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During the question-and-answer session, please limit your questions to one question plus a follow-up and then please reenter the queue if you have additional questions. With that, I will turn the call over to Ed.

Edward West -- Chief Executive Officer and Director

Great. Thank you, Dara, and welcome, everyone. I'm honored to have the opportunity to lead an outstanding team at Cardtronics as we begin a new chapter for the company in 2018. We have a foundation of nearly 25 years of providing convenient cash access for consumers and we are now poised for the next phase of growth as we pursue a strategy to deepen our relationships with financial institutions of all sizes and leverage our platform of ATMs with leading retailers in our key markets.

Given that this is my first earnings call as CEO, I wanted to spend a little more time than usual to do a deeper dive in our areas of focus and recent performance. Gary will give a more detailed overview on the financial results and our outlook for 2018. First, I want to spend a few minutes on my thoughts on the company and the market in which we're focused. Cardtronics is the largest independent ATM operator in the world.

As a result of our size and placement at premier retailers in transit locations, we are uniquely positioned to serve consumers' cash transaction needs in our key markets. By the numbers, we operate over 230,000 ATMs with over 80,000 of those ATMs owned by us and mostly located at high-traffic premier retail and transit locations. Globally, we handle over 2 billion transactions annually and we have the leading market share in our four core markets. Our retail network is unrivaled and is based on quality and convenience.

We currently have relationships with eight out of the top 10 U.S. retailers who have ATM programs. We have customer relationships with 2,000 financial institutions, with half of those on Allpoint in the U.S. There are 60 million cards and counting enabled on Allpoint, our surcharge-free network.

Allpoint is in a class of its own due to its size and consumer convenience as a result of it being retailer-focused. In addition to our scale, we provide a unique value proposition for all constituents. For financial institutions of all sizes we provide a diversified retail transformation capability. Our range of solutions include expanded presence, brand promotion, convenient surcharge-free access for their customers, and a comprehensive managed-services solution.

For retailers we drive increased store traffic and increased in-store spend. For consumers, we provide convenience and value for service, and, for the majority of our transactions, no direct fee for usage. We operate in a large and durable cash market. Cash has many unique attributes.

It's secure, it has near ubiquitous acceptance, immediate settlement, and no merchant discount or charge-back risk. All of this is supported by the numbers. McKinsey's Global Payments Map suggests that global cash payment flows will grow from 68 trillion in 2014 to 78 trillion in 2019. Additionally, the report in the Federal Reserve's most recent State of Cash study from late 2016 found that cash was the most frequently used consumer payment instrument, with 32% of all payments made in cash.

Debit was next, at 27%, followed by credit, at 21%. Finally, as cash is our business, we do our own studies as well and found with our fall 2017 Health of Cash Study that 68% of U.S. consumers prefer cash as their payment vehicle for purchases under $10, and 55% preferring cash for purchases under $20. Of course there continues to be new payment technologies and changes in consumer behavior but the simple fact is that the cash market is strong and very much a part of the fabric of consumers' habits and preferences.

To summarize, cash is the preferred choice by consumers for low-ticket purchases. That said, as a percentage of payment at the point of sale it is declining. This trend, along with the proliferation of mobile and nontraditional fin-tech, is encouraging banks to refocus their resources on digital strategies versus traditional branches and tellers. At the same time, the facts show that their customers still value convenient access to cash.

It is that intersection of trends that spells opportunity for Cardtronics. So now, going forward, we believe a substantial opportunity exists for Cardtronics to capitalize on our network of conveniently located ATMs, operating know-how and the product breadth and scale. This will allow us to become an enterprise platform solution for financial institutions of all sizes. In doing so, this will fortify our network and further benefit our retail partners due to increased consumer traffic.Now, with that as a backdrop, let's review a few highlights from 2017.

Our total revenues grew 19% year over year, driven by the DC Payments acquisition completed in January of 2017, the largest acquisition in the company's history. We upgraded our U.S. ATMs for EMV, which was accompanied by technology enablement and stabilization of the fleet. We nearly completed the transition of 7-Eleven ATMs from our company-owned fleet.

We successfully reduced operating cost. As I said at the beginning of 2017, we anticipated the $35 million run-rate savings in addition to cuts in direct cost related to the deconversion of 7-Eleven portfolio in the U.S. We finished the year with nice momentum in our managed-services solution for small and mid-sized FIs. And finally, we strengthened the leadership team to position us for our next phase of growth.

2017 was a transformational year for the company. As we begin our journey in 2018, we're laser-focused on four key priorities to realize the network opportunity I just mentioned. They are: first, drive organic growth and improve the durability of our revenue streams. Second, maintain a relentless focus on operational excellence and portfolio optimization.

Third, generate free cash flow and pay down debt. And fourth, engender employee pride. Now, let me drill into a few of these for just a few minutes. Starting with organic growth, we believe that we can return a meaningful organic growth over time.

Let me recap some of these levers. First, drive more transactions to our ATMs. Second, add new retailers and FIs to our traditional channels. Third, further develop relationships with our high-quality retail and FI customers.

And fourth, expand with new products and services, such as our comprehensive managed-services solution. We're supporting these efforts with new sales leadership, a change in skills, and a rigorous sales-operations process.Now to touch on the recent progress on each of these fronts. We are highly focused on driving more transactions at our existing ATMs. One of our recent successes has been Allpoint, our surcharge-free network, which steers transactions to the Allpoint-enabled ATM.

