Redbox 2005 Annual Report Download - page 53

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COINSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003
The following condensed balance sheet data presents the final determination of fair value of the assets
acquired and liabilities assumed.
(in thousands)
Assets acquired:
Cash and cash equivalents ..................................... $ 11,505
Trade accounts receivable ..................................... 910
Inventories ................................................. 19,471
Prepaid expenses and other assets ............................... 4,022
Property and equipment ....................................... 58,007
Other assets ................................................ 3,631
Intangible assets ............................................. 34,400
Goodwill .................................................. 136,126
268,072
Liabilities assumed:
Accounts payable ............................................ 15,925
Accrued liabilities ........................................... 12,852
Total consideration .............................................. $239,295
Goodwill of approximately $136.1 million, representing the excess of the purchase price over the fair value
of tangible and identifiable intangible assets acquired in the merger, is not being amortized, consistent with the
guidance in SFAS 142. Of this amount, approximately $39.0 million is 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 above 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.
NOTE 4: PROPERTY AND EQUIPMENT
Property and equipment, net, consisted of the following at December 31:
2005 2004
(in thousands)
Coin, entertainment and e-payment machines .................. $307,834 $ 261,908
Computers .............................................. 6,962 9,931
Office furniture and equipment ............................. 4,332 3,826
Vehicles ............................................... 6,549 5,569
Leasehold improvements .................................. 2,290 1,326
327,967 282,560
Accumulated depreciation and amortization ................... (179,473) (151,293)
$ 148,494 $ 131,267
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