Euronet Worldwide Inc (EEFT) 2007 Q4 法說會逐字稿

Greetings and welcome to the Euronet Worldwide full-year and fourth-quarter 2007 earnings conference call.

At this time all participants are in a listen-only mode.

A brief question-and-answer session will follow the formal presentation.

(OPERATOR INSTRUCTIONS) As a reminder this conference is being recorded.

It is now my pleasure to introduce your host, Mr.

Jeff Newman, Executive Vice President and General Counsel for Euronet Worldwide.

Thank you.

Mr.

Newman, you may begin.

Thank you.

Good morning and welcome everyone to Euronet Worldwide's quarterly results conference call.

We will be presenting our results for the first quarter -- I'm sorry -- the fourth-quarter and full-year 2007 on this call.

We have Mike Brown, our CEO; Kevin Caponecchi, our President; and Rick Weller, our CFO, with us today.

Before we begin, I need to make a statement concerning forward-looking statements on the call.

During this conference call, representatives of Euronet Worldwide will make statements concerning the Company's or management's intentions, expectations or predictions of future performance including selected financial guidance concerning the Company's results.

These statements are forward-looking statements.

Euronet's actual results may vary materially from those predicted or anticipated in such forward-looking statements as a result of a number of factors including competition, technological developments affecting the market for the Company's products and services, foreign exchange fluctuations, and changes in laws and regulations affecting Euronet's business.

Additional explanation of these factors and other factors affecting the Company's results are set forth from time to time in Euronet's periodic reports filed with the U.S.

Securities and Exchange Commission including but not limited to Form 10-K for the period ended December 31, 2006, and its Form 10-Q for the period ended September 30, 2007.

Copies of those filings and our other public filings with the SEC may be obtained by contacting the Company or the SEC.

Now I'll turn the call over to Rick Weller, our CFO.

Rick?

Jeff, thank you and welcome, everyone.

Full-year 2007 revenues were $917.6 million, up 46% over 2006.

Operating income was a $77.2 million, up 49% over last year.

Adjusted EBITDA of $133.3 million was a 50% increase over 2006's EBITDA of $88.8 million.

Full-year cash earnings per share came in at $1.27, a 5% increase over 2006's cash EPS.

As we discussed in the press release, in the fourth quarter we recognized the benefit of an excise tax refund.

While the refund which amounted to $0.14 a share is included in the fourth-quarter and full-year operating income, we did not include it in our cash EPS numbers because of its non-recurring nature and because it was not included in our guidance for the fourth quarter.

Nonetheless, we will get real economic benefit from this refund and expect to use its proceeds to enhance our future financial performance.

Let's turn to slide 6.

Again this year we've seen a strong increase in 2007's revenues over 2006.

This year we broke the $900 million revenue mark and on an annualized run rate basis, we are generating revenues now in excess of $1 billion a year.

To slide 7, please.

On slide 7, you can see that in 2007 we continued to post substantial improvements in transaction growth.

This represents a 36% increase in transactions processed over 2006 with similar improvements coming from each of the EFT and prepaid segments.

EFT transaction growth was principally driven by a 28% increase in ATMs managed and operated.

I'll also point out that of our 28% increase in ATMs, approximately 65% came from organic growth from our customers' additions of ATMs throughout the year and approximately 15% came from adding more Euronet-owned ATMs in certain markets such as Poland, Ukraine, Bulgaria and Romania.

Next slide, please.

For the full year, RIA processed more than 15 million money transfers.

This represents transaction growth of 12% year-over-year.

And as we have been seeing an improving trend in Mexican transactions year-over-year growth rate from a decline in the first quarter to a [.07%] increase in the fourth quarter.

We are especially pleased with our overall growth rate in light of declines in the Mexican traffic in the first half of the year.

RIA's international business which was a key reason behind our acquisition of RIA grew at approximately 70% year-over-year making a significant contribution to the overall growth rate.

Now let's go to a discussion on operating income.

Next slide, please.

Here on slide 9, you can see in the yellow and blue bars of 2007 the $77 million in operating income and the $133 million in adjusted EBITDA I referred to a few slides back.

This chart also reflects the continued improvement in our earnings and you can see that our adjusted EBITDA expanded more than operating income.

The EBITDA expansion over operating income is largely the result of heavy purchase price amortization resulting from the RIA acquisitions.

Now to slide 10 for a segment focus.

In our EFT segment, we posted 19% year-over-year growth in revenue and a 5% growth in operating income.

The smaller growth in operating income was primarily the result of important market expansion investments we made in China, Ukraine, Bulgaria and the development of card acquiring products in Europe together with charges in the fourth quarter related to certain fraud transactions.

During the fourth quarter of 2007, the Company recorded losses of approximately $1.7 million primarily in Poland and Hungary as a result of certain fraudulent transactions completed through our network.

The Company has taken remedial action to prevent similar transactions and expects the amounts to be reduced significantly in the first quarter of 2008 and eliminated in the second quarter.

Had we not had the $1.7 million in fraud charges in the fourth quarter and a $1.2 million settlement claim that happened in the year 2000, the EFT segment's operating incomes would have improved 13% year-over-year.

Net-net our EFT business continues to benefit from good organic growth in both ATMs and transactions as well as continued signing of new outsourcing agreements.

In our prepaid segment, we posted 22% year-over-year growth despite maturing trends in our UK and Australia markets.

Moreover, as we previously disclosed, we acquired in the first quarter a competing prepaid processor in the UK.

That acquisition contributed about 10% of the prepaid segment's annual growth.

Operating income and adjusted EBITDA of the prepaid segment increased by 8% and 10% respectively after excluding the benefit of the non-recurring excise tax benefit.

The smaller growth in operating income and adjusted EBITDA was largely the result of the full-year effect in 2007 of the exquisite Spanish mobile operator commission rate reduction which went into effect in May of 2006, lowering operating margins -- also contributing was lower operating margins of the acquired UK prepaid processor and increased marketing expansion costs to enter markets such as Italy and India.

All in all, the prepaid segment continued to post good organic growth year-over-year in double-digit rates.

In the Money Transfer Segment, we continued to see mid teen growth rates against the pressures of the Mexican transfers.

Our mix continues to shift to transfers originated outside the United States where we have experienced very strong growth rates and expanding margins.

Money Transfer posted 13% EBITDA margins and you will see in a subsequent slide that our fourth-quarter EBITDA margins were 14.1%, reflecting the leverage of growth together with the continued shift in transfers originated outside the United States.

Mike will provide additional insights to each of these segments in a few minutes.

Let's go to discuss some EPS on the next slide, slide 11.

For the full year 2007, our diluted cash earnings per share of $1.27 is a 5% increase over 2006 diluted share EPS of $1.21.

Note that this cash EPS does not include the $0.14 benefit of the excise tax refund discussed earlier.

With respect to the EPS calculation, the convertible shares of the 140 million convert were dilutive for the full year while the 175 million convert was not.

