8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 6, 2007

Cardtronics Inc.
(Exact name of registrant as specified in its charter)

Delaware	333-113470	76-0681190
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3110 Hayes Road, Suite 300, Houston, Texas	77082
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:   (281) 596-9988

________________________________________________________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
	[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[   ]	Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)
	[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

On June 5, 2007, Cardtronics, Inc. (“Cardtronics, or “the Company”) filed a Current Report on Form 8-K disclosing that Cardtronics, LP, a wholly-owned subsidiary of Cardtronics, Inc, had entered into an asset purchase agreement on June 1, 2007 to acquire substantially all of the assets of the financial services business of 7-Eleven, Inc. (the “7-Eleven Financial Services Business”) for $135.0 million, as further described in such Current Report.  The historical financial statements of the 7-Eleven Financial Services Business and the pro forma financial statements for the Company reflecting its acquisition of the 7-Eleven Financial Services Business and the related financings are attached hereto as Exhibits 99.1, 99.2 and 99.3.

Item 9.01 Financial Statements and Exhibits.

(a)   Financial Statements.

The following financial statements required by Item 9.01(a) of Form 8-K are attached hereto as Exhibits 99.1 and 99.2, respectively.

7-Eleven Financial Services Business

Unaudited Interim Financial Statements (Exhibit 99.1)

Balance Sheets – December 31, 2006 and March 31, 2007

Statements of Earnings – Three Months Ended March 31, 2006 and 2007

Statements of Cash Flows – Three Months Ended March 31, 2006 and 2007

Notes to Financial Statements

Annual Financial Statements (Exhibit 99.2)

Report of Independent Auditors

Balance Sheets – December 31, 2005 and 2006

Statements of Earnings – Years Ended December 31, 2004, 2005, and 2006

Statements of Cash Flows – Years Ended December 31, 2004, 2005, and 2006

Statements of Shareholder’s Equity – Years Ended December 31, 2004, 2005, and 2006

Notes to Financial Statements

(b)   Pro forma financial information.

The following unaudited condensed consolidated pro forma financial information required by Item 9.01(b) of Form 8-K is attached to Exhibit 99.3.

Cardtronics, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet –– March 31, 2007

Unaudited Pro Forma Condensed Consolidated Statement of Operations –– Year Ended

December 31, 2006

Unaudited Pro Forma Condensed Consolidated Statement of Operations –– Three Months Ended March 31, 2007

Unaudited Pro Forma Condensed Consolidated Statement of Operations –– Three Months Ended March 31, 2006

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(c)   Exhibits

99.1 7-Eleven Financial Services Business –– Unaudited Interim Financial Statements for the Three Months Ended March 31, 2006 and 2007

99.2 7-Eleven Financial Services Business –– Financial Statements for the Years Ended December 31, 2004, 2005 and 2006

99.3 Cardtronics, Inc. –– Unaudited Pro Forma Condensed Consolidated Financial Statements

SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Cardtronics Inc. (Registrant)
July 6, 2007 (Date)	/s/   J. CHRIS BREWSTER J. Chris Brewster Chief Financial Officer

EX-99

Exhibit 99.1

7-ELEVEN FINANCIAL SERVICES BUSINESS

Unaudited Interim Financial Statements for the

Three Months Ended March 31, 2006 and 2007

(Unaudited)

7-ELEVEN FINANCIAL SERVICES BUSINESS

BALANCE SHEETS

(Dollars in thousands)

	December 31,		March 31,
	2006		2007
			(unaudited)
ASSETS
Current assets
Cash	$	13,015	$	12,113
Accounts receivable		74,944		64,737
Other current assets		7,215		4,471
Total current assets		95,174		81,321
Property and equipment, net		91,817		87,103
Goodwill		35,593		35,593
Total assets	$	222,584	$	204,017
Liabilities and Shareholder’s Equity
Current liabilities
Accrued expenses and other liabilities	$	72,341	$	65,017
Capital lease obligations due within one year		1,465		1,378
Total current liabilities		73,806		66,395
Deferred credits and other liabilities		13,172		10,943
Long-term capital lease obligations		1,900		1,620
Commitments and contingencies
Shareholder’s equity
Common stock, $.10 par value		––		––
Additional paid-in capital		129,282		118,109
Accumulated earnings		4,424		6,950
Total shareholder’s equity		133,706		125,059
Total liabilities and shareholder’s equity	$	222,584	$	204,017

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

STATEMENTS OF EARNINGS

(Dollars in thousands)

(Unaudited)

	Three Months Ended March 31,
	2006		2007
REVENUES:
Commissions	$	31,581	$	36,353
Other income		4,642		5,168
Total revenues		36,223		41,521
EXPENSES:
Commission expense to 7-Eleven		10,930		12,415
Other expenses		24,498		24,943
Operating, selling, general and administrative expenses		35,428		37,358
Interest expense, net		238		49
Total expenses		35,666		37,407
EARNINGS BEFORE INCOME TAXES		557		4,114
INCOME TAX EXPENSE		215		1,588
NET EARNINGS	$	342	$	2,526

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Three Months Ended March 31,
	2006			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	342		$	2,526
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization of equipment		3,818			4,484
Deferred income taxes		386			(1,708	)
Net loss on disposal of equipment		––			25
Decrease in accounts receivable		5,111			10,207
Decrease in other assets		1,808			2,702
Decrease in trade accounts payable and other liabilities		(16,956	)		(7,803	)
Net cash (used in) provided by operating activities		(5,491	)		10,433
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchase of equipment		(4,546	)		(698	)
Net cash used in investing activities		(4,546	)		(698	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under capital lease obligations		(2,563	)		(367	)
Capital contributions from (returned to) 7-Eleven, net		10,650			(10,270	)
Net cash provided by (used in) financing activities		8,087			(10,637	)
NET DECREASE IN CASH		(1,950	)		(902	)
CASH AT BEGINNING OF YEAR		15,392			13,015
CASH AT END OF PERIOD	$	13,442		$	12,113

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

NOTES TO FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2006 AND 2007

(Unaudited)

NOTE 1:  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation– 7-Eleven, Inc. (the "Company" or "7-Eleven") operates a business consisting of a network of both traditional ATMs and advance-function devices ("Vcoms") in most of its stores and selected licensed stores in the United States.  The business consists of fixed assets, placement agreements governing the right to offer ATM services in 7-Eleven stores, product partner agreements and third party lease and service agreements ("7-Eleven Financial Services Business" or the "Business").  The Company has staff dedicated to the Business and allocates certain additional costs to the Business where appropriate.  The financial statements include the accounts of the Business.  The operations of the Business include both the operations of the ATM network used in 7-Eleven stores as well as the Vcom^TM equipment and services provided therein.  The assets and certain service agreements pertaining to the ATM network are maintained in a subsidiary of the Company known as Vcom Financial Services, Inc.

