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Item 8. Financial Statements and Supplementary Data

2021-02-22 compared with 2020-03-02 · 277 added, 334 removed, 943 unchanged (39% of the section changed)

Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

Consolidated Statements of Income

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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(3) Summary of Significant Accounting Policies and Practices

(4) Settlement Assets and Obligations

(5) Stockholders' Equity

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(22) Selected Quarterly Data (Unaudited)

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Euronet Worldwide, Inc.

and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements.) We also have audited the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with U.S.

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As discussed in Note 13 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases .

As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for revenue recognition in 2018 due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers .

Basis for Opinions

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

Index to Consolidated Financial Statements

dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the sufficiency of audit evidence over revenue

Sufficiency of audit evidence over revenue

As discussed in Note 3 to the consolidated financial statements, the Company earned $2.48 billion of revenue in 2020.

The Company earned revenue by payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers (collectively services).

The services were provided to customers in 170 countries through 66 different business offices in 41 countries within 3 different reportable operating segments.

The services were provided to customers in approximately 175 countries through 66 different business offices in 43 countries within 3 different reportable operating segments.

We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter.

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This required especially challenging auditor judgment in the level of audit procedures and supervision applied at each country.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s revenue process, including controls related to the consolidation of global revenue amounts.

We assessed the training and experience of the auditors on our audit team that were located in countries other than the United States.

We tested a sample of individual revenue transactions at certain locations by comparing amounts recognized by the Company to relevant contracts and or payment and transaction support.

After completion of these procedures, we evaluated the overall sufficiency of the audit evidence over revenues.

Assessment of the carrying value of goodwill of one reporting unit in the Money Transfer segment

As discussed in Notes 3 and 9 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis and whenever events and changes in circumstances indicate that it is more likely than not (more than 50%) that the fair value of a reporting unit is less than its carrying amount.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, including the determination of locations at which those procedures were to be performed.

At each Company location selected, we:

evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue process, including controls over the accurate recording of revenue amounts

assessed the training and experience of the auditors on our audit team that were in countries other than the United States

tested a sample of individual revenue transactions by comparing amounts recognized by the Company to relevant contracts and or payment and transaction support.

We evaluated the sufficiency of audit evidence obtained over revenue by assessing the results of procedures performed, including the appropriateness of such evidence.

Goodwill impairment analysis for one reporting unit in the Money Transfer segment

As discussed in Note 3 and 9 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis and whenever events or changes in circumstances indicate that it is more likely than not (more than 50%) that the fair value of a reporting unit is less than its carrying amount.

The goodwill balance as of December 31, 2020 was $665.8 million.

The Company performed a goodwill impairment test for each reporting unit using a qualitative approach, except for one reporting unit in the Money Transfer segment which was tested using the quantitative approach.

We identified the assessment of the carrying value of goodwill for this one reporting unit in the Money Transfer segment using the quantitative approach as a critical audit matter, because significant auditor judgment was required to evaluate the impairment test.

The fair value of that reporting unit was performed using a weighting of a discounted cash flow model and market multiples valuation technique and included key assumptions related to (1) the forecasted revenue growth rates, (2) the forecasted earnings before interest, income taxes, depreciation, and amortization (EBITDA) margin, (3) the discount rate, and (4) the EBITDA market multiple.

Changes to these key assumptions could have a significant effect on the fair value determination and assessment of the carrying value of the goodwill.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s goodwill impairment assessment process, including controls related to the development of the key assumptions.

We evaluated the Company’s forecasted revenue growth rates and forecasted EBITDA margin assumptions by comparing them to external market and industry data.

During the year ended December 31, 2020, the Company recognized an impairment charge of $104.6 million, including a charge of $82.7 million for one reporting unit in the Money Transfer segment.

The fair value of this one reporting unit in the Money Transfer segment was determined using a weighting of a discounted cash flow model and market multiples valuation technique.

We identified the evaluation of the goodwill impairment analysis for this one reporting unit in the Money Transfer segment as a critical audit matter.

Subjective auditor judgment was required in evaluating certain assumptions used to estimate the fair value of the reporting unit, including assumptions related to (1) forecasted revenue growth rates, (2) forecasted operating expense excluding depreciation, amortization, and impairment, (3) discount rate, and (4) earnings before interest, taxes, depreciation, and amortization (EBITDA) market multiple.

Changes to these assumptions could have a significant effect on the fair value determination and assessment of the carrying value of the goodwill.

Specialized skills and knowledge were required in the assessment of the discount rate and EBITDA market multiple.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment assessment process, including controls related to the development of the significant assumptions.

We evaluated the Company’s forecasted revenue growth rates and forecasted operating expense excluding depreciation, amortization and impairment assumptions by comparing them to external market and industry data.

We compared the Company’s historical forecasted results to actual results to assess the Company’s ability to accurately forecast.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating 1) the Company’s discount rate

Index to Consolidated Financial Statements

by comparing it against a discount rate range that was independently developed using publicly available third-party market data for comparable entities and 2) the Company’s EBITDA market multiple, by comparing it against a range of EBITDA multiples to publicly available third-party market data for comparable entities.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating (1) the Company’s discount rate by comparing it against a discount rate range that was independently developed using publicly available third-party market data for comparable entities, and (2) the Company’s EBITDA market multiple, by comparing it against a range of EBITDA multiples developed using publicly available third-party market data for comparable entities.

We have served as the Company's auditor since 2003.

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February 19, 2021

Index to Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

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(in thousands, except share and per share data)

As of December 31,

Current assets:

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Settlement assets

Trade accounts receivable, net

Trade accounts receivable, net of credit loss allowance of $ 5,926 and $ 3,892

Prepaid expenses and other current assets

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Operating right of use lease assets

Property and equipment, net of accumulated depreciation of $410,243 at December 31, 2019 and $373,180 at December 31, 2018

Acquired intangible assets, net of accumulated amortization of $204,853 at December 31, 2019 and $190,920 at December 31, 2018

Other assets, net of accumulated amortization of $46,788 at December 31, 2019 and $50,821 at December 31, 2018

Property and equipment, net of accumulated depreciation of $ 490,429 and $ 410,243

Acquired intangible assets, net of accumulated amortization of $ 175,210 and $ 204,853

Other assets, net of accumulated amortization of $ 55,710 and $ 46,788

LIABILITIES AND EQUITY

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90,000,000 shares authorized;

62,775,762 issued at December 31, 2019 and 59,897,309 issued at December 31, 2018

shares issued 63,366,010 and 62,775,762

Additional paid-in capital

Treasury stock, at cost, 8,554,908 shares at December 31, 2019 and 8,077,311 shares at December 31, 2018

Treasury stock, at cost, shares issued 10,631,961 and 8,554,908

Retained earnings

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See accompanying notes to the Consolidated Financial Statements.

Index to Consolidated Financial Statements

EURONET WORLDWIDE, INC.

AND SUBSIDIARIES

Consolidated Statements of Income

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

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Interest expense

(Loss) Income from unconsolidated affiliates

Foreign currency exchange gain (loss), net

Other (losses) gains, net

Loss from unconsolidated affiliates

Foreign currency exchange (loss) gain, net

Other gains (losses), net

Other expense, net

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Income tax expense

Net loss (income) attributable to noncontrolling interests

Net income attributable to Euronet Worldwide, Inc.

Earnings per share attributable to Euronet Worldwide, Inc.

Net (loss) income

Net (income) loss attributable to noncontrolling interests

Net (loss) income attributable to Euronet Worldwide, Inc.

(Loss) earnings per share attributable to Euronet Worldwide, Inc.

stockholders:

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See accompanying notes to the Consolidated Financial Statements.

