What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-22 · 155 added, 150 removed, 1011 unchanged (23% of the section changed)

17 unchanged sentences

(9) Goodwill and Acquired Intangible Assets, Net

(10) Convertible Notes Receivable

(11) Accrued Expenses and Other Current Liabilities

1 unchanged sentence

(13) Derivative Instruments and Hedging Activities

(13) Leases 84

(15) Income Taxes

13 unchanged sentences

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission .

I n o ur opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 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

21 unchanged sentences

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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

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

Sufficiency of audit evidence over revenue

1 unchanged sentence

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

The services were provided to customers in approximately 200 countries through 66 different business offices in 43 countries within 3 different reportable operating segments.

The services were provided to customers in approximately 200 countries through 67 worldwide offices within 3 different reportable operating segments.

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

8 unchanged sentences

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

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

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

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

4 unchanged sentences

AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(in millions, except share and per share data)

Current assets:

9 unchanged sentences

Other assets, net of accumulated amortization of $ 76.3 and $ 68.0

Convertible notes re ceiv able

LIABILITIES AND EQUITY

32 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(in millions, except share and per share data)

Year Ended December 31,

4 unchanged sentences

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Depreciation and amortization

4 unchanged sentences

Interest expense

Foreign currency exchange (loss) gain, net

Other gains (losses), net

Foreign currency exchange gain (loss), net

Other gains, net

Other expense, net

1 unchanged sentence

Income tax expense

Net income (loss)

Net loss (income) attributable to noncontrolling interests

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

Earnings (loss) per share attributable to Euronet Worldwide, Inc.

Net loss attributable to noncontrolling interests

Net income attributable to Euronet Worldwide, Inc.

Earnings per share attributable to Euronet Worldwide, Inc.

stockholders:

4 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

(in millions)

Year Ended December 31,

Net incom e (loss)

Other comprehensive (loss) income

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except share data)

(in millions, except share data)

Number of Shares

2 unchanged sentences

Net income (loss)

Other comprehensive income

Other comprehensive loss

Stock issued under employee stock plans

2 unchanged sentences

Balance as of December 31, 2021

Net (loss) income

Other comprehensive loss

Net income (loss)

Other comprehensive (loss) income

Adoption of ASU-2020-60 on Convertible bond

Stock issued under employee stock plans

3 unchanged sentences

Net income (loss)

Other comprehensive loss

Adoption of ASU-2020-60 on Convertible bond

Other compreh ensive (los s) income

Stock issued under employee stock plans

6 unchanged sentences

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

(in thousands)

(in millions)

Retained Earnings

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Net income (loss)

Other comprehensive income

Other comprehensive loss

Stock issued under employee s toc k plans

2 unchanged sentences

Balance as of December 31, 2021

Net (loss) income

Other comprehensive loss

Net income (loss)

Other comprehensive (loss) income

Adoption of ASU-2020-06 on Convertible bond

Stock issued under employee stock plans

3 unchanged sentences

Net income (loss)

Other comprehensive loss

Adoption of ASU-2020-06 on Convertible bond

Other comprehensive (loss) income

Stock issued under employee stock plans

6 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(in millions)

Year Ended December 31,

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

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

Depreciation and amortization

Share-based compensation

Unrealized foreign exchange loss (gain), net

Non-cash impairment of goodwill and acquired intangible assets

Unrealized foreign exchange (gain) loss, net

Deferred income taxes

12 unchanged sentences

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

Issuance of Convertible Notes Receivable

Purchases of other long-term assets

5 unchanged sentences

Repayments of revolving credit agreements

Net borrowings (repayments) from short-term debt obligations

Net (repayments) borrowings fro m short- term debt obligations

Debt issuance costs

Net cash (used in) provided by financing activities

Net cash used in financing activities

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

(Decrease) increase in cash and cash equivalents and restricted cash

Increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

94 unchanged sentences

Convertible notes

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.

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.

59 unchanged sentences

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

The decrease in the deferred revenue balance for the year ended December 31, 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.

The decrease in the deferred revenue balance for the year ended December 31, 2023 was primarily driven by $ 32.9 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, offset by $ 41.6 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2022 .

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

5 unchanged sentences

For the Year Ended December 31, 2023

(in thousands)

(in millions)

EFT Processing

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For the Year Ended December 31, 2022

(in thousands)

(in millions)

EFT Processing

2 unchanged sentences

For the Year Ended December 31, 2021

(in thousands)

(in millions)

EFT Processing

1 unchanged sentence

North America

Recent accounting guidance

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023 - 07 , Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures .

The amended guidance requires incremental reportable segment disclosures, primarily about significant segment expenses.

The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures.

The amendments will be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted.

T he Company is currently evaluating the impact of adopting ASU 2023-07.

In December 2023, the FASB issued ASU 2023 - 09 , Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures .

The amended guidance enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information.

This guidance requires disclosure of specific categories in the effective tax rate reconciliation and further information on reconciling items meeting a quantitative threshold.

In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes.

It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received).

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

T he Company is currently evaluating the impact of adopting ASU 2023-09.

(4) Settlement Assets and Obligations

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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.

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

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

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

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

(in thousands)

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

(in millions)

As of December 31, 2023

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The table below reconciles cash and cash equivalents, restricted cash, ATM cash, settlement cash and cash equivalents, and settlement restricted cash as presented within "Cash and cash equivalents and restricted cash" in the Consolidated Statement of Cash Flows.

(in thousands)

(in millions)

Cash and cash equivalents

10 unchanged sentences

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

Net income attributable to Euronet Worldwide, Inc.

Interest expense from assumed conversion of convertible notes, net of tax

Net income for diluted earnings per share calculation

Computation of diluted weighted average shares outstanding:

3 unchanged sentences

Diluted weighted average shares outstanding

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.

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, 2023 , 2022 and 2021 of approximate ly 3,768,000 , 1,975,000 and 1,668,000 , respectively.

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

7 unchanged sentences

On December 8, 2021, the Company put a repurchase program in place to repurchase up to $ 300.0 million in value, but not more than 5.0 million shares of common stock through December 8, 2023.

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.

For the year ended December 31, 2023, t he Company repurchased 1,400,229 shares under the repurchase program at a weighted average purchase price of $ 89.31 for a total value of $ 125.0 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 $ 350.0 million in value, but not more than 7.0 million shares of common stock through September 13, 2024.

For the year ended December 31, 2023, t he Company repurchased 2,936,667 shares under the repurchase program at a weighted average purchase price of $ 86.27 for a total value of $ 253.4 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 10b5-1 plan.

On September 13, 2023, the Company put a repurchase program in place to repurchase up to $ 350.0 million in value, but not more than 7.0 million shares of common stock through September 13, 2025.

For the year ended December 31, 2023 we have not made any repurchases under this plan.

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.

The Inflation Reduction Act (IRA) was signed into law in August 2022.

Among other things, it imposes a 1 % excise tax on net share repurchases.

Preferred Stock

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 $ 78.4 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.

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

Accumulated other comprehensive gain (loss)

As of December 31, 2023 and 2022 , accumulated other comprehensive gain (loss) consists entirely of foreign currency translation adjustments.

The Company recorded a foreign currency translation gain of $ 47.9 million, a loss of $ 78.3 million and a loss of $ 78.5 million for the years ended December 31, 2023 , 2022 , and 2021 , respectively.

There were no reclassifications of foreign currency translation into the Consolidated Statements of Operations for the years ended December 31, 2023 , 2022 , and 2021 .

1 unchanged sentence

(6) Acquisitions

Acquisitions 2023

The Company completed one acquisition in 2023 for an immaterial amount.

Acquisitions 2022

In accordance with ASC 805 , the Company allocates the purchase price of its acquisitions to the tangible assets, liabilities and intangible assets acquired based on fair values.

13 unchanged sentences

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)

(in millions)

As of March 15, 2022

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

For 2023 , PBMA had $ 130.2 million in revenue.

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

3 unchanged sentences

As of December 31,

(in thousands)

Cash held in trust and/or cash held on behalf of others

(in millions)

Collateral on bank credit arrangements and other

Restricted cash

9 unchanged sentences

As of December 31,

(in thousands)

(in millions)

POS terminals

3 unchanged sentences

Less accumulated depreciation

Depreciation expense related to property and equipment, including property and equipment recorded under finance leases, for the years ended December 31, 2022, 2021 and 2020 was $ 101.5 million, $ 104.7 million and $ 96.1 million, respectively.

Depreciation expenses related to property and equipment, including property and equipment recorded under finance leases, for the years ended December 31, 2023 , 2022 and 2021 was $ 100.8 million, $ 101.5 million, and $ 104.7 million, respectively.

