CARDTRONICS INC (Form: 10-Q, Received: 11/04/2013 16:04:23)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)

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

	For the quarterly period ended September 30 , 2013

or

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

	For the transition period from____ to____

Commission File Number: 001-33864

________________________________

CARDTRONICS, INC.

(Exact name of registrant as specified in its charter)


Delaware	76-0681190
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)


3250 Briarpark Drive, Suite 400	77042
Houston, TX	(Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code: (832) 308-4000

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.

Yes þ No o

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 þ No o

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 definitions of "large accelerated filer," "accelerated filer'' and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a 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 o No þ

Common Stock, par value: $0.0001 per share. Shares outstanding on October 31 , 201 3 : 4 5 , 004 , 612


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CARDTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, excluding share and per share amounts)



	September 30, 2013		December 31, 2012
		(U naudited)
ASSETS
Current assets:
Cash and cash equivalents	$	18,556	$	13,861
Accounts and notes receivable, net of allowance of $449 and $476 as of September 30, 2013 and December 31, 2012, respectively		49,971		45,135
Inventory		5,326		4,389
Restricted cash		27,828		8,298
Current portion of deferred tax asset, net		19,654		13,086
Prepaid expenses, deferred costs, and other current assets		21,832		30,980
Total current assets		143,167		115,749
Property and equipment, net		251,999		236,238
Intangible assets, net		175,827		102,573
Goodwill		390,296		285,696
Deferred tax asset, net		3,353		26,468
Prepaid expenses, deferred costs, and other assets		2,818		2,168
Total assets	$	967,460	$	768,892

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and notes payable	$	1,387	$	1,467
Current portion of other long-term liabilities		30,328		24,386
Accounts payable		27,377		21,593
Accrued liabilities		124,496		80,112
Current portion of deferred tax liability, net		1,178		1,179
Total current liabilities		184,766		128,737
Long-term liabilities:
Long-term debt		456,383		353,352
Asset retirement obligations		59,502		44,696
Deferred tax liability, net		2,831		182
Other long-term liabilities		50,539		93,121
Total liabilities		754,021		620,088

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.0001 par value; 125,000,000 shares authorized; 51,141,278 and 50,569,875 shares issued as of September 30, 2013 and December 31, 2012, respectively; 44,990,125 and 44,641,224 shares outstanding as of September 30, 2013 and December 31, 2012, respectively		5		5
Additional paid-in capital		281,775		252,956
Accumulated other comprehensive loss, net		(80,313)		(105,085)
Retained earnings		74,210		57,861
Treasury stock; 6,151,153 and 5,928,651 shares at cost as of September 30, 2013 and December 31, 2012, respectively		(62,187)		(58,270)
Total parent stockholders’ equity		213,490		147,467
Noncontrolling interests		(51)		1,337
Total stockholders’ equity		213,439		148,804
Total liabilities and stockholders’ equity	$	967,460	$	768,892

See accompanying notes to consolidated financial statements.

CARDTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, excluding share and per share amounts)

(Unaudited)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012

Revenues:
ATM operating revenues	$	222,678	$	191,469	$	619,637	$	550,849
ATM product sales and other revenues		6,141		7,560		14,904		31,240
Total revenues		228,819		199,029		634,541		582,089
Cost of revenues:
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization shown separately below. See Note 1 )		154,319		130,064		417,361		374,312
Cost of ATM product sales and other revenues		5,950		6,665		14,307		27,925
Total cost of revenues		160,269		136,729		431,668		402,237
Gross profit		68,550		62,300		202,873		179,852
Operating expenses:
Selling, general, and administrative expenses		21,073		15,292		58,994		47,956
Acquisition-related expenses		3,536		381		7,542		1,858
Depreciation and accretion expense		16,890		15,758		49,056		44,243
Amortization expense		7,998		5,565		19,827		16,452
Loss (gain) on disposal of assets		109		(28)		469		784
Total operating expenses		49,606		36,968		135,888		111,293
Income from operations		18,944		25,332		66,985		68,559
Other expense (income):
Interest expense, net		5,445		5,269		15,570		15,966
Amortization of deferred financing costs		275		225		735		669
Other income		(559)		(1,037)		(3,030)		(1,088)
Total other expense		5,161		4,457		13,275		15,547
Income before income taxes		13,783		20,875		53,710		53,012
Income tax expense		22,765		8,169		38,779		20,684
Net (loss) income		(8,982)		12,706		14,931		32,328
Net loss attributable to noncontrolling interests		(574)		(191)		(1,418)		(62)
Net (loss) income attributable to controlling interests and available to common stockholders	$	(8,408)	$	12,897	$	16,349	$	32,390

Net (loss) income per common share – basic	$	(0.19)	$	0.29	$	0.36	$	0.72
Net (loss) income per common share – diluted	$	(0.19)	$	0.28	$	0.36	$	0.71

Weighted average shares outstanding – basic		44,477,023		43,669,756		44,373,627		43,333,407
Weighted average shares outstanding – diluted		44,477,023		44,045,021		44,593,624		43,783,534

See accompanying notes to consolidated financial statements.

CARDTRONICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012

Net (loss) income	$	(8,982)	$	12,706	$	14,931	$	32,328
Unrealized (losses) gains on interest rate swap contracts, net of deferred income tax (benefit) expense of $(1,728) and $(3,045) for the three months ended September 30, 2013 and 2012, respectively, and $12,253 and $(18,095) for the nine months ended September 30, 2013 and 2012, respectively		(2,861)		(4,994)		20,390		(28,239)
Foreign currency translation adjustments		8,919		2,403		4,382		2,705
Other comprehensive income (loss)		6,058		(2,591)		24,772		(25,534)
Total comprehensive (loss) income		(2,924)		10,115		39,703		6,794
Less: comprehensive (loss) income attributable to noncontrolling interests		(568)		(87)		(1,387)		64
Comprehensive (loss) income attributable to controlling interests	$	(2,356)	$	10,202	$	41,090	$	6,730

See accompanying notes to consolidated financial statements.

CARDTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Nine Months Ended September 30,
	2013		2012
Cash flows from operating activities:
Net income	$	14,931	$	32,328
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, accretion, and amortization expense		68,883		60,695
Amortization of deferred financing costs		735		669
Stock-based compensation expense		8,915		8,691
Deferred income taxes		15,663		18,391
Loss on disposal of assets		469		784
Unrealized gain and amortization of accumulated other comprehensive gains associated with derivative instruments no longer designated as hedging instruments		—		(616)
Other reserves and non-cash items		3,703		2,293
Changes in assets and liabilities:
Increase in accounts and note receivable, net		(2,949)		(6,119)
Decrease (increase) in prepaid, deferred costs, and other current assets		14,037		(1,833)
Increase in inventory		(1,061)		(3,099)
(Increase) decrease in other assets		(1,497)		4,359
Increase (decrease) in accounts payable		1,081		(9,791)
Increase (decrease) in accrued liabilities		5,567		(6,767)
Decrease in other liabilities		(6,002)		(5,660)
Net cash provided by operating activities		122,475		94,325

Cash flows from investing activities:
Additions to property and equipment		(41,708)		(75,875)
Payments for exclusive license agreements, site acquisition costs, and other intangible assets		(3,894)		(4,717)
Acquisitions, net of cash acquired		(186,964)		(17,885)
Net cash used in investing activities		(232,566)		(98,477)

Cash flows from financing activities:
Proceeds from borrowings of long-term debt		275,977		207,900
Repayments of long-term debt and capital leases		(176,879)		(198,396)
Repayments of borrowings under bank overdraft facility, net		—		(162)
Debt issuance and modification costs		(761)		—
Payment of contingent consideration		(750)		—
Proceeds from exercises of stock options		2,060		5,128
Excess tax benefit from stock-based compensation expense		17,867		—
Repurchase of capital stock		(3,917)		(4,462)
Net cash provided by financing activities		113,597		10,008

Effect of exchange rate changes on cash		1,189		(335)
Net increase in cash and cash equivalents		4,695		5,521

Cash and cash equivalents as of beginning of period		13,861		5,576
Cash and cash equivalents as of end of period	$	18,556	$	11,097

Supplemental disclosure of cash flow information:
Cash paid for interest, including interest on capital leases	$	19,662	$	19,980
Cash paid for income taxes	$	3,845	$	3,292

See accompanying notes to consolidated financial statements.

CARDTRONICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) General and Basis of Presentation

General

Cardtronics, Inc., along with its wholly- and majority-owned subsidiaries (collectively, the "Company") provides convenient consumer financial services through its network of automated teller machines ("ATMs") and multi-function financial s ervices kiosks. As of September 30, 2013 , the Company provided services to over 80,400 devices across its portfolio, which included approximately 63,500 devices located in all 50 states of the United States ("U.S.") as well as in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, approximately 11,500 devices throughout the United Kingdom ("U.K."), approximately 800 devices throughout Germany , approximately 2,000 devices throughout Canada , and approximately 2,600 devices throughout Mexico . Included in the number of devices in the U.S. are approximately 2,200 multi-function financial services kiosks that, in addition to traditional ATM functions such as cash dispensing and bank account balance inquiries, perform other consumer financial services, including bill payments, check cashing, remote deposit capture (which is deposit taking at ATMs using electronic imaging), and money transfers. Also included in the total count of 80,400 devices are approximately 13,900 devices for which the Company provides various forms of managed services solutions, which may include services such as transaction processing, monitoring, maintenance, cash management, communications, and customer service.

Through its network, the Company provides ATM management and equipment-related services (typically under multi-year contracts) to large, nationally and regionally -known retail merchants as well as smaller retailers and operators of facilities such as shopping malls and airports. In doing so, the Company provides its retail partners with a compelling automated financial services solution that helps attract and retain customers, and in turn, increases the likelihood that the devices placed at their facilities will be utilized.

In addition to its retail merchant relationships, the Company also partners with leading national financial institutions to brand selected ATMs and financial services kiosks within its network, including Citibank, N.A., JPMorgan Chase Bank, N.A., Sovereign Bank, N.A., PNC Bank, N.A . , Frost Bank, The Bank of Nova Scotia (“Scotiabank”) in Canada , Mexico, and Puerto Rico , and Grupo Financiero Banorte, S.A. de C.V. in Mexico . As of September 30, 2013 , approximately 18,400 of the Company’s domestic devices , approximately 2,000 of the Company’s ATMs in Mexico, and approximately 500 of the Company’s ATMs in Canada were under contract with fin ancial institutions to place their logos on those machines, and to provide convenient surcharge-free access for their banking customers.

The Company also owns and operates the Allpoint network, the largest surcharge-free ATM network within the U . S . (based on the number of participating ATMs). The Allpoint network , which has more than 55,000 participating ATMs globally , provides surcharge-free ATM access to customers of participating financial institutions that lack a significant ATM network in exchange for either a fixed monthly fee per cardholder or a set fee per transaction that is paid by the financial institutions who are members of the network . The Allpoint network includes a majority of the Company’s ATMs in the U.S., U.K., Puerto Rico and Mexico, approximately a quarter of the Company’s ATMs in Canada, and over 5,000 locations in Australia through a partnership with a local ATM owner and operator in that market. Allpoint also works with financial institutions that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, including general purpose, payroll and electronic benefits transfer (“EBT”) cards. Under these programs, the issuing financial institutions pay Allpoint a fee per issued stored-value card or per transaction in return for allowing the users of those cards surcharge-free access to Allpoint’s participating ATM network.

Finally, the Company owns and operates an electronic funds transfer (“EFT”) transaction processing platform that provides transaction processing services to its network of ATMs and financial services kiosks as well as other ATMs under managed services arrangements.

Basis of Presentation

This Quarterly Report on Form 10-Q (this "Form 10-Q") has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to interim financial information. Because this is an interim period filing presented using a condensed format, it does not include all of the disclosures required by accounting principles generally accepted in the United States ("U.S. GAAP"), although the Company believes that the disclosures are adequate to make the information not misleading. You should read this Form 10-Q along with the Company's Annual Report on Form 10-K for the year ended December 31, 2012 ( the " 2012 Form 10-K"), which includes a summary of the Company's significant accounting policies and other disclosures.

The financial statements as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 are unaudited. The Consolidated Balance Sheet as of December 31, 2012 was derived from the audited balance sheet filed in the 2012 Form 10-K. In management's opinion, all normal recurring adjustments necessary for a fair presentation of the Company's interim and prior period results have been made. The results of operations for the three and nine months ended September 30, 2013 and 2012 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year.

The unaudited interim consolidated financial statements include the accounts of Cardtronics, Inc. and its wholly and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Because the Company owns a majority ( 51.0 %) interest in, and realizes a majority of the earnings and/or losses of, Cardtronics Mexico, S.A. de C.V. (“Cardtronics Mexico”) , this entity is reflected as a consolidated subsidiary in the accompanying consolidated financial statements, with the remaining ownership interests not held by the Company being reflected as noncontrolling interests.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and these differences could be material to the financial statements.

Cost of ATM Operating Revenues and Gross Profit Presentation

The Company presents Cost of ATM operating revenues and Gross profit within its Consolidated Statements of Operations exclusive of depreciation, accretion, and amortization expense related to ATMs and ATM-related assets. The following table sets forth the amounts excluded from Cost of ATM operating revenues and Gross profit for the periods indicated:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In thousands)
Depreciation and accretion expenses related to ATMs and ATM-related assets	$	14,846	$	13,983	$	42,982	$	39,580
Amortization expense		7,998		5,565		19,827		16,452
Total depreciation, accretion, and amortization expenses excluded from Cost of ATM operating revenues and Gross profit	$	22,844	$	19,548	$	62,809	$	56,032

(2) Acquisitions

Acquisition of the Ca rdpoint ATM Portfolio

On August 7, 2013 , Cardtronics Europe Limited (“Cardtronics Europe”), a newly formed wholly-owned subsidiary of the Company , entered into , and consummated the transactions contemplated by, the Share Sale and Purchase Agreement (the “Purchase Agreement”) including the purchas e of all of the outstanding shares issued by Cardpoint Limited (“Cardpoint”) from Payzone Ventures Limited (the “Seller”) and the individuals named as warrantors in the Purchase Agreement .

Pursuant to the Purchase Agreement, Cardtronics Europe acquired all of the outstanding shares issued by Cardpoint for purchase consideration of £ 100.0 million ($153.5 million ) in cash , which include d the aggregate amount required to be paid (including principal and interest) in order to fully discharge all of Cardpoint’s outstanding indebtedness to the Seller at closing. Additionally, as part of the Purchase Agreement, Cardtronics Europe entered into a locked box agreement, under which additional cash at closing was paid to the Seller in the amount of approximately £5 .9 million ( $9. 0 million ) as additional consideration for earnings since February 28, 2013. No further working capital adjustments are required under the Purchase Agreement. The Company also paid to certain members of Cardpoint’s management transaction bonuses on behalf of the Seller in an aggregate amount of approximately £ 0.5 million ( $0. 7 million ), pursuant to the Purchase Agreement. The total amount paid for the acquisition was approximately £105 . 4 million ($161.8 million) at closing, which was financed through borrowings under the Company’s amended revolving credit facility .

As a result of the Cardpoint acquisition, the Company significantly increase d the size of its European operations. Cardpoint operated approximately 7,100 ATMs in the U.K. and approximately 800 ATMs in Germa ny, substantially all of which we re owned by Cardpoint. Approximately one fourth of the ATMs deployed in the U.K. are placed with well-known multi-location retailers, whereas the remainder of the ATMs in the U.K., and most of the ATMs in Germany, are primarily placed with individual merchants at their retail locations.

The results of operations of the acquired Ca rdpoint portfolio have been included in the Company's consolidated statement of operations subsequent to the August 7, 2013 acquisition date. Revenue and net income of $1 7.8 million and $ 3.5 m illion, respectively, were included in both the three and nine month periods ended September 30, 201 3 . The earnings contribution ex cludes approximately $ 3.6 million in acquisition-related expenses incurred during the quarter related to this acquisition . The acquisition-related expenses incurred year-to-date for this acquisition totaled $ 4.5 million.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (amounts in thousands). The total purchase consideration was allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the date of acquisition. This allocation resulted in goodwill of approximately $ 81.3 million, all of which has been assigned to the Company's Europe reporting segment, which now includes operations from both the U.K. and Germany. The recognized goodwill is primarily attributable to expected synergies. None o f the goodwill or intangible

asset amount s are expected to be deductible for income tax purposes. The Company expects to complete its purchase accounting during the fourth quarter of 2013 , when it plans to finalize the fair value measurement of acquired assets and assumed liabilities .



	(In thousands)
Cash and cash equivalents	$	4,782
Accounts and notes receivable		619
Inventory		863
Restricted cash		7,522
Prepaid expenses, deferred costs, and other current assets		6,665
Property and equipment		25,052
Deferred tax assets		8,317
Intangible assets		73,874
Goodwill		81,282
Total assets acquired		208,976

Accounts payable		6,051
Accrued liabilities		24,393
Deferred revenue		58
Asset retirement obligations		16,645
Total liabilities assumed		47,147

Net assets acquired	$	161,829

The fair values of intangible assets acquired have been initially estimated by utilizing a discounted cash flow approach, with the assistance of an independent appraisal firm. The intangible assets acquired as part of the Cardpoint acquisition are being amortized on a straight-line basis, and the preliminary fair values consist of the following:


	Fair Values		Useful Lives	Weighted Average Period Before Next Renewal
Customer contracts	$	62,824	7 years	3.9 years
Trade name		9,556	5 years	N/A
Non-compete agreements		1,494	3 years	N/A
Total	$	73,874

Pro Forma Results of Operations

The following table presents the unaudited pro forma combined results of operations of the Company and the acquired Cardpoint portfolios for the three and nine months ended September 30, 2013 and 2012, after giving effect to certain pro forma adjustments including: (i) amortization o f acquired intangible assets , (ii) the impact of certain fair value adjustments such as depreciation on the acquired property and equipment, and (iii) interest expense adjustment for historical long-term debt of Cardpoint that was repaid and interest expense on additional borrowings by the Company to fund the acquisition.



	Three Months Ended				Nine Months Ended
	September 30, 2013				September 30, 2013
	As Reported		Pro Forma		As Reported		Pro Forma
	(In thousands, excluding per share amounts)
Total revenues	$	228,819	$	239,423	$	634,541	$	697,017
Net (loss) income attributable to controlling interests and available to common stockholders		(8,408)		(3,626)		16,349		21,748

(Loss) e arnings per share – basic	$	(0.19)	$	(0.08)	$	0.36	$	0.48
(Loss) e arnings per share – diluted	$	(0.19)	$	(0.08)	$	0.36	$	0.47



	Three Months Ended				Nine Months Ended
	September 30, 2012				September 30, 2012
	As Reported		Pro Forma		As Reported		Pro Forma
	(In thousands, excluding per share amounts)
Total revenues	$	199,029	$	224,529	$	582,089	$	658,590
Net income attributable to controlling interests and available to common stockholders		12,897		13,119		32,390		26,818

Earnings per share – basic	$	0.29	$	0.29	$	0.72	$	0.60
Earnings per share – diluted	$	0.28	$	0.29	$	0.71	$	0.59

The unaudited pro forma financial results do not reflect the impact of other acquisition s consummated by the Company during the nine months ended September 30, 2013 (see further details below), as the impact would not be material to its condensed consolidated results of operations. The unaudited pro forma financial results assume that the Cardpoint acquisition occurred on January 1, 2012, and are not necessarily indicative of the actual results that would have occurred had those transactions been completed on that date. Furthermore, it does not reflect the impacts of any potential operating efficiencies, savings from expected synergies, or costs to integrate the operations. The unaudited pro forma financial results are not necessarily indicative of the future results to be expected for the consolidated operations.

Other Acquisitions

On March 7, 2013 , the Company completed the acquisition of i-design group plc (“i-design ” ), a Scotland-based provider and developer of marketing and advertising software and services for ATM owners . Additionally, on May 1, 2013 and June 3, 2013 , the Company acquired the majority of the assets of Aptus Group, LLC (“Aptus”) and Merrimak ATM Group, LLC (“Merrimak”) , respectively . Both Aptus and Merrimak were providers of ATM services to fleet s of approximately 3,300 ATMs and 4,800 ATMs, respectively, consisting primarily of merchant-owned machines.

The i-design , Aptus, and Merrim ak acquisitions, both on an individual basis and on a combined basis, did not have a material effect on the Company's consolidated results of operations during the three and nine months ended September 30, 2013 .

(3) Stock-Based Compensation

The Company calculates the fair value of stock-based awards granted to employees and directors on the date of grant and recognizes the calculated fair value, net of estimated forfeitures, as compensation expense over the requisite service periods of the related awards. The following table reflects the total stock-based compensation expense amounts included in the Company's Consolidated Statements of Operations for the periods indicated :



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In thousands)
Cost of ATM operating revenues	$	239	$	231	$	651	$	754
Selling, general, and administrative expenses		2,932		2,452		8,264		7,937
Total stock-based compensation expense	$	3,171	$	2,683	$	8,915	$	8,691

The in crease in stock-based compensation expense during the three and nine month s ended September 30, 2013 compared to the prior year was due to additional expense recognition from the additional grants made during the periods. All grants during the periods above were made under the Company's Amended and Restated 2007 Stock Incentive Plan (the "2007 Stock Incentive Plan").

Restricted Stock Awards . The number of the Company's outstanding Restricted Stock Awards (“ RSAs ”) as of September 30, 2013 , and changes during the nine month s ended September 30, 2013 , are presented below:



	Number of Shares		Weighted Average Grant Date Fair Value
RSAs outstanding as of January 1, 2013		632,107	$	16.36
Granted		97,401	$	26.86
Vested		(232,913)	$	14.57
Forfeited		(71,872)	$	24.30
RSAs outstanding as of September 30, 2013		424,723	$	18.38

As of September 30, 2013 , the unrecognized compensation expense associated with all outstanding restricted share grants was approximately $ 4.6 million , which will be recognized on a straight-line basis over a remaining weighted-average vesting period of approximately 2. 2 years .

Restricted Stock Units. In the first quarter of each year since 2011, the Company granted restricted stock units (“ RSUs ”) under its Long Term Incentive Plan ("LTIP "), which is an annual equity award program under the 2007 Stock Incentive Plan. The ultimate number of RSUs to be earned and outstanding are approved by the Compensation Committee of the Company's Board of Directors (the "Committee") on an annual basis , and are based on the Company's achievement of certain performance levels during the calendar year of its grant. The majority of these grants have both a performance-based and a service-based vesting schedule (“Performance - RSUs”) , and the Company recognizes the related compensation expense based on the estimated performance levels that management believes will ultimately be met. Starting with the grants made in 2013, a portion of the awards have only a service-based vesting schedule (“Time-RSUs”) , for which the associated expense is recognized ratably over four years . Performance-RSUs and Time- RSUs are convertible into the Company’s common stock after the passage of the vesting periods , which are 24 , 36 , and 48 months from January 31 of the grant year , at the rate of 50 %, 25 %, and 25 %, respectively . Performance- RSUs will be earned only if the Company achie ves certain performance levels . Although the RSUs are not considered to be earned and outstanding until at least the minimum performance metrics are met, the Company recognizes the related compensation expense over the requisite service period (or to an employee’s qualified retirement date, if earlier) using a graded vesting methodology. RSUs are also granted outside of LTIPs, with or without performance-based vesting requirements.

The number of the Company's non-vested RSUs as of September 30, 2013 , and changes during the nine months ended September 30, 2013 , are presented below:



	Number of Units		Weighted Average Grant Date Fair Value
Non-vested RSUs as of January 1, 2013		749,948	$	20.01
Granted		262,744	$	31.56
Vested		(261,503)	$	17.00
Forfeited		(12,529)	$	22.51
Non-vested RSUs as of September 30, 2013		738,660	$	25.14

The above table only includes earned RSUs; therefore, the Performance-RSUs granted in 2013 but not yet earned are not included, but the Time-RSUs are included as granted.

As of September 30, 2013 , the unrecognized compensation expense associated with earned RSUs was approximately $ 10.0 million, which will be recognized using a graded vesting schedule for Performance-RSUs and a straight-line vesting schedule for Time-RSUs, over a remaining weighted-average vesting period of approximately 2. 8 years .

Options. The number of the Company's outstanding stock options as of September 30, 2013 , and changes during the nine months ended September 30, 2013 , are presented below:



	Number of Shares		Weighted Average Exercise Price
Options outstanding as of January 1, 2013		552,799	$	9.68
Exercised		(212,499)	$	9.69
Forfeited		(1,875)	$	11.05
Options outstanding as of September 30, 2013		338,425	$	9.67

Options vested and exercisable as of September 30, 2013		332,675	$	9.64

As of September 30, 2013 , the unrecognized compensation expense associated with outstanding options was approximately $ 12 ,000 , which will be recognized on a straight-line basis over a remaining weighted-average vesting period of approximately 0. 4 yea rs .

(4) Earnings (L oss) per Share

The Company reports its earnings per share under the two-class method. Under this method, potentially dilutive securities are excluded from the calculation of diluted earnings per share (as well as their related impact on the n et income available to common stockholders ) when their impact on net income available to common stockholders is anti-dilutive. Potentially dilutive securities for the three and nine month s ended September 30, 2013 and 2012 included all outstanding stock options and shares of restricted stock, which were included in the calculation of diluted earnings per share for these periods.

Additionally, the shares of restricted stock issued by the Company have a non-forfeitable right to cash dividends, if and when declared by the Company. Accordingly, restricted shares are considered to be participating securities and, as such, the Company has allocated the undistributed earnings for the three and nine month s ended September 30, 2013 and 2012 among the Company's outstanding shares of common stock and issued but unvested restricted shares, as follows:

Earnings (L oss) per Share (in thousands, excluding share and per share amounts):



	Three Months Ended September 30, 2013						Nine Months Ended September 30, 2013
	Loss		Weighted Average Shares Outstanding		Loss Per Share		Income		Weighted Average Shares Outstanding		Earnings Per Share
Basic and Diluted:
Net (loss) income attributable to controlling interests and available to common stockholders	$	(8,408)					$	16,349
Less: Undistributed earnings allocated to unvested restricted shares								(449)
Net (loss) income available to common stockholders	$	(8,408)		44,477,023	$	(0.19)	$	15,900		44,373,627	$	0.36

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares							$	449
Stock options added to the denominator under the treasury stock method										219,997
Less: Undistributed earnings reallocated to restricted shares								(447)
Net (loss) income available to common stockholders and assumed conversions	$	(8,408)		44,477,023	$	(0.19)	$	15,902		44,593,624	$	0.36



	Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
	Income		Weighted Average Shares Outstanding		Earnings Per Share		Income		Weighted Average Shares Outstanding		Earnings Per Share
Basic:
Net income attributable to controlling interests and available to common stockholders	$	12,897					$	32,390
Less: Undistributed earnings allocated to unvested restricted shares		(437)						(1,137)
Net income available to common stockholders	$	12,460		43,669,756	$	0.29	$	31,253		43,333,407	$	0.72

Diluted:
Effect of dilutive securities:
Add: Undistributed earnings allocated to restricted shares	$	437					$	1,137
Stock options added to the denominator under the treasury stock method				375,265						450,127
Less: Undistributed earnings reallocated to restricted shares		(434)						(1,126)
Net income available to common stockholders and assumed conversions	$	12,463		44,045,021	$	0.28	$	31,264		43,783,534	$	0.71

The computation of diluted earnings per share excluded potentially dilutive common shares related to restricted stock (including both RSAs and RSUs ) of 4 92 , 376 sh ares for the nine month s ended September 30, 2013 , and 592 , 130 and 646 , 503 shares for the three and nine

month s ended September 30, 2012 , respectively, because the effect of including these shares in the computation would have been anti-dilutive.

(5) Accumulated Other Comprehensive Loss , Net

Accumulated other comprehensive loss, net is displayed as a separate component of S tockholders' equity in the accompanying Consolidated Balance Sheets . The following table s present the changes in the balances of each component of accumulated other comprehensive loss, net for the three and nine months ended September 30, 2013 :



	Foreign currency translation adjustments		Unrealized (losses) gains on interest rate swap contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of July 1, 2013	$	(29,171)	$	(57,200)	⁽¹⁾	$	(86,371)

Other comprehensive income (loss) before reclassification		8,919		(9,396)	⁽²⁾		(477)
Amounts reclassified from accumulated other comprehensive loss, net		—		6,535	⁽²⁾		6,535
Net current per iod other comprehensive income (loss)		8,919		(2,861)			6,058
Total accumulated other comprehensive loss, net as of September 30, 2013	$	(20,252)	$	(60,061)	⁽¹⁾	$	(80,313)
___________
⁽¹⁾ Net of deferred income tax benefit of $15,159 and $13,431 as of September 30, 2013 and July 1, 2013, respectively.
⁽²⁾ Net of deferred income tax (benefit) expense of $(5,675) and $3,947 for Other comprehensive income (loss) before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively. See Note 12 .



	Foreign currency translation adjustments		Unrealized (losses) gains on interest rate swap contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of January 1, 2013	$	(24,634)	$	(80,451)	⁽¹⁾	$	(105,085)

Other comprehensive income before reclassification		4,382		1,096	⁽²⁾		5,478
Amounts reclassified from accumulated other comprehensive loss, net		—		19,294	⁽²⁾		19,294
Net current period other comprehensive income		4,382		20,390			24,772
Total accumulated other comprehensive loss, net as of September 30, 2013	$	(20,252)	$	(60,061)	⁽¹⁾	$	(80,313)
___________
⁽¹⁾ Net of deferred income tax benefit of $15,159 and $27,412 as of September 30, 2013 and January 1, 2013, respectively.
⁽²⁾ Net of deferred income tax expense of $659 and $11,594 for Other comprehensive income before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively. See Note 12 .

The Company records unrealized gains and losses related to its interest rate swaps net of estimated taxes in the Accumulated other comprehensive loss, net line item within Stockholders' equity in the accompanying Consolidated Balance Sheets since it is more likely than not that the Company will be able to realize the benefits associated with its net deferred tax asset positions in the future.

The Company currently believes that the unremitted earnings of its foreign subsidiaries will be reinvested for an indefinite period of time. Accordingly, no deferred taxes have been provided for the differences between the Company's book basis and underlying tax basis in these subsidiaries or on the foreign currency translation adjustment amounts.

(6) Prepaid Expenses and Other Assets

As of December 31, 2012, the Company had $ 13.4 million recorded for an insurance recovery receivable. The Company collected this entire amount from its insurer in January 2013 .

(7) Intangible Assets

Intangible Assets with Indefinite Lives

The following table presents the net carrying amount of the Company's intangible assets with indefinite lives as of September 30, 2013 , as well as the changes in the net carrying amounts for the nine month s ended September 30, 2013 , by segment:



	Goodwill
	U.S.		Europe ⁽¹⁾		Other International ⁽²⁾		Total
	(In thousands)
Balance as of January 1, 2013:
Gross balance	$	268,454	$	64,142	$	3,103	$	335,699
Accumulated impairment loss		—		(50,003)		—		(50,003)
	$	268,454	$	14,139	$	3,103	$	285,696

Acquisitions		10,897		88,364		—		99,261
Purchase price adjustments		24		—		138		162
Foreign currency translation adjustments		—		5,259		(82)		5,177

Balance as of September 30, 2013:
Gross balance	$	279,375	$	157,765	$	3,159	$	440,299
Accumulated impairment loss		—		(50,003)		—		(50,003)
	$	279,375	$	107,762	$	3,159	$	390,296
___________
⁽¹⁾ The Europe segment is currently comprised of the Company’s operations in U.K. and Germany. The amount related to acquisitions is based in-part on the Company’s preliminary purchase accounting for its Cardpoint acquisition completed in August 2013. The Company expects to complete its final purchase accounting for this acquisition during its fourth quarter of 2013.
⁽²⁾ The Other International segment is currently comprised of the Company’s operations in Mexico and Canada.



	Trade Nam e: indefinite-lived
	U.S.		Europe		Total
	(In thousands)
Balance as of January 1, 2013	$	200	$	3,231	$	3,431
Acquisitions		—		513		513
Foreign currency translation adjustments		—		32		32
Balance as of September 30, 2013	$	200	$	3,776	$	3,976

Intangible Assets with Definite Lives

The following is a summary of the Com pany's intangible assets that we re subject to amortization:



	September 30, 2013						December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)						(In thousands)
Customer and branding contracts/relationships	$	287,361	$	(142,796)	$	144,565	$	212,509	$	(125,920)	$	86,589
Deferred financing costs		9,929		(5,108)		4,821		9,169		(4,373)		4,796
Exclusive license agreements		21,280		(13,932)		7,348		18,724		(12,543)		6,181
Non-compete agreements		5,247		(2,190)		3,057		2,822		(1,246)		1,576
Acquired technology		2,792		(543)		2,249		—		—		—
Trade name: finite-lived		10,208		(397)		9,811		—		—		—
Total	$	336,817	$	(164,966)	$	171,851	$	243,224	$	(144,082)	$	99,142

(8) Accrued Liabilities

Accrued liabilities consisted of the following:



	September 30, 2013		December 31, 2012
	(In thousands)
Accrued merchant fees	$	32,153	$	23,510
Accrued merchant settlement amounts		28,827		9,255
Accrued taxes		14,505		1,794
Accrued compensation		9,489		9,524
Accrued armored fees		4,879		4,628
Accrued maintenance fees		4,642		4,865
Accrued cash rental and management fees		3,732		4,067
Accrued interest rate swap payments		2,139		2,299
Accrued interest expense		1,813		5,753
Accrued purchases		1,693		2,084
Accrued ATM telecommunications costs		1,126		1,254
Accrued processing costs		704		1,510
Other accrued expenses		18,794		9,569
Total	$	124,496	$	80,112

The increase in Accrued merchant settlement amounts was primarily related to the increase in merchant-owned arrangements as a result of acquisitions completed during 2013. The increase in the accrued tax es line above relates to increased estimated liabilities for U.K. business rates (similar to property taxes), which increased significantly during the three months ended September 30, 2013 , as the governmental agency responsible for assessing property values in the U.K. materially changed its approach for locating and assessing ATM sites and is now also seeking to recover assessments for past periods dating back to 2010 for some of the Company’s ATM locations in the U.K. . The Company has no statutory responsibility to self-assess property tax, but instead, must pay business rates invoices when they are invoiced. Prior to the third quarter of 2013, only a minority of its ATMs had been assessed business rates. While the Company believes that there are numerous potential longer-term mitigation strategies to partially offset this increased operating cost, the Company recorded a charge of $9.2 million as an estimate of its expected liability through September 2013 based on the information available as of that date.

(9) Long-Term Debt

The Company's long-term debt consisted of the following:



	September 30, 2013		December 31, 2012
	(In thousands)
8.25% Senior subordinated notes due September 2018	$	200,000	$	200,000
Revolving credit facility, including swing-line credit facility (weighted-average combined interest rate of 2.1% and 2.2% as of September 30, 2013 and December 31, 2012, respectively)		256,066		152,000
Equipment financing notes		1,704		2,819
Total		457,770		354,819
Less: current portion		1,387		1,467
Total long-term debt, excluding current portion	$	456,383	$	353,352

Revolving Credit Facility

As of September 30, 2013 , the Company's revolving credit facility provided for $ 375 .0 million in borrowings and letters of credit (subject to the covenants contained within the facility) and had a termination date of July 2016 . The revolving credit facility was amended on August 5, 2013, in anticipa tion of the c ompletion of the Cardpoint acquisition . This amendment expand ed the borrowing capacity from $250.0 million to $375.0 million and amend ed certain covenants to allow for certain indebtedness, investments, acquisitions, intercompany loans and dispositions of assets made in connection with the Cardpoint acquisition. There were no other material modifications made to the Company's revolving credit facility .

