EURONET WORLDWIDE, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-K)

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and accompanying notes included elsewhere in
this Annual Report on Form 10-K. This section of this Form 10-K generally
discusses 2021 and 2020 items and year-to-year comparisons between 2021 and
2020. Discussions of 2019 items and year-to-year comparisons between 2020 and
2019 that are not included in this Form 10-K can be found in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020.


Company overview, geographical locations and main 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 ATM, POS, card outsourcing, card issuing and
merchant acquiring services, software solutions, electronic distribution of
prepaid mobile airtime and other electronic payment products, foreign currency
exchange services and global money transfer services. We operate in the
following three segments:


1) The EFT Processing Segment, which processes transactions for a network of
42,713 ATMs and approximately 438,000 POS terminals across Europe, the Middle
East, Africa, 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, debit and prepaid card outsourcing, 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.

2) The epay Segment, which provides distribution, processing and collection
services for prepaid mobile airtime and other electronic content. We operate a
network of approximately 775,000 POS terminals providing electronic processing
of prepaid mobile airtime top-up services and other electronic content in
Europe, the Middle East, Asia Pacific, the United States and South America. We
also provide vouchers and physical gift fulfillment services in Europe.

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3) The Money Transfer Segment, which provides global consumer-to-consumer money
transfer services, primarily under the brand names Ria, IME, AFEX, and xe and
global account-to-account money transfer services under the brand name xe. 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 our websites (riamoneytransfer.com and online.imeremit.com), disbursing
money transfers through a worldwide correspondent network that includes
approximately 510,000 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). 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 xe brand, we
offer cash management solutions and foreign currency risk management services to
small-to-medium-sized businesses.

We have six processing centers in Europe, five in Asia Pacific and two in North
America. We have 36 principal offices in Europe, 14 in Asia Pacific, 10 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 73% 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 (for a further discussion, see
Item 1A - Risk Factors and Item 7A - Quantitative and Qualitative Disclosures
About Market Risk).

Sources of income and cash flow

Euronet derives income and income primarily from ATM management fees, transaction fees, commissions and foreign exchange margin. The sources of revenue for each operating segment are described below.


EFT Processing Segment - Revenues in the EFT Processing Segment, which
represented approximately 20% of total consolidated revenues for the year ended
December 31, 2021, are 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
cardless payment, banknote recycling, tax refund services, 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 34% of total consolidated revenues for the year ended December 31,
2021, are primarily 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
content, vouchers, and physical gifts. The proportion of epay Segment revenues
earned from the distribution of prepaid mobile phone time as compared with other
electronic products has decreased over time, and digital media content now
produces approximately 70% of epay Segment revenues. Other electronic content
offered by this segment includes 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 46% of total consolidated revenues for the year ended
December 31, 2021, 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, and xe 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.

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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 2026. 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

The global product markets in which we operate are large and fragmented, which
poses both opportunities and challenges for our technology to disrupt new and
existing competition. As an organization, our focus is on increasing our market
presence through both physical (ATMs, POS terminals, company stores and agent
correspondents) and digital assets and providing new and improved products and
services for customers through all of our channels, which may in turn drive an
increase in the number of transactions on our networks. Each of these
opportunities also presents us with challenges, including differentiating our
portfolio of products and services in highly competitive markets, the successful
development and implementation of our software products and access to financing
for expansion.

1) The EFT Processing Segment opportunities include physical expansion into
target markets, developing value added products or services, increasing high
value DCC and surcharge transactions and efficiently leveraging our portfolio of
software solutions. Our opportunities are dependent on renewing and expanding
our card acceptance, ATM and POS management and outsourcing, cash supply and
other commercial agreements with customers and financial institutions.
Operational challenges in the EFT Processing Segment include obtaining and
maintaining the required licenses and sponsorship agreements in markets in which
we operate and navigating frequently changing rules imposed by international
card organizations, such as Visa® and Mastercard®, that govern ATM interchange
fees, direct access fees and other restrictions. Our profitability is dependent
on the laws and regulations that govern DCC transactions, specifically in the
E.U., as well as the laws and regulations of each country that we operate in
that may impact the volume of cross-border and cross-currency transactions. The
timing and amount of revenues in the EFT Processing Segment is uncertain and
unpredictable due to inherent limitations in managing our estate of ATMs, which
is dependent on contracts that cover large numbers of ATMs, which are
complicated by legal and regulatory considerations of local countries, as well
as our customers' decisions whether to outsource ATMs.

2) The epay Segment opportunities include renewing existing and negotiating new
agreements in target markets in which we operate, primarily with mobile
operators, digital content providers, financial institutions and retailers. The
overall growth rate in the prepaid mobile phone and digital media content
markets, shifts between prepaid and postpaid services, and our market share in
those respective markets will have a significant impact on our ability to
maintain and grow the epay Segment revenues. There is significant competition in
these markets that may impact our ability to grow organically and increase the
margin we earn and the margin that we pay to retailers. The profitability of the
epay Segment is dependent on our ability to adapt to new technologies that may
compete with POS distribution of digital content and prepaid mobile airtime, as
well as our ability to leverage cross-selling opportunities with our EFT and
Money Transfer Segments. The epay Segment opportunities may be impacted by
government-imposed restrictions on retailers and/or content providers with whom
we partner in countries in which we have a presence, and corresponding licensure
requirements mandated upon such parties to legally operate in such countries.
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3)The Money Transfer Segment opportunities include expanding our portfolio of
products and services to new and existing customers around the globe, which in
turn may lead to an increase in transaction volumes. The opportunities to expand
are contingent on our ability to effectively leverage our network of bank
accounts for digital money transfer delivery, maintaining our physical agent
network, cross selling opportunities with our EFT and epay segments and our
penetration into high growth money transfer corridors. The challenges inherit in
these opportunities include maintaining compliance with all regulatory
requirements, maintaining all required licenses, ensuring the recoverability of
funds advanced to agents and the continued reliance on the technologies required
to operate our business. The volume of transactions processed on our network is
impacted by shifts in our customer base, which can change rapidly with worker
migration patterns and changes in unbanked populations across the globe. Foreign
regulations that impact cross-border migration patterns and the money transfer
markets can significantly impact our ability to grow the number of transactions
on our network.

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.

COVID-19[female[feminine

The outbreak of the COVID-19 (coronavirus) pandemic has resulted in varying
degrees of border and business closures, travel restrictions and other social
distancing orders in most of the countries where we operate during the years
ended December 31, 2021 and 2020. These types of orders were first put into
effect in the first half of 2020. As the number and rate of new cases has
fluctuated in various locations around the global, the closures, restrictions
and other social distancing orders have been modified, rescinded and/or
re-imposed. Although vaccines for COVID-19 are widely available in the U.S. and
the European Union, their availability is still limited in many parts of the
world where we operate. In addition, the rate of acceptance and long term
effectiveness of the vaccines, especially against new variants, are still
unknown. The EFT Segment has experienced declines in certain transaction volumes
due to these restrictions, especially high-margin cross-border transactions. The
epay Segment has experienced the impacts of consumer movement restrictions in
certain markets, while other markets have been positively impacted where we have
a higher mix of digital distribution or a higher concentration of retailers that
are deemed essential and have remained open during the pandemic. The Money
Transfer Segment continues to be impacted by the pandemic-related restrictions
in certain markets that limit customers' ability to access our network of
company-owned stores and agents.

