Note 19 - Impairment and Restructuring

12 Months Ended

Sep. 30, 2012

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

19.             IMPAIRMENT AND RESTRUCTURING

Years Ended September 30,	2012		2011		2010
Alabama	$	12.8	$	3.6	$	61.3
Walker Digital		14.6		-		-
Entraction		15.1		-		-
Other impairments		-		12.2		-
DigiDeal		-		-		2.4
Other restructuring		-		-		4.7
Total	$	42.5	$	15.8	$	68.4

Alabama

The legality of electronic charitable bingo in Alabama was challenged during 2010 and IGT machines ceased to be operated at the VictoryLand, Country Crossing and Greenetrack facilities. During 2010, we recognized $61.3 million of impairment related to our investments in Alabama, including note allowances of $51.9 million, accounts receivable allowances of $2.8 million, and gaming operations equipment impairment of $6.6 million. The fair values were determined using DCF models, risk-based market discount rates, and associated property collateral.

In 2011, we recognized an additional impairment of $3.6 million due to the decline in appraised value of the associated property collateral. The net carrying amount of our investment in Alabama charitable bingo properties totaled $29.3 million at September 30, 2011 and primarily related to development financing notes. Interest income related to these notes was recorded on a cash basis subsequent to the first quarter of 2010 as collectability was not reasonably assured.

In our 2012 fourth quarter, we recognized an additional impairment of $12.8 million due to further decline in appraised value of the associated property collateral and reduced prospects of full collection given the deteriorated climate of the Alabama gaming market. The remaining net carrying amount of our Alabama development financing notes totaled $16.5 million at September 30, 2012.

Walker Digital

During our 2012 fourth quarter, we completed an evaluation of our business strategy and outlook as it relates to the use of our Walker Digital patent portfolio and recorded an impairment of $14.6 million.

Entraction

During our 2012 fourth quarter, we determined it was prudent to consolidate our IGTi product development and customer service resources in Europe primarily acquired with Entraction, due in part to diminished returns largely related to regulatory challenges. As a result, we began exiting certain online turnkey and poker operations and closing or reducing certain facilities in Europe (Stockholm and Tallinn). We recognized restructuring charges of $3.6 million for severance, lease termination, and other wind-down costs in 2012 and expect to incur up to an additional $5.0 million of charges related to severance and other termination costs during the first half of 2013.

As a result of the online operations exited and an evaluation of future business strategy, we recorded impairment of $11.5 million related to acquired intangible assets, including developed technology, customer relationships, and trademarks.

Other Impairments

In our 2011 fourth quarter, we met the criteria for and recorded impairment of $4.3 million related to certain underperforming fixed assets and $7.9 million related to corporate assets held for sale.

DigiDeal

In September 2010, we divested our ownership interest in DigiDeal and ceased manufacturing and distribution of DigiDeal products. As a result, we recognized $2.4 million of impairment related primarily to the remaining DigiDeal products held by IGT operations outside of the DigiDeal entity that was discontinued. These assets did not meet the criteria for presentation as a part of the DigiDeal discontinued operation. See Note 21.

Other Restructuring

During 2009 through 2010, we completed an organizational restructuring to maximize efficiency and realign expenses with our long-term business outlook, during which we reduced our global workforce by approximately 16% from September 30, 2008 levels through a combination of voluntary and involuntary separation arrangements. Additionally, in 2010 we discontinued operations with Japan and DigiDeal (see Note 21), and closed certain North America facilities. The remaining other restructuring liability of $5.6 million at September 30, 2012 was reflected in other accrued liabilities.

Summary of Other Restructuring Charges for 2010
	Severance and Benefits		Lease Termination		Other Fees		TOTAL CASH CHARGES		Abandoned Assets		Share-based Compensation (Forfeitures)		TOTAL NONCASH CHARGES		TOTAL ALL CHARGES
North America	$	2.2	$	1.0	$	0.5	$	3.7	$	-	$	0.3	$	0.3	$	4.0
International		0.4		-		-		0.4		-		0.2		0.2		0.6
Corporate		0.1		-		-		0.1		-		-		-		0.1
Continuing operations		2.7		1.0		0.5		4.2		-		0.5		0.5		4.7
Discontinued operations		3.2		1.5		5.0		9.7		9.6		-		9.6		19.3
Consolidated	$	5.9	$	2.5	$	5.5	$	13.9	$	9.6	$	0.5	$	10.1	$	24.0