This revolving credit facility includes a $ 1 5.0 million swing-line facility, a n $ 85 .0 million foreign currency sub-limit, and a $ 20.0 million letter of credit sub-limit. Borrowings under the facility bear interest at a variable rate, based upon the Company's total leverage ratio and the London Interbank Offered Rate ("LIBOR") or Alternative Base Rate (as defined in the agreement) at the Company's option. Additionally, the Company is required to pay a commitment fee on the unused portion of the revolving credit facility. Substantially all of the Company's assets, including the stock of its wholly-owned domestic subsidiaries and 66 % of the stock of its foreign subsidiaries, are pledged to secure borrowings made under the revolving credit facility. Furthermore, each of the Company's domestic subsidiaries has guaranteed the

Company's obligations under the revolving credit facility. There are currently no restrictions on the ability of the Company's wholly-owned subsidiaries to declare and pay dividends directly to us.

As of September 30, 2013 , the Company was in compliance with all applicable covenants and ratios under the facility, which a re described in the 2012 Form 10-K and remain unch an ged .

As of September 30, 2013 , $ 256.1 million was outstanding under the Company’s revolving credit facility. Additionally, the Company has posted a $ 2.0 million letter of credit serving to secure the overdraft facility of its U.K. subsidiary (further discussed below) and a $ 0.1 million letter of credit serving to secure a third-party processing contract in Canada. These letters of credit, which the applicable third-parties may draw upon in the event the Company defaults on the related obligations, reduce the Company’s borrowing capacity under the facility. As of September 30, 2013 , the Company’s available borrowing capacity under the revolving credit facility totaled approximately $ 116.8 million .

$200.0 Million 8.25% Senior Subordinated Notes Due 2018

The $ 200.0 million 8.25 % senior subordinated notes due September 2018 (the "2018 Notes"), which are guaranteed by all of the Company's domestic subsidiaries, contain no maintenance covenants and only limited incurrence covenants, under which the Company has considerable flexibility. Interest under the 2018 Notes is paid semi-annually in arrears on March 1st and September 1st of each year. As of September 30, 2013 , the Company was in compliance with all applicable covenants required under the 2018 Notes.

Other Borrowing Facilities

Cardtronics Mexico equipment financing agreements. Between 2007 and 2010, Cardtronics Mexico entered into several separate five -year equipment financing agreements with a single lender, of which four agreements have outstanding balances as of September 30, 2013 . These agreements, which are denominated in pesos and bear interest at an average fixed rate of 9 . 99 %, were utilized for the purchase of ATMs to support growth in the Company’s Mexico operations. As of September 30, 2013 , approximately $ 2 2 . 3 million pesos ($ 1.7 million U.S.) were outstanding unde r the agreements . Pursuant to the terms of the loan agreements, the Company has issued guarantees for 51.0 % of the obligations under these agreements (consistent with its ownership percentage in Cardtronics Mexico). As of September 30, 2013 , the total amount of these guarantees was $ 1 1 . 4 million pesos ($ 0.9 million U.S.).

Bank Machine overdraft facility. Bank Machine, Ltd. (“Bank Machine”) has a £ 1.0 million overdraft facility. This overdraft facility, which bears interest at 1.0 % over the bank’s base rate ( 0.5 % as of September 30, 2013 ) and is secured by a letter of credit posted under the Company’s revolving credit facility as discussed above in the Revolving Credit Facility section, is utilized for general corporate purposes for the Company’s U.K. operations. As of September 30, 2013 , there were no amounts outstanding under the overdraft facility.

(10) Asset Retirement Obligations

Asset retirement obligations consist primarily of costs to deinstall the Company's ATMs and costs to restore the ATM sites to their original condition, which are estimated based on current market rates. In most cases, the Company is contractually required to perform this deinstallation and restoration work. For each group of ATMs, the Company has recognized the fair value of the asset retirement obligation as a liability on its balance sheet and capitalized that cost as part of the cost basis of the related asset. The related assets are depreciated on a straight-line basis over five years, which is the estimated average time period that an ATM is installed in a location before being deinstalled, and the related liabilities are accreted to their full value over the same period of time. As reflected in the table below, during the nine months ended September 30, 2013 , the Company revised its estimated future liabilities based on recent actual experience, changes in certain customer-specific estimates and other cost estimate changes. The changes in estimated future costs were recorded as a reduction in the carrying amount of the remaining unamortized asset and will reduce the Company’s depreciation and accretion expense amounts in future periods .

The following table is a summary of the changes in the Company's asset retirement obligation liability for the nine months e nded September 30, 2013 (in thousands) :



Asset retirement obligation as of January 1, 2013	$	44,696
Additional obligations		3,205
Estimated o bligations assumed in Cardpoint acquisitio n		17,496
Accretion expense		1,972
Change in estimates		(6,023)
Payments		(1,809)
Foreign currency translation adjustments		(35)
Asset retirement obligation as of September 30, 2013	$	59,502

See Note 13, Fair Value Measurements for additional disclosures on the Company's asset retirement obligations with respect to its fair value measurements.

( 11) Other Liabilities

Other liabilities consisted of the following:



	September 30, 2013		December 31, 2012
	(In thousands)
Current Portion of Other Long-Term Liabilities:
Interest rate swaps	$	28,621	$	23,117
Deferred revenue		1,657		835
Other		50		434
Total	$	30,328	$	24,386

Other Long-Term Liabilities:
Interest rate swaps	$	46,826	$	84,973
Obligations associated with acquired unfavorable contracts		—		964
Deferred revenue		1,048		1,353
Other		2,665		5,831
Total	$	50,539	$	93,121

Other long-term liabilities related to interest rate swaps decreased significantly from $ 85.0 million at December 31, 2012 to $ 46.8 million at September 30, 2013 mostly as a result of changes (increases) in forward interest rate curves since December 31, 2012 .

(12) Derivative Financial Instruments

Cash Flow Hedging Strategy

The Company is exposed to certain risks relating to its ongoing business operations, including interest rate risk associated with its vault cash rental obligations and, to a lesser extent, borrowings under its revolving credit facility. The Company is also exposed to foreign currency exchange rate risk with respect to its investme nts in its foreign subsidiaries . While the Company does not currently utilize derivative instruments to hedge its foreign currency exchange rate risk, it does utilize interest rate swap contracts to manage the interest rate risk associated with its vault cash rental obligations in the U.S. and the U.K. The Company does not currently utilize any derivative instruments to manage the interest rate risk associated with its vault cash rental obligations in Mexico, Canada, or Germany, nor does it utilize derivative instruments to manage the interest rate risk associated with borrowings outstanding under its revolving credit facility.

The interest rate swap contracts entered into with respect to the Company's vault cash rental obligations serve to mitigate the Company's exposure to interest rate risk by converting a portion of the Company's monthly floating rate vault cash rental obligations to a fixed rate. The Company has contracts in varying notional amounts through December 31, 2018 for the Company's U.S. vault cash rental obligations . By converting such amounts to a fixed rate, the impact of future interest rate changes (both favorable and unfavorable) on the Company's monthly vault cash rental expense amounts has been reduced. The interest rate swap contracts typically involve the receipt of floating rate amounts from the Company's counterparties that match, in all material respects, the floating rate amounts required to be paid by the Company to its vault cash providers for the portions of the Company's outstanding vault cash obligations that have been hedged. In return, the Company typically pays the interest rate swap counterparties a fixed rate amount per month based on the same notional amounts outstanding. At no point is there an exchange of the underlying principal or notional amounts associated with the interest rate swaps. Additionally, none of the Company's existing interest rate swap contracts contain credit-risk-related contingent features.

For each derivative instrument that is designated and qualifies as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedge transaction affects earnings. Gains and losses on the derivative instrument representing either hedge ineffectiveness or hedge components that are excluded from the assessment of effectiveness are recognized in earnings. However, because the Company currently only utilizes fixed-for-floating interest rate swaps in which the underlying pricing terms agree, in all material respects, with the pricing terms of the Company’s vault cash rental obligations, the amount of ineffectiveness associated with such interest rate swap contracts has historically been immaterial. Accordingly, no ineffectiveness amounts associated with the Company’s effective cash flow hedges have been recorded in the Company’s consolidated financial statements. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the Consolidated Statements of Operations during the current period.

The notional amounts, weighted average fixed rates, and terms associated with the Company's interest rate swap contracts accounted for as cash flow hedges that are currently in place (as of the date of the issuance of these financial statements) are as follows:


Notional Amounts		Notional Amounts		Notional Amounts		Weighted Average
U.S.		U.K.		Consolidated ⁽¹⁾		Fixed Rate		Term
(I n thousands)
$	1,000,000	£	25,000	$	1,040,340	2.69	%	October 1, 2013 – December 31, 2013
$	1,250,000	£	—	$	1,250,000	2.98	%	January 1, 2014 – December 31, 2014
$	1,300,000	£	—	$	1,300,000	2.84	%	January 1, 2015 – December 31, 2015
$	1,300,000	£	—	$	1,300,000	2.74	%	January 1, 2016 – December 31, 2016
$	1,000,000	£	—	$	1,000,000	2.53	%	January 1, 2017 – December 31, 2017
$	750,000	£	—	$	750,000	2.54	%	January 1, 2018 – December 31, 2018
___________
⁽¹⁾ U.K. pound sterling amounts have been converted into U.S. dollars at approximately $1. 61 to £1.00, which was the exchange rate in effect as of September 30 , 2013.

Accounting Policy

The Company recognizes all of its derivative instruments as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. The accounting for changes in the fair value (e.g., gains or losses) of those derivative instruments depends on (1) whether these instruments have been designated (and qualify) as part of a hedging relationship and (2) the type of hedging relationship actually designated. For derivative instruments that are designated and qualify as hedging instruments, the Company designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation.

The Company has designated all of its interest rate swap contracts as cash flow hedges of the Company’s forecasted vault cash rental obligations. Accordingly, changes in the fair values of the related interest rate swap contracts have been reported in the Accumulated other comprehensive loss, net line item within stockholders’ equity in the accompanying Consolidated Balance Sheets.

The Company believes that it is more likely than not that it will be able to realize the benefits associated with its domestic net deferred tax asset positions in the future. Therefore, the Company records the unrealized losses related to its domestic interest rate swaps net of estimated tax benefit s in the Accumulated other comprehensive loss, net line item within Stockholders' equity in the accompanying Consolidated Balance Sheets.

Tabular Disclosures

The following tables depict the effects of the use of the Company's derivative contracts on its Consolidated Balance Sheets and Consolidated Statements of Operations.

Balance Sheet Data



	September 30, 2013			December 31, 2012
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Liability Derivative Instruments:	(In thousands)

Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Current portion of other long-term liabilities	$	28,621	Current portion of other long-term liabilities	$	23,117
Interest rate swap contracts	Other long-term liabilities		46,826	Other long-term liabilities		84,973
Total Derivatives		$	75,447		$	108,090

Statements of Operations Data



	Three Months Ended September 30,
Derivatives in Cash Flow Hedging Relationship	Amount of Loss Recognized in OCI on Derivative Instruments (Effective Portion)				Location of Loss Reclassed from Accumulated OCI Into Income (Effective Portion)	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
	2013		2012			2013		2012
	(I n thousands)					(I n thousands)
Interest rate swap contracts	$	(9,396)	$	(11,490)	Cost of ATM operating revenues	$	(6,535)	$	(6,605)



	Nine Months Ended September 30,
Derivatives in Cash Flow Hedging Relationship	Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)				Location of Loss Reclassed from Accumulated OCI Into Income (Effective Portion)	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
	2013		2012			2013		2012
	(I n thousands)					(I n thousands)
Interest rate swap contracts	$	1,096	$	(47,455)	Cost of ATM operating revenues	$	(19,294)	$	(19,447)

The Company does not currently have any derivative instruments that have been designated as fair value or net investment hedges. The Company has not historically, and does not currently anticipate terminating its existing derivative instruments prior to their expiration dates. If the Company concludes that it is no longer probable that the anticipated future vault cash rental obligations that have been hedged will occur, or if changes are made to the underlying terms and conditions of the Company's vault cash rental agreements, thus creating some amount of ineffectiveness associated with the Company's current interest rate swap contracts, any resulting gains or losses will be recognized within the Other expense (income) line item of the Company's Consolidated Statements of Operations.

As of September 30, 2013 , the Company expected to reclassify $ 28.4 million of net derivative-related losses contained within accumulated OCI into earnings during the next twelve months concurrent with the recording of the related vault cash rental expense amounts.

See Note 13, Fair Value Measurements for additional disclosures on the Company's interest rate swap contracts in respect to its fair value measurements.

(13) Fair Value Measurements

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2013 using the fair value hierarchy prescribed by U.S. GAAP. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.



	Fair Value Measurements at September 30, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Liabilities
Liabilities associated with interest rate swaps	$	75,447	$	—	$	75,447	$	—
Acquisition-related contingent consideration		563		—		—		563



	Fair Value Measurements at December 31, 2012
	Total		Level 1		Level 2		Level 3
	(In thousands)
Liabilities
Liabilities associated with interest rate swaps	$	108,090	$	—	$	108,090	$	—
Acquisition-related contingent consideration		3,455		—		—		3,455

Additions to asset retirement obligation liability. The Company estimates the fair value of additions to its asset retirement obligation liability using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. Liabilities added to the a sset retirement obligations line item in the accompanying Consolidated Balance Sheets are measured at fair value at the time of the asset installations on a non-recurring basis using Level 3 inputs, and are only reevaluated periodically based on current fair value. Amounts added to the asset retirement obligation liability during the nine month s ended September 30, 2013 and 2012 totaled $ 20.7 million and $ 8.7 million, respectively. The substantial increase in 2013 relates primarily to estimated liabilities assumed in conjunction with the Company’s acquisition of Cardpoint in August 2013.

B elow are descriptions of the Company's valuation methodologies for assets and liabilities measured at fair value. The methods described below may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Cash and cash equivalents, accounts and notes receivable, net of the allowance for doubtful accounts, other current assets, accounts payable, accrued expenses, and other current liabilities. These financial instruments are not carried at fair value, but are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk.

Acquisition-related intangible assets . The estimated fair values of acquisition-related intangible assets are valued based on a discounted cash flows analysis using significant non-observable inputs (Level 3 inputs). The Company tests intangible assets for impairment on a quarterly basis by measuring the related carrying amounts against the estimated undiscounted future cash flows associated with the related contract or portfolio of contracts.

Interest rate swaps. The fair value of the Company's interest rate swaps was a liability of $ 75.4 million as of September 30, 2013 . These financial instruments are carried at fair value, calculated as the present value of amounts estimated to be received or paid to a marketplace participant in a selling transaction. These derivatives are valued using pricing models based on significant other observable inputs (Level 2 inputs), while taking into account the creditworthiness of the party that is in the liability position with respect to each trade. See Note 12, Derivative Financial Instruments for additional disclosures on the valuation process of this liability.

Acquisition-related contingent consideration. Liabilities from acquisition-related contingent consideration are estimated by the Company using a discounted cash flow model . Acquisition-related contingent consideration liabilities are classified as Level 3 liabilities, because the Company uses unobservable inputs to value them, based on its best estimate of operational results upon which the payment of these obligations are contingent. G ains and losses related to the contingent consideration associated with acquisitions are included in other (income) expenses in the Company’s consolidated statements of operations.

Long-term debt . The carrying amount of the long-term debt balance related to borrowings under the Company's revolving credit facility approximates fair value due to the fact that any borrowings are subject to short-term floating interest rates. As of September 30, 2013 , the fair value of the Company's 2018 N otes (see Note 9, Long-Term Debt ) totaled $ 2 1 6 . 5 million, based on the quoted market price (Level 1 input) for the 2018 N otes as of that date.

(14) Commitments and Contingencies

Legal Matters

Automated Transactions. On August 16, 2010, a lawsuit was filed in the United States District Court for the District of Delaware (the “District Court”) entitled Automated Transactions LLC (“ATL”) v. IYG Holding Co., et al. 10 Civ. 0691 (D. Del.) (the "2010 Lawsuit"). The 2010 Lawsuit names the Company's wholly-owned subsidiary, Cardtronics USA, Inc. (“Cardtronics USA”), as one of the defendants. The 2010 Lawsuit alleges that Cardtronics USA and the other defendants infringed upon seven of the plaintiff's patents by providing retail transactions to consumers through their ATMs. The plaintiff, ATL, is seeking a permanent injunction, damages, treble damages and costs, including attorney's fees and expenses. The allegations raised by the plaintiff in this suit are similar to the allegations made by the same plaintiff in a suit filed in January 2006 (the "2006 Lawsuit") against 7-Eleven, Inc. (“7-Eleven”) concerning six of the same seven patents. In July 2007, when the Company acquired the 7-Eleven portfolio, the Company became subject to the 2006 Lawsuit. The ATM supplier in that case agreed to indemnify 7-Eleven against the plaintiff's claims. That indemnity was assigned by 7-Eleven to the Company, and the supplier acknowledged that assignment.

The 2010 Lawsuit was initially stayed by order of the District Court pending the outcome of the 2006 Lawsuit. In the 2006 Lawsuit, following the Company’s submission for summary judgment the District Court found that the defendants did not infringe the claims asserted in any of the plaintiff's five patents (the allegations as to the sixth patent having been dismissed earlier). In addition, the District Court granted the defendants partial summary judgment, concluding that the plaintiff's patent claims were, in part, invalid and rendered other findings so as to materially weaken the plaintiff's case. In addition, on January 28, 2011, the United States Patent and Trademark Office Board of Patent Appeals and Interferences ("BPAI") issued a decision affirming the rejection on the grounds of obviousness of all the claims relating to one of the patents asserted by the plaintiff in both the 2006 Lawsuit and the 2010 Lawsuit. The plaintiff appealed both of these rulings to the U.S.

Court of Appeals for the Federal Circuit (the “Court of Appeals”). On April 23, 2012, the Court of Appeals rendered a decision that affirmed both the District Court’s rulings and the BPAI decision (the “Appeals Decision”). ATL’s request for rehearing of the Appeals Decision was denied . As a consequence, the 2006 Lawsuit has been effectively resolved in the Company’s favor pending entry of a formal final judgment. Furthermore, though the Appeals Decision in the 2006 Lawsuit does not formally terminate the 2010 Lawsuit, the findings set forth in the Appeals Decision should also resolve in favor of the Company all of the claims made involving the same patents as had been asserted in the 2006 Lawsuit. The Appeals Decision should also materially weaken the plaintiff’s claims in the two remaining patents in the 2010 Lawsuit, which has been consolidated with the 2006 Lawsuit and resumed .

Notwithstanding the outcome of the 2006 Lawsuit, ATL initiated several new patent infringement lawsuits against other companies, based on “child” patents of the parent patent which are at issue in the 2006 Lawsuit and the 2010 Lawsuit. The asserted claims of the parent patent hav e already been held invalid in the Appeals Decision. The claims of infringement of the child patents are substantially similar to the prior claims under the parent and other child patent s , i.e. the ATMs allowed the cardholders to access the i nternet and to conduct retail transactions at t he ATM that were asserted by the defendants to be non-routine banking transactions . Two of those new cases were brought in the District Court for the Southern District of New York and name d as defendants , t wo customers of the Company under ATM placement agreements pursuant to which the Company operates ATMs alleged to infringe ATL’s child patents. Until resolved, these cases implicate the Company in defending its customers where these ATMs are placed and could involve ATL alleging new claims directly against the Company. The Company has joined as a defendant in both of those cases and asserted counterclaims against ATL for invalidity, non-infringement and requesting costs and attorneys’ fees for improperly bringing such a suit. On January 17, 2013, the Court in one case agreed with the Company’s request to transfer the case for all purposes to the U.S. District Court in Delaware because of that Court’s familiarity with the patents in suit. Subsequently, the Judicial Panel on Multidistrict Litigation transferred the other case against the Company’s customer, along with many other ATL cases filed in other district courts, to the U.S. District Court in Delaware for consolidated pretrial proceedings , and the Company then joined that action as a defendant and counterclaimant, as noted above.

On April 1, 2013, a panel for the United States Judicial Panel on Multidistrict Litigation, over ATL’s objection, transferred eight other suits involving ATL’s parent patent and 12 child patents and several different types of ATMs to the District Court to be consolid ated or coordinated before the j udge who h ad previously decided the 2006 L awsuit against ATL. In addition, the other action still pending in New York federal court against the Company’s customer, noted above, was also transferred to that j udge, along with other ATL cases deemed to be “tag along” actions to the cases already transferred. The District Court has issued a scheduling order pursuant to which discovery will be conducted and all pre-trial motions have been scheduled to be submitted by June 19, 2015. Under that order, trial of these matters ha s not been set .

The Company believes that these ATL lawsuits have no merit, primarily because the asserted child patents have patent claims or limitations previously held invalid or no t infringed by the Appeals Decision. Accordingly, the Company does not expect that the remaining lawsuits will have a material impact on its financial condition or results of operations, and the Company will continue to vigorously defend its position.

National Federation of the Blind. Through its acquisition of the E*Trade ATM portfolio, the Company became the sole defendant in the June 2003 lawsuit filed by the National Federation of the Blind, the Commonwealth of Massachusetts, et. al. and certain individuals representing a class of similarly situated persons (the "Plaintiffs") against E*Trade Access, Inc., et al. in the United States District Court for the District of Massachusetts (“Massachusetts District Court”) : Civil Action No. 03-11206-NMG (the “Lawsuit”). The Plaintiffs sought to require, among other things, that ATMs deployed by E*Trade be voice-guided. In December 2007, the Company and Plaintiffs entered into a settlement agreement (as modified in November 2010, the "Settlement Agreement"). In 2011, the Plaintiffs filed a motion of contempt with the Massachusetts District Court alleging that the Company had failed to fully comply with the requirements of the Settlement Agreement. On December 15, 2011, the Massachusetts District Court issued an order that required the Company to bring all of its ATMs in compliance with the terms of the Settlement Agreement by March 15, 2012. In August 2012, the Plaintiffs filed their second motion of contempt, which alleged, among other things, that the Company had failed to meet the Massachusetts District Court ’s deadline and sought a fine of $ 50 per ATM for each month that the Massachusetts District Court determined the Company was not in compliance. The Company filed its response on September 28, 2012 .

In March 2013, the Court issued an order that stated that sanctions would be imposed , but did not specify what violations had occurred . I n April 2013, the Court granted the parties’ request to appoint a special master to determine the extent of any non-compliance with the agreements, any effect on accessibility of the ATMs, and what sanctions might be appropriate. On May 22, 2013, the Massachusetts District Court issued an order appointing a special master, directing him to issue a report and recommendation on those issues. The special master’s report and recommendation must be submitted by December 15, 2013. The Company is uncertain of the ultimate outcome of this matter, but does not believe it will have a material adverse effect upon the Company’s financial statements.

In addition to the above legal proceeding s, the Company is subject to various legal proceedings and claims arising in the ordinary course of its business. The Company has provided reserves where necessary for all claims and the Company's management does not expect the outcome in any of these legal proceedings, individually or collectively, to have a material adverse impact on the Company's financial condition or results of operations. Additionally, the Company currently expenses all legal costs as they are incurred.

Other Commitments

Asset Retirement Obligations. The Company's asset retirement obligations consist primarily of deinstallation costs of the ATM and costs to restore the ATM site to its original condition. In most cases, the Company is legally required to perform this deinstallation and restoration work. The Company had $ 59.5 million accrued for these liabilities as of September 30, 2013 . For additional information, see Note 10, Asset Retirement Obligations .

(15) Income Taxes

Income tax expense based on the Company's income before income taxes was as follows:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands)						(In thousands)
Income tax expense	$	22,765		$	8,169		$	38,779		$	20,684
Effective tax rate		165.2	%		39.1	%		72.2	%		39.0	%

The Company's effective tax rate during the three and nine months ended September 30, 2013 and 2012 was higher than the combined total of the U.S. federal statutory rate of 35 % and the Company's estimated effective state tax rate of 2 . 5 %, primarily due to: ( 1) restructuring the Company’s U.K. operations during the three month period ended September 30, 2 013 , which resulted in the recognition of a $1 3.6 million income tax charge associated with the Company’s U.K. restructuring in the third quarter, which primarily relates to deferred tax assets that are no longer realizable as a result of the restructuring ; ( 2) operating losses in certain of the Company’s foreign operations for which it does not record a tax benefit, as a result of carrying a valuation allowance on those deferred tax assets ; ( 3) certain current year losses on the Company’s U.S. tax return that cannot be recognized as a result of the U.K. restructuring; and ( 4) certain non-deductible acquisition costs. The Company continues to maintain valuation allowances for its local net deferred tax asset positions for certain of its entities in the U.K. and Mexico, as the Company currently believes that it is more likely than not that these tax assets will not be realized .

On August 7, 2013, the Company, through its wholly owned subsidiaries, acquired all of the outstanding shares issued by Cardpoint, with operations in the U.K. and Germany. At the time of the acquisition, ten legal entities were active under Cardpoint (collectively, the “Cardpoint group”). Various entities in the Cardpoint group have accumulated net operating loss (“NOL”) carryforwards and allowable capital allowances that the Company expects to utilize in the future to offset expected future profits in the group. As of the acquisition date, the Cardpoint group had net operating losses in the amount of approximately $64.6 million and allowable capital allowances of approximately $74.0 million. The Company determined that it is more likely than not that the Cardpoint group will be able to realize the benefits of its tax assets.

Following the Cardpoint acquisition, the Company restructured a portion of its other existing U.K. operations (Bank Machine entities). Through a series of restructuring , as of September 30, 2013, the existing Bank Machine group is now owned by Cardpoint. Concurrent with the restructuring, the Company implemented a financing structure to fund future growth in its European operations.

The deferred taxes associated with the Company's unrealized gains and losses on derivative instruments have been reflected within the accumulated other comprehensive loss balance in the accompanying Consolidated Balance Sheets.

(16) Segment Information

As of September 30, 2013 , the Company's operations consisted of its U.S., Europe , and Other International segments. The Company's operations in Puerto Rico and the U.S. Virgin Islands are included in its U . S . segment. The Other International segment currently is comprised of the Company’s operations in Mexico and Canada. Beginning this quarter, t he U.K. segment was expanded and renamed the Europe segment to include Germany, as a result of the Cardpoint acquisition . While each of these reporting segments provides similar kiosk - based and/or ATM - related services, each segment is currently managed separately as they require different marketing and business strategies.

Management uses Adjusted EBITDA, along with other U.S. GAAP-based measures, to assess the operating results and effectiveness of its segments. Management believes Adjusted EBITDA is a useful measure because it allows management to more effectively evaluate operating performance and compare its results of operations from period to period without regard to financing method or capital structure. The Company excludes depreciation, accretion, and amortization expense as these amounts can vary substantially depending upon book values of assets, capital structures and the method by which the assets were acquired. Additionally, Adjusted EBITDA does not reflect acquisition-related costs and the Company's obligations for the payment of income taxes, loss on disposal of assets, interest expense, certain other non-operating and nonrecurring items or other obligations such as capital expenditures.

Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with U.S. GAAP. In evaluating the Company's performance as measured by Adjusted EBITDA, management recognizes and considers the limitations of this measurement. Accordingly, Adjusted EBITDA is only one of the measurements that management utilizes. Therefore, Adjusted EBITDA should not be considered in isolation or as a substitute for operating

income, net income, cash flows from operating, investing, and financing activities or other income or cash flow statement data prepared in accordance with U.S. GAAP.

Below is a reconciliation of Adjusted EBITDA to net income attributable to controlling interests:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In thousands)				(In thousands)
Adjusted EBITDA	$	59,099	$	49,516	$	161,561	$	139,395
Less:
Loss (gain) on disposal of assets		109		(28)		469		784
Other income		(559)		(1,040)		(3,030)		(1,098)
Noncontrolling interests		(474)		(355)		(1,429)		(1,217)
Stock-based compensation expense		3,163		2,675		8,888		8,664
Acquisition-related expenses		3,536		381		7,542		1,858
Other adjustments to cost of ATM operating revenues ⁽¹⁾		8,359		—		8,359		—
Other adjustments to selling, general, and administrative expenses ⁽ ² ⁾		—		—		446		—
EBITDA	$	44,965	$	47,883	$	140,316	$	130,404
Less:
Interest expense, net, including amortization of deferred financing costs		5,720		5,494		16,305		16,635
Income tax expense		22,765		8,169		38,779		20,684
Depreciation and accretion expense		16,890		15,758		49,056		44,243
Amortization expense		7,998		5,565		19,827		16,452
Net (loss) income attributable to controlling interests and available to common stockholders	$	(8,408)	$	12,897	$	16,349	$	32,390

____________

(1 ) Adjustment to cost of ATM operating revenu es for the three and nine months ended September 30, 2013 is related to the charg e related to retroactive property taxes on certain ATM locations in the U.K .

(2 ) Adjustment to selling, general, and administrative expense represen ts severance related costs associated with management of the Company’s U.K. operation.

The following tables reflect certain financial information for each of the Company's reporting segments for the three and nine month s ended September 30, 2013 and 2012 .



	Three Months Ended September 30, 2013
	U.S.		Europe		Other International		Eliminations		Total
	(In thousands)
Revenue from external customers	$	166,811	$	51,498	$	10,510	$	—	$	228,819
Intersegment revenues		1,763		37		15		(1,815)		—
Cost of revenues		108,857		44,254		8,965		(1,807)		160,269
Selling, general, and administrative expenses		16,817		3,494		762		—		21,073
Acquisition - related expenses		2,693		843		—		—		3,536
Loss (gain) on disposal of assets		199		(131)		41		—		109

Adjusted EBITDA		46,057		12,146		904		(8)		59,099

Depreciation and accretion expense		10,181		5,569		1,154		(14)		16,890
Amortization expense		5,271		2,556		171		—		7,998
Interest expense, net, including amortization of deferred financing costs		3,807		1,830		83		—		5,720
Income tax expense		20,990		1,574		201		—		22,765

Capital expenditures ⁽¹⁾	$	12,026	$	3,471	$	250	$	—	$	15,747



	Three Months Ended September 30, 2012
	U.S.		Europe		Other International		Eliminations		Total
	(In thousands)
Revenue from external customers	$	157,649	$	30,887	$	10,493	$	—	$	199,029
Intersegment revenues		4,110		—		16		(4,126)		—
Cost of revenues		108,039		24,097		8,372		(3,779)		136,729
Selling, general, and administrative expenses		12,630		1,584		894		184		15,292
Acquisition - related expenses		373		8		—		—		381
Loss (gain) on disposal of assets		82		(73)		(37)		—		(28)

Adjusted EBITDA		43,756		5,200		1,091		(531)		49,516

Depreciation and accretion expense		9,793		4,916		1,055		(6)		15,758
Amortization expense		5,300		229		36		—		5,565
Interest expense, net, including amortization of deferred financing costs		5,224		169		101		—		5,494
Income tax expense		8,169		—		—		—		8,169

Capital expenditures ⁽¹⁾	$	16,738	$	6,363	$	2,495	$	(220)	$	25,376



	Nine Months Ended September 30, 2013
	U.S.		Europe		Other International		Eliminations		Total
	(In thousands)
Revenue from external customers	$	488,158	$	113,625	$	32,758	$	—	$	634,541
Intersegment revenues		5,416		37		47		(5,500)		—
Cost of revenues		316,964		92,292		27,875		(5,463)		431,668
Selling, general, and administrative expenses		48,638		7,852		2,504		—		58,994
Acquisition-related expenses		6,670		843		29		—		7,542
Loss (gain) on disposal of assets		502		(136)		103		—		469

Adjusted EBITDA		136,834		22,322		2,442		(37)		161,561

Depreciation and accretion expense		30,456		15,155		3,510		(65)		49,056
Amortization expense		15,819		3,483		525		—		19,827
Interest expense, net, including amortization of deferred financing costs		13,861		2,186		258		—		16,305
Income tax expense		37,004		1,574		201		—		38,779

Capital expenditures ⁽¹⁾	$	32,714	$	12,207	$	691	$	(10)	$	45,602



	Nine Months Ended September 30, 2012
	U.S.		Europe		Other International		Eliminations		Total
	(In thousands)
Revenue from external customers	$	471,623	$	84,419	$	26,047	$	—	$	582,089
Intersegment revenues		6,778		—		74		(6,852)		—
Cost of revenues		321,418		66,828		20,483		(6,492)		402,237
Selling, general, and administrative expenses		40,509		5,026		2,237		184		47,956
Acquisition-related expenses		1,738		120		—		—		1,858
Loss (gain) on disposal of assets		822		(32)		(6)		—		784

Adjusted EBITDA		125,110		12,553		2,276		(544)		139,395

Depreciation and accretion expense		27,482		14,140		2,637		(16)		44,243
Amortization expense		15,081		1,263		108		—		16,452
Interest expense, net, including amortization of deferred financing costs		15,848		472		315		—		16,635
Income tax expense		20,684		—		—		—		20,684

Capital expenditures ⁽¹⁾	$	52,372	$	18,152	$	10,300	$	(232)	$	80,592

____________


⁽¹⁾	Capital expenditure amounts include payments made for exclusive license agreements and site acquisition costs . Additionally, capital expenditure amounts for Mexico (included in the Other International segment) are reflected gross of any noncontrolling interest amounts.

Identifiable Assets:



	September 30, 2013		December 31, 2012
	(In thousands)
United States	$	859,213	$	714,110
Europe		340,830		108,894
Other International		25,581		30,066
Eliminations		(258,164)		(84,178)
Total	$	967,460	$	768,892

(17) New Accounting Pronouncements

Adopted

Reclassifications out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income . This update requires entities to disclose items reclassified out of accumulated other comprehensive income and into net income within the financial statements. The Company adopted ASU 2013-02 as of January 1, 2013, and now reports this information in Note 5, Accumulated Other Comprehensive Loss, Net .

