mgi-20201029
0001273931false00012739312020-10-292020-10-29

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
___________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 29, 2020

MoneyGram International, Inc.
_________________________________________________
(Exact name of registrant as specified in its charter)
Delaware1-3195016-1690064
(State or other jurisdiction of incorporation)(Commission File Number)(I.R.S. Employer Identification Number)
2828 N. Harwood Street, 15th Floor
Dallas,Texas75201
(Address of principal executive offices)(Zip code)
Registrant’s telephone number, including area code: (214) 999-7552
Not applicable
(Former name or former address, if changed since last report)
__________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valueMGIThe NASDAQ Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.  ☐



Item 2.02    Results of Operations and Financial Condition.
On October 29, 2020, MoneyGram International, Inc. (the "Company") issued a press release reporting financial results for its third quarter ended September 30, 2020. A copy of the press release is furnished herewith as Exhibit 99.1.
Item 9.01    Financial Statements and Exhibits.
    (d) Exhibits
Exhibit No.Description of Exhibit
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL).



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                            
MONEYGRAM INTERNATIONAL, INC.
By:/s/ Lawrence Angelilli
Name:Lawrence Angelilli
Title:Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Date:    October 30, 2020




EXHIBIT INDEX
Exhibit No.Description of Exhibit
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL).

Document

Exhibit 99.1
    https://cdn.kscope.io/7f6c3332f0f19ee117fd950eb086f3e5-a2017mglogoa201.jpg
MoneyGram International Reports Third Quarter 2020 Results
Net Income of $10.9 million and Adjusted EBITDA of $68.8 million
Money transfer revenue growth of 5% led by 10% transaction growth year-over-year
176% year-over-year MGO cross-border transaction growth
DALLAS (October 29, 2020) -- MoneyGram International, Inc. (NASDAQ: MGI) today reported financial results for its third quarter ended September 30, 2020.
Third Quarter 2020 Business Highlights
“The amazing performance of our digital business drove yet another impressive quarter as the Company continues to build upon its financial growth trajectory,” said Alex Holmes, MoneyGram Chairman and CEO. “Our customer-centric strategy and growing active customer base helped deliver year-over-year money transfer revenue growth for the quarter, while the strength of our Adjusted EBITDA and cash flow demonstrate how our investments to build a scalable infrastructure are paying off. It’s exciting to see the successful execution of our digital transformation be a catalyst for sustainable and profitable growth.”
Digital performance in the quarter was led by MoneyGram's online direct-to-consumer channel (MGO):
MGO delivered 111% year-over-year transaction growth and 114% revenue growth driven by strong consumer demand for the MoneyGram app, high customer retention rates, and increased productivity rates
Cross-border online transactions and revenue grew an impressive 176% and 174%, respectively, year-over-year for the third quarter
MGO, the Company's largest generator of money transfer transactions, now has 3 of its individual country sites on the Company's top 10 list of money transfer transaction generating sources
Total digital, which includes MGO, had year-over-year transaction growth of 106% in the third quarter
Digital revenue accelerated from the second quarter to $53.2 million representing a 95% year-over-year revenue growth rate for the third quarter
Digital partnerships delivered transaction growth of 79% in the third quarter
Account deposit and mobile wallet transactions increased 157% in the third quarter
Digital transactions accounted for 27% of all money transfer transactions in the third quarter
The Company remains focused on executing its long-term strategy while managing through the crisis. During the quarter, the Company achieved a number of important milestones:
Expanded global account deposit and wallet presence while enhancing the speed of delivery and customer experience
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Launched new partnerships with telecom and fintech providers in Africa, one of the fastest growing markets for mobile money transactions
Solidified key existing relationships including a three-year renewal with Walmart
Third Quarter 2020 Financial Results, Year-Over-Year
Total revenue was $323.2 million, representing a slight increase on a reported basis or -1% on a constant currency basis
Money transfer revenue was $297.6 million, up 5%, or 4% on a constant currency basis, driven by the strength of our digital business
Investment revenue was $3.0 million for the quarter representing a decline of $10.4 million due to lower prevailing interest rates
Total operating expenses of $286.6 million, improved $19.2 million or 6%
Transaction and Operations Support expenses decreased $31.5 million or 56% which included:
Agile management of expenses through the pandemic as the Company continues to benefit from its Digital Transformation
$8.9 million net benefit from Ripple market development fees of $9.3 million, partially offset by related transaction and trading expenses of $0.4 million
The Company recorded $6.3 million in foreign exchange gains primarily related to currency movements during the pandemic
Operating Income was $36.6 million, an increase of 123% year-over-year
Operating Income margin expanded from 5.1% to 11.3% year-over-year
Net Income was $10.9 million for the quarter representing a return to positive net income for the Company and an increase of $18.6 million
Diluted earnings per share was $0.12 and diluted adjusted earnings per share was $0.16
Adjusted EBITDA increased 33% to $68.8 million, or 29% on a constant currency basis
Adjusted EBITDA margin improved 530 basis points to 21%
Adjusted Free Cash Flow was $25.4 million, an increase of 173%
Holmes concluded: “Amidst the ongoing global pandemic we have been able to consistently deliver strong results. The focused execution of our strategy and agile management of the business will continue to enable the Company to successfully navigate this uncertain environment.”
Balance Sheet Highlights
Cash and cash equivalents on hand at quarter end was $162.9 million compared to $130.6 million at the end of the second quarter 2020. Third quarter interest expense was $23.0 million and capital expenditures were $10.7 million.
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Fourth Quarter 2020 Outlook Update
