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	~~September 30, 2020~~March 31, 2021

or

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

	For the transition period from to

Commission File Number: 001-37820

Cardtronics plc

(Exact name of registrant as specified in its charter)


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


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

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


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

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

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

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

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Shares outstanding as of ~~October 27, 2020: 44,479,262~~May 5, 2021: 45,265,702 Ordinary shares, nominal value $0.01 per share.

Table of Contents

CARDTRONICS PLC

TABLE OF CONTENTS

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

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CARDTRONICS PLC

CONSOLIDATED BALANCE SHEETS

(In thousands, excluding share and per share amounts)


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	263,490	$	30,115	Cash and cash equivalents	$	197,363	$	174,242
Accounts and notes receivable	Accounts and notes receivable	83,281		101,046		Accounts and notes receivable	94,775		96,902
Less: Allowance for credit losses	Less: Allowance for credit losses	(6,994)		(5,251)		Less: Allowance for credit losses	(7,005)		(7,035)
Accounts and notes receivable, net	Accounts and notes receivable, net	76,287		95,795		Accounts and notes receivable, net	87,770		89,867
Inventory, net	Inventory, net	6,450		10,618		Inventory, net	6,210		6,598
Restricted cash	Restricted cash	96,740		87,354		Restricted cash	141,859		137,353
Prepaid expenses, deferred costs, and other current assets	Prepaid expenses, deferred costs, and other current assets	72,869		84,639		Prepaid expenses, deferred costs, and other current assets	50,338		53,953
Total current assets	Total current assets	515,836		308,521		Total current assets	483,540		462,013
Property and equipment, net of accumulated depreciation of $594,832 and $525,933 as of September 30, 2020 and December 31, 2019, respectively		423,578		461,277
Property and equipment, net of accumulated depreciation of $657,069 and $637,835 as of March 31, 2021 and December 31, 2020, respectively						Property and equipment, net of accumulated depreciation of $657,069 and $637,835 as of March 31, 2021 and December 31, 2020, respectively	412,861		429,842
Operating lease assets	Operating lease assets	62,418		76,548		Operating lease assets	56,434		60,368
Intangible assets, net		88,036		113,925
Intangible assets, net of accumulated amortization of $460,841 and $454,533 as of March 31, 2021 and December 31, 2020, respectively						Intangible assets, net of accumulated amortization of $460,841 and $454,533 as of March 31, 2021 and December 31, 2020, respectively	75,250		84,629
Goodwill	Goodwill	739,179		752,592		Goodwill	760,811		759,102
Deferred tax assets, net	Deferred tax assets, net	17,420		13,159		Deferred tax assets, net	17,774		17,382
Prepaid expenses, deferred costs, and other noncurrent assets	Prepaid expenses, deferred costs, and other noncurrent assets	20,411		37,936		Prepaid expenses, deferred costs, and other noncurrent assets	23,188		18,109

Total assets	Total assets	$	1,866,878	$	1,763,958	Total assets	$	1,829,858	$	1,831,445

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	$	119,694	$	0	Current portion of long-term debt	$	5,000	$	5,000
Current portion of other long-term liabilities	Current portion of other long-term liabilities	63,620		53,144		Current portion of other long-term liabilities	51,744		64,799
Accounts payable	Accounts payable	40,867		46,478		Accounts payable	46,053		39,901
Accrued liabilities	Accrued liabilities	326,216		334,762		Accrued liabilities	373,015		366,285
Total current liabilities	Total current liabilities	550,397		434,384		Total current liabilities	475,812		475,985
Long-term liabilities:	Long-term liabilities:					Long-term liabilities:
Long-term debt	Long-term debt	773,857		739,475		Long-term debt	772,693		773,177
Asset retirement obligations	Asset retirement obligations	54,607		55,494		Asset retirement obligations	56,859		56,973
Deferred tax liabilities, net	Deferred tax liabilities, net	48,636		46,878		Deferred tax liabilities, net	55,471		51,484
Operating lease liabilities	Operating lease liabilities	58,782		69,531		Operating lease liabilities	53,681		56,683

Other long-term liabilities	Other long-term liabilities	46,264		37,870		Other long-term liabilities	21,886		37,727
Total liabilities	Total liabilities	1,532,543		1,383,632		Total liabilities	1,436,402		1,452,029

Commitments and contingencies (See Note 15)
Commitments and contingencies (See Note 13)						Commitments and contingencies (See Note 13)	0		0

Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Ordinary shares, $0.01 nominal value; 44,478,988 and 44,676,132 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		445		447
Ordinary shares, $0.01 nominal value; 45,255,680 and 44,539,433 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively						Ordinary shares, $0.01 nominal value; 45,255,680 and 44,539,433 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	453		445
Additional paid-in capital	Additional paid-in capital	338,045		332,109		Additional paid-in capital	333,596		343,042
Accumulated other comprehensive loss, net	Accumulated other comprehensive loss, net	(124,211)		(77,887)		Accumulated other comprehensive loss, net	(76,062)		(93,731)
Retained earnings	Retained earnings	120,116		125,763		Retained earnings	135,568		129,693
Total parent shareholders' equity	Total parent shareholders' equity	334,395		380,432		Total parent shareholders' equity	393,555		379,449
Noncontrolling interests	Noncontrolling interests	(60)		(106)		Noncontrolling interests	(99)		(33)
Total shareholders’ equity	Total shareholders’ equity	334,335		380,326		Total shareholders’ equity	393,456		379,416
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	1,866,878	$	1,763,958	Total liabilities and shareholders’ equity	$	1,829,858	$	1,831,445

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

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CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, excluding share and per share amounts)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Revenues:	Revenues:									Revenues:
ATM operating revenues	ATM operating revenues	$	267,320	$	333,384	$	781,998	$	959,067	ATM operating revenues	$	255,018	$	291,799
ATM product sales and other revenues	ATM product sales and other revenues	12,078		18,123		37,194		51,531		ATM product sales and other revenues	12,816		14,803
Total revenues	Total revenues	279,398		351,507		819,192		1,010,598		Total revenues	267,834		306,602
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))	165,265		208,860		510,014		623,099		Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below. See Note 1(c))	150,803		193,630
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	7,842		14,922		27,522		41,148		Cost of ATM product sales and other revenues	8,796		12,092
Total cost of revenues	Total cost of revenues	173,107		223,782		537,536		664,247		Total cost of revenues	159,599		205,722
Operating expenses:	Operating expenses:									Operating expenses:
Selling, general, and administrative expenses	Selling, general, and administrative expenses	40,373		46,257		115,609		131,912		Selling, general, and administrative expenses	42,909		42,378

Restructuring expenses	Restructuring expenses	2,008		3,583		6,557		7,046		Restructuring expenses	1,692		1,209

Acquisition related expenses										Acquisition related expenses	1,440		0

Depreciation and accretion expense	Depreciation and accretion expense	33,063		33,466		97,346		99,644		Depreciation and accretion expense	32,285		32,211
Amortization of intangible assets	Amortization of intangible assets	7,900		12,404		25,162		37,407		Amortization of intangible assets	6,086		8,413
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	814		637		1,847		3,101		Loss on disposal and impairment of assets	353		921
Total operating expenses	Total operating expenses	84,158		96,347		246,521		279,110		Total operating expenses	84,765		85,132
Income from operations	Income from operations	22,133		31,378		35,135		67,241		Income from operations	23,470		15,748
Other expenses (income):
Other expenses:										Other expenses:
Interest expense, net	Interest expense, net	11,132		6,751		26,362		20,265		Interest expense, net	10,761		6,421
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	2,341		3,377		10,226		9,999		Amortization of deferred financing costs and note discount	1,043		3,486
Loss on extinguishment of convertible notes		0		0		3,018		0
Other income		(7,116)		(3,703)		(9,651)		(9,454)

Other expenses, net										Other expenses, net	2,842		3,829
Total other expenses	Total other expenses	6,357		6,425		29,955		20,810		Total other expenses	14,646		13,736
Income before income taxes	Income before income taxes	15,776		24,953		5,180		46,431		Income before income taxes	8,824		2,012
Income tax expense (benefit)	Income tax expense (benefit)	10,049		4,086		(4,375)		10,780		Income tax expense (benefit)	2,951		(3,737)
Net income	Net income	5,727		20,867		9,555		35,651		Net income	5,873		5,749
Net (loss) income attributable to noncontrolling interests		(5)		3		(10)		(3)
Net loss attributable to noncontrolling interests										Net loss attributable to noncontrolling interests	(3)		(6)
Net income attributable to controlling interests and available to common shareholders	Net income attributable to controlling interests and available to common shareholders	$	5,732	$	20,864	$	9,565	$	35,654	Net income attributable to controlling interests and available to common shareholders	$	5,876	$	5,755

Net income per common share – basic	Net income per common share – basic	$	0.13	$	0.46	$	0.21	$	0.77	Net income per common share – basic	$	0.13	$	0.13
Net income per common share – diluted	Net income per common share – diluted	$	0.13	$	0.46	$	0.21	$	0.77	Net income per common share – diluted	$	0.13	$	0.13

Weighted average shares outstanding – basic	Weighted average shares outstanding – basic	44,506,874		45,058,226		44,557,103		46,040,027		Weighted average shares outstanding – basic	44,959,960		44,729,824
Weighted average shares outstanding – diluted	Weighted average shares outstanding – diluted	45,209,696		45,504,165		45,382,687		46,475,353		Weighted average shares outstanding – diluted	45,609,764		45,741,261

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

Table of Contents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Net income	Net income	$	5,727	$	20,867	$	9,555	$	35,651	Net income	$	5,873	$	5,749
Unrealized gain (loss) on interest rate derivative contracts, net of deferred income tax expense of $735 and benefit of $583 for the three months ended September 30, 2020 and 2019, respectively, and benefits of $12,292 and $7,860 for the nine months ended September 30, 2020 and 2019, respectively.		3,548		(2,798)		(39,534)		(29,107)
Foreign currency translation adjustments, net of deferred income tax expense of $943 and $0 for the three months ended September 30, 2020 and 2019, respectively, and expense (benefit) of $820 and $(242) for the nine months ended September 30, 2020 and 2019, respectively.		11,068		(6,998)		(6,790)		2,378
Unrealized gain (loss) on interest rate derivative contracts, net of deferred income tax expense of $4,610 and benefit of $12,103 for the three months ended March 31, 2021 and 2020, respectively										Unrealized gain (loss) on interest rate derivative contracts, net of deferred income tax expense of $4,610 and benefit of $12,103 for the three months ended March 31, 2021 and 2020, respectively	15,064		(39,842)
Foreign currency translation adjustments, net of deferred income tax expense of $238 and benefit of $561 for the three months ended March 31, 2021 and 2020, respectively										Foreign currency translation adjustments, net of deferred income tax expense of $238 and benefit of $561 for the three months ended March 31, 2021 and 2020, respectively	2,605		(19,620)
Other comprehensive income (loss)	Other comprehensive income (loss)	14,616		(9,796)		(46,324)		(26,729)		Other comprehensive income (loss)	17,669		(59,462)
Total comprehensive income (loss)	Total comprehensive income (loss)	20,343		11,071		(36,769)		8,922		Total comprehensive income (loss)	23,542		(53,713)
Less: Comprehensive income (loss) attributable to noncontrolling interests		10		2		46		(3)
Less: Comprehensive (loss) income attributable to noncontrolling interests										Less: Comprehensive (loss) income attributable to noncontrolling interests	(66)		35
Comprehensive income (loss) attributable to controlling interests	Comprehensive income (loss) attributable to controlling interests	$	20,333	$	11,069	$	(36,815)	$	8,925	Comprehensive income (loss) attributable to controlling interests	$	23,608	$	(53,748)

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

Table of Contents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)


		Three Months Ended September 30, 2020														Three Months Ended March 31, 2021
		Common Shares			Additional Paid-In Capital		Accumulated Other Comprehensive Loss, Net		Retained Earnings			Noncontrolling Interests						Common Shares			Additional Paid-In Capital		Accumulated Other Comprehensive Loss, Net		Retained Earnings			Noncontrolling Interests
		Shares	Amount								Total					Shares		Amount	Additional Paid-In Capital								Noncontrolling Interests
Balance as of June 30, 2020		44,477	$	445	$	332,157	$	(138,827)	$	114,384		$	(70)	$	308,089
Balance as of December 31, 2020																	Balance as of December 31, 2020	44,539			$	445	$	343,042	$	(93,731)		$	129,693			$	(33)	$	379,416

Issuance of common shares for share-based compensation, net of forfeitures	Issuance of common shares for share-based compensation, net of forfeitures	2	—		24		—		—			—		24			Issuance of common shares for share-based compensation, net of forfeitures	717	8		760		—		—			—		768
Share-based compensation expense	Share-based compensation expense	—	—		5,921		—		—			—		5,921			Share-based compensation expense	—	—		4,258		—		—			—		4,258
Tax payments related to share-based compensation	Tax payments related to share-based compensation	—	—		(43)		—		—			—		(43)			Tax payments related to share-based compensation	—	—		(14,464)		—		—			—		(14,464)

Settlement of note hedge and warrants associated with the convertible senior notes		—	—		(14)		—		—			—		(14)
Unrealized gain on interest rate derivative contracts, net of deferred income tax expense of $735		—	—		—		3,548		—			—		3,548

Unrealized gain on interest rate derivative contracts, net of deferred income tax expense of $4,610																	Unrealized gain on interest rate derivative contracts, net of deferred income tax expense of $4,610	—	—		—		15,064		—			—		15,064
Net income attributable to controlling interests	Net income attributable to controlling interests	—	—		—		—		5,732			—		5,732			Net income attributable to controlling interests	—	—		—		—		5,876			—		5,876
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	—	—		—		—		—			(5)		(5)			Net loss attributable to noncontrolling interests	—	—		—		—		—			(3)		(3)
Foreign currency translation adjustments, net of deferred income tax expense of $943		—	—		—		11,068		—			15		11,083
Balance as of September 30, 2020		44,479	$	445	$	338,045	$	(124,211)	$	120,116		$	(60)	$	334,335
Foreign currency translation adjustments, net of deferred income tax expense of $238																	Foreign currency translation adjustments, net of deferred income tax expense of $238	—	—		—		2,605		(1)			(63)		2,541
Balance as of March 31, 2021																	Balance as of March 31, 2021	45,256	$	453	$	333,596	$	(76,062)	$	135,568		$	(99)	$	393,456

Three Months Ended September 30, 2019
Common Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss, Net Retained Earnings Noncontrolling Interests
Shares Amount Total
Balance as of June 30, 2019 45,645 $ 456 $ 330,131 $ (83,810) $ 115,197 $ (101) $ 361,873
Issuance of common shares for share-based compensation, net of forfeitures 12 — — — — — 0
Share-based compensation expense — — 5,633 — — — 5,633
Tax payments related to share-based compensation — — (202) — — — (202)
Repurchase of common shares (1,054) (10) (7,222) — (22,920) — (30,152)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $583 — — — (2,798) — — (2,798)
Net income attributable to controlling interests — — — — 20,864 — 20,864
Net income attributable to noncontrolling interests — — — — — 3 3
Foreign currency translation adjustments, net of deferred income tax benefit of $0 — — — (6,998) — (2) (7,000)
Balance as of September 30, 2019 44,603 $ 446 $ 328,340 $ (93,606) $ 113,141 $ (100) $ 348,221

~~Table of~~ ~~Contents~~


	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

~~CARDTRONICS PLC~~

~~CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY~~

~~(In thousands)~~

~~(Unaudited)~~

Nine Months Ended September 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 309 3 312 — — — 315
Share-based compensation expense — 16,143 — — — 16,143
Tax payments related to share-based compensation — (5,792) — — — (5,792)
Repurchase of common shares (506) (5) (3,530) — (13,338) — (16,873)
Settlement of note hedge and warrants associated with the convertible senior notes — (1,197) — — — (1,197)
Unrealized loss on interest rate derivative contracts, net of deferred income tax benefit of $12,292 — — (39,534) — (39,534)
Net income attributable to controlling interests — — — 9,565 — 9,565
Net loss attributable to noncontrolling interests — — — — (10) (10)
Foreign currency translation adjustments, net of deferred income tax expense of $820 — — (6,790) (3) 56 (6,737)
Balance as of September 30, 2020 44,479 $ 445 $ 338,045 $ (124,211) $ 120,116 $ (60) $ 334,335

Nine Months Ended September 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) — 0
Issuance of common shares for share-based compensation, net of forfeitures 201 2 — — — — 2
Share-based compensation expense — — 15,367 — — — 15,367
Tax payments related to share-based compensation — — (2,224) — — — (2,224)
Repurchase of common shares (1,732) (17) (11,812) — (38,423) — (50,252)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $7,860 — — — (29,473) — — (29,473)
Net income attributable to controlling interests — — — — 35,654 — 35,654
Net loss attributable to noncontrolling interests — — — — — (3) (3)
Foreign currency translation adjustments, net of deferred income tax benefit of $242 — — — 2,378 — — 2,378
Balance as of September 30, 2019 44,603 $ 446 $ 328,340 $ (93,606) $ 113,141 $ (100) $ 348,221

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

Table of Contents

CARDTRONICS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Nine Months Ended September 30,					Three months ended March 31,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	9,555	$	35,651	Net income	$	5,873	$	5,749
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	122,508		137,051		Depreciation, accretion, and amortization of intangible assets	38,371		40,624
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	10,226		9,999		Amortization of deferred financing costs and note discount	1,043		3,486
Share-based compensation expense	Share-based compensation expense	16,143		15,367		Share-based compensation expense	4,258		5,193
Deferred income tax expense		10,333		1,089
Deferred income tax (benefit) expense						Deferred income tax (benefit) expense	(780)		9,602
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	1,847		3,101		Loss on disposal and impairment of assets	353		921
Other reserves and non-cash items	Other reserves and non-cash items	(2,412)		(8,565)		Other reserves and non-cash items	3,311		4,361

Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Decrease (increase) in accounts and notes receivable, net		16,181		(21,589)
Decrease in prepaid expenses, deferred costs, and other current assets		7,725		7,810
Increase in inventory, net		(86)		(4,035)
Decrease in accounts and notes receivable, net						Decrease in accounts and notes receivable, net	2,129		3,171
Decrease (increase) in prepaid expenses, deferred costs, and other current assets						Decrease (increase) in prepaid expenses, deferred costs, and other current assets	2,992		(11,645)
Decrease (increase) in inventory, net						Decrease (increase) in inventory, net	177		(1,454)
Decrease in other assets	Decrease in other assets	8,007		5,047		Decrease in other assets	2,946		3,866
(Decrease) increase in accounts payable		(5,258)		5,526
Increase in restricted cash liabilities		10,673		22,629
(Decrease) increase in accrued liabilities		(19,422)		31,827
Increase (decrease) in other liabilities		2,181		(9,216)
Increase (decrease) in accounts payable						Increase (decrease) in accounts payable	6,122		(8,813)
Increase (decrease) in restricted cash liabilities						Increase (decrease) in restricted cash liabilities	4,346		(39,871)
Increase (decrease) in accrued liabilities						Increase (decrease) in accrued liabilities	5,371		(11,209)
Decrease in other liabilities						Decrease in other liabilities	(7,160)		(2,861)
Net cash provided by operating activities	Net cash provided by operating activities	188,201		231,692		Net cash provided by operating activities	69,352		1,120

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	(61,094)		(90,319)		Additions to property and equipment	(16,246)		(18,429)
Acquisitions, net of cash acquired		0		(9,100)

Net cash used in investing activities	Net cash used in investing activities	(61,094)		(99,419)		Net cash used in investing activities	(16,246)		(18,429)

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	747,003		486,486		Proceeds from borrowings under revolving credit facility	0		731,862
Repayments of borrowings under revolving credit facility	Repayments of borrowings under revolving credit facility	(907,140)		(555,588)		Repayments of borrowings under revolving credit facility	0		(144,754)
Proceeds from issuance of term loan facility		500,000		0

Repayments of term loan facility	Repayments of term loan facility	(1,250)		0		Repayments of term loan facility	(1,250)		0
Debt issuance, modification, and redemption costs		(20,519)		(924)
Repurchase of convertible notes		(171,173)		0

Tax payments related to share-based compensation	Tax payments related to share-based compensation	(5,792)		(2,224)		Tax payments related to share-based compensation	(14,464)		(5,515)
Proceeds from exercises of stock options	Proceeds from exercises of stock options	293		2		Proceeds from exercises of stock options	760		293
Repurchase of common shares	Repurchase of common shares	(16,873)		(50,252)		Repurchase of common shares	0		(16,873)
Payment of contingent consideration	Payment of contingent consideration	(5,179)		0		Payment of contingent consideration	(9,193)		0
Net cash provided by (used in) financing activities		119,370		(122,500)
Other financing activities						Other financing activities	(36)		0
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(24,183)		565,013

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(3,716)		99		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(1,296)		(6,649)
Net increase in cash, cash equivalents, and restricted cash	Net increase in cash, cash equivalents, and restricted cash	242,761		9,872		Net increase in cash, cash equivalents, and restricted cash	27,627		541,055

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	311,595		117,469
Cash, cash equivalents, and restricted cash as of end of period	Cash, cash equivalents, and restricted cash as of end of period	$	360,230	$	205,282	Cash, cash equivalents, and restricted cash as of end of period	$	339,222	$	658,524

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	$	22,995	$	14,453	Cash paid for interest	$	6,628	$	1,992
Cash (refunded) paid for income taxes		$	(2,878)	$	5,251
Cash paid for income taxes, net						Cash paid for income taxes, net	$	5,881	$	2,666

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

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CARDTRONICS PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) General and Basis of Presentation

(a) General

Cardtronics plc, together with its wholly and majority-owned subsidiaries (collectively, the “Company” or “Cardtronics”), 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”). The Company is the world’s largest ATM owner/operator, providing services in North America, Europe and Africa, and Australia and New Zealand. The Company evaluates, oversees and manages the financial performance of the business through these 3 operating segments, further described in Note ~~17.~~15. Segment Information.

The Company’s revenues are generally recurring in nature and historically have been derived primarily from convenience transaction fees (or "surcharge"), 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 electronic funds transfer ("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 the Company's Allpoint network ("Allpoint"), the largest ~~retail based~~retail-based surcharge-free ATM network (based on the number of participating ATMs), (ii) fees for bank-branding ATMs and providing financial institution cardholders with surcharge-free access, (iii) revenues earned by providing managed services solutions and transaction processing services to retailers and financial institutions, (iv) fees earned from foreign currency exchange transactions at the ATM, known as dynamic currency conversion ("DCC"), and (v) revenues from the sale of ATMs, ATM-related equipment and other ancillary services.

On January 25, 2021, the Company entered into a definitive agreement to be acquired by NCR Corporation (“NCR”) for $39.00 per share in cash (the “NCR Transaction”). This followed the Company's delivery of a notice to terminate its previously announced definitive agreement with Catalyst Holdings Limited (“Catalyst”), an affiliate of Apollo Management, L.P., dated as of December 15, 2020, pursuant to which the Company would have been acquired by Catalyst for $35.00 per share in cash, in accordance with the terms of such agreement. The proposed transaction with NCR is subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals. Cardtronics shareholders approved the transaction on May 7, 2021. It is expected that, subject to the satisfaction or waiver of all relevant conditions, the proposed transaction will be completed in mid-year 2021. During the three months ended March 31, 2021, the Company incurred $1.4 million of costs related to the proposed acquisition of the Company, including legal and professional fees, and certain other administrative expenses presented in the Acquisition related expenses line on the Consolidated Statements of Operations.

(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 United States ("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~~2020 (the ~~“2019~~“2020 Form 10-K”), which includes a summary of the Company’s significant accounting policies and other disclosures.

All normal recurring adjustments necessary for a fair presentation of the Company’s interim and prior period results have been made. The results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 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.

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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 Consolidated Statements of Operations exclusive of depreciation, accretion, and amortization of intangible assets related to ATMs and ATM-related assets.

~~Table of~~ ~~Contents~~

The following table reconciles the amounts excluded from the Cost of ATM operating revenues line in the Consolidated Statements of Operations to total depreciation, accretion, and amortization of intangible assets included in the Consolidated Statement of Operations for the periods presented:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(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	$	25,626	$	24,899	$	72,406	$	74,890	Depreciation and accretion expenses related to ATMs and ATM-related assets	$	25,875	$	22,781
Amortization of intangible assets	Amortization of intangible assets	7,900		12,404		25,162		37,407		Amortization of intangible assets	6,086		8,413
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	33,526		37,303		97,568		112,297		Total depreciation, accretion, and amortization of intangible assets excluded from Cost of ATM operating revenues	31,961		31,194
Depreciation and accretion expense included in Selling, general, and administrative expenses	Depreciation and accretion expense included in Selling, general, and administrative expenses	7,437		8,567		24,940		24,754		Depreciation and accretion expense included in Selling, general, and administrative expenses	6,410		9,430
Total depreciation, accretion and amortization of intangible assets	Total depreciation, accretion and amortization of intangible assets	$	40,963	$	45,870	$	122,508	$	137,051	Total depreciation, accretion and amortization of intangible assets	$	38,371	$	40,624

(d) Restructuring Expenses

During the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, the Company continued certain corporate reorganization and cost reduction initiatives that began in ~~2019. In addition, the Company implemented additional cost reduction measures during the nine months ended September 30,~~ 2020, partly in response to the impacts of the COVID-19 pandemic (the "Pandemic"). In the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, the Company incurred ~~$2.0~~$1.7 million and ~~$6.6~~$1.2 million, respectively, of pre-tax expenses related to these activities that primarily included facility closures, workforce reductions and other related charges.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(In thousands)									(In thousands)
Europe & Africa	Europe & Africa	$	1,894	$	2,335	$	4,971	$	2,735	Europe & Africa	$	1,549	$	1,000
North America		0		799		1,205		1,012
Australia & New Zealand		114		0		114		0

Corporate	Corporate	0		449		267		3,299		Corporate	143		209
Total	Total	$	2,008	$	3,583	$	6,557	$	7,046	Total	$	1,692	$	1,209

The costs incurred in Europe & Africa for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ included facility related costs consisting of non-cash asset write-offs and accelerated lease expenses as well as amounts pertaining to workforce ~~reductions. The costs incurred~~reductions, primarily in ~~North America for~~ the nine months ended September 30, 2020 and the three and nine months ended September 30, 2019 primarily related to workforce reductions. The costs incurred in Australia & New Zealand for the three months ended September 30, 2020 primarily related to workforce reductions. U.K. The costs incurred in Corporate for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 included amounts pertaining to workforce reductions and the costs incurred in Corporate for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 primarily consisted of professional fees. The ~~restructuring~~restructuring liability balances as of ~~September 30,~~March 31, 2021 and 2020 ~~and 2019 were~~ wer~~$1.0~~e $1.6 million and ~~$0.7~~$0.6 million, re~~spectively.~~respectively. The restructuring liability balance as of December 31, ~~2019~~2020 was ~~$1.0 million.~~$2.2 million.