(18) Supplemental Guarantor Financial Information

The Company's 2018 Notes are fully and unconditionally guaranteed , subject to certain customary release provisions, on a joint and several basis by all of the Company's 100 % owned domestic subsidiaries. The following information sets forth the condensed consolidating statements of operations and cash flows for the three and nine months ended September 30, 2013 and 2012 and the condensed consolidating balance sheets as of September 30, 2013 and December 31, 2012 of (1) Cardtronics, Inc., the parent company and issuer of the 2018 Notes ("Parent"); (2) all of the Company's 100% owned domestic subsidiaries on a combined basis (collectively, the "Guarantors"); and (3) the Company's international subsidiaries on a combined basis (collectively, the "Non-Guarantors"):

Condensed Consolidating Statements of Comprehensive Income (Loss)



	Three Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Revenues	$	—	$	168,574	$	62,060	$	(1,815)	$	228,819
Operating costs and expenses		3,234		140,784		67,678		(1,821)		209,875
Operating (loss) income		(3,234)		27,790		(5,618)		6		18,944
Interest expense , net, including amortization of deferred financing costs		1,278		2,529		1,913		—		5,720
Equity in (earnings) losses of subsidiaries		(17,930)		2,256		—		15,674		—
Other expense (income), net		3,875		(608)		(3,826)		—		(559)
Income (loss) before income taxes		9,543		23,613		(3,705)		(15,668)		13,783
Income tax expense		18,531		2,459		1,775		—		22,765
Net (loss) income		(8,988)		21,154		(5,480)		(15,668)		(8,982)
Net loss attributable to noncontrolling interests		—		—		—		(574)		(574)
Net (loss) income attributable to controlling interests and available to common stockholders		(8,988)		21,154		(5,480)		(15,094)		(8,408)
Other comprehensive income (loss) attributable to controlling interests		6,049		(4,719)		4,728		(6)		6,052
Comprehensive (loss) income attributable to controlling interests	$	(2,939)	$	16,435	$	(752)	$	(15,100)	$	(2,356)



	Three Months Ended September 30, 2012
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Revenues	$	—	$	161,759	$	41,396	$	(4,126)	$	199,029
Operating costs and expenses		2,758		133,459		41,081		(3,601)		173,697
Operating (loss) income		(2,758)		28,300		315		(525)		25,332
Interest (income) expense, net, including amortization of deferred financing costs		(867)		6,091		270		—		5,494
Equity in (earnings) losses of subsidiaries		(22,181)		379		—		21,802		—
Other (income) expense, net		—		(1,269)		544		(312)		(1,037)
Income (loss) before income taxes		20,290		23,099		(499)		(22,015)		20,875
Income tax expense		7,371		798		—		—		8,169
Net income (loss)		12,919		22,301		(499)		(22,015)		12,706
Net loss attributable to noncontrolling interests		—		—		—		(191)		(191)
Net income (loss) attributable to controlling interests and available to common stockholders		12,919		22,301		(499)		(21,824)		12,897
Other comprehensive income (loss) attributable to controlling interests		3,130		(7,918)		2,197		(104)		(2,695)
Comprehensive income attributable to controlling interests	$	16,049	$	14,383	$	1,698	$	(21,928)	$	10,202

Condensed Consolidating Statements of Comprehensive Income (Loss ) – Continued



	Nine Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Revenues	$	—	$	493,574	$	146,467	$	(5,500)	$	634,541
Operating costs and expenses		9,104		409,945		154,035		(5,528)		567,556
Operating (loss) income		(9,104)		83,629		(7,568)		28		66,985
Interest expense, net, including amortization of deferred financing costs		5,211		8,650		2,444		—		16,305
Equity in (earnings) losses of subsidiaries		(66,408)		4,688		—		61,720		—
Other expense (income), net		3,875		(5,014)		(1,891)		—		(3,030)
Income (loss) before income taxes		48,218		75,305		(8,121)		(61,692)		53,710
Income tax expense		33,315		3,689		1,775		—		38,779
Net income (loss)		14,903		71,616		(9,896)		(61,692)		14,931
Net loss attributable to noncontrolling interests		—		—		—		(1,418)		(1,418)
Net income (loss) attributable to controlling interests and available to common stockholders		14,903		71,616		(9,896)		(60,274)		16,349
Other comprehensive (loss) income attributable to controlling interests		(7,673)		31,018		1,427		(31)		24,741
Comprehensive income (loss) attributable to controlling interests	$	7,230	$	102,634	$	(8,469)	$	(60,305)	$	41,090



	Nine Months Ended September 30, 2012
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Revenues	$	—	$	478,401	$	110,540	$	(6,852)	$	582,089
Operating costs and expenses		8,910		398,140		112,804		(6,324)		513,530
Operating (loss) income		(8,910)		80,261		(2,264)		(528)		68,559
Interest (income) expense, net, including amortization of deferred financing costs		(2,205)		18,053		787		—		16,635
Equity in (earnings) losses of subsidiaries		(57,939)		5,200		—		52,739		—
Other expense (income), net		8		(2,803)		2,019		(312)		(1,088)
Income (loss) before income taxes		51,226		59,811		(5,070)		(52,955)		53,012
Income tax expense		18,682		2,002		—		—		20,684
Net income (loss)		32,544		57,809		(5,070)		(52,955)		32,328
Net loss attributable to noncontrolling interests		—		—		—		(62)		(62)
Net income (loss) attributable to controlling interests and available to common stockholders		32,544		57,809		(5,070)		(52,893)		32,390
Other comprehensive income (loss) attributable to controlling interests		17,787		(46,127)		2,806		(126)		(25,660)
Comprehensive income (loss) attributable to controlling interests	$	50,331	$	11,682	$	(2,264)	$	(53,019)	$	6,730

Condensed Consolidating Balance Sheets



	As of September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Assets:
Cash and cash equivalents	$	18	$	7,287	$	11,251	$	—	$	18,556
Accounts and notes receivable, net		62,580		39,848		13,371		(65,828)		49,971
Current portion of deferred tax asset, net		13,081		1,196		5,377		—		19,654
Other current assets		542		20,464		34,011		(31)		54,986
Total current assets		76,221		68,795		64,010		(65,859)		143,167
Property and equipment, net		—		157,384		95,061		(446)		251,999
Intangible assets, net		4,732		79,207		91,888		—		175,827
Goodwill		—		279,375		110,921		—		390,296
Investments in and advances to subsidiaries		422,709		242,057		—		(664,766)		—
Intercompany receivable		176,257		41,541		—		(217,798)		—
Deferred tax asset, net		—		—		3,353		—		3,353
Prepaid expenses, deferred costs, and other assets		54		1,586		1,178		—		2,818
Total assets	$	679,973	$	869,945	$	366,411	$	(948,869)	$	967,460
Liabilities and Stockholders' Equity:
Current portion of long-term debt and notes payable	$	—	$	—	$	1,387	$	—	$	1,387
Current portion of other long-term liabilities		—		29,362		966		—		30,328
Accounts payable and accrued liabilities		7,138		139,448		70,982		(65,695)		151,873
Current portion of deferred tax liability, net		—		—		1,178		—		1,178
Total current liabilities		7,138		168,810		74,513		(65,695)		184,766
Long-term debt		456,066		7		310		—		456,383
Intercompany payable		—		167,222		103,448		(270,670)		—
Asset retirement obligations		—		22,706		36,796		—		59,502
Deferred tax liability, net		3,330		(470)		(29)		—		2,831
Other long-term liabilities		—		50,483		56		—		50,539
Total liabilities		466,534		408,758		215,094		(336,365)		754,021
Stockholders' equity		213,439		461,187		151,317		(612,504)		213,439
Total liabilities and stockholders' equity	$	679,973	$	869,945	$	366,411	$	(948,869)	$	967,460

Condensed Consolidating Balance Sheets — continued



	As of December 31, 2012
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Assets:
Cash and cash equivalents	$	5	$	10,674	$	3,182	$	—	$	13,861
Accounts and notes receivable, net		56,722		39,384		9,934		(60,905)		45,135
Current portion of deferred tax asset, net		11,683		1,094		309		—		13,086
Other current assets		764		28,116		14,793		(6)		43,667
Total current assets		69,174		79,268		28,218		(60,911)		115,749
Property and equipment, net		—		154,737		82,001		(500)		236,238
Intangible assets, net		4,684		87,670		10,219		—		102,573
Goodwill		—		268,454		17,242		—		285,696
Investments in and advances to subsidiaries		209,668		100,048		—		(309,716)		—
Intercompany receivable		204,098		48,128		—		(252,226)		—
Deferred tax asset, net		23,162		2,195		1,111		—		26,468
Prepaid expenses, deferred costs, and other assets		—		1,999		169		—		2,168
Total assets	$	510,786	$	742,499	$	138,960	$	(623,353)	$	768,892
Liabilities and Stockholders' Equity:
Current portion of long-term debt and notes payable	$	—	$	—	$	1,467	$	—	$	1,467
Current portion of other long-term liabilities		—		23,386		1,000		—		24,386
Accounts payable and accrued liabilities		9,982		122,501		30,127		(60,905)		101,705
Current portion of deferred tax liability, net		—		—		1,179		—		1,179
Total current liabilities		9,982		145,887		33,773		(60,905)		128,737
Long-term debt		352,000		15		1,337		—		353,352
Intercompany payable		—		250,827		54,270		(305,097)		—
Asset retirement obligations		—		21,448		23,248		—		44,696
Deferred tax liability, net		—		—		182		—		182
Other long-term liabilities		—		92,966		155		—		93,121
Total liabilities		361,982		511,143		112,965		(366,002)		620,088
Stockholders' equity		148,804		231,356		25,995		(257,351)		148,804
Total liabilities and stockholders' equity	$	510,786	$	742,499	$	138,960	$	(623,353)	$	768,892

Condensed Consolidating Statements of Cash Flows



	Nine Months Ended September 30, 2013
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Net cash (used in) provided by operating activities	$	(20,539)	$	136,589	$	6,435	$	(10)	$	122,475
Additions to property and equipment		—		(31,213)		(10,495)		—		(41,708)
Payments for exclusive license agreements, site acquisition costs, and other intangible assets		—		(1,502)		(2,392)		—		(3,894)
Intercompany fixed asset mark-up		—		—		(10)		10		—
Investment in subsidiary		(94,007)		(118,643)		—		212,650		—
Funding of intercompany notes payable		(242,215)		(3,100)		—		245,315		—
Payments received on intercompany notes payable		241,302		35,266		—		(276,568)		—
Acquisitions, net of cash acquired		—		(17,374)		(169,590)		—		(186,964)
Net cash used in investing activities		(94,920)		(136,566)		(182,487)		181,407		(232,566)
Proceeds from borrowings of long-term debt		275,977		—		—		—		275,977
Repayments of long-term debt and capital leases		(175,754)		(8)		(1,117)		—		(176,879)
Proceeds from intercompany notes payable		—		75,854		169,461		(245,315)		—
Repayments of intercompany notes payable		—		(159,459)		(117,109)		276,568		—
Debt issuance and modification costs		(761)		—		—		—		(761)
Payment of contingent consideration		—		(750)		—		—		(750)
Proceeds from exercises of stock options		2,060		—		—		—		2,060
Excess tax benefit from stock-based compensation expense		17,867		—		—		—		17,867
Repurchase of capital stock		(3,917)		—		—		—		(3,917)
Issuance of capital stock		—		80,953		131,697		(212,650)		—
Net cash provided by (used in) financing activities		115,472		(3,410)		182,932		(181,397)		113,597
Effect of exchange rate changes on cash		—		—		1,189		—		1,189
Net increase (decrease) in cash and cash equivalents		13		(3,387)		8,069		—		4,695
Cash and cash equivalents as of beginning of period		5		10,674		3,182		—		13,861
Cash and cash equivalents as of end of period	$	18	$	7,287	$	11,251	$	—	$	18,556

Condensed Consolidating Statements of Cash Flows — continued



	Nine Months Ended September 30, 2012
	Parent		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Net cash (used in) provided by operating activities	$	(4,144)	$	79,600	$	19,101	$	(232)	$	94,325
Additions to property and equipment		—		(50,913)		(24,962)		—		(75,875)
Payments for exclusive license agreements, site acquisition costs, and other intangible assets		—		(1,459)		(3,258)		—		(4,717)
Intercompany fixed asset mark-up		—		—		(232)		232		—
Funding of intercompany notes payable		(178,075)		(11,797)		—		189,872		—
Payments received on intercompany notes payable		170,145		—		—		(170,145)		—
Acquisitions, net of cash acquired		—		(17,663)		(222)		—		(17,885)
Net cash used in investing activities		(7,930)		(81,832)		(28,674)		19,959		(98,477)
Proceeds from borrowings of long-term debt		207,900		—		—		—		207,900
Repayments of long-term debt and capital leases		(196,400)		(9)		(1,987)		—		(198,396)
Proceeds from intercompany notes payable		—		174,374		15,498		(189,872)		—
Repayments of intercompany notes payable		—		(170,145)		—		170,145		—
Repayments of borrowings under bank overdraft facility, net		—		—		(162)		—		(162)
Proceeds from exercises of stock options		5,128		—		—		—		5,128
Repurchase of capital stock		(4,462)		—		—		—		(4,462)
Net cash provided by financing activities		12,166		4,220		13,349		(19,727)		10,008
Effect of exchange rate changes on cash		—		—		(335)		—		(335)
Net increase in cash and cash equivalents		92		1,988		3,441		—		5,521
Cash and cash equivalents as of beginning of period		1		4,721		854		—		5,576
Cash and cash equivalents as of end of period	$	93	$	6,709	$	4,295	$	—	$	11,097

CAUTIONARY STATEMENT REGARDING FORWARD - LOOKING STATEMENTS

Certain statements and information in this Form 10 - Q may constitute “forward - looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward - looking statements, which are generally not historical in nature. These forward -l ooking statements are based on our current expectations , beliefs , assumptions, or forecasts concerning future developments and their potential effect on us. While management believes that these forward - looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we currently anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward - looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, those summarized below:

·	our financial outlook and the financial outlook of the ATM industry;

·	our ability to respond to recent and future network and regulatory changes, including potential requirements surrounding Europay, MasterCard and Visa (“EMV”) security standards ;

our ability to respond to potential reductions in the amount of net interchange fees that we receive from global and regional debit networks for transactions conducted on our ATMs due to pricing changes implemented by those networks as well as changes in how issuers route their ATM transactions over those networks ;

·	our ability to renew and strengthen our existing customer relationships and add new customers;

·	our ability to pursue and successfully integrate acquisitions, including the acquisition of Cardpoint Limited (“Cardpoint”) that w as completed in August 2013;

·	our ability to provide new ATM solutions to retailers and financial institutions;

·	our ATM vault cash rental needs, including potential liquidity issues with our vault cash providers and our ability to continue to secure vault cash rental agreements in the future ;

·	our ability to successfully manage our existing international operations and to continue to expand internationally;

·	our ability to prevent thefts of cash and data security breaches;

·	our ability to manage the risks associated with our third-party service providers failing to perform their contractual obligations;

·	our ability to manage concentration risks with key customers, vendors, and service providers;

·	changes in interest rates and foreign currency rates;

·	our ability to successfully implement our corporate strategy;

·	our ability to compete successfully with new and existing competitors;

·	our ability to meet the service levels required by our service level agreements with our customers;

·	the additional risks we are exposed to in our U.K. armored transport business ; and

·	our ability to retain our key employees .

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see (1) Part II, “Item 1A. Risk Factors” in this Form 10-Q and (2) Part I, “Item 1A. Risk Factors” in the 2012 Form 10 ‑ K .

Readers are cautioned not to place undue reliance on forward-looking statements contained in this document, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Cardtronics, Inc. provides convenient automated consumer financial services through its network of automated teller machines (“ATMs”) and multi-function financial services kiosks. As of September 30, 2013 , we were the world’s largest retail ATM owner, providing services to over 80,400 devices throughout the United States (“U.S.”) (including the U.S. territories of Puerto Rico and the U.S. Virgin Islands), the United Kingdom (“U.K.”), Germany, Canada , and Mexico . Included within the number of devices in the U.S. are approximately 2,200 multi-function financial services kiosks that, in addition to traditional ATM functions such as cash dispensing and bank account balance inquiries, perform other consumer financial services, including bill payments, check cashing, remote deposit capture (which represents deposits taken using electronic imaging at ATMs not physically located at a bank), and money transfers. Also included in the number of devices in our network as of September 30, 2013 were approximately 13,900 ATMs to which we provided various forms of managed services. Under a managed services arrangement, retailers and financial institutions rely on us to handle some or all of the operational aspects associated with operating and maintaining ATMs, typically in exchange for a monthly service fee or fee per service provided. We typically do not receive surcharge and interchange fees in these arrangements, but rather those fees are earned by our customers.

We often partner with large, nationally and regionally-known retail merchants under multi-year contracts to place our ATMs and kiosks within their store locations. In doing so, we provide our retail partners with a compelling automated financial services solution that helps attract and retain customers, and in turn increases the likelihood that our devices will be utilized. We also partner with leading national and regional financial institutions to brand selected ATMs and financial services kiosks within our network. As of September 30, 2013 , approximately 18,400 of our domestic devices , approximately 2,000 of our ATMs in Mexico, and approximately 500 of our ATMs in Canada were under contract with financial institutions to place their logos on those machines and to provide convenient surcharge-free access for their banking customers. In return for the branding that we provide, we receive monthly fees on a per ATM basis from the branding institution, while retaining our standard fee schedule for non-customers of the financial institutions who use the branded ATMs. In Mexico, we a re also under contract with a couple of financial institutions to place their brands on our ATMs in exchange for certain services provided by them.

Additionally, we own and operate the Allpoint network, the largest surcharge-free ATM network within the U.S. (based on the number of participating ATMs). The Allpoint network, which has more than 55,000 participating ATMs globally , provides surcharge-free ATM access to customers of participating financial institutions that lack a significant ATM network in exchange for either a fixed monthly fee per cardholder or a set fee per transaction that is paid by the financial institutions who are members of the network. The Allpoint network includes a majority of our ATMs in the U.S., U.K., Puerto Rico and Mexico, approximately a quarter of our ATMs in Canada , and over 5,000 locations in Australia through a partnership with a local ATM owner and operator in that market . Allpoint also works with financial institutions that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, including general purpose, payroll, and electronic benefits transfer (“EBT”) cards. Under these programs, the issuing financial institutions pay Allpoint a fee per issued stored-value card or per transaction in return for allowing the users of those cards surcharge-free access to Allpoint’s participating ATM network.

Finally, we own and operate an electronic funds transfer (“EFT”) transaction processing platform that provides transaction processing services to our network of ATMs and financial services kiosks as well as ATMs owned and operated by third parties. For additional discussion of our operations and the manner in which we derive revenues, please refer to the 2012 Form 10-K.

Strategic Outlook

Over the past several years, we have expanded our operations both domestically and internationally through acquisitions, built an EFT transaction processing platform, launched our armored courier operation in the U.K., continued to deploy ATMs in high-traffic locations under contracts with well-known retailers, expanded our relationships with leading financial institutions, grown our Allpoint surcharge-free ATM network, and developed new product offerings such as managed ATM services.

Since July 2011, we have acquired five domestic ATM operators, expanding our fleet in both multi-unit regional retail chains and individual merchant ATM locations in the U.S. by approximately 28 , 5 00 ATMs. Additionally, we have acquired two Canadian ATM operators in October 2011 and December 2012 for a total of approximately 1,400 ATMs, which allowed us to enter into and expand our international presence in Canada. During August 2013, we acquired Cardpoint , an ATM service provider in the U.K. and Germany, which further expanded our U.K. ATM operations by approximately 7,100 ATMs, as well as allowed us to enter into the German market with approximately 800 ATMs.

In addition to ATM operators, we have also made strategic acquisitions including: (1) LocatorSearch in August 2011, a domestic leading provider of location search technology deployed by financial institutions to help customers and members find the nearest, most appropriate and convenient ATM location based on the service they seek; (2) CTS in January 2012, an ATM installation company in the U.K.; and (3) i-design group plc (“i-design”) in March 2013, which is a Scotland-based provider and developer of marketing and advertising software and services for ATM owners.

While we will continue to explore potential acquisition opportunities in the future as a way to grow our business, we expect to continue launch ing new products and services that will allow us to further leverage our existing ATM and financial services kiosk network. In particular, we see opportunities to expand our operations through the following:

Increase our Number of Deployed Devices with Existing as well as New Merchant Relationships. We believe that there are significant opportunities to deploy additional ATMs with our existing retail customers in locations that currently do not have ATMs. Furthermore, many of our retail customers continue to expand their number of active store locations, either through acquisitions or through new store openings, thus providing us with additional ATM deployment opportunities. Additionally, we are actively pursuing opportunities to deploy ATMs with new retailers, including retailers that currently do not have ATMs, as well as those that have existing ATM programs but that are looking for a new ATM provider. We believe our expertise, national footprint, strong record of customer service, and significant scale position us to successfully market to, and enter into long-term contracts with, additional leading national and regional merchants. In addition, we believe our existing relationships with leading U.S.- and U.K.-based retailers position us to expand in international locations where these existing partners have operations.

Expand our Relationships with Leading Financial Institutions. Through our merchant relationships as well as our diverse product and service offerings, we believe we can provide our existing financial institution customers with convenient solutions to fulfill their growing ATM and automated consumer financial services requirements. Further, we believe we can leverage these offerings to attract additional financial institutions as customers. Our services currently offered to financial institutions include branding our ATMs with their logos, providing remote deposit capture, providing surcharge-free access to their customers through our Allpoint network, and offering managed services for their ATM portfolios. Our EFT transaction processing capabilities provide us with the ability to provide customized control over the content of the information appearing on the screens of our ATMs and ATMs we process for financial institutions, which increases the types of products and services that we are able to offer to financial institutions. The number of machines and financial institutions participating in our Allpoint network are also increasing, enabling us to increase transaction counts and profitability on our existing machines.

Work with Non-Traditional Financial Institutions and Card Issuers to Further Leverage our Extensive ATM and Financial Services Kiosk Network. We believe that there are opportunities to develop or expand relationships with non-traditional financial institutions and card issuers, such as reloadable prepaid card issuers and alternative payment networks, which are seeking an extensive and convenient ATM network to complement their new card offerings. Additionally, we believe that many of the prepaid debit card issuers that exist today in the U.S. can benefit by providing their cardholders with access to our ATM network on a discounted or fee-free basis. For example, through our Allpoint network, we have sold access to our ATM network to issuers of stored value prepaid debit cards to provide the customers of these issuers with convenient and surcharge-free access to cash.

Increase Transaction Levels at our Existing Locations. We believe that there are opportunities to increase the number of transactions that are occurring today at our existing ATM locations. On average, only a small fraction of the customers that enter our retail customers’ locations utilize our ATMs and financial services kiosks. In addition to our existing initiatives that tend to drive additional transaction volumes to our ATMs, such as bank branding and network branding, we are working on developing new initiatives to potentially drive incremental transactions over our existing ATM locations. Examples of this effort are our 2011 acquisition of LocatorSearch, which helps consumers find our ATMs, and the launch of FeeAlert in the third quarter of 2012, which enables financial institutions to help their customers save money by steering them toward nearby in-network ATMs and away from ATM fees. Additionally, we have existing programs and are working to develop additional and broader programs to steer the cardholders of our existing financial institution partners and members of our Allpoint network to visit our ATMs in convenient retail locations. These programs may include incentives to cardholders such as coupons, rewards, and other offers that tend to provide motivation for customers to visit our ATMs within our existing retail footprint. While we are in the early stages of fully developing and implementing many of these programs, we believe that these programs, when properly structured, can serve to benefit each party (i.e. the retailer, the financial institution, and the cardholder.) As a result, we expect to gain additional transaction volumes through these efforts.

Develop and Provide Additional Services at our Existing ATMs. Service offerings by ATMs continue to evolve over time. Certain ATM models are capable of providing numerous automated consumer financial services, including bill payments, check cashing, remote deposit capture, money transfer, bill payment services, and stored-value card reload services. Certain of our devices are capable of, and currently provide, these types of services. We believe these non-traditional consumer financial services offered by our devices, and other machines that we or others may develop, could provide a compelling and cost-effective solution for financial institutions and stored-value prepaid debit card issuers looking to provide the convenience of branch banking in an off-premise retail setting. We also allow advertisers to place their messages on our ATMs equipped with advertising software in both the U.S. and the U.K . Offering additional services at our devices, such as advertising, allows us to create new revenue streams from assets that have already been deployed, in addition to providing value to our customers through beneficial offers and convenient services. We plan to develop additional products and services that can be delivered through our existing ATM network.

Pursue Additional Managed Services Opportunities. Over the last several years, we significantly expanded the number of ATMs that are operated under our managed services arrangement type. Under this arrangement, retailers and financial institutions generally pay us a fixed management fee per cardholder or a set fee per transaction in exchange for handling some or all of the operational aspects associated with operating and maintaining their ATM fleets. Surcharge and interchange fees are generally earned by the retailer or the financial institution. As a result, in this arrangement type, our revenues are partly protected from fluctuations in transaction levels of these machines and changes in network interchange rates. Additionally, in the U.K. where we have our own engineering, cash-in-transit, and installation organizations, we believe that opportunities exist to offer some (or all) of these services on a managed services basis to both retailers and financial institutions. We plan to pursue additional managed services opportunities with leading merchants and financial institutions in the United States, as well as international opportunities as they arise, working with our customers to provide them with a customized solution that fits their needs.

Pursue International Growth Opportunities. We have invested significant amounts of capital in the infrastructure of our United Kingdom, Canada, and Mexico operations, and we plan to continue selectively increasing the number of our ATMs in these markets , as well as in the newly-entered German market, applying many of the aforementioned strategies. In 2011, we entered into the Canadian market with our acquisition of Mr. Cash, subsequently renamed Cardtronics Canada. In August 2013, we entered into the German market with our acquisition of Cardpoint, which combined with the U.K. is operated under the umbrella of Cardtronics Europe. We plan to expand our operations in both Canada and Europe , primarily by exp anding our ATM footprint in those market s and establishing relationships with leading financial institutions. Additionally, we may expand our operations into selected other international markets where we believe we can leverage our operational expertise, EFT transaction processing platform, and scale advantages. Our future international expansion, if any, will depend on a number of factors, including the estimated economic opportunity to us, the business and regulatory environment in the international market, our ability to identify suitable business partners in the market, and other risks associated with international expansion.

Longer term, we believe there are opportunities to not only expand our ATM and financial services kiosk network, but to also expand the types of services that we offer through that network. We believe that recent industry regulatory changes coupled with the proliferation of stored-value prepaid debit cards provide us with a unique opportunity to leverage our extensive retail ATM and financial services kiosk network to provide a broader array of automated financial services to financial institutions and card issuers. For example, with recently enacted regulatory changes with respect to credit cards, debit cards, and traditional demand deposit accounts, there remains some uncertainty surrounding many of the revenue streams traditionally earned by financial institutions. As a result, we believe that our network of ATMs located in prime retail locations represents an attractive and affordable option for financial institutions looking to continue to expand their ATM network in a cost-effective manner. Additionally, we believe that the deployment of devices that perform other financial services, including check cashing, remote deposit capture, money transfer, bill payment services, and stored-value card reload services, could provide a compelling and cost-effective solution for financial institutions and stored-value prepaid debit card issuers looking to provide the convenience of branch banking in an off-premise retail setting.

Recent Events and Trends

Withdrawal Transaction and Revenue Trends – United States. For the three and nine month s ended September 30, 2013 , total same-store cash withdrawal transactions conducted on our domestic ATMs in creased by 1 .7 % and 0. 9 %, respectively, over the comparable periods in the prior year. We define same-store ATMs as all ATMs that were continuously transacting for both the current period and the comparable period in the prior year to ensure the exclusion of any new growth or mid-month installations. We believe that the moderate third quarter in crease in transactions was attributable to several factors, including: (1) a continued shift in the mix of withdrawal transactions being conducted on our domestic network of ATMs (i.e., more surcharge-free and less surcharge-based withdrawal transactions) resulting from the continued evolution and growth of our surcharge-free product offerings; and (2) the proliferation in the use of network-branded stored-value cards by employers and governmental agencies for payroll and benefit-related payments . These increases were partially offset in the nine months ended September 30, 2013 due to the negative effects in the first quarter of 2013 from the extra day in 2012 due to leap year, decreased consumer spending, surcharge rate increases , and unfavorable weather in the first quarter of 2013 . We expect our domestic same-store transaction growth rate to remain relatively consistent with our third quarter rate during the fourth quarter of 2013.

Over the last several years, some of the large U.S. banks serving the market for consumer banking services have begun to aggressively compete for market share, and part of their competitive strategy is to increase their number of customer touch points, including the establishment of an ATM network to provide convenient, surcharge-free access to cash for their customers. As a result, in certain situations, we have faced direct competition from large U.S. banks for large ATM placement opportunities. While a large owned-ATM network would be a key strategic asset for a bank, we believe it would be uneconomical for all but the largest banks to build and operate an extensive ATM network. Bank branding of our ATMs and participation in our surcharge-free network allow financial institutions to rapidly increase surcharge-free ATM access for their customers at substantially lower cost than building their own ATM networks. We also believe there is an opportunity for a large non-bank ATM and financial services kiosk operator such as ourselves, with lower costs and an established operating history, to contract with financial institutions and retailers to manage their ATM networks. Such an outsourcing arrangement could reduce a financial institution’s operational costs while extending its customer service. Furthermore, we believe there are opportunities to provide selected services on an outsourced basis, such as transaction

processing services, to other independent owners and operators of ATMs and financial services kiosks. These factors have led to an increase in bank branding, participation in surcharge-free networks, and managed services arrangements, and we believe that there will be continued growth in such arrangements .

Financial Regulatory Reform in the United States. The Dodd-Frank Act, which contains broad measures aimed at overhauling financial regulations within the U.S., was signed into law on July 21, 2010. Among many other things, the Dodd-Frank Act includes provisions that (1) have resulted in the creation of a new Bureau of Consumer Financial Protection, (2) limit the activities that banking entities may engage in, and (3) give the Federal Reserve the authority to regulate interchange transaction fees charged by EFT networks for electronic point-of-sale (“ POS ”) debit transactions. ATM debit transactions were determined not to be subject to regulation under the Dodd-Frank Act. As a result of the Dodd-Frank Act, we have seen networks and banks take different actions to attempt to mitigate reductions to fees that they previously earned on certain transaction types, such as POS debit interchange. As potentially an indirect consequence, certain networks over which our ATM transactions are routed have reduced the net interchange paid to us. Other possible impacts of this broad legislation are unknown to us at this time, but we have seen certain actions taken by banks that indicate debit cards are no longer considered as an attractive form of payment as they previously had been. Decreased profitability on POS debit transactions could cause banks to provide incentives to their customers to use other payment types, such as credit cards. We also believe that merchant retailers may continue to have a preference to receive cash as a form of payment. In addition, there are other components to the Dodd-Frank Act that may ultimately impact us, but at this time, we are uncertain as to what impact the existing and future laws, and the resulting behavior by consumers and financial institutions, will ultimately have on our business.

Europay, MasterCard, Visa (“EMV”). The EMV standard provides for the security and processing of information contained on microchips embedded in certain debit and credit cards, known as “smart cards.” In the last year, MasterCard announced plans for a liability shift for fraudulent cross-border transactions from the issuers of these cards to the party that has not made the investment in EMV equipment ( either cards or ATMs ) . MasterCard’s liability shift on International Maestro (MasterCard) transactions occu r r ed in April 2013, and while the majority of our U.S. ATMs are not currently EMV-compliant, we do not expect this liability shift will have a significant impact on our business or results as International Maestro transactions currently comprise less than 0.5% of our U.S. tra nsaction volume. In February 2013, Visa announced plans for a liabil ity shift to occur in October 2017 for all transactions types on domestic or international EMV-issued cards. MasterCard has also announced that liability shift for its domestic ATM transactions on EMV-issued cards will occur in October 201 6 . At this time, neither MasterCard nor Visa are requiring mandatory upgrades to ATM equipment; however, increased fraudulent activity on ATMs in the future or the shifting of liability for fraudulent activity on all ATM transactions without EMV readers, or other business or regulatory factors could require us to upgrade or replace a significant portion of our existing U.S. ATM fleet. We are closely monitoring the migration toward the EMV standard, and all of our recent ATM deployments have been with ATMs that are EMV-ready. At this time, through a combination of ordinary replacement of equipment, routine scheduled maintenance visits to our ATMs, and evolving technology to meet compliance, we do not expect the EMV migration to have a significant impact on our future capital investments and results from operations. However, we currently estimate that the total potential cost to make our entire current Company-owned U.S. ATM fleet fully compliant with the EMV standard is approximately $30 million to $35 million in addition to what we would typically spend on new customer installations and fleet upgrades . With the increased capital investments required as a direct result of EMV, our depreciation expense may increase in the future. T here is also a possibility that we could incur asset write-offs or accelerated depreciation expense on certain ATM units. Additionally, we could experience a higher rate of unit count attrition for our merchant-owned ATMs in the future as a result of this standard.

Withdrawal Transaction and Revenue Trends – United Kingdom. In recent periods, we have installed more free-to-use ATMs as opposed to surcharging pay-to-use ATMs in the U.K., and as a result of this mix shift, our overall withdrawal transactions in the U.K. (excluding the effect of Cardpoint acquisition) increased by 4 % and 1 3 % for the three and nine months ended September 30, 2013 , respectively, over the same period s in the prior year. Although we earn less revenue per cash withdrawal transaction on a free-to-use machine, the increase in the number of transactions conducted on free-to-use machines has generally translated into higher overall revenues.

Financial Regulator y Reform in the United Kingdom. In March 2013, the U.K. Treasury department (the “Treasury”) issued a formal recommendation to further regulate the U.K. payments industry, including LINK, the nation’s formal ATM scheme. In October 2013, the U.K. government responded by establishing the new Payment Systems Regulator (“PSR”) to oversee any payment system operating in the U.K. and its participants. While the ultimate impact of the establishment of the PSR will not be known until it is officially formed and its powers defined , management believes that it could help stabilize LINK ATM interchange rates, which are a significant source of our revenues in that market. We will continue to monitor the development of the PSR and take necessary actions, as needed, to be in compliance with the prescribed regulations .

United Kingdom Property Taxes . In the U.K., there is no requirement for property owners to declare ownership and valuation to taxing authorities for property tax purposes (referred to as “business rates” in the U.K.). Rather, the U.K. government sets the valuations on all the assessable properties that it is aware of and distributes the results to the various local government councils, who then may or may not send property tax bills to property owners at their discretion. Through mid-2013, we had only received tax bills for a portion of the ATMs in the U.K. and these amounts were not significant in the past. In May 2013, we received a notice from the U.K. governmental agency in charge of property taxes stating that it had obtained location and transaction count data for all ATMs in the U.K., and that it was in the process of creating or updating the valuations on many U.K. ATMs across the industry . In September

2013, we received a listing of those proposed valuations on our Bank Machine , Ltd. (“Bank Machine”) ATMs (i.e., exclusive of our recently acquired Cardpoint ATMs), which indicated an annual incremental assessment of approximately £1.8 million ($2.9 million), net of amounts that may be contractually recovered from merchants and potential reductions resulting from successfully challenging the assessments with the U.K. government and local authorities. Furthermore, under U.K. law, these taxes may be payable retroactive to April 2010 or to the date of first occupancy, whichever is later. As a result, we believe that it is probable that we will be assessed on significantly more ATMs than in the past, and that our net liability for previously-unassessed ATMs could total approximately £5. 7 million ($9. 2 million) as of September 30, 2013. Therefore, in the three months ended September 30, 2013, we recorded an additional charge for £5. 7 million ($9. 2 million) reflecting our best estimate of this liability. This amount was expensed through the Cost of ATM operating revenues line item on our Consolidated Statement of Operations. We believe there are several strategies to mitigate these property tax assessments and we plan to aggressively pursue these strategies , to not only reduce the retroactive portion of such assessments, but to also minimize the potential ongoing impact of this change in approach by the U.K. taxing authorities. However, if we are unsuccessful in these efforts, we believe that the annual incremental impact could be as high as £2.3 million ($3.7 million) for our entire U.K. fleet of ATMs (inclusive of ATMs acquired from Cardpoint).

Expansion in Canada . We entered the Canadian market in October 2011 through our acquisition of Mr. Cash. Part of our initial strategy to grow in that market was to leverage existing relationships with merchant retailers with whom we have significant existing relationships in the U.S. During 2012, we executed a multi-year agreement with 7-Eleven, our largest merchant retail partner in the U.S., to be the exclusive ATM service provider for all of their stores in Canada. We also executed a contract with The Bank of Nova Scotia (“Scotiabank”) to place its bank brand on all of the 7-Eleven ATMs in Canada and included all of the 7-Eleven ATMs in Canada in our Allpoint network. Finally, in December 2012, we further expanded in Canada through our acquisition of Can-Do-Cash. We are actively seeking other similar expansion opportunities with existing and new merchant partners in this market.