We expect the 140 million convert to continue to be dilutive but the 175 million convert would not until our earnings per share are nearly $0.40 a quarter.

Now that we've hit the highlights for the year, let's make a few comments on the quarter.

Go to slide 12.

For the fourth quarter, the Company delivered revenues of $263.7 million; operating income of $31.1 million; adjusted EBITDA of $46.7 million; and cash earnings per share of $0.34 excluding the $0.13 per share impact of the excise tax on the fourth quarter.

Note that the $0.13 is different by $0.01 from the full year $0.14 due to the weighted average shares for the quarter versus the full year.

Had we not recorded the benefit, our fourth-quarter operating income still would have increased 30% over the fourth quarter last year and EBITDA would have increased by 44% when comparing to the same period.

Cash EPS increased 3% in the fourth quarter over last year's quarter and reflects the increased debt cost we incurred with the RIA acquisition.

We paid down $26 million of that debt in 2007 and expect to continue to reduce debt throughout 2008 which will in turn reduce interest costs.

If we move to slide 13, we will start to look at each area a little more closely.

Here on slide 13, you can not only see that the fourth quarter 2007 continued improvement over '06 and '05, you can also see that the '07 numbers were up nicely over '06, largely the result of adding RIA into the business for the first time in 2007.

Let's move now onto slide 14.

On slide 14, we illustrate quarter-over-quarter transaction growth.

The 33% increase in transactions year-over-year has been instrumental in the revenue growth I reviewed on the previous slide.

We continue to see transaction growth in both EFT and prepaid.

Now to slide 15 for Money Transfer transactions.

Slide 15.

In the fourth quarter, RIA posted -- processed 4 million money transfers.

This represents transaction growth of approximately 13% year-over-year.

You can see in this chart how the business continues to grow through transfers sent to countries other than Mexico.

I think this clearly illustrated the continued mix shift to markets other than Mexico which are growing faster and producing more profits.

Let's turn to slide 16.

Consistent with revenue growth, we see our operating profit indicators of operating income and EBITDA continue to reflect growth of our business.

Given our fourth quarter's $34.5 million EBITDA excluding the federal excise tax benefit, we are almost at an annualized rate -- run rate of approximately $138 million.

And if you accept that the segment's float earnings of more than $1 million a quarter are operational in nature rather than investment, we are at approximately $142 million run rate.

Slide 17, please.

Here on slide 17, let's take a look at the segment's year-over-year quarterly results.

The EFT segment grew year-over-year revenues by 26% and OP income grew by 13%.

The difference in the margin expansion generally relates to the expansion in China, certain Eastern European markets, increased depreciation charges, and the investments we are making in the card-processing business together with the $1.7 million fraud charges we took in the fourth quarter which I discussed earlier.

Had we not experienced the fraud events in the fourth quarter, our EFT segment operating income would have increased by 31% year-over-year.

In the prepaid segment, we grew our revenues year-over-year by 26% and operating income increased by 10% again after excluding the benefit of the non-recurring excise refund.

The expansion of the operating income on a year-over-year basis was impacted by the addition of the acquired prepaid processor which had lower operating margins and the expansion costs of entering the Indian and Italian markets.

Our new segment this year, Money Transfer, grew quarterly revenues year-over-year by 17%.

This is presented on a pro forma basis to help better understand the fundamental developments in the business.

As you can see in the operating margins and EBITDA margins that the Money Transfer business nicely benefits from volume expansion.

Moreover, as I mentioned earlier, the Money Transfer Segment posted EBITDA margins of 14.1% this quarter.

This expansion is the result of both increased volume and continued shift in mix toward transactions originated outside the U.S.

which generally experience better fees and gross margins.

Finally, as it relates to corporate and other, we recorded $1.3 million of professional fees and other expenses in regard to the termination of a purchase agreement to acquire a small money transfer company.

Mike will make additional comments again on the segments in a few minutes.

Our diluted earnings per share of $0.34 were in line with our expectations for the fourth quarter.

This $0.34 does not include the $0.14 benefit of the excise tax or charges related to the abandoned acquisition recorded in the fourth quarter.

You should refer to the exhibits for a detailed reconciliation of the cash EPS.

Also as we look forward to the first quarter, we provided guidance in our press release of cash EPS of $0.29 to $0.30 per share.

This reduced cash EPS is principally the impacts of seasonality between fourth and first quarters together with lighter interest income earned on excess cash.

As you have historically known, both our EFT and prepaid businesses are seasonally impacted in the fourth and first quarters.

Seasonality in the first quarter is more pronounced this year versus prior years due to the inclusion of the money transfer business which is more subject to seasonal patterns.

The first quarter is always the lowest.

While I don't like to see seasonal impacts, it is a more significant part of our business but we should see the positive impacts of seasonality in later quarters.

To slide 19, since the third quarter 2007 closed, our balance sheet changed in certain key areas but mostly due to timing.

Our cash continues to increase as a result of the production of free cash flows.

I'll note that we had triggered our revolving line of credit prior to the end of the year to accommodate year-end cash needs in certain parts of the business.

Subsequent to year end, we repaid the draw and accordingly our debt is back to positions similar to September levels.

I'll also note that as a result of the termination of the small Money Transfer acquisition I just mentioned, approximately $27 million of restricted cash at the end of the year will move to unrestricted in the first quarter.

There were no other significant changes from September 30 in the balance sheet.

Net-net, our balance sheet continues to strengthen.

Before I turn it over to Mike, let me make a few brief comments about MoneyGram.

As many of you know over the past few weeks, MoneyGram has disclosed that they had to recognize significantly greater losses related to valuation declines in their investment portfolio and that they have entered into definitive agreements with Thomas Lee partners and Goldman Sachs for financing of approximately $1.5 billion.

The closing of their transaction is subject to several conditions including a "go shop" provision whereby other interested parties have until March 7th of 2008 to submit a competitive proposal.

We are currently evaluating certain alternatives which would enable us to make a counter proposal to the Board of MoneyGram.

Our proposal as currently contemplated would be accretive.

However, we can make no assurance -- we cannot assure you that we will ultimately make a counter bid or that if we do the MoneyGram Board of Directors will find it superior to the T.

H.

Lee and Goldman Sachs agreement.

If we do make an offer and it is accepted, we would promptly communicate to our shareholders and the market.

Also as you read in our press release in connection with our interest to acquire MoneyGram, during the fourth quarter 2007 we purchased 1.3 million shares of MoneyGram common stock at a cost of $20 million.

At December of 2007, the value of the shares had increased to just over $20 million.

However, subsequent to December 31st of '07, the trading price for MoneyGram's stock dropped significantly and the aggregate value of the Company's shares in MoneyGram as of February 19 of 2008, was reduced to approximately $6.1 million.

Now to Mike, next slide, please.

Thank you, Rick.

