View Filing Data

Print Document View Excel Document

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 27, 2019	Jun. 30, 2018
Document Documentand Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q4
Entity Registrant Name	MONEYGRAM INTERNATIONAL INC
Entity Central Index Key	0001273931
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		56,068,264
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Public Float			$ 205.2

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 145.5	$ 190.0
Settlement assets	3,373.8	3,756.9
Property and equipment, net	193.9	214.9
Goodwill	442.2	442.2
Other assets	140.7	168.5
Total assets	4,296.1	4,772.5
LIABILITIES
Payment service obligations	3,373.8	3,756.9
Debt, net	901.0	908.1
Pension and other postretirement benefits	76.6	97.3
Accounts payable and other liabilities	213.5	255.5
Total liabilities	4,564.9	5,017.8
COMMITMENTS AND CONTINGENCIES (NOTE 14)
STOCKHOLDERS’ DEFICIT
Participating convertible preferred stock - series D, $0.01 par value, 200,000 shares authorized, 71,282 issued at December 31, 2018 and December 31, 2017	183.9	183.9
Common stock, $0.01 par value, 162,500,000 shares authorized, 58,823,567 shares issued at December 31, 2018 and December 31, 2017	0.6	0.6
Additional paid-in capital	1,046.8	1,034.8
Retained loss	(1,403.6)	(1,336.1)
Accumulated other comprehensive loss	(67.5)	(63.0)
Treasury stock: 3,207,118 and 4,585,223 shares at December 31, 2018 and December 31, 2017, respectively	(29.0)	(65.5)
Total stockholders’ deficit	(268.8)	(245.3)
Total liabilities and stockholders’ deficit	$ 4,296.1	$ 4,772.5

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Participating convertible preferred stock, shares authorized (shares)	7,000,000
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	162,500,000	162,500,000
Common stock, shares issued (shares)	58,823,567	58,823,567
Treasury stock (shares)	3,207,118	4,585,223
D Stock
Participating convertible preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Participating convertible preferred stock, shares authorized (shares)	200,000	200,000
Participating convertible preferred stock, shares issued (shares)	71,282	71,282

Consolidated Statements of Operations - USD ($)
shares in Millions, $ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

^[1]

Jun. 30, 2018

Mar. 31, 2018

^[1]

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

REVENUE

Fee and other revenue

$ 1,398.1

$ 1,560.9

$ 1,612.4

Investment revenue

49.5

41.2

18.0

Total revenue

$ 345.8

$ 347.2

$ 374.6

$ 380.0

$ 408.2

^[2]

$ 397.8

$ 410.0

$ 386.1

1,447.6

1,602.1

1,630.4

EXPENSES

Fee and other commissions expense

688.6

763.5

793.1

Investment commissions expense

19.3

8.7

2.5

Direct transaction expense

24.3

21.8

18.8

Total commissions and direct transaction expenses

732.2

794.0

814.4

Compensation and benefits

259.8

271.8

288.5

Transaction and operations support

298.8

380.5

290.7

Occupancy, equipment and supplies

62.0

66.1

61.9

Depreciation and amortization

76.3

75.1

79.9

Total operating expenses

332.1

358.1

364.6

374.3

463.2

^[2]

372.8

388.8

362.7

1,429.1

1,587.5

1,535.4

OPERATING INCOME

13.7

(10.9)

10.0

5.7

(55.0)

^[2]

25.0

21.2

23.4

18.5

14.6

95.0

Other expenses

Interest expense

53.6

45.3

45.0

Debt extinguishment costs

0.0

0.3

Other non-operating (income) expense

(24.2)

5.9

7.2

Total other expenses

(15.2)

(15.3)

(15.1)

16.2

(13.2)

^[2]

(13.3)

(12.6)

(12.1)

29.4

51.2

52.5

(Loss) income before income taxes

(1.5)

(26.2)

(5.1)

21.9

(68.2)

^[2]

11.7

8.6

11.3

(10.9)

(36.6)

42.5

Income tax expense (benefit)

13.1

(6.8)

26.6

NET (LOSS) INCOME

$ (12.5)

$ (20.9)

$ 2.3

$ 7.1

$ (52.5)

^[2]

$ 7.7

$ 6.2

$ 8.8

$ (24.0)

$ (29.8)

$ 15.9

Earnings (loss) per common share

Basic (usd per share)

$ (0.19)

^[1]

$ (0.32)

$ 0.04

^[1]

$ 0.11

$ (0.83)

$ 0.12

$ 0.10

$ 0.14

$ (0.37)

$ (0.47)

$ 0.26

Diluted (usd per share)

$ (0.19)

^[1]

$ (0.32)

$ 0.03

^[1]

$ 0.11

$ (0.83)

$ 0.12

$ 0.09

$ 0.13

$ (0.37)

$ (0.47)

$ 0.24

Weighted Average Number of Shares Outstanding, Basic and Diluted [Abstract]

Basic

64.3

62.9

62.3

Diluted

64.3

62.9

65.9

[1]	(1) In the first and third quarters of 2018, total operating expenses were impacted by additional accruals of $10.0 million and $30.0 million, respectively, related to the DPA matter.
[2]	(1) In the fourth quarter of 2017, total operating expenses was impacted by an $85.0 million accrual related to the DPA matter.

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
NET (LOSS) INCOME	$ (24.0)	$ (29.8)	$ 15.9
OTHER COMPREHENSIVE LOSS
Net change in unrealized holding gains on available-for-sale securities arising during the period, net of tax benefit of $0.0 for the years ended December 31, 2018 and 2017 and $0.1 for the year ended December 31, 2016	(0.3)	3.6	(0.3)
Net reclassification adjustment for net realized gains included in net earnings, net of tax expense of $0.0 for the years ended December 31, 2018, 2017 and 2016	0.0	(12.2)	0.0
Net change in pension liability due to amortization of prior service credit and net actuarial loss, net of tax benefit of $1.0, $1.6 and $2.0 for the years ended December 31, 2018, 2017 and 2016, respectively	3.5	2.8	3.5
Other Comprehensive Income (Loss), Defined Benefit Plan, Settlement and Curtailment Gain (Loss), after Tax	6.1	(10.6)	(2.1)
Unrealized foreign currency translation adjustments, net of tax benefit (expense) of $0.0, ($8.0) and $1.3 for the years ended December 31, 2018, 2017 and 2016, respectively	(13.8)	9.5	(6.4)
Other comprehensive loss	(4.5)	(6.9)	(5.3)
COMPREHENSIVE (LOSS) INCOME	$ (28.5)	$ (36.7)	$ 10.6

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net holding gains arising during the period, tax	$ 0.0	$ 0.0	$ (0.1)
Net change in pension liability, tax	1.0	1.6	2.0
Other Comprehensive Income (Loss), Defined Benefit Plan, Adjustment for Settlement or Curtailment Gain (Loss), Tax	1.8	(4.5)	(1.2)
Unrealized foreign currency translation gains (losses), tax	$ 0.0	$ (8.0)	$ 1.3

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Interest Paid, Excluding Capitalized Interest, Operating Activities	$ 50.7	$ 41.9	$ 41.6
Income Taxes Paid, Net	4.8	5.0	9.5
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	(24.0)	(29.8)	15.9
Depreciation and amortization	76.3	75.1	79.9
Signing bonus amortization	53.9	51.9	54.0
Deferred Income Tax Expense (Benefit)	9.5	(4.9)	7.3
Amortization of debt discount and debt issuance costs	3.1	3.2	3.7
Non-cash compensation and pension expense	18.2	20.4	25.1
Gain on redemption of asset-backed security	0.0	(12.2)	0.0
Signing bonus payments	(31.6)	(40.3)	(34.0)
Change in other assets	(3.9)	(4.6)	1.0
Change in accounts payable and other liabilities	(73.7)	70.3	(31.8)
Other non-cash items, net	1.5	3.4	(0.2)
Net cash provided by operating activities	29.3	132.5	120.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(57.8)	(83.6)	(82.8)
Net cash used in investing activities	(57.8)	(83.6)	(82.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt	(9.8)	(9.8)	(30.3)
Payments to tax authorities for stock-based compensation	(6.2)	(8.0)	(2.7)
Proceeds from exercise of stock options and other	0.0	1.7	0.0
Payments for Repurchase of Common Stock	0.0	0.0	(11.7)
Payments of Merger Related Costs, Financing Activities	0.0	0.0	(0.7)
Net cash used in financing activities	(16.0)	(16.1)	(45.4)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(44.5)	32.8	(7.3)
CASH AND CASH EQUIVALENTS—Beginning of year	190.0	157.2	164.5
CASH AND CASH EQUIVALENTS—End of year	$ 145.5	$ 190.0	$ 157.2