Withdrawal Transaction and Revenue Trends – Mexico. In September 2012, we completed a required migration of our U.S. dollar-dispensing ATMs (“USD ATMs”) in Mexico so that we could continue to settle our U.S. dollar-denominated transactions through Promoción y Operación S.A. de C.V. (“PROSA-RED”) . This process change, combined with the overall recent downward trend in surcharge transactions in Mexico stemming from regulatory changes in 2010, has resulted in a reduction of the revenues and profits we earn from our ATMs in Mexico. As a result, we have reduced our ATM deployments in Mexico in recent years and we continue to evaluate each ATM’s revenue and profit contributions to our Mexico operations.

Results of Operations

The following table sets forth line items from our C onsolidated S tatements of O perations as a percentage of total revenues for the periods indicated. Percentages may not add due to rounding.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Revenues:
ATM operating revenues	97.3	%	96.2	%	97.7	%	94.6	%
ATM product sales and other revenues	2.7		3.8		2.3		5.4
Total revenues	100.0		100.0		100.0		100.0
Cost of revenues:
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization shown separately below) ⁽¹⁾	67.4		65.3		65.8		64.3
Cost of ATM product sales and other revenues	2.6		3.3		2.3		4.8
Total cost of revenues	70.0		68.7		68.0		69.1
Gross profit	30.0		31.3		32.0		30.9
Operating expenses:
Selling, general, and administrative expenses	9.2		7.7		9.3		8.2
Acquisition-related expenses	1.5		0.2		1.2		0.3
Depreciation and accretion expense	7.4		7.9		7.7		7.6
Amortization expense	3.5		2.8		3.1		2.8
Loss on disposal of assets	—		—		0.1		0.1
Total operating expenses	21.7		18.6		21.4		19.1
Income from operations	8.3		12.7		10.6		11.8
Other expense (income):
Interest expense, net	2.4		2.6		2.5		2.7
Amortization of deferred financing costs	0.1		0.1		0.1		0.1
Other income	(0.2)		(0.5)		(0.5)		(0.2)
Total other expense	2.3		2.2		2.1		2.7
Income before income taxes	6.0		10.5		8.5		9.1
Income tax expense	9.9		4.1		6.1		3.6
Net (loss) income	(3.9)		6.4		2.4		5.6
Net loss attributable to noncontrolling interests	(0.3)		(0.1)		(0.2)		—
Net (loss) income attributable to controlling interests and available to common stockholders	(3.7)	%	6.5	%	2.6	%	5.6	%

_______________

(1) Excludes effects of depreciation, accretion, and amortization expense of $ 22.8 million and $ 19.5 million for the three months ended September 30, 2013 and 2012 , respectively , and $62.8 million and $56.0 million for the nine month s ended September 30, 2013 and 2012 , respectively . The inclusion of this depreciation, accretion, and amortization expense in Cost of ATM operating revenues would have increased our Cost of ATM operating revenues as a percentage of total revenues by 10.0 % and 9.8 % for the three months ended September 30, 2013 and 2012 , respectively , and by 9.9% and 9.6% for the nine months ended September 30, 2013 and 2012 , respectively .

Key Operating Metrics

We rely on certain key measures to gauge our operating performance, including total transactions, total cash withdrawal transactions, ATM operating revenues per ATM per month, and ATM operating gross profit margin. The following table sets forth information regarding certain of these key measures for the periods indicated, excluding the effect of the acquisitions during the periods presented for comparative purposes.



EXCLUDING ACQUISITIONS:	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Average number of transacting ATMs:
United States: Company-owned		28,072			26,436			27,782			25,658
United Kingdom		4,328			4,175			4,320			3,906
Mexico		2,620			2,768			2,673			2,814
Canada		1,151			1,003			1,092			720
Subtotal		36,171			34,382			35,867			33,098
United States: Merchant-owned		16,381			19,006			14,869			16,977
A verage number of transacting ATMs – ATM operations		52,552			53,388			50,736			50,075

United States: Managed services - Turnkey		2,164			2,150			2,198			2,060
United States: Managed services - Processing Plus		5,728			3,817			4,770			3,839
United Kingdom: Managed services		21			21			21			21
Average number of transacting ATMs – Managed services		7,913			5,988			6,989			5,920

Total average number of transacting ATMs		60,465			59,376			57,725			55,995

Total transactions (in thousands) :
ATM operations		199,781			184,393			582,051			513,984
Managed services		13,751			10,051			35,637			29,620
Total transactions		213,532			194,444			617,688			543,604

Total cash withdrawal transactions (in thousands) :
ATM operations		122,267			117,070			356,865			326,343
Managed services		8,611			6,446			22,300			18,791
Total cash withdrawal transactions		130,878			123,516			379,165			345,134

Per ATM per month amounts (excludes managed services):
Cash withdrawal transactions		776			731			782			724

ATM operating revenues	$	1,226		$	1,170		$	1,256		$	1,196
Cost of ATM operating revenues ⁽¹⁾		810			791			833			809
ATM operating gross profit ⁽¹⁾⁽²⁾	$	416		$	379		$	423		$	387

ATM operating gross profit margin ⁽¹⁾⁽²⁾		33.9	%		32.4	%		33.7	%		32.4	%

____________

(1) Amounts presented exclude the effect of depreciation, accretion, and amortization expense, which is presented separately in our consolidated statements of operations. Additionally, excludes the effect of $8.4 million of nonrecurring expense related to U.K. property taxes for prior periods in the three and nine months ended September 30, 2013 .

( 2 ) ATM operating gross profit and ATM operating gross profit margin are measures of profitability that are calculated based on only the revenues and expenses that relate to operating ATMs in our portfolio. Revenues and expenses relating to managed services and ATM equipment sales and other ATM-related services are not included.

The following table sets forth information regarding certain of these key measures for the periods indicated, including the effect of the acquisitions in the periods presented :



INCLUDING ACQUISITIONS:	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Average number of transacting ATMs:
United States: Company-owned		28,507			26,436			28,052			25,658
United Kingdom		9,100			4,175			6,229			3,906
Mexico		2,620			2,768			2,673			2,814
Canada		1,638			1,003			1,588			720
Germany		550			—			220			—
Subtotal		42,415			34,382			38,762			33,098
United States: Merchant-owned		21,449			19,006			20,843			16,977
Average number of transacting ATMs – ATM operations		63,864			53,388			59,605			50,075

United States: Managed services - Turnkey		2,164			2,150			2,198			2,060
United States: Managed services - Processing Plus		11,309			3,817			7,319			3,839
United Kingdom: Managed services		21			21			21			21
Canada: Managed services		329			—			317			—
Average number of transacting ATMs – Managed services		13,823			5,988			9,855			5,920

Total average number of transacting ATMs		77,687			59,376			69,460			55,995

Total transactions (in thousands) :
ATM operations		225,362			184,393			616,698			513,984
Managed services		18,410			10,051			42,472			29,620
Total transactions		243,772			194,444			659,170			543,604

Total cash withdrawal transactions (in thousands) :
ATM operations		137,568			117,070			379,281			326,343
Managed services		12,286			6,446			27,775			18,791
Total cash withdrawal transactions		149,854			123,516			407,056			345,134

Per ATM per month amounts (excludes managed services):
Cash withdrawal transactions		718			731			707			724

ATM operating revenues	$	1,128		$	1,170		$	1,123		$	1,196
Cost of ATM operating revenues ⁽ ¹ ⁾		736			791			737			809
ATM operating gross profit ⁽ ¹ ⁾⁽ ² ⁾	$	392		$	379		$	386		$	387

ATM operating gross profit margin ⁽ ¹ ⁾⁽ ² ⁾		34.8	%		32.4	%		34.4	%		32.4	%

____________

Revenues



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013		2012		% Change		2013		2012		% Change
	(In thousands)						(In thousands)
ATM operating revenues	$	222,678	$	191,469	16.3	%	$	619,637	$	550,849	12.5	%
ATM product sales and other revenues		6,141		7,560	(18.8)	%		14,904		31,240	(52.3)	%
Total revenues	$	228,819	$	199,029	15.0	%	$	634,541	$	582,089	9.0	%

Three Months Ended September 30, 2013 Compared to Three Months Ended September 30, 2012

ATM operating revenues. ATM operating revenues generated during the three month s ended September 30, 2013 increase d $ 31.2 million from the three month s ended September 30, 2012 . Below is the detail, by segment, of the changes in the various components of ATM operating revenues:



	Variance: Three Months Ended September 30, 2012 to
	Three Months Ended September 30, 2013
	U.S.		Europe		Other International		Eliminations		Total
	Increase (decrease)
	(In thousands)
Surcharge revenue	$	1,871	$	11,860	$	(831)	$	—	$	12,900
Interchange revenue		1,929		7,556		316		—		9,801
Bank branding and surcharge-free network revenues		5,138		—		625		(14)		5,749
Managed services revenues		1,258		—		—		—		1,258
Other revenues		2,058		1,242		(42)		(1,757)		1,501
Total increase in ATM operating revenues	$	12,254	$	20,658	$	68	$	(1,771)	$	31,209

United States . During the three month s ended September 30, 2013 , our U.S. operations experienced a $ 12.3 million increase in ATM operating revenues when compared to the same period in 2012 . Acquisitions completed since the beginning of last year’s third quarter accounted for $ 3. 5 million of this increase . The result s of these acquired businesses (or a portion thereof) were included in the consolidated financial results for the three months ended September 30, 2013 but not in the comparable period in 2012 . The remaining $ 8 .8 million increase was due to growth achieved from a combination of revenue sources, including: ( 1) increased surcharge and interchange revenue s primarily as a result of a higher machine count and total transaction count ; (2 ) an increase in bank branding and surcharge-free network revenues that resulted from the continued growth of participating banks and other financial institutions in our bank branding program and our Allpoint network; and finally , ( 3 ) an increase in managed services revenue as a result of the expansion of these services in the past year. The increase in other revenues in the U.S. is primarily from intercompany transaction processing, which is eliminated in consolidation .

For additional information on recent trends that have impacted, and may continue to impact, the revenues generated by our U.S. operations, see Recent Events and Trends - Withdrawal Transaction and Revenue Trends – United States above.

Europe . Our Europe operations , which now includes both the U.K. and Germany as a result of the Cardpoint acquisition, experienced a $ 20.7 million, or 68% , increase in ATM operating revenues during the three month s ended September 30, 2013 when compared to the same period in 2012 . Of this increase, $18. 6 million was attributable to the contribution of the i-design and Cardpoint acquisitions completed in 2013. Th e remaining $ 2.1 million increase was primarily driven by higher interchange revenues as a result of a 1 4 % increase in the number of total transactions conducted on our ATMs in that market, partially offset by slightly lower interchange rates. Excluding the effect of foreign currency exchange rate movements between the two periods, the total increase in ATM operating revenues for the period would have been $21.7 million, or 71%, when compared to the same period in 2012.

For additional information on recent trends that have impacted, and may continue to impact, the revenues generated by our U.K. operations, see Recent Events and Trends - Withdrawal Transaction and Revenue Trends – United Kingdom above.

Other International . ATM operating r evenues in this segment, which include the results of our Mexico operation and our Canadian subsidiary, remained fairly consistent between the quarter s ended September 30, 2013 and the same period in 2012 . We believe the year-over-year consistency was primarily the result of an increase in ATM operating revenues in our Canadian operations from the addition of a significant new merchant contract in 2012 and the acquisition of Can-Do-Cash in December 2012, which was partially offset by lower ATM operating revenues from our Mexico operations. Foreign currency exchange rate movements did not have a material effect on the reported ATM operating revenues in this segment.

ATM product sales and other revenues. ATM product sales and other revenues for the three month s ended September 30, 2013 totaled $ 6.1 million , or a decrease of $ 1.4 million from the same period in 2012 . During the thir d quarter of 2012 , we experience d increased ATM product sales due to the continued replacement of certain ATMs that were not compliant with the new regulations under the Americans with Disabilities Act (“ADA”) that became effective in early 2012 .

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

ATM operating revenues. ATM operating revenues generated during the nine months ended September 30, 2013 increased $68.8 million from the nine months ended September 30, 2012 . Below is the detail, by segment, of changes in the various components of ATM operating revenues:



	Variance: Nine Months Ended September 30, 2012 to
	Nine Months Ended September 30, 2013
	U.S.		Europe		Other International		Eliminations		Total
	Increase (decrease)
	(In thousands)
Surcharge revenue	$	9,772	$	11,682	$	1,488	$	—	$	22,942
Interchange revenue		3,220		15,097		2,825		—		21,142
Bank branding and surcharge-free network revenues		16,355		—		2,398		(46)		18,707
Managed services revenues		2,745		(3)		—		—		2,742
Other revenues		5,756		2,686		(101)		(5,086)		3,255
Total increase in ATM operating revenues	$	37,848	$	29,462	$	6,610	$	(5,132)	$	68,788

United States . During the nine months ended September 30, 2013 , our U. S. operations experienced a $37.8 million, or 9% , increase in ATM operating revenues compared to the same period in 2012 . The acquisitions made in the last year contributed $ 8.4 million to this increase. The remaining $ 29.4 million increase was primarily due to the same reasons mentioned above in the quarterly results analysis , including: ( 1) increased surcharge revenues primarily as a result of a higher machine count; (2) an increase in bank branding and surcharge-free network revenues that resulted from the continued growth of participating banks and other financial institutions in our bank branding program and our Allpoint network; and (3) an increase in managed services revenue as a result of an increase in new contracts entered into under this arrangement type . The increase in other revenues in the U.S. is primarily from intercompany transaction processing, which is eliminated in consolidation.

Europe . Our Europe operations also contributed $29.5 million, or a 35% increase , in ATM operating revenues for the nine months ended September 30, 2013 from the first nine months of 2012 . The i-design and Cardpoint acquisitions completed in 2013 contributed $ 19.8 million to the total increase . As was the case with the three month period, t he remaining $9. 7 million increase was primarily driven by higher interchange revenues as a result of a 23 % increase in the number of total transactions in the U.K. (excluding acquisitions) , which was partially offset by slightly lower interchange rates. Excluding the unfavorable impact of foreign currency exchange rate movements between the two periods, the total increase in ATM operating revenues for the period would have been $ 32.0 million, or 38 %, when compared to the same period in 201 2 .

Other International . Our Other International operations experienced a $6.6 million, or 25% , increase in revenues during the nine months ended September 30, 2013 over the same period in 2012 . As was the case with the three month period, Canadian operations contributed to this increase due to the addition of a significant new merchant contract in 2012 and the acquisition of Can-Do-Cash in December 2012 . Lower ATM operating revenues from our Mexico operations partially offset this increase . Foreign currency exchange rate movements did not have a material effect on the reported ATM operating revenues in this segment .

ATM product sales and other revenues. ATM product sales and other revenues for the nine months ended September 30, 2013 decrease d $16.3 million compared to those generated during the same period in 2012 . The decrease was primarily due to the same reasons mentioned above in the quarterly results, including decreased equipment and value-added reseller (“VAR”) program sales during the period .

Cost of Revenues



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013		2012		% Change		2013		2012		% Change
	(In thousands)						(In thousands)
Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization)	$	154,319	$	130,064	18.6	%	$	417,361	$	374,312	11.5	%
Cost of ATM product sales and other revenues		5,950		6,665	(10.7)	%		14,307		27,925	(48.8)	%
Total cost of revenues (exclusive of depreciation, accretion, and amortization)	$	160,269	$	136,729	17.2	%	$	431,668	$	402,237	7.3	%

Three Months Ended September 30, 2013 Compared to Three Months Ended September 30, 2012

Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization). The cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) for the three month s ended September 30, 2013 increase d $ 24.3 million when compared to the same period in 2012 . The following is a detail, by segment, of changes in the various components of the cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization):



	Variance: Three Months Ended September 30, 2012 to
	Three Months Ended September 30, 2013
	U.S.		Europe		Other International		Eliminations		Total
	Increase (decrease)
	(In thousands)
Merchant commissions	$	1,174	$	5,047	$	66	$	—	$	6,287
Vault cash rental expense		(101)		226		13		—		138
Other costs of cash		1,385		1,136		150		—		2,671
Repairs and maintenance		739		320		119		—		1,178
Communications		(594)		809		33		(57)		191
Transaction processing		1,702		1,082		147		(1,663)		1,268
Stock-based compensation		8		—		—		—		8
Other expenses		1,046		11,398		119		(49)		12,514
Total increase in cost of ATM operating revenues	$	5,359	$	20,018	$	647	$	(1,769)	$	24,255

United States . During the three months ended September 30, 2013 , our U.S. operations experienced a $ 5.4 million increase in cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) when compared to the same period in 2012 . The acquisitions completed since the beginning of last year’s third quarter contributed $1. 6 million to the increase, and the remaining increase primarily resulted from higher transaction volumes and ATM unit growth driven by organic revenue growth , and other expenses from higher employee costs . Vault cash rental expense decreased during the three months ended September 30, 2013 compared to the same period in 2012 due to more efficient vault cash forecasting, which translated to generally lower daily vault cash balance s outstanding. Communications expense decreased as a result of more favorable pricing compared to the prior year .

Europe . In the quarter ended September 30, 2013 , our Europe operations experienced a $ 20.0 million, or 84% , increase in the cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) when compared to the same period in 2012 . This increase was a result of the acquisitions completed in 2013, which resulted in a $12. 5 million increase in cost of ATM operating revenues. The other expenses category shown above was higher primarily due to $9. 0 million in charges associated with property taxes assessed on certain ATMs in the U.K. For further details on this matter, see Recent Events and Trends – United Kingdom Property Taxes . Excluding the effect of the acquisitions and the property tax charge described above, cost of ATM operating revenues in the U.K. would have decreased by $1.2 million as a result of realizing operating cost efficiencies . Excluding the impact of foreign currency exchange rate movements between the two periods, the total increase in the cost of ATM operating revenues for the period would have been $ 21 .7 million, or 86 %, when compared to the same period in 2012 .

Other International . The cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) from our Other International operations increased by $ 0.6 million during the nine months ended September 30, 2013 when compared to the same period in 2012 . This increase was primarily due to the growth of our Canadian operations, as described above.

Cost of ATM product sales and other revenues. The cost of ATM product sales and other revenues decrease d by $ 0.7 million during the three month s ended September 30, 2013 when compared to the same period in 2012 . This decrease is consistent with the decrease in related revenues, as discussed above .

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization). The cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) for the nine months ended September 30, 2013 increased $43.0 million when compared to the same period in 2012 . The following is a detail, by segment, of changes in the various components of the cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization):



	Variance: Nine Months Ended September 30, 2012 to
	Nine Months Ended September 30, 2013
	U.S.		Europe		Other International		Eliminations		Total
	Increase (decrease)
	(In thousands)
Merchant commissions	$	6,585	$	6,882	$	3,142	$	—	$	16,609
Vault cash rental expense		(875)		(394)		603		—		(666)
Other costs of cash		4,268		1,888		1,296		—		7,452
Repairs and maintenance		(951)		426		609		—		84
Communications		(948)		1,301		379		(185)		547
Transaction processing		3,905		2,360		430		(4,863)		1,832
Stock-based compensation		(103)		—		—		—		(103)
Other expenses		3,518		13,027		830		(81)		17,294
Total increase in cost of ATM operating revenues	$	15,399	$	25,490	$	7,289	$	(5,129)	$	43,049

United States . During the nine months ended September 30, 2013 , the cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) incurred by our U.S. operations increased $15.4 million, or 5% , when compared to the cost incurred during the same period in 2012 . The acquisitions completed in the last year contributed $ 2.8 million to this increase with the remain ing $12.6 million increase resulting from higher transaction volumes and ATM unit growth driven by organic revenue growth . Partially offsetting these increases w ere decrease s in : (1) vault cash rental expense, which was due to lower daily vault cash balances outstanding, as explained above in the quarterly analysis; (2) repairs and maintenance, as the expenses during the nine months ended September 30, 2012 were higher as a result of certain compliance activities ; and (3) communications, as a result of lower negotiated contract rates implemented in 2013.

Europe . The cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) of our Europe operations increased during the nine months ended September 30, 2013 by $25.5 million , or 39% , when compared to the same period in 2012 . The acquisitions completed in 2013 contributed $1 3.3 million of this increase . Th e remaining $ 12. 2 increase was primarily due to the property tax es expense increase explained above in the quarterly analysis and organic unit and transaction growth in the U.K. Excluding the impact of foreign currency exchange rate movements between the two periods, the total increase in the cost of ATM operating revenues for the period would have been $ 27.3 million, or 41 %, when compared to the same period in 2012.

Other International . The cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization) from our Other International operations increased by $7.3 million during the nine months ended September 30, 2013 when compared to the same period in 2012 . Thi s increase was primarily due to the growth of our Canadian operations, as described above.

Cost of ATM product sales and other revenues. The $ 13.6 million decrease in cost of ATM product sales and other revenues during the nine months ended September 30, 2013 is consistent with the decrease in related revenues, as discussed above .

Gross Profit Margin



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
ATM operating gross profit margin:
Exclusive of depreciation, accretion, and amortization	30.7	%	32.1	%	32.6	%	32.0	%
Inclusive of depreciation, accretion, and amortization	20.4	%	21.9	%	22.5	%	21.9	%
ATM product sales and other revenues gross profit margin	3.1	%	11.8	%	4.0	%	10.6	%
Total gross profit margin:
Exclusive of depreciation, accretion, and amortization	30.0	%	31.3	%	32.0	%	30.9	%
Inclusive of depreciation, accretion, and amortization	20.0	%	21.5	%	22.1	%	21.3	%

ATM operating gross profit margin . For the three month s ended September 30, 2013 , our ATM operating gross profit margin exclusive of depreciation, accretion, and amortization decrease d by 1.4 percentage points , when compared to the same period in 2012 . Additionally, our ATM operating gross profit margin inclusive of depreciation, accretion, and amortization decrease d by 1.5 percentage points during the three months ended September 30, 2013 when compared to the same period in 2012. These decreases are attributable to the $ 8.4 million expense recorded during the three months ended September 30, 2013 associated with a nonrecurring charge associated with business rates (property taxes) in our U.K. operation s for prior periods . For further information regarding this matter, see Recent Events and Trends – United Kingdom Property Taxes . Excluding this charge, our ATM operating gross profit margin, exclusive of depreciation, accretion and amortization for the three months ended September 30, 2013 would have increased by 240 basis points over the same period in 2012. This increase w as a result of our revenue growth, a reduction in our operating costs on a per transaction basis, and improved margins on the businesses acquired during the past two years. Our gross margins for the nine months ended September 30, 2013 were also impacted by the same factors impacting the three months ended September 30, 2013 . E xcluding the impact of the $ 8.4 million property tax charge from our U.K. operation, our reported ATM operating gross profit margin, exclusive of depreciation, accretion and amortization for the nine months ended September 30, 2013 would have increased by 200 basis points over the same period in 2012 .

We expect that our gross profit margin for the full year 201 3 to be slightly higher than that for the nine months ended September 30, 2013, which was negatively impacted by the $ 8.4 million U.K. property tax charge discussed above .

ATM product sales and other revenues gross profit margin. For the three and nine month s ended September 30, 2013 , our gross profit margin on ATM product sales and other revenues declined by 8.7 and 6.6 percentage points, respectively, primaril y as a result of a decline in VAR equipment sales compared to the comparable periods in 2012, which are higher margin than our other ATM product sales.

Selling, General, and Administrative Expenses



	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	(In thousands)								(In thousands)
Selling, general, and administrative expenses	$	18,141		$	12,840		41.3	%	$	50,730		$	40,019		26.8	%
Stock-based compensation		2,932			2,452		19.6	%		8,264			7,937		4.1	%
Acquisition-related expenses		3,536			381		828.1	%		7,542			1,858		305.9	%
Total selling, general, and administrative expenses	$	24,609		$	15,673		57.0	%	$	66,536		$	49,814		33.6	%

Percentage of total revenues:
Selling, general, and administrative expenses		7.9	%		6.5	%				8.0	%		6.9	%
Stock-based compensation		1.3	%		1.2	%				1.3	%		1.4	%
Acquisition-related expenses		1.5	%		0.2	%				1.2	%		0.3	%
Total selling, general, and administrative expenses		10.8	%		7.9	%				10.5	%		8.6	%

Selling, general, and administrative expenses (“SG&A expenses”), excluding stock-based compensation. SG&A expenses, excluding stock-based compensation and acquisition-related expenses, in crease d $ 5.3 million and $10.7 million for the three and nine month s ended September 30, 2013 , respectively, when compared to the same period s in 2012 . Th e s e increase s w ere due to: (1) higher payroll -related costs compared to the same period in 2012 due to increased headcount, including employees added from the

acquisitions completed between the periods ; (2) increased i ncentive-based compensation; (3) severance costs associated with our U.K. operations ; and ( 4 ) higher marketing and professional expenses.

Stock-based compensation. The $ 0.5 million and $0.3 million in crease in s tock-based compensation during the three and nine month s ended September 30, 2013 , respectively, was due to grants to new employees and additional expense recognition associated with grants of certain awards to employees who have met the qualified retirement provisions as defined in our Long Term Incentive Plan (“LTIP ”) at some point prior to the awards’ final vesting dates. This qualified retirement feature in our LTIP resulted in the acceleration of expense recognition for certain awards. For additional details on equity awards, see Item 1. Financial Information , Note 3, Stock-Based Compensation .

Acquisition-related expenses. The increase in acquisition-related expenses for the three and nine months ended September 30, 2013 related to the following: ( 1) legal and professional costs incurred to complete the Company’s 2013 acquisitions; ( 2) certain nonrecurring integration and transition-related costs; ( 3) contract termination costs for certain acquired businesses; and 4) other costs.

Depreciation and Accretion Expense



	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	(In thousands)								(In thousands)
Depreciation expense	$	16,188		$	15,106		7.2	%	$	47,084		$	42,341		11.2	%
Accretion expense		702			652		7.7	%		1,972			1,902		3.7	%
Depreciation and accretion expense	$	16,890		$	15,758		7.2	%	$	49,056		$	44,243		10.9	%

Percentage of total revenues:
Depreciation expense		7.1	%		7.6	%				7.4	%		7.3	%
Accretion expense		0.3	%		0.3	%				0.3	%		0.3	%
Depreciation and accretion expense		7.4	%		7.9	%				7.7	%		7.6	%

For the three and nine month s ended September 30, 2013 , depreciation expense increased when compared to the same period s in 2012 primarily as a result of the deployment of additional Company-owned ATMs over the past year as a result of our organic ATM unit growth , new ATMs purchased to replace older non-ADA-compliant ATMs , and the ATMs acquired through various acquisitions . For the three and nine months ended September 30, 2013, accretion expense increased slightly as additional asset retirement obligations were established in connection with newly deployed ATMs and acquired ATMs , which was offset partially by the impact of the reduced asset retirement obligation s in the U.K. When we install our ATMs, we estimate the fair value of future retirement obligations associated with those ATMs, including the anticipated costs to deinstall, and in some cases refurbish, the ATMs at certain merchant locations. Accretion expense represents the increase of this liability from the original discounted net present value to the amount we ultimately expect to incur.

Amortization Expense



	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	(In thousands)								(In thousands)
Amortization expense	$	7,998		$	5,565		43.7	%	$	19,827		$	16,452		20.5	%

Percentage of total revenues		3.5	%		2.8	%				3.1	%		2.8	%

Amortization expense is primarily comprised of the amortization of intangible assets related to merchant contracts and relationships recorded in connection with purchase accounting valuations for completed acquisitions. The increase in amortization expense during the three and nine month s ended September 30, 2013 when compared to the same period s in 2012 was primarily due to the addition of intangible assets from the acquisitions completed during the last twelve months .

Loss ( G ain) on Disposal of Assets



	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	(In thousands)								(In thousands)
Loss (gain) on disposal of assets	$	109		$	(28)		(489.3)	%	$	469		$	784		(40.2)	%

Percentage of total revenues		—	%		—	%				0.1	%		0.1	%

We recognized lower losses on disposal of assets during the nine month s ended September 30, 2013 compared to the same period in 2012 , primarily as a result of a de crease in the number of assets that we removed during the first half of 201 3 when compared to the same period in 2012 when there were a higher number of assets that were removed due to obsolescence , including replacing certain non-ADA-compliant ATMs in the U.S .

Interest Expense, Net



	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	(In thousands)								(In thousands)
Interest expense, net	$	5,445		$	5,269		3.3	%	$	15,570		$	15,966		(2.5)	%
Amortization of deferred financing costs		275			225		22.2	%		735			669		9.9	%
Total interest expense, net	$	5,720		$	5,494		4.1	%	$	16,305		$	16,635		(2.0)	%

Percentage of total revenues		2.5	%		2.8	%				2.6	%		2.9	%

Interest expense, net. I nterest expense, net in creased slightly during the three month s ended September 30, 2013 when compared to the same period in 2012 as a result of higher debt outstanding due to the recently completed Cardpoint acquisition. Interest expense, net for the nine months ended September 30, 2013 de creased slightly when compared to the same period in 2012 as a result of lower net debt outstanding during the period . For additional details, see Item 1. Financial Information , Note 9, Long-Term Debt .

Amortization of deferred financing costs. A mortization of deferred financing costs during the three and nine month s ended September 30, 2013 was comparable to the same period s in 2012 , as the financing costs associated with the recent amendment of the revolving credit facility had an insignificant impact during the these periods. T here were no other significant financing costs incurred over the past year .

Income Tax Expense



	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	(In thousands)								(In thousands)
Income tax expense	$	22,765		$	8,169		178.7	%	$	38,779		$	20,684		87.5	%

Effective tax rate		165.2	%		39.1	%				72.2	%		39.0	%

Our income tax expense during the three and nine months ended September 30, 2013 increased over the same period s in 2012 , primarily due to an increase in consolidated income before income taxes. The significant expense and effective tax rate increase from the three and nine months ended September 30, 2013 when compared to the same periods in 201 2 wa s primarily due to: ( 1) restructuring of our U.K. operations during the three month period ended September 30, 2013, which resulted in the recognition of a $13.6 million income tax charge associated with our U.K. restructuring in the third quarter, which primarily relates to deferred tax assets that are no longer realizable as a result of the restructuring ; ( 2) operating losses in certain of our foreign operations for which we do not record a tax benefit, as a result of carrying a valuation allowance on those deferred tax assets; ( 3) certain current year losses on our U.S. tax return that cannot be recognized as a result of the U.K. restructuring ; and ( 4) certain non-deductible acquisition costs. We continue to maintain valuation allowances for our local net deferred tax asset positions for certain of our entities in the U.K. and Mexico, as we currently believe that it is more likely than not that these tax assets will not be realized .

On August 7, 2013, we, through our wholly owned subsidiaries, acquired all of the outstanding shares issued by Cardpoint, with operations in the U.K. and Germany. At the time of the acquisition, ten legal entities were active under Cardpoint (collectively, the “Cardpoint group”). Various entities in the Cardpoint group have accumulated net operating loss (“NOL”) carryforwards and allowable capital allowances that we expect to utilize in the future to offset expected future profits in the group. As of the acquisition

date, the Cardpoint group had net operating losses in the amount of approximately $64.6 million and allowable capital allowances of approximately $74.0 million. We determined that it is more likely than not that the Cardpoint group will be able to realize the benefits of its tax assets.

Following the Cardpoint acquisition, we restructured a portion of our other existing U.K. operations (Bank Machine entities). Through a series of restructuring s , as of September 30, 2013, the existing Bank Machine group is now owned by Cardpoint. Concurrent with the restructuring, we implemented a financing structure to fund future growth in its European operations.

Non-GAAP Financial Measures

Included below are certain non-GAAP financial measures that we use to evaluate the performance of our business. We believe that the presentation of these measures and the identification of unusual or certain non-recurring adjustments and non-cash items enhance an investor’s understanding of the underlying trends in our business and provide for better comparability between periods in different years. EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Gross Profit Margin, and Free Cash Flow are non-GAAP financial measures provided as a complement to results prepared in accordance with U.S. GAAP and may not be comparable to similarly-titled measures reported by other companies.

Adjusted EBITDA excludes depreciation, accretion, and amortization expense as these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDA also excludes acquisition-related expenses, certain other non-operating and nonrecurring costs, loss on disposal of assets, our obligations for the payment of income taxes, interest expense or other obligations such as capital expenditures, and an adjustment for noncontrolling interest. Adjusted Net Income represents net income computed in accordance with GAAP, before amortization expense, loss on disposal of assets, stock-based compensation expense, certain other expense (income) amounts, nonrecurring expenses, and acquisition-related expenses, and using an assumed tax rate of 35% through June 30, 2013 and 33.5% thereafter, with certain adjustments for noncontrolling interests. Adjusted Gross Profit Margin is calculated excluding certain nonrecurring costs from the cost of ATM operating revenues. Adjusted EBITDA %, Adjusted Pre-tax %, and Adjusted Net Income % are calculated by taking the respective non-GAAP financial measures over GAAP total revenues. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by average weighted diluted shares outstanding. Free Cash Flow is defined as cash provided by operating activities less payments for capital expenditures, including those financed through direct debt but excluding acquisitions. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on portions of our long-term debt .

The non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow statement data prepared in accordance with U.S. GAAP.

A reconciliation of EBITDA, Adjusted EBITDA , Adjusted Gross Profit Margin, and Adjusted Net Income to N et Income Attributable to Controlling Interests, their most comparable U.S. GAAP financial measure, and a reconciliation of Free Cash Flow to cash provided by operating activities, the most comparable U.S. GAAP financial measure, are presented as follows:

Reconciliation of Net Income Attributable to Controlling Interests to EBITDA, Adjusted EBITDA, and Adjusted Net Income



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In thousands, except share and per share amounts)
Net (loss) income attributable to controlling interests	$	(8,408)	$	12,897	$	16,349	$	32,390
Adjustments:
Interest expense, net		5,445		5,269		15,570		15,966
Amortization of deferred financing costs		275		225		735		669
Income tax expense		22,765		8,169		38,779		20,684
Depreciation and accretion expense		16,890		15,758		49,056		44,243
Amortization expense		7,998		5,565		19,827		16,452
EBITDA	$	44,965	$	47,883	$	140,316	$	130,404

Add back:
Loss (gain) on disposal of assets		109		(28)		469		784
Other income ⁽¹⁾		(559)		(1,040)		(3,030)		(1,098)
Noncontrolling interests ⁽²⁾		(474)		(355)		(1,429)		(1,217)
Stock-based compensation expense ⁽³⁾		3,163		2,675		8,888		8,664
Acquisition-related expense s ⁽⁴⁾		3,536		381		7,542		1,858
Othe r adjustments to cost of ATM op erating revenue s ⁽⁵⁾		8,359		—		8,359		—
Other adjustments to selling, general, and administrative expenses ⁽⁶⁾		—		—		446		—
Adjusted EBITDA	$	59,099	$	49,516	$	161,561	$	139,395
Less:
Interest expense, net ⁽³⁾		5,421		5,231		15,490		15,829
Depreciation and accretion expense ⁽³⁾		16,478		15,372		47,806		43,126
Adjusted pre-tax income		37,200		28,913		98,265		80,440
Income tax expense ⁽⁷⁾		12,462		10,120		33,835		28,154
Adjusted Net Income	$	24,738	$	18,793	$	64,430	$	52,286

Adjusted Net Income per share	$	0.56	$	0.43	$	1.45	$	1.21
Adjusted Net Income per diluted share	$	0.55	$	0.43	$	1.44	$	1.19

Weighted average shares outstanding - basic		44,477,023		43,669,756		44,373,627		43,333,407
Weighted average shares outstanding - diluted		44,679,235		44,045,021		44,593,624		43,783,534

(1) Other income during the three and nine months ended September 30, 2012 exclude unrealized and realized (gains) losses related to derivative s not designated as hedging instruments.

