##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    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: 001-33864
 
 CARDTRONICS, INC.
  Delaware
    
    76-0681190(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)3250 Briarpark Drive, Suite 400
    
    77042Houston, TX
    
    (Zip Code)(Address of principal executive offices)
 (832) 308-4000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



CARDTRONICS, INC.
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)
    
    
    1Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    1Consolidated Statements of Operations for the Three and Six Months Ended June 30,
2009 and 2008
    
    
    2Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008
    
    
    3Notes to Consolidated Financial Statements
    
    
    4Cautionary Statement Regarding Forward-Looking Statements
    
    
    25Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4. Controls and Procedures
    
    
    42PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    43Item 1A. Risk Factors
    
    
    43Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    44Item 4. Submission of Matters to a Vote of Security Holders
    
    
    44Item 6. Exhibits
    
    
    45Signatures
    
    
    46Exhibit 10.1Exhibit 31.1Exhibit 31.2Exhibit 32.1
    i




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 CARDTRONICS, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, excluding share and per share amounts)
 (Unaudited)
 June 30, 2009
    
    
    December 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    6,492
    
    
    $
    3,424Accounts and notes receivable, net of allowance of $526
and $504 as of June 30, 2009 and December 31, 2008,
respectively
    
    
    23,384
    
    
    
    25,317Inventory
    
    
    2,903
    
    
    
    3,011Restricted cash, short-term
    
    
    3,833
    
    
    
    2,423Prepaid expenses, deferred costs, and other current assets
    
    
    11,110
    
    
    
    17,273Total current assets
    
    
    47,722
    
    
    
    51,448Property and equipment, net
    
    
    150,676
    
    
    
    153,430Intangible assets, net
    
    
    99,942
    
    
    
    108,327Goodwill
    
    
    165,483
    
    
    
    163,784Prepaid expenses, deferred costs, and other assets
    
    
    4,313
    
    
    
    3,839Total assets
    
    $
    468,136
    
    
    $
    480,828LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Current portion of long-term debt and notes payable
    
    $
    1,748
    
    
    $
    1,373Current portion of capital lease obligations
    
    
    605
    
    
    
    757Current portion of other long-term liabilities
    
    
    25,855
    
    
    
    24,302Accounts payable
    
    
    12,202
    
    
    
    17,212Accrued liabilities
    
    
    57,426
    
    
    
    55,174Total current liabilities
    
    
    97,836
    
    
    
    98,818Long-term liabilities:Long-term debt, net of related discounts
    
    
    326,698
    
    
    
    344,816Capital lease obligations
    
    
    
    
    
    
    235Deferred tax liability, net
    
    
    13,564
    
    
    
    11,673Asset retirement obligations
    
    
    22,777
    
    
    
    21,069Other long-term liabilities
    
    
    17,512
    
    
    
    23,967Total liabilities
    
    
    478,387
    
    
    
    500,578Commitments and contingenciesStockholders deficit:Common stock, $0.0001 par value; 125,000,000 shares
authorized; 45,750,333 and 45,642,282 shares issued as of
June 30, 2009 and December 31, 2008, respectively;
40,440,310 and 40,636,533 shares outstanding as of June
30, 2009 and December 31, 2008, respectively
    
    
    4
    
    
    
    4Subscriptions receivable (at face value)
    
    
    
    
    
    
    (34
    )Additional paid-in capital
    
    
    196,221
    
    
    
    194,101Accumulated other comprehensive loss, net
    
    
    (53,792
    )
    
    
    (64,025
    )Accumulated deficit
    
    
    (104,779
    )
    
    
    (102,199
    )Treasury stock; 5,310,023 and 5,005,749 shares at cost as
of June 30, 2009 and December 31, 2008, respectively
    
    
    (48,612
    )
    
    
    (48,221
    )Total parent stockholders deficit
    
    
    (10,958
    )
    
    
    (20,374
    )Noncontrolling interests
    
    
    707
    
    
    
    624Total stockholders deficit
    
    
    (10,251
    )
    
    
    (19,750
    )Total liabilities and stockholders deficit
    
    $
    468,136
    
    
    $
    480,828
 See accompanying notes to consolidated financial statements.
  1




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CARDTRONICS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, excluding share and per share amounts)
 (Unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:ATM operating revenues
    
    $
    121,362
    
    
    $
    122,868
    
    
    $
    234,942
    
    
    $
    239,165ATM product sales and other revenues
    
    
    3,286
    
    
    
    4,107
    
    
    
    5,051
    
    
    
    8,385Total revenues
    
    
    124,648
    
    
    
    126,975
    
    
    
    239,993
    
    
    
    247,550Cost of revenues:Cost of ATM operating revenues (excludes
depreciation, accretion, and amortization
shown separately below. See Note 1)
    
    
    83,975
    
    
    
    93,904
    
    
    
    166,204
    
    
    
    183,336Cost of ATM product sales and other revenues
    
    
    3,153
    
    
    
    3,662
    
    
    
    4,967
    
    
    
    7,826Total cost of revenues
    
    
    87,128
    
    
    
    97,566
    
    
    
    171,171
    
    
    
    191,162Gross profit
    
    
    37,520
    
    
    
    29,409
    
    
    
    68,822
    
    
    
    56,388Operating expenses:Selling, general, and administrative expenses
    
    
    10,584
    
    
    
    9,800
    
    
    
    21,439
    
    
    
    18,351Depreciation and accretion expense
    
    
    9,935
    
    
    
    9,978
    
    
    
    19,574
    
    
    
    19,010Amortization expense
    
    
    4,504
    
    
    
    4,501
    
    
    
    9,031
    
    
    
    9,004Loss on disposal of assets
    
    
    1,676
    
    
    
    1,115
    
    
    
    3,784
    
    
    
    2,435Total operating expenses
    
    
    26,699
    
    
    
    25,394
    
    
    
    53,828
    
    
    
    48,800Income from operations
    
    
    10,821
    
    
    
    4,015
    
    
    
    14,994
    
    
    
    7,588Other expense (income):Interest expense, net
    
    
    7,644
    
    
    
    7,722
    
    
    
    15,355
    
    
    
    15,354Amortization of deferred financing costs and
bond discounts
    
    
    603
    
    
    
    530
    
    
    
    1,171
    
    
    
    1,038Other (income) expense
    
    
    (1,041
    )
    
    
    17
    
    
    
    (1,127
    )
    
    
    (115
    )Total other expense
    
    
    7,206
    
    
    
    8,269
    
    
    
    15,399
    
    
    
    16,277Income (loss) before income taxes
    
    
    3,615
    
    
    
    (4,254
    )
    
    
    (405
    )
    
    
    (8,689
    )Income tax expense (benefit)
    
    
    1,016
    
    
    
    (633
    )
    
    
    2,033
    
    
    
    (181
    )Net income (loss)
    
    
    2,599
    
    
    
    (3,621
    )
    
    
    (2,438
    )
    
    
    (8,508
    )Net income attributable to noncontrolling
interests
    
    
    111
    
    
    
    
    
    
    
    142
    
    
    
    Net income (loss) attributable to controlling
interests and available to common stockholders
    
    $
    2,488
    
    
    $
    (3,621
    )
    
    $
    (2,580
    )
    
    $
    (8,508
    )Net income (loss) per common share  basic
    
    $
    0.06
    
    
    $
    (0.09
    )
    
    $
    (0.07
    )
    
    $
    (0.22
    )Net income (loss) per common share  diluted
    
    $
    0.06
    
    
    $
    (0.09
    )
    
    $
    (0.07
    )
    
    $
    (0.22
    )Weighted average shares outstanding  basic
    
    
    39,032,087
    
    
    
    38,735,027
    
    
    
    39,005,202
    
    
    
    38,662,452Weighted average shares outstanding  diluted
    
    
    39,651,363
    
    
    
    38,735,027
    
    
    
    39,005,202
    
    
    
    38,662,452
 See accompanying notes to consolidated financial statements.
  2




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CARDTRONICS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Six Months Ended June 30,2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (2,438
    )
    
    $
    (8,508
    )Adjustments to reconcile net loss to net cash provided by operating
activities:Depreciation, accretion, and amortization expense
    
    
    28,605
    
    
    
    28,014Amortization of deferred financing costs and bond discounts
    
    
    1,171
    
    
    
    1,038Stock-based compensation expense
    
    
    2,120
    
    
    
    811Deferred income taxes
    
    
    1,891
    
    
    
    (317
    )Loss on disposal of assets
    
    
    3,784
    
    
    
    2,435Other reserves and non-cash items
    
    
    (1,922
    )
    
    
    (3,805
    )Changes in assets and liabilities, net of acquisitions:Decrease in accounts and notes receivable, net
    
    
    2,070
    
    
    
    1,534Decrease (increase) in prepaid, deferred costs, and other current assets
    
    
    6,734
    
    
    
    (1,621
    )(Increase) decrease in inventory
    
    
    (47
    )
    
    
    157Decrease in other assets
    
    
    1,192
    
    
    
    394Decrease in accounts payable and accrued liabilities
    
    
    (7,710
    )
    
    
    (10,335
    )Decrease in other liabilities
    
    
    (2,745
    )
    
    
    (2,371
    )Net cash provided by operating activities
    
    
    32,705
    
    
    
    7,426Cash flows from investing activities:Additions to property and equipment
    
    
    (10,712
    )
    
    
    (42,456
    )Payments for exclusive license agreements and site acquisition costs
    
    
    (87
    )
    
    
    (497
    )Principal payments received under direct financing leases
    
    
    
    
    
    
    17Net cash used in investing activities
    
    
    (10,799
    )
    
    
    (42,936
    )Cash flows from financing activities:Proceeds from issuance of long-term debt
    
    
    27,812
    
    
    
    76,236Repayments of long-term debt and capital leases
    
    
    (46,486
    )
    
    
    (43,829
    )Repayments of borrowings under bank overdraft facility, net
    
    
    (142
    )
    
    
    (3,881
    )Payments received on subscriptions receivable
    
    
    34
    
    
    
    101Proceeds from exercises of stock options
    
    
    
    
    
    
    286Equity offering costs
    
    
    
    
    
    
    (1,489
    )Debt issuance and modification costs
    
    
    (458
    )
    
    
    (54
    )Repurchase of common stock
    
    
    (92
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (19,332
    )
    
    
    27,370Effect of exchange rate changes on cash
    
    
    494
    
    
    
    (144
    )Net increase (decrease) in cash and cash equivalents
    
    
    3,068
    
    
    
    (8,284
    )Cash and cash equivalents as of beginning of period
    
    
    3,424
    
    
    
    13,439Cash and cash equivalents as of end of period
    
    $
    6,492
    
    
    $
    5,155Supplemental disclosure of cash flow information:Cash paid for interest, including interest on capital leases
    
    $
    15,525
    
    
    $
    16,096Cash paid for income taxes
    
    $
    285
    
    
    $
    220
 See accompanying notes to consolidated financial statements.
  3




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CARDTRONICS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 (1) General and Basis of Presentation
 General
  Basis of Presentation
  Note 2 Revision of Prior Period
Financial Statements
 Note 16 Noncontrolling
Interests in Consolidated Financial Statements  an amendment of ARB No. 5
   4




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Cost of ATM Operating Revenues and Gross Profit Presentation
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Depreciation and
accretion expenses
related to ATMs and
ATM-related assets
    
    $
    8,237
    
    
    $
    8,673
    
    
    $
    16,274
    
    
    $
    16,585Amortization expense
    
    
    4,503
    
    
    
    4,501
    
    
    
    9,030
    
    
    
    9,004Total depreciation,
accretion, and
amortization expenses
excluded from Cost of
ATM operating revenues
and Gross profit
    
    $
    12,740
    
    
    $
    13,174
    
    
    $
    25,304
    
    
    $
    25,589
 (2)
    
