What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-02-22 compared with 2022-02-23 · 137 added, 146 removed, 1024 unchanged (22% of the section changed)

20 unchanged sentences

(12) Derivative Instruments and Hedging Activities 81

(13) Leases 84

(14) Income Taxes 86

16 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired the Euronet Merchant Services Payment Institution S.M.S.A (formerly the Merchant Acquiring Business of Piraeus Bank) during 2022 and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2022, Euronet Merchant Services Payment Institution S.M.S.A.

internal control over financial reporting associated with total assets of $520.8 million and total revenues of $88.8 million included in the consolidated financial statements of the company as of and for the year ended December 31, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Euronet Merchant Services Payment Institution S.M.S.A.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for convertible instruments as of January 1, 2022 due to the adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

Basis for Opinions

120 unchanged sentences

Year Ended December 31,

Net income (loss)

Net incom e (loss)

Other comprehensive (loss) income

12 unchanged sentences

Net income (loss)

Other comprehensive loss

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

Net (loss) income

Other comprehensive income

Other comprehensive loss

Stock issued under employee stock plans

4 unchanged sentences

Other comprehensive loss

Adoption of ASU-2020-60 on Convertible bond

Stock issued under employee stock plans

13 unchanged sentences

Net income (loss)

Other comprehensive loss

Stock issued under employee stock plans

Other comprehensive income

Stock issued under employee s toc k 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

Net (loss) income

Other comprehensive income

Other comprehensive loss

Stock issued under employee stock plans

4 unchanged sentences

Other comprehensive loss

Adoption of ASU-2020-06 on Convertible bond

Stock issued under employee stock plans

15 unchanged sentences

Deferred income taxes

Loss on early retirement of debt

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 non-current assets and liabilities

2 unchanged sentences

Acquisitions, net of cash acquired

Purchases of property and equipment

Purchases of property and equipment and proceeds of sale property and equipment

Purchases of other long-term assets

5 unchanged sentences

Repayments of revolving credit agreements

Repayments of long-term debt obligations

Net borrowings (repayments) from short-term debt obligations

Proceeds from long-term debt obligations

Debt issuance costs

4 unchanged sentences

Cash and cash equivalents and restricted cash at end of period

EURONET WORLDWIDE, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

Year Ended December 31,

Supplemental Cash Flow Disclosures:

9 unchanged sentences

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

Euronet is a leading electronic payments provider.

Euronet is a leading financial technology solutions and payments provider.

Euronet offers payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers.

80 unchanged sentences

Convertible notes

The Company accounts for its convertible debt instruments that may be settled in cash upon conversion in accordance with ASC Topic 470, Debt ("ASC 470"), which requires the proceeds from the issuance of such convertible debt instruments to be allocated between debt and equity components so that debt is discounted to reflect the Company's nonconvertible debt borrowing rate.

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.

In August 2020, the Financial Accounting Standards Board ("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.

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.

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

53 unchanged sentences

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

The increase in the deferred revenue balance for the year ended December 31, 2021 is primarily driven by $ 58.2 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, partially offset by $ 54.5 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.

The decrease in the deferred revenue balance for the year ended December 31, 2022 was primarily driven by $ 44.3 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, partially offset by $ 55.5 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2021.

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

19 unchanged sentences

North America

Recently issued accounting pronouncements

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.

We plan to adopt the new standard during the first quarter of 2022 using the modified retrospective approach and expect to record 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.

(4) Settlement Assets and Obligations

3 unchanged sentences

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.

The Company uses its cash and cash equivalents to pay the face value of the the payment service product upon presentation by the recipient.

The Company uses its 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 the Company within two weeks after initial receipt by the business partner.

28 unchanged sentences

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

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

Diluted earnings per share has been computed by dividing diluted earnings by the weighted average shares outstanding during the respective period, after adjusting for the potential dilution of options to purchase the Company's Common Stock, assumed vesting of restricted stock and the assumed conversion of the Company's convertible debt.

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

Year Ended December 31,

Computation of diluted earnings:

Net income (loss)

Interest expense from assumed conversion of convertible n otes, n et of tax

Net income (loss) for diluted earnings per share calculation

Computation of diluted weighted average shares outstanding:

1 unchanged sentence

Incremental shares from assumed exercise of stock options and vesting of restricted stock

Incremental shares from assumed conversion of convertible debt

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 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, 2021, 2020 and 2019 of approximately 1,668,000 , 2,073,000 and 380,000 , respectively.

