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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form

10-Q

(Mark One)
☑			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended March 31, 2020.
☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from                    to                    .

Commission File Number: 001-31950

MONEYGRAM INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware						16-1690064
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)
2828 N. Harwood St., 15th Floor Dallas, Texas						75201 (Zip Code)
(Address of principal executive offices)

(214) 999-7552

Registrant’s telephone number, including area code

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

___________________________________

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files).    Yes  ☑        No  ☐

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

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☑

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

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

Securities Registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common stock, $0.01 par value			MGI			The NASDAQ Stock Market LLC

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 29, 2020, 63,438,859 shares of common stock, $0.01 par value, were outstanding.

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TABLE OF CONTENTS

			PART I. FINANCIAL INFORMATION
						Page
Item 1. Financial Statements - unaudited
Condensed Consolidated Balance Sheets									1
Condensed Consolidated Statements of Operations									2
Condensed Consolidated Statements of Comprehensive Loss									3
Condensed Consolidated Statements of Cash Flows									4
Condensed Consolidated Statement of Stockholders’ Deficit									5
Notes to the Condensed Consolidated Financial Statements - unaudited									6
Note 1 — Description of the Business and Basis of Presentation									6
Note 2 — Reorganization Costs									7
Note 3 — Settlement Assets and Payment Service Obligations									8
Note 4 — Fair Value Measurement									8
Note 5 — Investment Portfolio									9
Note 6 — Derivative Financial Instruments									10
Note 7 — Debt									11
Note 8 — Pension and Other Benefits									12
Note 9 — Stockholders' Deficit									12
Note 10 — Stock-Based Compensation									13
Note 11 — Income Taxes									14
Note 12 — Commitments and Contingencies									15
Note 13 — Earnings per Common Share									17
Note 14 — Segment Information									18
Note 15 — Revenue Recognition									19
Note 16 — Related Parties									19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations									20
Item 3. Quantitative and Qualitative Disclosures About Market Risk									33
Item 4. Controls and Procedures									33
PART II. OTHER INFORMATION
Item 1. Legal Proceedings									34
Item 1A. Risk Factors									34
Item 6. Exhibits									35
Signatures									36

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Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

 

(Amounts in millions, except share data)			March 31, 2020						December 31, 2019
ASSETS
Cash and cash equivalents			$	131.0					$	146.8
Settlement assets			2,944.5						3,237.0
Property and equipment, net			169.6						176.1
Goodwill			442.2						442.2
Other assets			208.4						182.9
Total assets			$	3,895.7					$	4,185.0
LIABILITIES
Payment service obligations			$	2,944.5					$	3,237.0
Debt, net			877.5						850.3
Pension and other postretirement benefits			76.8						77.5
Accounts payable and other liabilities			264.6						260.6
Total liabilities			4,163.4						4,425.4
COMMITMENTS AND CONTINGENCIES (NOTE 12)
STOCKHOLDERS’ DEFICIT
Participating convertible preferred stock - series D, $0.01 par value, 200,000 shares authorized, 71,282 issued at March 31, 2020 and December 31, 2019			183.9						183.9
Common stock, $0.01 par value, 162,500,000 shares authorized, 65,061,090 shares issued at March 31, 2020 and December 31, 2019			0.7						0.7
Additional paid-in capital			1,118.8						1,116.9
Retained loss			(1,488.5)						(1,460.1)
Accumulated other comprehensive loss			(70.3)						(63.5)
Treasury stock: 1,630,770 and 2,329,906 shares at March 31, 2020 and December 31, 2019, respectively			(12.3)						(18.3)
Total stockholders’ deficit			(267.7)						(240.4)
Total liabilities and stockholders’ deficit			$	3,895.7					$	4,185.0

See Notes to the Condensed Consolidated Financial Statements

1

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Table of Contents

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

 