Consolidated Statements of Stockholders' Deficit - USD ($) $ in Millions	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Loss	Accumulated Other Comprehensive Loss	Treasury Stock
Beginning Balance at Dec. 31, 2015	$ (229.5)	$ 183.9	$ 0.6	$ 1,002.4	$ (1,231.4)	$ (50.8)	$ (134.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
NET (LOSS) INCOME	15.9				15.9
Stock-based compensation activity	15.0			17.9	(37.1)		34.2
Stock Repurchased During Period, Value	(11.7)						(11.7)
Other comprehensive loss	(5.3)					(5.3)
Ending Balance at Dec. 31, 2016	(215.6)	183.9	0.6	1,020.3	(1,252.6)	(56.1)	(111.7)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
NET (LOSS) INCOME	(29.8)				(29.8)
Stock-based compensation activity	7.0			14.5	(53.7)		46.2
Other comprehensive loss	(6.9)					(6.9)
Ending Balance at Dec. 31, 2017	(245.3)	183.9	0.6	1,034.8	(1,336.1)	(63.0)	(65.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
NET (LOSS) INCOME	(24.0)				(24.0)
Stock-based compensation activity	5.1			12.0	(43.4)		36.5
Cumulative effect of adoption of ASU 2016-16	(0.1)				(0.1)
Other comprehensive loss	(4.5)					(4.5)
Ending Balance at Dec. 31, 2018	$ (268.8)	$ 183.9	$ 0.6	$ 1,046.8	$ (1,403.6)	$ (67.5)	$ (29.0)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Description of the Business and Basis of Presentation (Notes)	12 Months Ended
	Dec. 31, 2018
Description of the Business and Basis of Presentation [Abstract]
Business Description and Basis of Presentation [Text Block]	Description of the Business and Basis of Presentation References to “MoneyGram,” the “Company,” “we,” “us” and “our” are to MoneyGram International, Inc. and its subsidiaries. Nature of Operations — MoneyGram offers products and services under its two reporting segments: Global Funds Transfer and Financial Paper Products. The Global Funds Transfer segment provides global money transfer services and bill payment services to consumers. We primarily offer services through third-party agents, including retail chains, independent retailers, post offices and other financial institutions. We also offer Digital solutions such as moneygram.com, mobile solutions, account deposit and kiosk-based services. Additionally, we have limited Company-operated retail locations. The Financial Paper Products segment provides official check outsourcing services and money orders through financial institutions and agent locations. Basis of Presentation — The accompanying consolidated financial statements of MoneyGram are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The Consolidated Balance Sheets are unclassified due to the timing uncertainty surrounding the payment of settlement obligations. In the first quarter of 2018, the Company changed the presentation of certain operating expenses, which are now presented as part of "Direct transaction expense" on the Consolidated Statements of Operations. Direct transaction expense includes expenses related to the processing of money transfers, such as customer authentication and funding costs. Prior period amounts have been updated to reflect the change in presentation, which had no impact on operating income, net income, earnings per share, or segments' operating results. Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on historical experience, future expectations and other factors and assumptions the Company believes to be reasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis and are revised when necessary. Changes in estimates are recorded in the period of change. Actual amounts may differ from these estimates. Principles of Consolidation — The consolidated financial statements include the accounts of MoneyGram International, Inc. and its subsidiaries. Intercompany profits, transactions and account balances have been eliminated in consolidation. The Company participates in various trust arrangements (special purpose entities or “SPEs”) related to official check processing agreements with financial institutions and structured investments within the investment portfolio. As the Company is the primary beneficiary and bears the primary burden of any losses, the SPEs are consolidated in the consolidated financial statements. The assets of the SPEs are recorded in the Consolidated Balance Sheets in a manner consistent with the assets of the Company based on the nature of the asset. Accordingly, the obligations have been recorded in the Consolidated Balance Sheets under “Payment service obligations.” The investment revenue generated by the assets of the SPEs is allocated to the Financial Paper Products segment in the Consolidated Statements of Operations. As of December 31, 2018 and 2017, the Company had only one SPE remaining with settlement assets equal to the payment service obligations of $0.8 million. Merger Agreement — On January 26, 2017, MoneyGram International, Inc. entered into an Agreement and Plan of Merger (as amended by the First Amendment to the Agreement and Plan of Merger, dated April 15, 2017, the “Merger Agreement”) with Alipay (UK) Limited, a United Kingdom limited company (“Alipay”), Matrix Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Alipay (“Merger Sub”), and, solely for purposes of certain specified provisions of the Merger Agreement, Alipay (Hong Kong) Holding Limited, a Hong Kong limited company, providing for the merger of Merger Sub with and into the Company, with the Company surviving as a wholly owned subsidiary of Alipay (the “Merger”). The closing of the Merger was subject to certain conditions, including clearance by the Committee on Foreign Investment in the United States (“CFIUS”) under the Defense Production Act of 1950, as amended. On January 2, 2018, the parties to the Merger Agreement were advised that CFIUS clearance of the Merger would not be forthcoming, and after further discussion between the parties, they determined to cease efforts to seek CFIUS approval and entered into a Termination Agreement (the “Termination Agreement”). Pursuant to the Termination Agreement, Alipay paid the Company a termination fee of $30.0 million on January 3, 2018, which is recorded in "Other non-operating (income) expense" on the Consolidated Statements of Operations for the year ended December 31, 2018. The parties agreed to release each other from certain claims and liabilities arising out of or relating to the Merger Agreement or the transactions contemplated thereby.

Summary of Significant Accounting Policies Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Cash and cash equivalents — The Company defines cash and cash equivalents and settlement cash and cash equivalents as cash on hand and all highly liquid debt instruments with original maturities of three months or less at the purchase date.

Settlement assets and payment service obligations — The Company records payment service obligations relating to amounts payable under money transfers, money orders and consumer payment service arrangements. These obligations are recognized by the Company at the time the underlying transaction occurs. The Company records corresponding settlement assets, which represent funds received or to be received for unsettled money transfers, money orders and consumer payments. Settlement assets consist of settlement cash and cash equivalents, receivables and investments. Payment service obligations primarily consist of outstanding payment instruments; amounts owed to financial institutions for funds paid to the Company to cover clearings of official check payment instruments, remittances and clearing adjustments; amounts owed to agents for funds paid to consumers on behalf of the Company; commissions owed to financial institution customers and agents for instruments sold; amounts owed to investment brokers for purchased securities and unclaimed instruments owed to various states.

The Company’s primary licensed entity is MoneyGram Payment Systems, Inc. (“MPSI”), which enables us to offer our money transfer service around the globe. MPSI is regulated by various U.S. state agencies that generally require the Company to maintain a pool of assets with an investment rating bearing one of the three highest grades as defined by a nationally recognized rating agency (“permissible investments”) in an amount equal to the payment service obligations, as defined by each state, for those regulated payment instruments, namely teller checks, agent checks, money orders and money transfers. The regulatory payment service assets measure varies by state but in all cases excludes investments rated below A-. The most restrictive states may also exclude assets held at banks that do not belong to a national insurance program, varying amounts of accounts receivable balances and/or assets held in the SPE. The regulatory payment service obligations measure varies by state, but in all cases is substantially lower than the Company’s payment service obligations as disclosed in the Consolidated Balance Sheets as the Company is not regulated by state agencies for payment service obligations resulting from outstanding cashier’s checks or for amounts payable to agents and brokers.

We are also subject to licensing or other regulatory requirements in various other jurisdictions. Licensing requirements may include minimum net worth, provision of surety bonds or letters of credit, compliance with operational procedures, agent oversight and the maintenance of settlement assets in an amount equivalent to outstanding payment service obligations, as defined by our various regulators.

The regulatory and contractual requirements do not require the Company to specify individual assets held to meet its payment service obligations, nor is the Company required to deposit specific assets into a trust, escrow or other special account. Rather, the Company must maintain a pool of liquid assets sufficient to comply with the requirements. No third-party places limitations, legal or otherwise, on the Company regarding the use of its individual liquid assets. The Company is able to withdraw, deposit or sell its individual liquid assets at will, with no prior notice or penalty, provided the Company maintains a total pool of liquid assets sufficient to meet the regulatory and contractual requirements. Regulatory requirements also require MPSI to maintain positive net worth, with certain states requiring that MPSI maintain positive tangible net worth. The Company was in compliance with its contractual and financial regulatory requirements as of December 31, 2018.

The following table summarizes the amount of settlement assets and payment service obligations as of December 31:



(Amounts in millions)	2018			2017
Settlement assets:
Settlement cash and cash equivalents	$	1,435.7		$	1,469.9
Receivables, net	777.7			1,125.8
Interest-bearing investments	1,154.7			1,154.2
Available-for-sale investments	5.7			7.0
	$	3,373.8		$	3,756.9
Payment service obligations	$	(3,373.8	)	$	(3,756.9	)

Receivables, net (included in settlement assets) — The Company has receivables due from financial institutions and agents for payment instruments sold and amounts advanced by the Company to certain agents for operational and local regulatory purposes. These receivables are outstanding from the day of the sale of the payment instrument until the financial institution or agent remits the funds to the Company. The Company provides an allowance for the portion of the receivable estimated to become uncollectible based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, consumer credit card chargebacks and insufficient funds and other matters the Company identifies in its routine collection monitoring. Receivables are generally considered past due one day after the contractual remittance schedule, which is typically one to three days after the sale of the underlying payment instrument. Receivables are generally written off against the allowance one year after becoming past due.

The following summary details the activity within the allowance for credit losses for the years ended December 31:



(Amounts in millions)	2018			2017			2016
Beginning balance	$	6.6		$	11.8		$	9.2
Provision	11.2			8.0			12.9
Write-offs, net of recoveries	(10.5		)	(13.2		)	(10.3		)
Ending balance	$	7.3		$	6.6		$	11.8

Investments (included in settlement assets) — The Company classifies securities as interest-bearing or available-for-sale. The Company has no securities classified as trading or held-to-maturity. Time deposits and certificates of deposits with original maturities of up to 24 months are classified as interest-bearing investments and recorded at amortized cost. Securities held for indefinite periods of time, including any securities that may be sold to assist in the clearing of payment service obligations or in the management of the investment portfolio, are classified as available-for-sale securities. These securities are recorded at fair value, with the net after-tax unrealized gain or loss recorded in "Accumulated other comprehensive loss" in the stockholders' deficit section of the Consolidated Balance Sheets. Realized gains and losses and other-than-temporary impairments are recorded in the Consolidated Statements of Operations under "Total other expenses."

