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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 June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                                                          For the transition period from
to
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  No ☐
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  No ☐
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 
o
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
On August 1, 2023, Euronet Worldwide, Inc. had 49,659,298 shares of common stock outstanding.
 

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Table of Contents

 

Page

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited) 1
Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 1
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022 2
Consolidated Statements of Comprehensive Income (loss) for the Three and Six Months Ended June 30, 2023 and 2022 3
Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2023 and 2022 4
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 6
Notes to the Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25
Item 3. Quantitative and Qualitative Disclosures About Market Risk 41
Item 4. Controls and Procedures 42
PART II—OTHER INFORMATION
Item 1. Legal Proceedings 42
Item 1A. Risk Factors 43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43
Item 6. Exhibits 44
Signatures 45

 



 

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
(In millions, except share and per share data) 
 
As of

 
June 30,
2023

 
December 31,
2022

 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents 
$
1,137.5
 
$
1,131.2
ATM cash
776.3
 
515.6
Restricted cash
14.4
 
7.4
Settlement assets
1,068.9
 
1,442.7
Trade accounts receivable, net of credit losses of $4.6 and $4.0
242.6
 
270.8
Prepaid expenses and other current assets
304.9
 
359.0
Total current assets
3,544.6
 
3,726.7
Operating right of use lease assets
146.2
 
149.7
Property and equipment, net of accumulated depreciation of $624.0 and $576.4
336.2
 
336.6
Goodwill
838.0
 
828.3
Acquired intangible assets, net of accumulated amortization of $213.6 and $199.2
177.1
 
188.3
Other assets, net of accumulated amortization of $72.6 and $68.0
178.9
 
174.0
Total assets
$
5,221.0
 
$
5,403.6
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Settlement obligations
$
1,068.9
 
$
1,442.7
Trade accounts payable
190.4
 
222.4
Accrued expenses and other current liabilities
435.1
 
505.8
Current portion of operating lease liabilities
49.9
 
50.2
Short-term debt obligations and current maturities of long-term debt obligations
450.1
 
0.1
Income taxes payable
82.5
 
67.5
Deferred revenue
60.3
 
65.4
Total current liabilities
2,337.2
 
2,354.1
Debt obligations, net of current portion
1,306.5
 
1,609.1
Operating lease obligations, net of current portion
99.3
 
102.6
Deferred income taxes
31.2
 
28.4
Other long-term liabilities
65.1
 
65.0
Total liabilities
3,839.3
 
4,159.2
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 64,194,917 and 64,091,387
1.3
 
1.3
Additional paid-in-capital
1,280.3
 
1,251.8
Treasury stock, at cost, shares issued 14,539,373 and 14,269,645
(1,133.7
)
 
(1,105.8
)
Retained earnings
1,454.5
 
1,348.3
Accumulated other comprehensive loss
(220.2
)
 
(251.0
)
Total Euronet Worldwide, Inc. stockholders’ equity
1,382.2
 
1,244.6
Noncontrolling interests
(0.5
)
 
(0.2
)
Total equity
1,381.7
 
1,244.4
Total liabilities and equity
$
5,221.0
 
$
5,403.6
 
See accompanying notes to the unaudited consolidated financial statements.


1


 

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
(Unaudited, in millions, except share and per share data)

 

Three Months Ended
June 30,


Six Months Ended
June 30,

 

2023



2022



2023



2022

Revenues
$
939.1


$
843.3


$
1,726.3


$
1,561.8

Operating expenses:














Direct operating costs, exclusive of depreciation

558.1



500.7



1,049.7



958.9

Salaries and benefits

149.4



131.3



291.3



258.1

Selling, general and administrative

75.3



74.2



150.5



138.0

Depreciation and amortization

33.7



36.0



66.6



69.0

Total operating expenses

816.5



742.2



1,558.1



1,424.0

Operating income

122.6



101.1



168.2



137.8

Other income (expense):















Interest income

3.5



0.2



6.1



0.3

Interest expense

(14.0
)


(8.8
)


(24.1
)


(14.9
)
Foreign currency exchange gain (loss), net

6.3


(14.7
)

5.2


(20.2 )
Other gains (losses), net

(0.1
)


