Segment Information

3 Months Ended

Mar. 31, 2017

Segment Information

Segment Information

(15) Segment Information

As of March 31, 2017, the Company’s operations consisted of its North America, Europe & Africa, DCPayments, 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, but excluding any operations from DCPayments. The Company’s ATM operations in the U.K., Ireland, Germany, Poland, Spain, South Africa, and i-design are included in its Europe & Africa segment, but excluding any operations from DCPayments. As a result of the DCPayments acquisition, completed on January 6, 2017, the Company has created the DCPayments segment, which consists of the acquired ATM operations in Australia, New Zealand, Canada, the U.K., and Mexico. As the integration of the DCPayments acquisition progresses during the second quarter of 2017, the Company expects to separate the DCPayments segment into its existing and potentially new reporting segments as appropriate. The Company’s transaction processing operations, which service its ATM operations, along with external customers, and the Company’s corporate general and administrative functions comprise the Corporate & Other segment.

Management uses Adjusted EBITDA and Adjusted EBITA, together with U.S. GAAP measures, to manage and measure the performance of its segments. Management believes Adjusted EBITDA and Adjusted EBITA are useful measures because they allow management to more effectively evaluate the performance of the business and compare its results of operations from period to period without regard to financing methods or capital structure. Adjusted EBITDA and Adjusted EBITA excludes amortization of intangible assets, share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses, (if applicable in a particular period) certain costs not anticipated to occur in future periods, gains or losses on disposal of assets, the Company’s obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and includes an adjustment for noncontrolling interests. Additionally, Adjusted EBITDA excludes depreciation and accretion expense. Depreciation and accretion expense and amortization of intangible assets are excluded 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 and Adjusted EBITA, as defined by the Company, are non-GAAP financial measures provided as a complement to financial results prepared in accordance with U.S. GAAP and may not be comparable to similarly-titled measures reported by other companies. 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 (loss) 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 Net (Loss) Income Attributable to controlling interests and available to common shareholders to EBITDA and Adjusted EBITA:

	Three Months Ended
	March 31,
	2017		2016
	(In thousands)
Net (loss) income attributable to controlling interests and available to common shareholders	$	(901)	$	15,384
Adjustments:
Interest expense, net		6,557		4,492
Amortization of deferred financing costs and note discount		2,976		2,782
Income tax (benefit) expense		(2,952)		7,955
Depreciation and accretion expense		29,121		22,677
Amortization of intangible assets		15,180		9,263
EBITDA	$	49,981	$	62,553
Add back:
Loss on disposal and impairment of assets		3,194		382
Other income (1)		(1,580)		(555)
Noncontrolling interests (2)		(4)		(18)
Share-based compensation expense		2,197		3,168
Acquisition and divestiture-related expenses (3)		8,456		1,584
Redomicile-related expenses (4)		760		6,036
Restructuring expenses (5)		8,243		—
Adjusted EBITDA	$	71,247	$	73,150
Less:
Depreciation and accretion expense (6)		29,118		22,669
Adjusted EBITA	$	42,129	$	50,481

⁽¹⁾ Includes foreign currency translation gains or losses 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 its Mexican subsidiaries.

⁽³⁾ Acquisition and divestiture-related expenses include costs incurred for professional and legal fees and certain other transition and integration-related costs.

⁽⁴⁾ Expenses associated with the Company’s redomicile of its parent company to the U.K., which was completed on July 1, 2016.

⁽⁵⁾ Expenses primarily related to employee severance costs associated with the Company’s Restructuring Plan.

⁽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.

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

	Three Months Ended March 31, 2017
	North America		Europe & Africa (1)		DCPayments		Corporate & Other		Eliminations		Total
	(In thousands)
Revenue from external customers	$	208,018	$	80,914	$	62,631	$	6,009	$	—	$	357,572
Intersegment revenues		35		319		—		4,352		(4,706)		—
Cost of revenues		144,562		54,233		44,101		8,372		(4,706)		246,562
Selling, general, and administrative expenses		13,298		8,493		6,910		13,248		—		41,949
Redomicile-related expenses		—		23		—		737		—		760
Restructuring expenses		3,048		788		660		3,747		—		8,243
Acquisition and divestiture-related expenses		1,577		517		1,166		5,196		—		8,456
Loss (gain) on disposal and impairment of assets		3,371		15		(247)		55		—		3,194
Adjusted EBITDA		50,190		18,506		11,619		(9,068)		—		71,247
Depreciation and accretion expense		13,768		9,238		4,231		1,884		—		29,121
Adjusted EBITA		36,425		9,268		7,388		(10,952)		—		42,129
Capital expenditures (2)	$	25,360	$	10,447	$	2,609	$	145	$	—	$	38,561

	Three Months Ended March 31, 2016
	North America		Europe & Africa (1)		Corporate & Other		Eliminations		Total
	(In thousands)
Revenue from external customers	$	210,092	$	87,647	$	5,508	$	—	$	303,247
Intersegment revenues		—		333		5,630		(5,963)		—
Cost of revenues		136,138		57,865		7,833		(5,963)		195,873
Selling, general, and administrative expenses		15,207		9,144		13,048		—		37,399
Redomicile-related expenses		—		12		6,024		—		6,036
Acquisition and divestiture-related expenses		523		566		495		—		1,584
Loss on disposal and impairment of assets		344		38		—		—		382
Adjusted EBITDA		58,756		20,976		(6,582)		—		73,150
Depreciation and accretion expense		11,996		9,096		1,585		—		22,677
Adjusted EBITA		46,758		11,880		(8,157)		—		50,481
Capital expenditures (2)	$	7,461	$	8,685	$	305	$	—	$	16,451

⁽¹⁾ The Europe & Africa segment includes ATM operations in South Africa, which were acquired on January 31, 2017 with the Spark acquisition.

⁽²⁾ Capital expenditure amounts include payments made for exclusive license agreements, site acquisition costs, and other intangible assets. 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.

Identifiable Assets

	March 31, 2017		December 31, 2016
	(In thousands)
North America	$	898,895	$	914,124
Europe & Africa		417,738		355,058
DCPayments		589,107		—
Corporate & Other		77,128		95,514
Total	$	1,982,868	$	1,364,696