Interest income on residential mortgage-backed securities for which risk of credit loss is deemed remote is recorded utilizing the level yield method. Changes in estimated cash flows, both positive and negative, are accounted for with retrospective changes to the carrying value of investments in order to maintain a level yield over the life of the investment. Interest income on residential mortgage-backed securities for which risk of credit loss is not deemed remote is recorded under the prospective method as adjustments of yield. Additionally, the Company applies the cost recovery method of accounting for interest to some of the investments within the available-for-sale portfolio as it believes it is probable that we will not recover all, or substantially all, of its principal investment and interest for its asset-backed and other securities given the sustained deterioration in the investment and securities market, the collapse of many asset-backed securities and the low levels to which the securities have been written down.

The Company evaluates all residential mortgage-backed and other asset-backed investments for impairment based on management’s evaluation of the underlying reasons for the decline in fair value on an individual security basis. When an adverse change in expected cash flows occurs, and if the fair value of a security is less than its carrying value, the investment is written down to fair value through a permanent reduction to its amortized cost in the period the impairment occurs. Securities gains and losses are recognized upon the sale, call or maturity of securities using the specific identification method to determine the cost basis of securities sold.

Fair Value of Financial Instruments — Financial instruments consist of cash and cash equivalents, settlement cash and cash equivalents, investments, derivatives, payment service obligations and debt. The carrying values of cash and cash equivalents, settlement cash and cash equivalents, interest-bearing investments and payment service obligations approximate fair value. The carrying value of debt is stated at amortized cost; however, for disclosure purposes the fair value is estimated. See Note 4 — Fair Value Measurement for information regarding the principles and processes used to estimate the fair value of financial instruments.

Derivative Financial Instruments — The Company recognizes derivative financial instruments in the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value is recognized through the “Transaction and operations support” line in the Consolidated Statements of Operations in the period of change. See Note 6 — Derivative Financial Instruments for additional disclosure.

Property and Equipment — Property and equipment includes computer hardware, computer software, signage, equipment at agent locations, office furniture and equipment and leasehold improvements, and is stated at cost net of accumulated depreciation and amortization. Property and equipment is depreciated and amortized using a straight-line method over the useful life or term of the lease or license. The cost and related accumulated depreciation and amortization of assets sold or disposed of are removed from the financial statements, with the resulting gain or loss, if any, recognized in “Occupancy, equipment and supplies” in the Consolidated Statements of Operations. See Note 7 — Property and Equipment for additional disclosure.

The following table summarizes the estimated useful lives by major asset category:



Type of Asset	Useful Life
Computer hardware	3 years
Computer software	5 - 7 years
Signage	3 years
Equipment at agent locations	3 - 7 years
Office furniture and equipment	7 years
Leasehold improvements	10 years

Tenant allowances for leasehold improvements are capitalized as leasehold improvements upon completion of the improvement and amortized over the shorter of the remaining term of the lease or 10 years.

Computer software includes acquired and internally developed software. For the years ended December 31, 2018 and 2017, software development costs of $22.6 million and $43.9 million, respectively, were capitalized. At December 31, 2018 and 2017, there were $104.0 million and $115.2 million, respectively, of unamortized software development costs included in property and equipment.

Property and equipment are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable by comparing the carrying value of the assets to the estimated future undiscounted cash flows to be generated by the asset. If an impairment is determined to exist for property and equipment, the carrying value of the asset is reduced to the estimated fair value.

Goodwill and Intangible Assets — Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is assigned to the reporting unit in which the acquired business will operate. Intangible assets are recorded at their estimated fair value at the date of acquisition. In the year following the period in which identified intangible assets become fully amortized, the fully amortized balances are removed from the gross asset and accumulated amortization amounts. Goodwill is not amortized but is instead subject to impairment testing.

Intangible assets with finite lives are amortized using a straight-line method over their respective useful lives as follows:



Type of Intangible Asset	Useful Life
Contractual and customer relationships	3-15 years
Non-compete agreements	3-5 years
Developed technology	5-7 years

The Company evaluates its goodwill for impairment annually as of October 1 of each year or more frequently if impairment indicators arise in accordance with Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other.” When testing goodwill for impairment, the Company may elect to perform either a qualitative test or a quantitative test to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, the Company considers the impact of any changes to the following factors: macroeconomic, industry and market factors, cost factors, and changes in overall financial performance, as well as any other relevant events and uncertainties impacting a reporting unit. If the qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, the Company performs a quantitative analysis. In a quantitative test, the carrying value of the reporting unit is compared to its estimated fair value. If the fair value of a reporting unit exceeds its carrying amount, there is no impairment. If not, to the extent the carrying amount of the reporting unit exceeds its fair value, an impairment charge of the reporting unit's goodwill would be recognized; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable by comparing the carrying value of the assets to the estimated future undiscounted cash flows to be generated by the asset. If an impairment is determined to exist for intangible assets, the carrying value of the asset is reduced to the estimated fair value.

Payments on Long-Term Contracts — The Company makes payments to certain agents and financial institution customers as an incentive to enter into long-term contracts. The payments, or signing bonuses, are generally required to be refunded pro rata in the event of nonperformance under, or cancellation of, the contract by the customer. Signing bonuses are viewed as prepaid commissions expense and are, therefore, capitalized and amortized over the life of the related contract. Amortization of signing bonuses on long-term contracts is recorded in “Fee and other commissions expense” in the Consolidated Statements of Operations. The carrying values of the signing bonuses are reviewed whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Income Taxes — The provision for income taxes is computed based on the pre-tax income (loss) included in the Consolidated Statements of Operations. Deferred tax assets and liabilities are recorded based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax basis, and operating loss and tax credit carry-forwards on a taxing jurisdiction basis. The Company measures deferred tax assets and liabilities using enacted statutory tax rates that will apply in the years in which the Company expects the temporary differences to be recovered or paid. The Company's ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carry-back or carry-forward periods provided for in the tax law. The Company establishes valuation allowances for its deferred tax assets based on a more-likely-than-not threshold. To the extent management believes that recovery is not likely, a valuation allowance is established in the period in which the determination is made.

The legislation commonly known as the "Tax Cuts and Jobs Act," and also known as H.R. 1 - 115^th Congress (the "TCJA"), includes global intangible low-taxed income ("GILTI") provisions, which impose a U.S. income inclusion on foreign income in excess of a deemed return on tangible assets of foreign corporations. In accordance with ASC 235-10-50, the Company elected in the fourth quarter of 2018 to treat GILTI inclusions as a current period expense when incurred under ASC Topic 740, "Income Taxes."

The liability for unrecognized tax benefits is recorded as a non-cash item in “Accounts payable and other liabilities” in the Consolidated Balance Sheets. The Company records interest and penalties for unrecognized tax benefits in “Income tax expense” in the Consolidated Statements of Operations. See Note 13— Income Taxes for additional disclosure.

Treasury Stock — Repurchased common stock is stated at cost and is presented as a separate component of stockholders’ deficit. See Note 11 — Stockholders’ Deficit for additional disclosure.

Foreign Currency Translation — The Company converts assets and liabilities of foreign operations to their U.S. dollar equivalents at rates in effect at the balance sheet dates and records the translation adjustments in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets. Income statements of foreign operations are translated from the operation’s functional currency to U.S. dollar equivalents at the average exchange rate for the month. Foreign currency exchange transaction gains and losses are reported in “Transaction and operations support” in the Consolidated Statements of Operations.

Revenue Recognition — In the first quarter of 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), using the cumulative effect transition method for all contracts. There was no transition impact on the Consolidated Financial Statements from the adoption of this ASU. The Company earns revenues from consideration specified in contracts with customers and recognizes revenue when it satisfies its performance obligations by transferring control over its services and products to customers. Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities. The following is a description of the principal activities, separated by reporting segments, from which the Company generates revenues. For more information about the Company's reporting segments, see Note 15 — Segment Information. For tabular revenue disclosures, see Note 16 — Revenue Recognition.

Global Funds Transfer Segment:

Money transfer fee revenue — The Company earns money transfer revenues primarily from consumer transaction fees and the management of currency exchange spreads on money transfer transactions involving different “send” and “receive” currencies. Fees are collected from consumers at the time of transaction. In a cash-to-cash money transfer transaction, both the agent initiating the transaction and the receiving agent earn a commission that is generally a fixed fee or is based on a percentage of the fee charged to the consumer. When a money transfer transaction is initiated at a MoneyGram-owned store, kiosk or via our online platform, typically only the receiving agent earns a commission. Each money transfer is considered a separate agreement between the Company and the consumer and includes only one performance obligation that is satisfied at a point in time, which is when the funds are made available for pick up. Money transfer funds are typically available for pick up within 24 hours of being sent. The consumer is in control of the service, as the consumer picks the "send" and "receive" locations as well as the transaction currency. Normally, the Company provides fee refunds to consumers only if the transaction is canceled within 30 minutes of initiating the transfer and the transfer amount has not been picked up by the receiver. As such, fee refunds are accounted for within the same period as the origination of the transaction and no liability for the amount of expected returns is recorded on the Consolidated Balance Sheets. The Company recognizes revenues on a gross basis for money transfer services as the Company is considered the principal in these transactions. Under our loyalty programs for money transfer services, consumers earn rewards based on transaction frequency. In 2018, the Company introduced the MoneyGram loyalty program, which allows members to earn discounts on future transactions. The loyalty program redemption activity for the year ended December 31, 2018, was insignificant to the Company's results of operations.

