Redbox 2011 Annual Report Download - page 69

The net assets disposed represent the fair value less cost to sell the Money Transfer Business. The loss on
disposal activities recognized in 2011 and 2010 was allocated to the asset disposal group including property,
plant and equipment, net, intangible and other assets.
During the second quarter of 2010, the Money Transfer Business asset group met accounting requirements to be
presented as assets held for sale in our Consolidated Balance Sheets and a discontinued operation in our
Consolidated Statements of Net Income. The business assets and liabilities held for sale were reported based on
their estimated fair value less cost to sell estimated using the market approach. The carrying value of the assets
and liabilities exceeded the estimated fair value less cost to sell thereby failing step one of our impairment test.
Upon conducting step two of the impairment test, the implied goodwill of the Money Transfer Business exceeded
the carrying value of its goodwill resulting in no goodwill impairment. We performed our goodwill impairment
test each quarter thereafter until disposition. During 2010, there was no goodwill impairment. In 2009, the
Money Transfer Business failed our goodwill impairment test, which resulted in a charge of $7.4 million in the
fourth quarter of 2009, which is included within income (loss) from discontinued operations, net of tax on our
Consolidated Statements of Net Income for 2009.
Electronic Payment Business (the “E-Pay Business”)
On May 25, 2010, we sold our subsidiaries comprising the E-Pay Business to InComm Holdings, Inc. and
InComm Europe Limited (collectively “InComm”) for an aggregate purchase price of $40.0 million. In addition,
the purchase price was subject to a post-closing net working capital adjustment in the amount of $0.5 million,
which was finalized in October 2010. The disposed assets and liabilities consisted of the following:
Dollars in thousands
May 25,
2010
Current assets ...................................................... $24,862
Property, plant and equipment, net ..................................... 2,574
Goodwill, intangible, and other assets ................................... 11,638
Total assets .................................................... 39,074
Current liabilities ................................................... 27,717
Net assets sold ..................................................... $11,357
Entertainment Business
On September 8, 2009, we sold our subsidiaries comprising our Entertainment Business to National
Entertainment Network, Inc. (“National”) for nominal consideration. With the transaction, National assumed the
operations of the Entertainment Business, including substantially all of the Entertainment Business’s related
assets and liabilities. The disposed assets and liabilities consisted of the following:
Dollars in thousands
September 8,
2009
Current assets ................................................... $29,378
Property, plant and equipment, net ................................... 35,233
Intangible assets ................................................. 4,410
Other assets ..................................................... 3,062
Total assets ................................................. 72,083
Total liabilities ................................................... 25,596
Net assets sold ................................................... $46,487
As a result of the sale, we recorded a pre-tax loss on disposal of $49.8 million and a one-time tax benefit of $82.2
million during the third quarter of 2009.
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