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(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.~~accounts and physical cash. Additionally, the Company maintains cash on deposit with banks that is pledged for a particular use or restricted to support a liability. ~~Current restricted~~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 Consolidated Balance Sheets. The changes in the settlement liabilities corresponding to the changes in the balance of restricted cash during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ are presented in the Consolidated Statements of Cash Flows within the 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 ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ corresponding with the balances in the Consolidated Statements of Cash Flows.


		September 30,					Three Months Ended March 31,
		2020		2019			2021		2020
		(In thousands)					(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	263,490	$	26,534	Cash and cash equivalents	$	197,363	$	613,728
Restricted cash	Restricted cash	96,740		178,748		Restricted cash	141,859		44,796
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	$	360,230	$	205,282	Total cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows	$	339,222	$	658,524

(f) Accounts and Notes ~~Receivable-Credit Losses~~Receivable, net

Accounts and notes receivable are comprised of amounts due from the Company’s clearing and settlement banks for transaction revenues earned on transactions processed during the month ending on the balance sheet date, as well as receivables from surcharge-free network customers, bank-branding and network-branding customers, managed services customers and for ATMs and ATM-related equipment sales and service. Trade accounts receivable are recorded at the invoiced amount and do not bear interest.

The allowance for credit losses represents the Company’s best estimate of the future expected credit losses on the Company's existing accounts and notes receivable. Accounting Standards Codification Topic 326 ("Topic 326") requires recognition of credit losses when expected based on a broad range of information, including historical experience and current economic conditions. The Company applies an aging based methodology using historic loss experience and aging categories. Where necessary, the Company segregates receivables into pools with common characteristics. In addition, where appropriate and where the available information indicates that losses would be minimal, an estimated loss rate is 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.

For the three months ended March 31, 2021 and 2020, the Company assessed the likelihood of collection of its receivables utilizing historical loss rates and current market conditions that included the estimated impact of the global COVID-19 pandemic. ~~Refer to~~ ~~Note 2. New Accounting Pronouncements~~ ~~for additional information on the development of the Company's estimate of expected credit losses.~~

The Company recorded ~~a (benefit)~~an insignificant provision for estimated credit losses ofd ~~$(0.5) million~~ uring the three months ending March 31, 2021 and ~~$0.4~~a provision of $0.9 million during the three months ending ~~September 30, 2020 and 2019, respectively, and a provision~~March 31, 2020.

Table of $0.8 million and $1.0 million during the nine months ending September 30, 2020 and 2019, respectively. As of September 30, 2020, approximately 79% of the Accounts and Notes Receivable balance was current and not yet due.Contents

(g) 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:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(In thousands)					(In thousands)
ATMs	ATMs	$	2,180	$	3,330	ATMs	$	1,563	$	1,837
ATM spare parts and supplies	ATM spare parts and supplies	5,360		7,673		ATM spare parts and supplies	6,320		6,525
Total inventory	Total inventory	7,540		11,003		Total inventory	7,883		8,362
Less: Inventory reserves	Less: Inventory reserves	(1,090)		(385)		Less: Inventory reserves	(1,673)		(1,764)
Inventory, net	Inventory, net	$	6,450	$	10,618	Inventory, net	$	6,210	$	6,598

(h) Warrants

Concurrent with the issuance of the 1.00% Convertible Senior Notes due 2020 (the "Convertible Notes") in November 2013, 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. The amounts allocated to both the note hedge and warrants were recorded in the Shareholders' equity section in the Consolidated Balance Sheets.

~~Table~~The note hedge terminated upon the maturity of ~~Contents~~the Convertible Notes in 2020. The 2.2 million warrants that remain outstanding as of March 31, 2021 have a strike price of $73.29 and expire incrementally on a series of expiration dates through August 30, 2021.

If the share price of the Company's stock remains below the strike price of the warrants, Cardtronics plc’s shareholders will not experience any dilution; 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.

(2) New Accounting Pronouncements

Adoption of New Accounting Pronouncements

~~Current Expected Credit Losses. On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~, and related amendments (collectively, "Topic 326"), via a cumulative-effect adjustment to opening retained earnings. Topic 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 Topic 326 had the following impact on the Company’s consolidated statement of financial position:

December 31, 2019 ASC 326 Adoption January 1, 2020
As Reported As Adjusted
(In thousands)
Accounts and notes receivable $ 101,046 $ 0 $ 101,046
Allowance for credit losses (5,251) (2,337) (7,588)
Accounts and notes receivable, net $ 95,795 $ (2,337) $ 93,458
Deferred tax asset, net $ 13,159 $ 466 $ 13,625
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~~. 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.

~~In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~, 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 the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR"). 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 adoption of this guidance has had no impact on the consolidated financial statements as the Company has not yet modified any of the existing contracts in response to the reference rate reform. The impact of this ASU will ultimately depend on the terms of any future contract modification related to a change in reference rate, including potential future modifications to the Company's debt facilities, vault cash agreements and cash flow hedges.

~~Accounting Pronouncements Issued But Not Yet Adopted~~

~~In August 2020, the FASB issued ASU 2020-06,~~ Debt - Debt with Conversion and Other Options (Subtopic 740-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating this guidance and has not yet concluded whether it will early adopt in 2021. At this time, this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)740): Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes,

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performing intra-period allocations and calculating income taxes in interim periods. The ASU also adds guidance intended to reduce complexity in certain areas, including recognizing deferred taxes for certain changes in the tax basis of 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 the~~adoption of this ASU did not have a material impact ~~of the new guidance~~ on the Company's financial statements.

In October 2020, FASB issued ASU 2020-10, Codification Improvements, which clarifies application of guidance to a wide variety of topics in the Accounting Standard Codification. The guidance also includes amendments to improve the codification by ensuring that all guidance that requires or provides an option for an entity to disclose information in the notes to the financial statements is codified in the disclosure section of the respective codification and to clarify guidance so that entities can apply guidance more consistently where the original guidance may have been unclear. The ASU is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The adoption of this ASU did not have a material impact on the Company's financial statements.

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In January 2021, the Financial Accounting Standards Board ("FASB") issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which serves to clarify the scope of Topic 848 to explicitly include derivative instruments both directly and indirectly impacted by the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR") (collectively, "reference rate reform") and to allow certain practical expedients to be applied to derivative instruments indirectly impacted by reference rate reform. 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 adoption of this guidance has had no impact on the consolidated financial statements as the Company has not yet modified any of the existing contracts in response to the reference rate reform. The impact of this ASU will ultimately depend on the terms of any future contract modifications related to a change in reference rate, including potential future modifications to the Company's debt facilities, vault cash agreements and cash flow hedges.

Accounting Pronouncements Issued But Not Yet Adopted

Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its consolidated financial statements.

(3) Revenue Recognition

Disaggregated Revenues

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


		Three Months Ended September 30, 2020											Three Months Ended March 31, 2021
		(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	$	69,120	$	27,188	$	14,720	$	0	$	111,028	Surcharge revenues	$	61,452	$	16,734	$	15,203	$	0	$	93,389
Interchange revenues	Interchange revenues	30,903		39,151		832		0		70,886		Interchange revenues	32,160		34,135		0		0		66,295
Bank-branding and surcharge-free network revenues	Bank-branding and surcharge-free network revenues	56,272		397		0		0		56,669		Bank-branding and surcharge-free network revenues	61,309		280		0		0		61,589
Managed services and processing revenues	Managed services and processing revenues	25,035		1,557		3,599		(1,454)		28,737		Managed services and processing revenues	28,038		1,686		4,509		(488)		33,745
Total ATM operating revenues	Total ATM operating revenues	181,330		68,293		19,151		(1,454)		267,320		Total ATM operating revenues	182,959		52,835		19,712		(488)		255,018

ATM product sales and other revenues	ATM product sales and other revenues	10,395		1,613		70		0		12,078		ATM product sales and other revenues	9,086		3,243		487		0		12,816
Total revenues	Total revenues	$	191,725	$	69,906	$	19,221	$	(1,454)	$	279,398	Total revenues	$	192,045	$	56,078	$	20,199	$	(488)	$	267,834

Three Months Ended September 30, 2019
(In thousands)
North America Europe & Africa Australia & New Zealand Eliminations Consolidated
Surcharge revenues $ 90,148 $ 48,652 $ 19,603 $ 0 $ 158,403
Interchange revenues 35,289 51,631 1,056 0 87,976
Bank-branding and surcharge-free network revenues 52,112 238 0 0 52,350
Managed services and processing revenues 31,046 2,280 3,730 (2,401) 34,655
Total ATM operating revenues 208,595 102,801 24,389 (2,401) 333,384
ATM product sales and other revenues 16,113 1,907 103 0 18,123
Total revenues $ 224,708 $ 104,708 $ 24,492 $ (2,401) $ 351,507



	Three Months Ended March 31, 2020
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	81,977	$	32,596	$	15,945	$	0	$	130,518
Interchange revenues	31,610		44,825		0		0		76,435
Bank-branding and surcharge-free network revenues	54,538		347		0		0		54,885
Managed services and processing revenues	25,116		2,190		4,307		(1,652)		29,961
Total ATM operating revenues	193,241		79,958		20,252		(1,652)		291,799

ATM product sales and other revenues	12,756		1,942		105		0		14,803
Total revenues	$	205,997	$	81,900	$	20,357	$	(1,652)	$	306,602

1312

Table of Contents

Nine Months Ended September 30, 2020
(In thousands)
North America Europe & Africa Australia & New Zealand Eliminations Consolidated
Surcharge revenues $ 212,359 $ 77,256 $ 39,008 $ 0 $ 328,623
Interchange revenues 90,298 112,514 2,299 0 205,111
Bank-branding and surcharge-free network revenues 162,514 1,102 0 0 163,616
Managed services and processing revenues 74,457 4,467 10,244 (4,520) 84,648
Total ATM operating revenues 539,628 195,339 51,551 (4,520) 781,998
ATM product sales and other revenues 32,133 4,859 202 0 37,194
Total revenues $ 571,761 $ 200,198 $ 51,753 $ (4,520) $ 819,192

As presented, c

Nine Months Ended September 30, 2019
(In thousands)
North America Europe & Africa Australia & New Zealand Eliminations Consolidated
Surcharge revenues $ 263,492 $ 124,124 $ 60,047 $ 0 $ 447,663
Interchange revenues 103,954 161,362 3,557 0 268,873
Bank-branding and surcharge-free network revenues 146,523 721 0 0 147,244
Managed services and processing revenues 85,208 6,773 11,302 (7,996) 95,287
Total ATM operating revenues 599,177 292,980 74,906 (7,996) 959,067
ATM product sales and other revenues 44,994 6,123 414 0 51,531
Total revenues $ 644,171 $ 299,103 $ 75,320 $ (7,996) $ 1,010,598

ertain prior year revenue amounts have been reclassified to ensure consistency with the current year presentation and management's current views concerning the classification of revenues related to managed services and processing arrangements. The reclassified amounts previously presented as Managed services and processing revenues were reclassified as Surcharge revenues and Bank-branding and surcharge-free network revenues, respectively, in the North America segment, and amounts previously presented as Interchange revenues were reclassified as Managed services and processing revenues in the Europe & Africa and Australia & New Zealand segments. The Company determined that these reclassifications are not material to the previously reported financial statements.

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

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 Consolidated Statements of Operations. ATM operating revenues are recognized (i) as the associated transactions are processed or (ii) on a monthly basis 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.~~

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 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.

The Company presents revenues from other product sales and services in the ATM product sales and other revenues line in the 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.~~customer. 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 VARs.

~~Table of~~ ~~Contents~~

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. See the ~~2019~~2020 Form 10-K for further information on the components of the Company's revenues.

Contract Balances

As of ~~September 30, 2020,~~March 31, 2021, the Company has recognized no significant contract assets. Contract liabilities totaled ~~$8.7~~$7.6 million and ~~$9.0~~$8.1 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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 nine~~ months ended ~~September 30,~~March 31, 2021 and 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 generally extending over the next 36 months.

~~Contract Acquisition Costs~~

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 $6.5 million and $7.5 million at September 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.

Table of Contents

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(In thousands)									(In thousands)
Cost of ATM operating revenues	Cost of ATM operating revenues	$	391	$	367	$	1,161	$	994	Cost of ATM operating revenues	$	258	$	545
Selling, general, and administrative expenses	Selling, general, and administrative expenses	5,530		5,266		14,982		14,373		Selling, general, and administrative expenses	4,000		4,648
Total share-based compensation expense	Total share-based compensation expense	$	5,921	$	5,633	$	16,143	$	15,367	Total share-based compensation expense	$	4,258	$	5,193

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, 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.

~~Table of~~ ~~Contents~~

Time-RSUs are convertible into the Company’s common shares upon passage of the annual graded vesting periods, which begin ~~1-2 years after~~on the date of 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 Performance-RSUs and Market-Based-RSUs are not considered to be earned and outstanding until the vesting conditions are met, the Company recognizes the related compensation expense over the requisite service period (or to an employee’s qualified retirement date, if earlier). 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 ~~September 30,~~March 31, 2021 and December 31, 2020, and changes during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, 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		742,352	$	29.44
Non-vested RSUs as of December 31, 2020					Non-vested RSUs as of December 31, 2020	1,075,359	$	25.41
Granted	Granted	919,605	23.58		Granted	408,336	29.17
Vested	Vested	(428,767)	29.55		Vested	(1,035,982)	24.65
Forfeited	Forfeited	(58,948)	28.08		Forfeited	(3,282)	29.19
Non-vested RSUs as of September 30, 2020		1,174,242	$	24.88
Non-vested RSUs as of March 31, 2021					Non-vested RSUs as of March 31, 2021	444,431	$	30.61

The above table only includes earned RSUs. Performance-RSUs and Market-Based-RSUs that are not yet earned are not included. The number of unearned ~~Market-Based-RSUs~~Performance-RSUs granted at the target threshold in ~~2018,~~2021, net of actual forfeitures, was ~~134,989~~58,013 units with a ~~weighted average~~ grant date fair value of ~~$24.13.~~$38.79 per unit. The number of unearned Market-Based-RSUs granted in 2021, net of actual forfeitures, was 58,007 units with a grant date fair value of $38.79 per unit. The number of unearned Performance-RSUs granted ~~at target~~ in ~~2019,~~2020, net of actual forfeitures, was ~~110,023~~204,374 units with a ~~weighted average~~ grant date fair value of ~~$33.70~~$23.45 per unit. The number of unearned Market-Based-RSUs granted at the target in 2020, net of actual forfeitures, was 187,809 units with a grant date fair value of $30.48 per unit. The number of unearned Performance-RSUs granted at the target in ~~2020,~~2019, net of actual forfeitures, was ~~206,587~~108,498 units with a ~~weighted average~~ grant date fair value of ~~$21.76~~$33.68 per unit. The number of unearned Market-Based-RSUs granted in 2019, net of actual forfeitures, was ~~109,946~~108,424 units with a ~~weighted average~~ grant date fair value of ~~$49.12~~$49.06 per unit. ~~The number of unearned Market-Based-RSUs granted in 2020, net of forfeitures, was 190,020 units with a weighted average grant date fair value of $30.54.~~ Time-RSUs are included in the listing of earned and outstanding RSUs when granted.

As of ~~September 30, 2020,~~March 31, 2021, the unrecognized compensation expense associated with earned RSUs was ~~$11.1~~$12.2 million, which will be recognized using a graded vesting schedule for Performance-RSUs and a straight-line vesting schedule for Time-RSUs, over a remaining weighted average vesting period of ~~approximately 1.93~~2.07 years.

Table of Contents

Options. The number of the Company’s outstanding stock options as of ~~September 30,~~March 31, 2021 and December 31, 2020, and changes during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, are presented below:


		Number of Shares	Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price
Options outstanding as of December 31, 2019		380,180	$	26.01
Options outstanding as of December 31, 2020						Options outstanding as of December 31, 2020	584,465		$	23.96
Granted	Granted	233,888	20.92			Granted	0		0
Exercised	Exercised	(13,020)	22.31			Exercised	(91,299)		24.76
Forfeited	Forfeited	(9,626)	31.99			Forfeited	0		0
Options outstanding as of September 30, 2020		591,422	$	23.98
Options outstanding as of March 31, 2021						Options outstanding as of March 31, 2021	493,166		$	23.81

Options vested and exercisable as of September 30, 2020		196,185	$	24.61
Options vested and exercisable as of March 31, 2021						Options vested and exercisable as of March 31, 2021	292,744		$	24.12

As of ~~September 30, 2020,~~March 31, 2021, the unrecognized compensation expense associated with outstanding options was approximately ~~$2.7~~$1.8 million, which will be recognized over the remaining weighted average vesting period of approximately ~~1.86~~1.52 years. The weighted average contractual term associated with outstanding options was ~~8.42~~8.07 years as of ~~September 30, 2020.~~March 31, 2021.

~~Table of~~ ~~Contents~~

(5) Earnings Per Share

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

Potentially dilutive securities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 include outstanding stock options, RSUs, and the potentially dilutive effect of outstanding warrants. Potentially dilutive securities for the three months ended March 31, 2020 include outstanding stock options, RSUs, and the potentially dilutive effect of outstanding warrants and ~~the~~shares underlying ~~shares exercisable under~~ the ~~Company’s~~ 1.00% Convertible Senior Notes ~~due 2020.~~ and the associated note hedges. The potentially dilutive effect of outstanding warrants, ~~and~~ the underlying shares exercisable under the Convertible Notes, and the note hedges were excluded from diluted shares outstanding for the three months ended March 31, 2021 and 2020, as applicable, as the exercise price exceeded the average market price of the Company’s common ~~shares. The effect of the note hedge as described~~shares in ~~Note 9. Current and Long-Term Debt, was also excluded as the effect is anti-dilutive.~~both periods presented.

The details of the Company's Earnings per Share calculation are as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,

		2020		2019		2020		2019			2021		2020
		(in thousands, excluding share and per share amounts)									(in thousands, excluding share and per share amounts)
Net income available to common shareholders	Net income available to common shareholders	$	5,732	$	20,864	$	9,565	$	35,654	Net income available to common shareholders	$	5,876	$	5,755
Weighted average common basic shares outstanding (for basic calculation)	Weighted average common basic shares outstanding (for basic calculation)	44,506,874		45,058,226		44,557,103		46,040,027		Weighted average common basic shares outstanding (for basic calculation)	44,959,960		44,729,824
Dilutive effect of outstanding common stock options and RSUs	Dilutive effect of outstanding common stock options and RSUs	702,822		445,939		825,584		435,326		Dilutive effect of outstanding common stock options and RSUs	649,804		1,011,437
Weighted average common dilutive shares outstanding (for diluted calculation)	Weighted average common dilutive shares outstanding (for diluted calculation)	45,209,696		45,504,165		45,382,687		46,475,353		Weighted average common dilutive shares outstanding (for diluted calculation)	45,609,764		45,741,261

Net income per common share - basic	Net income per common share - basic	$	0.13	$	0.46	$	0.21	$	0.77	Net income per common share - basic	$	0.13	$	0.13
Net income per common share - diluted	Net income per common share - diluted	$	0.13	$	0.46	$	0.21	$	0.77	Net income per common share - diluted	$	0.13	$	0.13

The computations of diluted earnings per share for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 exclude approximately ~~900,000~~18,000 and ~~390,000~~200,000 potentially dilutive common shares, respectively, due to the effect of including these shares in the computation would have been antidilutive. ~~In addition, the computations of diluted earnings per share for the three and nine months ended September 30, 2020 exclude approximately 175,000 and 40,000 weighted average dilutive shares, respectively, that are contingently issuable, consisting of market-based and performance based awards for which all necessary conditions had not been satisfied.~~

1715

Table of Contents

(6) Shareholders' Equity

~~Share Repurchases.On March 26, 2019,~~ ~~the Company announced that its Board of Directors ("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.~~ 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 Pandemic related business update. The buyback program remains suspended as of September 30, 2020.~~

~~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 nine months ended September 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 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 nine~~ months ended ~~September 30, 2020:~~March 31, 2021:

Foreign Currency Translation Adjustments Unrealized Losses on Interest Rate Derivative Contracts Total
(In thousands)
Total accumulated other comprehensive loss, net as of June 30, 2020 $ (77,001) (1) $ (61,826) (2) $ (138,827)
Other comprehensive income (loss) before reclassification 11,068 (3) (5,072) (4) 5,996
Amounts reclassified from accumulated other comprehensive loss, net 0 8,620 (4) 8,620
Net current period other comprehensive income 11,068 3,548 14,616
Total accumulated other comprehensive loss, net as of September 30, 2020 $ (65,933) (1) $ (58,278) (2) $ (124,211)



	Foreign Currency Translation Adjustments			Unrealized Losses on Interest Rate Derivative Contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of December 31, 2020	$	(41,572)	(1)	$	(52,159)	(2)	$	(93,731)
Other comprehensive income before reclassification	2,605		(3)	6,162		(4)	8,767
Amounts reclassified from accumulated other comprehensive loss, net	0			8,902		(4)	8,902
Net current period other comprehensive income	2,605			15,064			17,669
Total accumulated other comprehensive loss, net as of March 31, 2021	$	(38,967)	(1)	$	(37,095)	(2)	$	(76,062)

(1)Net of deferred income tax benefit of ~~$4,654~~$2,845 and ~~$5,597~~$3,083 as of ~~September 30, 2020~~March 31, 2021 and ~~June 30,~~December 31, 2020, respectively.

(2)Net of deferred income tax expense of ~~$1,981~~$8,433 and ~~$1,246~~$3,823 as of ~~September 30, 2020~~March 31, 2021 and ~~June 30,~~December 31, 2020, respectively.

(3)Net of deferred income tax expense of ~~$943.~~$238.

(4)Net of deferred income tax expense of ~~$272~~$1,886 and ~~$463~~$2,724 for Other comprehensive income (loss) before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, for the three months ended ~~September 30, 2020.~~March 31, 2021. For additional information, see Note ~~13.~~11. Derivative Financial Instruments.

Foreign Currency Translation Adjustments Unrealized Losses on Interest Rate Derivative 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 (6,790) (3) (58,139) (4) (64,929)
Amounts reclassified from accumulated other comprehensive loss, net 0

18,605 (4) 18,605
Net current period other comprehensive loss (6,790) (39,534) (46,324)
Total accumulated other comprehensive loss, net as of September 30, 2020 $ (65,933) (1) $ (58,278) (2) $ (124,211)

~~Table of~~ ~~Contents~~

~~(1)Net of deferred income tax benefit of $4,654 and $5,474 as of September 30, 2020 and December 31, 2019, respectively.~~

~~(2)Net of deferred income tax expense of $1,981 and $14,273 as of September 30, 2020 and December 31, 2019, respectively.~~

~~(3)Net of deferred income tax expense of $820.~~

~~(4)~~Net of deferred income tax benefit of $9,312 and $2,980 for Other comprehensive income before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, for the nine months ended September 30, 2020. For additional information, see ~~Note 13. Derivative Financial Instruments~~.

The Company records unrealized gains and losses related to its interest rate derivative contracts, net of taxes, in the Accumulated other comprehensive loss, net line within the Consolidated Balance Sheets. The amounts reclassified from Accumulated other comprehensive loss, net are recognized in the Cost of ATM operating revenues, Interest expense, net, or Other ~~income~~expenses, net lines in the 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 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 Consolidated Balance Sheets and into continuing operations as a tax expense when the Company ceases to hold any interest rate swap contracts. As of ~~September 30, 2020,~~March 31, 2021, the disproportionate tax effect iswas $14.7 million.

(7) Intangible Assets

Goodwill

The Company tests goodwill for impairment annually as of its fiscal year end, or more frequently if events or circumstances indicate goodwill could be impaired. During the three months ended March 31, 2020, in response to the global economic impact of the COVID-19 pandemic, the Company performed a qualitative assessment and determined that it was not more likely than not that the carrying value of its U.S., United Kingdom ("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, which was partially impaired as of December 31, 2019, the Company bypassed the optional qualitative assessment and performed a quantitative assessment as of March 31, 2020. For this quantitative assessment, the Company prepared a revised cash flow forecast that incorporated the estimated Pandemic impact, assumptions on operating efficiencies and resulting cash flows over time at a discount rate of 9.7%. Based on this quantitative test, the fair value of the Canada reporting unit marginally exceeded its carrying value and no additional goodwill impairment was recognized.

The Company did not identify any impairment indicators associated with its reporting units during the three months ended ~~September 30, 2020. The Canada reporting unit's goodwill was approximately~~ ~~$101 million~~ ~~at September 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.~~March 31, 2021.