Bill payment services fee revenue — Bill payment revenues are earned primarily from fees charged to consumers for each transaction completed. Our primary bill payment service offering is our ExpressPayment service, which we offer at substantially all of our money transfer agent locations, at certain agent locations in select Caribbean and European countries and through our Digital solutions. Through our bill payment services, consumers can complete urgent bill payments, pay routine bills, or load and reload prepaid debit cards with cash at an agent location or with a credit or debit card. We offer consumers same-day and two or three-day payment service options; the service option is dependent upon our agreement with the biller. Each bill payment service is considered a separate agreement with the consumer and includes only one performance obligation that is satisfied at a point in time, when the funds are transferred to the designated institution, which is generally within the same day. The consumer is in control of the service, as the consumer picks out the "send" location and time. MoneyGram does not offer refunds for bill payment services and revenue is recognized on a gross basis as the Company is considered the principal in these transactions.

Other revenue — Includes breakage income, fees from royalties, early contract terminations, insufficient funds and other one-time charges. The Company recognizes breakage revenue for unclaimed money transfers when the likelihood of consumer pick-up becomes remote based on historical experience and there is no requirement for remitting balances to government agencies.

Financial Paper Products Segment:

Money order fee revenue — Consumers use our money orders to make payments in lieu of cash or personal checks. We generate revenue from money orders by charging per item and other fees, as well as from the investment of funds underlying outstanding money orders. The Company contracts with agents and/or financial institutions for this product and associated services. We sell money orders under the MoneyGram brand and on a private label or on a co-branded basis with certain agents and financial institutions in the U.S. The Company recognizes revenue when an agent sells a money order because the funds are immediately made available to the consumer. As such, each sale of a money order and related service is considered a separate performance obligation that is satisfied at a point in time.

Official check outsourcing services fee revenue — Official checks are used by consumers where a payee requires a check drawn on a bank. Financial institutions also use official checks to pay their own obligations. Like money orders, the Company generates revenue from official check outsourcing services through U.S. banks and credit unions by charging per item and other fees, as well as from the investment of funds underlying outstanding official checks. The Company’s consumer for official checks is considered the financial institution. The official checks services and products are considered a bundle of services and products that are provided to the financial institution on an ongoing basis. As such, revenue from these services is recognized on a monthly basis. Revenue corresponds directly with the value of MoneyGram's services and/or products completed to date and for which the Company has a right to invoice. Monthly revenue may vary based on the number of official checks issued and other ancillary services provided to the financial institution.

Other revenue — Includes fees from money order service revenue, proof adjustments, early contract terminations, money order photo and replacement fees and other one-time charges. The Company recognizes service revenue from money orders that have not been redeemed within a one-year period from issuance. Proof adjustment fees are generally unresolved and not recouped as they pertain to immaterial bank variances. The Company recognizes as revenue the net proof adjustments amount on a monthly basis.

Investment Revenue:

Investment revenue, which is not within the scope of ASC Topic 606 per ASC 606-10-15-2, is earned from the investment of funds generated from the sale of payment instruments, primarily official checks and money orders, and consists of interest income, dividend income, income received on our cost recovery securities and amortization of premiums and discounts. Investment revenue varies depending on the level of investment balances and the yield on our investments.

Fee and Other Commissions Expense — The Company incurs fee commissions primarily related to our Global Funds Transfer services. In a money transfer transaction, both the agent initiating the transaction and the receiving agent earn a commission that is generally either a fixed fee or is based on a percentage of the fee charged to the consumer. The agent initiating the transaction and the receiving agent also earn foreign exchange commissions, which are generally based on a percentage of the foreign exchange spread. In a bill payment transaction, the agent initiating the transaction receives a commission that is generally based on a percentage of the fee charged to the consumer and, in limited circumstances, the biller receives a commission that is based on a percentage of the fee charged to the consumer. The Company generally does not pay commissions to agents on the sale of money orders, except, in certain limited circumstances, for large agents where we may pay a fixed commission based on total money order transactions.

Investment Commissions Expense — Investment commissions expense consists of amounts paid to financial institution customers based on short-term interest rate indices times the average outstanding cash balances of official checks sold by the financial institution. Investment commissions are recognized each month based on the average outstanding balances of each financial institution customer and their contractual variable rate for that month.

Direct Transaction Expense — Direct transaction expense includes expenses related to the processing of money transfers, such as customer authentication and funding costs.

Marketing and Advertising Expense — Marketing and advertising costs are expensed as incurred or at the time the advertising first takes place and are recorded in the “Transaction and operations support” line in the Consolidated Statements of Operations. Marketing and advertising expense was $51.2 million, $57.2 million and $65.1 million for 2018, 2017 and 2016, respectively.

Stock-Based Compensation — Stock-based compensation awards are measured at fair value at the date of grant and expensed using the straight-line method over their vesting or service periods. For grants to employees, expense, net of estimated forfeitures, is recognized in the “Compensation and benefits” line and expense for grants to non-employee directors (which excludes Thomas H. Lee Partners L.P. ["THL"] board representatives, who do not receive compensation for their service as directors) is recorded in the “Transaction and operations support” line in the Consolidated Statements of Operations. The Company accounts for modifications to its share-based payment awards in accordance with the provisions of ASC Topic 718, "Compensation - Stock Compensation." Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date, and is recognized as compensation cost on the date of modification (for vested awards) or over the remaining vesting or service period (for unvested awards). Any unrecognized compensation cost remaining from the original award is recognized over the vesting period of the modified award. See Note 12 — Stock-Based Compensation for additional disclosure of the Company’s stock-based compensation.

Earnings Per Share — For all periods in which it is outstanding, the Series D Participating Convertible Preferred Stock (the "D Stock") is included in the weighted-average number of common shares outstanding utilized to calculate basic (loss) earnings per common share because the D Stock is deemed a common stock equivalent. Diluted (loss) earnings per common share reflects the potential dilution that could result if securities or incremental shares arising out of the Company’s stock-based compensation plans were exercised or converted into common stock. Diluted (loss) earnings per common share assumes the exercise of stock options using the treasury stock method.

The following table is a reconciliation of the weighted-average amounts used in calculating (loss) earnings per share for the period ended December 31:



(Amounts in millions)	2018	2017	2016
Basic common shares outstanding	64.3	62.9	62.3
Shares related to stock options and restricted stock units	—	—	3.6
Diluted common shares outstanding	64.3	62.9	65.9

Potential common shares are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common stockholders. Stock options are anti-dilutive when the exercise price of these instruments is greater than the average market price of the Company’s common stock for the period. The following table summarizes the weighted-average potential common shares excluded from diluted (loss) earnings per common share as their effect would be anti-dilutive:



(Amounts in millions)	2018	2017	2016
Shares related to stock options	1.8	1.7	2.7
Shares related to restricted stock units	2.3	3.2	—
Shares excluded from the computation	4.1	4.9	2.7

Recent Accounting Pronouncements and Related Developments — In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires organizations to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The FASB retained the distinction between finance leases and operating leases, leaving the effect of leases in the statement of comprehensive income and the statement of cash flows largely unchanged from previous GAAP. To further assist with adoption and implementation of ASU 2016-02, the FASB issued the following ASUs:


•	ASU 2018-10 (Issued July 2018) — Codification Improvements to Topic 842, Leases


•	ASU 2018-11 (Issued July 2018) — Leases (Topic 842): Targeted Improvements


•	ASU 2018-20 (Issued December 2018) — Leases (Topic 842): Narrow-Scope Improvements for Lessors

ASU 2018-11 provided entities with an additional transition method to adopt the new lease standard. Under this new transition method, an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if any. The new lease standard is effective for fiscal years beginning after December 15, 2018, and the Company will adopt this standard on January 1, 2019, utilizing the transition method allowed under ASU 2018-11. The Company will use the adoption date as the initial application date.

The Company's leases consist primarily of operating leases for buildings, equipment and vehicles as further described in Note 14 — Commitments and Contingencies. This standard will have a material impact on the Consolidated Balance Sheets. However, management believes that this standard will not have a material impact on the Consolidated Statements of Operations. The most significant impact will be the recognition of right-of-use ("ROU") assets and lease liabilities for operating leases. Our accounting for capital leases will remain substantially unchanged. The Company estimates that the value of lease liabilities will be approximately $58.0 million and the value of ROU assets will be approximately $54.0 million as of January 1, 2019. The lease liability is calculated based on remaining minimum rental payments under current leasing standards for existing operating leases and the ROU assets is calculated the same as the lease liability but it includes approximately $3.0 million of accrued rent. Upon adoption, the ROU assets will be presented on the Consolidated Balance Sheets as part of "Other assets" and the lease liabilities will be included in "Accounts payable and other liabilities." Additionally, we will elect the package of practical expedients, which permits us to not reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We will not elect the use of hindsight practical expedient or the practical expedient pertaining to land easements, as the latter is not applicable to us. We will also elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company will elect the practical expedient to not separate lease and non-lease components for our real estate and vehicle leases. The Company is finalizing the evaluation of the impact of ASC Topic 842. In connection with the adoption on January 1, 2019, we implemented internal controls to ensure we adequately evaluated our contracts and properly assessed the impact of ASC Topic 842 on our financial statements disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new credit impairment standard changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking expected loss model that generally will result in the earlier recognition of allowances for credit losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. To further assist with adoption and implementation of ASU 2016-02, the FASB issued the following ASU:


•	ASU 2018-19 (Issued November 2018) — Codification Improvements to Topic 326, Financial Instruments - Credit Losses

These ASUs are effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. MoneyGram will not be early adopting these standards. We are still evaluating these ASUs, but we do not believe the adoption will have a material impact on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory. This standard requires that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this standard eliminate the exception for an intra-entity transfer of an asset other than inventory. ASU 2016-16 is effective for public companies for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The Company adopted this standard in the first quarter of 2018 using the modified retrospective approach. The modified retrospective approach resulted in a cumulative effect of $0.1 million to "Retained loss," consisting of a deferred charge of $1.3 million offset by a recording of deferred tax balances of $1.2 million from "Other assets" on the Consolidated Balance Sheets.

