Note 3 - Intangible Assets And Goodwill

6 Months Ended

Apr. 30, 2013

Goodwill and Intangible Assets Disclosure [Text Block]

3. 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 our intangible assets as the economic benefits of the intangible asset are consumed or otherwise used up.  Amortization expense was $2.1 million and $2.3 million for the three months ended April 30, 2013 and 2012, respectively and $4.2 million and $4.6 million for the six months ended April 30, 2013 and 2012, respectively. Amortization expenses are included in cost of leases and royalties and cost of sales and service, except for customer relationships which are included in selling, general and administrative expenses.

Amortizable intangible assets are comprised of the following:

	Weighted Average Useful Life (years)		April 30, 2013			October 31, 2012
			(In thousands)
Amortizable intangible assets:
Patents, games and products		10	$	67,382		$	67,174
Less: accumulated amortization				(54,783	)		(53,182	)
				12,599			13,992
Customer relationships		10		26,541			26,623
Less: accumulated amortization				(16,497	)		(15,197	)
				10,044			11,426
Licenses and other		6		22,661			22,935
Less: accumulated amortization				(11,102	)		(10,024	)
				11,559			12,911
Total			$	34,202		$	38,329

Tradenames. Intangibles with an indefinite life, consisting of the Stargames and CARD tradenames, are not amortized, and were $24.4 million and $24.5 million as of April 30, 2013 and October 31, 2012, respectively.

Goodwill.  Changes in the carrying amount of goodwill as of April 30, 2013, are as follows:

Activity by Segment	Utility			Proprietary Table Games		Electronic Table Systems			Electronic Gaming Machines			Total
	(In thousands)
Goodwill	$	48,818		$	10,253	$	35,328		$	13,130		$	107,529
Accumulated impairments		-			-		(22,137	)		-		$	(22,137	)
Balance as of October 31, 2011	$	48,818		$	10,253	$	13,191		$	13,130		$	85,392
Foreign currency translation adjustment		(3,468	)		-		(466	)		(463	)	$	(4,397	)
Acquisition		-			3,000		-			-			3,000
Other		-			955		-			-			955
Balance as of October 31, 2012	$	45,350		$	14,208	$	12,725		$	12,667		$	84,950
Foreign currency translation adjustment		214			-		(66	)		(66	)	$	82
Acquisition		-			-		-			2,650			2,650
Other		-			474		-			-			474
Balance as of April 30, 2013	$	45,564		$	14,682	$	12,659		$	15,251		$	88,156

The $2.7 million of additional goodwill in our EGM segment relates to the acquisition of ProTec Games, Inc. ("ProTec"), a computer-based content provider for casino slot games, table games and online video games to develop graphical assets and perform software development and testing primarily for our EGM machines. Approximately $2.1 million of the acquisition price was paid to date and the remaining consideration was recorded as a liability due in the current fiscal fourth quarter.

The $0.5 million 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 $7.6 million for contingent installment payments computed as the excess fair value of the acquired assets over the fixed installments and other direct costs.  In November 2004, we began paying monthly note installments based on a percentage of certain revenue from BTI games for a period of up to ten years, not to exceed $12.0 million. The final principal and interest payment related to our initial estimated liability of $7.6 million was paid in February 2009 and all payments made subsequently have been recorded as additional goodwill. As of April 30, 2013, we have paid approximately $11.9 million of the $12.0 million maximum amount.