EEFT 10Q – Euronet Worldwide, Inc. – Rapport trimestriel – 08 mai 2019

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EEFT / Euronet Worldwide, Inc. 10-Q Rapport trimestriel 10-Q


Parties de document actuelles

Document

ÉTATS UNIS

COMMISSION DE SÉCURITÉ ET D'ECHANGES

WASHINGTON, D.C. 20549

FORMULAIRE 10-Q

þ

RAPPORT TRIMESTRIEL CONFORMÉMENT À L'ARTICLE 13 OU 15 D) DE LA LOI SUR L'ÉCHANGE DE TITRES DE 1934

Pour la période trimestrielle terminée 31 mars 2019

OU

o

RAPPORT DE TRANSITION CONFORMÉMENT À L'ARTICLE 13 OU 15 D) DE LA LOI SUR L'ÉCHANGE DE TITRES DE 1934

Pour la période de transition

à

Numéro de dossier de la commission: 001-31648

EURONET WORLDWIDE, INC.

(Nom exact du titulaire tel que spécifié dans sa charte)

Delaware

74-2806888

(Etat ou autre juridiction

(Employeur I.R.S.

de constitution ou d'organisation)

Numéro d'identification.)

3500 College Boulevard

Leawood, Kansas

66211

(Adresse des principaux bureaux exécutifs)

(Code postal)

(913) 327-4200

(Numéro de téléphone du titulaire, y compris l’indicatif régional)

Indiquez par coche si l’inscrit (1) a déposé tous les rapports que l’article 13 ou 15 (d) de la Securities Exchange Act of 1934 devait produire au cours des 12 mois précédents (ou pendant une période plus courte qu’il était tenu de remplir. déposer ces rapports), et (2) est soumis à de telles exigences de dépôt depuis 90 jours. Oui þ Non o

Indiquez par coche si le déclarant a soumis par voie électronique chaque fichier de données interactif qui devait être soumis conformément à la règle 405 du règlement ST (§ 232.405 du présent chapitre) au cours des 12 derniers mois (ou pendant une période plus courte que le déclarant était tenu de remplir). soumettre ces fichiers). Oui þ Non o

Cochez si le titulaire est un grand déposant accéléré, un déposant accéléré, un déposant non accéléré, une petite société déclarante ou une société en croissance émergente. Voir les définitions de «grand déposant accéléré», de «déposant accéléré», de «petite société déclarante» et de «société à croissance émergente» dans la règle 12b-2 de la loi intitulée Exchange Act.

Grand classeur accéléré þ

Filer accéléré o

Filer non accéléré o

Petite entreprise déclarante o

Entreprise en croissance émergente o

S'il s'agit d'une société en croissance émergente, indiquez par coche si le déclarant a choisi de ne pas utiliser la période de transition prolongée pour se conformer aux normes de comptabilité financière nouvelles ou révisées fournies conformément à la section 13 (a) de la loi intitulée Exchange Act. o

Indiquez par coche si le déclarant est une société écran (au sens de la règle 12b-2 de la loi intitulée Exchange Act). Oui o Non þ

Titres inscrits en vertu de l’alinéa 12 b) de la Loi:

Titre de chaque classe

Symbole commercial

Nom de chaque échange sur lequel inscrit

Actions ordinaires

EEFT

Le marché boursier Nasdaq, LLC

(Nasdaq Global Select Market)

Sur 6 mai 2019, Euronet Worldwide, Inc. avait 51 964 031 actions ordinaires en circulation.


EURONET WORLDWIDE, INC. ET SES FILIALES

Table des matières

Page

PARTIE I – INFORMATION FINANCIÈRE

Objet 1.

États financiers (non audités)

3

Bilans consolidés aux 31 mars 2019 et 31 décembre 2018

3

États consolidés des résultats pour les trois mois terminés les 31 mars 2019 et 2018

4

États du résultat global consolidés pour les trimestres clos les 31 mars 2019 et 2018

5

États consolidés des variations des capitaux propres pour les trimestres clos les 31 mars 2019 et 2018

6

États consolidés des flux de trésorerie pour les trimestres clos les 31 mars 2019 et 2018

8

Notes aux états financiers consolidés non audités

9

Point 2

Rapport de gestion de la situation financière et des résultats d'exploitation

22

Point 3

Informations quantitatives et qualitatives sur le risque de marché

40

Point 4

Contrôles et procédures

41

PARTIE II – AUTRES INFORMATIONS

Objet 1.

Poursuite judiciaire

41

Point 1A.

Facteurs de risque

42

Point 2

Ventes non inscrites de titres de participation et utilisation du produit

42

Point 6.

Expositions

43

Des signatures

44


PARTIE I – INFORMATION FINANCIÈRE

POINT 1. ÉTATS FINANCIERS (NON VÉRIFIÉ)

EURONET WORLDWIDE, INC. ET SES FILIALES

BILANS CONSOLIDÉS

(En milliers, sauf les données sur les actions et les actions)

À partir de

31 mars,
2019

Le 31 décembre,
2018

(non vérifié)

LES ATOUTS

Actif à court terme:

Trésorerie et équivalents de trésorerie

$

1 216 297

$

1 054 357

Espèces restreintes

74 945

76 595

Créances clients, déduction faite des provisions pour créances douteuses de 24 564 $ au 31 mars 2019 et de 24 287 $ au 31 décembre 2018

715 612

693 616

Charges payées d'avance et autres actifs courants

228,675

263 019

Le total des actifs courants

2.235.529

2.087.587

Droit de bail d'exploitation actif

351,169

Immobilisations corporelles, nettes des amortissements cumulés de 381 406 $ au 31 mars 2019 et de 373 180 $ au 31 décembre 2018

303.796

291 869

Bonne volonté

704,054

704.197

Immobilisations incorporelles acquises, déduction faite de l'amortissement cumulé de 197 060 $ au 31 mars 2019 et de 190 920 $ au 31 décembre 2018

110 143

114 485

Autres actifs, déduction faite de l'amortissement cumulé de 52 514 $ au 31 mars 2019 et de 50 821 $ au 31 décembre 2018

109 362

123 017

Total des actifs

$

3 814 053

$

3 321 155

PASSIF ET ÉQUITÉ

Passif à court terme:

Comptes fournisseurs

$

408.798

$

528,913

Charges à payer et autres passifs courants

758 914

712 012

Part courante du passif des contrats de location simple

114 654

Titres de créance à court terme et échéances actuelles des titres de créance à long terme

360 358

38 017

Taxes payable sur le revenu

40 227

40.159

Revenus reportés

61 456

59 293

Total du passif à court terme

1 744 407

1 378 394

Titres de créance, nets de la tranche à court terme

412 862

589 782

Engagements de location simple, nets de la tranche à court terme

225 093

Impôts différés

82 143

57 145

Autres passifs à long terme

61 638

62 992

Responsabilités totales

2 526 143

2 088 313

Équité:

Capitaux propres d’Euronet Worldwide, Inc.:

Actions privilégiées, valeur nominale de 0,02 $. 10 000 000 d’actions autorisées; aucun émis

Actions ordinaires, valeur nominale de 0,02 $. 90 000 000 actions autorisées; 60 035 677 émis au 31 mars 2019 et 59 897 309 émis au 31 décembre 2018

1 201

1 198

Prime d'émission

1 142 691

1 104 264

Actions propres, au coût, 8 085 537 actions au 31 mars 2019 et 8 077 311 actions au 31 décembre 2018

(393,307

)

(391,551

)

Des bénéfices non répartis

704,348

669 805

Cumul des autres éléments du résultat global

(167 199)

)

(151 043

)

Capitaux propres de Total Euronet Worldwide, Inc.

1 287 734

1 232 673

Intérêts non-majoritaires

176

169

Total des capitaux propres

1 287 910

1 232 842

Total du passif et des capitaux propres

$

3 814 053

$

3 321 155

Voir les notes afférentes aux états financiers consolidés non audités.


EURONET WORLDWIDE, INC. ET SES FILIALES

COMPTE DE RÉSULTAT CONSOLIDÉ

(Non vérifié, en milliers, sauf les données sur les actions et les actions)

Trois mois se sont terminés
31 mars,

2019

2018

Les revenus

$

577,509

$

550 515

Dépenses d'exploitation:

Coûts d'exploitation directs

353 833

343 324

Salaires et avantages

92 795

85 706

Frais de vente, généraux et administratifs

48 147

50 011

Dépréciation et amortissement

26 640

26,002

Total des charges d'exploitation

521,415

505,043

Produit d'exploitation

56,094

45 472

Autres revenus (dépenses):

Le revenu d'intérêts

343

296

Frais d'intérêts

(8.199

)

(7 606

)

Perte sur la retraite anticipée de la dette

(928

)

Perte des filiales non consolidées

(117

)

Gain de change net

3 208

1 935

Autres gains

25

31

Autres charges nettes

(5.551

)

(5 461

)

Le revenu avant les impôts

50 543

40 011

La charge d'impôt sur le revenu

(15 964

)

(13 667

)

Revenu net

34 579

26 344

Perte nette (revenu) attribuable aux intérêts minoritaires

(36

)

69

Résultat net attribuable à Euronet Worldwide, Inc.

$

34 543

$

26 413

Résultat par action attribuable aux actionnaires d'Euronet Worldwide, Inc.:

De base

$

0,67

$

0,51

Dilué

$

0,62

$

0,49

Nombre moyen pondéré d'actions en circulation:

De base

51 880 534

51 899 282

Dilué

55 576 867

53 953 246

Voir les notes afférentes aux états financiers consolidés non audités.


EURONET WORLDWIDE, INC. ET SES FILIALES

COMPTE DE RÉSULTAT GLOBAL CONSOLIDÉ

(Non vérifié, en milliers)

Trois mois se sont terminés
31 mars,

2019

2018

Revenu net

$

34 579

$

26 344

Ajustement de la traduction

(16 156)

)

22 948

Revenu global

18 423

49 292

Perte globale (résultat) imputable aux intérêts minoritaires

(7

)

15

Résultat global attribuable à Euronet Worldwide, Inc.

$

18 416

$

49 307

Voir les notes afférentes aux états financiers consolidés non audités.


Euronet Worldwide, Inc. et ses filiales

États consolidés des variations des capitaux propres

(en milliers, sauf données partagées)

Nombre de

Actions

Exceptionnel

Commun

Stock

Additionnel

Payé en

Capitale

Trésorerie

Stock

Solde au 31 décembre 2017

52 808 158

$

1 178

$

1 072 005

$

(217,161

)

Résultat net

L'autre résultat étendu

Actions émises dans le cadre de plans d’actionnariat salarié

116 358

2

2 468

(1 237

)

Rémunération à base d'actions

4 029

Rachat d'actions

(1 418 895

)

(125 000

)

Solde au 31 mars 2018

51 505 621

$

1 180

$

1 078 502

$

(343,398)

)

Nombre de

Actions

Exceptionnel

Commun

Stock

Additionnel

Payé en

Capitale

Trésorerie

Stock

Solde au 31 décembre 2018

51 819 998

$

1 198

$

1 104 264

$

(391,551

)

Revenu net

Autre perte globale

Actions émises dans le cadre de plans d’actionnariat salarié

130 136

3

5 194

(1 756

)

Rémunération à base d'actions

4 490

Rachat d'actions

Émission de billets convertibles, nettes d'impôts

71 660

Rachats et conversions de billets convertibles, nets d'impôts

6

(42 917

)

Solde au 31 mars 2019

51 950 140

$

1 201

$

1 142 691

$

(393,307

)

Voir les notes afférentes aux états financiers consolidés non audités.


EURONET WORLDWIDE, INC. ET SES FILIALES

États consolidés des variations des capitaux propres (suite)

(en milliers)

Des bénéfices non répartis

Cumul Autre

Perte globale

Sans contrôle

Intérêts

Total

Solde au 31 décembre 2017

$

436,954

$

(94 458

)

$

960

$

1 199 478

Résultat net

26 413

(69

)

26 344

L'autre résultat étendu

22.894

54

22 948

Actions émises dans le cadre de plans d’actionnariat salarié

1 233

Rémunération à base d'actions

4 029

Rachat d'actions

(125 000

)

Solde au 31 mars 2018

$

463,367

$

(71 564

)

$

945

$

1 129 032

Des bénéfices non répartis

Cumul Autre

Perte globale

Sans contrôle

Intérêts

Total

Solde au 31 décembre 2018

$

669 805

$

(151 043

)

$

169

$

1 232 842

Revenu net

34 543

36

34 579

Autre perte globale

(16 156)

)

(29

)

(16.185

)

Actions émises dans le cadre de plans d’actionnariat salarié

3 441

Rémunération à base d'actions

4 490

Émission de billets convertibles, nettes d'impôts

71 660

Rachats et conversions de billets convertibles, nets d'impôts

(42 917

)

Solde au 31 mars 2019

$

704,348

$

(167 199)

)

$

176

$

1 287 910

Voir les notes afférentes aux états financiers consolidés non audités.