Index to Consolidated Financial Statements

EURONET WORLDWIDE, INC.

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Year Ended December 31,

Net (loss) income

Other comprehensive income (loss), net of tax:

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See accompanying notes to the Consolidated Financial Statements.

Index to Consolidated Financial Statements

EURONET WORLDWIDE, INC.

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(in thousands, except share data)

(Common and Treasury)

Balance as of December 31, 2017

Net income (loss)

Other comprehensive loss

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Share-based compensation

Issuance of convertible notes, net of tax

Repurchase of shares

Redemptions and conversions of convertible notes, net of tax

Balance as of December 31, 2019

Net income (loss)

Other comprehensive loss

Net (loss) income

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Issuance of convertible notes, net of tax

Repurchase of shares

Redemptions and conversions of convertible notes, net of tax

Balance as of December 31, 2020

See accompanying notes to the Consolidated Financial Statements.

Index to Consolidated Financial Statements

EURONET WORLDWIDE, INC.

AND SUBSIDIARIES

Consolidated Statements of Changes in Equity (continued)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

(in thousands)

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Balance as of December 31, 2017

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Repurchase of shares

Balance as of December 31, 2017

Net income (loss)

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Balance as of December 31, 2019

Net (loss) income

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Repurchase of shares

Balance as of December 31, 2020

See accompanying notes to the Consolidated Financial Statements.

Index to Consolidated Financial Statements

EURONET WORLDWIDE, INC.

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Year Ended December 31,

Net (loss) income

Adjustments to reconcile net income to net cash provided by operating activities:

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Share-based compensation

Unrealized foreign exchange (gain) loss, net

Unrealized foreign exchange loss (gain), net

Non-cash impairment of goodwill and acquired intangible assets

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Loss on early retirement of debt

Loss (income) from unconsolidated affiliates

Loss from unconsolidated affiliates

Accretion of convertible debt discount and amortization of debt issuance costs

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Repayments of long-term debt obligations

Repayments of finance lease obligations

Net borrowing from short-term debt obligations

Net (repayments) borrowing from short-term debt obligations

Proceeds from long-term debt obligations

Debt issuance costs

Net cash provided by (used in ) financing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash

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(in thousands)

The table below reconciles Cash, Cash and cash equivalents, ATM cash, Restricted cash, Cash and cash equivalents and Restricted cash included within settlement assets.

Cash and cash equivalents

Restricted cash

Settlement cash and cash equivalents

Settlement restricted cash

Cash and cash equivalents and restricted cash at end of period

Year Ended December 31,

Supplemental Cash Flow Disclosures:

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Income taxes paid during the period

Supplemental disclosure of non-cash investing and financing activities:

Non-cash consideration received from sale of investment

See accompanying notes to the Consolidated Financial Statements.

Index to Consolidated Financial Statements

EURONET WORLDWIDE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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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.

Euronet's primary product offerings include comprehensive ATM, POS, card outsourcing, card issuing and merchant acquiring services, electronic distribution of prepaid mobile airtime and other electronic payment products, and international payment services.

(2) Basis of Preparation

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Euronet's investments in companies that it does not control, but has the ability to significantly influence, are accounted for under the equity method.

Euronet is not involved with any variable interest entities.

Euronet has no variable interest entities.

Results from operations related to entities acquired during the periods covered by the Consolidated Financial Statements are reflected from the effective date of acquisition.

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Actual results could differ from those estimates.

Euronet’s EFT Processing Segment experiences its heaviest demand for dynamic currency conversion services during the third quarter of the fiscal year, coinciding with the tourism season.

Additionally, the EFT Processing and epay Segments are 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.

Euronet’s EFT Processing Segment normally experiences its heaviest demand for DCC 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.

Settlement Assets and Obligations

As of December 31, 2019, we have recast our Consolidated Balance Sheets to include three new balance sheet captions entitled Settlement assets, Settlement obligations, and ATM cash.

The historically reported Cash and cash equivalents and Restricted cash are now presented in Cash and cash equivalents, Restricted cash, ATM cash, or part of Settlement assets.

ATM cash represents cash included within the ATM network.

Settlement assets represents funds received or to be received from agents for unsettled money transfers and due from merchants or unsettled prepaid transactions.

Settlement assets consist of cash and cash equivalents, restricted cash, receivables and prepaid expenses and other current assets.

Settlement obligations consist of money transfers, payables to agents and content providers.

Amounts presented in Cash and cash equivalents as recast represents cash available from operations.

Prior year amounts have been recast to conform to current year presentation.

(3) Summary of Significant Accounting Policies and Practices

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Adjustments resulting from translation of such financial statements are reflected in accumulated other comprehensive income (loss) as a separate component of consolidated equity.

Index to Consolidated Financial Statements

Cash equivalents

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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, receivables 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, net from business partners represent funds collected by such business partners, but in transit to the Company.

Euronet has a large and diverse business partner base, thereby reducing the credit risk of the Company from any one business partner.

In addition, the Company performs ongoing credit evaluations of its business partners’ financial condition and credit worthiness.

Inventories represent prepaid cards and prepaid pin numbers that are used to settle amounts due to content providers.

Settlement obligations consist of money transfers, payables to agents and content providers.

Money transfer payables 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 payables represent amounts not yet presented for payment.

Due to the agent funding and settlement process, payables to agents represent amounts due to agents for money transfers that have not been settled with transferees.

(in thousands)

As of December 31, 2019

As of December 31, 2018

Settlement assets:

Settlement cash and cash equivalents

Settlement restricted cash

Account receivables

Prepaid expenses and other current assets

Total settlement assets

Settlement obligations:

Trade account payables

Accrued expenses and other current liabilities

Total settlement obligations

See Note 4 , Settlement Assets and Obligations, to the Consolidated Financial Statements for further discussion on settlement assets and obligations.

Property and equipment

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Over the lesser of the lease term or estimated useful life

Index to Consolidated Financial Statements

Goodwill and other intangible assets

The Company accounts for goodwill and other intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles - Goodwill and Other (“ASC 350”).

ASC 350 requires that the Company test for impairment on an annual basis and whenever events or circumstances dictate.

Goodwill and ot her intangible assets

Goodwill - The Company accounts for goodwill and other intangible assets in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 350, Intangibles - Goodwill and Other ("ASC 350").

In accordance with the requirements of ASC 350 the Company tests for impairment on an annual basis in the fourth quarter and whenever events or circumstances dictate.

Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.

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Under the quantitative impairment test, the evaluation of impairment involves comparing the current fair value of each reporting unit to its carrying value, including goodwill.

The Company uses weighted results from the income approach or the discounted cash flow model ("DCF model") and guideline public company method ("Market Approach model") to estimate the current fair value of its reporting units when testing for impairment, as management believes forecasted cash flows and EBITDA are the best indicator of such fair value.

A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including sales volumes and gross margins, tax rates, capital spending, discount rates and working capital changes.

A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including sales volumes, gross margins, tax rates, capital spending, discount rates and working capital changes.

Most of these assumptions vary significantly among the reporting units.

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If the carrying value of goodwill exceeds its fair value, an impairment loss equal to such excess would be recognized.

The Company completed its annual goodwill impairment test in the fourth quarter of 2019.

It determined, after performing a qualitative review of each reporting unit, that it is more likely than not that the fair value of each of our reporting units exceeds the respective carrying amounts, except for one reporting unit.

Accordingly, there was an indication of impairment, and the quantitative goodwill impairment test was performed.

The quantitative goodwill impairment test showed that there was no indication for impairment for the affected reporting unit.