(2 ) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company’s 51% ownership interest in the Adjusted EBITDA of its Mexico subsidiary.

(3 ) Amounts exclude 49% of the expenses incurred by the Company’s Mexico subsidiary as such amounts are allocable to the noncontrolling interest stockholders.

(4 ) Acquisition-related expenses include non recurring costs incurred for professional and legal fees and certain transition and integration-related costs, related to acquisitions.

(5 ) Adjustment to cost of ATM operating revenu es for the three and nine months ended September 30, 2013 is related to the nonrecurring charg e related to retroactive property taxes on certain ATM locations in the U.K .

(6 ) Adjustment to selling, general, and administrative expense represen ts non recurring severance related costs associated with management of the Company’s U.K. operation.

(7 ) Calculated using the Company’s estimated long-term, cross-jurisdictional effective cash tax rate of 35% through June 30, 2013 and 33.5% thereafter.

Reconciliation of Adjusted Gross Profit Margin




	Three Months Ended September 30, 2013						Three Months Ended September 30, 2012
	As reported (GAAP)		Adjustments		Adjusted (Non-GAAP)		As reported (GAAP)		Adjustments		Adjusted (Non-GAAP)
	(In thousands )

Total revenues	$	228,819	$	—	$	228,819	$	199,029	$	—	$	199,029
Total cost of revenues ⁽¹⁾		160,269		(8,359)		151,910		136,729		—		136,729
Gross profit	$	68,550	$	8,359	$	76,909	$	62,300	$	—	$	62,300
Gross profit margin		30.0%				33.6%		31.3%				31.3%



	Nine Months Ended September 30, 2013						Nine Months Ended September 30, 2012
	As reported (GAAP)		Adjustments		Adjusted (Non-GAAP)		As reported (GAAP)		Adjustments		Adjusted (Non-GAAP)
	(In thousands )

Total revenues	$	634,541	$	—	$	634,541	$	582,089	$	—	$	582,089
Total cost of revenues ⁽¹⁾		431,668		(8,359)		423,309		402,237		—		402,237
Gross profit	$	202,873	$	8,359	$	211,232	$	179,852	$	—	$	179,852
Gross profit margin		32.0%				33.3%		30.9%				30.9%

__________ _____

(1) Adjustment to cost of ATM operating revenu es for the three and nine months ended September 30, 2013 is related to the nonrecurring charg e related to retroactive property taxes on certain ATM locations in the U.K .

Calculation of Free Cash Flow



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In thousands)
Cash provided by operating activities	$	42,121	$	38,404	$	122,475	$	94,325
Payments for capital expenditures:
Cash used in investing activities, excluding acquisitions		(15,747)		(25,376)		(45,602)		(80,592)
Free cash flow	$	26,374	$	13,028	$	76,873	$	13,733

Liquidity and Capital Resources

Overview

As of September 30, 2013 , we had $ 18.6 million in cash and cash equivalents on hand and $ 457.8 million in outstanding long-term debt.

We have historically funded our operations primarily through cash flows from operations, borrowings under our revolving credit facilities, and the issuance of debt and equity securities. Furthermore, we have historically used cash to invest in additional ATMs, either through the acquisition of ATM networks or through organically-generated growth. We have also used cash to fund increases in working capital and to pay interest and principal amounts outstanding under our borrowings. Because we collect a sizable portion of our cash from sales on a daily basis but generally pay our vendors on 30-day terms and are not required to pay certain of our merchants until 20 days after the end of each calendar month, we are able to utilize the excess available cash flow to reduce borrowings made under our revolving credit facility and to fund our ongoing capital expenditure program. Accordingly, we typically reflect a working capital deficit position and carry a relatively small cash balance.

We believe that our cash on hand and our current bank credit facilities will be sufficient to meet our working capital requirements and contractual commitments for the next 12 months. We expect to fund our working capital needs from cash flows generated from our operations and borrowings under our revolving credit facility, to the extent needed. As we expect to continue to generate positive free cash flow in 2013 and beyond, we expect to continue repaying the amounts outstanding under our revolving credit facility absent any acquisitions . See additional discussion under Financing Facilities below.

Operating Activities

Net cash provided by operating activities totaled $ 122.5 million for the nine months ended September 30, 2013 compared to net cash provided by operating activities of $ 94.3 million during the same period in 2012 . The year-over-year increase was primarily attributable to the generation of higher operating profits and smaller net increases in certain working capital balances relative to the prior year period. Additionally, in January 2013, we collected $13. 4 million from an outstanding insurance receivable.

Investing Activities

Net cash used in investing activities totaled $ 232.6 million for the nine m onths ended September 30, 2013 , compared to $ 98.5 million during the same period in 2012 . The year-over-year in crease was primarily the result of the cash paid , net of cash acquired, for the acquisition s completed during the nine months , partially offset by lower capital expenditures .

Anticipated Future Capital Expenditures. We currently anticipate that the majority of our capital expenditures for the foreseeable future will be driven by organic growth projects, including the purchase of ATMs for existing as well as new ATM management agreements. We expect that our capital expenditures for the remainder of 2013 will total approximately $ 30 million, the majority of which will be utilized to purchase additional ATMs for our Company-owned accounts and to enhance our existing devices with additional functionalities. We expect such expenditures to be funded with cash generated from our operations. In addition, we will continue to evaluate selected acquisition opportunities that complement our existing ATM network. We believe that significant expansion opportunities continue to exist in all of our current markets, as well as in other international markets, and we will continue to pursue those opportunities as they arise. Such acquisition opportunities, either individually or in the aggregate, could be material and may be funded by additional borrowings under our revolving credit facility or other financing sources that may be availabl e to us .

Financing Activities

Net cash provided by financi ng activities totaled $ 113.6 million and $ 10.0 million for the nine months ended September 30, 2013 2012 , respectively . During the nine months ended September 30, 2013 , we borrowed additional funds under our credit facility to partially fund our 2013 acquisitions .

Financing Facilities

As of September 30, 2013 , we had approximately $ 457.8 million in outstanding long-term debt, which was primarily comprised of: (1) $ 200.0 million of 2018 Notes, (2) $ 256.1 million in borrowings under our revolving credit facility, and (3) $ 1.7 million in notes payable outstanding under equipment financing lines of Cardtronics Mexico .

Revolving Credit Facility. As of September 30, 2013 , we had a $ 375 .0 million revolving credit facility that wa s led by a syndicate of banks including JPMorgan Chase , N.A. and Bank of America , N.A. This facility provide s u s with $ 375 .0 million in available borrowings and letters of credit (subject to the covenants contained within the facility) and has an expiration date of July 2016 .

Borrowings under our revolving credit facility bear interest at a variable rate based upon our total leverage ratio and the London Interbank Offered Rate (“LIBOR”) or Alternative Base Rate (as defined in the agreement) at our option. Additionally, we are required to pay a commitment fee on the unused portion of the revolving credit facility. Substantially all of our assets, including the stock of all of our wholly-owned domestic subsidiaries and 66% of the stock of our foreign subsidiaries, are pledged to secure borrowings made under the revolving credit facility. Furthermore, each of our domestic subsidiaries has guaranteed our obligations under such facility. There are currently no restrictions on the ability of our wholly-owned subsidiaries to declare and pay dividends directly to us. The primary restrictive covenants within the facility include (1) limitations on the amount of senior debt and total debt that we can have outstanding at any given point in time and (2) the maintenance of a set ratio of earnings to fixed charges, as computed quarterly on a trailing 12-month basis , adjusted for the pro forma effect of acquisitions . Additionally, we are limited on the amount of restricted payments, including dividends, which we can make pursuant to the terms of the facility. T hese limitations are generally governed by a senior leverage ratio test and a fixed charge ratio covenant .

As of September 30, 2013 , the weighted average interest rate on our outstanding revolving credit facility borrowings was approximately 2.1 %. Additionally, as of September 30, 2013 , we were in compliance with all the co venants contained within the facility and would continue to be in compliance even in the event of substantially higher borrowings or substantially lower earnings. As of September 30, 2013 , we had $ 116.8 million in available borrowing capacity under the $ 375 .0 million revolving credit facility .

Senior Subordinated Notes . In August 2010, we issued $200.0 million in 2018 Notes . The 2018 Note s are subordinate to borrowings made under the revolving credit facility and carry a n 8 .25% coupon. Interest is paid semi - annually in arrears on March 1st and September 1st of each year. The 2018 Notes, which are guaranteed by all of our 100% owned domestic subsidiaries, contain no maintenance covenants and only limited incurrence covenants, under which we ha ve considerable flexibility . Pursuant to the terms of the indenture, we are limited on the amount of restricted payments including dividends that we can make. These limitations are generally governed by a fixed charge ratio incurrence test and an overall restricted payments basket.

As of September 30, 2013 , we were in compliance with all applicable covenants required under the 2018 Notes.

Other Borrowing Facilities

Cardtronics Mexico equipment financing agreements. Between 2007 and 2010, Cardtronics Mexico entered into several separate five-year equipment financing agreements with a single lender, of which four agreements have remaining balances as of September 30, 2013 . These agreements, which are denominated in pesos and bear interest at an average fixed rate of 9.99 %, were utilized for the purchase of ATMs to support the growth in our Mexico operations. As of September 30, 2013 , approximately $ 2 2.3 million pesos ($ 1.7 million U.S.) were outstanding under the agreements, with any future borrowings to be individually negotiated between the lender and Cardtronics Mexico. Pursuant to the terms of the loan agreements, we ha ve issued guarantees for 51.0% of the obligations under th ese agreement s (consistent with our ownership percentage in Cardtronics Mexico). As of September 30, 2013 , the total amount of the se guarantees was $ 1 1.4 million pesos ($ 0.9 million U.S.).

Bank Machine overdraft facility. Bank Machine has a £1.0 million overdraft facility. This overdraft facility, which bears interest at 1.0% over the Bank of England’s base rate (0.5% as of September 30, 2013 ) and is secured by a letter of credit posted under our revolving credit facility, is utilized for general corporate purposes for our U.K. operations. A s of September 30, 2013 , there were no amounts outstanding under this overdraft facility. The letter of credit we have posted that is associated with this overdraft facility reduces the available borrowing capacity under our corp orate revolving credit facility discussed above .

New Accounting Standards

For a description of the accounting standard that we adopted during the nine months ended September 30, 2013 , see Part I. Financial Information, Item 1. Notes to Consolidated Financial Statements, Note 1 7, New Accounting Pronouncements .

Item 3. Quantitative and Q ualitative D isclosures A bout M arket R isk

The following market risk disclosures should be read in conjunction with the quantitative and qualitative disclosures about market risk contained in the 201 2 Form 10-K .

We are exposed to a variety of market risks, including interest rate risk and foreign currency exchange rate risk. The following quantitative and qualitative information is provided about financial instruments to which we were a party at September 30, 2013 , and from which we may incur future gains or losses from changes in market interest rates or foreign currency exchange prices. We do not enter into derivative or other financial instruments for speculative or trading purposes.

Hypothetical changes in interest rates and foreign currencies chosen for the following estimated sensitivity analysis are considered to be reasonably possible near-term changes generally based on consideration of past fluctuations for each risk category. However, since it is not possible to accurately predict future changes in interest rates and foreign currencies, these hypothetical changes may not necessarily be an indicator of probable future fluctuations.

Interest Rate Risk

Vault cash rental expense. Because our ATM vault cash rental expense is based on market rates of interest, it is sensitive to changes in the general level of interest rates in the U.S., the U.K., Germany, Mexico, and Canada. In the U.S. and the U.K., we pay a monthly fee to our vault cash providers on the average amount of vault cash outstanding under a formula based on the U.S. and U.K. LIBOR rates, respectively. In Mexico, we pay a monthly fee to our vault cash provider under a formula based on the Interbank Equilibrium Interest Rate (commonly referred to as the “TIIE”). In Canada, we pay interest to our vault cash providers based on the average amount of vault cash outstanding under a formula based on the Bank of Canada’s bankers’ acceptance rate.

As a result of the significant sensitivity surrounding the vault cash rental expense for our U.S. and U.K. operations, we have entered into a number of interest rate swaps to effectively fix the rate we pay on the amounts of our current and anticipated outstanding vault cash balances. The following swaps currently in place serve to fix the rate utilized for our vault cash rental agreements in the U.S. and the U.K. for the following notional amounts and periods:



Notional Amounts		Notional Amounts		Notional Amounts		Weighted Average
U.S.		U.K.		Consolidated ⁽¹⁾		Fixed Rate		Term
(I n thousands)
$	1,000,000	£	25,000	$	1,040,340	2.69	%	October 1, 2013 – December 31, 2013
$	1,250,000	£	—	$	1,250,000	2.98	%	January 1, 2014 – December 31, 2014
$	1,300,000	£	—	$	1,300,000	2.84	%	January 1, 2015 – December 31, 2015
$	1,300,000	£	—	$	1,300,000	2.74	%	January 1, 2016 – December 31, 2016
$	1,000,000	£	—	$	1,000,000	2.53	%	January 1, 2017 – December 31, 2017
$	750,000	£	—	$	750,000	2.54	%	January 1, 2018 – December 31, 2018
___________
⁽¹⁾ U.K. pound sterling amounts have been converted into U.S. dollars at approximately $1. 61 to £1.00, which was the exchange rate in effect as of September 30, 2013.

The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense based on our average outstanding vault cash balances for the quarter ended September 30, 2013 (as we are invoiced monthly by the vault cash provider based on average balance outstanding) and assuming a 100 basis point increase in interest rates:



	Average Vault Cash Balance for the Quarter Ended September 30, 2013				Additional Interest Incurred on 100 Basis Point Increase (Excluding Impact of Interest Rate Swaps)				Additional Interest Incurred on 100 Basis Point Increase (Including Impact of All Interest Rate Swaps Currently under Contract)
	(Functional				(Functional				(Functional
	currency)		(U.S. dollars)		currency)		(U.S. dollars)		currency)		(U.S. dollars)
	(In millions)				(In millions)				(In millions)
United States	$	1,817.5	$	1,817.5	$	18.2	$	18.2	$	8.2	$	8.2
United Kingdom	£	329.7		513.3	£	3.3		5.1	£	3.0		4.7
Germany	€	22.7		30.3	€	0.2		0.3	€	0.2		0.3
Mexico	p$	112.5		8.7	p$	1.1		0.1	p$	1.1		0.1
Canada	c$	69.6		66.9	c$	0.7		0.7	c$	0.7		0.7
Total			$	2,436.7			$	24.4			$	14.0

Starting this year and continuing for several years thereafter, our expected exposure to changes in interest rates on our outstanding vault cash balances is expected to be somewhat lower than is presented in the table above. This expected reduction in exposure to floating interest rates is primarily the result of forward-starting swaps entered in prior years , which increase our overall hedged position by $250.0 million in 2014 and an additional $50.0 million in 2015 on our vault cash balances outstanding in the U.S. These incremental swaps are partially offset by a reduction in outstanding interest rate swap agreements related to the vault cash in our U.K. operations during the same time period. Our sensitivity to changes in interest rates in the U.K. is somewhat mitigated by the interchange rate setting methodology that impacts the majority of our U.K. interchange revenue. Effectively, the interest rates and cash costs from two years back are considered for determining the interchange rate (i.e., interest rates and other costs from 2011 are considered for determining the 2013 interchange rate). As a result of this structure, should interest rates rise in the U.K., causing our operating expenses to rise, we would expect to see a rise in interchange rates (and our revenues), albeit with a lag. We expect some growth in outstanding vault cash balances as a result of expected future business growth, and we may continue to seek ways to mitigate our exposure to floating interest rates by engaging in additional interest rate swaps in the future.

As of September 30, 2013 , we had a net liability of $ 75.4 million recorded on our Consolidated Balance Sheet related to our interest rate swaps, which represented the fair value liability of the agreements, as derivative instruments are required to be carried at fair value. Fair value was calculated as the present value of amounts estimated to be received or paid to a marketplace participant in a selling transaction. These swaps are valued using pricing models based on significant other observable inputs (Level 2 inputs under the fair value hierarchy established by U.S. GAAP), while taking into account the nonperformance risk of the party that is in the liability position with respect to each trade. T hese swaps are accounted for as cash flow hedges; accordingly, changes in the fair values of the swaps have been reported in accumulated other comprehensive loss , net line item in the accompanying Consolidated Balance Sheets. Due to our determination that net deferred tax assets are realizable in the future, we record the unrealized loss amounts related to our interest rate swaps net of estimated taxes in the Accumulated other comprehensive loss, net line item within Stockholders’ equity in the accompanying Consolidated Balance Sheets.

As of September 30, 2013 , we had not entered into any derivative financial instruments to hedge our variabl e interest rate exposure in Mexico , Germany or Canada , as we do not deem it to be cost effective to engage in such a hedging program. However, we may enter into derivative financial instruments in the future to hedge our interest rate expo sure in th o s e market s .

Interest expense. Our interest expense is also sensitive to changes in interest rates in the U.S., as borrowings under our revolving credit facility accrue interest at floating rates. Based on the $ 256.1 million outstanding under our revolving credit facility as of September 30, 2013 , an increase of 100 basis points in the underlying interest rate would have had a $ 1.9 million impact on our

interest expense in the nine month s then ended. However, there is no guarantee that we will not borrow additional amounts under our revolving credit facility in the future , and, in the event we borrow amounts and interest rates significantly increase, the interest that we would be required to pay would be more significant . We have not entered into interest rate hedging arrangements in the past to hedge our interest rate risk for our borrowings, and have no plans to do so. Due to fluctuating balances in the amount outstanding under our revolving credit facility, we do not believe such arrangements to be cost effective.

Outlook. If we continue to experience low short-term interest rates in the U.S. and the U.K., it will be beneficial to the amount of interest expense we incur under our bank credit facilities and our vault cash rental expense. Although we currently hedge a substantial portion of our vault cash interest rate risk, as noted above, we may not be able to enter into similar arrangements for similar amounts in the future, and any significant increase in interest rates in the future could have an adverse impact on our business, financial condition and results of operations by increasing our operating costs and expenses. However, we expect that the impact on our financial statements from a significant increase in interest rates would be partially mitigated by the interest rate swaps that we currently have in place associated with our vault cash balances in the U.S. and the U.K.

Foreign Currency Exchange Rate Risk

As a result of our operatio ns in the U.K., Germany, Mexico, and Canada, we are exposed to market risk from changes in foreign currency exchange rates, specifically with respect to changes in the U.S. dollar relative to the British pound, Euro, Mexican peso, and the Canadian dollar. All of our international subsidiaries are consolidated into our financial results and are subject to risks typical of international businesses including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Furthermore, we are required to translate the financial condition and results of our international operations into U.S. dollars, with any corresponding translation gains or losses being recorded in other comprehensive income in our consolidated financial statements. As of September 30, 2013 , this accumulated translation loss totaled approximately $20.3 million compared to approximately $24.6 million as of December 31, 2012 .

Our consolidated financial results were not materially impacted by the change in value of the British pound , Euro, Mexican peso, or Canadian dollar relative to the U.S. dollar during the three and nine month s ended September 30, 2013 compared to the prior year period . A sensitivity analysis indicates that, if the U.S. dollar uniformly strengthened or weakened 10% against the British pound, the effect upon our U.K. operations’ operating income for the nine months ended September 30, 2013 would have been approximately $0. 3 million . Similarly, a sens itivity analysis indicates that if the U.S. dollar uniformly strengthened or weakened 10% against the Mexican peso for the nine months ended September 30, 2013 , the effect upon the respective subsidiary’s operating income would have b een approximately $0. 3 million . Finally, a sens itivity analysis indicates that if the U.S. dollar uniformly strengthened or weakened 10% against the Canadian dollar or the Euro for the nine months ended September 30, 2013 , the effect upon the respective subsidiary’s operating income would have b een immaterial. A t this time, we have not deemed it to be cost effective to engage in a program of hedging the effect of foreign currency fluctuations on our operating results using derivative financial instruments.

Certain intercompany balances between our U.S. parent company and our U.K. operations are designated as short-term in nature, and the changes in these balances are translated in our Consolidated Statements of Operations. As a result, we are exposed to foreign currency exchange risk as it relates to these intercompany balances. As of September 30, 2013 , the intercompany payable balance from our U.K. operations to our U.S. p arent company denominated in U.S. dollars totaled $ 94.1 million, of which $ 87.8 million was deemed to be short-term in nature. A sensitivity analysis indicates that, if the U.S. dollar uniformly strengthened or weakened 10% against the British pound, based on the intercompany payable balance as of September 30, 2013 , the effect upon our Consolidated Statements of Operations would be approximately $ 8.8 million. However, we manage the majority of this risk by borrowing in British pounds through the third-party credit facility in our U.S. operations. This structure effectively manages the foreign currency exposure of these short-term designated intercompany balances as currency gains or losses in the intercompany borrowings are largely offset by currency gains or losses on our third party borrowings.

We do not hold derivative commodity instruments, and all of our cash and cash equivalents are held in money market and checking funds.

Item 4. Controls and P rocedures

Management’s Quarterly Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) , we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q . Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2013 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our system of internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three month s ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal P roceedings

For a description of our material pending legal and regulatory proceedings and settlements, see Part I. Financial Information , Item 1. Notes to Consolidated Financial Statements, Note 1 4, Commitments and Contingencies.

Item 1A. Risk F actors

The known material risks we face are described in our 2012 Form 10-K under Part I, Item 1A, Risk Factors . There have been no material changes in our risk factors since that report , except as follows:

We maintain a significant amount of cash within our Company-owned devices, which is subject to potential loss due to theft or other events, including natural disasters.

As of September 30, 2013, there was approximately $2.5 billion in vault cash held in our domestic and international Company-owned ATMs. Any loss of cash from our ATMs is generally our responsibility. We typically require that our service providers, who either transport the cash or otherwise have access to the ATM safe, maintain adequate insurance coverage in the event cash losses occur as a result of theft, misconduct, or negligence on the part of such providers. Cash losses at the ATM occur in a variety of ways, such as natural disaster (hurricanes, tornadoes, etc.), fires, vandalism, and physical removal of the entire ATM, defeating the interior safe or by compromising the ATM’s technology components. Because our ATMs are often installed at retail sites, they face greater exposure to attempts of theft and vandalism. Thefts of cash may be the result of an individual acting alone or as a part of a crime group. In recent periods, we have seen an increase in theft of cash from our ATMs across all of the geographic regions in which we operate. While we maintain our own insurance policies to cover a significant portion of any losses that may occur that are not covered by the insurance policies maintained by our service providers, such insurance coverage is subject to deductibles, exclusions and limitations that may leave us bearing some or all of those losses.

Any increase in the frequency and/or amounts of theft and other losses could negatively impact our operating results by causing higher deductible payments and increased insurance premiums. Additionally, any damage sustained to our merchant customers’ store locations in connection with any ATM-related thefts, if extensive and frequent enough in nature, could negatively impact our relationships with those merchants and impair our ability to deploy additional ATMs in those existing or new locations of those merchants. Certain merchants have requested, and could request in the future, that we remove ATMs from store locations that have suffered damage as a result of ATM-related thefts, thus negatively impacting our financial results. Finally, we have in the past, and may in the future, voluntarily remove cash from certain ATMs on a temporary or permanent basis to mitigate further losses arising from theft or vandalism. Depending on the magnitude and duration of any cash removal, our revenues and profits could be materially and adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers. The following table provides information about purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the three month s ended September 30, 2013 :



Period	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid Per Share ⁽²⁾		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program		Approximate Dollar Value that may Yet be Purchased Under the Plan or Program ⁽³⁾
July 1 – 3 1 , 2013		1,307	$	29.23		—	$	—
August 1 – 31 , 2013		1,282	$	33.75		—	$	—
September 1 – 3 0 , 2013		409	$	36.86		—	$	—

_________



⁽¹⁾	Represents shares surrendered to us by participants in our 2007 Stock Incentive Plan to settle the participants’ personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under the 2007 Stock Incentive Plan.

⁽²⁾	The price paid per share was based on the average high and low trading prices of our common stock on the dates on which we repurchased shares from the participants under our 2007 Stock Incentive Plan.

⁽³⁾	In connection with the lapsing of the forfeiture restrictions on restricted shares granted by us under our 2007 Stock Incentive Plan, which was adopted in December 2007 and expires in December 2017, we permitted employees and directors to sell a portion of their shares to us in order to satisfy their tax liabilities that arose as a consequence of the lapsing of the forfeiture restrictions. In future periods, we may not permit individuals to sell their shares to us in order to satisfy such tax liabilities. Since the number of restricted shares that will become unrestricted each year is dependent upon the continued employment of the award recipients, we cannot forecast either the total amount of such securities or the approximate dollar value of those securities that we might purchase in future years as the forfeiture restrictions on such shares lapse.

Item 6. Exhibits

The exhibits required to be filed or furnished pursuant to the requirements of Item 601 of Regulation S-K are set forth in the Index to Exhibits accompanying this Form 10-Q .

SIGNATURES

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.


	CARDTRONICS, INC.

November 4 , 2013	/s/ J. Chris Brewster
	J. Chris Brewster
	Chief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)

November 4 , 2013	/s/ E. Brad Conrad
	E. Brad Conrad
	Chief Accounting Officer
	(Duly Authorized Officer and Principal Accounting Officer)

INDEX TO EXHIBITS

Each exhibit identified below is part of this Form 10-Q.



Exhibit Number		Description
3.1		Third Amended and Restated Certificate of Incorporation of Cardtronics, Inc. (incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Cardtronics, Inc. on December 14, 2007, Registration No. 001-33864).
3.2		Third Amended and Restated Bylaws of Cardtronics, Inc. (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K/A filed by Cardtronics, Inc. on January 26, 2011, Registration No. 001-33864).
2.1*		Share Sale and Purchase Agreement relating to Cardpoint Limited, dated August 7, 2013.
10.1*		Third Amendment to Credit Agreement , dated August 5, 2013, by and between Cardtronics, Inc., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A.
10.2* †		Employment Agreement by and between Cardtronics USA Inc. and David Dove, dated effective as of September 3, 2013.
31.1*		Certification of the Chief Executive Officer of Cardtronics, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Chief Financial Officer of Cardtronics, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Chief Executive Officer and Chief Financial Officer of Cardtronics, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith.

† Management contract or compensatory plan or arrangement.

** Furnished herewith.

Exhibit 10.1

EXECUTION VERSION

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”), dated as of August 5 , 2013, is entered into by and among CARDTRONICS, INC. , a Delaware corporation (the “ Borrower ”), each of the Guarantors party hereto (the “ Guarantors ”), each of the Lenders party hereto (the “ Lenders ”) and JPMorgan Chase Bank, N.A. , as Administrative Agent for the Lenders (the “ Agent ”).

Preliminary Statement

WHEREAS , the Borrower, the Guarantors, the Lenders and the Agent entered into that certain Credit Agreement dated as of July 15, 2010 (as hereby amended and as from time to time further amended, modified, supplemented, restated or amended and restated , the “ Credit Agreement ”), pursuant to which the Lenders agreed to make available to the Borrower a revolving credit facility; and

WHEREAS , the Borrower has now asked the Agent and the Lenders to amend certain provisions of the Credit Agreement, including, without limitation, an amendment to increase the aggregate amount of the Lenders’ Commitments to $375,000,000, a portion of which will be used by the Borrower to provide liquidity for the acquisition of the ATM businesses of Cardpoint Limited (the “ Target ”); and

WHEREAS , in connection with the acquisition of the Target, the Borrower contemplates that it will implement the transactions described on Exhibit A attached hereto (together with any additional transactions related to the acquisition, not adverse to the Lenders and consented to in writing by the Administrative Agent and the Required Lenders, such consent not to be unreasonably withheld (provided that any Len der who fails to object within five ( 5 ) Business Days after the date the Borrower first requests such consent in writing will be deemed to consent to such additional transactions) the “ Transactions ”) and has asked for the amendment of certain provisions of the Credit Agreement to accommodate the Transactions; and

WHEREAS , the Agent and Lenders are willing to do so subject to the terms and conditions set forth herein, provided that the Borrower and Guarantors ratify and confirm all of their respective obligations under the Credit Agreement and the Loan Documents;

NOW, THEREFORE , in consideration of the premises and further valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Defined Terms . Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to them in the Credit Agreement.

2. Amendments to Section 1.01 . (a) Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions, in alphabetical order:

“ Acquisition ” means the acquisition of all of the equity interests in Cardpoint Limited by a Restricted Subsidiary that is not an Obligor and that is wholly-owned by the Borrower pursuant to the

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Acquisition Agreement, without amendment of material terms thereof not otherwise approved by the Administrative Agent.”

“‘ Acquisition Agreement ’ means the draft purchase and sale agreement dated July 24 , 2013 relating to the acquisition of Cardpoint Limited.”

( b ) Section 1.01 of the Credit Agreement is hereby amended by deleting the following definitions in their entirety and replacing them with the following:

“ Alternative Currency ” with respect to any Loan means (a) Pounds Sterling, (b) Euros and (c) a currency that (i) is readily available in the amount required and freely convertible into Dollars on the Quotation Day for such Loan and the date such Loan is to be advanced and (ii) has been approved by the Administrative Agent and is available for funding from the Lenders in accordance with Section 2.01(b).

“ Foreign Subsidiary ” means (a) any Subsidiary that is incorporated or organized other than under the laws of the United States of America, any State thereof or the District of Columbia and (b) any Subsidiary that is wholly owned by any such Subsidiary described in clause (a).

“ Senior Leverage Ratio ” means, as of the end of any fiscal quarter, the ratio of (a) the sum of (i) Consolidated Funded Indebtedness as of such date minus (ii) Subordinated Indebtedness as of such date minus (iii) senior unsecured Indebtedness or unsecured convertible Indebtedness, as applicable, permitted under Section 6.01(n) to (b) Consolidated Adjusted Pro Forma EBITDA for the four quarter period then ended.

3. Amendment to Section 2.01(b) . The first sentence of Section 2.01(b) of the Credit Agreement is hereby deleted and the following is substituted therefor:

“(b) Notwithstanding paragraph (a) above, Revolving Loans (but excluding Revolving Loans that are Swingline Loans) may, at the option of the Borrower, be requested in, converted into or issued, as applicable, in one or more of the Alternative Currencies in an amount up to the Equivalent Amount of $85,000,000 calculated as of the date the Loans are requested.”

4. Amendment to Section 2.19 . Section 2.19 of the Credit Agreement is deleted in its entirety and the following is substituted therefor:

“Section 2.19 Reserved .”

5. Amendment to Section 6.01 . Section 6.01 of the Credit Agreement is hereby amended by adding the following subclauses (n) and (o) to the end of said section:

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“(n) other unsecured convertible Indebtedness or senior unsecured Indebtedness incurred in connection with the Acquisition in an aggregate amount not to exceed $300,000,000 , so long as such Indebtedness (i) does not have a maturity date shorter than six (6) months following the Termination Date and (ii) has covenants, taken as a whole, that are no more restrictive than the terms of the Loan Documents in any material respects; and

(o) to the extent incurred in connection with the Acquisition, Indebtedness of Restricted Subsidiaries that are not Obligors to other Restri cted Subsidiaries in an amount not to exc eed £120,000,000 on a net basis ; provided , that the Restricted Subsidiaries described in this subclause (o) shall be Wholly-Owned Subsidiaries.”

6. Amendment to Section 6.04. Section 6.04 of the Credit Agreement is hereby amended by adding the following sentence to the end of said section: “Notwithstanding any of the foregoing, (i) the transfer of 100% of the equity interests in Cardtronics Limited, a UK Limited Company to a Restricted Subsidiary that is not an Obligor and that is wholly-owned by the Borrower in connection with the Acquisition and (ii) the transfer by an Obligor to a Restricted Subsidiary of any intercompany Indebtedness permitted by Section 6.01 (o) owned by such Obligor in connection with the Acquisition in each case, will be expressly permitted hereunder.”

7. Amendment to Section 6.05 . Section 6.05 of the Credit Agreement is hereby amended by adding the following subclauses (i), (j) and (k) to the end of said section:

“(i) to the extent made in connection with the Acquisition, Investments by Restricted Subsidiaries in Restricted Subsidiaries that are not Obligors in an amount not to exc eed £120,000,000 on a net basis ;

(j) to the extent made in connection with the Acquisition and not otherwise permitted under this Section 6.05 , Investments by the Borrower in any Restricted Subsidiary in an aggr egate amount not to exc eed £120,000,000 on a net basis together with the Investments described in Section 6.05(i) ; and

(k) to the extent made in connection with the Acquisition and not otherwise permitted under this Section 6.05 , Investments by any Restricted Subsidiary that is not an Obligor in any Obligor.”

8. Amendment to Section 6.11 . Section 6.11 of the Credit Agreement is hereby amended by adding the following sentence to the end of said section:

“Notwithstanding the foregoing, the Acquisition shall be deemed to be a Business Acquisition notwithstanding the limitations contained in the definition thereof or the requirements of this

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Section 6.11 and will be permitted hereunder so long as no Event of Default shall exist before or immediately after giving effect thereto.”

9. Amendment to Schedule 2.01 . Schedule 2.01 of the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2.01 attached hereto.

10. Consent . This Amendment amends certain sections of the Credit Agreement to accommodate the Acquisition. Notwithstanding anything contained in any Section of the Credit Agreement to the contrary, the Borrower may consummate the Transactions, and the Lenders hereby consent to the consummation of the Transactions.

11. Conditions Precedent . The effectiveness of this Amendment is subject to satisfaction of the following conditions precedent:

(a) no Default or Event of Default shall exist;

(b) the Agent shall have received counterparts of this Amendment, duly executed by the Borrower, the Guarantors and the Lenders;

(c) each of the Lenders whose Commitment did not increase after giving effect to this Amendment shall have received a $5,000 work fee;

(d) each of J.P. Morgan Securities LLC and Bank of America Merrill Lynch, as the Arrangers, the Lenders and the Agent shall have received all fees required to be paid to it, and all expenses for which invoices have been presented prior to the date hereof (including the reasonable fees and expenses of legal counsel to the Agent for which invoices have been presented at least forty-eight hours prior to the date hereof) , but without prejudice to the later payment of accrued fees and expenses not so invoiced;

(e) the Agent shall have received (i) an officer’s certificate of the Borrower and each Guarantor, attaching the certificate of formation (or similar document) of the Borrower or such Guarantor, as applicable, certified by the relevant authority of its jurisdiction of organization, a true and correct copy of the resolutions of the board of directors (or similar governing body) of the Borrower or such Guarantor authorizing the amendments contemplated hereby and the incumbency and specimen signatures of each natural person executing this Amendment on behalf of the Borrower or such Guarantor, and (ii) a good standing certificate for the Borrower and each Guarantor from its jurisdiction of organization;

(f) the Agent shall have received a copy of the Acquisition Agreement, which shall be reasonably acceptable to the Agent;

(g) the Agent shall have received a schedule showing the Borrower’s calculation of EBITDA on a pro forma basis taking into account the acquisition of the Target and including all adjustments to EBITDA used in making such calculation ; and

(h) to the extent requested by any Lender pursuant to Section 2.09(d) of the Credit Agreement, the Agent shall have received for the account of such requesting Lender , an amended and re stated promissory note reflecting such Lender ’ s increased Commitment .