In the fourth quarter we added 27 financial institutions to Allpoint and enabled over 500,000 cardholders with surcharge-free ATM access. A couple of the recent wins include the U.S. cardholders of Rabobank and an agreement with Finn by Chase, the all-mobile bank, to offer account holders surcharge-free ATM access through Allpoint. In addition, we expect to add new retailers and financial institutions through our traditional channels and continue to develop on this core part of our strategy.

In the fourth quarter of 2017 we executed a new ATM operating agreement for 120 racetrack convenience store locations in the Dallas-Fort Worth area, adding to our surcharge-free network. These new racetrack locations are Allpoint-enabled and are branded with a new branding partner the Credit Union of Texas. We also expect to continue to grow with our high-quality retail customers as they expand their footprint. As an example, last week we announced that we are now serving over 7,000 Walgreens locations.

As I mentioned earlier, Cardtronics is uniquely positioned to serve FIs of all sizes due to the range of solutions and the breadth of our offering. We are now delivering managed-services solutions supporting small and mid-sized FIs' on and off-premise ATM fleets. Financial institutions are seeking ways to optimize their ATM management in light of the trends that I mentioned earlier. These trends include a continued focus on branch transformation and efficient ways to deliver the digital to physical touch points with their customers.

We have spent the last year redirecting our investments for this opportunity, such as strengthening our enterprise platform, enhancing our information-security leadership and expertise, upgrading our customer care organization, and our work is now beginning to pay dividends. In the fourth quarter we signed new agreements with the Texas Dow Employees Credit Union, or TDECU, and Dearborn Federal Credit Union to manage these financial institutions' on- and off-premise ATM estates, and also with BBVA Compass to manage a portion of their off-premise estate. These key partners are trusting us to manage over 200 ATM sites for them and it's just the beginning in the U.S., and we have growth opportunities in each of our markets. We have been providing managed services for key FIs in Canada, Australia, and South Africa for years.

In South Africa alone we added over 200 ATMs in the fourth quarter, further building on our terrific business in that region. As a result of the commercial and operational actions, we see a path for North America returning to organic growth in 2018 when excluding 7-Eleven. In the EMEA segment, due to the refocus and enhancements of our commercial efforts, we believe 2018 revenue growth in our emerging markets of Germany, South Africa, and Spain will largely offset the headwind in the United Kingdom.Now, moving on to the second area of near-term focus -- operational excellence and portfolio optimization. As I mentioned last quarter, over the past few months we've been working tirelessly on performing an internal top-to-bottom review of all entities and functions while being laser-focused on ATM profitability, portfolio optimization, cash flow, and rekindling more durable organic growth.

Let me just highlight a few of the activities we're focused on to deliver improved customer service while driving process improvements and lowering our cost structure. We have numerous process-improvement initiatives across the business to improve service delivery. We measure performance at a detailed level and we have a competitive advantage here that we intend to widen. Benefits are reinvested in the higher areas of return or they will drop to the bottom line.

Last quarter we decided to shut down our Poland operations. While we didn't take it lightly, the reality was that our operation was subscale and we could put the resources to higher and better use for positive returns. We are making additional restructuring changes this quarter to right-size our costs. We continue to streamline overhead and consolidate activities spread across our locations in an effort to improve customer experience, control, and scale.

Regarding infrastructure, we're investing in a new ERP system that will not only save operating cost over time but will enable future scalability as we continue to grow globally. Resulting from the ever-changing threat landscape, we recognize the need for continuous improvement in the evolution of both logical- and physical-security control, risk management and adherence to compliance are core to our values and the foundation to consumer confidence. Finally, we're also investing in our future growth with a wide range of product development efforts focused on traditional and nontraditional financial institutions. These are largely being funded with other savings.

And as an early proof point on our ongoing operational effectiveness efforts, our fourth-quarter adjusted gross profit metric was essentially flat as compared to a year ago. That result is the best comparative outcome versus prior year that we have had since 2016, as we faced significant headwinds from the 7-Eleven deconversion and DC Payments coming on with lower margins. Our 2018 outlook assumes that even with the headwinds in the U.K. and Australia, combined with the loss of the higher-margin 7-Eleven business in the U.S., our process-improvement actions can mitigate the negative growth impact to gross margins for around 100 basis points in 2018 versus 2017.The third area we're focused on is generating strong free cash flows.

We have a great global business that generates significant cash flow and in the near term, we're focused on using that cash flow to drive organic growth and reduce debt. Gary will provide details here in a few minutes, but based on what we know today, we are planning to exceed 2017's reported free cash flow this year. As you know, historically a fair amount of the company's growth was derived from acquisitions. Going forward, our focus will be on organic growth and driving transaction share to our platform and not via acquisitions for the near term.Now let me shift gears and provide an update on our businesses in the U.K.

and Australia, two markets that had recent market challenges. As a quick recap, in Australia the four largest banks made the announcement last fall indicating that they would stop surcharging all domestic users at their ATMs. Australia is a market where there is no interchange and where our ATMs are all direct-charge machines. During the fourth quarter we experienced a year-over-year decline in transactions of approximately 8% but it's still early days since the market change and it's too early to know what the outcome of the banks' action will ultimately be.

