Business Combination

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

NOTE 3: BUSINESS COMBINATION

On June 22, 2012, Redbox acquired certain assets of NCR Corporation (“NCR”) related to NCR's self-service entertainment DVD kiosk business (the “NCR Asset Acquisition”). The purchased assets include, among others, self-service DVD kiosks, content library, intellectual property, and certain related contracts, including with certain retailers. In consideration, Redbox paid NCR $100.0 million in cash and assumed certain liabilities of NCR related to the purchased assets. The operating results of NCR's self-service entertainment DVD kiosk business are included in our Redbox segment results.

We accounted for the NCR Asset Acquisition as a business combination. The measurement period for purchase price allocation ends as soon as information regarding the assessment of the quality and quantity of the kiosks and certain facts as well as circumstances becomes available; such measurement period will not exceed twelve months from the acquisition date. Adjustments in the purchase price allocation may require recasting the amounts allocated to goodwill retroactively to the period in which the NCR Asset Acquisition occurred.

The purchase price is preliminarily allocated based on the fair value of the assets acquired and liabilities assumed at the NCR Asset Acquisition date as follows:

				June 22,
Dollars in thousands				2012
Assets acquired:
	Content library		$	4,330
	Prepaid expenses			240
	Deferred income taxes			1,500
	Property and equipment			9,130
	Intangible assets			46,960
	Goodwill			42,110
		Total assets acquired		104,270
Liabilities assumed:
	Accrued liabilities			(4,270)
Total consideration paid in cash			$	100,000

Goodwill of $42.1 million, attributable primarily to the future expected synergies and operational efficiencies, as well as market expansion, has been assigned to our Redbox segment. The majority of the goodwill is deductible for tax purposes.

We estimated the fair value of the acquired identifiable intangible assets based on the forecasted future cash flows discounted at a rate of approximately 11%. A portion of the purchase price is allocated to the following identifiable intangible assets:

				Estimated
			Purchase	Useful Life
Dollars in thousands			Price	in Years
Intangible assets:
	Retailer relationships	$	40,000	10
	Patents		6,300	8
	Trademark and trade name		500	1
	Internal use software		160	1
Total		$	46,960

As of the date of acquisition we estimated the weighted-average useful life of the acquired identifiable intangible assets to be 9.60 years.

Based on the identified intangible assets recorded as of the closing date and assuming no subsequent impairment of the underlying assets, the estimated remaining amortization as of March 31, 2013 is as follows:

			Amortization
Dollars in thousands			Expense
Remainder of 2013		$	3,789
2014			4,788
2015			4,788
2016			4,788
2017			4,788
2018			4,788
Thereafter			15,178
	Total remaining amortization	$	42,907