The DCF Model and Market Approach Model utilize Level 3 inputs in the fair value hierarchy as they include unobservable inputs that require significant management assumptions.

Other Intangible Assets - In accordance with ASC 350, intangible assets with finite lives are amortized over their estimated useful lives.

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Customer relationships

Index to Consolidated Financial Statements

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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An impairment loss is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.

During 2019, the company did not identify an impairment.

During 2018, the Company recorded a non-cash impairment charge of $ 7.0 million related to certain trade names as a result of combining HiFX into xe in order to operate the businesses under one brand name, xe.

During 2017, the Company recorded a non-cash impairment charge of $ 2.3 million related to certain customer relationships as a result of the closure of the Pure Commerce office in South Korea.

See Note 9, Goodwill and Acquired Intangible Assets, Net, to the Consolidated Financial Statements for additional information regarding the impairment of goodwill and other intangible assets.

Other assets include investments in unconsolidated affiliates, capitalized software development costs and capitalized payments for new or renewed contracts, contract renewals and customer conversion costs.

Other assets include capitalized software development costs and capitalized payments for new or renewed contracts, contract renewals and customer conversion costs.

Euronet capitalizes initial payments for new or renewed contracts to the extent recoverable through future operations, contractual minimums and/or penalties in the case of early termination.

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ASC Topic 340, Other Assets and Deferred Costs ("ASC 340") 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.

Deferred contract costs are reported on our balance sheet within current or non-current other assets based on the expected life of the related contract.

At December 31, 2019 and 2018 , we had $ 43.7 million , and $ 32.1 million , respectively, of deferred contract costs related to the fulfillment of future contract obligations.

D eferred contract costs are reported on our balance sheet within current or non-current other assets based on the expected life of the related contract.

At December 31, 2020 and 2019, we had $ 143.5 million and $ 43.7 million, respectively, of deferred contract costs.

For the years ended December 31, 2020 , 2019 and 2018, we had $ 17.2 million, $ 6.9 million and $ 6.3 million of amortization related to these costs, respectively.

The Company accounts for investments in affiliates using the equity method of accounting when it has the ability to exercise significant influence over the affiliate, but does not have a controlling interest.

Equity losses in affiliates are generally recognized until the Company's investment is zero.

As of December 31, 2019 and 2018, the Company had no material investments in unconsolidated affiliates.

Convertible notes

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Further, the Company applies ASC 470-20-35-13, which requires the debt discount to be amortized over the period the convertible debt is expected to be outstanding as additional non-cash interest expense.

Noncontrolling interests

The Company accounts for noncontrolling interests in its consolidated financial statements according to ASC Topic 810, Consolidations (“ASC 810”), which requires noncontrolling interests to be reported as a component of equity.

Business combinations

The Company accounts for business combinations in accordance with ASC Topic 805, Business Combinations (“ASC 805”), which requires most identifiable assets, liabilities, noncontrolling interests and goodwill acquired in a business combination to be recorded at “full fair value” at the acquisition date.

Transaction-related costs are expensed in the period incurred.

Income taxes are accounted for under the asset and liability method.

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The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Index to Consolidated Financial Statements

In accordance with ASC Topic 740, Income Taxes ("ASC 740"), the Company's policy is to record estimated interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income.

See Note 13, Taxes, to the Consolidated Financial Statements for further discussion regarding these provisions.

See Note 14, Income Taxes, to the Consolidated Financial Statements for further discussion regarding these provisions.

Presentation of taxes collected and remitted to governmental authorities

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The amount of future compensation expense related to awards of nonvested shares or nonvested share units ("restricted stock") is based on the market price for Euronet Common Stock at the grant date.

The grant date is the date at which all key terms and conditions of the grant have been determined and the Company becomes contingently obligated to transfer equity to the employee who renders the requisite service, generally the date at which grants are approved by the Company's Board of Directors or Compensation Committee thereof.

The grant dat e is the date at which all key terms and conditions of the grant have been determined and the Company becomes contingently obligated to transfer equity to the employee who renders the requisite service, generally the date at which grants are approved by the Company's Board of Directors or Compensation Committee thereof.

Share-based compensation expense for awards with only service conditions is generally recognized as expense on a "straight-line" basis over the requisite service period.

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See Note 16, Stock Plans, for further disclosure.

Revenue recognition

The Company recognizes revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Revenue recogni tion

Sales and usage-based taxes are excluded from revenues.

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EFT Processing - Revenues in the EFT Processing Segment are primarily derived from transaction and management fees and foreign currency exchange margin from owned and outsourced ATM, POS and card processing networks and from the sale of EFT software solutions for electronic payment and transaction delivery systems, and fees or margin earned from value added services, including dynamic currency conversion and domestic and international surcharge.

Index to Consolidated Financial Statements

Transaction-based fees include charges for cash withdrawals, debit or credit card transactions, balance inquiries, transactions not completed because the relevant card issuer does not give authorization and prepaid mobile airtime recharges.

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The Company recognizes revenue under these contracts based on proportional performance of services over the term of the contract.

This generally results in “straight-line” (i.e., consistent value per period) revenue recognition of the contracts' total cash flows, including any up-front payment received from the customer.

epay - Revenue generated in the epay Segment is primarily derived from commissions or processing fees associated with distribution and/or processing of prepaid mobile airtime and digital media products.

This generally results in "straight-line" (i.e., consistent value per period) revenue recognition of the contracts' total cash flows, including any up-front payment received from the customer, which is recorded as deferred revenue upon receipt.

epay - Revenue generated in the epay Segment is primarily derived from commis sions or processing fees associated with distribution and/or processing of prepaid mobile airtime and digital media products.

These fees and commissions are received from mobile operators, content vendors or distributors or from retailers.

In accordance with ASC 606, commissions are recognized as revenue during the period in which the Company provides the service.

Commissions are recognized as revenue during the period in which the Company provides the service.

The portion of the commission that is paid to retailers is generally recorded as a direct operating cost.

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Transaction processing fees are recognized at the time the transactions are processed.

Money Transfer - In accordance with ASC 606, revenues for money transfer and other services represent a transaction fee in addition to a margin earned from purchasing currency at wholesale exchange rates and selling the currency to customers at retail exchange rates.

Money Transfer - R evenues for money transfer and other services represent a transaction fee in addition to a margin earned from purchasing currency at wholesale exchange rates and selling the currency to customers at retail exchange rates.

Revenues and the associated direct operating cost are recognized at the time the transaction is processed.

The Company has origination and distribution agents in place, which each earn a fee for the respective service.

The Company has origination and distribution agents in place, which ea ch earn a fee for the respective service.

These fees are reflected as direct operating costs.

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”)

2014-09, “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”), and subsequently modified the standard with

several ASUs.

The Company adopted the standard on January 1, 2018 using the modified retrospective method applied to those

contracts which were not completed as of January 1, 2018.

Results for reporting periods beginning after January 1, 2018 are

presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic

accounting under Topic 605.

The Company completed its review of customer contracts relative to the requirements of Topic 606 and concluded that revenues from certain customer contracts in the epay Segment should be recorded differently under the principal versus agent guidance of Topic 606.

With respect to those contracts, the Company concluded that it earns a commission from content providers for distributing and processing their prepaid mobile airtime and other electronic payment products, but it is not the principal for the products themselves.

As a result, the impact of the change in accounting principle was a reduction of $ 88.5 million in both revenues and direct operating expenses for the year ended December 31, 2018, with no impact on reported net income.

Deferred Revenues - The Company records deferred revenues when cash payments are received or due in advance of its performance.