( 9 ) Goodwill and Acquired Intangible Assets, Net

2 unchanged sentences

As of December 31, 2022

(in thousands)

(in millions)

Gross Carrying Amount

6 unchanged sentences

The following table summarizes the goodwill and amortizable intangible assets activity for the years ended December 31, 2023 and 2022 :

(in thousands)

(in millions)

Acquired Intangible Assets

2 unchanged sentences

Increases (decreases):

Acquisitions (see footnote 6 )

Other (primarily changes in foreign currency exchange rates)

6 unchanged sentences

Amortization expense for intangible assets with finite lives was $ 24.5 million , $ 27.0 million, and $ 23.1 million for the years ended December 31, 2023 , 2022 and 2021 , respectively.

Estimated annual amortization expense on intangible assets with finite lives as of December 31, 2022 , is expected to total $ 24.1 million for 2023 , $ 17.8 million for 2024, $ 14.6 million for 2025, $ 14.3 million for 2026, and $ 13.0 million for 2027 .

Estimated annual amortization expense on intangible assets with finite lives as of December 31, 2023 , is expected to be $ 18.2 million for 2024 , $ 14.6 million for 2025 , $ 14.3 million for 2026 , $ 13.0 million for 2027 , and $ 12.6 million for 2028.

( 10 ) Convertible Notes Receivable

The Company loaned a total of $ 60.0 million to Koin Mobile, LLC and Marker Trax, LLC under two promissory notes (the "Notes"), which were fully executed on October 19, 2023.

Under the terms of the Notes, interest will accrue on the Notes at 2 % per annum and all unpaid principal and interest will be due and payable on October 18, 2028 if not converted earlier as discussed below.

The Company has a security interest in all of the assets of Koin Mobile, LLC and Marker Trax, LLC.

The outstanding principal and accrued interest were $ 60.0 million and $ 0.2 million at December 31, 2023, respectively.

The Notes are convertible into preferred equity of Koin Mobile, LLC and Marker Trax, LLC at the option of the Company upon the occurrence of certain events including a qualified equity financing, change in control, achievement of profitability or at the option of the Company at maturity, as defined in the Notes.

(11) Accrued Expenses and Other Current Liabilities

1 unchanged sentence

As of December 31,

(in thou san ds)

(in millions)

Accrued expenses

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As of December 31,

(in thousands)

(in millions)

Credit Facility:

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1.375 % Senior Notes, due 2026

Uncommitted credit a greeme nt

Other obligations

4 unchanged sentences

Long-term debt obligations

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.

As of December 31, 2023 , aggregate annual maturities of long-term debt are $ 0 million due in 2024 , $ 525.0 million due in 2025 , $ 662.2 million due in 2026 , and $ 536.9 million thereafter.

This maturity schedule reflects the revolving credit facility maturing in 2027 and the Convertible Notes maturing in 2025 , coinciding with the terms of the initial put option by holders of the Convertible Notes.

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Borrowing capacity under the Credit Facility as of December 31, 2023 was $ 661.2 million.

Uncommitted Line of Credit

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.

Uncommitted Credit Agreements

On June 27, 2023, 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, 2023 .

The loan was fully repaid and there was no balance at December 31, 2023.

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

The loan bore interest at the rate per annum equal to the secured overnight financing rate (“SOFR”) plus 1.125 %.

The weighted-average interest rate from the loan inception date to November 30, 2023 was 6.37 %.

On June 26, 2023, the Company entered into an Uncommitted Loan Agreement for $ 150 million, fully drawn and outstanding at December 31, 2023, for the sole purpose of providing vault cash for ATMs, that expires no later than June 21, 2024 .

The loan is either a Prime rate loan, a Bloomberg Short-term Bank Yield ("BSBY") rate loan plus 0.95 % 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, 2023 was 6.29 %.

On May 25, 2022, the Company entered into an Uncommitted Credit Agreement for $ 300.0 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 bore 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 November 30, 2022 was 3.14 %.

On June 24, 2022, the Company entered into an Uncommitted Loan Agreement for $ 150.0 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 %.

The loan was either a Prime rate loan, a Bloomberg Short-term Bank Yield rate loan or bore 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 the day of repayment (September 28, 2022) was 2.76 %.

Convertible Debt

9 unchanged sentences

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.

Contractual interest expenses for the Convertible Notes was $ 3.9 million for each of the years ended December 31, 2023 , 2022 and 2021 .

The effective interest rate was 4.4 % for the year ended December 31, 2023.

8 unchanged sentences

As of December 31, 2023 and 2022 , borrowings under these arrangements were $ 0.3 million and $ 0.2 million, respectively.

As of December 31, 2022, there was $ 0.1 million due in 2023 under these other obligation arrangements.

