Cardtronics plc (Form: 10-Q, Received: 08/01/2019 17:02:27)

Notional Amounts

AUS $

Weighted Average

Fixed Rate

(In millions)

July 1, 2019 – December 31, 2019

January 1, 2020 – December 31, 2020

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)

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

	For the quarterly period ended	June 30, 2019

or

☐	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: 001-37820

________________________________________

Cardtronics plc

(Exact name of registrant as specified in its charter)



England and Wales	98-1304627
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)



2050 West Sam Houston Parkway South, Suite 1300		77042
Houston	Texas	(Zip Code)
(Address of principal executive offices)

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, nominal value $0.01 per share	CATM	NASDAQ Stock Market

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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☑ No ☐

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



Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Shares outstanding as of July 31, 2019: 45,297,781 Ordinary shares, nominal value $0.01 per share.

Table of Contents

CARDTRONICS PLC

TABLE OF CONTENTS



		Page

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018	3
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018	4
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2019 and 2018	5
	Unaudited Consolidated Statements of Shareholders' Equity for the Three and Six Months Ended June 30, 2019 and 2018	6
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
	Cautionary Statement Regarding Forward-Looking Statements	47
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	74
Item 4.	Controls and Procedures	77

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	78
Item 1A.	Risk Factors	78
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 3.	Defaults Upon Senior Securities	78
Item 4.	Mine Safety Disclosures	78
Item 5.	Other Information	78
Item 6.	Exhibits	79
	Signatures	80

When we refer to “us,” “we,” “our,” “ours,” “the Company,” or “Cardtronics” we are describing Cardtronics plc and/or our subsidiaries, unless the context indicates otherwise.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CARDTRONICS PLC

CONSOLIDATED BALANCE SHEETS

(In thousands, excluding share and per share amounts)



	June 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	33,495		$	39,940
Accounts and notes receivable, net of allowance for doubtful accounts of $3,873 and $3,005 as of June 30, 2019 and December 31, 2018, respectively	85,707			75,643
Inventory, net	9,049			11,392
Restricted cash	86,431			155,470
Prepaid expenses, deferred costs, and other current assets	91,090			84,386
Total current assets	305,772			366,831
Property and equipment, net of accumulated depreciation of $464,260 and $417,151 as of June 30, 2019 and December 31, 2018, respectively	455,757			460,187
Intangible assets, net	136,673			150,847
Goodwill	753,859			749,144
Operating lease assets	81,355			—
Deferred tax asset, net	11,544			8,658
Prepaid expenses, deferred costs, and other noncurrent assets	33,049			51,677
Total assets	$	1,778,009		$	1,787,344

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of other long-term liabilities	$	52,347		$	20,266
Accounts payable	34,568			39,310
Accrued liabilities	331,233			369,160
Total current liabilities	418,148			428,736

Long-term debt	778,551			818,485
Asset retirement obligations	54,227			54,413
Noncurrent operating lease liabilities	73,246			—
Deferred tax liability, net	37,325			41,198
Other long-term liabilities	54,639			67,740
Total liabilities	1,416,136			1,410,572

Commitments and contingencies (See Note 15)

Shareholders' equity:
Ordinary shares, $0.01 nominal value; 45,644,833 and 46,134,381 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	456			461
Additional paid-in capital	330,131			327,009
Accumulated other comprehensive loss, net	(83,810		)	(66,877		)
Retained earnings	115,197			116,276
Total parent shareholders' equity	361,974			376,869
Noncontrolling interests	(101		)	(97		)
Total shareholders’ equity	361,873			376,772
Total liabilities and shareholders’ equity	$	1,778,009		$	1,787,344

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, excluding share and per share amounts)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues:
ATM operating revenues	$	323,081		$	329,221		$	625,683		$	648,952
ATM product sales and other revenues	17,740			11,766			33,408			28,219
Total revenues	340,821			340,987			659,091			677,171
Cost of revenues:
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below. See Note 1(c))	208,081			215,353			414,239			430,843
Cost of ATM product sales and other revenues	14,301			10,086			26,226			22,848
Total cost of revenues	222,382			225,439			440,465			453,691
Operating expenses:
Selling, general, and administrative expenses	41,995			40,928			85,655			82,668
Restructuring expenses	3,463			2,063			3,463			4,476
Acquisition related expenses	—			913			—			2,633
Depreciation and accretion expense	33,205			31,764			66,178			62,806
Amortization of intangible assets	12,591			13,498			25,003			27,269
Loss on disposal and impairment of assets	1,496			9,697			2,464			15,117
Total operating expenses	92,750			98,863			182,763			194,969
Income from operations	25,689			16,685			35,863			28,511
Other expenses:
Interest expense, net	6,871			9,159			13,514			18,333
Amortization of deferred financing costs and note discount	3,330			3,355			6,622			6,663
Other expense (income)	1,456			(2,187		)	(5,751		)	(27		)
Total other expenses	11,657			10,327			14,385			24,969
Income before income taxes	14,032			6,358			21,478			3,542
Income tax expense	3,565			2,586			6,694			2,555
Net income	10,467			3,772			14,784			987
Net (loss) income attributable to noncontrolling interests	(4		)	5			(6		)	(12		)
Net income attributable to controlling interests and available to common shareholders	$	10,471		$	3,767		$	14,790		$	999

Net income per common share – basic	$	0.23		$	0.08		$	0.32		$	0.02
Net income per common share – diluted	$	0.22		$	0.08		$	0.32		$	0.02

Weighted average shares outstanding – basic	46,180,161			45,927,732			46,201,842			45,880,661
Weighted average shares outstanding – diluted	46,601,488			46,378,813			46,620,147			46,357,776

The accompanying notes are an integral part of these consolidated financial statements.

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CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income	$	10,467		$	3,772		$	14,784		$	987
Unrealized (loss) gain on interest rate swap contracts, net of deferred income tax (benefit) expense of ($4,082) and $833 for the three months ended June 30, 2019 and 2018, respectively, and ($7,277) and $5,976 for the six months ended June 30, 2019 and 2018, respectively.	(13,606		)	2,030			(26,309		)	19,391
Foreign currency translation adjustments, net of deferred income tax (benefit) expense of ($162) and $225 for the three months ended June 30, 2019 and 2018, respectively, and ($242) and $249 for the six months ended June 30, 2019 and 2018, respectively.	4,274			(30,804		)	9,376			(23,180		)
Other comprehensive loss	(9,332		)	(28,774		)	(16,933		)	(3,789		)
Total comprehensive income (loss)	1,135			(25,002		)	(2,149		)	(2,802		)
Less: Comprehensive (loss) income attributable to noncontrolling interests	(5		)	10			(5		)	(9		)
Comprehensive income (loss) attributable to controlling interests	$	1,140		$	(25,012	)	$	(2,144	)	$	(2,793	)

The accompanying notes are an integral part of these consolidated financial statements.

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CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)



	Three Months Ended June 30, 2019
	Common Shares					Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings			Noncontrolling Interests
	Shares		Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings			Noncontrolling Interests			Total
Balance as of March 31, 2019	46,308		$	463		$	329,712		$	(74,478	)	$	120,229		$	(97	)	$	375,829
Issuance of common shares for share-based compensation, net of forfeitures	15		—			—			—			—			—			—
Share-based compensation expense	—		—			5,250			—			—			—			5,250
Tax payments related to share-based compensation	—		—			(241		)	—			—			—			(241		)
Repurchase of common shares	(678	)	(7		)	(4,590		)	—			(15,503		)	—			(20,100		)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $(4,082)	—		—			—			(13,606		)	—			—			(13,606		)
Net income attributable to controlling interests	—		—			—			—			10,471			—			10,471
Net loss attributable to noncontrolling interests	—		—			—			—			—			(4		)	(4		)
Foreign currency translation adjustments, net of deferred income tax benefit of $(162)	—		—			—			4,274			—			—			4,274
Balance as of June 30, 2019	45,645		$	456		$	330,131		$	(83,810	)	$	115,197		$	(101	)	$	361,873



	Three Months Ended June 30, 2018
	Common Shares			Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings		Noncontrolling Interests
	Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings		Noncontrolling Interests			Total
Balance as of March 31, 2018	45,921	$	459	$	316,996		$	(8,610	)	$	109,835	$	(97	)	$	418,583
Share-based compensation expense	—	—		3,513			—			—		—			3,513
Tax payments related to share-based compensation	—	—		(126		)	—			—		—			(126		)
Unrealized gain on interest rate swap and foreign currency forward contracts, net of deferred income tax expense of $833	—	—		—			2,030			—		—			2,030
Net income attributable to controlling interests	—	—		—			—			3,767		—			3,767
Net income attributable to noncontrolling interests	—	—		—			—			—		5			5
Foreign currency translation adjustments, net of deferred income tax expense of $225	—	—		—			(30,804		)	—		3			(30,801		)
Balance as of June 30, 2018	45,921	$	459	$	320,383		$	(37,384	)	$	113,602	$	(89	)	$	396,971

The accompanying notes are an integral part of these consolidated financial statements.

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CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)



	Six Months Ended June 30, 2019
	Common Shares					Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings			Noncontrolling Interests
	Shares		Amount															Total
Balance as of December 31, 2018	46,134		$	461		$	327,009		$	(66,877	)	$	116,276		$	(97	)	$	376,772
Cumulative effect of change in accounting principle	—		—			—			366			(366		)	—			—
Issuance of common shares for share-based compensation, net of forfeitures	189		2			—			—			—			—			2
Share-based compensation expense	—		—			9,734			—			—			—			9,734
Tax payments related to share-based compensation	—		—			(2,022		)	—			—			—			(2,022		)
Repurchase of common shares	(678	)	(7		)	(4,590		)	—			(15,503		)	—			(20,100		)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $(7,277)	—		—			—			(26,675		)	—			—			(26,675		)
Net income attributable to controlling interests	—		—			—			—			14,790			—			14,790
Net loss attributable to noncontrolling interests	—		—			—			—			—			(6		)	(6		)
Foreign currency translation adjustments, net of deferred income tax benefit of $(242)	—		—			—			9,376			—			2			9,378
Balance as of June 30, 2019	45,645		$	456		$	330,131		$	(83,810	)	$	115,197		$	(101	)	$	361,873



	Six Months Ended June 30, 2018
	Common Shares			Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings		Noncontrolling Interests
	Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss, Net			Retained Earnings		Noncontrolling Interests			Total
Balance as of December 31, 2017	45,696	$	457	$	316,940		$	(33,595	)	$	106,670	$	(79	)	$	390,393
Issuance of common shares for share-based compensation, net of forfeitures	225	2		—			—			—		—			2
Share-based compensation expense	—	—		5,958			—			—		—			5,958
Tax payments related to share-based compensation	—	—		(2,506		)	—			—		—			(2,506		)
Unrealized gain on interest rate swap and foreign currency forward contracts, net of deferred income tax expense of $5,976	—	—		—			19,391			—		—			19,391
Net income attributable to controlling interests	—	—		—			—			999		—			999
Net loss attributable to noncontrolling interests	—	—		—			—			—		(12		)	(12		)
Deferred sales commission	—	—		—			—			5,933		—			5,933
Foreign currency translation adjustments, net of deferred income tax expense of $249	—	—		(9		)	(23,180		)	—		2			(23,187		)
Balance as of June 30, 2018	45,921	$	459	$	320,383		$	(37,384	)	$	113,602	$	(89	)	$	396,971

The accompanying notes are an integral part of these consolidated financial statements.

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CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income	$	14,784		$	987
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, accretion, and amortization of intangible assets	91,181			90,075
Amortization of deferred financing costs and note discount	6,622			6,663
Share-based compensation expense	9,734			5,958
Deferred income tax (benefit)	759			(2,344		)
Loss on disposal and impairment of assets	2,464			15,117
Other reserves and non-cash items	(5,258		)	413
Changes in assets and liabilities:
(Increase) decrease in accounts and notes receivable, net	(10,617		)	16,398
Increase in prepaid expenses, deferred costs, and other current assets	(10,018		)	(6,219		)
Increase in inventory, net	(790		)	(2,055		)
Decrease in other assets	3,595			2,704
(Decrease) increase in accounts payable	(5,500		)	1,888
(Decrease) increase in restricted cash liabilities	(70,354		)	25,348
Increase (decrease) in accrued liabilities	32,008			(34,658		)
Decrease in other liabilities	(3,380		)	(10,500		)
Net cash provided by operating activities	55,230			109,775

Cash flows from investing activities:
Additions to property and equipment	(55,053		)	(46,682		)
Acquisitions, net of cash acquired	(9,100		)	—
Net cash used in investing activities	(64,153		)	(46,682		)

Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility	290,510			345,510
Repayments of borrowings under revolving credit facility	(336,322		)	(390,990		)
Tax payments related to share-based compensation	(2,022		)	(2,506		)
Proceeds from exercises of stock options	2			—
Repurchase of common shares	(20,100		)	—
Net cash used in financing activities	(67,932		)	(47,986		)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	1,371			(1,558		)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(75,484		)	13,549

Cash, cash equivalents, and restricted cash as of beginning of period	195,410			99,817
Cash, cash equivalents, and restricted cash as of end of period	$	119,926		$	113,366

Supplemental disclosure of cash flow information:
Cash paid for interest	$	12,085		$	18,523
Cash paid (refunded) for income taxes	$	2,950		$	(3,941	)

The accompanying notes are an integral part of these consolidated financial statements.

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CARDTRONICS PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) General and Basis of Presentation

(a) General

Cardtronics plc, together with its wholly and majority-owned subsidiaries (collectively, the “Company”), provides convenient automated financial related services to consumers through its global network of automated teller machines and multi-function financial services kiosks (collectively referred to as “ATMs”). As of June 30, 2019, Cardtronics was the world’s largest ATM owner/operator, providing services to over 290,000 ATMs globally, 26% of which are Company-owned.

During the three months ended June 30, 2019, approximately 62% of the Company’s revenues were derived from operations in North America (including its ATM operations in the United States ("U.S."), Canada, and Mexico), approximately 30% of the Company’s revenues were derived from operations in Europe and Africa (including its ATM operations in the United Kingdom ("U.K."), Ireland, Germany, Spain, and South Africa), and approximately 8% of the Company’s revenues were derived from the Company’s operations in Australia and New Zealand. As of June 30, 2019, the Company provided processing only services or various forms of managed services solutions to approximately 204,000 ATMs. Under a managed services arrangement, retailers, financial institutions, and ATM distributors rely on Cardtronics to handle some or all of the operational aspects associated with operating and maintaining ATMs, typically in exchange for a monthly service fee, fee per transaction, or fee per service provided.

Through its network, the Company delivers financial related services to cardholders and provides ATM management and ATM equipment-related services (typically under multi-year contracts) to large retail merchants, smaller retailers, and operators of facilities such as shopping malls, airports, and train stations. In doing so, the Company provides its retail partners with a compelling automated solution that helps attract and retain customers, and in turn, increases the likelihood that the ATMs placed at their facilities will be utilized. The Company also owns and operates electronic funds transfer (“EFT”) transaction processing platforms that provide transaction processing services to its network of ATMs, as well as to other ATMs under managed services arrangements. Additionally, the Company provides processing services for issuers of debit cards.

In addition to its retail merchant relationships, the Company also partners with leading financial institutions to brand selected ATMs within its network. These financial institutions include BBVA Compass Bancshares, Inc., Citibank, N.A., Citizens Financial Group, Inc., Cullen/Frost Bankers, Inc., Discover Bank, PNC Bank, N.A., Santander Bank, N.A., and TD Bank, N.A. in the U.S.; BMO Bank of Montreal, the Bank of Nova Scotia, Canadian Imperial Bank Commerce, and TD Bank in Canada; Deutsche Post Bank in Germany; ING Group in Spain; Capitec Bank in South Africa, and the Bank of Queensland Limited and HSBC Holdings plc in Australia. In Mexico, the Company partners with Scotiabank and Banco Multiva. As of June 30, 2019, approximately 20,000 of the Company’s ATMs were under contract with approximately 500 financial institutions to place their logos on the ATMs and to provide convenient surcharge-free access for their banking customers.

The Company owns and operates the Allpoint network (“Allpoint”), the largest surcharge-free ATM network (based on the number of participating ATMs). Allpoint, which has approximately 55,000 participating ATMs, provides surcharge-free ATM access to approximately 1,200 participating credit unions, banks, and stored-value debit card issuers. For participants, Allpoint provides scale, density, and convenience of surcharge-free ATMs that surpasses the largest banks in the U.S. Allpoint earns either a fixed monthly fee per cardholder or a fixed fee per transaction that is paid by the participants. Allpoint includes a majority of the Company’s ATMs in the U.S. and certain ATMs in the U.K., Canada, Mexico, and Australia. Allpoint also provides services to organizations that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, including general purpose, payroll, and electronic benefits transfer cards. Under these programs, the issuing organizations pay Allpoint a fee per issued stored-value debit card or per transaction in return for allowing the users of those cards surcharge-free access to Allpoint’s participating ATM network.

The Company’s revenues are generally recurring in nature, and historically have been derived primarily from convenience transaction fees, which are paid by cardholders, as well as other transaction-based fees, including interchange fees, which are paid by the cardholder’s financial institution for the use of the ATMs serving their customers and connectivity to the applicable EFT network that transmits data between the ATM and the cardholder’s financial institution. Other revenue sources include: (i) fees from financial institutions that participate in Allpoint, (ii) fees for bank-branding ATMs and providing financial institution cardholders with surcharge-free access, (iii) revenues earned by providing managed services (including transaction processing services) solutions to retailers and financial institutions, (iv) fees earned from foreign currency exchange transactions at the ATM, known as dynamic currency conversion, and (v) revenues from the sale of ATMs and ATM-related equipment and other ancillary services.

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(b) 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 U.S. Securities and Exchange Commission (“SEC”) applicable to interim financial information. As 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 U.S. (“U.S. GAAP” or “GAAP”), although the Company believes that the disclosures are adequate to make the information not misleading. This Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”), which includes a summary of the Company’s significant accounting policies and other disclosures.

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 six months ended June 30, 2019 and 2018 are not necessarily indicative of results of operations that may be expected for any other interim period or for the full fiscal year.

The unaudited interim financial statements include the accounts of the Company. All material intercompany accounts and transactions have been eliminated in consolidation. The Company owns a majority (95.7%) interest in, and realizes a majority of the earnings and/or losses of, Cardtronics Mexico, S.A. de C.V., thus this entity is reflected as a consolidated subsidiary in the financial statements, with the remaining ownership interests not held by the Company being reflected as noncontrolling interests.

The preparation of the unaudited interim financial statements to conform 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 this Form 10-Q 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.

The Company presents the Cost of ATM operating revenues in the accompanying Consolidated Statements of Operations exclusive of depreciation, accretion, and amortization of intangible assets related to ATMs and ATM-related assets.

The following table reflects the amounts excluded from the Cost of ATM operating revenues line in the accompanying Consolidated Statements of Operations for the periods presented:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Depreciation and accretion expenses related to ATMs and ATM-related assets	$	25,384	$	23,037	$	49,991	$	46,412
Amortization of intangible assets	12,591		13,498		25,003		27,269
Total depreciation, accretion, and amortization of intangible assets excluded from Cost of ATM operating revenues	$	37,975	$	36,535	$	74,994	$	73,681

(d) Restructuring Expenses

During 2017 and 2018, the Company implemented a global corporate reorganization and cost reduction initiative (the "2017 and 2018 Restructuring Plan”), intended to improve its cost structure and operating efficiency. The 2017 and 2018 Restructuring Plan included workforce reductions, facilities closures, contract terminations, and other cost reduction measures. During the three and six months ended June 30, 2018, the Company incurred pre-tax charges of $2.1 million and $4.5 million, respectively, related to the 2017 and 2018 Restructuring Plan, primarily consisting of employee severance.

During the three and six months ended June 30, 2019, the Company incurred $3.5 million of pre-tax charges primarily consisting of professional fees, employee severance costs, and facility costs related to a planned reorganization (the "2019 Restructuring Plan").

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The following table reflects the amounts recorded in the Restructuring expenses line in the accompanying Consolidated Statements of Operations for the periods presented:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
North America	$	213	$	1,073	$	213	$	2,130
Europe & Africa	400		495		400		1,176
Corporate	2,850		495		2,850		1,170
Total restructuring expenses	$	3,463	$	2,063	$	3,463	$	4,476

As of June 30, 2019, the following tables reflect unpaid professional fees, employee severance costs, and facility costs. These amounts are presented within the Accrued liabilities line item in the accompanying Consolidated Balance Sheets.



	As of June 30, 2019
	North America		Europe & Africa		Corporate		Total
	(In thousands)
Accrued liabilities	$	—	$	77	$	877	$	954

The changes in the Company’s restructuring liabilities consisted of the following:



	(In thousands)
Restructuring liabilities as of December 31, 2018	$	1,531
Restructuring expenses	3,463
Payments	(4,040		)
Restructuring liabilities as of June 30, 2019	$	954

(e) Cash, Cash Equivalents, and Restricted Cash

For purposes of reporting financial condition, cash and cash equivalents include cash in bank and short-term deposit accounts. Additionally, the Company maintains cash on deposit with banks that is pledged for a particular use or restricted to support a liability. These balances are recorded in Restricted cash and/or Prepaid expenses, deferred costs, and other noncurrent assets lines in the accompanying Consolidated Balance Sheets based on when the Company expects this cash to be paid. Current restricted cash primarily consists of amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers. Restricted cash in current and noncurrent assets are offset by corresponding liability balances in the Accrued liabilities line in the accompanying Consolidated Balance Sheets. The changes in the settlement liabilities corresponding to the changes in the balance of restricted cash during the six month period ended June 30, 2019 and 2018 are presented in the Statements of Cash Flows within the (Decrease) increase in restricted cash liabilities line.

The following table provides a reconciliation of the ending cash, cash equivalents, and restricted cash balances as of June 30, 2019 and 2018, corresponding with the balances in the accompanying Consolidated Statements of Cash Flows.



	June 30,
	2019		2018
	(In thousands)
Cash and cash equivalents	$	33,495	$	40,252
Current and long-term restricted cash	86,431		73,114
Total cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows	$	119,926	$	113,366

The June 30, 2018 balance includes approximately $0.1 million classified in Prepaid expenses, deferred costs, and other noncurrent assets.

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(f) Inventory, net

The Company’s inventory is determined using the average cost method. The Company periodically assesses its inventory, and as necessary, adjusts the carrying values to the lower of cost or net realizable value.

The following table reflects the Company’s primary inventory components:



	June 30, 2019			December 31, 2018
	(In thousands)
ATMs	$	2,651		$	1,990
ATM spare parts and supplies	6,568			9,572
Total inventory	9,219			11,562
Less: Inventory reserves	(170		)	(170		)
Inventory, net	$	9,049		$	11,392

(g) Acquisition

In May 2019, the Company acquired ATM processing contracts for approximately 62,000 ATMs.

(2) New Accounting Pronouncements

Adoption of New Accounting Pronouncements

Lease Accounting. The Company adopted Accounting Standards Codification Topic 842, Leases (the “Lease Standard”) as of January 1, 2019, using the modified retrospective approach and using the effective date as the date of initial application. Consequently, financial information for dates and periods before January 1, 2019 have not been updated or recasted. In addition, the Company elected the practical expedients permitted under the transition guidance within the Lease Standard, which allowed the Company to carry forward prior conclusions about lease identification, lease classification, and initial direct costs. In accordance with the Company's accounting policy, the Company elected not to exclude short-term leases for any of its vehicle and equipment leases, as the lease terms associated with our operating leases are routinely longer than 12 months. In addition, the Company elected not to separate lease and non-lease components for its ATM placement agreements that contain fixed payments and are deemed to contain an operating lease under the Lease Standard.

The Company’s adoption of ASC 842 resulted in the recognition of operating lease assets and liabilities of approximately $85 million and $95 million, respectively, as well as the derecognition of certain prepaid and deferred lease balances upon adoption. Upon adoption, this guidance had no impact on the Company's consolidated income from operations, net income, or cash flows.

Hedge Accounting. The Company adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12” or the “Hedging Standard”) as of January 1, 2019, using the modified retrospective transition approach, which requires the Company to account for ASU 2017-12 as of the date of adoption with any retrospective adjustments applicable to prior periods included as a cumulative-effect adjustment to accumulated other comprehensive loss and retained earnings. ASU 2017-12 amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. Upon adoption, this guidance had no impact on the Company's consolidated income from operations, net income, or cash flows.

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Upon adoption, the Lease Standard and the Hedging Standard had the following impact on the Company’s consolidated statement of financial position:



	December 31, 2018 As Reported			ASC Topic 842 (Leases)			ASU 2017-12 (Hedging)			December 31, 2018 As Adjusted
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	39,940		$	—		$	—		$	39,940
Accounts and notes receivable, net	75,643			—			—			75,643
Inventory, net	11,392			—			—			11,392
Restricted cash	155,470			—			—			155,470
Prepaid expenses, deferred costs, and other current assets	84,386			3,483			—			87,869
Total current assets	366,831			3,483			—			370,314
Property and equipment, net of accumulated depreciation	460,187			—			—			460,187
Intangible assets, net	150,847			—			—			150,847
Goodwill	749,144			—			—			749,144
Operating lease assets	—			85,068			—			85,068
Deferred tax asset, net	8,658			—			—			8,658
Prepaid expenses, deferred costs, and other noncurrent assets	51,677			—			—			51,677
Total assets	$	1,787,344		$	88,551		$	—		$	1,875,895

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of other long-term liabilities	$	20,266		$	20,602		$	—		$	40,868
Accounts payable	39,310			—			—			39,310
Accrued liabilities	369,160			(447		)	—			368,713
Total current liabilities	428,736			20,155			—			448,891

Long-term debt	818,485			—			—			818,485
Asset retirement obligations	54,413			—			—			54,413
Noncurrent operating lease liabilities	—			74,746			—			74,746
Deferred tax liability, net	41,198			—			—			41,198
Other long-term liabilities	67,740			(6,350		)	—			61,390
Total liabilities	1,410,572			88,551			—			1,499,123

Commitments and contingencies

Shareholders' equity:
Ordinary shares	461			—			—			461
Additional paid-in capital	327,009			—			—			327,009
Accumulated other comprehensive loss, net	(66,877		)	—			366			(66,511		)
Retained earnings	116,276			—			(366		)	115,910
Total parent shareholders' equity	376,869			—			—			376,869
Noncontrolling interests	(97		)	—			—			(97		)
Total shareholders’ equity	376,772			—			—			376,772
Total liabilities and shareholders’ equity	$	1,787,344		$	88,551		$	—		$	1,875,895

Accounting Pronouncements Issued But Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This pronouncement, along with the ASUs issued to clarify certain provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net

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presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods, beginning after December 15, 2019 and the Company plans to adopt this guidance effective January 1, 2020. We are currently evaluating the adoption of this guidance but do not expect it to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance eliminates Step 2 from the goodwill impairment test, eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment, and provides other guidance on measuring a goodwill impairment loss. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those years, and early adoption is permitted. Cardtronics expects to adopt this guidance effective January 1, 2020. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements. This guidance is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company plans to adopt this guidance effective January 1, 2020. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). This guidance is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company plans to adopt this guidance in 2020. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

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(3) Revenue Recognition

Disaggregated Revenues

The following tables detail the revenues of the Company’s reportable segments disaggregated by financial statement line and component:



	Three months ended June 30, 2019
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations			Consolidated
Surcharge revenues	$	88,234	$	44,427	$	19,776	$	—		$	152,437
Interchange revenues	34,286		54,423		1,198		—			89,907
Bank-branding and surcharge-free network revenues	48,538		483		—		—			49,021
Managed services and processing revenues	28,478		2,168		3,752		(2,682		)	31,716
Total ATM operating revenues	199,536		101,501		24,726		(2,682		)	323,081

ATM product sales and other revenues	15,679		1,969		92		—			17,740
Total revenues	$	215,215	$	103,470	$	24,818	$	(2,682	)	$	340,821



	Three months ended June 30, 2018
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations			Consolidated
Surcharge revenues	$	90,687	$	30,888	$	22,679	$	—		$	144,254
Interchange revenues	35,819		72,412		1,064		—			109,295
Bank-branding and surcharge-free network revenues	43,990		—		—		—			43,990
Managed services and processing revenues	26,982		2,509		5,281		(3,090		)	31,682
Total ATM operating revenues	197,478		105,809		29,024		(3,090		)	329,221

ATM product sales and other revenues	9,628		2,041		97		—			11,766
Total revenues	$	207,106	$	107,850	$	29,121	$	(3,090	)	$	340,987

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	Six Months Ended June 30, 2019
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations			Consolidated
Surcharge revenues	$	173,344	$	75,472	$	40,444	$	—		$	289,260
Interchange revenues	68,665		109,731		2,501		—			180,897
Bank-branding and surcharge-free network revenues	94,411		483		—		—			94,894
Managed services and processing revenues	54,162		4,493		7,572		(5,595		)	60,632
Total ATM operating revenues	390,582		190,179		50,517		(5,595		)	625,683

ATM product sales and other revenues	28,881		4,216		311		—			33,408
Total revenues	$	419,463	$	194,395	$	50,828	$	(5,595	)	$	659,091



	Six Months Ended June 30, 2018
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations			Consolidated
Surcharge revenues	$	179,801	$	57,057	$	46,749	$	—		$	283,607
Interchange revenues	71,638		139,870		2,189		—			213,697
Bank-branding and surcharge-free network revenues	88,437		—		—		—			88,437
Managed services and processing revenues	53,351		5,063		10,723		(5,926		)	63,211
Total ATM operating revenues	393,227		201,990		59,661		(5,926		)	648,952

ATM product sales and other revenues	23,760		4,304		155		—			28,219
Total revenues	$	416,987	$	206,294	$	59,816	$	(5,926	)	$	677,171

Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Revenue is recorded in ATM operating revenues and ATM product sales and other revenues line items in the accompanying Consolidated Statements of Operations.