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.

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

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

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

The 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, 2021, 2020 and 2019 .

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

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

The calculation of diluted earnings per share excludes stock options or shares of restricted stock that are anti-dilutive to the C ompany's weighted average common shares outstanding for the yea rs end ed December 31, 2022 , 2021 and 2020 of approximate ly 1,975,000 , 1,668,000 and 2,073,000 , 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.

Therefore, our 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 of $ 188.73 per share.

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

Share repurchases

The Company's Board of Directors had authorized a stock repurchase program allowing Euronet to repurchase up to $ 375 million in value or 10.0 million shares of 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 shares of common stock through February 28, 2022.

On December 8, 2021, the Company 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.

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

For the years ended December 31, 2021, 2020 and 2019 the Company repurchased $ 227.8 million, $ 239.8 million, and $ 70.9 million , respectively, in value of Euronet common stock under the repurchase programs.

For the year ended December 31, 2022 , t he Company repurchased 1.6 million shares under the repurchase program at a weighted average purchase price of $ 106.71 for a total value of $ 175.0 million.

Repurchases under the program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10 b 5 - 1 plan.

On September 13, 2022, the Company put a repurchase program in place to repurchase up to $ 350 million in value, but not more than 7.0 million shares of common stock through September 13, 2024.

Repurchases under the program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10 b 5 - 1 plan.

Preferred Stock

The Company has the authority to issue up to 10 million shares of preferred stock, of which no shares are currently issued or outstanding.

The Company has the authority t o iss u e up to 10 million shares of preferred stock, of whi ch no share s are currently issued or outstanding.

Accumulated other comprehensive loss

As of December 31, 2022 and 2021 , accumulated other comprehensive loss consists entirely of foreign currency translation adjustments.

The Company recorded a foreign currency translation loss of $ 78.5 million, a gain of $ 70.8 million and a loss of $ 13.9 million for the years ended December 31, 2021 , 2020 , and 2019 , respectively.

The Company recorded a foreign currency translation loss of $ 78.4 million, a loss of $ 78.5 million and a gain of $ 70.8 million for the years ended December 31, 2022 , 2021 , and 2020 , respectively.

There were no reclassifications of foreign currency translation into the Consolidated Statements of Operations for the years ended December 31, 2022 , 2021 , and 2020 .

5 unchanged sentences

For certain large acquisitions, management engages an appraiser to assist in the valuation process.

Pending Acquisitions

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 the first half of 2022 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.

2019 Acquisitions

On November 30, 2019, the Company completed the acquisition of a North American based ATM operator with approximately 1,800 ATMs.

The purchase price was $ 92.5 million in cash.

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.

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 € 317.8 million, or approximately $ 350.6 million, which includes $ 331 million cash paid at closing, $ 4.4 million cash paid for surplus working capital and $ 15.2 million of estimated contingent consideration for a ten -year earn out 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 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 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.

The following table presents the final fair value that was allocated to PBMA's Euronet Merchant Services' (EMS) assets and liabilities based upon fair values as determined by the Company.

The valuation process to determine the fair values is complete.

For the year ended December 31, 2022, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the effective time of the acquisition.

These adjustments primarily included an adjustment to the accrued expenses and other current liabilities related to the surplus working capital of $ 4.4 million and some other immaterial adjustments.

(in thousands)

As of November 30, 2019

Cash and cash equivalents

Trade accounts receivable

As of March 15, 2022

Other current assets

Settlement assets

Property and equipment

2 unchanged sentences

Trade accounts payable

Settlement liabilities

Accrued expenses and other current liabilities

Deferred revenue

Other long-term liabilities

Total liabilities assumed

Net assets acquired

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.

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 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 value of $ 212.7 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.

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

The results of PBMA operations are included in our consolidated results of operation, as part of our EFT Processing business segment, beginning on March 16, 2022.

For the period beginning on the acquisition date through December 31, 2022, PBMA had $ 88.8 million in revenue.

The PBMA business is impacted by higher transaction volumes during the tourism season in the second and third quarters.

The Company completed one additional acquisition in 2022 for immaterial amounts.

