Redbox 2006 Annual Report Download - page 61

COINSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004
NOTE 5: ACCRUED LIABILITIES
Accrued liabilities consisted of the following at December 31:
2006 2005
(in thousands)
Payroll related expenses .................................... $10,961 $ 7,430
Interest payable ........................................... 3,176 2,998
Taxes payable ............................................ 2,944 2,269
Accrued professional fees ................................... 1,019 378
Accrued legal fees ......................................... 3,484 227
Service contract providers ................................... 5,170 2,964
Marketing ............................................... 399 2,177
Accrued medical insurance .................................. 1,684 1,742
Other ................................................... 6,856 6,756
$35,693 $26,941
During the fourth quarter of 2006, we recorded $1.6 million of expense for the proposed settlement of a
recently filed lawsuit alleging wage and hour violations under the California labor code. The lawsuit was
originated primarily from the employment practices of the acquired entertainment subsidiary prior to the
acquisition, of which we made no admission of liability.
NOTE 6: LONG-TERM DEBT
Long-term debt consisted of the following at December 31:
2006 2005
(in thousands)
Term loan ............................................. $186,952 $205,764
Less current portion ...................................... (1,917) (2,089)
Long-term debt ......................................... $185,035 $203,675
Credit facility: On July 7, 2004, we entered into a senior secured credit facility. The credit agreement
provided for advances totaling up to $310.0 million, consisting of a $60.0 million revolving credit facility and a
$250.0 million term loan facility. Fees for this facility of approximately $5.7 million are being amortized over the
life of the revolving line of credit and the term loan which are 5 years and 7 years, respectively. We amortize
deferred finance fees on a straight-line basis which approximates the effective interest method. Loans made
pursuant to the credit agreement are secured by a first security interest in substantially all of our assets and the
assets of our subsidiaries, as well as a pledge of our subsidiaries’ capital stock. The credit facility matures on
July 7, 2011. As of December 31, 2006, no amounts were outstanding under the revolving credit facility and our
original term loan balance of $250.0 million had been reduced to $187.0 million.
Advances under this credit facility may be made as either base rate loans (the higher of the Prime Rate or
Federal Funds Effective Rate) or LIBOR rate loans at our election. Applicable interest rates are based upon either
the LIBOR or base rate plus an applicable margin dependent upon a consolidated leverage ratio of outstanding
indebtedness to EBITDA (to be calculated in accordance with the terms specified in the credit agreement). Our
consolidated leverage ratios are based upon either LIBOR plus 200 basis points or the base rate plus 100 basis
points. At December 31, 2006, our interest rate on this facility was 7.4%.
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