ATM operating revenues are recognized daily as the associated transactions are processed or monthly on a per ATM or per cardholder basis. For customer contracts that provide for up-front fees that do not pertain to a distinct performance obligation, such fees are recognized over the term of the underlying agreement on a straight-line basis. ATM product sales and other revenues are recognized when the related performance obligations are fulfilled upon transfer of control of goods or services to the customer.

ATM operating revenues. The Company presents revenues from automated consumer financial services, bank-branding and surcharge-free network offerings, managed services and other services in the ATM operating revenues line in the accompanying Consolidated Statements of Operations. The Company’s ATM operating revenues consist of the following:

•

Surcharge revenue. Surcharge revenues are received in the form of a fee paid by a cardholder who has made a cash withdrawal from an ATM. Surcharge fees can vary widely based on the location of the ATM and the nature of the contracts negotiated with our merchants. In the U.S. and Canada, the Company does not receive surcharge fees from cardholders whose financial institutions participate in a surcharge-free network or have branded a location; instead, the Company receives interchange and bank-branding or surcharge-free network-branding revenues, which are discussed below. For certain ATMs, primarily those owned and operated by merchants, the Company does not receive any portion of the surcharge but rather the entire surcharge fee is earned by the merchant. In the U.K., ATM deployers operate their ATMs on either a free-to-use (surcharge-free) or a pay-to-use (surcharge) basis. On free-to-use ATMs in the U.K., the Company earns interchange revenue on withdrawal and certain other transactions. These fees are paid by the cardholder’s financial institution. On pay-to-use ATMs in the U.K., the Company only earns a surcharge fee paid by the cardholder on withdrawal transactions, and interchange is only paid by the cardholder’s financial institution on other non-withdrawal transaction types. In Germany, Australia, and

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Mexico, the Company collects surcharge fees on withdrawal transactions but generally does not receive interchange revenue. In South Africa, the Company generally earns interchange revenues only, the amount of which varies by transaction type and customer arrangement. Surcharge revenues, as described above, are recognized daily as the associated transactions are processed.

•

Interchange revenue. An interchange fee is a fee paid by the cardholder’s financial institution for its customer’s use of an ATM that is owned by another operator and for the fee the EFT network charges to transmit data between the ATM and the cardholder’s financial institution. The Company typically receives a majority of the interchange fee paid by the cardholder’s financial institution, net of the amount retained by the EFT network and the Company recognizes the net amount received from the network as revenue. In some markets in which the Company operates, interchange fees are earned not only on cash withdrawal transactions but also on other ATM transactions, including balance inquiries and balance transfers. Interchange revenues are subject to various arrangements and are recognized daily as the associated transactions are processed.

•

Bank-branding and surcharge-free network revenues. Under a bank-branding arrangement, ATMs that are Company-owned and operated are branded with the logo of the branding financial institution. In exchange for a monthly per ATM fee, the financial institution’s customers gain access to use these bank-branded ATMs without paying a surcharge. Under the Company’s Allpoint surcharge-free network, financial institutions that participate pay either a fixed monthly fee per cardholder or a fixed fee per transaction so that cardholders gain surcharge-free access to our large network of ATMs. Bank-branding and surcharge-free network revenues are generally recognized monthly on a per ATM or per cardholder basis, except for transaction-based fee arrangements which are recognized daily as they occur. Any up-front fees associated with these arrangements are recognized ratably over the life of the arrangement.

•

Managed services and processing revenues. Under managed service agreements, the Company provides various forms of ATM-related services, including monitoring, maintenance, cash management, cash delivery, customer service, on-screen advertising, processing and other services to merchants, financial institutions, and third-party ATM operators. Under processing arrangements, the Company provides transaction processing services to merchants, financial institutions, and third-party operators. Under managed services and processing arrangements, surcharge and interchange fees are generally earned by the customer and the Company typically receives a fixed fee per transaction and/or a periodic management fee per ATM in return for providing the agreed-upon operating services. The managed services and processing fees are recognized as the related services are provided to the customers.

•

Other disclosures. The Company’s bank-branding, surcharge-free network, and managed services arrangements result in the Company providing a series of distinct services that have the same pattern of transfer to the customer. As a result, these arrangements create singular performance obligations that are satisfied over-time (generally 3-5 years) for which the Company has a right to consideration that corresponds directly with the value of the entity’s performance completed to date. In conjunction with these arrangements, the Company recognizes revenue in the amount it has a right to receive. Variable consideration may exist in these arrangements and is recognized only to the extent a significant reversal is not probable.

ATM product sales and other revenues. The Company presents revenues from other product sales and services in the ATM product sales and other revenues line in the accompanying Consolidated Statements of Operations. The Company earns revenues from the sale of ATMs and ATM-related equipment as well as the delivery of other non-transaction-based services. Revenues related to these activities are recognized when the equipment is delivered to the customer and the Company has completed all required installation and set-up procedures. With respect to the sale of ATMs to Value-Added-Resellers (“VARs”), the Company recognizes revenues related to such sales when the equipment is delivered to the VAR.

Due to the transactional nature of the Company’s revenue, there are no significant judgments that affect the determination of the amount and timing of its revenues.

Contract Balances

As of June 30, 2019, the Company has recognized no significant contract assets. Accounts receivables that relate to completed performance obligations are recognized on the Company's consolidated balance sheets. Contract liabilities totaled $8.2 million and $8.4 million at June 30, 2019 and December 31, 2018, respectively. These amounts represent deferred revenues for advance consideration received primarily in relation to bank-branding and surcharge-free network arrangements. The revenue recognized during the three and six months ended June 30, 2019 and 2018 on previously deferred revenues was not material. The Company expects to recognize the revenue associated with its contract liabilities ratably over various periods extending over the next 36 months. During the three and six months ended June 30, 2019, the Company did not recognize any significant impairment losses related to its accounts receivable or contract assets.

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Contract Cost

The Company expects that the incremental commissions paid to sales personnel, together with other associated costs, are recoverable, and therefore, the Company capitalizes these amounts as deferred contract acquisition costs. Deferred contract acquisition costs totaled $7.8 million and $7.9 million at June 30, 2019 and December 31, 2018, respectively. Sales commissions capitalized are generally amortized over a 4-5 year period corresponding with the related agreements. Similarly, and consistent with past practice, the costs incurred to fulfill a contract, primarily consisting of prepaid merchant commissions and other consideration paid or provided to merchant partners, are capitalized and recognized over the duration of the related contract. The Company does not capitalize the costs of obtaining a contract if the associated contract is one year or less.

(4) Share-based Compensation

The Company accounts for its share-based compensation by recognizing the grant date fair value of share-based awards, net of estimated forfeitures, as share-based compensation expense over the underlying requisite service periods of the related awards. The grant date fair value is based upon the Company's share price on the date of the grant.

The following table reflects the total share-based compensation expense amounts reported in the accompanying Consolidated Statements of Operations:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)				(In thousands)
Cost of ATM operating revenues	$	366	$	90	$	627	$	174
Selling, general, and administrative expenses	4,884		3,423		9,107		5,784
Total share-based compensation expense	$	5,250	$	3,513	$	9,734	$	5,958

For the three and six months ended June 30, 2019, total share-based compensation expense increased by $1.7 million and $3.8 million compared to the same periods of 2018, respectively. This increase is attributable to the amount, timing and terms of share-based payment awards granted during the periods, net of estimated forfeitures.

Restricted Stock Units. The Company grants restricted stock units (“RSUs”) under its Long-Term Incentive Plan (“LTIP”), which is an annual equity award program under the Fourth Amended and Restated 2007 Stock Incentive Plan. The ultimate number of RSUs, that are determined to be earned under the LTIP are approved by the Compensation Committee of the Company’s Board of Directors ("Board"), based on the Company’s achievement of previously specified performance levels at the end of the associated performance period. RSU grants are service-based (“Time-RSUs”), performance-based (“Performance-RSUs”), or market-based (“Market-Based-RSUs”). Each is recognized ratably over the associated service period. For Time-RSUs and Market-Based-RSUs, the Company recognizes the related compensation expense based on the grant date fair value. The grant date fair value of the Time-Based RSUs is the Company's closing stock price on the date of grant while the grant date fair value of the Market-Based-RSUs is derived from a Monte Carlo simulation. For Performance-RSUs, the Company recognizes the related compensation expense based on the estimated performance levels that management believes will ultimately be met. Time-RSUs are convertible into the Company’s common shares upon passage of the annual graded vesting periods, which begin 1-2 years after the grant date and extend 3-4 years. Performance-RSUs and Market-Based RSUs will be earned to the extent the Company achieves the associated performance-based or market-based vesting conditions and these awards are convertible into the Company’s common shares after the passage of the vesting periods which extend 3-4 years from the grant date. Although these RSUs are not considered to be earned and outstanding until the vesting conditions 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 may also be granted outside of LTIPs, with or without performance-based vesting requirements.

The number of the Company’s earned non-vested RSUs as of June 30, 2019, and changes during the six months ended June 30, 2019, are presented below:

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	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested RSUs as of December 31, 2018	911,165		$	28.74
Granted	245,399		33.80
Vested	(260,306	)	33.88
Forfeited	(17,594	)	31.02
Non-vested RSUs as of June 30, 2019	878,664		$	28.58

The above table only includes earned RSUs. The Performance-RSUs and Market-Based RSUs granted in 2018 and 2019 that are not yet earned are not included. The number of Performance-RSUs granted at target in 2018, net of forfeitures, was 298,387 units with a weighted average grant date fair value of $22.82 per unit. The number of Performance-RSUs granted at target in 2019, net of forfeitures, was 122,215 units with a weighted average grant date fair value of $33.81 per unit. The number of Market-Based RSUs granted in 2018, net of forfeitures, was 134,989 units with a weighted average grant date fair value $24.13. The number of Market-Based RSUs granted in 2019, net of forfeitures, was 122,127 units with a weighted average grant date fair value of $49.33 per unit. Time-RSUs are included in the listing of outstanding RSUs as granted.

As of June 30, 2019, the unrecognized compensation expense associated with earned RSUs was $15.5 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 1.84 weighted average remaining life years.

Options. The number of the Company’s outstanding stock options as of June 30, 2019, and changes during the six months ended June 30, 2019, are presented below:



	Number of Shares	Weighted Average Exercise Price
Options outstanding as of December 31, 2018	234,959	$	22.31
Granted	145,221	31.99
Exercised	—	—
Options outstanding as of June 30, 2019	380,180	26.01

Options vested and exercisable as of June 30, 2019	78,326	$	22.31

As of June 30, 2019, the unrecognized compensation expense associated with outstanding options was approximately $2.8 million, which will be recognized over the remaining weighted average vesting period of approximately 2.21 years.

(5) Earnings 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 net income available to common shareholders) when their impact on net income available to common shareholders is anti-dilutive.

Potentially dilutive securities for the three and six months ended June 30, 2019 included all outstanding stock options and RSUs, which were included in the calculation of diluted earnings per share for these periods. The potentially dilutive effect of outstanding warrants and the underlying shares exercisable under the Company’s $287.5 million of 1.00% Convertible Senior Notes due 2021 (the “Convertible Notes”) were excluded from diluted shares outstanding as the exercise price exceeded the average market price of the Company’s common shares. The effect of the note hedge, described in Note 9. Long-Term Debt, was also excluded as the effect is anti-dilutive.

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The allocated details of our Earnings per Share are as follows:



	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
	(in thousands, excluding share and per share amounts)
Net income available to common shareholders	$	10,471	$	3,767	$	14,790	$	999
Weighted average common basic shares outstanding (for basic calculation)	46,180,161		45,927,732		46,201,842		45,880,661
Dilutive effect of outstanding common stock options and RSUs	421,327		451,081		418,305		477,115
Weighted average common dilutive shares outstanding (for diluted calculation)	46,601,488		46,378,813		46,620,147		46,357,776

Net income per common share - basic	$	0.23	$	0.08	$	0.32	$	0.02
Net income per common share - diluted	$	0.22	$	0.08	$	0.32	$	0.02

For both the three and six months ended June 30, 2019, there were 145,221 stock options excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive.

(6) Shareholders' Equity

Share Repurchases. On March 26, 2019, the Company announced that its Board had authorized a share repurchase program, under which it is authorized to repurchase up to $50 million of its Class A ordinary shares through August 31, 2020. Share repurchases under the authorized plan may be effected on behalf of the Company through open market transactions, privately negotiated transactions, or otherwise, pursuant to SEC trading rules. The timing and extent of repurchases will depend upon several factors, including market and business conditions, valuation of shares, regulatory requirements and other corporate considerations, and repurchases may be suspended or discontinued at any time.

During the three and six months ended June 30, 2019, the Company repurchased and canceled 677,679 shares of its outstanding Class A ordinary shares at a weighted average price of $29.51 per share, for an aggregate purchase price of $20.1 million.

Accumulated Other Comprehensive Loss, net. Accumulated other comprehensive loss, net, is a separate component of Shareholders’ equity in the accompanying Consolidated Balance Sheets. The following tables present the changes in the balances of each component of Accumulated other comprehensive loss, net, for the three and six months ended June 30, 2019:



	Foreign Currency Translation Adjustments				Unrealized Losses on Interest Rate Swap and Foreign Currency Forward Contracts				Total
	(In thousands)
Total accumulated other comprehensive loss, net as of March 31, 2019	$	(61,210	)	⁽¹⁾	$	(13,268	)	⁽²⁾	$	(74,478	)
Other comprehensive income (loss) before reclassification	4,274			⁽³⁾	(13,543		)	⁽⁴⁾	(9,269		)
Amounts reclassified from accumulated other comprehensive loss, net	—			⁽³⁾	(63		)	⁽⁴⁾	(63		)
Net current period other comprehensive income (loss)	4,274			⁽¹⁾	(13,606		)	⁽²⁾	(9,332		)
Total accumulated other comprehensive loss, net as of June 30, 2019	$	(56,936	)	⁽¹⁾	$	(26,874	)	⁽²⁾	$	(83,810	)

(1)Net of deferred income tax (benefit) of $(5,474) and $(5,312) as of June 30, 2019 and March 31, 2019, respectively.

(2)Net of deferred income tax expense of $11,835 and $15,917 as of June 30, 2019 and March 31, 2019, respectively.

(3)Net of deferred income tax (benefit) of $(162).


(4)	Net of deferred income tax benefit of $(4,012) and $(70) for Other comprehensive income before reclassification and Amounts reclassified from accumulated comprehensive loss, net, respectively, as of June 30, 2019. For additional information, see Note 13. Derivative Financial Instruments.

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	Foreign Currency Translation Adjustments				Unrealized Losses on Interest Rate Swap and Foreign Currency Forward Contracts				Total
	(In thousands)
Total accumulated other comprehensive loss, net as of December 31, 2018	$	(66,312	)	⁽¹⁾	$	(565	)	⁽²⁾	$	(66,877	)
Other comprehensive income (loss) before reclassification	9,376			⁽³⁾	(25,964		)	⁽⁴⁾	(16,588		)
Amounts reclassified from accumulated other comprehensive loss, net	—				(345		)	⁽⁴⁾	(345		)
Net current period other comprehensive income (loss)	9,376				(26,309		)		(16,933		)
Total accumulated other comprehensive loss, net as of June 30, 2019	$	(56,936	)	⁽¹⁾	$	(26,874	)	⁽²⁾	$	(83,810	)

(1)Net of deferred income tax (benefit) of $(5,474) and $(5,232) as of June 30, 2019 and December 31, 2018, respectively.

(2)Net of deferred income tax expense of $11,835 and $19,112 as of June 30, 2019 and December 31, 2018, respectively.

(3)Net of deferred income tax (benefit) of $(242).


(4)	Net of deferred income tax benefit of $(7,216) and $(61) for Other comprehensive income before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, as of June 30, 2019. For additional information, see Note 13. Derivative Financial Instruments.

The Company records unrealized gains and losses related to its interest rate swap and foreign currency forward contracts net of taxes, in the Accumulated other comprehensive loss, net line within the accompanying Consolidated Balance Sheets. The amounts reclassified from Accumulated other comprehensive loss, net are recognized in the Cost of ATM operating revenues, Interest expense, net, or Other (income) expense lines in the accompanying Consolidated Statements of Operations.

The Company has elected the portfolio approach for the deferred tax asset of the unrealized gains and losses related to the interest rate swap and foreign currency forward contracts in Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets. Under the portfolio approach, the disproportionate tax effect created when the valuation allowance was appropriately released as a tax benefit into continuing operations in 2010, will reverse out of the Accumulated other comprehensive loss, net line within the accompanying Consolidated Balance Sheets and into continuing operations as a tax expense when the Company ceases to hold any interest rate swap contracts. As of June 30, 2019, the disproportionate tax effect is $14.6 million.

The Company currently believes that the unremitted earnings of certain of its 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.

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(7) Intangible Assets

Goodwill

The following table presents the net carrying amounts of the Company’s intangible assets with indefinite lives as of December 31, 2018 and June 30, 2019, as well as the changes in the net carrying amounts for the six months ended June 30, 2019 by segment. For additional information related to the Company’s segments, see Note 17. Segment Information.



	North America		Europe & Africa			Australia & New Zealand			Total
	(In thousands)
Goodwill, gross as of December 31, 2018	$	556,570	$	231,121		$	151,494		$	939,185
Accumulated impairment loss	—		(50,003		)	(140,038		)	(190,041		)
Goodwill, net as of December 31, 2018	$	556,570	$	181,118		$	11,456		$	749,144

Foreign currency translation adjustments	4,373		402			(60		)	4,715

Goodwill, gross as of June 30, 2019	560,943		231,523			151,434			943,900
Accumulated impairment loss	—		(50,003		)	(140,038		)	(190,041		)
Goodwill, net as of June 30, 2019	$	560,943	$	181,520		$	11,396		$	753,859

Intangible Assets with Definite Lives

The following table presents the Company’s intangible assets that were subject to amortization:



	June 30, 2019							December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Merchant and bank-branding contracts/relationships	$	486,082	$	(362,763	)	$	123,319	$	476,429	$	(340,899	)	$	135,530
Trade names	18,016		(11,184		)	6,832		18,010		(9,804		)	8,206
Technology	10,966		(6,922		)	4,044		10,963		(6,490		)	4,473
Non-compete agreements	4,260		(4,260		)	—		4,247		(4,244		)	3
Revolving credit facility deferred financing costs	4,300		(1,822		)	2,478		4,170		(1,535		)	2,635
Total intangible assets with definite lives	$	523,624	$	(386,951	)	$	136,673	$	513,819	$	(362,972	)	$	150,847

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(8) Accrued Liabilities

The Company’s accrued liabilities consisted of the following:



	June 30, 2019		December 31, 2018
	(In thousands)
Accrued merchant settlement	$	158,557	$	198,512
Accrued merchant fees	34,675		33,551
Accrued taxes	32,456		32,899
Accrued compensation	15,176		26,147
Accrued processing costs	9,949		7,365
Accrued cash management fees	9,024		8,882
Accrued armored	7,736		7,984
Accrued maintenance	7,477		3,911
Accrued interest	5,022		3,343
Accrued purchases	4,803		6,654
Accrued telecommunications costs	2,126		2,187
Other accrued expenses	44,232		37,725
Total accrued liabilities	$	331,233	$	369,160

(9) Long-Term Debt

The Company’s carrying value of long-term debt consisted of the following:



	June 30, 2019		December 31, 2018
	(In thousands)
Revolving credit facility, including swingline credit facility (weighted average combined interest rate of 2.6% and 2.8% as of June 30, 2019 and December 31, 2018, respectively)	$	212,811	$	259,081
1.00% Convertible Senior Notes due December 2020, net of unamortized discount and capitalized debt issuance costs	269,520		263,507
5.50% Senior Notes due May 2025, net of capitalized debt issuance costs	296,220		295,897
Total long-term debt	$	778,551	$	818,485

The Convertible Notes with a face value of $287.5 million are presented net of unamortized discount and capitalized debt issuance costs of $18.0 million and $24.0 million as of June 30, 2019 and December 31, 2018, respectively. The 5.50% Senior Notes due 2025 (the “2025 Notes”) with a face value of $300.0 million are presented net of capitalized debt issuance costs of $3.8 million and $4.1 million as of June 30, 2019 and December 31, 2018, respectively.

Revolving Credit Facility

The Company's second amended and restated credit agreement (the “Credit Agreement”) provides the Company with a $600.0 million revolving credit facility maturing on November 19, 2023, which includes an accordion feature that allows the Company to increase the available borrowings under the credit facility to $700.0 million by obtaining increased commitments from one or more existing lenders or one or more additional lenders that become party to the Credit Agreement and who consent at such time to providing additional commitments. In addition, the credit facility includes a sub-limit of up to $150.0 million for letters of credit and a sub-limit of up to $50.0 million for swingline loans.

The total commitments under the credit facility can be borrowed in U.S. dollars, alternative currencies (including Euros, U.K. pounds sterling, Canadian dollars, Australian dollars and South African rand), or a combination thereof. Borrowings (not including swingline loans) accrue interest, at the Company’s option and based on the type of currency borrowed, at the Alternate Base Rate, the Canadian Prime Rate, the Adjusted LIBO Rate, the Canadian Dealer Offered Rate, the Bank Bill Swap Reference Rate or the Johannesburg Interbank Agreed Rate (each, as defined in the Credit Agreement) plus a margin depending on the Company’s most recent Total Net Leverage Ratio (as defined in the Credit Agreement). The margin for Alternative Base Rate loans and Canadian Prime Rate loans varies between 0% and 0.75%, and the margin for Adjusted LIBO Rate loans, Canadian Dealer Offered Rate

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loans, Bank Bill Swap Reference Rate loans and Johannesburg Interbank Agreed Rate Loans varies between 1.00% and 1.75%. Swingline loans denominated in U.S. dollars bear interest at the Alternate Base Rate plus a margin as described above, swingline loans denominated in Canadian dollars bear interest at the Canadian Prime Rate plus a margin as described above and swingline loans denominated in other alternative currencies bear interest at the Overnight Foreign Currency Rate (as defined in the Credit Agreement) plus the applicable margin for the Adjusted LIBO Rate, the Bank Bill Swap Reference Rate or the Johannesburg Interbank Agreed Rate, as applicable.

Each of the Credit Facility Guarantors (as defined in the Credit Agreement) has guaranteed the full and punctual payment of the obligations under the revolving credit facility and the obligations under the revolving credit facility are secured by substantially all of the assets of the Credit Facility Guarantors. In addition, the obligations of the CFC Borrowers (as defined in the Credit Agreement) are guaranteed by the CFC Guarantors and secured by substantially all of the assets of the CFC Guarantors (as defined in the Credit Agreement).

The Credit Agreement contains representations, warranties and covenants that are customary for similar credit arrangements, including, among other things, covenants relating to: (i) financial reporting and notification, (ii) payment of obligations, (iii) compliance with applicable laws, (iv) notification of certain events, and (v) certain covenants relating to, among other things, the sale or transfer of assets, fundamental changes, incurrence or guarantee of indebtedness, liens, investments, hedging transactions with affiliates and sale and leaseback transactions. Financial covenants in the Credit Agreement require the Company to maintain: (i) as of the last day of any fiscal quarter, a Total Net Leverage Ratio (as defined in the Credit Agreement) of no more than 4.25 to 1.00, and (ii) as of the last day of any fiscal quarter, an Interest Coverage Ratio (as defined in the Credit Agreement) of no less than 3.00 to 1.00. Additionally, the Company is limited on the amount of restricted payments; however, the Company may generally make restricted payments so long as no event of default exists at the time of such payment and the Total Net Leverage Ratio is less than 3.75 to 1.00 at the time such restricted payment is made.

As of June 30, 2019, the Company had $212.8 million of outstanding borrowings under its $600.0 million revolving credit facility and was in compliance with all applicable covenants and ratios under the Credit Agreement. The Company also had $10.7 million outstanding in letters of credit. The weighted average interest rates on the Company’s outstanding borrowings under the revolving credit facility were 2.6% and 2.8%, as of June 30, 2019 and December 31, 2018, respectively.

$287.5 million 1.00% Convertible Senior Notes Due 2020 and Related Equity Instruments

On November 19, 2013, Cardtronics, Inc. issued the Convertible Notes at par value. Cardtronics, Inc. received $254.2 million in net proceeds from the offering after deducting underwriting fees paid to the initial purchasers and a repurchase of 665,994 of its outstanding common shares concurrent with the offering. Cardtronics, Inc. used a portion of the net proceeds from the offering to fund the net cost of the convertible note hedge transaction, as described below. The convertible note hedge and warrant transactions were entered into concurrent with the pricing of the Convertible Notes. Interest on the Convertible Notes is payable semi-annually in cash in arrears on June 1st and December 1st of each year. Under U.S. GAAP, certain convertible debt instruments that may be settled in cash (or other assets) upon conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. The Company, with assistance from a valuation professional, determined that the fair value of the debt component was $215.8 million and the fair value of the embedded option was $71.7 million as of the issuance date. The Company recognizes effective interest expense on the debt component and that interest expense effectively accretes the debt component to the total principal amount due at maturity of $287.5 million. The effective rate of interest to accrete the debt balance is approximately 5.26%, which corresponded to the Company’s estimated conventional debt instrument borrowing rate at the date of issuance.

On July 1, 2016, Cardtronics plc, Cardtronics, Inc., and Wells Fargo Bank, National Association, as trustee, entered into a supplemental indenture (the “Convertible Notes Supplemental Indenture”) with respect to the Convertible Notes. The Convertible Notes Supplemental Indenture provides for the unconditional and irrevocable guarantee by Cardtronics plc of the prompt payment, when due, of any amount owed to the holders of the Convertible Notes. The Convertible Notes Supplemental Indenture also provides that, from and after July 1, 2016, the Convertible Notes will be convertible into shares of Cardtronics plc in lieu of common share of Cardtronics, Inc.

The Convertible Notes have a conversion price of $52.35 per share, which equals a conversion rate of 19.1022 shares per $1,000 principal amount of Convertible Notes, for a total of approximately 5.5 million shares underlying the debt. The conversion rate, however, is subject to adjustment under certain circumstances. Conversion can occur: (i) any time on or after September 1, 2020, (ii) after March 31, 2014, during any calendar quarter that follows a calendar quarter in which the price of the shares exceeds 135% of the conversion price for at least 20 days during the 30 consecutive trading-day period ending on the last trading day of the quarter, (iii) during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price of the Convertible Notes is less than 98% of the closing price of the shares multiplied by the applicable conversion

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rate on each such trading day, (iv) upon specified distributions to Cardtronics plc’s shareholders upon recapitalizations, reclassifications, or changes in shares, and (v) upon a make-whole fundamental change. A fundamental change is defined as any one of the following: (i) any person or group that acquires 50% or more of the total voting power of all classes of common equity that is entitled to vote generally in the election of Cardtronics plc’s directors, (ii) Cardtronics plc engages in any recapitalization, reclassification, or changes of common shares as a result of which the shares would be converted into or exchanged for, shares, other securities, other assets, or property, (iii) Cardtronics plc engages in any share exchange, consolidation, or merger where the shares converted into cash, securities, or other property, (iv) the Company engages in certain sales, leases, or other transfers of all or substantially all of the consolidated assets, or (v) Cardtronics plc’s shares are not listed for trading on any U.S. national securities exchange.

None of the Convertible Notes were deemed convertible as of June 30, 2019, and therefore, remain classified in the Long-term debt line in the accompanying Consolidated Balance Sheets at June 30, 2019. In future financial reporting periods, the classification of the Convertible Notes may change depending on whether any of the above contingent criteria have been subsequently satisfied.

Upon conversion, holders of the Convertible Notes are entitled to receive cash, shares, or a combination of cash and shares, at the Company’s election. In the event of a change in control, as defined in the indenture under which the Convertible Notes have been issued, holders can require Cardtronics, Inc. to purchase all or a portion of their Convertible Notes for 100% of the notes’ par value plus any accrued and unpaid interest.

The Company’s interest expense related to the Convertible Notes consisted of the following:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Cash interest per contractual coupon rate	$	719	$	719	$	1,438	$	1,438
Amortization of note discount	2,816		2,673		5,596		5,310
Amortization of debt issuance costs	211		190		417		375
Total interest expense related to Convertible Notes	$	3,746	$	3,582	$	7,451	$	7,123

The Company’s carrying value of the Convertible Notes consisted of the following:



	June 30, 2019			December 31, 2018
	(In thousands)
Principal balance	$	287,500		$	287,500
Unamortized discount and capitalized debt issuance costs	(17,980		)	(23,993		)
Net carrying amount of Convertible Notes	$	269,520		$	263,507

In connection with the issuance of the Convertible Notes, Cardtronics, Inc. entered into separate convertible note hedge and warrant transactions to reduce the potential dilutive impact upon the conversion of the Convertible Notes. The net effect of these transactions effectively raised the price at which dilution would occur from the $52.35 initial conversion price of the Convertible Notes to $73.29. Pursuant to the convertible note hedge, Cardtronics, Inc. purchased call options granting Cardtronics Inc. the right to acquire up to approximately 5.50 million common shares with an initial strike price of $52.35. The call options automatically become exercisable upon conversion of the Convertible Notes, and will terminate on the second scheduled trading day immediately preceding December 1, 2020. Cardtronics Inc. also sold to the initial purchasers warrants to acquire up to approximately 5.50 million common shares with a strike price of $73.29. The warrants will expire incrementally on a series of expiration dates subsequent to the maturity date of the Convertible Notes through August 30, 2021. If the conversion price of the Convertible Notes remains between the strike prices of the call options and warrants, Cardtronics plc’s shareholders will not experience any dilution in connection with the conversion of the Convertible Notes; however, to the extent that the price of the shares exceeds the strike price of the warrants on any or all of the series of related expiration dates of the warrants, Cardtronics plc would be required to issue additional shares to the warrant holders. The amounts allocated to both the note hedge and warrants were recorded in the Shareholders’ equity section in the accompanying Consolidated Balance Sheets.