In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in the standard require components of net periodic benefit cost, other than service cost, to be presented outside of income from operations. The Company adopted ASU 2017-07 in the first quarter of 2018. Prior to the adoption of this ASU, the Company presented net periodic benefit costs, other than service cost, in "Compensation and benefits" on the Consolidated Statements of Operations. Upon adoption, these costs were reclassified to "Other non-operating (income) expense" on the Consolidated Statements of Operations and the prior period was updated to reflect this change. For the years ended December 31, 2018, 2017 and 2016, net periodic benefit costs, other than service cost, were $5.8 million, $5.9 million and $7.2 million, respectively.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in the standard allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. ASU 2018-02 will not have an impact on the Consolidated Statements of Operations. The amendments in this standard also require certain disclosures about stranded tax effects. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company will not be early adopting this standard. The impact of this ASU is still being evaluated, but management does not expect this standard to have a material impact on the Consolidated Balance Sheets.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Plans - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefits Plans. The amendments in this standard require that entities now disclose the weighted-average interest credit ratings for cash balance plans and other plans with promised interest credit ratings and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period, as well as clarify and remove certain other disclosures. This standard is effective for fiscal years ending after December 15, 2020, and, although early adoption is permitted, MoneyGram will not be early adopting this standard. The impact of this ASU is still being evaluated, but management does not expect this standard to have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). The amendments in the standard allow for the capitalization of certain implementation costs associated with a hosting arrangement that is a service contract by applying the guidance in ASC Subtopic 350-40, "Internal-Use Software." This standard is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted, including in any interim period. MoneyGram adopted this standard as of October 1, 2018, on a prospective basis and, as such, there was no accumulated impact to the consolidated financial statements upon adoption. The capitalized costs are presented on the Consolidated Balance Sheets as part of "Other assets." The amortization of such costs is recorded in the same line item on the Consolidated Statements of Operations as the expense for fees for the associated hosting arrangement. The payments for these costs are recognized as part of "Net cash provided by operating activities" on the Consolidated Statements of Cash Flows.

The Company has determined that there have been no other recently adopted or issued accounting standards that had, or will have, a material impact on its consolidated financial statements.

Restructuring and Reorganization Costs Restructuring and Reorganization Costs (Notes)

12 Months Ended

Dec. 31, 2018

Restructuring and Reorganization Costs [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Restructuring and Reorganization Costs

In the first quarter of 2018, the Company initiated a restructuring and reorganization program (the "Digital Transformation Program") to modernize the business, reduce operating expenses, focus on improving profitability and better align the organization to deliver new digital touch-points for customers and agents. In connection with the Digital Transformation Program, which is expected to be substantially completed in 2019, the Company expects over 400 employees to be affected, possibly through transfers or terminations, representing over 14% of the Company’s global workforce as of December 31, 2017. The Company expects to incur restructuring and reorganization charges between $24.5 million and $26.5 million, consisting primarily of severance and outplacement benefits (between $19.0 million and $19.5 million), real estate lease termination and other associated costs (between $3.0 million and $3.5 million), legal and other costs (between $2.0 million and $3.0 million), and reorganization costs (approximately $0.5 million). The actual timing and costs of the plan may differ from the Company’s current expectations and estimates. On the Consolidated Statements of Operations, the severance and outplacement benefits and reorganization costs are recorded in "Compensation and benefits," the real estate lease termination and other associated costs are recorded in "Occupancy, equipment and supplies" and the legal and other costs are recorded in "Transaction and operations support."

The following table is a roll-forward of the restructuring and reorganization costs accrual as of December 31, 2018:



(Amounts in millions)	Digital Transformation Program
Balance, December 31, 2017	$	—
Expenses	20.4
Cash payments	(11.1		)
Non-cash operating expenses	(3.0		)
Balance, December 31, 2018	$	6.3

The following table is a summary of the cumulative restructuring and reorganization costs incurred to date in operating expenses and the estimated remaining restructuring and reorganization costs to be incurred as of December 31, 2018:



(Amounts in millions)	Digital Transformation Program
Cumulative restructuring costs incurred to date in operating expenses	$	19.9
Estimated additional restructuring costs to be incurred	6.1
Total restructuring costs incurred and to be incurred	26.0
Total reorganization costs incurred and to be incurred	0.5
Total restructuring and reorganization costs incurred and to be incurred	$	26.5

The following table summarizes the restructuring and reorganization costs recorded during the year ended December 31, 2018:



(Amounts in millions)
Restructuring costs in operating expenses:
Compensation and benefits	$	15.6
Transaction and operations support	2.0
Occupancy, equipment and supplies	2.0
Depreciation	0.3
Total restructuring costs in operating expenses	19.9
Reorganization costs in operating expenses:
Compensation and benefits	0.5
Total reorganization costs in operating expenses	0.5
Total restructuring and reorganization costs in operating expenses	$	20.4

The following table is a summary of the total cumulative restructuring costs incurred to date in operating expenses and the total estimated remaining restructuring and reorganization costs to be incurred by reporting segment:



(Amounts in millions)	Global Funds Transfer		Other		Total
Balance, December 31, 2017	$	—	$	—	$	—
Restructuring costs:
First quarter 2018	7.3		—		7.3
Second quarter 2018	5.0		—		5.0
Third quarter 2018	1.2		—		1.2
Fourth quarter 2018	6.4		—		6.4
Total cumulative restructuring costs incurred to date in operating expenses	19.9		—		19.9
Total estimated additional restructuring costs to be incurred	6.1		—		6.1
Total restructuring costs incurred and to be incurred	26.0		—		26.0
Reorganization costs:
Second quarter 2018	—		0.5		0.5
Total reorganization costs incurred and to be incurred	—		0.5		0.5
Total restructuring and reorganization costs incurred and to be incurred	$	26.0	$	0.5	$	26.5

Fair Value Measurement

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. A three-level hierarchy is used for fair value measurements based upon the observability of the inputs to the valuation of an asset or liability as of the measurement date. Under the hierarchy, the highest priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), followed by observable inputs (Level 2) and unobservable inputs (Level 3). A financial instrument’s level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of the Company’s valuation methodologies used to estimate the fair value for assets and liabilities:

Assets and liabilities that are measured at fair value on a recurring basis:

•

Available-for-sale investments — For residential mortgage-backed securities issued by U.S. government agencies, fair value measures are obtained from an independent pricing service. As market quotes are generally not readily available or accessible for these specific securities, the pricing service measures fair value through the use of pricing models utilizing reported market quotes adjusted for observable inputs, such as market prices for comparable securities, spreads, prepayment speeds, yield curves and delinquency rates. Accordingly, these securities are classified as Level 2 financial instruments.

For asset-backed and other securities, which include investments in limited partnerships, market quotes are generally not available. The Company utilizes broker quotes to measure market value, if available. Because the inputs and assumptions that brokers use to develop prices are unobservable, valuations that are based on brokers' quotes are classified as Level 3. Also, the Company uses pricing services that utilize pricing models based on market observable and unobservable data. The observable inputs include quotes for comparable securities, yield curves, default indices, interest rates, historical prepayment speeds and delinquency rates. These pricing models also apply an inactive market adjustment as a significant unobservable input. Accordingly, asset-backed and other securities valued using third-party pricing models are classified as Level 3.

•

Derivative financial instruments — Derivatives consist of forward contracts to manage income statement exposure to foreign currency exchange risk arising from the Company’s assets and liabilities denominated in foreign currencies. The Company’s forward contracts are well-established products, allowing the use of standardized models with market-based inputs. These models do not contain a high level of subjectivity, and the inputs are readily observable. Accordingly, the Company has classified its forward contracts as Level 2 financial instruments. See Note 6 — Derivative Financial Instruments for additional disclosure on the Company's forward contracts.

The following table summarizes the Company’s financial assets and liabilities measured at fair value by hierarchy level on a recurring basis:



(Amounts in millions)	Level 2		Level 3		Total
December 31, 2018
Financial assets:
Available-for-sale investments:
Residential mortgage-backed securities	$	4.5	$	—	$	4.5
Asset-backed and other securities	—		1.2		1.2
Forward contracts	—		—		—
Total financial assets	$	4.5	$	1.2	$	5.7
Financial liabilities:
Forward contracts	$	1.2	$	—	$	1.2

December 31, 2017
Financial assets:
Available-for-sale investments:
Residential mortgage-backed securities	$	5.6	$	—	$	5.6
Asset-backed and other securities	—		1.4		1.4
Forward contracts	0.2		—		0.2
Total financial assets	$	5.8	$	1.4	$	7.2
Financial liabilities:
Forward contracts	$	1.0	$	—	$	1.0

The following table provides a roll-forward of the asset-backed and other securities classified as Level 3, which are measured at fair value on a recurring basis for the years ended December 31:



(Amounts in millions)	2018			2017			2016
Beginning balance	$	1.4		$	10.6		$	11.6
Principal paydowns	—			(0.8		)	(1.2		)
Change in unrealized (losses) gains	(0.2		)	3.8			0.3
Net realized gains	—			(12.2		)	(0.1		)
Ending balance	$	1.2		$	1.4		$	10.6

Assets and liabilities that are disclosed at fair value — Debt and interest-bearing investments are carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The fair value of debt is estimated using an observable market quotation (Level 2). The following table is a summary of the Company's fair value and carrying value of debt as of December 31:



	Fair Value				Carrying Value
(Amounts in millions)	2018		2017		2018		2017
Senior secured credit facility	$	737.1	$	910.8	$	904.4	$	914.2

The carrying amounts for the Company's cash and cash equivalents, settlement cash and cash equivalents, interest-bearing investments and payment service obligations approximate fair value as of December 31, 2018 and 2017.

