UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑

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

For the quarterly period ended

~~March 31,~~June 30, 2020

☐

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

For the transition period from to

Commission File Number: 001-37820

Cardtronics plc

(Exact name of registrant as specified in its charter)


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


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

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


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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

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

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Shares outstanding as of ~~May 6,~~August 4, 2020: ~~44,463,034~~44,476,906 Ordinary shares, nominal value $0.01 per share.

Table of ~~Conte~~n t sContents

CARDTRONICS PLC

TABLE OF CONTENTS


			Page

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of ~~March 31,~~June 30, 2020 (unaudited) and December 31, 2019	3
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended ~~March~~ 3 1 ~~, 20~~20 June 30, 2020 and 20 1 92019	4
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended ~~March~~ 3 1 ~~, 20~~20 June 30, 2020 and 20 192019	5
	Unaudited Consolidated Statements of Shareholders' Equity for the Three and Six Months Ended ~~March~~ 3 1 20 20 June 30, 2020 and 20 192019	6
	Unaudited Consolidated Statements of Cash Flows for the Three and Six Months Ended ~~March~~ 3 1 ~~, 20~~20 June 30, 2020 and ~~201~~9 2019	78
	Notes to Unaudited Condensed Consolidated Financial Statements	89
	Cautionary Statement Regarding Forward-Looking Statements	4046
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4248
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6071
Item 4.	Controls and Procedures	6474

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	6576
Item 1A.	Risk Factors	6576
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6677
Item 3.	Defaults Upon Senior Securities	6677
Item 4.	Mine Safety Disclosures	6677
Item 5.	Other Information	6678
Item 6.	Exhibits	6779
	Signatures	6880

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

Table of ~~Conte~~n t sContents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CARDTRONICS PLC

CONSOLIDATED BALANCE SHEETS

(In thousands, excluding share and per share amounts)


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	613,728	$	30,115	Cash and cash equivalents	$	211,292	$	30,115
Accounts and notes receivable	Accounts and notes receivable	94,951		101,046		Accounts and notes receivable	86,870		101,046
Less: Allowance for credit losses	Less: Allowance for credit losses	(8,051)		(5,251)		Less: Allowance for credit losses	(7,988)		(5,251)
Accounts and notes receivable, net	Accounts and notes receivable, net	86,900		95,795		Accounts and notes receivable, net	78,882		95,795
Inventory, net	Inventory, net	11,394		10,618		Inventory, net	10,869		10,618
Restricted Cash	Restricted Cash	44,796		87,354		Restricted Cash	84,372		87,354
Prepaid expenses, deferred costs, and other current assets	Prepaid expenses, deferred costs, and other current assets	93,162		84,639		Prepaid expenses, deferred costs, and other current assets	85,960		84,639
Total current assets	Total current assets	849,980		308,521		Total current assets	471,375		308,521
Property and equipment, net of accumulated depreciation of $531,938 and $525,933 as of March 31, 2020 and December 31, 2019, respectively		434,760		461,277
Property and equipment, net of accumulated depreciation of $556,956 and $525,933 as of June 30, 2020 and December 31, 2019, respectively						Property and equipment, net of accumulated depreciation of $556,956 and $525,933 as of June 30, 2020 and December 31, 2019, respectively	415,734		461,277
Operating lease assets	Operating lease assets	69,622		76,548		Operating lease assets	61,544		76,548
Intangible assets, net	Intangible assets, net	99,121		113,925		Intangible assets, net	93,952		113,925
Goodwill	Goodwill	724,113		752,592		Goodwill	729,740		752,592
Deferred tax asset, net	Deferred tax asset, net	15,231		13,159		Deferred tax asset, net	15,585		13,159
Prepaid expenses, deferred costs, and other noncurrent assets	Prepaid expenses, deferred costs, and other noncurrent assets	24,394		37,936		Prepaid expenses, deferred costs, and other noncurrent assets	21,509		37,936

Total assets	Total assets	$	2,217,221	$	1,763,958	Total assets	$	1,809,439	$	1,763,958

LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	278,861	$	—	Current portion of long-term debt	$	118,383	$	—
Current portion of other long-term liabilities	Current portion of other long-term liabilities	64,333		53,144		Current portion of other long-term liabilities	61,923		53,144
Accounts payable	Accounts payable	35,840		46,478		Accounts payable	44,972		46,478
Accrued liabilities	Accrued liabilities	274,854		334,762		Accrued liabilities	298,635		334,762
Total current liabilities	Total current liabilities	653,888		434,384		Total current liabilities	523,913		434,384
Long-term liabilities:	Long-term liabilities:					Long-term liabilities:
Long-term debt	Long-term debt	1,043,327		739,475		Long-term debt	774,713		739,475
Asset retirement obligations	Asset retirement obligations	53,359		55,494		Asset retirement obligations	52,794		55,494
Deferred tax liability, net	Deferred tax liability, net	45,870��		46,878		Deferred tax liability, net	40,596		46,878
Operating lease liabilities	Operating lease liabilities	63,827		69,531		Operating lease liabilities	58,414		69,531

Other long-term liabilities	Other long-term liabilities	49,091		37,870		Other long-term liabilities	50,920		37,870
Total liabilities	Total liabilities	1,909,362		1,383,632		Total liabilities	1,501,350		1,383,632

Commitments and contingencies (See Note 15)	Commitments and contingencies (See Note 15)					Commitments and contingencies (See Note 15)

Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Ordinary shares, $0.01 nominal value; 44,456,153 and 44,676,132 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively		445		447
Ordinary shares, $0.01 nominal value; 44,476,906 and 44,676,132 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively						Ordinary shares, $0.01 nominal value; 44,476,906 and 44,676,132 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	445		447
Additional paid-in capital	Additional paid-in capital	328,528		332,109		Additional paid-in capital	332,157		332,109
Accumulated other comprehensive loss, net	Accumulated other comprehensive loss, net	(137,349)		(77,887)		Accumulated other comprehensive loss, net	(138,827)		(77,887)
Retained earnings	Retained earnings	116,306		125,763		Retained earnings	114,384		125,763
Total parent shareholders' equity	Total parent shareholders' equity	307,930		380,432		Total parent shareholders' equity	308,159		380,432
Noncontrolling interests	Noncontrolling interests	(71)		(106)		Noncontrolling interests	(70)		(106)
Total shareholders’ equity	Total shareholders’ equity	307,859		380,326		Total shareholders’ equity	308,089		380,326
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	2,217,221	$	1,763,958	Total liabilities and shareholders’ equity	$	1,809,439	$	1,763,958

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

Table of ~~Conte~~n t sContents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, excluding share and per share amounts)

(Unaudited)


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Revenues:	Revenues:					Revenues:
ATM operating revenues	ATM operating revenues	$	291,854	$	302,602	ATM operating revenues	$	222,824	$	323,081	$	514,678	$	625,683
ATM product sales and other revenues	ATM product sales and other revenues	14,748		15,668		ATM product sales and other revenues	10,368		17,740		25,116		33,408
Total revenues	Total revenues	306,602		318,270		Total revenues	233,192		340,821		539,794		659,091
Cost of revenues:	Cost of revenues:					Cost of revenues:
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below. See Note 1(c))	Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below. See Note 1(c))	193,665		206,158		Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below. See Note 1(c))	151,084		208,081		344,749		414,239
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	12,057		11,925		Cost of ATM product sales and other revenues	7,623		14,301		19,680		26,226
Total cost of revenues	Total cost of revenues	205,722		218,083		Total cost of revenues	158,707		222,382		364,429		440,465
Operating expenses:	Operating expenses:					Operating expenses:
Selling, general, and administrative expenses	Selling, general, and administrative expenses	42,378		43,660		Selling, general, and administrative expenses	32,858		41,995		75,236		85,655

Restructuring expenses	Restructuring expenses	1,209		—		Restructuring expenses	3,340		3,463		4,549		3,463

Depreciation and accretion expense	Depreciation and accretion expense	32,211		32,973		Depreciation and accretion expense	32,072		33,205		64,283		66,178
Amortization of intangible assets	Amortization of intangible assets	8,413		12,412		Amortization of intangible assets	8,849		12,591		17,262		25,003
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	921		968		Loss on disposal and impairment of assets	112		1,496		1,033		2,464
Total operating expenses	Total operating expenses	85,132		90,013		Total operating expenses	77,231		92,750		162,363		182,763
Income from operations		15,748		10,174
Other expenses:
(Loss) income from operations						(Loss) income from operations	(2,746)		25,689		13,002		35,863
Other expenses (income):						Other expenses (income):
Interest expense, net	Interest expense, net	6,421		6,643		Interest expense, net	8,809		6,871		15,230		13,514
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	3,486		3,292		Amortization of deferred financing costs and note discount	4,399		3,330		7,885		6,622
Other expenses (income)		3,829		(7,207)
Loss on extinguishment of convertible notes						Loss on extinguishment of convertible notes	3,018		—		3,018		—
Other (income) expenses						Other (income) expenses	(6,364)		1,456		(2,535)		(5,751)
Total other expenses	Total other expenses	13,736		2,728		Total other expenses	9,862		11,657		23,598		14,385
Income before income taxes		2,012		7,446
(Loss) income before income taxes						(Loss) income before income taxes	(12,608)		14,032		(10,596)		21,478
Income tax (benefit) expense	Income tax (benefit) expense	(3,737)		3,129		Income tax (benefit) expense	(10,687)		3,565		(14,424)		6,694
Net income		5,749		4,317
Net loss attributable to noncontrolling interests		(6)		(2)
Net income attributable to controlling interests and available to common shareholders		$	5,755	$	4,319
Net (loss) income						Net (loss) income	(1,921)		10,467		3,828		14,784
Net income (loss) attributable to noncontrolling interests						Net income (loss) attributable to noncontrolling interests	1		(4)		(5)		(6)
Net (loss) income attributable to controlling interests and available to common shareholders						Net (loss) income attributable to controlling interests and available to common shareholders	$	(1,922)	$	10,471	$	3,833	$	14,790

Net income per common share – basic		$	0.13	$	0.09
Net income per common share – diluted		$	0.13	$	0.09
Net (loss) income per common share – basic						Net (loss) income per common share – basic	$	(0.04)	$	0.23	$	0.09	$	0.32
Net (loss) income per common share – diluted						Net (loss) income per common share – diluted	$	(0.04)	$	0.22	$	0.08	$	0.32

Weighted average shares outstanding – basic	Weighted average shares outstanding – basic	44,729,824		46,223,764		Weighted average shares outstanding – basic	44,465,183		46,180,161		44,597,504		46,201,842
Weighted average shares outstanding – diluted	Weighted average shares outstanding – diluted	45,741,261		46,635,033		Weighted average shares outstanding – diluted	44,465,183		46,601,488		45,441,787		46,620,147

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

Table of ~~Conte~~n t sContents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~(LOSS) INCOME

(In thousands)

(Unaudited)

Three Months Ended March 31,
2020 2019
Net income $ 5,749 $ 4,317
Unrealized loss on interest rate swap contracts, net of deferred income tax benefit of $12,103 and $3,196 for the three months ended March 31, 2020 and 2019 (39,842) (12,703)
Foreign currency translation adjustments, net of deferred income tax benefit of $561 and $80 for the three months ended March 31, 2020 and 2019, respectively (19,620) 5,102
Other comprehensive loss (59,462) (7,601)
Total comprehensive loss (53,713) (3,284)
Less: Comprehensive income attributable to noncontrolling interests 35 —
Comprehensive loss attributable to controlling interests $ (53,748) $ (3,284)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net (loss) income	$	(1,921)	$	10,467	$	3,828	$	14,784
Unrealized loss on interest rate swap contracts, net of deferred income tax benefits of $925 and $4,082 for the three months ended June 30, 2020 and 2019, respectively, and $13,027 and $7,277 for the six months ended June 30, 2020 and 2019, respectively.	(3,240)		(13,606)		(43,082)		(26,309)
Foreign currency translation adjustments, net of deferred income tax expense of $437 and benefit of $162 for the three months ended June 30, 2020 and 2019, respectively, and benefits of $123 and $242 for the six months ended June 30, 2020 and 2019, respectively.	1,762		4,274		(17,858)		9,376
Other comprehensive loss	(1,478)		(9,332)		(60,940)		(16,933)
Total comprehensive (loss) income	(3,399)		1,135		(57,112)		(2,149)
Less: Comprehensive income (loss) attributable to noncontrolling interests	1		(5)		36		(5)
Comprehensive (loss) income attributable to controlling interests	$	(3,400)	$	1,140	$	(57,148)	$	(2,144)

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

Table of ~~Conte~~n t sContents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

Three Months Ended March 31, 2020
Common Shares Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Loss, Net Retained
Earnings Noncontrolling
Interests
Shares Amount Total
Balance as of December 31, 2019 44,676 $ 447 $ 332,109 $ (77,887) $ 125,763 $ (106) $ 380,326
Cumulative effect of change in accounting principle — — — — (1,871) — (1,871)
Issuance of common shares for share-based compensation, net of forfeitures 286 3 271 — — — 274
Share-based compensation expense — — 5,193 — — — 5,193
Tax payments related to share-based compensation — — (5,515) — — — (5,515)
Repurchase of common shares (506) (5) (3,530) — (13,338) — (16,873)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $12,103 — — — (39,842) — (39,842)
Net income attributable to controlling interests — — — — 5,755 — 5,755
Net loss attributable to noncontrolling interests — — — — — (6) (6)
Foreign currency translation adjustments, net of deferred income tax benefit of $561
— — — (19,620) (3) 41 (19,582)
Balance as of March 31, 2020 44,456 $ 445 $ 328,528 $ (137,349) $ 116,306 $ (71) $ 307,859

Three Months Ended March 31, 2019
Common Shares Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Loss, Net Retained
Earnings Noncontrolling
Interests
Shares Amount Total
Balance as of December 31, 2018 46,134 $ 461 $ 327,009 $ (66,877) $ 116,276 $ (97) $ 376,772
Cumulative effect of change in accounting principle — — — 366 (366) — —
Issuance of common shares for share-based compensation, net of forfeitures 174 2 — — — — 2
Share-based compensation expense — — 4,484 — — — 4,484
Tax payments related to share-based compensation — — (1,781) — — — (1,781)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $3,196 — — — (13,069) — — (13,069)
Net income attributable to controlling interests — — — — 4,319 — 4,319
Net loss attributable to noncontrolling interests — — — — — (2) (2)
Foreign currency translation adjustments, net of deferred income tax benefit of $80 — — — 5,102 — 2 5,104
Balance as of March 31, 2019 46,308 $ 463 $ 329,712 $ (74,478) $ 120,229 $ (97) $ 375,829


	Three Months Ended June 30, 2020
	Common Shares					Additional Paid-In Capital		Accumulated Other Comprehensive Loss, Net		Retained Earnings			Noncontrolling Interests
	Shares	Amount													Total
Balance as of March 31, 2020	44,456	$	445	$	328,528	$	(137,349)	$	116,306		$	(71)	$	307,859

Issuance of common shares for share-based compensation, net of forfeitures	21	—		20		—		—			—		20
Share-based compensation expense	—	—		5,029		—		—			—		5,029
Tax payments related to share-based compensation	—	—		(237)		—		—			—		(237)
Repurchase of common shares	—	—		—		—		—			—		—
Settlement of note hedge and warrants associated with the convertible senior notes				(1,183)									(1,183)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $925	—	—		—		(3,240)					—		(3,240)
Net loss attributable to controlling interests	—	—		—		—		(1,922)			—		(1,922)
Net income attributable to noncontrolling interests	—	—		—		—		—			1		1
Foreign currency translation adjustments, net of deferred income tax expense of $437	—	—		—		1,762		—			—		1,762
Balance as of June 30, 2020	44,477	$	445	$	332,157	$	(138,827)	$	114,384		$	(70)	$	308,089


	Three Months Ended June 30, 2019
	Common Shares					Additional Paid-In Capital		Accumulated Other Comprehensive Loss, Net		Retained Earnings			Noncontrolling Interests
	Shares	Amount													Total
Balance as of March 31, 2019	46,308	$	463	$	329,712	$	(74,478)	$	120,229		$	(97)	$	375,829

Issuance of common shares for share-based compensation, net of forfeitures	15	—		—		—		—			—		—
Share-based compensation expense	—	—		5,250		—		—			—		5,250
Tax payments related to share-based compensation	—	—		(241)		—		—			—		(241)
Repurchase of common shares	(678)	(7)		(4,590)		—		(15,503)			—		(20,100)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $4,082	—	—		—		(13,606)		—			—		(13,606)
Net income attributable to controlling interests	—	—		—		—		10,471			—		10,471
Net loss attributable to noncontrolling interests	—	—		—		—		—			(4)		(4)
Foreign currency translation adjustments, net of deferred income tax benefit of $162	—	—		—		4,274		—			—		4,274
Balance as of June 30, 2019	45,645	$	456	$	330,131	$	(83,810)	$	115,197		$	(101)	$	361,873

Table of Contents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Six Months Ended June 30, 2020
	Common Shares					Additional Paid-In Capital		Accumulated Other Comprehensive Loss, Net		Retained Earnings			Noncontrolling Interests
	Shares	Amount													Total
Balance as of December 31, 2019	44,676	$	447	$	332,109	$	(77,887)	$	125,763		$	(106)	$	380,326
Cumulative effect of change in accounting principle	—	—		—		—		(1,871)			—		(1,871)
Issuance of common shares for share-based compensation, net of forfeitures	307	3		290		—		—			—		293
Share-based compensation expense	—	—		10,222		—		—			—		10,222
Tax payments related to share-based compensation	—	—		(5,751)		—		—			—		(5,751)
Repurchase of common shares	(506)	(5)		(3,530)		—		(13,338)			—		(16,873)
Settlement of note hedge and warrants associated with the convertible senior notes	—	—		(1,183)		—		—			—		(1,183)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $13,027	—	—		—		(43,082)					—		(43,082)
Net income attributable to controlling interests	—	—		—		—		3,833			—		3,833
Net loss attributable to noncontrolling interests	—	—		—		—		—			(5)		(5)
Foreign currency translation adjustments, net of deferred income tax benefit of $123	—	—		—		(17,858)		(3)			41		(17,820)
Balance as of June 30, 2020	44,477	$	445	$	332,157	$	(138,827)	$	114,384		$	(70)	$	308,089


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

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

Table of ~~Conte~~n t sContents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Three Months Ended March 31,							Six Months Ended June 30,
		2020		2019			2020		2019
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	5,749	$	4,317	Net income	$	3,828	$	14,784
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, accretion, and amortization of intangible assets	Depreciation, accretion, and amortization of intangible assets	40,624		45,385		Depreciation, accretion, and amortization of intangible assets	81,545		91,181
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	3,486		3,292		Amortization of deferred financing costs and note discount	7,885		6,622
Share-based compensation expense	Share-based compensation expense	5,193		4,484		Share-based compensation expense	10,222		9,734
Deferred income tax expense	Deferred income tax expense	9,602		354		Deferred income tax expense	4,395		759
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	921		968		Loss on disposal and impairment of assets	1,033		2,464
Other reserves and non-cash items	Other reserves and non-cash items	4,361		(7,497)		Other reserves and non-cash items	3,710		(5,258)

Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Decrease (increase) in accounts and notes receivable, net	Decrease (increase) in accounts and notes receivable, net	3,171		(3,851)		Decrease (increase) in accounts and notes receivable, net	11,922		(10,617)
Increase in prepaid expenses, deferred costs, and other current assets	Increase in prepaid expenses, deferred costs, and other current assets	(11,645)		(19,222)		Increase in prepaid expenses, deferred costs, and other current assets	(7,082)		(10,018)
Increase in inventory, net	Increase in inventory, net	(1,454)		(2,741)		Increase in inventory, net	(382)		(790)
Decrease in other assets	Decrease in other assets	3,866		1,740		Decrease in other assets	7,127		3,595
Decrease in accounts payable		(8,813)		(4,506)
Increase (decrease) in accounts payable						Increase (decrease) in accounts payable	770		(5,500)
Decrease in restricted cash liabilities	Decrease in restricted cash liabilities	(39,871)		(71,521)		Decrease in restricted cash liabilities	(745)		(70,354)
(Decrease) increase in accrued liabilities	(Decrease) increase in accrued liabilities	(11,209)		27,399		(Decrease) increase in accrued liabilities	(32,027)		32,008
Decrease in other liabilities	Decrease in other liabilities	(2,861)		(406)		Decrease in other liabilities	(2,350)		(3,380)
Net cash provided by (used in) operating activities		1,120		(21,805)
Net cash provided by operating activities						Net cash provided by operating activities	89,851		55,230

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Additions to property and equipment	Additions to property and equipment	(18,429)		(29,307)		Additions to property and equipment	(29,804)		(55,053)

Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	—		(9,100)
Net cash used in investing activities	Net cash used in investing activities	(18,429)		(29,307)		Net cash used in investing activities	(29,804)		(64,153)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility	Proceeds from borrowings under revolving credit facility	731,862		120,918		Proceeds from borrowings under revolving credit facility	747,003		290,510
Repayments of borrowings under revolving credit facility	Repayments of borrowings under revolving credit facility	(144,754)		(144,466)		Repayments of borrowings under revolving credit facility	(907,140)		(336,322)

Proceeds from issuance of term loan facility						Proceeds from issuance of term loan facility	500,000		—
Debt issuance, modification, and redemption costs						Debt issuance, modification, and redemption costs	(18,244)		—
Repurchase of convertible notes						Repurchase of convertible notes	(171,173)		—
Tax payments related to share-based compensation	Tax payments related to share-based compensation	(5,515)		(1,781)		Tax payments related to share-based compensation	(5,751)		(2,022)
Proceeds from exercises of stock options	Proceeds from exercises of stock options	293		2		Proceeds from exercises of stock options	293		2
Repurchase of common shares	Repurchase of common shares	(16,873)		—		Repurchase of common shares	(16,873)		(20,100)
Payment of contingent consideration						Payment of contingent consideration	(5,179)		—
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	565,013		(25,327)		Net cash provided by (used in) financing activities	122,936		(67,932)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(6,649)		1,263		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(4,788)		1,371
Net increase (decrease) in cash, cash equivalents, and restricted cash	Net increase (decrease) in cash, cash equivalents, and restricted cash	541,055		(75,176)		Net increase (decrease) in cash, cash equivalents, and restricted cash	178,195		(75,484)

Cash, cash equivalents, and restricted cash as of beginning of period	Cash, cash equivalents, and restricted cash as of beginning of period	117,469		195,410		Cash, cash equivalents, and restricted cash as of beginning of period	117,469		195,410
Cash, cash equivalents, and restricted cash as of end of period	Cash, cash equivalents, and restricted cash as of end of period	$	658,524	$	120,234	Cash, cash equivalents, and restricted cash as of end of period	$	295,664	$	119,926

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid for interest	Cash paid for interest	$	1,992	$	1,860	Cash paid for interest	$	16,154	$	12,085
Cash paid for income taxes	Cash paid for income taxes	$	2,666	$	4,720	Cash paid for income taxes	$	2,450	$	2,950

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

Table of ~~Conte~~n t sContents

CARDTRONICS PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) General and Basis of Presentation

(a) General

Cardtronics plc, together with its wholly and majority-owned subsidiaries (collectively, the “Company”), provides convenient automated financial related services to consumers through its global network of automated teller machines and multi-function financial services kiosks (collectively referred to as “ATMs”). ~~As of March 31, 2020, the~~The Company ~~was~~is the world’s largest ATM owner/operator, providing services to over 285,000 ATMs globally, approximately 25% of which are Company-owned.

During the three months ended ~~March 31,~~June 30, 2020, approximately ~~68%~~74% of the Company’s revenues were derived from operations in North America (including its ATM operations in the United States ("U.S."), Canada, and Mexico), approximately ~~27%~~21% of the Company’s revenues were derived from operations in Europe and Africa (including its ATM operations in the United Kingdom ("U.K."), Ireland, Germany, Spain, and South Africa), and approximately 5% of the Company’s revenues were derived from the Company’s operations in Australia and New Zealand. ~~As of March 31, 2020, the~~The Company ~~provided~~also provides processing only services or various forms of managed services solutions to approximately 198,000 ATMs. Under a managed services arrangement, retailers, financial institutions, and ATM distributors rely on Cardtronics to handle some or all of the operational aspects associated with operating and maintaining ATMs, typically in exchange for a monthly service fee, fee per transaction, or fee per service provided.

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

In addition to its retail merchant relationships, the Company also partners with leading financial institutions to brand selected ATMs within its network. These financial institutions include, but are not limited to, BBVA Compass Bancshares, Inc. ~~(“BBVA”)~~, Citibank, N.A. ~~(“Citibank”)~~, Citizens Financial Group, Inc. ~~(“Citizens”)~~, Cullen/Frost Bankers, Inc. ~~(“Cullen/Frost”)~~, Discover Bank, ~~(“Discover”),~~ PNC Bank, N.A. ~~(“PNC Bank”)~~, Santander Bank, N.A. ~~(“Santander”)~~, TD Bank, N.A. ~~(“TD Bank”)~~, United Services Automobile Association, ~~("USAA"),~~and US Bank Corp ~~("US Bank")~~ in the U.S.; BMO Bank of Montreal, ~~(“BMO”),~~ the Bank of Nova Scotia, ~~(“Scotiabank”),~~ Canadian Imperial Bank Commerce, ~~(“CIBC”),~~ and TD Bank in Canada; the Bank of Queensland Limited ~~(“BOQ”)~~ and HSBC Holdings plc ~~(“HSBC”)~~ in Australia; and Capitec Bank, ~~("Capitec"),~~ Mercantile Bank, ~~("Mercantile")~~ and Old Mutual ~~("Old Mutual")~~ in South Africa. In Mexico, the Company partners with Scotiabank and Banco Multiva by putting their brands on our ATMs in exchange for certain services provided by them. As of ~~March 31,~~June 30, 2020, approximately 25,000 of the Company’s ATMs were under contract with approximately 500 financial institutions to place their logos on the ATMs and to provide convenient surcharge-free access for their banking ~~customers.~~customers. The Company also provides managed services offerings for financial institutions, which generally include full outsourcing of a portion or all of the financial institution's ATMs.

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

Table of ~~Conte~~n t sContents

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

(b) Basis of Presentation

This Quarterly Report on Form 10-Q (this “Form 10-Q”) has been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) applicable to interim financial information. As this is an interim period filing presented using a condensed format, it does not include all of the disclosures required by accounting principles generally accepted in the U.S. (“U.S. GAAP” or “GAAP”), although the Company believes that the disclosures are adequate to make the information not misleading. This Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”), which includes a summary of the Company’s significant accounting policies and other disclosures.

~~In management’s opinion, all~~All normal recurring adjustments necessary for a fair presentation of the Company’s interim and prior period results have been made. The results of operations for the three and six months ended ~~March 31,~~June 30, 2020 and 2019 are not necessarily indicative of results of operations that may be expected for any other interim period or for the full fiscal year.

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

The preparation of the unaudited interim financial statements to conform with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of this Form 10-Q and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and these differences could be material to the financial statements.

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

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


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
		(In thousands)							(In thousands)
Depreciation and accretion expenses related to ATMs and ATM-related assets	Depreciation and accretion expenses related to ATMs and ATM-related assets	$	22,781	$	24,607	Depreciation and accretion expenses related to ATMs and ATM-related assets	$	23,999	$	25,384	$	46,780	$	49,991
Amortization of intangible assets	Amortization of intangible assets	8,413		12,412		Amortization of intangible assets	8,849		12,591		17,262		25,003
Total depreciation, accretion, and amortization of intangible assets excluded from Cost of ATM operating revenues	Total depreciation, accretion, and amortization of intangible assets excluded from Cost of ATM operating revenues	$	31,194	$	37,019	Total depreciation, accretion, and amortization of intangible assets excluded from Cost of ATM operating revenues	$	32,848	$	37,975	$	64,042	$	74,994

Table of Contents

(d) Restructuring Expenses

During the three and six months ended ~~March 31,~~June 30, 2020, the Company continued certain corporate reorganization and cost reduction initiatives that began in 2019. ~~The~~In addition, the Company implemented additional cost reduction measures during the three months ended June 30, 2020, partly in response to the impacts of the COVID-19 pandemic (the "Pandemic"). In the three and six months ended June 30, 2020, the Company incurred ~~approximately~~ $3.3 million~~$1.2~~ and $4.5 million, respectively, of pre-tax expenses related to ~~this activity~~these activities that primarily included facility closures, workforce reductions ~~professional fees~~ and other related charges.

~~Table of Conte~~n t s

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

Three Months Ended
March 31,
2020 2019
(In thousands)
Europe & Africa $ 1,000 $ —
Corporate $ 209 $ —
Total $ 1,209 $ —


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Europe & Africa	$	2,077	$	400	$	3,077	$	400
North America	1,205		213		1,205		213
Corporate	58		2,850		267		2,850
Total	$	3,340	$	3,463	$	4,549	$	3,463

The costs incurred in Europe & Africa for the three and six months ended June 30, 2020 and 2019 included facility related costs consisting of non-cash asset write-offs and accelerated lease expenses ~~presented~~ as ~~a reduction of the associated operating lease assets, and an insignificant amount~~well as amounts pertaining to workforce reductions. The costs incurred in North America for the three and six months ended June 30, 2020 and 2019 primarily related to workforce reductions. The costs incurred in Corporate ~~included~~for the three and six months ended June 30, 2020 and 2019 primarily consisted of professional fees. The restructuring liability balances as of June 30, 2020 and 2019 were $0.8 million and $1.0 million, respectively. The restructuring liability balance as of ~~March 31, 2020 was $0.6 million and there were 0 outstanding restructuring liabilities as of March 31, 2019. Restructuring liabilities were $1.0 million and $1.5 million as of~~ December 31, 2019 ~~and 2018, respectively.~~was $1.0 million.

(e) Cash, Cash Equivalents, and Restricted Cash

For purposes of reporting financial condition, cash and cash equivalents include cash in bank and short-term deposit accounts. Additionally, the Company maintains cash on deposit with banks that is pledged for a particular use or restricted to support a liability. ~~These balances are recorded in Restricted cash line in the accompanying Consolidated Balance Sheets based on when the Company expects this cash to be paid.~~ Current restricted cash primarily consists of amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers. Restricted cash in current assets is offset by a corresponding liability balance in the Accrued liabilities line in the ~~accompanying~~ Consolidated Balance Sheets. The changes in the settlement liabilities corresponding to the changes in the balance of restricted cash during the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019 are presented in the Statements of Cash Flows within the ~~increase~~Increase (decrease) in restricted cash liabilities line.

The following table provides a reconciliation of the ending cash, cash equivalents, and restricted cash balances as of ~~March 31,~~June 30, 2020 and 2019, corresponding with the balances in the ~~accompanying~~ Consolidated Statements of Cash Flows.


		March 31,							June 30,
		2020		2019			2020		2019
		(In thousands)							(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	613,728	$	35,444	Cash and cash equivalents	$	211,292	$	33,495
Restricted cash	Restricted cash	44,796		84,790		Restricted cash	84,372		86,431
Total cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows	Total cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows	$	658,524	$	120,234	Total cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows	$	295,664	$	119,926

~~See~~ ~~Note 9. Current and Long-Term Debt~~ ~~for discussion~~Table of ~~the borrowings made by the Company from its Credit Agreement in March 2020.~~Contents

(f) Inventory

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

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

March 31, 2020 December 31, 2019
(In thousands)
ATMs $ 3,554 $ 3,330
ATM spare parts and supplies 8,142 7,673
Total inventory 11,696 11,003
Less: Inventory reserves (302) (385)
Inventory, net $ 11,394 $ 10,618

~~Table of Conte~~n t s


	June 30, 2020		December 31, 2019
	(In thousands)
ATMs	$	2,109	$	3,330
ATM spare parts and supplies	9,073		7,673
Total inventory	11,182		11,003
Less: Inventory reserves	(313)		(385)
Inventory, net	$	10,869	$	10,618

(g) Accounts and Notes Receivable-Credit Losses

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, the Company recognized additional estimated credit ~~loss~~eslosses of approximately $0.9 million~~. As o~~f that were recognized during the three months ended March 31, 2020. As of June 30, 2020,~~, 73%~~ 83% of the Accounts and Notes Receivable balance was current and not yet due and thethe Company held an allowance for estimated credit losses of ~~$8.1~~$8.0 million.