Before I get into the segment discussion I'd like to recap the year that went by.

2007 was a significant year for Euronet.

We acquired and integrated our largest acquisition ever, RIA Envia, the third-largest global money transfer company.

We crossed the one billion transactions mark and we are nearly $1 billion in revenue, certainly a run rate in excess of $1 billion as we sit right now.

We continued to have success with our expansion efforts in the Asia-Pacific region.

We added significant outsourcing contracts such as China Post while experiencing tremendous growth in our cash net network in India.

Since inception, we have strived to address the growing needs of our customers and emerging markets.

Our first [SABA] compliant agreement with [OMB] for cross-border merchant acquiring further strengthens our commitment to offer new innovative products in line with market demands.

In 2007, our prepaid segment has made a strong comeback and shown how vital they are to our success.

We have leveraged our e-pay UK operations to large prepaid operations in Italy, the largest prepaid market in Europe and also in India, a very promising market.

Our Money Transfer operations expanded significantly with the addition of RIA.

The last eight months has seen RIA really become a part of the Euronet family.

Our EFT and prepaid teams have stepped forward to help RIA further grow and expand its market share in the non-U.S.

markets.

Furthermore, our prepaid and Money Transfer products attract similar clientele.

We are offering our prepaid services at RIA owned stores and agents to take advantage of overlapping clientele base, the early results confirm the opportunities in front of us.

My sincere thanks to each and every one of our 2500 employees at Euronet for their steadfast commitment and confidence in our business.

I continue to be excited about leading Euronet into the next phase of our growth.

If you wouldn't mind now, now please jump to slide number 23.

We've got a lot of information in the following slides, so on some of these slides, I will give you a brief of them and let you go over these slides on your own kind of point by point, just so that we can get out of here in less than two or three hours.

Here we have on slide number 3 our strengths in our EFT segment.

As most of you are familiar with our key business units I will moved onto the next slide to discuss the EFT highlight.

Move onto slide number 24, it gives you a snapshot of some of the financials for the EFT division.

For our full year, our revenues increased by 19%, our operating income improved by 5%, and adjusted EBITDA by 9%.

Excluding the fraud and settlement charges in the fourth and first quarters, as Rick discussed earlier, for the full year our EFT segment's operating income would have improved by 13% and adjusted EBITDA by 15% over the prior year consistent with the revenue growth.

Slide number 25.

For the fourth quarter, our EFT revenues increased by 26% and our operating income and adjusted EBITDA both increased by 13% over the same quarter last year's.

As highlighted on the prior slide, had we not included those fraud losses, our fourth-quarter operating income would have improved by 31% and at a faster rate than revenues against prior year's quarter.

Slide number 26 outlines our EFT regional business highlights for the fourth quarter 2007.

As I mentioned, in the interest of time I won't go over across -- I won't cover every single one but I will cover a few.

In Europe, we continued to expand our customer base in Romania.

We continued to expand our Euronet branded ATM networks in key markets.

And also, I'd like - I might mention that since our acquisition of Instreamline in Greece, now Euronet Card Services Greece have continued to strengthen our relationship with Piraeus Group and have signed agreements with the bank in additional countries besides Greece.

Moving onto slide number 27, in our Asia-Pac areas.

We increased our ATM network by 31% year-over-year.

We now have a total of 2508 ATMs live and under management in India and China and an additional 1510 ATMs under contract but not yet installed.

We initiated the rollout of ATMs under the new China Post Bank agreement signed in June 2007.

We expect to roll out the majority of the contracted 700 plus ATMs this year.

Additionally, we added 210 Standard Charter Bank India ATMs to our cash net India network the largest shared ATM network in that very large country.

We now have more than 7500 ATMs with 14 member banks in cash net.

Transactions on our cash net network have continued to increase significantly year-over-year as illustrated in the graph.

In 2007, transactions processed on the cash net network increased by a phenomenal 82% year-over-year and we see some opportunities in the pipeline that could substantially expand our cash net network and provide superior value and convenience to our banking customers as well as our end-user customers.

Moving onto slide number 28, our software business continued to maintain its momentum while providing vital development support to our EFT business.

Next slide, please, slide number 29.

In this slide we summarize the key highlights for the year and you can see that our EFT teams have continued to focus and work very hard.

We posted strong organic growth in our ATM network.

Our network increased by 28% year-over-year while transactions grew at 30%.

We now have a total of 11,347 ATMs under management.

We continued our expansion into new markets and at the same time we continued to signed and deliver outsourcing agreements in multiple markets.

We expanded our card processing and cross-border merchant acquiring products and are aggressively pursuing additional opportunities in this area.

And as you can see, our teams whether they are in Germany, Serbia, India, China which ever country, they are continuing to be leaders in their markets.

I would like to thank them and you for your continued dedication.

Now we will move onto the prepaid segment.

I skipped slide 30 and go onto slide number 31.

Similar to what I mentioned in the EFT segment, we've highlighted our strengths of this segment on slide number 31.

Most of you are familiar with this so I will just jump to the next slide.

Slide number 32.

We can see our prepaid financial highlights for the full-year 2007.

First of all, our annual prepaid revenues of 569 -- let's call it $570 million in 2007 were up 22% over last year.

The year-over-year improvement in revenue was a result of increased organic transaction growth together with the benefits of our acquisition of Omega Logic in the UK.

Our annual operating income of $52.8 million increased 40% over last year's results while our annual adjusted EBITDA of $69.3 million saw a 34% increase over the prior year's 2006 results in prepaid.

As Rick mentioned a few slides ago, despite our expansion investments in Italy and India and excluding the one-time excise tax refund, our prepaid teams continue to deliver very impressive growth year-over-year.

Move on please to slide number 33.

On slide number 33, you can see some of the financial highlights for the fourth quarter of '07.

Our prepaid revenues of $155.4 million in Q4 increased 26% over the same quarter last year.

Our operating income of $23.2 million in adjusted EBITDA of $27.5 million in Q4 2007 increased by 132% and 102% respectively over the same quarter blaster.

Excluding the excise tax refund, the quarterly year-over-year improvement in revenue was primarily attributed as I mentioned in prior slides, to the organic transaction growth as well as from the acquisition of Omega Logic in the UK.

Move onto slide number f 34.

In slides number 34, 35 and 36, we highlight our fourth-quarter prepaid highlights.

You can see in the itemized points that we continue to find ways to add more stores, more products and more transactions.

I'll hit a few highlights for you before we move onto Money Transfer, but you can see in each and every one of these countries we are very, very busy.

We are also pleased with the new country, Italy, but since our launch, we have established partnerships with three large retailers and a major distributor in this market.

So it's going to be throughout this year 2008 that you will hear a lot of updates on Italy as you can see with our other more established markets.

Also in Germany, we launched iTunes gift card product at the Media Market and Saturn stores.

In Australia and New Zealand, if you move onto slide number 35, we launched new gift card in payment products and our ATX subsidiary continues to post strong transaction growth.

