What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-08-06 compared with 2020-05-07 · 188 added, 161 removed, 356 unchanged (50% of the section changed)

35 unchanged sentences

the impact of changes in laws and regulations affecting the profitability of our services, including regulation of DCC transactions or ATM access fees by the E.U.;

our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, consumer and data protection and the E.U.'s General Data Privacy Regulation and the Services Payment Directive ("PSD2") and Part II, Item 1A of this Quarterly Report on Form 10-Q, requirements;

changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC transactions;

7 unchanged sentences

Our Annual Report on Form 10-K is available on the SEC's EDGAR website at www.sec.gov, and copies may also be obtained by contacting the Company.

Any forward-looking statements made in this Form 10-Q speak only

as of the date of this report.

Any forward-looking statements made in this Form 10-Q speak only as of the date of this report.

Except as required by law, we do not intend, and do not undertake any obligation, to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

23 unchanged sentences

Each operating segment’s sources of revenues are described below.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 25% of total consolidated revenues for the first quarter of 2020 , are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 15 % and 20% of total consolidated revenues for the three and six months ended June 30, 2020, respectively, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs.

Revenues in this segment are also derived from cardless payment, banknote recycling, tax refund services, license fees, professional services and maintenance fees for proprietary application software and sales of related hardware.

epay Segment — Revenues in the epay Segment, which represented approximately 30% of total consolidated revenues for the first quarter of 2020 , are primarily derived from commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts.

epay Segment — Revenues in the epay Segment, which represented approximately 35 % and 32 % of total consolidated revenues for the three and six months ended June 30, 2020, respectively, are primarily derived from commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic content, vouchers, and physical gifts.

The proportion of epay Segment revenues earned from the distribution of prepaid mobile phone time compared with other electronic products has decreased over time, and digital media content now produces approximately 63% of epay Segment revenues.

Other electronic content offered by this segment includes digital content such as music, games and software, as well as, other products including prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, gift cards, vouchers, transport payments, lottery payments, bill payment, and money transfer.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 45% of total consolidated revenues for the first quarter of 2020 , are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 50% and 48% of total consolidated revenues for the three and six months ended June 30, 2020, respectively, are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates.

We have a sending agent network in place comprised of agents, customer service representatives, Company-owned stores, primarily in North America, Europe and Malaysia, and Ria, and xe branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries.

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SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three months ended March 31, 2020 and 2019 are summarized in the tables below:

Revenues for the Three Months Ended March 31,

Revenues and operating income by segment for the three and six months ended June 30, 2020 and 2019 are summarized in the tables below:

Revenues for the Three Months Ended June 30,

Year-over-Year Change

Revenues for the Six Months Ended June 30,

Year-over-Year Change

(dollar amounts in thousands)

2 unchanged sentences

Corporate services, eliminations and other

Operating Income (Expense) for the Three Months Ended March 31,

Operating Income (Expense) for the Three Months Ended June 30,

Year-over-Year Change

Operating Income (Expense) for the Six Months Ended June 30,

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease)

EFT Processing

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Average Translation Rate

Three Months Ended March 31,

Decrease Percent

Three Months Ended June 30,

Average Translation Rate

Six Months Ended June 30,

Currency (dollars per foreign currency)

Decrease Percent

Australian dollar

British pound

British pounds sterling

Hungarian forint

1 unchanged sentence

New Zealand dollar

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

EFT PROCESSING SEGMENT

The following table summarizes the results of operations for our EFT Processing Segment for the three months ended March 31, 2020 and 2019 :

The following table summarizes the results of operations for our EFT Processing Segment for the three and six months ended June 30, 2020 and 2019 :

Three Months Ended

Year-over-Year Change

Six Months Ended

Year-over-Year Change

(dollar amounts in thousands)

1 unchanged sentence

(Decrease) Percent

Increase (Decrease) Amount

(Decrease) Percent

Total revenues

3 unchanged sentences

Selling, general and administrative

Goodwill impairment

Depreciation and amortization

Total operating expenses

Operating income

Operating (loss) income

Transactions processed (millions)

ATMs as of March 31,

EFT Processing Segment total revenues for the three months ended March 31, 2020 were $145.8 million and $145.7 million for the same period in 2019.

Total revenues for the three months ended March 31, 2020 slightly increased due to growth in the Asia Pacific and United States markets, offset by the impact of fewer European ATM transactions, especially high-margin cross-border transactions (DCC), related to the COVID-19 pandemic driven government imposed border closures and shelter-in-place orders.

The government imposed border closures went into place throughout Europe in late February 2020 and early March 2020.

These closures resulted in a decrease in revenues in the month of March 2020 compared to March 2019.

While the EFT Segment had an overall slight increase in revenues for the quarter ended March 31, 2020, the growth rate was reduced by the decrease in revenues in March 2020 compared to March 2019.

Foreign currency movements decreased total revenues by approximately $3.8 million for the three months ended March 31, 2020 compared to the same period in 2019 .

Average monthly revenues per ATM were $1,085 for the three months ended March 31, 2020 and $1,187 for the three months ended March 31, 2019 .

Revenues per transaction were $0.19 for the three months ended March 31, 2020 compared to $0.21 for the same period in 2019 .

The decreases in average monthly revenues per ATM and revenues per transaction were attributable to the revenue decrease from DCC, which earns higher revenues per transaction than other ATM or card-based services, surcharges and the U.S.

dollar strengthening against key foreign currencies.

ATMs as of June 30,

EFT Processing Segment total revenues for the three and six months ended June 30, 2020 were $ 78.5 million and $ 224.3 million , respectively, a decrease of $153.5 million or 66% and $153.3 million or 41% compared to the same periods in 2019 , respectively.

Total revenues for the three and six months ended June 30, 2020 decreased due to the impact of fewer active ATMs and fewer ATM transactions, especially high-margin cross-border transactions (DCC), related to COVID-19 pandemic-driven government-imposed border closures and shelter-in-place orders.

The government imposed border closures and shelter-in-place orders were in effect for the majority of the three and six months ended June 30, 2020.

These closures and orders resulted in a decrease in revenues for the three and six months ended June 30, 2020 compared to the three and six months ended June 30, 2019.

