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Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended June 30, 2022.
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
https://cdn.kscope.io/a1256a7f322f10abe2e840b060402f57-mgi-20220630_g1.jpg
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)
___________________________________
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 MGIThe NASDAQ Stock Market LLC
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  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 3, 2022, 96,351,980 shares of common stock, $0.01 par value, were outstanding.



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GLOSSARY OF TERMS
This glossary highlights some of the terms used in the Quarterly Report on Form 10-Q and is not a complete list of all the defined terms used herein.
AbbreviationTerm
CIDCivil Investigative Demand
Consent Order
Stipulated Order for Compensatory Relief and Modified Order for Permanent Injunction
CorridorWith regard to a money transfer transaction, the originating "send" location and the designated "receive" location are referred to as a corridor
COVID-19Coronavirus disease
Digital ChannelTransactions in which either the send transaction, receive transaction or both occur through the Company's direct-to-consumer digital business, MoneyGram Online, through digital partnerships, or end in an account deposit, wallet or card solution such as the Visa Direct program
DPA
Deferred Prosecution Agreement
GFTGlobal Funds Transfer
FitchFitch Ratings, Inc.
FPPFinancial Paper Products
FTCFederal Trade Commission
IRSInternal Revenue Service
LIBORLondon Interbank Offered Rate
MDPMadison Dearborn Partners, LLC, a Delaware limited liability company
MergerMobius Merger Sub, Inc., a Delaware corporation shall merge with and into the Company, with the Company being the surviving company
Merger AgreementOn February 14, 2022, the Company, entered into an Agreement and Plan of Merger
MGO
MoneyGram Online (our direct-to-consumer business)
Moody'sMoody's Investor Service
Non-U.S. dollarThe impact of non-U.S. dollar exchange rate fluctuations on the Company's financial results is typically calculated as the difference between current period activity translated using the current period's exchange rates and the comparable prior-year period's exchange rates; this method is used to calculate the impact of changes in non-U.S. dollar exchange rates on revenues, commissions and other operating expenses for all countries where the functional currency is not the U.S. dollar.
NYDFSNew York Department of Financial Services
OFACU.S. Treasury Department's Office of Foreign Assets Control
PensionThe Company’s Pension Plan and SERPs
Pension PlanDefined benefit pension plan
Postretirement BenefitsDefined benefit postretirement plan
P2PPeer-to-peer
Retail ChannelTransactions in which both the send transaction and receive transaction occur at one of the Company's physical agent locations
ROEReport of Examination
SERPsSupplemental executive retirement plans
S&PStandard & Poor's
SECU.S. Securities and Exchange Commission
USDC
USD Coin
U.S. DOJU.S. Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section
U.S. GAAPAccounting principles generally accepted in the United States of America
U.S. Judge
United States Judge for the Middle District of Pennsylvania



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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q and certain documents incorporated by reference herein may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), including statements with respect to, among other things, the financial condition, results of operations, plans, objectives, future performance and business of MoneyGram and its subsidiaries. Statements preceded by, followed by or that include words such as “believes,” “estimates,” “expects,” “projects,” “plans,” “anticipates,” “intends,” “continues,” “will,” “should,” “could,” “may,” “might,” “would,” “goals,” “predicts,” “potential,” “target,” “forecast,” “outlook,” “currently,” and other similar expressions are intended to identify some of the forward-looking statements within the meaning of the Reform Act and are included, along with this statement, for purposes of complying with the safe harbor provisions of the Reform Act. These forward-looking statements are based on management’s current expectations, beliefs and assumptions as of the date of this report, are not historical facts or guarantees of future performance and are subject to certain risks, uncertainties and changes in circumstances that are difficult to predict and many of which are outside of our control due to a number of factors. These factors 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 and 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 with our largest agent, Walmart, through its introduction of additional competing white-label money transfer products or otherwise;