The following table presents the net carrying amounts of the Company’s goodwill as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, as well as the changes in the net carrying amounts for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, by segment. As of ~~September~~March 31 ~~30, 2020,~~, 2021, the Company held ~~no significant~~an immaterial amount of indefinite-lived intangible assets. For additional information related to the Company’s segments, see Note ~~17.~~15. 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 (2,778) (10,842) 207 (13,413)
Goodwill, gross as of September 30, 2020 558,735 226,150 151,638 936,523
Accumulated impairment loss (7,303) (50,003) (140,038) (197,344)
Goodwill, net as of September 30, 2020 $ 551,432 $ 176,147 $ 11,600 $ 739,179

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~~Intangible Assets with Definite Lives~~

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

September 30, 2020 December 31, 2019
Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
(In thousands)
Merchant and bank-branding contracts/relationships $ 488,725 $ (410,685) $ 78,040 $ 489,363 $ (388,598) $ 100,765
Trade names 16,315 (13,190) 3,125 18,391 (12,792) 5,599
Technology 11,895 (8,615) 3,280 12,389 (7,952) 4,437
Non-compete agreements 4,335 (4,335) 0 4,408 (4,408) 0
Revolving credit facility deferred financing costs 5,820 (2,229) 3,591 5,256 (2,132) 3,124
Total intangible assets with definite lives $ 527,090 $ (439,054) $ 88,036 $ 529,807 $ (415,882) $ 113,925


	North America		Europe & Africa		Australia & New Zealand		Total
	(In thousands)
Goodwill, gross as of December 31, 2020	$	563,734	$	240,151	$	152,561	$	956,446
Accumulated impairment loss	(7,303)		(50,003)		(140,038)		(197,344)
Goodwill, net as of December 31, 2020	556,431		190,148		12,523		759,102

Foreign currency translation adjustments	1,252		621		(164)		1,709

Goodwill, gross as of March 31, 2021	564,986		240,772		152,397		958,155
Accumulated impairment loss	(7,303)		(50,003)		(140,038)		(197,344)
Goodwill, net as of March 31, 2021	$	557,683	$	190,769	$	12,359	$	760,811

During the nine months ended September 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:


		September 30, 2020		December 31, 2019			March 31, 2021			December 31, 2020
		(In thousands)					(In thousands)
Accrued merchant settlement	Accrued merchant settlement	$	168,017	$	154,181	Accrued merchant settlement	$	220,484	$	$	213,067
Accrued merchant fees	Accrued merchant fees	26,565		33,037		Accrued merchant fees	28,503			24,869
Accrued processing costs						Accrued processing costs	15,103			11,676
Accrued taxes	Accrued taxes	21,684		36,067		Accrued taxes	15,744			22,217
Accrued cash-in-transit						Accrued cash-in-transit	11,031			8,549
Accrued interest						Accrued interest	9,172			5,537
Accrued compensation						Accrued compensation	9,156			17,849
Accrued cash management fees						Accrued cash management fees	8,647			7,742
Accrued maintenance						Accrued maintenance	8,552			6,513
Accrued purchases	Accrued purchases	14,585		7,138		Accrued purchases	6,446			8,084
Accrued processing costs		11,831		12,159
Accrued compensation		10,926		23,676
Accrued armored		10,713		8,307
Accrued maintenance		9,061		6,463
Accrued interest		7,497		3,775
Accrued cash management fees		5,595		9,291
Accrued telecommunications costs	Accrued telecommunications costs	1,477		1,664		Accrued telecommunications costs	1,377			2,011

Other accrued expenses	Other accrued expenses	38,265		39,004		Other accrued expenses	38,800			38,171
Total accrued liabilities	Total accrued liabilities	$	326,216	$	334,762	Total accrued liabilities	$	373,015		$	366,285

~~Table of~~ ~~Contents~~

(9) Current and Long-Term Debt

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


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(In thousands)					(In thousands)
Revolving credit facility due September 2024, including swingline credit facility	Revolving credit facility due September 2024, including swingline credit facility	$	0	$	167,227	Revolving credit facility due September 2024, including swingline credit facility	$	0	$	0
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	481,827		0		Term loan facility due June 2027, net of unamortized discount and capitalized debt issuance costs	480,339		480,985
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	297,030		296,545		5.50% Senior notes due May 2025, net of unamortized capitalized debt issuance costs	297,354		297,192
1.00% Convertible senior notes due December 2020, net of unamortized discount and capitalized debt issuance costs		114,694		275,703
Total Debt	Total Debt	893,551		739,475		Total Debt	777,693		778,177
Less: Current portion	Less: Current portion	(119,694)		0		Less: Current portion	(5,000)		(5,000)
Total Long-Term Debt	Total Long-Term Debt	$	773,857	$	739,475	Total Long-Term Debt	$	772,693	$	773,177

Table of Contents

The Term Loan Facility (or "Term Loan") due June 2027 with a face value of $~~498.7~~496.3 million and $497.5 million as of March 31, 2021 and December 31, 2020, respectively, is presented net of unamortized discount and capitalized debt issuance costs of $~~16.9~~16.0 million and $16.5 million as of ~~September 30, 2020.~~March 31, 2021 and December 31, 2020, respectively. 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~~Sheets as of ~~September 30,~~March 31, 2021 and December 31, 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 costs of ~~$3.0~~$2.6 million and ~~$3.5~~$2.8 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The 1.00% Convertible senior notes due December 2020 (the "Convertible Notes") with a face value of $115.6 million and $287.5 million as of September 30, 2020 and December 31, 2019, respectively, are presented net of unamortized discounts and capitalized debt issuance costs of ~~$0.9 million~~ and $11.8 million as of September 30, 2020 and December 31, 2019, respectively. The Convertible Notes are presented in the Current portion of long-term debt line of the Company's Consolidated Balance Sheet as of September 30, 2020.

Revolving Credit Facility

~~On May 29, 2020, the~~The Company ~~entered into~~is party to a ~~second amendment to its second amended and restated~~$600 million revolving credit agreement with a maturity date of September 19, 2024 (the ~~"Second Amendment"~~"Amended Credit Agreement"). Given the unprecedented conditions across all of the markets in which the Company operates, due to the impact of the Pandemic and as a precautionary measure, the Company sought this amendment to provide financial covenant relief should transactions and corresponding revenues not recover or further weaken from more recent results. With this amendment, theThe covenant levels for the Total Net Leverage Ratio (as defined in the ~~Second Amendment) were revised to~~ second amendment entered into on May 29, 2020 and discussed further below) provide for a Restricted Period, which will end on the earlier of (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"). ~~Under the Second Amendment, in consideration for the financial covenant relief, the interest~~Interest rates for borrowings and the issuance of letters of credit and 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 commitment fee rates when the Total Net Leverage Ratio exceeds 4.00 to 1.0 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 effect.~~

On June 29, 2020, the Company entered into a third amendment to its second amended and restated credit agreement (as amended, the "Amended Credit Agreement"), in conjunction with the 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 modified various terms, conditions and covenants. As modified by the Second Amendment, most changes during the ~~period of financial covenant relief remain in place.~~ Restricted Period.~~The Amended Credit Agreement matures on September 19, 2024.~~

Due to the 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 are classified within Intangible assets, net and presented within ~~Note 7. Intangible Assets~~.

~~Table of~~ ~~Contents~~

Each of the Guarantors, as defined in the Amended Credit Agreement, has guaranteed the full and punctual payment of the obligations under the revolving credit facility and the obligations under the revolving credit facility are secured by substantially all of the assets of the credit facility Guarantors.

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, 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 quarter ending 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)~~(ii) for the fiscal quarter ending June 30, 2021, the Total Net Leverage Ratio shall not exceed 5.25 to 1.0; and ~~(v)~~(iii) 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.

The Amended Credit Agreement requires certain mandatory prepayments if (i) other than as a result of fluctuations in currency exchange rates, revolving credit exposures exceed the total commitments or, solely as a result of fluctuations in currency exchange rates, the revolving credit exposures exceed 105% of the total commitments and (ii) during the Restricted Period, Unencumbered Balance Sheet Cash (as defined in the Amended Credit Agreement) exceeds $100 million for 5 consecutive business days.

~~Additionally, the~~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 Restricted Period the Company may generally make such restricted payments so long as no event of default exists at the time of such payment and would not result therefrom and the Total Net Leverage Ratio is equal to or less than 3.75 to 1.00 at the time such restricted payment is made. As of ~~September 30, 2020~~March 31, 2021, the Company was in compliance with all applicable covenants and ratios under the 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) limitations on the ability of the Company and certain ~~covenants relating~~of its subsidiaries to, among other things, ~~the sale~~sell or transfer of assets, ~~fundamental changes,~~merge into or consolidate with any third-party or liquidate or dissolve, incurrence or guarantee of indebtedness, create liens, make investments, pay dividends or other distributions on or redeem or repurchase shares, make payments on subordinated indebtedness, enter into certain restrictive agreements or hedging transactions, engage in transactions with affiliates, ~~and~~enter into sale and leaseback ~~transactions.~~transactions, amend their organizational documents, amend certain terms of existing indebtedness and change their fiscal year-end.

Each of the Guarantors (as defined in the Amended Credit Agreement) has guaranteed the full and punctual payment of the obligations under the revolving credit facility and the obligations under the revolving credit facility are secured by substantially all of the assets of the credit facility Guarantors, subject to permitted liens and other customary exceptions. Deferred financing costs associated with the Amended Credit Agreement are classified within the Prepaid expenses, deferred costs, and other noncurrent assets line on the Consolidated Balance Sheets.

As of ~~September 30, 2020,~~March 31, 2021, the Company had 0 outstanding borrowings under its $600 million revolving credit ~~facility. The Company had $8.7~~facility and $10.0 million outstanding instandby letters of credit asunder the facility.

Table of ~~September 30, 2020.~~Contents

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 the Term Loan, the Company borrowed $500 million of aggregate ~~principal. Upon closing, the Company~~principal and used a portion of the net proceeds to repay outstanding borrowings under its revolving credit ~~facility.~~facility and retire the 1.00% Convertible Senior Notes due December 2020. 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 requires installment principal repayments equal to 1% of the initial aggregate principal per annum, paid quarterly, with the outstanding balance due on the maturity date. ~~Certain~~The Term Loan Agreement requires certain other mandatory prepayments, including mandatory prepayments based on (i) a specified percentage of Excess Cash Flow (as defined in the Term Loan ~~Credit~~ Agreement) on an annual basis, ~~are required~~ commencing ~~following the end of~~with the fiscal year ending December 31, ~~2021.~~2021, (ii) the net proceeds of certain asset sales and/or insurance/condemnation events above a threshold amount, subject to reinvestment rights and other exceptions and (iii) the net proceeds of any issuance or incurrence of debt that is not permitted by the Term Loan Agreement, subject to certain exceptions. 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~~Each of the Guarantors of the Term Loan (as defined in the Term Loan ~~Credit~~ Agreement) have guaranteed the full and punctual payment of the obligations under the Term Loan Agreement and the obligations under the Term Loan Agreement are secured by substantially all of the assets of such ~~guarantors.~~Guarantors, subject to permitted liens and other customary exceptions.

The Term Loan 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) limitations on the ability of the Company and certain ~~covenants relating~~of its subsidiaries to, among other things, ~~the sale~~sell or transfer of assets, ~~fundamental changes, incurrence~~merge into or consolidate with any third-party or liquidate or dissolve, incur or guarantee of indebtedness, create liens, make investments, pay dividends or other distributions on or redeem or repurchase shares, make payments on subordinated indebtedness, enter into certain restrictive agreements or hedging transactions, engage in transactions with affiliates, enter into sale and leaseback transactions, amend their organizational documents, amend certain terms of existing indebtedness, and ~~payment capacity. The Term Loan does not have any financial covenants.~~

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change their fiscal year-end.

$300.0 million 5.50% Senior Notes Due 2025

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

Interest on the 2025 Notes accrues at the rate of 5.50% per annum and is payable semi-annually in cash in arrears on May 1st and November 1st of each 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 future secured debt to the extent of the collateral securing such debt, including all borrowings under the Company’s revolving credit 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.

Obligations under the 2025 Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Cardtronics plc and certain of its subsidiaries and certain of its future subsidiaries, with the exception of Cardtronics plc’s immaterial subsidiaries and CFC Guarantors (as defined in the indenture to the 2025 Notes). 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.

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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 September 30, 2020, of $115.6 million, is con~~vertible into approximately~~ ~~2.2 million shares.~~ ~~The conversion rate, however, is subject to adjustment under certain circumstances. The remaining Convertible Notes became convertible on September 1, 2020.~~

Upon conversion, holders of the Convertible Notes are entitled to receive a combination of cash and shares, subject to the trading price per share and calculations outlined in the indenture under which the Convertible Notes have been issued. 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.

~~Table of~~ ~~Contents~~

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

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
(In thousands)
Cash interest per contractual coupon rate $ 288 $ 719 $ 1,693 $ 2,157
Amortization of note discount 1,214 2,854 7,112 8,450
Amortization of debt issuance costs 97 216 558 633
Total interest expense related to Convertible Notes $ 1,599 $ 3,789 $ 9,363 $ 11,240

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

September 30, 2020 December 31, 2019
(In thousands)
Principal balance $ 115,568 $ 287,500
Unamortized discount and capitalized debt issuance costs (874) (11,797)
Net carrying amount of Convertible Notes $ 114,694 $ 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 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 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

~~Table of~~ ~~Contents~~

~~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.~~

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





~~Asset retirement obligations at December 31, 2019~~	$	~~61,194~~
~~Additional obligations~~	~~2,825~~
~~Accretion expense~~	~~1,204~~

~~Payments~~	~~(4,196)~~
~~Foreign currency translation adjustments~~	~~(755)~~
~~Asset retirement obligations at September 30, 2020~~	~~60,272~~
~~Less: current portion of asset retirement obligations (see~~ ~~Note 12. Other Liabilities~~)	~~(5,665)~~
~~Asset retirement obligations, excluding current portion, at September 30, 2020~~	$	~~54,607~~

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

~~(11) Leases~~

~~The Company leases facilities consisting of office and warehouse space as well as vehicles and office equipment. The Company's facility leases have various remaining terms extending over 10 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 3 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 Accounting Standards Codification ("ASC") 842,~~ ~~Leases~~. 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. These placement agreements may also require variable merchant commissions based on the type and volume of transactions conducted at the ATMs at 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, in response to changes in interchange fees or interest rates. Certain Company facility leases require variable payments based on an index or 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 September 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 September 30, 2020 December 31, 2019
Assets (In thousands)
Operating lease assets Operating lease assets $ 62,418 $ 76,548
Total operating lease assets $ 62,418 $ 76,548
Liabilities
Current
Operating lease liabilities Current portion of other long-term liabilities $ 18,374 $ 20,345
Noncurrent
Noncurrent operating lease liabilities Noncurrent operating lease liabilities 58,782 69,531
Total operating lease liabilities $ 77,156 $ 89,876

~~Operating lease costs during the three and nine months ended September 30, 2020 and 2019 were as follows:~~

Three Months Ended Nine Months Ended
Classification September 30, 2020 September 30, 2020
(In thousands)
Operating lease costs
Cost of ATM operating revenues (1)
$ 6,247 $ 17,353
Operating lease costs
Selling, general, and administrative expenses (2)
1,228 3,775
Total operating lease cost $ 7,475 $ 21,128

~~(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 were approximately ~~$0.6 million and $1.8 million~~ ~~in the three and nine months ended September 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.

Three Months Ended Nine Months Ended
Classification September 30, 2019 September 30, 2019
(In thousands)
Operating lease costs
Cost of ATM operating revenues (1)
$ 7,197 $ 21,473
Operating lease costs
Selling, general, and administrative expenses (2)
1,361 4,275
Total operating lease cost $ 8,558 $ 25,748

~~(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 were approximately ~~$0.7 million~~ ~~and $2.9 million in the three and nine months ended September 30, 2019, respectively.~~

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~~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 September 30, 2020 December 31, 2019
Weighted-average remaining lease term (years)
Operating leases 7.3 6.9
Weighted-average discount rate
Operating leases 3.70% 3.47%

~~Additional lease information is summarized below:~~

Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019
(In thousands)
Operating cash outflows resulting from payments of operating lease liabilities
$ 14,344 $ 15,237
New operating lease assets recognized during the period 7,520 12,929

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

Maturity of Recognized Operating Lease Liabilities
Operating
Lease Payments(1)
(In thousands)
Remainder of 2020 $ 7,507
2021 19,825
2022 12,687
2023 9,911
2024 8,156
After 2024 32,599
Total lease payments 90,685
Less: Interest (2)
(13,529)
Present value of operating lease liabilities (3)
$ 77,156

~~(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 $18.4 million~~ ~~and noncurrent operating lease liabilities of $58.8 million.~~

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~~(12)~~ Other Liabilities

The Company’s other liabilities consisted of the following:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(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	$	24,737	$	15,565	Interest rate swap and cap contracts	$	22,211	$	23,916
Operating lease liabilities	Operating lease liabilities	18,374		20,345		Operating lease liabilities	17,607		18,683

Acquisition related contingent consideration	Acquisition related contingent consideration	6,818		4,963		Acquisition related contingent consideration	0		9,490
Asset retirement obligations (see Note 10. Asset Retirement Obligations)		5,665		5,701
Asset retirement obligations						Asset retirement obligations	6,502		6,517
Deferred revenue	Deferred revenue	5,061		3,386		Deferred revenue	4,182		4,295
Other	Other	2,965		3,184		Other	1,242		1,898
Total current portion of other long-term liabilities	Total current portion of other long-term liabilities	$	63,620	$	53,144	Total current portion of other long-term liabilities	$	51,744	$	64,799

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	$	33,973	$	9,723	Interest rate swap and cap contracts	$	12,935	$	26,994
Deferred revenue	Deferred revenue	3,605		5,589		Deferred revenue	3,447		3,850
Acquisition related contingent consideration		0		11,888

Other	Other	8,686		10,670		Other	5,504		6,883
Total noncurrent portion of other long-term liabilities	Total noncurrent portion of other long-term liabilities	$	46,264	$	37,870	Total noncurrent portion of other long-term liabilities	$	21,886	$	37,727

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

~~(13)~~(11) 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 its ~~variable rate~~floating-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. ~~Intermittently, the~~The Company ~~has~~ also ~~used~~uses interest rate swap or cap contracts to mitigate its exposure to floating interest rates on its ~~variable rate~~floating-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 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 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 revenues line and on the interest payments on floating-rate debt recognized in the Interest expense, net line in the Consolidated ~~Statement~~Statements of Operations has been reduced.

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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.

~~Table of~~ ~~Contents~~

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 and therefore typically qualify as and are designated 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, anticipated Amended Credit Agreement borrowings or other ~~variable rate~~floating-rate debt borrowings. Therefore, the amount of ineffectiveness associated with the Interest Rate Derivatives has historically been immaterial. If the Company concludes 1)(i) that the obligations that have been hedged are no longer probable or 2)(ii) 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 Interest Rate Derivative instruments prior to their expiration dates.

The Company recognizes its Interest Rate Derivative contracts as assets or liabilities at fair value and the accumulated changes in the fair values of the related Interest Rate Derivative contracts are reported net of taxes in Accumulated other comprehensive loss, net within the 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.~~12. 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 Consolidated Balance Sheets and reclassifies the gain or loss into earnings within the Cost of ATM operating revenues, Interest expense, net, or Other ~~income~~expenses, net lines of the 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.

None of 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 remaining terms associated with the interest rate swap contracts and cap agreements that are currently in place in the U.S., Canada, the U.K, and Australia as of ~~September 30, 2020~~March 31, 2021 are as follows:

~~Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations~~

~~North America – Interest Rate Swap Contracts~~

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

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

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~~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


Remaining Term of Hedging Instrument	Segment	Currency	Weighted Average Fixed Rate/Cap Rate (1)		Notional Value in Respective Currency
					(In millions)
Interest Rate Swap Contract - Vault Cash
April 1, 2021 – December 31, 2021	North America	U.S. Dollar	1.46	%	$	1,200
January 1, 2022 – December 31, 2022	North America	U.S. Dollar	1.17	%	$	1,000
January 1, 2023 – December 31, 2024	North America	U.S. Dollar	0.98	%	$	600
April 1, 2021 – December 31, 2021	North America	Canadian Dollar	2.46	%	$	125
April 1, 2021 – December 31, 2022	Europe & Africa	Pound Sterling	0.94	%	$	500
April 1, 2021 – December 31, 2021	Australia & New Zealand	Australian Dollar	0.71	%	$	40
Interest Rate Cap Contracts - Vault Cash
April 1, 2021 – December 31, 2023	North America	U.S. Dollar	3.25	%	$	200
Interest Rate Cap Contracts - Variable Debt
April 1, 2021 – December 31, 2025	North America	U.S. Dollar	1.00	%	$	250

(1)~~Maximum~~Cap rate represents the maximum amount of interest to be paid each year as per terms of the cap. The cost of the cap ~~will be~~related to vault cash is amortized through vault cash rental expense over the term of the ~~cap.~~

~~Europe & Africa – Interest Rate Swap Contracts~~

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

~~Australia & New Zealand – Interest Rate Swap Contracts~~

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

~~Interest Rate Derivatives Associated with Variable Rate Debt~~

~~North America – Interest Rate Cap Contracts~~

Notional Amounts
U.S. $
Cap Rate (1)
Term
(In millions)
$ 250 1.00% October 1, 2020 – December 31, 2025

~~(1)~~ ~~Maximum amount of interest to be paid each year as per terms of~~cap while the ~~cap. The~~ cost of the cap ~~will be~~related to floating-rate debt is amortized through interest expense over the term of the cap.

On July 30, 2020, the Company executed $250.0 million aggregate notional amount interest rate cap contracts that began August 1, 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. See ~~Note 9. Current and Long-Term Debt.~~

~~Table of~~ ~~Contents~~

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

The following tables depict the effects of the use of the Company’s Interest Rate Derivatives on the Consolidated Balance Sheets and Consolidated Statements of Operations:

Balance Sheet Data


Asset (Liability) Derivative Instruments	Asset (Liability) Derivative Instruments	Balance Sheet Location	Fair Value				Asset (Liability) Derivative Instruments	Balance Sheet Location	Fair Value
			September 30, 2020		December 31, 2019				March 31, 2021		December 31, 2020
			(In thousands)						(In thousands)
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:						Derivatives designated as hedging instruments:
Interest rate swap and cap contracts		Prepaid expenses, deferred costs, and other current assets	$	0	$	1,872

Interest rate swap and cap contracts	Interest rate swap and cap contracts	Prepaid expenses, deferred costs, and other noncurrent assets	0		8,766		Interest rate swap and cap contracts	Prepaid expenses, deferred costs, and other noncurrent assets	$	3,897	$	0
Interest rate swap and cap contracts	Interest rate swap and cap contracts	Current portion of other long-term liabilities	(24,737)		(7,697)		Interest rate swap and cap contracts	Current portion of other long-term liabilities	(22,211)		(23,916)
Interest rate swap and cap contracts	Interest rate swap and cap contracts	Other long-term liabilities	(33,973)		(9,723)		Interest rate swap and cap contracts	Other long-term liabilities	(12,935)		(26,994)
Total derivatives designated as hedging instruments, net	Total derivatives designated as hedging instruments, net		$	(58,710)	$	(6,782)	Total derivatives designated as hedging instruments, net		$	(31,249)	$	(50,910)

Derivatives not designated as hedging instruments:

Foreign currency forward contracts		Current portion of other long-term liabilities	0		(7,868)

Total derivative instruments, net	Total derivative instruments, net		$	(58,710)	$	(14,650)	Total derivative instruments, net		$	(31,249)	$	(50,910)

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Statements of Operations Data

Three Months Ended September 30
Derivatives in Cash Flow Hedging Relationship Amount of Loss Recognized in
Accumulated Other Comprehensive Loss on
Derivative Instruments Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income Amount of Loss Reclassified from
Accumulated Other Comprehensive Loss
into Income
2020 2019 2020 2019
(In thousands) (In thousands)
Interest rate swap and cap contracts $ (5,072) $ (3,406) Cost of ATM operating revenues $ (8,620) $ (668)
Interest rate swap and cap contracts 0 (119) Interest expense, net 0 (59)
Total $ (5,072) $ (3,525) $ (8,620) $ (727)


		Nine Months Ended September 30										Three Months Ended March 31,
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 Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income				Derivatives in Cash Flow Hedging Relationship	Amount of Gain (Loss) on Derivative Instruments Recognized in Accumulated Other Comprehensive Loss, net				Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Loss Reclassified from Accumulated Other Comprehensive Loss, net into Income
		2020		2019			2020		2019			2021		2020			2021		2020
		(In thousands)					(In thousands)					(In thousands)					(In thousands)
Interest rate swap and cap contracts	Interest rate swap and cap contracts	$	(57,929)	$	(28,989)	Cost of ATM operating revenues	$	(18,562)	$	(210)	Interest rate swap and cap contracts	$	6,530	$	(42,294)	Cost of ATM operating revenues	$	(8,809)	$	(2,619)
Interest rate swap and cap contracts	Interest rate swap and cap contracts	(210)		(500)		Interest expense, net	(43)		(172)		Interest rate swap and cap contracts	(368)		(210)		Interest expense, net	(93)		(43)
Total	Total	$	(58,139)	$	(29,489)		$	(18,605)	$	(382)	Total	$	6,162	$	(42,504)		$	(8,902)	$	(2,662)

As of ~~September 30, 2020,~~March 31, 2021, the Company expects to reclassify ~~$24.7~~$22.2 million of net derivative-related losses contained in the Accumulated comprehensive loss, net line within its Consolidated Balance Sheets into earnings during the next twelve months concurrent with the recording of the related vault cash rental expense and Term Loan interest expense amounts.

The following tables show the impact of the Company's cash flow hedge accounting relationships on the Consolidated Statement of Operations for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.


		Location and Amount of Loss Recognized in Income on Cash Flow Hedging Relationships in the Three Months Ended									Location and Amount of Loss Recognized in Income on Cash Flow Hedging Relationships in the Three Months Ended
		September 30, 2020				September 30, 2019					March 31, 2021				March 31, 2020
		(In thousands)									(In thousands)
		Cost of ATM Operating Revenues		Interest Expense, net		Cost of ATM Operating Revenues		Interest Expense, net			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	Total amount of expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	165,265	$	11,132	$	208,860	$	6,751	Total amount of expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	150,803	$	10,761	$	193,630	$	6,421

Amount of loss reclassified from Accumulated other comprehensive loss into expense		$	8,620	$	0	668		59
Amount of loss reclassified from Accumulated other comprehensive loss, net into expense										Amount of loss reclassified from Accumulated other comprehensive loss, net into expense	$	8,809	$	93	$	2619	$	43

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Location and Amount of Loss Recognized in Income on Cash Flow Hedging Relationships in the Nine Months Ended
September 30, 2020 September 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 $ 510,014 $ 26,362 $ 623,099 $ 20,265
Amount of loss reclassified from Accumulated other comprehensive loss into expense $ 18,562 43 210 172

~~(14)~~(12) Fair Value Measurements

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 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 September 30, 2020									Fair Value Measurements at March 31, 2021
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
		(In thousands)									(In thousands)

Assets										Assets
Assets associated with interest rate swap and cap contracts										Assets associated with interest rate swap and cap contracts	$	3,897	$	0	$	3,897	$	0
Liabilities	Liabilities									Liabilities
Liabilities associated with interest rate swap and cap contracts	Liabilities associated with interest rate swap and cap contracts	$	(58,710)	$	0	$	(58,710)	$	0	Liabilities associated with interest rate swap and cap contracts	$	(35,146)	$	0	$	(35,146)	$	0
Liabilities associated with acquisition related contingent consideration		$	(6,818)	$	0	$	0	$	(6,818)


		Fair Value Measurements at December 31, 2019									Fair Value Measurements at December 31, 2020
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
		(In thousands)									(In thousands)
Assets
Assets associated with interest rate swap and cap contracts		$	10,638	$	0	$	10,638	$	0

Liabilities	Liabilities									Liabilities
Liabilities associated with interest rate swap and cap contracts	Liabilities associated with interest rate swap and cap contracts	$	(17,420)	$	0	$	(17,420)	$	0	Liabilities associated with interest rate swap and cap contracts	$	(50,910)	$	0	$	(50,910)	$	0
Liabilities associated with acquisition related contingent consideration	Liabilities associated with acquisition related contingent consideration	$	(16,851)	$	0	$	0	$	(16,851)	Liabilities associated with acquisition related contingent consideration	$	(9,490)	$	0	$	0	$	(9,490)
Liabilities associated with foreign currency forward contracts		$	(7,868)	$	0	$	(7,868)	$	0

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.

