10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-22555

OUTERWALL INC.

(Exact name of registrant as specified in its charter)

Delaware	94-3156448
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
1800 114th Avenue SE, Bellevue, Washington	98004
(Address of principal executive offices)	(Zip Code)

(425) 943-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yesý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at July 22, 2016
Common Stock, $0.001 par value	17,215,600

OUTERWALL INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):	3
	Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	3
	Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2016 and 2015	4
	Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2016	5
	Consolidated Statements of Cash Flows for the three and six months ended June 30, 2016 and 2015	6
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	55
Item 4.	Controls and Procedures	55
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	58
SIGNATURE		59

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OUTERWALL INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	June 30, 2016			December 31, 2015
Assets
Current Assets:
Cash and cash equivalents	$	199,048		$	222,549
Accounts receivable, net of allowances of $806 and $1,272	25,386			38,464
Content library	147,815			188,490
Prepaid expenses and other current assets	47,122			51,368
Total current assets	419,371			500,871
Property and equipment, net	270,414			316,013
Deferred income taxes	2,456			2,606
Goodwill and other intangible assets, net	532,934			540,514
Other long-term assets	1,489			2,207
Total assets	$	1,226,664		$	1,362,211
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	126,654		$	184,010
Accrued payable to retailers	100,332			115,098
Other accrued liabilities	155,347			141,437
Current portion of long-term debt and other long-term liabilities	18,418			17,131
Total current liabilities	400,751			457,676
Long-term debt and other long-term liabilities (Note 7)	766,570			893,517
Deferred income taxes	13,442			33,092
Total liabilities	1,180,763			1,384,285
Commitments and contingencies (Note 14)
Stockholders’ Equity (Deficit):
Preferred stock, $0.001 par value - 5,000,000 shares authorized; no shares issued or outstanding	—			—
Common stock, $0.001 par value - 60,000,000 authorized;
37,272,647 and 36,720,579 shares issued;
17,209,584 and 16,607,516 shares outstanding;	489,879			485,163
Treasury stock	(1,149,261		)	(1,151,063		)
Retained earnings	707,138			643,452
Accumulated other comprehensive income (loss)	(1,855		)	374
Total stockholders’ equity (deficit)	45,901			(22,074		)
Total liabilities and stockholders’ equity (deficit)	$	1,226,664		$	1,362,211

See accompanying Notes to Consolidated Financial Statements

3

OUTERWALL INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenue	$	518,027		$	545,369		$	1,053,983		$	1,154,005
Expenses:
Direct operating(1)	351,581			369,619			727,548			774,803
Marketing	7,422			8,047			16,644			16,467
Research and development	1,317			2,039			2,362			4,123
General and administrative	47,681			48,783			95,451			97,339
Restructuring and related costs(Note 9)	401			—			3,676			15,851
Depreciation and other	33,988			45,174			70,106			87,860
Amortization of intangible assets	3,790			3,309			7,580			6,618
Goodwill impairment	—			85,890			—			85,890
Total expenses	446,180			562,861			923,367			1,088,951
Operating income (loss)	71,847			(17,492		)	130,616			65,054
Other income (expense), net:
Loss from equity method investments, net	(208		)	(133		)	(415		)	(265		)
Interest expense, net	(10,301		)	(12,183		)	(10,543		)	(24,254		)
Other, net	223			642			1,452			(1,704		)
Total other income (expense), net	(10,286		)	(11,674		)	(9,506		)	(26,223		)
Income (loss) from continuing operations before income taxes	61,561			(29,166		)	121,110			38,831
Income tax expense	(21,013		)	(18,185		)	(42,111		)	(44,027		)
Income (loss) from continuing operations	40,548			(47,351		)	78,999			(5,196		)
Income (loss) from discontinued operations, net of tax	—			1,735			—			(4,821		)
Net income (loss)	40,548			(45,616		)	78,999			(10,017		)
Foreign currency translation adjustment(2)	(1,680		)	473			(2,229		)	3,327
Comprehensive income (loss)	$	38,868		$	(45,143	)	$	76,770		$	(6,690	)
Income (loss) from continuing operations attributable to common shares (Note 11):
Basic	$	38,615		$	(47,472	)	$	75,665		$	(5,465	)
Diluted	$	38,626		$	(47,472	)	$	75,681		$	(5,465	)
Basic earnings (loss) per common share (Note 11):
Continuing operations	$	2.39		$	(2.66	)	$	4.69		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Basic earnings (loss) per common share	$	2.39		$	(2.56	)	$	4.69		$	(0.57	)
Diluted earnings (loss) per common share (Note 11):
Continuing operations	$	2.38		$	(2.66	)	$	4.67		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Diluted earnings (loss) per common share	$	2.38		$	(2.56	)	$	4.67		$	(0.57	)
Weighted average common shares used in basic and diluted per share calculations (Note 11):
Basic	16,149			17,848			16,122			18,057
Diluted	16,244			17,848			16,216			18,057
Dividends paid per common share	$	0.60		$	0.30		$	0.90		$	0.60

(1) “Direct operating” excludes depreciation and other of $24.9 million and $51.1 millionfor thethree and six months ended June 30, 2016, respectively, and$29.6 millionand$58.0 millionfor the three and six months ended June 30, 2015, respectively.

(2) Foreign currency translation adjustment hadnotax effect for the three and six months endedJune 30, 2016 and 2015, respectively.

See accompanying Notes to Consolidated Financial Statements

4

OUTERWALL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share data)

(unaudited)

											Accumulated Other Comprehensive Income (Loss)
	Common Stock					Treasury Stock			Retained Earnings
	Shares		Amount											Total
Balance, March 31, 2016	17,228,741		$	485,171		$	(1,149,261	)	$	666,465	$	(175	)	$	2,200
Adjustments related to tax withholding for share-based compensation	(1,174	)	(47		)	—			—		—			(47		)
Share-based payments expense	(17,983	)	4,360			—			—		—			4,360
Tax benefit on share-based compensation expense	—		395			—			—		—			395
Net income	—		—			—			40,548		—			40,548
Dividends	—		—			—			125		—			125
Foreign currency translation adjustment(1)	—		—			—			—		(1,680		)	(1,680		)
Balance, June 30, 2016	17,209,584		$	489,879		$	(1,149,261	)	$	707,138	$	(1,855	)	$	45,901

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2016.

												Accumulated Other Comprehensive Income (Loss)
	Common Stock					Treasury Stock			Retained Earnings
	Shares		Amount												Total
Balance, December 31, 2015	16,607,516		$	485,163		$	(1,151,063	)	$	643,452		$	374		$	(22,074	)
Adjustments related to tax withholding for share-based compensation	(48,483	)	(1,472		)	—			—			—			(1,472		)
Share-based payments expense	650,551		7,876			1,802			—			—			9,678
Tax deficiency on share-based compensation expense	—		(1,688		)	—			—			—			(1,688		)
Net income	—		—			—			78,999			—			78,999
Dividends	—		—			—			(15,313		)	—			(15,313		)
Foreign currency translation adjustment(1)	—		—			—			—			(2,229		)	(2,229		)
Balance, June 30, 2016	17,209,584		$	489,879		$	(1,149,261	)	$	707,138		$	(1,855	)	$	45,901

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2016.

See accompanying Notes to Consolidated Financial Statements

5

OUTERWALL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Operating Activities:
Net income (loss)	$	40,548		$	(45,616	)	$	78,999		$	(10,017	)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other	33,988			45,174			70,106			93,718
Amortization of intangible assets	3,790			3,309			7,580			6,662
Share-based payments expense	5,174			3,289			9,504			7,192
Windfall excess tax benefits related to share-based payments	—			(160		)	—			(686		)
Deferred income taxes	(10,736		)	(1,392		)	(18,558		)	(3,939		)
Restructuring, impairment and related costs(2)	—			—			361			1,680
Loss from equity method investments, net	208			133			415			265
Amortization of deferred financing fees and debt discount	613			692			1,251			1,385
Gain from early extinguishment of debt	(418		)	—			(11,446		)	—
Goodwill impairment	—			85,890			—			85,890
Other	(244		)	383			(280		)	(816		)
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	6,322			3,254			13,185			15,077
Content library	7,723			24,703			40,849			34,659
Prepaid expenses and other current assets	(759		)	(18,976		)	5,263			(22,082		)
Other assets	170			154			333			322
Accounts payable	(17,055		)	(20,617		)	(52,460		)	(17,697		)
Accrued payable to retailers	10,248			6,931			(14,398		)	(11,510		)
Other accrued liabilities	(4,552		)	(12,008		)	11,521			1,112
Net cash flows from operating activities(1)	75,020			75,143			142,225			181,215
Investing Activities:
Purchases of property and equipment	(14,921		)	(19,508		)	(28,374		)	(40,217		)
Proceeds from sale of property and equipment	18			2,817			92			2,940
Net cash flows used in investing activities(1)	(14,903		)	(16,691		)	(28,282		)	(37,277		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	91,000			77,000			176,000			112,000
Principal payments on Credit Facility	(135,687		)	(68,875		)	(244,000		)	(185,750		)
Repurchases of notes (Note 7)	(2,179		)	—			(47,507		)	—
Repurchases of common stock	—			(22,023		)	—			(62,731		)
Dividends paid	(10,084		)	(5,417		)	(15,122		)	(11,019		)
Principal payments on capital lease obligations and other debt	(1,451		)	(3,033		)	(3,077		)	(6,278		)
Windfall excess tax benefits related to share-based payments	—			160			—			686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(47		)	1,887			(1,472		)	(1,201		)
Net cash flows used in financing activities(1)	(58,448		)	(20,301		)	(135,178		)	(154,293		)

6

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Effect of exchange rate changes on cash	(1,471		)	1,623		(2,266		)	5,367
Change in cash and cash equivalents	198			39,774		(23,501		)	(4,988		)
Cash and cash equivalents:
Beginning of period	198,850			197,934		222,549			242,696
End of period	$	199,048		$	237,708	$	199,048		$	237,708
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	8,620		$	10,933	$	20,670		$	22,846
Cash paid during the period for income taxes, net	$	38,890		$	53,905	$	40,951		$	66,896
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment financed by capital lease obligations	$	1,146		$	257	$	2,902		$	977
Purchases of property and equipment included in ending accounts payable	$	654		$	4,436	$	654		$	4,436

(1) During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in the 2015 periods presented. See Note 10: Discontinued Operationsfor cash flow disclosures related to our discontinued Redbox operations in Canada.

(2) The non-cash restructuring, impairment and related costs in the six months endedJune 30, 2015 of $1.7 million is composed of $6.9 million in impairments of lease related assets partially offset by a $5.2 million benefit resulting from the lease termination.

See accompanying Notes to Consolidated Financial Statements

7

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Note 1	Basis of Presentation and Principles of Consolidation	9
Note 2	Organization and Business	10
Note 3	Cash and Cash Equivalents	11
Note 4	Prepaid Expenses and Other Current Assets and Other Accrued Liabilities	11
Note 5	Property and Equipment	12
Note 6	Goodwill and Other Intangible Assets	12
Note 7	Debt and Other Long-Term Liabilities	14
Note 8	Share-Based Payments	16
Note 9	Restructuring	17
Note 10	Discontinued Operations	18
Note 11	Earnings Per Share	20
Note 12	Business Segments and Enterprise-Wide Information	21
Note 13	Fair Value	23
Note 14	Commitments and Contingencies	24
Note 15	Guarantor Subsidiaries	26
Note 16	Income Taxes From Continuing Operation	34
Note 17	Subsequent Events	34

8

OUTERWALL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1: Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial information included herein has been prepared by Outerwall Inc., pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements of Outerwall Inc. included herein reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary to present fairly our consolidated financial position, results of operations, and cash flows for the periods presented. The financial information as of December 31, 2015, is derived from our 2015 Annual Report on Form 10-K. The consolidated financial statements included within this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2015 Annual Report on Form 10-K.

The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.

The accompanying consolidated financial statements include the accounts of Outerwall Inc. and our wholly owned subsidiaries. Investments in companies of which we may have significant influence, but not a controlling interest, are accounted for using the equity method of accounting. All significant intercompany balances and transactions have been eliminated in consolidation.

Accounting Pronouncements Adopted During the Current Year

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, instead of as a deferred charge. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (Subtopic 835-30). This ASU provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We adopted this guidance on January 1, 2016, which resulted in the reclassification of $3.8 million of unamortized discount and deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Other than this reclassification, our adoption of ASU 2015-03 and ASU 2015-15 did not have a material impact to our consolidated financial statements and related disclosures. See Note 7: Debt and Other Long-Term Liabilitiesfor more information.

In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. We adopted this ASU on January 1, 2016. Our adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU describes how an entity’s management should assess whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management should consider both quantitative and qualitative factors in making its assessment.

If after considering management’s plans, substantial doubt about an entity’s going concern is alleviated, an entity shall disclose information in the footnotes that enables the users of the financial statements to understand the events that raised the going concern and how management’s plan alleviated this concern.

If after considering management’s plans, substantial doubt about an entity’s going concern is not alleviated, the entity shall disclose in the footnotes indicating that a substantial doubt about the entity’s going concern exists within one year of the date of the issued financial statements. Additionally, the entity shall disclose the events that led to this going concern and management’s plans to mitigate them.

9

We adopted this ASU on January 1, 2016. Our adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

Accounting Pronouncements Not Yet Adopted

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on our consolidated financial statements, from those disclosed in our 2015 Annual Report on Form 10-K, except for the following:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this ASU do not change the core revenue recognition principles, but provide guidance on certain narrow areas and add practical expedients. Early adoption is permitted to the original effective date of annual reporting periods beginning after December 15, 2016 for ASU 2014-09 and the related amendments and may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently in the process of evaluating the impact of ASU 2014-09 and the related amendments.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This ASU changes how companies account for certain aspects of share-based payment awards to employees, including accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. We are currently evaluating the impact of adopting this ASU and expect this standard to not have a significant impact on our consolidated financial statements and related disclosures, which is effective for us in our fiscal year beginning January 1, 2017. Early adoption is permitted.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. We are currently evaluating the impact of adopting this ASU and expect this standard to have a significant impact on our consolidated financial statements and related disclosures, which is effective for us in our fiscal year beginning January 1, 2019. Early adoption is permitted.

Note 2: Organization and Business

Description of Business

We are a leading provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers.

Our core offerings in automated retail include our Redbox, Coinstar and ecoATM segments. Our Redbox segment consists of self-service kiosks where consumers can rent or purchase movies and video games. Our Coinstar segment consists of self-service coin-counting kiosks where consumers can convert their coins to cash or stored value products. We also offer self-service kiosks that exchange gift cards for cash under our Coinstar™ Exchange brand. Our ecoATM segment consists of self-service kiosks and an online solution where consumers can sell electronic devices for cash and generates revenue through the sale of devices collected to third party resellers, through online marketplaces and through the Gazelle direct-to-consumer storefront.

In addition to our three reportable segments, we may also conduct business activities through other self-service concepts, where we identify, evaluate, build or acquire and develop new self-service retail concepts and regularly assess these concepts to determine whether continued funding or other alternatives are appropriate.

10

Our kiosks are located primarily in supermarkets, drug stores, mass merchants, convenience stores, financial institutions, malls and restaurants. Our kiosk and location counts as of June 30, 2016, are as follows:

	Kiosks	Locations
Redbox	39,970	32,710
Coinstar	20,810	19,560
ecoATM	2,460	2,230
Total	63,240	54,500

Note 3: Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Our cash and cash equivalents were $199.0 million and $222.5 million at June 30, 2016, and December 31, 2015, respectively. Of this total, cash equivalents were $5.1 million and $2.7 million, respectively, and consisted of money market demand accounts and investment grade fixed income securities such as money market funds, certificate of deposits, and commercial paper. Our cash balances with financial institutions may exceed the deposit insurance limits.

Included in our cash and cash equivalents at June 30, 2016, and December 31, 2015, were $74.7 million and $83.3 million, respectively that we identified for settling our accrued payables to our retailer partners in relation to our Coinstar kiosks.

Separately included in our cash and cash equivalents at June 30, 2016, and December 31, 2015, were $41.7 million and $46.2 million, respectively in cash and cash equivalents held in financial institutions domestically and $7.7 million and $9.0 million, respectively in cash and cash equivalents held in foreign financial institutions.

Note 4: Prepaid Expenses and Other Current Assets and Other Accrued Liabilities

Prepaid expenses and other current assets:

Dollars in thousands	June 30, 2016		December 31, 2015
Spare parts	$	11,616	$	9,780
Licenses	5,744		6,394
Electronic devices inventory	10,427		7,846
Income taxes receivable	1,953		9,517
Prepaid rent	1,365		1,043
DVD cases and labels	1,648		1,371
Other	14,369		15,417
Total prepaid and other current assets	$	47,122	$	51,368

Other accrued liabilities consist of the following:

Dollars in thousands	June 30, 2016		December 31, 2015
Payroll related expenses	$	34,779	$	40,676
Studio revenue share and other content related expenses	36,052		28,964
Business taxes	15,591		16,080
Insurance	13,549		13,594
Deferred revenue	12,498		11,201
Income taxes payable	13,372		16
Accrued interest expense	6,192		6,913
Accrued early lease termination and sublease expenses	3,859		4,991
Service contract provider expenses	5,288		4,070
Deferred rent expense	2,044		1,728
Other	12,123		13,204
Total other accrued liabilities	$	155,347	$	141,437

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Note 5: Property and Equipment

Dollars in thousands	June 30, 2016			December 31, 2015
Kiosks and components	$	1,162,872		$	1,163,210
Computers, servers, and software	195,809			193,507
Leasehold improvements	22,497			22,663
Office furniture and equipment	7,248			7,047
Vehicles	4,585			5,118
Property and equipment, at cost	1,393,011			1,391,545
Accumulated depreciation and amortization	(1,122,597		)	(1,075,532		)
Property and equipment, net	$	270,414		$	316,013

Note 6: Goodwill and Other Intangible Assets

Goodwill

The carrying amount of goodwill was as follow:

Dollars in thousands	June 30, 2016		December 31, 2015
Goodwill	$	473,417	$	473,417

During the second quarter of 2015, we recognized a goodwill impairment charge of $85.9 million related to ecoATM. The goodwill was originally recognized as part of our acquisition of ecoATM in 2013. During the three months ended June 30, 2015, it became evident that revenue and profitability trends in our ecoATM reporting unit were not being achieved as expected. As a result, we revised our internal expectations for future revenue growth and profitability lower than our previous estimates.

The expected future cash flows of our ecoATM reporting unit include key assumptions with inherent uncertainty which may change in future periods and may have a negative effect on the fair value resulting in potential future impairments, the most significant of which is our estimate of future cash flows predicated on estimated growth in kiosks, revenue and profitability measures. Additionally, fair value may be negatively impacted by changes in our strategy related to the ecoATM reporting unit and factors outside of our control such as increased competition from companies whose primary business consists of the purchase of used electronics and with companies in other businesses who also have buyback programs.

To evaluate whether it is more likely than not that the fair value of each of our reporting units are less than their respective carrying amounts as of June 30, 2016, we considered all relevant events and circumstances including, but not limited to, the performance of our reporting units compared to the estimates used in our most recent quantitative analysis, changes in our average market capitalization, and the excess of fair value for each of our reporting units over the carrying amounts of each of our reporting units as indicated by the first step of the goodwill impairment test completed in the fourth quarter of 2015. There have not been any events or changes in circumstances that we believe would more likely than not reduce the fair value of any of our reporting units below their carrying amounts.

On March 14, 2016, we announced that our Board of Directors has initiated a process to explore strategic and financial alternatives to maximize shareholder value. As a result of the exploration of strategic and financial alternatives, on July 24, 2016, the company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with affiliates of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”), a leading global alternative investment manager, pursuant to which the Apollo Funds will acquire all of the outstanding shares of Outerwall common stock for $52.00 per share in cash. The transaction will be completed through an all-cash tender offer. See Note 17: Subsequent Events for additional information. Through this process we did not obtain any additional information regarding the fair value of our reporting units that would indicate the fair value of any of our reporting units were individually below their carrying amounts.

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Other Intangible Assets

The gross amount of our other intangible assets and the related accumulated amortization were as follows:

Dollars in thousands	Amortization Period	June 30, 2016			December 31, 2015
Retailer relationships	5 - 10 years	$	53,295		$	53,295
Accumulated amortization		(29,217		)	(27,212		)
Retailer relationships, net		24,078			26,083
Developed technology	3 - 5 years	36,000			36,000
Accumulated amortization		(20,277		)	(16,544		)
Developed technology, net		15,723			19,456
Trade names	5 - 10 years	20,000			20,000
Accumulated amortization		(4,433		)	(3,133		)
Trade names, net		15,567			16,867
Other	1 - 40 years	10,800			10,800
Accumulated amortization		(6,651		)	(6,109		)
Other, net		4,149			4,691
Total intangible assets, net		$	59,517		$	67,097

Amortization expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Retailer relationships	$	1,002	$	1,003	$	2,005	$	2,006
Developed technology	1,867		1,700		3,733		3,400
Trade names	650		300		1,300		600
Other	271		306		542		656
Total amortization of intangible assets	3,790		3,309		7,580		6,662
Less: amortization included in discontinued operations	—		—		—		(44		)
Total amortization of intangible assets from continuing operations	$	3,790	$	3,309	$	7,580	$	6,618

Assuming no future impairment, the expected future amortization as of June 30, 2016, is as follows:

Dollars in thousands	Total
Remainder of 2016	$	7,580
2017	15,160
2018	11,598
2019	6,213
2020	5,819
Thereafter	13,147
Total expected amortization	$	59,517

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Note 7: Debt and Other Long-Term Liabilities

	Debt															Other Liabilities							Total
	Senior Notes						Credit Facility						Total Debt			Capital Lease Obligations			Asset Retirement Obligations		Other Long-term Liabilities
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of June 30, 2016:
Principal	$	320,614		$	228,598		$	129,375		$	80,000		$	758,587
Unamortized discount and deferred financing fees(1)	(2,922		)	(3,234		)	(224		)	(1,968		)	(8,348		)
Total	317,692			225,364			129,151			78,032			750,239			$	5,531		$	9,438	$	19,780	$	784,988
Less: current portion	—			—			(15,000		)	—			(15,000		)	(3,418		)	—		—		(18,418		)
Total long-term portion	$	317,692		$	225,364		$	114,151		$	78,032		$	735,239		$	2,113		$	9,438	$	19,780	$	766,570

	Debt															Other Liabilities							Total
	Senior Notes						Credit Facility						Total Debt			Capital Lease Obligations			Asset Retirement Obligations		Other Long-term Liabilities
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of December 31, 2015:
Principal	$	350,000		$	258,908		$	136,875		$	140,500		$	886,283
Unamortized discount and deferred financing fees(1)	(3,770		)	(4,083		)	(260		)	(2,300		)	(10,413		)
Total	346,230			254,825			136,615			138,200			875,870			$	5,889		$	9,412	$	19,477	$	910,648
Less: current portion	—			—			(13,125		)	—			(13,125		)	(4,006		)	—		—		(17,131		)
Total long-term portion	$	346,230		$	254,825		$	123,490		$	138,200		$	862,745		$	1,883		$	9,412	$	19,477	$	893,517

(1) As described in Note 1: Basis of Presentation and Principles of Consolidation, we adopted ASU 2015-03 and 2015-15 in the first quarter of 2016 and have applied the guidance to our Senior Notes and Credit Facility. Under this guidance, we are now presenting unamortized deferred financing fees as a direct deduction from the associated debt liability. Historically, unamortized deferred financing fees were included in other non-current assets. This adoption resulted in the reclassification of $3.8 million of unamortized deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Deferred financing fees are amortized on a straight line basis over the life of the related loan.

Interest Expense

Dollars in thousands	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Cash interest expense	$	10,141		$	11,499	$	20,795		$	22,894
Amortization of debt discount and deferred financing fees	613			692		1,251			1,385
Total cash and non-cash interest expense	10,754			12,191		22,046			24,279
Gain from early extinguishment of debt	(418		)	—		(11,446		)	—
Total interest expense	$	10,336		$	12,191	$	10,600		$	24,279

2019 Notes

On March 12, 2013, we entered into an indenture pursuant to which we issued $350.0 million principal amount of 6.000% Senior Notes due 2019 (the “2019 Notes”) at par for proceeds, net of expenses, of $343.8 million. Each of our direct and indirect U.S. subsidiaries guarantees the 2019 Notes.

During the second quarter of 2016, no notes were repurchased. During the six months ended June 30, 2016, we repurchased 29,386 notes, or $29.4 million in face value of notes, for $23.4 million in cash. The gain from early extinguishment of these notes was approximately $5.6 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

As of June 30, 2016, we were in compliance with the covenants of the related indenture.

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2021 Notes

On June 9, 2014, we entered into an indenture pursuant to which we issued $300.0 million principal amount of 5.875% Senior Notes due 2021 (the “2021 Notes”) at par for proceeds, net of expenses, of $294.0 million. Each of our direct and indirect U.S. subsidiaries guarantees the 2021 Notes.

During the second quarter of 2016, we repurchased 2,635 notes, or $2.6 million in face value of notes, for $2.2 million in cash. The gain from early extinguishment of these notes was approximately $0.4 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

During the six months ended June 30, 2016, we repurchased 30,310 notes, or $30.3 million in face value of notes, for $24.1 million in cash. The gain from early extinguishment of these notes was approximately $5.8 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

As of June 30, 2016, we were in compliance with the covenants of the related indenture.

Revolving Line of Credit and Term Loan

Our senior secured credit facility (the “Credit Facility”) consists of (a) a $150.0 million amortizing term loan (the “Term Loan”) and (b) a $600.0 million revolving line of credit (the “Revolving Line”), which includes (i) a $75.0 million sublimit for the issuance of letters of credit, (ii) a $50.0 million sublimit for swing line loans and (iii) a $75.0 million sublimit for loans in certain foreign currencies available to us and certain wholly owned Company foreign subsidiaries (the “Foreign Borrowers”). We may, subject to applicable conditions and subject to obtaining commitments from lenders, request an increase in the Revolving Line of up to $200.0 million in aggregate (the “Accordion”). As of June 30, 2016, the interest rate on amounts outstanding under the Credit Facility was 2.20% and we were in compliance with the covenants of the Credit Facility.

Required principal amortization payments under the Term Loan are as follows:

Dollars in thousands	Repayment Amount
Remainder of 2016	$	7,500
2017	15,000
2018	20,625
2019	86,250
Total	$	129,375

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Note 8: Share-Based Payments

We currently grant share-based awards to our executives, non-employee directors and employees under our 2011 Incentive Plan (the “Plan”). The Plan permits the granting of stock options, restricted stock, restricted stock units, and performance-based restricted stock.

Certain information regarding our share-based payments is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Share-based payments expense:
Share-based compensation - stock options	$	33	$	40	$	80	$	181
Share-based compensation - restricted stock	4,452		2,039		7,982		4,598
Share-based payments for content arrangements	813		1,241		1,628		2,482
Total share-based payments expense	$	5,298	$	3,320	$	9,690	$	7,261
Tax benefit on share-based payments expense	$	2,066	$	1,289	$	3,774	$	2,807

	June 30, 2016
Dollars in thousands	Unrecognized Share-Based Payments Expense		Weighted-Average Remaining Life
Unrecognized share-based payments expense:
Share-based compensation - stock options	$	83	0.7 years
Share-based compensation - restricted stock	18,349		2.4 years
Share-based payments for content arrangements	1,264		0.4 years
Total unrecognized share-based payments expense	$	19,696

Share-Based Compensation

Stock options

No stock options were granted in 2016.

Restricted stock and performance based restricted stock awards

Restricted stock awards are granted to eligible executives, non-employee directors and employees. Awards granted to employees and executives in 2016 vest annually in installments over three years (25% of the award vests one year from the grant date, 25% of the award vests two years from the grant date, and the remaining 50% of the award vests three years from the grant date). Non-employee director awards vest one year after the grant date. The fair value of non-performance-based awards is based on the market price on the grant date.

Performance-based restricted stock awards are granted to executives only, with established performance criteria approved by the Compensation Committee of the Board of Directors. Awards of performance-based restricted stock made in 2016, once earned, vest annually in equal installments over three years from the date of grant. The restricted shares require no payment from the grantee. The fair value of performance-based awards is based on achieving specific performance conditions and is recognized over the vesting period.

We estimate forfeitures for restricted stock awards and recognize share-based compensation expense for only those awards expected to vest.

16

The following table presents a summary of restricted stock award activity for 2016:

Shares in thousands	Restricted Stock Awards		Weighted Average Grant Date Fair Value
Non-vested, December 31, 2015	556		$	65.86
Granted	746		26.86
Vested	(155	)	64.45
Forfeited	(148	)	50.73
Non-vested, June 30, 2016	999		39.21

Share-Based Payments for Content Arrangements

We have granted restricted stock as part of content license agreements with certain movie studios. The expense related to these agreements is included within direct operating expenses in our Consolidated Statements of Comprehensive Income and is adjusted based on the number of unvested shares and market price of our common stock each reporting period. During the first quarter of 2016, 50,000 shares of restricted stock were granted and immediately vested pursuant to a revenue sharing agreement with Paramount.

Rights to Receive Cash

As a part of the acquisition of ecoATM, we issued replacement awards for unvested restricted stock and options in ecoATM with rights to receive cash equal to the per share merger consideration for restricted stock and net of the exercise price for options. The replacement awards vest in accordance with the terms of the original replaced award. The replacement awards are considered liability classified as they represent rights to receive cash. Expense associated with the post-combination awards is recognized net of forfeitures, and cash payments are made in accordance with the awards' vesting schedule, generally on a monthly basis. We recognized $0.8 million in expense associated with the issuance of rights to receive cash for the six months endedJune 30, 2016. The expected future recognition of expense associated with the rights to receive cash as of June 30, 2016 is as follows:

Dollars in thousands	Expected Expense
Remainder of 2016	$	594
2017	146
Remaining total expected expense	$	740

Note 9: Restructuring

2016 Restructuring

During the first half of 2016, we recorded restructuring charges arising from implementing actions to further align costs with revenues in our continuing operations primarily through workforce reductions across the company.

We do not expect significant future restructuring charges related to our first half 2016 restructuring activities.

2015 Restructuring

During the first quarter of 2015, we recorded restructuring charges arising from the following activities:

• Discontinuing our Redbox operations in Canada. The disposal was completed on March 31, 2015. See Note 10: Discontinued Operations for further information;

• Reducing the size of our Redbox headquarters facility in Oakbrook Terrace, Illinois through early termination of operating leases for certain floors. We ceased using the office space on March 31, 2015 and the effective date of the early termination is July 31, 2016. Prior to exercising our early termination option, the leases had been scheduled to expire in July 2021; and

• Implementing actions to further align costs with revenues in our continuing operations primarily through workforce reductions across the company and subleasing a floor of a corporate facility.

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The total amount incurred for restructuring and related costs from continuing operations is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Redbox
Severance	$	14	$	—	$	2,125	$	3,701
Lease termination and related costs (excluding related asset impairments)	—		—		297		4,567
Total Redbox restructuring costs	14		—		2,422		8,268
Coinstar
Severance	3		—		408		492
Lease termination and related costs (excluding related asset impairments)	—		—		57		24
Total Coinstar restructuring costs	3		—		465		516
ecoATM
Severance	384		—		782		127
Lease termination and related costs (excluding related asset impairments)	—		—		7		—
Total ecoATM restructuring costs	384		—		789		127
Total restructuring costs in continuing operations	401		—		3,676		8,911
Impairment of lease related assets	—		—		—		6,940
Total restructuring and related costs from continuing operations	$	401	$	—	$	3,676	$	15,851

A reconciliation of the beginning and ending liability balance by expense type is as follows:

Dollars in thousands	Severance Expense			Lease Termination Costs
Beginning Balance - January 1, 2016	$	1,385		$	4,991
Costs charged to expense	3,315			361
Costs paid or otherwise settled	(4,629		)	(1,493		)
Ending Balance - June 30, 2016	$	71		$	3,859

Note 10: Discontinued Operations

Summary Financial Information

On January 23, 2015, we made the decision to shut down our Redbox Canada operations as the business was not meeting the company's performance expectations. This represents a strategic shift which has a major effect on our operations as it represents a significant geographical area for our Redbox segment and the losses generated were significant to our total operations. On March 31, 2015, we completed the disposal of the Redbox Canada operations. As a result, we updated certain estimates used in the preparation of the financial statements and the remaining value of the content library and certain capitalized property and equipment consisting primarily of installation costs were amortized over the wind-down period ending March 31, 2015. We have reclassified the results of Redbox Canada to discontinued operations for all periods presented in our Consolidated Statements of Comprehensive Income.

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The following table sets forth the components of discontinued operations included in our Consolidated Statements of Comprehensive Income:

	Three Months Ended			Six Months Ended
Dollars in thousands	June 30, 2015			June 30, 2015
Major classes of line items constituting pretax loss of discontinued operations:
Revenue	$	—		$	1,557
Direct operating	35			4,304
Marketing	(17		)	112
General and administrative	35			154
Restructuring and related costs	—			522
Depreciation and other	—			5,858
Amortization of intangible assets	—			44
Other expense, net	166			(4,329		)
Pretax gain (loss) of discontinued operations related to major classes of pretax loss	113			(13,766		)
Income tax benefit(1)	1,622			8,945
Net income (loss) on discontinued operations	$	1,735		$	(4,821	)

(1) The income tax benefit for the three months and six months ended June 30, 2015 includes a benefit on the rate differential between the U.S. and Canada.

Significant operating and investing cash flows of Redbox Canada were as follows:

	Three Months Ended			Six Months Ended
Dollars in thousands	June 30, 2015			June 30, 2015
Net income (loss) on discontinued operations	$	1,735		$	(4,821	)
Adjustments to reconcile net gain (loss) to net cash flows from operating activities:
Depreciation and amortization	—			5,902
Content library	148			3,212
Prepaid and other current assets	690			1,234
Accounts payable	(1,095		)	(2,716		)
Accrued payables to retailers	—			(155		)
Other accrued liabilities	(585		)	(617		)
Net cash flows from operating activities	$	893		$	2,039
Investing activities:
Purchase of property, plant and equipment	—			(278		)
Total cash flows used in investing activities	$	—		$	(278	)

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Note 11: Earnings Per Share

The Two-Class Method is an earnings allocation formula that treats a participating security, as having rights to earnings that otherwise would have been available to common shareholders and assumes all earnings for the period are distributed. Our unvested restricted stock awards granted are participating securities as they entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock.

Basic and diluted weighted average shares were the same for the three and six month periods ended June 30, 2015, as the effects of potentially dilutive securities were antidilutive due to our net loss position. Our calculation of basic and diluted earnings per share is as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
In thousands, except per share data	2016			2015			2016			2015
Numerator
Income (loss) from continuing operations	$	40,548		$	(47,351	)	$	78,999		$	(5,196	)
Income (loss) from discontinued operations, net of tax	—			1,735			—			(4,821		)
Net income (loss)	$	40,548		$	(45,616	)	$	78,999		$	(10,017	)
Income from continuing operations	$	40,548		$	(47,351	)	$	78,999		$	(5,196	)
Dividends and undistributed income allocated to participating shares	(1,933		)	(121		)	(3,334		)	(269		)
Income from continuing operations to common shares - basic	38,615			(47,472		)	75,665			(5,465		)
Effect of reallocating undistributed income from continuing operations to participating shares	11			—			16			—
Income from continuing operations to common shares - diluted	$	38,626		$	(47,472	)	$	75,681		$	(5,465	)
Denominator
Weighted average common shares - basic	16,149			17,848			16,122			18,057
Dilutive effect of share-based payment awards	95			—			94			—
Weighted average common shares - diluted(1)	16,244			17,848			16,216			18,057
Basic earnings (loss) per common share:
Continuing operations	$	2.39		$	(2.66	)	$	4.69		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Basic earnings (loss) per common share	$	2.39		$	(2.56	)	$	4.69		$	(0.57	)
Diluted earnings (loss) per common share:
Continuing operations	$	2.38		$	(2.66	)	$	4.67		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Diluted earnings (loss) per common share	$	2.38		$	(2.56	)	$	4.67		$	(0.57	)
Stock options and share-based awards not included in diluted EPS calculation because their effect would have be antidilutive	248			14			121			16

(1) Participating securities were included in the calculation of diluted earnings per share using the two-class method, as this calculation was more dilutive than the calculation using the treasury stock method.

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Note 12: 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 (loss) before depreciation, amortization and other, and share-based compensation granted to executives, non-employee directors and employees (“segment operating income (loss)”). Segment operating income (loss) 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.

Comparability of Results

We regularly assess the performance of our concepts to determine whether continued funding or other alternatives are appropriate and as a result, we discontinued operating SAMPLEit in the fourth quarter of 2015. As SAMPLEit did not represent a major component of our operations or financial results, the results of SAMPLEit did not qualify to be reported as a discontinued operation and remain in our All Other reporting category.

On November 10, 2015, we acquired certain assets and liabilities of Gazelle, Inc. ("Gazelle"). Results of operations for Gazelle are included in ecoATM for the three and six months ended June 30, 2016.

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 ecoATM segments, Corporate Unallocated expenses and All Other. All Other includes the results of other self-service concepts, which we regularly assess to determine whether continued funding or other alternatives are appropriate.

Dollars in thousands
Three Months Ended June 30, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	389,059		$	84,168		$	44,800		$	—		$	—		$	518,027
Expenses:
Direct operating	271,731			42,095			37,291			83			381			351,581
Marketing	3,919			399			3,058			7			39			7,422
Research and development	—			—			1,194			—			123			1,317
General and administrative	31,325			8,494			3,573			2			4,287			47,681
Restructuring and related costs (Note 9)	14			3			384			—			—			401
Segment operating income (loss)	82,070			33,177			(700		)	(92		)	(4,830		)	109,625
Less: depreciation, amortization and other	(21,806		)	(7,595		)	(8,398		)	21			—			(37,778		)
Operating income (loss)	60,264			25,582			(9,098		)	(71		)	(4,830		)	71,847
Loss from equity method investments, net	—			—			—			—			(208		)	(208		)
Interest expense, net	—			—			—			—			(10,301		)	(10,301		)
Other, net	—			—			—			—			223			223
Income (loss) from continuing operations before income taxes	$	60,264		$	25,582		$	(9,098	)	$	(71	)	$	(15,116	)	$	61,561

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Dollars in thousands
Three Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	438,976		$	80,279		$	26,062		$	52		$	—		$	545,369
Expenses:
Direct operating	301,444			39,358			27,227			1,078			512			369,619
Marketing	4,266			1,232			2,149			258			142			8,047
Research and development	—			—			1,549			1			489			2,039
General and administrative	34,336			7,768			2,094			2,644			1,941			48,783
Goodwill impairment	—			—			85,890			—			—			85,890
Segment operating income (loss)	98,930			31,921			(92,847		)	(3,929		)	(3,084		)	30,991
Less: depreciation, amortization and other	(33,063		)	(8,437		)	(6,305		)	(678		)	—			(48,483		)
Operating income (loss)	65,867			23,484			(99,152		)	(4,607		)	(3,084		)	(17,492		)
Loss from equity method investments, net	—			—			—			—			(133		)	(133		)
Interest expense, net	—			—			—			—			(12,183		)	(12,183		)
Other, net	—			—			—			—			642			642
Income (loss) from continuing operations before income taxes	$	65,867		$	23,484		$	(99,152	)	$	(4,607	)	$	(14,758	)	$	(29,166	)

Dollars in thousands
Six Months Ended June 30, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	810,547		$	156,547		$	86,889		$	—		$	—		$	1,053,983
Expenses:
Direct operating	570,732			80,740			75,185			169			722			727,548
Marketing	7,743			1,174			7,638			12			77			16,644
Research and development	—			—			2,129			—			233			2,362
General and administrative	63,354			16,358			7,575			349			7,815			95,451
Restructuring and related costs (Note 9)	2,422			465			789			—			—			3,676
Segment operating income (loss)	166,296			57,810			(6,427		)	(530		)	(8,847		)	208,302
Less: depreciation, amortization and other	(46,101		)	(15,004		)	(16,602		)	21			—			(77,686		)
Operating income (loss)	120,195			42,806			(23,029		)	(509		)	(8,847		)	130,616
Loss from equity method investments, net	—			—			—			—			(415		)	(415		)
Interest expense, net	—			—			—			—			(10,543		)	(10,543		)
Other, net	—			—			—			—			1,452			1,452
Income (loss) from continuing operations before income taxes	$	120,195		$	42,806		$	(23,029	)	$	(509	)	$	(18,353	)	$	121,110

22

Dollars in thousands
Six Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	958,509		$	149,609		$	45,811		$	76		$	—		$	1,154,005
Expenses:
Direct operating	644,379			76,621			50,033			2,269			1,501			774,803
Marketing	9,091			2,410			3,879			578			509			16,467
Research and development	—			—			3,005			(84		)	1,202			4,123
General and administrative	68,071			15,563			4,062			5,151			4,492			97,339
Restructuring and related costs (Note 9)	15,174			550			127			—			—			15,851
Goodwill impairment	—			—			85,890			—			—			85,890
Segment operating income (loss)	221,794			54,465			(101,185		)	(7,838		)	(7,704		)	159,532
Less: depreciation, amortization and other	(64,670		)	(16,255		)	(12,207		)	(1,346		)	—			(94,478		)
Operating income (loss)	157,124			38,210			(113,392		)	(9,184		)	(7,704		)	65,054
Loss from equity method investments, net	—			—			—			—			(265		)	(265		)
Interest expense, net	—			—			—			—			(24,254		)	(24,254		)
Other, net	—			—			—			—			(1,704		)	(1,704		)
Income (loss) from continuing operations before income taxes	$	157,124		$	38,210		$	(113,392	)	$	(9,184	)	$	(33,927	)	$	38,831

Significant Retailer Relationships

Kiosks at the following retailers accounted for 10% or more of our consolidated revenue:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Wal-Mart Stores Inc.	16.7	%	16.4	%	16.4	%	16.4	%
Walgreen Co.	12.4	%	13.5	%	13.1	%	14.0	%
The Kroger Company	9.6	%	10.0	%	9.6	%	9.9	%

Note 13: Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:

• Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; or

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

23

Assets and Liabilities Measured and Reported at Fair Value on a Recurring Basis

Money Market Demand Accounts and Investment Grade Fixed Income Securities

The fair value for our money market demand accounts and investment grade fixed income securities falls under Level 1 of the fair value hierarchy based on quoted market prices. The fair value of these assets is included in cash and cash equivalents on our Consolidated Balance Sheets on a recurring basis. The following table presents the fair values of our money market demand accounts and investment grade fixed income securities as of the dates specified below:

	Level 1
Dollars in thousands	June 30, 2016		December 31, 2015
Money market demand accounts and investment grade fixed income securities	$	5,056	$	2,743

Assets and Liabilities Measured and Reported at Fair Value on a Nonrecurring Basis

We recognize or disclose the fair value of certain assets such as non-financial assets, primarily long-lived assets, goodwill, intangible assets and certain other assets in connection with impairment evaluations. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy.

Fair Value of Other Financial Instruments

The carrying value of our term loans approximates their fair value and falls under Level 2 of the fair value hierarchy.

We estimated the fair value of our senior unsecured notes due 2019 and 2021 outstanding using quoted market prices by independent dealers. We have reported the carrying value, face value less the unamortized debt discount and deferred financing fees, of our senior unsecured notes, issued at par, in our Consolidated Balance Sheets. The following table presents the approximate fair values of the 2019 Notes and 2021 Notes as of the dates specified below:

	Level 2
Dollars in thousands	June 30, 2016		December 31, 2015
2019 Notes	$	293,000	$	312,000
2021 Notes	$	194,000	$	213,000

Note 14: Commitments and Contingencies

Content License Agreements

We have entered into certain license agreements to obtain content for movie and video game rentals. Total estimated movie content commitments as of June 30, 2016, is presented in the following table:

Dollars in thousands
	Total		Remaining in 2016		2017		2018
Total estimated movie content commitments	$	460,681	$	226,902	$	224,136	$	9,643

Legal Matters

In October 2009, an Illinois resident, Laurie Piechur, individually and on behalf of all others similarly situated, filed a putative class action complaint against our Redbox subsidiary in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. The plaintiff alleged that, among other things, Redbox charges consumers illegal and excessive late fees in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and that Redbox's rental terms violate the Illinois Rental Purchase Agreement Act or the Illinois Automatic Contract Renewal Act and the plaintiff is seeking monetary damages and other relief. In November 2009, Redbox removed the case to the U.S. District Court for the Southern District of Illinois. In February 2010, the District Court remanded the case to the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. In May 2010, the court denied Redbox's motion to dismiss the plaintiff's complaint. In November 2011, the plaintiff moved for class certification, and Redbox moved for summary judgment. The court denied Redbox's motion for summary judgment in February 2012. The plaintiff filed an amended complaint on April 19, 2012, and an amended motion for class certification on June 5, 2012. The court denied Redbox's motion to dismiss the amended complaint. The amended class

24

certification motion was briefed and argued. At the hearing on plaintiff's amended motion for class certification, the plaintiff dismissed all claims but two and is pursuing only her claims under the Illinois Rental Purchase Agreement Act and the Illinois Automatic Contract Renewal Act. On May 21, 2013, the court denied plaintiff's amended class action motion. On January 29, 2014, the Illinois Supreme Court denied plaintiff’s petition for leave to appeal the trial court’s denial of class certification. Redbox moved to dismiss all remaining claims on mootness grounds, and the Court granted Redbox’s motion on December 11, 2014. The plaintiffs appealed on January 7, 2015. Oral argument was held November 10, 2015. The Appellate Court affirmed the trial court’s rulings on January 11, 2016. Plaintiffs filed a petition for review with the Illinois Supreme Court on February 16, 2016, and Redbox filed an answer on March 8, 2016. The Illinois Supreme Court denied Plaintiffs petition on May 25, 2016. We continue to believe that the claims against us are without merit and intend to defend ourselves vigorously in this matter should plaintiff seek further appellate review. Currently, no accrual has been established as it was not possible to estimate the possible loss or range of loss because this matter had not advanced to a stage where we could make any such estimate.

