Redbox 2006 Annual Report Download - page 58

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COINSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004
The total purchase consideration has been allocated to the assets acquired and liabilities assumed, including
identifiable intangible assets, based on their respective fair values at the acquisition date. The accounting for the
purchase price allocation is preliminary and is subject to possible adjustments in the future, based on our final
analysis of certain liabilities. The following unaudited condensed balance sheet data presents the preliminary
determination of the fair value of the assets acquired and liabilities assumed as of the acquisition date.
(in thousands)
Assets acquired:
Cash and cash equivalents ..................................... $ 2,801
Trade accounts receivable ..................................... 3,642
Prepaid expenses and other assets ............................... 1,488
Property and equipment ....................................... 1,991
Intangible assets ............................................. 8,890
Goodwill .................................................. 22,718
41,530
Liabilities assumed:
Accounts payable ............................................ 4,264
Accrued liabilities ........................................... 5,129
Deferred tax liability ......................................... 2,595
Total consideration .............................................. $29,542
Goodwill of $22.7 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. No amount of this goodwill is expected to be deductible for tax purposes. We engaged a third-party
consultant which 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:
(in thousands, except years)
Purchase
Price
Estimated
Useful lives
in Years
Estimated
Weighted Average
Useful lives
in Years
Intangible assets:
Internal use software ..................................... $4,690 5.00 2.64
Agent relationships ...................................... 2,900 10.00 3.26
Trademark ............................................. 1,020 7.00 0.80
Tradename and non-compete agreements ..................... 280 2.00 0.07
Total ...................................................... $8,890 6.77
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