Redbox 2013 Annual Report Download - page 34

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25
Our segment operating expenses include the following categories:
Direct Operating
Direct operating expenses consist primarily of (1) amortization of our content library, (2) transaction fees and commissions we
pay to our retailers, (3) credit card fees and coin processing expenses, (4) field operations support, and (5) cost to acquire
devices that are resold to third parties through our ecoATM business. Variations in the percentage of transaction fees and
commissions we pay to our retailers may result in increased expenses. Such variations are based on certain factors, such as total
revenue, long-term non-cancelable contracts, installation of our kiosks in high traffic and/or urban or rural locations, new
product commitments, or other criteria.
Marketing
Our marketing expenses represent our cost of advertising, traditional marketing, on-line marketing, and public relations efforts
in national and regional advertising and major international markets.
Research and Development
Our research and development expenses consist primarily of the development costs of our kiosk software, network
applications, machine improvements, and new product development. Research and development expenses represent
expenditures to support development and design of our complementary new product ideas and to continue our ongoing efforts
to enhance our existing products and services.
General and Administrative
Our general and administrative expenses consist primarily of executive management, business development, supply chain
management, finance, management information system, human resources, legal, facilities, risk management, and administrative
support for field operations.
Depreciation and Amortization
Our depreciation and other expenses consist primarily of depreciation charges on our installed kiosks as well as on computer
equipment and leased automobiles.
Detailed financial information about our business segments, including geographic financial information and significant
customer relationships is provided in Note 16: Business Segments and Enterprise-Wide Information in our Notes to
Consolidated Financial Statements.