Redbox 2008 Annual Report Download - page 77

compensation. We make contributions to the plan matching 50% of the employees’ contribution up to 10% of their
compensation. Matching contributions were $0.5 million, $0.7 million and $0.7 million for the years ended
December 31, 2008, 2007 and 2006, respectively.
Redbox also sponsors a 401(k) plan, and contributes to the plan matching 25% of the Redbox employees’
contributions up to 4% of their compensation. Matching contributions for the Redbox 401(k) plan were $0.3 million
in 2008.
NOTE 14: TERMINATION OF SUPPLIER RELATIONSHIP
Through April 1999, Scan Coin AB (“ScanCoin”) of Malmo, Sweden, was our sole source provider of our
coin-counting devices. Coinstar and ScanCoin have been in a contract dispute since September 1998, at which time
ScanCoin claimed that we had breached the contract and made claims to certain of our intellectual property. On
May 5, 1999, ScanCoin terminated its agreement with us and reasserted the breach of contract claim and the claim
to certain of our intellectual property. The parties have been working to settle the dispute amicably since that time.
There is no 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 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 and we responded with our statement of
defense in November 2007. 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 56 million
Swedish kronor (estimated to be approximately $7 million at December 31, 2008), plus interest. The arbitration is
scheduled for 2009. 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. ScanCoin North America has moved to stay the case pending resolution of the arbitration.
NOTE 15: BUSINESS SEGMENT INFORMATION
FASB Statement No. 131, Disclosure about Segments of an Enterprise and Related Information, requires that
companies report, on an interim basis, separately in the financial statements certain financial and descriptive
information about segment revenues, income and 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”). In early 2008, we assessed our business segments due to changes in our business and product lines
as well as our organizational structure. We redefined our business segments from North America and International
to Coin and Entertainment services, DVD services, Money Transfer services and E-payment services. The
following table demonstrated our revenues by product lines:
2008 2007 2006
Year Ended December 31,
(In thousands)
Revenue:
Coin and entertainment services:
Coin revenue .................................. $261,303 $250,876 $229,908
Entertainment revenue............................ 150,220 238,912 273,490
Subtotal ...................................... 411,523 489,788 503,398
DVD services .................................... 388,453 9,530 4,453
Money transfer services ............................ 87,424 24,155 9,002
E-payment services................................ 24,500 22,824 17,589
Consolidated revenue ................................ $911,900 $546,297 $534,442
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