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19
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related
notes thereto included elsewhere in this Annual Report. Except for the consolidated historical information, the following
discussion contains forward-looking statements. Actual results could differ from those projected in the forward-looking
statements. Please refer to “Special Note Regarding Forward-Looking Statements” and “Risk Factors” elsewhere in this
Annual Report.
Overview
On June 27, 2013, we changed our name to Outerwall Inc. The name change reflects the evolution of our company from a
single coin-counting kiosk business into multiple automated retail businesses. The name Outerwall was selected as an umbrella
corporate brand that encompasses our current operations and provides a platform for future retail opportunities. In connection
with our name change, we now refer to our Coin business segment as the Coinstar business segment.
We are a leading provider of automated retail solutions offering convenient products and services that benefit consumers and
drive incremental retail traffic and revenue for retailers. Collectively our business segments and strategic investments operate
within five consumer sectors: Entertainment, Money, Beauty & Consumer Packaged Goods, Health and Electronics.
Our automated retail business model leverages technology advancements that allow delivery of new and innovative consumer
products in a compact, automated format. We believe this model positions us to address retailers’ increasing need to provide
more in less space driven by increased urbanization and consumers’ increasing expectation of instant gratification. Our
products and services can be found at approximately 65,800 kiosks in leading supermarkets, drug stores, mass merchants,
financial institutions, convenience stores, malls and restaurants.
Core Offerings
We have two core businesses:
• Our Redbox business segment (“Redbox”), where consumers can rent or purchase movies and video games from self-
service kiosks is focused on the entertainment consumer sector.
• Our Coinstar business segment (“Coinstar”) is focused on the money consumer sector and provides self-service kiosks
where consumers can convert their coins to cash, convert coins and paper bills to stored value products and exchange
gift cards for cash.
New Ventures
We identify, evaluate, build or acquire and develop innovative new self-service concepts in the automated retail space in our
New Ventures business segment (“New Ventures”). Self-service kiosk concepts we are currently exploring in the marketplace
represent the Electronics and Beauty & Consumer Packaged Goods consumer sectors. New Ventures concepts are regularly
assessed to determine whether continued funding or other alternatives are appropriate. Subsequent to our acquisition of
ecoATM in the third quarter of 2013, results from ecoATM are now included within our New Ventures segment results. See
Note 3: Business Combinations in our Notes to Consolidated Financial Statements for more information.
Strategic Investments and Joint Venture
We make strategic investments in external companies that provide automated self-service kiosk solutions. Current investments
address the Health sector with our investment in Solo-Health, Inc. and the Entertainment sector through our Redbox Instant by
Verizon joint venture. See Note 6: Equity Method Investments and Related Party Transactions in our Notes to Consolidated
Financial Statements for more information and Note 3: Business Combinations for our acquisition of ecoATM, one of our prior
strategic investments.
Strategy
Our strategy is based upon leveraging our core competencies in the automated retail space to provide the consumer with
convenience and value and to help retailers drive incremental traffic and revenue. Our competencies include success in building
strong consumer and retailer relationships, and in deploying, scaling and managing kiosk businesses. We build strong retailer
relationships by providing retailers with turnkey solutions that complement their businesses without significant outlays of time