    Revision of Prior Period Financial Statements   Consolidated
Balance Sheet:
 December 31, 2008As Reported
    
    
    Adjustments
    
    
    As Adjusted(In thousands)Property and equipment, net
    
    $
    154,829
    
    
    $
    (1,399
    )
    
    $
    153,430Total assets
    
    
    482,227
    
    
    
    (1,399
    )
    
    
    480,828Accumulated other comprehensive loss, net
    
    
    (64,355
    )
    
    
    330
    
    
    
    (64,025
    )Accumulated deficit
    
    
    (100,470
    )
    
    
    (1,729
    )
    
    
    (102,199
    )Total parent stockholders deficit
    
    
    (18,975
    )
    
    
    (1,399
    )
    
    
    (20,374
    )Total stockholders deficit
    
    
    (18,351
    )
    
    
    (1,399
    )
    
    
    (19,750
    )Total liabilities and stockholders deficit
    
    
    482,227
    
    
    
    (1,399
    )
    
    
    480,828
  5




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Consolidated
Statements of Operations:
 Three Months Ended
    
    
    Six Months EndedJune 30, 2008
    
    
    June 30, 2008As Reported
    
    
    Adjustments
    
    
    As Adjusted
    
    
    As Reported
    
    
    Adjustments
    
    
    As Adjusted(In thousands,
excluding per share amounts)Cost of ATM operating revenues
    
    $
    93,601
    
    
    $
    303
    
    
    $
    93,904
    
    
    $
    182,702
    
    
    $
    634
    
    
    $
    183,336Total cost of revenues
    
    
    97,263
    
    
    
    303
    
    
    
    97,566
    
    
    
    190,528
    
    
    
    634
    
    
    
    191,162Gross profit
    
    
    29,712
    
    
    
    (303
    )
    
    
    29,409
    
    
    
    57,022
    
    
    
    (634
    )
    
    
    56,388Depreciation and accretion expense
    
    
    10,039
    
    
    
    (61
    )
    
    
    9,978
    
    
    
    19,121
    
    
    
    (111
    )
    
    
    19,010Loss on disposal of assets(1)
    
    
    
    
    
    
    1,115
    
    
    
    1,115
    
    
    
    
    
    
    
    2,435
    
    
    
    2,435Total operating expenses(2)
    
    
    24,340
    
    
    
    1,054
    
    
    
    25,394
    
    
    
    46,476
    
    
    
    2,324
    
    
    
    48,800Income from operations(2)
    
    
    5,372
    
    
    
    (1,357
    )
    
    
    4,015
    
    
    
    10,546
    
    
    
    (2,958
    )
    
    
    7,588Other expense(2)
    
    
    1,042
    
    
    
    (1,025
    )
    
    
    17
    
    
    
    2,103
    
    
    
    (2,218
    )
    
    
    (115
    )Total other expense(2)
    
    
    9,294
    
    
    
    (1,025
    )
    
    
    8,269
    
    
    
    18,495
    
    
    
    (2,218
    )
    
    
    16,277Loss before income taxes
    
    
    (3,922
    )
    
    
    (332
    )
    
    
    (4,254
    )
    
    
    (7,949
    )
    
    
    (740
    )
    
    
    (8,689
    )Income tax (benefit) expense
    
    
    (540
    )
    
    
    (93
    )
    
    
    (633
    )
    
    
    25
    
    
    
    (206
    )
    
    
    (181
    )Net loss
    
    
    (3,382
    )
    
    
    (239
    )
    
    
    (3,621
    )
    
    
    (7,974
    )
    
    
    (534
    )
    
    
    (8,508
    )Net loss attributable to controlling
interests and available to common
stockholders
    
    
    (3,382
    )
    
    
    (239
    )
    
    
    (3,621
    )
    
    
    (7,974
    )
    
    
    (534
    )
    
    
    (8,508
    )Net loss per common share  basic and
diluted
    
    
    (0.09
    )
    
    
    
    
    
    
    (0.09
    )
    
    
    (0.21
    )
    
    
    (0.01
    )
    
    
    (0.22
    )
 (1)
    
    Previously reported as a component of Other expense.(2)
    
    Of the Adjustments presented above, $1,025,000 and $2,218,000 for the three and
six months ended June 30, 2008, respectively, relates to the reclassification of Loss on
disposal of assets from a component of Other expense. Year Ended December 31, 2008
    
    
    Year Ended December 31, 2007As Reported
    
    
    Adjustments
    
    
    As Adjusted
    
    
    As Reported
    
    
    Adjustments
    
    
    As Adjusted(In thousands,
excluding per share amounts)Cost of ATM operating revenues
    
    $
    361,902
    
    
    $
    1,014
    
    
    $
    362,916
    
    
    $
    281,351
    
    
    $
    354
    
    
    $
    281,705Total cost of revenues
    
    
    377,527
    
    
    
    1,014
    
    
    
    378,541
    
    
    
    293,293
    
    
    
    354
    
    
    
    293,647Gross profit
    
    
    115,487
    
    
    
    (1,014
    )
    
    
    114,473
    
    
    
    85,005
    
    
    
    (354
    )
    
    
    84,651Depreciation and accretion expense
    
    
    39,414
    
    
    
    (250
    )
    
    
    39,164
    
    
    
    26,859
    
    
    
    (78
    )
    
    
    26,781Loss on disposal of assets(1)
    
    
    
    
    
    
    5,807
    
    
    
    5,807
    
    
    
    
    
    
    
    2,485
    
    
    
    2,485Total operating expenses(2)
    
    
    147,034
    
    
    
    5,557
    
    
    
    152,591
    
    
    
    75,086
    
    
    
    2,407
    
    
    
    77,493(Loss) Income from operations(2)
    
    
    (31,547
    )
    
    
    (6,571
    )
    
    
    (38,118
    )
    
    
    9,919
    
    
    
    (2,761
    )
    
    
    7,158Minority interest in subsidiary(3)
    
    
    (1,022
    )
    
    
    1,022
    
    
    
    
    
    
    
    (376
    )
    
    
    376
    
    
    
    Other expense (income)(2)
    
    
    5,377
    
    
    
    (5,284
    )
    
    
    93
    
    
    
    1,585
    
    
    
    (2,211
    )
    
    
    (626
    )Total other expense(2) (3)
    
    
    37,552
    
    
    
    (4,262
    )
    
    
    33,290
    
    
    
    32,373
    
    
    
    (1,835
    )
    
    
    30,538Loss before income taxes
    
    
    (69,099
    )
    
    
    (2,309
    )
    
    
    (71,408
    )
    
    
    (22,454
    )
    
    
    (926
    )
    
    
    (23,380
    )Income tax (benefit) expense
    
    
    938
    
    
    
    51
    
    
    
    989
    
    
    
    4,636
    
    
    
    (159
    )
    
    
    4,477Net loss
    
    
    (70,037
    )
    
    
    (2,360
    )
    
    
    (72,397
    )
    
    
    (27,090
    )
    
    
    (767
    )
    
    
    (27,857
    )Net loss attributable to noncontrolling
interests
    
    
    
    
    
    
    (1,022
    )
    
    
    (1,022
    )
    
    
    
    
    
    
    (376
    )
    
    
    (376
    )Net loss attributable to controlling
interests and available to common stockholders
    
    
    (70,037
    )
    
    
    (1,338
    )
    
    
    (71,375
    )
    
    
    (63,362
    )
    
    
    (391
    )
    
    
    (63,753
    )Net loss per common share  basic and diluted
    
    
    (1.81
    )
    
    
    (0.03
    )
    
    
    (1.84
    )
    
    
    (4.11
    )
    
    
    (0.02
    )
    
    
    (4.13
    )
 (1)
    
    Previously reported as a component of Other expense.(2)
    
    Of the Adjustments presented above, $5,284,000 and $2,211,000 for the years ended
December 31, 2008 and 2007, respectively, relates to the reclassification of Loss on disposal
of assets from a component of Other expense.(3)
    
    Of the Adjustments presented above, $1,022,000 and $376,000 for the years ended
December 31, 2008 and 2007, respectively, relates to the reclassification of Minority
interest in subsidiary to Net loss attributable to noncontrolling interests.  6




---



##### Table of Contents



Consolidated
Statement of Cash Flows:
 Six Months Ended June 30, 2008As Reported
    
    
    Adjustments
    
    
    As Adjusted(In thousands)Cash flows from operating activities:Net loss
    
    $
    (7,974
    )
    
    $
    (534
    )
    
    $
    (8,508
    )Adjustments to reconcile net loss to net cash
provided by operating activities:Depreciation, accretion, and amortization expense
    
    
    28,125
    
    
    
    (111
    )
    
    
    28,014Deferred income taxes
    
    
    (111
    )
    
    
    (206
    )
    
    
    (317
    )Loss on disposal of assets(1)
    
    
    2,056
    
    
    
    379
    
    
    
    2,435Other reserves and non-cash items(1)
    
    
    (3,643
    )
    
    
    (162
    )
    
    
    (3,805
    )Net cash provided by operating activities
    
    
    8,060
    
    
    
    (634
    )
    
    
    7,426Cash flows
from investing activities:Additions to property and equipment
    
    
    (43,090
    )
    
    
    634
    
    
    
    (42,456
    )Net cash
used in investing activities
    
    
    (43,570
    )
    
    
    634
    
    
    
    (42,936
    )
 (1)
    
    Of the Adjustments presented above, $162,000 relates to the reclassification
of certain non-cash items previously included in Loss on disposal of assets to Other
reserves and non-cash items. (3)
    
    Stock-Based Compensation Share-Based Payment,
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Cost of ATM operating revenues
    
    $
    193
    
    
    $
    132
    
    
    $
    384
    
    
    $
    197Selling, general, and administrative expenses
    
    
    869
    
    
    
    413
    
    
    
    1,736
    
    
    
    614Total stock-based compensation expense
    
    $
    1,062
    
    
    $
    545
    
    
    $
    2,120
    
    
    $
    811
  Options.
 WeightedNumber
    
    
    Averageof Shares
    
    
    Exercise PriceOptions outstanding as of January 1, 2009
    
    
    4,288,942
    
    
    $
    7.96Granted
    
    
    40,000
    
    
    $
    2.11Exercised
    
    
    (8,051
    )
    
    $
    0.03Forfeited
    
    
    (44,807
    )
    
    $
    10.02Options outstanding as of June 30, 2009
    
    
    4,276,084
    
    
    $
    7.90Options vested and exercisable as of June 30, 2009
    
    
    3,416,352
    
    
    $
    7.20
   7




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##### Table of Contents



Restricted Stock.
 Numberof SharesRestricted shares outstanding as of January 1, 2009
    
    
    1,679,250Granted
    
    
    100,000Forfeited
    
    
    (195,000
    )Vested
    
    
    (375,438
    )Restricted shares outstanding as of June 30, 2009
    
    
    1,208,812
  (4) Earnings per Share
 Earnings per
Share
 Determining Whether
Instruments Granted in Share-Based Payment Transactions are Participating Securities
 Earnings
per Share (in thousands, excluding share and per share amounts):
 Three months ended June 30, 2009UnvestedCommon Stock
    
    
    Restricted SharesNet income attributed to each class of
common stock and participating security
    
    $
    2,398
    
    
    $
    90Weighted-average shares outstanding  Basic
    
    
    39,032,087
    
    
    
    1,487,744Weighted-average shares outstanding  Diluted
    
    
    39,651,363
    
    
    
    1,487,744Earnings per share  Basic and Diluted
    
    $
    0.06
    
    
    $
    0.06
   8




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##### Table of Contents



(5) Comprehensive Income (Loss)
 Reporting Comprehensive Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Net income (loss)
    
    $
    2,599
    
    
    $
    (3,621
    )
    
    $
    (2,438
    )
    
    $
    (8,508
    )Unrealized gains on interest rate hedges, net of taxes
    
    
    343
    
    
    
    18,421
    
    
    
    1,536
    
    
    
    4,956Foreign currency translation adjustments
    
    
    10,113
    
    
    
    157
    
    
    
    8,697
    
    
    
    (1,249
    )Total comprehensive income (loss)
    
    
    13,055
    
    
    
    14,957
    
    
    
    7,795
    
    
    
    (4,801
    )Less: comprehensive income (loss) attributable to
noncontrolling interests
    
    
    162
    
    
    
    (14
    )
    
    
    171
    
    
    
    10Comprehensive income (loss) attributable to
controlling interests
    
    $
    12,893
    
    
    $
    14,971
    
    
    $
    7,624
    
    
    $
    (4,811
    )
  June 30, 2009
    
    
    December 31, 2008(In thousands)Unrealized losses on interest rate hedges
    
    $
    (30,616
    )
    
    $
    (32,152
    )Foreign currency translation adjustments
    
    
    (23,176
    )
    
    
    (31,873
    )Total accumulated other comprehensive loss
    
    $
    (53,792
    )
    
    $
    (64,025
    )
  (6) Intangible Assets
 Intangible Assets with Indefinite Lives
  Goodwill
    
    
    Trade NameU.S.
    