25

Note 15: Guarantor Subsidiaries

Certain of our wholly owned subsidiaries have, jointly and severally, fully and unconditionally guaranteed the Senior Notes. Pursuant to SEC regulations, we have presented in columnar format the condensed consolidating financial information for Outerwall Inc., the guarantor subsidiaries on a combined basis, and all non-guarantor subsidiaries on a combined basis in the following tables:

CONSOLIDATING BALANCE SHEETS
(unaudited)
	As of June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Assets
Current Assets:
Cash and cash equivalents	$	152,729		$	17,455	$	28,864		$	—		$	199,048
Accounts receivable, net of allowances	1,640			23,663		83			—			25,386
Content library	—			147,815		—			—			147,815
Prepaid expenses and other current assets	12,501			34,291		330			—			47,122
Intercompany receivables	15,212			636,566		1,207			(652,985		)	—
Total current assets	182,082			859,790		30,484			(652,985		)	419,371
Property and equipment, net	87,236			170,440		12,738			—			270,414
Deferred income taxes	—			—		2,456			—			2,456
Goodwill and other intangible assets, net	249,696			283,238		—			—			532,934
Other long-term assets	377			1,001		111			—			1,489
Investment in related parties	974,379			28,373		—			(1,002,752		)	—
Total assets	$	1,493,770		$	1,342,842	$	45,789		$	(1,655,737	)	$	1,226,664
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	8,857		$	117,574	$	223		$	—		$	126,654
Accrued payable to retailers	68,924			25,048		6,360			—			100,332
Other accrued liabilities	65,424			89,249		674			—			155,347
Current portion of long-term debt and other long-term liabilities	18,193			5		220			—			18,418
Intercompany payables	527,722			115,511		9,752			(652,985		)	—
Total current liabilities	689,120			347,387		17,229			(652,985		)	400,751
Long-term debt and other long-term liabilities	747,114			19,294		162			—			766,570
Deferred income taxes	11,634			1,784		24			—			13,442
Total liabilities	1,447,868			368,465		17,415			(652,985		)	1,180,763
Commitments and contingencies
Stockholders’ Equity:
Preferred stock	—			—		3,000			(3,000		)	—
Common stock	604,392			252,512		4,635			(371,660		)	489,879
Treasury stock	(1,149,261		)	—		—			—			(1,149,261		)
Retained earnings	591,844			721,865		21,521			(628,092		)	707,138
Accumulated other comprehensive income (loss)	(1,073		)	—		(782		)	—			(1,855		)
Total stockholders’ equity	45,902			974,377		28,374			(1,002,752		)	45,901
Total liabilities and stockholders’ equity	$	1,493,770		$	1,342,842	$	45,789		$	(1,655,737	)	$	1,226,664

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CONSOLIDATING BALANCE SHEETS
(unaudited)
	As of December 31, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations and Consolidation Reclassifications			Total
Assets
Current Assets:
Cash and cash equivalents	$	160,167		$	19,372	$	43,010	$	—		$	222,549
Accounts receivable, net of allowances	3,983			33,269		1,212		—			38,464
Content library	—			188,490		—		—			188,490
Prepaid expenses and other current assets	17,720			33,049		599		—			51,368
Intercompany receivables	35,654			527,996		426		(564,076		)	—
Total current assets	217,524			802,176		45,247		(564,076		)	500,871
Property and equipment, net	97,659			204,081		14,273		—			316,013
Deferred income taxes	—			—		2,606		—			2,606
Goodwill and other intangible assets, net	249,703			290,811		—		—			540,514
Other long-term assets	747			1,293		167		—			2,207
Investment in related parties	921,456			27,798		—		(949,254		)	—
Total assets	$	1,487,089		$	1,326,159	$	62,293	$	(1,513,330	)	$	1,362,211
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	16,127		$	167,694	$	189	$	—		$	184,010
Accrued payable to retailers	71,947			30,157		12,994		—			115,098
Other accrued liabilities	57,025			82,401		2,011		—			141,437
Current portion of long-term debt and other long-term liabilities	16,832			—		299		—			17,131
Intercompany payables	459,789			85,487		18,800		(564,076		)	—
Total current liabilities	621,720			365,739		34,293		(564,076		)	457,676
Long-term debt and other long-term liabilities	873,476			19,882		159		—			893,517
Deferred income taxes	13,965			19,083		44		—			33,092
Total liabilities	1,509,161			404,704		34,496		(564,076		)	1,384,285
Commitments and contingencies
Stockholders’ Equity (Deficit):
Preferred stock	—			—		3,000		(3,000		)	—
Common stock	599,675			252,727		4,636		(371,875		)	485,163
Treasury stock	(1,151,063		)	—		—		—			(1,151,063		)
Retained earnings	530,140			668,728		18,963		(574,379		)	643,452
Accumulated other comprehensive income (loss)	(824		)	—		1,198		—			374
Total stockholders’ equity (deficit)	(22,072		)	921,455		27,797		(949,254		)	(22,074		)
Total liabilities and stockholders’ equity (deficit)	$	1,487,089		$	1,326,159	$	62,293	$	(1,513,330	)	$	1,362,211

27

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Three Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	73,700		$	433,859		$	10,468		$	—		$	518,027
Expenses:
Direct operating	37,633			309,105			4,843			—			351,581
Marketing	410			7,010			2			—			7,422
Research and development	—			1,317			—			—			1,317
General and administrative	11,949			35,529			203			—			47,681
Restructuring and related costs	3			398			—			—			401
Depreciation and other	6,547			26,417			1,024			—			33,988
Amortization of intangible assets	4			3,786			—			—			3,790
Total expenses	56,546			383,562			6,072			—			446,180
Operating income	17,154			50,297			4,396			—			71,847
Other income (expense), net:
Loss from equity method investments, net	(208		)	—			—			—			(208		)
Interest income (expense), net	(2,715		)	(7,539		)	(47		)	—			(10,301		)
Other, net	3,229			122			(3,128		)	—			223
Total other income (expense), net	306			(7,417		)	(3,175		)	—			(10,286		)
Income from continuing operations before income taxes	17,460			42,880			1,221			—			61,561
Income tax expense	(6,850		)	(13,944		)	(219		)	—			(21,013		)
Income from continuing operations	10,610			28,936			1,002			—			40,548
Equity in income of subsidiaries	29,938			1,002			—			(30,940		)	—
Net income (loss)	40,548			29,938			1,002			(30,940		)	40,548
Foreign currency translation adjustment(1)	(51		)	—			(1,629		)	—			(1,680		)
Comprehensive income (loss)	$	40,497		$	29,938		$	(627	)	$	(30,940	)	$	38,868

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2016.

28

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Three Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications		Total
Revenue	$	68,687		$	465,039		$	11,643		$	—	$	545,369
Expenses:
Direct operating	35,397			328,952			5,270			—		369,619
Marketing	1,477			6,543			27			—		8,047
Research and development	1			2,038			—			—		2,039
General and administrative	11,767			36,820			196			—		48,783
Restructuring and related costs	—			—			—			—		—
Depreciation and other	8,051			36,063			1,060			—		45,174
Amortization of intangible assets	4			3,305			—			—		3,309
Goodwill impairment	—			85,890			—			—		85,890
Total expenses	56,697			499,611			6,553			—		562,861
Operating income	11,990			(34,572		)	5,090			—		(17,492		)
Other income (expense), net:
Loss from equity method investments, net	(133		)	—			—			—		(133		)
Interest income (expense), net	(12,485		)	317			(15		)	—		(12,183		)
Other, net	3,142			80			(2,580		)	—		642
Total other income (expense), net	(9,476		)	397			(2,595		)	—		(11,674		)
Income (loss) from continuing operations before income taxes	2,514			(34,175		)	2,495			—		(29,166		)
Income tax benefit (expense)	5,981			(23,736		)	(430		)	—		(18,185		)
Income (loss) from continuing operations	8,495			(57,911		)	2,065			—		(47,351		)
Income (loss) from discontinued operations, net of tax	(856		)	1,221			1,370			—		1,735
Equity in income of subsidiaries	(53,255		)	3,435			—			49,820		—
Net income (loss)	(45,616		)	(53,255		)	3,435			49,820		(45,616		)
Foreign currency translation adjustment(1)	638			—			(165		)	—		473
Comprehensive income (loss)	$	(44,978	)	$	(53,255	)	$	3,270		$	49,820	$	(45,143	)

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2015.

29

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Six Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	135,946		$	897,436		$	20,601		$	—		$	1,053,983
Expenses:
Direct operating	71,989			646,046			9,513			—			727,548
Marketing	1,209			15,433			2			—			16,644
Research and development	—			2,362			—			—			2,362
General and administrative	22,863			72,193			395			—			95,451
Restructuring and related costs	465			3,211			—			—			3,676
Depreciation and other	12,961			55,130			2,015			—			70,106
Amortization of intangible assets	7			7,573			—			—			7,580
Total expenses	109,494			801,948			11,925			—			923,367
Operating income	26,452			95,488			8,676			—			130,616
Other income (expense), net:
Loss from equity method investments, net	(415		)	—			—			—			(415		)
Interest income (expense), net	5,232			(15,681		)	(94		)	—			(10,543		)
Other, net	5,995			509			(5,052		)	—			1,452
Total other income (expense), net	10,812			(15,172		)	(5,146		)	—			(9,506		)
Income from continuing operations before income taxes	37,264			80,316			3,530			—			121,110
Income tax expense	(14,672		)	(26,630		)	(809		)	—			(42,111		)
Income from continuing operations	22,592			53,686			2,721			—			78,999
Equity in income of subsidiaries	56,407			2,721			—			(59,128		)	—
Net income (loss)	78,999			56,407			2,721			(59,128		)	78,999
Foreign currency translation adjustment(1)	(249		)	—			(1,980		)	—			(2,229		)
Comprehensive income	$	78,750		$	56,407		$	741		$	(59,128	)	$	76,770

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2016.

30

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Six Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	127,497		$	1,004,320		$	22,188		$	—		$	1,154,005
Expenses:
Direct operating	69,123			695,363			10,317			—			774,803
Marketing	2,991			13,449			27			—			16,467
Research and development	(83		)	4,206			—			—			4,123
General and administrative	23,823			73,115			401			—			97,339
Restructuring and related costs	551			15,300			—			—			15,851
Depreciation and other	12,700			73,046			2,114			—			87,860
Amortization of intangible assets	7			6,611			—			—			6,618
Goodwill impairment	—			85,890			—			—			85,890
Total expenses	109,112			966,980			12,859			—			1,088,951
Operating income	18,385			37,340			9,329			—			65,054
Other income (expense), net:
Loss from equity method investments, net	(265		)	—			—			—			(265		)
Interest income (expense), net	(24,881		)	692			(65		)	—			(24,254		)
Other, net	5,578			64			(7,346		)	—			(1,704		)
Total other income (expense), net	(19,568		)	756			(7,411		)	—			(26,223		)
Income (loss) from continuing operations before income taxes	(1,183		)	38,096			1,918			—			38,831
Income tax benefit (expense)	5,433			(49,046		)	(414		)	—			(44,027		)
Income (loss) from continuing operations	4,250			(10,950		)	1,504			—			(5,196		)
Income (loss) from discontinued operations, net of tax	668			(27,833		)	22,344			—			(4,821		)
Equity in income of subsidiaries	(14,935		)	23,848			—			(8,913		)	—
Net income (loss)	(10,017		)	(14,935		)	23,848			(8,913		)	(10,017		)
Foreign currency translation adjustment(1)	574			—			2,753			—			3,327
Comprehensive income (loss)	$	(9,443	)	$	(14,935	)	$	26,601		$	(8,913	)	$	(6,690	)

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2015.

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CONSOLIDATING STATEMENTS OF CASH FLOWS
(unaudited)
	Six Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Operating Activities:
Net income	$	78,999		$	56,407		$	2,721		$	(59,128	)	$	78,999
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other	12,961			55,130			2,015			—			70,106
Amortization of intangible assets	7			7,573			—			—			7,580
Share-based payments expense	6,984			2,520			—			—			9,504
Deferred income taxes	(1,559		)	(17,300		)	301			—			(18,558		)
Restructuring, impairment and related costs	57			304			—			—			361
Loss from equity method investment, net	415			—			—			—			415
Amortization of deferred financing fees and debt discount	1,251			—			—			—			1,251
Gain from early extinguishment of debt	(11,446		)	—			—			—			(11,446		)
Other	(242		)	(38		)	—			—			(280		)
Equity in income of subsidiaries	(56,407		)	(2,721		)	—			59,128			—
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	2,343			9,605			1,237			—			13,185
Content library	—			40,849			—			—			40,849
Prepaid expenses and other current assets	5,229			(207		)	241			—			5,263
Other assets	—			291			42			—			333
Accounts payable	(2,539		)	(49,970		)	49			—			(52,460		)
Accrued payable to retailers	(3,022		)	(5,109		)	(6,267		)	—			(14,398		)
Other accrued liabilities	6,872			5,993			(1,344		)	—			11,521
Net cash flows from (used in) operating activities	39,903			103,327			(1,005		)	—			142,225
Investing Activities:
Purchases of property and equipment	(16,424		)	(10,989		)	(961		)	—			(28,374		)
Proceeds from sale of property and equipment	—			92			—			—			92
Investments in and advances to affiliates	104,336			(94,347		)	(9,989		)	—			—
Net cash flows from (used in) investing activities	87,912			(105,244		)	(10,950		)	—			(28,282		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	176,000			—			—			—			176,000
Principal payments on Credit Facility	(244,000		)	—			—			—			(244,000		)
Repurchases of notes	(47,507		)	—			—			—			(47,507		)
Dividends paid	(15,122		)	—			—			—			(15,122		)
Principal payments on capital lease obligations and other debt	(2,902		)	—			(175		)	—			(3,077		)
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(1,472		)	—			—			—			(1,472		)
Net cash flows used in financing activities	(135,003		)	—			(175		)	—			(135,178		)
Effect of exchange rate changes on cash	(250		)	—			(2,016		)	—			(2,266		)
Increase (decrease) in cash and cash equivalents	(7,438		)	(1,917		)	(14,146		)	—			(23,501		)
Cash and cash equivalents:
Beginning of period	160,167			19,372			43,010			—			222,549
End of period	$	152,729		$	17,455		$	28,864		$	—		$	199,048

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CONSOLIDATING STATEMENTS OF CASH FLOWS
(unaudited)
	Six Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Operating Activities:
Net income	$	(10,017	)	$	(14,935	)	$	23,848		$	(8,913	)	$	(10,017	)
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other	12,700			74,892			6,126			—			93,718
Amortization of intangible assets	7			6,611			44			—			6,662
Share-based payments expense	3,681			3,511			—			—			7,192
Windfall excess tax benefits related to share-based payments	(686		)	—			—			—			(686		)
Deferred income taxes	(8,029		)	(3,903		)	7,993			—			(3,939		)
Restructuring, impairment and related costs	136			1,544			—			—			1,680
Loss from equity method investments, net	265			—			—			—			265
Amortization of deferred financing fees and debt discount	1,385			—			—			—			1,385
Goodwill impairment	—			85,890			—			—			85,890
Other	(265		)	176			(727		)	—			(816		)
Equity in income of subsidiaries	14,935			(23,848		)	—			8,913			—
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	(357		)	14,773			661			—			15,077
Content library	—			31,236			3,423			—			34,659
Prepaid expenses and other current assets	(17,957		)	(4,455		)	330			—			(22,082		)
Other assets	47			245			30			—			322
Accounts payable	(2,022		)	(13,438		)	(2,237		)	—			(17,697		)
Accrued payable to retailers	479			(10,682		)	(1,307		)	—			(11,510		)
Other accrued liabilities	1,674			426			(988		)	—			1,112
Net cash flows from (used in) operating activities(1)	(4,024		)	148,043			37,196			—			181,215
Investing Activities:
Purchases of property and equipment	(13,869		)	(25,818		)	(530		)	—			(40,217		)
Proceeds from sale of property and equipment	17			2,923			—			—			2,940
Investments in and advances to affiliates	161,753			(119,126		)	(42,627		)	—			—
Net cash flows from (used in) investing activities(1)	147,901			(142,021		)	(43,157		)	—			(37,277		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	112,000			—			—			—			112,000
Principal payments on Credit Facility	(185,750		)	—			—			—			(185,750		)
Dividends paid	(11,019		)	—			—			—			(11,019		)
Repurchases of common stock	(62,731		)	—			—			—			(62,731		)
Principal payments on capital lease obligations and other debt	(6,080		)	—			(198		)	—			(6,278		)
Windfall excess tax benefits related to share-based payments	686			—			—			—			686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(1,201		)	—			—			—			(1,201		)
Net cash flows used in financing activities(1)	(154,095		)	—			(198		)	—			(154,293		)
Effect of exchange rate changes on cash	574			—			4,793			—			5,367
Decrease in cash and cash equivalents	(9,644		)	6,022			(1,366		)	—			(4,988		)
Cash and cash equivalents:
Beginning of period	180,889			17,939			43,868			—			242,696
End of period	$	171,245		$	23,961		$	42,502		$	—		$	237,708

(1) During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in all periods presented. See Note 10: Discontinued Operationsfor cash flow disclosures related to our discontinued Redbox operations in Canada.

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Note 16: Income Taxes From Continuing Operations

Our effective tax rate from continuing operations was 34.1% and (62.4)% for the three months endedJune 30, 2016 and 2015, respectively, and 34.8% and 113.4% for the six months endedJune 30, 2016 and 2015, respectively.

Our effective tax rate for the three months endedJune 30, 2016, was lower than the U.S. Federal statutory rate of 35.0% primarily due to the domestic production activities deduction, partially offset by state income taxes.

Our effective tax rate for the three months endedJune 30, 2015, was lower than the U.S. Federal statutory rate of 35.0% primarily due to an $85.9 million non-tax deductible goodwill impairment charge that was recorded in the second quarter of 2015 and state income taxes, partially offset by the domestic production activities deduction and a net decrease in valuation allowances related to capital loss carryforwards and state tax credit carryforwards.

Our effective tax rate for the six months endedJune 30, 2016, was lower than the U.S. Federal statutory rate of 35.0% primarily due to the domestic production activities deduction, partially offset by state income taxes.

Our effective tax rate for the six months endedJune 30, 2015, was higher than the U.S. Federal statutory rate of 35.0% primarily due to an $85.9 million non-tax deductible goodwill impairment charge that was recorded in the second quarter of 2015 and state income taxes, partially offset by the domestic production activities deduction.

Note 17: Subsequent Events

On July 24, 2016, the Board declared a quarterly cash dividend of $0.60 per share to be paid on September 6, 2016, to all stockholders of record as of the close of business on August 23, 2016.

Merger Agreement

On July 24, 2016, the company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aspen Parent, Inc., a Delaware corporation (“Parent”), Aspen Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Outerwall Merger Sub”), Redwood Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Redbox Merger Sub”), and Redbox Automated Retail, LLC, a Delaware limited liability company and wholly-owned subsidiary of the company (“Redbox”), providing for the acquisition of the company by Parent in an all cash transaction, consisting of a tender offer, followed by a subsequent back-end merger of Outerwall Merger Sub with and into the company (the “Outerwall Merger”), followed by the merger of Redbox Merger Sub with and into Redbox (the “Redbox Merger” and, together with the Outerwall Merger, the “Mergers”). Parent and Merger Sub are affiliates of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”).

Under the terms of the Merger Agreement, Parent will cause Outerwall Merger Sub to commence a cash tender offer (the “Offer”) for all of the company’s outstanding shares of common stock at a purchase price of $52.00 per share net to the seller in cash (the “Offer Price”), without interest and subject to any withholding taxes. The consummation of the Offer is conditioned on, among other things, (1) shares of common stock having been validly tendered and not properly withdrawn that represent, together with the shares of common stock then owned by Outerwall Merger Sub, at least a majority of the then outstanding shares, (2) the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period, (3) the accuracy of the company’s representations and warranties in the Merger Agreement, (4) compliance by the company with its obligations, agreements and covenants in the Merger Agreement, (5) other than the company’s regular quarterly cash dividend for the third quarter of 2016, the absence of any declaration or payment of any dividend or distribution on shares of capital stock of the company following the date of the Merger Agreement, (6) the absence of any authorization or making of any purchases of capital stock of the company, and (7) other customary conditions.

Following the consummation of the Offer, subject to the satisfaction or waiver of certain customary conditions set forth in the Merger Agreement, the Outerwall Merger will be effected under Delaware law without a meeting or vote of the Company’s stockholders (the “Effective Time”). At the Effective Time, each share of common stock issued and outstanding immediately prior to the Effective Time (other than shares (1) owned by the company or any of its subsidiaries, (2) owned by Parent or Outerwall Merger Sub or (3) owned by any stockholder who is entitled to demand and properly demands the appraisal of such shares) will be automatically cancelled and converted into the right to receive the Offer Price, without interest and subject to any withholding taxes. After the closing of the Outerwall Merger, the company will be a wholly owned subsidiary of Parent and will cease to be a publicly-traded company.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Except for the consolidated historical information, the following discussion contains forward-looking statements that involve risks and uncertainties, such as our objectives, expectations and intentions. Our actual results could differ materially from results that may be anticipated by such forward-looking statements and discussed elsewhere herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and those discussed under “Risk Factors” in Item 1A of Part II of this Quarterly Report on Form 10-Q and in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (our “2015 Form 10-K”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in our other reports filed with the SEC that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations.

Overview

We are a leading provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. Our automated retail business model leverages technology advancements that allow delivery of new and innovative consumer products and services in a compact, automated format. We believe this model positions us to address retailers’ increasing need to provide more in less space driven by increased urbanization and consumers’ increasing expectation of instant gratification. We also have a strong consumer base which we communicate with on a regular basis to drive behavior and increase activity within our retail locations. Our products and services can be found at approximately 63,240 kiosks in leading supermarkets, drug stores, mass merchants, financial institutions, convenience stores, malls and restaurants.

Core Offerings

We have three core businesses:

• Our Redbox business segment (“Redbox”), where consumers can rent or purchase movies and video games from self-service kiosks, is focused on the entertainment consumer sector.

• Our Coinstar business segment (“Coinstar”) is focused on the money consumer sector and provides self-service kiosks where consumers can convert their coins to cash and convert coins and cash to stored value products. We also offer self-service kiosks that exchange gift cards for cash under our Coinstar™ Exchange brand.

• Our ecoATM business segment (“ecoATM”) is focused on the consumer electronics sector and provides self-service kiosks and an online solution through Gazelle where consumers can sell certain electronic devices for cash and generates revenue through the sale of devices collected to third party resellers, through online marketplaces and through the Gazelle direct-to-consumer storefront.

Other Concepts and Investments

In addition to our three reportable segments; we may also identify, evaluate, build or acquire, and develop innovative new concepts in the automated retail space. The combined results of the concepts we have operated are included in our All Other reporting category as they do not meet quantitative thresholds to be a separate reportable segment.

Recently, we explored a consumer product sampling kiosk concept called SAMPLEit. We regularly assess the performance of our concepts to determine whether continued funding or other alternatives are appropriate and as a result, we discontinued operating SAMPLEit in the fourth quarter of 2015. As SAMPLEit did not represent a major component of our operations or financial results, the results of SAMPLEit did not qualify to be reported as a discontinued operation and remain in our All Other reporting category.

On occasion, we make strategic investments in external companies that provide automated self-service kiosk solutions. For example, in the health sector we have invested in Pursuant Health, Inc.

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Strategy

On March 14, 2016, we announced that our Board of Directors had initiated a process to explore strategic and financial alternatives to maximize shareholder value. As a result of the exploration of strategic and financial alternatives, on July 24, 2016, the company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aspen Parent, Inc., a Delaware corporation (“Parent”), Aspen Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Outerwall Merger Sub”), Redwood Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Redbox Merger Sub”), and Redbox Automated Retail, LLC, a Delaware limited liability company and wholly-owned subsidiary of the company (“Redbox”), providing for the acquisition of the company by Parent in an all cash transaction, consisting of a tender offer, followed by a subsequent back-end merger of Outerwall Merger Sub with and into the company (the “Outerwall Merger”), followed by the merger of Redbox Merger Sub with and into Redbox (the “Redbox Merger” and, together with the Outerwall Merger, the “Mergers”). Parent and Merger Sub are affiliates of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”).

Under the terms of the Merger Agreement, Parent will cause Outerwall Merger Sub to commence a cash tender offer (the “Offer”) for all of the company’s outstanding shares of common stock at a purchase price of $52.00 per share, net to the seller in cash (the “Offer Price”), without interest and subject to any withholding taxes. The consummation of the Offer is conditioned on, among other things, (1) shares of common stock having been validly tendered and not properly withdrawn that represent, together with the shares of common stock then owned by Outerwall Merger Sub, at least a majority of the then outstanding shares, (2) the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period, (3) the accuracy of the company’s representations and warranties in the Merger Agreement, (4) compliance by the company with its obligations, agreements and covenants in the Merger Agreement, (5) other than the company’s regular quarterly cash dividend for the third quarter of 2016, the absence of any declaration or payment of any dividend or distribution on shares of capital stock of the company following the date of the Merger Agreement, (6) the absence of any authorization or making of any purchases of capital stock of the company, and (7) other customary conditions.

Following the consummation of the Offer, subject to the satisfaction or waiver of certain customary conditions set forth in the Merger Agreement, the Outerwall Merger will be effected under Delaware law without a meeting or vote of the Company’s stockholders (the “Effective Time”). At the Effective Time, each share of common stock issued and outstanding immediately prior to the Effective Time (other than shares (1) owned by the company or any of its subsidiaries, (2) owned by Parent or Outerwall Merger Sub or (3) owned by any stockholder who is entitled to demand and properly demands the appraisal of such shares) will be automatically cancelled and converted into the right to receive the Offer Price, without interest and subject to any withholding taxes. After the closing of the Outerwall Merger, the company will be a wholly owned subsidiary of Parent and will cease to be a publicly-traded company.

Our strategy of managing our business for profitability and cash flow is based upon leveraging our core competencies in the automated retail space to provide the consumer with convenience and value and to help retailers drive incremental traffic and revenue. Our competencies include success in building strong consumer and retailer relationships, and in deploying, scaling and managing kiosk businesses. We build strong retailer relationships by providing retailers with turnkey solutions that complement their businesses without significant expenditures of time and financial resources. We believe we have opportunities to continue to manage our businesses for profitability and cash flow by capitalizing on our strengths through the execution of the following strategies:

• Continue to profitably manage our Redbox business. We are focused on profitably managing Redbox through revenue generation and improved kiosk-operations efficiency.

We expect to optimize our business by maintaining our customer base, attracting new customers, testing pricing strategies, leveraging the variable cost structure of the business, optimizing the Blu-ray rental mix, expanding the availability and depth of new generation video game content and utilizing our customer management tools. Blu-ray drives revenue growth by shifting rentals to its higher revenue price point, $2.00 per night, and generates higher margin dollars per rental. Video games drive revenue by providing Redbox users a low cost access point of $3.00 per night, which is a significant discount to the related purchase price of the new release content. Further, our customer management tools enable us to provide personalized recommendations and promotions to our customers, which help us generate incremental revenue.

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While we have completed the build out of our Redbox network in the U.S., we believe we can improve financial performance by redeploying underperforming kiosks to areas with lower kiosk density or with higher consumer traffic. We also have retrofitted a significant percentage of our existing kiosks to provide increased capacity, which enables Redbox to retain discs in the kiosks longer without a material increase in product cost, thereby allowing us to provide greater title selection and copy depth to generate incremental rentals. We also continuously improve our proprietary algorithms allowing Redbox to more accurately predict daily title availability and demand at individual kiosk locations. From a financial perspective, we expect these strategies to partially offset the secular decline in the physical market.

• Optimize and grow revenues from our Coinstar business. We believe we can improve financial performance in our Coinstar business through kiosk optimization. We continue to focus on finding more attractive locations for our existing kiosks, including through redeployment of underperforming kiosks to areas with lower kiosk density or higher consumer traffic. Further, the Coinstar business continues to develop consumer-oriented products and services, such as Coinstar Exchange, and to expand into other channels, such as financial institutions, where we can leverage our Coinstar platform.

• Drive our ecoATM business to profitability. We are focused on achieving segment operating profitability in our ecoATM business. We expect to increase revenue through continued focus on redeploying underperforming kiosks, placing existing kiosks in inventory in attractive locations and driving increased productivity at existing kiosks. We also expect to generate profitable growth by integrating the ecoATM branded kiosk business model with the Gazelle brand, which provides an online solution to buy and sell used electronics, to provide greater leverage, revenue and margin enhancement opportunities for our ecoATM business.

• Use our expertise to continue to develop our existing businesses and new innovative retail solutions. Through Redbox and Coinstar, we have demonstrated our ability to profitably scale automated retail solutions. We also leverage those core competencies to identify, evaluate, build or acquire, and develop new automated retail concepts through both organic and inorganic opportunities. For example, in the third quarter of 2013, we acquired ecoATM, one of our previous strategic investments and in November 2015, we acquired Gazelle, Inc. ("Gazelle"). We are committed to addressing the changing needs and preferences of our consumers, including through strategic investments and exploring further international opportunities.

Comparability of Results

On November 10, 2015, we acquired certain assets and liabilities of Gazelle. Results of operations for Gazelle are included in ecoATM for the three and six months ended June 30, 2016.

Recent Events

Subsequent Events

• On July 24, 2016, the Board declared a quarterly cash dividend of $0.60 per share to be paid on September 6, 2016, to all stockholders of record as of the close of business on August 23, 2016.

• On July 24, 2016, the company entered into the Merger Agreement providing for the acquisition of the company by Parent in an all cash transaction, consisting of a tender offer, followed by the subsequent back-end Outerwall Merger under Section 251(h) of the DGCL, immediately followed by the Redbox Merger. See Note 17: Subsequent Events in our Notes to Consolidated Financial Statements for additional information.

• On July 25, 2016, Standards and Poor's downgraded the ratings assigned to our debt as follows:

◦ Corporate Credit Rating, to B+ from BB-; and

◦ Issue-level Ratings on Unsecured Notes, to B- from B.

• On July 26, 2016, Moody's Investor Services revised their credit outlook and placed our debt on review for downgrade, ratings remain unchanged.

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Q2 2016 Events

• During the second quarter of 2016, we repurchased $2.6 million in face value of our 2021 Notes for $2.2 million in cash. The gain from early extinguishment of these notes was approximately $0.4 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income. See Note 7: Debt and Other Long-Term Liabilities in our Notes to Consolidated Financial Statements.

• On June 21, 2016, we paid a cash dividend of $0.60 per outstanding share of our common stock totaling approximately $10.2 million.

Q1 2016 Events

• During the first quarter of 2016, we repurchased $57.1 million in face value of our 2021 and 2019 Notes for $45.3 million in cash. The gain from early extinguishment of these notes was approximately $11.0 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income. See Note 7: Debt and Other Long-Term Liabilities in our Notes to Consolidated Financial Statements.

• On March 14, 2016, the Board declared a quarterly cash dividend of $0.60 per share to be paid on June 21, 2016 to all stockholders of record as of the close of business on June 7, 2016.

• On March 29, 2016, we paid a cash dividend of $0.30 per outstanding share of our common stock totaling approximately $5.1 million.

Consolidated Results

The discussion and analysis that follows covers our results from continuing operations:

	Three Months Ended										Six Months Ended
	June 30,					Change					June 30,					Change
Dollars in thousands, except per share amounts	2016		2015			$			%		2016		2015			$			%
Revenue	$	518,027	$	545,369		$	(27,342	)	(5.0	)%	$	1,053,983	$	1,154,005		$	(100,022	)	(8.7	)%
Operating income (loss)	$	71,847	$	(17,492	)	$	89,339		NM*		$	130,616	$	65,054		$	65,562		100.8	%
Income (loss) from continuing operations	$	40,548	$	(47,351	)	$	87,899		NM*		$	78,999	$	(5,196	)	$	84,195		NM*
Diluted earnings (loss) from continuing operations per common share	$	2.38	$	(2.66	)	$	5.04		NM*		$	4.67	$	(0.30	)	$	4.97		NM*

* Not Meaningful

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Revenue decreased$27.3 million, or 5.0%, primarily due to:

• $49.9 milliondecrease from our Redbox segment primarily due to a 10.0%decrease in same store sales, driven by a decline in movie rentals, and the removal of underperforming kiosks. Movie rentals were impacted primarily by higher secular decline in the physical market in the second quarter of 2016 as compared to the second quarter of 2015, partially offset by higher total box office (representing titles with North American box office receipts of at least $5.0 million per title) of movie titles released. Box office was 44.5% higher than the prior year with three more titles including one title that comprised 30.9% of the box office for titles released in the second quarter of 2016. Excluding this title, box office decreased 0.1% as compared to the second quarter of 2015. This was partially offset by;

• $18.7 millionincrease from our ecoATM segment primarily due to revenue included in 2016 from devices acquired and sold through Gazelle; and

• $3.9 million increase from our Coinstar segment primarily due to increased volume in U.S. Coinstar kiosks.

Operating income increased$89.3 million, primarily due to:

• $90.1 million decrease in operating loss within our ecoATM segment primarily due to the $85.9 million goodwill impairment charge recognized in 2015. Excluding the $85.9 million goodwill impairment charge, operating loss decreased $4.2 million for our ecoATM segment primarily due to the overall impacts from the addition of Gazelle and ongoing cost reduction initiatives;

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• $4.5 million decrease in operating loss within our All Other reporting category primarily due to our decision to discontinue operating SAMPLEit in the fourth quarter of 2015; and

• $2.1 millionincrease in operating income within our Coinstar segment primarily due to higher revenue partially offset by higher operating expenses, including increased direct operating expenses; partially offset by

• $5.6 million decrease in operating income within our Redbox segment primarily due to:

◦ $49.9 milliondecrease in revenue as described above; partially offset by

◦ $29.7 milliondecrease in direct operating expenses driven primarily by lower product costs due to lower spending on movie content, lower contractual fees paid to our retail partners due to lower revenue and lower credit card fees driven by lower rental volume;

◦ $11.3 milliondecrease in depreciation and amortization primarily from an increase in our fully depreciated asset base; and

◦ $3.0 million decrease in general and administrative expenses primarily as a result of ongoing cost reduction initiatives.

Income from continuing operations increased$87.9 million, primarily due to:

• $89.3 millionincrease in operating income as described above; and

• $1.9 million decrease in interest expense, net primarily due to lower outstanding borrowings and gain from early extinguishment of debt; partially offset by

• $2.8 million increase in income tax expense primarily due to higher pre-tax income excluding the non-tax deductible goodwill impairment charge.

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Revenue decreased$100.0 million, or 8.7%, primarily due to:

• $148.0 milliondecrease from our Redbox segment primarily due to a 14.0%decrease in same store sales, driven by a decline in movie rentals, and the removal of underperforming kiosks. Movie rentals were impacted primarily by higher secular decline in the physical market in the first half of 2016 as compared to the first half of 2015, partially offset by higher total box office of movie titles released. Box office was 29.0% higher than the prior year with ten more titles, including one title that compromised 15.5% of the box office for titles released in the first half of 2016. Excluding this title, box office increased 9.0% as compared to the first half of 2015. This was partially offset by;

• $41.1 millionincrease from our ecoATM segment primarily due to revenue included in 2016 from devices acquired and sold through Gazelle; and

• $6.9 million increase from our Coinstar segment primarily due to increased volume in U.S. Coinstar kiosks.

Operating income increased$65.6 million, or 100.8%, primarily due to:

• $90.4 million decrease in operating loss within our ecoATM segment primarily due to the $85.9 million goodwill impairment charge recognized in 2015. Excluding the $85.9 million goodwill impairment charge, operating loss decreased $4.5 million for our ecoATM segment primarily due to the overall impacts from the addition of Gazelle and ongoing cost reduction initiatives;

• $8.7 million decrease in operating loss within our All Other reporting category primarily due to our decision to discontinue operating SAMPLEit in the fourth quarter of 2015; and

• $4.6 millionincrease in operating income within our Coinstar segment primarily due to higher revenue partially offset by higher operating expenses, including increased direct operating expenses; partially offset by

• $36.9 million decrease in operating income within our Redbox segment primarily due to:

◦ $148.0 milliondecrease in revenue as described above; partially offset by

◦ $73.6 milliondecrease in direct operating expenses driven primarily by lower product costs due to lower spending on movie content, lower contractual fees paid to our retail partners due to lower revenue and lower credit card fees driven by lower rental volume;

◦ $18.6 milliondecrease in depreciation and amortization primarily from an increase in our fully depreciated asset base;

39

◦ $12.8 milliondecrease in restructuring and related costs; and

◦ $4.7 million decrease in general and administrative expenses primarily as a result of ongoing cost reduction initiatives.

Income from continuing operations increased$84.2 million, primarily due to:

• $65.6 millionincrease in operating income as described above;

• $13.7 million decrease in interest expense, net primarily due to gain from early extinguishment of debt, as we recognized a gain of $11.4 million in 2016, and lower outstanding borrowings;

• $3.2 million increase in other income, net primarily due to the impact of the Canadian dollar exchange rates on our Coinstar operations; and

• $1.9 million decrease in income tax expense primarily due to lower pre-tax income excluding the non-tax deductible goodwill impairment charge and reduced discrete tax expenses.

Share-Based Payments and Rights to Receive Cash

Our share-based payments consist of share-based compensation granted to executives, non-employee directors and employees and share-based payments granted to movie studios as part of content agreements. We grant stock options, restricted stock and performance-based restricted stock to executives and non-employee directors and restricted stock to our employees. In connection with our acquisition of ecoATM, we also granted certain rights to receive cash. The expense associated with the grants to movie studios is allocated to our Redbox segment and included within direct operating expenses. The expenses associated with share-based compensation to our executives, non-employee directors, employees and related to the rights to receive cash issued in connection with our acquisition of ecoATM are part of our shared services support function and are not allocated to our segments. The components of our unallocated share-based compensation expense are presented in the following table.

Unallocated Share-Based Compensation and Rights to Receive Cash Expense

	Three Months Ended									Six Months Ended
	June 30,				Change					June 30,				Change
Dollars in thousands	2016		2015		$			%		2016		2015		$			%
Direct operating	$	381	$	512	$	(131	)	(25.6	)%	$	722	$	1,501	$	(779	)	(51.9	)%
Marketing	39		142		(103		)	(72.5	)%	77		509		(432		)	(84.9	)%
Research and development	123		489		(366		)	(74.8	)%	233		1,202		(969		)	(80.6	)%
General and administrative	4,287		1,941		2,346			120.9	%	7,815		4,492		3,323			74.0	%
Total	$	4,830	$	3,084	$	1,746		56.6	%	$	8,847	$	7,704	$	1,143		14.8	%

Unallocated share-based compensation expense increased$1.7 million, or 56.6% and $1.1 million, or 14.8% during the three and six months endedJune 30, 2016, primarily due to increased compensation expense related to restricted stock awards partially offset by the continued vesting of rights to receive cash we issued as replacement awards for unvested restricted stock as part of our acquisition of ecoATM in the third quarter of 2013. See Note 8: Share-Based Payments in our Notes to Consolidated Financial Statements for more information.

40

Segment Results

Our discussion and analysis that follows covers results of operations for our Redbox, Coinstar and ecoATM segments.

We manage our business by evaluating the financial results of our segments, focusing 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 services support functions, including but not limited to, corporate executive management, business development, sales, customer service, finance, legal, human resources, information technology, and risk management. We also review depreciation and amortization allocated to each segment.

Management utilizes segment revenue and segment operating income to evaluate the health of our business segments and in consideration of allocating resources among our business segments. Specifically, our CEO evaluates segment revenue and segment operating income, and assesses the performance of each business segment based on these measures, as well as, among other things, the prospects of each of the segments and how they fit into our overall strategy. Our CEO then decides how resources should be allocated among our business segments. For example, if a segment’s revenue increases more than expected, our CEO may consider allocating more financial or other resources to that segment in the future. We periodically evaluate our shared services support function’s allocation methods used for segment reporting purposes, which may result in changes to segment allocations in future periods.

We also review same store sales for our Redbox and Coinstar segments, which we calculate on a location basis. Most of our locations have a single kiosk, but in locations with a high-performing kiosk, we may add additional kiosks to drive incremental revenue and provide a broader product offering. Same store sales reflects the change in revenue from locations that have been operating for more than 13 months by the end of the reporting period compared with the same locations in the same period of the prior year. We use the average selling price of value devices (non-scrap) sold, number of value devices sold and number of overall devices sold rather than same store sales for our ecoATM business because transactions at the kiosk or purchased by our online solution are for product acquisition, not revenue.

Detailed financial information about our business segments and significant customer relationships is provided in Note 12: Business Segments and Enterprise-Wide Informationin our Notes to Consolidated Financial Statements.

41

Redbox

	Three Months Ended											Six Months Ended
Dollars in thousands, except net revenue per rental amounts	June 30,						Change					June 30,						Change
	2016			2015			$			%		2016			2015			$			%
Revenue	$	389,059		$	438,976		$	(49,917	)	(11.4	)%	$	810,547		$	958,509		$	(147,962	)	(15.4	)%
Expenses:
Direct operating	271,731			301,444			(29,713		)	(9.9	)%	570,732			644,379			(73,647		)	(11.4	)%
Marketing	3,919			4,266			(347		)	(8.1	)%	7,743			9,091			(1,348		)	(14.8	)%
General and administrative	31,325			34,336			(3,011		)	(8.8	)%	63,354			68,071			(4,717		)	(6.9	)%
Restructuring and related costs (Note 9)	14			—			14			NM*		2,422			15,174			(12,752		)	(84.0	)%
Segment operating income	82,070			98,930			(16,860		)	(17.0	)%	166,296			221,794			(55,498		)	(25.0	)%
Less: depreciation and amortization	(21,806		)	(33,063		)	11,257			(34.0	)%	(46,101		)	(64,670		)	18,569			(28.7	)%
Operating income	$	60,264		$	65,867		$	(5,603	)	(8.5	)%	$	120,195		$	157,124		$	(36,929	)	(23.5	)%
Operating income as a percentage of revenue	15.5		%	15.0		%						14.8		%	16.4		%
Same store sales growth (decline)	(10.0		)%	(0.6		)%						(14.0		)%	0.5		%
Effect on change in revenue from same store sales growth (decline)	$	(42,822	)	$	(2,663	)						$	(130,630	)	$	4,573
Ending number of kiosks	39,970			41,340			(1,370		)	(3.3	)%	39,970			41,340			(1,370		)	(3.3	)%
Total rentals (in thousands)	123,593			146,047			(22,454		)	(15.4	)%	261,294			319,094			(57,800		)	(18.1	)%
Net revenue per rental	$	3.13		$	3.00		$	0.13		4.3	%	$	3.09		$	3.00		$	0.09		3.0	%

* Not Meaningful

The comparable performance of our content library is continually affected by secular decline in the physical market, seasonality, the actual release slate, the relative attractiveness of movie titles, and the total box office in a particular quarter or year, which may have lingering effects in subsequent periods. As we expect our Redbox business to continue to decline over time as a result of secular decline, optimizing our Redbox business will depend substantially upon minimizing the decline in same store sales through the removal or relocation of underperforming kiosks and effective expense management.

Q2 2016 Events

• On April 22, 2016, Redbox extended the existing agreement with Lions Gate Films, Inc., through September 30, 2017.

Q1 2016 Events

• On January 21, 2016, Redbox entered into an amendment to the existing agreement with Universal Home Entertainment LLC, extending the agreement through December 31, 2017.

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Revenue decreased$49.9 million, or 11.4%, primarily due to the following:

• $42.8 million decrease from a 10.0%decrease in same store sales primarily due to:

◦ 13.4% decline in total disc rentals related to our same store kiosks primarily driven by:

▪ a higher impact from secular decline in the physical market on movie rentals in the second quarter of 2016 as compared to the second quarter of 2015; partially offset by

▪ an increase in video game rentals as the market penetration of new generation game consoles continued to increase; and

▪ higher total box office of movie titles released in the second quarter of 2016 compared to the second quarter of 2015. Box office was 44.5% higher than the prior year with three more titles including one title that comprised 30.9% of the box office for titles released in the second quarter of 2016. Excluding this title, box office decreased 0.1% as compared to the second quarter of 2015.

• $7.1 million decrease in revenue primarily from kiosks removed or relocated subsequent to the second quarter of 2015, due to continued efforts to optimize our network by removing underperforming kiosks.

42

Net revenue per rental increased$0.13 to $3.13 primarily due lower promotional spend as compared to the second quarter of 2015 and higher video game rentals, which have a higher per day rental price. While we continue to invest in customer-specific promotional offerings, we have continued to reduce overall promotional spend by driving further efficiency in promotional programs.

Video game revenue represented 4.3% of total rental revenue and 1.5% of total disc rentals in the second quarter of 2016 as compared with 2.4% and 0.9%, respectively, during the second quarter of 2015, primarily due to consumer transition to new generation platforms as discussed above. Blu-ray revenue represented 17.6% of total rental revenue and 14.2% of total disc rentals during the second quarter of 2016 as compared with 18.1% and 14.1%, respectively, during the second quarter of 2015.

