The terms of our merchant contracts vary as a result of negotiations at the time of execution. In the case of Company-owned ATMs, the contract terms vary, but typically include the following:

~~a multi-year term, typically five to seven years;~~

~~exclusive deployment of ATMs at locations where we install an ATM;~~

a multi-year term, typically approximately five years;

~~the right to increase surcharge fees, with merchant consent required in some cases;~~

exclusive deployment of ATMs at locations where we install an ATM;

in the U.S., our right to terminate or remove ATMs or renegotiate the fees payable to the merchant if surcharge fees or interchange fees are reduced or eliminated as a result of regulatory action; and

the right to increase surcharge fees, with merchant consent required in some cases;

~~provisions that make the merchant’s fee dependent on the number of ATM transactions.~~

provisions that make the merchant’s fee dependent on the number of ATM transactions.

During the year ended December 31, ~~2018,~~2019, we derived approximately ~~24%~~22% of our total revenues from ATMs placed at the locations of our top five merchant customers, including revenues from bank branding and Allpoint at these locations, none of which individually contributed more than approximately 6% of our total revenues for the year. The weighted average remaining life of our top five merchant customers is approximately ~~2.7~~3.5 years. For additional information related to the risks associated with our customer mix, see Item 1A. Risk Factors - We derive a substantial portion of our revenue from ATMs placed with a small number of merchants. The expiration, termination or renegotiation of any of these contracts with our top merchants, or if one or more of our top merchants were to cease doing business with us, or substantially reduce its dealings with us could cause our revenues to decline significantly and our business, financial condition and results of operations could be adversely impacted.

Seasonality and Tourism

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~~Seasonality~~

Our overall business is somewhat seasonal in nature with generally fewer transactions occurring in the first quarter of the year. Transaction volumes at our ATMs located in regions affected by strong winter weather patterns typically experience declines in volume during winter months as a result of decreases in the amount of consumer traffic through such locations. We usually see an increase in transactions in the warmer summer months, which are also aided by increased vacation and holiday travel. We expect these fluctuations in transaction volumes to continue in the future.

In addition, other factors, such as a recessionary economic, environment or real, or potential health emergencies such as the widespread outbreak of contagious diseases, could hinder travel, reduce the use of cash and may have a negative impact on transaction levels.

Competition

Historically, we have competed with independent ATM deployers ~~(commonly~~(commonly referred to as “IADs”) and financial institutions for ATM placements, new merchant accounts, bank-branding and network-branding relationships, and acquisitions. IADs compete with us for placement rights at merchant locations. Our ATMs compete with the ATMs owned and operated by financial institutions and other IADs for underlying consumer transactions. In certain locations with very high foot traffic, such as airports, major train stations, large arenas, and stadiums, we often see competition from large financial institutions as they may utilize such locations for marketing and advertising purposes, and in some cases are willing to subsidize the operations of the ATM. ~~Recently, we have seen somewhat reduced competition from financial institutions seeking to place ATMs directly at merchant locations.~~

We have established relationships with leading regional and national financial institutions, as well as ~~large store-value~~digital banks, other operators of consumer financial services, and stored-value debit card issuers through our bank-branding program and Allpoint. Both of these programs can be cost-efficient alternatives to ~~financial institutions~~these organizations in lieu of operating branches and owning and operating extensive ATM networks. We believe the scale of our extensive network, our EFT transaction processing services, comprehensive solutions and our focus on customer service provide us with competitive advantages for providing services to leading financial ~~institutions.~~

institutions and newer providers of consumer financial services.

Through Allpoint, we have significantly expanded our relationships with local, regional, and national financial institutions as well as ~~large~~digital banks, providers of consumer financial services and other issuers of stored-value debit card programs in the U.S. With regard to Allpoint, we encounter competition from other organizations’ surcharge-free networks that are seeking to sell their network to retail locations and offer surcharge-free ATM access to issuers of stored-value debit cards, as well as financial institutions that lack large ATM footprints.

We work to continually develop the types of services we provide to financial institutions and merchants including management of their ATMs. With respect to our managed services offering, we believe we are well-positioned to offer a comprehensive ATM outsourcing solution with our breadth of services, in-house expertise, and network of existing locations that can leverage the economies of scale required to operate an ATM portfolio. There are several large financial services companies, ATM equipment manufacturers, and service providers that currently offer some of the services we provide, with whom we expect to compete directly in this area. While we have direct competition for providing certain services, we believe that we have unique advantages that will allow us to offer a variety of compelling ~~solution~~solutions to financial institutions and retailers alike.

Acquisitions have historically been a consistent part of our strategy and may form part of our strategy in the future. Typically, competition for acquisitions is from other IADs, financial service or payments businesses, and/or private equity sponsors of ATM portfolios.

Finally, we face indirect competition from alternative payment mechanisms, such as card-based payments, including contactless, or other electronic forms of payment, including payment applications on mobile phones. While it has been difficult to specifically quantify the direct effects ~~from~~of alternative payment sources on our transaction volumes, cash-based payments have declined as a percentage of total payments in our primary geographic markets in recent years. Further expansion in electronic payment forms and the entry of new and less traditional competitors could reduce consumer demand for ~~cash at merchant locations.~~cash. We expect to continue to face competition from emerging payments technology in the future. See Item 1A. Risk Factors - The proliferation of payment options and increasingly frictionless methods of payment other than cash, including credit cards, debit cards, stored-value debit cards, contactless, and mobile payments options could result in a reduced need for cash in the marketplace and a resulting decline in the usage of our ATMs.

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Government and Industry Regulation

Our principal business, ATM network ownership and operation, is subject to government (federal, state, or local) and industry regulations. Our failure to comply with applicable laws and regulations could result in restrictions on our ability to provide our products and services in such jurisdictions, as well as the imposition of civil fines. For additional information related to recent regulatory matters that have impacted our operations or are expected to impact us in the future, see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Developing Trends and Recent Events.

Risk Management

We have adopted a formalized Enterprise Risk Management program that seeks to identify and manage the major risks we face. The major risks are prioritized and assigned to a member of the management team who develops mitigation plans, monitors the risk activity, and is responsible for implementation of the mitigation plan, if necessary. The risks, plans, and activities are regularly monitored by our management team and overseen by our Board of Directors (“Board”).

Employees

As of December 31, ~~2018,~~2019, we had ~~2,104~~1,987 employees,~~, 394~~ 326 of which were covered by a collective bargaining agreement. We currently believe our relationships with employees represented by the union are good and we have not experienced any work stoppages.

Organizational History and Additional Company Information

We were formed as a Texas corporation in 1993 and originally operated under the name of Cardpro, Inc. In June 2001, Cardtronics Group, Inc. was incorporated under the laws of the state of Delaware and became the parent company for the existing business. In January 2004, Cardtronics Group, Inc. changed its name to Cardtronics, Inc. (“Cardtronics Delaware”), and in December 2007, we completed an initial public offering.

In July 2016, the location of incorporation of the parent company of the Cardtronics group of companies was changed from Delaware to the U.K., whereby Cardtronics plc, a public limited company organized under English law (“Cardtronics plc”), became the new publicly traded corporate parent of the Cardtronics group of companies following the completion of the merger between Cardtronics Delaware and one of its subsidiaries (the “Redomicile”). Upon completion of the Redomicile, Cardtronics plc common shares were listed and began trading on the NASDAQ stock market under the symbol “CATM,” the same symbol under which common shares of Cardtronics Delaware were formerly listed and traded. The Redomicile transaction was accounted for as an internal reorganization of entities under common control, and therefore, Cardtronics Delaware’s assets and liabilities have been accounted for at their historical cost basis and not revalued in the transaction.

A large portion of our growth throughout our operating history was driven by acquisitions as we expanded our operations in the U.S. and into several other new geographic markets in North America, Europe, South Africa, Australia and New Zealand. Our largest markets are currently the U.S. and the U.K. Over the past few years, our growth strategy has been primarily focused on organic growth.

General information about us can be found on our website at http://www.cardtronics.com. We file annual, quarterly, and current reports as well as other information electronically with the Securities Exchange Commission (“SEC”) under the Exchange Act. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports are available free of charge on our website as soon as reasonably practicable after the reports are filed or furnished electronically with the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. You may also request an electronic or paper copy of our SEC filings at no cost by writing or telephoning us at the following: Cardtronics plc, Attention: Chief Financial Officer, 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042; (832) 308-4000. Information on our website is not incorporated into this 2019 Form 10-K or our other securities filings.

ITEM 1A. RISK FACTORS

Risks associated with our industry

The proliferation of payment options and increasingly frictionless methods of payment other than cash, including credit cards, debit cards, stored-value debit cards, contactless, and mobile payments options, could result in a reduced need for cash in the marketplace and a resulting decline in the usage of our ATMs.

The U.S., the U.K., Canada, Australia, Germany, and other developed markets have seen a shift in consumer payment trends since the late ~~1990’s,~~1990s, with more customers now opting for electronic forms of payment (e.g., credit cards and debit cards) for their in-store purchases over traditional paper-based forms of payment (e.g., cash and checks). Additionally, some merchants offer free cash back at the point-of-sale (“POS”) for customers that utilize debit cards for their purchases, thus providing an additional incentive for consumers to use these cards. Increasingly, frictionless payment options, like contactless, are also being used by consumers. According to the Nilson Report issued in December 2018, the percentage of cash transaction counts in the U.S. declined from approximately 31.9% of all payment transactions in 2012 to approximately 25.9% in 2017, with declines also seen in check usage as credit and debit card transactions increased. However, in terms of absolute dollar value, the volume of cash used in payment transactions remained relatively flat at $1.6 trillion from 2012 to 2017.The U.K. has followed a similar trend in absolute terms according to the Access to Cash study in the U.K., with cash making up over a third of all transactions and being the second most common payment method. In Australia, the value of banknotes in circulation increased by 2.5% over 2017, but at a somewhat slower rate than in past years. In their customer payments survey, the Reserve Bank of Australia published that 37% of all payments made in Australia are with cash. According to the 2018 Canadian Payment Methods and Trends study, cash was still the most used payment method at 29.8% of all transactions and while cash has been in decline in recent years, in 2017, the rate of decline showed signs of slowing. On a same-store basis, we have generally seen a single-digit percentage rate of decline in the number of cash withdrawal transactions conducted on our U.K.-based ATMs during the last 12-24 months while we have seen low single-digit rates of growth in our U.S.-based ATMs over the last twelve months, which is partly attributable to increased transactions from our surcharge-free Allpoint network. The continued growth in electronic payment methods, such as mobile phone payments, or contactless payments and card only self-service order and payment terminals could result in a reduced need for cash in the marketplace and ultimately, a decline in the usage of ATMs. New payment technology, such as Venmo, Zelle, Square Cash, Facebook Messenger Payments and virtual currencies such as Bitcoin, or other new payment method preferences by consumers could reduce the general population’s need or demand for cash and negatively impact our transaction volumes in the future. The

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proliferation of payment options and changes in consumer preferences and usage behavior could reduce the need for cash and have a material adverse impact on our operations and cash flows.

The ATM industry is highly competitive and such competition may increase, which may adversely affect our profit margins.

The ATM business is and can be expected to remain highly competitive. Our principal direct competition comes from independent ATM companies and financial institutions in all of the countries in which we operate. Our competitors could prevent us from obtaining or maintaining desirable locations for our ATMs, cause us to reduce the revenue generated by transactions at our ATMs, or cause us to pay higher merchant fees, thereby reducing our profits. In addition to our current competitors, new and less traditional competitors may enter the market vertically integrated competitors may offer comprehensive bundled product and service offerings or we may face additional competition associated with the creation, integration, and consolidation of competitors through transactions as well as the introduction of alternative payment mechanisms and emerging payment technologies. Increased competition could result in transaction fee reductions, reduced gross margins, and loss of market share. As a result, the failure to effectively adapt our organization, products, and services to the market could significantly reduce our offerings to gain market acceptance, could significantly reduce our revenue, increase our operating costs, or otherwise adversely impact our operations and cash flows.

Regulatory, legislative or self-regulatory/standard developments regarding privacy and data security matters could adversely affect our ability to conduct our business.

We, along with our partners and customers in the financial services area, are subject to a number of laws and ~~regulations. These laws, rules and~~ regulations, ~~address a range of issues~~ including, ~~data privacy and cyber security, and restrictions or technological requirements regarding the collection, use, storage, protection, retention or transfer of data.~~

~~In the U.S., the rules and regulations to which we (directly or contractually through our network relationships, banking partners or our other business partners) may be subject include~~among others, those promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, Computer Fraud and Abuse Act, the Gramm Leach Bliley Act and state cybersecurity, privacy, and breach notification laws, ~~as well as regulator enforcement positions~~the Australian Privacy Act, the Personal Information Protection and ~~expectations.~~

~~The European Union (“E.U.”) courts determined~~Electronic Documents Act in ~~late 2015 that~~Canada, the ~~Safe Harbor mechanism that facilitated data sharing between the~~ E.U. ~~and the U.S. was not in fact compliant with the E.U. data protection regulations, requiring a new robust mechanism, the Privacy Shield. The E.U. authorities agreed to new~~ General Data Protection ~~Regulations (“GDPR”) in 2016, which came into effect across~~Regulations. These laws, rules and regulations address a range of issues including data privacy and cybersecurity, and restrictions or technological requirements regarding the E.U. on May 25, 2018. The GDPR provides heightened rights for individuals and increased sanctions for non-compliance with regulations. GDPR provides the supervisory authority with the power to impose administrative fines of the greater of (a) €10 millioncollection, use, storage, protection, retention or 2% of global annual revenue from the prior year if it is determined that non-compliance was related to technical measures such as impact assessments, breach notifications and certifications; or (b) €20 million or 4% of global annual revenues in the case of non-compliance with key provisions of the GDPR including non-adherence to the core principles of processing personal data, infringement of the rights of data subjects and the transfer of personal data to third parties or international organizations that do not ensure an adequate level of data protection. Any imposition of fines resulting from our failure to comply with the GDPR requirements could materially and adversely affect our financial results. The GDPR also introduces measures that will make data processing and sharing between our European-based businesses and our other businesses more difficult. As required by the GDPR, we have appointed a Data Protection Officer to oversee and supervise our compliance with European data protection regulations.

data.

Such government regulation (together with applicable industry standards) may increase the costs of doing business. Federal, state, municipal and foreign governments and agencies have adopted and could in the future adopt, modify, apply or enforce laws, policies, regulations, and standards covering user privacy, data security, ~~cyber security,~~cybersecurity, technologies such as cookies that are used to collect, store and/or process data, marketing online, the use of data to inform marketing, the taxation of products and services, unfair and deceptive practices, and the collection (including the collection of information), use, processing, transfer, storage and/or disclosure of data associated with unique individual internet users. New regulation or legislative actions regarding data privacy and security could have a material adverse impact on our operations and cash flows.

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The passage of legislation banning or limiting the fees we receive for transactions conducted on our ATMs would severely impact our revenues and our operations.

We rely on transaction-based revenues in each of our markets and any regulatory fee limits that could be imposed on our transactions may have an adverse impact on our revenues and profits. If legislation were to be enacted in the future in any of our markets, and the amount we were able to charge consumers to use our ATMs was reduced, our revenues and related profitability would be negatively impacted. Furthermore, if such limits were set at levels that are below our current or future costs to operate our ATMs, it would have a material adverse impact on our ability to continue to operate under our current business model and adversely impact our revenues and cash flows. Despite the nationwide acceptance of surcharge fees at ATMs in the U.S. since their introduction in 1996, consumer activists have from time to time attempted to impose local bans or limits on surcharge fees. Even in the few instances where these efforts have passed the local governing body (such as with an ordinance adopted by the city of Santa Monica, California), U.S. federal courts have overturned these local laws on federal preemption grounds. Although Section 1044 of the Dodd-Frank Act contains a provision that will limit the application of federal preemption with respect to state laws that do not discriminate against national banks, federal preemption will not be affected by local municipal laws, where such proposed bans or limits often arise. Additionally, some U.S. federal officials have expressed concern in previous years that surcharge fees charged by banks and non-bank ATM operators are unfair to consumers.

Interchange fees, which comprise a substantial portion of our transaction revenues, may be lowered in some cases at the discretion of the various EFT networks through which our transactions are routed, or through potential regulatory changes, thus reducing our future revenues and operating profits.

Interchange fees, which represented ~~32.4%~~27.8% of our total ATM operating revenues for the year ended December 31, ~~2018,~~2019, are set by the various EFT networks and major interbank networks through which the transactions conducted on our ATMs are routed. These fees vary from one network to the next. During the year ended December 31, ~~2018, 20.8%~~2019, 16.6%, ~~11.1%~~10.8%, and 0.4% of our total ATM operating revenues were derived from interchange fees in Europe & Africa, North America, and Australia & New Zealand, respectively. ~~These~~Some of these fees are subject to pricing changes that we may be unable to offset through lower payments to merchants. Interchange revenues in the U.K. accounted for ~~19.2%~~14.7% of our consolidated ATM operating revenues. In the U.K., the

significant majority of the interchange revenues we earn are based on rates set by LINK, the major interbank network in that market. ~~The remainder of reported~~

Revenues from our UK based ATMs are highly dependent on interchange ~~revenue reflects transaction-based revenues where we have contractually agreed~~and therefore susceptible to the rate with the associated network or financial institution. Accordingly, if some of the networks through which our ATM transactions are routed were to reduce the interchange rates paid to us or increase their transaction fees charged to us for routing transactions across their network, our future transaction revenues could decline.

~~Our U.K.-based revenues are significantly impacted by~~changes in interchange rates, with the majority of our UK interchange revenues ~~in that market~~ being ~~earned through~~determined by the rates set by the LINK network. In previous years, LINK has set interchange rates for its participants using a cost-based methodology that incorporates ATM service costs, generally from two years back (i.e., operating costs from 2016 were considered for determining the 2018 interchange rate), and as a result, the interchange rate varied year-to-year based on the output of the cost-based study.scheme. In addition to LINK transactions, ~~certain card issuers in the U.K.~~a small number of UK financial institutions have issued cards that are not affiliated with the LINK network, ~~and~~but instead ~~carry the~~route over a Visa or MasterCard ~~network brands.~~network. Transactions conducted on our ATMs from these cards ~~which~~ currently represent less than 3% of our annual withdrawal transactions in the U.K.~~, receive interchange fees 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.~~LINK rates. Accordingly, if any major financial institution in the U.K. decided to leave the LINK network in favor of Visa, MasterCard, or another network, and we elected to continue to accept the transactions of their cardholders, such a move could impact the interchange revenues that we currently receive from the related withdrawal transactions conducted on our ATMs by these cardholders in that market. During 2017, some of the major financial institutions that ~~participate in~~provide the majority of LINK volumes expressed concern about the LINK interchange rate and commenced efforts to significantly lower the interchange rate. As a result, a group of members of LINK (the “Working Group”) ~~worked to develop~~developed a new interchange rate setting mechanism and in October 2017, it was decided that an independent ~~board of LINK (“LINK~~“LINK Board”) would ~~recommend~~set interchange rates going forward. On January 31, 2018 the LINK Board issued an update and determined that interchange rates would decrease by 5% from 2017 levels, effective July 1, 2018 and announced the intention to further reduce the interchange rate by three further annual 5% reductions. However, on July 16, 2018, LINK announced that the third interchange rate decrease

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was ~~cancelled~~canceled and the fourth rate decrease was suspended, pending further ~~review in 2019.~~review. The first 5% rate reduction occurred on July 1, 2018, and ~~it adversely impacted our U.K. profits by approximately $9 million, when taken together with other rate reductions in 2018. The~~the second scheduled 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 $18 million in~~ 2019. Should there be a significant change in the LINK scheme or its membership, our U.K. interchange revenues and profits could be further adversely impacted.

In past years, certain networks have reduced the net interchange rates paid to ATM deployers for ATM transactions in the U.S. routed across their debit networks through a combination of reducing the transaction rates charged to financial institutions and higher ~~per transaction~~per-transaction fees charged by the networks to ATM operators. Accordingly, if some of the networks through which our ATM transactions are routed were to reduce the interchange rates paid to us or increase their transaction fees charged to us for routing transactions across their network, our future transaction revenues could decline. For example, Visa ~~recently~~ announced a new acquirer fee for non-monetary transactions in the U.S. that ~~will take~~took effect on April 1, 2019. In addition to the impact of net interchange rate decreases, we have seen 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 to us.

In Canada, the vast majority of transactions route through the Interac network which sets the interchange revenue rates for its network.

In Canada, domestic transactions represent more than 90% of total transaction volume and these route through the Interac network, which sets the interchange revenue rates for the transactions, with the remaining, non-domestic transactions routing primarily to Visa and Mastercard. As a result, if Interac were to reduce the interchange revenue rates or increase their transaction fees for routing transactions across their network, our future transaction revenues could decline.

Future changes in interchange rates, some of which we have minimal or no control over, could have a material adverse impact on our operations and cash flows.

We operate in a changing and unpredictable regulatory environment, which may harm our business. If we are subject to new regulations or legislation regarding the operation of our ATMs, we could be required to make substantial expenditures to comply with that regulation or legislation, which may reduce our net income and our profit margins.

With its initial roots in the banking industry, the U.S. ATM industry is regulated by the rules and regulations of the federal Electronic Funds Transfer Act, which establishes the rights, liabilities, and responsibilities of participants in EFT systems. The vast majority of states have few, if any, licensing requirements. However, legislation related to the U.S. ATM industry is periodically proposed at the state and local level. In past years, certain members of the U.S. Congress called for a re-examination of fees that are charged for an ATM transaction, although no legislation was passed relative to these matters. As a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the Consumer Financial Protection Bureau was created, and it is possible that this governmental agency could enact new or modify existing regulations that could have a direct or indirect impact on our business. For additional information related to this topic, see the risk factor entitled The passage of legislation banning or limiting the fees we receive for transactions conducted on our ATMs would severely impact our revenues and our operations below.

The Americans with Disabilities Act (“ADA”), through implementing regulations, requires that public accommodations be accessible to and independently usable by individuals with disabilities, including visually-impaired or wheel-chair bound persons. The U.S. Department of Justice issued accessibility regulations under the ADA that became effective in March 2012, which provided specific requirements for ATMs. Failure to meet these requirements, and other similar requirements under various states’ laws, could adversely impact our operations and revenues, including through costs incurred in lawsuits and payment of damages,

fines or penalties. The Commonwealth of Massachusetts and the National Federation of the Blind (the “NFB”) had pursued a lawsuit against the Company alleging ~~noncompliance~~non-compliance with the ADA, its implementing regulations, and court orders. We settled this lawsuit by, among other things, agreeing to certain procedures and standards for voice guidance on ATMs. While we have completed implementation of the operational elements of our settlement agreement, any failure to meet the remaining reporting requirements of our settlement agreement in this matter could adversely impact our operations and revenues, including through the incurrence of damages.

In the U.K., the ATM industry historically has been largely self-regulating. Most ATMs in the U.K. are part of the LINK network and must operate under the network rules set forth by LINK, which operates under the oversight of the Bank of England and its regulatory ~~capacity. In March 2013, the U.K. Treasury department issued a formal recommendation to further regulate the U.K. payments industry, including LINK, the nation’s primary ATM scheme. In~~capacity and since October 2013, the ~~U.K. government responded by establishing the new~~ Payment Systems Regulator (“PSR”) ~~to oversee~~oversees any payment system operating in the U.K. and its participants. The ~~new~~ PSR ~~became active~~is actively engaged in ~~2015. The PSR~~

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~~commissioned~~ a review of the LINK ~~which has resulted in several outcomes, including a separation of~~scheme and the ~~processing component of LINK which required us to separately enter into new agreements for certain operational services.~~scheme’s direct commissioning and interchange operating procedures. See the risk factor entitled Interchange fees, which comprise a substantial portion of our transaction revenues, may be lowered in some cases at the discretion of the various EFT networks through which our transactions are routed, or through potential regulatory changes, thus reducing our future revenues above.

In March, 2018, the E.U. began a legislative process for amending certain existing legislation applying to cross border payment practices, which includes a proposal by the European Commission for new regulations on dynamic currency conversion transactions.

The amended 2009 Cross Border Payments Regulation ~~is being amended to require~~requires enhanced consumer disclosure ~~and increased consumer choice in~~at point of transaction for dynamic currency conversion transactions. The new regulation, which is expected to be introduced over 2020 and 2021 could cause us to suffer losses or other adverse changes in our business that would reduce our net income.

We are also subject to various regulations in other jurisdictions that we operate in, including Germany, Spain, Ireland, Mexico, Canada, Australia, New Zealand and South Africa. Due to the numerous regulations in the jurisdictions in which we operate, there isare risks and substantial ~~risk to~~costs incurred in ensuring consistent compliance with the existing regulatory requirements in those jurisdictions. To the extent we are not successful in complying with the new or existing regulations, non-compliance may have an impact on our ability to continue operating in such jurisdictions or adversely impact our profits. New legislation proposed in any of the jurisdictions in which we operate, or adverse changes in the laws that we are subject to, may materially affect our business through the requirement of additional expenditures to comply with that legislation or other direct or indirect impacts on our business. If regulatory legislation is passed in any of the jurisdictions in which we operate, we could be required to incur substantial expenditures or suffer adverse changes in our business that would reduce our net income. In addition, new product and service offerings such as mobile ATM access and ~~deposit taking~~deposit-taking ATMs are often subject to additional regulations which may have an impact on our ability to offer such products. We may not be able to comply with all such regulations for new product and services offerings or may not be able to do so profitability.

~~The broad introduction of free-to-use ATMs in Australia has and may continue to adversely impact our revenues and profits.~~

In September 2017, Australia’s four largest banks, the Commonwealth Bank of Australia (“CBA”), Australia and New Zealand Banking Group Limited (“ANZ”), Westpac Banking Corporation (“Westpac”), and National Australia Bank Limited (“NAB”), each independently announced decisions to remove all direct charges applied to domestic transactions completed at their respective ATM networks effectively creating a free-to-use network of ATM terminals that did not exist previously. This unexpected market shift appears to have been instigated by a decision and announcement by CBA to remove direct charges to all users of its ATMs, regardless of whether or not the users are customers of the bank. Shortly thereafter, ANZ, Westpac, and NAB followed with announcements and actions removing direct charges on their ATM networks for all users of their ATMs.