~~Table of~~ ~~Contents~~

Cash and cash equivalents, accounts and notes receivable, net of allowance for ~~doubtful accounts,~~credit losses, 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~~have been 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. Subsequent to the Spark acquisition, the Company 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 ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company paid ~~$5.2~~$9.2 million to satisfy the ~~2019~~2020 portion of its obligation under the Spark acquisition contingent consideration arrangement. ~~During~~Previously, in the ~~nine~~three months ended ~~September~~June 30, 2020 the Company paid $5.2 million to satisfy the 2019 portion of the obligation. As of March 31, 2021, the Company has no remaining obligations under the Spark acquisition contingent consideration arrangement.

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During the three months ended March 31, 2021, the Company recognized a foreign exchange gain of approximately $0.3 million to remeasure the remaining South African Rand denominated liability into U.S. Dollars. During the three months ended March 31, 2020 the Company recognized mark-to-market gains of ~~$2.1~~approximately $4.1 million ~~to revise the estimated fair value of the contingent consideration liability. The Company also recognized a net~~and foreign exchange gains of ~~$2.8~~approximately $3.3 million ~~during the nine months ended September 30, 2020,~~ to remeasure the South African Rand denominated ~~liability.~~ ~~During the three months ended September 30, 2020 the~~ ~~mark-to-market and foreign exchange impacts were immaterial. Both~~liability into U.S. Dollars. In both periods presented, the revision toof the estimated fair values and the net foreign exchange gains and losses are included in the Other ~~income~~expenses, net line in the Consolidated Statements of Operations. ~~As of September 30, 2020, the estimated fair value of the Company’s acquisition related contingent consideration liability was $6.8 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.

Long-term debt. The carrying amounts of the long-term debt balances related to borrowings under the Company’s Revolving credit facility and Term Loan approximate fair value due to the fact that any outstanding borrowings are subject to short-term floating interest rates. As of ~~September 30, 2020,~~March 31, 2021, the fair ~~values~~value of the ~~2020 Convertible Notes and~~ 2025 Notes ~~were~~was approximately ~~$115.4~~$308.9 million, ~~and $301.8 million, respectively,~~ based on the quoted prices in markets that are not active (Level 2). For additional information related to long-term debt, see Note 9. Current and 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~~flows discounted 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 September 30, 2020 and 2019 totaled $2.8 million and $1.1 million, respectively.~~

Interest rate derivatives. As of ~~September 30, 2020,~~March 31, 2021, the recognized fair value of the Company’s Interest Rate Derivatives resulted in an asset of $3.9 million and current and long-term liabilities totaling ~~$58.7~~$35.1 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.~~11. Derivative Financial Instruments.

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~~(15)~~(13) 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 accruals where necessary for contingent liabilities, based on ASC 450, Contingencies, when it has determined that a liability is probable and reasonably estimable. The Company’s management does not expect the outcome in any legal proceedings or claims, individually or collectively, to have a material adverse financial or operational impact on the Company. Additionally, the Company currently expenses all legal costs as they are incurred.

On March 1, 2019, the Company was named as a defendant in a purported class action lawsuit stylized as Kristen Schertzer, et al. v. Bank of America, N.A., et al., Case No. 3:19-cv-00264, in the United States District Court for the Southern District of California, which makes allegations of harm related to balance inquiry transactions. On September 28, 2020, the district court issued a denial of the Company’s motion to dismiss and the matter is proceeding to the discovery phase. Due to the early stages of this matter, including uncertainty related to class certification and potential amount claimed by the class, the Company is unable to determine if liability will arise from this matter or estimate the range of any potential liability. The Company will vigorously defend this matter.

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. The Company and its merchant partners paid the business ~~rates,~~rate taxes, 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 VOA is in process of amending the business rating lists for England and Wales and the Company has recovered ~~some~~a large portion of the amounts paid to the tax authorities in respect of the ATMs subject to the amended lists in numerous local tax jurisdictions for the periods spanning from 2010 to ~~October~~December 2020. During the three months ended March 31, 2021, the Company recorded cash recoveries of approximately $12.0 million, net of amounts due to merchant partners, which is reflected as a reduction to the Cost of ATM operating revenues line in the Consolidated Statements of Operations. The Company estimates that up to approximately 312 million U.K. pounds sterling, or up to approximately $3 million at the March 31, 2021 exchange rate, remains recoverable from the various tax authorities, net of amounts that have already been recovered or are estimated to be due to merchant partners of the Company, some of which had paid indirectly these business ~~rates.~~ ~~During the three and nine months ended~~ ~~September~~ 30, 2020, the Company recorded net cash recoveries of approximately $11.8 million, which is reflected as a reduction to the Cost of ATM operating revenues line in the Consolidated Statements of Operations. rate taxes. The Company seeks to ensure that all necessary amendments to the business ratings list are made and that all recoverable amounts paid to the tax authorities are collected. The Company's estimate of the total recoverable amount is subject to change as the Company continues its analysis of the business ~~rates~~rate taxes paid during the 10 year period. Due to the complexity in administering and uncertainty of these collections, the Company will recognize the business ~~rates~~rate tax recoveries only when received.

The Supreme Court ruling does not apply to Scotland or Northern Ireland and business ~~rates~~rate taxes in those jurisdictions are still subject to valuation tribunal appeals and assessments. Accordingly, 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.

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Other Commitments

Asset retirement obligations. The Company’s ARO consist primarily of costs to 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 ~~September 30, 2020,~~March 31, 2021, the Company had ~~$60.3~~$63.4 million accrued for these liabilities. ~~For additional information, see~~ ~~Note 10. Asset Retirement Obligations~~.

~~Acquisition related contingent consideration.~~ During the nine months ended September 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 September 30, 2020, the Company had $6.8 million accrued for its 2020 obligation. For additional information related to the Spark acquisition related contingent consideration, see ~~Note 14. Fair Value Measurements~~.

~~(16)~~(14) Income Taxes

The Company’s income tax expense (benefit) ~~expense~~ for the periods presented was as follows:


		Three Months Ended September 30		Nine Months Ended September 30			Three Months Ended March 31, 2021
		2020	2019	2020	2019		2021			2020
		(In thousands, excluding percentages)					(In thousands, excluding percentages)
Income tax expense (benefit)	Income tax expense (benefit)	$10,049	$4,086	$(4,375)	$10,780	Income tax expense (benefit)	$	2,951		$	(3,737)
Effective tax rate	Effective tax rate	63.7%	16.4%	(84.5)%	23.2%	Effective tax rate	33.4		%	(185.7)		%

The Company’s income tax expense for the three months ended ~~September 30, 2020~~March 31, 2021 totaled ~~$10.0~~$3.0 million resulting in an effective tax rate of ~~63.7%~~33.4%, compared to ~~an expense~~a benefit of ~~$4.1~~$3.7 million, and an effective tax rate of ~~16.4%~~(185.7)%, for the same period of ~~2019. The Company’s income tax benefit for the nine months ended~~ ~~September 30, 2020~~ ~~totaled $4.4 million resulting in an effective tax rate of (84.5)%, compared to an expense of $10.8 million, and an effective tax rate of 23.2%, for the same period of 2019.~~2020.

The ~~increase~~increase in tax expense for the three months ended ~~September 30, 2020, compared to the same period of 2019,~~March 31, 2021 was primarily attributable to the ~~mix of earnings across our jurisdictions including increased losses incurred in countries where the Company realizes no tax benefit. The decrease~~higher pre-tax profits recognized in the current period, without an offset from any non-recurring tax ~~expense for the nine months ended September 30, 2020, compared to~~benefits, as was recognized in the same period of ~~2019,~~2020. The benefit recognized for the three months ended March 31, 2020 was primarily attributable to ~~lower pre-tax income during the nine months ended~~a ~~September 30, 2020~~ ~~and to a~~ non-recurring benefit from the 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 that 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 since the Company incurred net operating losses in 2018, the Company carried back these ~~2018~~ ~~losses to prior periods to receive refunds of taxes paid at higher rates in earlier periods.~~March 2020.

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 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.

~~(17)~~(15) Segment Information

As of ~~September 30, 2020,~~March 31, 2021, the Company’s operations consisted of 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,

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Germany, Spain and South Africa are included in its Europe & Africa segment, along with i-design (the Company’s ATM advertising business based in the U.K.). The Company’s Australia & New Zealand segment consists exclusively of its ATM operations in ~~these two countries.~~Australia and New Zealand. The Corporate segment primarily includes ~~the Company’s corporate~~ general and administrative ~~expenses.~~costs incurred by the corporate functions in the Company's geographical regions and also the technology center in India. 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. Intersegment revenues reflect each segment's total intercompany sales, including intercompany sales within a segment and between segments and are eliminated upon consolidation. Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

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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~~adds net interest expense, income tax expense, depreciation and accretion, amortization of deferred financing costs and note discounts, amortization of intangible assets, 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), and certain costs not anticipated to occur in future periods to net income, 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 ~~loss,~~income, net ~~loss,~~income, cash flows from operating, investing, or financing activities, or other income or cash flow measures contained within the consolidated financial statements.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(In thousands)									(In thousands)
Net income attributable to controlling interests and available to common shareholders	Net income attributable to controlling interests and available to common shareholders	$	5,732	$	20,864	$	9,565	$	35,654	Net income attributable to controlling interests and available to common shareholders	$	5,876	$	5,755
Adjustments:	Adjustments:									Adjustments:
Interest expense, net	Interest expense, net	11,132		6,751		26,362		20,265		Interest expense, net	10,761		6,421
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	2,341		3,377		10,226		9,999		Amortization of deferred financing costs and note discount	1,043		3,486
Loss on extinguishment of convertible notes		0		0		3,018		0

Income tax expense (benefit)	Income tax expense (benefit)	10,049		4,086		(4,375)		10,780		Income tax expense (benefit)	2,951		(3,737)
Depreciation and accretion expense	Depreciation and accretion expense	33,063		33,466		97,346		99,644		Depreciation and accretion expense	32,285		32,211
Amortization of intangible assets	Amortization of intangible assets	7,900		12,404		25,162		37,407		Amortization of intangible assets	6,086		8,413
EBITDA	EBITDA	70,217		80,948		167,304		213,749		EBITDA	59,002		52,549
Add back:	Add back:									Add back:
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	814		637		1,847		3,101		Loss on disposal and impairment of assets	353		921
Other income (1)		(7,116)		(3,703)		(9,651)		(9,454)
Other expenses, net (1)										Other expenses, net (1)	2,842		3,829
Noncontrolling interests (2)	Noncontrolling interests (2)	14		15		42		46		Noncontrolling interests (2)	15		13
Share-based compensation expense	Share-based compensation expense	5,921		5,633		16,143		15,367		Share-based compensation expense	4,258		5,193
Restructuring expenses (3)	Restructuring expenses (3)	2,008		3,583		6,557		7,046		Restructuring expenses (3)	1,692		1,209

Acquisition related expenses (4)										Acquisition related expenses (4)	1,440		0

Adjusted EBITDA(5)	Adjusted EBITDA(5)	$	71,858	$	87,113	$	182,242	$	229,855	Adjusted EBITDA(5)	$	69,602	$	63,714

(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 nine~~ months ended ~~September 30, 2020,~~March 31, 2021, restructuring expenses included costs incurred in conjunction with facility closures, workforce reductions and other related charges. For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, restructuring expenses included ~~professional fees and~~ costs incurred in conjunction with ~~facility~~facilities closures, professional fees and workforce reductions. The facility closures during the three months ended March 31, 2021 and 2020, respectively, primarily occurred in the U.K. related to reducing the number of facilities associated with cash delivery operations.

(4) For the three months ended March 31, 2021, acquisition related expenses includes legal and professional fees and certain administrative costs incurred in connection with the proposed acquisition of the Company, as further discussed in Note 1. Basis of Presentation - (a) Description of Business.

(5) The results for the three months ended March 31, 2021 include business rate tax recoveries of $12.0 million, classified as a cost reduction within Cost of ATM operating revenues.

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


		Three Months Ended September 30, 2020													Three Months Ended March 31, 2021
		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	$	190,271	$	69,906	$	19,221	$	0	$	—	$	279,398	Revenue from external customers	$	191,557	$	56,078	$	20,199	$	0	$	—	$	267,834
Intersegment revenues	Intersegment revenues	1,454		0		0		—		(1,454)		—		Intersegment revenues	488		0		0		—		(488)		—
Cost of revenues	Cost of revenues	127,405		32,815		13,951		390		(1,454)		173,107		Cost of revenues	120,177		25,375		14,313		222		(488)		159,599
Selling, general, and administrative expenses	Selling, general, and administrative expenses	14,293		8,986		2,036		15,057		1		40,373		Selling, general, and administrative expenses	18,329		8,684		1,421		14,701		(226)		42,909
Restructuring expenses	Restructuring expenses	0		1,894		114		0		0		2,008		Restructuring expenses	0		1,549		0		143		0		1,692

Loss (gain) on disposal and impairment of assets		379		436		(1)		0		0		814
Acquisition related expenses														Acquisition related expenses	0		0		0		1,440		0		1,440
(Gain) loss on disposal and impairment of assets														(Gain) loss on disposal and impairment of assets	(79)		435		(3)		0		0		353

Adjusted EBITDA	Adjusted EBITDA	50,077		27,994		3,235		(9,467)		19		71,858		Adjusted EBITDA	53,538		21,952		4,466		(10,373)		19		69,602

Capital expenditures (1)	Capital expenditures (1)	$	22,028	$	8,706	$	556	$	0	$	0	$	31,290	Capital expenditures (1)	12,032		3,891		323		0		0		16,246

Total Assets														Total Assets	$	1,259,570	$	469,149	$	57,778	$	43,361	$	—	$	1,829,858

Three Months Ended September 30, 2019
North America Europe & Africa Australia & New Zealand Corporate Eliminations Total
(In thousands)
Revenue from external customers $ 222,329 $ 104,686 $ 24,492 $ 0 $ — $ 351,507
Intersegment revenues 2,379 22 0 — (2,401) —
Cost of revenues 148,215 60,477 17,264 368 (2,542) 223,782
Selling, general, and administrative expenses 17,517 10,292 2,286 16,162 0 46,257
Restructuring expenses 799 2,335 0 449 0 3,583
Loss (gain) on disposal and impairment of assets 225 457 (45) 0 0 637
Adjusted EBITDA 58,977 33,939 4,941 (10,896) 152 87,113
Capital expenditures (1)
$ 18,723 $ 12,638 $ 672 $ 3,233 $ 0 $ 35,266

Nine Months Ended September 30, 2020
North America Europe & Africa Australia & New Zealand Corporate Eliminations Total
(In thousands)
Revenue from external customers $ 567,277 $ 200,162 $ 51,753 $ 0 $ — $ 819,192
Intersegment revenues 4,484 36 0 — (4,520) —
Cost of revenues 386,472 117,261 37,169 1,154 (4,520) 537,536
Selling, general, and administrative expenses 43,877 24,965 5,541 41,452 (226) 115,609
Restructuring expenses 1,205 4,971 114 267 0 6,557
Loss (gain) on disposal and impairment of assets 956 912 (21) 0 0 1,847
Adjusted EBITDA 141,417 57,908 9,042 (26,176) 51 182,242
Capital expenditures (1)
$ 41,689 $ 18,302 $ 1,103 $ 0 $ 0 $ 61,094

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		Nine Months Ended September 30, 2019													Three Months Ended March 31, 2020
		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	$	636,663	$	298,615	$	75,320	$	0	$	—	$	1,010,598	Revenue from external customers	$	204,382	$	81,863	$	20,357	$	0	$	—	$	306,602
Intersegment revenues	Intersegment revenues	7,508		488		0		—		(7,996)		—		Intersegment revenues	1,615		37		0		—		(1,652)		—
Cost of revenues	Cost of revenues	429,287		187,429		54,540		995		(8,004)		664,247		Cost of revenues	139,904		52,634		14,275		561		(1,652)		205,722
Selling, general, and administrative expenses	Selling, general, and administrative expenses	50,981		31,745		6,800		42,386		0		131,912		Selling, general, and administrative expenses	17,049		9,061		1,947		14,321		0		42,378

Restructuring expenses	Restructuring expenses	1,012		2,735		0		3,299		0		7,046		Restructuring expenses	0		1,000		0		209		0		1,209

Loss (gain) on disposal and impairment of assets	Loss (gain) on disposal and impairment of assets	1,327		1,874		(100)		0		0		3,101		Loss (gain) on disposal and impairment of assets	443		495		(17)		0		0		921

Adjusted EBITDA	Adjusted EBITDA	163,904		79,930		13,979		(28,014)		56		229,855		Adjusted EBITDA	48,999		20,251		4,133		(9,461)		(208)		63,714

Capital expenditures (1)	Capital expenditures (1)	$	41,873	$	32,538	$	3,535	$	12,373	$	0	$	90,319	Capital expenditures (1)	12,187		5,867		375		0		0		18,429

Total assets														Total assets	$	1,149,376	$	570,709	$	50,464	$	446,672	$	—	$	2,217,221

(1)Capital expenditures ~~include payments made~~are primarily related to organic growth projects, including the purchase of ATMs for ~~property~~both new and ~~equipment, exclusive license~~existing ATM management agreements, technology and ~~site acquisition costs.~~product development, investments in infrastructure, ongoing refreshment of ATMs and operational assets and other related type activities in the normal course of business. 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.

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Identifiable Assets

September 30, 2020 December 31, 2019

(In thousands)
North America $ 1,285,430 $ 1,141,084
Europe & Africa 490,867 511,037
Australia & New Zealand 55,811 60,416
Corporate 34,770 51,421
Total $ 1,866,878 $ 1,763,958
Property and equipment, net of accumulated depreciation, relating to operations in the Company's geographic segments are as follows:


	March 31, 2021		December 31, 2020
	(In thousands)
North America	$	234,305	$	238,601
Europe & Africa	135,684		145,824
Australia & New Zealand	17,709		19,232
Corporate	25,163		26,185
Total	$	412,861	$	429,842

~~(18)~~(16) 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 Subsidiaries (as defined in the 2025 Notes Indenture). The guarantees of the 2025 Notes by any 2025 Notes Guarantor are subject to automatic and customary releases upon: (i) the sale or disposition of all or substantially all of the assets of the 2025 Notes Guarantor, (ii) the disposition of sufficient capital stock of the 2025 Notes Guarantor so that it no longer qualifies under the 2025 Notes Indenture as a restricted subsidiary of the Company, (iii) the designation of the 2025 Notes Guarantor as an unrestricted subsidiary in accordance with the 2025 Notes Indenture, (iv) the legal or covenant defeasance of the notes or the satisfaction and discharge of the 2025 Notes Indenture, (v) the liquidation or dissolution of the 2025 Notes Guarantor, or (vi) provided the 2025 Notes Guarantor is not wholly-owned by the Company, its ceasing to guarantee other debt of the Company or another 2025 Notes Guarantor. A 2025 Notes 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 2025 Notes Guarantor) unless no default under the 2025 Notes Indenture exists and either the successor to the 2025 Notes Guarantor assumes its guarantee of the 2025 Notes or the disposition, consolidation, or merger complies with the “Asset Sales” covenant in the 2025 Notes Indenture.

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On March 2, 2020, the SEC made significant changes to its disclosure requirements relating to registered securities that are guaranteed. The disclosure requirements, as amended, are generally effective for filings on or after January 4, 2021, with early adoption permitted. 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, if certain conditions are met. The following information reflects the Condensed Consolidating Statements of Comprehensive (Loss) Income for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Condensed Consolidated Balance Sheets as of ~~September 30, 2020,~~March 31, 2021, and the Summary Financial Information as of and for the year ended December 31, ~~2019~~2020 for: (i) Cardtronics plc, the parent Guarantor of the 2025 Notes (“Parent”), (ii) Cardtronics Inc. and Cardtronics USA, Inc. (“Issuers”), (iii) the 2025 Notes Guarantors (the “Guarantors”), and (iv) the 2025 Notes Non-Guarantors.

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Condensed Consolidated Statements of Comprehensive (Loss) Income


		Nine Months Ended September 30, 2020													Three Months Ended March 31, 2021
		Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total			Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
		(In thousands)													(In thousands)
Revenues	Revenues	$	0	$	460,657	$	207,657	$	203,710	$	(52,832)	$	819,192	Revenues	$	0	$	156,803	$	73,740	$	55,270	$	(17,979)	$	267,834
Operating costs and expenses	Operating costs and expenses	17,883		449,802		161,231		206,932		(53,638)		782,210		Operating costs and expenses	6,079		147,786		52,478		55,659		(17,991)		244,011
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	—		919		227		701		—		1,847		Loss on disposal and impairment of assets	0		(98)		57		394		0		353
(Loss) income from operations	(Loss) income from operations	(17,883)		9,936		46,199		(3,923)		806		35,135		(Loss) income from operations	(6,079)		9,115		21,205		(783)		12		23,470
Interest expense (income), net, including amortization of deferred financing costs and note discount		0		32,601		5,254		(1,438)		171		36,588
Loss on extinguishment of convertible notes		0		3,018		0		0		0		3,018
Interest expense, net, including amortization of deferred financing costs and note discount														Interest expense, net, including amortization of deferred financing costs and note discount	90		10,766		734		154		60		11,804

Equity in earnings of subsidiaries	Equity in earnings of subsidiaries	(25,929)		(47,044)		30,432		282		42,259		0		Equity in earnings of subsidiaries	(12,419)		(13,592)		11,625		(1,353)		15,739		0
Other expenses (income)		2,332		9,418		5,915		(8,673)		(18,643)		(9,651)
Income before income taxes		5,714		11,943		4,598		5,906		(22,981)		5,180
Other expenses, net														Other expenses, net	1,912		2,504		2,950		1,850		(6,374)		2,842
Income (loss) before income taxes														Income (loss) before income taxes	4,338		9,437		5,896		(1,434)		(9,413)		8,824
Income tax (benefit) expense	Income tax (benefit) expense	(3,841)		(4,332)		6,259		(2,461)		0		(4,375)		Income tax (benefit) expense	(1,535)		1,616		1,768		1,102		0		2,951
Net income (loss)	Net income (loss)	9,555		16,275		(1,661)		8,367		(22,981)		9,555		Net income (loss)	5,873		7,821		4,128		(2,536)		(9,413)		5,873
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	0		0		0		0		(10)		(10)		Net loss attributable to noncontrolling interests	0		0		0		0		(3)		(3)
Net income (loss) attributable to controlling interests and available to common shareholders	Net income (loss) attributable to controlling interests and available to common shareholders	9,555		16,275		(1,661)		8,367		(22,971)		9,565		Net income (loss) attributable to controlling interests and available to common shareholders	5,873		7,821		4,128		(2,536)		(9,410)		5,876
Other comprehensive loss attributable to controlling interest		(46,380)		(37,161)		(2,169)		(4,632)		43,962		(46,380)
Comprehensive (loss) income attributable to controlling interests		$	(36,825)	$	(20,886)	$	(3,830)	$	3,735	$	20,991	$	(36,815)
Other comprehensive income (loss) attributable to controlling interest														Other comprehensive income (loss) attributable to controlling interest	17,732		(37,160)		(2,169)		(4,633)		43,962		17,732
Comprehensive income (loss) attributable to controlling interests														Comprehensive income (loss) attributable to controlling interests	$	23,605	$	(29,339)	$	1,959	$	(7,169)	$	34,552	$	23,608

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Condensed Consolidated Balance Sheets


		As of September 30, 2020													As of March 31, 2021
		Parent		Issuers		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	$	98	$	186,507	$	61,756	$	15,129	$	0	$	263,490	Cash and cash equivalents	$	72	$	137,449	$	39,534	$	20,308	$	0	$	197,363
Accounts and notes receivable, net														Accounts and notes receivable, net	0		46,387		22,016		19,367		0		87,770
Restricted cash	Restricted cash	0		68,909		2,551		25,280		0		96,740		Restricted cash	0		106,913		2,477		32,469		0		141,859
Accounts and notes receivable, net		0		41,057		17,921		17,309		0		76,287

Other current assets	Other current assets	0		40,105		2,198		37,016		0		79,319		Other current assets	0		30,061		2,281		24,206		0		56,548
Total current assets	Total current assets	98		336,578		84,426		94,734		0		515,836		Total current assets	72		320,810		66,308		96,350		0		483,540
Property and equipment, net	Property and equipment, net	0		254,809		50,773		117,996		0		423,578		Property and equipment, net	0		245,575		50,613		116,673		0		412,861
Operating lease assets														Operating lease assets	0		31,608		2,330		22,496		0		56,434
Intangible assets, net	Intangible assets, net	0		26,661		41,048		20,327		0		88,036		Intangible assets, net	0		17,467		37,400		20,383		0		75,250
Goodwill	Goodwill	0		445,046		141,262		152,871		0		739,179		Goodwill	0		445,046		152,505		163,260		0		760,811
Operating lease assets		0		34,239		2,120		26,059		0		62,418
Investments in and advances to subsidiaries	Investments in and advances to subsidiaries	390,948		295,349		188,237		45,214		(919,748)		0		Investments in and advances to subsidiaries	460,376		324,975		179,526		53,387		(1,018,264)		0
Intercompany receivable	Intercompany receivable	36,422		510,388		254,500		274,982		(1,076,292)		0		Intercompany receivable	11,759		510,398		625,003		265,162		(1,412,322)		0
Deferred tax assets, net	Deferred tax assets, net	698		0		(1,013)		17,735		0		17,420		Deferred tax assets, net	1,112		0		(1,014)		17,676		0		17,774
Prepaid expenses, deferred costs, and other noncurrent assets	Prepaid expenses, deferred costs, and other noncurrent assets	0		12,047		1,438		6,926		0		20,411		Prepaid expenses, deferred costs, and other noncurrent assets	0		16,509		1,583		5,096		0		23,188
Total assets	Total assets	$	428,166	$	1,915,117	$	762,791	$	756,844	$	(1,996,040)	$	1,866,878	Total assets	$	473,319	$	1,912,388	$	1,114,254	$	760,483	$	(2,430,586)	$	1,829,858