In the interim, we continue to focus on optimizing our business for what may evolve as a new norm. Since the announcement, we have been in high gear analyzing the mix of our portfolio and taking action to proactively manage cost and protect margins. These actions include moving ATMs to better, more protected locations, restructuring contracts with merchants, removing unprofitable ATMs, and lowering service costs. We know that it does not make long-term economic sense for the four largest banks in Australia to stand by and observe their collective 10,000 ATMs lose money.

We can assist them and provide a service to their customers as a result of Cardtronics owning the largest ATM portfolio in Australia. Combined with our scale, operating knowledge, and surcharge-free network capabilities, we see this as a potential future opportunity in Australia to diversify our revenue base. In this transitional period though, we're likely to see declines while we focus on cash flow and execution of our longer-term diversification strategy with financial institutions.Now moving to the United Kingdom, LINK announced on January 31, 2018, that it would reduce interchange on free-to-use ATM transactions in the market by 5% starting in July of 2018. The additional previously announced annual 5% interchange reductions over the next three years are still in play and subject to further review.

We're hopeful that all parties involved will come together to finalize a model that sustains convenient free-to-use cash access for all U.K. citizens for the long term. In addition, an independent inquiry into the long-term access to cash has been requested, which is scheduled to begin in the second quarter. Nonetheless, we're focusing our efforts on optimizing our portfolio in the U.K.

As a result of LINK's changes to the pricing model, we're proactively addressing market development and have removed some of our unprofitable and marginal locations, shifting some ATMs from free-to-use to pay-to-use and undertaking other cost-control initiatives. At the same time, we're evaluating and developing plans to diversify our revenue and profit mix in the U.K. and leverage our comprehensive delivery platform. We are well-suited for managed-services solutions for the banks.

More to come on that front in the future. As previously mentioned, our 2018 outlook assumes that growth in Germany, South Africa, and Spain will largely offset the headwind in the U.K.So, to summarize, 2017 was a transformational year for Cardtronics. We stabilized our technology platform, completed EMV upgrades for the U.S. own fleet, and delivered on committed operating expense saves.

We recruited an entirely new management team. Within our functions we've worked tirelessly to become bank-grade, from shoring up our operational processes to drive network availability. Continuous improvement is now a part of our DNA. This also extends to new management models on the commercial side and, even more importantly, customer satisfaction scoring.

Looking ahead to 2018 and beyond, we're well-positioned for long-term growth. The cash market is large and durable, and Cardtronics is at the nexus of physical and digital. We enable consumers to easily convert digital funds into physical cash in hand. We will leverage our platform to deepen relationships with FIs of all sizes, deliver more value to retailers, and fortify our network.

These actions, along with the new and expanded offerings, will increase control of our revenues over time. With our enhanced people, process, and platform capabilities, industry expertise as an operator, and ownership of key retail placements where consumers work, shop, and play, Cardtronics is uniquely positioned like no other to assist financial institutions as they continue their branch-transformation strategies. Whether it be via in-branch managed services or by enabling convenient cash access and retail to supplement branch closings, we stand by ready to partner.I would now like to turn the call over to Gary Ferrera, our new CFO.

Gary Ferrera -- Chief Financial Officer

Thank you, Ed. I've only been on board for two months but it's been a pretty active two months and I'm really excited to be a member of this talented leadership team helping to lead this great company. We are the global leader in ATMs and I believe there are a number of opportunities for long-term growth, but, as Ed mentioned earlier, our immediate focus will be on restoring organic growth post 7-Eleven, optimizing our portfolio, driving operational excellence, and delivering free cash flow. Let me start with our Q4 results.

Currency exchange-rate trends have now reversed. For the first time in a while they were actually a bit of a tailwind. Therefore, I will give a few constant-currency measures as I go through the numbers. Overall, Q4 was a solid end of the year.

Revenues of $363 million were up 17% year over year, or 15% on a constant-currency basis. ATM operating revenues of $346 million were up 18%, or 15% on a constant-currency basis. Organic ATM operating revenue growth in the quarter excluding the 7-Eleven account was 3% on a constant-currency basis. We had similar growth rates in both North America and Europe that yielded the consolidated results.

This result is fairly consistent with what we've seen in the last couple of quarters.Looking at our key operating segments, in North America, on an as-reported basis, revenues were up about 1% year over year. Lots of moving parts drove that outcome. In particular, the 7-Eleven deconversion just about completely offset the contribution from North America component of the DC Payments acquisition. Same-store transactions growth in the U.S., excluding 7-Eleven, was up about 1% for the quarter, building on a positive trend we began seeing in the back half of the year, reflecting the durability and the track of our premier retail ATM locations and the power of our Allpoint network.

In our Europe segment on an as-reported basis revenues were up 21% in the quarter, 14% on a constant-currency basis. Growth in this segment was mainly the result of our DC Payments and Spark acquisitions, but we did manage low-single-digit organic revenue growth in our base U.K. business, driven by unit growth in the face of 5.5% same-store transaction declines. This same-store measure was relatively consistent with the result of recent quarters.

Consolidated adjusted growth margin for the quarter was 35.3%, about flat with prior year. Again, there are several factors that drive this result. We had 7-Eleven coming out at a higher margin. We also had DC Payments, which was dilutive to margins.

