLY CHECK THE STATUS OF THE APPLICATION: To ensure that applicant does not miss crucial deadlines or official
notices, check the status of the application every three to four months using the Trademark Status and Document Retrieval (TSDR) system at
http://tsdr.uspto.gov/. Please keep a copy of the TSDR status screen. If the status shows no change for more than six months, contact the
Trademark Assistance Center by e-mail at TrademarkAssistanceCenter@uspto.gov or call 1-800-786-9199. For more information on checking
status, see http://www.uspto.gov/trademarks/process/status/.

TO UPDATE CORRESPONDENCE/E-MAIL ADDRESS: Use the TEAS form at http://www.uspto.gov/trademarks/teas/correspondence.jsp.

Exhibit Y, pg. 4

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 6 of 19

Exhibit Y, pg. 5

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 7 of 19

Exhibit Y, pg. 6

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 8 of 19

Exhibit Y, pg. 7

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 9 of 19

Exhibit Y, pg. 8

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 10 of 19

Exhibit Y, pg. 9

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 11 of 19

Exhibit Y, pg. 10

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 12 of 19

Exhibit Y, pg. 11

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 13 of 19

Exhibit Y, pg. 12

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 14 of 19

Exhibit Y, pg. 13

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 15 of 19

Exhibit Y, pg. 14

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 16 of 19

Exhibit Y, pg. 15

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 17 of 19

Exhibit Y, pg. 16

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 18 of 19

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958097 - LUCKY DUCKY EASY MONEY JACKPOT 30711-TBD

Sent:

6/1/2016 9:35:09 AM

Sent As:

ECOM112@USPTO.GOV

Attachments:

UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)

IMPORTANT NOTICE REGARDING YOUR


U.S. TRADEMARK APPLICATION
USPTO OFFICE ACTION (OFFICIAL LETTER) HAS ISSUED
ON 6/1/2016 FOR U.S. APPLICATION SERIAL NO. 86958097
Please follow the instructions below:

(1) TO READ THE LETTER: Click on this link or go to http://tsdr.uspto.gov, enter the U.S. application serial number, and click on
Documents.

The Office action may not be immediately viewable, to allow for necessary system updates of the application, but will be available within 24
hours of this e-mail notification.

(2) TIMELY RESPONSE IS REQUIRED: Please carefully review the Office action to determine (1) how to respond, and (2) the applicable
response time period. Your response deadline will be calculated from 6/1/2016 (or sooner if specified in the Office action). For information
regarding response time periods, see http://www.uspto.gov/trademarks/process/status/responsetime.jsp.

Do NOT hit Reply to this e-mail notification, or otherwise e-mail your response because the USPTO does NOT accept e-mails as
responses to Office actions. Instead, the USPTO recommends that you respond online using the Trademark Electronic Application System
(TEAS) response form located at http://www.uspto.gov/trademarks/teas/response_forms.jsp.

(3) QUESTIONS: For questions about the contents of the Office action itself, please contact the assigned trademark examining attorney. For
technical assistance in accessing or viewing the Office action in the Trademark Status and Document Retrieval (TSDR) system, please e-mail
TSDR@uspto.gov.

WARNING
Failure to file the required response by the applicable response deadline will result in the ABANDONMENT of your application. For
more information regarding abandonment, see http://www.uspto.gov/trademarks/basics/abandon.jsp.

PRIVATE COMPANY SOLICITATIONS REGARDING YOUR APPLICATION: Private companies not associated with the USPTO are
using information provided in trademark applications to mail or e-mail trademark-related solicitations. These companies often use names that

Exhibit Y, pg. 17

Case 2:16-cv-02359 Document 1-29 Filed 10/10/16 Page 19 of 19


closely resemble the USPTO and their solicitations may look like an official government document. Many solicitations require that you pay
fees.

Please carefully review all correspondence you receive regarding this application to make sure that you are responding to an official document
from the USPTO rather than a private company solicitation. All official USPTO correspondence will be mailed only from the United States
Patent and Trademark Office in Alexandria, VA; or sent by e-mail from the domain @uspto.gov. For more information on how to handle
private company solicitations, see http://www.uspto.gov/trademarks/solicitation_warnings.jsp.