(7) Restricted Cash

39 unchanged sentences

Increases (decreases):

Acquisitions (see footnote 6)

Other (primarily changes in foreign currency exchange rates)

1 unchanged sentence

Increases (decreases):

Acquisitions (see footnote 6 )

Other (primarily changes in foreign currency exchange rates)

Balance as of December 31, 2022

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 of 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.

Of the total goodwill balance of $ 828.3 million as of December 31, 2022 , $ 383.7 million relates to the Money Transfer Segment, $ 123.1 million relates to the epay Segment and the remaining $ 321.5 million relates to the EFT Processing Segment.

4 unchanged sentences

As of December 31,

(in thousands)

(in thou san ds)

Accrued expenses

Other tax payables

Derivative liabilities

16 unchanged sentences

Long-term debt obligations

As of December 31, 2021 , aggregate annual maturities of long-term debt are $ 0.8 million in 2022, $ 283.5 million due in 2023 , no maturities in 2024, $ 468.2 million due in 2025, and $ 682.1 million thereafter.

As of December 31, 2022 , aggregate annual maturities of long-term debt are $ 0.1 million in 2023, no maturities in 2024 , $ 525 million due in 2025, $ 642.1 million due in 2026, and $ 454.8 million thereafter.

This maturity schedule reflects the revolving credit facility maturing in 2024 and the Convertible Notes maturing in 2025, coinciding with the terms of the initial put option by holders of the Convertible Notes.

1 unchanged sentence

Credit Facility

On October 17, 2018, the Company entered into an unsecured revolving credit agreement (the "Credit Facility") for $ 1.0 billion that expires on October 17, 2023.

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

The 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 weighted average interest rate of the Company's borrowings under the Credit Facility wa s 1.2 % as of December 31, 2021 .

On October 24, 2022, the Company amended its revolving credit agreement (the “Credit Facility”) to increase the facility from $ 1.03 billion to $ 1.25 billion and to extend the expiration to October 24, 2027 .

The revolving credit facility contains a sublimit of up to $ 250 million , with $ 150 million committed, for the issuance of letters of credit, a $ 75 million sublimit for U.S.

dollar swingline loans and a $ 75 million sublimit for swingline loans in euros or British pounds sterling.

The Credit Facility allows for borrowings in British pounds sterling, euro and U.S.

Subject to certain conditions, the Company has the option to increase the Credit Facility by up to an additional $ 500 million by requesting additional commitments from existing or new lenders.

Fees and interest on borrowings vary based upon the Company's corporate credit rating and will be based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over a secured overnight financing rate, as defined in the agreement, with a margin, including the facility fee, ranging from 1.00 % to 1.625 % or the base rate, as selected by the Company.

The applicable margin for borrowings under the credit facility, based on the Company's current credit rating is initially 1.25 % including the facility fee.

The agreement contains customary affirmative and negative covenants, events of default and financial covenants, including (all as defined in the Credit Facility):

(i) a Consolidated Total Leverage Ratio, depending on certain circumstances defined in the Credit Facility, not to exceed a range between 3.5 to 1.0 and 4.5 to 1.0;

and (ii) a Consolidated Interest Coverage Ratio of not less than 3.0 to 1.0.

Subject to meeting certain customary covenants (as defined in the Credit Facility), the Company is permitted to repurchase common stock and debt.

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

The interest rate of the Company's borrowings under the Credit Facility wa s 5.5 % as of December 31, 2022 .

As of December 31, 2022 and 2021, the Company had stand-by letters of credit/bank guarantees outstanding under the Credit Facility of $ 54.6 million and $ 57.3 million , respectively.

2 unchanged sentences

Borrowing capacity under the Credit Facility as of December 31, 2022 was $ 740.6 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;

(ii) as of the end of each fiscal quarter ended on June 30, a Consolidated Total Leverage Ratio (as defined in the Credit Facility) not to be greater than 4.0 to 1.0;

provided that, not more than two times prior to the expiration date, that a Material Acquisition has been consummated, for any period of four consecutive fiscal quarters following such Material Acquisition, the Consolidated Total Leverage Ratio will be not greater than 4.0 to 1.0 for fiscal quarters ended on March 31, September 30 and December 31 and not greater than 4.5 to 1.0 for fiscal quarters ended on June 30;

provided, further, that following such four consecutive fiscal quarters for which the maximum Consolidated Total Leverage Ratio is increased, the maximum Consolidated Total Leverage Ratio shall revert to the levels set forth in clauses (i) and (ii) above for not fewer than two fiscal quarters before a subsequent Increase Notice is delivered to the syndicate of financial institutions;

and (iii) a Consolidated Interest Coverage Ratio (as defined in the Credit Facility) not less than 4.0 to 1.0.

