Company Quick10K Filing
Euronet Worldwide
Price143.64 EPS5
Shares56 P/E27
MCap8,040 P/FCF22
Net Debt-1,141 EBIT412
TEV6,899 TEV/EBIT17
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-02
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-08
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-10-27
10-Q 2017-06-30 Filed 2017-07-31
10-Q 2017-03-31 Filed 2017-05-02
10-K 2016-12-31 Filed 2017-03-01
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-08-01
10-Q 2016-03-31 Filed 2016-04-29
10-K 2015-12-31 Filed 2016-02-29
10-Q 2015-09-30 Filed 2015-11-02
10-Q 2015-06-30 Filed 2015-07-31
10-Q 2015-03-31 Filed 2015-04-30
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-10-28
10-Q 2014-06-30 Filed 2014-08-06
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-02-27
10-Q 2013-09-30 Filed 2013-10-31
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-03
10-K 2012-12-31 Filed 2013-02-27
10-Q 2012-09-30 Filed 2012-10-31
10-Q 2012-06-30 Filed 2012-08-06
10-Q 2012-03-31 Filed 2012-05-03
10-K 2011-12-31 Filed 2012-02-29
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-08-04
10-Q 2011-03-31 Filed 2011-05-05
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-11-04
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-03-01
8-K 2020-06-10
8-K 2020-05-26
8-K 2020-04-28
8-K 2020-03-20
8-K 2020-02-10
8-K 2019-10-22
8-K 2019-07-23
8-K 2019-05-23
8-K 2019-05-17
8-K 2019-05-17
8-K 2019-04-29
8-K 2019-04-04
8-K 2019-03-18
8-K 2019-03-13
8-K 2019-03-12
8-K 2019-02-07
8-K 2018-10-23
8-K 2018-10-18
8-K 2018-10-01
8-K 2018-07-24
8-K 2018-05-24
8-K 2018-05-21
8-K 2018-04-24
8-K 2018-02-06
8-K 2018-01-02

EEFT 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 eeft3312020ex311.htm
EX-31.2 eeft3312020ex312.htm
EX-32.1 eeft3312020ex321.htm
EX-32.2 eeft3312020ex322.htm

Euronet Worldwide Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
4.43.52.61.80.90.02012201420172020
Assets, Equity
0.80.60.40.30.1-0.12012201420172020
Rev, G Profit, Net Income
0.40.30.1-0.0-0.2-0.32012201420172020
Ops, Inv, Fin

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number: 001-31648
EURONET WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware
74-2806888
(State or other jurisdiction
(I.R.S. Employer
of incorporation or organization)
Identification No.)
 
 
 
3500 College Boulevard
 
Leawood,
Kansas
66211
(Address of principal executive offices)
(Zip Code)
(913) 327-4200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
EEFT
Nasdaq Global Select Market
1.375% Senior Notes due 2026
EEFT26
Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting company
Emerging growth company
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No þ
On May 6, 2020, Euronet Worldwide, Inc. had 52,205,743 shares of Common Stock outstanding.
 
 
 
 
 



EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Table of Contents
 
 
Page
 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
Item 1.
Item 1A.
Item 2.
Item 6.
 
 
 
 



PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 
As of
 
March 31,
2020
 
December 31,
2019
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
709,521

 
$
786,081

ATM cash
558,580

 
665,641

Restricted cash
28,953

 
34,301

Settlement assets
773,336

 
1,013,067

Trade accounts receivable, net of credit losses of $3,967 at March 31, 2020 and $3,892 at December 31, 2019
92,860

 
201,935

Prepaid expenses and other current assets
309,385

 
217,707

Total current assets
2,472,635

 
2,918,732

Operating right of use lease assets
379,584

 
377,543

Property and equipment, net of accumulated depreciation of $411,616 at March 31, 2020 and $410,243 at December 31, 2019
356,558

 
359,980

Goodwill
714,499

 
743,823

Acquired intangible assets, net of accumulated amortization of $201,810 at March 31, 2020 and $204,853 at December 31, 2019
130,177

 
141,847

Other assets, net of accumulated amortization of $47,941 at March 31, 2020 and $46,788 at December 31, 2019
130,932

 
115,741

Total assets
$
4,184,385

 
$
4,657,666

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Settlement obligations
$
773,336

 
$
1,013,067

Trade accounts payable
88,392

 
81,743

Accrued expenses and other current liabilities
365,326

 
294,557

Current portion of operating lease liabilities
129,151

 
127,353

Short-term debt obligations and current maturities of long-term debt obligations
3,528

 
6,089

Income taxes payable
40,090

 
52,583

Deferred revenue
61,767

 
58,588

Total current liabilities
1,461,590

 
1,633,980

Debt obligations, net of current portion
1,083,618

 
1,090,939

Operating lease obligations, net of current portion
243,639

 
241,977

Deferred income taxes
52,613

 
56,067

Other long-term liabilities
53,653

 
55,361

Total liabilities
2,895,113

 
3,078,324

Equity:
 
 
 
Euronet Worldwide, Inc. stockholders’ equity:
 
 
 
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; none issued

 