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$300.0 million 5.50% Senior Notes Due 2025

On April 4, 2017, in a private placement offering, Cardtronics Inc. and Cardtronics USA, Inc. (the “2025 Notes Issuers”) issued $300.0 million in aggregate principal amount of the 2025 Notes pursuant to an indenture dated April 4, 2017 (the “2025 Notes Indenture”) among the 2025 Notes Issuers, Cardtronics plc, and certain of its subsidiaries, as guarantors (each, a “2025 Notes Guarantor”), and Wells Fargo Bank, National Association, as trustee.

Interest on the 2025 Notes accrues from April 4, 2017, the date of issuance, at the rate of 5.50% per annum. Interest on the 2025 Notes is payable semi-annually in cash in arrears on May 1st and November 1st of each year with the initial payment having commenced on November 1, 2017.

The 2025 Notes and the related guarantees (the “2025 Guarantees”) are the general unsecured senior obligations of each of the 2025 Notes Issuers and the 2025 Notes Guarantors, respectively, and rank: (i) equally in right of payment with all of the 2025 Notes Issuers’ and the 2025 Notes Guarantors’ existing and future senior indebtedness and (ii) senior in right of payment to all of the 2025 Notes Issuers’ and the 2025 Notes Guarantors’ future subordinated indebtedness. The 2025 Notes and the 2025 Guarantees are effectively subordinated to any of the 2025 Notes Issuers’ and the 2025 Notes Guarantors’ existing and future secured debt to the extent of the collateral securing such debt, including all borrowings under the Company’s revolving credit facility. The 2025 Notes are structurally subordinated to all liabilities of any of Cardtronics plc’s subsidiaries (excluding the 2025 Notes Issuers) that do not guarantee the 2025 Notes.

The 2025 Notes contain covenants that, among other things, limit the 2025 Notes Issuers’ ability and the ability of Cardtronics plc and certain of its restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments, or pay dividends or distributions on Cardtronics plc’s common shares or repurchase common shares or make certain other restricted payments, consolidate or merge with or into other companies, conduct asset sales, restrict dividends or other payments by restricted subsidiaries, engage in transactions with affiliates or related persons, and create liens.

Obligations under the 2025 Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Cardtronics plc and certain of its subsidiaries and certain of its future subsidiaries, with the exception of Cardtronics plc’s immaterial subsidiaries and CFC Guarantors (as defined in the Credit Agreement). There are no significant restrictions on the ability of Cardtronics plc to obtain funds from Cardtronics Inc., Cardtronics USA, Inc., or the other 2025 Notes Guarantors by dividend or loan. None of the 2025 Notes Guarantors’ assets represent restricted assets pursuant to Rule 4-08(e)(3) of Regulation S-X.

The 2025 Notes are subject to certain automatic customary releases with respect to the 2025 Notes Guarantors (other than Cardtronics plc, Cardtronics Holdings Limited, and CATM Holdings LLC), including the sale, disposition, or transfer of the common shares or substantially all of the assets of such 2025 Notes Guarantor, designation of such 2025 Notes Guarantor as unrestricted in accordance with the 2025 Notes Indenture, exercise of the legal defeasance option or the covenant defeasance option, liquidation, or dissolution of such 2025 Notes Guarantor. The 2025 Notes Guarantors, including Cardtronics plc, may not sell or otherwise dispose of all or substantially all of their properties or assets to, or consolidate with or merge into, another company if such a sale would cause a default under the 2025 Notes Indenture and certain other specified requirements under the 2025 Notes Indenture are not satisfied.

(10) Asset Retirement Obligations

Asset retirement obligations (“ARO”) consist primarily of costs to deinstall the Company’s ATMs and, in some cases, 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 of its owned ATMs, and in some cases, site restoration work. For each group of similar ATM types, the Company has recognized the estimated fair value of the ARO as a liability in the accompanying Consolidated Balance Sheets 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 the assets estimated useful life, 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.

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The changes in the Company’s ARO liability consisted of the following (in thousands):




Asset retirement obligations at December 31, 2018	$	61,223
Additional obligations	2,214
Accretion expense	910
Payments	(3,080		)
Foreign currency translation adjustments	(166		)
Asset retirement obligations at June 30, 2019	61,101
Less: current portion of asset retirement obligations	6,874
Asset retirement obligations, excluding current portion, at June 30, 2019	$	54,227

For additional information related to the Company’s ARO with respect to its fair value measurements, see Note 14. Fair Value Measurements.

(11) Leases

The Company leases facilities consisting of office and warehouse space as well as vehicles and office equipment. In addition, certain ATM placement agreements are deemed to contain an operating lease of merchant space under the Lease Standard. The Company's facility leases have various remaining terms extending up to 12 years, some of which may include one or more options to extend the associated lease term by up to 5-10 years, and some may include options for the Company or the lessor to terminate the leases prior to the end of the lease term. The exercise of lease renewal options is at the Company's discretion. From time to time, the Company may sublease office or warehouse space. This sublease activity is currently not significant. The Company's vehicle and office equipment leases currently have remaining lease terms extending up to 4 years and these leases typically have original terms of approximately 4-6 years. The Company has not historically extended its vehicle and office equipment leases beyond their original term. Similarly, the Company has not historically subleased these assets. The Company's ATM placement agreements that are deemed to contain an operating lease of merchant space under the Lease Standard have remaining terms extending from less than 1 year to more than 5 years. These consist of semi-permanent or through-the-wall placements of company-owned ATMs at merchant or financial institution locations. These arrangements are deemed to contain a lease as our counterparty lacks the practical ability to substitute alternative space. The renewal provisions under ATM placement agreements vary.

The Company's ATM placement agreements that are deemed to contain an operating lease generally require fixed and/or variable merchant commissions. The variable payments are based on the type and volume of transactions conducted on the ATMs at each respective location. In addition, the merchant commissions may also change, in accordance with the terms of these agreements, responsive to changes in interchange fees or interest rates. Certain Company facility leases require variable payments based on an index or based on external market rates. The Company's vehicle and office equipment leases do not generally include variable payments.

The Company recognizes the accounting impact of lease extension options when reasonably certain that a right to extend a lease will be exercised. The Company does not provide residual value guarantees within or in conjunction with any of its leases. As of June 30, 2019, all material leases of facilities, vehicles, office equipment, and merchant space had commenced.

The Company is not currently party to any significant finance leases. As a result, the net assets recorded under finance leases and the associated liabilities are not material.

See Note 2. New Accounting Pronouncements for the accounting impact of the Company's adoption of ASC 842-Leases on January 1, 2019.

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Balance sheet information related to operating leases is as follows:



	Classification	June 30, 2019		January 1, 2019 (Upon Adoption)
Assets		(In thousands)
Operating lease assets	Operating lease assets	$	81,355	$	85,068
Total operating lease assets		$	81,355	$	85,068

Liabilities
Current
Operating lease liabilities	Current portion of other long-term liabilities	$	19,435	$	20,602
Noncurrent
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	73,246		74,746
Total operating lease liabilities		$	92,681	$	95,348

Operating lease costs during the three and six months ended June 30, 2019 were as follows:



		Three Months Ended		Six Months Ended
	Classification	June 30, 2019		June 30, 2019
		(In thousands)
Operating lease costs	Cost of ATM operating revenues ⁽¹⁾	$	6,900	$	14,290
Operating lease costs	Selling, general, and administrative expenses ⁽²⁾	1,720		3,504
Total operating lease cost		$	8,620	$	17,794

(1)

Includes the fixed and variable cost of facilities, vehicles, and equipment that are deemed direct operating lease costs. The variable lease cost associated with these leases was not significant. In addition, includes the fixed and variable cost associated with our ATM placement agreements that are deemed to contain a lease. The variable cost associated with these placements was approximately $1.1 million and $2.2 million in the three and six months ended June 30, 2019, respectively.


(2)	Includes the fixed and variable cost of facilities, vehicles, and equipment that are deemed general and administrative operating lease costs. The variable lease cost associated with these leases was not significant.

The following table presents the weighted-average remaining term and weighted-average discount rate associated with the Company's operating leases.



Lease Term and Discount Rate	June 30, 2019		January 1, 2019 (Upon Adoption)
Weighted-average remaining lease term (years)
Operating leases	6.9		7.1
Weighted-average discount rate
Operating leases	3.34	%	3.45	%

Additional lease information is summarized below:



	Six Months Ended June 30, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows resulting from payments of operating lease liabilities	$	10,597

New operating lease assets recognized during the period	$	7,175

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During the six months ended June 30, 2019, the Company made $10.6 million in payments to satisfy the recognized operating lease obligations, approximately $7 million of which related to ATM placement agreements. The Company also recognized $7.2 million in new operating lease assets primarily consisting of equipment leases and ATM placement agreements that are deemed to contain an operating lease. Comparative prior period information is not presented above as we adopted the Lease Standard on January 1, 2019 using this effective date as the date of initial application.

The following table presents the June 30, 2019 undiscounted cash flows associated with the Company's recognized operating lease liabilities in the next five years and thereafter.



Maturity of Recognized Operating Lease Liabilities	Operating Lease Payments⁽¹⁾
	(In thousands)
2019	$	10,310
2020	21,102
2021	19,058
2022	11,729
2023	8,146
After 2023	35,977
Total lease payments	106,322
Less: Interest ⁽²⁾	(13,641		)
Present value of operating lease liabilities ⁽³⁾	$	92,681


(1)	Operating lease payments reflect the Company's current fixed obligations under the operating lease agreements. The Company has identified no extensions that are reasonably certain of being exercised and there are no significant lease agreements that have been signed and not yet commenced.


(2)	Calculated using the estimated incremental borrowing rate for each lease.


(3)	Includes current operating lease liabilities of $19.4 million and noncurrent operating lease liabilities of $73.2 million.

The following table presents the fixed payment obligations under the Company’s operating leases and ATM placement agreements as of December 31, 2018, as presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. The fixed payment obligations associated with our ATM placement agreements that were deemed not to contain a lease because our counterparty has the practical ability to substitute alternative space, are not included in the recognized operating lease liabilities.



	(In thousands)
2019	$	36,590
2020	29,760
2021	24,990
2022	13,081
2023	8,523
Thereafter	39,222
Total	$	152,166

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(12) Other Liabilities

The Company’s other liabilities consisted of the following:



	June 30, 2019		December 31, 2018
	(In thousands)
Current portion of other long-term liabilities
Operating lease liabilities	$	19,435	$	—
Asset retirement obligations	6,874		6,810
Acquisition related contingent consideration	6,828		—
Interest rate swap and cap contracts	6,680		396
Deferred revenue	4,103		4,109
Other	8,427		8,951
Total current portion of other long-term liabilities	$	52,347	$	20,266

Noncurrent portion of other long-term liabilities
Acquisition related contingent consideration	$	23,508	$	38,266
Interest rate swap and cap contracts	12,488		2,894
Deferred revenue	4,090		4,319
Other	14,553		22,261
Total noncurrent portion of other long-term liabilities	$	54,639	$	67,740

As of June 30, 2019 and December 31, 2018, the Acquisition related contingent consideration lines consisted of the estimated fair value of the contingent consideration associated with the Spark acquisition.

(13) Derivative Financial Instruments

Risk Management Objectives of Using Derivatives

The Company is exposed to interest rate risk associated with its vault cash rental obligations and, to a lesser extent, borrowings under its revolving credit facility. The Company utilizes varying notional amount interest rate swap contracts and interest rate cap agreements (“Interest Rate Derivatives”) to manage the interest rate risk associated with its vault cash rental obligations in the U.S., Canada, the U.K., and Australia. The Company has also entered into an interest rate swap to mitigate its exposure to floating interest rates on its revolving credit facility borrowings outstanding. The Company is exposed to foreign currency exchange rate risk with respect to its operations outside the U.S. The Company uses foreign currency forward contracts to hedge its foreign exchange rate risk associated with certain anticipated transactions. Currently, the Company has outstanding foreign currency forward contracts for the purchase of approximately $1.8 million Canadian dollars with durations that extend through September 30, 2019.

The Company’s Interest Rate Derivatives serve to mitigate interest rate risk by converting a portion of the Company’s monthly floating-rate vault cash rental payments to either monthly fixed-rate vault cash rental payments or to vault cash rental payments with a capped rate. Typically, the Company receives monthly floating-rate payments from its Interest Rate Derivative counterparties that correspond to, in all material respects, the monthly floating-rate payments required by the Company to its vault cash rental providers for the portion of the average outstanding vault cash balances that have been hedged. The floating-rate payments may or may not be capped or limited. In return, the Company pays its counterparties a monthly fixed-rate amount based on the same notional amounts outstanding. By converting the vault cash rental obligation interest rate from a floating-rate to a fixed-rate or a capped rate, the impact of favorable and unfavorable changes in future interest rates on the monthly vault cash rental payments recognized in the Cost of ATM operating revenues line in the accompanying Consolidated Statement of Operations, has been reduced.

There is never an exchange of the underlying principal or notional amounts associated with the interest rate swap contracts described above. Additionally, none of the Company’s existing interest rate swap contracts contain credit-risk-related contingent features.

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Accounting Policy

The Interest Rate Derivatives discussed above are used by the Company to hedge exposure to variability in expected future cash flows attributable to a particular risk; therefore, they are designated and qualify as cash flow hedging instruments. The Company does not currently hold any derivative instruments not designated as cash flow hedges, fair value hedges, or hedges of a net investment in a foreign operation.

In accordance with the new Hedging Standard, the Company reports the gain or loss related to each highly effective cash flow hedging instrument, including any ineffectiveness, as a component of Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets and reclassifies the gain or loss into earnings within the Cost of ATM operating revenues, Interest expense, net, or Other expense (income) lines of the accompanying Consolidated Statements of Operations in the same period or periods during which the hedged transaction affects and has been forecasted in earnings. The classification of the gain or loss is determined based on the associated hedge designation.

As discussed above, the Company generally utilizes fixed-for-floating Interest Rate Derivatives where the underlying pricing terms of the cash flow hedging instrument agree, in all material respects, with the pricing terms of the vault cash rental obligations to the Company’s vault cash providers. Therefore, the amount of ineffectiveness associated with the Interest Rate Derivatives has historically been immaterial. If the Company concludes 1) the vault cash obligations that have been hedged are no longer probable or 2) that underlying terms of the vault cash rental agreements have changed such that they do not sufficiently agree to the pricing terms of the Interest Rate Derivatives, the Interest Rate Derivative contracts would be deemed ineffective. The Company does not currently anticipate terminating or modifying terms of its existing derivative instruments prior to their expiration dates.

Accordingly, the Company recognizes all of its Interest Rate Derivative contracts as assets or liabilities in the accompanying Consolidated Balance Sheets at fair value and any changes in the fair values of the related Interest Rate Derivative contracts have been reported in Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets. The unrealized gains and losses related to the interest rate swap contracts have been reported net of taxes in Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets. For additional information related to the Company’s interest rate swap contracts with respect to its fair value measurements, see Note 14. Fair Value Measurements.

Summary of Outstanding Interest Rate Derivatives

The notional amounts, weighted average fixed rates, and terms associated with our interest rate swap contracts and cap agreement that are currently in place in the U.S., Canada, the U.K, and Australia (as of the date of the issuance of this 2019 Form 10-Q) are as follows:

Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations

North America – Interest Rate Swap Contracts



Notional Amounts U.S. $		Weighted Average Fixed Rate	Notional Amounts CAD$			Weighted Average Fixed Rate	Term
(In millions)			(In millions)
$	1,000	2.06%	CAD	$	125	2.46%	July 1, 2019 – December 31, 2019
$	1,000	2.06%	CAD	$	125	2.46%	January 1, 2020 – December 31, 2020
$	600	1.95%	CAD	$	125	2.46%	January 1, 2021 – December 31, 2021
$	400	1.46%					January 1, 2022 – December 31, 2022

North America – Interest Rate Cap Contracts



Notional Amounts U.S. $		Cap Rate ⁽¹⁾	Term
(In millions)
$	200	3.25%	January 1, 2021 – December 31, 2023

(1) Maximum amount of interest to be paid each year as per terms of cap. Cost of cap is amortized through vault cash rental expense over term of cap.

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Europe & Africa – Interest Rate Swap Contracts



Notional Amounts		Weighted Average
U.K. £		Fixed Rate	Term
(In millions)
£	550	0.90%	July 1, 2019 – December 31, 2019
£	500	0.94%	January 1, 2020 – December 31, 2020
£	500	0.94%	January 1, 2021 – December 31, 2021
£	500	0.94%	January 1, 2022 – December 31, 2022

Australia & New Zealand – Interest Rate Swap Contracts

Outstanding Interest Rate Derivatives Associated with Revolving Credit Facility Borrowings



Notional Amounts U.K. £		Weighted Average Fixed Rate		Term
(In millions)
£	80	0.95	%	July 1, 2019 – January 1, 2020
£	50	0.95	%	January 2, 2020 – January 1, 2021

The following tables depict the effects of the use of the Company’s derivative interest rate swap contracts in the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations.

Balance Sheet Data



	June 30, 2019				December 31, 2018
Asset (Liability) Derivative Instruments	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
		(In thousands)				(In thousands)
Derivatives designated as hedging instruments:
Interest rate swap contracts	Prepaid expenses, deferred costs, and other current assets	$	1,273		Prepaid expenses, deferred costs, and other current assets	$	4,489
Interest rate swap contracts	Prepaid expenses, deferred costs, and other noncurrent assets	549			Prepaid expenses, deferred costs, and other noncurrent assets	15,316
Interest rate swap contracts	Current portion of other long-term liabilities	(6,680		)	Current portion of other long-term liabilities	(396		)
Interest rate swap and cap contracts	Other long-term liabilities	(12,488		)	Other long-term liabilities	(2,894		)
Total derivative instruments, net		$	(17,346	)		$	16,515

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Statements of Operations Data



	Three Months Ended June 30,
Derivatives in Cash Flow Hedging Relationship	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivative Instruments					Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of (Gain) Loss Reclassified from Accumulated Other Comprehensive Loss into Income
	2019			2018			2019			2018
	(In thousands)						(In thousands)
Interest rate swap contracts	$	(13,474	)	$	747	Cost of ATM operating revenues	$	120		$	(1,283	)
Interest rate swap contracts	(69		)	—		Interest expense, net	(57		)	—
Total	$	(13,543	)	$	747		$	63		$	(1,283	)



	Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationship	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivative Instruments					Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of (Gain) Loss Reclassified from Accumulated Other Comprehensive Loss into Income
	2019			2018			2019			2018
	(In thousands)						(In thousands)
Interest rate swap contracts	$	(25,583	)	$	15,519	Cost of ATM operating revenues	$	458		$	(3,872	)
Interest rate swap contracts	(381		)	—		Interest expense, net	(113		)	—
Total	$	(25,964	)	$	15,519		$	345		$	(3,872	)

As of June 30, 2019, the Company expects to reclassify $5.4 million of net derivative-related losses contained in the Accumulated comprehensive loss, net within its accompanying Consolidated Balance Sheets into earnings during the next twelve months concurrent with the recording of the related vault cash rental expense amounts.

The following tables show the impact of our cash flow hedge accounting relationships on the statement of operations for the three and six months ended June 30, 2019 and 2018:



	Location and Amount of Loss (Gain) Recognized in Income on Cash Flow Hedging Relationships in the Three Months Ended June 30,
	2019					2018
	(In thousands)
	Cost of ATM Operating Revenues		Interest Expense, net			Cost of ATM Operating Revenues
Total amount of expense presented in the statements of operations in which the effects of cash flow hedges are recorded	$	208,081	$	6,871		$	215,353

Amount of loss (gain) reclassified from accumulated other comprehensive income into income	$	120	$	(57	)	$	(1,283	)

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	Location and Amount of Loss (Gain) Recognized in Income on Cash Flow Hedging Relationships in the Six Months Ended June 30,
	2019					2018
	(In thousands)
	Cost of ATM Operating Revenues		Interest Expense, net			Cost of ATM Operating Revenues
Total amount of expense presented in the statements of operations in which the effects of cash flow hedges are recorded	$	414,239	$	13,514		$	430,843

Amount of loss (gain) reclassified from accumulated other comprehensive income into income	$	458	$	(113	)	$	(3,872	)

(14) Fair Value Measurements

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2019 and December 31, 2018 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 refers to 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 June 30, 2019
	Total			Level 1		Level 2			Level 3
	(In thousands)
Assets
Assets associated with interest rate swap contracts	$	1,822		$	—	$	1,822		$	—
Liabilities
Liabilities associated with interest rate swap contracts	$	(19,168	)	$	—	$	(19,168	)	$	—
Liabilities associated with acquisition related contingent consideration	$	(30,336	)	$	—	$	—		$	(30,336	)



	Fair Value Measurements at December 31, 2018
	Total			Level 1		Level 2			Level 3
	(In thousands)
Assets
Assets associated with interest rate swap contracts	$	19,805		$	—	$	19,805		$	—
Liabilities
Liabilities associated with interest rate swap contracts	$	(3,290	)	$	—	$	(3,290	)	$	—
Liabilities associated with acquisition related contingent consideration	$	(38,266	)	$	—	$	—		$	(38,266	)

As of June 30, 2019 and December 31, 2018, liabilities associated with Level 2 interest rate swap contracts also includes an insignificant amount related to foreign currency forward contracts.

Below 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 allowance for doubtful accounts, prepaid expenses, deferred costs, and other current assets, accounts payable, accrued liabilities, 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.

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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 (Level 3) inputs. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. An assessment of non-amortized intangible assets is performed on an annual basis or more frequently based on the occurrence of events that might indicate a potential impairment.

Acquisition related contingent consideration. Liabilities from acquisition related contingent consideration are estimated using a Monte Carlo simulation and market observable, as well as internal projections, and other significant non-observable inputs (Level 3) based on the Company’s best estimate of future operational results upon which the payment of these obligations are contingent. Future changes to the estimated contingent liability either higher or lower may occur as the estimated internal projections and other significant non-observable inputs for the calculation become available and are updated as deemed necessary. These future updates could result in a material change in the estimated contingent liability. The estimates and significant non-observable inputs may differ from actual results. As the estimated contingent liability is based upon performance relative to certain agreed upon earnings targets in 2019 and 2020, the performance based payments are expected to occur in 2020 and 2021, respectively. As of June 30, 2019, the estimated fair value of the Company’s acquisition related contingent consideration liability was approximately $30.3 million. Based on current forecasts, the Company estimates that approximately $6.8 million of the total aggregate estimated liability will be paid in the first quarter of 2020 with the remaining amount being paid in the first quarter of 2021. During the three and six months ended June 30, 2019, the Company recognized an $0.5 million gain and $8.7 million gain in Other (income) expense to revise the estimated fair value of the contingent consideration liability. The foreign exchange losses recognized during the three and six months ended June 30, 2019, to remeasure the South African Rand denominated liability to U.S. Dollars were both approximately $0.8 million. Both the revision to the estimated fair value and the foreign exchange adjustments are included in the Other income line in the 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 outstanding borrowings are subject to short-term floating interest rates. As of June 30, 2019, the fair value of our 2020 Notes and 2025 Notes totaled $277.7 million and $298.7 million respectively, based on the quoted prices in markets that are not active inputs (Level 2) for these notes as of that date. For additional information related to long-term debt, see Note 9. Long-Term Debt.

Additions to asset retirement obligations liability. The Company estimates the fair value of additions to its ARO liability using expected discounted future cash flow at the Company’s credit-adjusted risk-free interest rate. Liabilities added to the ARO are measured at fair value at the time of the asset installations using significant non-observable (Level 3) inputs. These liabilities are evaluated periodically based on estimated current fair value. Amounts added to the ARO liability during the six months ended June 30, 2019 totaled $2.2 million.

Interest rate derivatives and foreign currency forward contracts. As of June 30, 2019, the recognized fair value of the Company’s Interest Rate Derivatives resulted in an asset of $1.8 million and a liability of $19.1 million (including an insignificant amount related to foreign currency forward contracts). These financial instruments are carried at fair value and are valued using pricing models based on significant other observable inputs (Level 2), while taking into account the creditworthiness of the party that is in the liability position with respect to each trade. For additional information related to the valuation process of this asset or liability, see Note 13. Derivative Financial Instruments.

(15) Commitments and Contingencies

Legal Matters

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 contingent liabilities, based on ASC 450, contingencies, when it has determined that a liability is probable and reasonably estimable. The Company’s management does not expect the outcome in any legal proceedings or claims, individually or collectively, to have a material adverse financial or operational impact on the Company. Additionally, the Company currently expenses all legal costs as they are incurred.

Other Commitments

Asset retirement obligations. The Company’s ARO consist primarily of costs to deinstall the Company’s ATMs and to restore the ATM sites to their original condition. In most cases, the Company is contractually required to perform this deinstallation of its owned ATMs, and in some cases, site restoration work. As of June 30, 2019, the Company had $61.1 million accrued for these liabilities. For additional information, see Note 10. Asset Retirement Obligations.

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Acquisition related contingent consideration. As of June 30, 2019, the Company had $30.3 million accrued for the Spark acquisition related contingent consideration. For additional information related to the Spark acquisition related contingent consideration, see Note 14. Fair Value Measurements.

(16) Income Taxes

The Company’s income tax expense based on income before income taxes for the periods presented was as follows:



	Three Months Ended June 30,						Six Months Ended June 30, 2019
	2019			2018			2019			2018
	(In thousands, excluding percentages)
Income tax expense	$	3,565		$	2,586		$	6,694		$	2,555
Effective tax rate	25.4		%	40.7		%	31.2		%	72.1		%

The Company’s income tax expense for the three months ended June 30, 2019 totaled $3.6 million, resulting in an effective tax rate of 25.4%, compared to an expense of $2.6 million, and an effective tax rate of 40.7%, for the same period of 2018. The Company’s income tax expense for the six months ended June 30, 2019 totaled $6.7 million, resulting in an effective tax rate of 31.2%, compared to an expense of $2.6 million, and an effective tax rate of 72.1%, for the same period of 2018. The increase in the tax expense for the three months ended June 30, 2019, compared to the same period of 2018, was primarily attributable to increased profits in the current period, partially offset by tax benefits from the utilization of interest deductions disallowed in the prior year.

During quarter ended June 30, 2019, the Company recorded an uncertain tax benefit of $2.4 million, of which $1.5 million was for net operating losses generated in prior years with an associated valuation allowance, and $0.5 million was for a deferred tax asset for the related US federal tax benefit. A net amount of $0.4 million of this uncertain tax benefit was recorded to tax expense for the quarter ended June 30, 2019.

The Company assesses the need for any deferred tax asset valuation allowances at the end of each reporting period. The determination of whether a valuation allowance for deferred tax assets is needed is subject to considerable judgment and requires an evaluation of all available positive and negative evidence. The Company’s assessment concluded that maintaining valuation allowances on deferred tax assets in Australia, Canada, Mexico, and Spain was appropriate, as the Company currently believes that it is more likely than not that the related deferred tax assets will not be realized.

The deferred tax expenses and benefits associated with the Company’s net unrealized gains and losses on derivative instruments and foreign currency translation adjustments have been recorded in the Accumulated other comprehensive loss, net line in the accompanying Consolidated Balance Sheets.

(17) Segment Information

As of June 30, 2019, the Company’s operations consisted of its North America, Europe & Africa, and Australia & New Zealand segments. The Company’s ATM operations in the U.S., Canada, Mexico, and Puerto Rico are included in its North America segment. The North America segment also includes the Company’s transaction processing operations, which service its internal ATM operations, along with external customers. The Company’s ATM operations in the U.K., Ireland, Germany, Spain, and South Africa are included in its Europe & Africa segment, along with i-design (the Company’s ATM advertising business based in the U.K.). The Company’s Australia & New Zealand segment consists of its ATM operations in these two countries. Corporate primarily includes the Company’s corporate general and administrative expenses. While each of the reporting segments provides similar kiosk-based and/or ATM-related services, each segment is managed separately and requires different marketing and business strategies.

Management uses Adjusted EBITDA and Adjusted EBITA, together with U.S. GAAP measures, to manage and measure the performance of its segments. Management believes Adjusted EBITDA and Adjusted EBITA are useful measures as they allow management to more effectively evaluate the performance of the business and compare its results of operations from period to period without regard to financing methods, capital structure, or non-recurring costs as defined by the Company. Adjusted EBITDA and Adjusted EBITA exclude amortization of intangible assets, share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses, (if applicable in a particular period), certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company’s obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and an adjustment for noncontrolling interests. Additionally, Adjusted EBITDA excludes depreciation and accretion expense. Depreciation and accretion expense and amortization of intangible assets are excluded

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as these amounts can vary substantially from company to company within the Company’s industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired.

Adjusted EBITDA and Adjusted EBITA, as defined by the Company, are non-GAAP financial measures provided as a complement to financial results prepared in accordance with U.S. GAAP and may not be comparable to similarly-titled measures reported by other companies. In evaluating the Company’s performance as measured by Adjusted EBITDA and Adjusted EBITA, management recognizes and considers the limitations of these measurements. Accordingly, Adjusted EBITDA and Adjusted EBITA are only two of the measurements that management utilizes. Therefore, Adjusted EBITDA and Adjusted EBITA 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 measures prepared in accordance with U.S. GAAP.

