UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20182019
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition periodto
Commission File Number: 001-31648
EURONET WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware74-2806888
(State or other jurisdiction(I.R.S. Employer
of incorporation or organization)Identification No.)
  
3500 College Boulevard 
Leawood,Kansas66211
(Address of principal executive offices)(Zip Code)
(913) 327-4200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockEEFTNasdaq Global Select Market
1.375% Senior Notes due 2026EEFTNasdaq Global Select 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 þNo 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 and post such files). Yesþ 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��accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Act
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting companyo
Emerging growth companyo
  
   
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 oNo þ


On October 31, 2018August 7, 2019, Euronet Worldwide, Inc. had 51,560,33154,486,877 shares of Common Stock outstanding.
     




EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Table of Contents
  Page
 
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
Item 1.
Item 1A.
Item 2.
Item 6.
   
 

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 ofAs of
September 30,
2018
 December 31,
2017
June 30,
2019
 December 31,
2018
(unaudited)  (unaudited)  
ASSETS      
Current assets:      
Cash and cash equivalents$1,129,272
 $819,144
$1,558,461
 $1,054,357
Restricted cash73,453
 81,374
71,297
 76,595
Trade accounts receivable, net of allowances for doubtful accounts of $23,426 at September 30, 2018 and $20,958 at December 31, 2017813,759
 744,879
Trade accounts receivable, net of allowances for doubtful accounts of $24,937 at June 30, 2019 and $24,287 at December 31, 2018836,713
 693,616
Prepaid expenses and other current assets200,004
 244,789
235,279
 263,019
Total current assets2,216,488
 1,890,186
2,701,750
 2,087,587
Property and equipment, net of accumulated depreciation of $365,708 at September 30, 2018 and $340,128 at December 31, 2017283,167
 268,303
Operating right of use lease assets376,343
 
Property and equipment, net of accumulated depreciation of $381,771 at June 30, 2019 and $373,180 at December 31, 2018324,298
 291,869
Goodwill715,745
 717,386
706,367
 704,197
Acquired intangible assets, net of accumulated amortization of $191,256 at September 30, 2018 and $179,142 at December 31, 2017128,586
 150,543
Other assets, net of accumulated amortization of $49,010 at September 30, 2018 and $44,469 at December 31, 2017116,800
 113,611
Acquired intangible assets, net of accumulated amortization of $201,566 at June 30, 2019 and $190,920 at December 31, 2018104,374
 114,485
Other assets, net of accumulated amortization of $54,549 at June 30, 2019 and $50,821 at December 31, 2018120,204
 123,017
Total assets$3,460,786
 $3,140,029
$4,333,336
 $3,321,155
LIABILITIES AND EQUITY      
Current liabilities:      
Trade accounts payable$405,683
 $494,841
$432,140
 $528,913
Accrued expenses and other current liabilities752,295
 759,789
791,213
 712,012
Current portion of capital lease obligations5,396
 5,369
Current portion of operating lease liabilities124,131
 
Short-term debt obligations and current maturities of long-term debt obligations233,074
 41,288
23,998
 38,017
Income taxes payable64,200
 54,437
47,490
 40,159
Deferred revenue53,059
 51,996
62,455
 59,293
Total current liabilities1,513,707
 1,407,720
1,481,427
 1,378,394
Debt obligations, net of current portion641,388
 404,012
1,096,735
 589,782
Capital lease obligations, net of current portion8,750
 9,753
Operating lease liabilities, net of current portion241,630
 
Deferred income taxes52,707
 54,969
52,984
 57,145
Other long-term liabilities65,113
 64,097
62,337
 62,992
Total liabilities2,281,665
 1,940,551
2,935,113
 2,088,313
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; 59,554,968 issued at September 30, 2018 and 58,892,744 issued at December 31, 20171,191
 1,178
Common Stock, $0.02 par value. 90,000,000 shares authorized; 62,563,955 issued at June 30, 2019 and 59,897,309 issued at December 31, 20181,251
 1,198
Additional paid-in-capital1,094,531
 1,072,005
1,172,834
 1,104,264
Treasury stock, at cost, 8,096,314 shares at September 30, 2018 and 6,084,586 shares at December 31, 2017(392,095) (217,161)
Treasury stock, at cost, 8,083,716 shares at June 30, 2019 and 8,077,311 shares at December 31, 2018(393,353) (391,551)
Retained earnings609,813
 436,954
772,501
 669,805
Accumulated other comprehensive loss(134,605) (94,458)(155,050) (151,043)
Total Euronet Worldwide, Inc. stockholders’ equity1,178,835
 1,198,518
1,398,183
 1,232,673
Noncontrolling interests286
 960
40
 169
Total equity1,179,121
 1,199,478
1,398,223
 1,232,842
Total liabilities and equity$3,460,786
 $3,140,029
$4,333,336
 $3,321,155
See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
Three Months Ended
September 30,
 Nine Months Ended
September 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
Revenues$714,505
 $637,834
 $1,887,244
 $1,647,777
$691,867
 $622,224
 $1,269,376
 $1,172,739
Operating expenses:              
Direct operating costs388,236
 364,815
 1,093,072
 978,768
393,811
 361,512
 747,644
 704,836
Salaries and benefits93,108
 82,134
 270,537
 232,617
98,550
 91,723
 191,345
 177,429
Selling, general and administrative55,787
 49,279
 158,156
 139,708
53,842
 52,357
 101,989
 102,368
Acquired intangible assets impairment
 
 
 2,286
Depreciation and amortization26,461
 24,705
 78,726
 69,520
27,767
 26,263
 54,407
 52,265
Total operating expenses563,592
 520,933
 1,600,491
 1,422,899
573,970
 531,855
 1,095,385
 1,036,898
Operating income150,913
 116,901
 286,753
 224,878
117,897
 90,369
 173,991
 135,841
Other income (expense):              
Interest income288
 380
 1,000
 2,009
513
 416
 856
 712
Interest expense(11,269) (9,534) (28,936) (25,058)(10,029) (10,061) (18,228) (17,667)
Loss on early retirement of debt(8,903) 
 (9,831) 
Loss from unconsolidated affiliates
 
 (117) 

 
 
 (117)
Foreign currency exchange (loss) gain, net(2,704) 8,179
 (21,459) 21,035
(121) (20,690) 3,087
 (18,755)
Other (loss) gains(34) 
 26
 35
Other (losses) gains(29) 29
 (4) 60
Other expense, net(13,719) (975) (49,486) (1,979)(18,569) (30,306) (24,120) (35,767)
Income before income taxes137,194
 115,926
 237,267
 222,899
99,328
 60,063
 149,871
 100,074
Income tax expense(34,937) (15,573) (65,031) (43,130)(31,323) (16,427) (47,287) (30,094)
Net income102,257
 100,353
 172,236
 179,769
68,005
 43,636
 102,584
 69,980
Net loss (income) attributable to noncontrolling interests466
 (63) 623
 9
Net loss attributable to noncontrolling interests148
 88
 112
 157
Net income attributable to Euronet Worldwide, Inc.$102,723
 $100,290
 $172,859
 $179,778
$68,153
 $43,724
 $102,696
 $70,137
              
Earnings per share attributable to Euronet Worldwide, Inc. stockholders:              
Basic$2.01
 $1.91
 $3.36
 $3.43
$1.28
 $0.85
 $1.95
 $1.36
Diluted$1.89
 $1.80
 $3.17
 $3.23
$1.25
 $0.82
 $1.90
 $1.30
              
Weighted average shares outstanding:              
Basic51,182,502
 52,590,837
 51,436,228
 52,463,511
53,212,759
 51,226,898
 52,546,647
 51,563,090
Diluted54,263,892
 55,784,485
 54,521,262
 55,582,583
54,702,459
 53,492,835
 53,945,770
 53,871,279
See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in thousands)
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2018 2017 2018 2017
Net income$102,257
 $100,353
 $172,236
 $179,769
Translation adjustment(4,613) 26,703
 (40,198) 97,311
Comprehensive income97,644
 127,056
 132,038
 277,080
Comprehensive loss (income) attributable to noncontrolling interests480
 (113) 674
 (163)
Comprehensive income attributable to Euronet Worldwide, Inc.$98,124
 $126,943
 $132,712
 $276,917
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2019 2018 2019 2018
Net income$68,005
 $43,636
 $102,584
 $69,980
Translation adjustment12,161
 (58,533) (4,024) (35,585)
Comprehensive income (loss)80,166
 (14,897) 98,560
 34,395
Comprehensive loss attributable to noncontrolling interests136
 180
 129
 194
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.$80,302
 $(14,717) $98,689
 $34,589
See accompanying notes to the unaudited consolidated financial statements.

Euronet Worldwide, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
(in thousands, except share data)

  
Number of
Shares
Outstanding
 
 
Common
Stock
 
Additional
Paid-in
Capital
 
 
Treasury
Stock
Balance as of December 31, 2017 52,808,158
 $1,178
 $1,072,005
 $(217,161)
Net income (loss)        
Other comprehensive income        
Stock issued under employee stock plans 116,358
 2
 2,468
 (1,237)
Share-based compensation     4,029
  
Repurchase of shares (1,418,895)     (125,000)
Balance as of March 31, 2018 51,505,621
 1,180
 1,078,502
 (343,398)
Net income (loss)        
Other comprehensive loss        
Stock issued under employee stock plans 89,954
 1
 1,484
 260
Share-based compensation     4,550
  
Repurchase of shares (613,704)     (50,000)
Balance as of June 30, 2018 50,981,871
 $1,181
 $1,084,536
 $(393,138)


  
Number of
Shares
Outstanding
 
 
Common
Stock
 
Additional
Paid-in
Capital
 
 
Treasury
Stock
Balance as of December 31, 2018 51,819,998
 $1,198
 $1,104,264
 $(391,551)
Net income        
Other comprehensive loss        
Stock issued under employee stock plans 130,136
 3
 5,194
 (1,756)
Share-based compensation     4,490
  
Issuance of convertible notes, net of tax     71,660
  
Repurchases and conversions of convertible notes, net of tax 6
   (42,917)  
Balance as of March 31, 2019 51,950,140
 1,201
 1,142,691
 (393,307)
Net income (loss)        
Other comprehensive income        
Stock issued under employee stock plans 41,856
   1,740
 (46)
Share-based compensation     6,003
  
Redemptions and conversions of convertible notes, net of tax 2,488,243
 50
 22,400
  
Balance as of June 30, 2019 54,480,239
 $1,251
 $1,172,834
 $(393,353)
See accompanying notes to the unaudited consolidated financial statements.


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity (continued)
(in thousands)

   Retained Earnings 
Accumulated Other
Comprehensive Loss
 
 
Noncontrolling
Interests
 Total
Balance as of December 31, 2017 $436,954
 $(94,458) $960
 $1,199,478
Net income (loss) 26,413
   (69) 26,344
Other comprehensive income   22,894
 54
 22,948
Stock issued under employee stock plans       1,233
Share-based compensation       4,029
Repurchase of shares       (125,000)
Balance as of March 31, 2018 463,367
 (71,564) 945
 1,129,032
Net income (loss) 43,724
   (88) 43,636
Other comprehensive loss   (58,442) (91) (58,533)
Stock issued under employee stock plans       1,745
Share-based compensation       4,550
Repurchase of shares       (50,000)
Balance as of June 30, 2018 $507,091
 $(130,006) $766
 $1,070,430

   Retained Earnings 
Accumulated Other
Comprehensive Loss
 
 
Noncontrolling
Interests
 Total
Balance as of December 31, 2018 $669,805
 $(151,043) $169
 $1,232,842
Net income 34,543
   36
 34,579
Other comprehensive loss   (16,156) (29) (16,185)
Stock issued under employee stock plans       3,441
Share-based compensation       4,490
Issuance of convertible notes, net of tax       71,660
Repurchases and conversions of convertible notes, net of tax       (42,917)
Balance as of March 31, 2019 704,348
 (167,199) 176
 1,287,910
Net income (loss) 68,153
   (148) 68,005
Other comprehensive income   12,149
 12
 12,161
Stock issued under employee stock plans       1,694
Share-based compensation       6,003
Redemptions and conversions of convertible notes, net of tax       22,450
Balance as of June 30, 2019 $772,501
 $(155,050) $40
 $1,398,223
See accompanying notes to the unaudited consolidated financial statements.


EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended
September 30,
Six Months Ended
June 30,
2018 20172019 2018
Net income$172,236
 $179,769
$102,584
 $69,980
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization78,726
 69,520
54,407
 52,265
Share-based compensation12,597
 11,817
10,493
 8,579
Unrealized foreign exchange loss (gain), net21,459
 (21,035)
Unrealized foreign exchange (gain) loss, net(3,087) 18,755
Deferred income taxes(1,208) (14,856)4,555
 192
Loss on early retirement of debt

9,831
 
Loss from unconsolidated affiliates117
 

 117
Accretion of convertible debt discount and amortization of debt issuance costs10,582
 10,068
9,685
 6,994
Non-cash impairment of acquired intangible assets
 2,286
Changes in working capital, net of amounts acquired:      
Income taxes payable, net10,022
 10,924
7,302
 (729)
Trade accounts receivable(87,237) (7,861)(146,441) 35,456
Prepaid expenses and other current assets42,552
 77,538
25,606
 12,304
Trade accounts payable(81,149) (118,677)(95,083) (99,237)
Deferred revenue2,525
 (2,497)3,457
 (84)
Accrued expenses and other current liabilities9,877
 54,233
85,262
 (35,553)
Changes in noncurrent assets and liabilities1,474
 6,455
(11,857) 265
Net cash provided by operating activities192,573
 257,684
56,714
 69,304
Cash flows from investing activities:      
Acquisitions, net of cash acquired(12,854) 

 (12,854)
Purchases of property and equipment(82,129) (70,871)(67,727) (53,381)
Purchases of other long-term assets(5,787) (4,651)(3,436) (3,717)
Other, net1,401
 1,499
2,403
 962
Net cash used in investing activities(99,369) (74,023)(68,760) (68,990)
Cash flows from financing activities:      
Proceeds from issuance of shares11,757
 8,328
7,037
 4,136
Repurchase of shares(177,163) (2,310)(2,448) (176,657)
Borrowings from revolving credit agreements4,267,881
 1,839,963
2,043,598
 2,573,941
Repayments of revolving credit agreements(4,003,662) (1,808,695)(2,253,498) (2,333,885)
Proceeds from long-term debt obligations1,194,900
 