    
    U.K.
    
    
    Mexico
    
    
    U.S.
    
    
    U.K.
    
    
    Total(In thousands)Balance as of January 1, 2009
    
    $
    150,461
    
    
    $
    12,603
    
    
    $
    720
    
    
    $
    200
    
    
    $
    2,922
    
    
    $
    166,906Foreign currency translation adjustments
    
    
    
    
    
    
    1,704
    
    
    
    (5
    )
    
    
    
    
    
    
    395
    
    
    
    2,094Balance as of June 30, 2009
    
    $
    150,461
    
    
    $
    14,307
    
    
    $
    715
    
    
    $
    200
    
    
    $
    3,317
    
    
    $
    169,000
 Intangible Assets with Definite Lives
  GrossCarrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    Amount(In thousands)Customer and branding contracts/relationships
    
    $
    158,585
    
    
    $
    (72,895
    )
    
    $
    85,690Deferred financing costs
    
    
    14,535
    
    
    
    (6,694
    )
    
    
    7,841Exclusive license agreements
    
    
    5,475
    
    
    
    (2,885
    )
    
    
    2,590Non-compete agreements
    
    
    432
    
    
    
    (128
    )
    
    
    304Total
    
    $
    179,027
    
    
    $
    (82,602
    )
    
    $
    96,425
  9




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##### Table of Contents



(7) Accrued Liabilities
  June 30, 2009
    
    
    December 31, 2008(In thousands)Accrued merchant fees
    
    $
    11,588
    
    
    $
    10,291Accrued interest expense
    
    
    10,565
    
    
    
    10,643Accrued maintenance fees
    
    
    6,663
    
    
    
    4,273Accrued armored fees
    
    
    5,229
    
    
    
    5,372Accrued compensation
    
    
    4,919
    
    
    
    3,396Accrued merchant settlement amounts
    
    
    3,856
    
    
    
    3,111Accrued cash rental and management fees
    
    
    2,943
    
    
    
    3,693Accrued processing costs
    
    
    2,403
    
    
    
    1,804Accrued purchases
    
    
    1,872
    
    
    
    1,085Accrued interest rate swap payments
    
    
    1,847
    
    
    
    1,836Accrued ATM telecommunications costs
    
    
    1,249
    
    
    
    1,916Other accrued expenses
    
    
    4,292
    
    
    
    7,754Total
    
    $
    57,426
    
    
    $
    55,174
 (8) Long-Term Debt
  June 30, 2009
    
    
    December 31, 2008(In thousands)Revolving credit facility
    
    $
    24,500
    
    
    $
    43,500Senior subordinated notes due August 2013 (net
of unamortized discounts of $3.1 million and
$3.4 million as of June 30, 2009 and December
31, 2008)
    
    
    296,932
    
    
    
    296,637Other
    
    
    7,014
    
    
    
    6,052Total
    
    
    328,446
    
    
    
    346,189Less: current portion
    
    
    1,748
    
    
    
    1,373Total long-term debt, excluding current portion
    
    $
    326,698
    
    
    $
    344,816
 Revolving Credit Facility
    10




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##### Table of Contents



Other Facilities
 Cardtronics Mexico equipment financing agreements.
 Bank Machine overdraft facility.
 (9) Asset Retirement Obligations
 Asset Retirement Obligations,
 (in thousands)
 Asset retirement obligation as of January 1, 2009
    
    $
    21,069Additional obligations
    
    
    1,522Accretion expense
    
    
    973Payments
    
    
    (1,783
    )Foreign currency translation adjustments
    
    
    996Asset retirement obligation as of June 30, 2009
    
    $
    22,777
 Note 12 Fair Value Measurements
 (10) Other Liabilities
  June 30, 2009
    
    
    December 31, 2008(In thousands)Current Portion of Other Long-Term Liabilities:Interest rate swaps
    
    $
    19,834
    
    
    $
    13,788Obligations associated with acquired unfavorable contracts
    
    
    3,677
    
    
    
    8,203Deferred revenue
    
    
    1,954
    
    
    
    1,879Other
    
    
    390
    
    
    
    432Total
    
    $
    25,855
    
    
    $
    24,302Other Long-Term Liabilities:Interest rate swaps
    
    $
    10,782
    
    
    $
    18,364Deferred revenue
    
    
    2,922
    
    
    
    3,604Other long-term liabilities
    
    
    3,808
    
    
    
    1,999Total
    
    $
    17,512
    
    
    $
    23,967
   11




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##### Table of Contents



(11) Derivative Financial Instruments
 Accounting Policy
 Accounting for Derivative Instruments and Hedging Activities, as amended Disclosures about Derivative
Instruments and Hedging Activities
   WeightedNotional Amounts
    
    Notional Amounts
    
    
    Notional Amounts
    
    
    Average FixedUnited States
    
    United Kingdom
    
    
    Consolidated(1)
    
    
    Rate
    
    
    Term(In thousands)$
    550,000
    
    £
    
    
    
    $
    550,000
    
    
    
    4.30
    %
    
    July 1, 2009  December 31, 2009$
    600,000
    
    £
    50,000
    
    
    $
    682,936
    
    
    
    3.92
    %
    
    January 1, 2010  December 31, 2010$
    550,000
    
    £
    50,000
    
    
    $
    632,936
    
    
    
    3.66
    %
    
    January 1, 2011  December 31, 2011$
    350,000
    
    £
    25,000
    
    
    $
    391,468
    
    
    
    3.82
    %
    
    January 1, 2012  December 31, 2012$
    100,000
    
    £
    
    
    
    $
    100,000
    
    
    
    4.11
    %
    
    January 1, 2013  December 31, 2013
 (1)
    
    United Kingdom pound sterling amounts have been
converted into United States dollars at $1.65873 to
£1.00, which was the exchange rate in effect as of June
30, 2009.  Cash Flow Hedging Strategy
   12




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##### Table of Contents



Tabular Disclosures
  Balance Sheet Data
 Liability Derivative InstrumentsJune 30, 2009
    
    
    December 31, 2008Derivatives Designated as Hedging
    
    Balance Sheet
    
    
    
    
    
    
    Balance SheetInstruments Under SFAS No. 133
    
    Location
    
    
    Fair Value
    
    
    Location
    
    
    Fair Value(In thousands)Interest rate swap contracts
    
    Current portion of other long-term liabilities
    
    $
    19,834
    
    
    Current portion of other long-term liabilities
    
    $
    13,788Interest rate swap contracts
    
    Other long-term liabilities
    
    
    10,782
    
    
    Other long-term liabilities
    
    
    18,364Total
    
    
    
    
    
    $
    30,616
    
    
    
    
    
    
    $
    32,152
  Statements of Operations Data
 Three Months Ended June 30,Location of Gain (Loss)Amount of Gain (Loss)
    
    
    Reclassified from
    
    
    Amount of Loss Reclassified fromDerivatives in SFAS No. 133
    
    Recognized in OCI on Derivative
    
    
    Accumulated OCI into
    
    
    Accumulated OCI into IncomeCash Flow Hedging
    
    Instruments (Effective Portion)
    
    
    Income (Effective
    
    
    (Effective Portion)Relationships
    
    2009
    
    
    2008
    
    
    Portion)
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    (In thousands)Interest rate swap contracts
    
    $
    5,934
    
    
    $
    21,551
    
    
    Cost of ATM operating revenues
    
    
    $
    (5,591
    )
    
    $
    (3,130
    )
  13




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##### Table of Contents



Six Months Ended June 30,Location of Gain (Loss)Amount of Gain (Loss)
    
    
    Reclassified from
    
    
    Amount of Loss Reclassified fromDerivatives in SFAS No. 133
    
    Recognized in OCI on Derivative
    
    
    Accumulated OCI into
    
    
    Accumulated OCI into IncomeCash Flow Hedging
    
    Instruments (Effective Portion)
    
    
    Income (Effective
    
    
    (Effective Portion)Relationships
    
    2009
    
    
    2008
    
    
    Portion)
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    (In thousands)Interest rate swap contracts
    
    $
    12,574
    
    
    $
    9,973
    
    
    Cost of ATM operating revenues
    
    
    $
    (11,038
    )
    
    $
    (5,017
    )
   Note 12 Fair Value Measurements
 (12) Fair Value Measurements
 Fair Value Measurements Effective Date of Financial Accounting Standards Board
(FASB) Statement No. 157
  Fair Value MeasurementsTotal CarryingValue
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Liabilities associated with interest rate swaps
    
    $
    30,616
    
    
    $
    
    
    
    $
    30,616
    
    
    $
    
  Fair Value MeasurementsTotal CarryingValue
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Asset retirement
obligations 
liabilities added
during the six
months ended June
30, 2009
    
    $
    1,522
    
    
    $
    
    
    
    $
    
    
    
    $
    1,522
  14




---



##### Table of Contents



ash and cash equivalents, accounts and notes receivable, net of the allowance for doubtful
accounts, other current assets, accounts payable, accrued expenses, and other current liabilities.
 Interest rate swaps.
 Additions to asset retirement obligation liability.
  Disclosures about Fair Value of Financial Instruments
 Interim Disclosures about Fair
Value of Financial Instruments. Disclosures about Fair Value of
Financial Instruments Interim Financial Reporting
 Note 11 Note 8
 (13) Commitments and Contingencies
 Legal and Other Regulatory Matters
   15




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##### Table of Contents



Other Commitments
 Asset Retirement Obligations. Note 9
 (14) Income Taxes
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Income tax expense (benefit)
    
    $
    1,016
    
    
    $
    (633
    )
    
    $
    2,033
    
    
    $
    (181
    )Effective tax rate
    
    
    28.1
    %
    
    
    14.9
    %
    
    
    (502.0
    )%
    
    
    2.1
    %
   16




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##### Table of Contents



(15) Segment Information
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)EBITDA
    
    $
    26,190
    
    
    $
    18,477
    
    
    $
    44,584
    
    
    $
    35,717Depreciation and accretion expense
    
    
    9,935
    
    
    
    9,978
    
    
    
    19,574
    
    
    
    19,010Amortization expense
    
    
    4,504
    
    
    
    4,501
    
    
    
    9,031
    
    
    
    9,004Interest expense, net, including amortization of
deferred financing costs and bond discounts
    
    
    8,247
    
    
    
    8,252
    
    
    
    16,526
    
    
    
    16,392Income tax expense (benefit)
    
    
    1,016
    
    
    
    (633
    )
    
    
    2,033
    
    
    
    (181
    )Net income (loss) attributable to controlling interests
    
    $
    2,488
    
    
    $
    (3,621
    )
    
    $
    (2,580
    )
    