The following table is a reconciliation of Net income attributable to controlling interests and available to common shareholders to EBITDA, Adjusted EBITDA, and Adjusted EBITA:



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
	(In thousands)
Net income attributable to controlling interests and available to common shareholders	$	10,471	$	3,767		$	14,790		$	999
Adjustments:
Interest expense, net	6,871		9,159			13,514			18,333
Amortization of deferred financing costs and note discount	3,330		3,355			6,622			6,663
Income tax expense	3,565		2,586			6,694			2,555
Depreciation and accretion expense	33,205		31,764			66,178			62,806
Amortization of intangible assets	12,591		13,498			25,003			27,269
EBITDA	70,033		64,129			132,801			118,625
Add back:
Loss on disposal and impairment of assets	1,496		9,697			2,464			15,117
Other expense (income) ⁽¹⁾	1,456		(2,187		)	(5,751		)	(27		)
Noncontrolling interests ⁽²⁾	16		18			31			19
Share-based compensation expense	5,250		3,513			9,734			5,958
Restructuring expenses ⁽³⁾	3,463		2,063			3,463			4,476
Acquisition related expenses ⁽⁴⁾	—		913			—			2,633
Adjusted EBITDA	81,714		78,146			142,742			146,801
Less:
Depreciation and accretion expense ⁽⁵⁾	33,205		31,764			66,178			62,805
Adjusted EBITA	$	48,509	$	46,382		$	76,564		$	83,996


(1)	Includes foreign currency translation gains/losses, the revaluation of the estimated acquisition related contingent consideration, and other non-operating costs.


(2)	Noncontrolling interest adjustment made such that Adjusted EBITDA includes only the Company’s ownership interest in the Adjusted EBITDA of one of its Mexican subsidiaries.


(3)	For the three and six months ended June 30, 2019, expenses include professional fees, employee severance costs, and facility costs related to the 2019 Restructuring Plan. For the three and six months ended June 30, 2018, expenses include employee severance and other costs incurred in conjunction with a corporate reorganization and cost reduction initiative.


(4)	For the three and six months ended June 30, 2018, expenses primarily include employee severance costs and lease termination costs related to the DCPayments acquisition.


(5)	Amounts exclude a portion of the expenses incurred by one of its Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders.

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The following tables reflect certain financial information for each of the Company’s reporting segments for the periods presented:



	Three Months Ended June 30, 2019
	North America		Europe & Africa		Australia & New Zealand			Corporate			Eliminations			Total
	(In thousands)
Revenue from external customers	$	212,670	$	103,333	$	24,818		$	—		$	—		$	340,821
Intersegment revenues	2,545		137		—			—			(2,682		)	—
Cost of revenues	143,164		63,543		17,915			366			(2,606		)	222,382
Selling, general, and administrative expenses	16,198		10,707		2,273			12,817			—			41,995
Restructuring expenses	213		400		—			2,850			—			3,463
Loss (gain) on disposal and impairment of assets	778		746		(28		)	—			—			1,496

Adjusted EBITDA	55,852		29,223		4,629			(7,934		)	(56		)	81,714

Depreciation and accretion expense	19,371		12,316		1,269			266			(17		)	33,205
Adjusted EBITA	36,481		16,908		3,359			(8,201		)	(38		)	48,509

Capital expenditures ⁽¹⁾	$	14,715	$	9,652	$	1,379		$	—		$	—		$	25,746



	Three Months Ended June 30, 2018 ⁽²⁾
	North America			Europe & Africa		Australia & New Zealand		Corporate			Eliminations			Total
	(In thousands)
Revenue from external customers	$	204,540		$	107,326	$	29,121	$	—		$	—		$	340,987
Intersegment revenues	2,566			524		—		—			(3,090		)	—
Cost of revenues	140,193			66,043		22,030		91			(2,918		)	225,439
Selling, general, and administrative expenses	15,145			9,963		2,691		13,200			(71		)	40,928
Restructuring expenses	1,073			495		—		495			—			2,063
Acquisition related expenses	(311		)	167		433		624			—			913
Loss on disposal and impairment of assets	8,612			972		113		—			—			9,697

Adjusted EBITDA	51,770			31,844		4,398		(9,778		)	(88		)	78,146

Depreciation and accretion expense	17,309			13,262		1,247		—			(54		)	31,764
Adjusted EBITA	34,461			18,583		3,153		(9,781		)	(34		)	46,382

Capital expenditures ⁽¹⁾	$	4,991		$	9,144	$	1,555	$	10,253		$	—		$	25,943

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	Six Months Ended June 30, 2019
	North America		Europe & Africa		Australia & New Zealand			Corporate			Eliminations			Total
	(In thousands)
Revenue from external customers	$	414,334	$	193,929	$	50,828		$	—		$	—		$	659,091
Intersegment revenues	5,129		466		—			—			(5,595		)	—
Cost of revenues	281,072		126,952		37,276			627			(5,462		)	440,465
Selling, general, and administrative expenses	33,464		21,453		4,514			26,224			—			85,655
Restructuring expenses	213		400		—			2,850			—			3,463
Loss (gain) on disposal and impairment of assets	1,102		1,417		(55		)	—			—			2,464

Adjusted EBITDA	104,927		45,991		9,038			(17,118		)	(96		)	142,742

Depreciation and accretion expense	38,857		24,337		2,489			533			(38		)	66,178
Adjusted EBITA	66,070		21,654		6,548			(17,651		)	(57		)	76,564

Capital expenditures ⁽¹⁾	$	32,290	$	19,900	$	2,863		$	—		$	—		$	55,053



	Six Months Ended June 30, 2018 ⁽²⁾
	North America			Europe & Africa		Australia & New Zealand		Corporate			Eliminations			Total
	(In thousands)
Revenue from external customers	$	412,074		$	205,281	$	59,816	$	—		$	—		$	677,171
Intersegment revenues	4,913			1,013		—		—			(5,926		)	—
Cost of revenues	285,580			128,573		44,971		175			(5,608		)	453,691
Selling, general, and administrative expenses	31,078			19,822		5,417		26,532			(181		)	82,668
Restructuring expenses	2,130			1,176		—		1,170			—			4,476
Acquisition related expenses	(348		)	1,516		635		830			—			2,633
Loss on disposal and impairment of assets	10,634			4,382		101		—			—			15,117

Adjusted EBITDA	100,327			57,899		9,429		(20,754		)	(100		)	146,801

Depreciation and accretion expense	33,852			26,498		2,509		—			(53		)	62,806
Adjusted EBITA	66,474			31,401		6,920		(20,753		)	(46		)	83,996

Capital expenditures ⁽¹⁾	$	10,523		$	18,544	$	3,422	$	14,193		$	—		$	46,682


(1)	Capital expenditures include payments made for plant, property, and equipment, exclusive license agreements, and site acquisition costs. Additionally, capital expenditure amounts for one of the Company’s Mexican subsidiaries, included in the North America segment, are reflected gross of any noncontrolling interest amounts.


(2)	The segment information presented for the three and six months ended June 30, 2018 has been revised to ensure consistency with the current allocation of certain intercompany revenues and expenses.

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Identifiable Assets



	June 30, 2019		December 31, 2018
	(In thousands)
North America	$	1,146,100	$	1,195,693
Europe & Africa	540,858		494,457
Australia & New Zealand	67,102		63,613
Corporate	23,949		33,581
Total	$	1,778,009	$	1,787,344

(18) Supplemental Guarantor Financial Information

The 2025 Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Cardtronics plc and certain of its subsidiaries and certain of its future subsidiaries, with the exception of Cardtronics plc’s immaterial subsidiaries and CFC Guarantors (as defined in the Credit Agreement). The guarantees of the 2025 Notes by any Guarantor are subject to automatic and customary releases upon: (i) the sale or disposition of all or substantially all of the assets of the Guarantor, (ii) the disposition of sufficient capital stock of the Guarantor so that it no longer qualifies under the Indenture as a restricted subsidiary of the Company, (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture, (iv) the legal or covenant defeasance of the notes or the satisfaction and discharge of the Indenture, (v) the liquidation or dissolution of the Guarantor, or (vi) provided the Guarantor is not wholly-owned by the Company, its ceasing to guarantee other debt of the Company or another Guarantor. A Guarantor may not sell or otherwise dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or into, another company (other than the Company or another Guarantor), unless no default under the Indenture exists and either the successor to the Guarantor assumes its guarantee of the 2025 Notes or the disposition, consolidation, or merger complies with the “Asset Sales” covenant in the Indenture.

The following information reflects the Condensed Consolidating Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2019 and 2018, the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018, and the Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018 for: (i) Cardtronics plc, the parent Guarantor of the 2025 Notes (“Parent”), (ii) Cardtronics Inc. (“Issuer”), (iii) the 2025 Notes Guarantors (the “Guarantors”), and (iv) the 2025 Notes Non-Guarantors.

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Condensed Consolidated Statements of Comprehensive Income



	Three Months Ended June 30, 2019
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Total
	(In thousands)
Revenues	$	—		$	—		$	247,328		$	96,310		$	(2,817	)	$	340,821
Operating costs and expenses	8,719			27			217,047			92,152			(2,813		)	315,132
(Loss) income from operations	(8,719		)	(27		)	30,281			4,158			(4		)	25,689
Interest expense (income), net, including amortization of deferred financing costs and note discount	—			3,233			9,848			(2,942		)	62			10,201
Equity in (earnings) loss of subsidiaries	(17,439		)	(16,585		)	(4,826		)	—			38,850			—
Other (income) expense	(112		)	299			6,324			(910		)	(4,145		)	1,456
Income before income taxes	8,832			13,026			18,935			8,010			(34,771		)	14,032
Income tax (benefit) expense	(1,635		)	(828		)	4,962			1,066			—			3,565
Net income	10,467			13,854			13,973			6,944			(34,771		)	10,467
Net loss attributable to noncontrolling interests	—			—			—			—			(4		)	(4		)
Net income attributable to controlling interests and available to common shareholders	10,467			13,854			13,973			6,944			(34,767		)	10,471
Other comprehensive loss attributable to controlling interest	(9,331		)	—			(7,430		)	(1,854		)	9,284			(9,331		)
Comprehensive income attributable to controlling interests	$	1,136		$	13,854		$	6,543		$	5,090		$	(25,483	)	$	1,140



	Three Months Ended June 30, 2018
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Total
	(In thousands)
Revenues	$	—		$	—		$	242,299		$	102,032		$	(3,344	)	$	340,987
Operating costs and expenses	6,374			12			221,384			99,916			(3,384		)	324,302
(Loss) income from operations	(6,374		)	(12		)	20,915			2,116			40			16,685
Interest expense (income), net, including amortization of deferred financing costs and note discount	—			6,619			10,528			(4,693		)	60			12,514
Equity in earnings of subsidiaries	(8,861		)	(13,071		)	(2,577		)	—			24,509			—
Other (income) expense	(91		)	51			126			(798		)	(1,475		)	(2,187		)
Income before income taxes	2,578			6,389			12,838			7,607			(23,054		)	6,358
Income tax (benefit) expense	(1,194		)	(1,655		)	3,627			1,808			—			2,586
Net income	3,772			8,044			9,211			5,799			(23,054		)	3,772
Net income attributable to noncontrolling interests	—			—			—			—			5			5
Net income attributable to controlling interests and available to common stockholders	3,772			8,044			9,211			5,799			(23,059		)	3,767
Other comprehensive (loss) income attributable to controlling interest	(28,779		)	—			13,258			(42,033		)	28,775			(28,779		)
Comprehensive (loss) income attributable to controlling interests	$	(25,007	)	$	8,044		$	22,469		$	(36,234	)	$	5,716		$	(25,012	)

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	Six Months Ended June 30, 2019
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Total
	(In thousands)
Revenues	$	—		$	—		$	483,013		$	181,741		$	(5,663	)	$	659,091
Operating costs and expenses	16,567			26			428,324			183,985			(5,674		)	623,228
(Loss) income from operations	(16,567		)	(26		)	54,689			(2,244		)	11			35,863
Interest expense (income), net, including amortization of deferred financing costs and note discount	—			6,372			19,184			(5,534		)	114			20,136
Equity in earnings loss of subsidiaries	(28,186		)	(24,629		)	(5,342		)	—			58,157			—
Other (income) expense	(22		)	270			9,395			(7,977		)	(7,417		)	(5,751		)
Income before income taxes	11,641			17,961			31,452			11,267			(50,843		)	21,478
Income tax (benefit) expense	(3,143		)	(1,544		)	9,231			2,150			—			6,694
Net income	14,784			19,505			22,221			9,117			(50,843		)	14,784
Net loss attributable to noncontrolling interests	—			—			—			—			(6		)	(6		)
Net income attributable to controlling interests and available to common shareholders	14,784			19,505			22,221			9,117			(50,837		)	14,790
Other comprehensive (loss) income attributable to controlling interest	(16,933		)	(3		)	(18,253		)	1,475			16,780			(16,934		)
Comprehensive (loss) income attributable to controlling interests	$	(2,149	)	$	19,502		$	3,968		$	10,592		$	(34,057	)	$	(2,144	)



	Six Months Ended June 30, 2018
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Total
	(In thousands)
Revenues	$	—		$	—		$	487,182		$	196,328		$	(6,339	)	$	677,171
Operating costs and expenses	11,910			9			442,180			200,937			(6,376		)	648,660
(Loss) income from operations	(11,910		)	(9		)	45,002			(4,609		)	37			28,511
Interest expense (income), net, including amortization of deferred financing costs and note discount	—			13,160			21,169			(9,393		)	60			24,996
Equity in (earnings) losses of subsidiaries	(10,642		)	(4,993		)	12,083			—			3,552			—
Other expense (income)	10			186			(3,656		)	(8,006		)	11,439			(27		)
(Loss) income before income taxes	(1,278		)	(8,362		)	15,406			12,790			(15,014		)	3,542
Income tax (benefit) expense	(2,265		)	(3,308		)	4,126			4,002			—			2,555
Net income (loss)	987			(5,054		)	11,280			8,788			(15,014		)	987
Net loss attributable to noncontrolling interests	—			—			—			—			(12		)	(12		)
Net income (loss) attributable to controlling interests and available to common shareholders	987			(5,054		)	11,280			8,788			(15,002		)	999
Other comprehensive income (loss) attributable to controlling interest	(3,793		)	(1		)	20,064			(23,852		)	3,790			(3,792		)
Comprehensive (loss) income attributable to controlling interests	$	(2,806	)	$	(5,055	)	$	31,344		$	(15,064	)	$	(11,212	)	$	(2,793	)

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Condensed Consolidated Balance Sheets



	As of June 30, 2019
	Parent		Issuer		Guarantors			Non-Guarantors		Eliminations			Total
	(In thousands)
Assets
Cash and cash equivalents	$	89	$	6	$	16,413		$	16,987	$	—		$	33,495
Accounts and notes receivable, net	—		—		58,646			27,061		—			85,707
Restricted cash	—		—		68,646			17,785		—			86,431
Other current assets	—		1,273		35,874			63,010		(18		)	100,139
Total current assets	89		1,279		179,579			124,843		(18		)	305,772
Property and equipment, net	—		—		331,426			124,331		—			455,757
Intangible assets, net	—		—		117,699			18,974		—			136,673
Goodwill	—		—		616,604			137,255		—			753,859
Operating lease assets	—		—		41,649			39,706		—			81,355
Investments in and advances to subsidiaries	381,001		204,873		171,272			—		(757,146		)	—
Intercompany receivable	13,640		233,529		216,732			380,658		(844,559		)	—
Deferred tax asset, net	754		—		(1,831		)	12,621		—			11,544
Prepaid expenses, deferred costs, and other noncurrent assets	—		706		22,429			9,914		—			33,049
Total assets	$	395,484	$	440,387	$	1,695,559		$	848,302	$	(1,601,723	)	$	1,778,009
Liabilities and Shareholders' Equity
Current portion of other long-term liabilities	$	—	$	4,029	$	22,833		$	25,485	$	—		$	52,347
Accounts payable and accrued liabilities	415		1,677		254,675			109,101		(67		)	365,801
Total current liabilities	415		5,706		277,508			134,586		(67		)	418,148
Long-term debt	—		269,519		340,123			168,909		—			778,551
Intercompany payable	33,196		69,700		619,001			125,902		(847,799		)	—
Asset retirement obligations	—		—		28,969			25,258		—			54,227
Noncurrent operating lease liabilities	—		—		46,689			26,557		—			73,246
Deferred tax liability, net	—		—		37,325			—		—			37,325
Other long-term liabilities	—		7,779		19,854			27,006		—			54,639
Total liabilities	33,611		352,704		1,369,469			508,218		(847,866		)	1,416,136
Shareholders' equity	361,873		87,683		326,090			340,084		(753,857		)	361,873
Total liabilities and shareholders' equity	$	395,484	$	440,387	$	1,695,559		$	848,302	$	(1,601,723	)	$	1,778,009

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	As of December 31, 2018
	Parent		Issuer		Guarantors			Non-Guarantors		Eliminations			Total
	(In thousands)
Assets
Cash and cash equivalents	$	89	$	6	$	26,124		$	13,721	$	—		$	39,940
Accounts and notes receivable, net	—		—		47,209			28,434		—			75,643
Restricted cash	—		—		140,145			15,325		—			155,470
Other current assets	1		4,374		38,570			52,843		(10		)	95,778
Total current assets	90		4,380		252,048			110,323		(10		)	366,831
Property and equipment, net	—		—		330,743			129,444		—			460,187
Intangible assets, net	—		—		124,236			26,611		—			150,847
Goodwill	—		—		611,632			137,512		—			749,144
Investments in and advances to subsidiaries	375,535		410,955		181,116			19,226		(986,832		)	—
Intercompany receivable	7,412		211,359		145,103			363,961		(727,835		)	—
Deferred tax asset, net	342		—		(1,688		)	10,004		—			8,658
Prepaid expenses, deferred costs, and other noncurrent assets	—		10,957		24,742			15,978		—			51,677
Total assets	$	383,379	$	637,651	$	1,667,932		$	813,059	$	(1,714,677	)	$	1,787,344
Liabilities and Shareholders' Equity
Current portion of other long-term liabilities	$	—	$	—	$	16,654		$	3,624	$	(12	)	$	20,266
Accounts payable and accrued liabilities	642		240		316,974			90,681		(67		)	408,470
Total current liabilities	642		240		333,628			94,305		(79		)	428,736
Long-term debt	—		263,507		351,292			203,686		—			818,485
Intercompany payable	5,964		69,711		562,552			92,851		(731,078		)	—
Asset retirement obligations	—		—		28,355			26,058		—			54,413
Deferred tax liability, net	—		—		40,873			325		—			41,198
Other long-term liabilities	—		2,620		25,998			39,122		—			67,740
Total liabilities	6,606		336,078		1,342,698			456,347		(731,157		)	1,410,572
Shareholders' equity	376,773		301,573		325,234			356,712		(983,520		)	376,772
Total liabilities and shareholders' equity	$	383,379	$	637,651	$	1,667,932		$	813,059	$	(1,714,677	)	$	1,787,344

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Condensed Consolidated Statements of Cash Flows



	Six Months Ended June 30, 2019
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Total
	(In thousands)
Net cash provided by operating activities	$	21,383		$	6,265		$	(27,005	)	$	54,587		$	—	$	55,230
Additions to property and equipment				—			(43,374		)	(11,679		)	—		(55,053		)
Acquisitions, net of cash acquired	—			—			(9,100		)	—			—		(9,100		)
Net cash used in investing activities	—			—			(52,474		)	(11,679		)	—		(64,153		)
Proceeds from borrowings under revolving credit facility	—			70,700			130,936			88,874			—		290,510
Repayments of borrowings under revolving credit facility	—			(70,700		)	(142,306		)	(123,316		)	—		(336,322		)
Intercompany financing	737			(6,266		)	9,878			(4,349		)	—		—
Tax payments related to share-based compensation	(2,022		)	—			—			—			—		(2,022		)
Proceeds from exercises of stock options	2			—			—			—			—		2
Repurchase of common shares	(20,100		)	—			—			—			—		(20,100		)
Net cash used in financing activities	(21,383		)	(6,266		)	(1,492		)	(38,791		)	—		(67,932		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			687			684			—		1,371
Net (decrease) increase in cash, cash equivalents, and restricted cash	—			(1		)	(80,284		)	4,801			—		(75,484		)
Cash, cash equivalents, and restricted cash as of beginning of period	89			7			165,343			29,971			—		195,410
Cash, cash equivalents, and restricted cash as of end of period	$	89		$	6		$	85,059		$	34,772		$	—	$	119,926

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	Six Months Ended June 30, 2018
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Total
	(In thousands)
Net cash provided by (used in) operating activities	$	2,506		$	(100	)	$	120,812		$	(13,443	)	$	—	$	109,775
Additions to property and equipment	—			—			(31,246		)	(15,436		)	—		(46,682		)
Net cash used in investing activities	—			—			(31,246		)	(15,436		)	—		(46,682		)
Proceeds from borrowing under revolving credit facility	—			192,000			24,602			128,908			—		345,510
Repayments of borrowings under revolving credit facility	—			(191,900		)	(81,028		)	(118,062		)	—		(390,990		)
Intercompany financing	—			—			(2,106		)	2,106			—		—
Tax payments related to share-based compensation	(2,506		)	—			—			—			—		(2,506		)
Net cash (used in) provided by financing activities	(2,506		)	100			(58,532		)	12,952			—		(47,986		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—			—			(1,624		)	66			—		(1,558		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	—			—			29,410			(15,861		)	—		13,549
Cash, cash equivalents, and restricted cash as of beginning of period	89			6			51,500			48,222			—		99,817
Cash, cash equivalents, and restricted cash as of end of period	$	89		$	6		$	80,910		$	32,361		$	—	$	113,366

(19) Concentration Risk

Significant merchant customers. During the trailing twelve months ended June 30, 2019, the Company derived approximately 24% of its total revenues from ATMs placed at the locations of its top five merchant customers. The Company’s top five merchant customers, none accounting for more than 7% of total revenue for the trailing twelve months ended June 30, 2019, were Co-operative Food (in the U.K.), CVS Caremark Corporation, Alimentation Couche-Tard Inc. (in the U.S. and Canada), Speedway LLC, and Walgreens Boots Alliance, Inc. Accordingly, a significant percentage of the Company’s future revenues and operating income will be dependent upon the successful continuation of its relationship with these merchants.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbor provisions thereof. Forward-looking statements can be identified by words such as “project,” “believe,” “estimate,” “expect,” “future,” “anticipate,” “intend,” “contemplate,” “foresee,” “would,” “could,” “plan,” and similar expressions that are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Company will be those that are anticipated. All comments concerning the Company’s expectations for future revenues and operating results are based on its estimates for its existing operations and do not include the potential impact of any future acquisitions. The Company’s forward-looking statements involve significant risks and uncertainties (some of which are beyond its control) and assumptions that could cause actual results to differ materially from its historical experience and present expectations or projections. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include:


•	the Company’s financial outlook and the financial outlook of the automated teller machines and multi-function financial services kiosks (collectively, “ATMs”) industry and the continued usage of cash by consumers at rates near historical patterns;


•	the Company’s ability to respond to recent and future network and regulatory changes;


•	the Company’s ability to renew its existing merchant relationships on comparable or improved economic terms and add new merchants;


•	changes in interest rates and foreign currency rates;


•	the Company’s ability to successfully manage its existing international operations and to continue to expand internationally;


•	the Company’s ability to manage concentration risks with and changes in the mix of key customers, merchants, vendors, and service providers;


•	the Company’s ability to prevent thefts of cash and maintain adequate insurance;


•	the Company’s ability to manage cybersecurity risks and protect against cyber-attacks and manage and prevent cyber incidents, data breaches or losses, or other business disruptions;


•	the Company’s ability to respond to changes implemented by networks and how they determine interchange, and potential reductions in the amount of net interchange that it receives from global and regional debit networks due to pricing changes implemented by those networks as well as changes in how issuers route their ATM transactions over those networks;


•	the Company’s ability to provide new ATM solutions to retailers and financial institutions including the demand for any such new ATM solutions as well as its ability to place additional banks’ brands on ATMs currently deployed;


•	the Company’s ATM vault cash rental needs, including potential liquidity issues with its vault cash providers and its ability to continue to secure vault cash rental agreements in the future and once secured, on reasonable economic terms;


•	the Company’s ability to manage the risks associated with its third-party service providers failing to perform their contractual obligations;


•	the Company’s ability to renew its existing third-party service provider relationships on comparable or improved economic terms;


•	the Company’s ability to successfully implement and evolve its corporate strategy;


•	the Company’s ability to compete successfully with new and existing competitors;


•	the Company’s ability to meet the service levels required by its service level agreements with its customers;


•	the additional risks the Company is exposed to in its United Kingdom (“U.K.”) armored transport business;


•	the Company’s ability to pursue, complete, and successfully integrate acquisitions, strategic alliances, or joint ventures;


•	the impact of changes in laws, including tax laws, that could adversely affect the Company’s business and profitability;


•	the impact of, or uncertainty related to, the U.K.’s planned exit from the European Union, including any material adverse effect on the tax, tax treaty, currency, operational, legal, human, and regulatory regime and macro-economic environment to which it will be subject to as a U.K. company;


•	the Company's ability to manage the potential impact of a determination to make changes to LIBOR, if any;


•	the Company’s ability to adequately maintain and upgrade its ATM fleet to address changes in industry standards, regulations and consumer behavior patterns;


•	the Company’s ability to retain its key employees and maintain good relations with its employees; and


•	the Company’s ability to manage the fluctuation of its operating results, including as a result of the foregoing and other risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

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For additional information regarding known material factors that could cause the Company’s actual results to differ from its projected results, see: Part I. Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. 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. Except as required by applicable law, the Company undertakes 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.

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

Overview

Cardtronics plc provides convenient automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks (collectively referred to as “ATMs”). As of June 30, 2019, we were the world’s largest ATM owner/operator, providing services to over 290,000 ATMs. During the three months ended June 30, 2019, 62% of our total revenues were derived from operations in North America (including our ATM operations in the United States ("U.S."), Canada, and Mexico), 30% of our total revenues were derived from operations in Europe and Africa (including our ATM operations in the United Kingdom ("U.K."), Ireland, Germany, Spain, and South Africa), and 8% of our total revenues were derived from operations in Australia and New Zealand. Included in our network as of June 30, 2019 were approximately 204,000 ATMs to which we provided processing only services or various forms of managed services solutions. Under a managed services arrangement, retailers, financial institutions, and ATM distributors 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, fee per transaction, or fee per service provided.

Through our network, we deliver various ATM-based financial services to cardholders and provide ATM management and ATM equipment-related services (typically under multi-year contracts) to large retail merchants, smaller retailers, financial institutions, and operators of facilities such as shopping malls, airports, and train stations. In doing so, we provide our retail and financial institution partners with a compelling automated financial services solution that helps attract and retain customers, and in turn, increases the likelihood that our ATMs will be utilized. We also own and operate electronic funds transfer (“EFT”) transaction processing platforms that provide transaction processing services to our network of ATMs, as well as to other ATMs operated under managed services arrangements. Additionally, we also provide processing services for issuers of debit cards.

We also own and operate the Allpoint network (“Allpoint”), the largest surcharge-free ATM network (based on the number of participating ATMs). Allpoint, with approximately 55,000 participating ATMs, provides surcharge-free ATM access to approximately 1,200 participating credit unions, banks, and stored-value debit card issuers that are principally located in North America. For participants, Allpoint provides scale, density, and convenience of surcharge-free ATMs that surpasses the largest banks in the U.S. In exchange, Allpoint earns either a fixed monthly fee per cardholder or a fixed fee per transaction that is paid by the participants. Allpoint includes a majority of our Company's ATMs in the U.S. and certain ATMs in the U.K., Canada, Mexico, and Australia. Allpoint also provides services to organizations 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 organizations pay us a fee per issued stored-value debit card or per transaction in return for allowing the users of those cards surcharge-free access to Allpoint’s ATM network.

For additional information related to our operations and the manner in which we derive revenues, see our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”).

Strategic Outlook

Over the past several years, we have expanded our operations and the capabilities and service offerings of our ATMs through strategic acquisitions and investments, continued to deploy ATMs in high-traffic locations under contracts with well-known retailers, and expanded our relationships with leading financial institutions through the growth of Allpoint, our surcharge-free ATM network and our bank-branding programs. We have also expanded our ATM capabilities and service offerings to financial institutions, as we are seeing increasing interest from financial institutions for outsourcing of ATM-related services due to our cost efficiency advantages and higher service levels, as well as the role that our ATMs can play in maintaining financial institutions physical presence for their customers as they reduce their physical branches. We have also expanded our capabilities and are in the process of deploying deposit-taking ATMs in certain locations within the U.S. Additionally, we have enabled 11,000 of our ATMs in the U.S. with cardless cash access and plan to enable additional ATMs with these capabilities in the future.

We have completed several acquisitions in the last seven years, including, but not limited to: (i) eight U.S. and Canada based ATM operators, expanding our ATMs in both multi-unit regional retail chains and individual merchant ATM locations in North America, (ii) Cardpoint Limited (“Cardpoint”) in August 2013, which further expanded our U.K. ATM operations and allowed us to enter into the German market, (iii) Sunwin in November 2014, which further expanded our cash-in-transit and maintenance servicing capabilities in the U.K. and allowed us to acquire and operate ATMs located at Co-op Food stores, (iv) DirectCash Payments Inc. ("DCPayments") in January 2017, a leading ATM operator with operations in Australia, New Zealand, Canada, the U.K., and Mexico, (v) Spark in January 2017, an independent ATM deployer operating in South Africa, and (vi) various other less significant ATM asset and contract acquisitions. In addition to these ATM acquisitions, we have also made strategic acquisitions including: i-design in March 2013, a Scotland-based provider and developer of marketing and advertising software and services for ATM operators, and (ii) multiple leading independent transaction processors who provide solutions to ATM sales and service organizations and financial institutions.

