What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-10-28 · 192 added, 245 removed, 424 unchanged (51% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

45 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

Direct operating costs

Direct operating costs, exclusive of depreciation

Salaries and benefits

Selling, general and administrative

Goodwill and acquired intangible assets impairmen t

Depreciation and amortization

Total operating expenses

Operating income (loss)

Operating income

Other income (expense):

15 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited, in thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net income (loss)

Translation adjustment

Comprehensive income (loss)

Comprehensive loss (income) attributable to noncontrolling interests

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

Comprehensive loss

Comprehensive loss attributable to noncontrolling interests

Comprehensive loss attributable to Euronet Worldwide, Inc.

See accompanying notes to the unaudited consolidated financial statements.

6 unchanged sentences

Balance as of December 31, 2020

Net income (loss)

Other comprehensive loss

Stock issued under employee stock plans

Share-based compensation

Repurchase of shares

Balance as of March 31, 2020

Net (loss) income

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balan ce as of June 30, 2020

Other comprehensive income

Other comprehensive loss

Stock issued under employee stock plans

Share-based compensation

Balance as of September 30, 2020

Balan ce as of March 31, 2021

Shares Outstanding

1 unchanged sentence

Balance as of December 31, 2021

Net (loss) income

Net income (loss)

Other comprehensive loss

1 unchanged sentence

Share-based compensation

Repurchase of shares

Adoption of ASU 2020-06

Balance as of March 31, 2022

Net income (loss)

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balance as of June 30, 2021

Net income (loss)

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balance as of September 30, 2021

See accompanying notes to the unaudited consolidated financial statements.

8 unchanged sentences

Balance as of December 31, 2020

Net income (loss)

Net (loss) income

Other comprehensive loss

1 unchanged sentence

Share-based compensation

Repurchase of shares

Balance as of March 31, 2021

Net (loss) income

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balance as of June 30, 2020

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balance as of September 30, 2020

Retained Earnings

3 unchanged sentences

Balance as of December 31, 2021

Net (loss) income

Net income (loss)

Other comprehensive loss

1 unchanged sentence

Share-based compensation

Repurchase of shares

Adoption of ASU 2020-06

Balance as of March 31, 2022

Net income (loss)

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balance as of June 30, 2021

Other comprehensive income

Stock issued under employee stock plans

Share-based compensation

Balance as of September 30, 2021

See accompanying notes to the unaudited consolidated financial statements.

3 unchanged sentences

(Unaudited, in thousands)

Nine Months Ended

September 30,

Three Months Ended

Net income (loss)

4 unchanged sentences

Deferred income taxes

Goodwill and acquired intangible assets impairment

Accretion of convertible debt discount and amortization of debt issuance costs

1 unchanged sentence

Income taxes payable, net

Trade accounts receivable

Prepaid expenses and other current assets

Trade accounts payable

Trade accounts receivable, including amounts in settlement assets

Prepaid expenses and other current assets, including amounts in settlement assets

Trade accounts payable, including amounts in settlement obligations

Deferred revenue

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities, including amounts in settlement obligations

Changes in noncurrent assets and liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

8 unchanged sentences

Repayments of revolving credit agreements

Net borrowing (repayments) from short-term debt obligations

Net cash used in financing activities

Net borrowings (repayments) from short-term debt obligations

Net cash provided by (used in) financing activities

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

11 unchanged sentences

Euronet Worldwide, Inc.

(the “Company” or “Euronet”) was established as a Delaware corporation on December 13, 1996 and succeeded Euronet Holding N.V.

(the "Company", "Euronet", "we" and "us") was established as a Delaware corporation on December 13, 1996 and succeeded Euronet Holding N.V.

as the group holding company, which was founded and established in 1994.

1 unchanged sentence

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.

Basis of Presentation

2 unchanged sentences

In the opinion of management, such unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations, comprehensive income, changes in equity and cash flows for the interim periods.

The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2020 , including the notes thereto, set forth in the Company’s 2020 Annual Report on Form 10-K.

The unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021 , including the notes thereto, set forth in our 2021 Annual Report on Form 10-K.

Use of Estimates

4 unchanged sentences

The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 .

Euronet’s Electronic Funds Transfer ("EFT") Processing Segment normally experiences its heaviest demand for dynamic currency conversion ("DCC") services during the third quarter of the fiscal year, normally coinciding with the tourism 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.

5 unchanged sentences

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.

The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on the consolidated financial statements.

( 3 ) PENDING ACQUISITION

In March 2021, the Company entered into an agreement to purchase the Piraeus Bank Merchant Acquiring business of Piraeus Bank for € 300 million, or approximately $ 360 millio n.