EURONET WORLDWIDE, INC. ET SES FILIALES

ÉTATS CONSOLIDÉS DES FLUX DE TRÉSORERIE

(Non vérifié, en milliers)

Trois mois se sont terminés
31 mars,

2019

2018

Revenu net

$

34 579

$

26 344

Ajustements pour rapprocher le résultat net de l’encaisse nette générée par les activités opérationnelles:

Dépréciation et amortissement

26 640

26,002

Rémunération à base d'actions

4 490

4 029

Gain de change non réalisé, net

(3.208

)

(1 935

)

Impôts différés

3 468

2 818

Perte des filiales non consolidées

117

Augmentation de l’escompte sur la dette convertible et amortissement des frais d’émission de dette

4 071

3 477

Variation du fonds de roulement, nette des montants acquis:

Impôts sur le revenu à payer, nets

635

(674

)

Comptes clients à recevoir

(31 456

)

51 720

Charges payées d'avance et autres actifs courants

33 787

36 763

Comptes fournisseurs

(115 380)

)

(98 581

)

Revenus reportés

3 005

2 501

Charges à payer et autres passifs courants

51.377

(28.241

)

Variations d'actifs et de passifs non courants

953

3 488

Trésorerie nette fournie par les activités opérationnelles

12 961

27 828

Flux de trésorerie provenant d'activités d'investissement:

Acquisitions, nettes de trésorerie acquise

(7 257

)

Achats de biens et d'équipement

(31 390

)

(24 415

)

Achats d'autres actifs à long terme

(1,783

)

(1 808

)

Autre, net

187

201

Trésorerie nette utilisée dans les activités d'investissement

(32 986

)

(33,279

)

Flux de trésorerie provenant des activités de financement:

Produit de l'émission d'actions

5 171

2 300

Rachat d'actions

(2 275)

)

(126 577

)

Emprunts auprès de contrats de crédit renouvelables

1 209 446

1 010 643

Remboursement de contrats de crédit renouvelables

(1 425 398

)

(841,786

)

Produit de la dette à long terme

525 000

Remboursements de dettes à long terme

(94,199

)

(2,449

)

(Remboursements) des emprunts sur dettes à court terme, montant net

(11 779

)

1 557

Frais d'émission de dette

(11 812

)

Autre, net

(1 452

)

(1,792

)

Trésorerie nette générée par les activités de financement

192 702

41 896

Effet des variations de taux de change sur la trésorerie et les équivalents de trésorerie et la trésorerie soumise à restrictions

(12 387

)

12 525

Augmentation de la trésorerie et des équivalents de trésorerie et de la trésorerie soumise à restrictions

160 290

48 970

Trésorerie et équivalents de trésorerie et liquidités soumises à restrictions au début de la période

1 130 952

900 518

Trésorerie et équivalents de trésorerie et liquidités soumises à restrictions en fin de période

$

1 291 242

$

949,488

Complément d'information sur les flux de trésorerie:

Intérêts payés pendant la période

$

5 491

$

5 621

Impôts sur le revenu payés pendant la période

$

12 074

$

11 981

Voir les notes afférentes aux états financiers consolidés non audités.


EURONET WORLDWIDE, INC. ET SES FILIALES

NOTES AFFÉRENTES AUX ÉTATS FINANCIERS CONSOLIDÉS NON AUDITÉS

(1. GÉNÉRAL

Organisation

Euronet Worldwide, Inc. (avec ses filiales, la «Société» ou «Euronet») est l'un des principaux fournisseurs de paiements électroniques. Euronet propose des solutions de traitement et de distribution de paiements et de transactions aux institutions financières, aux détaillants, aux prestataires de services et aux particuliers. Les principales offres de produits d'Euronet comprennent des services complets de guichets automatiques, de points de vente, d'externalisation de cartes, d'émission de cartes et d'acquisition de marchands, de solutions logicielles, de la distribution électronique de temps d'antenne mobile prépayé et d'autres produits de paiement électronique. , services de change de devises et services mondiaux de transfert de fonds.

Base de présentation

Les états financiers consolidés non audités ci-joints ont été établis à partir des registres de la Société, conformément aux principes comptables généralement reconnus aux États-Unis («US GAAP») et aux règles et réglementations de la Securities and Exchange Commission («SEC»). . De l’avis de la direction, ces états financiers consolidés non audités contiennent tous les ajustements (consistant uniquement en des ajustements récurrents normaux) nécessaires pour présenter de manière fidèle la situation financière consolidée ainsi que les résultats d’exploitation, le résultat global et les flux de trésorerie des périodes intermédiaires. Les états financiers consolidés non audités doivent être lus avec les états financiers consolidés audités de la société pour l’exercice clos le 31 décembre 2018, y compris les notes y afférentes, énoncées dans le 2018 Rapport annuel sur formulaire 10-K. Certains montants d’exercices antérieurs ont été reclassés afin que leur présentation soit conforme à celle de l’exercice en cours.

Utilisation d'estimations

La préparation des états financiers conformément aux PCGR des États-Unis exige de la direction qu'elle formule certaines estimations et hypothèses ayant une incidence sur les montants d'actif et de passif déclarés, l'information à fournir sur les actifs et les passifs éventuels à la date des états financiers, ainsi que les montants de produits présentés. et dépenses au cours de la période considérée. Les éléments importants faisant l’objet de telles estimations et hypothèses comprennent le calcul des impôts sur les bénéfices, l’estimation de la durée de vie utile et la perte de valeur éventuelle des actifs à long terme et du goodwill, ainsi que l’affectation du prix d’acquisition aux actifs acquis et aux passifs repris lors d’acquisitions et la comptabilisation des produits. Les résultats réels pourraient différer de ces estimations. Les résultats d’exploitation pour les périodes intermédiaires ne sont pas nécessairement indicatifs des résultats à attendre pour l’exercice complet se terminant 31 décembre 2019.

Saisonnalité

Le secteur du traitement EFT d’Euronet connaît au troisième trimestre de l’exercice la plus forte demande de services de retrait dynamique de fonds (DCC) et de conversion dynamique de devises ("DCC"), qui coïncide avec la saison touristique suivie d’une baisse des transactions au quatrième trimestre. De plus, les segments epay sont impactés par la saisonnalité au cours du quatrième trimestre et du premier trimestre de chaque année en raison des niveaux de transaction plus élevés pendant la saison des vacances et des niveaux inférieurs après la saison des vacances. La saisonnalité dans le segment des transferts monétaires varie selon les régions du monde. Dans la plupart des marchés, Euronet connaît généralement une demande accrue de services de transfert de fonds du mois de mai au quatrième trimestre de chaque année, ce qui coïncide avec l’augmentation des schémas de migration des travailleurs et de congés divers, et connaît ses niveaux de transaction les plus bas au premier trimestre de chaque année. année.

(2) COMPTABILITÉS COMPTABLES RÉDUITES ET ADOPTÉES

La société a adopté la norme de comptabilité (ASU) 2016-02, Baux (Sujet 842), tel que modifié, à compter du 1er janvier 2019, en utilisant l’approche rétrospective modifiée et les périodes comparatives n’ont pas été retraités. Les nouvelles normes fournissent un certain nombre d’experts pratiques facultatifs en transition.

La société a choisi le «paquet d’expertises pratiques» qui lui permet de ne pas réévaluer, conformément à la nouvelle norme, les conclusions antérieures de la société concernant l’identification, la classification et les coûts directs initiaux. La société a également choisi de combiner les composantes de contrats de location et de contrats de location et d'inclure au bilan les contrats de location à court terme d'une durée initiale de 12 mois ou moins.

En outre, la société a choisi l’opportunité pratique rétrospective de déterminer la durée du contrat de location pour les contrats de location existants. L’élection de l’expérience pratique rétrospective a abouti, pour la quasi-totalité des contrats de location en vigueur au 1er janvier 2019, à la durée du contrat de location pour la mise en œuvre de cette déclaration, la durée du contrat étant du 1er janvier 2019 à la date de résiliation du contrat, durée de location réelle telle que définie dans le contrat de location. La durée de vie des contrats de location conclus le 1 er janvier 2019 et par la suite est incluse en fonction de la date de début et de la date de résiliation du contrat de location. Avec le recul, la société a évalué la performance de tous les contrats de location et des marchés associés par rapport à la


opérations, ce qui a permis de déterminer que l’exercice des options de renouvellement ne serait pas raisonnablement certain pour déterminer la durée du contrat de location prévue.

L’adoption de la nouvelle norme a entraîné la comptabilisation d’actifs de crédit-bail supplémentaires et de passifs liés aux contrats de location d’environ 296,9 millions de dollars, à compter du 1er janvier 2019. La société reclassée 16,6 millions de dollars et 2,7 millions de dollars des coûts reportés et des crédits reportés, respectivement, aux actifs du contrat de location en droit d'utilisation (ROU) au 31 mars 2019.

En juin 2016, le Financial Accounting Standards Board ("FASB") a publié l'ASU 2016-13, Instruments financiers – Pertes de crédit (sujet 326), qui impose aux entités de mesurer toutes les pertes de crédit attendues des actifs financiers détenus à la date de clôture en fonction de l’expérience, des conditions actuelles et de prévisions raisonnables et justifiables. Ce modèle remplace le modèle existant de pertes encourues et s’applique à l’évaluation des pertes de crédit sur des actifs financiers évalués au coût amorti. Ces indications s'appliquent aux exercices et aux périodes intermédiaires de ces exercices commençant après le 15 décembre 2019. Une application anticipée est autorisée pour toutes les entités pour les exercices et les périodes intermédiaires de ces exercices commençant après le 15 décembre 2018. La La société évalue actuellement l'incidence de l'adoption de l'ASU 2016-13 sur ses états financiers consolidés.

(3) CAPITAUX PROPRES

Bénéfice par action

Le résultat de base par action a été calculé en divisant le résultat disponible pour les porteurs d'actions ordinaires par le nombre moyen pondéré d'actions ordinaires en circulation au cours des périodes respectives. Le résultat dilué par action a été calculé en divisant le résultat disponible pour les porteurs d'actions ordinaires par le nombre moyen pondéré d'actions en circulation au cours de la période considérée, après ajustement pour tenir compte de la dilution potentielle liée aux options d'achat d'actions ordinaires de la Société, à la prise de contrôle des actions subalternes et à la conversion de prise en charge. les débentures convertibles de la société. Le tableau suivant présente le calcul du nombre moyen pondéré dilué d’actions ordinaires en circulation:

Trois mois se sont terminés
31 mars,

2019

2018

Calcul du nombre moyen pondéré d’actions en circulation dilué:

Nombre moyen pondéré d'actions en circulation

51 880 534

51 899 282

Actions supplémentaires résultant de l’exercice supposé d’options sur actions et de l’acquisition d’actions sous restriction

1 285 139

1 578 071

Parts supplémentaires de la conversion supposée des billets convertibles

2 411 194

475.893

Nombre moyen pondéré d’actions en circulation dilué

55 576 867

53 953 246

Le tableau inclut l’incidence de toutes les options d’achat d’actions et actions subalternes qui ont un effet dilutif sur le nombre moyen pondéré d’actions ordinaires en circulation de la société Trois mois terminés 31 mars 2019 et 2018. Le calcul du résultat dilué par action exclut les options d’achat d’actions ou les actions d’actions restreintes antidilutives pour le nombre moyen pondéré d’actions ordinaires en circulation de la Société 402 000 pour le Trois mois terminés 31 mars 2019 et environ 1 151 000 pour le Trois mois terminés 31 mars, 2018.

Les billets convertibles de la société ont des caractéristiques de règlement obligeant la société à convertir, lors de la conversion, le montant en principal de la dette et toute valeur de conversion supérieure à la valeur en principal ("prime de conversion"), en espèces ou en actions d’actions ordinaires de la société ou une combinaison de leurs éléments , au choix de la société. Au moment de l'émission, la Société a déclaré son intention de régler toute conversion de ces billets en payant en espèces la valeur du principal et en émettant des actions ordinaires contre toute prime de conversion. Par conséquent, les billets convertibles sont inclus dans le calcul du résultat dilué par action si leur inclusion est dilutive. Les billets convertibles n’auraient un effet dilutif que si le prix du marché des actions ordinaires était supérieur au prix de conversion de 188,73 $ par part et 72,18 $ par action pour les nouveaux billets de premier rang convertibles («billets convertibles») émis le 18 mars 2019 et les billets convertibles existants venant à échéance le 2044, respectivement. L'effet de dilution augmente plus le prix du marché dépasse le prix de conversion. À l’émission des billets convertibles, la Société a remis un avis de rachat au fiduciaire de l’acte de fiducie régissant les billets convertibles existants. À partir de 31 mars 2019 et 2018, le cours de l’action a dépassé le prix de conversion et les billets convertibles existants ont eu un effet dilutif sur le résultat par action. De plus, en raison de la hausse du prix de l’action à partir de 78,92 $ à 31 mars, 2018 à 142,59 $ à 31 mars 2019, il y avait une augmentation des actions de la conversion supposée des billets convertibles.

Rachats d'actions

Le conseil d’administration de la Société a autorisé un programme de rachat d’actions ("programme de rachat") permettant à Euronet de racheter jusqu’à 375 millions de dollars en valeur ou 10,0 millions d’actions jusqu’au 31 mars 2020. Pour la Trois mois terminés 31 mars 2019, la valeur maximale en dollars des actions pouvant encore être achetées dans le cadre du programme de rachat était


200,0 millions de dollars. Les rachats dans le cadre du programme de rachat peuvent avoir lieu sur le marché libre ou dans des transactions à négociation privée, y compris des transactions sur produits dérivés, et peuvent être effectués dans le cadre d'un plan Règle 10b5-1. Pour le premier quart de 2019, la Société n’a procédé à aucun rachat dans le cadre du programme de rachat. Dans le cadre de l’émission des billets convertibles, le conseil d’administration de la société a autorisé celle-ci à racheter jusqu’à concurrence de 120 millions de dollars des actions ordinaires de la société simultanément ou après l’émission des billets convertibles. Cette autorisation expirera le 11 mars 2021. Pour le premier trimestre 2019, la Société n'a procédé à aucun rachat en vertu de cette autorisation spéciale.

Cumul des autres pertes globales

Le cumul des autres éléments du résultat global comprend entièrement les ajustements de conversion des devises. La société a enregistré des pertes de change de change de 16,2 millions de dollars pour le Trois mois terminés 31 mars 2019et des gains de 22,9 millions de dollars pour le Trois mois terminés 31 mars, 2018. Il n’ya pas eu de reclassement de la conversion de devises dans les états consolidés des résultats de l’exercice précédent. Trois mois terminés 31 mars 2019 et 2018.