Operating income decreased$5.6 million, or 8.5%, primarily due to the following:

• $49.9 milliondecrease in revenue as described above; partially offset by

• $29.7 milliondecrease in direct operating expenses, which were 69.8% of revenue during the second quarter of 2016 as compared with 68.7% during the second quarter of 2015 as a result of:

◦ $16.6 million decrease in other direct operating expenses primarily due to lower contractual fees paid to our retail partners due to lower revenue and lower credit card fees driven by lower rental volume; and

◦ $13.1 million or 7.0% decrease in product costs to $173.3 million due to lower spend on movie content primarily due to content mix and fewer locations as compared to the second quarter of 2015 as we continue to remove underperforming kiosks to maximize profitability. The net impact of the revenue decline discussed above partially offset by the reduction in product cost resulted in a 2.1% decrease in gross margin to 55.4% for the second quarter of 2016.

• $11.3 milliondecrease in depreciation and amortization expenses primarily due to an increase in our fully depreciated asset base, partially offset by higher depreciation expense as a result of continued investment in our corporate technology infrastructure and additional depreciation for newly installed or replaced kiosks; and

• $3.0 million decrease in general and administrative expenses primarily as a result of ongoing cost reduction initiatives.

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Revenue decreased$148.0 million, or 15.4%, primarily due to the following:

• $130.6 million decrease from a 14.0%decrease in same store sales primarily due to:

◦ 15.9% decline in total disc rentals related to our same store kiosks primarily driven by:

▪ a higher impact from secular decline in the physical market on movie rentals in the first half of 2016 as compared to the first half of 2015;

▪ a higher negative impact on movie rentals in the first quarter of 2016 from the price increase implemented for movies in December of 2014. As we observed sequentially higher negative impacts on rentals for price sensitive customers each quarter throughout 2015, we believe the price increase contributed to the decline in rentals in the first half of 2016 as consumer behavior under the new price points settled in at lower levels of demand; partially offset by

▪ an increase in video game rentals primarily due to 2015 holiday sales of new generation platforms and the subsequent continued increase in the market penetration of the new generation platforms that increased demand for new generation content released at the end of 2015 and during the first six months of 2016; and

▪ higher total box office of movie titles released. Box office was 29.0% higher than the prior year with ten more titles including one title released in the first week of April 2016 that comprised 15.5% of the box office for titles released in the first half of 2016. Excluding this title, box office increased 9.0% as compared to the first half of 2015.

• $17.3 million decrease in revenue primarily from kiosks removed or relocated subsequent to the first half of 2015, due to continued efforts to optimize our network by removing underperforming kiosks.

Net revenue per rental increased$0.09 to $3.09 primarily due lower promotional spend as compared to the first half of 2015 and higher video game rentals, which have a higher per day rental price. While we continue to invest in customer-specific promotional offerings, we have continued during the first half of 2016 to reduce overall promotional spend by driving further efficiency in promotional programs.

43

Video game revenue represented 4.6% of total rental revenue and 1.7% of total disc rentals during the first half of 2016 as compared with 2.7% and 1.1%, respectively, during the first half of 2015, primarily due to consumer transition to new generation platforms as discussed above and underperformance of titles released in the fourth quarter of 2014 that led to comparably lower revenue in the first quarter of 2015. Blu-ray revenue represented 17.4% of total rental revenue and 14.1% of total disc rentals during the first half of 2016 as compared with 18.2% and 14.3%, respectively, during the first half of 2015.

Operating income decreased$36.9 million, or 23.5%, primarily due to the following:

• $148.0 milliondecrease in revenue as described above; partially offset by

• $73.6 milliondecrease in direct operating expenses, which were 70.4% of revenue during the first half of 2016 as compared with 67.2% during the first half of 2015 as a result of:

◦ $31.2 million decrease in product costs to $365.6 million due to lower spend on movie content primarily due to content mix and fewer locations as compared to the first half of 2015 partially offset by higher amortization in the first quarter of 2016 from the content overbuy in the fourth quarter of 2015. The net impact of the revenue decline discussed above partially offset by the reduction in product cost resulted in a 3.7% decrease in gross margin to 54.9% for the first half of 2016; and

◦ $42.4 million decrease in other direct operating expenses primarily due to lower contractual fees paid to our retail partners due to lower revenue and lower credit card fees driven by lower rental volume.

• $18.6 milliondecrease in depreciation and amortization expenses primarily due to an increase in our fully depreciated asset base, partially offset by higher depreciation expense as a result of continued investment in our corporate technology infrastructure and additional depreciation for newly installed or replaced kiosks;

• $12.8 milliondecrease in restructuring and related costs;

• $4.7 million decrease in general and administrative expenses primarily as a result of ongoing cost reduction initiatives; and

• $1.3 million decrease in marketing expenses due to ongoing cost containment measures.

Coinstar

	Three Months Ended											Six Months Ended
Dollars in thousands, except average transaction size	June 30,						Change					June 30,						Change
	2016			2015			$			%		2016			2015			$			%
Revenue	$	84,168		$	80,279		$	3,889		4.8	%	$	156,547		$	149,609		$	6,938		4.6	%
Expenses:
Direct operating	42,095			39,358			2,737			7.0	%	80,740			76,621			4,119			5.4	%
Marketing	399			1,232			(833		)	(67.6	)%	1,174			2,410			(1,236		)	(51.3	)%
General and administrative	8,494			7,768			726			9.3	%	16,358			15,563			795			5.1	%
Restructuring and related costs (Note 9)	3			—			3			NM*		465			550			(85		)	(15.5	)%
Segment operating income	33,177			31,921			1,256			3.9	%	57,810			54,465			3,345			6.1	%
Less: Depreciation and amortization	(7,595		)	(8,437		)	842			(10.0	)%	(15,004		)	(16,255		)	1,251			(7.7	)%
Operating income	$	25,582		$	23,484		$	2,098		8.9	%	$	42,806		$	38,210		$	4,596		12.0	%
Operating income as a percentage of revenue	30.4		%	29.3		%						27.3		%	25.5		%
Same store sales growth	11.1		%	1.9		%						10.1		%	1.4		%
Ending number of kiosks	20,810			21,140			(330		)	(1.6	)%	20,810			21,140			(330		)	(1.6	)%
Total transactions (in thousands)	17,987			18,200			(213		)	(1.2	)%	34,050			34,116			(66		)	(0.2	)%
Average transaction size	$	45.46		$	43.03		$	2.43		5.6	%	$	44.93		$	42.78		$	2.15		5.0	%

* Not Meaningful

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Revenue increased$3.9 million, or 4.8%, primarily due to higher revenue for Coinstar in the U.S. due to increased volume. Coinstar revenue in the U.K. and Canada was negatively impacted by unfavorable exchange rates due to the continued strengthening of the U.S. dollar versus the British pound and Canadian dollar compared to the prior year. Overall same store sales increased 11.1%.

44

The average Coinstar transaction size increased on a year over year basis, while the number of transactions decreased slightly.

Operating income increased$2.1 million, or 8.9%, primarily due to the following:

• $3.9 millionincrease in revenue as described above;

• $0.8 milliondecrease in marketing expenses due to an expected shift in timing of spend to later in 2016; and

• $0.8 milliondecrease in depreciation and amortization expenses primarily due to an increase in our fully depreciated asset base; partially offset by

• $2.7 millionincrease in direct operating expenses primarily due to increased revenue sharing and increased transportation and processing expenses from the higher revenue discussed above. This increase was partially offset by lower wireless charges on a portion of our kiosks due to a new contract transition which started in the first quarter of 2015, with 2016 reflecting contract savings on the entire network and by lower fleet vehicle expenses including fuel cost savings from reduced gas prices; and

• $0.7 million increase in general and administrative expenses primarily due to increased corporate allocations, as Coinstar's proportionate share of the total company's revenue has increased compared to the prior year, partially offset by ongoing cost reduction initiatives.

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Revenue increased$6.9 million, or 4.6%, primarily due to higher revenue for Coinstar in the U.S. due to increased volume. Coinstar revenue in the U.K. and Canada was negatively impacted by unfavorable exchange rates due to the continued strengthening of the U.S. dollar versus the British pound and Canadian dollar compared to the prior year. Overall same store sales increased 10.1%.

The average Coinstar transaction size increased on a year over year basis, while the number of transactions was flat.

Operating income increased$4.6 million, or 12.0%, primarily due to the following:

• $6.9 millionincrease in revenue as described above;

• $1.3 milliondecrease in depreciation and amortization expenses primarily due to an increase in our fully depreciated asset base; and

• $1.2 milliondecrease in marketing expenses due to an expected shift in timing of spend to later in 2016; partially offset by

• $4.1 millionincrease in direct operating expenses primarily due to increased revenue sharing and increased transportation and processing expenses from the higher revenue discussed above. This increase was partially offset by lower fleet vehicle expenses including fuel cost savings from reduced gas prices and lower wireless charges on a portion of our kiosks due to a new contract transition which started in the first quarter of 2015, with 2016 reflecting contract savings on the entire network; and

• $0.8 million increase in general and administrative expenses primarily due to increased corporate allocations as Coinstar's proportionate share of the total company's revenue has increased compared to the prior year, partially offset by ongoing cost reduction initiatives.

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ecoATM

	Three Months Ended											Six Months Ended
Dollars in thousands, except average selling price of value devices sold	June 30,						Change					June 30,						Change
	2016			2015			$			%		2016			2015			$			%
Revenue	$	44,800		$	26,062		$	18,738		71.9	%	$	86,889		$	45,811		$	41,078		89.7	%
Expenses:
Direct operating	37,291			27,227			10,064			37.0	%	75,185			50,033			25,152			50.3	%
Marketing	3,058			2,149			909			42.3	%	7,638			3,879			3,759			96.9	%
Research and development	1,194			1,549			(355		)	(22.9	)%	2,129			3,005			(876		)	(29.2	)%
General and administrative	3,573			2,094			1,479			70.6	%	7,575			4,062			3,513			86.5	%
Restructuring and related costs (Note 9)	384			—			384			NM*		789			127			662			521	%
Goodwill impairment	—			85,890			(85,890		)	(100.0	)%	—			85,890			(85,890		)	(100	)%
Segment operating loss	(700		)	(92,847		)	92,147			(99.2	)%	(6,427		)	(101,185		)	94,758			(93.6	)%
Less: depreciation and amortization	(8,398		)	(6,305		)	(2,093		)	33.2	%	(16,602		)	(12,207		)	(4,395		)	36.0	%
Operating loss	$	(9,098	)	$	(99,152	)	$	90,054		(90.8	)%	$	(23,029	)	$	(113,392	)	$	90,363		(79.7	)%
Ending number of kiosks	2,460			2,260			200			8.8	%	2,460			2,260			200			8.8	%
Average selling price of value devices sold	$	64.53		$	61.72		$	2.81		4.6	%	$	65.10		$	61.09		$	4.01		6.6	%
Number of value devices sold	619,436			409,331			210,105			51.3	%	1,190,258			726,465			463,793			63.8	%
Number of overall devices sold	805,323			704,450			100,873			14.3	%	1,534,759			1,223,083			311,676			25.5	%

* Not Meaningful

On November 10, 2015, we acquired certain assets and liabilities of Gazelle. Results of operations for Gazelle are included in ecoATM for the three and six months ended June 30, 2016.

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Our key revenue drivers are the total devices collected, the number of those devices that are value devices, the mix of those value devices, as well as the average selling price that we receive when reselling the devices. Revenue includes shipping fees collected related to the sale of devices. Shipping costs related to acquiring devices are included in direct operating costs.

Revenue increased$18.7 million, or 71.9%, primarily due to revenue included in 2016 from devices acquired and sold through Gazelle. The results of Gazelle have also favorably impacted our mix of value devices and our average selling price of value devices sold.

Operating loss decreased$90.1 million primarily due to:

• $85.9 million goodwill impairment charge recognized in 2015; and

• $18.7 millionincrease in revenue described above; partially offset by

• $10.1 millionincrease in direct operating expenses primarily due to increased acquisition, transportation and processing costs from the addition of Gazelle and costs associated with our increased installed ecoATM kiosk base, partially offset by lower machine support costs from headcount reductions and lower transportation costs due to a reduction of trips to ecoATM machines as a result of operating efficiencies;

• $2.1 millionincrease in depreciation and amortization expense primarily from depreciation on our increased installed ecoATM kiosk base, and to a lesser extent, the addition of amortization expense from intangibles recognized from the acquisition of Gazelle;

• $1.5 millionincrease in general and administrative expenses primarily due to increased corporate allocations to better align with direct costs related to operating ecoATM and the addition of Gazelle, partially offset by ongoing cost reduction initiatives; and

• $0.9 millionincrease in marketing expense primarily due to the addition of Gazelle, partially offset by lower integrated marketing and promotion costs for the ecoATM business as compared to the prior year period and synergies recognized as a result of the Gazelle acquisition.

46

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Revenue increased$41.1 million, or 89.7%, primarily due to revenue included in 2016 from devices acquired and sold through Gazelle. The results of Gazelle have also favorably impacted our mix of value devices and our average selling price of value devices sold.

Operating loss decreased$90.4 million primarily due to:

• $85.9 million goodwill impairment charge recognized in 2015;

• $41.1 millionincrease in revenue described above; and

• $0.9 million decrease in research and development expense primarily due to a reduction in ecoATM kiosk design costs and payroll savings through workforce reduction, partially offset by increased software engineering costs from the addition of Gazelle; partially offset by

• $25.2 millionincrease in direct operating expenses primarily due to increased acquisition, transportation and processing costs from the addition of Gazelle and costs associated with our increased installed ecoATM kiosk base, partially offset by lower transportation costs due to a reduction of trips to ecoATM machines as a result of operating efficiencies and lower machine support costs from headcount reductions;

• $4.4 millionincrease in depreciation and amortization expense primarily from depreciation on our increased installed ecoATM kiosk base, and to a lesser extent, the addition of amortization expense from intangibles recognized from the acquisition of Gazelle;

• $3.8 millionincrease in marketing expense primarily due to the addition of Gazelle, partially offset by lower integrated marketing and promotion costs for the ecoATM business as compared to the prior year period and synergies recognized as a result of the Gazelle acquisition;

• $3.5 millionincrease in general and administrative expenses primarily due to increased corporate allocations to better align with direct costs related to operating ecoATM and the addition of Gazelle, partially offset by ongoing cost reduction initiatives; and

• $0.7 million increase in restructuring and related costs.

Interest Expense, Net

Dollars in thousands	Three Months Ended											Six Months Ended
	June 30,						Change					June 30,						Change
	2016			2015			$			%		2016			2015			$			%
Cash interest expense	$	10,141		$	11,499		$	(1,358	)	(11.8	)%	$	20,795		$	22,894		$	(2,099	)	(9.2	)%
Amortization of debt discount and deferred financing fees	613			692			(79		)	(11.4	)%	1,251			1,385			(134		)	(9.7	)%
Total cash and non-cash interest expense	10,754			12,191			(1,437		)	(11.8	)%	22,046			24,279			(2,233		)	(9.2	)%
Gain from early extinguishment of debt	(418		)	—			(418		)	NM*		(11,446		)	—			(11,446		)	NM*
Total interest expense	10,336			12,191			(1,855		)	(15.2	)%	10,600			24,279			(13,679		)	(56.3	)%
Interest income	(35		)	(8		)	(27		)	337.5	%	(57		)	(25		)	(32		)	128.0	%
Interest expense, net	$	10,301		$	12,183		$	(1,882	)	(15.4	)%	$	10,543		$	24,254		$	(13,711	)	(56.5	)%

* Not Meaningful

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Interest expense, net decreased $1.9 million, or 15.4%, primarily due to:

• $1.4 million lower interest expense due to lower outstanding borrowings; and

• $0.4 million gain from early extinguishment of debt recognized in 2016. See Note 7: Debt and Other Long-Term Liabilitiesin our Notes to Consolidated Financial Statements for more information.

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Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Interest expense, net decreased $13.7 million, or 56.5%, primarily due to:

• $11.4 million gain from early extinguishment of debt recognized in 2016. See Note 7: Debt and Other Long-Term Liabilitiesin our Notes to Consolidated Financial Statements for more information; and

• $2.2 million lower interest expense due to lower outstanding borrowings.

Other Income (Expense), Net

Dollars in thousands	Three Months Ended									Six Months Ended
	June 30,				Change					June 30,					Change
	2016		2015		$			%		2016		2015			$		%
Other, net	$	223	$	642	$	(419	)	(65.3	)%	$	1,452	$	(1,704	)	$	3,156	NM*

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Other income (expense), net decreased by $0.4 million or 65.3%, primarily due to the impact of the Canadian dollar exchange rates on our Coinstar operations.

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Other income (expense), net increased by $3.2 million, primarily due to the impact of the Canadian dollar exchange rates on our Coinstar operations.

Income Tax Expense

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

Our effective tax rate from continuing operations was 34.1% and (62.4)% for the three months endedJune 30, 2016 and 2015, respectively. Our effective tax rate for the three months endedJune 30, 2016, was lower than the U.S. Federal statutory rate of 35.0% primarily due to the domestic production activities deduction, partially offset by state income taxes. Our effective tax rate for the three months endedJune 30, 2015, was lower than the U.S. Federal statutory rate of 35.0% primarily due to an $85.9 million non-tax deductible goodwill impairment charge that was recorded in the second quarter of 2015 and state income taxes, partially offset by the domestic production activities deduction and a net decrease in valuation allowances related to capital loss carryforwards and state tax credit carryforwards.

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

Our effective tax rate from continuing operations was 34.8% and 113.4% for the six months endedJune 30, 2016 and 2015, respectively. Our effective tax rate for the six months endedJune 30, 2016, was lower than the U.S. Federal statutory rate of 35.0% primarily due to the domestic production activities deduction, partially offset by state income taxes. Our effective tax rate for the six months endedJune 30, 2015, was higher than the U.S. Federal statutory rate of 35.0% primarily due to an $85.9 million non-tax deductible goodwill impairment charge that was recorded in the second quarter of 2015 and state income taxes, partially offset by the domestic production activities deduction.

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Non-GAAP Financial Measures

Non-GAAP measures may be provided as a complement to results provided in accordance with United States generally accepted accounting principles (“GAAP”).

We use the following non-GAAP financial measures to evaluate our financial results:

• Core adjusted EBITDA from continuing operations;

• Core diluted earnings per share (“EPS”) from continuing operations;

• Free cash flow; and

• Net debt and net leverage ratio.

These measures, the definitions of which are presented below, are non-GAAP because they exclude certain amounts which are included in the most directly comparable measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for our GAAP financial measures and may not be comparable with similarly titled measures of other companies.

Core and Non-Core Results

We distinguish our core activities, those associated with our primary operations which we directly control, from non-core activities. Non-core activities may include nonrecurring events or events we do not directly control. Our non-core adjustments for the periods presented include i) goodwill impairment, ii) restructuring costs (including severance and early lease termination costs, and the related asset impairments) associated with actions to reduce costs in our continuing operations across the company, iii) compensation expense for rights to receive cash issued in conjunction with our acquisition of ecoATM and attributable to post-combination services as they are fixed amount acquisition related awards and not indicative of the directly controllable future business results, and iv) loss from equity method investments, which represents our share of loss from entities we do not consolidate or control (“Non-Core Adjustments”).

We believe investors should consider our core results because they are more indicative of our ongoing performance and trends, are more consistent with how management evaluates our operational results and trends, provide meaningful supplemental information to investors through the exclusion of certain expenses which are either nonrecurring or may not be indicative of our directly controllable business operating results, allow for greater transparency in assessing our performance, help investors better analyze the results of our business and assist in forecasting future periods.

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Core Adjusted EBITDA from continuing operations

Our non-GAAP financial measure core adjusted EBITDA from continuing operations is defined as earnings from continuing operations before depreciation, amortization and other; interest expense, net; income taxes; share-based payments expense; and Non-Core Adjustments.

A reconciliation of core adjusted EBITDA from continuing operations to net income from continuing operations, the most comparable GAAP financial measure, is presented in the following table:

	Three Months Ended										Six Months Ended
	June 30,					Change					June 30,					Change
Dollars in thousands	2016		2015			$			%		2016		2015			$			%
Net income (loss) from continuing operations	$	40,548	$	(47,351	)	$	87,899		NM*		$	78,999	$	(5,196	)	$	84,195		NM*
Depreciation, amortization and other	37,778		48,483			(10,705		)	(22.1	)%	77,686		94,478			(16,792		)	(17.8	)%
Interest expense, net	10,301		12,183			(1,882		)	(15.4	)%	10,543		24,254			(13,711		)	(56.5	)%
Income taxes	21,013		18,185			2,828			15.6	%	42,111		44,027			(1,916		)	(4.4	)%
Share-based payments expense(1)	5,298		3,320			1,978			59.6	%	9,690		7,261			2,429			33.5	%
Adjusted EBITDA from continuing operations	114,938		34,820			80,118			230.1	%	219,029		164,824			54,205			32.9	%
Non-Core Adjustments:
Goodwill impairment	—		85,890			(85,890		)	(100.0	)%	—		85,890			(85,890		)	(100.0	)%
Restructuring and related costs	401		—			401			NM*		3,676		15,851			(12,175		)	(76.8	)%
Rights to receive cash issued in connection with the acquisition of ecoATM	345		1,005			(660		)	(65.7	)%	785		2,925			(2,140		)	(73.2	)%
Loss from equity method investments, net	208		133			75			56.4	%	415		265			150			56.6	%
Core adjusted EBITDA from continuing operations	$	115,892	$	121,848		$	(5,956	)	(4.9	)%	$	223,905	$	269,755		$	(45,850	)	(17.0	)%

(1) Includes both non-cash share-based compensation for executives, non-employee directors and employees as well as share-based payments for content arrangements.

Comparing three months endedJune 30, 2016 to three months endedJune 30, 2015

The decrease in our core adjusted EBITDA from continuing operations was primarily due to decreased segment operating income in our Redbox segment, partially offset by decreased segment operating losses in our ecoATM segment and our All Other reporting category. The other significant components of core adjusted EBITDA from continuing operations have been discussed previously in the Results of Operations section above.

Comparing six months endedJune 30, 2016 to six months endedJune 30, 2015

The decrease in our core adjusted EBITDA from continuing operations was primarily due to decreased segment operating income in our Redbox segment, partially offset by decreased segment operating losses in our ecoATM segment and our All Other reporting category. The other significant components of core adjusted EBITDA from continuing operations have been discussed previously in the Results of Operations section above.

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Core Diluted EPS from continuing operations

Beginning in the first quarter of 2016, to align better with our GAAP presentation of EPS, we adjusted our non-GAAP financial measure of core diluted EPS from continuing operations to be defined as diluted earnings per share from continuing operations utilizing the two class method excluding non-core adjustments, net of applicable taxes. Historically we had defined this measure using diluted earnings per share from continuing operations utilizing the treasury stock method excluding non-core adjustments, net of applicable taxes. Prior period results have been updated to reflect this change.

A reconciliation of core diluted EPS from continuing operations to diluted EPS from continuing operations, the most comparable GAAP financial measure, is presented in the following table:

	Three Months Ended											Six Months Ended
	June 30,						Change					June 30,						Change
	2016			2015			$			%		2016			2015			$			%
Diluted EPS from continuing operations per common share	$	2.38		$	(2.66	)	$	5.04		NM*		$	4.67		$	(0.30	)	$	4.97		NM*
Non-Core Adjustments:
Goodwill impairment(1)	—			4.81			(4.81		)	(100.0	)%	—			4.75			(4.75		)	(100.0	)%
Restructuring and related costs (pre-tax)	0.02			—			0.02			NM*		0.21			0.89			(0.68		)	(76.4	)%
Rights to receive cash issued in connection with the acquisition of ecoATM (pre-tax)	0.02			0.06			(0.04		)	(66.7	)%	0.04			0.16			(0.12		)	(75.0	)%
Loss from equity method investments, net (pre-tax)	0.01			0.01			—			—	%	0.02			0.01			0.01			100.0	%
Tax impact of non-core adjustments(1)(2)	(0.02		)	(0.02		)	—			—	%	(0.09		)	(0.40		)	0.31			(77.5	)%
Core diluted EPS from continuing operations	$	2.41		$	2.20		$	0.21		9.5	%	$	4.85		$	5.11		$	(0.26	)	(5.1	)%

 * Not Meaningful

(1) The goodwill impairment recognized in 2015 is non-tax deductible.

(2) Using the applicable effective tax rate for the respective periods.

Free Cash Flow

Our non-GAAP financial measure free cash flow is defined as net cash provided by operating activities after capital expenditures. We believe free cash flow is an important non-GAAP measure as it provides additional information to users of the financial statements regarding our ability to service, incur or pay down indebtedness and repurchase our securities. A reconciliation of free cash flow to net cash provided by operating activities, the most comparable GAAP financial measure, is presented in the following table:

	Three Months Ended											Six Months Ended
	June 30,						Change					June 30,						Change
Dollars in thousands	2016			2015			$			%		2016			2015			$			%
Net cash provided by operating activities	$	75,020		$	75,143		$	(123	)	(0.2	)%	$	142,225		$	181,215		$	(38,990	)	(21.5	)%
Purchase of property and equipment	(14,921		)	(19,508		)	4,587			(23.5	)%	(28,374		)	(40,217		)	11,843			(29.4	)%
Free cash flow	$	60,099		$	55,635		$	4,464		8.0	%	$	113,851		$	140,998		$	(27,147	)	(19.3	)%

An analysis of our net cash from operating activities and used in investing and financing activities is provided below.

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Net Debt and Net Leverage Ratio

Our non-GAAP financial measure net debt is defined as the total face value of outstanding debt, including capital leases, less cash and cash equivalents held in financial institutions domestically. Our non-GAAP financial measure net leverage ratio is defined as net debt divided by core adjusted EBITDA from continuing operations for the last twelve months (LTM). We believe net debt and net leverage ratio are important non-GAAP measures because they:

• are used to assess the degree of leverage by management;

• provide additional information to users of the financial statements regarding our ability to service, incur or pay down indebtedness and repurchase our securities as well as additional information about our capital structure; and

• are reported quarterly to support covenant compliance under our credit agreement.

A reconciliation of net debt to total outstanding debt including capital leases, the most comparable GAAP financial measure, is presented in the following table:

	June 30, 2016			December 31, 2015			Change
Dollars in thousands							$			%
Senior unsecured notes(1)	$	549,212		$	608,908		$	(59,696	)	(9.8	)%
Term loans(1)	129,375			136,875			(7,500		)	(5.5	)%
Revolving line of credit	80,000			140,500			(60,500		)	(43.1	)%
Capital leases	5,531			5,889			(358		)	(6.1	)%
Total principal value of outstanding debt including capital leases	764,118			892,172			(128,054		)	(14.4	)%
Less domestic cash and cash equivalents held in financial institutions	(41,742		)	(46,192		)	4,450			(9.6	)%
Net debt	722,376			845,980			(123,604		)	(14.6	)%
LTM Core adjusted EBITDA from continuing operations(2)	$	439,435		$	485,285		$	(45,850	)	(9.4	)%
Net leverage ratio	1.64			1.74

(1) See debt section of Liquidity and Capital Resources below and Note 7: Debt and Other Long-Term Liabilitiesin our Notes to Consolidated Financial Statements for detail of associated debt discount.

(2)    LTM Core Adjusted EBITDA from continuing operations for the twelve months ended June 30, 2016 andDecember 31, 2015 was determined as follows:

Dollars in thousands
Core adjusted EBITDA from continuing operations for the six months ended June 30, 2016	$	223,905
Add: Core adjusted EBITDA from continuing operations for the twelve months ended December 31, 2015(1)	485,285
Less: Core adjusted EBITDA from continuing operations for the six months ended June 30, 2015	(269,755		)
LTM Core adjusted EBITDA from continuing operations for the twelve months ended June 30, 2016	$	439,435

(1) Core adjusted EBITDA from continuing operations for the twelve months ended December 31, 2015 is obtained from our Annual Report on Form 10-K for the period ended December 31, 2015, where it is reconciled to net income from continuing operations, the most comparable GAAP financial measure, and represents the LTM core adjusted EBITDA from continuing operations we use in our calculation of net leverage ratio as of December 31, 2015.

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Liquidity and Capital Resources

We believe our existing cash, cash equivalents and amounts available to us under our Credit Facility will be sufficient to fund our cash requirements and capital expenditure needs for at least the next 12 months. After that time, the extent of additional financing needed, if any, will depend on the success of our business. If we significantly increase kiosk installations beyond planned levels or if our Redbox, Coinstar or ecoATM kiosks generate lower than anticipated revenue or operating results, then our cash needs may increase. Furthermore, our future capital requirements will depend on a number of factors, including consumer use of our products and services, the timing and number of machine installations, the number of available installable kiosks, the type and scope of product and service enhancements, the cost of developing potential new product and service offerings, and enhancements, and cash required to fund potential future acquisitions, investment or capital returns to security holders such as through share or debt repurchases.

The following is an analysis of our year-to-date cash flows:

Net Cash from Operating Activities

Our net cash from operating activities decreased by $39.0 million primarily due to the following:

• $132.4 million change in net non-cash income and expense included in net income primarily due to changes in goodwill impairment, depreciation and other, gain from early extinguishment of debt and deferred income taxes; and

• $4.4 million increase in net cash inflow from changes in working capital primarily due to changes in accounts payable, content library, accrued payable to retailers, other accrued liabilities, accounts receivable, and prepaid expenses; partially offset by

• $89.0 million increase in net income.

Net Cash used in Investing Activities

We used $28.3 million of net cash in our investing activities primarily due to purchases of property and equipment for kiosks and corporate infrastructure.

Net Cash used in Financing Activities

We used $135.2 million of net cash from financing activities primarily due to:

• $68.0 million in net payments for borrowings from our Credit Facility;

• $47.5 million used to repurchase a portion of our 2021 and 2019 Notes;

• $15.1 million for dividends paid; and

• $3.1 million payment for capital lease obligations and other debt.

Cash and Cash Equivalents

A portion of our business involves collecting and processing large volumes of cash, most of it in the form of coins. As of June 30, 2016, our cash and cash equivalent balance was $199.0 million, of which $74.7 million was identified for settling our accrued payable to our retailer partners in relation to our Coinstar kiosks. The remaining balance of our cash and cash equivalents was available for use to support our liquidity needs.

Debt

Debt comprises the following:

	Senior Notes						Credit Facility						Total Debt
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of June 30, 2016
Principal	$	320,614		$	228,598		$	129,375		$	80,000		$	758,587
Unamortized discount and deferred financing fees	(2,922		)	(3,234		)	(224		)	(1,968		)	(8,348		)
Total	317,692			225,364			129,151			78,032			750,239
Less: current portion	—			—			(15,000		)	—			(15,000		)
Total long-term portion	$	317,692		$	225,364		$	114,151		$	78,032		$	735,239

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2019 Notes

On March 12, 2013, we entered into an indenture pursuant to which we issued $350.0 million principal amount of 6.000% Senior Notes due 2019 (the "2019 Notes") at par for proceeds, net of expenses, of $343.8 million. Each of our direct and indirect U.S. subsidiaries guarantees the 2019 Notes.

During the six months ended June 30, 2016, we repurchased 29,386 notes, or $29.4 million in face value of notes, for $23.4 million in cash. The gain from early extinguishment of these notes was approximately $5.6 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

As of June 30, 2016, we were in compliance with the covenants of the related indenture.

2021 Notes

On June 9, 2014, we entered into an indenture pursuant to which we issued $300.0 million principal amount of 5.875% Senior Notes due 2021 (the “Senior Notes due 2021”) at par for proceeds, net of expenses, of $294.0 million. Each of our direct and indirect U.S. subsidiaries guarantees the 2021 Notes.

During the six months ended June 30, 2016, we repurchased 30,310 notes, or $30.3 million in face value of notes, for $24.1 million in cash. The gain from early extinguishment of these notes was approximately $5.8 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

As of June 30, 2016, we were in compliance with the covenants of the related indenture.

Revolving Line of Credit and Term Loan

Our senior secured credit facility (the “Credit Facility”) consists of (a) a $150.0 million amortizing term loan (the “Term Loan”) and (b) a $600.0 million revolving line of credit (the “Revolving Line”), which includes (i) a $75.0 million sublimit for the issuance of letters of credit, (ii) a $50.0 million sublimit for swing line loans and (iii) a $75.0 million sublimit for loans in certain foreign currencies available to us and certain wholly owned Company foreign subsidiaries (the “Foreign Borrowers”). We may, subject to applicable conditions and subject to obtaining commitments from lenders, request an increase in the Revolving Line of up to $200.0 million in aggregate (the “Accordion”). As of June 30, 2016, the interest rate on amounts outstanding under the Credit Facility was 2.20% and we were in compliance with the covenants of the Credit Facility.

Required principal amortization payments under the Term Loan are as follows:

Dollars in thousands	Repayment Amount
Remainder of 2016	$	7,500
2017	15,000
2018	20,625
2019	86,250
Total	$	129,375

Credit Ratings

On February 9, 2016, Standards and Poor's revised their credit outlook for our debt from stable to negative and downgraded the ratings assigned to our debt as follows:

• Corporate Credit Rating, to BB- from BB+; and

• Issue-level Ratings on Unsecured Notes, to B from BB-.

On February 19, 2016, Moody's Investor Services revised their credit outlook for our debt from stable to negative and downgraded the ratings assigned to our debt as follows:

• Corporate Family Rating, to Ba3 from Ba2; and

• Senior Unsecured Regular Bond/Debenture, to B1 (LGD5) from Ba3 (LGD5).

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Our credit rating may change periodically due to current events related to our business, industry or other exogenous factors that have an impact on our rating agencies’ expectations of, or confidence in, the future performance of our business relative to their determination of our ability to satisfy the balance of our debt obligations and may be more susceptible to changing during periods of greater uncertainty. Notwithstanding recent actions by the rating agencies, we believe that our existing cash and cash equivalents and amounts available to us under the Credit Facility, provide sufficient funds to meet the cash and capital requirements of our business. We believe the impact of the downgrades would result in a higher cost of debt but would not severely limit our ability to access debt markets if we felt it was necessary to do so.

Other Contingencies

Contractual Payment Obligations

Significant changes to our contractual payment obligations as disclosed in our 2015 Form 10-K, as of June 30, 2016, are as follows:

Dollars in thousands	Total		Remaining in 2016		2017 & 2018		2019 & 2020		2021 & Beyond
Long-term debt(1)	$	758,587	$	87,500	$	33,750	$	408,739	$	228,598
Contractual interest on long-term debt	$	120,052	$	16,333	$	65,334	$	31,670	$	6,715
Total estimated movie content commitments(2)	$	460,681	$	226,902	$	233,779	$	—	$	—

(1) See Note 7: Debt and Other Long-Term Liabilities in our Notes to Consolidated Financial Statements.

(2) See Note 14: Commitments and Contingencies in our Notes to Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements have been prepared in accordance with US GAAP. Preparation of these statements requires management to make judgments and estimates. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the present circumstances. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in our 2015 Form 10-K at Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

There have been no material changes to the critical accounting policies previously disclosed in our 2015 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our reported market risks and risk management policies since the filing of our 2015 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report and has determined that such disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

We also maintain a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). No changes in our internal control over financial reporting occurred during the year-to-date period ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In October 2009, an Illinois resident, Laurie Piechur, individually and on behalf of all others similarly situated, filed a putative class action complaint against our Redbox subsidiary in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. The plaintiff alleged that, among other things, Redbox charges consumers illegal and excessive late fees in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and that Redbox's rental terms violate the Illinois Rental Purchase Agreement Act or the Illinois Automatic Contract Renewal Act and the plaintiff is seeking monetary damages and other relief. In November 2009, Redbox removed the case to the U.S. District Court for the Southern District of Illinois. In February 2010, the District Court remanded the case to the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. In May 2010, the court denied Redbox's motion to dismiss the plaintiff's complaint. In November 2011, the plaintiff moved for class certification, and Redbox moved for summary judgment. The court denied Redbox's motion for summary judgment in February 2012. The plaintiff filed an amended complaint on April 19, 2012, and an amended motion for class certification on June 5, 2012. The court denied Redbox's motion to dismiss the amended complaint. The amended class certification motion was briefed and argued. At the hearing on plaintiff's amended motion for class certification, the plaintiff dismissed all claims but two and is pursuing only her claims under the Illinois Rental Purchase Agreement Act and the Illinois Automatic Contract Renewal Act. On May 21, 2013, the court denied plaintiff's amended class action motion. On January 29, 2014, the Illinois Supreme Court denied plaintiff’s petition for leave to appeal the trial court’s denial of class certification. Redbox moved to dismiss all remaining claims on mootness grounds, and the Court granted Redbox’s motion on December 11, 2014. The plaintiffs appealed on January 7, 2015. Oral argument was held November 10, 2015. The Appellate Court affirmed the trial court’s rulings on January 11, 2016. Plaintiffs filed a petition for review with the Illinois Supreme Court on February 16, 2016, and Redbox filed an answer on March 8, 2016. The Illinois Supreme Court denied Plaintiffs petition on May 25, 2016. We continue to believe that the claims against us are without merit and intend to defend ourselves vigorously in this matter should plaintiff seek further appellate review. Currently, no accrual has been established as it was not possible to estimate the possible loss or range of loss because this matter had not advanced to a stage where we could make any such estimate.

ITEM 1A. RISK FACTORS

Other than the risk factor discussed below, there have been no material changes from risk factors previously disclosed in our 2015 Form 10-K. 

There are a number of risks and uncertainties associated with the proposed merger.

On July 24, 2016, the company entered into the Merger Agreement providing for the acquisition of the company by Parent in an all cash transaction, consisting of a tender offer, followed by the subsequent back-end Outerwall Merger under Section 251(h) of the DGCL, immediately followed by the Redbox Merger. The proposed Offer and Mergers are subject to various risks and uncertainties, including the following:

• risks that the proposed transactions, including the Offer and the Mergers, may not be completed in a timely manner or at all;

• uncertainties as to the percentage of our stockholders that will support the proposed transactions and tender their shares in the Offer;

• the possibility that competing offers or acquisition proposals for the company will be made;

• the possibility that any or all of the various conditions to the consummation of the proposed transactions may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals);

• the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement (such as the occurrence of a material adverse effect), including in circumstances that would require us to pay a termination fee or other expenses;

• risks related to the equity and debt financing and related guarantee arrangements entered into in connection with the proposed transactions, including potential failure to fund;

• the effect of the announcement or pendency of the proposed transactions on our ability to retain and hire key personnel, our ability to maintain relationships with our customers, retailers, suppliers and others with whom we do business, or otherwise on our operating results and business generally;

56

• risks related to diverting management’s attention from our ongoing and future business operations; and

• the risk that stockholder litigation in connection with the proposed transactions may result in significant costs of defense, indemnification and liability.

If the Offer and the Mergers are not consummated for any reason, our stockholders will not receive the consideration that Parent has agreed to pay upon the consummation of the Mergers, and the price of our common stock may decline to the extent that its current market price reflects an assumption that the Mergers will be consummated. Such decline could be significant.

ITEM 2. UNREGISTERED SALES OF EQUITY, SECURITIES, AND USE OF PROCEEDS

The following table summarizes information regarding shares repurchased during the quarter ended June 30, 2016:

	Total Number of Shares Repurchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Repurchase Plans or Programs	Maximum Approximate Dollar Value (in thousands) of Shares that May Yet be Purchased Under the Plans or Programs
4/1/16 - 4/30/16	495	$	39.38	—	$	256,407
5/1/16 - 5/31/16	470	$	41.27	—	$	256,407
6/1/16 - 6/30/16	209	$	42.51	—	$	256,407
	1,174			—

(1) Represents shares tendered for tax withholding on vesting of restricted stock awards, none of which are included against the dollar value of shares that may be purchased under programs approved by our Board of Directors.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

57

ITEM 6. EXHIBITS

The following exhibits are filed herewith and this list is intended to constitute the exhibit index.

Exhibit Number	Description of Document
10.1*	2016 Incentive Compensation Plan for Chief Executive Officer.
10.2*	2016 Incentive Compensation Plan for Executive Leaders.
10.3*	Offer Letter, dated February 4, 2014, between Outerwall Inc. and James Gaherity.
10.4*	Employment Agreement, dated March 11, 2014, between Outerwall Inc. and James Gaherity.
10.5*	Change of Control Agreement, dated March 11, 2014, between Outerwall Inc. and James Gaherity.
10.6*	Offer Letter, dated November 7, 2015, between Outerwall Inc. and David D. Maquera.
10.7*	Employment Agreement, dated November 23, 2015, between Outerwall Inc. and David D. Maquera.
10.8*	Change of Control Agreement, dated November 23, 2015, between Outerwall Inc. and David D. Maquera.
31.1	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

* Indicates a management contract or compensatory plan or arrangement.

58

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OUTERWALL INC.
By:	/s/ Galen C. Smith
	Galen C. Smith
	Chief Financial Officer
	July 28, 2016

59

EX-10.1

EXHIBIT 10.1

OUTERWALL INC.

2016 INCENTIVE COMPENSATION PLAN

FOR CHIEF EXECUTIVE OFFICER

SUMMARY

The 2016 Incentive Compensation Plan for Chief Executive Officer (the “Plan”) is a cash bonus plan for the Chief Executive Officer (the “CEO”) of Outerwall Inc. (the “Company”). The Plan provides an incentive cash bonus based on the achievement of goals relating to the performance of the Company and individual performance. The performance period for the Plan is January 1, 2016 to December 31, 2016 (the "Performance Period").

OVERVIEW

The Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) administers the Plan. The Compensation Committee, in its sole discretion, selects the individuals who will participate in the Plan and the actual bonus (if any) payable to each participant. The target bonus for each participant is determined as a percentage of such participant’s base salary, as determined by the Compensation Committee in its sole discretion (the "Target Bonus").

ELIGIBILITY REQUIREMENTS

Unless specifically provided otherwise in a written agreement between the Company and a participant, a participant must be continuously employed by the Company from January 1, 2016 through December 31, 2016 to be eligible for payment under the Plan. A participant hired after January 1, 2016 and employed through December 31, 2016 may receive a pro-rated bonus payment. A participant who meets these eligibility requirements will be eligible to receive a bonus, even if the participant is not employed by the Company on the date the bonus payment is made.

BONUS PAYOUT

Payout under the Plan will be determined as follows:

1. Eighty percent (80%) will be based on the achievement of the following Company performance measures during the Performance Period.

Performance Measures	1st Half Weighting1	2nd Half Weighting1	Total	Targets & Potential Payout
Outerwall Direct Contribution Margin Percent 2	35%	35%	70%	See Appendix
Outerwall Revenue	15%	15%	30%	See Appendix

¹ Achievement for Outerwall Direct Contribution Margin Percent and Outerwall Revenue will be determined for each six month period in the Performance Period, with potential achievement ranging from 0% to 200% for each measure and the aggregate payout. 1^st Half is January 1 to June 30, 2016. 2^nd Half is July 1 to December 31, 2016.

² Direct Contribution Margin Percent is defined as Direct Contribution Margin divided by Revenue.

2. Twenty percent (20%) will be based on the Compensation Committee’s discretion after evaluating the participant’s individual performance during the Performance Period, based on any criteria that the Compensation Committee determines to be appropriate in its sole discretion. The Compensation Committee will review and approve all individual bonuses. Participants under the Plan may receive between 0% and 200% of the portion of the Target Bonus applicable to this component.

In aggregate, participants under the Plan may receive between 0% and 200% of the Target Bonus.

The Compensation Committee may, in its sole discretion, make adjustments to the payouts under the Plan as a result of extraordinary events and/or conditions that either positively or negatively impact the Company's performance.

Payment of each bonus will be made as soon as practicable after the end of the Performance Period, but in any event will be made no later than March 15, 2017. Bonuses will be paid in cash in a single lump sum, subject to payroll taxes and tax withholding.

OTHER

Each bonus that may become payable under the Plan will be paid solely from the general assets of the Company. Nothing in the Plan should be construed to create a trust or to establish or evidence any participant’s claim of any right to payment of a bonus other than as an unsecured general creditor with respect to any payment to which a participant may be entitled.

No participant will have any claim to a bonus under the Plan, and the Compensation Committee will have no obligation for uniformity of treatment of participants under the Plan. Furthermore, nothing in the Plan will be deemed to limit in any way the Compensation Committee's full discretion to determine whether to grant any bonuses hereunder.

The Compensation Committee reserves the right to unilaterally amend, modify or terminate the Plan at any time, including amending the Plan as it deems necessary or desirable to avoid adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended.

The Plan is subject to the Company's Policy on Reimbursement of Incentive Payments.

EX-10.2

EXHIBIT 10.2

OUTERWALL INC.

2016 INCENTIVE COMPENSATION PLAN

FOR EXECUTIVE LEADERS

SUMMARY

The 2016 Incentive Compensation Plan for Executive Leaders (the “Plan”) is a cash bonus plan in which Outerwall Inc. (the “Company”) Line of Business (the “LOB”) and Shared Services Unit (the “SSU”) Leaders are eligible to participate. The Plan provides cash bonuses based on the achievement of goals relating to the performance of the Company, the performance of a particular line of business or shared service unit, and individual performance. The performance period for the Plan is January 1, 2016 to December 31, 2016 (the "Performance Period").

OVERVIEW

The Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) administers the Plan. The Compensation Committee, in its sole discretion, selects the individuals who will participate in the Plan and the actual bonus (if any) payable to each participant. The target bonus for each participant is determined as a percentage of such participant’s base salary, as determined by the Compensation Committee in its sole discretion (the "Target Bonus").

ELIGIBILITY REQUIREMENTS

Unless specifically provided otherwise in a written agreement between the Company and a participant, a participant must be continuously employed by the Company from January 1, 2016 through December 31, 2016 to be eligible for payment under the Plan. A participant hired after January 1, 2016 and employed through December 31, 2016 may receive a pro-rated bonus payment. A participant who meets these eligibility requirements will be eligible to receive a bonus, even if the participant is not employed by the Company on the date the bonus payment is made.

BONUS PAYOUT

Payout under the Plan will be determined as follows:

1. Eighty percent (80%) will be based on the achievement of the following Company performance measures during the Performance Period and modified up or down by the LOB or SSU Score, as determined by the Compensation Committee in its sole discretion.