Common Stock, $0.02 par value. 90,000,000 shares authorized; 62,853,785 issued at March 31, 2020 and 62,775,762 issued at December 31, 2019
1,257

 
1,256

Additional paid-in-capital
1,198,097

 
1,190,058

Treasury stock, at cost, 10,648,096 shares at March 31, 2020 and 8,554,908 shares at December 31, 2019
(703,716
)
 
(463,704
)
Retained earnings
1,018,475

 
1,016,554

Accumulated other comprehensive loss
(224,667
)
 
(164,890
)
Total Euronet Worldwide, Inc. stockholders’ equity
1,289,446

 
1,579,274

Noncontrolling interests
(174
)
 
68

Total equity
1,289,272

 
1,579,342

Total liabilities and equity
$
4,184,385

 
$
4,657,666

See accompanying notes to the unaudited consolidated financial statements.

3


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
 
Three Months Ended
March 31,
 
2020
 
2019
Revenues
$
583,907

 
$
577,509

Operating expenses:
 
 
 
Direct operating costs
359,456

 
353,833

Salaries and benefits
101,240

 
92,795

Selling, general and administrative
60,793

 
48,147

Depreciation and amortization
30,816

 
26,640

Total operating expenses
552,305

 
521,415

Operating income
31,602

 
56,094

Other income (expense):
 
 
 
Interest income
567

 
343

Interest expense
(9,233
)
 
(8,199
)
Loss on early retirement of debt

 
(928
)
Foreign currency exchange (loss) gain, net
(18,806
)
 
3,208

Other gains
31

 
25

Other expense, net
(27,441
)
 
(5,551
)
Income before income taxes
4,161

 
50,543

Income tax expense
(2,441
)
 
(15,964
)
Net income
1,720

 
34,579

Net loss (income) attributable to noncontrolling interests
201

 
(36
)
Net income attributable to Euronet Worldwide, Inc.
$
1,921

 
$
34,543

 
 
 
 
Earnings per share attributable to Euronet Worldwide, Inc. stockholders:
 
 
 
Basic
$
0.04

 
$
0.67

Diluted
$
0.04

 
$
0.62

 
 
 
 
Weighted average shares outstanding:
 
 
 
Basic
53,607,104

 
51,880,534

Diluted
54,779,321

 
55,576,867

See accompanying notes to the unaudited consolidated financial statements.

4


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
 
Three Months Ended
March 31,
 
2020
 
2019
Net income
$
1,720

 
$
34,579

Translation adjustment
(59,818
)
 
(16,156
)
Comprehensive (loss) income
(58,098
)
 
18,423

Comprehensive loss (income) attributable to noncontrolling interests
242

 
(7
)
Comprehensive (loss) income attributable to Euronet Worldwide, Inc.
$
(57,856
)
 
$
18,416

See accompanying notes to the unaudited consolidated financial statements.

5


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, in thousands, except share data)

 
 
Number of
Shares
Outstanding
 
 
Common
Stock
 
Additional
Paid-in
Capital
 
 
Treasury
Stock
Balance as of December 31, 2018
 
51,819,998

 
$
1,198

 
$
1,104,264

 
$
(391,551
)
Net income
 
 
 
 
 
 
 
 
Other comprehensive loss
 
 
 
 
 
 
 
 
Stock issued under employee stock plans
 
130,136

 
3

 
5,194

 
(1,756
)
Share-based compensation
 
 
 
 
 
4,490

 
 
Issuance of convertible notes, net of tax
 
 
 
 
 
71,660

 
 
Repurchase and conversions of convertible notes, net of tax
 
6

 
 
 
(42,917
)
 
 
Balance as of March 31, 2019
 
51,950,140

 
$
1,201

 
$
1,142,691

 
$
(393,307
)


 
 
Number of
Shares
Outstanding
 
 
Common
Stock
 
Additional
Paid-in
Capital
 
 
Treasury
Stock
Balance as of December 31, 2019
 
54,220,854

 
$
1,256

 
$
1,190,058

 
$
(463,704
)
Net income (loss)
 
 
 
 
 
 
 
 
Other comprehensive loss
 
 
 
 
 
 
 
 
Stock issued under employee stock plans
 
80,519

 
1

 
1,701

 
(249
)
Share-based compensation
 
 
 
 
 
6,338

 
 
Repurchase of shares
 
(2,095,683
)
 
 
 
 
 
(239,763
)
Balance as of March 31, 2020
 
52,205,690

 
$
1,257

 
$
1,198,097

 
$
(703,716
)
See accompanying notes to the unaudited consolidated financial statements.