Australia has historically been a direct charge market where cardholders pay a fee (the “direct charge”) to ATM operators for each transaction, unless the ATM where the transaction is completed is part of the cardholder’s issuing bank ATM network. There is currently no broad interchange arrangement in Australia between card issuers and ATM operators to compensate ATM operators for the cost of providing a service to cardholders in the absence of a direct charge levied on the cardholder directly. In 2018, 77% of our revenues in Australia were sourced from direct charge fees paid by cardholders. As a result, this introduction of free-to-use ATMs in Australia has and may continue to adversely impact our revenues and profits.

~~In September 2017, we determined that these developments were to be an indicator of impairment of our Australia & New Zealand reporting unit and related long-lived assets. As further discussed in~~ ~~Item 8. Financial Statements and Supplementary Data, Note 1. Basis of Presentation and Summary of Significant Accounting – (l) Intangible Assets Other Than Goodwill and (m) Goodwill, we recorded an impairment of certain assets in our Australia & New Zealand reporting unit as of September 30, 2017.~~

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 free-to-use network in Australia that did not previously exist.

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~~Security~~Internal control failures, security breaches, including the occurrence of a cyber-incident or a deficiency in our cybersecurity,could harm our business by compromising Company, merchant or vendor data or cardholder information and disrupting our transaction processing services, thus damaging our relationships with our merchant customers, business partners, and generally exposing us to liability.

As part of our transaction processing services, we electronically process and transmit cardholder information. We and our vendors have been, and will continue to be, subjected to cyber-attacks or internal control failures, including accidental or intentional computer or network issues (such as unauthorized parties gaining access to our information technology systems, phishing attacks, viruses, malware or ransomware installation, server malfunction, software or hardware failures, impairment of data integrity, loss of data or other computer assets, adware, or other similar issues), none of which to date have resulted in any material disruption, interruption, or loss. Our vulnerability to attack and our vendors’ vulnerability to attack exists in relation to known threats, against which we work to implement and maintain what we consider to be adequate security controls, as well as other threats, against which we cannot defend because they are unknown. Consequently, the security measures we deploy and our internal processes and procedures are not perfect or impenetrable, and, despite our investment in and maintenance of security controls, we may be unable to anticipate or prevent all unauthorized access attempts made on our systems.

A vulnerability in the cybersecurity of our systems or one or more of our vendors’ systems (which include, among other things, cloud based networks and services outside of the control of the Company) could impair, compromise or shut down one or more of our computing systems, transaction processing systems, or our IT network and infrastructure, which could harm our business or result in harm to our customers or our business partners and result in negative publicity or media coverage. Furthermore, companies that process and transmit cardholder information have been specifically and increasingly targeted in recent years by sophisticated and persistent actors including hacktivists, organized criminal groups, and nation states in an effort to obtain information and utilize it for fraudulent transactions or other purposes. It is also possible that a cyber-attack or information security breach could occur and persist for an extended period of time without detection. We expect that any investigation of a cyber-attack would be inherently unpredictable and that it would take time before the completion of any investigation and before there is availability of full and reliable information. During such time we may not necessarily know the extent of the harm or how best to

remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, all or any of which would further increase the costs and consequences of a cyber-attack.

The technical and procedural controls we, our vendors and our other partners use to provide security for storage, processing and transmission of confidential customer and other information may not be effective to protect against control failures, data security breaches or other cyber incidents. The risk of unauthorized circumvention of our security measures has been heightened by advances in computer capabilities and the increasing sophistication of hackers. Unauthorized access to our computer systems, or those of our third-party service providers, could result in the theft or publication of the information or the deletion or modification of sensitive records, and could cause interruptions in our operations. Any inability to prevent security breaches could damage our relationships with our merchant and financial institution customers, cause a decrease in transactions by individual cardholders, expose us to liability including claims from merchants, financial institutions, and cardholders, and subject us to network fines.

Further, we could be forced to expend significant resources in response to a security breach, including repairing system damage and increasing cybersecurity protection costs by deploying additional personnel, each of which could divert the attention of our management and key personnel away from our business operations. These claims also could result in protracted and costly litigation. If unsuccessful in defending that litigation, we might be forced to pay damages and/or change our business practices.

While many of our agreements with partners and third-party vendors contain indemnification provisions and we maintain insurance intended to cover some of these risks, such measures may not be sufficient to cover all of our losses from any future breaches of our systems.

We have a history of making acquisitions and investments, which expose us to additional risk associated with the integration of ~~the~~new information ~~systems.~~systems, processes, and procedures. We may not adequately identify weaknesses in an acquired entity’s information systems either before or after an acquisition, which could affect the value we are able to derive from the acquisition, expose

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us to unexpected liabilities or make our own systems more vulnerable to a cyber-attack. We may also not be able to integrate the systems of the businesses we acquire in a timely manner which could further increase these risks until such integration takes place.

As a global company, the cross border movement of data increases our exposure to cybersecurity threats. This cross border data movement must be managed in accordance with an ever changing compliance landscape and the development of cybersecurity guidance and best practice and while we have and will continue to invest in the protection of our systems and the maintenance of what we believe to be adequate security controls over individually identifiable customer, employee and vendor data provided to us, there can be no assurance that we will not suffer material losses relating to cyber-attacks or other security breaches involving our information systems in the future. In addition, we could be impacted by existing and proposed laws and regulations, as well as government policies and practices related to cybersecurity, privacy, and data protection across the various jurisdictions in which we operate which may overlap and potentially conflict with one another. An actual security breach or cyber-incident could have a material adverse impact on our operations and cash flows and costs to remediate any damages to our information technology systems suffered as a result of a cyber-attack could be significantly over and above any obligations arising from any penalties imposed by any regulatory or supervisory authority including in connection with General Data Protection Regulations.

The broad introduction of free-to-use ATMs in Australia has and may continue to adversely impact our revenues and profits.

Australia has historically been a direct charge market where cardholders pay a fee (the “direct charge”) to ATM operators for each transaction, unless the ATM where the transaction is completed is part of the cardholder’s issuing bank ATM network. There continues to be no broad interchange arrangement in Australia between card issuers and ATM operators to compensate ATM operators for the cost of providing a service to cardholders in the absence of a direct charge levied on the cardholder directly. In 2019, approximately 78% of our revenues in Australia were sourced from direct charge fees paid by cardholders. As a result, this introduction of free-to-use ATMs in Australia has and may continue to adversely impact our revenues and profits.

In September 2017, we determined that these developments were to be an indicator of impairment of our Australia & New Zealand reporting unit and related long-lived assets. As further discussed in Item 8. Financial Statements and Supplementary Data, Note 1. Basis of Presentation and Summary of Significant Accounting - (l) Goodwill, we recorded an impairment of certain assets in our Australia & New Zealand reporting unit in September 2017.

Computer viruses or unauthorized software (malware) could harm our business by disrupting or disabling our systems, including transaction processing services, causing ~~noncompliance~~non-compliance with network rules, damaging our relationships with our merchant and financial institution customers, and damaging our reputation causing a decrease in transactions by individual cardholders.

We routinely face cyber and data security threats through computer viruses, malware, attachments to emails, persons inside our organization or persons with access to systems inside our organization and other significant disruptions of our IT networks and related systems (“System Threats”). Any one or more System Threats could result in the infiltration of our systems, as well as those of our customers and partners, and disrupt our delivery of services, cause delays or loss of data or public releases of confidential data or make our applications unavailable, all of which could have a material adverse effect on our revenues and our operations and cash flows. Although we utilize several preventative and detective security controls in our network, we have from time to time experienced System Threats to our data and systems, including but not limited to computer viruses, unauthorized parties gaining access to our information technology systems and similar incidents, none of which to date have resulted in any material disruption, interruption or loss. Our preventative and detective security controls at times have been, and may be at times in the future, ineffective in preventing System Threats, and material consequences arising from the occurrence of any such event could damage our relationships with our customers, cause a decrease in transactions by individual cardholders, cause our reputation to be damaged, require us to make significant expenditures to repair or replace equipment, or cause our non-compliance with applicable network rules and regulations.

~~Potential new currency designs~~

Currency design changes may require modifications to our ATMs that could impact our cash flows.

In American Council of the Blind, et. al., v. Timothy F. Geithner, Secretary of the Treasury (Case #1:02-cv-00864) in the U.S. District Court for the District of Columbia (the “Court”) an order was entered that found that U.S. currencies (as currently designed) violated the Rehabilitation Act, a law that prohibits discrimination in government programs on the basis of disability, as the paper currencies issued by the U.S. are identical in size and color, regardless of denomination. As a consequence of this ruling, the U.S. Treasury stated in its semi-annual status report filed with the Court in September 2012, that the Bureau of Engraving and Printing (“BEP”) was making progress towards implementing the Secretary’s decision to provide meaningful access to paper currency by: “(i) adding a raised tactile feature ("RTF") to each Federal Reserve note that the BEP may lawfully redesign, (ii) continuing the BEP’s program of adding large high-contrast numerals and different colors to each denomination that it may lawfully redesign, and (iii) implementing a supplemental currency reader distribution program for blind and other visually impaired U.S. citizens and legal residents.” Of these three steps only the first materially affects the ATM industry. The BEP continues to research the ~~raised tactile feature~~RTF and is engaged in testing samples in conjunction with the Banknote Equipment Manufactures ~~program; however, previous comments from the U.S. Treasury suggest that raised tactile features on currency are not expected to be in circulation prior to 2020.~~program. Until a selection is made and disclosed by the BEP, the impact, if any, a raised tactile feature will have on the ATM industry, remains

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unknown. It is possible that such a change or any redesign of currencies could require us to incur additional costs, which could be substantial, to modify our ATMs in order to store and dispense notes with raised or other tactile features.

Additionally, polymer notes have been introduced by a number of ~~counties~~countries, including Canada, the U.K. and Australia. Polymer notes were first introduced by the Bank of England in 2016 and ~~will be further circulated through 2020.~~are now used, almost exclusively, in our ATMs in the U.K. The introduction of these new currency designs has required upgrades to software and physical ATM components on our ~~ATMs. Upgrades may continue to result in incremental downtime~~ATMs, specifically, software and ~~incremental capital investments~~hardware modifications were completed for the ~~affected ATMs.~~polymer £10s and some minor additional hardware modifications to ATM components are required for polymer £20s. To date, we have not experienced any material adverse financial or operational impact as a result of the new requirements to handle these new notes.

The Reserve Bank of Australia (or “RBA”) has ~~begun issuing~~also issued redesigned banknotes beginning with the $5, $10 and $50 Australian dollar ~~banknotes. The majority~~banknotes that are currently in circulation . Over 90% of the required polymer upgrades in Australia have been completed and the ~~remainder~~remaining upgrades are ~~scheduled to be completed by the end~~being managed on a case-by-case basis as part of ~~2019.~~contract extensions or renewals. We expect that the RBA will continue issuing redesigned banknotes into introduce additional ~~denominations~~security features in subsequent years. The RBA has been progressively releasing new polymer banknotes with a new design and anti-counterfeit security features. The majority of denominations have been released with only the $100 denomination remaining, which is expected to be issued in late 2020. The redesigned banknotes include a raised tactile feature to help the blind and visually impaired community distinguish between different denominations of banknotes and a top-to-bottom clear window in which the banknote is transparent. Any required upgrades or full replacement of our ATMs could require us to incur additional cost which could be substantial and result in ATM downtime which could have a material adverse impact on our operations and cash flows.

Risks associated with our business.

We depend on ATM and financial services transaction fees for substantially all of our revenues, and our revenues would, and profits could, be reduced by a decline in the usage of our ATMs or a decline in the number of ATMs that we operate, whether as a result of changes in consumer spending preferences, global economic conditions or otherwise.

Transaction fees charged to cardholders and their financial institutions for transactions processed on our ATMs and multi-function financial services kiosks, including surcharge and interchange transaction fees, have historically accounted for most of our revenues. We expect that transaction fees, including fees we receive through our bank-branding and surcharge-free network offerings, will continue to account for the substantial majority of our revenues for the foreseeable future. Consequently, our future operating results will depend on many factors, including: (i) the market acceptance of our services in our target markets, (ii) the level of transaction fees we receive, (iii) our ability to install, acquire, operate, and retain ATMs, (iv) usage of our ATMs by cardholders and any changes in payment preferences they may have, and (v) our ability to continue to expand our surcharge-free and other automated consumer financial services offerings. If alternative technologies to our services are successfully developed and implemented or there is a significant shift in consumer preferences for other alternative payment methods, we may experience a decline in the usage of our ATMs. Surcharge rates, which are largely market-driven and are often negotiated between us and our merchant partners, could be reduced over time. Further, growth in surcharge-free ATM networks and widespread consumer bias toward these networks could adversely affect our revenues, even though we maintain our own surcharge-free offerings. Many of our ATMs are utilized by consumers that frequent the retail establishments in which our ATMs are located, including convenience stores, gas stations, malls, grocery stores, drug stores, airports, train stations, and other large retailers. If there is a significant slowdown in consumer spending or a change in consumer payment preferences, the number of consumers that frequent the retail establishments in which we operate our ATMs may decline and the number of transactions conducted on those ATMs and our network, and the corresponding transaction fees we earn, may also decline. Additionally, should banks increase the fees they charge to their customers when using an ATM outside of their network (i.e. out of network or foreign bank fees), this would effectively make transactions at our ATM more expensive to consumers and could adversely impact our transaction volumes and revenues.

~~Alternatively, should~~

Should banks or other ATM operators decrease or eliminate the fees they charge to users of their ATMs in any of our markets (as they did in Australia in 2017), or otherwise offer free access to their networks, such action would make transactions at our ATM comparatively more expensive to consumers and could adversely impact our transaction volumes and revenues. A decline in usage of our ATMs by cardholders, in the levels of fees received by us in connection with this usage, or in the number of ATMs that we operate, would have a negative impact on our revenues and cash flows and would limit our future growth potential.

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We derive a substantial portion of our revenue from ATMs placed with a small number of merchants. The expiration, termination or renegotiation of any of these contracts with our top merchants, or if one or more of our top merchants were to cease doing business with us, or substantially reduce its dealings with us, could cause our revenues to decline significantly and our business, financial condition and results of operations could be adversely impacted.

For the year endedDecember 31, ~~2018,~~2019, our contracts with our top five merchant customers (Co-op Food (in the U.K.), Couche Tard, CVS, Speedway, and Walgreens) accounted for approximately ~~24%~~22% of our total revenues, the largest of which accounted for approximately 6% of our total revenues. Because a significant percentage of our future revenues and operating income depends upon the successful continuation of our relationship with our top merchant customers, the loss of any of our largest merchants, such as the loss of 7-Eleven in 2017, a decision by any one of them to reduce the number of our ATMs placed in their locations, or a decision to sell or close their locations could result in a decline in our revenues or otherwise adversely impact our business operations. To the extent there is consolidation or contraction within our primary retailer partners, and as a part of that consolidation or contraction, the retailers decide to reduce their store footprint, such an event could materially impact our revenues and profits. Furthermore, if their financial conditions were to deteriorate in the future, and as a result, one or more of these merchants was required to close a significant number of their store locations, our revenues would be significantly impacted. Additionally, these merchants may elect not to renew their contracts when they expire. As of December 31, ~~2018,~~2019, the contracts we have with our five largest merchant customers had a weighted average remaining life of approximately ~~2.7~~3.5 years.

Even if our major contracts are extended or renewed, the renewal terms may be less favorable to us than the current contracts. If any of our largest merchants enters bankruptcy proceedings and rejects its contract with us, fails to renew its contract upon expiration, or if the renewal terms with any of them are less favorable to us than under our current contracts, it could result in a decline in our revenues and profits and have a material adverse impact on our operations and cash flows.

Deterioration in global credit markets, as well as changes in legislative and regulatory requirements, could have a negative impact on financial institutions including those with whom we conduct business and may seek to conduct business.

We have a significant number of customer and vendor relationships with financial institutions in all of our key markets, including relationships in which those financial institutions pay us for the right to place their brands on our ATMs. Additionally, we rely on a small number of financial institution partners to provide us with the cash that we maintain in our Company-owned ATMs and some of our merchant-owned ATMs. Further, we rely on a small number of financial institution partners to provide us with liquidity under our revolving credit facility. Volatility in the global credit markets may have a negative impact on those financial institutions and our relationships with them. In particular, if the liquidity positions of the financial institutions with which we conduct business deteriorate significantly, these institutions may be unable to perform under their existing agreements with us. If these defaults were to occur, we may not be successful in our efforts to identify new bank-branding partners, ~~and~~ vault cash providers or lenders, and the underlying economics of any new arrangements may not be consistent with our current arrangements. Furthermore, if our existing bank-branding partners or vault cash providers are acquired by other institutions with assistance from the Federal Deposit Insurance Corporation (“FDIC”), or placed into receivership by the FDIC, it is possible that our agreements may be rejected in part or in their entirety.

We rely on third-parties in the various regions where we operate to provide us with the cash we require to operate many of our ATMs. If these third-parties were unable or unwilling to provide us with the necessary cash to operate our ATMs, we would need to ~~locate~~identify alternative sources of cash to operate our ATMs or we would not be able to operate our business.

~~In North America,~~

We primarily rely on several financial institutions in the regions where we ~~rely primarily on Bank of America, U.S. Bancorp, CIBC and Capital One~~operate to provide us with the vault cash that we use in ~~approximately 41,000 of~~ our ATMs where cash is not provided by the ~~merchant. In~~merchant, which includes, approximately 41,000 in North America, approximately 19,000 in Europe &and Africa, ~~we rely primarily on RBS, HSBC, Barclays, Absa Bank,~~ and ~~Capitec Bank to provide us with the vault cash that we use~~approximately 4,000 ATMs in ~~approximately 18,000 of our ATMs. In~~ Australia and New ~~Zealand, we rely primarily on ANZ and NAB to provide us with the vault cash that we use in approximately 4,000 of our ATMs.~~ Zealand.For the quarter ended December 31, ~~2018,~~2019, we had an average outstanding vault cash balance of approximately ~~$1.7~~$1.9 billion held in our North America ATMs, approximately ~~$1.2~~$1.1 billion in our ATMs in Europe and Africa and approximately $0.2 billion in our ATMs in Australia and New Zealand.

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Our existing vault cash rental agreements expire at various times through ~~May 2022.~~June 2023. However, each provider has the right to demand the return of all or any portion of its cash at any time upon the occurrence of certain events. Other key terms of our agreements include the requirement that the vault cash providers provide written notice of their intent not to renew. Such notice provisions typically require a minimum of 180 to 360 days’ notice prior to the actual termination date. If such notice is not received, then the contracts will typically automatically renew for an additional one-year period.

If our vault cash providers were to demand return of their cash or terminate their arrangements with us and remove their cash from our ATMs, or if they fail to provide us with cash as and when we need it for our operations, our ability to operate our ATMs would be jeopardized, and we would need to locate alternative sources of vault cash or potentially suffer significant downtime of our ATMs. In the event this was to happen, the terms and conditions of the new or renewed agreements could potentially be less favorable to us, which would negatively impact our results of operations. Furthermore, restrictions on access to cash to fill our ATMs could severely restrict our ability to keep our ATMs operating, and could subject us to performance penalties under our contracts with our customers. A significant reduction in access to the necessary cash to operate our ATMs could have a material adverse impact on our operations and cash flows.

We rely on third-party EFT network providers, transaction processors, bank sponsors, armored courier providers, and maintenance providers to provide services to our ATMs. If some of these providers that service a significant number of our ATMs fail or otherwise cease, consolidate, or no longer agree to provide their services, we could suffer a temporary loss of transaction revenues, incur significant costs or suffer the permanent loss of any contract with a merchant or financial institution affected by such disruption in service.

We rely on EFT network providers and have agreements with various transaction processors, armored courier providers, and maintenance providers. These service providers enable us to provide card authorization, data capture, settlement, cash management and delivery, and maintenance services to our ATMs. Typically, these agreements are for periods of two or three years each. If we are unable to secure the renewal or replacement of any expiring vendor contracts, or a key vendor fails or otherwise ceases to provide the services for which we have contracted and disruption of service to our ATMs occurs, our relationship with those merchants and financial institutions affected by the disrupted ATM service could suffer.

While we have more than one provider for each of the critical services that we rely on third-parties to perform, certain of these providers currently provide services to or for a significant number of our ATMs. Although we believe we would be able to transition these services to alternative service providers, this could be a time-consuming and costly process. In the event one or more of such service providers was unable to deliver services to us, we could suffer a significant disruption in our business, which

could result in a material adverse impact to our financial results. Furthermore, any disruptions in service in any of our markets, whether caused by us or by third-party providers, may continue to result in a loss of revenues under certain of our contractual arrangements that contain minimum service-level requirements and could result in a material adverse impact on our operations and cash flows.

~~If we,~~

Our operational failures or those of our transaction processors, ~~our~~ EFT networks or other service providers ~~experience system failures, the~~could delay or interrupt our products and services ~~we provide could be delayed or interrupted, which would~~and harm our ~~business.~~

business and our relationships with our merchant and financial institution customers.

Our ability to provide reliable service largely depends on the efficient and uninterrupted operations of our EFT transaction processing platforms, third-party transaction processors, telecommunications network systems, and other service ~~providers.~~providers as well as availability of hardware and replacement parts from vendors. Accordingly, any ~~significant interruptions~~damage, destruction, or third-party actions that interrupt our services would severely harm our business and reputation and result in a loss of revenues and ~~profits.~~profits and could cause us to incur substantial additional expenses. Additionally, if any interruption is caused by us, especially in those situations in which we serve as the primary transaction processor, such interruption could result in the loss of the affected merchants and financial institutions, or damage our relationships with them. Prolonged interruption of our services or network that extends for more than several hours (i.e., where our backup systems are not able to recover) would result in data loss and/or a reduction in revenues as our ATMs would be unable to process transactions. Our systems and operations and those of our transaction processors and our EFT network and other service providers could be exposed to damage or interruption from fire, floods, natural disaster, unlawful acts, terrorist attacks, power loss, telecommunications failure, unauthorized entry, cyber-attack, public health emergencies and computer viruses, among other things. We cannot be certain that any measures we and our service providers have taken to prevent system failures will be successful or that we will not experience service interruptions. Should a significant system failure occur, it could have a material adverse impact on our operations and cash flows.

In addition, a significant interruption of service could have a negative impact on our reputation and could cause our present and potential merchant and financial institution customers to choose alternative service providers, as well as subject us to fines or penalties related to contractual service agreements and ultimately cause a material adverse impact on our operations and cash flows.

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

For the quarter ended December 31, 2019, our average outstanding vault cash balance was $3.2 billion in our ATMs. Any loss of vault cash from our ATMs is generally our responsibility. We typically require that our service providers, who either transport the vault cash or otherwise have access to the ATM safe, maintain adequate insurance coverage in the event cash losses occur as a result of theft, misconduct, or negligence on the part of such providers. Cash losses at the ATM occur in a variety of ways, such as natural disasters (hurricanes, flooding, tornadoes, etc.), fires, vandalism, and physical removal of the entire ATM, defeating the interior safe or by compromising the ATM’s technology components. Because our ATMs are often installed at retail sites, they face exposure to attempts of theft and vandalism. Thefts of vault cash may be the result of an individual acting alone or as a part of a crime group. We have experienced theft of vault cash from our ATMs across the geographic regions in which we operate and have at times temporarily removed ATMs from service to enhance security features or permanently removed ATMs due to security concerns. While we maintain insurance policies to cover significant losses that may occur that are not covered by the insurance policies maintained by our service providers, such insurance coverage is subject to deductibles, exclusions, and limitations that may leave us bearing some or all of those losses. Significant vault cash losses could result in a material adverse impact on our operations and cash flows.

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theft and other losses could negatively impact our operating results by causing higher deductible payments and increased insurance premiums. Certain ATM types have recently been susceptible to coordinated ATM attacks that generally involves a logical or physical compromise of the ATM, which causes the ATM to dispense cash without proper authorization and can be controlled remotely in certain types of these attacks. While we maintain a controls program across many fronts to prevent and quickly detect unauthorized ATM access and theft attempts, there can be no assurance that a significant or successful jackpotting attack attempt could occur on our portfolio. Additionally, in recent periods, we have seen elevated attack attempts and vault cash losses in our U.K. business, in particular. Should these losses continue at an elevated or increasing rate, it could adversely impact our results and impact our ability to obtain insurance for the vault cash used on our ATMs. Also, damage sustained to our merchant customers’ store locations in connection with any ATM-related thefts, if extensive and frequent enough in nature, could negatively impact our relationships with those merchants and impair our ability to deploy ATMs in those existing or new locations of those merchants. Certain merchants have requested, and could request in the future, that we remove ATMs from store locations that have suffered damage as a result of ATM-related thefts, thus negatively impacting our financial results. Finally, we have in the past, and may in the future, voluntarily remove vault cash from certain ATMs on a temporary or permanent basis to mitigate further losses arising from theft or vandalism. Depending on the magnitude and duration of any cash removal, our revenues and profits could be materially and adversely affected.

Our armored transport business exposes us to additional risks beyond those currently experienced by us in the ownership and operation of ATMs.

Our armored courier operation in the U.K. delivers cash to and collects residual cash from our ATMs in that market. As of December 31, ~~2018,~~2019, we were providing armored courier services to a majority of our ATMs in that market and we currently intend to further expand that operation to service additional ATMs. The armored transport business exposes us to significant risks, including the potential for cash-in-transit losses, employee theft, as well as claims for personal injury, wrongful death, worker’s compensation, punitive damages, and general liability. There can be no assurance that we will avoid significant future claims or adverse publicity related thereto. Furthermore, there can be no assurance that our insurance coverage will be adequate to cover potential liabilities or that insurance coverage will remain available at costs that are acceptable to us. The availability of quality and reliable insurance coverage is an important factor in our ability to successfully operate this aspect of our operations. A loss claim for which insurance coverage is denied or that is in excess of our insurance coverage could have a material adverse effect on our business, financial condition and results of operations and cash flows.