    $
    (8,508
    )
  For the Three Month Period Ended June 30, 2009United States
    
    
    United Kingdom
    
    
    Mexico
    
    
    Eliminations
    
    
    Total(In thousands)Revenue from external customers
    
    $
    102,270
    
    
    $
    18,031
    
    
    $
    4,347
    
    
    $
    
    
    
    $
    124,648Intersegment revenues
    
    
    512
    
    
    
    
    
    
    
    
    
    
    
    (512
    )
    
    
    Cost of revenues
    
    
    71,248
    
    
    
    13,085
    
    
    
    3,307
    
    
    
    (512
    )
    
    
    87,128Selling, general, and
administrative expenses
(1)
    
    
    9,050
    
    
    
    1,268
    
    
    
    266
    
    
    
    
    
    
    
    10,584Loss on disposal of assets
    
    
    995
    
    
    
    681
    
    
    
    
    
    
    
    
    
    
    
    1,676EBITDA
    
    
    22,393
    
    
    
    3,057
    
    
    
    850
    
    
    
    (110
    )
    
    
    26,190Depreciation and accretion expense
    
    
    6,768
    
    
    
    2,727
    
    
    
    445
    
    
    
    (5
    )
    
    
    9,935Amortization expense
    
    
    4,051
    
    
    
    443
    
    
    
    10
    
    
    
    
    
    
    
    4,504Interest expense, net
    
    
    6,817
    
    
    
    1,260
    
    
    
    170
    
    
    
    
    
    
    
    8,247Capital expenditures, excluding
acquisitions (2)
    
    $
    3,257
    
    
    $
    2,106
    
    
    $
    460
    
    
    $
    
    
    
    $
    5,823
  17




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##### Table of Contents



For the Three Month Period Ended June 30, 2008United States
    
    
    United Kingdom
    
    
    Mexico
    
    
    Eliminations
    
    
    Total(In thousands)Revenue from external customers
    
    $
    104,051
    
    
    $
    19,701
    
    
    $
    3,223
    
    
    $
    
    
    
    $
    126,975Intersegment revenues
    
    
    365
    
    
    
    
    
    
    
    
    
    
    
    (365
    )
    
    
    Cost of revenues
    
    
    77,343
    
    
    
    17,843
    (1)
    
    
    2,745
    
    
    
    (365
    )
    
    
    97,566Selling, general, and administrative expenses
    
    
    7,985
    
    
    
    1,538
    
    
    
    277
    
    
    
    
    
    
    
    9,800Loss on disposal of assets
    
    
    656
    
    
    
    459
    
    
    
    
    
    
    
    
    
    
    
    1,115EBITDA
    
    
    18,683
    
    
    
    (255
    )(1)
    
    
    49
    
    
    
    
    
    
    
    18,477Depreciation and accretion expense
    
    
    6,583
    
    
    
    2,994
    
    
    
    406
    
    
    
    (5
    )
    
    
    9,978Amortization expense
    
    
    3,952
    
    
    
    536
    
    
    
    13
    
    
    
    
    
    
    
    4,501Interest expense, net
    
    
    6,607
    
    
    
    1,432
    
    
    
    213
    
    
    
    
    
    
    
    8,252Capital expenditures, excluding acquisitions
(2)
    
    $
    6,115
    
    
    $
    8,376
    
    
    $
    2,696
    
    
    $
    
    
    
    $
    17,187
 For the Six Month Period Ended June 30, 2009United States
    
    
    United Kingdom
    
    
    Mexico
    
    
    Eliminations
    
    
    Total(In thousands)Revenue from external customers
    
    $
    199,037
    
    
    $
    32,808
    
    
    $
    8,148
    
    
    $
    
    
    
    $
    239,993Intersegment revenues
    
    
    886
    
    
    
    
    
    
    
    
    
    
    
    (886
    )
    
    
    Cost of revenues
    
    
    142,030
    
    
    
    23,792
    
    
    
    6,235
    
    
    
    (886
    )
    
    
    171,171Selling, general, and
administrative expenses
(3)
    
    
    18,686
    
    
    
    2,285
    
    
    
    468
    
    
    
    
    
    
    
    21,439Loss on disposal of assets
    
    
    1,390
    
    
    
    2,394
    
    
    
    
    
    
    
    
    
    
    
    3,784EBITDA
    
    
    38,901
    
    
    
    4,348
    
    
    
    1,467
    
    
    
    (132
    )
    
    
    44,584Depreciation and accretion expense
    
    
    13,573
    
    
    
    5,163
    
    
    
    848
    
    
    
    (10
    )
    
    
    19,574Amortization expense
    
    
    8,170
    
    
    
    842
    
    
    
    19
    
    
    
    
    
    
    
    9,031Interest expense, net
    
    
    13,739
    
    
    
    2,476
    
    
    
    311
    
    
    
    
    
    
    
    16,526Capital expenditures, excluding
acquisitions (2)
    
    $
    6,312
    
    
    $
    3,873
    
    
    $
    614
    
    
    $
    
    
    
    $
    10,799
 For the Six Month Period Ended June 30, 2008United States
    
    
    United Kingdom
    
    
    Mexico
    
    
    Eliminations
    
    
    Total(In thousands)Revenue from external customers
    
    $
    204,404
    
    
    $
    37,341
    
    
    $
    5,805
    
    
    $
    
    
    
    $
    247,550Intersegment revenues
    
    
    365
    
    
    
    
    
    
    
    
    
    
    
    (365
    )
    
    
    Cost of revenues
    
    
    154,029
    
    
    
    32,566
    (1)
    
    
    4,932
    
    
    
    (365
    )
    
    
    191,162Selling, general, and administrative expenses
    
    
    15,310
    
    
    
    2,466
    
    
    
    575
    
    
    
    
    
    
    
    18,351Loss on disposal of assets
    
    
    1,528
    
    
    
    907
    
    
    
    
    
    
    
    
    
    
    
    2,435EBITDA
    
    
    34,310
    
    
    
    1,231
    (1)
    
    
    176
    
    
    
    
    
    
    
    35,717Depreciation and accretion expense
    
    
    12,696
    
    
    
    5,626
    
    
    
    715
    
    
    
    (27
    )
    
    
    19,010Amortization expense
    
    
    7,905
    
    
    
    1,074
    
    
    
    25
    
    
    
    
    
    
    
    9,004Interest expense, net
    
    
    13,110
    
    
    
    2,888
    
    
    
    394
    
    
    
    
    
    
    
    16,392Capital expenditures, excluding acquisitions
(2)
    
    $
    21,958
    
    
    $
    18,232
    
    
    $
    2,763
    
    
    $
    
    
    
    $
    42,953
 
 (1)
    
    During the second quarter of 2008, we experienced a
significant increase in transactions conducted on our
ATMs in the United Kingdom with counterfeit credit
cards. Due to a delay in the completion of our Europay
MasterCard Visa (EMV) security standard certification
with the network whose brand was on those cards, we are
liable under the networks rules for the resulting
claims, which totaled approximately $1.3 million. As a
result, our cost of revenues and EBITDA were negatively
impacted by the $1.3 million charge during the three
and six month periods ended June 30, 2008.(2)
    
    Capital expenditure amounts include payments made for
exclusive license agreements and site acquisition
costs. Additionally, capital expenditure amounts for
Mexico are reflected gross of any noncontrolling
interest amounts.(3)
    
    Selling, general, and administrative expenses for the
six months ended June 30, 2009 includes $1.2 million in
severance costs associated with the departure of the
Companys former Chief Executive Officer in March 2009.  18




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##### Table of Contents



Identifiable Assets:
 June 30, 2009
    
    
    December 31, 2008(In thousands)United States
    
    $
    705,177
    
    
    $
    733,921United Kingdom
    
    
    83,810
    
    
    
    74,876Mexico
    
    
    13,011
    
    
    
    11,736Eliminations
    
    
    (333,862
    )
    
    
    (339,705
    )Total
    
    $
    468,136
    
    
    $
    480,828
 (16)
    
    New Accounting Pronouncements Adopted
 Disclosures about Derivative Instruments and
Hedging Activities, Note 11 Fair Value Measurements Note 12
 Noncontrolling Interests Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Business Combinations. Business Combinations
 Useful Life of Intangible Assets. Determination of the Useful Life of
Intangible Assets, Goodwill and Other Intangible Assets
 Unvested Participating Securities. Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating Securities,
  19




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##### Table of Contents



Interim Disclosures about Fair Value. Interim Disclosures about Fair Value of Financial Instruments. Disclosures about Fair Value of Financial Instruments Interim Financial Reporting Note 12, Fair Value Measurements
 Subsequent Events. Subsequent Events Note 1, General and Basis of Presentation
 Issued but Not Yet Adopted
 FASB Accounting Standards Codification The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principlesa replacement of FASB Statement No. 162
 (17) Supplemental Guarantor Financial Information
  Condensed Consolidating Statements of Operations
 Three Months Ended June 30, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Revenues
    
    $
    
    
    
    $
    102,782
    
    
    $
    22,378
    
    
    $
    (512
    )
    
    $
    124,648Operating costs and expenses
    
    
    1,156
    
    
    
    90,956
    
    
    
    22,232
    
    
    
    (517
    )
    
    
    113,827Operating income (loss)
    
    
    (1,156
    )
    
    
    11,826
    
    
    
    146
    
    
    
    5
    
    
    
    10,821Interest expense, net, including
amortization of deferred
financing costs and bond
discounts
    
    
    812
    
    
    
    6,005
    
    
    
    1,430
    
    
    
    
    
    
    
    8,247Equity in
earnings of subsidiaries
    
    
    (5,483
    )
    
    
    
    
    
    
    
    
    
    
    5,483
    
    
    
    Other
income, net
    
    
    (24
    )
    
    
    (882
    )
    
    
    (135
    )
    
    
    
    
    
    
    (1,041
    )Income (loss) before income taxes
    
    
    3,539
    
    
    
    6,703
    
    
    
    (1,149
    )
    
    
    (5,478
    )
    
    
    3,615Income tax expense
    
    
    945
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    1,016Net income (loss)
    
    
    2,594
    
    
    
    6,632
    
    
    
    (1,149
    )
    
    
    (5,478
    )
    
    
    2,599Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    111Net income (loss) attributable
to controlling interests and
available to common stockholders
    
    $
    2,594
    
    
    $
    6,632
    
    
    $
    (1,149
    )
    
    $
    (5,589
    )
    
    $
    2,488
  20




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##### Table of Contents



Three Months Ended June 30, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Revenues
    
    $
    
    
    
    $
    104,416
    
    
    $
    22,924
    
    
    $
    (365
    )
    
    $
    126,975Operating costs and expenses
    
    
    673
    
    
    
    95,846
    
    
    
    26,811
    
    
    
    (370
    )
    
    
    122,960Operating income (loss)
    
    
    (673
    )
    
    
    8,570
    
    
    
    (3,887
    )
    
    
    5
    
    
    
    4,015Interest expense, net, including
amortization of deferred
financing costs and bond
discounts
    
    
    34
    
    
    
    6,573
    
    
    
    1,645
    
    
    
    
    
    
    
    8,252Equity in losses of subsidiaries
    
    
    2,201
    
    
    
    
    
    
    
    
    
    
    
    (2,201
    )
    
    
    Other (income) expense, net
    
    
    (116
    )
    
    
    (135
    )
    
    
    268
    
    
    
    
    
    
    
    17Income (loss) before income taxes
    
    
    (2,792
    )
    
    
    2,132
    
    
    
    (5,800
    )
    
    
    2,206
    
    
    
    (4,254
    )Income tax
expense (benefit)
    
    
    834
    
    
    
    
    
    
    
    (1,467
    )
    
    
    
    
    
    
    (633
    )Net income (loss)
    
    
    (3,626
    )
    
    
    2,132
    
    
    
    (4,333
    )
    
    
    2,206
    
    
    