6


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
(Unaudited, in thousands)

 
 
 Retained Earnings
 
Accumulated Other
Comprehensive Loss
 
 
Noncontrolling
Interests
 
Total
Balance as of December 31, 2018
 
$
669,805

 
$
(151,043
)
 
$
169

 
$
1,232,842

Net income
 
34,543

 
 
 
36

 
34,579

Other comprehensive loss
 
 
 
(16,156
)
 
(29
)
 
(16,185
)
Stock issued under employee stock plans
 
 
 
 
 
 
 
3,441

Share-based compensation
 
 
 
 
 
 
 
4,490

Issuance of convertible notes, net of tax
 
 
 
 
 
 
 
71,660

Repurchases and conversions of convertible notes
 
 
 
 
 
 
 
(42,917
)
Balance as of March 31, 2019
 
$
704,348

 
$
(167,199
)
 
$
176

 
$
1,287,910


 
 
 Retained Earnings
 
Accumulated Other
Comprehensive Loss
 
 
Noncontrolling
Interests
 
Total
Balance as of December 31, 2019
 
$
1,016,554

 
$
(164,890
)
 
$
68

 
$
1,579,342

Net income (loss)
 
1,921

 
 
 
(201
)
 
1,720

Other comprehensive loss
 
 
 
(59,777
)
 
(41
)
 
(59,818
)
Stock issued under employee stock plans
 
 
 
 
 
 
 
1,453

Share-based compensation
 
 
 
 
 
 
 
6,338

Repurchase of shares
 
 
 
 
 
 
 
(239,763
)
Balance as of March 31, 2020
 
$
1,018,475

 
$
(224,667
)
 
$
(174
)
 
$
1,289,272

See accompanying notes to the unaudited consolidated financial statements.


7


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
Three Months Ended
March 31,
 
2020
 
2019
Net income
$
1,720

 
$
34,579

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
30,816

 
26,640

Share-based compensation
6,338

 
4,490

Unrealized foreign exchange loss (gain), net
18,806

 
(3,208
)
Deferred income taxes
(2,043
)
 
3,468

Accretion of convertible debt discount and amortization of debt issuance costs
4,616

 
4,071

Changes in working capital, net of amounts acquired:

 

Income taxes payable, net
(10,454
)
 
635

Trade accounts receivable
300,063

 
(31,456
)
Prepaid expenses and other current assets
(119,648
)
 
33,787

Trade accounts payable
(126,242
)
 
(115,380
)
Deferred revenue
4,119

 
3,005

Accrued expenses and other current liabilities
14,811

 
51,377

Changes in noncurrent assets and liabilities
(17,018
)
 
953

Net cash provided by operating activities
105,884

 
12,961

Cash flows from investing activities:
 
 

Acquisitions, net of cash acquired
475

 

Purchases of property and equipment
(30,392
)
 
(31,390
)
Purchases of other long-term assets
(2,046
)
 
(1,783
)
Other, net
357

 
187

Net cash used in investing activities
(31,606
)
 
(32,986
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of shares
1,700

 
5,171

Repurchase of shares
(240,530
)
 
(2,275
)
Borrowings from revolving credit agreements
805,500

 
1,209,446

Repayments of revolving credit agreements
(805,500
)
 
(1,425,398
)
Proceeds from long-term debt obligations

 
525,000

Repayments of long-term debt obligations

 
(94,199
)
Net borrowing from short-term debt obligations
(2,163
)
 
(11,779
)
Debt issuance costs

 
(11,812
)
Other, net
(1,651
)
 
(1,452
)
Net cash (used in) provided by financing activities
(242,644
)
 
192,702

Effect of exchange rate changes on cash and cash equivalents and restricted cash
(59,260
)
 
(12,387
)
(Decrease) increase in cash and cash equivalents and restricted cash
(227,626
)
 
160,290

Cash and cash equivalents and restricted cash at beginning of period
1,817,379

 
1,130,952

 
 
 
 
Cash and cash equivalents and restricted cash at end of period
$
1,589,753

 
$
1,291,242

 
 
 
 
Supplemental disclosure of cash flow information:
 
 
 
Interest paid during the period
$
3,678

 
$
5,491

Income taxes paid during the period
$
16,064

 
$
12,074

See accompanying notes to the unaudited consolidated financial statements.

8


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1) GENERAL
Organization
Euronet Worldwide, Inc. (the “Company” or “Euronet”) was established as a Delaware corporation on December 13, 1997 and succeeded Euronet Holding N.V. as the group holding company, which was founded and established in 1994. Euronet is a leading electronic payments provider. Euronet offers payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Euronet's primary product offerings include comprehensive automated teller machine (“ATM”), point-of-sale (“POS”), card outsourcing, card issuing and merchant acquiring services, electronic distribution of prepaid mobile airtime and other electronic payment products, and global money transfer services.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared from the records of the Company, in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, such unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations, comprehensive income and cash flows for the interim periods. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019, including the notes thereto, set forth in the Company’s 2019 Annual Report on Form 10-K.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include computing income taxes, estimating the useful lives and potential impairment of long-lived assets and goodwill, as well as allocating the purchase price to assets acquired and liabilities assumed in acquisitions and revenue recognition. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2020.
Seasonality
Euronet’s Electronic Funds Transfer ("EFT") Processing Segment experiences its heaviest demand for dynamic currency conversion services during the third quarter of the fiscal year, normally coinciding with the tourism season. Additionally, the EFT Processing and epay Segments are normally impacted by seasonality during the fourth quarter and first quarter of each year due to higher transaction levels during the holiday season and lower levels following the holiday season. Seasonality in the money transfer segment varies by region of the world. In most markets, Euronet usually experiences increased demand for money transfer services from the month of May through the fourth quarter of each year, coinciding with the increase in worker migration patterns and various holidays, and its lowest transaction levels during the first quarter of the year.
COVID-19 (coronavirus)
The outbreak of the COVID-19 (coronavirus) pandemic has resulted in travel restrictions across borders, and shelter-in-place orders in most of the countries where the Company operates. The majority of these orders went into effect in late February 2020 or early March 2020. These orders have negatively impacted all of our three operating segments. The EFT Segment has experienced declines in transaction volumes due to these restrictions, especially high-margin cross-border transactions. Although the epay Segment has experienced revenue growth from increased digital content purchases which can be completed remotely, many of its POS retail locations have been closed, reducing in person transactions. Our Money Transfer Segment has experienced declines in transaction volumes due to the restrictions noted above, which have also led to the temporary closure of many of our company owned stores and agents. The Money Transfer Segment has experienced an increase in receivable delinquencies as our agents have been temporarily closed as nonessential services.
In response to the COVID-19 driven impacts, the Company has implemented several key measures to offset the impact across the business, including negotiating certain third party contracts, reducing travel, decreasing planned 2020 capital expenditures, and expanding ATM winterizations (placing them in dormancy status) in more sites and more markets.