															Three Months Ended March 31,
(Amounts in millions, except per share data)															2020						2019
REVENUE
Fee and other revenue															$	280.8					$	301.0
Investment revenue															10.1						14.4
Total revenue															290.9						315.4
EXPENSES
Fee and other commissions expense															143.2						149.6
Investment commissions expense															3.0						6.3
Direct transaction expense															8.2						5.0
Total commissions and direct transaction expenses															154.4						160.9
Compensation and benefits															53.4						59.4
Transaction and operations support															38.0						52.1
Occupancy, equipment and supplies															14.9						15.4
Depreciation and amortization															17.1						19.0
Total operating expenses															277.8						306.8
OPERATING INCOME															13.1						8.6
Other expenses
Interest expense															23.8						13.9
Other non-operating expense															1.1						1.6
Total other expenses															24.9						15.5
Loss before income taxes															(11.8)						(6.9)
Income tax expense															9.7						6.6
NET LOSS															$	(21.5)					$	(13.5)
Basic and diluted loss per common share															$	(0.28)					$	(0.21)
Basic and diluted weighted-average outstanding common shares and equivalents used in computing loss per share															77.4						64.8

See Notes to the Condensed Consolidated Financial Statements

2

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Table of Contents

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED

 

															Three Months Ended  March 31,
(Amounts in millions)															2020						2019
NET LOSS															$	(21.5)					$	(13.5)
OTHER COMPREHENSIVE LOSS
Net change in unrealized holding gains on available-for-sale securities arising during the period															—						0.2
Net change in pension liability due to amortization of prior service credit and net actuarial loss, net of tax benefit of $0.1 for the three months ended March 31, 2020 and 2019															0.4						0.8
Unrealized non-U.S. dollar translation adjustments, net of tax benefit of $0.0 for the three months ended March 31, 2020 and 2019															(7.2)						(3.1)
Other comprehensive loss															(6.8)						(2.1)
COMPREHENSIVE LOSS															$	(28.3)					$	(15.6)

See Notes to the Condensed Consolidated Financial Statements

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MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

 

			Three Months Ended March 31,
(Amounts in millions)			2020						2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(21.5)					$	(13.5)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization			17.1						19.0
Signing bonus amortization			12.5						11.7
Amortization of debt discount and debt issuance costs			2.9						0.7
Non-cash compensation and pension expense			3.1						4.1
Signing bonus payments			(25.0)						(10.1)
Change in other assets			(21.2)						(4.0)
Change in accounts payable and other liabilities			5.7						(12.0)
Other non-cash items, net			—						4.4
Net cash (used in) provided by operating activities			(26.4)						0.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(10.1)						(12.7)
Net cash used in investing activities			(10.1)						(12.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt			(1.6)						(2.5)
Proceeds from revolving credit facility			23.0						—
Payments to tax authorities for stock-based compensation			(0.7)						(0.7)
Net cash provided by (used in) financing activities			20.7						(3.2)
NET CHANGE IN CASH AND CASH EQUIVALENTS			(15.8)						(15.6)
CASH AND CASH EQUIVALENTS—Beginning of period			146.8						145.5
CASH AND CASH EQUIVALENTS—End of period			$	131.0					$	129.9
Supplemental cash flow information:
Cash payments for interest			$	17.6					$	12.8

See Notes to the Condensed Consolidated Financial Statements

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MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

UNAUDITED

(Amounts in millions)			Preferred Stock						Common Stock						Additional Paid-In Capital						Retained Loss						Accumulated Other Comprehensive Loss						Treasury Stock						Total
January 1, 2020			$	183.9					$	0.7					$	1,116.9					$	(1,460.1)					$	(63.5)					$	(18.3)					$	(240.4)
Net loss			—						—						—						(21.5)						—						—						(21.5)
Stock-based compensation activity			—						—						1.9						(6.9)						—						6.0						1.0
Other comprehensive loss			—						—						—						—						(6.8)						—						(6.8)
March 31, 2020			$	183.9					$	0.7					$	1,118.8					$	(1,488.5)					$	(70.3)					$	(12.3)					$	(267.7)

(Amounts in millions)			Preferred Stock						Common Stock						Additional Paid-In Capital						Retained Loss						Accumulated Other Comprehensive Loss						Treasury Stock						Total
January 1, 2019			$	183.9					$	0.6					$	1,046.8					$	(1,403.6)					$	(67.5)					$	(29.0)					$	(268.8)
Net loss			—						—						—						(13.5)						—						—						(13.5)
Stock-based compensation activity			—						—						2.6						(9.5)						—						9.0						2.1
Cumulative effect of adoption of ASU 2018-02			—						—						—						15.1						(15.1)						—						—
Other comprehensive loss			—						—						—						—						(2.1)						—						(2.1)
March 31, 2019			$	183.9					$	0.6					$	1,049.4					$	(1,411.5)					$	(84.7)					$	(20.0)					$	(282.3)