(4) GOODWILL ET ACTIFS INCORPORELS NETS

Un récapitulatif des immobilisations incorporelles acquises et de l’écart d’acquisition pour Trois mois terminés 31 mars 2019 est présenté ci-dessous:

(en milliers)

Acquis

Intangible

Les atouts

Bonne volonté

Total

Intangible

Les atouts

Solde au 31 décembre 2018

$

114 485

$

704.197

$

818,682

Augmente (diminue):

Acquisition

686

686

Amortissement

(5.186

)

(5.186

)

Autres (principalement variations des taux de change)

844

(829

)

15

Solde au 31 mars 2019

$

110 143

$

704,054

$

814.197

Amortissement estimé des immobilisations incorporelles à durée de vie limitée, avant impôts sur les bénéfices, à compter du 31 mars 2019, devrait totaliser 15,5 millions de dollars pour le reste de 2019, 19,9 millions de dollars pour 2020, 19,0 millions de dollars pour 2021, 18,0 millions de dollars pour 2022, 13,2 millions de dollars pour 2023 et 6,7 millions de dollars pour 2024.

La Société a finalisé l’acquisition d’une petite entreprise indonésienne pour une contrepartie en numéraire non significative. L’acquisition a été comptabilisée comme un regroupement d’entreprises conformément aux PCGR des États-Unis et les résultats d’exploitation ont été inclus à partir de la date d’acquisition dans le secteur Traitement du télévirement.

Le test de dépréciation annuel des écarts d’acquisition de la Société est réalisé au cours du quatrième trimestre de son exercice. Le test de dépréciation annuel pour l’exercice terminé le 31 décembre 2018 aucune perte de valeur.

La détermination de la juste valeur des unités d'exploitation nécessite un jugement important de la part de la direction pour estimer les flux de trésorerie futurs et pour évaluer la situation potentielle des marchés et de l'économie. Il est raisonnablement possible que les activités de la société ne se déroulent pas comme prévu, ou que les estimations ou hypothèses incluses dans 2018 Le test de dépréciation annuel pourrait changer, ce qui pourrait entraîner l’enregistrement par la Société de charges de dépréciation non financières importantes au cours de l’exercice au cours duquel ces modifications ont eu lieu.

(5) CHARGES ACCRUES ET AUTRES PASSIFS COURANTS

Les charges à payer et autres passifs courants comprennent les éléments suivants:

À partir de

(en milliers)

31 mars 2019

31 décembre 2018

Obligations de règlement de transfert d'argent

$

464 888

$

310 710

Dépenses accrues

187 521

293,864

Montants courus dus aux opérateurs de téléphonie mobile et autres fournisseurs de contenu

73 434

65 878

Passifs dérivés

27 526

36.102

Partie courante des obligations des contrats de location-acquisition

$

5 545

$

5 458

Total

$

758 914

$

712 012


(6) REVENUS NON CONNAISSANTS

Sujet 606 de la Codification des normes comptables ("ASC"), «Revenus des contrats avec les clients» («Thème 606») exige le report des coûts supplémentaires pour obtenir des contrats clients, appelés actifs contractuels, qui sont ensuite amortis en charges dans le cadre des frais de vente, généraux et administratifs sur les périodes respectives des avantages escomptés. Ces coûts ne sont pas matériels. Toutefois, la société a mis en place des processus et des contrôles pour enregistrer ces coûts de manière continue et les divulguera s'ils deviennent importants.

La société comptabilise les produits reportés lorsque les paiements en espèces sont reçus ou dus avant son exécution. L’augmentation du solde des revenus reportés pour le premier quart de 2019 est principalement entraîné par 16,0 millions de dollars paiements en espèces reçus au cours de l’exercice en cours pour lesquels la société n’a pas encore rempli ses obligations de prestation, en grande partie compensés par les 13,9 millions de dollars des produits constatés qui ont été inclus dans le solde des produits reportés au 31 décembre 2018.

(7) OBLIGATIONS DE DETTE

Les dettes comprennent les éléments suivants:

À partir de

(en milliers)

31 mars 2019

31 décembre 2018

Facilité de crédit:

Contrats de crédit renouvelables, échéance 2023

$

$

215 725

Dette convertible:

Billets convertibles à 1,50%, non garantis, échéance 2044

333,886

379 859

Obligations convertibles à 0,75%, non garanties, à échéance 2049

425,947

Autres obligations

26 845

38 513

Total des dettes

786 678

634 097

Frais d’émission de dette non amortis

(13 458

)

(6 298

)

Valeur comptable de la dette

773,220

627,799

Titres de créance à court terme et échéances actuelles des titres de créance à long terme

(360 358

)

(38.017

)

Dettes à long terme

$

412 862

$

589 782

Facilité de crédit

Le 17 octobre 2018, la Société a conclu un nouveau contrat de crédit renouvelable non garanti (la «facilité de crédit») pour 1,0 milliard de dollars qui expire le 17 octobre 2023. Les honoraires et les intérêts sur les emprunts sont basés sur la cote de crédit de la société et, dans le cas des frais de lettre de crédit, sur une marge et, dans le cas des intérêts, sur une marge supérieure au taux interbancaire offert à Londres («LIBOR»). ”) Ou une marge supérieure au taux de base, choisie par la société, la marge applicable allant de 1,125% à 2,0% ou 0,175% à 1,0% pour les prêts au taux de base. La facilité de crédit permet d’emprunter en dollars australiens, en livres sterling britanniques, en dollars canadiens, en couronnes danoises, en euros, en forints hongrois, en yen japonais, en dollars néo-zélandais, en couronnes norvégiennes, en zlotys polonais, en couronnes suédoises, en francs suisses et en dollars américains. .

Dette convertible

On 18 mars 2019, la Société a finalisé la vente de 525 millions de dollars de billets de premier rang convertibles («billets convertibles»). Les obligations convertibles viennent à échéance en mars 2049, à moins d’être rachetées ou converties avant cette date, et sont convertibles en actions ordinaires d’Euronet à un prix de conversion d’environ 188,73 $ par part. La société a utilisé 94,2 millions de dollars de la nouvelle dette à racheter 49 millions de dollars le capital global de la société 1,5% Les obligations de premier rang convertibles en circulation à échéance de 2044 (les "billets convertibles existants") d'un nombre limité de porteurs dans des transactions négociées de manière privée. La Société prévoit d’utiliser le reste du produit net à ses fins générales, ce qui peut inclure le remboursement du solde des billets convertibles existants, le remboursement des emprunts en vertu de la facilité de crédit, les rachats d’actions ou les acquisitions.

Le 18 mars 2019, la Société a remis un avis de rachat au fiduciaire de l'acte de fiducie régissant les billets convertibles existants (l '"acte de fiducie existant"), aux termes duquel la Société rachèterait la totalité du capital restant.


montant en circulation des billets convertibles existants le 28 mai 2019 (la «date de remboursement»). Le prix de rachat des billets convertibles existants à rembourser correspond à une trésorerie égale à 100% du capital des billets convertibles existants rachetés, majoré des intérêts courus et impayés, le cas échéant, à la date de rachat exclu.

Conformément à l'ASC 470-20-30-27, le produit de l'émission de dette convertible est réparti entre les composantes dette et capitaux propres, de sorte que la dette soit actualisée afin de refléter le taux d'emprunt sur la dette non convertible de la Société. Selon l’ASC 470-20-35-13, l’escompte sur la dette doit être amorti sur la période au cours de laquelle la dette convertible devrait être en cours à titre de charge d’intérêts sans décaissement. Cette attribution a entraîné une augmentation du capital versé supplémentaire de 99,7 millions de dollars et 66,1 millions de dollars pour les billets convertibles et les billets convertibles existants, respectivement. L’émission des billets convertibles et le remboursement des billets convertibles existants ont entraîné une perte nette 21,5 millions de dollars comptabilisation d’impôts différés passifs dans le capital versé supplémentaire.

Les intérêts débiteurs contractuels pour les billets convertibles existants ont été 1,5 million de dollars pour le Trois mois terminés 31 mars 2019 et 2018, respectivement. La charge de désactualisation était 2,9 millions de dollars et 2,8 millions de dollars pour le Trois mois terminés 31 mars 2019 et 2018, respectivement. Le taux d'intérêt effectif était 4,7% pour les deux Trois mois terminés 31 mars 2019 et 2018. À partir de 31 mars 2019, le rabais non amorti était 16,4 millions de dollars.

Les intérêts débiteurs contractuels pour les billets convertibles ont été 0,2 million de dollars pour le Trois mois terminés 31 mars 2019. La charge de désactualisation était 0,6 million de dollars pour le Trois mois terminés 31 mars 2019. Le taux d'intérêt effectif était 4,4% pour le Trois mois terminés 31 mars 2019. À partir de 31 mars 2019, le rabais non amorti était 99,1 millions de dollars et sera amorti jusqu’en mars 2025.

(8) INSTRUMENTS DÉRIVÉS ET ACTIVITÉS DE COUVERTURE

La Société est exposée au risque de change résultant (i) de la collecte de fonds ou du règlement d’opérations de virement de fonds dans des monnaies autres que le dollar américain, (ii) de contrats dérivés conclus avec ses clients dans le cadre de la fourniture de monnaies en devises croisées. services de transfert et (iii) des emprunts à court terme payables dans des monnaies autres que le dollar américain. La Société conclut des contrats dérivés sur devises, principalement des contrats à terme et des swaps de devises, afin de minimiser son exposition aux fluctuations des taux de change. Conformément à la politique de la société, les instruments dérivés utilisés dans ces activités sont des couvertures économiques et ne sont pas désignés comme couvertures au sens du sujet 815 de Dérivés et couverture ("ASC Topic 815"), principalement due to either the relatively short duration of the contract term or the effects of fluctuations in currency exchange rates being reflected concurrently in earnings for both the derivative instrument and the hedged transaction and having an offsetting effect.

Foreign currency exchange contracts – Ria Operations and Corporate

In the United States, the Company's Ria operations use short-duration foreign currency forward contracts, generally with maturities up to 14 jours, to offset the fluctuation in foreign currency exchange rates on the collection of money transfer funds between initiation of a transaction and its settlement. Due to the short duration of these contracts and the Company’s credit profile, the Company is generally not required to post collateral with respect to these foreign currency forward contracts. Most derivative contracts executed with counterparties in the U.S. are governed by an International Swaps and Derivatives Association agreement that includes standard netting arrangements; therefore, asset and liability positions from forward contracts and all other foreign exchange transactions with the same counterparty are net settled upon maturity. À partir de March 31, 2019, the Company held in its Ria operations foreign currency forward contracts outstanding in the U.S. with a notional value of $338 million, primarily in Australian dollars, Canadian dollars, British pounds, euros and Mexican pesos.

In addition, the Company uses forward contracts, typically with maturities from a few days to less than one year, to offset foreign exchange rate fluctuations on certain foreign currency denominated other asset and liability positions. À partir de March 31, 2019, the Company had foreign currency forward contracts outstanding with a notional value of $166 million, primarily in euros and Polish zloty.

Foreign currency exchange contracts – HiFX Operations

HiFX writes derivative instruments, primarily foreign currency forward contracts and cross-currency swaps, mostly with counterparties comprised of individuals and small-to-medium size businesses and derives a currency margin from this activity as part of its operations. HiFX aggregates its foreign currency exposures arising from customer contracts and may hedge some or all of the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. Foreign exchange revenues from HiFX's total portfolio of positions were $18.6 million et $18.7 million pour le Trois months ended March 31, 2019 et 2018. All of the derivative contracts used in the Company's HiFX operations are economic hedges and are not designated as hedges under ASC Topic 815. The duration of these derivative contracts is generally less than one year.


The fair value of HiFX's total portfolio of positions can change significantly from period to period based on, among other factors, market movements and changes in customer contract positions. HiFX manages counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis. It mitigates this risk by entering into contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. HiFX does not expect any significant losses from counterparty defaults.

The aggregate equivalent U.S. dollar notional amounts of foreign currency derivative customer contracts held by the Company in its HiFX operations as of March 31, 2019 was approximately $1.3 billion. The majority of customer contracts are written in major currencies such as the U.S. dollar, euro, New Zealand dollar, British pound, and Australian dollar.

Balance Sheet Presentation

The following table summarizes the fair value of the derivative instruments as recorded in the Consolidated Balance Sheets as of the dates below:

Asset Derivatives

Liability Derivatives

Fair Value

Fair Value

(in thousands)

Balance Sheet Location

March 31, 2019

December 31, 2018

Balance Sheet Location

March 31, 2019

December 31, 2018

Derivatives not designated as hedging instruments

Foreign currency exchange contracts

Prepaid expenses and other current assets

$

45,542

$

44,637

Accrued expenses and other current liabilities

$

(27,526

)

$

(36,102

)


The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2019 et December 31, 2018 (in thousands):

Offsetting of Derivative Assets

Gross Amounts Not Offset in the Consolidated Balance Sheet

As of March 31, 2019

Gross Amounts of Recognized Assets

Gross Amounts Offset in the Consolidated Balance Sheet

Net Amounts Presented in the Consolidated Balance Sheet

Instruments financiers

Cash Collateral Received

Net Amounts

Derivatives subject to a master netting arrangement or similar agreement

$

45,542

$

$

45,542

$

(21,436

)

$

(7,232

)

$

16,874

As of December 31, 2018

Derivatives subject to a master netting arrangement or similar agreement

$

44,637

$

$

44,637

$

(25,187

)

$

(9,918

)

$

9,532

Offsetting of Derivative Liabilities

Gross Amounts Not Offset in the Consolidated Balance Sheet

As of March 31, 2019

Gross Amounts of Recognized Liabilities

Gross Amounts Offset in the Consolidated Balance Sheet

Net Amounts Presented in the Consolidated Balance Sheet

Instruments financiers

Cash Collateral Paid

Net Amounts

Derivatives subject to a master netting arrangement or similar agreement

$

(27,526

)

$

$

(27,526

)

$

21,436

$

153

$

(5,937

)

As of December 31, 2018

Derivatives subject to a master netting arrangement or similar agreement

$

(36,102

)

$

$

(36,102

)

$

25,187

$

2,048

$

(8,867

)

See Note 9, Fair Value Measurements, for the determination of the fair values of derivatives.