While the strength of the Company's digital business is driving improved performance, the global pandemic continues to create economic uncertainty throughout the world. Most countries continue to maintain restrictions on travel and over the last few days, several major countries have reinstituted lockdowns. Given how recent these new restrictions are, it's difficult to predict their duration and the resulting impact on our business.
However, assuming the global economic environment were to remain consistent with the third quarter the Company is providing the following outlook:
For the fourth quarter, the Company anticipates reporting total revenue growth of approximately one percent on the continued strength of the money transfer business, offset by lower investment income. Based on these revenue trends coupled with the continued expense benefit from its Digital Transformation, the Company anticipates reporting Adjusted EBITDA growth of approximately 10 percent.
Conference Call
MoneyGram International will host a conference call on October 30, at 9:00 a.m. ET, to discuss its results. Alex Holmes, Chairman and CEO, Larry Angelilli, CFO and Kamila Chytil, COO, will host the call.
Participant Dial-In Numbers:
U.S.: 1-888-204-4368
International:1-929-477-0402
Webcast:public.viavid.com/index.php?id=141889
Replay:U.S 1-844-512-2921 or International 1-412-317-6671
Replay ID: 3736690
Replay is available through November 6, 2020, 11:59 p.m. ET
About MoneyGram International, Inc.
MoneyGram is a global leader in cross-border P2P payments and money transfers. Its consumer-centric capabilities enable family and friends to quickly and affordably send money in more than 200 countries and territories, with 81 now digitally enabled.
MoneyGram leverages its modern, mobile, and API-driven platform and collaborates with the world's leading brands to serve millions of people each year through both its walk-in business and its direct-to-consumer digital business.
With a strong culture of innovation and a relentless focus on utilizing technology to deliver the world's best customer experience, MoneyGram is leading the evolution of digital P2P payments.
For more information, please visit MoneyGram.com and follow @MoneyGram.
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Forward-Looking Statements
This communication contains forward-looking statements which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect MoneyGram's current beliefs, expectations or intentions regarding future events and speak only as of the date they are made. Words such as "may," "might," "will," "could," "should," "would," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "forecast," "outlook," "continue," and similar expressions are intended to identify such forward-looking statements. The statements in this communication that are not historical statements are forward-looking statements within the meaning of the federal securities laws. Specific forward-looking statements include, among others, statements regarding the Company's projected results of operations and specific factors expected to impact the Company's results of operations. Forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict and many of which are beyond MoneyGram's control, which could cause actual results to differ materially from the results expressed or implied by the statements.
These risks and uncertainties include, but are not limited to:
the impact of the COVID-19 pandemic or future pandemics on our business, including the potential for work stoppages, lockdowns, shelter-in-place, or restricted movement guidelines, service delays, lower consumer and commercial activity;
our ability to compete effectively;
our ability to maintain key agent or biller relationships, or a reduction in business or transaction volume from these relationships, including our largest agent, Walmart, whether through the introduction by Walmart of additional competing "white label" branded money transfer products or otherwise;
our ability to manage fraud risks from consumers or agents;
the ability of us and our agents to comply with U.S. and international laws and regulations;
litigation or investigations involving us or our agents;
uncertainties relating to compliance with the Deferred Prosecution Agreement, as amended on July 24, 2020 ("Amended DPA"), entered into with the U.S. federal government and the effect of the Amended DPA on our reputation and business and our ability to make payments required under the Amended DPA;
regulations addressing consumer privacy, data use and security;
our ability to successfully develop and timely introduce new and enhanced products and services and our investments in new products, services or infrastructure changes;
our ability to manage risks associated with our international sales and operations;
our offering of money transfer services through agents in regions that are politically volatile;
changes in tax laws or an unfavorable outcome with respect to the audit of our tax returns or tax positions, or a failure by us to establish adequate reserves for tax events;
our substantial debt service obligations, significant debt covenant requirements and credit ratings;
major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions;
the ability of us and our agents to maintain adequate banking relationships;
a security or privacy breach in systems, networks or databases on which we rely and disruptions to our computer network systems and data centers;
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weakness in economic conditions, in both the U.S. and global markets;
a significant change, material slow down or complete disruption of international migration patterns;
the financial health of certain European countries or the secession of a country from the European Union;
our ability to manage credit risks from our agents and official check financial institution consumers;
our ability to adequately protect our brand and intellectual property rights and to avoid infringing on the rights of others;
our ability to manage risks related to the operation of retail locations and the acquisition or start-up of businesses;
any restructuring actions and cost reduction initiatives that we undertake may not deliver the expected results and these actions may adversely affect our business;
our capital structure;
and uncertainties described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of MoneyGram's public period reports filed with the U.S. Securities and Exchange Commission (the SEC), including MoneyGram's annual report on Form 10-K for the year ended December 31, 2019, and subsequent quarterly reports on Form 10-Q.
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in MoneyGram's SEC filings. MoneyGram's SEC filings may be obtained by contacting MoneyGram, through MoneyGram's web site at ir.moneygram.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System ("EDGAR") at www.sec.gov. MoneyGram undertakes no obligation to publicly update or revise any forward-looking statement.
###


