UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



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

For the quarterly period ended ~~September 30, 2013~~March 31, 2014



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



For the transition period			to

Commission File Number: 001-31648

EURONET WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)



Delaware	74-2806888
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

3500 College Boulevard
Leawood, Kansas	66211
(Address of principal executive offices)	(Zip Code)

(913) 327-4200

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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). Yes þ No o

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



Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

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

On ~~October 29, 2013~~April 30, 2014, Euronet Worldwide, Inc. had ~~50,268,267~~50,959,227 shares of Common Stock outstanding.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

Table of Contents



		Page
PART I—FINANCIAL INFORMATION		3
Item 1.	~~ITEM 1. FINANCIAL STATEMENTS~~Financial Statements (unaudited)	3
	~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013	183
	~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Consolidated Statements of Income for the Three Months Ended March 31, 2014 and 2013	364
	~~ITEM 4. CONTROLS AND PROCEDURES~~Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2014 and 2013	375
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013	6
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
PART II—OTHER INFORMATION
Item 1.	37Legal Proceedings	31
Item 1A.	~~ITEM 1. LEGAL PROCEEDINGS~~Risk Factors	3732
Item 2.	~~ITEM 1A. RISK FACTORS~~Unregistered Sales of Equity Securities and Use of Proceeds	3832
Item 6.	~~ITEM 6. EXHIBITS~~Exhibits	3933

	~~SIGNATURES~~Signatures	4034

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

~~Consolidated Balance Sheets~~CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	As of						As of
	September 30, 2013			December 31, 2012			March 31, 2014			December 31, 2013
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	244,471		$	201,435		$	292,300		$	209,826
Restricted cash	63,107			71,608			70,516			77,987
Inventory — PINs and other	61,339			101,168			64,811			92,757
Trade accounts receivable, net of allowances for doubtful accounts of $20,687 at September 30, 2013 and $21,512 at December 31, 2012	317,882			370,836
Trade accounts receivable, net of allowances for doubtful accounts of $22,760 at March 31, 2014 and $22,079 at December 31, 2013							315,652			390,563
Prepaid expenses and other current assets	58,201			68,132			58,310			69,242
Total current assets	745,000			813,179			801,589			840,375
Property and equipment, net of accumulated depreciation of $232,547 at September 30, 2013 and $207,282 at December 31, 2012	111,885			115,475
Property and equipment, net of accumulated depreciation of $240,215 at March 31, 2014 and $231,327 at December 31, 2013							117,601			116,230
Goodwill	510,780			481,760			499,680			498,435
Acquired intangible assets, net of accumulated amortization of $157,722 at September 30, 2013 and $140,829 at December 31, 2012	97,377			83,389
Other assets, net of accumulated amortization of $24,645 at September 30, 2013 and $24,247 at December 31, 2012	49,464			57,733
Acquired intangible assets, net of accumulated amortization of $137,917 at March 31, 2014 and $132,927 at December 31, 2013							88,943			93,026
Other assets, net of accumulated amortization of $26,659 at March 31, 2014 and $25,363 at December 31, 2013							49,347			50,049
Total assets	$	1,514,506		$	1,551,536		$	1,557,160		$	1,598,115

LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable	$	326,835		$	459,847		$	364,876		$	457,274
Accrued expenses and other current liabilities	246,962			183,406			204,772			213,284
Current portion of capital lease obligations	2,393			2,397			2,309			2,361
Short-term debt obligations and current maturities of long-term debt obligations	9,029			7,551			10,013			10,903
Income taxes payable	12,903			9,396			13,311			15,656
Deferred revenue	27,805			34,109			33,004			32,533
Total current liabilities	625,927			696,706			628,285			732,011
Debt obligations, net of current portion	235,252			286,703			228,384			188,510
Capital lease obligations, net of current portion	3,382			4,589			2,454			2,872
Deferred income taxes	20,299			22,031			18,044			17,695
Other long-term liabilities	16,106			14,967			17,164			18,572
Total liabilities	900,966			1,024,996			894,331			959,660
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; 53,891,965 issued at September 30, 2013 and 52,976,558 issued at December 31, 2012	1,078			1,060
Common Stock, $0.02 par value. 90,000,000 shares authorized; 54,612,164 issued at March 31, 2014 and 54,276,761 issued at December 31, 2013							1,092			1,086
Additional paid-in-capital	799,702			782,506			815,430			809,640
Treasury stock, at cost, 3,676,370 shares at September 30, 2013 and 3,653,958 shares at December 31, 2012	(68,210		)	(67,327		)
Treasury stock, at cost, 3,664,779 shares at March 31, 2014 and 3,650,519 shares at December 31, 2013							(68,676		)	(68,122		)
Accumulated deficit	(106,024		)	(184,015		)	(80,007		)	(96,029		)
Restricted reserve	1,035			1,002
Accumulated other comprehensive loss	(17,170		)	(10,850		)	(7,255		)	(10,453		)
Total Euronet Worldwide, Inc. stockholders’ equity	610,411			522,376			660,584			636,122
Noncontrolling interests	3,129			4,164			2,245			2,333
Total equity	613,540			526,540			662,829			638,455
Total liabilities and equity	$	1,514,506		$	1,551,536		$	1,557,160		$	1,598,115

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

~~Consolidated Statements of Operations~~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 March 31,
	2013			2012			2013			2012			2014			2013
Revenues	$	360,580		$	316,356		$	1,037,767		$	916,355		$	353,315		$	335,644

Operating expenses:
Direct operating costs	223,551			200,378			656,933			586,965			226,338			219,087
Salaries and benefits	52,819			45,549			153,298			134,624			53,574			48,727
Selling, general and administrative	33,254			30,071			95,714			86,738			32,871			31,003
Acquisition-related contingent consideration gain	(19,319		)	—			(19,319		)	—
Depreciation and amortization	14,930			16,163			48,838			48,137			16,150			17,669
Total operating expenses	305,235			292,161			935,464			856,464			328,933			316,486
Operating income	55,345			24,195			102,303			59,891			24,382			19,158

Other income (expense):
Interest income	527			877			1,438			3,493			532			494
Interest expense	(2,938		)	(5,483		)	(8,372		)	(16,542		)	(1,988		)	(2,859		)
Other gains (losses), net	2,809			(25		)	2,397			4,146
Foreign currency exchange gain (loss), net	2,899			1,419			2,658			(1,237		)
Foreign currency exchange loss, net													(1,269		)	(1,701		)
Income from unconsolidated affiliates	—			185			260			795			—			124
Other income (expense), net	3,297			(3,027		)	(1,619		)	(9,345		)

Other expense, net													(2,725		)	(3,942		)
Income before income taxes	58,642			21,168			100,684			50,546			21,657			15,216

Income tax expense	(10,668		)	(6,827		)	(22,485		)	(17,381		)	(5,724		)	(3,156		)

Net income	47,974			14,341			78,199			33,165			15,933			12,060
Less: Net (income) loss attributable to noncontrolling interests	(100		)	289			(208		)	384
Less: Net loss (income) attributable to noncontrolling interests													89			(54		)
Net income attributable to Euronet Worldwide, Inc.	$	47,874		$	14,630		$	77,991		$	33,549		$	16,022		$	12,006

Earnings per share attributable to Euronet Worldwide, Inc. stockholders:
Basic	$	0.96		$	0.29		$	1.57		$	0.66		$	0.32		$	0.24
Diluted	$	0.92		$	0.28		$	1.51		$	0.65		$	0.30		$	0.24

Weighted average shares outstanding:
Basic	50,093,786			50,827,767			49,829,379			50,705,222			50,788,219			49,504,712
Diluted	52,200,472			51,597,319			51,579,644			51,521,203			52,763,650			50,620,437

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

~~Consolidated Statements of Comprehensive Income~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

Three Months Ended
September 30, Nine Months Ended
September 30,
2013 2012 2013 2012
Net income $ 47,974
$ 14,341
$ 78,199
$ 33,165
Other comprehensive income (loss), net of tax:
Translation adjustment 22,072
10,577
(6,004 ) 1,919
Comprehensive income 70,046
24,918
72,195
35,084
Comprehensive (income) loss attributable to noncontrolling interests (207 ) 222
(306 ) 435
Comprehensive income attributable to Euronet Worldwide, Inc. $ 69,839
$ 25,140
$ 71,889
$ 35,519



	Three Months Ended March 31,
	2014		2013
Net income	$	15,933	$	12,060
Translation adjustment	3,199		(17,150		)
Comprehensive income (loss)	19,132		(5,090		)
Comprehensive loss attributable to noncontrolling interests	88		9
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.	$	19,220	$	(5,081	)

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

EURONET WORLDWIDE, INC. AND SUBSIDIARIES

~~Consolidated Statements of Cash Flows~~CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2013			2012			2014			2013
Net income	$	78,199		$	33,165		$	15,933		$	12,060

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,838			48,137			16,150			17,669
Share-based compensation	9,012			8,812			3,137			2,501
Unrealized foreign exchange loss, net	(2,658		)	1,237			(1,269		)	1,701
Deferred income taxes	(93		)	(2,838		)	(1,661		)	71
Income from unconsolidated affiliates	(260		)	(795		)	—			(124		)
Accretion of convertible debentures discount and amortization of debt issuance costs	797			7,032
Acquisition-related contingent consideration gain	(19,319		)	—
Gain on sale of equity method investment	(2,827		)	—
Gain on step acquisition	—			(4,388		)
Amortization of debt issuance costs							297			208
Changes in working capital, net of amounts acquired:
Income taxes payable, net	3,181			(811		)	(2,223		)	(766		)
Restricted cash	5,206			(19,759		)	8,405			30,547
Inventory — PINs and other	37,599			31,319			28,665			16,978
Trade accounts receivable	50,767			36,276			75,976			9,924
Prepaid expenses and other current assets	8,782			2,191			10,552			(13,665		)
Trade accounts payable	(128,449		)	16,169			(94,149		)	(82,301		)
Deferred revenue	(6,697		)	(2,274		)	449			645
Accrued expenses and other current liabilities	66,097			(13,678		)	(8,435		)	21,872
Changes in noncurrent assets and liabilities	2,389			3,627			1,232			(1,578		)
Net cash provided by operating activities	150,564			143,422			53,059			15,742
Cash flows from investing activities:
Acquisitions, net of cash acquired	(30,847		)	(2,655		)	—			(30,847		)
Purchases of property and equipment	(27,631		)	(33,247		)	(11,049		)	(6,083		)
Purchases of other long-term assets	(4,856		)	(3,463		)	(1,327		)	(1,114		)
Proceeds from sale of equity method investment	7,609			—
Other, net	731			1,106			131			462
Net cash used in investing activities	(54,994		)	(38,259		)	(12,245		)	(37,582		)
Cash flows from financing activities:
Proceeds from issuance of shares	7,487			2,109			1,485			2,157
Borrowings from revolving credit agreements	1,508,463			282,055			413,913			538,129
Repayments of revolving credit agreements	(1,550,329		)	(360,596		)	(371,600		)	(546,830		)
Repayments of long-term debt obligations	(8,086		)	(3,000		)	(2,000		)	(1,500		)
Repayments of short-term debt obligations							(1,337		)	—
Repayments of capital lease obligations	(2,016		)	(2,009		)	(629		)	(702		)
Purchase of subsidiary shares from noncontrolling interests	(7,878		)	(3,321		)	—			(7,878		)
Other, net	(163		)	(791		)	(28		)	(95		)
Net cash used in financing activities	(52,522		)	(85,553		)
Net cash provided by (used in) financing activities							39,804			(16,719		)
Effect of exchange rate changes on cash and cash equivalents	(12		)	864			1,856			(1,447		)
Increase in cash and cash equivalents	43,036			20,474
Increase (Decrease) in cash and cash equivalents							82,474			(40,006		)

Cash and cash equivalents at beginning of period	201,435			177,327			209,826			201,435

Cash and cash equivalents at end of period	$	244,471		$	197,801		$	292,300		$	161,429

Supplemental disclosure of cash flow information:
Interest paid during the period	$	6,143		$	7,518		$	803		$	1,053
Income taxes paid during the period	23,227			21,972			$	8,207		$	7,230
Supplemental disclosure of non-cash investing and financing activities:
Equity issued in connection with acquisition	$	5,295		$	—		$	—		$	5,296
Contingent consideration in connection with acquisition	21,725			—			$	—		$	21,725

See accompanying notes to the unaudited consolidated financial statements.

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EURONET WORLDWIDE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1) GENERAL

Organization

Euronet Worldwide, Inc. ~~and~~(together with its subsidiaries, ~~(the~~the “Company”or “Euronet”) was established as a Delaware corporation on December 13, 1997 and succeeded Euronet Holding N.V. as the group holding company, which was founded and established in 1994. Euronet is a leading ~~global~~ electronic payments provider. Euronet offers payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. ~~The Company's~~Euronet's primary product offerings include comprehensive automated teller machine (“ATM”), point-of-sale (“POS”), card outsourcing, card issuing and merchant acquiring services; electronic distribution of prepaid mobile airtime and other electronic payment ~~products~~products; and global consumer money transfer services.

Basis of ~~presentation~~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 of normal interim closing procedures) necessary to present fairly on a consolidated basis the financial position of the Company as of ~~September 30, 2013~~March 31, 2014, and the results of its operations and cash flows for the ~~three- and nine-month periods~~three months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of ~~Euronet~~the Company for the year ended December 31, ~~2012~~2013, including the notes thereto, set forth in the Company’s ~~2012~~2013 Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts ~~reported in~~of assets and liabilities and disclosures of contingent assets and liabilities at the ~~unaudited consolidated~~date of the financial statements, as well as the reported amounts of revenues and ~~accompanying notes.~~expenses during the reported period. Actual results could differ from those estimates. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014.

Seasonality

~~The Company’s~~Euronet’s EFT Processing segment and epay ~~segments~~segment are significantly impacted by seasonality during the fourth quarter and first quarter of each year due to higher transaction levels during the holiday season and lower levels following the holiday season. Additionally, mostly in Europe, the EFT Processing business experiences its heaviest demand for dynamic currency conversion services during the third quarter of the fiscal year, coinciding with the tourist season. Seasonality in the money transfer segment varies by ~~region~~regions of the world. In most markets, ~~the Company~~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 ~~our~~Euronet usually experiences its lowest transaction levels during the first quarter of ~~the~~each year. ~~As a result, quarterly financial results are not necessarily indicative of the results to be expected for the year or other interim periods.~~

(2) ~~SUMMARY OF SIGNIFICANT~~RECENTLY ISSUED AND ADOPTED ACCOUNTING ~~POLICIES AND PRACTICES~~PRONOUNCEMENTS

~~Recently Issued and Adopted Accounting Pronouncements~~

In ~~February~~July 2013, the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) issued amended guidance that requires an entity to present information about significant items reclassified out of accumulated other comprehensive income, referred to as AOCI, on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. Additionally, the guidance expands the disclosure requirements for presentation of changes in AOCI by component. The guidance is effective for the Company for interim and annual reporting periods beginning January 1, 2013, and its adoption did not have an impact on the Company's results of operations, cash flows or financial position.

~~In July 2013, the FASB~~ issued Accounting Standards Update ~~("ASU"~~(“ASU”) ~~ASU~~No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists ("ASU 2013-11"). The amendments in ASU 2013-11 provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The ~~guidance is effective for fiscal years,~~Company adopted ASU 2013-11 as of January 1, 2014, and ~~interim periods within those years, beginning after December 15, 2013. The Company does~~its adoption did not ~~anticipate~~have a material impact toon the Company's ~~financial position,~~ results of operations, or cash flows ~~as a result of this change.~~or financial position.