Both of these were sizable headwinds but were mostly offset by lower EMV-related costs in the U.S. and margin expansion in the U.K. as a result of operational efficiencies achieved through our internal cash delivery and maintenance function. Adjusted EBITDA was $89.8 million, up 16% from last year, or 13% on a constant-currency basis.

This growth was mostly attributable to the DC Payments acquisition and was partly reduced by fewer transacting 7-Eleven ATMs in the U.S. SG&A costs as a percentage of revenue were down slightly year over year. Adjusted EPS was $0.73, down from $0.79 in the fourth quarter of last year. The year-over-year decline in this metric was driven by the incremental interest and depreciation expense associated with our DC Payments acquisition, which more than offset the growth in adjusted EBITDA.Now, I will quickly recap our full-year 2017 result.

The fourth quarter was stronger than anticipated and for most metrics pushed us upward over the top end of our outlook ranges that we maintained throughout the year. Revenues for the year were $1.5 billion, up 19% from the prior year, with most of that growth coming from the DC Payments acquisition. Adjusted EBITDA of $348.6 million was up 9% from $318.9 million, once again most of that growth being attributable to the DC Payments acquisition, partly offset by the 7-Eleven deconversion. Finally, adjusted EPS was $3 per share, down 9% from prior year as the adjusted EBITDA contribution from DC Payments was more than offset by incremental depreciation and interest expense attributable to the transaction.I now want to spend a moment talking about taxes.

Just like every other company either parented in the U.S. or with substantial U.S. operation, we were impacted by U.S. tax reform.

First, let me talk about GAAP taxes. Our GAAP tax rate was a bit unusual in the fourth quarter as a result of reporting the preliminary estimated impact of tax reform. Specifically, we had a GAAP tax benefit in the quarter of $7 million on book pre-tax income of $9 million. This result reflects the net impact of remeasuring net deferred-tax liabilities in the U.S.

at the now lower U.S. corporate tax rate of 21%. This book tax benefit would have been higher if not for the mandatory toll tax on unrepatriated foreign earnings. We estimated this liability to be approximately $8 million.

As permitted under the law, we plan to pay this liability over eight years. When we calculated our non-GAAP tax rate for the quarter, we excluded the one-time impact from U.S. tax reform. Our non-GAAP tax rate for the quarter was 28.6%.

Going forward, estimating the GAAP and non-GAAP tax rates will be a bit more complex. While the lower corporate U.S. tax rate is good for our U.S. earnings, there are several provisions of the tax reform package that negatively impact us, and as it relates to 2018, we expect to incur more U.S.

tax, mostly as a result of the limitations on the deduction of interest. As a result of some of these disallowances, we could see GAAP tax rate next year in the 40s. Our non-GAAP tax rate will likely be more similar to the last 18 months, in the upper 20% range. A number of you are probably curious as to whether we will remain U.K.-domiciled in light of U.S.

tax reform. At this time we have no plans to change our domicile.Turning now to the balance sheet. We ended the year with total debt outstanding of $960 million, grossed up to the face value of our debt instruments that are recorded net of discount on our balance sheet. We had $122 million drawn under our $400 million facility and we had $51 million in cash.

Net debt to adjusted EBITDA, as per our debt covenant calculation under our revolving credit facility, was approximately 2.8 times as of year-end versus the covenant of four times. We also had plenty of headroom on our other debt covenant at the end of 2017. We plan to use our free cash flow in 2018 to repay a good portion of the revolver during the year. While we anticipate that our net debt outstanding will come down during the year, our net debt-to-adjusted EBITDA multiple will increase slightly during 2018 as we lose the benefit of the 7-Eleven EBITDA contribution.Now on to our outlook for 2018.

I would like to note that in the supplemental deck posted to our website, we have included a bridge for revenues and adjusted EBITDA from 2017 actual to the midpoint of our 2018 outlook to highlight the major drivers of the year-over-year changes. Consolidated revenues are forecasted to be a $1.25 billion to $1.29 billion. I need to point out that 7-Eleven in the U.S. accounted for approximately $188 million in revenues in 2017 and we are only expecting about $5 million of revenues from this account this year, as we had removed a significant majority of our ATMs by the end of December and expect to be fully out before the end of this quarter.

This guidance on a constant-currency basis implies low-single-digit organic growth excluding 7-Eleven, driven mostly by forecasted growth in our U.S. operation. On adjusted EBITDA, we're expecting $250 million to $260 million. Similar to the situation with revenues, there is an approximate $75 million headwind from the 7-Eleven deconversion.

Additionally, we continue to take a measured view with respect to our Australian business and are being impacted in the U.K. for both the LINK interchange-rate impact and general transaction decline. On adjusted EPS, we're currently expecting a range of $1. 50 to $1.55.

The combined impact of the 7-Eleven deconversion and our in-year 2017 capital expenditure has had a significant impact on our book depreciation expense. To elaborate a bit further on this, a number of our 7-Eleven ATMs were fully depreciated coming into 2017. So when we moved them in the back half of the year, there was a minimal amount of depreciation-expense reduction in relation to the amount of revenue removed. Secondly, we made significant fleet upgrade in technology investment in 2017 and many of the assets were placed in service during the year, some with shorter lives.