The proposed arrangement will include separate commercial agreements for a long-term strategic partnership with Piraeus Bank for collaborative product distribution, processing and customer referrals.

The acquisition will expand the Company’s omnichannel payments strategy and position the Company in Greece’s growing market for merchant acquiring services.

The closing is targeted for late 2021 and is subject to regulatory approvals, finalization of the commercial agreements, and customary closing conditions.

The Company expects to finance the purchase price using cash on hand.

We adopted this standard on January 1, 2022 using the modified retrospective approach, which resulted in our Convertible Senior Notes Due 2049 being recognized as a single liability.

As a result of the adoption of this standard we recorded a $ 99.7 million decrease to additional paid-in capital, a $ 56.8 million decrease in debt discounts and a $ 42.9 million increase in retained earnings.

The adoption of this standard also impacted our deferred tax liability by decreasing our deferred tax liability by $ 15.0 million, decreasing retained earnings by $ 10.6 million, and increasing additional paid-in capital by $ 25.6 million.

Additionally, the elimination of the treasury stock method will increase the number of dilutive shares used in the diluted earnings per share calculation, if dilutive, by 2.8 million shares.

( 3 ) ACQUISITIONS

On March 15, 2022 we completed the acquisition of the Merchant Acquiring Business of Piraeus Bank ("PBMA").

The acquisition includes 205,000 POS terminals at 170,000 merchants throughout Greece, as well as Piraeus Bank’s online merchant acquiring business and expands our omnichannel payments strategy where we use our proprietary technology to provide cash, card-based acquiring solutions, alternative payment acquiring, online acquiring, tokenized payment services and other payment products.

Additionally, the acquisition includes a long-term commercial framework agreement between Piraeus Bank and Euronet which includes collaborative product distribution, processing and customer referrals.

The purchase price was € 313.8 million, or approximately $ 346.2 million, which includes $ 331.0 million cash paid at closing plus $ 15.2 million of estimated contingent consideration for a ten-year earnout contingent on performance targets outlined in the commercial framework agreement.

The contingent consideration is related to a percentage of the net fee income received during the ten-year period of the commercial framework agreement and there is no contractual maximum amount of consideration under this agreement.

The initial accounting for this acquisition is not complete as of March 31, 2022.

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

Additional time is needed particularly to refine and review the results of the valuation of assets and liabilities.

The acquisition has been accounted for as a business combination 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 following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date.

(in thousands)

As of March 15, 2022

Other current assets

Settlement assets

Property and equipment

Acquired intangible assets

Total assets acquired

Trade accounts payable

Settlement liabilities

Accrued expenses and other current liabilities

Deferred revenue

Other long-term liabilities

Total liabilities assumed

Net assets acquired

Assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date.

The fair value measurements of intangible assets were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy.

Level 3 inputs include discount rates that would be used by a market participant in valuing these assets, projections of revenues and cash flows, and customer attrition rates, among others.

We acquired a customer relationship intangible asset with a preliminary fair value of $ 112.2 million that is being amortized on a straight-line basis over 15 years and a contract related intangible asset of $ 10.3 million that is being amortized on a straight-line basis over 10 years.

Goodwill, with a preliminary value of $ 212.2 million, arising from the acquisition was included in the EFT Processing Segment.

The factors that make up goodwill include synergies from combining PBMA operations and intangible assets that do not qualify for separate recognition.

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

Revenues and expenses related to the acquisition and pro fo rma results of operations have not been presented for the three months ended March 31, 2022 as the results were not material to our overall operations.

(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 accounts payable.

We record corresponding settlement obligations relating to accounts payable.

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

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

Receivables from business partners represent funds collected by such business partners that are in transit to the Company.

The settlement cash held at the Company is primarily generated from the monies remitted by consumers through Company agents and financial institutions in payment of the face value of the payment service or foreign currency purchased and the related fees charged to purchase the currency.

We use our cash and cash equivalents to pay the face value of the payment service product upon presentation by the recipient.

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

Receivables from business partners represent funds collected by such business partners that are in transit to us.

Settlement obligations consist of accrued expenses for money transfers, content providers, and EFT customer deposits and accounts payable to agents and content providers.

Money transfer accrued expenses represent amounts to be paid to transferees when they request funds.

Most agents typically settle with transferees first then obtain reimbursement from the Company.

Most agents typically settle with transferees first then obtain reimbursement from us.

Money order accrued expenses represent amounts not yet presented for payment.