    (3,621
    )Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
attributable to controlling
interests and available to
common stockholders
    
    $
    (3,626
    )
    
    $
    2,132
    
    
    $
    (4,333
    )
    
    $
    2,206
    
    
    $
    (3,621
    )
 Six Months Ended June 30, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Revenues
    
    $
    
    
    
    $
    199,923
    
    
    $
    40,956
    
    
    $
    (886
    )
    
    $
    239,993Operating costs and expenses
    
    
    2,289
    
    
    
    181,560
    
    
    
    42,046
    
    
    
    (896
    )
    
    
    224,999Operating income (loss)
    
    
    (2,289
    )
    
    
    18,363
    
    
    
    (1,090
    )
    
    
    10
    
    
    
    14,994Interest expense, net, including
amortization of deferred
financing costs and bond
discounts
    
    
    1,308
    
    
    
    12,431
    
    
    
    2,787
    
    
    
    
    
    
    
    16,526Equity in
earnings of subsidiaries
    
    
    (2,849
    )
    
    
    
    
    
    
    
    
    
    
    2,849
    
    
    
    Other
income, net
    
    
    (191
    )
    
    
    (904
    )
    
    
    (32
    )
    
    
    
    
    
    
    (1,127
    )Income (loss) before income taxes
    
    
    (557
    )
    
    
    6,836
    
    
    
    (3,845
    )
    
    
    (2,839
    )
    
    
    (405
    )Income tax expense
    
    
    1,891
    
    
    
    142
    
    
    
    
    
    
    
    
    
    
    
    2,033Net income (loss)
    
    
    (2,448
    )
    
    
    6,694
    
    
    
    (3,845
    )
    
    
    (2,839
    )
    
    
    (2,438
    )Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142
    
    
    
    142Net income (loss) attributable
to controlling interests and
available to common stockholders
    
    $
    (2,448
    )
    
    $
    6,694
    
    
    $
    (3,845
    )
    
    $
    (2,981
    )
    
    $
    (2,580
    )
 Six Months Ended June 30, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Revenues
    
    $
    
    
    
    $
    204,769
    
    
    $
    43,146
    
    
    $
    (365
    )
    
    $
    247,550Operating costs and expenses
    
    
    690
    
    
    
    190,778
    
    
    
    48,886
    
    
    
    (392
    )
    
    
    239,962Operating income (loss)
    
    
    (690
    )
    
    
    13,991
    
    
    
    (5,740
    )
    
    
    27
    
    
    
    7,588Interest expense, net, including
amortization of deferred
financing costs and bond
discounts
    
    
    83
    
    
    
    13,027
    
    
    
    3,282
    
    
    
    
    
    
    
    16,392Equity in losses of subsidiaries
    
    
    5,918
    
    
    
    
    
    
    
    
    
    
    
    (5,918
    )
    
    
    Other (income) expense, net
    
    
    (172
    )
    
    
    (236
    )
    
    
    293
    
    
    
    
    
    
    
    (115
    )Income (loss) before income taxes
    
    
    (6,519
    )
    
    
    1,200
    
    
    
    (9,315
    )
    
    
    5,945
    
    
    
    (8,689
    )Income tax
expense (benefit)
    
    
    2,016
    
    
    
    136
    
    
    
    (2,333
    )
    
    
    
    
    
    
    (181
    )Net income (loss)
    
    
    (8,535
    )
    
    
    1,064
    
    
    
    (6,982
    )
    
    
    5,945
    
    
    
    (8,508
    )Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
attributable to controlling
interests and available to
common stockholders
    
    $
    (8,535
    )
    
    $
    1,064
    
    
    $
    (6,982
    )
    
    $
    5,945
    
    
    $
    (8,508
    )
  21




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##### Table of Contents



Condensed Consolidating Balance Sheets
 As of June 30, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Assets:Cash and cash equivalents
    
    $
    34
    
    
    $
    2,273
    
    
    $
    4,185
    
    
    $
    
    
    
    $
    6,492Receivables, net
    
    
    11,127
    
    
    
    20,346
    
    
    
    3,583
    
    
    
    (11,672
    )
    
    
    23,384Other current assets
    
    
    3,526
    
    
    
    7,876
    
    
    
    9,909
    
    
    
    (3,465
    )
    
    
    17,846Total current assets
    
    
    14,687
    
    
    
    30,495
    
    
    
    17,677
    
    
    
    (15,137
    )
    
    
    47,722Property and equipment, net
    
    
    
    
    
    
    91,094
    
    
    
    59,746
    
    
    
    (164
    )
    
    
    150,676Intangible assets, net
    
    
    7,286
    
    
    
    82,444
    
    
    
    10,212
    
    
    
    
    
    
    
    99,942Goodwill
    
    
    
    
    
    
    150,461
    
    
    
    15,022
    
    
    
    
    
    
    
    165,483Investments in and advances to subsidiaries
    
    
    (45,466
    )
    
    
    
    
    
    
    
    
    
    
    45,466
    
    
    
    Intercompany receivable (payable)
    
    
    357,851
    
    
    
    13,099
    
    
    
    (6,923
    )
    
    
    (364,027
    )
    
    
    Prepaid expenses, deferred costs, and other assets
    
    
    
    
    
    
    3,226
    
    
    
    1,087
    
    
    
    
    
    
    
    4,313Total assets
    
    $
    334,358
    
    
    $
    370,819
    
    
    $
    96,821
    
    
    $
    (333,862
    )
    
    $
    468,136Liabilities and Stockholders (Deficit) Equity:Current portion of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    1,748
    
    
    $
    
    
    
    $
    1,748Current portion of capital lease obligations
    
    
    
    
    
    
    605
    
    
    
    
    
    
    
    
    
    
    
    605Current portion of other long-term liabilities
    
    
    
    
    
    
    25,400
    
    
    
    455
    
    
    
    
    
    
    
    25,855Accounts payable and accrued liabilities
    
    
    10,582
    
    
    
    57,072
    
    
    
    17,106
    
    
    
    (15,132
    )
    
    
    69,628Total current liabilities
    
    
    10,582
    
    
    
    83,077
    
    
    
    19,309
    
    
    
    (15,132
    )
    
    
    97,836Long-term debt, net of related discounts
    
    
    321,431
    
    
    
    
    
    
    
    5,267
    
    
    
    
    
    
    
    326,698Intercompany payable
    
    
    
    
    
    
    242,716
    
    
    
    120,992
    
    
    
    (363,708
    )
    
    
    Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred tax liability, net
    
    
    12,596
    
    
    
    968
    
    
    
    
    
    
    
    
    
    
    
    13,564Asset retirement obligations
    
    
    
    
    
    
    13,920
    
    
    
    8,857
    
    
    
    
    
    
    
    22,777Other non-current liabilities
    
    
    
    
    
    
    17,411
    
    
    
    101
    
    
    
    
    
    
    
    17,512Total liabilities
    
    
    344,609
    
    
    
    358,092
    
    
    
    154,526
    
    
    
    (378,840
    )
    
    
    478,387Stockholders (deficit) equity
    
    
    (10,251
    )
    
    
    12,727
    
    
    
    (57,705
    )
    
    
    44,978
    
    
    
    (10,251
    )Total liabilities and stockholders (deficit)
equity
    
    $
    334,358
    
    
    $
    370,819
    
    
    $
    96,821
    
    
    $
    (333,862
    )
    
    $
    468,136
  22




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##### Table of Contents



As of December 31, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Assets:Cash and cash equivalents
    
    $
    20
    
    
    $
    3,165
    
    
    $
    239
    
    
    $
    
    
    
    $
    3,424Receivables, net
    
    
    2,329
    
    
    
    22,872
    
    
    
    2,965
    
    
    
    (2,849
    )
    
    
    25,317Other current assets
    
    
    2,547
    
    
    
    12,245
    
    
    
    10,406
    
    
    
    (2,491
    )
    
    
    22,707Total current assets
    
    
    4,896
    
    
    
    38,282
    
    
    
    13,610
    
    
    
    (5,340
    )
    
    
    51,448Property and equipment, net
    
    
    
    
    
    
    96,965
    
    
    
    56,640
    
    
    
    (175
    )
    
    
    153,430Intangible assets, net
    
    
    7,612
    
    
    
    90,844
    
    
    
    9,871
    
    
    
    
    
    
    
    108,327Goodwill
    
    
    
    
    
    
    150,462
    
    
    
    13,322
    
    
    
    
    
    
    
    163,784Investments in and advances to subsidiaries
    
    
    (48,700
    )
    
    
    
    
    
    
    
    
    
    
    48,700
    
    
    
    Intercompany receivable (payable)
    
    
    378,319
    
    
    
    12,342
    
    
    
    (7,771
    )
    
    
    (382,890
    )
    
    
    Prepaid expenses, deferred costs, and other assets
    
    
    
    
    
    
    2,899
    
    
    
    940
    
    
    
    
    
    
    
    3,839Total assets
    
    $
    342,127
    
    
    $
    391,794
    
    
    $
    86,612
    
    
    $
    (339,705
    )
    
    $
    480,828Liabilities and Stockholders (Deficit) Equity:Current portion of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    1,373
    
    
    $
    
    
    
    $
    1,373Current portion of capital lease obligations
    
    
    
    
    
    
    757
    
    
    
    
    
    
    
    
    
    
    
    757Current portion of other long-term liabilities
    
    
    
    
    
    
    24,302
    
    
    
    
    
    
    
    
    
    
    
    24,302Accounts payable and accrued liabilities
    
    
    11,035
    
    
    
    51,016
    
    
    
    15,669
    
    
    
    (5,334
    )
    
    
    72,386Total current liabilities
    
    
    11,035
    
    
    
    76,075
    
    
    
    17,042
    
    
    
    (5,334
    )
    
    
    98,818Long-term debt, net of related discounts
    
    
    340,137
    
    
    
    
    
    
    
    4,679
    
    
    
    
    
    
    
    344,816Intercompany payable
    
    
    
    
    
    
    273,346
    
    
    
    109,544
    
    
    
    (382,890
    )
    
    
    Capital lease obligations
    
    
    
    
    
    
    235
    
    
    
    
    
    
    
    
    
    
    
    235Deferred tax liability, net
    
    
    10,705
    
    
    
    968
    
    
    
    
    
    
    
    
    
    
    
    11,673Asset retirement obligations
    
    
    
    
    
    
    13,247
    
    
    
    7,822
    
    
    
    
    
    
    
    21,069Other non-current liabilities
    
    
    
    
    
    
    23,944
    
    
    
    23
    
    
    
    
    
    
    
    23,967Total liabilities
    
    
    361,877
    
    
    
    387,815
    
    
    
    139,110
    
    
    
    (388,224
    )
    
    
    500,578Stockholders (deficit) equity
    
    
    (19,750
    )
    
    
    3,979
    
    
    
    (52,498
    )
    
    
    48,519
    
    
    
    (19,750
    )Total liabilities and stockholders (deficit)
equity
    
    $
    342,127
    
    
    $
    391,794
    
    
    $
    86,612
    
    
    $
    (339,705
    )
    
    $
    480,828
 Condensed Consolidating Statements of Cash Flows
 Six Months Ended June 30, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Net cash (used in) provided by operating activities
    
    $
    (10,100
    )
    
    $
    36,437
    
    
    $
    6,368
    
    
    $
    
    
    
    $
    32,705Additions to property and equipment
    
    
    
    
    
    
    (6,256
    )
    
    
    (4,456
    )
    
    
    
    
    
    
    (10,712
    )Payments for exclusive license agreements and site
acquisition costs
    
    
    
    
    
    
    (56
    )
    
    
    (31
    )
    
    
    
    
    
    
    (87
    )Net cash used in investing activities
    
    
    
    
    
    
    (6,312
    )
    
    
    (4,487
    )
    
    
    
    
    
    
    (10,799
    )Proceeds from issuance of long-term debt
    
    
    26,500
    
    
    