The decrease in the deferred revenue balance for the year ended December 31, 2019 is primarily driven by $ 41.4 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2018, largely offset by $ 40.7 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations.

The increase in the deferred revenue balance for the year ended December 31, 2020 is primarily driven by $ 56.4 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, partially offset by $ 41.6 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2019.

Disaggregation of Revenues - The following table presents the Company's revenues disaggregated by segment and region.

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The disaggregation of revenues by segment and region is based on management's assessment of segment performance together with allocation of financial resources, both capital and operating support costs, on a segment and regional level.

Both segments and regions benefit from synergies achieved through concentration of operations and are influenced by macro-economic, regulatory and political factors in the respective segment

Index to Consolidated Financial Statements

Both segments and regions benefit from synergies achieved through concentration of operations and are influenced by macro-economic, regulatory and political factors in the respective segment and region.

The Company recognizes foreign exchange revenues from derivative instruments in its xe operations in accordance with ASC Topic 815 and not ASC Topic 606.

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(in thousands)

EFT Processing

Money Transfer

North America

1 unchanged sentence

(in thousands)

EFT Processing

Money Transfer

North America

(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.

For the Year Ended December 31, 2018

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North America

(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Recently issued accounting pronouncements

The Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), as amended, as of January 1, 2019, using the modified retrospective approach and comparative periods were not restated.

The new standard provides a number of optional practical expedients in transition.

The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs.

The Company also elected to combine lease and non-lease components and to include short term leases with an initial term of 12 months or less on the Consolidated Balance Sheets.

In addition, the Company elected the hindsight practical expedient to determine the lease term for existing leases.

The election of the hindsight practical expedient resulted in, for substantially all leases in effect on January 1, 2019, the lease term for implementation of this pronouncement, as the period from January 1, 2019 through the lease’s contractual termination date, rather than the actual lease life as set out in the lease agreement.

Lease lives for lease agreements committed to on January 1, 2019 and, thereafter, are included based on the lease’s commencement date and termination date.

In the application of hindsight, the Company evaluated the performance of all the leases and the associated markets in relation to the Company’s operations, which resulted in the determination that the exercise of renewal options would not be reasonably certain in determining the expected lease term.

Index to Consolidated Financial Statements

Adoption of the new standard resulted in the recognition of additional operating right of use lease assets and lease liabilities of approximately $ 269.9 million , as of January 1, 2019.

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13,Financial Instruments - Credit Losses (Topic 326), 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 replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

In August 2020, the FASB issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" which simplifies the accounting for convertible instruments by eliminating certain accounting models when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital.

Under this ASU, certain debt instruments with embedded conversion features will be accounted for as a single liability measured at its amortized cost.

Additionally, this ASU eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments.

The new guidance is effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on the Consolidated Financial Statements.

In March 2020, the 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.

(4) 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 ca sh equivalents, restricted cash, accounts receivable and prepaid expenses and other current assets.

Cash received by Euronet agents and merchants generally becomes available to the Company within two weeks after initial receipt by the business partner.

Receivables from business partners represen t 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 and 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.

(in thousands)

As of December 31, 2020

As of December 31, 2019

Settlement assets:

Settlement cash and cash equivalents

Settlement restricted cash

Account receivables, net of credit loss allowance of $ 35,800 and $ 24,046

Prepaid expenses and other current assets

Total settlement assets

Settlement obligations:

Trade account payables

Accrued expenses and other current liabilities

Total settlement obligations

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.

(in thousands)

Cash and cash equivalents

Restricted cash

Settlement cash and cash equivalents

Settlement restricted cash

Cash and cash equivalents and restricted cash at end of period

(5) Stockholders' Equity

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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 years ended December 31, 2020, 2019 and 2018 of approximately 2,073,000 , 380,000 and 458,000 , 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 issued 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.

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The dilutive effect increases the more the market price exceeds the conversion price.

The Retired Convertible Notes had a dilutive effect for the years ended December 31, 2018 and 2017 as the $ 102.38 and $ 84.27 market price per share of Common Stock as of December 31, 2018 and 2017 exceeded the $ 72.18 conversion price per share.

The Retired Convertible Notes had a dilutive effect for the year ended December 31, 2018 as the $ 102.38 market price per share of Common Stock as of December 13, 2018 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.

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 December 31, 2019 , whereas the dilutive effect was 1,640,477 and 799,680 shares for the years ended December 31, 2018 and 2017 , respectively.

See Note 10, Debt Obligations, to the Consolidated Financial Statements for more information about the convertible notes.

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 December 31, 2020 and December 31, 2019, whereas the dilutive effect was 1,640,477 shares for the year ended December 31, 2018 .

See Note 11, D ebt Obligations, to the Consolidated Financial Statements for more information about the Convertible Notes and Retired Convertible Notes.

Share repurchases

The Company's Board of Directors has authorized a stock repurchase program ("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

Index to Consolidated Financial Statements

$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 five million shares of common stock through February 28, 2022.

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 common 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 share s of common stock through February 28, 2022.

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 year ended December 31, 2019 , the Company repurchased $ 70.9 million in value of Euronet Common Stock under the Repurchase Program.

For the year ended December 31, 2018, the company repurchased $ 175 million in value of Euronet common stock under the Repurchase Program.

No repurchases were made during 2017.

For the years ended December 31, 2020 , 2019 and 2018 the Company repurchased $ 239.8 million, $ 70.9 million, a nd $ 175.0 million , respect ively, in value of Euronet common stock under the repurchase programs.

Preferred Stock

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As of December 31, 2020 and 2019 , accumulated other comprehensive loss consists entirely of foreign currency translation adjustments.

The Company recorded a foreign currency translation loss of $ 13.9 million , a loss of $ 56.7 million and a gain of $ 116.4 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively.

The Company recorded a foreign currency translation gain of $ 70.8 million, a loss of $ 13.9 million and a loss of $ 56.7 million for the years ended December 31, 2020 , 2019, and 2018, respectively.

There were no reclassifications of foreign currency translation into the Consolidated Statements of Income for the years ended December 31, 2020 , 2019, and 2018.

No dividends was paid on any class of the Company's stock during 2019 , 2018 , and 2017 .

No dividends were paid on any class of the Company's stock during 2020, 2019, and 2018.

(6) Acquisitions

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The purchase price was $ 92.5 million in cash.

Approximately $ 10.1 million of the cash consideration was placed in escrow accounts to satisfy indemnification and working capital obligations of the seller, pursuant to the terms of the purchase agreement.

The purchase price was preliminarily allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the date of acquisition.

The purchase price was allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the date of acquisition.

The acquisition has been accounted for as business combinations in accordance with U.S.

GAAP and the results of operations have been included from the date of acquisition in the EFT Processing Segment.

The historical revenue and earnings were not significant for the purpose of presenting pro forma information for the current or prior-year periods.

Index to Consolidated Financial Statements

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date.

The historical revenue and earnings were not significant for the purpose of presenting pro forma information for the pre-acquisition periods.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date.

(in thousands)

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Net assets acquired

The Company acquired customer relationship intangible assets with a preliminary fair value of $ 39.0 million , which are being amortized on a straight-line basis over 20 years.

Goodwill, with a preliminary value of $ 35.5 million , arising from the acquisition was included in the EFT Processing Segment and was attributable to expected growth opportunities in the United States.

The Company acquired customer relationship intangible assets with a fair value of $ 39.0 million, which are being amortized on a straight-line basis over 20 years.

Goodwill, with a value of $ 35.5 m illion, arising from the acquisition was included in the EFT Processing Segment and was attributable to expected growth opportunities in the United States.

Goodwill and intangible assets associated with this acquisition are deductible for tax purposes.