Repayments of long-term debt obligations(51,199) (6,563)(446,702) (6,199)
Repayments of capital lease obligations(4,739) (3,473)
Borrowings from short-term debt obligations, net204,211
 99,081
(Repayments of) borrowings from short-term debt obligations, net(14,184) 302,841
Debt issuance costs(19,673) 
Other, net1
 284
(3,085) (3,255)
Net cash provided by financing activities247,087
 126,615
505,945
 360,922
Effect of exchange rate changes on cash and cash equivalents and restricted cash(38,084) 53,494
4,907
 (25,471)
Increase in cash and cash equivalents and restricted cash302,207
 363,770
498,806
 335,765
Cash and cash equivalents and restricted cash at beginning of period900,518
 812,088
1,130,952
 900,518
      
Cash and cash equivalents and restricted cash at end of period$1,202,725
 $1,175,858
$1,629,758
 $1,236,283
      
Supplemental disclosure of cash flow information:      
Interest paid during the period$19,243
 $17,359
$7,107
 $9,857
Income taxes paid during the period$55,338
 $34,769
$36,543
 $31,710
See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


(1) GENERAL
Organization
Euronet Worldwide, Inc. (together with its subsidiaries, the “Company” or “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, software solutions, electronic distribution of prepaid mobile airtime and other electronic paymentdigital media products, foreign currency exchange services 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 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, 20172018, including the notes thereto, set forth in the Company’s 20172018 Annual Report on Form 10-K. Certain amounts in prior years have been reclassified to conform to the current year's presentation.
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 reported 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, 2018.2019.
Seasonality
Euronet’s EFT Processing Segment experiences its heaviest demand for ATM cash withdrawal transactions and dynamic currency conversion ("DCC") services during the third quarter of the fiscal year, coinciding with the tourism season followed by lower transaction levels during the fourth quarter. Additionally, the epay SegmentsSegment is impacted by seasonality during the fourth quarter and the 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 regions 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 experiences its lowest transaction levels during the first quarter of each year.
(2) RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS


In May 2014, the Financial Accounting Standards Board ("FASB") issuedThe Company adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers(ASU) 2016-02, Leases (Topic 606)” (“Topic 606”)842), and subsequently modified the standard with several ASUs. The Company adopted the standard onas amended, as of January 1, 20182019, using the modified retrospective method applied to those contracts whichapproach and comparative periods were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting under Topic 605.
The Company completed its review of customer contracts relative to the requirements of Topic 606 and concluded that revenues from certain customer contracts in the epay Segment should be recorded differently under the principal versus agent guidance of Topic 606. With respect to those contracts, the Company concluded that it earns a commission from content providers for distributing and processing their prepaid mobile airtime and other electronic payment products, but it is not the principal for the products themselves. As a result, the impact of the change in accounting principle was a reduction of $16.4 million and $53.3 million in both revenues and direct operating expenses for the three and nine months ended September 30, 2018, respectively, with no impact on reported net income.


Contract Balances
restated. The new standard requires the deferral of incremental costs to obtain customer contracts, known as contract assets, which are then amortized to expense as part of selling, general and administrative expense over the respective periods of expected benefit. The Company completed its review of such costs and concluded that a transition adjustment was not necessary related to contract assets. However, the Company has implemented processes and controls to record such costs on an ongoing basis and will disclose them if they become material.

The Company records deferred revenues when cash payments are received or due in advance of its performance. The increase in the deferred revenue balance for the first nine months of 2018 is primarily driven by $36.0 million of cash payments received in the current year for which we have not yet satisfied the performance obligations, that were offset by $35.0 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2017.

Variable Consideration
Within the EFT segment, outsourcing services are generally billed on the basis of a fixed fee per ATM, plus a transaction-based fee. Transaction-based fees are recognized at the time the transactions are processed and outsourcing management fees are recognized ratably over the contract period. These fees can be variable based on transaction volume tiered discounts; however, as all tiered discounts are calculated monthly, the actual discount is recorded on a monthly basis. In addition, the epay segment generates commissions from the distribution of electronic content. It is common for these long-term contracts to contain award fees, incentive fees, or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics or program milestones and can be based upon customer discretion.

Transaction fees, as well as any tiered volume discounts or incentive fees, are calculated and billed monthly in accordance with the terms established in the contract. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on as assessment of Euronet's anticipated performance and all information (historical, current and forecast) that is reasonably available. 

Arrangements with Multiple Performance Obligations
The Company's most significant revenues are generated from transaction fees for which there are no remaining performance obligations left to fulfill after revenue is recognized. An insignificant amount of revenues are generated from contracts with customers which may include multiple performance obligations. For such arrangements, Euronet allocates revenues to each performance obligation based on its relative standalone selling price.

Disaggregation of Revenues
Revenues are recognized when control of the promised goods or services is transferred to Euronet's customers, in an amount that reflects the consideration it expects to be entitled to in exchange for goods or services.

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 September 30, 2018 For the Nine Months Ended September 30, 2018
(in thousands)
EFT
Processing
 epay 
Money
Transfer
 Total 
EFT
Processing
 epay 
Money
Transfer
 Total
North America$7,613
 $41,346
 $147,830
 $196,789
 $23,956
 $124,667
 $420,568
 $569,191
Europe226,531
 123,386
 84,492
 434,409
 485,030
 340,180
 240,266
 1,065,476
Asia Pacific27,570
 17,505
 31,195
 76,270
 83,310
 52,116
 95,049
 230,475
Other22
 3,194
 4,774
 7,990
 37
 11,776
 13,060
 24,873
Eliminations
 
 
 (953) 
 
 
 (2,771)
Total$261,736
 $185,431
 $268,291
 $714,505
 $592,333
 $528,739
 $768,943
 $1,887,244

 For the Three Months Ended September 30, 2017 For the Nine Months Ended September 30, 2017
(in thousands)
EFT
Processing
 epay 
Money
Transfer
 Total 
EFT
Processing
 epay 
Money
Transfer
 Total
North America$8,065
 $15,633
 $131,615
 $155,313
 $23,065
 $48,440
 $379,620
 $451,125
Europe192,147
 141,561
 69,802
 403,510
 391,213
 382,316
 190,080
 963,609
Asia Pacific25,977
 22,556
 24,101
 72,634
 73,614
 68,291
 72,744
 214,649
Other132
 4,484
 2,587
 7,203
 138
 13,484
 6,761
 20,383
Eliminations
 
 
 (826) 
 
 
 (1,989)
Total$226,321
 $184,234
 $228,105
 $637,834
 $488,030
 $512,531
 $649,205
 $1,647,777
As noted above, prior period amounts have not been adjusted under the modified retrospective method.

In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. The new standard specifies that liabilities within its scope are considered to be financial liabilities, and amends the guidance in ASC 405-20, Extinguishments of Liabilities, by directing entities to derecognize prepaid stored-value product liabilities based on expected breakage in proportion to the pattern of rights expected to be exercised by the consumer. Derecognition for breakage is permitted only to the extent that it is probable that a significant reversal of recognized breakage will not subsequently occur. The new standard is consistent with the breakage guidance in Topic 606. The Company adopted this ASU as of January 1, 2018 along with Topic 606. The adoption of this standard did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In August 2016, the FASB issued an accounting standard classified under FASB ASC Topic 230, “Statement of Cash Flows”. This accounting standard provides guidance on eight specific cash flow issues. Subsequently, the FASB issued amendments to this accounting standard that required companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the statement of cash flows.

The Company adopted these standards as of January 1, 2018. The adoption of these accounting standards resulted in an increase in net cash provided by operating activities of $27.2 million for the nine months ended September, 2017. As of September 30, 2018, the Company had $73.5 million of restricted cash consisting of restricted cash held in trust and/or cash held on behalf of others and cash collateral on bank credit arrangements. Cash held in trust and/or cash held on behalf of others is in connection with the administration of the customer collection and vendor remittance activities by certain subsidiaries within the Company’s epay and EFT Processing Segments. Amounts collected on behalf of certain mobile phone operators and/or merchants are deposited into a restricted cash account. The bank credit arrangements primarily represent cash collateral on deposit with commercial banks to cover guarantees.

In February 2016, the FASB issued ASU 2016-02, Leases(Topic 842), which will update the existing guidance on accounting for leases and require new qualitative and quantitative disclosures about the Company’s leasing activities. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard requires lessees to account for all leases on the balance sheet, except for certain short-term leases that have a maximum possible lease term of 12 months. The accounting for lessors is largely unchanged from the previous accounting guidance, except for leverage lease accounting which is not permitted for leases entered into or modified after the effective date of the new standard.

The new standard is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted. A modified retrospective approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard on January 1, 2019 and use the effective date as the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.
The new standard providesprovide a number of optional practical expedients in transition.
The Company expects to electelected the "package“package of practical expedients",expedients” which permits the Company not to reassess under the new standard ourthe Company’s prior conclusions about lease identification, lease classification and initial direct costs. The Company does not expectalso elected to electcombine lease and non-lease components and to include short-term leases with an initial term of 12 months or less on the use-of-hindsight orbalance sheet.
In addition, the Company elected the hindsight practical expedient pertaining to land easements;determine the latterlease term for existing leases. The election of the hindsight practical expedient resulted in, for substantially all leases in effect on January 1, 2019, the lease term for implementation of this pronouncement, as the lease’s life being January 1, 2019 through the lease’s contractual termination date, rather than the actual lease life as set out in the lease agreement. Lease lives for lease agreements committed to on January 1, 2019 and, thereafter, are included based on the lease’s commencement date and termination date. In the application of hindsight, the Company evaluated the performance of all the leases and the associated markets in relation to the Company’s

operations, which resulted in the determination that the exercise of renewal options would not being applicable to it.be reasonably certain in determining the expected lease term.
The Company currently anticipates thisAdoption of the new standard will have a material impact on its consolidated balance sheets but will not have a material impact on its consolidated income statements. The Company currently expects the most significant impact will beresulted in the recognition of right-of-useadditional operating right of use lease assets and lease liabilities for operating leases. The Company currently expects its accounting for capital leases to remain substantially unchanged. The Company is continuing to assess the potential impacts of the standard.approximately $296.9 million, as of January 1, 2019.

In June 2016, the FASBFinancial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will beis permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently in the process of evaluating the effect ofdoes not expect that the adoption of ASU 2016-13this guidance to have a significant impact on its consolidated financial statements.
(3) STOCKHOLDERS' EQUITY
Earnings Per Share
Basic earnings per share has been computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the respective periods. Diluted earnings per share has been computed by dividing earnings available to common stockholders by the weighted average shares outstanding during the respective period, after adjusting for any potential dilution from options to purchase the Company's common stock, assumed vesting of restricted stock and the assumed conversion of the Company’s convertible debentures. The following table provides the computation of diluted weighted average number of common shares outstanding:

Three Months Ended
June 30,
 Six Months Ended
June 30,
 2019 2018 2019 2018
Computation of diluted weighted average shares outstanding:       
Basic weighted average shares outstanding53,212,759
 51,226,898
 52,546,647
 51,563,090
Incremental shares from assumed exercise of stock options and vesting of restricted stock1,489,700
 1,494,766
 1,399,123
 1,537,018
Incremental shares from assumed conversion of convertible notes
 771,171
 
 771,171
Diluted weighted average shares outstanding54,702,459
 53,492,835
 53,945,770
 53,871,279

Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2018 2017 2018 2017
Computation of diluted weighted average shares outstanding:       
Basic weighted average shares outstanding51,182,502
 52,590,837
 51,436,228
 52,463,511
Incremental shares from assumed exercise of stock options and vesting of restricted stock1,521,560
 1,863,883
 1,525,204
 1,789,307
Incremental shares from assumed conversion of convertible notes1,559,830
 1,329,765
 1,559,830
 1,329,765
Diluted weighted average shares outstanding54,263,892
 55,784,485
 54,521,262
 55,582,583

The table includes the impact of all stock options and restricted stock that are dilutive to the Company’s weighted average common shares outstanding during the three and ninesix months ended SeptemberJune 30, 20182019 and 2017.2018. The calculation of diluted earnings per share excludes stock options or shares of restricted stock that are anti-dilutive to the Company’s weighted average common shares outstanding of approximately 436,000782,000 and 792,000805,000 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, and approximately 458,0001,209,000 and 884,0001,124,000 for the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively.
The Company'sCompany issued new Convertible Senior Notes ("Convertible Notes") due March 2049 on March 18, 2019 and retired the existing convertible notes ("Retired Convertible Notes") that would have matured in 2044 on May 28, 2019. The Company's Convertible Notes currently have and the Retired Convertible Notes had a settlement features requiring the Company upon conversion to settle the principal amount of the debt and theany 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. At issuance, theThe 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 areConvertible Notes and the Retired Convertible Notes were included in the calculation of diluted earnings per share if their inclusion iswas dilutive. The convertible notesdilutive effect increases the more the market price exceeds the conversion price. The Retired Convertible Notes had a dilutive effect in the three and six months ended June 30, 2018 as the $83.77 market price per share of Common Stock as of June 30, 2018 exceeded the $72.18 conversion price per share. The Convertible Notes would only have a dilutive effect if the market price per share of common stock exceeds the conversion price of $72.18$188.73 per share andshare. As of June 30, 2019, the Convertible Notes did not have a dilutive effect increaseson the more the market price exceeds the conversion price.