Foreign currency movements decreased total revenues by approximately $ 3.3 million and $ 7.1 million for the three and six months ended June 30, 2020 compared to the same period in 2019 .

Average monthly revenues per ATM were $ 648 and $ 878 for the three and six months ended June 30, 2020 , respectively, compared to $1,691 and $1,453 for the three and six months ended June 30, 2019 , respectively.

Revenues per transaction were $ 0.12 and $0.15 for the three and six months ended June 30, 2020, respectively , compared to $0.31 and $0.26 for the three and six months ended June 30, 2019 , respectively .

The decreases in average monthly revenues per ATM were attributable to the decreases in transactions and revenues per transaction, driven by the decrease from D CC, which earns higher revenues per transaction than other ATM or card-based services, surcharges.

The decrease in DCC transactions was due to the decline in tourism throughout Europe driven by the border closures during the three months ended June 30, 2020.

Direct operating costs

EFT Processing Segment direct operating costs were $87.5 million for the three months ended March 31, 2020 , an increase of $3.8 million or 4% compared to the same period in 2019 .

Direct operating costs in the EFT Processing Segment consist primarily of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, payment schemes processing fees, data center operations-related personnel, as well as the processing centers’ facility-related costs and other processing center-related expenses and commissions paid to retail merchants, banks and card processors involved with POS DCC transactions.

The increase in direct operating costs was primarily due to the increase in the number of ATMs under management.

Foreign currency movements decreased direct operating costs for the three months ended March 31, 2020 by approximately $2.7 million compared to the same period in 2019 .

Gross profit, which is calculated as revenues less direct operating costs, was $58.3 million for the three months ended March 31, 2020 and $61.9 million for the three months ended March 31, 2019 .

The decrease in gross profit was primarily due to increases in direct operating costs related to an increase in ATM's under management.

Gross profit as a percentage of revenues (“gross margin”) decreased to 40.0% for the three months ended March 31, 2020 , compared to 42.5% for the same period in 2019 .

EFT Processing Segment direct operating costs were $62.5 million and $150.0 million for the three and six months ended June 30, 2020 , respectively, a decrease of $43.1 million or 41% and $39.3 million or 21 % compared to the same periods in 2019 , respectively.

Direct operating costs in the EFT Processing Segment consist primarily of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, payment scheme processing fees, data center operations-related personnel, as well as the processing centers’ facility-related costs and other processing center-related expenses and commissions paid to retail merchants, banks and card processors involved with POS DCC transactions.

The decrease in direct operating costs was primarily due to the decrease in the number of ATMs under management, renegotiated and reduced site rental fees, and reduced operating costs for ATM's winterized during COVID-19 imposed restrictions.

Foreign currency movements decreased direct operating costs for the three and six months ended June 30, 2020 by approximately $3.4 million and $6.1 million, respectively compared to the same period in 2019 .

Gross profit, which is calculated as revenues less direct operating costs, was $16.0 million and $74.3 million for the three and six months ended June 30, 2020 , respectively, compared to $126.4 million and $188.3 million for the three and six months ended June 30, 2019 , respectively.

The decrease in gross profit was primarily due to the decrease in DCC transactions.

Gross profit as a percentage of revenues (“gross margin”) was 20.4% and 33.1% for the three and six months ended June 30, 2020 , respectively, compared to 54.5% and 49.9% for the three and six months ended June 30, 2019 , respectively .

The decrease in gross margin was attributable to the decrease in DCC transactions and domestic and international surcharge.

Salaries and benefits

Salaries and benefits expense increased $2.7 million or 14% for the three months ended March 31, 2020 , compared to the same period in 2019 .

The increase was primarily due to additional headcount to support an increase in the number of ATMs and POS devices under management.

The shelter-in-place orders that went into place in late February 2020 and March 2020 in response to the COVID-19 pandemic reduced transaction volumes and revenues during that time period, but human resources to support actual and planned growth were added throughout 2019 as well as the early part of the first quarter of 2020 before the COVID-19 pandemic took effect, which led to lower transactions and revenues in the quarter, especially high-margin cross-border transactions.

As a percentage of revenues, these costs increased to 15.1% for the three months ended March 31, 2020 , compared to 13.3% for the same period in 2019 .

Salaries and benefits expense were flat for the three months ended June 30, 2020 and increased $2.6 million or 6% for the six months ended June 30, 2020 compared to the same periods in 2019 , respectively .

The increase for the six months ended June 30, 2020 was primarily due to additional headcount to support an increase in the number of POS devices under management.

The shelter-in-place orders that took effect in late February 2020 and March 2020 in response to the COVID-19 pandemic reduced transaction volumes and revenues through the end of the second quarter of 2020, but human resources to support actual and planned growth were added throughout 2019 as well as the early part of the first quarter of 2020 before the COVID-19 pandemic took effect, which led to lower transactions and revenues in the quarter, especially high-margin cross-border transactions.

As a percentage of revenues, these costs increased to 27.1% and 19.3% for the three and six months ended June 30, 2020 , respectively, compared to 9.2% and 10.8% and for the three and six months ended June 30, 2019 , respectively.

The Company made a decision to retain it's employees during the pandemic.

Selling, general and administrative

Selling, general and administrative expenses increased $1.9 million or 20% for the three months ended March 31, 2020 , compared to the same period in 2019.

The increase was primarily due to increases in professional fees.

As a percentage of revenues, selling, general and administrative expenses increased to 7.5% for the three months ended March 31, 2020 , compared to 6.2% for the same period in 2019 .

Selling, general and administrative expenses for the three and six months ended June 30, 2020 were $9.5 million and $20.5 million , respectively, a decrease of $1.2 million and an increase of $0.6 million compared to the three and six months ended June 30, 2019, respectively.

The decrease for the three months ended June 30, 2020 compared to the same period in 2019 was primarily due to a decrease in travel related expenses, partially offset by an increase in bad debt expense.

The increase for the six months ended June 30, 2020 compared to the same period in 2019 was primarily due to an increase in bad debt expense.

