Discontinued Operations

9 Months Ended

Sep. 30, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 12: Discontinued Operations

Summary Financial Information

On January 23, 2015, we made the decision to shut down our Redbox Canada operations as the business was not meeting the company's performance expectations. This represents a strategic shift which has a major effect on our operations as it represents a significant geographical area for our Redbox segment and the losses generated were significant to our total operations. On March 31, 2015, we completed the disposal of the Redbox Canada operations. As a result, we updated certain estimates used in the preparation of the financial statements and the remaining value of the content library and certain capitalized property and equipment consisting primarily of installation costs were amortized over the wind-down period ending March 31, 2015. We have reclassified the results of Redbox Canada to discontinued operations for all periods presented in our Consolidated Statements of Comprehensive Income.

In addition to Redbox Canada, discontinued operations for the nine months ended September 30, 2014 included a $1.3 million pretax loss from operations and a $0.5 million income tax benefit related to the wind-down process of certain new ventures that were discontinued during 2013. Continuing cash flows from the wind-down process were not material. Total loss on discontinued operations is as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Dollars in thousands	2015			2014			2015			2014
Redbox Canada	$	(256	)	$	(4,233	)	$	(5,077	)	$	(9,976	)
Certain new ventures	—			—			—			(768		)
Loss on discontinued operations	$	(256	)	$	(4,233	)	$	(5,077	)	$	(10,744	)

Redbox Canada

The disposition and operating results of Redbox Canada are presented in discontinued operations in our Consolidated Statements of Comprehensive Income for all periods presented. The following table sets forth the components of discontinued operations included in our Consolidated Statements of Comprehensive Income:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Dollars in thousands	2015			2014			2015			2014
Major classes of line items constituting pretax loss of discontinued operations:
Revenue	$	—		$	2,965		$	1,557		$	8,215
Direct operating	10			4,669			4,314			13,587
Marketing	—			619			112			1,870
General and administrative	(10		)	278			144			892
Restructuring and lease termination costs	—			—			522			—
Depreciation and other	—			1,516			5,858			4,037
Amortization of intangible assets	—			6			44			19
Other expense, net	(36		)	(1,661		)	(4,365		)	(1,463		)
Pretax loss of discontinued operations related to major classes of pretax loss	(36		)	(5,784		)	(13,802		)	(13,653		)
Income tax benefit (expense)(1)	(220		)	1,551			8,725			3,677
Net loss on discontinued operations	$	(256	)	$	(4,233	)	$	(5,077	)	$	(9,976	)

(1) The income tax benefit for the nine months endedSeptember 30, 2015 includes a benefit on the rate differential between the U.S. and Canada.

Significant operating and investing cash flows of Redbox Canada were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Dollars in thousands	2015			2014			2015			2014
Loss on discontinued operations	$	(256	)	$	(4,233	)	$	(5,077	)	$	(9,976	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization	—			1,522			5,902			4,056
Content library	167			(768		)	3,379			(359		)
Prepaid and other current assets	(42		)	3			1,192			32
Accounts payable	28			500			(2,688		)	(351		)
Accrued payables to retailers	—			(193		)	(155		)	109
Other accrued liabilities	(57		)	(67		)	(674		)	(91		)
Net cash flows from (used in) operating activities	$	(160	)	$	(3,236	)	$	1,879		$	(6,580	)
Investing activities:
Purchase of property, plant and equipment	(33		)	291			(311		)	(3,980		)
Total cash flows used in investing activities	$	(33	)	$	291		$	(311	)	$	(3,980	)