In response to the impacts of the COVID-19 pandemic, we have implemented several key measures to offset the impact across the business, including renegotiating certain third-party contracts, reducing travel and decrease in capital expenditure.

Segment Revenues and Operating Income For The Years Ended December 31, 2021 and
2020


                                                       Revenues                 Operating Income (Expense)
(in thousands)                                   2021            2020              2021              2020
EFT Processing                               $   591,138     $  468,726      $        (501 )     $  (66,711 )
epay                                           1,011,482         835,517           123,037           96,678
Money Transfer                                 1,400,957       1,183,849           119,595           59,709
Total                                          3,003,577       2,488,092           242,131           89,676

Corporate Services, Eliminations and Other (8,134 ) (5,392 )

       (58,115 )        (43,054 )
Total                                        $ 2,995,443     $ 2,482,700     $     184,016       $   46,622




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Summary



Our annual consolidated revenues increased by 21% for 2021 compared to 2020. The
increase in revenues for 2021 was primarily due to the easing of COVID-19
related travel restrictions in 2021 compared to 2020, which led to an increase
in demand for DCC, domestic and international surcharge and other value added
services in our EFT Processing Segment as well as growth in the number of money
transfers processed by the core Ria business and the number of transactions
processed by our epay subsidiaries.


Our annual consolidated operating income increased by 295% for 2021 compared to
2020. The increase in operating income for 2021 was primarily due to the
increases in transaction volume across all three segments and corresponding
increase in revenues, a $106.6 million decrease in non-cash impairment of
goodwill and acquired intangible assets, partially offset by a $38.6 million
increase in non-cash impairment of contract assets, and increases in stock-based
compensation and selling general and administrative expenses.


Net income attributable to Euronet for 2021 was $70.7 millionWhere $1.32 per diluted share to a net loss at Euronet for 2020 from $3.4 millionWhere $0.06 per diluted share.

Impact of exchange rate variations



Our revenues and local expenses are recorded in the functional currencies of our
operating entities, and then are translated into U.S. dollars for 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, our
2021 consolidated operating income was approximately 2.1% higher due to changes
in foreign currency exchange rates when compared to 2020. If significant, in our
discussion we will refer to the impact of fluctuations in foreign currency
exchange rates in our comparison of operating segment results.

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
during 2021 and 2020, of the currencies of the countries in which we have our
most significant operations:


                                                     Average Translation Rate Year Ended
                                                                December 31,                 2021 Increase
Currency                                                  2021                 2020             Percent
Australian dollar                                   $     0.7513         $     0.6904                 9 %
British pound                                       $     1.3755         $     1.2835                 7 %
Canadian dollar                                     $     0.7979         $     0.7464                 7 %
euro                                                $     1.1830         $     1.1412                 4 %
Hungarian forint                                    $     0.0033         $     0.0033                 0 %
Indian rupee                                        $     0.0135         $     0.0135                 0 %
Malaysian ringgit                                   $     0.2415         $     0.2383                 1 %
New Zealand dollar                                  $     0.7073         $     0.6504                 9 %
Polish zloty                                        $     0.2595         $     0.2571                 1 %



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Comparison of operating results for the years ended December 31, 2021 and 2020 – By operating segment



EFT Processing Segment



The following table summarizes the operating results of our EFT processing segment for the years ended December 31, 2021 and 2020:

                                              Year Ended December 31,            Year-over-Year Change
                                                                                                  Increase
                                                                               Increase          (Decrease)
(dollar amounts in thousands)                   2021            2020       (Decrease) Amount      Percent
Total revenues                             $    591,138      $ 468,726     $    122,412              26  %
Operating expenses:
Direct operating costs                          354,254        302,637           51,617              17  %
Salaries and benefits                            98,584         91,526            7,058               8  %
Selling, general and administrative              47,832         35,388           12,444              35  %
Goodwill impairment                                   -         21,861          (21,861 )           n/m
Depreciation and amortization                    90,969         84,025            6,944               8  %
Total operating expenses                        591,639        535,437           56,202              10  %
Operating loss                             $       (501 )    $ (66,711 )   $     66,210             (99 )%
Transactions processed (millions)                 4,366          3,275            1,091              33  %
Active ATMs as of December 31                    42,713         37,729            4,984              13  %
Average active ATMs                              41,461         42,126             (665 )            (2 )%


_________________

n/m: not meaningful


Revenues

EFT Processing Segment total revenues were $591.1 million for the year
ended December 31, 2021, an increase of $122.4 million or 26% compared to the
same period in 2020. Beginning in the late first quarter of 2020, the COVID-19
related government-imposed border and business closures, travel restrictions and
other orders significantly reduced tourism throughout Europe, which led to a
significant decrease in high-margin cross-border transactions (DCC) and
surcharge transactions from March through December of 2020. During 2021, we
began increasing our estate of active ATMs as certain countries began easing
COVID-19 restrictions; however, remaining cross-border travel patterns prevented
our volume of DCC and surcharge transactions from returning to pre-COVID-19
levels. Revenues increased for the year ended December 31, 2021 compared to the
same period in 2020 as cross-border travel and corresponding DCC and surcharge
revenues increased, partially offset by the year ended December 31, 2020
including two months of pre-COVID-19 level DCC and surcharge transaction volumes
compared to the year ended December 31, 2021 which had various levels of
restrictions throughout the entire period. Foreign currency movements increased
revenues by approximately $12.3 million for the year ended December 31, 2021,
compared to the same period in 2020.

Average monthly revenues per ATM increased to $1,188 for the year ended December
31, 2021 compared to $927 for the same period in 2020. Revenues per transaction
was $0.14 for both years ended December 31, 2021 and 2020. For the year ended
December 31, 2021, the average monthly revenues per ATM increased primarily due
to the lower average ATM count in Asia Pacific, partially offset by increases in
Europe, as we modified our estate of ATMs beginning in the second quarter of
2020 and DCC and international surcharge transactions began to recover from 2020
volumes.

Direct operating costs

EFT Processing Segment direct operating costs were $354.3 million for the
year ended December 31, 2021, an increase of $51.6 million or 17% compared to
the same period in 2020. Direct operating costs primarily consist of site rental
fees, cash delivery costs, cash supply costs, maintenance, insurance,
telecommunications, payment scheme processing fees, 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. For the year ended December 31, 2021, the increase in
direct operating costs was primarily due to the increase in transaction volumes,
and costs associated with modifying our estate of ATMs. Foreign currency
movements increased direct operating costs by approximately $7.6 million for the
year ended December 31, 2021 compared to the same period in 2020.

