Redbox 2007 Annual Report Download - page 56

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NOTE 5: INTANGIBLE ASSETS
The gross carrying amounts and related accumulated amortization as well as the range of estimated useful lives
of identifiable intangible assets at the reported balance sheet dates were as follows:
Range of
Estimated
Useful Lives
(in years)
Estimated
Weighted
Average
Useful Lives
(in years)
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
2007 2006
December 31,
(In thousands)
Intangible assets:
Retailer relationships . . . 3 - 10 9.07 $44,005 $(17,180) $49,757 $(11,517)
Other identifiable
intangible assets .... 1-40 9.42 10,686 (3,054) 6,382 (1,501)
Total ................ $54,691 $(20,234) $56,139 $(13,018)
In February 2008, we reached an agreement with Wal-Mart to significantly expand our coin-counting
machines and our DVD kiosks installed at Wal-Mart locations over the next 12 to 18 months. In conjunction
with the expansion, we will be removing approximately 50% of our cranes, bulk heads and kiddie rides from our
existing Wal-Mart locations. This decision, along with other contract terminations or decisions to scale-back the
number of entertainment machines with other retail partners as well as macro-economic trends negatively affecting
the entertainment service industry, resulted in a non-cash impairment charge of $7.9 million relating to the
impairment of certain intangible assets. The intangible assets related to the Wal-Mart retailer relationship were not
considered impaired due to expansion of the overall Wal-Mart business described above.
Based on identifiable intangible assets recorded as of December 31, 2007, and assuming no subsequent
impairment of the underlying assets, the annual estimated aggregate future amortization expenses are as follows:
(In thousands)
2008 ............................................................. $ 6,734
2009 ............................................................. 6,432
2010 ............................................................. 5,701
2011 ............................................................. 4,455
2012 ............................................................. 3,834
Thereafter ......................................................... 7,301
$34,457
NOTE 6: ACCRUED LIABILITIES
Accrued liabilities consisted of the following as of December 31:
2007 2006
(In thousands)
Payroll related expenses ......................................... $12,610 $10,961
Interest payable ............................................... 616 3,176
Taxes payable ................................................. 4,068 2,944
Accrued professional fees ........................................ 1,659 4,503
Service contract providers ........................................ 5,451 5,170
Accrued medical insurance ....................................... 1,951 1,684
Payable related to related party for telecommunication fee refund........... 5,547 —
Other ....................................................... 9,009 7,255
$40,911 $35,693
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