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Non-GAAP Measures
In addition to results presented in accordance with accounting principles generally accepted in the United States (GAAP), this news release and related tables include certain non-GAAP financial measures, including a presentation of EBITDA (earnings before interest, taxes, depreciation and amortization, including agent signing bonus amortization), Adjusted EBITDA (EBITDA adjusted for certain significant items), Adjusted EBITDA margin, Adjusted Free Cash Flow (Adjusted EBITDA less cash interest, cash taxes and cash payments for capital expenditures and agent signing bonuses), constant currency measures (which assume that amounts denominated in foreign currencies are translated to the U.S. dollar at rates consistent with those in the prior year), diluted adjusted income (loss) per share and adjusted net income. In addition, we present adjusted operating income and adjusted operating margin for our two reporting segments. The following tables include a full reconciliation of non-GAAP financial measures to the related GAAP financial measures. The equivalent GAAP financial measures for projected results are not provided, and projected results do not reflect the potential impact of certain non-GAAP adjustments, which include (but in future periods, may not be limited to) stock-based, contingent and incentive compensation costs; compliance enhancement program costs; direct monitor costs; legal and contingent matter costs; restructuring and reorganization costs; currency changes; and the tax effect of such items. We cannot reliably predict or estimate if and when these types of costs, adjustments or changes may occur or their impact to our financial statements. Accordingly, a reconciliation of the non-GAAP financial measures to the equivalent GAAP financial measures for projected results is not available.
We believe that these non-GAAP financial measures provide useful information to investors because they are an indicator of the strength and performance of ongoing business operations. These calculations are commonly used as a basis for investors, analysts and other interested parties to evaluate and compare the operating performance and value of companies within our industry. Finally, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, constant currency, diluted adjusted income (loss) per share and adjusted net income figures are financial and performance measures used by management in reviewing results of operations, forecasting, allocating resources or establishing employee incentive programs. Although MoneyGram believes the above non-GAAP financial measures enhance investors' understanding of its business and performance, these non-GAAP financial measures should not be considered in isolation or as substitutes for the accompanying GAAP financial measures.
Description of Tables
Table One-Condensed Consolidated Statements of Operations
Table Two-Segment Results
Table Three-Segment Reconciliations
Table Four-Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow
Table Five-Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - Adjusted Net Income and Adjusted Diluted EPS
Table Six-Condensed Consolidated Balance Sheets
Table Seven-Condensed Consolidated Statements of Cash Flows

CONTACTS
Investor Relations:Media Relations:
214-979-1400Stephen Reiff
InvestorRelations@moneygram.commedia@moneygram.com