And as a result, you're seeing a full year of depreciation expense for these assets. We are assuming a range of approximately $125 million to $127 million for depreciation expense in 2018. In addition, U.S. tax reform has had a large impact on our EPS outlook, as the previously mentioned limitations on the deductibility of interest significantly increased our estimates for 2018 book taxes, which adversely impacted both our GAAP and non-GAAP rate estimates.We anticipate 2018 capital expenditures to be approximately $110 million, significantly less than $144 million incurred in 2017.

This is made up of approximately $35 million in growth CAPEX and $75 million in maintenance CAPEX. Maintenance CAPEX is made up of two main categories. The first category is routine ATM-related maintenance CAPEX. This category includes upgrades, replacements and swaps of ATMs, vehicle replacement and cash depot upgrades for our cash delivery service in the U.K., and other general maintenance and compliance costs.

We currently expect to spend approximately $35 million on this category this year. The second major maintenance bucket is what I would refer to as infrastructure investment and enhancements. For this category we're expecting to spend approximately $40 million in 2018, about half of this amount is due to the combination of an investment in a new ERP system as well as moving offices to rationalize our office footprint. The $35 million in growth CAPEX includes organic unit adds across our market, product investment, and capital to support our growing financial institution services business.

In wrapping up the CAPEX piece of our outlook, I would emphasize that this capital plan correlates to our revenue and profit metrics outlook and to the extent we have incremental success with our financial institution growth strategy, we could exceed this target, but that would be a positive for the business and we would communicate any material changes when appropriate. Based on our current capital structure, we anticipate cash interest expense to be in the range of $36 million to $37 million. We're expecting a non-GAAP tax rate of 26% to 28%, and cash taxes will be about $5 million to $10 million. This assumes status quo tax rates and regulations in our major jurisdictions post-U.S.

tax reform. And finally, we plan on increasing our free cash flow versus last year and primarily utilizing this cash to reduce outstanding debt.Concerning interest rates, we have entered the year in what we think as a good place as it relates to exposure to floating interest rates on our outstanding vault cash. In January 2018 we entered into additional interest rate swaps in the U.S. and now with these additional swaps combined with operational measures and contractual provisions, we believe we have minimal exposure to changes in interest rates in the U.S.

in 2018. Additionally, in the U.K., we believe that our interest rate swaps and other tools have mitigated our exposure in the near term. We have other protections in place in our smaller markets but we specifically mention the U.S. and U.K., as over 85% of our outstanding vault cash is in these two markets.Let me close off the discussion of our outlook by talking about the distribution of adjusted EBITDA across the four quarters.

Our current view is that Q1 should show the best year-over-year comparison on adjusted EBITDA. As a reminder, we had a number of challenges in Q1 last year, including elevated downtime from our software issues in the field coupled with higher operating cost associated with EMV-related activity. To be clear, we are still expecting to be down year over year on adjusted EBITDA in Q1 and that percentage decline could be in the region of the low 20s, but the second through fourth quarters we're expecting year-over-year adjusted EBITDA percentage decline in the range of mid- to high 20 with Q3 probably being the worst quarter when compared to the prior year as the reduction in the LINK interchange rate takes effect. I should also note that none of the top five retail contracts come up for renewal in the near term, and in 2018 we wouldn't expect any single merchant relationship to account for more than 7% of total revenues.With that, I'll turn the call back over to Ed.

Ed West -Edward West -- Chief Executive Officer and Director

Great. Thank you, Gary. Operator, we'll turn it over to you to facilitate the question session.

Questions and Answers:

Operator

Thank you. If you have a question at this time, please press *-1 on your touchtone phone. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. As a reminder, please limit yourself to one question and one follow-up question.

And once again, that is *-1 if you have a question. And we will take our first question from Ramsey El-Assal with Jefferies.

Ramsey El-Assal -- Jefferies -- Analyst

Hi, guys. Thanks for taking my question. The revenue guidance for 2018 came in not too far from Street numbers. Obviously, there is a little more potential margin deterioration there that I think the Street was modeling.

Obviously, there are a lot of factors in play here -- LINK, Australia, and maybe the full impact on the model of 7-Eleven. My question is how much confidence do you have that you now have enough visibility to kind of accurately read the impact of these items? Are you taking a conservative approach here because you kind of have to or are you really able to kind of model some of the stuff out of like LINK, like Australia, with what you consider to be fairly tight data-driven assumptions?

Edward West -- Chief Executive Officer and Director

Well, good afternoon, Ramsey. It's Ed. Thanks for going through that. One of the great things was flipping the calendar this year into 2018 following on from 2017, we had so much change last year between the acquisition, the operational issues from the software roll-out, the integration of acquisitions, and obviously other factors and announcements throughout the period.

We actually feel quite good about the business and where we stand right now, the outlook, the amount of things that are going on, the activities, and candidly, as Gary talked about, as he mentioned in some of the same-store transactions, in particular in our largest market, the U.S., showing some encouraging signs there. So we feel good about where things stand right now and what we have ahead of us. We see the issues in Australia. We obviously have been very proactive addressing that.

This next year is defined for the U.K. We will continue to optimize as I walk through there. So there's a decent understanding. That said, we obviously want to be prudent with where things are, very focused, and this is going to be about focus and execution on day to day and taking things how they come, but I can tell you going into 2018 we all feel quite a bit better than this time a year ago.