Liabilities and Shareholders' Equity	Liabilities and Shareholders' Equity													Liabilities and Shareholders' Equity
Current portion of long-term liabilities	Current portion of long-term liabilities	$	0	$	147,977	$	5,869	$	29,468	$	0	$	183,314	Current portion of long-term liabilities	$	0	$	5,000	$	0	$	0	$	0	$	5,000
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	390		240,871		62,267		84,464		(20,909)		367,083		Accounts payable and accrued liabilities	2,584		328,772		70,254		97,104		(27,902)		470,812
Total current liabilities	Total current liabilities	390		388,848		68,136		113,932		(20,909)		550,397		Total current liabilities	2,584		333,772		70,254		97,104		(27,902)		475,812
Long-term debt	Long-term debt	0		773,857		0		0		0		773,857		Long-term debt	0		772,693		0		0		0		772,693
Intercompany payable	Intercompany payable	93,441		310,126		303,654		369,065		(1,076,286)		0		Intercompany payable	77,279		316,948		634,751		383,338		(1,412,316)		0
Asset retirement obligations	Asset retirement obligations	0		22,524		1,961		30,122		0		54,607		Asset retirement obligations	0		23,853		1,966		31,040		0		56,859
Deferred tax liabilities, net														Deferred tax liabilities, net	0		53,611		1,490		370		0		55,471
Operating lease liabilities	Operating lease liabilities	0		40,617		1,449		16,716		0		58,782		Operating lease liabilities	0		37,325		1,584		14,772		0		53,681
Deferred tax liabilities, net		0		46,238		1,660		738		0		48,636
Other long-term liabilities	Other long-term liabilities	0		37,310		2,147		6,807		0		46,264		Other long-term liabilities	0		16,719		1,911		3,256		0		21,886
Total liabilities	Total liabilities	93,831		1,619,520		379,007		537,380		(1,097,195)		1,532,543		Total liabilities	79,863		1,554,921		711,956		529,880		(1,440,218)		1,436,402
Shareholders' equity	Shareholders' equity	334,335		295,597		383,784		219,464		(898,845)		334,335		Shareholders' equity	393,456		357,467		402,298		230,603		(990,368)		393,456
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	428,166	$	1,915,117	$	762,791	$	756,844	$	(1,996,040)	$	1,866,878	Total liabilities and shareholders' equity	$	473,319	$	1,912,388	$	1,114,254	$	760,483	$	(2,430,586)	$	1,829,858

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Summary Prior Year Financial Information


		As of and for the Year Ended December 31, 2019													As of and for the Year Ended December 31, 2020
		Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total			Parent		Issuers		Guarantors		Non-Guarantors		Eliminations		Total
		(In thousands)													(In thousands)
Revenues	Revenues	$	0	$	668,527	$	351,330	$	402,079	$	(72,531)	$	1,349,405	Revenues	$	0	$	614,090	$	281,752	$	268,948	$	(70,791)	$	1,093,999
(Loss) income from operations	(Loss) income from operations	(35,637)		40,733		70,835		10,203		300		86,434		(Loss) income from operations	(34,392)		14,968		76,556		(4,215)		871		53,788
Net income	Net income	48,265		20,546		63,952		27,036		(111,534)		48,265		Net income	19,137		12,467		14,897		4,191		(31,555)		19,137
Net income attributable to controlling interests and available to common shareholders	Net income attributable to controlling interests and available to common shareholders	48,265		20,546		63,952		27,036		(111,525)		48,274		Net income attributable to controlling interests and available to common shareholders	19,137		12,467		14,897		4,191		(31,548)		19,144
Total current assets	Total current assets	46		146,768		41,788		119,919		0		308,521		Total current assets	87		299,489		72,391		90,046		0		462,013
Total noncurrent assets	Total noncurrent assets	452,342		1,225,786		1,488,531		196,625		(1,907,847)		1,455,437		Total noncurrent assets	444,012		1,531,788		1,060,252		693,038		(2,359,658)		1,369,432
Total current liabilities	Total current liabilities	814		242,735		66,766		124,069		0		434,384		Total current liabilities	4,295		310,477		68,326		110,592		(17,705)		475,985
Total noncurrent liabilities	Total noncurrent liabilities	71,248		805,812		984,556		(24,244)		(888,125)		949,247		Total noncurrent liabilities	60,388		1,211,466		645,420		445,586		(1,386,816)		976,044

~~(19)~~(17) Concentration Risk

Significant merchant customers. During the trailing twelve months ended ~~September 30, 2020,~~March 31, 2021, the Company derived approximately 23% 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 ~~September 30, 2020,~~March 31, 2021, 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 ~~September 30, 2020,~~March 31, 2021, the contracts the Company has with its five largest merchant customers have a weighted average remaining life of approximately 32.4 years.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “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~~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~~including the COVID-19 outbreak, that have adversely affected its business, and may ~~negatively affect our~~in the future have a material adverse impact on its 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~~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~~cash-in-transit 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;

•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.~~2020.

In addition, actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors related to the proposed acquisition of the Company by NCR Corporation, including, without limitation:

•statements regarding the Company’s plans to manage its business through the COVID-19 pandemic and the health and safety of its customers and employees;

•the expected impact of the COVID-19 pandemic on the Company’s operating goals and actions to manage these goals;

•expectations regarding cost and revenue synergies; expectations regarding the Company’s cash flow generation, cash reserve, liquidity, financial flexibility and impact of the COVID-19 pandemic on the Company’s employee base;

•expectations regarding the Company’s ability to capitalize on market opportunities;

•the Company’s financial outlook;

•the effect of the announcement of the proposed transaction on the ability of the Company to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom the Company does business, or on the Company's operating results and business generally;

•risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction;

•the outcome of any legal proceedings related to the proposed transaction;

•the occurrence of any event, change or other circumstances that could give rise to the termination of the acquisition agreement;

•the ability of the parties to consummate the proposed transaction on a timely basis or at all;

•the satisfaction of the conditions precedent to consummation of the proposed transaction, including the ability to secure regulatory approvals on the terms expected, at all or in a timely manner;

•the ability of the Company to implement its plans, forecasts and other expectations with respect to its business after the completion of the proposed transaction and realize expected benefits;

•business disruption following the proposed transaction; and

•the potential benefits of an acquisition of the Company.

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.~~2020. 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

The following discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto included under Item 1. Financial Statements of this Form 10-Q and our Consolidated Financial Statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020 (the “2020 Form 10-K”).

Overview

Cardtronics plc, ~~provides convenient automated consumer~~together with its wholly and majority-owned subsidiaries (collectively, “us,” “we,” “our,” “ours,” the “Company” or “Cardtronics”) is the trusted leader in financial ~~services through its network of~~self-service, enabling cash transactions at over 285,000 automated teller machines and multi-function financial services kiosks (collectively referred to as “ATMs”)~~. We are~~ across 10 countries in North America, Europe, Asia-Pacific, and Africa. The total number of ATMs that we service includes our estimate of ATMs that were temporarily closed as a result of the ~~world’s largest ATM owner/operator, providing services to over 285,000 ATMs.~~ coronavirus pandemic ("COVID-19" or the "Pandemic") as further described in Results of Operations - Key Operating Metrics, below. The total number of transacting ATMs we serviced as of March 31, 2021 was approximately 279,000.

During the three months ended ~~September 30, 2020, 68%~~March 31, 2021, approximately 72% of our total revenues were derived from operations in North America (including our ATM operations in the United States ("U.S."), Canada, and Mexico), ~~25%~~approximately 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 7%approximately 8% of our total revenues were derived from operations in Australia and New Zealand.

We deliver financial-related services to cardholders through our networks. We also provide 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, we provide our retail partners with a compelling automated solution that helps attract and retain customers. In turn, it increases the likelihood that customers will utilize the ATMs placed at their facilities. We also partner with financial institutions and other consumer financial services providers to enable convenient and fee-free access to our ATMs via our surcharge-free solutions for their customers. Included in our network are approximately ~~198,000~~200,000 ATMs (including our estimate of ATMs that were temporarily closed as a result of the Pandemic) to which we provided processing only services or various forms of managed services solutions. Under a managed services arrangement, retailers, financial institutions, and ATM distributors rely on us to handle some or all of the operational aspects associated with operating and maintaining ATMs, typically in exchange for a monthly service fee, fee per transaction, or a 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 world’s largest ~~retail based~~retail-based surcharge-free ATM network (based on the number of participating ATMs). Allpoint has over 55,000 ~~participating~~participating ATMs and provides surcharge-free ATM access to ~~nearly~~approximately 1,200 participating credit unions, banks, ~~digital banks,~~ financial technology companies with a primary focus on the retail consumer finance business (or "FinTechs"), and stored-value debit card ~~issuers that are principally located in North America.~~issuers. For participants, Allpoint ~~provides~~delivers the scale, density, and convenience of surcharge-free ATMs that surpasses the largest banks in the U.S. ~~In exchange,~~Under Allpoint, ~~earns~~we typically earn either a fixed monthly fee per cardholder ~~and/~~or a fixed fee per transaction ~~that is~~ paid by ~~participants.~~the consumer's financial institution or the card/benefit issuer. We also earn interchange revenues on each transaction performed at one of our participating Allpoint ATMs. Allpoint includes a majority of our ~~Company owned~~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 usAllpoint 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~~Allpoint’s participating 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”).~~2020.

~~COVID-19 Update~~Recent Trends and Events

Proposed Transaction with NCR. On January 25, 2021, we entered into a definitive agreement to be acquired by NCR Corporation (“NCR”) for $39.00 per share in cash. This followed our delivery of a notice to terminate our previously announced definitive agreement with Catalyst Holdings Limited (“Catalyst”), an affiliate of Apollo Management, L.P. and Hudson Executive Capital, LP, dated as of December 15, 2020, pursuant to which we would have been acquired by Catalyst for $35.00 per share, in accordance with the terms of such agreement. In connection with such termination, NCR paid on our behalf a termination fee of approximately $32.6 million, which we must reimburse if our agreement with NCR is terminated under certain specified circumstances. The proposed transaction with NCR is subject to the satisfaction of customary closing conditions, including the receipt of regulatory approvals. Cardtronics shareholders approved the transaction on May 7, 2021.

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It is expected that, subject to the satisfaction or waiver of all relevant conditions, the proposed transaction will be completed in mid-year 2021. For a discussion of certain risks related to the proposed transaction with NCR, including related to certain covenants with which we must comply during the pendency of the proposed transaction, see Part I. Item 1A. Risk Factors – Risks Associated with the Proposed Transaction with NCR Corporation in the 2020 Form 10-K. For more information, see our definitive proxy statement filed with the SEC on March 30, 2021 and the supplement to the definitive proxy statement filed with the SEC on April 27, 2021.

COVID-19 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~~Organization. By late March 2020, there were confirmed cases and deaths from the Pandemic in each of the countries in which we operate. In response, throughout 2020 and in 2021, national and local governments instituted various degrees of 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~~remains on protecting the health and ~~well-being~~safety of our employees and the communities in which we operate, we continue to coordinate with our partners, where possible, to ensure continued and seamless operations of our ATMs.

~~Table of~~ ~~Contents~~

~~Certain~~Specific locations, such as casinos, theme parks, malls, tourist-focused ATMs, education facilities and other ATM sites were closed for all or ~~part~~parts of the second, third and ~~third~~fourth quarters of 2020. ~~Many~~Some of these locations remain closed or continue to ~~varying degrees~~be negatively impacted as a result of the Pandemic. At the end of ~~September 2020,~~March 2021, closed ATMs, including but not limited to ATMs at casinos, theme parks, malls, tourist-focused ATMs, and education locations, represented approximately 5%6% of our total Company-owned ATM ~~fleet, an improvement from 8% as of the end of June 2020.~~fleet. 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 continued to improve across most geographies since late March 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 anticipated transaction~~continued declines ~~are expected~~due to ~~result~~Pandemic-related restrictions resulted in lower ~~fourth~~first quarter ~~2020~~2021 revenues compared to the same period in ~~2019~~2020 and may continue to adversely impact our results in future ~~periods beyond 2020.~~periods.

In response to the Pandemic, we ~~have~~ implemented business continuity plans, with most of our employees working from home since March ~~16,~~2020, without issue. ~~Certain~~Some of our employees continue to perform cash delivery, maintenance and other technical services on site and at certain office and warehouse locations to ensure the continued operations of our ATMs. ~~We have~~During 2020, we also implemented cost reduction plans and ~~have taken~~took action to manage expenses, ~~reduce~~temporarily deferred capital spending and ~~have~~ suspended our opportunistic share repurchase program to optimize cash ~~flow during the current environment.~~flow. We continue to ~~actively~~ monitor the situation actively and may take further actions that could alter our business operations as may be required by national, federal, state, and/or local authorities or that we determine are in the best interests of our employees, customers, partners and shareholders. ~~In spite of~~Despite the transaction declines impacted by the Pandemic that may continue in the remainder of ~~2020,~~2021, we anticipate generating positive adjusted free cash flows in 2021 after considering our required capital expenditures. See Part I, Item ~~1. Financial Statements, Note 9. Long-Term Debt. and~~ ~~Part II, Item 1A~~1A. Risk Factors - ~~“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~~ongoing outbreak of the coronavirus pandemic (“COVID-19” or the "Pandemic") ~~pandemic~~ that has adversely ~~impacted~~affected our business, and that may in the future have a material adverse impact on our ~~business.”~~

~~Other Recent Trends and Events~~business in the 2020 Form10-K.

Withdrawal transaction and revenue trends. We present cash withdrawal transaction trends - on a comparable ATM, or “same-store,” basis as supplemental information for investors. Our same-store cash withdrawal transactions include withdrawal transactions on Company-owned transacting ATMs registering withdrawals for 12 consecutive months preceding and including each quarter of the fiscal year. Withdrawal transactions on ATMs deployed under managed services arrangements are not included. In addition, we also may make adjustments to exclude ATMs that change formats (e.g., change between pay-to-use and free-to-use). We present same-store cash withdrawal transactions to help us and our investors evaluate the ongoing performance of our comparable ATMs, including the impact of the Pandemic on our operations. Our method of calculating same store cash withdrawal transactions is not necessarily comparable to similarly titled measures reported by other companies.

Our two largest markets are the U.S. and U.K., and on a combined basis, these markets represent approximately~~80%~~ 80% of our revenues. Our U.S. same-store cash withdrawal ~~transaction~~transactiosns increased by approximately 1%6% during the three months ended ~~September 30, 2020~~March 31, 2021 when compared to same period in ~~2019.~~2020, and were up 5% compared to the same period in 2019 (non-pandemic impacted). Our U.S. transactions were up compared to both periods as we continue to see strong growth in our surcharge-free transactions. Our U.K. same-store cash withdrawal transactions decreased by approximately ~~33%~~39% during the three months ended ~~September 30, 2020~~March 31, 2021 when compared to same period in ~~2019.~~2020 and were down 46% compared to the same period in 2019 (non-pandemic impacted). In ~~both cases, and~~ each of our other jurisdictions, same-store transaction results have been adversely impacted by the Pandemic beginning in mid-March 2020.

~~Following the momentum we experienced in the latter part~~

Table of ~~2019, we saw a strong start~~Contents

With varying measures implemented by governments, including travel and social gathering limitations and their corresponding impacts to ~~2020. In the U.S.,~~consumer activity, our ~~same-store withdrawal transactions were up 6% from January through mid-March. However, the Pandemic,~~business remained impacted throughout most of 2020 and the associated government-mandated restrictions, 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 in the latter part of March. These transaction declines improved during the ~~month~~first quarter of April when we first noted a modest improvement in withdrawal transaction volumes, correlated with higher unemployment benefits and other government stimulus programs. The improvement continued throughout2021 by the ~~remainder~~consequential impacts of the second and third quarters of 2020 as the shelter in place restrictions began to ease and consumer activity resumed to varying extents in our markets. In the U.S., same-store withdrawal transaction volumes in the third quarter of 2020 were up approximately 1%, as indicated above, but down 3% when locations that remain closed are included. Both measures represent a notable improvement from March. The U.K. also experienced a notable improvement from late March and early April. 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 later in April and volumes continued to improve throughout the remainder of the second and into the third quarter. U.K. same-store transaction volumes in the third quarter of 2020 were down approximately 33% year-over-year, as indicated above, and down 34% when locations that remain closed are included.Pandemic. Further social gathering restrictions or the introduction of additional restrictions in any or all of our markets would likely adversely impact our transaction volumes. Conversely, we would expect to recover more transaction volume as social gathering and travel restrictions are reduced or removed in each ~~market as~~of the markets in which we ~~have seen in certain regions.~~operate.

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Results of Operations

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


		Three months ended September 30,								Nine Months Ended September 30,									Three months ended March 31,

		2020				2019				2020				2019					2021				2020
		(In thousands, excluding percentages)																	(In thousands, excluding percentages)
Revenues:	Revenues:																	Revenues:
ATM operating revenues	ATM operating revenues	$	267,320	95.7	%	$	333,384	94.8	%	$	781,998	95.5	%	$	959,067	94.9	%	ATM operating revenues	$	255,018	95.2	%	$	291,799	95.2	%
ATM product sales and other revenues	ATM product sales and other revenues	12,078		4.3		18,123		5.2		37,194		4.5		51,531		5.1		ATM product sales and other revenues	12,816		4.8		14,803		4.8
Total revenues	Total revenues	279,398		100.0		351,507		100.0		819,192		100.0		1,010,598		100.0		Total revenues	267,834		100.0		306,602		100.0
Cost of revenues:	Cost of revenues:																	Cost of revenues:
Cost of ATM operating revenues (1)	Cost of ATM operating revenues (1)	165,265		59.2		208,860		59.4		510,014		62.3		623,099		61.7		Cost of ATM operating revenues (1)	150,803		56.3		193,630		63.2
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	7,842		2.8		14,922		4.2		27,522		3.4		41,148		4.1		Cost of ATM product sales and other revenues	8,796		3.3		12,092		3.9
Total cost of revenues	Total cost of revenues	173,107		62.0		223,782		63.7		537,536		65.6		664,247		65.7		Total cost of revenues	159,599		59.6		205,722		67.1
Operating expenses:	Operating expenses:																	Operating expenses:
Selling, general, and administrative expenses (2)	Selling, general, and administrative expenses (2)	40,373		14.4		46,257		13.2		115,609		14.1		131,912		13.1		Selling, general, and administrative expenses (2)	42,909		16.0		42,378		13.8

Restructuring expenses	Restructuring expenses	2,008		0.7		3,583		1.0		6,557		0.8		7,046		0.7		Restructuring expenses	1,692		0.6		1,209		0.4

Acquisition related expenses																		Acquisition related expenses	1,440		0.5		—		—

Depreciation and accretion expense	Depreciation and accretion expense	33,063		11.8		33,466		9.5		97,346		11.9		99,644		9.9		Depreciation and accretion expense	32,285		12.1		32,211		10.5
Amortization of intangible assets	Amortization of intangible assets	7,900		2.8		12,404		3.5		25,162		3.1		37,407		3.7		Amortization of intangible assets	6,086		2.3		8,413		2.7
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	814		0.3		637		0.2		1,847		0.2		3,101		0.3		Loss on disposal and impairment of assets	353		0.1		921		0.3
Total operating expenses	Total operating expenses	84,158		30.1		96,347		27.4		246,521		30.1		279,110		27.6		Total operating expenses	84,765		31.6		85,132		27.8
Income from operations	Income from operations	22,133		7.9		31,378		8.9		35,135		4.3		67,241		6.7		Income from operations	23,470		8.8		15,748		5.1
Other expenses (income):
Other expenses:																		Other expenses:
Interest expense, net	Interest expense, net	11,132		4.0		6,751		1.9		26,362		3.2		20,265		2.0		Interest expense, net	10,761		4.0		6,421		2.1
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	2,341		0.8		3,377		1.0		10,226		1.2		9,999		1.0		Amortization of deferred financing costs and note discount	1,043		0.4		3,486		1.1
Loss on extinguishment of convertible notes		0		—		—		—		3,018				—		—
Other income		(7,116)		(2.5)		(3,703)		(1.1)		(9,651)		(1.2)		(9,454)		(0.9)

Other expense, net																		Other expense, net	2,842		1.1		3,829		1.2
Total other expenses	Total other expenses	6,357		2.3		6,425		1.8		29,955		3.7		20,810		2.1		Total other expenses	14,646		5.5		13,736		4.5
Income before income taxes	Income before income taxes	15,776		5.6		24,953		7.1		5,180		0.6		46,431		4.6		Income before income taxes	8,824		3.3		2,012		0.7
Income tax expense (benefit)	Income tax expense (benefit)	10,049		3.6		4,086		1.2		(4,375)		(0.5)		10,780		1.1		Income tax expense (benefit)	2,951		1.1		(3,737)		(1.2)
Net income	Net income	5,727		2.0		20,867		5.9		9,555		1.2		35,651		3.5		Net income	5,873		2.2		5,749		1.9
Net (loss) income attributable to noncontrolling interests		(5)		—		3		—		(10)		—		(3)		—
Net loss attributable to noncontrolling interests																		Net loss attributable to noncontrolling interests	(3)		—		(6)		—
Net income attributable to controlling interests and available to common shareholders	Net income attributable to controlling interests and available to common shareholders	$	5,732	2.1	%	$	20,864	5.9	%	$	9,565	1.2	%	$	35,654	3.5	%	Net income attributable to controlling interests and available to common shareholders	$	5,876	2.2	%	$	5,755	1.9	%

(1)Excludes effects of depreciation, accretion, and amortization of intangible assets of ~~$33.5~~$32.0 million and ~~$37.3~~$31.2 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $97.6 million and $112.3 million for the nine months ended September 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 operating revenues as a percentage of total revenues by ~~12.0%~~11.9% and ~~10.6%~~10.2% for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and 11.9% and 11.1% for the nine months ended September 30, 2020 and 2019,~~ respectively.

(2)Includes share-based compensation expense of ~~$5.5~~$4.0 million and ~~$5.3~~$4.6 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $15.0 million and $14.4 million~~ ~~for the nine months ended September 30, 2020 and 2019,~~ respectively.

4739

Table of Contents

Key Operating Metrics

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


		As of September 30,					As of March 31,
		2020	% Change		2019		2021	% Change		2020
Ending number of transacting ATMs(1):	Ending number of transacting ATMs(1):					Ending number of transacting ATMs(1):
North America	North America	42,766	(3.2)	%	44,162	North America	44,021	0.5	%	43,792
Europe & Africa	Europe & Africa	22,352	(6.6)	%	23,921	Europe & Africa	20,736	(9.7)	%	22,971
Australia & New Zealand	Australia & New Zealand	5,798	(18.2)	%	7,085	Australia & New Zealand	5,946	(11.3)	%	6,703
Total Company-owned(2)	Total Company-owned(2)	70,916	(5.7)	%	75,168	Total Company-owned(2)	70,703	(3.8)	%	73,466

North America	North America	12,074	(14.0)	%	14,032	North America	11,664	(12.6)	%	13,351
Europe & Africa	Europe & Africa	169	(29.0)	%	238	Europe & Africa	126	(44.7)	%	228

Total Merchant-owned	Total Merchant-owned	12,243	(14.2)	%	14,270	Total Merchant-owned	11,790	(13.2)	%	13,579

Managed Services and Processing:	Managed Services and Processing:					Managed Services and Processing:
North America	North America	187,123	(8.3)	%	204,145	North America	194,772	(0.7)	%	196,196
Europe & Africa						Europe & Africa	151	4.1	%	145
Australia & New Zealand	Australia & New Zealand	1,477	(17.9)	%	1,798	Australia & New Zealand	1,321	(21.7)	%	1,687
Total Managed services and processing(2)	Total Managed services and processing(2)	188,600	(8.4)	%	205,943	Total Managed services and processing(2)	196,244	(0.9)	%	198,028

Total ending number of transacting ATMs	Total ending number of transacting ATMs	271,759	(8.0)	%	295,381	Total ending number of transacting ATMs	278,737	(2.2)	%	285,073

(1)The ending number of transacting ATMs presented in the table above includes only those ATMs transacting during the months of ~~September 2020~~March 2021 and ~~2019.~~2020. The ~~2020 counts do not include ATMs at casinos, theme parks, malls, education facilities, tourist-focused sites~~2021 and other ATM sites that were temporarily closed during September 2020 as a result of the Pandemic. The Company estimates, that during the month of September 2020, approximately 15,000 ATMs were not transacting due to the Pandemic including approximately 3,600 ATMs, 1,600 ATMs, and 9,800 ATMs 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 and processing.~~

~~Table of~~ ~~Contents~~

Three months ended September 30, Nine Months Ended September 30,
2020 % Change 2019 2020 % Change 2019
Average number of transacting ATMs(1):

North America 42,240 (3.3) % 43,668 42,565 (1.7) % 43,316
Europe & Africa 21,848 (8.8) 23,950 22,472 (5.8) 23,861
Australia & New Zealand 5,689 (20.5) 7,155 5,823 (22.3) 7,493
Total Company-owned (2)
69,777 (6.7) 74,773 70,860 (5.1) 74,670
North America 11,799 (16.2) 14,078 11,904 (15.4) 14,077
Europe & Africa 164 n/m 269 188 (23.0) 244
Total Merchant-owned 11,963 (16.6) 14,347 12,092 (15.6) 14,321
Managed Services and Processing:
North America (3)
184,436 (9.5) 203,781 183,388 7.7 170,336
Australia & New Zealand 1,505 (16.8) 1,809 1,596 (9.0) 1,754
Total Managed services and processing (2)
185,941 (9.6) 205,590 184,984 7.5 172,090
Total average number of transacting ATMs 267,681 (9.2) 294,710 267,936 2.6 261,081
Total transactions (in thousands):
ATM operations 236,418 (22.9) 306,823 693,242 (25.0) 923,878
Managed services and processing, net 346,458 (24.7) 460,243 925,781 (14.2) 1,078,675
Total transactions (4)
582,876 (24.0) 767,066 1,619,023 (19.2) 2,002,553
Total cash withdrawal transactions (in thousands):
ATM operations (4)
153,010 (24.6) 203,061 445,645 (27.1) 611,095
Per ATM per month amounts (excludes managed services and processing):
Cash withdrawal transactions (4)
624 (17.8) 759 597 (21.7) 762
ATM operating revenues (5)
$ 996 (11.9) $ 1,130 $ 954 (12.8) $ 1,094
Cost of ATM operating revenues (5) (6)
631 (13.9) 733 644 (11.7) 729
ATM adjusted operating gross profit (5)(6)
$ 365 (8.1) % $ 397 $ 310 (15.1) % $ 365
ATM adjusted operating gross profit margin 36.6 % 35.1 % 32.5 % 33.4 %

~~(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 as a result of the Pandemic. The Company estimates, that during the month of March 2021, approximately 10,400 ATMs were not transacting due to the Pandemic including approximately 4,600 ATMs, 2,400 ATMs, and 3,400 ATMs in the Company-owned, Merchant-owned, and Managed services and processing arrangement types, respectively. In total, we estimate that the number of ATMs we service exceeds 285,000.