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TABLE ONE
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in millions, except percentages and
    per share data)
Three Months Ended September 30,
2020 vs
Nine Months Ended September 30,
2020 vs
202020192019202020192019
REVENUE
Fee and other revenue$320.2 $308.8 $11.4 $876.5 $919.1 $(42.6)
Investment revenue3.0 13.4 (10.4)17.4 42.3 (24.9)
Total revenue323.2 322.2 1.0 893.9 961.4 (67.5)
Total revenue change, as reported— %(7)%(7)%(13)%
Total revenue change, constant currency(1)%(5)%(7)%(11)%
OPERATING EXPENSES
Total commissions and direct transaction
    expenses
174.5 165.8 8.7 481.8 494.5 (12.7)
Compensation and benefits56.3 50.5 5.8 162.9 163.4 (0.5)
Transaction and operations support (1)
24.3 55.8 (31.5)83.6 162.4 (78.8)
Occupancy, equipment and supplies15.6 15.5 0.1 44.7 46.4 (1.7)
Depreciation and amortization15.9 18.2 (2.3)49.2 55.4 (6.2)
Total operating expenses286.6 305.8 (19.2)822.2 922.1 (99.9)
OPERATING INCOME36.6 16.4 20.2 71.7 39.3 32.4 
Other expenses
Interest expense23.0 24.8 (1.8)69.5 52.7 16.8 
Other non-operating expense (2)
1.1 1.2 (0.1)3.4 38.1 (34.7)
Total other expenses24.1 26.0 (1.9)72.9 90.8 (17.9)
Income (loss) before income taxes12.5 (9.6)22.1 (1.2)(51.5)50.3 
Income tax expense1.6 (1.9)3.5 14.0 (3.1)17.1 
NET INCOME (LOSS)$10.9 $(7.7)$18.6 $(15.2)$(48.4)$33.2 
EARNINGS (LOSS) PER COMMON SHARE
Basic$0.14 $(0.10)$0.24 $(0.20)$(0.70)$0.50 
Diluted$0.12 $(0.10)$0.22 $(0.20)$(0.70)$0.50 
Weighted-average outstanding common
shares and equivalents used in
computing earnings (loss) per share
Basic 77.9 76.4 1.5 77.7 69.2 8.5 
Diluted88.7 76.4 12.3 77.7 69.2 8.5 
(1) The three and nine months ended September 30, 2020 include Ripple market development fees of $9.3 million and $41.0 million, respectively,
partially offset by related transaction and trading expenses of $0.4 million and $11.2 million, respectively.
(2) The nine months ended September 30, 2019 include non-cash pension settlement charge of $31.3 million and debt extinguishment cost of
$2.4 million.

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TABLE TWO
MONEYGRAM INTERNATIONAL, INC.
SEGMENT RESULTS
(Unaudited)
Global Funds Transfer
(Amounts in millions, except percentages)Three Months Ended September 30,
2020 vs
Nine Months Ended September 30,
2020 vs
202020192019202020192019
Money transfer revenue$297.6 $282.5 $15.1 $806.6 $838.0 $(31.4)
Bill payment revenue11.0 14.7 (3.7)35.2 45.6 (10.4)
Total revenue$308.6 $297.2 $11.4 $841.8 $883.6 $(41.8)
Commissions and direct transaction
expenses
$174.4 $159.3 $15.1 $478.4 $475.0 $3.4 
Operating income$33.6 $9.8 $23.8 $56.8 $16.5 $40.3 
Operating margin10.9 %3.3 %6.7 %1.9 %
Money transfer revenue change, as reported%(6)%(4)%(13)%
Money transfer revenue change, constant currency%(5)%(4)%(11)%
Financial Paper Products
(Amounts in millions, except percentages)Three Months Ended September 30,
2020 vs
Nine Months Ended September 30,
2020 vs
202020192019202020192019
Money order revenue$10.4 $13.1 $(2.7)$33.3 $40.6 $(7.3)
Official check revenue4.2 11.9 (7.7)18.8 37.2 (18.4)
Total revenue$14.6 $25.0 $(10.4)$52.1 $77.8 $(25.7)
Total commissions expense$0.1 $6.5 $(6.4)$3.4 $19.5 $(16.1)
Operating income$3.6 $7.6 $(4.0)$16.8 $25.8 $(9.0)
Operating margin24.7 %30.4 %32.2 %33.2 %