1 unchanged sentence

(in thousands)

September 30,

Settlement assets:

10 unchanged sentences

(in thousands)

September 30,

Cash and cash equivalents

6 unchanged sentences

Basic earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the respective period.

Diluted earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average shares outstanding during the respective period, after adjusting for the potential dilution of options to purchase the Company's common stock, assumed vesting of restricted stock and the assumed conversion of the Company's convertible debt, if such conversion would be dilutive.

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

Diluted earnings (loss) per share has been computed by dividing earnings (loss) available to common stockholders by the weighted average shares outstanding during the respective period, after adjusting for the potential dilution of options to purchase our common stock, assumed vesting of restricted stock and the assumed conversion of our convertible debt, if such conversion would be dilutive.

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Computation of diluted weighted average shares outstanding:

2 unchanged sentences

Diluted weighted average shares outstanding

The table includes all stock options and restricted stock that are dilutive to the Company's weighted average common shares outstanding during the period.

The calculation of diluted earnings (loss) per share excludes stock options or shares of restricted stock that are anti-dilutive to the Company’s weighted average common shares outstanding of approximately 770,000 and 751,000 for the three and nine months ended September 30, 2021, respectively, and approximately 1,122,000 and 1,887,000 for the three and nine months ended September 30, 2020 , respectively .

The Company issued Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019.

The Company's Convertible Notes currently have a settlement feature requiring the Company upon conversion to settle the principal amount of the debt and any conversion value in excess of the principal value ("conversion premium"), for cash or shares of the Company's common stock or a combination thereof, at the Company's option.

The Company has stated its intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion premium.

Accordingly, the Convertible Notes were included in the calculation of diluted earnings (loss) per share if their inclusion was dilutive.

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

The Convertible Notes would only have a dilutive effect if the market price per share of common stock exceeds the conversion price of $ 188.73 per share.

The market price per share of common stock was $ 127.28 on September 30, 2021 and $ 91.10 on September 30, 2020 , t herefore, according to ASC Topic 260, Earnings per Share (“ASC 260”) , there was no dilutive effect of the assumed conversion of the debentures for the three and nine months ended September 30, 2021 and 2020.

The table includes all stock options and restricted stock that are dilutive to our weighted average common shares outstanding during the period.

The calculation of diluted earnings (loss) per share excludes stock options or shares of restricted stock that are anti-dilutive to our weighted average common shares outstanding of approximately 2,237,000 and 2,437,000 for the three months ended March 31, 2022 and 2021 , respectively.

We issued Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019.

Our Convertible Notes currently have a settlement feature requiring us 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 our common stock or a combination thereof, at our option.

We have stated our intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion premium;

however, after adopting ASU 2020-06, 2.8 million incremental shares assumed for conversion of convertible notes shall be included in the dilutive earnings per share calculation, if dilutive, regardless of whether the market price trigger has been met.

For the three months ended March 31, 2022, the assumed conversion resulted in an anti-dilutive impact, therefore our Convertible Notes were not included in the calculation of diluted earnings (loss) per share.

The dilutive effect increases the more the market price exceeds the conversion price of $ 188.73 per share.

See Note 9, Debt Obligations, to the consolidated financial statements for more information about the Convertible Notes.

Share repurchases

On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized a repurchase program of $ 120 million in value of the Company's common stock through March 11, 2021.

On February 26, 2020, the Company put a repurchase program in place to repurchase up to $ 250 million in value, but not more than 5.0 million shares of common stock through February 28, 2022.

For the three and nine months ended September 30, 2021, there were no repurchases of stock under the repurchase programs .

Repurchases under the current program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) consists entirely of foreign currency translation adjustments.

The Company recorded a foreign currency translation loss of $ 29.7 million and $ 59.9 million for the three and nine months ended September 30, 2021, respectively, and a gain of $ 47.0 million and $ 19.4 million for the three and nine months ended September 30, 2020, respectively.

There were no reclassifications of foreign currency translation into the consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 .

On February 26, 2020, we put a repurchase program in place to repurchase up to $ 250 million in value, but not more than 5.0 million shares of common stock through February 28, 2022.

On December 8, 2021, we put a repurchase program in place to repurchase up to $ 300 million in value, but not more than 5.0 million shares of common stock through December 8, 2023.

For the three months ended March 31, 2022, we repurchased $ 70.4 million of stock under the repurchase programs .

Re purchases under the current program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consists entirely of foreign currency translation adjustments.

We recorded foreign currency translation losses of $ 21.1 million and $ 42.9 million for the three months ended March 31, 2022 and 2021, respectively.

There were no reclassifications of foreign currency translation into the consolidated statements of income for the three months ended March 31, 2022 and 2021 .

