Business Segments and Enterprise-Wide Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Business Segments and Enterprise-Wide Information [Text Block]

Note 15: 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. Share-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 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 year ended December 31, 2013, we discontinued the Rubi, Crisp Market, Orango and Star Studio concepts and accordingly their results of operations were reclassified from the New Ventures segment to Loss from discontinued operations, net of tax in our Consolidated Statements of Comprehensive Income for all periods presented. See Note 13: Discontinued Operationsfor further information.

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
Three Months Ended June 30, 2014	Redbox			Coinstar			New Ventures			Corporate Unallocated			Total
Revenue	$	445,481		$	79,880		$	23,809		$	—		$	549,170
Expenses:
Direct operating	321,701			40,203			22,823			1,332			386,059
Marketing	6,180			1,557			1,147			899			9,783
Research and development	18			153			2,066			1,175			3,412
General and administrative	34,070			7,169			4,137			3,598			48,974
Segment operating income (loss)	83,512			30,798			(6,364		)	(7,004		)	100,942
Less: depreciation, amortization and other	(40,158		)	(8,921		)	(3,948		)	—			(53,027		)
Operating income (loss)	43,354			21,877			(10,312		)	(7,004		)	47,915
Loss from equity method investments, net	—			—			—			(10,541		)	(10,541		)
Interest expense, net	—			—			—			(12,929		)	(12,929		)
Other, net	—			—			—			2,902			2,902
Income (loss) from continuing operations before income taxes	$	43,354		$	21,877		$	(10,312	)	$	(27,572	)	$	27,347

Dollars in thousands
Three Months Ended June 30, 2013	Redbox			Coinstar			New Ventures			Corporate Unallocated			Total
Revenue	$	478,518		$	74,526		$	6		$	—		$	553,050
Expenses:
Direct operating	323,266			39,801			517			366			363,950
Marketing	5,975			952			108			87			7,122
Research and development	—			1,911			342			101			2,354
General and administrative	42,084			6,439			3,313			2,458			54,294
Segment operating income (loss)	107,193			25,423			(4,274		)	(3,012		)	125,330
Less: depreciation, amortization and other	(40,364		)	(8,770		)	(74		)	—			(49,208		)
Operating income (loss)	66,829			16,653			(4,348		)	(3,012		)	76,122
Loss from equity method investments, net	—			—			—			(9,629		)	(9,629		)
Interest expense, net	—			—			—			(12,018		)	(12,018		)
Other, net	—			—			—			(980		)	(980		)
Income (loss) from continuing operations before income taxes	$	66,829		$	16,653		$	(4,348	)	$	(25,639	)	$	53,495

Dollars in thousands
Six Months Ended June 30, 2014	Redbox			Coinstar			New Ventures			Corporate Unallocated			Total
Revenue	$	961,137		$	148,633		$	39,769		$	—		$	1,149,539
Expenses:
Direct operating	690,305			77,926			39,162			3,311			810,704
Marketing	11,244			2,563			1,976			1,597			17,380
Research and development	26			422			4,482			1,956			6,886
General and administrative	73,131			14,189			7,937			6,708			101,965
Segment operating income (loss)	186,431			53,533			(13,788		)	(13,572		)	212,604
Less: depreciation, amortization and other	(80,721		)	(17,484		)	(7,765		)	—			(105,970		)
Operating income (loss)	105,710			36,049			(21,553		)	(13,572		)	106,634
Loss from equity method investments, net	—			—			—			(19,909		)	(19,909		)
Interest expense, net	—			—			—			(22,574		)	(22,574		)
Other, net	—			—			—			1,158			1,158
Income (loss) from continuing operations before income taxes	$	105,710		$	36,049		$	(21,553	)	$	(54,897	)	$	65,309

Dollars in thousands
Six Months Ended June 30, 2013	Redbox			Coinstar			New Ventures			Corporate Unallocated			Total
Revenue	$	986,438		$	139,909		$	10		$	—		$	1,126,357
Expenses:
Direct operating	689,947			77,457			734			707			768,845
Marketing	12,174			2,005			175			154			14,508
Research and development	4			3,679			797			181			4,661
General and administrative	84,946			12,728			4,919			5,162			107,755
Segment operating income (loss)	199,367			44,040			(6,615		)	(6,204		)	230,588
Less: depreciation, amortization and other	(80,741		)	(16,954		)	(110		)	—			(97,805		)
Operating income (loss)	118,626			27,086			(6,725		)	(6,204		)	132,783
Loss from equity method investments, net	—			—			—			(16,654		)	(16,654		)
Interest expense, net	—			—			—			(17,551		)	(17,551		)
Other, net	—			—			—			(921		)	(921		)
Income (loss) from continuing operations before income taxes	$	118,626		$	27,086		$	(6,725	)	$	(41,330	)	$	97,657

Significant Retailer Relationships

Our Redbox and Coinstar kiosks are primarily located within retailers. The following retailers accounted for 10% or more of our consolidated revenue:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Wal-Mart Stores Inc.	15.1	%	15.2	%	15.2	%	15.4	%
Walgreen Co.	13.7	%	14.8	%	13.9	%	15.0	%
The Kroger Company	9.9	%	10.2	%	9.8	%	10.2	%