The balance sheet as of March 31, 2007, and the related statements of earnings and cash flows for the three-month periods ended March 31, 2006 and 2007, have been prepared by the Business without audit.  In the opinion of management, all adjustments necessary to state fairly the financial position at March 31, 2007, and the results of operations and cash flows for all periods presented have been made.  The results of operations for the interim periods are not necessarily indicative of the operating results for the full year.

The balance sheet as of December 31, 2006 is derived from the audited financial statements as of and for the year then ended but does not include all disclosures required by generally accepted accounting principles.  The notes accompanying the financial statements in the Business's audited report for the year ended December 31, 2006 include accounting policies and additional information pertinent to an understanding of both the December 31, 2006 balance sheet and the interim financial statements.  The information has not changed except as a result of normal transactions in the three months ended March 31, 2007, and as discussed in the notes herein.

Comprehensive Earnings - Comprehensive earnings are defined as the change in equity (net assets) of a business enterprise during a period, except for those changes resulting from investments by owners and distributions to owners.  There are no components of other comprehensive earnings and, consequently, comprehensive earnings are equal to net earnings.

NOTE 2:  RECENTLY ISSUED ACCOUNTING STANDARDS

Effective January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes," which clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements in accordance with FASB Statement No. 109, "Accounting for Income Taxes."  FIN 48 prescribes a recognition threshold and measurement criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, disclosure and transition.

The results of the Business are included in the income tax filings of the Company in the United States, all states and in various local jurisdictions.  To the extent that the Business may be included in an examination of the Company's income tax filings, the ultimate outcome of examinations and discussions with the Internal Revenue Service or other taxing authorities, as well as an estimate of any related change to amounts recorded for uncertain tax positions, cannot be presently determined.  As of the adoption date, the Business is subject to examination for tax years 2003 – 2006.

There were no unrecognized tax benefits or accrued interest or penalties applicable to the Business as of January 1, 2007.  Management does not believe it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and related penalties (if any) in operating, selling, general and administrative expenses.  The Company has not accrued interest or penalty expense for the Business related to FIN 48 for the three-month period ended March 31, 2007.

EX-99

Exhibit 99.2

7-ELEVEN FINANCIAL SERVICES BUSINESS

Financial Statements for the

Years Ended December 31, 2004, 2005 and 2006

Report of Independent Auditors

To the Management and Board of Directors

of 7-Eleven, Inc.

In our opinion, the accompanying balance sheets and the related statements of earnings and cash flows present fairly, in all material respects, the financial position of the 7-Eleven Financial Services Business (the "Company") at December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the financial statements, the Company has restated its 2006 and 2005 financial statements.

/s/PricewaterhouseCoopers LLP

Dallas, TX

March 29, 2007,

except for the restatement discussed

in Note 1 to the financial statements,

as to which the date is

May 9, 2007

7-ELEVEN FINANCIAL SERVICES BUSINESS

BALANCE SHEETS

(Dollars in thousands)

	December 31,			December 31,
	2005			2006
	Restated			Restated
ASSETS
Current assets
Cash	$	15,392		$	13,015
Accounts receivable		43,093			74,944
Other current assets		9,094			7,215
Total current assets		67,579			95,174
Property and equipment, net		86,970			91,817
Goodwill		35,593			35,593
Other assets		34			––
Total assets	$	190,176		$	222,584
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities
Accrued expenses and other liabilities	$	50,002		$	72,341
Capital lease obligations due within one year		9,008			1,465
Total current liabilities		59,010			73,806
Deferred credits and other liabilities		18,912			13,172
Long-term capital lease obligations		21,921			1,900
Commitments and contingencies
Shareholder’s equity
Common stock, $.10 par value, 1,000 shares issued and outstanding		––			––
Additional paid-in capital		97,122			129,282
Accumulated (deficit) earnings		(6,789	)		4,424
Total shareholder’s equity		90,333			133,706
Total liabilities and shareholder’s equity	$	190,176		$	222,584

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

STATEMENTS OF EARNINGS

(Dollars in thousands)

	Years Ended December 31,
	2004		2005		2006
REVENUES:			(Restated)
Commissions	$	65,363	$	138,243	$	142,735
Other income		31,754		19,748		20,927
Total revenues		97,117		157,991		163,662
EXPENSES:
Commission expense to 7-Eleven		25,816		47,413		49,233
Other expenses		68,577		101,657		95,647
Operating, selling, general and administrative expenses		94,393		149,070		144,880
Interest expense, net		909		1,056		520
Total expenses		95,302		150,126		145,400
EARNINGS BEFORE INCOME TAXES		1,815		7,865		18,262
INCOME TAX EXPENSE		702		3,036		7,049
NET EARNINGS	$	1,113	$	4,829	$	11,213

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Years Ended December 31,
	2004			2005			2006
				(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	1,113		$	4,829		$	11,213
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization of equipment		12,465			14,456			15,390
Deferred income taxes		1,815			2,454			396
Net loss (gain) on disposal of equipment		116			(13	)		(115	)
Increase in accounts receivable		(16,274	)		(13,326	)		(31,851	)
Increase in other assets		(919	)		(1,437	)		(708	)
Increase in trade accounts payable and other liabilities		18,078			18,508			18,824
Net cash provided by operating activities		16,394			25,471			13,149
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchase of equipment		(11,151	)		(26,296	)		(20,228	)
Proceeds from sale of equipment		1,243			13			106
Acquisition of a business		(44,743	)		––			––
Net cash used in investing activities		(54,651	)		(26,283	)		(20,122	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under capital lease obligations		(6,348	)		(9,549	)		(4,932	)
Capital contributions from 7-Eleven, net.		54,324			15,713			32,160
Payments related to capital lease purchase		––			––			(22,632	)
Payments to 7-Eleven for return of Vcom kiosks’ cash inventory		(96,298	)		––			––
Net cash (used in) provided by financing activities		(48,322	)		6,164			4,596
NET (DECREASE) INCREASE IN CASH		(86,579	)		5,352			(2,377	)
CASH AT BEGINNING OF YEAR		96,619			10,040			15,392
CASH AT END OF YEAR	$	10,040		$	15,392		$	13,015
RELATED DISCLOSURE FOR CASH FLOW REPORTING
Assets obtained by entering into capital leases	$	3,291		$	––		$	––