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TABLE THREE
MONEYGRAM INTERNATIONAL, INC.
SEGMENT RECONCILIATIONS
(Unaudited)
Global Funds Transfer
(Amounts in millions, except percentages)Three Months Ended September 30,
2020 vs
Nine Months Ended September 30,
2020 vs
202020192019202020192019
Revenue (as reported)$308.6 $297.2 $11.4 $841.8 $883.6 $(41.8)
Adjusted operating income$35.8 $15.8 $20.0 $74.1 $44.0 $30.1 
Legal and contingent matters0.4 — 0.4 0.1 — 0.1 
Restructuring and reorganization costs0.2 (0.1)0.3 (1.0)(4.2)3.2 
Compliance enhancement program(0.4)(2.4)2.0 (2.9)(5.4)2.5 
Direct monitor costs(1.0)(2.1)1.1 (8.9)(12.4)3.5 
Stock-based compensation expense(1.4)(1.4)— (4.6)(5.5)0.9 
Total adjustments(2.2)(6.0)3.8 (17.3)(27.5)10.2 
Operating income (as reported)$33.6 $9.8 $23.8 $56.8 $16.5 $40.3 
Adjusted operating margin11.6 %5.3 %8.8 %5.0 %
Total adjustments(0.7)%(2.0)%(2.1)%(3.1)%
Operating margin (as reported)10.9 %3.3 %6.7 %1.9 %
Financial Paper Products
(Amounts in millions, except percentages)Three Months Ended September 30,
2020 vs
Nine Months Ended September 30,
2020 vs
202020192019202020192019
Revenue (as reported)$14.6 $25.0 $(10.4)$52.1 $77.8 $(25.7)
Adjusted operating income$3.8 $8.0 $(4.2)$18.1 $27.4 $(9.3)
Compliance enhancement program(0.1)(0.2)0.1 (0.8)(1.0)0.2 
Stock-based compensation expense(0.1)(0.2)0.1 (0.5)(0.6)0.1 
Total adjustments(0.2)(0.4)0.2 (1.3)(1.6)0.3 
Operating income (as reported)$3.6 $7.6 $(4.0)$16.8 $25.8 $(9.0)
Adjusted operating margin26.0 %32.0 %34.7 %35.2 %
Total adjustments(1.4)%(1.6)%(2.5)%(2.1)%
Operating margin (as reported)24.7 %30.4 %32.2 %33.2 %


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TABLE FOUR
MONEYGRAM INTERNATIONAL, INC.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH FLOW
(Unaudited)
(Amounts in millions, except percentages)Three Months Ended September 30,
2020 vs
Nine Months Ended September 30,
2020 vs
202020192019202020192019
Income (loss) before income taxes$12.5 $(9.6)$22.1 $(1.2)$(51.5)$50.3 
Interest expense23.0 24.8 (1.8)69.5 52.7 16.8 
Depreciation and amortization15.9 18.2 (2.3)49.2 55.4 (6.2)
Signing bonus amortization14.6 11.2 3.4 39.7 34.6 5.1 
EBITDA66.0 44.6 21.4 157.2 91.2 66.0 
Significant items impacting EBITDA:
Stock-based, contingent and incentive
compensation
1.5 1.6 (0.1)5.1 6.1 (1.0)
Direct monitor costs1.0 2.1 (1.1)8.9 12.4 (3.5)
Compliance enhancement program0.5 2.6 (2.1)3.7 6.4 (2.7)
Restructuring and reorganization costs(0.2)0.1 (0.3)1.0 4.1 (3.1)
Non-cash pension settlement charge (1)
— — — — 31.3 (31.3)
Legal and contingent matters— 0.6 (0.6)0.6 1.9 (1.3)
Severance and related costs— 0.1 (0.1)0.2 0.3 (0.1)
Debt extinguishment costs (2)
— — — — 2.4 (2.4)
Adjusted EBITDA$68.8 $51.7 $17.1 $176.7 $156.1 $20.6 
Adjusted EBITDA margin (3)
21.3 %16.0 %5.3 %19.8 %16.2 %3.6 %
Adjusted EBITDA change, as reported33 %13 %
Adjusted EBITDA change, constant
currency adjusted
29 %13 %
Adjusted EBITDA$68.8 $51.7 $17.1 $176.7 $156.1 $20.6 
Cash payments for interest(23.2)(19.2)(4.0)(57.6)(45.2)(12.4)
Cash payments for taxes, net of refunds5.8 (1.1)6.9 3.3 (1.6)4.9 
Cash payments for capital expenditures(10.7)(13.3)2.6 (30.6)(42.5)11.9 
Cash payments for agent signing bonuses(15.3)(8.8)(6.5)(45.0)(24.2)(20.8)
Adjusted Free Cash Flow$25.4 $9.3 $16.1 $46.8 $42.6 $4.2 
(1) Nine months ended September 30, 2019 includes a non-cash charge of $31.3 million from the sale of pension liability.
(2) Nine months ended September 30, 2019 includes debt extinguishment costs related to the amended and new debt agreements.
(3) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.

