Redbox 2008 Annual Report Download - page 65

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 following condensed
balance sheet data is preliminary and presents the fair value of the assets acquired and liabilities assumed.
(In thousands)
Assets acquired:
Cash and cash equivalents . . . ........................................ $ 26,807
Trade accounts receivable ............................................ 13,531
Prepaid expenses and other assets ...................................... 2,053
Property and equipment ............................................. 4,015
Intangible assets ................................................... 15,300
Goodwill ........................................................ 56,930
118,636
Liabilities assumed:
Accounts payable and accrued liabilities ................................. 46,536
$ 72,100
Goodwill of $56.9 million, representing the excess of the purchase price paid over the fair value of the tangible and
identifiable intangible assets acquired, will not be amortized, consistent with the guidance in FASB Statement No. 142,
Goodwill and Other Intangible Assets. An election pursuant to Internal Revenue Code Section 338(h)(10) is being made
for tax purposes so the entire amount of intangibles and goodwill will be amortized and deducted over 15 years. Included
in the liabilities assumed, is an estimated additional payment of $10.0 million which represents our best estimate that
certain performance conditions as defined in the agreement, would be met in the fifteen months following the closing. As
of December 31, 2008, we believe the estimated payout is probable as the performance conditions have been met and we
expect the payment will be made in 2009.
We used forecasted 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)
Intangible assets:
Internal use software ............................................... $ 1,600
Agent relationships................................................. 12,300
Trademark ....................................................... 1,400
Total ............................................................. $15,300
Amortization expense for the year ended 2008, relating to this acquisition was approximately $2.0 million.
Based on identified intangible assets recorded as of December 31, 2008, and assuming no subsequent impairment of
the underlying assets, the estimated aggregate amortization expense will be as follows:
(In thousands)
2009 ............................................................. $ 2,017
2010 ............................................................. 2,017
2011 ............................................................. 1,550
2012 ............................................................. 1,550
2012 ............................................................. 1,230
Thereafter ......................................................... 4,919
$13,283
Redbox
In January 2008, we exercised our option to acquire a majority ownership interest in the voting equity of
Redbox and our ownership interest increased from 47.3% to 51.0%.
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