( 6 ) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the nine months ended September 30, 2021 is presented below:

A summary of acquired intangible assets and goodwill activity for the three months ended March 31, 2022 is presented below:

(in thousands)

Balance as of December 31, 2021

Increases (decreases):

Foreign currency exchange rate changes

Balance as of September 30, 2021

Of the total goodwill balance of $ 646.2 million as of September 30, 2021 , $ 393.9 million relates to the Money Transfer Segment, $ 131.0 million relates to the epay Segment and the remaining $ 121.3 million relates to the EFT Processing Segment.

Estimated amortization expense on acquired intangible assets with finite lives as of September 30, 2021, is expected to total $ 5.6 million for the remainder of 2021, $ 21.2 million for 2022, $ 16.3 million for 2023, $ 9.6 million for 2024, $ 6.3 million for 2025 and $ 6.2 million for 2026 .

Balance as of March 31, 2022

Of the total goodwill balance of $ 846.2 million as of March 31, 2022 , $ 388.1 million relates to the Money Transfer Segment, $ 331.5 million relates to the EFT Processing Segment and the remaining $ 126.6 million relates to the epay Segment .

Estimated amortization expense on acquired intangible assets with finite lives as of March 31, 2022, is expected to total $ 22.3 million for the remainder of 2022, $ 25.1 million for 2023, $ 18.4 million for 2024, $ 15.0 million for 2025, $ 14.7 million for 2026 and $ 13.4 million for 2027.

( 7 ) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

1 unchanged sentence

(in thousands)

September 30, 2021

March 31, 2022

December 31, 2021

1 unchanged sentence

Derivative liabilities

Accrued payroll expenses

Current portion of finance lease obligations

(8) UNEARNED 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 nine months ended September 30, 2021 is driven by $ 39.7 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, offset by $ 45.4 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.

We record deferred revenues when cash payments are received or due in advance of our performance.

The decrease in the deferred revenue balance for the three months ended March 31, 2022 is the result of $ 16.3 million of cash payments received in the current year for which we have not yet satisfied the performance obligations, offset by $ 21.7 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2021.

(9) DEBT OBLIGATIONS

1 unchanged sentence

(in thousands)

September 30, 2021

March 31, 2022

December 31, 2021

12 unchanged sentences

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 .

In May 2021, an additional lender joined the Credit Facility which increased the revolving commitment by $ 30 million.

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).

3 unchanged sentences

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

The Company was in compliance with all debt covenants as of September 30, 2021 .

The Company was in compliance with all debt covenants as of March 31, 2022 .

Convertible Debt

2 unchanged sentences

Holders of the Convertible Notes have the option to require the Company to purchase their notes on each of March 15, 2025, March 15, 2029, March 15, 2034, March 15, 2039 and March 15, 2044 at a repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

In accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt is allocated between debt and equity components so that debt is discounted to reflect the Company's nonconvertible debt borrowing rate.

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

Prior to the adoption of ASU 2020-06 as of January 1, 2022, in accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt was allocated between debt and equity components so that debt was discounted to reflect our nonconvertible debt borrowing rate.

ASC 470-20-35-13 required the debt discount to be amortized over the period the convertible debt was expected to be outstanding as additional non-cash interest expense.

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

Contractual interest expense for the Convertible Notes was $ 1.0 million and $ 3.0 million for the three and nine months ended September 30, 2021, respectively, and $ 1.0 million and $ 3.0 million for the three and nine months ended September 30, 2020, respectively .

Accretion expense for the Convertible Notes was $ 4.0 million and $ 11.9 million for the three and nine months ended September 30, 2021 , respectively, and $ 3.8 million and $ 11.4 million for the three and nine months ended September 30, 2020, respectively .

The effective interest rate was 4.4 % for the three and nine months ended September 30, 2021.

As of September 30, 2021, the unamortized discount was $ 60.8 million and will be amortized through March 2025.

Contractual interest expense for the Convertible Notes was $ 1.0 million for the three months ended March 31, 2021 .

Accretion expense for the Convertible Notes was $ 3.9 million for the three months ended March 31, 2021.

See Footnote 2, Recently Issued and Adopted Accounting Pronouncements, for more information regarding this adoption.

1.375% Senior Notes due 2026

1 unchanged sentence

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 September 30, 2021 , the Company has outstanding € 600 million ( $ 694.9 million ) principal amount of the Senior Notes.

As of March 31, 2022 , the Company has outstanding € 600 million ( $ 663.9 million ) principal amount of the Senior Notes.

In addition, the Company may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.