As a percentage of revenues, selling, general and administrative expenses were 12.1% and 9.1% for the three and six months ended June 30, 2020 , respectively, compared to 4.6% and 5.3% for the three and six months ended June 30, 2019 , respectively.

Goodwill impairment

Due to the economic impacts of the COVID-19 pandemic, the Company recorded a $21.9 million non-cash goodwill impairment charge related to two reporting units during the second quarter of 2020.

A $14.0 million non-cash goodwill impairment charge was recorded for Innova as a result of the decline in VAT refund activity directly related to the decline in international tourism within the European Union, and a $7.9 million non-cash goodwill impairment charge was recorded for Pure Commerce related to the decline in international tourism in Asia Pacific.

Depreciation and amortization

Depreciation and amortization expense increased $3.7 million or 22% for the three months ended March 31, 2020 , compared to the same period in 2019 .

Depreciation and amortization expense increased $2.2 million and $5.8 million for the three and six months ended June 30, 2020 , respectively, compared to the same periods in 2019 , respectively.

The increase was primarily due to the deployment of additional ATMs and software assets.

As a percentage of revenues, depreciation and amortization expenses increased to 13.9% for the three months ended March 31, 2020 , compared to 11.4% for the same period in 2019 .

Operating income

EFT Processing Segment operating income for the three months ended March 31, 2020 was $4.9 million , a decrease of $11.8 million or 71% compared to the same period in 2019 .

Operating income as a percentage of revenues (“operating margin”) decreased to 3.4% for the three months ended March 31, 2020 from 11.5% for the same period in 2019 .

The decreases in operating income and operating margin were primarily due to an increase in direct operating costs to support the additional ATMs under management and a change in product mix.

During late February 2020 and throughout March 2020, high margin cross-border transactions (DCC) decreased throughout Europe due to the COVID-19 pandemic driven government imposed border closures and shelter-in-place orders.

Operating income per transaction decreased to $0.01 for the three months ended March 31, 2020 compared to $0.02 for the same period in 2019 .

The following table presents the results of operations for the three months ended March 31, 2020 and 2019 for our epay Segment:

As a percentage of revenues, depreciation and amortization expense was 25.4% and 17.9% for three and six months ended June 30, 2020 , respectively, compared to 7.7% and 9.1% for the same periods of 2019 , respectively.

Operating (loss) income

EFT Processing Segment operating loss for the three and six months ended June 30, 2020 was $56.6 million and $51.6 million , respectively, a decrease of $133.1 million or 174% and $144.9 million or 155 % compared to the operating income in the same periods in 2019 , respectively .

O perating loss as a percentage of revenues (“operating margin”) was 72.1% and 23.0% for three and six months ended June 30, 2020, respectively, compared to operating income of 33.0% and 24.7% for the same periods of 2019 .

The decreases in operating income and operating margin were primarily due to the non-cash goodwill impairment and decrease in revenues compared to the same periods in 2019.

Beginning in late February 2020 and throughout June 2020, high margin cross-border transactions (DCC) decreased throughout Europe due to the COVID-19 pandemic driven government imposed border closures and shelter-in-place orders.

Operating loss per transaction was $0.08 and $0.04 for the three and six months ended June 30, 2020, respectively, compared to operating income of $0.10 and $0.06 for the same periods of 2019 , respectively.

The following table presents the results of operations for the three and six months ended June 30, 2020 and 2019 for our epay Segment:

Three Months Ended

Year-over-Year Change

Six Months Ended

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

Increase (Decrease) Percent

(Decrease) Percent

Increase (Decrease) Amount

(Decrease) Percent

Total revenues

7 unchanged sentences

Transactions processed (millions)

epay Segment total revenues for the three months ended March 31, 2020 were $172.9 million , a decrease of $3.2 million compared to the same period in 2019 .

The decrease in total revenues was primarily due to the U.S.

dollar strengthening against key foreign currencies, partially offset by an increase in the number of transactions processed driven by continued digital media growth.

Foreign currency movements decreased total revenues by approximately $5.3 million for the three months ended March 31, 2020 , compared to the same period in 2019 .

The epay segment was impacted by the COVID-19 pandemic government imposed shelter-in-place orders, primarily at retail outlets, which was partially offset by increases in digital product offerings in Asia.

Overall, revenues decreased in March 2020 compared to March 2019 due to consumer movement restrictions and temporary retail outlet closures as a result of the COVID-19 pandemic.

Revenues per transaction decreased to $0.39 for the three months ended March 31, 2020 compared to $0.52 for the same period in 2019 .

epay Segment total revenues for the three and six months ended June 30, 2020 were $187.6 million and $360.5 million , respectively, an increase of $3.4 million and $0.2 million compared to the same periods in 2019 , respectively .

The increase in total revenues was primarily due to an increase in the number of transactions processed driven by continued digital media growth, partially offset by the U.S.

dollar strengthening against key foreign currencies.

Foreign currency movements decreased total revenues by approximately $6.7 million and $12.0 million for the three and six months ended June 30, 2020, respectively compared to the same periods in 2019 .

The epay segment was impacted by COVID-19 pandemic-driven government-imposed shelter-in-place orders, primarily at retail outlets, which were partially offset by increases in digital media offerings in Asia.

Revenues per transaction were $0.32 and $0.35 for the three and six months ended June 30, 2020, respectively compared to $0.50 and $0.51 for the same periods in 2019 , respectively .

The decrease in revenues per transaction was primarily driven by the increase in the number of mobile transactions processed in a region where we generally earn lower revenues per transaction.

Direct operating costs

epay Segment direct operating costs were $130.1 million for the three months ended March 31, 2020 , a decrease of $3.5 million compared to the same period in 2019 .

Direct operating costs in our epay Segment include the commissions paid to retail merchants for the distribution and sale of prepaid mobile airtime and other prepaid products, expenses incurred to operate POS terminals and the cost of vouchers sold and physical gifts fulfilled.

The decrease in direct operating costs was primarily due to the U.S.

epay Segment direct operating costs were $144.1 million and $274.1 million for the three and six months ended June 30, 2020 , respectively, an increase of $3.6 million and $0.2 million compared to the same periods in 2019 , respectively .