9


(2) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for contracts, hedging relationships, and other transactions affected by reference rate reform due to the anticipated cessation of LIBOR on or before December 31, 2021. This guidance is effective from March 12, 2020 through December 31, 2022 and could impact the accounting for LIBOR provisions in the Company’s unsecured credit agreement. The Company does not expect that the adoption of this guidance will have a significant impact on its consolidated financial statements.

The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), as of January 1, 2020, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The adoption of this standard did not have a significant impact on the Company's consolidated financial statements and related disclosures.

(3) SETTLEMENT ASSETS AND OBLIGATIONS

Settlement assets represent funds received or to be received from agents for unsettled money transfers and from merchants for unsettled prepaid transactions. The Company records corresponding settlement obligations relating to amounts payable. Settlement assets consist of cash and cash equivalents, restricted cash, accounts receivable and prepaid expenses and other current assets. Cash received by Euronet agents and merchants generally become available to the Company within two weeks after initial receipt by the business partner. Receivables from business partners represent funds collected by such business partners that are in transit to the Company.

Settlement obligations consist of money transfers and accounts payable to agents and content providers. Money transfer accounts payable represent amounts to be paid to transferees when they request funds. Most agents typically settle with transferees first then obtain reimbursement from the Company. Money order accounts payable represent amounts not yet presented for payment. Due to the agent funding and settlement process, accounts payable to agents represent amounts due to agents for money transfers that have not been settled with transferees.

 
 
As of
(in thousands)
 
March 31,
2020
 
December 31,
2019
Settlement assets:
 
 
 
 
Settlement cash and cash equivalents
 
$
256,456

 
$
282,188

Settlement restricted cash
 
36,243

 
49,168

Accounts receivable
 
364,148

 
574,410

Prepaid expenses and other current assets
 
116,489

 
107,301

Total settlement assets
 
$
773,336

 
$
1,013,067

Settlement obligations:
 
 
 
 
Trade account payables
 
$
353,498

 
$
504,667

Accrued expenses and other current liabilities
 
419,838

 
508,400

Total settlement obligations
 
$
773,336

 
$
1,013,067



A portion of the Company's credit losses are recorded in the accounts receivable within settlement assets. The balance of credit losses related to accounts receivable within settlement assets was $28.3 million and $24.0 million as of March 31, 2020 and December 31, 2019, respectively.







10


The table below reconciles cash and cash equivalents, restricted cash, ATM cash, settlement cash and cash equivalents, and settlement restricted cash as presented within "Cash and cash equivalents and restricted cash" in the Consolidated Statement of Cash Flows.
 
 
As of
(in thousands)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
 
December 31,
2018
Cash and cash equivalents
 
$
709,521

 
$
786,081

 
$
558,454

 
$
385,031

Restricted cash
 
28,953

 
34,301

 
34,398

 
31,237

ATM cash
 
558,580

 
665,641

 
421,897

 
395,378

Settlement cash and cash equivalents
 
256,456

 
282,188

 
235,946

 
273,948

Settlement restricted cash
 
36,243

 
49,168

 
40,547

 
45,358

Cash and cash equivalents and restricted cash at end of period
 
$
1,589,753

 
$
1,817,379

 
$
1,291,242

 
$
1,130,952



(4) STOCKHOLDERS' EQUITY
Earnings Per Share
Basic earnings per share has been computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the respective period. Diluted earnings per share has been computed by dividing earnings available to common stockholders by the weighted average shares outstanding during the respective period, after adjusting for the potential dilution of options to purchase the Company's Common Stock, assumed vesting of restricted stock and the assumed conversion of the Company's convertible debt.

