Redbox 2014 Annual Report Download - page 101

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93
Capital Leases
We lease automobiles and computer equipment under capital leases expiring at various dates through 2019. In most
circumstances, we expect that, in the normal course of business, these leases will be renewed or replaced by other leases.
Assets held under capital leases are included in property and equipment, net on the Consolidated Balance Sheets and include
the following:
Dollars in thousands
December 31,
2014 2013
Gross property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 41,336 $ 48,992
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,831)(28,489)
Net property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,505 $ 20,503
As of December 31, 2014, our future minimum lease payments are as follows:
Dollars in thousands Capital Leases Operating Leases(1)
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,475 $ 18,527
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,110 13,617
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810 11,190
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 8,808
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 12,685
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 8,172
Total minimum lease commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,999 $ 72,999
Less: amounts representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (608)
Present value of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,391
Less: Current portion of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,026)
Long-term portion of capital lease obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,365
(1) Includes all operating leases having an initial or remaining non-cancelable lease term in excess of one year.
Purchase Commitments
We have entered into certain miscellaneous purchase agreements, primarily related to purchases of equipment, which resulted in
total purchase commitments of $62.0 million as of December 31, 2014.
Pursuant to the manufacturing and services agreement entered into as part of the NCR Asset Acquisition, Outerwall, Redbox or
an affiliate were committed to purchase goods and services from NCR for a period of five years from June 22, 2012. At the end
of the five-year period, if the aggregate amount paid in margin to NCR for goods and services delivered were to equal less than
$25.0 million, Outerwall was to pay NCR the difference between such aggregate amount and $25.0 million. We made purchases
in 2014 and 2013 that reduced this commitment by $2.1 million and $7.1 million, respectively. As of December 31, 2014, our
remaining commitment is $15.8 million under this arrangement.
Content License Agreements
On November 20, 2014 Redbox announced a contract extension with Paramount Home Entertainment under the existing terms.
The one-year extension maintains day-and-date access for our customers to Paramount titles through the end of 2015 and
requires us to issue 50,000 shares of additional restricted stock to Paramount during the first quarter of 2015 which will vest
immediately. See Note 9: Share-Based Payments for more information about our share-based payments for content
arrangements.