our ability to continue to grow our Digital Channel, including through our direct-to-consumer digital business, MoneyGram Online;
a security or privacy breach in systems, networks or databases on which we rely;
current and proposed regulations addressing consumer privacy and data use and security;
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 and regulatory proceedings involving us or our agents and other commercial relationships, which could result in material settlements, fines or penalties, revocation of required licenses or registrations, termination of contracts, other administrative actions or lawsuits and negative publicity;
disruptions to our computer systems and data centers and our ability to effectively operate and adapt our technology;
the ability of us and our agents to maintain adequate banking relationships;
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 high degree of leverage and substantial debt service obligations, significant debt covenant requirements and our ability to comply with such requirements;
our below investment-grade credit rating;
our ability to maintain sufficient capital;
weakness in economic conditions, including recession and inflation, in both the U.S. and global markets;
the financial health of certain European countries or the secession of a country from the European Union;
a significant change, material slow down or complete disruption of international migration patterns;
our ability to manage risks associated with our international sales and operations, including exchange rates among currencies;
our offering of money transfer services through agents in regions that are politically volatile or, in a limited number of cases, that may be subject to certain OFAC restrictions;
major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions;
changes in tax laws or unfavorable outcomes of tax positions we take, or a failure by us to establish adequate reserves for tax events;


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our ability to manage credit risks from our agents and official check financial institution customers;
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;
unpredictability and severity of catastrophic events, including acts of terrorism, outbreak of war or hostilities, civil unrest, adverse climate or weather events and pandemics or other public health emergencies, as well as our response to any of the aforementioned factors;
risks relating to the proposed Merger (as defined herein), including the possibility that the consummation of the Merger could be delayed or not completed and the effect of announcement or pendency of the Merger on our business; and
the risks and uncertainties described in the Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our 2021 Form 10-K, as well as any additional risk factors that may be described in our other filings with the SEC from time to time.
These forward-looking statements speak only as of the date they are made, and MoneyGram undertakes no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or otherwise, except as required by federal securities law.


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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
 
(Amounts in millions, except share data)June 30, 2022December 31, 2021
ASSETS
Cash and cash equivalents$117.4 $155.2 
Settlement assets3,654.1 3,591.4 
Property and equipment, net131.0 133.9 
Goodwill442.2 442.2 
Right-of-use assets47.1 52.6 
Other assets112.9 101.2 
Total assets$4,504.7 $4,476.5 
LIABILITIES
Payment service obligations$3,654.1 $3,591.4 
Debt, net786.0 786.7 
Pension and other postretirement benefits65.3 67.1 
Lease liabilities50.2 56.3 
Accounts payable and other liabilities134.0 160.0 
Total liabilities4,689.6 4,661.5 
COMMITMENTS AND CONTINGENCIES (NOTE 11)
STOCKHOLDERS' DEFICIT
Common stock, $0.01 par value, 162,500,000 shares authorized, 98,568,391 and 92,305,011 shares issued, 96,368,394 and 90,725,982 shares outstanding at June 30, 2022 and December 31, 2021, respectively
1.0 0.9 
Additional paid-in capital1,408.3 1,400.3 
Retained loss(1,505.3)(1,513.4)
Accumulated other comprehensive loss(72.3)(62.8)
Treasury stock: 2,199,997 and 1,579,029 shares at June 30, 2022 and December 31, 2021, respectively
(16.6)(10.0)
Total stockholders' deficit(184.9)(185.0)
Total liabilities and stockholders' deficit$4,504.7 $4,476.5 
See Notes to the Unaudited Condensed Consolidated Financial Statements
















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MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
 
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in millions, except per share data)2022202120222021
REVENUE
Fee and other revenue$324.5 $327.3 $630.0 $635.4 
Investment revenue5.1 2.0 7.2 4.0 
Total revenue329.6 329.3 637.2 639.4 
COST OF REVENUE
Commissions and other fee expense156.5 161.3 305.2 311.2 
Investment commissions expense2.4 0.2 2.8 0.4 
Direct transaction expense13.8 16.2 26.1 31.4 
Total cost of revenue172.7 177.7 334.1 343.0 
