(15) Segment Information

As of June 30, 2016, the Company’s operations consisted of its North America, Europe, and Corporate & Other segments. The Company’s ATM operations in the U.S., Canada, Mexico, and Puerto Rico are included in its North America segment. The Company’s ATM operations in the U.K., Ireland, Germany, Poland, and its ATM advertising business (i- design group plc (“i-design”)) are included in its Europe segment. The Company’s transaction processing operations, which service its North American and European operations along with external customers, and the Company’s corporate general and administrative functions comprise the Corporate & Other segment. In the first quarter of 2016, the Company reorganized and created the Corporate & Other segment to separately present transaction processing operations from its primary ATM operations and present the corporate general and administrative functions separate from the North America segment. Additionally, i-design was previously included within the North America segment and due to organizational changes, is now a part of the Europe segment. While both regional reporting segments provide similar kiosk-based and/or ATM-related services, each of the regional segments is managed separately and requires different marketing and business strategies. Similarly, the transaction processing and corporate general and administrative functions are also managed separately. Segment information presented for prior periods has been revised to reflect this change in segments.

Management uses Adjusted EBITDA and Adjusted EBITA, along with U.S. GAAP-based measures, to assess the operating results and effectiveness of its segments. Management believes Adjusted EBITDA and Adjusted EBITA are useful measures because they allow management to more effectively evaluate operating performance and compare its results of operations from period to period without regard to financing methods or capital structure. Additionally, Adjusted EBITDA and Adjusted EBITA do not reflect acquisition and divestiture-related expenses and the Company’s obligations for the payment of income taxes or capital expenditures, stock-based compensation expense, amortization expense, gains or losses on disposal of assets, interest expense, certain non-operating expenses, and certain costs not anticipated to occur in future periods (if applicable in a particular period). Additionally, Adjusted EBITDA excludes depreciation and accretion expense.

Adjusted EBITDA and Adjusted EBITA, as defined by the Company, may not be comparable to similarly-titled measures reported by other companies and is not a measure of performance calculated in accordance with U.S. GAAP. In evaluating the Company’s performance as measured by Adjusted EBITDA and Adjusted EBITA, management recognizes and considers the limitations of these measurements. Accordingly, Adjusted EBITDA and Adjusted EBITA are only two of the measurements that management utilizes. Therefore, Adjusted EBITDA and Adjusted EBITA should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow measures prepared in accordance with U.S. GAAP.

Below is a reconciliation of Adjusted EBITA and Adjusted EBITDA to Net income attributable to controlling interests and available to common stockholders:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(In thousands)
Adjusted EBITA	$	58,613	$	52,301	$	109,094	$	99,697
Add back:
Depreciation and accretion expense (1)		23,093		21,699		45,762		41,754
Adjusted EBITDA	$	81,706	$	74,000	$	154,856	$	141,451
Less:
(Gain) loss on disposal of assets		(1,326)		247		(944)		(286)
Other expense (2)		943		755		388		1,815
Noncontrolling interests (3)		(17)		(286)		(35)		(711)
Stock-based compensation expense (4)		5,970		5,015		9,138		9,211
Acquisition and divestiture-related expenses (5)		674		5,560		2,258		7,918
Redomicile-related expenses (6)		5,214		—		11,250		—
EBITDA	$	70,248	$	62,709	$	132,801	$	123,504
Less:
Interest expense, net, including amortization of deferred financing costs and note discount		7,448		7,570		14,722		15,059
Income tax expense		9,861		8,744		17,816		17,208
Depreciation and accretion expense		23,100		21,903		45,777		42,015
Amortization of intangible assets		9,691		9,495		18,954		18,992
Net income attributable to controlling interests and available to common stockholders	$	20,148	$	14,997	$	35,532	$	30,230

⁽¹⁾

Amounts exclude a portion of the expenses incurred by the Company’s Mexico subsidiary to account for the amounts allocable to the noncontrolling interest stockholders. In December 2015, the Company increased its ownership interest in its Mexico subsidiary.

⁽²⁾

Includes foreign currency translation gains/losses, other non-operating costs, and in the three and six months ended June 30, 2016, approximately $0.4 million related to the effective termination of an interest rate swap.

⁽³⁾

Noncontrolling interest adjustment made such that Adjusted EBITDA includes only the Company’s ownership interest in the Adjusted EBITDA of its Mexico subsidiary. In December 2015, the Company increased its ownership interest in its Mexico subsidiary from 51.0% to 95.7%.

⁽⁴⁾

For the three and six months ended June 30, 2015, amounts exclude a portion of the expenses incurred by the Company’s Mexico subsidiary to account for the amounts allocable to the noncontrolling interest stockholders. The Company’s Mexico subsidiary recognized no stock-based compensation expense for the three and six months ended June 30, 2016.