Performance Measures	1st Half Weighting1	2nd Half Weighting1	Total	Targets & Potential Payout
Outerwall Direct Contribution Margin Percent 2	35%	35%	70%	See Appendix
Outerwall Revenue	15%	15%	30%	See Appendix
LOB or SSU Score (Modifier)3

¹ Achievement for Outerwall Direct Contribution Margin Percent and Outerwall Revenue will be determined for each six month period in the Performance Period, with potential achievement ranging from 0% to 200% for each measure and the aggregate payout. 1^st Half is January 1 to June 30, 2016. 2^nd Half is July 1 to December 31, 2016.

² Direct Contribution Margin Percent is defined as Direct Contribution Margin divided by Revenue.

³ The LOB or SSU Score, as applicable, is a discretionary measure guided by results on revenue, profitability, and overall LOB or SSU performance during the Performance Period.

2. Twenty percent (20%) will be based on the Compensation Committee’s discretion after evaluating a participant’s individual performance during the Performance Period, based on any criteria that the Compensation Committee determines to be appropriate in its sole discretion. The Company's Chief Executive Officer will make recommendations to the Compensation Committee regarding individual bonuses under this component. The Compensation Committee will then review and approve all individual bonuses. Participants under the Plan may receive between 0% and 200% of the portion of the Target Bonus applicable to this component.

In aggregate, participants under the Plan may receive between 0% and 200% of the Target Bonus.

The Compensation Committee may, in its sole discretion, make adjustments to the payouts under the Plan as a result of extraordinary events and/or conditions that either positively or negatively impact the Company's performance.

Payment of each bonus will be made as soon as practicable after the end of the Performance Period, but in any event will be made no later than March 15, 2017. Bonuses will be paid in cash in a single lump sum, subject to payroll taxes and tax withholding.

OTHER

Each bonus that may become payable under the Plan will be paid solely from the general assets of the Company. Nothing in the Plan should be construed to create a trust or to establish or evidence any participant’s claim of any right to payment of a bonus other than as an unsecured general creditor with respect to any payment to which a participant may be entitled.

No participant will have any claim to a bonus under the Plan, and the Compensation Committee will have no obligation for uniformity of treatment of participants under the Plan. Furthermore, nothing in the Plan will be deemed to limit in any way the Compensation Committee's full discretion to determine whether to grant any bonuses hereunder.

The Compensation Committee reserves the right to unilaterally amend, modify or terminate the Plan at any time, including amending the Plan as it deems necessary or desirable to avoid adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended.

The Plan is subject to the Company's Policy on Reimbursement of Incentive Payments.

EX-10.3

EXHIBIT 10.3

February 4, 2014

Dear James,

Outerwall is pleased to offer you the position of President, Coinstar, reporting directly to Scott Di Valerio, Chief Executive Officer of Outerwall Inc. (“Outerwall”) effective March 11, 2014. This letter will serve to confirm our understanding of your acceptance of this position.

Salary

Effective March 11, 2014, your compensation will be based on an annual salary of $300,000, less all required withholding for taxes and social security. You will be paid bi-weekly (26 times per year).

Bonus Program

You are also eligible to participate in Outerwall's 2014 Incentive Plan for LOB Leaders as administered by the Compensation Committee of the Board of Directors (the “Committee”). As of the effective date of this promotion, your target bonus opportunity will be 50% of eligible earnings. The bonus will be based on company performance and performance goals agreed upon by you and our CEO Scott Di Valerio.

Long-Term Incentive Program

You are eligible to participate in Outerwall’s Long Term Incentive Plan (LTIP). Your LTIP award is also administered by the Committee and the value of the 2014 LTIP will be approximately $300,000. The LTIP award is summarized as follows:

• The LTIP will consist of approximately fifty percent (50%) performance-based restricted stock (PBRS) and fifty percent (50%) time-based restricted stock.

• The number of restricted stock awards will be determined based on the closing price of Outerwall stock (Nasdaq: OUTR) on the date of grant.

• The terms of the 2014 PBRS award will be consistent with those of other senior executives, and it is expected that the Committee will determine the final terms of the 2014 PBRS awards in February of 2014. It is anticipated that the PBRS award will vest over 3 years, with 65% of the award vesting after 2 years and the remaining 35% of the award vesting after three years.

All equity will be subject to the terms of the Company’s 2011 Incentive Plan (“Equity Incentive Plan”) and the respective grant and award agreements. The equity grants are subject to Compensation Committee approval and equity availability.

Benefits

You will continue to be eligible for your current Outerwall benefits.

At-Will Employment

You may terminate your employment with Outerwall at any time and for any reason whatsoever simply by notifying Outerwall. Likewise, Outerwall may terminate your employment at any time and for any reason whatsoever, with or without cause. This at-will employment relationship cannot be changed except in writing signed by Outerwall’s CEO.

Start Date

Your anticipated Start Date is March 11, 2014.

James, if you agree with and accept the terms of this offer of employment, please sign and return one copy of this letter to our office via fax or email by close of business on February 5, 2014. Congratulations on your promotion, we look forward to an exciting future.

Sincerely,

By:	/s/ Raquel Karls
Name:	Raquel Karls
Title:	Chief Human Resources Officer
Accepted by:
By:	/s/ James Gaherity
Name:	James Gaherity
Date:	February 4, 2014

EX-10.4

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

OUTERWALL INC.

and

JAMES GAHERITY

Dated as of March 11, 2014

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), dated as of March 11, 2014, between Outerwall Inc., a Delaware corporation, its subsidiaries and affiliates collectively, (“Employer”), and James Gaherity (“Employee”);

W I T N E S S E T H:

WHEREAS, Employer and Employee wish to document certain understandings and agreements; and

WHEREAS, Employer desires to employ Employee upon the terms and conditions set forth herein; and

WHEREAS, Employee is willing to provide services to Employer upon the terms and conditions set forth herein;

A G R E E M E N T S:

NOW, THEREFORE, for and in consideration of the foregoing premises and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Employer and Employee hereby agree as follows:

1. POSITION

1.1Employment

Employer will employ Employee and Employee will provide services to Employer as the President, Coinstar.

1.2Attention and Effort

Employee will devote all of his productive time, ability, attention and effort to Employer’s business and will skillfully serve its interests during the Term (as defined below).

1.3Term

Employee’s term of employment as President under this Agreement shall begin as of the effective date of this Agreement and shall continue until terminated pursuant to Section 2 of this Agreement (the “Term”).

1.4Compensation

During the Term, Employer agrees to pay or cause to be paid to Employee, and Employee agrees to accept in exchange for the services rendered hereunder by him, the following compensation:

(a) Base Salary

Employee’s compensation as President, Coinstar shall consist, in part, of an annual base salary of Three Hundred Thousand Dollars ($300,000) before all customary payroll deductions. Such annual base salary shall be paid in substantially equal installments and at the same intervals as other officers of Employer are paid. Employee’s salary shall be reviewed by Employer’s Compensation Committee as appropriate to determine in its discretion whether it is appropriate to increase the base salary.

(b) Bonus

Employee shall be eligible for cash bonuses consistent with the existing program for executive officers, provided performance targets applicable to such bonuses are met, and, provided further, any such bonus shall be pro-rated in the event of a termination without Cause.

1.5Benefits

During the Term, Employee will be entitled to participate, subject to and in accordance with applicable eligibility requirements, in fringe benefit programs as shall be provided from time to time by, to the extent required, action of Employer’s Board of Directors.

2. TERMINATION

Employment of Employee pursuant to this Agreement may be terminated as follows, but in any case, the provisions of Section 4 hereof shall survive the termination of this Agreement and the termination of Employee’s employment hereunder:

2.1 By Employer

With or without Cause (as defined below), Employer may terminate the employment of Employee at any time during the term of employment upon giving Notice of Termination (as defined below).

2.2 By Employee

Employee may terminate his employment at any time, for any reason, upon giving Notice of Termination.

2.3 Automatic Termination

This Agreement and Employee’s employment hereunder shall terminate automatically upon the death or total disability of Employee. The term “total disability” as used herein shall mean Employee’s inability to perform the duties set forth in Section 1 hereof for a period or periods aggregating 180 calendar days in any 12‑month period as a result of physical or mental illness, loss of legal capacity or any other cause beyond Employee’s control, unless Employee is granted a leave of absence by the Employer. Employee and Employer hereby acknowledge that Employee’s ability to perform the duties specified in Section 1 hereof is of the essence of this Agreement. Termination hereunder shall be deemed to be effective (a) at the end of the calendar month in which Employee’s death occurs or (b) immediately upon a determination by the Employer of Employee’s total disability, as defined herein.

2.4 Termination in Connection With a Change in Control

Concurrent with the commencement of Employee's employment hereunder, Employee and the Company shall enter into a Change of Control Agreement, in the form attached hereto as Exhibit A. Notwithstanding Sections 3.1 and 3.2 of this Agreement and in full substitution therefor, if Employee’s employment terminates under circumstances described in the Change of Control Agreement, Employee’s rights upon termination will be governed by the terms of the Change of Control Agreement and his right to termination payments under this Agreement shall cease.

2.5 Notice

The term “Notice of Termination” shall mean at least 30 days’ written notice of termination of Employee’s employment, during which period Employee’s employment and performance of services will continue; provided, however, that Employer may, upon notice to Employee and without reducing Employee’s compensation during such period, excuse Employee from any or all of his duties during such period. The effective date of the termination of Employee’s employment hereunder shall be the date on which such 30‑day period expires.

3.TERMINATION PAYMENTS

In the event of termination of the employment of Employee during the Term, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 3:

3.1 Termination by Employer

Subject to Section 3.5 hereof, if Employer terminates Employee’s employment without Cause during the Term, Employee shall be entitled to receive (a) a termination payment equal to twelve (12) months’ annual base salary, (b) any unpaid annual base salary which has accrued for services already performed as of the date termination of Employee’s employment becomes effective, (c) a pro-rated cash bonus consistent with Section 1.4(b) determined at Employee’s target bonus opportunity for the year in which Employee’s employment terminates, and (d) an amount equal to twelve (12) months’ of COBRA premiums at the rate in effect on the date Employee’s employment terminates for the coverage in effect for Employee and Employee’s spouse and dependent children on such date under the Employer’s group health plans. All amounts payable pursuant to this Section 3.1 (or pursuant to Section 3.2) shall be reduced for applicable deductions and tax withholding. If Employee is terminated by Employer for Cause during the Term, Employee shall not be entitled to receive any of the foregoing benefits, other than those set forth in Section 3.1(b) above.

3.2 Termination by Employee

In the case of the termination of Employee’s employment by Employee, Employee shall not be entitled to any payments hereunder, other than those set forth in Section 3.1(b) hereof if such termination occurs during the Term.

3.3 Payment Schedule

All amounts payable pursuant to Section 3.1(b) and 3.2 hereof shall be paid to Employee at the same time such amounts would have been paid to Employee had Employee’s employment not been terminated (or at such earlier time as is required by law). All amounts payable pursuant to Sections 3.1(a), (c) and (d) hereof shall be paid to Employee in a lump sum within ten (10) business days after the release referred to in Section 3.5 hereof becomes effective; provided, however, that in no event shall such payment be made later than March 15 of the calendar year following the calendar year in which Employee’s employment terminates.

3.4 Cause

Wherever reference is made in this Agreement to termination being with or without Cause, “Cause” is limited to the occurrence of one or more of the following events:

(a)    Failure or refusal to carry out the lawful duties of Employee described in Section 1 hereof or any directions of the Board of Directors of Employer, which directions are reasonably consistent with the duties herein set forth to be performed by Employee;

(b)    Violation by Employee of a state or federal criminal law involving the commission of a crime against Employer or a felony;

(c)    Current use by Employee of illegal substances; deception, fraud, misrepresentation or dishonesty by Employee; any act or omission by Employee which substantially impairs Employer’s business, good will or reputation; or

(d)    Any other material violation of any provision of this Agreement.

3.5 Release

Employee’s entitlement to any benefits pursuant to Sections 3.1(a), (c) and (d) hereof is conditioned on Employee’s execution (and non-revocation) of a release of claims in a form satisfactory to the Employer, which release must become effective by the sixtieth (60th) day following the date on which Employee’s employment terminates or such earlier date as is specified in such release. The Employer shall provide Employee with the form of release no later than the seventh (7th) day following the date on which Employee’s employment terminates.

3.6 Code Section 409A

The parties intend that this Agreement and the payments and benefits provided hereunder, including, without limitation, those provided pursuant to Section 3.1 hereof, be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treas. Reg. Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treas. Reg. Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to this Agreement, the parties intend that this Agreement and any payments and benefits thereunder comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding anything herein to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intentions; provided, however that in no event shall Employer or its agents, parents, subsidiaries, affiliates or successors be liable for any additional tax, interest or penalty that may be imposed on Employee pursuant to Code Section 409A or for any damages incurred by Employee as a result of this Agreement (or the payments or benefits hereunder) failing to comply with, or be exempt from, Code Section 409A. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary:

(a)    to the extent Code Section 409A is applicable to this Agreement, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service,” as defined in Treas. Reg. Section 1.409A-1(h), after giving effect to the presumptions contained therein (and without regard to the optional

alternative definitions available therein), and, for purposes of any such provision of this Agreement, references to “terminate,” “termination,” “termination of employment” and like terms shall mean separation from service;

(b)    if at the time Employee’s employment hereunder terminates, Employee is a “specified employee” within the meaning of Code Section 409A, then to the extent necessary to avoid subjecting Employee to the imposition of any additional tax or interest under Code Section 409A, amounts that would (but for this provision) be payable within six (6) months following the date of Employee’s termination of employment shall not be paid to Employee during such period, but shall instead be paid in a lump sum on the first business day of the seventh month following the date on which Employee's employment terminates or, if earlier, upon Employee’s death;

(c)    each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments; and

(d)    nothing herein shall act to accelerate any payment to which Employee would otherwise be entitled if such acceleration would subject Employee to an additional tax or penalty under Code Section 409A.

4. NONCOMPETITION, NONDISCLOSURE AND NONDISPARAGEMENT

(a)    The nature of Employee’s employment with Employer has given Employee access to trade secrets and confidential information, including information about its technology and customers. Therefore, during the one (1) year following termination of employment for whatever reason, Employee will not engage in, be employed by, perform services for, participate in the ownership, management, control or operation of, or otherwise be connected with, either directly or indirectly, any business or activity whose efforts are in competition with (i) the products or services manufactured or marketed by Employer at the time of this Agreement, or (ii) the products or services which have been under research or development by Employer during the term of Employee’s employment, and which Employer has demonstrably considered for further development or commercialization. The geographic scope of this restriction shall extend to anywhere Employer is doing business, has done business or intends to do business. Employee acknowledges that the restrictions are reasonable and necessary for protection of the business and goodwill of Employer.

(b)    Employee further agrees that she will not at any time disclose confidential information about Employer relating to its business, technology, practices, products, marketing, sales, services, finances or legal affairs.

(c)    Following termination of Employee’s employment for any reason, Employee and Employer shall refrain from making any derogatory comment in the future to the press or any individual or entity regarding the other that relates to their activities or relationship prior to the date of termination, which comment would likely cause material damage or harm to the business interests or reputation of Employee or Employer. Employee acknowledges that the non-disparagement provisions of this Section 4(c) are essential to Employer, that Employer would not enter into this Agreement if it did not include this Section 4(c), and that damages sustained by Employer as a result of a breach of this Section 4(c) cannot be adequately quantified or remedied by damages alone. Accordingly, Employer shall be entitled to injunctive and other equitable relief to prevent or curtail any breach of this Section 4(c).

(d)    If Employee violates any provision of this Section 4, Employee shall repay all amounts received by Employee pursuant to Sections 3.1(a), (c) and (d) hereof. In the event any such violation occurs prior to the payment of such amounts, Employee shall cease to be entitled to any payment pursuant to such Sections.

5. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE

Employee represents and warrants that neither the execution nor the performance of this Agreement nor the execution or performance of the Proprietary Information and Invention Agreement by Employee will violate or conflict in any way with any other agreement by which Employee may be bound, or with any other duties imposed upon Employee by corporate or other statutory or common law.

6. FORM OF NOTICE

All notices given hereunder shall be given in writing, shall specifically refer to this Agreement and shall be personally delivered or sent by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms hereof:

If to Employee:    

If to Employer:	Outerwall Inc.
	1800 114th Avenue SE
	Bellevue, WA 98004
	Attn:    Chairman of the Board of Directors
	cc:     Chief Legal Officer and General Counsel

Copy to:	Perkins Coie LLP
	Attn: Lynn E. Hvalsoe
	1201 Third Ave., 49th Floor
	Seattle, WA 98101-3099

If notice is mailed, such notice shall be effective upon mailing, or if notice is personally delivered, it shall be effective upon receipt.

7. ASSIGNMENT

This Agreement is personal to Employee and shall not be assignable by Employee. Employer may assign its rights hereunder to (a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Employer is a party or (b) any corporation, partnership, association or other person to which Employer may transfer all or substantially all of the assets and business of Employer existing at such time. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

8. WAIVERS

No delay or failure by any party hereto in exercising, protecting or enforcing any of its rights, titles, interests or remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest or remedy in a particular instance or circumstance shall not constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies.

9. ARBITRATION

Any controversies or claims arising out of or relating to this Agreement shall be fully and finally settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect (the “AAA Rules”), conducted by one arbitrator either mutually agreed upon by Employer and Employee or chosen in accordance with the AAA Rules, except that the parties thereto shall have any right to discovery as would be permitted by the Federal Rules of Civil Procedure for a period of 90 days following the commencement of such arbitration and the arbitrator thereof shall resolve any dispute which arises in connection with such discovery. The prevailing party shall be entitled to costs, expenses and reasonable attorneys’ fees, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This provision shall not preclude Employer from seeking court enforcement or relief based upon an alleged violation of Employee’s obligations under any noncompetition or non-disclosure agreement.

10. AVAILABILITY AND CONSULTATION

If Employee’s employment with Employer terminates for any reason, Employee will thereafter be reasonably available to Employer and counsel for Employer for the purpose of enabling Employer to defend against any legal claims in which Employer determines she may have knowledge or information. Employer will reimburse Employee for reasonable out-of-pocket expenses incurred in connection with any consultations under this Section 10.

11. AMENDMENTS IN WRITING

No amendment, modification, waiver, termination or discharge of any provision of this Agreement, nor consent to any departure therefrom by either party hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed

by Employer and Employee, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by Employer and Employee.

12. APPLICABLE LAW

This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in accordance with, the laws of the state of Washington, without regard to any rules governing conflicts of laws.

13. SEVERABILITY

If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, then, to the full extent permitted by law (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision hereof, and (c) any court or arbitrator having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law.

14. HEADINGS

All headings used herein are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement.

15. COUNTERPARTS

This Agreement, and any amendment or modification entered into pursuant to Section 11 hereof, may be executed in any number of counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same instrument.

16. ENTIRE AGREEMENT

Except for the Proprietary Information and Invention Agreement executed by Employee on March 26, 2004, and the Change of Control Agreement executed on March 11, 2014, this Agreement sets forth the entire understanding between Employee and Employer, superseding any prior agreements or understandings, express or implied, pertaining to the terms of Employee’s employment with Employer. Employee acknowledges that in executing this Agreement, she does not rely upon any representation or statement by any representative or agent of Employer concerning the subject matter of this Agreement.

IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth above.

OUTERWALL INC.
By:	/s/ Raquel Karls
	Raquel Karls
Its	Chief Human Resources Officer
EMPLOYEE
	/s/ James Gaherity
	James Gaherity

EXHIBIT A

Change of Control Agreement

EX-10.5

EXHIBIT 10.5

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (this "Agreement"), dated as of March 11, 2014 is between Outerwall Inc. and its subsidiaries and affiliates (collectively the "Employer"), and James Gaherity (the "Employee").

The Compensation Committee (the “Committee”) of the Board of Directors (the "Board") of the Employer has determined that it is in the best interests of the Employer and its stockholders to ensure that the Employer will have the continued dedication of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Appendix A to this Agreement, which is incorporated herein by this reference) of the Employer. The Committee believes it is imperative to diminish the inevitable distraction of the Employee arising from the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage the Employee's full attention and dedication to the Employer currently and in the event of any threatened or pending Change of Control, to encourage the Employee's willingness to serve a successor in an equivalent capacity, and to provide the Employee with reasonable compensation and benefits arrangements in the event that a Change of Control results in the Employee's loss of equivalent employment.

In order to accomplish these objectives, the Committee has caused the Employer to enter into this Agreement.

1. EMPLOYMENT

1.1 Certain Definitions

(a) "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1.1(b)) on which a Change of Control occurs.

(b) "Change of Control Period" shall mean the period commencing on the date of this Agreement and ending on the second anniversary of the date the Employer gives notice to the Employee that the Change of Control Period shall be terminated.

1.2 Employment Period

The Employer hereby agrees to continue the Employee in its employ or in the employ of its affiliated companies, and the Employee hereby agrees to remain in the employ of the Employer or its affiliated companies, in accordance with the terms and provisions of this Agreement, for the period commencing on the Effective Date and ending two years after such date. (the "Employment Period").

1.3 Duties, Authority, and Responsibility

During the Employment Period, the Employee's duties, authority and responsibilities shall be at least reasonably commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90‑day period immediately preceding the Effective Date.

1.4 Employment Status

If prior to the Effective Date the Employee's employment with the Employer or its affiliated companies terminates, then the Employee shall have no further rights under this Agreement.

2. ATTENTION AND EFFORT

During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee will devote all of his professional productive time, ability, attention and effort to the business and affairs of the Employer and the discharge of the responsibilities assigned to him hereunder, and will use his best efforts to perform faithfully and efficiently such responsibilities.

3. COMPENSATION

During the Employment Period, the Employer agrees to pay or cause to be paid to the Employee, and the Employee agrees to accept in exchange for the services rendered hereunder by him, the following compensation:

3.1 Salary

The Employee shall receive an annual base salary (the "Annual Base Salary"), at least equal to the annual salary established by the Board prior to the Effective Date for the fiscal year in which the Effective Date occurs. The Annual Base Salary shall be paid in substantially equal installments and at the same intervals as the salaries of other officers of the Employer are paid.

3.2 Bonus

Employee may be entitled to receive, in addition to the Annual Base Salary, an annual bonus in an amount to be determined by the Board of Directors of the Employer in its sole discretion.

3.3 Benefits

During the Employment Period, the Employee shall be entitled to participate, subject to and in accordance with applicable eligibility requirements, in such fringe benefit programs as shall be provided to other executive employees of the Employer and its affiliated companies from time to time during the Employment Period by action of the Board (or any person or committee appointed by the Board to determine fringe benefit programs and other emoluments).

3.4 Expenses

During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the policies, practices and procedures of the Employer and its affiliated companies in effect for the employees of the Employer and its affiliated companies during the Employment Period or pursuant to an applicable travel policy.

4. TERMINATION

Employment of the Employee during the Employment Period may be terminated as follows:

4.1 By the Employer or the Employee

Upon giving Notice of Termination (as defined below), the Employer may terminate the employment of the Employee with or without Cause (as defined below), and the Employee may terminate his employment for Good Reason (as defined below) or for any reason, at any time during the Employment Period.

4.2 Automatic Termination

This Agreement and the Employee's employment during the Employment Period shall terminate automatically upon the death or total disability of the Employee. The Employee and the Employer hereby acknowledge that the Employee's presence and ability to perform the duties specified in Section 1.3 hereof is of the essence of this Agreement.

4.3 Notice of Termination

Any termination by the Employer or by the Employee during the Employment Period shall be communicated by Notice of Termination to the other party given within 30 days. The term "Notice of Termination" shall mean a written notice which (a) indicates the specific termination provision in this Agreement relied upon and (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment under the provision so indicated. The failure by the Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Employer hereunder or preclude the Employer from asserting such fact or circumstance in enforcing the Employer's rights hereunder.

4.4 Date of Termination

During the Employment Period, "Date of Termination" means (a) if the Employee's employment is terminated by reason of death, at the end of the calendar month in which the Employee's death occurs, and (b) in all other cases, the later of (i) five days after the date of personal delivery of or mailing of, as applicable, the Notice of Termination, and (ii) the date on which the Employee separates from service, within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the "Code"). The Employee's employment and performance of services will continue during such five-day period; provided, however, that the Employer may, upon notice to the Employee and without reducing the Employee's compensation during such period, excuse the Employee from any or all of his duties during such period.

5. TERMINATION PAYMENTS

In the event of termination of the Employee's employment during the Employment Period, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 5.

5.1 Termination by the Employer for Other Than Cause or by the Employee for Good Reason

If the Employer terminates the Employee's employment other than for Cause or the Employee terminates his employment for Good Reason prior to the end of the Employment Period, the Employee shall be entitled to:

(a) Receive payment of the following accrued obligations (the "Accrued Obligations"):

(i) the Employee's Annual Base Salary through the Date of Termination to the extent not theretofore paid;

(ii) the product of (x) the Annual Bonus payable with respect to the fiscal year in which the Date of Termination occurs and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365; and

(iii) any compensation previously deferred by the Employee (together with accrued interest or earnings thereon, if any) as such deferred compensation becomes payable under the deferral plan, and any accrued vacation pay, in each case to the extent not theretofore paid; and

(b) An amount as separation pay equal to the Employee's Annual Base Salary.

(c) If, as a result of the termination of the Employee’s employment, the Employee and the Employee’s spouse and dependent children are eligible for and timely (and properly) elect to continue coverage under the Employers’ group health plans(s) in accordance with Code Section 4980B(f) (“COBRA”), the Employer shall pay the premium for such coverage for a period of twelve (12) months following the Date of Termination or until the Employee is no longer entitled to COBRA continuation coverage under the Employer’s group health plan(s), whichever period if shorter.

5.2 Termination for Cause or Other Than for Good Reason

If the Employee's employment shall be terminated by the Employer for Cause or by the Employee for other than Good Reason during the Employment Period, this Agreement shall terminate without further obligation to the Employee other than the obligation to pay to the Employee his Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (as such deferred compensation becomes payable under the deferral plan), in each case to the extent theretofore unpaid.

5.3 Termination Because of Death or Total Disability

If the Employee's employment is terminated by reason of the Employee's death or total disability during the Employment Period, this Agreement shall terminate automatically without further obligations to the Employee or his legal representatives under this Agreement, other than for payment of Accrued Obligations (which shall be paid to the Employee's estate or beneficiary, as applicable in the case of the Employee's death).

5.4 Payment Schedule

Payments under Section 5.1(a), 5.2 and 5.3 (other than payments of deferred compensation, which shall be paid in accordance with the provisions of the plan under which such compensation was deferred) shall be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination. Payments under Section 5.1(b) shall be paid to Employee in twelve (12) equal monthly installments, beginning with the month following the month containing the Date of Termination and continuing for eleven (11) consecutive months thereafter. For purposes of Code Section 409A, each installment payable pursuant to Section 5.1(b) and this Section 5.4 shall be treated as a separate payment.

5.5 Good Reason

(a) For purposes of this Agreement, subject to Section 5.5(b), "Good Reason" means the occurrence of any of the following events or conditions without the Employee's express written consent:

(i) A diminution in the Employee's Annual Base Salary;

(ii) A diminution in the Employee's authority, duties or responsibilities as contemplated by Section 1.3 hereof, excluding for this purpose reasonable changes in particular duties and reporting responsibilities which may result from the Employer becoming part of a larger business organization at some future time provided that such changes in the aggregate do not result in a material alteration in the Employee's authority, duties or responsibilities;

(iii) A relocation of the Employee's principal place of employment to a location more than 50 miles from the Chicago metropolitan area, except for required travel on the Employer's business to an extent substantially consistent with the Employee's duties and responsibilities; or

(iv) Any other action or inaction by the Employer that constitutes a material breach by the Employer of this Agreement.

(b) Notwithstanding any provision in this Agreement to the contrary, termination of employment by the Employee will not be for Good Reason unless (i) the Employee notifies the Employer in writing of the occurrence or existence of the event or condition which the Employee believes constitutes Good Reason within 90 days of the occurrence or initial existence of such event or condition (which notice specifically identifies such event or condition), (ii) the Employer fails to remedy such event or condition within 30 days after the date on which it receives such notice (the "Remedial Period"), and (iii) the Employee actually terminates employment within 90 days after the expiration of the Remedial Period and before the Employer remedies such event or condition. If the Employee terminates employment before the expiration of the Remedial Period or after the Employer remedies the event or condition (even if after the end of the Remedial Period), then the Employee's termination will not be considered to be for Good Reason.

5.6 Cause

For purposes of this Agreement, “Cause” means the occurrence of one or more of the following events:

(a) Failure or refusal to carry out the lawful duties of the Employee or any directions of the Board which are consistent with the duties to be performed by the Employee;

(b) Violation by the Employee of a state or federal criminal law involving the commission of a crime against the Employer or a felony;

(c) Current use by the Employee of illegal substances; deception, fraud, misrepresentation or dishonesty by the Employee; any act or omission by the Employee which substantially impairs the Employer’s business, good will or reputation; or

(d) Any material violation of the confidentiality, non-competition and/or non-solicitation provisions to which the Employee is bound.

6.REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS

In order to induce the Employer to enter into this Agreement, the Employee represents and warrants to the Employer as follows:

6.1    No Violation of Other Agreements

The Employee represents that neither the execution nor the performance of this Agreement by the Employee will violate or conflict in any way with any other agreement by which the Employee may be bound.

6.2Reaffirmation of Obligations

The Employee hereby acknowledges and reaffirms the Employee Proprietary Information and Inventions Agreement previously executed by Employee.

6.3Prior Agreements

The Employee hereby acknowledges that as of the date of this Agreement, this Agreement sets forth the entire understanding between the Employee and the Employer regarding the subject matter herein and supersedes all prior oral or written agreements on the subject.

7.CODE SECTION 409A

The Employer makes no representations or warranties to Employee with respect to any tax, economic or legal consequences of this Agreement or any payments or other benefits provided hereunder, including without limitation under Code Section 409A, and no provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with Code Section 409A or any other legal requirement from Employee or any other person to the Employer, any of its affiliates or any other person. The Employee, by executing this Agreement, shall be deemed to have waived any claim against the Employer, its affiliates and any other person with respect to any such tax, economic or legal consequences. However, the parties intend that this Agreement and the payments and other benefits provided hereunder shall be exempt from the requirements of Code Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A‑1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A‑1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to this Agreement (and such payments and benefits), the parties intend that this Agreement (and such payments and benefits) shall comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary, with respect to any payments and benefits under this Agreement to which Code Section 409A applies, all references in this Agreement to termination of Employee's employment are intended to mean Employee's "separation from service," within the meaning of Code Section 409A(a)(2)(A)(i). In addition, if the Employee is a "specified employee," within the meaning of Code Section 409A(a)(2)(B)(i), when the Employee separates from service, within the meaning of Code Section 409A(a)(2)(A)(i), then to the extent necessary to avoid subjecting Employee to the imposition of any additional tax under Code Section 409A, amounts that would otherwise be payable under this Agreement during the six-month period immediately following Employee's separation from service shall not be paid to Employee during such period, but shall instead be accumulated and paid to Employee (or, in the event of Employee's death, Employee's estate) in a lump sum on the first business day following the earlier of (a) the date that is six months after Employee's separation from service or (b) Employee's death.

IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth above.

OUTERWALL INC.
By:	/s/ Raquel Karls
	Raquel Karls
Its	Chief Human Resources Officer
EMPLOYEE
	/s/ James Gaherity
	James Gaherity

APPENDIX A TO

CHANGE OF CONTROL AGREEMENT

For purposes of this Agreement, a "Change of Control" shall mean:

(a)    A "Board Change" which, for purposes of this Agreement, shall have occurred if individuals who, as of the date of this Agreement, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Employer's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person (as hereinafter defined) other than the Board; or

(b)    The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of (i) 20% or more of either (A) the then outstanding shares of Common Stock of the Employer (the "Outstanding Employer Common Stock") or (B) the combined voting power of the then outstanding voting securities of the Employer entitled to vote generally in the election of directors (the "Outstanding Employer Voting Securities"), in the case of either (A) or (B) of this clause (i), which acquisition is not approved in advance by a majority of the Incumbent Directors, or (ii) 33% or more of either (A) the Outstanding Employer Common Stock or (B) the Outstanding Employer Voting Securities, in the case of either (A) or (B) of this clause (ii), which acquisition is approved in advance by a majority of the Incumbent Directors; provided, however, that the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Employer or in connection with an offering of the Employer pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission, (x) any acquisition by the Employer, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Employer or any corporation controlled by the Employer or (z) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this Appendix A are satisfied; or

(c)    Consummation of a reorganization, merger or consolidation approved by the stockholders of the Employer, in each case, unless, immediately following such reorganization, merger or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial owners, respectively, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportion as their ownership immediately prior to such reorganization, merger or consolidation of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities, as the case may be, (ii) no Person (excluding the Employer, any employee benefit plan (or related trust) of the Employer or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 33% or more of the Outstanding Employer Common Stock or the Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

(d)    Consummation of the following events approved by the stockholders of the Employer (i) a complete liquidation or dissolution of the Employer or (ii) the sale or other disposition of all or substantially all the assets of the Employer, other than to a corporation with respect to which immediately following such sale or other disposition, (A) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial owners, respectively, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities, as the case may be, (B) no Person (excluding the Employer, any employee benefit plan (or related trust) of the Employer or such corporation and

any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 33% or more of the Outstanding Employer Common Stock or the Outstanding Employer Voting Securities, as the case may be) beneficially owns, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were approved by a majority of the members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Employer.

Notwithstanding the foregoing, there shall not be a Change of Control if, in advance of such event, the Employee agrees in writing that such event shall not constitute a Change of Control.

EX-10.6

EXHIBIT 10.6

November 7, 2015

Dear Dave,

ecoATM, Inc. is pleased to offer you the position of President, ecoATM, reporting directly to Erik Prusch, Chief Executive Officer of Outerwall Inc. (“Outerwall”) effective November 23, 2015. This letter will serve to confirm our understanding of your acceptance of this position. Please note that all offers of employment are contingent upon successful completion of a pre-employment background check.

Salary

Your compensation will be based on an annual salary of $400,000, less all required withholding for taxes and social security. You will be paid bi-weekly (26 times per year). This position is exempt and is therefore not eligible for overtime.

Bonus Program

You will be eligible to participate in Outerwall's 2016 Incentive Compensation Plan for Executive Leaders (“the 2016 Incentive Plan”) as administered by the Compensation Committee of the Board of Directors (the “Committee”). Your annual bonus opportunity for 2016 will be 60% of the actual base salary that you earn during the calendar year. The allocation and other terms of your short-term incentive compensation will be guided by the 2016 Incentive Plan. Due to your start date, you will not participate in an annual incentive plan for 2015.

Long-Term Incentive Program

You are eligible to participate in Outerwall’s Long Term Incentive Plan (LTIP) and your LTIP award is also administered by the Committee. Provided that you accept this position, you will be eligible for an equity grant of time-based restricted stock with an approximate value of $500,000, which will vest over 4 years at the rate of 25% on each anniversary of the date of grant.

You will also be eligible for a grant of performance-based restricted stock (PBRS) with an approximate value of $275,000 in February of 2016. The measures, targets and vesting terms of the 2016 PBRS award will be determined in February of 2016.

The number of restricted stock awards will be determined based on the closing price of Outerwall stock (Nasdaq: OUTR) on the date of grant. All equity will be subject to the terms of the Company’s 2011 Incentive Plan (“Equity Incentive Plan”) and the respective grant and award agreements.

Sign On Bonus

As part of your new hire package, you will be provided with a sign on bonus of $225,000 to be paid as soon as administratively feasible following your first day of employment. The sign on bonus will be subject to repayment should you voluntarily terminate your employment within the first 2 years following your start date.

Benefits

In order to remain competitive, the benefits plans and programs may change from time to time. The following is a partial list of the benefits offered:

• Comprehensive medical, dental and vision benefits

• 401(k) Plan with a company match equal to 100% of the first 3% of your deferrals and 50% on each of the next 2%; the company match vests immediately

• Company-paid long-term and short-term disability

• Company Life and Accidental Death & Dismemberment Insurance (1 times annual salary up to $200,000 of coverage)

• Flexible Spending Plan(s) for healthcare and day care

• Wellness Reimbursement Program

• Concierge Service

• Great supplemental benefits

You will be eligible for most benefits coverage the 1st of the month following one full month of service. You will receive additional information in your Benefits Enrollment Packet which will be sent to your home address prior to your benefits eligibility date.

At-Will Employment

You may terminate your employment with ecoATM at any time and for any reason whatsoever simply by notifying ecoATM. Likewise, ecoATM may terminate your employment at any time and for any reason whatsoever, with or without cause. This at-will employment relationship cannot be changed except in writing signed by Outerwall’s CEO.

Start Date

Your anticipated Start Date is November 23, 2015.

Dave, if you agree with and accept the terms of this offer of employment, please sign and return one copy of this letter to me and our Chief Legal Officer & General Counsel via fax or email by November 10, 2015. Congratulations, we look forward to an exciting future.

Sincerely,

By:	/s/ Raquel Karls
Name:	Raquel Karls
Title:	Chief Human Resources Officer
Accepted by:
By:	/s/ David D. Maquera
Name:	David D. Maquera
Date:	November 8, 2015

EX-10.7

EXHIBIT 10.7

EMPLOYMENT AGREEMENT

ECOATM, INC.

and

DAVID D. MAQUERA

Dated as of NOVEMBER 23, 2015

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), dated as of NOVEMBER 23, 2015, between ecoATM, Inc., a Delaware corporation, its subsidiaries and affiliates collectively, (“Employer”), and David D. Maquera (“Employee”);

W I T N E S S E T H:

WHEREAS, Employer and Employee wish to document certain understandings and agreements; and

WHEREAS, Employer desires to employ Employee upon the terms and conditions set forth herein; and

WHEREAS, Employee is willing to provide services to Employer upon the terms and conditions set forth herein;

A G R E E M E N T S:

NOW, THEREFORE, for and in consideration of the foregoing premises and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Employer and Employee hereby agree as follows:

1. POSITION

1.1Employment

Employer will employ Employee and Employee will provide services to Employer as the President of ecoATM, Inc.

1.2Attention and Effort

Employee will devote all of his productive time, ability, attention and effort to Employer’s business and will skillfully serve its interests during the Term (as defined below).

1.3Term

Employee’s term of employment as President under this Agreement shall begin as of the effective date of this Agreement and shall continue until terminated pursuant to Section 2 of this Agreement (the “Term”).

1.4Compensation

During the Term, Employer agrees to pay or cause to be paid to Employee, and Employee agrees to accept in exchange for the services rendered hereunder by him, the following compensation:

(a) Base Salary

Employee’s compensation as President of ecoATM, Inc. shall consist, in part, of an annual base salary of Four Hundred Thousand Dollars ($400,000) before all customary payroll deductions. Such annual base salary shall be paid in substantially equal installments and at the same intervals as other officers of Employer are paid. Employee’s salary shall be reviewed by Employer’s Compensation Committee as appropriate to determine in its discretion whether it is appropriate to increase the base salary.

(b) Bonus

Employee shall be eligible for cash bonuses consistent with the existing program for executive officers, provided performance targets applicable to such bonuses are met, and, provided further, any such bonus shall be pro-rated in the event of a termination without Cause.

1.5Benefits

During the Term, Employee will be entitled to participate, subject to and in accordance with applicable eligibility requirements, in fringe benefit programs as shall be provided from time to time by, to the extent required, action of Employer’s Board of Directors.

2. TERMINATION

Employment of Employee pursuant to this Agreement may be terminated as follows, but in any case, the provisions of Section 4 hereof shall survive the termination of this Agreement and the termination of Employee’s employment hereunder:

2.1 By Employer

With or without Cause (as defined below), Employer may terminate the employment of Employee at any time during the Term upon giving Notice of Termination (as defined below).

2.2 By Employee

Employee may terminate his employment at any time, for any reason, upon giving Notice of Termination.

2.3 Automatic Termination

This Agreement and Employee’s employment hereunder shall terminate automatically upon the death or total disability of Employee. The term “total disability” as used herein shall mean Employee’s inability to perform the duties set forth in Section 1 hereof for a period or periods aggregating 180 calendar days in any 12‑month period as a result of physical or mental illness, loss of legal capacity or any other cause beyond Employee’s control, unless Employee is granted a leave of absence by the Employer. Employee and Employer hereby acknowledge that Employee’s ability to perform the duties specified in Section 1 hereof is of the essence of this Agreement. Termination hereunder shall be deemed to be effective (a) at the end of the calendar month in which Employee’s death occurs or (b) immediately upon a determination by the Employer of Employee’s total disability, as defined herein.

2.4 Termination in Connection With a Change in Control

Concurrent with the commencement of Employee's employment hereunder, Employee and the Company shall enter into a Change of Control Agreement, in the form attached hereto as Exhibit A. Notwithstanding Sections 3.1 and 3.2 of this Agreement and in full substitution therefor, if Employee’s employment terminates under circumstances described in the Change of Control Agreement, Employee’s rights upon termination will be governed by the terms of the Change of Control Agreement and his right to termination payments under this Agreement shall cease.

2.5 Notice

The term “Notice of Termination” shall mean at least 30 days’ written notice of termination of Employee’s employment, during which period Employee’s employment and performance of services will continue; provided, however, that Employer may, upon notice to Employee and without reducing Employee’s compensation during such period, excuse Employee from any or all of his duties during such period. The effective date of the termination of Employee’s employment hereunder shall be the date on which such 30‑day period expires.

3.TERMINATION PAYMENTS

In the event of termination of the employment of Employee during the Term, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 3:

3.1 Termination by Employer

Subject to Section 3.5 hereof, if Employer terminates Employee’s employment without Cause during the Term, Employee shall be entitled to receive (a) a termination payment equal to twelve (12) months’ annual base salary, (b) any unpaid annual base salary which has accrued for services already performed as of the date termination of Employee’s employment becomes effective, (c) a pro-rated cash bonus consistent with Section 1.4(b) determined at Employee’s target bonus opportunity for the year in which Employee’s employment terminates, and (d) an amount equal to twelve (12) months’ of COBRA premiums at the rate in effect on the date Employee’s employment terminates for the coverage in effect for Employee and, if applicable, Employee’s spouse and dependent children on such date under Employer’s group health plans; provided, however, that Employer may unilaterally amend clause (d) or eliminate the benefit provided thereunder to the extent it deems necessary to avoid the imposition of excise taxes, penalties or similar charges on Employer, including, without limitation, under Section 4980D of the Internal Revenue Code of 1986, as amended (the “Code”). All amounts payable pursuant to this Section 3.1 (or pursuant to Section 3.2) shall be reduced for applicable deductions and tax withholding. If Employee is terminated by

Employer for Cause during the Term, Employee shall not be entitled to receive any of the foregoing benefits, other than those set forth in Section 3.1(b) above.

3.2 Termination by Employee

In the case of the termination of Employee’s employment by Employee, Employee shall not be entitled to any payments hereunder, other than those set forth in Section 3.1(b) hereof if such termination occurs during the Term.

3.3 Payment Schedule

All amounts payable pursuant to Sections 3.1(b) and 3.2 hereof shall be paid to Employee at the same time such amounts would have been paid to Employee had Employee’s employment not been terminated (or at such earlier time as is required by law). All amounts payable pursuant to Sections 3.1(a), (c) and (d) hereof shall be paid to Employee in a lump sum within ten (10) business days after the release referred to in Section 3.5 hereof becomes effective; provided, however, that in no event shall such payment be made later than March 15 of the calendar year following the calendar year in which Employee’s employment terminates.

3.4 Cause

Wherever reference is made in this Agreement to termination being with or without Cause, “Cause” is limited to the occurrence of one or more of the following events:

(a)    Failure or refusal to carry out the lawful duties of Employee described in Section 1 hereof or any directions of the Board of Directors of Employer, which directions are reasonably consistent with the duties herein set forth to be performed by Employee;

(b)    Violation by Employee of a state or federal criminal law involving the commission of a crime against Employer or a felony;

(c)    Current use by Employee of illegal substances; deception, fraud, misrepresentation or dishonesty by Employee; any act or omission by Employee which substantially impairs Employer’s business, good will or reputation; or

(d)    Any other material violation of any provision of this Agreement.

3.5 Release

Employee’s entitlement to any benefits pursuant to Sections 3.1(a), (c) and (d) hereof is conditioned on Employee’s execution (and non-revocation) of a release of claims in a form satisfactory to the Employer, which release must become effective (i.e., Employee must have executed the release and any revocation period must have expired without Employee revoking the release) by the sixtieth (60th) day following the date on which Employee’s employment terminates or such earlier date as is specified in such release. The Employer shall provide Employee with the form of release no later than the seventh (7th) day following the date on which Employee’s employment terminates.

3.6 Code Section 409A

The parties intend that this Agreement and the payments and benefits provided hereunder, including, without limitation, those provided pursuant to Section 3.1 hereof, be exempt from the requirements of Code Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treas. Reg. Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treas. Reg. Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to this Agreement, the parties intend that this Agreement and any payments and benefits thereunder comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding anything herein to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intentions; provided, however that in no event shall Employer or its agents, parents, subsidiaries, affiliates or successors be liable for any additional tax, interest or penalty that may be imposed on Employee pursuant to Code Section 409A or for any damages incurred by Employee as a result of this Agreement (or the payments or benefits hereunder) failing to comply with, or be exempt from, Code Section 409A. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary:

(a)    to the extent Code Section 409A is applicable to this Agreement, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service,” as defined in Treas. Reg. Section 1.409A-1(h), after giving effect to the presumptions contained therein (and without regard to the optional alternative definitions available therein), and, for purposes of any such provision of this Agreement, references to “terminate,” “termination,” “termination of employment” and like terms shall mean separation from service;

(b)    if at the time Employee’s employment hereunder terminates, Employee is a “specified employee” within the meaning of Code Section 409A, then to the extent necessary to avoid subjecting Employee to the imposition of any additional tax or interest under Code Section 409A, amounts that would (but for this provision) be payable within six (6) months following the date of Employee’s termination of employment shall not be paid to Employee during such period, but shall instead be paid in a lump sum on the first business day of the seventh (7th) month following the date on which Employee's employment terminates or, if earlier, upon Employee’s death;

(c)    each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate and distinct payments; and

(d)    nothing herein shall act to accelerate any payment to which Employee would otherwise be entitled if such acceleration would subject Employee to an additional tax or penalty under Code Section 409A.

