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Deutsche%20Bank%20Leveraged%20Finance%20Conference

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Title: Deutsche%20Bank%20Leveraged%20Finance%20Conference


1
  • Deutsche Bank Leveraged Finance Conference
  • George Gresham
  • September 24, 2008

2
Forward-Looking Statements
  • Statements in this presentation that are not
    reported financial results or other historical
    information are forward-looking statements
    within the meaning of the Private Securities
    Litigation Reform Act of 1995. Such
    forward-looking statements include (1) our
    intent to grow our business by growing revenues
    with current customers, winning new customers,
    penetrating new markets, innovating and
    leveraging our databases and marketing assets
    (2) our plans to renew existing customers and win
    new customers (3) our plans to increase
    same-store sales (4) our expectation of growth
    in gaming revenue and gaming expansion in various
    markets (5) our belief that providing cash
    access services on new platforms should enhance
    profitability and margins (6) our belief that
    higher margin platforms will increase their
    installed base in the future, (7) our belief that
    the Arriva card should enhance profitability, (8)
    our guidance with respect to revenue, gross
    margin, operating expense and operating income,
    and (9) our estimated future free cash flow and
    uses thereof. Such forward-looking statements are
    based on current plans, estimates and
    expectations, and are not guarantees of future
    performance. They are subject to a number of
    business risks and uncertainties, any of which
    could cause actual results to differ materially
    from those expressed in or implied by the
    forward-looking statements, including the
    following (1) technical, competitive and
    regulatory impediments, operational and resource
    limitations and gaming establishment acceptance
    of our value propositions (2) competitive
    pressures such as pricing, availability and
    breadth of offerings or gaming establishments
    replacing their outsourced cash access services
    with in-house cash access services (3)
    competitive pressures that require us to reduce
    our pricing or changes in gaming establishment
    patron cash access behavior (4) regulatory or
    social responsibility impediments, economic
    downturns, a decline in the popularity of gaming
    or changes in the demographic profile of gaming
    patrons (5) our failure to obtain regulatory
    approval for our EDITH platform or our inability
    to enter into strategic relationships with
    providers of redemption kiosks on favorable
    terms (6) gaming patron preference for using
    traditional gaming establishment cashiers or
    gaming establishment unwillingness to incur
    capital expenditures for unmanned platforms (7)
    our failure to properly manage the credit risk
    associated with the Arriva card (8) our
    inability to control the demand for cash access
    services within gaming establishments,
    competition from new and existing competitors and
    the incurrence of unplanned operating or capital
    expenses (9) our failure to achieve estimated
    future income levels, unanticipated capital
    expenditures, changes in tax rates or position
    and the need to deploy cash flow to existing or
    new business development initiatives. Additional
    factors that could cause actual results to differ
    materially are included under the heading Risk
    Factors in the Companys Annual Reports on Form
    10-K and Quarterly Reports on Form 10-Q filed
    with the U.S. Securities and Exchange Commission
    from time to time. The Company undertakes no
    obligation to publicly update or revise any
    forward-looking statement.
  • This presentation includes pro forma information,
    or non-GAAP financial measures, that are
    different from financial measures calculated in
    accordance with GAAP and may be different from
    pro forma calculations made by other companies.

3
Company Overview
  • We are the worlds leading cash access provider
    to the gaming industry
  • Industry Leader
  • Recent consolidation of the sector with two
    acquisitions of smaller competitors
  • Greater than 80 of the U.S. market
  • Product Superiority
  • 3-in-1 patent protected IP
  • Expansive data sources
  • Central Credit Only gaming specific credit
    bureau in the world
  • Differentiated service offerings including in
    source/out source model for booth operations and
    sophisticated help desk offerings
  • PowerCash and other cashless gaming products
    deployed or in development
  • Development relationships and or JVs with IGT and
    Ballys
  • Experienced Management Team
  • New team now in place to drive operating
    performance improvement
  • Compelling Financial Model
  • Recurring revenue
  • Low capital expenditure, high free cash flow
  • Profits not currently subject to federal tax
  • Significant operating leverage

4
Leading Cash Access Provider To The Gaming
Industry
At the Intersection of Consumers, Cash and Casinos
5
Gaming Industry and Cash Access
GCA drives Casino Profits, Efficiency and
Customer Loyalty
  • Cash access vendor is critical to the success of
    the casino customer experience
  • Consumers increasing use of debit and credit
    cards require casinos to offer multiple options
    to allow customers access to cash
  • Casinos need to put money on the floor quickly
    and efficiently
  • Casinos want to reduce lines at the cage and
    check cashing booth and allow customers to play
    longer
  • Casinos want lower costs, increased customer play
    and enhanced customer loyalty

6
Product Description
CASH ADVANCE ATM CHECK SERVICES CENTRAL CREDIT/OTHER
SEGMENT DESCRIPTION Credit cash advances POS debit card transactions Patron repays the issuing bank based on cardholder agreement ATM services Largest category of GCA's electronic payments transactions, as measured by dollar and transaction volume Offers check verification services Central Credit database, used by gaming establishments to make credit issuing decisions Check warranty services - gaming establishment pays a fee for the warranty service Gaming patron credit bureau Designed to allow gaming establishments to improve their credit-making decisions. Other services include money transfer
of 2007 REV 52.6 40.0 5.2 2.2
of 2007 EBITDA 43.2 40.4 15.0 1.4
PRODUCTS Casino Cash Plus 3-in-1 ATMACM3-in-1 Enabled QuickJack PlusQuikCashQuikCreditQuikCash Plus WebTicket-Out Debit DeviceEDITH Casino Cash Plus 3-in-1 ATMACM3-in-1 Enabled QuickJack Plus Check VerificationCheck Warranty Information ServicesMoney Transfer
7
The Original GCA Advantage 3-in-1 Rollover
  • Problem the average ATM daily limit is 300-500
  • Insufficient for many gaming patrons
  • Friday/Saturday/Sunday is one day
  • Result 30 of ATM requests in casinos are
    declined
  • Solution
  • Debit Card Cash Advance daily debit limit is
    5-10x the ATM limit
  • Credit Card Cash Advance independent of how
    much money is in the bank
  • 3-in-1 rollover solution informs ATM patrons of
    alternatives when theyve been declined on ATM.
  • Without being informed, most patrons walk away
  • 25 of declined ATM transactions converted to
    successful cash advance transactions
  • Higher average ticket
  • Higher average fee