Exhibit Y, pg. 18

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 1 of 19

EXHIBIT Z
USPTO Office Action dated June 1, 2016, refusing
U.S. Trademark Application Serial No. 86958093

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 2 of 19

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958093 - MR. MONEY BAGS EASY MONEY JACKPOT 30711-TBD

Sent:

6/1/2016 9:36:17 AM

Sent As:

ECOM112@USPTO.GOV

Attachments:

Attachment - 1
Attachment - 2
Attachment - 3
Attachment - 4
Attachment - 5
Attachment - 6
Attachment - 7
Attachment - 8
Attachment - 9
Attachment - 10
Attachment - 11
Attachment - 12
UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)
OFFICE ACTION (OFFICIAL LETTER) ABOUT APPLICANTS TRADEMARK APPLICATION

U.S. APPLICATION SERIAL NO. 86958093

MARK: MR. MONEY BAGS EASY MONEY JACKPOT

CORRESPONDENT ADDRESS:
COURTNEY JACKSON
ARMSTRONG TEASDALE LLP

*86958093*
CLICK HERE TO RESPOND TO THIS LETTER:
http://www.uspto.gov/trademarks/teas/response_forms.jsp

7700 FORSYTH BLVD., SUITE 1800


ST. LOUIS, MO 63105

VIEW YOUR APPLICATION FILE

APPLICANT: Video Gaming Technologies, Inc.

CORRESPONDENTS REFERENCE/DOCKET NO :
30711-TBD
CORRESPONDENT E-MAIL ADDRESS:
iptm@armstrongteasdale.com

OFFICE ACTION
STRICT DEADLINE TO RESPOND TO THIS LETTER
TO AVOID ABANDONMENT OF APPLICANTS TRADEMARK APPLICATION, THE USPTO MUST RECEIVE APPLICANTS
COMPLETE RESPONSE TO THIS LETTER WITHIN 6 MONTHS OF THE ISSUE/MAILING DATE BELOW.

Exhibit Z, pg. 1

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 3 of 19


ISSUE/MAILING DATE: 6/1/2016

The referenced application has been reviewed by the assigned trademark examining attorney. Applicant must respond timely and completely to
the issue(s) below. 15 U.S.C. 1062(b); 37 C.F.R. 2.62(a), 2.65(a); TMEP 711, 718.03.

SECTION 2(d) REFUSAL LIKELIHOOD OF CONFUSION

Registration of the applied-for mark MR. MONEY BAGS EASY MONEY JACKPOT is refused because of a likelihood of confusion with the
marks in U.S. Registration Nos. 3004885 for DOUBLE EASY MONEY & 3399131 for SUPER EASY MONEY. Trademark Act Section 2(d),
15 U.S.C. 1052(d); see TMEP 1207.01 et seq. See the attached registrations.

Trademark Act Section 2(d) bars registration of an applied-for mark that so resembles a registered mark that it is likely a potential consumer
would be confused, mistaken, or deceived as to the source of the goods and/or services of the applicant and registrant. See 15 U.S.C. 1052(d).
A determination of likelihood of confusion under Section 2(d) is made on a case-by case basis and the factors set forth in In re E. I. du Pont de
Nemours & Co., 476 F.2d 1357, 1361, 177 USPQ 563, 567 (C.C.P.A. 1973) aid in this determination. Citigroup Inc. v. Capital City Bank Grp.,
Inc., 637 F.3d 1344, 1349, 98 USPQ2d 1253, 1256 (Fed. Cir. 2011) (citing On-Line Careline, Inc. v. Am. Online, Inc., 229 F.3d 1080, 1085, 56
USPQ2d 1471, 1474 (Fed. Cir. 2000)). Not all the du Pont factors, however, are necessarily relevant or of equal weight, and any one of the
factors may control in a given case, depending upon the evidence of record. Citigroup Inc. v. Capital City Bank Grp., Inc., 637 F.3d at 1355, 98
USPQ2d at 1260; In re Majestic Distilling Co., 315 F.3d 1311, 1315, 65 USPQ2d 1201, 1204 (Fed. Cir. 2003); see In re E. I. du Pont de
Nemours & Co., 476 F.2d at 1361-62, 177 USPQ at 567.