As of September 30, 2018 and 2017, the stock price exceeded the conversion price and these notes were dilutive to earnings per share. Further, as a result ofSee Note 7, Debt Obligations, for more information about the share price increasing from $94.79 at September 30, 2017 to $100.22 at September 30, 2018, there was an increase in shares from the assumed conversion of convertible notes.
Share repurchases
The Company's 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. During the three and six months

ended June 30, 2019, there were no repurchase of stock, the remaining maximum dollar value of shares that may yet be purchased under the Repurchase program was $200.0 million. Repurchases under the Repurchase 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. For the first nine monthshalf of 2018,2019, the Company repurchased $175.0 million, in value of Euronet common stockdid not make any repurchases under the Repurchase Program. In connection with the issuance of the Convertible Notes, the Board of Directors of the Company authorized the Company to repurchase up to $120 million of the Company’s common stock concurrently with or following the issuance of the Convertible Notes. This authorization will expire on March 11, 2021. For the three and six months ended June 30, 2019, the Company did not make any repurchases under this special authorization.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss consists entirely of foreign currency translation adjustments. The Company recorded foreign currency translation lossesgains of $4.6 million and $40.2$12.2 million for the threesecond quarter of 2019, and nine months ended September 30, 2018, respectively, and gainslosses of $26.7$4.0 million, $58.5 million, and $97.3$35.6 million for the first half of 2019,the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively. There were no reclassifications of foreign currency translation into the consolidated statements of income for the three and ninesix months ended SeptemberJune 30, 20182019 and 2017.2018.
(4) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET
A summary of acquired intangible assets and goodwill activity for the ninesix months ended SeptemberJune 30, 20182019 is presented below:
(in thousands) 
Acquired
Intangible
Assets
 Goodwill 
Total
Intangible
Assets
Balance as of December 31, 2018 $114,485
 $704,197
 $818,682
Increases (decreases):      
Acquisition 
 686
 686
Amortization (10,303) 
 (10,303)
Other (primarily changes in foreign currency exchange rates) 192
 1,484
 1,676
Balance as of June 30, 2019 $104,374
 $706,367
 $810,741
(in thousands) 
Acquired
Intangible
Assets
 Goodwill 
Total
Intangible
Assets
Balance as of December 31, 2017 $150,543
 $717,386
 $867,929
Increases (decreases):      
Acquisitions 
 20,742
 20,742
Amortization (17,179) 
 (17,179)
Other (primarily changes in foreign currency exchange rates) (4,778) (22,383) (27,161)
Balance as of September 30, 2018 $128,586
 $715,745
 $844,331

Estimated amortization expense on intangible assets with finite lives, before income taxes, as of SeptemberJune 30, 2018,2019, is expected to total $5.4$10.2 million for the remainder of 2018, $21.2 million for 2019, $20.4$19.7 million for 2020, $19.5$18.9 million for 2021, $18.5$17.8 million for 2022, and $13.7$13.1 million for 2023.2023 and $6.7 million for 2024.
TheIn January 2019, the Company completed the acquisitionsacquisition of twothe majority interests of a small European businessesIndonesian business in which the Company previously held the minority interest for an immaterial amount of cash consideration, completing oneconsideration. The acquisition in the first quarter of 2018 and completing the other acquisition in the second quarter of 2018. The acquisitions havehas been accounted for as business combinations in accordance with U.S. GAAP and the results of operations have been included from the respective datesdate of acquisition in the EFT Processing Segment.
The Company’s annual goodwill impairment test is performed during the fourth quarter of its fiscal year. The annual impairment test for the year ended December 31, 20172018 resulted in no impairment charges of $31.8 million.charge.
Determining the fair value of reporting units requires significant management judgment in estimating future cash flows and assessing potential market and economic conditions. It is reasonably possible that the Company’s operations will not perform as expected, or that the estimates or assumptions included in the 20172018 annual impairment test could change, which may result in the Company recording material non-cash impairment charges during the year in which these changes take place.

(5) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
 As of
(in thousands)June 30, 2019 December 31, 2018
Money transfer settlement obligations

$405,228
 $310,710
Accrued expenses274,033
 293,864
Accrued amounts due to mobile operators and other content providers80,298
 65,878
Derivative liabilities25,577
 36,102
Current portion of capital lease obligations6,077
 5,458
Total$791,213
 $712,012

 As of
(in thousands)September 30, 2018 December 31, 2017
Accrued expenses$305,969
 $301,390
Money transfer settlement obligations341,073
 343,613
Accrued amounts due to mobile operators and other content providers79,155
 92,291
Derivative liabilities25,829
 22,495
Total$752,295
 $759,789




(6) UNEARNED REVENUES
Accounting Standards Codification ("ASC") Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) requires the deferral of incremental costs to obtain customer contracts, known as contract assets, which are then amortized to expense as part of selling, general and administrative expense over the respective periods of expected benefit. Such costs are not material; however, the Company has implemented processes and controls to record such costs on an ongoing basis and will disclose them if they become material.

The Company records deferred revenues when cash payments are received or due in advance of its performance. The increase in the deferred revenue balance for the first half of 2019 is primarily driven by $26.3 million of cash payments received in the current year for which the Company has not yet satisfied the performance obligations, largely offset by $23.2 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2018.


(7) DEBT OBLIGATIONS
Debt obligations consist of the following:
 As of
(in thousands)June 30, 2019 December 31, 2018
Credit Facility:   
Revolving credit agreements, due 2023$6,129
 $215,725
 

 

Convertible Debt:   
0.75% convertible notes, unsecured, due 2049429,563
 
1.50% convertible notes, unsecured, due 2044
 379,859
    
1.375% Senior Notes, due 2026682,080
 
    
Other obligations24,279
 38,513
    
Total debt obligations1,142,051
 634,097
Unamortized debt issuance costs(21,318) (6,298)
Carrying value of debt1,120,733
 627,799
Short-term debt obligations and current maturities of long-term debt obligations(23,998) (38,017)
Long-term debt obligations$1,096,735
 $589,782

 As of
(in thousands)September 30, 2018 December 31, 2017
Credit Facility:   
Term loan, due 2019$
 $51,094
Revolving credit agreements, due 2019266,738
 3,000
 266,738
 54,094
Convertible Debt:   
1.50% convertible notes, unsecured, due 2044377,863
 369,259
    
ATM credit facility200,000
 
    
Other obligations33,696
 27,763
    
Total debt obligations878,297
 451,116
Unamortized debt issuance costs(3,835) (5,816)
Carrying value of debt874,462
 445,300
Short-term debt obligations and current maturities of long-term debt obligations(233,074) (41,288)
Long-term debt obligations$641,388
 $404,012


Credit Facility
As of September 30,On October 17, 2018, the Company hadentered into a $675 million senior securednew unsecured revolving credit facilityagreement (the "Credit Facility") consisting of a $600 million revolving credit agreement and a $75 million term loan, which was retired early during the third quarter of 2018. The Credit Facility was subsequently replaced by a new credit agreementfor $1.0 billion that expires on October 17, 2018, which resulted in long-term debt obligation classification for the Credit Facility as of September 30, 2018. See Note 13, Subsequent Event, for further details.
Interest2023. Fees and interest on borrowings under the revolving credit facility variesare based upon the Company's consolidated total leverage ratio, as definedcorporate credit rating and are based, in the Company'scase of letter of credit agreement, and is basedfees, on a margin , and in the case of interest, on a margin over the London Inter-Bank Offered Rate (“LIBOR”) or a margin over athe base rate, as selected by the Company, with the applicable margin ranging from 1.375%1.125% to 2.375% for LIBOR loans2.0% or 0.375%0.175% to 1.375%1.0% for base rate loans. Accordingly, theThe 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 U.S. Dollars. The weighted average interest rate for borrowings outstandingof the Company's borrowing under the Company's revolving credit facilityCredit Facility was 3.58%2.23% as of SeptemberJune 30, 2018.2019.
Convertible Debt
TheOn March 18, 2019, the Company completed the sale of $525 million of Convertible Senior Notes (“("Convertible Notes”Notes") had a principal amount outstanding of $402.5 million as of September 30, 2018.. The Convertible Notes mature in October 2044March 2049 unless repurchasedredeemed or converted prior to such date, and are convertible into shares of Euronet Common Stock at a conversion price of approximately $72.18$188.73 per share. HoldersThe Company used $94.2 million of the net proceeds from the issuance of the new debt to repurchase $49 million aggregate principal amount of the Company's 1.5% Convertible Senior Notes outstanding due 2044 (the "Retired Convertible Notes") from a limited number of holders in privately negotiated transactions. The Company expects to use the remainder of the net proceeds for general corporate purposes, which may include repaying borrowings outstanding under the Credit Facility, share repurchases or acquisitions.

Notes have the option to requireOn March 18, 2019, the Company provided a notice of redemption to purchase their notes at par on October 1, 2020, and have additional optionsthe trustee of the indenture governing the Retired Convertible Notes (the "Existing Indenture"), pursuant to requirewhich the Company to purchase their notes at par on October 1, 2024, 2029, 2034, and 2039, or upon a change in controlwould redeem all of the Company.
Holders may convert all or any portionremaining principal amount outstanding of theirthe Retired Convertible Notes on May 28, 2019 (the "Redemption Date") for cash at their option at any time priora redemption price equal to October 1, 2044 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the closing sale price100% of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading dayprincipal amount of the immediately preceding calendar quarter is greater than 130%Retired Convertible Notes redeemed plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date. The issuance of the Convertible Notes and the conversion of the Retired Convertible Notes, resulted in a $25.6 million recognition and a $34.2 million reversal of deferred tax liabilities within the additional paid-in capital as of June 30, 2019, respectively.
Prior to the Redemption Date, approximately $352.4 million principal amount of the Retired Convertible Notes were submitted for conversion. The Company elected to settle the conversion of such Retired Convertible Notes through a combination of cash and stock. The Company paid cash equal to $1,000 for each $1,000 principal amount of Retired Convertible Notes submitted for conversion and satisfied the remainder of the conversion price on each applicable trading day; (2) during the five consecutive business day period after any ten consecutive trading day period (the measurement period) in which the trading price for the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of the Company's common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. If the holders exercise their option to convert, the Company is required to deliver cash orobligation by issuing shares of the Company's common stock,Common Stock

valued bonds valued at $147.24 per share. As a result, the Company paid cash of $352.4 million and issued approximately 2.5 million shares of its Common Stock. In accordance with ASC 470, the Company recognized a loss of $9.8 million on the conversion and redemption of the debt for the first half of 2019, representing the difference between the fair value of the Retired Convertible Notes converted and the carrying value of the bonds at the time of conversion.
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 option,nonconvertible debt borrowing rate. ASC 470-20-35-13 requires the debt discount to satisfybe amortized over the principal amount andperiod the conversion premium. Asconvertible debt is expected to be outstanding as additional non-cash interest expense. The allocation resulted in an increase to additional paid-in capital of September 30, 2018, the conversion threshold in clause (1) of the preceding sentence had been met and$99.7 million for the Convertible Notes.
Contractual interest expense for the Retired Convertible Notes became convertible atwas $1.5 million for the holders' option duringfirst half of 2019. Accretion expense was $1.8 million and $4.6 million for the fourth quarter of 2018.three and six months ended June 30, 2019, respectively.
Contractual interest expense for the Convertible Notes was $1.5$1.0 million and $4.5$1.1 million for the three and ninesix months ended SeptemberJune 30, 2018 and 2017,2019, respectively. Accretion expense was $2.9$3.6 million and $8.6$4.2 million for the three and ninesix months ended SeptemberJune 30, 2018, respectively, and $2.8 million and $8.2 million for the three and nine months ended September 30, 2017,2019, respectively. The effective interest rate was 4.7%4.4% for the three and ninesix months ended SeptemberJune 30, 2018.2019. As of SeptemberJune 30, 2018,2019, the unamortized discount was $24.6$95.4 million and will be amortized through October 1, 2020.March 2025.
ATM Credit Facility1.375% Senior Notes due 2026
On May 11, 2018,22, 2019, the Company entered into a short-term credit facility incompleted the sale of €600 million ($669.9 million) aggregate principal amount of $300 million for the sole purpose of providing cash for its ATM network. Interest is chargedSenior Notes that expire on this financing on an annual basis at the Overnight LIBOR rate plus 1.75%May 2026 (the “Senior Notes”). The facility expires on NovemberSenior 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 June 30, 2018. The2019, the Company repaid $100has outstanding €600 million ($682.1 million) principal amount of the facility duringSenior Notes. In addition, the third quarterCompany may redeem some or all of 2018. The weighted average interest rate for borrowings under the ATM credit facility was 3.7%these notes on or after February 22, 2026 at their principal amount plus any accrued and 3.6% for the three and nine months ended September 30, 2018.unpaid interest.
(7)(8) 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) short-term borrowings that are payable in currencies other than the U.S. dollar. 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 Topic 815"), primarilydue 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 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. As of SeptemberJune 30, 2018,2019, the Company held in its Ria operations foreign currency forward contracts outstanding in the U.S. with a notional value of $328$278 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. As of SeptemberJune 30, 2018,2019, the Company had foreign currency forward contracts outstanding with a notional value of $275$86 million, primarily in euros and Polish zloty.
Foreign currency exchange contracts - HiFXxe Operations
HiFXxe 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. HiFXxe 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'sxe's total portfolio of positions were $16.8$16.1 million and $52.5$34.7 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, and $16.7$16.8 million and $48.4$35.5 million for the three and ninesix months ended SeptemberJune 30, 2017,

2018, respectively. All of the derivative contracts used in the Company's HiFXxe 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'sxe'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. HiFXxe 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. HiFXxe 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 HiFXxe operations as of SeptemberJune 30, 20182019 was approximately $1.2$1.4 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 June 30, 2019 December 31, 2018 Balance Sheet Location June 30, 2019 December 31, 2018
Derivatives not designated as hedging instruments            
Foreign currency exchange contracts Prepaid expenses and other current assets $38,182
 $44,637
 
Accrued expenses and other current liabilities

 $(25,577) $(36,102)
  Asset Derivatives Liability Derivatives
    Fair Value   Fair Value
(in thousands) Balance Sheet Location September 30, 2018 December 31, 2017 Balance Sheet Location September 30, 2018 December 31, 2017
Derivatives not designated as hedging instruments            
Foreign currency exchange contracts Prepaid expense and other current assets $41,399
 $36,574
 
Accrued expenses and other current liabilities

 $(25,829) $(22,495)


The following tables summarize the gross and net fair value of derivative assets and liabilities as of SeptemberJune 30, 20182019 and December 31, 20172018 (in thousands):
Offsetting of Derivative Assets
       Gross Amounts Not Offset in the Consolidated Balance Sheet         Gross Amounts Not Offset in the Consolidated Balance Sheet  
As of September 30, 2018 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amounts
As of June 30, 2019 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amounts
Derivatives subject to a master netting arrangement or similar agreement $41,399
 $
 $41,399
 $(15,915) $(4,515) $20,969
 $38,182
 $
 $38,182
 $(19,279) $(3,838) $15,065
                        
As of December 31, 2017            
As of December 31, 2018            
Derivatives subject to a master netting arrangement or similar agreement $36,574
 $
 $36,574
 $(15,050) $(7,603) $13,921
 $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 June 30, 2019 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Paid Net Amounts
Derivatives subject to a master netting arrangement or similar agreement $(25,577) $
 $(25,577) $19,279
 $969
 $(5,329)
             
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)
        Gross Amounts Not Offset in the Consolidated Balance Sheet  
As of September 30, 2018 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Paid Net Amounts
Derivatives subject to a master netting arrangement or similar agreement $(25,829) $
 $(25,829) $15,915
 $1,004
 $(8,910)
             
As of December 31, 2017            
Derivatives subject to a master netting arrangement or similar agreement $(22,495) $
 $(22,495) $15,050
 $2,716
 $(4,729)

See Note 8,9, 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 three and ninesix months ended SeptemberJune 30, 20182019 and 2017:2018:
    Amount of Gain (Loss) Recognized in Income on Derivative Contracts (a)
  Location of Gain (Loss) Recognized in Income on Derivative Contracts Three Months Ended
June 30,
 Six Months Ended
June 30,
(in thousands)  2019 2018 2019 2018
Foreign currency exchange contracts Foreign currency exchange gain (loss), net $(2,126) $7,085
 $334
 $8,380
    Amount of Gain (Loss) Recognized in Income on Derivative Contracts (a)
  Location of Gain (Loss) Recognized in Income on Derivative Contracts Three Months Ended
September 30,
 Nine Months Ended
September 30,
(in thousands)  2018 2017 2018 2017
Foreign currency exchange contracts Foreign currency exchange gain (loss), net $2,058
 $3,062
 $10,438
 $(3,007)

(a) The Company enters into derivative contracts such as foreign currency exchange forwards and cross-currency swaps as part of its HiFXxe 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.