4. NONCOMPETITION, NONDISCLOSURE AND NONDISPARAGEMENT

(a)    The nature of Employee’s employment with Employer has given Employee access to trade secrets and confidential information, including information about its technology and customers. Therefore, during the one (1) year following termination of employment for whatever reason, Employee will not engage in, be employed by, perform services for, participate in the ownership, management, control or operation of, or otherwise be connected with, either directly or indirectly, any business or activity whose efforts are in competition with (i) the products or services manufactured or marketed by Employer at the time of this Agreement, or (ii) the products or services which have been under research or development by Employer during the Term, and which Employer has demonstrably considered for further development or commercialization. The geographic scope of this restriction shall extend to anywhere Employer is doing business, has done business or intends to do business. Employee acknowledges that the restrictions are reasonable and necessary for protection of the business and goodwill of Employer.

(b)    Employee further agrees that he will not at any time disclose confidential information about Employer relating to its business, technology, practices, products, marketing, sales, services, finances or legal affairs. In the event of termination, Employee will return to Employer, pursuant to Employer policy as required, but in no event later than five (5) business days following termination, all property belonging to Employer, including, but not limited to, any files or other data or documentation, laptop/tablet, cell/smart phone, keys, access cards, phone cards, and credit cards; and in the event Employee discovers Employee has inadvertently retained (or later receives) any such property, Employee shall promptly return it.

(c)    Following termination of Employee’s employment for any reason, Employee and Employer shall refrain from making any derogatory comment in the future to the press or any individual or entity regarding the other that relates to their activities or relationship prior to the date of termination, which comment would likely cause material damage or harm to the business interests or reputation of Employee or Employer. Employee acknowledges that the non-disparagement provisions of this Section 4(c) are essential to Employer, that Employer would not enter into this Agreement if it did not include this Section 4(c), and that damages sustained by Employer as a result of a breach of this Section 4(c) cannot be adequately quantified or remedied by damages alone. Accordingly, Employer shall be entitled to injunctive and other equitable relief to prevent or curtail any breach of this Section 4(c).

(d)    If Employee violates any provision of this Section 4, Employee shall repay all amounts received by Employee pursuant to Sections 3.1(a), (c) and (d) hereof. In the event any such violation occurs prior to the payment of such amounts, Employee shall cease to be entitled to any payment pursuant to such Sections.

5. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE

Employee represents and warrants that neither the execution nor the performance of this Agreement nor the execution or performance of the Proprietary Information and Invention Agreement by Employee will violate or conflict in any way with any other agreement by which Employee may be bound, or with any other duties imposed upon Employee by corporate or other statutory or common law.

6. FORM OF NOTICE

All notices given hereunder shall be given in writing, shall specifically refer to this Agreement and shall be personally delivered or sent by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms hereof:

If to Employee:

If to Employer:	ecoATM, Inc.
	c/o Outerwall Inc.
	1800 114th Avenue SE
	Bellevue, WA 98004
	Attn:    Chairman of the Board of Directors
	cc:     Chief Legal Officer and General Counsel

Copy to:	Perkins Coie LLP
	Attn: Lynn E. Hvalsoe
	1201 Third Ave., 49th Floor
	Seattle, WA 98101-3099

If notice is mailed, such notice shall be effective upon mailing, or if notice is personally delivered, it shall be effective upon receipt.

7. ASSIGNMENT

This Agreement is personal to Employee and shall not be assignable by Employee. Employer may assign its rights hereunder to (a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Employer is a party or (b) any corporation, partnership, association or other person to which Employer may transfer all or substantially all of the assets and business of Employer existing at such time. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

8. WAIVERS

No delay or failure by any party hereto in exercising, protecting or enforcing any of its rights, titles, interests or remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest or remedy in a particular instance or circumstance shall not constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies.

9. ARBITRATION

Any controversies or claims arising out of or relating to this Agreement shall be fully and finally settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect (the “AAA Rules”), conducted by one arbitrator either mutually agreed upon by Employer and Employee or chosen in accordance with the AAA Rules, except that the parties thereto shall have any right to discovery as would be permitted by the Federal Rules of Civil Procedure for a period of 90 days following the commencement of such arbitration and the arbitrator thereof shall resolve any dispute which arises in connection with such discovery. Such arbitration shall be held in Bellevue, Washington. Unless prohibited by law, the prevailing party shall be entitled to costs, expenses and reasonable attorneys’ fees, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall determine whether Employer or Employee shall initially and finally pay all or applicable proportions of the fees of the arbitrator. This provision shall not preclude Employer from seeking court enforcement or relief based upon an alleged violation of Employee’s obligations under any noncompetition or non-disclosure agreement.

10. AVAILABILITY AND CONSULTATION

Employee agrees that he will fully and reasonably assist and cooperate with Employer and its counsel in any action, proceeding, or arbitration, whether initiated by Employer, a third party, or any governmental agency, that arises out of or relates to any events, transactions, or occurrences of which Employee has knowledge as a result of Employee’s former employment with Employer or otherwise. Without in any way limiting the generality of the foregoing, if requested by Employer, Employee specifically agrees to (a) timely provide truthful and complete answers and documents to all requests for information and documents by Employer, whether made formally or informally; (b) timely provide a true and correct, signed declaration to Employer for submission in any such action, proceeding, or arbitration; (c) be interviewed by Employer’s counsel and to participate in preparation session(s) prior to any deposition of Employee; and (d) voluntarily appear to provide testimony at any deposition, hearing, or trial. Employee agrees to provide such services in good faith and to the best of Employee’s ability. Employer agrees to reimburse Employee for all reasonable and necessary out-of-pocket expenses of such cooperation.

11. AMENDMENTS IN WRITING

No amendment, modification, waiver, termination or discharge of any provision of this Agreement, nor consent to any departure therefrom by either party hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed by Employer and Employee, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by Employer and Employee.

12. APPLICABLE LAW

This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in accordance with, the laws of the state of Washington, without regard to any rules governing conflicts of laws.

13. SEVERABILITY

If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, then, to the full extent permitted by law (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision hereof, and (c) any court or arbitrator having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law.

14. HEADINGS

All headings used herein are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement.

15. COUNTERPARTS

This Agreement, and any amendment or modification entered into pursuant to Section 11 hereof, may be executed in any number of counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same instrument.

16. ENTIRE AGREEMENT

Except for the Proprietary Information and Invention Agreement executed by Employee on [NOVEMBER 16], 2015, and the Change of Control Agreement executed on [NOVEMBER 16], 2015, this Agreement sets forth the entire understanding between Employee and Employer, superseding any prior agreements or understandings, express or implied, pertaining to the terms of Employee’s employment with Employer. Employee acknowledges that in executing this Agreement, he does not rely upon any representation or statement by any representative or agent of Employer concerning the subject matter of this Agreement.

IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth above.

ECOATM, INC.
By:	/s/ Raquel Karls
	Raquel Karls
Its	Chief Human Resources Officer
EMPLOYEE
	/s/ David D. Maquera
	David D. Maquera

EXHIBIT A

Change of Control Agreement

EX-10.8

EXHIBIT 10.8

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (this "Agreement"), dated as of NOVEMBER 23, 2015 is between Outerwall Inc. and its subsidiaries and affiliates (collectively the "Employer"), and David D. Maquera (the "Employee").

The Compensation Committee (the “Committee”) of the Board of Directors (the "Board") of the Employer has determined that it is in the best interests of the Employer and its stockholders to ensure that the Employer will have the continued dedication of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Appendix A to this Agreement, which is incorporated herein by this reference) of the Employer. The Committee believes it is imperative to diminish the inevitable distraction of the Employee arising from the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage the Employee's full attention and dedication to the Employer currently and in the event of any threatened or pending Change of Control, to encourage the Employee's willingness to serve a successor in an equivalent capacity, and to provide the Employee with reasonable compensation and benefits arrangements in the event that a Change of Control results in the Employee's loss of equivalent employment.

In order to accomplish these objectives, the Committee has caused the Employer to enter into this Agreement.

1. EMPLOYMENT

1.1 Certain Definitions

(a) "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1.1(b)) on which a Change of Control occurs.

(b) "Change of Control Period" shall mean the period commencing on the date of this Agreement and ending on the second anniversary of the date the Employer gives notice to the Employee that the Change of Control Period shall be terminated.

1.2 Employment Period

The Employer hereby agrees to continue the Employee in its employ or in the employ of its affiliated companies, and the Employee hereby agrees to remain in the employ of the Employer or its affiliated companies, in accordance with the terms and provisions of this Agreement, for the period commencing on the Effective Date and ending two years after such date. (the "Employment Period").

1.3 Duties, Authority, and Responsibility

During the Employment Period, the Employee's duties, authority and responsibilities shall be at least reasonably commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90‑day period immediately preceding the Effective Date.

1.4 Employment Status

If prior to the Effective Date the Employee's employment with the Employer or its affiliated companies terminates, then the Employee shall have no further rights under this Agreement.

2. ATTENTION AND EFFORT

During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee will devote all of his professional productive time, ability, attention and effort to the business and affairs of the Employer and the discharge of the responsibilities assigned to him hereunder, and will use his best efforts to perform faithfully and efficiently such responsibilities.

3. COMPENSATION

During the Employment Period, the Employer agrees to pay or cause to be paid to the Employee, and the Employee agrees to accept in exchange for the services rendered hereunder by him, the following compensation:

3.1 Salary

The Employee shall receive an annual base salary (the "Annual Base Salary"), at least equal to the annual salary established by the Board prior to the Effective Date for the fiscal year in which the Effective Date occurs. The Annual Base Salary shall be paid in substantially equal installments and at the same intervals as the salaries of other officers of the Employer are paid.

3.2 Bonus

Employee may be entitled to receive, in addition to the Annual Base Salary, an annual bonus in an amount to be determined by the Board of Directors of the Employer in its sole discretion (the "Annual Bonus").

3.3 Benefits

During the Employment Period, the Employee shall be entitled to participate, subject to and in accordance with applicable eligibility requirements, in such fringe benefit programs as shall be provided to other executive employees of the Employer and its affiliated companies from time to time during the Employment Period by action of the Board (or any person or committee appointed by the Board to determine fringe benefit programs and other emoluments).

3.4 Expenses

During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the policies, practices and procedures of the Employer and its affiliated companies in effect for the employees of the Employer and its affiliated companies during the Employment Period or pursuant to an applicable travel policy.

4. TERMINATION

Employment of the Employee during the Employment Period may be terminated as follows:

4.1 By the Employer or the Employee

Upon giving Notice of Termination (as defined below), the Employer may terminate the employment of the Employee with or without Cause (as defined below), and the Employee may terminate his employment for Good Reason (as defined below) or for any reason, at any time during the Employment Period.

4.2 Automatic Termination

This Agreement and the Employee's employment during the Employment Period shall terminate automatically upon the death or total disability of the Employee. The Employee and the Employer hereby acknowledge that the Employee's presence and ability to perform the duties specified in Section 1.3 hereof is of the essence of this Agreement.

4.3 Notice of Termination

Any termination by the Employer or by the Employee during the Employment Period shall be communicated by Notice of Termination to the other party given within 30 days. The term "Notice of Termination" shall mean a written notice which (a) indicates the specific termination provision in this Agreement relied upon and (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment under the provision so indicated. The failure by the Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Employer hereunder or preclude the Employer from asserting such fact or circumstance in enforcing the Employer's rights hereunder.

4.4 Date of Termination

During the Employment Period, "Date of Termination" means (a) if the Employee's employment is terminated by reason of death, at the end of the calendar month in which the Employee's death occurs, and (b) in all other cases, the later of (i) five days after the date of personal delivery of or mailing of, as applicable, the Notice of Termination, and (ii) the date on which the Employee separates from service, within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the "Code"). The Employee's employment and performance of services will continue during such five-day period; provided, however, that the Employer may, upon notice to the Employee and without reducing the Employee's compensation during such period, excuse the Employee from any or all of his duties during such period.

5. TERMINATION PAYMENTS

In the event of termination of the Employee's employment during the Employment Period, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 5.

5.1 Termination by the Employer for Other Than Cause or by the Employee for Good Reason

If the Employer terminates the Employee's employment other than for Cause or the Employee terminates his employment for Good Reason prior to the end of the Employment Period, the Employee shall be entitled to:

(a) Receive payment of the following accrued obligations (the "Accrued Obligations"):

(i) the Employee's Annual Base Salary through the Date of Termination to the extent not theretofore paid;

(ii) the product of (x) the target Annual Bonus payable with respect to the fiscal year in which the Date of Termination occurs and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365; and

(iii) any compensation previously deferred by the Employee (together with accrued interest or earnings thereon, if any) as such deferred compensation becomes payable under the deferral plan, and any accrued vacation pay, in each case to the extent not theretofore paid; and

(b) An amount as separation pay equal to the Employee's Annual Base Salary.

(c) If, as a result of the termination of the Employee’s employment, the Employee and the Employee’s spouse and dependent children are eligible for and timely (and properly) elect to continue coverage under the Employers’ group health plans(s) in accordance with Code Section 4980B(f) (“COBRA”), the Employer shall pay the premium for such coverage for a period of twelve (12) months following the Date of Termination or until the Employee is no longer entitled to COBRA continuation coverage under the Employer’s group health plan(s), whichever period is shorter; provided, however, that notwithstanding the foregoing or any other provision in this Agreement to the contrary, the Employer may unilaterally amend this Section 5.1(c) or eliminate the benefit provided hereunder to the extent it deems necessary to address any changes in applicable law and/or to avoid the imposition of excise taxes, penalties or similar charges on the Employer or any of its subsidiaries, affiliates or successors, including, without limitation, under Code Section 4980D.

5.2 Termination for Cause or Other Than for Good Reason

If the Employee's employment shall be terminated by the Employer for Cause or by the Employee for other than Good Reason during the Employment Period, this Agreement shall terminate without further obligation to the Employee other than the obligation to pay to the Employee his Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (as such deferred compensation becomes payable under the deferral plan), in each case to the extent theretofore unpaid.

5.3 Termination Because of Death or Total Disability

If the Employee's employment is terminated by reason of the Employee's death or total disability during the Employment Period, this Agreement shall terminate automatically without further obligations to the Employee or his legal representatives under this Agreement, other than for payment of Accrued Obligations (which shall be paid to the Employee's estate or beneficiary, as applicable in the case of the Employee's death).

5.4 Payment Schedule

Payments under Section 5.1(a), 5.2 and 5.3 (other than payments of deferred compensation, which shall be paid in accordance with the provisions of the plan under which such compensation was deferred) shall be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination. Payments under Section 5.1(b) shall be paid to Employee in twelve (12) equal monthly installments, beginning with the month following the month containing the Date of Termination and continuing for eleven (11) consecutive months thereafter. For purposes of Code Section 409A, each installment payable pursuant to Section 5.1(b) and this Section 5.4 shall be treated as a separate payment.

5.5 Good Reason

(a) For purposes of this Agreement, subject to Section 5.5(b), "Good Reason" means the occurrence of any of the following events or conditions without the Employee's express written consent:

(i) A diminution in the Employee's Annual Base Salary;

(ii) A diminution in the Employee's authority, duties or responsibilities as contemplated by Section 1.3 hereof, excluding for this purpose reasonable changes in particular duties and reporting responsibilities which may result from the Employer becoming part of a larger business organization at some future time provided that such changes in the aggregate do not result in a material alteration in the Employee's authority, duties or responsibilities;

(iii) A relocation of the Employee's principal place of employment to a location more than 50 miles from the San Diego metropolitan area, except for required travel on the Employer's business to an extent substantially consistent with the Employee's duties and responsibilities; or

(iv) Any other action or inaction by the Employer that constitutes a material breach by the Employer of this Agreement.

(b) Notwithstanding any provision in this Agreement to the contrary, termination of employment by the Employee will not be for Good Reason unless (i) the Employee notifies the Employer in writing of the occurrence or existence of the event or condition which the Employee believes constitutes Good Reason within 90 days of the occurrence or initial existence of such event or condition (which notice specifically identifies such event or condition), (ii) the Employer fails to remedy such event or condition within 30 days after the date on which it receives such notice (the "Remedial Period"), and (iii) the Employee actually terminates employment within 90 days after the expiration of the Remedial Period and before the Employer remedies such event or condition. If the Employee terminates employment before the expiration of the Remedial Period or after the Employer remedies the event or condition (even if after the end of the Remedial Period), then the Employee's termination will not be considered to be for Good Reason.

5.6 Cause

For purposes of this Agreement, “Cause” means the occurrence of one or more of the following events:

(a) Failure or refusal to carry out the lawful duties of the Employee or any directions of the Board which are consistent with the duties to be performed by the Employee;

(b) Violation by the Employee of a state or federal criminal law involving the commission of a crime against the Employer or a felony;

(c) Current use by the Employee of illegal substances; deception, fraud, misrepresentation or dishonesty by the Employee; any act or omission by the Employee which substantially impairs the Employer’s business, good will or reputation; or

(d) Any material violation of the confidentiality, non-competition and/or non-solicitation provisions to which the Employee is bound.

6.REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS

In order to induce the Employer to enter into this Agreement, the Employee represents and warrants to the Employer as follows:

6.1No Violation of Other Agreements

The Employee represents that neither the execution nor the performance of this Agreement by the Employee will violate or conflict in any way with any other agreement by which the Employee may be bound.

6.2Reaffirmation of Obligations

The Employee hereby acknowledges and reaffirms the Employee Proprietary Information and Inventions Agreement previously executed by Employee.

6.3Prior Agreements

The Employee hereby acknowledges that as of the date of this Agreement, this Agreement sets forth the entire understanding between the Employee and the Employer regarding the subject matter herein and supersedes all prior oral or written agreements on the subject.

7.CODE SECTION 409A

The Employer makes no representations or warranties to Employee with respect to any tax, economic or legal consequences of this Agreement or any payments or other benefits provided hereunder, including without limitation under Code Section 409A, and no provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with Code Section 409A or any other legal requirement from Employee or any other person to the Employer, any of its affiliates or any other person. The Employee, by executing this Agreement, shall be deemed to have waived any claim against the Employer, its affiliates and any other person with respect to any such tax, economic or legal consequences. However, the parties intend that this Agreement and the payments and other benefits provided hereunder shall be exempt from the requirements of Code Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A‑1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A‑1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to this Agreement (and such payments and benefits), the parties intend that this Agreement (and such payments and benefits) shall comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary, with respect to any payments and benefits under this Agreement to which Code Section 409A applies, all references in this Agreement to termination of Employee's employment are intended to mean Employee's "separation from service," within the meaning of Code Section 409A(a)(2)(A)(i). In addition, if the Employee is a "specified employee," within the meaning of Code Section 409A(a)(2)(B)(i), when the Employee separates from service, within the meaning of Code Section 409A(a)(2)(A)(i), then to the extent necessary to avoid subjecting Employee to the imposition of any additional tax under Code Section 409A, amounts that would otherwise be payable under this Agreement during the six-month period immediately following Employee's separation from service shall not be paid to Employee during such period, but shall instead be accumulated and paid to Employee (or, in the event of Employee's death, Employee's estate) in a lump sum on the first business day following the earlier of (a) the date that is six months after Employee's separation from service or (b) Employee's death.

IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth above.

EMPLOYEE
	/s/ David D. Maquera
	David D. Maquera
OUTERWALL INC.
By:	/s/ Raquel Karls
	Raquel Karls
Its	Chief Human Resources Officer

APPENDIX A TO

CHANGE OF CONTROL AGREEMENT

For purposes of this Agreement, a "Change of Control" shall mean:

(a)    A "Board Change" which, for purposes of this Agreement, shall have occurred if individuals who, as of the date of this Agreement, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Employer's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person (as hereinafter defined) other than the Board; or

(b)    The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of (i) 20% or more of either (A) the then outstanding shares of Common Stock of the Employer (the "Outstanding Employer Common Stock") or (B) the combined voting power of the then outstanding voting securities of the Employer entitled to vote generally in the election of directors (the "Outstanding Employer Voting Securities"), in the case of either (A) or (B) of this clause (i), which acquisition is not approved in advance by a majority of the Incumbent Directors, or (ii) 33% or more of either (A) the Outstanding Employer Common Stock or (B) the Outstanding Employer Voting Securities, in the case of either (A) or (B) of this clause (ii), which acquisition is approved in advance by a majority of the Incumbent Directors; provided, however, that the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Employer or in connection with an offering of the Employer pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission, (x) any acquisition by the Employer, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Employer or any corporation controlled by the Employer or (z) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this Appendix A are satisfied; or

(c)    Consummation of a reorganization, merger or consolidation approved by the stockholders of the Employer, in each case, unless, immediately following such reorganization, merger or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial owners, respectively, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportion as their ownership immediately prior to such reorganization, merger or consolidation of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities, as the case may be, (ii) no Person (excluding the Employer, any employee benefit plan (or related trust) of the Employer or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 33% or more of the Outstanding Employer Common Stock or the Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

(d)    Consummation of the following events approved by the stockholders of the Employer (i) a complete liquidation or dissolution of the Employer or (ii) the sale or other disposition of all or substantially all the assets of the Employer, other than to a corporation with respect to which immediately following such sale or other disposition, (A) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial owners, respectively, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities, as the case may be, (B) no Person (excluding the Employer, any employee benefit plan (or related trust) of the Employer or such corporation and

any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 33% or more of the Outstanding Employer Common Stock or the Outstanding Employer Voting Securities, as the case may be) beneficially owns, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were approved by a majority of the members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Employer.

Notwithstanding the foregoing, there shall not be a Change of Control if, in advance of such event, the Employee agrees in writing that such event shall not constitute a Change of Control.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Erik E. Prusch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Outerwall Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report:

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 28, 2016

By: /s/ Erik E. Prusch

Erik E. Prusch

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Galen C. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Outerwall Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report:

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 28, 2016

By: /s/ Galen C. Smith

Galen C. Smith

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Outerwall Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Form 10-Q"), I, Erik E. Prusch, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 Dated: July 28, 2016

By: /s/ Erik E. Prusch

Erik E. Prusch

Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Outerwall Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Form 10-Q"), I, Galen C. Smith, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 Dated: July 28, 2016

By: /s/ Galen C. Smith

Galen C. Smith

Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 22, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Entity Registrant Name	OUTERWALL INC
Entity Central Index Key	0000941604
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	OUTR
Entity Common Stock, Shares Outstanding		17,215,600

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 199,048	$ 198,850	$ 222,549	$ 237,708	$ 197,934	$ 242,696
Accounts receivable, net of allowances of $806 and $1,272	25,386		38,464
Content library	147,815		188,490
Prepaid expenses and other current assets	47,122		51,368
Total current assets	419,371		500,871
Property and equipment, net	270,414		316,013
Deferred income taxes	2,456		2,606
Goodwill and other intangible assets, net	532,934		540,514
Other long-term assets	1,489		2,207
Total assets	1,226,664		1,362,211
Current Liabilities:
Accounts payable	126,654		184,010
Accrued payable to retailers	100,332		115,098
Other accrued liabilities	155,347		141,437
Current portion of long-term debt and other long-term liabilities	18,418		17,131
Total current liabilities	400,751		457,676
Long-term debt and other long-term liabilities (Note 7)	766,570		893,517
Deferred income taxes	13,442		33,092
Total liabilities	1,180,763		1,384,285
Commitments and contingencies (Note 14)
Stockholders’ Equity (Deficit):
Preferred stock, $0.001 par value - 5,000,000 shares authorized; no shares issued or outstanding	0		0
Common Stock, Value, Outstanding	489,879		485,163
Treasury stock	(1,149,261)		(1,151,063)
Retained earnings	707,138		643,452
Accumulated other comprehensive income (loss)	(1,855)		374
Total stockholders’ equity (deficit)	45,901	$ 2,200	(22,074)
Total liabilities and stockholders’ equity (deficit)	$ 1,226,664		$ 1,362,211

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 806	$ 1,272
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	37,272,647	36,720,579
Common stock, shares outstanding	17,209,584	16,607,516

XML

Consolidated Statements Of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2016		Jun. 30, 2015		Jun. 30, 2016		Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Revenue		$ 518,027		$ 545,369		$ 1,053,983		$ 1,154,005
Expenses:
Direct operating	[1]	351,581		369,619		727,548		774,803
Marketing		7,422		8,047		16,644		16,467
Research and development		1,317		2,039		2,362		4,123
General and administrative		47,681		48,783		95,451		97,339
Restructuring and related costs (Note 9)		401		0		3,676		15,851
Depreciation and other		33,988		45,174		70,106		87,860
Amortization of intangible assets		3,790		3,309		7,580		6,618
Goodwill impairment		0		85,890		0		85,890
Total expenses		446,180		562,861		923,367		1,088,951
Operating income (loss)		71,847		(17,492)		130,616		65,054
Other income (expense), net:
Loss from equity method investments, net		(208)		(133)		(415)		(265)
Interest expense, net		(10,301)		(12,183)		(10,543)		(24,254)
Other, net		223		642		1,452		(1,704)
Total other income (expense), net		(10,286)		(11,674)		(9,506)		(26,223)
Income (loss) from continuing operations before income taxes		61,561		(29,166)		121,110		38,831
Income tax expense		(21,013)		(18,185)		(42,111)		(44,027)
Income (loss) from continuing operations		40,548		(47,351)		78,999		(5,196)
Income (loss) from discontinued operations, net of tax		0		1,735		0		(4,821)
Net income (loss)		40,548		(45,616)		78,999		(10,017)
Foreign currency translation adjustment	[2]	(1,680)	[3],[4]	473	[5]	(2,229)	[6],[7]	3,327	[8]
Comprehensive income (loss)		38,868		(45,143)		76,770		(6,690)
Income (loss) from continuing operations attributable to common shares (Note 11):
Basic		38,615		(47,472)		75,665		(5,465)
Diluted		$ 38,626		$ (47,472)		$ 75,681		$ (5,465)
Basic earnings (loss) per common share (Note 11):
Continuing operations (in usd per share)		$ 2.39		$ (2.66)		$ 4.69		$ (0.30)
Discontinued operations (in usd per share)		0.00		0.10		0.00		(0.27)
Basic earnings (loss) per common share (in usd per share)		2.39		(2.56)		4.69		(0.57)
Diluted earnings (loss) per common share (Note 11):
Continuing operations (in usd per share)		2.38		(2.66)		4.67		(0.30)
Discontinued operations (in usd per share)		0.00		0.10		0.00		(0.27)
Diluted earnings (loss) per common share (in usd per share)		$ 2.38		$ (2.56)		$ 4.67		$ (0.57)
Weighted average common shares used in basic and diluted per share calculations (Note 11):
Weighted average common shares - basic (in shares)		16,149		17,848		16,122		18,057
Weighted average common shares - diluted (in shares)	[9]	16,244		17,848		16,216		18,057
Dividends paid per common share (in usd per share)		$ 0.60		$ 0.30		$ 0.90		$ 0.60

[1] “Direct operating” excludes depreciation and other of $24.9 million and $51.1 million for the three and six months ended June 30, 2016, respectively, and $29.6 million and $58.0 million for the three and six months ended June 30, 2015, respectively.

[2] Foreign currency translation adjustment had no tax effect for the three and six months ended June 30, 2016 and 2015, respectively.

[3] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2016.

[4] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2016.

[5] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2015.

[6] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2016.

[7] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2016.

[8] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2015.

[9] Participating securities were included in the calculation of diluted earnings per share using the two-class method, as this calculation was more dilutive than the calculation using the treasury stock method.

XML

Consolidated Statements of Comprehensive Income (Footnote) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Depreciation and other excluded from direct operating expenses	$ 24,900,000	$ 29,600,000	$ 51,100,000	$ 58,000,000
Foreign currency translation adjustment, tax effect	$ 0	$ 0	$ 0	$ 0

XML

Consolidated Statements Of Stockholders' Equity (Deficit) - USD ($)		Total		Common Stock	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
BALANCE (in shares) at Dec. 31, 2015		16,607,516		16,607,516
BALANCE at Dec. 31, 2015		$ (22,074,000)		$ 485,163,000	$ (1,151,063,000)	$ 643,452,000	$ 374,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustments related to tax withholding for share-based compensation (in shares)				(48,483)
Adjustments related to tax withholding for share-based compensation		(1,472,000)		$ (1,472,000)
Share-based payments expense (in shares)				650,551
Share-based payments expense		9,678,000		$ 7,876,000	1,802,000
Tax benefit (deficiency) on share-based compensation expense		(1,688,000)		$ (1,688,000)
Net income (loss)		78,999,000				78,999,000
Dividends		(15,313,000)				(15,313,000)
Foreign currency translation adjustment	[1]	$ (2,229,000)	[2],[3]				(2,229,000)
BALANCE (in shares) at Jun. 30, 2016		17,209,584		17,209,584
BALANCE at Jun. 30, 2016		$ 45,901,000		$ 489,879,000	(1,149,261,000)	707,138,000	(1,855,000)
Statement of Stockholders' Equity (Footnote) [Abstract]
Foreign currency translation adjustment, tax effect		0
BALANCE (in shares) at Mar. 31, 2016				17,228,741
BALANCE at Mar. 31, 2016		2,200,000		$ 485,171,000	(1,149,261,000)	666,465,000	(175,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustments related to tax withholding for share-based compensation (in shares)				(1,174)
Adjustments related to tax withholding for share-based compensation		(47,000)		$ (47,000)
Share-based payments expense (in shares)				(17,983)
Share-based payments expense		4,360,000		$ 4,360,000	0
Tax benefit (deficiency) on share-based compensation expense		395,000		$ 395,000
Net income (loss)		40,548,000				40,548,000
Dividends		125,000				125,000
Foreign currency translation adjustment	[4]	$ (1,680,000)	[3],[5]				(1,680,000)
BALANCE (in shares) at Jun. 30, 2016		17,209,584		17,209,584
BALANCE at Jun. 30, 2016		$ 45,901,000		$ 489,879,000	$ (1,149,261,000)	$ 707,138,000	$ (1,855,000)
Statement of Stockholders' Equity (Footnote) [Abstract]
Foreign currency translation adjustment, tax effect		$ 0

[1] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2016.

[2] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2016.

[3] Foreign currency translation adjustment had no tax effect for the three and six months ended June 30, 2016 and 2015, respectively.

[4] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2016.

[5] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2016.

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Operating Activities:
Net income (loss)		$ 40,548	$ (45,616)	$ 78,999	$ (10,017)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other		33,988	45,174	70,106	93,718
Amortization of intangible assets		3,790	3,309	7,580	6,662
Share-based payments expense		5,174	3,289	9,504	7,192
Windfall excess tax benefits related to share-based payments		0	(160)	0	(686)
Deferred income taxes		(10,736)	(1,392)	(18,558)	(3,939)
Restructuring, impairment and related costs	[1]	0	0	361	1,680
Loss from equity method investments, net		208	133	415	265
Amortization of deferred financing fees and debt discount		613	692	1,251	1,385
Gain from early extinguishment of debt		(418)	0	(11,446)	0
Goodwill impairment		0	85,890	0	85,890
Other		(244)	383	(280)	(816)
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net		6,322	3,254	13,185	15,077
Content library		7,723	24,703	40,849	34,659
Prepaid expenses and other current assets		(759)	(18,976)	5,263	(22,082)
Other assets		170	154	333	322
Accounts payable		(17,055)	(20,617)	(52,460)	(17,697)
Accrued payable to retailers		10,248	6,931	(14,398)	(11,510)
Other accrued liabilities		(4,552)	(12,008)	11,521	1,112
Net cash flows from (used in) operating activities	[2]	75,020	75,143	142,225	181,215	[3]
Investing Activities:
Purchases of property and equipment		(14,921)	(19,508)	(28,374)	(40,217)
Proceeds from sale of property and equipment		18	2,817	92	2,940
Net cash flows from (used in) investing activities	[2]	(14,903)	(16,691)	(28,282)	(37,277)	[3]
Financing Activities:
Proceeds from new borrowing on Credit Facility		91,000	77,000	176,000	112,000
Principal payments on Credit Facility		(135,687)	(68,875)	(244,000)	(185,750)
Repurchases of notes (Note 7)		(2,179)	0	(47,507)	0
Repurchases of common stock		0	(22,023)	0	(62,731)
Dividends paid		(10,084)	(5,417)	(15,122)	(11,019)
Principal payments on capital lease obligations and other debt		(1,451)	(3,033)	(3,077)	(6,278)
Windfall excess tax benefits related to share-based payments		0	160	0	686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options		(47)	1,887	(1,472)	(1,201)
Net cash flows from (used in) financing activities	[2]	(58,448)	(20,301)	(135,178)	(154,293)	[3]
Effect of exchange rate changes on cash		(1,471)	1,623	(2,266)	5,367
Change in cash and cash equivalents		198	39,774	(23,501)	(4,988)
Cash and cash equivalents:
Beginning of period		198,850	197,934	222,549	242,696
End of period		199,048	237,708	199,048	237,708
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		8,620	10,933	20,670	22,846
Cash paid during the period for income taxes, net		38,890	53,905	40,951	66,896
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment financed by capital lease obligations		1,146	257	2,902	977
Purchases of property and equipment included in ending accounts payable		654	4,436	654	4,436
Additional cash flow information
Restructuring, impairment and related costs	[1]	0	0	361	1,680
Impairment of lease related assets		$ 0	$ 0	$ 0	6,940
Benefit from lease termination					$ 5,200

[1] The non-cash restructuring, impairment and related costs in the six months ended June 30, 2015 of $1.7 million is composed of $6.9 million in impairments of lease related assets partially offset by a $5.2 million benefit resulting from the lease termination.

[2] During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in the 2015 periods presented. See Note 10: Discontinued Operations for cash flow disclosures related to our discontinued Redbox operations in Canada.

[3] During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in all periods presented. See Note 10: Discontinued Operations for cash flow disclosures related to our discontinued Redbox operations in Canada.

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Basis of Presentation and Principles of Consolidation

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

Note 1: Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial information included herein has been prepared by Outerwall Inc., pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements of Outerwall Inc. included herein reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary to present fairly our consolidated financial position, results of operations, and cash flows for the periods presented. The financial information as of December 31, 2015, is derived from our 2015 Annual Report on Form 10-K. The consolidated financial statements included within this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2015 Annual Report on Form 10-K.

The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.

The accompanying consolidated financial statements include the accounts of Outerwall Inc. and our wholly owned subsidiaries. Investments in companies of which we may have significant influence, but not a controlling interest, are accounted for using the equity method of accounting. All significant intercompany balances and transactions have been eliminated in consolidation.

Accounting Pronouncements Adopted During the Current Year

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, instead of as a deferred charge. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (Subtopic 835-30). This ASU provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We adopted this guidance on January 1, 2016, which resulted in the reclassification of $3.8 million of unamortized discount and deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Other than this reclassification, our adoption of ASU 2015-03 and ASU 2015-15 did not have a material impact to our consolidated financial statements and related disclosures. See Note 7: Debt and Other Long-Term Liabilitiesfor more information.

In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. We adopted this ASU on January 1, 2016. Our adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU describes how an entity’s management should assess whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management should consider both quantitative and qualitative factors in making its assessment.

If after considering management’s plans, substantial doubt about an entity’s going concern is alleviated, an entity shall disclose information in the footnotes that enables the users of the financial statements to understand the events that raised the going concern and how management’s plan alleviated this concern.

If after considering management’s plans, substantial doubt about an entity’s going concern is not alleviated, the entity shall disclose in the footnotes indicating that a substantial doubt about the entity’s going concern exists within one year of the date of the issued financial statements. Additionally, the entity shall disclose the events that led to this going concern and management’s plans to mitigate them.

We adopted this ASU on January 1, 2016. Our adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

Accounting Pronouncements Not Yet Adopted

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on our consolidated financial statements, from those disclosed in our 2015 Annual Report on Form 10-K, except for the following:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this ASU do not change the core revenue recognition principles, but provide guidance on certain narrow areas and add practical expedients. Early adoption is permitted to the original effective date of annual reporting periods beginning after December 15, 2016 for ASU 2014-09 and the related amendments and may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently in the process of evaluating the impact of ASU 2014-09 and the related amendments.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This ASU changes how companies account for certain aspects of share-based payment awards to employees, including accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. We are currently evaluating the impact of adopting this ASU and expect this standard to not have a significant impact on our consolidated financial statements and related disclosures, which is effective for us in our fiscal year beginning January 1, 2017. Early adoption is permitted.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. We are currently evaluating the impact of adopting this ASU and expect this standard to have a significant impact on our consolidated financial statements and related disclosures, which is effective for us in our fiscal year beginning January 1, 2019. Early adoption is permitted.

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Organization and Business

6 Months Ended

Jun. 30, 2016

Organization And Business [Abstract]

Organization and Business

Note 2: Organization and Business

Description of Business

We are a leading provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers.

Our core offerings in automated retail include our Redbox, Coinstar and ecoATM segments. Our Redbox segment consists of self-service kiosks where consumers can rent or purchase movies and video games. Our Coinstar segment consists of self-service coin-counting kiosks where consumers can convert their coins to cash or stored value products. We also offer self-service kiosks that exchange gift cards for cash under our Coinstar™ Exchange brand. Our ecoATM segment consists of self-service kiosks and an online solution where consumers can sell electronic devices for cash and generates revenue through the sale of devices collected to third party resellers, through online marketplaces and through the Gazelle direct-to-consumer storefront.

In addition to our three reportable segments, we may also conduct business activities through other self-service concepts, where we identify, evaluate, build or acquire and develop new self-service retail concepts and regularly assess these concepts to determine whether continued funding or other alternatives are appropriate.

Our kiosks are located primarily in supermarkets, drug stores, mass merchants, convenience stores, financial institutions, malls and restaurants. Our kiosk and location counts as of June 30, 2016, are as follows:

	Kiosks	Locations
Redbox	39,970	32,710
Coinstar	20,810	19,560
ecoATM	2,460	2,230
Total	63,240	54,500

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Cash and Cash Equivalents

6 Months Ended

Jun. 30, 2016

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Note 3: Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Our cash and cash equivalents were $199.0 million and $222.5 million at June 30, 2016, and December 31, 2015, respectively. Of this total, cash equivalents were $5.1 million and $2.7 million, respectively, and consisted of money market demand accounts and investment grade fixed income securities such as money market funds, certificate of deposits, and commercial paper. Our cash balances with financial institutions may exceed the deposit insurance limits.

Included in our cash and cash equivalents at June 30, 2016, and December 31, 2015, were $74.7 million and $83.3 million, respectively that we identified for settling our accrued payables to our retailer partners in relation to our Coinstar kiosks.

Separately included in our cash and cash equivalents at June 30, 2016, and December 31, 2015, were $41.7 million and $46.2 million, respectively in cash and cash equivalents held in financial institutions domestically and $7.7 million and $9.0 million, respectively in cash and cash equivalents held in foreign financial institutions.

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Prepaid Expenses and Other Current Assets and Other Accrued Liabilities

6 Months Ended

Jun. 30, 2016

Disclosure Text Block Supplement [Abstract]

Prepaid Expenses and Other Current Assets and Other Accrued Liabilities

Note 4: Prepaid Expenses and Other Current Assets and Other Accrued Liabilities

Prepaid expenses and other current assets:

Dollars in thousands	June 30, 2016		December 31, 2015
Spare parts	$	11,616	$	9,780
Licenses	5,744		6,394
Electronic devices inventory	10,427		7,846
Income taxes receivable	1,953		9,517
Prepaid rent	1,365		1,043
DVD cases and labels	1,648		1,371
Other	14,369		15,417
Total prepaid and other current assets	$	47,122	$	51,368

Other accrued liabilities consist of the following:

Dollars in thousands	June 30, 2016		December 31, 2015
Payroll related expenses	$	34,779	$	40,676
Studio revenue share and other content related expenses	36,052		28,964
Business taxes	15,591		16,080
Insurance	13,549		13,594
Deferred revenue	12,498		11,201
Income taxes payable	13,372		16
Accrued interest expense	6,192		6,913
Accrued early lease termination and sublease expenses	3,859		4,991
Service contract provider expenses	5,288		4,070
Deferred rent expense	2,044		1,728
Other	12,123		13,204
Total other accrued liabilities	$	155,347	$	141,437

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Property and Equipment

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 5: Property and Equipment

Dollars in thousands	June 30, 2016			December 31, 2015
Kiosks and components	$	1,162,872		$	1,163,210
Computers, servers, and software	195,809			193,507
Leasehold improvements	22,497			22,663
Office furniture and equipment	7,248			7,047
Vehicles	4,585			5,118
Property and equipment, at cost	1,393,011			1,391,545
Accumulated depreciation and amortization	(1,122,597		)	(1,075,532		)
Property and equipment, net	$	270,414		$	316,013

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 6: Goodwill and Other Intangible Assets

Goodwill

The carrying amount of goodwill was as follow:

Dollars in thousands	June 30, 2016		December 31, 2015
Goodwill	$	473,417	$	473,417

During the second quarter of 2015, we recognized a goodwill impairment charge of $85.9 million related to ecoATM. The goodwill was originally recognized as part of our acquisition of ecoATM in 2013. During the three months ended June 30, 2015, it became evident that revenue and profitability trends in our ecoATM reporting unit were not being achieved as expected. As a result, we revised our internal expectations for future revenue growth and profitability lower than our previous estimates.

The expected future cash flows of our ecoATM reporting unit include key assumptions with inherent uncertainty which may change in future periods and may have a negative effect on the fair value resulting in potential future impairments, the most significant of which is our estimate of future cash flows predicated on estimated growth in kiosks, revenue and profitability measures. Additionally, fair value may be negatively impacted by changes in our strategy related to the ecoATM reporting unit and factors outside of our control such as increased competition from companies whose primary business consists of the purchase of used electronics and with companies in other businesses who also have buyback programs.

To evaluate whether it is more likely than not that the fair value of each of our reporting units are less than their respective carrying amounts as of June 30, 2016, we considered all relevant events and circumstances including, but not limited to, the performance of our reporting units compared to the estimates used in our most recent quantitative analysis, changes in our average market capitalization, and the excess of fair value for each of our reporting units over the carrying amounts of each of our reporting units as indicated by the first step of the goodwill impairment test completed in the fourth quarter of 2015. There have not been any events or changes in circumstances that we believe would more likely than not reduce the fair value of any of our reporting units below their carrying amounts.

On March 14, 2016, we announced that our Board of Directors has initiated a process to explore strategic and financial alternatives to maximize shareholder value. As a result of the exploration of strategic and financial alternatives, on July 24, 2016, the company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with affiliates of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”), a leading global alternative investment manager, pursuant to which the Apollo Funds will acquire all of the outstanding shares of Outerwall common stock for $52.00 per share in cash. The transaction will be completed through an all-cash tender offer. See Note 17: Subsequent Events for additional information. Through this process we did not obtain any additional information regarding the fair value of our reporting units that would indicate the fair value of any of our reporting units were individually below their carrying amounts.

Other Intangible Assets

The gross amount of our other intangible assets and the related accumulated amortization were as follows:

Dollars in thousands	Amortization Period	June 30, 2016			December 31, 2015
Retailer relationships	5 - 10 years	$	53,295		$	53,295
Accumulated amortization		(29,217		)	(27,212		)
Retailer relationships, net		24,078			26,083
Developed technology	3 - 5 years	36,000			36,000
Accumulated amortization		(20,277		)	(16,544		)
Developed technology, net		15,723			19,456
Trade names	5 - 10 years	20,000			20,000
Accumulated amortization		(4,433		)	(3,133		)
Trade names, net		15,567			16,867
Other	1 - 40 years	10,800			10,800
Accumulated amortization		(6,651		)	(6,109		)
Other, net		4,149			4,691
Total intangible assets, net		$	59,517		$	67,097

Amortization expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Retailer relationships	$	1,002	$	1,003	$	2,005	$	2,006
Developed technology	1,867		1,700		3,733		3,400
Trade names	650		300		1,300		600
Other	271		306		542		656
Total amortization of intangible assets	3,790		3,309		7,580		6,662
Less: amortization included in discontinued operations	—		—		—		(44		)
Total amortization of intangible assets from continuing operations	$	3,790	$	3,309	$	7,580	$	6,618

Assuming no future impairment, the expected future amortization as of June 30, 2016, is as follows:

Dollars in thousands	Total
Remainder of 2016	$	7,580
2017	15,160
2018	11,598
2019	6,213
2020	5,819
Thereafter	13,147
Total expected amortization	$	59,517

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Debt and Other Long-Term Liabilities

6 Months Ended

Jun. 30, 2016

Long-term Debt, Unclassified [Abstract]

Debt and Other Long-Term Liabilities

Note 7: Debt and Other Long-Term Liabilities

	Debt															Other Liabilities							Total
	Senior Notes						Credit Facility						Total Debt			Capital Lease Obligations			Asset Retirement Obligations		Other Long-term Liabilities
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of June 30, 2016:
Principal	$	320,614		$	228,598		$	129,375		$	80,000		$	758,587
Unamortized discount and deferred financing fees(1)	(2,922		)	(3,234		)	(224		)	(1,968		)	(8,348		)
Total	317,692			225,364			129,151			78,032			750,239			$	5,531		$	9,438	$	19,780	$	784,988
Less: current portion	—			—			(15,000		)	—			(15,000		)	(3,418		)	—		—		(18,418		)
Total long-term portion	$	317,692		$	225,364		$	114,151		$	78,032		$	735,239		$	2,113		$	9,438	$	19,780	$	766,570

	Debt															Other Liabilities							Total
	Senior Notes						Credit Facility						Total Debt			Capital Lease Obligations			Asset Retirement Obligations		Other Long-term Liabilities
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of December 31, 2015:
Principal	$	350,000		$	258,908		$	136,875		$	140,500		$	886,283
Unamortized discount and deferred financing fees(1)	(3,770		)	(4,083		)	(260		)	(2,300		)	(10,413		)
Total	346,230			254,825			136,615			138,200			875,870			$	5,889		$	9,412	$	19,477	$	910,648
Less: current portion	—			—			(13,125		)	—			(13,125		)	(4,006		)	—		—		(17,131		)
Total long-term portion	$	346,230		$	254,825		$	123,490		$	138,200		$	862,745		$	1,883		$	9,412	$	19,477	$	893,517

(1) As described in Note 1: Basis of Presentation and Principles of Consolidation, we adopted ASU 2015-03 and 2015-15 in the first quarter of 2016 and have applied the guidance to our Senior Notes and Credit Facility. Under this guidance, we are now presenting unamortized deferred financing fees as a direct deduction from the associated debt liability. Historically, unamortized deferred financing fees were included in other non-current assets. This adoption resulted in the reclassification of $3.8 million of unamortized deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Deferred financing fees are amortized on a straight line basis over the life of the related loan.

