SEC Filing - Euronet Worldwide, Inc.

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eeft-20210930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-31648

EURONET WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware		74-2806888
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11400 Tomahawk Creek Parkway, Suite 300
Leawood,	Kansas	66211
(Address of principal executive offices)		(Zip Code)

(913) 327-4200

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	EEFT	Nasdaq Global Select Market
1.375% Senior Notes due 2026	EEFT26	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

On October 27, 2021, Euronet Worldwide, Inc. had 52,856,023 shares of common stock outstanding.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

	Table of Contents	Page
PART I—FINANCIAL INFORMATION		1
ITEM 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	1
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020	2
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2021 and 2020	3
	Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2021 and 2020	4
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	6
	Notes to the Unaudited Consolidated Financial Statements	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	38
ITEM 4.	Controls and Procedures	40
PART II—OTHER INFORMATION		40
ITEM 1.	Legal Proceedings	40
ITEM 1A.	Risk Factors	40
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
ITEM 6.	Exhibits	41
	Signatures	42

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	As of
	September 30, 2021			December 31, 2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,048,466		$	1,420,255
ATM cash	669,686			411,054
Restricted cash	3,626			3,334
Settlement assets	928,740			1,140,875
Trade accounts receivable, net of credit losses of $4,504 and $5,926	152,564			117,517
Prepaid expenses and other current assets	235,209			272,900
Total current assets	3,038,291			3,365,935
Operating right of use lease assets	165,327			162,074
Property and equipment, net of accumulated depreciation of $517,319 and $490,429	350,727			378,441
Goodwill	646,178			665,821
Acquired intangible assets, net of accumulated amortization of $180,100 and $175,210	102,238			121,883
Other assets, net of accumulated amortization of $60,908 and $55,710	223,557			232,557
Total assets	$	4,526,318		$	4,926,711
LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	928,740		$	1,140,875
Trade accounts payable	168,792			147,593
Accrued expenses and other current liabilities	369,283			404,021
Current portion of operating lease liabilities	54,210			52,436
Short-term debt obligations and current maturities of long-term debt obligations	985			797
Income taxes payable	53,147			36,359
Deferred revenue	67,677			73,360
Total current liabilities	1,642,834			1,855,441
Debt obligations, net of current portion	1,197,495			1,437,589
Operating lease obligations, net of current portion	115,289			106,502
Deferred income taxes	38,666			37,875
Other long-term liabilities	40,577			43,401
Total liabilities	3,034,861			3,480,808
Equity:
Euronet Worldwide, Inc. stockholders’ equity:
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; none issued	—			—
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,483,092 and 63,366,010	1,270			1,267
Additional paid-in-capital	1,260,283			1,228,446
Treasury stock, at cost, shares issued 10,627,621 and 10,631,961	(703,136		)	(703,032		)
Retained earnings	1,087,007			1,013,155
Accumulated other comprehensive loss	(154,048		)	(94,214		)
Total Euronet Worldwide, Inc. stockholders’ equity	1,491,376			1,445,622
Noncontrolling interests	81			281
Total equity	1,491,457			1,445,903
Total liabilities and equity	$	4,526,318		$	4,926,711

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues	$	816,560		$	664,351		$	2,183,916		$	1,776,061
Operating expenses:
Direct operating costs	484,438			407,598				1,389,770			1,117,065
Salaries and benefits	119,421			101,577				356,160			293,769
Selling, general and administrative	64,298			55,225				182,193			169,333
Goodwill and acquired intangible assets impairment	—			1,467				—			106,021
Depreciation and amortization	33,909			32,412				100,729			93,470
Total operating expenses	702,066			598,279				2,028,852			1,779,658
Operating income (loss)	114,494			66,072				155,064			(3,597	)
Other income (expense):
Interest income	153			139				539			867
Interest expense	(10,072		)	(9,477		)		(28,718	)		(27,594	)
Foreign currency exchange loss, net	(8,135		)	(1,368		)		(12,051	)		(17,679	)
Other gains, net	—			—				31			728
Other expense, net	(18,054		)	(10,706		)		(40,199	)		(43,678	)
Income (loss) before income taxes	96,440			55,366				114,865			(47,275	)
Income tax expense	(22,726		)	(15,051		)		(41,140	)		(26,423	)
Net income (loss)	73,714			40,315				73,725			(73,698	)
Net loss (income) attributable to noncontrolling interests	168			(66		)		127			64
Net income (loss) attributable to Euronet Worldwide, Inc.	$	73,882		$	40,249		$	73,852		$	(73,634	)