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

STATEMENTS OF SHAREHOLDER’S EQUITY

(Dollars and shares in thousands)

	Common Stock
	Shares		Par Value		Additional Paid-in Capital			Accumulated (Deficit) Earnings			Shareholder’s Equity
Balance at December 31, 2003		1	$	––	$	123,383		$	(12,731	)	$	110,652
Net earnings									1,113			1,113
Payments to 7-Eleven for return of Vcom kiosks’ cash inventory						(96,298	)					(96,298	)
Capital contributions from 7-Eleven, net						54,324						54,324
Balance at December 31, 2004		1		––		81,409			(11,618	)		69,791
Net earnings as restated (see Note 1)									4,829			4,829
Capital contributions from 7-Eleven, net, as restated (see Note 1)						15,713						15,713
Balance at December 31, 2005, as restated		1		––		97,122			(6,789	)		90,333
Net earnings									11,213			11,213
Capital contributions from 7-Eleven, net						32,160						32,160
Balance at December 31, 2006, as restated		1	$	––	$	129,282		$	4,424		$	133,706

See notes to financial statements.

7-ELEVEN FINANCIAL SERVICES BUSINESS

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2004, 2005 and 2006

NOTE 1:  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation– 7-Eleven, Inc. (the "Company" or "7-Eleven") operates a business consisting of a network of both traditional ATMs and advance-function devices ("Vcoms") in most of its stores and selected licensed stores in the United States.  The business consists of fixed assets, placement agreements governing the right to offer ATM services in 7-Eleven stores, product partner agreements and third party lease and service agreements ("7-Eleven Financial Services Business" or the "Business").  The Company has staff dedicated to the Business and allocates certain additional costs to the Business where appropriate.  The financial statements include the accounts of the Business.  The operations of the Business include both the operations of the ATM network used in 7-Eleven stores as well as the Vcom^TM equipment and services provided therein.  The assets and certain service agreements pertaining to the ATM network are maintained in a subsidiary of the Company known as Vcom Financial Services, Inc. ("VFS").

Restatement of Previously Issued Financial Statements– The Business has restated its previously issued December 31, 2005 and 2006 financial statements to appropriately include certain tender offer expenses resulting from the purchase of the noncontrolling equity interests of the Company by its owner, Seven-Eleven Japan Co., Ltd., in November 2005.  The financial statements have been restated to allocate $1.7 million of compensation costs related to the managers and employees of the Business to operating, selling, general and administrative ("OSG&A") expense for the year ended December 31, 2005.  The effects of this restatement were as follows:

	2005						2006
	Impact of Restatement			As Restated			Impact of Restatement			As Restated
	(Dollars in thousands)
As of December 31:
Additional paid-in capital	$	1,066		$	97,122		$	1,066		$	129,282
Accumulated (deficit) earnings		(1,066	)		(6,789	)		(1,066	)		4,424
Year Ended December 31:
OSG&A	$	1,736		$	149,070			––			––
Earnings before income taxes		(1,736	)		7,865			––			––
Income tax expense		(670	)		3,036			––			––
Net earnings		(1,066	)		4,829			––			––
Net cash provided by operating activities		(1,066	)		25,471			––			––
Net cash provided by financing activities		1,066			6,164			––			––

Use of Estimates– The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period.  Such estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances.  The results of these estimates form the basis of the Company's judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

Revenues– Revenues are comprised of service fees/commissions from ATM, check-cashing and other transactions and are separately presented in the accompanying statements of earnings.  These transaction fees/commissions are recognized at the point of sale.

Other Income – Other income relates to placement fees received from Vcom partners.  The recognition of these funds is deferred until the revenue is earned, as specified by the substance of the applicable agreement.

In 2004, the Company and two of its Vcom partners, one of which provided check-cashing services, mutually agreed to terminate their relationships.  One of these partners was simultaneously replaced with another check-cashing partner.  Included in the amount recognized in other income for the year ended December 31, 2004, was $10.8 million that resulted from the termination of these relationships.  Because the relationships were terminated, and the Company had no further obligations under the agreements, recognition of the income was accelerated.

Commission Expense to 7-Eleven – A contractual agreement between the Business and the Company is currently in effect and expires at the end of 2009.  This agreement and a franchise amendment govern the portion of the ATM and Vcom transaction fees that are earned by the Business and paid to the Company.  These payments include both fixed and variable components.  The contractual agreement also governs other ATM-related economics between the Business and the Company.

OSG&A Expenses – In addition to the ATM and Vcom commission expense to the Company, OSG&A expense includes certain direct costs of the Business as well as other costs incurred by the Company and allocated to the Business on a basis that management believes to be reasonable.  Such costs include hardware, cash management, operations support, cash rent and other corporate expenses.  Also included in OSG&A expense are reasonable allocations of indirect costs incurred by the Company for compensation, travel and office space for certain key employees who devote significant time to the Business.  These allocated costs were $866,000, $1.0 million and $1.0 million for the years ended December 31, 2004, 2005 and 2006, respectively.

In addition, OSG&A expense for the year ended December 31, 2005 includes $1.7 million of one-time compensation paid to certain employees of the Company who devoted time to the Business.  The payments were made in November 2005 when the Company became a private company.  This one-time compensation cost represented the settlement for cash and subsequent cancellation of equity-based awards issued under the Company's stock plans as if they had been exercised at the tender offer price on the transaction date.

Advertising costs, also included in OSG&A, generally are charged to expense as incurred. Advertising costs were $4.1 million, $2.5 million and $571,000 for the years ended December 31, 2004, 2005 and 2006, respectively.