Interest Expense

Dollars in thousands	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Cash interest expense	$	10,141		$	11,499	$	20,795		$	22,894
Amortization of debt discount and deferred financing fees	613			692		1,251			1,385
Total cash and non-cash interest expense	10,754			12,191		22,046			24,279
Gain from early extinguishment of debt	(418		)	—		(11,446		)	—
Total interest expense	$	10,336		$	12,191	$	10,600		$	24,279

2019 Notes

On March 12, 2013, we entered into an indenture pursuant to which we issued $350.0 million principal amount of 6.000% Senior Notes due 2019 (the “2019 Notes”) at par for proceeds, net of expenses, of $343.8 million. Each of our direct and indirect U.S. subsidiaries guarantees the 2019 Notes.

During the second quarter of 2016, no notes were repurchased. During the six months ended June 30, 2016, we repurchased 29,386 notes, or $29.4 million in face value of notes, for $23.4 million in cash. The gain from early extinguishment of these notes was approximately $5.6 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

As of June 30, 2016, we were in compliance with the covenants of the related indenture.

2021 Notes

On June 9, 2014, we entered into an indenture pursuant to which we issued $300.0 million principal amount of 5.875% Senior Notes due 2021 (the “2021 Notes”) at par for proceeds, net of expenses, of $294.0 million. Each of our direct and indirect U.S. subsidiaries guarantees the 2021 Notes.

During the second quarter of 2016, we repurchased 2,635 notes, or $2.6 million in face value of notes, for $2.2 million in cash. The gain from early extinguishment of these notes was approximately $0.4 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

During the six months ended June 30, 2016, we repurchased 30,310 notes, or $30.3 million in face value of notes, for $24.1 million in cash. The gain from early extinguishment of these notes was approximately $5.8 million and is included in interest expense, net on our Consolidated Statements of Comprehensive Income.

As of June 30, 2016, we were in compliance with the covenants of the related indenture.

Revolving Line of Credit and Term Loan

Our senior secured credit facility (the “Credit Facility”) consists of (a) a $150.0 million amortizing term loan (the “Term Loan”) and (b) a $600.0 million revolving line of credit (the “Revolving Line”), which includes (i) a $75.0 million sublimit for the issuance of letters of credit, (ii) a $50.0 million sublimit for swing line loans and (iii) a $75.0 million sublimit for loans in certain foreign currencies available to us and certain wholly owned Company foreign subsidiaries (the “Foreign Borrowers”). We may, subject to applicable conditions and subject to obtaining commitments from lenders, request an increase in the Revolving Line of up to $200.0 million in aggregate (the “Accordion”). As of June 30, 2016, the interest rate on amounts outstanding under the Credit Facility was 2.20% and we were in compliance with the covenants of the Credit Facility.

Required principal amortization payments under the Term Loan are as follows:

Dollars in thousands	Repayment Amount
Remainder of 2016	$	7,500
2017	15,000
2018	20,625
2019	86,250
Total	$	129,375

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Share-Based Payments

6 Months Ended

Jun. 30, 2016

Share-based Compensation [Abstract]

Share-Based Payments

Note 8: Share-Based Payments

We currently grant share-based awards to our executives, non-employee directors and employees under our 2011 Incentive Plan (the “Plan”). The Plan permits the granting of stock options, restricted stock, restricted stock units, and performance-based restricted stock.

Certain information regarding our share-based payments is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Share-based payments expense:
Share-based compensation - stock options	$	33	$	40	$	80	$	181
Share-based compensation - restricted stock	4,452		2,039		7,982		4,598
Share-based payments for content arrangements	813		1,241		1,628		2,482
Total share-based payments expense	$	5,298	$	3,320	$	9,690	$	7,261
Tax benefit on share-based payments expense	$	2,066	$	1,289	$	3,774	$	2,807

	June 30, 2016
Dollars in thousands	Unrecognized Share-Based Payments Expense		Weighted-Average Remaining Life
Unrecognized share-based payments expense:
Share-based compensation - stock options	$	83	0.7 years
Share-based compensation - restricted stock	18,349		2.4 years
Share-based payments for content arrangements	1,264		0.4 years
Total unrecognized share-based payments expense	$	19,696

Share-Based Compensation

Stock options

No stock options were granted in 2016.

Restricted stock and performance based restricted stock awards

Restricted stock awards are granted to eligible executives, non-employee directors and employees. Awards granted to employees and executives in 2016 vest annually in installments over three years (25% of the award vests one year from the grant date, 25% of the award vests two years from the grant date, and the remaining 50% of the award vests three years from the grant date). Non-employee director awards vest one year after the grant date. The fair value of non-performance-based awards is based on the market price on the grant date.

Performance-based restricted stock awards are granted to executives only, with established performance criteria approved by the Compensation Committee of the Board of Directors. Awards of performance-based restricted stock made in 2016, once earned, vest annually in equal installments over three years from the date of grant. The restricted shares require no payment from the grantee. The fair value of performance-based awards is based on achieving specific performance conditions and is recognized over the vesting period.

We estimate forfeitures for restricted stock awards and recognize share-based compensation expense for only those awards expected to vest.

The following table presents a summary of restricted stock award activity for 2016:

Shares in thousands	Restricted Stock Awards		Weighted Average Grant Date Fair Value
Non-vested, December 31, 2015	556		$	65.86
Granted	746		26.86
Vested	(155	)	64.45
Forfeited	(148	)	50.73
Non-vested, June 30, 2016	999		39.21

Share-Based Payments for Content Arrangements

We have granted restricted stock as part of content license agreements with certain movie studios. The expense related to these agreements is included within direct operating expenses in our Consolidated Statements of Comprehensive Income and is adjusted based on the number of unvested shares and market price of our common stock each reporting period. During the first quarter of 2016, 50,000 shares of restricted stock were granted and immediately vested pursuant to a revenue sharing agreement with Paramount.

Rights to Receive Cash

As a part of the acquisition of ecoATM, we issued replacement awards for unvested restricted stock and options in ecoATM with rights to receive cash equal to the per share merger consideration for restricted stock and net of the exercise price for options. The replacement awards vest in accordance with the terms of the original replaced award. The replacement awards are considered liability classified as they represent rights to receive cash. Expense associated with the post-combination awards is recognized net of forfeitures, and cash payments are made in accordance with the awards' vesting schedule, generally on a monthly basis. We recognized $0.8 million in expense associated with the issuance of rights to receive cash for the six months endedJune 30, 2016. The expected future recognition of expense associated with the rights to receive cash as of June 30, 2016 is as follows:

Dollars in thousands	Expected Expense
Remainder of 2016	$	594
2017	146
Remaining total expected expense	$	740

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Restructuring

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring

Note 9: Restructuring

2016 Restructuring

During the first half of 2016, we recorded restructuring charges arising from implementing actions to further align costs with revenues in our continuing operations primarily through workforce reductions across the company.

We do not expect significant future restructuring charges related to our first half 2016 restructuring activities.

2015 Restructuring

During the first quarter of 2015, we recorded restructuring charges arising from the following activities:

• Discontinuing our Redbox operations in Canada. The disposal was completed on March 31, 2015. See Note 10: Discontinued Operations for further information;

• Reducing the size of our Redbox headquarters facility in Oakbrook Terrace, Illinois through early termination of operating leases for certain floors. We ceased using the office space on March 31, 2015 and the effective date of the early termination is July 31, 2016. Prior to exercising our early termination option, the leases had been scheduled to expire in July 2021; and

• Implementing actions to further align costs with revenues in our continuing operations primarily through workforce reductions across the company and subleasing a floor of a corporate facility.

The total amount incurred for restructuring and related costs from continuing operations is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Redbox
Severance	$	14	$	—	$	2,125	$	3,701
Lease termination and related costs (excluding related asset impairments)	—		—		297		4,567
Total Redbox restructuring costs	14		—		2,422		8,268
Coinstar
Severance	3		—		408		492
Lease termination and related costs (excluding related asset impairments)	—		—		57		24
Total Coinstar restructuring costs	3		—		465		516
ecoATM
Severance	384		—		782		127
Lease termination and related costs (excluding related asset impairments)	—		—		7		—
Total ecoATM restructuring costs	384		—		789		127
Total restructuring costs in continuing operations	401		—		3,676		8,911
Impairment of lease related assets	—		—		—		6,940
Total restructuring and related costs from continuing operations	$	401	$	—	$	3,676	$	15,851

A reconciliation of the beginning and ending liability balance by expense type is as follows:

Dollars in thousands	Severance Expense			Lease Termination Costs
Beginning Balance - January 1, 2016	$	1,385		$	4,991
Costs charged to expense	3,315			361
Costs paid or otherwise settled	(4,629		)	(1,493		)
Ending Balance - June 30, 2016	$	71		$	3,859

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Discontinued Operations

6 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 10: Discontinued Operations

Summary Financial Information

On January 23, 2015, we made the decision to shut down our Redbox Canada operations as the business was not meeting the company's performance expectations. This represents a strategic shift which has a major effect on our operations as it represents a significant geographical area for our Redbox segment and the losses generated were significant to our total operations. On March 31, 2015, we completed the disposal of the Redbox Canada operations. As a result, we updated certain estimates used in the preparation of the financial statements and the remaining value of the content library and certain capitalized property and equipment consisting primarily of installation costs were amortized over the wind-down period ending March 31, 2015. We have reclassified the results of Redbox Canada to discontinued operations for all periods presented in our Consolidated Statements of Comprehensive Income.

The following table sets forth the components of discontinued operations included in our Consolidated Statements of Comprehensive Income:

	Three Months Ended			Six Months Ended
Dollars in thousands	June 30, 2015			June 30, 2015
Major classes of line items constituting pretax loss of discontinued operations:
Revenue	$	—		$	1,557
Direct operating	35			4,304
Marketing	(17		)	112
General and administrative	35			154
Restructuring and related costs	—			522
Depreciation and other	—			5,858
Amortization of intangible assets	—			44
Other expense, net	166			(4,329		)
Pretax gain (loss) of discontinued operations related to major classes of pretax loss	113			(13,766		)
Income tax benefit(1)	1,622			8,945
Net income (loss) on discontinued operations	$	1,735		$	(4,821	)

(1) The income tax benefit for the three months and six months ended June 30, 2015 includes a benefit on the rate differential between the U.S. and Canada.

Significant operating and investing cash flows of Redbox Canada were as follows:

	Three Months Ended			Six Months Ended
Dollars in thousands	June 30, 2015			June 30, 2015
Net income (loss) on discontinued operations	$	1,735		$	(4,821	)
Adjustments to reconcile net gain (loss) to net cash flows from operating activities:
Depreciation and amortization	—			5,902
Content library	148			3,212
Prepaid and other current assets	690			1,234
Accounts payable	(1,095		)	(2,716		)
Accrued payables to retailers	—			(155		)
Other accrued liabilities	(585		)	(617		)
Net cash flows from operating activities	$	893		$	2,039
Investing activities:
Purchase of property, plant and equipment	—			(278		)
Total cash flows used in investing activities	$	—		$	(278	)

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Earnings Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Note 11: Earnings Per Share

The Two-Class Method is an earnings allocation formula that treats a participating security, as having rights to earnings that otherwise would have been available to common shareholders and assumes all earnings for the period are distributed. Our unvested restricted stock awards granted are participating securities as they entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock.

Basic and diluted weighted average shares were the same for the three and six month periods ended June 30, 2015, as the effects of potentially dilutive securities were antidilutive due to our net loss position. Our calculation of basic and diluted earnings per share is as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
In thousands, except per share data	2016			2015			2016			2015
Numerator
Income (loss) from continuing operations	$	40,548		$	(47,351	)	$	78,999		$	(5,196	)
Income (loss) from discontinued operations, net of tax	—			1,735			—			(4,821		)
Net income (loss)	$	40,548		$	(45,616	)	$	78,999		$	(10,017	)
Income from continuing operations	$	40,548		$	(47,351	)	$	78,999		$	(5,196	)
Dividends and undistributed income allocated to participating shares	(1,933		)	(121		)	(3,334		)	(269		)
Income from continuing operations to common shares - basic	38,615			(47,472		)	75,665			(5,465		)
Effect of reallocating undistributed income from continuing operations to participating shares	11			—			16			—
Income from continuing operations to common shares - diluted	$	38,626		$	(47,472	)	$	75,681		$	(5,465	)
Denominator
Weighted average common shares - basic	16,149			17,848			16,122			18,057
Dilutive effect of share-based payment awards	95			—			94			—
Weighted average common shares - diluted(1)	16,244			17,848			16,216			18,057
Basic earnings (loss) per common share:
Continuing operations	$	2.39		$	(2.66	)	$	4.69		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Basic earnings (loss) per common share	$	2.39		$	(2.56	)	$	4.69		$	(0.57	)
Diluted earnings (loss) per common share:
Continuing operations	$	2.38		$	(2.66	)	$	4.67		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Diluted earnings (loss) per common share	$	2.38		$	(2.56	)	$	4.67		$	(0.57	)
Stock options and share-based awards not included in diluted EPS calculation because their effect would have be antidilutive	248			14			121			16

(1) Participating securities were included in the calculation of diluted earnings per share using the two-class method, as this calculation was more dilutive than the calculation using the treasury stock method.

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Business Segments and Enterprise-Wide Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business Segments and Enterprise-Wide Information

Note 12: 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 (loss) before depreciation, amortization and other, and share-based compensation granted to executives, non-employee directors and employees (“segment operating income (loss)”). Segment operating income (loss) 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.

Comparability of Results

We regularly assess the performance of our concepts to determine whether continued funding or other alternatives are appropriate and as a result, we discontinued operating SAMPLEit in the fourth quarter of 2015. As SAMPLEit did not represent a major component of our operations or financial results, the results of SAMPLEit did not qualify to be reported as a discontinued operation and remain in our All Other reporting category.

On November 10, 2015, we acquired certain assets and liabilities of Gazelle, Inc. ("Gazelle"). Results of operations for Gazelle are included in ecoATM for the three and six months ended June 30, 2016.

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 ecoATM segments, Corporate Unallocated expenses and All Other. All Other includes the results of other self-service concepts, which we regularly assess to determine whether continued funding or other alternatives are appropriate.

Dollars in thousands
Three Months Ended June 30, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	389,059		$	84,168		$	44,800		$	—		$	—		$	518,027
Expenses:
Direct operating	271,731			42,095			37,291			83			381			351,581
Marketing	3,919			399			3,058			7			39			7,422
Research and development	—			—			1,194			—			123			1,317
General and administrative	31,325			8,494			3,573			2			4,287			47,681
Restructuring and related costs (Note 9)	14			3			384			—			—			401
Segment operating income (loss)	82,070			33,177			(700		)	(92		)	(4,830		)	109,625
Less: depreciation, amortization and other	(21,806		)	(7,595		)	(8,398		)	21			—			(37,778		)
Operating income (loss)	60,264			25,582			(9,098		)	(71		)	(4,830		)	71,847
Loss from equity method investments, net	—			—			—			—			(208		)	(208		)
Interest expense, net	—			—			—			—			(10,301		)	(10,301		)
Other, net	—			—			—			—			223			223
Income (loss) from continuing operations before income taxes	$	60,264		$	25,582		$	(9,098	)	$	(71	)	$	(15,116	)	$	61,561

Dollars in thousands
Three Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	438,976		$	80,279		$	26,062		$	52		$	—		$	545,369
Expenses:
Direct operating	301,444			39,358			27,227			1,078			512			369,619
Marketing	4,266			1,232			2,149			258			142			8,047
Research and development	—			—			1,549			1			489			2,039
General and administrative	34,336			7,768			2,094			2,644			1,941			48,783
Goodwill impairment	—			—			85,890			—			—			85,890
Segment operating income (loss)	98,930			31,921			(92,847		)	(3,929		)	(3,084		)	30,991
Less: depreciation, amortization and other	(33,063		)	(8,437		)	(6,305		)	(678		)	—			(48,483		)
Operating income (loss)	65,867			23,484			(99,152		)	(4,607		)	(3,084		)	(17,492		)
Loss from equity method investments, net	—			—			—			—			(133		)	(133		)
Interest expense, net	—			—			—			—			(12,183		)	(12,183		)
Other, net	—			—			—			—			642			642
Income (loss) from continuing operations before income taxes	$	65,867		$	23,484		$	(99,152	)	$	(4,607	)	$	(14,758	)	$	(29,166	)

Dollars in thousands
Six Months Ended June 30, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	810,547		$	156,547		$	86,889		$	—		$	—		$	1,053,983
Expenses:
Direct operating	570,732			80,740			75,185			169			722			727,548
Marketing	7,743			1,174			7,638			12			77			16,644
Research and development	—			—			2,129			—			233			2,362
General and administrative	63,354			16,358			7,575			349			7,815			95,451
Restructuring and related costs (Note 9)	2,422			465			789			—			—			3,676
Segment operating income (loss)	166,296			57,810			(6,427		)	(530		)	(8,847		)	208,302
Less: depreciation, amortization and other	(46,101		)	(15,004		)	(16,602		)	21			—			(77,686		)
Operating income (loss)	120,195			42,806			(23,029		)	(509		)	(8,847		)	130,616
Loss from equity method investments, net	—			—			—			—			(415		)	(415		)
Interest expense, net	—			—			—			—			(10,543		)	(10,543		)
Other, net	—			—			—			—			1,452			1,452
Income (loss) from continuing operations before income taxes	$	120,195		$	42,806		$	(23,029	)	$	(509	)	$	(18,353	)	$	121,110

Dollars in thousands
Six Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	958,509		$	149,609		$	45,811		$	76		$	—		$	1,154,005
Expenses:
Direct operating	644,379			76,621			50,033			2,269			1,501			774,803
Marketing	9,091			2,410			3,879			578			509			16,467
Research and development	—			—			3,005			(84		)	1,202			4,123
General and administrative	68,071			15,563			4,062			5,151			4,492			97,339
Restructuring and related costs (Note 9)	15,174			550			127			—			—			15,851
Goodwill impairment	—			—			85,890			—			—			85,890
Segment operating income (loss)	221,794			54,465			(101,185		)	(7,838		)	(7,704		)	159,532
Less: depreciation, amortization and other	(64,670		)	(16,255		)	(12,207		)	(1,346		)	—			(94,478		)
Operating income (loss)	157,124			38,210			(113,392		)	(9,184		)	(7,704		)	65,054
Loss from equity method investments, net	—			—			—			—			(265		)	(265		)
Interest expense, net	—			—			—			—			(24,254		)	(24,254		)
Other, net	—			—			—			—			(1,704		)	(1,704		)
Income (loss) from continuing operations before income taxes	$	157,124		$	38,210		$	(113,392	)	$	(9,184	)	$	(33,927	)	$	38,831

Significant Retailer Relationships

Kiosks at the following retailers accounted for 10% or more of our consolidated revenue:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Wal-Mart Stores Inc.	16.7	%	16.4	%	16.4	%	16.4	%
Walgreen Co.	12.4	%	13.5	%	13.1	%	14.0	%
The Kroger Company	9.6	%	10.0	%	9.6	%	9.9	%

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Fair Value

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value

Note 13: Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:

• Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; or

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Assets and Liabilities Measured and Reported at Fair Value on a Recurring Basis

Money Market Demand Accounts and Investment Grade Fixed Income Securities

The fair value for our money market demand accounts and investment grade fixed income securities falls under Level 1 of the fair value hierarchy based on quoted market prices. The fair value of these assets is included in cash and cash equivalents on our Consolidated Balance Sheets on a recurring basis. The following table presents the fair values of our money market demand accounts and investment grade fixed income securities as of the dates specified below:

	Level 1
Dollars in thousands	June 30, 2016		December 31, 2015
Money market demand accounts and investment grade fixed income securities	$	5,056	$	2,743

Assets and Liabilities Measured and Reported at Fair Value on a Nonrecurring Basis

We recognize or disclose the fair value of certain assets such as non-financial assets, primarily long-lived assets, goodwill, intangible assets and certain other assets in connection with impairment evaluations. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy.

Fair Value of Other Financial Instruments

The carrying value of our term loans approximates their fair value and falls under Level 2 of the fair value hierarchy.

We estimated the fair value of our senior unsecured notes due 2019 and 2021 outstanding using quoted market prices by independent dealers. We have reported the carrying value, face value less the unamortized debt discount and deferred financing fees, of our senior unsecured notes, issued at par, in our Consolidated Balance Sheets. The following table presents the approximate fair values of the 2019 Notes and 2021 Notes as of the dates specified below:

	Level 2
Dollars in thousands	June 30, 2016		December 31, 2015
2019 Notes	$	293,000	$	312,000
2021 Notes	$	194,000	$	213,000

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 14: Commitments and Contingencies

Content License Agreements

We have entered into certain license agreements to obtain content for movie and video game rentals. Total estimated movie content commitments as of June 30, 2016, is presented in the following table:

Dollars in thousands
	Total		Remaining in 2016		2017		2018
Total estimated movie content commitments	$	460,681	$	226,902	$	224,136	$	9,643

Legal Matters

In October 2009, an Illinois resident, Laurie Piechur, individually and on behalf of all others similarly situated, filed a putative class action complaint against our Redbox subsidiary in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. The plaintiff alleged that, among other things, Redbox charges consumers illegal and excessive late fees in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and that Redbox's rental terms violate the Illinois Rental Purchase Agreement Act or the Illinois Automatic Contract Renewal Act and the plaintiff is seeking monetary damages and other relief. In November 2009, Redbox removed the case to the U.S. District Court for the Southern District of Illinois. In February 2010, the District Court remanded the case to the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. In May 2010, the court denied Redbox's motion to dismiss the plaintiff's complaint. In November 2011, the plaintiff moved for class certification, and Redbox moved for summary judgment. The court denied Redbox's motion for summary judgment in February 2012. The plaintiff filed an amended complaint on April 19, 2012, and an amended motion for class certification on June 5, 2012. The court denied Redbox's motion to dismiss the amended complaint. The amended class certification motion was briefed and argued. At the hearing on plaintiff's amended motion for class certification, the plaintiff dismissed all claims but two and is pursuing only her claims under the Illinois Rental Purchase Agreement Act and the Illinois Automatic Contract Renewal Act. On May 21, 2013, the court denied plaintiff's amended class action motion. On January 29, 2014, the Illinois Supreme Court denied plaintiff’s petition for leave to appeal the trial court’s denial of class certification. Redbox moved to dismiss all remaining claims on mootness grounds, and the Court granted Redbox’s motion on December 11, 2014. The plaintiffs appealed on January 7, 2015. Oral argument was held November 10, 2015. The Appellate Court affirmed the trial court’s rulings on January 11, 2016. Plaintiffs filed a petition for review with the Illinois Supreme Court on February 16, 2016, and Redbox filed an answer on March 8, 2016. The Illinois Supreme Court denied Plaintiffs petition on May 25, 2016. We continue to believe that the claims against us are without merit and intend to defend ourselves vigorously in this matter should plaintiff seek further appellate review. Currently, no accrual has been established as it was not possible to estimate the possible loss or range of loss because this matter had not advanced to a stage where we could make any such estimate.

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Guarantor Subsidiaries

6 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Guarantor Subsidiaries

Note 15: Guarantor Subsidiaries

Certain of our wholly owned subsidiaries have, jointly and severally, fully and unconditionally guaranteed the Senior Notes. Pursuant to SEC regulations, we have presented in columnar format the condensed consolidating financial information for Outerwall Inc., the guarantor subsidiaries on a combined basis, and all non-guarantor subsidiaries on a combined basis in the following tables:

CONSOLIDATING BALANCE SHEETS
(unaudited)
	As of June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Assets
Current Assets:
Cash and cash equivalents	$	152,729		$	17,455	$	28,864		$	—		$	199,048
Accounts receivable, net of allowances	1,640			23,663		83			—			25,386
Content library	—			147,815		—			—			147,815
Prepaid expenses and other current assets	12,501			34,291		330			—			47,122
Intercompany receivables	15,212			636,566		1,207			(652,985		)	—
Total current assets	182,082			859,790		30,484			(652,985		)	419,371
Property and equipment, net	87,236			170,440		12,738			—			270,414
Deferred income taxes	—			—		2,456			—			2,456
Goodwill and other intangible assets, net	249,696			283,238		—			—			532,934
Other long-term assets	377			1,001		111			—			1,489
Investment in related parties	974,379			28,373		—			(1,002,752		)	—
Total assets	$	1,493,770		$	1,342,842	$	45,789		$	(1,655,737	)	$	1,226,664
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	8,857		$	117,574	$	223		$	—		$	126,654
Accrued payable to retailers	68,924			25,048		6,360			—			100,332
Other accrued liabilities	65,424			89,249		674			—			155,347
Current portion of long-term debt and other long-term liabilities	18,193			5		220			—			18,418
Intercompany payables	527,722			115,511		9,752			(652,985		)	—
Total current liabilities	689,120			347,387		17,229			(652,985		)	400,751
Long-term debt and other long-term liabilities	747,114			19,294		162			—			766,570
Deferred income taxes	11,634			1,784		24			—			13,442
Total liabilities	1,447,868			368,465		17,415			(652,985		)	1,180,763
Commitments and contingencies
Stockholders’ Equity:
Preferred stock	—			—		3,000			(3,000		)	—
Common stock	604,392			252,512		4,635			(371,660		)	489,879
Treasury stock	(1,149,261		)	—		—			—			(1,149,261		)
Retained earnings	591,844			721,865		21,521			(628,092		)	707,138
Accumulated other comprehensive income (loss)	(1,073		)	—		(782		)	—			(1,855		)
Total stockholders’ equity	45,902			974,377		28,374			(1,002,752		)	45,901
Total liabilities and stockholders’ equity	$	1,493,770		$	1,342,842	$	45,789		$	(1,655,737	)	$	1,226,664

CONSOLIDATING BALANCE SHEETS
(unaudited)
	As of December 31, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations and Consolidation Reclassifications			Total
Assets
Current Assets:
Cash and cash equivalents	$	160,167		$	19,372	$	43,010	$	—		$	222,549
Accounts receivable, net of allowances	3,983			33,269		1,212		—			38,464
Content library	—			188,490		—		—			188,490
Prepaid expenses and other current assets	17,720			33,049		599		—			51,368
Intercompany receivables	35,654			527,996		426		(564,076		)	—
Total current assets	217,524			802,176		45,247		(564,076		)	500,871
Property and equipment, net	97,659			204,081		14,273		—			316,013
Deferred income taxes	—			—		2,606		—			2,606
Goodwill and other intangible assets, net	249,703			290,811		—		—			540,514
Other long-term assets	747			1,293		167		—			2,207
Investment in related parties	921,456			27,798		—		(949,254		)	—
Total assets	$	1,487,089		$	1,326,159	$	62,293	$	(1,513,330	)	$	1,362,211
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	16,127		$	167,694	$	189	$	—		$	184,010
Accrued payable to retailers	71,947			30,157		12,994		—			115,098
Other accrued liabilities	57,025			82,401		2,011		—			141,437
Current portion of long-term debt and other long-term liabilities	16,832			—		299		—			17,131
Intercompany payables	459,789			85,487		18,800		(564,076		)	—
Total current liabilities	621,720			365,739		34,293		(564,076		)	457,676
Long-term debt and other long-term liabilities	873,476			19,882		159		—			893,517
Deferred income taxes	13,965			19,083		44		—			33,092
Total liabilities	1,509,161			404,704		34,496		(564,076		)	1,384,285
Commitments and contingencies
Stockholders’ Equity (Deficit):
Preferred stock	—			—		3,000		(3,000		)	—
Common stock	599,675			252,727		4,636		(371,875		)	485,163
Treasury stock	(1,151,063		)	—		—		—			(1,151,063		)
Retained earnings	530,140			668,728		18,963		(574,379		)	643,452
Accumulated other comprehensive income (loss)	(824		)	—		1,198		—			374
Total stockholders’ equity (deficit)	(22,072		)	921,455		27,797		(949,254		)	(22,074		)
Total liabilities and stockholders’ equity (deficit)	$	1,487,089		$	1,326,159	$	62,293	$	(1,513,330	)	$	1,362,211

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Three Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	73,700		$	433,859		$	10,468		$	—		$	518,027
Expenses:
Direct operating	37,633			309,105			4,843			—			351,581
Marketing	410			7,010			2			—			7,422
Research and development	—			1,317			—			—			1,317
General and administrative	11,949			35,529			203			—			47,681
Restructuring and related costs	3			398			—			—			401
Depreciation and other	6,547			26,417			1,024			—			33,988
Amortization of intangible assets	4			3,786			—			—			3,790
Total expenses	56,546			383,562			6,072			—			446,180
Operating income	17,154			50,297			4,396			—			71,847
Other income (expense), net:
Loss from equity method investments, net	(208		)	—			—			—			(208		)
Interest income (expense), net	(2,715		)	(7,539		)	(47		)	—			(10,301		)
Other, net	3,229			122			(3,128		)	—			223
Total other income (expense), net	306			(7,417		)	(3,175		)	—			(10,286		)
Income from continuing operations before income taxes	17,460			42,880			1,221			—			61,561
Income tax expense	(6,850		)	(13,944		)	(219		)	—			(21,013		)
Income from continuing operations	10,610			28,936			1,002			—			40,548
Equity in income of subsidiaries	29,938			1,002			—			(30,940		)	—
Net income (loss)	40,548			29,938			1,002			(30,940		)	40,548
Foreign currency translation adjustment(1)	(51		)	—			(1,629		)	—			(1,680		)
Comprehensive income (loss)	$	40,497		$	29,938		$	(627	)	$	(30,940	)	$	38,868

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2016.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Three Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications		Total
Revenue	$	68,687		$	465,039		$	11,643		$	—	$	545,369
Expenses:
Direct operating	35,397			328,952			5,270			—		369,619
Marketing	1,477			6,543			27			—		8,047
Research and development	1			2,038			—			—		2,039
General and administrative	11,767			36,820			196			—		48,783
Restructuring and related costs	—			—			—			—		—
Depreciation and other	8,051			36,063			1,060			—		45,174
Amortization of intangible assets	4			3,305			—			—		3,309
Goodwill impairment	—			85,890			—			—		85,890
Total expenses	56,697			499,611			6,553			—		562,861
Operating income	11,990			(34,572		)	5,090			—		(17,492		)
Other income (expense), net:
Loss from equity method investments, net	(133		)	—			—			—		(133		)
Interest income (expense), net	(12,485		)	317			(15		)	—		(12,183		)
Other, net	3,142			80			(2,580		)	—		642
Total other income (expense), net	(9,476		)	397			(2,595		)	—		(11,674		)
Income (loss) from continuing operations before income taxes	2,514			(34,175		)	2,495			—		(29,166		)
Income tax benefit (expense)	5,981			(23,736		)	(430		)	—		(18,185		)
Income (loss) from continuing operations	8,495			(57,911		)	2,065			—		(47,351		)
Income (loss) from discontinued operations, net of tax	(856		)	1,221			1,370			—		1,735
Equity in income of subsidiaries	(53,255		)	3,435			—			49,820		—
Net income (loss)	(45,616		)	(53,255		)	3,435			49,820		(45,616		)
Foreign currency translation adjustment(1)	638			—			(165		)	—		473
Comprehensive income (loss)	$	(44,978	)	$	(53,255	)	$	3,270		$	49,820	$	(45,143	)

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2015.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Six Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	135,946		$	897,436		$	20,601		$	—		$	1,053,983
Expenses:
Direct operating	71,989			646,046			9,513			—			727,548
Marketing	1,209			15,433			2			—			16,644
Research and development	—			2,362			—			—			2,362
General and administrative	22,863			72,193			395			—			95,451
Restructuring and related costs	465			3,211			—			—			3,676
Depreciation and other	12,961			55,130			2,015			—			70,106
Amortization of intangible assets	7			7,573			—			—			7,580
Total expenses	109,494			801,948			11,925			—			923,367
Operating income	26,452			95,488			8,676			—			130,616
Other income (expense), net:
Loss from equity method investments, net	(415		)	—			—			—			(415		)
Interest income (expense), net	5,232			(15,681		)	(94		)	—			(10,543		)
Other, net	5,995			509			(5,052		)	—			1,452
Total other income (expense), net	10,812			(15,172		)	(5,146		)	—			(9,506		)
Income from continuing operations before income taxes	37,264			80,316			3,530			—			121,110
Income tax expense	(14,672		)	(26,630		)	(809		)	—			(42,111		)
Income from continuing operations	22,592			53,686			2,721			—			78,999
Equity in income of subsidiaries	56,407			2,721			—			(59,128		)	—
Net income (loss)	78,999			56,407			2,721			(59,128		)	78,999
Foreign currency translation adjustment(1)	(249		)	—			(1,980		)	—			(2,229		)
Comprehensive income	$	78,750		$	56,407		$	741		$	(59,128	)	$	76,770

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2016.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Six Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	127,497		$	1,004,320		$	22,188		$	—		$	1,154,005
Expenses:
Direct operating	69,123			695,363			10,317			—			774,803
Marketing	2,991			13,449			27			—			16,467
Research and development	(83		)	4,206			—			—			4,123
General and administrative	23,823			73,115			401			—			97,339
Restructuring and related costs	551			15,300			—			—			15,851
Depreciation and other	12,700			73,046			2,114			—			87,860
Amortization of intangible assets	7			6,611			—			—			6,618
Goodwill impairment	—			85,890			—			—			85,890
Total expenses	109,112			966,980			12,859			—			1,088,951
Operating income	18,385			37,340			9,329			—			65,054
Other income (expense), net:
Loss from equity method investments, net	(265		)	—			—			—			(265		)
Interest income (expense), net	(24,881		)	692			(65		)	—			(24,254		)
Other, net	5,578			64			(7,346		)	—			(1,704		)
Total other income (expense), net	(19,568		)	756			(7,411		)	—			(26,223		)
Income (loss) from continuing operations before income taxes	(1,183		)	38,096			1,918			—			38,831
Income tax benefit (expense)	5,433			(49,046		)	(414		)	—			(44,027		)
Income (loss) from continuing operations	4,250			(10,950		)	1,504			—			(5,196		)
Income (loss) from discontinued operations, net of tax	668			(27,833		)	22,344			—			(4,821		)
Equity in income of subsidiaries	(14,935		)	23,848			—			(8,913		)	—
Net income (loss)	(10,017		)	(14,935		)	23,848			(8,913		)	(10,017		)
Foreign currency translation adjustment(1)	574			—			2,753			—			3,327
Comprehensive income (loss)	$	(9,443	)	$	(14,935	)	$	26,601		$	(8,913	)	$	(6,690	)

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2015.

CONSOLIDATING STATEMENTS OF CASH FLOWS
(unaudited)
	Six Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Operating Activities:
Net income	$	78,999		$	56,407		$	2,721		$	(59,128	)	$	78,999
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other	12,961			55,130			2,015			—			70,106
Amortization of intangible assets	7			7,573			—			—			7,580
Share-based payments expense	6,984			2,520			—			—			9,504
Deferred income taxes	(1,559		)	(17,300		)	301			—			(18,558		)
Restructuring, impairment and related costs	57			304			—			—			361
Loss from equity method investment, net	415			—			—			—			415
Amortization of deferred financing fees and debt discount	1,251			—			—			—			1,251
Gain from early extinguishment of debt	(11,446		)	—			—			—			(11,446		)
Other	(242		)	(38		)	—			—			(280		)
Equity in income of subsidiaries	(56,407		)	(2,721		)	—			59,128			—
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	2,343			9,605			1,237			—			13,185
Content library	—			40,849			—			—			40,849
Prepaid expenses and other current assets	5,229			(207		)	241			—			5,263
Other assets	—			291			42			—			333
Accounts payable	(2,539		)	(49,970		)	49			—			(52,460		)
Accrued payable to retailers	(3,022		)	(5,109		)	(6,267		)	—			(14,398		)
Other accrued liabilities	6,872			5,993			(1,344		)	—			11,521
Net cash flows from (used in) operating activities	39,903			103,327			(1,005		)	—			142,225
Investing Activities:
Purchases of property and equipment	(16,424		)	(10,989		)	(961		)	—			(28,374		)
Proceeds from sale of property and equipment	—			92			—			—			92
Investments in and advances to affiliates	104,336			(94,347		)	(9,989		)	—			—
Net cash flows from (used in) investing activities	87,912			(105,244		)	(10,950		)	—			(28,282		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	176,000			—			—			—			176,000
Principal payments on Credit Facility	(244,000		)	—			—			—			(244,000		)
Repurchases of notes	(47,507		)	—			—			—			(47,507		)
Dividends paid	(15,122		)	—			—			—			(15,122		)
Principal payments on capital lease obligations and other debt	(2,902		)	—			(175		)	—			(3,077		)
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(1,472		)	—			—			—			(1,472		)
Net cash flows used in financing activities	(135,003		)	—			(175		)	—			(135,178		)
Effect of exchange rate changes on cash	(250		)	—			(2,016		)	—			(2,266		)
Increase (decrease) in cash and cash equivalents	(7,438		)	(1,917		)	(14,146		)	—			(23,501		)
Cash and cash equivalents:
Beginning of period	160,167			19,372			43,010			—			222,549
End of period	$	152,729		$	17,455		$	28,864		$	—		$	199,048

CONSOLIDATING STATEMENTS OF CASH FLOWS
(unaudited)
	Six Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Operating Activities:
Net income	$	(10,017	)	$	(14,935	)	$	23,848		$	(8,913	)	$	(10,017	)
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other	12,700			74,892			6,126			—			93,718
Amortization of intangible assets	7			6,611			44			—			6,662
Share-based payments expense	3,681			3,511			—			—			7,192
Windfall excess tax benefits related to share-based payments	(686		)	—			—			—			(686		)
Deferred income taxes	(8,029		)	(3,903		)	7,993			—			(3,939		)
Restructuring, impairment and related costs	136			1,544			—			—			1,680
Loss from equity method investments, net	265			—			—			—			265
Amortization of deferred financing fees and debt discount	1,385			—			—			—			1,385
Goodwill impairment	—			85,890			—			—			85,890
Other	(265		)	176			(727		)	—			(816		)
Equity in income of subsidiaries	14,935			(23,848		)	—			8,913			—
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	(357		)	14,773			661			—			15,077
Content library	—			31,236			3,423			—			34,659
Prepaid expenses and other current assets	(17,957		)	(4,455		)	330			—			(22,082		)
Other assets	47			245			30			—			322
Accounts payable	(2,022		)	(13,438		)	(2,237		)	—			(17,697		)
Accrued payable to retailers	479			(10,682		)	(1,307		)	—			(11,510		)
Other accrued liabilities	1,674			426			(988		)	—			1,112
Net cash flows from (used in) operating activities(1)	(4,024		)	148,043			37,196			—			181,215
Investing Activities:
Purchases of property and equipment	(13,869		)	(25,818		)	(530		)	—			(40,217		)
Proceeds from sale of property and equipment	17			2,923			—			—			2,940
Investments in and advances to affiliates	161,753			(119,126		)	(42,627		)	—			—
Net cash flows from (used in) investing activities(1)	147,901			(142,021		)	(43,157		)	—			(37,277		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	112,000			—			—			—			112,000
Principal payments on Credit Facility	(185,750		)	—			—			—			(185,750		)
Dividends paid	(11,019		)	—			—			—			(11,019		)
Repurchases of common stock	(62,731		)	—			—			—			(62,731		)
Principal payments on capital lease obligations and other debt	(6,080		)	—			(198		)	—			(6,278		)
Windfall excess tax benefits related to share-based payments	686			—			—			—			686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(1,201		)	—			—			—			(1,201		)
Net cash flows used in financing activities(1)	(154,095		)	—			(198		)	—			(154,293		)
Effect of exchange rate changes on cash	574			—			4,793			—			5,367
Decrease in cash and cash equivalents	(9,644		)	6,022			(1,366		)	—			(4,988		)
Cash and cash equivalents:
Beginning of period	180,889			17,939			43,868			—			242,696
End of period	$	171,245		$	23,961		$	42,502		$	—		$	237,708

(1) During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in all periods presented. See Note 10: Discontinued Operationsfor cash flow disclosures related to our discontinued Redbox operations in Canada.

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Income Taxes From Continuing Operations

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes From Continuing Operations

Note 16: Income Taxes From Continuing Operations

Our effective tax rate from continuing operations was 34.1% and (62.4)% for the three months endedJune 30, 2016 and 2015, respectively, and 34.8% and 113.4% for the six months endedJune 30, 2016 and 2015, respectively.

Our effective tax rate for the three months endedJune 30, 2016, was lower than the U.S. Federal statutory rate of 35.0% primarily due to the domestic production activities deduction, partially offset by state income taxes.

Our effective tax rate for the three months endedJune 30, 2015, was lower than the U.S. Federal statutory rate of 35.0% primarily due to an $85.9 million non-tax deductible goodwill impairment charge that was recorded in the second quarter of 2015 and state income taxes, partially offset by the domestic production activities deduction and a net decrease in valuation allowances related to capital loss carryforwards and state tax credit carryforwards.

Our effective tax rate for the six months endedJune 30, 2016, was lower than the U.S. Federal statutory rate of 35.0% primarily due to the domestic production activities deduction, partially offset by state income taxes.

Our effective tax rate for the six months endedJune 30, 2015, was higher than the U.S. Federal statutory rate of 35.0% primarily due to an $85.9 million non-tax deductible goodwill impairment charge that was recorded in the second quarter of 2015 and state income taxes, partially offset by the domestic production activities deduction.

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Subsequent Events

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

Note 17: Subsequent Events

On July 24, 2016, the Board declared a quarterly cash dividend of $0.60 per share to be paid on September 6, 2016, to all stockholders of record as of the close of business on August 23, 2016.

Merger Agreement

On July 24, 2016, the company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aspen Parent, Inc., a Delaware corporation (“Parent”), Aspen Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Outerwall Merger Sub”), Redwood Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Redbox Merger Sub”), and Redbox Automated Retail, LLC, a Delaware limited liability company and wholly-owned subsidiary of the company (“Redbox”), providing for the acquisition of the company by Parent in an all cash transaction, consisting of a tender offer, followed by a subsequent back-end merger of Outerwall Merger Sub with and into the company (the “Outerwall Merger”), followed by the merger of Redbox Merger Sub with and into Redbox (the “Redbox Merger” and, together with the Outerwall Merger, the “Mergers”). Parent and Merger Sub are affiliates of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”).

Under the terms of the Merger Agreement, Parent will cause Outerwall Merger Sub to commence a cash tender offer (the “Offer”) for all of the company’s outstanding shares of common stock at a purchase price of $52.00 per share net to the seller in cash (the “Offer Price”), without interest and subject to any withholding taxes. The consummation of the Offer is conditioned on, among other things, (1) shares of common stock having been validly tendered and not properly withdrawn that represent, together with the shares of common stock then owned by Outerwall Merger Sub, at least a majority of the then outstanding shares, (2) the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period, (3) the accuracy of the company’s representations and warranties in the Merger Agreement, (4) compliance by the company with its obligations, agreements and covenants in the Merger Agreement, (5) other than the company’s regular quarterly cash dividend for the third quarter of 2016, the absence of any declaration or payment of any dividend or distribution on shares of capital stock of the company following the date of the Merger Agreement, (6) the absence of any authorization or making of any purchases of capital stock of the company, and (7) other customary conditions.

Following the consummation of the Offer, subject to the satisfaction or waiver of certain customary conditions set forth in the Merger Agreement, the Outerwall Merger will be effected under Delaware law without a meeting or vote of the Company’s stockholders (the “Effective Time”). At the Effective Time, each share of common stock issued and outstanding immediately prior to the Effective Time (other than shares (1) owned by the company or any of its subsidiaries, (2) owned by Parent or Outerwall Merger Sub or (3) owned by any stockholder who is entitled to demand and properly demands the appraisal of such shares) will be automatically cancelled and converted into the right to receive the Offer Price, without interest and subject to any withholding taxes. After the closing of the Outerwall Merger, the company will be a wholly owned subsidiary of Parent and will cease to be a publicly-traded company.

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Basis of Presentation and Principles of Consolidation (Policies)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Accounting Pronouncements Adopted and Not Adopted During the Current Year, Policy

Accounting Pronouncements Adopted During the Current Year

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, instead of as a deferred charge. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (Subtopic 835-30). This ASU provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We adopted this guidance on January 1, 2016, which resulted in the reclassification of $3.8 million of unamortized discount and deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Other than this reclassification, our adoption of ASU 2015-03 and ASU 2015-15 did not have a material impact to our consolidated financial statements and related disclosures. See Note 7: Debt and Other Long-Term Liabilitiesfor more information.