-



(0.1
)


0.2

Other expense, net

(4.3
)


(23.3
)


(12.9
)


(34.6
)
Income before income taxes

118.3



77.8



155.3



103.2

Income tax expense

(32.3
)


(20.7
)


(49.5
)


(37.9
)
Net income

86.0



57.1



105.8



65.3

Net loss attributable to noncontrolling interests

0.1



0.2



0.4



0.2

Net income attributable to Euronet Worldwide, Inc.
$
86.1


$
57.3


$
106.2


$
65.5

 















Earnings per share attributable to Euronet Worldwide, Inc. stockholders:















Basic
$
1.73


$
1.13


$
2.14


$
1.29

Diluted
$
1.65


$
1.08


$
2.05


$
1.25

Weighted average shares outstanding:















Basic

49,637,589



50,394,610



49,724,478



50,726,281

Diluted

52,871,415



53,766,914



52,918,519



54,133,724

 
See accompanying notes to the unaudited consolidated financial statements.
 
2


 
EURONET WORLDWIDE, INC. AND SUBSIDIARIES
(Unaudited, in millions)









 

Three Months Ended
June 30,



Six Months Ended
June 30,

 

2023



2022



2023


2022
Net income
$
86.0


$
57.1


$ 105.8

$ 65.3
Translation adjustment

10.0


(88.3
)

30.8


(109.3 )
Comprehensive income (loss)

96.0


(31.2 )

136.6


(44.0 )
Comprehensive income (loss) attributable to noncontrolling interests 

(0.1
)


(0.3
)

(0.3)


(0.3 )
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.
$
95.9

$
(31.5
)
$ 136.3

$ (44.3 )
 
See accompanying notes to the unaudited consolidated financial statements.
 
3


 
 EURONET WORLDWIDE, INC. AND SUBSIDIARIES
(Unaudited, in millions, except share data)
 
 
 
Number of
Shares Outstanding
 
Common
Stock
 
Additional
Paid-in Capital
 
Treasury
Stock
Balance as of December 31, 2021
 
51,147,884
 
$
1.3
 
$
1,274.1
 
$
(931.2
)
Net (loss) income
 
 
 
 
 
 
Other comprehensive loss
 
 
 
 
 
 
Stock issued under employee stock plans
 
40,173
 
0.0
 
2.0
 
0.1

Share-based compensation
 
 
 
9.8
 
 
Repurchase of shares

(639,535
)








(70.4 )
Adoption of ASU 2020-06







(74.1
)



Balance as of March 31, 2022
 
50,548,522
 
1.3
 
1,211.8
 
(1,001.5
)
Net income (loss)











Other comprehensive loss











Stock issued under employee stock plans

31,233



0.0



1.3



(0.1
)
Share-based compensation







10.1




Repurchase of shares

(1,000,000
)








(104.6
)
Balance as of June 30, 2022

49,579,755


$
1.3


$
1,223.2


$
(1,106.2
)
 
 
 
Number of
Shares Outstanding
 
Common
Stock
 
Additional
Paid-in Capital
 
Treasury
Stock

Balance as of December 31, 2022
 
49,822,707
 
$
1.3
 
$
1,251.8
 
$
(1,105.8
)
Net income (loss)
 
 
 
 
 


 
 
Other comprehensive income
 
 
 
 
 
 
 
Stock issued under employee stock plans
 
79,859
 
 
0.5
 
0.5
Share-based compensation
 
 
 
 
14.3
 
 
Repurchase of shares
(276,400
)
(28.3
)
Balance as of  March 31, 2023
 
49,626,166
 
1.3
 
1,266.6
 
(1,133.6
)
Net income (loss)












Other comprehensive income












Stock issued under employee stock plans

30,188







1.3




Share-based compensation








12.4





Repurchase of shares

(810
)










(0.1
)
Balance as of June 30, 2023

49,655,544


$
1.3


$
1,280.3


$
(1,133.7
)
 
See accompanying notes to the unaudited consolidated financial statements.
 