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, 2021.

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.

On May 25, 2022, the Company entered into an Uncommitted Credit Agreement for $ 300 million, for the sole purpose of providing vault cash for ATMs , that expired on November 30, 2022.

The loan was fully repaid and there was no balance at December 31, 2022.

The loan bears interest at the rate per annum equal to the secured overnight financing rate (“SOFR”) plus 1.00 %.

The weighted-average interest rate from the loan inception date to December 31, 2022 was 3.14 %.

On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $ 150 million, for the sole purpose of providing vault cash for ATMs, that expires no later than June 23, 2023.

The loan was fully repaid and there was no balance at December 31, 2022.

The loan was either a Prime rate loan, a Bloomberg Short-term Bank Yield rate loan or bears interest at the rate agreed to by the bank and the Company at the time such loan is made.

The weighted average interest rate from the loan inception date to December 31, 2022 was 2.76 %.

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 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.

The Company may redeem for cash all or any portion of the Convertible Notes, at its option, (i) 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.

No sinking fund is provided for the Convertible Notes.

1 unchanged sentence

As of December 31, 2022 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.

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

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

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 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.

The Company elected to settle the conversion of such Retired Convertible Notes through a combination of cash and stock.

The Company paid cash equal to $ 1,000 for each $ 1,000 principal amount of Retired Convertible Notes submitted for conversion and satisfied the remainder of the conversion obligation by issuing shares of the Company's Common Stock valued at $ 147.24 per share.

As a result, the Company paid cash of $ 352.4 million and issued approximately 2.5 million shares of its Common Stock.

In accordance with ASC 470, the Company recognized a loss of $ 9.8 million on the conversion and redemption for the year ended December 31, 2019, representing the difference between the fair value of the Retired Convertible Notes converted and the carrying value of the bonds at the time of conversion.

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 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, $ 3.9 million, and $ 3.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Accretion expense was $ 16.0 million, $ 15.3 million and $ 11.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.

On January 1, 2022, the Company adopted 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.

ASU 2020-06 amended the accounting for convertible instruments with ASC Topic 470 Debt (See Footnote 3 for the accounting impact of adopting ASU 220-06).

Contractual interest expense for the Convertible Notes was $ 3.9 million, $ 3.9 million, and $ 3.9 million for the years ended December 31, 2022, 2021 and 2020.

Accretion expense was $ 16.0 million and $ 15.3 million for the years ended December 31, 2021 and 2020.

Accretion expense is no longer applicable for 2022 due to adoption of standard 2020-06.

The effective interest rate was 4.4 % for the year ended December 31, 2022.

As of December 31, 2021, the unamortized discount was $ 56.8 million and will be amortized through March 2025 .

1.375 % Senior Notes due 2026

35 unchanged sentences

The aggregate equivalent U.S.

dollar notional amounts of foreign currency derivative customer contracts held by the Company in its xe operations as of December 31, 2021 and 2020, was approximately $ 1.0 billion and $ 1.3 billion, respectively.

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

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

81 unchanged sentences

Present value of lease liabilities

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

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

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

3 unchanged sentences

Year ended December 31,2021

Year e nde d December 31,2020

Operating lease expense

6 unchanged sentences

As of December 31,2022

As of December 31,2021

Weighted- average remaining lease term (years)

4 unchanged sentences

Year ended December 31, 2021

Year ended December 31, 2020

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

33 unchanged sentences

GILTI, net of tax credits

Tax Reform - transition tax and rate change

Total income tax expense

Effective tax rate

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

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

Tax Reform, the Company elected to claim U.S.

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

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

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

7 unchanged sentences

Goodwill and intangible amortization

C ontract costs

Contract costs

Intercompany notes

2 unchanged sentences

Foreign exchange

Gross deferred tax assets

Total deferred tax assets

Valuation allowance

Net deferred tax assets

Total deferred tax assets, net of valuation allowance

Deferred tax liabilities:

17 unchanged sentences

foreign tax credit carryforwards of $ 59.8 million which are largely not expected to be utilized in future periods.