ATX has been very successful in targeting promising prepaid markets which often have been credit risks and had political challenges by establishing processing agreements with distributors.

These are markets that we typically would not have addressed in our kind of e-pay or transact kind of model.

This model has worked very well for ATX and it has been successful in expanding its processing agreements across the Middle East and Africa.

Move onto the next slide, please.

In Spain, slide 36, we continue to pick up momentum and are adding new products to our terminals and rolling out new stores.

In Poland too, we continue strong growth in this very large market.

A lot of us Americans don't realize that Poland is nearly 40 million people and it's the size roughly of Spain.

So if we can get -- as Poland continues to grow economically, we see this as a large growth area for our prepaid business.

In the UK, we signed John Lewis department stores to offer mobile top-up and other prepaid services and we implemented transaction processing services for gift card mall products at six major retailers in the UK.

Next slide, slide number 37.

Before we move onto our Money Transfer discussion, I'll summarize a few key annual highlights in our prepaid segment.

Our prepaid teams continue to focus on signing and retaining accounts, diversifying our product portfolio by adding high margin popular prepaid value, stored value products, and we launched in new markets and successfully integrated acquired companies in 2007.

We are very busy.

Our prepaid transactions continue to post strong growth year-over-year and quarter-on-quarter.

For the full year, we processed more than 630 million transactions, that's a 39% increase over prior year's transactions.

We also expanded our cash collection points by 34% and we now process prepaid transactions on almost 400,000 POS devices.

Overall a good year and I'd like to thank our prepaid teams in each and every one of our markets for their continued support and hard work.

Now I will move onto our Money Transfer Segment, kind of our new segment for this year 2007.

On slide number 39, we highlighted our strengths in our most recently formed Money Transfer Segment.

I will highlight a few of them now.

With the addition of RIA to our business, we are now the third largest money transfer company.

We processed more than $5 billion worth of money transfers for more than 15 million transactions during 2007.

We have a Money Transfer network of more than 71,000 locations worldwide, a strong combination of both send and payout locations.

A lot has been accomplished since our acquisition of RIA in terms of integration, leveraging synergies and cross sell opportunities between our business segments and there is more and more opportunities for us ahead to unlock.

I will discuss these in detail in a view slides.

Move onto slide number 40 and we'll talk about some numbers.

On a pro forma basis because let's not forget our RIA was purchased in early April so we really only have three full quarters of their numbers in our 2007 numbers, but we've got a pro forma here for you.

Our Money Transfer revenues of 204, call it $205 million increased by 13%; operating income of $8.8 million increased by 44%; and our adjusted EBITDA of $26.5 million increased by 15% over prior year's results.

All of them very impressive metrics.

RIA's non-U.S.

money transfer business also continues to grow and to be instrumental in our growth.

We have seen strong double-digit growth rates in volume and revenues from our non-U.S.

markets for the last several quarters and I'll talk to you about them in a second.

On slide number 41, we highlighted the fourth-quarter financials of Money Transfer business on a pro forma basis year-over-year.

Our Money Transfer revenues increased by 17%; operating income increased by 78%; and our adjusted EBITDA increased 30% over fourth quarter 2006.

As Rick referred to earlier, our operating margins and adjusted EBITDA margins in the fourth quarter benefited from increased volume primarily from the approximately 70% increase in transactions from non-U.S.

locations and you'll see here shortly that that 70% increase in transactions led to an even higher percentage increase in revenues.

Let's move to slide number 42.

This is the third quarter since we started reporting RIA money transfers as a separate segment and we've seen a consistent improvement in total volume non-U.S.

market share transactions and a continued shift in mix to non-Mexico transfers.

This is indicative of the improvements we've made in the international markets and our continued effort to focus our profitable corridors beyond just the U.S.

and the Mexico corridors.

In the fourth quarter, we continued to expand our correspondent agent network.

We signed correspondents in seven countries for more than 3500 payout locations.

Our total money transfers increased 13% year-over-year while non-U.S.

transfers increased by approximately 70% in the fourth quarter over the prior year's fourth quarter.

Our non-U.S.

markets now represent 29% of the total transfers, up from 20% a year ago and I think around 25% in Q3.

The strong growth in transactions originating outside the United States has been key to the continued shift in mix to non-Mexico transfers.

The mix of non-Mexico transfers now accounts for 66% of RIA's business compared to 60% in the fourth quarter of last year.

We've seen a consistent improvement, however, in Mexico transaction volumes for the last four quarters, so that is good news.

From a 4.2% decline in transfers to Mexico in the first quarter of 2007 over the same quarter prior year to an improvement of 0.7% in the fourth quarter of '07 over [four] year 2006.

So we've seen basically a jump up from Q1 to Q4 last year, 4.2% decline to 0.7% increase over those four quarters.

(technical difficulty) 5% movement.

On slide number 43, we summarize some key Money Transfer highlights for the year.

We completed of course our acquisition.

We successfully integrated our Veloz operations data center sales force, agent management network, the entire company into RIA.

We continued to see successful results from our efforts to cross sell and leverage these synergies between the business segments.

Our EFT segment has introduced RIA to several banks and to date, RIA has signed four banks, Credy Bank in Serbia, AB Bank in Bangladesh, United Bank of Egypt and the Bank of the Philippine Islands as correspondents and several more in the pipeline.

We are offering prepaid products at select RIA Company owned stores and agents in the U.S., UK and Spain and we have started to offer RIA Money Transfer services at the ethnically focused prepaid retail locations in key markets.

We significantly expanded our money transfer network by 56% year-over-year to more than 71,000 locations and added 13 payout countries just since the acquisition in April.

We processed more than 15 million money transfers in 2007; non-U.S.

transfers continued to gain market share which was the primary reason for the purchase of RIA and the total volume posted a 70% increase year-over-year.

As I look back on 2007 and our purchase of RIA, I do so with pride.

I remember reading analyst reports about integration risks of this very large acquisition.

Well we have put that "risk" to bed permanently.

RIA cost us $500 million in cash, stock and debt, so there was a lot riding on our performance here.

RIA has 1200 employees, and a very entrepreneurial culture led by a very talented Guy, Juan Bianchi.

Since April by every measure, the RIA and Euronet teams have worked well together and outperformed expectations with respect to integration.

We have paid off $26 million of the $190 million of debt and we are prepared to pay off more.

We have added thousands of payout locations by adding Euronet's emerging market credibility to RIA's financially compelling offer.

We now sell prepaid at most all RIA owned stores and are cross selling this product into the agent base.

RIA's management has participated with Euronet's management and strategic and tactical planning sessions.

RIA Spain and Euronet -- prepaid Spain, have both moved together into new premises.

Even though we have a three-division company, all three divisions are working together to maximize our Company's potential.

I credit this success to the fact that Euronet has done 15 acquisitions prior to RIA so we are pretty darn good at integration.

