Outerwall 8-K Unaudited Pro Forma Condensed Consolidated Financial Statements

Exhibit 99.1

Unaudited Pro Forma Condensed Consolidated Financial Statements

On September 8, 2009, we sold our subsidiaries comprising our entertainment services business (the “Entertainment Business”) to National Entertainment Network, Inc. (“National”) for a nominal consideration. National has assumed the operations of the Entertainment Business, including substantially all of the Entertainment Business’s related assets and liabilities. We anticipate that the disposition will be reported under discontinued operations in our Consolidated Statement of Operations for the third quarter of 2009 in our Quarterly Report on Form 10-Q.

The following unaudited pro forma condensed consolidated financial statements are based on and should be read in conjunction with our historical consolidated financial statements and related notes included in our Current Report on Form 8-K filed with the SEC on August 24, 2009 for the recast of our 2008 financial statements and our unaudited consolidated financial statements included in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2009 and June 30, 2008.

The following unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2009 and June 30, 2008 as well as the twelve months ended December 31, 2008, 2007 and 2006 are prepared as though the sale of the Entertainment Business occurred as of the beginning of each of the periods presented and the operating results from the Entertainment Business are excluded from our condensed consolidated financial statements. The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 is prepared as if the sale of the Entertainment Business occurred as of June 30, 2009. Pro forma adjustments are described in the Notes to Unaudited Pro Forma Condensed Consolidated Statements, and are based upon available information and certain assumptions that we believe are reasonable. The allocations are preliminary in nature and subject to change following the transaction based on refinements as actual data become available.

The following unaudited pro forma condensed consolidated financial statements are presented for illustrative and informational purposes only and are not intended to represent or be indicative of the financial condition or results of operations that would actually have been recorded if the sale of the Entertainment Business had occurred as of or during the periods presented. In addition, the unaudited pro forma condensed consolidated financial statements are not intended to represent our financial position or results of operations for any future date or period.

COINSTAR, INC.

Pro Forma Condensed Consolidated Balance Sheet

June 30, 2009

(in thousands)

(unaudited)

	Coinstar Consolidated Historical		Pro Forma Adjustments			Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	58,407	$	(2,500	)(2)	$	55,907
Cash in machine or in transit		48,712		(1,956	)(1)		46,756
Cash being processed		81,133		(4,667	)(1)		76,466
Accounts receivable, net		60,468		(1,010	)(1)		59,458
Inventory		97,438		(15,583	)(1)		81,855
Deferred income taxes		7,191		(1,244	)(1)		5,947
Prepaid expenses and other current assets		27,407		(2,512	)(1)		24,895
Total current assets		380,756		(29,472	)		351,284
Property and equipment, net		384,912		(33,443	)(1)		351,469
Deferred income taxes		41,713		83,965	(1), (2), (3)		125,678
Other assets		12,494		(2,915	)(1)		9,579
Intangible assets, net		39,038		(4,500	)(1), (4)		34,538
Goodwill		290,300		—			290,300
Total assets	$	1,149,213	$	13,635		$	1,162,848
LIABILITIESAND EQUITY
Current Liabilities:
Account payable	$	109,697	$	(5,966	)(1)	$	103,731
Accrued payable to retailers and agents		129,687		(4,667	)(1)		125,020
Other accrued liabilities		78,186		(3,127	)(1), (2)		75,059
Current portion of long-term debt		6,545		—			6,545
Current portion of capital lease obligations		19,374		(2,583	)(1)		16,791
Total current liabilities		343,489		(16,343	)		327,146
Long-term debt and other		459,144		(389	)(1)		458,755
Capital lease obligations		15,641		(818	)(1)		14,823
Deferred tax liability		1,750		—			1,750
Total liabilities		820,024		(17,550	)		802,474
Total equity		329,189		31,185	(1), (2), (3)		360,374
Total liabilities and equity	$	1,149,213	$	13,635		$	1,162,848

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

COINSTAR, INC.

