Business Segments and Enterprise-Wide Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Segments and Enterprise-Wide Information

Note 12: 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 (loss) before depreciation, amortization and other, and share-based compensation granted to executives, non-employee directors and employees (“segment operating income (loss)”). Segment operating income (loss) 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.

Comparability of Results

We regularly assess the performance of our concepts to determine whether continued funding or other alternatives are appropriate and as a result, we discontinued operating SAMPLEit in the fourth quarter of 2015. As SAMPLEit did not represent a major component of our operations or financial results, the results of SAMPLEit did not qualify to be reported as a discontinued operation and remain in our All Other reporting category.

On November 10, 2015, we acquired certain assets and liabilities of Gazelle, Inc. ("Gazelle"). Results of operations for Gazelle are included in ecoATM for the three month period ended March 31, 2016.

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, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	421,488		$	72,379		$	42,089		$	—		$	—		$	535,956
Expenses:
Direct operating	299,001			38,645			37,894			86			341			375,967
Marketing	3,824			775			4,580			5			38			9,222
Research and development	—			—			935			—			110			1,045
General and administrative	32,029			7,864			4,002			347			3,528			47,770
Restructuring and related costs (Note 9)	2,408			462			405			—			—			3,275
Segment operating income (loss)	84,226			24,633			(5,727		)	(438		)	(4,017		)	98,677
Less: depreciation, amortization and other	(24,295		)	(7,409		)	(8,204		)	—			—			(39,908		)
Operating income (loss)	59,931			17,224			(13,931		)	(438		)	(4,017		)	58,769
Loss from equity method investments, net	—			—			—			—			(207		)	(207		)
Interest expense, net	—			—			—			—			(242		)	(242		)
Other, net	—			—			—			—			1,229			1,229
Income (loss) from continuing operations before income taxes	$	59,931		$	17,224		$	(13,931	)	$	(438	)	$	(3,237	)	$	59,549

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 related costs (Note 9)	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

Significant Retailer Relationships

Kiosks at the following retailers accounted for 10% or more of our consolidated revenue:

	Three Months Ended
	March 31,
	2016		2015
Wal-Mart Stores Inc.	16.2	%	16.3	%
Walgreen Co.	13.7	%	14.3	%