~~Operational failures could harm our business and our relationships with our merchant and financial institution customers.~~

An operational failure could be caused by our actions, such as a failure of our EFT transaction processing facilities, or the actions of third-parties, either of which, would harm our business and damage our relationships with our merchant and financial institution customers. Damage, destruction, or third-party actions that interrupt our services would also cause us to incur substantial additional expense to repair or replace damaged equipment and could damage our relationship with our customers. We have installed back-up systems and procedures to prevent or react to such disruptions. However, a prolonged interruption of our services or network that extends for more than several hours (i.e., where our backup systems are not able to recover) would result in data loss or a reduction in revenues as our ATMs would be unable to process transactions. In addition, a significant interruption of service could have a negative impact on our reputation and could cause our present and potential merchant and financial institution customers to choose alternative service providers, as well as subject us to fines or penalties related to contractual service agreements and ultimately cause a material adverse impact on our operations and cash flows.

If we fail to adapt our products and services to changes in technology or in the marketplace, or if our ongoing efforts to upgrade our technology are not successful, we could lose customers or have difficulty attracting new customers, which would adversely impact our revenues and our operations.

The markets for our products and services are characterized by constant technological changes, frequent introductions of new products and services and evolving industry standards. Due to a variety of factors, including but not limited to security features, compatibility between systems and software and hardware components, consumer preferences, industry standards, demands of our financial institution and retail customers, and other factors, we regularly update the technology components, including software, on our ATMs. These technology upgrade efforts, in some cases, may result in downtime to our ATMs, and as a result, loss of transactions and revenues. Additionally, our ability to enhance our current products and services and to develop and introduce innovative products and services that address the increasingly sophisticated needs of our customers will significantly affect our future success. Our ability to take advantage of opportunities in the market may require us to invest considerable resources adapting our organization and capabilities to support development of products and systems that can support new services or be integrated with new technologies and incur other expenses in advance of our ability to generate revenue from these products and services. These developmental efforts may require substantial capital investment, divert resources from other potential investments in our businesses, management time and attention from other matters, and these efforts may not lead to the development of viable new products or services on a timely or cost effective basis. We may not be successful in developing, marketing or selling new products and services that meet these changing demands. In addition, we may experience difficulties that could delay or prevent the successful development, introduction or marketing of these products and services, or our new products and services and enhancements may not adequately meet the demands of the marketplace or achieve market acceptance.

Microsoft announced a plan to end ~~technology~~technical support and patches for a series of Windows-based operating systems, including Windows 7, which is currently in use on a large number of our ATMs. Microsoft has stated that support for Windows 7 ~~will end in~~has ended as of January 2020 and that limited support will be available until 2023 for a fee. As a large number of

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our ATMs currently operate on Windows 7 we ~~expect to upgrade or replace a portion of our fleet, starting primarily in 2019. While we~~ are ~~currently~~ in the process of ~~evaluating~~upgrading or replacing portions of our fleet. As we progress through the upgrades we anticipate the cost ~~of upgrades or replacement of the ATMs that could be impacted, we expect that this cost could~~will be significant to us and may elevate our capital expenditures. Changing security features, compatibility requirements and end of life capital replenishment may result in upgrade costs and capital costs as well as downtime at some of our ATMs, which could adversely impact revenues and profits.

If we are unsuccessful in offering products or services that gain market acceptance, it could have an adverse impact on our ability to retain existing customers or attract new ones, which could have a material adverse effect on our revenues and our operations.

Errors or omissions in the settlement of merchant funds or in our vault cash reconciliations could damage our relationships with our merchant customers and vault cash providers, respectively and expose us to liability.

We are responsible for maintaining accurate bank account information for certain of our merchant, financial institution customers and vault cash providers and accurate settlements of funds into these accounts based on the underlying transaction activity. This process relies on precise and authorized maintenance of electronic ~~records.~~records and internal controls. Although we have controls in place to help ensure the safety and accuracy of our records in the movement and settlement of funds, errors or unauthorized changes to these records or failure to maintain proper controls of the vault cash in transit with our carriers could result in the erroneous or fraudulent movement of funds, thus damaging our relationships with our merchant customers and vault cash providers exposing us to liability and potentially resulting in a material adverse impact on our operations and cash flows.

Changes in interest rates could increase our operating costs by increasing interest expense under our credit facilities and our vault cash rental costs.

Interest on amounts borrowed under our revolving credit facility is based on a floating interest rate, and our vault cash rental expense is based primarily on floating interest rates. As a result, our interest expense and cash management costs are sensitive to changes in interest rates. 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 LIBOR in the U.S., and the U.K. In Germany and Spain, the rate is based on the Euro Interbank Offered Rate (commonly referred to as “Euribor”). In Mexico, the rate is based on the Interbank Equilibrium Interest Rate (commonly referred to as the “TIIE”), in Canada, the rate is based on the Bank of Canada’s Bankers Acceptance Rate and the Canadian prime rate, and in Australia, the formula is based on the Bank Bill Swap Rates (“BBSY”). Although we currently hedge a portion of our vault cash interest exposure and interest on outstanding borrowings on our revolving credit facility by using interest rate swap ~~contracts~~ and ~~caps,~~cap contracts, we may not be able to enter into similar arrangements for similar amounts in the future. Any significant future increases in interest rates could have a negative impact on our earnings and cash flow by increasing our operating costs and expenses.

On July 27, 2017, the ~~head of the~~ United ~~Kingdom~~Kingdom’s Financial Conduct Authority, which regulates LIBOR, publicly announced that it intends to stop compelling banks to submit LIBOR rates after 2021. The announcement indicates that the ~~desire~~continuation of LIBOR on the current basis cannot be guaranteed after 2021. While there is no consensus on what rate or rates may become accepted alternatives to ~~phase out~~LIBOR, a group of large banks, the ~~use~~Alternative Reference Rate Committee (or "ARRC"), selected the Federal Reserve Bank of New York to publish the Secured Overnight Finance Rate or SOFR as an alternative to LIBOR. Beginning in May 2018, SOFR was established as a broad measure of the cost of overnight borrowing collateralized by U.S. Treasury securities. Furthermore, the Bank of England has commenced publication of a reformed Sterling Overnight Index Average (or "SONIA"), comprised of a broader set of overnight Sterling money market transactions. The SONIA has been recommended as the alternative to Sterling LIBOR by the ~~end~~Bank of ~~2021. There~~England’s Working Group on Sterling Risk-Free Reference Rates. At this time, it is ~~no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Therefore, it’s~~ not possible to predict ~~the effect of this announcement, including~~whether SOFR, SONIA or other rates will become widely accepted alternatives to LIBOR. As a result, it is also not possible to predict whether LIBOR will continue in place, ~~and if so~~ what changes will be made to it, what rates may replace LIBOR going forward, ~~and~~or how ~~LIBOR~~a reference rate will be determined for purposes of loans, securities and derivative instruments ~~currently referencing it~~that reference LIBOR when and if it ceases to ~~exit at some point.~~exist. For these reasons, the potential effect of a LIBOR phase out on our operating costs cannot yet be determined. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in an increase or decrease in reported LIBOR. The potential changes could have a negative impact on our earnings and cash flow by increasing our operating costs and expenses.

For additional information, see Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk.

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

For the quarter ended December 31, 2018, our average outstanding vault cash balance was $3.1 billion in our ATMs. Any loss of vault cash from our ATMs is generally our responsibility. We typically require that our service providers, who either transport the vault cash or otherwise have access to the ATM safe, maintain adequate insurance coverage in the

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event cash losses occur as a result of theft, misconduct, or negligence on the part of such providers. Cash losses at the ATM occur in a variety of ways, such as natural disaster (hurricanes, flooding, tornadoes, etc.), fires, vandalism, and physical removal of the entire ATM, defeating the interior safe or by compromising the ATM’s technology components. Because our ATMs are often installed at retail sites, they face exposure to attempts of theft and vandalism. Thefts of vault cash may be the result of an individual acting alone or as a part of a crime group. We have experienced theft of vault cash from our ATMs across the geographic regions in which we operate and have at times temporarily removed ATMs from service to enhance security features or permanently removed ATMs due to security concerns. While we maintain insurance policies to cover significant losses that may occur that are not covered by the insurance policies maintained by our service providers, such insurance coverage is subject to deductibles, exclusions, and limitations that may leave us bearing some or all of those losses. Significant vault cash losses could result in a material adverse impact on our operations and cash flows.

Any increase in the frequency and/or amounts of theft and other losses could negatively impact our operating results by causing higher deductible payments and increased insurance premiums. Certain ATM types have recently been susceptible to coordinated ATM attacks, known as ‘jackpotting’, which generally involves a physical compromise of the ATM, which causes the ATM to dispense cash without proper authorization and can be controlled remotely in certain types of these attacks. While we maintain a controls program across many fronts to prevent and quickly detect unauthorized ATM access and theft attempts, there can be no assurance that a significant or successful jackpotting attack attempt could occur on our portfolio. Additionally, we have seen an increase in attacks and vault cash losses in our U.K. business, in particular. Should these losses continue at an elevated or increasing rate, it could adversely impact our results and impact our ability to obtain insurance for the vault cash used on our ATMs. Also, damage sustained to our merchant customers’ store locations in connection with any ATM-related thefts, if extensive and frequent enough in nature, could negatively impact our relationships with those merchants and impair our ability to deploy additional ATMs in those existing or new locations of those merchants. Certain merchants have requested, and could request in the future, that we remove ATMs from store locations that have suffered damage as a result of ATM-related thefts, thus negatively impacting our financial results. Finally, we have in the past, and may in the future, voluntarily remove vault cash from certain ATMs on a temporary or permanent basis to mitigate further losses arising from theft or vandalism. Depending on the magnitude and duration of any cash removal, our revenues and profits could be materially and adversely affected.

The election by our merchant customers not to participate in our surcharge-free network offerings could impact the effectiveness of our offerings, which would negatively impact our financial results.

Financial institutions that are members of the Allpoint network pay a fee in exchange for allowing their cardholders to use selected Company-owned, managed and/or ~~managed~~participating ATMs on a surcharge-free basis. The success of the Allpoint network is dependent upon the participation by our merchant customers in that network. In the event a significant number of our merchants elect not to participate in that network, the benefits and effectiveness of the network would be diminished, thus potentially causing some of the participating financial institutions to not renew their agreements, terminate early with us, ~~and~~and/or trigger financial penalties, thereby ~~negatively impacting~~having a negative impact on our financial results.

We may be unable to effectively integrate our acquisitions, which could increase our cost of operations, reduce our profitability, or reduce our shareholder value.

We have been an active business acquirer and may be active in the future. The acquisition and integration of businesses involves a number of risks. The core risks are in the areas of valuation (negotiating a fair price for the business based on inherently limited due diligence) and integration (managing the complex process of integrating the acquired company’s personnel, products, processes, technology, and other assets so as to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition).

The process of integrating operations is time consuming and could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel. The diversion of management’s attention from day-to-day operations, any delays or difficulties encountered in connection with acquisitions, and the integration of the companies’ operations could have an adverse effect on our business, results of operations, financial condition or prospects. The difficulties of integration may be increased by the necessity of coordinating geographically dispersed organizations, integrating

personnel with disparate business backgrounds, and combining

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different corporate cultures. Further, if we cannot successfully integrate an acquired company’s internal control over financial reporting, the reliability of our consolidated financial statements may be impaired and we may not be able to meet our reporting obligations under applicable law. Any such impairment or failure could cause investor confidence and, in turn, the market price of our common shares, to be materially adversely affected.

In addition, even if we are able to integrate acquired businesses successfully, we may not realize the full benefits of the cost efficiency or synergies, or other benefits that we anticipated when selecting our acquisition candidates or these benefits may not be achieved within a reasonable period of time. We may be required to invest significant capital and resources after an acquisition to maintain or grow the business that we acquire. Further, acquired businesses may not achieve anticipated revenues, earnings, or cash flows. Any shortfall in anticipated revenues, earnings, or cash flows could require us to write down the carrying value of the intangible assets associated with any acquired company, which would adversely affect our reported earnings.

Since we were incorporated as Cardtronics Group, Inc. in 2001, we have acquired numerous ATM businesses, a surcharge-free ATM network, a technology product offering that complements our surcharge-free offering, an ATM installation company in the U.K., a Scotland-based provider and developer of marketing and advertising software and services for ATM owners, a U.K.-based provider of secure cash logistics and ATM maintenance, and a transaction processor in the U.S. We have made acquisitions to obtain the assets of deployed ATM networks and the related businesses and their infrastructure, as well as for strategic reasons to enhance the capability of our ATMs and expand our service offerings. We currently anticipate that our future acquisitions, if any, will likely reflect a mix of asset acquisitions and acquisitions of businesses, with each acquisition having its own set of unique characteristics. In the future, we may acquire businesses outside of our traditional areas, which could introduce new risks and uncertainties. To the extent that we elect to acquire an existing company or the operations, technology, and the personnel of the company, we may assume some or all of the liabilities associated with the acquired company and face new and added challenges integrating such acquisition into our operations.

~~The~~

A failure ~~to successfully implement~~of enterprise resource planning (“ERP”) and other associated information systems changes could adversely impact our business and our results of operations.

The Company ~~is in the process of implementing~~has implemented a new cloud based enterprise resource planning and related information systems in order to better manage the business. This implementation ~~requires~~required the commitment of significant personnel and financial resources, and ~~entails~~entailed risks to business operations. Failure and difficulties ~~or delays in implementing~~encountered with our new ERP and related information systems would result in lost anticipated productivity improvements or cost efficiencies, and/or interruptions in service or other operational difficulties that hinder our ability to effectively manage our business. If we do ~~not complete the implementation of~~experience unanticipated failures or other difficulties with the ERP ~~timely and successfully,~~system, we may incur additional costs associated with ~~completing this project, delaying its benefits and~~repairing and/or re-implementing the system, adversely impacting our financial condition and results of operations.

We operate in many sovereign jurisdictions across the globe and expect to continue to grow our business in new regions. Operating in different countries involves special risks which could result in a reduction of our gross and net profits.

We have operations in the U.S., the U.K., Germany, Spain, Ireland, Mexico, Canada, Australia, New Zealand, India and South Africa. We expect to continue to expand in the countries in which we currently operate, and potentially into other countries as opportunities arise. We currently report our consolidated results in U.S. dollars and under generally accepted accounting principles in the U.S. (“U.S. GAAP” or “GAAP”) and expect to do so for the foreseeable future. Operating in various distinct jurisdictions presents a number of risks, including:

exposure to currency fluctuations, including the risk that our future reported operating results could be negatively impacted by unfavorable movements in the functional currencies of our international operations relative to the U.S. dollar, which represents our consolidated reporting currency;

~~the imposition of exchange controls, which could impair our ability to freely move cash;~~

difficulties in complying with the different laws and regulations in each country and jurisdiction in which we operate, including unique labor and reporting laws and restrictions on the collection, management, aggregation, and use of information;

the imposition of exchange controls, which could impair our ability to freely move cash;

unexpected changes in laws, regulations, and policies of governments or other regulatory bodies, including changes that could potentially disallow surcharging or that could result in a reduction in the amount of interchange or other transaction-based fees that we receive;

new, existing or unanticipated conflicts, and political and/or social instability that may be experienced;

~~Table~~rising crime rates in certain of ~~Contents~~

the areas we operate in, including increased incidents of crimes on our ATMs and against store personnel where our ATMs are located;

difficulties in staffing and managing foreign operations, including hiring and retaining skilled workers in those countries in which we operate;

~~new or unanticipated conflicts, political and, or social instability that may be experienced;~~

~~rising crime rates in certain of the areas we operate in, including increased incidents of crimes on our ATMs and against store personnel where our ATMs are located;~~

decreased ATM usage related to decreased travel and tourism or travel restrictions and quarantines in the markets that we operate in;

~~difficulties in staffing and managing foreign operations, including hiring and retaining skilled workers in those countries in which we operate;~~

decreased use or restrictions on the use of cash, or supply chain or staffing interruptions, related to the widespread outbreak of contagious diseases;

~~decreased ATM usage related to decreased travel~~exposure to corruption in jurisdictions where we operate; and ~~tourism in the markets that we operate in;~~

~~exposure to corruption in jurisdictions where we operate; and~~

potential adverse tax consequences, including restrictions on the repatriation of foreign earnings.

~~potential adverse tax consequences, including restrictions on the repatriation of foreign earnings.~~

Any of these factors could have a material adverse impact on us and reduce the revenues and profitability derived from our international operations and thereby adversely impact our consolidated operations and cash flows.

The exit of the U.K. from the European Union could adversely affect us and our shareholders.

On ~~March 29, 2017,~~January 31, 2020, the U.K. ~~government officially triggered Article 50 of the Treaty on~~exited the European Union ~~which commenced the process for the U.K. to exit the European Union.~~and is now in a transition period through December 2020. As a significant portion of our operations are located in the U.K. and our parent company is incorporated in the U.K., we face potential risks associated with the exit ~~process~~ and ~~effects and uncertainties around its implementation.~~transition. The exit ~~process is supposed to be completed over a two-year time period during which~~of the U.K. ~~and the remaining E.U. member states will negotiate a withdrawal agreement, though there is significant uncertainty surrounding the process. The exit process~~ from the E.U. and implementation of the resulting changes could materially and adversely affect the tax, tax treaty, currency, operational, legal, human, and regulatory regime as well as the macro-economic environment in which we operate. The effect of any of these risks, were they to materialize, is difficult to quantify, but could materially increase our operating and compliance costs and materially affect our tax position or business, results of operations and financial position. Further, uncertainty around the form and timing of any withdrawal agreement or withdrawal without an agreement could lead to adverse effects on the economy of the U.K., other parts of Europe, and the rest of the world, which could have an adverse economic impact on our operations.

We derive a significant portion of our revenues and profits from bank-branding relationships with financial institutions and surcharge-free revenue from our Allpoint network. A decline in these revenues as a result of changes in financial institution and card provider demand for these services may have a significant negative impact toon our results.

Bank-branding and surcharge-free revenues from our Allpoint network drive a significant portion of our revenues, and if these product offerings were to become less attractive to financial institutions and card providers whereby we lost a significant amount of existing contracts, it could have a material impact on our revenues and profits. In addition, consolidations within the banking industry may impact our bank-branding relationships as existing bank-branding customers are acquired by other financial institutions, some of which may not be existing bank-branding customers. Our bank-branding contracts could be adversely affected by such consolidations.

If we experience additional impairments of our goodwill or other intangible assets, we will be required to record a charge to earnings, which may be significant.

We have a large amount of goodwill and other intangible assets and are required to perform periodic assessments for any possible impairment for accounting purposes. We periodically evaluate the recoverability and the amortization period of our intangible assets under U.S. GAAP and have taken impairment charges following this analysis in the past. Some of the factors that we consider important in assessing whether or not impairment exists include the performance of the related assets relative to the expected historical or projected future operating results, significant changes in the manner of our use of the assets or the strategy for our overall business, and significant negative industry or economic trends. These factors and assumptions, and any changes in them, could result in an impairment of our goodwill and other intangible assets.

~~Table~~During 2019, we recognized a $7.3 million impairment of ~~Contents~~

~~During September~~our goodwill in our Canada reporting unit. Additionally, during 2017, we recognized impairments of our goodwill ~~other intangible assets~~ and other ~~long lived~~intangible assets of $140.0 million ~~$54.5 million,~~ and ~~$19.0~~$54.5 million, respectively, in our Australia & New Zealand reporting unit. ~~We also recognized charges of $2.5 million related to inventory in our Australia and New Zealand reporting unit.~~ See the risk factor entitled, The broad introduction of free-to-use ATMs in Australia has and will continue to adversely impact our revenues and profits, above for additional information regarding the market changes that resulted in this impairment. As of December 31, ~~2018~~2019, we had goodwill and other intangible assets of ~~$749.1~~$752.6 million and ~~$150.8 million.~~$113.9 million, respectively. In the event we determine our goodwill or amortizable intangible assets are impaired in the future, we may be required to record a significant charge to earnings in our consolidated financial statements, which would negatively impact our results of operations and that impact could be material.

We may accumulate excess or obsolete inventory or assets that cannot be used or re-deployed, which could result in unanticipated write-downs and adversely affect our financial results.

~~We have a substantial number of ATMs, approximately 4,000, as of December 31, 2018, that are not currently in service, yet have remaining net carrying value.~~

To the extent we are not able to re-deploy the assets, we may in future periods incur write-downs of these and other assets which could materially and adversely affect our business, results of operations, and stockholders’ equity.

We have a significant amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants, and make payments on our indebtedness.

As of December 31, ~~2018,~~2019, our outstanding indebtedness was ~~$818.5~~$754.8 million, which represents ~~68.5%~~approximately 67% of our total book capitalization of ~~$1.2~~approximately $1.1 billion. Our indebtedness could have important consequences. For example, it could:

make it difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under the indentures governing our senior subordinated notes and the agreements governing our other indebtedness;

require us to dedicate a substantial portion of our cash flow in the future to pay principal and interest on our debt, which will reduce the funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes;

~~limit our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;~~

~~make us more vulnerable to adverse changes in general economic, industry and competitive conditions, and adverse changes in government regulation; and~~

require us to refinance our indebtedness or, in the case of our Convertible Notes, issue shares;

limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our growth strategy, research and development costs, or other purposes.

limit our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

make us more vulnerable to adverse changes in general economic, industry and competitive conditions, and adverse changes in government regulation; and

Any of these factors could materially and adversely affect our business, results of operations, and cash flows. We cannot assure shareholders that our business will generate sufficient cash flow from operations or that future borrowings, including those under our credit facilities, will be available in an amount sufficient to pay our indebtedness. If we do not have sufficient earnings or capital resources to service our debt, we may be required to refinance all or part of our existing debt, sell assets, borrow more money, delay investment and capital expenditures, or sell equity or debt securities, none of which we can guarantee we will be able to do on commercially reasonable terms or at all.

For additional information, see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Financing Facilities.

Our $287.5 million Convertible Notes are due to mature on December 1, 2020. While our current plan is to retire these obligations with additional borrowings under our revolving credit facility and we currently have and expect to have the necessary capacity under our revolving credit facility to repay the Convertible Notes, there can be no assurance that we will be able to borrow the necessary funds at the time they mature. Alternatively, if we are unable to secure the necessary funds through our revolving credit facility or another financing vehicle, we may issue new common stock for the settlement of the Convertible Notes which could dilute our current shareholders’ equity interests.

The terms of our credit agreement and the indentures governing our senior notes may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.

Our credit agreement and the indentures governing our senior notes include a number of covenants that, among other items, restrict or limit our ability to:

~~sell or transfer property or assets;~~

~~pay dividends on or redeem or repurchase shares;~~

sell or transfer property or assets;

~~merge into or consolidate with any third-party;~~

pay dividends on or redeem or repurchase shares;

~~create, incur, assume, or guarantee additional indebtedness;~~

merge into or consolidate with any third-party;

create, incur, assume, or guarantee additional indebtedness;

create certain liens;

make investments;

~~Table~~engage in transactions with affiliates;

issue or sell preferred shares of ~~Contents~~

restricted subsidiaries; and

~~create certain liens;~~

enter into sale and leaseback transactions.

~~make investments;~~

~~engage in transactions with affiliates;~~

~~issue or sell preferred shares of restricted subsidiaries; and~~

~~enter into sale and leaseback transactions.~~

In addition, we are required by our credit agreement to adhere to certain covenants and maintain specified financial ratios. As a result of these ratios, we may be limited in the manner in which we conduct our business in the future and may be unable to engage in favorable business activities or finance our future operations or capital needs. Accordingly, these restrictions may limit our ability to successfully operate our business and prevent us from fulfilling our debt obligations. A failure to comply with the covenants or financial ratios could result in an event of default. In the event of a default under our credit agreement, the lenders could exercise a number of remedies, some of which could result in an event of default under the indentures governing the senior notes. An acceleration of indebtedness under our credit agreement would also likely result in an event of default under the terms of any other financing arrangement we have outstanding at the time. If any or all of our debt were to be accelerated, we cannot assure shareholders that our assets would be sufficient to repay our indebtedness in full. If we are unable to repay any amounts

outstanding under our bank credit facility when due, the lenders will have the right to proceed against the collateral securing our indebtedness. Such actions could have a material adverse impact on our operations and cash flows. For additional information related to our credit agreement and indentures, see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Financing Facilities.

The fundamental change and make-whole fundamental change provisions associated with our $287.5 million of 1.00% Convertible Senior Notes due December 2020 (“Convertible Notes”) may delay or prevent an otherwise beneficial takeover attempt of us.

The fundamental change purchase rights, which will allow holders of our Convertible Notes to require us to purchase all or a portion of their notes upon the occurrence of a fundamental change, and the provisions requiring an increase to the conversion rate for conversions in connection with certain other circumstances may delay or prevent a takeover of us or the removal of current management that might otherwise be beneficial to investors.

For the potential dilutive effect on the convertible notes, see the risk factor entitled The accounting method for convertible debt securities that may be settled in cash could have a material affect on our reported financial results.

We may not have the ability to raise the funds necessary to pay the amount of cash due upon conversion of the Convertible Notes, if relevant, or upon the occurrence of a fundamental change as described in our convertible indentures, and our debt may contain limitations on our ability to pay cash upon conversion or required purchase of the Convertible Notes.

Upon the occurrence of a fundamental change, holders of our Convertible Notes may require us to purchase, for cash, all or a portion of their Convertible Notes at a fundamental change purchase consideration specified within the convertible note indentures. There can be no assurance that we will have sufficient financial resources, or will be able to arrange financing, to pay the fundamental change purchase consideration if holders submit their Convertible Notes for purchase by us upon the occurrence of a fundamental change or to pay the amount of cash (if any) due if holders surrender their Convertible Notes for conversion. In addition, the occurrence of a fundamental change may cause an event of default under agreements governing us or our subsidiaries’ indebtedness. Agreements governing any future debt may also restrict our ability to make any of the required cash payments even if we have sufficient funds to make them. Furthermore, our ability to purchase the Convertible Notes or to pay cash (if any) due upon the conversion of the Convertible Notes may be limited by law or regulatory authority. In addition, if we fail to purchase the Convertible Notes or to pay the amount of cash (if any) due upon conversion of the Convertible Notes, we will be in default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which in turn may result in the acceleration of other indebtedness we may then have. If the repayment of the other indebtedness were to be accelerated, we may not have sufficient funds to repay that indebtedness and to purchase the Convertible Notes or to pay the amount of cash (if any) due upon conversion.

Our convertible notes are due December 2020, see Part I. Item 1A. We have a significant amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants, and make payments on our indebtedness.