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

Table of Contents


	Three months ended March 31,
	2021			% Change		2020
Average number of transacting ATMs(1):
North America	43,456			(0.6)	%	43,702
Europe & Africa	20,979			(10.3)		23,376
Australia & New Zealand	5,982			(11.0)		6,725
Total Company-owned (2)	70,417			(4.6)		73,803

North America	11,285			(16.3)		13,480
Europe & Africa	145			(37.2)		231

Total Merchant-owned	11,430			(16.6)		13,711

Managed Services and Processing:
North America	189,813			(3.4)		196,561
Europe and Africa	151					145
Australia & New Zealand	1,397			(19.2)		1,728
Total Managed services and processing (2)	191,361			(3.6)		198,434

Total average number of transacting ATMs	273,208			(4.5)		285,948

Total transactions (in thousands):
ATM operations	211,639			(19.5)		263,048
Managed services and processing, net	341,993			5.7		323,544
Total transactions (3)	553,632			(5.6)		586,592

Total cash withdrawal transactions (in thousands):
ATM operations (3)	135,215			(22.0)		173,413

Per ATM per month amounts (excludes managed services and processing):
Cash withdrawal transactions (3)	551			(16.6)		661

ATM operating revenues (4)	$	935		(8.1)		$	1,017
Cost of ATM operating revenues (4) (5)	565			(18.9)		697
ATM adjusted operating gross profit (4)(5)	$	370		15.6	%	$	320

ATM adjusted operating gross profit margin	39.6		%			31.5		%

(1)The average number of transacting ATMs presented above represents an average of the ATMs transacting in the respective months of 2021 and 2020. The 2021 and 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 as a result of the Pandemic.

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

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

~~(4)~~Total transactions, total cash withdrawal transactions, and total cash withdrawal transactions per ATM per month were adversely impacted by the Pandemic, particularly in the U.K. where average transactions per ATM exceed our Company average.

~~(5)~~(4)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. The Cost of ATM operating revenues in the three ~~and nine~~ months ended ~~September 30, 2020 include~~March 31, 2021 includes business rate tax recoveries totaling ~~$11.8~~$12.0 million.

~~Table of~~ ~~Contents~~

~~(6)~~(5)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 September 30, Nine Months Ended September 30,
2020 2019 % Change 2020 2019 % Change
(In thousands, excluding percentages)
North America
ATM operating revenues $ 181,330 $ 208,595 (13.1) % $ 539,628 $ 599,177 (9.9) %
ATM product sales and other revenues 10,395 16,113 (35.5) 32,133 44,994 (28.6)
North America total revenues 191,725 224,708 (14.7) 571,761 644,171 (11.2)
Europe & Africa
ATM operating revenues 68,293 102,801 (33.6) 195,339 292,980 (33.3)
ATM product sales and other revenues 1,613 1,907 (15.4) 4,859 6,123 (20.6)
Europe & Africa total revenues 69,906 104,708 (33.2) 200,198 299,103 (33.1)
Australia & New Zealand
ATM operating revenues 19,151 24,389 (21.5) 51,551 74,906 (31.2)
ATM product sales and other revenues 70 103 (32.0) 202 414 (51.2)
Australia & New Zealand total revenues 19,221 24,492 (21.5) 51,753 75,320 (31.3)
Eliminations (1,454) (2,401) (39.4) (4,520) (7,996) (43.5)
Total ATM operating revenues 267,320 333,384 (19.8) 781,998 959,067 (18.5)
Total ATM product sales and other revenues 12,078 18,123 (33.4) 37,194 51,531 (27.8)
Total revenues $ 279,398 $ 351,507 (20.5) % $ 819,192 $ 1,010,598 (18.9) %

5041

Table of Contents

Revenues


	Three Months Ended March 31,
	2021		2020		% Change
	(In thousands, excluding percentages)
North America
ATM operating revenues	$	182,959	$	193,241	(5.3)	%
ATM product sales and other revenues	9,086		12,756		(28.8)
North America total revenues	192,045		205,997		(6.8)
Europe & Africa
ATM operating revenues	52,835		79,958		(33.9)
ATM product sales and other revenues	3,243		1,942		67.0
Europe & Africa total revenues	56,078		81,900		(31.5)
Australia & New Zealand
ATM operating revenues	19,712		20,252		(2.7)
ATM product sales and other revenues	487		105		363.8
Australia & New Zealand total revenues	20,199		20,357		(0.8)

Eliminations	(488)		(1,652)		(70.5)

Total ATM operating revenues	255,018		291,799		(12.6)
Total ATM product sales and other revenues	12,816		14,803		(13.4)
Total revenues	$	267,834	$	306,602	(12.6)	%

Table of Contents

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2019~~March 31, 2020

ATM operating revenues. ATM operating revenues, during the three months ended ~~September 30, 2020,~~March 31, 2021, decreased ~~$66.1~~$36.8 million, or ~~19.8%~~12.6%, compared to the same period of ~~2019.~~2020. Absent foreign currency exchange rate movements, ATM operating revenues would have decreased ~~$68.5~~$44.1 million or ~~20.5%~~15.1% due to the impacts of the Pandemic that resulted in lower transaction volumes. The decrease in revenue was partially offset by growth in the interchange, bank-branding and ~~surcharge free~~surcharge-free network, and managed services and processing revenues in North America.

The following table details, by segment, the changes in the various components of ATM operating ~~revenues:~~revenues for the periods indicated. As presented, certain prior year amounts have been reclassified to ensure consistency with the current year presentation and management's current views concerning the classification of revenues related to managed services and processing arrangements. The reclassified amounts previously presented as Managed services and processing revenues were reclassified as Surcharge revenues and Bank-branding and surcharge-free network revenues, respectively, in the North America segment, and amounts previously presented as Interchange revenues were reclassified as Managed services and processing revenues in the Europe & Africa and Australia & New Zealand segments. We determined that these reclassifications are not material to the previously reported financial statements.


		Three Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Change		% Change			2021		2020		Change		% Change
		(In thousands, excluding percentages)									(In thousands, excluding percentages)
North America	North America									North America
Surcharge revenues	Surcharge revenues	$	69,120	$	90,148	$	(21,028)	(23.3)	%	Surcharge revenues	$	61,452	$	81,977	$	(20,525)	(25.0)	%
Interchange revenues	Interchange revenues	30,903		35,289		(4,386)		(12.4)		Interchange revenues	32,160		31,610		550		1.7
Bank-branding and surcharge-free network revenues	Bank-branding and surcharge-free network revenues	56,272		52,112		4,160		8.0		Bank-branding and surcharge-free network revenues	61,309		54,538		6,771		12.4
Managed services and processing revenues	Managed services and processing revenues	25,035		31,046		(6,011)		(19.4)		Managed services and processing revenues	28,038		25,116		2,922		11.6

North America total ATM operating revenues	North America total ATM operating revenues	181,330		208,595		(27,265)		(13.1)		North America total ATM operating revenues	182,959		193,241		(10,282)		(5.3)
Europe & Africa	Europe & Africa									Europe & Africa
Surcharge revenues	Surcharge revenues	27,188		48,652		(21,464)		(44.1)		Surcharge revenues	16,734		32,596		(15,862)		(48.7)
Interchange revenues	Interchange revenues	39,151		51,631		(12,480)		(24.2)		Interchange revenues	34,135		44,825		(10,690)		(23.8)
Bank-branding and surcharge-free network revenues	Bank-branding and surcharge-free network revenues	397		238		159		66.8		Bank-branding and surcharge-free network revenues	280		347		(67)		(19.3)
Managed services and processing revenues	Managed services and processing revenues	1,557		2,280		(723)		(31.7)		Managed services and processing revenues	1,686		2,190		(504)		(23.0)
Europe & Africa total ATM operating revenues	Europe & Africa total ATM operating revenues	68,293		102,801		(34,508)		(33.6)		Europe & Africa total ATM operating revenues	52,835		79,958		(27,123)		(33.9)
Australia & New Zealand	Australia & New Zealand									Australia & New Zealand
Surcharge revenues	Surcharge revenues	14,720		19,603		(4,883)		(24.9)		Surcharge revenues	15,203		15,945		(742)		(4.7)
Interchange revenues		832		1,056		(224)		(21.2)

Managed services and processing revenues	Managed services and processing revenues	3,599		3,730		(131)		(3.5)		Managed services and processing revenues	4,509		4,307		202		4.7

Australia & New Zealand total ATM operating revenues	Australia & New Zealand total ATM operating revenues	19,151		24,389		(5,238)		(21.5)		Australia & New Zealand total ATM operating revenues	19,712		20,252		(540)		(2.7)
Eliminations	Eliminations	(1,454)		(2,401)		947		(39.4)		Eliminations	(488)		(1,652)		1,164		(70.5)
Total ATM operating revenues	Total ATM operating revenues	$	267,320	$	333,384	$	(66,064)	(19.8)	%	Total ATM operating revenues	$	255,018	$	291,799	$	(36,781)	(12.6)	%

North America. For the three months ended ~~September 30, 2020,~~March 31, 2021, ATM operating revenues in our North America segment decreased ~~$27.3~~$10.3 million, or ~~13.1%~~5.3%, compared to the same period of ~~2019~~2020 due to the impacts of the Pandemicthat resulted in lower transaction volumes driving lower surcharge ~~and interchange revenues as well as lower managed services and processing~~ revenues. The decrease in total revenues was partially offset by growth in ~~the~~ bank-branding and surcharge free network revenues in ~~North America,~~the U.S., driven by ~~the addition of new branding arrangements~~ ~~and additional revenue~~growth from our Allpoint Network. The additional volume on our Allpoint Network also drove an increase in. interchange revenue. The decrease in total revenue was also partially offset by an increase in our managed services and processing revenues in the U.S., driven by new outsourcing arrangements with both financial institution and retail customers.

Europe & Africa. For the three months ended ~~September 30, 2020,~~March 31, 2021, ATM operating revenues in our Europe & Africa segment decreased ~~$34.5~~$27.1 million, or ~~33.6%~~33.9% compared to the same period of ~~2019.~~ 2020. Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased by ~~$36.6~~$30.7 million, or ~~35.6%~~38.4%, primarily due to the impacts of the Pandemic that resulted in lower transaction volumes driving lower surcharge and interchange ~~revenues~~revenues as well as lower managed services and processing revenues. The lower surcharge revenues were also impacted by travel restrictions associated with the Pandemic, which resulted in a decrease in dynamic currency conversion revenues (recognized within surcharge revenues) ~~of approximately~~ ~~$10.4 million.~~ ~~These declines were partially offset by an increase in revenues in South Africa attributable to an increase in the number of transacting ATMs.~~

~~Australia & New Zealand.~~ For the three months ended September 30, 2020, ATM operating revenues in our Australia & New Zealand segment decreased $5.2 million, or 21.5%, compared to the same period of 2019. Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased by $6.0 million, or 24.5%, 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.

~~ATM product sales and other revenues~~. For the three months ended September 30, 2020, ATM product sales and other revenues decreased $6.0 million, or 33.4%, compared to the same period of 2019. The decrease was primarily related to lower equipment sales in the U.S.

~~Table of~~ ~~Contents~~

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

~~Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019~~

~~ATM operating revenues.~~ ATM operating revenues, during the nine months ended September 30, 2020, decreased $177.1 million, or 18.5%, compared to the same period of 2019. Absent foreign currency exchange rate movements, ATM operating revenues would have decreased $172.3 million or 18.0% 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:~~

Nine Months Ended September 30,
2020 2019 Change % Change
(In thousands, excluding percentages)
North America
Surcharge revenues $ 212,359 $ 263,492 $ (51,133) (19.4) %
Interchange revenues 90,298 103,954 (13,656) (13.1)
Bank-branding and surcharge-free network revenues 162,514 146,523 15,991 10.9
Managed services and transaction processing revenues 74,457 85,208 (10,751) (12.6)
North America total ATM operating revenues 539,628 599,177 (59,549) (9.9)
Europe & Africa
Surcharge revenues 77,256 124,124 (46,868) (37.8)
Interchange revenues 112,514 161,362 (48,848) (30.3)
Bank-branding and surcharge-free network revenues 1,102 721 381 52.8
Managed services and processing revenues 4,467 6,773 (2,306) (34.0)
Europe & Africa total ATM operating revenues 195,339 292,980 (97,641) (33.3)
Australia & New Zealand
Surcharge revenues 39,008 60,047 (21,039) (35.0)
Interchange revenues 2,299 3,557 (1,258) (35.4)
Managed services and transaction processing revenues 10,244 11,302 (1,058) (9.4)
Australia & New Zealand total ATM operating revenues 51,551 74,906 (23,355) (31.2)
Eliminations (4,520) (7,996) 3,476 (43.5)
Total ATM operating revenues $ 781,998 $ 959,067 $ (177,069) (18.5) %

~~North America.~~ For the nine months ended September 30, 2020, ATM operating revenues in our North America segment decreased $59.5 million, or 9.9%, 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 additional revenue from our Allpoint Network.~~

~~Europe & Africa.~~ ~~For the nine months ended September 30, 2020, ATM operating revenues in our Europe & Africa segment decreased $97.6 million, or 33.3%, compared to the same period of 2019, 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 resulted in a decrease in dynamic currency conversion revenues (recognized within surcharge revenues) of approximately $19.6 million. Foreign currency exchange rate movements had an insignificant impact on results during the period. The decline was partially offset by an increase in revenues in South Africa attributable to an increase in the number of transacting ~~ATMs.~~ATMs and additional transactions per ATM.

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Australia & New Zealand. For the ~~nine months~~three months ended ~~September 30, 2020,~~March 31, 2021, ATM operating revenues in our Australia & New Zealand segment decreased ~~$23.4~~$0.5 million, or ~~31.2%~~2.7%, compared to the same period of ~~2019. Ab~~2020. ~~sent~~Absent the foreign currency exchange rate movements, our ATM operating revenues would have decreased ~~21.8~~by $3.4 million, or 17.0%, pr~~29.1% primarily~~imarily due to a reduction in the number of transacting ATMs and the impacts of the Pandemic ~~that~~that resulted in lower transaction volumes driving lower surcharge ~~and interchange~~ revenues as well as lower managed services and processing ~~revenues.~~revenues on a constant currency basis.

ATM product sales and other revenues. For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, ATM product sales and other revenues decreased ~~$14.3~~$2.0 million, or ~~27.8%~~13.4%, compared to the same period of ~~2019.~~2020. The decrease was primarily related to lower equipment sales in the U.S. ~~and lower ATM servicing fees in~~as a result of the ~~U.K.~~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 September 30,						Nine Months Ended September 30,								Three Months Ended March 31,
		2020		2019		% Change		2020		2019		% Change				2021		2020		% Change
		(In thousands, excluding percentages)												(In thousands, excluding percentages)
North America	North America														North America
Cost of ATM operating revenues	Cost of ATM operating revenues	$	120,292	$	134,313	(10.4)	%	$	360,976	$	391,588	(7.8)	%		Cost of ATM operating revenues	$	113,368	$	128,838	(12.0)	%
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	7,113		13,902		(48.8)		25,496		37,699		(32.4)			Cost of ATM product sales and other revenues	6,809		11,065		(38.5)
North America total cost of revenue	North America total cost of revenue	127,405		148,215		(14.0)		386,472		429,287		(10.0)			North America total cost of revenue	120,177		139,903		(14.1)
Europe & Africa	Europe & Africa														Europe & Africa
Cost of ATM operating revenues	Cost of ATM operating revenues	32,221		59,656		(46.0)		115,647		184,752		(37.4)			Cost of ATM operating revenues	23,869		51,790		(53.9)
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	594		821		(27.6)		1,614		2,677		(39.7)			Cost of ATM product sales and other revenues	1,506		844		78.4
Europe & Africa total cost of revenues	Europe & Africa total cost of revenues	32,815		60,477		(45.7)		117,261		187,429		(37.4)			Europe & Africa total cost of revenues	25,375		52,634		(51.8)
Australia & New Zealand	Australia & New Zealand														Australia & New Zealand
Cost of ATM operating revenues	Cost of ATM operating revenues	13,816		17,065		(19.0)		36,757		53,768		(31.6)			Cost of ATM operating revenues	13,832		14,093		(1.9)
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	135		199		(32.2)		412		772		(46.6)			Cost of ATM product sales and other revenues	481		183		162.8
Australia & New Zealand total cost of revenues	Australia & New Zealand total cost of revenues	13,951		17,264		(19.2)		37,169		54,540		(31.9)			Australia & New Zealand total cost of revenues	14,313		14,276		0.3
Corporate total cost of revenues	Corporate total cost of revenues	390		368		6.0		1,154		995		16.0			Corporate total cost of revenues	222		561		(60.4)

Eliminations	Eliminations	(1,454)		(2,542)		(42.8)		(4,520)		(8,004)		(43.5)			Eliminations	(488)		(1,652)		(70.5)

Cost of ATM operating revenues	Cost of ATM operating revenues	165,265		208,860		(20.9)		510,014		623,099		(18.1)			Cost of ATM operating revenues	150,803		193,630		(22.1)
Cost of ATM product sales and other revenues	Cost of ATM product sales and other revenues	7,842		14,922		(47.4)		27,522		41,148		(33.1)			Cost of ATM product sales and other revenues	8,796		12,092		(27.3)
Total cost of revenues	Total cost of revenues	$	173,107	$	223,782	(22.6)	%	$	537,536	$	664,247	(19.1)	%		Total cost of revenues	$	159,599	$	205,722	(22.4)	%

~~Table of~~ ~~Contents~~

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2019~~March 31, 2020

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 ~~September 30, 2020~~March 31, 2021 decreased ~~$43.6~~$42.8 million, or ~~20.9%~~22.1%, compared to the same period of ~~2019. Absent~~2020. These results include unfavorable foreign currency exchange rate movements ~~our Cost~~ of ~~ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) decreased~~$4.4 million ~~$44.7 million, or 21.4%~~. 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 that primarily resulted in lower merchant commissions, vault cash rental fees, transaction processing, and other operating costs across all of our ~~segments related~~segments. In addition, in response to ~~our~~the Pandemic, cost reduction initiatives were implemented that included workforce reductions and restructuring ~~activities and workforce reductions.~~activities. The decrease in Cost of ATM operating revenues is also attributable to the recovery of previously paid business rate taxes in the U.K., discussed below.

Table of Contents

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 September 30,
2020 2019 Change % Change
(In thousands, excluding percentages)
North America
Merchant commissions $ 54,568 $ 66,620 $ (12,052) (18.1) %
Vault cash rental 11,040 11,981 (941) (7.9)
Other costs of cash 16,091 15,577 514 3.3
Repairs and maintenance 14,887 13,409 1,478 11.0
Communications 3,396 3,445 (49) (1.4)
Transaction processing 1,227 2,695 (1,468) (54.5)
Employee costs 8,282 7,914 368 4.6
Other expenses 10,801 12,672 (1,871) (14.8)
North America total cost of ATM operating revenues 120,292 134,313 (14,021) (10.4)
Europe & Africa
Merchant commissions 15,086 23,962 (8,876) (37.0)
Vault cash rental 3,211 3,685 (474) (12.9)
Other costs of cash 4,968 4,921 47 1.0
Repairs and maintenance 2,798 3,347 (549) (16.4)
Communications 2,623 2,699 (76) (2.8)
Transaction processing 3,733 5,678 (1,945) (34.3)
Employee costs 8,029 10,187 (2,158) (21.2)
Other expenses (8,227) 5,177 (13,404) (258.9)
Europe & Africa total cost of ATM operating revenues 32,221 59,656 (27,435) (46.0)
Australia & New Zealand
Merchant commissions 7,226 9,629 (2,403) (25.0)
Vault cash rental 1,193 1,568 (375) (23.9)
Other costs of cash 1,240 1,537 (297) (19.3)
Repairs and maintenance 1,632 1,616 16 1.0
Communications 461 610 (149) (24.4)
Transaction processing 482 577 (95) (16.5)
Employee costs 1,134 1,105 29 2.6
Other expenses 448 423 25 5.9
Australia & New Zealand total cost of ATM operating revenues 13,816 17,065 (3,249) (19.0)
Corporate 390 368 22 6.0
Eliminations (1,454) (2,542) 1,088 (42.8)
Total cost of ATM operating revenues $ 165,265 $ 208,860 $ (43,595) (20.9) %

~~Table of~~ ~~Contents~~



	Three Months Ended March 31,
	2021		2020		Change		% Change
	(In thousands, excluding percentages)
North America
Merchant commissions	$	46,216	$	60,811	$	(14,595)	(24.0)	%
Vault cash rental	11,006		11,314		(308)		(2.7)
Other costs of cash	17,522		16,054		1,468		9.1
Repairs and maintenance	14,606		13,473		1,133		8.4
Communications	3,318		3,424		(106)		(3.1)
Transaction processing	1,250		1,731		(481)		(27.8)
Employee costs	8,775		8,730		45		0.5
Other expenses	10,675		13,301		(2,626)		(19.7)
North America total cost of ATM operating revenues	113,368		128,838		(15,470)		(12.0)
Europe & Africa
Merchant commissions	11,790		19,311		(7,521)		(38.9)
Vault cash rental	2,989		3,525		(536)		(15.2)
Other costs of cash	2,905		4,724		(1,819)		(38.5)
Repairs and maintenance	2,413		3,178		(765)		(24.1)
Communications	2,716		2,613		103		3.9
Transaction processing	1,452		3,945		(2,493)		(63.2)
Employee costs	8,130		9,217		(1,087)		(11.8)
Other expenses	(8,526)		5,277		(13,803)		(261.6)
Europe & Africa total cost of ATM operating revenues	23,869		51,790		(27,921)		(53.9)
Australia & New Zealand
Merchant commissions	7,505		7,512		(7)		(0.1)
Vault cash rental	848		1,306		(458)		(35.1)
Other costs of cash	1,316		1,240		76		6.1
Repairs and maintenance	1,829		1,631		198		12.1
Communications	475		418		57		13.6
Transaction processing	242		612		(370)		(60.5)
Employee costs	1,189		923		266		28.8
Other expenses	428		451		(23)		(5.1)
Australia & New Zealand total cost of ATM operating revenues	13,832		14,093		(261)		(1.9)
Corporate	222		561		(339)		(60.4)
Eliminations	(488)		(1,652)		1,164		(70.5)
Total cost of ATM operating revenues	$	150,803	$	193,630	$	(42,827)	(22.1)	%

North America. For the three months ended ~~September 30, 2020,~~March 31, 2021, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) in our North America segment decreased ~~$14.0~~$15.5 million, or ~~10.4%~~12.0%, compared to the same period of ~~2019.~~2020. This decline was primarily due to the Pandemic that resulted in lower transaction volumes driving lower merchant commissions, vault cash rental fees, transaction processing costs and other operating costs. ~~The decrease was also due to lower operating costs resulting from our restructuring activities implemented during the second quarter of 2020~~. The decrease was partially offset by an increase in ~~other cost~~Other costs of cash primarily related to higher ~~armored~~cash-in-transit costs to ensure cash availability ~~and~~in the U.S. Also offsetting the decline were higher repair and maintenance costs driven by an increase in ~~company-owned~~Company-owned ATMs utilizing third-party maintenance, including an increase in the number of full function ATMs.

Table of Contents

Europe & Africa. For the three months ended ~~September 30, 2020,~~March 31, 2021, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Europe & Africa segment decreased by ~~$27.4~~$27.9 million, or ~~46.0%~~53.9%, compared to the same period of ~~2019. Excluding~~2020, including a $1.7 million unfavorable impact of foreign currency exchange rate ~~movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) decreased $28.3 million or 47.4%. This~~movements. This decrease was primarily due to the Pandemic that resulted in lower transaction volumes driving lower merchant commissions,transaction processing costs, vault ~~cash~~cash rental fees and other operating ~~costs. T~~costshe. The decrease was also due to the closure of certain cash management ~~facilities~~ and ~~related workforce reductions~~office facilities as part of our restructuring ~~activities.~~activities, primarily in the U.K., and lower employee costs due to workforce reductions partially in response to the Pandemic. In addition, in May 2020, the U.K. Supreme Court eliminated our obligation to pay business rate taxes to certain local authorities that resulted in net cash recoveries of~~$11.8~~ $12.0 million related to previous periods, which is reflected as a cost reduction in the Other expenses line within the Cost of ATM operating revenues, as well as the ongoing reduction in business rate tax expense during the three months ended ~~September 30, 2020,~~March 31, 2021, compared to the same period of ~~2019.~~2020.

Australia & New Zealand. For the three months ended ~~September 30, 2020,~~March 31, 2021, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Australia & New Zealand segment decreased ~~$3.2~~$0.3 million, or ~~19.0%~~1.9%, compared to the same period of ~~2019. Excluding~~2020, including a $2.0 million unfavorable impact of foreign currency exchange rate ~~movements, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) decreased $3.8 million or 22.1%. This~~movements. The decline was primarily due to the effects of the Pandemic ~~that resulted in~~including lower transaction volumes driving lower merchant commissions, vault cash rental fees, ~~armored car~~cash-in-transit services and other operating costs.

Cost of ATM product sales and other revenues. For the three months ended ~~September 30, 2020,~~March 31, 2021, our cost of ATM product sales and other revenues decreased ~~47.4%~~27.3% from the same period of ~~2019.~~2020. The decrease was primarily related to lower equipment sales in the ~~U.S.~~

~~Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019~~

~~Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets).~~U.S Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) during the nine months ended September 30, 2020 decreased $113.1 million, or 18.1%, 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 ~~$109.3 million, or 17.5%~~. 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, workforce reductions and restructuring activities. The decrease is also attributable to the recovery of previously paid business rate taxes in the U.K., discussed below.