In this case, the marks may be confusingly similar in appearance because identical terms or phrases appear in the compared marks and create a
similar overall commercial impression. See Crocker Natl Bank v. Canadian Imperial Bank of Commerce , 228 USPQ 689, 690-91 (TTAB
1986), affd sub nom. Canadian Imperial Bank of Commerce v. Wells Fargo Bank, Natl Assn , 811 F.2d 1490, 1495, 1 USPQ2d 1813, 1817
(Fed. Cir. 1987) (finding COMMCASH and COMMUNICASH confusingly similar); In re Corning Glass Works, 229 USPQ 65, 66 (TTAB
1985) (finding CONFIRM and CONFIRMCELLS confusingly similar); In re Pellerin Milnor Corp., 221 USPQ 558, 560 (TTAB 1983) (finding
MILTRON and MILLTRONICS confusingly similar); TMEP 1207.01(b)(ii)-(iii). Specifically, the marks each incorporate the identical terms
EASY MONEY.

Indeed, it appears applicant has merely added its house mark MR. MONEY BAGS onto the registered mark. Adding a house mark to an
otherwise confusingly similar mark will not obviate a likelihood of confusion under Section 2(d). See In re Fiesta Palms LLC, 85 USPQ2d 1360,
1366-67 (TTAB 2007) (finding CLUB PALMS MVP and MVP confusingly similar); In re Christian Dior, S.A., 225 USPQ 533, 534 (TTAB
1985) (finding LE CACHET DE DIOR and CACHET confusingly similar); TMEP 1207.01(b)(iii). It is likely that goods and/or services sold
under these marks would be attributed to the same source. See In re Chica, Inc., 84 USPQ2d 1845, 1848-49 (TTAB 2007). Accordingly, in the
present case, the marks are confusingly similar.

Applicants goods include gaming devices, namely, gaming machines, bingo machines, with or without video output. The registrants goods
include, inter alia, gaming devices, namely, gaming machines for use in gaming establishments and gaming machines that generate or
display wager outcomes.

The parties goods need not be identical or even competitive to find a likelihood of confusion. See On-line Careline Inc. v. Am. Online Inc., 229
F.3d 1080, 1086, 56 USPQ2d 1471, 1475 (Fed. Cir. 2000); Recot, Inc. v. Becton, 214 F.3d 1322, 1329, 54 USPQ2d 1894, 1898 (Fed. Cir. 2000)
([E]ven if the goods in question are different from, and thus not related to, one another in kind, the same goods can be related in the mind of the
consuming public as to the origin of the goods.); TMEP 1207.01(a)(i). The goods need only be related in some manner and/or if the
circumstances surrounding their marketing [be] such that they could give rise to the mistaken belief that [the goods and/or services] emanate
from the same source. Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1369, 101 USPQ2d 1713, 1722 (Fed. Cir. 2012) (quoting
7-Eleven Inc. v. Wechsler, 83 USPQ2d 1715, 1724 (TTAB 2007)); TMEP 1207.01(a)(i).

In this case, the goods, in particular gaming machines are identical and directly competitive. Where the goods of an applicant and registrant are
identical or virtually identical, the degree of similarity between the marks required to support a finding of likelihood of confusion is not as great
as in the case of diverse goods and/or services. See In re Bay State Brewing Co., 117 USPQ2d 1958, 1960 (TTAB 2016) (citing Coach Servs.,
Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1368, 101 USPQ2d 1713, 1721 (Fed. Cir. 2012)); United Global Media Grp., Inc. v. Tseng, 112
USPQ2d 1039, 1049 (TTAB 2014) (quoting Century 21 Real Estate Corp. v. Century Life of Am., 970 F.2d 874, 877, 23 USPQ2d 1698, 1701
(Fed. Cir. 1992)); TMEP 1207.01(b).

Exhibit Z, pg. 2

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 4 of 19


Although applicants mark has been refused registration, applicant may respond to the refusal(s) by submitting evidence and arguments in
support of registration.

If applicant responds to the refusal(s), applicant must also respond to the requirement(s) set forth below.

