Business Segments and Enterprise-Wide Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Business Segments and Enterprise-Wide Information [Text Block]

Note 14: 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.

Changes in our Organizational Structure

During the first quarter of 2015, we added ecoATM, our electronic device recycling business, as a separate reportable segment. Previously, the results of ecoATM along with those of other self-service concepts were included in our New Ventures segment. The combined results of the other self-service concepts, which include product sampling kiosk concept SAMPLEit, are now included in the All Other reporting category in the reconciliation below as they do not meet quantitative thresholds to be reported as a separate segment. All goodwill previously allocated to the New Ventures segment has been allocated to the ecoATM segment.

Comparability of Segment Results

We have recast prior period results for the following:

• Discontinued operations, consisting of our Redbox operations in Canada which we shut down during the first quarter of 2015. See Note 12: Discontinued Operationsfor further information; and

• The addition of our ecoATM segment and an All Other reporting category, which we added during the first quarter of 2015.

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 ecoATM segments, Corporate Unallocated expenses and All Other. All Other includes the results of other self-service concepts, which we regularly assess to determine whether continued funding or other alternatives are appropriate.

Dollars in thousands
Three Months Ended March 31, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	519,533		$	69,330		$	19,749		$	24		$	—		$	608,636
Expenses:
Direct operating	342,935			37,263			22,806			1,191			989			405,184
Marketing	4,825			1,178			1,730			320			367			8,420
Research and development	—			—			1,456			(85		)	713			2,084
General and administrative	33,735			7,795			1,968			2,507			2,551			48,556
Restructuring and lease termination costs (Note 11)	15,174			550			127			—			—			15,851
Segment operating income (loss)	122,864			22,544			(8,338		)	(3,909		)	(4,620		)	128,541
Less: depreciation, amortization and other	(31,607		)	(7,818		)	(5,902		)	(668		)	—			(45,995		)
Operating income (loss)	91,257			14,726			(14,240		)	(4,577		)	(4,620		)	82,546
Loss from equity method investments, net	—			—			—			—			(132		)	(132		)
Interest expense, net	—			—			—			—			(12,071		)	(12,071		)
Other, net	—			—			—			—			(2,346		)	(2,346		)
Income (loss) from continuing operations before income taxes	$	91,257		$	14,726		$	(14,240	)	$	(4,577	)	$	(19,169	)	$	67,997

Dollars in thousands
Three Months Ended March 31, 2014	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	513,049		$	68,753		$	15,946		$	14		$	—		$	597,762
Expenses:
Direct operating	363,601			37,723			15,931			408			1,979			419,642
Marketing	4,460			1,006			668			161			698			6,993
Research and development	8			269			1,784			632			781			3,474
General and administrative	38,701			6,997			2,879			921			3,110			52,608
Restructuring and lease termination costs (Note 11)	534			23			—			—			—			557
Segment operating income (loss)	105,745			22,735			(5,316		)	(2,108		)	(6,568		)	114,488
Less: depreciation, amortization and other	(39,404		)	(8,563		)	(3,712		)	(105		)	—			(51,784		)
Operating income (loss)	66,341			14,172			(9,028		)	(2,213		)	(6,568		)	62,704
Loss from equity method investments, net	—			—			—			—			(9,368		)	(9,368		)
Interest expense, net	—			—			—			—			(9,648		)	(9,648		)
Other, net	—			—			—			—			(648		)	(648		)
Income (loss) from continuing operations before income taxes	$	66,341		$	14,172		$	(9,028	)	$	(2,213	)	$	(26,232	)	$	43,040

Significant Retailer Relationships

The following retailers accounted for 10% or more of our consolidated revenue:

	Three Months Ended
	March 31,
	2015		2014
Wal-Mart Stores Inc.	16.3	%	15.3	%
Walgreen Co.	14.3	%	14.2	%