Earnings (loss) per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	1.40		$	0.77		$	1.40		$	(1.40	)
Diluted	$	1.37		$	0.76		$	1.37		$	(1.40	)

Weighted average shares outstanding:
Basic	52,829,386			52,294,522				52,799,199			52,712,030
Diluted	53,853,675			53,201,971				53,933,226			52,712,030

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021				2020		2021			2020
Net income (loss)	$	73,714		$	40,315		$	73,725		$	(73,698	)
Translation adjustment	(29,692		)	47,006			(59,907		)	19,360
Comprehensive income (loss)	44,022			87,321			13,818			(54,338		)
Comprehensive loss (income) attributable to noncontrolling interests	196			(133		)	200			11
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.	$	44,218		$	87,188		$	14,018		$	(54,327	)

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited, in thousands, except share data)

	Number of Shares Outstanding			Common Stock	Additional Paid-in Capital		Treasury Stock
Balance as of December 31, 2019	54,220,854		$	1,256	$	1,190,058	$	(463,704	)
Net income (loss)
Other comprehensive loss
Stock issued under employee stock plans	80,519			1		1,701		(249	)
Share-based compensation						6,338
Repurchase of shares	(2,095,683	)						(239,763	)
Balance as of March 31, 2020	52,205,690			1,257		1,198,097		(703,716	)
Net (loss) income
Other comprehensive income
Stock issued under employee stock plans	82,841			2		3,763		59
Share-based compensation						3,125
Balance as of June 30, 2020	52,288,531		$	1,259	$	1,204,985	$	(703,657	)
Net income
Other comprehensive income
Stock issued under employee stock plans	21,604					687		53
Share-based compensation						5,037
Balance as of September 30, 2020	52,310,135		$	1,259	$	1,210,709	$	(703,604	)

	Number of Shares Outstanding	Common Stock		Additional Paid-in Capital		Treasury Stock
Balance as of December 31, 2020	52,734,049	$	1,267	$	1,228,446	$	(703,032	)
Net (loss) income
Other comprehensive loss
Stock issued under employee stock plans	62,436		1		3,335		(482	)
Share-based compensation					8,492
Balance as of March 31, 2021	52,796,485		1,268		1,240,273		(703,514	)
Net income (loss)
Other comprehensive income
Stock issued under employee stock plans	25,769		1		1,199		267
Share-based compensation					10,984
Balance as of June 30, 2021	52,822,254	$	1,269	$	1,252,456	$	(703,247	)
Net income (loss)
Other comprehensive income
Stock issued under employee stock plans	33,217		1		1,022		111
Share-based compensation					6,805
Balance as of September 30, 2021	52,855,471	$	1,270	$	1,260,283	$	(703,136	)

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

(Unaudited, in thousands)

	Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance as of December 31, 2019	$	1,016,554		$	(164,890	)	$	68		$	1,579,342
Net income (loss)		1,921						(201	)		1,720
Other comprehensive loss					(59,777	)		(41	)		(59,818	)
Stock issued under employee stock plans											1,453
Share-based compensation											6,338
Repurchase of shares											(239,763	)
Balance as of March 31, 2020		1,018,475			(224,667	)		(174	)		1,289,272
Net (loss) income		(115,804	)					71			(115,733	)
Other comprehensive income					32,145			27			32,172
Stock issued under employee stock plans											3,824
Share-based compensation											3,125
Balance as of June 30, 2020		902,671			(192,522	)		(76	)		1,212,660
Net income		40,249						66			40,315
Other comprehensive income					46,939			67			47,006
Stock issued under employee stock plans											740
Share-based compensation											5,037
Balance as of September 30, 2020	$	942,920		$	(145,583	)	$	57		$	1,305,758

	Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance as of December 31, 2020	$	1,013,155		$	(94,214	)	$	281		$	1,445,903
Net (loss) income		(8,665	)					44		(8,621		)
Other comprehensive loss					(42,845	)		(56	)	(42,901		)
Stock issued under employee stock plans										2,854
Share-based compensation										8,492
Balance as of March 31, 2021		1,004,490			(137,059	)		269		1,405,727
Net income (loss)		8,635						(3	)	8,632
Other comprehensive income					12,675			11		12,686
Stock issued under employee stock plans										1,467
Share-based compensation										10,984
Balance as of June 30, 2021		1,013,125			(124,384	)		277			1,439,496
Net income		73,882						(168	)		73,714
Other comprehensive income					(29,664	)		(28	)		(29,692	)
Stock issued under employee stock plans											1,134
Share-based compensation											6,805
Balance as of September 30, 2021	$	1,087,007		$	(154,048	)	$	81		$	1,491,457

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Nine Months Ended September 30,
	2021			2020
Net income (loss)	$	73,725		$	(73,698	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	100,729			93,470
Share-based compensation	26,281			14,500
Unrealized foreign exchange loss, net	12,051			17,679
Deferred income taxes	1,412			(5,011		)
Goodwill and acquired intangible assets impairment	—			106,021
Accretion of convertible debt discount and amortization of debt issuance costs	15,099			13,996
Changes in working capital, net of amounts acquired:
Income taxes payable, net	17,464			(26,625		)
Trade accounts receivable	96,541			232,380
Prepaid expenses and other current assets	119,698			(25,917		)
Trade accounts payable	(209,069		)	(127,291		)
Deferred revenue	(2,782		)	(4,540		)
Accrued expenses and other current liabilities	47,254			25,110
Changes in noncurrent assets and liabilities	5,937			(19,658		)
Net cash provided by operating activities	304,340			220,416
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(451		)
Purchases of property and equipment	(66,058		)	(71,396		)
Purchases of other long-term assets	(6,171		)	(5,968		)
Other, net	1,277			742
Net cash used in investing activities	(70,952		)	(77,073		)
Cash flows from financing activities:
Proceeds from issuance of shares	6,443			6,564
Repurchase of shares	(979		)	(240,838		)
Borrowings from revolving credit agreements	3,539,100			2,018,600
Repayments of revolving credit agreements	(3,756,300		)	(2,018,600		)
Net borrowing (repayments) from short-term debt obligations	199			(5,032		)
Other, net	(4,754		)	(4,763		)
Net cash used in financing activities	(216,291		)	(244,069		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(82,667		)	32,042
Decrease in cash and cash equivalents and restricted cash	(65,570		)	(68,684		)
Cash and cash equivalents and restricted cash at beginning of period	2,099,508			1,817,379

Cash and cash equivalents and restricted cash at end of period	$	2,033,938		$	1,748,695

Supplemental disclosure of cash flow information:
Interest paid during the period	$	17,226		$	16,653
Income taxes paid during the period	$	28,752		$	50,300

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1) GENERAL

Organization

Euronet Worldwide, Inc. (the “Company” or “Euronet”) was established as a Delaware corporation on December 13, 1996 and succeeded Euronet Holding N.V. as the group holding company, which was founded and established in 1994. Euronet is a leading electronic payments provider. Euronet offers payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Euronet's primary product offerings include comprehensive automated teller machine (“ATM”), point-of-sale (“POS”), card outsourcing, card issuing and merchant acquiring services, electronic distribution of prepaid mobile airtime and other electronic payment products, and global money transfer services.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared from the records of the Company, in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, such unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the consolidated financial position and the results of operations, comprehensive income, changes in equity and cash flows for the interim periods. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2020, including the notes thereto, set forth in the Company’s 2020 Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include computing income taxes, estimating the useful lives and potential impairment of long-lived assets and goodwill, as well as allocating the purchase price to assets acquired and liabilities assumed in acquisitions and revenue recognition. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2021.

Seasonality

Euronet’s Electronic Funds Transfer ("EFT") Processing Segment normally experiences its heaviest demand for dynamic currency conversion ("DCC") services during the third quarter of the fiscal year, normally coinciding with the tourism season. Additionally, the EFT Processing and epay Segments are normally impacted by seasonality during the fourth quarter and first quarter of each year due to higher transaction levels during the holiday season and lower levels following the holiday season. Seasonality in the Money Transfer Segment varies by region of the world. In most markets, Euronet usually experiences increased demand for money transfer services from the month of May through the fourth quarter of each year, coinciding with the increase in worker migration patterns and various holidays, and its lowest transaction levels during the first quarter of the year.