The following table provides the computation of diluted weighted average number of common shares outstanding:

Three Months Ended
March 31,
 
2020
 
2019
Computation of diluted weighted average shares outstanding:
 
 
 
Basic weighted average shares outstanding
53,607,104

 
51,880,534

Incremental shares from assumed exercise of stock options and vesting of restricted stock
1,172,217

 
1,285,139

Incremental shares from assumed conversion of convertible debentures

 
2,411,194

Diluted weighted average shares outstanding
54,779,321

 
55,576,867


The table includes all stock options and restricted stock that are dilutive to the Company's weighted average common shares outstanding during the period. The calculation of diluted earnings per share excludes stock options or shares of restricted stock that are anti-dilutive to the Company’s weighted average common shares outstanding for the three months ended March 31, 2020 and 2019 of approximately 886,000 and 402,000, respectively.
The Company issued new Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019 and retired the existing convertible notes ("Retired Convertible Notes") that would have matured in 2044 on May 28, 2019. The Company's Convertible Notes currently have, and the Retired Convertible Notes had, a settlement feature requiring the Company upon conversion to settle the principal amount of the debt and any conversion value in excess of the principal value ("conversion premium"), for cash or shares of the Company's common stock or a combination thereof, at the Company's option. The Company has stated its intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion premium. Accordingly, the Convertible Notes and the Retired Convertible Notes were included in the calculation of diluted earnings per share if their inclusion was dilutive. The dilutive effect increases the more the market price exceeds the conversion price. The Retired Convertible Notes had a dilutive effect for the three months ended March 31, 2019 as the $142.59 market price per share of common stock as of March 31, 2019 exceeded the $72.18 conversion price per share. The Convertible Notes would only have a dilutive effect if the market price per share of common stock exceeds the conversion price of $188.73 per share. The market price per share per share of common stock was $85.72, therefore, according to ASC Topic 260, Earnings per Share (“ASC 260”), there was no dilutive effect of the assumed conversion of the debentures as of March 31, 2020, whereas the dilutive effect was 2,411,194 shares for the three months ended March 31, 2019. See Note 8, Debt Obligations, to the Consolidated Financial Statements for more information about the convertible notes.

11


Share repurchases
The Company's Board of Directors had authorized a stock repurchase program allowing Euronet to repurchase up to $375 million in value or 10.0 million shares of stock through March 31, 2020. On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized an additional repurchase program of $120 million in value of the Company's common stock through March 11, 2021. On February 26, 2020, the Company put a repurchase program in place to repurchase up to $250 million in value, but not more than 5.0 million shares of common stock through February 28, 2022. For the first quarter of 2020, the Company repurchased $239.8 million in value of Euronet common stock under the repurchase programs. Repurchases under either program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss consists entirely of foreign currency translation adjustments. The Company recorded foreign currency translation losses of $59.8 million for the three months ended March 31, 2020 and $16.2 million for the three months ended March 31, 2019. There were no reclassifications of foreign currency translation into the consolidated statements of income for the three months ended March 31, 2020 and 2019.

(5) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET
A summary of acquired intangible assets and goodwill activity for the three months ended March 31, 2020 is presented below:
(in thousands)
 
Acquired
Intangible
Assets
 
Goodwill
 
Total
Intangible
Assets
Balance as of December 31, 2019
 
$
141,847

 
$
743,823

 
$
885,670

Decreases:
 
 
 
 
 
 
Acquisition
 

 
(474
)
 
(474
)
Amortization
 
(5,726
)
 

 
(5,726
)
Other (primarily changes in foreign currency exchange rates)
 
(5,944
)
 
(28,850
)
 
(34,794
)
Balance as of March 31, 2020
 
$
130,177

 
$
714,499

 
$
844,676


Estimated amortization expense on intangible assets with finite lives as of March 31, 2020, is expected to total $16.1 million for the remainder of 2020, $20.8 million for 2021, $19.8 million for 2022, $15.3 million for 2023, $9.3 million for 2024 and $6.3 million for 2025.
The Company’s annual goodwill impairment test is performed during the fourth quarter of its fiscal year. The annual impairment test for the year ended December 31, 2019 resulted in no impairment charge. The Company considered the impact of COVID-19 on its operations at the reporting unit level and determined that there was no impairment as of March 31, 2020. 
Determining the fair value of reporting units requires significant management judgment in estimating future cash flows and assessing potential market and economic conditions. It is reasonably possible that the Company’s operations will not perform as expected, or that the estimates or assumptions included in the 2019 annual impairment test could change, which may result in the Company recording material non-cash impairment charges during the year in which these changes take place. In response to the COVID-19 pandemic, we will continue to monitor the evaluation of global medical experts and scientists. As information regarding the impact of the COVID-19 pandemic on the Company's business, including intangible assets, becomes available, the impacts to cash flows and the related impact on recovery of intangible assets will be evaluated.

(6) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
 
 
As of
(in thousands)
 
March 31, 2020
 
December 31, 2019
Accrued expenses
 
$
228,724

 
$
246,699

Derivative liabilities
 
130,555

 
41,935

Current portion of capital lease obligations
 
6,047

 
5,919

Deferred income taxes
 

 
4

Total
 
$
365,326

 
$
294,557




12



(7) UNEARNED REVENUES
Accounting Standards Codification ("ASC") Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) requires the deferral of incremental costs to obtain customer contracts, known as contract assets, which are then amortized to expense as part of selling, general and administrative expense over the respective periods of expected benefit. Such costs are not material; however, the Company has implemented processes and controls to record such costs on an ongoing basis and will disclose them if they become material.

