Redbox 2010 Annual Report Download - page 42

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Year Ended December 31, Change
2009 2008 $ %
DVD Services ................................................ $ 969 $1,026 $(57) (5.6)%
Coin Services ................................................. 2,594 2,540 54 2.1%
Total .................................................... $3,563 $3,566 $ (3) (0.1)%
Year Ended December 31,
2010 2009 2008
Amortization as a percentage of revenue:
DVD Services ....................................................... 0.1% 0.1% 0.3%
Coin Services ........................................................ 0.9% 1.0% 1.0%
Total ........................................................... 0.2% 0.3% 0.5%
Unamortized intangible assets totaled $9.6 million at December 31, 2010 and will be amortized at the rate of
approximately $0.7 million per quarter in 2011, $0.6 million per quarter in 2012 and 2013, $0.4 million per
quarter in 2014 and the remaining balance of $0.4 million will be amortized thereafter.
Litigation Settlement
In April 2010, we settled patent litigation with ScanCoin for $5.4 million, inclusive of $2.1 million in legal costs
previously capitalized in anticipation of a successful defense of the patents. The entire settlement was expensed
during the first quarter of 2010.
Interest Expense
Interest expense in 2010 and 2009 includes interest expense related to our $200 million convertible senior notes,
which includes both cash interest expense and non-cash interest expense for the amortization of the related debt
issuance and debt discount costs. The unamortized debt issuance and debt discount as of December 31, 2010 was
$26.9 million and will be recognized as non-cash interest expense over the remaining life of the notes in the
amount of $6.6 million in 2011, $7.1 million in 2012, $7.7 million in 2013, and $5.5 million in 2014. Interest
expense in 2009 and 2008 included interest expense related to our $87.5 million term loan until its early
retirement due to the issuance of our $200 million convertible senior notes in September 2009.
Dollars in thousands Year Ended December 31, Change
2010 2009 $ %
Cash interest expense .................................... $26,408 $30,566 $ (4,158) (13.6)%
Non-cash interest expense ................................ 8,456 3,682 4,774 129.7%
Total interest expense ............................... $34,864 $34,248 $ 616 1.8%
Year Ended December 31, Change
2009 2008 $ %
Cash interest expense .................................... $30,566 $21,019 $ 9,547 45.4%
Non-cash interest expense ................................ 3,682 503 3,179 632.0%
Total interest expense ............................... $34,248 $21,522 $12,726 59.1%
The increase in interest expense in 2010 compared to 2009 was primarily due to the amortization of non-cash
interest expense from our convertible debt discount, partially offset by the lower debt balance as we paid down
our revolving credit facility by $75 million in August 2010.
The increase in interest expense in 2009 compared to 2008 was primarily due to the increase in borrowings in
order to acquire the remaining 49% interest in Redbox.
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