The Company records the investments in its defined benefit pension plan ("Pension Plan") trust at fair value. The majority of the Pension Plan’s investments is common/collective trusts held by the Pension Plan’s trustee. The fair values of the Pension Plan's investments are determined based on the current market values of the underlying assets. See Note 10 — Pension and Other Benefits for additional disclosure of investments held by the Pension Plan.

Assets and liabilities measured at fair value on a non-recurring basis — Assets and liabilities that are measured at fair value on a non-recurring basis relate primarily to the Company’s property and equipment, goodwill and other intangible assets, which are remeasured only in the event of an impairment. No impairments of property and equipment, goodwill and other intangible assets were recorded during 2018, 2017 and 2016.

Fair value remeasurements are normally based on significant unobservable inputs (Level 3). Tangible and intangible asset fair values are derived using accepted valuation methodologies. If it is determined an impairment has occurred, the carrying value of the asset is reduced to fair value with a corresponding charge to the "Other expenses" line in the Consolidated Statements of Operations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Investment Portfolio

12 Months Ended

Dec. 31, 2018

Investments [Abstract]

Investment Portfolio

The Company’s portfolio is invested in cash and cash equivalents, interest-bearing investments and available-for-sale investments as described in Note 2 — Summary of Significant Accounting Policies. The following table shows the components of the investment portfolio as of December 31:



(Amounts in millions)	2018		2017
Cash	$	1,578.7	$	1,654.5
Money market securities	2.5		5.4
Cash and cash equivalents ⁽¹⁾	1,581.2		1,659.9
Interest-bearing investments	1,154.7		1,154.2
Available-for-sale investments	5.7		7.0
Total investment portfolio	$	2,741.6	$	2,821.1

⁽¹⁾For purposes of the disclosure of the investment portfolio as a whole, the cash and cash equivalents balance includes settlement cash and cash equivalents.

Cash and Cash Equivalents — Cash and cash equivalents consist of interest-bearing deposit accounts, non-interest-bearing transaction accounts and money market securities. The Company’s money market securities are invested in one fund, which is AAA rated and consists of U.S. Treasury bills, notes or other obligations issued or guaranteed by the U.S. government and its agencies, as well as repurchase agreements secured by such instruments.

Interest-bearing Investments — Interest-bearing investments consist of time deposits and certificates of deposit with maturities of up to 24 months and are issued from financial institutions rated A- or better as of December 31, 2018.

Available-for-sale Investments — Available-for-sale investments consist of residential mortgage-backed securities and asset-backed and other securities. The following table is a summary of the amortized cost and fair value of available-for-sale investments:



(Amounts in millions)	Amortized Cost		Gross Unrealized Gains		Fair Value
December 31, 2018
Residential mortgage-backed securities	$	4.2	$	0.3	$	4.5
Asset-backed and other securities	0.2		1.0		1.2
Total	$	4.4	$	1.3	$	5.7

December 31, 2017
Residential mortgage-backed securities	$	5.2	$	0.4	$	5.6
Asset-backed and other securities	0.2		1.2		1.4
Total	$	5.4	$	1.6	$	7.0

As of December 31, 2018 and 2017, 79% and 80%, respectively, of the fair value of the available-for-sale portfolio were invested in residential mortgage-backed securities issued by U.S. government agencies. These securities have the implicit backing of the U.S. government and the Company expects to receive full par value upon maturity or pay-down, as well as all interest payments.

Gains and Losses — For the years ended December 31, 2018 and 2016, the Company had nominal net realized gains or losses. For the year ended December 31, 2017, the Company recognized $12.2 million of investment income from the redemption at par value of $12.7 million of a previously impaired asset-backed security in "Investment revenue" on the Consolidated Statement of Operations. Prior to the redemption, the security had $0.5 million in book value with $7.9 million in unrealized gains. As of December 31, 2018 and 2017, net unrealized gains, net of tax of $1.9 million and $2.2 million, respectively, were included in the Consolidated Balance Sheets in “Accumulated other comprehensive loss.” The Company had nominal unrealized losses in its available-for-sale portfolio as of December 31, 2018 and 2017.

Investment Ratings — In rating the securities in its investment portfolio, the Company uses ratings from Moody’s Investor Service (“Moody’s”), Standard & Poor's (“S&P”) and Fitch Ratings (“Fitch”). If the rating agencies have split ratings, the Company uses the lower of the highest two out of three ratings across the rating agencies for disclosure purposes. If the institution has only two ratings, the Company uses the lower of the two ratings for disclosure purposes. Securities issued or backed by U.S. government agencies are included in the AAA rating category. Investment grade is defined as a security having a Moody’s equivalent rating of Aaa, Aa, A or Baa or an S&P or Fitch equivalent rating of AAA, AA, A or BBB. The Company’s investments consisted of the following ratings as of December 31:



	2018					2017
(Amounts in millions, except percentages)	Number of Securities	Fair Value		Percent of Investments		Number of Securities	Fair Value		Percent of Investments
Investment grade	11	$	4.5	79	%	11	$	5.6	80	%
Below investment grade	36	1.2		21	%	38	1.4		20	%
Total	47	$	5.7	100	%	49	$	7.0	100	%

Had the Company used the lowest rating from the rating agencies in the information presented above, there would be no change to the classifications as of December 31, 2018 and 2017, respectively.

Contractual Maturities — Actual maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations, sometimes without call or prepayment penalties. Maturities of residential mortgage-backed and asset-backed and other securities depend on the repayment characteristics and experience of the underlying obligations.

Fair Value Determination — The Company uses various sources of pricing for its fair value estimates of its available-for-sale portfolio. The percentage of the portfolio for which the various pricing sources were used is as follows as of December 31, 2018 and 2017: 95% and 93% used a third-party pricing service and 5% and 7% used broker quotes, respectively.

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2018

Derivative Instrument Detail [Abstract]

Derivative Financial Instruments

The Company uses forward contracts to manage its foreign currency needs and foreign currency exchange risk arising from its assets and liabilities denominated in foreign currencies. While these contracts may mitigate certain foreign currency risk, they are not designated as hedges for accounting purposes. These contracts will result in gains and losses which are reported in the "Transaction and operations support" line item in the Consolidated Statements of Operations. The Company also reports gains and losses from the spread differential between the rate set for its transactions and the actual cost of currency at the time the Company buys or sells in the open market. The “Transaction and operations support” line in the Consolidated Statements of Operations and the "Net cash provided by operating activities" line in the Consolidated Statements of Cash Flows include the following gains related to assets and liabilities denominated in foreign currencies, for the years ended December 31:



(Amounts in millions)	2018			2017			2016
Net realized foreign currency (loss) gain	$	(5.8	)	$	21.0		$	(5.4	)
Net gain (loss) from the related forward contracts	10.2			(13.5		)	23.6
Net gains from foreign currency transactions and related forward contracts	$	4.4		$	7.5		$	18.2

As of December 31, 2018 and 2017, the Company had $300.2 million and $311.5 million, respectively, of outstanding notional amounts relating to its foreign currency forward contracts. As of December 31, 2018 and 2017, the Company reflects the following fair values of derivative forward contract instruments in its Consolidated Balance Sheets:



		Gross Amount of Recognized Assets				Gross Amount of Offset						Net Amount of Assets Presented in the Consolidated Balance Sheets
(Amounts in millions)	Balance Sheet Location	2018		2017		2018			2017			2018		2017
Forward contracts	Other assets	$	0.2	$	0.4	$	(0.2	)	$	(0.2	)	$	—	$	0.2



		Gross Amount of Recognized Liabilities				Gross Amount of Offset						Net Amount of Liabilities Presented in the Consolidated Balance Sheets
(Amounts in millions)	Balance Sheet Location	2018		2017		2018			2017			2018		2017
Forward contracts	Accounts payable and other liabilities	$	1.4	$	1.2	$	(0.2	)	$	(0.2	)	$	1.2	$	1.0

The Company's forward contracts are primarily executed with counterparties governed by International Swaps and Derivatives Association agreements that generally include standard netting arrangements. Asset and liability positions from forward contracts and all other foreign exchange transactions with the same counterparty are net settled upon maturity.

The Company is exposed to credit loss in the event of non-performance by counterparties to its derivative contracts. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. Collateral generally is not required of the counterparties or of the Company. In the unlikely event the counterparty fails to meet the contractual terms of the derivative contract, the Company’s risk is limited to the fair value of the instrument. The Company has not had any historical instances of non-performance by any counterparties, nor does it anticipate any future instances of non-performance.

Property and Equipment Property and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

The following table is a summary of "Property and equipment, net" as of December 31:



(Amounts in millions)	2018			2017
Computer hardware and software	$	462.6		$	432.1
Signage	59.1			71.3
Equipment at agent locations	59.7			59.1
Office furniture and equipment	28.3			29.6
Leasehold improvements	27.3			28.6
Total property and equipment	637.0			620.7
Accumulated depreciation and amortization	(443.1		)	(405.8		)
Total property and equipment, net	$	193.9		$	214.9

Depreciation and amortization expense for property and equipment for 2018, 2017 and 2016 was $74.8 million, $73.0 million and $76.9 million, respectively.

