Shareholders' Equity

12 Months Ended

Dec. 31, 2016

Shareholders' Equity

Shareholders' Equity

(13) Shareholders’ Equity

Redomicile Transaction. Pursuant to the Redomicile Transaction, each issued and outstanding common share of Cardtronics Delaware held immediately prior to the Merger was effectively converted into one Class A Ordinary Share, nominal value $0.01 per share, of Cardtronics plc (collectively, “common shares”). Upon completion of the Redomicile Transaction, the common shares were listed and began trading on The NASDAQ Stock Market LLC under the symbol “CATM,” the same symbol under which common shares of Cardtronics Delaware were formerly listed and traded. Likewise, the equity plans and/or awards granted thereunder were assumed by Cardtronics plc and amended to provide that those plans and/or awards will now provide for the award and issuance of Ordinary Shares. Furthermore, all treasury shares of Cardtronics Delaware were cancelled in the Redomicile Transaction.

Change in common shares, treasury shares, and additional paid-in capital associated with the Redomicile Transaction.In the Redomicile Transaction, completed on July 1, 2016, each of the 52,529,197,  $0.0001 par value per share, issued and outstanding common shares of Cardtronics Delaware held immediately prior to the Merger were effectively converted into an equivalent number of $0.01 nominal value per share common shares of Cardtronics plc. In addition, immediately prior to the Redomicile Transaction, 7,310,022 treasury shares of Cardtronics Delaware with a cost basis of $106.5 million were cancelled with the offsetting impact recorded in the Additional paid-in capital and Retained earnings line items in the accompanying Consolidated Balance Sheets.

Common shares. The Company has 45,326,430 and 44,953,620 shares outstanding as of December 31, 2016 and 2015, respectively.

Additional paid-in capital. Included in the balance of Additional paid-in capital are amounts related to the Convertible Notes issued in November 2013 and the related equity instruments. These amounts include: (i) the fair value of the embedded option of the Convertible Notes for $71.7 million, (ii) the amount paid to purchase the associated convertible note hedges for $72.6 million, (iii) the amount received for selling associated warrants for $40.5 million, and (iv) $1.6 million in debt issuance costs allocated to the equity component of the convertible note. For additional information related to the Convertible Notes and the related equity instruments, see Note 10. Long-Term Debt.

Accumulated other comprehensive loss, net. Accumulated other comprehensive loss, net, is a separate component of Shareholders’ equity in the accompanying Consolidated Balance Sheets. The following table presents the changes in the balances of each component of Accumulated other comprehensive loss, net for the years ended December 31, 2016, 2015, and 2014:

	Foreign Currency Translation Adjustments			Unrealized (Losses) Gains on Interest Rate Swap Contracts			Total
	(In thousands)
Total accumulated other comprehensive loss, net as of January 1, 2014	$	(18,436)		$	(54,518)	(1)	$	(72,954)
Other comprehensive loss before reclassification		(16,273)			(29,239)	(2)		(45,512)
Amounts reclassified from accumulated other comprehensive loss, net		—			35,459	(2)		35,459
Net current period other comprehensive (loss) income		(16,273)			6,220			(10,053)
Total accumulated other comprehensive loss, net as of December 31, 2014	$	(34,709)		$	(48,298)	(1)	$	(83,007)
Other comprehensive loss before reclassification		(11,177)			(28,173)	(3)		(39,350)
Amounts reclassified from accumulated other comprehensive loss, net		—			34,231	(3)		34,231
Net current period other comprehensive (loss) income		(11,177)			6,058			(5,119)
Total accumulated other comprehensive loss, net as of December 31, 2015	$	(45,886)	(5)	$	(42,240)	(1)	$	(88,126)
Other comprehensive loss before reclassification		(34,999)	(6)		(12,580)	(4)		(47,579)
Amounts reclassified from accumulated other comprehensive loss, net		—			28,570	(4)		28,570
Net current period other comprehensive (loss) income		(34,999)			15,990			(19,009)
Total accumulated other comprehensive loss, net as of December 31, 2016	$	(80,885)	(5)	$	(26,250)	(1)	$	(107,135)

⁽¹⁾ Net of deferred income tax (benefit) expense of $(10,829) as of January 1, 2014, and $(6,701),  $(2,959), and $9,269 as of December 31, 2014, 2015, and 2016, respectively.

⁽²⁾ Net of deferred income tax (benefit) expense of $(19,405) and $23,533 for Other comprehensive loss before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, for the year ended December 31, 2014. See Note 15. Derivative Financial Instruments.

⁽³⁾ Net of deferred income tax (benefit) expense of $(17,402) and $21,143 for Other comprehensive loss before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, for the year ended December 31, 2015. See Note 15. Derivative Financial Instruments.

⁽⁴⁾ Net of deferred income tax (benefit) expense of $(9,619) and $21,847 for Other comprehensive loss before reclassification and Amounts reclassified from accumulated other comprehensive loss, net, respectively, for the year ended December 31, 2016. See Note 15. Derivative Financial Instruments.

⁽⁵⁾ Net of deferred income tax (benefit) of $(4,113) and $(1,565) as of December 31, 2016 and 2015, respectively.

⁽⁶⁾ Net of deferred income tax (benefit) of $(2,548) for the year ended December 31, 2016.

The Company records unrealized gains and losses related to its interest rate swap contracts net of estimated taxes in the Accumulated other comprehensive loss, net, line item in the accompanying Consolidated Balance Sheets since it is more likely than not that the Company will be able to realize the benefits associated with its net deferred tax asset positions in the future. The amounts reclassified from Accumulated other comprehensive loss, net, are recognized in the Cost of ATM operating revenues line item in the accompanying Consolidated Statements of Operations.

The Company has elected the portfolio approach for the deferred tax asset of the unrealized gains and losses related to the interest rate swap contracts in the Accumulated other comprehensive loss, net line item in the accompanying Consolidated Balance Sheets. Under the portfolio approach, the disproportionate tax effect created when the valuation allowance was appropriately released as a tax benefit into continuing operations in 2010, will reverse out of the Accumulated other comprehensive loss, net line item in the accompanying Consolidated Balance Sheets and into continuing operations as a tax expense when the Company ceases to hold any interest rate swap contracts. As of December 31, 2016, the disproportionate tax effect is approximately $14.7 million.

The Company currently believes that the unremitted earnings of its foreign subsidiaries under its former U.S. parent company 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.