Ramsey El-Assal -- Jefferies -- Analyst

OK, great. Just my one follow-up. It feels like a real pivot in terms of your balance sheet deployment strategy here talking about delevering rather than allocating dollars to M&A. Can you talk a little bit about what that might mean going forward? Following the delevering is there a greater possibility that you positively return cash to shareholders in the form of dividends or buyback? I know that's a question you guys have been asked over the years but the answer has always been somewhat kind of perfunctory just in terms of the M&A engine.

Is that something that has kind of changed in terms of how we should sort of frame up the Cardtronics story going forward?

Edward West -- Chief Executive Officer and Director

Well, ultimately, any of that in terms of capital allocation longer term is a board decision, but let me just say for the near term, as both Gary and I were crystal clear about, was paying down debt and also, candidly, growing cash flow from our expectations in 2018 versus 2017. So, I think those are two of the key differences this year as the expectation to grow cash flow and an ardent focus on that and then to pay down debt. As we move beyond this year, we'll obviously continue to reevaluate and everything will be on the table.

Ramsey El-Assal -- Jefferies -- Analyst

All right, thanks so much. I'll hop back in the queue here.

Edward West -- Chief Executive Officer and Director

Thank you.

Operator

And we'll go next to Andrew Jeffrey with SunTrust.

Andrew Jeffrey -- SunTrust -- Analyst

Hi, guys. Good afternoon. Definitely appreciate the well-articulated strategy, Ed. With regard to Allpoint, particularly what sounds to be a greater emphasis on the FI-facing aspects of that business, what's changing internally at Cardtronics? In other words, we heard your predecessor talk about outsourcing and being the outsourcing partner of choice.

We've kind of waited for news and continue to wait for real growth there. What's changed internally that makes you perhaps more confident that you can monetize and really execute in that area?

Edward West -- Chief Executive Officer and Director

Well, I would just say just really kind of focusing in the windshield what's ahead, where we are right now, where we're executing on. Overall, across the organization, the team bringing in a lot of FI background, experience, expertise on that, upgrading systems, capabilities, operations, how we execute, how we're looking at the business. I mean, it is across the board and, frankly, quite exciting. It's been a lot of activity over the last year on all fronts on that basis.

As we've talked about over the last year, there's been a lot of different conversations going on in the marketplace, the phone ringing, of interest. The good news is in the fourth quarter that started turning into new relationships. I think what we announced, frankly, with three new key managed-service solutions here this past quarter, which was one of the strongest that we've had, obviously, we feel like we still have a lot more ahead on that. The other area, candidly, as I mentioned, is the transactions that we're seeing.

When we dial back the clock a year ago, we had the issues with the software, then with the EMV, which delayed that, and the operational matters that came along with that, and the clarity into the business was to some degree murky. That is now lifting. We're seeing underlying business. Transactions in the U.S.

in our core markets here had been recovering. If you go back to a year ago, I think our same-store declines were down close to 5%. That steadily improved each quarter to where, as Gary pointed out, this past quarter it was up about 1%. That is an encouraging sign and it's also a sign showing that surcharge-free transaction growth is outpacing surcharge declines.

So, those are all positive elements but, as I said earlier, we want to be prudent, focused, going to execute and focus on singles and doubles.

Andrew Jeffrey -- SunTrust -- Analyst

I appreciate that and, Gary, I look forward to working with you. Just a quick question on the U.K. It sounds like tactically you feel good about the ability to offset the sort of first 5% down lag in interchange but when you consider 5% plus same-store sales declines, which effectively offset the unit growth, how sustainable is your sort of economic position in that market as we compound some of these challenging trends?

Edward West -- Chief Executive Officer and Director

Well, I'll start off with that and I'll turn it back to Gary. I wasn't sure if you were going to Gary on that. The U.K., as you point out, [Crosstalk] the 5% reduction goes in the second half of the year. Unfortunately, the growth, as I mentioned, in other emerging markets we feel like can mitigate and offset that, and we'll continue to work with the market there.

Clearly, the team has been very active there over the last several months, focusing on free-to-use versus pay-to-use, changing some of the terminals out from free-to-use to pay-to-use, pulling ATMs out of the market that were marginal, renegotiating contracts. So, that's happening across the board and focused on optimization, so we feel like we can offset and mitigate. Obviously, you can't do that into perpetuity, which is why we're also working on strategies to diversify and move more into managed-services solutions with key FIs. We'll talk more about that at a later date.

So, it's multifaceted front and we will continue on there. That said, let me just kind of a moment on LINK. The country has a fantastic system there for the citizens of the U.K. who have broad, free-to-use access and convenient access to cash at a very low cost to the market.

So, we are big supporters of that. We will continue to support that and support the citizens of the country and work with all constituents to understand the value that's out there and we will work with them to hopefully sustain that into the long term.

Andrew Jeffrey -- SunTrust -- Analyst

Thank you.

Edward West -- Chief Executive Officer and Director

Thank you.

Operator

And we'll take our next question from Kartik Mehta with Northcoast Research.

