Redbox 2011 Annual Report Download - page 68

The Notes were recorded at the estimated fair value at closing. The Notes and accrued interest of $2.7 million
were paid during the second and third quarters of 2009.
The purchase of the non-controlling interests in Redbox was a change of our ownership interest in a previously
consolidated subsidiary and was accounted for as an equity transaction. Accordingly, there was no gain or loss
recorded in our consolidated financial statements. The difference between the fair value of the total
considerations and the carrying value of the non-controlling interest purchased was recognized as a reduction of
equity. The amounts recorded to equity, net of tax, were as follows (in thousands):
February 26,
2009
Fair value of consideration paid less the carrying value of the non-controlling
interests ...................................................... $112,529
Less:
Tax benefit—reduction in equity ................................ (43,886)
Tax benefit—section 754 election ................................ (12,340)
Total amounts recorded to equity, net of tax .................... $ 56,303
NOTE 4: DISCONTINUED OPERATIONS, SALE OF ASSETS AND ASSETS OF BUSINESS HELD
FOR SALE
Money Transfer Business (the “Money Transfer Business”)
On June 9, 2011, we completed the sale transaction of the Money Transfer Business to Sigue Corporation
(“Sigue”). We received $19.5 million in cash and a note receivable of $29.5 million (the “Sigue Note”). In
December 2011, as part of the sale transaction, we were required to provide Sigue with an additional loan of $4.0
million under terms consistent with the Sigue Note. See Note 17: Fair Value for additional details about the
Sigue Note.
We estimated the fair value of the Sigue Note at approximately $24.4 million, which was based on the discounted
cash flows of the future note payments and was not an exit price based measure of fair value or the stated value
on the face of the Sigue Note. The discount rate used in our fair value estimate was the market rate for similar
risk profile companies and represented our best estimate of default risk. During 2011, we recognized $1.9 million
of interest income base on the imputed interest rate of the Sigue Note and received $1.3 million in interest
payments from Sigue based on the nominal interest rate of the Sigue note.
On June 9, 2011, the sold assets and liabilities of the Money Transfer Business primarily consisted of the
following (in thousands):
Dollars in thousands
June 9,
2011
Cash and cash equivalents ........................................... $ 57,893
Accounts receivable, net ............................................ 33,185
Other current assets ................................................ 13,560
Property, plant and equipment, net .................................... 4,066
Goodwill, intangible, and other assets .................................. 8,162
Total assets ................................................... 116,866
Accounts payable and payable to agents ................................ 65,464
Accrued liabilities ................................................. 13,062
Total liabilities ................................................ 78,526
Net assets sold .................................................... $ 38,340
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