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Gross profit


Gross profit, which is calculated as revenues less direct operating costs, less
acquired contract cost impairments, was $236.9 million for the
year ended December 31, 2021, an increase of $70.8 million or 43% compared
to $166.1 million for the same period in 2020. Gross profit as a percentage of
revenues ("gross margin") increased to 40.1% for the year ended December 31,
2021, compared to 35.4% for the same period in 2020. For the year ended December
31, 2021, the increase in gross profit and gross margin was primarily driven by
the increase in cross-border transactions and overall increase in transaction
volumes.


Salaries and benefits


Salaries and benefits expenses were $98.6 million for the year ended December
31, 2021, an increase of $7.1 million or 8% compared to the same period in
2020. The increase in salaries and benefits for the year ended December 31, 2021
compared to the same period in 2020 was primarily driven by an increase in bonus
expense and a $2.3 million increase from foreign currency movements in the
countries where we employ our workforce. As a percentage of revenues, these
expenses decreased to 16.7% for the year ended December 31, 2021, compared to
19.5% for the same period in 2020.


Selling, general and administrative expenses

Selling, general and administrative expenses were $47.8 million for the
year ended December 31, 2021, an increase of $12.4 million or 35% compared to
the same period in 2020. The increase in these expenses is primarily driven by a
$5.3 million increase in professional fees and a $2.4 million increase from
foreign currency movements. As a percentage of revenues, these expenses
increased to 8.1% for the year ended December 31, 2021, compared to 7.5% for the
same period in 2020.

Goodwill impairment

Due to the economic impacts of the COVID-19 pandemic, the Company recorded a
$21.9 million non-cash goodwill impairment charge related to two reporting units
during the second quarter of 2020. A $14.0 million non-cash goodwill impairment
charge was recorded for Innova as a result of the decline in value added tax, or
VAT, refund activity directly related to the decline in international tourism
within the European Union, and a $7.9 million non-cash goodwill impairment
charge was recorded for Pure Commerce related to the decline in international
tourism in Asia Pacific.

Depreciation and amortization

Depreciation and amortization expenses were $91.0 million for the year
ended December 31, 2021, an increase of $6.9 million or 8% compared to the same
period in 2020. Foreign currency movements increased these expenses by $2.2
million for the year ended December 31, 2021, compared to the same period in
2020, with the remainder of the increase driven by the acquisition of
additional ATMs and software assets. As a percentage of revenues, these expenses
decreased to 15.4% for the year ended December 31, 2021, compared to 17.9% for
the same period in 2020.

Operating (loss)

EFT Processing Segment had operating losses of $0.5 million for the year
ended December 31, 2021, a decrease of $66.2 million or 99% compared to the same
period in 2020. Operating income (loss) as a percentage of revenues ("operating
margin") decreased to (0.1%) for the year ended December 31, 2021, compared to
(14.2%) for the same period in 2020. Operating (loss) per transaction was less
than ($0.01) for the year ended December 31, 2021, compared to ($0.02) for
the same period in 2020. For the year ended December 31, 2021, the decrease in
operating loss and increase in operating margin was primarily driven by the
easing of COVID-19 restrictions in limited regions where we operate and the
$21.9 million decrease in non-cash goodwill impairment charges, partially offset
by the decrease in tourism in the months of January and February 2021 compared
to the same periods in the prior period.

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epay-segment

The following table summarizes the operating results of our epay segment for the years ended December 31, 2021 and 2020:

                                              Year Ended December 31,       

Year-over-year variation

(dollar amounts in thousands)                   2021            2020        Increase Amount     Increase Percent
Total revenues                             $   1,011,482     $ 835,517     $      175,965             21  %
Operating expenses:
Direct operating costs                           760,891       630,391            130,500             21  %
Salaries and benefits                             79,451        64,769             14,682             23  %
Selling, general and administrative               39,602        35,789              3,813             11  %
Depreciation and amortization                      8,501         7,890                611              8  %
Total operating expenses                         888,445       738,839            149,606             20  %
Operating income                           $     123,037     $  96,678     $       26,359             27  %
Transactions processed (billions)                   3.12          2.40               0.72             30  %



Revenues


epay Segment total revenues were $1,011.5 million for the year ended December
31, 2021, an increase of $176.0 million or 21% compared to the same period in
2020. The increase in revenues was primarily due to an increase in the number of
transactions processed driven by continued digital media growth. Foreign
currency movements increased revenues by approximately $22.4 million for the
year ended December 31, 2021, compared to the same period in 2020. The epay
segment was impacted by COVID-19 pandemic-driven government-imposed
lockdowns and business closures, primarily at retail outlets, which were offset
by increases in digital media offerings in Asia and revenues derived from
businesses that were classified as essential and remained open during the
pandemic.


Revenues per transaction decreased to $0.32 for the year ended December 31,
2021, compared to $0.35 for the same period in 2020. The decrease in revenues
per transaction was primarily driven by the increase in the number of mobile
transactions processed in a region where we generally earn lower revenues per
transaction.


Direct operating costs


epay Segment direct operating costs were $760.9 million for the year ended
December 31, 2021, an increase of $130.5 million or 21% compared to the same
period in 2020. Direct operating costs primarily consist of the commissions paid
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 increase in direct operating
costs was primarily due to the increase in transaction volumes of low-value
mobile top-up transactions, an increase in retailer commissions and the U.S.
dollar weakening against key foreign currencies during 2021. Foreign currency
movements increased direct operating costs by approximately $16.5 million for
the year ended December 31, 2021, compared to the same period in 2020.

Gross profit


Gross profit was $250.6 million for the year ended December 31,
2021, an increase of $45.5 million or 22% compared to $205.1 million for the
same period in 2020. Gross margin increased to 24.8% for the year ended December
31, 2021, compared to 24.6% for the same period in 2020. The increase in gross
profit and gross margin is primarily driven by the increase in transaction
volumes.

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Salaries and benefits



Salaries and benefits expenses were $79.5 million for the year ended December
31, 2021, an increase of $14.7 million or 23% compared to the same period in
2020. The increase in salaries and benefits was primarily driven by an increase
in headcount to support the growth of the business and an increase in bonus
expense. Foreign currency movements in the countries where we employ our
workforce increased these expenses by $2.4 million for the year ended December
31, 2021, compared to the same period in 2020. As a percentage of revenues,
these expenses increased to 7.9% for the year ended December 31, 2021, compared
to 7.8% for the year ended December 31, 2020.


Selling, general and administrative expenses


Selling, general and administrative expenses were $39.6 million for the year
ended December 31, 2021, an increase of $3.8 million or 11% compared to the same
period in 2020. Foreign currency movements increased these expenses by
$1.2 million for the year ended December 31, 2021, compared to the same period
in 2020. As a percentage of revenues, these expenses decreased to 3.9% for the
year ended December 31, 2021, compared to 4.3% for the same period in 2020.