Direct operating costs in the epay Segment include the commissions paid to retail merchants for the distribution and sale of prepaid mobile airtime and other prepaid products, expenses incurred to operate POS terminals and the cost of vouchers sold and physical gifts fulfilled.

The increase in direct operating costs was primarily due to the increases in promotional digital media transactions fulfilled by our cadooz subsidiary and commission paid to wholesalers, partially offset by the U.S.

dollar strengthening against key foreign currencies.

Foreign currency movements decreased direct operating costs for the three months ended March 31, 2020 by approximately $3.9 million compared to the same period in 2019 .

Gross profit was $42.8 million for the three months ended March 31, 2020 compared to $42.6 million for the three months ended March 31, 2019 .

Gross margin increased to 24.8% for the three months ended March 31, 2020 , compared to 24.2% for the same period in 2019 due to overall growth of the business.

Foreign currency movements decreased direct operating costs for the three and six months ended June 30, 2020 by approximately $ 5.1 million and $ 9.0 million compared to the same period in 2019, respectively .

Gross profit was $43.5 million and $86.3 million for the three and six months ended June 30, 2020 , respectively, compared to $43.7 million and $86.3 million for the three and six months ended June 30, 2019 , respectively.

Gross margin decreased to 23.2% for the three months ended June 30, 2020 compared to 23.7% for the same period in 2019, and was 24 .0% for both the six months ended June 30, 2020 and 2019.

Salaries and benefits

Salaries and benefits increased $0.9 million or 6% for the three months ended March 31, 2020 , compared to the same period in 2019 to support continued growth of the business.

As a percentage of revenues, salaries and benefits increased to 9.1% for the three months ended March 31, 2020 , compared to 8.4% for the same period in 2019 .

Salaries and benefits expense increased $0.2 million or 1 % and $1.1 million or 4 % for the three and six months ended June 30, 2020 , respectively, compared to the same periods in 2019 , respectively.

As a percentage of revenues, salaries and benefits were 8.1% and 8.6% for the three and six months ended June 30, 2020, respectively, which were consistent with 8.1% and 8.3% for the same periods in 2019, respectively.

Selling, general and administrative

Selling, general and administrative expenses were $8.8 million for the three months ended March 31, 2020 , an increase of $0.8 million or 10% compared to the same period in 2019 .

As a percentage of revenues, selling, general and administrative expenses increased to 5.1% for the three months ended March 31, 2020 , compared to 4.6% for the same period in 2019 .

Selling, general and administrative expenses were $8.6 million and $17.5 million for the three and six months ended June 30, 2020 , respectively, an increase of 8% and flat compared to the same periods in 2019 , respectively.

As a percentage of revenues, selling, general and administrative expenses were 4.6% and 4.8% for the three and six months ended June 30, 2020 , respectively, compared to 5.1% and 4.9% for the same periods in 2019 , respectively.

Depreciation and amortization

Depreciation and amortization expense primarily represents depreciation of POS terminals we install in retail stores and amortization of acquired intangible assets.

Depreciation and amortization expenses increased $0.1 million or 3% for the three months ended March 31, 2020 , compared to the same period in 2019 .

As a percentage of revenues, depreciation and amortization expense increased to 1.1% for the three months ended March 31, 2020 compared to 1.0% for the same period in 2019 .

Depreciation and amortization expense was $1.7 million and $3.5 million for the three and six months ended June 30, 2020 , respectively, a decrease of 6 % and 1 % compared to the same periods in 2019 , respectively.

As a percentage of revenues, depreciation and amortization expense was 0 .9% and 1.0% for the three and six months ended June 30, 2020 , respectively, compared to 1.0% for both the three and six months ended June 30, 2019.

Operating income

epay Segment operating income for the three months ended March 31, 2020 was $16.5 million , a decrease of $1.5 million or 9% compared to the same period in 2019 .

Operating margin decreased to 9.5% for the three months ended March 31, 2020 from 10.2% for the same period in 2019 .

Operating income per transaction decreased to $0.04 for the three months ended March 31, 2020 compared to $0.05 in the same period in 2019.

The decreases in operating income and operating margin were primarily due to the U.S.

dollar strengthening against key foreign currencies, an increase in headcount to support the growth of the business, and decreased revenue growth in certain markets that were negatively impacted by the COVID-19 pandemic.

Foreign currency movements decreased operating income for the three months ended March 31, 2020 by approximately $0.4 million compared to the same period in 2019 .

epay Segment operating income for the three and six months ended June 30, 2020 was $18.0 million and $34.5 million , respectively, an increase of $0.5 million and a decrease of $1.1 million compared to the same periods in 2019 , respectively .

Operating margin for both the three and six months ended June 30, 2020 was 9.6% , compared to 9.5% and 9.9% for the same periods in 2019 , respectively .

Operating income per transaction decreased to $0.03 for both the three and six months ended June 30, 2020 , respectively, from $0.05 for the same periods in 2019 driven by transactions processed in a region where we generally earn lower revenues per transaction.

The increases in operating income and operating margin for the three months ended June 30, 2020 compared to the same period in 2019 was primarily due to an increase in the portion of higher-margin digital media transactions, partially offset by the U.S.

dollar strengthening against key foreign currencies.

The decreases in operating income and operating margin for the six months ended June 30, 2020 compared to the same period in 2019 was primarily due to the U.S.

dollar strengthening against key foreign currencies.

MONEY TRANSFER SEGMENT

The following table presents the results of operations for the three months ended March 31, 2020 and 2019 for the Money Transfer Segment:

The following table presents the results of operations for the three and six months ended June 30, 2020 and 2019 for the Money Transfer Segment:

Three Months Ended

Year-over-Year Change

Six Months Ended

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

Increase (Decrease) Percent

(Decrease) Percent

Increase (Decrease) Amount

(Decrease) Percent

Total revenues

3 unchanged sentences

Selling, general and administrative

Goodwill impairment

Depreciation and amortization

Total operating expenses

Operating income

Operating (loss) income

Transactions processed (millions)

Money Transfer Segment total revenues for the three months ended March 31, 2020 were $266.2 million , an increase of $9.7 million or 4% compared to the same period in 2019 .