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We will continue to expand our ATM footprint organically and launch new products and services that will allow us to further leverage our existing ATM network. We may also explore acquisitions that are deemed strategic opportunities. We see opportunities to expand our operations through the following efforts:


•	expanding our relationships with leading financial institutions;


•	working with non-traditional financial institutions and card issuers to further leverage our extensive ATM network;


•	increasing transaction levels at our existing locations;


•	increasing the number of deployed ATMs with existing and new merchant relationships;


•	developing and providing additional services at our existing ATMs;


•	pursuing additional managed services opportunities; and


•	pursuing opportunities to expand into new international markets over time.

For additional information related to each of our strategic points above, see Part I. Item 1. Business - Our Strategy in our 2018 Form 10-K.

Developing Trends and Recent Events

Reduction of physical branches by financial institutions in the U.S., the U.K., and other geographies. Due primarily to the expansion of services available through digital channels, such as online and mobile, and financial institution customers’ preferences towards these digital channels, many financial institutions have been de-emphasizing traditional physical branches. This trend toward shifting more customer transactions to online and ATMs has helped financial institutions lower their operating costs. As a result, many banks have been reducing the number of physical branches they operate. However, financial institution customers still consider convenient access to ATMs to be an important criteria for maintaining an account with a particular financial institution. The closing of physical branches generally results in a removal of the ATMs that were at the closed branch locations and may create a void in physical presence for that financial institution. This creates an opportunity for us to provide the financial institution’s customers with convenient access to ATMs and to work with the financial institutions to preserve branded or unbranded physical points of presence through our ATM network.

Increase in surcharge-free offerings in the U.S. Many U.S. national and regional financial institutions 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 cardholders. Bank-branding of ATMs and participation in surcharge-free networks allow financial institutions to rapidly increase surcharge-free ATM access for their customers at a lower cost than owning and operating ATM networks. Additionally, many financial institutions find that providing convenient and free access to ATMs is an important factor in customers establishing or maintaining an account with a particular institution. These factors have led to an increase in bank-branding and participation in surcharge-free ATM networks and we believe that there will be continued growth in such arrangements.

Managed services. While many financial institutions (and some retailers) own and operate significant ATM networks that serve as extensions of their physical branches and increase the level of service offered to their customers, large ATM networks are costly to own and operate and typically do not provide significant revenue for financial institutions or retailers. Owning and operating an ATM network is not a core competency for the majority of financial institutions and retailers; therefore, we believe there is an opportunity for a large non-bank ATM owner/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 arrangement could reduce a financial institution or retailer’s operating costs while extending their customer service. Additionally, we believe there are opportunities to provide selected ATM-related services on an outsourced basis, such as transaction processing services, to other independent owners and operators of ATMs.

Growth in other automated consumer financial services. The majority of all ATM transactions in our geographies are cash withdrawals, with the remainder representing other banking functions such as balance inquiries and balance transfers. We believe that there are opportunities for a large non-bank ATM owner/operator, such as ourselves, to facilitate additional financial services with customers, such as deposit taking, money transfers, and stored-value debit card reload services. These additional automated consumer financial services could result in additional revenue streams for us and could ultimately result in increased profitability. However, they generally would require additional capital expenditures on our part to offer these services more broadly and would increase regulatory compliance activities. We have commenced a plan to deploy nearly 1,000 deposit-taking ATMs in certain locations in the U.S. and may deploy additional deposit-taking ATMs in the future.

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Increase in usage of stored-value debit cards. In the U.S., we have seen a proliferation in the issuance and acceptance of stored-value debit cards as a means for consumers to access their cash and make routine retail purchases over the past ten years. Based on published studies, the value loaded on stored-value debit cards such as open loop network-branded money and financial services cards, payroll and benefit cards, and social security cards is expected to continue to increase in the next few years.

We believe that our network of ATMs, located in well-known retail establishments throughout the U.S., provides a convenient and cost-effective way for stored-value cardholders to access their cash and potentially conduct other financial services transactions. Furthermore, through Allpoint, we partner with financial institutions that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, and we are able to provide the users of those cards convenient, surcharge-free access to their cash.

Growth in other markets. In most regions of the world, ATMs are less common than in the U.S. and the U.K. (our two largest markets). We believe the ATM industry will grow faster in certain international markets, as the number of ATMs per capita in those markets increases and begins to approach the levels in the U.S. and the U.K. We believe there is further growth potential for non-branch ATMs in the other geographic markets in which we operate.

•

United Kingdom. The U.K. is the largest ATM market in Europe. According to LINK (which connects the ATM networks of all the U.K. ATM operators), approximately 63,000 ATMs were deployed in the U.K. as of December 2018, of which approximately 60% were operated by non-banks (inclusive of our nearly 18,000 ATMs). Electronic payment alternatives have gained popularity in the U.K. and we have seen both the number of ATM deployments and total withdrawals slow in recent years. In light of recent changes to the LINK interchange rate that includes a 5% decrease that came into effect on July 1, 2018 and a second additional 5% decrease in the LINK interchange rate that came into effect on January 1, 2019, we have changed certain of our ATMs to pay-to-use, whereby we no longer receive interchange from customers' banks, but instead, the customer now pays us a convenience fee. We have also removed certain ATMs from service and have taken other measures to mitigate the impact of the LINK interchange reduction. For additional information, see Decrease in interchange rates below. We believe there are emerging opportunities with financial institutions in this market to outsource certain components of their ATM operations and we are actively working to grow our offerings for such services.

•

Germany. There are approximately 58,000 ATMs in Germany that are primarily deployed in bank branch locations. The top four independent ATM deployers account for less than 10% of the market as of December 31, 2018. Cardtronics entered the German market in August 2013 through the acquisition of Cardpoint. Cardtronics is presently the largest independent ATM deployer in Germany with approximately 1,600 ATMs. The German ATM market is highly fragmented and may be under-deployed, based on its population’s high use of cash relative to other markets in which we operate, such as the U.S. and the U.K. As a result, this fragmented and potentially under-deployed ATM market is attractive to us and we believe there are a number of opportunities for growth in this market. We have continued to expand our ATM count in this market by adding new ATMs with new retail partners, such as Total, and have also added free-to-use ATM access to bank customers, such as Postbank.

•

Canada. We entered the Canadian market in October 2011, and in January 2017, we significantly expanded our operations in Canada through our acquisition of DCPayments. We expect to continue to grow our number of ATM locations in this market. We currently operate approximately 11,000 ATMs in this market and estimate that there are currently approximately 70,000 ATMs in total in the Canadian market. As we plan to expand our footprint in Canada, we also plan to seek additional partnerships with financial institutions to implement bank-branding and other financial services, similar to our bank-branding and surcharge-free strategy in the U.S.


•	Mexico. There are approximately 50,000 ATMs in Mexico, most of which are owned by national and regional financial institutions. We currently operate approximately 1,000 ATMs in Mexico and plan to selectively pursue growth opportunities with merchants and financial institutions in the region.


•	Spain. In October 2016, we launched our business in Spain, joining a top Spain ATM network and signing agreements to provide ATMs at multiple retail chains. There are approximately 51,000 ATMs in Spain, and we currently operate a very small portion. We plan to continue to grow in this market through additional merchant and financial institution relationships.

•

Australia and New Zealand. In January 2017, in connection with our acquisition of DCPayments, we expanded operations into Australia and New Zealand. The Australian ATM market has been significantly impacted by the removal of surcharge fees by the major banks to non-customers at their ATMs. The Australian and New Zealand ATM market is comprised of approximately 30,000 ATMs, and we are the largest independent ATM deployer in this region with approximately 9,000

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ATMs. For further information regarding the removal of surcharge fees, see Australia market changes and asset impairment below. We believe there are opportunities for longer-term growth in Australia, which would likely include expansion of services to financial institutions in this market.

•

South Africa. In January 2017, in connection with our acquisition of Spark, we obtained operations in South Africa. Spark is a leading independent ATM operator in South Africa, and we have recently grown in this market by expanding the number of ATMs we operate. We expect to continue to grow in this market with merchants and financial institutions. We operate approximately 3,800 ATMs in South Africa and estimate that this market has approximately 34,000 ATMs in total.

Increase in surcharge rates. As financial institutions increase the surcharge rates charged to non-customers for the use of their ATMs, it enables us to increase the surcharge rates charged on our ATMs in selected markets. We also believe that higher surcharge rates in the market make our surcharge-free offerings more attractive to consumers and other financial institutions.

Decrease in interchange rates. The interchange rates paid to independent ATM deployers, such as ourselves, are in some cases set by the various EFT networks and major interbank networks through which the transactions conducted on our ATMs are routed. In past years, certain networks have reduced the net interchange rates paid to ATM deployers for ATM transactions in the U.S. by reducing the transaction rates charged to financial institutions and increasing per transaction fees charged by the networks to ATM operators. In addition to the impact of the net interchange rate decrease, we saw certain financial institutions migrate their volume away from some networks to take advantage of the lower pricing offered by other networks, resulting in lower net interchange rates per transaction realized by us. If financial institutions move to take further advantage of lower interchange rates, or if networks reduce the interchange rates they currently pay to ATM deployers or increase their network fees, our future revenues and gross profits could be negatively impacted. We have taken measures to mitigate our exposure to interchange rate reductions by networks, including, but not limited to: (i) where possible, routing transactions through a preferred network such as Allpoint, where we have influence over the per transaction rate, (ii) negotiating directly with our financial institution partners for contractual interchange rates on transactions involving their customers, (iii) developing contractual protection from such rate changes in our agreements with merchants and financial institution partners, and (iv) negotiating pricing directly with certain networks.

Interchange rates in the U.K. are primarily set by LINK, the U.K.’s major interbank ATM network. LINK has historically set these rates annually using a cost-based methodology that incorporates ATM service costs from two years prior (i.e., operating costs from 2017 are considered for determining the 2019 interchange rate). In addition to LINK transactions, certain card issuers in the U.K. have issued cards that are not affiliated with the LINK network, and instead carry the Visa or MasterCard network brands. In recent years, transactions conducted on our ATMs from these cards have totaled approximately 4% of our annual withdrawal transactions in the U.K. For these transactions, we receive interchange revenues based on rates that are set by Visa or MasterCard, respectively. The interchange rates set by Visa and MasterCard have historically been less than the rates that have been established by LINK. In July 2018, the LINK interchange rate was reduced by 5% and an additional 5% rate reduction commenced on January 1, 2019. There are no further scheduled rate reductions at this time, but the impact of the recent rate reductions has adversely impacted our revenues and profits in the U.K. We continue to evaluate and assess the impact of interchange rate changes on our U.K. business and have taken certain actions and may continue to take additional actions to mitigate the impact of the current and potential future price reductions. Our mitigating activities have included, and may in the future include, removal of lower profitability sites, contract renegotiations with certain merchants, and conversion of certain ATMs to pay-to-use. The first 5% rate reduction that occurred on July 1, 2018, adversely impacted our 2018 profits by approximately $8 million, when taken together with other rate reductions. The second 5% decrease in the LINK interchange rate occurred January 1, 2019. On an unmitigated basis, we expect that these rate reductions will adversely impact our operating income by approximately $19 million in 2019. LINK implemented a Financial Inclusion Program intended to preserve free-to-use ATMs in certain remote and under-served areas, and we are participating in this program. Should there be any additional significant change in the LINK scheme or its membership, our U.K. revenues and profits could be more adversely impacted. During the three months ended June 30, 2019, 16.8%, 10.6%, and 0.4% of our total ATM operating revenues were derived from interchange fees in Europe & Africa, North America, and Australia & New Zealand, respectively. A portion of these revenues are subject to pricing changes that we may be unable to offset through lower payments to merchants.

Withdrawal transaction and revenue trends - U.S. Many financial institutions are shifting traditional teller based transactions to online activities and ATMs to reduce their operating costs. Additionally, many financial institutions are reducing the number of physical branches they own and operate in order to lower their operating costs. As a result of these current trends, we believe there has been increasing demand for automated banking solutions, such as ATMs. Bank-branding of our ATMs and participation in our surcharge-free ATM network allow financial institutions to rapidly increase and maintain surcharge-free ATM access for their customers at a substantially lower cost than owning and operating an ATM network themselves. We believe there is continued opportunity for a large non-bank ATM owner/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 arrangement could reduce a financial

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institution’s operating costs while extending its customer service. Furthermore, we believe there are opportunities to provide selected ATM-related services on an outsourced basis, such as transaction processing services, to other independent owners and operators of ATMs. Over the last several years, we have seen increased participation in Allpoint, and growth in bank-branding and managed services. We believe that there will be continued growth in all three areas.

U.S. same-store cash withdrawal transactions during the three months ended June 30, 2019 increased approximately 3% from the same period in 2018. Growth in Allpoint and bank-branding transactions has positively impacted the same-store growth rate, driven by the expansion in the number of ATMs in Allpoint, growth in the number of financial institutions participating in Allpoint and branding our ATMs, and increased marketing efforts to existing Allpoint and bank-branding customers.

7-Eleven U.S. relationship. The Company had a long standing relationship with 7-Eleven in the U.S. that ended during the quarter ended March 31, 2018. In previous periods, this relationship accounted for a material portion of the Company’s consolidated revenues and profits. The Company began a transition to 7-Eleven’s new service provider during the third quarter of 2017 that was completed in February 2018. 7-Eleven in the U.S. accounted for less than 1% of total revenues in 2018, all of which was earned in the first quarter of 2018.

Withdrawal transaction and revenue trends - U.K. Historically, the majority of our ATMs in the U.K. have been free-to-use ATMs, meaning the transaction is free to the consumer and we earn an interchange rate paid by the customer’s bank. We also operate surcharging or pay-to-use ATMs, which are now increasing in the market and in our ATM estate due to the LINK interchange rate reduction discussed above. During the three months ended June 30, 2019, same-store cash withdrawal transactions at our ATMs in the U.K were down 3% compared to the same period in 2018. We believe the growth rate was adversely impacted by changes in consumer payments behavior, where consumers are conducting more tap and pay (non-cash) transactions for small payments at retailers and by a decreased number of ATMs in the market.

Australia market changes and asset impairment. In September 2017, Australia’s four largest banks, Commonwealth Bank of Australia (“CBA”), Australia and New Zealand Banking Group Limited (“ANZ”), Westpac Banking Corporation (“Westpac”), and National Australia Bank (“NAB”), each separately announced decisions to remove all direct charges (or "surcharges") to all users on domestic ATM transactions completed at their respective ATM networks, effectively creating a free-to-use network of ATMs that did not exist previously. Collectively, these four banks account for approximately one third of the total ATMs in Australia. CBA removed the direct charges in late September 2017, and Westpac, ANZ, and NAB removed the direct charges soon thereafter in October 2017. During the three months ended September 30, 2017, we performed qualitative and quantitative analysis and recognized an impairment of our Australia and New Zealand reporting unit in response to expected revenue and profit declines in this market following the banks’ removal of the direct charges.

Australia has historically been a direct charge ATM market, where cardholders have paid a fee (or "surcharge") to the operator of an ATM for each transaction, unless the ATM where the transaction was completed was part of the cardholder’s issuing bank ATM network. There is no broad interchange arrangement in Australia between card issuers and ATM operators to compensate the ATM operator for its service to a financial institution’s cardholder in the absence of the direct charge to the cardholders. During the three months ended June 30, 2019, approximately 80% of the Company’s revenues in Australia were sourced from direct charges paid by cardholders. Consequently, the actions taken by the largest banks in Australia in 2017 resulted in a significant increase in the availability of free-to-use ATMs and could, in the future, result in a significant decrease in our revenues. While the direct impact we have experienced has been limited to date, the ultimate impact of this action could increase over time as consumers’ behavior patterns change as a result of the introduction of a large number of free-to-use ATMs in Australia that did not previously exist.

Alternative payment options. We face indirect competition from alternative payment options, including card-based and mobile phone-based contactless payment technology in all of our markets. Australia and the U.K. have reported increasing rates of contactless payment use. Prior to our acquisition of DCPayments and since our ownership of the Australian component of the business, we have observed declines in transactions at Australian ATMs, as cash-based payments have declined as a percentage of total payments in recent years, with growth in contactless payments appearing to be the primary driver of the decline. Several banks in the U.S. have issued or are in the process of issuing contactless cards to their customers, enabling an additional payment choice for U.S. consumers. U.S. consumer adoption of this new payment choice could impact our transactions in the future in the U.S.

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Capital investments. Our capital investments in 2017 and 2016 included significant expenditures to upgrade and replace ATMs at certain locations in response to certain changes in network operating rules. Our capital spending in 2019 has been and will continue to be driven by the following: (i) our strategic initiatives to enhance the consumer experience at our ATMs and drive transaction growth, (ii) certain software and hardware enhancements required to facilitate our strategic initiatives, enhance security, and retain the necessary support, (iii) other compliance related matters including terminal upgrades required due to polymer note introductions, (iv) long-term renewals of existing merchant contracts, (v) growth opportunities across our enterprise, and (vi) investments in the infrastructure of our business, including the implementation of an enterprise resource planning (“ERP”) system which was substantially completed during the six months ended June 30, 2019.

U.K. planned exit from the European Union (“Brexit”). On March 29, 2017, the U.K. government officially triggered Article 50 of the Treaty on the European Union ("EU"), which commenced the process for the U.K. to exit the EU. The U.K. was originally scheduled to exit the EU on March 29, 2019, subject to a transition period extending through December 2020. However, as of March 29, 2019, the British Parliament had not approved the withdrawal agreement that had been negotiated by representatives of the British government and the EU. On April 10, 2019, prior to the end of an initial two week extension, the EU extended the deadline for the U.K. to approve the negotiated withdrawal agreement to October 31, 2019. Given the delay, there remains considerable uncertainty associated with the timing and terms of the withdrawal. Failure to obtain parliamentary approval of the negotiated withdrawal agreement would mean that the U.K. would leave the EU with no agreement (a so-called “hard Brexit”). Although the ultimate impact of Brexit on our business is unknown, we continue to monitor the negotiation of a withdrawal agreement and of a future relationship between the EU and the U.K.

Dynamic Currency Conversion ("DCC"). Effective April 13, 2019, Visa allows DCC on international ATM transactions globally. This rule allows us to expand our DCC offerings in certain of our markets, and we are currently in the process of deploying DCC at many of our ATMs across our network. On March 19, 2019, the European Parliament adopted Regulation 2019/518 applicable to DCC charges. The additional transparency and price comparability requirements on DCC transactions are effective from April 2020. Our DCC revenues currently account for approximately 3% our total revenues, the majority of which is derived from our U.K. operations. With the timing of Brexit delayed, we are uncertain, at this time, if this new proposed regulation will have any significant impact on our revenues. Regardless of the outcome of Brexit and whether the U.K. adopts the EU proposed regulations, we do not believe this regulation will have a material impact on our revenues based on our current operations and the intended purpose of the proposed regulations.

Restructuring Expenses. During 2017 and 2018, we implemented a global corporate reorganization and cost reduction initiative (the "2017 and 2018 Restructuring Plan”), intended to improve our cost structure and operating efficiency. The 2017 and 2018 Restructuring Plan included workforce reductions, facilities closures, contract terminations, and other cost reduction measures. During the three and six months ended June 30, 2018, we incurred pre-tax charges of $2.1 million and $4.5 million, related to the 2017 and 2018 Restructuring Plan, primarily consisting of employee severance.

During the three months ended June 30, 2019, we incurred $3.5 million of pre-tax charges primarily consisting of professional fees, employee severance costs, and facility costs related to a planned reorganization (the "2019 Restructuring Plan").

Next generation bank note upgrade in Australia. Next generation bank notes are in the process of being introduced by the Reserve Bank of Australia. The new $5 note was introduced on September 1, 2016, and the new $50 note, the most widely disseminated note in Australia, was introduced on October 18, 2018. The new $20 note and $100 note are expected to be issued in October 2019 and 2020, respectively. The introduction of these next generation bank notes has required upgrades to software and physical ATM components on our ATMs in Australia.

U.S. Tax Reform. On December 22, 2017, House of Representatives 1 (“H.R. 1”), originally known as the Tax Cuts and Jobs Act (“U.S. Tax Reform”) was enacted and signed into legislation. In accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP” or “GAAP”), the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. As a result of this legislation, during the three months ended December 31, 2017, we provisionally recognized one-time net tax benefits totaling $11.6 million. In accordance with Securities and Exchange Commission ("SEC") Accounting Bulletin No.118 during 2018, we reduced the estimated one-time tax related to U.S. Tax Reform by $0.4 million and completed our accounting for the tax effects of this change in law.

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Acquisitions. On January 6, 2017, we completed the acquisition of DCPayments, a leading operator of approximately 25,000 ATMs with operations in Australia, New Zealand, Canada, the U.K., and Mexico. On January 31, 2017, we completed the acquisition of Spark, an independent ATM operator in South Africa, with a growing network of approximately 2,300 ATMs. The agreed purchase consideration for Spark included initial cash consideration, paid at closing, and potential additional contingent consideration. The additional purchase consideration is contingent upon Spark achieving certain agreed upon earnings targets in 2019 and 2020 to be paid in 2020 and 2021, respectively. In May 2019, we acquired ATM processing contracts for approximately 62,000 ATMs in our North America segment.

Cybersecurity trends. We electronically process and transmit cardholder information as part of our transaction processing services. Companies that process and transmit cardholder information, such as ours, have been specifically and increasingly targeted in recent years by sophisticated criminal organizations in an effort to obtain information and utilize it for fraudulent transactions. Additionally, the risk of unauthorized circumvention of system controls has been heightened by advances in computer capabilities and increasing sophistication of hackers. We take a risk-based approach to cybersecurity, and in recognition of the growing threat within our industry and the general marketplace, we proactively make strategic investments in our security infrastructure, technical and procedural controls, and regulatory compliance activities. We also apply the knowledge gained through industry and government organizations to continuously improve our technology, processes and services to detect, mitigate and protect our information. Cybersecurity and the effectiveness of our cybersecurity strategy are regular topics of discussion at Board of Director meetings. We expect to continue to focus attention and resources on our security protection protocols, including repairing any system damage and deploying additional personnel, as well as protecting against any potential reputational harm. The cost to remediate any damages to our information technology systems suffered as a result of a cyber-attack could be significant.

Factors Impacting Comparability Between Periods

•

Foreign currency exchange rates. Our reported financial results are subject to fluctuations in foreign currency exchange rates. We estimate that the year-over-year fluctuation of the currencies in the markets in which we operate relative to the U.S. dollar caused our reported total revenues to be lower by $9.8 million and $21.2 million during the three and six months ended June 30, 2019, respectively.


•	7-Eleven ATM removal. The 7-Eleven ATM placement agreement in the U.S. expired in July 2017, and all ATM operations in the U.S. were transitioned to the new service provider by the end of February 2018. 7-Eleven in the U.S accounted for $5.4 million, or less than 1% of total revenues during the six months ended June 30, 2018.

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Results of Operations

The following Consolidated Statements of Operations reflects each line as a percentage of total revenues for the periods indicated. Percentages may not add due to rounding.



	Three months ended June 30,										Six Months ended June 30,
	2019					2018					2019					2018
	(In thousands, excluding percentages)
Revenues:
ATM operating revenues	$	323,081		94.8	%	$	329,221		96.5	%	$	625,683		94.9	%	$	648,952		95.8	%
ATM product sales and other revenues	17,740			5.2		11,766			3.5		33,408			5.1		28,219			4.2
Total revenues	340,821			100.0		340,987			100.0		659,091			100.0		677,171			100.0
Cost of revenues:
Cost of ATM operating revenues ⁽¹⁾	208,081			61.1		215,353			63.2		414,239			62.9		430,843			63.6
Cost of ATM product sales and other revenues	14,301			4.2		10,086			3.0		26,226			4.0		22,848			3.4
Total cost of revenues	222,382			65.2		225,439			66.1		440,465			66.8		453,691			67.0
Operating expenses:
Selling, general, and administrative expenses ⁽²⁾	41,995			12.3		40,928			12.0		85,655			13.0		82,668			12.2
Restructuring expenses	3,463			1.0		2,063			0.6		3,463			0.5		4,476			0.7
Acquisition related expenses	—			—		913			0.3		—			—		2,633			0.4
Depreciation and accretion expense	33,205			9.7		31,764			9.3		66,178			10.0		62,806			9.3
Amortization of intangible assets	12,591			3.7		13,498			4.0		25,003			3.8		27,269			4.0
Loss on disposal and impairment of assets	1,496			0.4		9,697			2.8		2,464			0.4		15,117			2.2
Total operating expenses	92,750			27.2		98,863			29.0		182,763			27.7		194,969			28.8
Income from operations	25,689			7.5		16,685			4.9		35,863			5.4		28,511			4.2
Other expenses:
Interest expense, net	6,871			2.0		9,159			2.7		13,514			2.1		18,333			2.7
Amortization of deferred financing costs and note discount	3,330			1.0		3,355			1.0		6,622			1.0		6,663			1.0
Other expense (income)	1,456			0.4		(2,187		)	(0.6	)	(5,751		)	(0.9	)	(27		)	—
Total other expenses	11,657			3.4		10,327			3.0		14,385			2.2		24,969			3.7
Income before income taxes	14,032			4.1		6,358			1.9		21,478			3.3		3,542			0.5
Income tax expense	3,565			1.0		2,586			0.8		6,694			1.0		2,555			0.4
Net income	10,467			3.1		3,772			1.1		14,784			2.2		987			0.1
Net (loss) income attributable to noncontrolling interests	(4		)	—		5			—		(6		)	—		(12		)	—
Net income attributable to controlling interests and available to common shareholders	$	10,471		3.1	%	$	3,767		1.1	%	$	14,790		2.2	%	$	999		0.1	%

(1)

Excludes effects of depreciation, accretion, and amortization of intangible assets of $38.0 million and $36.5 million for the three months ended June 30, 2019 and 2018, respectively, and $75.0 million and $73.7 million for the six months ended June 30, 2019 and 2018, respectively. See Item 1. Financial Statements, Note 1. General and Basis of Presentation – (c) Cost of ATM Operating Revenues Presentation. The inclusion of this depreciation, accretion, and amortization of intangible assets in Cost of ATM operating revenues would have increased our Cost of ATM

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operating revenues as a percentage of total revenues by 11.1% and 10.7% for the three months ended June 30, 2019 and 2018, respectively, and 11.4% and 10.9% for the six months ended June 30, 2019 and 2018, respectively.


(2)	Includes share-based compensation expense of $4.9 million and $3.4 million for the three months ended June 30, 2019 and 2018, respectively, and $9.1 million and $5.8 million for the six months ended June 30, 2019 and 2018, respectively.

Key Operating Metrics

The following table reflects certain key measures that gauge our operating performance for the periods indicated:



	Three months ended June 30,								Six Months Ended June 30,
	2019			% Change		2018			2019			% Change		2018
Average number of transacting ATMs:
North America	43,286			(2.4	)%	44,364			43,124			(4.5	)%	45,136
Europe & Africa	23,884			(2.4	)	24,464			23,823			(4.4	)	24,919
Australia & New Zealand	7,822			(3.3	)	8,091			7,862			(3.7	)	8,163
Total Company-owned	74,992			(2.5	)	76,919			74,809			(4.4	)	78,218
North America	14,215			—		14,220			14,094			(1.0	)	14,235
Europe & Africa	244			36.3		179			236			(5.6	)	250
Australia & New Zealand	103			—		103			103			—		103
Total Merchant-owned	14,562			0.4		14,502			14,433			(1.1	)	14,588
Average number of transacting ATMs – ATM operations	89,554			(2.0	)	91,421			89,242			(3.8	)	92,806

Managed Services and Processing:
North America⁽¹⁾	170,600			25.4		136,071			155,910			16.0		134,406
Australia & New Zealand	1,312			(34.7	)	2,008			1,409			(29.9	)	2,010
Average number of transacting ATMs – Managed services and processing	171,912			24.5		138,079			157,319			15.3		136,416

Total average number of transacting ATMs	261,466			13.9		229,500			246,561			7.6		229,222

Total transactions (in thousands):
ATM operations	312,812			(8.0	)	339,911			617,671			(6.5	)	660,866
Managed services and processing, net	339,758			17.6		288,812			617,816			10.1		561,282
Total transactions	652,570			3.8		628,723			1,235,487			1.1		1,222,148

Total cash withdrawal transactions (in thousands):
ATM operations	207,621			(6.0	)	220,977			408,634			(4.3	)	426,809

Per ATM per month amounts (excludes managed services and processing):
Cash withdrawal transactions	773			(4.1	)	806			763			(0.4	)	766

ATM operating revenues ⁽²⁾	$	1,106		0.1		$	1,105		$	1,076		0.3		$	1,073
Cost of ATM operating revenues ^{(2) (3)}	724			(2.9	)	746			726			(1.1	)	734
ATM adjusted operating gross profit ^{(2) (3)}	$	382		6.4	%	$	359		$	350		3.2	%	$	339

ATM adjusted operating gross profit margin	34.5		%			32.5		%	32.5		%			31.6		%


(1)	During the three months ended June 30, 2019, the Company completed the acquisition of ATM processing contracts that will provide transaction processing services for approximately 62,000 ATMs. This transaction added approximately 31,000 and 18,000 ATMs to the average number of transacting ATMs for the three and six months ended June 30th, 2019, respectively.


(2)	ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation.

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(3)	Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is reported separately in the accompanying Consolidated Statements of Operations. For additional information, see Item 1. Financial Statements, Note 1. General and Basis of Presentation – (c) Cost of ATM Operating Revenues Presentation.

