Redbox 2004 Annual Report Download - page 48

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COINSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS –(Continued)
YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002
44
The total purchase consideration has been allocated to the assets acquired and liabilities assumed, including
identifiable intangible assets, based on their respective fair values as summarized below. The accounting for the purchase
price is preliminary and is subject to possible adjustments in the future, based on our final analysis of certain liabilities. The
following condensed balance sheet data presents the preliminary determination of fair value of the assets acquired and
liabilities assumed.
(in thousands)
Assets acquired:
Cash and cash equivalents................................................................
.........
$ 11,505
Trade accounts receivable ................................................................
.........
1,004
Inventories................................................................
................................
19,617
Prepaid expenses and other assets................................
.............................
4,022
Property and equipment ................................................................
............
58,404
Other assets ................................................................
...............................
2,906
Intangible assets ................................................................
........................
34,400
Goodwill................................................................................................
....
134,158
266,016
Liabilities assumed:
Accounts payable ................................................................
......................
13,869
Accrued liabilities ................................................................
.....................
12,852
Total consideration ................................................................
.............................
$ 239,295
Goodwill of approximately $134.2 million, representing the excess of the purchase price over the fair value of tangible
and identifiable intangible assets acquired in the merger, will not be amortized, consistent with the guidance in SFAS 142. Of
this amount, approximately $37.0 million is expected to be deductible for tax purposes. A third-party consultant used
expectations of future cash flows to estimate the fair value of the acquired intangible assets and a portion of the purchase
price was allocated to the following identifiable intangible assets:
Purchase
Price
Estimated
Useful lives
in Years
Estimated
Weighted Average
Useful lives
in Years
(In thousands, except years)
Intangible assets:
Retailer relationships................................
....................
$ 34,200
10.00 9.94
Internal use software ................................
....................
200
3.00 0.02
Total................................................................
.......................
$ 34,400
9.96
Based on identified intangible assets recorded as of December 31, 2004, and assuming no subsequent impairment of
the underlying assets, the annual estimated aggregate amortization expense will approximate $3.4 million each year through
July, 2014.
The following unaudited pro forma information represents the results of operations for Coinstar and ACMI for the
years ended December 31, 2004 and 2003, as if the acquisition had been consummated as of January 1, 2004 and January 1,
2003, respectively. This pro forma information does not purport to be indicative of what may occur in the future:
December 31,
2004
2003
(in thousands, except per share amounts)
Total revenue ................................................................
...................
$ 421,713
$ 377,554
Net income................................................................
.......................
$ 21,321
$ 21,381
Net income per share:
Basic................................................................
.......................
$ 0.99
$ 0.99
Diluted................................................................
....................
$ 0.97
$ 0.98