    12,500
    
    
    
    2,312
    
    
    
    (13,500
    )
    
    
    27,812Repayments of long-term debt and capital leases
    
    
    (45,500
    )
    
    
    (43,517
    )
    
    
    (599
    )
    
    
    43,130
    
    
    
    (46,486
    )Issuance of long-term notes receivable
    
    
    (13,500
    )
    
    
    
    
    
    
    
    
    
    
    13,500
    
    
    
    Payments received on long-term notes receivable
    
    
    43,130
    
    
    
    
    
    
    
    
    
    
    
    (43,130
    )
    
    
    Repayments of borrowings under bank overdraft
facility, net
    
    
    
    
    
    
    
    
    
    
    (142
    )
    
    
    
    
    
    
    (142
    )Payments received for subscriptions receivable
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34Other financing activities
    
    
    (458
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (458
    )Repurchase of capital stock
    
    
    (92
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92
    )Net cash provided by (used in) financing activities
    
    
    10,114
    
    
    
    (31,017
    )
    
    
    1,571
    
    
    
    
    
    
    
    (19,332
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    494
    
    
    
    
    
    
    
    494Net increase in cash and cash equivalents
    
    
    14
    
    
    
    (892
    )
    
    
    3,946
    
    
    
    
    
    
    
    3,068Cash and cash equivalents as of beginning of period
    
    
    20
    
    
    
    3,165
    
    
    
    239
    
    
    
    
    
    
    
    3,424Cash and cash equivalents as of end of period
    
    $
    34
    
    
    $
    2,273
    
    
    $
    4,185
    
    
    $
    
    
    
    $
    6,492
  23




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##### Table of Contents



Six Months Ended June 30, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    Total(In thousands)Net cash (used in) provided by operating activities
    
    $
    (5,239
    )
    
    $
    5,930
    
    
    $
    6,735
    
    
    $
    
    
    
    $
    7,426Additions to property and equipment, net of
proceeds from sale of property and equipment
    
    
    
    
    
    
    (21,908
    )
    
    
    (20,548
    )
    
    
    
    
    
    
    (42,456
    )Payments for exclusive license agreements and
site acquisition costs
    
    
    
    
    
    
    (50
    )
    
    
    (447
    )
    
    
    
    
    
    
    (497
    )Principal payments received under direct financing
leases
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    17Net cash used in investing activities
    
    
    
    
    
    
    (21,958
    )
    
    
    (20,978
    )
    
    
    
    
    
    
    (42,936
    )Proceeds from issuance of long-term debt
    
    
    76,400
    
    
    
    44,179
    
    
    
    16,870
    
    
    
    (61,213
    )
    
    
    76,236Repayments of long-term debt
    
    
    (42,900
    )
    
    
    (34,735
    )
    
    
    (251
    )
    
    
    34,057
    
    
    
    (43,829
    )Issuance of long-term notes receivable
    
    
    (61,213
    )
    
    
    
    
    
    
    
    
    
    
    61,213
    
    
    
    Payments received on long-term notes receivable
    
    
    34,057
    
    
    
    
    
    
    
    
    
    
    
    (34,057
    )
    
    
    Repayments of borrowings under bank overdraft
facility, net
    
    
    
    
    
    
    
    
    
    
    (3,881
    )
    
    
    
    
    
    
    (3,881
    )Payments received for subscriptions receivable
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Proceeds from exercises of stock options
    
    
    286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286Other financing activities
    
    
    (1,543
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,543
    )Net cash provided by financing activities
    
    
    5,188
    
    
    
    9,444
    
    
    
    12,738
    
    
    
    
    
    
    
    27,370Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (144
    )
    
    
    
    
    
    
    (144
    )Net decrease in cash and cash equivalents
    
    
    (51
    )
    
    
    (6,584
    )
    
    
    (1,649
    )
    
    
    
    
    
    
    (8,284
    )Cash and cash equivalents at beginning of period
    
    
    76
    
    
    
    11,576
    
    
    
    1,787
    
    
    
    
    
    
    
    13,439Cash and cash equivalents at end of period
    
    $
    25
    
    
    $
    4,992
    
    
    $
    138
    
    
    $
    
    
    
    $
    5,155
  24




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##### Table of Contents



Cautionary Statement Regarding Forward-Looking Statements
 Certain statements and information in this Quarterly Report on Form 10-Q (this Form 10-Q)
may constitute forward-looking statements within the meaning of the Private Securities Litigation
Act of 1995. The words believe, expect, anticipate, plan, intend, foresee, should,
would, could or other similar expressions are intended to identify forward-looking statements,
which are generally not historical in nature. These forward-looking statements are based on our
current expectations and beliefs concerning future developments and their potential effect on us.
While management believes that these forward-looking statements are reasonable as and when made,
there can be no assurance that future developments affecting us will be those that we currently
anticipate. All comments concerning our expectations for future revenues and operating results are
based on our forecasts for our existing operations and do not include the potential impact of any
future acquisitions. Our forward-looking statements involve significant risks and uncertainties
(some of which are beyond our control) and assumptions that could cause actual results to differ
materially from our historical experience and our present expectations or projections. Important
factors that could cause actual results to differ materially from those in the forward-looking
statements include, but are not limited to, those summarized below:
 
    
    our financial outlook and the financial outlook of the ATM industry;
 
    
    our ability to cope with and develop business strategies dealing with the deterioration
experienced in global credit markets;
 
    
    the consolidation of several of our existing branding customers;
 
    
    our ability to expand our bank branding and surcharge-free service offerings;
 
    
    our ability to provide new ATM solutions to financial institutions;
 
    
    our ATM vault cash rental needs, including liquidity issues with our vault cash
providers;
 
    
    the implementation of our corporate strategy;
 
    
    our ability to compete successfully with our competitors;
 
    
    our financial performance;
 
    
    our ability to strengthen existing customer relationships and reach new customers;
 
    
    our ability to meet the service levels required by our service level agreements with our
customers;
 
    
    our ability to pursue and successfully integrate acquisitions;
 
    
    our ability to expand internationally;
 
    
    our ability prevent security breaches; and
 
    
    the additional risks we are exposed to in our armored transport business.
 Other factors that could cause our actual results to differ from our projected results are
described in (1) our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (2008
Form 10-K), (2) our reports and registration statements filed from time to time with the
Securities and Exchange Commission (SEC) and (3) other announcements we make from time to time.
 Readers are cautioned not to place undue reliance on forward-looking statements, which speak
only as of the date hereof. We undertake 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.
  25




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
 
 Economic and Strategic Update
  Stable and recurring nature of our business model.
 Strong liquidity position
 Product diversification.
   26




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##### Table of Contents



Recent Events
 Foreign Currency Exchange Rates.
 Stock Repurchase Program.
  27




---



##### Table of Contents



Results of Operations
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:ATM operating revenues
    
    
    97.4
    %
    
    
    96.8
    %
    
    
    97.9
    %
    
    
    96.6
    %ATM product sales and other revenues
    
    
    2.6
    
    
    
    3.2
    
    
    
    2.1
    
    
    
    3.4Total revenues
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Cost of revenues:Cost of ATM operating revenues (exclusive of depreciation,
accretion, and amortization, shown separately below)
(1)
    
    
    67.4
    
    
    
    74.0
    
    
    
    69.3
    
    
    
    74.1Cost of ATM product sales and other revenues
    
    
    2.5
    
    
    
    2.9
    
    
    
    2.1
    
    
    
    3.2Total cost of revenues
    
    
    69.9
    
    
    
    76.8
    
    
    
    71.3
    
    
    
    77.2Gross profit
    
    
    30.1
    
    
    
    23.2
    
    
    
    28.7
    
    
    
    22.8Operating expenses:Selling, general, and administrative expenses (2)
    
    
    8.5
    
    
    
    7.7
    
    
    
    8.9
    
    
    
    7.4Depreciation and accretion expense
    
    
    8.0
    
    
    
    7.9
    
    
    
    8.2
    
    
    
    7.7Amortization expense
    
    
    3.6
    
    
    
    3.5
    
    
    
    3.8
    
    
    
    3.6Loss on disposal of assets
    
    
    1.3
    
    
    
    0.9
    
    
    
    1.6
    
    
    
    1.0Total operating expenses
    
    
    21.4
    
    
    
    20.0
    
    
    
    22.4
    
    
    
    19.7Income from operations
    
    
    8.7
    
    
    
    3.2
    
    
    
    6.2
    
    
    
    3.1Other expense (income):Interest expense, net
    
    
    6.6
    
    
    
    6.5
    
    
    
    6.9
    
    
    
    6.6Other (income) expense
    
    
    (0.8
    )
    
    
    0.0
    
    
    
    (0.5
    )
    
    
    0.0Total other expense
    
    
    5.8
    
    
    
    6.5
    
    
    
    6.4
    
    
    
    6.6Income (loss) before income taxes
    
    
    2.9
    
    
    
    (3.4
    )
    
    
    (0.2
    )
    
    
    (3.5
    )Income tax expense (benefit)
    
    
    0.8
    
    
    
    (0.5
    )
    
    
    0.8
    
    
    
    (0.1
    )Net income (loss)
    
    
    2.1
    
    
    
    (2.9
    )
    
    
    (1.0
    )
    
    
    (3.4
    )Net income attributable to noncontrolling interests
    
    
    0.1
    
    
    
    (0.0
    )
    
    
    0.1
    
    
    
    Net income (loss) attributable to controlling interests and
available to common stockholders
    
    
    2.0
    %
    
    
    (2.9
    )%
    
    
    (1.1
    )%
    
    
    (3.4
    )%
 
 (1)
    
    Excludes effects of depreciation, accretion, and amortization expense of $12.7 million and $13.2 million for the
three month periods ended June 30, 2009 and 2008, respectively, and $25.3 million and $25.6 million for the six month
periods ended June 30, 2009 and 2008, respectively. The inclusion of this depreciation, accretion, and amortization
expense in Cost of ATM operating revenues would have increased our Cost of ATM operating revenues as a percentage of
total revenues by 10.2% and 10.4% for the three month periods ended June 30, 2009 and 2008, respectively, and by
10.5% and 10.3% for the six month periods ended June 30, 2009 and 2008, respectively.(2)
    
    Includes effects of $1.2 million in severance costs associated with the departure of our former CEO during March 2009.  28




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##### Table of Contents



Key Operating Metrics
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Average number of transacting ATMs:United States: Company-owned
    
    
    18,183
    
    
    
    18,087
    
    
    
    18,207
    
    
    
    17,946United States: Merchant-owned
    
    
    10,130
    
    
    
    10,720
    
    
    
    10,141
    
    
    
    10,855United Kingdom
    
    
    2,572
    
    
    
    2,413
    
    
    
    2,554
    
    
    
    2,331Mexico
    
    
    2,117
    
    
    
    1,581
    
    
    
    2,106
    
    
    
    1,514Total average number of transacting ATMs
    
    
    33,002
    
    
    
    32,801
    
    
    
    33,008
    
    
    
    32,646Total transactions (in thousands)
    
    
    96,482
    
    
    
    90,190
    
    
    
    185,853
    
    
    
    173,646Total cash withdrawal transactions (in thousands)
    
    
    62,047
    
    
    
    58,710
    
    
    
    119,611
    
    
    
    112,599Average monthly cash withdrawal transactions per
average transacting ATM
    
    
    627
    
    
    
    597
    
    
    
    604
    
    
    
    575Per ATM per month:ATM operating revenues (1)
    
    $
    1,226
    
    
    $
    1,249
    
    
    $
    1,186
    
    
    $
    1,221Cost of ATM operating revenues (exclusive of
depreciation, accretion, and amortization)
(2)
    
    
    848
    
    
    
    954
    
    
    
    839
    
    
    
    936ATM operating gross profit (2) (3)
    