At December 31, 2018 and 2017, the Company had $3.8 million and $5.1 million, respectively, in accrued purchases of property and equipment included in “Accounts payable and other liabilities” in the Consolidated Balance Sheets.

During 2018 and 2016, the Company recognized a loss of $0.1 million and $0.2 million, respectively, on disposals of its property and equipment. The losses were recorded in the “Occupancy, equipment and supplies” line in the Consolidated Statements of Operations. During 2017, the Company had nominal losses related to disposals of its property and equipment.

Goodwill and Intangible Assets Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Intangible Assets

Goodwill — The Company's goodwill balance was $442.2 million as of December 31, 2018 and 2017, and all relates to the Global Funds Transfer segment. The Company performed an annual assessment of goodwill during the fourth quarter of 2018, 2017 and 2016. No impairments of goodwill were recorded in 2018, 2017 and 2016.

The following table is a summary of the gross goodwill balances and accumulated impairments as of December 31:



	2018					2017
(Amounts in millions)	Gross Goodwill		Accumulated Impairments			Gross Goodwill		Accumulated Impairments
Global Funds Transfer	$	445.4	$	(3.2	)	$	445.4	$	(3.2	)

Intangibles — The following table is a summary of intangible assets included in “Other assets” in the Consolidated Balance Sheets as of December 31:



	2018							2017
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Contractual and customer relationships	$	9.2	$	(7.6	)	$	1.6	$	10.7	$	(7.8	)	$	2.9
Non-compete agreements	0.6		(0.6		)	—		1.0		(0.9		)	0.1
Developed technology	0.6		(0.4		)	0.2		0.6		(0.3		)	0.3
Total intangible assets	$	10.4	$	(8.6	)	$	1.8	$	12.3	$	(9.0	)	$	3.3

Intangible asset amortization expense for 2018, 2017 and 2016 was $1.5 million, $2.1 million and $3.0 million, respectively. The estimated future intangible asset amortization expense is $0.5 million, $0.5 million, $0.5 million, and $0.3 million for 2019, 2020, 2021 and 2022, respectively.

Debt

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Debt

The following is a summary of the Company's outstanding debt as of December 31:



	December 31, 2018					December 31, 2017
(Amounts in millions, except percentages)	Effective Interest Rate					Effective Interest Rate
Senior secured credit facility due 2020	5.59	%	$	904.4		4.94	%	$	914.2
Unamortized debt issuance costs and debt discount			(3.4		)			(6.1		)
Total debt, net			$	901.0				$	908.1

2013 Credit Agreement — On March 28, 2013, the Company, as borrower, entered into an Amended and Restated Credit Agreement (the "2013 Credit Agreement") with Bank of America, N.A. ("BOA"), as administrative agent, the financial institutions party thereto as lenders and the other agents party thereto. The 2013 Credit Agreement provides for (i) a senior secured five-year revolving credit facility up to an aggregate principal amount of $125.0 million (the "Revolving Credit Facility") and (ii) a senior secured seven-year term loan facility of $850.0 million (the "Term Facility"). The Revolving Credit Facility includes a sub-facility that permits the Company to request the issuance of letters of credit up to an aggregate amount of $50.0 million, with borrowings available for general corporate purposes.

On April 2, 2014, the Company, as borrower, entered into a First Incremental Amendment and Joinder Agreement (the "Incremental Agreement") with BOA, as administrative agent, and various lenders. The Incremental Agreement provided for (a) a tranche under the Term Facility in an aggregate principal amount of $130.0 million (the "Tranche B-1 Term Loan Facility") to be made available to the Company under the 2013 Credit Agreement, (b) an increase in the Revolving Credit Facility under the 2013 Credit Agreement from $125.0 million to $150.0 million and (c) certain other amendments to the 2013 Credit Agreement including, without limitation, (i) amendments to certain of the conditions precedent with respect to these incremental borrowings, (ii) an increase in the maximum secured leverage ratio with which the Company is required to comply as of the last day of each fiscal quarter, and (iii) amendments to permit the Company to borrow up to $300.0 million under the Term Facility for share repurchases exclusively from affiliates of THL and Goldman, Sachs & Co. ("Goldman Sachs"). The Company borrowed $130.0 million under the Tranche B-1 Term Loan Facility on April 2, 2014, and the proceeds were used to fund a portion of the share repurchases from THL reducing the remaining limit for such purchases to $170.0 million.

On December 12, 2016, the Company entered into Amendment No. 2 to the 2013 Credit Agreement, dated December 12, 2016 (the "2016 Amendment"), with BOA, as administrative agent, and various lenders. The 2016 Amendment includes, but is not limited to, decreasing the aggregate Revolving Credit Facility from $150.0 million to $125.0 million from December 12, 2016 to March 27, 2018 (the remainder of the original Revolving Credit Facility term) and increasing the maximum secured leverage ratio, effective the first quarter of 2017. The 2016 Amendment also extended the maturity date of the revolving credit commitments of the extending lenders, which represent commitments of $85.8 million in the aggregate, from March 28, 2018 to September 28, 2019. This 2016 Amendment was accounted for as a modification of debt in accordance with ASC Topic 470, “Debt.”

On January 31, 2019, the Company entered into Amendment No. 4 to Amended and Restated Credit Agreement, effective January 31, 2019 (the “Amendment”) to the 2013 Credit Agreement. The Amendment, among other things, increased the maximum secured leverage ratio for the fourth quarter of 2018 from 3.750:1 to 4.000:1, for the first quarter of 2019 from 3.500:1 to 4.250:1 and for the second quarter of 2019 from 3.500:1 to 4.500:1. In addition, the Amendment decreased the aggregate revolving credit commitments from $85.8 million to $45.0 million and tightened certain negative covenant baskets for the benefit of the revolving lenders only when the pro forma secured leverage ratio of the Company is greater than 3.75:1. The Amendment also provides that in the event the Company’s cash balance exceeds $140.0 million at the end of any month, the Company would be required to use such excess cash to pay any outstanding obligations to the revolving lenders under the 2013 Credit Agreement, and that the Company may not draw on the Revolving Credit Facility to the extent that the Company would have a cash balance in excess of $140.0 million after giving effect to such borrowing. As of March 6, 2019, the Revolving Credit Facility remains undrawn.

The 2013 Credit Agreement is secured by substantially all of the non-financial assets of the Company and its material domestic subsidiaries that guarantee the payment and performance of the Company’s obligations under the 2013 Credit Agreement.

The Company may elect an interest rate under the 2013 Credit Agreement at each reset period based on the BOA prime bank rate or the Eurodollar rate. The interest rate election may be made individually for the Term Facility and each draw under the Revolving Credit Facility. The interest rate will be either the “alternate base rate” (calculated in part based on the BOA prime rate) plus either 200 or 225 basis points (depending on the Company's secured leverage ratio or total leverage ratio, as applicable, at such time) or the Eurodollar rate plus either 300 or 325 basis points (depending on the Company's secured leverage ratio or total leverage ratio, as applicable, at such time). For the years ended December 31, 2018, 2017 and 2016, the Eurodollar rate was the effectively elected primary interest basis. Under the terms of the 2013 Credit Agreement, the minimum interest rate applicable to Eurodollar borrowings under the Term Facility is 100 basis points plus the applicable margins previously referred to in this paragraph. The Company's effective interest rate on the senior secured borrowings increased from 4.94% at December 31, 2017 to 5.59% at December 31, 2018 due to an increase in the Eurodollar rate.

Fees on the daily unused availability under the Revolving Credit Facility are 50 basis points. As of December 31, 2018, the Company had no outstanding letters of credit and no borrowings under the Revolving Credit Facility, and subsequent to the January 31, 2019 amendment, the Company has $45.0 million of availability.

Debt Covenants and Other Restrictions — Borrowings under the 2013 Credit Agreement are subject to various limitations that restrict the Company’s ability to: incur additional indebtedness; create or incur additional liens; effect mergers and consolidations; make certain acquisitions or investments; sell assets or subsidiary stock; pay dividends and other restricted payments; and effect loans, advances and certain other transactions with affiliates. In addition, the Revolving Credit Facility has covenants that place limitations on the use of proceeds from borrowings under the facility.

The terms of our debt agreements place significant limitations on the amount of restricted payments we may make, including dividends on our common stock and our repurchase of our capital stock. Subject to certain customary conditions, we may (i) make restricted payments in an aggregate amount not to exceed $50.0 million (without regard to a pro forma leverage ratio calculation), (ii) make restricted payments up to a formulaic amount determined based on an incremental build-up of our consolidated net income in future periods (subject to compliance with a maximum pro forma leverage ratio calculation) and (iii) repurchase capital stock from THL and Goldman Sachs in a remaining aggregate amount up to $170.0 million as discussed above.

The 2013 Credit Agreement contains various financial and non-financial covenants. A violation of these covenants could negatively impact the Company's liquidity by restricting the Company's ability to borrow under the Revolving Credit Facility and/or causing acceleration of amounts due under the credit facilities. The financial covenants in the 2013 Credit Agreement measure leverage, interest coverage and liquidity. Leverage is measured through a senior secured debt ratio calculated as consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted for certain items such as net securities gains, stock-based compensation expense, certain legal settlements and asset impairments, among other items, also referred to as adjusted EBITDA. This measure is similar, but not identical, to Adjusted EBITDA (EBITDA adjusted for certain significant items) as discussed in Note 12 — Stock-Based Compensation. Interest coverage is calculated as adjusted EBITDA to net cash interest expense.