Income Statement Presentation

The following table summarizes the location and amount of gains and losses on derivatives in the Consolidated Statements of Income for the Trois months ended March 31, 2019 et 2018:

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

Location of Gain Recognized in Income on Derivative Contracts

Three Months Ended
March 31,

(in thousands)

2019

2018

Foreign currency exchange contracts

Foreign currency exchange gain, net

$

2,459

$

1 295

(a) The Company enters into derivative contracts such as foreign currency exchange forwards and cross-currency swaps as part of its HiFX operations. These derivative contracts are excluded from this table as they are part of the broader disclosure of foreign currency exchange revenues for this business discussed above.

(9) FAIR VALUE MEASUREMENTS

Fair value measurements used in the unaudited consolidated financial statements are based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data


obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

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

Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.

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

As of March 31, 2019

(in thousands)

Balance Sheet Classification

Level 1

Level 2

Level 3

Total

Les atouts

Foreign currency exchange contracts

Other current assets

$

$

45,542

$

$

45,542

Liabilities

Foreign currency exchange contracts

Autres passifs courants

$

$

(27,526

)

$

$

(27,526

)

As of December 31, 2018

(in thousands)

Balance Sheet Classification

Level 1

Level 2

Level 3

Total

Les atouts

Foreign currency exchange contracts

Other current assets

$

$

44,637

$

$

44,637

Liabilities

Foreign currency exchange contracts

Autres passifs courants

$

$

(36,102

)

$

$

(36,102

)

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, accounts receivable, trade accounts payable, accrued expenses and other current obligations approximate their fair values because of the relatively short-term maturities of these financial instruments. The carrying values of the Company’s long-term debt (other than the Convertible Notes), including the current portion, approximate fair value because interest is primarily based on LIBOR, which resets at various intervals of less than one year. The Company estimates the fair value of the convertible notes using quoted prices in inactive markets for identical liabilities (Level 2). À partir de March 31, 2019 et December 31, 2018, the fair values of the Existing Convertible Notes were $660.8 million et $571.6 million, respectively, with carrying values of $333.9 million et $379.9 million, respectivement. À partir de March 31, 2019, the fair value of the Convertible Notes was $581.0 million with carrying value of $425.9 million.

(10) SEGMENT INFORMATION

The Company’s reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting. The Company currently operates in the following Trois reportable operating segments:

1)

Through the EFT Processing Segment, the Company processes transactions for a network of ATMs and POS terminals across Europe, the Middle East, Asia Pacific and the United States. The Company provides comprehensive electronic payment solutions consisting of ATM cash withdrawal services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, dynamic currency conversion, domestic and international surcharge and other value added services. Through this segment, the Company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.

2)

Through the epay Segment, the Company provides distribution, processing and collection services for prepaid mobile airtime and other electronic payment products in Europe, the Middle East, Asia Pacific, the United States and South America.


3)

Through the Money Transfer Segment, the Company provides global money transfer services under the brand names Ria, HiFX, IME and xe. Ria and IME provide global consumer-to-consumer money transfer services through a network of sending agents, Company-owned stores and Company-owned websites, disbursing money transfers through a worldwide correspondent network. HiFX offers account-to-account international payment services to high-income individuals and small-to-medium sized businesses. xe is a provider of foreign currency exchange information and offers money transfers on its currency data websites. The Company also offers customers bill payment services, payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services, foreign currency exchange services and mobile top-up. The Company provides cash management solutions and foreign currency risk management services to small-to-medium sized businesses under the brand name HiFM.

In addition, the Company accounts for non-operating activity, most 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 Trois months ended March 31, 2019 et 2018:

For the Three Months Ended March 31, 2019

(in thousands)

EFT

En traitement

epay

Argent

Transfer

Corporate

Services,

Eliminations

and Other

Consolidé

Total revenues

$

145,703

$

176,114

$

256,581

$

(889

)

$

577,509

Dépenses d'exploitation:

Direct operating costs

83,776

133,525

137,404

(872

)

353,833

Salaries and benefits

19,431

14,753

51,156

7,455

92,795

Selling, general and administrative

9,086

8,052

29,109

1 900

48,147

Dépréciation et amortissement

16,642

1,785

8,138

75

26,640

Total des charges d'exploitation

128,935

158,115

225,807

8,558

521,415

Operating income (expense)

$

16,768

$

17,999

$

30,774

$

(9,447

)

$

56,094


For the Three Months Ended March 31, 2018

(in thousands)

EFT

En traitement

epay

Argent

Transfer

Corporate

Services,

Eliminations

and Other

Consolidé

Total revenues

$

135,704

$

176,845

$

238,836

$

(870

)

$

550,515

Dépenses d'exploitation:

Direct operating costs

81,837

134,922

127,431

(866

)

343,324

Salaries and benefits

17,005

14,417

47,357

6,927

85,706

Selling, general and administrative

9,115

8,733

29,699

2,464

50,011

Dépréciation et amortissement

16,200

1,878

7,895

29

26,002

Total des charges d'exploitation

124,157

159,950

212,382

8,554

505,043

Operating income (expense)

$

11,547

$

16,895

$

26,454

$

(9,424

)

$

45,472

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

Property and Equipment, net as of

Total Assets as of

(in thousands)

March 31, 2019

December 31, 2018

March 31, 2019

December 31, 2018

EFT Processing

$

222,338

$

215,106

$

1,533,051

$

1,220,141

epay

34,105

31,172

689,573

780,220

Money Transfer

47,282

45,517

1,461,137

1,310,775

Corporate Services, Eliminations and Other

71

74

130,292

10,019

Total

$

303,796

$

291,869

$

3,814,053

$

3,321,155

The following table presents the Company's revenues disaggregated by segment and region. Sales and usage-based taxes are excluded from revenues. The Company believes disaggregation by segment and region best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The disaggregation of revenues by segment and region is based on management's assessment of segment performance together with allocation of financial resources, both capital and operating support costs, on a segment and regional level. Both segments and regions benefit from synergies achieved through concentration of operations and are influenced by macro-economic, regulatory and political factors in the respective segment and region.

For the Three Months Ended March 31, 2019

(in thousands)

EFT

En traitement

epay

Argent

Transfer

Total

L'Europe 

$

107,611

$

114,906

$

85,559

$

308,076

Amérique du Nord

8,205

39,664

134,832

182,701

Asie-Pacifique

29,877

17,374

30,713

77,964

Autre

dix

4,170

5,477

9,657

Eliminations

(889

)

Total

$

145,703

$

176,114

$

256,581

$

577,509


For the Three Months Ended March 31, 2018

(in thousands)

EFT

En traitement

epay

Argent

Transfer

Total

L'Europe 

100,087

113,451

73,958

287,496

Amérique du Nord

$

8,016

$

41,051

$

128,984

$

178,051

Asie-Pacifique

27,594

17,453

32,141

77,188

Autre

7

4,890

3,753

8,650

Eliminations

(870

)

Total

$

135,704

$

176,845

$

238,836

$

550,515

(11) INCOME TAXES

The Company's effective income tax rate was 31.6% et 34.2% pour le Trois months ended March 31, 2019 et 2018, respectivement. The Company's effective income tax rates for the Trois months ended March 31, 2019 et 2018 were higher than the applicable statutory income tax rate of 21% as a result of certain foreign earnings of the Company being subject to higher local statutory income tax rates and the application to the Company of the U.S. global intangible low-taxed income ("GILTI") tax provision. The GILTI provision subjects the Company's current foreign earnings to U.S. taxation creating additional U.S. tax expense.

(12) COMMITMENTS

À partir de March 31, 2019, the Company had $76.7 million of stand-by letters of credit/bank guarantees issued on its behalf, of which $46.2 million are outstanding under the Credit Facility. The remaining stand-by letters of credit/bank guarantees are collateralized by 3,7 millions de dollars of cash deposits held by the respective issuing banks.

Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries. À partir de March 31, 2019, the Company had granted off balance sheet guarantees for cash in various ATM networks amounting to 12,3 millions de dollars over the terms of the cash supply agreements and performance guarantees amounting to approximately $54.6 million over the terms of agreements with the customers.

From time to time, the Company enters into agreements with commercial counterparties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement. The amount of such potential obligations is generally not stated in the agreements. Euronet's liability under such indemnification provisions may be mitigated by relevant insurance coverage and may be subject to time and materiality limitations, monetary caps and other conditions and defenses. Such indemnification obligations include the following:

In connection with contracts with financial institutions in the EFT Processing Segment, the Company is responsible for damage to ATMs and theft of ATM network cash that, generally, is not recorded on the Company’s Consolidated Balance Sheets. À partir de March 31, 2019, the balance of cash used in the Company's ATM networks for which the Company was responsible was approximately $461 million. The Company maintains insurance policies to mitigate this exposure;

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

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

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


In connection with acquisitions and dispositions of subsidiaries, operating units and business assets, the Company has entered into agreements containing indemnification provisions, which can be generally described as follows: (i) in connection with acquisitions of operating units or assets made by Euronet, the Company has agreed to indemnify the seller against third-party claims made against the seller relating to the operating unit or asset and arising after the closing of the transaction, and (ii) in connection with dispositions made by Euronet, Euronet has agreed to indemnify the buyer against damages incurred by the buyer due to the buyer’s reliance on representations and warranties relating to the subject subsidiary, operating unit or business assets in the disposition agreement if such representations or warranties were untrue when made; et

Euronet has entered into agreements with certain third parties, including banks that provide fiduciary and other services to Euronet or to the Company’s benefit plans. Under such agreements, the Company has agreed to indemnify such service providers for third-party claims relating to carrying out their respective duties under such agreements.

The Company is also required to meet minimum capitalization and cash requirements of various regulatory authorities in the jurisdictions in which the Company has money transfer operations. The Company has obtained surety bonds in compliance with money transfer licensing requirements of the applicable governmental authorities.

To date, the Company is not aware of any significant claims made by the indemnified parties or third parties to guarantee agreements with the Company and, accordingly, no liabilities were recorded as of March 31, 2019 ou December 31, 2018.

(13) LITIGATION AND CONTINGENCIES

From time to time, the Company is a party to legal or regulatory proceedings arising in the ordinary course of its business. Currently, there are no legal proceedings or regulatory findings that management believes, either individually or in the aggregate, would have a material adverse effect on the Company's consolidated financial condition or results of operations. In accordance with U.S. GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

(14) LEASES

The Company enters into operating leases for ATM sites, office space, retail stores and equipment. The Company's finance leases are immaterial. Right of use assets and lease liabilities are recognized at commencement date based on the present value of the lease payment over the lease term. The present value of lease payments is determined using the incremental borrowing rate based on information available at the lease commencement date. All leases with fixed payments, including leases with an initial term of 12 months or less are recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Most leases include an option to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at the Company’s sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Company also has a unilateral termination right for a majority of the ATM site leases. Since the Company is not reasonably certain to exercise the renewal or terminal options, the options are not considered in determining the lease term, and associated payment impacts are excluded from lease payments.

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. Variable lease payments are recognized when the event, activity or circumstance in the lease agreement on which those payments are assessed occurs and are excluded from the right of use assets and lease liabilities balances. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.


Future minimum lease payments

Future minimum lease payments under the operating leases as of March 31, 2019 sont:

As of March 31, 2019

Maturity of Lease Liabilities (in thousands)

Operating Leases

Remainder of 2019

$

115,891

2020

93,975

2021

68,283

2022

43,471

2023

24,907

Thereafter

45,003

Total lease payments

$

391,530

Less: imputed interest

(51,783

)

Present value of lease liabilities

$

339,747

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

(in thousands)

en fonctionnement

Leases

Year ending December 31,

2019

$

80,803

2020

65,590

2021

49,052

2022

37,823

2023

30,192

Thereafter

48,191

Total minimum lease payments

$

311,651

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

Lease Expense (in thousands)

Income Statement Classification

Three Months Ended March 31, 2019

Operating lease expense

Selling, general and administrative and Direct operating costs

$

30,460

Variable lease expense

Selling, general and administrative and Direct operating costs

6,569

Total lease expense

$

37,029

Other information about lease amounts recognized in the consolidated financial statements is summarized as follows:

Lease Term and Discount Rate of Operating Leases

As of March 31, 2019

Weighted- average remaining lease term (years)

4,5

Weighted- average discount rate

3.2

%

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

les autres informations (in thousands)

Three Months Ended March 31, 2019

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

$

30,083

Supplemental non-cash information on lease liabilities arising from obtaining ROU assets

ROU assets obtained in exchange for new operating lease liabilities

$

71,378

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


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The terms "Euronet," the "Company," "we" and "us" as used herein refer to Euronet Worldwide, Inc. and its subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements that constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Generally, the words "believe," "expect," "anticipate," "intend," "estimate," "will" and similar expressions identify forward-looking statements. However, the absence of these words or similar expressions does not mean the statement is not forward-looking. All statements other than statements of historical facts included in this document are forward-looking statements, including, but not limited to, statements regarding the following:

our business plans and financing plans and requirements;

trends affecting our business plans and financing plans and requirements;

trends affecting our business;

the adequacy of capital to meet our capital requirements and expansion plans;

the assumptions underlying our business plans;

our ability to repay indebtedness;

our estimated capital expenditures;

the potential outcome of loss contingencies;

our expectations regarding the closing of any pending acquisitions;

government regulatory action;

the expected effects of changes in laws or accounting standards;

technological advances; et

projected costs and revenues.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct.

Investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may materially differ from those in the forward-looking statements as a result of various factors, including, but not limited to, conditions in world financial markets and general economic conditions, including the effects in Europe of the negotiations related to the United Kingdom's proposed departure of from the European Union, and economic conditions in specific countries and regions; the effects of demonetization in India; technological developments affecting the market for our products and services; our ability to successfully introduce new products and services; foreign currency exchange rate fluctuations; the effects of any breach of our computer systems or those of our customers or vendors, including our financial processing networks or those of other third parties; interruptions in any of our systems or those of our vendors or other third parties; our ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; Visa's announced rule change to allow our ATMs to provide DCC beginning mid-April 2019; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, consumer and data protection and GDPR or PSD2, requirements; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including DCC transactions; changes in our relationships with, general economic, financial and market conditions and the duration and extent of any future economic downturns; the cost of borrowing, availability of credit and terms of and compliance with debt covenants; renewal of sources of funding as they expire and the availability of replacement funding; and the outlook for markets we serve; or in fees charged by, our business partners; concurrence; the outcome of claims and other loss contingencies affecting Euronet; and those factors referred to above and as set forth  and more fully described in Part I, Item 1A — Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2018. Our Annual Report on Form 10-K is available on the SEC's EDGAR website at www.sec.gov, and copies may also be obtained by contacting the Company. Any forward-looking statements made in this Form 10-Q speak only as of the date of this report. Except as required by law, we do not intend, and do not undertake any obligation, to update any forward-looking statements to reflect future events or circumstances after the date of such statements.


Vue d'ensemble

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

Euronet is a leading electronic payments provider. We offer payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Our primary product offerings include comprehensive automated teller machine (“ATM”), point-of-sale (“POS”), card outsourcing, card issuing and merchant acquiring services; software solutions and cloud based payment solutions; electronic distribution of prepaid mobile airtime and other electronic payment products; foreign currency exchange services and global money transfer services. We operate in the following three segments:

The EFT Processing Segment, which processes transactions for a network of 42,034 ATMs and approximately 298,000 POS terminals across Europe, the Middle East, Asia Pacific and the United States. We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, DCC, domestic and international surcharge and other value added services. Through this segment, we also offer a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.

The epay Segment, which provides distribution, processing and collection services for digital media (formerly referred to as non-mobile content) and prepaid mobile airtime. We operate a network of approximately 718,000 POS terminals providing electronic processing of digital media and prepaid mobile airtime top-up services in Europe, the Middle East, Asia Pacific, the United States and South America. We also provide vouchers and physical gift fulfillment services in Europe.

The Money Transfer Segment, which provides global consumer-to-consumer money transfer services, primarily under the brand names Ria, IME and xe. xe also provides global account-to-account money transfer services. We offer services under the brand names Ria and IME through a network of sending agents, Company-owned stores (primarily in North America, Europe and Malaysia) and Ria branded websites (riamoneytransfer.com and online.imeremit.com), disbursing money transfers through a worldwide correspondent network that includes approximately 377,000 Emplacements. xe offers money transfer services on its websites (xe.com and x-rates.com) and through its customer service representatives. The xe websites also provide foreign currency exchange information. In addition to money transfers, we also offer customers bill payment services (primarily in the U.S.), payment alternatives such as money orders and prepaid debit cards, comprehensive check cashing services for a wide variety of issued checks, along with competitive foreign currency exchange services and prepaid mobile top-up. Through our HiFM brand, we offer cash management solutions and foreign currency risk management services to small-to-medium sized businesses.

We have six processing centers in Europe, five in Asia Pacific and two in North America. We have 36 principal offices in Europe, 14 in Asia Pacific, nine in North America, three in the Middle East, two in South America and one in Africa. Our executive offices are located in Leawood, Kansas, USA. With approximately 70% of our revenues denominated in currencies other than the U.S. dollar, any significant changes in foreign currency exchange rates will likely have a significant impact on our results of operations.

SOURCES OF REVENUES AND CASH FLOW

Euronet primarily earns revenues and income from ATM management fees, transaction fees, commissions and foreign currency exchange margin. Each operating segment’s sources of revenues are described below.

EFT Processing Segment — Revenues in the EFT Processing Segment, which represented approximately 25% of total consolidated revenues for the premier quart de 2019, are primarily derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, fixed management fees and transaction fees we charge to customers for operating ATMs and processing debit and credit cards under outsourcing and cross-border acquiring agreements, foreign currency exchange margin on DCC transactions, domestic and international surcharge, foreign currency dispensing, and other value added services such as advertising, prepaid telecommunication recharges, bill payment, and money transfers provided over ATMs. Revenues in this segment are also derived from license fees, professional services and maintenance fees for proprietary application software and sales of related hardware.


epay Segment — Revenues in the epay Segment, which represented approximately 31% of total consolidated revenues for the premier quart de 2019, are derived from commissions or processing fees received from mobile phone operators for the processing and distribution of prepaid mobile airtime and commissions earned from the distribution of other electronic payment products, vouchers, and physical gifts. The proportion of epay Segment revenues earned from the distribution of prepaid mobile phone time as compared with other electronic products has decreased over time, and digital media now produces approximately 63% of epay Segment revenues. Other electronic payment products offered by this segment include digital content such as music, games and software, as well as other products, including prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, gift cards, vouchers, transport payments, lottery payments, bill payment, and money transfer.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented approximately 44% of total consolidated revenues for the premier quart de 2019, are primarily derived from transaction fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates. We have a sending agent network in place comprised of agents, customer service representatives, Company-owned stores, primarily in North America, Europe, and Malaysia, and Ria, xe and HiFX branded websites, along with a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries. Sending and correspondent agents each earn fees for cash collection and distribution services, which are recognized as direct operating costs at the time of sale.

The Company offers a money transfer product called Walmart-2-Walmart Money Transfer Service which allows customers to transfer money to and from Walmart stores in the U.S. Our Ria business executes the transfers with Walmart serving as both the sending agent and payout correspondent. Ria earns a lower margin from these transactions than its traditional money transfers; however, the arrangement has added a significant number of transactions to Ria’s business. The agreement with Walmart establishes Ria as the only party through which Walmart will sell U.S. domestic money transfers branded with Walmart marks. The agreement is effective until April 2020. Thereafter, it will automatically renew for subsequent one year terms unless either party provides notice to the contrary. The agreement imposes certain obligations on each party, the most significant being service level requirements by Ria and money transfer compliance requirements by Walmart. Any violation of these requirements by Ria could result in an obligation to indemnify Walmart or termination of the contract by Walmart. However, the agreement allows the parties to resolve disputes by mutual agreement without termination of the agreement.

Corporate Services, Eliminations and Other – In addition to operating in our principal operating segments described above, our “Corporate Services, Eliminations and Other” category includes non-operating activity, certain inter-segment eliminations and the cost of providing corporate and other administrative services to the operating segments, including most share-based compensation expense. These services are not directly identifiable with our reportable operating segments.

OPPORTUNITIES AND CHALLENGES

Our expansion plans and opportunities are focused on eight primary areas:

increasing the number of ATMs and cash deposit terminals in our independent networks;

increasing transactions processed on our network of owned and operated ATMs and POS devices;

signing new outsourced ATM and POS terminal management contracts;

expanding value added services and other products offered by our EFT Processing Segment, including the sale of DCC, acquiring and other prepaid card services to banks and retailers;

expanding our epay processing network and portfolio of digital content;

expanding our money transfer services, cross-currency payment products and bill payment network;

expanding our cash management solutions and foreign currency risk management services; et

developing our credit and debit card outsourcing business.

EFT Processing Segment — The continued expansion and development of our EFT Processing Segment business will depend on various factors including, but not necessarily limited to, the following:

the impact of competition by banks and other ATM operators and service providers in our current target markets;

the demand for our ATM outsourcing services in our current target markets;

our ability to develop products or services, including value added services, to drive increases in transactions and revenues;

the expansion of our various business lines in markets where we operate and in new markets;


our entry into additional card acceptance and ATM management agreements with banks;

our ability to obtain required licenses in markets we intend to enter or expand services;

our ability to enter into and renew ATM network cash supply agreements with financial institutions;

the availability of financing for expansion;

our ability efficiently to install ATMs contracted under newly awarded outsourcing agreements;

our ability to renew existing contracts at profitable rates;

our ability to maintain pricing at current levels or mitigate price reductions in certain markets;

the impact of changes in rules imposed by international card organizations such as Visa and Mastercard on card transactions on ATMs, including reductions in ATM interchange fees, restrictions on the ability to apply direct access fees, the ability to offer DCC transactions on ATMs, and increases in fees charged on DCC transactions;

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

our ability to expand and sign additional customers for the cross-border merchant processing and acquiring business; et

the continued development and implementation of our software products and their ability to interact with other leading products.

We consistently evaluate and add prospects to our list of potential ATM outsource customers. However, we cannot predict the increase or decrease in the number of ATMs we manage under outsourcing agreements because this depends largely on the willingness of banks to enter into outsourcing contracts with us. Due to the thorough internal reviews and extensive negotiations conducted by existing and prospective banking customers in choosing outsource vendors, the process of entering into or renewing outsourcing agreements can take several months. The process is further complicated by the legal and regulatory considerations of local countries. These agreements tend to cover large numbers of ATMs, so significant increases and decreases in our pool of managed ATMs could result from the acquisition or termination of one or more of these management contracts. Therefore, the timing of both current and new contract revenues is uncertain and unpredictable.

Software products are an integral part of our product lines, and our investment in research, development, delivery and customer support reflects our ongoing commitment to an expanded customer base.

epay Segment — The continued expansion and development of the epay Segment business will depend on various factors, including, but not necessarily limited to, the following:

our ability to maintain and renew existing agreements, and to negotiate new agreements in additional markets with mobile operators, digital content providers, agent financial institutions and retailers;

our ability to use existing expertise and relationships with mobile operators, digital content providers and retailers to our advantage;

the continued use of third-party providers such as ourselves to supply electronic processing solutions for existing and additional digital content;

the development of mobile phone networks in the markets in which we do business and the increase in the number of mobile phone users;

the overall pace of growth in the prepaid mobile phone and digital content market, including consumer shifts between prepaid and postpaid services;

our market share of the retail distribution capacity;

the development of new technologies that may compete with POS distribution of prepaid mobile airtime and other products;

the level of commission that is paid to the various intermediaries in the electronic payment distribution chain;

our ability to fully recover monies collected by retailers;

our ability to add new and differentiated products in addition to those offered by mobile operators;

our ability to develop and effectively market additional value added services;


our ability to take advantage of cross-selling opportunities with our EFT Processing and Money Transfer Segments, including providing money transfer services through our distribution network; et

the availability of financing for further expansion.

In all of the markets in which we operate, we are experiencing significant competition which will impact the rate at which we may be able to grow organically. Competition among prepaid mobile airtime and digital content distributors results in the increase of commissions paid to retailers and increases in retailer attrition rates. To grow, we must capture market share from other prepaid mobile airtime and digital content distributors, offer a superior product offering and demonstrate the value of a global network. In certain markets in which we operate, many of the factors that may contribute to rapid growth (growth in electronic payment products, expansion of our network of retailers and access to products of mobile operators and other digital media providers) remain present.

Money Transfer Segment — The continued expansion and development of our Money Transfer Segment business will depend on various factors, including, but not necessarily limited to, the following:

the continued growth in worker migration and employment opportunities;

the mitigation of economic and political factors that have had an adverse impact on money transfer volumes, such as changes in the economic sectors in which immigrants work and the developments in immigration policies in the countries in which we operate;

the continuation of the trend of increased use of electronic money transfer and bill payment services among high-income individuals, immigrant workers and the unbanked population in our markets;

our ability to maintain our agent and correspondent networks;

our ability to offer our products and services or develop new products and services at competitive prices to drive increases in transactions;

the development of new technologies that may compete with our money transfer network, and our ability to acquire, develop and implement new technologies;

the expansion of our services in markets where we operate and in new markets;

our ability to strengthen our brands;

our ability to fund working capital requirements;

our ability to recover from agents funds collected from customers and our ability to recover advances made to correspondents;

our ability to maintain compliance with the regulatory requirements of the jurisdictions in which we operate or plan to operate;

our ability to take advantage of cross-selling opportunities with the epay Segment, including providing prepaid services through our stores and agents worldwide;

our ability to leverage our banking and merchant/retailer relationships to expand money transfer corridors to Europe, Asia and Africa, including high growth corridors to Central and Eastern European countries;

the availability of financing for further expansion;

the ability to maintain banking relationships necessary for us to service our customers;

our ability to successfully expand our agent network in Europe using our payment institution licenses under the Second Payment Services Directive ("PSD2") and using our various licenses in the United States;

our ability to provide additional value-added products under the xe brand, and;

the considerations regarding the use of our various trade names within the money transfer business.

For all segments, our continued expansion may involve additional acquisitions that could divert our resources and management time and require integration of new assets with our existing networks and services. Our ability to effectively manage our growth has required us to expand our operating systems and employee base, particularly at the management level, which has added incremental operating costs. An inability to continue to effectively manage expansion could have a material adverse effect on our business, growth, financial condition or results of operations. Inadequate technology and resources would impair


our ability to maintain current processing technology and efficiencies, as well as deliver new and innovative services to compete in the marketplace.

SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the Trois months ended March 31, 2019 et 2018 are summarized in the tables below:

Revenues for the Three Months Ended March 31,

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Augmenter
(Decrease)

Montant

Augmenter

Percent

EFT Processing

$

145,703

$

135,704

$

9,999

7

%

epay

176,114

176,845

(731

)

%

Money Transfer

256,581

238,836

17,745

7

%

Total

578,398

551,385

27,013

5

%

Corporate services, eliminations and other

(889

)

(870

)

(19

)

2

%

Total

$

577,509

$

550,515

$

26,994

5

%

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

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Increase (Decrease)
Montant

Augmenter
Percent

EFT Processing

$

16,768

$

11,547

$

5,221

45

%

epay

17,999

16,895

1,104

7

%

Money Transfer

30,774

26,454

4,320

16

%

Total

65,541

54,896

10,645

19

%

Corporate services, eliminations and other

(9,447

)

(9,424

)

(23

)

%

Total

$

56,094

$

45,472

$

10,622

23

%


Impact of changes in foreign currency exchange rates

Our revenues and local expenses are recorded in the functional currencies of our operating entities and translated into U.S. dollars for financial reporting purposes; therefore, amounts we earn outside the U.S. are negatively impacted by a stronger U.S. dollar and positively impacted by a weaker U.S. dollar. Considering the results by country and the associated functional currency, we estimate that our reported consolidated operating income for the premier quart de 2019 was 5% less, due to the changes in foreign currency exchange rates when compared to the same period of 2018.

To provide further perspective on the impact of foreign currency exchange rates, the following table shows the changes in values relative to the U.S. dollar of the currencies of the countries in which we have our most significant operations:

Average Translation Rate

Three Months Ended March 31,

Decrease Percent

Currency (dollars per foreign currency)

2019

2018

Australian dollar

$

0.7125

$

0.7859

(9

)%

British pound

$

1.3024

$

1.3917

(6

)%

euro

$

1.1354

$

1.2289

(8

)%

Hungarian forint

$

0.0036

$

0.0039

(8

)%

Indian rupee

$

0.0142

$

0.0155

(8

)%

Malaysian ringgit

$

0.2445

$

0.2550

(4

)%

New Zealand dollar

$

0.6813

$

0.7270

(6

)%

Polish zloty

$

0.2639

$

0.2941

(10

)%


COMPARISON OF OPERATING RESULTS FOR THE TROIS MONTHS ENDED MARCH 31, 2019 ET 2018

EFT PROCESSING SEGMENT

The following table presents the results of operations for the Trois months ended March 31, 2019 et 2018 for our EFT Processing Segment:

Three Months Ended
March 31,

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Increase (Decrease) Amount

Increase Percent

Total revenues

$

145,703

$

135,704

$

9,999

7

%

Dépenses d'exploitation:

Direct operating costs

83,776

81,837

1,939

2

%

Salaries and benefits

19,431

17,005

2,426

14

%

Selling, general and administrative

9,086

9,115

(29

)

%

Dépréciation et amortissement

16,642

16,200

442

3

%

Total des charges d'exploitation

128,935

124,157

4,778

4

%

Produit d'exploitation

$

16,768

$

11,547

$

5,221

45

%

Transactions processed (millions)

691

622

69

11

%

ATMs as of March 31,

42,034

38,358

3,676

dix

%

Average ATMs

40,918

37,651

3,267

9

%

Revenues

EFT Processing Segment total revenues for the Trois months ended March 31, 2019 étaient $145.7 million, an increase of $10.0 million ou 7% as compared to the same period in 2018. The increase in total revenues for the Trois months ended March 31, 2019 was primarily due to an increase in the number of ATMs under management in Europe. Specifically, the increase in the number of ATMs contributed to increases in the number of transactions processed. The transaction growth includes an increase in value-added transactions on the ATMs and point-of-sale terminals, including DCC, domestic and international surcharge, and foreign currency dispensing. Foreign currency exchange rate movements decreased total revenues by approximately $11.7 million pour le premier quart de 2019 as compared to the same period in 2018.

Average monthly revenues per ATM were $1,187 pour le Trois months ended March 31, 2019 par rapport à $1,201pour le Trois months ended March 31, 2018. Revenues per transaction were $0.21 pour le premier quart de 2019 par rapport à $0.22 pour le premier quart de 2018. The decrease in average monthly revenues per ATM for the premier quart de 2019 was primarily the result of the impact of the strengthening of the U.S. dollar against key foreign currencies, partly offset by an increase in value-added transactions.

Direct operating costs

EFT Processing Segment direct operating costs were $83.8 million pour le Trois months ended March 31, 2019, an increase of $1.9 million ou 2% as compared to the same period in 2018. Direct operating costs in the EFT Processing Segment consist primarily of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, data center operations-related personnel, as well as the processing centers’ facility-related costs and other processing center-related expenses and commissions paid to retail merchants, banks and card processors involved with POS DCC transactions. The increases in direct operating costs for the Trois months ended March 31, 2019 were primarily due to an increase in the number of ATMs under management, particularly our independent ATM network, partly offset by the impact of the strengthening of the U.S. dollar against key foreign currencies.


Bénéfice brut

Gross profit, which is calculated as revenues less direct operating costs, was $61.9 million pour le Trois months ended March 31, 2019, compared to $53.9 million pour le Trois months ended March 31, 2018. The increases in gross profit were primarily due to the growth in revenues from increases in ATMs under management, DCC transactions, domestic and international surcharge, and foreign currency dispensing. The net impact of the U.S. dollar strengthening against key foreign currencies partly offset the increase in gross profit for the premier quart de 2019. Gross profit as a percentage of revenues (“gross margin”) was 42.5% pour le Trois months ended March 31, 2019, as compared to 39.7% pour le Trois months ended March 31, 2018. Pour le Trois months ended March 31, 2019, the increase in gross margin was attributable to increases in DCC transactions, domestic and international surcharge, foreign currency dispensing, and also a higher volume of sales of POS devices in Greece in the premier quart de 2018 on which we earned a lower margin which did not occur in the current period.

Salaries and benefits

Salaries and benefits expense increased 2,4 millions de dollars ou 14% pour le Trois months ended March 31, 2019, compared to the same period in 2018. As a percentage of revenues, these costs increased to 13.3% pour le premier quart de 2019, compared to 12.5% pour le premier quart de 2018. The increases were primarily due to additional headcount to support an increase in the number of ATMs and POS devices under management.

Selling, general and administrative

Selling, general and administrative expenses for the Trois months ended March 31, 2019 étaient $9.1 million, which was consistent with the same period in 2018. As a percentage of revenues, selling, general and administrative expenses were 6.2% pour le Trois months ended March 31, 2019, compared to 6.7% pour le Trois months ended March 31, 2018.

Dépréciation et amortissement

Depreciation and amortization expense increased 0,4 million de dollars pour le Trois months ended March 31, 2019, compared to the same period in 2018. The increase was primarily attributable to the deployment of additional ATMs under management and software assets. As a percentage of revenues, depreciation and amortization expense was 11,4% pour le premier quart de 2019, as compared to 11.9% for the same period of 2018.

Produit d'exploitation

EFT Processing Segment operating income for the Trois months ended March 31, 2019 était $16.8 million, an increase of $5.2 million ou 45% as compared to the same period in 2018. EFT Processing Segment operating income for the Trois months ended March 31, 2019 increased primarily due to increases in the number of DCC transactions, domestic and international surcharge, and foreign currency dispensing as a result of the increased number of ATMs, partly offset by the impact of the strengthening of the U.S. dollar against key foreign currencies.

Operating income as a percentage of revenues (“operating margin”) was 11.5% pour le premier quart de 2019 par rapport à 8.5% pour le premier quart de 2018. The increase in operating margin was primarily due to higher operating revenues partially offset by expenses incurred to support the increased revenues and additional ATMs under management. Operating income per transaction was $0.02 for the both the premier quart de 2019 et 2018.


EPAY SEGMENT

The following table presents the results of operations for the Trois months ended March 31, 2019 et 2018 for our epay Segment:

Three Months Ended
March 31,

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Increase (Decrease) Amount

Increase (Decrease) Percent

Total revenues

$

176,114

$

176,845

$

(731

)

%

Dépenses d'exploitation:

Direct operating costs

133,525

134,922

(1,397

)

(1

)%

Salaries and benefits

14,753

14,417

336

2

%

Selling, general and administrative

8,052

8,733

(681

)

(8

)%

Dépréciation et amortissement

1,785

1,878

(93

)

(5

)%

Total des charges d'exploitation

158,115

159,950

(1,835

)

(1

)%

Produit d'exploitation

$

17,999

$

16,895

$

1,104

7

%

Transactions processed (millions)

338

258

80

31

%

Revenues

epay Segment total revenues for the Trois months ended March 31, 2019 étaient $176.1 million, a decrease of $0.7 million as compared to the same period in 2018. Foreign currency exchange rate movements decreased total revenues by approximately $11.8 million pour le premier quart de 2019 as compared to the same period in 2018.

Revenues per transaction were $0.52 pour le premier quarter compared to $0.69 for the same period in 2018. The decrease in revenues per transaction was primarily the result of the increase in a high-volume, low-margin transactions processed in India.

Direct operating costs

epay Segment direct operating costs were $133.5 million pour le Trois months ended March 31, 2019, a decrease of $1.4 million as compared to the same period in 2018. Direct operating costs in our epay Segment include the commissions we pay to retail merchants for the distribution and sale of prepaid mobile airtime and other prepaid products, expenses incurred to operate POS terminals and the cost of vouchers sold and physical gifts fulfilled. The decrease in direct operating costs for the premier quart de 2019 was primarily due to the net impact of the U.S. dollar strengthening against key foreign currencies partially offset by the increase in the commission paid to wholesalers.

Bénéfice brut

La marge brute était $42.6 million pour le Trois months ended March 31, 2019, as compared to $41.9 million pour le Trois months ended March 31, 2018. The increase was primarily due to the growth in digital media transactions processed, partly offset by a decrease in prepaid mobile transactions processed in certain markets and the net impact of the U.S. dollar strengthening against key foreign currencies.

During the Trois months ended March 31, 2019, the gross margin was 24.2% pour le Trois months ended March 31, 2019, as compared to 23.7% for the same period in 2018 due to the increase in the percentage of digital media transactions processed for which we earn a higher gross margin than mobile transactions.

Salaries and benefits

Salaries and benefits expense increased $0.3 million ou 2% pour le Trois months ended March 31, 2019, compared to the same period in 2018. The increase was mainly driven by increased headcount to support growth in the segment. As a percentage of revenues, salaries and benefits were 8.4% pour le Trois months ended March 31, 2019 which was generally consistent with 8.2% for the same period in 2018.


Selling, general and administrative

Selling, general and administrative expenses were $8.1 million pour le Trois months ended March 31, 2019, a decrease of 8% as compared to the same period in 2018. The decrease for the premier quart de 2019 was mainly due to higher promotional cost for certain digital media products in 2018 which did not recur in the current period. As a percentage of revenues, selling, general and administrative expenses were 4,6% pour le Trois months ended March 31, 2019 par rapport à 4.9% for the same period in 2018.

Dépréciation et amortissement

Depreciation and amortization expense primarily represents depreciation of POS terminals we place in retail stores and the amortization of acquired intangible assets. Depreciation and amortization expense was $1.8 million pour le Trois months ended March 31, 2019, a decrease of 5% as compared to the same period in 2018. As a percentage of revenues, depreciation and amortization expense was 1.0% pour le Trois months ended March 31, 2019 comparé à 1.1% pour le Trois months ended March 31, 2018.

Produit d'exploitation

epay Segment operating income for the Trois months ended March 31, 2019 était $18.0 million, an increase of $1.1 million as compared to the same period in 2018. Operating income for the Trois months ended March 31, 2019 improved as a result of the increased gross profit from the distribution of more digital media products, along with operating cost controls.

Operating margin increased to 10,2% pour le Trois months ended March 31, 2019 de 9.6% for the same period in 2018. The increase was mainly due to an increase in the percentage of revenues from digital media products which earn a higher margin than mobile transactions. Operating income per transaction decreased to $0.05 pour le Trois months ended March 31, 2019 de $0.07 for the same period in 2018. The decrease was primarily due to the increase in high volume, low margin transactions processed in India.


MONEY TRANSFER SEGMENT

The following table presents the results of operations for the Trois months ended March 31, 2019 et 2018 for the Money Transfer Segment:

Three Months Ended
March 31,

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Increase (Decrease) Amount

Increase (Decrease) Percent

Total revenues

$

256,581

$

238,836

$

17,745

7

%

Dépenses d'exploitation:

Direct operating costs

137,404

127,431

9,973

8

%

Salaries and benefits

51,156

47,357

3,799

8

%

Selling, general and administrative

29,109

29,699

(590

)

(2

)%

Dépréciation et amortissement

8,138

7,895

243

3

%

Total des charges d'exploitation

225,807

212,382

13,425

6

%

Produit d'exploitation

$

30,774

$

26,454

$

4,320

16

%

Transactions processed (millions)

26.6

24.3

2.3

9

%

Revenues

Money Transfer Segment total revenues for the Trois months ended March 31, 2019 étaient $256.6 million, an increase of $17.7 million ou 7% as compared to the same period in 2018. The increase in total revenues for the Trois months ended March 31, 2019 was primarily due to an increase in the number of money transfers processed, driven by growth in the U.S. and foreign agent and correspondent payout networks.

Revenues per transaction decreased to $9.65 pour le premier quart de 2019, de $9.83 for the same period in 2018. The decrease was primarily due to the impact of the U.S. dollar strengthening against key foreign currencies.