Depreciation and amortization


Depreciation and amortization expenses were $8.5 million for the year ended
December 31, 2021, an increase of $0.6 million or 8% compared to the same period
in 2020. Depreciation and amortization expense primarily represents depreciation
of POS terminals we install in retail stores and amortization of acquired
intangible assets. As a percentage of revenues, these expenses decreased to
0.8% for the year ended December 31, 2021, compared to 0.9% for the same period
in 2020.

Operating income


epay Segment operating income was $123.0 million for the year ended December 31,
2021, an increase of $26.4 million or 27% compared to the same period in
2020. Operating margin increased to 12.2% for the year ended December 31,
2021, compared to 11.6% for the same period in 2020. Operating income per
transaction was $0.04 for both years ended December 31, 2021 and 2020. The
increases in operating income and operating margin for the year ended December
31, 2021 compared to the same period in 2020 was primarily due to an increase in
the number of higher-margin digital media transactions.

Money transfer segment

The following table summarizes the operating results of our money transfer segment for the years ended December 31, 2021 and 2020:

                                              Year Ended December 31,            Year-over-Year Change
                                                                                                 Increase
                                                                               Increase         (Decrease)
(dollar amounts in thousands)                  2021            2020        (Decrease) Amount      Percent
Total revenues                             $ 1,400,957     $ 1,183,849     $    217,108             18 %
Operating expenses:
Direct operating costs                         793,218         649,033          144,185             22 %
Acquired contract cost impairment               38,634               -           38,634            n/a
Salaries and benefits                          255,816         213,511           42,305             20 %
Selling, general and administrative            157,955         142,161           15,794             11 %
Goodwill and acquired intangible assets
impairment                                           -          84,741          (84,741 )         (100 )%
Depreciation and amortization                   35,739          34,694            1,045              3 %
Total operating expenses                     1,281,362       1,124,140          157,222             14 %
Operating income                           $   119,595     $    59,709     $     59,886            100 %
Transactions processed (millions)                135.1           116.5             18.6             16 %



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Revenue


Money Transfer Segment total revenues were $1,401.0 million for the year ended
December 31, 2021, an increase of $217.1 million or 18% compared to the same
period in 2020. The increase in revenues was primarily due to increases in U.S.
outbound and international-originated money transfers, partially offset by
decreases in the U.S. domestic business and transactions in the Middle East
region. Revenues per transaction increased to $10.37 for the year ended December
31, 2021, compared to $10.16 for the same period in 2020. Foreign currency
movements increased revenues by approximately $30.3 million for the year ended
December 31, 2021, compared to the same period in 2020.


Direct operating costs


Money Transfer Segment direct operating costs were $793.2 million for the year
ended December 31, 2021, an increase of $144.2 million or 22% compared to the
same period in 2020. Direct operating costs primarily consist of commissions
paid to agents who originate money transfers on our behalf and correspondent
agents who disburse funds to the customers' destination beneficiaries, together
with less significant costs, such as bank depository fees. The increase in
direct operating costs was primarily due to the increase in the number of U.S.
outbound and international-originated money transfer transactions and
corresponding increase in agent commissions. Foreign currency movements
increased direct operating costs by approximately $15.3 million for the year
ended December 31, 2021, compared to the same period in 2020.


Impairment of the cost of acquired contracts


During the fourth quarter of 2021, we identified certain contract assets that
had a carrying balance greater than the estimated remaining cash flows in the
contracts and recorded a corresponding $38.6 million non-cash impairment of
costs to fulfill a contract. The impairment charge is the result of
lower-than-expected customer transaction volumes related to these specific
contracts, stemming primarily from COVID-19 related disruptions. These charges
are included in the gross profit calculation.

Gross profit


Gross profit was $569.1 million for the year ended December 31,
2021, an increase of $34.3 million or 6% compared to $534.8 million for the same
period in 2020. Gross margin decreased to 40.6% for the year ended December 31,
2021, compared to 45.2% for the same period in 2020. The increase in gross
profit was primarily attributable to the increase in transaction volume and the
decrease in gross margin is primarily attributable to the $38.6 million non-cash
contract asset impairment charge and the increased agent commissions for the
year ended December 31, 2021 compared to the same period in 2020.

Salaries and benefits


Salaries and benefits expenses were $255.8 million for the year ended December
31, 2021, an increase of $42.3 million or 20% compared to the same period in
2020. The increase in salaries and benefits was primarily driven by an increase
in headcount to support the growth of the business and an increase in bonus
expense. Foreign currency movements in the countries where we employ our
workforce increased these expenses by $6.1 million for the year ended December
31, 2021, compared to the same period in 2020. As a percentage of revenues,
these expenses increased to 18.3% for the year ended December 31, 2021, compared
to 18.0% for the same period in 2020.

Selling, general and administrative expenses


Selling, general and administrative expenses were $158.0 million for the year
ended December 31, 2021, an increase of $15.8 million or 11% compared to the
same period in 2020. The increase in these expenses is primarily driven by an
increase in marketing expenses, professional fees and travel related
expenses. Foreign currency movements increased these expenses by $3.6 million
for the year ended December 31, 2021, compared to the same period in 2020. As a
percentage of revenues, these expenses decreased to 11.3% for the year ended
December 31, 2021, compared to 12.0% for the same period in 2020.

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Good will and impairment of acquired intangible assets

Due to the economic impacts of the COVID-19 pandemic, the Company recorded an
$82.7 million non-cash goodwill impairment charge related to the xe reporting
unit during the second quarter of 2020. The non-cash goodwill impairment charge
was recorded for xe as a result of declines in the international payments
business stemming from economic uncertainty. During the second half of 2020, a
$2.0 million non-cash acquired intangible asset impairment charge was recorded
for xe on previously acquired customer relationship intangible assets due to the
discontinuation of trading with certain customers during 2020.

Depreciation and amortization

Depreciation and amortization expenses were $35.7 million for the year ended
December 31, 2021, an increase of $1.0 million or 3% compared to the same period
in 2020. Depreciation and amortization primarily represents amortization of
acquired intangible assets and depreciation of money transfer terminals,
computers and software, leasehold improvements and office equipment. As a
percentage of revenues, these expenses decreased to 2.6% for the year ended
December 31, 2021, compared to 2.9% for the same period in 2020.

Operating result

Money Transfer Segment operating income was $119.6 million for the year ended
December 31, 2021, an increase of $59.9 million or 100% compared to the same
period in 2020. Operating margin increased to 8.5% for the year ended December
31, 2021, compared to 5.0% for the same period in 2020. Operating income per
transaction increased to $0.89 for the year ended December 31, 2021, compared
to $0.51 for the same period in 2020. The increase in operating income,
operating margin and operating income per transaction for the year ended
December 31, 2021 compared to the same period in 2020 was primarily driven
by the decrease in non-cash goodwill impairment charges, and an increase in
transaction volume, specifically the higher margin transactions for U.S.
outbound and international-originated money transfers, partially offset by
the increase in agent commissions, $38.6 million non-cash contract asset
impairment and an increase in headcount to support the growth of the business.