In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. We adopted this ASU on January 1, 2016. Our adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU describes how an entity’s management should assess whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management should consider both quantitative and qualitative factors in making its assessment.

If after considering management’s plans, substantial doubt about an entity’s going concern is alleviated, an entity shall disclose information in the footnotes that enables the users of the financial statements to understand the events that raised the going concern and how management’s plan alleviated this concern.

If after considering management’s plans, substantial doubt about an entity’s going concern is not alleviated, the entity shall disclose in the footnotes indicating that a substantial doubt about the entity’s going concern exists within one year of the date of the issued financial statements. Additionally, the entity shall disclose the events that led to this going concern and management’s plans to mitigate them.

We adopted this ASU on January 1, 2016. Our adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

Accounting Pronouncements Not Yet Adopted

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on our consolidated financial statements, from those disclosed in our 2015 Annual Report on Form 10-K, except for the following:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this ASU do not change the core revenue recognition principles, but provide guidance on certain narrow areas and add practical expedients. Early adoption is permitted to the original effective date of annual reporting periods beginning after December 15, 2016 for ASU 2014-09 and the related amendments and may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently in the process of evaluating the impact of ASU 2014-09 and the related amendments.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This ASU changes how companies account for certain aspects of share-based payment awards to employees, including accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. We are currently evaluating the impact of adopting this ASU and expect this standard to not have a significant impact on our consolidated financial statements and related disclosures, which is effective for us in our fiscal year beginning January 1, 2017. Early adoption is permitted.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. We are currently evaluating the impact of adopting this ASU and expect this standard to have a significant impact on our consolidated financial statements and related disclosures, which is effective for us in our fiscal year beginning January 1, 2019. Early adoption is permitted.

Earnings Per Share, Policy

The Two-Class Method is an earnings allocation formula that treats a participating security, as having rights to earnings that otherwise would have been available to common shareholders and assumes all earnings for the period are distributed. Our unvested restricted stock awards granted are participating securities as they entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock.

Segment Reporting, Policy

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 (loss) before depreciation, amortization and other, and share-based compensation granted to executives, non-employee directors and employees (“segment operating income (loss)”). Segment operating income (loss) 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.

Fair Value of Financial Instruments, Policy

To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:

• Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; or

• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

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Organization and Business (Tables)

6 Months Ended

Jun. 30, 2016

Organization And Business [Abstract]

Schedule Of Kiosk And Location Count

Our kiosk and location counts as of June 30, 2016, are as follows:

	Kiosks	Locations
Redbox	39,970	32,710
Coinstar	20,810	19,560
ecoATM	2,460	2,230
Total	63,240	54,500

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Prepaid Expenses and Other Current Assets and Other Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure Text Block Supplement [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets:

Dollars in thousands	June 30, 2016		December 31, 2015
Spare parts	$	11,616	$	9,780
Licenses	5,744		6,394
Electronic devices inventory	10,427		7,846
Income taxes receivable	1,953		9,517
Prepaid rent	1,365		1,043
DVD cases and labels	1,648		1,371
Other	14,369		15,417
Total prepaid and other current assets	$	47,122	$	51,368

Schedule of Other Accrued Liabilities

Other accrued liabilities consist of the following:

Dollars in thousands	June 30, 2016		December 31, 2015
Payroll related expenses	$	34,779	$	40,676
Studio revenue share and other content related expenses	36,052		28,964
Business taxes	15,591		16,080
Insurance	13,549		13,594
Deferred revenue	12,498		11,201
Income taxes payable	13,372		16
Accrued interest expense	6,192		6,913
Accrued early lease termination and sublease expenses	3,859		4,991
Service contract provider expenses	5,288		4,070
Deferred rent expense	2,044		1,728
Other	12,123		13,204
Total other accrued liabilities	$	155,347	$	141,437

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment

Dollars in thousands	June 30, 2016			December 31, 2015
Kiosks and components	$	1,162,872		$	1,163,210
Computers, servers, and software	195,809			193,507
Leasehold improvements	22,497			22,663
Office furniture and equipment	7,248			7,047
Vehicles	4,585			5,118
Property and equipment, at cost	1,393,011			1,391,545
Accumulated depreciation and amortization	(1,122,597		)	(1,075,532		)
Property and equipment, net	$	270,414		$	316,013

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The carrying amount of goodwill was as follow:

Dollars in thousands	June 30, 2016		December 31, 2015
Goodwill	$	473,417	$	473,417

Schedule of Finite-Lived Intangible Assets

The gross amount of our other intangible assets and the related accumulated amortization were as follows:

Dollars in thousands	Amortization Period	June 30, 2016			December 31, 2015
Retailer relationships	5 - 10 years	$	53,295		$	53,295
Accumulated amortization		(29,217		)	(27,212		)
Retailer relationships, net		24,078			26,083
Developed technology	3 - 5 years	36,000			36,000
Accumulated amortization		(20,277		)	(16,544		)
Developed technology, net		15,723			19,456
Trade names	5 - 10 years	20,000			20,000
Accumulated amortization		(4,433		)	(3,133		)
Trade names, net		15,567			16,867
Other	1 - 40 years	10,800			10,800
Accumulated amortization		(6,651		)	(6,109		)
Other, net		4,149			4,691
Total intangible assets, net		$	59,517		$	67,097

Finite-lived Intangible Assets Amortization Expense

Amortization expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Retailer relationships	$	1,002	$	1,003	$	2,005	$	2,006
Developed technology	1,867		1,700		3,733		3,400
Trade names	650		300		1,300		600
Other	271		306		542		656
Total amortization of intangible assets	3,790		3,309		7,580		6,662
Less: amortization included in discontinued operations	—		—		—		(44		)
Total amortization of intangible assets from continuing operations	$	3,790	$	3,309	$	7,580	$	6,618

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Assuming no future impairment, the expected future amortization as of June 30, 2016, is as follows:

Dollars in thousands	Total
Remainder of 2016	$	7,580
2017	15,160
2018	11,598
2019	6,213
2020	5,819
Thereafter	13,147
Total expected amortization	$	59,517

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Debt and Other Long-Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Long-term Debt, Unclassified [Abstract]

Schedule of Debt and Other Long Term Liabilities

	Debt															Other Liabilities							Total
	Senior Notes						Credit Facility						Total Debt			Capital Lease Obligations			Asset Retirement Obligations		Other Long-term Liabilities
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of June 30, 2016:
Principal	$	320,614		$	228,598		$	129,375		$	80,000		$	758,587
Unamortized discount and deferred financing fees(1)	(2,922		)	(3,234		)	(224		)	(1,968		)	(8,348		)
Total	317,692			225,364			129,151			78,032			750,239			$	5,531		$	9,438	$	19,780	$	784,988
Less: current portion	—			—			(15,000		)	—			(15,000		)	(3,418		)	—		—		(18,418		)
Total long-term portion	$	317,692		$	225,364		$	114,151		$	78,032		$	735,239		$	2,113		$	9,438	$	19,780	$	766,570

	Debt															Other Liabilities							Total
	Senior Notes						Credit Facility						Total Debt			Capital Lease Obligations			Asset Retirement Obligations		Other Long-term Liabilities
Dollars in thousands	Senior Unsecured Notes due 2019			Senior Unsecured Notes due 2021			Term Loans			Revolving Line of Credit
As of December 31, 2015:
Principal	$	350,000		$	258,908		$	136,875		$	140,500		$	886,283
Unamortized discount and deferred financing fees(1)	(3,770		)	(4,083		)	(260		)	(2,300		)	(10,413		)
Total	346,230			254,825			136,615			138,200			875,870			$	5,889		$	9,412	$	19,477	$	910,648
Less: current portion	—			—			(13,125		)	—			(13,125		)	(4,006		)	—		—		(17,131		)
Total long-term portion	$	346,230		$	254,825		$	123,490		$	138,200		$	862,745		$	1,883		$	9,412	$	19,477	$	893,517

(1) As described in Note 1: Basis of Presentation and Principles of Consolidation, we adopted ASU 2015-03 and 2015-15 in the first quarter of 2016 and have applied the guidance to our Senior Notes and Credit Facility. Under this guidance, we are now presenting unamortized deferred financing fees as a direct deduction from the associated debt liability. Historically, unamortized deferred financing fees were included in other non-current assets. This adoption resulted in the reclassification of $3.8 million of unamortized deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Deferred financing fees are amortized on a straight line basis over the life of the related loan.

Interest Expense Disclosure

Interest Expense

Dollars in thousands	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Cash interest expense	$	10,141		$	11,499	$	20,795		$	22,894
Amortization of debt discount and deferred financing fees	613			692		1,251			1,385
Total cash and non-cash interest expense	10,754			12,191		22,046			24,279
Gain from early extinguishment of debt	(418		)	—		(11,446		)	—
Total interest expense	$	10,336		$	12,191	$	10,600		$	24,279

Schedule of Maturities of Term Loan

Required principal amortization payments under the Term Loan are as follows:

Dollars in thousands	Repayment Amount
Remainder of 2016	$	7,500
2017	15,000
2018	20,625
2019	86,250
Total	$	129,375

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Share-Based Payments (Tables)

6 Months Ended

Jun. 30, 2016

Share-based Compensation [Abstract]

Summary Of Share Based Payments

Certain information regarding our share-based payments is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Share-based payments expense:
Share-based compensation - stock options	$	33	$	40	$	80	$	181
Share-based compensation - restricted stock	4,452		2,039		7,982		4,598
Share-based payments for content arrangements	813		1,241		1,628		2,482
Total share-based payments expense	$	5,298	$	3,320	$	9,690	$	7,261
Tax benefit on share-based payments expense	$	2,066	$	1,289	$	3,774	$	2,807

	June 30, 2016
Dollars in thousands	Unrecognized Share-Based Payments Expense		Weighted-Average Remaining Life
Unrecognized share-based payments expense:
Share-based compensation - stock options	$	83	0.7 years
Share-based compensation - restricted stock	18,349		2.4 years
Share-based payments for content arrangements	1,264		0.4 years
Total unrecognized share-based payments expense	$	19,696

Summary of Restricted Stock Award Activity

The following table presents a summary of restricted stock award activity for 2016:

Shares in thousands	Restricted Stock Awards		Weighted Average Grant Date Fair Value
Non-vested, December 31, 2015	556		$	65.86
Granted	746		26.86
Vested	(155	)	64.45
Forfeited	(148	)	50.73
Non-vested, June 30, 2016	999		39.21

Schedule of Expected Amortization Expense of Share-Based Compensation

The expected future recognition of expense associated with the rights to receive cash as of June 30, 2016 is as follows:

Dollars in thousands	Expected Expense
Remainder of 2016	$	594
2017	146
Remaining total expected expense	$	740

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

The total amount incurred for restructuring and related costs from continuing operations is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Dollars in thousands	2016		2015		2016		2015
Redbox
Severance	$	14	$	—	$	2,125	$	3,701
Lease termination and related costs (excluding related asset impairments)	—		—		297		4,567
Total Redbox restructuring costs	14		—		2,422		8,268
Coinstar
Severance	3		—		408		492
Lease termination and related costs (excluding related asset impairments)	—		—		57		24
Total Coinstar restructuring costs	3		—		465		516
ecoATM
Severance	384		—		782		127
Lease termination and related costs (excluding related asset impairments)	—		—		7		—
Total ecoATM restructuring costs	384		—		789		127
Total restructuring costs in continuing operations	401		—		3,676		8,911
Impairment of lease related assets	—		—		—		6,940
Total restructuring and related costs from continuing operations	$	401	$	—	$	3,676	$	15,851

Schedule of Restructuring Reserve by Type of Cost

A reconciliation of the beginning and ending liability balance by expense type is as follows:

Dollars in thousands	Severance Expense			Lease Termination Costs
Beginning Balance - January 1, 2016	$	1,385		$	4,991
Costs charged to expense	3,315			361
Costs paid or otherwise settled	(4,629		)	(1,493		)
Ending Balance - June 30, 2016	$	71		$	3,859

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Components of Discontinued Operations Included in Statements of Comprehensive Income

The following table sets forth the components of discontinued operations included in our Consolidated Statements of Comprehensive Income:

	Three Months Ended			Six Months Ended
Dollars in thousands	June 30, 2015			June 30, 2015
Major classes of line items constituting pretax loss of discontinued operations:
Revenue	$	—		$	1,557
Direct operating	35			4,304
Marketing	(17		)	112
General and administrative	35			154
Restructuring and related costs	—			522
Depreciation and other	—			5,858
Amortization of intangible assets	—			44
Other expense, net	166			(4,329		)
Pretax gain (loss) of discontinued operations related to major classes of pretax loss	113			(13,766		)
Income tax benefit(1)	1,622			8,945
Net income (loss) on discontinued operations	$	1,735		$	(4,821	)

(1) The income tax benefit for the three months and six months ended June 30, 2015 includes a benefit on the rate differential between the U.S. and Canada.

Significant Operating and Investing Cash Flows - Discontinued Operations

Significant operating and investing cash flows of Redbox Canada were as follows:

	Three Months Ended			Six Months Ended
Dollars in thousands	June 30, 2015			June 30, 2015
Net income (loss) on discontinued operations	$	1,735		$	(4,821	)
Adjustments to reconcile net gain (loss) to net cash flows from operating activities:
Depreciation and amortization	—			5,902
Content library	148			3,212
Prepaid and other current assets	690			1,234
Accounts payable	(1,095		)	(2,716		)
Accrued payables to retailers	—			(155		)
Other accrued liabilities	(585		)	(617		)
Net cash flows from operating activities	$	893		$	2,039
Investing activities:
Purchase of property, plant and equipment	—			(278		)
Total cash flows used in investing activities	$	—		$	(278	)

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings Per Share

Our calculation of basic and diluted earnings per share is as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
In thousands, except per share data	2016			2015			2016			2015
Numerator
Income (loss) from continuing operations	$	40,548		$	(47,351	)	$	78,999		$	(5,196	)
Income (loss) from discontinued operations, net of tax	—			1,735			—			(4,821		)
Net income (loss)	$	40,548		$	(45,616	)	$	78,999		$	(10,017	)
Income from continuing operations	$	40,548		$	(47,351	)	$	78,999		$	(5,196	)
Dividends and undistributed income allocated to participating shares	(1,933		)	(121		)	(3,334		)	(269		)
Income from continuing operations to common shares - basic	38,615			(47,472		)	75,665			(5,465		)
Effect of reallocating undistributed income from continuing operations to participating shares	11			—			16			—
Income from continuing operations to common shares - diluted	$	38,626		$	(47,472	)	$	75,681		$	(5,465	)
Denominator
Weighted average common shares - basic	16,149			17,848			16,122			18,057
Dilutive effect of share-based payment awards	95			—			94			—
Weighted average common shares - diluted(1)	16,244			17,848			16,216			18,057
Basic earnings (loss) per common share:
Continuing operations	$	2.39		$	(2.66	)	$	4.69		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Basic earnings (loss) per common share	$	2.39		$	(2.56	)	$	4.69		$	(0.57	)
Diluted earnings (loss) per common share:
Continuing operations	$	2.38		$	(2.66	)	$	4.67		$	(0.30	)
Discontinued operations	—			0.10			—			(0.27		)
Diluted earnings (loss) per common share	$	2.38		$	(2.56	)	$	4.67		$	(0.57	)
Stock options and share-based awards not included in diluted EPS calculation because their effect would have be antidilutive	248			14			121			16

(1) Participating securities were included in the calculation of diluted earnings per share using the two-class method, as this calculation was more dilutive than the calculation using the treasury stock method.

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Business Segments and Enterprise-Wide Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Dollars in thousands
Three Months Ended June 30, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	389,059		$	84,168		$	44,800		$	—		$	—		$	518,027
Expenses:
Direct operating	271,731			42,095			37,291			83			381			351,581
Marketing	3,919			399			3,058			7			39			7,422
Research and development	—			—			1,194			—			123			1,317
General and administrative	31,325			8,494			3,573			2			4,287			47,681
Restructuring and related costs (Note 9)	14			3			384			—			—			401
Segment operating income (loss)	82,070			33,177			(700		)	(92		)	(4,830		)	109,625
Less: depreciation, amortization and other	(21,806		)	(7,595		)	(8,398		)	21			—			(37,778		)
Operating income (loss)	60,264			25,582			(9,098		)	(71		)	(4,830		)	71,847
Loss from equity method investments, net	—			—			—			—			(208		)	(208		)
Interest expense, net	—			—			—			—			(10,301		)	(10,301		)
Other, net	—			—			—			—			223			223
Income (loss) from continuing operations before income taxes	$	60,264		$	25,582		$	(9,098	)	$	(71	)	$	(15,116	)	$	61,561

Dollars in thousands
Three Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	438,976		$	80,279		$	26,062		$	52		$	—		$	545,369
Expenses:
Direct operating	301,444			39,358			27,227			1,078			512			369,619
Marketing	4,266			1,232			2,149			258			142			8,047
Research and development	—			—			1,549			1			489			2,039
General and administrative	34,336			7,768			2,094			2,644			1,941			48,783
Goodwill impairment	—			—			85,890			—			—			85,890
Segment operating income (loss)	98,930			31,921			(92,847		)	(3,929		)	(3,084		)	30,991
Less: depreciation, amortization and other	(33,063		)	(8,437		)	(6,305		)	(678		)	—			(48,483		)
Operating income (loss)	65,867			23,484			(99,152		)	(4,607		)	(3,084		)	(17,492		)
Loss from equity method investments, net	—			—			—			—			(133		)	(133		)
Interest expense, net	—			—			—			—			(12,183		)	(12,183		)
Other, net	—			—			—			—			642			642
Income (loss) from continuing operations before income taxes	$	65,867		$	23,484		$	(99,152	)	$	(4,607	)	$	(14,758	)	$	(29,166	)

Dollars in thousands
Six Months Ended June 30, 2016	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	810,547		$	156,547		$	86,889		$	—		$	—		$	1,053,983
Expenses:
Direct operating	570,732			80,740			75,185			169			722			727,548
Marketing	7,743			1,174			7,638			12			77			16,644
Research and development	—			—			2,129			—			233			2,362
General and administrative	63,354			16,358			7,575			349			7,815			95,451
Restructuring and related costs (Note 9)	2,422			465			789			—			—			3,676
Segment operating income (loss)	166,296			57,810			(6,427		)	(530		)	(8,847		)	208,302
Less: depreciation, amortization and other	(46,101		)	(15,004		)	(16,602		)	21			—			(77,686		)
Operating income (loss)	120,195			42,806			(23,029		)	(509		)	(8,847		)	130,616
Loss from equity method investments, net	—			—			—			—			(415		)	(415		)
Interest expense, net	—			—			—			—			(10,543		)	(10,543		)
Other, net	—			—			—			—			1,452			1,452
Income (loss) from continuing operations before income taxes	$	120,195		$	42,806		$	(23,029	)	$	(509	)	$	(18,353	)	$	121,110

Dollars in thousands
Six Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	958,509		$	149,609		$	45,811		$	76		$	—		$	1,154,005
Expenses:
Direct operating	644,379			76,621			50,033			2,269			1,501			774,803
Marketing	9,091			2,410			3,879			578			509			16,467
Research and development	—			—			3,005			(84		)	1,202			4,123
General and administrative	68,071			15,563			4,062			5,151			4,492			97,339
Restructuring and related costs (Note 9)	15,174			550			127			—			—			15,851
Goodwill impairment	—			—			85,890			—			—			85,890
Segment operating income (loss)	221,794			54,465			(101,185		)	(7,838		)	(7,704		)	159,532
Less: depreciation, amortization and other	(64,670		)	(16,255		)	(12,207		)	(1,346		)	—			(94,478		)
Operating income (loss)	157,124			38,210			(113,392		)	(9,184		)	(7,704		)	65,054
Loss from equity method investments, net	—			—			—			—			(265		)	(265		)
Interest expense, net	—			—			—			—			(24,254		)	(24,254		)
Other, net	—			—			—			—			(1,704		)	(1,704		)
Income (loss) from continuing operations before income taxes	$	157,124		$	38,210		$	(113,392	)	$	(9,184	)	$	(33,927	)	$	38,831

Significant Retailer Relationships

Kiosks at the following retailers accounted for 10% or more of our consolidated revenue:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Wal-Mart Stores Inc.	16.7	%	16.4	%	16.4	%	16.4	%
Walgreen Co.	12.4	%	13.5	%	13.1	%	14.0	%
The Kroger Company	9.6	%	10.0	%	9.6	%	9.9	%

XML

Fair Value (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured and Reported at Fair Value on a Recurring Basis

The following table presents the fair values of our money market demand accounts and investment grade fixed income securities as of the dates specified below:

	Level 1
Dollars in thousands	June 30, 2016		December 31, 2015
Money market demand accounts and investment grade fixed income securities	$	5,056	$	2,743

Fair Value of the 2019 Notes and 2021 Notes

The following table presents the approximate fair values of the 2019 Notes and 2021 Notes as of the dates specified below:

	Level 2
Dollars in thousands	June 30, 2016		December 31, 2015
2019 Notes	$	293,000	$	312,000
2021 Notes	$	194,000	$	213,000

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Contractual Obligation, Fiscal Year Maturity Schedule

Total estimated movie content commitments as of June 30, 2016, is presented in the following table:

Dollars in thousands
	Total		Remaining in 2016		2017		2018
Total estimated movie content commitments	$	460,681	$	226,902	$	224,136	$	9,643

XML

Guarantor Subsidiaries (Tables)

6 Months Ended

Jun. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Consolidating Balance Sheets

CONSOLIDATING BALANCE SHEETS
(unaudited)
	As of June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Assets
Current Assets:
Cash and cash equivalents	$	152,729		$	17,455	$	28,864		$	—		$	199,048
Accounts receivable, net of allowances	1,640			23,663		83			—			25,386
Content library	—			147,815		—			—			147,815
Prepaid expenses and other current assets	12,501			34,291		330			—			47,122
Intercompany receivables	15,212			636,566		1,207			(652,985		)	—
Total current assets	182,082			859,790		30,484			(652,985		)	419,371
Property and equipment, net	87,236			170,440		12,738			—			270,414
Deferred income taxes	—			—		2,456			—			2,456
Goodwill and other intangible assets, net	249,696			283,238		—			—			532,934
Other long-term assets	377			1,001		111			—			1,489
Investment in related parties	974,379			28,373		—			(1,002,752		)	—
Total assets	$	1,493,770		$	1,342,842	$	45,789		$	(1,655,737	)	$	1,226,664
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	8,857		$	117,574	$	223		$	—		$	126,654
Accrued payable to retailers	68,924			25,048		6,360			—			100,332
Other accrued liabilities	65,424			89,249		674			—			155,347
Current portion of long-term debt and other long-term liabilities	18,193			5		220			—			18,418
Intercompany payables	527,722			115,511		9,752			(652,985		)	—
Total current liabilities	689,120			347,387		17,229			(652,985		)	400,751
Long-term debt and other long-term liabilities	747,114			19,294		162			—			766,570
Deferred income taxes	11,634			1,784		24			—			13,442
Total liabilities	1,447,868			368,465		17,415			(652,985		)	1,180,763
Commitments and contingencies
Stockholders’ Equity:
Preferred stock	—			—		3,000			(3,000		)	—
Common stock	604,392			252,512		4,635			(371,660		)	489,879
Treasury stock	(1,149,261		)	—		—			—			(1,149,261		)
Retained earnings	591,844			721,865		21,521			(628,092		)	707,138
Accumulated other comprehensive income (loss)	(1,073		)	—		(782		)	—			(1,855		)
Total stockholders’ equity	45,902			974,377		28,374			(1,002,752		)	45,901
Total liabilities and stockholders’ equity	$	1,493,770		$	1,342,842	$	45,789		$	(1,655,737	)	$	1,226,664

CONSOLIDATING BALANCE SHEETS
(unaudited)
	As of December 31, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations and Consolidation Reclassifications			Total
Assets
Current Assets:
Cash and cash equivalents	$	160,167		$	19,372	$	43,010	$	—		$	222,549
Accounts receivable, net of allowances	3,983			33,269		1,212		—			38,464
Content library	—			188,490		—		—			188,490
Prepaid expenses and other current assets	17,720			33,049		599		—			51,368
Intercompany receivables	35,654			527,996		426		(564,076		)	—
Total current assets	217,524			802,176		45,247		(564,076		)	500,871
Property and equipment, net	97,659			204,081		14,273		—			316,013
Deferred income taxes	—			—		2,606		—			2,606
Goodwill and other intangible assets, net	249,703			290,811		—		—			540,514
Other long-term assets	747			1,293		167		—			2,207
Investment in related parties	921,456			27,798		—		(949,254		)	—
Total assets	$	1,487,089		$	1,326,159	$	62,293	$	(1,513,330	)	$	1,362,211
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	16,127		$	167,694	$	189	$	—		$	184,010
Accrued payable to retailers	71,947			30,157		12,994		—			115,098
Other accrued liabilities	57,025			82,401		2,011		—			141,437
Current portion of long-term debt and other long-term liabilities	16,832			—		299		—			17,131
Intercompany payables	459,789			85,487		18,800		(564,076		)	—
Total current liabilities	621,720			365,739		34,293		(564,076		)	457,676
Long-term debt and other long-term liabilities	873,476			19,882		159		—			893,517
Deferred income taxes	13,965			19,083		44		—			33,092
Total liabilities	1,509,161			404,704		34,496		(564,076		)	1,384,285
Commitments and contingencies
Stockholders’ Equity (Deficit):
Preferred stock	—			—		3,000		(3,000		)	—
Common stock	599,675			252,727		4,636		(371,875		)	485,163
Treasury stock	(1,151,063		)	—		—		—			(1,151,063		)
Retained earnings	530,140			668,728		18,963		(574,379		)	643,452
Accumulated other comprehensive income (loss)	(824		)	—		1,198		—			374
Total stockholders’ equity (deficit)	(22,072		)	921,455		27,797		(949,254		)	(22,074		)
Total liabilities and stockholders’ equity (deficit)	$	1,487,089		$	1,326,159	$	62,293	$	(1,513,330	)	$	1,362,211

Consolidating Statements of Comprehensive Income

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Three Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	73,700		$	433,859		$	10,468		$	—		$	518,027
Expenses:
Direct operating	37,633			309,105			4,843			—			351,581
Marketing	410			7,010			2			—			7,422
Research and development	—			1,317			—			—			1,317
General and administrative	11,949			35,529			203			—			47,681
Restructuring and related costs	3			398			—			—			401
Depreciation and other	6,547			26,417			1,024			—			33,988
Amortization of intangible assets	4			3,786			—			—			3,790
Total expenses	56,546			383,562			6,072			—			446,180
Operating income	17,154			50,297			4,396			—			71,847
Other income (expense), net:
Loss from equity method investments, net	(208		)	—			—			—			(208		)
Interest income (expense), net	(2,715		)	(7,539		)	(47		)	—			(10,301		)
Other, net	3,229			122			(3,128		)	—			223
Total other income (expense), net	306			(7,417		)	(3,175		)	—			(10,286		)
Income from continuing operations before income taxes	17,460			42,880			1,221			—			61,561
Income tax expense	(6,850		)	(13,944		)	(219		)	—			(21,013		)
Income from continuing operations	10,610			28,936			1,002			—			40,548
Equity in income of subsidiaries	29,938			1,002			—			(30,940		)	—
Net income (loss)	40,548			29,938			1,002			(30,940		)	40,548
Foreign currency translation adjustment(1)	(51		)	—			(1,629		)	—			(1,680		)
Comprehensive income (loss)	$	40,497		$	29,938		$	(627	)	$	(30,940	)	$	38,868

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2016.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Three Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications		Total
Revenue	$	68,687		$	465,039		$	11,643		$	—	$	545,369
Expenses:
Direct operating	35,397			328,952			5,270			—		369,619
Marketing	1,477			6,543			27			—		8,047
Research and development	1			2,038			—			—		2,039
General and administrative	11,767			36,820			196			—		48,783
Restructuring and related costs	—			—			—			—		—
Depreciation and other	8,051			36,063			1,060			—		45,174
Amortization of intangible assets	4			3,305			—			—		3,309
Goodwill impairment	—			85,890			—			—		85,890
Total expenses	56,697			499,611			6,553			—		562,861
Operating income	11,990			(34,572		)	5,090			—		(17,492		)
Other income (expense), net:
Loss from equity method investments, net	(133		)	—			—			—		(133		)
Interest income (expense), net	(12,485		)	317			(15		)	—		(12,183		)
Other, net	3,142			80			(2,580		)	—		642
Total other income (expense), net	(9,476		)	397			(2,595		)	—		(11,674		)
Income (loss) from continuing operations before income taxes	2,514			(34,175		)	2,495			—		(29,166		)
Income tax benefit (expense)	5,981			(23,736		)	(430		)	—		(18,185		)
Income (loss) from continuing operations	8,495			(57,911		)	2,065			—		(47,351		)
Income (loss) from discontinued operations, net of tax	(856		)	1,221			1,370			—		1,735
Equity in income of subsidiaries	(53,255		)	3,435			—			49,820		—
Net income (loss)	(45,616		)	(53,255		)	3,435			49,820		(45,616		)
Foreign currency translation adjustment(1)	638			—			(165		)	—		473
Comprehensive income (loss)	$	(44,978	)	$	(53,255	)	$	3,270		$	49,820	$	(45,143	)

(1) Foreign currency translation adjustment had no tax effect for the three months endedJune 30, 2015.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Six Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	135,946		$	897,436		$	20,601		$	—		$	1,053,983
Expenses:
Direct operating	71,989			646,046			9,513			—			727,548
Marketing	1,209			15,433			2			—			16,644
Research and development	—			2,362			—			—			2,362
General and administrative	22,863			72,193			395			—			95,451
Restructuring and related costs	465			3,211			—			—			3,676
Depreciation and other	12,961			55,130			2,015			—			70,106
Amortization of intangible assets	7			7,573			—			—			7,580
Total expenses	109,494			801,948			11,925			—			923,367
Operating income	26,452			95,488			8,676			—			130,616
Other income (expense), net:
Loss from equity method investments, net	(415		)	—			—			—			(415		)
Interest income (expense), net	5,232			(15,681		)	(94		)	—			(10,543		)
Other, net	5,995			509			(5,052		)	—			1,452
Total other income (expense), net	10,812			(15,172		)	(5,146		)	—			(9,506		)
Income from continuing operations before income taxes	37,264			80,316			3,530			—			121,110
Income tax expense	(14,672		)	(26,630		)	(809		)	—			(42,111		)
Income from continuing operations	22,592			53,686			2,721			—			78,999
Equity in income of subsidiaries	56,407			2,721			—			(59,128		)	—
Net income (loss)	78,999			56,407			2,721			(59,128		)	78,999
Foreign currency translation adjustment(1)	(249		)	—			(1,980		)	—			(2,229		)
Comprehensive income	$	78,750		$	56,407		$	741		$	(59,128	)	$	76,770

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2016.

CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
	Six Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Revenue	$	127,497		$	1,004,320		$	22,188		$	—		$	1,154,005
Expenses:
Direct operating	69,123			695,363			10,317			—			774,803
Marketing	2,991			13,449			27			—			16,467
Research and development	(83		)	4,206			—			—			4,123
General and administrative	23,823			73,115			401			—			97,339
Restructuring and related costs	551			15,300			—			—			15,851
Depreciation and other	12,700			73,046			2,114			—			87,860
Amortization of intangible assets	7			6,611			—			—			6,618
Goodwill impairment	—			85,890			—			—			85,890
Total expenses	109,112			966,980			12,859			—			1,088,951
Operating income	18,385			37,340			9,329			—			65,054
Other income (expense), net:
Loss from equity method investments, net	(265		)	—			—			—			(265		)
Interest income (expense), net	(24,881		)	692			(65		)	—			(24,254		)
Other, net	5,578			64			(7,346		)	—			(1,704		)
Total other income (expense), net	(19,568		)	756			(7,411		)	—			(26,223		)
Income (loss) from continuing operations before income taxes	(1,183		)	38,096			1,918			—			38,831
Income tax benefit (expense)	5,433			(49,046		)	(414		)	—			(44,027		)
Income (loss) from continuing operations	4,250			(10,950		)	1,504			—			(5,196		)
Income (loss) from discontinued operations, net of tax	668			(27,833		)	22,344			—			(4,821		)
Equity in income of subsidiaries	(14,935		)	23,848			—			(8,913		)	—
Net income (loss)	(10,017		)	(14,935		)	23,848			(8,913		)	(10,017		)
Foreign currency translation adjustment(1)	574			—			2,753			—			3,327
Comprehensive income (loss)	$	(9,443	)	$	(14,935	)	$	26,601		$	(8,913	)	$	(6,690	)

(1) Foreign currency translation adjustment had no tax effect for the six months endedJune 30, 2015.

Consolidating Statements of Cash Flows

CONSOLIDATING STATEMENTS OF CASH FLOWS
(unaudited)
	Six Months Ended June 30, 2016
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Operating Activities:
Net income	$	78,999		$	56,407		$	2,721		$	(59,128	)	$	78,999
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other	12,961			55,130			2,015			—			70,106
Amortization of intangible assets	7			7,573			—			—			7,580
Share-based payments expense	6,984			2,520			—			—			9,504
Deferred income taxes	(1,559		)	(17,300		)	301			—			(18,558		)
Restructuring, impairment and related costs	57			304			—			—			361
Loss from equity method investment, net	415			—			—			—			415
Amortization of deferred financing fees and debt discount	1,251			—			—			—			1,251
Gain from early extinguishment of debt	(11,446		)	—			—			—			(11,446		)
Other	(242		)	(38		)	—			—			(280		)
Equity in income of subsidiaries	(56,407		)	(2,721		)	—			59,128			—
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	2,343			9,605			1,237			—			13,185
Content library	—			40,849			—			—			40,849
Prepaid expenses and other current assets	5,229			(207		)	241			—			5,263
Other assets	—			291			42			—			333
Accounts payable	(2,539		)	(49,970		)	49			—			(52,460		)
Accrued payable to retailers	(3,022		)	(5,109		)	(6,267		)	—			(14,398		)
Other accrued liabilities	6,872			5,993			(1,344		)	—			11,521
Net cash flows from (used in) operating activities	39,903			103,327			(1,005		)	—			142,225
Investing Activities:
Purchases of property and equipment	(16,424		)	(10,989		)	(961		)	—			(28,374		)
Proceeds from sale of property and equipment	—			92			—			—			92
Investments in and advances to affiliates	104,336			(94,347		)	(9,989		)	—			—
Net cash flows from (used in) investing activities	87,912			(105,244		)	(10,950		)	—			(28,282		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	176,000			—			—			—			176,000
Principal payments on Credit Facility	(244,000		)	—			—			—			(244,000		)
Repurchases of notes	(47,507		)	—			—			—			(47,507		)
Dividends paid	(15,122		)	—			—			—			(15,122		)
Principal payments on capital lease obligations and other debt	(2,902		)	—			(175		)	—			(3,077		)
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(1,472		)	—			—			—			(1,472		)
Net cash flows used in financing activities	(135,003		)	—			(175		)	—			(135,178		)
Effect of exchange rate changes on cash	(250		)	—			(2,016		)	—			(2,266		)
Increase (decrease) in cash and cash equivalents	(7,438		)	(1,917		)	(14,146		)	—			(23,501		)
Cash and cash equivalents:
Beginning of period	160,167			19,372			43,010			—			222,549
End of period	$	152,729		$	17,455		$	28,864		$	—		$	199,048

CONSOLIDATING STATEMENTS OF CASH FLOWS
(unaudited)
	Six Months Ended June 30, 2015
(in thousands)	Outerwall Inc.			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations and Consolidation Reclassifications			Total
Operating Activities:
Net income	$	(10,017	)	$	(14,935	)	$	23,848		$	(8,913	)	$	(10,017	)
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other	12,700			74,892			6,126			—			93,718
Amortization of intangible assets	7			6,611			44			—			6,662
Share-based payments expense	3,681			3,511			—			—			7,192
Windfall excess tax benefits related to share-based payments	(686		)	—			—			—			(686		)
Deferred income taxes	(8,029		)	(3,903		)	7,993			—			(3,939		)
Restructuring, impairment and related costs	136			1,544			—			—			1,680
Loss from equity method investments, net	265			—			—			—			265
Amortization of deferred financing fees and debt discount	1,385			—			—			—			1,385
Goodwill impairment	—			85,890			—			—			85,890
Other	(265		)	176			(727		)	—			(816		)
Equity in income of subsidiaries	14,935			(23,848		)	—			8,913			—
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net	(357		)	14,773			661			—			15,077
Content library	—			31,236			3,423			—			34,659
Prepaid expenses and other current assets	(17,957		)	(4,455		)	330			—			(22,082		)
Other assets	47			245			30			—			322
Accounts payable	(2,022		)	(13,438		)	(2,237		)	—			(17,697		)
Accrued payable to retailers	479			(10,682		)	(1,307		)	—			(11,510		)
Other accrued liabilities	1,674			426			(988		)	—			1,112
Net cash flows from (used in) operating activities(1)	(4,024		)	148,043			37,196			—			181,215
Investing Activities:
Purchases of property and equipment	(13,869		)	(25,818		)	(530		)	—			(40,217		)
Proceeds from sale of property and equipment	17			2,923			—			—			2,940
Investments in and advances to affiliates	161,753			(119,126		)	(42,627		)	—			—
Net cash flows from (used in) investing activities(1)	147,901			(142,021		)	(43,157		)	—			(37,277		)
Financing Activities:
Proceeds from new borrowing on Credit Facility	112,000			—			—			—			112,000
Principal payments on Credit Facility	(185,750		)	—			—			—			(185,750		)
Dividends paid	(11,019		)	—			—			—			(11,019		)
Repurchases of common stock	(62,731		)	—			—			—			(62,731		)
Principal payments on capital lease obligations and other debt	(6,080		)	—			(198		)	—			(6,278		)
Windfall excess tax benefits related to share-based payments	686			—			—			—			686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options	(1,201		)	—			—			—			(1,201		)
Net cash flows used in financing activities(1)	(154,095		)	—			(198		)	—			(154,293		)
Effect of exchange rate changes on cash	574			—			4,793			—			5,367
Decrease in cash and cash equivalents	(9,644		)	6,022			(1,366		)	—			(4,988		)
Cash and cash equivalents:
Beginning of period	180,889			17,939			43,868			—			242,696
End of period	$	171,245		$	23,961		$	42,502		$	—		$	237,708

(1) During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in all periods presented. See Note 10: Discontinued Operationsfor cash flow disclosures related to our discontinued Redbox operations in Canada.

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Basis of Presentation and Principles of Consolidation (Narrative) (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reclassification of unamortized deferred financing fees	$ 3.8

XML

Organization and Business (Details)	Jun. 30, 2016 location Kiosk
Organization And Business [Line Items]
Kiosks | Kiosk	63,240
Locations | location	54,500
Redbox
Organization And Business [Line Items]
Kiosks | Kiosk	39,970
Locations | location	32,710
Coinstar
Organization And Business [Line Items]
Kiosks | Kiosk	20,810
Locations | location	19,560
ecoATM
Organization And Business [Line Items]
Kiosks | Kiosk	2,460
Locations | location	2,230

XML

Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 199,048	$ 198,850	$ 222,549	$ 237,708	$ 197,934	$ 242,696
Cash equivalents, at carrying value	5,100		2,700
Cash identified for settling accrued payable to retailer partners	74,700		83,300
United States
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	41,700		46,200
Foreign Financial Institutions
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 7,700		$ 9,000

XML

Prepaid Expenses and Other Current Assets and Other Accrued Liabilities (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Prepaid Expense and Other Assets, Current [Abstract]
Spare parts	$ 11,616	$ 9,780
Licenses	5,744	6,394
Electronic devices inventory	10,427	7,846
Income taxes receivable	1,953	9,517
Prepaid rent	1,365	1,043
DVD cases and labels	1,648	1,371
Other	14,369	15,417
Total prepaid and other current assets	$ 47,122	$ 51,368

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Prepaid Expenses and Other Current Assets and Other Accrued Liabilities (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accrued Liabilities, Current [Abstract]
Payroll related expenses	$ 34,779	$ 40,676
Studio revenue share and other content related expenses	36,052	28,964
Business taxes	15,591	16,080
Insurance	13,549	13,594
Deferred revenue	12,498	11,201
Income taxes payable	13,372	16
Accrued interest expense	6,192	6,913
Accrued early lease termination and sublease expenses	3,859	4,991
Service contract provider expenses	5,288	4,070
Deferred rent expense	2,044	1,728
Other	12,123	13,204
Total other accrued liabilities	$ 155,347	$ 141,437

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Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 1,393,011	$ 1,391,545
Accumulated depreciation and amortization	(1,122,597)	(1,075,532)
Property and equipment, net	270,414	316,013
Kiosks and components
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	1,162,872	1,163,210
Computers, servers, and software
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	195,809	193,507
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	22,497	22,663
Office furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	7,248	7,047
Vehicles
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 4,585	$ 5,118

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Goodwill and Other Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 473,417	$ 473,417

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Goodwill and Other Intangible Assets (Gross Amount Of Other Intangible Assets And The Related Accumulated Amortization) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 59,517	$ 67,097
Retailer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	53,295	53,295
Accumulated amortization	(29,217)	(27,212)
Intangible assets, net	$ 24,078	26,083
Retailer relationships | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	5 years
Retailer relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	10 years
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 36,000	36,000
Accumulated amortization	(20,277)	(16,544)
Intangible assets, net	$ 15,723	19,456
Developed technology | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	3 years
Developed technology | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	5 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 20,000	20,000
Accumulated amortization	(4,433)	(3,133)
Intangible assets, net	$ 15,567	16,867
Trade names | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	5 years
Trade names | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	10 years
Other
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 10,800	10,800
Accumulated amortization	(6,651)	(6,109)
Intangible assets, net	$ 4,149	$ 4,691
Other | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	1 year
Other | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period	40 years

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Goodwill and Other Intangible Assets (Amortization Expenses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 3,790	$ 3,309	$ 7,580	$ 6,662
Less: amortization included in discontinued operations	0	0	0	(44)
Amortization of intangible assets	3,790	3,309	7,580	6,618
Retailer relationships
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	1,002	1,003	2,005	2,006
Developed technology
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	1,867	1,700	3,733	3,400
Trade names
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	650	300	1,300	600
Other
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 271	$ 306	$ 542	$ 656

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Goodwill and Other Intangible Assets (Future Amortization Expense) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2016	$ 7,580
2017	15,160
2018	11,598
2019	6,213
2020	5,819
Thereafter	13,147
Intangible assets, net	$ 59,517	$ 67,097

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment	$ 0	$ 85,890	$ 0	$ 85,890

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Debt and Other Long-Term Liabilities (Schedule Of Debt And Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands		Jun. 30, 2016	Dec. 31, 2015
Debt
Principal		$ 758,587	$ 886,283
Unamortized discount and deferred financing fees	[1]	(8,348)	(10,413)
Total		750,239	875,870
Less: current portion		(15,000)	(13,125)
Total long-term portion		735,239	862,745
Other Liabilities
Capital Lease Obligations		5,531	5,889
Capital Lease Obligations, Current		(3,418)	(4,006)
Capital Lease Obligations, Noncurrent		2,113	1,883
Asset Retirement Obligations		9,438	9,412
Asset Retirement Obligation, Current		0	0
Asset Retirement Obligations, Noncurrent		9,438	9,412
Other Long-term Liabilities		19,780	19,477
Other Long-term Liabilities, Current		0	0
Other Long-term Liabilities, Noncurrent		19,780	19,477
Long-term debt and other long-term liabilities		784,988	910,648
Current portion of long-term debt and other long-term liabilities		(18,418)	(17,131)
Long-term debt and other long-term liabilities		766,570	893,517
Senior Notes | Senior Unsecured Notes due 2019
Debt
Principal		320,614	350,000
Unamortized discount and deferred financing fees	[1]	(2,922)	(3,770)
Total		317,692	346,230
Less: current portion		0	0
Total long-term portion		317,692	346,230
Senior Notes | Senior Unsecured Notes due 2021
Debt
Principal		228,598	258,908
Unamortized discount and deferred financing fees	[1]	(3,234)	(4,083)
Total		225,364	254,825
Less: current portion		0	0
Total long-term portion		225,364	254,825
Term Loans | Credit Facility
Debt
Principal		129,375	136,875
Unamortized discount and deferred financing fees	[1]	(224)	(260)
Total		129,151	136,615
Less: current portion		(15,000)	(13,125)
Total long-term portion		114,151	123,490
Revolving Line of Credit | Credit Facility
Debt
Principal		80,000	140,500
Unamortized discount and deferred financing fees	[1]	(1,968)	(2,300)
Total		78,032	138,200
Less: current portion		0	0
Total long-term portion		$ 78,032	$ 138,200

[1] As described in Note 1: Basis of Presentation and Principles of Consolidation, we adopted ASU 2015-03 and 2015-15 in the first quarter of 2016 and have applied the guidance to our Senior Notes and Credit Facility. Under this guidance, we are now presenting unamortized deferred financing fees as a direct deduction from the associated debt liability. Historically, unamortized deferred financing fees were included in other non-current assets. This adoption resulted in the reclassification of $3.8 million of unamortized deferred financing fees as of December 31, 2015, from other non-current assets to long-term debt in our Consolidated Balance Sheets. Deferred financing fees are amortized on a straight line basis over the life of the related loan.