GROSS PROFIT156.9 151.6 303.1 296.4 
OPERATING EXPENSES
Compensation and benefits59.3 59.0 115.8 121.2 
Transaction and operations support53.3 40.3 98.4 83.7 
Occupancy, equipment and supplies15.1 16.3 29.6 31.8 
Depreciation and amortization12.1 14.1 24.3 29.4 
Total operating expenses139.8 129.7 268.1 266.1 
OPERATING INCOME17.1 21.9 35.0 30.3 
Other expenses
Interest expense12.1 22.5 23.0 44.8 
Loss on early extinguishment of debt 10.3  10.3 
Other non-operating expense1.1 0.8 2.0 1.8 
Total other expenses13.2 33.6 25.0 56.9 
Income (loss) before income taxes3.9 (11.7)10.0 (26.6)
Income tax expense (benefit)0.8 (0.6)1.8 (0.1)
NET INCOME (LOSS)$3.1 $(11.1)$8.2 $(26.5)
EARNINGS (LOSS) PER COMMON SHARE
Basic$0.03 $(0.13)$0.09 $(0.32)
Diluted$0.03 $(0.13)$0.08 $(0.32)
Weighted-average outstanding common shares and equivalents used in computing earnings (loss) per common share
Basic96.6 87.2 96.2 83.4 
Diluted100.2 87.2 100.0 83.4 
See Notes to the Unaudited Condensed Consolidated Financial Statements
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MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
UNAUDITED
 
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in millions)2022202120222021
NET INCOME (LOSS)$3.1 $(11.1)$8.2 $(26.5)
OTHER COMPREHENSIVE (LOSS) INCOME
Net change in unrealized holding gain on available-for-sale securities arising during the period, net of tax expense of $0.0 and $0.0 for the three months ended June 30, 2022 and 2021, respectively, and $0.0 and $0.1 for the six months ended June 30, 2022 and 2021, respectively
 0.1 0.1 0.4 
Net change in pension liability due to amortization of prior service credit and net actuarial loss, net of tax benefit of $0.2 and $0.2 for the three months ended June 30, 2022 and 2021, respectively, and $0.3 and $0.3 for six months ended June 30, 2022 and 2021, respectively
0.5 0.5 0.9 1.0 
Unrealized non-U.S. dollar translation adjustments, net of tax expense of $0.0 and $0.0 for the three months ended June 30, 2022 and 2021, respectively, and $0.0 and $0.0 for the six months ended June 30, 2022 and 2021, respectively
(8.7)2.6 (10.5)(3.2)
Other comprehensive (loss) income(8.2)3.2 (9.5)(1.8)
COMPREHENSIVE LOSS$(5.1)$(7.9)$(1.3)$(28.3)
See Notes to the Unaudited Condensed Consolidated Financial Statements
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MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED 
Six Months Ended June 30,
(Amounts in millions)20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$8.2 $(26.5)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization24.3 29.4 
Signing bonus amortization27.4 29.0 
Change in right-of-use assets5.6 2.7 
Amortization of debt discount and debt issuance costs1.3 5.8 
Loss on early extinguishment of debt 10.3 
Non-cash compensation and pension expense9.7 5.3 
Signing bonus payments(21.6)(22.7)
Change in other assets(26.6)5.2 
Change in lease liabilities(5.7)(3.7)
Change in accounts payable and other liabilities(25.4)(79.7)
Other non-cash items, net(0.3) 
Net cash used in operating activities(3.1)(44.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for capital expenditures(22.4)(21.2)
Proceeds from available-for-sale investments0.3 0.5 
Purchases of interest-bearing investments(369.1)(210.8)
Proceeds from interest-bearing investments368.0 209.4 
Purchase of equity investments(4.0) 
Net cash used in investing activities(27.2)(22.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt(2.0)(103.2)
Prepayment call premium (4.0)
Change in receivables, net(350.4)(31.8)
Change in payment service obligations62.7 (95.7)
Net proceeds from stock issuance 97.6 
Payments to tax authorities for stock-based compensation(6.6)(3.6)
Net cash used in financing activities(296.3)(140.7)
NET CHANGE IN CASH AND CASH EQUIVALENTS AND SETTLEMENT CASH AND CASH EQUIVALENTS(326.6)(207.7)
CASH AND CASH EQUIVALENTS AND SETTLEMENT CASH AND CASH EQUIVALENTS—Beginning of year2,050.9 2,079.3 
CASH AND CASH EQUIVALENTS AND SETTLEMENT CASH AND CASH EQUIVALENTS—End of period$1,724.3 $1,871.6 
See Notes to the Unaudited Condensed Consolidated Financial Statements
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Supplemental disclosures to the Condensed Consolidated Statements of Cash Flows are presented below:
Six Months Ended June 30,
(Amounts in millions)20222021
Cash payments for interest$22.5 $39.0 
Cash payments (refunds) for taxes, net$6.3 $(1.2)
The following table provides a reconciliation of Cash and Cash Equivalents as reported in the Condensed Consolidated Statements of Cash Flows to the line items within the Consolidated Balance Sheets as of:
(Amounts in millions)
June 30, 2022
June 30, 2021
Cash and cash equivalents$117.4 $117.0 
Settlement cash and cash equivalents1,606.9 1,754.6 
Cash and cash equivalents and settlement cash and cash equivalents$1,724.3 $1,871.6 
See Notes to the Unaudited Condensed Consolidated Financial Statements