The Company completed three acquisitions for immaterial amounts.

2018 Acquisitions

The Company completed the acquisitions of two small European businesses for an immaterial amount of cash consideration, completing one acquisition in the first quarter of 2018 and completing the other acquisition in the second quarter of 2018.

The acquisitions have been accounted for as business combinations in accordance with U.S.

GAAP and the results of operations have been included from the respective dates of acquisition in the EFT Processing Segment.

The Company completed three additional acquisitions in 2019 for immaterial amounts.

(7) Restricted Cash

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Total Restricted Cash

Index to Consolidated Financial Statements

Cash held in trust and/or cash held on behalf of others is in connection with the administration of the customer collection and vendor remittance activities by certain subsidiaries within the Company's epay and EFT Processing Segments.

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(9) Goodwill and Acquired Intangible Assets, Net

Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the underlying net tangible and intangible assets acquired.

The following table summarizes intangible assets as of December 31, 2020 and 2019:

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(in thousands)

Gross Carrying

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount

Accumulated Amortization

Customer relationships

1 unchanged sentence

Non-compete agreements

Index to Consolidated Financial Statements

The following table summarizes the goodwill and amortizable intangible assets activity for the years ended December 31, 2020 and 2019:

(in thousands)

Acquired Intangible Assets

Total Intangible Assets

Balance as of January 1, 2019

Increases (decreases):

Acquisitions (see footnote 6)

Other (primarily changes in foreign currency exchange rates)

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Balance as of December 31, 2020

The Company performs its annual goodwill impairment test during the fourth quarter of each year.

The annual goodwill impairment test completed during the fourth quarter of 2019 resulted in no impairment charges.

During the fourth quarter of 2018, the Company recorded a $ 7.0 million non-cash impairment charge for acquired intangible assets, specifically the HiFX trade name, related to rebranding the HiFX business to xe.

Impairment Charges

The COVID- 19 pandemic and subsequent mitigation efforts, which include global business shutdowns, the closing of borders and the implementation of mandatory social distancing requirements, has created an unprecedented disruption to our business beginning in the first half of 2020 .

These mitigation efforts coupled with the negative economic impacts to the tourism industry caused a decline in revenues, earnings, and necessitated changes to our forecasted outlook.

The Company determined the totality of these events constituted a triggering event that required us to perform an interim goodwill impairment assessment as of June 1, 2020.

The Company concluded a triggering event had occurred for six reporting units, resulting in quantitative impairment tests.

Three reporting units were within the EFT segment, two reporting units were within the Money Transfer segment, and one reporting unit was within the epay segment.

As a result, the Company recorded a non-cash goodwill impairment charge of $ 104.6 million with respect to the xe, Innova and Pure Commerce reporting units.

$ 21.9 million of th e impairment charge was included within the EFT Segment, and $ 82.7 million o f the i mpairment charge was included in the Money Transfer Segment.

During the second half of 2020, the Company recorde d a $ 2.0 million non-ca sh impairment charge for acquired intangible assets, specifically related to customer lists in the xe reporting unit.

During 2018, the Company recorded a non-cash acquired intangible asset impairment charge of $ 7.0 million related to certain trade names as a result of combining HiFX into xe in order to operate the business under one brand name, xe.

Of the total goodwill balance of $ 665.8 million as of December 31, 2020 , $ 403.7 million relates to the Money Transfer Segment, $ 136.5 million relates to the epay Segment and the remaining $ 125.6 million relates to the EFT Processing Segment.

9 unchanged sentences

Deferred income taxes

Index to Consolidated Financial Statements

(11) Debt Obligations

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Credit Facility:

Revolving credit agreements

Revolving credit agreement

Convertible Debt:

0.75% convertible notes, unsecured, due 2049

1.50% convertible notes, unsecured, due 2044

1.375% Senior Notes, due 2026

5 unchanged sentences

Long-term debt obligations

As of December 31, 2019 , aggregate annual maturities of long-term debt are $ 6.1 million in 2020, $ 0.1 million due in 2021 , no maturities between 2022 and 2024 , and $ 1.2 billion thereafter.

This maturity schedule reflects the revolving credit facility maturing in 2023 the Convertible Notes maturing in 2025, coinciding with the terms of the initial put option by holders of the Convertible Notes.

As of December 31, 2020 , aggregate annual maturities of long-term debt are $ 0.8 million in 2021, $ 0.1 million due in 2022, $ 270.4 million due in 2023, no maturities in 2024, and $ 1.2 billion thereafter.

This maturity schedule reflects the revolving credit facility maturing in 2023 and the Convertible Notes maturing in 2025, coinciding with the terms of the initial put option by holders of the Convertible Notes.

It also reflects the maturing of the 1.375 % Senior Note of € 600 million ($ 732.8 million) due in 2026.

Credit Facility

In the early fourth quarter of 2018, the Company early retired the senior secured revolving bank credit facility (the "Credit Facility") with a syndicate of financial institutions.

The Credit Facility was subsequently replaced by a new unsecured credit agreement for $ 1.0 billion that expires on October 17, 2023 .

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 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.

The revolving credit facility contains a $ 200 million sublimit for the issuance of letters of credit, a $ 50 million sublimit for U.S.

The Credit Facility allows for borrowings in Australian dollars, British pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys, Swedish krona, Swiss francs, and U.S.

The 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 retired Credit Facility provided an aggregate amount of $ 675 million , consisting of a $ 590 million five-year revolving credit facility, a $ 10 million five-year India revolving credit facility and a $ 75 million five-year term loan.

Fees and interest on borrowings varied based upon the Company's consolidated total leverage ratio (as defined in the amended and restated credit agreement) and were based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over LIBOR or a margin over the base rate, as selected by the Company, with the applicable margin ranging from 1.375 % to 2.375 % (or 0.375 % to 1.375 % for base rate loans).

The base rate is the highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus 0.50% or (iii) the Fixed LIBOR rate plus 1.00%.

The term loan was subject to scheduled quarterly amortization payments, as set forth in the amended and restated credit agreement.

As of December 31, 2019 and 2018 , the Company had stand-by letters of credit/bank guarantees outstanding against the revolving credit facilities of $ 53.0 million and $ 47.1 million , respectively.

Stand-by letters of credit/bank guarantees reduce the Company's borrowing capacity under the revolving credit facility and are generally used to secure trade credit and performance obligations.

The weighted average interest rate of the Company's borrowings under the Credit Facility wa s 1.2 % as of December 31, 2020 .

As of December 31, 2020 and 2019, the Company had stand-by letters of credit/bank guarantees outstanding under the Credit Facility of $ 60.8 million and $ 53.0 million, respectively.

Stand-by letters of credit/bank guarantees reduce the Company's borrowing capacity under the Credit Facility and are generally used to secure trade credit and performance obligations.

As of December 31, 2020 and 2019, the stand-by letters of credit interest charges were each 1.1 % per annum, respectively.

Index to Consolidated Financial Statements

The unsecured credit agreement contains customary affirmative and negative covenants, events of default and financial covenants, including:

Borrowing capacity under the Credit Facility as of December 31, 2020 was $ 668.8 million.

The Credit Facility contains customary affirmative and negative covenants, events of default and financial covenants, including:

(i) as of the end of each fiscal quarter ended on March 31, September 30 and December 31, a Consolidated Total Leverage Ratio not to be greater than 3.5 to 1.0;

4 unchanged sentences

Subject to meeting certain leverage ratio and liquidity requirements as contained in the unsecured credit agreement, the Company is permitted to pay dividends, repurchase common stock and repurchase subordinated debt.