The increase in revenues was primarily due to increases in the number of international money transfers processed, driven by growth in our U.S.

and foreign agent and correspondent payout networks, and growth in xe, driven by recent currency volatility.

Revenues per transaction increased to $9.72 for the three months ended March 31, 2020 compared to $9.65 for the same period in 2019 .

The overall growth rate in revenues was negatively impacted by the COVID-19 pandemic due to the temporary closure of Company owned stores and retail agents due to government imposed shelter-in-place orders.

Revenues decreased for the month of March 2020 compared to March 2019.

Foreign currency movements decreased total revenues by approximately $4.5 million for the three months ended March 31, 2020 compared to the same period in 2019 .

Money Transfer Segment total revenues for the three and six months ended June 30, 2020 were $262.9 million and $529.1 million , respectively, a decrease of $13.9 million or 5 % and $4.3 million or 1% compared to the same periods in 2019 , respectively.

The decrease in revenues was primarily due to decreases in the number of international money transfers processed in March, April and May 2020 compared to the same periods in 2019 as a result of the COVID-19 pandemic related temporary store closures.

Revenues per transaction increased to $10.19 and $9.95 for the three and six months ended June 30, 2020 , respectively, from $9.58 and $9.61 for the same periods in 2019, respectively .

Foreign currency movements decreased total revenues by approximately $ 3.8 million and $ 8.3 million for the three and six months ended June 30, 2020 compared to the same period in 2019 .

Direct operating costs

Money Transfer Segment direct operating costs were $142.9 million for the three months ended March 31, 2020 , an increase of $5.5 million or 4% compared to the same period in 2019 .

Money Transfer Segment direct operating costs were $144.6 million and $287.5 million for the three and six months ended June 30, 2020 , respectively, a decrease of $4.2 million or 3 % and an increase of $1.3 million or flat compared to the same periods in 2019 , respectively.

Direct operating costs in the Money Transfer Segment primarily consist of commissions paid to agents who originate money transfers on our behalf and correspondent agents who disburse funds to the customers’ destination beneficiaries, together with less significant costs, such as bank depository fees.

The increase in direct operating costs was primarily due to growth in the number of money transfer transactions processed in both the U.S.

The decrease in direct operating costs for the three months ended June 30, 2020 was primarily due the decrease in the number of money transfer transactions processed in both the U.S.

and foreign markets, partially offset by the impact of the U.S.

dollar strengthening against key foreign currencies.

Foreign currency movements decreased direct operating costs for the three months ended March 31, 2020 by approximately $1.9 million compared to the same period in 2019 .

Gross profit was $123.3 million for the three months ended March 31, 2020 compared to $119.2 million for the three months ended March 31, 2019 .

The increase in gross profit was primarily due to growth in the number of money transfer transactions processed in both the U.S.

Foreign currency movements decreased direct operating costs for the three and six months ended June 30, 2020 by approximately $ 1.8 million and $ 3.6 million compared to the same period in 2019 .

Gross profit was $118.3 million and $241.6 million for the three and six months ended June 30, 2020 , respectively, compared to $127.9 million and $247.1 million for the three and six months ended June 30, 2019 , respectively .

The decrease in gross profit was primarily due to the decrease in number of money transfer transactions processed in both the U.S.

and foreign markets.

Gross margins of 46.3% for the three months ended March 31, 2020 were essentially flat compared to 46.4% for the same period in 2019 .

Gross margin decreased to 45.0% and 45.7% for the three and six months ended June 30, 2020, respectively, compared to 46.2% and 46.3% for the same periods in 2019, respectively.

Salaries and benefits

Salaries and benefits expense increased $2.7 million or 5% for the three months ended March 31, 2020 , compared to the same period in 2019 .

The increase in salaries and benefits was primarily due to the expansion of our operations.

As a percentage of revenues, salaries and benefits increased to 20.2% for the three months ended March 31, 2020 , compared to 19.9% for the same period in 2019 .

The increase in salaries and benefits was the result of headcount increases in place to support the growth of the business in advance of the COVID-19 pandemic.

Salaries and benefits expense decreased $3.7 million or 7% and $0.9 million or 1% for the three and six months ended June 30, 2020 , respectively, compared to the same periods in 2019 .

As a percentage of revenues, salaries and benefits were 18.7% and 19.5% for the three and six months ended June 30, 2020 , respectively, compared to 19.0% and 19.5% for the same periods in 2019 .

The decrease in salaries and benefits was primarily driven by a decrease in bonus expense for the three and six months ended June 30, 2020 compared to the same periods in 2019.

Selling, general and administrative

Selling, general and administrative expenses for the three months ended March 31, 2020 were $38.6 million , an increase of $9.5 million or 33% compared to the same period in 2019 .

Selling, general and administrative expenses were $33.2 million and $71.8 million for the three and six months ended June 30, 2020 , respectively, an increase of 5% and 18% compared to the same periods in 2019 , respectively.

The increase was primarily due to expenses incurred to support the growth of our money transfer services, the expansion of new products in both the U.S.

and foreign markets, and an increase in additional charges taken to cover anticipated agent receivable defaults as a result of government ordered business closures required to manage the COVID-19 pandemic.

As a percentage of revenues, selling, general and administrative expenses increased to 14.5% for the three months ended March 31, 2020 , compared to 11.3% for the same period in 2019 .

As a percentage of revenues, selling, general and administrative expenses were 12.6% and 13.6% for the three and six months ended June 30, 2020 , respectively, compared to 11.5% and 11 .4% for the same periods in 2019, respectively .

Goodwill impairment

Due to the economic impacts of the COVID-19 pandemic, the Company recorded an $82.7 million non-cash goodwill impairment charge related to the xe reporting unit during the second quarter of 2020.

The non-cash goodwill impairment charge was recorded for xe as a result of declines in the international payments business stemming from economic uncertainty.

Depreciation and amortization

Depreciation and amortization expense increased $0.4 million or 5% for the three months ended March 31, 2020 , compared to the same period in 2019 .

Depreciation and amortization expense increased $0.4 million or 5% and $0.9 million or 5% for the three and six months ended June 30, 2020 , respectively, compared to the same periods in 2019 .