And I also credit Juan Bianchi and his team for being open-minded and creative in their approach to growing our combined shareholder value.

This concludes our segment discussion.

As you can see, we are very well placed for continued success in the money transfer industry.

Slide number 44.

Before I wrap up our call, I'd like to make a few comments about the focus areas that we see for this year, 2008.

In our prepaid segment, we will continue to focus on exploring new market opportunities at the same time expanding our prepaid non-wireless products and revenue and profit sources by leveraging this cash collection network.

And we are particularly focusing on India and Italy here as new markets.

We are generating a lot of interest in our cross-border acquiring product and our recent OMV win.

Our aim will be to leverage the OMV platform to secure agreements with other large merchants in the region and as you know with all of these new technologies and new implementations, they are expensive to get started but that second customer is highly profitable to us.

We've had a great success in implementing multicountry agreements for our ATM and prepaid products.

Moving forward, we are going to focus on leveraging our expertise and infrastructure to continue to sign multicountry agreements for all our products.

Our success in the Asia-Pac area, primarily India and China, has enabled us to establish a very strong reputation in the region.

We are taking advantage of these credentials to drive our expansion efforts through Asia-Pac beyond India and China.

And our recent Standard Charter Bank regional win has given us a great head start.

And since the addition of RIA, we have seen interest in our money transfer product among our EFT and prepaid customers.

We will continue to focus on our cross sell efforts on expanding our money transfer correspondent network by leveraging EFT and prepaid relationships and to introduce our money transfer products to selected prepaid channels in new markets.

Slide number 45.

In summary, you can see that we met our guidance cash EPS of $0.34 in Q4 2007.

Add that tax rebate and we would have been $0.14 higher.

We surpassed the one billion mark in transactions processed.

This is a significant achievement for us.

We also achieved nearly $1 billion in revenues this year and we are currently on a run rate in excess of $1 billion in revenues.

We saw strong organic growth in our ATM network of about 80%.

The organic growth resulted from our customers' addition of ATMS throughout the year and our addition of our own Euronet ATMs in key markets.

We currently have more than 11,300 ATMs.

We saw improvement in our operating income and prepaid despite investments in our expansion efforts in Italy and India.

We successfully integrated RIA Envia, the third-largest global money transfer company and Omega Logic, our prepaid acquisition in the UK.

Both quite successful integrations.

We grew our non-U.S.

originated money transfer.

Money Transfer is the primary reason we bought RIA, by approximately 70% in numbers of transactions and about 80% in revenues.

Additionally, we paid down 26% of the RIA acquisition related debt.

And finally, as we look forward into Q1, we expect our first quarter 2008 cash earnings per share to be $0.29 to $0.30.

Now from a personal point of view, the concept of decreasing sequential quarterly cash EPS does not sit very well with me.

But I've got to kind of grow up here because just like in retailing, this is becoming the nature of our business particularly due to the addition of Money Transfer after our RIA acquisition.

Seasonality has become a very large part of all three businesses, particularly and even more exacerbated with our Money Transfer business.

So as we look forward, I'm excited.

I hope you are too.

This concludes the presentation portion about our call and I'm happy to answer any questions you might have.

Thank you.

(OPERATOR INSTRUCTIONS) Anurag Rana, KeyBanc Capital Markets.

Are you expecting in terms of margins or various lines in the first quarter that is leading to the sequential decline in cash EPS?

Now thanks for giving some idea about seasonality but at the same time, we were under the impression that we would start to see some nice accretion from the Money transfer business by now.

Well we will have accretion from the money transfer business and it is growing -- it actually is growing every quarter.

The problem is with Money Transfer is that I can promise you accretion over a period of a year but Money Transfer is just way seasonal.

Q1 is by far the weakest quarter.

And when you think about it, particularly where we are generating you know 76%, 77% of our transactions from the U.S., the bulk of those transactions come from immigrants most of which are coming from the south moving north and there is just less farming and construction jobs in this quarter.

So even though it will be accretive and we will see that start to bounce back in Q2 and then of course it's very strong in Q3 and Q4, Q1 there is just really little we can do about it because as we kind of lay our transaction map of the prior say three or four years on top of each other, you just see a big downdraft in Q1 and there is just very little we can do about that.

But accretion will come and it will start coming -- when you see the growth that we've had in just the international side as an example, where we've grown our transactions year-over-year on the quarter like 70% and our revenues by 80%, you are seeing margin expansion.

You are seeing huge growth.

You are seeing where a year ago our international transactions, which are more profitable than the domestic ones, account for 20% of our business and now it is almost 30% of our business.

All those things, all those are indicators pointing to accretion with this asset.

So it is becoming a stronger and stronger asset for us but we just got to all live through Q1 as we move into Q2.

Thanks.

And if you have been following us for a few years, you would know that the ATM transactions go down.

They are seasonally higher in Q4, because of all the Christmas season and Christmas shopping.

And prepaid is the same thing.

All three of our businesses are seasonal, the other two businesses are a little bit less though than money transfer but you add them together.

And I think if you would take the seasonality out of our numbers in Q1 and you kind of like average it across the year or something, you would see Q1's number not be $0.29 to $0.30 but you would probably pick up a full $0.05 at least on that.

Thanks.

Just could you also give us the growth in the organic growth in the prepaid segment?

Thank you.

Well as you could see in the numbers we reported there, our organic growth would have been about 12%-ish, 13%.

Thanks, Rick.

Franco Turrinelli, William Blair & Co.

Bob Napoli, Piper Jaffray.

Thank you and good morning.

Just a follow-up, Mike, on the first quarter.

I understand the seasonality of your businesses and certainly Western Union if you look at their money transfer business, the first quarter is the weakest.

But nonetheless you still have earnings that are essentially down year-over-year in the first quarter and I know you didn't have Money Transfer last year but it still seems to be a little bit more than seasonality in that guidance number.

I don't know if maybe it would help if you wanted to carry that guidance through to the full year of 2008 or maybe discuss -- I mean you had talked about RIA being $0.20 to $0.25 accretive in 2008 when you bought it.

Are you still on track for that?

In 2008?

Yes, I believe that's correct -- 2008 EPS accretive by $0.20 to $0.25 per share.

Yes, when we first announced the RIA deal back in November of '06, that is kind of before we got the Mexico flat tire.

So and -- as we've said in a number of our calls prior to this, Mexico is a serious downdraft where it was growing at 8% to 10% a year, it's growing right now at basically 2% per year.

And that accounted when we first bought the company for 40% of our transaction.

So that has been dragging us down and has put a pall on the 20%, 25% growth numbers that you were just describing.

But the nice thing is Mexico is starting to come back and even though we've projected internally about a 40% growth in our revenues from overseas markets, we are seeing double that at about 80%.

