1029199--3/1/2010--EURONET_WORLDWIDE

related topics

{regulation, government, change}

{system, service, information}

{operation, international, foreign}

{condition, economic, financial}

{acquisition, growth, future}

{tax, income, asset}

{customer, product, revenue}

{competitive, industry, competition}

{stock, price, share}

{stock, price, operating}

{regulation, change, law}

{capital, credit, financial}

{gas, price, oil}

{provision, law, control}

{personnel, key, retain}

{investment, property, distribution}

{property, intellectual, protect}

In the event that we need debt financing in the future, recent uncertainty in the credit markets could affect our ability to obtain debt financing on reasonable terms. Increases in interest rates will adversely impact our results from operations. Our business may suffer from risks related to acquisitions and potential future acquisitions. We may be required to recognize additional impairment charges related to long-lived assets and goodwill recorded in connection with our acquisitions. A lack of business opportunities or financial or other resources may impede our ability to continue to expand at desired levels, and our failure to expand operations could have an adverse impact on our financial condition. We are subject to business cycles, seasonality and other outside factors that may negatively affect our business. A prolonged economic slowdown or lengthy or severe recession in the U.S. or elsewhere could harm our operations. The growth and profitability of our prepaid business is dependent on certain factors that vary from market to market. Our prepaid mobile airtime top-up and money transfer businesses may be susceptible to fraud and/or credit risks occurring at the retailer and/or consumer level. Because we typically enter into short-term contracts with mobile phone operators and retailers, our top-up business is subject to the risk of non-renewal of those contracts, or renewal under less favorable terms. The processes and systems we employ may be subject to patent protection by other parties. The stability and growth of our EFT Processing Segment depend on maintaining our current card acceptance and ATM management agreements with banks and international card organizations, and on securing new arrangements for card acceptance and ATM management. Retaining the founder and key executives of our company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success. Our operating results depend in part on the volume of transactions on ATMs in our network and the fees we can collect from processing these transactions. We generally have little control over the ATM transaction fees established in the markets where we operate, and therefore, cannot control any potential reductions in these fees. Our operating results in the money transfer business depend in part on continued worker immigration patterns, our ability to expand our share of the existing electronic market and to expand into new markets and our ability to continue complying with regulations issued by the Office of Foreign Assets Control ( OFAC ), Bank Secrecy Act ( BSA ), Financial Crimes Enforcement Network ( FINCEN ), PATRIOT Act regulations or any other existing or future regulations that impact any aspect of our money transfer business. Changes in state, federal or foreign laws, rules and regulations could impact the money transfer industry, making it more difficult for our customers to initiate money transfers. Changes in banking industry regulation and practice could make it more difficult for us and our agents to maintain depository accounts with banks. Developments in electronic financial transactions could materially reduce our transaction levels and revenues. In some cases, we are dependent upon international card organizations and national transaction processing switches to provide assistance in obtaining settlement from card issuers of funds relating to transactions on our ATMs. Because our business is highly dependent on the proper operation of our computer network and telecommunications connections, significant technical disruptions to these systems would adversely affect our revenues and financial results. We are subject to the risks of liability for fraudulent bankcard and other card transactions involving a breach in our security systems, breaches of our information security policies or safeguards, as well as for ATM theft and vandalism. We could incur substantial losses if one of the third party depository institutions we use in our operations were to fail. We are required under German law and the rules of financial transaction switching networks in all of our markets to have sponsors to operate ATMs and switch ATM transactions. Our failure to secure sponsor arrangements in Germany or any other market could prevent us from doing business in that market. If we are unable to maintain our money transfer agent and correspondent networks, our business may be adversely affected. If consumer confidence in our money transfer business or brands declines, our business may be adversely affected. Our money transfer service offerings are dependent on financial institutions to provide such offerings. Our competition in the EFT Processing Segment, Prepaid Processing Segment and Money Transfer Segment include large, well financed companies and financial institutions larger than us with earlier entry into the market. As a result, we may lack the financial resources and access to capital needed to capture increased market share. Competition in our EFT Processing Segment has increased over the last several years, increasing the risk that certain of our long-term bank outsourcing contracts may be terminated or not renewed upon expiration. We conduct a significant portion of our business in Central and Eastern European countries, and we have subsidiaries in the Middle East and Asia Pacific, where the risk of continued political, economic and regulatory change that could impact our operating results is greater than in the U.S. or Western Europe. We conduct business in many international markets with complex and evolving tax rules, including value added tax rules, which subjects us to international tax compliance risks. As allowable under the Internal Revenue Code (the Code ), the interest deduction from our convertible debentures is based on a comparable interest rate for a traditional, nonconvertible, fixed rate debt instrument with similar terms. This allowable deduction is in excess of the stated interest rate. This deduction may be deferred, limited or eliminated under certain conditions. Increases in taxes could negatively impact our operating results. Because we are a multinational company conducting a complex business in many markets worldwide, we are subject to legal and operational risks related to staffing and management, as well as a broad array of local legal and regulatory requirements. Because we derive our revenues from a multitude of countries with different currencies, our business is affected by local inflation and foreign currency exchange rates and policies. 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. Our directors and officers, together with the entities with which they are associated, owned approximately 9% of our Common Stock as of December 31, 2009, giving them significant control over decisions related to our Company. We are authorized to issue up to a total of 90 million shares of Common Stock, potentially diluting equity ownership of current holders and the share price of our Common Stock. An additional 9.8 million shares of Common Stock, representing 19% of the shares outstanding as of December 31, 2009, could be added to our total Common Stock outstanding through the exercise of options or the issuance of additional shares of our Common Stock pursuant to existing convertible debt and other agreements. Once issued, these shares of Common Stock could be traded into the market and result in a decrease in the market price of our Common Stock.

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1029199--3/1/2010--EURONET_WORLDWIDE_INC