Income Taxes– Income taxes are determined using the liability method, where deferred tax assets and liabilities are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements.  Deferred tax assets include net operating loss carryforwards, if any, and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Depreciation and Amortization– Depreciation of property and equipment is based on the estimated useful lives of these assets using the straight-line method. Acquisition and development costs for significant business systems and related software for internal use are capitalized and are depreciated or amortized on a straight-line basis.  Included in depreciation and amortization of property and equipment in the accompanying statements of cash flows is software amortization expense of $2.2 million, $3.8 million and $4.6 million for the years ended December 31, 2004, 2005 and 2006, respectively.

Amortization of capital lease assets and associated leasehold improvements is based on the lease term or the estimated useful life, whichever is shorter.  Amortization of leasehold improvements on operating leases is based on the shorter of the estimated useful life or the lease term.

The following table summarizes the years over which significant assets are generally depreciated or amortized:

	Years
Leasehold improvements	3 to 20
Equipment	3 to 10
Software	3 to 7

Asset Impairment – The Company's long-lived assets are reviewed for impairment and written down to fair value whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company also conducted an impairment test of its goodwill as of December 31, 2005 and 2006 (see Note 5).  The impairment test for goodwill is comprised of two steps.  Step one compares the fair value of the reporting unit with its carrying amount including goodwill.  If the carrying amount exceeds the fair value, then goodwill is impaired and step two is required to measure the amount of impairment loss.  Step two compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill.  If the carrying amount is greater than the implied fair value of the goodwill, an impairment loss is recognized for the excess.

Equity-Based Compensation– The Business participated in the Company's 1995 and 2005 Stock Incentive Plans that provided for the granting of stock options, stock appreciation rights, performance shares, restricted stock and other forms of stock-based awards over 10-year periods to certain key employees and officers of the Company.

All options granted were granted at exercise prices that were equal to the fair market values on the date of grant.  The options vested annually in three equal installments, all beginning one year after the grant date.  Vested options were exercisable within 10 years of the grant date.  The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model.  The following weighted-average assumptions were used for the options granted in the years ended December 31, 2004 and 2005: expected life of three years, no dividend yield, risk-free interest rates of 2.28% and 3.70%, and expected volatility of 46.30% and 31.48%, respectively.

The Company accounted for its stock-option grants under the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."  If compensation expense had been determined based on the grant-date fair value of the awards consistent with the method prescribed by SFAS No. 123, "Accounting for Stock-Based Compensation," the net earnings of the Business would have been reduced to the pro forma amounts indicated in the following table:

	Years Ended December 31
	2004			2005
	(Dollars in thousands)
				Restated
Net earnings as reported	$	1,113		$	4,830
Add:   Stock-based compensation expense included in reported net earnings, net of tax		––			1,147
Less:   Total stock-based compensation expense determined under the fair-value-based method for all stock-option awards, net of tax		(90	)		(1,019	)
Pro forma net earnings	$	1,023		$	4,958

Comprehensive Earnings - Comprehensive earnings are defined as the change in equity (net assets) of a business enterprise during a period, except for those changes resulting from investments by owners and distributions to owners.  There are no components of other comprehensive earnings and, consequently, comprehensive earnings are equal to net earnings.

NOTE 2:  ACCOUNTS RECEIVABLE

	December 31
	2005		2006
	(Dollars in thousands)
ATM receivables	$	35,606	$	61,787
Placement fee receivables		3,551		5,511
Other receivables		3,936		7,646
	$	43,093	$	74,944

NOTE 3:  OTHER CURRENT ASSETS

	December 31
	2005		2006
	(Dollars in thousands)
Prepaid expenses	$	5,550	$	6,291
Deferred income taxes		3,544		924
	$	9,094	$	7,215

NOTE 4:  PROPERTY AND EQUIPMENT

	December 31
	2005			2006
	(Dollars in thousands)
Cost
Leasehold improvements	$	10		$	10
Developed software		26,772			28,645
Equipment		48,846			90,682
		75,628			119,337
Original value
Capital lease equipment		46,399			3,699
		122,027			123,036
Accumulated depreciation and amortization
(includes $8,442 and $13,801 related to developed software)		(35,057	)		(31,219	)
	$	86,970		$	91,817

NOTE 5:  GOODWILL

In August 2004, the Company and VFS entered into a purchase agreement pursuant to which VFS acquired the business that operated the ATM network being used in 7-Eleven stores for a purchase price (including acquisition costs) of $44.7 million of cash consideration and the assumption of certain contractual lease commitments and other contracts related to the business.

The acquisition was accounted for under the purchase method.  The purchase price included the acquisition of approximately 4,500 ATM machines (as well as approximately 1,000 warehoused units, the majority of which were sold by December 31, 2004) and the right to receive all future ATM transaction revenue generated through both these machines and the more than 1,000 Vcom^TM machines owned by the Company before the acquisition.  During the fourth quarter of 2004, the Company finalized the purchase price allocation and, as a result of this analysis, recorded goodwill of $35.6 million representing the excess of purchase price over net assets acquired.  Goodwill is not subject to amortization but has been reviewed for impairment as of December 31, 2005 and 2006 (see Note 1).  There was no evidence of impairment in either test.

NOTE 6:  ACCRUED EXPENSES AND OTHER LIABILITIES

	December 31
	2005		2006
	(Dollars in thousands)
Interest	$	81	$	79
Accrued advertising		390		432
Accrued rent		885		432
Deferred income		2,038		824
Settlement payables		41,180		65,808
Other		5,428		4,766
	$	50,002	$	72,341

Settlement payables represent amounts owed to Vcom partners for cash collected on transactions at the ATM and Vcom^TM terminals.  Amounts collected are generally paid to Vcom partners one to three days after the transaction has occurred.  Other liabilities include monthly charges for cash management, replenishment and maintenance.

NOTE 7:  DEFERRED CREDITS AND OTHER LIABILITIES

	December 31
	2005		2006
	(Dollars in thousands)
Deferred income taxes	$	13,489	$	11,264
Deferred income		5,423		1,908
	$	18,912	$	13,172

NOTE 8:  LEASES

Leases– Certain equipment used in the Business is leased, generally for terms from three to 10 years.  The present value of future minimum lease payments for capital lease obligations is reflected in the balance sheets as long-term debt.  The amount representing imputed interest necessary to reduce net minimum lease payments to present value has been calculated generally at the Company's incremental borrowing rate at the inception of each lease.