(8)(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 September 30, 2018 As of June 30, 2019
(in thousands) Balance Sheet Classification Level 1 Level 2 Level 3 Total Balance Sheet Classification Level 1 Level 2 Level 3 Total
Assets                
Foreign currency exchange contracts Other current assets $
 $41,399
 $
 $41,399
 Other current assets $
 $38,182
 $
 $38,182
Liabilities                
Foreign currency exchange contracts Other current liabilities $
 $(25,829) $
 $(25,829) Other current liabilities $
 $(25,577) $
 $(25,577)
 As of December 31, 2017 As of December 31, 2018
(in thousands) Balance Sheet Classification Level 1 Level 2 Level 3 Total Balance Sheet Classification Level 1 Level 2 Level 3 Total
Assets                    
Foreign currency exchange contracts Other current assets $
 $36,574
 $
 $36,574
 Other current assets $
 $44,637
 $
 $44,637
Liabilities                
Foreign currency exchange contracts Other current liabilities $
 $(22,495) $
 $(22,495) Other current liabilities $
 $(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 valuesvalue of the Company’s long-term debt (other than the Convertible Notes), including the current portion, approximateCredit Facility approximates fair value because interest is primarily based on LIBOR, which resets at various intervals of less than one year. The Company estimates the fair valuevalues of the Convertible Notes and Senior Notes using quoted prices in inactive markets for identical liabilities (Level 2). As of SeptemberJune 30, 2018 and December 31, 2017,2019, the fair values of the Convertible Notes and the Senior Notes were $562.6$519.2 million and $503.7$678.0 million, respectively, with carrying values of $377.9$429.6 million and $369.3$682.1 million, respectively.

(9)(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 three 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, and 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 paymentdigital media 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. HiFXxe offers account-to-account international payment services to high-income individuals and small-to-medium sized businesses. xe is also 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 three and ninesix months ended SeptemberJune 30, 20182019 and 20172018:
 For the Three Months Ended September 30, 2018 For the Three Months Ended June 30, 2019
(in thousands) 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated
Total revenues $261,736
 $185,431
 $268,291
 $(953) $714,505
 $231,946
 $184,160
 $276,783
 $(1,022) $691,867
Operating expenses:                    
Direct operating costs 101,763
 142,665
 144,758
 (950) 388,236
 105,568
 140,427
 148,834
 (1,018) 393,811
Salaries and benefits 21,653
 14,491
 48,945
 8,019
 93,108
 21,339
 14,998
 52,713
 9,500
 98,550
Selling, general and administrative 11,227
 9,968
 32,483
 2,109
 55,787
 10,745
 9,424
 31,731
 1,942
 53,842
Depreciation and amortization 16,694
 1,881
 7,854
 32
 26,461
 17,778
 1,756
 8,159
 74
 27,767
Total operating expenses 151,337
 169,005
 234,040
 9,210
 563,592
 155,430
 166,605
 241,437
 10,498
 573,970
Operating income (expense) $110,399
 $16,426
 $34,251
 $(10,163) $150,913
 $76,516
 $17,555
 $35,346
 $(11,520) $117,897

 For the Three Months Ended September 30, 2017 For the Three Months Ended June 30, 2018
(in thousands) 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated
Total revenues $226,321
 $184,234
 $228,105
 $(826) $637,834
 $194,893
 $166,463
 $261,816
 $(948) $622,224
Operating expenses:                    
Direct operating costs 99,024
 143,023
 123,588
 (820) 364,815
 96,326
 125,423
 140,707
 (944) 361,512
Salaries and benefits 16,817
 13,955
 44,110
 7,252
 82,134
 19,046
 14,327
 49,118
 9,232
 91,723
Selling, general and administrative 8,878
 9,145
 28,648
 2,608
 49,279
 10,216
 8,490
 31,426
 2,225
 52,357
Depreciation and amortization 14,805
 2,461
 7,403
 36
 24,705
 16,383
 1,894
 7,953
 33
 26,263
Total operating expenses 139,524
 168,584
 203,749
 9,076
 520,933
 141,971
 150,134
 229,204
 10,546
 531,855
Operating income (expense) $86,797
 $15,650
 $24,356
 $(9,902) $116,901
 $52,922
 $16,329
 $32,612
 $(11,494) $90,369


 For the Nine Months Ended September 30, 2018 For the Six Months Ended June 30, 2019
(in thousands) 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated
Total revenues $592,333
 $528,739
 $768,943
 $(2,771) $1,887,244
 $377,649
 $360,274
 $533,364
 $(1,911) $1,269,376
Operating expenses:                    
Direct operating costs 279,927
 403,010
 412,895
 (2,760) 1,093,072
 189,344
 273,952
 286,238
 (1,890) 747,644
Salaries and benefits 57,704
 43,235
 145,420
 24,178
 270,537
 40,770
 29,751
 103,869
 16,955
 191,345
Selling, general and administrative 30,557
 27,191
 93,610
 6,798
 158,156
 19,831
 17,476
 60,840
 3,842
 101,989
Depreciation and amortization 49,277
 5,653
 23,702
 94
 78,726
 34,420
 3,541
 16,297
 149
 54,407
Total operating expenses 417,465
 479,089
 675,627
 28,310
 1,600,491
 284,365
 324,720
 467,244
 19,056
 1,095,385
Operating income (expense) $174,868
 $49,650
 $93,316
 $(31,081) $286,753
 $93,284
 $35,554
 $66,120
 $(20,967) $173,991


 For the Nine Months Ended September 30, 2017 For the Six Months Ended June 30, 2018
(in thousands) 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated 
EFT
Processing
 epay 
Money
Transfer
 
Corporate
Services,
Eliminations
and Other
 Consolidated
Total revenues $488,030
 $512,531
 $649,205
 $(1,989) $1,647,777
 $330,597
 $343,308
 $500,652
 $(1,818) $1,172,739
Operating expenses:                    
Direct operating costs 238,753
 393,269
 348,724
 (1,978) 978,768
 178,163
 260,345
 268,138
 (1,810) 704,836
Salaries and benefits 46,125
 39,606
 125,273
 21,613
 232,617
 36,051
 28,744
 96,475
 16,159
 177,429
Selling, general and administrative 23,960
 27,628
 77,912
 10,208
 139,708
 19,331
 17,223
 61,125
 4,689
 102,368
Acquired intangible assets impairment

 2,286
 
 
 
 2,286
Depreciation and amortization 39,816
 7,667
 21,941
 96
 69,520
 32,583
 3,772
 15,848
 62
 52,265
Total operating expenses 350,940
 468,170
 573,850
 29,939
 1,422,899
 266,128
 310,084
 441,586
 19,100
 1,036,898
Operating income (expense) $137,090
 $44,361
 $75,355
 $(31,928) $224,878
 $64,469
 $33,224
 $59,066
 $(20,918) $135,841











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) June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018
EFT Processing $237,468
 $215,106
 $2,052,915
 $1,220,141
epay 37,381
 31,172
 718,894
 780,220
Money Transfer 49,384
 45,517
 1,508,408
 1,310,775
Corporate Services, Eliminations and Other 65
 74
 53,119
 10,019
   Total $324,298
 $291,869
 $4,333,336
 $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.
  Property and Equipment, net as of Total Assets as of
(in thousands) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017
EFT Processing $209,912
 $196,451
 $1,460,848
 $1,040,135
epay 29,496
 28,135
 616,406
 695,990
Money Transfer 43,684
 43,564
 1,366,298
 1,255,765
Corporate Services, Eliminations and Other 75
 153
 17,234
 148,139
   Total $283,167
 $268,303
 $3,460,786
 $3,140,029
 For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019
(in thousands)
EFT
Processing
 epay 
Money
Transfer
 Total 
EFT
Processing
 epay 
Money
Transfer
 Total
Europe$192,696
 $123,322
 $93,576
 $409,594
 $300,307
 $238,228
 $179,135
 $717,670
North America7,958
 37,732
 145,528
 191,218
 16,163
 77,396
 280,360
 373,919
Asia Pacific31,287
 18,920
 31,577
 81,784
 61,164
 36,294
 62,290
 159,748
Other5
 4,186
 6,102
 10,293
 15
 8,356
 11,579
 19,950
Eliminations
 
 
 (1,022) 
 
 
 (1,911)
Total$231,946
 $184,160
 $276,783
 $691,867
 $377,649
 $360,274
 $533,364
 $1,269,376


 For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018
(in thousands)
EFT
Processing
 epay 
Money
Transfer
 Total 
EFT
Processing
 epay 
Money
Transfer
 Total
Europe$158,413
 $103,344
 $81,816
 $343,573
 $258,499
 $216,794
 $155,774
 $631,067
North America8,327
 42,270
 143,755
 194,352
 16,343
 83,321
 272,739
 372,403
Asia Pacific28,146
 17,158
 31,713
 77,017
 55,740
 34,611
 63,854
 154,205
Other7
 3,691
 4,532
 8,230
 15
 8,582
 8,285
 16,882
Eliminations
 
 
 (948) 
 
 
 (1,818)
Total$194,893
 $166,463
 $261,816
 $622,224
 $330,597
 $343,308
 $500,652
 $1,172,739


(10)(11) INCOME TAXES
The Company's effective income tax rate was 25.5%31.5% and 27.4%31.6% for both the three and six months ended June 30, 2019, respectively, compared to 27.3% and 30.1% for the three and ninesix months ended SeptemberJune 30, 2018, respectively, compared to 13.4% and 19.3% for the three and nine months ended September 30, 2017, respectively. The Company's effective income tax raterates for the three and ninesix months ended SeptemberJune 30, 2017 was less than the applicable statutory rate of 35% primarily due to the release of a $16.3 million valuation allowance against certain foreign deferred tax assets2019 and to a lesser extent, the Company's U.S. tax position. In 2017, the significant year-over-year and year-to-date profitability of ATMs under management in Europe allowed the release of the valuation allowance as the Company believes that certain foreign deferred assets, including net operating loss carryforwards, will more likely than not be realized in future periods. In addition, the Company had significant U.S. federal tax net operating loss carryforwards with no recent history of significant U.S. taxable income; therefore, the Company had recorded a valuation allowance against its net U.S. deferred tax assets. Accordingly, in instances when the Company generated pre-tax U.S. GAAP income, no income tax expense was recognized to the extent there2018 were net operating loss carryforwards to offset the pre-tax U.S. GAAP income.
The Company's effective income tax rate for the three and nine months ended September 30, 2018 was higher than the applicable statutory income tax rate of 21% as a result of the enactment into law of what is commonly known as the Tax Cuts and Jobs Act of 2017 (the "Act") and the Act's impact on the Company's U.S. income tax positions at the end of 2017. The most significant provisions of the Act are the transition tax on previously undistributedcertain foreign earnings of foreign subsidiaries, the reduction in the U.S. corporateCompany being subject to higher local statutory income tax rate from 35% to 21% beginning on January 1, 2018,rates and new taxes on certain foreign sourced earnings. As stated above, the Company had recorded a valuation allowance against its net U.S. deferred tax assets. Upon enactmentapplication of the Act, the Company expected to utilize its historic U.S. federal tax net operating losses to partially offset the transition tax and released the associated valuation allowance in the fourth quarter of 2017. This

change has created additional U.S. tax expense as the Company now recognizes income tax expense on its pre-tax U.S. GAAP income. In addition, the Act's global intangible low-taxed income ("GILTI") tax provision has subjectedto the Company. The GILTI provision subjects the Company's current foreign earnings to U.S. taxation which creates additional U.S. tax expense.
The SEC staff issued Staff Accounting Bulletin ("SAB") 118, which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period of up to one year from the Act's enactment date for companies to complete their accounting. In accordance with SAB 118, the Company provided provisional amounts where appropriate which it believes represent a reasonable estimate based on available information and its interpretations of the Act. Further, the Company is allowed to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or recognize such taxes as current period expenses when incurred. Due to the complexity of calculating GILTI, the Company has not determined which method it will apply. The Company will continue to evaluate the Act and adjust the provisional amounts as additional information becomes available.
(11)(12) COMMITMENTS
As of SeptemberJune 30, 2018,2019, the Company had $74.3$76.0 million of stand-by letters of credit/bank guarantees issued on its behalf, of which $47.9$46.3 million are outstanding under the Credit Facility. The remaining stand-by letters of credit/bank guarantees are collateralized by $3.7 million of cash deposits held by the respective issuing banks.
Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries. As of SeptemberJune 30, 2018,2019, the

Company had granted off balance sheet guarantees for cash in various ATM networks amounting to $23.2$12.6 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $29.4$41.6 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. As of SeptemberJune 30, 2018,2019, the balance of such cash used in the Company's ATM networks for which the Company was responsible was approximately $318$718 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 theany 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; and

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 SeptemberJune 30, 20182019 or December 31, 2017.2018.
(12)(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.
(13) SUBSEQUENT EVENT(14) LEASES
On October 17, 2018,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 the lease commencement date based on the present value of the lease payments over the lease terms.

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 terms. 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 terms. The Company also has a unilateral termination right for a majority of the ATM site leases. Since the Company entered into a new unsecured revolving credit agreement for $1.0 billion that expires on October 17, 2023. Interest on borrowings varies based uponis not reasonably certain to exercise the renewal or terminal options, the options are not considered in determining the lease terms, and associated payment impacts are excluded from lease payments.
Certain of the Company's corporate credit ratinglease 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 a margin over LIBORwhich 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 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 new credit facility replaced the $675 million senior secured credit facility that was due to expire on April 9, 2019.material restrictive covenants.
Once each of Euronet's domestic subsidiaries reaches a certain size, it is requiredFuture minimum lease payments

Future minimum lease payments under the unsecured revolving credit agreement to provide a guaranteeoperating leases as of all the outstanding obligationsJune 30, 2019 are:
 As of June 30, 2019
Maturity of Lease Liabilities (in thousands)
Operating Leases
Remainder of 2019$64,248
2020107,916
202178,654
202253,295
202333,856
Thereafter53,388
Total lease payments$391,357
Less: imputed interest(25,596)
Present value of lease liabilities$365,761
Future minimum lease payments under the credit agreement.non-cancelable operating leases (with initial lease terms in excess of one year) as of December 31, 2018 are as follows:
(in thousands) 
Operating
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 June 30, 2019 Six months ended June 30, 2019
Operating lease expenseSelling, general and administrative and Direct operating costs $33,113
 $63,573
Variable lease expense
Selling, general and administrative and Direct operating costs

 12,320
 18,889
Total lease expense  $45,433
 $82,462




Other information about lease amounts recognized in the consolidated financial statements is summarized as follows:
Lease Term and Discount Rate of Operating LeasesAs of June 30, 2019
Weighted- average remaining lease term (years)4.5
Weighted- average discount rate3.1%


The following table presents supplemental cash flow and non-cash information related to leases:
Other Information (in thousands)
 Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities (a)
 $62,935
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets:  
ROU assets obtained in exchange for new operating lease liabilities $157,914

(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;
business strategy;
government regulatory action;
the expected effects of changes in laws or accounting standards;
technological advances; and
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 Brexit vote,negotiations related to the United Kingdom's proposed departure 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 of next year;2019; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, consumer and data protection requirements, and the E.U. General Data Protection Regulation, or GDPR and Payment Services Directive 2, 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, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting Euronet; 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; the outlook for markets we serve; 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, 20172018 and in Part II, Item 1A-Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.June 30, 2019. Our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are 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.



