Redbox 2012 Annual Report Download - page 67

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Pro forma information
The following unaudited pro forma information represents the results of operations for Coinstar, Inc. and
includes the self-service entertainment DVD kiosk business acquired from NCR as if the NCR Asset Acquisition
was consummated as of January 1, 2011. There are no material non-recurring pro forma adjustments and the pro
forma information may differ from actual results.
Dollars in thousands Year Ended December 31,
2012 2011
Revenue ............................................ $2,248,148 $1,959,686
Net income from continuing operations ................... $ 138,790 $ 93,651
Earnings per share from continuing operations:
Basic .......................................... $ 4.58 $ 3.07
Diluted ......................................... $ 4.31 $ 2.94
NOTE 4: PROPERTY AND EQUIPMENT
Dollars in thousands December 31,
2012 2011
Kiosks and components ................................ $1,026,989 $ 887,237
Computers, servers, and software ........................ 195,756 123,766
Office furniture and equipment .......................... 6,538 4,791
Vehicles ............................................ 7,278 9,077
Leasehold improvements ............................... 19,743 14,673
Property and equipment, at cost ......................... 1,256,304 1,039,544
Accumulated depreciation and amortization ................ (684,946) (540,366)
Property and equipment, net ........................ $ 571,358 $ 499,178
During the third quarter of 2012, we evaluated the company-wide strategy for our common kiosk platform
project. As a result, we updated our objective and direction for our software development plans, and adjusted our
internal use software projects. A portion of our capitalized internal-use software in the amount of $2.5 million
was expensed and included in the Depreciation and Other line item within our Consolidated Statements of
Comprehensive Income.
NOTE 5: EQUITY METHOD INVESTMENTS AND RELATED PARTY TRANSACTIONS
Redbox InstantTM by Verizon
In February 2012, Redbox and Verizon Ventures IV LLC (“Verizon”), a wholly owned subsidiary of Verizon
Communications Inc., entered into a Limited Liability Company Agreement (the “LLC Agreement”) and related
arrangements. The LLC Agreement governs the relationship of the parties with respect to a joint venture, Redbox
Instant by Verizon (the “Joint Venture”) formed for the primary purpose of developing, launching, marketing and
operating a nationwide “over-the-top” video distribution service to provide consumers with access to video
programming content, including linear content, delivered via broadband networks to video enabled viewing
devices and offering rental of physical DVDs and Blu-ray Discs from Redbox kiosks. Redbox initially acquired a
35.0% ownership interest in the Joint Venture and made an initial capital contribution of $14.0 million in cash in
February 2012 subsequent to the formation of the Joint Venture. The Joint Venture board of managers may
request each member to make additional capital contributions, on a pro rata basis relative to its respective
ownership interest. If a member does not make any or all of its requested capital contributions, as the case may
be, the other contributing member generally may make such capital contributions. So long as Redbox contributes
its pro rata share of the first $450.0 million of capital contributions to the Joint Venture, Redbox’s interest cannot
be diluted below 10.0%. During the third quarter of 2012, at the request of the Joint Venture board of managers,
Redbox made a cash payment of $10.5 million representing its pro-rata share of the requested capital
contribution.
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