In November 2002, the Company entered into a lease facility with a third-party institution that provided the Company with $43.2 million in financing for Vcom^TM equipment.  The leases were accounted for as capital leases having a five-year lease term from the date of funding, which occurred on a monthly basis from December 2002 through June 2003.  The leases bore interest at LIBOR plus 1.25%.  Upon lease termination, whether prior to or at expiration of the five-year lease term, the Company was obligated to pay the lessor an amount equal to the original cost of the equipment financed less amortization to date plus accrued interest.  Effective June 30, 2006, the facility was terminated and the capital lease assets were purchased by the Company.

Future minimum lease payments for years ending December 31 are as follows:

	Capital			Operating
	Leases			Leases
	(Dollars in thousands)
2007	$	1,638		$	4,016
2008		1,048			3,965
2009		755			3,837
2010		233			225
Future minimum lease payments		3,674		$	12,043
Amount representing imputed interest		(309	)
Present value of future minimum lease payments	$	3,365

Minimum lease payments are calculated in accordance with SFAS No. 13, as amended.  The minimum lease payments include any base rent plus step increases and escalation clauses, any guarantee of residual value by the Company and any payments for failure to renew the lease.  In the event the base rent is dependent upon an index or rate that can change over the term of the lease, the minimum lease payments are calculated using the rate or index in effect at the inception of the lease.  Minimum lease payments do not include executory costs such as insurance, maintenance and taxes.  Minimum lease payments for operating leases are recognized on a straight-line basis over the term of the lease.

Rent expense on operating leases totaled $5.5 million, $8.7 million and $7.7 million for the years ended December 31, 2004, 2005 and 2006, respectively.

The maturities of the Company's non-cancelable capital lease obligations as of December 31, 2006, are as follows (dollars in thousands):

2007	$	1,465
2008		955
2009		716
2010		229
	$	3,365

NOTE 9:  BENEFIT PLANS

Profit Sharing Plans– The Business participates in all of the Company's benefit plans such as the Profit Sharing Plan (the "Plan"), which provides retirement benefits to eligible employees.  Contributions to the Plan, which is a defined contribution plan, are made by both the participants and the Company.  Effective January 1, 2006, the Plan was amended such that the Company's contribution to the Plan is based on a fixed percentage match of the participants' contributions.  In prior years, the Company contributed to the Plan an amount determined at the discretion of the Company and allocated it to the participants based on their individual contributions and years of participation in the Plan.  Of the Company's total contributions to the Plan, $88,000, $134,000 and $44,000 were allocated to the Business for the years ended December 31, 2004, 2005 and 2006, respectively.  These amounts are included in OSG&A expense in the accompanying statements of earnings.

NOTE 10:  COMMITMENTS AND CONTINGENCIES

Information Technology– Under the terms of a contract with an information technology service provider, VFS and the Company were obligated to purchase $9.5 million of information technology hardware and additional maintenance services in 2006.  VFS is also required in years 2007 through 2010 to purchase all of its ATM or Vcom^TM equipment from this provider for any new or existing 7-Eleven store for which there is not an existing ATM agreement in place and is obligated to purchase maintenance services.  The Company met the threshold for information technology expenditures in 2006.

Under the terms of a contract with another information technology service provider, VFS and the Company are obligated to purchase the greater of $300,000 per month or 60% of the average monthly charge for the immediately preceding six-month period in information technology services through December 31, 2009.

NOTE 11:  INCOME TAXES

The provision for income tax expense on earnings in the accompanying statements of earnings consists of the following:

	Years Ended December 31
	2004			2005			2006
	(Dollars in thousands)
				Restated
Current
Federal	$	(1,613	)	$	(118	)	$	5,903
State		500			700			750
Subtotal		(1,113	)		582			6,653
Deferred		1,815			2,454			396
Income tax expense on earnings	$	702		$	3,036		$	7,049

Reconciliations of income tax expense on earnings at the federal statutory rate to the Company's actual income tax expense are provided as follows:

	Years Ended December 31
	2004		2005		2006
	(Dollars in thousands)
			Restated
Tax expense at federal statutory rate	$	635	$	2,753	$	6,392
State income tax expense, net of federal income tax benefit		66		282		653
Other		1		1		4
Income tax expense on earnings	$	702	$	3,036	$	7,049

Significant components of the Company's deferred tax assets and liabilities are as follows:

	December 31
	2005			2006
	(Dollars in thousands)
Deferred tax assets
Property and equipment	$	3,544		$	923
Deferred tax liabilities
Property and equipment		(12,178	)		(10,093	)
Intangible assets and other		(1,311	)		(1,171	)
Subtotal		(13,489	)		(11,264	)
Net deferred tax liability	$	(9,945	)	$	(10,341	)

Deferred taxes consist of the following:

Current deferred tax assets	$	3,544		$	923
Noncurrent deferred tax liabilities		(13,489	)		(11,264	)
Net deferred tax liability	$	(9,945	)	$	(10,341	)

NOTE 12:  RECENTLY ISSUED ACCOUNTING STANDARDS

Effective January 1, 2007, the Company will adopt the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"), which clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements in accordance with FASB Statement No. 109, "Accounting for Income Taxes."  FIN 48 requires that an entity recognize the benefit of a tax position only when it is more likely than not, based on the position's technical merits, that the position would be sustained upon examination by the appropriate taxing authorities.  The tax benefit is measured as the largest benefit that is more than 50% likely of being realized upon final settlement with the taxing authorities. The Company is currently evaluating the impact of adopting FIN 48 and anticipates that its adoption will not have a material impact on the results of operations or financial position of the Business.

As of December 31, 2006, the Company adopted the provisions of SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans," on a prospective basis.  SFAS No. 158, which was issued in September 2006, requires the Company to recognize the funded status of its Executive Protection Plan as an asset or liability in its consolidated balance sheet.  The Company is also required to recognize as a component of other comprehensive earnings the changes in funded status that occurred during the year that are not recognized as part of net periodic benefit cost.  The adoption of SFAS No. 158 did not impact the Company's results of operations for the year ended December 31, 2006.

EX-99

Exhibit 99.3

CARDTRONICS, INC.

Unaudited Pro Forma Condensed Consolidated Financial Statements

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma condensed consolidated financial statements give effect to the 7-Eleven ATM Transaction and the Financing Transactions.