See Notes to the Condensed Consolidated Financial Statements

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MONEYGRAM INTERNATIONAL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

Note 1 — 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 through two primary distribution channels: walk-in and digital. Through our walk-in channel, we offer services through third-party agents, including retail chains, independent retailers, post offices and other financial institutions. Additionally, we have limited Company-operated retail locations. We offer solutions such as moneygram.com, mobile solutions, fintech and digital partners, wallets and account deposit services as part of our digital channel. The Financial Paper Products segment provides official check outsourcing services and money orders through financial institutions and agent locations.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements of MoneyGram are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The Condensed Consolidated Balance Sheets are unclassified due to the timing uncertainty surrounding the payment of settlement obligations.

Impact of Novel Coronavirus (“COVID-19”) On Our Financial Statements — The global spread and unprecedented impact of COVID-19 is complex and rapidly-evolving. In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak has reached all of the regions in which we do business, and governmental authorities around the world have implemented numerous measures attempting to contain and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, shutdowns, limitations or closures of non-essential businesses, school closures and social distancing requirements. The global spread of COVID-19 and actions taken in response to the virus have negatively affected our workforce, agents, customers, financial markets, employment rates, consumer spending and credit markets, caused significant economic and business disruption, volatility and financial uncertainty, and led to a significant economic downturn.

We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. The accounting estimates and other matters we assessed included, but were not limited to, our goodwill and other long-lived assets, allowance for credit losses, pension and other postretirement benefits and valuation allowances for tax assets. Based on our current assessment of these estimates, the Company recorded an increase in its deferred tax asset valuation allowance of $10.6 million, of which $10.1 million related to balances which existed at the beginning of the year. See Note 11 — Income Taxes for more information. There was no other material impact to our condensed consolidated financial statements as of and for the quarter ended March 31, 2020, based on the Company's assessment of its estimates. As additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods.

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.

Recent Accounting Pronouncements and Related Developments — In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 2016-13, the FASB issued the following ASUs:

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

•ASU 2019-04 (Issued April 2019) — Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments

•ASU 2019-05 (Issued May 2019) — Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief

•ASU 2019-10 (Issued November 2019) — Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates

•ASU 2019-11 (Issued November 2019) — Codification Improvements to Topic 326, Financial Instruments - Credit Losses

•ASU 2020-02 (Issued February 2020) — Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update)

•ASU 2020-03 (Issued March 2020) — Codification Improvements to Financial Instruments

ASU 2019-10 changed the effective date of ASU 2016-13 for public business entities that meet the definition of a Securities and Exchange Commission ("SEC") filer but that are eligible to be a smaller reporting company to fiscal years beginning after December 15, 2022. MoneyGram is a smaller reporting company and, as such, will adopt the amendments in these standards in 2023. We are still evaluating these ASUs, but we do not believe the adoption will have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - 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, as such, its disclosure requirements will be reflected in the 2020 Annual Report on Form 10-K. This standard does not impact our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this ASU provide, if certain criteria are met, optional expedients and exceptions for applying the GAAP requirements for contract modifications, hedging relationships and sales or transfers of debt securities, that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform through December 31, 2022. The adoption of this ASU is optional and the election can be made anytime during the effective period. The amendments in this ASU are effective as of March 12, 2020 through December 31, 2022. MoneyGram is currently evaluating the impact of this standard and has not yet determined whether we will elect the optional expedients.

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 condensed consolidated financial statements.

Note 2 — Reorganization Costs

In the fourth quarter of 2019, the Company committed to an operational plan to reduce overall operating expenses, including the elimination of approximately 120 positions across the Company (the “2019 Organizational Realignment”). The workforce reduction was designed to streamline operations and structure the Company in a way that will be more agile and aligned around our plan to execute market-specific strategies tailored to different segments. The workforce reduction was substantially completed in the first quarter of 2020 with $7.5 million of costs incurred consisting primarily of one-time termination benefits for employee severance and related costs, which are recorded in “Compensation and benefits” on the Condensed Consolidated Statements of Operations in the Global Funds Transfer reporting segment.