Corporate services

The following table summarizes the results of operations of Corporate Services for the years ended December 31, 2021 and 2020:

                                               Year Ended December 31,              Year-over-Year Change
                                                                                Increase           Increase
                                                                               (Decrease)         (Decrease)
(dollar amounts in thousands)                   2021              2020           Amount             Percent
Salaries and benefits                      $     50,988       $   34,336     $       16,652          48  %
Selling, general and administrative               6,582            8,306             (1,724 )       (21 )%
Depreciation and amortization                       545              412                133          32  %
Total operating expenses                   $     58,115       $   43,054    

$15,061 35%

Business operating expenses


Total Corporate operating expenses were $58.1 million for the year ended
December 31, 2021, an increase of $15.1 million or 35%, compared to the same
period in 2020. The increase is primarily due to a $14.6 million increase in
share based compensation for the year ended December 31, 2021, compared to the
same period in 2020.

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Other expenses, net

                                               Year Ended December 31,                  Year-over-Year Change
                                                                                                           Increase
(dollar amounts in thousands)                    2021            2020         (Decrease) Amount       (Decrease) Percent
Interest income                             $        664      $   1,040     $                (376 )          (36 )%
Interest expense                                 (38,198 )      (36,604 )                  (1,594 )            4  %
Foreign currency exchange loss, net              (10,866 )       (3,756 )                  (7,110 )          189  %
Other gains, net                                      59            869                      (810 )          (93 )%
Other expense, net                          $    (48,341 )    $ (38,451 )   $              (9,890 )           26 %


Exchange loss, net


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

We recorded a net foreign currency exchange loss of $10.9 million for the
year ended December 31, 2021, compared to a net foreign currency exchange loss
of $3.8 million for the same period in 2020. These realized and unrealized
foreign currency exchange losses 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.


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income tax expense

Our effective tax rates as reported and adjusted are calculated below:

                                                                 Year Ended December 31,
(dollar amounts in thousands)                                      2021             2020
Income before income taxes                                    $    135,675      $    8,171
Income tax expense                                                 (65,088 )       (11,475 )
Net income                                                    $     70,587      $   (3,304 )
Effective income tax rate                                             48.0 %         140.4 %
Income before income taxes                                    $    135,675      $    8,171
Adjust: Goodwill and acquired intangible assets impairment               -        (106,602 )
Adjust: Acquired contract cost impairment                          (38,634 )             -
Adjust: Other gains, net                                                59             869
Adjust: Foreign currency exchange (loss) gain, net                 (10,866 )        (3,756 )
Income before income taxes, as adjusted                       $    185,116      $  117,660
Income tax expense                                            $    (65,088 

) ($11,475)
Adjustment: Tax benefit attributable to foreign exchange loss, net

                                                   1,716  

4,055

Income tax expense, as adjusted                               $    (66,804 )    $  (15,530 )
Effective income tax rate, as adjusted                                36.1 

% 13.2%



We calculate our effective income tax rate by dividing income tax expense by
pre-tax book income. Our effective income tax rates were 48.0% and 140.4% for
the years ended December 31, 2021 and 2020, respectively. The effective income
tax rates were significantly influenced by the impact of the goodwill and
acquired intangible asset impairment, acquired contract cost impairment, and
foreign currency exchange gains (losses). Excluding foreign currency exchange
gains (losses), goodwill and acquired intangible asset impairment, and acquired
contract cost impairment items from pre-tax income, as well as the related tax
effects for these items, our adjusted effective income tax rates
were 36.1% and 13.2% for the years ended December 31, 2021 and 2020,
respectively.


The effective income tax rate, as adjusted, for 2021 was higher than the
applicable statutory income tax rate of 21% as a result of an increase in the
valuation allowance related to the projected utilization of U.S. tax benefits,
the non-recognition of tax benefits from losses in certain foreign countries
where we have a limited history of profitable earnings and certain foreign
earnings being subject to higher local statutory tax rates. The effective income
tax rate, as adjusted, for 2020 was lower than the applicable statutory income
tax rate of 21% primarily because of the release of unrecognized tax benefits
for the completion of foreign country tax audits.

We determine income tax expense based upon enacted tax laws applicable in each
of the taxing jurisdictions where we conduct business. Based on our
interpretation of such laws, and considering the evidence of available facts and
circumstances and baseline operating forecasts, we have accrued the estimated
income tax effects of certain transactions, business ventures, contract and
organizational structures, and the estimated future reversal of timing
differences. Should a taxing jurisdiction change its laws or dispute our
conclusions, or should management become aware of new facts or other evidence
that could alter our conclusions, the resulting impact to our estimates could
have a material adverse effect on our results of operations and financial
condition.


Income before income taxes, as adjusted, income tax expense, as adjusted and
effective income tax rate, as adjusted, are non-U.S. GAAP financial measures
that management believes are useful for understanding why our effective income
tax rates are significantly different than would be expected. These non-U.S.
GAAP measures are used by management to conduct and evaluate its business during
its regular review of operating results for the periods presented.

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Our total liability for uncertain tax positions under Accounting Standards
Codification ("ASC") 740-10-25 and -30 was $41.0 million as of December 31,
2021. The application of ASC 740-10-25 and -30 requires significant judgment in
assessing the outcome of future income tax examinations and their potential
impact on the Company's estimated effective income tax rate and the value of
deferred tax assets, such as those related to the Company's net operating
loss carryforwards. It is reasonably possible that the balance of gross
unrecognized tax benefits could significantly change within the
next twelve months, as a result of the resolution of audit examinations and
expirations of certain statutes of limitations and, accordingly, materially
affect our Consolidated Financial Statements. At this time, it is not possible
to estimate the range of change due to the uncertainty of potential outcomes.

Net (income) loss attributable to non-controlling interests

Non-controlling interests represent the elimination of net income attributable to minority shareholders’ share 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 (loss) attributable to Euronet


Net income attributable to Euronet was $70.7 million for the year ended December
31, 2021, an increase of $74.1 million compared to the net loss in the same
period in 2020. For the year ended December 31, 2021, the increase in net
income was primarily attributable to the $150.5 million increase in gross profit
driven by an increase in transaction volumes across all three segments and
$106.0 million decrease in non-cash goodwill and intangible assets impairment
charges, partially offset by an $80.7 million increase in salaries and benefits,
a $53.6 million increase in income tax expense, a $30.3 million increase in
selling, general and administrative expenses, an $8.7 million increase in
depreciation and amortization expenses, a $7.1 million increase in foreign
currency exchange losses, and an increase in other expenses aggregating
$2.0 million.

Translation Adjustment



Translation gains and losses are the result of translating our foreign entities'
balance sheets from local functional currency to the U.S. dollar reporting
currency prior to consolidation and are recorded in comprehensive (loss) income.
As required by U.S. GAAP, during this translation process, asset and liability
accounts are translated at current foreign currency exchange rates and equity
accounts are translated at historical rates. Historical rates represent the
rates in effect when the balances in our equity accounts were originally
created. By using this mix of rates to convert the balance sheet from functional
currency to U.S. dollars, differences between current and historical exchange
rates generate this translation adjustment.