Applicant must disclaim the wording JACKPOT because it merely describes a quality, characteristic, function, feature, purpose, or use of
applicants gaming machines, and thus is an unregistrable component of the mark. See 15 U.S.C. 1052(e)(1), 1056(a); DuoProSS Meditech
Corp. v. Inviro Med. Devices, Ltd., 695 F.3d 1247, 1251, 103 USPQ2d 1753, 1755 (Fed. Cir. 2012) (quoting In re Oppedahl & Larson LLP, 373
F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004)); TMEP 1213, 1213.03(a).

The attached evidence shows that JACKPOT means a large amount of money won in a game of chance. Applicants goods include gaming
machine which may net players a jackpot. Therefore, the wording JACKPOT merely describes a quality, feature or use of the gaming machines
and must be disclaimed.

An applicant may not claim exclusive rights to terms that others may need to use to describe their goods and/or services in the marketplace. See
Dena Corp. v. Belvedere Intl, Inc. , 950 F.2d 1555, 1560, 21 USPQ2d 1047, 1051 (Fed. Cir. 1991); In re Aug. Storck KG, 218 USPQ 823, 825
(TTAB 1983). A disclaimer of unregistrable matter does not affect the appearance of the mark; that is, a disclaimer does not physically remove
the disclaimed matter from the mark. See Schwarzkopf v. John H. Breck, Inc., 340 F.2d 978, 978, 144 USPQ 433, 433 (C.C.P.A. 1965); TMEP
1213.

If applicant does not provide the required disclaimer, the USPTO may refuse to register the entire mark. See In re Stereotaxis Inc., 429 F.3d
1039, 1040-41, 77 USPQ2d 1087, 1088-89 (Fed. Cir. 2005); TMEP 1213.01(b).

Applicant should submit a disclaimer in the following standardized format:

No claim is made to the exclusive right to use JACKPOT apart from the mark as shown.

For an overview of disclaimers and instructions on how to satisfy this disclaimer requirement online using the Trademark Electronic Application
System (TEAS) form, please go to http://www.uspto.gov/trademarks/law/disclaimer.jsp.

TEAS PLUS OR TEAS REDUCED FEE (TEAS RF) APPLICANTS TO MAINTAIN LOWER FEE, ADDITIONAL
REQUIREMENTS MUST BE MET, INCLUDING SUBMITTING DOCUMENTS ONLINE: Applicants who filed their application
online using the lower-fee TEAS Plus or TEAS RF application form must (1) file certain documents online using TEAS, including responses to
Office actions (see TMEP 819.02(b), 820.02(b) for a complete list of these documents); (2) maintain a valid e-mail correspondence address;
and (3) agree to receive correspondence from the USPTO by e-mail throughout the prosecution of the application. See 37 C.F.R. 2.22(b),
2.23(b); TMEP 819, 820. TEAS Plus or TEAS RF applicants who do not meet these requirements must submit an additional processing fee of
$50 per international class of goods and/or services. 37 C.F.R. 2.6(a)(1)(v), 2.22(c), 2.23(c); TMEP 819.04, 820.04. However, in certain
situations, TEAS Plus or TEAS RF applicants may respond to an Office action by authorizing an examiners amendment by telephone without
incurring this additional fee.

/Kimberly Boulware Perry/


Trademark Attorney, Law Office 112

Exhibit Z, pg. 3

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 5 of 19

571-272-9208 (direct),571-273-9208 (fax)


kimberly.perry@uspto.gov

TO RESPOND TO THIS LETTER: Go to http://www.uspto.gov/trademarks/teas/response_forms.jsp. Please wait 48-72 hours from the
issue/mailing date before using the Trademark Electronic Application System (TEAS), to allow for necessary system updates of the application.
For technical assistance with online forms, e-mail TEAS@uspto.gov. For questions about the Office action itself, please contact the assigned
trademark examining attorney. E-mail communications will not be accepted as responses to Office actions; therefore, do not respond to
this Office action by e-mail.

All informal e-mail communications relevant to this application will be placed in the official application record.
WHO MUST SIGN THE RESPONSE: It must be personally signed by an individual applicant or someone with legal authority to bind an
applicant (i.e., a corporate officer, a general partner, all joint applicants). If an applicant is represented by an attorney, the attorney must sign the
response.

