XML 32 R12.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Accounts Receivable and Notes Receivable and Credit Quality of Notes Receivable | 12 Months Ended
--- | ---
Dec. 31, 2016
Receivables [Abstract] |
Accounts Receivable and Notes Receivable and Credit Quality of Notes Receivable | Accounts and Notes Receivable and Credit Quality of Notes Receivable Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts and notes receivable is our best estimate of the amount of probable credit losses in our existing receivables. Changes in circumstances relating to the collectability of accounts and notes receivable may result in the need to increase or decrease our allowance for doubtful accounts and notes receivable in the future. We determine the allowances based on historical experience, current market trends and, for larger customer accounts, our assessment of the ability of the customers to pay outstanding balances. Past due balances and other higher risk amounts are reviewed individually for collectability. Account balances are charged against the allowances after all collection efforts have been exhausted and the potential for recovery is considered remote. The timing of our invoices do not always coincide with revenue recognized under the contract. We have unbilled accounts receivable which represent revenue recorded in excess of amounts invoiced under the contract and generally become billable at contractually specified dates. We had $59.7 million and $62.3 million of unbilled accounts receivable as of December 31, 2016 and 2015, respectively. The following summarizes the components of current and long-term accounts and notes receivable, net:
| As of December 31,
| 2016 |  | 2015
Current: |  |  |
Accounts receivable | $ | 508.1 |  |  | $ | 497.7 |
Notes receivable | 140.0 |  |  | 180.4 |
Allowance for doubtful accounts | (27.7 | ) |  | (23.3 | )
Current accounts and notes receivable, net | $ | 620.4 |  |  | $ | 654.8 |
Long-term: |  |  |
Notes receivable, net of allowance of $0.4 and $0.3 | 48.1 |  |  | 51.3 |
Total accounts and notes receivable, net | $ | 668.5 |  |  | $ | 706.1 |
Notes receivable We have provided extended payment terms and development financing to certain customers in the form of notes receivable. We carry our notes receivable at face amounts less an allowance for doubtful accounts and imputed interest, if any. Our notes receivable portfolio consists of domestic and international receivables with installment payment terms ranging from 90 days to three years or single payment terms greater than 12 months. Interest income, if any, is recognized ratably over the life of the note receivable and any related fees or costs to establish the notes are charged to selling, general and administrative expense as incurred, as they are immaterial. Actual or imputed interest, if any, is determined based on current market rates at the time the note originated and is recorded in other income and expense, net, ratably over the payment period, which approximates the effective interest method. We generally impute interest income on all notes receivable with terms greater than one year that do not contain a stated interest rate. The interest rates on our outstanding notes receivable ranged from 3.3% to 10.4% at December 31, 2016 and 2015. Our general policy is to recognize interest on notes receivable until the note receivable is deemed non-performing, which we define as a note where payments have not been received within 180 days of the agreed-upon terms. When a note receivable is deemed to be non-performing, the note is placed on non-accrual status and interest income is recognized on a cash basis. The amount of our non-performing notes was immaterial at December 31, 2016 and 2015. In certain international jurisdictions, we offer extended payment terms ranging between 18 to 36 months. Sales with extended payment terms typically result in a higher selling price and, if extended over periods longer than one year, incur interest. In our Gaming machine sales business, we file UCC-1 financing statements domestically in order to retain a security interest in the gaming machines that underlie a significant portion of our domestic accounts and notes receivable until the receivable balance is fully paid. However, the value of the gaming machines, if repossessed, may be less than the balance of the outstanding receivable. For international customers, depending on the country and our historic collection experience with the customer, we may obtain pledge agreements, bills of exchange, guarantees, post-dated checks or other forms of security agreements designed to enhance our ability to collect the receivables, although a majority of our international accounts and notes receivables do not have these features. In our Gaming operations business, because we own the Participation gaming machines that are leased or otherwise provided to the customer, in a bankruptcy the customer has to generally either accept or reject the lease or other agreement and, if rejected, our gaming machines are returned to us. Our accounts and notes receivable related to revenue earned on Participation gaming machines and all other revenue sources are typically unsecured claims. Due to the significance of our gaming machines to the on-going operations of our casino customers, we may be designated as a key vendor in any bankruptcy filing by a casino customer, which can enhance our position above other creditors in the bankruptcy. Due to our successful collection experience and our continuing relationship with casino customers and their businesses, it is infrequent that we repossess gaming machines from a customer in partial settlement of outstanding accounts or notes receivable balances. In those unusual instances where repossession occurs to mitigate our exposure on the related receivable, the repossessed gaming machines are subsequently resold in the used gaming machine market; however, we may not fully recover the receivable from this re-sale. We monitor the credit quality of our accounts and notes receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within agreed-upon terms. We also review a variety of other relevant qualitative information such as collection experience, economic conditions and customer-specific financial conditions to evaluate credit risk in recording the allowance for doubtful accounts or as an indicator of an impaired loan. Where possible, we seek payment deposits, collateral, pledge agreements, bills of exchange, foreign bank letters of credit, post-dated checks or personal guarantees with respect to notes receivable from our customers. We continuously assess our notes receivable using the information stated above for impairment, especially in cases where macroeconomic conditions could indicate that our ability to collect all amounts due under our contractual agreements is unlikely. Consistent with our policy with respect to past due receivables, for impaired notes receivable, we generally recognize interest on notes receivable until the note receivable is deemed impaired, which we define as a note where payments have not been received within 180 days of the agreed-upon terms. When a note receivable is deemed to be impaired, we write the note down to its net realizable value, which approximates fair value. Accordingly, on impaired notes we cease recognizing interest income and instead recognize any payments on a cash basis. We have certain concentrations of outstanding notes receivable in international locations that impact our assessment of the credit quality of our notes receivable. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our notes receivable. We have not identified changes in the aforementioned factors in the twelve months ended December 31, 2016 that require a reassessment of our receivable balances. The international locations with significant concentrations (generally deemed to be exceeding 10%) of our notes receivable are as follows:
• | Mexico - Our accounts and notes receivable, net, from certain customers in Mexico at December 31, 2016 was $33.9 million. We collected $30.9 million of outstanding receivables from these customers during the year ended December 31, 2016.