The Company records deferred revenues when cash payments are received or due in advance of its performance. The increase in the deferred revenue balance for the first quarter of 2020 is primarily driven by $19.0 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, largely offset by $15.7 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2019.

(8) DEBT OBLIGATIONS
Debt obligations consist of the following:
 
 
As of
(in thousands)
 
March 31, 2020
 
December 31, 2019
Credit Facility:
 
 
 
 
Revolving credit agreement
 
$

 
$

Convertible Debt:
 
 
 
 
0.75% convertible notes, unsecured, due 2049
 
440,713

 
436,965

 
 
 
 
 
1.375% Senior Notes, due 2026
 
661,560

 
673,440

 
 
 
 
 
Other obligations
 
3,598

 
6,215

 
 
 
 
 
Total debt obligations
 
1,105,871

 
1,116,620

Unamortized debt issuance costs
 
(18,725
)
 
(19,592
)
Carrying value of debt
 
1,087,146

 
1,097,028

Short-term debt obligations and current maturities of long-term debt obligations
 
(3,528
)
 
(6,089
)
Long-term debt obligations
 
$
1,083,618

 
$
1,090,939



Credit Facility
On October 17, 2018, the Company entered into an unsecured revolving credit agreement (the "Credit Facility") for $1.0 billion that expires on October 17, 2023. Fees and interest on borrowings are based upon the Company's corporate credit rating and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over London Inter-Bank Offered Rate (“LIBOR”) or a margin over the base rate, as selected by the Company, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans). The unsecured revolving credit agreement allows for borrowings in Australian Dollars, British Pounds Sterling, Canadian Dollars, Czech Koruna, Danish Krone, euros, Hungarian Forints, Japanese Yen, New Zealand Dollars, Norwegian Krone, Polish Zlotys, Swedish Krona, Swiss Francs, and U.S. Dollars. The revolving credit facility contains a $200 million sublimit for the issuance of letters of credit, a $50 million sublimit for U.S. Dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans.
The unsecured revolving credit agreement contains customary affirmative and negative covenants, events of default and financial covenants. The Company was in compliance with all debt covenants, as of March 31, 2020.
Convertible Debt
On March 18, 2019, the Company completed the sale of $525.0 million of Convertible Senior Notes ("Convertible Notes"). The Convertible Notes mature in March 2049 unless redeemed or converted prior to such date, and are convertible into shares of Euronet Common Stock at a conversion price of approximately $188.73 per share if certain conditions are met (relating to the closing price of Euronet Common Stock exceeding certain thresholds for specified periods). Holders of the Convertible Notes have the option to require the Company to purchase their notes on each of March 15, 2025, March 15, 2029, March 15, 2034,

13


March 15, 2039 and March 15, 2044 at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

On March 18, 2019, the Company provided a notice of redemption to the trustee of the indenture governing the Company's 1.5% Convertible Senior Notes due 2044 (the "Retired Convertible Notes"), pursuant to which the Company would redeem all of the remaining principal amount outstanding of the Retired Convertible Notes on May 28, 2019 (the "Redemption Date") for cash at a redemption price equal to 100% of the principal amount of the Retired Convertible Notes redeemed plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date.

In accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt is allocated between debt and equity components so that debt is discounted to reflect the Company's nonconvertible debt borrowing rate. ASC 470-20-35-13 requires the debt discount to be amortized over the period the convertible debt is expected to be outstanding as additional non-cash interest expense. The allocation resulted in an increase to additional paid-in capital of $99.7 million for the Convertible Notes.

Contractual interest expense for the Convertible Notes was $1.0 million for the three months ended March 31, 2020. Accretion expense for the Convertible Notes was $3.7 million for the three months ended March 31, 2020. Contractual interest expense for the Convertible Notes and Retired Convertible Notes was $0.2 million and $1.5 million, respectively for the three months ended March 31, 2019. Accretion expense for the Convertible Notes and Retired Convertible Notes was $0.6 million and $2.9 million, respectively for the three months ended March 31, 2019. The effective interest rate was 4.4% for the three months ended March 31, 2020. As of March 31, 2020, the unamortized discount was $84.3 million and will be amortized through March 2025.
1.375% Senior Notes due 2026
On May 22, 2019, the Company completed the sale of 600 million ($669.9 million) aggregate principal amount of Senior Notes that expire on May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of March 31, 2020, the Company has outstanding 600 million ($661.6 million) principal amount of the Senior Notes. In addition, the Company may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.
Other obligations
Certain of the Company's subsidiaries have available lines of credit and overdraft credit facilities that generally provide for short-term borrowings that are used from time to time for working capital purposes. As of March 31, 2020 and December 31, 2019, borrowings under these arrangements were $3.6 million and $6.2 million, respectively.
Uncommitted Line of Credit
On September 4, 2019, the Company entered into an Uncommitted Loan Agreement with Bank of America which may provide Euronet up to $100.0 million under an uncommitted line of credit. Interest on borrowings is equal to LIBOR plus 0.65% and the agreement expires September 4, 2020. As of March 31, 2020, no amounts were outstanding under the line of credit.