    $
    378
    
    
    $
    295
    
    
    $
    347
    
    
    $
    285ATM operating gross profit margin (exclusive of
depreciation, accretion, and amortization)
    
    
    30.8
    %
    
    
    23.6
    %
    
    
    29.3
    %
    
    
    23.3
    %ATM operating gross profit margin (inclusive of
depreciation, accretion, and amortization)
    
    
    20.3
    %
    
    
    12.9
    %
    
    
    18.5
    %
    
    
    12.6
    %
 
 (1)
    
    The decline in ATM operating
revenues per ATM per month was due
to foreign currency exchange rate
movements between the three and six
month periods ended June 30, 2009
and 2008.(2)
    
    Excludes effects of depreciation,
accretion, and amortization expense
of $12.7 million and $13.2 million
for the three month periods ended
June 30, 2009 and 2008,
respectively, and $25.3 million and
$25.6 million for the six month
periods ended June 30, 2009 and
2008, respectively. The inclusion of
this depreciation, accretion, and
amortization expense in Cost of ATM
operating revenues would have
increased our Cost of ATM operating
revenues per ATM per month and
decreased our ATM operating gross
profit per ATM per month by $129 and
$133 for the three month periods
ended June 30, 2009 and 2008,
respectively, and by $128 and $131
for the six month periods ended June
30, 2009 and 2008, respectively. The
decline in Cost of ATM operating
revenues per ATM per month was due
to foreign currency exchange rate
movements between the three and six
month periods ended June 30, 2009
and 2008, as well as lower vault
cash interest costs and other
operating cost reductions.(3)
    
    ATM operating gross profit is a
measure of profitability that uses
only the revenue and expenses that
related to operating the ATMs in our
portfolio. Revenues and expenses
from ATM equipment sales and other
ATM-related services are not
included.  29




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##### Table of Contents



Revenues
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

% Change
    
    
    2009
    
    
    2008
    
    
    % Change(In thousands)
    
    
    
    
    
    
    (In thousands)ATM operating revenues
    
    $
    121,362
    
    
    $
    122,868
    
    
    
    (1.2
    )%
    
    $
    234,942
    
    
    $
    239,165
    
    
    
    (1.8
    )%ATM product sales and other revenues
    
    
    3,286
    
    
    
    4,107
    
    
    
    (20.0
    )%
    
    
    5,051
    
    
    
    8,385
    
    
    
    (39.8
    )%Total revenues
    
    $
    124,648
    
    
    $
    126,975
    
    
    
    (1.8
    )%
    
    $
    239,993
    
    
    $
    247,550
    
    
    
    (3.1
    )%
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 ATM operating revenues.
 Variance: Three Months Ended June 30, 2009 toThree Months Ended June 30, 2008U.S.
    
    
    U.K.
    
    
    Mexico
    
    
    TotalIncrease (decrease)(In thousands)Surcharge revenue
    
    $
    (2,898
    )
    
    $
    (1,534
    )
    
    $
    929
    
    
    $
    (3,503
    )Interchange revenue
    
    
    737
    
    
    
    (102
    )
    
    
    67
    
    
    
    702Branding and surcharge-free network revenue
    
    
    1,658
    
    
    
    
    
    
    
    (2
    )
    
    
    1,656Other
    
    
    (362
    )
    
    
    1
    
    
    
    
    
    
    
    (361
    )Total increase (decrease) in ATM operating revenues
    
    $
    (865
    )
    
    $
    (1,635
    )
    
    $
    994
    
    
    $
    (1,506
    )
 United States
  United Kingdom
 Mexico
  30




---



##### Table of Contents



ATM product sales and other revenues.
 Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 ATM operating revenues.
 Variance: Six Months Ended June 30, 2009 toSix Months Ended June 30, 2008U.S.
    
    
    U.K.
    
    
    Mexico
    
    
    TotalIncrease (decrease)(In thousands)Surcharge revenue
    
    $
    (6,213
    )
    
    $
    (4,071
    )
    
    $
    1,913
    
    
    $
    (8,371
    )Interchange revenue
    
    
    1,266
    
    
    
    (418
    )
    
    
    367
    
    
    
    1,215Branding and surcharge-free network revenue
    
    
    3,390
    
    
    
    
    
    
    
    (5
    )
    
    
    3,385Other
    
    
    (451
    )
    
    
    (1
    )
    
    
    
    
    
    
    (452
    )Total increase (decrease) in ATM operating revenues
    
    $
    (2,008
    )
    
    $
    (4,490
    )
    
    $
    2,275
    
    
    $
    (4,223
    )
 United States
 United Kingdom
 Mexico
 ATM product sales and other revenues.
  31




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##### Table of Contents



Cost of Revenues
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
% Change(In thousands)
    
    
    (In thousands)Cost of ATM operating revenues (exclusive
of depreciation, accretion, and amortization)
    
    $
    83,975
    
    
    $
    93,904
    
    
    
    (10.6
    )%
    
    $
    166,204
    
    
    $
    183,336
    
    
    
    (9.3
    )%Cost of ATM product sales and other revenues
    
    
    3,153
    
    
    
    3,662
    
    
    
    (13.9
    )%
    
    
    4,967
    
    
    
    7,826
    
    
    
    (36.5
    )%Total cost of revenues (exclusive of
depreciation, accretion, and amortization)
    
    $
    87,128
    
    
    $
    97,566
    
    
    
    (10.7
    )%
    
    $
    171,171
    
    
    $
    191,162
    
    
    
    (10.5
    )%
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization).
 Variance: Three Months Ended June 30, 2009 toThree Months Ended June 30, 2008U.S.
    
    
    U.K.
    
    
    Mexico
    
    
    TotalIncrease (decrease)(In thousands)Merchant commissions
    
    $
    (2,746
    )
    
    $
    (924
    )
    
    $
    191
    
    
    $
    (3,479
    )Vault cash rental expense
    
    
    (1,328
    )
    
    
    (2,288
    )
    
    
    114
    
    
    
    (3,502
    )Other cost of cash
    
    
    (764
    )
    
    
    (262
    )
    
    
    (2
    )
    
    
    (1,028
    )Repairs and maintenance
    
    
    127
    
    
    
    466
    
    
    
    152
    
    
    
    745Communications
    
    
    (357
    )
    
    
    (383
    )
    
    
    31
    
    
    
    (709
    )Transaction processing
    
    
    (258
    )
    
    
    69
    
    
    
    27
    
    
    
    (162
    )Stock-based compensation
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    61Other expenses
    
    
    (403
    )
    
    
    (1,448
    )
    
    
    (4
    )
    
    
    (1,855
    )Total increase (decrease) in cost of ATM operating revenues
    
    $
    (5,668
    )
    
    $
    (4,770
    )
    
    $
    509
    
    
    $
    (9,929
    )
 United States
  United Kingdom
  32




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##### Table of Contents



Mexico
 Cost of ATM product sales and other revenues.
 Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization).
 Variance: Six Months Ended June 30, 2009 toSix Months Ended June 30, 2008U.S.
    
    
    U.K.
    
    
    Mexico
    
    
    TotalIncrease (decrease)(In thousands)Merchant commissions
    
    $
    (4,647
    )
    
    $
    (1,335
    )
    
    $
    501
    
    
    $
    (5,481
    )Vault cash rental expense
    
    
    (3,339
    )
    
    
    (4,563
    )
    
    
    284
    
    
    
    (7,618
    )Other cost of cash
    
    
    (174
    )
    
    
    (401
    )
    
    
    111
    
    
    
    (464
    )Repairs and maintenance
    
    
    553
    
    
    
    243
    
    
    
    315
    
    
    
    1,111Communications
    
    
    (594
    )
    
    
    (889
    )
    
    
    85
    
    
    
    (1,398
    )Transaction processing
    
    
    (962
    )
    
    
    (415
    )
    
    
    118
    
    
    
    (1,259
    )Stock-based compensation
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    187Other expenses
    
    
    (829
    )
    
    
    (1,402
    )
    
    
    21
    
    
    
    (2,210
    )Total increase (decrease) in cost of ATM operating revenues
    
    $
    (9,805
    )
    
    $
    (8,762
    )
    
    $
    1,435
    
    
    $
    (17,132
    )
 United States
  33




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##### Table of Contents



United Kingdom
 Mexico
 Cost of ATM product sales and other revenues.
 Gross Profit Margin
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008ATM operating gross profit margin:Exclusive of depreciation, accretion, and amortization
    
    
    30.8
    %
    
    
    23.6
    %
    
    
    29.3
    %
    
    
    23.3
    %Inclusive of depreciation, accretion, and amortization
    
    
    20.3
    %
    
    
    12.9
    %
    
    
    18.5
    %
    
    
    12.6
    %ATM product sales and other revenues gross profit margin
    
    
    4.0
    %
    
    
    10.8
    %
    
    
    1.6
    %
    
    
    6.7
    %Total gross profit margin:Exclusive of depreciation, accretion, and amortization
    
    
    30.1
    %
    
    
    23.2
    %
    
    
    28.7
    %
    
    
    22.8
    %Inclusive of depreciation, accretion, and amortization
    
    
    19.9
    %
    
    
    12.8
    %
    
    
    18.1
    %
    
    
    12.4
    %
 ATM operating gross profit margin
  ATM product sales and other revenues gross profit margin.
  34




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##### Table of Contents



Selling, General, and Administrative Expenses
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

%
Change
    
    
    2009
    
    
    2008
    
    

%
Change(In thousands)
    
    
    (In thousands)Selling, general, and administrative expenses
    
    $
    9,715
    
    
    $
    9,387
    
    
    
    3.5
    %
    
    $
    19,703
    
    
    $
    17,737
    
    
    
    11.1
    %Stock-based compensation
    
    
    869
    
    
    
    413
    
    
    
    110.4
    %
    
    
    1,736
    
    
    
    614
    
    
    
    182.7
    %Total selling, general, and administrative expenses
    
    $
    10,584
    
    
    $
    9,800
    
    
    
    8.0
    %
    
    $
    21,439
    
    
    $
    18,351
    
    
    
    16.8
    %Percentage of total revenues:Selling, general, and administrative expenses
    
    
    7.8
    %
    
    
    7.4
    %
    
    
    
    
    
    
    8.2
    %
    
    
    7.2
    %Stock-based compensation
    
    
    0.7
    %
    
    
    0.3
    %
    
    
    
    
    
    
    0.7
    %
    
    
    0.2
    %Total selling, general, and administrative expenses
    
    
    8.5
    %
    
    
    7.7
    %
    
    
    
    
    
    
    8.9
    %
    
    
    7.4
    %
 Selling, general, and administrative expenses (SG&A expenses), excluding stock-based
compensation.
 Stock-based compensation. Item 1, Notes to Consolidated Financial Statements, Note 3, Stock-Based Compensation
 Depreciation and Accretion Expense
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

%
Change
    
    
    2009
    
    
    2008
    
    

%
Change(In thousands)
    
    
    (In thousands)Depreciation expense
    
    $
    9,427
    
    
    $
    9,546
    
    
    
    (1.2
    )%
    
    $
    18,601
    
    
    $
    18,184
    
    
    
    2.3
    %Accretion expense
    
    
    508
    
    
    
    432
    
    
    
    17.6
    %
    
    
    973
    
    
    
    826
    
    
    
    17.8
    %Depreciation and accretion expense
    
    $
    9,935
    
    
    $
    9,978
    
    
    
    (0.4
    )%
    
    $
    19,574
    
    
    $
    19,010
    
    
    
    3.0
    %Percentage of total revenues:Depreciation expense
    
    
    7.6
    %
    
    
    7.6
    %
    
    
    
    
    
    
    7.8
    %
    
    
    7.3
    %Accretion expense
    
    
    0.4
    %
    
    
    0.3
    %
    
    
    
    
    
    
    0.4
    %
    
    
    0.3
    %Total depreciation and accretion expense
    
    
    8.0
    %
    
    
    7.9
    %
    
    
    
