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Goodwill and Intangibles
9 Months Ended
Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangibles
GOODWILL AND INTANGIBLES
There were no accumulated impairments of goodwill as of September 30, 2018. Changes in the carrying amount of goodwill are as follows (in thousands):
 
Gross Carrying Amount
 
EGM
 
Table Products
 
Interactive
 
Total
Balance at December 31, 2017
$
266,868

 
$
6,641

 
$
4,828

 
$
278,337

Acquisition - Interactive

 

 
3,359

 
3,359

Foreign currency adjustments
925

 

 
(90
)
 
835

Purchase accounting adjustment
200

 

 

 
200

Balance at September 30, 2018
$
267,993

 
$
6,641

 
$
8,097

 
$
282,731



Intangible assets consist of the following (in thousands):
 
 
 
September 30, 2018
 
December 31, 2017
 
Useful Life (years)
 
Gross
Value
 
Accumulated
Amortization
 
Net Carrying
Value
 
Gross
Value
 
Accumulated
Amortization
 
Net Carrying
Value
Indefinite lived trade names
Indefinite
 
$
12,126

 
$

 
$
12,126

 
$
12,126

 
$

 
$
12,126

Trade and brand names
7
 
14,730

 
(9,943
)
 
4,787

 
14,730

 
(7,642
)
 
7,088

Customer relationships
7
 
189,496

 
(87,435
)
 
102,061

 
188,419

 
(69,564
)
 
118,855

Contract rights under development and placement fees
1 - 7
 
17,622

 
(13,227
)
 
4,395

 
16,834

 
(9,860
)
 
6,974

Gaming software and technology platforms
1 - 7
 
148,152

 
(78,507
)
 
69,645

 
141,231

 
(67,189
)
 
74,042

Intellectual property
10 - 12
 
17,205

 
(5,418
)
 
11,787

 
17,180

 
(3,978
)
 
13,202

 
 
 
$
399,331

 
$
(194,530
)
 
$
204,801

 
$
390,520

 
$
(158,233
)
 
$
232,287

 

Intangible assets are amortized over their respective estimated useful lives ranging from one to twelve years. Amortization expense related to intangible assets was $11.0 million and $9.9 million for the three months ended September 30, 2018 and 2017, respectively. Amortization expense related to intangible assets was $34.1 million and $33.7 million for the nine months ended September 30, 2018 and 2017, respectively.



The Company enters into development agreements and placement fee agreements with certain customers to secure floor space under lease agreements for its gaming machines. Amounts paid in connection with the development agreements are repaid to the Company in accordance with the terms of the agreement, whereas placements fees are not reimbursed. For development agreements in the form of a loan, interest income is recognized on the repayment of the notes based on the stated rate or, if not stated explicitly in the development agreement, on an imputed interest rate. If the stated interest rate is deemed to be other than a market rate or zero, a discount is recorded on the note receivable as a result of the difference between the stated and market rate and a corresponding intangible asset is recorded. The intangible asset is recognized in the financial statements as a contract right under development agreement and amortized as a reduction in revenue over the term of the agreement. Placement fees can be in the form of cash paid upfront or free lease periods and are accreted over the life of the contract and the expense is recorded as a reduction of revenue. We recorded a reduction of gaming operations revenue from the accretion of contract rights under development agreements and placement fees of $1.2 million for the three months ended September 30, 2018 and 2017. We recorded a reduction of gaming operations revenue from the accretion of contract rights under development agreements and placement fees of $3.4 million and $3.5 million for the nine months ended September 30, 2018 and 2017.