(2) New Accounting Pronouncements

Adoption of New Accounting Pronouncements

Current Expected Credit Losses. The Company adopted Accounting Standards Codification 326 ("ASC 326") Financial Instruments - Credit Losses on January 1, 2020, via a cumulative-effect adjustment to opening retained earnings. ASC 326 replaced the incurred loss impairment model under which credit losses were recognized when probable. The new guidance requires recognition of credit losses when expected based on a broad range of information, including historical experience and current economic conditions. To implement the standard, the Company applied an aging based methodology using historic loss experience and aging categories. Where necessary, the Company segregated receivables into pools with common characteristics. In addition, where appropriate and where the available information indicated that losses would be minimal, an estimated loss rate was applied. In all cases, losses are recognized when expected. The Company holds no material financing receivables and no other financial instruments measured at amortized cost. The Company's adoption of the Credit Loss Standard had the following impact on the Company’s consolidated statement of financial position:


		December 31, 2019		ASC 326 Adoption		January 1, 2020			December 31, 2019		ASC 326 Adoption		January 1, 2020
		As Reported				As Adjusted			As Reported				As Adjusted
		(In thousands)									(In thousands)

Accounts and Notes Receivable	Accounts and Notes Receivable	$	101,046	$	—	$	101,046	Accounts and Notes Receivable	$	101,046	$	—	$	101,046
Allowance for credit losses	Allowance for credit losses	(5,251)		(2,337)		(7,588)		Allowance for credit losses	(5,251)		(2,337)		(7,588)
Accounts and Notes Receivable, net	Accounts and Notes Receivable, net	95,795		(2,337)		93,458		Accounts and Notes Receivable, net	$	95,795	$	(2,337)	$	93,458

Deferred tax asset, net	Deferred tax asset, net	13,159		466		13,625		Deferred tax asset, net	$	13,159	$	466	$	13,625
Retained earnings	Retained earnings	$	125,763	$	(1,871)	$	123,892	Retained earnings	$	125,763	$	(1,871)	$	123,892

Fair Value Measurement. In January 2020, the Company adopted ASU 2018-13, Disclosure Framework (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement in January 2020. This guidance modified the disclosure requirements for fair value measurements. The Company's adoption of these disclosure requirements had no impact on the Company's consolidated financial statements.

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Accounting Pronouncements Issued But Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The optional expedients were available to be used upon issuance of this guidance but we have not yet applied the guidance because we have also not yet modified any of our existing contracts in reference to the rate reform. The Company is currently evaluating the impact of the new guidance on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” The new standard simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intra-period allocations and calculating income taxes in interim periods. The new standard also adds guidance intended to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating ~~this guidance to determine~~ the impact ~~it may have~~of the new guidance on ~~its~~our consolidated financial statements.

~~Table of Conte~~n t s

(3) Revenue Recognition

Disaggregated Revenues

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



	Three Months Ended June 30, 2020
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	63,004	$	17,472	$	8,343	$	—	$	88,819
Interchange revenues	27,785		28,366		594		—		56,745
Bank-branding and surcharge-free network revenues	52,474		358		—		—		52,832
Managed services and processing revenues	21,794		892		3,156		(1,414)		24,428
Total ATM operating revenues	165,057		47,088		12,093		(1,414)		222,824

ATM product sales and other revenues	8,982		1,304		82		—		10,368
Total revenues	$	174,039	$	48,392	$	12,175	$	(1,414)	$	233,192



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

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

Three Months Ended March 31, 2020
(In thousands)
North America Europe & Africa Australia & New Zealand Eliminations Consolidated
Surcharge revenues $ 80,235 $ 32,596 $ 15,945 $ — $ 128,776
Interchange revenues 31,610 44,997 873 — 77,480
Bank-branding and surcharge-free network revenues 53,768 347 — — 54,115
Managed services and processing revenues 27,628 2,018 3,489 (1,652) 31,483
Total ATM operating revenues 193,241 79,958 20,307 (1,652) 291,854
ATM product sales and other revenues 12,756 1,942 50 — 14,748
Total revenues $ 205,997 $ 81,900 $ 20,357 $ (1,652) $ 306,602

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	Six Months Ended June 30, 2020
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	143,239	$	50,068	$	24,288	$	—	$	217,595
Interchange revenues	59,395		73,363		1,467		—		134,225
Bank-branding and surcharge-free network revenues	106,242		705		—		—		106,947
Managed services and processing revenues	49,422		2,910		6,645		(3,066)		55,911
Total ATM operating revenues	358,298		127,046		32,400		(3,066)		514,678



ATM product sales and other revenues	21,738		3,246		132		—		25,116
Total revenues	$	380,036	$	130,292	$	32,532	$	(3,066)	$	539,794


		Three Months Ended March 31, 2019																			Six Months Ended June 30, 2019
		(In thousands)																			(In thousands)
		North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated			North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	Surcharge revenues	$	85,110	$	31,045	$	20,668	$	—	$	136,823	Surcharge revenues	$	173,344	$	75,472	$	40,444	$	—	$	289,260
Interchange revenues	Interchange revenues	34,379		55,308		1,303		—		90,990		Interchange revenues	68,665		109,731		2,501		—		180,897
Bank-branding and surcharge-free network revenues	Bank-branding and surcharge-free network revenues	45,873		—		—		—		45,873		Bank-branding and surcharge-free network revenues	94,411		483		—		—		94,894
Managed services and processing revenues	Managed services and processing revenues	25,684		2,325		3,820		(2,913)		28,916		Managed services and processing revenues	54,162		4,493		7,572		(5,595)		60,632
Total ATM operating revenues	Total ATM operating revenues	191,046		88,678		25,791		(2,913)		302,602		Total ATM operating revenues	390,582		190,179		50,517		(5,595)		625,683

ATM product sales and other revenues	ATM product sales and other revenues	13,202		2,247		219		—		15,668		ATM product sales and other revenues	28,881		4,216		311		—		33,408
Total revenues	Total revenues	$	204,248	$	90,925	$	26,010	$	(2,913)	$	318,270	Total revenues	$	419,463	$	194,395	$	50,828	$	(5,595)	$	659,091

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

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

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

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

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

The Company’s bank-branding, surcharge-free network and managed services arrangements result in the Company providing a series of distinct services that have similar patterns of transfer to the 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 consideration that corresponds directly with the value of the ~~entity’s~~Company’s performance completed to date. In conjunction with these arrangements, the Company recognizes revenue in the amount that it has a right to receive. Variable consideration may exist in these arrangements and is recognized only to the extent a significant reversal is not probable.

ATM product sales and other revenues. The Company presents revenues from other product sales and services in the ATM product sales and other revenues line in the ~~accompanying~~ Consolidated Statements of Operations. The Company earns revenues from the sale of ATMs and ATM-related equipment as well as the delivery of other non-transaction-based services. Revenues related to these activities are recognized when ownership of the equipment is 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 transferred to the VAR.

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

Contract Balances

As of ~~March 31,~~June 30, 2020, the Company has recognized no significant contract assets. Contract liabilities totaled $8.2 million and $9.0 million at ~~March 31,~~June 30, 2020 and December 31, 2019, respectively. These amounts represent deferred revenues for advance consideration received primarily in relation to bank-branding and surcharge-free network arrangements. The revenue recognized during the three and six months ended ~~March 31,~~June 30, 2020 and 2019 on previously deferred revenues was not significant. The Company expects to recognize the revenue associated with its contract liabilities ratably over various periods extending over the next 36 months. During the three and six months ended ~~March 31,~~June 30, 2020, the Company did not recognize any significant impairment losses related to its contract assets.

Contract Acquisition Cost

The Company expects that the incremental commissions paid to sales personnel, together with other associated costs, are recoverable, and therefore, the Company capitalizes these amounts as deferred contract acquisition costs. Deferred contract acquisition costs totaled ~~$7.0~~$6.8 million and $7.5 million at ~~March 31,~~June 30, 2020 and December 31, 2019, respectively. Sales commissions capitalized are generally amortized over a 4-5 year period corresponding with the related agreements. Similarly, the costs incurred to fulfill a contract, primarily consisting of prepaid merchant commissions and other consideration paid or provided to merchant partners, are capitalized and recognized over the duration of the related contract. The Company does not capitalize the costs of obtaining a contract if the associated contract is one year or less.

(4) Share-based Compensation

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

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


			Three Months Ended March 31,							Three Months Ended June 30,							Six Months Ended June 30,
			2020		2019			2020		2019			2020		2019
		(In thousands)										(In thousands)
Cost of ATM operating revenues	Cost of ATM operating revenues		$	545	$	261	Cost of ATM operating revenues	$	225	$	366		$	770	$	627
Selling, general, and administrative expenses	Selling, general, and administrative expenses		4,648		4,223		Selling, general, and administrative expenses	4,804		4,884			9,452		9,107
Total share-based compensation expense	Total share-based compensation expense		$	5,193	$	4,484	Total share-based compensation expense	$	5,029	$	5,250		$	10,222	$	9,734

~~For~~During the three months ended ~~March 31,~~June 30, 2020, total share-based compensation expense decreased by $0.2 million compared to the same period of 2019. During the six months ended June 30, 2020, total share-based compensation expense increased by ~~$0.7~~$0.5 million compared to the same period of ~~2019, respectively. This increase is~~2019. These fluctuations are attributable to the amount, timing and terms of share-based payment awards granted during the periods, net of estimated forfeitures.

Restricted Stock Units. The Company grants restricted stock units (“RSUs”) under its Long-Term Incentive Plan (“LTIP”), which is an annual equity award program under the Fourth Amended and Restated 2007 Stock Incentive Plan. The ultimate number of RSUs, that are determined to be earned under the LTIP are approved by the Compensation Committee of the Company’s Board of Directors ("Board"), based on the Company’s achievement of previously specified performance levels at the end of the associated performance period. RSU grants are service-based (“Time-RSUs”), performance-based (“Performance-RSUs”), or market-based (“Market-Based-RSUs”). Each is recognized ratably over the associated service period. For Time-RSUs and Market-Based-RSUs, the Company recognizes the related compensation expense based on the grant date fair value. The grant date fair value of the Time-Based RSUs is the Company's closing stock price on the date of grant while the grant date fair value of the Market-Based-RSUs is derived from a Monte Carlo simulation. For Performance-RSUs, the Company recognizes the related compensation expense based on the estimated performance levels that management believes will ultimately be met. Time-RSUs are convertible into the Company’s common shares upon passage of the annual graded vesting periods, which begin 1-2 years after the grant date and extend 3-4 years. Performance-RSUs and Market-Based RSUs will be earned to the extent the Company achieves the associated performance-based or market-based vesting conditions and these awards are convertible into the Company’s common shares after the passage of the vesting periods which extend 3-4 years from the grant date. Although these RSUs are not considered to be earned and outstanding until the vesting conditions are

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met, the Company recognizes the related compensation expense over the requisite service period (or to an employee’s qualified

~~Table of Conte~~n t s

retirement date, if earlier) using a graded vesting methodology. RSUs may also be granted outside of LTIPs, with or without performance-based vesting requirements.

The number of the Company’s earned non-vested RSUs as of ~~March 31,~~June 30, 2020, and changes during the ~~three~~six months ended ~~March 31,~~June 30, 2020, are presented below:


		Number of Shares	Weighted Average Grant Date Fair Value			Number of Shares	Weighted Average Grant Date Fair Value
Non-vested RSUs as of December 31, 2019	Non-vested RSUs as of December 31, 2019	742,352	$	29.44	Non-vested RSUs as of December 31, 2019	742,352	$	29.44
Granted	Granted	703,557	22.98		Granted	899,007	23.59
Vested	Vested	(393,094)	29.47		Vested	(424,590)	29.11
Forfeited	Forfeited	(10,488)	33.14		Forfeited	(44,072)	27.97
Non-vested RSUs as of March 31, 2020		1,042,327	$	25.03
Non-vested RSUs as of June 30, 2020					Non-vested RSUs as of June 30, 2020	1,172,697	$	25.13

The above table only includes earned RSUs. Performance-RSUs and Market-Based RSUs that are not yet earned are not included. The number of Market-Based RSUs granted in 2018, net of forfeitures, was 134,989 units with a weighted average grant date fair value of $24.13. The number of Performance-RSUs granted at target in 2019, net of forfeitures, was ~~114,607~~111,121 units with a weighted average grant date fair value of ~~$33.76~~$33.72 per unit. The number of Performance-RSUs granted at target in 2020, net of forfeitures, was ~~101,438~~199,014 units with a weighted average grant date fair value of ~~$20.92~~$23.57 per unit. The number of Market-Based RSUs granted in 2019, net of forfeitures, was ~~114,529~~111,043 units with a weighted average grant date fair value of ~~$49.23~~$49.16 per unit. The number of Market-Based RSUs granted in 2020, net of forfeitures, was ~~101,434~~191,704 units with a weighted average grant date fair value of ~~$25.85.~~$30.59. Time-RSUs are included in the listing of outstanding RSUs as granted.

As of ~~March 31,~~June 30, 2020, the unrecognized compensation expense associated with earned RSUs was ~~$10.4~~$13.1 million, which will be recognized using a graded vesting schedule for Performance-RSUs and a straight-line vesting schedule for Time-RSUs, over a remaining weighted average vesting period of approximately ~~2.08~~2.02 years.

Options. The number of the Company’s outstanding stock options as of ~~March 31,~~June 30, 2020, and changes during the ~~three~~six months ended ~~March 31,~~June 30, 2020, are presented below:


		Number of Shares	Weighted Average Exercise Price			Number of Shares	Weighted Average Exercise Price
Options outstanding as of December 31, 2019	Options outstanding as of December 31, 2019	380,180	$	26.01	Options outstanding as of December 31, 2019	380,180	$	26.01
Granted	Granted	233,888	20.92		Granted	233,888	20.92
Exercised	Exercised	(13,020)	22.31		Exercised	(13,020)	22.31
Forfeited	Forfeited	(2,855)	31.99		Forfeited	(9,626)	31.99
Options outstanding as of March 31, 2020		598,193	$	24.07
Options outstanding as of June 30, 2020					Options outstanding as of June 30, 2020	591,422	$	23.98

Options vested and exercisable as of March 31, 2020		199,223	$	24.80
Options vested and exercisable as of June 30, 2020					Options vested and exercisable as of June 30, 2020	196,185	$	24.61

As of ~~March 31,~~June 30, 2020, the unrecognized compensation expense associated with outstanding options was approximately ~~$6.5~~$3.2 million, which will be recognized over the remaining weighted average vesting period of approximately ~~2.63~~2.04 years. The weighted average contractual term associated with outstanding options was ~~8.93~~8.67 years as of ~~March 31,~~June 30, 2020.

(5) Earnings (Loss) Per Share

The Company reports its earnings (loss) per share under the two-class ~~metho~~d.method. Under this method, potentially dilutive securities are excluded from the calculation of diluted earnings per share (as well as their related impact on the net income or loss available to common shareholders) when their impact on net income or loss available to common shareholders is anti-dilutive.

Potentially dilutive securities for the three and six months ended ~~March 31,~~June 30, 2020, ~~included all~~include outstanding stock options, RSUs, and ~~RSUs, which were included in~~ the ~~calculation~~potentially dilutive effect of ~~diluted earnings per share for these periods.~~outstanding warrants and the underlying shares exercisable under the Company’s 1.00% Convertible Senior Notes due 2020 (the “Convertible Notes”). The potentially dilutive effect of outstanding warrants and the underlying shares exercisable under the ~~Company’s $287.5 million of 1.00%~~ Convertible ~~Senior~~ Notes ~~due 2020 (the “Convertible Notes”)~~ were excluded from diluted shares outstanding as the exercise price

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exceeded the average market price of the Company’s common shares. The effect of the ~~convertible~~ note hedge, described in ~~Note~~Note. 9. ~~Long-Term Debt~~Current and long-term debt, was also excluded as the effect is anti-dilutive.

~~Table of Conte~~n t s

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


			Three Months Ended March 31,							Three Months Ended June 30,							Six Months Ended June 30,

			2020		2019			2020		2019			2020		2019
		(in thousands, excluding share and per share amounts)										(in thousands, excluding share and per share amounts)
Net income available to common shareholders			$	5,755	$	4,319
Net (loss) income available to common shareholders							Net (loss) income available to common shareholders	$	(1,922)	$	10,471		$	3,833	$	14,790
Weighted average common basic shares outstanding (for basic calculation)	Weighted average common basic shares outstanding (for basic calculation)		44,729,824		46,223,764		Weighted average common basic shares outstanding (for basic calculation)	44,465,183		46,180,161			44,597,504		46,201,842
Dilutive effect of outstanding common stock options and RSUs	Dilutive effect of outstanding common stock options and RSUs		1,011,437		411,269		Dilutive effect of outstanding common stock options and RSUs	—		421,327			844,283		418,305
Weighted average common dilutive shares outstanding (for diluted calculation)	Weighted average common dilutive shares outstanding (for diluted calculation)		45,741,261		46,635,033		Weighted average common dilutive shares outstanding (for diluted calculation)	44,465,183		46,601,488			45,441,787		46,620,147

Net income per common share - basic			$	0.13	$	0.09
Net income per common share - diluted			$	0.13	$	0.09
Net (loss) income per common share - basic							Net (loss) income per common share - basic	$	(0.04)	$	0.23		$	0.09	$	0.32
Net (loss) income per common share - diluted							Net (loss) income per common share - diluted	$	(0.04)	$	0.22		$	0.08	$	0.32

The ~~computations~~computation of diluted earnings per share for the three months ended ~~March 31,~~June 30, 2020 excludes the effect of 615,690 weighted average shares that were anti-dilutive due to the Net loss in the period.

In addition, the computations of diluted earnings per share for the three and ~~2019,~~six months ended June 30, 2020 exclude approximately ~~200,000~~900,000 and ~~60,000,~~250,000, respectively, potentially dilutive common shares ~~because~~due to the effect of including these shares in the computation would have been antidilutive. In addition, the ~~computation~~computations of diluted earnings per share for the three and six months ended ~~March 31, 2019~~June 30, 2020 excludes ~~approximately 233,000 weighted~~approximately 70,000 and 20,000, respectively, weighted average dilutive shares that are contingently issuable, consisting of market-based and performance based awards for which all necessary conditions had not been satisfied.

(6) Shareholders' Equity

Share Repurchases. On March 26, 2019, the Company announced that its Board had authorized a share repurchase program, enabling the repurchase of up to $50 million of its Class A ordinary shares through August 31, 2020. ~~Share repurchases under the authorized plan could be effected on behalf of the Company through open market transactions, privately negotiated transactions, or otherwise, pursuant to SEC trading rules.~~ The Company exhausted this authorization in September 2019. Subsequently, on November 21, 2019, the Company announced that its Board had authorized the repurchase of an additional $50 million of its Class A ordinary shares through December 31, 2020. Share repurchases under the authorized plans could be effected on behalf of the Company through open market transactions, privately negotiated transactions, or otherwise, pursuant to SEC trading rules.

During the three months ended March 31, 2020, the Company repurchased and canceled 505,699 of its outstanding Class A ordinary shares for an aggregate purchase price of $16.9 million inclusive of stamp taxes of $0.1 million. On April 1, 2020, the Company announced the suspension of its buyback program as part of its ~~COVID-19~~Pandemic related business update.

Additional Paid-In Capital. Included in the balance of Additional paid-in capital are the net amounts paid to settle the convertible note hedges and the associated warrants that the Company entered into in conjunction with the issuance of its Convertible Notes in 2013. These instruments were partially settled upon the partial repurchase of the Convertible Notes in June 2020, in proportionate amounts. During the three months ended June 30, 2020, the Company received $0.4 million upon settlement of convertible note hedges that were canceled and paid $1.4 million to settle the warrants that were canceled. These figures are reported together with the associated fees in the Company's Consolidated Statements of Shareholders Equity. See Note 9, Current and Long-Term Debt for additional information on the Convertible Notes and the related equity instruments.

Accumulated Other Comprehensive Loss, net. Accumulated other comprehensive loss, net, is a separate component of Shareholders’ equity in the ~~accompanying~~ Consolidated Balance Sheets. The following tables present the changes in the balances of each component of Accumulated other comprehensive loss, net, for the three and six months ended ~~March 31,~~June 30, 2020:

Foreign Currency Translation Adjustments Unrealized (Losses) Gains on Interest Rate Swap and Foreign Currency Forward Contracts Total
(In thousands)
Total accumulated other comprehensive loss, net as of December 31, 2019 $ (59,143)
⁽¹⁾
$ (18,744)
⁽²⁾
$ (77,887)
Other comprehensive loss before reclassification (19,620)
⁽³⁾
(42,504)
⁽⁴⁾
(62,124)
Amounts reclassified from accumulated other comprehensive loss, net — 2,662
⁽⁴⁾
2,662
Net current period other comprehensive loss (19,620) (39,842) (59,462)
Total accumulated other comprehensive loss, net as of March 31, 2020 $ (78,763)
⁽¹⁾
$ (58,586)
⁽²⁾
$ (137,349)

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	Foreign Currency Translation Adjustments			Unrealized Losses on Interest Rate Swap and Foreign Currency Forward Contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of March 31, 2020	$	(78,763)	⁽¹⁾	$	(58,586)	⁽²⁾	$	(137,349)
Other comprehensive income (loss) before reclassification	1,762		⁽³⁾	(10,563)		⁽⁴⁾	(8,801)
Amounts reclassified from accumulated other comprehensive loss, net	—			7,323		⁽⁴⁾	7,323
Net current period other comprehensive income (loss)	1,762			(3,240)			(1,478)
Total accumulated other comprehensive loss, net as of June 30, 2020	$	(77,001)	⁽¹⁾	$	(61,826)	⁽²⁾	$	(138,827)

(1)Net of deferred income tax benefit of ~~$6,035~~$5,597 and ~~$5,474~~$6,035 as of June 30, 2020 and March 31, 2020, ~~and December 31, 2019,~~ respectively.

(2)Net of deferred income tax expense of ~~$2,171~~$1,246 and ~~$14,273~~$2,171 as of June 30, 2020 and March 31, 2020, ~~and December 31, 2019,~~ respectively.

(3)Net of deferred income tax ~~benefit~~expense of ~~$561.~~$437.

(4)Net of deferred income tax benefit of ~~$11,390~~$546 and ~~$713~~$379 for Other comprehensive income before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, as of ~~March~~June 30, 2020. For additional information, see Note 13. Derivative Financial Instruments.


	Foreign Currency Translation Adjustments			Unrealized Losses on Interest Rate Swap and Foreign Currency Forward Contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of December 31, 2019	$	(59,143)	⁽¹⁾	$	(18,744)	⁽²⁾	$	(77,887)
Other comprehensive loss before reclassification	(17,858)		⁽³⁾	(53,067)		⁽⁴⁾	(70,925)
Amounts reclassified from accumulated other comprehensive loss, net	—			9,985		⁽⁴⁾	9,985
Net current period other comprehensive loss	(17,858)			(43,082)			(60,940)
Total accumulated other comprehensive loss, net as of June 30, 2020	$	(77,001)	⁽¹⁾	$	(61,826)	⁽²⁾	$	(138,827)

(1)Net of deferred income tax benefit of $5,597 and $5,474 as of June 30, 2020 and December 31, 2019, respectively.

(2)Net of deferred income tax expense of $1,246 and $14,273 as of June 30, 2020 and December 31, 2019, respectively.

(3)Net of deferred income tax benefit of $123.

(4)Net of deferred income tax benefit of $10,964 and $2,063 for Other comprehensive income before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, as of June 30, 2020. For additional information, see Note 13. Derivative Financial Instruments.

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

The Company has elected the portfolio approach for the deferred tax asset of the unrealized gains and losses related to the interest rate swap contracts in Accumulated other comprehensive loss, net within the ~~accompanying~~ Consolidated Balance Sheets. Under the portfolio approach, the disproportionate tax effect created, when the valuation allowance was appropriately released as a tax benefit into continuing operations in 2010, will reverse out of the Accumulated other comprehensive loss, net line within the ~~accompanying~~ Consolidated Balance Sheets and into continuing operations as a tax expense when the Company ceases to hold any interest rate swap contracts. As of ~~March 31,~~June 30, 2020, the disproportionate tax effect is $14.6 million.

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(7) Intangible Assets

Goodwill

For the goodwill impairment evaluation as of December 31, 2019, the Company elected to perform the optional qualitative assessment allowed under the applicable guidance to determine if it was necessary to perform a quantitative assessment for any reporting unit. Based on the results of the qualitative assessment, the Company determined that it was not more likely than not that the carrying value of its U.S., U.K., Australia & New Zealand, South Africa, Germany and Mexico reporting units exceeded their fair value. As such, the Company determined that a quantitative assessment was not necessary for these reporting units. The Company did, however, identify impairment indicators associated with the Canada reporting unit, which required the Company to complete a quantitative impairment assessment.

For the quantitative assessment prepared for the Canada reporting unit as of December 31, 2019, the Company prepared a 5-year cash flow forecast, ~~which~~that incorporated assumptions on operating efficiencies and increased resulting cash flows over time ~~and~~at a discount rate of 10%. Based on this estimation, the carrying value of the reporting unit exceeded its fair value by $7.3 million. Therefore, consistent with the early adoption of ASU 2017-4, the Company recognized a goodwill impairment of $7.3 million, the amount by which the carrying amount of the Canada reporting unit exceeded its fair value. This impairment was recognized during the three months ended December 31, 2019 in the Loss on disposal and impairment of assets line of the Company's Consolidated Statements of Operations together with certain unrelated disposals in the ordinary course of business. After the impairment, the Canada reporting unit's goodwill was approximately $104 million at December 31, 2019.

During the three months ended March 31, 2020, and in response to the global economic impact of the ~~COVID-19 pandemic,~~Pandemic, the Company performed an additional qualitative assessment and determined that it was not more likely than not that the carrying value of its U.S., U.K., Australia & New Zealand, South Africa, Germany and Mexico reporting units exceeded their fair value. As such, the Company determined that a quantitative assessment was not necessary for these reporting units. For the Canada reporting unit, ~~considering the goodwill impairment recognized during the three months ended December 31, 2019,~~ the Company bypassed the optional qualitative assessment and performed an updated quantitative ~~assessment.~~assessment as of March 31, 2020. For this quantitative assessment, the Company prepared a revised cash flow forecast that incorporated the estimated ~~COVID-19~~Pandemic impact, assumptions on operating efficiencies and resulting cash flows over time ~~and~~at a discount rate of 9.7%. Based on this quantitative test, the fair value of the reporting unit marginally exceeded its carrying value and no additional goodwill impairment was recognized.

During the three months ended June 30, 2020, the Company's reporting units, including Canada, performed consistent with the forecasts used as of March 31, 2020, and therefore, the Company did not identify impairment indicators. The Canada reporting unit's goodwill was approximately ~~$95.6~~$99 million at ~~March 31,~~June 30, 2020. To the extent that the Company is unable to meet its forecasts in the future or there are changes in the discount rate, further impairment charges are possible.

The following table presents the net carrying amounts of the Company’s Goodwill as of ~~March 31,~~June 30, 2020 and December 31, 2019, as well as the changes in the net carrying amounts for the ~~three~~six months ended ~~March 31,~~June 30, 2020 by segment. As of ~~March 31,~~June 30, 2020, the Company held no significant indefinite-lived assets. For additional information related to the Company’s segments, see Note 17. Segment Information.


	North America		Europe & Africa		Australia & New Zealand		Total
	(In thousands)
Goodwill, gross as of December 31, 2019	$	561,513	$	236,992	$	151,431	$	949,936
Accumulated impairment loss	(7,303)		(50,003)		(140,038)		(197,344)
Goodwill, net as of December 31, 2019	$	554,210	$	186,989	$	11,393	$	752,592

Foreign currency translation adjustments	(4,859)		(17,771)		(222)		(22,852)

Goodwill, gross as of June 30, 2020	556,654		219,221		151,209		927,084
Accumulated impairment loss	(7,303)		(50,003)		(140,038)		(197,344)
Goodwill, net as of June 30, 2020	$	549,351	$	169,218	$	11,171	$	729,740

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North America Europe & Africa Australia & New
Zealand Total

(In thousands)
Goodwill, gross as of December 31, 2019 $ 561,513 $ 236,992 $ 151,431 $ 949,936
Accumulated impairment loss (7,303) (50,003) (140,038) (197,344)
Goodwill, net as of December 31, 2019 $ 554,210 $ 186,989 $ 11,393 $ 752,592
Foreign currency translation adjustments (8,579) (18,484) (1,417) (28,480)
Goodwill, gross as of March 31, 2020 552,934 218,508 150,014 921,456
Accumulated impairment loss (7,302) (50,003) (140,038) (197,343)
Goodwill, net as of March 31, 2020 $ 545,632 $ 168,505 $ 9,976 $ 724,113

Intangible Assets with Definite Lives

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


		March 31, 2020										December 31, 2019											June 30, 2020				December 31, 2019
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
		(In thousands)																							(In thousands)
Merchant and bank-branding contracts/relationships	Merchant and bank-branding contracts/relationships	$	477,449	$	(390,519)	$	86,930	$	489,363	$	(388,598)	$	100,765	Merchant and bank-branding contracts/relationships	$	480,852	$	(398,945)	$	81,907	$	489,363	$	(388,598)	$	100,765
Trade names	Trade names	17,209		(12,013)		5,196		18,391		(12,792)		5,599		Trade names	17,628		(12,555)		5,073		18,391		(12,792)		5,599
Technology	Technology	12,239		(8,201)		4,038		12,389		(7,952)		4,437		Technology	11,934		(8,322)		3,612		12,389		(7,952)		4,437
Non-compete agreements	Non-compete agreements	4,334		(4,334)		—		4,408		(4,408)		—		Non-compete agreements	4,348		(4,348)		—		4,408		(4,408)		—
Revolving credit facility deferred financing costs	Revolving credit facility deferred financing costs	5,256		(2,299)		2,957		5,256		(2,132)		3,124		Revolving credit facility deferred financing costs	5,355		(1,995)		3,360		5,256		(2,132)		3,124
Total intangible assets with definite lives	Total intangible assets with definite lives	$	516,487	$	(417,366)	$	99,121	$	529,807	$	(415,882)	$	113,925	Total intangible assets with definite lives	$	520,117	$	(426,165)	$	93,952	$	529,807	$	(415,882)	$	113,925

During the three months ended June 30, 2020, the Company expensed approximately $0.8 million of deferred financing costs associated with its revolving credit facility upon entering into a third amendment to the revolving credit facility agreement, which reduced the borrowing capacity of the facility. This expense was recognized in the Amortization of deferred financing costs and note discount line of the Consolidated Statements of Operations. See Note 9. Current and Long-Term Debt.