We recorded a net loss on translation adjustments of $78.5 million for 2021 and
a net gain of $70.8 million for 2020. During 2021, the U.S. dollar strengthened
compared to key foreign currencies, resulting in translation losses which were
recorded in comprehensive (loss) income. In 2020, the U.S. dollar weakened
compared to key foreign currencies, resulting in translation gains which were
recorded in comprehensive (loss) income.


Cash and capital resources

Working capital

As of December 31, 2021, we had working capital of $1,455.8 million, which is
calculated as the difference between total current assets and total current
liabilities, compared to working capital of $1,510.5 million as of December 31,
2020. The decrease in working capital was primarily due to the $159.8 million
decrease in cash and cash equivalents, $77.5 million decrease in prepaid
expenses and other current assets, $45.9 million increase in trade accounts
payable, $22.7 million increase in income taxes payable, and $2.9 million
aggregate increase in other working capital balances, offset by the $132.3
million increase in ATM cash, $85.5 million increase in trade accounts
receivable, and $36.3 million decrease in accrued expenses and other current
liabilities. Our ratio of current assets to current liabilities was
1.79 and 1.81 at December 31, 2021 and December 31, 2020, respectively.

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We require substantial working capital to finance operations. The Money Transfer
Segment funds 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 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 the revolving credit facilities
and cash flows from operations. As of December 31, 2021, we had
approximately $543.4 million of our own cash in use or designated for use in our
ATM network, which is recorded in ATM cash on Euronet's Consolidated Balance
Sheet. ATM cash increased $132.3 million from $411.1 million as of December 31,
2020 to $543.4 million as of December 31, 2021 as a result of the 13% increase
in the number of active ATMs as of December 31, 2021 compared to December 31,
2020.


The Company has $1,260.5 million of unrestricted cash as of December 31, 2021
compared to $1,420.3 million as of December 31, 2020. The decrease in
unrestricted cash was primarily due to the $132.3 million increase in ATM cash
as unrestricted cash was utilized to fill the additional active ATMs, the $227.8
million of shares repurchased under stock repurchase programs, and $92.2 million
of capital expenditures, partially offset by the $406.6 million of cash provided
by operating activities. Including the $543.4 million of cash in ATMs at
December 31, 2021, the Company has access to $1,803.9 million in available
cash, and $689.3 million available under the Credit Facility with no significant
long-term debt principal payments until October 2023.

In March 2021, the Company entered into an agreement to purchase the Piraeus
Bank Merchant Acquiring business of Piraeus Bank for €300 million, or
approximately $360 million. The closing is targeted for the first half
of 2022 and is subject to regulatory approvals, finalization of the commercial
agreements, and customary closing conditions. The Company expects to finance the
purchase price using cash on hand. See Note 6, Acquisitions, to our Consolidated
Financial Statements for additional information.

We had cash, cash equivalents and restricted cash of $2,086.1 million as of
December 31, 2021, of which $1,558.2 million was held outside of the U.S. 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 years ended December
31, 2021 and 2020 (in thousands):


                                                                Year Ended December 31,
Liquidity                                                         2021             2020
Cash and cash equivalents and restricted cash provided by
(used in):
Operating activities                                         $    406,576      $  253,505
Investing activities                                              (98,109 )      (105,531 )
Financing activities                                             (212,236 )        35,398

Effect of changes in exchange rates on cash and cash equivalents and restricted cash

                         (109,637 ) 

98,757

(Decrease) increase in cash and cash equivalents and
restricted cash                                              $    (13,406 )    $  282,129




Operating cash flow


Cash flows provided by operating activities were $406.6 million for the year
ended December 31, 2021 compared to $253.5 million for the same period in 2020.
The increase in operating cash flows was primarily due to the increase in net
income and fluctuations in working capital mainly associated with the timing of
the settlement processes with content providers in the epay Segment, with
correspondents in the Money Transfer Segment, and with card organizations and
banks in the EFT Processing Segment.


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Cash flow from investing activity


Cash flows used in investing activities were $98.1 million for the year ended
December 31, 2021 compared to $105.5 million for the same period in 2020. We
used $92.2 million for purchases of property and equipment for the year ended
December 31, 2021 compared to $97.6 million for the same period in 2020. Cash
used for software development and other investing activities totaled
$5.9 million and $7.8 million for the year ended December 31, 2021 and 2020,
respectively.


Cash flow from financing activity


Cash flows used in financing activities were $212.2 million for the year ended
December 31, 2021 compared to cash flows provided by financing activities
of $35.4 million for the same period in 2020. The increase in cash used in
financing activities is primarily the result of the $13.0 million net borrowings
on debt obligations for the year ended December 31, 2021 compared to $265.2
million for the same period in 2020. We repurchased $229.9 million of common
stock during the year ended December 31, 2021 compared to repurchases
of $241.5 million for the same period in 2020. $2.1 million of share repurchases
during the year ended December 31, 2021 were in connection with the settlement
of Restricted Stock Unit awards and the exercise of option awards in certain
countries in which we operate. We received proceeds of $10.8 million and $18.1
million during the year ended December 31, 2021 and 2020, respectively, for the
issuance of stock in connection with our Stock Incentive Plan.

Other sources of capital

Credit Facility - On October 17, 2018, the Company entered into a $1.0 billion
unsecured credit agreement (the "Credit Facility") that expires on October 17,
2023. The Credit Facility allows for borrowings in Australian dollars, British
pounds sterling, Canadian dollars, Czech koruna, Danish krone, euro, Hungarian
forints, Japanese yen, New Zealand dollars, Norwegian krone, Polish zlotys,
Swedish krona, Swiss francs, and U.S. dollars. The Credit Facility contains a
$200 million sublimit for the issuance of letters of credit, a $50 million
sublimit for U.S. dollar swingline loans, and a $90 million sublimit for certain
foreign currencies swingline loans.

As of December 31, 2021, fees and interest on borrowings are based upon the
Company's corporate credit rating (as defined in the Credit Facility) and are
based, in the case of letter of credit fees, on a margin, and in the case of
interest, on a margin over the London InterBank Offered Rate ("LIBOR") or a
margin over the base rate, as selected by us, with the applicable margin ranging
from 1.125% to 2.0% (or 0.175% to 1.0% for base rate loans).
As of December 31, 2021, we had $283.4 million of borrowings
and $57.3 million of stand-by letters of credit outstanding under the Credit
Facility. The remaining $689.3 million under the Credit Facility was available
for borrowing. As of December 31, 2021, the weighted average interest rate under
the Credit Facility was 1.2%, excluding amortization of deferred financing
costs.