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MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
UNAUDITED
(Amounts in millions)Common
Stock
Additional
Paid-In
Capital
Retained LossAccumulated Other Comprehensive LossTreasury
Stock
Total
January 1, 2022$0.9 $1,400.3 $(1,513.4)$(62.8)$(10.0)$(185.0)
Net income— — 5.1 — — 5.1 
Stock-based compensation activity— 2.8  — (6.1)(3.3)
Exercise of lender warrants0.1  — — 0.1 0.2 
Other comprehensive loss— — — (1.3)— (1.3)
March 31, 20221.0 1,403.1 (1,508.3)(64.1)(16.0)(184.3)
Net income— — 3.1 — — 3.1 
Stock-based compensation activity— 5.2 (0.1)— (0.6)4.5 
Other comprehensive loss— — — (8.2)— (8.2)
June 30, 2022$1.0 $1,408.3 $(1,505.3)$(72.3)$(16.6)$(184.9)
(Amounts in millions)Common
Stock
Additional
Paid-In
Capital
Retained
Loss
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Total
January 1, 2021$0.7 $1,296.0 $(1,475.3)$(58.4)$ $(237.0)
Net loss— — (15.4)— — (15.4)
Stock-based compensation activity— 1.9 (0.1)— (3.6)(1.8)
Exercise of Ripple Warrants0.1 (0.1)— —   
Other comprehensive loss— — — (5.0)— (5.0)
March 31, 20210.8 1,297.8 (1,490.8)(63.4)(3.6)(259.2)
Net loss— — (11.1)— — (11.1)
Stock-based compensation activity— 1.4  — (0.1)1.3 
ATM equity offering0.1 97.5 — — — 97.6 
Other comprehensive income— — — 3.2 — 3.2 
June 30, 2021$0.9 $1,396.7 $(1,501.9)$(60.2)$(3.7)$(168.2)
See Notes to the Unaudited Condensed Consolidated Financial Statements
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MONEYGRAM INTERNATIONAL, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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: GFT and FPP. The GFT segment provides global money transfer services and bill payment services to consumers through two primary distribution channels: retail and digital. Through our Retail 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 services through MGO, digital partnerships, direct transfers to bank accounts, mobile wallets and card solutions, such as Visa Direct, as part of our Digital Channel. The FPP 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 U.S. 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 U.S. GAAP for complete financial statements. The Condensed Consolidated Balance Sheets are unclassified due to the timing uncertainty surrounding the payment of settlement obligations. The Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature that, in the opinion of management, are necessary in order to make the financial statements not misleading.
Impact of COVID-19 Pandemic On Our Financial Statements — The global spread of COVID-19 and the unprecedented impact of the COVID-19 pandemic is complex and ever-evolving. In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak reached all regions in which we do business, and governmental authorities around the world 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 its subsequent variants, in combination with the government actions taken in response to the virus have caused and may continue to cause, significant economic and business disruption, volatility, financial uncertainty and a continued significant global economic downturn. This has had and may continue to have, a negative impact on the mobility of the global workforce, our agents, customers, consumer spending and global financial markets. Even after the initial impact of the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of inflation, economic weakness and lower disposable income. Therefore, the Company cannot reasonably estimate the future impact at this time.
There were no other material impacts to our unaudited Condensed Consolidated Financial Statements as of and for the periods ended June 30, 2022, 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 the future.
Use of Estimates — The preparation of these financial statements in conformity with U.S. 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, impact of the COVID-19 pandemic 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 Condensed Consolidated Financial Statements include the accounts of MoneyGram International, Inc. and its subsidiaries. Intercompany profits, transactions and account balances have been eliminated in consolidation.
Recently Adopted Accounting Standards — In May 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force). The ASU clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options, warrants for instance, that remain equity classified after modification or exchange. The ASU provides guidance that will clarify whether an issuer should account for a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as (1) an adjustment to equity and, if so, the related earnings per share effects, if any,
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or (2) an expense and, if so, the manner and pattern of recognition. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted, including adoption in an interim period. The adoption of ASU 2021-04 does not have a material impact on our Condensed Consolidated Financial Statements.