(8) Accrued Liabilities

The Company’s accrued liabilities consisted of the following:


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
		(In thousands)							(In thousands)
Accrued merchant settlement	Accrued merchant settlement	$	103,525	$	154,181	Accrued merchant settlement	$	154,548	$	154,181
Accrued merchant fees						Accrued merchant fees	27,990		33,037
Accrued taxes	Accrued taxes	36,069		36,067		Accrued taxes	16,054		36,067
Accrued merchant fees		27,541		33,037
Accrued purchases	Accrued purchases	18,890		7,138		Accrued purchases	10,931		7,138
Accrued processing costs	Accrued processing costs	11,889		12,159		Accrued processing costs	10,468		12,159
Accrued cash management fees						Accrued cash management fees	9,702		9,291
Accrued armored	Accrued armored	10,004		8,307		Accrued armored	9,528		8,307
Accrued maintenance	Accrued maintenance	8,243		6,463		Accrued maintenance	7,613		6,463
Accrued compensation						Accrued compensation	7,587		23,676
Accrued interest	Accrued interest	8,221		3,775		Accrued interest	3,071		3,775
Accrued compensation		7,401		23,676
Accrued cash management fees		7,148		9,291
Accrued telecommunications costs	Accrued telecommunications costs	1,388		1,664		Accrued telecommunications costs	1,521		1,664

Other accrued expenses	Other accrued expenses	34,535		39,004		Other accrued expenses	39,622		39,004
Total accrued liabilities	Total accrued liabilities	$	274,854	$	334,762	Total accrued liabilities	$	298,635	$	334,762

1821

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(9) Current and Long-Term Debt

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


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
		(In thousands)							(In thousands)
Revolving credit facility, including swingline credit facility (weighted average combined interest rate of 2.4% and 2.3% as of March 31, 2020 and December 31, 2019, respectively)		$	746,620	$	167,227
5.50% Senior Notes due May 2025, net of capitalized debt issuance costs		296,707		296,545
1.00% Convertible Senior Notes due December 2020, net of unamortized discount and capitalized debt issuance costs		278,861		275,703
Revolving credit facility due September 2024, including swingline credit facility						Revolving credit facility due September 2024, including swingline credit facility	$	—	$	167,227
Term loan facility due June 2027, net of unamortized discount and capitalized debt issuance costs						Term loan facility due June 2027, net of unamortized discount and capitalized debt issuance costs	482,844		—
5.50% Senior notes due May 2025, net of unamortized capitalized debt issuance costs						5.50% Senior notes due May 2025, net of unamortized capitalized debt issuance costs	296,869		296,545
1.00% Convertible senior notes due December 2020, net of unamortized discount and capitalized debt issuance costs						1.00% Convertible senior notes due December 2020, net of unamortized discount and capitalized debt issuance costs	113,383		275,703
Total Debt	Total Debt	1,322,188		739,475		Total Debt	893,096		739,475
Less: Current portion	Less: Current portion	(278,861)		—		Less: Current portion	(118,383)		—
Total Long-Term Debt	Total Long-Term Debt	$	1,043,327	$	739,475	Total Long-Term Debt	$	774,713	$	739,475

The Term Loan Facility (or "Term Loan") due June 2027 with a face value of $500 million is presented net of unamortized discount and capitalized debt issuance costs of $17.2 million as of June 30, 2020. Mandatory quarterly installments of principal repayments under the Term Loan, totaling $5.0 million in the next twelve months, are presented in the Current portion of long-term debt line of the Company's Consolidated Balance Sheet as of June 30, 2020. The 5.50% Senior Notes due 2025 (the “2025 Notes”) with a face value of $300.0 million are presented net of unamortized capitalized debt issuance cocosts o~~sts of $3.3~~f $3.1 million and and $3.5 million as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively. The 1.00% Convertible ~~Notes~~senior notes due December 2020 (the ~~"2020~~"Convertible Notes") with a face value of $115.6 million and $287.5 million as of June 30, 2020 and December 31, 2019, respectively, are presented net of unamortized ~~discount~~discounts and capitalized debt issuance costs of ~~$8.6~~$2.2 million and $11.8 million as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively. The ~~2020~~Convertible Notes are presented in the Current portion of long-term debt line of the Company's Consolidated Balance Sheet as of ~~March 31,~~June 30, 2020.

Revolving Credit Facility

On ~~September 19, 2019,~~May 29, 2020, the Company entered into a ~~first~~second amendment to its second amended and restated credit agreement (the ~~“Credit Agreement”~~"Second Amendment"). ~~The Credit Agreement provides~~Given the unprecedented conditions across all of the markets in which the Company ~~with~~operates, due to the impact of the Pandemic and as a ~~$750 million revolving credit facility maturing on September 19, 2024, and accordion feature allowing~~precautionary measure, the Company sought this amendment to ~~(a) increase~~provide financial covenant relief should transactions and corresponding revenues not recover or further weaken from more recent results. With this amendment the ~~available borrowings under~~covenant levels for the credit facility to $850 million and (b) incur incremental term loans under the facility. Any term loans will rank equal in right of payment with revolving loans under the credit facility and will not mature earlier than the revolving loans.

The total commitments under the credit facility can be borrowed in U.S. dollars, alternative currencies (including Euros, U.K. pounds sterling, Canadian dollars, Australian dollars and South African rand), or a combination thereof. Borrowings (not including swingline loans) accrue interest, at the Company’s option and based on the type of currency borrowed, at the Alternate Base Rate, the Canadian Prime Rate, the Adjusted LIBO Rate, the Canadian Dealer Offered Rate, the Bank Bill Swap Reference Rate or the Johannesburg Interbank Agreed Rate (each, as defined in the Credit Agreement) plus a margin depending on the Company’s most recent Total Net Leverage Ratio (as defined in the ~~Credit Agreement)~~Second Amendment) were revised to provide for a Restricted Period, which will end on (a) October 1, 2021; or (b) the date on which (i) the Company terminates the Restricted Period at its election and (ii) as modified by the third amendment, the Total Net Leverage ratio does not exceed 4.50 to 1.0 (the "Restricted Period"). ~~The margin~~Under the Second Amendment, in consideration for ~~Alternative Base Rate loans and Canadian Prime Rate loans varies between 0% and 0.75%,~~the financial covenant relief, the interest rates for borrowings and the ~~margin for Adjusted LIBO Rate loans, Canadian Dealer Offered Rate loans, Bank Bill Swap Reference Rate loans~~issuance of letters of credit and ~~Johannesburg Interbank Agreed Rate Loans varies between 1.00%~~fees payable on any unused amounts of the revolving credit facility are subject to certain upward adjustments, including new applicable margins above base rates and ~~1.75%. Swingline loans denominated~~commitment fee rates when the Total Net Leverage Ratio exceeds 4.00 to 1.0 and 5.00 to 1.00 and amended base rate floors during the Restricted Period. The Second Amendment provides that the Company is subject to some additional limitations under certain covenant baskets while financial covenant relief remains in ~~U.S. dollars bear interest at~~effect.

On June 29, 2020, the ~~Alternate Base Rate plus~~Company entered into a ~~margin as described above, swingline loans denominated~~third amendment to its second amended and restated credit agreement (as amended the "Amended Credit Agreement"), in ~~Canadian dollars bear interest at~~conjunction with the ~~Canadian Prime Rate plus a margin as described above~~Term Loan issuance. The third amendment decreased the Company's available borrowing capacity under the revolving credit agreement from $750 million to $600 million and ~~swingline loans denominated~~modified various terms, conditions and covenants. As modified by the Second Amendment, most changes during the period of financial covenant relief remain in ~~other alternative currencies bear interest at~~place.

Due to the ~~Overnight Foreign Currency Rate (as defined~~reduction in capacity under the Amended Credit Agreement, the Company expensed approximately $1.2 million of the deferred financing costs and amendment fees, presented within Amortization of deferred financing costs and note discount line in the Consolidated Statement of Operations. The deferred financing costs associated with the Amended Credit ~~Agreement) plus the applicable margin for the Adjusted LIBO Rate, the Bank Bill Swap Reference Rate or the Johannesburg Interbank Agreed Rate, as applicable.~~Agreement are classified within Intangible assets, net and presented within Note 7. Intangible Assets.

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

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Financial covenants under the Amended Credit Agreement are determined as of the last day of each fiscal quarter. The Company is required to maintain an Interest Coverage Ratio, as defined in the Amended Credit ~~Agreement. The obligations~~Agreement, of no less than 3.00 to 1.00. During the Restricted Period, the Amended Credit Agreement provides for adjustments to the Total Net Leverage Ratio covenant as follows: (i) for the fiscal quarters ending June 30, 2020, and September 30, 2020, the Total Net Leverage Ratio shall not exceed 4.25 to 1.0; (ii) for the fiscal quarter ending December 31, 2020, the Total Net Leverage Ratio shall not exceed 5.25 to 1.0; (iii) for the fiscal quarter ending March 31, 2021, the Total Net Leverage Ratio shall not exceed 5.50 to 1.0; (iv) for the fiscal quarter ending June 30, 2021, the Total Net Leverage Ratio shall not exceed 5.25 to 1.0; and (v) for the fiscal quarter ending September 30, 2021, the Total Net Leverage Ratio shall not exceed 5.00 to 1.0. For each fiscal quarter ending on or after the end of the Restricted Period, the Company shall not permit the Total Net Leverage ratio to exceed 4.50 to 1.0.

Additionally, the Company is limited in its ability to make certain payments. Such restricted payments are generally not permitted in the Restricted Period; however, outside of the ~~CFC Borrowers are guaranteed by~~Restricted Period the ~~CFC Guarantors~~Company may generally make such restricted payments so long as no event of default exists at the time of such payment and ~~secured by substantially~~would not result therefrom and the Total Net Leverage Ratio is less than 3.75 to 1.00 at the time such restricted payment is made. As of June 30, 2020, the Company was in compliance with all ofapplicable covenants and ratios under the ~~assets of the CFC Guarantors.~~Amended Credit Agreement.

The Amended Credit Agreement contains representations, warranties and covenants that are customary for similar credit arrangements, including, among other things, covenants relating to: (i) financial reporting and notification, (ii) payment of obligations, (iii) compliance with applicable laws, (iv) notification of certain events, and (v) certain covenants relating to, among other things, the sale or transfer of assets, fundamental changes, incurrence or guarantee of indebtedness, liens,

~~Table of Conte~~n t s

investments, hedging transactions, transactions with affiliates and sale and leaseback transactions. ~~Financial covenants~~

As of June 30, 2020, the Company had 0 outstanding borrowings under its $600 million revolving credit facility. The Company had $8.9 million outstanding in ~~the~~letters of credit. The Amended Credit Agreement ~~require~~matures on September 19, 2024.

Term Loan Facility

On June 29, 2020, the Company entered into the Term Loan, by and among the Company, certain of its subsidiaries (including Cardtronics USA, Inc. as the “Borrower”), the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Pursuant to ~~maintain: (i) as~~the Term Loan, the Company borrowed $500 million of aggregate principal. Upon closing, the Company used the net proceeds to repay outstanding borrowings under its revolving credit facility. The Term Loan was issued with an original issue discount of 175 basis points and interest accrues from June 29, 2020, at the rate of LIBOR plus 400 basis points, with a 1.00% LIBOR floor. Interest is payable quarterly, or in shorter intervals for LIBOR borrowings with a duration of less than three months.

The Term Loan matures on June 29, 2027, and it requires installment principal repayments equal to 1% of the ~~last day of any fiscal quarter, a Total Net Leverage Ratio~~aggregate principal per annum, paid quarterly, with the outstanding balance due on the maturity date. Certain other mandatory prepayments, including mandatory prepayments based on Excess Cash Flow (as defined in the Term Loan Credit Agreement) ~~of no more than 4.25 to 1.00, and (ii) as~~on an annual basis, are required commencing following the end of the ~~last day~~fiscal year ending December 31, 2021. Outstanding balances are fully prepayable on a voluntary basis at par, subject to premiums for certain repricing or refinancing transactions, but may not be borrowed again once prepaid.

The guarantors of ~~any fiscal quarter, an Interest Coverage Ratio~~the Term Loan (as defined in the Term Loan Credit Agreement) have guaranteed the full and punctual payment of ~~no less than 3.00 to 1.00. Additionally,~~ the ~~Company is limited in its ability to make restricted payments; however,~~obligations under the ~~Company may generally make restricted payments so long as no event of default exists at the time of such payment~~Term Loan and the ~~Total Net Leverage Ratio is less 3.75 to 1.00 at the time such restricted payment is made. As of March 31, 2020, the Company’s actual Total Net Leverage Ratio was 2.4 and its Interest Coverage Ratio was 11.7~~.

~~In March 2020, in anticipation of the maturity of the Convertible Notes due on December 1, 2020 and for additional liquidity as a~~ ~~precautionary~~ measure given the economic uncertainty caused by the worldwide COVID-19 pandemic, the Company drew all of the borrowing capacity under our credit facility resulting in the Company holding $613.7 million in cash as of March 31, 2020. As of March 31, 2020, the Company had $746.6 million of outstanding borrowings under its $750 million revolving credit ~~facility and was in compliance with all applicable covenants and ratios~~obligations under the ~~Credit Agreement. The Company also had $10.0 million~~ ~~outstanding in letters of credit. The weighted average interest rates on the Company’s outstanding borrowings under the revolving credit facility were~~ ~~2.4% and2.3%,~~ ~~as of March 31, 2020 and December 31, 2019, respectively.~~

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

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

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

The Convertible Notes have a conversion price of $52.35 per share, which equals a conversion rate of 19.1022 shares per $1,000 principal amount of Convertible Notes, for a total of approximately 5.5 million shares underlying the debt. The conversion rate, however, is subject to adjustment under certain circumstances. Conversion can occur: (i) any time on or after September 1, 2020, (ii) after March 31, 2014, during any calendar quarter that follows a calendar quarter in which the price of the shares exceeds 135% of the conversion price for at least 20 days during the 30 consecutive trading-day period ending on the last trading day of the quarter, (iii) during the 10 consecutive trading-day period following any ~~five~~ consecutive trading-day period in which the trading price of the Convertible Notes is less than 98% of the closing price of the shares multiplied by the applicable conversion rate on each such trading day, (iv) upon specified distributions to Cardtronics plc’s shareholders upon recapitalizations, reclassifications, or changes in shares, and (v) upon a make-whole fundamental change. A fundamental change is defined as any one of the following: (i) any person or group that acquires 50% or more of the total voting power of all classes of common equity that is entitled to vote generally in the election of Cardtronics plc’s directors, (ii) Cardtronics plc engages in any recapitalization, reclassification, or changes of common shares as a result of which the shares would be converted into or exchanged for, shares, other securities, other assets, or property, (iii) Cardtronics plc engages in any share exchange, consolidation, or merger where the shares converted into cash, securities, or other property, (iv) the Company engages in certain sales, leases, or other transfers of all or substantially all of the ~~consolidated~~ assets ~~or (v) Cardtronics plc’s shares are not listed for trading on any U.S. national securities exchange.~~of such guarantors.

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NaN of the Convertible Notes were deemed convertible as of March 31, 2020. The Convertible Notes are due December 1, 2020 and are classified as a current liability in the Company's Consolidated Balance Sheets at March 31, 2020, as the Company has drawn its revolver in anticipation of the retirement of the Convertible Notes.

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

The ~~Company’s interest expense related~~Term Loan contains covenants that are customary for similar credit arrangements, including, among other things, covenants relating to: (i) financial reporting and notification, (ii) payment of obligations, (iii) compliance with applicable laws,(iv) notification of certain events, and (v) certain covenants relating to, among other things, the ~~Convertible Notes consisted~~sale or transfer of ~~the following:~~

Three Months Ended
March 31,
2020 2019
(In thousands)
Cash interest per contractual coupon rate $ 719 $ 719
Amortization of note discount 2,929 2,780
Amortization of debt issuance costs 228 206
Total interest expense related to Convertible Notes $ 3,876 $ 3,705

assets, fundamental changes, incurrence or guarantee of indebtedness, liens, investments, hedging transactions, transactions with affiliates, sale and leaseback transactions and payment capacity. The ~~Company’s carrying value of the Convertible Notes consisted of the following:~~

March 31, 2020 December 31, 2019
(In thousands)
Principal balance $ 287,500 $ 287,500
Unamortized discount and capitalized debt issuance costs (8,639) (11,797)
Net carrying amount of Convertible Notes $ 278,861 $ 275,703

In connection with the issuance of the Convertible Notes, Cardtronics, Inc. entered into separate convertible note hedge and warrant transactions to reduce the potential dilutive impact upon the conversion of the Convertible Notes. The net effect of these transactions effectively raised the price at which dilution would occur from the $52.35 initial conversion price of the Convertible Notes to $73.29. Pursuant to the convertible note hedge, Cardtronics, Inc. purchased call options granting Cardtronics Inc. the right to acquire up to approximately 5.5 million common shares with an initial strike price of $52.35. The call options automatically become exercisable upon conversion of the Convertible Notes, and will terminate on the second scheduled trading day immediately preceding December 1, 2020. Cardtronics Inc. also sold to the initial purchasers warrants to acquire up to approximately 5.5 million common shares with a strike price of $73.29. The warrants will expire incrementally on a series of expiration dates subsequent to the maturity date of the Convertible Notes through August 30, 2021. If the conversion price of the Convertible Notes remains between the strike prices of the call options and warrants, Cardtronics plc’s shareholders willTerm Loan does not ~~experience~~have any dilution in connection with the conversion of the Convertible Notes; however, to the extent that the price of the shares exceeds the strike price of the warrants on any or all of the series of related expiration dates of the warrants, Cardtronics plc would be required to issue additional shares to the warrant holders. The amounts allocated to both the note hedge and warrants were recorded in the Shareholders’ equity section in the accompanying Consolidated Balance Sheets.financial covenants.

$300.0 million 5.50% Senior Notes Due 2025

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

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

The 2025 Notes and the related guarantees (the “2025 Guarantees”) are the general unsecured senior obligations of each of the 2025 Notes Issuers and the 2025 Notes Guarantors, respectively, and rank: (i) equally in right of payment with all of the 2025 Notes Issuers’ and the 2025 Notes Guarantors’ existing and future senior indebtedness and (ii) senior in right of payment to all of the 2025 Notes Issuers’ and the 2025 Notes Guarantors’ future subordinated indebtedness. The 2025 Notes and the 2025 Guarantees are effectively subordinated to any of the 2025 Notes Issuers’ and the 2025 Notes Guarantors’ existing and

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future secured debt to the extent of the collateral securing such debt, including all borrowings under the Company’s revolving credit ~~facility.~~facility and Term Loan. The 2025 Notes are structurally subordinated to all third-party liabilities of any of Cardtronics plc’s subsidiaries (excluding the 2025 Notes Issuers) that do not guarantee the 2025 Notes.

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

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

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

The 2025 Notes contain various covenants restricting the Company's investments, indebtedness, and payments.

1.00% Convertible Senior Notes Due 2020 and Related Equity Instruments

On November 19, 2013, Cardtronics, Inc. issued the Convertible Notes at par value of $287.5 million. After bifurcating the embedded conversion option and classifying it within equity, the Company recorded the notes at a discount, determining that the fair value of the debt component to be $215.8 million. Taking into account the discount resulting from the bifurcation, the effective interest rate recognized on the Convertible Notes is approximately 5.26%. Interest on the Convertible Notes accrues at the rate of 1.00% per annum and is payable semi-annually in cash in arrears on June 1 and December 1 of each year.

In June 2020, the Company repurchased and cancelled an aggregate principal amount of Convertible Notes equal to $171.9 million. The Company recognized a loss on extinguishment of $3.0 million in conjunction with the repurchase and cancellation of these notes.

The Convertible Notes that remain outstanding have a conversion price of $52.35 per share, which equals a conversion rate of 19.1022 shares per $1,000 principal amount of the Convertible Notes. The principal amount outstanding at June 30, 2020, of $115.6 million, is convertible into approximately 2.2 million shares. The conversion rate, however, is subject to adjustment under certain circumstances. Conversion can occur: (i) any time on or after September 1, 2020, (ii) after March 31, 2014, during any calendar quarter that follows a calendar quarter in which the price of the shares exceeds 135% of the conversion price for at least 20 days during the 30 consecutive trading-day period ending on the last trading day of the quarter, (iii) during the 10 consecutive trading-day period following any five consecutive trading-day period in which the trading price of the Convertible Notes is less than 98% of the closing price of the shares multiplied by the applicable conversion rate on each such trading day, (iv) upon specified distributions to Cardtronics plc’s shareholders upon recapitalizations, reclassifications, or changes in shares, and (v) upon a make-whole fundamental change, as defined in the indenture. As of June 30, 2020, none of the Convertible Notes were deemed convertible due to the conditions above.

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

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	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Cash interest per contractual coupon rate	$	686	$	719	$	1,405	$	1,438
Amortization of note discount	2,968		2,816		5,898		5,596
Amortization of debt issuance costs	233		211		461		417
Total interest expense related to Convertible Notes	$	3,887	$	3,746	$	7,764	$	7,451

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


	June 30, 2020		December 31, 2019
	(In thousands)
Principal balance	$	115,568	$	287,500
Unamortized discount and capitalized debt issuance costs	(2,185)		(11,797)
Net carrying amount of Convertible Notes	$	113,383	$	275,703

Concurrent with the issuance of the Convertible Notes, Cardtronics, Inc. entered into separate convertible note hedge and warrant transactions to reduce the potential dilutive impact upon the conversion of the Convertible Notes. The net effect of these transactions effectively raised the price at which dilution would occur from the $52.35 initial conversion price of the Convertible Notes to $73.29. Consistent with the potential conversion of the original $287.5 million principal amount, Cardtronics, Inc. entered into a convertible note hedge purchasing call options granting Cardtronics Inc. the right to acquire up to approximately 5.5 million common shares with an initial strike price of $52.35. Cardtronics Inc. also sold warrants related to approximately 5.5 million common shares with a strike price of $73.29. The amounts allocated to both the note hedge and warrants were recorded in the Shareholders' equity section in the Consolidated Balance Sheets.

On June 30, 2020, the Company entered into agreements with the counterparties of the convertible note hedges and warrants to terminate a proportionate amount of the instruments, corresponding to the portion of the Convertible Notes cancelled in June 2020, (“Partial Unwind”), for net consideration to the counterparties of $1.0 million. Following the Partial Unwind, the Company retained the right to acquire up to approximately 2.2 million common shares with a strike price of $52.35.

The call options under the note hedge automatically become exercisable upon conversion of the Convertible Notes and terminate on the second scheduled trading day immediately preceding December 1, 2020. The remaining 2.2 million warrants outstanding have a strike price of $73.29 and expire incrementally on a series of expiration dates from June 2021 through August 30, 2021.

If the share price of the Company's stock remains between the strike prices of the call options and warrants, Cardtronics plc’s shareholders will not experience any dilution in connection with the conversion of the Convertible Notes; however, to the extent that the price of the shares exceeds the strike price of the warrants on any or all of the series of related expiration dates of the warrants, Cardtronics plc would be required to, at the Company’s election, (i) issue additional shares to the warrant holders or (ii) settle the difference between the price of the shares and the strike price of the warrants in cash to the warrant holders.

(10) Asset Retirement Obligations

Asset retirement obligations (“ARO”) consist of costs to deinstall the Company’s ATMs and restore the ATM sites to their original condition. These costs to deinstall ATMs are estimated based on current market rates. In most cases, the Company is contractually required to perform the deinstallation of company-owned ATMs, and in some cases, site restoration work. For each group of similar ATM placements, the Company estimates the fair value of the future ARO based on the discounted estimated future cash flows and recognizes the amount as a liability in the ~~accompanying~~ Consolidated Balance Sheets. The Company capitalizes the initial estimated fair value of the future ARO as part of the cost basis of the related assets and depreciates the ARO assets on a straight-line basis over their estimated useful lives, which are based on the average time period that an ATM is installed in a location before being deinstalled. The ARO liabilities, which are recognized at discounted amounts, are accreted to their estimated future value over the same period of time.

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


	~~March 31,~~June 30, 2020
	(In thousands)

Asset retirement obligations at December 31, 2019	$	61,194
Additional obligations	~~442~~772
Accretion expense	~~437~~821

Payments	~~(660)~~(2,280)
Foreign currency translation adjustments	~~(2,566)~~(2,139)
Asset retirement obligations at ~~March 31,~~June 30, 2020	~~58,847~~58,368
Less: current portion of asset retirement obligations (see Note 12. Other Liabilities)	~~5,488~~ (5,574)
Asset retirement obligations, excluding current portion, at ~~March 31,~~June 30, 2020	$	~~53,359~~52,794

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

~~Table of Conte~~n t s

(11) Leases

The Company leases facilities consisting of office and warehouse space as well as vehicles and office equipment. The Company's facility leases have various remaining terms extending ~~up to 12~~over 11 years, some of which may include one or more options to extend the associated lease term by up to 5-10 years, and some may include options for the Company or the lessor to terminate the leases prior to the end of the lease term. The exercise of lease renewal options is at the Company's discretion. From time to time, the Company may sublease office or warehouse space. This sublease activity is currently not significant. The Company's vehicle and office equipment leases currently have remaining lease terms extending up to 53 years and these leases typically have original terms of approximately 4-6 years. The Company has not historically extended its vehicle and office equipment leases beyond their original term. Similarly, the Company has not historically subleased these assets.

In addition, certain ATM placement agreements are deemed to contain an operating lease of merchant space under the Lease Standard. These ATM placement agreements have remaining terms extending from less than 1 year to more than 5 years. These arrangements consist of semi-permanent or through-the-wall placements of company-owned ATMs at merchant or financial institution locations. These arrangements are deemed to contain a lease as the counterparty lacks the practical ability to substitute alternative space. The renewal provisions under ATM placement agreements vary.

The Company's through-the-wall ATM placement agreements that require fixed payments are deemed to contain an operating ~~lease require fixed and~~lease. These placement agreements may also require variable merchant ~~commissions. The variable payments are~~commissions based on the type and volume of transactions conducted onat the ATMs at ~~each~~their respective location. To the extent the merchant commissions are variable, the commission payments to the merchants are not deemed part of the lease payment that gives rise to the operating lease asset and operating lease liability recognized on the Company's Consolidated Balance Sheets. In addition, the merchant commissions may also change, in accordance with the terms of these agreements, ~~responsive~~in response to changes in interchange fees or interest rates. Certain Company facility leases require variable payments based on an index or ~~based on~~ external market rates. The Company's vehicle and office equipment leases do not generally include variable payments.

The Company recognizes the accounting impact of lease extension options when reasonably certain that a right to extend a lease will be exercised. The Company does not provide residual value guarantees within or in conjunction with any of its leases. As of ~~March 31,~~June 30, 2020, all material leases of facilities, vehicles, office equipment, and merchant space had commenced.

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

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Balance sheet information related to operating leases is as follows:


		Classification	March 31, 2020		December 31, 2019			Classification		June 30, 2020		December 31, 2019
Assets	Assets		(In thousands)						Assets			(In thousands)
Operating lease assets	Operating lease assets	Operating lease assets	$	69,622	$	76,548	Operating lease assets	Operating lease assets		$	61,544	$	76,548
Total operating lease assets	Total operating lease assets		$	69,622	$	76,548	Total operating lease assets			$	61,544	$	76,548

Liabilities	Liabilities						Liabilities
Current	Current						Current
Operating lease liabilities	Operating lease liabilities	Current portion of other long-term liabilities	18,943		$	20,345	Operating lease liabilities	Current portion of other long-term liabilities		$	17,472	$	20,345
Noncurrent	Noncurrent						Noncurrent
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	63,827		69,531		Noncurrent operating lease liabilities	Noncurrent operating lease liabilities		58,414		69,531
Total operating lease liabilities	Total operating lease liabilities		$	82,770	$	89,876	Total operating lease liabilities			$	75,886	$	89,876

~~Table of Conte~~n t s

Operating lease costs during the three and six months ended ~~March 31,~~June 30, 2020 and 2019 were as follows:

Three Months Ended March 31
Classification 2020 2019
(In thousands)
Operating lease costs
Cost of ATM operating revenues ⁽¹⁾
$ 5,973 $ 7,390
Operating lease costs
Selling, general, and administrative expenses ⁽²⁾
1,299 1,783
Total operating lease cost $ 7,272 $ 9,173


			Three Months Ended		Six Months Ended
	Classification		June 30, 2020		June 30, 2020
		(In thousands)
Operating lease costs	Cost of ATM operating revenues ⁽¹⁾		$	5,133	$	11,106
Operating lease costs	Selling, general, and administrative expenses ⁽²⁾		1,248		2,547
Total operating lease cost			$	6,381	$	13,653

(1)Includes the fixed and variable cost of facilities, vehicles, and equipment that are deemed direct operating lease costs. The variable lease cost associated with these leases was not significant. In addition, includes the fixed and variable cost associated with ATM placement agreements that are deemed to contain a lease. The variable cost associated with these placements ~~was~~were approximately $0.6 million and $1.2 million in the three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively.

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

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

Lease Term and Discount Rate

March 31, 2020

December 31, 2019

Lease Term and Discount Rate

June 30, 2020

December 31, 2019

Weighted-average remaining lease term (years)

Operating leases

7.0

6.9

Operating leases

7.1

6.9

Weighted-average discount rate

Operating leases

3.39%

3.47%

Operating leases

3.28%

3.47%


		Three Months Ended March 31, 2020		Three Months Ended March 31, 2019			Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
		(In thousands)							(In thousands)
Additional lease information is summarized below:	Additional lease information is summarized below:					Additional lease information is summarized below:
Operating cash outflows resulting from payments of operating lease liabilities	Operating cash outflows resulting from payments of operating lease liabilities	$	5,006	$	5,297	Operating cash outflows resulting from payments of operating lease liabilities	$	9,560	$	10,597
New operating lease assets recognized during the period	New operating lease assets recognized during the period	$	524	$	1,857	New operating lease assets recognized during the period	1,218		7,175

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, the Company paid ~~$5.0~~$9.6 million to satisfy the recognized operating lease obligations. The Company also recognized ~~$0.5~~$1.2 million in new operating lease assets, primarily consisting of equipment leases and ATM placement agreements that are deemed to contain an operating lease. During the six months ended June 30, 2019, the Company paid $10.6 million to satisfy recognized operating lease obligations and also recognized $7.2 million in new operating lease assets, primarily consisting of equipment leases and ATM placement agreements that are deemed to contain an operating lease.

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The following table presents the ~~March 31,~~June 30, 2020 undiscounted cash flows associated with the Company's recognized operating lease liabilities in the next five years and thereafter.


Maturity of Recognized Operating Lease Liabilities	Maturity of Recognized Operating Lease Liabilities	Operating Lease Payments⁽¹⁾		Maturity of Recognized Operating Lease Liabilities	Operating Lease Payments⁽¹⁾
		(In thousands)			(In thousands)
2020	2020	$	18,749	2020	$	14,896
2021	2021	19,524		2021	18,366
2022	2022	12,256		2022	14,758
2023	2023	8,354		2023	7,761
2024	2024	6,548		2024	6,177
After 2024	After 2024	30,398		After 2024	29,106
Total lease payments	Total lease payments	95,829		Total lease payments	91,064
Less: Interest ⁽²⁾	Less: Interest ⁽²⁾	(13,059)		Less: Interest ⁽²⁾	(15,178)
Present value of operating lease liabilities ⁽³⁾	Present value of operating lease liabilities ⁽³⁾	$	82,770	Present value of operating lease liabilities ⁽³⁾	$	75,886

~~Table of Conte~~n t s

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

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

(3)Includes current operating lease liabilities of ~~$19.0~~$17.5 million and noncurrent operating lease liabilities of ~~$63.8~~$58.4 million.

(12) Other Liabilities

The Company’s other liabilities consisted of the following:


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
		(In thousands)							(In thousands)
Current portion of other long-term liabilities	Current portion of other long-term liabilities					Current portion of other long-term liabilities
Interest rate swap and cap contracts	Interest rate swap and cap contracts	$	24,417	$	15,565	Interest rate swap and cap contracts	$	25,196	$	15,565
Operating lease liabilities	Operating lease liabilities	18,943		20,345		Operating lease liabilities	17,472		20,345

Acquisition related contingent consideration	Acquisition related contingent consideration	9,522		4,963		Acquisition related contingent consideration	6,690		4,963
Asset retirement obligations		5,488		5,701
Asset retirement obligations (see Note 10. Asset Retirement Obligations)						Asset retirement obligations (see Note 10. Asset Retirement Obligations)	5,574		5,701
Deferred revenue	Deferred revenue	3,345		3,386		Deferred revenue	4,061		3,386
Other	Other	2,618		3,184		Other	2,930		3,184
Total current portion of other long-term liabilities	Total current portion of other long-term liabilities	$	64,333	$	53,144	Total current portion of other long-term liabilities	$	61,923	$	53,144

Noncurrent portion of other long-term liabilities	Noncurrent portion of other long-term liabilities					Noncurrent portion of other long-term liabilities
Interest rate swap and cap contracts	Interest rate swap and cap contracts	$	34,084	$	9,723	Interest rate swap and cap contracts	$	37,758	$	9,723
Deferred revenue	Deferred revenue	4,811		5,589		Deferred revenue	4,153		5,589
Acquisition related contingent consideration	Acquisition related contingent consideration	—		11,888		Acquisition related contingent consideration	—		11,888
Other	Other	10,196		10,670		Other	9,009		10,670
Total noncurrent portion of other long-term liabilities	Total noncurrent portion of other long-term liabilities	$	49,091	$	37,870	Total noncurrent portion of other long-term liabilities	$	50,920	$	37,870

As of ~~March 31,~~June 30, 2020 and December 31, 2019, the Acquisition related contingent consideration lines consisted of the estimated fair value of the contingent consideration associated with the Spark ATM Systems Pty Ltd. (“Spark”) acquisition in that occurred in 2017.

