Redbox 2007 Annual Report Download - page 67

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recognized $2.7 million of income from equity investments, or 49% of the $5.5 million payable, related to our
equity interest in the third party. We received this refund in the amount estimated in February 2008.
In the second quarter of 2007, we entered into a loan agreement with Redbox in the amount of $10.0 million
and is recorded in Other Assets on the Consolidated Balance Sheet as of December 31, 2007. The principal amount
is due on May 1, 2010 at which time any accrued and unpaid interest is due. The note accrues interest at 11% per
annum. Interest payments are first due on May 1, 2009 and then on each three month period thereafter through
May 1, 2010.
NOTE 18: SUBSEQUENT EVENTS
On January 1, 2008, we exercised our option to acquire a majority ownership interest in the voting equity of
Redbox under the terms of the LLC Interest Purchase Agreement dated November 17, 2005. In conjunction with the
option exercise and payment of $5.1 million, our ownership interest increased from 47.3% to 51.0%. Since our
original investment in Redbox, we have been accounting for our 47.3% ownership interest under the equity method
in our Consolidated Financial Statements. Effective with the close of this transaction, January 18, 2008, we will
consolidate Redbox’s financial results into our Consolidated Financial Statements. We are currently in the process
of completing the purchase accounting for this acquisition.
Effective January 1, 2008, we completed the acquisition of GroupEx Financial Corporation, JRJ Express Inc.
and Kimeco, LLC (collectively, “GroupEx”), for an aggregate purchase price of up to $70.0 million. The purchase
price included a $60.0 million cash payment (subject to a customary working capital adjustment) at closing. Of the
$60.0 million paid at closing, $6.0 million is being held in escrow as partial security for the indemnification
obligations of the sellers under the agreement until the earlier of (1) the date eighteen months following the closing
and (2) the date thirty days after completion in calendar year 2009 of the 2008 calendar year audit. An additional
$34.0 million of the $60.0 million paid at closing is being held in escrow as partial security for the indemnification
obligations of the sellers under the agreement with respect to a lawsuit against GroupEx and one of the sellers,
which will be held until a final court order or written settlement agreement resolving such lawsuit has been
obtained. In addition, there is a contingent payment of up to $10.0 million should certain performance conditions be
met in the fifteen months following the closing. We are currently in the process of completing the purchase
accounting for this acquisition.
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