~~Table of~~ ~~Contents~~

~~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):~~

Nine Months Ended September 30,
2020 2019 Change % Change
(In thousands, excluding percentages)
North America
Merchant commissions $ 165,970 $ 192,098 $ (26,128) (13.6) %
Vault cash rental 32,912 36,729 (3,817) (10.4)
Other costs of cash 50,926 46,375 4,551 9.8
Repairs and maintenance 40,520 39,160 1,360 3.5
Communications 10,036 9,897 139 1.4
Transaction processing 4,119 6,449 (2,330) (36.1)
Employee costs 22,839 23,496 (657) (2.8)
Other expenses 33,654 37,384 (3,730) (10.0)
North America total cost of ATM operating revenues 360,976 391,588 (30,612) (7.8)
Europe & Africa
Merchant commissions 45,580 71,572 (25,992) (36.3)
Vault cash rental 9,402 11,117 (1,715) (15.4)
Other costs of cash 13,334 17,183 (3,849) (22.4)
Repairs and maintenance 8,003 10,816 (2,813) (26.0)
Communications 7,795 8,580 (785) (9.1)
Transaction processing 10,849 16,818 (5,969) (35.5)
Employee costs 23,134 31,936 (8,802) (27.6)
Other expenses (2,450) 16,730 (19,180) (114.6)
Europe & Africa total cost of ATM operating revenues 115,647 184,752 (69,105) (37.4)
Australia & New Zealand
Merchant commissions 18,149 29,527 (11,378) (38.5)
Vault cash rental 3,497 5,324 (1,827) (34.3)
Other costs of cash 3,591 5,086 (1,495) (29.4)
Repairs and maintenance 4,563 5,404 (841) (15.6)
Communications 1,270 2,011 (741) (36.8)
Transaction processing 1,579 1,573 6 0.4
Employee costs 2,809 3,447 (638) (18.5)
Other expenses 1,299 1,396 (97) (6.9)
Australia & New Zealand total cost of ATM operating revenues 36,757 53,768 (17,011) (31.6)
Corporate 1,154 995 159 16.0
Eliminations (4,520) (8,004) 3,484 (43.5)
Total cost of ATM operating revenues $ 510,014 $ 623,099 $ (113,085) (18.1) %

~~North America.~~ For the nine months ended September 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets) in our North America segment decreased $30.6 million, or 7.8%, 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 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 as well as higher repair and maintenance costs driven by an increase in company-owned ATMs utilizing third-party maintenance, including an increase in the number of full function ATMs.

~~Table of~~ ~~Contents~~

~~Europe & Africa.~~ For the nine months ended September 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Europe & Africa segment decreased by $69.1 million, or 37.4%, 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 ~~$67.5 million or 36.5%.~~ This decrease 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 the closure of certain cash management facilities as part of our restructuring activities and lower employee costs due to workforce reductions and the temporary salary reductions implemented during the second quarter of 2020. In addition, in May 2020, the U.K. Supreme Court eliminated our obligation to pay business rate taxes to certain local authorities that resulted in net cash recoveries of ~~$11.8 million~~ related to previous periods, which is reflected as a cost reduction in the Other expenses line within the Cost of ATM operating revenues. Our results for the nine months ended September 30, 2020 also reflect the $3.7 million reversal of previously accrued obligations to pay business rate taxes as well as the ongoing reduction in business rate tax expense, compared to the same period of 2019.

~~Australia & New Zealand.~~ For the nine months ended September 30, 2020, our cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangibles assets) in our Australia & New Zealand segment decreased $17.0 million, or 31.6%, 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 ~~$15.9 million or 29.6%.~~ ~~This decline was primarily due to the Pandemic that resulted in lower transaction volumes dri~~ving 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 during the second quarter of 2020 in response to the Pandemic.

~~Cost of ATM product sales and other revenues.~~ For the nine months ended September 30, 2020, our cost of ATM product sales and other revenues decreased 33.1% compared to the same period of 2019. The decrease was primarily related to lower equipment sales in the U.S. as a result of the Pandemic.

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

Selling, General, and Administrative Expenses


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,

		2020			2019			% Change		2020			2019			% Change			2021			2020			% Change
		(In thousands, excluding percentages)																	(In thousands, excluding percentages)
Selling, general, and administrative expenses	Selling, general, and administrative expenses	$	34,843		$	40,991		(15.0)	%	$	100,627		$	117,539		(14.4)	%	Selling, general, and administrative expenses	$	38,909		$	37,730		3.1	%
Share-based compensation expense	Share-based compensation expense	5,530			5,266			5.0		14,982			14,373			4.2		Share-based compensation expense	4,000			4,648			(13.9)
Total selling, general, and administrative expenses	Total selling, general, and administrative expenses	$	40,373		$	46,257		(12.7)	%	$	115,609		$	131,912		(12.4)	%	Total selling, general, and administrative expenses	$	42,909		$	42,378		1.3	%

Percentage of total revenues:	Percentage of total revenues:																	Percentage of total revenues:
Selling, general, and administrative expenses	Selling, general, and administrative expenses	12.5		%	11.7		%			12.3		%	11.6		%			Selling, general, and administrative expenses	14.5		%	12.3		%
Share-based compensation expense	Share-based compensation expense	1.9			1.5					1.8			1.4					Share-based compensation expense	1.5			1.5
Total selling, general, and administrative expenses	Total selling, general, and administrative expenses	14.4		%	13.2		%			14.1		%	13.1		%			Total selling, general, and administrative expenses	16.0		%	13.8		%

Selling, general, and administrative expenses (“SG&A expenses”), excluding share-based compensation expense. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, SG&A expenses, excluding share-based compensation expense, ~~decreased $6.1~~increased $1.2 million, or ~~15.0%~~3.1%, ~~and 16.9 million, or 14.4%, respectively,~~ compared to the same period of ~~2019. These decreases were~~2020. This increase was primarily a result of ~~lower employee~~pandemic impacted compensation costs ~~due to temporary salary reductions during~~in the ~~three months ended June 30, 2020,~~prior year partially offset by restructuring activities ~~and lower incentive compensation costs~~ as well as lower professional fees and other cost reductions implemented as a result of the Pandemic.

Share-based compensation expense. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, share-based compensation expense ~~increased $0.3 million and~~decreased $0.6 million, ~~respectively,~~or 13.9%, compared to the same period of ~~2019~~2020 as a result of the amount, timing and terms of share-based payment awards granted during the respective 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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Table of Contents

Restructuring Expenses

~~For the three and~~ ~~nine~~ ~~months ended September 30,~~During 2020, we ~~continued~~implemented certain ~~corporate reorganization and~~ cost reduction initiatives ~~that began in 2019. In addition, we implemented additional~~intended to improve the Company's cost ~~reduction measures during the nine months ended September 30, 2020~~structure and operating efficiency partly in response to ~~the impacts of~~ the Pandemic. During the three ~~and nine~~ months ended ~~September~~March ~~30,~~31, 2021 and 2020, we incurred $~~2.0~~1.7 million and ~~$6.6~~$1.2 million, respectively, of pre-tax expenses related to these restructuring activities that primarily included facility closures, workforce reductions, professional fees and other related charges. The facility closures and related workforce reductions during the three months ended March 31, 2021 and 2020, respectively, primarily occurred in the U.K. related to reducing the number of facilities associated with cash delivery operations.

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

Acquisition RelatedExpenses

We incurred legal and professional fees and certain other administrative expenses totaling $1.4 million during the three months ending March 31, 2021 in connection with the proposed acquisition of the Company by NCR. For additional information related to the proposed acquisition, see Recent Trends and Events - Proposed Transaction with NCR, above.

Depreciation and Accretion Expense


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,

		2020		2019		% Change		2020		2019		% Change			2021			2020			% Change
		(In thousands, excluding percentages)													(In thousands, excluding percentages)
Depreciation and accretion expense	Depreciation and accretion expense	$33,063		$33,466		(1.2)	%	$97,346		$99,644		(2.3)	%	Depreciation and accretion expense	$	32,285		$	32,211		0.2	%

Percentage of total revenues	Percentage of total revenues	11.8	%	9.5	%			11.9	%	9.9	%			Percentage of total revenues	12.1		%	10.5		%

Depreciation and accretion expense. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, depreciation and accretion expense ~~decreased $0.4~~increased $0.1 million or ~~1.2%~~0.2%, ~~and $2.3 million, or 2.3%, respectively,~~ compared to the same periods of ~~2019~~2020 due to the amount and timing of capital additions in the ordinary course of business and the fluctuation in foreign currency exchange rates.

Amortization of Intangible Assets


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,

		2020			2019			% Change		2020			2019			% Change			2021			2020			% Change
		(In thousands, excluding percentages)																	(In thousands, excluding percentages)
Amortization of intangible assets	Amortization of intangible assets	$	7,900		$	12,404		(36.3)	%	$	25,162		$	37,407		(32.7)	%	Amortization of intangible assets	$	6,086		$	8,413		(27.7)	%

Percentage of total revenues	Percentage of total revenues	2.8		%	3.5		%			3.1		%	3.7		%			Percentage of total revenues	2.3		%	2.7		%

Amortization of intangible assets. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, amortization of intangible assets decreased by ~~$4.5~~$2.3 million, or ~~36.3%~~27.7%, ~~and $12.2 million or 32.7%~~ compared to the same period of ~~2019~~2020 primarily due to the timing of certain intangible assets becoming fully amortized.

Loss on Disposal and Impairment of Assets


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,

		2020			2019			% Change		2020			2019			% Change			2021			2020			% Change
		(In thousands, excluding percentages)																	(In thousands, excluding percentages)
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	$	814		$	637		27.8	%	$	1,847		$	3,101		(40.4)	%	Loss on disposal and impairment of assets	$	353		$	921		(61.7)	%

Percentage of total revenues	Percentage of total revenues	0.3		%	0.2		%			0.2		%	0.3		%			Percentage of total revenues	0.1		%	0.3		%

Loss on disposal and impairment of assets. The losses recognized during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ primarily related to the disposal of ATM assets and related ATM parts in the normal course of business.

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Interest Expense, net


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,

		2020		2019		% Change		2020		2019		% Change			2021			2020			% Change
		(In thousands, excluding percentages)													(In thousands, excluding percentages)
Interest expense, net	Interest expense, net	$11,132		$6,751		64.9	%	$26,362		$20,265		30.1	%	Interest expense, net	$	10,761		$	6,421		67.6	%

Percentage of total revenues	Percentage of total revenues	4.0	%	1.9	%			3.2	%	2.0	%			Percentage of total revenues	4.0		%	2.1		%

Interest expense, net. For the three months ~~and nine months~~ ended ~~September 30, 2020,~~March 31, 2021, Interest expense, net, increased ~~$4.4~~$4.3 million, or ~~64.9%~~67.6%, ~~and $6.1 million, or 30.1%, respectively,~~ compared to the same period of ~~2019.~~2020. This increase was primarily attributable to interest on the $500 million term loan facility entered into in June 2020 ("Term Loan"), partially offset by the repurchase and ~~cancellation of a portion~~repayment of our 1% convertible senior notes ("Convertible Notes") ~~and a comparatively~~in the second half of 2020. The increase was also partially offset by lower ~~average outstanding debt balance~~interest expense on ~~our~~the revolving credit facility, ~~during the respective periods.~~ which was fully repaid in June 2020.

For additional information related to our outstanding borrowings, see Item 1. Financial Statements, Note 9. Current and Long-Term Debt.

Other ~~income~~Expenses, net

During the ~~three and~~ ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, ~~we realized a~~our Other expenses, net ~~gain in the Other income line in the Consolidated Statements~~ of ~~Operations of $7.1~~$2.8 million ~~and $9.7 million, respe~~were ~~ctively,~~ primarily attributable to foreign currency remeasurement adjustments and other non-operating costs. During the three months ended March 31, 2020, we recognized a gain of $4.1 million in Other expenses, net ~~gain in terminating derivative contracts and the reduction in~~to revise the estimated fair value of the acquisition related contingent consideration ~~liability, partially~~liability. This gain was entirely offset by foreign currency translation losses and other non-operating ~~costs.~~costs totaling $7.9 million.

Income Tax Expense (Benefit)


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,

		2020	2019	% Change		2020	2019	% Change		2021			2020			% Change
		(In thousands, excluding percentages)								(In thousands, excluding percentages)
Income tax expense (benefit)	Income tax expense (benefit)	$10,049	$4,086	145.9	%	$(4,375)	$10,780	n/m	Income tax expense (benefit)	$	2,951		$	(3,737)		(179.0)	%

Effective tax rate	Effective tax rate	63.7%	16.4%			(84.5)%	23.2%		Effective tax rate	33.4		%	(185.7)		%

Income tax expense (benefit). Our income tax expense for the three months ended ~~September 30, 2020~~March 31, 2021 totaled ~~$10.0~~$3.0 million resulting in an effective tax rate of ~~63.7%~~33.4%, compared to ~~an expense~~a benefit of ~~$4.1~~$3.7 million, and an effective tax rate of ~~16.4%~~(185.7)%, for the same period of 2019. The Company’s income tax benefit for the nine months ended September 30, 2020 totaled $4.4 million resulting in an effective tax rate of (84.5)%, compared to an expense of $10.8 million, and an effective tax rate of 23.2%, for the same period of 2019.2020.

The ~~increase~~increase in tax expense for the three months ended ~~September 30, 2020, compared to the same period of 2019,~~March 31, 2021 was primarily attributable to the ~~mix of earnings across our jurisdictions including increased losses incurred in countries where we realize no tax benefit. The decrease~~higher pre-tax profits recognized in the current period, without an offset from any non-recurring tax ~~expense for the nine months ended September 30, 2020, compared to~~benefits, as was recognized in the same period of ~~2019,~~2020. The benefit recognized for the three months ended March 31, 2020 was primarily attributable to ~~lower pre-tax income incurred during the nine months ended September 30, 2020 and to~~ a non-recurring benefit 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 that 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 since the Company incurred net operating losses in 2018, the Company carried back these 2018 losses to prior periods to receive refunds of taxes paid at higher rates in earlier periods.March 2020.

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, d~~uring the three and nine months ended September 30, 2020,~~ the Pandemic has had a significant impact on our operating results during the three months ended March 31, 2021, and continues to have an impact on our operating results.

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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 $2.4~~approximately $7.7 million ~~and higher by approximately $5.1 million, respectively, during~~during the three ~~and~~ ~~nine~~months ended ~~September 30, 2020.~~March 31, 2021.

Please see the Form 10-K for the year ended December 31, ~~2019,~~2020, for discussion of developing trends and recent events with relevance to the business.

~~Long-Term~~

Strategic Outlook

Over the past several years, we have expanded our operations and ~~the~~our ATMs’ capabilities and service offerings ~~of our ATMs~~ through strategic acquisitions and ~~investments,~~investments. We have continued to deploy ATMs in high-traffic locations under contracts with well-known ~~retailers, and~~retailers. We have expanded through the growth of Allpoint, our ~~retail based~~retail-based surcharge-free ATM network, and our bank-branding programs. We have recently seen increased demand from financial institutions of all sizes ~~as they~~to 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~~due to increasing interest from financial institutions ~~for the outsourcing of~~to outsource ATM-related services due to our cost efficiency advantages and higher service levels.

We ~~will~~aim to 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~~for cash-based transactions. We see opportunities to expand our operations ~~through the following efforts:~~by:

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

•working with financial technology companies with a primary focus on the retail consumer finance business (or ~~“Fintechs”~~“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~~expanding 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~~2020 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 Net Income, Adjusted Tax Rate, Adjusted Net Income per diluted share, Adjusted Net Cash Provided by Operating Activities, 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. In addition, we present Net Debt as a measure of our financial condition. 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, financial condition 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 prepared in accordance with U.S. GAAP. 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 and Adjusted EBITDA

EBITDA adds net interest expense, income tax expense, ~~(benefit),~~ depreciation and accretion, amortization of deferred financing costs and note discounts, amortization of intangible assets, and certain costs not anticipated to occur in future periods to net income. Adjusted EBITDA 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), 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 our industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired.

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, deferred financing costs and note discounts, 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 ~~19.8% and 19.1%~~27.1% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 and ~~23.7%~~23.6% ~~and 23.4%~~ for the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, respectively. The non-GAAP tax rates represent the U.S. GAAP tax rate for the period as adjusted by the estimated tax impact of the items adjusted from the ~~measure.~~measure and excluding non-recurring impacts of tax rate changes and valuation allowances. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding.

Adjusted Net Cash Provided by Operating Activities and Adjusted Free Cash Flow

Adjusted Net Cash Provided by Operating Activities is defined as net cash provided by operating activities less the impact of changes in restricted cash due to the timing of payments of restricted cash liabilities.

Adjusted Free Cash Flow is defined as Adjusted Net Cash Provided by Operating Activities 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 financing activities and other non-discretionary cash requirements such as mandatory principal payments on portions of our long-term debt.

Net Debt

Net Debt represents the principal amount of current and long-term debt outstanding less cash and cash equivalents. The carrying value of current and long-term debt is reconciled to the principal amount by adding the unamortized debt issuance costs and discounts.

Constant Currency

Management calculates certain U.S. 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 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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Net income attributable to controlling interests and available to common shareholders	Net income attributable to controlling interests and available to common shareholders	$	5,732	$	20,864	$	9,565	$	35,654	Net income attributable to controlling interests and available to common shareholders	$	5,876	$	5,755
Adjustments:	Adjustments:									Adjustments:
Interest expense, net	Interest expense, net	11,132		6,751		26,362		20,265		Interest expense, net	10,761		6,421
Amortization of deferred financing costs and note discount	Amortization of deferred financing costs and note discount	2,341		3,377		10,226		9,999		Amortization of deferred financing costs and note discount	1,043		3,486
Loss on extinguishment of convertible notes		—		—		3,018		—

Income tax expense (benefit)	Income tax expense (benefit)	10,049		4,086		(4,375)		10,780		Income tax expense (benefit)	2,951		(3,737)
Depreciation and accretion expense	Depreciation and accretion expense	33,063		33,466		97,346		99,644		Depreciation and accretion expense	32,285		32,211
Amortization of intangible assets	Amortization of intangible assets	7,900		12,404		25,162		37,407		Amortization of intangible assets	6,086		8,413
EBITDA	EBITDA	70,217		80,948		167,304		213,749		EBITDA	59,002		52,549

Add back:	Add back:									Add back:
Loss on disposal and impairment of assets	Loss on disposal and impairment of assets	814		637		1,847		3,101		Loss on disposal and impairment of assets	353		921
Other income (1)		(7,116)		(3,703)		(9,651)		(9,454)
Other expenses (1)										Other expenses (1)	2,842		3,829
Noncontrolling interests (2)	Noncontrolling interests (2)	14		15		42		46		Noncontrolling interests (2)	15		13
Share-based compensation expense	Share-based compensation expense	5,921		5,633		16,143		15,367		Share-based compensation expense	4,258		5,193
Restructuring expenses (3)	Restructuring expenses (3)	2,008		3,583		6,557		7,046		Restructuring expenses (3)	1,692		1,209

Acquisition related expenses (4)										Acquisition related expenses (4)	1,440		—

Adjusted EBITDA(5)	Adjusted EBITDA(5)	71,858		87,113		182,242		229,855		Adjusted EBITDA(5)	69,602		63,714

Less:	Less:									Less:
Depreciation and accretion expense (4)		33,063		33,466		97,346		99,644
Depreciation and accretion expense (6)										Depreciation and accretion expense (6)	32,285		32,210

Interest expense, net	Interest expense, net	11,132		6,751		26,362		20,265		Interest expense, net	10,761		6,421
Adjusted pre-tax income	Adjusted pre-tax income	27,663		46,896		58,534		109,946		Adjusted pre-tax income	26,556		25,083
Income tax expense (5)		5,477		11,114		11,177		25,748
Income tax expense (7)										Income tax expense (7)	7,197		5,920
Adjusted Net Income	Adjusted Net Income	$	22,186	$	35,782	$	47,357	$	84,198	Adjusted Net Income	$	19,359	$	19,163

Adjusted Net Income per share – basic	Adjusted Net Income per share – basic	$	0.50	$	0.79	$	1.06	$	1.83	Adjusted Net Income per share – basic	$	0.43	$	0.43
Adjusted Net Income per share – diluted	Adjusted Net Income per share – diluted	$	0.49	$	0.79	$	1.04	$	1.81	Adjusted Net Income per share – diluted	$	0.42	$	0.42

Weighted average shares outstanding – basic	Weighted average shares outstanding – basic	44,506,874		45,058,226		44,557,103		46,040,027		Weighted average shares outstanding – basic	44,959,960		44,729,824
Weighted average shares outstanding – diluted	Weighted average shares outstanding – diluted	45,209,696		45,504,165		45,382,687		46,475,353		Weighted average shares outstanding – diluted	45,609,764		45,741,261

(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 nine~~ months ended ~~September 30, 2020,~~March 31, 2021, restructuring expenses included costs incurred in conjunction with facility closures, workforce reductions and other related charges. For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, restructuring expenses included professional fees and costs incurred in conjunction with facility closures and workforce reductions. The facility closures during the three months ended March 31, 2021 and 2020, respectively, primarily occurred in the U.K. related to reducing the number of facilities associated with cash delivery operations.

(4)For the three months ended March 31, 2021, acquisition related expenses includes legal and professional fees and certain administrative costs incurred in connection with the proposed acquisition of the Company, as further discussed in Note 1. Basis of Presentation - (a) Description of Business.

(5)The results for the three months ended March 31, 2021 include business rate tax recoveries of $12.0 million, classified as a cost reduction within Cost of ATM operating revenues.

(6)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)~~Table of Contents

(7)For the three ~~and nine~~ month periods ended ~~September 30,~~March 31, 2021 and 2020, the non-GAAP tax rates used to calculate Adjusted Net Income were ~~19.8%~~27.1% and ~~19.1%, respectively. For the three and nine months ended September 30, 2019, the non-GAAP tax rates used to calculate Adjusted Net Income were 23.7% and 23.4%, respectively.~~23.6%. The non-GAAP tax rates represent the Company’s U.S. GAAP tax rates adjusted for the net tax effects related to the items excluded from Adjusted Net Income.

~~Table of~~ ~~Contents~~

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

(in thousands, excluding percentages)


Consolidated revenue:	Consolidated revenue:	Three Months Ended September 30,												Consolidated revenue:	Three Months Ended March 31,
		2020						2019		% Change					2021						2020		% Change
		U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency			U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	ATM operating revenues	$	267,320	$	(2,408)	$	264,912	$	333,384	(19.8)	%	(20.5)	%	ATM operating revenues	$	255,018	$	(7,306)	$	247,712	$	291,799	(12.6)	%	(15.1)	%
ATM product sales and other revenues	ATM product sales and other revenues	12,078		14		12,092		18,123		(33.4)		(33.3)		ATM product sales and other revenues	12,816		(401)		12,415		14,803		(13.4)		(16.1)
Total revenues	Total revenues	$	279,398	$	(2,394)	$	277,004	$	351,507	(20.5)	%	(21.2)	%	Total revenues	$	267,834	$	(7,707)	$	260,127	$	306,602	(12.6)	%	(15.2)	%

Nine Months Ended September 30,
2020 2019 % Change
U.S.
GAAP Foreign Currency
Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 781,998 $ 4,761 $ 786,759 $ 959,067 (18.5) % (18.0) %
ATM product sales and other revenues 37,194 345 37,539 51,531 (27.8) (27.2)
Total revenues $ 819,192 $ 5,106 $ 824,298 $ 1,010,598 (18.9) % (18.4) %



North America revenue:	Three Months Ended March 31,
	2021						2020		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	182,959	$	(810)	$	182,149	$	193,241	(5.3)	%	(5.7)	%
ATM product sales and other revenues	9,086		(61)		9,025		12,756		(28.8)		(29.2)
Total revenues	$	192,045	$	(871)	$	191,174	$	205,997	(6.8)	%	(7.2)	%

North America revenue: Three Months Ended September 30,
2020 2019 % Change
U.S.
GAAP Foreign Currency Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 181,330 $ 374 $ 181,704 $ 208,595 (13.1) % (12.9) %
ATM product sales and other revenues 10,395 20 10,415 16,113 (35.5) (35.4)
Total revenues $ 191,725 $ 394 $ 192,119 $ 224,708 (14.7) % (14.5) %



Europe & Africa revenue:	Three Months Ended March 31,
	2021						2020		% Change
	U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	$	52,835	$	(3,599)	$	49,236	$	79,958	(33.9)	%	(38.4)	%
ATM product sales and other revenues	3,243		(258)		2,985		1,942		67.0		53.7
Total revenues	$	56,078	$	(3,857)	$	52,221	$	81,900	(31.5)	%	(36.2)	%

Nine Months Ended September 30,
2020 2019 % Change
U.S.
GAAP Foreign Currency
Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 539,628 $ 1,202 540,830 $ 599,177 (9.9) % (9.7) %
ATM product sales and other revenues 32,133 145 32,278 44,994 (28.6) (28.3)
Total revenues $ 571,761 $ 1,347 $ 573,108 $ 644,171 (11.2) % (11.0) %


Europe & Africa revenue:		Three Months Ended September 30,
Australia & New Zealand revenue:														Australia & New Zealand revenue:	Three Months Ended March 31,
		2020						2019		% Change					2021						2020		% Change
		U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency			U.S. GAAP		Foreign Currency Impact		Constant - Currency		U.S. GAAP		U.S. GAAP		Constant - Currency
ATM operating revenues	ATM operating revenues	$	68,293	$	(2,050)	$	66,243	$	102,801	(33.6)	%	(35.6)	%	ATM operating revenues	$	19,712	$	(2,897)	$	16,815	$	20,252	(2.7)	%	(17.0)	%
ATM product sales and other revenues	ATM product sales and other revenues	1,613		3		1,616		1,907		(15.4)		(15.3)		ATM product sales and other revenues	487		(82)		405		105		363.8		285.7
Total revenues	Total revenues	$	69,906	$	(2,047)	$	67,859	$	104,708	(33.2)	%	(35.2)	%	Total revenues	$	20,199	$	(2,979)	$	17,220	$	20,357	(0.8)	%	(15.4)	%

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Nine Months Ended September 30,
2020 2019 % Change
U.S.
GAAP Foreign Currency
Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 195,339 $ 1,983 $ 197,322 $ 292,980 (33.3) % (32.7) %
ATM product sales and other revenues 4,859 200 5,059 6,123 (20.6) (17.4)
Total revenues $ 200,198 $ 2,183 $ 202,381 $ 299,103 (33.1) % (32.3) %

Australia & New Zealand revenue: Three Months Ended September 30,
2020 2019 % Change
U.S.
GAAP Foreign Currency Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 19,151 $ (732) $ 18,419 $ 24,389 (21.5) % (24.5) %
ATM product sales and other revenues 70 (3) 67 103 (32.0) (35.0)
Total revenues $ 19,221 $ (735) $ 18,486 $ 24,492 (21.5) % (24.5) %

Nine Months Ended September 30,
2020 2019 % Change
U.S.
GAAP Foreign Currency Impact Constant - Currency U.S.
GAAP U.S.
GAAP Constant - Currency
ATM operating revenues $ 51,551 $ 1,576 $ 53,127 $ 74,906 (31.2) % (29.1) %
ATM product sales and other revenues 202 6 208 414 (51.2) (49.8)
Total revenues $ 51,753 $ 1,582 $ 53,335 $ 75,320 (31.3) % (29.2) %

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 September 30,
2020 2019 % Change
Non -
GAAP (1)
Foreign Currency Impact Constant - Currency
Non -
GAAP (1)
Non -
GAAP (1)
Constant - Currency
Adjusted EBITDA $ 71,858 $ (1,069) $ 70,789 $ 87,113 (17.5) % (18.7) %
Adjusted Net Income $ 22,186 $ (509) $ 21,677 $ 35,782 (38.0) % (39.4) %
Adjusted Net Income per share –
diluted (2)
$ 0.49 $ (0.01) $ 0.48 $ 0.79 (38.0) % (39.2) %

~~Table of~~ ~~Contents~~


	Three Months Ended March 31,
	2021						2020		% Change
	Non - GAAP (1)		Foreign Currency Impact		Constant - Currency		Non - GAAP (1)		Non - GAAP (1)		Constant - Currency

Adjusted EBITDA	$	69,602	$	(2,086)	$	67,516	$	63,714	9.2	%	6.0	%
Adjusted Net Income	$	19,359	$	(522)	$	18,837	$	19,163	1.0	%	(1.7)	%
Adjusted Net Income per share – diluted (2)	$	0.42	$	—	$	0.42	$	0.42	—	%	—	%

Nine Months Ended September 30,
2020 2019 % Change

Non -
GAAP (1)
Foreign Currency Impact Constant - Currency
Non -
GAAP (1)
Non -
GAAP (1)
Constant - Currency
Adjusted EBITDA $ 182,242 $ 402 $ 182,644 $ 229,855 (20.7) % (20.5) %
Adjusted Net Income $ 47,357 $ (362) $ 46,995 $ 84,198 (43.8) % (44.2) %
Adjusted Net Income per share –
diluted (2)
$ 1.04 $ — $ 1.04 $ 1.81 (42.5) % (42.5) %

(1) As reported on the Reconciliation of Net 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 ~~45,209,696~~45,609,764 and ~~45,504,165~~45,741,261 for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019, respectively, and 45,382,687 and 46,475,353 for the nine months ended September 30, 2020 and 2019, respectively.~~2020.