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(13) Derivative Financial Instruments

Risk Management Objectives of Using Derivatives - Interest rate risk

The Company is exposed to interest rate risk associated with its vault cash rental obligations and ~~borrowings under~~ its ~~revolving credit facility.~~variable rate debt. The Company uses varying notional amount interest rate swap contracts and interest rate cap agreements (“Interest Rate Derivatives”) to manage the interest rate risk associated with its vault cash rental obligations in the U.S., Canada, the U.K., and Australia. ~~The~~Intermittently, the Company has also ~~uses~~used interest rate swap contracts to mitigate its exposure to floating interest rates on its ~~anticipated revolving credit facility borrowings.~~variable rate debt.

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

~~Table~~As of ~~Conte~~n t s

June 30, 2020, the Company was not party to any interest rate swap or cap agreements associated with its variable rate debt. However, on July 30, 2020, the Company executed $250.0 million aggregate notional amount interest rate cap contracts that begin August 3, 2020 and terminate December 31, 2025. These interest rate cap contracts have a cap rate of 1% and have been designated as cash flow hedges of the floating rate interest associated with the Company’s Term Loan.

Risk Management Objectives of Using Derivatives - Foreign Currency Exchange Rate Risk

The Company is also exposed to foreign currency exchange rate risk with respect to its operations outside the U.S. The Company has at times used foreign currency forward contracts to mitigate its foreign exchange rate risk associated with certain anticipated transactions. The Company regularly designates its foreign currency derivatives as cash flow hedges, however, the Company is not presently party to any foreign currency derivatives designated as cash flow hedges. ~~As noted below, the Company is party to certain foreign currency forward contracts that are not designated as hedges at March 31,2020.~~

~~None of the Company’s existing derivative contracts contain credit-risk-related contingent features.~~

Undesignated Foreign Currency Forward Contracts

On October 14, 2019, the Company entered into foreign currency forward contracts with an aggregate notional amount of $150 million and a fixed rate of 1.267 U.S. ~~dollar~~dollars to 1 U.K. pounds sterling. These forward contracts ~~allow~~allowed for settlement between November 2, 2020 and December 1, 2020. Although not designated as hedging instruments for accounting purposes, these forward contracts ~~are~~were associated with the anticipated conversion of U.K. pounds sterling to U.S. dollars intended to partially fund the repayment of the Company's 1.00% Convertible Notes and serve to mitigate currency fluctuation risk. The Company recognized mark-to-market gains of $1.5 million and $12.0 million on these contracts in the three and six months ended June 30, 2020, respectively, and realized a gain of $4.1 million upon terminating these foreign currency contracts in June 2020. These contracts were terminated shortly after completion of the issuance of the new term loan, which provided sufficient funds to repay the Convertible Notes. The mark-to-market and realized gains on the Company's undesignated foreign currency forward contracts are recognized in the Other (income) expenses line of our Consolidated Statements of Operations.

Derivative Accounting Policy

The Interest Rate Derivatives discussed above are used by the Company to hedge its exposure to variability in expected future cash flows attributable to a particular ~~risk;~~risk and therefore ~~they~~typically qualify as and are designated ~~and qualify~~ as cash flow hedging instruments. ~~The Company does not currently hold any interest rate derivative instruments not designated as cash flow hedges.~~

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

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

In accordance with U.S. GAAP, the Company reports the gain or loss related to each highly effective cash flow hedging instrument, including any ineffectiveness, as a component of Accumulated other comprehensive loss, net within the ~~accompanying~~ Consolidated Balance Sheets and reclassifies the gain or loss into earnings within the Cost of ATM operating revenues, Interest expense, net, or Other income lines of the ~~accompanying~~ Consolidated Statements of Operations in the same period or periods during which the hedged transaction affects and has been forecasted in earnings. The classification of the gain or loss is determined based on the associated hedge designation. For additional information related to the Company’s interest rate swap and cap contracts and the associated fair value measurements, see Note 14. Fair Value Measurements.

~~Table~~None of ~~Conte~~n t s

the Company’s existing derivative contracts contain credit-risk-related contingent features.

Summary of Outstanding Interest Rate Derivatives

The notional amounts, weighted average fixed rates, and terms associated with the interest rate swap contracts and cap agreement that are currently in place in the U.S., Canada, the U.K, and Australia (as of the date of the issuance of this 2020 Form 10-Q) are as follows:

Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations

North America – Interest Rate Swap Contracts


Notional Amounts U.S. $	Notional Amounts U.S. $	Weighted Average Fixed Rate	Term	Notional Amounts U.S. $	Weighted Average Fixed Rate	Term
(In millions)	(In millions)			(In millions)
$	1,500	1.69%	April 1, 2020 – December 31, 2020	1,500	1.69%	July 1, 2020 – December 31, 2020
$	1,200	1.46%	January 1, 2021 – December 31, 2021	1,200	1.46%	January 1, 2021 – December 31, 2021
$	1,000	1.17%	January 1, 2022 – December 31, 2022	1,000	1.17%	January 1, 2022 – December 31, 2022
$	600	0.98%	January 1, 2023 – December 31, 2024	600	0.98%	January 1, 2023 – December 31, 2024

Notional Amounts CAD $
Weighted Average Fixed Rate
Term
(In millions)
$ 125 2.46% April 1, 2020 – December 31, 2021

Notional Amounts CAD $

Weighted Average Fixed Rate

Term

(In millions)

125

2.46%

July 1, 2020 – December 31, 2021

North America – Interest Rate Cap Contracts

Notional Amounts
U.S. $

Cap Rate ⁽¹⁾

Term

(In millions)

200

3.25%

January 1, 2021 – December 31, 2023

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

Europe & Africa – Interest Rate Swap Contracts

Notional Amounts

Weighted Average

Notional Amounts

Weighted Average

U.K. £

Fixed Rate

Term

U.K. £

Fixed Rate

Term

(In millions)

500

0.94%

April 1, 2020 – December 31, 2022

550

0.94%

July 1, 2020 – December 31, 2020

500

0.94%

January 1, 2021 – December 31, 2022

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On June 30, 2020, the Company designated interest rate swap contracts with an aggregate notional amount of 50 million U.K. pounds sterling as cash flow hedges of its vault cash rental obligations. These swap contracts were not previously designated. These interest rate swaps have a remaining term ending December 31, 2020 at a fixed rate of 0.95%.

Australia & New Zealand – Interest Rate Swap Contracts


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

~~Table of Conte~~n t s

~~Outstanding~~ Interest Rate Derivatives Previously Associated with Revolving Credit Facility Borrowings

Notional Amounts
U.K. £
Weighted Average Fixed Rate
Term
(In millions)
£ 50 0.95 % April 1, 2020 – December 31, 2020
£ 100 0.64 % January 4, 2021 – December 31, 2021
As of March 31, 2020, the Company was party to the interest rate swap contracts associated with the Company's anticipated revolving credit facility borrowings as reflected in the below table.


Notional Amounts U.K. £		Weighted Average Fixed Rate		Designation	End of Term
(In millions)
£	50	0.95	%	Undesignated	December 31, 2020
£	100	0.64	%	Cash Flow Hedge	December 31, 2021

During the three months ended June 30, 2020, the Company determined that certain previously forecasted borrowings under the revolving credit facility were no longer anticipated primarily due to the completion of the Company's term loan facility issuance. On June 29, 2020, the Company terminated its interest rate swap contracts with an aggregate notional amount of 100 million U.K. pounds sterling. As a result, the Company recognized a net loss of $0.8 million upon settlement of the swaps terminated within the Other (income) expenses line of the Consolidated Statements of Operations. In addition, on June 30, 2020, the Company designated previously undesignated interest rate swap contracts with an aggregate notional amount of 50 million U.K. pounds sterling as a cash flow hedge on the Company's vault cash rental obligations.

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Effects of Interest Rate Swap Contracts on the Consolidated Balance Sheets and Consolidated Statements of Operations

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

Balance Sheet Data

March 31, 2020

December 31, 2019

June 30, 2020

December 31, 2019

Asset (Liability) Derivative Instruments

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Asset (Liability) Derivative Instruments

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(In thousands)

Derivatives designated as hedging instruments:

Interest rate swap and cap contracts

Prepaid expenses, deferred costs, and other current assets

—

Prepaid expenses, deferred costs, and other current assets

1,872

Interest rate swap and cap contracts

Prepaid expenses, deferred costs, and other current assets

—

Prepaid expenses, deferred costs, and other current assets

1,872

Interest rate swap and cap contracts

Prepaid expenses, deferred costs, and other noncurrent assets

—

Prepaid expenses, deferred costs, and other noncurrent assets

8,766

Interest rate swap and cap contracts

Prepaid expenses, deferred costs, and other noncurrent assets

—

Prepaid expenses, deferred costs, and other noncurrent assets

8,766

Interest rate swap and cap contracts

Current portion of other long-term liabilities

(24,417)

Current portion of other long-term liabilities

(7,697)

Interest rate swap and cap contracts

Current portion of other long-term liabilities

(25,196)

Current portion of other long-term liabilities

(7,697)

Interest rate swap and cap contracts

Other long-term liabilities

(34,084)

Other long-term liabilities

(9,723)

Interest rate swap and cap contracts

Other long-term liabilities

(37,758)

Other long-term liabilities

(9,723)

Total derivatives designated as hedging instruments, net

(58,501)

(6,782)

Total derivatives designated as hedging instruments, net

(62,954)

(6,782)

Derivatives not designated as hedging instruments:

Foreign currency forward contracts

Prepaid expenses, deferred costs, and other current assets

2,603

—

Foreign currency forward contracts

Current portion of other long-term liabilities

—

Current portion of other long-term liabilities

(7,868)

Foreign currency forward contracts

Current portion of other long-term liabilities

—

Current portion of other long-term liabilities

(7,868)

Total derivative instruments, net

(55,898)

(14,650)

Total derivative instruments, net

(62,954)

(14,650)

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Statements of Operations Data



	Three Months Ended June 30
Derivatives in Cash Flow Hedging Relationship	Amount of Loss Recognized in Accumulated Other Comprehensive Loss on Derivative Instruments					Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income		Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income
	2020		2019			2020		2019
	(In thousands)							(In thousands)
Interest rate swap contracts	$	(10,563)	$	(13,474)	Cost of ATM operating revenues	$	(7,323)	$	120
Interest rate swap contracts	—		(69)		Interest expense, net	—		(57)
Total	$	(10,563)	$	(13,543)		$	(7,323)	$	63


		Three Months Ended March 31,																	Six Months Ended June 30
Derivatives in Cash Flow Hedging Relationship	Derivatives in Cash Flow Hedging Relationship	Amount of Loss Recognized in Accumulated Other Comprehensive Loss on Derivative Instruments					Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income		Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income						Derivatives in Cash Flow Hedging Relationship	Amount of Loss Recognized in Accumulated Other Comprehensive Loss on Derivative Instruments					Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income
		2020		2019			2020		2019			2020		2019			2020		2019
		(In thousands)							(In thousands)							(In thousands)						(In thousands)
Interest rate swap contracts	Interest rate swap contracts	$	(42,294)	$	(12,109)	Cost of ATM operating revenues	$	(2,619)	$	338	Interest rate swap contracts	$	(52,857)	$	(25,583)	Cost of ATM operating revenues	$	(9,942)	$	458
Interest rate swap contracts	Interest rate swap contracts	(210)		(312)		Interest expense, net	(43)		(56)		Interest rate swap contracts	(210)		(381)		Interest expense, net	(43)		(113)
Total	Total	$	(42,504)	$	(12,421)		$	(2,662)	$	282	Total	$	(53,067)	$	(25,964)		$	(9,985)	$	345

As of ~~March 31,~~June 30, 2020, the Company expects to reclassify ~~$21.8~~25.2 million of net derivative-related losses contained in the Accumulated comprehensive loss, net line within its ~~accompanying~~ Consolidated Balance Sheets into earnings during the next twelve months concurrent with the recording of the related vault cash rental expense amounts.

The following table ~~show~~shows the impact of ~~our~~the Company's cash flow hedge accounting relationships on the ~~statement~~Consolidated Statement of ~~operations~~Operations for the three and six months ended ~~March 31, 2020:~~June 30.

Location and Amount of Loss Recognized in Income on Cash Flow Hedging Relationships in the Three Months Ended
March 31, 2020 March 31, 2019
(In thousands)
Cost of ATM Operating Revenues Interest Expense, net Cost of ATM Operating Revenues
Total amount of expense presented in the statements of operations in which the effects of cash flow hedges are recorded $ 193,665 $ 6,421 $ 206,158
Amount of (loss) gain reclassified from accumulated other comprehensive income into income (2,619) (43) 338


	Location and Amount of Loss (Gain) Recognized in Income on Cash Flow Hedging Relationships in the Three Months Ended
	June 30, 2020						June 30, 2019
	(In thousands)
	Cost of ATM Operating Revenues		Interest Expense, net		Cost of ATM Operating Revenues		Interest Expense, net
Total amount of expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	151,084	$	8,809	$	208,081	$	6,871

Amount of loss (gain) reclassified from Accumulated other comprehensive loss into expense	7,323		—		(120)		57

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	Location and Amount of Loss (Gain) Recognized in Income on Cash Flow Hedging Relationships in the Six Months Ended
	June 30, 2020						June 30, 2019
	(In thousands)
	Cost of ATM Operating Revenues		Interest Expense, net		Cost of ATM Operating Revenues		Interest Expense, net
Total amount of expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	344,749	$	15,230	$	414,239	$	13,514

Amount of loss (gain) reclassified from Accumulated other comprehensive loss into expense	9,942		43		(458)		113

(14) Fair Value Measurements

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of ~~March 31,~~June 30, 2020 and December 31, 2019 using the fair value hierarchy prescribed by U.S. GAAP. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 refers to fair values estimated using significant non-observable inputs. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.


		Fair Value Measurements at March 31, 2020															Fair Value Measurements at June 30, 2020
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
		(In thousands)															(In thousands)
Assets
Assets associated with foreign currency forward contracts		$	2,603	$	—	$	2,603	$	—

Liabilities	Liabilities									Liabilities
Liabilities associated with interest rate swap and cap contracts	Liabilities associated with interest rate swap and cap contracts	$	(58,501)	$	—	$	(58,501)	$	—	Liabilities associated with interest rate swap and cap contracts	$	(62,954)	$	—	$	(62,954)	$	—
Liabilities associated with acquisition related contingent consideration	Liabilities associated with acquisition related contingent consideration	$	(9,522)	$	—	$	—	$	(9,522)	Liabilities associated with acquisition related contingent consideration	$	(6,690)	$	—	$	—	$	(6,690)


	Fair Value Measurements at December 31, 2019
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Assets associated with interest rate swap and cap contracts	$	10,638	$	—	$	10,638	$	—
Liabilities
Liabilities associated with interest rate swap and cap contracts	$	(17,420)	$	—	$	(17,420)	$	—
Liabilities associated with acquisition related contingent consideration	$	(16,851)	$	—	$	—	$	(16,851)
Liabilities associated with foreign currency forward contracts	$	(7,868)	$	—	$	(7,868)	$	—

~~As of December 31, 2019, liabilities associated with Level 2 interest rate swap contracts also include an insignificant amount related to foreign currency forward contracts.~~

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

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

Acquisition related intangible assets. The estimated fair values of acquisition related intangible assets are valued based on a discounted cash flows analysis using significant non-observable (Level 3) inputs. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. An assessment of non-amortized intangible assets is performed on an annual basis or more frequently based on the occurrence of events that might indicate a potential impairment.

Acquisition related contingent consideration. Liabilities from acquisition-related contingent consideration are estimated using market observable inputs and other significant non-observable inputs, as well as projections based on the Company’s best estimate of future operational results upon which the payment of these obligations are contingent. The contingent consideration payment amounts are estimated based upon a formula and projected performance relative to certain agreed-upon earnings ~~targets for 2019 and 2020~~

~~Table of Conte~~n t s

~~to be paid in 2020 and 2021, respectively.~~targets. Subsequent to the Spark acquisition, the Company ~~has~~ utilized a Monte Carlo simulation to estimate the fair value and account for the interdependency between the 2019 and 2020 performance periods. However, effective December 31, 2019, at the end of the first measurement period, the Company revised its methodology and used a Black-Scholes based model to estimate the fair value of the payments.

During the three months ended June 30, 2020, the Company paid $5.2 million to satisfy the 2019 portion of its obligation under the Spark acquisition contingent consideration arrangement. During the three months ended June 30, 2020, the Company recognized a mark-to-market loss of approximately $2.1 million to revise the estimated fair value of the contingent consideration liability and recognized a net foreign exchange loss of approximately $0.3 million to remeasure the South African Rand denominated liability into U.S. Dollars. During the six months ended June 30, 2020, the Company recognized a mark-to-market gain of approximately $2.1 million to revise the estimated fair value of the contingent consideration liability and recognized a net foreign exchange gain of approximately $2.9 million to remeasure the South African Rand denominated liability into U.S. Dollars. Both the revision to the estimated fair values and the net foreign exchange gains and losses are included in the Other (income) expenses line in the Consolidated Statements of Operations. As of June 30, 2020, the estimated fair value of the Company’s acquisition related contingent consideration liability was $6.7 million, payable in the first quarter of 2021.

Future changes to the estimated contingent liability either higher or lower may occur as the estimated internal projections and other significant non-observable inputs for the calculation become available and are updated as deemed necessary. These future changes could result in a material change in the estimated contingent liability. The estimates and significant non-observable inputs may differ from actual results.

As of March 31, 2020, the estimated fair value of the Company’s acquisition related contingent consideration liability was approximately $9.5 million. During the three months ended March 31, 2020, the Company recognized mark-to-market gains of appro~~ximately $4.1 million to revise the estimated fair value of the contingent consideration liability and foreign exchange gains of approximately $3.3 million~~ to remeasure the South African Rand denominated liability into U.S. Dollars. Both the revision to the estimated fair value and the net foreign exchange gains are included in the Other expenses (income) line in the Consolidated Statements of Operations.

Long-term debt. The carrying ~~amount~~amounts of the long-term debt ~~balance~~balances related to borrowings under the Company’s ~~revolving~~Revolving credit facility ~~approximates~~and Term Loan approximate fair value due to the fact that any outstanding borrowings are subject to short-term floating interest rates. As of ~~March 31,~~June 30, 2020, the fair values of the 2020 Convertible Notes and 2025 Notes ~~wer~~ewere approximately ~~$276.8~~$115.0 million and ~~$282.3~~$292.6 million, respectively, based on the quoted prices in markets that are not active (Level 2). For additional information related to long-term debt, ~~see~~see Note 9. Long-Term Debt.

Additions to asset retirement obligations liability. The Company estimates the fair value of additions to its ARO liability using expected discounted future cash flow at the Company’s credit-adjusted risk-free interest rate. Liabilities added to the ARO are measured at fair value at the time of the asset installations using significant non-observable (Level 3) inputs. These liabilities are evaluated periodically based on estimated current fair value. Amounts added to the ARO liability during the three months ended ~~March 31,~~June 30, 2020 and 2019 totaled ~~$0.4~~$0.8 million and $1.1 million, respectively.

Interest rate derivatives. As of ~~March 31,~~June 30, 2020, the recognized fair value of the Company’s Interest Rate Derivatives resulted in ~~an asset of $2.6 million~~current and ~~a liability of $58.5~~long-term liabilities totaling $63.0 million. These financial instruments are carried at fair value and are valued using pricing models based on significant other observable inputs (Level 2), while taking into account the creditworthiness of the party that is in the liability position with respect to each trade. For additional information related to the valuation process of this asset or liability, see Note 13. Derivative Financial Instruments.

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(15) Commitments and Contingencies

Legal Matters

The Company is subject to various legal proceedings and claims arising in the ordinary course of its business. The Company has provided reserves where necessary for contingent liabilities, based on ASC 450, ~~contingencies,~~Contingencies, when it has determined that a liability is probable and reasonably estimable. The Company’s management does not expect the outcome in any legal proceedings or claims, individually or collectively, to have a material adverse financial or operational impact on the Company. Additionally, the Company currently expenses all legal costs as they are incurred.

Gain Contingency

In 2014, the Valuation Office Agency (or “VOA”), an executive agency of HM Revenue & Customs in England and Wales, took action to amend its business ratings list going back to 2010, to create separate entries on these lists for the sites of thousands of ATMs. Similar steps were taken by the equivalent agencies to the VOA in Scotland and Northern Ireland in their respective jurisdictions. Before 2014, the ATM sites in each location had not been distinguished from the host store. Therefore, the ATMs located in host stores such as supermarkets and convenience stores were not subject to business rates, a tax on commercial property. The effect of each of the amendments was to include the ATM sites in the business ratings lists as separate hereditaments with their own ratable value, subjecting the sites to business rates taxation without a corresponding reduction in the ratable value of the host locations. The Company and its merchant partners paid the business rates, as required.

In 2018, various appellants, including a number of large supermarkets and the Company (together, the “Appellants”), appealed the matter to the England and Wales Court of Appeal (the “Court of Appeal”) after having lost appeals to the Valuation Tribunal for England (“VTE”) and Upper Tribunal (Lands Chamber) in 2016 and 2017, respectively. In late 2018, the Court of Appeal ruled in favor of the Appellants and found that the amendments to the ratings list for a large number of ATM location types should not have been affected by the VOA, or sustained by the VTE and Upper Tribunal. The VOA appealed to the U.K. Supreme Court, and on May 20, 2020, the Supreme Court dismissed the VOA appeal and upheld the decision of the Court of Appeal.

Following the Supreme Court ruling, the Company awaits the amendment of the business rating lists for England and Wales by the VOA and seeks to recover the amounts paid to the tax authorities in numerous local tax jurisdictions for the periods spanning from 2010 to May 2020. The Company currently estimates that the amount recoverable from the various tax authorities for these payments may total up to approximately 45 million U.K. pounds sterling, before consideration of amounts that would be due to merchant partners of the Company, some of which had paid directly or indirectly these business rates. This estimate is subject to change as the Company continues its analysis of the business rates paid during the 10 year period. Due to the complexity in administering and uncertainty of these collections, the Company has not assessed the recovery of the estimated amounts paid as realizable, and therefore, will recognize the business rates recoveries when realized. During the three months ended June 30, 2020, the Company recorded a net credit of approximately $3.7 million to the Cost of ATM operating revenues line in the Consolidated Statements of Operations to reverse obligations for business rates not yet paid as previously required before the U.K. Supreme Court ruling. The Supreme Court ruling does not apply to Scotland or Northern Ireland and business rates in those jurisdictions are still subject to valuation tribunal appeals and assessments. The proceedings in Scotland and Northern Ireland were stayed pending the outcome of the U.K. Supreme Court decision. The Company continues to recognize business rate taxes in Scotland and Northern Ireland, net of any amounts recorded as receivables that are deemed recoverable under contracts with Merchants.

Other Commitments

Asset retirement obligations. The Company’s ARO consist primarily of costs to ~~deinstall~~remove the Company’s ATMs and to restore the ATM sites to their original condition. In most cases, the Company is contractually required to perform this deinstallation of its owned ATMs, and in some cases, site restoration work. As of ~~March 31,~~June 30, 2020, the Company had ~~$58.8~~$58.4 million accrued for these liabilities. For additional information, see Note 10. Asset Retirement Obligations .

Acquisition related contingent consideration. During the three months ended June 30, 2020 the Company paid $5.2 million to satisfy the 2019 portion of its obligation under the Spark acquisition contingent consideration arrangement. As of ~~March 31,~~June 30, 2020, the Company had ~~$9.5~~$6.7 million accrued for ~~the Spark acquisition related contingent consideration.~~its 2020 obligation. For additional information related to the Spark acquisition related contingent consideration, see Note 14. Fair Value Measurements .

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(16) Income Taxes

The Company’s incometax (benefit) expense ~~based on income before income taxes~~ for the periods presented was as follows:


			Three Months Ended March 31,								Three Months Ended June 30				Six Months Ended June 30
			2020			2019				2020	2019		2020	2019
		(In thousands, excluding percentages)										(In thousands, excluding percentages)
Income tax (benefit) expense	Income tax (benefit) expense		$	(3,737)		$	3,129		Income tax (benefit) expense	$(10,687)	$3,565		$(14,424)	$6,694
Effective tax rate	Effective tax rate		(185.7)		%	42.0		%	Effective tax rate	84.8%	25.4%		136.1%	31.2%

The Company’s income tax benefit for the three months ended ~~March 31,~~June 30, 2020 totaled ~~$3.7~~$10.7 million resulting in an effective tax rate of ~~(185.7)%~~84.8%, compared to an expense of ~~$3.1~~$3.6 million, and an effective tax rate of ~~42.0%~~25.4%, for the same period of 2019. The Company’s income tax benefit for the six months ended June 30, 2020 totaled $14.4 million resulting in an effective tax rate of 136.1%, compared to an expense of $6.7 million, and an effective tax rate of 31.2%, for the same period of 2019.

The decrease in the tax expense for the three months ended ~~March 31,~~June 30, 2020, compared to the same period of 2019, was primarily attributable to the pre-tax losses incurred in the three months ended June 30, 2020, compared to the pre-tax income in the same period of 2019. The decrease in the tax expense for the six months ended June 30, 2020, compared to the same period of 2019, was attributable to the pre-tax loss incurred during the six months ended June 30, 2020 and to a non-recurring benefit ~~in the current period~~ from the ~~carry back~~carryback of net operating losses to prior tax years at the higher 35% U.S. tax rate, compared to the current tax rate of 21%, as a result of recent changes in U.S. tax law. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in the U.S., which provided for an elective five-year carryback of net operating losses (NOLs) generated in taxable years beginning after December 31, 2017 and before January 1, 2021. As a result of this change in law and ~~because~~since the Company incurred net operating losses in 2018, the Company plans to carry back these 2018 losses to prior periods and expects to receive refunds of taxes paid at higher rates in earlier periods. ~~Additionally, lower pretax profits in the current period compared to the prior year period contributed to the lower tax expense, partly offset by other factors.~~

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

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

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

~~Table of Conte~~n t s

(17) Segment Information

As of ~~March 31,~~June 30, 2020, the Company’s operations consisted of ~~its~~ North America, Europe & Africa, and Australia & New Zealand segments. The Company’s ATM operations in the U.S., Canada, Mexico, and Puerto Rico are included in its North America segment. The North America segment also includes the Company’s transaction processing operations, which service its internal ATM operations, along with external customers. The Company’s ATM operations in the U.K., Ireland, Germany, ~~Spain,~~Spain and ~~South~~South Africa are included in its Europe & Africa segment, along with i-design (the Company’s ATM advertising business based in the U.K.). The Company’s Australia & New Zealand segment consists of its ATM operations in these two countries. Corporate primarily includes the Company’s corporate general and administrative expenses. While each of the reporting segments provides similar kiosk-based and/or ATM-related services, each segment is managed separately and requires different marketing and business strategies.

Management uses Adjusted EBITDA, together with U.S. GAAP measures, to manage and measure the performance of its segments. Management believes Adjusted EBITDA is a useful measure to more effectively evaluate the performance of the business and compare its results of operations from period to period without regard to financing methods, capital structure, or non-recurring costs as defined by the Company. Adjusted EBITDA excludes depreciation and accretion, amortization of deferred financing costs and note discounts, amortization of intangible assets, share-based compensation expense, certain other

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income and expense amounts, acquisition related expenses, gains or losses on disposal and impairment of assets, certain non-operating expenses, (if applicable in a particular period), the obligation for the payment of income taxes, net interest expense, other obligations such as capital expenditures, and includes an adjustment for noncontrolling interests. Depreciation and accretion expense and amortization of intangible assets are excluded from Adjusted EBITDA as these amounts can vary substantially from company to company within the Company's industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired.

Adjusted EBITDA, as defined by the Company, is a non-GAAP financial measure provided as a complement to the financial results prepared in accordance with U.S. GAAP. It may not be defined in the same manner by all companies and therefore may not be comparable to other similarly titled measures of other companies. In evaluating the Company’s performance as measured by Adjusted EBITDA, management recognizes and considers the limitations of this measurement. Therefore, Adjusted EBITDA should not be considered in isolation or as a substitute for operating ~~income,~~loss, net ~~income,~~loss, cash flows from operating, investing, or financing activities, or other income or cash flow measures contained within our consolidated financial statements.

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

Three Months Ended
March 31,
2020 2019
(In thousands)
Net income attributable to controlling interests and available to common shareholders $ 5,755 $ 4,319
Adjustments:
Interest expense, net 6,421 6,643
Amortization of deferred financing costs and note discount 3,486 3,292
Income tax (benefit) expense (3,737) 3,129
Depreciation and accretion expense 32,211 32,973
Amortization of intangible assets 8,413 12,412
EBITDA 52,549 62,768
Add back:
Loss on disposal and impairment of assets 921 968
Other expenses (income) ⁽¹⁾
3,829 (7,207)
Noncontrolling interests ⁽²⁾
13 15
Share-based compensation expense 5,193 4,484
Restructuring expenses ⁽³⁾
1,209 —
Adjusted EBITDA $ 63,714 $ 61,028

~~Table of Conte~~n t s


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020			2019
	(In thousands)
Net (loss) income attributable to controlling interests and available to common shareholders	$	(1,922)	$	10,471	$	3,833		$	14,790
Adjustments:
Interest expense, net	8,809		6,871		15,230			13,514
Amortization of deferred financing costs and note discount	4,399		3,330		7,885			6,622
Loss on extinguishment of convertible notes	3,018		—		3,018			—
Income tax (benefit) expense	(10,687)		3,565		(14,424)			6,694
Depreciation and accretion expense	32,072		33,205		64,283			66,178
Amortization of intangible assets	8,849		12,591		17,262			25,003
EBITDA	44,538		70,033		97,087			132,801
Add back:
Loss on disposal and impairment of assets	112		1,496		1,033			2,464
Other (income) expenses ⁽¹⁾	(6,364)		1,456		(2,535)			(5,751)
Noncontrolling interests ⁽²⁾	15		16		28			31
Share-based compensation expense	5,029		5,250		10,222			9,734
Restructuring expenses ⁽³⁾	3,340		3,463		4,549			3,463


Adjusted EBITDA	$	46,670	$	81,714	$	110,384		$	142,742

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

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

(3)For the three and six months ended ~~March 31,~~June 30, 2020, ~~the~~our restructuring ~~activities~~expenses included costs incurred in conjunction with facility closures, workforce reductions ~~professional fees~~ and other related charges. For the three and six months ended June 30, 2019, our restructuring expenses included professional fees and costs incurred in conjunction with facility closures and workforce reductions.