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(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 period. 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~~the potential dilution of ~~the assumed conversion of the Company’s convertible debentures, restricted stock and~~ options to purchase the ~~Company’s~~Company's common stock and assumed vesting of restricted stock. The following table provides the computation of diluted weighted average number of common shares outstanding:


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2013	2012	2013	2012	2014	2013
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding	50,093,786	50,827,767	49,829,379	50,705,222	50,788,219	49,504,712
Incremental shares from assumed exercise of stock options and vesting of restricted stock	2,025,802	769,552	1,664,274	815,981	1,975,431	1,115,725
Incremental shares from assumed conversion of convertible debentures	80,884	—	85,991	—
Diluted weighted average shares outstanding	52,200,472	51,597,319	51,579,644	51,521,203	52,763,650	50,620,437

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-~~three months ended March 31, 2014 and ~~nine-month periods ended September 30, 2013 and 2012.~~2013. 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 ~~528,000~~763,000 and ~~1,029,000~~1,890,000 for the ~~three-~~three months ended March 31, 2014 and ~~nine-month periods ended~~2013, respectively.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consists entirely of foreign currency translation adjustments. The Company recorded a foreign currency translation gain of ~~September 30, 2013, respectively, and approximately~~ ~~3,567,000~~$3.2 million and translation loss of ~~3,593,000~~$17.2 million for the ~~three-~~three months ended March 31, 2014 and ~~nine-month periods ended September 30, 2012,~~2013, respectively.

~~During~~ There were no reclassifications of foreign currency translation into the three- and nine-month periods ended September 30, 2013 and 2012, the Company had convertible debentures outstanding that, if converted, would have a potentially dilutive effect on the Company’s stock. In September 2013, the Company repurchased at par the remaining ~~$3.6 million~~Consolidated Statements of ~~principal amount of the convertible debentures outstanding. As required by Accounting Standards Codification ("ASC") Topic 260,~~ ~~Earnings per Share,~~ if dilutive, the impact of the contingently issuable shares must be included in the calculation of diluted earnings per share under the “if-converted” method, regardless of whether the conditions upon which the debentures would be convertible into shares of the Company’s common stock have been met. Under the if-converted method, the dilutive effect of the assumed conversion of the debentures was ~~80,884~~ ~~shares and~~ ~~85,991~~ ~~shares~~Income for the ~~three-~~three months ended March 31, 2014 and ~~nine-month periods ended~~ ~~September 30, 2013, respectively. For the three- and nine-month periods ended September 30,~~ ~~2012, the assumed conversion of the convertible debentures was anti-dilutive and, accordingly, the associated shares have been excluded from diluted weighted average shares outstanding.~~2013.

~~Stockholder Rights Agreement~~(4) ACQUISITIONS

On March ~~26, 2013,~~7, 2014, the Company entered into a ~~new Rights~~Share Purchase Agreement (the ~~"Rights~~"Purchase Agreement") with ~~Computershare Trust Company, N.A., as Rights Agent. The Rights Agreement became effective at~~ the ~~close~~selling shareholders of ~~business on April 3, 2013, immediately following the expiration~~all of the ~~prior rights agreement. In connection with its approval~~capital stock of EIM (FX) Limited and TBK (FM) Limited, each United Kingdom limited companies, which primarily operate under the trading names HiFX or HiFM. Under the terms of the ~~Rights~~Purchase Agreement, the ~~Board~~selling shareholders will receive at closing an aggregate amount of ~~Directors also declared a dividend~~purchase consideration of ~~one "Right" for each outstanding share~~£145 million in cash and Euronet common stock. The number of ~~Euronet's~~shares of Euronet common stock ~~payable~~to be issued will be based on ~~April 3, 2013 to stockholders of record at~~ the close of business on April 3, 2013. As long as the Rights are attached to the common shares, the Company will issue one Right (subject to adjustment) with each new common share that is issued so that all such shares will have attached Rights. When exercisable, each Right will initially entitle the registered holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock at aaverage closing price of ~~$125~~ ~~per one one-hundredth~~Euronet common stock over the twenty trading-day period before closing and the average U.S. dollar to pounds sterling exchange rate over the five trading-day period before closing. Based on the March 31, 2014 exchange rate, the purchase consideration would be comprised of $184.5 million in cash and $56.5 million of Euronet common stock. HiFX offers account-to-account international payment services to high-income individuals and small-to-medium sized businesses, complementing Euronet’s existing consumer-to-consumer money transfer business. HiFX has an innovative multi-channel platform which allows customers to make transfers, track payments and manage their international payment activity online or through a ~~share, subject~~customer service representative.

The Purchase Agreement contains customary closing conditions, including certain regulatory approvals, and is currently expected to ~~adjustment. Upon occurrence~~close during the second quarter of a trigger event under the Rights Agreement, each holder of a Right (excluding certain holders) thereafter would have the right to receive upon exercise a number of common shares having a market value of two times the then current price of the Right.2014.

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The Rights are not exercisable until the earlier of (i) ten business days following a public announcement that (or a majority of the Board of Directors of the Company becoming aware that) a person or group of affiliated or associated persons or any person acting in concert therewith, has acquired, or obtained the right to acquire beneficial ownership of ~~20%~~ or more of the Company's common shares (as defined in the Rights Agreement); or (ii) ten business days following the commencement or announcement of an intention to make a tender offer or exchange offer, the consummation of which would result in any person becoming an acquiring person (as defined in the Rights Agreement), unless the Board of Directors sets a later date in either event.

The Rights Agreement is intended to encourage a potential acquiring person to negotiate directly with the Board of Directors, but may have certain anti-takeover effects. The Rights Agreement could significantly dilute the interests in the Company of an acquiring person. The Rights may therefore have the effect of delaying, deterring or preventing a change in control of the Company. The Rights have a de minimus fair value and expire on April 3, 2016.

~~Accumulated other comprehensive loss~~

~~As of~~ ~~September 30, 2013~~, accumulated other comprehensive loss consists entirely of foreign currency translation adjustments. The Company's reporting currency is the U.S. dollar. The financial statements of foreign subsidiaries where the functional currency is not the U.S. dollar are translated to U.S. dollars using (i) exchange rates in effect at period end for assets and liabilities, and (ii) weighted average exchange rates during the period for revenues and expenses. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss) as a separate component of consolidated stockholders' equity. The Company recorded a foreign currency translation gain of ~~$22.1 million~~ ~~and~~ ~~$10.6 million~~ ~~for the three-month periods ended September 30, 2013 and 2012, respectively. For the nine-month periods ended September 30, 2013 and 2012, the Company recorded a foreign currency translation loss of~~ ~~$6.0 million~~ ~~and a foreign currency translation gain of~~ ~~$1.9 million, respectively. For the three- and nine-month periods ended September 30, 2013, the Company reclassified~~ ~~$0.3 million~~ of foreign currency translation into the consolidated statements of operations. There were no reclassifications of foreign currency translation into the consolidated statements of operations for the three- and nine-month periods ended September 30, 2012.

~~(4) ACQUISITIONS~~

On January 4, 2013, the Company acquired all of the common stock of an Australian company, Pure Commerce Pty Limited. (“Pure Commerce”), which offers industry leading currency conversion and multi-currency acquiring products to global, local and online merchant acquirers, banks and retailers. The purchase price consisted of cash of approximately ~~$31.3 million, subject to customary purchase price adjustments, and~~ ~~$5.3 million~~ ~~of the Company's common stock. With respect to the stock portion of the purchase price and pursuant to the acquisition agreement, the Company issued at closing~~ ~~224,425~~ shares of common stock to the shareholders of Pure Commerce. The common stock will be held in escrow through September 2014 to secure certain obligations of the sellers. Further, Euronet has agreed pursuant to an earnout provision to pay additional purchase consideration of up to ~~30.0 million~~ Australian dollars, with half due in cash and the remaining half payable in Euronet common stock in March 2014, if certain performance targets are met during a measurement period ending December 31, 2013. As of the acquisition date, the fair value of the contingent consideration liability was ~~$21.7 million. See Note 8, Fair Value Measurements, for additional information related to the contingent consideration liability.~~

~~Table of Contents~~

~~The following table summarizes the fair values of the acquired net assets at the acquisition date:~~

(dollar amounts in thousands) Estimated Life
Current assets $ 4,818
Property and equipment 2-8 years 331
Non-compete agreements 4 years 755
Trade names 20 years 2,382
Proprietary software 10 years 11,912
Customer relationships 12 years 18,230
Goodwill Indefinite 26,228
Other non-current assets 402
Fair value of assets acquired 65,058
Current liabilities (4,762 )
Non-current liabilities (2,028 )
Net assets acquired $ 58,268

~~The net assets of Pure Commerce and its results from operations are included in the EFT Processing Segment's results.~~

(5) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the ~~nine~~three~~-month period~~ months ended ~~September 30, 2013~~March 31, 2014 is presented below:


(in thousands)	Acquired Intangible Assets			Goodwill		Total Intangible Assets			Acquired Intangible Assets			Goodwill		Total Intangible Assets
Balance as of December 31, 2012	$	83,389		$	481,760	$	565,149
Balance as of December 31, 2013									$	93,026		$	498,435	$	591,461
Increases (decreases):
Acquisition	33,279			26,228		59,507
Amortization	(16,128		)	—		(16,128		)	(4,841		)	—		(4,841		)
Other (primarily changes in foreign currency exchange rates)	(3,163		)	2,792		(371		)	758			1,245		2,003
Balance as of September 30, 2013	$	97,377		$	510,780	$	608,157
Balance as of March 31, 2014									$	88,943		$	499,680	$	588,623

Estimated amortization expense on intangible assets with finite lives, before income taxes, as of ~~September 30, 2013~~March 31, 2014, is expected to total $~~4.8~~13.4 million for the remainder of ~~2013,~~ ~~$18.1 million~~ ~~for~~ 2014, $~~12.8~~13.0 million for 2015, $~~11.2~~11.4 million for 2016, $~~9.4~~9.6 million for 2017, ~~and~~ $~~7.0~~7.2 million for ~~2018.~~2018 and $6.3 million for 2019.

The Company’s annual goodwill impairment test is performed during the fourth ~~quarter.~~quarter of its fiscal year. The ~~Company’s~~ annual impairment test for the year ended December 31, ~~2012~~2013 resulted in the Company recording a non-cash goodwill impairment charge of ~~$23.5~~$18.4 million ~~and an additional~~ ~~$5.2 million~~ ~~impairment charge relating~~ during the fourth quarter of 2013 with respect to ~~acquired intangible assets.~~certain reporting units included in the Company's epay segment.

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 ~~2012 analysis~~2013 annual impairment test could change, which may result in the Company recording additional material non-cash impairment charges during the year in which these changes take place.

(6) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

~~Table~~Accrued expenses and other current liabilities consist of ~~Contents~~the following:



	As of
(in thousands)	March 31, 2014		December 31, 2013
Accrued expenses	$	83,775	$	84,511
Accrued amounts due to mobile operators and other content providers	57,487		78,398
Money transfer settlement obligations	62,694		49,757
Deferred income taxes	816		618
Total	$	204,772	$	213,284

~~(6)~~(7) DEBT OBLIGATIONS

A summary of debt obligation activity for the ~~nine~~three~~-month period~~ months ended ~~September 30, 2013~~March 31, 2014 is presented below:

(in thousands) Revolving
Credit
Facilities Other Debt
Obligations Capital
Leases 3.5%
Convertible
Debentures
Due 2025 Term Loan Total
Balance at December 31, 2012 $ 215,117
$ 1,051
$ 6,986
$ 3,586
$ 74,500
$ 301,240
Increases (decreases):

Net repayments (41,811 ) —
(1,402 ) (3,586 ) (4,500 ) (51,299 )
Capital lease interest —
—
350
—
—
350
Foreign currency exchange gain (54 ) (22 ) (159 ) —
—
(235 )
Balance at September 30, 2013 173,252
1,029
5,775
—
70,000
250,056
Less — current maturities —
(1,029 ) (2,393 ) —
(8,000 ) (11,422 )
Long-term obligations at September 30, 2013 $ 173,252
$ —
$ 3,382
$ —
$ 62,000
$ 238,634



(in thousands)	Revolving Credit Facilities			Other Debt Obligations			Capital Leases			Term Loan A			Total
Balance at December 31, 2013	$	129,010		$	2,403		$	5,233		$	68,000		$	204,646
Increases (decreases):
Net borrowings (repayments)	42,426			(1,337		)	(599		)	(2,000		)	38,490
Capital lease interest							79						79
Foreign currency exchange (gain) loss	(52		)	(53		)	50						(55		)
Balance at March 31, 2014	171,384			1,013			4,763			66,000			243,160
Less — current maturities	—			(1,013		)	(2,309		)	(9,000		)	(12,322		)
Long-term obligations at March 31, 2014	$	171,384		$	—		$	2,454		$	57,000		$	230,838

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Credit Facility

~~The convertible debentures~~As of March 31, 2014, the Company had a ~~principal amount outstanding of~~ $~~3.6~~480 million senior secured credit facility (the "Credit Facility") consisting of a $400 million revolving credit facility and an $80 million term loan (which has been reduced to $66 million through principal amortization payments) ("Term Loan A").

Interest on borrowings under the revolving credit facility and Term Loan A vary based upon the Company's consolidated total leverage ratio, as defined in the Company's Amended and Restated Credit Agreement ("Credit Agreement"), and during the first quarter of fiscal 2014 was based on a margin over London Inter-Bank Offered Rate (“LIBOR”) or a margin over a base rate, as selected by the Company, with the applicable margin ranging from 1.5% to 2.5% for LIBOR loans or 0.5% to 1.5% for base rate loans. Accordingly, the weighted average interest rate for borrowings outstanding under the Company's revolving credit facility and Term Loan A was 1.77% and 1.65%, respectively, as of ~~December~~March 31, ~~2012~~2014.

~~. In September 2013,~~On April 9, 2014, the Company ~~repurchased at par~~amended and restated the ~~remaining~~Credit Agreement to, among other things, ~~$3.6 million~~ ~~of principal~~(i) increase the amount of Term Loan A from $66 million to $75 million, (ii) increase the ~~convertible debentures outstanding. Interest expense, including contractual interest~~aggregate credit commitments under the revolving credit facility from $400 million to $600 million, (iii) reduce the margin over the LIBOR rate and ~~discount accretion, which was fully amortized through October 15, 2012, was~~ ~~$29 thousand~~base rate by 12.5 basis points, and ~~$92 thousand~~ ~~for~~(iv) extend the ~~three- and nine-month periods ended~~ ~~September 30, 2013, respectively, and~~ ~~$3.5 million~~ ~~and~~ ~~$10.4 million~~ ~~for~~expiration date of the ~~three- and nine-month periods ended September 30, 2012, respectively. The effective interest rate was~~ Credit Agreement from August 18, 2016 to April 9, 2019.~~3.5%~~ ~~for the three- and nine-month periods ended~~ ~~September 30, 2013~~ ~~and~~ ~~8.4%~~ ~~for the three- and nine-month periods ended September 30,~~ ~~2012~~.

~~(7)~~(8) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As of ~~September 30, 2013~~March 31, 2014, the Company had foreign currency forward contracts outstanding with a notional value of $~~134.2~~136 million, primarily in Australian dollars, British pounds, euros and Mexican pesos, which were not designated as hedges and had a weighted average remaining maturity of two days. Although the Company enters into foreign currency contracts to offset foreign currency exposure related to the notional value of money transfer transactions collected in currencies other than the U.S. dollar and, on occasion, short-term loans payable in currencies other than the U.S. dollar, they are not designated as hedges under ASC Topic 815, Derivatives and Hedging. This is mainly due to the relatively short duration of the contracts, typically one to 14 days, and the frequency with which the Company enters into them. Due to the short duration of the contracts and the Company’s credit profile, the Company is generally not required to post collateral with respect to its foreign currency forward contracts. The Company's derivative contracts are executed with counterparties governed by an International Swaps and Derivatives Association agreement that includes standard netting arrangements; therefore, asset and liability positions from forward contracts and all other foreign exchange transactions with the same counterparty are net settled upon maturity.

The required tabular disclosures for derivative instruments are as follows:


		Gross Amount of Recognized Assets						Gross Amount of Offset in the Consolidated Balance Sheets						Net Amount of Assets Presented in the Consolidated Balance Sheets						Gross Amount of Recognized Assets						Gross Amount of Offset in the Consolidated Balance Sheets						Net Amount of Assets Presented in the Consolidated Balance Sheets
(in thousands)	Consolidated Balance Sheet Location	September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012		Consolidated Balance Sheet Location	March 31, 2014			December 31, 2013			March 31, 2014			December 31, 2013			March 31, 2014			December 31, 2013
Foreign currency derivative contracts	Other Current Assets	$	162		$	177		$	(73	)	$	(142	)	$	89		$	35	Other Current Liabilities	$	43		$	96		$	(43	)	$	(96	)	$	—		$	—

		Gross Amount of Recognized Liabilities						Gross Amount of Offset in the Consolidated Balance Sheets						Net Amount of Liabilities Presented in the Consolidated Balance Sheets						Gross Amount of Recognized Liabilities						Gross Amount of Offset in the Consolidated Balance Sheets						Net Amount of Liabilities Presented in the Consolidated Balance Sheets
(in thousands)	Consolidated Balance Sheet Location	September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012		Consolidated Balance Sheet Location	March 31, 2014			December 31, 2013			March 31, 2014			December 31, 2013			March 31, 2014			December 31, 2013
Foreign currency derivative contracts	Other Current Liabilities	$	(137	)	$	(142	)	$	73		$	142		$	(64	)	$	—	Other Current Liabilities	$	(124	)	$	(178	)	$	43		$	96		$	(81	)	$	(82	)

~~Table of Contents~~


			Amount of (Loss) Gain Recognized in Income on Derivative Contracts															Amount of (Loss) Gain Recognized in Income on Derivative Contracts
	Location of (Loss) Gain Recognized in Income on Derivative Contracts		Three Months Ended September 30,							Nine Months Ended September 30,						Location of (Loss) Gain Recognized in Income on Derivative Contracts		Three Months Ended March 31,
(in thousands)		2013				2012			2013				2012				2014				2013
Foreign currency derivative contracts		Foreign currency exchange gain (loss), net		$	(48	)	$	46			$	(242	)	$	755		Foreign currency exchange loss, net		$	(747	)	$	693

See Note 8,9, Fair Value Measurements, for the determination of the fair values of derivatives.

~~(8)~~

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(9) FAIR VALUE MEASUREMENTS

Fair value measurements used in the consolidated financial statements are based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

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

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

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

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



		As of March 31, 2014
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Liabilities
Foreign currency derivative contracts	Other current liabilities	$	—	$	(81	)	$	—	$	(81	)

As of September 30, 2013
(in thousands) Balance Sheet Classification Level 1 Level 2 Level 3 Total
Assets
Foreign currency derivative contracts Other current assets $ —
$ 89
$ —
$ 89
Foreign currency derivative contracts Other current liabilities $ —
$ (64 ) $ —
$ (64 )


		As of December 31, 2012									As of December 31, 2013
(in thousands)	Balance Sheet Classification	Level 1		Level 2		Level 3		Total		Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Liabilities
Foreign currency derivative contracts	Other current assets	$	—	$	35	$	—	$	35	Other current liabilities	$	—	$	(82	)	$	—	$	(82	)

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, ~~trade~~ accounts receivable, trade accounts payable, accrued expenses and ~~short-term debt~~other current obligations approximate their fair values ~~due to their short maturities.~~because of the relatively short-term maturities of these financial instruments. The carrying values of the Company’s ~~term loan due 2016 and revolving credit agreements~~long-term debt, including the current portion, approximate fair ~~values~~value because interest is primarily based on ~~the London Inter-Bank Offered Rate ("LIBOR") that resets~~LIBOR, which reset at various intervals of less than one year. The Company estimates the fair value of the convertible debentures using quoted prices in inactive markets for identical liabilities (Level 2). As of December 31, 2012, the fair value and carrying amount of the convertible debentures were $3.6 million.

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~~Contingent Consideration Liability~~

~~The contingent consideration liability relating to the Pure Commerce acquisition is recorded at fair value using a Monte Carlo simulation.~~ The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are forecasted financial results, including estimates of future revenues, gross profit, and EBITDA (Level 3). ~~As of the acquisition date, the fair value of the contingent consideration liability was~~ ~~$21.7 million. Changes in any of these inputs could result in a significantly higher or lower fair value measurement. Changes in the fair~~ ~~value of the contingent consideration liability are recorded as income or expense within operating income in our consolidated statements of operations.~~

~~During the first nine months of 2013, the Company recorded a~~ ~~$2.4 million~~foreign currency exchange gain related to this contingent consideration liability as a result of fluctuations in the value of the Australian dollar against the U.S. dollar. In the third quarter of 2013, the Company adjusted to fair value the contingent consideration liability based on its assessment that the performance targets for gross profit and EBITDA would not be met. The change in fair value resulted in the recognition of a ~~$19.3 million~~ ~~gain.~~

Although certain elements of Pure Commerce’s business plan changed during the first half of 2013, its management team had specific plans in place to achieve the performance targets. At June 30, 2013, the Company determined that the performance targets were probable of achievement because Pure Commerce’s business can experience significant impacts on results when key customers launch its services and implementation timeframes are usually short. However, as the actual results through the third quarter were realized, the Company determined that delays in implementing contracts with certain merchants and merchant acquirers and lower than expected transaction volume on certain contracts would not allow Pure Commerce to meet the minimum threshold necessary to require the Company to pay contingent consideration. This assessment was primarily due to the short one-year timeframe to achieve the performance targets and the targets’ high sensitivity to changes in performance. While these factors contributed to Pure Commerce not achieving the performance targets, they are not expected to adversely affect the fair value of Pure Commerce.

~~(9)~~(10) SEGMENT INFORMATION

~~Euronet’s~~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:

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. 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 and other value added services. Through this segment, the Company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.


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

Through the Money Transfer Segment, the Company provides global consumer-to-consumer money transfer services through a network of sending agents and Company-owned stores (primarily in North America and Europe), disbursing money transfers through a worldwide correspondent network. 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.

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~~segments.

The following tables present the Company’s reportable segment results ~~of the Company’s operations~~ for the ~~three- and nine-month periods~~three months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013:



	For the Three Months Ended March 31, 2014
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	74,605	$	185,064	$	94,000	$	(354	)	$	353,315
Operating expenses:
Direct operating costs	37,338		143,341		45,972		(313		)	226,338
Salaries and benefits	11,095		13,594		23,310		5,575			53,574
Selling, general and administrative	6,102		9,087		16,145		1,537			32,871
Depreciation and amortization	7,296		4,146		4,633		75			16,150
Total operating expenses	61,831		170,168		90,060		6,874			328,933
Operating income (expense)	$	12,774	$	14,896	$	3,940	$	(7,228	)	$	24,382



	For the Three Months Ended March 31, 2013
(in thousands)	EFT Processing		epay		Money Transfer		Corporate Services, Eliminations and Other			Consolidated
Total revenues	$	63,334	$	189,575	$	82,903	$	(168	)	$	335,644
Operating expenses:
Direct operating costs	32,912		146,657		39,672		(154		)	219,087
Salaries and benefits	9,645		14,095		20,084		4,903			48,727
Selling, general and administrative	5,848		9,667		12,347		3,141			31,003
Depreciation and amortization	8,316		4,503		4,758		92			17,669
Total operating expenses	56,721		174,922		76,861		7,982			316,486
Operating income (expense)	$	6,613	$	14,653	$	6,042	$	(8,150	)	$	19,158

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For the Three Months Ended September 30, 2013
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 83,594
$ 182,629
$ 95,276
$ (919 ) $ 360,580
Operating expenses:
Direct operating costs 36,576
142,284
45,588
(897 ) 223,551
Salaries and benefits 10,195
13,494
23,120
6,010
52,819
Selling, general and administrative 5,249
10,687
14,521
2,797
33,254
Acquisition-related contingent consideration gain (19,319 ) —
—
—
(19,319 )
Depreciation and amortization 6,273
4,036
4,530
91
14,930
Total operating expenses 38,974
170,501
87,759
8,001
305,235
Operating income (expense) $ 44,620
$ 12,128
$ 7,517
$ (8,920 ) $ 55,345

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

For the Three Months Ended September 30, 2012
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 64,888
$ 171,529
$ 80,042
$ (103 ) $ 316,356
Operating expenses:
Direct operating costs 30,075
131,999
38,394
(90 ) 200,378
Salaries and benefits 8,700
12,717
19,450
4,682
45,549
Selling, general and administrative 5,195
11,757
11,250
1,869
30,071
Depreciation and amortization 6,435
4,925
4,734
69
16,163
Total operating expenses 50,405
161,398
73,828
6,530
292,161
Operating income (expense) $ 14,483
$ 10,131
$ 6,214
$ (6,633 ) $ 24,195

For the Nine Months Ended September 30, 2013
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 219,149
$ 548,867
$ 271,536
$ (1,785 ) $ 1,037,767
Operating expenses:
Direct operating costs 104,103
424,343
130,221
(1,734 ) 656,933
Salaries and benefits 29,409
41,976
64,601
17,312
153,298
Selling, general and administrative 16,530
30,689
40,621
7,874
95,714
Acquisition-related contingent consideration gain (19,319 ) —
—
—
(19,319 )
Depreciation and amortization 22,242
12,569
13,751
276
48,838
Total operating expenses 152,965
509,577
249,194
23,728
935,464
Operating income (expense) $ 66,184
$ 39,290
$ 22,342
$ (25,513 ) $ 102,303

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For the Nine Months Ended September 30, 2012
(in thousands)
EFT
Processing
epay
Money
Transfer

Corporate
Services,
Eliminations
and Other
Consolidated
Total revenues $ 173,114
$ 514,543
$ 228,960
$ (262 ) $ 916,355
Operating expenses:
Direct operating costs 83,965
395,185
108,037
(222 ) 586,965
Salaries and benefits 24,455
38,409
56,067
15,693
134,624
Selling, general and administrative 15,128
32,563
33,578
5,469
86,738
Depreciation and amortization 18,710
15,064
14,092
271
48,137
Total operating expenses 142,258
481,221
211,774
21,211
856,464
Operating income (expense) $ 30,856
$ 33,322
$ 17,186
$ (21,473 ) $ 59,891



	Property and Equipment, net as of				Total Assets as of
(in thousands)	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
EFT Processing	$	66,372	$	64,972	$	380,268	$	347,073
epay	26,787		27,176		670,763		757,942
Money Transfer	24,167		23,768		486,671		472,390
Corporate Services, Eliminations and Other	275		314		19,458		20,710
Total	$	117,601	$	116,230	$	1,557,160	$	1,598,115

~~(10)~~(11) INCOME TAXES

The Company's effective income tax rates were 26.4% and 20.7% for the three months ended March 31, 2014 and 2013, respectively. The Company's effective tax rate for the three months ended March 31, 2014 was lower than the applicable statutory tax rate of 35% primarily because of the Company's U.S. income tax positions. The Company does not have a history of significant taxable income in the U.S., therefore, the Company has recorded a valuation allowance against its U.S. federal tax net operating loss carryforwards. Accordingly, in instances when the Company's U.S. legal entities generate pre-tax book income, no income tax expense is recognized to the extent there are net operating loss carryforwards to offset pre-tax book income.

(12) COMMITMENTS

As of ~~September 30, 2013~~March 31, 2014, the Company had $~~86.6~~95.4 million of stand-by letters of credit/bank guarantees issued on its behalf, of which $~~35.2~~47.9 million are outstanding under the revolving credit facility. The remaining stand-by letters of credit/bank guarantees are collateralized by $~~5.0~~5.2 million of cash deposits held by the respective issuing banks.

Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries. As of ~~September 30, 2013~~March 31, 2014, the Company had granted off balance sheet guarantees for cash in various ATM networks amounting to $~~15.8~~16.3 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $~~39.2~~27.6 million over the terms of the agreements with the customers.

Each of Euronet's subsidiaries, once they reach a certain size, is required under the Credit Agreement to provide a guarantee of all or a portion of the outstanding obligations under the Credit Agreement depending upon whether the subsidiary is a domestic or foreign entity.

From time to time, ~~Euronet~~the Company enters into agreements with ~~unaffiliated parties~~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 ~~September 30, 2013~~March 31, 2014, the balance of ATM network cash for which the Company was responsible was approximately $~~435~~440 million. The Company maintains insurance policies to mitigate this exposure;

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

In connection with the license of proprietary systems to customers, ~~Euronet~~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;

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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~~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

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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~~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 ~~September 30, 2013~~March 31, 2014 or December 31, ~~2012~~2013.

~~(11) INCOME TAXES~~

~~The Company's effective income tax rates were~~ ~~18.2%~~ ~~and~~ ~~32.3%~~ ~~for the three-month periods ended September 30, 2013 and 2012, respectively, and~~ ~~22.3%~~ ~~and~~ ~~34.4%~~ for the nine-month periods ended September 30, 2013 and 2012, respectively. The effective tax rates were significantly influenced by the acquisition-related contingent consideration gain, foreign currency exchange gains and losses and other non-operating gains, net in the respective periods. Excluding these items from pre-tax income, as well as the related tax effects for these items, the Company's effective tax rates were ~~32.0%~~ ~~and~~ ~~34.4%~~ ~~for the three-month periods ended September 30, 2013 and 2012, respectively, and~~ ~~29.3%~~ ~~and~~ ~~36.6%~~ ~~for the nine-month periods ended September 30, 2013 and 2012.~~

~~The Company's effective tax rate, as adjusted for the items above, for the third quarter 2013 was lower than the applicable statutory tax rate of~~ ~~35%~~ primarily because of the Company's U.S. income tax positions. The Company's effective tax rate, as adjusted for the items above, for the nine-month period ended September 30, 2013 was lower than the applicable statutory tax rate of ~~35%~~ primarily because of the Company's U.S. income tax positions and a change in the reserve for uncertain tax benefits. The Company does not have a history of significant taxable income in the U.S., therefore, the Company has recorded a valuation allowance against the tax net operating loss carryforwards. Accordingly, in instances when the Company’s U.S. legal entities generate pre-tax book income, no income tax expense is recognized to the extent there are net operating loss carryforwards to offset pre-tax book income.

~~During the first nine months of 2013, the Company recorded a~~ ~~$2.2 million~~ decrease in the reserve for uncertain tax benefits related to the closure of an income tax audit in Germany, resulting in a decrease in income tax expense for the nine-month period ended September 30, 2013. In connection with the acquisition of Pure Commerce in January 2013, the Company recorded a ~~$2.0 million~~ reserve for uncertain tax benefits in the opening balance sheet. There were no other material changes in the reserve for unrecognized tax benefits during the nine month period ended September 30, 2013.

~~(12)~~(13) LITIGATION AND CONTINGENCIES

Contingencies

~~Computer Security Breach~~ ~~- A unit of the Company's European processing business was the subject of a criminal security breach in late 2011. The affected business represents less than~~ 5% ~~of the Company's revenues, profits and transactions. Euronet took immediate steps to remediate the breach and ensure its impact was contained.~~

Certain claims arising from such breach were asserted against the Company, and it is possible that additional claims may be asserted in the future. However, the Company maintains insurance to cover the financial exposure for response costs, losses by the card issuer and fines or penalties from incidents of this nature. To date, the aggregate amount of expenses incurred and losses asserted against the Company for which the Company ultimately bore liability have been within the limits of our insurance and the only cost to the Company has been its retention amount under its insurance. The Company does not currently expect the net financial impact of expenses or losses from the breach, after insurance recovery, to be material to the consolidated results of operations or financial condition of the Company.

~~Expenses related to the breach through December 31, 2012 were~~ ~~$0.5 million, net of~~ ~~$1.9 million~~ ~~in amounts recovered from the Company's insurance carrier. For the first nine months of 2012, the Company incurred~~ ~~$0.5 million~~ ~~in expenses related to the breach, net of insurance recoveries of~~ ~~$1.7 million. No additional related expenses were incurred during the first nine months of 2013, as all losses incurred were covered by insurance.~~

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Unclaimed property compliance - ~~During the third quarter of~~In September 2013, the Company entered into a voluntary disclosure agreement ~~(“VDA”)~~ with the Secretary of State of the State of Delaware to determine compliance with Delaware unclaimed property laws. Types of property under examination include, but are not limited to, payroll checks, accounts payable checks and accounts receivable credits for the period 1996 through 2007. The total amount of exposure of this contingency is dependent upon the manner in which the State of Delaware applies its unclaimed property laws. The Company does not currently expect the outcome of this matter to have a material adverse effect on the Company's consolidated financial condition or results of ~~operations or financial condition of the Company.~~operations.

Legal Proceedings

During 2012, the Company was served with a class action lawsuit filed by a former employee alleging wage and hour violations relating to meal and rest period requirements. The Company has reached an agreement to settle this lawsuit for an immaterial amount and ~~together with~~completed the ~~plaintiffs~~settlement in ~~the case, is following court procedures to finalize the settlement. The Company expects such procedures to be completed within the next twelve months.~~2014.

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~~proceeding or regulatory findings that management believes, either individually or in the aggregate, would have a material adverse effect ~~upon~~on the Company's consolidated financial condition or results of ~~operations or financial condition of the Company.~~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.

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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 pending acquisitions;

business strategy;

government regulatory action;

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 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 potential future security breaches; 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 requirements; changes in laws and regulations affecting our business, including immigration laws; changes in our relationships with, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting Euronet; and those other 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, 2013. Our Annual Report on Form 10-K is available on the SEC's EDGAR website at www.sec.gov, and a copy may also be obtained by contacting the Company. All forward-looking statements made in this Form 10-Q speak only as of the date of this report. 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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OVERVIEW

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

~~Euronet Worldwide, Inc. and its subsidiaries (“Euronet,” the “Company,” “we,” "our" or “us”) is~~We are 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”), and card outsourcing services, card issuing and merchant acquiring services; electronic distribution of prepaid mobile airtime and other electronic payment ~~products~~products; and global consumer money transfer services. We operate in the following three segments:

The EFT Processing Segment, which processes transactions for a network of ~~17,795~~18,558 ATMs and approximately ~~68,000~~67,000 POS terminals across Europe, the Middle East and Asia Pacific. We provide 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, 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 ~~636,000~~647,000 POS terminals providing electronic processing of prepaid mobile airtime top-up services and other electronic payment products in Europe, the Middle East, Asia Pacific, ~~North America~~the United States and South America. We also provide vouchers and physical gift fulfillment services in ~~Europe and gift card distribution and processing services in most of our markets.~~Europe.

The Money Transfer Segment, which provides global consumer-to-consumer money transfer services, primarily under the brand name Ria. We offer this service through a network of sending agents, Company-owned stores (primarily in North America and Europe) and via ~~a desktop or mobile device at riamoneytransfer.com,~~the Company's website (at riamoneytransfer.com), disbursing money transfers through a worldwide correspondent network that includes approximately ~~207,000~~219,000 locations. 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.~~services and mobile top-up.

We have four processing centers in Europe, three in Asia Pacific and two in North America. We have 3031 principal offices in Europe, ten in Asia Pacific, six in North America, ~~nine in Asia Pacific,~~ three in the Middle East, two in South America and one in Africa. Our executive offices are located in Leawood, Kansas, USA. With approximately 75% 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 based on 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 23% and~~ 21% of our total consolidated revenues for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014, ~~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 dynamic currency conversion transactions, 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.

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epay Segment — Revenues in the epay Segment, which represented ~~approximately 51% and 53%~~52% of our total consolidated revenues for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014, ~~respectively,~~ are primarily derived from ~~(i)~~ commissions or processing fees received from mobile phone operators for the ~~sale~~processing and distribution of prepaid mobile airtime and ~~(ii)~~ commissions earned from the distribution of other electronic payment products, ~~gift cards,~~ vouchers, and physical gifts. Due to certain provisions in our mobile phone operator agreements, the operators have the ability to reduce the overall commission paid on top-up transactions. However, by virtue of our agreements with retailers (distributors where POS terminals are located) in certain markets, not all of these reductions are absorbed by us because we are able to pass a significant portion of the reductions to retailers. Accordingly, under certain retailer agreements, the effect is to reduce revenues and reduce our direct operating costs resulting in only a small impact on gross profit and operating income. In some markets, reductions in commissions can significantly impact our results as it may not be possible, either contractually or commercially in the concerned market, to pass a reduction in commissions to the retailers. In ~~Australia,~~ certain markets, retailers may negotiate directly with the mobile phone operators and prepaid content providers for their own commission rates, which also limits our ability to pass through reductions in commissions. Agreements with mobile operators and prepaid content providers are important to the success of our business. These agreements permit us to distribute prepaid mobile airtime and other electronic payment products to the ~~mobile operators’ customers.~~end consumer. Other electronic payment products offered by this segment include prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, gift cards, vouchers, transport payments, lottery payments, bill payment, money transfer and digital content such as music, games and software.

Money Transfer Segment — Revenues in the Money Transfer Segment, which represented ~~approximately 26%~~27% of our total consolidated revenues for ~~both~~ the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014, are primarily derived from ~~charging a~~ transaction ~~fee,~~fees, as well as the margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to consumers at retail exchange rates. We have a sending agent network in place comprised of agents, Company-owned stores, primarily in North America and Europe, and our riamoneytransfer.com website, 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. These fees are recognized as direct operating costs at the time of sale.

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 currently focused on six primary areas:

signing new outsourced ATM and POS terminal management contracts and adding ATMs to our owned network;

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

expanding value added services in our EFT Processing Segment, including the sale of dynamic currency conversion services to banks and retailers;

expanding our epay processing network and portfolio of electronic payment products;

expanding our money transfer and bill payment network; 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;

the availability of financing for expansion;

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

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our ability to renew existing contracts at profitable rates;

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

the impact of reductions in ATM interchange fees;

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 outsourcing customers. However, we cannot predict any 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. We have been able to enter into agreements under which we contribute the right to use our software in lieu of cash as our initial capital contributions to new transaction processing joint ventures. Such contributions sometimes permit us to enter new markets without significant capital investment.

epay Segment — The continued expansion and development of ~~the~~our 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 phone operators, content providers, agent financial institutions and retailers;

our ability to use existing expertise and relationships with mobile operators, 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 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 market, including consumer shifts between prepaid and postpaid services;

our market share of the retail distribution capacity;

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

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

our ability to fully recover monies collected by retailers;

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

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

our ability to take advantage of cross-selling opportunities with our Money Transfer Segment, 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 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 distributors, offer a superior product offering and demonstrate the value of a global network. In certain markets in which we operate, we believe that many of the factors that may contribute to rapid growth (growth in electronic payment products, expansion of our network of retailers and access to all mobile operators' products) remain present.

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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 U.S.;

the continuation of the trend of increased use of electronic money transfer and bill payment services among 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;

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;

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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 our epay Segment, including providing prepaid services through Ria’s 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; and

our ability to successfully expand our agent network in Europe using our Payment Services Directive license.

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. Any inability to continue to effectively manage expansion could have a material adverse effect on our business, growth, financial condition and 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.

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SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the ~~three- and nine-month periods~~three months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013 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 March 31,						Year-over-Year Change
(dollar amounts in thousands)	2013			2012			Increase (Decrease)Amount			Increase Percent		2013			2012			Increase (Decrease)Amount			Increase Percent		2014			2013			Increase (Decrease)Amount			Increase (Decrease) Percent
EFT Processing	$	83,594		$	64,888		$	18,706		29	%	$	219,149		$	173,114		$	46,035		27	%	$	74,605		$	63,334		$	11,271		18	%
epay	182,629			171,529			11,100			6	%	548,867			514,543			34,324			7	%	185,064			189,575			(4,511		)	(2	)%
Money Transfer	95,276			80,042			15,234			19	%	271,536			228,960			42,576			19	%	94,000			82,903			11,097			13	%
Total	361,499			316,459			45,040			14	%	1,039,552			916,617			122,935			13	%	353,669			335,812			17,857			5	%
Eliminations	(919		)	(103		)	(816		)	n/m		(1,785		)	(262		)	(1,523		)	n/m		(354		)	(168		)	(186		)	n/m
Total	$	360,580		$	316,356		$	44,224		14	%	$	1,037,767		$	916,355		$	121,412		13	%	$	353,315		$	335,644		$	17,671		5	%

~~______________________~~



	Operating Income (Expense) for the Three Months Ended March 31,						Year-over-Year Change
(dollar amounts in thousands)	2014			2013			Increase (Decrease)Amount			Increase (Decrease) Percent
EFT Processing	$	12,774		$	6,613		$	6,161		93	%
epay	14,896			14,653			243			2	%
Money Transfer	3,940			6,042			(2,102		)	(35	)%
Total	31,610			27,308			4,302			16	%
Corporate services, eliminations and other	(7,228		)	(8,150		)	922			(11	)%
Total	$	24,382		$	19,158		$	5,224		27	%

___________________

n/m — Not meaningful

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
(dollar amounts in thousands) 2013 2012 Increase
(Decrease)Amount Increase
Percent 2013 2012 Increase
(Decrease)Amount Increase
Percent
EFT Processing (1) $ 44,620
$ 14,483
$ 30,137
208 % $ 66,184
$ 30,856
$ 35,328
114 %
epay 12,128
10,131
1,997
20 % 39,290
33,322
5,968
18 %
Money Transfer 7,517
6,214
1,303
21 % 22,342
17,186
5,156
30 %
Total 64,265
30,828
33,437
108 % 127,816
81,364
46,452
57 %
Corporate services, eliminations and other (8,920 ) (6,633 ) (2,287 ) 34 % (25,513 ) (21,473 ) (4,040 ) 19 %
Total (1) $ 55,345
$ 24,195
$ 31,150
129 % $ 102,303
$ 59,891
$ 42,412
71 %

~~______________________~~

(1) For the three- and nine-month periods ended September 30, 2013, both operating income for our EFT Processing segment and total consolidated operating income include a $19.3 million gain related to the change in fair value of an acquisition-related contingent consideration liability. Adjusted for this gain, operating income for our EFT processing segment would have been $25.3 million and $46.9 million for the three- and nine month periods ended September 30, 2013, respectively. Additionally, adjusted for this gain, total consolidated operating income would have been $36.0 million and $83.0 million for the three and nine-month periods ended September 30, 2013, respectively.

~~Table of Contents~~

Impact of changes in foreign currency exchange rates

~~Because our~~Our revenues and local expenses are recorded in the functional currencies of our operating ~~entities,~~entities; therefore, amounts we ~~earned for~~earn outside the ~~third~~ ~~quarter~~U.S. are negatively impacted by the stronger U.S. dollar and ~~first nine months~~ of ~~2013~~ ~~reflected~~positively impacted by the ~~impact of changes in currency values relative to the~~weaker U.S. dollar. Considering the results by country and the associated functional currency, our consolidated operating income for the first quarter of 2014 was not significantly influenced by the changes in foreign currency exchange rates when compared to the ~~third quarter and first nine-months~~same period of ~~2012.~~2013. To provide further perspective on the impact of foreign currency exchange rates, the following table shows the changes in ~~currency~~ values relative to the U.S. dollar ~~from~~for the ~~third~~first quarter ~~and first nine months~~ of ~~2012~~2014 compared to the same ~~periods~~period of 2013 ~~for~~of the currencies of the countries ~~and regions~~ in which we have our most significant operations:

Average Translation Rate Average Translation Rate
Three Months Ended September 30, Increase
(Decrease)Percent Nine Months Ended September 30, Increase
(Decrease)Percent
Currency (dollars per foreign currency) 2013 2012 2013 2012
Australian dollar $ 0.9155
$ 1.0391
(12 )% $ 0.9812
$ 1.0349
(5 )%
Brazilian real $ 0.4373
$ 0.4936
(11 )% $ 0.4740
$ 0.5237
(9 )%
British pound $ 1.5517
$ 1.5808
(2 )% $ 1.5464
$ 1.5784
(2 )%
euro $ 1.3256
$ 1.2520
6 % $ 1.3174
$ 1.2825
3 %
Hungarian forint $ 0.0045
$ 0.0044
2 % $ 0.0044
$ 0.0044
— %
Indian rupee $ 0.0161
$ 0.0182
(11 )% $ 0.0175
$ 0.0189
(7 )%
Polish zloty $ 0.3126
$ 0.3033
3 % $ 0.3140
$ 0.3054
3 %



	Average Translation Rate Three Months Ended March 31,				Increase (Decrease)Percent
Currency (dollars per foreign currency)	2014		2013		Increase (Decrease)Percent
Australian dollar	$	0.8961	$	1.0385	(14	)%
Brazilian real	$	0.4236	$	0.5010	(15	)%
British pound	$	1.6551	$	1.5515	7	%
euro	$	1.3703	$	1.3205	4	%
Hungarian forint	$	0.0045	$	0.0045	—	%
Indian rupee	$	0.0162	$	0.0185	(12	)%
Polish zloty	$	0.3278	$	0.3183	3	%

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COMPARISON OF OPERATING RESULTS FOR THE ~~THREE- AND NINE-MONTH PERIODS~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2013~~MARCH 31, 2014 AND ~~2012~~2013

EFT PROCESSING SEGMENT

The following table presents the results of operations for the ~~three- and nine-month periods~~three months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013 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 March 31,				Year-over-Year Change
(dollar amounts in thousands)	2013			2012		Increase (Decrease)Percent			Increase (Decrease)Percent		2013			2012		Increase Amount			Increase Percent		2014		2013		Increase (Decrease)Amount			Increase (Decrease)Percent
Total revenues	$	83,594		$	64,888	$	18,706		29	%	$	219,149		$	173,114	$	46,035		27	%	$	74,605	$	63,334	$	11,271		18	%
Operating expenses:
Direct operating costs	36,576			30,075		6,501			22	%	104,103			83,965		20,138			24	%	37,338		32,912		4,426			13	%
Salaries and benefits	10,195			8,700		1,495			17	%	29,409			24,455		4,954			20	%	11,095		9,645		1,450			15	%
Selling, general and administrative	5,249			5,195		54			1	%	16,530			15,128		1,402			9	%	6,102		5,848		254			4	%
Acquisition-related contingent consideration gain	(19,319		)	—		(19,319		)	n/m		(19,319		)	—		(19,319		)	n/m
Depreciation and amortization	6,273			6,435		(162		)	(3	)%	22,242			18,710		3,532			19	%	7,296		8,316		(1,020		)	(12	)%
Total operating expenses	38,974			50,405		(11,431		)	(23	)%	152,965			142,258		10,707			8	%	61,831		56,721		5,110			9	%
Operating income	$	44,620		$	14,483	$	30,137		208	%	$	66,184		$	30,856	$	35,328		114	%	$	12,774	$	6,613	$	6,161		93	%
Transactions processed (millions)	304			304		—			n/m		877			865		12			1	%	301		276		25			9	%
ATMs as of September 30,	17,795			17,370		425			2	%	17,795			17,370		425			2	%
ATMs as of March 31,																					18,558		17,949		609			3	%
Average ATMs	17,595			17,295		300			2	%	17,671			16,414		1,257			8	%	18,411		17,723		688			4	%

~~n/m — Not meaningful.~~

~~Table of Contents~~

Revenues

Our revenues for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 increased when compared to the same ~~periods~~period of ~~2012~~2013, primarily due to an increase in the number of transactions processed in Poland as a result of an increase in ATMs under management, an increase in ~~transactions processed on brown label~~the number of ATMs in India, an increase in demand for dynamic currency conversion ("DCC") ~~and other valued added services~~ on both our ATMs and POS devices under management and ~~the impact of DCC~~growth in revenues ~~earned on POS devices~~ from ~~our acquisition of Pure Commerce Pty Limited ("Pure Commerce")~~debit and credit card outsourcing services in ~~January 2013.~~Greece.

Average monthly revenues per ATM were ~~$1,584~~$1,351 for the ~~third~~first quarter ~~and $1,378 for the~~ ~~first nine months~~of ~~2013~~2014 compared to ~~$1,251~~$1,191 for the ~~third~~ ~~quarter and $1,172 for the~~ ~~first nine months~~same period of ~~2012~~2013. Revenues per transaction were ~~$0.27 for the~~ ~~third~~ ~~quarter and~~ $0.25 for the first ~~nine months~~ quarter of ~~2013~~2014 compared to ~~$0.21~~$0.23 for the ~~third~~ ~~quarter and $0.20 for the~~ ~~first nine months~~same period of ~~2012~~2013. These increases were primarily the result of revenue growth from DCC ~~and value added services, both of~~on our ATMs under management, which ~~earn~~earns higher revenues per transaction than other ATM services and the cancellation of an ATM driving and managed services contract in ~~India.~~India during the second quarter of 2013. The revenues per ATM and per transaction earned under the canceled contract were significantly lower than other ATM services.

Direct operating costs

Direct operating costs consist primarily of site rental fees, cash delivery costs, cash supply costs, maintenance, insurance, telecommunications, the cost of 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. Direct operating costs increased infor the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013, primarily due to an increase in the number of ATMs under management in Poland and ~~the acquisition of Pure Commerce.~~India, an increase in demand for DCC transactions on POS devices and growth in revenues from debit and credit card outsourcing services in Greece.

Gross profit

Gross profit, which is calculated as revenues less direct operating costs, was ~~$47.0~~$37.3 million for the ~~third~~first quarter ~~and $115.0~~of 2014 compared to $30.4 million for the ~~first nine months~~same period of 2013 ~~compared to $34.8 million for the~~ ~~third~~ ~~quarter and $89.1 million for the~~ ~~first nine months~~ of ~~2012~~. This increase was primarily due to the growth in revenues from DCC ~~and value added services, including revenues from DCC earned on POS devices from our acquisition of Pure Commerce, the~~transactions, an increase in ATMs under management in Poland and ~~the increase~~growth in ~~transactions processed on brown label ATMs~~revenues from debit and credit card outsourcing services in ~~India.~~Greece. Gross profit as a percentage of revenues (“gross margin”) was ~~56.2%~~50.0% for the ~~third~~first quarter ~~and 52.5% for the~~ ~~first nine months~~of ~~2013~~2014 compared to ~~53.7%~~48.0% for the ~~third~~ ~~quarter and 51.5% for the~~ ~~first nine months~~same period of ~~2012~~2013. This increase was primarily due to the increase in revenues earned from DCC ~~and value added services discussed above, both of~~on our ATMs under management, which ~~earn~~earns a higher gross profit than other services.

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Salaries and benefits

The increase in salaries and benefits for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was primarily due to ~~adding employees~~additional headcount to support the ~~growth~~increase in the number of ATMs under management ~~along with~~and the ~~impact of~~growth in DCC transactions on our ~~acquisition of Pure Commerce.~~POS devices. As a percentage of revenues, these costs decreased to ~~12.2%~~14.9% for the ~~third~~first quarter ~~and 13.4%~~of 2014 from 15.2% for the ~~first nine months~~same period of 2013 ~~from 13.4% for the~~ ~~third~~ ~~quarter and 14.1% for the~~ ~~first nine months~~ of ~~2012~~. This decrease was primarily due to the growth in revenues earned from DCC ~~and value added services~~transactions on our ATMs under management, which require minimal incremental support costs.

Selling, general and administrative

The increase in selling, general and administrative expenses for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 ~~compared to the same periods of~~ ~~2012~~ was primarily due to the impact of our acquisition of Pure Commerce, partly offset by a decrease in bad debt expense due to the favorable resolution of a specific dispute. The increase for the first nine months of 2013 compared to the same period of ~~2012~~2013 was ~~also~~primarily due to anincreased support costs as a result of the increase in ~~professional expenses during~~ the ~~first half~~number of ~~2013.~~ATMs under management and growth in DCC transactions on POS devices. As a percentage of revenues, these expenses decreased to ~~6.3%~~8.2% for the ~~third~~first quarter ~~and 7.5%~~of 2014 from 9.2% for the ~~first nine months~~same period of 2013 ~~from 8.0% for the~~ ~~third~~ ~~quarter and 8.7% for the~~ ~~first nine months~~ of ~~2012~~, primarily due to the growth in revenues earned from DCC ~~and value added services~~transactions on our ATMs under management, which require minimal incremental support costs.

~~Table of Contents~~

~~Acquisition-related contingent consideration gain~~

In the third quarter of 2013, the Company adjusted to fair value the contingent consideration liability based on its assessment that the performance targets for gross profit and EBITDA would not be met. The change in fair value resulted in the recognition of a $19.3 million gain.

Depreciation and amortization

~~Depreciation~~The decrease in depreciation and amortization expense ~~decreased~~ for the ~~third~~first quarter of ~~2013~~2014 compared to the same period of ~~2012,~~2013 was primarily due to ~~final purchase accounting true-up adjustments to~~ certain ~~acquired intangible~~software assets ~~related to the acquisition of Pure Commerce,~~becoming fully amortized during 2013, partly offset by an increase in depreciation ~~of ATMs under management. Depreciation and amortization expense increased for the~~ ~~first nine months~~ of ~~2013~~ ~~compared to the same period of~~ ~~2012, primarily due to the amortization of intangible assets related to the acquisition of Pure Commerce recorded during the first half of 2013 and an increase in deprecation of~~on our ATMs under management. As a percentage of revenues, depreciation and amortization expense decreased to ~~7.5%~~9.8% for the ~~third~~first quarter ~~and 10.1%~~of 2014 from 13.1% for the ~~first nine months~~same period of 2013 ~~from 9.9% for the third quarter and 10.8% for the first nine months of~~ ~~2012~~, ~~mainly~~primarily due to the growth in revenues from DCC ~~and value added services~~transactions on our ATMs under ~~management. The decrease for the third quarter of 2013 compared to the same period of 2012 is also due to~~management and the purchase accounting true-up adjustments discussed above.

Operating income

~~Operating income increased for the~~ ~~third~~ ~~quarter and first nine months of~~ ~~2013~~ ~~compared to the same periods of~~ ~~2012~~, primarily due to the acquisition-related contingent consideration gain, an increase in the number of ATMs under management, an increase in the number of transactions processed on brown label ATMs in India, growth in revenues earned from DCC and value added services and the decrease in bad debt expense. The increase in operating income for the first ~~nine months~~ quarter of ~~2013~~2014 compared to the same period of ~~2012~~2013 was ~~partly offset by~~primarily due to the increase in the number of ATMs discussed above, growth in revenues earned from DCC transactions, growth in revenues from debit and credit card management services in Greece and the decrease in amortization ~~expense. Excluding the acquisition-related contingent consideration gain, operating~~expense related to software assets. Operating income as a percentage of revenues (“operating margin”) increased to ~~30.3%~~17.1% for the ~~third~~first quarter ~~and 21.4%~~of 2014 from 10.4% for the ~~first nine months~~same period of 2013 ~~from 22.3% for the~~ ~~third~~ ~~quarter and 17.8% for the~~ ~~first nine months~~ of ~~2012~~ and operating income per transaction increased to ~~$0.08~~$0.04 for the ~~third~~first quarter ~~and $0.05~~of 2014 from $0.02 for the ~~first nine months~~same period of ~~2013~~ ~~from $0.05 for the third quarter and $0.04 for the first nine months of 2012. Theses~~2013. These increases were primarily due to ~~the increase~~growth in revenues earned from DCC ~~and value added services~~ on our ATMs under management.

~~Table of Contents~~

EPAY SEGMENT

The following table presents the results of operations for the three~~- and nine-month periods~~ months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013 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 March 31,				Year-over-Year Change
(dollar amounts in thousands)	2013		2012		Increase (Decrease)Amount			Increase (Decrease)Percent		2013		2012		Increase (Decrease)Amount			Increase (Decrease)Percent		2014		2013		Increase (Decrease) Amount			Increase (Decrease) Percent
Total revenues	$	182,629	$	171,529	$	11,100		6	%	$	548,867	$	514,543	$	34,324		7	%	$	185,064	$	189,575	$	(4,511	)	(2	)%
Operating expenses:
Direct operating costs	142,284		131,999		10,285			8	%	424,343		395,185		29,158			7	%	143,341		146,657		(3,316		)	(2	)%
Salaries and benefits	13,494		12,717		777			6	%	41,976		38,409		3,567			9	%	13,594		14,095		(501		)	(4	)%
Selling, general and administrative	10,687		11,757		(1,070		)	(9	)%	30,689		32,563		(1,874		)	(6	)%	9,087		9,667		(580		)	(6	)%
Depreciation and amortization	4,036		4,925		(889		)	(18	)%	12,569		15,064		(2,495		)	(17	)%	4,146		4,503		(357		)	(8	)%
Total operating expenses	170,501		161,398		9,103			6	%	509,577		481,221		28,356			6	%	170,168		174,922		(4,754		)	(3	)%
Operating income	$	12,128	$	10,131	$	1,997		20	%	$	39,290	$	33,322	$	5,968		18	%	$	14,896	$	14,653	$	243		2	%
Transactions processed (millions)	269		277		(8		)	(3	)%	829		815		14			2	%	280		278		2			1	%

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Revenues

~~The increase in revenues~~Revenues decreased slightly for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 ~~was~~, primarily due to ~~an increase~~a decrease in the number of prepaid mobile transactions processed in Australia and Brazil and a decrease in the ~~U.S., increased demand for non-mobile products in Germany, an increase in voucher redemptions and~~number of physical gift fulfillments at our cadooz ~~subsidiary, and the impact of our acquisition of ezi-pay Limited ("ezi-pay") in November 2012.~~subsidiary. These ~~increases~~decreases were ~~partly~~partially offset by ~~revenue declines~~increases in ~~Australia~~the number of non-mobile transactions processed in Germany and the U.K. ~~as a~~The decrease in revenues for Australia was the result of increased competitive pressures and certain mobile operators modifying their distribution strategies to drive consumer demand for top-up services to on-line or mobile device channels. The decrease in revenues in Brazil was due to changes in certain mobile operators' distribution strategies, which limited our ability to distribute certain products within certain markets in Brazil. The decrease in physical gift fulfillments at our cadooz subsidiary was the result of fewer customer orders during the period.

We currently expect most of our future revenue growth to be derived ~~from:~~from, (i) additional electronic payment products sold over the base of POS terminals, (ii) valued added services, (iii) developing markets or markets in which there is organic growth in the electronic top-up sector overall, and (iv) acquisitions, if available and commercially appropriate.

Revenues per transaction ~~were $0.68 for the~~ ~~third~~ ~~quarter and~~decreased to $0.66 for the first ~~nine months~~ quarter of 2014 from $0.68 for the same period of 2013 ~~compared to $0.62 for the~~ ~~third~~ ~~quarter and $0.63 for the~~ ~~first nine months~~ of ~~2012. The increase in revenues per transaction was mainly~~, primarily due to an increase in transactions processed at our cadooz subsidiary, where revenues are recorded at gross value, in contrast to our other electronic payment products which are recorded at net value, and other non-mobile products. These increases were partly offset by a shiftgrowth in the ~~mix~~number of transactions ~~particularly due to growth~~processed in India, where revenues per transaction are considerably lower than average, and a decrease in ~~transactions processed at our ATX subsidiary.~~the average commission earned per transaction in Australia and Brazil. The decrease in ~~the number of transactions processed for the third quarter of 2013 compared to the same period of 2012, and partial~~revenues per transaction was partially offset toby the increase in the number of non-mobile transactions processed in Germany and the U.K., for ~~the first nine months of 2013 compared to the same period of 2012, was due to a decrease in transactions processed at our ATX subsidiary. At our ATX subsidiary and in India~~which we ~~provide only~~generally earn higher revenues per transaction processing services without significant direct costs and other operating costs related to installing and managing terminals. Therefore, the revenues we recognize from these transactions are a fraction of those recognized on average transactions, but with strong contribution to gross profit.than mobile.

Direct operating costs

Direct operating costs in ~~the~~our epay Segment include the commissions we pay to retail merchants for the distribution and sale of prepaid mobile airtime and other prepaid products, ~~as well as~~ expenses required to operate POS terminals and the cost of vouchers sold and physical gifts fulfilled. The ~~increase~~decrease in direct operating costs for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods of~~ ~~2012~~ was primarily due to the growth in transactions processed in the U.S. and Germany, increased voucher redemptions and physical gifts fulfilled at our cadooz subsidiary, increased commissions costs in Brazil, and the impact of our acquisition of ezi-pay. These increases were partly offset by the decrease in the number of transactions processed in Australia and the U.K.

~~Table of Contents~~

~~Gross profit~~

~~Gross profit, which represents revenues less direct costs, was $40.3 million for the~~ ~~third~~ ~~quarter and $124.5 million for the~~ ~~first nine months~~period of 2013 ~~compared to $39.5 million for~~was the ~~third~~ ~~quarter and $119.4 million for the~~ ~~first nine months~~result of ~~2012~~. The increase in gross profit was primarily due to the increase in transactions processed in Germany (mainly from increased demand for non-mobile products), the U.S. and at our cadooz subsidiary, along with the impact of our acquisition of ezi-pay. These increases were partly offset by thea decrease in transactions processed in Australia and ~~at our ATX subsidiary,~~Brazil and ~~the increase~~a decrease in commission costs in Brazil, as a result of a larger percentage of transactions being conducted through large retailers. Gross profit per transaction increased slightly to $0.15 for the third quarter of 2013 from $0.14 for the third quarter of 2012, primarily due tophysical gift fulfillments, partly offset by the growth in ~~revenues at our cadooz subsidiary.~~ transactions processed in Germany and U.K.

Gross profit

Gross profit ~~per transaction~~ was ~~unchanged at $0.15~~$41.8 million for the first quarter of 2014 compared to $42.9 million for the same period of 2013. Gross margin decreased slightly to 22.5% for the first ~~nine months~~quarter of ~~2013 and 2012.~~2014 from 22.6% for the same period of 2013. The decrease in gross profit was the result of the decrease in revenues discussed above.

Salaries and benefits

The ~~increase~~decrease in salaries and benefits for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was primarily due to ~~an increase~~lower headcount in ~~staff in Germany, the U.S.~~certain markets and ~~at our cadooz subsidiary to support the increases in transactions processed discussed above and the impact of our acquisition of ezi-pay. These increases were partly offset by~~ a decrease in ~~salaries and benefits in Brazil in response to~~bonus expense as a result of the decrease in ~~revenues.~~revenues discussed above. As a result, these expenses, as a percentage of revenues, ~~salaries and benefits was unchanged at 7.4% for both the third quarter of 2013 and 2012 and increased~~decreased slightly to ~~7.6%~~7.3% for the first ~~nine months~~quarter of ~~2013~~2014 from ~~7.5%~~7.4% for the same period of ~~2012.~~2013.

Selling, general and administrative

The decrease in selling, general and administrative expenses for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was primarily due to a decrease in ~~professional fees, partly offset by the impact~~bad debt expense and risk management costs. As a result, these expenses, as a percentage of ~~our acquisition of ezi-pay. Additionally, the decrease~~revenues, decreased slightly to 4.9% for the first ~~nine months~~ quarter of ~~2013 compared to~~2014 from 5.1% for the same period of ~~2012 was due to a decrease in bad debt expense during the first half of~~ 2013. ~~As a percentage of revenues, selling, general and administrative expenses decreased to 5.9% for the~~ ~~third~~ ~~quarter and 5.6% for the first nine months of~~ ~~2013~~ ~~from 6.9% for the~~ ~~third~~ ~~quarter and 6.3% for the first nine months of~~ ~~2012, primarily due to the decrease in professional fees and the increase in revenues in the U.S., in Germany, and at our cadooz subsidiary, which did not require similar increases in support costs.~~

Depreciation and amortization

Depreciation and amortization expense primarily represents ~~amortization of acquired intangible assets and the~~ depreciation of POS terminals we install in retail ~~stores.~~stores and the amortization of acquired intangible assets. Depreciation and amortization expense decreased for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 compared to the same ~~periods of~~ ~~2012. As a percentage of revenues, these expenses decreased to 2.2% for the~~ ~~third~~ ~~quarter and 2.3% for the first nine months~~period of 2013 ~~from 2.9% for both the~~ ~~third~~ ~~quarter and first nine months of~~ ~~2012. These decreases were the result of~~, primarily due to certain acquired intangible assets becoming fully amortized during ~~2012 and~~the first quarter of ~~2013, partly offset by~~2013. As a result, these expenses, as a percentage of revenues, decreased slightly to 2.2% for the ~~impact~~first quarter of ~~our acquisition~~2014 from 2.4% for the same period of ~~ezi-pay.~~2013.

Operating income

Operating income increased slightly to $14.9 million for the ~~third~~first quarter ~~and first nine months~~ of ~~2013 compared to~~2014 from $14.7 million for the same ~~periods~~period of ~~2012,~~2013, primarily due to the ~~growth~~decreases in ~~transactions processed in Germany~~salaries and ~~the U.S., along with the operating income from the acquisition ezi-pay~~benefits, bad debt expense, risk management costs and ~~the decrease in~~ amortization expense ~~and professional fees. The increase~~exceeding the decline in gross profit discussed above. As a result, operating margin increased slightly to 8.0% for the first ~~nine months~~quarter of ~~2013 compared to~~2014 from 7.7% for the same period of 2012 was also due to an increase in transactions processed at our cadooz subsidiary and the decrease in bad debt expense. These increases were partly offset by declines in revenues and transactions processed in Australia and increased commission costs in Brazil. Operating margin was 6.6% for the third quarter and 7.2% for the first nine months of 2013 compared to 5.9% for the third quarter and 6.5% for the first nine months of 2012. This increase was primarily due to the increase in revenues discussed above, along with the decrease in amortization expense, partly offset by increased commission costs in Brazil.2013. Operating income per transaction ~~increased to~~was unchanged at $0.05 for both the ~~third~~first quarter of 2014 and ~~first nine months of 2013 from $0.04 for the same periods of 2012.~~2013.

2523

Table of Contents

MONEY TRANSFER SEGMENT

The following ~~tables present~~table presents the results of operations for the ~~three- and nine-month periods~~three months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013 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 March 31,				Year-over-Year Change
(dollar amounts in thousands)	2013		2012		Increase (Decrease)Amount			Increase (Decrease)Percent		2013		2012		Increase (Decrease)Amount			Increase (Decrease)Percent		2014		2013		Increase (Decrease)Amount			Increase (Decrease)Percent
Total revenues	$	95,276	$	80,042	$	15,234		19	%	$	271,536	$	228,960	$	42,576		19	%	$	94,000	$	82,903	$	11,097		13	%
Operating expenses:
Direct operating costs	45,588		38,394		7,194			19	%	130,221		108,037		22,184			21	%	45,972		39,672		6,300			16	%
Salaries and benefits	23,120		19,450		3,670			19	%	64,601		56,067		8,534			15	%	23,310		20,084		3,226			16	%
Selling, general and administrative	14,521		11,250		3,271			29	%	40,621		33,578		7,043			21	%	16,145		12,347		3,798			31	%
Depreciation and amortization	4,530		4,734		(204		)	(4	)%	13,751		14,092		(341		)	(2	)%	4,633		4,758		(125		)	(3	)%
Total operating expenses	87,759		73,828		13,931			19	%	249,194		211,774		37,420			18	%	90,060		76,861		13,199			17	%
Operating income	$	7,517	$	6,214	$	1,303		21	%	$	22,342	$	17,186	$	5,156		30	%	$	3,940	$	6,042	$	(2,102	)	(35	)%
Transactions processed (millions)	8.9		8.0		0.9			11	%	25.9		22.2		3.7			17	%	8.8		8.1		0.7			9	%

Revenues

The increase in revenues for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was primarily due to an increase in the number of transactions processed and growth in revenues from other products such as mobile top-up, check cashing, bill payment and money order transactions. The increase in transactions processed was driven by a ~~17% and 19% increase in money transfers, including a 17% and 22% increase in transfers from the U.S. and a 18% and 14% increase in transfers from non-U.S. markets for the~~ ~~third~~ ~~quarter and~~ ~~first nine months~~ of ~~2013~~ ~~compared to the same periods of 2012, respectively. The~~12% increase in the number of money transfers processed, ~~from both the U.S. and non-U.S. markets was due to the expansion of~~mostly driven by a 10% growth in our agent and correspondent payout ~~networks.~~networks in both the U.S. and non U.S. markets. Also contributing to the increase in revenues was an 18% increase in check cashing and bill payment transactions processed. Offsetting the growth in transactions processed was the discontinuation of a high volume, low revenue per transaction product in Spain.

Revenues per transaction increased to ~~$10.71~~$10.68 for the ~~third~~first quarter ~~and $10.48~~of 2014 from $10.22 for the ~~first nine months~~same period of 2013 ~~from $10.01 for the~~ ~~third~~ ~~quarter and $10.31 for the first nine months of~~ ~~2012. The increase is~~, primarily due to ~~the growth rate of money transfer transactions exceeding the growth rate of non-money transfer services, which earn higher revenues per transaction than non-money transfer services and the impact of~~ the euro strengthening against the U.S. dollar.

Direct operating costs

Direct operating costs in the Money Transfer Segment primarily represent 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 in the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was primarily due to the growth in the number of money transfer transactions processed.

Gross profit

Gross profit, which represents revenues less direct costs, was ~~$49.7~~$48.0 million for the ~~third~~first quarter ~~and $141.3~~of 2014 compared to $43.1 million for the first ~~nine months~~ quarter of 2013 ~~compared to $41.6 million for the~~ ~~third~~ ~~quarter and $120.9 million for the~~ ~~first nine months~~ of ~~2012~~. The increase in gross profit was primarily due to the growth in money transfer transactions and other services such as mobile top-up, check cashing, bill payment and money order transactions. Gross margin ~~increased slightly~~decreased to ~~52.2%~~51.1% for the ~~third~~first quarter of ~~2013~~2014 from ~~52.0% in~~52.1% for the same period of ~~2012 and decreased to 52.0% for the~~ ~~first nine months~~ of 2013, ~~from 52.8% in the same period of 2012. The decrease for the first nine months of 2013 compared to the same period of 2012 was~~ primarily due to an increase in ~~the percentage of transactions processed to U.S. locations during the first half of 2013, which earn lower revenues and gross profit per transaction than non-U.S. locations.~~agent commission rates in certain corridors.

~~Table of Contents~~

Salaries and benefits

The increase in salaries and benefits for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was primarily due to an increase in headcount to support the expansion of our operations both in the ~~U.S~~U.S. and internationally and ~~support costs incurred to launch~~the development of our ~~on-line~~online money transfer service. As a percentage of revenues, salaries and benefits ~~was unchanged at 24.3%~~increased to 24.8% for ~~both~~ the ~~third~~first quarter of ~~2013 and 2012. As a percentage of revenues, salaries and benefits decreased to 23.8%~~2014 from 24.3% for the first ~~nine months~~quarter of ~~2013~~ ~~from 24.5% for the~~ ~~first nine months~~ of ~~2012~~.2013. This ~~decrease~~increase was primarily due to costs incurred to support the ~~growth in revenues from~~development of our online money ~~transfers processed exceeding the incremental support costs during the first half of 2013.~~transfer service.

Selling, general, and administrative

~~Selling,~~The increase in selling, general and administrative expenses ~~increased~~ for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013, was primarily due to ~~increased~~the write-down of certain customer acquisition costs, an increase in professional fees, including acquisition-related costs, an increase in bad debt expense and additional expenditures we incurred to support the expansion of our operations and products, both in the U.S. and ~~internationally and an increase in professional fees.~~internationally. As a result, these expenses as a percentage of revenues, ~~selling, general and administrative expenses~~ increased to ~~15.2%~~17.2% for the ~~third~~first quarter ~~and 15.0%~~of 2014 from 14.9% for the first ~~nine months~~quarter of 2013 ~~from 14.1% for the third quarter and 14.7% for the first nine months~~.

Table of ~~2012. This increase was primarily due to the growth rate of support costs exceeding the growth rate of money transfer revenues and the impact of increased professional fees and legal expenses.~~Contents

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. For the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014, depreciation and amortization decreased slightly compared to the same ~~periods~~period of ~~2012~~2013., primarily due to certain acquired intangible assets becoming fully amortized during the first quarter of 2013. As a percentage of revenues, depreciation and amortization decreased to ~~4.8%~~4.9% for the ~~third~~first quarter ~~and 5.1%~~of 2014 from 5.7% for the ~~first nine months~~same period of 2013 ~~from 5.9% for the~~ ~~third~~ ~~quarter and 6.2% for the first nine months of~~ ~~2012. These decreases were primarily due to certain acquired intangibles that became fully amortized in the first quarter of 2013.~~

~~Operating income~~

~~Operating income increased by 21.0% for the~~ ~~third~~ ~~quarter and 30.0% for the first nine months of~~ ~~2013~~ ~~compared to the same periods of~~ ~~2012~~, primarily due to the ~~growth~~increase in ~~transactions processed and~~revenues discussed above, along with the decrease in amortization expense. ~~These increases were partly offset by the increase~~

Operating income

The decrease in ~~professional fees. As a result,~~ operating ~~margin increased to 7.9% for the~~ ~~third~~ ~~quarter and 8.2%~~income for the first ~~nine months~~quarter of 2014 compared to the same period of 2013 ~~from 7.8% for the~~ ~~third~~ ~~quarter and 7.5% for the first nine months of~~ ~~2012. Operating income per transaction increased to $0.84 for the~~ ~~third~~ ~~quarter and $0.86 first nine months of~~ ~~2013~~ ~~from $0.78 for the~~ ~~third~~ ~~quarter and $0.77 for the first nine months of~~ ~~2012~~,was primarily due to the write-down of certain customer acquisition costs, an increase in professional fees, an increase in bad debt expense and an increase in salaries and benefits related to our online money transfer service, partly offset by revenues earned from the growth in the number of money ~~transfers processed discussed above,~~transfer transactions processed. As a result, operating margin decreased to 4.2% for thefirst quarter of 2014 from 7.2% for the same period of 2013 and operating income per transaction decreased to $0.45 for the first quarter of 2014 from $0.73 for the same period of 2013. The decrease in ~~amortization expense and the impact of~~operating income per transaction was partly offset by the euro strengthening against the U.S. dollar.

~~Table of Contents~~

CORPORATE SERVICES

The following table presents the operating expenses for the three~~- and nine-month periods~~ months ended ~~September 30, 2013~~March 31, 2014 and ~~2012~~2013 for Corporate Services:



	Three Months Ended March 31,				Year-over-Year Change
(dollar amounts in thousands)	2014		2013		Increase (Decrease) Amount			Increase (Decrease) Percent
Salaries and benefits	$	5,575	$	4,903	$	672		14	%
Selling, general and administrative	1,578		3,155		(1,577		)	(50	)%
Depreciation and amortization	75		92		(17		)	n/m
Total operating expenses	$	7,228	$	8,150	$	(922	)	(11	)%

________________

Three Months Ended
September 30, Year-over-Year Change Nine Months Ended
September 30, Year-over-Year Change
(dollar amounts in thousands) 2013 2012 Increase Amount Increase Percent 2013 2012 Increase Amount Increase Percent
Salaries and benefits $ 6,010
$ 4,682
$ 1,328
28 % $ 17,312
$ 15,693
$ 1,619
10 %
Selling, general and administrative 2,819
1,882
937
50 % 7,925
5,509
2,416
44 %
Depreciation and amortization 91
69
22
32 % 276
271
5
2 %
Total operating expenses $ 8,920
$ 6,633
$ 2,287
34 % $ 25,513
$ 21,473
$ 4,040
19 %
n/m — Not meaningful

Corporate operating expenses

Overall, operating expenses for Corporate Services ~~increased~~decreased for the ~~third~~first quarter ~~and first nine months~~ of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013, primarily due to ~~an increase~~a decrease in ~~salaries and benefits and selling, general and administrative expenses. The increase in salaries and benefits was primarily due to~~professional fees, partly offset by an increase in share-based compensation expense. The increase in share-based compensation expense ~~and bonus expense, related~~was due to improved results. The increases in selling, general and administrative expenses was primarily due to an increase in professional fees and legal contingency accruals. For the third quarter and first nine months of 2013 comparedresults relative to the ~~same periods~~respective incentive compensation performance target.

Table of ~~2012, depreciation and amortization expense increased slightly.~~Contents

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 March 31,						Year-over-Year Change
(dollar amounts in thousands)	2013			2012			Increase (Decrease) Amount			Decrease Percent		2013			2012			Increase (Decrease) Amount			Decrease Percent		2014			2013			Increase (Decrease) Amount			Decrease Percent
Interest income	$	527		$	877		$	(350	)	(40	)%	$	1,438		$	3,493		$	(2,055	)	(59	)%	532			494			38			n/m
Interest expense	(2,938		)	(5,483		)	2,545			(46	)%	(8,372		)	(16,542		)	8,170			(49	)%	(1,988		)	(2,859		)	871			(30	)%
Other gains (losses), net	2,809			(25		)	2,834			n/m		2,397			4,146			(1,749		)	n/m
Foreign currency exchange gain (loss), net	2,899			1,419			1,480			n/m		2,658			(1,237		)	3,895			n/m
Foreign currency exchange loss, net																							(1,269		)	(1,701		)	432			(25	)%
Income from unconsolidated affiliates	—			185			(185		)	n/m		260			795			(535		)	(67	)%	—			124			(124		)	n/m
Other income (expense), net	$	3,297		$	(3,027	)	$	6,324		n/m		$	(1,619	)	$	(9,345	)	$	7,726		n/m
Other expense, net																							$	(2,725	)	$	(3,942	)	$	1,217		n/m

________________

n/m — Not ~~meaningful.~~

~~Interest income~~

~~The decrease in interest income for the~~ ~~third~~ ~~quarter and first nine months of~~ ~~2013~~ ~~compared to the same periods of~~ ~~2012~~ ~~was primarily due to less interest earned in Australia and Brazil, as a result of holding less cash in interest earning bank accounts due to increased working capital requirements.~~meaningful

Interest expense

The decrease in interest expense for the ~~third~~first quarter ~~and~~ ~~first nine months~~of ~~2013~~2014 compared to the same ~~periods~~period of ~~2012~~2013 was ~~primarily related to~~ the ~~Company's repurchase~~result of ~~$167.9 million of our convertible debentures in October 2012. This decrease was partly offset by an increase in amounts~~lower borrowings outstanding under ~~the~~our revolving credit facility during the period.~~first nine months~~ ~~of 2013, primarily due to borrowings to fund a portion of the convertible debenture repurchase during the fourth quarter of 2012.~~

~~Table of Contents~~

~~Other gains (losses), net~~

In July 2013, the Company completed the sale of its 40% equity method investment in epay Malaysia, which resulted in the recognition of a $2.8 million gain. In the first half of 2013, the Company recorded a $0.4 million impairment charge to an investment in an unconsolidated subsidiary.

In January 2012, our acquisition of the remaining 51% interest of Euronet Middle East W.L.L. resulted in Euronet obtaining control of the entity, which was considered a business combination. Accordingly, we valued the assets and liabilities at fair value, which resulted in a $4.4 million gain on the 49% interest previously owned.

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

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. Exchange gains and losses that result from re-measurement of these assets and liabilities are recorded in determining net income. The majority of our foreign currency gains or losses are due to the re-measurement of intercompany loans, which are not considered a long-term investment in nature, that 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 comprised 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 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 gains.

We recorded a net foreign currency exchange ~~gain~~losses of $~~2.9~~1.3 million inand $1.7 million for the ~~third~~first quarter of 2014 and 2013, ~~compared to a~~respectively. These realized and unrealized net foreign currency exchange ~~gain of $1.4 million in the third quarter of 2012. We recorded a net foreign currency exchange gain of~~ ~~$2.7 million~~ ~~in the first nine months of 2013 compared to a net foreign currency exchange loss of~~ ~~$1.2 million~~ ~~in the first nine months of 2012. These realized and unrealized foreign currency exchange gains and~~ losses primarily reflect the ~~respective weakening and~~net strengthening of the U.S. dollar against the currencies of the countries in which we operate during the respective periods.

~~Income from unconsolidated affiliates~~

Income from unconsolidated affiliates decreased in the third quarter of 2013 compared to the same period of 2012, primarily due to the sale of the Company's 40% equity method investment in epay Malaysia in July 2013. Income from unconsolidated affiliates decreased in the first nine months of 2013 compared to the same period of 2012, primarily due to decreased profitability at epay Malaysia during the first half of 2013 and the subsequent sale discussed above.

~~Table of Contents~~

INCOME TAX EXPENSE

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

Three Months Ended
September 30, Nine Months Ended
September 30,
(dollar amounts in thousands) 2013 2012 2013 2012
Income before income taxes $ 58,642
$ 21,168
$ 100,684
$ 50,546
Income tax expense (10,668 ) (6,827 ) (22,485 ) (17,381 )
Net income $ 47,974
$ 14,341
$ 78,199
$ 33,165

Effective income tax rate 18.2 % 32.3 % 22.3 % 34.4 %

Income before income taxes $ 58,642
$ 21,168
$ 100,684
$ 50,546
Adjust: Acquisition-related contingent consideration gain 19,319
—
19,319
—
Adjust: Foreign currency exchange gain (loss), net 2,899
1,419
2,658
(1,237 )
Adjust: Other gains (losses), net 2,809
(25 ) 2,397
4,146
Income before income taxes, as adjusted $ 33,615
$ 19,774
$ 76,310
$ 47,637

Income tax expense $ (10,668 ) $ (6,827 ) $ (22,485 ) $ (17,381 )
Adjust: Income tax benefit attributable to foreign currency exchange (loss) gain, net 104
(28 ) (130 ) 36
Income tax expense, as adjusted $ (10,772 ) $ (6,799 ) $ (22,355 ) $ (17,417 )

Effective income tax rate, as adjusted 32.0 % 34.4 % 29.3 % 36.6 %

The Company's effective income tax rates were ~~18.2%~~26.4% and ~~32.3%~~20.7% for the ~~three-month periods ended September 30,~~first quarters of 2014 and 2013, ~~and 2012, respectively, and~~ ~~22.3%~~ ~~and~~ ~~34.4%~~ ~~for the nine-month periods ended September 30, 2013 and 2012,~~ respectively. The effective tax rates were significantly influenced by the Pure Commerce acquisition-related contingent consideration gain, foreign currency exchange gains and losses and other non-operating gains, net in the respective periods. Excluding these items from pre-tax income, as well as the related tax effects for these items, the Company's effective tax rates were ~~32.0%~~ ~~and~~ ~~34.4%~~ ~~for the three-month periods ended September 30, 2013 and 2012, respectively, and~~ ~~29.3%~~ ~~and~~ ~~36.6%~~ ~~for the nine-month periods ended September 30, 2013 and 2012, respectively.~~

Our effective tax rate ~~as adjusted,~~ for the ~~third~~first quarter of 2014 and 2013 was lower than the applicable statutory tax rate of 35% primarily because of the Company's U.S. income tax positions. Our effective tax rate, as adjusted, for the nine-month period ended September 30, 2013 was lower than the applicable statutory tax rate of 35% primarily because of the Company's U.S. income tax positions and a change in the reserve for uncertain tax benefits. The Company does not have a history of significant taxable income in the U.S., therefore, the Company has recorded a valuation allowance against ~~the~~its U.S. federal tax net operating loss carryforwards. Accordingly, in instances when the Company's U.S. legal entities generate pre-tax book income, no income tax expense is recognized to the extent there are net operating loss carryforwards to offset pre-tax book income.

The ~~decrease~~increase in the effective tax rate ~~as adjusted,~~ for the ~~third~~first quarter of ~~2013~~2014 compared to the same period of ~~2012~~2013 was primarily ~~because of the Company’s U.S. income tax positions. The decrease in the effective tax rate, as adjusted, for the nine-month period ended September 30, 2013 compared~~due to ~~the same period of 2012 was primarily because of the Company's U.S. income tax positions and a change in the reserve for uncertain tax benefits. During the first quarter of 2013, the Company recorded~~ a $2.2 million decrease in the reserve for uncertain tax benefits related to the closure of an income tax audit in Germany, resulting in a decrease in income tax expense ~~for~~recorded in the ~~nine-month period ended September 30,~~first quarter of 2013. This decrease was partly offset by $0.9 million of changes in valuation allowances in the first quarter of 2014.

Income before income taxes, as adjusted, income tax expense, as adjusted and effective income tax rate, as adjusted are non-GAAP financial measures that management believes are useful for understanding why our effective tax rates are significantly different than would be expected.

3026

Table of Contents

NET INCOME OR LOSS 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	80%		epay - Spain
Euronet China	75	%75%		EFT - China
Euronet Pakistan	70	%70%		EFT - Pakistan
Universal Solutions Partners	51%		EFT - UAE
Euronet Services	95	%95%		epay - Russia
~~Movilcarga~~	80	%		~~epay - Spain~~
~~Universal Solutions Partners~~	51	%		~~EFT - UAE~~

NET INCOME ATTRIBUTABLE TO EURONET ~~WORLDWIDE, INC.~~

Net income attributable to Euronet ~~Worldwide, Inc.~~ was $~~47.9~~16.0 million for the ~~third~~first quarter ~~and~~ ~~$78.0 million~~ ~~for the first nine months~~ of ~~2013~~2014 compared to $~~14.6~~12.0 million for the ~~third~~ ~~quarter and~~ ~~$33.5 million~~ ~~for the first nine months~~same period of ~~2012~~2013. As more fully discussed above, the increase in net income of ~~$44.4~~$4.0 million ~~for the first nine months of~~ ~~2013~~ ~~as compared to the same period in~~ ~~2012~~ was primarily due to ~~the recognition of a $19.3 million gain related to the change in fair value of a contingent consideration liability. The remaining $25.1 million increase was primarily the result of~~ an increase in operating income ~~(excluding the $19.3~~of $5.2 million, ~~contingent consideration gain) of $23.1 million, an increase in foreign currency exchange gain of $3.9 million and~~ a decrease in interest expense of ~~$8.2 million. Theses increases were partly offset by~~$0.9 million, a decrease in foreign currency exchange loss of $0.4 million and an increase in other non-operating income of ~~$1.8 million,~~$0.2 million. These increases to net income were partly offset by an increase in income tax expense of ~~$5.1~~$2.6 million and a decrease in ~~interest~~ income from unconsolidated affiliates of ~~$2.1~~$0.1 million. ~~Other non-operating items decreased net income by $1.1 million.~~

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of ~~September 30, 2013~~March 31, 2014 and December 31, ~~2012~~2013, we had working capital, which is calculated as the difference between total current assets and total current liabilities, of $~~119.1~~173.3 million and $~~116.5~~108.4 million, respectively. Our ratio of current assets to current liabilities at ~~September 30, 2013~~March 31, 2014 and December 31, ~~2012~~2013 ~~were~~was ~~1.19~~1.28 and ~~1.17~~1.15, respectively.

We require substantial working capital to finance operations. The Money Transfer Segment funds the correspondent distribution network before receiving the benefit of amounts collected from customers by agents. Working capital needs increase due to weekends 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. As of ~~September 30, 2013~~March 31, 2014, working capital in the Money Transfer Segment was $~~78.1~~90.0 million. We expect that working capital needs will increase as we continue to expand this business. 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. The EFT Processing Segment does not require substantial working capital.

We had cash and cash equivalents of $~~244.5~~292.3 million at ~~September 30, 2013~~March 31, 2014, of which $~~176.4~~219.3 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 three months ended March 31, 2014 and 2013 (in thousands):



	Three Months Ended March 31,
Liquidity	2014			2013
Cash and cash equivalents provided by (used in):
Operating activities	$	53,059		$	15,742
Investing activities	(12,245		)	(37,582		)
Financing activities	39,804			(16,719		)
Effect of exchange rate changes on cash and cash equivalents	1,856			(1,447		)
Increase (decrease) in cash and cash equivalents	$	82,474		$	(40,006	)

Table of Contents

Operating activity cash flow

Cash flows provided by operating activities were $~~150.6~~53.1 million for the first ~~nine months~~quarter of ~~2013~~2014 compared to $~~143.4~~15.7 million for the first ~~nine months~~quarter of ~~2012.~~2013. The increase is primarily due to improved operating results and fluctuations in working capital mainly associated with the timing of the settlement processes with mobile operators in the epay Segment and with correspondents in the Money Transfer Segment.

~~Table of Contents~~

Investing activity cash flow

Cash flows used in investing activities were $~~55.0~~12.2 million for the first ~~nine months~~quarter of ~~2013~~2014 compared to $~~38.3~~37.6 million for the first ~~nine months~~quarter of ~~2012.~~2013. During the first ~~nine months~~quarter of ~~2013,~~2014, we used ~~$30.8~~$11.0 million for ~~acquisitions compared to~~ ~~$2.7 million~~ ~~for the first nine months of 2012. Purchases~~purchases of property and equipment ~~used~~ ~~$27.6~~compared to $6.1 million ~~and~~ ~~$33.2 million~~ ~~of cash~~ for the first ~~nine months~~quarter of ~~2013 and 2012, respectively.~~2013. Cash used for software development and other investing activities totaled ~~$4.1~~$1.2 million for the first ~~nine months~~quarter of ~~2013~~2014 compared to ~~$2.4~~$0.7 million for the first ~~nine months~~quarter of ~~2012.~~2013. Additionally, we ~~had~~ ~~$7.6~~used $30.8 million ~~of net proceeds from the sale of an equity investment~~ for acquisitions during the first ~~nine months~~quarter of 2013.

Financing activity cash flow

Cash flows ~~used in~~provided by financing activities were $~~52.5~~39.8 million for the first ~~nine months~~quarter of ~~2013~~2014 compared to cash flows used in financing activities of $~~85.6~~16.7 million for the first ~~nine months~~quarter of ~~2012.~~2013. Our financing activities for the first ~~nine months~~quarter of ~~2013~~2014 consisted of net borrowings of $39.0 million compared to net repayments of debt obligations of ~~$50.0 million compared to $81.5~~$10.2 million for the first ~~nine months~~quarter of ~~2012.~~2013. To support the short-term cash needs of our Money Transfer Segment, we generally borrow amounts under our revolving credit facility several times each month to fund the correspondent network in advance of collecting remittance amounts from the ~~agency~~agent network. These borrowings are repaid over a very short period of time, generally within a few days. As a result, during the first ~~nine months~~quarter of ~~2013~~2014 we had a total of ~~$1,508.5~~$413.9 million in borrowings and ~~$1,550.3~~$371.6 million in repayments under the revolving credit facility. Additionally, we paid $0.6 million and $0.7 million during the first quarter of 2014 and 2013, respectively, for capital lease obligations. During the first quarter of 2014, we used $1.3 million for the repayment of other short-term debt obligations. We used $7.9 million ~~and $3.3 million~~ during the first ~~nine months~~quarter of 2013 ~~and 2012, respectively,~~ for the acquisition of subsidiary shares from a holder of noncontrolling interests. ~~Additionally, for the first nine months of 2013 and 2012, we paid $2.0 million for capital lease obligations.~~ Further, we received proceeds of ~~$7.5~~$1.5 million and ~~$2.1~~$2.2 million during the first ~~nine months~~quarter of ~~2013~~2014 and ~~2012,~~2013, respectively, for the issuance of common stock ~~options~~ in connection with our Stock Incentive Plan.

Other sources of capital

Credit Facility —

As of ~~September 30, 2013,~~March 31, 2014, we ~~have~~had a $480 million ~~Credit Facility~~senior secured credit facility (the "Credit Facility") consisting of a $390 million revolving credit facility, a $10 million India revolving credit facility and an $80 million term ~~loan.~~loan (which had been reduced to $66 million through principal amortization payments) (Term Loan A"). The revolving credit facility allows for borrowings in U.S. dollars, euro, British pound sterling, Australian dollars and/or Indian rupees. See "Credit Facility Amendment" below.

~~The~~As of March 31, 2014, the $390 million revolving credit facility ~~contains~~contained a $200 million sublimit for the issuance of letters of credit and a $25 million sublimit for swingline loans. We use the revolving credit facility primarily to fund working capital requirements which are expected to increase as we expand the Money Transfer business. Based on our current projected working capital requirements, we anticipate that our revolving credit facility will be sufficient to fund our working capital needs. ~~Subject to certain conditions, we have the option to increase the Credit Facility by up to an additional $80 million by requesting additional commitments from existing or new lenders.~~

~~Fees~~As of March 31, 2014, fees and interest on borrowings ~~vary~~varied based upon the Company's consolidated total leverage ratio (as defined in the Company's Amended and Restated Credit ~~Agreement governing the Credit Facility)~~Agreement) (the "Credit Agreement") and ~~will be~~are based, in the case of letter of credit fees, on a margin, and in the case of interest, on a margin over London Inter-Bank Offered Rate ("LIBOR") or a margin over the base rate, as selected by us, with the applicable margin ranging from 1.5% to 2.5% ~~(or~~for LIBOR loans and 0.5% to 1.5% for base rate loans). The base rate is the highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus 0.50% or (iii) the Fixed LIBOR rate plus 1.00%. The term loan is subject to scheduled quarterly amortization payments, as set forth in the Amended and Restated Credit Agreement. The maturity date for the Credit Facility is August 18, 2016, at which time the outstanding principal balance and all accrued interest will be due and payable in full. Financing costs of $5.5 million are being amortized over the terms of the respective loans.

As of ~~September 30, 2013~~March 31, 2014, we had borrowings of $~~70.0~~66.0 million outstanding under ~~the term loan.~~Term Loan A. We had $~~173.3~~171.4 million of borrowings and $~~35.2~~47.9 million of stand-by letters of credit outstanding under the revolving credit facility as of ~~September 30, 2013~~March 31, 2014. The remaining ~~$191.5~~$180.7 million under the revolving credit facility was available for borrowing. As of ~~September 30, 2013~~March 31, 2014, our weighted average interest rates under the revolving credit facility and ~~term loan~~Term Loan A were ~~2.0%~~1.77% and ~~1.9%~~1.65%, respectively, excluding amortization of deferred financing costs.

Short-term debt obligations —- Short-term debt obligations at ~~September 30, 2013~~March 31, 2014 were primarily comprised of ~~$8.0~~$9.0 million of payments due in the next twelve months under ~~the term loan.~~Term Loan A. Certain of our subsidiaries also have available credit lines and overdraft facilities to supplement short-term working capital requirements, when necessary, and there was $1.0 million outstanding under these facilities as of ~~September 30, 2013~~March 31, 2014.

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Credit facility amendment - On April 9, 2014, the Company amended the Credit Agreement to, among other things, (i) increase Term Loan A from $66 million to $75 million, (ii) increase the aggregate credit commitments under the Company’s revolving credit facility from $400 million to $600 million, (iii) reduce the margin over the LIBOR Rate and base rate by 12.5 basis points and (iv) extend the expiration date of the Credit Agreement from August 18, 2016 to April 9, 2019.

Other uses of capital

~~Debt and equity repurchases~~ — In September 2013, our Board of Directors authorized a program for the repurchase of Euronet Common Stock. The program authorizes repurchases of up to $100 million in value or 5 million shares and will expire on September 19, 2015. Because of constraints established in our Credit Agreement, repurchases may only begin after December 31, 2013. We expect to repurchase Common Stock when prices provide attractive returns on capital. There were no repurchases of Common Stock under a prior authorization during the first nine months of 2013. In September 2013, the Company repurchased at par the remaining $3.6 million of principal amount of the convertible debentures outstanding.

~~Payment obligations related to acquisitions~~ — A portion of the net assets acquired in the acquisition of Pure Commerce includes a liability for additional purchase price consideration up to 30 million Australian dollars, payable in cash and Euronet Common Stock, based upon achieving certain performance conditions for the twelve month period ending in December 2013. As of September 30, 2013, we estimated that no additional purchase price consideration will be owed to the sellers under this agreement.

Capital expenditures and needs —- Total capital expenditures for the first ~~nine months~~quarter of ~~2013~~2014 were ~~$28.5~~$11.0 million. These capital expenditures were ~~used~~made primarily for the purchase of ATMs in Poland and India, as well as for office, data center and company store computer equipment and software, and POS terminals for the epay Segment. Total capital expenditures for ~~2013~~2014 are currently estimated to be approximately ~~$35~~$45.0 million to ~~$40~~$50.0 million.

In the epay Segment, approximately ~~90,000~~85,000 of the approximately ~~636,000~~647,000 POS devices that we operate are Company-owned, with the remaining terminals being operated as integrated cash register devices of our major retail customers or owned by the retailers. As our epay Segment expands, we ~~will~~expect to continue to add terminals in certain independent retail locations at a price of approximately $300 per terminal. We expect the proportion of owned terminals to total terminals operated to remain relatively constant.

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 facility and other existing and potential future ~~financings,~~financing sources, will be sufficient to meet our debt, leasing ~~contingent consideration~~ and capital expenditure obligations. If our capital resources are not sufficient to meet these obligations, we will seek to issue additional debt and/or 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 repurchase plan

In September 2013, the Board of Directors authorized a stock repurchase program ("2013 Program") allowing Euronet to repurchase up to $100 million in value or 5 million shares of its common stock through September 19, 2015. Repurchases under the 2013 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. There were no repurchases of common stock under the 2013 Program during the first quarter of 2014.

Acquisitions

On March 7, 2014, the Company entered into a Share Purchase Agreement (the "Purchase Agreement") with the selling shareholders of all of the capital stock of EIM (FX) Limited and TBK (FM) Limited, each United Kingdom limited companies, which primarily operate under the trading names HiFX or HiFM. Under the terms of the Purchase Agreement, the selling shareholders will receive at closing an aggregate amount of purchase consideration of £145 million in cash and Euronet Common Stock. The number of shares of Euronet common stock to be issued will be based on the average closing price of Euronet common stock over the twenty trading-day period before closing and the average U.S. dollar to pounds sterling exchange rate over the five trading-day period before closing. Based on the March 31, 2014 exchange rate, the purchase consideration would be comprised of $184.5 million in cash and $56.5 million of Euronet common stock. HiFX offers account-to-account international payment services to high-income individuals and small-to-medium sized businesses, complementing Euronet’s existing consumer-to-consumer money transfer business. HiFX has an innovative multi-channel platform which allows customers to make transfers, track payments and manage their international payment activity online or through a customer service representative.

The acquisition is subject to customary closing conditions, including certain regulatory approvals, and is currently expected to close during the second quarter of 2014.

Other trends and uncertainties

Although Euronet has no direct investments in European sovereign debt, we are indirectly exposed to its risks. Many of the customers of our EFT Processing Segment are banks who may hold investments in European sovereign debt. To the extent those customers are negatively impacted by those investments, they may be less able to pay amounts owed to us or renew service agreements with us. Further, to the extent that sovereign debt concerns depress economic activity, such concerns may negatively impact the number of transactions processed on our epay and money transfer networks, resulting in lower ~~revenue.~~

Our Australia, Middle East and U.K. epay businesses have experienced revenue declines as a result of competitive pressures and changes in the distribution strategies of certain mobile operators. Continued competitive pressures in these markets may negatively impact the epay Segment's profitability in the near term and it is possible that the goodwill or acquired intangible assets of these reporting units could become impaired. As of September 30, 2013, the carrying value of goodwill and acquired intangible assets for our Australia, Middle East and U.K. epay reporting units were $12.7 million, $12.3 million and $12.8 million, respectively.revenues.

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

On occasion, we grant guarantees of the obligations of our subsidiaries and we sometimes enter into agreements with ~~unaffiliated third parties~~commercial counterparties 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 ~~September 30, 2013~~March 31, 2014, there were no material changes from the disclosure in our Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013. 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 ~~September 30, 2013~~March 31, 2014. See also Note ~~10,~~12, Commitments, to the unaudited consolidated financial statements included elsewhere in this report.

CONTRACTUAL OBLIGATIONS

As of ~~September 30, 2013~~,March 31, 2014, there ~~have been~~were no material changes outside the ordinary course of the Company's business from the disclosures relating to contractual obligations contained in our Annual Report on Form 10-K for the year ended December 31, ~~2012~~.2013.

On April 9, 2014, we amended our Credit Agreement. See the discussion under "Liquidity and Capital Resources - Other Sources of Capital - Credit Facility" above for additional information.

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~~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”). 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;~~

~~business strategy;~~

~~government regulatory action;~~

~~technological advances; and~~

~~projected costs and revenues.~~

Statements contained in this filing that relate to the future resolution of matters, including those relating to the security breach, are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors, including the following: the amount of actual losses or liabilities that will be asserted by card associations are currently unknown and may be larger than would be anticipated; other costs, penalties and fines incurred by the Company may be greater than would be anticipated; the Company's insurance coverage may be insufficient to cover all costs, losses and liabilities; and the Company may suffer harm to its reputation and existing and prospective customer relationships as a result of the security breach.

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. Forward-looking statements are typically identified by the words believe, expect, anticipate, intend, estimate and similar expressions.

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 economic conditions in specific countries and regions; technological developments affecting the market for our products and services; our ability to successfully introduce new products; foreign currency exchange rate fluctuations; the effects of any potential future security breaches; 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; changes in laws and regulations affecting our business, including immigration laws; changes in our relationships with, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting the Company; and those 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, 2012~~. All forward-looking statements made in this Form 10-Q speak only as of the date of this report. 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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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

As of ~~September 30, 2013~~March 31, 2014, our total debt outstanding was $~~250.1~~243.2 million. Of this amount, ~~$244.3~~$238.4 million, or 98% of our total debt obligations, relates to debt that accrues interest at variable rates. If we were to maintain these borrowings for one year and maximize the potential borrowings available under the revolving credit facility 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 ~~$4.3~~$4.2 million.

The remaining ~~$5.8~~$4.8 million, or 2% of our total debt obligations, relates to capitalized leases with fixed payment and interest terms that expire between ~~2013~~2014 and ~~2017.~~2018.

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 ~~three- and nine-month periods ended September 30,~~first quarter of ~~2013~~2014, ~~76% and~~ 75% of our revenues ~~respectively,~~ 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,~~Australian dollar, Brazilian real, British pound, ~~Australian dollar,~~euro, Indian Rupee, Hungarian forint and Polish ~~zloty, Brazilian real and Indian rupee.~~zloty. As of ~~September 30, 2013~~March 31, 2014, 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 ~~$45~~$35 million to ~~$50~~$40 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 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 $50 million to $55 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 are incurred in the functional currencies of our international operating entities, the profits we earn in foreign currencies are positively impacted by the weakening of the U.S. dollar and negatively impacted by the strengthening of the U.S. dollar. Additionally, our debt obligations are primarily in U.S. dollars; therefore, as foreign currency exchange rates fluctuate, the amount available for repayment of debt will also increase or decrease.

We are also exposed to foreign currency exchange rate risk in our Money Transfer Segment. A majority of the money transfer business 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. This spread provides some protection against currency fluctuations that occur while we are holding the foreign currency. Our

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exposure to changes in foreign currency exchange rates is limited by the fact that disbursement occurs for the majority of transactions shortly after they are initiated. Additionally, we enter into foreign currency forward contracts primarily to help offset foreign currency exposure related to the notional value of money transfer transactions collected in currencies other than the U.S. dollar. As of ~~September 30, 2013~~March 31, 2014, we had foreign currency forward contracts outstanding with a notional value of $~~134.2~~136.0 million, primarily in Australian dollars, British pounds, euros and Mexican pesos, that were not designated as hedges and mature in a weighted average of two days. The fair value of these forward contracts as of ~~September 30, 2013~~March 31, 2014 was ana net unrealized ~~gain~~loss of ~~$25 thousand, which was partly offset by the unrealized losses on the related foreign currency liabilities.~~$81 thousand.

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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 ~~September 30, 2013~~March 31, 2014. 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 ~~September 30, 2013~~March 31, 2014 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 other legal or regulatory proceedings that management believes, either individually or in the aggregate, would have a material adverse effect ~~upon~~on the Company's consolidated financial condition or results of ~~operations or financial condition of the Company.~~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 ~~provisions~~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 ~~matter.~~proceeding.

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ITEM 1A. RISK FACTORS

You should carefully consider the risks described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2012~~2013, as may be updated in our subsequent filings with the SEC, before making an investment decision. Our operations are subject to a number of risks and uncertainties, including the risks and uncertainties described in our Annual Report on Form 10-K, as may be updated by any subsequent Quarterly Reports on Form 10-Q. If any of the risks identified in our Annual Report on Form 10-K, as may be updated by any subsequent Quarterly Reports on Form 10-Q, actually occurs, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our common stock could decline substantially. This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described in our Risk Factors and elsewhere in this Quarterly Report.

~~Except as set forth below, there~~There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013 as filed with the ~~SEC.~~Securities and Exchange Commission.

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

~~We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate our stockholders' ability to sell their shares for a premium in a change of control transaction.~~

Various provisions of our certificate of incorporation and bylaws and of Delaware corporate law may discourage, delay or prevent a change in control or takeover attempt of our company by a third party to which our management and board of directors opposes. Public stockholders who might desire to participate in such a transaction may not have the opportunity to do so. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and board of directors. These provisions include:

preferred stock that could be issued by our board of directors to make it more difficult for a third party to acquire, or to discourage a third party from acquiring, a majority of our outstanding voting stock;

~~classification of our directors into three classes~~The following table provides information with respect to shares of restricted stock awards granted under our Stock Incentive Plan that we withheld upon vesting to satisfy our tax withholding obligations during the ~~time for which they hold office;~~three months ended March 31, 2014.

~~supermajority voting requirements~~



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 (1)
January 1 - January 31, 2014	273	$	47.85	—	$	100,000,000
February 1 - February 28, 2014	—	—		—	100,000,000
March 1, 2014 - March 31, 2014	—	—		—	100,000,000
Total	273	$	47.85	—

(1) In September 2013, the Board of Directors authorized a stock repurchase program allowing Euronet to ~~amend the provision~~repurchase up to $100 million in ~~our certificate~~value or 5 million shares of ~~incorporation providing for the classification of our directors into three such classes;~~

~~non-cumulative voting for directors;~~

~~control by our board of directors of the size of our board of directors;~~

~~limitations on the ability of stockholders to call special meetings of stockholders; and~~

~~advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings.~~

On May 30, 2013, our stockholders ratified a three-year stockholders' rights agreement (the ''Rights Agreement'') entered into on March 26, 2013, between Euronet and Computershare Trust Company, N.A. as rights agent. The Rights Agreement replaces a previous rights agreement that expired on April 3, 2013. Pursuant to the Rights Agreement, holders of our Common Stock are entitled to purchase one one-hundredth (1/100) of a share (a ''Unit'') of Junior Preferred Stock at a price of $125.00 per Unit upon certain events (the "Right"). The purchase price is subject to appropriate adjustment forits common stock ~~splits and other similar events. Generally,~~through September 19, 2015. Repurchases may take place in the ~~event~~open market or in privately negotiated transactions, including derivative transactions, and may be made under a ~~person or entity acquires, or initiates a tender offer to acquire, at least 20%~~Rule 10b5-1 plan. There were no repurchases of ~~Euronet's then-outstanding Common Stock,~~common stock under this program during the ~~Rights will become exercisable for Common Stock having a value equal to two times the exercise price~~first quarter of the Right, or effectively at one-half of Euronet's then-current stock price. The existence of the Rights may discourage, delay or prevent a change of control or takeover attempt of our company by a third party that is opposed by our management and board of directors.2014.

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ITEM 6. EXHIBITS


a)	~~Exhibits~~

~~The exhibits that are required to be filed or incorporated herein by reference are listed on the Exhibit Index below.~~

~~EXHIBITS~~

~~Exhibit Index~~



Exhibit		Description

~~12.1~~2.1†		Share Purchase Agreement, dated as of March 7, 2014, among Euronet Worldwide, Inc. and the Sellers referenced therein. (filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed on March 11, 2014 (File No. 001-31648 ) and incorporated herein by reference).
10.1*		Amendment No. 1 dated April 9, 2014, to the Amended and Restated Credit Agreement dated as of August 18, 2011 among Euronet Worldwide, Inc., and certain Subsidiaries and Affiliates, as Borrowers, certain Subsidiaries and Affiliates as Guarantors, the Lenders, Bank of America, N.A., as Administrative Agent and Collateral Agent, U.S. Bank National Association, BMO Capital Markets and BBVA Compass Bank, as Syndication Agent and Wells Fargo as Documentation Agent.
12.1*		Computation of Ratio of Earnings to Fixed Charges ~~(1)~~

~~31.1~~31.1*		Section 302 — Certification of Chief Executive Officer ~~(1)~~

~~31.2~~31.2*		Section 302 — Certification of Chief Financial Officer ~~(1)~~

~~32.1~~32.1**		Section 906 — Certification of Chief Executive Officer ~~(2)~~

~~32.2~~32.2**		Section 906 — Certification of Chief Financial Officer ~~(2)~~

~~101~~101*		The following materials from Euronet Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2013,~~March 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at ~~September 30, 2013~~March 31, 2014 (unaudited) and December 31, ~~2012,~~2013, (ii) Consolidated Statements of ~~Operations~~Income (unaudited) for the ~~three-~~three months ended March 31, 2014 and ~~nine-month periods ended September 30,~~ 2013, ~~and 2012,~~ (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the ~~three-~~three months ended March 31, 2014 and ~~nine-month periods ended September 30,~~ 2013, ~~and 2012,~~ (iv) Consolidated Statements of Cash Flows (unaudited) for the ~~nine-months~~three months ended ~~September 30,~~March 31, 2014 and 2013, ~~and 2012,~~ and (v) Notes Unaudited to ~~the Unaudited~~ Consolidated Financial Statements.

_________________________


~~(1)~~	~~Filed herewith.~~


~~(2)~~	~~Pursuant to Item 601(b)(32) of Regulation S-K, this Exhibit is furnished rather than filed with this Form 10-Q.~~

* Filed herewith.

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

† Portions of this document have been redacted and are subject to an order granting confidential treatment under the Securities Exchange Act of 1934, as amended (File No. 1-31648 - CF#30821). Redacted portions are indicated with the notation [***].

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.

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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.

~~October 30, 2013~~May 1, 2014

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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(dollar amounts in thousands)	Estimated Life
Current assets		$	4,818
Property and equipment	2-8 years	331
Non-compete agreements	4 years	755
Trade names	20 years	2,382
Proprietary software	10 years	11,912
Customer relationships	12 years	18,230
Goodwill	Indefinite	26,228
Other non-current assets		402
Fair value of assets acquired		65,058
Current liabilities		(4,762		)
Non-current liabilities		(2,028		)
Net assets acquired		$	58,268



		As of September 30, 2013
(in thousands)	Balance Sheet Classification	Level 1		Level 2			Level 3		Total
Assets
Foreign currency derivative contracts	Other current assets	$	—	$	89		$	—	$	89
Foreign currency derivative contracts	Other current liabilities	$	—	$	(64	)	$	—	$	(64	)



	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
(dollar amounts in thousands)	2013			2012			Increase (Decrease)Amount			Increase Percent		2013			2012			Increase (Decrease)Amount			Increase Percent
EFT Processing (1)	$	44,620		$	14,483		$	30,137		208	%	$	66,184		$	30,856		$	35,328		114	%
epay	12,128			10,131			1,997			20	%	39,290			33,322			5,968			18	%
Money Transfer	7,517			6,214			1,303			21	%	22,342			17,186			5,156			30	%
Total	64,265			30,828			33,437			108	%	127,816			81,364			46,452			57	%
Corporate services, eliminations and other	(8,920		)	(6,633		)	(2,287		)	34	%	(25,513		)	(21,473		)	(4,040		)	19	%
Total (1)	$	55,345		$	24,195		$	31,150		129	%	$	102,303		$	59,891		$	42,412		71	%



	Average Translation Rate						Average Translation Rate
	Three Months Ended September 30,				Increase (Decrease)Percent		Nine Months Ended September 30,				Increase (Decrease)Percent
Currency (dollars per foreign currency)	2013		2012		Increase (Decrease)Percent		2013		2012		Increase (Decrease)Percent
Australian dollar	$	0.9155	$	1.0391	(12	)%	$	0.9812	$	1.0349	(5	)%
Brazilian real	$	0.4373	$	0.4936	(11	)%	$	0.4740	$	0.5237	(9	)%
British pound	$	1.5517	$	1.5808	(2	)%	$	1.5464	$	1.5784	(2	)%
euro	$	1.3256	$	1.2520	6	%	$	1.3174	$	1.2825	3	%
Hungarian forint	$	0.0045	$	0.0044	2	%	$	0.0044	$	0.0044	—	%
Indian rupee	$	0.0161	$	0.0182	(11	)%	$	0.0175	$	0.0189	(7	)%
Polish zloty	$	0.3126	$	0.3033	3	%	$	0.3140	$	0.3054	3	%