(9) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to foreign currency exchange risk resulting from (i) the collection of funds or the settlement of money transfer transactions in currencies other than the U.S. dollar, (ii) derivative contracts written to its customers in connection with providing cross-currency money transfer services and (iii) certain foreign currency denominated other asset and liability positions. The Company enters into foreign currency derivative contracts, primarily foreign currency forwards and cross-currency swaps, to minimize its exposure related to fluctuations in foreign currency exchange rates. As a matter of Company policy, the derivative instruments used in these activities are economic hedges and are not designated as hedges under ASC 815, primarily due to either the relatively short duration of the contract term or the effects of fluctuations in currency exchange rates are reflected concurrently in earnings for both the derivative instrument and the transaction and have an offsetting effect.
Foreign currency exchange contracts - Ria Operations and Corporate
In the United States, the Company uses short-duration foreign currency forward contracts, generally with maturities up to 14 days, to offset the fluctuation in foreign currency exchange rates on the collection of money transfer funds between initiation of a transaction and its settlement. Due to the short duration of these contracts and the Company’s credit profile, the Company is generally not required to post collateral with respect to these foreign currency forward contracts. Most derivative contracts executed with counterparties in the U.S. are governed by an International Swaps and Derivatives Association agreement that includes standard netting arrangements; therefore, asset and liability positions from forward contracts and all other foreign exchange transactions with the same counterparty are net settled upon maturity. As of March 31, 2020, the Company had

14


foreign currency forward contracts outstanding in the U.S. with a notional value of $213 million. The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds, euros and Mexican pesos.
In addition, the Company uses forward contracts, typically with maturities from a few days to less than one year, to offset
foreign exchange rate fluctuations on certain short-term borrowings that are payable in currencies other than the U.S dollar. As of March 31, 2020, the Company had foreign currency forward contracts outstanding with a notional value of $193 million, primarily in euros.
Foreign currency exchange contracts - xe Operations
xe, writes derivative instruments, primarily foreign currency forward contracts and cross-currency swaps, mostly with counterparties comprised of individuals and small-to-medium size businesses and derives a currency margin from this activity as part of its operations. xe aggregates its foreign currency exposures arising from customer contracts and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. Foreign exchange revenues from xe's total portfolio of positions were $18.1 million and $18.6 million for the three months ended March 31, 2020 and 2019, respectively. All of the derivative contracts used in the Company' s xe operations are economic hedges and are not designated as hedges under ASC 815. The duration of these derivative contracts is generally less than one year.
The fair value of xe's total portfolio of positions can change significantly from period to period based on, among other factors, market movements and changes in customer contract positions. xe manages counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis. It mitigates this risk by entering into contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. xe does not expect any significant losses from counterparty defaults.
The aggregate equivalent U.S. dollar notional amounts of foreign currency derivative customer contracts held by the Company in its xe operations as of March 31, 2020 was approximately $1.5 billion. The significant majority of customer contracts are written in major currencies such as the euro, U.S. dollar, British pound, Australian dollar and New Zealand dollar.
Balance Sheet Presentation
The following table summarizes the fair value of the derivative instruments as recorded in the Consolidated Balance Sheets as of the dates below:
 
 
Asset Derivatives
 
Liability Derivatives
 
 
 
 
Fair Value
 
 
 
Fair Value
(in thousands)
 
Balance Sheet Location
 
March 31, 2020
 
December 31, 2019
 
Balance Sheet Location
 
March 31, 2020
 
December 31, 2019
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange contracts
 
Prepaid expenses and other current assets
 
$
142,148

 
$
54,765

 
Accrued expenses and other current liabilities
 
$
(130,555
)
 
$
(41,935
)

The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2020 and December 31, 2019 (in thousands):
Offsetting of Derivative Assets
 
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheet
 
 
As of March 31, 2020
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheet
 
Net Amounts Presented in the Consolidated Balance Sheet
 
Financial Instruments
 
Cash Collateral Received
 
Net Amounts
Derivatives subject to a master netting arrangement or similar agreement
 
$
142,148

 
$

 
$
142,148

 
$
(105,671
)
 
$
(14,633
)
 
$
21,844

 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives subject to a master netting arrangement or similar agreement
 
$
54,765

 
$

 
$
54,765

 
$
(34,935
)
 
$
(7,362
)
 
$
12,468


15


Offsetting of Derivative Liabilities
 
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheet
 
 
As of March 31, 2020
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheet
 
Net Amounts Presented in the Consolidated Balance Sheet
 
Financial Instruments
 
Cash Collateral Paid
 
Net Amounts
Derivatives subject to a master netting arrangement or similar agreement
 
$
(130,555
)
 
$

 
$
(130,555
)
 
$
105,671

 
$
1,760

 
$
(23,124
)
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives subject to a master netting arrangement or similar agreement
 
$
(41,935
)
 
$

 
$
(41,935
)
 
$
34,935

 
$
827

 
$
(6,173
)

See Note 10, Fair Value Measurements, for the determination of the fair values of derivatives.