Revenues



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
North America
ATM operating revenues	$	199,536		$	197,478		1.0	%	$	390,582		$	393,227		(0.7	)%
ATM product sales and other revenues	15,679			9,628			62.8		28,881			23,760			21.6
North America total revenues	215,215			207,106			3.9		419,463			416,987			0.6
Europe & Africa
ATM operating revenues	101,501			105,809			(4.1	)	190,179			201,990			(5.8	)
ATM product sales and other revenues	1,969			2,041			(3.5	)	4,216			4,304			(2.0	)
Europe & Africa total revenues	103,470			107,850			(4.1	)	194,395			206,294			(5.8	)
Australia & New Zealand
ATM operating revenues	24,726			29,024			(14.8	)	50,517			59,661			(15.3	)
ATM product sales and other revenues	92			97			(5.2	)	311			155			100.6
Australia & New Zealand total revenues	24,818			29,121			(14.8	)	50,828			59,816			(15.0	)

Eliminations	(2,682		)	(3,090		)	(13.2	)	(5,595		)	(5,926		)	(5.6	)

Total ATM operating revenues	323,081			329,221			(1.9	)	625,683			648,952			(3.6	)
Total ATM product sales and other revenues	17,740			11,766			50.8		33,408			28,219			18.4
Total revenues	$	340,821		$	340,987		—	%	$	659,091		$	677,171		(2.7	)%

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

ATM operating revenues. ATM operating revenues during the three months ended June 30, 2019 decreased $6.1 million, or 1.9%, compared to the same period of 2018. The decrease was primarily a result of foreign currency exchange rate movements impacting the results of our Europe & Africa and Australia & New Zealand segments. Absent the foreign currency exchange rate movements, our ATM operating revenues would have increased $3.4 million, or 1.0% due to the expansion of our surcharge-free network and bank-branding revenues and higher transaction processing revenues in the U.S., the increase in the number of transacting ATMs and transaction activity from new placement agreements in Europe & Africa, partially offset by the impact of the two 5% decreases in the LINK interchange rate in the U.K. that came into effect on July 1, 2018 and January 1, 2019 as well as the decline in the number of transacting ATMs deployed in the U.K. and Australia & New Zealand.

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The following table details, by segment, the changes in the various components of ATM operating revenues:



	Three Months Ended June 30,
	2019			2018			Change			% Change
	(In thousands, excluding percentages)
North America
Surcharge revenues	$	88,234		$	90,687		$	(2,453	)	(2.7	)%
Interchange revenues	34,286			35,819			(1,533		)	(4.3	)
Bank-branding and surcharge-free network revenues	48,538			43,990			4,548			10.3
Managed services and processing revenues	28,478			26,982			1,496			5.5
North America total ATM operating revenues	199,536			197,478			2,058			1.0
Europe & Africa
Surcharge revenues	44,427			30,888			13,539			43.8
Interchange revenues	54,423			72,412			(17,989		)	(24.8	)
Bank-branding and surcharge-free network revenues	483			—			483			—
Managed services and processing revenues	2,168			2,509			(341		)	(13.6	)
Europe & Africa total ATM operating revenues	101,501			105,809			(4,308		)	(4.1	)
Australia & New Zealand
Surcharge revenues	19,776			22,679			(2,903		)	(12.8	)
Interchange revenues	1,198			1,064			134			12.6
Managed services and processing revenues	3,752			5,281			(1,529		)	(29.0	)
Australia & New Zealand total ATM operating revenues	24,726			29,024			(4,298		)	(14.8	)
Eliminations	(2,682		)	(3,090		)	408			(13.2	)
Total ATM operating revenues	$	323,081		$	329,221		$	(6,140	)	(1.9	)%

North America. For the three months ended June 30, 2019, our ATM operating revenues in our North America segment increased $2.1 million, or 1.0%, compared to the same period of 2018. The increase was primarily attributable to the U.S. with the expansion of the surcharge-free network and bank-branding revenues, higher same-store withdrawals, higher transaction processing revenues, partially offset by lower surcharge and interchange revenues due to a lower number of transacting ATMs.

Europe & Africa. For the three months ended June 30, 2019, our ATM operating revenues in our Europe & Africa segment decreased $4.3 million, or 4.1%, compared to the same period of 2018. Our ATM operating revenues would have been higher by approximately $6.4 million for the three months ended June 30, 2019, absent the foreign currency exchange rate movements. Adjusted for foreign currency movements, ATM operating revenues increased 2.0% due to an increase in the number of transacting ATMs and transaction activity from new ATM placement agreements in Spain, South Africa, and Germany, partially offset by the impact of the two 5% decreases in the LINK interchange rate in the U.K. that came into effect on July 1, 2018 and January 1, 2019, as well as fewer transacting ATMs in the U.K. In addition, the transition of a portion of our U.K. ATMs to pay-to-use resulted in higher surcharge revenues partially offsetting the lower interchange revenues. For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures below.

Australia & New Zealand. For the three months ended June 30, 2019, our ATM operating revenues in our Australia & New Zealand segment decreased $4.3 million, or 14.8%, compared to the same period of 2018. Approximately $2.0 million of this decline was a result of foreign currency exchange rate movements with the remainder due to a reduction in the number of transacting ATMs and fewer transactions per ATM.

ATM product sales and other revenues. For the three months ended June 30, 2019, our ATM product sales and other revenues increased 50.8% compared to the same period of 2018. The increase was primarily related to higher equipment sales in the U.S.

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Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018

ATM operating revenues. ATM operating revenues during the six months ended June 30, 2019 decreased $23.3 million, or 3.6%, compared to the same period of 2018. The decrease was primarily a result of foreign currency exchange rate movements impacting the results of our Europe & Africa and Australia & New Zealand segments. Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased $2.6 million or 0.4%. This constant-currency decrease was impacted by the termination of the 7-Eleven contract in the U.S. and the removal of ATM's at 7-Eleven locations that contributed $5.4 million to ATM operating revenues in the first two months of 2018. The decrease was also impacted by the two 5% decreases in the LINK interchange rate in the U.K. that came into effect on July 1, 2018 and January 1, 2019 and a reduction in the number of transacting ATMs deployed in the U.K and Australia & New Zealand. The impact of these factors were mostly offset by the expansion of our surcharge-free network and bank-branding revenues and higher transaction processing revenues in the U.S., and the increase in the number of transacting ATMs and transaction activity from new placement agreements in Europe & Africa.

The following table details, by segment, the changes in the various components of ATM operating revenues:



	Six Months Ended June 30,
	2019			2018			Change			% Change
	(In thousands, excluding percentages)
North America
Surcharge revenues	$	173,344		$	179,801		$	(6,457	)	(3.6	)%
Interchange revenues	68,665			71,638			(2,973		)	(4.2	)
Bank-branding and surcharge-free network revenues	94,411			88,437			5,974			6.8
Managed services and processing revenues	54,162			53,351			811			1.5
North America total ATM operating revenues	390,582			393,227			(2,645		)	(0.7	)
Europe & Africa
Surcharge revenues	75,472			57,057			18,415			32.3
Interchange revenues	109,731			139,870			(30,139		)	(21.5	)
Bank-branding and surcharge-free network revenues	483			—			483			—
Managed services and processing revenues	4,493			5,063			(570		)	(11.3	)
Europe & Africa total ATM operating revenues	190,179			201,990			(11,811		)	(5.8	)
Australia & New Zealand
Surcharge revenues	40,444			46,749			(6,305		)	(13.5	)
Interchange revenues	2,501			2,189			312			14.3
Managed services and processing revenues	7,572			10,723			(3,151		)	(29.4	)
Australia & New Zealand total ATM operating revenues	50,517			59,661			(9,144		)	(15.3	)
Eliminations	(5,595		)	(5,926		)	331			(5.6	)
Total ATM operating revenues	$	625,683		$	648,952		$	(23,269	)	(3.6	)%

North America. For the six months ended June 30, 2019, our ATM operating revenues in our North America segment decreased $2.6 million, or 0.7%, compared to the same period of 2018. The decrease was attributable to the termination of the 7-Eleven contract in the U.S. and the removal of ATMs at 7-Eleven locations that contributed approximately $5.4 million in ATM operating revenues in the first two months of 2018. This decrease was partially offset by revenue growth in the U.S. resulting from growth in bank-branding and surcharge-free network revenues, higher transaction processing revenues, and higher same-store withdrawal transactions.

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Europe & Africa. For the six months ended June 30, 2019, our ATM operating revenues in our Europe & Africa segment decreased $11.8 million, or 5.8%, compared to the same period of 2018. Our ATM operating revenues would have been higher by approximately $13.2 million for the six months ended June 30, 2019, absent the foreign currency exchange rate movements. Adjusted for foreign currency movements, ATM operating revenues increased 0.7% due to an increase in the number of transacting ATMs and transaction activity from new placement agreements in Spain, South Africa, and Germany, partially offset by the impact of the two 5% decreases in the LINK interchange rate in the U.K. that came into effect on July 1, 2018 and January 1, 2019 as well as a reduction in the number of transacting ATMs deployed in the U.K. In addition, the transition of U.K. ATMs to pay-to-use resulted in higher surcharge revenues partially offsetting the lower interchange revenues. For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures below.

Australia & New Zealand. For the six months ended June 30, 2019, our ATM operating revenues in our Australia & New Zealand segment decreased $9.1 million, or 15.3%, compared to the same period of 2018. Approximately $4.6 million of this decline was a result of foreign currency exchange rate movements with the remainder due to a reduction in the number of transacting ATMs and fewer transactions per ATM.

ATM product sales and other revenues. For the six months ended June 30, 2019, our ATM product sales and other revenues increased 18.4% compared to the same period of 2018. The increase was primarily related to higher equipment sales in the U.S.

Cost of Revenues (exclusive of depreciation, accretion, and amortization of intangible assets)



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
North America
Cost of ATM operating revenues	$	130,125		$	131,125		(0.8	)%	$	257,275		$	264,990		(2.9	)%
Cost of ATM product sales and other revenues	13,039			9,068			43.8		23,797			20,590			15.6
North America total cost of revenue	143,164			140,193			2.1		281,072			285,580			(1.6	)
Europe & Africa
Cost of ATM operating revenues	62,543			65,263			(4.2	)	125,096			126,897			(1.4	)
Cost of ATM product sales and other revenues	1,000			780			28.2		1,856			1,676			10.7
Europe & Africa total cost of revenues	63,543			66,043			(3.8	)	126,952			128,573			(1.3	)
Australia & New Zealand
Cost of ATM operating revenues	17,653			21,792			(19.0	)	36,703			44,389			(17.3	)
Cost of ATM product sales and other revenues	262			238			10.1		573			582			(1.5	)
Australia & New Zealand total cost of revenues	17,915			22,030			(18.7	)	37,276			44,971			(17.1	)
Corporate total cost of revenues	366			91			302.2		627			175			258.3

Eliminations	(2,606		)	(2,918		)	(10.7	)	(5,462		)	(5,608		)	(2.6	)

Cost of ATM operating revenues	208,081			215,353			(3.4	)	414,239			430,843			(3.9	)
Cost of ATM product sales and other revenues	14,301			10,086			41.8		26,226			22,848			14.8
Total cost of revenues	$	222,382		$	225,439		(1.4	)%	$	440,465		$	453,691		(2.9	)%

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets). Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) during the three months ended June 30, 2019 decreased $7.3, or 3.4%, compared to the same period of 2018. Consistent with the decrease in ATM operating revenue, the decrease in Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) was primarily a result of foreign currency exchange rate movements, lower merchant commissions, fewer company-owned ATMs in the U.K. and Australia & New Zealand, partially offset by a reduction in our estimated U.K. business rates (property taxes) on ATMs in the same period of 2018.

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The following table details, by segment, the changes in the various components of Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets):



	Three Months Ended June 30,
	2019			2018			Change			% Change
	(In thousands, excluding percentages)
North America
Merchant commissions	$	63,228		$	66,118		$	(2,890	)	(4.4	)%
Vault cash rental	12,509			12,034			475			3.9
Other costs of cash	15,182			13,973			1,209			8.7
Repairs and maintenance	13,298			11,214			2,084			18.6
Communications	2,734			4,027			(1,293		)	(32.1	)
Transaction processing	2,344			1,433			911			63.6
Employee costs	7,913			9,054			(1,141		)	(12.6	)
Other expenses	12,917			13,272			(355		)	(2.7	)
North America total cost of ATM operating revenues	130,125			131,125			(1,000		)	(0.8	)
Europe & Africa
Merchant commissions	24,182			27,410			(3,228		)	(11.8	)
Vault cash rental	3,833			3,544			289			8.2
Other costs of cash	6,381			6,092			289			4.7
Repairs and maintenance	3,371			3,525			(154		)	(4.4	)
Communications	2,906			3,254			(348		)	(10.7	)
Transaction processing	5,688			5,790			(102		)	(1.8	)
Employee costs	10,759			11,630			(871		)	(7.5	)
Other expenses	5,423			4,018			1,405			35.0
Europe & Africa total cost of ATM operating revenues	62,543			65,263			(2,720		)	(4.2	)
Australia & New Zealand
Merchant commissions	9,656			12,369			(2,713		)	(21.9	)
Vault cash rental	1,727			2,115			(388		)	(18.3	)
Other costs of cash	1,789			1,875			(86		)	(4.6	)
Repairs and maintenance	1,745			2,430			(685		)	(28.2	)
Communications	649			852			(203		)	(23.8	)
Transaction processing	482			599			(117		)	(19.5	)
Employee costs	1,133			1,357			(224		)	(16.5	)
Other expenses	472			195			277			142.1
Australia & New Zealand total cost of ATM operating revenues	17,653			21,792			(4,139		)	(19.0	)
Corporate	366			91			275			302.2
Eliminations	(2,606		)	(2,918		)	312			(10.7	)
Total cost of ATM operating revenues	$	208,081		$	215,353		$	(7,272	)	(3.4	)%

North America. For the three months ended June 30, 2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) in our North America segment decreased $1.0 million, or 0.8%, compared to the same period of 2018. The decrease was primarily attributable to lower merchant commissions, lower communications costs, and improved operational efficiency as a result of the 2017 and 2018 Restructuring Plan, partially offset by an increase in repairs and maintenance costs.

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Europe & Africa. For the three months ended June 30, 2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Europe & Africa segment decreased by $2.7 million, or 4.2%, compared to the same period of 2018. Excluding foreign currency exchange rate movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) increased 1.9% as a result of the additional transacting ATMs and transaction activity from new placement agreements in Spain, South Africa and Germany as well as a reduction in our estimated U.K. business rates (property taxes) on ATMs in the same period of 2018.

Australia & New Zealand. For the three months ended June 30, 2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Australia & New Zealand segment decreased $4.1 million, or 19.0%, compared to the same period of 2018 primarily due to foreign currency exchange rate movements, a reduction in the number of transacting ATMs, and fewer transactions per ATM. For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures below.

Cost of ATM product sales and other revenues. For the three months ended June 30, 2019, our cost of ATM product sales and other revenues increased 41.8% from the same period of 2018 which is directionally consistent with the increase in revenue from ATM product sales primarily in the U.S.

Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018

Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets). Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) during the six months ended June 30, 2019 decreased $16.6 million, or 3.9%, compared to the same period of 2018. Consistent with the decrease in ATM operating revenues, the decrease in Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) was primarily a result of foreign currency exchange rate movements, lower merchant commissions, fewer company-owned ATMs in the U.K. and Australia & New Zealand, the realization of improved operational efficiency as a result of the 2017 and 2018 Restructuring Plan, partially offset by a reduction in our estimated U.K. business rates (property taxes) on ATMs in the same period of 2018.

The following table details, by segment, the changes in the various components of Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets):

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	Six Months Ended June 30,
	2019			2018			Change			% Change
	(In thousands, excluding percentages)
North America
Merchant commissions	$	125,478		$	132,700		$	(7,222	)	(5.4	)%
Vault cash rental	24,748			24,516			232			0.9
Other costs of cash	30,798			30,070			728			2.4
Repairs and maintenance	25,751			21,973			3,778			17.2
Communications	6,452			8,185			(1,733		)	(21.2	)
Transaction processing	3,754			3,032			722			23.8
Employee costs	15,487			17,923			(2,436		)	(13.6	)
Other expenses	24,807			26,591			(1,784		)	(6.7	)
North America total cost of ATM operating revenues	257,275			264,990			(7,715		)	(2.9	)
Europe & Africa
Merchant commissions	47,610			53,176			(5,566		)	(10.5	)
Vault cash rental	7,432			6,962			470			6.8
Other costs of cash	12,262			12,705			(443		)	(3.5	)
Repairs and maintenance	7,477			7,546			(69		)	(0.9	)
Communications	5,881			6,651			(770		)	(11.6	)
Transaction processing	11,140			10,917			223			2.0
Employee costs	21,749			22,761			(1,012		)	(4.4	)
Other expenses	11,545			6,179			5,366			86.8
Europe & Africa total cost of ATM operating revenues	125,096			126,897			(1,801		)	(1.4	)
Australia & New Zealand
Merchant commissions	19,898			24,998			(5,100		)	(20.4	)
Vault cash rental	3,756			4,381			(625		)	(14.3	)
Other costs of cash	3,601			3,816			(215		)	(5.6	)
Repairs and maintenance	3,736			4,930			(1,194		)	(24.2	)
Communications	1,401			1,850			(449		)	(24.3	)
Transaction processing	996			1,276			(280		)	(21.9	)
Employee costs	2,342			2,689			(347		)	(12.9	)
Other expenses	973			449			524			116.7
Australia & New Zealand total cost of ATM operating revenues	36,703			44,389			(7,686		)	(17.3	)
Corporate	627			175			452			258.3
Eliminations	(5,462		)	(5,608		)	146			(2.6	)
Total cost of ATM operating revenues	$	414,239		$	430,843		$	(16,604	)	(3.9	)%

North America. For the six months ended June 30, 2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) in our North America segment decreased $7.7 million, or 2.9%, compared to the same period of 2018. The decrease was primarily attributable to the decline in ATM operating revenues associated with the removal of ATMs in the 7-Eleven locations in the U.S, lower merchant commissions, lower communications costs, and improved operational efficiency as a result of the 2017 and 2018 Restructuring Plan, partially offset by an increase in repairs and maintenance costs.

Europe & Africa. For the six months ended June 30, 2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Europe & Africa segment decreased by $1.8 million, or 1.4%, compared to the same period of 2018. Excluding foreign currency exchange rate movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) increased 5.4% as a result of the additional transacting ATMs and transaction activity from new placement agreements in Spain, South Africa and Germany as well as a reduction in our estimated U.K. business rates (property taxes) on ATMs in the same period of 2018.

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Australia & New Zealand. For the six months ended June 30, 2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Australia & New Zealand segment decreased $7.7 million, or 17.3%, compared to the same period of 2018 primarily due to foreign currency exchange rate movements, the decline in the number of transacting ATMs, and fewer transactions per ATM. For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures below.

Cost of ATM product sales and other revenues. For the six months ended June 30, 2019, our cost of ATM product sales and other revenues increased 14.8% from the same period of 2018 which is directionally consistent with the increase in revenue from ATM product sales primarily in the US.

Selling, General, and Administrative Expenses



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
Selling, general, and administrative expenses	$	37,111		$	37,505		(1.1	)%	$	76,548		$	76,885		(0.4	)%
Share-based compensation expense	4,884			3,423			42.7		9,107			5,783			57.5
Total selling, general, and administrative expenses	$	41,995		$	40,928		2.6	%	$	85,655		$	82,668		3.6	%

Percentage of total revenues:
Selling, general, and administrative expenses	10.9		%	11.0		%			11.6		%	11.4		%
Share-based compensation expense	1.4		%	1.0		%			1.4			0.9		%
Total selling, general, and administrative expenses	12.3		%	12.0		%			13.0		%	12.2		%

Selling, general, and administrative expenses (“SG&A expenses”), excluding share-based compensation expense. For the three and six months ended June 30, 2019, SG&A expenses, excluding share-based compensation expense, remained relatively flat compared to the same periods of 2018.

Share-based compensation expense. For the three and six months ended June 30, 2019, share-based compensation expense increased $1.5 million and $3.3 million, respectively, compared to the same periods of 2018. This increase is a result of the amount, timing and terms of share-based payment awards granted during the periods, net of estimated forfeitures. For additional information related to share-based compensation expense, see Item 1. Financial Statements, Note 4. Share-based Compensation.

Restructuring Expenses

During 2017 and 2018, we implemented a global corporate reorganization and cost reduction initiative (the "2017 and 2018 Restructuring Plan”), intended to improve our cost structure and operating efficiency. The 2017 and 2018 Restructuring Plan included workforce reductions, facilities closures, contract terminations, and other cost reduction measures. During the three and six months ended June 30, 2018, we implemented additional workforce reductions in an effort to continue our cost reduction initiative and thereby improve our cost structure and operating efficiency.

For additional information, see Item 1. Financial Statements, Note 1. General and Basis of Presentation – (d) Restructuring Expenses.

Acquisition Related Expenses

Acquisition related expenses. During the three and six months ended June 30, 2018, we incurred acquisition expenses of $.9 million and $2.6 million, respectively, related primarily to employee severance and lease termination costs related to the DCPayments acquisition.

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Depreciation and Accretion Expense



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
Depreciation and accretion expense	$	33,205		$	31,764		4.5	%	$	66,178		$	62,806		5.4	%

Percentage of total revenues	9.7		%	9.3		%			10.0		%	9.3		%

Depreciation and accretion expense. For the three and six months ended June 30, 2019, depreciation and accretion expense increased $1.4 million, or 4.5% and $3.4 million, or 5.4%, respectively, compared to the same periods of 2018. This increase was primarily due to the timing of capital additions in the ordinary course of business.

Amortization of Intangible Assets



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
Amortization of intangible assets	$	12,591		$	13,498		(6.7	)%	$	25,003		$	27,269		(8.3	)%

Percentage of total revenues	3.7		%	4.0		%			3.8		%	4.0		%

Amortization of intangible assets. For the three and six months ended June 30, 2019, amortization of intangible assets decreased by $0.9, or 6.7%, and $2.3 million, or 8.3%, respectively, compared to the same periods of 2018. This decrease was primarily due to the timing of the related intangible assets becoming fully amortized.

Loss on Disposal and Impairment of Assets



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
Loss on disposal and impairment of assets	$	1,496		$	9,697		(84.6	)%	$	2,464		$	15,117		(83.7	)%

Percentage of total revenues	0.4		%	2.8		%			0.4		%	2.2		%

Loss on disposal and impairment of assets. During the three and six months ended June 30, 2019, we recognized losses of approximately $1.5 million, and $2.5 million, respectively, related to the disposal of ATM assets in the normal course of business. During the three and six months ended June 30, 2018, losses were primarily driven by ATM asset impairment and disposal in the U.S. and the exit from one of our leased facilities in the U.K.

Interest Expense, net



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
Interest expense, net	$	6,871		$	9,159		(25.0	)%	$	13,514		$	18,333		(26.3	)%

Percentage of total revenues	2.0		%	2.7		%			2.1		%	2.7		%

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Interest expense, net. For the three and six months ended June 30, 2019, interest expense, net, decreased $2.3 million, or 25.0%, and $4.8 million, or 26.3%, respectively, compared to the same periods of 2018. This decrease was attributable to a comparatively lower outstanding long-term debt balance and a lower weighted average interest rate following the December 2018 redemption of our $250.0 million 5.125% Senior notes. These borrowings were refinanced under our revolving credit facility with a lower interest rate. For additional information related to our outstanding borrowings, see Item 1. Financial Statements, Note 9. Long-Term Debt.

Other Expense (Income)

During the three and six months ended June 30, 2019, we recognized gains of $0.5 million and $8.7 million, respectively, in Other expense (income) to revise the estimated fair value of the acquisition related contingent consideration liability. These amounts partially offset foreign currency translation gains/losses and other non-operating costs. For additional information on the acquisition related contingent consideration, see Item 1. Financial Statements, Note 14. Fair Value Measurements.

Income Tax Expense



	Three Months Ended June 30,								Six Months Ended June 30,
	2019			2018			% Change		2019			2018			% Change
	(In thousands, excluding percentages)
Income tax expense	$	3,565		$	2,586		37.9	%	$	6,694		$	2,555		162.0

Effective tax rate	25.4		%	40.7		%			31.2		%	72.1		%

Income tax expense. The Company’s income tax expense for the three and six months ended June 30, 2019, totaled $3.6 million and $6.7 million, respectively, resulting in an effective tax rate of 25.4% and 31.2%, respectively, compared to $2.6 million for both three and six months ended June 30, 2018 resulting in an effective tax rate of 40.7% and 72.1% for the same periods. The increase in the tax expense for the three and six months ended June 30, 2019 compared to the same period of 2018 was primarily attributable to increased profits in the current period, partially offset by tax benefits from the utilization of interest deductions disallowed in the prior year.

Non-GAAP Financial Measures

DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION

In order to assist readers of our consolidated financial statements in understanding the operating results that management uses to evaluate the business and for financial planning purposes, we present the following non-GAAP measures as a complement to financial results prepared in accordance with U.S. GAAP: EBITDA, Adjusted EBITDA, Adjusted EBITA, Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Free Cash Flow, and certain other results presented on a constant-currency basis. We believe that the presentation of these measures and the identification of notable, non-cash, non-operating costs and/or (if applicable in a particular period) certain costs not anticipated to occur in future periods enhance an investor’s understanding of the underlying trends in our business and provide for better comparability between periods in different years. We also believe that these measures are relevant and provide useful information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance and, in the case of free cash flow, our liquidity results. We use these non-GAAP financial measures in managing and measuring the performance of our business, including setting and measuring incentive based compensation for management.

Furthermore, 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 measures contained within our consolidated financial statements. The non-GAAP measures that we use are not defined in the same manner by all companies and therefore may not be comparable to other similarly titled measures of other companies.

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EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin

EBITDA is calculated by adding interest expense, income tax expense, depreciation and accretion and amortization to net income. EBITDA and Adjusted EBITDA exclude these items as these amounts can vary substantially from company to company within the Company’s industry depending upon capital structures, tax jurisdictions, accounting methods, the book values of assets and the methods by which the assets were acquired. Adjusted EBITDA also excludes certain non-cash, non-operating costs and/or (if applicable in a particular period) certain costs not anticipated to occur in future periods. These excluded items consist of share-based compensation expense, acquisition and divestiture-related expenses, restructuring expenses, gains or losses on disposal and impairment of assets and other income and expense. Adjusted EBITDA is also calculated to exclude amounts attributable to noncontrolling interests. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues.

Adjusted Net Income, Adjusted Net Income per Diluted Share, and Adjusted Tax Rate

Adjusted Net Income represents net income computed in accordance with U.S. GAAP, before amortization of intangible assets and deferred financing costs, gains or losses on disposal and impairment of assets, share-based compensation expense, certain other income and expense amounts, acquisition related expenses, certain non-operating expenses, and (if applicable in a particular period) certain costs not anticipated to occur in future periods (together, the “Adjustments”). The non-GAAP tax rate used to calculate Adjusted Net Income was approximately 22.7% and 23.2% for the three and six months ended June 30, 2019, respectively, and 24.5% and 25.1% for the three and six months ended June 30, 2018, respectively. The non-GAAP tax rates represent the GAAP tax rate for the period as adjusted by the estimated tax impact of the items adjusted from the measure. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding.

Adjusted Free Cash Flow

Adjusted Free Cash Flow is defined as cash provided by operating activities less the impact of changes in restricted cash due to the timing of payments of restricted cash liabilities and less payments for capital expenditures, including those financed through direct debt, but excluding acquisitions. The Adjusted Free Cash Flow measure does not take into consideration certain other non-discretionary cash requirements such as mandatory principal payments on portions of our long-term debt.

Constant Currency

Management calculates certain GAAP as well as non-GAAP measures on a constant-currency basis using the average foreign currency exchange rates applicable in the corresponding period of the previous year and applying these rates to the measures in the current reporting period to assess performance and eliminate the effect foreign currency exchange rates have on comparability between periods.

Reconciliation of Non-GAAP Financial Statements

Reconciliations of the non-GAAP financial measures used herein to the most directly comparable U.S. GAAP financial measures are presented as follows:

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Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Shareholders to EBITDA, Adjusted EBITDA, Adjusted EBITA, and Adjusted Net Income (in thousands, excluding share and per share amounts)



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Net income attributable to controlling interests and available to common shareholders	$	10,471	$	3,767		$	14,790		$	999
Adjustments:
Interest expense, net	6,871		9,159			13,514			18,333
Amortization of deferred financing costs and note discount	3,330		3,355			6,622			6,663
Income tax expense	3,565		2,586			6,694			2,555
Depreciation and accretion expense	33,205		31,764			66,178			62,806
Amortization of intangible assets	12,591		13,498			25,003			27,269
EBITDA	70,033		64,129			132,801			118,625

Add back:
Loss on disposal and impairment of assets	1,496		9,697			2,464			15,117
Other expense (income) ⁽¹⁾	1,456		(2,187		)	(5,751		)	(27		)
Noncontrolling interests ⁽²⁾	16		18			31			19
Share-based compensation expense	5,250		3,513			9,734			5,958
Restructuring expenses ⁽³⁾	3,463		2,063			3,463			4,476
Acquisition related expenses ⁽⁴⁾	—		913			—			2,633
Adjusted EBITDA	81,714		78,146			142,742			146,801
Less:
Depreciation and accretion expense ⁽⁵⁾	33,205		31,764			66,178			62,805
Adjusted EBITA	48,509		46,382			76,564			83,996
Less:
Interest expense, net	6,871		9,159			13,514			18,333
Adjusted pre-tax income	41,638		37,223			63,050			65,663
Income tax expense ⁽⁶⁾	9,452		9,120			14,634			16,481
Adjusted Net Income	$	32,186	$	28,103		$	48,416		$	49,182

Adjusted Net Income per share – basic	$	0.70	$	0.61		$	1.05		$	1.07
Adjusted Net Income per share – diluted	$	0.69	$	0.61		$	1.04		$	1.06

Weighted average shares outstanding – basic	46,180,161		45,927,732			46,201,842			45,880,661
Weighted average shares outstanding – diluted	46,601,488		46,378,813			46,620,147			46,357,776


(1)	Includes foreign currency translation gains/losses, the revaluation of the estimated acquisition related contingent consideration, and other non-operating costs.