⁽⁵⁾

Acquisition and divestiture-related expenses include costs incurred for professional and legal fees and certain transition and integration-related costs, including employee-related severance costs related to specific transactions.

⁽⁶⁾

For the three and six months ended June 30, 2016, the Company incurred $5.2 million and $11.3 million, respectively, in expenses associated with its redomicile of its parent company to the U.K., which was completed on July 1, 2016.

The following tables reflect certain financial information for each of the Company’s reporting segments for the three and six months ended June 30, 2016 and 2015.


	Three Months Ended June 30, 2016
	North America		Europe		Corporate & Other		Eliminations		Total
	(In thousands)
Revenue from external customers	$	220,467	$	96,784	$	6,710	$	—	$	323,961
Intersegment revenues		—		331		5,954		(6,285)		—
Cost of revenues		145,633		61,784		9,198		(6,285)		210,330
Selling, general, and administrative expenses		15,042		8,961		13,909		—		37,912
Redomicile-related expenses		—		—		5,214		—		5,214
Acquisition and divestiture-related expenses		312		355		7		—		674
Loss (gain) on disposal of assets		412		(1,738)		—		—		(1,326)

Adjusted EBITDA		59,797		26,370		(4,476)		15		81,706

Depreciation and accretion expense		12,006		9,361		1,733		—		23,100
Adjusted EBITA		47,789		17,009		(6,209)		24		58,613

Capital expenditures (1)	$	12,049	$	10,749	$	322	$	—	$	23,120


	Three Months Ended June 30, 2015
	North America		Europe		Corporate & Other		Eliminations		Total
	(In thousands)
Revenue from external customers	$	204,158	$	99,588	$	—	$	—	$	303,746
Intersegment revenues		—		366		5,461		(5,827)		—
Cost of revenues		130,837		70,821		4,711		(5,827)		200,542
Selling, general, and administrative expenses		15,531		8,358		10,301		—		34,190
Acquisition and divestiture-related expenses		2,562		2,994		4		—		5,560
Loss on disposal of assets		231		16		—		—		247

Adjusted EBITDA		57,802		20,773		(4,553)		(22)		74,000

Depreciation and accretion expense		11,995		8,924		984		—		21,903
Adjusted EBITA		44,823		11,849		(4,553)		182		52,301

Capital expenditures (1)	$	18,175	$	6,565	$	—	$	—	$	24,740


	Six Months Ended June 30, 2016
	North America		Europe		Corporate & Other		Eliminations		Total
	(In thousands)
Revenue from external customers	$	430,559	$	184,430	$	12,219	$	—	$	627,208
Intersegment revenues		—		665		11,583		(12,248)		—
Cost of revenues		281,771		119,649		17,031		(12,248)		406,203
Selling, general, and administrative expenses		30,249		18,105		26,957		—		75,311
Redomicile-related expenses		—		12		11,238		—		11,250
Acquisition and divestiture-related expenses		857		921		480		—		2,258
Loss (gain) on disposal of assets		757		(1,701)		—		—		(944)

Adjusted EBITDA		118,550		47,346		(11,057)		17		154,856

Depreciation and accretion expense		24,002		18,457		3,318		—		45,777
Adjusted EBITA		94,546		28,889		(14,376)		35		109,094

Capital expenditures (1)	$	19,510	$	19,434	$	627	$	—	$	39,571


	Six Months Ended June 30, 2015
	North America		Europe		Corporate & Other		Eliminations		Total
	(In thousands)
Revenue from external customers	$	400,435	$	185,212	$	—	$	—	$	585,647
Intersegment revenues		—		708		10,262		(10,970)		—
Cost of revenues		257,413		132,850		9,049		(10,970)		388,342
Selling, general, and administrative expenses		29,385		15,876		19,809		—		65,070
Acquisition and divestiture-related expenses		3,150		4,739		29		—		7,918
Loss (gain) on disposal of assets		1,283		(1,569)		—		—		(286)

Adjusted EBITDA		113,664		37,199		(9,418)		6		141,451

Depreciation and accretion expense		23,402		16,935		1,678		—		42,015
Adjusted EBITA		88,584		20,263		(9,418)		268		99,697

Capital expenditures (1)	$	31,189	$	25,229	$	—	$	—	$	56,418

⁽¹⁾

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

Identifiable Assets:



	June 30, 2016		December 31, 2015
	(In thousands)
North America	$	848,372	$	870,445
Europe		355,948		382,920
Corporate & Other		62,591		66,570
Total	$	1,266,911	$	1,319,935