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48
OUTERWALL INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
Year Ended December 31,
2013 2012 2011
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,306,601 $ 2,199,884 $ 1,844,046
Expenses:
Direct operating(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,575,277 1,498,819 1,280,237
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,402 25,979 28,450
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,084 6,757 7,551
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221,776 204,519 157,422
Depreciation and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,161 179,027 144,632
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,933 5,378 2,740
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,045,633 1,920,479 1,621,032
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260,968 279,405 223,014
Other income (expense), net:
Income (loss) from equity method investments, net (Note 6) . . . . . . . . . . . . . . . . . 19,928 (5,184)(1,591)
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,801)(15,648)(23,822)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,527)(180) 256
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,400)(21,012)(25,157)
Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . 242,568 258,393 197,857
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,477)(97,941)(74,923)
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208,091 160,452 122,934
Loss from discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,299)(10,222)(19,051)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174,792 150,230 103,883
Other comprehensive income (Note 15):
Foreign currency translation adjustment(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 856 1,048 (255)
Reclassification of interest rate hedges to interest expense. . . . . . . . . . . . . . . . . . . — — 896
Loss on short-term investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (20)
Income tax expense related to items of other comprehensive income . . . . . . . . . . — — (342)
Other comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 856 1,048 279
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 175,648 $ 151,278 $ 104,162
Basic earnings (loss) per share:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.65 $ 5.30 $ 4.02
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.23)(0.34)(0.62)
Basic earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.42 $ 4.96 $ 3.40
Diluted earnings (loss) per share:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.33 $ 4.99 $ 3.86
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.17)(0.32)(0.60)
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.16 $ 4.67 $ 3.26
Weighted average shares used in basic per share calculations. . . . . . . . . . . . . . . . . . . 27,216 30,305 30,520
Weighted average shares used in diluted per share calculations . . . . . . . . . . . . . . . . . 28,381 32,174 31,869
(1) “Direct operating” excludes depreciation and other of $130.3 million, $127.2 million and $120.4 million for 2013,
2012, and 2011 respectively.
(2) Foreign currency translation adjustment had no tax effect in 2013, 2012, or 2011.
See accompanying Notes to Consolidated Financial Statements