1 unchanged sentence

Certain of the Company's subsidiaries have available lines of credit and overdraft credit facilities that generally provide for short-term borrowings that are used from time to time for working capital purposes.

As of September 30, 2021 and December 31, 2020 , borrowings under these arrangements were $ 1.1 million and $ 0.9 million , respectively.

As of March 31, 2022 and December 31, 2021 , borrowings under these arrangements were $ 0.4 million and $ 0.9 million , respectively.

Debt Issuance Costs

As of March 31, 2022, we had unamortized debt issuance costs of $ 2.1 million for the Credit Facility, $ 6.4 million for the Convertible Notes and $ 5.1 million for the Senior Notes that will be amortized through October 2023, March 2025 and May 2026, respectively.

(10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

2 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 Topic 815, Derivatives and Hedging ("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 are reflected concurrently in earnings for both the derivative instrument and the transaction and have an offsetting effect.

Foreign currency exchange contracts - Ria Operations and Corporate

5 unchanged sentences

T he Company had foreign currency forward contracts outstanding in the U.S.

with a notional value of $ 275 million and $ 246 million as of September 30, 2021 and December 31, 2020, respectively .

with a notional value of $ 231.1 million and $ 222.1 million as of March 31, 2022 and December 31, 2021, respectively .

The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds sterling, euro 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.

T he Company had foreign currency forward contracts outstanding with a notional value of $ 46 million and $ 454 million as of September 30, 2021 and December 31, 2020, respectively , primarily in euro.

T he Company had foreign currency forward contracts outstanding with a notional value of $ 16.2 million and $ 216.1 million as of March 31, 2022 and December 31, 2021, respectively , primarily in euro.

Foreign currency exchange contracts - xe Operations

1 unchanged sentence

xe aggregates its foreign currency exposures arising from customer contracts and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties.

Foreign exchange revenues from xe's total portfolio of positions were $ 20.1 million and $ 58.5 million for the three and nine months ended September 30, 2021 , respectively, and $ 14.4 million and $ 45.7 million for t he three and nine months ended September 30, 2020, respectively.

Foreign exchange revenues from xe's total portfolio of positions were $ 22.5 million and $ 18.5 million for the three months ended March 31, 2022 and 2021 , respectively.

All of the derivative contracts used in the Company' s xe operations are economic hedges and are not designated as hedges under ASC 815 .

5 unchanged sentences

The aggregate equivalent U.S.

dollar notional amount of foreign currency derivative customer contracts held by the Company in its xe operations as of September 30, 2021 and December 31, 2020 was approximately $ 1.1 billion and $ 1.3 billion , respectively.

dollar notional amount of foreign currency derivative customer contracts held by the Company in its xe operations as of March 31, 2022 and December 31, 2021 was approximately $ 1.1 billion and $ 1.0 billion , respectively.

The significant majority of customer contracts are written in major currencies such as the euro, U.S.

6 unchanged sentences

Balance Sheet Location

September 30, 2021

March 31, 2022

December 31, 2021

Balance Sheet Location

September 30, 2021

March 31, 2022

December 31, 2021

3 unchanged sentences

Other current liabilities

The following tables summarize the gross and net fair value of derivative assets and liabilities as of September 30, 2021 and December 31, 2020 (in thousands):

The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2022 and December 31, 2021 (in thousands):

Offsetting of Derivative Assets

Gross Amounts Not Offset in the Consolidated Balance Sheet

As of September 30, 2021

As of March 31, 2022

Gross Amounts of Recognized Assets

8 unchanged sentences

Gross Amounts Not Offset in the Consolidated Balance Sheet

As of September 30, 2021

As of March 31, 2022

Gross Amounts of Recognized Liabilities

8 unchanged sentences

Income Statement Presentation

The following table summarizes the location and amount of gains and losses on derivatives in the Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 :

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

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

The following table summarizes the location and amount of losses on derivatives in the Consolidated Statements of Income for the three months ended March 31, 2022 and 2021 :

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

Location of Loss Recognized in Income on Derivative Contracts

Three Months Ended

September 30,

Nine Months Ended September 30,

(in thousands)

Foreign currency exchange contracts - Ria Operations

Foreign currency exchange gain (loss), net

Foreign currency exchange loss, net

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

10 unchanged sentences

The following table details financial assets and liabilities measured and recorded at fair value on a recurring basis:

As of September 30, 2021

As of March 31, 2022

(in thousands)

15 unchanged sentences

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 September 30, 2021 , the fair values of the Convertible Notes and Senior Notes were $ 603.1 million and $ 710.3 million , respectively, with carrying values of $ 464.2 million and $ 694.9 million , respectively.