So I'm not going to be able to make it all up immediately but certainly we are on the track to make it up with international and with any kind of -- if we get any kind of recovery out of Mexico at all, it's all going to accrue to us at a very fast fashion.

Okay.

And then just the seasonality question.

If you look year-over-year, you're still down and it doesn't seem like money transfer should make up for -- should account -- should cause EPS to be down year-over-year.

Right, right.

One of the things that we had last year is we had this big blip up because of it was not all organic.

We had purchased Omega Logic in the UK and so kind of apples-to-apples, if you take that acquisition out, we could have been up.

And just last question, the investment spending in China/India merchant acquiring, was it an unusual level this quarter?

Can you quantify that (multiple speakers)?

Actually, no it's pretty much consistent with what we have done.

It's up just a little bit but --.

It's up over last year's fourth-quarter because as we are ramping up to accommodate the 700 plus ATM addition in China, we are continuing to make sure we are prepared (multiple speakers).

My answer was more on a sequential quarter say Q3 to Q4, not up so much.

But certainly Q4 '07 over Q4 '06 was quite a bit up because we've now got a processing center capable of handling several thousand ATMs in China but we still only have about 120 hung off of it.

But we do -- the nice thing is where a couple of quarters ago we only had that first 90 ATMs and that is all we have contracted, we now have a backlog in excess of 1000 in that market which will start to eat away at that extra investment and our losses there.

It's pretty much the only EFT country that is at a loss making position for us.

I think we are still a little bit weak in Bulgaria but not by much, but it is the only one of any size.

Thanks.

On the MoneyGram acquisition, can you give any additional color?

It's kind of a [bet] the company kind of a size acquisition at this point and (multiple speakers)?

You know, these are good points because and a lot of people said the RIA deal was a bet company acquisition too because it was $500 million compared to at the time I think our market cap was around $1 billion.

We don't buy fixer uppers.

We try to buy businesses that actually work.

And RIA is a great example of a company that works well.

We bought it and it's continuing to grow nicely for us.

By the end of '08, I think we will be super heroes for having purchased RIA.

MoneyGram is a same kind of thing.

They've got very strong management, we've met the management, the people actually run the business.

They made some bad investment decisions and they basically ate up $1.5 billion worth of value to their shareholders and in their balance sheet.

But their underlying money transfer business and the people who run that money transfer business are strong guys and they are enviable to us.

I mean they've got a strong Wal-Mart contract.

They've got a strong -- they've got other strong large contracts, great overseas distribution.

So if we were to put together a deal and we're not sure if we can, but if we were and then if we do put together the deal, and it was accepted by their management, this is not one of those deals that we're going to have to fix up.

And when we look at the synergies that we have between the two companies which as we pointed out in our last public disclosures where in the neighborhood of $85 million plus, most all of those are and we're now finding most all of those are just kind of fall off the truck kind of synergies.

These are you've got two publicly held companies and there is lots of duplication of cost just in dealing with all the third parties you have to -- accountants, lawyers, and other kinds of people -- you know, to have two publicly held companies.

I would just make two follow-up comments to Mike's observations on the --.

As we've got to know the management team of MoneyGram and at this stage I would tell you it has been very good discussions, MoneyGram has been quite open and welcoming to our interest and our discussions.

As Mike said, we will have to see whether or not there is a transaction that will work well for our shareholders to go forward.

But we've had very good interactions there.

We've as well been -- had greater visibility to the high-quality profits of some of their products that would work very nicely in our distribution business.

And so we have gained increased confidences to the quality of their products and the quality of that business with the one exception that was the investments.

And we just like the Tommy Lee or the Goldman Sachs proposal would require that all of those investments would be completely disposed of to ensure that there is no investment portfolio risk and we've had a number of conversations as well with the management of MoneyGram on how they would intend to manage that portfolio on a go-forward basis to prevent this from happening again.

So I just wanted to clarify that we would not have the interest of acquiring the business with a portfolio problem and our solution if it goes forward would be consistent with the other offer that is on the table to excise that from the business.

Thank you.

And just a little note.

I think of their portfolio, they've already sold two-thirds of the problem areas, the problem securities.

They've got about one-third to go and that is one of the requirements for the lead deal to go through.

Thank you.

Tony Wible, Citigroup.

Good morning, guys.

I guess I count myself as one of those analysts who has been more cautious on the Money Transfer business that you referenced, Mike, in your opening remarks.

What I'm really wanting to get, Mike, from you is a sense for why there is such a disconnect between the optimistic comments and just what we've seen?

I mean the stock is down about 40% from the time since you announced RIA, down 13% today.

The numbers have been slashed.

What do you see within that RIA acquisition that we are all missing?

Well, I mean you can't -- what we are seeing here is that we see 25%, now 30% of that business growing at 90%, okay?

And you can't -- where a year ago it was 15% of that business growing at 90%.

Now it's 30% of that business growing at 90% with expanding margins.

And we are seeing a recovery here in the U.S., Mexico kind of market as well.

So you are not going to see our 90% growth or 80% growth in revenues go down to even a 40% growth overnight.

This is huge momentum that is indicative of the large amount of immigrants that have moved from Central and Eastern Europe to Western Europe.

And that is not going to slow down because the numbers of immigrants have just gone through the roof there and they need to be serviced.

We're one of the three big providers in that market and although we are only -- although MoneyGram is 2.5 times our size, as an example in the overall, and Western Union is 8 or 9 times our size overall, the differential overseas is not as great, not as pronounced.

And I mean the other piece too is that we just can't overlook is that the reductions in the Mexican traffic -- it is still 40% of the business and that has been a lot of headwind.

We've made up some of the ground through the growth of the international business but it is simply a big part of the business that it takes more momentum to recover from that, Tony.

And you watch -- Tony, you watch for the last three quarters, we've gone from something like 17% -- no, no, 16%, 17% up -- well a year ago-ish to about 30% of our business now with these overseas transactions.

And that is pretty exciting because they continue to be growing at 80%, 90%.

You know I've covered the guys for a long, long time and I think historically the business model has been pretty stable.

Once you throw RIA into the mix, it just seems like there is a lot more variables that can get you a wide variance in earnings numbers.

Would you guys consider putting out guidance that provides some input on what those scenarios could be?

In other words if Mexico does X, then the guidance might be in this range?

Because that seems like the real problem here is that you have a lot of expectations out there that are different from what you guys are actually tracking on.

Well and also in addition to that, it probably -- part of this is you haven't tracked us with Money Transfer.

And up until this point where we had seasonality in our other two business, we've never had as pronounced a seasonality as we have with Money Transfer.

So we actually did -- one time we did actually Rick did make that calculation in the second quarter of last year.

I remember he said that if -- let's see if I can remember -- if the Mexican traffic instead of being a down a percent was up 5%, I think we would have added $0.02 a share that quarter.

So that is $0.08 a share a year which is a lot.