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~~Noncompliance~~Non-compliance with established EFT network rules and regulations could expose us to fines, penalties or other liabilities and could negatively impact our results of operations. Additionally, new EFT network rules and regulations could require us to expend significant amounts of capital to remain in compliance with such rules and regulations.

Our transactions are routed over various EFT networks to obtain authorization for cash disbursements and to provide account balances. These networks include Star, Pulse, NYCE, Cirrus (MasterCard), and Plus (Visa) in the U.S., and LINK in the U.K., among other networks. We utilize various other EFT networks in our other geographic locations. EFT networks set the interchange fees that they charge to the financial institutions, as well as the amounts paid to us. Additionally, EFT networks, including MasterCard and Visa, establish rules and regulations that ATM providers, including ourselves, must comply with in order for member cardholders to use those ATMs. Failure to comply with such rules and regulations could expose us to penalties and/or fines, which could negatively impact our financial results. Furthermore, compliance may in certain instances require capital expenditure, which could be significant. The payment networks’ rules and regulations are generally subject to change and they may modify their rules and regulations from time to time. Our inability to react to changes in the rules and regulations or the interruption or application thereof, may result in the substantial disruption of our business.

In October 2016, MasterCard commenced a liability shift for U.S. ATM transactions on EMV-issued cards used at non-EMV compliant ATMs in the U.S. Visa commenced a liability shift starting in October 2017 for all transaction types on all EMV-issued cards in the U.S. We have upgraded nearly all of our U.S. Company-owned ATMs to deploy additional software to enable additional functionality, enhance security features, and enable the EMV security standard. Due to the significant operational challenges of enabling EMV and other hardware and software enhancements across the majority of our U.S. ATMs, which comprises many types and models of ATMs, together with potential compatibility issues with various processing platforms, we experienced increased downtime at our U.S. ATMs during the first part of 2017. As a result of this downtime, we suffered lost revenues and incurred penalties with certain of our contracts during the first part of 2017. We also incurred increased charges from networks associated with actual or potentially fraudulent transactions, as we were liable for fraudulent transactions on the MasterCard and Visa networks and other networks that have adopted the EMV security standard if our ATM was not EMV compliant at the time of the transaction, and any fraudulent transactions were processed. As of the date of the filing we operate fewer than 100 Company-owned ATMs that are not EMV compliant. Noncompliance with the EMV standard or other network rules could have a material adverse impact on our operations and cash flows.

The majority of the electronic debit networks over which our transactions are conducted require sponsorship by a bank, and the loss of any of our sponsors and our inability to find a replacement may cause disruptions to our operations.

In each of the geographic segments in which we operate, bank sponsorship is required in order to process transactions over certain networks. In all of our markets, our ATMs are connected to financial transaction switching networks operated by organizations such as Visa and MasterCard. The rules governing these switching networks require any company sending transactions through these ~~switches~~networks to be a bank or a technical service processor that is approved and monitored by a bank. As a result, the

operation of our ATM network in all of our markets depends on our ability to secure these “sponsor” arrangements with financial institutions. In the U.S., our largest geographic segment by revenues, bank sponsorship is required on a significant majority of our transactions and we rely on our sponsor banks for ~~access to~~participation in the applicable networks. In the U.K., only international transactions require bank sponsorship. In Mexico, all ATM transactions require bank sponsorship, which is currently provided by our banking partners in the country. In Canada, Germany, and Spain, bank sponsorships are also required and are obtained through our relationships with third-party processors. If our current sponsor banks decide to no longer provide this service, or are no longer financially capable of providing this service as may be determined by certain networks, it may be difficult to find an adequate replacement at a cost similar to what we incur today, or potentially, we could incur a temporary service disruption for certain transactions in the event we lose or do not retain bank sponsorship, which may negatively impact our profitability and may prevent us from doing business in that market.

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If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected.

We are dependent upon the ability and experience of a number of key personnel who have substantial experience with our operations, the rapidly changing automated consumer financial services industry, and the geographical segments in which we operate. It is possible that the loss of the services of one or a combination of several of our senior executives or key managers would have an adverse effect on our operations, if we are not able to find suitable replacements for such persons in a timely manner. Unexpected turnover in key leadership positions within the Company may adversely impact our ability to manage the Company efficiently and effectively, could be disruptive and distracting to management and may lead to additional departures of existing personnel, any of which could adversely impact our business. Any adverse change in our reputation, whether as a result of decreases in revenue or a decline in the market price of our common shares, could affect our ability to motivate and retain our existing employees and recruit new employees. Our success also depends on our ability to continue to attract, manage, motivate and retain other qualified management, as well as technical and operational personnel as we grow. We may not be able to continue to attract and retain such personnel in the future, which could adversely impact our business.

We are subject to ~~laws~~business cycles, seasonality, and ~~regulations across many jurisdictions, changes which could restrict our business, increase our costs and individually~~other outside factors such as extreme weather, natural disasters or ~~in the aggregate adversely~~health emergencies that may negatively affect our business.

~~We conduct business~~

Many of our ATMs are located in ~~many countries.~~convenience stores, gas stations, malls, grocery stores, drug stores, airports, train stations, and other large retailers and are utilized by consumers that frequent them. As ~~a result, we are subject to laws and regulations which affect~~such transaction volumes at our ~~operations~~ATMs located in ~~a number of areas. Laws and regulations affect our business~~regions affected by strong winter weather patterns typically experience declines in many ways including, but not limited to, breadth of services offered, areas of labor, advertising, consumer protection, real estate, billing, e-commerce, promotions, quality of services, intellectual property ownership and infringement, tax, import and export requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, data privacy requirements, anti-competition, small-business protection, environmental, health, and safety.

Compliance with these laws, regulations and similar requirements may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business. Any such costs, which may rise in the futurevolume during those months as a result of ~~changes~~decreases in the amount of consumer traffic through such locations. With the majority of our ATMs located in the northern hemisphere, we expect to see slightly higher transactions in the warmer summer months from May through August, which are also aided by increased vacation and holiday travel. As a result of these ~~laws~~seasonal variations, our quarterly operating results may fluctuate and ~~regulations~~could lead to volatility in the price of our shares. In addition, if a recessionary economic environment were to reduce traffic at our ATM locations, this could impact the level of transactions taking place on our networks and at our ATMs.

Natural or man-made disasters (including, hurricanes, flooding, tornadoes, fires, or acts of war or terror), uncharacteristic or significant weather conditions or real or potential health emergencies such as the widespread outbreak of contagious diseases could hinder travel, result in ~~their interpretation~~travel bans, government restrictions or quarantines. Any of these events could restrict or reduce traffic at our ATM locations, reduce the use or demand for cash or decrease demand for our services. In addition, any catastrophic events or significant business interruptions could reduce or impair our ability, and that of our employees, to provide services and conduct operations and this may occur in a manner that cannot be mitigated by our disaster and business continuity planning or cause losses which are not recoverable under our insurance policies. The impact of such events may have a ~~material adverse effect~~range of lingering impacts on us, our ~~business,~~employees, customers, our suppliers and the overall economy, adversely affecting our operations, financial condition, ~~and~~ results of ~~operations. We have implemented policies~~operations and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance that our employees, contractors, or agents will not violate such laws and regulations or our policies and procedures.

cash flows even after the initial incident resolves.

Changes in tax laws, regulations and interpretations or challenges to our tax positions could adversely affect our business.

We are a large corporation with operations in various ~~other~~ jurisdictions around the world. As such, we are subject to tax laws and regulations of federal, state and local governments. We compute our income tax provision based on enacted tax rates in the jurisdictions in which we operate. As the tax rates vary among jurisdictions, a change in earnings attributable to the various jurisdictions in which we operate could result in an unfavorable change in our overall tax provision.

From time to time, changes in tax laws or regulations may be proposed or enacted that could adversely affect our overall tax liability. For example, the recent U.S. tax legislation enacted on December 22, 2017 ~~represents a~~resulted in significant ~~overhaul of~~changes to the U.S. federal tax code. This tax legislation significantly reduced the U.S. statutory corporate tax rate and made other changes that could have a favorable impact on our overall U.S. federal tax liability in a given period. However, the tax legislation also included a

number of provisions, including, but not limited to, the limitation or elimination of various deductions or credits (including for interest expense and for performance-based compensation under Section 162(m)), the imposition of taxes on certain cross-border payments or transfers and the changing of the timing of the recognition of certain income and deductions or their character that could significantly and adversely affect our U.S. federal income tax position. There can be no assurance that changes in tax laws or regulations, both within the U.S. and the other jurisdictions in which we operate, will not materially and adversely affect our effective tax rate, tax payments, financial condition and results of operations. Similarly, changes in tax laws and regulations that impact our customers and counterparties or the economy generally may also impact our financial condition and results of operations.

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We may also be audited from time to time and while we generally believe we comply with all filing and reporting requirements, a regulator may challenge a particular position or interpretation of law or practice. Certain of our entities are currently under audit.

In addition, tax laws and regulations are complex and subject to varying interpretations, and any significant failure to comply with applicable tax laws and regulations in all relevant jurisdictions could give rise to substantial penalties and liabilities. Any changes in enacted tax laws (such as the recent U.S. tax legislation), rules or regulatory or judicial interpretations; any adverse outcome in connection with tax audits in any jurisdiction; or any change in the pronouncements relating to accounting for income taxes could materially and adversely impact our effective tax rate, tax payments, financial condition and results of operations.

We operate in several jurisdictions and we could be adversely affected by violations of ~~the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act~~anti-bribery, sanctions and ~~other similar anti-corruption laws.~~

anti-money laundering laws and regulations.

Our business operations ~~in countries outside the U.S.~~ are subject to anti-corruption laws and regulations, including restrictions imposed by the U.S. Foreign Corrupt Practices Act (“FCPA”). The FCPA and similar anti-corruption laws in other jurisdictions, such as the U.K. Bribery Act, generally prohibit companies and their intermediaries from paying or promising to pay government officials, political parties, or political party officials and in some cases private individuals or organizations for the purpose of obtaining, retaining, influencing, or directing business. We operate in parts of the world that have experienced governmental or commercial corruption to some degree and, in certain circumstances, compliance with anti-corruption laws may conflict with local customs and practices.

Our employees and agents may interact with government officials on our behalf, including interactions necessary to obtain licenses and other regulatory approvals necessary to operate our business, import or export equipment and resolve tax disputes. These interactions create a risk that actions may occur that could violate the FCPA or other similar laws.

Although we have implemented policies and procedures designed to ensure compliance with local laws and regulations as well as U.S. and U.K. laws and regulations, including the FCPA and the U.K. Bribery Act, there can be no assurance that all of our employees, consultants, contractors and agents will abide by our policies. If we ~~are~~were to be found to be liable for violations of the FCPA, the U.K. Bribery Act or similar anti-corruption laws, ~~in international jurisdictions,~~ either due to our own acts or out of inadvertence, or due to the acts or inadvertence of others, we could suffer from criminal or civil penalties which could have a material and adverse effect on our business, results of operations, financial condition, and cash flows.

We are also subject to economic and trade sanctions programs that are administered globally by the United Nations and in the United States by the Treasury Department’s Office of Foreign Assets Control (OFAC). These programs prohibit or restrict transactions to or from or dealings with specified countries, governments or individuals, including narcotics traffickers and terrorists or terrorist organizations. Additionally other countries in which we operate also have sanctions programs including Canada, Australia, the United Kingdom and the European Union.

Compliance with sanctions regulations may be onerous and expensive, and they may be inconsistent or contradictory between jurisdictions. Any violation of OFAC or other sanctions regulations could result in criminal or civil penalties which could have a material and adverse effect on our business, results of operations, financial condition, and cash flows.

Many jurisdictions apply financial crime regulations, including combating money laundering and terrorist financing. Whilst we are not a financial institution, certain of these regulations may apply to our businesses. To the extent that they do, any violation of such financial crime regulations could have a material and adverse effect on our business, results of operations, financial condition, and cash flows.

If we are unable to adequately protect our intellectual property, we may lose a valuable competitive advantage or be forced to incur costly litigation to protect our rights. Additionally, if we face claims of infringement of third-party intellectual property, we may be forced to incur costly litigation.

Our success depends, in part, on developing and protecting our intellectual property. We rely on copyright, patent, trademark and trade secret laws to protect our intellectual property. We also rely on other confidentiality and contractual agreements and arrangements with our employees, affiliates, business partners and customers to establish and protect our intellectual property and similar proprietary rights. While we expect these agreements and arrangements to be honored, we cannot assure shareholders that they will be and, despite our efforts, our trade secrets and proprietary know-how could become known to, or independently developed by competitors. Agreements entered into for that purpose may not be enforceable or provide us with an adequate remedy. Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which our applications and services are made available. Any litigation relating to the defense of our intellectual property, whether successful or unsuccessful, could result in substantial costs to us and potentially cause a diversion of our resources.

In addition, we may face claims of infringement that could interfere with our ability to use technology or other intellectual property rights that are material to our business operations. We may expose ourselves to additional liability if we agree to indemnify our customers against third-party infringement claims. If the owner of intellectual property establishes that we are, or a customer which we are obligated to indemnify is, infringing its intellectual property rights, we may be forced to change our products or services, and such changes may be expensive or impractical, or we may need to seek royalty or license agreements from the owner of such rights. In the event a claim of infringement against us is successful, we may be required to pay royalties to use technology or other intellectual property rights that we had been

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using, or we may be required to enter into a license agreement and pay license fees, or we may be required to stop using the technology or other intellectual property rights that we had been using. We may be unable to obtain necessary licenses from third-parties at a reasonable cost or within a reasonable amount of time. Any litigation of this type, whether successful or unsuccessful, could result in substantial costs to us and potentially cause a diversion of our resources.

We are subject to business cycles, seasonality, and other outside factors that may negatively affect our business.

Our overall business is subject to seasonal variations. Transaction volumes at our ATMs located in regions affected by strong winter weather patterns typically experience declines in volume during those months as a result of decreases in the amount of consumer traffic through such locations. With the majority of our ATMs located in the northern hemisphere, we expect to see slightly higher transactions in the warmer summer months from May through August, which are also aided by increased vacation and holiday travel. As a result of these seasonal variations, our quarterly operating results may fluctuate and could lead to volatility in the price of our shares. In addition, a recessionary economic environment could ~~reduce~~impact the level of transactions taking place on our networks, which could have a material ~~adverse~~ impact on our operations and cash flows.

Cardtronics plc may be treated as a U.S. corporation for U.S. federal income tax purposes and could be liable for substantial additional U.S. federal income taxes in the event our redomicile to the U.K. is successfully challenged by the U.S. Internal Revenue Service (“IRS”).

For U.S. federal income tax purposes, a corporation is generally considered a tax resident in the jurisdiction of its incorporation or organization. Because Cardtronics plc is incorporated under English law, it should be considered a U.K., tax resident, and not a U.S., tax resident under these general rules. However, Section 7874 of the Code provides that a corporation organized outside the U.S. that acquires substantially all of the assets of a corporation organized in the U.S. (including through a merger) will be treated as a U.S. corporation (and therefore, a U.S. tax resident) for U.S. federal income tax purposes if (i) the shareholders of the acquired U.S. corporation own at least 80% (of either the voting power or value) of the share of the acquiring foreign corporation after the acquisition and (ii) the acquiring foreign corporation’s “expanded affiliated group” does not have substantial business activities in the country in which the acquiring foreign corporation is organized relative to the expanded affiliated group’s worldwide activities (“substantial business activities” or the “SBA Test”). Pursuant to the Redomicile Transaction, Cardtronics plc indirectly acquired all of Cardtronics Delaware’s assets, and Cardtronics Delaware shareholders held 100% of the value of Cardtronics plc by virtue of their prior share ownership of Cardtronics Delaware immediately after the Redomicile Transaction. As a result, the Cardtronics plc expanded affiliated group (which includes Cardtronics Delaware and its subsidiaries) must have had substantial business activities in the U.K. for Cardtronics plc to avoid being treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code. In order for the Cardtronics plc expanded affiliated group to have satisfied the SBA Test, at least 25% of the employees (by headcount and compensation), assets, and gross income of such group must have been based, located, and derived, respectively, in the U.K. as of the dates and for relevant periods under the Code sections.

Cardtronics plc believes it fully satisfied the SBA Test and performed rigorous analysis to support this conclusion. However, the application of Section 7874 of the Code is not entirely clear in all situations, and while we believe the SBA Test was fully

satisfied, there is no assurance that the IRS or a court will agree. Furthermore, there have been legislative proposals to expand the scope of U.S. corporate tax residence and there could be changes to the Code (including Section 7874 of the Code) or the U.S. Treasury Regulations that could result in Cardtronics plc being treated as a U.S. corporation or otherwise have adverse consequences. Such statutory or regulatory provisions could have retroactive application.

If it were determined that Cardtronics plc should be taxed as a U.S. corporation for U.S. federal income tax purposes, Cardtronics plc could be liable for substantial additional U.S. federal income taxes. Additionally, the U.K. could continue to tax Cardtronics plc as a U.K. tax resident for U.K. tax purposes, and thus Cardtronics plc and its shareholders could be subject to taxation in both the U.S. and the U.K.

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Our U.S. shareholders could suffer tax consequences if we are treated as a “controlled foreign corporation” for U.S. federal income tax purposes.

A foreign corporation will be treated as a “controlled foreign corporation” (“CFC”) for U.S. federal income tax purposes if, on any day during the taxable year of such foreign corporation, more than 50% of the equity interests in such corporation, measured by reference to the combined voting power or value of the equity of the corporation, is owned directly or by application of the attribution and constructive ownership rules of Sections 958(a) and 958(b) of the Internal Revenue Code by United States Shareholders. For this purpose, a “United States Shareholder” is any United States person that possesses directly, or by application of the attribution and constructive ownership rules of Sections 958(a) and 958(b) of the Code, 10% or more of the combined voting power of all classes of equity in such corporation. Each United States Shareholder of our Company who owns, directly or indirectly, our common shares on the last day of the taxable year on which we are a CFC will be required to include in its gross income for United States federal income tax purposes its pro rata share of our “Subpart F income,” even if the Subpart F income is not distributed. Subpart F income generally includes passive income but also includes certain related party sales, manufacturing and services income. Additionally, post USU.S. Tax Reform, each United States Shareholder of our Company may be required to include in ~~its~~their gross income for United States federal income tax purposes its ~~prorata~~pro rata share of our Global Intangible Low-Taxed Income, even if undistributed. If we are a CFC, the ~~PFIC~~Passive Foreign Investment Company ("PFIC") rules set forth above, even if we are otherwise considered to be a PFIC, will not be applicable. United States persons who might, directly, indirectly or constructively, acquire 10% or more of our common shares, and therefore might be a United States Shareholder, should consider the possible application of the CFC rules, and consult a tax advisor with respect to such matter.

Our operating results have fluctuated historically and could continue to fluctuate in the future, which could affect our ability to maintain our current market position or expand.

Our operating results have fluctuated in the past and may continue to fluctuate in the future as a result of a variety of factors, many of which are beyond our control, including the following:

~~changes in consumers’ preferences for cash as a payment vehicle;~~

~~changes implemented by networks and how they determine interchange rates;~~

changes in consumers’ preferences for cash as a payment vehicle;

~~changes in general economic conditions and specific market conditions in the ATM and financial services industries;~~

changes implemented by networks and how they determine interchange rates;

~~competition from other companies providing the same or similar services that we offer;~~

changes in general economic conditions and specific market conditions in the ATM and financial services industries;

~~changes in legislative or regulatory requirements associated with the ATM and financial services industries;~~

competition from other companies providing the same or similar services that we offer;

~~changes in payment trends and offerings in the markets in which we operate;~~

changes in the demand for our services by financial institutions;

~~security or data breaches, cyber-incidents or other business disruptions;~~

changes in legislative or regulatory requirements associated with the ATM and financial services industries;

~~changes in the financial condition and operational execution of our key vendors and service providers;~~

changes in payment trends and offerings in the markets in which we operate;

~~changes in the mix of our merchant customers;~~

security or data breaches, cyber-incidents or other business disruptions;

~~the timing and magnitude of operating expenses, capital expenditures, and expenses related to the expansion of sales, marketing, and operations, including as a result of acquisitions, if any;~~

changes in the financial condition and operational execution of our key vendors and service providers;

~~political or social instability;~~

changes in the mix of our merchant customers;

~~the timing and magnitude of any impairment charges that may materialize over time relating to our goodwill, intangible assets, or long-lived assets;~~

the timing and magnitude of operating expenses, capital expenditures, and expenses related to the expansion of sales, marketing, and operations, including as a result of acquisitions, if any;

~~changes in the general level of interest rates in the markets in which we operate;~~

political or social instability;

~~changes in inflation or how key vendors and suppliers price their services to us;~~

the timing and magnitude of any impairment charges that may materialize over time relating to our goodwill, intangible assets, or long-lived assets;

~~changes in the mix of our current services;~~

changes in the general level of interest rates in the markets in which we operate;

~~changes in the financial condition and credit risk of our customers;~~

changes in inflation or how key vendors and suppliers price their services to us;

~~any adverse results in litigation by us or by others against us;~~

changes in the mix of our current services;

~~our inability to make payments on our outstanding indebtedness as they become due;~~

changes in the financial condition and credit risk of our customers;

~~our failure to successfully enter new markets or the failure of new markets to develop in the time and manner we anticipate;~~

any adverse results in litigation by us or by others against us;

~~acquisitions, strategic alliances, or joint ventures involving us, our customers, vendors, or our competitors;~~

our inability to make payments on our outstanding indebtedness as they become due;

~~terrorist acts, theft, vandalism, fires, floods, or other natural disasters;~~

our failure to successfully enter new markets or the failure of new markets to develop in the time and manner we anticipate;

~~additions or departures of key personnel;~~

acquisitions, strategic alliances, or joint ventures involving us, our customers, vendors, or our competitors;

terrorist acts, theft, vandalism, fires, floods, or other natural disasters;

~~Table~~decreased use or restrictions on the use of ~~Contents~~

cash, or supply chain interruptions, related to the widespread outbreak of contagious diseases;

~~changes in tax rates or tax policies in the jurisdictions in which we operate; and~~

additions or departures of key personnel;

changes in tax rates or tax policies in the jurisdictions in which we operate; and

Any of the foregoing factors could have a material adverse effect on our business, results of operations, and financial condition. Although we have experienced revenue growth in recent years, this growth rate is not necessarily indicative of future operating results. A relatively large portion of our expenses are fixed in the short-term, particularly with respect to personnel expenses, depreciation and amortization expenses, and interest expense. Therefore, our results of operations are particularly sensitive to fluctuations in revenues. Additionally, beginning in July 2017, the loss of our largest customer at that time, 7-Eleven in the U.S., ~~has~~ had ~~and will most likely continue to have,~~ a significant negative impact on our income from operations and cash flows. As such, comparisons to prior periods should not be relied upon as indications of our future performance.

Risks associated with our common shares

We may issue additional common shares or instruments convertible into common shares, which may materially and adversely affect the market price of our common shares and the trading price of our Convertible Notes.

We may conduct future offerings of our common shares or other securities convertible into our common shares to fund acquisitions, finance operations or for general corporate purposes. In addition, we may elect to settle the conversion of our outstanding Convertible Notes in common shares and we may also issue common shares under our equity awards programs. The market price of our common shares or the trading price of the Convertible Notes could decrease significantly if we conduct such future offerings, if any of our existing shareholders sells a substantial amount of our common shares or if the market perceives that such offerings or sales may occur. Moreover, any issuance of additional common shares will dilute the ownership interest of our existing common shareholders and may adversely affect the ability of holders of our Convertible Notes to participate in any appreciation of our common shares.

The accounting method for convertible debt securities that may be settled in cash could have a material affect on our reported financial results.

Under U.S. GAAP, an entity must separately account for the debt component and the embedded conversion option of convertible debt instruments that may be settled entirely or partially in cash upon conversion, such as our Convertible Notes, in a manner that reflects the issuer’s economic interest cost. The effect of the accounting treatment for such instruments is that the value of such embedded conversion option is treated as an original issue discount for purposes of accounting for the debt component of the Convertible Notes, and that original issue discount is amortized into interest expense over the term of the Convertible Notes using an effective yield method. As a result, we are required to record non-cash interest expense as a result of the amortization of the effective original issue discount to the Convertible Notes’ face amount over the term of the notes. Accordingly, we report lower net income in our financial results because of the recognition of both the current period’s amortization of the debt discount and the Convertible Notes’ coupon interest.

Under certain circumstances, convertible debt instruments that may be settled entirely or partially in cash are evaluated for their impact on earnings per share utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of the notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the notes are accounted for as if the number of common shares that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. ~~We cannot be certain that the accounting standards in the future will continue to permit the use of the treasury stock method.~~ If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the notes, then our diluted earnings per share could be adversely affected.

In addition, if the conditional conversion feature of the notes is triggered, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

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Our articles of association include mandatory offer provisions that may be viewed as less favorable to shareholders, including with respect to takeover matters.

Although we are not currently subject to the U.K. Takeover Code, certain provisions similar to the mandatory offer provisions and certain other aspects of the U.K. Takeover Code were specifically approved and included in our articles of association that were adopted at the special meeting of shareholders of Cardtronics Delaware held in June 2016 in connection with the Redomicile ~~Transaction~~Transaction. As a result, except as permitted by our articles of association, (including acquisitions with the consent of our Board

of Directors or with prior approval by the independent shareholders at a general meeting), a shareholder, together with persons acting in concert, would be at risk of certain Board of Directors sanctions if they acquired 30% or more of our issued shares without making a voluntary offer for all of the issued and outstanding shares, ~~(not~~not already held by the ~~acquirer)~~acquirer, that is in cash (or accompanied by a full cash alternative) and otherwise in accordance with the provisions of the U.K. Takeover Code, (as if the U.K. Takeover Code applied to us). The ability of shareholders to retain their shares upon completion of an offer for our entire issued share capital may depend on whether the Board of Directors subsequently agrees to propose a court-approved scheme of arrangement that would, if approved by our shareholders, compel minority shareholders to transfer or surrender their shares in favor of the offeror, or if the offeror acquires at least 90% of the shares. In that case, the offeror can require minority shareholders to accept the offer under the ‘squeeze-out’ provisions in our articles of association. The mandatory offer provisions in our articles of association could have the effect of discouraging the acquisition and holding of interests of 30% or more of our issued shares and encouraging those shareholders, who may be acting in concert, with respect to the acquisition of shares, to ~~seek to~~ obtain the recommendation of our Board of Directors before effecting any additional purchases. In addition, these provisions may adversely affect the market price of our shares or inhibit fluctuations in the market price of our shares that could otherwise result from actual or rumored takeover attempts.