The Company's assets in excess of payment service obligations used for the asset coverage calculation, which is equal to total cash and cash equivalents and settlement assets less payment service obligations, are $145.5 million and $190.0 million as of December 31, 2018 and December 31, 2017, respectively.

The 2013 Credit Agreement also has quarterly financial covenants to maintain the following interest coverage and secured leverage ratios:



	Interest Coverage Minimum Ratio	Secured Leverage Ratio Not to Exceed
July 1, 2018 through December 31, 2018	2.25:1	4.000:1
January 1, 2019 through March 31, 2019	2.25:1	4.250:1
April 1, 2019 through June 30, 2019	2.25:1	4.500:1

As of December 31, 2018, the Company was in compliance with its financial covenants: our interest coverage ratio was 5.19 to 1.00 and our secured leverage ratio was 3.452 to 1.00. We continuously monitor our compliance with our debt covenants.

Debt Issuance Costs —The Company presents debt issuance costs as a direct deduction from the carrying amount of the related indebtedness and amortizes these costs over the term of the related debt liability using the effective interest method. Amortization is recorded in “Interest expense” on the Consolidated Statements of Operations.

The Company records debt issuance costs for its Revolving Credit Facility in Other assets on its Consolidated Balance Sheets and related amortization is recorded in "Interest expense" on the Consolidated Statements of Operations. The unamortized costs associated with the Revolving Credit Facility were $0.3 million and $0.7 million as of December 31, 2018 and 2017, respectively.

Debt Discount — The Company records debt discount as a deduction from the carrying amount of the related indebtedness on its Consolidated Balance Sheets with the respective debt discount amortization recorded in “Interest expense."

Debt Extinguishment Costs — There were no debt extinguishment costs recognized in 2018 or 2017. In 2016, the Company recognized debt extinguishment costs of $0.3 million in connection with the Term Facility principal payments and debt repurchase discussed above which are recorded in "Debt extinguishment costs" on the Consolidated Statements of Operations.

Interest Paid in Cash — The Company paid $50.7 million, $41.9 million and $41.6 million of interest in 2018, 2017 and 2016, respectively.

Maturities — At December 31, 2018, debt totaling $892.1 million will mature in March 2020, while debt principal totaling $12.3 million will be paid quarterly in increments of approximately $2.5 million through the maturity date. Any borrowings under the Revolving Credit Facility will mature in September 2019.

Pension and Other Benefits

12 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

Pension and Other Benefits

Pension Benefits — The Company's Pension Plan is a frozen, non-contributory funded plan under which no new service or compensation credits are accrued by the plan participants. Cash accumulation accounts continue to be credited with interest credits until participants withdraw their money from the Pension Plan. It is the Company’s policy to fund at least the minimum required contribution each year plus additional discretionary amounts as available and necessary to minimize expenses of the plan.

Supplemental Executive Retirement Plans — The Company has obligations under various supplemental executive retirement plans (“SERPs”), which are unfunded non-qualified defined benefit pension plans providing postretirement income to their participants. As of December 31, 2018, all benefit accruals under the SERPs are frozen with the exception of one plan for which service is frozen but future pay increases are reflected for active participants. It is the Company’s policy to fund the SERPs as benefits are paid.

The Company's Pension Plan and SERPs are collectively referred to as our “Pension."

Postretirement Benefits Other Than Pensions — The Company has an unfunded defined benefit postretirement plan ("Postretirement Benefits") that provides medical and life insurance for its participants. The Company amended the Postretirement Benefits to close it to new participants as of December 31, 2009. Effective July 1, 2011, the Postretirement Benefits was amended to eliminate eligibility for participants eligible for Medicare coverage. As a result of this plan amendment, the Company no longer receives the Medicare retiree drug subsidy. The Company’s funding policy is to make contributions to the Postretirement Benefits as benefits are paid.

Actuarial Valuation Assumptions — The measurement date for the Company’s Pension and Postretirement Benefits is December 31. The following table is a summary of the weighted-average actuarial assumptions used in calculating net periodic benefit expense (income) and the benefit obligation for the years ended and as of December 31:



	Pension Plan						SERPs						Postretirement Benefits
	2018		2017		2016		2018		2017		2016		2018		2017		2016
Net periodic benefit expense (income):
Discount rate for benefit obligation	3.58	%	4.05	%	4.31	%	3.65	%	4.11	%	4.32	%	3.72	%	4.30	%	4.53	%
Discount rate for interest cost	3.13	%	3.36	%	3.45	%	3.20	%	3.31	%	3.32	%	3.20	%	3.38	%	3.43	%
Expected return on plan assets	4.59	%	4.52	%	4.66	%	—		—		—		—		—		—
Rate of compensation increase	—		—		—		5.75	%	5.75	%	5.75	%	—		—		—
Medical trend rate:
Pre-65 initial healthcare cost trend rate	—		—		—		—		—		—		7.75	%	7.00	%	6.50	%
Post-65 initial healthcare cost trend rate	—		—		—		—		—		—		7.75	%	8.25	%	7.75	%
Pre and post-65 ultimate healthcare cost trend rate	—		—		—		—		—		—		4.50	%	4.50	%	4.50	%
Year ultimate healthcare cost trend rate is reached for pre/post-65, respectively	—		—		—		—		—		—		2025/ 2027		2024/ 2025		2024
Benefit obligation:
Discount rate	4.25	%	3.58	%	4.05	%	4.32	%	3.65	%	4.11	%	4.41	%	3.72	%	4.30	%
Rate of compensation increase	—		—		—		5.75	%	5.75	%	5.75	%	—		—		—
Medical trend rate:
Pre-65 initial healthcare cost trend rate	—		—		—		—		—		—		7.25	%	7.75	%	7.00	%
Post-65 initial healthcare cost trend rate	—		—		—		—		—		—		8.25	%	7.75	%	8.25	%
Pre and post-65 ultimate healthcare cost trend rate	—		—		—		—		—		—		4.50	%	4.50	%	4.50	%
Year ultimate healthcare cost trend rate is reached for pre/post-65, respectively	—		—		—		—		—		—		2025		2025/ 2027		2024/ 2025

The Company utilizes a building-block approach in determining the long-term expected rate of return on plan assets. The expected return on plan assets is calculated using a calculated value of plan assets that is determined each year by adjusting the previous year's value by expected returns, benefit payments, and contributions. Asset gains and losses are reflected as equal adjustments over a three-year period. Historical markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital market assumptions are determined. The long-term portfolio return also takes proper consideration of diversification and rebalancing. Peer data and historical returns are reviewed for reasonableness and appropriateness.

Actuarial gains and losses are amortized using the corridor approach, by amortizing the balance exceeding 10% of the greater of the benefit obligation or the fair value of plan assets. The amortization period is primarily based on the average remaining service life of plan participants for the Pension and the average remaining expected life of plan participants for the Postretirement Benefits. The Company estimated the interest cost components utilizing a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows.

Pension Assets — The Company employs a liability-driven investment approach whereby a mix of equity and fixed income securities are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across large and small capitalized securities and international securities. Other assets, such as real estate and high yield bonds, are used to further diversify equity allocations. Fixed income securities are primarily invested in a mix of investment grade corporate bonds, government bonds, and a smaller allocation to non-investment grade debt. The Company uses a strategy to determine the allocation of return-seeking assets driven by the Pension Plan’s funded ratio. Investment risk is measured and monitored on an ongoing basis, including quarterly investment portfolio reviews and periodic liability measurements.

The Company records its pension assets at fair value as described in Note 4 — Fair Value Measurement. The following is a description of the Pension Plan’s investments at fair value and valuation methodologies:

•

Common/collective trusts — The fair values of the underlying funds in the common/collective trusts are valued based on the unit value established for each fund at each valuation date. The unit value of a collective investment fund is calculated by dividing the fund's net asset value on the calculation date by the number of units of the fund that are outstanding on the calculation date, which is derived from observable purchase and redemption activity in the collective investment fund. The Company's common/collective trusts are categorized in Level 2 to the extent that they are readily redeemable at their net asset value.

•

Real estate — The Pension Plan trust holds an investment in a real estate development project that the Company considers to be a Level 3 asset for valuation purposes because it requires the use of unobservable inputs in its fair value measurement. The fair value of this investment represents the estimated fair value of the plan’s related ownership percentage in the project based upon an appraisal of the underlying real property as of each balance sheet date. The fund investment strategy for this asset is long-term capital appreciation.

The following table is a summary of the Pension Plan’s financial assets recorded at fair value, by hierarchy level:



(Amounts in millions)	Level 2		Level 3		Total
December 31, 2018
Common/collective trusts
Short-term investment fund	$	12.2	$	—	$	12.2
Equity securities:
Large cap	10.2		—		10.2
Small cap	2.1		—		2.1
International	5.3		—		5.3
Fixed income securities	80.0		—		80.0
Real estate	—		5.5		5.5
Total investments in the fair value hierarchy	$	109.8	$	5.5	$	115.3
December 31, 2017
Common/collective trusts
Short-term investment fund	$	3.3	$	—	$	3.3
Equity securities:
Large cap	14.7		—		14.7
Small cap	3.4		—		3.4
International	10.1		—		10.1
Fixed income securities	82.2		—		82.2
Real estate	—		5.5		5.5
Total investments in the fair value hierarchy	$	113.7	$	5.5	$	119.2

The Company does not have participant redemption restri