As of March 31, 2022 , the fair values of the Convertible Notes and Senior Notes were $ 563.4 million and $ 628.6 million , respectively, with carrying values of $ 525.0 million and $ 663.9 million , respectively.

(12) SEGMENT INFORMATION

Euronet’s reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting (“ASC 280”) .

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

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

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 surcharges and other value added services.

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

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.

Our reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting ("ASC 280") .

We currently operate in the following three reportable operating segments:

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

We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and prepaid card outsourcing, dynamic currency conversion, domestic and international surcharges and other value added services.

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

2) T hrough the epay Segment, we provide 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, AFEX, IME, and xe.

3) Through the Money Transfer Segment, we provide 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.

1 unchanged sentence

xe is also a provider of foreign currency exchange information.

The Company also offers customers bill payment services, payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services, foreign currency exchange services and mobile top-up.

We also offer customers bill payment services, payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services, foreign currency exchange services and mobile top-up.

Furthermore, xe provides cash management solutions and foreign currency risk management services to small-to-medium sized businesses.

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

The following tables present the Company’s reportable segment results for the three and nine months ended September 30, 2021 and 2020 :

For the Three Months Ended September 30, 2021

(in thousands)

Corporate Services,

Total revenues

Operating expenses:

Direct operating costs

Salaries and benefits

Selling, general and administrative

Depreciation and amortization

Total operating expenses

Operating income (expense)

For the Three Months Ended September 30, 2020

(in thousands)

Corporate Services,

Total revenues

Operating expenses:

Direct operating costs

Salaries and benefits

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Depreciation and amortization

Total operating expenses

Operating income (expense)

For the Nine Months Ended September 30, 2021

In addition, we account for non-operating activity, share-based compensation expense, certain intersegment eliminations and the costs of providing corporate and other administrative services in our administrative division, "Corporate Services, Eliminations and Other." These services are not directly identifiable with our reportable operating segments.

The following tables present our reportable segment results for the three months ended March 31, 2022 and 2021 :

For the Three Months Ended March 31, 2022

(in thousands)

2 unchanged sentences

Operating expenses:

Direct operating costs

Direct operating costs, exclusive of depreciation

Salaries and benefits

3 unchanged sentences

Operating (loss) income

For the Nine Months Ended September 30, 2020

For the Three Months Ended March 31, 2021

(in thousands)

2 unchanged sentences

Operating expenses:

Direct operating costs

Direct operating costs, exclusive of depreciation

Salaries and benefits

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Depreciation and amortization

1 unchanged sentence

Operating (loss) income

The following table presents the Company’s total assets by reportable segment:

The following table presents our total assets by reportable segment:

Total Assets as of

(in thousands)

September 30, 2021

March 31, 2022

December 31, 2021

2 unchanged sentences

Corporate Services, Eliminations and Other

The following table presents the Company's revenues disaggregated by segment and region.

The following table presents our revenues disaggregated by segment and region.

Sales and usage-based taxes are excluded from revenues.

The Company believes disaggregation by segment and region best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

We believe disaggregation by segment and region best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

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 and region.

For the Three Months Ended September 30, 2021

For the Nine Months Ended September 30, 2021

(in thousands)

North America

For the Three Months Ended September 30, 2020

For the Nine Months Ended September 30, 2020

For the Three Months Ended March 31, 2022

For the Three Months Ended March 31, 2021

(in thousands)

1 unchanged sentence

( 13 ) INCOME TAXES

Our effective income tax rate was 23.6 % and 35.8 % for the three and nine months ended September 30, 2021, respectively, compared to 27.2 % and ( 55.9 )% for t he three and nine months ended September 30, 2020, respectively.

Our effective income tax rate for the three and nine months ended September 30, 2021 was higher than the applicable statutory income tax rate of 21 % as a result of certain foreign earnings being subject to higher local statutory tax rates, the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings and as a result of an increase in the valuation allowance in certain jurisdictions relating to the reversal of tax benefits recognized in the first quarter of 2021 for continuing net operating losses.

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

Our effective income tax rate was 67.4 % and ( 236.9 %) for the three months ended March 31, 2022 and 2021, respectively .

Our effective income tax rate for the three months ended March 31, 2022 was higher than the applicable statutory income tax rate of 21 % a s a result of our U.S.

deferred tax activity on foreign exchange positions and certain of our foreign earnings being subject to higher local statutory tax rates.