Income Statement Presentation
The following table summarizes the location and amount of gains and losses on derivatives in the Consolidated Statements of Income for the three months ended March 31, 2020 and 2019:
 
 
 
 
Amount of Gain Recognized in Income on Derivative Contracts (a)
 
 
Location of Gain Recognized in Income on Derivative Contracts
 
Three Months Ended
March 31,
(in thousands)
 
 
2020
 
2019
Foreign currency exchange contracts - Ria Operations
 
Foreign currency exchange gain, net
 
$
1,019

 
$
2,459


(a) The Company enters into derivative contracts such as foreign currency exchange forwards and cross-currency swaps as part of its xe operations. These derivative contracts are excluded from this table as they are part of the broader disclosure of foreign currency exchange revenues for this business discussed above.

See Note 10, Fair Value Measurements, for the determination of the fair values of derivatives.

(10) FAIR VALUE MEASUREMENTS
Fair value measurements used in the unaudited consolidated financial statements are based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. 
Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.




16



The following table details financial assets and liabilities measured and recorded at fair value on a recurring basis:
 
 
 
 
As of March 31, 2020
(in thousands)
 
Balance Sheet Classification
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange contracts
 
Other current assets
 
$

 
$
142,148

 
$

 
$
142,148

Liabilities
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange contracts
 
Other current liabilities
 
$

 
$
(130,555
)
 
$

 
$
(130,555
)
 
 
 
 
As of December 31, 2019
(in thousands)
 
Balance Sheet Classification
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange contracts
 
Other current assets
 
$

 
$
54,765

 
$

 
$
54,765

Liabilities
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange contracts
 
Other current liabilities
 
$

 
$
(41,935
)
 
$

 
$
(41,935
)

Other Fair Value Disclosures
The carrying amounts of cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt obligations approximate fair values due to their short maturities. The carrying values of the Company’s revolving credit agreements approximate fair values because interest is based on LIBOR that resets at various intervals of less than one year. The Company estimates the fair value of the Convertible Notes using quoted prices in inactive markets for identical liabilities (Level 2). As of March 31, 2020, the fair values of the Convertible Notes and Senior Notes were $597.0 million and $615.7 million, respectively, with carrying values of $440.7 million and $661.6 million, respectively.

(11) SEGMENT INFORMATION
Euronet’s reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting (“ASC 280”). The Company currently operates in the following three reportable operating segments:
1)
Through the EFT Processing Segment, the Company processes transactions for a network of ATMs and POS terminals across Europe, the Middle East and Asia Pacific. The Company provides comprehensive electronic payment solutions consisting of ATM cash withdrawal services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, dynamic currency conversion, domestic and international surcharge and other value added services. Through this segment, the Company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.
2)
Through the epay Segment, the Company provides distribution, processing and collection services for prepaid mobile airtime and other electronic payment products in Europe, the Middle East, Asia Pacific, the U.S. and South America.
3)
Through the Money Transfer Segment, the Company provides global money transfer services under the brand names, Ria, AFEX Money Express, IME, and xe. Ria, AFEX Money Express and IME provide global consumer-to-consumer money transfer services through a network of sending agents, Company-owned stores and Company-owned websites, disbursing money transfers through a worldwide correspondent network. xe offers account-to-account international payment services to high-income individuals and small-to-medium sized businesses. xe is also a provider of foreign currency exchange information. The Company also offers customers bill payment services, payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services, foreign currency exchange services and mobile top-up. Furthermore, xe provides cash management solutions and foreign currency risk management services to small-to-medium sized businesses.




17


In addition, the Company accounts for non-operating activity, share-based compensation expense, certain intersegment eliminations and the costs of providing corporate and other administrative services in its administrative division, “Corporate Services, Eliminations and Other.” These services are not directly identifiable with the Company’s reportable operating segments.

The following tables present the Company’s reportable segment results for the three months ended March 31, 2020 and 2019:
 
 
For the Three Months Ended March 31, 2020
(in thousands)
 
EFT
Processing
 
epay
 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 
Consolidated
Total revenues
 
$
145,825

 
$
172,911

 
$
266,234

 
$
(1,063
)
 
$
583,907

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Direct operating costs
 
87,536

 
130,074

 
142,909

 
(1,063
)
 
359,456

Salaries and benefits
 
22,091

 
15,697

 
53,864

 
9,588

 
101,240

Selling, general and administrative
 
10,941

 
8,838

 
38,582

 
2,432

 
60,793

Depreciation and amortization
 
20,322

 
1,844

 
8,571

 
79

 
30,816

Total operating expenses
 
140,890

 
156,453

 
243,926

 
11,036

 
552,305

Operating income (expense)
 
$
4,935

 
$
16,458

 
$
22,308

 
$
(12,099
)
 
$
31,602

 
 
For the Three Months Ended March 31, 2019
(in thousands)
 
EFT
Processing
 
epay
 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 
Consolidated
Total revenues
 
$
145,703

 
$
176,114

 
$
256,581