So all it would take I guess you could say as you kind of extrapolate that forward, if we could get Mexico not to be growing at 0.7% but grow at 5%, you could see $0.08, $0.10 a year come in virtually over night.

Okay.

What is the cost of borrowing you think you could get today if you needed to do some kind of leverage in the business model?

Well we don't really -- we are paying off debt.

We don't really need to borrow any money right now.

So you wouldn't see any need to take on additional capital if you pursued MoneyGram?

Oh, MoneyGram would require some kind of capital partner.

(multiple speakers) There is no way we are going to come up with $1.5 billion --

That's what I thought, Mike.

-- to cover a hole and then on top of that buy a company.

That is what I thought, Mike.

So what would be that cost of borrowing?

Well, Tony, you know you probably know what the debt markets out there look like.

And I would tell you today that we would probably be somewhere in the range of 300 to 500 basis points over LIBOR.

Okay.

Last question, I think I might have missed it on the comments but what was the ATM backlog in total as of quarter end?

About 1700, Tony.

Great.

Thanks a lot, guys.

David Parker, Merrill Lynch.

Good morning everyone.

Just wanted to focus a little bit on the fraudulent transactions in Poland and Hungary.

What kind of history have you had in other regions and those losses -- what type of losses should we expect in the first quarter as you try to fix that issue?

This was a particular kind of criminal ring that was organized in this starting in the UK, and then hitting some of the Central European countries.

We were one of the first people to kind of figure it out, jump on it and work with the international card organizations to come up with ways to stop it in its tracks.

Actually, we've received kind of kudos from that both from our banks and also from the international card schemes, because they saw how fast and how well we work with that.

We had $1.7 million of losses there in Q4.

We would expect that number to be less in Q1 and zero in Q2.

Basically, it has a lot to do with some certain implementations around EMV, new standards of cards.

And we've already upgraded -- we've got about 20 some countries or 22 subsystems or something like that within our countries, and we've already 100% dealt with half of them.

And we've done some remedial things to deal with the other half, and it's kind of like every week between now and the end of the quarter, we will be knocking off another one of the 11 that's left.

So that is why we are feeling really confident about having a handle on this.

In fact, maybe Kevin might give a little bit of extra color that we'll see this number drop significantly in Q1 and then be nothing in Q2.

Yes.

For those of you that are familiar with this particular fraudulent activity, what happens is fraudsters are predominantly in the UK skimming cards, by which they basically put a device on an ATM and steal the character of the card.

At the same time, they use other mechanisms by which to get the PIN.

And this activity -- to answer your question, this activity has been predominantly seen in Western Europe.

And what was new in the fourth quarter is the fraudsters moved from Western Europe where we have a low presence, and moved into Eastern Europe where we, personally Euronet, have a high presence.

And as Mike mentioned, we've done some things to stop this and it will be -- we'll be fully protected by the beginning of the second quarter.

We do anticipate experiencing some losses in the first quarter.

They will be significantly less than what we saw in the fourth quarter.

And those are reflected in our guidance for the first quarter.

I might also mention the silver lining of this kind of criminal dark cloud is that we've kind of turned us into a sales pitch for ourselves.

Because we are protecting the banks.

So we have actually, as Mike said, our relationship with our customers has actually grown stronger through our actions to help protect them.

I mean, a lot of these banks who are -- it wasn't just us getting hit, but all the banks are getting hit.

And some of these banks are losing tens of millions of dollars.

But we just jumped onto it with a number of very innovative mechanisms to kind of stop-gap the problem, and then we will have that permanently put to bed as we mentioned by the end of the quarter.

Okay.

And then on the foreign exchange rate, I know that you have the true-up under the operating line, but how much is that benefiting the revenue growth?

Have you done that calculation?

Yes, it was in about EBIT the 2.5%'ish range in the quarter.

Okay.

And then just the final question, Dan Henry has moved on.

He has a new role at NetSpend.

Do you guys have a relationship with NetSpend, and is there any opportunity to increase that?

We do.

NetSpend is really a U.S.

only entity right now.

They and Green Dot are the two most successful prepaid debit card issuers in the U.S.

And we distribute both of those cards and top up both of those cards at our [Pace 5] locations, our prepaid locations here in the U.S.

There is the possibility to strengthen that relationship, but right now, they are one of two vendors.

We really have to be agnostic.

And no matter who you are and where you bought your prepaid card, we want to make money on that top up.

So that is why we are not going to be exclusive with any one provider.

Plus it's at our retailers want the breadth of product out there for customer choice and so our best proposition to our retailers which we want to have stay with us for a long time and take more product, they are going to want the choice and so we've got to make sure that that is available.

To put things in prospective in the UK, there is something like 15 or 20 different debit card schemes out there and I -- Kevin, how many of those do we top up now?

Almost all of them.

Yes the top five or whatever.

And predominantly most of the historic value cards in Europe are in the UK where we might add value to NetSpend is our understanding that the rest of Europe and as these card schemes try to take products to new markets, we are a very attractive partner because of our understanding of the other European markets.

Thank you, guys.

[Tim Willy], Avondale Partners.

Thanks and good morning.

Kevin, a question for you.

I think in prior conversation you had talked about one of the things you wanted to do was really take a look at everything sort of on an internal operational basis given the growth of Euronet, a lot of acquisitions, a lot of organic growth and just look for efficiencies, synergies within the organization.

And I guess I'm curious if you could just give an update as to how far you are in that deep dive, what your conclusions may be and whether or not those efforts obviously and possibly get a little bit distracted or pushed out given the ongoing situation at MoneyGram?

That is actually one of the good things about my relationship with Mike and Rick.

My joining the team has allowed me to focus on running the units as they stand today and while Mike and Rick have obviously spent a lot of time on this potential MoneyGram transaction.

Regarding efficiencies, we're not at the point where we are going to talk numbers specifically.

But what I will tell you is that we did start to bear some serious fruit in the fourth quarter on looking at vendor management and taking cost out of our business.

And we expect that to continue and actually gain momentum into 2008 with most of my focus again being on EFT and prepaid from a cost synergy standpoint.

But from a business synergies, Mike in his presentation talked about some of the things that we are trying to do between their various business units.

And those again, a key objective is to take this prepaid network and turn it into a -- convert it from prepaid top up network to a payment network and all the various products that we could start to put across that network.

And we are starting to see some real success in doing that in 2008.

Okay.

And then just a question I guess, Mike, on MoneyGram and I can appreciate if you don't want to give a ton of detail, but I will ask it anyway.

As you look at that network, when you bought RIA, you talked about we're going to grow this network.

We've got all these touch points and obviously you still do have those touch points.

But obviously MoneyGram is already a very established network, growing very rapidly internationally.

As you've said, very good management, traditionally had a lot of capital behind their strategy whereas maybe RIA did not at the time or was looking for more.

Could you maybe at least in general terms talk about what you bring to them to you help their money transfer performance improve from where it has been?

Because you said (multiple speakers)?