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

Three Months Ended March 31, 2020
North America Europe & Africa Australia & New Zealand Corporate Eliminations Total
(In thousands)
Revenue from external customers $ 204,382 $ 81,863 $ 20,357 $ — $ — $ 306,602
Intersegment revenues 1,615 37 — — (1,652) —
Cost of revenues 139,904 52,634 14,275 561 (1,652) 205,722
Selling, general, and administrative expenses 17,049 9,061 1,947 14,321 — 42,378
Restructuring expenses — 1,000 — 209 — 1,209
Loss (gain) on disposal and impairment of assets 443 495 (17) — — 921
Adjusted EBITDA 48,999 20,251 4,133 (9,461) (208) 63,714
Capital expenditures ⁽¹⁾
$ 12,187 $ 5,867 $ 375 $ — $ — $ 18,429

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	Three Months Ended June 30, 2020
	North America		Europe & Africa		Australia & New Zealand		Corporate		Eliminations		Total
	(In thousands)
Revenue from external customers	$	172,625	$	48,392	$	12,175	$	—	$	—	$	233,192
Intersegment revenues	1,414		—		—		—		(1,414)		—
Cost of revenues	119,163		31,812		8,943		203		(1,414)		158,707
Selling, general, and administrative expenses	12,535		6,918		1,558		12,073		(226)		32,858
Restructuring expenses	1,205		2,077		—		58		—		3,340

Loss (gain) on disposal and impairment of assets	134		(19)		(3)		—		—		112

Adjusted EBITDA	42,341		9,663		1,674		(7,248)		240		46,670




Capital expenditures ⁽¹⁾	$	7,474	$	3,729	$	172	$	—	$	—	$	11,375


		Three Months Ended March 31, 2019																							Three Months Ended June 30, 2019
		North America		Europe & Africa		Australia & New Zealand		Corporate		Eliminations		Total			North America		Europe & Africa		Australia & New Zealand		Corporate		Eliminations		Total
		(In thousands)																							(In thousands)
Revenue from external customers	Revenue from external customers	$	201,664	$	90,596	$	26,010	$	—	$	—	$	318,270	Revenue from external customers	$	212,670	$	103,333	$	24,818	$	—	$	—	$	340,821
Intersegment revenues	Intersegment revenues	2,584		329		—		—		(2,913)		—		Intersegment revenues	2,545		137		—		—		(2,682)		—
Cost of revenues	Cost of revenues	137,908		63,409		19,361		261		(2,856)		218,083		Cost of revenues	143,164		63,543		17,915		366		(2,606)		222,382
Selling, general, and administrative expenses	Selling, general, and administrative expenses	17,266		10,746		2,241		13,407		—		43,660		Selling, general, and administrative expenses	16,198		10,707		2,273		12,817		—		41,995

Restructuring expenses														Restructuring expenses	213		400		—		2,850		—		3,463

Loss (gain) on disposal and impairment of assets	Loss (gain) on disposal and impairment of assets	324		671		(27)		—		—		968		Loss (gain) on disposal and impairment of assets	778		746		(28)		—		—		1,496

Adjusted EBITDA	Adjusted EBITDA	49,075		16,768		4,409		(9,184)		(40)		61,028		Adjusted EBITDA	55,852		29,223		4,629		(7,934)		(56)		81,714

Capital expenditures ⁽¹⁾	Capital expenditures ⁽¹⁾	$	17,575	$	10,248	$	1,484	$	—	$	—	$	29,307	Capital expenditures ⁽¹⁾	$	14,715	$	9,652	$	1,379	$	—	$	—	$	25,746


	Six Months Ended June 30, 2020
	North America		Europe & Africa		Australia & New Zealand		Corporate		Eliminations		Total
	(In thousands)
Revenue from external customers	$	377,006	$	130,256	$	32,532	$	—	$	—	$	539,794
Intersegment revenues	3,030		36		—		—		(3,066)		—
Cost of revenues	259,067		84,446		23,218		764		(3,066)		364,429
Selling, general, and administrative expenses	29,584		15,979		3,505		26,394		(226)		75,236
Restructuring expenses	1,205		3,077		—		267		—		4,549

Loss (gain) on disposal and impairment of assets	577		476		(20)		—		—		1,033

Adjusted EBITDA	91,340		29,914		5,807		(16,709)		32		110,384




Capital expenditures ⁽¹⁾	$	19,661	$	9,596	$	547	$	—	$	—	$	29,804

Table of Contents


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

Restructuring expenses	213		400		—		2,850		—		3,463


Loss (gain) on disposal and impairment of assets	1,102		1,417		(55)		—		—		2,464

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




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

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

~~Table of Conte~~n t s

Identifiable Assets


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
		(In thousands)							(In thousands)
North America	North America	$	1,149,376	$	1,141,084	North America	$	1,248,045	$	1,141,084
Europe & Africa	Europe & Africa	570,709		511,037		Europe & Africa	463,810		511,037
Australia & New Zealand	Australia & New Zealand	50,464		60,416		Australia & New Zealand	55,554		60,416
Corporate	Corporate	446,672		51,421		Corporate	42,030		51,421
Total	Total	$	2,217,221	$	1,763,958	Total	$	1,809,439	$	1,763,958

(18) Supplemental Guarantor Financial Information

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

Table of Contents

On March 2, 2020, the SEC made significant changes to its disclosure requirements relating to registered securities that are guaranteed. The new rules, adopted by the Company in conjunction with its Form 10-Q for the period ended March 31, 2020, changed the form and content of the disclosures, requiring summarized financial information only as of and for the most recently completed fiscal year and subsequent year-to-date interim period. The following information reflects the Condensed Consolidating Statements of Comprehensive (Loss) Income for the three months ended ~~March 31,~~June 30, 2020, the Condensed Consolidating Statements of Comprehensive (Loss) Income for the six months ended June 30, 2020, the Condensed Consolidated Balance Sheets as of June 30, 2020, the Condensed Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31, 2020, the Condensed Consolidated Balance Sheets as of March 31,~~June 30, 2020, and the Summary Financial Information as of and for the year ~~ending~~ended December 31, 2019 ~~presented~~ for: (i) Cardtronics plc, the parent Guarantor of the 2025 Notes (“Parent”), (ii) Cardtronics Inc. and Cardtronics USA, Inc. (“~~Issuer”~~Issuers”), (iii) the 2025 Notes Guarantors (the “Guarantors”), and (iv) the 2025 Notes Non-Guarantors.

~~Table of Conte~~n t s

Condensed Consolidated Statements of Comprehensive Income


		Three Months Ended March 31, 2020																							Three Months Ended June 30, 2020
		Parent		Issuer		Guarantors		Non-Guarantors		Eliminations		Total			Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
		(In thousands)																							(In thousands)
Revenues	Revenues	$	—	$	161,390	$	78,136	$	84,545	$	(17,469)	$	306,602	Revenues	$	—	$	143,778	$	56,717	$	49,230	$	(16,533)	$	233,192
Operating costs and expenses	Operating costs and expenses	5,797		154,918		61,126		86,001		(17,909)		289,933		Operating costs and expenses	5,540		143,939		43,516		59,660		(16,829)		235,826
Loss on disposal and impairment of assets				417		104		400				921
Loss (gain) on disposal and impairment of assets														Loss (gain) on disposal and impairment of assets	—		122		22		(32)		—		112
(Loss) income from operations	(Loss) income from operations	(5,797)		6,055		16,906		(1,856)		440		15,748		(Loss) income from operations	(5,540)		(283)		13,179		$	(10,398)	$	296	$	(2,746)
Interest expense, net, including amortization of deferred financing costs and note discount		—		8,602		1,201		42		62		9,907
Interest expense (income), net, including amortization of deferred financing costs and note discount														Interest expense (income), net, including amortization of deferred financing costs and note discount	—		11,500		3,311		(1,656)		53		13,208
Loss on extinguishment of convertible notes														Loss on extinguishment of convertible notes	—		3,018		—		—		—		3,018
Equity in earnings of subsidiaries	Equity in earnings of subsidiaries	(12,653)		(17,589)		2,786		241		27,215		—		Equity in earnings of subsidiaries	(788)		(8,096)		13,292		10		(4,418)		—
Other expenses (income)		2,728		7,696		6,543		(5,538)		(7,600)		3,829
Income before income taxes		4,128		7,346		6,376		3,399		(19,237)		2,012
Other (income) expenses														Other (income) expenses	(2,196)		3,604		332		(2,306)		(5,798)		(6,364)
(Loss) income before income taxes														(Loss) income before income taxes	(2,556)		(10,309)		(3,756)		(6,446)		10,459		(12,608)
Income tax (benefit) expense	Income tax (benefit) expense	(1,621)		(2,289)		(415)		588		—		(3,737)		Income tax (benefit) expense	(635)		(10,311)		1,602		(1,343)		—		(10,687)
Net income		5,749		9,635		6,791		2,811		(19,237)		5,749
Net loss attributable to noncontrolling interests		—		—		—		—		(6)		(6)
Net income attributable to controlling interests and available to common shareholders		5,749		9,635		6,791		2,811		(19,231)		5,755
Net (loss) income														Net (loss) income	(1,921)		2		(5,358)		(5,103)		10,459		(1,921)
Net income attributable to noncontrolling interests														Net income attributable to noncontrolling interests	—		—		—		—		1		1
Net (loss) income attributable to controlling interests and available to common shareholders														Net (loss) income attributable to controlling interests and available to common shareholders	(1,921)		2		(5,358)		(5,103)		10,458		(1,922)
Other comprehensive (loss) income attributable to controlling interest	Other comprehensive (loss) income attributable to controlling interest	(59,503)		(32,506)		4,287		(36,737)		64,956		(59,503)		Other comprehensive (loss) income attributable to controlling interest	(1,478)		(1,915)		7,905		48,605		(54,595)		(1,478)
Comprehensive (loss) income attributable to controlling interests	Comprehensive (loss) income attributable to controlling interests	$	(53,754)	$	(22,871)	$	11,078	$	(33,926)	$	45,725	$	(53,748)	Comprehensive (loss) income attributable to controlling interests	$	(3,399)	$(1,913)		$2,547		$43,502		$(44,137)		$(3,400)

Table of Contents


	Six Months Ended June 30, 2020
	Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Revenues	$	—	$	305,168	$	134,853	$	133,775	$	(34,002)	$	539,794
Operating costs and expenses	11,336		298,857		104,643		145,661		(34,738)		525,759
Loss on disposal and impairment of assets	—		539		126		368		—		1,033
(Loss) income from operations	(11,336)		5,772		30,084		(12,254)		736		13,002
Interest expense (income), net, including amortization of deferred financing costs and note discount	—		20,102		4,512		(1,614)		115		23,115
Loss on extinguishment of convertible notes	—		3,018		—		—		—		3,018
Equity in earnings of subsidiaries	(13,441)		(25,684)		16,079		251		22,795		—
Other expenses (income)	532		11,300		6,874		(7,844)		(13,397)		(2,535)
Income (loss) before income taxes	1,573		(2,964)		2,619		(3,047)		(8,777)		(10,596)
Income tax (benefit) expense	(2,255)		(12,600)		1,188		(757)		—		(14,424)
Net income (loss)	3,828		9,636		1,431		(2,290)		(8,777)		3,828
Net loss attributable to noncontrolling interests	—		—		—		—		(5)		(5)
Net income (loss) attributable to controlling interests and available to common shareholders	3,828		9,636		1,431		(2,290)		(8,772)		3,833
Other comprehensive (loss) income attributable to controlling interest	(60,981)		(34,422)		12,193		11,868		10,361		(60,981)
Comprehensive (loss) income attributable to controlling interests	$	(57,153)	$	(24,786)	$	13,624	$	9,578	$	1,589	$	(57,148)

3642

Table of ~~Conte~~n t sContents

Condensed Consolidated Balance Sheets


		As of March 31, 2020																							As of June 30, 2020
		Parent		Issuer		Guarantors		Non-Guarantors		Eliminations		Total			Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
		(In thousands)																							(In thousands)
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	46	$	50,174	$	548,621	$	14,887	$	—	$	613,728	Cash and cash equivalents	$	51	$	144,977	$	50,009	$	16,255	$	—	$	211,292
Restricted cash	Restricted cash	—		22,816		1,927		20,053		—		44,796		Restricted cash	—		61,555		3,057		19,760		—		84,372
Accounts and notes receivable, net	Accounts and notes receivable, net	—		51,358		16,908		18,634		—		86,900		Accounts and notes receivable, net	—		44,683		18,269		15,930		—		78,882

Other current assets	Other current assets	—		51,660		6,148		46,748		—		104,556		Other current assets	—		54,207		3,580		39,042		—		96,829
Total current assets	Total current assets	46		176,008		573,604		100,322		—		849,980		Total current assets	51		305,422		74,915		90,987		—		471,375
Property and equipment, net	Property and equipment, net	—		258,839		49,812		126,109		—		434,760		Property and equipment, net	—		248,794		49,178		117,762		—		415,734
Intangible assets, net	Intangible assets, net	—		33,339		44,189		21,593		—		99,121		Intangible assets, net	—		30,032		43,191		20,729		—		93,952
Goodwill	Goodwill	—		445,046		133,424		145,643		—		724,113		Goodwill	—		445,046		138,121		146,573		—		729,740
Operating lease assets	Operating lease assets	—		32,827		3,892		32,903		—		69,622		Operating lease assets	—		31,794		2,682		27,068		—		61,544
Investments in and advances to subsidiaries	Investments in and advances to subsidiaries	374,910		265,842		222,176		40,952		(903,880)		—		Investments in and advances to subsidiaries	367,785		263,857		191,436		43,963		(867,041)		—
Intercompany receivable	Intercompany receivable	29,442		171,179		215,778		229,307		(645,706)		—		Intercompany receivable	34,633		511,305		537,078		241,606		(1,324,622)		—
Deferred tax asset, net	Deferred tax asset, net	395		—		—		14,836		—		15,231		Deferred tax asset, net	559		—		(1,072)		16,098		—		15,585
Prepaid expenses, deferred costs, and other noncurrent assets	Prepaid expenses, deferred costs, and other noncurrent assets	—		15,001		1,293		8,100		—		24,394		Prepaid expenses, deferred costs, and other noncurrent assets	—		12,778		1,388		7,343		—		21,509
Total assets	Total assets	$	404,793	$	1,398,081	$	1,244,168	$	719,765	$	(1,549,586)	$	2,217,221	Total assets	$	403,028	$	1,849,028	$	1,036,917	$	712,129	$	(2,191,663)	$	1,809,439

Liabilities and Shareholders' Equity	Liabilities and Shareholders' Equity													Liabilities and Shareholders' Equity
Current portion of other long-term liabilities	Current portion of other long-term liabilities	$	—	$	305,569	$	5,514	$	32,111	$	—	$	343,194	Current portion of other long-term liabilities	$	—	$	145,491	$	6,088	$	28,727	$	—	$	180,306
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	1,497		184,614		37,479		87,104		—		310,694		Accounts payable and accrued liabilities	286		231,305		54,592		73,228		(15,804)		343,607
Total current liabilities	Total current liabilities	1,497		490,183		42,993		119,215		—		653,888		Total current liabilities	286		376,796		60,680		101,955		(15,804)		523,913
Long-term debt	Long-term debt	—		768,636		145,802		128,889		—		1,043,327		Long-term debt	—		774,713		—		—		—		774,713
Intercompany payable	Intercompany payable	95,437		107,520		244,403		198,337		(645,697)		—		Intercompany payable	94,653		282,214		597,242		350,507		(1,324,616)		—
Asset retirement obligations	Asset retirement obligations	—		22,761		1,728		28,870		—		53,359		Asset retirement obligations	—		21,726		1,861		29,207		—		52,794
Operating lease liabilities	Operating lease liabilities	—		39,975		2,286		21,566		—		63,827		Operating lease liabilities	—		38,811		1,846		17,757		—		58,414
Deferred tax liability, net	Deferred tax liability, net	—		43,189		2,681		—		—		45,870		Deferred tax liability, net	—		38,609		1,363		624		—		40,596
Other long-term liabilities	Other long-term liabilities	—		39,125		2,957		7,009		—		49,091		Other long-term liabilities	—		40,904		2,423		7,593		—		50,920
Total liabilities	Total liabilities	96,934		1,511,389		442,850		503,886		(645,697)		1,909,362		Total liabilities	94,939		1,573,773		665,415		507,643		(1,340,420)		1,501,350
Shareholders' equity	Shareholders' equity	307,859		(113,308)		801,318		215,879		(903,889)		307,859		Shareholders' equity	308,089		275,255		371,502		204,486		(851,243)		308,089
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	404,793	$	1,398,081	$	1,244,168	$	719,765	$	(1,549,586)	$	2,217,221	Total liabilities and shareholders' equity	$	403,028	$	1,849,028	$	1,036,917	$	712,129	$	(2,191,663)	$	1,809,439

3743

Table of ~~Conte~~n t sContents

Condensed Consolidated Statements of Cash Flows


		Three Months Ended March 31, 2020																							Six Months Ended June 30, 2020
		Parent		Issuer		Guarantors		Non-Guarantors		Eliminations		Total			Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
		(In thousands)																							(In thousands)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	22,095	$	(21,014)	$	(6,975)	$	7,014	$	—	$	1,120	Net cash provided by (used in) operating activities	$	22,335	$	60,817	$	(14,329)	$	21,028	$	—	$	89,851
Additions to property and equipment	Additions to property and equipment			(11,585)		(2,696)		(4,148)				(18,429)		Additions to property and equipment	—		(18,422)		(3,995)		(7,387)		—		(29,804)

Net cash used in investing activities	Net cash used in investing activities	—		(11,585)		(2,696)		(4,148)		—		(18,429)		Net cash used in investing activities	—		(18,422)		(3,995)		(7,387)		—		(29,804)
Proceeds from borrowings under revolving credit facility	Proceeds from borrowings under revolving credit facility	—		547,129		148,583		36,150		—		731,862		Proceeds from borrowings under revolving credit facility	—		547,130		163,723		36,150		—		747,003
Repayments of borrowings under revolving credit facility	Repayments of borrowings under revolving credit facility	—		(100,600)		(5,666)		(38,488)		—		(144,754)		Repayments of borrowings under revolving credit facility	—		(572,530)		(167,350)		(167,260)		—		(907,140)
Proceeds from issuance of term loan facility														Proceeds from issuance of term loan facility	—		500,000		—		—		—		500,000
Repurchase of convertible notes														Repurchase of convertible notes	—		(171,173)		—		—		—		(171,173)
Intercompany financing	Intercompany financing	—		(401,209)		401,209		—		—		—		Intercompany financing	—		(181,317)		55,166		126,151		—		—
Tax payments related to share-based compensation	Tax payments related to share-based compensation	(5,515)		—		—		—		—		(5,515)		Tax payments related to share-based compensation	(5,751)		—		—		—		—		(5,751)
Proceeds from exercises of stock options	Proceeds from exercises of stock options	293		—		—		—		—		293		Proceeds from exercises of stock options	293		—		—		—		—		293

Debt issuance, modification, and redemption costs														Debt issuance, modification, and redemption costs	—		(18,244)		—		—		—		(18,244)
Repurchase of common shares	Repurchase of common shares	(16,873)		—		—		—		—		(16,873)		Repurchase of common shares	(16,873)		—		—		—		—		(16,873)
Payment of contingent consideration														Payment of contingent consideration	—		—		—		(5,179)		—		(5,179)
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(22,095)		45,320		544,126		(2,338)		—		565,013		Net cash (used in) provided by financing activities	(22,331)		103,866		51,539		(10,138)		—		122,936
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—		—		(4,227)		(2,422)		—		(6,649)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	—		—		(469)		(4,319)		—		(4,788)
Net increase (decrease) in cash, cash equivalents, and restricted cash	Net increase (decrease) in cash, cash equivalents, and restricted cash	—		12,721		530,228		(1,894)		—		541,055		Net increase (decrease) in cash, cash equivalents, and restricted cash	4		146,261		32,746		(816)		—		178,195
Cash, cash equivalents, and restricted cash as of beginning of period	Cash, cash equivalents, and restricted cash as of beginning of period	46		60,269		20,321		36,833		—		117,469		Cash, cash equivalents, and restricted cash as of beginning of period	47		60,271		20,320		36,831		—		117,469
Cash, cash equivalents, and restricted cash as of end of period	Cash, cash equivalents, and restricted cash as of end of period	$	46	$	72,990	$	550,549	$	34,939	$	—	$	658,524	Cash, cash equivalents, and restricted cash as of end of period	$	51	$	206,532	$	53,066	$	36,015	$	—	$	295,664

Summary Prior Year Financial Information

As of and for the Year Ended December 31, 2019
Parent Issuer Guarantors Non-Guarantors Eliminations Total
(In thousands)
Revenues $ — $ 668,527 $ 351,330 $ 402,079 $ (72,531) $ 1,349,405
(Loss) income from operations $ (35,637) $ 40,733 $ 70,835 $ 10,203 $ 300 $ 86,434
Net income $ 48,265 $ 20,546 $ 63,952 $ 27,036 $ (111,534) $ 48,265
Net income attributable to controlling interests and available to common shareholders $ 48,265 $ 20,546 $ 63,952 $ 27,036 $ (111,525) $ 48,274
Total current assets $ 46 $ 146,768 $ 41,788 $ 119,919 $ — $ 308,521
Total noncurrent assets $ 452,342 $ 1,225,786 $ 1,488,531 $ 196,625 $ (1,907,847) $ 1,455,437
Total current liabilities $ 814 $ 242,735 $ 66,766 $ 124,069 $ — $ 434,384
Total noncurrent liabilities $ 71,248 $ 805,812 $ 984,556 $ (24,244) $ (888,125) $ 949,247


	As of and for the Year Ended December 31, 2019
	Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
	(In thousands)
Revenues	$	—	$	668,527	$	351,330	$	402,079	$	(72,531)	$	1,349,405
(Loss) income from operations	(35,637)		40,733		70,835		10,203		300		86,434
Net income	48,265		20,546		63,952		27,036		(111,534)		48,265
Net income attributable to controlling interests and available to common shareholders	48,265		20,546		63,952		27,036		(111,525)		48,274
Total current assets	46		146,768		41,788		119,919		—		308,521
Total noncurrent assets	452,342		1,225,786		1,488,531		196,625		(1,907,847)		1,455,437
Total current liabilities	814		242,735		66,766		124,069		—		434,384
Total noncurrent liabilities	71,248		805,812		984,556		(24,244)		(888,125)		949,247

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(19) Concentration Risk

Significant merchant customers. During the trailing twelve months ended ~~March 31,~~June 30, 2020, the Company derived approximately ~~21%~~22% of its total revenues from ATMs placed at the locations of its top five merchant customers. The Company’s top five merchant customers, none accounting for more than 6% of total revenue for the trailing twelve months ended ~~March 31,~~June 30, 2020, were Alimentation Couche-Tard Inc., Co-operative Food, CVS Caremark Corporation, Speedway LLC, and Walgreens Boots Alliance, Inc. Accordingly, a significant percentage of the Company’s future revenues and operating income will be dependent upon the successful continuation of its relationships with these merchants. As of ~~March 31,~~June 30, 2020, the contracts ~~we have~~the Company has with ~~our~~its five largest merchant customers have a weighted average remaining life of approximately ~~3.25~~3 years.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

•the Company's ability to respond to business cycles, seasonality, and other outside factors such as extreme weather, natural disasters, civil unrest or health emergencies, such as the COVID-19 outbreak, that may negatively affect our ~~business.~~business;

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

•the impact of macroeconomic conditions, including the future impacts of the COVID-19 outbreak on global economic conditions, which is highly uncertain and difficult to predict;

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

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

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

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

•changes in interest rates and foreign currency rates;

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

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

•the Company's ability to maintain appropriate liquidity

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

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

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

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

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

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

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

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

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

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

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

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

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

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

•the Company’s ability to manage the fluctuation of its operating results, including as a result of the foregoing and other risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

For additional information regarding known material factors that could cause the Company’s actual results to differ from its projected results, see: Part I. Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, as updated by Part II, Item 1A. Risk Factors of this Form 10-Q. Readers are cautioned not to place undue reliance on forward-looking statements contained in this document, which speak only as of the date of this Form 10-Q. Except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

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

Overview

Cardtronics plc provides convenient automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks (collectively referred to as “ATMs”). ~~As of March 31, 2020, we were~~We are the world’s largest ATM owner/operator, providing services to over 285,000 ATMs. During the three months ended ~~March 31,~~June 30, 2020, ~~68%~~74% of our total revenues were derived from operations in North America (including our ATM operations in the United States ("U.S."), Canada, and Mexico), ~~27%~~21% of our total revenues were derived from operations in Europe and Africa (including our ATM operations in the United Kingdom ("U.K."), Ireland, Germany, Spain, and South Africa), and 5% of our total revenues were derived from operations in Australia and New Zealand. Included in our network ~~as of March 31, 2020, were~~are approximately 198,000 ATMs to which we provided processing only ~~services~~services or various forms of managed services solutions. Under a managed services arrangement, retailers, financial institutions, and ATM distributors rely on us to handle some or all of the operational aspects associated with operating and maintaining ATMs, typically in exchange for a monthly service fee, fee per transaction, or fee per service provided.

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

We also own and operate the Allpoint network (“Allpoint”), the largest surcharge-free ATM network (based on the number of participating ATMs). Allpoint has over 55,000 participating ATMs and provides surcharge-free ATM access to nearly 1,200 participating credit unions, banks, digital banks, financial technology companies, and stored-value debit card issuers that are principally located in North America. For participants, Allpoint provides scale, density, and convenience of surcharge-free ATMs that surpasses the largest banks in the U.S. In exchange, Allpoint earns a fixed monthly fee per cardholder and/or a fixed fee per transaction that is paid by participants. Allpoint includes a majority of our Company owned ATMs in the U.S., and certain ATMs in the U.K., Canada, Mexico, and Australia. Allpoint also provides services to organizations that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, including general-purpose, payroll, and electronic benefits transfer (“EBT”) cards. Under these programs, the issuing organizations pay us a fee per issued stored-value debit card or per transaction in return for allowing the users of those cards surcharge-free access to the Allpoint ATM network.

For additional information related to our operations and the manner in which we derive revenues, see our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”).

COVID-19 ~~Update~~Update

On March 11, 2020, the respiratory virus commonly known as COVID-19 (the “Pandemic”) was declared a pandemic by the World Health Organization, and by late March 2020, there were confirmed cases and deaths from ~~COVID-19~~the Pandemic in each of the countries in which we operate. ~~Our~~In response, national and local governments instituted various travel restrictions and shelter-in-place orders while generally deeming financial institutions, grocery stores, pharmacies and convenience stores as “critically essential” in providing their services to citizens during this global emergency. Although our primary focus has been and will remain on protecting the health and ~~wellbeing~~well-being of our employees and the communities in which we ~~operate. We~~operate, we continue to coordinate with our partners, where possible, to ensure continued and seamless operations of our ATMs.

Certain locations, such as casinos, theme parks, malls, tourist-focused ATMs, education and other ATM sites were closed for all or part of the second quarter of 2020. Many of these locations remain closed to varying degrees as a result of the Pandemic. At the end of June 2020, closed ATMs, including but not limited to ATMs at casinos, theme parks, malls, tourist-focused ATMs, and education locations, represented approximately 8% of our total Company owned ATM fleet, an improvement from the 10% reported at the end of April 2020. Due to the Pandemic, we have experienced decreased transaction volumes of varying degrees across our network, depending on the location. Although same-store transactions have recently improved when compared to transactions volumes in April and May 2020, we expect to continue to see transaction volume declines year over year for the remainder of 2020. The majority of our revenues are transaction volume dependent, therefore, these transaction declines are expected to result in lower third quarter 2020 revenues compared to the same period in 2019 and may continue to impact our results in future periods during 2020 and beyond.

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In response to the Pandemic, we have implemented business continuity plans, with most of our employees working from home since March 16, without issue. Certain of our employees continue to perform cash delivery, maintenance and other technical services on site and at certain ~~of our~~ office and warehouse locations to ensure the continued operations of our ATMs.

National and local governments have generally deemed financial institutions, grocery stores, pharmacies and convenience stores as “critically essential” in providing their services to citizens during this global emergency. As a partner to these businesses in providing cash access to consumers, we have coordinated with our partners, where possible, to ensure continued and seamless operations of our ATMs. Certain locations, such as casinos, theme parks, malls, tourist-focused ATMs, education and other ATM sites have been closed. At the end of April 2020, closed ATMs, including but not limited to casinos, theme parks, malls, tourist-focused ATMs, and education locations, represented approximately 10% of our total Company owned ATM fleet.

After the announcement of the pandemic, we experienced decreases in transaction volumes of varying degrees across our network, depending on the location, and have seen and expect to continue to see transaction volume declines in the second quarter of 2020. The majority of our revenues are variable and are transaction volume dependent. These transaction declines are

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~~expected to result in lower second quarter 2020 revenues compared to the same period in 2019 and may continue to impact our results in future periods during 2020 and beyond.~~

~~In response to COVID-19, we~~ We have also implemented cost ~~reductions~~reduction plans and have taken action to manage expenses, reduce capital spending ~~plans~~ and have suspended our opportunistic share repurchase program to optimize cash flow during the current environment. We continue to actively monitor the situation and may take further actions that could alter our business operations as may be required by national, federal, state or local authorities or that we determine are in the best interests of our employees, customers, partners and shareholders. In spite of the transaction declines ~~which we expect~~that may continue ~~for several additional months during~~in the remainder of 2020, we anticipate generating positive free cash flows after considering our required capital expenditures. While we are unable to determine or predict the ~~nature,~~ duration, or scope ~~of the~~or overall impact the ~~COVID-19 pandemic~~Pandemic will have on our business, we ~~believe~~have entered into various financing agreements to ensure we have sufficient liquidity to manage our business operations through extended periods of transaction and revenue declines caused by the ~~pandemic. See~~ Pandemic.

During the three months ended June 30, 2020, we entered into a $500 million term loan and used the proceeds and available cash to repay the balance outstanding under our revolving credit agreement and retire a portion of our convertible senior notes. In conjunction with this activity, our revolving credit agreement was amended to provide precautionary covenant relief and to reduce the capacity under our revolving credit facility from $750 million to $600 million, see Part I, Item 1. Financial Statements, Note 9. Long-Term Debt. and Part II, Item 1A - “Risk Factors” - “We“We are subject to business cycles, seasonality, and other outside factors such as extreme weather, natural disasters or health emergencies, including the recent outbreak of the coronavirus (“COVID-19”) pandemic that has adversely impacted our business, and that may in the future have a material adverse impact on our business.”

Other Recent Trends and Events

Withdrawal transaction and revenue trends - Our two largest markets are the U.S. and U.K., and on a combined basis, these markets represent ~~nearly~~approximately 80% of our revenues. Our U.S. same-store cash withdrawal transactions decreased by approximately ~~0.3%~~14% during the three months ended ~~March 31,~~June 30, 2020 when compared to same period in 2019. Our U.K. same-store cash withdrawal transactions decreased by approximately ~~11%~~52% during the three months ended ~~March 31,~~June 30, 2020 when compared to same period in 2019. In both cases, and in each of our other jurisdictions, same-store transaction results have been adversely impacted by the ~~COVID-19 pandemic~~Pandemic beginning in mid-March 2020.

Following the momentum we experienced in the latter part of 2019, we saw a strong start to ~~the beginning of~~ 2020. In the U.S., our same-store withdrawal transactions were up 6% from January through mid-March. ~~The impact of COVID-19,~~However, the Pandemic, and the ~~subsequent~~associated shelter in place orders, began to impact transaction volumes starting in the second week of March, with U.S. same-store transaction volumes decreasing approximately 30-35% year-over-year. These transaction declines ~~appear to have stabilized, and~~improved during the month of April when we ~~have seen~~noted a modest improvement in withdrawal transaction volumes, ~~improving,~~ correlated with higher unemployment benefits and ~~the~~other government stimulus programs. The improvement continued in May and June as the shelter in place restrictions began to ease in our markets. In the U.S., same-store withdrawal transaction volumes in July 2020 were consistent with the ~~last two weeks in April were down approximately 20% year-over-year.~~same month of the prior year, a notable improvement from March. In the U.K., during the last week of March through the first week of April, we saw same-store withdrawal transaction volumes decrease approximately 60-65% year-over-year, consistent with overall market volume. These withdrawal transaction declines began to improve slightly later in April and volumes continued to improve throughout May and June. U.K. same-store transaction volumes in July 2020 were down approximately 36% year-over-year, also ~~appear to have stabilized to~~ a ~~degree, with same-store, year-over-year decreases of approximately 55% experienced during the last three weeks of~~notable improvement from early April. We expect these overall trends to continue to ~~improve~~recover as governments ~~begin~~continue to ease shelter in place ~~restrictions.~~restrictions and as consumers become more active.