(13) Derivative Instruments and Hedging Activities

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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, 2022 and 2021, was approximately $ 1.0 billion.

dollar notional amounts of foreign currency derivative customer contracts held by the Company in its xe operations as of December 31, 2023 and 2022 , was respectively $ 1.1 billion and $ 1.0 billion .

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

3 unchanged sentences

Liability Derivatives

(in thousands)

(in millions)

Balance Sheet Location

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Balance Sheet Presentation

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

The following tables summarize the gross and net fair value of derivative assets and liabilities as of December 31, 2023 and 2022 (in millions):

Offsetting of Derivative Assets

Gross Amounts Not Offset in the Consolidated Balance Sheet

As of December 31, 2023

2 unchanged sentences

Net Amounts Presented in the Consolidated Balance Sheet

Financial Instruments

Cash Collateral Received

Derivatives Not Offset in the Consolidated Balance Sheet

Derivatives subject to a master netting arrangement or similar agreement

2 unchanged sentences

Offsetting of Derivative Liabilities

Gross Amounts Not Offset in the Consolidated Balance Sheet

As of December 31, 2023

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Net Amounts Presented in the Consolidated Balance Sheet

Financial Instruments

Cash Collateral Paid

Derivatives Not Offset in the Consolidated Balance Sheet

Derivatives subject to a master netting arrangement or similar agreement

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Year Ended December 31,

(in thousands)

(in millions)

Foreign currency exchange contracts - Ria Operations

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

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

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

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

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

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

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

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

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

This reassessment conclusion impacted the lease term evaluation, instead of determining the lease term based on the stated lease payment schedule of the lease, the lease term was evaluated when the Company has the contractual ability to terminate the lease (most leases allow for a termination upon advance notice of between 30 and 90 days), which impacted the amounts recorded as right of use assets and lease liability balances.

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

Leases of ATM sites with termination options exercisable within the next 12 months are excluded from the right of use lease assets and lease liability under the short-term lease exemption as the termination options are not reasonably certain not to be exercised.

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

The short-term lease expense for 2022 reasonably reflects the Company’s short-term lease commitments.

T he short-term lease expense for 2023 reasonably ref lects the Company’s short-term lease commitments.

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

4 unchanged sentences

As of December 31, 2023

Maturity of Lease Liabilities (in thousands)

Maturity of Lease Liabilities (in millions)

Operating Leases ( 1 )

2 unchanged sentences

Present value of lease liabilities

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

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

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

Lease Expense (in thousands)

Lease Expense (in millions)

Income Statement Classification

4 unchanged sentences

Selling, general and administrative and Direct operating costs

Short-term and variable lease expense

Variable lease expense

Selling, general and administrative and Direct operating costs

7 unchanged sentences

The following table presents supplemental cash flow and non-cash information related to leases:

Other Information (in thousands)

Other Information (in millions)

Year ended December 31, 2023

8 unchanged sentences

Year Ended December 31,

(in thousands)

(in millions)

Income before taxes:

3 unchanged sentences

Year Ended December 31,

(in thousands)

(in millions)

Current tax expense (benefit):

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Year Ended December 31,

(dollar amounts in thousands)

(dollar amounts in millions)

federal income tax expense at applicable statutory rate

9 unchanged sentences

Change in federal and foreign valuation allowance

Impairment of goodwill and acquired intangibles assets

GILTI, net of tax credits

4 unchanged sentences

As of December 31,

(in thousands)

(in millions)

Deferred tax assets:

9 unchanged sentences

Foreign exchange

Capitalized research and development

Total deferred tax assets

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Net deferred tax liabilities

Net deferred tax assets of $ 24.0 million and $ 36.8 million as of December 31, 2022 and 2021, respectively, are recorded within "Other assets" on the Consolidated Balance Sheet.

Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 31, 2023 are expected to be allocated to income taxes in the Consolidated Statements of Operations.

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As of December 31, 2023 , the Company had foreign tax net operating loss carryforwards of $ 247.4 million, which will expire as follows:

(in thousands)

(in millions)

Year ending December 31,

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Year Ended December 31,

(in thousands)

(in millions)

Beginning balance

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Year Ended December 31,

(in thousands)

(in millions)

Beginning balance-credit losses

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Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (thousands)

Aggregate Intrinsic Value (millions)

Balance at December 31, 2022 ( 1,466,983 shares exercisable)

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As of December 31, 2023 , unrecognized compensation expense related to nonvested stock options that are expected to vest totaled $ 45.1 million and wi ll be recognized over the next 4 years, with an overall weighted-average period of 3.1 years.