On June 1, 2007, we executed an asset purchase agreement which outlined the terms and conditions under which we agreed to purchase substantially all of the assets of the 7-Eleven Financial Services Business. The 7-Eleven ATM Transaction, the purchase price of which is expected to total approximately $135.0 million in cash proceeds, subject to adjustment for changes in working capital, will be funded by the sale of $125.0 million in 9¹/₄% senior subordinated notes due 2013 and borrowings under our revolving credit facility, which we expect to have amended prior to the acquisition. It is our expectation that the 7-Eleven ATM Transaction and the related Financing Transactions will occur simultaneously.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2007 gives effect to the 7-Eleven ATM Transaction and the Financing Transactions as if they occurred on that date. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2006 and three months ended March 31, 2006 and 2007, give effect to the 7-Eleven ATM Transaction and the Financing Transactions as if they occurred on January 1, 2006.

The 7-Eleven ATM Transaction will be accounted for using the purchase method of accounting and, accordingly, the tangible and intangible assets acquired and liabilities assumed in such transaction will be recorded at their estimated fair values as of the related acquisition date. Because the 7-Eleven ATM Transaction has yet to occur, the purchase price allocation reflected in the accompanying pro forma condensed consolidated financial statements is considered to be preliminary. The final purchase price allocation will be dependent upon, among other things, obtaining the final valuations for the acquired assets and assumed liabilities, which we expect to have completed within one year of closing. As such, the total estimated purchase price, as outlined in note 2 to the unaudited pro forma condensed consolidated financial statements, has been allocated to the assets to be acquired and the liabilities to be assumed based on preliminary estimates of their fair values. The final valuation will be based on the actual acquired net tangible and intangible assets and liabilities that existed as of the closing date of the 7-Eleven ATM Transaction. This includes, among other things, estimations of the value of the acquired ATMs and Vcom units, which may ultimately differ significantly from the amounts shown herein.  Accordingly, any adjustments that result from the final valuation process for all of the acquired assets and assumed liabilities will change the purchase price allocation reflected herein, and thus would change the unaudited pro forma condensed consolidated financial statements reflected herein, and in particular, the depreciation and amortization expense associated with the acquired assets.

We have agreed to acquire substantially all of the assets of the 7-Eleven Financial Services Business, which operates approximately 3,500 ATMs that allow customers to carry out traditional ATM services and approximately 2,000 Vcom advanced functionality machines that, in addition to traditional ATM services, provide Vcom Services.

Historically, 7-Eleven has received upfront placement fees from third-party service providers to help fund the development and implementation efforts surrounding the Vcom Services, which have been recognized as revenues in the accompanying historical financial statements of the 7-Eleven Financial Services Business. Although we may attempt to execute similar payment arrangements with the same (or new) service providers in the future, there is no guarantee that we will be successful in doing so. Accordingly, such upfront placement fees may not occur in the future, or may occur at lower levels than those realized historically. Reference is made to note 1 in the notes to the unaudited pro forma condensed consolidated financial statements for additional information regarding the amount of upfront placement fees that have been recognized in the historical financial statements of the 7-Eleven Financial Services Business.

We currently expect to incur operating losses associated with the Vcom portion of the acquired 7-Eleven ATM portfolio within the first 12-18 months subsequent to the acquisition date. While we plan to continue to operate the Vcom units and restructure the Vcom Services to improve the underlying financial results of that portion of the acquired business, we may be unsuccessful in this effort. In the event we are not able to improve the operating results of the Vcom business and we incur cumulative losses of $10.0 million on the Vcom business (including $1.8 million in contract termination costs), our current intent is to terminate the Vcom Services and utilize the Vcom machines to provide traditional ATM services.

The unaudited pro forma condensed consolidated financial statements presented below are based on the assumptions and adjustments described in the accompanying notes. Such unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of what our financial position or results of operations would have been had the 7-Eleven ATM Transaction and the Financing Transactions been consummated on the dates indicated, nor are they necessarily indicative of what our financial position or results of operations will be in future periods. The unaudited pro forma condensed consolidated financial statements do not contain any adjustments to reflect anticipated changes in operating costs or synergies anticipated as a result of the 7-Eleven ATM Transaction. Operating results for the three months ended March 31, 2007 are not indicative of the results that may be expected for the year ending December 31, 2007. The unaudited pro forma condensed consolidated financial statements, and accompanying notes thereto, should be read in conjunction with the historical audited and unaudited financial statements, and accompanying notes thereto, of Cardtronics and the 7-Eleven Financial Services Business.

CARDTRONICS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2007

(in thousands)

	Cardtronics Historical			7-Eleven Financial Services Business (See Note 1)		Pro Forma Adjustments			Notes		Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	1,782		$	12,113	$	—				$	13,895
Accounts and notes receivable, net		12,800			64,737		—					77,537
Other current assets		16,129			4,471		—					20,600
Total current assets		30,711			81,321		—					112,032
Property and equipment, net		92,890			87,103		(31,358	)		2,4		148,635
Intangible assets, net		64,697			—		69,000			2		133,697
Goodwill		169,477			35,593		(21,218	)		2		183,852
Other assets		5,797			—		2,456			3		8,253
Total assets	$	363,572		$	204,017	$	18,880				$	586,469
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	282		$	1,378	$	—				$	1,660
Accrued expenses and other current liabilities		46,277			65,017		––			2		111,294
Total current liabilities		46,559			66,395		––					112,954
Long-term liabilities:
Long-term debt and capital lease obligations, net of current portion		262,769			1,620		140,456			2,3		404,845
Other long-term liabilities, net of current portion		19,768			10,943		3,483			4		34,194
Total liabilities		329,096			78,958		143,939					551,993
Redeemable preferred stock		76,661			—		—					76,661
Total stockholders’ equity (deficit)		(42,185	)		125,059		(125,059	)				(42,185	)
Total liabilities and stockholders’ equity (deficit)	$	363,572		$	204,017	$	18,880				$	586,469

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

CARDTRONICS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2006

(in thousands)

