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Business Segments and Enterprise-Wide Information
 3 Months Ended
Mar. 31, 2013
Segment Reporting [Abstract]  
Business Segments and Enterprise-Wide Information [Text Block]

NOTE 13: BUSINESS SEGMENTS AND ENTERPRISE-WIDE INFORMATION

 

Management, including our chief operating decision maker, who is our CEO, evaluates the performances of our business segments primarily on segment revenue and segment operating income before depreciation, amortization and other, and share-based compensation granted to executives, non-employee directors and employees (“segment operating income”). Segment operating income contains internally allocated costs of our shared service support functions, including corporate executive management, business development, sales, finance, legal, human resources, information technology, and risk management. We also review depreciation and amortization allocated to each segment. Shared-based payments expense related to share-based compensation granted to executives, non-employee directors and employees is not allocated to our segments and is included in the corporate unallocated column in the analysis and reconciliation below; however, share-based payments expense related to our content arrangements with certain movie studios has been allocated to our Redbox segment and is included within direct operating expenses. Our performance evaluation does not include segment assets.

 

 

During the second quarter of 2012, we completed the NCR Asset Acquisition. The assets acquired and liabilities assumed, as well as the results of operations, are included in our Redbox segment. See Note 3: Business Combination for additional information about the acquisition.

Our analysis and reconciliation of our segment information to the consolidated financial statements that follows covers our results of operations, which consists of our Redbox, Coin and New Ventures segments. Unallocated general and administrative expenses relate to share-based compensation.

Dollars in thousands     New Corporate  
Three Months Ended March 31, 2013 Redbox Coin Ventures Unallocated Total
Revenue$507,920$65,383$1,383$ -$574,686
Expenses:          
 Direct operating 366,681 37,656 3,121  341 407,799
 Marketing 6,199 1,053 638  67 7,957
 Research and development 4 1,768 2,545  80 4,397
 General and administrative 42,862 6,289 3,361  2,704 55,216
Segment operating income (loss) 92,174 18,617 (8,282) (3,192) 99,317
 Less: depreciation and amortization (40,377) (8,184) (2,894)  - (51,455)
Operating income (loss) 51,797 10,433 (11,176) (3,192) 47,862
 Loss from equity method investments, net  -  -  -  (7,025)  (7,025)
 Interest expense, net  -  -  - (5,533) (5,533)
 Other, net  -  -  -  59 59
Income (loss) before income taxes$51,797$10,433$(11,176)$(15,691)$35,363

Dollars in thousands     New Corporate  
Three Months Ended March 31, 2012 Redbox Coin Ventures Unallocated Total
Revenue$502,942$64,826$411$ -$568,179
Expenses:          
 Direct operating 352,268 36,926 1,098 118 390,410
 Marketing 4,911 1,720 305 21 6,957
 Research and development  481 1,180 2,168 101 3,930
 General and administrative 36,464 5,681 2,457 3,209 47,811
Segment operating income (loss) 108,818 19,319 (5,617) (3,449) 119,071
 Less: depreciation and amortization (32,443) (8,341) (7)  - (40,791)
Operating income (loss) 76,375 10,978 (5,624) (3,449) 78,280
 Loss from equity method investments, net  -  -  -  15,159  15,159
 Interest expense, net  -  -  - (4,114) (4,114)
 Other, net  -  -  - 43 43
Income (loss) before income taxes$76,375$10,978$(5,624)$7,639$89,368

Significant Retailer Relationships

Our Redbox and Coin kiosks are primarily located within retailers. The following retailers accounted for 10.0% or more of our consolidated revenue:

   Three Months Ended
   March 31,
   2013 2012
Wal-Mart Stores Inc. 15.5% 16.6%
Walgreen Co. 15.1% 17.0%
The Kroger Company 10.1% 11.0%