The following table provides the fair value of options granted under the SCP during 2022 , 2021 and 2020 , together with a description of the assumptions used to calculate the fair value using the Black-Scholes-Merton option-pricing model:

The following table provides the fair value of options granted under the SCP during 2023 , 2022 and 2021 , together with a description of the assumptions used to calculate the fair value using the Black-Scholes-Merton option-pricing model or Monte Carlo simulation model:

Year ended December 31,

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0.50 % to 1.21

0.31 % to 1.17

Dividend yield

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Weighted-average fair value (per option)

During 2023 , the Company granted 596,127 options, which vest evenly over a five year term upon the achievement of a 10 % increase over the share price on the date of grant for 30 consecutive days.

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 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

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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.

The Company records related expenses 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:

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

2) T hrough the epay Segment, the Company provides distribution, processing and collection services for prepaid mobile airtime and other electronic payment products in Europe, the Middle East, Asia Pacific, the U.S.

and South America.

2 ) T hrough the epay Segment, the Company provides distribution, processing and collection services for prepaid mobile airtime and other electronic payment products in Europe, the Middle East, Asia Pacific, the U.S., and South America.

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

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For the Year Ended December 31, 2023

(in thousands)

(in millions)

EFT Processing

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Operating expenses:

Direct operat ing cos ts

Direct operating costs

Salaries and benefits

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Interest expense

Foreign currency exchange loss, net

Foreign currency exchange gain, net

Other gains, net

3 unchanged sentences

For the Year Ended December 31, 2022

(in thousands)

(in millions)

EFT Processing

4 unchanged sentences

Direct operating costs

Acquired contract cost impairment

Salaries and benefits

Selling, general and admin istrative

Selling, general and administrative

Depreciation and amortization

4 unchanged sentences

Interest expense

Foreign currency exchange gain, net

Foreign currency exchange loss, net

Other gains, net

3 unchanged sentences

For the Year Ended December 31, 2021

(in thousands)

(in millions)

EFT Processing

4 unchanged sentences

Direct operating costs

Acquired contract cost impairment

Salaries and benefits

Selling, general and administrative

Goodwill and acquired intangible assets impairment

Depreciation and amortization

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as of December 31,

(in thousands)

(in millions)

United States

1 unchanged sentence

Total foreign

Revenues are attributed to countries based on location of the customer, with the exception of software sales made by the Company's software subsidiary, which are attributed to the U.S.

(19) Financial Instruments and Fair Value Measurements

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The epay Segment's customer base is diverse and includes several major retailers and/or distributors in markets that they operate.

The Money Transfer Segment trade accounts receivable are primarily due from independent agents that collect cash from customers on the Company's behalf and generally remit the cash within one week.

The Money Transfer Segment trade accounts receivable is primarily due from independent agents that collect cash from customers on the Company's behalf and generally remit the cash within one week.

The Company performs ongoing evaluations of its customers' financial condition and limits the amount of credit extended, or purchases credit enhancement protection, when deemed necessary, but generally requires no collateral.

See Note 15, Valuation and Qualifying Accounts, for further disclosure.

See Note 16 , Valuation and Qualifying Accounts, to the Consolidated Financial Statements for further disclosure.

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

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As of December 31, 2023

(in thousands)

(in millions)

Balance Sheet Classification

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As of December 31, 2022

(in thousands)

(in millions)

Balance Sheet Classification

3 unchanged sentences

Other current liabilities

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 SOFR that resets at va rious intervals of less than one year.

The carrying amounts of cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt obligations are approximate fair values due to their short maturities.

The carrying amount of the convertible notes receivable approximates fair value because we issued the notes on October 18, 2023.

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

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From time to time, the Company is a party to legal and 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 upon the Consolidated Financial Statements of the Company.

Currently, there are no legal proceedings or regulatory findings that management believes, either individually or in aggregate, would have a material adverse effect upon the Consolidated Financial Statements of the Company.

In accordance with U.S.

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As of December 31, 2023 , the Company had $ 80.0 million of stand-by letters of credit/bank guarantees issued on its behalf, of which $ 3.4 million are collateralized by cash deposits held by the respective issuing banks.

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

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

As of December 31, 2023 , the Company granted off balance sheet guarantees for cash in various ATM networks amounting to $ 11.2 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $ 75.0 million over the terms of the agreements with the customers.

6 unchanged sentences

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.

In connection with contracts with certain customers the Company is responsible for losses suffered by those 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;

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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