Direct operating costs

Money Transfer Segment direct operating costs were $137.4 million pour le Trois months ended March 31, 2019, an increase of $10.0 million ou 8% as compared to the same period in 2018. Direct operating costs in the Money Transfer Segment primarily consist of commissions paid to agents who originate money transfers on our behalf and correspondent agents who disburse funds to the customers’ destination beneficiaries, together with less significant costs, such as bank depository fees. The increase in direct operating costs for the Trois mois de 2019 was primarily due to growth in the number of money transfer transactions processed in both the U.S. and foreign markets.

Bénéfice brut

La marge brute était $119.2 million pour le Trois months ended March 31, 2019, respectively, as compared to $111.4 million pour le Trois months ended March 31, 2018. The increase in gross profit was primarily due to growth in the number of money transfer transactions processed in both the U.S. and foreign markets.

During the Trois months ended March 31, 2019, gross margin remained flat at 46.4%, as compared to 46.6% pour le Trois months ended March 31, 2018.

Salaries and benefits

Salaries and benefits expense increased $3.8 million ou 8% pour le Trois months ended March 31, 2019, as compared to the same period in 2018. The increase in salaries and benefits was primarily due to the expansion of our operations in the U.S. and foreign markets. As a percentage of revenues, salaries and benefits were essentially flat at 19.9% pour le Trois months ended March 31, 2019, as compared to 19,8% for the same period in 2018.

Selling, general, and administrative

Selling, general and administrative expenses for the Trois months ended March 31, 2019 étaient $29.1 million, a decrease of $0.6 million ou 2%, as compared to the same period in 2018. The decrease was primarily due to a decrease in the impact of the U.S. dollar strengthening against key foreign currencies partially offset by expenses incurred to support the growth of our money transfer services in both the U.S. and foreign markets.


As a percentage of revenues, selling, general and administrative expenses were 11.3% pour le Trois months ended March 31, 2019, as compared to 12.4% for the same period in 2018. Pour le premier quart de 2019, the decrease was primarily due to the increase in the number of money transfers processed, which did not require similar increases in support costs.

Dépréciation et amortissement

Depreciation and amortization primarily represents amortization of acquired intangible assets and depreciation of money transfer terminals, computers and software, leasehold improvements and office equipment. Depreciation and amortization expense increased $0.2 million ou 3% pour le Trois months ended March 31, 2019, as compared to the same period in 2018, largely due to the increased capital additions as a result of business growth.

As a percentage of revenues, depreciation and amortization expense was 3.2% pour le premier quart de 2019 comparé à 3.3% for the same period of 2018. The decrease was primarily due to certain intangible assets becoming fully amortized.

Produit d'exploitation

Money Transfer Segment operating income for the Trois months ended March 31, 2019 était $30.8 million, an increase of 4,3 millions de dollars ou 16% as compared to the same period of 2018. Operating income for the Trois months ended March 31, 2019 increased primarily due to the growth in the number of money transfers processed partly offset by the additional salaries and benefits costs incurred.

As a percentage of revenues, operating margin was 12.0% pour le Trois months ended March 31, 2019, as compared to 11.1% for the same period in 2018. Operating income per transaction increased to $1.16 pour le Trois months ended March 31, 2019, de $1.09 for the same period in 2018. The increase in operating margin and operating income per transaction was primarily due to the growth in the number of money transfers processed which did not require similar increases in support costs.

CORPORATE SERVICES

The following table presents the operating expenses for the Trois months ended March 31, 2019 et 2018 for Corporate Services:

Three Months Ended
March 31,

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Increase (Decrease) Amount

Increase (Decrease) Percent

Salaries and benefits

$

7,455

$

6,927

$

528

8

%

Selling, general and administrative

1,917

2,468

(551

)

(22

)%

Dépréciation et amortissement

75

29

46

159

%

Total des charges d'exploitation

$

9,447

$

9,424

$

23

%

Corporate operating expenses

Overall, operating expenses for Corporate Services were $9.4 million pour le Trois months ended March 31, 2019, which were consistent when compared to the same period in 2018. The operating expenses for the three months ended March 31, 2019 included an increase in share-based compensation, largely offset by a decrease in professional services fees.


OTHER INCOME (EXPENSE), NET

Three Months Ended
March 31,

Year-over-Year Change

(dollar amounts in thousands)

2019

2018

Increase (Decrease) Amount

Increase (Decrease) Percent

Interest income

$

343

$

296

$

47

16

%

Interest expense

(8,199

)

(7,606

)

(593

)

8

%

Loss from unconsolidated affiliates

(117

)

117

n/m

Foreign currency exchange (loss) gain, net

3,208

1,935

1,273

n/m

Loss on early extinguishment of debt

(928

)

(928

)

n/m

Other (loss) gains

25

31

(6

)

n/m

Other expense, net

$

(5,551

)

$

(5,461

)

$

(90

)

n/m

________________

n/m — Not meaningful

Interest income

The increase in interest income for the premier quart de March 31, 2019 was consistent compared to the same period in 2018.

Interest expense

The increase in interest expense for the Trois months ended March 31, 2019 compared to the same period in 2018 was primarily related to the issuance of the Convertible Notes partially offset by a decrease in the Credit Facility as the Company used the proceeds from the Convertible Notes to repay revolving credit loans under the Credit Facility.

Foreign currency exchange gain, net

Foreign currency exchange activity includes gains and losses on certain foreign currency exchange derivative contracts and the impact of remeasurement of assets and liabilities denominated in foreign currencies. Assets and liabilities denominated in currencies other than the local currency of each of our subsidiaries give rise to foreign currency exchange gains and losses. Foreign currency exchange gains and losses that result from remeasurement of these assets and liabilities are recorded in net income. The majority of our foreign currency exchange gains or losses are due to the remeasurement of intercompany loans which are not considered a long-term investment in nature and are in a currency other than the functional currency of one of the parties to the loan. For example, we make intercompany loans based in euros from our corporate division, which is composed of U.S. dollar functional currency entities, to certain European entities that use the euro as the functional currency. As the U.S. dollar strengthens against the euro, foreign currency exchange losses are recognized by our corporate entities because the number of euros to be received in settlement of the loans decreases in U.S. dollar terms. Conversely, in this example, in periods where the U.S. dollar weakens, our corporate entities will record foreign currency exchange gains.

We recorded net foreign currency exchange gains of $3.2 million pour le Trois months ended March 31, 2019, as compared to net foreign currency exchange gains of $1.9 million for the same period in 2018. These realized and unrealized foreign currency exchange losses and gains reflect the fluctuation in the value of the U.S. dollar against the currencies of the countries in which we operated during the respective periods.

INCOME TAX EXPENSE

The Company's effective income tax rate was 31.6% et 34.2% pour le Trois months ended March 31, 2019 et 2018, respectivement. The Company's effective income tax rate for the Trois months ended March 31, 2019 et 2018 were higher than the applicable statutory income tax rate of 21% as a result of certain foreign earnings of the Company being subject to higher local statutory income tax rates and the application to the Company of the U.S. global intangible low-taxed income ("GILTI") tax provision. The GILTI provision subjects the Company's current foreign earnings to U.S. taxation creating additional U.S. tax expense. The decrease in the effective tax rate for the premier quart de 2019 compared to the same period in 2018 is largely due to the tax effects of stock based compensation activity in 2019.


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Noncontrolling interests represents the elimination of net income or loss attributable to the minority shareholders’ portion of the following consolidated subsidiaries that are not wholly owned:

Subsidiary

Percent

Owned

Segment – Country

Movilcarga

95%

epay – Spain

Euronet China

85%

EFT – China

Euronet Pakistan

70%

EFT – Pakistan

Euronet Infinitium Solutions

65%

EFT – India

NET INCOME ATTRIBUTABLE TO EURONET

Net income attributable to Euronet was $34.5 million pour le Trois months ended March 31, 2019, an increase of $8.1 million as compared to the same period in 2018. The increase in net income for the premier quart de 2019 was primarily due to an increase in operating income of $10.6 million et un $1.3 million increase in net foreign currency exchange gain, partly offset by a $2.3 million increase in income tax expense, an increase in loss on early extinguishment on debt of $0.9 million, and an increase in interest expense of $0.6 million.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

À partir de March 31, 2019 et December 31, 2018, we had working capital, which is calculated as the difference between total current assets and total current liabilities, of $491.1 million et $709.2 million, respectivement. Our ratio of current assets to current liabilities at March 31, 2019 et December 31, 2018 était 1.28 et 1.51, respectivement. The decrease in the ratio was primarily driven by the Existing Convertible Notes and the current portion of operating lease liabilities being classified as current liabilities as of March 31, 2019.

We require substantial working capital to finance operations. In the Money Transfer Segment, we fund the payout of the majority of our consumer-to-consumer money transfer services before receiving the benefit of amounts collected from customers by agents. Working capital needs increase due to weekends, domestic and international banking holidays. As a result, we may report more or less working capital for the Money Transfer Segment based solely upon the day on which the reporting period ends. The epay Segment produces positive working capital, but much of it is restricted in connection with the administration of its customer collection and vendor remittance activities. In our EFT Processing Segment, we obtain a significant portion of the cash required to operate our ATMs through various cash supply arrangements, the amount of which is not recorded on Euronet's Consolidated Balance Sheets. However, in certain countries, we fund the cash required to operate our ATM network from borrowings under our revolving credit facilities and cash flows from operations. À partir de March 31, 2019, we had approximately $526 million of our own cash in use or designated for use in our ATM network, which is recorded in cash and cash equivalents and trade accounts receivable, for ATM withdrawals pending settlement, on the Consolidated Balance Sheet.

We had cash and cash equivalents of $1,216 million à March 31, 2019, of which $882 million was held outside of the United States and is expected to be indefinitely reinvested for continued use in foreign operations. Repatriation of these assets to the U.S. could have negative tax consequences.

The following table identifies cash and cash equivalents provided by/(used in) our operating, investing and financing activities for the Trois month periods ended March 31, 2019 et 2018 (in thousands):


Three Months Ended
March 31,

Liquidity

2019

2018

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

Operating activities

$

12,961

$

27,828

Investing activities

(32,986

)

(33,279

)

Financing activities

192,702

41,896

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

(12,387

)

12,525

Increase in cash and cash equivalents and restricted cash

$

160,290

$

48,970

Operating activity cash flow

Cash flows provided by operating activities were $13.0 million pour le premier quart de 2019 par rapport à $27.8 million pour le premier quart de 2018. The decrease is primarily due to fluctuations in working capital mainly associated with the timing of the settlement processes with content providers in the epay Segment and with correspondents in the Money Transfer Segment, partly offset by improved operating results.

Investing activity cash flow

Cash flows used in investing activities were $33.0 million pour le premier quart de 2019 par rapport à $33.3 million pour le premier quart de 2018. During the first quarter of 2018, we used $7.3 million for a business acquisition. There was no material acquisition in the first quarter of 2019. We used $31.4 million for purchases of property and equipment for the first quarter of 2019 compared to $24.4 million for the first quarter of 2018. Cash used for software development and other investing activities totaled 1,6 million de dollars for both the premier quart de 2019 et 2018.

Financing activity cash flow

Cash flows provided by financing activities were $192.7 million pour le premier quart de 2019 par rapport à $41.9 million pour le premier quart de 2018. Our financing activities for the premier quart de 2019 consisted of net borrowings of $203.1 million compared to net borrowings of $168.0 million pour le premier quart de 2018. The increase in net borrowings for the premier quart of 2019 compared to the same period of 2018 was the result of the issuance of $525.0 million of new convertible notes to fund the operating cash of our IAD networks, repay revolving credit facility borrowings and repurchase a portion of existing convertible notes. We repurchased $2.3 million et $126.6 million of our stock during the premier quart de 2019 et 2018, respectivement. During the premier quart of 2018, we repurchased $126.6 million of our shares and paid $1.6 million for the amount of payroll taxes represented by the common stock withheld on restricted stock vestings and stock option exercises compared to $2.3 million for the same period of 2019. We received proceeds from stock option exercises of $5.2 million et $2.3 million pour le premier quart de 2019 et 2018, respectivement.

Other sources of capital

Credit Facility – On October 17, 2018, the Company entered into a $1.0 billion unsecured credit agreement (the "Credit Facility") that expires on October 17, 2023. The Credit Facility allows for borrowings in Australian Dollars, British Pounds Sterling, Canadian Dollars, Czech Koruna, Danish Krone, Euros, Hungarian Forints, Japanese Yen, New Zealand Dollars, Norwegian Krone, Polish Zlotys, Swedish Krona, Swiss Francs, and US Dollars.

À partir de March 31, 2019, fees and interest on borrowings are based upon the Company's corporate credit rating (as defined in the Credit Facility) and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).

À partir de March 31, 2019, there were no borrowings outstanding under the Credit Facility and $46.2 million of stand-by letters of credit outstanding under the Credit Facility. The remaining $953.8 million under the Credit Facility was available for borrowing based upon the borrowing base and financial covenants in our Credit Facility.


Convertible debt – On March 18, 2019, we completed the sale of $525.0 million in principal amount of Convertible Senior Notes due 2049 (“Convertible Notes”). The Convertible Notes were issued pursuant to an indenture, dated as of March 18, 2019 (the "Indenture"), by and between the Company and U.S. Bank National Association , as trustee. The Convertible Notes have an interest rate of 0.75% per annum payable semi-annually in March and September, and are convertible into shares of Euronet Common Stock at a conversion price of approximately $188.73 per share if certain conditions are met (relating to the closing prices of Euronet Common Stock exceeding certain thresholds for specified periods). The Company used $94.2 million of the new debt to repurchase $49.0 million aggregate principal amount of the Company's outstanding 1,5% Convertible Senior Notes due 2044 (the "Existing Convertible Notes") from a limited number of holders in privately negotiated transactions. Additionally, some of the proceeds were used to payoff the revolving credit facility borrowings. The Company expects to use the remainder of the net proceeds for general corporate purposes, which may include redeeming the remaining Existing Convertible Notes, share repurchases or acquisitions.