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Results of Operations

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


			Three Months Ended March 31,															Three months ended June 30,												Six Months Ended June 30,

			2020						2019							2020							2019						2020		2019
		(In thousands, excluding percentages)																		(In thousands, excluding percentages)
Revenues:	Revenues:										Revenues:
ATM operating revenues	ATM operating revenues		$	291,854	95.2	%	$	302,602	95.1	%	ATM operating revenues	$	222,824	95.6	%	$	323,081	94.8	%		$	514,678	95.3	%	$	625,683	94.9	%
ATM product sales and other revenues	ATM product sales and other revenues		14,748		4.8		15,668		4.9		ATM product sales and other revenues	10,368		4.4		17,740		5.2			25,116		4.7		33,408		5.1
Total revenues	Total revenues		306,602		100.0		318,270		100.0		Total revenues	233,192		100.0		340,821		100.0			539,794		100.0		659,091		100.0
Cost of revenues:	Cost of revenues:										Cost of revenues:
Cost of ATM operating revenues ⁽¹⁾	Cost of ATM operating revenues ⁽¹⁾		193,665		63.2		206,158		64.8		Cost of ATM operating revenues ⁽¹⁾	151,084		64.8		208,081		61.1			344,749		63.9		414,239		62.9
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues		12,057		3.9		11,925		3.7		Cost of ATM product sales and other revenues	7,623		3.3		14,301		4.2			19,680		3.6		26,226		4.0
Total cost of revenues	Total cost of revenues		205,722		67.1		218,083		68.5		Total cost of revenues	158,707		68.1		222,382		65.2			364,429		67.5		440,465		66.8
Operating expenses:	Operating expenses:										Operating expenses:
Selling, general, and administrative expenses ⁽²⁾	Selling, general, and administrative expenses ⁽²⁾		42,378		13.8		43,660		13.7		Selling, general, and administrative expenses ⁽²⁾	32,858		14.1		41,995		12.3			75,236		13.9		85,655		13.0

Restructuring expenses	Restructuring expenses		1,209		0.4		—		—		Restructuring expenses	3,340		1.4		3,463		1.0			4,549		0.8		3,463		0.5

Depreciation and accretion expense	Depreciation and accretion expense		32,211		10.5		32,973		10.4		Depreciation and accretion expense	32,072		13.8		33,205		9.7			64,283		11.9		66,178		10.0
Amortization of intangible assets	Amortization of intangible assets		8,413		2.7		12,412		3.9		Amortization of intangible assets	8,849		3.8		12,591		3.7			17,262		3.2		25,003		3.8
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets		921		0.3		968		0.3		Loss on disposal and impairment of assets	112		—		1,496		0.4			1,033		0.2		2,464		0.4
Total operating expenses	Total operating expenses		85,132		27.8		90,013		28.3		Total operating expenses	77,231		33.1		92,750		27.2			162,363		30.1		182,763		27.7
Income from operations			15,748		5.1		10,174		3.2
(Loss) income from operations											(Loss) income from operations	(2,746)		(1.2)		25,689		7.5			13,002		2.4		35,863		5.4
Other expenses:	Other expenses:										Other expenses:
Interest expense, net	Interest expense, net		6,421		2.1		6,643		2.1		Interest expense, net	8,809		3.8		6,871		2.0			15,230		2.8		13,514		2.1
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount		3,486		1.1		3,292		1.0		Amortization of deferred financing costs and note discount	4,399		1.9		3,330		1.0			7,885		1.5		6,622		1.0
Other expenses (income)			3,829		1.2		(7,207)		(2.3)
Loss on extinguishment of convertible notes											Loss on extinguishment of convertible notes	3,018		1.3		—		—			3,018				—		—
Other (income) expenses											Other (income) expenses	(6,364)		(2.7)		1,456		0.4			(2,535)		(0.5)		(5,751)		(0.9)
Total other expenses	Total other expenses		13,736		4.5		2,728		0.9		Total other expenses	9,862		4.2		11,657		3.4			23,598		4.4		14,385		2.2
Income before income taxes			2,012		0.7		7,446		2.3
(Loss) income before income taxes											(Loss) income before income taxes	(12,608)		(5.4)		14,032		4.1			(10,596)		(2.0)		21,478		3.3
Income tax (benefit) expense	Income tax (benefit) expense		(3,737)		(1.2)		3,129		1.0		Income tax (benefit) expense	(10,687)		(4.6)		3,565		1.0			(14,424)		(2.7)		6,694		1.0
Net income			5,749		1.9		4,317		1.4
Net loss attributable to noncontrolling interests			(6)		—		(2)		—
Net income attributable to controlling interests and available to common shareholders			$	5,755	1.9	%	$	4,319	1.4	%
Net (loss) income											Net (loss) income	(1,921)		(0.8)		10,467		3.1			3,828		0.7		14,784		2.2
Net income (loss) attributable to noncontrolling interests											Net income (loss) attributable to noncontrolling interests	1		—		(4)		—			(5)		—		(6)		—
Net (loss) income attributable to controlling interests and available to common shareholders											Net (loss) income attributable to controlling interests and available to common shareholders	$	(1,922)	(0.8)	%	$	10,471	3.1	%		$	3,833	0.7	%	$	14,790	2.2	%

(1)Excludes effects of depreciation, accretion, and ~~amortization~~amortization of intangible assets, ~~$31.2 million~~of $32.8 and ~~$37.0~~$38.0 million for the three months ended ~~March 31,~~June 30, 2020 and 2019, respectively, and $64.0 million and $75.0 million for the six months ended June 30, 2020 and 2019, respectively. See Item 1. Financial Statements, Note 1. General and Basis of Presentation – (c) Cost of ATM Operating Revenues Presentation. The inclusion of this depreciation, accretion, and amortization of intangible assets in Cost of ATM operating revenues would have increased our Cost of ~~ATM~~ATM operating revenues as a percentage of total revenues ~~10.2%~~to 14.1% and ~~11.6%~~11.1% for the three months ended ~~March 31,~~June 30, 2020 and 2019, respectively, and 11.9% and 11.4% for the six months ended June 30, 2020 and 2019, respectively.

(2)~~Includes~~Includes share-based compensation expense of ~~$4.6~~$4.8 million and ~~$4.2~~$4.9 million for the three months ended ~~March 31,~~June 30, 2020 and 2019, respectively, and $9.5 million and $9.1 million for the six months ended June 30, 2020 and 2019, respectively.

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Key Operating Metrics

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


		Three Months Ended March 31,								As of June 30,
		2020	% Change		2019		2020	% Change		2019
Ending number of transacting ATMs:
Ending number of transacting ATMs⁽¹⁾:						Ending number of transacting ATMs⁽¹⁾:
North America	North America	43,792	1.8	%	43,018	North America	41,466	(4.4)	%	43,381
Europe & Africa	Europe & Africa	23,586	(0.8)	%	23,784	Europe & Africa	21,020	(12.3)	%	23,965
Australia & New Zealand	Australia & New Zealand	6,703	(13.8)	%	7,779	Australia & New Zealand	5,439	(24.8)	%	7,235
Total Company-owned⁽¹⁾⁽²⁾	Total Company-owned⁽¹⁾⁽²⁾	74,081	(0.7)	%	74,581	Total Company-owned⁽¹⁾⁽²⁾	67,925	(8.9)	%	74,581

North America	North America	13,351	(6.5)	%	14,273	North America	11,401	(19.7)	%	14,197
Europe & Africa	Europe & Africa	228	2.2	%	223	Europe & Africa	143	(49.8)	%	285

Total Merchant-owned	Total Merchant-owned	13,579	(6.3)	%	14,496	Total Merchant-owned	11,544	(20.3)	%	14,482

Managed Services and Processing:	Managed Services and Processing:					Managed Services and Processing:
North America⁽²⁾	North America⁽²⁾	196,390	42.4	%	137,936	North America⁽²⁾	181,628	(10.6)	%	203,146
Australia & New Zealand	Australia & New Zealand	1,687	2.9	%	1,639	Australia & New Zealand	1,519	(13.7)	%	1,761
Ending number of transacting ATMs – Managed services and processing ⁽¹⁾		198,077	41.9	%	139,575
Total Managed services and processing⁽²⁾						Total Managed services and processing⁽²⁾	183,147	(10.6)	%	204,907

Total ending number of transacting ATMs	Total ending number of transacting ATMs	285,737	25.0	%	228,652	Total ending number of transacting ATMs	262,616	(10.7)	%	293,970

(1)The ending number of transacting ATMs presented in the table above includes only those ATMs transacting during the months of June 2020 and 2019. The 2020 counts do not include ATMs at casinos, theme parks, malls, education facilities, tourist-focused sites and other ATM sites that were temporarily closed during June 2020 as a result of the Pandemic. The Company estimates, that during the month of June 2020, approximately 23,000 ATMs were not transacting due to the Pandemic including approximately 6,000, 2,000, and 15,000 in the Company-owned, Merchant-owned, and Managed services and processing, respectively.

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

~~(2)~~proce~~In May 2019, the Company completed the acquisition of ATM processing contracts to provide transaction processing services for approximately 62,000 ATMs.~~ssing.

4551

Table of ~~Conte~~n t sContents

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


		Three Months Ended March 31,														Three months ended June 30,											Six Months Ended June 30,
		2020			% Change		2019				2020			% Change		2019			2020			% Change		2019
Average number of transacting ATMs:
Average number of transacting ATMs⁽¹⁾:										Average number of transacting ATMs⁽¹⁾:
North America	North America	43,702			1.8	%	42,934			North America	41,782			(3.5)	%	43,286			42,592			(1.2)	%	43,124
Europe & Africa	Europe & Africa	23,778			0.1		23,755			Europe & Africa	21,707			(9.1)		23,884			22,621			(5.0)		23,823
Australia & New Zealand	Australia & New Zealand	6,809			(12.4)		7,771			Australia & New Zealand	5,166			(31.4)		7,536			5,886			(22.9)		7,636
Total Company-owned ⁽¹⁾⁽²⁾	Total Company-owned ⁽¹⁾⁽²⁾	74,289			(0.2)		74,460			Total Company-owned ⁽¹⁾⁽²⁾	68,655			(8.1)		74,706			71,099			(4.7)		74,583

North America	North America	13,480			(3.8)		14,018			North America	10,669			(24.9)		14,215			11,892			(15.6)		14,094
Europe & Africa	Europe & Africa	231			2.7		225			Europe & Africa	167			n/m		244			195			(17.4)		236

Total Merchant-owned	Total Merchant-owned	13,711			(3.7)		14,243			Total Merchant-owned	10,836			(25.1)		14,459			12,087			(15.7)		14,330

Managed Services and Processing:	Managed Services and Processing:									Managed Services and Processing:
North America⁽²⁾⁽³⁾	North America⁽²⁾⁽³⁾	196,561			43.8		136,730			North America⁽²⁾⁽³⁾	171,881			0.8		170,600			182,511			17.1		155,910
Australia & New Zealand	Australia & New Zealand	1,274			(27.2)		1,751			Australia & New Zealand	1,588			(8.0)		1,727			1,395			(20.2)		1,749
Average number of transacting ATMs – Managed services and processing		197,835			42.9		138,481
Total Managed services and processing ⁽⁴⁾										Total Managed services and processing ⁽⁴⁾	173,469			0.7		172,327			183,906			16.6		157,659

Total average number of transacting ATMs	Total average number of transacting ATMs	285,835			25.8		227,184			Total average number of transacting ATMs	252,960			(3.3)		261,492			267,092			8.3		246,572

Total transactions (in thousands):	Total transactions (in thousands):									Total transactions (in thousands):
ATM operations ⁽³⁾	ATM operations ⁽³⁾	263,048			(13.6)		304,528			ATM operations ⁽³⁾	193,776			(38.0)		312,527			456,824			(26.0)		617,055
Managed services and processing, net	Managed services and processing, net	323,544			16.2		278,388			Managed services and processing, net	255,780			(24.8)		340,043			579,324			(6.3)		618,432
Total transactions(4)	Total transactions(4)	586,592			0.6		582,916			Total transactions(4)	449,556			(31.1)		652,570			1,036,148			(16.1)		1,235,487

Total cash withdrawal transactions (in thousands):	Total cash withdrawal transactions (in thousands):									Total cash withdrawal transactions (in thousands):
ATM operations ⁽³⁾⁽⁴⁾	ATM operations ⁽³⁾⁽⁴⁾	173,413			(13.6)		200,688			ATM operations ⁽³⁾⁽⁴⁾	119,223			(42.5)		207,345			292,635			(28.3)		408,033

Per ATM per month amounts (excludes managed services and processing):	Per ATM per month amounts (excludes managed services and processing):									Per ATM per month amounts (excludes managed services and processing):
Cash withdrawal transactions ⁽³⁾⁽⁴⁾	Cash withdrawal transactions ⁽³⁾⁽⁴⁾	657			(12.7)		753			Cash withdrawal transactions ⁽³⁾⁽⁴⁾	500			(35.5)		775			586			(23.4)		765

ATM operating revenues ⁽⁴⁾⁽⁵⁾	ATM operating revenues ⁽⁴⁾⁽⁵⁾	$	1,006		(4.1)		$	1,049		ATM operating revenues ⁽⁴⁾⁽⁵⁾	$	848		(23.7)		$	1,111		$	937		(13.2)		$	1,080
Cost of ATM operating revenues ^{(4) (5)}		693			(5.3)		732
ATM adjusted operating gross profit ^{(4) (5)}		$	313		(1.3)	%	$	317
Cost of ATM operating revenues ^{(5) (6)}										Cost of ATM operating revenues ^{(5) (6)}	596			(18.0)		727			652			(10.6)		729
ATM adjusted operating gross profit ⁽⁵⁾⁽⁶⁾										ATM adjusted operating gross profit ⁽⁵⁾⁽⁶⁾	$	252		(34.4)	%	$	384		$	285		(18.8)	%	$	351

ATM adjusted operating gross profit margin	ATM adjusted operating gross profit margin	31.1		%			30.2		%	ATM adjusted operating gross profit margin	29.7		%			34.6		%	30.4		%			32.5		%

(1)The average number of transacting ATMs presented above represents an average of the ATMs transacting in the respective months of 2020 and 2019. The 2020 counts do not include ATMs at casinos, theme parks, malls, education facilities, tourist-focused sites and other ATM sites that were temporarily closed and not transacting during 2020 as a result of the Pandemic.

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

~~(2)~~(3)In May 2019, the Company completed the acquisition of ATM processing contracts ~~that will provide~~providing transaction processing services for approximately 62,000 ATMs. .

~~(3)~~(4)Total transactions, total cash withdrawal transactions, and total transactions per ATM per month were adversely impacted by the transition of high-volume free-to-use ATMs in the U.K. to pay-to-use. As a result of this transition, the ratio of free-to-use ATMs to pay-to-use ATMs in the U.K. during the three months ended March 31, 2020 was lower than during the three months ended March 31, 2019.Pandemic.

~~(4)~~(5)ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation.

~~(5)~~Table of Contents

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

Revenues


	Three Months Ended June 30,										Six Months Ended June 30,
	2020		2019		% Change		2020		2019		% Change
	(In thousands, excluding percentages)
North America
ATM operating revenues	$	165,057	$	199,536	(17.3)	%	$	358,298	$	390,582	(8.3)	%
ATM product sales and other revenues	8,982		15,679		(42.7)		21,738		28,881		(24.7)
North America total revenues	174,039		215,215		(19.1)		380,036		419,463		(9.4)
Europe & Africa
ATM operating revenues	47,088		101,501		(53.6)		127,046		190,179		(33.2)
ATM product sales and other revenues	1,304		1,969		(33.8)		3,246		4,216		(23.0)
Europe & Africa total revenues	48,392		103,470		(53.2)		130,292		194,395		(33.0)
Australia & New Zealand
ATM operating revenues	12,093		24,726		(51.1)		32,400		50,517		(35.9)
ATM product sales and other revenues	82		92		(10.9)		132		311		(57.6)
Australia & New Zealand total revenues	12,175		24,818		(50.9)		32,532		50,828		(36.0)

Eliminations	(1,414)		(2,682)		(47.3)		(3,066)		(5,595)		(45.2)

Total ATM operating revenues	222,824		323,081		(31.0)		514,678		625,683		(17.7)
Total ATM product sales and other revenues	10,368		17,740		(41.6)		25,116		33,408		(24.8)
Total revenues	$	233,192	$	340,821	(31.6)	%	$	539,794	$	659,091	(18.1)	%

Table of ~~Conte~~n t sContents

~~Revenues~~

Three Months Ended March 31,
2020 2019 % Change
(In thousands, excluding percentages)
North America
ATM operating revenues $ 193,241 $ 191,046 1.1 %
ATM product sales and other revenues 12,756 13,202 (3.4)
North America total revenues 205,997 204,248 0.9
Europe & Africa
ATM operating revenues 79,958 88,678 (9.8)
ATM product sales and other revenues 1,942 2,247 (13.6)
Europe & Africa total revenues 81,900 90,925 (9.9)
Australia & New Zealand
ATM operating revenues 20,307 25,791 (21.3)
ATM product sales and other revenues 50 219 (77.2)
Australia & New Zealand total revenues 20,357 26,010 (21.7)
Eliminations (1,652) (2,913) (43.3)
Total ATM operating revenues 291,854 302,602 (3.6)
Total ATM product sales and other revenues 14,748 15,668 (5.9)
Total revenues $ 306,602 $ 318,270 (3.7) %

Three Months Ended ~~March 31,~~June 30, 2020 Compared to Three Months Ended ~~March 31,~~June 30, 2019

ATM operating revenues. ATM operating revenues, during the three months ended ~~March 31,~~June 30, 2020, decreased ~~$10.7~~$100.3 million, or ~~3.6%~~31.0%, compared to the same period of 2019. ~~The decrease was in part due to foreign currency exchange rate movements impacting the results of our Europe & Africa and Australia & New Zealand segments.~~ Absent ~~the~~ foreign currency exchange rate movements, ATM operating revenues would have decreased ~~$7.2~~ $96.6 million or ~~2.4%~~ 29.9% primarily ~~as a result of lower transaction volumes related~~due to the impacts ~~caused by~~of the ~~COVID-19 pandemic.~~Pandemic that resulted in lower transaction volumes. The decrease in revenue was partially offset by growth in the bank-branding and ~~surcharge-free~~surcharge free network ~~revenues and higher managed services and transaction processing~~ revenues in North America.

~~Table of Conte~~n t s

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

Three Months Ended March 31,
2020 2019 Change % Change
(In thousands, excluding percentages)
North America
Surcharge revenues $ 80,235 $ 85,110 $ (4,875) (5.7) %
Interchange revenues 31,610 34,379 (2,769) (8.1)
Bank-branding and surcharge-free network revenues 53,768 45,873 7,895 17.2
Managed services and transaction processing revenues 27,628 25,684 1,944 7.6
North America total ATM operating revenues 193,241 191,046 2,195 1.1
Europe & Africa
Surcharge revenues 32,596 31,045 1,551 5.0
Interchange revenues 44,997 55,308 (10,311) (18.6)
Bank-branding and surcharge-free network revenues 347 — 347 —
Managed services and processing revenues 2,018 2,325 (307) (13.2)
Europe & Africa total ATM operating revenues 79,958 88,678 (8,720) (9.8)
Australia & New Zealand
Surcharge revenues 15,945 20,668 (4,723) (22.9)
Interchange revenues 873 1,303 (430) (33.0)
Managed services and transaction processing revenues 3,489 3,820 (331) (8.7)
Australia & New Zealand total ATM operating revenues 20,307 25,791 (5,484) (21.3)
Eliminations (1,652) (2,913) 1,261 (43.3)
Total ATM operating revenues $ 291,854 $ 302,602 $ (10,748) (3.6) %



	Three Months Ended June 30,
	2020		2019		Change		% Change
	(In thousands, excluding percentages)
North America
Surcharge revenues	$	63,004	$	88,234	$	(25,230)	(28.6)	%
Interchange revenues	27,785		34,286		(6,501)		(19.0)
Bank-branding and surcharge-free network revenues	52,474		48,538		3,936		8.1
Managed services and processing revenues	21,794		28,478		(6,684)		(23.5)

North America total ATM operating revenues	165,057		199,536		(34,479)		(17.3)
Europe & Africa
Surcharge revenues	17,472		44,427		(26,955)		(60.7)
Interchange revenues	28,366		54,423		(26,057)		(47.9)
Bank-branding and surcharge-free network revenues	358		483		(125)		—
Managed services and processing revenues	892		2,168		(1,276)		(58.9)
Europe & Africa total ATM operating revenues	47,088		101,501		(54,413)		(53.6)
Australia & New Zealand
Surcharge revenues	8,343		19,776		(11,433)		(57.8)
Interchange revenues	594		1,198		(604)		(50.4)

Managed services and processing revenues	3,156		3,752		(596)		(15.9)

Australia & New Zealand total ATM operating revenues	12,093		24,726		(12,633)		(51.1)
Eliminations	(1,414)		(2,682)		1,268		(47.3)

Total ATM operating revenues	$	222,824	$	323,081	$	(100,257)	(31.0)	%

North America. For the three months ended ~~March 31,~~June 30, 2020, ATM operating revenues in our North America segment ~~increased $2.2~~decreased $34.5 million, or ~~1.1%~~17.3%, compared to the same period of ~~2019. This increase was attributable~~2019 due to ~~growth~~the impacts of the Pandemic that resulted in ~~bank-branding and surcharge-free network revenues, and higher managed services and~~lower transaction ~~processing revenues.~~ ~~The increase was partially offset by~~volumes driving lower surcharge and interchange revenues ~~resulting from fewer transactions due~~as well as lower managed services and processing revenues. The decrease in revenues was partially offset by growth in the bank-branding and surcharge free network revenues in North America, driven by the addition of new branding arrangements and new issuers to the ~~COVID-19 pandemic~~.Allpoint Network.

Europe & Africa. For the three months ended ~~March 31,~~June 30, 2020, ATM operating revenues in our Europe & Africa segment decreased ~~$8.7~~$54.4 million, or ~~9.8%~~53.6% compared to the same period of 2019. Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased by $52.1 million, or 51.4%, primarily due to the impacts of the Pandemic that resulted in lower transaction volumes driving lower surcharge and interchange revenues as well as lower managed services and processing revenues. The travel restrictions associated with the Pandemic also resulted in lower dynamic currency conversion revenues (recognized within surcharge revenues) of approximately $8.7 million. These declines were partially offset by an increase in revenues attributable to an increase in the number of transacting ATMs in South Africa.

Australia & New Zealand. For the three months ended June 30, 2020, ATM operating revenues in our Australia & New Zealand segment decreased $12.6 million, or 51.1%, compared to the same period of 2019. Absent the foreign currency exchange rate movements, our ATM operating revenues would havehave decreased by ~~$7.0~~$11.9 million, or ~~7.9%~~48.1%, primarily as a result of lower ATM operating revenues in the U.K. resulting from lower transaction volumes due to the COVID-19 impact and the removal of 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 decrease was partially offset by an increase in the number of transacting ATMs and the associated transaction activity in South Africa.

~~Australia & New Zealand.~~ For the three months ended March 31, 2020, ATM operating revenues in our Australia & New Zealand segment decreased $5.5 million, or 21.3%, compared to the same period of 2019. Approximately $1.6 million, or 28%, of this decline was a result of foreign currency exchange rate movements with the remainder due to a reduction in the number of transacting ATMs and ~~fewer transactions per ATM due to~~ the ~~impact~~impacts of the ~~COVID-19 pandemic.~~Pandemic that resulted in lower transaction volumes driving lower surcharge and interchange revenues as well as lower managed services and processing revenues.

Table of Contents

ATM product sales and other revenues. For the three months ended ~~March 31,~~June 30, 2020, ATM product sales and other revenues decreased ~~5.9%~~$7.4 million, or 41.6%, compared to the same period of 2019. The decrease was primarily related to lower equipment sales in the U.S. and lower ATM servicing fees in the U.S. and U.K. as a result of the Pandemic.

For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures, below. In addition, see Factors Impacting Comparability Between Periods, below.

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

ATM operating revenues. ATM operating revenues, during the six months ended June 30, 2020, decreased $111.0 million, or 17.7%, compared to the same period of 2019. Absent foreign currency exchange rate movements, ATM operating revenues would have decreased $103.8 million or 16.6% primarily due to the impacts of the Pandemic that resulted in lower transaction volumes. The decrease in revenue was partially offset by growth in bank-branding and surcharge-free network revenues in North America.

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


	Six Months Ended June 30,
	2020		2019		Change		% Change
	(In thousands, excluding percentages)
North America
Surcharge revenues	$	143,239	$	173,344	$	(30,105)	(17.4)	%
Interchange revenues	59,395		68,665		(9,270)		(13.5)
Bank-branding and surcharge-free network revenues	106,242		94,411		11,831		12.5
Managed services and transaction processing revenues	49,422		54,162		(4,740)		(8.8)

North America total ATM operating revenues	358,298		390,582		(32,284)		(8.3)
Europe & Africa
Surcharge revenues	50,068		75,472		(25,404)		(33.7)
Interchange revenues	73,363		109,731		(36,368)		(33.1)
Bank-branding and surcharge-free network revenues	705		483		222		—
Managed services and processing revenues	2,910		4,493		(1,583)		(35.2)
Europe & Africa total ATM operating revenues	127,046		190,179		(63,133)		(33.2)
Australia & New Zealand
Surcharge revenues	24,288		40,444		(16,156)		(39.9)
Interchange revenues	1,467		2,501		(1,034)		(41.3)

Managed services and transaction processing revenues	6,645		7,572		(927)		(12.2)

Australia & New Zealand total ATM operating revenues	32,400		50,517		(18,117)		(35.9)
Eliminations	(3,066)		(5,595)		2,529		(45.2)
Total ATM operating revenues	$	514,678	$	625,683	$	(111,005)	(17.7)	%

North America. For the six months ended June 30, 2020, ATM operating revenues in our North America segment decreased $32.3 million, or 8.3%, compared to the same period of 2019 due to the impacts of the Pandemic that resulted in lower transaction volumes driving lower surcharge and interchange revenues as well as lower managed services and processing revenues. The decrease in revenues was partially offset by growth in the bank-branding and surcharge free network revenues in North America, driven by the addition of new branding arrangements and new issuers to the Allpoint Network.

Table of ~~Conte~~n t sContents

Europe & Africa. For the six months ended June 30, 2020, ATM operating revenues in our Europe & Africa segment decreased $63.1 million, or 33.2%, compared to the same period of 2019. Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased by $59.1 million, or 31.1%, primarily due to the impacts of the Pandemic that resulted in lower transaction volumes driving lower surcharge and interchange revenues as well as managed services and processing revenues. The travel restrictions associated with the Pandemic also resulted in lower dynamic currency conversion revenues (recognized within surcharge revenues) of approximately $9.7 million. The decrease is also due to the removal of 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. These declines were partially offset by revenue growth driven by an increase in the number of transacting ATMs and the associated transaction activity in South Africa.

Australia & New Zealand. For the six months ended June 30, 2020, ATM operating revenues in our Australia & New Zealand segment decreased $18.1 million, or 35.9%, compared to the same period of 2019. Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased 15.8 million, or 31.2% primarily due to a reduction in the number of transacting ATMs and the impacts of the Pandemic that resulted in lower transaction volumes driving lower surcharge and interchange revenues as well as lower managed services and processing revenues.

ATM product sales and other revenues. For the six months ended June 30, 2020, ATM product sales and other revenues decreased $8.3 million, or 24.8%, compared to the same period of 2019. The decrease was primarily related to lower equipment sales in the U.S. and lower ATM servicing fees in the U.S. and U.K. as a result of the Pandemic.

For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures, below. In addition, see Factors Impacting Comparability Between Periods, below.

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


		Three Months Ended March 31,											Three Months Ended June 30,								Six Months Ended June 30,
		2020		2019		% Change			2020		2019		% Change		2020		2019		% Change
									(In thousands, excluding percentages)
North America	North America							North America
Cost of ATM operating revenues	Cost of ATM operating revenues	$	128,838	$	127,150	1.3	%	Cost of ATM operating revenues	$	111,846	$	130,125	(14.0)	%	$	240,684	$	257,275	(6.4)	%
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	11,066		10,758		2.9		Cost of ATM product sales and other revenues	7,317		13,039		(43.9)		18,383		23,797		(22.8)
North America total cost of revenue	North America total cost of revenue	139,904		137,908		1.4		North America total cost of revenue	119,163		143,164		(16.8)		259,067		281,072		(7.8)
Europe & Africa	Europe & Africa							Europe & Africa
Cost of ATM operating revenues	Cost of ATM operating revenues	51,790		62,553		(17.2)		Cost of ATM operating revenues	31,636		62,543		(49.4)		83,426		125,096		(33.3)
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	844		856		(1.4)		Cost of ATM product sales and other revenues	176		1,000		(82.4)		1,020		1,856		(45.0)
Europe & Africa total cost of revenues	Europe & Africa total cost of revenues	52,634		63,409		(17.0)		Europe & Africa total cost of revenues	31,812		63,543		(49.9)		84,446		126,952		(33.5)
Australia & New Zealand	Australia & New Zealand							Australia & New Zealand
Cost of ATM operating revenues	Cost of ATM operating revenues	14,128		19,050		(25.8)		Cost of ATM operating revenues	8,813		17,653		(50.1)		22,941		36,703		(37.5)
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	147		311		(52.7)		Cost of ATM product sales and other revenues	130		262		(50.4)		277		573		(51.7)
Australia & New Zealand total cost of revenues	Australia & New Zealand total cost of revenues	14,275		19,361		(26.3)		Australia & New Zealand total cost of revenues	8,943		17,915		(50.1)		23,218		37,276		(37.7)
Corporate total cost of revenues	Corporate total cost of revenues	561		261		114.9		Corporate total cost of revenues	203		366		(44.5)		764		627		21.9

Eliminations	Eliminations	(1,652)		(2,856)		n/m		Eliminations	(1,414)		(2,606)		(45.7)		(3,066)		(5,462)		(43.9)

Cost of ATM operating revenues	Cost of ATM operating revenues	193,665		206,158		(6.1)		Cost of ATM operating revenues	151,084		208,081		(27.4)		344,749		414,239		(16.8)
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	12,057		11,925		1.1		Cost of ATM product sales and other revenues	7,623		14,301		(46.7)		19,680		26,226		(25.0)
Total cost of revenues	Total cost of revenues	$	205,722	$	218,083	(5.7)	%	Total cost of revenues	$	158,707	$	222,382	(28.6)	%	$	364,429	$	440,465	(17.3)	%

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Three Months Ended ~~March 31,~~June 30, 2020 Compared to Three Months Ended ~~March 31,~~June 30, 2019

Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets). Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) during the three months ended June 30, 2020 decreased $57.0 million, or 27.4%, compared to the same period of 2019. Absent foreign currency exchange rate movements, our Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) decreased $54.6 million, or 26.2%. This decrease is consistent with the decline in revenues due to the Pandemic that resulted in lower transaction volumes and the reduced cost of operations across all of our segments related to our temporary salary reductions and restructuring activities.