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(2) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS

In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" which simplifies the accounting for convertible instruments by eliminating certain accounting models when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital. Under this ASU, certain debt instruments with embedded conversion features will be accounted for as a single liability measured at its amortized cost. Additionally, this ASU eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments. The new guidance is effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on the consolidated financial statements.

(3) PENDING ACQUISITION

In March 2021, the Company entered into an agreement to purchase the Piraeus Bank Merchant Acquiring business of Piraeus Bank for €300 million, or approximately $360 million. The proposed arrangement will include separate commercial agreements for a long-term strategic partnership with Piraeus Bank for collaborative product distribution, processing and customer referrals. The acquisition will expand the Company’s omnichannel payments strategy and position the Company in Greece’s growing market for merchant acquiring services. The closing is targeted for late 2021 and is subject to regulatory approvals, finalization of the commercial agreements, and customary closing conditions. The Company expects to finance the purchase price using cash on hand.

(4) SETTLEMENT ASSETS AND OBLIGATIONS

Settlement assets represent funds received or to be received from agents for unsettled money transfers and from merchants for unsettled prepaid transactions. The Company records corresponding settlement obligations relating to accounts payable. Settlement assets consist of cash and cash equivalents, restricted cash, accounts receivable and prepaid expenses and other current assets. Cash received by Euronet agents and merchants generally becomes available to the Company within two weeks after initial receipt by the business partner. Receivables from business partners represent funds collected by such business partners that are in transit to the Company.

Settlement obligations consist of accrued expenses for money transfers, content providers, and EFT customer deposits and accounts payable to agents and content providers. Money transfer accrued expenses represent amounts to be paid to transferees when they request funds. Most agents typically settle with transferees first then obtain reimbursement from the Company. Money order accrued expenses represent amounts not yet presented for payment. Due to the agent funding and settlement process, accrued expenses to agents represent amounts due to agents for money transfers that have not been settled with transferees.

	As of
(in thousands)	September 30, 2021		December 31, 2020
Settlement assets:
Settlement cash and cash equivalents	$	259,727	$	188,191
Settlement restricted cash	52,433		76,674
Accounts receivable, net of credit losses of $31,220 and $35,800	478,760		641,955
Prepaid expenses and other current assets	137,820		234,055
Total settlement assets	$	928,740	$	1,140,875
Settlement obligations:
Trade account payables	$	319,193	$	571,175
Accrued expenses and other current liabilities	609,547		569,700
Total settlement obligations	$	928,740	$	1,140,875

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

	As of
(in thousands)	September 30, 2021		December 31, 2020		September 30, 2020		December 31, 2019
Cash and cash equivalents	$	1,048,466	$	1,420,255	$	1,008,183	$	786,081
Restricted cash	3,626		3,334		14,204		34,301
ATM cash	669,686		411,054		409,683		665,641
Settlement cash and cash equivalents	259,727		188,191		272,467		282,188
Settlement restricted cash	52,433		76,674		44,158		49,168
Cash and cash equivalents and restricted cash at end of period	$	2,033,938	$	2,099,508	$	1,748,695	$	1,817,379

(5) STOCKHOLDERS' EQUITY

Earnings (Loss) Per Share

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

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding	52,829,386	52,294,522	52,799,199	52,712,030
Incremental shares from assumed exercise of stock options and vesting of restricted stock	1,024,289	907,449	1,134,027	—
Diluted weighted average shares outstanding	53,853,675	53,201,971	53,933,226	52,712,030

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

The Company issued Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019. The Company's Convertible Notes currently have a settlement feature requiring the Company upon conversion to settle the principal amount of the debt and any conversion value in excess of the principal value ("conversion premium"), for cash or shares of the Company's common stock or a combination thereof, at the Company's option. The Company has stated its intent to settle any conversion of these notes by paying cash for the principal value and issuing common stock for any conversion premium. Accordingly, the Convertible Notes were included in the calculation of diluted earnings (loss) per share if their inclusion was dilutive. The dilutive effect increases the more the market price exceeds the conversion price. The Convertible Notes would only have a dilutive effect if the market price per share of common stock exceeds the conversion price of $188.73 per share. The market price per share of common stock was $127.28 on September 30, 2021 and $91.10 on September 30, 2020, therefore, according to ASC Topic 260, Earnings per Share (“ASC 260”), there was no dilutive effect of the assumed conversion of the debentures for the three and nine months ended September 30, 2021 and 2020. See Note 9, Debt Obligations, to the consolidated financial statements for more information about the Convertible Notes.