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12. Condition Subsequent . Notwithstanding anything herein or in the Credit Agreement to the contrary, (a) within two (2) Business Days of the closing of the Acquisition, the Agent shall have received a fully executed copy of the final Acquisition Agreement and (b) in the event that the Acquisition is not consummated within 30 Business Days of the date of this Amendment, this Amendment will cease to be effective and will be of no further force and effect, and the Borrower will immediately repay any amounts outstanding in excess of the Commitments in effect prior to this Amendment, together with all accrued, unpaid interest.

13. Ratification . Each of the Borrower and Guarantors hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party are and shall continue to be in full force and effect as amended and modified by this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, lien, security interest or entitlement of any of the Lenders or the Administrative Agent created by or contained in any of such documents nor are the Borrower nor Guarantors released from any covenant, warranty or obligation created by or contained herein or therein.

14. Representations and Warranties . Each of the Borrower and Guarantors hereby represents and warrants to the Lenders and the Administrative Agent that (a) this Amendment has been duly executed and delivered on behalf of each of the Borrower and Guarantors, (b) this Amendment constitutes a valid and legally binding agreement enforceable against each of the Borrower and Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (c) the representations and warranties contained in the Credit Agreement and the Loan Documents are true and correct on and as of the date hereof in all material respects as though made as of the date hereof, except for such representations and warranties as are by their express terms limited to a specific date, in which case such representations and warranties were true and correct in all material respects as of such specific date, (d) no Default or Event of Default exists under the Credit Agreement or under any Loan Document and (e) the execution, delivery and performance of this Amendment has been duly authorized by each of the Borrower and Guarantors.

15. Release and Indemnity .

(a) The Borrower hereby releases and forever discharges the Agent and each of the Lenders and each affiliate thereof and each of their respective employees, officers, directors, trustees, agents, attorneys, successors, assigns or other representatives from any and all claims, demands, damages, actions, cross-actions, causes of action, costs and expenses (including legal expenses), of any kind or nature whatsoever, whether based on law or equity, which any of said parties has held or may now own or hold, whether known or unknown, for or because of any matter or thing done, omitted or suffered to be done on or before the actual date upon which this Amendment is signed by any of such parties (i) arising directly or indirectly out of the Loan Documents, or any other documents, instruments or any other transactions relating thereto and/or (ii) relating directly or indirectly to all transactions by and between the Borrower or its representatives and the Agent, and each Lender or any of their respective directors, officers, agents, employees, attorneys or other representatives. Such release, waiver, acquittal and discharge shall and does include, without limitation, any claims of usury, fraud, duress,

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misrepresentation, lender liability, control, exercise of remedies and all similar items and claims, which may, or could be, asserted by the Borrower including any such claims caused by the actions or negligence of the indemnified party (other than its gross negligence or willful misconduct) .

(b) The Borrower hereby ratifies the indemnification provisions contained in the Loan Documents, including, without limitation, Section 10.03 of the Credit Agreement, and agrees that this Amendment and losses, claims, damages and expenses related thereto shall be covered by such indemnities.

16. Commitment Increase Agreement .

(a) By its execution of this Amendment, each Lender hereto agrees that its Commitment is hereby increased to the amount set forth opposite such Lender’s name in Schedule 2.01 attached hereto.

(b) Each Lender hereto hereby acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 5.01 of the Credit Agreement and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Amendment and to agree to the various matters set forth herein. Each Lender hereto also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement.

17. Counterparts . This Amendment may be signed in any number of counterparts, which may be delivered in original, facsimile or electronic form each of which shall be construed as an original, but all of which together shall constitute one and the same instrument.

18. Governing Law . This Amendment shall be construed in accordance with and governed by the Law of the State of Texas without regard to any choice-of-law provisions that would require the application of the law of another jurisdiction.

19. Final Agreement of the Parties . THIS AMENDMENT, THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signature pages follow]

Exhibit A – Transaction Structure Detail by Legal Entity

Schedule 2.01 – Commitments

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IN WITNESS WHEREOF , the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

BORROWER:

CARDTRONICS, INC. ,

a Delaware corporation

By: /s/ Todd Ruden

Todd Ruden

Senior Vice President – Planning & Treasurer

GUARANTORS:

CARDTRONICS USA, INC. ,

a Delaware corporation

By: /s/ Todd Ruden

Todd Ruden

Treasurer

CARDTRONICS HOLDINGS, LLC ,

a Delaware limited liability company

By: /s/ Todd Ruden

Todd Ruden

Treasurer

ATM NATIONAL, LLC ,

a Delaware limited liability company

By: /s/ Todd Ruden

Todd Ruden

Treasurer

Signature Page to Third Amendment to Credit Agreement

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ADMINISTRATIVE AGENT AND LENDER :

JPMORGAN CHASE BANK, N.A.

By: /s/ John Kushnerick

Name : John Kushnerick

Title: Vice President

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ALTERNATIVE CURRENCY AGENT

J.P. MORGAN EUROPE LIMITED

By: /s/ Belinda Lucas

Name : Belinda Lucas

Title: Associate

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LENDER:

BANK OF AMERICA, N.A.

By: /s/ Gary L. Mingle

Name : Gary L. Mingle

Title: Senior Vice-President

Signature Page to Third Amendment to Credit Agreement

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LENDER :

WELLS FARGO BANK, N.A.

By: /s/ Victor Tekell

Name : Victor Tekell

Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement

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LENDER:

BBVA COMPASS f/k/a COMPASS BANK

By: /s/ Adrayll Askew

Name : Adrayll Askew

Title: Senior Vice President

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LENDER:

AMEGY BANK NATIONAL ASSOCIATION

By: /s/ Kelly Nash

Name : Kelly Nash

Title: Vice President

Signature Page to Third Amendment to Credit Agreement

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LENDER:

SUNTRUST BANK

By: /s/ David Bennett

Name : David Bennett

Title: Director

Signature Page to Third Amendment to Credit Agreement

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LENDER:

BRANCH BANKING AND TRUST COMPANY

By: /s/ Matt McCain

Name : Matt McCain

Title: Senior Vice President

Signature Page to Third Amendment to Credit Agreement

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LENDER:

CAPITAL ONE, N.A.

By: /s/ Scott Miller

Name : Scott Miller

Title: Vice President

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is made by and between Cardtronics USA, Inc. , a Delaware corporation (the “ Company ”), and David Dove (“ Executive ”).

W I T N E S S E T H:

WHEREAS , heretofore, Executive has rendered consulting services to the Company via his consulting company Dove Capital Partners LLC (the “Consulting Firm”) on a non-exclusive basis; and

WHEREAS, the Company desires to employ Executive on the terms and conditions, and for the consideration, hereinafter set forth and Executive desires to be employed by the Company on such terms and conditions and for such consideration.

NOW, THEREFORE , for and in consideration of the mutual promises, covenants and obligations contained herein, the Company and Executive agree as follows:

ARTICLE I
DEFINITIONS

In addition to the terms defined in the body of this Agreement, for purposes of this Agreement, the following capitalized words shall have the meanings indicated below:

1.1 “ Board ” shall mean the Board of Directors of the Parent Company.

1.2 “ Cause ” shall mean a determination by the Board that E xecutiv e ( a ) has engaged in gross negligence, gross incompetence or willful misconduct in the performance of E xecutiv e’s duties with respect to the Company or any of its a ffiliate s , ( b ) has refused without proper legal reason to perform E xecutiv e’s duties and responsibilities to the Company or any of its a ffiliate s , ( c ) has materially breached any material provision of this Agreement or any written agreement or corporate policy or code of conduct established by the Company or any of its a ffiliate s , ( d ) has willfully engaged in conduct that is materially injurious to the Company or any of its a ffiliate s, (e ) has disclosed without specific authorization from the Company confidential information of the Company or any of its a ffiliate s that is materially injurious to any such entity, ( f ) has committed an act of theft, fraud, embezzlement, misappropriation or willful breach of a fiduciary duty to the Company or any of its a ffiliate s , or ( g ) has been convicted of (or pleaded no contest to) a crime involving fraud, dishonesty or moral turpitude or any felony (or a crime of similar import in a foreign jurisdiction).

1.3 “ Change in Control ” shall mean:

(a) a merger of the Parent Company with another entity, a consolidation involving the Parent Company, or the sale of all or substantially all of the assets of the Parent Company to another entity if, in any such case, (i) the holders of equity securities of the Parent Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of

the Parent Company immediately prior to such transaction or event or (ii) the persons who were members of the Board immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event;

(b) the dissolution or liquidation of the Parent Company;

(c) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of the Parent Company; or

(d) as a result of or in connection with a contested election of directors, the persons who were members of the Board immediately before such election shall cease to constitute a majority of the Board.

For purposes of the preceding sentence, (i) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of the Parent Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (ii) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Parent Company” shall refer to the resulting entity and the term “Board” shall refer to the board of directors (or comparable governing body) of the resulting entity.

1.4 “ Code ” shall mean the Internal Revenue Code of 1996, as amended.

1.5 “ Date of Termination ” shall mean the date specified in the Notice of Termination relating to termination of Executive’s employment with the Company, subject to adjustment as provided in Section 3.3.

1.6 “ Good Reason ” shall mean :

(a) any action or inaction by the Company that constitutes a material breach of this Agreement; or

(b) the occurrence of any of the following events within the 12-month period immediately following a Change in Control :

(A) a diminution in Executive’s B ase Salary of five percent (5%) or more ; or

(B) a material di minution in Executive’s authority, duties, or responsibilities; or

(D) the involuntary relocation of the geographic location of the Company’s principal executive offices from 3250 Briarpark Drive, Suite 400, Houston, Texas 77042 by more than 50 miles .

Notwithstanding the foregoing provisions of this Section 1. 6 or any other provision in this Agreement to the contrary, any assertion by Executive of a termination of employment for “Good Reason” shall not be effective unless all of the following conditions are satisfied: (i) the applicable condition giving rise to Executive’s termination of employment must have arisen without Executive’s written consent; (ii) Executive must provide written notice to the Company of such condition in accordance with Section 1 0 .1 within 45 days of the initial existence of the condition; (iii) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company; and (4) the date of Executive’s termination of employment must occur within 90 days after the initial existence of the condition specified in such notice.

1.7 “ Notice of Termination ” shall mean a written notice delivered to the other party indicating the specific termination provision in this Agreement relied upon for termination of Executive’s employment and the Date of Termination and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

1.8 “ Parent Company ” shall mean Cardtronics, Inc., a Delaware corporation.

1.9 “ Section 409A Payment Date ” shall mean the earlier of (a) the date of Executive’s death or (b) the date that is six months after the date of termination of Executive’s employment with the Company.

ARTICLE II
EMPLOYMENT AND DUTIES

2.1 Employment; Effective Date . The Company agrees to employ Executive, and Executive agrees to be employed by the Company, pursuant to the terms of this Agreement beginning as of September 1, 2013 (the “ Effective Date ”) and continuing for the period of time set forth in Article III of this Agreement, subject to the terms and conditions of this Agreement.

2.2 Positions . Initially, the Company shall employ Executive in the position of Group President, Enterprise Growth of the Company (including the Parent Company) and the Executive shall report to the Chief Executive Officer of the Parent Company . Executive acknowledges and agrees that his title and his immediate supervisor may change during the term of this Agreement and that such organizational change alone shall not constitute a Good Reason absent a concomitant material di minution in Executive’s authority, duties, or responsibilities .

2.3 Duties and Services . Executive agrees to serve in the position(s) referred to in Section 2.2 hereof and to perform diligently and to the best of Executive’s abilities the duties and services appertaining to such position(s), as well as such additional duties and services appropriate to such position(s) which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by the Company that are of general applicability to the Company’s executive employees, as such policies may be amended from time to time.

2.4 Quarterly Performance Reviews . The Company will perform a quarterly performance review on the Executive during the Term. In the event that the Executive fails three (3) successive quarterly performance reviews, the Executive will be deemed to have incurred an “ Individual Per for mance Failure .”

2.5 Stock Ownership Guidelines . During the Term of this Agreement, Executive will comply with all stock ownership guidelines or policies maintained , from time to time, by the Company or the Parent.

2.6 Other Interests . Executive agrees, during the period of Executive’s employment by the Company, to devote substantially all of Executive’s business time, energy and best efforts to the business and affairs of the Company and its affiliates. Notwithstanding the foregoing, the parties acknowledge and agree that Executive may (a) engage in and manage Executive’s passive personal investments (b) engage in charitable and civic activities; provided, however, that such activities shall be permitted so long as such activities do not conflict with the business and affairs of the Company or interfere with Executive’s performance of Executive’s duties hereunder, ( c ) engage in no more than one (1) board and one (1) advisory position so long as such activities are approved by the Board and do not conflict with the business and affairs of the Company or the Parent Company or interfere with Executive’s performance of Executive’s duties hereunder, and (d) d e minim i s other activities such as non-commercial speeches. For the avoidance of doubt, Executive acknowledges and agrees that Company is employing him based upon his representation that as of the Effective Date he has ceased work on all new consulting matters and has substantially concluded consulting matters previously undertaking by him through the Consulting Firm. The Company understands and agrees that the Executive’s performance of transitional services and the cessation of existing consulting matters over a period of ninety (90) days, not to exceed five (5) work days in total, will not be deemed to conflict with or breach this Section 2.6.

2.7 Duty of Loyalty . Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act in the best interests of the Company and to do no act that would materially injure the business, interests, or reputation of the Company or any of its affiliates. In keeping with these duties, Executive shall make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning the subject matter of the fiduciary relationship.

ARTICLE III
TERM AND TERMINATION OF EMPLOYMENT

3.1 Term . Subject to the remaining terms of this Article III, thi s Agreement shall be for a term that begins on the Effective Date and continues in effect through February 28, 2017 (the “ Term ” ). While the Executive’s employment may continue after the expiration of the Term, this Agreement will terminate, if not terminated sooner pursuant to Section 3.2, on February 28, 2017, except with respect to Articles V, VI , VII, VIII and IX.

3.2 Company ’s Right to Terminate . Notwithstanding the provisions of Section 3.1, the Company may terminate Executive’s employment under this Agreement at any time for any of the following reasons by providing Executive with a Notice of Termination:

(a) upon Executive being unable to perform Executive’s duties or fulfill Executive’s obligations under this Agreement by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months as determined by the Company and certified in writing by a competent medical physician selected by the Company ; or

(b) Executive’s death; or

(d) due to an Individual Performance Failure; or

(e) for any other reason whatsoever or for no reason at all, in the sole discretion of the Company.

3.3 Executive’s Right to Terminate . Notwithstanding the provisions of Section 3.1, Executive shall have the right to terminate Executive’s employment under this Agreement for Good Reason or for any other reason whatsoever or for no reason at all, in the sole discretion of Executive, by providing the Company with a Notice of Termination. In the case of a termination of employment by Executive pursuant to this Section 3.3, the Date of Termination specified in the Notice of Termination shall not be less than 15 nor more than 60 days, respectively, from the date such Notice of Termination is given, and the Company may require a Date of Termination earlier than that specified in the Notice of Termination (and, if such earlier Date of Termination is so required, it shall not change the basis for Executive’s termination nor be construed or interpreted as a termination of employment pursuant to Section 3.1 or Section 3.2).

3.4 Deemed Resignations . Unless otherwise agreed to in writing by the Company and Executive prior to the termination of Executive’s employment, any termination of Executive’s employment shall constitute an automatic resignation of Executive as an officer of the Company and each affiliate of the Company, and an automatic resignation of Executive from the Board (if applicable) and from the board of directors of the Company and any affiliate of the Company and from the board of directors or similar governing body of any corporation, limited liability entity or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body Executive serves as the Company’s or such affiliate’s designee or other representative.

3.5 Meaning of Termination of Employment . For all purposes of this Agreement, Executive shall be considered to have terminated employment with the Company when Executive incurs a “separation from service” with the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance issued thereunder.

ARTICLE IV
COMPENSATION AND BENEFITS

4.1 Base Salary . During the T erm of this Agreement, Executive shall receive a minimum, annualized base salary of $ 500 ,000 (the “Base Salary” ). Executive’s annualized base salary shall be reviewed at least annually by the Board (or a committee thereof ) and , in the sole discretion of the Board (or a committee thereof), such annualized base salary may be increased (but not decreased) effective as of any date determined by the Board (or a committee thereof).

Executive’s Base Salary shall be paid in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

4.2 Bonuses . Executive shall be eligible to receive the following bonuses:

(a) a one-time sign-on bonus of $25 0,000 payable in 2013 or on January 15, 2014, at the Executive’s discretion, with Executive notifying the Company of the elected payment date within 30 days following the Effective Date (if Executive elects payment in 2013 then such payment shall be due within 30 days of such notification); and

(b) an annual, calendar-year bonus based on criteria determined in the discretion of the Board or a committee thereof (the “Annual Bonus” ), it being understood that (i ) the target bonus at planned or targeted levels of performance shall be equal to or not less than 80 % o f Executive’s Base Salary (the “ Annual Target Bonus ”) and (ii ) the actual amount of each Annual Bonus shall be determined in the discretion of the Board or a committee thereof. The Annual Bonus may also be subject to adjustment for certain pre-established individual performance targets, or management by objectives, as set by the Board or a committee thereof , which individual targets or management by objectives shall be assigned in writing by the Company within 90 days following the inception of the year in which such targets or management by objectives relate . The Company shall use commercially reasonable efforts to pay each Annual Bonus with respect to a calendar year on or before March 15 of the following calendar year (and in no event shall an Annual Bonus be paid after December 31 of the following cal endar year) . If Executive has not been employed by the Company since January 1 of the year that includes the Effective Date, then the Annual Bonus for such year shall be prorated based on the ratio of the number of days during such calendar year that Executive was employed by the Company to the number of days in such calendar year.

4.3 Incentive Awards .

(a) Restricted Stock . On the Effective Date , Executive will be awarded 75,000 shares of time-based restricted common stock of the Parent Company (the “ Time-based Award ”) . The award shall be governed by the terms and conditions of the Parent Company’s standard form of restricted stock /unit agreement to be executed by and between the Company and the Executive on the Effective Date , provided that the general vesting schedule for the Time-based Award will be as follows: 25% of the Time-based Award will vest on each of the one year, two year and three year anniversaries of the Effective Date, and the remaining 25% of the Time-based Award will vest on February 28, 2017 .

(b) Performance Shares . On the Effective Date, the Executive will be granted a target award of 50 , 000 shares of performa nce-based restricted common stock of the Parent Company (the “ Performance Award ”), which award shall be governed by the terms and conditions of the Parent Company’s standard form of restricted stock /unit agreement to be executed by and between the Company and the Executive on the Effective Date. The Performance Award will be divided into three separate tranches of 16,666, 16,666 and 16,668 performance shares each , each tranche of which will have its own annual performance period (specifically, calendar years 2014, 2015, and 2016) and performance metrics will be assigned in writing by the Company within ninety (90) days following the inception of the year to which such targets apply, in accordance with the requirements of the Amended and Restated 2007 Stock Incentive Plan (or any successor plan) . The

Performance Award will have a threshold payout of 50% of the target Performance Award, a target payout of 100% of the target Performance Award, and a maximum payout of 200% of the target Performance Award. The Performance Award is not intended to comply with the restrictions imposed upon qualified performance-based compensation awarded pursuant to Section 162(m) of the Code and the Treasury Regulations promulgated thereunder.

4.4 Other Perquisites . During Executive’s employment hereunder, the Company shall provide Executive with the same perquisite benefits made available to other senior executives of the Company.

4.5 Expenses . The Company shall reimburse Executive for all reasonable bu siness expenses incurred by Executive in performing services hereunder, including all expenses of travel and living expenses while away from home on business or at the request of and in the service of the Company; provided, in each case, that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Company . Any such reimbursement of expenses shall be made by the Company upon or as soon as practicable following receipt of supporting documentation reasonably satisfactory to the Company (but in any event not later than the close of Executive’s taxable year following the taxable year in which the expense is incurred by Executive); provided, however, that, upon Executive’s termination of employment with the Company, in no event shall any additional reimbursement be made prior to the Section 409A Payment D ate to the extent such payment delay is required under Section 409A(a)(2)(B)(i) of the Code. In no event shall any reimbursement be made to Executive for such fees and expenses incurred after the later of (1) the first anniversary of the date of Executive’s death or (2) the date that is five years after the date of Executive’s termination of employment with the Company.

4.6 Vacation and Sick Leave . During Executive’s employment hereunder, Executive shall be entitled to (a) sick leave in accordance with the Company’s policies applicable to its senior executives and (b) four weeks paid vacation each calendar year (none of which may be carried forward to a succeeding year).

4.7 Offices . S ubject to Articles II, III, and IV hereof, Executive agrees to serve without additional compensation, if elected or appointed thereto, as a direc tor of the Company or any of the Company’ s affiliat es and as a member of any committees of the board of directors of any such entitie s, and in one or more executive positions of any of the Company ’ s affiliates.

ARTICLE V
PROTECTION OF INFORMATION

5.1 Disclosure to and Property of the Company . For purposes of this Article V, the term “the Company” shall include the Company and any of its affiliates, and any reference to “employment” or similar terms shall include a director and/or consulting relationship. All information, trade secrets, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by Executive, individually or in conjunction with others, during the period of Executive’s employment by the Company (whether during business hours or otherwise and whether on the Company’s premises or otherwise) that relate to the Company’s or any of its affiliates’ business, trade secrets, products or services (including, without limitation, all such information relating to corporate opportunities, product specification s , compositions, manufacturing and distribution

methods and processes, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their requirements, the identity of key contacts within the customer’s organizations or within the organization of acquisition prospects, or production, marketing and merchandising techniques, prospective names and marks) and all writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression (collectively, “ Confidential Information ”) shall be disclosed to the Company and are and shall be the sole and exclusive property of the Company or its affiliates. Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression (collectively, “ Work Product ”) are and shall be the sole and exclusive property of the Company (or its affiliates). Executive agrees to perform all actions reasonably requested by the Company or its affiliates to establish and confirm such exclusive ownership. Upon termination of Executive’s employment by the Company, for any reason, Executive promptly shall deliver such Confidential Information and Work Product, and all copies thereof, to the Company.

Notwithstanding the foregoing, Confidential Information and Work Product shall not include information that: (a) is in the public domain other than through any unlawful act by Executive; (b) was in Executive’s possession prior to the time it was first made available to Executive by the Company, provided that the source of such information was not bound by any legal obligation of confidentiality to the Company; (c) becomes available to Executive from a source other than the Company, provided that such source is not bound by any legal obligation of confidentiality to the Company; or (d) was acquired or developed by Executive other than in breach of this Agreement .

5.2 Disclosure to Executive . The Company shall disclose to Executive, or place Executive in a position to have access to or develop, Confidential Information and Work Product of the Company (or its affiliates); and shall entrust Executive with business opportunities of the Company (or its affiliates); and shall place Executive in a position to develop business good will on behalf of the Company (or its affiliates).

5.3 No Unauthorized Use or Disclosure . Executive agrees to preserve and protect the confidentiality of all Confidential Information and Work Product of the Company and its affiliates. Executive agrees that Executive will not, at any time during or after Executive’s employment with the Company, make any unauthorized disclosure of (whether the receiving party is a Competing Business or otherwise) , and Executive shall not remove from the Company premises, Confidential Information or Work Product of the Company or its affiliates, or make any use thereof, except, in each case, in the carrying out of Executive’s responsibilities hereunder. Executive shall use all reasonable efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by Executive hereunder to preserve and protect the confidentiality of such Confidential Information. Executive shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by law; provided, however, that in the event disclosure is required by applicable law, Executive shall provide the Company with prompt notice of such requirement prior to making any such disclosure, so that the Company may seek an appropriate protective order. At the request of the Company at any time, Executive agrees to deliver to the Company all Confidential Information that Executive may

possess or control. Executive agrees that all Confidential Information of the Company (whether now or hereafter existing) conceived, discovered or made by Executive during the period of Executive’s employment by the Company exclusively belongs to the Company (and not to Executive), and upon request by the Company for specified Confidential Information, Executive will promptly disclose such Confidential Information to the Company and perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this Article V. As a result of Executive’s employment by the Company, Executive may also from time to time have access to, or knowledge of, Confidential Information or Work Product of third parties, such as customers, suppliers, partners, joint venturers, and the like, of the Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party Confidential Information and Work Product.

5.4 Ownership by the Company . If, during Executive’s employment by the Company, Executive creates any work of authorship fixed in any tangible medium of expression that is the subject matter of copyright (such as videotapes, written presentations, or acquisitions, computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural renditions, models, manuals, brochures, or the like) relating to the Company’s business, products, or services, whether such work is created solely by Executive or jointly with others (whether during business hours or otherwise and whether on the Company’s premises or otherwise), including any Work Product, the Company shall be deemed the author of such work if the work is prepared by Executive in the scope of Executive’s employment; or, if the work relating to the Company’s business, products, or services is not prepared by Executive within the scope of Executive’s employment but is specially ordered by the Company as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, or as an instructional text, then the work shall be considered to be work made for hire and the Company shall be the author of the work. If the work relating to the Company’s business, products, or services is neither prepared by Executiv e within the scope of Executiv e’s employment nor a work specially ordered that is deemed to be a work made for hire during Executive’s employment by the Company , then Executiv e hereby agrees to assign, and by these presents does assign, to the Company all of Executiv e’s worldwide right, title, and interest in and to such work and all rights of copyright therein .

5.5 Assistance by Executive . During the period of Executive’s employment by the Company, Executive shall assist the Company and its nominee, at any time, in the protection of the Company’s or its affiliates’ worldwide right, title and interest in and to Confidential Information and Work Product and the execution of all formal assignment documents requested by the Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries. After Executive’s employment with the Company terminates, at the request from time to time and expense of the Company or its affiliates, Executive shall reasonably assist the Company and its nominee, at reasonable times and for reasonable periods and for reasonable compensation, in the protection of the Company’s or its affiliates’ worldwide right, title and interest in and to Confidential Information and Work Product and the execution of all formal assignment documents requested by the Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries.

5.6 Remedies . Executive acknowledges that money damages would not be a sufficient remedy for any breach of this Article V by Executive, and the Company or its affiliates shall be entitled to enforce the provisions of this Article V by terminating payments then owing to Executive under this Agreement or otherwise and to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article V but shall be in addition to all remedies available at law or in equity, including the recovery of damages from Executive and Executive’s agents. However, if it is determined that Executive has not committed a breach of this Article V, then the Company shall resume the payments and benefits due under this Agreement and pay to Executive and Executive’s spouse, if applicable, all payments and benefits that had been suspended pending such determination.

ARTICLE VI
STATEMENTS CONCERNING THE COMPANY AND EXECUTIVE

6.1 Statements by Executive . Executive shall refrain, both during and after the termination of the employment relationship, from publishing any oral or written statements about the Company, any of its affiliates or any of the Company’s or such affiliates’ directors, officers, employees, consultants, agents or representatives that (a) are slanderous, libelous or defamatory, (b) disclose Confidential Information of the Company, any of its affiliates or any of the Company’s or any such affiliates’ business affairs, directors, officers, employees, consultants, agents or representatives, or (c) place the Company, any of its affiliates, or any of the Company’s or any such affiliates’ directors, officers, employees, consultants, agents or representatives in a false light before the public. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded the Company and its affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law.

6.2 Statements by the Company . The Company shall refrain, both during and after the termination of the employment relationship, from publishing any oral or written statements about Executive, any of Executive’s affiliates or any of such affiliates’ directors, officers, employees, consultants, agents or representatives that (a) are slanderous, libelous or defamatory, (b) disclose confidential information of Executive, or (c) place Executive in a false light before the public. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded Executive under this provision are in addition to any and all rights and remedies otherwise afforded by law.

ARTICLE VII
EFFECT OF TERMINATION OF EMPLOYMENT ON COMPENSATION

7.1 Effect of Termination of Employment on Compensation .

(a) Expiration of Term, for Cause and Certain Voluntary Terminations . If Executive’s employment hereunder shall terminate at the expiration of the Term, for the reason described in Section 3.2(c) , or pursuant to Executive’s resignation for other than Good Reason, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive shall be entitled to (i) payment of all accrued and unpaid Base Salary to the D ate of T ermination, (ii) reimbursement for all incurred but unreimbursed expenses for which Executiv e is entitled to reimbursement in accordance with

Section 4.4 , (iii) benefits to which Executiv e is entitled under the terms of any applicable benefit plan or program , (iv) payment of any accrued and unpaid Annual Bonus amounts for the calendar year prior to the year in which the termination occurs . Cash payments due to the Executive pursuant to this Section 7.1 shall be paid to Executive in a single lump sum within the 30 day period following the Executive’s Date of Termination (provided, however, that amounts payable pursuant to clause (iv) will be paid no earlier than the time that the bonuses will be paid to employees generally) . In the event that the Executive resigns for any reason other than Good Reason within the 18 month period following the Effective Date, the Executive shall return the one-time sign-on bonus set forth in Section 4.2(a) to the Company within the 90 day period following the Executive’s Date of Termination. Notwithstanding anything to the contrary in an individual equity award agreement, in the event that the Executive resigns for any reason other than Good Reason or the Executive is terminated by the Company for Cause, the Executive will forfeit all unvested equity compensation awards that were granted to the Executive by the Company or the Parent that the Executive holds on the Date of Termination.

(b) Individual Performance Failure . If the Executive’s employment hereunder is terminated by the Company due to an Individual Performance Failure, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (i ) Executive shall be entitled to receive the compensation and benefits described in clauses (i) through (iv) of Section 7.1(a ) and (ii) subject to Executive’s continued compliance with the restrictive covenants in Articles V, VI and VIII , and Executive’s delivery, within 50 days after the date of Executive’s termination of employment, of an executed release substantially in the form of the release contained at Appendix A (the “Release” ), Executive shall receive the following compensation and benefits from the Company (but no other compensation or benefits after such termination):

(A) T he Company shall pay to Executive an amount equal to the sum of (1 ) Executive’s Base Salary as of the Date of Termination (or, if there are less than 12 months remaining in the Term on the Date of Termination , the amount that would equal the Executive’s Base Salary divided by 12, and multiplied by the number of full calendar months remaining in the Term) and (2 ) the Executive’s Annual Target Bonus . The aggregate amount shall generally be divided into and paid in 24 equal consecutive semi-monthly installments payable on the 15 th and last day of each of the 12 calendar months following the calendar month in which the Date of Termination occ urs; provided, however, that if the Executive has not yet returned an executed Release on the date that any installments would otherwise be paid to the Executive pursuant to this paragraph, those installments will be held by the Company (without interest) and paid to the Executive along with the first scheduled installment payment that follows the Executive’s return of a properly executed Release. In the event that the Executive is a specified employee on the Date of Termination (as such term is defined in Section 409A of the Code and as determined by the Company in accordance with any method permitted under Section 409A of the Code), then, with respect to any payments of such installment amounts that (x) are not short-term deferrals within the meaning of Section 409A of the Code, (y) would be paid during the first six months following the date of Executiv e’s termination of employment, and (z) exceed in the aggregate during such six-month period two times the lesser of Executiv e’s annualized compensation based upon Executiv e’s annual rate of pay for services during the taxable year of Executiv e preceding the year in which the termination of employment occurs (adjusted for any increase during that year

that was expected to continue indefinitely had no termination of employment occurred) or the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the termination of employment occurs, such payments of such installment a mount s in excess of the amount described in clause (z) above that would otherwise have been paid during such six-month period shall be accumulated and paid on the date that is six months after the D ate of T ermination or such earlier date upon which such amount can be paid or provided under Section 409A of the Code without being subject to additional taxes and interest. The right to payment of the installment amounts pursuant to this paragraph shall be treated as a right to a series of separate payments for purpo ses of Section 409A of the Code .

(B) D uring the portion, if any, of the 12 -month period following the Date of Termination that Executive elects to continue coverage for Executive and Executive’s eligib le dependents under the Company’ s group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ( “ COBRA ” ), and/or Sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) , the Company shall promptly reimburse Executiv e on a monthly basis for the amount Executiv e pays to effect and continue such coverage .

(c) Termination due to Death or Disability . If Executive’s employment hereunder shall terminate due to a reason encompassed by Sections 3.2(a) or 3.2(b), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (i) Executive shall be entitled to receive the compensation and benefits described in clauses (i) through (iv) of Section 7.1(a) and (ii) subject to Executive’s continued compliance with the restrictive covenants in Articles V, VI and VIII in the event of a termination of employment due to Section 3.2(a) , and Executive’s delivery, within 50 days after the date of Executive’s termination of employment, of an executed Release (or in the event that the Executive’s termination occurs due to Section 3.2(b), a release executed by the Executive’s applicable beneficiary or his estate), Executive (or his beneficiary or estate, as applicable) shall receive the following compensation and benefits from the Company (but no other compensation or benefits after such termination):

(A) The Company shall pay to Executive an amount equal to the sum of (1) Executive’s Base Salary as of the Date of Termination (or, if there are less than 12 months remaining in the Term on the Date of Termination, the amount that would equal the Executive’s Base Salary divided by 12, and multiplied by the number of full calendar months remaining in the Term) and (2) the Executive’s Annual Target Bonus , pro-rated for the number of days that the Executive provided employment services under this Agreement during the performance period to which the Annual Target Bonus relates . The aggregate amount shall generally be divided into and paid in 24 equal consecutive semi-monthly installments payable on the 15 th and last day of each of the 12 calendar months following the calendar month in which the Date of Termination occurs; provided, however, that if the Executive has not yet returned an executed Release on the date that any installments would otherwise be paid to the Executive pursuant to this paragraph, those installments will be held by the Company (without interest) and paid to the Executive along with the first scheduled installment payment that follows the Executive’s return of a properly executed Release. In the event that the Executive is a specified employee on the Date of Termination (as such term is defined in Section 409A of the Code

and as determined by the Company in accordance with any method permitted under Section 409A of the Code), then, with respect to any payments of such installment amounts that (x) are not short-term deferrals within the meaning of Section 409A of the Code, (y) would be paid during the first six months following the date of Executiv e’s termination of employment, and (z) exceed in the aggregate during such six-month period two times the lesser of Executiv e’s annualized compensation based upon Executiv e’s annual rate of pay for services during the taxable year of Executiv e preceding the year in which the termination of employment occurs (adjusted for any increase during that year that was expected to continue indefinitely had no termination of employment occurred) or the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the termination of employment occurs, such payments of such installment a mount s in excess of the amount described in clause (z) above that would otherwise have been paid during such six-month period shall be accumulated and paid on the date that is six months after the D ate of T ermination or such earlier date upon which such amount can be paid or provided under Section 409A of the Code without being subject to additional taxes and interest. The right to payment of the installment amounts pursuant to this paragraph shall be treated as a right to a series of separate payments for purpo ses of Section 409A of the Code .

(B) During the portion, if any, of the 12-month period following the Date of Termination that Executive elects to continue coverage for Executive and Executive’s eligib le dependents under the Company’ s group health plans under COBRA , and/or Sections 601 through 608 of ERISA , the Company shall promptly reimburse Executiv e on a monthly basis for the amount Executiv e pays to effect and continue such coverage .

(C) Notwithstanding anything to the contrary in an individual equity award agreement, the unvested Time-based Award granted to the Executive by the Company or the Parent that the Executive holds on the Date of Termination will receive 100% vesting.

(D) Notwithstanding anything to the contrary in an individual equity award agreement, all unvested Performance Awards granted to the Executive by the Company or the Parent that the Executive holds on the Date of Termination will be deemed earned or vested at target levels, but further pro-rated based upon the number of days in the vesting period that the Executive has provided employment services under this Agreement.

