Redbox 2014 Annual Report Download - page 96

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88
Note 13: Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing the net income for the period by the weighted average number of
common shares outstanding during the period. Diluted EPS is computed by dividing the net income for the period by the
weighted average number of common and dilutive potential common shares outstanding during the period. We consider
restricted stock that provides the holder with a non-forfeitable right to receive dividends to be a participating security. Net
income available to participating securities was not material for the periods presented.
Net income used for calculating basic and diluted EPS is the same for all periods presented. The following table sets forth the
computation of shares used for the basic and diluted EPS calculations:
Year Ended December 31,
In thousands 2014 2013 2012
Weighted average shares used for basic EPS . . . . . . . . . . . . . . . . . . . . . . 20,192 27,216 30,305
Dilutive effect of stock options and other share-based awards. . . . . . . . . 277 447 598
Dilutive effect of convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 718 1,271
Weighted average shares used for diluted EPS. . . . . . . . . . . . . . . . . . . . . 20,699 28,381 32,174
Stock options and share-based awards not included in diluted EPS
calculation because their effect would be antidilutive . . . . . . . . . . . . . . . 12 14 139
Note 14: Business Segments and Enterprise-Wide Information
Management, including our chief operating decision maker, who is our CEO, evaluates the performances of our business
segments primarily on segment revenue and segment operating income before depreciation, amortization and other, and share-
based compensation granted to executives, non-employee directors and employees (“segment operating income”). Segment
operating income contains internally allocated costs of our shared service support functions, including but not limited to,
corporate executive management, business development, sales, finance, legal, human resources, information technology and
risk management. We also review depreciation and amortization allocated to each segment. Share-based payments expense
related to share-based compensation granted to executives, non-employee directors and employees and expense related to the
rights to receive cash issued in connection with our acquisition of ecoATM are not allocated to our segments and are included in
the corporate unallocated column in the analysis and reconciliation below; however, share-based payments expense related to
our content arrangements with certain movie studios has been allocated to our Redbox segment and is included within direct
operating expenses. Our performance evaluation does not include segment assets.
On July 23, 2013, we completed the acquisition of ecoATM. Prior to July 23, 2013 we held a non-controlling equity interest in
ecoATM and reported our share of ecoATM's operating results in loss from equity method investments in our Consolidated
Statements of Comprehensive Income. Subsequent to our acquisition of ecoATM on July 23, 2013, the assets acquired and
liabilities assumed, as well as the results of operations, with the exception of expense for rights to receive cash which are
unallocated corporate expenses, are included in our New Ventures segment as our chief operating decision maker reviews the
results in aggregate with other new ventures concepts.
During the year ended December 31, 2013, we discontinued the Rubi, Crisp Market, Orango and Star Studio concepts and
accordingly their results of operations were reclassified from the New Ventures segment to Loss from discontinued operations,
net of tax in our Consolidated Statements of Comprehensive Income for all periods presented. See Note 12: Discontinued
Operations for further information.
Our analysis and reconciliation of our segment information to the consolidated financial statements that follows covers our
results of operations, which consists of our Redbox, Coinstar and New Ventures segments. Unallocated general and
administrative expenses relate to share-based compensation and expense related to the rights to receive cash issued in
connection with our acquisition of ecoATM.