Our effe ctive income tax r ate for the three months ended March 31, 2021 was lower than the applicable statutory income tax rate of 21 % as a result of the non-recognition of tax benefits from losses in certain foreign countries where we have a limited history of profitable earnings, certain of our foreign earnings of being subject to higher local statutory tax rates, and our U.S.

deferred tax activity on foreign exchange positions.

(14) COMMITMENTS

As of September 30, 2021 , the Company had $ 85.3 million of stand-by letters of credit/bank guarantees issued on its behalf, of which $ 57.9 million are outstanding under the Credit Facility.

As of March 31, 2022 , we had $ 85.2 million of stand-by letters of credit/bank guarantees issued on our behalf, of which $ 56.3 million are outstanding under the Credit Facility.

The remaining stand-by letters of credit/bank guarantees are collateralized by $ 3.6 million of cash deposits held by the respective issuing banks.

Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries.

As of September 30, 2021 , the Company had granted off balance sheet guarantees for cash in various ATM networks amounting to $ 11.4 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $ 39.4 million over the terms of agreements with the customers.

From time to time, the Company enters into agreements with commercial counterparties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement.

Under certain circumstances, we grant guarantees in support of obligations of subsidiaries.

As of March 31, 2022 , we had granted off balance sheet guarantees for cash in various ATM networks amounting to $ 11.4 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $ 37.5 million over the terms of agreements with our customers.

From time to time, we enter into agreements with commercial counterparties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement.

The amount of such potential obligations is generally not stated in the agreements.

Euronet's liability under such indemnification provisions may be mitigated by relevant insurance coverage and may be subject to time and materiality limitations, monetary caps and other conditions and defenses.

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

Such indemnification obligations include the following:

In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for damage to ATMs and theft of ATM network cash.

As of September 30, 2021 , the balance of such cash used in the Company's ATM networks for which the Company was responsible was approximately $ 719 million .

The Company maintains insurance policies to mitigate this exposure;

In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for losses suffered by its customers and other parties as a result of the breach of its computer systems, including in particular, losses arising from fraudulent transactions made using information stolen through its processing systems.

The Company maintains insurance policies to mitigate this exposure;

In connection with the license of proprietary systems to customers, the Company provides certain warranties and infringement indemnities to the licensee, which generally warrant that such systems do not infringe on intellectual property owned by third parties and that the systems will perform in accordance with their specifications;

Euronet has entered into purchase and service agreements with vendors and consulting agreements with providers of consulting services, pursuant to which the Company has agreed to indemnify certain of such vendors and consultants, respectively, against third-party claims arising from the Company’s use of the vendor’s product or the services of the vendor or consultant;

In connection with acquisitions and dispositions of subsidiaries, operating units and business assets, the Company has entered into agreements containing indemnification provisions, which can be generally described as follows:

(i) in connection with acquisitions of operating units or assets made by Euronet, the Company has agreed to indemnify the seller against third party claims made against the seller relating to the operating unit or asset and arising after the closing of the transaction, and (ii) in connection with dispositions made by Euronet, Euronet has agreed to indemnify the buyer against damages incurred by the buyer due to the buyer’s reliance on representations and warranties relating to the subject subsidiary, operating unit or business assets in the disposition agreement if such representations or warranties were untrue when made;

Euronet has entered into agreements with certain third parties, including banks that provide fiduciary and other services to Euronet or to the Company’s benefit plans.

Under such agreements, the Company has agreed to indemnify such service providers for third-party claims relating to carrying out their respective duties under such agreements.

The Company is also required to meet minimum capitalization and cash requirements of various regulatory authorities in the jurisdictions in which the Company has money transfer operations.

The Company has obtained surety bonds in compliance with money transfer licensing requirements of the applicable governmental authorities.

To date, the Company is not aware of any significant claims made by the indemnified parties or third parties to guarantee agreements with the Company and, accordingly, no liabilities were recorded as of September 30, 2021 or December 31, 2020 .

In connection with contracts with financial institutions in the EFT Processing Segment, we are responsible for damage to ATMs and theft of ATM network cash.

As of March 31, 2022 , the balance of such cash used in our ATM networks for which we were responsible was approximately $ 485.7 million .

We maintain insurance policies to mitigate this exposure;

In connection with contracts with financial institutions in the EFT Processing Segment, we are responsible for losses suffered by our customers and other parties as a result of the breach of our computer systems, including in particular, losses arising from fraudulent transactions made using information stolen through our processing systems.