(2)	Noncontrolling interest adjustment made such that Adjusted EBITDA includes only the Company’s ownership interest in the Adjusted EBITDA of one of its Mexican subsidiaries.


(3)	For the three and six months ended June 30, 2019, expenses include professional fees, employee severance costs, and facility costs related to the 2019 Restructuring Plan. For the three and six months ended June 30, 2018, expenses include employee severance and other costs incurred in conjunction with a corporate reorganization and cost reduction initiative.


(4)	For the three and six months ended June 30, 2018, expenses primarily include employee severance costs and lease termination costs related to the DCPayments acquisition.


(5)	Amounts exclude a portion of the expenses incurred by one of its Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders.


(6)	For the three and six months ended June 30, 2019, the non-GAAP tax rate used to calculate Adjusted Net Income was 22.7% and 23.2%, respectively, and 24.5% and 25.1% for the three and six months ended June 30, 2018, respectively, which represents the Company’s GAAP tax rate as adjusted for the net tax effects related to the items excluded from Adjusted Net Income.

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Reconciliation of U.S. GAAP Revenue to Constant-Currency Revenue

(in thousands, excluding percentages)



Consolidated revenue:	Three Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	323,081	$	9,528	$	332,609	$	329,221	(1.9	)%	1.0	%
ATM product sales and other revenues	17,740		226		17,966		11,766		50.8		52.7
Total revenues	$	340,821	$	9,754	$	350,575	$	340,987	—	%	2.8	%



	Six Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	625,683	$	20,655	$	646,338	$	648,952	(3.6	)%	(0.4	)%
ATM product sales and other revenues	33,408		517		33,925		28,219		18.4		20.2
Total revenues	$	659,091	$	21,172	$	680,263	$	677,171	(2.7	)%	0.5	%



North America revenue:	Three Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	199,536	$	1,150	$	200,686	$	197,478	1.0	%	1.6	%
ATM product sales and other revenues	15,679		55		15,734		9,628		62.8		63.4
Total revenues	$	215,215	$	1,205	$	216,420	$	207,106	3.9	%	4.5	%



	Six Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	390,582	$	2,823	$	393,405	$	393,227	(0.7	)%	—	%
ATM product sales and other revenues	28,881		113		28,994		23,760		21.6		22.0
Total revenues	$	419,463	$	2,936	$	422,399	$	416,987	0.6	%	1.3	%

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Europe & Africa revenue:	Three Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	101,501	$	6,386	$	107,887	$	105,809	(4.1	)%	2.0	%
ATM product sales and other revenues	1,969		164		2,133		2,041		(3.5	)	4.5
Total revenues	$	103,470	$	6,550	$	110,020	$	107,850	(4.1	)%	2.0	%



	Six Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	190,179	$	13,184	$	203,363	$	201,990	(5.8	)%	0.7	%
ATM product sales and other revenues	4,216		378		4,594		4,304		(2.0	)	6.7
Total revenues	$	194,395	$	13,562	$	207,957	$	206,294	(5.8	)%	0.8	%



Australia & New Zealand revenue:	Three Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	24,726	$	1,993	$	26,719	$	29,024	(14.8	)%	(7.9	)%
ATM product sales and other revenues	92		7		99		97		(5.2	)	2.1
Total revenues	$	24,818	$	2,000	$	26,818	$	29,121	(14.8	)%	(7.9	)%



	Six Months Ended June 30,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	50,517	$	4,648	$	55,165	$	59,661	(15.3	)%	(7.5	)%
ATM product sales and other revenues	311		27		338		155		100.6		118.1
Total revenues	$	50,828	$	4,675	$	55,503	$	59,816	(15.0	)%	(7.2	)%

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Reconciliation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share on a Non-GAAP basis to Constant-Currency (in thousands, excluding percentages and per share amounts)



	Three Months Ended June 30,
	2019						2018		% Change
	Non - GAAP ⁽¹⁾		Foreign Currency Impact		Constant - Currency		Non - GAAP ⁽¹⁾		Non - GAAP ⁽¹⁾		Constant - Currency
Adjusted EBITDA	$	81,714	$	2,340	$	84,054	$	78,146	4.6	%	7.6	%
Adjusted Net Income	32,186		911		33,097		28,103		14.5		17.8
Adjusted Net Income per share – diluted ⁽²⁾	$	0.69	$	0.02	$	0.71	$	0.61	13.1	%	16.4	%



	Six Months Ended June 30,
	2019						2018		% Change
	Non - GAAP ⁽¹⁾		Foreign Currency Impact		Constant - Currency		Non - GAAP ⁽¹⁾		Non - GAAP ⁽¹⁾		Constant - Currency
Adjusted EBITDA	$	142,742	$	4,400	$	147,142	$	146,801	(2.8	)%	0.2	%
Adjusted Net Income	48,416		1,413		49,829		49,182		(1.6	)	1.3
Adjusted Net Income per share – diluted ⁽²⁾	$	1.04	$	0.03	$	1.07	$	1.06	(1.9	)%	0.9	%


(1)	As reported on the Reconciliation of Net Income (Loss) Attributable to Controlling Interests and Available to Common Shareholders to EBITDA, Adjusted EBITDA, Adjusted EBITA, and Adjusted Net Income above.


(2)	Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by the weighted average diluted shares outstanding of 46,601,488 and 46,378,813 for the three months ended June 30, 2019 and 2018, respectively, and 46,620,147 and 46,357,776 for the six months ended June 30, 2019 and 2018, respectively.

Reconciliation of Adjusted Free Cash Flow



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
Net cash provided by operating activities	$	77,035		$	60,342		$	55,230		$	109,775
Restricted cash settlement activity ⁽¹⁾	(1,167		)	(1,111		)	70,354			(25,349		)
Adjusted net cash provided by operating activities	75,868			59,231			125,584			84,426
Net cash used in investing activities, excluding acquisitions ⁽²⁾	(25,746		)	(25,943		)	(55,053		)	(46,682		)
Adjusted free cash flow	$	50,122		$	33,288		$	70,531		$	37,744

(1)

Restricted cash settlement activity represents the change in our restricted cash excluding the portion of the change that is attributable to foreign exchange and disclosed as part of the effect of exchange rate changes on cash, cash equivalents, and restricted cash in the accompanying Consolidated Statements of Cash Flows. Restricted cash primarily consists of amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers that are pledged for a particular use or restricted to support these obligations.


(2)	Capital expenditure amounts include payments made for exclusive license agreements, site acquisition costs, and other assets. Additionally, capital expenditure amounts for one of our Mexican subsidiaries are reflected gross of any noncontrolling interest amounts.

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Liquidity and Capital Resources

Overview

As of June 30, 2019, we had $ 33.5 million in cash and cash equivalents and $778.6 million in outstanding long-term debt.

We have historically funded our operations primarily through cash flows from operations, borrowings under our revolving credit facility, and the issuance of debt and equity securities. We have generally used a portion of our cash flows to invest in additional ATMs, either through acquisitions or through organic growth. We have also used cash to pay interest and principal amounts outstanding under our borrowings. As we collect a sizable portion of our 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 capital expenditures. Accordingly, it is not uncommon for us to reflect a working capital deficit position in the accompanying Consolidated Balance Sheets.

We believe that our cash on hand and our current revolving credit facility will be sufficient to meet our working capital requirements and contractual commitments for the next twelve months. We expect to fund our working capital needs from cash flows from our operations and borrowings under our revolving credit facility, to the extent needed.

Operating Activities

Net cash provided by operating activities totaled $55.2 million during the six months ended June 30, 2019, compared to net cash provided by operating activities of $109.8 million during the same period of 2018. The decrease in net cash provided by operating activities during the six months relative to the prior year was primarily attributable to the changes in restricted cash during the periods due to the timing of payments of restricted cash liabilities. Excluding changes in restricted cash, our cash flows from operating activities were up $41.2 million as a result of lower interest payments and favorable working capital changes. See Reconciliation of Adjusted Free Cash Flow within our discussion of Non-GAAP Financial Measures above.

Investing Activities

Net cash used in investing activities totaled $64.2 million during the six months ended June 30, 2019, compared to net cash used in investing activities of $46.7 million during the same period of 2018. The change in net cash used in investing activities during the six months relative to the prior year was related to a higher level of capital expenditures during 2019 and $9.1 million related to an acquisition in 2019.

Anticipated future capital expenditures. We currently anticipate that the majority of our capital expenditures for the foreseeable future will be attributable to the following: i) organic growth projects, including the purchase of ATMs for both new and existing ATM management agreements, ii) technology and product development, iii) investments in our infrastructure, and iv) ongoing refreshment of our ATMs and operational assets. We currently anticipate that our capital expenditures for the year will total approximately $135 million, which is primarily expected to be utilized to support new business growth. We expect such capital expenditures to be funded primarily through our cash flows from operations.

Financing Activities

Net cash used in financing activities totaled $67.9 million during the six months ended June 30, 2019, compared to cash used in financing activities of $48.0 million during the same period of 2018. During the six months ended June 30, 2019 we used $20.1 million to repurchase 677,679 Class A ordinary shares and used excess available cash to pay down borrowings under our revolving credit facility.

For information related to our financing facilities, see Item 1. Financial Statements, Note 9. Long-term Debt.

New Accounting Pronouncements

For information related to accounting pronouncements not yet adopted during 2019, see Item 1. Financial Statements, Note 2. New Accounting Pronouncements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following market risk disclosures should be read in conjunction with the quantitative and qualitative disclosures about market risk contained in our 2018 Form 10-K.

We are exposed to certain risks related to our ongoing business operations, including interest rate risk associated with our vault cash rental obligations and, to a lesser extent, borrowings under our revolving credit facility. The following quantitative and qualitative information is provided about financial instruments to which we were a party at June 30, 2019 and from which we may incur future gains or losses from changes in market interest rates or foreign currency exchange rates. We do not enter into derivative or other financial instruments for speculative or trading purposes.

Hypothetical changes in interest rates and foreign currency exchange rates 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 currency exchange rates, these hypothetical changes may not necessarily be an indicator of probable future fluctuations.

Interest Rate Risk

Vault cash rental expense. As 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 respective countries in which we operate. We pay a monthly fee on the average outstanding vault cash balances in our ATMs under floating rate formulas based on a spread above various interbank offered rates in the U.S., the U.K., Germany, and Spain. In Australia, the formula is based on the Bank Bill Swap Rates (“BBSY”), in South Africa, the rate is based on the South African Prime Lending rate and the Johannesburg Interbank Agreed Rate, in Canada, the rate is based on the Bank of Canada’s Bankers Acceptance Rate and the Canadian Prime Rate, and in Mexico, the rate is based on the Interbank Equilibrium Interest Rate (commonly referred to as the “TIIE”).

As a result of the significant sensitivity to interest rates related to our vault cash rental expense, we have entered into a number of interest rate swap contracts and caps with varying notional amounts and fixed interest rates in the U.S., Canada, the U.K., and Australia to manage the rate we pay on the amounts of our current and anticipated outstanding vault cash balances.

The notional amounts, weighted average fixed rates, and terms associated with our interest rate swap contracts and cap agreements that are currently in place in the U.S., Canada, the U.K., and Australia (as of the date of the issuance of this Form 10-Q) are as follows:

Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations

North America – Interest Rate Swap Contracts



Notional Amounts U.S. $		Weighted Average Fixed Rate		Notional Amounts CAD$			Weighted Average Fixed Rate		Term
(In millions)				(In millions)
$	1,000	2.06	%	CAD	$	125	2.46	%	July 1, 2019 – December 31, 2019
$	1,000	2.06	%	CAD	$	125	2.46	%	January 1, 2020 – December 31, 2020
$	600	1.95	%	CAD	$	125	2.46	%	January 1, 2021 – December 31, 2021
$	400	1.46	%						January 1, 2022 – December 31, 2022

North America - Interest Rate Cap Contracts



Notional Amounts U.S. $		Cap Rate ⁽¹⁾		Term
(In millions)
$	200	3.25	%	January 1, 2021 – December 31, 2023

(1)Maximum amount of interest to be paid each year as per terms of cap. Cost of cap is amortized through vault cash rental expense over term of cap.

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Europe & Africa – Interest Rate Swap Contracts



Notional Amounts U.K. £		Weighted Average Fixed Rate		Term
(In millions)
£	550	0.90	%	July 1, 2019 – December 31, 2019
£	500	0.94	%	January 1, 2020 – December 31, 2020
£	500	0.94	%	January 1, 2021 – December 31, 2021
£	500	0.94	%	January 1, 2022 – December 31, 2022

Australia & New Zealand – Interest Rate Swap Contracts



Notional Amounts AUS $		Weighted Average Fixed Rate		Term
(In millions)
$	150	1.95	%	July 1, 2019 – December 31, 2019
$	100	1.95	%	January 1, 2020 – December 31, 2020

Summary of Interest Rate Exposure on Average Outstanding Vault Cash

The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense in North America based on our average outstanding vault cash balance and interest rate derivatives for the quarter ended June 30, 2019 and assuming a 100 basis point increase in interest rates (in millions):



North America
Average outstanding vault cash balance	$	1,737
Interest rate swap contracts fixed notional amount	(1,093		)
Residual unhedged outstanding vault cash balance	$	644

Additional annual interest incurred on 100 basis point increase	$	6.44

We also have terms in certain of our North America contracts with merchants and financial institution partners where we can decrease fees paid to merchants or effectively increase the fees paid to us by financial institutions if vault cash rental costs increase. Such protection will serve to reduce but not eliminate the exposure calculated above. Furthermore, we have the ability in North America to partially mitigate our interest rate exposure through our operations. We believe we can reduce the average outstanding vault cash balances as interest rates rise by visiting ATMs more frequently with lower cash amounts. This ability to reduce the average outstanding vault cash balances is partially constrained by the incremental cost of more frequent ATM visits. Our contractual protections with merchants and financial institution partners and our ability to reduce the average outstanding vault cash balances will serve to reduce but not eliminate interest rate exposure.

The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense in Europe & Africa based on our average outstanding vault cash balance for the quarter ended June 30, 2019 and assuming a 100 basis point increase in interest rates (in millions):



Europe & Africa
Average outstanding vault cash balance	$	1,133
Interest rate swap contracts fixed notional amount	(707		)
Residual unhedged outstanding vault cash balance	$	426

Additional annual interest incurred on 100 basis point increase	$	4.26

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The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense in Australia based on our average outstanding vault cash balance for the quarter ended June 30, 2019 and assuming a 100 basis point increase in interest rates (in millions):



Australia
Average outstanding vault cash balance	$	236
Interest rate swap contracts fixed notional amount	(105		)
Residual unhedged outstanding vault cash balance	$	131

Additional annual interest incurred on 100 basis point increase	$	1.31

As of June 30, 2019, we had an asset of $1.8 million and a liability of $19.1 million recorded in the accompanying Consolidated Balance Sheets related to our interest rate swap and foreign currency forward contracts, which represented the fair value asset or liability, respectively, of the interest rate swap and foreign currency forward contracts, as derivative instruments are required to be carried at fair value. The fair value estimate was calculated as the present value of amounts estimated to be received or paid to a marketplace participant in a selling transaction. These interest rate swap and foreign currency forward contracts are valued using pricing models based on significant other observable inputs (Level 2 inputs under the fair value hierarchy prescribed by U.S. GAAP). For each highly effective hedging relationship, the gain or loss on the derivative instrument is reported as a component of the Accumulated other comprehensive loss, net line in the accompanying Consolidated Balance Sheets. The gain or loss is reclassified into earnings in the Vault cash rental expense line in the accompanying Consolidated Statements of Operations in the same period or periods during which the hedged transaction affects earnings and has been forecasted into earnings.

Outlook. Although we currently hedge a substantial portion of our vault cash interest rate risk in the U.S., Canada, the U.K., and Australia, 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 expenses. However, we expect that the impact on our consolidated financial statements from a significant increase in interest rates would be partially mitigated by the derivative instruments that we currently have in place associated with our vault cash balances in the U.S., Canada, the U.K., and Australia and other protective measures we have put in place to mitigate such risk.

Interest expense. Our interest expense is also sensitive to changes in interest rates as borrowings under our revolving credit facility accrue interest at floating rates. In November 2018, we entered into a second amended and restated credit agreement (the “Credit Agreement”) increasing the available borrowings under our revolving credit facility to $600 million. Subsequently, on December 19, 2018, we redeemed our outstanding 2022 Notes, drawing the necessary proceeds to fund the redemption from our revolving credit facility. As of June 30, 2019, our outstanding borrowings under our revolving credit facility, which carries a floating interest rate, were $212.8 million, the majority of which is denominated in U.K. pounds sterling. To mitigate the interest rate risk associated with these borrowings, we entered into interest rate swap contracts to effectively fix the interest rate on a portion of the expected outstanding borrowings.

Outstanding Interest Rate Derivatives Associated with Revolving Credit Facility Borrowings



Notional Amounts U.K. £		Weighted Average Fixed Rate		Term
(In millions)
£	80	0.95	%	July 1, 2019 – January 1, 2020
£	50	0.95	%	January 2, 2020 – January 1, 2021

Transition from LIBOR. We are currently evaluating the impact of the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates. Currently we have several debt and derivative instruments that reference LIBOR-based rates. The transition from LIBOR is expected to take place in 2021, and we will continue to assess the impact of this transition. For additional information related to the transition from LIBOR, see Part 1, Item 1A. Risk Factors - Changes in interest rates could increase our operating costs by increasing interest expense under our credit facilities and our vault cash rental costs - in our Annual Report on Form 10-K for the year ended December 31, 2018.

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Foreign Currency Exchange Rate Risk

As a result of our operations in the U.K., Australia, Canada, Germany, South Africa, Mexico, Spain, Ireland, and New Zealand, we are exposed to market risk from changes in foreign currency exchange rates. The functional currencies of our international subsidiaries are their respective local currencies. The results of operations of our international subsidiaries are translated into U.S. dollars using average foreign currency exchange rates in effect during the periods in which those results are recorded and the assets and liabilities are translated using the foreign currency exchange rate in effect as of each balance sheet reporting date. These resulting translation adjustments to assets and liabilities have been reported in Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets. As of June 30, 2019, this accumulated translation loss totaled $56.9 million compared to $66.3 million as of December 31, 2018.

Our consolidated financial results were significantly impacted by changes in foreign currency exchange rates during the three months ended June 30, 2019 compared to the prior year. Our total revenues during the three and six months ended June 30, 2019 would have been higher by approximately $9.8 million and $21.2 million had the foreign currency exchange rates from the three months ended June 30, 2018 remained unchanged from the prior year. A sensitivity analysis indicates that, if the U.S. dollar uniformly strengthened or weakened 10% against the British pound, Euro, Mexican peso, Canadian dollar, Australian dollar, or South African rand, the effect upon our operating income would have been approximately $1.5 million and $1.6 million for the three and six months ended June 30, 2019, respectively. We entered into forward currency contracts to mitigate our exposure to changes in foreign currency exchange rates related to expected cash flows generated in currencies other than the U.S. dollar that are expected to be converted into U.S. dollars within the next twelve months.

Certain intercompany balances are designated as short-term in nature. The changes in these balances related to foreign currency exchange rates have been recorded in the accompanying Consolidated Statements of Operations and we are exposed to foreign currency exchange rate risk as it relates to these intercompany balances.

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 Procedures

Management’s Quarterly Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of 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 or submit 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 U.S. Securities and Exchange Commission. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2019 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

In conjunction with the evaluation described above, 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 quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The disclosure responsive to this Item related to our material pending legal and regulatory proceedings and settlements, is incorporated by reference herein from Part I. Financial Information, Item 1. Financial Statements, Note 15. Commitments and Contingencies – Legal Matters.

Item 1A. Risk Factors

You should carefully consider the risks discussed in Part I. Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”) and other information included and incorporated by reference in this report. These risks could materially affect our business, financial condition, or future results. There have been no material changes in our assessment of our risk factors from those set forth in our 2018 Form 10-K.

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

The following table presents information with respect to our purchases of Class A ordinary shares during the three months ended June 30, 2019. All of the shares repurchased were canceled.



Period	Total number of shares purchased ⁽¹⁾	Average price paid per share		Total number of shares purchased as part of publicly announced program	Approximate dollar value of shares that may yet be purchased under the program
April 1, 2019 - April 30, 2019	—	$	—	—	$	50,000,000
May 1, 2019 - May 31, 2019	108,094	29.97		108,094	46,760,932
June 1, 2019 - June 30, 2019	569,585	29.43		569,585	30,000,026
Total	677,679	$	29.51	677,679

(1) On March 26, 2019, the Company announced a stock repurchase program, under which it is authorized to repurchase up to $50 million of its Class A ordinary shares through August 31, 2020. There were no repurchases prior to May 2019.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits



Exhibit Number		Description
31.1*		Certification of the Chief Executive Officer of Cardtronics plc pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Chief Financial Officer of Cardtronics plc 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 plc pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
10.1*		Form equity award agreement (performance based)
101.INS*		XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL 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.

** Furnished herewith.

Management contract or compensatory plan or arrangement.

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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 PLC

August 1, 2019		/s/ Gary W. Ferrera
		Gary W. Ferrera
		Chief Financial Officer
		(Duly Authorized Officer and
		Principal Financial Officer)

August 1, 2019		/s/ Paul A. Gullo
		Paul A. Gullo
		Chief Accounting Officer
		(Duly Authorized Officer and
		Principal Accounting Officer)

CARDTRONICS PLC

FOURTH AMENDED AND RESTATED 2007 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT FOR EMPLOYEES

(Performance-Based)

The grant of restricted stock units (“RSUs”) to [●] (the “Participant”) on [●] (the “Grant Date”) by Cardtronics plc, an English public limited company (the “Company”), is subject to the terms and conditions of the Cardtronics plc Fourth Amended and Restated 2007 Stock Incentive Plan (as assumed and adopted by the Company) (the “Plan”) and this Restricted Stock Unit Agreement (this “Agreement”). By the Participant’s acceptance (electronic or otherwise) of this grant of RSUs, the Participant agrees to all the terms and conditions of the Plan, this Agreement, and any country-specific terms and conditions set forth in the addendum to this Agreement.


1.	Grant of RSUs. This Agreement applies to the grant to the Participant of [●] RSUs. Each RSU represents a contractual right to receive one Class A ordinary share, nominal value $0.01 each, of Cardtronics plc (an “Ordinary Share”) following the vesting of such RSU in accordance with and subject to this Agreement and the Plan.

Vesting Schedule. The Participant’s RSUs can vest to the extent the Performance Goals (as set forth in Schedule A) applicable to the Performance Period (as specified in Schedule A) are attained, as determined in accordance with this Section 2. The Committee will meet no later than March [●] of the year following the end of the Performance Period to determine whether the Company met its Performance Goals and approve the final Performance Goals achievement (the “Achievement”). The Company will issue a written notice to the Participant of the findings as to whether the Company met its Performance Goals and, if so, the specific level achieved (the “Award Notice”), and the exact number of RSUs that have vested based on achievement of the Performance Goals (such number of RSUs, the “Vested RSUs”).


3.	Definitions. To the extent any capitalized terms used in this Agreement are not defined herein, they shall have the meaning ascribed to them in the Plan. In addition to the terms defined elsewhere herein, the following capitalized terms shall have the meanings indicated below:

(a)

“Cause” shall have the meaning ascribed to it in the Participant’s employment agreement with the Company, a Subsidiary or the Company’s holding company; provided, however, that if the Participant does not have such an employment agreement or the Participant’s employment agreement does not define the term “cause”, then “Cause” shall mean the termination of the Participant’s employment with the Company based on a determination by the Committee (or its delegate) that the Participant: (i) has engaged in gross negligence, gross incompetence or willful misconduct in the performance of the Participant’s duties with respect to the Company or any Affiliate; (ii) has refused without proper legal reason to perform the Participant’s duties and

responsibilities to the Company or any Affiliate; (iii) has materially breached any material provision of a written agreement or corporate policy or code of conduct established by the Company or any Affiliate; (iv) has willfully engaged in conduct that is materially injurious to the Company or any Affiliate; (v) has disclosed without specific authorization from the Company confidential information of the Company or any Affiliate that is materially injurious to any such entity; (vi) has committed an act of theft, fraud, embezzlement, misappropriation or willful breach of a fiduciary duty to the Company or any Affiliate; or (vii) 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).

(b)

“Disability” shall mean that a Participant (i) is unable to engage in any substantial gainful activity 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 12 months or (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering the Company’s employees; provided that in all cases, “Disability” shall meet the requirements under Section 409A of the Code.


(c)	“Employer” shall mean the Company or Subsidiary that employs the Participant.


(d)	“Qualified Retirement” shall mean the resignation of the Participant who (i) has a minimum of five years of employment with the Company or any Affiliate and (ii) is at least 60 years of age as of the date of retirement.

(e)

“Termination Date” shall mean the effective date of termination or cessation of the Participant’s employment with the Employer if the Participant is a resident of, or employed in, the United States. If the Participant is a resident of, or employed outside of the United States, “Termination Date” shall mean the earliest of (i) the date on which notice of termination or cessation of the Participant's employment with the Employer is provided to or by the Participant; (ii) the last day of the Participant’s active service with the Employer or (iii) the last day on which the Participant is an employee of the Employer, as determined in each case without included any required advance notice period and irrespective of the status of the termination under local labor or employment laws.


4.	Termination of Service. Unless otherwise expressly provided in this Section 4 or Section 7, in the event the Participant’s employment with Employer terminates prior to the end of the Performance Period, the Participant shall cease vesting in the RSUs as of the Termination Date and any unvested RSUs shall be forfeited in their entirety.

(a)

Death or Disability. In the event the Participant’s employment terminates as a result of death or Disability within the Performance Period, the RSUs shall be deemed earned at the Target level and a number of RSUs equal to the product of (i) the total number of RSUs granted pursuant to this Agreement and (ii) the quotient obtained by dividing (a) the number of full and partial months the Participant was employed within the Performance Period and (b) [●] months, shall become vested upon such termination and paid out in Ordinary Shares within 30 days following such employment termination.

(b)

Qualified Retirement. In the event the Participant has a "separation from service" (within the meaning of Treasury Regulation Section 1.409A-1(h)), as a result of a Qualified Retirement within the Performance Period, then as of the end of the Performance Period, a number of RSUs (if any) shall vest equal to the product of (i) the total number of Vested RSUs (as determined in accordance with Section 2) and (ii) the quotient obtained by dividing (a) the number of full and partial months the Participant was employed during the Performance Period and (b) [●], and shall be paid out in Ordinary Shares in calendar year [●], following approval of the Achievement.

(c)

Involuntary Termination without Cause. In the event the Participant has a "separation from service" (within the meaning of Treasury Regulation Section 1.409A-1(h)), as a result of an involuntary termination without Cause (i) within the first [●] months of the Performance Period, then all outstanding RSUs shall be forfeited or (ii) within the last [●] months of the Performance Period, then as of the end of the Performance Period, a number of RSUs (if any) shall vest equal to the product of (a) the total number of Vested RSUs (as determined in accordance with Section 2) and (b) the quotient obtained by dividing (1) the number of full and partial months the Participant was employed during the Performance Period and (2) [●], and shall be paid out in Ordinary Shares in calendar year [●], following approval of the Achievement.

(d)

Section 409A. Notwithstanding the other provisions of this Section 4 or Section 7, if the Participant is eligible for the payout of Ordinary Shares under this Section 4 or Section 7 and is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Participant’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)), such Participant shall not receive Ordinary Shares in settlement of the RSUs until the earlier of (i) the date which is six months after the Participant’s “separation from service” for any reason other than death or (ii) the date of the Participant’s death.

Settlement of the RSUs. Except as otherwise set forth in Section 4 and Section 7, the Company shall settle the Vested RSUs by arranging for Ordinary Shares to be credited to the Participant’s account in the electronic stock plan account maintained with the brokerage firm engaged by the Company in connection with the operation of the Plan (the “Administrator”) in calendar year [●], following approval of the Achievement, but no later than [●], provided that the Company may require the Participant to pay up the nominal value of such Ordinary Shares of $0.01 before the RSUs are settled. The Participant’s RSUs shall be settled in the form of Ordinary Shares, except to the extent settlement in Ordinary Shares (i) is prohibited under applicable law or would be in breach of the requirements of any applicable regulatory rules, regulations or codes; or (ii) would require the Participant, the Company or the Employer to obtain the approval of any governmental or regulatory body in the Participant’s country of residence (or country of employment, if different), in which case the RSUs may, at the discretion of the Committee and subject to the Plan and such policies and procedures as it may adopt from time to time, settle the RSUs in cash. The Company may require the Participant to immediately sell any Ordinary Shares acquired by the Participant upon vesting or settlement if necessary to comply with applicable local law or to comply with tax obligations with respect to the vesting or settlement (in which case, the Participant hereby expressly authorizes the Company to issue sales instructions in relation to such Ordinary Shares on the Participant’s behalf). Neither the Company nor the Committee will be liable to the Participant or any other Person for damages relating to any delays in issuing or crediting the Ordinary Shares or any mistakes or errors in the issuance or crediting of the Ordinary Shares.

Dividend Equivalent Rights. If the Company declares a dividend with respect to Ordinary Shares, the Participant will receive dividend equivalent rights (the “DERs”) equal to the amount of the dividends payable on the dividend payment date with respect to the number of Ordinary Shares represented by the RSUs outstanding as of the dividend record date. The DERs will be subject to the same terms and conditions that apply to the RSUs (including vesting conditions), such that no payment shall be due to the Participant unless and until the corresponding RSUs have vested in accordance with Section 2. The DERs will be settled in cash on the date the underlying RSUs are settled, subject to the Company’s collection of the Tax-Related Items pursuant to Section 8. If an RSU is settled before a dividend payment date, but after the dividend record date, the Participant will be entitled to be paid for the DERs that relate to such RSUs on the dividend payment date, or within 30 days thereafter; provided that payment for such DERs shall be made no later than the later of (i) the last day of the taxable year in which the settlement of the RSUs occurs and (ii) the fifteenth (15th) day of the third (3rd) calendar month following the settlement of the RSUs.