English law generally provides for increased shareholder approval requirements with respect to certain aspects of capital management.

English law provides that a board of directors may generally only allot shares with the prior authorization of shareholders and such authorization must specify the maximum nominal value of the shares that can be allotted and can be granted for a maximum period of five years, each as specified in the articles of association or the relevant shareholder resolution. English law also generally provides shareholders with preemptive rights when new shares are issued for cash. It is possible, however, for the articles of association, or shareholders in a general meeting, to exclude preemptive rights, if coupled with a general authorization to allot shares. Such an exclusion of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, or from the date of the shareholder resolution, as applicable.

English law also ~~generally~~ prohibits ~~a company~~us from repurchasing ~~its~~our own shares by way of “off market purchases” ~~without the prior approval of shareholders~~ by ordinary resolution (i.e., majority of votes ~~cast)~~cast of our shareholders). Such authority can be granted for a maximum period of up to five ~~years.~~years but may be sought more frequently. English law prohibits us from conducting “on market purchases” as our shares are listed on NASDAQ and will not be traded on a recognized investment exchange in the U.K.

~~Prior to~~

Our shareholders approved the ~~Redomicile Transaction, resolutions were adopted to authorize the allotment~~authorization of ~~a certain amount of shares, exclude certain preemptive rights and permit~~ off market purchases ~~of up to 15% of our shares in issue immediately after the effective time of the Redomicile Transaction, but these authorizations~~that will expire in ~~2021~~2024 unless renewed by our shareholders prior to the expiration date.

We cannot assure shareholders that situations will not arise where such shareholder approval requirements for any of these actions would deprive our shareholders of substantial capital management benefits.

ITEM 1B. UNRESOLVED STAFF COMMENTS

~~None.~~

None.

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ITEM 2. PROPERTIES

Our ~~North America segment includes offices throughout the U.S., Mexico, and Canada. The~~ principal executive offices are located at 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042 where we lease 53,544 square feet of office space.

~~Specifically related to our~~ We also maintain other offices in North America, ~~segment, we lease 102,060 square feet~~Europe, Australia, and South Africa. All of office and warehouse space in north Houston and space for regional offices in Bethesda, Maryland, Chandler, Arizona, and Bloomington, Illinois. Our North America segment also leases office and warehouse space in Mexico City, Mexico, Mississauga, Ontario, Calgary and Edmonton Alberta, Montreal, Quebec, Winnipeg, Manitoba, and Vancouver, British Columbia. We also lease 82,602 square feet in the Dallas, Texas area, where we manage our ~~EFT transaction processing platforms and have consolidated certain North America operations.~~

In Europe, we lease office spaces in and near London, U.K. for our ATM operations and various other locations throughout the U.K. to support our cash-in-transit operations and other business activities. We also have European offices in Trier, Germany, and Barcelona, Spain. For our i-design ATM advertising operations, we lease office space in Dundee, Scotland.

~~In Australia we have office and warehouse space in the vicinity of Melbourne and Brisbane. In New Zealand, we lease an office in Auckland. We also lease an office in Cape Town, South Africa.~~

~~Our facilities~~properties are leased pursuant to operating leases for various terms and we believe they are adequate for our current use. We believe that our leases are at ~~competitive or~~ market rates and do not anticipate any difficulty in leasing suitable additional space upon expiration of our current lease terms.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject to various legal proceedings and claims arising in the ordinary course of its business. The Company has provided reserves where necessary for all claims and the Company’s management does not expect the outcome in any 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.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market information and holders. Our common shares trade on The NASDAQ Global Select Market under the symbol “CATM.” As of February ~~15, 2019,~~27, 2020, the majority of our shareholders held their shares in “street name” by a nominee of the Depository Trust Company.

Dividend information.We have historically not paid ~~nor do we anticipate paying~~ dividends with respect to our common ~~shares and are limited in doing so under English law.~~shares. For additional information related to our restrictions on our ability to pay dividends, seeItem 8.Financial Statements and Supplementary Data, Note ~~12. Long-Term~~11. Debt.

Purchases of Equity Securities. The Company repurchased and canceled an accumulated total of 1,732,392 outstanding Class A ordinary shares between May and September 2019. These shares were repurchased at a weighted average price of $28.86 per share for an aggregate purchase price of approximately $50 million. There were no repurchases of the Company's ordinary shares in the three months ended December 31, 2019.

For information on securities authorized for issuance under our existing equity compensation plans, see “Securities Authorized for Issuance under Equity Compensation Plans” under the heading “Share Ownership Matters” in our proxy statement filed with the SEC.

Share performance graph.The following graph compares the five-year total return to holders of Cardtronics plc’s common shares, the NASDAQ Composite index (the “Index”), and a customized peer group of 12 companies that includes: (i) ACI Worldwide, Inc. (ACIW), (ii) CSG Systems International, Inc. (CSGS), (iii) Euronet Worldwide, Inc. (EEFT), (iv) Everi Holdings Inc. (EVRI), (v) Fair Isaac Corp. (FICO), (vi) Global Payments, Inc. (GPN), (vii) Jack Henry & Associates, Inc. (JKHY), (viii) Liveramp Holdings, Inc. (RAMP), (ix) MoneyGram International, Inc. (MGI), (x) SS&C Technologies Holdings, Inc. (SSNC), (xi) Total Systems Services, Inc. (TSS), and (xii) WEX, Inc. (WEX), (collectively, the “Peer Group”).

We selected the Peer Group companies because they are publicly traded companies that: (i) have the same Global Industry Classification Standard classification, (ii) earn a similar amount of revenues, (iii) have similar market values, and (iv) provide services that are similar to the services we provide.

The performance graph below was prepared based on the following assumptions: (i) $100 was invested in our common shares, in our Peer Group, and the Index on December 31, ~~2013,~~2014, (ii) investments in the Peer Group are weighted based on the returns of each individual company within the group according to their market capitalization at the beginning of the period, and (iii) dividends were reinvested on the relevant payment dates. The share price performance included in this graph is historical and not necessarily indicative of future share price performance.

The following graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.



	12/14		12/15		12/16		12/17		12/18		12/19
Cardtronics plc	$	100.00	$	87.22	$	141.45	$	48.00	$	67.39	$	115.73
NASDAQ Composite	$	100.00	$	106.96	$	116.45	$	150.96	$	146.67	$	200.49
Peer Group	$	100.00	$	123.21	$	132.76	$	174.80	$	189.04	$	289.84

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Cardtronics plc

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$
88.79

$
77.45

$
125.59

$
42.62

$
59.84
NASDAQ Composite

$
100.00

$
114.62

$
122.81

$
133.19

$
172.11

$
165.84
Peer Group

$
100.00

$
103.11

$
131.46

$
139.45

$
191.17

$
204.87

~~Table of Contents~~

ITEM 6. SELECTED FINANCIAL DATA

The following table reflects selected financial data derived from our consolidated financial statements. As a result of acquisitions of businesses during the years presented below, our financial results are not comparable in all periods.Additionally, these selected historical results are not necessarily indicative of results to be expected in the future.

Year Ended December 31,

2018

2017

2016

2015

2014

(In thousands, excluding share and per share information and number of ATMs)
Consolidated Statements of Operations Data:

Revenues and Income:

Total revenues

$
1,345,243

$
1,507,599

$
1,265,364

$
1,200,301

$
1,054,821
Income (loss) from operations (1)

70,210

(103,509)

146,379

139,917

104,639
Net income (loss) (2)

3,656

(145,351)

87,910

65,981

35,194
Net income (loss) attributable to controlling interests and available to common shareholders (2)

3,676

(145,350)

87,991

67,080

37,140
Per Share Data:

Basic net income (loss) per common share (2)

$
0.08

$
(3.19)

$
1.95

$
1.50

$
0.83
Diluted net income (loss) per common share (2)

$
0.08

$
(3.19)

$
1.92

$
1.48

$
0.82
Basic weighted average shares outstanding

45,988,775

45,619,679

45,206,119

44,796,701

44,338,408
Diluted weighted average shares outstanding

46,436,439

45,619,679

45,821,527

45,368,687

44,867,304

Consolidated Balance Sheets Data:

Total cash and cash equivalents

$
39,940

$
51,370

$
73,534

$
26,297

$
31,875
Total assets

1,787,344

1,862,716

1,364,696

1,319,935

1,247,566
Total long-term debt and capital lease obligations, including current portion (3)

818,509

918,275

503,320

568,331

604,473
Total shareholders' equity

376,772

390,393

456,935

369,793

286,535

Consolidated Statements of Cash Flows Data:

Cash flows from operating activities

$
334,202

$
230,587

$
272,311

$
268,060

$
194,739
Cash flows from investing activities

(108,355)

(628,742)

(139,203)

(209,562)

(336,881)
Cash flows from financing activities

(126,392)

391,424

(78,942)

(48,520)

99,248

Operating Data (Unaudited):

Total number of ATMs (at period end):

ATM operations

88,326

96,539

78,561

77,169

78,217
Managed services and processing, net (4)

138,259

134,156

124,572

112,622

31,989
Total number of ATMs (at period end)

226,585

230,695

203,133

189,791

110,206

Total transactions (excluding Managed services and processing, net)

1,328,971

1,495,586

1,358,409

1,251,626

1,040,241
Total cash withdrawal transactions (excluding Managed services and processing)

864,923

956,919

848,394

759,408

617,419



	Year Ended December 31,
	2019			2018			2017			2016			2015
	(In thousands, excluding share and per share information and number of ATMs)
Consolidated Statements of Operations Data:
Revenues and Income:
Total revenues	$	1,349,405		$	1,345,243		$	1,507,599		$	1,265,364		$	1,200,301
Income (loss) from operations ^{(1) (2)}	86,434			70,210			(103,509		)	146,379			139,917
Net income (loss)	48,265			3,656			(145,351		)	87,910			65,981
Net income (loss) attributable to controlling interests and available to common shareholders	48,274			3,676			(145,350		)	87,991			67,080
Per Share Data:
Basic net income (loss) per common share	$	1.06		$	0.08		$	(3.19	)	$	1.95		$	1.50
Diluted net income (loss) per common share	$	1.05		$	0.08		$	(3.19	)	$	1.92		$	1.48
Basic weighted average shares outstanding	45,514,703			45,988,775			45,619,679			45,206,119			44,796,701
Diluted weighted average shares outstanding	46,015,334			46,436,439			45,619,679			45,821,527			45,368,687

Consolidated Balance Sheets Data:
Total cash and cash equivalents	$	30,115		$	39,940		$	51,370		$	73,534		$	26,297
Total assets ⁽³⁾	1,763,958			1,787,344			1,862,716			1,364,696			1,319,935
Total long-term debt and lease obligations, including current portions ^{(3) (4)}	862,150			818,509			918,275			503,320			568,331
Total shareholders' equity	380,326			376,772			390,393			456,935			369,793

Consolidated Statements of Cash Flows Data:
Cash flows from operating activities ⁽⁵⁾	$	204,659		$	334,202		$	230,587		$	272,311		$	268,060
Cash flows from investing activities	(134,006		)	(108,355		)	(628,742		)	(139,203		)	(209,562		)
Cash flows from financing activities	(151,097		)	(126,392		)	391,424			(78,942		)	(48,520		)

Operating Data (Unaudited):
Total number of ATMs (at period end):
ATM operations	88,335			88,223			96,539			78,561			77,169
Managed services and processing, net ⁽⁶⁾	198,438			138,362			134,156			124,572			112,622
Total number of ATMs (at period end)	286,773			226,585			230,695			203,133			189,791

Total transactions (excluding Managed services and processing, net)	1,219,085			1,328,971			1,495,586			1,358,409			1,251,626
Total cash withdrawal transactions (excluding Managed services and processing)	807,188			864,923			956,919			848,394			759,408


(1)		The year ended December 31, ~~2017~~2019 includes ~~$194.5 in goodwill and intangible asset impairment losses in addition to $33.3~~$11.7 million of impairment and disposal losses including a goodwill impairment of $7.3 million on other assets. The year ended December 31, 2018 includes $17.9 million of impairment and disposal losses on other assets and $6.4 million in redemption costs for early extinguishment of debt. The years ended December 31, 2018, 2017, 2016, 2015, and 2014 include $3.2 million, $18.9 million, $9.5 million, $27.1 million, and $18.1 million, respectively, in acquisition and divestiture related costs. Additionally, years ended December 31, 2018 and 2017 include $6.6 million and $10.4 million, respectively, in restructuring costs. our Canada reporting unit.

The year ended December 31, 2018 includes $17.9 million of impairment and disposal losses and $6.4 million in redemption costs for early extinguishment of debt. The year ended December 31, 2017 includes $227.8 million of impairment and disposal losses. The years ended December 31, 2018, 2017, and 2016 and 2015 include $3.2 million, $18.9 million, $9.5 million, and $27.1 million, respectively, in acquisition and divestiture related costs. No significant acquisition and divestiture costs were recognized in the year ended December 31, 2019. Additionally, the years ended December 31, 2019, 2018 and 2017 include $8.9 million, $6.6 million and $11.1 million, respectively, in restructuring costs.


(2)		The year ended December 31, 2016 includes $13.7 million of expenses associated with the redomicile of our parent company to the U.K., which was completed on July 1, 2016.

(3)

We adopted Accounting Standards Codification Topic 842, Leases (the “Lease Standard”) on January 1, 2019, using the modified retrospective approach and using the effective date as the date of initial application. Consequently, the financial information for dates and periods ended before January 1, 2019 has not been revised within our financial statements or the above selected financial data. As of December 31, 2019, Total assets include operating lease assets of approximately $76.5 million and Total current liabilities and Long-term liabilities include operating lease liabilities of approximately $20.3 million and approximately $69.5 million, respectively.

(4)

Our long-term debt as of December 31, ~~2018~~2019 consists of outstanding borrowings under our revolving credit facility, our ~~Convertible Notes, and our~~ 5.50% Senior Notes due 2025 (the “2025 Notes”) and our 1.00% Convertible Senior Notes due December 2020 (the "Convertible Notes"). The 2025 Notes are reported in the accompanying Consolidated Balance Sheets at a carrying value of $296.5 million as of December 31, 2019, which represents the principal balance of $300.0 million less capitalized debt issuance costs of $3.5 million. The Convertible Notes are reported in the accompanying Consolidated Balance Sheets at a carrying value of ~~$263.5~~$275.7 million as of December 31, ~~2018,~~2019, which represents the principal balance of $287.5 million less the unamortized discount and capitalized debt issuance costs of ~~$24.0~~$11.8 million. ~~The 2025~~Although the Convertible Notes are ~~reported~~due in December 2020, it is currently Management's intent to utilize the available capacity under the revolving credit facility to fund the December 2020 repayment of the Convertible Notes. Therefore, in accordance with the applicable accounting guidance, the Convertible Notes remain classified in the Long-term debt line in the accompanying Consolidated Balance Sheets at ~~a carrying value of $295.9 million as of~~ December 31, 2019.

(5)

In conjunction with our adoption of Accounting Standards Codification ("ASC") 2016-18 in 2018, ~~which represents~~we retroactively revised our reported Cash flows from operating activities. Consistent with this guidance, Restricted cash is treated as cash in the ~~principal balance~~preparation of ~~$300.0 million less capitalized debt issuance costs~~the Statements of ~~$4.1 million. In accordance with the applicable accounting guidance related~~Cash Flows. Consequently, our reported Cash flows from operating activities can vary significantly due to the ~~classification~~timing of ~~capitalized debt issuance costs, these deferred financing costs related to our Convertible Notes, 2022 Notes (redeemed in December 2018), and 2025 Notes are presented as~~settlement activity at a ~~direct deduction from the carrying amount of the related debt liabilities.~~

period end.

	⁽⁴⁾
(6)		The notable increase in the Managed services and processing, net ATM machine count in ~~2015~~2019, is primarily attributable to the ~~July 1, 2015~~May 2019 acquisition of ~~CDS and the incremental number of transacting ATMs for which CDS provides~~ATM processing ~~services.~~ contracts associated with approximately 62,000 ATMs.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operationscontains forward-looking statements that are based on management’s currentexpectations, estimates, and projections about our business and operations. Ouractual results may differ materially from those currently anticipated and expressedin such forward-looking statements. Known material factors that could cause actual results to differ materially from those in the forward-looking statements are those described in Part I. Item 1A. Risk Factors of this ~~2018~~2019 Form 10-K. Additionally, you should read the following discussion together with the consolidated financial statements and the relatednotes included in Item 8. Financial Statements and Supplementary Data.

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 recently seen increased demand from financial institutions of all sizes as they evaluate their physical banking services and branch strategies. We have also expanded our ATM capabilities and service offerings to financial institutions, as we are seeing increasing interest from financial institutions for the 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 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) 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) i-design in March 2013, a Scotland-based provider and developer of marketing and advertising software and services for ATM operators, and (ii) CDS in July 2015, a leading independent transaction processor for ATM deployers and payment card issuers in the U.S., providing solutions to ATM sales and service organizations and financial institutions.

levels.

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 potential acquisitions that are deemed strategic opportunities. We~~ see opportunities to expand our operations through the following efforts:

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

~~expanding our relationships with leading financial institutions;~~

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

•expanding our relationships with leading financial institutions;

~~increasing transaction levels at our existing locations;~~

working with financial technology companies (or “Fintechs”) with a primary focus on the retail consumer finance business and card issuers to further leverage our extensive ATM network;

~~developing and providing additional services at our existing ATMs;~~

increasing transaction levels at our existing locations;

~~pursuing additional managed services opportunities; and~~

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

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

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.

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~~With 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

~~Table of Contents~~

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 athe 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,~~touchpoints, 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 nor a major point of differentiation 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 provide additional financial services to customers, such as ~~deposit taking, money transfers, and stored-value debit card reload services.~~deposit-taking or cash-out services for on-line stored accounts. 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.

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 extensive 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. We believe that the number of stored-value debit cards being issued and in circulation has increased significantly over the last several years and represents a growing portion of our total withdrawal transactions at our ATMs in the U.S.

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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~~60,000 ATMs were deployed in the U.K. as of December ~~2018,~~2019, of which approximately 60% were operated by non-banks (inclusive of our ~~nearly 19,000~~approximately 18,000 ATMs). Electronic payment alternatives have gained popularity in the U.K. and we have seen both the number of ATM deployments and withdrawals ~~slow~~decrease in recent years. ~~In January 2017, we expanded our operations~~We currently operate the largest ATM network in the U.K. ~~through~~, with over 18,000 ATMs, which is over 25% of all the ATMs in the country. As a result, our ~~acquisition~~ATMs are a key part of ~~DCPayments.~~the payment infrastructure in the country, and we expect to leverage our network and capabilities as banks in this market continue to reduce their physical footprints. In light of ~~recent~~ changes to the LINK interchange rate that ~~includes~~included a 5% decrease that came into effect on July 1, 2018 and a second additional 5% decrease in the LINK interchange rate that was enacted January 1, 2019, we have changed certain of our ATMs to pay-to-use, whereby we no longer receive interchange from the customer’s ~~banks,~~bank, but instead, the customer now pays us a convenience fee. We have also removed certain ATMs from service and have taken other measures ~~such as slowing our ATM expansion.~~to mitigate the impact of this rate reduction. For additional information, see Decrease in interchange rates below. We believe there are ~~growing~~ 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 largely deployed in bank branch locations. The top four independent ATM deployers, including Cardtronics, continue to 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~~2019. We are presently the largest independent ATM deployer in Germany with ~~approximately~~over 1,500 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 recently expanded our ATM count in this market by adding new ATMs with new retail partners. Additionally, we ~~have~~ now ~~partnered~~also partner with ~~Postbank~~a major retail bank to provide free-to-use access to their customers at our ATMs.

	·
•		Canada. We entered the Canadian market in October 2011 through a small acquisition, and further expanded our presence in the country through another small acquisition in December 2012. 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~~10,000 ATMs in this market and estimate that there are currently approximately ~~70,000~~68,000 ATMs in total in the Canadian market. ~~Our recent organic growth~~We plan to grow in this market ~~has been primarily~~ through a combination of new merchant and financial institution partners. As we continue to expand our footprint in Canada, we 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 operating 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 retailers 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. Spain’s market has approximately ~~51,000~~50,000 ATMs of which we currently operate ~~a very small portion.~~approximately 1%. We plan to continue to grow in this market through additional merchant and financial institution relationships. Recently, most of our growth in this market has been driven by ATM placements in tourist locations.

	·
•		Australia and New Zealand. In January 2017, in connection with our acquisition of DCPayments, we expanded operations into Australia and New Zealand. ~~The~~Our business in Australia ~~and New Zealand ATM market~~ has ~~contracted recently responsive to~~been adversely impacted by the removal of ATM access fees by the major banks in this market to non-customers. The Australian and New Zealand ATM market is comprised of ~~approximately 35,000~~over 30,000 ATMs and we are the largest independent ATM deployer in this region with approximately ~~10,000~~9,000 ATMs. For further information regarding the removal of ATM access fees, see

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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.~~operate and partnering with financial institutions. We expect to continue to grow in this market with retailers and financial institutions. We operate approximately ~~3,500~~over 4,000 ATMs in South Africa and estimate that this market has ~~approximately 34,000~~nearly 35,000 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~~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 other networks 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~~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. During the year ended December 31, ~~2018, 20.8%~~2019, 16.6%, ~~11.1%~~10.8%, and 0.4% of our total ATM operating revenues were derived from interchange fees in Europe & Africa, North America, and Australia & New Zealand, respectively. ~~These~~A portion of these fees are subject to pricing changes that we may be unable to offset through lower payments to ~~merchants.~~

merchants and other measures.

Interchange rates in the U.K. are primarily set by LINK, the U.K.’s major interbank 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 2016 are considered for determining the 2018 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 non-LINK cards have totaled less than 3% 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 recently adversely impacted our revenues and profits in the U.K. ~~We continue to evaluate and assess the impact~~As a result of ~~interchange rate decreases on our U.K. business and~~these reductions, we have taken certain actions and may continue to take additional actions to mitigate the impact of the current and potential future price reductions. Mitigating measures have included, ~~and in~~but have not been limited to, the ~~future may include~~ removal of lower profitability sites, contract renegotiations with certain merchants and conversion of certain ATMs to a ~~direct-charge~~direct charge to the consumer model, and other strategies. The first 5% rate reduction occurred on July 1, 2018 and it adversely impacted our U.K. profits by approximately $8 million, when taken together with other rate reductions in 2018. The second anticipated 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 an incremental $19 million in 2019.model. Should there be a ~~significant~~further change in LINK scheme or its membership, our U.K. interchange revenues and profits could be adversely impacted.

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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.~~costs and remain competitive with lower-cost providers of consumer financial services. Additionally, many financial institutions are reducing the number of branches they own and operate in order to lower their operating costs. As a result of ~~these current trends,~~this industry transformation, 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~~Allpoint, allows financial institutions and providers of consumer financial services to rapidly increase ~~and~~and/or 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 institution’s operating costs while extending its customer service. Furthermore, we believe there are opportunities to provide selected services on an outsourced basis, such as transaction processing services, to other independent owners and operators of ATMs. Over the last several years, we have seen increased participation in Allpoint ~~our surcharge-free network,~~ and growth in bank-branding and managed services. We ~~believe that there will be~~expect continued growth ~~in all three areas.~~

across each of these solutions.

U.S. same-store cash withdrawal transactions during the year ended December 31, ~~2018~~2019 increased approximately 6%2% from the same period in ~~2017.~~2018. These same-store results were impacted by a number of factors and the discrete impact of each factor is difficult to precisely estimate. Growth in ~~Allpoint transactions~~our surcharge-free offerings has positively impacted the same-store growth rate, driven by ~~the expansion~~increases in ~~the number~~Allpoint transactions as a result of ~~ATMs in Allpoint,~~ growth in the number of financial institutions and other providers of consumer financial services participating in the Allpoint ~~and~~network along with increased marketing efforts to existing Allpoint participants. ~~We estimate that~~Additionally, we expanded our number of branded ATM locations over the past year ~~ended December 31, 2018 was also positively impacted~~which drove additional transaction volumes. These positive increases in surcharge-free transactions were partially offset by lower surcharge transactions ~~which migrated back to our network following the removal of Allpoint from 7-Eleven stores on July 1, 2017. Finally, we believe the growth rate~~ during the year, ended December 31, 2018 was positively impacted by higher ATM availability relative to the prior year as a result of the software upgrades and outages in 2017 that negatively impacted transaction volumes during the first part of that year.

consistent with our recent experience.

7-Eleven U.S. relationship. The Company had a ~~long standing~~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 approximately 12.5% of the Company’s total revenues for the twelve months ended December 31, 2017 ~~and had~~with an incremental adjusted gross margin of approximately 40%~~, and~~. 7-Eleven in the U.S. accounted for ~~$5.7 million, or~~ less than 1% of total revenues in 2018 ~~all of which was primarily~~and none in ~~the first quarter of 2018.~~

2019.

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~~consumer’s bank. We also operate surcharging, or pay-to-use ATMs, which are now increasing in the ~~market and~~U.K. The total transaction volume from our ATM ~~estate~~operations declined by approximately 8% primarily due to lower transaction volume in the ~~LINK~~U.K. that was directly impacted by our conversion of a significant number of ATMs from free-to-use to pay-to-use and removal of over 3,000 ATMs in response to the two 5% decreases in the Link interchange rate ~~reduction discussed above. During the year ended December 31, 2018, same-store cash withdrawal transactions~~ in the ~~U.K decreased approximately 4% compared to the same period in 2017. We believe the growth rate was adversely impacted by changes~~U.K. that came into effect on July 1, 2018 and January 1, 2019. Changes in consumer payments behavior ~~where consumers are conducting~~including consumers' use of more ~~tap~~contactless debit and ~~pay~~credit transactions for small payments at ~~retailers.~~

retailers also impacted our transaction volume in the U.K.

Australia market changes and asset impairment. In ~~late~~ 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 to all users on domestic ATM transactions ~~completed at~~on 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~~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.