The following table is a roll-forward of the reorganization costs accrual as of March 31, 2020:

(Amounts in millions)			2019 Organizational Realignment
Balance, December 31, 2019			$	4.6
Expenses			0.7
Cash payments			(4.6)
Balance, March 31, 2020			$	0.7

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The following table is a summary of the cumulative reorganization costs incurred to date in operating expenses as of March 31, 2020:

(Amounts in millions)			2019 Organizational Realignment
Balance, December 31, 2019			$	6.8
First quarter 2020			0.7
Total cumulative reorganization costs incurred to date			$	7.5

Note 3 — 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.

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

(Amounts in millions)			March 31, 2020						December 31, 2019
Settlement assets:
Settlement cash and cash equivalents			$	1,371.6					$	1,531.1
Receivables, net			579.5						715.5
Interest-bearing investments			989.1						985.9
Available-for-sale investments			4.3						4.5
			$	2,944.5					$	3,237.0
Payment service obligations			$	(2,944.5)					$	(3,237.0)

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Note 4 — 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.

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
March 31, 2020
Financial assets:
Available-for-sale investments:
Residential mortgage-backed securities									$	3.5					$	—					$	3.5
Asset-backed and other securities									—						0.8						0.8
Forward contracts									4.3						—						4.3
Total financial assets									$	7.8					$	0.8					$	8.6
Financial liabilities:
Forward contracts									$	—					$	—					$	—
December 31, 2019
Financial assets:
Available-for-sale investments:
Residential mortgage-backed securities									$	3.6					$	—					$	3.6
Asset-backed and other securities									—						0.9						0.9
Forward contracts									—						—						—
Total financial assets									$	3.6					$	0.9					$	4.5
Financial liabilities:
Forward contracts									$	0.8					$	—					$	0.8

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 the first lien credit facility is estimated using an observable market quotation (Level 2). As of March 31, 2020 and December 31, 2019, the fair value of the first lien credit facility was $460.9 million and $577.6 million, respectively, with carrying value of $640.2 million and $641.8 million, respectively. The fair value of the second lien credit facility is estimated using unobservable market inputs (Level 3), including broker quotes for comparable traded securities and yield curves. As of March 31, 2020 and December 31, 2019, the fair value of the second lien credit facility was $185.7 million and $236.7 million, respectively, with carrying value of $254.6 million and $251.4 million, respectively.

The carrying amounts for the Company's cash and cash equivalents, settlement cash and cash equivalents, receivables, interest-bearing investments and payment service obligations approximate fair value as of March 31, 2020 and December 31, 2019.

Note 5 — Investment Portfolio

The following table shows the components of the investment portfolio:

(Amounts in millions)			March 31, 2020						December 31, 2019
Cash			$	1,500.1					$	1,675.4
Money market securities			2.5						2.5
Cash and cash equivalents (1)			1,502.6						1,677.9
Interest-bearing investments			989.1						985.9
Available-for-sale investments			4.3						4.5
Total investment portfolio			$	2,496.0					$	2,668.3

⁽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.

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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
March 31, 2020
Residential mortgage-backed securities			$	3.1					$	0.4					$	3.5
Asset-backed and other securities			0.2						0.6						0.8
Total			$	3.3					$	1.0					$	4.3
December 31, 2019
Residential mortgage-backed securities			$	3.3					$	0.3					$	3.6
Asset-backed and other securities			0.2						0.7						0.9
Total			$	3.5					$	1.0					$	4.5

As of March 31, 2020 and December 31, 2019, 81% 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.

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. 

Note 6 — Derivative Financial Instruments

The Company uses forward contracts to manage its non-U.S. dollar needs and non-U.S. dollar exchange risk arising from its assets and liabilities denominated in non-U.S. dollars. While these contracts may mitigate certain non-U.S. dollar risk, they are not designated as hedges for accounting purposes and will result in gains and losses. 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 following net (losses) gains related to assets and liabilities denominated in non-U.S. dollar are included in “Transaction and operations support” in the Condensed Consolidated Statements of Operations and in the "Net cash provided by operating activities" line in the Condensed Consolidated Statements of Cash Flows:

															Three Months Ended March 31,
(Amounts in millions)															2020						2019
Net realized non-U.S. dollar loss															$	(3.8)					$	(3.5)
Net gain from the related forward contracts															6.3						5.1
Net gain from non-U.S. dollar transactions and related forward contracts															$	2.5					$	1.6

As of March 31, 2020 and December 31, 2019, the Company had $389.4 million and $349.1 million, respectively, of outstanding notional amounts relating to its non-U.S. dollar forward contracts. As of March 31, 2020 and December 31, 2019, the Company reflects the following fair values of derivative forward contract instruments in its Condensed 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						March 31, 2020						December 31, 2019						March 31, 2020						December 31, 2019						March 31, 2020						December 31, 2019
Forward contracts			Other assets						$	4.8					$	0.2					$	(0.5)					$	(0.2)					$	4.3					$	—

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									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						March 31, 2020						December 31, 2019						March 31, 2020						December 31, 2019						March 31, 2020						December 31, 2019
Forward contracts			Accounts payable and other liabilities						$	0.5					$	1.0					$	(0.5)					$	(0.2)					$	—					$	0.8

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 non-U.S. dollar 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.

Note 7 — Debt

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

(Amounts in millions, except percentages)			March 31, 2020						December 31, 2019
6.95% first lien revolving credit facility due 2022			$	23.0					$	—
7.00% first lien credit facility due 2023			640.2						641.8
13.00% second lien credit facility due 2024			254.6						251.4
Senior secured credit facilities			917.8						893.2
Unamortized debt issuance costs and debt discounts			(40.3)						(42.9)
Total debt, net			$	877.5					$	850.3

First Lien Credit Agreement and Revolving Credit Facility — The First Lien Credit Agreement provides for (i) a senior secured three-year revolving credit facility that may be used for revolving credit loans, swingline loans and letters of credit up to an aggregate principal amount of $35.0 million, which matures September 30, 2022 (the “First Lien Revolving Credit Facility”) and (ii) a senior secured four-year term loan facility in an aggregate principal amount of $645.0 million (the “First Lien Term Credit Facility” and together with the First Lien Revolving Credit Facility, the “First Lien Credit Facility”).

As of March 31, 2020, the Company had $23.0 million borrowings under the First Lien Revolving Credit Facility, which are used for general corporate purposes. The First Lien Credit Agreement also provides that in the event the Company’s cash balance exceeds $130.0 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 our First Lien Revolving Credit Facility, and that the Company may not draw on the First Lien Revolving Credit Facility to the extent that the Company would have a cash balance in excess of $130.0 million after giving effect to such borrowing.

Second Lien Credit Agreement — The Second Lien Credit Agreement provides for a second lien secured five-year term loan facility in an aggregate principal amount of $245.0 million (the “Second Lien Term Credit Facility” and together with the First Lien Credit Facility, the “Credit Facilities”). Subject to certain conditions and limitations, the Company may elect to pay interest under the Second Lien Term Credit Facility partially in cash and partially in kind. The outstanding principal balance for the Second Lien Credit Agreement is due on the maturity date.

The Credit Facilities are secured by substantially all of the Company’s assets and its material domestic subsidiaries that guarantee the payment and performance of the Company’s obligations under the Credit Facilities.

Debt Covenants and Other Restrictions — The Credit Facilities contain 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 make other restricted payments; and effect loans, advances and certain other transactions with affiliates. In addition, the First Lien Revolving Credit Facility requires the Company and its consolidated subsidiaries (w) to maintain a minimum interest coverage ratio, (x) to maintain a minimum asset coverage ratio, (y) to not exceed a maximum first lien leverage ratio, and (z) to not exceed a total leverage ratio. The Second Lien Credit Facility requires the Company to not exceed a maximum secured leverage ratio of 5.50:1.00 commencing September 30, 2019.