4


 
EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
(Unaudited, in millions)
 
 
 Retained Earnings

 
Accumulated Other
Comprehensive Loss

 
Noncontrolling
Interests

 
Total

Balance as of December 31, 2021
$
1,083.9
 
$
(172.6
)
 
$
 
$
1,255.5
Net income (loss)
8.3
 
 
 
 
8.3
Other comprehensive loss
 
 
(21.1
)
 

 
(21.1
)
Stock issued under employee stock plans
 
 
 
 
 
 
2.1
Share-based compensation
 
 
 
 
 
 
9.8
Repurchase of shares












(70.4
)
Adoption of ASU 2020-06

33.4










(40.7
)
Balance as of March 31, 2022
1,125.6
 
(193.7
)
 
 
1,143.5
Net income (loss)

57.3






(0.2
)


57.1

Other comprehensive loss



(88.2
)


(0.1
)


(88.3
)
Stock issued under employee stock plans











1.2

Share-based compensation










10.1

Repurchase of shares










(104.6
)
Balance as of June 30, 2022
$
1,182.9


$
(281.9
)

$
(0.3
)

$
1,019.0

 
 
 Retained Earnings

 
Accumulated Other
Comprehensive Loss

 
Noncontrolling
Interests

 
Total

Balance as of December 31, 2022
$
1,348.3
 
$
(251.0
)
 
$
(0.2
)
 
$
1,244.4
Net income (loss)
20.1
 
 
 
(0.3
)
 
19.8
Other comprehensive income
 
 
20.8
 
0.1
 
20.9
Stock issued under employee stock plans
 
 
 
 
 
 
1.0
Share-based compensation
 
 
 
 
 
 
14.3
Repurchase of shares
(28.3
)
Balance as of March 31, 2023
1,368.4
 
(230.2
)
 
(0.4
)
 
1,272.1
Net income (loss)

86.1






(0.1
)


86.0

Other comprehensive income





10.0





10.0

Stock issued under employee stock plans











1.3

Share-based compensation











12.4

Repurchase of shares












(0.1
)
Balance as of June 30, 2023
$
1,454.5


$
(220.2
)

$
(0.5
)

$
1,381.7

 
See accompanying notes to the unaudited consolidated financial statements.
 
5


 
EURONET WORLDWIDE, INC. AND SUBSIDIARIES
(Unaudited, in millions)
 
 
Six Months Ended June 30,


2023
2022

Net income
$
105.8
 
$
65.3
Adjustments to reconcile net income to net cash provided by operating activities: 
 
 
 
Depreciation and amortization
66.6
 
69.0
Share-based compensation
26.8
 
19.9
Unrealized foreign exchange (gain) loss, net
(5.2
)
 
20.2
Deferred income taxes
(2.3
)
 
3.4
Amortization of debt issuance costs
2.0
 
2.4
Changes in working capital, net of amounts acquired:
 
Income taxes payable, net
13.6
 
(9.4
)
Trade accounts receivable, including amounts in settlement assets
367.3
 
58.2
Prepaid expenses and other current assets, including amounts in settlement assets
17.2
 
(153.3
)
Trade accounts payable, including amounts in settlement obligations
(298.5
)
 
(119.5
)
Deferred revenue
(6.4
)
 
(9.9
)
Accrued expenses and other current liabilities, including amounts in settlement obligations
(58.4
)
 
255.5
Changes in noncurrent assets and liabilities
(8.3
)
 
(21.1
)
Net cash provided by operating activities
220.2
 
180.7
Cash flows from investing activities:
 
 
Acquisitions, net of cash acquired
0.2
 
(330.0
)
Purchases and proceeds of property and equipment
(41.9
)
 
(53.1
)
Purchases of other long-term assets
(3.9
)
 
(3.9
)
Other, net
0.1
 
(0.0
)
Net cash used in investing activities
(45.5
)
 
(387.0
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of shares
2.4
 
3.7
Repurchase of shares
(29.3
)
 
(175.3
)
Borrowings from credit agreements
3,853.1
 
4,049.1
Repayments of credit agreements 
(3,720.3
)
 
(3,385.4
)
Repayments of capital lease obligations
(1.6
)
 