OVERVIEW
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,services; software solutions and cloud based payment solutions; electronic distribution of prepaid mobile airtime and other electronic payment products,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 41,902 ATMs and approximately 279,000 POS terminals across Europe, the Middle East and 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, dynamic currency conversion ("DCC"), 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 prepaid mobile airtime and other electronic payment products. We operate a network of approximately 687,000 POS terminals providing electronic processing of prepaid mobile airtime top-up services and other electronic payment products 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, and global account-to-account money transfer services under the brand name HiFX. 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 imeremit.com), disbursing money transfers through a worldwide correspondent network that includes approximately 361,000 locations. xe is a provider of foreign currency exchange information and offers money transfer services on its currency data websites (xe.com and x-rates.com). We offer services under the brand name HiFX through HiFX branded websites and HiFX customer service representatives. 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.
The EFT Processing Segment, which processes transactions for a network of 46,636 ATMs and approximately 307,000 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 700,000 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 385,000 locations. 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. We offer services under the brand name xe through our websites (www.xe.com and https://transfer.xe.com). 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, 1114 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 72% 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 37%33% and 31%30% of total consolidated revenues for the thirdsecond quarter and first nine monthshalf of 2018,2019, respectively, 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 26%27% and 28% of total consolidated revenues for the thirdsecond quarter and first nine monthshalf of 2018,2019, respectively, 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 paymentdigital media 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 productsdigital media has decreased over time, and non-mobile contentdigital media now produces approximately 60%61% of epay Segment revenues. Other electronic paymentdigital media 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 37%40% and 41%42% of total consolidated revenues for the thirdsecond quarter and first nine monthshalf of 2018,2019, respectively, 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 HiFXxe 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; and
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 sponsorship agreements;
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; and
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;services and moves by mobile operators to sell prepaid mobile airtime directly to consumers;
the effect of competition among mobile operators on the cost of mobile data and airtime which results in fewer or less frequent purchases of prepaid mobile airtime by consumers;
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; and
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 paymentdigital media products, expansion of our network of retailers and access to products of mobile operators and other contentdigital 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; and
our ability to provide additional value-added products under the xe brand, and;brand.
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 three and ninesix months ended SeptemberJune 30, 20182019 and 20172018 are summarized in the tables below:
 Revenues for the Three Months Ended September 30, Year-over-Year Change Revenues for the Nine Months Ended September 30, Year-over-Year Change Revenues for the Three Months Ended June 30, Year-over-Year Change Revenues for the Six Months Ended June 30, Year-over-Year Change
(dollar amounts in thousands) 2018 2017 
Increase
(Decrease)
Amount
 
Increase
Percent
 2018 2017 Increase
(Decrease) Amount
 
Increase
Percent
 2019 2018 
Increase
(Decrease)
Amount
 
Increase
Percent
 2019 2018 Increase
(Decrease) Amount
 
Increase
Percent
EFT Processing $261,736
 $226,321
 $35,415
 16% $592,333
 $488,030
 $104,303
 21% $231,946
 $194,893
 $37,053
 19% $377,649
 $330,597
 $47,052
 14%
epay 185,431
 184,234
 1,197
 1% 528,739
 512,531
 16,208
 3% 184,160
 166,463
 17,697
 11% 360,274
 343,308
 16,966
 5%
Money Transfer 268,291
 228,105
 40,186
 18% 768,943
 649,205
 119,738
 18% 276,783
 261,816
 14,967
 6% 533,364
 500,652
 32,712
 7%
Total 715,458
 638,660
 76,798
 12% 1,890,015
 1,649,766
 240,249
 15% 692,889
 623,172
 69,717
 11% 1,271,287
 1,174,557
 96,730
 8%
Corporate services, eliminations and other (953) (826) (127) 15% (2,771) (1,989) (782) 39% (1,022) (948) (74) 8% (1,911) (1,818) (93) 5%
Total $714,505
 $637,834
 $76,671
 12% $1,887,244
 $1,647,777
 $239,467
 15% $691,867
 $622,224
 $69,643
 11% $1,269,376
 $1,172,739
 $96,637
 8%
 Operating Income (Expense) for the Three Months Ended September 30, Year-over-Year Change Operating Income (Expense) for the Nine Months Ended September 30, Year-over-Year Change Operating Income (Expense) for the Three Months Ended June 30, Year-over-Year Change Operating Income (Expense) for the Six Months Ended June 30, Year-over-Year Change
(dollar amounts in thousands) 2018 2017 Increase (Decrease)
Amount
 Increase
Percent
 2018 2017 Increase
Amount
 Increase
(Decrease) Percent
 2019 2018 Increase (Decrease)
Amount
 Increase
Percent
 2019 2018 Increase
Amount
 Increase
(Decrease) Percent
EFT Processing $110,399
 $86,797
 $23,602
 27% $174,868
 $137,090
 $37,778
 28 % $76,516
 $52,922
 $23,594
 45% $93,284
 $64,469
 $28,815
 45%
epay 16,426
 15,650
 776
 5% 49,650
 44,361
 5,289
 12 % 17,555
 16,329
 1,226
 8% 35,554
 33,224
 2,330
 7%
Money Transfer 34,251
 24,356
 9,895
 41% 93,316
 75,355
 17,961
 24 % 35,346
 32,612
 2,734
 8% 66,120
 59,066
 7,054
 12%
Total 161,076
 126,803
 34,273
 27% 317,834
 256,806
 61,028
 24 % 129,417
 101,863
 27,554
 27% 194,958
 156,759
 38,199
 24%
Corporate services, eliminations and other (10,163) (9,902) (261) 3% (31,081) (31,928) 847
 (3)% (11,520) (11,494) (26) % (20,967) (20,918) (49) %
Total $150,913
 $116,901
 $34,012
 29% $286,753
 $224,878
 $61,875
 28 % $117,897
 $90,369
 $27,528
 30% $173,991
 $135,841
 $38,150
 28%



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 thirdsecond quarter and first nine monthshalf of 2018 was 1%2019 were each approximately 5% less, and 3% more, respectively, due to the changes in foreign currency exchange rates when compared to the same periods of 2017.2018.
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 September 30,
 Increase (Decrease) Percent 
Average Translation Rate
Nine Months Ended September 30,
 Increase (Decrease) Percent 
Average Translation Rate
Three Months Ended June 30,
 Decrease Percent 
Average Translation Rate
Six Months Ended June 30,
 Decrease Percent
Currency (dollars per foreign currency) 2018 2017 2018 2017  2019 2018 2019 2018 
Australian dollar $0.7311
 $0.7896
 (7)% $0.7579
 $0.7661
 (1)% $0.7002
 $0.7567
 (7)% $0.7064
 $0.7713
 (8)%
British pound $1.3027
 $1.3091
  % $1.3516
 $1.2756
 6 % $1.2851
 $1.3602
 (6)% $1.2938
 $1.3760
 (6)%
euro $1.1624
 $1.1754
 (1)% $1.1944
 $1.1136
 7 % $1.1236
 $1.1919
 (6)% $1.1295
 $1.2104
 (7)%
Hungarian forint $0.0036
 $0.0038
 (5)% $0.0038
 $0.0036
 6 % $0.0035
 $0.0038
 (8)% $0.0035
 $0.0039
 (10)%
Indian rupee $0.0143
 $0.0156
 (8)% $0.0149
 $0.0153
 (3)% $0.0144
 $0.0149
 (3)% $0.0143
 $0.0152
 (6)%
Malaysian ringgit $0.2444
 $0.2347
 4 % $0.2509
 $0.2302
 9 % $0.2412
 $0.2534
 (5)% $0.2428
 $0.2542
 (4)%
New Zealand dollar $0.6684
 $0.7309
 (9)% $0.6999
 $0.7156
 (2)% $0.6625
 $0.7042
 (6)% $0.6719
 $0.7156
 (6)%
Polish zloty $0.2702
 $0.2762
 (2)% $0.2814
 $0.2613
 8 % $0.2626
 $0.2799
 (6)% $0.2633
 $0.2870
 (8)%

COMPARISON OF OPERATING RESULTS FOR THE THREE AND NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 20182019 AND 20172018
EFT PROCESSING SEGMENT
The following table presents the results of operations for the three and ninesix months ended SeptemberJune 30, 20182019 and 20172018 for our EFT Processing Segment:
 Three Months Ended
September 30,
 Year-over-Year Change Nine Months Ended
September 30,
 Year-over-Year Change Three Months Ended
June 30,
 Year-over-Year Change Six Months Ended
June 30,
 Year-over-Year Change
(dollar amounts in thousands) 2018 2017 Increase Amount Increase Percent 2018 2017 Increase (Decrease) Amount Increase Percent 2019 2018 Increase Amount Increase Percent 2019 2018 Increase Amount Increase Percent
Total revenues $261,736
 $226,321
 $35,415
 16% $592,333
 $488,030
 $104,303
 21% $231,946
 $194,893
 $37,053
 19% $377,649
 $330,597
 $47,052
 14%
Operating expenses:                                
Direct operating costs 101,763
 99,024
 2,739
 3% 279,927
 238,753
 41,174
 17% 105,568
 96,326
 9,242
 10% 189,344
 178,163
 11,181
 6%
Salaries and benefits 21,653
 16,817
 4,836
 29% 57,704
 46,125
 11,579
 25% 21,339
 19,046
 2,293
 12% 40,770
 36,051
 4,719
 13%
Selling, general and administrative 11,227
 8,878
 2,349
 26% 30,557
 23,960
 6,597
 28% 10,745
 10,216
 529
 5% 19,831
 19,331
 500
 3%
Acquired intangible assets impairment 
 
 
 n/m
 
 2,286
 (2,286) n/m
Depreciation and amortization 16,694
 14,805
 1,889
 13% 49,277
 39,816
 9,461
 24% 17,778
 16,383
 1,395
 9% 34,420
 32,583
 1,837
 6%
Total operating expenses 151,337
 139,524
 11,813
 8% 417,465
 350,940
 66,525
 19% 155,430
 141,971
 13,459
 9% 284,365
 266,128
 18,237
 7%
Operating income $110,399
 $86,797
 $23,602
 27% $174,868
 $137,090
 $37,778
 28% $76,516
 $52,922
 $23,594
 45% $93,284
 $64,469
 $28,815
 45%
Transactions processed (millions) 711
 615
 96
 16% 2,010
 1,726
 284
 16% 752
 677
 75
 11% 1,444
 1,299
 145
 11%
ATMs as of September 30, 41,902
 38,105
 3,797
 10% 41,902
 38,105
 3,797
 10%
ATMs as of June 30, 46,636
 41,205
 5,431
 13% 46,636
 41,205
 5,431
 13%
Average ATMs 41,761
 38,123
 3,638
 10% 39,975
 36,524
 3,451
 9% 45,717
 40,513
 5,204
 13% 43,317
 39,082
 4,235
 11%


Revenues
EFT Processing Segment total revenues for the three and ninesix months ended SeptemberJune 30, 20182019 were $261.7$231.9 million and $592.3$377.6 million, respectively, an increase of $35.4$37.1 million or 16%19% and $104.3$47.1 million or 21%14% as compared to the same periods in 2017.2018, respectively. The increaseincreases in total revenues for the three and ninesix months ended SeptemberJune 30, 20182019 were primarily due to an increase in the number of ATMs under management in Europe.Europe and Asia Pacific. 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 dynamic currency conversion,primarily attributable to increases in DCC transactions due to Visa's rule change to allow our ATMs to provide DCC beginning second quarter of 2019, domestic and international surcharge, and foreign currency dispensing. The increases for the first nine months of 2018 were also impacted by the recovery from a cash shortage in India due to the demonetization initiated in the fourth quarter of 2016, which carried over into the first half of 2017. In the second half of 2017, the India cash supply returned to near pre-demonetization levels. Foreign currency exchange rate movements increaseddecreased total revenues by approximately $20.3$13.1 million and $24.8 million for the first ninethree and six months of 2018ended June 30, 2019, respectively, as compared to the same periodperiods in 2017 and decreased total revenues by approximately $4.8 million for the third quarter of 2018, as compared to the same period in 2017.respectively.
Average monthly revenues per ATM were $2,089$1,691 and $1,646$1,453 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, compared to $1,979$1,604 and $1,485$1,410 for the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively. Revenues per transaction were $0.37$0.31 for the thirdsecond quarter of 2019 and $0.26 for the first half of 2019, compared to $0.29 for the first nine monthssecond quarter of 2018 respectively, compared to $0.37 for the third quarter and and $0.28$0.25 for the first nine monthshalf of 2017, respectively.2018. The increaseincreases in average monthly revenues per ATM for the first ninethree and six months of 2018 wasended June 30, 2019 were primarily the result of an increase in value-added transactions on the impactATMs and point-of-sale terminals, including increases in DCC transactions due to Visa's rule change to allow our ATMs to provide DCC beginning second quarter of the weakening of the U.S. dollar against key2019, domestic and international surcharge, and foreign currencies.currency dispensing.
Direct operating costs
EFT Processing Segment direct operating costs were $101.8$105.6 million and $279.9$189.3 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, an increase of $2.7$9.2 million or 3%10% and $41.2$11.2 million or 17%6% as compared to the same periods in 2017.2018, respectively. 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 three and ninesix months

ended SeptemberJune 30, 20182019 were primarily due to an increase in the number of ATMs under management, particularly our independent ATM network, which has more seasonal revenue generation.partly offset by the impact of the strengthening of the U.S. dollar against key foreign currencies.