(d) Termination without Cause or for Good Reason . If Executive’s employment hereunder shall terminate (i) by action of the Company pursuant to Section 3.2 for any reason other than those encompassed by Sections 3.2(a), 3 .2(b), 3.2(c) or 3.2(d) hereof, or (ii) pursuant to Executive’s resignation for Good Reason, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such terminati on of employment, except that (x ) Executive shall be entitled to receive the compensation and benefits described in c lauses (i) through (iii) of Section 7.1(a) and (y ) subject to Executive’s continued compliance with the restrictive covenants in Articles V, VI and VIII , and Executive’s delivery, within 50 days after the date of Executive’s termination of employment, of an executed release substantially in the form of the Release , Executive shall receive the following compensation and benefits from the Company (but no other compensation or benefits after such termination):

(A) T he Company shall pay to Executive an amount equal to (i) the sum of the E xecutive’s Base Salary as of the Date of Termination and the Annual Target Bonus , divided by (ii) 12, and multiplied by (iii) the number of full calendar months remaining in the period beginning on the Date of Termination and ending on February 28, 2017 (which number shall be no greater than 36 , referred to as the “ Maximum Severance Period ” ). The resulting severance amount shall be paid in equal and semi-monthly installments on the 15 th and last day of each full calendar month within the Maximum Severance Period ; provided, however, that if the Executive has not yet returned an executed Release on the date that any installments would otherwise be paid to the Executive pursuant to this paragraph, those installments will be held by the Company (without interest) and paid to the Executive along with the first scheduled installment payment that follows the Executive’s return of a properly executed Release. In the event that the Executive is a specified employee on the Date of Termination (as such term is defined in Section 409A of the Code and as determined by the Company in accordance with any method permitted under Section 409A of the Code), then, with respect to any payments of such installment amounts that (x) are not short-term deferrals within the meaning of Section 409A of the Code, (y) would be paid during the first six months following the date of Executiv e’s termination of employment, and (z) exceed in the aggregate during such six-month period two times the lesser of Executiv e’s annualized compensation based upon Executiv e’s annual rate of pay for services during the taxable year of Executiv e preceding the year in which the termination of employment occurs (adjusted for any increase during that year that was expected to continue indefinitely had no termination of employment occurred) or the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the termination of employment occurs, such payments of such installment a mount s in excess of the amount described in clause (z) above that would otherwise have been paid during such six-month period shall be accumulated and paid on the date that is six months after the D ate of T ermination or such earlier date upon which such amount can be paid or provided under Section 409A of the Code without being subject to additional taxes and interest. The right to payment of the installment amounts pursuant to this paragraph shall be treated as a right to a series of separate payments for purpo ses of Section 409A of the Code.

(B) N otwithstanding anything to the contrary in an individual equity award agreement, the unvested Time-based Award granted to the Executive by the Company or the Parent that the Executive holds on the Date of Termina tion will receive 100% vesting.

(C) N otwithstanding anything to the contrary in an individual equity award agreement, all unvested Performance Awards granted to the Executive by the Company or the Parent that the Executive holds on the Date of Termination will be deemed ear ned or vested at target levels .

(D) D uring the portion, if any, of the 12 -month period following the Date of Termination that Executive elects to continue coverage for Executive and Executive’s eligib le dependents under the Company’ s group health plans under COBRA , and/or Sections 601 through 608 of ERISA , the Company shall promptly reimburse Executiv e on a monthly basis for the amount Executiv e pays to effect and continue such coverage .

ARTICLE VIII
NON-COMPETITION AGREEMENT

8.1 Definitions . As used in this Article VIII, the following terms shall have the following meanings:

“ Business ” means (a) during the period of Executive’s employment by the Company, the core products and services provided by the Company and its affiliates during such period and other products and services that are functionally equivalent to the foregoing, and (b) during the portion of the Prohibited Period that begins on the termination of Executive’s employment with the Company, the core products and services provided by the Company and its affiliates at the time of such termination of employment and other products and services that are functionally equivalent to the foregoing.

“ Competing Business ” means any business, individual, partnership, firm, corporation or other entity which wholly or in any significant part engages in any business competing with the Business in the Restricted Area , including, without limitation, (a) any financial institution or its representative that manages off-bank-premise kiosks ; (b ) a merchant or its representative managing kiosk operations (c ) a diversified company or its representative engaged in kiosk operations ; or ( d ) any independent ATM sales organization or its representative . In no event will the Company or any of its affiliates be deemed a Competing Business.

“ Governmental Authority ” means any governmental, quasi-governmental, state, county, city or other political subdivision of the United States or any other country, or any agency, court or instrumentality, foreign or domestic, or statutory or regulatory body thereof.

“ Key Competitor ” means those Competing Businesses that Company designates in writing as such within thirty (3 0 ) days of the date Executive’s employment with the Company is terminated ; provided, further however, the Company may not designate more than 5 entities as a Key Competitor .

“ Legal Requirement ” means any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization, or other directional requirement (including, without limitation, any of the foregoing that relates to environmental standards or controls, energy regulations and occupational, safety and health standards or controls including those arising under environmental laws) of any Governmental Authority.

“ Prohibited Period ” means the period during which Executive is employed by the Company hereunder and a period of two year s following the termination of Executiv e’s employment with the Company; provided, however, in the event that severance payments are paid to the Executive pursuant to Section 7.1(c), the Prohibited Period will be the full period that the Executive is employed and it will extend to the end of the Maximum Severance Period.

“ Restricted Area ” means the United States of America, the United Kingdom or Europe .

8.2 Non-Competition; Non-Solicitation . Executive and the Company agree to the non-competition and non-solicitation provisions of this Article VIII (i) in consideration for the Confidential Information provided by the Company to Executive pursuant to Article V of this

Agreement; (ii) as part of the consideration for the compensation and benefits to be paid to Executive hereunder (including, without limitation, the severance payable under Article VII) , (iii) to protect the trade secrets and confidential information of the Company or its affiliates disclosed or entrusted to Executive by the Company or its affiliates or created or developed by Executive for the Company or its affiliates, the business goodwill of the Company or its affiliates developed through the efforts of Executive and/or the business opportunities disclosed or entrusted to Executive by the Company or its affiliates and (iv) as an additional incentive for the Company to enter into this Agreement.

(a) Subject to the exceptions set forth in S ection 8.2(b) below, Executive expressly covenants and agrees that during the Prohibited Period (i) Executive will refrain from carrying on or engaging in, directly or indirectly, any Competing Business in the Restricted Area and (ii) Executive will not, and Executive will cause Executive’s affiliates not to, directly or indirectly, own, manage, operate, join, become an employee, partner, owner or member of (or an independent contractor to), control or participate in or be connected with or loan money to, sell or lease equipment to or sell or lease real property to any business, individual, partnership, firm, corporation or other entity which engages in a Competing Business in the Restricted Area.

(b) Notwithstanding the restrictions contained in Section 8.2(a), Executive or any of Executive’s affiliates may own an aggregate of not more than 2% of the outstanding stock of any class of any corporation engaged in a Competing Business, if such stock is listed on a national securities exchange or regularly traded in the over-the-counter market by a member of a national securities exchange, without violating the provisions of Section 8.2(a), provided that neither Executive nor any of Executive’s affiliates has the power, directly or indirectly, to control or direct the management or affairs of any such corporation and is not involved in the management of such corporation. In addition, the restrictions contained in Section 8.2(a) shall not preclude Executive from being employed by any financial institution so long as Executive’s principal duties at such institution are not directly and primarily related to the Business.

(c) Executive further expressly covenants and agrees that during the Prohibited Period , Executive will not, and Executive will cause Executive’s affiliates not to (i) engage or employ, or solicit or contact with a view to the engagement or employment of, any person who is an officer or employee of the Company or any of its affiliates or (ii) canvass, solicit, approach or entice away or cause to be canvassed, solicited, approached or enticed away from the Company or any of its affiliates any person who or which is a customer , contractor, consultant, supplier, or vendor of any of such entities during the period during which Executive is employed by the Company. Notwithstanding the foregoing, the restrictions of clause (i) of this Section 8.2(c) shall not apply with respect to (A) an officer or employee whose employment has been involuntarily terminated by his or her employer (other than for cause), (B) an officer or employee who has voluntarily terminated employment with the Company and its affiliates and who has not been employed by any of such entities for at least one year, (C) an officer or employee who responds to a general solicitation that is not specifically directed at officers and employees of the Company or any of its affiliates.

(d) During the Prohibited Period, each time Executive accepts a consulting engagement or becomes employed by any Competing Business he shall give written notice to the Company of such engagement or employment within twenty-one ( 21 ) days of the commencement thereof. Furthermore, and notwithstanding anything to the contrary in this Agreement, Executive

acknowledges and understands that at no time during the Prohibited Period may he accept any engagement or employment of any nature with any of the entit ies that Companies identifies as a Key Competitor following the termination of Executive’s employment with the Company.

(e) Executive may seek the written consent of the Company, which may be withheld for any or no reason, to waive the provisions of this Article VIII on a case-by-case basis.

(f) The restrictions contained in Section 8.2 shall not apply to any product or services that the Company provided during Executive’s employment but that the Company no longer provides at the Date of Termination.

8.3 Relief . Executive and the Company agree and acknowledge that the limitations as to time, geographical area and scope of activity to be restrained as set forth in Section 8.2 hereof are reasonable and do not impose any greater restraint than is necessary to protect the legitimate business interests of the Company. Executive and the Company also acknowledge that money damages would not be sufficient remedy for any breach of this Article VIII by Executive, and the Company or its affiliates shall be entitled to enforce the provisions of this Article VIII by terminating payments then owing to Executive under this Agreement or otherwise and to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article VIII but shall be in addition to all remedies available at law or in equity, including the recovery of damages from Executive and Executive’s agents. However, if it is determined that Executive has not committed a breach of this Article VIII, then the Company shall resume the payments and benefits due under this Agreement and pay to Executive all payments and benefits that had been suspended pending such determination.

8.4 Reasonableness; Enforcement . Executive hereby represents to the Company that Executive has read and understands, and agrees to be bound by, the terms of this Article VIII. Executive acknowledges that the geographic scope and duration of the covenants contained in this Article VIII are the result of arm’s-length bargaining and are fair and reasonable in light of (a) the nature and wide geographic scope of the operations of the Business, (b) Executive’s level of control over and contact with the Business in all jurisdictions in which it is conducted, (c) the fact that the Business is conducted throughout the Restricted Area and (d) the amount of compensation and Confidential Information that Executive is receiving in connection with the performance of Executive’s duties hereunder. It is the desire and intent of the parties that the provisions of this Article VIII be enforced to the fullest extent permitted under applicable Legal Requirements, whether now or hereafter in effect and therefore, to the extent permitted by applicable Legal Requirements, Executive and the Company hereby waive any provision of applicable Legal Requirements that would render any provision of this Article VIII invalid or unenforceable.

8.5 Reformation . The Company and Executive agree that the foregoing restrictions are reasonable under the circumstances and that any breach of the covenants contained in this Article VIII would cause irreparable injury to the Company. Executive understands that the foregoing restrictions may limit Executive’s ability to engage in certain businesses anywhere in the Restricted Area during the Prohibited Period , but acknowledges that Executive will receive sufficiently high remuneration and other benefits from the Company to justify such restriction. Further, Executive acknowledges that Executive’s skills are such that Executive can be gainfully employed in non-competitive employment, and that the agreement not to compete will not prevent Executive from

earning a living. Nevertheless, if any of the aforesaid restrictions are found by a court of competent jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions herein set forth to be modified by the court making such determination so as to be reasonable and enforceable and, as so modified, to be fully enforced. By agreeing to this contractual modification prospectively at this time, the Company and Executive intend to make this provision enforceable under the law or laws of all applicable States, Provinces and other jurisdictions so that the entire agreement not to compete and this Agreement as prospectively modified shall remain in full force and effect and shall not be rendered void or illegal. Such modification shall not affect the payments made to Executive under this Agreement.

ARTICLE IX
DISPUTE RESOLUTION

9.1 Dispute Resolution . If any dispute arises out of this Agreement or out of or in connection with any equity compensation award made to Executive by the Company or any of its affiliates, the “complaining party” shall give the “other party” written notice of such dispute. The other party shall have 10 business days to resolve the dispute to the complaining party’s satisfaction. If the dispute is not resolved by the end of such period, either disputing party may require the other to submit to non-binding mediation with the assistance of a neutral, unaffiliated mediator. If the parties encounter difficulty in agreeing upon a neutral unaffiliated mediator, they shall seek the assistance of the American Arbitration Association (“ AAA ”) in the selection process. If mediation is unsuccessful, or if mediation is not requested by a party, either party may by written notice demand arbitration of the dispute as set out below, and each party hereto expressly agrees to submit to, and be bound by, such arbitration.

(a) Unless the parties agree on the appointment of a single arbitrator, the dispute shall be referred to one arbitrator appointed by the AAA. The arbitrator will set the rules and timing of the arbitration, but will generally follow the employment rules of the AAA and this Agreement where same are applicable and shall provide for a reasoned opinion.

(b) The arbitration hearing will in no event take place more than 180 days after the appointment of the arbitrator.

(c) The mediation and the arbitration will take place in Houston, Texas unless otherwise unanimously agreed to by the parties.

(d) The results of the arbitration and the decision of the arbitrator will be final and binding on the parties and each party agrees and acknowledges that these results shall be enforceable in a court of law.

(e) All costs and expenses of the mediation and arbitration shall be borne equally by the Company and Executive . The arbitrator shall award the prevailing party its reasonable attorneys fees incurred in connection with the dispute.

Executive and the Company explicitly recognize that no provision of this Article IX shall prevent either party from seeking to resolve any dispute relating to Article V or Article VIII or this Agreement in a court of law.

ARTICLE X
MISCELLANEOUS

10.1 Notices . For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given (a) when received if delivered personally or by courier, (b) on the date receipt is acknowledged if delivered by certified mail, postage prepaid, return receipt requested or (c) one day after transmission if sent by facsimile transmission with confirmation of transmission, as follows:

If to Executive, addressed to: David Dove

1100 Uptown Park Blvd. #134

Houston, Texas 77056

If to the Company, addressed to: Cardtronics USA, Inc.

3250 Briarpark Drive, Suite 400

Houston, Texas 7704 2

Attention: General Counsel Facsimile : 832-308-4761

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

10.2 Applicable Law; Submission to Jurisdiction .

(a) This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas , without regard to conflicts of laws principles thereof.

(b) With respect to any claim or dispute related to or arising under this Agreement, the parties hereto hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in the State of Texas .

10.3 No Waiver . No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

10.4 Severability . If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

10.5 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

10.6 Withholding of Taxes and Other E mploye e Deductions . Except as otherwise provided in this Agreement, the Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes and withholdings as may be

required pursuant to any law or governmental regulation or ruling and all other customary deductions made with respect to the Company’s employees generally.

10.7 Headings . The Section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

10.8 Gender and Plurals . Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

10.9 Affiliate . As used in this Agreement, the term “ affiliate ” as used with respect to a particular person or entity shall mean any other person or entity which owns or controls, is owned or controlled by, or is under common ownership or control with, such particular person or entity. Without limiting the scope of the preceding sentence, the Parent Company shall be deemed to be an affiliate of the Company for all purposes of this Agreement.

10.10 Successors . This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company. Except as provided in the preceding sentence and in Section 2.2, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party. In addition, any payment owed to Executive hereunder after the date of Executive’s death shall be paid to Executive’s estate.

10.11 Term . Termination of this Agreement shall not affect any right or obligation of any party which is accrued or vested prior to such termination. Without limiting the scope of the preceding sentence, the provisions of Articles V, VI, VII, VIII and IX shall survive any termination of the employment relationship and/or of this Agreement.

10.12 Entire Agreement . Except as provided in any signed written agreement contemporaneously or hereafter executed by the Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by the Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof are hereby null and void and of no further force and effect.

10.13 Modification; Waiver . Any modification to or waiver of this Agreement will be effective only if it is in writing and signed by the parties to this Agreement.

10.14 Actions by the Board . Any and all determinations or other actions required of the Board hereunder that relate specifically to Executive’s employment by the Company or the terms and conditions of such employment shall be made by the members of the Board other than Executive if Executive is a member of the Board, and Executive shall not have any right to vote or decide upon any such matter.

10.15 Delayed Payment Restriction . Notwithstanding any provision in this Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under Section 409A of the Code if Executive’s receipt of such payment or benefit is not

delayed until the Section 409A Payment Date, then such payment or benefit shall not be provided to Executive (or Executive’s estate, if applicable) until the Section 409A Payment Date.

IN WITNESS WHEREOF , the parties hereto have executed this Agreement on August 19 , 2013 .

CARDTRONICS USA, INC.

By: /s/ Debra Bronder ___________________

Name: Debra Bronder ___________________

Title: EVP ____________________________

/s/ David Dove _________________________

DAVID DOVE

Attachments :

Appendix “A” -Release Agreement

APPENDIX A

RELEASE AGREEMENT

This Release Agreement (this “ Agreement ”) constitutes the release referred to in that certain Employment Agreement (the “ Employment Agreement ”) dated as of _______ ____ ____ ____ , 20_ _ _, by and between David Dove (“ Executive ”) and Cardtronics USA, Inc. , a Delaware corporation (the “ Company ”).

(a) For good and valuable consideration, including the Company’s provision of certain payments and benefits to Executive in ac cordance with Section 7.1(b) of the Employment Agreement, Executive hereby releases, discharges and forever acquits the Company, Cardtronics, Inc., their affiliates and subsidiaries and the past, present and future stockholders, members, partners, directors, managers, employees, agents, attorneys, heirs, legal representatives, successors and assigns of the foregoing, in their personal and representative capacities (collectively, the “Company Parties” ), from liability for, and hereby waives, any and all claims, damages, or causes of action of any kind for Executive’s employment with any Company Party, the termination of such employment, and any other acts or omissions on or prior to the date of this Agreement including without limitation any alleged violation through the date of this Agreement of: (i) the Age Discrimination in Employment Act of 1967, as amended; (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) the Civil Rights Act of 1991; (iv) Section 1981 through 1988 of Title 42 of the United States Code, as amended; (v) the Employee Retirement Income Security Act of 1974, as amended; (vi) the Immigration Reform Control Act, as amended; (vii) the Americans with Disabilities Act of 1990, as amended; (viii) the National Labor Relations Act, as amended; (ix) the Occupational Safety and Health Act, as amended; (x) the Family and Medical Leave Act of 1993; (xi) any state anti-discrimination law; (xii) any state wage and hour law; (xiii) any other local, state or federal law, regulation or ordinance; (xiv) any public policy, contract, tort, or common law claim; (xv) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters; (xvi) any and all rights, benefits or claims Executive may have under any employment contract, incentive compensation plan or stock option plan with any Company Party or to any ownership interest in any Company Party except as expressly provided in the Employment Agreement and any stock option or other equity compensation agreement between Executive and the Company and (xvii) any claim for compensation or benefits of any kind not expressly set forth in the Employment Agreement or any such stock option or other equity compensation agreement (collectively, the “Released Claims” ). In no event shall the Released Claims include (a) any claim which arises after the date of this Agreement, or (b) any claim to vested benefits under an employee benefit plan, or (c) any claims for contractual payments under the Employment Agreement , (d) rights and claims Executive cannot by law waive ( e . g ., claims for unemployment insurance benefits, claims under workers’ compensation laws); (e) rights and claims to indemnification from or by the Company pursuant to any applicable provision of the Company’s by-laws or charter, applicable indemnification or analogous agreement, or insurance policy covering activities and actions taken by Executive as an agent, officer or employee of Company, or (f) rights and claims regarding equity granted by the Company to Executive, including but not limited to the time-based restricted stock and performance-based restricted stock granted hereunder, which rights shall be governed by the applicable equity agreement and plan . Notwithstanding this release of liability, nothing in this Agreement prevents Executive from filing any non-legally waivable claim (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission (“EEOC”) or

comparable state or local agency or participating in any investigation or proceeding conducted by the EEOC or comparable state or local agency; however, Executive understands and agrees that Executive is waiving any and all rights to recover any monetary or personal relief or recovery as a result of such EEOC, or comparable state or local agency proceeding or subsequent legal actions. This Agreement is not intended to indicate that any such claims exist or that, if they do exist, they are meritorious. Rather, Executive is simply agreeing that, in exchange for the consideration recited in the first sentence of this paragraph, any and all potential claims of this nature that Executive may have against the Company Parties as of the date of this Agreement, regardless of whether they actually exist, are expressly settled, compromised and waived. By signing this Agreement, Executive is bound by it. Anyone who succeeds to Executive’s rights and responsibilities, such as heirs or the executor of Executive’s estate, is also bound by this Agreement. This release also applies to any claims brought by any person or agency or class action under which Executive may have a right or benefit. THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES .

(b) Executive agrees not to bring or join, but may defend, any lawsuit against any of the Company Parties in any court relating to any of the Released Claims. Executive represents that Executive has not brought or joined any lawsuit or filed any charge or claim against any of the Company Parties in any court or before any government agency and has made no assignment of any rights Executive has asserted or may have against any of the Company Parties to any person or entity, in each case, with respect to any Released Claims.

(i) Executive has carefully read this Agreement;

(ii) Executive has had at least twenty-one (21) days to consider this Agreement before the execution and delivery hereof to the Company;

(iii) Executive has been and hereby is advised in writing that Executive may, at Executive’s option, discuss this Agreement with an attorney of Executive’s choice and that Executive has had adequate opportunity to do so; and

(iv) Executive fully understands the final and binding effect of this Agreement; the only promises made to Executive to sign this Agreement are those stated in the Employment Agreement and herein; and Executive is signing this Agreement voluntarily and of Executive’s own free will, and that Executive understands and agrees to each of the terms of this Agreement.

Notwithstanding the initial effectiveness of this Agreement, Executive may revoke the delivery (and therefore the effectiveness) of this Agreement within the seven day period beginning on the date Executive delivers this Agreement to the Company (such seven day period being referred to herein as the “Release Revocation Period” ). To be effective, such revocation must be in writing signed by Executive and must be delivered to the address of the Chief Executive Officer of the Company before 11:59 p.m., Houston, Texas time, on the last day of the Release Revocation Period. If an effective revocation is delivered in the foregoing manner and timeframe, this

Agreement shall be of no force or effect and shall be null and void ab initio . No consideration shall be paid if this Agreement is revoked by Executive in the foregoing manner.

Executed on this _______ day of _____________, _______.

_________________________________

__________________ _______________

STATE OF §

COUNTY OF §

BEFORE ME, the undersigned authority personally appeared _______________, by me known or who produced valid identification as described below, who executed the foregoing instrument and acknowledged before me that he subscribed to such instrument on this _____ day of ______________, ________.

_____________________________________

NOTARY PUBLIC in and for the

State of ___________________

My Commission Expires: ________________

Identification produced:


Share Sale and Purchase Agreement
relating to Cardpoint Limited

Dated	7 August, 20 13
Payzone Ventures Limited (1)
Cardtronics Europe Limited (2)
Warrantors (3)

Table of Contents


INTRODUCTION	1
OPERATIVE PROVISIONS	1
1 D efinitions	1
2 Sale and purchase of the Shares	7
3 Consideration	7
4 Locked box	8
5 Completion	8
6 Seller Warranties	9
7 Buyer Warranties	9
8 Restrictive Covenants	9
9 Buyer’s Undertakings	11
10 Release of guarantees	11
11 Insurance	11
12 Announcements	12
13 Confidentiality	12
14 Entire agreement	13
15 Cumulative rights	14
16 Assignment and transfer	14
17 Costs and expenses	14
18 Interest on late payments	15
19 No set-off	15
20 Effect of Completion	15
21 Waiver	15
22 Variation	15
23 Severance	15
24 Notices	16
25 Counterparts	17
26 Governing language	17
27 Governing law	17
28 Jurisdiction	17
29 Interpretation	17
30 Rights of third parties	18
31 Section 338(g) Internal Revenue Code Election	19
32 Execution	19
SCHEDULE 1 - The Warrantors
SCHEDULE 2
Part 1: - Documents which are to be delivered by the Seller at Completion
Part 2: - Documents which are to be delivered by the Buyer at Completion
SCHEDULE 3 - Title Warranties
SCHEDULE 4 - Buyer Warranties
SCHEDULE 5 - Locked Box
SCHEDULE 6 - Permitted Leakage
SCHEDULE 7 - Locked Box Accounts
SCHEDULE 8 – Senior Employees
APPENDIX 1 – Permitted Leakages


	Date	7 AUGUST, 2013

	Parties
(1)	PAYZONE VENTURES LIMITED (company number 07112083) whose registered office is at Davidson House, Gadbrook Park, Northwich, Cheshire CW9 7TW (the “Seller”);
(2)	CARDTRONICS EUROPE LIMITED (company number 08316358) a company incorporated in England and Wales whose registered office is at Rutland House, 148 Edmund Street, Birmingham B3 2JR (the “Buyer”);
(3)	The individuals whose names are listed in Schedule 1 (the “Warrantors”); and

I NTRODUCTION

(A) The Company was incorporated in England and Wales on 27 October 2000 and is registered under number 04098226 as a private company limited by shares.

(B) The Seller has agreed to sell to the Buyer and the Buyer has agreed to purchase the Shares for the Completion Consideration and otherwise in the manner and on and subject to the terms of this Agreement.

(C) The Warrantors are a party to this Agreement solely for the purposes of clause 4 ( Locked box ) and clause 8 ( Restrictive Covenants ) together with Schedule 5 ( Locked Box ) and Schedule 6 ( Permitted Leakage ).

OPERATIVE PROVISIONS

1 Definitions

In this Agreement, except where a different interpretation is necessary in the context, the words and expressions set out below shall have the following meanings:


Accounts	the consolidated audited balance sheet as at the Accounts Date, and the consolidated audited profit and loss account for the financial year ended on the Accounts Date, of the Group together with the notes, reports, statements (including cash flow statements, if applicable) and other documents which are or would be required by law to be annexed to the accounts of the company concerned and to be sent or made available to members, a copy of each of which has been supplied to the Buyer and is included in the Data Room Documents
Accounts Date	30 September 2012
Affiliate	in relation to any body corporate (whether or not registered in the United Kingdom), any holding company or subsidiary of such body corporate or any subsidiary of a holding company of such body corporate in each case from time to time
this Agreement	this agreement including the Introduction and the Schedules
Applicable Law	an enforceable law or regulation, or any enforceable judgment, injunction, order or decree by any court or Authority

Associated Company	a company or any other body corporate (whether or not registered in the United Kingdom) in which any Group Company holds shares conferring the right to exercise 20 per cent or more of the votes which could be cast on a poll at a general meeting of such company and which is not a subsidiary of any of the Group Companies, and the term “Associated Companies” shall be construed accordingly
Authority	any governmental, regulatory or other authority and "Authorities" shall be construed accordingly
Business	collectively, the businesses of each of the Group Companies at the date hereof
Business Day	a day other than a Saturday, Sunday or public holiday in either (i) England and Wales or (ii) Germany
Buyer Warranties	the warranties given by the Buyer in clause 6 and Schedule 4 and each buyer warranty statement shall be a “Buyer Warranty”
Buyer’s Group	the Buyer, any holding company of the Buyer and any subsidiary of the Buyer or such holding company from time to time and references to “any member of the Buyer Group” shall be construed accordingly
Buyer’s Guarantee Deed	the buyer’s guarantee deed between Cardtronics Holdings LLC, the Buyer and the Seller entered into around the date hereof in respect of the Buyer’s obligations under this Agreement
Buyer’s Solicitors	Squire Sanders (UK) LLP of 7 Devonshire Square, London EC2M 4YH
Change of Control	occurs if a person who controls any body corporate ceases to do so or if another person acquires control of it, where "control" has the meaning set out in section 1124 of the Corporation Tax Act 2010
Claim	any claim for breach of the Title Warranties or any other provision of this Agreement, including any Locked Box Claim
the Company	Cardpoint Limited, short particulars of which are set out in Part 1 of Schedule 4 of the Warranty Deed
Completion	completion of the sale and purchase of the Shares in accordance with the terms of clause 5
Completion Consideration	£71,115,292.74
Confidential Information	all technical, financial, commercial and other information of a confidential nature relating to the Business, including without limitation, trade secrets, know-how, inventions, product information and unpublished information relating to Intellectual Property, object code and source code relating to software, marketing and business plans, projections, current or projected plans or internal affairs of the Group Companies, secret or confidential information, current and/or prospective suppliers and customers (including any customer or supplier lists) and any other person who has had material dealings with them

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Covenantors	means the Seller and the Warrantors and Covenantor means any one of them
Data Room	the Project Copia data room hosted by Merrill Corporation closed to new documentation on Friday 2 ^nd August 2013
Data Room Documents	the documents comprising the Data Room made available to the Buyer, listed in the data room index annexed to the Disclosure Letter and included on the DVD provided by Merrill Corporation
Deferred Share	the one issued deferred share of £0.05 in the capital of the Company
Disclosure Letter	a letter in the agreed form dated on or before the date of this Agreement from the Warrantors to the Buyer, delivered to the Buyer immediately before execution of this Agreement, for which the Buyer has acknowledged receipt
Encumbrance	any mortgage, charge, pledge, lien, encumbrance, equity, pledge, guarantee, declaration of trust, assignment, claim or other third party right or interest or security interest, title retention or any other security agreement or arrangement or any agreement to create any of the above (including any right to acquire, option or right of pre-emption or conversion) of any nature whatsoever
Equity Ticker	£5,183,680, calculated by reference to a daily rate of £32,398 per day for each day from (but excluding) the Locked Box Date up to and including the date of Completion
German Warrantors	Jonathan Simpson-Dent and Andreas Raabe
Gross Transaction Bonuses	an aggregate amount of £463,729 representing the total cost to the Group (including PAYE, and employee and employer NIC) of the following amounts in respect of Jonathan Simpson-Dent (£136,560 including PAYE, and employee and employer NIC), Alastair Mayne (£113,800 including PAYE, and employee and employer NIC), Chris Judge (£50,000 including PAYE, and employee and employer NIC) and Tim Halford (£113,800 including PAYE, and employee and employer NIC) by the Company and in the case of Andreas Raabe (£49,569 including all income taxes and social security charges) by Cardpoint GmbH, as a bonus pursuant to clause 5.3
Group	the Company and each of the Subsidiaries, and “Group Company” shall be construed accordingly
Group Covenant Deed	a deed in the agreed form between the Buyer and certain of the Seller’s Covenantors pursuant to which certain of the Seller’s Covenantors covenant to the Buyer and each Group Company in the form as set out in clause 8 ( Restrictive Covenants )

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Group Indebtedness	the intra group debt of 34,306,657.26 owed by the Company to the Seller immediately prior to Completion (being an amount in pounds sterling which is equal to €40,138,789 at euro to pound sterling exchange rate of 1.17)
Group Relief	any relief surrendered or claimed pursuant to Part 5 of the Corporation Tax Act 2010
Group Relief Deed	a deed in the agreed form between the Company and members of the Seller’s Group pursuant to which those certain member of the Seller’s Group agrees to surrender Group Relief to the Group on the basis agreed therein for the accounting period ended 30 September 2012 and for the accounting period current at Completion and that any such surrenders, including surrenders made prior to the date of this Agreement, shall not be withdrawn or amended without the prior written consent of the Buyer
Initial Amount	£99,999,999
Insurer	AIG Europe Limited (company number 1486260) whose registered office is at the AIG Building, 58 Fenchurch Street, London EC3M 4AB
Intellectual Property	patents, trade marks, service marks, goodwill or right to sue for passing off, copyrights and related rights, registered designs, trade names, business names, domain names and email address names, rights in designs, trade secrets and other confidential information, computer software and database rights, rights in know-how and other intellectual property rights whether registered of unregistered and including applications for the grant of any of the foregoing and all rights or forms of protection having equivalent or similar effect anywhere in the world
Investors	has the meaning given to it in clause 8.4(a)(iv)
Leakage	has the meaning given in paragraph 1 of Schedule 5 of this Agreement
Locked Box Accounts	the consolidated balance sheet of the Group as at the Locked Box Date set out at Schedule 7
Locked Box Claim	a claim for breach of clause 4 and Schedule 5
Locked Box Date	28 February 2013
Locked Box Obligor	has the meaning given to it in Schedule 5
Management Warranties	has the meaning given to it in the Warranty Deed
Non-Disclosable Information	all information (including but not limited to Confidential Information) that relates to:
	(a) any Group Company and/or any Associated Company and/or their respective Affiliates;
	(b) any aspect of the Business;

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	(c) the provisions of this Agreement;
	(d) the negotiations relating to this Agreement;
	(e) the subject matter of this Agreement;
	(f) the Buyer and any of its Affiliates from time to time; or
	(g) the Seller and any of its Affiliates from time to time
Ordinary Shares	116,071,834 issued ordinary shares of £0.05 each in the capital of the Company
Payzone UK	Payzone UK Limited (company number 3102137) whose registered office is at Davidson House, Gadbrook Park, Northwich, Cheshire CW9 7TW, itself a member of the Seller's Group
Payzone Logo	the registered trademarks held by the Seller’s Group as set out at Schedule 1 of the Seller's Intellectual Property Licence
Permitted Assignee	has the meaning given to it at clause 16.4(b)
Permitted Leakage	a payment set out in Schedule 6 and “Permitted Leakage” means all of those payments
Proposed Assignee	has the meaning given to it in clause 16.2
PWC Debt Restructuring	the debt restructuring in respect of the Group and the Seller’s Group entered into prior to the date of this Agreement and set out in a steps paper prepared by PWC entitled ‘Payzone Group Loan Restructuring’ dated 2 August 2013
Referable Amount	the Initial Amount, the Equity Ticker and the VAT Claim Consideration
Restricted Period	in the case of the Seller and the Seller’s Covenantors, a period of 2 years from Completion and in the case of the Warrantors, a period of 12 months from Completion.
Rights	has the meaning given to it at clause 16.4
Seller’s Covenantors	each member of the Seller’s Group save for its financial investors
Seller’s Group	the Seller or any of its Affiliates but excluding the Group Companies
Seller's Intellectual Property Licence	a licence in the agreed form between Payzone UK and the Company pursuant to which the Company shall be licensed by Payzone UK to use the Payzone Logo
Seller's Solicitors	SJ Berwin LLP of 10 Queen Street Place, London, EC4R 1BE
Seller's Solicitors Client Account	the bank account provided by Barclays Bank Plc with the following details: Account number: 10644994 Sort Code: 20 36 47

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Senior Employee	a senior employee of any Group Company as named on the list set out at Schedule 8
Shares	the Ordinary Shares and the Deferred Share, being the entire issued share capital of the Company
Subsidiaries	those companies or other persons (whether or not registered in the United Kingdom) short particula rs of which appear in Part 2 of Schedule 1 of the Warranty Deed and the expression “Subsidiary” shall mean any one of the Subsidiaries
Tax	has the meaning given to it in the Warranty Deed
Taxing Authority	has the meaning given to it in the Warranty Deed
Third Party Rights	has the meaning given to it at clause 30.2
Title Warranties	the warranties set out in Schedule 3 of this Agreement and each shall be a “Title Warranty”
Transaction Bonus	the after Tax income relating to the Gross Transaction Bonuses paid to Jonathan Simpson-Dent, Chris Judge, Alastair Mayne and Tim Halford by the Company and in the case of Andreas Raabe by Cardpoint GmbH, as a bonus pursuant to clause 5.3
UK Warrantor	has the meaning given to it in the Warranty Deed
VAT Claim	the German VAT appeal submitted by Moneybox Deutschland GmbH (filing number 42/655/0925/2-11/2 and Cardpoint GmbH (filing number 42/655/0598/8-11/2) in respect of a refund of the aggregate amount up to a maximum amount of €6,452,304 including interest payable
VAT Claim Consideration	the amount calculated in accordance with clause 3.3
VAT Claim Cut Off Date	31 December 2016
VAT Claim Recovery Costs	all direct costs reasonably incurred by the then Buyer’s Group to settle the VAT Claim (to include any and all such costs which as at Completion have not been paid but excluding such costs which have been paid prior to Completion)
Warrantors	the persons whose names are set out in Schedule 1 of the Warranty Deed, each a “Warrantor”
Warranty Deed	the warranty deed between the Buyer and the Warrantors entered into on or around the date of this Agreement in the agreed form
W&I Insurance Policy	the insurance policy in the agreed form entered into on or about the date of this Agreement between the Insurer and the Buyer indemnifying the Buyer in respect of any breach of the Warranties
W&I Insurance Policy Amount	the premium of £128,000 plus insurance premium tax payable on that amount of £7,680 and brokers fees of £20,000 payable in respect of the W&I Insurance Policy

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2 Sale and purchase of the Shares

2.1 The Seller shall sell with full title guarantee on and with effect from Completion, and the Buyer shall purchase, all of the Shares together with all rights attaching to them at Completion and free from all Encumbrances.