(2.2
)
Repayments of long-term debt obligations

1.3

Other, net
0.1
 
Net cash provided by financing activities
104.4
 
491.2
Effect of exchange rate changes on cash and cash equivalents and restricted cash
(77.4
)
 
(195.2
)
Increase in cash and cash equivalents and restricted cash
201.7
 
89.7
Cash and cash equivalents and restricted cash at beginning of period
1,990.9
 
2,086.1
 
 


 
 


Cash and cash equivalents and restricted cash at end of period
$
2,192.6
 
$
2,175.8
 
 
 
 
Supplemental disclosure of cash flow information:
 
 
 
Interest paid during the period
$
29.7
 
$
15.9
Income taxes paid during the period
$
36.0
 
$
47.1

 

See accompanying notes to the unaudited consolidated financial statements.

 

6


 
EURONET WORLDWIDE, INC. AND SUBSIDIARIES

(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 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 international payment 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 Company's audited consolidated financial statements for the year ended December 31, 2022, including the notes thereto, set forth in the Company's 2022 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, 2023.
Seasonality

Euronet’s 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. Epay Segment is 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. Also, epay sells large loyalty rewards campaigns to retailers, which could be deployed in any given quarter and will impact the activity in that quarter accordingly. 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.

 
7


 

(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 Company adopted this standard on January 1, 2022 using the modified retrospective approach, which resulted in the Company's Convertible Senior Notes Due 2049 being recognized as a single liability. As a result of the adoption of this standard, the Company recorded a $99.7 million decrease to additional paid-in capital, a $56.8 million decrease in debt discounts and a $42.9 million increase in retained earnings. The adoption of this standard also impacted the Company's deferred tax liability by decreasing the Company's deferred tax liability by $15.0 million, decreasing retained earnings by $10.6 million, and increasing additional paid-in capital by $25.6 million. Additionally, the elimination of the treasury stock method increased the number of dilutive shares used in the diluted earnings per share calculation, if dilutive, by 2.8 million shares. 

 

(3) ACQUISITIONS

 

In accordance with ASC 805, the Company allocates the purchase price of its acquisitions to the tangible assets, liabilities and intangible assets acquired based on fair values. Any excess purchase price over those fair values is recorded as goodwill. The fair value assigned to intangible assets acquired is supported by valuations using estimates and assumptions provided by management. For certain large acquisitions, management engages an appraiser to assist in the valuation process. 

 

On March 15, 2022, the Company completed the acquisition of the Merchant Acquiring Business of Piraeus Bank ("PBMA"). The acquisition includes 205,000 POS terminals at 170,000 merchants throughout Greece, as well as Piraeus Bank’s online merchant acquiring business and expands Euronet’s omnichannel payments strategy where the Company uses its proprietary technology to provide cash, card-based acquiring solutions, alternative payment acquiring, online acquiring, tokenized payment services and other payment products. Additionally, the acquisition includes a long-term commercial framework agreement between Piraeus Bank and Euronet which includes collaborative product distribution, processing and customer referrals. 

 

The purchase price was €317.8 million, or approximately $350.6 million, which includes $331.0 million cash paid at closing, $4.4 million cash paid for surplus working capital and $15.2 million of estimated contingent consideration for a ten-year earn out contingent on performance targets outlined in the commercial framework agreement. The contingent consideration is related to a percentage of the net fee income received during the ten-year period of the commercial framework agreement and there is no contractual maximum amount of consideration under this agreement. 

 

The acquisition has been accounted for as a business combination in accordance with U.S. GAAP and the results of operations have been included from the date of acquisition in the EFT Processing Segment. 

 

The following table presents the final fair value that was allocated to PBMA's Euronet Merchant Services' (EMS) assets and liabilities based upon fair values as determined by the Company. The valuation process to determine the fair values is complete. For the year ended December 31, 2022, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the effective time of the acquisition. These adjustments primarily included an adjustment to the accrued expenses and other current liabilities related to the surplus working capital of $4.4 million and some other immaterial adjustments.