Convertible debt - On March 18, 2019, we completed the sale of $525.0 million in
principal amount of Convertible Senior Notes due 2049 ("Convertible Notes"). As
of December 31, 2021 the carrying value of the Convertible Notes was
$468.2 million. The Convertible Notes were issued pursuant to an indenture,
dated as of March 18, 2019 (the "Indenture"), by and between the Company and
U.S. Bank National Association, as trustee. The Convertible Notes have an
interest rate of 0.75% per annum payable semi-annually in March and September,
and are convertible into shares of Euronet common stock at a conversion price of
approximately $188.73 per share if certain conditions are met (relating to the
closing prices of Euronet common stock exceeding certain thresholds for
specified periods). Holders of the Convertible Notes have the option to require
the Company to repurchase for cash all or part of their Convertible Notes on
each of March 15, 2025, 2029, 2034, 2039 and 2044 at a repurchase price equal to
100% of the principal amount of the Convertible Notes to be repurchased, plus
accrued and unpaid interest to, but excluding, the relevant repurchase date. In
connection with the issuance of the Convertible Notes, we recorded $12.8 million
in debt issuance costs, which are being amortized through March 1, 2025.

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Senior Notes - On May 22, 2019, the Company completed the sale of €600 million
($669.9 million) aggregate principal amount of Senior Notes that expire in May
2026 (the "Senior Notes"). The Senior Notes accrue interest at a rate of 1.375%
per year, payable annually in arrears commencing May 22, 2020, until maturity or
earlier redemption. As of December 31, 2021, the Company has outstanding €600
million ($682.1 million) principal amount of the Senior Notes. In addition, the
Company may redeem some or all of these notes on or after February 22, 2026 at
their principal amount plus any accrued and unpaid interest.

Other debt obligations - Certain of our subsidiaries have available credit lines
and overdraft facilities to generally supplement short-term working capital
requirements, when necessary. There were $0.9 million outstanding under these
other obligation arrangements as of both December 31, 2021 and December 31,
2020.

Other uses of capital

Capital expenditures and requirements – Total capital expenditures for 2021 were $92.2 million. These capital expenditures were primarily for the purchase of ATMs to expand our IAD network to Europe, the purchase and installation of ATMs in key under-penetrated markets, the purchase of point-of-sale terminals for the epay and Money Transfer segments, as well as computer equipment and software for offices, data centers and corporate stores. Total capital expenditures for 2022 are currently estimated at approximately $95 million for
$100 million.


Contractual lease obligations - The Company has entered into contractually
binding operating and finance lease commitments to operate the business.
Operating lease expenses were $55.6 million and $83.1 million for the years
ended December 31, 2021 and 2020, respectively. Finance lease expenses were not
material for 2021 or 2020. For additional information on operating and finance
lease obligations, see Note 13, Leases, to the Consolidated Financial
Statements.


At current and projected cash flow levels, we anticipate that cash generated
from operations, together with cash on hand and amounts available under our
Credit Facility and other existing and potential future financings 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.


Share buyback plan


The Company's Board of Directors had authorized a stock repurchase program
allowing Euronet to repurchase up to $375 million in value or 10.0 million
shares of stock through March 31, 2020. The Company repurchased all $375 million
of stock under this 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 the Company's common stock
through March 11, 2021. The Company repurchased $110.6 million of stock under
this program. On February 26, 2020, the Company put a repurchase program in
place to repurchase up to $250 million in value, but not more than 5.0 million
shares of common stock through February 28, 2022. The Company has repurchased
$227.8 million of stock under this program. On December 8, 2021, the Company put
a repurchase program in place to repurchase up to $300 million in value, but not
more than 5.0 million shares of common stock through December 8, 2023. For the
year ended December 31, 2021, the Company repurchased 2.0 million shares under
the repurchase programs at a weighted average purchase price of $113.88 for a
total value of $227.8 million. Repurchases under the programs 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.


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.

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Off-balance sheet arrangements


We have certain significant off-balance sheet items described in Note 20,
Commitments, to the Consolidated Financial Statements. 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. 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 December 31, 2021.


Significant Accounting Policies and Estimates


The preparation of financial statements in conformity with U.S. GAAP which
requires management to make estimates, judgments and assumptions that affect the
amounts reported in the Consolidated Financial Statements and accompanying
notes. Management considers an accounting policy and estimate to be critical if
it requires the use of assumptions that were uncertain at the time the estimate
was made and if changes in the estimate or selection of a different estimate
could have a material effect on the Company's financial condition and results of
operations. Our most critical estimates and assumptions are used for computing
income taxes, allocating the purchase price to assets acquired and liabilities
assumed in acquisitions, and potential impairment of intangible assets and
goodwill. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results could differ materially from these estimates. For a summary of
all of the Company's significant accounting policies, see Note 3, Summary of
Significant Accounting Policies and Practices, to the accompanying Consolidated
Financial Statements.

Accounting for income taxes


The deferred income tax effects of transactions reported in different periods
for financial reporting and income tax return purposes are recorded under the
asset and liability method prescribed under ASC Topic 740, Income Taxes ("ASC
740"). This method gives consideration to the future tax consequences of
deferred income or expense items and immediately recognizes changes in income
tax laws upon enactment. The consolidated statement of operations effect is
generally derived from changes in deferred income taxes, net of valuation
allowances, on the balance sheet as measured by differences in the book and tax
bases of our assets and liabilities.


We have significant tax loss carryforwards, and other temporary differences,
which are recorded as deferred tax assets and liabilities. Deferred tax assets
realizable in future periods are recorded net of a valuation allowance based on
an assessment of each entity's, or group of entities', ability to generate
sufficient taxable income within an appropriate period, in a specific tax
jurisdiction.



In assessing the recognition of deferred tax assets, we consider whether it is
more likely than not that some portion or all of the deferred tax assets will be
realized. As more fully described in Note 14, Income Taxes, to the Consolidated
Financial Statements, gross deferred tax assets were $270.9 million as of
December 31, 2021, partially offset by a valuation allowance of $100.5 million.
The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those temporary differences
become deductible. We make judgments and estimates on the scheduled reversal of
deferred tax liabilities, historical and projected future taxable income in each
country in which we operate, and tax planning strategies in making this
assessment.


Based upon the level of historical taxable income and current projections for
future taxable income over the periods in which the deferred tax assets are
deductible, we believe it is more likely than not that we will realize the
benefits of these deductible differences, net of the existing valuation
allowance at December 31, 2021. If we have a history of generating taxable
income in a certain country in which we operate, and baseline forecasts project
continued taxable income in this country, we will reduce the valuation allowance
for those deferred tax assets that we expect to realize.

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Additionally, we follow the provisions of ASC 740-10-25 and -30 to account for
uncertainty in income tax positions. Applying the standard requires substantial
management judgment and use of estimates in determining whether the impact of a
tax position is "more likely than not" of being sustained on audit by the
relevant taxing authority. We consider many factors when evaluating and
estimating our tax positions, which may require periodic adjustments and which
may not accurately anticipate actual outcomes. It is reasonably possible that
amounts reserved for potential exposure could change significantly as a result
of the conclusion of tax examinations and, accordingly, materially affect our
operating results.


Business combinations


In accordance with ASC Topic 805, Business Combinations ("ASC 805"), we allocate
the acquisition purchase price of an acquired entity to the assets acquired,
including identifiable intangibles, and liabilities assumed based on their
estimated fair values at the date of acquisition. Management applies various
valuation methodologies to these acquired assets and assumed liabilities which
often involve a significant degree of judgment, particularly when liquid markets
do not exist for the particular item being valued. Examples of such items
include loans, deposits, identifiable intangible assets and certain other assets
and liabilities acquired or assumed in business combinations. Management uses
significant estimates and assumptions to value such items, including, projected
cash flows and discount rates. For larger or more complex acquisitions, we
generally obtain third-party valuations to assist us in estimating fair values.
The use of different valuation techniques and assumptions could change the
amounts and useful lives assigned to the assets and liabilities acquired and
related amortization expense. During the measurement period, which is not to
exceed one year from the acquisition date, we may record adjustments to the
assets acquired and liabilities assumed, with the corresponding offset to
goodwill. Upon the conclusion of the measurement period, any subsequent
adjustments are recorded to earnings.

Good will and intangible assets


In accordance with ASC Topic 350, Intangibles - Goodwill and Other ("ASC
350"), we evaluate the carrying value of our indefinite-lived assets, including
goodwill, at least annually or more frequently whenever events or changes in
circumstances indicate that the asset may be impaired, or in the case of
goodwill, that the fair value of the reporting unit may be less than its
carrying amount. Our annual impairment tests are performed during the fourth
quarter and are performed at the reporting unit level. Our annual process for
evaluating goodwill allows us to perform a qualitative assessment for all
reporting units, and then perform a quantitative goodwill impairment test for
those reporting units in which it is deemed necessary. The qualitative factors
evaluated by the Company include: economic conditions of the local business
environment, overall financial performance, sensitivity analysis from the most
recent quantitative test, and other entity specific factors as deemed
appropriate. If we determine a quantitative goodwill impairment test is
appropriate, the test involves comparing the fair value of a reporting unit to
its carrying amount, including goodwill, after any long-lived asset impairment
charges. Generally, the fair value is determined using discounted projected
future cash flows and market multiple of earnings. If the carrying amount of the
reporting unit exceeds the fair value of the reporting unit, a goodwill
impairment loss is recognized in an amount equal to the excess. 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 our operations will not perform as
expected, or that estimates or assumptions could change, which may result in the
recording of material non-cash impairment charges during the year in which these
determinations take place.


The COVID-19 pandemic and subsequent mitigation efforts, which included global
business shutdowns, the closing of borders and the implementation of mandatory
social distancing requirements, created an unprecedented disruption to our
business beginning in the first half of 2020. These mitigation efforts coupled
with the negative economic impacts to the tourism industry caused some of our
reporting units to either have a temporary or sustained decline in revenues and
earnings and necessitated changes to our forecasted outlook. We determined the
totality of these events constituted a triggering event that required us to
perform an interim goodwill impairment assessment as of June 1, 2020. We
concluded a triggering event had occurred for six reporting units, resulting in
quantitative impairment tests. Three reporting units are within the EFT segment,
two reporting units are within the Money Transfer segment, and one reporting
unit is within the epay segment.


The fair value of these reporting units were determined using weighted results
from the discounted cash flow model ("DCF model") and guideline public company
method ("Market Approach model"). A number of significant assumptions and
estimates are involved in the application of the DCF model to forecast operating
cash flows, including forecasted revenue, forecasted EBITDA margin, and discount
rate. Significant assumptions and inputs in the Market Approach model are
EBITDA, EBITDA market multiple, and the estimated control premium. The DCF Model
and Market Approach Model utilize Level 3 inputs in the fair value hierarchy as
they include unobservable inputs that require significant management
assumptions.



The results of the June 1, 2020 quantitative test were that three of the six
reporting units' fair value exceeded their respective carrying amounts. For the
remaining three reporting units, the quantitative test indicated that the fair
value of each of the reporting units was less than the respective carrying
amounts. As a result, we recorded a non-cash goodwill impairment charge of
$104.6 million with respect to the xe, Innova and Pure Commerce reporting units.
A total of $21.9 million of the impairment charge was included within the EFT
Segment, and $82.7 million of the impairment charge was included in the Money
Transfer Segment.

Subsequent to June 1, 2020 and through year-end 2021, including the fourth
quarter annual impairment test, management monitored whether there were events
or changes in circumstances that had occurred, at a reporting unit level,
to indicate that goodwill was impaired or further impaired.  There were no
indications of impairment and no additional non-cash goodwill impairment charges
were recorded.

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Acquired finite-lived intangible assets are amortized over their estimated
useful lives. We evaluate the recoverability of our intangible assets for
possible impairment whenever events or circumstances indicate that the carrying
amount of such assets may not be recoverable. The evaluation is performed at the
lowest level for which identifiable cash flows are largely independent of the
cash flows of other assets and liabilities. Recoverability of these assets is
measured by a comparison of the carrying amounts to the future undiscounted cash
flows the assets are expected to generate. If such review indicates that the
carrying amount of intangible assets is not recoverable, the carrying amount of
such assets is reduced to its fair value. In addition to the recoverability
assessment, we routinely review the remaining estimated useful lives of our
finite-lived intangible assets. If we reduce the estimated useful life
assumption for any asset, the remaining unamortized balance would be amortized
over the revised estimated useful life.

From December 31, 2021the consolidated balance sheet includes goodwill of $641.6 million and intangible assets acquired, net of accumulated amortization, $97.8 million. For the year ended December 31, 2021no impairment of goodwill or acquired intangible assets has been identified.

Recently issued accounting pronouncements

See Item 8 of Part II, “Financial Statements and Supplementary Data – Note 3 – Summary of Significant Accounting Policies and Practices”.

Forward-looking statements


This document 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:

º our business plans and financing plans and requirements;

º trends affecting our business plans and financing plans and requirements;

º trends affecting our business;

º the adequacy of capital to meet our capital needs and expansion

     plans;
   º the assumptions underlying our business plans;
   º our ability to repay indebtedness;
   º our estimated capital expenditures;
   º the potential outcome of loss contingencies;
   º our expectations regarding the closing of any pending acquisitions;
   º business strategy;
   º government regulatory action;
   º the expected effects of changes in laws or accounting standards;

º the impact of the COVID-19 pandemic, including its variants, on our results

operations and financial condition;

º technological advances; and

º 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 impacts from the COVID-19
pandemic; the effectiveness of vaccines and treatments against COVID-19
variants; the effects in Europe of the U.K.'s departure from the E.U. and
economic conditions in specific countries and regions; 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; our ability to comply with increasingly stringent regulatory requirements,
including anti-money laundering, anti-terrorism, anti-bribery, sanctions,
consumer and data protection and the European Union's General Data Protection
Regulation and Second Revised Payment Service Directive 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; the cost
of borrowing, availability of credit and terms of and compliance with debt
covenants; and renewal of sources of funding as they expire and the availability
of replacement funding and those factors referred to above and as set forth and
more fully described in Part I, Item 1A - Risk Factors. Any forward-looking
statements made in this Form 10-K 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.


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