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TABLE FIVE
MONEYGRAM INTERNATIONAL, INC.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES
ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in millions, except per share data)2020201920202019
Net income (loss) $10.9 $(7.7)$(15.2)$(48.4)
Total adjustments (1)
2.8 7.1 19.5 64.9 
Tax impacts of adjustments (2)
(0.9)(1.6)(4.5)(14.9)
Valuation allowance (3)
1.2 — 11.3 — 
Adjusted net income (loss)$14.0 $(2.2)$11.1 $1.6 
Diluted earnings (loss) per common share$0.12 $(0.10)$(0.20)$(0.70)
Diluted adjustments per common share 0.04 0.07 0.34 0.72 
Diluted adjusted earnings (loss) per common share$0.16 $(0.03)$0.14 $0.02 
Diluted weighted-average outstanding common shares
    and equivalents
88.7 76.4 77.7 69.2 
(1) See summary of adjustments in Table Four - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow.
(2) Tax rates used to calculate the tax expense impact are based on the nature and jurisdiction of each adjustment.
(3) The Company recorded a $13.0 million valuation allowance on its U.S. deferred tax assets for the nine months ended September 30, 2020. In the third quarter of 2020, a valuation allowance of $1.7 million was recorded on its U.S. deferred tax assets.

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TABLE SIX
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in millions, except share data)September 30, 2020December 31, 2019
ASSETS
Cash and cash equivalents$162.9 $146.8 
Settlement assets3,555.2 3,237.0 
Property and equipment, net150.5 176.1 
Goodwill442.2 442.2 
Other assets183.2 182.9 
Total assets$4,494.0 $4,185.0 
LIABILITIES
Payment service obligations$3,555.2 $3,237.0 
Debt, net856.7 850.3 
Pension and other postretirement benefits73.8 77.5 
Accounts payable and other liabilities257.4 260.6 
Total liabilities4,743.1 4,425.4 
STOCKHOLDERS’ DEFICIT
Participating convertible preferred stock - series D, $0.01 par value, 200,000 shares authorized, 14,480 and 71,282 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively37.4 183.9 
Common stock, $0.01 par value, 162,500,000 shares authorized, 70,664,378 and 65,061,090 shares issued, 70,664,378 and 62,731,184 shares outstanding at September 30, 2020 and December 31, 2019, respectively0.7 0.7 
Additional paid-in capital1,257.1 1,116.9 
Retained loss(1,483.1)(1,460.1)
Accumulated other comprehensive loss(61.2)(63.5)
Treasury stock: 0 and 2,329,906 shares at September 30, 2020 and December 31, 2019, respectively— (18.3)
Total stockholders’ deficit(249.1)(240.4)
Total liabilities and stockholders’ deficit$4,494.0 $4,185.0 

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TABLE SEVEN
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
(Amounts in millions)20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(15.2)$(48.4)
Adjustments to reconcile net loss to net cash provided by operating activities:67.4 87.4 
Net cash provided by operating activities52.2 39.0 
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for capital expenditures(30.6)(42.5)
Net cash used in investing activities(30.6)(42.5)
CASH FLOWS FROM FINANCING ACTIVITIES:
Transaction costs for issuance and amendment of debt— (21.7)
Principal payments on debt(4.8)(30.0)
Proceeds from revolving credit facility23.0 — 
Payments on revolving credit facility(23.0)— 
Net proceeds from issuing equity instruments— 29.5 
Payments to tax authorities for stock-based compensation(0.7)(0.7)
Net cash used in financing activities(5.5)(22.9)
NET CHANGE IN CASH AND CASH EQUIVALENTS16.1 (26.4)
CASH AND CASH EQUIVALENTS—Beginning of period146.8 145.5 
CASH AND CASH EQUIVALENTS—End of period$162.9 $119.1 

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