Recently Issued Accounting Standards and Related Developments Not Yet Adopted — In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU changes how entities account for convertible instruments and contracts in an entity's own equity and simplifies the accounting for convertible instruments by removing certain separation models for convertible instruments. This ASU also modifies the guidance on diluted earnings per share calculations. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2020-06 is not expected to have a material impact on our Condensed 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 U.S. GAAP requirements for contract modifications, hedging relationships and sales or transfers of debt securities that reference the London Interbank Offered Rate ("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.
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 2016-13, the FASB issued the following ASUs:
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 2022-02 (Issued March 2022) Financial Instruments - Credit Losses (Topic 326): Trouble Debt Restructurings and Vintage Disclosures
ASU 2019-10 changed the effective date of ASU 2016-13 for public business entities that meet the definition of a U.S. Securities and Exchange Commission ("SEC") filer but that are eligible to be a smaller reporting company to fiscal years beginning after December 15, 2022. As of November 15, 2019, which is the determination date for ASU 2016-13, MoneyGram was a smaller reporting company and, as such, has elected to 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 Condensed Consolidated Financial Statements.
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.
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On February 14, 2022, we entered into a Merger Agreement by and among the Company, Parent and an affiliate of Madison Dearborn, and Merger Sub. The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company. Following the Merger the Company will become a subsidiary of Parent. At the effective time of the Merger, each outstanding share of common stock will be automatically canceled and converted into the right to receive $11.00 in cash. Consummation of the Merger is subject to the satisfaction or, if permitted by law, waiver by Parent, the Company or both of a number of conditions, including, among other things, (a) approval of the Merger Agreement by the affirmative vote of the holders of a majority of the Company's outstanding shares of common stock, (b) expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (c) the receipt of required approvals with respect to money transmitter licenses and applicable foreign investment and competition laws, (d) the absence of any material adverse effect on the Company's business and (e) other customary closing conditions. The Merger Agreement contains certain termination rights for the parties, including the right of the parties, subject to specified limitations, to terminate the Merger Agreement if the Merger is not consummated by February 13, 2023, although the End Date may be extended to May 14, 2023 in certain circumstances to obtain required money transfer approvals.
On May 23, 2022, the Company held a virtual-only special meeting of stockholders related to the Merger Agreement and stockholders approved the transaction with affiliates of funds managed by MDP. The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including receipt of certain regulatory approvals. To date, money transmitter regulators in 32 U.S. states and territories have provided their approval or non-objection of the transaction. All supplemental U.S. state filings have been submitted. All required pre-transaction notifications and applications to international money transmitter regulators have been made or are on track to be filed shortly, and the parties continue to engage with the regulators. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired in connection with the previously filed premerger notification form submitted by MoneyGram and MDP and the parties have submitted all applicable foreign antitrust and Foreign Direct Investment filings.
Note 2 — 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)June 30, 2022December 31, 2021
Settlement assets:
Settlement cash$1,606.9 $1,895.7 
Receivables, net 1,050.8 700.4 
Interest-bearing investments 993.6 992.3 
Available-for-sale investments2.8 3.0 
Total settlement assets$3,654.1 $3,591.4 
Payment service obligations$(3,654.1)$(3,591.4)
Note 3 — 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.
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
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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 non-U.S. dollar exchange risk arising from the Company's assets and liabilities denominated in non-U.S. dollar 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 5 — 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 2Level 3Total
June 30, 2022
Financial assets:
Available-for-sale investments:
Residential mortgage-backed securities$1.9 $ $1.9 
Asset-backed and other securities 0.9 0.9 
Forward contracts (1)
5.9  5.9 
Total financial assets$7.8 $0.9 $8.7 
Financial liabilities:
Forward contracts$0.3 $ $0.3 
December 31, 2021
Financial assets:
Available-for-sale investments:
Residential mortgage-backed securities$2.3 $ $2.3 
Asset-backed and other securities 0.7 0.7 
Forward contracts0.1  0.1 
Total financial assets$2.4 $0.7 $3.1 
Financial liabilities:
Forward contracts$0.2 $ $0.2 
(1) Includes associated cash posted as collateral
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 values of the Term Loan and Senior Secured Notes are estimated using an observable market quotation (Level 2).