The Company may not redeem the 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. No sinking fund is provided for the Convertible Notes.

Additionally, holders have the right to require the Company to repurchase for cash all or part of their Convertible Notes on each of March 15, 2025, March 15, 2029, March 15, 2034, March 15, 2039 and March 15, 2044 at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In addition, if a fundamental change, as defined in the Indenture, occurs prior to the maturity date, holders may require the Company to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Other debt obligations – Certain of our subsidiaries also have available credit lines and overdraft facilities to generally supplement short-term working capital requirements. À partir de March 31, 2019, there was $26.8 million outstanding under these other obligation arrangements. Short-term debt obligations, as of March 31, 2019 were primarily comprised of $333.9 million of Existing Convertible Notes which we announced on March 18, 2019 that we would fully redeem on May 28, 2019. Holders of the Existing Convertible Notes may surrender their notes for conversion into shares of the Company's common stock at any time prior to the close of business on the business day immediately preceding the Redemption Date. In accordance with the Existing Indenture, the Company has the right to settle the redemption in cash and shares or all shares. The Company intends to meet its redemption obligation on May 28, 2019 through the use of available cash and/or available borrowing capacity under its Credit Facility for the remaining $352.5 million principal amount of the Existing Convertible Notes together with the issuance of approximately 2.4 million shares of its Common Stock, subject to changes and its volume weighted average common stock trading price through May 22, 2019.

Other uses of capital

Capital expenditures and needs – Total capital expenditures, including capital lease expenditures, for the premier quart de 2019 were $35 million. These capital expenditures were made primarily for the purchase of ATMs to expand our independent ATM network in Europe, the purchase and installation of ATMs in key under-penetrated markets, the purchase of POS terminals for the epay and Money Transfer Segments, and office, data center and company store computer equipment and software. Total capital expenditures for 2019 are currently estimated to range from approximately $130 million to $140 million.

At current and projected cash flow levels, we anticipate that cash generated from operations, together with cash on hand and amounts available under our Credit Facility and other existing and potential future financing sources, will be sufficient to meet our debt, leasing and capital expenditure obligations. If our capital resources are not sufficient to meet these obligations, we will seek to refinance our debt and/or issue additional equity under terms acceptable to us. However, we can offer no assurances that we will be able to obtain favorable terms for the refinancing of any of our debt or other obligations or for the issuance of additional equity.

Inflation and functional currencies

Generally, the countries in which we operate have experienced low and stable inflation in recent years. Therefore, the local currency in each of these markets is the functional currency. Currently, we do not believe that inflation will have a significant effect on our results of operations or financial position. We continually review inflation and the functional currency in each of the countries where we operate.


OFF BALANCE SHEET ARRANGEMENTS

On occasion, we grant guarantees of the obligations of our subsidiaries and we sometimes enter into agreements with unaffiliated third parties that contain indemnification provisions, the terms of which may vary depending on the negotiated terms of each respective agreement. Our liability under such indemnification provisions may be subject to time and materiality limitations, monetary caps and other conditions and defenses. À partir de March 31, 2019, there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2018. To date, we are not aware of any significant claims made by the indemnified parties or parties to whom we have provided guarantees on behalf of our subsidiaries and, accordingly, no liabilities have been recorded as of March 31, 2019. See also Note 12, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

À partir de March 31, 2019, there have been no material changes outside the ordinary course of business in our future contractual obligations from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2018, other than those resulting from changes in the amount of debt outstanding discussed in the Liquidity and Capital Resources section.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

À partir de March 31, 2019, our total debt outstanding was $786.7 million. Of this amount, $759.8 million, net of debt discounts, or 97% of our total debt obligations, relates to our Convertible Notes and Existing Convertible Notes that have a fixed coupon rate. The $352.5 aggregate principal amount of the Existing Convertible Notes, accrue cash interest at a rate of 1.5% of the principal amount per annum. Based on quoted market prices, as of March 31, 2019, the fair value of our fixed rate Existing Convertible Notes was $660.8 million, compared to a carrying value of $333.9 million. Interest expense for these notes, including accretion and amortization of deferred debt issuance costs, has a weighted average interest rate of 4.7% annually. le $525 million aggregate principal amount of the Convertible Notes issued on March 18, 2019, accrue cash interest at a rate of 0.75% of the principal amount per annum. The fair value of the fixed rate Convertible Notes was $581.0 million à partir de March 31, 2019 based on quoted market prices, compared to a carrying value of $425.9 million. If we were to maximize the potential borrowings available under the Credit Facility and maintain these borrowings for one year, a 1% (100 basis points) increase in the applicable interest rate would result in additional annual interest expense to the Company of approximately $9.5 million.

The remaining $26.8 million, ou 3%, of our total debt obligations as of March 31, 2019, is related to borrowings by certain subsidiaries to fund, from time to time, working capital requirements. These arrangements generally are due within one year and accrue interest at variable rates.

Our excess cash is invested in instruments with original maturities of three months or less or in certificates of deposit that may be withdrawn at any time without penalty; therefore, as investments mature and are reinvested, the amount we earn will increase or decrease with changes in the underlying short-term interest rates.

Foreign currency exchange rate risk

Pour le premier quart de 2019, approximately 70% of our revenues were generated in non-U.S. dollar countries and we expect to continue generating a significant portion of our revenues in countries with currencies other than the U.S. dollar.

We are particularly vulnerable to fluctuations in exchange rates of the U.S. dollar to the currencies of countries in which we have significant operations, primarily the euro, British pound, Australian dollar, Polish zloty, Indian rupee, New Zealand dollar, Malaysian ringgit and Hungarian forint. À partir de March 31, 2019, we estimate that a 10% fluctuation in these foreign currency exchange rates would have the combined annualized effect on reported net income and working capital of approximately $120 million to $125 million. This effect is estimated by applying a 10% adjustment factor to our non-U.S. dollar results from operations, intercompany loans that generate foreign currency exchange gains or losses and working capital balances that require translation from the respective functional currency to the U.S. dollar reporting currency.

Additionally, we have other non-current, non-U.S. dollar assets and liabilities on our balance sheet that are translated to the U.S. dollar during consolidation. These items primarily represent goodwill and intangible assets recorded in connection with acquisitions in countries other than the U.S. We estimate that a 10% fluctuation in foreign currency exchange rates would have a non-cash impact on total comprehensive income of approximately $132 million to $137 million as a result of the change in value of these items during translation to the U.S. dollar. For the fluctuations described above, a strengthening U.S. dollar produces a financial loss, while a weakening U.S. dollar produces a financial gain.

We believe this quantitative measure has inherent limitations and does not take into account any governmental actions or changes in either customer purchasing patterns or our financing or operating strategies. Because a majority of our revenues and expenses is incurred in the functional currencies of our international operating entities, the profits we earn in foreign currencies are positively impacted by a weakening of the U.S. dollar and negatively impacted by a strengthening of the U.S. dollar. Additionally, our debt obligations are primarily in U.S. dollars; therefore, as foreign currency exchange rates fluctuate, the amount available for repayment of debt will also increase or decrease.

We use derivatives to minimize our exposures related to changes in foreign currency exchange rates and to facilitate foreign currency risk management services by writing derivatives to customers. Derivatives are used to manage the overall market risk associated with foreign currency exchange rates; however, we do not perform the extensive record-keeping required to account for the derivative transactions as hedges. Due to the relatively short duration of the derivative contracts, we use the derivatives primarily as economic hedges. Since we do not designate foreign currency derivatives as hedging instruments pursuant to the accounting standards, we record gains and losses on foreign exchange derivatives in earnings in the period of change.


A majority of our consumer-to-consumer money transfer operations involves receiving and disbursing different currencies, in which we earn a foreign currency spread based on the difference between buying currency at wholesale exchange rates and selling the currency to consumers at retail exchange rates. We enter into foreign currency forward and cross-currency swap contracts to minimize exposure related to fluctuations in foreign currency exchange rates. The changes in fair value related to these contracts are recorded in Foreign currency exchange (loss) gain, net on the Consolidated Statements of Income. À partir de March 31, 2019, we had foreign currency derivative contracts outstanding with a notional value of $338 million, primarily in Australian dollars, British pounds, Canadian dollars, euros and Mexican pesos, that were not designated as hedges and mature within a few days.

For derivative instruments our HiFX operations write for customers, we aggregate the foreign currency exposure arising from customer contracts, and hedge the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties as part of a broader foreign currency portfolio. The changes in fair value related to the total portfolio of positions are recorded in Revenues on the Consolidated Statements of Income. À partir de March 31, 2019, we held foreign currency derivative contracts outstanding with a notional value of $1.3 billion, primarily in U.S. dollars, euros, British pounds, Australian dollars and New Zealand dollars, that were not designated as hedges and for which the majority mature within the next twelve months.

We use longer-term foreign currency forward contracts to mitigate risks associated with changes in foreign currency exchange rates on certain foreign currency denominated other asset and liability positions. À partir de March 31, 2019, the Company had foreign currency forward contracts outstanding with a notional value of $166 million, primarily in euros and Polish zloty.

See Note 8, Derivative Instruments and Hedging Activities, to our Consolidated Financial Statements for additional information.

ITEM 4. CONTROLS AND PROCEDURES

Our executive management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act as of March 31, 2019. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the design and operation of these disclosure controls and procedures were effective as of such date to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Change in Internal Controls

There have not been any changes in internal control over financial reporting during the three months ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Effective January 1, 2019, the Company implemented certain new internal controls related to the required adoption of the new lease accounting standard Topic 842.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

The discussion regarding contingencies in Part I, Item 1 — Financial Statements (unaudited), Note 13, Litigation and Contingencies, to the unaudited consolidated financial statements in this report is incorporated herein by reference.

Currently, there are no legal or regulatory proceedings that management believes, either individually or in the aggregate, would have a material adverse effect on the Company's consolidated financial condition or results of operations. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These liabilities are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case or proceeding.


ITEM 1A. RISK FACTORS

Except as otherwise described herein, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC.

In accepting Visa and Mastercard logo’d cards, we are required to comply with rules issued by Visa and MasterCard that may be interpreted and applied in ways that are unfavorable to us.

Visa and Mastercard have each established rules for the acceptance of cards bearing their logos on ATM networks. Among other things, those rules set the fees paid by card issuers for ATM transactions on their cards (referred to as “interchange fees”) and determine whether and where we can charge cardholders direct access fees (sometimes referred to as a “surcharge”) or offer DCC transactions for cash withdrawals. Visa and Mastercard have a stated interest in reducing the amount of cash in circulation in order to promote card transactions and we believe they promote the interests of card issuers over acquirers of transactions such as ATM networks. Visa's and Mastercard’s rules are sometimes unclear, vary from country to country and are frequently modified, including in ways that are unfavorable to ATM networks such as ours. These rules negatively impact our business; for example, by limiting the levels of interchange fees we receive, prohibiting direct access fees in many markets and limiting our ability to offer DCC transactions. Visa has recently adopted a rule, applicable in July 2019, that would prohibit direct access fees on euro denominated cards in the eurozone. If Visa and/or Mastercard were to adopt more unfavorable rules or interpretations of rules that are harmful to our business, this could materially and adversely affect our business.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information with respect to shares of the Company's Common Stock that were purchased by the Company during the three months ended March 31, 2019.

Période

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (in thousands) (1)

January 1 – January 31, 2019

$

$

200,000

February 1 – February 28, 2019

$

200,000

March 1 – March 31, 2019

$

320,000

Total

$

(1) The Board of Directors has authorized a stock repurchase program ("Repurchase Program") allowing Euronet to repurchase up to $375 million in value or 10.0 million shares of stock through March 31, 2020. Euronet has repurchased $175 million of stock under the Repurchase Program. On March 11, 2019, in connection with the issuance of the 2049 Convertible Notes, the Board of Directors authorized an additional repurchase program of $120 million in value of Euronet’s common stock through March 11, 2021. Repurchases under either program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.


ITEM 6. EXHIBITS

Exhibit

La description

4.1

Indenture, dated March 18, 2019, between the Company and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 18, 2019 (File No. 001-31648) and incorporated herein by reference.

4.2

Form of 0.75% Convertible Senior Note due 2049 (included as Exhibit A to Exhibit 4.1 above)

31.1*

Section 302 — Certification of Chief Executive Officer

31.2*

Section 302 — Certification of Chief Financial Officer

32.1**

Section 906 — Certification of Chief Executive Officer

32.2**

Section 906 — Certification of Chief Financial Officer

101*

The following materials from Euronet Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2018 (unaudited) and December 31, 2018, (ii) Consolidated Statements of Income (unaudited) for the three months ended March 31, 2019 and 2018, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three ended March 31, 2019 and 2018, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three months ended March 31, 2019 and 2018 (v) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2019 and 2018, and (vi) Notes to the Unaudited Consolidated Financial Statements.

_________________________

* Filed herewith.

** Pursuant to Item 601(b)(32) of Regulation S-K, this Exhibit is furnished rather than filed with this Form 10-Q.

PLEASE NOTE: Pursuant to the rules and regulations of the Securities and Exchange Commission, we have filed or incorporated by reference the agreements referenced above as exhibits to this Quarterly Report on Form 10-Q. The agreements have been filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about the Company or its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about the Company or its business or operations on the date hereof.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

May 7, 2019

Euronet Worldwide, Inc.

By:

/s/ MICHAEL J. BROWN

Michael J. Brown

Directeur Général

By:

/s/ RICK L. WELLER

Rick L. Weller

Directeur financier

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