Note 1: Organization and Business

Description of Business

We are a leading provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. During 2015:


•	We made the decision to discontinue operating SAMPLEit in the fourth quarter of 2015. As SAMPLEit does not represent a major component of our operations or financial results, the results of SAMPLEit do not qualify to be reported as a discontinued operation and remain in our All Other reporting category. See Note 14: Business Segments and Enterprise-Wide Information for additional information.

•

To align with a change in how our chief operating decision maker evaluates business performance, we added ecoATM, our electronic device recycling business, as a separate reportable segment in the first quarter of 2015. Previously, the results of ecoATM along with those of other self-service concepts were included in our former New Ventures segment. The combined results of the other self-service concepts are included in our All Other reporting category as they do not meet quantitative thresholds to be reported as a separate segment. See Note 14: Business Segments and Enterprise-Wide Information for additional information.


•	We discontinued our Redbox operations in Canada ("Redbox Canada") as the business was not meeting our performance expectations. We have reclassified the results of Redbox Canada to discontinued operations for all periods presented in our Consolidated Statements of Comprehensive Income. See Note 12: Discontinued Operations for additional information.


•	We acquired certain assets and liabilities of Gazelle, Inc. ("Gazelle") in the fourth quarter of 2015. Results of operations for Gazelle from the acquisition date, November 10, 2015, are included in our ecoATM segment. See Note 3: Business Combinations and Note 14: Business Segments and Enterprise-Wide Information for additional information.

Our core offerings in automated retail include our Redbox, Coinstar and ecoATM segments. Our Redbox segment consists of self-service kiosks where consumers can rent or purchase movies and video games. Our Coinstar segment consists of self-service coin-counting kiosks where consumers can convert their coins to cash or stored value products. We also offer self-service kiosks that exchange gift cards for cash under our Coinstar™ Exchange brand. Our ecoATM segment consists of self-service kiosks and an online solution where consumers can sell certain electronic devices for cash and generates revenue through the sale of devices collected to third party resellers, through online marketplaces and through the Gazelle direct-to-consumer storefront.

In addition to our three reportable segments, we may also conduct business activities through other self-service concepts, where we identify, evaluate, build or acquire and develop new self-service retail concepts and regularly assess these concepts to determine whether continued funding or other alternatives are appropriate.

On July 23, 2013 we acquired the remaining 77.0% equity interest in our ecoATM business. We paid $262.9 million in cash and the primary assets received included property and equipment of $23.2 million, identified intangible assets of $41.4 million and goodwill of $264.2 million, which is not deductible for tax purposes. The primary reason for the business combination was to expand Outerwall’s presence in automated retail and gain exposure to the growing demand for refurbished products and mobile devices. Since the acquisition date, the results of ecoATM operations, with the exception of expense for rights to receive cash which are unallocated corporate expenses, are included in our ecoATM segment. See Note 14: Business Segments and Enterprise-Wide Information for more information.

Our kiosks are located primarily in supermarkets, drug stores, mass merchants, convenience stores, financial institutions, malls and restaurants. Our kiosk and location counts as of December 31, 2015, are as follows:



	Kiosks	Locations
Redbox	40,480	33,060
Coinstar	20,930	19,660
ecoATM	2,250	2,020
All Other⁽¹⁾	120	120
Total	63,780	54,860


(1)	As part of our decision to discontinue operating SAMPLEit in the fourth quarter of 2015, all SAMPLEit kiosks were removed from their locations during January 2016.