The removal of direct charges by Australia’s four largest banks was expected to be and has been particularly impactful as Australia ~~has historically been~~is a direct charge ATM market, where cardholders ~~have paid~~pay a fee (or “direct charge”) to the operator of an ATM for each transaction, unless the ATM, where the transaction was completed, ~~was~~is part of the cardholder’s issuing bank ATM network. There is no broad interchange arrangement or any other arrangement in Australia between card issuers and

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ATM operators to compensate the ATM operator for its service to a financial institution’s cardholder in ~~absence~~lieu of the direct charge being levied to the cardholders. During the year ended December 31, 2018, approximately 77% 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 have 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 ultimateThe impact of ~~this action~~these banks’ actions could increase or change over time as consumers’ behavior patterns change as a result of the introduction of aan effective free-to-use ATM network 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.

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. In 2018, only strategic ATMs were purchased due to the availability of ATMs removed from 7-Eleven locations.. Our capital spending in 2019 and 2018 was driven by the following: (i) our strategic initiatives to enhance the consumer experience at our ATMs and drive transaction growth, including the roll-out of deposit-taking ATMs in select markets within the U.S., (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.

Our capital investments in 2017 included significant expenditures to upgrade and replace ATMs at certain locations in response to certain changes in network operating rules largely related to the acceptance of chip-enabled cards at our U.S. ATMs

U.K. ~~planned~~ exit from the European Union (“Brexit”).On ~~March 29, 2017,~~January 31, 2020, the U.K. ~~government officially triggered Article 50 of the Treaty on~~exited the European Union ~~which commenced the process for the U.K. to exit the European Union. Although the~~into a transition period extending through December 2020. The ultimate impact of Brexit on our business is unknown, therefore, we continue to monitor the ~~negotiation of a withdrawal agreement and of a future~~ relationship between the ~~European Union~~EU and the U.K., see Part 1. Item 1A. Risk Factors The exit of the U.K. ~~is scheduled to exit~~from the European Union ~~on March 29, 2019 subject to a transition period presently extending through December 2020. The British government~~could adversely affect us and the European Union have negotiated a withdrawal agreement and the European Union has approved that agreement, but the British Parliament has not. As a result, there remains considerable uncertainty associated with the withdrawal. Failure to obtain parliamentary approval of the negotiated withdrawal agreement would mean that the U.K. would leave the European Union with no agreement (a so-called “hard Brexit”). The consequences for the economies of the European Union and the U.K. are unknown and unpredictable, especially in the case of a hard Brexit.

our shareholders.

Dynamic Currency Conversion. On September 27, 2018, Visa notified its members that it will allow DCC on international ATM transactions globally effective April 13, 2019. We expect that this rule change will allow us to expand our DCC offerings and enable additional revenue opportunities in certain of our markets. On March 28, 2018, the European Commission published a proposal to amend European Union regulations applicable to DCC charges. The European Commission ~~has proposed~~now requires additional transparency and price comparability requirements on DCC transactions ~~that, if enacted by the European Parliament, would~~to be ~~developed by the European Banking Authority.~~implemented between April 2020 and April 2021. Our DCC revenues currently account for approximately 2%4% of our total revenues, the majority of which relate to our U.K. operations. With the timing of Brexit scheduled to precede the proposed effective date of regulation, 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 European Unions 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, we initiated a global~~2019, the Company continued the corporate reorganization and cost reduction ~~initiative (the “Restructuring Plan”), intended~~initiatives that began in 2017 to improve ~~our~~the Company's cost structure and operating ~~efficiency. The Restructuring Plan included workforce reductions, facilities closures, contract terminations,~~efficiency (the "Restructuring Plan"). During the years ended December 31, 2019, 2018, and ~~other cost reduction measures. We~~2017, the Company incurred $8.9 million, $6.6 million and $10.4 million, respectively, of pre-tax expenses related to ~~our~~the Restructuring ~~Plan during the year ended December 31, 2017. During the year ended December 31, 2018, we~~Plan. Our restructuring activities included workforce reductions, costs incurred ~~$6.6 million of pre-tax expenses~~ in ~~an effort to continue our cost reduction initiative. These costs consisted of employee severance,~~conjunction with facilities closures, professional fees and ~~to a lesser extent exit costs~~other related ~~to certain facilities.~~

charges.

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Next generation ~~bank note~~banknote upgrade in Australia. Next generation ~~bank notes~~banknotes 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, with the~~2018. The new $20 note ~~to follow~~was recently introduced on ~~a date to~~October 9, 2019 and we expect that the new $100 will be ~~determined.~~issued in October 2020. The introduction of these next generation ~~bank notes~~banknotes has required upgrades to software and physical ATM components on our ATMs in Australia.

~~U.S. Tax Reform. On December 22, 2017, House~~

Payments legislation. We monitor active and potential legislative activity across all 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.~~our markets. Recently, some well-known retailers attempted to operate ‘cashless’ stores whereby consumers would be unable to buy goods or services with physical cash. In ~~accordance with generally accepted accounting principles in~~response to these retailer initiatives, several jurisdictions across the U.S. ~~(“U.S. GAAP” or “GAAP”),~~introduced and passed legislation to effectively require cash as a legal tender payment form for most consumer purchases at physical retail locations. Additional legislation at the ~~effects~~local, state, and federal levels has been proposed and are currently in various stages. We are actively supporting the legislative efforts to ensure cash remains a widely available choice for consumers’ payment activities. We believe and have heard from many political representatives and key regulators that cash should be supported on behalf of ~~changes in tax rates~~their constituent consumers, who value the choice, privacy, security, convenience, reliability and ~~laws are recognized in the period in which the new legislation is enacted. As a result~~other key attributes of this legislation, during the three months ended December 31, 2017, we provisionally recognized one-time net tax benefits totaling $11.6 million. This amount included an estimated one-time tax benefit of $19.4 million due to the re-measurement of our net deferred tax liabilities, primarily related to the change in the U.S. federal corporate income tax rate from 35% to 21%. Partially offsetting this non-cash book tax benefit, we recognized during the three months ended December 31, 2017, an estimated one-time tax expense of $7.8 million on our accumulated undistributed foreign earnings pertaining to foreign operations under our U.S. business. In accordance with SEC Accounting Bulletin No.118 during the twelve months ended December 31, 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.

cash.

Acquisitions.On January 6, 2017, we completed the acquisition of DCPayments, a leading operator of approximately 25,000 ATMs with operations in Australia, Canada, Mexico, New Zealand ~~Canada,~~and 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~~that now exceeds 4,000 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~~agreed-upon earnings targets in 2019 and 2020 to be paid in 2020 and 2021, respectively.

~~For additional information related to the acquisitions above, see~~ ~~Item 8. Financial Statements and Supplementary Data, Note 4. Acquisitions.~~

Cybersecurity trends. We electronically process and transmit limited cardholder information as part of our transaction processing services. Companies that process and transmit cardholder information, such as ~~ours,~~ourselves, 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 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.For further discussion of the risks we face in connection with growing cybersecurity trends, see Part 1. Item 1A. Risk Factors Security breaches, including the occurrence of a cyber-incident or a deficiency in our cybersecurity, could harm our business by compromising Company, merchant or vendor data, or cardholder information and disrupting our transaction processing services, thus damaging our relationships with our merchant customers, business partners, and generally exposing us to liability. Computer viruses or unauthorized software (malware) could harm our business by disrupting or disabling our systems, including transaction processing services, causing ~~noncompliance~~non-compliance with network rules, damaging our relationships with our merchant and financial institution customers, and damaging our reputation causing a decrease in transactions by individual cardholders.

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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 fluctuations of the currencies in the markets in which we operate relative to the U.S. dollar caused our reported total revenues to be ~~higher~~lower by approximately ~~$10.7~~$30.1 million, or ~~0.8%~~2.2%, for the year ended December 31, ~~2018~~2019 as compared to the prior year.

	·
•		Acquisitions.The results of operations for any acquired entities during a particular year have been included in our consolidated financial statements for that year since the respective dates of acquisition. Similarly, the results of operations for any divested operations have been excluded from our consolidated financial statements since the dates of divestiture.

	·
•		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 approximately 12.5% of total revenues for the year ended ~~2017. 7-Eleven in the U.S accounted for $5.7 million, or~~2017 and less than 1% of total revenues in ~~2018.~~ 2018 and none in 2019.

Components of Revenues, Cost of Revenues, and Expenses

Revenues

We derive our revenues primarily from providing ATM and automated consumer financial services, bank-branding, surcharge-free network offerings, and sales and services of ATM equipment. We currently classify revenues into two primary categories: (i) ATM operating revenues and (ii) ATM product sales and other revenues.

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. When customer contracts provide for up-front fees that do not pertain to a distinct performance obligation, the 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.~~We present~~ The Company presents revenues from ~~ATM and~~ automated consumer financial services, bank-branding ~~arrangements,~~and surcharge-free network offerings, managed services and ~~managed~~other services in the ATM operating revenues line in the accompanying Consolidated Statements of Operations. These revenues include the fees we earn per transaction on our ATMs, fees we earn from bank-branding arrangements and our surcharge-free network offerings, fees we earn on managed services arrangements, and fees earned from providing certain ATM management services.

The Company’s ATM operating revenues ~~primarily~~ consist of the ~~four following components: (i) surcharge revenue, (ii) interchange revenue, (iii) bank-branding and surcharge-free network revenue, and (iv) managed services and processing revenue.~~

following:

	·
•		Surcharge ~~revenue.~~ 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 ~~our~~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 ~~(surcharging)~~(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. The Company earns both surcharge and interchange in Spain. In Germany, Australia, ~~& New Zealand,~~ and 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

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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 ~~variable terms~~various arrangements and are recognized daily as the associated transactions are processed.

	·
•		Bank-branding and surcharge-free network revenues.Under a bank-branding arrangement, ~~certain~~ ATMs that are ~~owned~~Company-owned and operated ~~by us~~ are branded with the logo of the branding financial institution. ~~The~~In exchange for a fee paid by the financial institution, the financial institution’s customers ~~have~~gain access to use ~~those~~these bank-branded ~~ATM’s~~ATMs without paying a surcharge fee. Under the Company’s Allpoint surcharge-free network, ~~arrangements,~~ financial institutions that participate pay ~~either~~ a fixed monthly fee per cardholder and/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.

~~Under Allpoint, financial institutions that participate~~

The Company’s bank-branding, surcharge-free network and managed services arrangements result in the ~~network pay us either~~Company providing a ~~fixed monthly fee per cardholder or a fixed fee per transaction in exchange for us providing their cardholders with surcharge-free ATM access to our large network~~series of ~~ATMs. These fees are meant to compensate us for~~distinct services that have the ~~lack~~same pattern of surcharge revenues. Although we forego surcharge revenues on those transactions, we continue to earn interchange revenues at a per transaction rate that is usually set by Allpoint. Allpoint also works with financial institutions that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, including general purpose, payroll, and benefit cards. Under these programs, the issuing financial institutions pay Allpoint a fee per issued stored-value debit card or per transaction in return for allowing the users of those cards surcharge-free accesstransfer to the ~~Allpoint’s participating ATM network.~~

~~The interchange fees paid~~customer. As a result, these arrangements create performance obligations that are satisfied over-time, (generally 3-5 years), for which the Company has a right to ~~us by both our bank-branding~~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 ~~Allpoint customers are earned on~~is recognized only to the extent a ~~per transaction basis and are included within the interchange revenue category.~~

significant reversal is not probable.

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

~~Other revenue~~. Other revenues include ATM operating revenues from transaction processing for third-party ATM operators. The Company also earns ATM operating revenues related to advertising and other services. The Company typically recognizes these revenues as the related services are provided.

The following table presents the components of our total ATM operating revenues:

Year Ended

December 31,

2018

2017

2016
Surcharge revenue

44.1
%

45.7
%

40.1
%
Interchange revenue

32.4

32.7

37.3

Bank-branding and surcharge-free network revenues

13.9

13.2

15.7

Other revenues, including managed services

9.6

8.4

6.9

Total ATM operating revenues

100.0
%

100.0
%

100.0
%



	Year Ended December 31,
	2019		2018
Surcharge revenue	46.4	%	44.1	%
Interchange revenue	27.8		32.4
Bank-branding and surcharge-free network revenues	15.8		13.9
Managed services and processing revenues	10.0		9.6
Total ATM operating revenues	100.0	%	100.0	%

ATM product sales and other revenues.The Company presents revenues from other product sales and services in the ATM product sales and ~~services~~other revenues line in the accompanying Consolidated Statements of Operations.

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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 ownership of the equipment is ~~delivered~~transferred 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 ownership of the equipment is ~~delivered~~transferred to the VAR.

Cost of Revenues

Our cost of revenues primarily consist of the costs directly associated with the transactions completed on our network of ATMs. These costs include merchant commissions, vault cash rental expense, other costs of cash, repairs and maintenance expense, communications expense, transaction processing fees, and direct operations expense. To a lesser extent, cost of revenues also includes those costs associated with the sales of ATMs and ATM-related equipment and providing certain services to third-parties. The following is a description of our primary cost of revenues categories:

	·
•		Merchant commissions.We pay our merchants a fee for allowing us an exclusive right to place our ATM at their location. The fee amount depends on a variety of factors, including the type of arrangement under which the ATM is placed, the type of location, and the number of transactions on that ATM.

	·
•		Vault cash rental expense.We pay monthly fees to our vault cash providers for renting the vault cash that is maintained in our ATMs. The fees we pay under our arrangements with our vault cash providers are based on market rates of interest; therefore, changes in the general level of interest rates affect our cost of cash. In order to limit our exposure to increases in interest rates, we have entered into a number of interest rate derivatives of varying notional amounts through ~~2023~~2024 for our current and anticipated outstanding vault cash rental obligations. This cost category also includes the income/expense realized from interest rate derivatives designated as hedges of our vault cash rental expense.

	·
•		Other costs of cash.Other costs of cash includes all costs associated with the provision of cash for our ATMs except for vault cash rental expense, including third-party armored courier services, cash insurance, reconciliation of ATM cash balances, associated bank fees, and other costs. This category excludes the cost of our wholly-owned cash delivery operation in the U.K., as those costs are reported in the Other expenses line described below.

	·
•		Repairs and maintenance.Depending on the type of arrangement with the merchant, we may be responsible for first and/or ~~second line~~second-line maintenance for the ATM. In most of our markets, we generally use third-parties with national operations to provide these services. In the U.K., Australia, Canada, and South Africa, we also maintain in-house technicians to service our ATMs and those costs are reported in the Other expenses line described below.

	·
•		Communications.Under our Company-owned arrangements, we are usually responsible for the expenses associated with providing telecommunications capabilities to the ATMs allowing them to connect with the applicable EFT networks.

	·
•		Transaction processing.We own and operate EFT transaction processing platforms, through which the majority of our ATMs are driven and monitored. We also utilize third-party processors to gateway certain transactions to the EFT networks for authorization by the cardholders’ financial institutions and to settle transactions. As a result of our past acquisitions, we have inherited transaction processing contracts with certain third-party providers that have varying lengths of remaining contractual terms. Over the next few years, we plan to convert the majority of our ATMs currently operating under these contracts to our own EFT transaction processing platforms.

	·
•		Other expenses.Other expenses primarily consist of direct operations expenses, which are costs associated with managing our ATM network, including expenses for monitoring the ATMs, program managers, technicians, cash ordering and ~~forecasting personnel, cash-in-transit and maintenance engineers (principally in the U.K., Canada, and Australia), and customer service representatives.~~

forecasting personnel, cash-in-transit and maintenance engineers (principally in the U.K., Canada, and Australia), and customer service representatives.

	·
•		Cost of ATM product sales.In connection with the sale of ATM and ATM-related equipment to merchants and distributors, we incur costs associated with purchasing the ATM equipment from manufacturers, as well as

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delivery and installation expenses. Additionally, this category includes costs related to providing maintenance services to third-party customers in the U.K.

The following table presents the components of our total cost of ATM operating revenues:

Year Ended

December 31,

2018

2017

2016
Merchant commissions

48.6
%

50.3
%

47.3
%
Vault cash rental

8.3

8.1

9.3

Other costs of cash

10.6

10.0

10.3

Repairs and maintenance

8.1

8.7

9.7

Communications

3.7

4.0

4.1

Transaction processing

2.4

2.4

2.1

Stock-based compensation

0.1

0.1

0.1

Employee costs

10.0

8.4

8.7

Other expenses

8.2

8.0

8.4

Total cost of ATM operating revenues

100.0
%

100.0
%

100.0
%



	Year Ended December 31,
	2019		2018
Merchant commissions	47.0	%	48.6	%
Vault cash rental	8.5		8.3
Other costs of cash	11.0		10.6
Repairs and maintenance	8.9		8.1
Communications	3.2		3.7
Transaction processing	2.8		2.4
Employee costs	9.6		10.0
Other expenses	9.0		8.3
Total cost of ATM operating revenues	100.0	%	100.0	%

We define variable costs as those that vary based on transaction levels. The majority of Merchant commissions, Vault cash rental expense, and Other costs of cash fall under this category. The other categories of Cost of ATM operating revenues are mostly fixed in nature, meaning that any significant decrease in transaction volumes would lead to a decrease in the profitability of our operations, unless there was an offsetting increase in ~~per transaction~~per-transaction revenues or decrease in our fixed costs. Although the majority of our operating costs are variable in nature, an increase in transaction volumes may lead to an increase in the profitability of our operations due to the economies of scale obtained through increased leveraging of our fixed costs and incremental preferential pricing obtained from our vendors. We exclude depreciation, accretion, and amortization of intangible assets related to ATMs and ATM-related assets from our Cost of ATM operating revenues line item in the accompanying Consolidated Statements of Operations.

The profitability of any particular location and of our entire ATM operation is attributable to a combination of surcharge, interchange, bank-branding and surcharge-free network revenues, and managed services revenues, as well as the level of our related costs.

Other operating expenses

Our Other operating expenses include selling, general, and administrative expenses related to salaries, benefits, advertising and marketing, professional services, and overhead. Acquisition related expenses, redomicile-related expenses, restructuring expenses, depreciation and accretion expense, amortization of our acquired merchant and bank-branding contracts/relationships, and other amortizable intangible assets are also components of our Other operating expenses. We depreciate our ATMs and ATM-related equipment on a straight-line basis over the estimated life of such equipment and amortize the value of acquired intangible assets over the estimated lives of such assets.

~~Table of Contents~~

Results of Operations

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

Year Ended

December 31,

2018


2017

2016

(In thousands, excluding percentages)
Revenues:

ATM operating revenues

$
1,292,930
96.1
%

$
1,451,372
96.3
%

$
1,212,863
95.9
%
ATM product sales and other revenues

52,313
3.9

56,227
3.7

52,501
4.1

Total revenues (1)

1,345,243
100.0

1,507,599
100.0

1,265,364
100.0

Cost of revenues:

Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below.

855,948
63.6

951,670
63.1

768,200
60.7

Cost of ATM product sales and other revenues

41,835
3.1

47,450
3.1

45,887
3.6

Total cost of revenues

897,783
66.7

999,120
66.3

814,087
64.3

Operating expenses:

Selling, general, and administrative expenses (3)

170,490
12.7

174,237
11.6

153,782
12.2

Redomicile-related expenses

—
—

782
0.1

13,747
1.1

Restructuring expenses

6,586
0.5

10,354
0.7

—
—

Acquisition related expenses

3,191
0.2

18,917
1.3

9,513
0.8

Goodwill and intangible asset impairment

—
—

194,521
12.9

—
—

Depreciation and accretion expense

126,199
9.4

122,036
8.1

90,953
7.2

Amortization of intangible assets

52,911
3.9

57,866
3.8

36,822
2.9

Loss on disposal and impairment of assets

17,873
1.3

33,275
2.2

81
0.0

Total operating expenses

377,250
28.0

611,988
40.6

304,898
24.1

Income (loss) from operations

70,210
5.2

(103,509)
(6.9)

146,379
11.6

Other expenses:

Interest expense, net

35,429
2.6

35,036
2.3

17,360
1.4

Amortization of deferred financing costs and note discount

14,887
1.1

12,574
0.8

11,529
0.9

Redemption costs for early extinguishment of debt

6,408
0.5

—
—

—
—

Other (income) expense

(627)
—

3,524
0.2

2,958
0.2

Total other expenses

56,097
4.2

51,134
3.4

31,847
2.5

Income (loss) before income taxes

14,113
1.0

(154,643)
(10.3)

114,532
9.1

Income tax expense (benefit)

10,457
0.8

(9,292)
(0.6)

26,622
2.1

Net income (loss)

3,656
0.3

(145,351)
(9.6)

87,910
6.9

Net loss attributable to noncontrolling interests

(20)
—

(1)
—

(81)
(0.0)

Net income (loss)  attributable to controlling interests and available to common shareholders

$
3,676
0.3
%

$
(145,350)
(9.6)
%

$
87,991
7.0
%



	Year Ended December 31,
	2019					2018
	(In thousands, excluding percentages)
Revenues:
ATM operating revenues	$	1,281,106		94.9	%	$	1,292,930		96.1	%
ATM product sales and other revenues	68,299			5.1		52,313			3.9
Total revenues ⁽¹⁾	1,349,405			100.0		1,345,243			100.0
Cost of revenues:
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below.) ⁽²⁾	830,359			61.5		855,948			63.6
Cost of ATM product sales and other revenues	54,620			4.0		41,835			3.1
Total cost of revenues	884,979			65.6		897,783			66.7
Operating expenses:
Selling, general, and administrative expenses ⁽³⁾	177,474			13.2		170,490			12.7
Restructuring expenses	8,928			0.7		6,586			0.5
Acquisition related expenses	—			—		3,191			0.2
Depreciation and accretion expense	130,676			9.7		126,199			9.4
Amortization of intangible assets	49,261			3.7		52,911			3.9
Loss on disposal and impairment of assets ⁽⁴⁾	11,653			0.9		17,873			1.3
Total operating expenses	377,992			28.0		377,250			28.0
Income from operations	86,434			6.4		70,210			5.2
Other expenses:
Interest expense, net	26,604			2.0		35,429			2.6
Amortization of deferred financing costs and note discount	13,447			1.0		14,887			1.1
Redemption costs for early extinguishment of debt	—			—		6,408			0.5
Other income ⁽⁵⁾	(18,404		)	(1.4	)	(627		)	—
Total other expenses	21,647			1.6		56,097			4.2
Income before income taxes	64,787			4.8		14,113			1.0
Income tax expense	16,522			1.2		10,457			0.8
Net income	48,265			3.6		3,656			0.3
Net loss attributable to noncontrolling interests	(9		)	—		(20		)	—
Net income attributable to controlling interests and available to common shareholders	$	48,274		3.6	%	$	3,676		0.3	%


(1)		Effective January 1, 2018, we adopted Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers using the modified retrospective approach. ~~Historical revenue reflects amounts previously reported. These amounts have not been restated here or in the tables that follow.~~


(2)		Excludes effects of depreciation, accretion, and amortization of intangible assets of ~~$145.7 million, $148.0~~$146.4 million and ~~$107.5~~$145.7 million for the years ended December 31, ~~2018, 2017,~~2019 and ~~2016,~~2018, respectively. See Item 8. Financial Statements and Supplementary Data, Note 1. Basis of Presentation and Summary of Significant Accounting Policies - (d) Cost of ATM Operating Revenues ~~Presentation.~~ 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 operating revenues as a percentage of total revenues by 10.8%~~, 9.8%,~~ and ~~8.5%~~10.8% for the years ended December 31, 2019 and 2018, ~~2017, and 2016,~~ respectively.


(3)		Includes share-based compensation expense of ~~$14.9 million, $13.9~~$19.5 million and ~~$20.6~~$14.9 million for the years ended December 31, 2019 and 2018, ~~2017, and 2016,~~ respectively.


(4)	The year ended December 31, 2019 includes $11.7 million of impairment and disposal losses including a goodwill impairment of $7.3 million on our Canada reporting unit. See Loss on Disposal and Impairment of Assets for additional information.

(5)

Other income includes mark-to-market gains associated with the acquisition-related contingent consideration of $21.9 million and losses of $1.9 million in the years ended December 31, 2019 and 2018, respectively. Other income also includes foreign exchange remeasurement gains and losses pertaining to the recognized acquisition-related contingent consideration liability. The Company recognized remeasurement losses of $0.5 million and $6.2 in the years ended December 31, 2019 and 2018, respectively.

~~Table of Contents~~

Key Operating Metrics

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

Year Ended

December 31,

2018

% Change

2017

Average number of transacting ATMs:

North America

44,513

(13.5)
%

51,472

Europe & Africa

24,609

(4.2)

25,678

Australia & New Zealand

7,988

(8.7)

8,752

Total Company-owned

77,110

(10.2)

85,902

North America

14,030

(7.3)

15,141

Europe & Africa

153

(75.2)

616

Australia & New Zealand

103

-

103

Total Merchant-owned

14,286

(9.9)

15,860

Average number of transacting ATMs – ATM operations

91,396

(10.2)

101,762

Managed Services and Processing:

North America

135,796

3.9

130,687

Australia & New Zealand

1,998

6.1

1,883

Average number of transacting ATMs – Managed services and processing

137,794

3.9

132,570

Total average number of transacting ATMs

229,190

(2.2)

234,332

Total transactions (in thousands):

ATM operations

1,328,971

(11.1)

1,495,586

Managed services and processing, net

1,136,188

7.4

1,057,999

Total transactions

2,465,159

(3.5)

2,553,585

Total cash withdrawal transactions (in thousands):

ATM operations

864,923

(9.6)

956,919

Per ATM per month amounts (excludes managed services and processing):

Cash withdrawal transactions

789

0.6

784

ATM operating revenues (1)

$
1,087

(1.8)

$
1,107

Cost of ATM operating revenues (1) (2)

741

0.3

739

ATM adjusted operating gross profit (1) (2)

$
346

(6.0)
%

$
368

ATM adjusted operating gross profit margin

31.8
%

33.2
%



	Year Ended December 31,
	2019	% Change		2018
Ending number of transacting ATMs:
North America	43,562	0.8	%	43,233
Europe & Africa	23,992	0.9	%	23,768
Australia & New Zealand	6,928	(8.7	)%	7,585
Total Company-owned⁽¹⁾	74,482	(0.1	)%	74,586

North America	13,621	1.6	%	13,406
Europe & Africa	232	0.4	%	231
Total Merchant-owned	13,853	1.6	%	13,637

Managed Services and Processing:
North America⁽²⁾	196,681	44.3	%	136,288
Australia & New Zealand	1,757	(15.3	)%	2,074
Ending number of transacting ATMs – Managed services and processing ⁽¹⁾	198,438	43.4	%	138,362

Total ending number of transacting ATMs	286,773	26.6	%	226,585


(1)	Company-owned ATMs that are deployed under managed services agreements are classified under Managed Services and Processing.