Pro Forma Condensed Consolidated Statement of Operations

Six Months Ended June 30, 2009

(in thousands, except per share data)

(unaudited)

	Coinstar Consolidated Historical			Pro Forma Adjustments			Pro Forma
Revenue	$	585,123		$	(64,307	)(1)	$	520,816
Expenses:
Direct operating		416,179			(60,775	)(1)		355,404
Marketing		10,849			(77	)(1)		10,772
Research and development		2,556			—			2,556
General and administrative		67,385			(3,431	)(1)		63,954
Depreciation and other		48,858			(5,426	)(1)		43,432
Amortization of intangible assets		4,372			(460	)(1)(7)		3,912
Income from operations		34,924			5,862			40,786
Other income (expense):
Foreign currency loss and other, net		(63	)		(6	)(1)		(69	)
Interest income		161			(7	)(1)		154
Interest expense		(15,186	)		48	(1)		(15,138	)
Income before income taxes		19,836			5,897			25,733
Income tax expense		(7,288	)		(2,182	)(1)		(9,470	)(5)
Net income before non-controlling interests		12,548			3,715			16,263
Less: Net income attributable to non-controlling interests		(3,627	)		—			(3,627	)
Net income attributable to Coinstar, Inc.	$	8,921		$	3,715		$	12,636
Earning per share:
Basic	$	0.30					$	0.43
Diluted	$	0.30					$	0.42
Weighted shares outstanding:
Basic		29,525						29,525
Diluted		29,893						29,893

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

COINSTAR, INC.

Pro Forma Condensed Statement of Operations

Six Months Ended June 30, 2008

(in thousands, except per share data)

(unaudited)

	Coinstar Consolidated Historical			Pro Forma Adjustments			Pro Forma
REVENUE	$	410,422		$	(80,057	)(1)	$	330,365
EXPENSES
Direct operating		281,819			(71,930	)(1)		209,889
Marketing		6,618			(44	)(1)		6,574
Research and development		2,421			—			2,421
General and administrative		45,802			(3,010	)(1)		42,792
Depreciation and other		35,826			(9,214	)(1)		26,612
Amortization of intangible assets		4,640			(458	)(1)(7)		4,182
Proxy, write-off of acquisition costs and litigation settlement		3,084			—			3,084
Income from operations		30,212			4,599			34,811
OTHER INCOME (EXPENSE):
Foreign currency loss and other, net		(2,018	)		(40	)(1)		(2,058	)
Interest income		885			(2	)(1)		883
Interest expense		(10,822	)		143	(1)		(10,679	)
Loss from equity investments		(337	)		—			(337	)
Income before income taxes		17,920			4,700			22,620
Income tax expense		(5,097	)		(1,818	)(1)		(6,915	)(5)
NET INCOME before non-controlling interests		12,823			2,882			15,705
Less: Net income attributable to non-controlling interests		(7,442	)		—			(7,442	)
NET INCOME attributable to Coinstar, Inc	$	5,381		$	2,882		$	8,263
EARNINGS PER SHARE:
Basic	$	0.19					$	0.30
Diluted	$	0.19					$	0.29
WEIGHTED SHARES OUTSTANDING:
Basic		27,903						27,903
Diluted		28,418						28,418

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

COINSTAR, INC.

Pro Forma Condensed Consolidated Statement of Operations

Twelve Months Ended December 31, 2008

(in thousands, except per share data)

(unaudited)

	Coinstar Consolidated Historical			Pro Forma Adjustments			Pro Forma
Revenue	$	911,900		$	(150,219	)(1)	$	761,681
Expenses:
Direct operating		634,285			(134,474	)(1)		499,811
Marketing		19,303			(106	)(1)		19,197
Research and development		4,758			—			4,758
General and administrative		95,234			(6,442	)(1)		88,792
Depreciation and other		76,661			(15,192	)(1)		61,469
Amortization of intangible assets		9,124			(918	)(1)(7)		8,206
Proxy, write-off of acquisition costs and litigation settlement		3,084			—			3,084
Income from operations		69,451			6,913			76,364
Other income (expenses):
Foreign currency loss and other, net		(3,876	)		(52	)(1)		(3,928	)
Interest income		1,220			(2	)(1)		1,218
Interest expense		(21,716	)		190	(1)		(21,526	)
Loss from equity investments		(337	)		—			(337	)
Income before income taxes		44,742			7,049			51,791
Income tax expense		(16,194	)		(2,096	)(1)		(18,290	)(6)
Net income before non-controlling interests		28,548			4,953			33,501
Less: Net income attributable to non-controlling interests		(14,436	)		—			(14,436	)
Net income attributable to Coinstar, Inc.	$	14,112		$	4,953		$	19,065
Earning per share:
Basic	$	0.50					$	0.68
Diluted	$	0.50					$	0.67
Weighted shares outstanding:
Basic		28,041						28,041
Diluted		28,464						28,464

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

COINSTAR, INC.