    
    
    
    8.2
    %
    
    
    7.7
    %
 Depreciation expense.
 Accretion expense. Accounting for Asset Retirement
Obligations
  35




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##### Table of Contents



Amortization Expense
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

%
Change
    
    
    2009
    
    
    2008
    
    

%
Change(In thousands)
    
    
    (In thousands)Amortization expense
    
    $
    4,504
    
    
    $
    4,501
    
    
    
    0.1
    %
    
    $
    9,031
    
    
    $
    9,004
    
    
    
    0.3
    %Percentage of total revenues
    
    
    3.6
    %
    
    
    3.5
    %
    
    
    
    
    
    
    3.8
    %
    
    
    3.6
    %
  Loss on Disposal of Assets
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

%
Change
    
    
    2009
    
    
    2008
    
    

%
Change(In thousands)
    
    
    (In thousands)Loss on disposal of assets
    
    $
    1,676
    
    
    $
    1,115
    
    
    
    50.3
    %
    
    $
    3,784
    
    
    $
    2,435
    
    
    
    55.4
    %Percentage of total revenues
    
    
    1.3
    %
    
    
    0.9
    %
    
    
    
    
    
    
    1.6
    %
    
    
    1.0
    %
  Interest Expense, Net
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

%
Change
    
    
    2009
    
    
    2008
    
    
    % Change(In thousands)
    
    
    (In thousands)Interest expense, net
    
    $
    7,644
    
    
    $
    7,722
    
    
    
    (1.0
    )%
    
    $
    15,355
    
    
    $
    15,354
    
    
    
    0.0
    %Amortization of deferred
financing costs and bond
discounts
    
    
    603
    
    
    
    530
    
    
    
    13.8
    %
    
    
    1,171
    
    
    
    1,038
    
    
    
    12.8
    %Total interest expense, net
    
    $
    8,247
    
    
    $
    8,252
    
    
    
    (0.1
    )%
    
    $
    16,526
    
    
    $
    16,392
    
    
    
    0.8
    %Percentage of total revenues
    
    
    6.6
    %
    
    
    6.5
    %
    
    
    
    
    
    
    6.9
    %
    
    
    6.6
    %
 Interest expense, net.
 Amortization of deferred financing costs and bond discounts.
  36




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##### Table of Contents



Income Tax Expense
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    

%
Change
    
    
    2009
    
    
    2008
    
    

%
Change(In thousands)
    
    
    (In thousands)Income tax expense (benefit)
    
    $
    1,016
    
    
    $
    (633
    )
    
    
    260.5
    %
    
    $
    2,033
    
    
    $
    (181
    )
    
    
    1223.2
    %Effective tax rate
    
    
    28.1
    %
    
    
    14.9
    %
    
    
    
    
    
    
    (502.0
    )%
    
    
    2.1
    %
  Liquidity and Capital Resources
 Overview
   Financing Facilities
 Operating Activities
  Investing Activities
  Anticipated Future Capital Expenditures.
  37




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##### Table of Contents



Financing Activities
 Investing Activities
 Financing Facilities
  Revolving credit facility.
  Bank Machine overdraft facility.
 Cardtronics Mexico equipment financing agreements.
  38




---



##### Table of Contents



Capital lease agreements.
 New Accounting Standards
 Item 1, Notes to
Consolidated Financial Statements, Note 16, New Accounting Pronouncements
  39




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##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
 Vault cash rental expense.
  Notional Amounts
    
    
    Notional Amounts
    
    
    Notional Amounts
    
    
    Weighted AverageUnited States
    
    
    United Kingdom
    
    
    Consolidated(1)
    
    
    Fixed Rate
    
    
    Term(In thousands)$
    550,000
    
    
    £
    
    
    
    $
    550,000
    
    
    
    4.30
    %
    
    July 1, 2009  December 31, 2009$
    600,000
    
    
    £
    50,000
    
    
    $
    682,936
    
    
    
    3.92
    %
    
    January 1, 2010  December 31, 2010$
    550,000
    
    
    £
    50,000
    
    
    $
    632,936
    
    
    
    3.66
    %
    
    January 1, 2011  December 31, 2011$
    350,000
    
    
    £
    25,000
    
    
    $
    391,468
    
    
    
    3.82
    %
    
    January 1, 2012  December 31, 2012$
    100,000
    
    
    £
    
    
    
    $
    100,000
    
    
    
    4.11
    %
    
    January 1, 2013  December 31, 2013
 (1)
    
    United Kingdom pound sterling amounts have been
converted into United States dollars at $1.65873 to
£1.00, which was the exchange rate in effect as of June
30, 2009.  Additional Interest Incurred onAdditional Interest Incurred
    
    
    100 Basis Point Increaseon 100 Basis Point Increase
    
    
    (Including Impact ofVault Cash Balance as of
    
    
    (Excluding Impact of
    
    
    Interest Rate SwapsJune 30, 2009
    
    
    Interest Rate Swaps)
    
    
    Currently in Effect)(Functional
    
    
    
    
    
    
    (Functional
    
    
    
    
    
    
    (Functionalcurrency)
    
    
    (U.S. dollars)
    
    
    currency)
    
    
    (U.S. dollars)
    
    
    currency)
    
    
    (U.S. dollars)(In millions)
    
    
    (In millions)
    
    
    (In millions)United States
    
    $
    809.2
    
    
    $
    809.2
    
    
    $
    8.1
    
    
    $
    8.1
    
    
    $
    2.6
    
    
    $
    2.6United Kingdom (1)
    
    £
    88.4
    
    
    
    146.6
    
    
    £
    0.9
    
    
    
    1.5
    
    
    £
    0.9
    
    
    
    1.5Mexico
    
    p $
    308.4
    
    
    
    23.4
    
    
    p $
    3.1
    
    
    
    0.2
    
    
    p $
    3.1
    
    
    
    0.2Total
    
    
    
    
    
    $
    979.2
    
    
    
    
    
    
    $
    9.8
    
    
    
    
    
    
    $
    4.3
 (1)
    
    The interest rate swaps in the United Kingdom, although in place as of June 30, 2009, are not effective until January 1, 2010. Item 1, Notes to Consolidated Financial
Statements, Note 11, Derivative Financial Instruments Note 12, Fair Value Measurements
  Interest expense.
  40




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##### Table of Contents



Outlook.
 Foreign Currency Exchange Risk
  Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations  Results of Operations
   41




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##### Table of Contents



ITEM 4.
    
    CONTROLS AND PROCEDURES
 Managements Quarterly Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   42




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
 Part I., Item I., Financial
Information, Notes to Consolidated Financial Statements, Note 13, Commitments and Contingencies.
 
 ITEM 1A.
    
    RISK FACTORS
 Part I, Item 1A. Risk Factors
 We maintain a significant amount of cash within our Company-owned ATMs, which is subject to
potential loss due to theft or other events, including natural disasters.
  Interchange fees, which comprise a substantial portion of our ATM transaction revenues, may be
lowered at the discretion of the various EFT networks through which our ATM transactions are
routed, thus reducing our future revenues.
   43




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##### Table of Contents



ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
 Total Number of
    
    
    Approximate DollarTotal Number of
    
    
    Average
    
    
    Shares Purchased as
    
    
    Value that May YetShares
    
    
    Price Paid
    
    
    Part of a Publicly
    
    
    be Purchased UnderPeriod
    
    Purchased
    
    
    Per Share
    
    
    Announced Program
    
    
    the Program(1) (2)April 1  30, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,000,000May 1  31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,000,000June 1  30, 2009
    
    
    108,348
    (3)(4)
    
    $
    3.60
    (5)
    
    
    27,058
    (6)
    
    $
    9,909,344Total
    
    
    108,348
    
    
    $
    3.60
    
    
    
    27,058
 
 (1)
    
    In February 2009, our Board of Directors approved a common stock repurchase program up to an aggregate of $10.0
million. The shares will be repurchased from time to time in open market transactions or privately negotiated
transactions at our discretion. The share repurchase program will expire on March 31, 2010, unless extended or
terminated earlier by the Board of Directors.(2)
    
    In connection with the lapsing of the forfeiture restrictions on restricted shares granted by our Company under our
2007 Stock Incentive Plan, which was adopted in December 2007 and expires in December 2017, we permitted employees to
sell a portion of their shares to us in order to satisfy the tax liabilities that arose as a consequence of the lapsing
of the forfeiture restrictions. In future periods, we may not permit our employees to sell their shares to us in order
to satisfy such tax liabilities. Furthermore, since the number of restricted shares that will become unrestricted each
year is dependent upon the continued employment of the award recipients, we cannot forecast either the total amount of
such securities or the approximate dollar value of those securities that we might purchase in future years as the
forfeiture restrictions on such shares lapse.(3)
    
    Included in these shares are 81,290 shares surrendered to us by participants in our 2007 Stock Incentive Plan to
settle the participants personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the
participants under the plan.(4)
    
    Included in these shares are 27,058 shares repurchased by us pursuant to our common stock repurchase program.(5)
    
    The price paid per share was based on the weighted average of the high and low trading price of our Companys common
stock on June 5, 2009 and June 20, 2009 which represent the dates the restrictions lapsed on such shares, and on the
dates in which we repurchased shares under our common stock repurchase program.(6)
    
    Represents shares of common stock repurchased by us pursuant to our publicly announced common stock repurchase program 
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Proposal No. 1:
 Number of SharesFor
    
    
    WithheldJ. Tim Arnoult
    
    
    33,686,629
    
    
    
    4,123,710Dennis F. Lynch
    
    
    33,686,629
    
    
    
    4,123,710
  Proposal No. 2:
 For
    
    
    
    
    Against
    
    
    Abstain
    
    
    Broker Non-Votes37,734,849
    
    
    
    
    
    64,340
    
    
    
    11,150
    
    
    
    
  44




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##### Table of Contents



ITEM 6.
    
    EXHIBITS
   45




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##### Table of Contents



SIGNATURES
  CARDTRONICS, INC.August 7, 2009
    /s/ J. Chris BrewsterJ. Chris Brewster(Duly Authorized Officer and
Principal Financial Officer)August 7, 2009
    /s/ Tres ThompsonTres ThompsonChief Accounting Officer
(Duly Authorized Officer and
Principal Accounting Officer)  46




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description3.1
    
    
    Third Amended and Restated Certificate of Incorporation of Cardtronics, Inc.
(incorporated herein by reference to Exhibit 3.1 of the Current Report on
Form 8-K filed by Cardtronics, Inc. on December 14, 2007, Registration No.
001-33864).3.2
    
    
    Second Amended and Restated Bylaws of Cardtronics, Inc. (incorporated herein
by reference to Exhibit 3.2 of the Current Report on Form 8-K filed by
Cardtronics, Inc. on December 14, 2007, Registration
No. 001-33864).* 10.1
    
    
    Second Amendment to Contract Cash Solutions Agreement, dated July 19,
2009, by and between Cardtronics USA, Inc., Cardtronics, Inc., and Wells
Fargo Bank, N.A.*31.1
    
    
    Certification of the Chief Executive Officer of Cardtronics, Inc. pursuant
to Section 13a-14(a) of the Securities Exchange Act of 1934.* 31.2
    
    
    Certification of the Chief Financial Officer of Cardtronics, Inc. pursuant
to Section 13a-14(a) of the Securities Exchange Act of 1934.*32.1
    
    
    Certification of the Chief Executive Officer and Chief Financial Officer of
Cardtronics, Inc. pursuant to Section 13a-14(b) of the Securities Exchange
Act of 1934 and 18 U.S.C. Section 1350.
 
    
    Certain portions of this exhibit have been omitted by redacting a portion of
the text (indicated by asterisks in the text). This exhibit has been filed separately with the
Securities and Exchange Commission pursuant to a request for confidential treatment.  47