	~~ATM operating revenues and Cost~~
(2)	In May 2019, the Company completed the acquisition of ATM ~~operating revenues relating~~processing contracts to provide transaction processing services for approximately 62,000 ATMs. This transaction added approximately 40,000 ATMs to the average number of transacting ATMs for the year ended December 31, 2019.



	Year Ended December 31,
	2019			% Change		2018
Average number of transacting ATMs:
North America	43,388			(2.5	)%	44,513
Europe & Africa	23,875			(3.0	)%	24,609
Australia & New Zealand	7,373			(7.7	)%	7,988
Total Company-owned ⁽¹⁾	74,636			(3.2	)%	77,110

North America	13,998			(0.2	)%	14,030
Europe & Africa	241			57.5	%	153
Total Merchant-owned	14,239			0.4	%	14,183

Managed Services and Processing:
North America⁽²⁾	176,828			30.2	%	135,796
Australia & New Zealand	1,762			(16.1	)%	2,101
Average number of transacting ATMs – Managed services and processing ⁽¹⁾	178,590			29.5	%	137,897

Total average number of transacting ATMs	267,465			16.7	%	229,190

Total transactions (in thousands):
ATM operations ⁽³⁾	1,219,085			(8.3	)%	1,328,971
Managed services and processing, net	1,427,329			25.6	%	1,136,188
Total transactions	2,646,414			7.4	%	2,465,159

Total cash withdrawal transactions (in thousands):
ATM operations ⁽³⁾	807,188			(6.7	)%	864,923

Per ATM per month amounts (excludes managed services and processing):
Cash withdrawal transactions ⁽³⁾	757			(4.1	)%	789

ATM operating revenues	$	1,100		1.2	%	$	1,087
Cost of ATM operating revenues⁽⁴⁾	731			(1.3	)%	741
ATM adjusted operating gross profit ⁽⁴⁾	$	369		6.6	%	$	346

ATM adjusted operating gross profit margin	33.5		%			31.8		%


(1)	Company-owned ATMs that are deployed under managed services ~~processing, ATM equipment sales,~~agreements are classified under Managed Services and ~~other ATM-related services are not included in this calculation.~~ Processing.


(2)	In May 2019, the Company completed the acquisition of ATM processing contracts to provide transaction processing services for approximately 62,000 ATMs. This transaction added approximately 40,000 ATMs to the average number of transacting ATMs for the year ended December 31, 2019.

(3)

Total transactions from ATM operations of approximately 1.2 billion include withdrawal transactions of 807.2 million as well as other non-monetary transactions such as balance inquiries and funds transfers. The 8% decline in total transactions from ATM operations is primarily due to our U.K. ATM operations and our conversion of a significant number of ATMs from free-to-use to pay-to-use and removal of over 3,000 ATMs in response to 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. The decline in transactions is also due to our Australia & New Zealand ATM operations where in our continued response to market changes we deployed fewer ATMs and realized fewer transactions per ATM. The decline in cash withdrawal transactions per ATM is also attributable to these same factors, partially offset by increases in the number of withdrawal transactions per ATM in our U.S. business.

(4)

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 8. Financial Statements and Supplementary Data, Note 1. Basis of Presentation and Summary of Significant Accounting Policies – (d) Cost of ATM Operating Revenues Presentation.

Revenues



	Year Ended December 31,
	2019			% Change		2018
	(In thousands, excluding percentages)
North America
ATM operating revenues	$	803,955		2.1	%	$	787,514
ATM product sales and other revenues	59,559			39.6	%	42,665
North America total revenues	863,514			4.0	%	830,179
Europe & Africa
ATM operating revenues	388,091			(3.1	)%	400,391
ATM product sales and other revenues	8,229			(12.3	)%	9,379
Europe & Africa total revenues	396,320			(3.3	)%	409,770
Australia & New Zealand
ATM operating revenues	99,552			(15.0	)%	117,138
ATM product sales and other revenues	511			90.0	%	269
Australia & New Zealand total revenues	100,063			(14.8	)%	117,407

Eliminations	(10,492		)	(13.4	)%	(12,113		)

Total ATM operating revenues	1,281,106			(0.9	)%	1,292,930
Total ATM product sales and other revenues	68,299			30.6	%	52,313
Total revenues	$	1,349,405		0.3	%	$	1,345,243

~~Table of Contents~~

~~Revenues~~

Year Ended

December 31,

2018

% Change

2017

% Change

2016

(In thousands, excluding percentages)
North America

ATM operating revenues

$
786,620

(15.7)
%

$
932,962

8.3
%

$
861,339
ATM product sales and other revenues

42,665

(10.0)

47,423

0.8

47,058
North America total revenues

829,285

(15.4)

980,385

7.9

908,397
Europe & Africa

ATM operating revenues

400,391

1.1

396,229

9.5

361,967
ATM product sales and other revenues

9,379

9.0

8,603

58.1

5,443
Europe & Africa total revenues

409,770

1.2

404,832

10.2

367,410
Australia & New Zealand

ATM operating revenues

117,138

(11.6)

132,581

n/m

—
ATM product sales and other revenues

269

(18.7)

331

n/m

—
Australia & New Zealand total revenues

117,407

(11.7)

132,912

n/m

—

Eliminations

(11,219)

6.5

(10,530)

0.8

(10,443)

Total ATM operating revenues

1,292,930

(10.9)

1,451,372

19.7

1,212,863
Total ATM product sales and other revenues

52,313

(7.0)

56,227

7.1

52,501
Total revenues

$
1,345,243

(10.8)
%

$
1,507,599

19.1
%

$
1,265,364

~~Table of Contents~~

ATM operating revenues.ATM operating revenues during the years ended December 31, 2019 and 2018 ~~and 2017~~ decreased ~~$158.4~~by $11.8 million ~~and increased $238.5 million, respectively,~~ compared to the prior ~~years.~~year. The following tables detail, by segment, the changes in the various components of ATM operating revenues for the periods indicated:

Year Ended

December 31,


2018

2017

Change

% Change

(In thousands, excluding percentages)
North America

Surcharge revenues

$
359,154

$
442,271

$
(83,117)

(18.8)
%
Interchange revenues

143,803

197,042

(53,239)

(27.0)

Bank-branding and surcharge-free network revenues

179,760

191,016

(11,256)

(5.9)

Managed services revenues

50,269

49,727

542

1.1

Other revenues

53,634

52,906

728

1.4

North America total ATM operating revenues

786,620

932,962

(146,342)

(15.7)

Europe & Africa

Surcharge revenues

120,906

113,052

7,854

6.9

Interchange revenues

269,064

272,502

(3,438)

(1.3)

Other revenues

10,421

10,675

(254)

(2.4)

Europe & Africa total ATM operating revenues

400,391

396,229

4,162

1.1

Australia & New Zealand

Surcharge revenues

90,110

108,224

(18,114)

(16.7)

Interchange revenues

5,451

4,416

1,035

23.4

Bank-branding and surcharge-free network revenues

—

86

(86)

(100.0)

Managed services revenues

16,462

15,024

1,438

9.6

Other revenues

5,115

4,831

284

5.9

Australia & New Zealand total ATM operating revenues

117,138

132,581

(15,443)

(11.6)

Eliminations

(11,219)

(10,400)

(819)

7.9

Total ATM operating revenues

$
1,292,930

$
1,451,372

$
(158,442)

(10.9)
%



	Year Ended December 31,
	2019			2018			Change			% Change
	(In thousands, excluding percentages)
North America
Surcharge revenues	$	349,346		$	359,154		$	(9,808	)	(2.7	)%
Interchange revenues	138,557			143,803			(5,246		)	(3.6	)%
Bank-branding and surcharge-free network revenues	201,210			179,760			21,450			11.9	%
Managed services and processing revenues	114,842			104,797			10,045			9.6	%
North America total ATM operating revenues	803,955			787,514			16,441			2.1	%
Europe & Africa
Surcharge revenues	164,606			120,906			43,700			36.1	%
Interchange revenues	213,106			269,064			(55,958		)	(20.8	)%
Bank-branding and surcharge-free network revenues	958			—			958			n/m
Managed services and processing revenues	9,421			10,421			(1,000		)	(9.6	)%
Europe & Africa total ATM operating revenues	388,091			400,391			(12,300		)	(3.1	)%
Australia & New Zealand
Surcharge revenues	79,880			90,110			(10,230		)	(11.4	)%
Interchange revenues	4,558			5,451			(893		)	(16.4	)%
Managed services and processing revenues	15,114			21,577			(6,463		)	(30.0	)%
Australia & New Zealand total ATM operating revenues	99,552			117,138			(17,586		)	(15.0	)%
Eliminations	(10,492		)	(12,113		)	1,621			(13.4	)%
Total ATM operating revenues	$	1,281,106		$	1,292,930		$	(11,824	)	(0.9	)%

North America. During the year ended December 31, ~~2018,~~2019, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) decreased ~~$90.5~~$0.7 million compared to the prior year. The decrease was ~~attributable~~primarily due to ~~the following: (i) the decline in~~lower merchant commissions, lower communications costs, ~~across most categories~~and improved operational efficiency as a result of ~~the removal of ATMs at 7-Eleven locations~~our restructuring activities, partially offset by an increase in the U.S., (ii) improved operational efficiency, (iii) lower other cost of cash in 2018 primarily due to lower charges from networks for suspected fraudulent transactions following the EMV liability shift on the MasterCard network, and (iv) lower repairrepairs and maintenance costs ~~in 2018 compared to 2017 related primarily to the software upgrades at certain Company-owned ATMs during 2017.~~


(4)		Includes various fixed periodic payments to merchants required under our ATM placement agreements. ~~Certain of these commitments will give rise to operating lease obligations upon adoption of ASC Topic 842 – Leases which is effective January 1, 2019.~~

Critical Accounting Policies and Estimates

Our consolidated financial statements included in this ~~2018~~2019 Form 10-K have been prepared in accordance with U.S. GAAP, which requires management to make numerous estimates and assumptions. Actual results could differ from those estimates and assumptions, thus impacting our results of operations and financial position. The critical accounting policies and estimates described in this section are those that are most important to the depiction of our financial condition and results of operations and the application of which requires management’s most subjective judgments in making estimates about the effect of matters that are inherently uncertain. For additional information related to our significant accounting policies, see Item 8. Financial Statements andSupplementary Data, Note 1. Basis of Presentation and Summary of Significant Accounting Policies.

Goodwill and intangible assets.We have accounted for our acquisitions as business combinations in accordance with U.S. GAAP. Accordingly, the value of the purchase consideration for ~~any~~these acquisitions has been allocated to the assets acquired and liabilities assumed based on their respective fair values as of each acquisition date. Intangible assets that met the criteria established by U.S. GAAP for recognition apart from goodwill include acquired merchant and bank-branding contracts/relationships, trade names, technology, and the non-compete agreements entered into in connection with certain acquisitions. The excess of the purchase consideration paid in excess of~~the acquisitions over~~ the fair values of the identified assets acquired and liabilities assumed is recognized as goodwill in our consolidated financial statements.

Goodwill and other intangible assets that have indefinite useful lives are not amortized, but instead are evaluated annually for impairment, and intangible assets that have finite useful lives are amortized over their estimated useful lives. We follow U.S. GAAP for testing goodwill and other non-amortized intangible assets for impairment. In ~~2018,~~2019, we elected to perform the optional qualitative assessment allowed under U.S. GAAP to determine if it was necessary to perform a quantitative assessment. The qualitative assessment considers whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In the event that the qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we perform the quantitative assessment prescribed by the guidance where the carrying amount of the net assets associated with each applicable reporting unit is compared to the estimated fair value of such reporting unit as of the date of the test or the annual testing date, December 31, ~~2018.~~2019. For the year ended December 31, ~~2018,~~2019, we performed our annual goodwill impairment test for seven separate reporting units:

~~Table of Contents~~

(i) the U.S. operations, (ii) the U.K. operations, (iii) the Australia & New Zealand operations, (iv) the Canada operations, (v) the South Africa operations, (vi) the Germany operations, and (vii) the Mexico operations.

There was no goodwill associated with our Spain or Ireland operations as of December 31, 2019.

We evaluate our goodwill and other non-amortized intangible assets on an on-going basis considering qualitative factors. If necessary, we evaluate the recoverability of our goodwill and other non-amortized intangible assets by estimating the future discounted cash flows of the reporting units to which the goodwill and other non-amortized intangible assets relate. We use discount rates corresponding to our cost of capital, risk-adjusted as appropriate, to determine the discounted cash flows, and consider current and anticipated business trends, prospects, and other market and economic conditions when performing our evaluations. These evaluations are performed on an annual basis at a minimum, or more frequently based on the occurrence of events that might indicate a potential impairment. Examples of events that might indicate impairment include, but are not limited to, the loss of a significant contract, a material change in the terms or conditions of a significant contract, or significant decreases in revenues associated with a contract or business.

Valuation of long-lived assets.We place significant value on the installed ATMs that we own and manage in merchant locations and the related acquired merchant and bank-branding contracts/relationships. Long-lived assets, such as property and equipment and intangible assets subject to depreciation and amortization, respectively, are reviewed for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

In determining whether a particular merchant and bank-branding contract/relationship is significant enough to warrant a separate identifiable intangible asset, we analyze a number of relevant factors, including: (i) estimates of the historical cash flows from such contract/relationship prior to its acquisition, (ii) estimates regarding our ability to increase the contract/relationship’s cash flows subsequent to the acquisition through a combination of lower operating costs, the deployment of additional ATMs, and the incremental revenues from increased surcharges and/or new merchant or bank-branding contracts/relationships, and (iii) estimates regarding our ability to renew such contracts/relationships beyond their originally scheduled termination date. An individual merchant and bank-branding contract/relationship, and the related ATMs, could be impaired if the contract/relationship is terminated sooner than originally anticipated, or if there is a decline in the number of transactions related to such contract/relationship without a corresponding increase in the amount of revenue collected per transaction. A portfolio of purchased contract/relationship intangibles, including the related ATMs, could be impaired if the contract/relationship attrition rate is materially more than the rate used to estimate the portfolio’s initial value, or if there is a decline in the number of transactions associated with such portfolio without a corresponding increase in the revenue collected per transaction. Whenever events or changes in circumstances indicate that a merchant or bank-branding contract/relationship intangible asset may be impaired, we evaluate the recoverability of the intangible asset, and the related ATMs, by measuring the related carrying amounts against the estimated undiscounted future cash flows associated with the related contract/relationship or portfolio of contracts/relationships. Should the sum of the expected future net cash flows be less than the carrying values of the tangible and intangible assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying values of the ATMs and intangible assets exceeded the calculated fair value.

Income taxes. Income tax provisions are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and income before provision of income taxes and between the tax basis of assets and liabilities and their reported amounts in our consolidated financial statements. We include deferred tax assets and liabilities in our consolidated financial statements at currently enacted income tax rates. As changes in tax laws or rates are enacted, we adjust our deferred tax assets and liabilities through the income tax provision.

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. In the event we do not believe we will be able to utilize the related tax benefits associated with deferred tax assets, we record valuation allowances to reserve for the assets.

Asset retirement obligations (“ARO”).We estimate the fair value of the additions to the ARO associated with our cost to deinstall our ATMs and, in some cases, restore the ATM sites to their original conditions. ARO estimates are based on a number of assumptions, including: (i) the types of ATMs that are installed, (ii) the relative mix where the ATMs are

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installed (i.e., whether such ATMs are located in single-merchant locations or in locations associated with large, geographically-dispersed retail chains), and (iii) whether we will ultimately be required to refurbish the merchant store locations upon the removal of the related ATMs. Additionally, we are required to make estimates regarding the timing of the estimated ARO payments. We utilize a pooled approach to calculate and maintain our AROs, as opposed to a specific machine-by-machine approach, ~~by pooling the ARO of assets~~ based on the estimated deinstallation dates. We periodically evaluate the reasonableness of the ARO balance by obtaining the current machine count and updated cost estimates to deinstall ATMs.

The fair value of a liability for an ARO is recognized in the period in which it is incurred and can be reasonably estimated. ARO costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s estimated

useful life. Fair value estimates of liabilities for AROs generally involve discounted future cash flows. Periodic accretion of such liabilities due to the passage of time is recorded as ~~an operating~~depreciation and accretion expense in the consolidated financial statements.

Share-based compensation.We calculate the fair value of share-based awards to our Board and employees on the date of grant and recognize the calculated fair value, net of estimated forfeitures, as share-based compensation expense over the underlying requisite service periods of the related awards. In determining the fair value of our share-based awards, we are required to make certain assumptions and estimates, including: (i) the number of awards that may ultimately be granted to and forfeited by the recipients, (ii) the expected term of the underlying awards, and (iii) the future volatility associated with the price of our common shares. For additional information related to such estimates, and the basis for our conclusions regarding such estimates for the year ended December 31, ~~2018,~~2019, see Item 8. Financial Statements and Supplementary Data, Note 5.4. Share-Based Compensation.

Derivative financial instruments.We recognize all of our derivative instruments as assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of the derivative instruments depends on whether such instruments have been designated and qualify as part of a hedging relationship and the type of hedging relationship designated. For derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge, or a hedge of a net investment in a foreign operation. These derivatives are valued using pricing models based on significant other observable inputs (Level 2 inputs under the fair value hierarchy prescribed by U.S. GAAP), while taking into account the creditworthiness of the party that is in the liability position with respect to each trade. As of December 31, ~~2018, all~~2019, the majority of our derivative instruments were designated and qualify as cash flow hedges, and accordingly, changes in the fair values of such derivatives have been reported in Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets. We are also party to foreign currency forward contracts that are not designated as hedges for accounting purposes. The changes in the fair values of these derivatives have been reported in Other (income) expense within the accompanying Statements of Operations. Although not designated, these forward contracts are associated with planned borrowings in U.K. pounds sterling and the anticipated conversion of the U.K. pounds sterling to U.S. dollars to partially fund the repayment of our 1.00% Convertible Senior Notes Due 2020.

For additional information related to our derivative financial instruments, see Item 8. Financial Statements and Supplementary Data, Note ~~17.~~16. Derivative Financial Instruments.

Convertible Notes.We are party to various derivative instruments related to the issuance of our Convertible Notes. As of December 31, ~~2018,~~2019, all of our derivative instruments related to the Convertible Notes qualified for classification in the Shareholders’ equity line in the accompanying Consolidated Balance Sheets. We are required, however, for the remaining term of the Convertible Notes, to assess whether we continue to meet the shareholders’ equity classification requirements and if in any future period we fail to satisfy those requirements, we would need to reclassify these instruments out of Shareholders’ equity and record them as a derivative asset or liability, at which point we would be required to record any changes in fair value through earnings. For additional information related to our Convertible Notes, see Item 8. Financial Statements and Supplementary Data, Note ~~12.~~11. Long-Term Debt.

New Accounting Pronouncements

For recent accounting pronouncements, including those not yet adopted during ~~2018,~~2019, see Item 8. Financial Statementsand Supplementary Data,Note 2. New Accounting ~~Pronouncements~~.

Pronouncements.

Commitments and Contingencies

We are subject to various legal proceedings and claims arising in the ordinary course of our business. We do not expect that the outcome in any of these legal proceedings, individually or collectively, will have a material adverse financial

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or operational impact on us. For additional information related to our commitments and contingencies, see Item 8.Financial Statements and Supplementary Data, Note ~~19.~~19 . Commitments and Contingencies.

Off-Balance Sheet Arrangements

As of December 31, ~~2018,~~2019, we did not have any material off-balance sheet arrangements, as contemplated in Item 303(a)(4)(ii) of Regulation ~~S-K~~.

S-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosures about Market Risk

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.~~ facility, and foreign currency exchange risk. The following quantitative and qualitative information is provided about financial instruments to which we were a party at December 31, ~~2018,~~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”).

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As a result of the significant sensitivity surrounding our vault cash rental expense, we have entered into a number of interest rate derivative contracts 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 ~~agreement that are~~contracts currently in place in the U.S., Canada, the U.K, and Australia (as of the date of the issuance of this ~~2018~~2019 Form 10-K) are as ~~follows~~:

follows:

Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations

North America – Interest Rate Swap Contracts

Notional Amounts

Weighted Average Fixed Rate

Notional Amounts

Weighted Average Fixed Rate

U.S. $

CAD$

Term
(In millions)

(In millions)

$
1,000

2.06
%

CAD
$ 125

2.46
%

January 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



Notional Amounts U.S. $		Weighted Average Fixed Rate		Term
(In millions)
$	1,300	1.84	%	January 1, 2020 – December 31, 2020
$	1,000	1.61	%	January 1, 2021 – December 31, 2021
$	800	1.28	%	January 1, 2022 – December 31, 2022
$	400	1.11	%	January 1, 2023 – December 31, 2024
Notional Amounts CAD $		Weighted Average Fixed Rate		Term
(In millions)
C$	125	2.46	%	January 1, 2020 – December 31, 2021

North America - Interest Rate Cap Contracts

Notional Amounts

Cap Rate (1)

U.S. $

Term
(In millions)

USD
200

3.25
%

January 1, 2021 – December 31, 2023



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

¹Maximum 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.

Europe & Africa – Interest Rate Swap Contracts

Notional Amounts

Weighted Average Fixed Rate

U.K. £

Term
(In millions)

£
550

0.90
%

January 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



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

Australia & New Zealand – Interest Rate Swap Contracts

Notional Amounts
AUS $

Weighted Average
Fixed Rate

Term
(In millions)

$
35

2.98
%

January 1, 2019 – February 28, 2019
$
150

1.95
%

January 1, 2019 – December 31, 2019
$
100

1.95
%

January 1, 2020 – December 31, 2020



Notional Amounts AUS $		Weighted Average Fixed Rate		Term
(In millions)
$	140	1.59	%	January 1, 2020 – December 31, 2020
$	40	0.71	%	January 1, 2021 – December 31, 2021

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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 December 31, ~~2018~~2019 and assuming a 100 basis point increase in interest rates (in ~~millions)~~millions of USD):

North America

Average outstanding vault cash balance

$
1,704
Interest rate swap contracts fixed notional amount

(1,450)
Residual unhedged outstanding vault cash balance

$
254

Additional annual interest incurred on 100 basis point increase

$
2.54



North America
Average outstanding vault cash balance	$	1,898
Interest rate swap and cap contracts fixed notional amount	(1,095		)
Residual unhedged outstanding vault cash balance	$	803

Additional annual interest incurred on 100 basis point increase	$	8.03

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 protections will serve to reduce but not fully 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 and interest rate derivatives for the quarter ended December 31, ~~2018~~2019 and assuming a 100 basis point increase in interest rates (in millions of USD):

Europe & Africa

Average outstanding vault cash balance

$
1,149
Interest rate swap contracts fixed notional amount

(700)
Residual unhedged outstanding vault cash balance

$
449

Additional annual interest incurred on 100 basis point increase

$
4.49



Europe & Africa
Average outstanding vault cash balance	$	1,076
Interest rate swap contracts fixed notional amount	(708		)
Residual unhedged outstanding vault cash balance	$	368

Additional annual interest incurred on 100 basis point increase	$	3.68

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 and interest rate derivatives for the quarter ended December 31, ~~2018~~2019 and assuming a 100 basis point increase in interest rates (in ~~millions)~~millions of USD):

Australia

Average outstanding vault cash balance

$
240
Interest rate swap contracts fixed notional amount

(25)
Residual unhedged outstanding vault cash balance

$
215

Additional annual interest incurred on 100 basis point increase

$
2.15



Australia
Average outstanding vault cash balance	$	273
Interest rate swap contracts fixed notional amount	(103		)
Residual unhedged outstanding vault cash balance	$	170

Additional annual interest incurred on 100 basis point increase	$	1.70

As of December 31, ~~2018,~~2019, we had an asset of ~~$19.8~~$10.6 million and a liability of ~~$3.3~~$17.4 million recorded in the accompanying Consolidated Balance Sheets related to our interest rate swap and ~~foreign currency forward~~cap contracts, which represented the fair value asset or liability 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~~cap 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). The effective portion of the gain or loss on the derivative instrument is reported as a component of Accumulated other comprehensive loss, net within the accompanying

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Consolidated Balance Sheets. The effective portion 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 interest rate swap and cap contracts 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 December 31, ~~2018,~~2019, our outstanding borrowings under our revolving credit facility, which carries a floating interest rate, were ~~$259.1~~$167.2 million. To mitigate the interest rate risk associated with these borrowings, we have entered into ~~new forward-starting~~ interest rate swap contracts. These interest rate swaps have an aggregate notional amount of 8050 million U.K. pounds sterling ~~and begin January 2, 2019 decreasing to 50 million pounds on~~starting January 2, 2020 increasing to 100 million U.K. pounds sterling on January 4, 2021, terminating January 1, ~~2021.~~

2022.

Outstanding Interest Rate Derivatives Associated with Revolving Credit Facility Borrowings

Notional Amounts

Weighted Average Fixed Rate

U.K. £

Term
(In millions)

£
80

0.95
%

January 2, 2019 – January 1, 2020
£
50

0.95
%

January 2, 2020 – January 1, 2021



Notional Amounts U.K. £		Weighted Average Fixed Rate		Term
(In millions)
£	50	0.95	%	January 1, 2020 – December 31, 2020
£	100	0.64	%	January 4, 2021 – December 31, 2021

Foreign Currency Exchange Rate Risk

As a result of our operations in the U.K., Ireland, Germany, Spain, Mexico, Canada, Australia, New Zealand, and South Africa, we are exposed to market risk from changes in foreign currency exchange rates. The functional currencies of our international subsidiaries are at 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 December 31, ~~2018,~~2019, this accumulated translation loss totaled ~~$66.3~~$59.0 million compared to ~~$24.4~~$66.3 million as of December 31, ~~2017.~~

2018.

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 further 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 or checking accounts.