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The asset coverage covenant contained in the First Lien Credit Agreement requires the aggregate amount of the Company’s cash and cash equivalents and other settlement assets exceed its aggregate payment service obligations. The Company's assets in excess of payment service obligations used for the asset coverage calculation were $131.0 million and $146.8 million as of March 31, 2020 and December 31, 2019, respectively. The table below summarizes the interest coverage, first lien and total leverage ratio covenants, which are calculated based on the four-fiscal quarter period ending on each quarter end beginning September 30, 2019 through the maturity of the First Lien Credit Facility:

Interest Coverage Minimum Ratio

First Lien Leverage Ratio Not to Exceed

Total Leverage Ratio Not to Exceed

July 1, 2019 through June 30, 2020

2.50:1

3.750:1

5.125:1

July 1, 2020 through December 31, 2020

2.50:1

3.500:1

5.000:1

January 1, 2021 through maturity

2.50:1

3.000:1

4.500:1

As of March 31, 2020, the Company was in compliance with its financial covenants: our interest coverage ratio was 3.374 to 1.00, our first lien leverage ratio was 2.900 to 1.00 and our total leverage ratio was 4.013 to 1.00. We continuously monitor our compliance with our debt covenants.

Note 8 — Pension and Other Benefits

The following table is a summary of net periodic benefit expense for the Company's defined benefit pension plan and supplemental executive retirement plans, collectively referred to as "Pension":

															Three Months Ended March 31,
(Amounts in millions)															2020						2019
Interest cost															$	0.8					$	1.7
Expected return on plan assets															(0.2)						(1.1)
Amortization of net actuarial loss															0.5						0.9
Net periodic benefit expense															$	1.1					$	1.5

The Company had nominal net periodic benefit expense for the three months ended March 31, 2020 and 2019, for its postretirement medical benefit plan ("Postretirement Benefits"). Net periodic benefit expense for the Pension and Postretirement Benefits is recorded in "Other non-operating expense" in the Condensed Consolidated Statements of Operations.

Note 9 — Stockholders' Deficit

Common Stock — No dividends were paid during the three months ended March 31, 2020.

Accumulated Other Comprehensive Loss — The following table is a summary of the significant amounts reclassified out of each component of "Accumulated other comprehensive loss":

			Three Months Ended  March 31,
(Amounts in millions)			2020						2019																		Statement of Operations Location
Pension and Postretirement Benefits adjustments:
Amortization of net actuarial loss			$	0.5					$	0.9																	"Other non-operating expense"
Total before tax			0.5						0.9
Tax benefit, net			(0.1)						(0.1)
Total reclassified for the period, net of tax			$	0.4					$	0.8

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The following table is a summary of the changes to Accumulated other comprehensive loss by component:

(Amounts in millions)			Net Unrealized Gains on Securities Classified as Available-for-sale, Net of Tax						Cumulative non-U.S. dollar Translation Adjustments, Net of Tax						Pension and Postretirement Benefits Adjustment, Net of Tax						Total
January 1, 2020			$	1.6					$	(28.1)					$	(37.0)					$	(63.5)
Other comprehensive loss before reclassification			—						(7.2)						—						(7.2)
Amounts reclassified from accumulated other comprehensive loss			—						—						0.4						0.4
Net current period other comprehensive (loss) income			—						(7.2)						0.4						(6.8)
March 31, 2020			$	1.6					$	(35.3)					$	(36.6)					$	(70.3)

(Amounts in millions)			Net Unrealized Gains on Securities Classified as Available-for-sale, Net of Tax						Cumulative non-U.S. dollar Translation Adjustments, Net of Tax						Pension and Postretirement Benefits Adjustment, Net of Tax						Total
January 1, 2019			$	1.9					$	(24.2)					$	(45.2)					$	(67.5)
Adoption of 2018-02 ASU			—						(3.7)						(11.4)						(15.1)
Other comprehensive income (loss) before reclassification			0.2						(3.1)						—						(2.9)
Amounts reclassified from accumulated other comprehensive loss			—						—						0.8						0.8
Net current period other comprehensive income (loss)			0.2						(3.1)						0.8						(2.1)
March 31, 2019			$	2.1					$	(31.0)					$	(55.8)					$	(84.7)

Note 10 — Stock-Based Compensation

The following table is a summary of the Company's stock-based compensation expense:

															Three Months Ended March 31,
(Amounts in millions)															2020						2019
Stock-based compensation expense															$	2.0					$	2.6

Stock Options — The following table is a summary of the Company’s stock option activity: 

			Shares						Weighted- Average Exercise Price						Weighted- Average Remaining Contractual Term						Aggregate Intrinsic Value ($000,000)
Options outstanding at December 31, 2019			409,296						$	19.34					2.4 years						$	—
Forfeited/Expired			(22,081)						20.65