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Share Repurchases

On March 11, 2019, in connection with the issuance of the Convertible Notes, the Board of Directors authorized a repurchase program of $120 million in value of the Company's common stock through March 11, 2021. On February 26, 2020, the Company put a repurchase program in place to repurchase up to $250 million in value, but not more than 5.0 million shares of common stock through February 28, 2022. For the three and nine months ended September 30, 2021, there were no repurchases of stock under the repurchase programs. Repurchases under the current program may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) consists entirely of foreign currency translation adjustments. The Company recorded a foreign currency translation loss of $29.7 million and $59.9 million for the three and nine months ended September 30, 2021, respectively, and a gain of $47.0 million and $19.4 million for the three and nine months ended September 30, 2020, respectively. There were no reclassifications of foreign currency translation into the consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020.

(6) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

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


(in thousands)		Acquired Intangible Assets			Goodwill		Total Intangible Assets
Balance as of December 31, 2020	$	121,883		$	665,821		$	787,704
Decreases:
Acquisition	—			—			—
Amortization	(17,388		)	—			(17,388		)
Foreign currency exchange rate changes	(2,257		)	(19,643		)	(21,900		)
Balance as of September 30, 2021	$	102,238		$	646,178		$	748,416

Of the total goodwill balance of $646.2 million as of September 30, 2021, $393.9 million relates to the Money Transfer Segment, $131.0 million relates to the epay Segment and the remaining $121.3 million relates to the EFT Processing Segment. Estimated amortization expense on acquired intangible assets with finite lives as of September 30, 2021, is expected to total $5.6 million for the remainder of 2021, $21.2 million for 2022, $16.3 million for 2023, $9.6 million for 2024, $6.3 million for 2025 and $6.2 million for 2026.

(7) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:


	As of
(in thousands)	September 30, 2021		December 31, 2020
Accrued expenses	$	339,023	$	331,713
Derivative liabilities	25,498		65,905
Current portion of finance lease obligations	4,762		6,403
Total	$	369,283	$	404,021

(8) UNEARNED REVENUES

The Company records deferred revenues when cash payments are received or due in advance of its performance. The decrease in the deferred revenue balance for the nine months ended September 30, 2021 is driven by $39.7 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, offset by $45.4 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.

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(9) DEBT OBLIGATIONS

Debt obligations consist of the following:

	As of
(in thousands)	September 30, 2021			December 31, 2020
Credit Facility:
Revolving credit agreement	$	53,200		$	270,400
Convertible Debt:
0.75% convertible notes, unsecured, due 2049	464,161			452,228

1.375% Senior Notes, due 2026	694,860			732,840

Other obligations	1,054			850

Total debt obligations	1,213,275			1,456,318
Unamortized debt issuance costs	(14,795		)	(17,932		)
Carrying value of debt	1,198,480			1,438,386
Short-term debt obligations and current maturities of long-term debt obligations	(985		)	(797		)
Long-term debt obligations	$	1,197,495		$	1,437,589

Credit Facility

On October 17, 2018, the Company entered into an unsecured revolving credit agreement (the "Credit Facility") for $1.0 billion that expires on October 17, 2023. In May 2021, an additional lender joined the Credit Facility which increased the revolving commitment by $30 million. Fees and interest on borrowings are based upon the Company's corporate credit rating and are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over London Inter-Bank Offered Rate (“LIBOR”) or a margin over the base rate, as selected by the Company, with the applicable margin ranging from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans). The Credit Facility allows for borrowings in Australian dollars, British pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys, Swedish krona, Swiss francs and U.S. dollars. The Credit Facility contains a $200 million sublimit for the issuance of letters of credit, a $50 million sublimit for U.S. dollar swingline loans, and a $90 million sublimit for certain foreign currencies swingline loans. The Credit Facility contains customary affirmative and negative covenants, events of default and financial covenants. The Company was in compliance with all debt covenants as of September 30, 2021.

Convertible Debt

On March 18, 2019, the Company completed the sale of $525.0 million of Convertible Senior Notes ("Convertible Notes"). The Convertible Notes mature in March 2049 unless redeemed or converted prior to such date, 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 price of Euronet common stock exceeding certain thresholds for specified periods). Holders of the Convertible Notes have the option to require the Company to purchase their notes on each of March 15, 2025, March 15, 2029, March 15, 2034, March 15, 2039 and March 15, 2044 at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.