Our consolidated financial results were significantly impacted by changes in foreign currency exchange rates during the year ended December 31, ~~2018~~2019 compared to the prior year. Our total revenues during the year ended December 31, ~~2018~~2019 would have been higher by ~~approximately $10.7~~$30.1 million had the foreign currency exchange rates from the year ended December 31, ~~2017~~2018 remained unchanged. 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 ~~$6.1~~$4.5 million for the year ended December 31, ~~2018.~~2019. During ~~2018,~~2019, we entered into foreign currency window 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.

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~~Certain intercompany balances are~~ These foreign currency forward contracts were not designated as ~~short-term in nature. The changes in these balances related to foreign currency exchange rates have been~~hedging instruments for accounting purposes.

As of December 31, 2019, we had a liability of $7.9 million recorded in the accompanying Consolidated ~~Statements of Operations~~ ~~and we are exposed~~Balance Sheets related to our foreign currency ~~exchange~~forward contracts, which represented the fair value liability of the contracts as derivative instruments are required to be carried at fair value. These 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).

The notional amount, weighted average fixed rate, ~~risk~~and terms associated with our foreign currency window forward contracts in place (as of the date of the issuance of this 2019 Form 10-K) are 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.~~

follows:

Outstanding Undesignated Foreign Currency Derivatives

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX

		~~Page~~

	Page
Reports of Independent Registered Public Accounting Firm	71 83
Consolidated Balance Sheets as of December 31, 2019 and 2018 ~~and 2017~~	74 86
Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018, ~~2017,~~ and ~~2016~~2017	75 87
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2019, 2018, ~~2017,~~ and ~~2016~~2017	76 88
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2019, 2018, ~~2017,~~ and ~~2016~~2017	77 89
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018, ~~2017,~~ and ~~2016~~2017	78 90
Notes to Consolidated Financial Statements	79 91
1. Basis of Presentation and Summary of Significant Accounting Policies	79 91
2. New Accounting Pronouncements	87 ~~101~~
3. Revenue Recognition	90 ~~105~~
4. ~~Acquisitions~~Share-Based Compensation	93 ~~107~~
5. ~~Share-Based Compensation~~	~~108~~
6. Earnings per Share	96 ~~110~~
7.6. Related Party Transactions	97 ~~112~~
8.7. Property and Equipment, Net	97 ~~112~~
9.8. Intangible Assets	97 ~~113~~
~~10.~~9. Prepaid Expenses and Other Assets	98 ~~114~~
~~11.~~10. Accrued Liabilities	99 ~~115~~
~~12.~~11. Long-Term Debt	99 ~~115~~
~~13.~~12. Asset Retirement Obligations	119 ~~119~~
~~14.~~13. Other Liabilities	104 ~~120~~
~~15.~~14. Shareholders’ Equity	104 ~~120~~
~~16.~~15. Employee Benefits	106 ~~123~~
~~17.~~16. Derivative Financial Instruments	106 ~~123~~
17. Leases	110
18. Fair Value Measurements	112 ~~127~~
19. Commitments and Contingencies	114 ~~128~~
20. Income Taxes	114 ~~129~~
21. Concentration Risk	118 ~~133~~
22. Segment Information	118 ~~133~~
23. Supplemental Guarantor Financial Information	121 ~~136~~
24. Supplemental Selected Quarterly Financial Information (Unaudited)	130 ~~143~~

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Report of Independent Registered Public Accounting Firm

To the ~~Shareholder~~Shareholders and Board of Directors

Cardtronics plc:

Opinion on Internal Control Over Financial Reporting

We have audited Cardtronics plc and subsidiaries’ (the Company) internal control over financial reporting as of December 31, ~~2018,~~2019, based on criteria established in Internal Control –- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2018,~~2019, based on criteria established in Internal Control –- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, ~~2018~~2019 and ~~2017,~~2018, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2018,~~2019, and the related notes (collectively, the consolidated financial statements), and our report dated ~~February 28, 2019~~March 2, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

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Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Houston, Texas
~~February 28, 2019~~

March 2, 2020

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Report of Independent Registered Public Accounting Firm

To the ~~Shareholder~~Shareholders and Board of Directors

Cardtronics plc:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Cardtronics plc and subsidiaries (the Company) as of December 31, ~~2018~~2019 and ~~2017,~~2018, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the ~~three-year~~three‑year period ended December 31, ~~2018,~~2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2018~~2019 and ~~2017,~~2018, and the results of its operations and its cash flows for each of the years in the ~~three-year~~three‑year period ended December 31, ~~2018,~~2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, ~~2018,~~2019, based on criteria established in Internal Control –- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated ~~February 28, 2019~~March 2, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

~~Change~~

Changes in Accounting Principle

As discussed in Notes 2 and 3 to the consolidated financial statements, the Company ~~has~~ changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases, and its method of accounting for revenue recognition in 2018 due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of sufficiency of audit evidence over revenue

As discussed in Notes 1 and 3 to the consolidated financial statements, the Company had $1,349 million in revenues for the year ended December 31, 2019, of which $594 million was related to surcharge revenues, $356 million was related to interchange revenues, $202 million was related to bank-branding and surcharge-free network revenues, and $197 million was related to other revenue streams. The Company earns these revenues across the different countries where the Company has operations, and the Company’s processes for capturing the information for revenue recognition differs between these different revenue types.

We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter. Evaluating the sufficiency of audit evidence obtained required especially subjective auditor judgment because of the different revenue streams, the related revenue recognition processes, the number of information technology (IT) applications and the dependence on third-party service providers involved in the revenue recognition processes. This included determining the revenue streams over which the procedures were performed, the nature and extent of audit evidence obtained over each revenue stream, and the need to involve IT professionals to assist with the performance of certain procedures.

The primary procedures we performed to address this critical audit matter included the following. Based on our knowledge of the Company, we applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, including the determination of the revenue streams over which those procedures were performed. For each revenue stream where procedures were performed, we:

•Tested certain internal controls over the Company’s revenue recognition process,

involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT applications that are used by the Company in its revenue recognition process, and

assessed the recorded revenue by selecting a sample of transactions and comparing the amounts recognized for consistency with the related contracts, processor statements or cash receipts.

In addition, we evaluated the overall sufficiency of the audit evidence obtained over revenue.

Assessment of the carrying value of goodwill in one reporting unit

As discussed in Notes 1 and 8 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis, or more frequently if there are indicators that suggest the fair value of a reporting unit may be below its carrying value. The goodwill balance as of December 31, 2019 was $752.6 million. During 2019, the Company performed a goodwill impairment test for each reporting unit using a qualitative approach, except for the Canada reporting unit, which was tested using the quantitative approach and subsequently recognized an impairment of $7.3 million for that reporting unit. After the impairment, the Canada reporting unit goodwill balance was $104.0 million at December 31, 2019.

We identified the assessment of the carrying value of goodwill for the Canada reporting unit as a critical audit matter. Significant auditor judgment was required to evaluate the Company’s impairment test, which was performed using a discounted cash flow model and corroborated through the use of a market approach. The discounted cash flow model included key assumptions related to financial forecasts, including operating efficiencies and resulting cash flows over time, and a discount rate. The market approach included a key assumption of market multiples. Minor changes to these key assumptions could have a significant effect on the assessment of the carrying value of the goodwill and the impairment recorded.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s goodwill impairment process, including controls related to the development of the key assumptions. We evaluated the Company’s financial forecasts, including the operating efficiencies and cash flows over time, by comparing these to internal supporting data. We compared the financial forecasts to the Company’s historical results to evaluate the assumptions used in the Company’s financial forecasts. We involved a valuation professional with specialized skills and knowledge, who assisted in:

•assessing the overall valuation methodology used by the Company in estimating the fair value of the reporting unit,

evaluating the Company’s discount rate, by comparing it against a discount rate range that was independently developed using publicly available third-party market data for comparable entities,

developing an estimate of the reporting unit’s fair value using the reporting unit’s cash flow forecast and an independently developed discount rate, and compared the results of our estimate of fair value to the Company’s fair value estimate, and

assessing the market multiple utilized in the Company’s market approach calculation by comparing it against the data for the comparable entities.

/s/ KPMG LLP

We have served as the Company’s auditor since 2001.

Houston, Texas

~~February 28, 2019~~

March 2, 2020

~~Table of Contents~~

CARDTRONICS PLC

CONSOLIDATED BALANCE SHEETS

(In thousands, excluding share and per share amounts)



	December 31, 2018		December 31, 2017		December 31, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	39,940	$	51,370	$	30,115		$	39,940
Accounts and notes receivable, net of allowance for doubtful accounts of $3,005 and $2,001 as of December 31, 2018 and December 31, 2017, respectively		75,643		105,245
Accounts and notes receivable, net of allowance for doubtful accounts of $5,251 and $3,005 as of December 31, 2019 and December 31, 2018, respectively					95,795			75,643
Inventory, net		11,392		14,283	10,618			11,392
Restricted cash		155,470		48,328	87,354			155,470
Prepaid expenses, deferred costs, and other current assets		84,386		96,106	84,639			84,386
Total current assets		366,831		315,332	308,521			366,831
Property and equipment, net of accumulated depreciation of $417,151 and $404,141 as of December 31, 2018 and December 31, 2017, respectively		460,187		497,902
Property and equipment, net of accumulated depreciation of $525,933 and $417,151 as of December 31, 2019 and December 31, 2018, respectively					461,277			460,187
Operating lease assets					76,548			—
Intangible assets, net		150,847		209,862	113,925			150,847
Goodwill		749,144		774,939	752,592			749,144
Deferred tax asset, net		8,658		6,925	13,159			8,658
Prepaid expenses, deferred costs, and other noncurrent assets		51,677		57,756	37,936			51,677
Total assets	$	1,787,344	$	1,862,716	$	1,763,958		$	1,787,344

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of other long-term liabilities	$	20,266	$	31,370	$	53,144		$	20,266
Accounts payable		39,310		44,235	46,478			39,310
Accrued liabilities		369,160		306,945	334,762			369,160
Total current liabilities		428,736		382,550	434,384			428,736
Long-term liabilities:
Long-term debt		818,485		917,721	739,475			818,485
Asset retirement obligations		54,413		59,920	55,494			54,413
Deferred tax liability, net		41,198		37,130	46,878			41,198
Operating lease liabilities					69,531			—
Other long-term liabilities		67,740		75,002	37,870			67,740
Total liabilities		1,410,572		1,472,323	1,383,632			1,410,572

Commitments and contingencies (See Note 19)

Shareholders' equity:
Ordinary shares, $0.01 nominal value; 46,134,381 and 45,696,338 issued and outstanding as of December 31, 2018 and December 31, 2017, respectively		461		457
Ordinary shares, $0.01 nominal value; 44,676,132 and 46,134,381 issued and outstanding as of December 31, 2019 and December 31, 2018, respectively					447			461
Additional paid-in capital		327,009		316,940	332,109			327,009
Accumulated other comprehensive loss, net		(66,877)		(33,595)	(77,887		)	(66,877		)
Retained earnings		116,276		106,670	125,763			116,276
Total parent shareholders' equity		376,869		390,472	380,432			376,869
Noncontrolling interests		(97)		(79)	(106		)	(97		)
Total shareholders’ equity		376,772		390,393	380,326			376,772
Total liabilities and shareholders’ equity	$	1,787,344	$	1,862,716	$	1,763,958		$	1,787,344

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

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

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

Estimated amortization for the Company’s intangible assets with definite lives as of December 31, ~~2018,~~2019, for each of the next five years and thereafter, is as follows (in thousands):

As of December 31, ~~2018,~~2019, the Company expects to reclassify ~~$4.1~~$5.8 million of net derivative-related ~~gains~~losses contained within the Accumulated comprehensive loss, net line in its accompanying Consolidated Balance Sheets into earnings during the next twelve months concurrent with the recording of the related vault cash rental expense amounts.

~~(Mark One)~~
☑
☑	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934


☐
	~~For the fiscal year ended December 31, 2018~~
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

	~~For the transition period from____ to____~~



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



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



Large accelerated filer☑	☑		Accelerated filer☐	☐	Non-accelerated filer	☐

Smaller reporting company☐		☐				Emerging growth company	☐



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

				~~Page~~

		Page
Cautionary Statement Regarding Forward-Looking Statements			3 2
PART I			5 4
Item 1.	~~Business~~		Business 4	5
Item 1A.	Risk Factors		14 14
Item 1B.	Unresolved Staff Comments		34 37
Item 2.	~~Properties~~		Properties 38	34
Item 3.	Legal Proceedings		34 38
Item 4.	Mine Safety Disclosures		34 38
PART II			35 39
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		35 39
Item 6.	Selected Financial Data		37 41
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		38 42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		66 77
Item 8.	Financial Statements and Supplementary Data		70 82
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		130 ~~144~~
Item 9A.	Controls and Procedures		130 ~~144~~
Item 9B.	Other Information		132 ~~145~~
PART III			133 ~~146~~
Item 10.	Directors, Executive Officers and Corporate Governance		133 ~~146~~
Item 11.	Executive Compensation		133 ~~146~~
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		133 ~~146~~
Item 13.	Certain Relationships and Related Transactions, and Director Independence		133 ~~146~~
Item 14.	Principal Accounting Fees and Services		133 ~~146~~
PART IV			134 ~~147~~
Item 15.	Exhibits and Financial Statement Schedules		134 ~~147~~
Item 16.	Form 10-K Summary		134 ~~147~~
Signatures			139 ~~153~~


	ATM Operations
	Company - Owned		Merchant - Owned		Subtotal		Managed Services and Processing		Total
Number of ATMs at period end	74,586		13,740		88,326		138,259		226,585
Percentage	33.0	%	6.0	%	39.0	%	61.0	%	100.0	%



	ATM Operations
	Company - Owned	Merchant -Owned, Managed Services and Processing	Total
Number of ATMs at period end	74,482	212,291	286,773
Percentage of Total ATMs	26%	74%	100%
Percentage of ATM Operating Revenue	87%	13%	100%


		12/13		12/14		12/15		12/16		12/17		12/18
Cardtronics plc	$	100.00	$	88.79	$	77.45	$	125.59	$	42.62	$	59.84
NASDAQ Composite	$	100.00	$	114.62	$	122.81	$	133.19	$	172.11	$	165.84
Peer Group	$	100.00	$	103.11	$	131.46	$	139.45	$	191.17	$	204.87


	Year Ended
	December 31,
	2018		2017		2016
Surcharge revenue	44.1	%	45.7	%	40.1	%
Interchange revenue	32.4		32.7		37.3
Bank-branding and surcharge-free network revenues	13.9		13.2		15.7
Other revenues, including managed services	9.6		8.4		6.9
Total ATM operating revenues	100.0	%	100.0	%	100.0	%


⁽¹⁾	Includes a goodwill impairment of $7.3 million on the Canada reporting unit during the year ended December 31, 2019.


⁽²⁾	Includes ~~foreign currency translation gains/losses,~~ the revaluation of the estimated acquisition related contingent consideration, foreign currency translation gains/losses and other non-operating costs.


⁽²⁾⁽³⁾		Noncontrolling interest adjustment made such that Adjusted EBITDA includes only our ownership interest in the Adjusted EBITDA of one of our Mexican subsidiaries.


⁽³⁾⁽⁴⁾		For the years ended December 31, 2019 and 2018, ~~and 2017, expenses include employee severance and other~~restructuring activities included workforce reductions, costs incurred in conjunction with ~~a corporate reorganization~~facilities closures, professional fees and cost reduction initiative. For the years ended December 31, 2017 and 2016, expenses also include amounts associated with the Company’s redomicile of its parent company to the U.K. that occurred on July 1, 2016. other related charges.


⁽⁴⁾⁽⁵⁾		Acquisition related expenses include costs incurred for professional and legal fees and certain other transition and integration-related costs. ~~Expenses include employee severance and lease termination costs related to DCPayments acquisition integration in the twelve months ended December 31, 2017.~~


⁽⁷⁾		For the years ended December 31, 2019 and 2018, ~~2017, and 2016,~~ the ~~non- GAAP~~non-GAAP tax rate used to calculate Adjusted Net Income was ~~24.1%, 27.7%,~~23.1% and ~~29.1%~~24.1%, respectively, which represents our U.S. GAAP tax rate as adjusted for the net tax effects related to the items excluded from Adjusted Net Income.



Consolidated revenue	Year Ended December 31,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
	(In thousands)
ATM operating revenues	$	1,281,106	$	29,450	$	1,310,556	$	1,292,930	(0.9	)%	1.4	%
ATM product sales and other revenues	68,299		657		68,956		52,313		30.6		31.8
Total revenues	$	1,349,405	$	30,107	$	1,379,512	$	1,345,243	0.3	%	2.5	%



North America revenue	Year Ended December 31,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
	(In thousands)
ATM operating revenues	$	803,955	$	3,069	$	807,024	$	787,514	2.1	%	2.5	%
ATM product sales and other revenues	59,559		91		59,650		42,665		39.6		39.8
Total revenues	$	863,514	$	3,160	$	866,674	$	830,179	4.0	%	4.4	%



Europe & Africa revenue	Year Ended December 31,
	2019						2018		% Change
	U. S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
	(In thousands)
ATM operating revenues	$	388,091	$	18,914	$	407,005	$	400,390	(3.1	)%	1.7	%
ATM product sales and other revenues	8,229		496		8,725		9,379		(12.3	)	(7.0	)
Total revenues	$	396,320	$	19,410	$	415,730	$	409,769	(3.3	)%	1.5	%



Australia & New Zealand revenue	Year Ended December 31,
	2019						2018		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
	(In thousands)
ATM operating revenues	$	99,552	$	7,466	$	107,018	$	117,138	(15.0	)%	(8.6	)%
ATM product sales and other revenues	511		41		552		269		90.0		105.2
Total revenues	$	100,063	$	7,507	$	107,570	$	117,407	(14.8	)%	(8.4	)%


(1)		As reported on 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.


(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.


(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.


	Payments Due by Period
	2019		2020		2021		2022		2023		Thereafter		Total
	(In thousands)
Long-term debt obligations:
Principal (1)	$	—	$	287,500	$	—	$	—	$	259,081	$	300,000	$	846,581
Interest (2)		26,598		26,598		26,358		23,723		23,121		27,500		153,898
Operating leases (3)		8,023		8,899		8,798		7,224		6,284		37,967		77,195
Merchant obligations (4)		28,567		20,861		16,192		5,857		2,239		1,255		74,971
Minimum service contracts		2,000		1,365		1,236		884		884		3,535		9,904
Open purchase orders		12,974		—		—		—		—		—		12,974
Total contractual obligations	$	78,162	$	345,223	$	52,584	$	37,688	$	291,609	$	370,257	$	1,175,523


(1)		Represents the $287.5 million face value of our Convertible Notes, ~~$259.1~~$167.2 million outstanding under our revolving credit facility, and $300.0 million face value of our 2025 Notes.


(2)		Represents the estimated interest payments associated with our long-term debt outstanding as of December 31, ~~2018,~~2019, assuming current interest rates and ~~consistent~~the amount of debt outstanding ~~over~~in the periods indicated in the table above.


(3)		Our operating lease obligations increased during ~~2018~~2019 due to our entry into new and amended long-term facilities leases.


Notional Amounts		Weighted Average Fixed Rate		Notional Amounts		Weighted Average Fixed Rate
U.S. $				CAD$				Term
(In millions)				(In millions)
$	1,000	2.06	%	CAD	$ 125	2.46	%	January 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


Notional Amounts		Weighted Average Fixed Rate
U.K. £				Term
(In millions)
£	550	0.90	%	January 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


North America
Average outstanding vault cash balance	$	1,704
Interest rate swap contracts fixed notional amount		(1,450)
Residual unhedged outstanding vault cash balance	$	254

Additional annual interest incurred on 100 basis point increase	$	2.54


Europe & Africa
Average outstanding vault cash balance	$	1,149
Interest rate swap contracts fixed notional amount		(700)
Residual unhedged outstanding vault cash balance	$	449

Additional annual interest incurred on 100 basis point increase	$	4.49


						Accumulated
				Additional		Other										Common Shares					Additional Paid-In Capital				Accumulated Other Comprehensive Loss, Net				Retained Earnings				Noncontrolling Interests
	Common Shares			Paid-In		Comprehensive		Retained		Treasury		Noncontrolling				Shares		Amount							Accumulated Other Comprehensive Loss, Net			Total					Noncontrolling Interests
	Shares	Amount		Capital		Loss, Net		Earnings		Shares		Interests		Total
Balance as of January 1, 2016	44,954	$	5	$	374,564	$	(88,126)	$	185,897	$	(102,566)	$	19	$	369,793
Issuance of common shares for share-based compensation, net of forfeitures	500		—		450		—		—		—		—		450
Repurchase of common shares	(128)		—		—		—		—		(3,959)		—		(3,959)
Share-based compensation expense	—		—		21,430		—		—		—		—		21,430
Additional tax benefit related to share-based compensation	—		—		338		—		—		—		—		338
Unrealized gain on interest rate swap contracts, net of deferred income tax expense of $12,228	—		—		—		15,990		—		—		—		15,990
Net income attributable to controlling interests	—		—		—		—		87,991		—		—		87,991
Net loss attributable to noncontrolling interests	—		—		—		—		—		—		(81)		(81)
Foreign currency translation adjustments, net of deferred income tax (benefit) of $(2,548)	—		—		—		(34,999)		—		—		(18)		(35,017)
Change in common shares, treasury shares, and additional paid-in capital associated with the Redomicile Transaction	—		448		(85,741)		—		(21,232)		106,525		—		—
Balance as of December 31, 2016	45,326	$	453	$	311,041	$	(107,135)	$	252,656	$	—	$	(80)	$	456,935
Balance as of January 1, 2017																45,326		$	453		Additional Paid-In Capital			$	311,041			$	Retained Earnings		(107,135	)		$	252,656		$	(80	)	$	456,935
Issuance of common shares for share-based compensation, net of forfeitures	370		4		104		—		—		—		—		108	370		4			104				—				—				—			108
Share-based compensation expense	—		—		14,375		—		—		—		—		14,375	—		—			14,375				—				—				—			14,375
Tax payments related to share-based compensation	—		—		(8,580)		—		—		—		—		(8,580)	—		—			(8,580		)		—				—				—			(8,580		)
Unrealized gain on interest rate swap and foreign currency forward contracts, net of deferred income tax expense of $7,050	—		—		—		17,029		(636)		—		—		16,393
Net income attributable to controlling interests	—		—		—		—		(145,350)		—		—		(145,350)
Unrealized gain (loss) on interest rate swap and foreign currency forward contracts, net of deferred income tax expense of $7,050																—		—			—				17,029				(636		)		—			16,393
Net loss attributable to controlling interests																—		—			—				—				(145,350		)		—			(145,350		)
Net loss attributable to noncontrolling interests	—		—		—		—		—		—		(1)		(1)	—		—			—				—				—				(1		)	(1		)
Foreign currency translation adjustments, net of deferred income tax (benefit) of $(1,226)	—		—		—		56,511		—		—		2		56,513
Foreign currency translation adjustments, net of deferred income tax benefit of $1,226																—		—			—				56,511				—				2			56,513
Balance as of December 31, 2017	45,696	$	457	$	316,940	$	(33,595)	$	106,670	$	—	$	(79)	$	390,393	45,696		$	457		$	316,940			$	(33,595	)		$	106,670			$	(79	)	$	390,393
Cumulative effect of change in accounting principle	—		—		—		—		5,930		—		—		5,930	—		—			—				—				5,930				—			5,930
Issuance of common shares for share-based compensation, net of forfeitures	438		4		—		—		—		—		—		4	438		4			—				—				—				—			4
Share-based compensation expense	—		—		15,660		—		—		—		—		15,660	—		—			15,660				—				—				—			15,660
Tax payments related to share-based compensation	—		—		(5,591)		—		—		—		—		(5,591)	—		—			(5,591		)		—				—				—			(5,591		)
Unrealized gain on interest rate swap and foreign currency forward contracts, net of deferred income tax expense of $2,795	—		—		—		8,656		—		—		—		8,656
Unrealized gain on interest rate swap and cap contracts, net of deferred income tax expense of $2,795																—		—			—				8,656				—				—			8,656
Net income attributable to controlling interests	—		—		—		—		3,676		—		—		3,676	—		—			—				—				3,676				—			3,676
Net loss attributable to noncontrolling interests	—		—		—		—		—		—		(20)		(20)	—		—			—				—				—				(20		)	(20		)
Foreign currency translation adjustments, net of deferred income tax (benefit) of $107	—		—		—		(41,938)		—		—		2		(41,936)
Foreign currency translation adjustments, net of deferred income tax expense of $107																—		—			—				(41,938		)		—				2			(41,936		)
Balance as of December 31, 2018	46,134	$	461	$	327,009	$	(66,877)	$	116,276	$	—	$	(97)	$	376,772	46,134		$	461		$	327,009			$	(66,877	)		$	116,276			$	(97	)	$	376,772
Cumulative effect of change in accounting principle																—		—			—				368				(368		)		—			—
Issuance of common shares for share-based compensation, net of forfeitures																274		3			—				—				—				—			3
Repurchase of common shares																(1,732	)	(17		)	(11,812		)		—				(38,423		)		—			(50,252		)
Share-based compensation expense																—		—			20,962				—				—				—			20,962
Tax payments related to share-based compensation																—		—			(4,050		)		—				—				—			(4,050		)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $4,839																—		—			—				(18,547		)		1				—			(18,546		)
Net income attributable to controlling interests																—		—			—				—				48,274				—			48,274
Net loss attributable to noncontrolling interests																—		—			—				—				—				(9		)	(9		)
Foreign currency translation adjustments, net of deferred income tax benefit of $242																—		—			—				7,169				3				—			7,172
Balance as of December 31, 2019																44,676		$	447		$	332,109			$	(77,887	)		$	125,763			$	(106	)	$	380,326


	As of December 31, 2018
	North America		Europe & Africa		Corporate		Total
	(In thousands)
Accrued liabilities	$	—	$	373	$	1,018	$	1,391
Other long-term liabilities		—		140		—		140
Total restructuring liabilities	$	—	$	513	$	1,018	$	1,531

Notional Amount U.S. $

Weighted Average Fixed Rate U.S. $/U.K. £

Settlement Dates

(In millions)

November 2, 2020 – December 1, 2020