As of December 31, 2021, the Company had 100 U.S.

foreign tax credit carryforwards of $ 61.6 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.

6 unchanged sentences

In addition, the Company's state tax net operating loss carryforwards of $97.7 million will expire periodically from 2023 through 2042 , U.S.

foreign tax credit carryforwards of $ 61.6 million that will expire periodically from 2022 through 2030 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 global intangible low-taxed income, or 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.

foreign tax credit carryforwards of $59.8 million will expire periodically from 2023 through 2032 and U.S.

federal research and expenditure credit carryforwards of $3.8 million will expire periodically from 2034 through 2041.

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.

Gross undistributed earnings reinvested indefinitely in foreign subsidiaries aggregated approximately $ 2,063.1 million as of December 31, 2022.

62 unchanged sentences

0.50 % to 1.21

0.31 % to 1.17

Dividend yield

1 unchanged sentence

Expected lives

Weighted-average fair value (per share)

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

During 2021, the Company granted approximately 331,000 options that were valued using a Monte Carlo simulation (not included in the table above).

Weighted-average fair value (per option)

During 2022, the Company granted approximately 411,648 options, which vest evenly over a four year term upon the achievement of a 10 % increase over the share price on the date of grant for 30 consecutive days.

Options were valued using a Monte Carlo simulation (not included in the table above).

The Monte Carlo simulation calculated a fair value per option of $ 36.70 using the following assumptions:

volatility of 42.5 %, risk-free interest rate of 3.8 %, and a term of 4.6 years.

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

During 2021, the Company granted approximately 331,000 options, which vest evenly over a four year term upon the achievement of a 10 % increase over the share price on the date of grant for 30 consecutive days.

Options were valued using a Monte Carlo simulation (not included in the table above).

The Monte Carlo simulation calculated a fair value per option of $ 40.30 using the following assumptions:

volatility of 40.0 %, risk-free interest rate of 1.19 %, and a term of 4.5 years.

During 2020, the Company granted 1,350,000 options, which vests each year starting in February 2023 upon the achievement of a 15 % increase in the share price on the date of the grant for 30 consecutive days and a 10 % increase in adjusted earnings per share Options 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

1 unchanged sentence

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.

The Company records related expense for these awards that have performance-based conditions over the vesting period when the achievement of the award is probable of occurrence.

Summary restricted stock activity is presented in the table below:

3 unchanged sentences

Nonvested at December 31, 2022

The fair value of shares vested in the years ended December 31, 2021, 2020 and 2019 was $ 13.8 million, $ 15.4 million and $ 16.6 million, respectively.

As of December 31, 2021, there was $ 17.3 million of total unrecognized compensation cost related to unvested time-based restricted stock, which is expected to be recognized over a weighted-average period of 3.0 years.

T he fair value of shares vested in the y ears ended December 31, 2022, 2021 and 2020 was $ 9.3 million, $ 13.8 million and $ 15.4 million, respectively.

As o f December 31, 2022, there was $ 16.8 million of total unrecognized compensation cost related to unvested time-based restrict ed stock, which is expected to be recognized over a weighted-average period of 2.87 years.

As of December 31, 2022, there was $ 26.3 million of total unrecognized compensation costs related to unvested performance-based restricted stock, which is expected to be recognized based on Company performance over a weighted-average period of 2.0 years.

15 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.

The following tables present the Company's reportable segment results for the years ended December 31, 2021, 2020 and 2019:

The following tables present the Company's results for the years ended December 31, 2022, 2021 and 2020:

For the Year Ended December 31, 2022

5 unchanged sentences

Operating expenses:

Direct operating costs

Acquired contract cost impairment

Direct operat ing cos ts

Salaries and benefits

19 unchanged sentences

Direct operating costs

Acquired contract cost impairment

Salaries and benefits

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Selling, general and admin istrative

Depreciation and amortization

19 unchanged sentences

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Depreciation and amortization

52 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 va rious intervals of less than one year.

The carrying values of the Company's revolving credit agreements approximate fair values because interest is based on SOFR 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).

35 unchanged sentences

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