On September 17 , 2020, the Company and certain of its subsidiaries entered into an amendment (the "Amendment") to the Credit Facility.

Under the Amendment, the Consolidated Total Leverage Ratio, as defined in the Credit Facility, was modified to reduce the amount of consolidated funded debt by the amount of cash and cash equivalents on the Company's consolidated balance sheet and the Consolidated Interest Coverage Ratio now includes a one-time option to reduce the ratio to 3.5 to 1.0 from 4.0 to 1.0 for a period of up to three consecutive quarters.

The Company was in compliance with all debt covenants as of December 31, 2020.

The Company and certain subsidiaries have guaranteed the repayment of obligations under the credit agreement.

Uncommited Line of Credit

During 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 December 31, 2019 , 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

3 unchanged sentences

In connection with the issuance of the Convertible Notes, the Company recorded $ 12.8 million in debt issuance costs, which are being amortized through March 1, 2025.

The Company may not redeem the Notes prior to September 20, 2022.

The Company may not redeem the Convertible Notes prior to September 20, 2022.

The Company may redeem for cash all or any portion of the Convertible Notes, at its option, (i) on or after September 20, 2022 if the closing sale price of the Company's Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption and (ii) on or after March 20, 2025 and prior to the maturity date, regardless of the foregoing sale price condition, in each case at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

1 unchanged sentence

In addition, if a fundamental change, as defined in the Indenture, occurs prior to the maturity date, holders may require the Company to repurchase for cash all or part of their Convertible Notes 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 fundamental change repurchase date.

As of December 31, 2019 the conversion threshold was not met and the Convertible Notes were not convertible during the first quarter of 2020.

As of December 31, 2020 the conversion threshold was not met.

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.

1 unchanged sentence

The allocation resulted in an increase to additional paid-in capital of $ 99.7 million for the Convertible Notes.

The Company used $ 94.2 million of the net proceeds from the issuance of the new debt to repurchase $ 49 million aggregate principal amount of the Company's 1.5 % Convertible Senior Notes due 2044 (the "Retired Convertible Notes") from a limited number of holders in privately negotiated transactions.

The Company used $ 94.2 million of the net proceeds from the issuance of the Convertible Notes to repurchase $ 49.0 million aggregate principal amount of the Company's 1.5 % Convertible Senior Notes due 2044 (the "Retired Convertible Notes") from a limited number of holders in privately negotiated transactions.

On March 18, 2019, the Company provided a notice of redemption to the trustee of the indenture governing the Retired Convertible Notes (the "Existing Indenture"), 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.

The issuance of the Convertible Notes and the conversion of the Retired Convertible

Index to Consolidated Financial Statements

Notes, resulted in a $ 25.6 million recognition and a $ 34.2 million reversal of deferred tax liabilities within the additional paid-in capital as of December 31, 2019, respectively.

The issuance of the Convertible Notes and the conversion of the Retired Convertible Notes, resulted in a $ 25.6 million recognition and a $ 34.2 million reversal of deferred tax liabilities within the additional paid-in capital as of December 31, 2019, respectively.

Prior to the Redemption Date, approximately $ 352.4 million principal amount of the Retired Convertible Notes were submitted for conversion.

4 unchanged sentences

The Company is using the remainder of the net proceeds from the issuance of the Convertible Notes to finance the further growth of the business.

Contractual interest expense for the Retired Convertible Notes was $ 1.5 million and $ 6.0 million for the year ended December 31, 2019 and 2018, respectively.

Accretion expense was $ 4.6 million for the year ended December 31, 2019 and $ 11.5 million for the year ended December 31, 2018 .

Contractual interest expense for the Convertible Notes was $ 3.1 million for the year ended December 31, 2019.

Accretion expense was $ 11.6 million for the year ended December 31, 2019.

Contractual interest expense for the Retired Convertible Notes $ 1.5 million for the year ended December 31, 2019 and a ccretion expense was $ 4.6 million for the year ended December 31, 2019 .

Contractual interest expense for the Convertible Notes was $ 3.9 million an d $ 3.1 million for the years ended December 31, 2020 and 2019, respectively.

Accretion expense was $ 15.3 million and $ 11.6 million for the years ended December 31, 2020 and 2019, respectively.

The effective interest rate was 4.4 % for the year ended December 31, 2020.

1 unchanged sentence

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”).

On May 22, 2019, the Company completed the sale of € 600 million ($ 669.9 million) aggregate principal amount of Senior Notes that mature 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 December 31, 2019, the Company has outstanding € 600 million ( $ 673.4 million ) principal amount of the Senior Notes.

As of December 31, 2020, the Company has outstanding € 600 millio n ($ 732.8 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.

As of December 31, 2020, the Company had $ 6.6 million of unamortized debt issuance costs related to the Senior Notes.

Other obligations

6 unchanged sentences

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.

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 being 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

1 unchanged sentence

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

Index to Consolidated Financial Statements

executed with counterparties in the U.S.

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;

3 unchanged sentences

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.

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 December 31, 2020 and 2019, the Company had foreign currency forward contracts outstanding with a notional value of $ 454.3 million and $ 42.9 million, respectively, primarily in euros.

13 unchanged sentences

dollar, British pound, Australian dollar and New Zealand dollar.

Index to Consolidated Financial Statements

Balance Sheet Presentation

36 unchanged sentences

Derivatives subject to a master netting arrangement or similar agreement

Index to Consolidated Financial Statements

Income Statement Presentation

The following tables summarize the location and amount of gains on derivatives in the Consolidated Statements of Income for the years ended December 31, 2020 , 2019 and 2018:

Amount of Gain Recognized in Income on Derivative Contracts (a)

Location of Gain (Loss) Recognized in Income on Derivative Contracts

Amount of (Loss) Gain Recognized in Income on Derivative Contracts (a)

Location of (Loss) Gain Recognized in Income on Derivative Contracts

Year Ended December 31,

1 unchanged sentence

Foreign currency exchange contracts - Ria Operations

Foreign currency exchange gain, net

Foreign currency exchange (loss) gain, net

(a) The Company enters into derivative contracts such as foreign currency exchange forwards and cross-currency swaps as part of its xe operations.

1 unchanged sentence

See Note 18, Financial Instruments and Fair Value Measurements, for the determination of the fair values of derivatives.

The Company enters into operating leases for ATM sites, office spaces, retail stores and equipment.

The Company adopted ASC 842, Leases , on January 1, 2019.

The Compan y ent ers into operating leases for ATM sites, office spaces, retail stores and equipment.

The Company's finance leases are immaterial.

1 unchanged sentence

The present value of lease payments is determined using the incremental borrowing rate based on information available at the lease commencement date.

All leases with fixed payments, including leases with an initial term of 12 months or less are recorded on the balance sheet.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

3 unchanged sentences

The Company also has a unilateral termination right for most of the ATM site leases.

Since the Company is not reasonably certain to exercise the renewal or termination options, the options are not considered in determining the lease terms, and associated payment impacts are excluded from lease payments.

The Company evaluated the likelihood of exercising the renewal and termination options beginning with the adoption of the new accounting lease standard on January 1, 2019, concluding:

the options were not reasonably certain to be exercised and thus were not considered in determining the lease terms, and associated payment impacts were excluded from lease payments;

and termination options were reasonably certain not to be exercised and therefore the stated lease payment schedule of the lease was used to determine the lease term.

During the second quarter of 2020, the impact of the COVID-19 pandemic was a significant event that caused a significant change in circumstances and business plans to manage our portfolio of ATM leases.

Specifically the Company downsized, through the exercise of termination clauses and the reduction of monthly costs by renegotiating payment terms of its ATM leases.