Reconciliation of Current and Long-Term Debt to Net Debt


	March 31, 2021		December 31, 2020
	(In thousands)
	(Unaudited)
Total Current and Long-term Debt	$	777,693	$	778,177
Add: Unamortized discounts and capitalized debt issuance costs	18,557		19,323
Less: Cash and cash equivalents	(197,363)		(174,242)
Net Debt	$	598,887	$	623,258

Reconciliation of Net Cash Provided by Operating Activities to Adjusted Net Cash Provided by Operating Activities and Adjusted Free Cash Flow


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(In thousands)									(In thousands)
Net cash provided by operating activities	Net cash provided by operating activities	$	98,350	$	176,462	$	188,201	$	231,692	Net cash provided by operating activities	$	69,352	$	1,120
Restricted cash settlement activity (1)	Restricted cash settlement activity (1)	(11,418)		(92,983)		(10,673)		(22,629)		Restricted cash settlement activity (1)	(4,346)		39,871
Adjusted net cash provided by operating activities	Adjusted net cash provided by operating activities	86,932		83,479		177,528		209,063		Adjusted net cash provided by operating activities	65,006		40,991
Net cash used in investing activities, excluding acquisitions (2)	Net cash used in investing activities, excluding acquisitions (2)	(31,290)		(35,266)		(61,094)		(90,319)		Net cash used in investing activities, excluding acquisitions (2)	(16,246)		(18,429)
Adjusted free cash flow	Adjusted free cash flow	$	55,642	$	48,213	$	116,434	$	118,744	Adjusted free cash flow	$	48,760	$	22,562

(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 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. 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~~expenditures are primarily related to organic growth projects, including the purchase of ATMs for ~~property~~both new and ~~equipment, exclusive license~~existing ATM management agreements, ~~site acquisition costs,~~technology and product development, investments in infrastructure, ongoing refreshment of ATMs and operational assets and other ~~assets.~~related type activities in the normal course of business. 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 ~~September 30, 2020,~~March 31, 2021, we had ~~$263.5~~$197.4 million in cash and cash equivalents and ~~$893.6~~$777.7 million of current and long-term debt (or ~~$914.4~~$796.3 million, including ~~$20.8~~$18.6 million of capitalized debt issuance costs and unamortized discounts). In addition, we currently have a $600 million ~~of capacity under our~~ revolving credit facility, with currently no borrowings outstanding and approximately $~~8.7~~10.0 million in outstanding letters of credit. Our Convertible Notes that remain outstanding are due December 2020. These Convertible Notes have a face value of $115.6 million and are presented, net of the unamortized discount and capitalized debt issuance costs of ~~$0.9 million,~~ ~~in the Current portion of long-term debt line of the Company's Consolidated Balance Sheet as of~~ ~~September 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 on hand, cash flows from operations, borrowings under our revolving credit facility, and the issuance of debt and ~~equity securities.~~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 outstanding borrowings and to fund investments and capital expenditures. Accordingly, it is not uncommon for us to reflect a working capital deficit position in ourConsolidated Balance Sheet. ~~However,~~ during the nine months ended September 30, 2020, we took measures to improve available liquidity and plan for the retirement of our Convertible Notes, resulting in us holding a larger balance of cash during the period.

Taking into consideration the foregoing and the expected effects of known trends, we believe we have sufficient liquidity available from cash on hand, cash flow from operations and potential borrowings to fund our operations for the foreseeable future. ~~For additional information see~~See ~~Item 1. Financial Statements, Note 9. Current and Long-Term Debt~~Financing Activities

below.

Operating Activities

Net cash provided by operating activities ~~totaled $188.2~~totaled $69.4 million ~~during~~during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to net cash provided by operating activities of ~~$231.7~~$1.1 million during the same period of ~~2019.~~2020. Excluding changes in restricted cash liabilities during the periods due to the timing of settlements, our cash flows from operating activities ~~were down $31.5~~increased $24.0 million. This ~~decrease~~ increase in operating cash flow (excluding settlement changes) is primarily due to ~~the impact of the Pandemic on our operations.~~higher operating profits and positive changes in working capital.

Investing Activities

Net cash used in investing activities ~~totaled $61.1~~totaled $16.2 million during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to net cash used in investing activities of ~~$99.4~~$18.4 million ~~during~~during the same period of ~~2019.~~2020. The change in net cash used in investing activities during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 relative to the prior year was primarily a result of reduced capital expenditures, driven by technology enhancements, strategic procurement initiatives and ~~operational enhancements.~~ordinary course business requirement fluctuations.

Financing Activities

Net cash used in financing activities totaled $24.2 million during the three months ended March 31, 2021 compared to cash provided by financing activities ~~totaled $119.4 million during the nine months ended September 30, 2020 compared to cash used in financing activities~~ of ~~$122.5~~$565.0 million during the same period of ~~2019.~~2020. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, we paid $9.2 million to satisfy the 2020 portion of our obligation under the Spark acquisition contingent consideration arrangement, made $14.5 million in tax payments upon vesting of share-based compensation awards, and made the mandatory quarterly principal repayment on our Term Loan facility. During the first quarter of 2020, we borrowed ~~$500~~$587.1 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 ~~facility balance which was $167.2 million as of December 31, 2019. We paid $20.5 million of debt issuance, modification and extinguishment costs~~agreement in ~~conjunction with these activities during the nine months ended September 30, 2020. These financing activities improved available liquidity, extended the average maturity of our debt and a portion~~anticipation of the ~~net proceeds are planned to be used for the repayment~~maturity of our Convertible Notes due on December 1, ~~2020.~~2020 and for additional liquidity given the economic uncertainty caused by the worldwide COVID-19 pandemic. During the ~~first quarter of~~three months ended March 31, 2020 we also used $16.9 million to repurchase 505,699 Class A ordinary shares. We ~~may~~have from time to time ~~seek~~sought to repurchase our outstanding debt and / or equity securities in privately negotiated ~~transactions and / or otherwise.~~transactions.

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

Effects of Inflation

Our monetary assets, consisting primarily of cash and receivables, are not currently significantly affected by inflation. Similarly our non-monetary assets, consisting primarily of tangible and intangible assets, are not affected by inflation. However, inflation may in the future affect our expenses, such as those for employee compensation, operating costs and capital expenditures, which may not be readily recoverable in the price of services offered by us.

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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~~our 2020 Form ~~10-K for~~10-K.

Goodwill Impairment

During the year ended December 31, ~~2019.~~

~~Goodwill Impairment~~

~~Following~~2020, we performed quantitative impairment tests and determined that the goodwill impairment recognized by the Company in 2019, the Canada reporting unit continues to be at risk of impairment. In 2019, the Canada reporting unit’s carrying value was impaired and reduced to its fair value. The fair value of all reporting units exceeded the ~~Canada reporting unit continues to approximate its~~ carrying ~~value. Furthermore,~~value and, as ~~indicated in~~ ~~Part I. Item 1. Financial Statements – Note 7. Intangible Assets~~, we identified the impacts of the Pandemic as an impairment indicator and performed a quantitative impairment test of the Canada reporting unit as of March 31, 2020 and a qualitative impairment test as of June 30, 2020. Based on these assessments, there wassuch, no ~~impairment recognized.~~impairments were recorded. During the three months ended ~~September 30, 2020, the Canada reporting unit performed consistent with the forecasts used as of~~ March 31, ~~2020 and~~2021, we did not identify any impairment indicators. ~~The Canada reporting unit's goodwill was approximately~~ ~~$101 million~~ ~~as of September 30, 2020.~~ To the extent that we are unable to ~~meet~~perform in accordance with our ~~forecasts in~~projections, including the ~~future or to the extent that the impacts~~estimated impact of the Pandemic, ~~are protracted,~~ further goodwill impairment charges are possible relative to the Company’s Canada reporting unit. Additionally, based on recent qualitative assessments, the fair value of the Company’s other reporting units exceed their carrying values; however, protracted impacts of the Pandemic could result in goodwill impairment charges to those reporting units.possible.

New Accounting Pronouncements

For information related to accounting pronouncements adopted and not yet adopted during ~~2020~~2021 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~~2020 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 variable rate debt. The following quantitative and qualitative information is provided about financial instruments to which we were a party at ~~September 30, 2020~~March 31, 2021 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.

~~Table of~~ ~~Contents~~

The notional amounts, weighted average fixed rates, and remaining 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 ~~September 30, 2020~~March 31, 2021 are as follows:

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Outstanding Interest Rate Derivatives Associated with Vault Cash Rental Obligations

~~North America – Interest Rate Swap Contracts~~

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

Notional Amounts CAD $ Weighted Average
Fixed Rate Term
(In millions)
$ 125 2.46 % October 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


Remaining Term of Hedging Instrument	Segment	Currency	Weighted Average Fixed Rate/Cap Rate (1)		Notional Value in Respective Currency
					(In millions)
Interest Rate Swap Contract - Vault Cash
April 1, 2021 – December 31, 2021	North America	U.S. Dollar	1.46	%	$	1,200
January 1, 2022 – December 31, 2022	North America	U.S. Dollar	1.17	%	$	1,000
January 1, 2023 – December 31, 2024	North America	U.S. Dollar	0.98	%	$	600
April 1, 2021 – December 31, 2021	North America	Canadian Dollar	2.46	%	$	125
April 1, 2021 – December 31, 2022	Europe & Africa	Pound Sterling	0.94	%	$	500
April 1, 2021 – December 31, 2021	Australia & New Zealand	Australian Dollar	0.71	%	$	40
Interest Rate Cap Contracts - Vault Cash
April 1, 2021 – December 31, 2023	North America	U.S. Dollar	3.25	%	$	200

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

~~Europe & Africa – Interest Rate Swap Contracts~~

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

~~Australia & New Zealand – Interest Rate Swap Contracts~~

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

~~Table of~~ ~~Contents~~

Summary of Interest Rate Exposure on Average Outstanding Vault Cash

The following table presents a hypothetical sensitivity analysis of our annual vault cash rental expense in our North America, Europe & Africa and Australia & New Zealand segments based on our average outstanding vault cash balance and interest rate derivatives for the quarter ended ~~September 30, 2020~~March 31, 2021 and assuming a 100 basis point increase in interest rates (in millions):


~~North America~~
~~Average outstanding vault cash balance~~	$	~~2,448~~
~~Interest rate swap contracts fixed notional amount~~	~~(1,594)~~
~~Residual unhedged outstanding vault cash balance~~	$	~~854~~

~~Additional annual interest incurred on 100 basis point increase~~	$	~~8.54~~


	North America		Europe & Africa		Australia & New Zealand
Average outstanding vault cash balance	$	2,774	$	1,187	$	259
Interest rate swap contracts fixed notional amount	(1,499)		(689)		(31)
Residual unhedged outstanding vault cash balance	$	1,275	$	498	$	228

Additional annual interest incurred on 100 basis point increase	$	12.75	$	4.98	$	2.28

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~~

Table of our annual vault cash rental expense in Europe & Africa based on our average outstanding vault cash balance for the quarter ended September 30, 2020 and assuming a 100 basis point increase in interest rates (in millions):Contents


~~Europe & Africa~~
~~Average outstanding vault cash balance~~	$	~~1,212~~
~~Interest rate swap contracts fixed notional amount~~	~~(710)~~
~~Residual unhedged outstanding vault cash balance~~	$	~~502~~

~~Additional annual interest incurred on 100 basis point increase~~	$	~~5.02~~

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 September 30, 2020 and assuming a 100 basis point increase in interest rates (in millions):


~~Australia~~
~~Average outstanding vault cash balance~~	$	~~236~~
~~Interest rate swap contracts fixed notional amount~~	~~(100)~~
~~Residual unhedged outstanding vault cash balance~~	$	~~136~~

~~Additional annual interest incurred on 100 basis point increase~~	$	~~1.36~~

Interest Rate Derivatives and Outlook. As of ~~September 30, 2020,~~March 31, 2021, we had an asset of $0.3 million and a liability of ~~$57.9~~$34.8 million recorded in the accompanying Consolidated Balance Sheets, which represented the fair value of our interest rate swap and cap contracts associated with our vault cash rental obligations. The fair value estimate for these instruments was calculated as the present value of amounts estimated to be paid to a marketplace 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 Consolidated Balance Sheets. The gain or loss is reclassified into earnings in the Vault cash rental expense line within the Cost of ATM operating revenues line in the Consolidated Statements of Operations in the same period or periods during which the hedged transaction affects ~~earnings~~ and has been forecasted ~~into~~in earnings.

~~Table of~~ ~~Contents~~

Although we currently hedge a substantial portion of our vault cash interest rate risk in the U.S., Canada, the U.K., and Australia, we may not be able to enter into similar arrangements for similar amounts in the future, and any significant increase in interest rates in the future could have an adverse impact on our business, financial condition, and results of operations by increasing our operating expenses. However, we expect that the impact on our consolidated financial statements from a significant increase in interest rates would be partially mitigated by the derivative instruments that we currently have in place associated with our vault cash balances in the U.S., Canada, the U.K., and Australia and other protective measures we have put in place to mitigate such risk.

Interest expense. Our interest expense is also sensitive to changes in interest rates as borrowings under our revolving credit and term loan facilities accrue interest at floating rates. As of ~~September 30, 2020,~~March 31, 2021, we had no outstanding borrowings under our revolving credit facility and ~~$498.7~~$496.3 million of outstanding borrowings under our floating rate term loan facility.

To mitigate the interest rate risk associated with the borrowings on our floating rate term loan facility, on July 30, 2020, we executed $250.0 million aggregate notional amount interest rate cap contracts that ~~began August 1, 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 our term loan facility. See Item 1. Financial Statements, Note 9. Current and Long-Term Debt.

Outstanding Interest Rate Derivatives Associated with Variable Rate Debt

~~North America – Interest Rate Cap Contracts~~

Remaining Term of Hedging Instrument

Segment

Currency

Weighted Average Fixed Rate/Cap Rate (1)

Notional Value in Respective Currency

Interest rate cap contracts - Variable Debt

(In millions)

April 1, 2021 – December 31, 2025

North America

U.S. Dollar

1.00

250

Notional Amounts
U.S. $
Cap Rate (1)
Term
(In millions)
$ 250 1.00% October 1, 2020 – December 31, 2025

(1) ~~Maximum~~Cap rate represents the maximum amount of interest to be paid each year as per terms of the cap. The cost of the cap will be amortized through interest expense over the term of the ~~cap~~cap.

As of ~~September 30, 2020,~~March 31, 2021, we had an asset of $3.6 million and a liability of ~~$0.8~~$0.4 million recorded in the accompanying Consolidated Balance Sheets, which represented the fair value of our interest rate cap contracts associated with our term loan facility. The fair value estimate for these instruments was calculated as the present value of amounts estimated to be paid to a marketplace 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 Consolidated Balance Sheets. The gain or loss is reclassified into earnings in the Interest expense, net line in the Consolidated Statements of Operations in the same period or periods during which the hedged transaction affects and has been forecasted in earnings.

Table of Contents

Transition from LIBOR. We are currently evaluating the impact of the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates. Currently, we have several debt, derivative and ~~derivative instruments~~commercial contracts that reference LIBOR-based rates. The transition from LIBOR in the U.S. for tenors that the Company currently utilizes is expected to take place sometime after 2021. The LIBOR transition in the U.K. is expected to take place at the end of 2021, and we do not expect this change to have a significant impact on our operations or results. We will continue to assess the impact of this transition. For additional information related to the transition from LIBOR, see Part 1, Item 1A. Risk Factors - Changes in interest rates could increase our operating costs by increasing interest expense under our credit facilities and our vault cash rental costs in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Foreign Currency Exchange Rate Risk

As a result of our global operations, 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 ~~September 30, 2020,~~March 31, 2021, this accumulated translation loss totaled ~~$65.9~~$39.0 million compared to ~~$59.1~~$41.6 million as of December 31, ~~2019.~~2020.

~~Table of~~ ~~Contents~~

Our consolidated financial results were impacted by changes in foreign currency exchange rates during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared to the prior year. Our total revenues during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 would have been lower by approximately ~~$2.4~~$7.7 million a~~nd higher by approximately $5.1 million, respectively,~~ had the foreign currency exchange rates from the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 remained unchanged from the prior year. A sensitivity analysis indicates that, if the U.S. dollar uniformly strengthened or weakened 10% against the U.K. pound sterling, Euro, Mexican peso, Canadian dollar, Australian dollar, orand South African Rand, the effect upon our operating income would have been approximately ~~$1.1 million and $0.3~~$0.6 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, 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 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.~~funds or in physical cash form.

Item 4. Controls and Procedures

Management’s Quarterly Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September 30, 2020~~March 31, 2021 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.

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 ~~September 30, 2020~~March 31, 2021 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.~~13. 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~~2020 (“~~2019~~2020 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~~2020 Form ~~10-K, except with respect to the risk factors described below.~~

We are subject to business cycles, seasonality, and other outside factors such as extreme weather, natural disasters or health emergencies, including the ongoing outbreak of the coronavirus (“COVID-19” or the "Pandemic") 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. 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 the COVID-19 that is addressed in more detail below, 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, catastrophic ev~~ents or significant business interruptions could reduce or impair our ability, and that of our employees, to provide services and conduct operations. These events may occ~~ur in a manner that cannot be mitigated by our disaster and business continuity planning and cause losses 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 is resolved.

On March 11, 2020, the World Health Organization declared 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 certain regions in which we operate, 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 in March 2020 and continuing throughout the third quarter of 2020. We expect that these impacts will continue through the fourth quarter of 2020, and may continue to impact our results beyond 2020. 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. We may take further actions as may be required by government authorities or as we determine are in the best interests of our employees, partners and customers. For more information, see Part I. Financial Information, Item 2. Management’s Discussion and Analysis of Financial Conditions and Results Operations.

~~Table of~~ ~~Contents~~

The situation surrounding 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 that the Pandemic may have on the Company’s results of operations, financial position, and liquidity. The extent to which the 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 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~~ ~~September~~ ~~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 (e.g., 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.

10-K.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

~~Table of~~ ~~Contents~~

Item 5. Other Information

Not applicable.

7459

Table of Contents

Item 6. Exhibits


Exhibit Number			Description
10.1*			Form equity award agreement (South Africa, time based)
10.2*			Form equity award agreement (South Africa, performance based)
10.3*			Form equity award agreement (South Africa, market based)
10.4*			Form equity award agreement (non-employee director)
10.5*			Form equity award agreement (time based)
10.6*			Form equity award agreement (time based)
10.7*			Form equity award agreement (time based, special)
10.8*			Form equity award agreement (performance based)
10.9*			Form equity award agreement (performance based)
10.10*			Form equity award agreement (performance based, special)
10.11*			Form equity award agreement (market based)
10.12*			Form equity award agreement (market based)
10.13*			Form equity award agreement (market based, special)
10.14*			Form Annual Executive Cash Incentive Plan
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 ~~September~~March ~~30, 2020,~~31, 2021, 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.

7560

Table of Contents

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

~~October 29, 2020~~May 7, 2021						/s/ Gary W. Ferrera
						Gary W. Ferrera
						Chief Financial Officer
						(Duly Authorized Officer and
						Principal Financial Officer)

~~October 29, 2020~~May 7, 2021						/s/ Paul A. Gullo
						Paul A. Gullo
						Chief Accounting Officer
						(Duly Authorized Officer and
						Principal Accounting Officer)

7661


		Page

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Notes to Unaudited Condensed Consolidated Financial Statements	98
	Cautionary Statement Regarding Forward-Looking Statements	4334
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4536
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6755
Item 4.	Controls and Procedures	7158

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	7259
Item 1A.	Risk Factors	7259
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7359
Item 3.	Defaults Upon Senior Securities	7359
Item 4.	Mine Safety Disclosures	7359
Item 5.	Other Information	7459
Item 6.	Exhibits	7560
	Signatures	7661


	Three Months Ended September 30, 2019
	Common Shares			Additional Paid-In Capital		Accumulated Other Comprehensive Loss, Net		Retained Earnings			Noncontrolling Interests
	Shares	Amount								Total
Balance as of June 30, 2019	45,645	$	456	$	330,131	$	(83,810)	$	115,197		$	(101)	$	361,873

Issuance of common shares for share-based compensation, net of forfeitures	12	—		—		—		—			—		0
Share-based compensation expense	—	—		5,633		—		—			—		5,633
Tax payments related to share-based compensation	—	—		(202)		—		—			—		(202)
Repurchase of common shares	(1,054)	(10)		(7,222)		—		(22,920)			—		(30,152)
Unrealized loss on interest rate swap and foreign currency forward contracts, net of deferred income tax benefit of $583	—	—		—		(2,798)		—			—		(2,798)
Net income attributable to controlling interests	—	—		—		—		20,864			—		20,864
Net income attributable to noncontrolling interests	—	—		—		—		—			3		3
Foreign currency translation adjustments, net of deferred income tax benefit of $0	—	—		—		(6,998)		—			(2)		(7,000)
Balance as of September 30, 2019	44,603	$	446	$	328,340	$	(93,606)	$	113,141		$	(100)	$	348,221


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

Accounts and notes receivable	$	101,046	$	0	$	101,046
Allowance for credit losses	(5,251)		(2,337)		(7,588)
Accounts and notes receivable, net	$	95,795	$	(2,337)	$	93,458

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


	September 30, 2020						December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)
Merchant and bank-branding contracts/relationships	$	488,725	$	(410,685)	$	78,040	$	489,363	$	(388,598)	$	100,765
Trade names	16,315		(13,190)		3,125		18,391		(12,792)		5,599
Technology	11,895		(8,615)		3,280		12,389		(7,952)		4,437
Non-compete agreements	4,335		(4,335)		0		4,408		(4,408)		0
Revolving credit facility deferred financing costs	5,820		(2,229)		3,591		5,256		(2,132)		3,124
Total intangible assets with definite lives	$	527,090	$	(439,054)	$	88,036	$	529,807	$	(415,882)	$	113,925


	Classification	September 30, 2020		December 31, 2019
Assets		(In thousands)
Operating lease assets	Operating lease assets	$	62,418	$	76,548
Total operating lease assets		$	62,418	$	76,548

Liabilities
Current
Operating lease liabilities	Current portion of other long-term liabilities	$	18,374	$	20,345
Noncurrent
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	58,782		69,531
Total operating lease liabilities		$	77,156	$	89,876


			Three Months Ended		Nine Months Ended
	Classification		September 30, 2020		September 30, 2020
		(In thousands)
Operating lease costs	Cost of ATM operating revenues (1)		$	6,247	$	17,353
Operating lease costs	Selling, general, and administrative expenses (2)		1,228		3,775
Total operating lease cost			$	7,475	$	21,128


Maturity of Recognized Operating Lease Liabilities	Operating Lease Payments(1)
	(In thousands)
Remainder of 2020	$	7,507
2021	19,825
2022	12,687
2023	9,911
2024	8,156
After 2024	32,599
Total lease payments	90,685
Less: Interest (2)	(13,529)
Present value of operating lease liabilities (3)	$	77,156


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


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


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



	Three Months Ended September 30
Derivatives in Cash Flow Hedging Relationship	Amount of Loss Recognized in Accumulated Other Comprehensive Loss on Derivative Instruments				Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income
	2020		2019			2020		2019
	(In thousands)					(In thousands)
Interest rate swap and cap contracts	$	(5,072)	$	(3,406)	Cost of ATM operating revenues	$	(8,620)	$	(668)
Interest rate swap and cap contracts	0		(119)		Interest expense, net	0		(59)
Total	$	(5,072)	$	(3,525)		$	(8,620)	$	(727)


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


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


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