We maintain insurance policies to mitigate this exposure;

In connection with the license of proprietary systems to customers, we provide certain warranties and infringement indemnities to the licensee, which generally warrant that such systems do not infringe on intellectual property owned by third parties and that the systems will perform in accordance with their specifications;

We have entered into purchase and service agreements with vendors and consulting agreements with providers of consulting services, pursuant to which we have agreed to indemnify certain of such vendors and consultants, respectively, against third-party claims arising from our use of the vendor’s product or the services of the vendor or consultant;

In connection with acquisitions and dispositions of subsidiaries, operating units and business assets, we have entered into agreements containing indemnification provisions, which can be generally described as follows:

(i) in connection with acquisitions of operating units or assets made by us, we have agreed to indemnify the seller against third party claims made against the seller relating to the operating unit or asset and arising after the closing of the transaction, and (ii) in connection with dispositions made by us, we have agreed to indemnify the buyer against damages incurred by the buyer due to the buyer’s reliance on representations and warranties relating to the subject subsidiary, operating unit or business assets in the disposition agreement if such representations or warranties were untrue when made;

We have entered into agreements with certain third parties, including banks that provide fiduciary and other services to us or our benefit plans.

Under such agreements, we have agreed to indemnify such service providers for third-party claims relating to carrying out their respective duties under such agreements.

We are also required to meet minimum capitalization and cash requirements of various regulatory authorities in the jurisdictions in which we have money transfer operations.

We have obtained surety bonds in compliance with money transfer licensing requirements of the applicable governmental authorities.

To date, we are not aware of any significant claims made by the indemnified parties or third parties to guarantee agreements with us and, accordingly, no liabilities were recorded as of March 31, 2022 or December 31, 2021 .

( 15 ) LITIGATION AND CONTINGENCIES

From time to time, the Company is a party to legal or regulatory proceedings arising in the ordinary course of its business.

Currently, there are no legal proceedings or regulatory findings that management believes, either individually or in the aggregate, would have a material adverse effect on the Company's consolidated financial condition or results of operations.

From time to time, we are a party to legal or regulatory proceedings arising in the ordinary course of our business.

Currently, there are no legal proceedings or regulatory findings that management believes, either individually or in the aggregate, would have a material adverse effect on our consolidated financial condition or results of operations.

In accordance with U.S.

GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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.

( 16 ) LEASES

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

The Company's finance leases are immaterial.

We enter into operating leases for ATM sites, office spaces, retail stores and equipment.

Our finance leases are immaterial.

Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease terms.

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

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

We recognize lease expense for these leases on a straight-line basis over the lease term.

Most leases include an option to renew, with renewal terms that can extend the lease terms.

The exercise of lease renewal options is at the Company’s sole discretion.

The exercise of lease renewal options is at our sole discretion.

The depreciable life of assets and leasehold improvements are limited by the expected lease terms.

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

Since the Company is not reasonably certain not to exercise termination options, p ayments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period incurred and corresponding leases are excluded from the right of use lease asset and lease liability balances.

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.

We also have a unilateral termination right for most of the ATM site leases.

Since we are not reasonably certain not to exercise termination options, p ayments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period incurred and corresponding leases are excluded from the right of use lease asset and lease liability balances.

Certain of our 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.

Variable lease payments are recognized when the event, activity or circumstance in the lease agreement on which those payments are assessed occurs and are excluded from the right of use assets and lease liabilities balances.

1 unchanged sentence

Future minimum lease payments

Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of September 30, 2021 are:

As of September 30, 2021

Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of March 31, 2022 are:

As of March 31, 2022

Maturity of Lease Liabilities (in thousands)

Operating Leases (1)

R emainde r of 2021

Remainder of 2022

Total lease payments

1 unchanged sentence

Present value of lease liabilities

(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 Operations is summarized as follows:

(1) Operating lease payments reflect our current fixed obligations under the operating lease agreements.

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

Lease Expense

2 unchanged sentences

Three Months Ended

September 30, 2021

March 31, 2022

Three Months Ended

September 30, 2020

Nine Months Ended

September 30, 2021

Nine Months Ended

September 30, 2020

March 31, 2021

Operating lease expense

5 unchanged sentences

Lease Term and Discount Rate of Operating Leases

As of September 30, 2021

As of March 31, 2022

Weighted- average remaining lease term (years)

2 unchanged sentences

Other Information (in thousands)

Nine Months Ended

September 30, 2021

Nine Months Ended

September 30, 2020

Three Months Ended

March 31, 2022

Three Months Ended

March 31, 2021

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

1 unchanged sentence

ROU assets obtained in exchange for new operating lease liabilities

(a) Included in Net cash provided by operating activities on the Company's Consolidated Statements of Cash Flows.

(a) Included in Net cash provided by operating activities on our Consolidated Statements of Cash Flows.

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

What changed 10-Q

Item 1. Financial Statements