The following table provides the carrying value and fair value for the Term Loan and the Senior Secured Notes:
(Amounts in millions)June 30, 2022December 31, 2021
Carrying value
 Fair value
Carrying value
 Fair value
Term Loan$382.0 $368.6 $384.0 $383.5 
Senior Secured Notes$415.0 $394.3 $415.0 $421.2 
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 June 30, 2022 and December 31, 2021.
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Note 4 — Investment Portfolio
The following table shows the components of the investment portfolio:
(Amounts in millions)June 30, 2022December 31, 2021
Cash$1,724.3 $2,050.9 
Interest-bearing investments993.6 992.3 
Available-for-sale investments 2.8 3.0 
Total investment portfolio$2,720.7 $3,046.2 
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
June 30, 2022
Residential mortgage-backed securities$1.8 $0.1 $1.9 
Asset-backed and other securities 0.9 0.9 
Total$1.8 $1.0 $2.8 
December 31, 2021
Residential mortgage-backed securities$2.1 $0.2 $2.3 
Asset-backed and other securities 0.7 0.7 
Total$2.1 $0.9 $3.0 
As of June 30, 2022 and December 31, 2021, 68% and 77%, respectively, of the fair value of the available-for-sale portfolio were invested in residential mortgage-backed securities issued by U.S. government agencies. These securities have the implicit backing of the U.S. government, and the Company expects to receive full par value upon maturity or pay-down, as well as all interest payments.
Gains and Losses For the three and six months ended June 30, 2022 and 2021, the Company had no realized gains or losses.
Contractual Maturities — Actual maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations, sometimes without call or prepayment penalties. Maturities of residential mortgage-backed and asset-backed and other securities depend on the repayment characteristics and experience of the underlying obligations. 
Note 5 — Derivative Financial Instruments
The Company uses forward contracts to manage its non-U.S. dollar needs and non-U.S. dollar exchange risk arising from its assets and liabilities denominated in non-U.S. dollars. While these contracts may mitigate certain non-U.S. dollar risk, they are not designated as hedges for accounting purposes and will result in gains and losses in the Condensed Consolidated Statements of Operations. The Company also reports gains and losses from the spread differential between the rate set for its transactions and the actual cost of currency at the time the Company buys or sells in the open market.
The following net gains (losses) related to assets and liabilities denominated in non-U.S. dollar are included in "Transaction and operations support" in the Condensed Consolidated Statements of Operations and in the "Net cash used in operating activities" line in the Condensed Consolidated Statements of Cash Flows:
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in millions)2022202120222021
Net realized non-U.S. dollar (loss) gain$(23.2)$1.9 $(26.4)$(6.3)
Net gain (loss) from the related forward contracts20.8 (1.2)25.8 5.4 
Net (loss) gain from non-U.S. dollar transactions and related forward contracts$(2.4)$0.7 $(0.6)$(0.9)
As of June 30, 2022 and December 31, 2021, the Company had $729.1 million and $698.7 million, respectively, of outstanding notional amounts relating to its non-U.S. dollar forward contracts.
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As of June 30, 2022 and December 31, 2021, the Company reflects the following fair values of derivative forward contract instruments in its Condensed Consolidated Balance Sheets on a net basis, allowing for the right of offset by counterparty and cash collateral: 
(Amounts in millions)Gross Amount of Recognized AssetsGross Amount of Offset Cash Collateral PostedNet Amount of Assets Presented in the Condensed Consolidated Balance Sheets
Balance Sheet LocationJune 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021
"Other assets"$2.0 $0.4 $(1.1)$(0.3)$5.0 $ $5.9 $0.1 
(Amounts in millions)Gross Amount of Recognized LiabilitiesGross Amount of OffsetCash Collateral ReceivedNet Amount of Liabilities Presented in the Condensed Consolidated Balance Sheets
Balance Sheet LocationJune 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021
"Accounts payable and other liabilities"$1.4 $0.6 $(1.1)$(0.4)$ $ $0.3 $0.2 
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. In addition, the Company nets derivative liabilities against any receivables for cash collateral placed with the same counterparties.
