Business Segments and Enterprise-Wide Information (Notes)

9 Months Ended

Sep. 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 but not limited to, 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 and expense related to the rights to receive cash issued in connection with our acquisition of ecoATM are not allocated to our segments and are 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.

On July 23, 2013, we completed the acquisition of ecoATM. Prior to July 23, 2013 we held a non-controlling equity interest in ecoATM and reported our share of ecoATM's operating results in income (loss) from equity method investments in our Consolidated Statements of Comprehensive Income. Subsequent to our acquisition of ecoATM on July 23, 2013, the assets acquired and liabilities assumed, as well as the results of operations, with the exception of expense for rights to receive cash which are unallocated corporate expenses, are included in our New Ventures segment as our chief operating decision maker reviews the results in aggregate with other new ventures concepts. 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 Combinations for additional information about these acquisitions.

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 and expense related to the rights to receive cash issued in connection with our acquisition of ecoATM.

Dollars in thousands							New			Corporate
Three Months Ended September 30, 2013	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	491,694		$	79,611		$	16,048		$	—		$	587,353
Expenses:
Direct operating	350,759			41,833			14,854			1,267			408,713
Marketing	5,883			1,352			1,149			739			9,123
Research and development	69			1,428			1,667			655			3,819
General and administrative	44,017			7,349			7,499			2,973			61,838
Segment operating income (loss)	90,966			27,649			(9,121		)	(5,634		)	103,860
Less: depreciation, amortization and other	(41,478		)	(8,539		)	(5,424		)	—			(55,441		)
Operating income (loss)	49,488			19,110			(14,545		)	(5,634		)	48,419
Income from equity method investments, net	—			—			—			57,934			57,934
Interest expense, net	—			—			—			(8,402		)	(8,402		)
Other, net	—			—			—			(2,402		)	(2,402		)
Income (loss) before income taxes	$	49,488		$	19,110		$	(14,545	)	$	41,496		$	95,549

Dollars in thousands							New			Corporate
Three Months Ended September 30, 2012	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	459,538		$	77,616		$	408		$	—		$	537,562
Expenses:
Direct operating	309,842			40,417			967			315			351,541
Marketing	5,698			1,072			731			12			7,513
Research and development	1			968			2,116			55			3,140
General and administrative	42,794			7,244			3,140			2,832			56,010
Segment operating income (loss)	101,203			27,915			(6,546		)	(3,214		)	119,358
Less: depreciation, amortization and other	(41,478		)	(10,968		)	(43		)	—			(52,489		)
Operating income (loss)	59,725			16,947			(6,589		)	(3,214		)	66,869
Loss from equity method investments, net	—			—			—			(6,021		)	(6,021		)
Interest expense, net	—			—			—			(3,892		)	(3,892		)
Other, net	—			—			—			(21		)	(21		)
Income (loss) before income taxes	$	59,725		$	16,947		$	(6,589	)	$	(13,148	)	$	56,935

Dollars in thousands							New			Corporate
Nine Months Ended September 30, 2013	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	1,478,132		$	219,520		$	18,617		$	—		$	1,716,269
Expenses:
Direct operating	1,040,706			119,290			21,643			1,974			1,183,613
Marketing	18,057			3,357			2,312			893			24,619
Research and development	73			5,107			6,089			836			12,105
General and administrative	128,963			20,077			15,625			8,135			172,800
Segment operating income (loss)	290,333			71,689			(27,052		)	(11,838		)	323,132
Less: depreciation, amortization and other	(122,219		)	(25,493		)	(8,808		)	—			(156,520		)
Operating income (loss)	168,114			46,196			(35,860		)	(11,838		)	166,612
Income from equity method investments, net	—			—			—			41,280			41,280
Interest expense, net	—			—			—			(25,953		)	(25,953		)
Other, net	—			—			—			(3,323		)	(3,323		)
Income (loss) before income taxes	$	168,114		$	46,196		$	(35,860	)	$	166		$	178,616

Dollars in thousands							New			Corporate
Nine Months Ended September 30, 2012	Redbox			Coinstar			Ventures			Unallocated			Total
Revenue	$	1,420,448		$	216,297		$	1,216		$	—		$	1,637,961
Expenses:
Direct operating	978,625			116,650			2,914			561			1,098,750
Marketing	14,524			3,901			1,606			49			20,080
Research and development	731			3,156			6,550			247			10,684
General and administrative	119,827			19,629			8,461			8,692			156,609
Segment operating income (loss)	306,741			72,961			(18,315		)	(9,549		)	351,838
Less: depreciation, amortization and other	(109,256		)	(27,588		)	(65		)	—			(136,909		)
Operating income (loss)	197,485			45,373			(18,380		)	(9,549		)	214,929
Income from equity method investments, net	—			—			—			4,094			4,094
Interest expense, net	—			—			—			(11,033		)	(11,033		)
Other, net	—			—			—			(37		)	(37		)
Income (loss) before income taxes	$	197,485		$	45,373		$	(18,380	)	$	(16,525	)	$	207,953

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				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Wal-Mart Stores Inc.	14.9	%	15.4	%	15.1	%	16.3	%
Walgreen Co.	14.3	%	15.6	%	14.7	%	16.1	%
The Kroger Company	9.8	%	10.6	%	10.0	%	10.9	%