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Debt and Other Long-Term Liabilities (Schedule Of Interest Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Long-term Debt, Unclassified [Abstract]
Cash interest expense	$ 10,141	$ 11,499	$ 20,795	$ 22,894
Amortization of debt discount and deferred financing fees	613	692	1,251	1,385
Total cash and non-cash interest expense	10,754	12,191	22,046	24,279
Gain from early extinguishment of debt	(418)	0	(11,446)	0
Total interest expense	$ 10,336	$ 12,191	$ 10,600	$ 24,279

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Debt and Other Long-Term Liabilities (Schedule of Maturities of Long-term Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Total	$ 758,587	$ 886,283
Credit Facility | Term Loans
Line of Credit Facility [Line Items]
Remainder of 2016	7,500
2017	15,000
2018	20,625
2019	86,250
Total	$ 129,375	$ 136,875

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Debt and Other Long-Term Liabilities (Narrative) (Details) $ in Thousands			3 Months Ended		6 Months Ended
	Jun. 09, 2014 USD ($)	Mar. 12, 2013 USD ($)	Jun. 30, 2016 USD ($) note	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) note	Jun. 30, 2015 USD ($)
Debt Instrument [Line Items]
Reclassification of unamortized deferred financing fees					$ 3,800
Gains (losses) from early extinguishment of debt			$ 418	$ 0	$ 11,446	$ 0
Credit Facility
Debt Instrument [Line Items]
Interest rate on amounts outstanding under the credit facility			2.20%		2.20%
Credit Facility | Term Loans
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 150,000		$ 150,000
Credit Facility | Revolving Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			600,000		600,000
Sublimit for issuance of letters of credit			75,000		75,000
Sublimit for swingline loans			50,000		50,000
Sublimit for loans in certain foreign countries			75,000		75,000
Line of credit facility, option to increase borrowing capacity			$ 200,000		$ 200,000
Senior Unsecured Notes due 2019 | Senior Notes
Debt Instrument [Line Items]
Principal amount of debt		$ 350,000
Interest rate		6.00%
Proceeds from issuance of senior unsecured notes		$ 343,800
Number of senior notes repurchased | note			0		29,386
Face value of debt extinguished			$ 29,400
Repurchase amount in cash			$ 23,400
Gains (losses) from early extinguishment of debt					$ 5,600
Senior Unsecured Notes due 2021 | Senior Notes
Debt Instrument [Line Items]
Principal amount of debt	$ 300,000
Interest rate	5.875%
Proceeds from issuance of senior unsecured notes	$ 294,000
Number of senior notes repurchased | note			2,635		30,310
Face value of debt extinguished			$ 2,600		$ 30,300
Repurchase amount in cash			2,200		24,100
Gains (losses) from early extinguishment of debt			$ 400		$ 5,800

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Share-Based Payments (Schedule Of Information Regarding Share-Based Payments) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payments expense	$ 5,298	$ 3,320	$ 9,690	$ 7,261
Tax benefit on share-based payments expense	2,066	1,289	3,774	2,807
Share-based compensation - stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payments expense	33	40	80	181
Share-based compensation - restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payments expense	4,452	2,039	7,982	4,598
Share-based payments for content arrangements
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payments expense	$ 813	$ 1,241	$ 1,628	$ 2,482

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Share-Based Payments (Schedule Of Unrecognized Compensation Cost And Weighted-Average Remaining Life) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Share-Based Payments Expense	$ 19,696
Share-based compensation - stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Share-Based Payments Expense	$ 83
Weighted-Average Remaining Life	8 months 13 days
Share-based compensation - restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Share-Based Payments Expense	$ 18,349
Weighted-Average Remaining Life	2 years 4 months 23 days
Share-based payments for content arrangements
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Share-Based Payments Expense	$ 1,264
Weighted-Average Remaining Life	4 months 23 days

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Share-Based Payments (Summary Of Restricted Stock Award Activity) (Details) - Share-based compensation - restricted stock shares in Thousands	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested, beginning of year (in shares) | shares	556
Granted (in shares) | shares	746
Vested (in shares) | shares	(155)
Forfeited (in shares) | shares	(148)
Non-vested, end of period (in shares) | shares	999
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
NON-VESTED, Beginning of year, weighted average grant date fair value (in usd per share) | $ / shares	$ 65.86
Per share weighted average grant date fair value of restricted stock granted (in usd per share) | $ / shares	26.86
Vested, weighted average grant date fair value (in usd per share) | $ / shares	64.45
Forfeited, weighted average grant date fair value (in usd per share) | $ / shares	50.73
NON-VESTED, end of period, weighted average grant date fair value (in usd per share) | $ / shares	$ 39.21

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Share-Based Payments (Rights to Receive Cash) (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining total expected expense	$ 19,696
ecoATM
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2016	594
2017	146
Remaining total expected expense	$ 740

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Share-Based Payments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2016	Jun. 30, 2016
ecoATM
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Expense associated with the issuance of rights to receive cash		$ 0.8
Share-based compensation - stock options
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based compensation - stock option granted		0
Share-based compensation - restricted stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Granted (in shares)		746,000
Paramount
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Granted (in shares)	50,000
Awards Granted To Employees And Executives | Share-based compensation - restricted stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based payment award vesting period, years		3 years
Awards Granted To Employees And Executives | Share-based compensation - restricted stock | Award vests one year from the grant date
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based payment award, percentage		25.00%
Awards Granted To Employees And Executives | Share-based compensation - restricted stock | Award vests two years from the grant date
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based payment award, percentage		25.00%
Awards Granted To Employees And Executives | Share-based compensation - restricted stock | Award vests three years from the grant date
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based payment award, percentage		50.00%
Awards Granted To Non Employee Directors | Share-based compensation - restricted stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based payment award vesting period, years		1 year
Performance-based Restricted Stock Awards Granted to Executives | Share-based compensation - restricted stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based payment award vesting period, years		3 years

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Restructuring (Components of Restructuring Charges) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring Cost and Reserve [Line Items]
Total restructuring costs in continuing operations	$ 401	$ 0	$ 3,676	$ 8,911
Impairment of lease related assets	0	0	0	6,940
Total restructuring and lease termination costs from continuing operations	401	0	3,676	15,851
Redbox
Restructuring Cost and Reserve [Line Items]
Severance	14	0	2,125	3,701
Lease termination and related costs (excluding related asset impairments)	0	0	297	4,567
Total restructuring costs in continuing operations	14	0	2,422	8,268
Coinstar
Restructuring Cost and Reserve [Line Items]
Severance	3	0	408	492
Lease termination and related costs (excluding related asset impairments)	0	0	57	24
Total restructuring costs in continuing operations	3	0	465	516
ecoATM
Restructuring Cost and Reserve [Line Items]
Severance	384	0	782	127
Lease termination and related costs (excluding related asset impairments)	0	0	7	0
Total restructuring costs in continuing operations	$ 384	$ 0	$ 789	$ 127

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Restructuring (Schedule of Beginning and End Liability Balance and Expense by Type) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring Reserve [Roll Forward]
Costs charged to expense	$ 401	$ 0	$ 3,676	$ 8,911
Severance Expense
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance			1,385
Costs charged to expense			3,315
Costs paid or otherwise settled			(4,629)
Restructuring reserve, ending balance	71		71
Lease Termination Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance			4,991
Costs charged to expense			361
Costs paid or otherwise settled			(1,493)
Restructuring reserve, ending balance	$ 3,859		$ 3,859

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Discontinued Operations (Income Statement Disclosures of Discontinued Operations) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amortization of intangible assets		$ 0	$ 0	$ 0	$ 44
Net income (loss) on discontinued operations		$ 0	1,735	$ 0	(4,821)
Redbox Canada
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue			0		1,557
Direct operating			35		4,304
Marketing			(17)		112
General and administrative			35		154
Restructuring and related costs			0		522
Depreciation and other			0		5,858
Amortization of intangible assets			0		44
Other expense, net			166		(4,329)
Pretax gain (loss) of discontinued operations related to major classes of pretax loss			113		(13,766)
Income tax benefit	[1]		1,622		8,945
Net income (loss) on discontinued operations			$ 1,735		$ (4,821)

[1] The income tax benefit for the three months and six months ended June 30, 2015 includes a benefit on the rate differential between the U.S. and Canada.

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Discontinued Operations (Significant Operating and Investing Cash Flow Activity of Discontinued Operations) (Details) - Redbox Canada - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income (loss) on discontinued operations	$ 1,735	$ (4,821)
Depreciation and amortization	0	5,902
Content library	148	3,212
Prepaid and other current assets	690	1,234
Accounts payable	(1,095)	(2,716)
Accrued payables to retailers	0	(155)
Other accrued liabilities	(585)	(617)
Net cash flows from operating activities	893	2,039
Purchase of property, plant and equipment	0	(278)
Total cash flows used in investing activities	$ 0	$ (278)

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Income (loss) from continuing operations		$ 40,548	$ (47,351)	$ 78,999	$ (5,196)
Income (loss) from discontinued operations, net of tax		0	1,735	0	(4,821)
Net income (loss)		40,548	(45,616)	78,999	(10,017)
Dividends and undistributed income allocated to participating shares		(1,933)	(121)	(3,334)	(269)
Income from continuing operations to common shares - basic		38,615	(47,472)	75,665	(5,465)
Effect of reallocating undistributed income from continuing operations to participating shares		11	0	16	0
Income from continuing operations to common shares - diluted		$ 38,626	$ (47,472)	$ 75,681	$ (5,465)
Weighted average common shares - basic (in shares)		16,149	17,848	16,122	18,057
Dilutive effect of share-based payment awards (in shares)		95	0	94	0
Weighted average common shares - diluted (in shares)	[1]	16,244	17,848	16,216	18,057
Basic earnings (loss) per common share:
Continuing operations (in usd per share)		$ 2.39	$ (2.66)	$ 4.69	$ (0.30)
Discontinued operations (in usd per share)		0.00	0.10	0.00	(0.27)
Basic earnings (loss) per common share (in usd per share)		2.39	(2.56)	4.69	(0.57)
Diluted earnings (loss) per common share:
Continuing operations (in usd per share)		2.38	(2.66)	4.67	(0.30)
Discontinued operations (in usd per share)		0.00	0.10	0.00	(0.27)
Diluted earnings (loss) per common share (in usd per share)		$ 2.38	$ (2.56)	$ 4.67	$ (0.57)
Stock options and share-based awards not included in diluted EPS calculation because their effect would have be antidilutive (in shares)		248	14	121	16

[1] Participating securities were included in the calculation of diluted earnings per share using the two-class method, as this calculation was more dilutive than the calculation using the treasury stock method.

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Business Segments and Enterprise-Wide Information (Schedule Of Segment Performance) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Revenue		$ 518,027	$ 545,369	$ 1,053,983	$ 1,154,005
Expenses:
Direct operating	[1]	351,581	369,619	727,548	774,803
Marketing		7,422	8,047	16,644	16,467
Research and development		1,317	2,039	2,362	4,123
General and administrative		47,681	48,783	95,451	97,339
Restructuring and related costs (Note 9)		401	0	3,676	15,851
Goodwill impairment		0	85,890	0	85,890
Segment operating income (loss)		109,625	30,991	208,302	159,532
Less: depreciation, amortization and other		(37,778)	(48,483)	(77,686)	(94,478)
Operating income (loss)		71,847	(17,492)	130,616	65,054
Loss from equity method investments, net		(208)	(133)	(415)	(265)
Interest expense, net		(10,301)	(12,183)	(10,543)	(24,254)
Other, net		223	642	1,452	(1,704)
Income (loss) from continuing operations before income taxes		61,561	(29,166)	121,110	38,831
Operating Segments | Redbox
Segment Reporting Information [Line Items]
Revenue		389,059	438,976	810,547	958,509
Expenses:
Direct operating		271,731	301,444	570,732	644,379
Marketing		3,919	4,266	7,743	9,091
Research and development		0	0	0	0
General and administrative		31,325	34,336	63,354	68,071
Restructuring and related costs (Note 9)		14		2,422	15,174
Goodwill impairment			0		0
Segment operating income (loss)		82,070	98,930	166,296	221,794
Less: depreciation, amortization and other		(21,806)	(33,063)	(46,101)	(64,670)
Operating income (loss)		60,264	65,867	120,195	157,124
Loss from equity method investments, net		0	0	0	0
Interest expense, net		0	0	0	0
Other, net		0	0	0	0
Income (loss) from continuing operations before income taxes		60,264	65,867	120,195	157,124
Operating Segments | Coinstar
Segment Reporting Information [Line Items]
Revenue		84,168	80,279	156,547	149,609
Expenses:
Direct operating		42,095	39,358	80,740	76,621
Marketing		399	1,232	1,174	2,410
Research and development		0	0	0	0
General and administrative		8,494	7,768	16,358	15,563
Restructuring and related costs (Note 9)		3		465	550
Goodwill impairment			0		0
Segment operating income (loss)		33,177	31,921	57,810	54,465
Less: depreciation, amortization and other		(7,595)	(8,437)	(15,004)	(16,255)
Operating income (loss)		25,582	23,484	42,806	38,210
Loss from equity method investments, net		0	0	0	0
Interest expense, net		0	0	0	0
Other, net		0	0	0	0
Income (loss) from continuing operations before income taxes		25,582	23,484	42,806	38,210
Operating Segments | ecoATM
Segment Reporting Information [Line Items]
Revenue		44,800	26,062	86,889	45,811
Expenses:
Direct operating		37,291	27,227	75,185	50,033
Marketing		3,058	2,149	7,638	3,879
Research and development		1,194	1,549	2,129	3,005
General and administrative		3,573	2,094	7,575	4,062
Restructuring and related costs (Note 9)		384		789	127
Goodwill impairment			85,890		85,890
Segment operating income (loss)		(700)	(92,847)	(6,427)	(101,185)
Less: depreciation, amortization and other		(8,398)	(6,305)	(16,602)	(12,207)
Operating income (loss)		(9,098)	(99,152)	(23,029)	(113,392)
Loss from equity method investments, net		0	0	0	0
Interest expense, net		0	0	0	0
Other, net		0	0	0	0
Income (loss) from continuing operations before income taxes		(9,098)	(99,152)	(23,029)	(113,392)
Operating Segments | All Other
Segment Reporting Information [Line Items]
Revenue		0	52	0	76
Expenses:
Direct operating		83	1,078	169	2,269
Marketing		7	258	12	578
Research and development		0	1	0	(84)
General and administrative		2	2,644	349	5,151
Restructuring and related costs (Note 9)		0		0	0
Goodwill impairment			0		0
Segment operating income (loss)		(92)	(3,929)	(530)	(7,838)
Less: depreciation, amortization and other		21	(678)	21	(1,346)
Operating income (loss)		(71)	(4,607)	(509)	(9,184)
Loss from equity method investments, net		0	0	0	0
Interest expense, net		0	0	0	0
Other, net		0	0	0	0
Income (loss) from continuing operations before income taxes		(71)	(4,607)	(509)	(9,184)
Corporate Unallocated
Segment Reporting Information [Line Items]
Revenue		0	0	0	0
Expenses:
Direct operating		381	512	722	1,501
Marketing		39	142	77	509
Research and development		123	489	233	1,202
General and administrative		4,287	1,941	7,815	4,492
Restructuring and related costs (Note 9)		0		0	0
Goodwill impairment			0		0
Segment operating income (loss)		(4,830)	(3,084)	(8,847)	(7,704)
Less: depreciation, amortization and other		0	0	0	0
Operating income (loss)		(4,830)	(3,084)	(8,847)	(7,704)
Loss from equity method investments, net		(208)	(133)	(415)	(265)
Interest expense, net		(10,301)	(12,183)	(10,543)	(24,254)
Other, net		223	642	1,452	(1,704)
Income (loss) from continuing operations before income taxes		$ (15,116)	$ (14,758)	$ (18,353)	$ (33,927)

[1] “Direct operating” excludes depreciation and other of $24.9 million and $51.1 million for the three and six months ended June 30, 2016, respectively, and $29.6 million and $58.0 million for the three and six months ended June 30, 2015, respectively.

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Business Segments and Enterprise-Wide Information (Schedule Of Contributions By Major Customers) (Details) - Customer Concentration Risk - Sales Revenue, Net	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Wal-Mart Stores Inc.
Revenue, Major Customer [Line Items]
Percentage of revenue contributed by major customers	16.70%	16.40%	16.40%	16.40%
Walgreen Co.
Revenue, Major Customer [Line Items]
Percentage of revenue contributed by major customers	12.40%	13.50%	13.10%	14.00%
The Kroger Company
Revenue, Major Customer [Line Items]
Percentage of revenue contributed by major customers	9.60%	10.00%	9.60%	9.90%

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Fair Value (Assets And Liabilities Measured At Fair Value) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market demand accounts and investment grade fixed income securities	$ 5,100	$ 2,700
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market demand accounts and investment grade fixed income securities	$ 5,056	$ 2,743

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Fair Value (Fair Value of the 2019 Notes and 2021 Notes) (Details) - Senior Notes - Level 2 - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Senior Unsecured Notes due 2019
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Estimated fair value of senior unsecured notes	$ 293,000	$ 312,000
Senior Unsecured Notes due 2021
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Estimated fair value of senior unsecured notes	$ 194,000	$ 213,000

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Commitments and Contingencies (Estimated Commitments from License Agreements) (Details) - Licensing Agreements $ in Thousands	Jun. 30, 2016 USD ($)
Total Estimated Movie Content Commitments [Line Items]
Total estimated movie content commitments	$ 460,681
Remaining in 2016	226,902
2017	224,136
2018	$ 9,643

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Commitments and Contingencies (Narrative) (Details)	Jun. 30, 2016 USD ($)
Pending Litigation
Long-term Purchase Commitment [Line Items]
Loss contingency accrual	$ 0

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Guarantor Subsidiaries (Condensed Consolidating Balance Sheets) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 199,048	$ 198,850	$ 222,549	$ 237,708	$ 197,934	$ 242,696
Accounts receivable, net of allowances	25,386		38,464
Content library	147,815		188,490
Prepaid expenses and other current assets	47,122		51,368
Intercompany receivables	0		0
Total current assets	419,371		500,871
Property and equipment, net	270,414		316,013
Deferred income taxes	2,456		2,606
Goodwill and other intangible assets, net	532,934		540,514
Other long-term assets	1,489		2,207
Investment in related parties	0		0
Total assets	1,226,664		1,362,211
Current Liabilities:
Accounts payable	126,654		184,010
Accrued payable to retailers	100,332		115,098
Other accrued liabilities	155,347		141,437
Current portion of long-term debt and other long-term liabilities	18,418		17,131
Intercompany payables	0		0
Total current liabilities	400,751		457,676
Long-term debt and other long-term liabilities	766,570		893,517
Deferred income taxes	13,442		33,092
Total liabilities	1,180,763		1,384,285
Commitments and contingencies
Stockholders’ Equity (Deficit):
Preferred Stock	0		0
Common stock	489,879		485,163
Treasury stock	(1,149,261)		(1,151,063)
Retained earnings	707,138		643,452
Accumulated other comprehensive income (loss)	(1,855)		374
Total stockholders’ equity (deficit)	45,901	$ 2,200	(22,074)
Total liabilities and stockholders’ equity (deficit)	1,226,664		1,362,211
Eliminations and Consolidation Reclassifications
Current Assets:
Cash and cash equivalents	0		0	0		0
Accounts receivable, net of allowances	0		0
Content library	0		0
Prepaid expenses and other current assets	0		0
Intercompany receivables	(652,985)		(564,076)
Total current assets	(652,985)		(564,076)
Property and equipment, net	0		0
Deferred income taxes	0		0
Goodwill and other intangible assets, net	0		0
Other long-term assets	0		0
Investment in related parties	(1,002,752)		(949,254)
Total assets	(1,655,737)		(1,513,330)
Current Liabilities:
Accounts payable	0		0
Accrued payable to retailers	0		0
Other accrued liabilities	0		0
Current portion of long-term debt and other long-term liabilities	0		0
Intercompany payables	(652,985)		(564,076)
Total current liabilities	(652,985)		(564,076)
Long-term debt and other long-term liabilities	0		0
Deferred income taxes	0		0
Total liabilities	(652,985)		(564,076)
Stockholders’ Equity (Deficit):
Preferred Stock	(3,000)		(3,000)
Common stock	(371,660)		(371,875)
Treasury stock	0		0
Retained earnings	(628,092)		(574,379)
Accumulated other comprehensive income (loss)	0		0
Total stockholders’ equity (deficit)	(1,002,752)		(949,254)
Total liabilities and stockholders’ equity (deficit)	(1,655,737)		(1,513,330)
Outerwall Inc. | Reportable Legal Entities
Current Assets:
Cash and cash equivalents	152,729		160,167	171,245		180,889
Accounts receivable, net of allowances	1,640		3,983
Content library	0		0
Prepaid expenses and other current assets	12,501		17,720
Intercompany receivables	15,212		35,654
Total current assets	182,082		217,524
Property and equipment, net	87,236		97,659
Deferred income taxes	0		0
Goodwill and other intangible assets, net	249,696		249,703
Other long-term assets	377		747
Investment in related parties	974,379		921,456
Total assets	1,493,770		1,487,089
Current Liabilities:
Accounts payable	8,857		16,127
Accrued payable to retailers	68,924		71,947
Other accrued liabilities	65,424		57,025
Current portion of long-term debt and other long-term liabilities	18,193		16,832
Intercompany payables	527,722		459,789
Total current liabilities	689,120		621,720
Long-term debt and other long-term liabilities	747,114		873,476
Deferred income taxes	11,634		13,965
Total liabilities	1,447,868		1,509,161
Stockholders’ Equity (Deficit):
Preferred Stock	0		0
Common stock	604,392		599,675
Treasury stock	(1,149,261)		(1,151,063)
Retained earnings	591,844		530,140
Accumulated other comprehensive income (loss)	(1,073)		(824)
Total stockholders’ equity (deficit)	45,902		(22,072)
Total liabilities and stockholders’ equity (deficit)	1,493,770		1,487,089
Combined Guarantor Subsidiaries | Reportable Legal Entities
Current Assets:
Cash and cash equivalents	17,455		19,372	23,961		17,939
Accounts receivable, net of allowances	23,663		33,269
Content library	147,815		188,490
Prepaid expenses and other current assets	34,291		33,049
Intercompany receivables	636,566		527,996
Total current assets	859,790		802,176
Property and equipment, net	170,440		204,081
Deferred income taxes	0		0
Goodwill and other intangible assets, net	283,238		290,811
Other long-term assets	1,001		1,293
Investment in related parties	28,373		27,798
Total assets	1,342,842		1,326,159
Current Liabilities:
Accounts payable	117,574		167,694
Accrued payable to retailers	25,048		30,157
Other accrued liabilities	89,249		82,401
Current portion of long-term debt and other long-term liabilities	5		0
Intercompany payables	115,511		85,487
Total current liabilities	347,387		365,739
Long-term debt and other long-term liabilities	19,294		19,882
Deferred income taxes	1,784		19,083
Total liabilities	368,465		404,704
Stockholders’ Equity (Deficit):
Preferred Stock	0		0
Common stock	252,512		252,727
Treasury stock	0		0
Retained earnings	721,865		668,728
Accumulated other comprehensive income (loss)	0		0
Total stockholders’ equity (deficit)	974,377		921,455
Total liabilities and stockholders’ equity (deficit)	1,342,842		1,326,159
Combined Non-Guarantor Subsidiaries | Reportable Legal Entities
Current Assets:
Cash and cash equivalents	28,864		43,010	$ 42,502		$ 43,868
Accounts receivable, net of allowances	83		1,212
Content library	0		0
Prepaid expenses and other current assets	330		599
Intercompany receivables	1,207		426
Total current assets	30,484		45,247
Property and equipment, net	12,738		14,273
Deferred income taxes	2,456		2,606
Goodwill and other intangible assets, net	0		0
Other long-term assets	111		167
Investment in related parties	0		0
Total assets	45,789		62,293
Current Liabilities:
Accounts payable	223		189
Accrued payable to retailers	6,360		12,994
Other accrued liabilities	674		2,011
Current portion of long-term debt and other long-term liabilities	220		299
Intercompany payables	9,752		18,800
Total current liabilities	17,229		34,293
Long-term debt and other long-term liabilities	162		159
Deferred income taxes	24		44
Total liabilities	17,415		34,496
Stockholders’ Equity (Deficit):
Preferred Stock	3,000		3,000
Common stock	4,635		4,636
Treasury stock	0		0
Retained earnings	21,521		18,963
Accumulated other comprehensive income (loss)	(782)		1,198
Total stockholders’ equity (deficit)	28,374		27,797
Total liabilities and stockholders’ equity (deficit)	$ 45,789		$ 62,293

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Guarantor Subsidiaries (Condensed Consolidating Statements of Comprehensive Income) (Details) - USD ($)		3 Months Ended				6 Months Ended
		Jun. 30, 2016		Jun. 30, 2015		Jun. 30, 2016		Jun. 30, 2015
Condensed Statement of Income Captions [Line Items]
Revenue		$ 518,027,000		$ 545,369,000		$ 1,053,983,000		$ 1,154,005,000
Expenses:
Direct operating	[1]	351,581,000		369,619,000		727,548,000		774,803,000
Marketing		7,422,000		8,047,000		16,644,000		16,467,000
Research and development		1,317,000		2,039,000		2,362,000		4,123,000
General and administrative		47,681,000		48,783,000		95,451,000		97,339,000
Restructuring and related costs		401,000		0		3,676,000		15,851,000
Depreciation and other		33,988,000		45,174,000		70,106,000		87,860,000
Amortization of intangible assets		3,790,000		3,309,000		7,580,000		6,618,000
Goodwill impairment		0		85,890,000		0		85,890,000
Total expenses		446,180,000		562,861,000		923,367,000		1,088,951,000
Operating income (loss)		71,847,000		(17,492,000)		130,616,000		65,054,000
Other income (expense), net:
Loss from equity method investments, net		(208,000)		(133,000)		(415,000)		(265,000)
Interest income (expense), net		(10,301,000)		(12,183,000)		(10,543,000)		(24,254,000)
Other, net		223,000		642,000		1,452,000		(1,704,000)
Total other income (expense), net		(10,286,000)		(11,674,000)		(9,506,000)		(26,223,000)
Income (loss) from continuing operations before income taxes		61,561,000		(29,166,000)		121,110,000		38,831,000
Income tax benefit (expense)		(21,013,000)		(18,185,000)		(42,111,000)		(44,027,000)
Income (loss) from continuing operations		40,548,000		(47,351,000)		78,999,000		(5,196,000)
Income (loss) from discontinued operations, net of tax		0		1,735,000		0		(4,821,000)
Equity in income (loss) of subsidiaries		0		0		0		0
Net income (loss)		40,548,000		(45,616,000)		78,999,000		(10,017,000)
Foreign currency translation adjustment	[2]	(1,680,000)	[3],[4]	473,000	[5]	(2,229,000)	[6],[7]	3,327,000	[8]
Comprehensive income (loss)		38,868,000		(45,143,000)		76,770,000		(6,690,000)
Foreign currency translation adjustment, tax effect		0		0		0		0
Eliminations and Consolidation Reclassifications
Condensed Statement of Income Captions [Line Items]
Revenue		0		0		0		0
Expenses:
Direct operating		0		0		0		0
Marketing		0		0		0		0
Research and development		0		0		0		0
General and administrative		0		0		0		0
Restructuring and related costs		0		0		0		0
Depreciation and other		0		0		0		0
Amortization of intangible assets		0		0		0		0
Goodwill impairment				0				0
Total expenses		0		0		0		0
Operating income (loss)		0		0		0		0
Other income (expense), net:
Loss from equity method investments, net		0		0		0		0
Interest income (expense), net		0		0		0		0
Other, net		0		0		0		0
Total other income (expense), net		0		0		0		0
Income (loss) from continuing operations before income taxes		0		0		0		0
Income tax benefit (expense)		0		0		0		0
Income (loss) from continuing operations		0		0		0		0
Income (loss) from discontinued operations, net of tax				0				0
Equity in income (loss) of subsidiaries		(30,940,000)		49,820,000		(59,128,000)		(8,913,000)
Net income (loss)		(30,940,000)		49,820,000		(59,128,000)		(8,913,000)
Foreign currency translation adjustment		0	[4]	0	[5]	0	[7]	0	[8]
Comprehensive income (loss)		(30,940,000)		49,820,000		(59,128,000)		(8,913,000)
Outerwall Inc. | Reportable Legal Entities
Condensed Statement of Income Captions [Line Items]
Revenue		73,700,000		68,687,000		135,946,000		127,497,000
Expenses:
Direct operating		37,633,000		35,397,000		71,989,000		69,123,000
Marketing		410,000		1,477,000		1,209,000		2,991,000
Research and development		0		1,000		0		(83,000)
General and administrative		11,949,000		11,767,000		22,863,000		23,823,000
Restructuring and related costs		3,000		0		465,000		551,000
Depreciation and other		6,547,000		8,051,000		12,961,000		12,700,000
Amortization of intangible assets		4,000		4,000		7,000		7,000
Goodwill impairment				0				0
Total expenses		56,546,000		56,697,000		109,494,000		109,112,000
Operating income (loss)		17,154,000		11,990,000		26,452,000		18,385,000
Other income (expense), net:
Loss from equity method investments, net		(208,000)		(133,000)		(415,000)		(265,000)
Interest income (expense), net		(2,715,000)		(12,485,000)		5,232,000		(24,881,000)
Other, net		3,229,000		3,142,000		5,995,000		5,578,000
Total other income (expense), net		306,000		(9,476,000)		10,812,000		(19,568,000)
Income (loss) from continuing operations before income taxes		17,460,000		2,514,000		37,264,000		(1,183,000)
Income tax benefit (expense)		(6,850,000)		5,981,000		(14,672,000)		5,433,000
Income (loss) from continuing operations		10,610,000		8,495,000		22,592,000		4,250,000
Income (loss) from discontinued operations, net of tax				(856,000)				668,000
Equity in income (loss) of subsidiaries		29,938,000		(53,255,000)		56,407,000		(14,935,000)
Net income (loss)		40,548,000		(45,616,000)		78,999,000		(10,017,000)
Foreign currency translation adjustment		(51,000)	[4]	638,000	[5]	(249,000)	[7]	574,000	[8]
Comprehensive income (loss)		40,497,000		(44,978,000)		78,750,000		(9,443,000)
Combined Guarantor Subsidiaries | Reportable Legal Entities
Condensed Statement of Income Captions [Line Items]
Revenue		433,859,000		465,039,000		897,436,000		1,004,320,000
Expenses:
Direct operating		309,105,000		328,952,000		646,046,000		695,363,000
Marketing		7,010,000		6,543,000		15,433,000		13,449,000
Research and development		1,317,000		2,038,000		2,362,000		4,206,000
General and administrative		35,529,000		36,820,000		72,193,000		73,115,000
Restructuring and related costs		398,000		0		3,211,000		15,300,000
Depreciation and other		26,417,000		36,063,000		55,130,000		73,046,000
Amortization of intangible assets		3,786,000		3,305,000		7,573,000		6,611,000
Goodwill impairment				85,890,000				85,890,000
Total expenses		383,562,000		499,611,000		801,948,000		966,980,000
Operating income (loss)		50,297,000		(34,572,000)		95,488,000		37,340,000
Other income (expense), net:
Loss from equity method investments, net		0		0		0		0
Interest income (expense), net		(7,539,000)		317,000		(15,681,000)		692,000
Other, net		122,000		80,000		509,000		64,000
Total other income (expense), net		(7,417,000)		397,000		(15,172,000)		756,000
Income (loss) from continuing operations before income taxes		42,880,000		(34,175,000)		80,316,000		38,096,000
Income tax benefit (expense)		(13,944,000)		(23,736,000)		(26,630,000)		(49,046,000)
Income (loss) from continuing operations		28,936,000		(57,911,000)		53,686,000		(10,950,000)
Income (loss) from discontinued operations, net of tax				1,221,000				(27,833,000)
Equity in income (loss) of subsidiaries		1,002,000		3,435,000		2,721,000		23,848,000
Net income (loss)		29,938,000		(53,255,000)		56,407,000		(14,935,000)
Foreign currency translation adjustment		0	[4]	0	[5]	0	[7]	0	[8]
Comprehensive income (loss)		29,938,000		(53,255,000)		56,407,000		(14,935,000)
Combined Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Statement of Income Captions [Line Items]
Revenue		10,468,000		11,643,000		20,601,000		22,188,000
Expenses:
Direct operating		4,843,000		5,270,000		9,513,000		10,317,000
Marketing		2,000		27,000		2,000		27,000
Research and development		0		0		0		0
General and administrative		203,000		196,000		395,000		401,000
Restructuring and related costs		0		0		0		0
Depreciation and other		1,024,000		1,060,000		2,015,000		2,114,000
Amortization of intangible assets		0		0		0		0
Goodwill impairment				0				0
Total expenses		6,072,000		6,553,000		11,925,000		12,859,000
Operating income (loss)		4,396,000		5,090,000		8,676,000		9,329,000
Other income (expense), net:
Loss from equity method investments, net		0		0		0		0
Interest income (expense), net		(47,000)		(15,000)		(94,000)		(65,000)
Other, net		(3,128,000)		(2,580,000)		(5,052,000)		(7,346,000)
Total other income (expense), net		(3,175,000)		(2,595,000)		(5,146,000)		(7,411,000)
Income (loss) from continuing operations before income taxes		1,221,000		2,495,000		3,530,000		1,918,000
Income tax benefit (expense)		(219,000)		(430,000)		(809,000)		(414,000)
Income (loss) from continuing operations		1,002,000		2,065,000		2,721,000		1,504,000
Income (loss) from discontinued operations, net of tax				1,370,000				22,344,000
Equity in income (loss) of subsidiaries		0		0		0		0
Net income (loss)		1,002,000		3,435,000		2,721,000		23,848,000
Foreign currency translation adjustment		(1,629,000)	[4]	(165,000)	[5]	(1,980,000)	[7]	2,753,000	[8]
Comprehensive income (loss)		$ (627,000)		$ 3,270,000		$ 741,000		$ 26,601,000

[1] “Direct operating” excludes depreciation and other of $24.9 million and $51.1 million for the three and six months ended June 30, 2016, respectively, and $29.6 million and $58.0 million for the three and six months ended June 30, 2015, respectively.

[2] Foreign currency translation adjustment had no tax effect for the three and six months ended June 30, 2016 and 2015, respectively.

[3] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2016.

[4] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2016.

[5] Foreign currency translation adjustment had no tax effect for the three months ended June 30, 2015.

[6] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2016.

[7] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2016.

[8] Foreign currency translation adjustment had no tax effect for the six months ended June 30, 2015.

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Guarantor Subsidiaries (Condensed Consolidating Statements of Cash Flows) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Operating Activities:
Net income (loss)		$ 40,548	$ (45,616)	$ 78,999	$ (10,017)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other		33,988	45,174	70,106	93,718
Amortization of intangible assets		3,790	3,309	7,580	6,662
Share-based payments expense		5,174	3,289	9,504	7,192
Windfall excess tax benefits related to share-based payments		0	(160)	0	(686)
Deferred income taxes		(10,736)	(1,392)	(18,558)	(3,939)
Restructuring, impairment and related costs	[1]	0	0	361	1,680
Loss from equity method investment, net		208	133	415	265
Amortization of deferred financing fees and debt discount		613	692	1,251	1,385
Goodwill impairment		0	85,890	0	85,890
Gain from early extinguishment of debt		(418)	0	(11,446)	0
Other		(244)	383	(280)	(816)
Equity in income (loss) of subsidiaries		0	0	0	0
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net		6,322	3,254	13,185	15,077
Content library		7,723	24,703	40,849	34,659
Prepaid expenses and other current assets		(759)	(18,976)	5,263	(22,082)
Other assets		170	154	333	322
Accounts payable		(17,055)	(20,617)	(52,460)	(17,697)
Accrued payable to retailers		10,248	6,931	(14,398)	(11,510)
Other accrued liabilities		(4,552)	(12,008)	11,521	1,112
Net cash flows from (used in) operating activities	[2]	75,020	75,143	142,225	181,215	[3]
Investing Activities:
Purchases of property and equipment		(14,921)	(19,508)	(28,374)	(40,217)
Proceeds from sale of property and equipment		18	2,817	92	2,940
Investments in and advances to affiliates				0	0
Net cash flows from (used in) investing activities	[2]	(14,903)	(16,691)	(28,282)	(37,277)	[3]
Financing Activities:
Proceeds from new borrowing on Credit Facility		91,000	77,000	176,000	112,000
Principal payments on Credit Facility		(135,687)	(68,875)	(244,000)	(185,750)
Repurchases of notes		(2,179)	0	(47,507)	0
Dividends paid		(10,084)	(5,417)	(15,122)	(11,019)
Repurchases of common stock		0	(22,023)	0	(62,731)
Principal payments on capital lease obligations and other debt		(1,451)	(3,033)	(3,077)	(6,278)
Windfall excess tax benefits related to share-based payments		0	160	0	686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options		(47)	1,887	(1,472)	(1,201)
Net cash flows from (used in) financing activities	[2]	(58,448)	(20,301)	(135,178)	(154,293)	[3]
Effect of exchange rate changes on cash		(1,471)	1,623	(2,266)	5,367
Increase (decrease) in cash and cash equivalents		198	39,774	(23,501)	(4,988)
Cash and cash equivalents:
Beginning of period		198,850	197,934	222,549	242,696
End of period		199,048	237,708	199,048	237,708
Eliminations and Consolidation Reclassifications
Operating Activities:
Net income (loss)		(30,940)	49,820	(59,128)	(8,913)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other				0	0
Amortization of intangible assets				0	0
Share-based payments expense				0	0
Windfall excess tax benefits related to share-based payments					0
Deferred income taxes				0	0
Restructuring, impairment and related costs				0	0
Loss from equity method investment, net		0	0	0	0
Amortization of deferred financing fees and debt discount				0	0
Goodwill impairment			0		0
Gain from early extinguishment of debt				0
Other				0	0
Equity in income (loss) of subsidiaries		30,940	(49,820)	59,128	8,913
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net				0	0
Content library				0	0
Prepaid expenses and other current assets				0	0
Other assets				0	0
Accounts payable				0	0
Accrued payable to retailers				0	0
Other accrued liabilities				0	0
Net cash flows from (used in) operating activities				0	0	[3]
Investing Activities:
Purchases of property and equipment				0	0
Proceeds from sale of property and equipment				0	0
Investments in and advances to affiliates				0	0
Net cash flows from (used in) investing activities				0	0	[3]
Financing Activities:
Proceeds from new borrowing on Credit Facility				0	0
Principal payments on Credit Facility				0	0
Repurchases of notes				0
Dividends paid				0	0
Repurchases of common stock					0
Principal payments on capital lease obligations and other debt				0	0
Windfall excess tax benefits related to share-based payments					0
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options				0	0
Net cash flows from (used in) financing activities				0	0	[3]
Effect of exchange rate changes on cash				0	0
Increase (decrease) in cash and cash equivalents				0	0
Cash and cash equivalents:
Beginning of period				0	0
End of period		0	0	0	0
Outerwall Inc. | Reportable Legal Entities
Operating Activities:
Net income (loss)		40,548	(45,616)	78,999	(10,017)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other				12,961	12,700
Amortization of intangible assets				7	7
Share-based payments expense				6,984	3,681
Windfall excess tax benefits related to share-based payments					(686)
Deferred income taxes				(1,559)	(8,029)
Restructuring, impairment and related costs				57	136
Loss from equity method investment, net		208	133	415	265
Amortization of deferred financing fees and debt discount				1,251	1,385
Goodwill impairment			0		0
Gain from early extinguishment of debt				(11,446)
Other				(242)	(265)
Equity in income (loss) of subsidiaries		(29,938)	53,255	(56,407)	14,935
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net				2,343	(357)
Content library				0	0
Prepaid expenses and other current assets				5,229	(17,957)
Other assets				0	47
Accounts payable				(2,539)	(2,022)
Accrued payable to retailers				(3,022)	479
Other accrued liabilities				6,872	1,674
Net cash flows from (used in) operating activities				39,903	(4,024)	[3]
Investing Activities:
Purchases of property and equipment				(16,424)	(13,869)
Proceeds from sale of property and equipment				0	17
Investments in and advances to affiliates				104,336	161,753
Net cash flows from (used in) investing activities				87,912	147,901	[3]
Financing Activities:
Proceeds from new borrowing on Credit Facility				176,000	112,000
Principal payments on Credit Facility				(244,000)	(185,750)
Repurchases of notes				(47,507)
Dividends paid				(15,122)	(11,019)
Repurchases of common stock					(62,731)
Principal payments on capital lease obligations and other debt				(2,902)	(6,080)
Windfall excess tax benefits related to share-based payments					686
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options				(1,472)	(1,201)
Net cash flows from (used in) financing activities				(135,003)	(154,095)	[3]
Effect of exchange rate changes on cash				(250)	574
Increase (decrease) in cash and cash equivalents				(7,438)	(9,644)
Cash and cash equivalents:
Beginning of period				160,167	180,889
End of period		152,729	171,245	152,729	171,245
Combined Guarantor Subsidiaries | Reportable Legal Entities
Operating Activities:
Net income (loss)		29,938	(53,255)	56,407	(14,935)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other				55,130	74,892
Amortization of intangible assets				7,573	6,611
Share-based payments expense				2,520	3,511
Windfall excess tax benefits related to share-based payments					0
Deferred income taxes				(17,300)	(3,903)
Restructuring, impairment and related costs				304	1,544
Loss from equity method investment, net		0	0	0	0
Amortization of deferred financing fees and debt discount				0	0
Goodwill impairment			85,890		85,890
Gain from early extinguishment of debt				0
Other				(38)	176
Equity in income (loss) of subsidiaries		(1,002)	(3,435)	(2,721)	(23,848)
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net				9,605	14,773
Content library				40,849	31,236
Prepaid expenses and other current assets				(207)	(4,455)
Other assets				291	245
Accounts payable				(49,970)	(13,438)
Accrued payable to retailers				(5,109)	(10,682)
Other accrued liabilities				5,993	426
Net cash flows from (used in) operating activities				103,327	148,043	[3]
Investing Activities:
Purchases of property and equipment				(10,989)	(25,818)
Proceeds from sale of property and equipment				92	2,923
Investments in and advances to affiliates				(94,347)	(119,126)
Net cash flows from (used in) investing activities				(105,244)	(142,021)	[3]
Financing Activities:
Proceeds from new borrowing on Credit Facility				0	0
Principal payments on Credit Facility				0	0
Repurchases of notes				0
Dividends paid				0	0
Repurchases of common stock					0
Principal payments on capital lease obligations and other debt				0	0
Windfall excess tax benefits related to share-based payments					0
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options				0	0
Net cash flows from (used in) financing activities				0	0	[3]
Effect of exchange rate changes on cash				0	0
Increase (decrease) in cash and cash equivalents				(1,917)	6,022
Cash and cash equivalents:
Beginning of period				19,372	17,939
End of period		17,455	23,961	17,455	23,961
Combined Non-Guarantor Subsidiaries | Reportable Legal Entities
Operating Activities:
Net income (loss)		1,002	3,435	2,721	23,848
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other				2,015	6,126
Amortization of intangible assets				0	44
Share-based payments expense				0	0
Windfall excess tax benefits related to share-based payments					0
Deferred income taxes				301	7,993
Restructuring, impairment and related costs				0	0
Loss from equity method investment, net		0	0	0	0
Amortization of deferred financing fees and debt discount				0	0
Goodwill impairment			0		0
Gain from early extinguishment of debt				0
Other				0	(727)
Equity in income (loss) of subsidiaries		0	0	0	0
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net				1,237	661
Content library				0	3,423
Prepaid expenses and other current assets				241	330
Other assets				42	30
Accounts payable				49	(2,237)
Accrued payable to retailers				(6,267)	(1,307)
Other accrued liabilities				(1,344)	(988)
Net cash flows from (used in) operating activities				(1,005)	37,196	[3]
Investing Activities:
Purchases of property and equipment				(961)	(530)
Proceeds from sale of property and equipment				0	0
Investments in and advances to affiliates				(9,989)	(42,627)
Net cash flows from (used in) investing activities				(10,950)	(43,157)	[3]
Financing Activities:
Proceeds from new borrowing on Credit Facility				0	0
Principal payments on Credit Facility				0	0
Repurchases of notes				0
Dividends paid				0	0
Repurchases of common stock					0
Principal payments on capital lease obligations and other debt				(175)	(198)
Windfall excess tax benefits related to share-based payments					0
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options				0	0
Net cash flows from (used in) financing activities				(175)	(198)	[3]
Effect of exchange rate changes on cash				(2,016)	4,793
Increase (decrease) in cash and cash equivalents				(14,146)	(1,366)
Cash and cash equivalents:
Beginning of period				43,010	43,868
End of period		$ 28,864	$ 42,502	$ 28,864	$ 42,502

[1] The non-cash restructuring, impairment and related costs in the six months ended June 30, 2015 of $1.7 million is composed of $6.9 million in impairments of lease related assets partially offset by a $5.2 million benefit resulting from the lease termination.

[2] During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in the 2015 periods presented. See Note 10: Discontinued Operations for cash flow disclosures related to our discontinued Redbox operations in Canada.

[3] During the first quarter of 2015 we discontinued our Redbox operations in Canada. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in all periods presented. See Note 10: Discontinued Operations for cash flow disclosures related to our discontinued Redbox operations in Canada.

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Income Taxes From Continuing Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Effective tax rate from continuing operations	34.10%	(62.40%)	34.80%	113.40%
Federal statutory rate	35.00%	35.00%	35.00%	35.00%
Non-tax deductible goodwill impairment charge	$ 0	$ 85,890	$ 0	$ 85,890

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Subsequent Events (Details) - Subsequent Event [Member]	Jul. 24, 2016 $ / shares
Subsequent Event [Line Items]
Dividends payable, date declared	Jul. 24, 2016
Common stock, dividends declared per share (in usd per share)	$ 0.60
Dividends payable, date to be paid	Sep. 06, 2016
Dividends payable, date of record	Aug. 23, 2016
Merger agreement, price per share	$ 52.00