 

8


 

(in millions)

 

As of March 15, 2022


Other current assets

 

$

1.8


Settlement assets

 


77.6

Property and equipment

 


5.7

Intangible assets

 


122.5

Total assets acquired

 

$

207.6


 

 


 


Trade accounts payable

 

$

(2.1

)

Settlement liabilities


(65.9

)

Accrued expenses and other current liabilities


(1.3

)

Deferred revenue


(0.3

)

Other long-term liabilities

 


(0.1

)

Total liabilities assumed

 

$

69.7

 

 


 


Goodwill

 


212.7


 

 


 


Net assets acquired

 

$

350.6


 

The fair value measurements of intangible assets were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy. Level 3 inputs include discount rates that would be used by a market participant in valuing these assets, projections of revenues and cash flows, and customer attrition rates, among others.

 

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

 

Goodwill, with a value of $212.7 million, arising from the acquisition was included in the EFT Processing Segment. The factors that make up goodwill include synergies from combining PBMA operations and intangible assets that do not qualify for separate recognition. Goodwill and intangible assets associated with this acquisition are deductible for tax purposes. 

 

The results of PBMA operations are included in the Company's consolidated results of operation, as part of the EFT Processing business segment, beginning on March 16, 2022. For the period beginning on the acquisition date through June 30, 2022, PBMA had $31.2 million in revenue. PBMA had $56.2 million in revenue in the first six months of 2023. The PBMA business is impacted by higher transaction volumes during the tourism season in the second and third quarters.

 

(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. The settlement cash held at the Company is primarily generated from the monies remitted by consumers through Company agents and financial institutions in payment of the face value of the payment service or foreign currency purchased and the related fees charged to purchase the currency. The Company uses its cash and cash equivalents to pay the face value of the payment service product upon presentation by the recipient. Cash received by Company agents and merchants generally becomes available to us within two weeks after initial receipt by the business partner. Receivables from business partners represent funds collected by such business partners that are in transit to us.

 

9


 

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 us. 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 millions)
June 30,
2023
December 31,
2022
Settlement assets:
 
 
Settlement cash and cash equivalents
$
187.0
$
242.7
Settlement restricted cash
77.4
94.0
Accounts receivable, net of credit losses of $40.6 and $33.0 
545.5
887.6
Prepaid expenses and other current assets
259.0
218.4
Total settlement assets
$
1,068.9
$
1,442.7
Settlement obligations:
 
 
Trade account payables
$
399.7
$
655.1
Accrued expenses and other current liabilities
669.2
787.6
Total settlement obligations 
$
1,068.9
$
1,442.7

 

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 millions)
 
June 30,
2023
 
December 31,
2022
 
June 30,
2022
 
December 31,
2021
Cash and cash equivalents
 
$
1,137.5
 
$
1,131.2
 
$
1,014.9
 
$
1,260.5
Restricted cash
 
14.4
 
7.4
 
6.6
 
3.7
ATM cash
 
776.3
 
515.6
 
890.8
 
543.4
Settlement cash and cash equivalents
 
187.0
 
242.7
 
213.7
 
203.6
Settlement restricted cash
 
77.4
 
94.0
 
49.8
 
74.9
Cash and cash equivalents and restricted cash at end of period
 
$
2,192.6
 
$
1,990.9
 
$
2,175.8
 
$
2,086.1

 

(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 units and the assumed conversion of the Company’s convertible debt, if such conversion would be dilutive.

 

10



The following table provides the computation of diluted earnings and diluted weighted average number of common shares outstanding:
 
 (in millions) Three Months Ended
June 30,



Six Months Ended
June 30,
 
2023


2022



2023



2022
Computation of diluted earnings:










   Net income 
$
86.1

$
57.3


$
106.2


$
65.5
   Add: Interest expense from assumed conversion of convertible notes, net of tax
1.1


1.1



2.0



2.1
      Net income for diluted earnings per share calculation
$
87.2

$
58.4


$
108.2


$
67.6
















Computation of diluted weighted average shares outstanding:










Basic weighted average shares outstanding
49,637,589


50,394,610



49,724,478



50,726,281
Incremental shares from assumed exercise of stock options and vesting of restricted stock units
452,008


590,486



412,223



625,625
Incremental shares from assumed conversion of convertible debt
2,781,818

2,781,818



2,781,818



2,781,818
Diluted weighted average shares outstanding 

52,871,415


53,766,914



52,918,519



54,133,724

The table