Kartik Mehta -- Northcoast Research -- Executive Managing Director

Good evening, Ed and Gary. You've talked obviously about there's opportunity in the U.S. for outsourcing, and I'm wondering, I know you talked about the internal changes that are happening that will allow you to pursue it maybe more so than in the past, but is there anything that's happened externally or at the FI level that makes this solution even more appealing to the banks?

Edward West -- Chief Executive Officer and Director

Well, good evening, Kartik. As we talked about in the prepared remarks earlier, the trends in the marketplace, obviously as, where you do have an overall decline in terms of cash at the point of sale, banks are really focusing on digital strategies. They're looking at how they're really focusing their resources. Obviously, they're under a lot of pressure for efficiency ratios and other factors.

Cardtronics is very unique in the breadth of our platform. I mean, we can go in and have a conversation with a financial institution with multiple solutions, whether it's on branding and better positioning at key retailers and helping serve their customers, to managed-services solution. It's a very broad offering and, frankly, moving up all the levels in the organization because they can be more strategic. So I just think that conversation is progressing.

The market's continuing to evolve, but this has been long term in the making. I think we're just at the very beginning of it and it'll probably move up and down and have some positive periods and ones less so but overall I think it's a very good trend for Cardtronics.

Kartik Mehta -- Northcoast Research -- Executive Managing Director

And then finally, Ed, you talked about LINK and obviously the issues with the interchange reduction. Is there an opportunity that they could reverse it or make it less so? It seems from your comments, I felt, as though there's an opportunity to maybe change what the current ruling is.

Edward West -- Chief Executive Officer and Director

Well, what they have published is that, they talked about overall 20%, which is still on the table, over four years. The first of those is definitive and goes into place this July, on July 1, in reducing the interchange rate down by 5%. They still expect to have three additional ones but they are all under review. So they will continue to evaluate, and separately they announced a public inquiry in terms of long-term implications on cash in the country.

So I think that's where the government, a lot of different various constituents are engaged or want a better understanding of implications. It's a great system allowing broad free access to cash and I think it's a true asset for the country.

Kartik Mehta -- Northcoast Research -- Executive Managing Director

Thank you very much. I appreciate it.

Edward West -- Chief Executive Officer and Director

Thank you, Kartik.

Operator

We'll go next to David Ridley-Lane with Bank of America.

David Ridley-Lane -- Bank of America Merrill Lynch -- Vice President

Good evening. Just wondering on the pacing of actions that you're taking in Australia and the U.K., would you expect to be largely sort of complete with your right-sizing efforts by year-end 2018 or is this something that you have to judge month by month and might be continuing to make portfolio changes in 2019 as well?

Edward West -- Chief Executive Officer and Director

Yeah, great question, David. What we do know is first of those changes in LINK for July 1, of this year. So, that's going in place and we've been taking the actions accordingly and we'll continue to monitor and prepare and adjust as if this is going to continue forward, but obviously, we want to keep ear to the ground there. Australia, the same way -- we have to monitor the situation.

We still fully expect that consumer behavior will change. Sometimes it takes longer, sometimes it could move more quickly. We're going to monitor that. We've taken the initial actions but it's an ongoing exercise and the teams in both countries are doing an excellent job and really staying close to it in the performance.

David Ridley-Lane -- Bank of America Merrill Lynch -- Vice President

And then a follow-up, one, on 7-Eleven. I know you have various plans to recapture some of the volume from those 7-Eleven ATMs. Any early data you can share or how your expectations are around the ultimate percentage of those revenues you could retain?

Edward West -- Chief Executive Officer and Director

It comes back to the strength of Allpoint. There has been recapture, and that has benefited the retailers where Allpoint has been enabled there in seen customers where they've had growth at that. So we knew there would be some benefit for the remaining portfolio that came off of 7-Eleven when that ended. So that is captured in the numbers.

Also, the numbers that we've talked about, I think what Gary went through, we've seen that 1% excluding 7-Eleven growth, is really because there are other ins and outs through the period, it's a decent number looking out from a comparative standpoint from the beginning of the year. So what I'm trying to say is there, the trend's been good. The performance, there has been recapture, and it just speaks to the benefits of Allpoint.

David Ridley-Lane -- Bank of America Merrill Lynch -- Vice President

Thank you very much.

Operator

And once again, that is *-1 if you do have a question. We'll go next to Bob Napoli with William Blair.

Bob Napoli -- William Blair -- Analyst

Thank you. I appreciate the presentation. The growth over the next few years, as you look to invest more in FI relationships and invest more in Allpoint, do you have any targets for like, maybe what managed-services revenue and bank branding and surcharge-free network revenue should be as a percentage of total? Should we see that grow at a much faster rate than total revenue?

Edward West -- Chief Executive Officer and Director

Well, we do expect that line to grow over time. Targets, Bob, we're focused right now on executing within the business and making sure we're moving on the priorities that we outline here today and getting back to organic growth. We'll come back talking more broadly about longer-term targets, how you could look at the company on a longer-term basis and some longer-term financial targets. We'll come back on that.

Right now, frankly, the highest and best use where we're focused is just executing on getting this organic growth going and growing cash flow.

Bob Napoli -- William Blair -- Analyst

OK. And then the much higher depreciation expense this year as a percentage of revenue, I understand the 7-Eleven ATMs had very low depreciation, but 9.5% of revenue, somewhere in that range, is that something that you would expect over the mid- to longer term, that type of relationship between depreciation and revenue? And the CAPEX, $110 million of CAPEX, a lot of that maintenance, maybe two-thirds, as you broke out very nicely, and maintenance. Would you expect CAPEX to maintain the level you had in 2018 or grow from there?

