Redbox 2007 Annual Report Download - page 65

assurance, however, that the disagreement will be settled amicably, and litigation may commence. In April 2007, we
received a request for arbitration filed by ScanCoin AB (“ScanCoin”) before the Arbitration Institute of the
Stockholm Chamber of Commerce regarding ownership of intellectual property related to an agreement between
Coinstar and ScanCoin dated April 23, 1993. The parties have selected arbitrators, and we advanced partial payment
for the arbitration. In August 2007, we received ScanCoin’s statement of claim. ScanCoin seeks a declaration of
ownership of over 70 of our patents and patent applications related to our coin-counting machines, as well as
monetary damages of approximately $8 million, plus interest. We believe that ScanCoin’s claims against us are
without merit and intend to defend ourselves vigorously in this arbitration. In October 2007, we filed a claim in
United States District Court for the Northern District of Illinois against ScanCoin North America alleging that it is
infringing on a patent we own relating to self-service coin machines.
NOTE 15: BUSINESS SEGMENT INFORMATION
FASB Statement No. 131, Disclosure about Segments of an Enterprise and Related Information, requires that
companies report separately in the financial statements certain financial and descriptive information about
operating segments profit or loss, certain specific revenue and expense items and segment assets. The method
for determining what information is reported is based on the way that management organizes the operating
segments for making operational decisions and assessments of financial performance. Our chief operating decision
maker is considered to be the Chief Executive Officer (“CEO”).
We are organized into two reportable business segments: the North American business (which includes the
United States, Canada and Mexico), and our International business (which primarily includes the United Kingdom
as well as other European operations of CMT). The total revenue of the North American segment mainly relates to
operations located within the United States, and the total revenue of the International segment mainly relates to the
operations located within the United Kingdom. Goodwill from the acquisition of CMT has been included in the
International business segment. Goodwill arising in all other acquisitions has been allocated to our North American
business segment. The entire charge in 2007 for asset impairment and inventory write-off has been allocated to our
North American business segment.
2007 2006 2005
Year Ended December 31,
(In thousands)
Revenue:
North American business ........................... $489,462 $500,462 $438,482
International business .............................. 56,835 33,980 21,257
Total revenue .................................. $546,297 $534,442 $459,739
Net (loss) income:
North American business ........................... $(11,635) $ 22,935 $ 22,402
International business .............................. (10,618) (4,308) (130)
Total net (Ioss) income ........................... $(22,253) $ 18,627 $ 22,272
2007 2006
December 31,
(In thousands)
Total assets:
North American business ..................................... $726,098 $694,650
International business........................................ 129,092 86,703
Intercompany eliminations .................................... (86,617) (63,270)
Total assets ............................................. $768,573 $718,083
Currently, management does not use product line financial performance as a basis for business operating
decisions. However, our CEO does analyze our revenue based on revenue generated from our coin-counting and
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