The Company's execution of the business plan to renegotiate terms and downsize the portfolio of ATM leases constituted a reassessment event during the second quarter of 2020.

The reassessment event required the Company to reevaluate the accounting for the portfolio of ATM leases, including lease terms.

Due to the recent increased frequency of ATM site lease terminations, modifications, and greater unpredictability whether or not future lease terminations will be exercised, the Company is no longer able to conclude that termination options are reasonably certain not to be exercised.

This reassessment conclusion impacts the lease term evaluation, instead of determining the lease term based on the stated lease payment schedule of the lease, now the lease term will be evaluated when the Company has the contractual ability to terminate the lease (most leases allow for a termination upon advance notice of between 30 and 90 days).

As a result of the lease term reassessment, $ 211.9 million of right of use assets and $ 211.9 mi llion lease liabilities were reassessed to have a term shorter than 12 months, thus were subject to the short-term lease exemption and removed from the balance sheet beginning June 30, 2020 .

New, amended, and modified ATM site leases with termination options exercisable within 12 months will be excluded from th e right of use lease asset and lease liability balances .

Payments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period incurred.

The short-term lease expense fo r 2020 r easonably reflects the Company’s short-term lease commitments.

Certain of the Company's lease agreements include variable rental payments based on revenues generated from the use of the leased location and certain leases include rental payments adjusted periodically for inflation.

2 unchanged sentences

Future minimum lease payments

Future minimum lease payments under the operating leases as of December 31, 2019 are:

Future minimum lease payments under the operating leases (with initial lease terms in excess of one year) as of December 31, 2020 are:

As of December 31, 2020

4 unchanged sentences

Present value of lease liabilities

Index to Consolidated Financial Statements

Future minimum lease payments under the non-cancelable operating leases (with initial lease terms in excess of one year) as of December 31, 2018 were:

(in thousands)

Year ending December 31,

Total minimum lease payments

(1) Operating lease payments reflect the Company's current fixed obligations under the operating lease agreements.

Certain ATM site leases contain termination options that grant the Company the option to terminate the lease prior to the stated term of the agreement.

The Company includes the future minimum lease payments for these ATM site leases only to the extent that the termination option is not reasonably certain to be exercised.

Lease expense recognized in the Consolidated Statements of Income is summarized as follows:

2 unchanged sentences

Year ended December 31, 2020

Year ended December 31, 2019

Operating lease expense

Selling, general and administrative and Direct operating costs

Variable lease expense

Short-term and variable lease expense

Selling, general and administrative and Direct operating costs

8 unchanged sentences

Year ended December 31, 2020

Year ended December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities (a)

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Total tax expense

The following is a reconciliation of the federal statutory income tax rates of 21 % for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017 to the effective income tax rate for the same years:

The following is a reconciliation of the federal statutory income tax rates of 21 % to the effective income tax rate for the years ended December 31, 2020, 2019 and 2018:

Year Ended December 31,

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We calculate our provision for federal, state and international income taxes based on current tax law.

On December 22, 2017, the U.S.

enacted into law what is informally called the Tax Cuts and Jobs Act of 2017 ("U.S.

Tax Reform").

The most significant provisions of U.S.

Tax Reform are the transition tax on previously undistributed foreign earnings of foreign subsidiaries, the reduction of the U.S.

corporate statutory income tax rate from 35% to 21% beginning on January 1, 2018, and new taxes on certain foreign sourced earnings.

In 2017, the Company initially recorded a net provisional tax expense of $ 41.6 million resulting from the enactment of U.S.

In the fourth quarter of 2018, the Company adjusted its accounting for the tax effects of U.S.

1 unchanged sentence

In the fourth quarter of 2019 after additional regulatory guidance was issued by applicable taxing authorities, the Company elected to claim U.S.

tax credits on foreign tax paid on foreign source income, which reduced the net tax expense by $ 25.7 million .

Index to Consolidated Financial Statements

foreign tax credits, which reduced the net tax expense by $ 25.7 million.

The tax effect of temporary differences and carryforwards that give rise to deferred tax assets and liabilities from continuing operations are as follows:

10 unchanged sentences

Lease accounting

Foreign exchange

Gross deferred tax assets

11 unchanged sentences

Lease accounting

Foreign exchange

Total deferred tax liabilities

3 unchanged sentences

state tax loss carryforwards were $ 95.8 million and $ 97.6 million, respectively.

In 2019, the Company has recognized $ 59.1 million in U.S.

foreign tax credits which are largely not expected to be utilized in future periods.

As of December 31, 2020, the Company had U.S.

foreign tax credit carryforwards of $ 61.3 million which are largely not expected to be utilized in future periods.

In assessing the Company's ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

1 unchanged sentence

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not the Company will only realize the benefits of these deductible differences, net of the existing valuation allowances, as of December 31, 2019 .

Index to Consolidated Financial Statements

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances, as of December 31, 2020.

As of December 31, 2020, the Company had foreign tax net operating loss carryforwards of $ 197.4 million, which will expire as follows:

2 unchanged sentences

In addition, the Company's state tax net operating loss carryforwards of $ 95.8 million will expire periodically from 2021 through 2040 , U.S.

foreign tax credit carryforwards of $ 59.1 million that will expire periodically from 2021 through 2027, U.S.

research and expenditure credit carryforwards of $ 3.2 million that will expire over an indefinite number of years, and foreign tax credits of $ 2.8 million that will expire over an indefinite number of years.

tax expense has been recognized as a result of the transition tax and Global Intangible Low-Taxed Income ("GILTI") provisions of U.S.

foreign tax credit carryforwards of $ 61.3 million that will expire periodically from 2021 through 2028 and U.S.

federal research and expenditure credit carryforwards of $ 3.3 million that will expire periodically from 2034 through 2038.

tax expense has been recognized as a result of the transition tax and GILTI provisions of U.S.

Tax Reform, the Company has not provided additional deferred taxes with respect to items such as certain foreign exchange gains or losses, foreign withholding taxes or additional state taxes, if any, on undistributed earnings attributable to foreign subsidiaries and it is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely.

19 unchanged sentences

2018 through 2020

Index to Consolidated Financial Statements

It is reasonably possible that the balance of gross unrecognized tax benefits could significantly change within the next twelve months as a result of the resolution of audit examinations and expirations of certain statutes of limitations and, accordingly, materially affect the Company's operating results.

1 unchanged sentence

(15) Valuation and Qualifying Accounts

Trade accounts receivable balances and accounts receivable included within the settlement assets are stated net of allowance for doubtful accounts.

Trade accounts receivable and accounts receivable balances included within the settlement assets are stated net of credit losses.

Historically, the Company has not experienced significant write-offs.

The Company records allowances for doubtful accounts when it is probable that the accounts receivable balance will not be collected.

The following table provides a summary of the allowance for doubtful accounts balances and activity for the years ended December 31, 2019 , 2018 and 2017 :

The Company records credit losses when it is probable that the accounts receivable balance will not be collected.

The following table provides a summary of the credit loss balances and activity for the years ended December 31, 2020 , 2019 and 2018 :

Year Ended December 31,

(in thousands)

Beginning balance-allowance for doubtful accounts

Beginning balance-credit losses

Additions-charged to expense

1 unchanged sentence

Other (primarily changes in foreign currency exchange rates)

Ending balance-allowance for doubtful accounts

Ending balance-credit losses

(16) Stock Plans

The Company has share-based compensation plans ("SCP") that allow it to grant restricted shares, or options to purchase shares, of common stock to certain current and prospective key employees, directors and consultants of the Company.

These awards generally vest over periods ranging from three to five years from the date of grant, are generally exercisable during the shorter of a ten-year term or the term of employment with the Company.