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



	Three Months Ended June 30,
	2020		2019		Change		% Change
	(In thousands, excluding percentages)
North America
Merchant commissions	$	50,591	$	63,228	$	(12,637)	(20.0)	%
Vault cash rental	10,558		12,509		(1,951)		(15.6)
Other costs of cash	18,781		15,182		3,599		23.7
Repairs and maintenance	12,160		13,298		(1,138)		(8.6)
Communications	3,216		2,734		482		17.6
Transaction processing	1,161		2,344		(1,183)		(50.5)
Employee costs	5,827		7,880		(2,053)		(26.1)
Other expenses	9,552		12,950		(3,398)		(26.2)
North America total cost of ATM operating revenues	111,846		130,125		(18,279)		(14.0)
Europe & Africa
Merchant commissions	11,183		24,182		(12,999)		(53.8)
Vault cash rental	2,666		3,833		(1,167)		(30.4)
Other costs of cash	3,642		6,381		(2,739)		(42.9)
Repairs and maintenance	2,027		3,369		(1,342)		(39.8)
Communications	2,559		2,906		(347)		(11.9)
Transaction processing	3,171		5,688		(2,517)		(44.3)
Employee costs	5,888		10,759		(4,871)		(45.3)
Other expenses	500		5,425		(4,925)		(90.8)
Europe & Africa total cost of ATM operating revenues	31,636		62,543		(30,907)		(49.4)
Australia & New Zealand
Merchant commissions	3,411		9,656		(6,245)		(64.7)
Vault cash rental	998		1,727		(729)		(42.2)
Other costs of cash	1,111		1,765		(654)		(37.1)
Repairs and maintenance	1,272		1,800		(528)		(29.3)
Communications	391		649		(258)		(39.8)
Transaction processing	485		482		3		0.6
Employee costs	752		1,133		(381)		(33.6)
Other expenses	393		441		(48)		(10.9)
Australia & New Zealand total cost of ATM operating revenues	8,813		17,653		(8,840)		(50.1)
Corporate	203		366		(163)		(44.5)
Eliminations	(1,414)		(2,606)		1,192		(45.7)
Total cost of ATM operating revenues	$	151,084	$	208,081	$	(56,997)	(27.4)	%

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North America. For the three months ended June 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) in our North America segment decreased $18.3 million, or 14.0%, compared to the same period of 2019. This decline was primarily due to the Pandemic that resulted in lower transaction volumes driving lower merchant commissions, vault cash rental fees and other operating costs. The decrease was also due to lower employee costs and other costs due to our restructuring activities and the temporary salary reductions implemented during the three months ended June 30, 2020 partially offset by an increase in other cost of cash related to higher armored costs to ensure cash availability and higher cash losses in the U.S.

Europe & Africa. For the three months ended June 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Europe & Africa segment decreased by $30.9 million, or 49.4%, compared to the same period of 2019. Excluding foreign currency exchange rate movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) decreased $29.5 million or 47.2%. This decrease was due to the Pandemic that resulted in lower transaction volumes driving lower merchant commissions, vault cash rental fees and other operating costs. The decrease was also due to the closure of certain cash management facilities as part of our restructuring activities and lower employee costs due to the temporary salary reductions implemented during the three months ended June 30, 2020. In addition, the U.K. Supreme Court eliminated our obligation to pay business rate taxes to certain local authorities that resulted in a decrease in the Other expenses line within the Cost of ATM operating revenues.

Australia & New Zealand. For the three months ended June 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Australia & New Zealand segment decreased $8.8 million, or 50.1%, compared to the same period of 2019. Excluding foreign currency exchange rate movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) decreased $8.3 million or 47.0%. This decline was primarily due to the Pandemic that resulted in lower transaction volumes driving lower merchant commissions, vault cash rental fees, armored car services and other operating costs. The decrease was also due to lower employee costs due to the temporary salary reductions implemented during the three months ended June 30, 2020.

Cost of ATM product sales and other revenues. For the three months ended June 30, 2020, our cost of ATM product sales and other revenues decreased 46.7% from the same period of 2019. The decrease was primarily related to lower equipment sales in the U.S. and lower ATM servicing costs in the U.S. and U.K. as a result of the Pandemic.

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets). Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) during the ~~three~~six months ended ~~March 31,~~June 30, 2020 decreased ~~$12.5~~$69.5 million, or ~~6.1%~~16.8%, compared to the same period of 2019. Absent ~~the~~ foreign currency exchange rate movements, our Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) decreased ~~$10.1~~$64.6 million, or ~~4.9%~~15.6%. This decrease is ~~generally~~ consistent with the decline in revenues due to the Pandemic that resulted in lower transaction volumes and the reduced cost of operations across all of our segments related to our temporary salary reductions and restructuring activities.

~~Table of Conte~~n t s

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

Three Months Ended March 31,
2020 2019 Change % Change
(In thousands, excluding percentages)
North America
Merchant commissions $ 60,811 $ 62,250 $ (1,439) (2.3) %
Vault cash rental 11,314 12,239 (925) (7.6)
Other costs of cash 16,054 15,616 438 2.8
Repairs and maintenance 13,473 12,453 1,020 8.2
Communications 3,424 3,718 (294) (7.9)
Transaction processing 1,731 1,410 321 22.8
Employee costs 8,730 7,702 1,028 13.3
Other expenses 13,301 11,762 1,539 13.1
North America total cost of ATM operating revenues 128,838 127,150 1,688 1.3
Europe & Africa
Merchant commissions 19,311 23,428 (4,117) (17.6)
Vault cash rental 3,525 3,599 (74) (2.1)
Other costs of cash 4,724 5,881 (1,157) (19.7)
Repairs and maintenance 3,178 4,100 (922) (22.5)
Communications 2,613 2,975 (362) (12.2)
Transaction processing 3,945 5,452 (1,507) (27.6)
Employee costs 9,217 10,990 (1,773) (16.1)
Other expenses 5,277 6,128 (851) (13.9)
Europe & Africa total cost of ATM operating revenues 51,790 62,553 (10,763) (17.2)
Australia & New Zealand
Merchant commissions 7,512 10,242 (2,730) (26.7)
Vault cash rental 1,306 2,029 (723) (35.6)
Other costs of cash 1,240 1,784 (544) (30.5)
Repairs and maintenance 1,659 1,988 (329) (16.5)
Communications 418 752 (334) (44.4)
Transaction processing 612 514 98 19.1
Employee costs 923 1,209 (286) (23.7)
Other expenses 458 532 (74) (13.9)
Australia & New Zealand total cost of ATM operating revenues 14,128 19,050 (4,922) (25.8)
Corporate 561 261 300 114.9
Eliminations (1,652) (2,856) 1,204 n/m
Total cost of ATM operating revenues $ 193,665 $ 206,158 $ (12,493) (6.1) %

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	Six Months Ended June 30,
	2020		2019		Change		% Change
	(In thousands, excluding percentages)
North America
Merchant commissions	$	111,402	$	125,478	$	(14,076)	(11.2)	%
Vault cash rental	21,872		24,748		(2,876)		(11.6)
Other costs of cash	34,835		30,798		4,037		13.1
Repairs and maintenance	25,633		25,751		(118)		(0.5)
Communications	6,640		6,452		188		2.9
Transaction processing	2,892		3,754		(862)		(23.0)
Employee costs	14,557		15,582		(1,025)		(6.6)
Other expenses	22,853		24,712		(1,859)		(7.5)
North America total cost of ATM operating revenues	240,684		257,275		(16,591)		(6.4)
Europe & Africa
Merchant commissions	30,494		47,610		(17,116)		(36.0)
Vault cash rental	6,191		7,432		(1,241)		(16.7)
Other costs of cash	8,366		12,262		(3,896)		(31.8)
Repairs and maintenance	5,205		7,469		(2,264)		(30.3)
Communications	5,172		5,881		(709)		(12.1)
Transaction processing	7,116		11,140		(4,024)		(36.1)
Employee costs	15,105		21,749		(6,644)		(30.5)
Other expenses	5,777		11,553		(5,776)		(50.0)
Europe & Africa total cost of ATM operating revenues	83,426		125,096		(41,670)		(33.3)
Australia & New Zealand
Merchant commissions	10,923		19,898		(8,975)		(45.1)
Vault cash rental	2,304		3,756		(1,452)		(38.7)
Other costs of cash	2,351		3,549		(1,198)		(33.8)
Repairs and maintenance	2,931		3,788		(857)		(22.6)
Communications	809		1,401		(592)		(42.3)
Transaction processing	1,097		996		101		10.1
Employee costs	1,675		2,342		(667)		(28.5)
Other expenses	851		973		(122)		(12.5)
Australia & New Zealand total cost of ATM operating revenues	22,941		36,703		(13,762)		(37.5)
Corporate	764		627		137		21.9
Eliminations	(3,066)		(5,462)		2,396		(43.9)
Total cost of ATM operating revenues	$	344,749	$	414,239	$	(69,490)	(16.8)	%

North America. For the ~~three~~six months ended ~~March 31,~~June 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) in our North America segment ~~increased $1.7~~decreased $16.6 million, or ~~1.3%~~6.4%, compared to the same period of 2019. ~~The increase~~This decline was primarily ~~as a result of higher employee costs, higher repairs and maintenance costs and higher costs with~~due to the ~~growth~~Pandemic that resulted in ~~bank branding revenues. The increase was partially offset by~~ lower transaction volumes driving lower merchant commissions, vault cash rental fees and other operating costs. The decrease was also due to lower ~~merchant commissions as a result~~employee costs and other costs due to our restructuring activities and the temporary salary reductions implemented during the three months ended June 30, 2020 partially offset by an increase in other cost of ~~lower transaction volumes.~~cash related to higher armored costs to ensure cash availability and higher cash losses in the U.S.

5059

Table of ~~Conte~~n t sContents

Europe & Africa. For the ~~three~~six months ended ~~March 31,~~June 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Europe & Africa segment decreased by ~~$10.8~~$41.7 million, or ~~17.2%~~33.3%, compared to the same period of 2019. Excluding foreign currency exchange rate movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) decreased ~~$9.7~~$39.2 million or ~~15.5%~~31.3%. This ~~decline is directionally consistent with~~decrease was due to the ~~decline~~Pandemic that resulted in ~~ATM operating revenue with reduced~~lower transaction volumes ~~impacted by the COVID-19 pandemic~~driving lower merchant commissions, vault cash rental fees and ~~the reduced costs that resulted from~~other operating costs. The decrease was also due to the closure of certain cash management facilities as part of our restructuring ~~activities.~~activities and lower employee costs due to the temporary salary reductions implemented during the three months ended June 30, 2020. In addition, the U.K. Supreme Court eliminated our obligation to pay business rate taxes to certain local authorities that resulted in a decrease in the Other expenses line within the Cost of ATM operating revenues.

Australia & New Zealand. For the ~~three~~six months ended ~~March 31,~~June 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Australia & New Zealand segment decreased ~~$4.9~~$13.8 million, or ~~25.8%~~37.5%, compared to the same period of 2019. E~~xcluding~~Excluding foreign currency exchange rate movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) ~~decreased $3.8~~decreased $12.1 million or ~~20.0%~~33.0%. This decline ~~is directionally consistent with~~was primarily due to the ~~decline~~Pandemic that resulted in ~~ATM operating revenue with fewer ATMs and~~ lower transaction ~~volumes.~~volumes driving lower merchant commissions, vault cash rental fees, armored car services and other operating costs. The decrease was also due to lower employee costs due to the temporary salary reductions implemented during the three months ended June 30, 2020.

Cost of ATM product sales and other revenues. For the ~~three~~six months ended ~~March 31,~~June 30, 2020, our cost of ATM product sales and other revenues ~~increased 1.1% from~~decreased 25.0% compared to the same period of ~~2019 due~~2019. The decrease was primarily related to lower equipment sales in the ~~mix~~U.S. and lower ATM servicing costs in the U.S. and U.K. as a result of ~~products and services sold during~~ the ~~periods.~~Pandemic.

For additional information related to our constant-currency calculations, see Non-GAAP Financial Measures below.

Selling, General, and Administrative Expenses


			Three Months Ended March 31,															Three Months Ended June 30,											Six Months Ended June 30,

			2020			2019			% Change			2020			2019			% Change			2020			2019			% Change
		(In thousands, excluding percentages)																		(In thousands, excluding percentages)
Selling, general, and administrative expenses	Selling, general, and administrative expenses		$	37,730		$	39,437		(4.3)	%	Selling, general, and administrative expenses	$	28,054		$	37,111		(24.4)	%		$	65,784		$	76,548		(14.1)	%
Share-based compensation expense	Share-based compensation expense		4,648			4,223			10.1		Share-based compensation expense	4,804			4,884			(1.6)			9,452			9,107			3.8
Total selling, general, and administrative expenses	Total selling, general, and administrative expenses		$	42,378		$	43,660		(2.9)	%	Total selling, general, and administrative expenses	$	32,858		$	41,995		(21.8)	%		$	75,236		$	85,655		(12.2)	%

Percentage of total revenues:	Percentage of total revenues:										Percentage of total revenues:
Selling, general, and administrative expenses	Selling, general, and administrative expenses		12.3		%	12.4		%			Selling, general, and administrative expenses	12.0		%	10.9		%				12.2		%	11.6		%
Share-based compensation expense	Share-based compensation expense		1.5		%	1.3		%			Share-based compensation expense	2.1			1.4						1.8			1.4
Total selling, general, and administrative expenses	Total selling, general, and administrative expenses		13.8		%	13.7		%			Total selling, general, and administrative expenses	14.1		%	12.3		%				13.9		%	13.0		%

Selling, general, and administrative expenses (“SG&A expenses”), excluding share-based compensation expense. For the three and six months ended ~~March 31,~~June 30, 2020, SG&A expenses, excluding share-based compensation expense, decreased ~~$1.7~~$9.1 million, or ~~4.3%~~24.4%, and 10.8 million, or 14.1%, respectively, compared to the same period of 2019. ~~This decrease is~~These decreases were primarily a result of lower employee compensation costs ~~driven by~~due to temporary salary reductions, restructuring activities and lower incentive compensation costs as well as lower professional fees and ~~lower~~ ~~facilities~~ ~~related costs.~~other cost reductions implemented as a result of the Pandemic.

Share-based compensation expense. For the three and six months ended ~~March 31,~~June 30, 2020, share-based compensation expense decreased $0.1 million and increased ~~$0.4~~$0.3 million, respectively, compared to the same period of ~~2019. This increase is~~2019 as a result of the amount, timing and terms of share-based payment awards granted during the periods, net of estimated forfeitures. For additional information related to share-based compensation expense, see Item 1. Financial Statements, Note 4. Share-based Compensation.

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Restructuring Expenses

~~During~~For the three and six months ended ~~March 31,~~June 30, 2020, we continued certain corporate reorganization and cost reduction initiatives that began in 2019. WeIn addition, we implemented additional cost reduction measures during the three months ended June 30, 2020 in response to the impacts of the Pandemic. During the three and six months ended June 30, 2020, we incurred ~~$1.2~~$3.3 million and $4.5 million, respectively, of pre-tax expenses related to ~~this activity~~these restructuring activities that primarily included facility closures, workforce reductions ~~professional fees~~ and other related charges.

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

~~Table of Conte~~n t s

Depreciation and Accretion Expense


			Three Months Ended March 31,													Three Months Ended June 30,									Six Months Ended June 30,

			2020			2019			% Change			2020		2019		% Change			2020		2019		% Change
		(In thousands, excluding percentages)																(In thousands, excluding percentages)
Depreciation and accretion expense	Depreciation and accretion expense		$	32,211		$	32,973		(2.3)	%	Depreciation and accretion expense	$32,072		$33,205		(3.4)	%		$64,283		$66,178		(2.9)	%

Percentage of total revenues	Percentage of total revenues		10.5		%	10.4		%			Percentage of total revenues	13.8	%	9.7	%				11.9	%	10.0	%

Depreciation and accretion expense. For the three and six months ended ~~March 31,~~June 30, 2020, depreciation and accretion expense decreased ~~$0.8~~$1.1 million or ~~2.3%~~3.4%, and $1.9 million, or 2.9%, respectively, compared to the same ~~period~~periods of ~~2019. This decrease was primarily~~2019 due to the amount and timing of capital additions in the ordinary course of business and the fluctuation in foreign ~~currency movements.~~

currency.

Amortization of Intangible Assets


			Three Months Ended March 31,															Three Months Ended June 30,											Six Months Ended June 30,

			2020			2019			% Change			2020			2019			% Change			2020			2019			% Change
		(In thousands, excluding percentages)																		(In thousands, excluding percentages)
Amortization of intangible assets	Amortization of intangible assets		$	8,413		$	12,412		(32.2)	%	Amortization of intangible assets	$	8,849		$	12,591		(29.7)	%		$	17,262		$	25,003		(31.0)	%

Percentage of total revenues	Percentage of total revenues		2.7		%	3.9		%			Percentage of total revenues	3.8		%	3.7		%				3.2		%	3.8		%

Amortization of intangible assets. For the three and six months ended ~~March 31,~~June 30, 2020, amortization of intangible assets decreased by ~~$4.0~~$3.7 million, or ~~32.2%~~29.7%, and $7.7 million or 31.0% compared to the same period ~~in 2019. This decrease was~~of 2019 primarily due to the timing of the related intangible assets becoming fully amortized.

Loss on Disposal and Impairment of Assets


			Three Months Ended March 31,															Three Months Ended June 30,											Six Months Ended June 30,

			2020			2019			% Change			2020			2019			% Change			2020			2019			% Change
		(In thousands, excluding percentages)																		(In thousands, excluding percentages)
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets		$	921		$	968		(4.9)	%	Loss on disposal and impairment of assets	$	112		$	1,496		(92.5)	%		$	1,033		$	2,464		(58.1)	%

Percentage of total revenues	Percentage of total revenues		0.3		%	0.3		%			Percentage of total revenues	—		%	0.4		%				0.2		%	0.4		%

Loss on disposal and impairment of assets. ~~During~~The losses recognized during the three and six months ended ~~March 31,~~June 30, 2020 ~~we recognized losses of approximately $0.9 million~~and 2019 primarily related to the disposal of ATM assets in the normal course of business.

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Interest Expense, net


			Three Months Ended March 31,													Three Months Ended June 30,									Six Months Ended June 30,

			2020			2019			% Change			2020		2019		% Change			2020		2019		% Change
		(In thousands, excluding percentages)																(In thousands, excluding percentages)
Interest expense, net	Interest expense, net		$	6,421		$	6,643		(3.3)	%	Interest expense, net	$8,809		$6,871		28.2	%		$15,230		$13,514		12.7	%

Percentage of total revenues	Percentage of total revenues		2.1		%	2.1		%			Percentage of total revenues	3.8	%	2.0	%				2.8	%	2.1	%

Interest expense, net. For the three months and six months ended ~~March 31,~~June 30, 2020, ~~interest~~Interest expense, net, ~~decreased $0.2~~increased $1.9 million, or ~~3.3%~~28.2%, and $1.7 million, or 12.7%, respectively, compared to the same period of 2019. This ~~decrease~~increase was attributable to a comparatively ~~lower~~higher average outstanding debt balance ~~and a comparatively lower weighted average interest rate under~~on our revolving credit facility during the ~~Credit Agreement.~~period. For additional information related to our outstanding borrowings, see Item 1. Financial Statements, Note 9. Long-Term Debt.

~~Table of Conte~~n t s

Other (income) expenses ~~(income)~~

During the three and six months ended ~~March 31,~~June 30, 2020, we ~~recognized~~incurred a net gain in the Other income (expenses) line in the Consolidated Statements of ~~$4.1~~Operations of $6.4 million and $2.5 million, respectively, primarily attributable to foreign currency translation adjustments, a net gain in ~~Other expenses (income)~~terminating derivative contracts and to revise the estimated fair value of the acquisition related contingent consideration ~~liability. This gain was entirely~~liability partially offset by ~~foreign currency translation losses and~~ other non-operating ~~costs totaling $7.9~~ ~~million. For additional information on the acquisition related contingent consideration, see~~ ~~Item 1. Financial Statements, Note 14. Fair Value Measurements.~~

costs.

Income Tax (Benefit) Expense


			Three Months Ended March 31,															Three Months Ended June 30,									Six Months Ended June 30,

			2020			2019			% Change			2020			2019			% Change		2020			2019			% Change
		(In thousands, excluding percentages)																	(In thousands, excluding percentages)
Income tax expense			$	(3,737)		$	3,129		(219.4)	%
Income tax (benefit) expense											Income tax (benefit) expense	$	(10,687)		$	3,565		n/m		$	(14,424)		$	6,694		n/m

Effective tax rate	Effective tax rate		(185.7)		%	42.0		%			Effective tax rate	84.8		%	25.4		%			136.1		%	31.2		%

Income tax (benefit) expense. Our income tax benefit for the three months ended ~~March 31,~~June 30, 2020 totaled ~~$3.7~~$10.7 million resulting in an effective tax rate of ~~(185.7)%~~84.8%, compared to an expense of ~~$3.1~~$3.6 million, and an effective tax rate of ~~42.0%~~25.4%, for the same period of 2019. The Company’s income tax benefit for the six months ended June 30, 2020 totaled $14.4 million resulting in an effective tax rate of 136.1%, compared to an expense of $6.7 million, and an effective tax rate of 31.2%, for the same period of 2019.

The decrease in the tax expense for the three months ended June 30, 2020, compared to the same period of 2019, was primarily attributable to the pre-tax losses incurred in the three months ended June 30, 2020, compared to the pre-tax income in the same period of 2019. The decrease in the tax expense for the ~~three~~six months ended ~~March 31,~~June 30, 2020, compared to the same period of 2019, was ~~primarily~~ attributable to the pre-tax loss incurred during the six months ended June 30, 2020 and to a non-recurring benefit ~~in the current period~~ from the carry back of net operating losses to prior tax years at the higher 35% U.S. tax rate, compared to the current tax rate of 21%, as a result of recent changes in U.S. tax law. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in the U.S., which provided for an elective five-year carryback of net operating losses (NOLs) generated in taxable years beginning after December 31, 2017 and before January 1, 2021. As a result of this change in law and ~~because~~since the Company incurred net operating losses in 2018, the Company plans to carry back these 2018 losses to prior periods and expects to receive refunds of taxes paid at higher rates in earlier periods. ~~Additionally, lower pretax profits in the current period compared to the prior year period contributed to the lower tax expense, partly offset by other factors.~~

Factors Impacting Comparability Between Periods

COVID-19 pandemic. As discussed in our COVID-19 Update, Other Recent trends and Events and our Results of Operations above, during the three and six months ended June 30, 2020, the Pandemic has had a significant impact on our operating results.

Foreign currency exchange rates. Our reported financial results are subject to fluctuations in foreign currency exchange rates. We estimate that the year-over-year fluctuation of the currencies in the markets in which we operate relative to the U.S. dollar caused our reported total revenues to be lower by approximately ~~$3.7~~$3.8 million and $7.5 million, respectively, during the three and six months ended ~~March 31,~~June 30, 2020.

Table of Contents

Please see the Form 10-K for the year ended December 31, 2019, for discussion of developing trends and recent events with relevance to the business.

~~Table of Conte~~n t s

Long-Term 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 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.

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 believe our network can serve as the digital to physical gateway for financial institutions, digital-based businesses and consumers that need a way to enable cash-based transactions. We see opportunities to expand our operations through the following efforts:

•expanding our relationships with leading financial institutions;

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

•increasing transaction levels at our existing locations;

•broadening transaction types at our physical access points enabled by mobile technology;

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

•developing and providing additional services at our existing ATMs;

•pursuing additional managed services opportunities; and

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

For additional information related to each of our strategic points above, see Part I. Item 1. Business - Our Strategy in our 2019 Form 10-K.

Non-GAAP Financial Measures

DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION

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

Furthermore, the non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow measures contained within our consolidated financial statements. The non-GAAP measures that we use are not defined in the same manner by all companies and therefore may not be comparable to other similarly titled measures of other companies.

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EBITDA ~~Adjusted EBITDA,~~ and Adjusted EBITDA ~~Margin~~

EBITDA adds net interest expense, income tax expense (benefit), depreciation and accretion, amortization of deferred financing costs and note discounts, ~~and~~ amortization of intangible assets, and certain costs not anticipated to occur in future periods to net income. Adjusted EBITDA ~~and Adjusted EBITDA Margin exclude~~excludes the items excluded from EBITDA as well as share-based compensation expense, certain other income and expense amounts, acquisition related expenses, gains or losses on disposal and impairment of assets, certain non-operating expenses, (if applicable in a particular period), our obligation for the payment of income taxes, net interest expense, and other obligations such as capital expenditures, and includes an adjustment for noncontrolling interests. Depreciation and accretion expense and amortization of intangible assets are excluded from Adjusted EBITDA and Adjusted EBITDA margins as these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired. ~~Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues.~~

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

Adjusted Net Income represents net income computed in accordance with U.S. GAAP, before amortization of intangible assets and deferred financing costs, gains or losses on disposal and impairment of assets, share-based compensation expense, certain other income and expense amounts, acquisition related expenses, certain non-operating expenses, and (if applicable in a particular period) certain costs not anticipated to occur in future periods (together, the “Adjustments”). The non-GAAP tax rate used to calculate Adjusted Net Income was approximately ~~23.6%~~(3.8)% and 18.5% for the three and six months ended ~~March 31,~~June 30, 2020, respectively, and ~~24.2%~~22.7% and 23.2% for the three and six months ended ~~March 31,~~June 30, 2019 respectively. The non-GAAP tax rates represent the GAAP tax rate for the period as adjusted by the estimated tax impact of the items adjusted from the measure. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding.

Adjusted Free Cash Flow

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

Constant Currency

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

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Reconciliation of Non-GAAP Financial Statements

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

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


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Net income attributable to controlling interests and available to common shareholders		$	5,755	$	4,319
Net (loss) income attributable to controlling interests and available to common shareholders						Net (loss) income attributable to controlling interests and available to common shareholders	$	(1,922)	$	10,471	$	3,833	$	14,790
Adjustments:	Adjustments:					Adjustments:
Interest expense, net	Interest expense, net	6,421		6,643		Interest expense, net	8,809		6,871		15,230		13,514
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	3,486		3,292		Amortization of deferred financing costs and note discount	4,399		3,330		7,885		6,622
Loss on extinguishment of convertible notes						Loss on extinguishment of convertible notes	3,018		—		3,018		—
Income tax (benefit) expense	Income tax (benefit) expense	(3,737)		3,129		Income tax (benefit) expense	(10,687)		3,565		(14,424)		6,694
Depreciation and accretion expense	Depreciation and accretion expense	32,211		32,973		Depreciation and accretion expense	32,072		33,205		64,283		66,178
Amortization of intangible assets	Amortization of intangible assets	8,413		12,412		Amortization of intangible assets	8,849		12,591		17,262		25,003
EBITDA	EBITDA	52,549		62,768		EBITDA	44,538		70,033		97,087		132,801

Add back:	Add back:					Add back:
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	921		968		Loss on disposal and impairment of assets	112		1,496		1,033		2,464
Other expenses (income) ⁽¹⁾		3,829		(7,207)
Other (income) expenses ⁽¹⁾						Other (income) expenses ⁽¹⁾	(6,364)		1,456		(2,535)		(5,751)
Noncontrolling interests ⁽²⁾	Noncontrolling interests ⁽²⁾	13		15		Noncontrolling interests ⁽²⁾	15		16		28		31
Share-based compensation expense	Share-based compensation expense	5,193		4,484		Share-based compensation expense	5,029		5,250		10,222		9,734
Restructuring expenses ⁽³⁾	Restructuring expenses ⁽³⁾	1,209		—		Restructuring expenses ⁽³⁾	3,340		3,463		4,549		3,463

Adjusted EBITDA	Adjusted EBITDA	63,714		61,028		Adjusted EBITDA	46,670		81,714		110,384		142,742
Less:	Less:					Less:
Depreciation and accretion expense ⁽⁴⁾	Depreciation and accretion expense ⁽⁴⁾	32,210		32,973		Depreciation and accretion expense ⁽⁴⁾	32,072		33,205		64,283		66,178

Interest expense, net	Interest expense, net	6,421		6,643		Interest expense, net	8,809		6,871		15,230		13,514
Adjusted pre-tax income	Adjusted pre-tax income	25,083		21,412		Adjusted pre-tax income	5,789		41,638		30,871		63,050
Income tax expense ⁽⁵⁾		5,920		5,181
Income tax (benefit) expense ⁽⁵⁾						Income tax (benefit) expense ⁽⁵⁾	(219)		9,452		5,700		14,634
Adjusted Net Income	Adjusted Net Income	$	19,163	$	16,231	Adjusted Net Income	$	6,008	$	32,186	$	25,171	$	48,416

Adjusted Net Income per share – basic	Adjusted Net Income per share – basic	$	0.43	$	0.35	Adjusted Net Income per share – basic	$	0.14	$	0.70	$	0.56	$	1.05
Adjusted Net Income per share – diluted		$	0.42	$	0.35
Adjusted Net Income per share – diluted ⁽⁶⁾						Adjusted Net Income per share – diluted ⁽⁶⁾	$	0.13	$	0.69	$	0.55	$	1.04

Weighted average shares outstanding – basic	Weighted average shares outstanding – basic	44,729,824		46,223,764		Weighted average shares outstanding – basic	44,465,183		46,180,161		44,597,504		46,201,842
Weighted average shares outstanding – diluted		45,741,261		46,635,033
Weighted average shares outstanding – diluted⁽⁶⁾						Weighted average shares outstanding – diluted⁽⁶⁾	45,080,873		46,601,488		45,441,787		46,620,147

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

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

(3)For the three and six months ended ~~March 31,~~June 30, 2020, our restructuring ~~activities~~expenses included costs incurred in conjunction with facility closures, workforce reductions ~~professional fees~~ and other related charges. For the three and six months ended June 30, 2019, our restructuring expenses included professional fees and costs incurred in conjunction with facility closures and workforce reductions.

(4)Amounts exclude a portion of the expenses incurred by one of the Company's Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders.

(5)For the three and six month periods ended ~~March 31,~~June 30, 2020 and 2019, the non-GAAP tax rates used to calculate Adjusted Net Income were ~~23.6%~~(3.8)% and ~~24.2%~~18.5%, respectively. ~~This represents~~For the three and six month periods ended June 30, 2019, the non-GAAP tax rates used to calculate Adjusted Net Income were 22.7% and 23.2%, respectively. The non-Gaap tax rates represent the Company’s GAAP tax ~~rate as~~rates adjusted for the net tax effects related to the items excluded from Adjusted Net Income.

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(6)During the three months ended June 30, 2020, the Company reported a positive Adjusted Net Income. The shares used to calculate Adjusted Net Income per diluted share, for the three months ended June 30, 2020, are different than the diluted shares used to calculate the GAAP net loss per diluted share. The Adjusted Net Income per diluted share is calculated using the weighted average diluted shares that would have been used to calculate the GAAP Net Income per dilutive share if a positive GAAP Net Income amount had been reported during the three months ended June 30, 2020.