Pro Forma Condensed Statement of Operations

Twelve Months Ended December 31, 2007

(in thousands, except per share data)

(unaudited)

	Coinstar Consolidated Historical			Pro Forma Adjustments			Pro Forma
REVENUE	$	546,297		$	(238,912	)(1)	$	307,385
EXPENSES
Direct operating		356,042			(203,241	)(1)		152,801
Marketing		11,899			(427	)(1)		11,472
Research and development		5,153			—			5,153
General and administrative		55,193			(11,826	)(1)		43,367
Depreciation and other		58,841			(29,023	)(1)		29,818
Amortization of intangible assets		7,331			(2,123	)(1)(7)		5,208
Impairment loss and excess inventory charge		65,220			(65,220	)(1)		—
Income (loss) from operations		(13,382	)		72,948			59,566
OTHER INCOME (EXPENSE):
Foreign currency loss and other, net		650			(16	)(1)		634
Interest income		1,698			(24	)(1)		1,674
Interest expense		(17,069	)		569	(1)		(16,500	)
Loss from equity investments		1,333			—			1,333
Early retirement of debt		(1,794	)		—			(1,794	)
Income (loss) before income taxes		(28,564	)		73,477			44,913
Income tax expense		6,311			(28,429	)(1)		(22,118	)(6)
NET INCOME (LOSS) before non-controlling interests		(22,253	)		45,048			22,795
Less: Net income attributable to non-controlling interests.		—			—			—
NET INCOME (LOSS) attributable to Coinstar, Inc.	$	(22,253	)	$	45,048		$	22,795
EARNINGS PER SHARE:
Basic	$	(0.80	)				$	0.82
Diluted	$	(0.80	)				$	0.82
WEIGHTED SHARES OUTSTANDING:
Basic		27,805						27,805
Diluted		27,805						27,805

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

Coinstar, Inc.

Pro Forma Condensed Statement of Operations

Twelve Months Ended December 31, 2006

(in thousands, except per share data)

(unaudited)

	Coinstar Consolidated Historical			Pro Forma Adjustments			Pro Forma
REVENUE	$	534,442		$	(273,490	)(1)	$	260,952
EXPENSES
Direct operating		359,534			(216,782	)(1)		142,752
Marketing		14,420			(309	)(1)		14,111
Research and development		5,246			—			5,246
General and administrative		50,977			(17,213	)(1)		33,764
Depreciation and other		52,836			(25,301	)(1)		27,535
Amortization of intangible assets		6,220			(2,142	)(1)(7)		4,078
Income from operations		45,209			(11,743	)		33,466
OTHER INCOME (EXPENSE):
Foreign currency loss and other, net		161			(48	)(1)		113
Interest income		1,382			(39	)(1)		1,343
Interest expense		(15,748	)		442	(1)		(15,306	)
Loss from equity investments		(66	)		—			(66	)
Early retirement of debt		(238	)		—			(238	)
Income before income taxes		30,700			(11,388	)		19,312
Income tax expense		(12,073	)		4,531	(1)		(7,542	)(6)
NET INCOME before non-controlling interests		18,627			(6,857	)		11,770
Less: Net income attributable to non-controlling interests		—			—			—
NET INCOME attributable to Coinstar, Inc	$	18,627		$	(6,857	)	$	11,770
EARNINGS PER SHARE:
Basic	$	0.67					$	0.43
Diluted	$	0.66					$	0.42
WEIGHTED SHARES OUTSTANDING:
Basic		27,686						27,686
Diluted		28,028						28,028

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

COINSTAR, INC.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

1. Reflects the elimination of the financial operations, assets, liabilities and accumulated other comprehensive income amounts associated with the Entertainment Business.

2. Reflects the cash contribution and accrued costs related to the sale of the Entertainment Business.

3. Reflects (a) the elimination of deferred taxes related to the assets and liabilities of the Entertainment Business offset by (b) the anticipated tax loss carryforward to be realized upon the disposition of the Entertainment Business.

4. Represents the value of our customer relationship intangible assets attributable from those customers who have contracts with the Entertainment Business exclusively.

5. The pro forma income tax expense for the six months ended June 30, 2009 and 2008 is calculated based on our consolidated results with and without the Entertainment Business’s results of operations. This results in an effective tax rate attributable to Coinstar, Inc. of 42.8% and 45.6%, respectively.

6. The pro forma income tax expense for the twelve months ended December 31, 2008, 2007 and 2006 is calculated based on our consolidated results with and without the Entertainment Business’s results of operations. This results in an effective tax rate attributable to Coinstar, Inc. of 49.0%, 49.2% and 39.1%, respectively.

7. The pro forma adjustment for the amortization of the intangible assets is related to the intangible assets of the Entertainment Business as described in note 3 above.