Discontinued Operations

12 Months Ended

Dec. 31, 2013

Discontinued Operations

Discontinued Operations

10.    Discontinued Operations

As of December 31, 2013, Blockbuster had ceased all material operations.  Accordingly, our Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income (Loss) and Consolidated Statements of Cash Flows have been recast to present Blockbuster as discontinued operations for all periods presented and the amounts presented in the Notes to our Consolidated Financial Statements relate only to our continuing operations, unless otherwise noted.

During the years ended December 31, 2013, 2012 and 2011, the revenue from our discontinued operations was $503 million, $1.085 billion and $974 million, respectively.  “Income (loss) from discontinued operations, before income taxes” for the same periods was a loss of $54 million, $62 million and $3 million, respectively.  In addition, “Income (loss) from discontinued operations, net of tax” for the same periods was a loss of $47 million, $37 million and $7 million, respectively.

As of December 31, 2013, the net assets from our discontinued operations consisted of the following:

	As of
	December 31, 2013
	(In thousands)
Current assets from discontinued operations	$	68,239
Noncurrent assets from discontinued operations	9,965
Current liabilities from discontinued operations	(49,471		)
Long-term liabilities from discontinued operations	(19,804		)
Net assets from discontinued operations	$	8,929

Blockbuster - Domestic

Since the Blockbuster Acquisition, we continually evaluated the impact of certain factors, among others, competitive pressures, the ability of significantly fewer company-owned domestic retail stores to continue to support corporate administrative costs, and other issues impacting the store-level financial performance of our company-owned domestic retail stores.  Certain factors, among others, previously led us to close a significant number of company-owned domestic retail stores during 2012 and 2013.  On November 6, 2013, we announced that Blockbuster would close all of its remaining company-owned domestic retail stores and discontinue the Blockbuster by-mail DVD service.  As of December 31, 2013, Blockbuster had ceased all material operations.

Blockbuster — Mexico

During the third quarter 2013, we determined that our Blockbuster operations in Mexico (“Blockbuster Mexico”) were “held for sale.”  As a result, we recorded pre-tax impairment charges of $19 million related to exiting the business, which was recorded in “Income (loss) from discontinued operations, net of tax” on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2013.  On January 14, 2014, we completed the sale of Blockbuster Mexico.

Blockbuster UK Administration

On January 16, 2013, Blockbuster Entertainment Limited and Blockbuster GB Limited, our Blockbuster operating subsidiaries in the United Kingdom, entered into administration proceedings in the United Kingdom (the “Administration”).  As a result of the Administration, we wrote down the assets of all our Blockbuster UK subsidiaries to their estimated net realizable value on our Consolidated Balance Sheets as of December 31, 2012.  In total, we recorded charges of approximately $46 million on a pre-tax basis related to the Administration, which was recorded in “Income (loss) from discontinued operations, net of tax” on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012.