	Cardtronics Historical			7-Eleven Financial Services Business (See Note 1)		Pro Forma Adjustments			Notes		Pro Forma
Revenues:
ATM operating revenues	$	280,985		$	135,976	$	—				$	416,961
Vcom operating revenues		—			27,686		—					27,686
ATM product sales and other revenues		12,620			—		—					12,620
Total revenues		293,605			163,662		—					457,267
Cost of revenues:
Cost of ATM operating revenues		209,850			100,308		—					310,158
Cost of Vcom operating revenues		—			15,985		—					15,985
Cost of ATM product sales and other revenues		11,443			—		—					11,443
Total cost of revenues		221,293			116,293		—					337,586
Gross profit		72,312			47,369							119,681
Operating expenses:
Selling, general and administrative expenses		21,667			13,197		—					34,864
Depreciation and accretion expense		18,595			12,219		(6,148	)		4		24,666
Amortization expense		11,983			3,171		6,900			4		22,054
Total operating expenses		52,245			28,587		752					81,584
Income (loss) from operations		20,067			18,782		(752	)				38,097
Interest expense		25,072			520		12,214			3		37,806
Other income		(4,986	)		—		—					(4,986	)
Income (loss) before income taxes		(19	)		18,262		(12,966	)				5,277
Income tax provision (benefit)		512			7,049		(5,084	)		5		2,477
Net income (loss)		(531	)		11,213		(7,882	)				2,800
Preferred stock accretion expense		265			—		—					265
Net income (loss) available to common stockholders	$	(796	)	$	11,213	$	(7,882	)			$	2,535

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

CARDTRONICS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2007

(in thousands)

	Cardtronics Historical			7-Eleven Financial Services Business (See Note 1)		Pro Forma Adjustments			Notes		Pro Forma
Revenues:
ATM operating revenues	$	71,656		$	35,195	$	—				$	106,851
Vcom operating revenues		—			6,326		—					6,326
ATM product sales and other revenues		2,862			—		—					2,862
Total revenues		74,518			41,521		—					116,039
Cost of revenues:
Cost of ATM operating revenues		54,736			26,162		—					80,898
Cost of Vcom operating revenues		—			4,366		—					4,366
Cost of ATM product sales and other revenues		2,797			—		—					2,797
Total cost of revenues		57,533			30,528		—					88,061
Gross profit		16,985			10,993		—					27,978
Operating expenses:
Selling, general and administrative expenses		6,444			2,346		—					8,790
Depreciation and accretion expense		6,398			4,327		(1,537	)		4		9,188
Amortization expense		2,486			157		1,725			4		4,368
Total operating expenses		15,328			6,830		188					22,346
Income from operations		1,657			4,163		(188	)				5,632
Interest expense		6,248			49		3,028			3		9,325
Other income		(231	)		—		—					(231	)
Income (loss) before income taxes		(4,360	)		4,114		(3,216	)				(3,462	)
Income tax provision (benefit)		(973	)		1,588		(1,255	)		5		(640	)
Net income (loss)		(3,387	)		2,526		(1,961	)				(2,822	)
Preferred stock accretion expense		67			—		—					67
Net income (loss) available to common stockholders	$	(3,454	)	$	2,526	$	(1,961	)			$	(2,889	)

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

CARDTRONICS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2006

(in thousands)

	Cardtronics Historical			7-Eleven Financial Services Business (See Note 1)		Pro Forma Adjustments			Notes		Pro Forma
Revenues:
ATM operating revenues	$	66,409		$	28,421	$	—				$	94,830
Vcom operating revenues		—			7,802		—					7,802
ATM product sales and other revenues		2,732			—		—					2,732
Total revenues		69,141			36,223		—					105,364
Cost of revenues:
Cost of ATM operating revenues		50,539			22,528		—					73,067
Cost of Vcom operating revenues		—			5,091		—					5,091
Cost of ATM product sales and other revenues		2,559			—		—					2,559
Total cost of revenues		53,098			27,619		—					80,717
Gross profit		16,043			8,604		—					24,647
Operating expenses:
Selling, general and administrative expenses		4,838			3,991		—					8,829
Depreciation and accretion expense		4,217			2,135		(1,537	)		4		4,815
Amortization expense		5,016			1,683		1,725			4		8,424
Total operating expenses		14,071			7,809		188					22,068
Income from operations		1,972			795		(188	)				2,579
Interest expense		6,542			238		3,066			3		9,846
Other expense		189			—		—					189
Income (loss) before income taxes		(4,759	)		557		(3,254	)				(7,456	)
Income tax provision (benefit)		(1,635	)		215		(1,216	)		5		(2,636	)
Net income (loss)		(3,124	)		342		(2,038	)				(4,820	)
Preferred stock accretion expense		66			—		—					66
Net income (loss) available to common stockholders	$	(3,190	)	$	342	$	(2,038	)			$	(4,886	)

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

CARDTRONICS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)        The unaudited pro forma condensed consolidated financial statements combine the historical results of Cardtronics and the 7-Eleven Financial Services Business, and assume, for purposes of the pro forma condensed consolidated statements of operations, that the 7-Eleven ATM Transaction and the Financing Transactions all occurred on January 1, 2006. For purposes of the pro forma condensed consolidated balance sheet, it is assumed that the aforementioned transactions occurred on March 31, 2007.

As discussed elsewhere, we have agreed to acquire substantially all of the assets associated with the 7-Eleven Financial Services Business, including approximately 3,500 ATMs that allow customers to carry out traditional ATM services and approximately 2,000 advanced functionality Vcom machines that offer traditional ATM services, as well as some or all of the Vcom Services.

Historically, 7-Eleven has received upfront placement fees from third-party service providers to help fund the development and implementation efforts surrounding the Vcom Services, which have been recognized as revenues in the accompanying historical financial statements of the 7-Eleven Financial Services Business. However, it is uncertain as to whether such payments will occur in the future, or, if they do, whether such payments will occur at levels consistent with those seen in the past. During the year ended December 31, 2006 and the three months ended March 31, 2006 and 2007, the 7-Eleven Financial Services Business recognized approximately $18.7 million, $4.6 million, and $4.4 million, respectively, in revenues associated with such upfront placement fees. The exclusion of such fees (which were directly attributable to providing the Vcom Services), would have resulted in lower operating results for the 7-Eleven Financial Services Business.