Gross profit
Gross profit, which is calculated as revenues less direct operating costs, was $160.0$126.4 million and $312.4$188.3 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, compared to $127.3$98.6 million and $249.3$152.4 million for the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively. The increases in gross profit were primarily due to the growth in revenues from the increases in ATMs under management, DCC transactions, domestic and international surcharge, and foreign currency dispensing. The net impact of the U.S. dollar weakeningstrengthening against key foreign currencies also contributed topartly offset the increase in gross profit for the first ninethree and six months of 2018.ended June 30, 2019. Gross profit as a percentage of revenues (“gross margin”) was 61.1%54.5% and 52.7%49.9% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to 56.2%50.6% and 51.1%46.1% for the three and ninesix months ended SeptemberJune 30, 2017.2018, respectively. For the three and ninesix months ended SeptemberJune 30, 2018,2019, the increasesincrease in gross margins weremargin was attributable to the increases in DCC transactions due to Visa's rule change to allow our ATMs to provide DCC beginning second quarter of 2019, domestic and international surcharge, foreign currency dispensing, and also a higher volume of sales of POS devices in Greece in the second quarter of 2018 on which we earned a lower margin in the third quarter of 2017 which did not occur in the current period.
Salaries and benefits
Salaries and benefits expense increased $4.8$2.3 million or 29%12% and $11.6$4.7 million or 25%13% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, compared to the same periods in 2017. The increases in salaries and benefits were primarily attributable to higher bonus expense resulting from operating income growth and additional headcount to support an increase in the number of ATMs and POS devices under management.2018, respectively. As a percentage of revenues, these costs increased to 8.3%9.2% and 9.7%10.8% for the thirdsecond quarter and first nine monthshalf of 2018,2019, respectively, compared to 7.4%9.8% and 9.5%10.9% and for the thirdsecond quarter of 2018 and first nine monthshalf of 2017,2018, respectively. 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 three and ninesix months ended SeptemberJune 30, 20182019 were $11.2$10.7 million and $30.6$19.8 million, respectively, an increase of $2.3$0.5 million or 26%for both the three and $6.6 million or 28% as compared to the same periods in 2017.six months ended June 30, 2018. The increases in selling, general and administrative expenses were primarily due to an increase in costs to support the growth in the business.business partly offset by the strengthening of the U.S. dollar against key foreign currencies. As a percentage of revenues, selling, general and administrative expenses were 4.3%4.6% and 5.2%5.3% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, compared to 3.9%5.2% and 4.9%5.8% for the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively. The decreases in selling, general and administrative expenses as a percentage of revenues were primarily attributable to the increases in the number of DCC transactions processed due to Visa's rule change to allow our ATMs to provide DCC beginning second quarter of 2019, domestic and international surcharge, and foreign currency dispensing, which did not require similar increases in support costs.
Depreciation and amortization
Depreciation and amortization expense increased $1.9$1.4 million and $9.5$1.8 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, compared to the same periods in 2017.2018, respectively. The increases were primarily attributable to the deployment of additional ATMs under management and software assets. As a percentage of revenues, depreciation and amortization expense was 6.4%7.7% and 8.3%9.1% for the thirdsecond quarter and first nine monthshalf of 2018,2019, respectively, as compared to 6.5%8.4% and 8.2%9.9% for the same periods of 2017.2018. The decreases in depreciation and amortization expenses as a percentage of revenues were primarily attributable to the increases in the number of DCC transactions processed due to Visa's rule change to allow our ATMs to provide DCC beginning second quarter of 2019, domestic and international surcharge, and foreign currency dispensing, which did not require similar increases in fixed assets.
Operating income
EFT Processing Segment operating income for the three and ninesix months ended SeptemberJune 30, 20182019 was $110.4$76.5 million and $174.9$93.3 million, respectively, an increase of $23.6 million or 27%45% and $37.8$28.8 million or 28%45% as compared to the same periods in 2017.2018, respectively. EFT Processing Segment operating income for the three and ninesix months ended SeptemberJune 30, 20182019 increased primarily due to the increases in the number of DCC transactions due to Visa's rule change to allow our ATMs to provide DCC beginning second quarter of 2019, domestic and international surcharge, and foreign currency dispensing as a result of the increased number of ATMs.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 42.2%33.0% and 24.7% for the thirdsecond quarter and 29.5%first half of 2019, respectively, compared to 27.2% and 19.5% for the first nine monthssame periods of 2018 compared to 38.4% for the third quarter and 28.1% for the first nine months of 2017.2018. The increasesincrease in operating margins weremargin was primarily due to higher operating revenues partially offset by higher operating expenses incurred to support the increased revenues and additional ATMs under management. Operating income per transaction was $0.16$0.10 and $0.06 for the thirdsecond quarter and $0.09 for the first nine monthshalf of 20182019 as compared to $0.14$0.08 and $0.08$0.05 for the same periods of 2017.2018.



EPAY SEGMENT
The following table presents the results of operations for the three and ninesix months ended SeptemberJune 30, 20182019 and 20172018 for our epay Segment:
 Three Months Ended
September 30,
 Year-over-Year Change Nine Months Ended
September 30,
 Year-over-Year Change Three Months Ended
June 30,
 Year-over-Year Change Six Months Ended
June 30,
 Year-over-Year Change
(dollar amounts in thousands) 2018 2017 Increase (Decrease) Amount Increase (Decrease) Percent 2018 2017 Increase
(Decrease)Amount
 Increase
(Decrease)Percent
 2019 2018 Increase (Decrease) Amount Increase (Decrease) Percent 2019 2018 Increase
(Decrease)Amount
 Increase
(Decrease)Percent
Total revenues $185,431
 $184,234
 $1,197
 1 % $528,739
 $512,531
 $16,208
 3 % $184,160
 $166,463
 $17,697
 11 % $360,274
 $343,308
 $16,966
 5 %
Operating expenses:                                
Direct operating costs 142,665
 143,023
 (358)  % 403,010
 393,269
 9,741
 2 % 140,427
 125,423
 15,004
 12 % 273,952
 260,345
 13,607
 5 %
Salaries and benefits 14,491
 13,955
 536
 4 % 43,235
 39,606
 3,629
 9 % 14,998
 14,327
 671
 5 % 29,751
 28,744
 1,007
 4 %
Selling, general and administrative 9,968
 9,145
 823
 9 % 27,191
 27,628
 (437) (2)% 9,424
 8,490
 934
 11 % 17,476
 17,223
 253
 1 %
Depreciation and amortization 1,881
 2,461
 (580) (24)% 5,653
 7,667
 (2,014) (26)% 1,756
 1,894
 (138) (7)% 3,541
 3,772
 (231) (6)%
Total operating expenses 169,005
 168,584
 421
  % 479,089
 468,170
 10,919
 2 % 166,605
 150,134
 16,471
 11 % 324,720
 310,084
 14,636
 5 %
Operating income $16,426
 $15,650
 $776
 5 % $49,650
 $44,361
 $5,289
 12 % $17,555
 $16,329
 $1,226
 8 % $35,554
 $33,224
 $2,330
 7 %
Transactions processed (millions) 284
 293
 (9) (3)% 805
 901
 (96) (11)% 369
 264
 105
 40 % 707
 522
 185
 35 %
Revenues
epay Segment total revenues for the three and ninesix months ended SeptemberJune 30, 20182019 were $185.4$184.2 million and $528.7$360.3 million, respectively, an increase of $1.2$17.7 million or 1% and $16.2$17.0 million or 3% as compared to the same periods in 2017. The total revenues for the third quarter of 2018, was consistent with the same period in 2017.respectively. The increases in total revenues for the first nine months of 2018 waswere primarily due to an increase in promotional digital media transactions fulfilled by our cadooz subsidiary that were recorded on a gross value basis and an increase in the number of non-mobiledigital media transactions and the impact of the U.S. dollar weakening against key foreign currencies. The increase in total revenues was partially offset by the ASC 606 adjustment and a decrease in prepaid mobile transactions processed in the U.S., the U.K. and Australia due to competitive pressures on prepaid mobile carriers.processed. Foreign currency exchange rate movements decreased total revenues by approximately $3.8$9.1 million for the thirdsecond quarter of 20182019 and increased total revenues by $18.2$24.9 million for the first nine monthshalf of 2018,2019 as compared to the same periods in 2017.2018, respectively.
Revenues per transaction were $0.65$0.50 for the thirdsecond quarter and $0.66$0.51 for the first nine monthshalf of 20182019 compared to $0.63 and $0.57$0.66 for the same periods in 2017.2018, respectively. The increasesdecrease in revenues per transaction werewas primarily driven by the revenue growth from non-mobileresult of the increase in a high volume of low-margin transactions processed for which we generally earn higher revenues per transaction than mobile transactions.in India.
Direct operating costs
epay Segment direct operating costs were $142.7$140.4 million and $403.0$274.0 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, a decrease of $0.4 million and an increase of $9.7$15.0 million and $13.6 million as compared to the same periods in 2017.2018, respectively. 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 increaseincreases in direct operating costs for the second quarter and first nine monthshalf of 2018 was2019 were primarily due to the ASC 606 adjustmentincreases in promotional digital media transactions fulfilled by our cadooz subsidiary and netcommission paid to wholesalers partially offset by the impact of the U.S. dollar weakeningstrengthening against key foreign currencies.
Gross profit
Gross profit was $42.8$43.7 million and $125.7$86.3 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to $41.2$41.0 million and $119.3$83.0 million for the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively. The increases were primarily due to the growth in non-mobiledigital media transactions processed, partly offset by a decrease in prepaid mobile transactions processed in certain markets.markets and the net impact of the U.S. dollar strengthening against key foreign currencies.
During the three and ninesix months ended SeptemberJune 30, 2018,2019, the gross margin was essentially flat compared to the same periods in the prior year. Gross margin was 23.1%23.7% and 23.8%24.0% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to 22.4%24.7% and 23.3%24.2% for the same periods in 2017.2018, respectively. The decreases in the gross margin for the three and six months ended June 30, 2019 were driven by the promotional digital media transactions fulfilled by our cadooz subsidiary that was recorded on a gross value basis.

Salaries and benefits
Salaries and benefits expense increased $0.5$0.7 million or 4%5% and $3.6$1.0 million or 9%4% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, compared to the same periods in 2017.2018, respectively. The increases were mainly driven by the higherincreased headcount in an effort to growsupport growth in the segment. As a percentage of revenues, salaries and benefits were 7.8%8.1% and 8.2%8.3% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to 7.6%which were generally consistent with 8.6% and 7.7%8.4% for the same periods in 2017.2018, respectively.
Selling, general and administrative
Selling, general and administrative expenses were $10.0$9.4 million and $27.2$17.5 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, an increase of 9%11% and a decrease of 2%1% as compared to the same periods in 2017. The increase for the third quarter of 2018, was mainly due to increased promotional cost for our non-mobile products. The decrease in selling, general and administrative expenses first nine months of 2018 for the was mainly due to cost control efforts.respectively. As a percentage of revenues, selling, general and administrative expenses were 5.4%5.1% and 5.1%4.9% for the three and ninesix months ended SeptemberJune 30, 20182019 compared to 5.0%5.1% and 5.4%5.0% for the same periods in 2017.2018, respectively.
Depreciation and amortization
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 $1.9$1.8 million and $5.7$3.5 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, a decrease of 24%7% and 26%6% as compared to the same periods in 2017.2018, respectively. The decreases were largelyprimarily due to certain intangible assets becoming fully amortized for the three and nine months ended September 30, 2017.in 2019. As a percentage of revenues, depreciation and amortization expense was 1.0% and 1.1% for the three and nine months ended September 30, 2018, respectively, and 1.3% and 1.5% for both the three and ninesix months ended SeptemberJune 30, 2017, respectively.2019 as compared to 1.1% for both the three and six months ended June 30, 2018.
Operating income
epay Segment operating income for the three and ninesix months ended SeptemberJune 30, 20182019 was $16.4$17.6 million and $49.7$35.6 million, respectively, an increase of $0.8$1.2 million and $5.3$2.3 million as compared to the same periods in 2017.2018, respectively. Operating income for the three and ninesix months ended SeptemberJune 30, 20182019 improved as a result of the increased gross profit fromincrease in the distributionportion of more non-mobile products, along with operating cost controls.higher-margin digital media transactions.
Operating margin increased to 8.9% and 9.4% for the three and ninesix months ended SeptemberJune 30, 2018,2019 was 9.5% and 9.9%, respectively, from 8.5%as compared to the 9.8% and 8.7%9.7% for the same periods in 2017,2018, respectively. The increases were mainlydecrease in the second quarter of 2019 was primarily due to the promotional digital media transactions fulfilled by our cadooz subsidiary. The increase in the first half of 2019 was primarily driven by an increase in the percentage of revenues from non-mobiledigital media products which earn a higher margin than mobile transactions. Operating income per transaction increaseddecreased to $0.06$0.05 for both the three and ninesix months ended SeptemberJune 30, 20182019, respectively, from $0.05$0.06 for both the same periods in 2017.2018, respectively. The increasesdecreases in the three and six months ended June 30, 2019 were primarily due to the loss of a high-volume, low-margin customerincrease in the Middle East.high volume, low margin transactions processed in India.