Gary Ferrera -- Chief Financial Officer

Yeah I think on 2018 CAPEX, that is where we think we are right now based on the plan. As I mentioned, if things start really escalating during the year with financial institutions and something like that, we'll come back to you, and it could go up, but that would all be a positive because then obviously our growth would go up. When you start looking out further, it's too hard to say at this point in time, and as Ed said, we'll come back probably later in the year with more specificity to a longer-term plan, and when it comes to depreciation, I think the numbers you're seeing that we put in there now are good numbers assuming CAPEX level at what we're talking right now.

Bob Napoli -- William Blair -- Analyst

And last question. The IRRs on putting in a new ATM, how have they changed? How are they today versus what they've been historically for Cardtronics?

Edward West -- Chief Executive Officer and Director

Well, I would just say it depends on the market, where we're investing and growing and have growth, we feel very good about that, and decent performance and from what we've seen historically. In some markets you're not going to see any growth and, frankly, you're going to see a reduction in terms of ATMs and outstanding based on the factors that we talked about. All in all, we feel good about the returns where we have the investments. And, I guess, one other thing I would say is some of what we're talking about in terms of the business going forward, some of the growth in managed services, there's also a benefit there on certainty to revenue.

We talked about one of our priorities here is the organic growth, but it's also taking control of our revenues and top side. So, there's also benefit of having better visibility, better control and longer-term view of that capital.

Bob Napoli -- William Blair -- Analyst

Thank you. Appreciate it.

Operator

And we'll go next to Tim Willy with Wells Fargo.

Tim Willi -- Wells Fargo -- Analyst

Thank you and good afternoon. Two questions. First was just around sort of international. And I apologize, I jumped on a couple of minutes late, if you addressed it in your prepared comments.

I did hear you say you're shutting down or have shut down Poland. As you think, I guess, maybe beyond the immediate, call it 2018, outlook, are there other geographies that you would view as serious possibilities for de novo or some kind of entry acquisition, where there's probably a much stronger secular opportunity than maybe the existing franchise?

Edward West -- Chief Executive Officer and Director

Tim, good evening. I'm sure there are, and we believe there are, but our focus right now is on the markets where we're operating and getting the highest and best return on those, getting back to the organic growth, growing free cash flow and paying down debt. We'll come back on further expansion opportunities as they become present. Now, we may come across something that presents an extraordinary opportunity and an extraordinary return, but it will have a very high hurdle rate before we do something but we will deal with that at that point in time.

Gary Ferrera -- Chief Financial Officer

We haven't told people not to call us. We're taking calls, but at this point it's going to go through a very rigorous process.

Tim Willi -- Wells Fargo -- Analyst

Yeah, that makes sense and glad to hear that's sort of the approach. The follow-up I had was about the organic growth in the U.S. and I guess there's never necessarily a definitive reason why things may or may not happen, but would you attribute any of it or as you sort of think about your viewpoint, is it economics in terms of a better economy and more spending and money in people's pockets? Do you see data from your sources in the industry that show a lot of the maybe subpar locations of other independents are shrinking and losing volumes, that are migrating toward your better-positioned machines? Any sort of insight you might have around that organic growth profile in the U.S. for the last quarter or two?

Gary Ferrera -- Chief Financial Officer

I can't speak to others' growth profile but I can just tell you what we see for the U.S., it's broad-based. It's across most sectors that we have. The trends have been improving. That said, as I said earlier, we're obviously cautiously optimistic about it and take it one step at a time but it is fairly broad-based in nature.

I'm sure the economy does help with that and is supportive to it. Us being back in the U.S. at a 1% increase on a same-store increase, I mean, this company hasn't seen that in a long time. So that is encouraging and we'll evaluate it over time.

The other thing we do see through our independent business group, that area sees growth as well in terms of the broader platform and the processing. As you know, we processed a couple billion transactions a year. In the U.S. we're seeing more similar across the platform.

Tim Willi -- Wells Fargo -- Analyst

Great. Thanks very much.

Operator

Thank you everyone. That does conclude the question-and-answer session. I'd like to turn the conference back to our speakers for any additional or closing remarks.

Edward West -- Chief Executive Officer and Director

We just want to thank youll very much. Thank you very much for your confidence in Cardtronics and you have a team here and employee base that couldn't be more enthusiastic and positive about what we have ahead of us, and we're looking forward to spending more time with you. Have a great day.

Operator

Thank you, everyone. That does conclude today's conference. We thank you for your participation. You may now disconnect.

Duration: 61 minutes

Call Participants:

Dara Dierks -- Investor Relations

Edward West -- Chief Executive Officer and Director

Gary Ferrera -- Chief Financial Officer

Ramsey El-Assal -- Jefferies -- Analyst

Andrew Jeffrey -- SunTrust -- Analyst

Kartik Mehta -- Northcoast Research -- Executive Managing Director

David Ridley-Lane -- Bank of America Merrill Lynch -- Vice President

Bob Napoli -- William Blair -- Analyst

Tim Willi -- Wells Fargo -- Analyst

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