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, however, it is required of the Company in some contracts. 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 6 — Debt
The following is a summary of the Company's outstanding debt:
(Amounts in millions, except percentages)June 30, 2022December 31, 2021
Term Loan due 2026
$382.0 $384.0 
5.375% Senior Secured Notes due 2026
415.0 415.0 
Total debt at face value797.0 799.0 
Unamortized debt issuance costs and debt discounts(11.0)(12.3)
Total debt, net$786.0 $786.7 
Indenture and New Credit Agreement — On July 21, 2021, the Company entered into a new credit agreement (the “New Credit Agreement”) with the lenders from time to time party thereto and Bank of America, N.A., as administrative agent and completed its previously announced private offering of $415.0 million aggregate principal amount of 5.375% senior secured notes due 2026 (the “Senior Secured Notes” or "Notes" and such offering, the "Notes Offering") and related guarantees. The New Credit Agreement provides for (i) a senior secured five-year term loan in an aggregate principal amount of $400.0 million (the “Term Loan”) and (ii) a senior secured four-year revolving credit facility that may be used for revolving credit loans, swingline loans and letters of credit (the "Revolving Credit Facility" and together with the Term Loan the "New Credit Facilities") up to an aggregate principal amount of $40.0 million. The interest rate spread applicable to loans under the Term Loan is 3.50% per annum for base rate loans and 4.50% for LIBOR rate loans. For purposes of the Term Loan, the LIBOR rate is subject to a 0.50% per annum floor and for purposes of the Revolving Credit Facility the LIBOR rate is subject to a 0.0% floor. As of June 30, 2022 and December 31, 2021, LIBOR rate was 1.50% and 0.50%, and interest rate was 6.00% and 5.00%, respectively, for the Term Loan. As of June 30, 2022, the Company had no borrowings and no outstanding letters of credit under its Revolving Credit Facility. The New Credit Facilities were 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 New Credit Agreement requires the Company and its consolidated subsidiaries to maintain a minimum interest coverage ratio of 2.150:1.000 and to not exceed a total net leverage ratio of 4.750:1.000. The asset coverage covenant contained in the New Credit Agreement requires the aggregate amount of the Company's cash and cash
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equivalents and other settlement assets to exceed its aggregate payment service obligations. As of June 30, 2022, the Company was in compliance with its financial covenants: our interest coverage ratio was 4.848 to 1.000, our total net leverage ratio was 3.225 to 1.000 and our assets in excess of payment service obligations used for the asset coverage calculation were $117.4 million. We continuously monitor our compliance with our debt covenants.
Note 7 — 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 June 30,Six Months Ended June 30,
(Amounts in millions)2022202120222021
Interest cost$0.6 $0.5 $1.2 $1.0 
Expected return on plan assets(0.3)(0.2)(0.6)(0.4)
Amortization of net actuarial loss0.6 0.7 1.1 1.3 
Net periodic benefit expense$0.9 $1.0 $1.7 $1.9 
Net periodic benefit expense for the Pension and Postretirement Benefits is recorded in "Other non-operating expense" in the Condensed Consolidated Statements of Operations. Settlement charge, amortization of net actuarial loss and prior service cost were reclassified out of the components of "Accumulated other comprehensive loss".
Note 8 — Stockholders' Deficit
Common Stock — No dividends were paid during the three and six months ended June 30, 2022 or 2021.
The following table is a summary of changes in the number of shares of the Company’s authorized, issued and outstanding stock as of June 30, 2022:
 Common StockTreasury
Stock
AuthorizedIssuedOutstanding
December 31, 2021162,500,000 92,305,011 90,725,982 1,579,029 
Exercise of lender warrants— 4,458,314 4,454,159 4,155 
Release for restricted stock units— 1,805,066 1,188,253 616,813 
June 30, 2022162,500,000 98,568,391 96,368,394 2,199,997 
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 TaxCumulative non-U.S. dollar Translation Adjustments, Net of TaxPension and Postretirement Benefits Adjustment, Net of TaxTotal
January 1, 2022$1.5 $(28.9)$(35.4)$(62.8)
Other comprehensive loss before reclassification0.1 (1.8) (1.7)
Amounts reclassified from accumulated other comprehensive loss  0.4 0.4 
Net current period other comprehensive loss0.1 (1.8)0.4 (1.3)
March 31, 20221.6 (30.7)(35.0)(64.1)
Other comprehensive loss before reclassification (8.7) (8.7)
Amounts reclassified from accumulated other comprehensive loss  0.5 0.5 
Net current period other comprehensive loss