Depreciation and amortization primarily represent amortization of acquired intangible assets and depreciation of money transfer terminals, computers and software, leasehold improvements and office equipment.

As a percentage of revenues, depreciation and amortization expenses were flat at 3.2% for the three months ended March 31, 2020 and 2019 .

Operating income

Money Transfer Segment operating income for the three months ended March 31, 2020 was $22.3 million , a decrease of $8.5 million or 28% compared to the same period in 2019 .

Operating margin decreased to 8.4% for the three months ended March 31, 2020 , compared to 12.0% for the same period in 2019 .

The decreases in operating income and operating margin were primarily due to the increase in selling, general and administrative expenses incurred to support the expansion of new products and markets and COVID-19 pandemic related anticipated agent receivables default charges.

Operating income per transaction decreased to $0.81 for the three months ended March 31, 2020 , compared to $1.16 for the same period in 2019 .

As a percentage of revenues, depreciation and amortization expense was 3.3% and 3.2% for the three and six months ended June 30, 2020, respectively, compared to 2.9% and 3.1% for the same periods of 2019 , respectively.

Operating (loss) income

Money Transfer Segment operating loss for the three and six months ended June 30, 2020 was $55.2 million and $32.9 million , respectively, a decrease of $90.6 million or 256 % and $99.0 million or 150% compared to the operating income in the same periods of 2019 .

As a percentage of revenues, operating loss was 21.0% and 6.2% for the three and six months ended June 30, 2020 , respectively, compared to operating income of 12.8% and 12.4% for the same periods in 2019 , respectively.

The decreases in operating income and operating margin were primarily due to the non-cash goodwill impairment charge, decrease in revenues driven by the decrease in transaction volume, and the increase in selling, general and administrative expenses incurred to support the expansion of new products and markets and COVID-19 pandemic related anticipated agent receivables default charges.

Operating loss per transaction was $2.14 and $0.62 for the three and six months ended June 30, 2020 , respectively, compared to operating income of $1.22 and $1.19 for the same periods in 2019 , respectively.

CORPORATE SERVICES

The following table presents the operating expenses for the three months ended March 31, 2020 and 2019 for Corporate Services:

The following table presents the operating expenses for the three and six months ended June 30, 2020 and 2019 for Corporate Services:

Three Months Ended

Year-over-Year Change

Six Months Ended

Year-over-Year Change

(dollar amounts in thousands)

Increase Amount

Increase Percent

Increase (Decrease) Amount

(Decrease) Percent

Increase (Decrease) Amount

(Decrease) Percent

Salaries and benefits

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Corporate operating expenses

Overall, operating expenses for Corporate Services increased 28% for the three months ended March 31, 2020 compared to the same period in 2019 .

The increase is primarily due to an increase in stock compensation driven by the issuance of a special retention stock incentive award granted to key executives in April of 2019.

These awards vest based on the Company’s achievement of certain long-term performance targets over the next three to four years.

Overall, operating expenses for Corporate Services decreased 35 % and 7% for the three and six months ended June 30, 2020 compared to the same periods in 2019 , respectively.

The decrease is primarily due to the decrease in salaries and benefits driven by the decrease in bonus expense.

OTHER INCOME (EXPENSE), NET

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Year-over-Year Change

Six Months Ended

Year-over-Year Change

(dollar amounts in thousands)

Increase (Decrease) Amount

Increase (Decrease) Percent

(Decrease) Percent

Increase (Decrease) Amount

(Decrease) Percent

Interest income

Interest expense

Foreign currency exchange (loss) gain, net

Foreign currency exchange gain (loss), net

Loss on early extinguishment of debt

Other (loss) gains

Other gains (losses)

Other expense, net

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Interest income

The increase in interest income for the three months ended March 31, 2020 compared to the same period in 2019 is primarily due to an increase in interest rates on cash balances held at banks.

The decrease in interest income for the three and six months ended June 30, 2020 compared to the same periods in 2019 is primarily due to a decrease in interest rates on cash balances held at banks.

Interest expense

The increase in interest expense for the three months ended March 31, 2020 compared to the same period in 2019 was primarily related to the issuance of the Senior Notes partially offset by a decrease in Convertible Notes outstanding in the period.

Foreign currency exchange (loss) gain, net

The decrease in interest expense for the three and six months ended June 30, 2020 compared to the same period in 2019 was primarily related to the decrease in borrowings on the revolving credit agreement during 2020 compared to the same period in 2019.

Foreign currency exchange gain (loss), net

Foreign currency exchange activity includes gains and losses on certain foreign currency exchange derivative contracts and the impact of remeasurement of assets and liabilities denominated in foreign currencies.

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dollar weakens, our corporate entities will record foreign currency exchange gains.

We recorded net foreign currency exchange losses of $18.8 million for the three months ended March 31, 2020 , compared to net foreign currency exchange gains of $3.2 million for the same period in 2019 .

We recorded a net foreign currency exchange gain of $ 2.5 million and a net loss of $ 16.3 million for the three and six months ended June 30, 2020 , respectively compared to a net foreign currency exchange loss of $ 0.1 million and a net gain of $3.1 million for the same periods in 2019 , respectively.

These realized and unrealized foreign currency exchange losses and gains reflect the fluctuation in the value of the U.S.

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INCOME TAX EXPENSE

The Company's effective income tax rate was 58.7% and 31.6% for the three months ended March 31, 2020 and 2019 , respectively.

The Company's effective income tax rate for the three months ended March 31, 2020 was higher than the applicable statutory income tax rate of 21% primarily as a result of certain foreign earnings of the Company being subject to higher local statutory income tax rates.

The Company’s effective income tax rate for the three months ended March 31, 2019 was higher than the applicable statutory income tax rate of 21% largely because of the application to the Company of the global intangible low-taxed income ("GILTI") tax provision and certain foreign earnings of the Company being subject to higher local statutory income tax rates.

The increase in the effective tax rate for the first quarter of 2020 compared to the same period in 2019 was largely the result of the mix of earnings and the rates of tax being applied to those earnings.

The Company's effective income tax rate was (8.4) % and (11.1) % for the three and six months ended June 30, 2020 , respectively, compared to 31.5 % and 31.6 % for the three and six months ended June 30, 2019 , respectively .