I think what we bring to them is in the -- they are growing very nicely here in the U.S.

primarily because of some of their large agreements, Wal-Mart, etc.

They are growing internationally but not nearly as fast as we are and I think it's probably a lot to do with just our international birth, you know where they went international kind of second and have been focusing on the U.S., money orders, etc.

We are kind of an international company.

So they look at us and our international footprint as a significant asset that we could help them bring to their table.

We look at them as adding their corridors quicker than what we are doing one by one.

And we could bring a whole bunch of them on virtually immediately.

So both of our management teams are very excited about the concept that we could leverage each other's strengths here.

Tim, I would add to it as we talked about obviously Mexico has got a lot of focus here because of our proximity to it but again, there are three other parts of the world that have as much or more money transfer remittances to them and that is the Eastern part of Europe, India and China.

And MoneyGram as you've observed, has a very good network with a lot more payout locations than what we have and we -- our agents would benefit nicely from that.

However just as we've seen with RIA, we've continued to make inroads with our customers, our bank relationships that are in those Eastern European markets, the Indian markets, the Chinese markets.

And so we think we've got a little more leg strength in some of those markets with those bank relationships and not to underestimate our country presence in those markets with retailers and just business knowledge of those markets.

So I don't think that it will be as pronounced of a benefit that we would have expected out of RIA that you might expect in MoneyGram but I still see that there is a very nice fit with them and how we do business and how they do business.

Okay, thanks for the insight.

Franco Turrinelli, William Blair & Co.

Sorry, user error earlier.

I wanted to just and I'm sorry if you've already addressed this while we were getting back on but just to make sure that we are talking apples-to-apples here, Rick.

What is the cash EPS that you are measuring yourself against for the first quarter of '07?

For the first quarter of '07, you know, Franco, give me one second here.

For the first quarter of '07, it's $0.31.

Okay.

So I think this is retreading some of the ground that one of the other analysts but allow me to ask it again.

We're looking at down year-over-year cash EPS despite the fact that we'll have added RIA admittedly in a seasonally weak quarter but presumably not losing money.

And so what I guess I don't really understand is if RIA has been accretive, what has happened to the operations of the rest of the business that we have year-over-year losses -- dilution of cash EPS despite the increased growth and all the success that you've had?

I just really can't reconcile that guidance with the positive picture that you've painted.

Well, Franco there is a lot of moving parts in that because in the first quarter of last year, we had $200 million more of cash that was earning interest at a pretty nice interest rate.

We take that, we put it into debt, we take on debt that then rolls into the picture.

And while we didn't whine about it here a lot, one of the adverse impacts of just in terms of our forecast and expectations on RIA, one of the adverse things of having a greater international growth come out of places like Italy and UK and Spain is that those countries are at 30% and 35% tax rates and as you know in the United States, we've got a big U.S.

NOL.

And so we had stronger growth in the plan in those countries which brought in more tax.

So it's kind of a lot of moving parts in there on the cash side of it anywhere from taking a significant amount of cash out, changes in the interest rates which have come down pretty significantly since that first quarter of last year and the taking on of the debt for the RIA which we'll continue to pay it down.

But nonetheless it will stay in our math for a period until we do get a pay down.

And I guess to add to that, and Rick correct my math here if I'm wrong, but if we had $200 million in cash back then which we used on RIA and we ended up with $190 million worth of debt, and you put that on a quarterly basis, I mean that's 2.5 -- shoot that's almost $5 million worth of call it differential interest increase to us.

Is that correct?

It is with the one exception being that we did have the [pipe] procedure which came in at the end of the first quarter last year that are in here but they are in (multiple speakers)

So maybe it's $3.5 million.

So basically and then we're not taxed here in the U.S.

at $3.5 million worth of additional interest, Franco, just to have bought RIA is $0.07 a share.

Right, but I'm kind of trying to and Tony Wible was gracious enough on this call to admit that he was one of the ones that was skeptical here.

I mean my point is that is great but that capital that was raised was raised to buy RIA.

And I think that the concern of the shareholders as evidenced by the performance of the stock since then and this morning is that they are not satisfied with the return or with the numbers that we are getting from that.

And I was just exploring that guidance in that context but that's (multiple speakers).

And I think -- no, I think he had a good point.

You've got a good point but at the end of the day, this was a very exciting long-term purchase for the Company.

We see the growth in revenues so we know that the growth in those revenues and those profits are going to outstrip the fact that it cost us $0.07 a share plus the dilution of the extra shares per quarter to have bought the asset.

So you can say we kind of went, we went -- because of the Mexican growth getting whacked like it did, we thought we could make up more than that $0.07 a share.

And Mexico didn't, so we're having to make it up elsewhere and instead of us pulling this thing off and being way accretive in a first year, it's going to be into the second year before we do.

Which sort of begs the question, then why double down on MoneyGram?

I'm not sure if we will, Franco.

To be honest, with the cost of debt out there and the intricacies of this deal, I can't tell you we're going to make an offer.

We would -- now the nice thing is the Mexican flat tire has -- it's flat, you know.

And so we can only get better from here with respect to that.

We see strong international growth in both of our companies and we would only do a deal that is way accretive for our shareholders because it is a big deal.

I'm not convinced we're going to do it.

Everybody keeps trying to act like it fait accompli and we're going to make an offer.

We have yet to line up the financing to our satisfaction or the terms of a deal to our satisfaction.

So in three weeks it's all going to be over one way or the other because they "go shop" ins.

And I think there's a lot people on this call who would much rather that you said here now that you're not going to make a deal and just kind of move on and focus on the business as it is so --

Here is the one fact, though.

Unlike RIA, which was a new business, we brought it in and we got the Mexican flat tire so it's slow down there, growth even though they're trying to make it up internationally and elsewhere.

The fact of the matter is between our two companies, we've identified conservatively we believe $85 million in annual operating synergies.

That is not what you're going to get with RIA because it had to survive on its own.

When you get a flat tire, it kind of dies on its own.

But if we put these two businesses together, we see -- and if it wasn't for the synergies we wouldn't even be considering this, because the synergies are going to -- could more than make up for the risk involved and could bring us a deal that's many, many tens of cents accretive to the company in the near-term.

So that is it in the best financial light, we've got to take a look at cost of debt, cost of this, cost of that and make sure if we are bringing in $0.40, $0.50, $0.60 a share in accretion, that it actually can come home.

But I'm with you.

I'm not ready to double down until everything lines up right and right now everything as we sit right now it hasn't.

But I can't tell you as a responsible CEO looking out for the business in one and two years from now that we should just not look at this opportunity.

We've got to evaluate it and then we've got to be able to just dis it and say, no, this game changing opportunity was something that we decided not to play with.

Thanks, guys.

We are pretty late now.

Maybe we should ex the calls now and tell everybody thank you for spending and hour and 25 minutes with us and we will look forward to talking to you soon.

Thank you.

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