PERIODICALLY CHECK THE STATUS OF THE APPLICATION: To ensure that applicant does not miss crucial deadlines or official
notices, check the status of the application every three to four months using the Trademark Status and Document Retrieval (TSDR) system at
http://tsdr.uspto.gov/. Please keep a copy of the TSDR status screen. If the status shows no change for more than six months, contact the
Trademark Assistance Center by e-mail at TrademarkAssistanceCenter@uspto.gov or call 1-800-786-9199. For more information on checking
status, see http://www.uspto.gov/trademarks/process/status/.

TO UPDATE CORRESPONDENCE/E-MAIL ADDRESS: Use the TEAS form at http://www.uspto.gov/trademarks/teas/correspondence.jsp.

Exhibit Z, pg. 4

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 6 of 19

Exhibit Z, pg. 5

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 7 of 19

Exhibit Z, pg. 6

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 8 of 19

Exhibit Z, pg. 7

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 9 of 19

Exhibit Z, pg. 8

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 10 of 19

Exhibit Z, pg. 9

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 11 of 19

Exhibit Z, pg. 10

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 12 of 19

Exhibit Z, pg. 11

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 13 of 19

Exhibit Z, pg. 12

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 14 of 19

Exhibit Z, pg. 13

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 15 of 19

Exhibit Z, pg. 14

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 16 of 19

Exhibit Z, pg. 15

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 17 of 19

Exhibit Z, pg. 16

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 18 of 19

To:

Video Gaming Technologies, Inc. (iptm@armstrongteasdale.com)

Subject:

U.S. TRADEMARK APPLICATION NO. 86958093 - MR. MONEY BAGS EASY MONEY JACKPOT 30711-TBD

Sent:

6/1/2016 9:36:19 AM

Sent As:

ECOM112@USPTO.GOV

Attachments:

UNITED STATES PATENT AND TRADEMARK OFFICE (USPTO)

IMPORTANT NOTICE REGARDING YOUR


U.S. TRADEMARK APPLICATION
USPTO OFFICE ACTION (OFFICIAL LETTER) HAS ISSUED
ON 6/1/2016 FOR U.S. APPLICATION SERIAL NO. 86958093
Please follow the instructions below:

(1) TO READ THE LETTER: Click on this link or go to http://tsdr.uspto.gov, enter the U.S. application serial number, and click on
Documents.

The Office action may not be immediately viewable, to allow for necessary system updates of the application, but will be available within 24
hours of this e-mail notification.

(2) TIMELY RESPONSE IS REQUIRED: Please carefully review the Office action to determine (1) how to respond, and (2) the applicable
response time period. Your response deadline will be calculated from 6/1/2016 (or sooner if specified in the Office action). For information
regarding response time periods, see http://www.uspto.gov/trademarks/process/status/responsetime.jsp.

Do NOT hit Reply to this e-mail notification, or otherwise e-mail your response because the USPTO does NOT accept e-mails as
responses to Office actions. Instead, the USPTO recommends that you respond online using the Trademark Electronic Application System
(TEAS) response form located at http://www.uspto.gov/trademarks/teas/response_forms.jsp.

(3) QUESTIONS: For questions about the contents of the Office action itself, please contact the assigned trademark examining attorney. For
technical assistance in accessing or viewing the Office action in the Trademark Status and Document Retrieval (TSDR) system, please e-mail
TSDR@uspto.gov.

WARNING
Failure to file the required response by the applicable response deadline will result in the ABANDONMENT of your application. For
more information regarding abandonment, see http://www.uspto.gov/trademarks/basics/abandon.jsp.

PRIVATE COMPANY SOLICITATIONS REGARDING YOUR APPLICATION: Private companies not associated with the USPTO are
using information provided in trademark applications to mail or e-mail trademark-related solicitations. These companies often use names that

Exhibit Z, pg. 17

Case 2:16-cv-02359 Document 1-30 Filed 10/10/16 Page 19 of 19


closely resemble the USPTO and their solicitations may look like an official government document. Many solicitations require that you pay
fees.

Please carefully review all correspondence you receive regarding this application to make sure that you are responding to an official document
from the USPTO rather than a private company solicitation. All official USPTO correspondence will be mailed only from the United States
Patent and Trademark Office in Alexandria, VA; or sent by e-mail from the domain @uspto.gov. For more information on how to handle
private company solicitations, see http://www.uspto.gov/trademarks/solicitation_warnings.jsp.

Exhibit Z, pg. 18