The Company's effective income tax rate for the three and six months ended June 30, 2020 was different than the applicable statutory income tax rate of 21 % primarily due to the non-deductible goodwill impairment charge during the second quarter of 2020 and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2020 for net operating losses in those jurisdictions which have a limited history of profitable earnings.

The Company's effective income tax rate for the three and six months ended June 30, 2019 was higher than the applicable statutory income tax rate of 21 % largely because of the application to the Company of the global intangible low-taxed income ("GILTI") tax provision and certain foreign earnings of the Company being subject to higher local statutory income tax rates.

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

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Euronet Infinitium Solutions

NET INCOME ATTRIBUTABLE TO EURONET

Net income attributable to Euronet was $1.9 million and $34.5 million for the three months ended March 31, 2020 and 2019 , respectively.

Net income attributable to Euronet decreased $32.6 million for the three months ended March 31, 2020 compared to the same period in 2019 .

The decrease in net income for the three months ended March 31, 2020 was primarily due to a decrease in operating income of $24.5 million , an increase of $22.0 million in net foreign currency exchange losses, an increase in interest expense of $1.0 million , partially offset by a decrease in income tax expense of $13.5 million, a decrease in loss on early retirement of debt of $0.9 million , an increase in net income attributable to noncontrolling interests of $0.2 million , and an increase in interest income of $0.2 million .

NET (LOSS) INCOME ATTRIBUTABLE TO EURONET

Net loss attributable to Euronet was $115.8 million and $113.9 million for the three and six months ended June 30, 2020 , respectively, a decrease of $184.0 million and $216.6 million compared to the net income in the same periods in 2019, respectively .

The net loss for the three months ended June 30, 2020 compared to the net income for the same period in 2019 was primarily attributable to the $164.1 million decrease in revenues and $104.6 million non-cash goodwill impairment charge, partially offset by an $8.9 million decrease in loss on early retirement of debt, an increase in net foreign currency exchange gains of $2.5 million and a decrease in income tax expense of $22.4 million.

The net loss for the six months ended June 30, 2020 compared to the net income for the same period in 2019 was primarily attributable to the $157.7 million decrease in revenues, $104.6 million non-cash goodwill impairment charge and a $19.4 million increase in net foreign currency exchange losses, partially offset by an $8.9 million decrease in loss on early retirement of debt and a decrease in income tax expense of $35.9 million.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of March 31, 2020 , we had working capital of $1,011.0 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,284.8 million as of December 31, 2019 .

As of June 30, 2020 , we had working capital of $1,114.8 million , which is calculated as the difference between total current assets and total current liabilities, compared to working capital of $1,284.8 million as of December 31, 2019 .

The decrease in working capital is primarily due to $239.8 million of share repurchases during the first quarter of 2020.

Our ratio of current assets to current liabilities was 1.69 and 1.79 at March 31, 2020 and December 31, 2019 , respectively.

Our ratio of current assets to current liabilities was 1.78 and 1.79 at June 30, 2020 and December 31, 2019 , respectively.

We require substantial working capital to finance operations.

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As a result, we may report more or less working capital for the Money Transfer Segment based solely upon the day on which the reporting period ends.

The epay Segment produces positive working capital, but much of it is restricted in connection with the administration of its customer collection and vendor remittance activities.

The epay Segment produces positive working capital, some of which is restricted in connection with the administration of its customer collection and vendor remittance activities.

In our EFT Processing Segment, we obtain a significant portion of the cash required to operate our ATMs through various cash supply arrangements, the amount of which is not recorded on Euronet's Consolidated Balance Sheets.

However, in certain countries, we fund the cash required to operate our ATM network from borrowings under the revolving credit facilities and cash flows from operations.

As of March 31, 2020 , we had approximately $558.6 million of our own cash in use or designated for use in our ATM network, which is recorded in ATM cash on Euronet's Consolidated Balance Sheet.

The Company has $709.5 million of unrestricted cash as of March 31, 2020 compared to $786.1 million as of December 31, 2019.

The decrease in cash primarily due to $239.8 million in share repurchases during the first quarter of 2020, partially offset by cash generated from operations.

Additionally, the Company has $558.6 million of cash in ATMs at March 31, 2020, giving the Company access to $1,268.1 million in available cash, and $950.3 million available under the credit facility with no significant long-term debt principal payments until March 2025.

This liquidity is available to fund operations through the pandemic crisis.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the three month periods ended March 31, 2020 and 2019 (in thousands):

Three Months Ended

As of June 30, 2020 , we had $410.5 million of our own cash in use or designated for use in our ATM network, which is recorded in ATM cash on Euronet's Consolidated Balance Sheet.

ATM cash decreased $255.1 million from $665.6 million as of December 31, 2019 to $410.5 million as of June 30, 2020 as a result of the reduction in number of active ATMs as of June 30, 2020 compared to December 31, 2019.

The Company has $864.9 million of unrestricted cash as of June 30, 2020 compared to $786.1 million as of December 31, 2019.

The increase in cash is primarily due to the transfer of ATM cash to unrestricted cash and cash generated from operations, partially offset by $239.8 million in share repurchases during the first quarter of 2020.

Additionally, the Company has $410.5 million of cash in ATMs at June 30, 2020, giving the Company access to $1,275.4 million in available cash, and $947.9 million available under the credit facility with no significant long-term debt principal payments until March 2025.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the six month periods ended June 30, 2020 and 2019 (in thousands):

Six Months Ended

Cash and cash equivalents and restricted cash provided by (used in):

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Operating activity cash flow

Cash flows provided by operating activities were $105.9 million for the first quarter of 2020 compared to $13.0 million for the first quarter of 2019 .

Cash flows provided by operating activities were $178.6 million for the first half of 2020 compared to $56.7 million for the first half of 2019 .

The increase in operating cash flows was primarily due to fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment, with correspondents in the Money Transfer Segment, and with card organizations and banks in the EFT Processing Segment.

Investing activity cash flow

Cash flows used in investing activities were $31.6 million for the first quarter of 2020 compared to $33.0 million for the same period in 2019 .