• | Peru - Our accounts and notes receivable, net, from certain customers in Peru at December 31, 2016 was $31.7 million. We collected $24.8 million of outstanding receivables from these customers during the year ended December 31, 2016.
• | Argentina - Our accounts and notes receivable, net, from customers in Argentina at December 31, 2016 was $15.8 million which are denominated in USD. Our customers are required to and have continued to pay us in pesos at the spot exchange rate on the date of payment. We collected $24.3 million of outstanding receivables from customers in Argentina during the year ended December 31, 2016.
The following summarizes the components of total notes receivable, net:
| December 31, 2016 |  | Balances over 90 days past due |  | December 31, 2015 |  | Balances over 90 days past due
Notes receivable: |  |  |  |  |  |  |
Domestic | $ | 45.1 |  |  | $ | 1.1 |  |  | $ | 62.4 |  |  | $ | 2.6 |
International | 143.0 |  |  | 38.7 |  |  | 169.8 |  |  | 26.6 |
Total notes receivable | 188.1 |  |  | 39.8 |  |  | 232.2 |  |  | 29.2 |
Notes receivable allowances |  |  |  |  |  |  |
Domestic | (1.0 | ) |  | (0.9 | ) |  | (2.6 | ) |  | (2.5 | )
International | (14.0 | ) |  | (14.0 | ) |  | (10.6 | ) |  | (9.5 | )
Total notes receivable allowances | (15.0 | ) |  | (14.9 | ) |  | (13.2 | ) |  | (12.0 | )
Notes receivable, net | $ | 173.1 |  |  | $ | 24.9 |  |  | $ | 219.0 |  |  | $ | 17.2 |
At December 31, 2016, 14.4% of our total notes receivable, net, was past due by over 90 days compared to 7.9% at December 31, 2015. The following table details our evaluation of notes receivable for impairment as of December 31, 2016 and 2015:
| December 31, 2016 |  | December 31, 2015
| Ending Balance Individually Evaluated for Impairment |  | Ending Balance Collectively Evaluated for Impairment |  | Total |  | Ending Balance Individually Evaluated for Impairment |  | Ending Balance Collectively Evaluated for Impairment |  | Total
Notes receivable: |  |  |  |  |  |  |  |  |  |  |
Domestic | $ | 10.3 |  |  | $ | 34.8 |  |  | $ | 45.1 |  |  | $ | 20.7 |  |  | $ | 41.7 |  |  | $ | 62.4 |
International | 112.3 |  |  | 30.7 |  |  | 143.0 |  |  | 101.8 |  |  | 68.0 |  |  | 169.8 |
Total notes receivable | 122.6 |  |  | 65.5 |  |  | 188.1 |  |  | 122.5 |  |  | 109.7 |  |  | 232.2 |
Allowance for notes receivable | (14.6 | ) |  | (0.4 | ) |  | (15.0 | ) |  | (12.9 | ) |  | (0.3 | ) |  | (13.2 | )
Total notes receivable, net | $ | 108.0 |  |  | $ | 65.1 |  |  | $ | 173.1 |  |  | $ | 109.6 |  |  | $ | 109.4 |  |  | $ | 219.0 |
| Year Ended December 31, 2016 |  | Year Ended December 31, 2015
| Ending Balance Individually Evaluated for Impairment |  | Ending Balance Collectively Evaluated for Impairment |  | Total |  | Ending Balance Individually Evaluated for Impairment |  | Ending Balance Collectively Evaluated for Impairment |  | Total
Provision | $ | 4.9 |  |  | $ | 0.4 |  |  | $ | 5.3 |  |  | $ | 8.7 |  |  | $ | 0.4 |  |  | $ | 9.1 |
Charge-offs and recoveries | (3.2 | ) |  | (0.3 | ) |  | (3.5 | ) |  | (1.7 | ) |  | (0.1 | ) |  | (1.8 | )
We estimate the fair value of notes receivable by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. At December 31, 2016 and 2015, the fair value of the notes receivable, net, approximated the carrying value due to contractual terms of notes receivable generally being under 24 months.

X
- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e5066-111524 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(4)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-04(6)) -URI http://asc.fasb.org/extlink&oid=6488278&loc=d3e603758-122996 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(3)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e5162-111524 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03(a)(5)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03(7)) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e5074-111524 + Details
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration