EURONET WORLDWIDE, INC. - Quarter Report: 2010 June (Form 10-Q)

 

 

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

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

Commission File Number: 001-31648

EURONET WORLDWIDE, INC.

(Exact name of the registrant as specified in its charter)

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

3500 COLLEGE BOULEVARD
LEAWOOD, KANSAS		66211
(Address of principal executive offices)		(Zip 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 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

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of the issuer’s common stock, $0.02 par value, outstanding as of July 31, 2010 was 50,990,720 shares.

 

 

Table of Contents

PART I—FINANCIAL INFORMATION			3
ITEM 1. FINANCIAL STATEMENTS			3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			31
ITEM 4. CONTROLS AND PROCEDURES			32
PART II—OTHER INFORMATION			32
ITEM 1. LEGAL PROCEEDINGS			32
ITEM 1A. RISK FACTORS			32
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			33
ITEM 5. OTHER INFORMATION			33
ITEM 6. EXHIBITS			34
EX-10.1
EX-12.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)

		As of
		June 30, 2010				December 31, 2009
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	202,587			$	183,528
Restricted cash			72,796				73,148
Inventory — PINs and other			68,005				87,661
Trade accounts receivable, net of allowances for doubtful accounts of $13,444 at June 30, 2010 and $13,909 at December 31, 2009			226,105				282,905
Prepaid expenses and other current assets			31,056				31,344
Total current assets			600,549				658,586
Property and equipment, net of accumulated depreciation of $148,353 at June 30, 2010 and $153,255 at December 31, 2009			81,916				96,592
Goodwill			458,459				504,650
Acquired intangible assets, net of accumulated amortization of $92,047 at June 30, 2010 and $88,924 at December 31, 2009			93,580				112,948
Other assets, net of accumulated amortization of $18,495 at June 30, 2010 and $16,866 at December 31, 2009			37,115				39,903
Total assets		$	1,271,619			$	1,412,679
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable		$	207,956			$	228,768
Accrued expenses and other current liabilities			212,683				225,474
Current portion of capital lease obligations			1,835				2,510
Short-term debt obligations and current maturities of long-term debt obligations			2,490				3,127
Income taxes payable			15,756				18,379
Deferred revenue			10,510				13,320
Total current liabilities			451,230				491,578
Debt obligations, net of current portion			283,567				320,283
Capital lease obligations, net of current portion			1,273				1,997
Deferred income taxes			19,710				23,854
Other long-term liabilities			6,731				8,464
Total liabilities			762,511				846,176
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; 51,216,358 issued at June 30, 2010 and 51,101,833 issued at December 31, 2009			1,024				1,022
Additional paid-in-capital			746,704				740,990
Treasury stock, at cost, 250,228 shares at June 30, 2010 and 241,644 shares at December 31, 2009			(1,643	)			(1,483	)
Accumulated deficit			(201,796	)			(203,139	)
Restricted reserve			1,009				1,013
Accumulated other comprehensive income (loss)			(41,933	)			20,566
Total Euronet Worldwide, Inc. stockholders’ equity			503,365				558,969
Noncontrolling interests			5,743				7,534
Total equity			509,108				566,503
Total liabilities and equity		$	1,271,619			$	1,412,679

See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)

		Three Months Ended June 30,								Six Months Ended June 30,
		2010				2009				2010				2009
Revenues:
EFT Processing Segment		$	46,488			$	45,592			$	95,054			$	91,798
epay Segment			137,689				145,253				283,069				279,776
Money Transfer Segment			60,051				57,769				116,108				110,737
Total revenues			244,228				248,614				494,231				482,311
Operating expenses:
Direct operating costs			160,836				165,053				326,697				318,601
Salaries and benefits			31,448				31,085				63,620				59,681
Selling, general and administrative			21,850				20,911				41,043				39,979
Goodwill and acquired intagible assets impairment			—				—				—				9,884
Depreciation and amortization			13,552				13,541				28,100				26,444
Total operating expenses			227,686				230,590				459,460				454,589
Operating income			16,542				18,024				34,771				27,722
Other income (expense):
Interest income			572				885				1,127				1,854
Interest expense			(5,031	)			(6,653	)			(9,985	)			(13,720	)
Income from unconsolidated affiliates			447				516				1,001				1,034
Loss on early retirement of debt			—				(150	)			—				(253	)
Foreign currency exchange gain (loss), net			(9,341	)			9,650				(14,423	)			(941	)
Other income (expense), net			(13,353	)			4,248				(22,280	)			(12,026	)
Income from continuing operations before income taxes			3,189				22,272				12,491				15,696
Income tax expense			(4,344	)			(6,397	)			(10,131	)			(11,714	)
Income (loss) from continuing operations			(1,155	)			15,875				2,360				3,982
Discontinued operations, net			—				146				—				85
Net income (loss)			(1,155	)			16,021				2,360				4,067
Less: Net income attributable to noncontrolling interests			(328	)			(477	)			(1,017	)			(821	)
Net income (loss) attributable to Euronet Worldwide, Inc.		$	(1,483	)		$	15,544			$	1,343			$	3,246
Earnings (loss) per share attributable to Euronet Worldwide, Inc. stockholders — basic:
Continuing operations		$	(0.03	)		$	0.31			$	0.03			$	0.06
Discontinued operations			—				—				—				—
Total		$	(0.03	)		$	0.31			$	0.03			$	0.06
Basic weighted average shares outstanding			50,914,453				50,425,261				50,857,812				50,358,983
Earnings (loss) per share attributable to Euronet Worldwide, Inc. stockholders — diluted:
Continuing operations		$	(0.03	)		$	0.30			$	0.03			$	0.06
Discontinued operations			—				—				—				—
Total		$	(0.03	)		$	0.30			$	0.03			$	0.06
Diluted weighted average shares outstanding			50,914,453				51,240,221				51,777,392				50,821,373

See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited, in thousands)

		Three Months Ended June 30,								Six Months Ended June 30,
		2010				2009				2010				2009
Net income (loss)		$	(1,155	)		$	16,021			$	2,360			$	4,067
Other comprehensive income (loss), net of tax:
Translation adjustment			(41,652	)			39,736				(63,631	)			18,123
Unrealized gain on interest rate swaps			—				353				—				830
Gain on investment securities			—				803				—				1,030
Comprehensive income (loss)			(42,807	)			56,913				(61,271	)			24,050
Comprehensive (income) loss attributable to noncontrolling interests			401				(825	)			115				(925	)
Comprehensive income (loss) attributable to Euronet Worldwide, Inc.		$	(42,406	)		$	56,088			$	(61,156	)		$	23,125

See accompanying notes to the unaudited consolidated financial statements.

EURONET WORLDWIDE, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited, in thousands)

		Six Months Ended June 30,
		2010				2009
Net income		$	2,360			$	4,067
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			28,100				26,444
Share-based compensation			4,391				3,825
Unrealized foreign exchange loss, net			14,625				1,000
Non-cash impairment of goodwill and acquired intangible assets			—				9,884
Deferred income taxes			(2,089	)			(2,679	)
Income from unconsolidated affiliates			(1,001	)			(1,034	)
Accretion of convertible debentures discount and amortization of debt issuance costs			4,332				5,855
Changes in working capital, net of amounts acquired:
Income taxes payable, net			(2,839	)			3,472
Restricted cash			(5,230	)			32,460
Inventory — PINs and other			14,531				8,857
Trade accounts receivable			34,211				28,577
Prepaid expenses and other current assets			(2,340	)			(2,684	)
Trade accounts payable			(3,737	)			(37,890	)
Deferred revenue			(2,684	)			(1,896	)
Accrued expenses and other current liabilities			3,764				(18,956	)
Changes in noncurrent assets and liabilities			1,644				(9,284	)
Net cash provided by operating activities			88,038				50,018
Cash flows from investing activities:
Acquisitions, net of cash acquired			—				(10,016	)
Purchases of property and equipment			(12,427	)			(16,783	)
Purchases of other long-term assets			(2,618	)			(1,360	)
Other, net			473				(270	)
Net cash used in investing activities			(14,572	)			(28,429	)
Cash flows from financing activities:
Proceeds from issuance of shares			1,311				888
Borrowings from revolving credit agreements classified as non-current liabilities			108,000				285,400
Repayments of revolving credit agreements classified as non-current liabilities			(147,172	)			(297,219	)
Repayments of long-term debt obligations			(2,227	)			(27,083	)
Repayments of capital lease obligations			(1,255	)			(3,149	)
Cash dividends paid to noncontrolling interests stockholders			(1,676	)			(2,413	)
Other, net			728				(812	)
Net cash used in financing activities			(42,291	)			(44,388	)
Effect of exchange rate changes on cash and cash equivalents			(12,116	)			2,508
Increase (decrease) in cash and cash equivalents			19,059				(20,291	)
Cash and cash equivalents at beginning of period (includes cash of discontinued operations of $552 in 2009)			183,528				181,893
Cash and cash equivalents at end of period (includes cash of discontinued operations of $1,086 in 2009)		$	202,587			$	161,602
Interest paid during the period		$	5,643			$	7,162
Income taxes paid during the period			15,191				11,805

See accompanying notes to the unaudited consolidated financial statements.

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

(1) GENERAL

Organization

Euronet Worldwide, Inc. and its subsidiaries (the “Company” or “Euronet”) is an industry leader in processing secure electronic financial transactions in three principal business segments. Euronet’s EFT Processing Segment provides end-to-end solutions relating to operations of automated teller machine (“ATM”) and point-of-sale (“POS”) networks, and debit and credit card processing in Europe, the Middle East and Asia Pacific. The epay Segment is one of the world’s largest providers of “top-up” services for prepaid products, primarily prepaid mobile airtime, distributing these products in Europe, the Middle East, Asia Pacific and North America. The Money Transfer Segment is comprised primarily of the Company’s RIA Envia, Inc. (“RIA”) subsidiary and its operating subsidiaries, which is the third-largest global money transfer company based upon revenues and volumes. The Money Transfer Segment provides services through a sending network of agents and Company-owned stores primarily in North America and Europe, disbursing money transfers through a worldwide correspondent network. See Note 8, Segment Information, for additional information about the Company’s business segments.

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared from the records of the Company, in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, such unaudited consolidated financial statements contain all adjustments (consisting of normal interim closing procedures) necessary to present fairly the financial position of the Company as of June 30, 2010, and the results of its operations for the three- and six-month periods ended June 30, 2010 and 2009 and its cash flows for the six-month periods ended June 30, 2010 and 2009.

The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Euronet for the year ended December 31, 2009, including the notes thereto, set forth in the Company’s 2009 Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of operations for the three- and six-month periods ended June 30, 2010 are not necessarily indicative of the results to be expected for the full year ending December 31, 2010. Certain amounts in the prior year have been reclassified to conform to current period presentation.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

Multiple-deliverable revenue arrangements

Effective January 1, 2010, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force. ASU 2009-13 adds estimated selling price as acceptable evidence of fair value of undelivered products and services in revenue arrangements with multiple deliverables. Estimated selling price can be used if there is no vendor specific objective evidence or third-party evidence of fair value. Additionally, ASU 2009-13 eliminates the use of the residual method of allocating revenue and establishes the relative selling price method as the appropriate means to allocate revenue to each deliverable of an arrangement. The adoption of ASU 2009-13 did not materially affect the Company’s unaudited consolidated financial statements.

Money transfer settlement obligations

Money transfer settlement obligations are recorded in accrued expenses and other current liabilities on the Company’s Unaudited Consolidated Balance Sheets and consist of amounts owed by Euronet to money transfer recipients. As of June 30, 2010, the Company’s money transfer settlement obligations were $28.1 million.

(3) 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 potential dilution of the assumed conversion of the Company’s convertible debentures, shares issuable in connection with acquisition obligations, restricted stock and options to purchase the Company’s common stock. The following table provides the computation of diluted weighted average number of common shares outstanding:

		Three Months Ended June 30,								Six Months Ended June 30,
		2010				2009				2010				2009
Computation of diluted weighted average shares outstanding:
Basic weighted average shares outstanding			50,914,453				50,425,261				50,857,812				50,358,983
Incremental shares from assumed conversion of stock options and restricted stock			—				814,960				919,580				462,390
Diluted weighted average shares outstanding			50,914,453				51,240,221				51,777,392				50,821,373

The table includes all stock options and restricted stock that are dilutive to Euronet’s weighted average common shares outstanding during the period. For the three months ended June 30, 2010, the Company incurred a net loss; therefore, diluted loss per share is the same as basic loss per share for the period. The calculation of diluted earnings (loss) per share excludes stock options or shares of restricted stock that are anti-dilutive to the Company’s weighted average common shares outstanding of approximately 4,963,000 and 2,252,000 for the three- and six-month periods ended June 30, 2010, respectively, and of approximately 1,989,000 and 3,868,000 for the three- and six-month periods ended June 30, 2009, respectively.

The Company has convertible debentures that, if converted, would have a potentially dilutive effect on the Company’s stock. 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. The Company’s 3.50% debentures are convertible into 4.3 million shares of common stock only upon the occurrence of certain conditions. Under the if-converted method, the assumed conversion of the 3.50% debentures was anti-dilutive for the three- and six-month periods ended June 30, 2010 and 2009. The Company’s remaining 1.625% convertible debentures outstanding were repurchased in January 2010 and the assumed conversion of the then-outstanding debentures was anti-dilutive for the six-month period ended June 30, 2010 and for the three- and six-month periods ended June 30, 2009.

(4) DISCONTINUED OPERATIONS

During the fourth quarter of 2009, the Company sold Euronet Essentis Limited (“Essentis”), a U.K. software entity, in order to focus its investments and resources on its transaction processing businesses. Accordingly, Essentis’s results of operations are shown as discontinued operations in the Unaudited Consolidated Statements of Operations. Previously, Essentis’s results were reported in the EFT Processing Segment. The segment results in Note 8, Segment Information, also reflect the classification of Essentis’s results in discontinued operations. The following amounts related to Essentis have been segregated from continuing operations and reported as discontinued operations:

		Three Months Ended				Six Months Ended
(in thousands)		June 30, 2009				June 30, 2009
Revenues		$	1,835			$	3,259
Income before income taxes		$	212			$	119
Net income		$	146			$	85

(5) GOODWILL AND ACQUIRED INTANGIBLE ASSETS, NET

A summary of acquired intangible assets and goodwill activity for the six-month period ended June 30, 2010 is presented below:

		Acquired								Total
		Intangible								Intangible
(in thousands)		Assets				Goodwill				Assets
Balance as of December 31, 2009		$	112,948			$	504,650			$	617,598
Decreases:
Amortization			(11,295	)			—				(11,295	)
Other (primarily changes in foreign currency exchange rates)			(8,073	)			(46,191	)			(54,264	)
Balance as of June 30, 2010		$	93,580			$	458,459			$	552,039

Estimated annual amortization expense on intangible assets with finite lives, before income taxes, as of June 30, 2010, is expected to total $22.1 million for 2010, $18.2 million for 2011, $16.0 million for 2012, $12.0 million for 2013, $9.6 million for 2014 and $4.5 million for 2015.

The Company’s annual goodwill impairment test is performed during the fourth quarter. The Company’s annual impairment test for the year ended December 31, 2008 resulted in the Company recording an estimated non-cash goodwill impairment charge of $219.8 million in the fourth quarter of 2008 related to its RIA money transfer business and its Spanish prepaid business. The Company completed the impairment testing in the first quarter of 2009 and recorded an additional non-cash goodwill impairment charge of $8.8 million and a $1.1 million non-cash impairment charge related to a money transfer intangible asset in the first quarter of 2009. The annual impairment test completed in the fourth quarter of 2009 resulted in no impairment charges.

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 estimates or assumptions 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) DEBT OBLIGATIONS

A summary of debt obligation activity for the six-month period ended June 30, 2010 is presented below:

														1.625%				3.50%
		Revolving												Convertible				Convertible
		Credit				Other Debt				Capital				Debentures				Debentures				Term
(in thousands)		Facilities				Obligations				Leases				Due 2024				Due 2025				Loan				Total
Balance at December 31, 2009		$	39,164			$	92			$	4,507			$	1,227			$	153,927			$	129,000			$	327,917
Increases (decreases):
Net borrowings (repayments)			(39,172	)			692				(1,119	)			(1,227	)			—				(1,000	)			(41,826	)
Accretion			—				—				—				—				3,461				—				3,461
Capital lease interest			—				—				196				—				—				—				196
Foreign currency exchange (gain) loss			8				(115	)			(476	)			—				—				—				(583	)
Balance at June 30, 2010			—				669				3,108				—				157,388				128,000				289,165
Less — current maturities			—				(590	)			(1,835	)			—				—				(1,900	)			(4,325	)
Long-term obligations at June 30, 2010		$	—			$	79			$	1,273			$	—			$	157,388			$	126,100			$	284,840

In January 2010, the Company elected to redeem the remaining $1.2 million of outstanding 1.625% debentures at par. Contractual interest expense for the 1.625% convertible debentures was $1 thousand for the six months ended June 30, 2010. Contractual interest expense was $0.2 million and $0.5 million and discount accretion was $0.7 million and $1.6 million for the three and six months ended June 30, 2009, respectively. The effective interest rate was 1.625% for the period the debentures were outstanding during 2010 and 7.1% for the three and six months ended June 30, 2009.

The 3.50% convertible debentures had principal amounts outstanding of $175.0 million and unamortized discounts outstanding of $17.6 million and $21.1 million as of June 30, 2010 and December 31, 2009, respectively. The discount will be amortized through October 15, 2012. Contractual interest expense was $1.5 million and $3.1 million for the respective three- and six-month periods ended June 30, 2010

and 2009. Discount accretion was $1.7 million and $3.5 million for the three and six months ended June 30, 2010, respectively, and $1.6 million and $3.2 million for the three and six months ended June 30, 2009, respectively. The effective interest rate was 8.4% for the three and six months ended June 30, 2010 and 2009.

(7) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As of June 30, 2010, the Company had foreign currency forward contracts outstanding with a notional value of $41.3 million, primarily in euros and U.S. dollars, which were not designated as hedges and had a weighted average remaining maturity of 4.1 days. Although the Company enters into foreign currency forward contracts to offset foreign currency exposure related to the notional value of money transfer transactions collected in currencies other than the U.S. dollar, they are not designated as hedges under ASC Topic 815. This is mainly due to the relatively short duration of the contracts, typically 1 to 14 days, and the frequency with which the Company enters into them.

The Company has an office lease in a foreign country that requires payment in a currency that is not the functional currency of either party to the lease or the Company’s reporting currency. Therefore, the lease contains an embedded derivative per ASC Topic 815 and its fair value is recorded in the Unaudited Consolidated Balance Sheets.

During 2007, the Company entered into interest rate swap agreements for a total notional amount of $50 million to manage interest rate exposure related to a portion of the term loan. The interest rate swap agreements were determined to be cash flow hedges and effectively converted $50 million of the term loan to a fixed interest rate of 7.3% through the May 2009 maturity date of the swap agreements. The swap agreements required no payment by either party at their maturities.

Below are the tabular disclosures required for derivative instruments:

				Fair Values of Derivative
				Instruments
		Consolidated Balance						December 31,
(in thousands)		Sheet Location		June 30, 2010				2009
				Asset Derivatives
Derivatives not designated as hedging instruments under ASC Topic 815
Foreign currency derivative contracts - gross gains		Cash and cash equivalents		$	113			$	138
Foreign currency derivative contracts - gross losses		Cash and cash equivalents			(74	)			(102	)
Total				$	39			$	36
				Liability Derivatives
Embedded derivative in foreign lease		Other long-term liabilities		$	(198	)		$	(220	)
Total derivatives				$	(159	)		$	(184	)

		Amount of Gain Recognized in								Amount of Gain Recognized in
		OCI on Derivative (Effective								OCI on Derivative (Effective
		Portion)								Portion)
		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2010				2009				2010				2009
Derivatives in ASC Topic 815 Cash Flow Hedging Relationships
Interest rate swaps related to floating rate debt		$	—			$	353			$	—			$	830

				Amount of Gain (Loss)								Amount of Gain (Loss)
				Recognized in Income on								Recognized in Income on
		Location of Gain (Loss)		Derivative								Derivative
		Recognized in Income on		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		Derivative		2010				2009				2010				2009
Derivatives not designated as hedging instruments under ASC Topic 815
Foreign currency derivative contracts		Foreign currency exchange gain (loss), net		$	(44	)		$	42			$	99			$	5
Embedded derivative in foreign lease		Foreign currency exchange gain (loss), net			(41	)			276				22				(293	)
Total				$	(85	)		$	318			$	121			$	(288	)

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

(8) SEGMENT INFORMATION

Euronet’s reportable operating segments have been determined in accordance with ASC Topic 280, Segment Reporting. The Company currently operates in the following three reportable operating segments:

	1)		Through the EFT Processing Segment, the Company processes transactions for a network of ATMs and POS terminals across Europe, the Middle East and Asia Pacific. The Company provides comprehensive electronic payment solutions consisting of ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing and electronic recharge services for prepaid mobile airtime. Through this segment, the Company also offers a suite of integrated electronic financial transaction (“EFT”) software solutions for electronic payment and transaction delivery systems.
	2)		Through the epay Segment, the Company provides distribution of prepaid mobile airtime and other electronic payment products and collection services in Europe, the Middle East, Asia Pacific and North America.
	3)		Through the Money Transfer Segment, the Company provides global consumer-to-consumer money transfer and bill payment services through a sending network of agents and Company-owned stores primarily in North America and Europe, disbursing money transfers through a worldwide correspondent network. Bill payment services are offered primarily in the U.S.

In addition, in its administrative division, “Corporate Services, Eliminations and Other,” the Company accounts for non-operating activity, share-based compensation expense, certain intersegment eliminations and the costs of providing corporate and other administrative services to the three segments. These services are not directly identifiable with the Company’s reportable operating segments.

The following tables present the segment results of the Company’s operations for the three- and six-month periods ended June 30, 2010 and 2009:

		For the Three Months Ended June 30, 2010
														Corporate
														Services,
		EFT								Money				Eliminations
(in thousands)		Processing				epay				Transfer				and Other				Consolidated
Total revenues		$	46,488			$	137,689			$	60,051			$	—			$	244,228
Operating expenses:
Direct operating costs			22,790				109,754				28,292				—				160,836
Salaries and benefits			6,863				7,154				13,886				3,545				31,448
Selling, general and administrative			4,116				7,429				8,666				1,639				21,850
Depreciation and amortization			4,486				3,822				4,967				277				13,552
Total operating expenses			38,255				128,159				55,811				5,461				227,686
Operating income (loss)		$	8,233			$	9,530			$	4,240			$	(5,461	)		$	16,542

		For the Three Months Ended June 30, 2009
														Corporate
														Services,
		EFT								Money				Eliminations
(in thousands)		Processing				epay				Transfer				and Other				Consolidated
Total revenues		$	45,592			$	145,253			$	57,769			$	—			$	248,614
Operating expenses:
Direct operating costs			19,656				117,342				28,055				—				165,053
Salaries and benefits			7,443				6,793				13,103				3,746				31,085
Selling, general and administrative			4,157				5,409				8,847				2,498				20,911
Depreciation and amortization			4,537				3,598				5,083				323				13,541
Total operating expenses			35,793				133,142				55,088				6,567				230,590
Operating income (loss)		$	9,799			$	12,111			$	2,681			$	(6,567	)		$	18,024

		For the Six Months Ended June 30, 2010
														Corporate
														Services,
		EFT								Money				Eliminations
(in thousands)		Processing				epay				Transfer				and Other				Consolidated
Total revenues		$	95,054			$	283,069			$	116,108			$	—			$	494,231
Operating expenses:
Direct operating costs			46,718				225,353				54,626				—				326,697
Salaries and benefits			13,104				15,479				28,083				6,954				63,620
Selling, general and administrative			7,870				12,660				17,610				2,903				41,043
Depreciation and amortization			9,410				7,977				10,057				656				28,100
Total operating expenses			77,102				261,469				110,376				10,513				459,460
Operating income (loss)		$	17,952			$	21,600			$	5,732			$	(10,513	)		$	34,771

		For the Six Months Ended June 30, 2009
														Corporate
														Services,
		EFT								Money				Eliminations
(in thousands)		Processing				epay				Transfer				and Other				Consolidated
Total revenues		$	91,798			$	279,776			$	110,737			$	—			$	482,311
Operating expenses:
Direct operating costs			38,611				226,377				53,613				—				318,601
Salaries and benefits			14,455				13,217				24,923				7,086				59,681
Selling, general and administrative			8,304				9,951				17,662				4,062				39,979
Goodwill and acquired intangible assets impairment			—				—				9,884				—				9,884
Depreciation and amortization			8,719				7,244				9,845				636				26,444
Total operating expenses			70,089				256,789				115,927				11,784				454,589
Operating income (loss)		$	21,709			$	22,987			$	(5,190	)		$	(11,784	)		$	27,722

(9) FAIR VALUE MEASUREMENTS

The carrying amounts of cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt obligations approximate fair values due to their short maturities. The carrying values of the Company’s term loan due 2014 and revolving credit agreements approximate fair values because interest is based on London Inter-Bank Offered Rate (“LIBOR”) that resets at various intervals of less than one year. The following table provides the estimated fair values of the Company’s other financial instruments, based on quoted market prices or significant other observable inputs.

		As of
		June 30, 2010								December 31, 2009
		Carrying								Carrying
(in thousands)		Value				Fair Value				Value				Fair Value
3.50% convertible debentures, unsecured, due 2025			(157,388	)			(160,125	)			(153,927	)			(162,313	)
Foreign currency derivative contracts			39				39				36				36
Embedded derivative in foreign lease			(198	)			(198	)			(220	)			(220	)
1.625% convertible senior debentures, unsecured, due 2024			—				—				(1,227	)			(1,224	)

The Company’s assets and liabilities recorded at fair value on a recurring basis using significant other observable inputs are the foreign currency derivative contracts and the embedded derivative in foreign lease. The Company values foreign currency derivative contracts using foreign currency exchange quotations for similar assets and liabilities. The embedded derivative in foreign lease is valued using present value techniques and foreign currency exchange quotations.

Certain assets are measured at fair value on a non-recurring basis. During the first quarter of 2009, the Company finalized the assessment of the fair value of the goodwill related to its RIA money transfer business and its Spanish prepaid business and recorded an impairment charge of $8.8 million as discussed in Note 5, Goodwill and Acquired Intangible Assets, Net. The fair values were determined using significant unobservable inputs. The $258.8 million fair value of goodwill was determined by calculating its implied fair value as the excess of the fair value of the respective entity over the fair value of its net assets. Additionally, during the first quarter of 2009, management determined that an acquired intangible asset associated with a previous acquisition in the Money Transfer Segment had no value and, accordingly, the Company wrote off the remaining net book value of the intangible asset of $1.1 million.

(10) GUARANTEES

As of June 30, 2010, the Company had $53.9 million of stand-by letters of credit/bank guarantees issued on its behalf, of which $10.1 million are collateralized by cash deposits held by the respective issuing banks.

Under certain circumstances, Euronet grants guarantees in support of obligations of subsidiaries. As of June 30, 2010, the Company granted off balance sheet guarantees for cash in various ATM networks amounting to $18.3 million over the terms of the cash supply agreements and performance guarantees amounting to approximately $27.0 million over the terms of the agreements with the customers.

From time to time, Euronet enters into agreements with unaffiliated parties 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. Our 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 June 30, 2010, the balance of ATM network cash for which the Company was responsible was approximately $230 million. The Company maintains insurance policies to mitigate this exposure;
	•		In connection with the license of proprietary systems to customers, Euronet provides certain warranties and infringement indemnities to the licensee, which generally warrant that such systems do not infringe on intellectual property owned by third parties and that the systems will perform in accordance with their specifications;
	•		Euronet has entered into purchase and service agreements with vendors and consulting agreements with providers of consulting services, pursuant to which the Company has agreed to indemnify certain of such vendors and consultants, respectively, against third-party claims arising from the Company’s use of the vendor’s product or the services of the vendor or consultant;
	•		In connection with acquisitions and dispositions of subsidiaries, operating units and business assets, the Company has entered into agreements containing indemnification provisions, which can be generally described as follows: (i) in connection with acquisitions made by Euronet, the Company has agreed to indemnify the seller against third party claims made against the seller relating to the subject subsidiary, 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;
	•		Euronet has entered into agreements with certain third parties, including banks that provide fiduciary and other services to Euronet or to the Company’s benefit plans. Under such agreements, the Company has agreed to indemnify such service providers for third party claims relating to the carrying out of their respective duties under such agreements; and
	•		The Company has obtained surety bonds in compliance with money transfer licensing requirements of the applicable governmental authorities.

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. 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 June 30, 2010 or December 31, 2009.

(11) INCOME TAXES

The Company’s effective tax rates for continuing operations were 136.2% and 28.7% for the three-month periods ended June 30, 2010 and 2009, respectively, and were 81.1% and 74.6% for the six-month periods ended June 30, 2010 and 2009, respectively. The effective tax rates were significantly influenced by the foreign currency exchange gains and losses in the respective periods and by the goodwill and acquired intangible assets impairment charge in the first quarter of 2009. Excluding foreign currency exchange results and the impairment charge from pre-tax income, as well as the related tax effects for these items, the Company’s effective tax rates were 36.2% and 46.8% for the three months ended June 30, 2010 and 2009, respectively, and 39.0% and 44.1% for the six months ended June 30, 2010 and 2009, respectively.

The increase in the effective tax rate, as adjusted, for the second quarter of 2010 compared to the applicable statutory rate of 35% is primarily related to the Company’s U.S. tax position. For the three- and six-month periods ended June 30, 2010, the Company has recorded a valuation allowance against its U.S. federal tax net operating losses as it is more likely than not that a tax benefit will not be realized. Accordingly, the federal income tax benefit associated with pre-tax book losses generated by the Company’s U.S. entities has

not been recognized in these periods. For the second quarter of 2010, this increase was partly offset by a $1.0 million adjustment to the reserve related to deferred tax assets generated from prior U.S. net operating losses. Additionally, the effective tax rate for the first half of 2010 is lower due to a $0.8 million adjustment related to a foreign tax law change.

(12) CONTINGENCIES

In the second quarter of 2009, the Antitrust Division of the United States Department of Justice (the “DOJ”) served Continental Exchange Solutions, Inc. d/b/a RIA Financial Services (“CES”), an indirect, wholly-owned subsidiary of the Company, with a grand jury subpoena requesting documents from CES and its affiliates in connection with an investigation into possible price collusion related to money transmission services to the Dominican Republic (“D.R.”) during the period from January 1, 2004 to the date of the subpoena. The Company acquired all of the stock of RIA Envia, Inc., the parent of CES, in April 2007. CES foreign exchange transactions between the U.S and the D.R. generated approximately 0.3% of the Company’s 2009 consolidated revenues. The Company and CES are fully cooperating with the DOJ in its investigation.

The Company believes that, during the period covered by the DOJ investigation, CES generally derived part of its charge for exchanging U.S. dollars into D.R. pesos from a reference rate recommended by ADEREDI, a trade association in the D.R. composed of a CES subsidiary and other D.R. money transfer firms. The Company further believes, however, that CES set its own service fee on the D.R. transactions and its overall transaction price to customers. Customers were also free during this time period to use CES and other firms to transmit dollars into the D.R., without conversion into D.R. pesos, and the Company believes such transmissions occurred with increasing frequency over the course of this time period.

At this time, the Company is unable to predict the outcome of the DOJ investigation, or, if charges were to be brought against CES, the possible range of loss, if any, associated with the resolution of any such charges. Nor can the Company predict any potential effect on the Company’s business, results of operations or financial condition arising from such charges or potential collateral consequences, which could include fines, penalties, limitations on or revocation of CES’s license to engage in the money transfer business in one or more states, and civil liability. In addition, the Company has incurred and may continue to incur significant fees and expenses in connection with the DOJ investigation and related matters.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

COMPANY OVERVIEW, GEOGRAPHIC LOCATIONS AND PRINCIPAL PRODUCTS AND SERVICES

Euronet Worldwide, Inc. (“Euronet” the “Company,” “we” or “us”) is a leading electronic payments provider. We offer payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Our primary product offerings include comprehensive automated teller machine (“ATM”), point-of-sale (“POS”) and card outsourcing services; electronic distribution of prepaid mobile airtime and other prepaid products; and global consumer money transfer services. As of June 30, 2010, we operate in the following three principal business segments:

	•		The EFT Processing Segment, which processes transactions for a network of 10,408 ATMs and approximately 57,000 POS terminals across Europe, the Middle East and Asia Pacific. We provide comprehensive electronic payment solutions consisting of ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing and electronic recharge services for prepaid mobile airtime. Through this segment, we also offer a suite of integrated electronic financial transaction (“EFT”) software solutions for electronic payment and transaction delivery systems.
	•		The epay Segment, which provides distribution of prepaid mobile airtime and other electronic payment products and collection services for various prepaid products, cards and services. Including terminals operated by unconsolidated subsidiaries, we operate a network of approximately 515,000 POS terminals providing electronic processing of prepaid mobile airtime top-up services in Europe, the Middle East, Asia Pacific and North America.
	•		The Money Transfer Segment, which provides global consumer-to-consumer money transfer and bill payment services through a sending network of agents and Company-owned stores primarily in North America and Europe, disbursing money transfers through a worldwide correspondent network. The Money Transfer Segment originates and terminates transactions through a network of approximately 104,400 locations, which include sending agents and Company-owned stores, and an extensive correspondent network in 120 countries. Bill payment services are offered primarily in the U.S.

We have six processing centers in Europe, two in Asia Pacific and two in North America. We have 25 principal offices in Europe, seven in North America, six in Asia Pacific and one in the Middle East. Our executive offices are located in Leawood, Kansas, USA. With approximately 76% of our revenues denominated in currencies other than the U.S. dollar, any significant changes in currency exchange rates will likely have a significant impact on our results of operations.

SOURCES OF REVENUES AND CASH FLOW

Euronet earns revenues and income based on ATM management fees, transaction fees and commissions, professional services, software licensing fees and software maintenance agreements. Each business segment’s sources of revenue are described below.

EFT Processing Segment – Revenues in the EFT Processing Segment, which represented approximately 19% of total consolidated revenues for the first half of 2010, are derived from fees charged for transactions made by cardholders on our proprietary network of ATMs, as well as fixed management fees and transaction fees we charge to banks for operating ATMs and processing debit and credit cards under outsourcing agreements. Through our proprietary network, we generally charge fees for four types of ATM transactions: i) cash withdrawals, ii) balance inquiries, iii) transactions not completed because the relevant card issuer did not give authorization, and iv) prepaid telecommunication recharges. Revenues in this segment are also derived from license fees, professional services and maintenance fees for software and sales of related hardware. Software license fees are the fees we charge to license our proprietary application software to customers. Professional service fees consist of charges for customization, installation and consulting services to customers. Software maintenance revenues represent the ongoing fees charged for maintenance and support for customers’ software products. Hardware sales are derived from the sale of computer equipment necessary for the respective software solution.

epay Segment – Revenues in the epay Segment, which represented approximately 57% of total consolidated revenues for the first half of 2010, are primarily derived from commissions or processing fees received from telecommunications service providers for the sale and distribution of prepaid mobile airtime. We also generate revenues from commissions earned from the distribution of other electronic payment products. Due to certain provisions in our mobile phone operator agreements, the operators have the ability to reduce the overall commission paid on each top-up transaction. 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 retailers negotiate directly with the mobile phone operators for their own commission rates, which also limits our ability to pass through reductions in commissions. Agreements with mobile operators are important to the success of our business. These agreements permit us to distribute prepaid mobile airtime to the mobile operators’ customers. Other

products offered by this segment include prepaid long distance calling card plans, prepaid Internet plans, prepaid debit cards, prepaid gift cards, prepaid vouchers, transport payments, lottery payments, bill payment, money transfer and prepaid content such as music and games.

Money Transfer Segment – Revenues in the Money Transfer Segment, which represented approximately 24% of total consolidated revenues for the first half of 2010, are primarily derived from charging a transaction fee and retaining the difference between the price of foreign currency purchased at wholesale exchange rates and sold to consumers at retail exchange rates. We have an origination network in place comprised of agents and Company-owned stores primarily in North America and Europe and a worldwide network of correspondent agents, consisting primarily of financial institutions in the transfer destination countries. Origination 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.

OPPORTUNITIES AND CHALLENGES

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;
	•		the ability to develop products or services to drive increases in transactions;
	•		the expansion of our various business lines in markets where we operate and in new markets;
	•		the entrance into additional card acceptance and ATM management agreements with banks;
	•		the ability to obtain required licenses in markets we intend to enter or expand services;
	•		the availability of financing for expansion;
	•		the ability to efficiently install ATMs contracted under newly awarded outsourcing agreements;
	•		the ability to renew existing contracts at profitable rates;
	•		the ability to maintain pricing and interchange fees at current levels;
	•		the 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.

epay Segment – The continued expansion and development of the epay Segment business will depend on various factors, including, but not necessarily limited to, the following:

	•		the ability to negotiate new agreements in additional markets with mobile phone operators, agent financial institutions and retailers;
	•		the ability to use existing expertise and relationships with mobile operators and retailers to our advantage;
	•		the continued use of third-party providers such as ourselves to supply electronic processing solutions for prepaid 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;
	•		our market share of the retail distribution capacity;
	•		the level of commission that is paid to the various intermediaries in the prepaid distribution chain;
	•		our ability to fully recover monies collected by retailers;
	•		our ability to add new and differentiated prepaid products in addition to those offered by mobile operators;
	•		the ability to take advantage of cross-selling opportunities with our Money Transfer Segment, including providing money transfer services through our prepaid locations; and
	•		the availability of financing for further expansion.

Money Transfer Segment – The expansion and development of our money transfer 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;
	•		the ability to maintain our agent and correspondent networks;
	•		the ability to offer our products and services or develop new products and services at competitive prices to drive increases in transactions;
	•		the expansion of our services in markets where we operate and in new markets;
	•		the ability to strengthen our brands;
	•		our ability to fund working capital requirements;

	•		our ability to recover from agents funds collected from customers and our ability to recover advances made to correspondents;
	•		our ability to maintain compliance with the regulatory requirements of the jurisdictions in which we operate or plan to operate;
	•		the ability to take advantage of cross-selling opportunities with our epay Segment, including providing prepaid services through RIA’s stores and agents worldwide;
	•		the 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;
	•		our ability to continue to successfully integrate RIA with our other operations; and
	•		our ability to successfully expand our agent network in Europe using our Payment Services Directive license.

Corporate Services, Eliminations and Other - In addition to operating in our principal business segments described above, our “Corporate Services, Elimination and Other” category includes non-operating activity, certain inter-segment eliminations and the cost of providing corporate and other administrative services to the business segments, including share-based compensation expense. These services are not directly identifiable with our business segments.

SEGMENT SUMMARY RESULTS OF OPERATIONS

Revenues and operating income by segment for the three- and six-month periods ended June 30, 2010 and 2009 are summarized in the tables below:

										Year-over-Year Change
		Revenues for the Three								Increase				Increase				Revenues for the Six								Year-over-Year Change
		Months Ended June 30,								(Decrease)				(Decrease)				Months Ended June 30,								Increase				Increase
(dollar amounts in thousands)		2010				2009				Amount				Percent				2010				2009				Amount				Percent
EFT Processing		$	46,488			$	45,592			$	896				2	%		$	95,054			$	91,798			$	3,256				4	%
epay			137,689				145,253				(7,564	)			(5	)%			283,069				279,776				3,293				1	%
Money Transfer			60,051				57,769				2,282				4	%			116,108				110,737				5,371				5	%
Total		$	244,228			$	248,614			$	(4,386	)			(2	)%		$	494,231			$	482,311			$	11,920				2	%

		Operating Income (Loss)								Year-over-Year Change								Operating Income (Loss)								Year-over-Year Change
		for the Three Months								Increase				Increase				for the Six Months Ended								Increase				Increase
		Ended June 30,								(Decrease)				(Decrease)				June 30,								(Decrease)				(Decrease)
(dollar amounts in thousands)		2010				2009				Amount				Percent				2010				2009				Amount				Percent
EFT Processing		$	8,233			$	9,799			$	(1,566	)			(16	)%		$	17,952			$	21,709			$	(3,757	)			(17	)%
epay			9,530				12,111				(2,581	)			(21	)%			21,600				22,987				(1,387	)			(6	)%
Money Transfer			4,240				2,681				1,559				58	%			5,732				(5,190	)			10,922				n/m
Total			22,003				24,591				(2,588	)			(11	)%			45,284				39,506				5,778				15	%
Corporate services			(5,461	)			(6,567	)			1,106				(17	)%			(10,513	)			(11,784	)			1,271				(11	)%
Total		$	16,542			$	18,024			$	(1,482	)			(8	)%		$	34,771			$	27,722			$	7,049				25	%