Business Segments and Enterprise-Wide Information (Notes)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Business Segments and Enterprise-Wide Information [Text Block]

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 4: 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, Coinstar and New Ventures segments. Unallocated general and administrative expenses relate to share-based compensation.

Dollars in thousands							New			Corporate
Three Months Ended June 30, 2013	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	478,518		$	74,526		$	1,186		$	—		$	554,230
Expenses:
Direct operating	323,266			39,801			3,668			366			367,101
Marketing	5,975			952			525			87			7,539
Research and development	—			1,911			1,877			101			3,889
General and administrative	42,084			6,439			4,765			2,458			55,746
Segment operating income (loss)	107,193			25,423			(9,649		)	(3,012		)	119,955
Less: depreciation, amortization and other	(40,364		)	(8,770		)	(490		)	—			(49,624		)
Operating income (loss)	66,829			16,653			(10,139		)	(3,012		)	70,331
Loss from equity method investments, net	—			—			—			(9,629		)	(9,629		)
Interest expense, net	—			—			—			(12,018		)	(12,018		)
Other, net	—			—			—			(980		)	(980		)
Income (loss) before income taxes	$	66,829		$	16,653		$	(10,139	)	$	(25,639	)	$	47,704

Dollars in thousands							New			Corporate
Three Months Ended June 30, 2012	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	457,968		$	73,855		$	397		$	—		$	532,220
Expenses:
Direct operating	316,515			39,307			849			128			356,799
Marketing	3,915			1,109			570			16			5,610
Research and development	249			1,008			2,266			91			3,614
General and administrative	40,569			6,704			2,864			2,651			52,788
Segment operating income (loss)	96,720			25,727			(6,152		)	(2,886		)	113,409
Less: depreciation, amortization and other	(35,335		)	(8,279		)	(15		)	—			(43,629		)
Operating income (loss)	61,385			17,448			(6,167		)	(2,886		)	69,780
Loss from equity method investments, net	—			—			—			(5,044		)	(5,044		)
Interest expense, net	—			—			—			(3,027		)	(3,027		)
Other, net	—			—			—			(59		)	(59		)
Income (loss) before income taxes	$	61,385		$	17,448		$	(6,167	)	$	(11,016	)	$	61,650

Dollars in thousands							New			Corporate
Six Months Ended June 30, 2013	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	986,438		$	139,909		$	2,569		$	—		$	1,128,916
Expenses:
Direct operating	689,947			77,457			6,789			707			774,900
Marketing	12,174			2,005			1,163			154			15,496
Research and development	4			3,679			4,422			181			8,286
General and administrative	84,946			12,728			8,126			5,162			110,962
Segment operating income (loss)	199,367			44,040			(17,931		)	(6,204		)	219,272
Less: depreciation, amortization and other	(80,741		)	(16,954		)	(3,384		)	—			(101,079		)
Operating income (loss)	118,626			27,086			(21,315		)	(6,204		)	118,193
Loss from equity method investments, net	—			—			—			(16,654		)	(16,654		)
Interest expense, net	—			—			—			(17,551		)	(17,551		)
Other, net	—			—			—			(921		)	(921		)
Income (loss) before income taxes	$	118,626		$	27,086		$	(21,315	)	$	(41,330	)	$	83,067

Dollars in thousands							New			Corporate
Six Months Ended June 30, 2012	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	960,910		$	138,681		$	808		$	—		$	1,100,399
Expenses:
Direct operating	668,783			76,233			1,947			246			747,209
Marketing	8,826			2,829			875			37			12,567
Research and development	730			2,188			4,434			192			7,544
General and administrative	77,033			12,385			5,321			5,860			100,599
Segment operating income (loss)	205,538			45,046			(11,769		)	(6,335		)	232,480
Less: depreciation, amortization and other	(67,778		)	(16,620		)	(22		)	—			(84,420		)
Operating income (loss)	137,760			28,426			(11,791		)	(6,335		)	148,060
Income (loss) from equity method investments, net	—			—			—			10,115			10,115
Interest expense, net	—			—			—			(7,141		)	(7,141		)
Other, net	—			—			—			(16		)	(16		)
Income (loss) before income taxes	$	137,760		$	28,426		$	(11,791	)	$	(3,377	)	$	151,018

Significant Retailer Relationships

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Wal-Mart Stores Inc.	15.2	%	16.2	%	15.4	%	16.4	%
Walgreen Co.	14.8	%	16.5	%	15.0	%	16.8	%
The Kroger Company	10.2	%	11.1	%	10.2	%	11.0	%