Protected US Patent 6,081,792
8
GCA 3-in-1 Proven to Put More Cash on the Floor
Large Native American 16
Companies have seen increases in debit and credit
cash to the floor from switching to GCA 3-in-1
Atlantic City 29
Gulf Coast 17
9
Invaluable Information
The industrys only credit bureau for credit
granted by casinos.
GCA has the unique ability to tell casinos how
much cash their best customers are accessing in
competitors properties.
The industrys first and best casino cashier
automation tool. Increased productivity and
accuracy.
10
Major Casinos Rely on GCA
GCAs breadth of products is unmatched by the
competition
Top Customers Cash Access Services Information
Services Cashless Gaming
ATM Cash Advance Check Warranty Central
Credit Marketing QCP EDITH KIOSK
Harrah's/Caesars ? ? ? ? ? ? ? MGM
MIRAGE ? ? ? ? ? Boyd/Coast ? ? ?
? ? ? ? Penn National ? ? ? ? ?
? Foxwoods ? ? ? ? ? ? ? Mohegan
Sun ? ? ? ? ? ? ? Station Casinos ? ?
? ? Wynn ? ? ? ? ? ? Trump ?
? ? ? ? ? Pechanga ? ? ? ? ? ?
Pinnacle ? ? ? ? ? ? Thunder Valley ?
? ? ? ? ?
11
GCAs History
  • New management team recruited to improve business
    performance
  • Scott Betts, CEO (Oct 2007)
  • George Gresham, CFO (Feb 2008)
  • Mari Ellis, CIO (Feb 2008)
  • 1998 Founded
  • Formation of Global Cash Access, LLC First Data
    58, Bank of America 21, MC International 21
  • 1999 2001 Significant Transactions
  • First Data and MC buyout of Bank of America
    interest
  • Central Credit purchase
  • Purchase of Wells Fargo gaming ATM business
  • 2004 Re-capitalization/Re-structuring
  • Buyout of First Data interest by MC
    International
  • Private equity co-investment by Summit Partners
  • 2005 IPO

Stock Price Chart - LTM
12
Experienced Management Team
  • Payments/Gaming
  • Experience
    Years
  • Scott Betts - President, Chief Executive Officer,
    Secretary and Treasurer 7
  • Joined GCA in late 2007
  • FDC, Payments industry consultant
  • George W. Gresham - Executive Vice President and
    Chief Financial Officer 6
  • Joined GCA in February 2008
  • EFD eFunds Corporation, Deloitte Touche, LLP.
  • Kathryn S. Lever - Executive Vice President and
    General Counsel 7
  • Joined GCA in September 2005
  • Practiced gaming law/regulation at Brownstein,
    Hyatt, Farber, and Shreck LP
  • Mark Labay - Senior Vice President, Product
    Management 6
  • Joined GCA in 2002
  • Deloitte Touche, LLP.
  • Kurt Sullivan - Executive Vice President, Check
    Services and Central Credit 22
  • Joined GCA in December 2000
  • Circus Circus Enterprises, Inc.
  • Mari Ellis - Executive Vice President,
    Technology 11

13
Competition in the U.S. Gaming Cash Access Market
Today
2006
14
Attractive Business Model With Significant Growth
GCA has significant growth opportunities
  • Long-term contracts with high retention rate
  • Modest fixed cost structure with significant
    operating leverage
  • Short-term opportunities
  • Integration of acquisitions
  • Cost rationalization
  • Define an integrated product and technology
    roadmap
  • Long-term growth opportunities
  • International
  • Leverage technology innovation to drive margins

15
Transaction Growth
GCA volumes have been growing at 10-15 per year
for the last six years
GCA 2007 Transactions
  • Almost 1 billion 20 bills
  • Enough to wrap Earth 3.7 times
  • 3.9 billion hands of 5 blackjack
  • 228 average transaction
  • 161 transactions per minute
  • 37,000 disbursed per minute

16
Financial Performance
Revenues
Operating Income
( in millions)
( in millions)
1
CAGR 11.2
600.9
CAGR 11.9
1 Excludes non-cash compensation expense
17
Financial Performance
18
Cash Flow
In the first quarter of 2008, GCA discontinued
the Arriva business resulting in a 5.5 million
bad debt reserve adjustment.
19
Balance Sheet
20
Summary
  • Industry Leader
  • Attractive Business Model
  • Long-term contracts with high retention rate
  • Contractual linkage to customer expansion
  • Low capital and labor intensity
  • Significant Growth Opportunities
  • United States
  • Asia
  • Europe
  • New Product Leadership
  • Competitive differentiation
  • Margin improvement
  • One-to-one relationship with gaming patrons
  • Robust Free Cash Flow

21
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