Corporate Change. In the event of a Corporate Change, (i) if the Participant’s then outstanding RSUs are continued, assumed or substituted for awards by the Company or the surviving company or corporation or its parent, a number of such RSUs based on the greater of (A) the target level achievement of the Performance Goals and (B) the actual level of achievement of the Performance Goals as of immediately prior to the Corporate Change and based on pro-rated Performance Goals to account for any shortened Performance Period (if applicable), shall convert to time-based vesting RSUs that shall vest on the last day of the Performance Period and shall be paid out in Ordinary Shares in calendar year [●]; provided that, if, on or following the date of consummation of the Corporate Change, (x) the Participant’s employment is terminated by the Company or the surviving company or corporation or its parent without Cause prior to the end of the Performance Period and such termination of employment is a "separation from service" (within the meaning of Treasury Regulation Section 1.409A-1(h)), such RSUs shall fully vest and be paid out in Ordinary Shares in calendar year [●] or (y) the Participant’s employment is terminated as a result of death or Disability of the Participant prior to the end of the Performance Period, such RSUs shall fully vest and be paid out in Ordinary Shares within thirty (30) days following such termination, or (ii) if the Participant’s then outstanding RSUs are not continued, assumed or substituted for awards by the Company or the surviving company or corporation or its parent, such outstanding RSUs shall fully vest as of immediately prior to the Corporate Change based on the greater of (A) the target level of achievement of the Performance Goals and (B) the actual level of achievement of the Performance Goals as of immediately prior to the Corporate Change and based on pro-rated Performance Goals to account for any shortened Performance Period (if applicable), and shall be paid out in Ordinary Shares at the consummation of the Corporate Change.

Withholding of Tax. Regardless of any action the Company or its Affiliates or an Employer takes with respect to any or all income tax (including U.S. federal, state and local taxes or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (the “Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by the Participant is and remains the Participant’s responsibility and that the Company and its Affiliates or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including the grant of the RSUs, the vesting of the RSUs, the settlement of RSUs, the subsequent sale of any Ordinary Shares acquired pursuant to the RSUs and the receipt of any dividends or DERs and (ii) do not commit to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate the Participant’s liability for Tax-Related Items.

Prior to the delivery of Ordinary Shares on or following the vesting of the RSUs, if the Participant’s country of residence (or country of employment, if different) requires withholding of Tax-Related Items, then, at the discretion of the Committee, (i) the Company shall withhold a sufficient number of whole Ordinary Shares otherwise issuable upon the vesting of the RSUs that have an aggregate fair market value sufficient to pay the Tax-Related Items required to be withheld with respect to the Ordinary Shares at the applicable minimum statutory rate or other withholding rate, including the maximum rate, as determined by the Committee in accordance with the Plan and applicable law or (ii) the Participant will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of the Participant’s participation in the Plan or the Participant’s acquisition of Ordinary Shares at the applicable minimum statutory rate or other withholding rate, including the maximum rate, as determined by the Committee in accordance with the Plan.

If the obligation for the Participant’s Tax-Related Items is satisfied by withholding Ordinary Shares as described herein, the Participant shall be deemed to have been issued the full number of shares of Ordinary Shares issuable upon vesting, notwithstanding that a number of the shares of Ordinary Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of the vesting or any other aspect of the RSUs.

The Company may refuse to deliver any Ordinary Shares due upon settlement of the RSUs if the Participant fails to comply with his or her obligations in connection with the Tax-Related Items as described herein and such Ordinary Shares will be forfeited. If the Participant is subject to taxation in more than one jurisdiction, the Participant acknowledges that the Company or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Participant hereby consents to any action reasonably taken by the Company and the Employer to meet their obligation for Tax-Related Items. All other Tax-Related Items related to the RSUs and any Ordinary Shares delivered in payment thereof are the Participant’s sole responsibility.


9.	Nature of Grant. In accepting the grant of the RSUs, the Participant acknowledges, understands and agrees that:


(a)	the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Committee at any time, as provided in the Plan and this Agreement;


(b)	the grant of RSUs are voluntary and occasional and do not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted in the past;


(c)	all decisions with respect to future grants of RSUs or other grants, if any, will be at the sole discretion of the Company or the Committee, as applicable, including, but not limited to, the form and timing of awards, the number of Ordinary Shares subject to awards, and the vesting provisions applicable to the awards;


(d)	the Participant shall not be entitled and shall be deemed to have waived any possible entitlement, to any compensation for any loss he may suffer as a result of the exercise by the Company or the Committee of, or its failure to exercise, any of the discretions given to it by the Plan;


(e)	the grant of RSUs and the Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company, the Employer or any Affiliate and shall not interfere with the ability of the Employer to terminate the Participant’s employment or service relationship;


(f)	the Participant is voluntarily participating in the Plan;


(g)	the RSUs and the Ordinary Shares subject to the RSUs are not intended to replace any pension rights or compensation;

(h)

the RSUs, the Ordinary Shares subject to the RSUs and the value of the same are an extraordinary item of compensation outside the scope of the Participant’s employment (and employment contract, if any) and are not part of normal or expected compensation for any purpose, including calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;


(i)	the future value of the Ordinary Shares underlying the RSUs is unknown, indeterminable and cannot be predicted with certainty;

(j)

no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from the Participant ceasing to have rights under or to be entitled to RSUs, whether or not as a result of the Participant’s termination of employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any), and in consideration of the grant of the RSUs to which the Participant is otherwise not entitled, the Participant irrevocably agrees to (x) never to institute a claim against the Company, the Employer or any Affiliate and (y) waive his or her ability, if any, to bring any such claim, and releases the Company, the Employer and all Affiliates from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction; by participating in the Plan, the Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; and

(k)

if the Participant resides or is employed outside the United States, the Participant acknowledges and agrees that the Company and any Affiliate shall not be liable for any exchange rate fluctuation between the Participant’s local currency and the U.S. Dollar that may affect the value of the RSUs or of any amounts due pursuant to the settlement of the RSUs or the subsequent sale of any Ordinary Shares acquired upon settlement.

10.

Insider Trading and Market Abuse Laws. The Participant acknowledges that he or she may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the Participant’s country of residence, which may affect the Participant’s ability to acquire or sell Ordinary Shares or rights to Ordinary Shares (e.g., the RSUs) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions, including the Participant’s country of residence). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant is responsible for ensuring compliance with any applicable restrictions and is advised to consult with his or her personal legal advisor on this matter.

11.

Company Policies. The Participant acknowledges and expressly agrees to all of the terms of the Company's policies in force and as may be amended or replaced from time to time which apply (as indicated by the terms of such policies) in respect of the grant of the RSUs and receipt of Ordinary Shares thereunder, including (without limitation) the Company’s Stock Ownership Policy, which may apply mandatory holding periods to the Ordinary Shares acquired by the Participant pursuant to the RSUs, and the Company’s Recoupment of Incentive Compensation Policy a/k/a Clawback Policy.


12.	Compliance with Law. The Company shall not be required to issue or deliver any Ordinary Shares pursuant to this Agreement pending compliance with all applicable securities and other laws, rules and regulations (including any registration requirements or tax withholding requirements) and compliance with the rules and practices of any stock exchange upon which the Ordinary Shares are listed.

13.

Country Specific Addendum. Notwithstanding any provisions of this Agreement to the contrary, the RSUs shall be subject to any special terms and conditions for the Participant’s country of residence (and country of employment, if different) set forth in the addendum to this Agreement (the “Addendum”). If the Participant transfers residence or employment to another country reflected in the Addendum, the special terms and conditions for such country will apply to the Participant to the extent the Company determines, in its sole discretion, that the application of such special terms and conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the RSUs and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate the Participant’s transfer). In all circumstances, any applicable Addendum shall constitute part of this Agreement.

14.

No Advice Regarding Grant. The Company and the Employer are not providing any tax, legal or financial advice, nor is the Company or the Employer making any recommendations regarding the RSUs, the Participant’s participation in the Plan or the Participant’s acquisition or sale of the underlying Ordinary Shares. The Participant is hereby advised to consult with the Participant’s own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to the Plan.


15.	Restriction on Transferability. Except to the extent expressly provided in the Plan or this Agreement, the RSUs may not be sold, transferred, pledged, assigned or otherwise alienated at any time. Any attempt to do so contrary to the provisions hereof shall be null and void.

16.

Rights as a Shareholder. The Participant shall not have voting or any other rights as a shareholder of the Company with respect to the Ordinary Shares issuable upon the vesting of RSUs until the date of issuance of such Ordinary Shares. Upon settlement of the RSUs, the Participant will obtain, with respect to the Ordinary Shares received in such settlement, full voting and other rights as a shareholder of the Company.

17.

Notices. Any notice given to the Participant shall be addressed to the Participant at the address or electronic address listed in the Participant’s electronic stock plan account held with the Administrator. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means or request the Participant’s consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or the Administrator.


18.	Binding Effect. This Agreement shall be binding upon, enforceable against, and inure to the benefit of the Participant, including the Participant’s personal representatives, and the Company and its successors and assigns.


19.	Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Grant Date and the provisions of this Agreement, except terms otherwise defined herein, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the date hereof.

20.

Severability. If all or any part of the Plan or this Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or this Agreement not declared to be unlawful or invalid. Any provision of this Agreement (or part of such provision) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such provision (or part of such provision) to the fullest extent possible while remaining lawful and valid.


21.	Waiver. The waiver by the Company with respect to the Participant (or any other Participant’s) compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant of any provision of this Agreement.

22.

Language. If the Participant is resident or employed outside of the United States, the Participant acknowledges and agrees that it is his or her express intent that the Plan, this Agreement and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the RSUs, be drawn up in English. If the Participant has received the Plan, this Agreement or any other documents related to the RSUs translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

23.

Electronic Signatures. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Delivery of a copy of this Agreement or any other document contemplated hereby bearing an original or electronic signature by facsimile transmission (whether directly from one facsimile device to another by means of a dial-up connection or whether mediated by the worldwide web), by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original or electronic signature.

24.

Data Privacy. The Company and its Affiliates hereby notify the Participant of the following in relation to the Participant’s personal data and the collection, processing and transfer of such data in relation to the grant of the RSUs and the participation in the Plan pursuant to applicable personal data protection laws. The collection, processing and transfer of the Participant’s personal data is necessary for the Company’s administration of the Plan and the Participant’s participation in the Plan, and the Participant’s denial and/or objection to the collection, processing and transfer of personal data may affect the Participant’s ability to participate in the Plan. As such, the Participant expressly and voluntarily acknowledges, consents and agrees (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein. Special provisions operate for Participants located in Europe (see below) which do not rely on the Participant's consent as the basis for lawful processing.

The Company and its Affiliates hold certain personal information about the Participant, including (but not limited to) the Participant’s name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all RSUs or any other entitlement to shares awarded, canceled, purchased, vested, unvested or outstanding in the Participant’s favor for the purpose of managing and administering the Plan (the “Data”). The Data may be provided by the Participant or collected, where lawful, from third parties, and the Company and its Affiliates will process the Data for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan. The data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Participant’s country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such information is unnecessary for the processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the Participant’s participation in the Plan.

The Company and its Affiliates will transfer Data as necessary for the purpose of implementation, administration and management of the Participant’s participation in the Plan, and the Company and its Affiliates may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, the United States or elsewhere throughout the world. The Participant hereby expressly authorizes (where required under applicable law) the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares acquired pursuant to the Plan.

The Participant may, at any time, exercise his or her rights provided under applicable personal data protection laws, which may include the right to (i) obtain confirmation as to the existence of the Data, (ii) verify the content, origin and accuracy of the Data, (iii) request the integration, update, amendment, deletion or blockage (for breach of applicable laws) of the Data and (iv) oppose, for legal reasons, the collection, processing or transfer of the Data that is not necessary or required for the implementation, administration and/or operation of the Plan and the Participant’s participation in the Plan. The Participant may seek to exercise these rights by contacting his or her local Human Resources manager.

Where The General Data Protection Regulation (EU) 2016/679 and local implementing data protection laws ("Data Protection Legislation") apply, the Company and its Affiliates confirm that they will comply with Data Protection Legislation when processing a Participant's data and that further information about the processing of personal data is set out in the privacy notice which has been made available by the employing company and to which the Participant has previously been directed.


25.	Controlling Law. The RSUs and this Agreement are governed by, and subject to, the laws of England and Wales. The English courts will have exclusive jurisdiction in respect of all disputes arising under or in connection with the RSUs.

(Signature page follows)

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has executed this Agreement, all as of the date first above written.

CARDTRONICS PLC

PARTICIPANT

[●]

Accepted on: Acceptance Date

SCHEDULE A

Performance Goals. For the avoidance of doubt, the terms defined in this Agreement shall have the same meaning in this Schedule A. The Committee has adopted the following performance goals (the “Performance Goals”) for the period from [●] through [●] (the “Performance Period”):



Measure	Threshold ($ in 000’s)	Target ($ in 000’s)	Maximum ($ in 000’s)	Weighting
[●]	[●]	[●]	[●]	[●]
Payout	[●]	[●]	[●]


1.	Definitions. In addition to the terms defined elsewhere herein, the following capitalized terms shall have the meanings indicated below:


2.	Performance Qualifiers. For the RSUs to vest under this Agreement, both of the following performance qualifiers must be met:


(a)	The Company must be compliant with all material public company regulations and reporting requirements for its fiscal year.


(b)	The Participant must achieve the minimum performance standards established by his or her superior (or the Board) and must have completed the required corporate and compliance training assigned as of the end of the Performance Period.

Adjustments. The Performance Goals described in Section 1 of this Schedule A represent the Company’s business as of [●]. The Committee has approved the following categories of adjustments to actual performance for the purposes of calculating the level of performance achieved in this Schedule A. In order for an adjustment category to be used, the adjustment must be reversing the impact actually realized and reported in the Company’s 10-K in a given fiscal year. The Committee, however, will review and approve all adjustments to actual performance prior to completion of the calculation of the RSUs earned under this Agreement. Certain adjustments already may be incorporated in [●] and are not intended to be adjusted twice.

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ADDENDUM

This Addendum includes additional terms and conditions that govern the RSUs granted to the Participant under the Plan if the Participant resides in, or is employed in, one of the countries addressed herein. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan and the Restricted Stock Unit Agreement (the “Agreement”) to which this Addendum is attached.

This Addendum also includes information regarding exchange control laws and certain other issues the Participant should be aware of with respect to the Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of March 2017. The laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information noted herein as the only source of information relating to the consequences of the Participant’s participation in the Plan because the information may be out of date by the time the Participant vests in the RSUs or sells the Ordinary Shares issued upon settlement of the RSUs.

In addition, the information contained in this Addendum is general in nature and may not apply to the Participant’s particular situation, and the Company is not in a position to assure the Participant of any particular result. Accordingly, the Participant is advised to seek appropriate professional advice as to how the applicable laws in his or her country may apply to his or her situation.

If the Participant (i) is a citizen or resident of a country other than the one in which he or she is currently working or residing, (ii) transfers to another country after the RSU grant date, (iii) changes employment status to a consultant position, or (iv) is considered a resident of another country for local law purposes, the Company shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall apply to the Participant.

AUSTRALIA

Terms and Conditions (General)

Form of Settlement. Notwithstanding any discretion contained in the Plan, the RSUs only will be settled in Ordinary Shares which will be newly issued by the Company. The RSUs do not provide any right for the Participant to receive a cash payment.

Agreements and consents: The Participant agrees to enter into any document and/or make any representations as may be required from time to time by the Company, the Employer or any Affiliates, such that the Company or its Affiliates is able to fulfill its obligations and can rely on any necessary exemptions under securities laws and/or can make any necessary filings under local securities laws.

Notifications

Tax Information. The Plan is a plan to which Subdivision 83A-C of the Income Tax Assessment Act 1197 (Cth) applies (subject to the conditions in the Act).

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CANADA

Terms and Conditions (General)

Form of Settlement. Notwithstanding any discretion contained in the Plan, the RSUs only will be settled in Ordinary Shares. The RSUs do not provide any right for the Participant to receive a cash payment.

Involuntary Termination Terms. In the event of the Participant’s involuntary termination (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is providing service or the terms of the Participant’s employment agreement, if any), vesting will terminate as of the date that is the earlier of (i) the date the Participant receives a notice of termination from the Employer, or (ii) the date the Participant is no longer actively rendering services, regardless of any notice period or period of pay in lieu of such notice required under local law (including, but not limited to, statutory law, regulatory law, or common law). The Board or the chief executive officer of the Company or an Affiliate, as applicable, shall have the exclusive discretion to determine when the Participant is no longer actively employed or rendering services for purposes of the RSUs.

Terms and Conditions Applicable if Participant Resides in Quebec

Consent to Receive Information in English. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Consentement Pour Recevoir Des Informations en Anglais. Les parties reconnaissent avoir exigé la rédaction en anglais de la convention, ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.

Data Protection. The following provision supplements Section 24 of the Agreement:

The Participant hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. The Participant further authorizes the Company, its Affiliates and any Administrator that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. The Participant further authorizes the Company and its Affiliates to record such information and to keep such information in the Participant’s employee file.

Notifications

Securities Law Information. Canadian residents may not be permitted to sell or otherwise dispose of any Ordinary Shares acquired upon vesting of the RSUs within Canada. Canadian residents may only be permitted to sell or dispose of any such Ordinary Shares if such sale or disposal takes place outside of Canada on the facilities on which the Ordinary Shares are traded (i.e., on the NASDAQ).

Foreign Asset and Account Reporting Notification. If the Participant is a Canadian resident, the Participant may be required to report his or her foreign property on form T1135 (Foreign Income Verification Statement)

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if the total cost of the foreign property exceeds C$100,000 at any time during the year. Foreign property includes Ordinary Shares acquired under the Plan and may include the RSUs. The RSUs must be reported - generally at a nil cost - if the C$100,000 cost threshold is exceeded because of other foreign property the Participant holds. If Ordinary Shares are acquired, their cost generally is the adjusted cost base of the Ordinary Shares (“ACB”). The ACB ordinarily would equal the fair market value of the Ordinary Shares at the time of acquisition, but if the Participant owns other Ordinary Shares, the ACB may have to be averaged with the ACB of the other Ordinary Shares. The form T1135 generally must be filed by April 30 of the following year. The Participant should consult with his or her personal tax advisor to determine the Participant’s personal reporting obligations.

Data Protection. The Company and its Affiliates confirm that they shall comply with the General Data Protection Regulation (EU) 2016/679 and the relevant implementing legislation when processing the Participant’s personal data for the purpose of administering the Plan. Further information about the processing of Participants’ personal data is set out in the privacy notice which is available at: http://www.cardtronics.de/de/privacy.aspx and http://www.cardtronics.de/en/privacy.aspx.

GERMANY

Terms and Conditions (General)

Definition of "Disability”: The definition of "Disability", instead of that provided in this Agreement, shall be determined by the Company or the Participant's Employer and in accordance with the Employer's relevant employment policies, as may be in place from time to time.

Definition of "Qualified Retirement”: The definition of "Qualified Retirement", instead of that provided in this Agreement, shall be determined by the Company or the Participant's Employer and in accordance with the Employer's relevant employment policies, as may be in place from time to time.

Notifications

Exchange Control Notification. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank (Bundesbank). For payments made or received in connection with securities (including proceeds realized upon the sale of Ordinary Shares), the report must be filed electronically by the fifth day of the month following the month in which the payment was received. The form of report (Allgemeine Meldeportal Statistik) can be accessed via Bundesbank’s website (www.bundesbank.de) and is available in both German and English. The Participant is personally responsible for complying with exchange control restrictions in Germany.

IRELAND

Terms and Conditions (General)

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Notifications

Director Notification Obligation. Irish residents who may be a director, shadow director or secretary of an Irish subsidiary whose interest in the Company represents more than 1% of the Company’s voting share capital are required to notify such Irish Subsidiary in writing within a certain time period. This notification requirement also applies with respect to the interests of a spouse or children under the age of 18 (whose interests will be attributed to the director, shadow director or secretary).

MEXICO

Terms and Conditions (General)

Plan Document Acknowledgement. By accepting the grant of RSUs, the Participant acknowledges that he or she has received a copy of the Plan and the Agreement, including this Addendum, which the Participant has reviewed. The Participant further acknowledges that he or she accepts all the provisions of the Plan and the Agreement, including this Addendum. The Participant also acknowledges that he or she has read and specifically and expressly approves the terms and conditions set forth in Section 9 of the Agreement, which clearly provides as follows:

(1) The Participant’s participation in the Plan does not constitute an acquired right;


(2)	The Plan and the Participant’s participation in it are offered by the Company on a wholly discretionary basis;

(3) The Participant’s participation in the Plan is voluntary; and

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(4)	None of the Company, the Employer or any Affiliate is responsible for any decrease in the value of any Ordinary Shares acquired upon the RSUs vesting.

Nature of Grant. This provision supplements Section 9 of the Agreement:

By accepting the grant of RSUs, the Participant expressly recognizes that the Company, with its principal operating offices at 3250 Briarpark Drive, Suite 4000, Houston, Texas, 77042, United States of America, is solely responsible for the administration of the Plan and that the Participant’s participation in the Plan and acquisition of Ordinary Shares under the Plan does not constitute an employment relationship between the Participant and the Company since the Participant is participating in the Plan on a wholly commercial basis and the Participant’s sole employer is a Mexican legal entity that employs the Participant and to which the Participant is subordinated (i.e., the Employer). Based on the foregoing, the Participant expressly recognizes that the Plan and the benefits that he or she may derive from participating in the Plan do not establish any rights between the Participant and the Employer and do not form part of the employment conditions and/or benefits provided by the Employer and any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of the Participant’s employment.

The Participant further acknowledges that their participation in the Plan and the offer of the RSU is a private offer.

The Participant further understands that his or her participation in the Plan is as a result of a unilateral and discretionary decision of the Company; therefore, the Company reserves the absolute right to amend and/or discontinue the Participant’s participation in the Plan at any time without any liability to the Participant.

Finally, the Participant hereby declares that the Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages regarding any provision of the Plan or the benefits derived under the Plan, and the Participant therefore grants a full and broad release to the Company, and its Affiliates, branches, representation offices, shareholders, trustees, directors, officers, employees, agents, or legal representatives with respect to any such claim that may arise.

NEW ZEALAND

Terms and Conditions (General)

Notifications

Securities Law Information. Warning: This is an offer of rights to receive Ordinary Shares upon vesting of the RSUs subject to the terms of the Plan and the Agreement. RSUs give you a stake in the ownership of the Company. You may receive a return if dividends are paid on the Ordinary Shares. If the Company runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preferred shares have been paid. You may lose some or all of your investment.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors to make an informed decision. The usual rules do not apply to this offer because it is made under an employee share purchase scheme. As a result,

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you may not be given all the information usually required. You will also have fewer other legal protections for this investment. You should ask questions, read all documents carefully, and seek independent financial advice before committing to participate in the Plan.

In addition, you are hereby notified that the documents listed below are available for review on the Company intranet site at the web addresses listed below:


1.	The Company's most recent Annual Report (Form 10-K):

https://www.sec.gov/Archives/edgar/data/1671013/000155837018001333/catm-20171231x10k.htm


2.	The Company's most recent published financial statements (Form 10-Q or 10-K) and the auditor’s report on those financial statements:

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001671013&owner=exclude&count=40&hidefilings=0


3.	The Plan:

https://www.sec.gov/Archives/edgar/data/1671013/000110465916130582/a16-14149_1ex10d3.htm

You acknowledge that you may have a copy of the above documents sent to you, without fee, on written request being mailed to 3250 Briarpark Drive, Suite 4000, Houston, Texas, 77042, United States of America. The telephone number at the executive offices is 832-308-4000.

As noted above, you are advised to carefully read the materials provided before making a decision whether to participate in the Plan. You are also encouraged to contact your tax advisor for specific information concerning your personal tax situation with regard to Plan participation.

SPAIN

Terms and Conditions (General)

Nature of Grant. This provision supplements Section 9 of the Agreement:

In accepting the RSUs, the Participant consents to participating in the Plan and acknowledges having received and read a copy of the Plan.

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The Participant understands that the Company has unilaterally, gratuitously and discretionally decided to grant the RSUs under the Plan to individuals who may be employees of the Employer, the Company or any Affiliate throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company or any Affiliate except as set forth in the Plan or Agreement. Consequently, the Participant understands that the RSUs are granted on the assumption and condition that such RSUs and any Ordinary Shares acquired upon vesting of the RSUs shall not become a part of any employment contract (either with the Employer or the Company or any Affiliate) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. In addition, the Participant understands that the RSUs would not be granted but for the assumptions and conditions referred to above; thus, the Participant acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then the grant of the RSUs shall be null and void.

Further, the vesting of the RSUs is expressly conditioned on the Participant’s continuous service, such that if the Participant’s service or employment terminates for any reason whatsoever, the RSUs will cease to vest immediately effective on the date of termination of the Participant’s service or employment. This will be the case, for example, even if the Participant: (a) is considered to be unfairly dismissed without good cause; (b) is dismissed for disciplinary or objective reasons or due to a collective dismissal; (c) terminates service or employment due to a change of work location, duties or any other employment or contractual condition; (d) terminates service or employment due to the Company’s or any Affiliate’s unilateral breach of contract; or (e) is terminated from service or employment for any other reason whatsoever. Consequently, upon the Participant’s termination of service or employment for any of the above reasons, the Participant will automatically lose any rights to the RSUs that were unvested on the date of termination.

Notifications

Securities Law Notification. The RSUs described in the Plan and the Agreement, including this Addendum, do not qualify under Spanish regulations as securities. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory. The Plan and the Agreement, including this Addendum, have not been nor will they be registered with the Comisión Nacional del Mercado de Valores (Spanish Securities Exchange Commission), and they do not constitute a public offering prospectus.

Exchange Control Notification. The acquisition, ownership and sale of Ordinary Shares under the Plan must be declared for statistical purposes to the Spanish Dirección General de Comercio e Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a department of the Ministry of Economy and Competitiveness. Generally, the declaration must be made each January for Ordinary Shares owned as of December 31 of the prior year; however, if the amount of Ordinary Shares acquired or sold exceeds a specific threshold, the declaration must be filed within one month of the acquisition or sale, as applicable.

Foreign Asset / Account Reporting. Spanish residents are required to declare electronically to the Bank of Spain any securities accounts (including brokerage accounts held abroad), as well as the Ordinary Shares held in such accounts if the value of the transactions during the prior tax year or the balances in such accounts as of December 31 of the prior tax year exceeds €1,000,000.

In addition, the Participant may be subject to certain tax reporting requirements with respect to assets or rights that the Participant holds outside of Spain, including bank accounts, securities and real estate if the aggregate value for a particular category of assets exceeds €50,000 as of December 31 each year. Ordinary Shares acquired under the Plan or other equity programs offered by the Company constitute securities for purposes of this requirement, but unvested awards (e.g., RSUs, etc.) are not considered assets or rights for purposes of this reporting requirement. If applicable, the Participant must report the assets on Form 720 by

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no later than March 31 following the end of the relevant year. After the rights and/or assets are initially reported, the reporting obligation will apply only if the value of previously-reported rights or assets increases by more than €20,000 as of each subsequent December 31 or if the Participant sells or otherwise disposes of previously-reported rights or assets. The Participant should consult with his or her personal advisor to determine the Participant’s obligations in this respect.

http://www.cardtronics.es/en/privacy.html.

UNITED KINGDOM

Terms and Conditions (General)

Settlement in Ordinary Shares. Notwithstanding any discretion in the Plan to settle the RSUs in cash, due to tax law considerations in the United Kingdom, the RSUs will be settled in Ordinary Shares only. The RSUs do not provide any right for the Participant to receive a cash payment.

Tax Acknowledgment. Without limitation to Section 8 of the Agreement, the Participant hereby agrees that he is or she is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or (if different) the Employer or by HMRC (or any other tax authority or any other relevant authority). The Participant also hereby agrees to indemnify and keep indemnified the Company and (if different) the Employer against any Tax-Related Items that they are required to pay or withhold on the Participant’s behalf or have paid or will pay to HMRC (or any other tax authority or any other relevant authority).

http://www.cardtronics-uk.com/contact/privacy.asp.

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UNITED STATES

Notifications

Code Section 409A. For U.S. taxpayers, it is the intent that the grant of RSUs as set forth in the Agreement shall qualify for exemption from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and restated (the “Code”), and any ambiguities herein will be interpreted to so qualify or comply. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Agreement as may be necessary to ensure that all payments provided for under the Agreement are made in a manner that qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Company makes no representation that the grant, vesting, or settlement of the RSUs will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the grant, vesting or settlement of the RSUs granted pursuant to the Agreement. The Company will have no liability to the Participant or any other party if the RSUs, the delivery of Ordinary Shares upon settlement of the RSUs or other payment hereunder that is intended to be exempt from, or compliant with, Section 409A of the Code, is not so exempt or compliant, or for any action taken by the Company with respect thereto.

* * *

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF CARDTRONICS PLC

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Edward H. West, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (this “report”) of Cardtronics plc;


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: August 1, 2019		/s/ Edward H. West
		Edward H. West
		Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER OF CARDTRONICS PLC

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Gary W. Ferrera, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (this “report”) of Cardtronics plc;


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: August 1, 2019		/s/ Gary W. Ferrera
		Gary W. Ferrera
		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 plc (“Cardtronics”) for the period ended June 30, 2019 as filed with the Securities and Exchange Commission 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, that, to his knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange 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: August 1, 2019		/s/ Edward H. West
		Edward H. West
		Chief Executive Officer


Date: August 1, 2019		/s/ Gary W. Ferrera
		Gary W. Ferrera
		Chief Financial Officer