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Note 4 - Intangible Assets and Goodwill

9 Months Ended

Jul. 31, 2011

Goodwill and Intangible Assets Disclosure [Text Block]

4. INTANGIBLE ASSETS AND GOODWILL

Amortizable intangible assets. All of our recorded intangible assets, excluding goodwill and the Stargames™ and CARD™ tradenames, are subject to amortization. We amortize certain of our intangible assets proportionate to the related actual revenue from the utilization of the intangible asset. We believe this method reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. For all other intangibles, including covenants not to compete, we amortize on a straight-line basis over their useful lives. Amortization expense was $2,533 and $2,788 for the three months ended July 31, 2011 and 2010, respectively, and $7,412 and $8,916 for the nine months ended July 31, 2011 and 2010, respectively.

Amortizable intangible assets are comprised of the following:

	Weighted Average	July 31,			October 31,
	Useful Life	2011			2010
		(In thousands)
Amortizable intangible assets:

Patents, games and products	10 years	$	69,038		$	64,344
Less: accumulated amortization			(51,203	)		(46,925	)
			17,835			17,419
Customer relationships	10 years		26,108			24,299
Less: accumulated amortization			(12,395	)		(9,563	)
			13,713			14,736
Licenses and other	6 - 9 years		18,643			13,328
Less: accumulated amortization			(6,835	)		(4,667	)
			11,808			8,661
Total		$	43,356		$	40,816

Tradenames. Intangibles with an indefinite life, consisting of the Stargames™ and CARD™ tradenames, are not amortized, and were $26,135 and $23,328 as of July 31, 2011 and October 31, 2010, respectively.

				Proprietary		Electronic			Electronic
Activity by Segment	Utility			Table Games		Table Systems			Gaming Machines		Total
	(In thousands)

Goodwill	$	44,135		$	8,317	$	33,268		$	11,079	$	96,799
Accumulated impairments		-			-		(22,137	)		-		(22,137	)
Balance as of October 31, 2009	$	44,135		$	8,317	$	11,131		$	11,079	$	74,662

Foreign currency translation adjustment		(1,820	)		-		920			916		16
Other		245			1,009		-			-		1,254
Balance as of October 31, 2010	$	42,560		$	9,326	$	12,051		$	11,995	$	75,932

Foreign currency translation adjustment		1,931			-		1,501			1,494		4,926
Acquisition		4,799			-		-			-		4,799
Other		-			700		-			-		700
Balance as of July 31, 2011	$	49,290		$	10,026	$	13,552		$	13,489	$	86,357

The $4,799 of additional goodwill in our Utility segment relates to the Newton acquisition during the three months ended January 31, 2011. For additional information about the Newton acquisition, see Note 2.

The $700 of additional goodwill in our PTG segment relates to our acquisition of certain assets from Bet Technology, Inc. (“BTI”) in 2004. In 2004, we recorded an initial estimated liability of $7,616 for contingent installment payments computed as the excess fair value of the acquired assets over the fixed installments and other direct costs. During the three months ended July 31, 2011, we paid amounts in excess of the remaining liability associated with the contingent consideration originally recorded as part of the acquisition. For additional information about BTI contingent liability, see Note 5.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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