Redbox 2013 Annual Report Download - page 69

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60
Prior to the merger, we had a 23% equity interest in ecoATM. The guidance on accounting for business combinations requires
that an acquirer remeasure its previously held equity interest in the acquiree at its acquisition date fair value and recognize the
resulting gain or loss in earnings. We valued our previously held equity interest in ecoATM at $76.4 million, which was based
on the per share merger consideration, resulting in a gain of $68.4 million included within income (loss) from equity method
investments in our Consolidated Statements of Comprehensive Income and within (Income) loss from equity method
investments, net in our Consolidated Statements of Cash Flows.
The following table shows the amounts recognized as of the acquisition date for each major class of assets acquired and
liabilities assumed and the resultant purchase price allocation.
Dollars in thousands July 23, 2013
Assets acquired:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,846
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,450
Current deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,476
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,207
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,400
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264,213
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358,741
Liabilities assumed:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,755)
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,605)
Long term deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,742)
Total consideration transferred and fair value of previously held equity interest . . . . . . . . . . . . . . . . . . . . . . . $ 340,639
The assets acquired and liabilities assumed, as well as the results of operations from the date of the acquisition, are included
within our New Ventures segment with the exception of expense for rights to receive cash which are unallocated corporate
expenses. Goodwill of $264.2 million is calculated as the excess of the purchase price paid over the net assets acquired. The
goodwill recorded as part of the ecoATM acquisition primarily reflects the expected market opportunity from the expansion of
the ecoATM footprint in the growing U.S. mobile device market providing consumers with a convenient trade-in solution, as
well as any intangible assets that do not qualify for separate recognition. All of the goodwill has been assigned to our New
Ventures segment. None of the goodwill is deductible for tax purposes. The federal and state net operating loss carryforwards
are subject to limitations under Section 382 of the Internal Revenue Code and applicable state tax law.
Acquired identifiable intangible assets and their estimated useful life in years are as follows:
Dollars in thousands
Purchase
Price
Estimated
Useful Life in Years
Intangible assets:
Developed technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,000 5
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 5
Covenants not to compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 41,400