(15) Segment Information

As of June 30, 2017, the Company’s operations consisted of its North America, Europe & Africa, and Australia & New Zealand segments. As the integration of DCPayments (acquired in January 2017) progressed throughout the second quarter of 2017, the Company separated its previously reported DCPayments segment into geographical components, including them within the Company’s geographical segments and creating a new Australia & New Zealand segment, which includes the DCPayments operations in Australia and New Zealand. 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 now also includes the Company’s transaction processing operations, which service its internal ATM operations, along with external customers. The transaction processing operations were previously reported in the Company’s Corporate & Other segment. The Corporate segment now includes solely the Company’s corporate general and administrative expenses. The Company’s operations in the U.K., Ireland, Germany, Poland, 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.). 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. Segment information presented for prior periods have been revised to reflect the changes in the Company’s segments.

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, capital structure or non-recurring costs, as defined by the Company. Adjusted EBITDA and Adjusted EBITA exclude 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 and impairment 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 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 income attributable to controlling interests and available to common shareholders to EBITDA, Adjusted EBITDA, and Adjusted EBITA:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(In thousands)
Net income attributable to controlling interests and available to common shareholders	$	15,158	$	20,148	$	14,257	$	35,532
Adjustments:
Interest expense, net		9,460		4,466		16,017		8,958
Amortization of deferred financing costs and note discount		3,146		2,982		6,122		5,764
Income tax expense		4,670		9,861		1,718		17,816
Depreciation and accretion expense		29,755		23,100		58,876		45,777
Amortization of intangible assets		15,247		9,691		30,427		18,954
EBITDA	$	77,436	$	70,248	$	127,417	$	132,801
Add back:
Loss (gain) on disposal and impairment of assets		669		(1,326)		3,863		(944)
Other expense (1)		1,945		943		365		388
Noncontrolling interests (2)		(6)		(17)		(10)		(35)
Share-based compensation expense		3,623		5,970		5,820		9,138
Acquisition and divestiture-related expenses (3)		3,993		674		12,449		2,258
Redomicile-related expenses (4)		—		5,214		760		11,250
Restructuring expenses (5)		—		—		8,243		—
Adjusted EBITDA	$	87,660	$	81,706	$	158,907	$	154,856
Less:
Depreciation and accretion expense (6)		29,754		23,093		58,872		45,762
Adjusted EBITA	$	57,906	$	58,613	$	100,035	$	109,094

⁽¹⁾

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

⁽²⁾

Noncontrolling interests 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 implemented in the first quarter of 2017.

⁽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 June 30, 2017
	North America		Europe & Africa (1)		Australia & New Zealand (2)		Corporate		Eliminations		Total
	(In thousands)
Revenue from external customers	$	249,477	$	102,670	$	32,965	$	—	$	—	$	385,112
Intersegment revenues		2,379		484		—		—		(2,863)		—
Cost of revenues		170,144		65,062		24,115		183		(1,904)		257,600
Selling, general, and administrative expenses		17,774		10,084		2,501		13,111		—		43,470
Acquisition and divestiture-related expenses		578		1,518		692		1,205		—		3,993
Loss (gain) on disposal and impairment of assets		624		194		(149)		—		—		669

Adjusted EBITDA		63,914		28,010		6,341		(9,646)		(959)		87,660

Depreciation and accretion expense		17,404		10,782		1,569		—		—		29,755
Adjusted EBITA		46,511		17,228		4,772		(9,646)		(959)		57,906

Capital expenditures (3)	$	13,822	$	15,495	$	1,990	$	—	$	—	$	31,307


	Three Months Ended June 30, 2016
	North America		Europe & Africa (1)		Corporate		Eliminations		Total
	(In thousands)
Revenue from external customers	$	227,177	$	96,784	$	—	$	—	$	323,961
Intersegment revenues		2,500		331		—		(2,831)		—
Cost of revenues		151,107		61,784		270		(2,831)		210,330
Selling, general, and administrative expenses		15,954		8,961		12,997		—		37,912
Redomicile-related expenses		—		—		5,214		—		5,214
Acquisition and divestiture-related expenses		319		355		—		—		674
Loss (gain) on disposal and impairment of assets		412		(1,738)		—		—		(1,326)

Adjusted EBITDA		62,599		26,370		(7,298)		35		81,706

Depreciation and accretion expense		13,739		9,361		—		—		23,100
Adjusted EBITA		48,867		17,009		(7,298)		35		58,613

Capital expenditures (3)	$	12,371	$	10,749	$	—	$	—	$	23,120


	Six Months Ended June 30, 2017
	North America		Europe & Africa (1)		Australia & New Zealand (2)		Corporate		Eliminations		Total
	(In thousands)
Revenue from external customers	$	488,543	$	189,598	$	64,543	$	—	$	—	$	742,684
Intersegment revenues		4,370		803		—		—		(5,173)		—
Cost of revenues		336,007		123,700		47,493		140		(3,178)		504,162
Selling, general, and administrative expenses		36,026		19,717		4,351		25,325		—		85,419
Redomicile-related expenses		—		23		—		737		—		760
Restructuring expenses		3,668		831		—		3,744		—		8,243
Acquisition and divestiture-related expenses		2,148		1,993		1,711		6,597		—		12,449
Loss (gain) on disposal and impairment of assets		3,796		209		(190)		48		—		3,863

Adjusted EBITDA		120,876		46,985		12,687		(19,646)		(1,995)		158,907

Depreciation and accretion expense		34,559		20,617		3,700		—		—		58,876
Adjusted EBITA		86,321		26,368		8,987		(19,646)		(1,995)		100,035

Capital expenditures (3)	$	39,503	$	26,210	$	4,155	$	—	$	—	$	69,868


	Six Months Ended June 30, 2016
	North America		Europe & Africa (1)		Corporate		Eliminations		Total
	(In thousands)
Revenue from external customers	$	442,777	$	184,431	$	—	$	—	$	627,208
Intersegment revenues		4,669		664		—		(5,333)		—
Cost of revenues		291,500		119,649		387		(5,333)		406,203
Selling, general, and administrative expenses		32,483		18,105		24,723		—		75,311
Redomicile-related expenses		—		12		11,238		—		11,250
Acquisition and divestiture-related expenses		1,307		921		30		—		2,258
Loss (gain) on disposal and impairment of assets		756		(1,700)		—		—		(944)

Adjusted EBITDA		123,426		47,347		(15,972)		55		154,856

Depreciation and accretion expense		27,320		18,457		—		—		45,777
Adjusted EBITA		96,122		28,889		(15,972)		55		109,094

Capital expenditures (3)	$	20,137	$	19,434	$	—	$	—	$	39,571

⁽¹⁾

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

⁽²⁾

The Australia & New Zealand segment includes operations in Australia and New Zealand, which were acquired on January 6, 2017 with the DCPayments acquisition.

⁽³⁾

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



	June 30, 2017		December 31, 2016
	(In thousands)
North America	$	1,181,446	$	956,807
Europe & Africa		535,520		363,857
Australia & New Zealand		300,255		—
Corporate		17,811		44,032
Total	$	2,035,032	$	1,364,696