MONEY TRANSFER SEGMENT
The following table presents the results of operations for the three and ninesix months ended SeptemberJune 30, 20182019 and 20172018 for the Money Transfer Segment:
 Three Months Ended
September 30,
 Year-over-Year Change Nine Months Ended
September 30,
 Year-over-Year Change Three Months Ended
June 30,
 Year-over-Year Change Six Months Ended
June 30,
 Year-over-Year Change
(dollar amounts in thousands) 2018 2017 Increase Amount Increase Percent 2018 2017 Increase
Amount
 Increase Percent 2019 2018 Increase Amount Increase Percent 2019 2018 Increase
(Decrease)Amount
 Increase Percent
Total revenues $268,291
 $228,105
 $40,186
 18% $768,943
 $649,205
 $119,738
 18% $276,783
 $261,816
 $14,967
 6% $533,364
 $500,652
 $32,712
 7 %
Operating expenses:                                
Direct operating costs 144,758
 123,588
 21,170
 17% 412,895
 348,724
 64,171
 18% 148,834
 140,707
 8,127
 6% 286,238
 268,138
 18,100
 7 %
Salaries and benefits 48,945
 44,110
 4,835
 11% 145,420
 125,273
 20,147
 16% 52,713
 49,118
 3,595
 7% 103,869
 96,475
 7,394
 8 %
Selling, general and administrative 32,483
 28,648
 3,835
 13% 93,610
 77,912
 15,698
 20% 31,731
 31,426
 305
 1% 60,840
 61,125
 (285)  %
Depreciation and amortization 7,854
 7,403
 451
 6% 23,702
 21,941
 1,761
 8% 8,159
 7,953
 206
 3% 16,297
 15,848
 449
 3 %
Total operating expenses 234,040
 203,749
 30,291
 15% 675,627
 573,850
 101,777
 18% 241,437
 229,204
 12,233
 5% 467,244
 441,586
 25,658
 6 %
Operating income $34,251
 $24,356
 $9,895
 41% $93,316
 $75,355
 $17,961
 24% $35,346
 $32,612
 $2,734
 8% $66,120
 $59,066
 $7,054
 12 %
Transactions processed (millions) 27.8
 23.9
 3.9
 16% 79.0
 67.4
 11.6
 17% 28.9
 26.9
 2.0
 7% 55.5
 51.2
 4.3
 8 %
Revenues
Money Transfer Segment total revenues for the three and ninesix months ended SeptemberJune 30, 20182019 were $268.3$276.8 million and $768.9$533.4 million, respectively, an increase of $40.2$15.0 million or 18%6% and $119.7$32.7 million or 18%7% as compared to the same periods in 2017.2018. The increases in total revenues for the three and ninesix months ended SeptemberJune 30, 20182019 were primarily due to increasesan 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 increased slightly Foreign currency exchange rate movements decreased total revenues by approximately $7.9 million for the second quarter of 2019 and $17.1 million for the first half of 2019 as compared to the same periods in the prior year. 2018.
Revenues per transaction increaseddecreased to $9.65$9.58 and $9.73$9.61 for the thirdsecond quarter and first nine monthshalf of 2018,2019, respectively, from $9.54$9.73 and $9.63$9.78 for the same periods in 2017.2018. The decreases were 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 $144.8$148.8 million and $412.9$286.2 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, an increase of $21.2$8.1 million or 17%6% and $64.2$18.1 million or 18%7% as compared to the same periods in 2017.2018. 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 increases in direct operating costs for the three and ninesix months of 20182019 were primarily due to growth in the number of money transfer transactions processed in both the U.S. and foreign markets.
Gross profit
Gross profit was $123.5$127.9 million and $356.0$247.1 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to $104.5$121.1 million and $300.5$232.5 million for the three and ninesix months ended SeptemberJune 30, 2017,2018, respectively. The increases in gross profit were primarily due to growth in the number of money transfer transactions processed in both the U.S. and foreign markets.
During the three and ninesix months ended SeptemberJune 30, 2018,2019, gross margin remained flat at 46.0%46.2% and 46.3%, respectively, as compared to 45.8% and 46.3% for the three and nine months ended September 30, 2017, respectively.
Salaries and benefits
Salaries and benefits expense increased $4.8 million or 11% and $20.1 million or 16% for the three and nine months ended September 30, 2018, respectively, as compared to the same periods in 2017.the 2018.
Salaries and benefits
Salaries and benefits expense increased $3.6 million or 7% and $7.4 million or 8% for the three and six months ended June 30, 2019, respectively, as compared to the same periods in 2018. The increases in salaries and benefits were primarily due to the expansion of our operations in the U.S. and foreign markets. As a percentage of revenues, salaries and benefits were 18.2%essentially flat at 19.0% and 18.9%19.5% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to 18.8% and 19.3% for the same periods in 20172018.

Selling, general, and administrative
Selling, general and administrative expenses for the three and ninesix months ended SeptemberJune 30, 20182019 were $32.5$31.7 million and $93.6$60.8 million, respectively, an increase of $3.8$0.3 million or 13%,1% for the second quarter of 2019, and $15.7 million or 20%were essentially consistent for the first half of 2019 as compared to the same periods in 2017.of 2018. The increases wereincrease for the second quarter of 2019 was primarily due to expenses incurred to support the growth of our money transfer services in both the U.S. and foreign markets.markets largely offset by the impact of the U.S. dollar strengthening against key foreign currencies.

As a percentage of revenues, selling, general and administrative expenses were 12.1%11.5% and 12.2%11.4% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to 12.6%12.0% and 12.0%12.2% for the same periods in 2017. For the third quarter of 2018, this was2018. The decreases were primarily due to increasesthe increase in the number of money transfers processed, which did not require similar increases in support costs. For the first nine months of 2018, the increase in selling, general and administrative expenses as a percentage of revenues was primarily attributable to the increased support costs to expand the business.
Depreciation and amortization
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 $0.5$0.2 million or 6%3% and $1.8$0.4 million or 8%,3% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to the same periods in 2017,2018, largely due to the increased capital additions as a result of business growth.
As a percentage of revenues, depreciation and amortization expense was 2.9% for the thirdsecond quarter of 2019 and 3.1% for the first nine monthshalf of 2018 as2019, which was essentially unchanged compared to 3.2%3.0% and 3.4%3.2% for the same periods of 2017. The decreases were primarily due to certain intangible assets becoming fully amortized.2018.
Operating income
Money Transfer Segment operating income for the three and ninesix months ended SeptemberJune 30, 20182019 was $34.3$35.3 million and $93.3$66.1 million, respectively, an increase of $9.9$2.7 million or 41%8% and $18.0$7.1 million or 24%12% as compared to the same periods of 2017.2018. Operating income for the three and ninesix months ended SeptemberJune 30, 20182019 increased primarily due to the growth in the number of money transfers processed partly offset by the additional salaries and benefits and other costs incurred.
As a percentage of revenues, operating margin was 12.8% and 12.1%12.4% for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, as compared to 10.7%12.5% and 11.6%11.8% for the same periods in 2017.2018. Operating income per transaction increased to $1.23$1.22 and $1.18$1.19 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, from $1.02$1.21 and $1.12$1.15 for the same periods in 2017.2018. The increases in operating margin and operating income per transaction were 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 three and ninesix months ended SeptemberJune 30, 20182019 and 20172018 for Corporate Services:



 Three Months Ended
September 30,
 Year-over-Year Change Nine Months Ended
September 30,
 Year-over-Year Change Three Months Ended
June 30,
 Year-over-Year Change Six Months Ended
June 30,
 Year-over-Year Change
(dollar amounts in thousands) 2018 2017 Increase (Decrease) Amount Increase (Decrease) Percent 2018 2017 Increase (Decrease) Amount Increase (Decrease) Percent 2019 2018 Increase (Decrease) Amount Increase (Decrease) Percent 2019 2018 Increase (Decrease) Amount Increase (Decrease) Percent
Salaries and benefits $8,019
 $7,252
 $767
 11 % $24,178
 $21,613
 $2,565
 12 % $9,500
 $9,232
 $268
 3 % $16,955
 $16,159
 $796
 5 %
Selling, general and administrative 2,112
 2,614
 (502) (19)% 6,809
 10,219
 (3,410) (33)% 1,946
 2,229
 (283) (13)% 3,863
 4,697
 (834) (18)%
Depreciation and amortization 32
 36
 (4) (11)% 94
 96
 (2) (2)% 74
 33
 41
 124 % 149
 62
 87
 140 %
Total operating expenses $10,163
 $9,902
 $261
 3 % $31,081
 $31,928
 $(847) (3)% $11,520
 $11,494
 $26
  % $20,967
 $20,918
 $49
  %
Corporate operating expenses
Overall, operating expenses for Corporate Services were $10.2$11.5 million and $31.1$21.0 million for the three and ninesix months ended SeptemberJune 30, 2018, respectively, an increase of 3% and a decrease of 3% as2019, which were consistent when compared to the same periods in 2017.2018. The operating expenses for the three months ended September 30, 2018 increasedincreases were primarily dueattributable to an increase in bonus expenses resulting fromexpense due to our improved operating results partly offset by a decrease in professional services fees. The operating expenses for the first nine months of 2018 decreased primarily duecompared to a decrease in professional services fees and other costs incurred in connection with the proposed acquisition of MoneyGram International Inc. that occurred in the prior year but not in the current period.targets.

OTHER INCOME (EXPENSE), NET
 Three Months Ended
September 30,
 Year-over-Year Change Nine Months Ended
September 30,
 Year-over-Year Change Three Months Ended
June 30,
 Year-over-Year Change Six Months Ended
June 30,
 Year-over-Year Change
(dollar amounts in thousands) 2018 2017 Increase (Decrease) Amount  Increase (Decrease) Percent 2018 2017 Increase (Decrease) Amount  Increase (Decrease) Percent 2019 2018 Increase (Decrease) Amount  Increase (Decrease) Percent 2019 2018 Increase (Decrease) Amount  Increase (Decrease) Percent
Interest income $288
 $380
 $(92) (24)% 1,000
 2,009
 (1,009) (50)% $513
 $416
 $97
 23 % 856
 712
 144
 20%
Interest expense (11,269) (9,534) (1,735) 18 % (28,936) (25,058) (3,878) 15 % (10,029) (10,061) 32
  % (18,228) (17,667) (561) 3%
Loss on early extinguishment of debt
 (8,903) 
 (8,903) n/m
 (9,831) 
 (9,831) n/m
Foreign currency exchange (loss) gain, net (121) (20,690) 20,569
 n/m
 3,087
 (18,755) 21,842
 n/m
Loss from unconsolidated affiliates 
 
 
 n/m
 (117) 
 (117) n/m
 
 
 
 n/m
 
 (117) 117
 n/m
Foreign currency exchange (loss) gain, net (2,704) 8,179
 (10,883) n/m
 (21,459) 21,035
 (42,494) n/m
Other (loss) gains (34) 
 (34) n/m
 26
 35
 (9) n/m
 (29) 29
 (58) n/m
 (4) 60
 (64) n/m
Other expense, net $(13,719) $(975) $(12,744) n/m
 $(49,486) $(1,979) $(47,507) n/m
 $(18,569) $(30,306) $11,737
 n/m
 $(24,120) $(35,767) $11,647
 n/m
________________
n/m — Not meaningful
Interest income
The decreaseincrease in interest income for the three and six months ended June 30, 2019 when compared to the same periods in 2018 was due to the interest earned from the immediate proceeds we received from the issuance of Convertible Notes and the Senior Notes before they were fully utilized in the business.
Interest expense
The increase in interest expense for the first nine monthshalf of September 30, 20182019 compared to the same period in 20172018 was primarily duerelated to the interest earnedgreater weighted average borrowings outstanding offset by lower weighted average borrowing rates.
Loss on a tax refund received in India in the first quarterearly extinguishment of 2017 which did not occur in the current period.
Interest expensedebt
The increasesincrease in interest expenseloss on early extinguishment of debt for the three and ninesix months ended SeptemberJune 30, 20182019 when compared to the same periods in 2017 were primarily related to additional borrowings throughout the third quarter of 2018 to fund the operating cash for our Independent ATM Deployed (“IAD”) networks and higher interest rates as comparedwas due to the same periodsretirement of the Retired Convertible Notes that would have matured in 2017.

2044 on May 28, 2019.
Foreign currency exchange (loss) 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 the change in USD value of our euro-denominated Senior Notes beginning second quarter of 2019 and 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 a net foreign currency exchange lossesloss of $2.7 million and $21.5$0.1 million for the threesecond quarter of 2019 and nine months ended September 30, 2018, respectively,a net gain of $3.1 million for the first half of 2019, as compared to net foreign currency exchange gainslosses of $8.2$20.7 million and $21.0$18.8 million for the same periods in 2017.2018. 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 25.5%31.5% and 27.4%31.6% for both the three and ninesix months ended SeptemberJune 30, 20182019, respectively, as compared to 13.4%27.3% and 19.3%30.1% for the same periods in 2017.three and six months ended June 30, 2018, respectively. The Company's effective income tax rate for the three and ninesix months ended SeptemberJune 30, 2017 was less than the applicable statutory income tax rate of 35% primarily due to the release of a $16.3 million valuation allowance against certain foreign deferred tax assets2019 and to a lesser extent, the Company's U.S. tax position. In 2017, the significant year-over-year and year-to-date profitability of ATMs under management in Europe allowed the release of the valuation allowance as the Company believes that certain foreign deferred assets, including net operating loss carryforwards, will more likely than not be realized in future periods. In addition, the Company had significant U.S. federal tax net operating loss carryforwards with no recent history of significant U.S. taxable income; therefore, the Company had recorded a valuation allowance against its net U.S. deferred tax assets. Accordingly, in instances when the Company generated pre-tax U.S. GAAP income, no income tax expense was recognized to the extent there were net operating loss carryforwards to offset the income. The Company's effective income tax rate for the three and nine months ended September 30, 2018 was higher than the applicable statutory income tax rate of 21% as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (the "Act") and its impact on the Company's U.S. income tax positions at the end of 2017. The most significant provisions of the Act are the transition tax on previously undistributedcertain foreign earnings of foreign subsidiaries, the reduction in the U.S. corporateCompany being subject to higher local statutory income tax rate from 35% to 21% beginning on January 1, 2018,rates and new taxes on certain foreign sourced earnings. As stated above, the Company had recorded a valuation allowance against its net U.S. deferred tax assets. After enactmentapplication of the Act,U.S. global intangible low-taxed income ("GILTI") tax provision to the Company expectedCompany. The GILTI provision subjects the Company's current foreign earnings to utilize its U.S. federal net operating losses to partially offset the transition tax and released the associated valuation allowance in the prior year. This change has createdtaxation which creates additional U.S. tax expense as the Company will now recognize income tax expense on its pre-tax U.S. GAAP income. In addition, the Act's GILTI provision has created additional U.S. tax expense on foreign earnings.expense. The increase in the effective tax rate for the first nine monthshalf of 20182019 compared to the same period in 20172018 is largely due to (i) the 2017 release of valuation allowanceunrecognized tax benefits in the first half of 2018 from the settlement or expiration of tax audit examinations and to a certain extent,(ii) the Act's impact on the Company's U.S. incomemix of foreign earnings in higher tax positions. See Note 10 to the financial statements included in Part I, Item 1 of this report for additional information related to income taxes.rate jurisdictions.
NET INCOMELOSS 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 $102.768.2 million and $172.9$102.7 million for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively, an increase of $2.4$24.4 million and a decrease of $6.9$32.6 million as compared to the same periods in 2017.2018. The decreaseincrease in net income for the first nine monthshalf of 20182019 was primarily due to an increase in operating income of $38.2 million, a $42.5$21.8 million increase in net foreign currency exchange loss,gain, partly offset by a $21.9$17.2 million increase in income tax expense, a decreasean increase in interest incomeloss on early extinguishment on debt of $1.0$9.8 million, and an increase in interest expense of $3.9 million, partly offset by an increase in operating income of $61.9 million and a $0.6 million increase in losses attributable to noncontrolling interests.million.
LIQUIDITY AND CAPITAL RESOURCES
Working capital
As of SeptemberJune 30, 20182019 and December 31, 2017,2018, we had working capital, which is calculated as the difference between total current assets and total current liabilities, of $702.8$1,220 million and $482.5$709 million, respectively. Our ratio of current assets to current liabilities at SeptemberJune 30, 20182019 and December 31, 20172018 was 1.461.82 and 1.34,1.51, respectively. The increase in working capital was primarily due to the addition of current portion of operating lease liabilities and ATM cash funded by the long-term debt.
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, and 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. As of SeptemberJune 30, 2018,2019, we had approximately $640$809 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 $1,129.3$1,558 million at SeptemberJune 30, 2018,2019, of which $941.5$1,294 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 ninesix month periods ended SeptemberJune 30, 20182019 and 20172018 (in thousands):
Nine Months Ended
September 30,
Six Months Ended
June 30,
Liquidity2018 20172019 2018
Cash and cash equivalents and restricted cash provided by (used in):      
Operating activities$192,573
 $257,684
$56,714
 $69,304
Investing activities(99,369) (74,023)(68,760) (68,990)
Financing activities247,087
 126,615
505,945
 360,922
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash(38,084) 53,494
4,907
 (25,471)
Increase in cash and cash equivalents and restricted cash$302,207
 $363,770
$498,806
 $335,765