Excluding the majority of the upfront placement fees, the Vcom Services have historically generated operating losses, including, based upon our analysis, $6.3 million and $2.3 million for the year ended December 31, 2006 and the three months ended March 31, 2007, respectively. Despite these losses, we plan to continue to operate the Vcom units following the completion of the acquisition and restructure the Vcom Services to improve the underlying financial results of that portion of the acquired business. By continuing to provide the Vcom Services for the 12-18 months following the acquisition, we currently expect that we may incur up to $10.0 million in operating losses, including $1.8 million in contract termination costs. However, in the event we are unsuccessful in our efforts and our cumulative losses (including termination costs) reach $10.0 million, our current intent is to terminate the Vcom Services and utilize the existing Vcom machines to provide traditional ATM services. If we terminate the Vcom Services, we believe that the financial results of the acquired 7-Eleven Financial Services Business could considerably improve.

(2)         The reported amounts reflect the financing of and the preliminary allocation of the purchase price for the 7-Eleven ATM Transaction. Such acquisition will be financed primarily through the issuance and sale of $125.0 million principal amount of 9¹/₄% senior subordinated notes due 2013 and an additional $10.5 million in borrowings under our amended revolving credit facility. This amount includes approximately $2.5 million in deferred financing costs associated with the issuance of the notes and the amendment of our existing revolving credit facility. Our estimate of the total purchase price is summarized as follows (in thousands):

Total cash consideration	$	135,000
Estimated working capital adjustment to be funded at closing		1,500
Estimated acquisition-related costs		1,500
Total estimated purchase price of acquisition	$	138,000

   The total estimated purchase price has been allocated on a preliminary basis as follows (in thousands):

Current assets	$	81,321
Property and equipment		55,745
Intangible assets:
Customer contracts and relationships		69,000
Goodwill		14,375
Current liabilities		(66,395	)
Other non-current liabilities		(16,046	)
Total estimated purchase price of acquisition	$	138,000

The preliminary allocation of the purchase price is pending completion of certain items, including the finalization of our independent appraisal efforts related to the valuation of the tangible and intangible assets acquired, including the acquired ATMs and Vcom units and any acquired intangible assets.  As such, there may be material changes to the initial allocation reflected above as those remaining items are finalized.

(3)         The reported amounts reflect the issuance and sale of the notes and borrowings under our amended credit facility, which will be utilized to fund the 7-Eleven ATM Transaction. The unaudited pro forma condensed consolidated statements of operations assume such debt was issued or borrowed on January 1, 2006, and the unaudited pro forma condensed consolidated balance sheet assumes such debt was issued on March 31, 2007.

The debt capitalization structure assumed to be outstanding for all periods presented in the above pro forma financial statements is as follows (in thousands):

91/4 senior subordinated notes (including $125.0 million contemplated in connection with the 7-Eleven ATM Transaction and an estimated $5.0 million premium; also includes $200.0 million in notes issued in 2005, net of the related discount)	$	328,816	(1)
Revolving credit facility (including $10.5 million additional borrowings contemplated in connection with the 7-Eleven ATM Transaction)		72,056	(1)
Other long-term and current debt obligations		5,633
Total pro forma debt	$	406,505

__________________

⁽¹⁾   To the extent the proceeds from the notes differ from the estimated amount of $130.0 million, the amount of borrowings outstanding under our amended revolving credit facility will increase or decrease accordingly in order to finance the 7-Eleven ATM Transaction.

For purposes of computing the interest expense amounts associated with the above debt structure, a weighted-average rate of 8.95% has been utilized. Assuming an increase of 25 basis points in the floating borrowing rate under our revolving credit facility, pro forma interest expense would have increased by $180,000 for the year ended December 31, 2006 and $45,000 for both the three months ended March 31, 2006 and 2007.  In addition, in the event the net proceeds from the notes differ from the amount estimated and we borrow more or less under our amended revolving credit facility, pro forma interest expense will change accordingly.

The following reconciliation provides additional details behind the pro forma interest expense adjustment reflected in the accompanying unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2006 (in thousands):

				Three Months Ended March 31,
	Year Ended December 31, 2006			2006			2007
Interest expense associated with senior subordinated notes ($328.8 million at an effective interest rate of 9.2%)	$	30,182		$	7,546		$	7,546
Interest expense associated with pro forma revolving credit facility balance ($72.1 million at an effective interest rate of 7.8%)		5,620			1,405			1,405
Interest expense associated with other indebtedness, including acquired capital lease obligations		486			121			121
Amortization of deferred financing costs associated with the notes and amended revolving credit facility ($2.1 million and $0.4 million amortized on a straight-line basis over 6 years and 5 years, respectively)		422			105			105
Amortization of premium associated with the notes contemplated in connection with the 7-Eleven ATM Transaction		(833	)		(208	)		(208	)
Amortization of deferred financing costs associated with the existing senior subordinated notes and revolving credit facility		1,929			877			356
Pro forma interest expense		37,806			9,846			9,325
Elimination of the historical interest expense of Cardtronics, Inc. and the 7-Eleven Financial Services Business		(25,592	)		(6,780	)		(6,297	)
Pro forma interest expense adjustment	$	12,214		$	3,066		$	3,028

Future maturities of the principal amounts of our pro forma long-term debt are as follows (in thousands):

	Total		2007		2008		2009		2010		2011		Thereafter
Long-term debt		$ 402,689		$ 1,322		$ 1,312		$ 1,300		$ 899		$ 715		$ 397,141

(4)   The reported amounts reflect the adjustments to the historical depreciation and amortization expense resulting from the effects of the preliminary purchase price allocations associated with the 7-Eleven ATM Transaction. Such amounts are, therefore, subject to change, and may change materially, once the valuation of the acquired assets and assumed liabilities is finalized and the final purchase price allocation completed.  The acquired tangible assets were assumed to have a weighted-average remaining useful life of approximately 5.0 years and are being depreciated on a straight-line basis over such period of time. The acquired intangible customer contract/relationship is estimated to have a ten year life and is being amortized over such period on a straight-line basis, consistent with our past practice.  The reported amounts also reflect the depreciation and accretion amounts related to our estimated asset retirement obligations with the acquired ATMs and Vcom units.

(5)   The reported amounts reflect the adjustments to income taxes at the statutory rates of 37.1% for our U.S. operations (34.0% federal and 3.1% state, net of federal benefit), 30.0% for our U.K. operations, and 0.0% for our Mexico operations. All current and deferred tax benefits accruing to our Mexico operations are being fully reserved for due to the uncertain future utilization of such benefits.