These awards gen erally vest over periods ranging from three to five years from the date of grant.

Stock options are generally exercisable during the shorter of a ten-year term or the term of employment with the Company.

With the exception of certain awards made to the Company's employees in Germany, Singapore and Malaysia, awards under the SCP are settled through the issuance of new shares under the provisions of the SCP.

1 unchanged sentence

As of December 31, 2020, the Company has approximately 0.5 million in total shares remaining available for issuance under the SCP.

Share-based compensation expense was $ 21.4 million , $ 16.8 million and $ 15.6 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, and was recorded in salaries and benefits expense in the accompanying Consolidated Statements of Income.

Share-based compensation expense was $ 22.0 million, $ 21.4 million and $ 16.8 million for the years ended December 31, 2020, 2019 and 2018 , respectively, and was recorded in salaries and benefits expense in the accompanying Consolidated Statements of Operations.

The Company recorded a tax benefit of $ 2.1 million, $ 4.9 million and $ 2.7 million during the years ended December 31, 2020, 2019 and 2018 , respectively, for the portion of this expense that relates to foreign tax jurisdictions in which an income tax benefit is expected to be derived.

Index to Consolidated Financial Statements

Stock options

Summary stock options activity is presented in the table below:

Number of Shares

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (thousands)

Balance at December 31, 2019 (1,653,340 shares exercisable)

11 unchanged sentences

Risk-free interest rate - range

0.31 % to 1.17

Dividend yield

2 unchanged sentences

Weighted-average fair value (per share)

(a) At the date of grant, the risk fee rate for stock options awarded in 2019 and 2018 was 1.7% and 2.8%, respectively.

(a) At the date of grant, the risk fee rate for stock options awarded in 2019 and 2018 was 1.7 %, and 2.8 %, re spectively.

(b) During 2020, the Company granted 1,350,000 options that were valued using a Monte Carlo simulation (not included in the table above).

The Monte Carlo simulation calculated a fair value per option of $ 26.90 using the following assumptions:

volatility of 37.0 %, risk-free interest rate of 0.33 %, and a term of 5.0 years.

Restricted stock

Restricted stock awards vest based on the achievement of time-based service conditions and/or performance-based conditions.

For certain awards, vesting is based on the achievement of more than one condition of an award with multiple time-based

and/or performance-based conditions.

Index to Consolidated Financial Statements

For certain awards, vesting is based on the achievement of more than one condition of an award with multiple time-based and/or performance-based conditions.

Summary restricted stock activity is presented in the table below:

Average Grant

Value Per Share

Number of Shares

Weighted Average Grant Date Fair Value Per Share

Nonvested at December 31, 2019

4 unchanged sentences

The weighted average grant date fair value of restricted stock granted during the years ended December 31, 2020, 2019 and 2018 was $ 117.97 , $ 145.93 and $ 107.88 per share, respectively.

Employee stock purchase plan

Employee stock purc hase plan

The Company has a qualified Employee Stock Purchase Plan (the "ESPP"), which allows qualified employees (as defined by the plan documents) to participate in the purchase of rights to purchase designated shares of the Company's Common Stock at a price equal to the lower of 85% of the closing price at the beginning or end of each quarterly offering period.

21 unchanged sentences

The Company currently operates in the following three reportable operating segments:

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

Index to Consolidated Financial Statements

integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.

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.

1) Through the EFT Processing Segment, the Company processes transactions for a network of ATMs and POS terminals across Europe, the Middle East, Asia Pacific and the United States.

Through this segment, the Company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.

2) T hrough 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.

Through the Money Transfer Segment, the Company provides global money transfer services under the brand names, Ria, IME, and xe.

3) Through the Money Transfer Segment, the Company provides global money transfer services under the brand names Ria, AFEX, IME, and xe.

Ria, AFEX, 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.

4 unchanged sentences

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.

Index to Consolidated Financial Statements

The following tables present the Company's reportable segment results for the years ended December 31, 2020, 2019 and 2018 :

1 unchanged sentence

(in thousands)

EFT Processing

Money Transfer

Corporate Services, Eliminations and Other

Total revenues

3 unchanged sentences

Selling, general and administrative

Acquired intangible assets impairment

Goodwill and acquired intangible assets impairment

Depreciation and amortization

4 unchanged sentences

Interest expense

Loss from unconsolidated affiliates

Loss on early retirement of debt

Foreign currency exchange loss, net

3 unchanged sentences

Segment assets as of December 31, 2020

Property and equipment, net as of December 31, 2019

Index to Consolidated Financial Statements

For the Year Ended December 31, 2019

(in thousands)

EFT Processing

Money Transfer

Corporate Services, Eliminations and Other

Total revenues

3 unchanged sentences

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Depreciation and amortization

4 unchanged sentences

Interest expense

Income from unconsolidated affiliates

Foreign currency exchange gain, net

3 unchanged sentences

Segment assets as of December 31, 2019

Property and equipment, net as of December 31, 2018

Index to Consolidated Financial Statements

For the Year Ended December 31, 2018

(in thousands)

EFT Processing

Money Transfer

Corporate Services, Eliminations and Other

Total revenues

16 unchanged sentences

Segment assets as of December 31, 2018

Property and equipment, net as of December 31, 2017

Index to Consolidated Financial Statements

Total revenues for the years ended December 31, 2020, 2019 and 2018 , and property and equipment and total assets as of December 31, 2020 and 2019 , summarized by geographic location, were as follows:

17 unchanged sentences

The Company invests excess cash not required for use in operations primarily in high credit quality, short-term duration securities that the Company believes bear minimal risk.

Index to Consolidated Financial Statements

Fair value measurements

Fair value measurements used in the 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.

Fair value measurements used in the 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 transac tion 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).

1 unchanged sentence

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.

L evel 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

L evel 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.

15 unchanged sentences

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).

The carrying values of the Company's revolving credit agreements approximate fair values because interest is based on LIBOR that resets at va rious intervals of less than one year.

The Company estimates the fair value of the Convertible Notes and Senior Notes using quoted prices in inactive markets for identical liabilities (Level 2).

As of December 31, 2020 , the fair values of the Convertible Notes and Senior Notes were $ 667.4 million and $ 728.7 million, respectively, with carrying values of $ 452.2 million and $ 732.8 million, respectively.

5 unchanged sentences

These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

Index to Consolidated Financial Statements

(20) Commitments

25 unchanged sentences

Euronet incurred expenses of $ 0.1 million, $ 0.3 million and $ 0.3 million during the years ended December 31, 2020 , 2019 and 2018 , respectively, for the use of this airplane.

In June 2014, the Company signed an ATM operating agreement with Rontec Ltd., a U.K.

company in which Gerald Ronson holds a majority of the shares.

Ronson is the father-in-law of Paul Althasen, one of the Company's directors.

This is a commercial agreement under which the Company leases ATM sites from Rontec Ltd.

at rates which it considers to be competitive commercial rates.

The Company paid $ 50 thousand , $ 38 thousand and $ 49 thousand under this agreement in each of 2019, 2018 and 2017, respectively.

(22) Selected Quarterly Data (Unaudited)

Index to Consolidated Financial Statements

(in thousands, except per share data)

5 unchanged sentences

Operating income

Net income attributable to Euronet Worldwide, Inc.

Earnings per common share:

For the Year Ended December 31, 2020

Operating income (loss)

Net income (loss)

1 unchanged sentence

Earnings (loss) per common share:

For the Year Ended December 31, 2019

Operating income

Net income attributable to Euronet Worldwide, Inc.

Earnings per common share:

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data