Operating activity cash flow
Cash flows provided by operating activities were $192.6$56.7 million for the first nine monthshalf of 20182019 compared to $257.7$69.3 million for the first nine monthshalf of 2017.2018. 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 $99.4$68.8 million for the first nine monthshalf of 20182019 compared to $74.0$69.0 million for the first nine monthshalf of 2017. The increase is primarily due to acquisitions and increased capital expenditures mainly related to our ATM network expansion.2018. During the first nine monthshalf of 2018, we used $12.9 million for a business acquisitions. Duringacquisition. There was no material acquisition in the first nine monthshalf of 2018, we2019. We used $82.1$67.7 million for purchases of property and equipment for the first half of 2019 compared to $70.9$53.4 million duringfor the

first nine monthshalf of 2017.2018. Cash used for software development and other investing activities totaled $4.4$1.0 million and $3.2$2.8 million for the first nine monthshalf of 20182019 and 2017,2018, respectively.
Financing activity cash flow
Cash flows provided by financing activities were $247.1$505.9 million for the first nine monthshalf of 20182019 compared to $126.6$360.9 million for the first nine monthshalf of 2017.2018. Our financing activities for the first nine monthshalf of 20182019 consisted of net borrowings of $417.2$524.1 million compared to net borrowings of $123.8$536.7 million for the first nine monthshalf of 2017.2018. The increase in net borrowings for the first nine monthshalf of 20182019 compared to the same period of 20172018 was the result of additional borrowings under the credit facilitiesissuance of $1,195 million of new Convertible Notes and Senior Notes to fund the operating cash of our IAD networks. Additionally, we used $4.7networks, repay revolving credit facility borrowings of $2,253 million and $3.5 million duringretire the first nine monthsRetired Convertible Notes of $447 million. During the second quarter of 2018, and 2017, respectively,we entered into a short-term credit facility in the amount of $300 million for capital lease repayments.the sole purpose of providing providing cash for our ATM network which expired on November 30, 2018. During the second quarter of 2019, we repaid $14 million of short-term debt obligations. We repurchased $177.2$2.4 million and $2.3$176.7 million of our stock during the first nine monthshalf of 20182019 and 2017,2018, respectively. During the first nine monthshalf of 2018, we repurchased $175.0 million of our shares and paid $2.2$1.7 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$2.4 million for the same period of 2017.2019. We received proceeds from stock option exercises of $11.8$7.0 million and $8.3$4.1 million for the first nine monthshalf of 2019 and 2018, and 2017, respectively.
Other sources of capital
Credit Facility - As of September 30, 2018, we had a $675 million senior secured credit facility that matures on April 9, 2019 (the "Credit Facility") consisting of a $590 million revolving credit facility, a $10 million India revolving credit facility and a $75 million term loan which was retired early during the third quarter of 2018. On October 17, 2018, the Credit Facility was subsequently replaced withCompany entered into a new $1.0 billion unsecured revolving credit agreement (the "Credit Facility") that expires on October 17, 2023.
We use the revolving credit facility primarily to fund working capital requirements which are expected to increase as we expand the Money Transfer business 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 our independent ATM network. Based on our current projected working capital requirements, we anticipate that our revolving credit facility will be sufficient to fund our short-term working capital needs.US Dollars.
As of SeptemberJune 30, 2018,2019, fees and interest on borrowings variedare based upon the Company's consolidated total leverage ratiocorporate 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 LIBORthe London InterBank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.375%1.125% to 2.375% for LIBOR loans and 0.375%2.0% (or 0.175% to 1.375%1.0% for base rate loans.loans).
As of SeptemberJune 30, 2018,2019, we had $266.7$6.1 million of borrowings and $47.9$46.3 million of stand-by letters of credit outstanding under the revolving credit facility.Credit Facility. The remaining $285.4$947.6 million under the revolving credit facilityCredit Facility was available for borrowing based upon the borrowing base and financial covenants in our Credit Facility. As

Convertible debt - On March 18, 2019, we completed the sale of September 30, 2018, the weighted average interest rate under the revolving credit facility was 3.58%, excluding amortization of deferred financing costs.
Convertible debt - We have $402.5$525.0 million in principal amount of Convertible Senior Notes due 20442049 (“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 1.5%0.75% per annum payable semi-annually in AprilMarch and October,September, and are convertible into shares of Euronet Common Stock at a conversion price of approximately $72.18$188.73 per share if certain conditions are met (relating to the closing prices of Euronet Common Stock exceeding certain thresholds for specified periods).
AlthoughThe Company may not redeem the Convertible Notes will be convertible during the fourth quarter of 2018, we believe holders are unlikelyprior to exercise their conversion rights, primarily due to the fair valueSeptember 20, 2022. The Company may redeem for cash all or any portion of the Convertible Notes, exceeding theirat 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 value. Asprice 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 September 30, 2018,such period) ending on, and including, the fair valuetrading 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 was $562.6 millionto be redeemed, plus accrued and their conversion value was $558.8 million. However, should any holders exercise their conversion rights, we believe our capital resources are sufficientunpaid interest to, satisfy any conversion.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 have the optionat a repurchase price equal to require us to purchase their notes at par on October 1, 2020, and have additional options to require us to purchase their notes at par on October 1, 2024, 2029, 2034, and 2039, or upon a change in control100% of the Company. In connection with the issuanceprincipal amount of the Convertible Notes we recorded $10.7 million in debt issuance costs, which are being amortized through October 1, 2020.to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
ATM Facility1.375% Senior Notes due 2026 - On May 11, 2018, we entered into a short-term credit facility for22, 2019, the sole purposeCompany completed the sale of providing cash for our ATM network in the€600 million ($669.9 million) aggregate principal amount of $300 million, which as of September 30, 2018, we had outstanding borrowings of $200.0 million. Interest is chargedthe Senior Notes that expire on this financing on an annual basis at the Overnight LIBOR rate plus 1.75%May 2026 (the “Senior Notes”). The facility expiresSenior 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 June 30, 2019, the Company has outstanding €600 million ($682.1 million) euro-denominated principal amount of the Senior Notes. In addition, the Company may redeem some or all of these notes on November 30, 2018. We repaid $100.0 million of this credit facility during the third quarter of 2018. The weighted average interest rate for borrowings under the ATM credit facility was 3.7% for the third quarter of 2018.or after February 22, 2026 at their principal amount plus any accrued and unpaid interest.
Other debt obligations - Certain of our subsidiaries also have available credit lines and overdraft facilities to generally supplement short-term working capital requirements. As of SeptemberJune 30, 2018,2019, there was $33.7$24.3 million outstanding under these other obligation arrangements. Short-term debt obligations, as of September 30, 2018 were primarily comprised of $200.0 million in principal outstanding under the ATM facility and $33.1 million of other obligation arrangements payments due in the next twelve months.

Other uses of capital
Capital expenditures and needs - Total capital expenditures, including capital lease expenditures, for the first nine monthshalf of 20182019 were $86.9$72.8 million. These capital expenditures were made primarily for the purchase of ATMs to expand our independent ATM network in Europe and Asia, 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 20182019 are currently estimated to range from approximately $120$140 million to $130$150 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 revolving credit facilityCredit 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. As of SeptemberJune 30, 20182019, there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 20172018. 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 SeptemberJune 30, 20182019. See also Note 11,12, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.
CONTRACTUAL OBLIGATIONS
As of SeptemberJune 30, 2018,2019, 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, 2017,2018, other than those resulting from changes in the amount of debt outstanding debt discussed in the Liquidity and Capital Resources section.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate risk
As of SeptemberJune 30, 2018,2019, our total debt outstanding was $878.3$1,142 million. Of this amount, $377.9$1,112 million, net of debt discounts, or 43%97% of our total debt obligations, relates to our Convertible Notes and Senior Notes that each have a fixed coupon rate. Our $402.5The $525 million aggregate principal amount of the Convertible Notes issued in October 2014,on March 18, 2019, accrue cash interest at a rate of 1.5%0.75% of the principal amount per annum. Based on quoted market prices, as of September 30, 2018, theThe fair value of ourthe fixed rate Convertible Notes was $562.6$519.2 million as of June 30, 2019 based on quoted market prices, compared to a carrying value of $377.9$429.6 million. Interest expense for these notes,the Convertible Notes, including accretion and amortization of deferred debt issuance costs, has a weighted average interest rate of 4.7% annually. Additionally, $466.74.4%. The €600 million aggregate principal amount of the Senior Notes, accrue cash interest at a rate of 1.375% of the principal amount per annum. Based on quoted market prices, as of June 30, 2019, the fair value of our fixed rate Senior Notes was $678.0 million, compared to a carrying value of $682.1 million. The Credit Facility borrowings were $6.1 million, or 53%1% of our total debt obligations, relates to debt borrowings under our Credit Facility and ATM facility.obligations. If we were to maximize the potential borrowings available under the new revolving credit facility we entered into on October 17, 2018Credit 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 $33.7$24.3 million, or 4%2%, of our total debt obligations as of June 30, 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.
Additionally, as of September 30, 2018, we had approximately $14.1 million of capitalized leases with fixed payment and interest terms that expire between 2018 and 2022.
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
For the first nine monthshalf of 2018,2019, approximately 72% 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. As of SeptemberJune 30, 20182019, 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 $150$90 million to $155$95 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 $100$140 million to $105$145 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, a significant portion of 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. As of SeptemberJune 30, 2018,2019, we had foreign currency derivative contracts outstanding with a notional value of $328$278 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 HiFXxe 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. As of SeptemberJune 30, 2018,2019, we held foreign currency derivative contracts outstanding with a notional value of $1.2$1.4 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. As of SeptemberJune 30, 2018,2019, the Company had foreign currency forward contracts outstanding with a notional value of $275$86 million, primarily in euros and Polish zloty.euros.
See Note 7,8, 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 SeptemberJune 30, 20182019. 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 SeptemberJune 30, 20182019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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 12,13, 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, thereThere were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017,2018 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as filed with the SEC.

Tightening of regulations may adversely affect our results.

The evolving regulatory environment may change the competitive landscape across various jurisdictions and adversely affect our financial results. If governments implement new laws or regulations, or organizations such as Visa and MasterCard issue new rules, that effectively limit our ability to provide DCC or set fees and/or foreign currency exchange spreads, then our business, financial condition and results of operations could be materially and adversely affected. In addition, changes in regulatory interpretations or practices could increase the risk of regulatory enforcement actions, fines and penalties and such changes may be replicated across multiple jurisdictions.

In March, 2018, the E.U. began a legislative process for amending certain existing legislation applying to cross border payment practices, which includes a proposal for new regulations on DCC transactions. As part of that process, in March 2018, the E.U. Commission proposed certain regulations regarding DCC and in June 2018, the E.U. Council adopted its own version of the proposed regulations. The E.U. Parliament began consideration of the proposal by the E.U. Commission in June 2018 and will vote on certain draft regulations on November 5, 2018. Following that vote, the versions of the regulations adopted by the E.U. Commission, the E.U. Council and the E.U. Parliament will be reconciled in a “trilogue” process that may be completed by the end of 2018 or in the first quarter of 2019. The reconciled regulations could enter into force shortly after that. The time frame imposed for actual implementation of the final regulations by industry players is currently uncertain, and will depend on the complexity of any new requirements, but the implementation period is expected to be from one to three years.

Although the regulations proposed by the E.U. Commission include a cap on DCC fees, the regulations proposed by the E.U. Council and those currently under consideration by the Parliament do not include a cap. All three versions include requirements for reinforced consumer disclosure (“transparency”) and consumer choice in DCC transactions.

Any regulation of DCC that may be adopted, including a cap on fees and reinforced transparency or consumer choice in DCC transactions, could materially and adversely impact our financial results, by reducing the number of DCC transactions performed over our networks and the level of profit we generate from such transactions.

The E.U. has passed a new regulation called the GDPR that establishes stringent requirements for the collection, handling and processing of personal information of individuals within the E.U. The GDPR creates certain rights of individuals regarding their own personal information processed by companies as well as requirements for information security, and imposes significant fines that may be revenue-based for violation of its requirements. The GDPR came into effect across the E.U. on May 25, 2018. The GDPR applies outside of Europe to certain personal information of E.U. persons that is held or processed by foreign based companies, including U.S. companies. Any failure on our part to comply with the requirements of the GDPR could result in the imposition of fines and penalties that could materially and adversely affect our financial results.




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 June 30, 2019.

Period 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)
April 1 - April 30, 2019 
 $
 
 $320,000
May 1 - May 31, 2019 
 
 
 $320,000
June 1 - June 30, 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 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 Description
   
10.1*4.1 
12.1*4.2 
4.3
31.1* 
31.2* 
32.1** 
32.2** 
101* The following materials from Euronet Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended SeptemberJune 30, 2018,2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at SeptemberJune 30, 20182019 (unaudited) and December 31, 2017,2018, (ii) Consolidated Statements of Income (unaudited) for the three months and ninesix months ended SeptemberJune 30, 20182019 and 2017,2018, (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and ninesix months ended SeptemberJune 30, 2019 and 2018, (iv) Consolidated Statements of Changes in Equity (unaudited) for the three and 2017, (iv)six months ended June 30, 2019 and 2018 (v) Consolidated Statements of Cash Flows (unaudited) for the ninesix months ended SeptemberJune 30, 2019 and 2018, and 2017, and (v)(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 confidential 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.
November 1, 2018August 8, 2019
Euronet Worldwide, Inc.
By:  /s/ MICHAEL J. BROWN   
 Michael J. Brown  
 Chief Executive Officer  
   
   
By:  /s/ RICK L. WELLER   
 Rick L. Weller  
 Chief Financial Officer  




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