2.2 The Seller covenants with the Buyer that:

(a) the Shares are fully paid (or credited as fully paid) and constitute the whole of the allotted and issued share capital of the Company;

(b) the Seller is entitled to sell and transfer the full legal and beneficial ownership of the Shares to the Buyer on the terms set out in this Agreement;

(c) the Shares will be sold and transferred to the Buyer free from any and all Encumbrances and together with all accrued benefits and rights attaching or accruing to the Shares, including all dividends declared on or after the date of this Agreement; and

(d) the Group Indebtedness is equal to the entire outstanding indebtedness owed between the Group and the Seller's Group as at Completion and no amount is owed or will be owed or become due and payable (relating to the period prior to Completion) by any of the Group Companies to any member of the Seller's Group except for the Group Indebtedness.

2.3 The Seller shall at Completion waive:

(a) all pre-emption rights in respect of the Shares; and

(b) any other rights which restrict the transfer of the Shares,

conferred on the Seller by the articles of association of the Company.

3 Consideration

3.1 In consideration of the sale of the Shares in accordance with the terms of this Agreement, the Buyer shall pay to the Seller the Completion Consideration and the VAT Claim Consideration, if any, in accordance with clause 5 .

3.2 During the period between Completion up to the VAT Claim Cut Off Date, if the VAT Claim has not been settled, the Buyer shall procure that:

(a) Moneybox Deutschland GmbH and Cardpoint GmbH and any applicable Group Companies use all reasonable endeavours to obtain a resolution to the VAT Claim in their favour and secure payment in respect of any VAT Claim as soon as reasonably practicable;

(b) copies of all material correspondence, notices and documents received by or on behalf of Moneybox Deutschland GmbH and Cardpoint GmbH relating to the VAT Claim are sent to the Seller upon written request with reasonable notice; and

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(c) the Seller is notified as soon as practicably possible after the Buyer or any of the applicable Group Companies becomes aware of the settlement of the VAT Claim .

3.3 In the event that settlement and payment in respect of the VAT Claim occurs during the period between Completion and the VAT Claim Cut Off Date, the Buyer shall, within 5 Business Days of receipt in cleared funds of the monies representing the VAT Claim, pay to the Seller an additional amount equal to 50 per cent of the sum of: the total proceeds received by or on behalf of Moneybox Deutschland GMbH and Cardpoint GmbH relating to the VAT Claim, less the VAT Claim Recovery Costs.

3.4 The Buyer shall provide the Seller with such evidence as the Seller may reasonably require on reasonable written notice evidencing the Buyer’s compliance with the obligations set out in this clause 3 .

3.5 In the event that no payment in respect of the VAT Claim has been received by the Buyer’s Group by the VAT Claim Cut Off Date then the obligations on the Buyer under clauses 3.2 and 3.3 shall immediately lapse and have no further effect and no VAT Claim Consideration shall be payable.

3.6 Any payment made by the Seller and/or the Warrantors to the Buyer under or in respect of any breach of this Agreement (including Schedule 5 ( Locked Box )) or the Warranty Deed (including, without limitation, in respect of any claim for breach of the Title Warranties or any indemnity contained in this Agreement) shall be and shall be deemed to be a reduction in the price paid for the Shares under this Agreement to the extent legally possible.

4 Locked Box

The Seller warrants and undertakes and each of the Warrantors severally undertakes to the Buyer in the terms of Schedule 5 .

5 Completion

5.1 Completion shall take place at the offices of the Buyer’s Solicitors immediately after the signing of this Agreement when each of the events set out at clause 5.2 shall occur.

5.2 At Completion:

(a) the Seller and the Buyer shall deliver or cause to be delivered to the other the items listed in Parts 1 and 2 of Schedule 2 (the Buyer receiving them, where appropriate, as agent for the Company or the Subsidiaries);

(b) the Buyer shall procure the delivery to the Seller's Solicitors Client Account for the account of the Seller by an electronic transfer in favour of the Seller's Solicitors for the amount of the Completion Consideration;

(d) prior to Completion the Seller shall procure the payment of the W&I Insurance Policy Premium.

5.3 After Completion the Buyer shall procure the payment of the Transaction Bonuses which shall be paid by the Company to Jonathan Simpson-Dent, Alastair Mayne, Chris Judge and Tim Halford and by Cardpoint GmbH in the case of Andreas Raabe, as part of the August 2013 payroll for each of the Company and Cardpoint GmbH respectively and the foregoing individuals and the Seller hereby confirm to the Buyer that the Transaction Bonuses constitute the entire amounts payable to those individuals by any Group Company by way of bonus or otherwise as a consequence of Completion occurring.

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6 Seller Warranties

6.1 The Seller warrants to the Buyer as at the date of this Agreement in the terms of the Title Warranties in Schedule 3 ( Title Warranties ).

6.2 The Buyer acknowledges that it does not rely on and has not been induced to enter into this Agreement on the basis of any warranties, representations, covenants, undertakings, indemnities or other statements whatsoever, other than those expressly set out in this Agreement and the Warranty Deed.

6.3 The aggregate liability of the Seller in respect of any Claim shall not exceed 100 per cent of the Referable Amount payable to the Seller. For the purposes of this paragraph, the liability of the Seller shall be deemed to include the amount of all costs, expenses, fees and other liabilities (together with any VAT) payable by the Seller in connection with the satisfaction, settlement or determination of any such Claim.

6.4 The Management Warranties are given by the Warrantors pursuant to the Warranty Deed. The Warrantors are party to this Agreement solely for the purpose of clauses 4 ( Locked Box ) and 8 ( Restrictive Covenants ) and shall, save for in respect of their fraud or fraudulent misrepresentation, have no liability under this Agreement save for a liability for damages in the event that they are in breach of their obligations under such clauses and any liability in relation to any breach of clause 4 shall be subject to the provisions of the Warranty Deed.

6.5 The sole remedy of the Buyer for any breach of any of the Title Warranties or any other breach of this Agreement by the Seller shall be an action for damages. The Buyer shall not be entitled to rescind or terminate this Agreement in any circumstances whatsoever, other than any such right in respect of fraudulent misrepresentation.

6.6 The Seller covenants with the Buyer and each Group Company and undertakes to procure that each member of the Seller’s Group shall surrender Group Relief to the Group on the basis agreed in the Group Relief Deed and that any such surrenders, including surrenders made prior to the date of this Agreement, shall not be withdrawn or amended without the prior written consent of the Buyer and the Seller agrees to indemnify the Buyer and each Group Company for any loss caused by a breach of this clause 6.6 or any breach by a member of the Seller’s Group of the Group Relief Deed.

7 Buyer Warranties

7.1 The Buyer warrants to the Seller in the terms of the Buyer Warranties in Schedule 4 ( Buyer Warranties ).

7.2 The Buyer acknowledges that the Seller has entered into this Agreement in reliance on the Buyer Warranties.

8 Restrictive Covenants

8.1 The Covenantors severally covenant with the Buyer and each Group Company (in the case of the Seller for itself and on behalf of each of the Seller’s Covenantors and in the case of each of the Warrantors on behalf of himself alone and not on behalf of any other Covenantor) that he or it (as the case may be) and (in respect of the Seller alone) the Seller’s Covenantors shall not during the Restricted Period be concerned in any of the businesses referred to hereunder in the United Kingdom and/or Germany which is competitive with the Business as conducted at Completion, being Notemachine, Infocash, Yourcash, Raphael, Paypoint, Intercard, Euronet or any other business operated by a new entrant to the ATM market that operates in excess of 500 ATMs and which is competitive with the Business as conducted as at Completion.

8.2 Each Covenantor severally covenants with the Buyer and each Group Company that (in the case of the Seller for itself and on behalf of each of the Seller’s Covenantors and in the case of each of the

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Warrantors on behalf of himself alone and not on behalf of any other Covenantor) that he or it (as the case may be) and (in the case of the Seller alone) the Seller’s Covenantors shall not:

(a) during the Restricted Period induce or attempt to induce any person who is at Completion a Senior Employee of a Group Company to leave the employment of that Group Company; or

(b) during the Restricted Period canvass or solicit or allow a business in which they or any of them are concerned to canvass or solicit orders for goods of a similar type to those being manufactured or dealt in or for services similar to those being provided by any Group Company at Completion from any person who is at Completion or has been at any time within the twelve month period ending on Completion a customer of a Group Company

8.3 With effect from Completion, the Seller, for itself and on behalf of each of the Seller’s Covenantors, undertakes not to infringe or allow to be infringed by any member of the Seller’s Group (subject to clause 8.10) any intellectual property rights in the trade name ‘CASHZONE’ as such trade name is used by a Group Company at Completion.

8.4 For the purposes of this clause 8 :

(a) a person is concerned in a business if such person carries on the business as principal or agent or if:

(i) they are a partner, director, employee, secondee, consultant or agent in, of or to any person who carries on the business; or

(ii) they have any direct or indirect financial interest (as shareholder or otherwise) in any person who carries on the business and, in the case of a Warrantor, that Warrantor is concerned or involved with the management of that financial interest or such business; or

(iii) they are a partner, director, employee, secondee, consultant or agent in, of or to any person who has a direct or indirect financial interest (as shareholder or otherwise) in any person who carries on the business; or

(iv) disregarding any financial interest of a person in securities which are listed or traded on any generally recognised market, if that person, and any person connected with that person (the “Investors”) are together interested in securities which amount to less than 3% of the issued securities of that class and which, in all circumstances, carry less than 3% of the voting rights (if any) attaching to the issued securities of that class, and provided that none of the Investors is involved in the management of the business of the issuer of the relevant securities or of any person connected with it otherwise than by the exercise of voting rights attaching to securities;

(b) references to a Group Company include any successors in business; and

(c) subject to clause 8.10 , from Completion the Seller's Group will no longer own an ATM operations business in the United Kingdom or Germany. As such, the Buyer confirms that the business of the Seller’s Group as it is carried on at Completion shall not be deemed to be a business which is competitive with the Business, and no Seller’s Group Company shall be in breach of any covenant or undertaking in this clause by virtue of carrying on its business as it is carried on at Completion .

8.5 The Seller shall procure that certain of the Seller’s Covenantors enter into the Group Covenant Deed. For this purpose the Seller confirms that the Seller’s Covenantors that are not a party to the Group Covenant Deed are non-trading companies and the Seller shall procure that any other

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member of the Seller’s Group that becomes a trading company after the date of this Agreement but before the end of the Restricted Period shall adhere to the terms of the Group Covenant Deed by entering into an adherence agreement in an appropriate form.

8.6 Each of the restrictions in each paragraph or sub-clause above shall be enforceable independently of each of the others and its validity shall not be affected if any of the others is invalid.

8.7 If any of those restrictions is void but would be valid if some part of the restriction were deleted, the restriction in question shall apply with such modification as may be necessary to make it valid.

8.8 The Seller acknowledges that the above provisions of this clause are no more extensive than is reasonable to protect the Buyer as the purchaser of the Shares.

8.9 The covenants in this clause may with the prior written consent of the Buyer be enforced by any Group Company against the Seller under the Contracts (Rights of Third Parties) Act 1999.

8.10 Any third party who shall, at any time after Completion, acquire, directly or indirectly, a majority of the issued share capital of the Seller or of any member of the Seller’s Group shall not be bound by the covenants given by the Seller's Covenantors in relation to such third party’s own existing business to the extent it competes with the Business and none of the Seller nor any of the Seller’s Covenantors shall be required to procure compliance by such person with any provision of this clause 8 . For the purposes of this clause 8.10 , a third party shall be any person who is not at Completion either connected to the Seller or to any member of the Seller’s Group. For the avoidance of doubt the restrictions as set out in this clause 8 shall continue to apply to the Seller’s Covenantors notwithstanding such acquisition.

9 Buyer’s Undertakings

The Buyer (for itself and on behalf of each member of the Buyer's Group) undertakes that with effect from Completion, and subject to the provisions of the Seller’s Intellectual Property Licence, it will not undertakes not to infringe or allow to be infringed by any member of the Buyer’s Group any intellectual property rights in any trade name, trade marks, brand name or logo used by the Seller’s Group at Completion .

10 Release of guarantees

To the extent that they are not released on Completion, the Buyer shall and shall procure that each of the Group Companies shall, following Completion use their respective reasonable endeavours to procure the irrevocable and unconditional release in full of the Seller from all guarantees, claims, securities, indemnities or other similar obligations within a reasonable period of the Buyer becoming aware of such obligation existing at Completion and given in respect of the liabilities or obligations of any of the Group Companies (whether arising in respect of the period before or after Completion) and the Buyer agrees with the Seller for itself and on behalf of each of the Group Companies that pending such release and / or to the extent that such release is not effected it shall indemnify and keep indemnified the Seller from and against any and all claims, liabilities, damages, reasonable costs and expenses (whether arising in respect of the period before or after Completion) arising out of or in connection with such guarantees, claims, securities or indemnities.

11 Insurance

11.1 After Completion, the Buyer undertakes that it shall not, and shall procure that none of the Group Companies shall, make any notifications or claims under any insurance policy maintained by the Seller, whether the matters giving rise to such notification or claim occurred before or after Completion. The Buyer acknowledges and agrees that the Seller may, before Completion, procure that each Group Company shall provide the Seller with a written waiver of its rights to make a notification or claim under any insurance policy maintained by the Seller as set out in this clause 11.1 .

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11.2 The Buyer shall procure that any person acquiring any interest in any Group Company enters into a deed of adherence in a form reasonably satisfactory to the Seller and the Warrantors agreeing to be bound by clause 11.1 above.

11.3 If the Seller or any Group Company has made a claim before the date of this Agreement under an insurance policy maintained by the Seller or any other member of the Seller’s Group in respect of any event which caused loss or damage to a Group Company, the Seller shall or shall procure that the applicable member of the Seller’s Group shall remit any proceeds which it receives during the period from 12 months prior to the date of this Agreement up to Completion in respect of such a claim (less any deduction and withholdings required by law) to the relevant Group Company within 30 days after the Seller or such applicable member of the Seller’s Group receives the insurance proceeds. For the avoidance of doubt, the Buyer acknowledges and agrees that the Seller shall have no obligation under this Agreement to make any claim under an insurance policy maintained by it or to dispute the amount paid by the relevant insurer in respect of any claim or to pay to the Buyer any amount greater than the insurance proceeds so paid.

12 Announcements

12.1 Except to the extent otherwise expressly permitted by this Agreement, the parties shall not make any public announcement or issue a press release or respond to any enquiry from the press or other media concerning or relating to this Agreement or its subject matter or any ancillary matter.

12.2 Notwithstanding any other provision in this Agreement, either party may, after consultation with the other party whenever practicable, make or permit to be made an announcement concerning or relating to this Agreement or its subject matter or any ancillary matter if and to the extent required by:

(a) law; or

(b) any securities exchange on which either party’s securities are listed or traded; or

(c) any regulatory or governmental or other authority with relevant powers to which either party is subject or submits, whether or not the requirement has the force of law.

13 Confidentiality

13.1 The Seller acknowledges that the Buyer’s Group will be required to disclose the purchase price, historical audited financial statements and other transaction information necessary for the Buyer's Group to fulfil its disclosure obligations to the US Securities and Exchange Commission.

13.2 Each of the Seller and the Buyer hereby undertakes that it shall both during and after the term of this Agreement preserve the confidentiality of the Non-Disclosable Information, and except to the extent otherwise expressly permitted by this Agreement, not directly or indirectly reveal, report, publish, disclose or transfer or use for its own or any other purposes such Non-Disclosable Information.

13.3 Notwithstanding any other provision in this Agreement, any party to this Agreement may, after consultation with the other parties whenever practicable, disclose Non-Disclosable Information if and to the extent:

(a) required by law; or

(b) required by any securities exchange on which either party’s (or their respective group’s) securities are listed or traded; or

(c) required by any regulatory or governmental or other authority with relevant powers to which either party is subject or submits (whether or not the authority has the force of law); or

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(d) required to vest the full benefit of this Agreement in that party or to enforce any of the rights of that party in this Agreement; or

(e) required by its professional advisers, officers, employees, consultants, subcontractors or agents to provide their services (and subject always to similar duties of confidentiality); or

(f) that information is in or has come into the public domain through no fault of that party; or

(g) the other parties have given prior written consent to the disclosure; or

(h) it is necessary to obtain any relevant tax clearances from any appropriate tax authority.

13.4 Notwithstanding any other provision in this Agreement, the Seller may disclose Non-Disclosable Information to the following:

(a) any fund promoted, advised or managed by, or affiliated to Duke Street LLP; or

(b) any entity over which such fund has control; or

(d) its Affiliates;

(e) to any purchaser or bona fide potential purchaser of the all or part of the Seller’s Group, or all or a material part of its assets and / or undertaking; or

(f) the disclosure is required by a Taxing Authority

13.5 The restrictions contained in this clause 13 shall continue to apply after Completion without limit in time.

13.6 Nothing in this clause 13 shall serve to prevent the Buyer’s Group from using and continuing to use Confidential Information in the ordinary course of the Business.

14 Entire agreement

14.1 This Agreement, the Warranty Deed and the documents referred to or incorporated in this Agreement constitute the entire agreement and understanding between the parties relating to the subject matter of this Agreement and supersede and extinguish any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatsoever, whether or not in writing, between the parties in relation to the subject matter of this Agreement, the Warranty Deed and any such other document.

14.2 Each of the parties acknowledges and agrees that it has not entered into this Agreement in reliance on any statement or representation of any person (whether a party to this Agreement or not) other than as expressly incorporated in this Agreement.

14.3 Nothing in this Agreement, or in any other document referred to herein shall be read or construed as excluding any liability or remedy as a result of fraud or fraudulent misrepresentation.

14.4 Without limiting the generality of the foregoing, each of the parties irrevocably and unconditionally waives any right or remedy it may have to claim damages and/or to rescind this Agreement by reason of any misrepresentation (other than a fraudulent misrepresentation) having been made to it by any person (whether party to this Agreement or not) and upon which it has relied in entering into this Agreement.

14.5 Except as provided in clauses 14.3 and 14.4 each of the parties acknowledges and agrees that the only cause of action available to it under the terms of this Agreement shall be for breach of contract and except as provided in clauses 14.3 and 14.4 it will have no rights of rescission or termination.

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15 Cumulative rights

The rights of the Buyer under this Agreement are independent, cumulative and without prejudice to all other rights available to it whether as a matter of common law, statute, custom or otherwise.

16 Assignment and transfer

16.1 This Agreement is personal to the parties and except as provided in clause 16.2 below, no party may assign, transfer, subcontract, delegate, charge or otherwise deal in any other manner with this Agreement or any of its rights or obligations nor grant, declare, create or dispose of any right or interest in it without the prior written consent of the other party.

16.2 Notwithstanding clause 16.1 the Seller may assign, transfer, subcontract, delegate, charge or otherwise deal in any other manner with this Agreement or any of their rights or obligations or grant, declare, create or dispose of any right or interest in it to any of the following:

(a) any fund promoted, advised or managed by, or affiliated to, Duke Street LLP; or

(b) any entity over which such fund has control; or

(d) its Affiliates,

provided that the Seller has provided to the Buyer written notice reasonably promptly following the assignment specifying reasonable details as to the identity of the proposed assignee.

16.3 Any purported assignment, transfer, subcontracting, delegation, charging or dealing in contravention of this clause shall be ineffective.

16.4 Notwithstanding clause 16.1 , the Buyer may assign its rights (“Rights”) (but not its obligations) under this Agreement and the Warranty Deed:

(a) to its banks or other finance providers by way of security;

(b) to a member of the Buyer’s Group (which for these purposes only shall mean Cardtronics, Inc. and its subsidiaries) (a “Permitted Assignee”) provided that if such Permitted Assignee shall subsequently cease to be a member of the Buyer’s Group the Permitted Assignee shall assign the Rights assigned to it to the buyer or to another continuing member of the Buyer’s Group (in respect of whom this clause 16.4(b) shall apply mutatis mutandis ),

provided that the Seller and/or the Warrantors shall be under no greater obligation or liability thereby than if such assignment had never occurred and that the amount of loss or damage recoverable by the assignee shall be calculated as if that person had been originally named as the Buyer in this Agreement, the Group Relief Deed and the Warranty Deed (and, in particular, shall not exceed the sum which would, but for such assignment, have been recoverable hereunder by the Buyer in respect of the relevant fact, matter or circumstance) provided that the Buyer has provided the Seller and the Warrantors with written notice reasonably promptly following the assignment specifying reasonable details as to the identity of the proposed assignee.

17 Costs and expenses

17.1 Except as otherwise stated in this Agreement, each party shall pay its own costs and expenses in relation to the negotiation, preparation, execution, performance and implementation of this Agreement and each document referred to in it and other agreements forming part of the transaction, save that this clause shall not prejudice the right of any party to seek to recover its costs in any litigation or dispute resolution procedure which may arise out of this Agreement.

17.2 Any payment in respect of the W&I Insurance Policy in excess of the W&I Insurance Policy Premium shall be for the account of the Buyer. For the avoidance of doubt if the Buyer takes out any

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additional insurance in respect of the PWC Debt Restructuring or takes out insurance for a period of more than one year or incurs any additional cost in respect of insurance in excess of the W&I Insurance Policy Amount, any costs associated with that insurance policy will be for the account of the Buyer.

18 Interest on late payments

18.1 If a party fails to pay any sum payable by it on the due date for payment under this Agreement, it shall pay interest on the overdue sum for the period from and including the due date of payment up to the date of actual payment (after as well as before judgment) in accordance with clause 18.2 .

18.2 The interest referred to in clause 18.1 shall accrue from day to day and shall be paid on demand at the rate of 1 per cent above the base rate from time to time of Barclays Bank plc.

19 No set-off

All payments to be made under this Agreement shall be made in full without any set-off or counterclaim and free from any deduction or withholding save as may be required by law in which event such deduction or withholding shall not exceed the minimum amount which it is required to law to deduct or withhold and the payer will simultaneously pay to the payee such additional amounts as will result in the receipt by the payee of a net amount equal to the full amount which would otherwise have been receivable had no such deduction or withholding been required.

20 Effect of Completion

This Agreement shall, to the extent that it remains to be performed, continue in full force and effect notwithstanding Completion.

21 Waiver

21.1 A waiver of any right, power, privilege or remedy provided by this Agreement must be in writing and may be given subject to any conditions thought fit by the grantor. For the avoidance of doubt, any omission to exercise, or delay in exercising, any right, power, privilege or remedy provided by this Agreement shall not constitute a waiver of that or any other right, power, privilege or remedy.

21.2 The Buyer shall not be entitled to waive any right, power, privilege or remedy provided by this Agreement against one or more of the UK Warrantors without waiving the corresponding right, power, privilege or remedy waived or a waiver of any other right, power, privilege or remedy provided by this Agreement against all of the UK Warrantors.

21.3 The Buyer shall not be entitled to waive any right, power, privilege or remedy against one or more of the German Warrantors without waiving the corresponding right, power, privilege or remedy provided by this Agreement against all of the German Warrantors.

21.4 Any single or partial exercise of any right, power, privilege or remedy arising under this Agreement shall not preclude or impair any other or further exercise of that or any other right, power, privilege or remedy.

22 Variation

Any variation of this Agreement or of any of the documents referred to in it is valid only if it is in writing and signed by or on behalf of each party.

23 Severance

23.1 If any provision of this Agreement is held to be invalid or unenforceable by any judicial or other competent authority, all other provisions of this Agreement will remain in full force and effect and will not in any way be impaired.

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23.2 If any provision of this Agreement is held to be invalid or unenforceable but would be valid or enforceable if some part of the provision were deleted, or the period of the obligation reduced in time, or the range of activities or area covered, reduced in scope, the provision in question will apply with the minimum modifications necessary to make it valid and enforceable.

24 Notices

24.1 Any communication to be given in connection with this Agreement shall be in writing in English except where expressly provided otherwise and shall either be delivered by hand or sent by first class prepaid post or fax. Delivery by courier shall be regarded as delivery by hand.

24.2 Such communication shall be sent to the address of the relevant party referred to in this Agreement or the fax number set out below or to such other address or fax number as may previously have been communicated to the other party in accordance with this clause 24.2 and clause 24.5 . Each communication shall be marked for the attention of the relevant person.


Party	Fax number	For the attention of:
Seller and a copy to SJ Berwin LLP, 10 Queen Street Place, London EC4R 1BE	+ 353 1207 6039 +44 (0)20 7111 2000	Julian Rothwell Tim Wright
Warrantors	N/A	Each Warrantor as set out at Schedule 1
Buyer	+001 832 308 4761	Chris Brewster Mike Keller
and a copy to Squire Sanders (UK) LLP, Trinity Court, 16 John Dalton Street, Manchester M60 8HS	+44 870 460 2753	Jane Haxby

24.3 A communication shall be deemed to have been served:

(a) if delivered by hand at the address referred to in clause 24.2 , at the time of delivery;

(b) if sent by first class prepaid post to the address referred to in clause 24.2 , at the expiration of two clear days after the time of posting; and

If a communication would otherwise be deemed to have been delivered outside normal business hours (being 9:30 a.m. to 5:30 p.m. on a Business Day) in the time zone of the territory of the recipient under the preceding provisions of this clause 24.3 , it shall be deemed to have been delivered at the next opening of such business hours in the territory of the recipient.

24.4 In proving service of the communication, it shall be sufficient to show that delivery by hand was made or that the envelope containing the communication was properly addressed and posted as a first class prepaid letter or that the fax was despatched and a confirmatory transmission report received, whether or not opened or read by the recipient.

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24.5 A party may notify the other parties to this Agreement of a change to its name, relevant person, address or fax number for the purposes of clause 24.2 provided that such notification shall only be effective on:

(a) the date specified in the notification as the date on which the change is to take place; or

(b) if no date is specified or the date specified is less than five clear Business Days after the date on which notice is deemed to have been served, the date falling five clear Business Days after notice of any such change is deemed to have been given.

24.6 For the avoidance of doubt (and unless otherwise expressly agreed by the recipient), any Notice shall not be validly served if sent by electronic mail.

24.7 For the avoidance of doubt, the parties agree that the provisions of clauses 24.1, 24.2, 24.3, 24.4, 24.5 and 24.6 shall not apply in relation to the service of any claim form, application notice, order, judgment or other document relating to or in connection with any proceeding, suit or action arising out of or in connection with this Agreement.

24.8 For the purposes of this Agreement any communication to be made or given by the Buyer to the Warrantors or any of them shall be made to each Warrantor individually and any communication to be made or given by any Warrantor(s) to any other party shall only be made or given to such party by the Warrantor(s) himself (themselves).

25 Counterparts

This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all the counterparts shall together constitute one and the same agreement.

26 Governing language

26.1 This Agreement is in English.

26.2 If this Agreement is translated into any language other than English, the English language text shall prevail in any event.

26.3 Each notice, instrument, certificate or other communication to be given by one party to another in this Agreement or in connection with this Agreement shall be in English (being the language of negotiation of this Agreement) and if such notice, instrument, certificate or other communication or this Agreement is translated into any other language, the English language text shall prevail.

27 Governing law

This Agreement is governed by and is to be construed in accordance with English law.

28 Jurisdiction

The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this Agreement.

29 Interpretation

29.1 The clause and paragraph headings and the table of contents used in this Agreement are inserted for ease of reference only and shall not affect construction.

29.2 References in this Agreement and the Schedules to the parties, the Introduction, Schedules and clauses are references respectively to the parties, the Introduction and Schedules to and clauses of this Agreement.

29.3 References to documents “in the agreed form” are to documents in terms agreed between the parties prior to execution of this Agreement and initialled by them or on their behalf.

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29.4 References to “writing” or “written” includes any other non-transitory form of visible reproduction of words.

29.5 References to times of the day are to that time in London and references to a day are to a period of 24 hours running from midnight.

29.6 References to any English legal term or legal concept shall in respect of any jurisdiction other than England be deemed to include that which most approximates in that jurisdiction to such English legal term or legal concept.

29.7 References to persons shall include bodies corporate, unincorporated associations and partnerships, in each case whether or not having a separate legal personality.

29.8 References to the word “include” or “including” (or any similar term) are not to be construed as implying any limitation and general words introduced by the word “other” (or any similar term) shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things.

29.9 Save where the context specifically requires otherwise, words importing one gender shall be treated as importing any gender, words importing individuals shall be treated as importing corporations and vice versa, words importing the singular shall be treated as importing the plural and vice versa, and words importing the whole shall be treated as including a reference to any part thereof.

29.10 References to statutory provisions, enactments or EC Directives shall include references to any amendment, modification, extension, consolidation, replacement or re-enactment of any such provision, enactment or Directive (whether before or after the date of this Agreement), to any previous enactment which has been replaced or amended and to any regulation, instrument or order or other subordinate legislation made under such provision, enactment or Directive, unless any such change imposes upon any party any liabilities or obligations which are more onerous than as at the date of this Agreement.

29.11 A company or other entity shall be a “holding company” for the purposes of this Agreement if it falls within either the meaning attributed to that term in section 1159 and Schedule 6 Companies Act 2006 or the meaning attributed to the term “parent undertaking” in section 1162 and Schedule 7 of such Act, and a company or other entity shall be a “subsidiary” for the purposes of this Agreement if it falls within any of the meanings attributed to a “subsidiary” in section 1159 and Schedule 6 Companies Act 2006 or any of the meanings attributed to the term “subsidiary undertaking” in section 1162 and Schedule 7 of such Act, and the terms “subsidiaries” and “holding companies” are to be construed accordingly, save that an undertaking shall also be treated, for the purposes only of the membership requirement contained in subsections 1162(2)(b) and (d) Companies Act 2006, as a member of another undertaking if any shares in that other undertaking are held by a person (or its nominee) by way of security or in connection with the taking of security granted by the undertaking or any of its subsidiary undertakings.

29.12 Section 1122 of the Corporation Taxes Act 2010 is to apply to determine whether one person is connected with another for the purposes of this Agreement.

30 Rights of third parties

30.1 Except as otherwise expressly stated, this Agreement does not confer any rights on any person or party (other than the parties to this Agreement) pursuant to the Contracts (Rights of Third Parties) Act 1999.

30.2 Where a term of this Agreement is expressed to be for the benefit of or confers a right on a member of the Buyer’s Group, other than the Buyer (the “Third Party Rights”), such rights are enforceable by each such member of the Buyer’s Group in accordance with the Contracts (Rights of Third Parties) Act 1999 for so long as it shall remain a member of the Buyer’s Group.

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30.3 The Buyer may, at its discretion exercise the Third Party Rights on behalf of any relevant member of the Buyer’s Group as if the Buyer were such person save that no consent of a third party will be required to vary or waive the terms of this Agreement.

31 Section 338(g) Internal Revenue Code Election

Nothing in this Agreement (nor any other agreement) shall in any way prohibit Cardtronics, Inc. and/or its Affiliates from making an election pursuant to Section 338(g) of the Internal Revenue Code of 1986 and the Treasury Regulations as defined and promulgated thereunder, with respect to the acquisition of the Group by the Buyer.

32 Execution

This Agreement is executed and delivered by the parties on the date at the beginning of this Agreement.

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SIGNATURES


	Executed by PAYZONE VENTURES LIMITED


	signature	/s/ Mike Maloney


	print name	Mike Maloney
	in the presence of:


	signature of witness	/s/ A Creed


	print name of witness	Adam Creed

	Address	10 Queen Street Place
		London
		EC4R 1BE


	Occupation	Solicitor

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	Executed by CARDTRONICS EUROPE LIMITED


	signature	/s/ Michael E. Keller


	print name	Michael E. Keller
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 21 -


	Executed by JONATHAN SIMPSON-DENT


	signature	/s/ Jonathan Simpson-Dent


	print name	Jonathan Simpson-Dent
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 22 -


	Executed by RIKKI DINSMORE


	signature	/s/ Rikki Dinsmore


	print name	Rikki Dinsmore
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 23 -


	Executed MARK EDWARDS


	signature	/s/ Rikki Dinsmore


	print name	Rikki Dinsmore as attorney for Mark Edwards
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 24 -


	Executed by ANDREAS RAABE


	signature	/s/ Tim Halford


	print name	Tim Halford as attorney for Andreas Raabe
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 25 -


	Executed by ALASTAIR MAYNE


	signature	/s/ Alastair Mayne


	print name	Alastair Mayne
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 26 -


	Executed by TIM HALFORD


	signature	/s/ Tim Halford


	print name	Tim Halford
	in the presence of:


	signature of witness	/s/ S. Wotherspoon


	print name of witness	S. Wotherspoon

	Address	7 Devonshire Square
		London
		EC2M 4YH


	Occupation	Solicitor

- 27 -

Exhibit 3 1 .1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF CARDTRONICS, INC.

PURSUANT TO RULE 13a-14(a) UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Steven A. Rathgaber , certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (this “report”) of Cardtronics, 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: November 4 , 2013	/s/ Steven A. Rathgaber
	Steven A. Rathgaber
	Chief Executive Officer

Exhibit 3 1 . 2

CERTIFICATION OF CHIEF FINANCIAL OFFICER OF CARDTRONICS, INC.

PURSUANT TO RULE 13a-14(a) UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, J. Chris Brewster , certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (this “report”) of Cardtronics, Inc.;

(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: November 4 , 2013	/s/ J. Chris Brewster
	J. Chris Brewster
	Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND 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 on Form 10-Q of Cardtronics, Inc. (“Cardtronics”) for the period ended September 30 , 2013 as filed with the Securities and Exchange Commission (the “SEC”) on the date hereof (the “Report”), the undersigned each hereby certifies, pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002:

(1)	The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchan ge Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cardtronics.

Date: November 4 , 2013	/s/ Steven A. Rathgaber
	Steven A. Rathgaber
	Chief Executive Officer

Date: November 4 , 2013	/s/ J. Chris Brewster
	J. Chris Brewster
	Chief Financial Officer


CARDTRONICS, INC.

TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	1
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012	2
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012	3
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012	4
	Notes to Consolidated Financial Statements	5
Cautionary Statement Regarding Forward-Looking Statements		30
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	52

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 6.	Exhibits	55
	Signatures	56

When we refer to “us,” “we,” “our,” or “ours,” we are describing Cardtronics, Inc. and/or our subsidiaries.