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In accordance with ASC 470-20-30-27, proceeds from the issuance of convertible debt is allocated between debt and equity components so that debt is discounted to reflect the Company's nonconvertible debt borrowing rate. ASC 470-20-35-13 requires the debt discount to be amortized over the period the convertible debt is expected to be outstanding as additional non-cash interest expense. The allocation resulted in an increase to additional paid-in capital of $99.7 million for the Convertible Notes.

Contractual interest expense for the Convertible Notes was $1.0 million and $3.0 million for the three and nine months ended September 30, 2021, respectively, and $1.0 million and $3.0 million for the three and nine months ended September 30, 2020, respectively. Accretion expense for the Convertible Notes was $4.0 million and $11.9 million for the three and nine months ended September 30, 2021, respectively, and $3.8 million and $11.4 million for the three and nine months ended September 30, 2020, respectively. The effective interest rate was 4.4% for the three and nine months ended September 30, 2021. As of September 30, 2021, the unamortized discount was $60.8 million and will be amortized through March 2025.

1.375% Senior Notes due 2026

On May 22, 2019, the Company completed the sale of €600 million ($669.9 million) aggregate principal amount of Senior Notes that expire in May 2026 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 1.375% per year, payable annually in arrears commencing May 22, 2020, until maturity or earlier redemption. As of September 30, 2021, the Company has outstanding €600 million ($694.9 million) principal amount of the Senior Notes. In addition, the Company may redeem some or all of these notes on or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.

Other Obligations

Certain of the Company's subsidiaries have available lines of credit and overdraft credit facilities that generally provide for short-term borrowings that are used from time to time for working capital purposes. As of September 30, 2021 and December 31, 2020, borrowings under these arrangements were $1.1 million and $0.9 million, respectively.

(10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to foreign currency exchange risk resulting from (i) the collection of funds or the settlement of money transfer transactions in currencies other than the U.S. Dollar, (ii) derivative contracts written to its customers in connection with providing cross-currency money transfer services and (iii) certain foreign currency denominated other asset and liability positions. The Company enters into foreign currency derivative contracts, primarily foreign currency forwards and cross-currency swaps, to minimize its exposure related to fluctuations in foreign currency exchange rates. As a matter of Company policy, the derivative instruments used in these activities are economic hedges and are not designated as hedges under ASC Topic 815, Derivatives and Hedging ("ASC 815"), primarily due to either the relatively short duration of the contract term or the effects of fluctuations in currency exchange rates are reflected concurrently in earnings for both the derivative instrument and the transaction and have an offsetting effect.

Foreign Currency Exchange Contracts - Ria Operations and Corporate

In the United States, the Company uses short-duration foreign currency forward contracts, generally with maturities up to 14 days, 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. The Company had foreign currency forward contracts outstanding in the U.S. with a notional value of $275 million and $246 million as of September 30, 2021 and December 31, 2020, respectively. The foreign currency forward contracts consist primarily in Australian dollars, Canadian dollars, British pounds sterling, euro and Mexican pesos.

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In addition, the Company uses forward contracts, typically with maturities from a few days to less than one year, to offset foreign exchange rate fluctuations on certain short-term borrowings that are payable in currencies other than the U.S dollar. The Company had foreign currency forward contracts outstanding with a notional value of $46 million and $454 million as of September 30, 2021 and December 31, 2020, respectively, primarily in euro.

Foreign Currency Exchange Contracts - xe Operations

xe 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. xe aggregates its foreign currency exposures arising from customer contracts and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. Foreign exchange revenues from xe's total portfolio of positions were $20.1 million and $58.5 million for the three and nine months ended September 30, 2021, respectively, and $14.4 million and $45.7 million for the three and nine months ended September 30, 2020, respectively. All of the derivative contracts used in the Company's xe operations are economic hedges and are not designated as hedges under ASC 815. The duration of these derivative contracts is generally less than one year.

The fair value of xe'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. xe 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. xe does not expect any significant losses from counterparty defaults.

The aggregate equivalent U.S. dollar notional amount of foreign currency derivative customer contracts held by the Company in its xe operations as of September 30, 2021 and December 31, 2020 was approximately $

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