We used $30.4 million for purchases of property and equipment for the first quarter of 2020 compared to $31.4 million for the first quarter of 2019 .

Cash used for software development and other investing activities totaled $1.7 million and $1.6 million for the first quarter of 2020 and 2019 , respectively.

Cash flows used in investing activities were $48.6 million for the first half of 2020 compared to $68.8 million for the same period in 2019 .

We used $45.5 million for purchases of property and equipment for the first half of 2020 compared to $67.7 million for the first half of 2019 .

Cash used for software development and other investing activities totaled $3.6 million and $1.0 million for the first half of 2020 and 2019 , respectively.

Financing activity cash flow

Cash flows used in financing activities were $242.6 million for the first quarter of 2020 compared to cash flows provided by financing activities of $192.7 million for the same period in 2019 .

Our financing activities for the first quarter of 2020 consisted of cash outflows of $2.2 million compared to net borrowings of $203.1 million for the first quarter of 2019 .

The decrease in net borrowings for the first quarter of 2020 compared to the same period in 2019 was the result of the issuance of $525.0 million of convertible notes in the first quarter of 2019 which was used to fund the operating cash of our IAD networks, repay revolving credit facility borrowings and repurchase a portion of existing convertible notes.

We repurchased $240.5 million and $2.3 million of our common stock during the first quarter of 2020 and 2019 , respectively.

Of the $240.5 million repurchased shares, $239.8 million of Euronet Common Stock was repurchased under the Repurchase Program.

We received proceeds of $1.7 million and $5.2 million during the first quarter of 2020 and 2019 , respectively, for the issuance of stock in connection with our Stock Incentive Plan.

Cash flows used in financing activities were $241.0 million for the first half of 2020 compared to cash flows provided by financing activities of $505.9 million for the same period in 2019 .

Our borrowing activities for the first half of 2020 consisted of cash outflows of $5.0 million compared to net borrowings of $524.1 million for the first half of 2019 .

The decrease in net borrowings for the first half of 2020 compared to the same period in 2019 was the result of the issuance of $1,194.9 million of convertible notes and Senior Notes in the first half of 2019 which was used to fund the operating cash of our IAD networks, repay revolving credit facility borrowings and repurchase a portion of existing convertible notes.

We repurchased $240.7 million and $2.4 million of our common stock during the first half of 2020 and 2019 , respectively.

Of the $240.7 million repurchased shares, $239.8 million of Euronet Common Stock was repurchased under our repurchase program.

We received proceeds of $5.7 million and $7.0 million during the first half of 2020 and 2019 , respectively, for the issuance of stock in connection with our Stock Incentive Plan.

Other sources of capital

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Dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans.

As of March 31, 2020 , fees and interest on borrowings are based upon the Company's corporate credit rating (as defined in the credit agreement) and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).

As of March 31, 2020 , we had no borrowings and $49.7 million of stand-by letters of credit outstanding under the Credit Facility.

As of June 30, 2020 , fees and interest on borrowings are based upon the Company's corporate credit rating (as defined in the credit agreement) and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).

As of June 30, 2020 , we had no borrowings and $52.1 million of stand-by letters of credit outstanding under the Credit Facility.

The remaining $947.9 million under the Credit Facility was available for borrowing.

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.

Uncommitted Line of Credit - On September 4, 2019, the Company entered into an Uncommitted Loan Agreement with Bank of America which provided Euronet up to $ 100.0 million under an uncommitted line of credit.

Interest on borrowings was equal to LIBOR plus 0.65 % and the agreement was set to expire September 4, 2020.

During the three months ended June 30, 2020, the Company and Bank of America mutually agreed to terminate the Uncommitted Loan Agreement.

Convertible debt - On March 18, 2019, we completed the sale of $525.0 million in principal amount of Convertible Senior Notes due 2049 (“Convertible Notes”).

The Convertible Notes were issued pursuant to an indenture, dated as of March 18,

2019 (the “Indenture”), by and between the Company and U.S.

The Convertible Notes were issued pursuant to an indenture, dated as of March 18, 2019 (the “Indenture”), by and between the Company and U.S.

Bank National Association, as trustee.

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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.

As of June 30, 2020 , the Company has outstanding €600 million ( $673.9 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 debt obligations — Certain of our subsidiaries have available credit lines and overdraft facilities to generally supplement short-term working capital requirements, when necessary.

There were $3.6 million and $6.2 million outstanding under these other obligation arrangements as of March 31, 2020 and December 31, 2019, respectively.

There were $0.9 million and $6.2 million outstanding under these other obligation arrangements as of June 30, 2020 and December 31, 2019, respectively.

Other uses of capital

Capital expenditures and needs - Total capital expenditures for the first quarter of 2020 were $30.4 million .

Capital expenditures and needs - Total capital expenditures for the six months ended June 30, 2020 were $ 45.5 million .

These capital expenditures were primarily for the purchase of ATMs to expand our IAD network in Europe, the purchase and installation of ATMs in key under-penetrated markets, the purchase of POS terminals for the epay and Money Transfer Segments, and office, data center and company store computer equipment and software.

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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 three months ended March 31, 2020 , the Company repurchased 2.1 million shares under the repurchase programs at a weighted average purchase price of $114.41 for a total value of $239.8 million .

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.

For the six months ended June 30, 2020 , the Company repurchased 2.1 million shares under the repurchase programs at a weighted average purchase price of $114.41 for a total value of $239.8 million .

Repurchases under either of the current programs 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.

Inflation and functional currencies

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Our liability under such indemnification provisions may be subject to time and materiality limitations, monetary caps and other conditions and defenses.

As of March 31, 2020 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2019 .

To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of March 31, 2020 .

As of June 30, 2020 , there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2019 .

See also Note 13, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

As of March 31, 2020 , there have been no material changes outside the ordinary course of business in our future contractual obligations from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2019 , other than those resulting from changes in the amount of debt outstanding discussed in the Liquidity and Capital Resources section.

As of June 30, 2020 , there have been no material changes outside the ordinary course of business in our future contractual obligations from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2019 , other than those resulting from changes in the amount of debt outstanding discussed in the Liquidity and Capital Resources section.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis