Key questions and answers from the third quarter earnings call conducted by International Game Technology. (IGT: chart) on July 17, 2008.

Robin Farley (UBS): Could you talk a little bit about your share repurchase intentions going forward?

Thomas J. Matthews: Our goals are bifurcated into two buckets. That the one goal is we continue to generate excess cash and cash flow from operations greater than is needed for our reinvestment in the business.

We have said that we would redistribute all that money back to shareholders if we were not able to find good investment alternatives for our owners and continue to do that and continue to do that at a pace that we have said is probably in the neighborhood of about $100 million or so a quarter as well as the ongoing dividend. Beyond that that we do not have an optimal capital structure.

The capital structure is probably optimized, it’s weighted average cost of capital is probably optimized around 2.5 times leverage or so which allows us to opportunistically deploy even more cash back to shareholders if we see an opportunity to do so.

Certainly this pricing environment for gaming stocks in general and IGT in particular does appear to afford us that opportunity and so we have previously said that the authorization that we had would be exhausted by March of 2010.

Robin Farley (UBS): Can you give specifics on where you are seeing replacement market share?

Thomas J. Matthews: Our replacement market share is definitely lower. You saw ship share at very disappointing levels last quarter. It will be obviously better this quarter given the number of units that we shipped into new and expansion environments.

Our issue is those 510,000 previously sold machines that we have not had a very good replacement strategy for them and we have been able to grow that install base with new and expansion.

This quarter you saw six brand new boxes introduced to the casino environment, comprised the majority of our sales for this quarter, it is going to continue to do so. In prospective quarters we have another big product introduction with the MLDs that are coming out hopefully this quarter, at least into the mega-jackpot product line.

You have got a real opportunity to move people from the existing hardware platforms to new hardware platforms. That probably cannibalizes some of the success that we have had with conversions but that’s okay, the hardware shipments will carry higher margins than conversion sales do.

The next step for us is to make meaningful progress on SB and to get people to start buying in front of SB in a way that they demonstrate that they believe in it. You saw a good customer of ours like Stations prepare the Redrock floor and hopefully will prepare the Aviante floor for SB future.

David Katz (Oppenheimer & Co.): In terms of your replacement strategy, does this new product change some of the dynamics in the replacement activities of your customers at this point?

Thomas J. Matthews: Again without regard to any changes in their capital expenditure activity, the answer would be yes. We have products that legitimately replace some of the previously sold equipment and it gives them an opportunity to do more business than they have had overlast year.

We have a chance to go and take back share but we also will see this whole ship share issue abate because there won’t be the pressure on existing floors to downsize our video reels by basically maintaining the existing population through conversion.

They really will have an obligation to revisit repopulating their floor with new hardware platforms from IGT because effective October 1st we will only be supporting AVP with game development.

We will still continue this for 8960 technically for a period of time and there will be some discreet developments for 8960s but effective October 1st our product is AVP for video reel and if you take a look at the products that were introduced, wide screen versions and normal versions both for the upright and the slant top we have a bar top product, in a bar top segment for instance, that’s 100% IGT business.

Steve Wieczynski (Stifel Nicolaus & Company, Inc.): On the lower guidance, have the markets deteriorated that much or are you just being conservative as a possible?

Thomas J. Matthews: Maybe a little bit of both. Hopefully it is conservative and that we will see improved play levels. But what had happened in the first calendar quarter of the year, March quarter was somewhat unprecedented in that you had gaming play levels down and you had gaming play levels down for a whole host of different reasons in different markets.

Some of it was competitive pressure, some of it was smoking bans, some of it was the economy. You did not have a whole lot of public acknowledgement of it yet because you did not have necessarily very good visibility as to how, if and at what degree it would continue.