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

(in thousands, excluding percentages)



Consolidated revenue:	Three Months Ended June 30,
	2020										2019		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	222,824	$	3,624	$	226,448	$	323,081	(31.0)	%	(29.9)	%
ATM product sales and other revenues	10,368		196		10,564		17,740		(41.6)		(40.5)
Total revenues	$	233,192	$	3,820	$	237,012	$	340,821	(31.6)	%	(30.5)	%


Consolidated revenue:		Three Months Ended March 31,
		2020										2019				% Change					Six Months Ended June 30,
		U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency			2020										2019		% Change
																					U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP	U.S. GAAP	Constant - Currency
ATM operating revenues	ATM operating revenues	$	291,854	$	3,570	$	295,424	$	302,602	(3.6)	%	(2.4)	%	ATM operating revenues	$	514,678	$	7,194	$	521,872	$	625,683	(17.7)	%	(16.6)	%
ATM product sales and other revenues	ATM product sales and other revenues	14,748		135		14,883		15,668		(5.9)		(5.0)		ATM product sales and other revenues	25,116		331		25,447		33,408		(24.8)		(23.8)
Total revenues	Total revenues	$	306,602	$	3,705	$	310,307	$	318,270	(3.7)	%	(2.5)	%	Total revenues	$	539,794	$	7,525	$	547,319	$	659,091	(18.1)	%	(17.0)	%



North America revenue:	Three Months Ended June 30,
	2020										2019		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	165,057	$	593	$	165,650	$	199,536	(17.3)	%	(17.0)	%
ATM product sales and other revenues	8,982		67		9,049		15,679		(42.7)		(42.3)
Total revenues	$	174,039	$	660	$	174,699	$	215,215	(19.1)	%	(18.8)	%


North America revenue:		Three Months Ended March 31,
		2020										2019				% Change					Six Months Ended June 30,
		U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency			2020										2019		% Change
																					U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP	U.S. GAAP	Constant - Currency
ATM operating revenues	ATM operating revenues	$	193,241	$	235	$	193,476	$	191,046	1.1	%	1.3	%	ATM operating revenues	$	358,298	$	828	359,126		$	390,582	(8.3)	%	(8.1)	%
ATM product sales and other revenues	ATM product sales and other revenues	12,756		59		12,815		13,202		(3.4)		(2.9)		ATM product sales and other revenues	21,738		125		21,863		28,881		(24.7)		(24.3)
Total revenues	Total revenues	$	205,997	$	294	$	206,291	$	204,248	0.9	%	1.0	%	Total revenues	$	380,036	$	953	$	380,989	$	419,463	(9.4)	%	(9.2)	%

Table of Contents



Europe & Africa revenue:	Three Months Ended June 30,
	2020										2019		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	47,088	$	2,288	$	49,376	$	101,501	(53.6)	%	(51.4)	%
ATM product sales and other revenues	1,304		123		1,427		1,969		(33.8)		(27.5)
Total revenues	$	48,392	$	2,411	$	50,803	$	103,470	(53.2)	%	(50.9)	%


	Six Months Ended June 30,
	2020										2019		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	127,046	$	4,033	$	131,079	$	190,179	(33.2)	%	(31.1)	%
ATM product sales and other revenues	3,246		197		3,443		4,216		(23.0)		(18.3)
Total revenues	$	130,292	$	4,230	$	134,522	$	194,395	(33.0)	%	(30.8)	%



Australia & New Zealand revenue:	Three Months Ended June 30,
	2020										2019		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	12,093	$	742	$	12,835	$	24,726	(51.1)	%	(48.1)	%
ATM product sales and other revenues	82		7		89		92		(10.9)		(3.3)
Total revenues	$	12,175	$	749	$	12,924	$	24,818	(50.9)	%	(47.9)	%


	Six Months Ended June 30,
	2020										2019		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	32,400	$	2,332	$	34,732	$	50,517	(35.9)	%	(31.2)	%
ATM product sales and other revenues	132		9		141		311		(57.6)		(54.7)
Total revenues	$	32,532	$	2,341	$	34,873	$	50,828	(36.0)	%	(31.4)	%

Table of Contents

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


	Three Months Ended June 30,
	2020										2019		% Change
	Non - GAAP ⁽¹⁾		Foreign Currency Impact		Constant - Currency		Non - GAAP ⁽¹⁾		Non - GAAP ⁽¹⁾		Constant - Currency

Adjusted EBITDA	$	46,670	$	639	$	47,309	$	81,714	(42.9)	%	(42.1)	%
Adjusted Net Income	$	6,008	$	(162)	$	5,846	$	32,186	(81.3)	%	(81.8)	%
Adjusted Net Income per share – diluted ⁽²⁾	$	0.13	$	—	$	0.13	$	0.69	(81.2)	%	(81.2)	%

Europe & Africa revenue: Three Months Ended March 31,
2020 2019 % Change
U.S.
GAAP Foreign Currency
Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 79,958 $ 1,745 $ 81,703 $ 88,678 (9.8) % (7.9) %
ATM product sales and other revenues 1,942 74 2,016 2,247 (13.6) (10.3)
Total revenues $ 81,900 $ 1,819 $ 83,719 $ 90,925 (9.9) % (7.9) %

Australia & New Zealand revenue: Three Months Ended March 31,
2020 2019 % Change
U.S.
GAAP Foreign Currency Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 20,307 $ 1,591 $ 21,898 $ 25,791 (21.3) % (15.1) %
ATM product sales and other revenues 50 2 52 219 (77.2) (76.3)
Total revenues $ 20,357 $ 1,593 $ 21,950 $ 26,010 (21.7) % (15.6) %

~~Table of Conte~~n t s

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


		Three Months Ended March 31,																							Six Months Ended June 30,
		2020										2019				% Change					2020						2019	% Change
		Non - GAAP ⁽¹⁾		Foreign Currency Impact		Constant - Currency		Non - GAAP ⁽¹⁾		Non - GAAP ⁽¹⁾		Constant - Currency			Non - GAAP ⁽¹⁾		Foreign Currency Impact		Constant - Currency		Non - GAAP ⁽¹⁾		Non - GAAP ⁽¹⁾		Constant - Currency

Adjusted EBITDA	Adjusted EBITDA	$	63,714	$	814	$	64,528	$	61,028	4.4	%	5.7	%	Adjusted EBITDA	$	110,384	$	1,453	$	111,837	$	142,742	(22.7)	%	(21.7)	%
Adjusted Net Income	Adjusted Net Income	$	19,163	$	249	$	19,412	$	16,231	18.1	%	19.6	%	Adjusted Net Income	$	25,171	$	138	$	25,309	$	48,416	(48.0)	%	(47.7)	%
Adjusted Net Income per share – diluted ⁽²⁾	Adjusted Net Income per share – diluted ⁽²⁾	$	0.42	$	—	$	0.42	$	0.35	20.0	%	20.0	%	Adjusted Net Income per share – diluted ⁽²⁾	$	0.55	$	0.01	$	0.56	$	1.04	(47.1)	%	(46.2)	%

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

(2) Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by the weighted average diluted shares outstanding of ~~45,741,261~~45,080,873 and ~~46,635,033~~46,601,488 for the three months ended ~~March 31,~~June 30, 2020 and 2019, respectively, and 45,441,787 and 46,620,147 for the six months ended June 30, 2020 and 2019, respectively. The shares used to calculate Adjusted Net Income per diluted share, for the three months ended June 30, 2020, are different than the diluted shares used to calculate the GAAP net loss per diluted share. The Adjusted Net Income per diluted share is calculated using the weighted average diluted shares that would have been used to calculate the GAAP Net Income per dilutive share if a positive GAAP Net Income amount had been reported during the three months ended June 30, 2020.

Table of Contents

Reconciliation of Adjusted Free Cash Flow


			Three Months Ended March 31,							Three Months Ended June 30,							Six Months Ended June 30,
			2020		2019			2020		2019			2020		2019
		(In thousands)										(In thousands)
Net cash provided by (used in) operating activities			$	1,120	$	(21,805)
Net cash provided by operating activities							Net cash provided by operating activities	$	88,731	$	77,035		$	89,851	$	55,230
Restricted cash settlement activity ⁽¹⁾	Restricted cash settlement activity ⁽¹⁾		39,871		71,521		Restricted cash settlement activity ⁽¹⁾	(39,126)		(1,167)			745		70,354
Adjusted net cash provided by operating activities	Adjusted net cash provided by operating activities		40,991		49,716		Adjusted net cash provided by operating activities	49,605		75,868			90,596		125,584
Net cash used in investing activities, excluding acquisitions ⁽²⁾	Net cash used in investing activities, excluding acquisitions ⁽²⁾		(18,429)		(29,307)		Net cash used in investing activities, excluding acquisitions ⁽²⁾	(11,375)		(25,746)			(29,804)		(55,053)
Adjusted free cash flow	Adjusted free cash flow		$	22,562	$	20,409	Adjusted free cash flow	$	38,230	$	50,122		$	60,792	$	70,531

(1)Restricted cash settlement activity represents the change in our restricted cash excluding the portion of the change that is attributable to foreign exchange and disclosed as part of the effect of exchange rate changes on cash, cash equivalents, and restricted cash in the ~~accompanying~~ Consolidated Statements of Cash Flows. Restricted cash primarily consists of amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers that are pledged for a particular use or restricted to support these ~~obligations.~~obligations These amounts can fluctuate significantly period to period based on the number of days for which settlement to the merchant has not yet occurred or day of the week on which a quarter ends..

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

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Liquidity and Capital Resources

Overview

As of ~~March 31,~~June 30, 2020, we had ~~$613.7~~$211.3 million in cash and cash equivalents and ~~$1,322.2~~$915.6 million of current and long-term ~~debt.~~debt ($893.1 million, net of $22.5 million of capitalized debt issuance costs and unamortized discounts). In addition, we currently have a $600 million of available capacity under our revolving credit facility, with currently no borrowings outstanding and approximately $9 million in outstanding letters of credit. Our 1.00% convertible senior notes ("Convertible Notes") that remain outstanding are due December 2020. These Convertible Notes ~~with~~have a face value of ~~$287.5~~$115.6 million ~~are due December 2020~~ and are presented, net of the unamortized discount and capitalized debt issuance costs of ~~$8.6~~$2.2 million, in the Current portion of long-term debt line of the Company's Consolidated Balance Sheet as of ~~March 31,~~June 30, 2020. We expect to use currently available cash and expected future cash flows to retire the Convertible Notes.

We have historically funded our business with cash flows from operations, borrowings under our revolving credit facility, and the issuance of debt and equity securities. We have generally used a portion of our cash flows to invest in additional ATMs, either through acquisitions or through organic growth. We have also used cash to pay interest and principal amounts outstanding under our borrowings. As we collect a sizable portion of our sales on a daily basis but generally pay our vendors on 30 day terms and are not required to pay certain of our merchants until 20 days after the end of each calendar month, we have historically utilized the excess available cash flow to reduce borrowings made under our revolving credit facility reported as long term debt and to fund capital expenditures. Accordingly, it is not uncommon for us to reflect a working capital deficit position in our Consolidated Balance Sheet.

~~To preserve~~We believe we have sufficient liquidity available from cash on hand, cash flow from operations and potential borrowings to fund our operations, and during our second quarter, we took measures to improve available liquidity ~~as previously announced, we suspended our share buy back program. In anticipation of~~and also extend the average maturity of our Convertible Notes due on December 1, 2020, as a precautionary measure given the economic uncertainty caused by the worldwide COVID-19 pandemic, in March 2020, we drew all of the borrowing capacity under our credit facility, resulting in our holding $613.7 million in cash as of March 31, 2020. In spite of recent decreases in transactions and revenues, along with expected further adverse impacts to our business caused by the pandemic, we believe we will be able to generate positive free cash flows (operating cash flows, adjusted for settlement activities, less capital expenditures) for the remainder of 2020. We believe that our cash on hand will be sufficient to meet our working capital requirements and contractual commitments for the next twelve months and we expect to fund our working capital needs with cash on hand and cash flows from our operations.borrowings. For additional information see Item 1. Financial Statements, Note 9. Long-Term Debt

Operating Activities

Net cash provided by operating activities totaled ~~$1.1~~$89.9 million during the ~~three~~six months ended ~~March 31,~~June 30, 2020 compared to net cash used in operating activities of ~~$21.8~~$55.2 million during the same period of 2019. Excluding changes in restricted cash liabilities during the periods due to the timing of settlements, our cash flows from operating activities were down ~~$8.7~~$35.0 million. This decrease in operating cash flow (excluding settlement changes) is primarily due to ~~payments in~~ the ~~ordinary course of business and timing of payments relative to the same period~~impact of the ~~prior year.~~Pandemic on our operations.

Investing Activities

Net cash used in investing activities totaled ~~$18.4~~$29.8 million during the ~~three~~six months ended ~~March 31,~~June 30, 2020 compared to net cash used in investing activities of ~~$29.3~~$64.2 million during the same period of 2019. The change in net cash used in investing activities during the ~~three~~six months ended ~~March 31,~~June 30, 2020 relative to the prior year was primarily a result of ~~lower~~reduced capital ~~expenditures~~spending in response to the ~~ordinary course of business.~~Pandemic.

Financing Activities

Net cash provided by financing activities totaled ~~$565.0~~$122.9 million during the ~~three~~six months ended ~~March 31,~~June 30, 2020 compared to cash used in financing activities of ~~$25.3~~$67.9 million during the same period of 2019. ~~As discussed above, during~~During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we borrowed ~~$587.1~~$500 million under our new term loan facility, paid $171.2 million to repurchase Convertible Notes that were subsequently canceled and entirely repaid our outstanding revolving credit ~~agreement~~facility balance which was $167.2 million as of December 31, 2019. We paid $18.2 million of debt issuance, modification and extinguishment costs in ~~anticipation~~conjunction with these activities during the six months ended June 30, 2020. These financing activities improved available liquidity, extended the average maturity of our debt and are planned to be used for the ~~maturity~~repayment of our Convertible Notes due on December 1, ~~2020 and for additional liquidity given the economic uncertainty caused by the worldwide COVID-19 pandemic.~~2020. During the ~~period,~~first quarter of 2020, we ~~also~~ used $16.9 million of cash to repurchase 505,699 Class A ordinary shares. We may from time to time seek to repurchase our outstanding debt and / or equity securities in privately negotiated transactions and / or otherwise. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds below for additional detail on the Class A ordinary shares purchased and remaining authorization under our repurchase program.

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

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Critical Accounting Policies

Our consolidated financial statements included in this Form 10-Q 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. For discussion of the critical accounting policies and estimates that are most important to the depiction of our financial condition and results of operations see Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates and Item 8. Financial Statements and Supplementary Data, Note 1. Basis of Presentation and Summary of Significant Accounting Policies within the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Goodwill Impairment

Following the goodwill impairment recognized by the Company in 2019, the Canada reporting unit continues to be at risk of failing a quantitative impairment test. In 2019, the Canada reporting unit’s carrying value was impaired and reduced to its fair value. The fair value of the Canada reporting unit continues to approximate its carrying value. Furthermore, as indicated in Part I. Item 1. Financial Statements – Note 7. Intangible Assets, we identified the impacts of the ~~COVID-19 pandemic~~Pandemic as an impairment indicator and performed an additional ~~quantitative~~qualitative impairment test of the Canada reporting unit as of ~~March 31,~~June 30, 2020. Based on this ~~quantitative test, the fair value~~qualitative assessment, there were no indicators of ~~the reporting unit marginally exceeded its carrying value, and no additional goodwill impairment was recognized.~~impairment. The Canada reporting unit's goodwill was approximately ~~$95.6~~$99 million as of ~~March 31,~~June 30, 2020. To the extent that we are unable to meet our forecasts in the future or to the extent that the impacts of the ~~COVID-19 pandemic~~Pandemic are protracted, further goodwill impairment charges are possible relative to the Company’s ~~Canad~~aCanada reporting unit. Additionally, based on ~~our~~recent qualitative ~~assessment,~~assessments, the fair value of the Company’s other reporting units ~~exceeded~~exceed their carrying ~~value;~~values; however, protracted impacts of the ~~COVID-19 pandemic~~Pandemic could result in goodwill impairment charges to those reporting units.

New Accounting Pronouncements

For information related to accounting pronouncements adopted and not yet adopted during 2020 see Item 1. Financial Statements, Note 2. New Accounting Pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following market risk disclosures should be read in conjunction with the quantitative and qualitative disclosures about market risk contained in our 2019 Form 10-K.

We are exposed to certain risks related to our ongoing business operations, including interest rate risk associated with our vault cash rental obligations and ~~to a lesser extent, borrowings under our revolving credit facility.~~variable rate debt. The following quantitative and qualitative information is provided about financial instruments to which we were a party at ~~March 31,~~June 30, 2020 and from which we may incur future gains or losses as a result of changes in market interest rates or foreign currency exchange rates. We do not enter into derivative or other financial instruments for speculative or trading purposes.

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

Interest Rate Risk

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

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

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

Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations

North America – Interest Rate Swap Contracts


Notional Amounts U.S. $	Notional Amounts U.S. $	Weighted Average Fixed Rate		Term	Notional Amounts U.S. $	Weighted Average Fixed Rate		Term
(In millions)	(In millions)				(In millions)
$	1,500	1.69	%	April 1, 2020 – December 31, 2020	1,500	1.69	%	July 1, 2020 – December 31, 2020
$	1,200	1.46	%	January 1, 2021 – December 31, 2021	1,200	1.46	%	January 1, 2021 – December 31, 2021
$	1,000	1.17	%	January 1, 2022 – December 31, 2022	1,000	1.17	%	January 1, 2022 – December 31, 2022
$	600	0.98	%	January 1, 2023 – December 31, 2024	600	0.98	%	January 1, 2023 – December 31, 2024

Notional Amounts CAD $

Weighted Average Fixed Rate

Term

Notional Amounts CAD $

Weighted Average
Fixed Rate

Term

(In millions)

125

2.46

April 1, 2020 – December 31, 2021

125

2.46

July 1, 2020 – December 31, 2021

North America - Interest Rate Cap Contracts


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

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

Europe & Africa – Interest Rate Swap Contracts


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

Australia & New Zealand – Interest Rate Swap Contracts


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

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Summary of Interest Rate Exposure on Average Outstanding Vault ~~Cash~~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 ~~March 31,~~June 30, 2020 and assuming a 100 basis point increase in interest rates (in millions):


North America
Average outstanding vault cash balance	$	~~1,901~~2,331
Interest rate swap contracts fixed notional amount	~~(1,393)~~(1,590)
Residual unhedged outstanding vault cash balance	$	~~508~~741

Additional annual interest incurred on 100 basis point increase	$	~~5.08~~7.41

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

The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense in Europe & ~~Africa~~Africa based on our average outstanding vault cash balance for the quarter ended ~~March 31,~~June 30, 2020 and assuming a 100 basis point increase in interest rates (in millions):


Europe & Africa
Average outstanding vault cash balance	$	~~1,041~~859
Interest rate swap contracts fixed notional amount	~~(640)~~(620)
Residual unhedged outstanding vault cash balance	$	~~401~~239

Additional annual interest incurred on 100 basis point increase	$	~~4.01~~2.39

The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense in Australia based on our average outstanding vault cash balance for the quarter ended ~~March 31,~~June 30, 2020 and assuming a 100 basis point increase in interest rates (in millions):


Australia
Average outstanding vault cash balance	$	~~262~~234
Interest rate swap contracts fixed notional amount	(92)
Residual unhedged outstanding vault cash balance	$	~~170~~142

Additional annual interest incurred on 100 basis point increase	$	~~1.70~~1.42

Interest Rate Derivatives and Outlook.As of ~~March 31,~~June 30, 2020, we had ~~an asset of $2.6 million and~~ a liability of ~~$58.5~~$63.0 million recorded in the ~~accompanying~~ Consolidated Balance Sheets, which represented the fair value ~~asset or liability, respectively,~~ of ~~the~~our interest rate swap and cap ~~and foreign currency forward contracts, as derivative instruments are required to be carried at fair value.~~contracts. The fair value estimate for these instruments was calculated as the present value of amounts estimated to be ~~received or~~ paid to a marketplace ~~participant in a selling transaction.~~participant. These derivative contracts are valued using pricing models based on significant other observable inputs (Level 2 inputs under the fair value hierarchy prescribed by U.S. GAAP). For each highly effective hedging relationship, the gain or loss on the derivative instrument is reported as a component of the Accumulated other comprehensive loss, net line in the ~~accompanying~~ Consolidated Balance Sheets. The gain or loss is reclassified into earnings in the Vault cash rental expense line in the ~~accompanying~~ Consolidated Statements of Operations in the same period or periods during which the hedged transaction affects earnings and has been forecasted into earnings.

~~Outlook.~~

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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

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

Interest expense. Our interest expense is also sensitive to changes in interest rates as borrowings under our revolving credit ~~facility~~and term loan facilities accrue interest at floating rates. ~~In September 2019, we entered into a second amended and restated credit agreement (the “Credit Agreement”) increasing the available borrowings under our revolving credit facility to $750 million.~~ As of ~~March 31,~~June 30, 2020, we had no outstanding borrowings under our revolving credit facility ~~which carries a~~and $500 million of outstanding borrowings under our floating rate term loan facility.

On July 30, 2020, we executed $250.0 million aggregate notional amount interest rate ~~were $746.6 million, the majority of which is denominated in U.S dollars~~cap contracts that begin August 3, 2020 and ~~U.K. pounds sterling. To mitigate the~~terminate December 31, 2025. These interest rate ~~risk~~cap contracts have a cap rate of 1% and have been designated as cash flow hedges of the floating rate interest associated with ~~these borrowings, we entered into interest rate swap contracts to effectively fix the interest rate on a portion of the expected outstanding borrowings in the U.K. For information related to~~ our ~~financing facilities, see~~term loan facility.See Item 1. Financial Statements, Note 9. Long-Term Debt.

~~Outstanding Interest Rate Derivatives Associated with Revolving Credit Facility Borrowings~~

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

Transition from LIBOR. We are currently evaluating the impact of the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates. Currently, we have ~~several~~several debt and derivative instruments that reference LIBOR-based rates. The transition from LIBOR is expected to take place insometime after 2021 and we will continue to assess the impact of this transition. For additional information related to the transition from LIBOR, see Part 1, Item 1A. ~~Risk~~Risk Factors - Changes in interest rates could increase our operating costs by increasing interest expense under our credit facilities and our vault cash rental costs - in our Annual Report on Form 10-K for the year ended December 31, 2019.

Foreign Currency Exchange Rate Risk

As a result of our operations in the U.K., Ireland, Australia, ~~Canada, Germany, South Africa, Mexico, Spain, Ireland,~~ and New Zealand, we are exposed to market risk from changes in foreign currency exchange rates. The functional currencies of our international subsidiaries are their respective local currencies. The results of operations of our international subsidiaries are translated into U.S. dollars using average foreign currency exchange rates in effect during the periods in which those results are recorded and the assets and liabilities are translated using the foreign currency exchange rate in effect as of each balance sheet reporting date. These resulting translation adjustments to assets and liabilities have been reported in Accumulated other comprehensive loss, net within the ~~accompanying~~ Consolidated Balance Sheets. As of ~~March 31,~~June 30, 2020, this accumulated translation loss totaled ~~$78.8~~$77.0 million compared to $59.0 million as of December 31, 2019.

Our consolidated financial results were impacted by changes in foreign currency exchange rates during the three and six months ended ~~March 31,~~June 30, 2020 compared to the prior year. Our total revenues during the three and six months ended ~~March 31,~~June 30, 2020 would have been higher by ~~approximately $3.7~~approximately $3.8 million and $7.5 million, respectively, had the foreign currency exchange rates from the three and six months ended ~~March 31,~~June 30, 2020 remained unchanged from the prior year. A sensitivity analysis indicates that, if the U.S. dollar uniformly strengthened or weakened 10% against the British pound, Euro, Mexican peso, Canadian dollar, Australian dollar, or South African ~~rand,~~Rand, the effect upon our operating income would have been approximately ~~$0.3~~$1.1 and $0.7 million for the three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively.

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

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

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Item 4. Controls and Procedures

Management’s Quarterly Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal

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executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2020 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

In the ordinary course of business, the Company reviews its internal control over financial reporting and makes changes to its control procedures, processes and systems that are intended to enhance such controls and increase efficiency while maintaining an effective internal control environment.

As a result of the Pandemic, a significant portion of our global workforce rapidly shifted to a primarily work from home environment beginning in March 2020. While our controls were not developed and designed specifically for a primarily work from home environment, we have evaluated and determined that these changes to our working environment did not have a material effect on the Company’s internal control over financial reporting during the most recent quarter.

In conjunction with the evaluation described above, there have been no changes in our system of internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~March 31,~~June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

You should carefully consider the risks discussed in Part I. Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”) and other information included and incorporated by reference in this report. These risks could materially affect our business, financial condition, or future results. There have been no material changes in our assessment of our risk factors from those set forth in our 2019 Form 10-K, except with respect to the risk factor described below.

We are subject to business cycles, seasonality, and other outside factors such as extreme weather, natural disasters or health emergencies, including the recent outbreak of the coronavirus (“COVID-19”) pandemic that has adversely impacted our business, and that may in the future have a material adverse impact on our business.

Many of our ATMs are located in convenience stores, gas stations, malls, casinos, grocery stores, drug stores, airports, train stations, and other large retailers and are utilized by consumers that frequent them. ~~As such, transaction~~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, 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, such as Coronavirus ("COVID-19" or the ~~COVID-19~~"Pandemic") could hinder travel, result in 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~~events or significant business interruptions could reduce or impair our ability, and that of our employees, to provide services and conduct ~~operations and this~~operations. These events may ~~occur~~occur in a manner that cannot be mitigated by our disaster and business continuity planning orand cause losses ~~which~~that are not recoverable under our insurance policies. The impact of such events may have a range of lingering impacts on us, our employees, customers, our suppliers and the overall economy, adversely affecting our operations, financial condition, results of operations, cash flows and share price even after the initial incident ~~resolves.~~is resolved.

On March 11, 2020, the World Health Organization declared ~~Coronavirus (or “COVID-19”)~~COVID-19 a global pandemic. In response, the national and local governments, in the countries in which we operate, have implemented various restrictions, including travel restrictions, border closings, restrictions on public gatherings, shelter-in-place restrictions, quarantines and limitations on business operations.

These events and the prevalence of the disease have adversely impacted the macroeconomic environment, consumer confidence, unemployment and other economic indicators that contribute to consumer spending behavior and demand for both cash in general and our services specifically, as well as the Company and its employees, customers and suppliers. These events have also reduced foot traffic at our ATM locations and the usage of our ATMs and cash across ~~the~~certain regions in which we operate, ~~resulting~~as well as, slowed the recycling pace of coinage which may impact cash usage in certain geographies. These factors have resulted in and may continue to result in fluctuations in our operating results, volatility in the price of our shares, reduction in transaction volumes and revenues associated with those volumes beginning atin March 2020 and continuing throughout the ~~end~~second quarter of ~~March~~ 2020. We expect that these impacts will continue through the ~~second~~third quarter of 2020, and may continue to ~~impact~~impact our results ~~in future periods during~~for the remainder of 2020 and beyond. We have implemented cost reductions and have taken action to manage expenses, reduce capital spending plans and have suspended our opportunistic share repurchase program to optimize cash flow during the current environment. We have also implemented business continuity plans, with most of our employees working from home since March 16, 2020 without issue. Certain of our employees continue to perform cash delivery, maintenance and other technical services on site and at certain of our office and warehouse locations to ensure the continued operations of our ~~ATMs, and we~~ATMs. We may take further actions as may be required by government authorities or as we determine are in

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the best interests of our employees, partners and customers. For more information, see “Management’s Discussion and Analysis of Financial Conditions and Results Operations.”

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The situation surrounding ~~COVID-19~~the Pandemic remains fluid and the potential for a material adverse impact on the Company’s results of operations, financial condition, and liquidity increases the longer the virus impacts activity levels globally. For this reason, the Company cannot reasonably estimate with any degree of certainty the future impact ~~COVID-19~~that the Pandemic may have on the Company’s results of operations, financial position, and liquidity. The extent to which the ~~COVID-19 pandemic~~Pandemic may impact the Company’s business, operating results, financial condition, or liquidity will depend on future developments, including the duration of the outbreak, travel restrictions, business and workforce disruptions, and the effectiveness of actions taken to contain and treat the disease. To the extent the ~~COVID-19 pandemic~~Pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019.

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

For the quarter ended June 30, 2020, our average outstanding vault cash balance was $3.4 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. The frequency of incidents of vandalism and physical removal often increase during civil unrest and riots. Recent protests, riots and civil unrest, specifically within large urban areas in the U.S. have coincided with increased incidents of vandalism and theft of ATMs and vault cash within our U.S. market. As our ATMs are often installed at retail sites, there are attempts of theft and vandalism from time to time. Thefts of vault cash may be the result of an individual acting alone or as a part of a crime group or occur during civil unrest and rioting. 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 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. 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.

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

~~The following table presents information with respect to our purchases of Class A ordinary shares during the three months ended March 31, 2020. All of the shares repurchased were canceled.~~

Period
Total number of shares purchased ⁽¹⁾
Average price paid per share Total number of shares purchased as part of publicly announced program Approximate dollar value of shares that may yet be purchased under the program
March 1, 2020 - March 31, 2020 505,699 $ 33.19 505,699 $ 33,215,850
Total 505,699 $ 33.19 505,699

⁽¹⁾On November 21, 2019, the Company announced a stock repurchase program, under which it was authorized to repurchase up to $50 million of its Class A ordinary shares through December 31, 2020. The Company repurchased 505,699 shares for approxima~~tely $16.8 million during the three months ended March 31, 2020.~~Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Table of Contents

Not applicable.

Item 5. Other Information

Not applicable.

6678

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Item 6. Exhibits


Exhibit Number		Description
10.1*10.1		Second Amendment to Second Amended and Restated Credit Agreement, dated as of May 29, 2020 (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form ~~equity award agreement (options)~~8-K, filed by Cardtronics plc on June 3, 2020, File No. 001-37820).
10.2*10.2		Annex A to Second Amendment to Second Amended and Restated Credit Agreement(incorporated herein by reference to Exhibit 10.1 of the Current Report on Form ~~equity award agreement (time based)~~8-K, filed by Cardtronics plc on June 3, 2020, File No. 001-37820).
10.3*	Third Amendment to Second Amended and Restated Credit Agreement, dated as of June 29, 2020.
10.4*	~~Form equity award agreement (performance based)~~Annex A to Third Amendment to Second Amended and Restated Credit Agreement.
10.5*	Term Loan Credit Agreement, dated June 29, 2020.
10.6*		~~Form equity award agreement (market based)~~
10.7*		~~Form equity award agreement (special)~~
10.8*		~~Form equity award agreement (non-employee director)~~Pari Passu Intercreditor Agreement date June 29, 2020.
31.1*		Certification of the Chief Executive Officer of Cardtronics plc pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Chief Financial Officer of Cardtronics plc pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Chief Executive Officer and Chief Financial Officer of Cardtronics plc pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
104		The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2020, formatted in Inline XBRL.
101.INS*		XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith.

** Furnished herewith.

Management contract or compensatory plan or arrangement.

6779

Table of ~~Conte~~n t sContents

SIGNATURES

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


						CARDTRONICS PLC

~~May 8,~~August 6, 2020						/s/ Gary W. Ferrera
						Gary W. Ferrera
						Chief Financial Officer
						(Duly Authorized Officer and
						Principal Financial Officer)

~~May 8,~~August 6, 2020						/s/ Paul A. Gullo
						Paul A. Gullo
						Chief Accounting Officer
						(Duly Authorized Officer and
						Principal Accounting Officer)

6880


	Foreign Currency Translation Adjustments			Unrealized (Losses) Gains on Interest Rate Swap and Foreign Currency Forward Contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of December 31, 2019	$	(59,143)	⁽¹⁾	$	(18,744)	⁽²⁾	$	(77,887)
Other comprehensive loss before reclassification	(19,620)		⁽³⁾	(42,504)		⁽⁴⁾	(62,124)
Amounts reclassified from accumulated other comprehensive loss, net	—			2,662		⁽⁴⁾	2,662
Net current period other comprehensive loss	(19,620)			(39,842)			(59,462)
Total accumulated other comprehensive loss, net as of March 31, 2020	$	(78,763)	⁽¹⁾	$	(58,586)	⁽²⁾	$	(137,349)


			Three Months Ended March 31
	Classification		2020		2019
		(In thousands)
Operating lease costs	Cost of ATM operating revenues ⁽¹⁾		$	5,973	$	7,390
Operating lease costs	Selling, general, and administrative expenses ⁽²⁾		1,299		1,783
Total operating lease cost			$	7,272	$	9,173


	Location and Amount of Loss Recognized in Income on Cash Flow Hedging Relationships in the Three Months Ended
	March 31, 2020						March 31, 2019
	(In thousands)
	Cost of ATM Operating Revenues		Interest Expense, net		Cost of ATM Operating Revenues
Total amount of expense presented in the statements of operations in which the effects of cash flow hedges are recorded	$	193,665	$	6,421	$	206,158

Amount of (loss) gain reclassified from accumulated other comprehensive income into income	(2,619)		(43)		338


Period	Total number of shares purchased ⁽¹⁾	Average price paid per share		Total number of shares purchased as part of publicly announced program	Approximate dollar value of shares that may yet be purchased under the program
March 1, 2020 - March 31, 2020	505,699	$	33.19	505,699	$	33,215,850
Total	505,699	$	33.19	505,699