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.~~2021.
☐			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)

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
Preferred Stock Purchase Rights	N/A	The 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~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting company,”" and ~~“emerging~~"emerging growth ~~company”~~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 o~~April 29, 2020, 63,438,859~~f May 5, 2021, 79,674,091 shares of ~~common~~common stock, $0.01 par value, were outstanding.

Table of Contents

TABLE OF CONTENTS


	PART I. FINANCIAL INFORMATION
		Page
Item 1. Financial Statements ~~- unaudited~~(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 Unaudited Condensed Consolidated Financial Statements ~~- unaudited~~			6
Note 1 — Description of the Business and Basis of Presentation			6
Note 2 — Reorganization Costs			78
Note 3 — Settlement Assets and Payment Service Obligations			89
Note 4 — Fair Value Measurement			89
Note 5 — Investment Portfolio			911
Note 6 — Derivative Financial Instruments			1012
Note 7 — Debt			1113
Note 8 — Pension and Other Benefits			1214
Note 9 — Stockholders' Deficit			1214
Note 10 — Stock-Based Compensation			1315
Note 11 — Income Taxes			1416
Note 12 — Commitments and Contingencies			1516
Note 13 — ~~Earnings~~ L oss per Common Share			1720
Note 14 — Segment Information			1820
Note 15 — Revenue Recognition			1921
Note 16 — Related Parties		22
Note 17 — Subsequent Events		1922
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2023
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3334
Item 4. Controls and Procedures			3334

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			3435
Item 1A. Risk Factors			3435
Item 6. Exhibits			3536

Signatures			3637

Table of Contents

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.


Abbreviation						Term
Amended DPA						Amendment to and Extension of Deferred Prosecution Agreement
API						Application Programming Interface

CID						Civil Investigative Demand
Consent Order						Stipulated Order for Compensatory Relief and Modified Order for Permanent Injunction
Corridor						With regard to a money transfer transaction, the originating "send" location and the designated "receive" location are referred to as a corridor

COVID-19						Coronavirus disease
Digital Channel						Transactions in which either the send transaction, receive transaction or both occur through one of the Company's digital properties such as moneygram.com, the native mobile application or virtual agents or end in an account deposit, wallet or card such as the Visa Direct program
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act
DPA						Deferred Prosecution Agreement

FCPA						Foreign Corrupt Practices Act
Fitch						Fitch Ratings, Inc.
FTC						Federal Trade Commission
IRS						Internal Revenue Service
LIBOR						London Interbank Offered Rate
MDPA						U.S. Attorney's Office for the Middle District of Pennsylvania

Moody's						Moody's Investor Service

Non-U.S. dollar						The 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.
NYDFS						New York Department of Financial Services
ODL						On Demand Liquidity
OFAC						U.S. Treasury Department's Office of Foreign Assets Control
Pension						The Company’s Pension Plan and SERPs
Pension Plan						Defined benefit pension plan
Postretirement Benefits						Defined benefit postretirement plan
P2P						Peer-to-peer
Receiver						Person receiving a money transfer transaction
ROE						Report of Examination
ROU						Right-of-use
SERPs						Supplemental executive retirement plans
S&P						Standard & Poor's
SEC						U.S. Securities and Exchange Commission
SPA						Securities Purchase Agreement
U.S. DOJ						U.S. Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section
U.S. GAAP						Accounting principles generally accepted in the United States of America
Retail Channel						Transactions in which both the send transaction and receive transaction occur at one of the Company's physical agent locations

Table of Contents

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;

•our ability to extend or refinance the First and Second Lien Credit Facilities, and refinance such facilities, or comply with the terms thereof;

•the ability of us and our agents to comply with U.S. and international law 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, 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;

Table of Contents

•changes in tax laws or unfavorable outcomes of tax positions we take, or a failure by us to establish adequate reserves for tax events;

•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; 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 2020 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.

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)	(Amounts in millions, except share data)	March 31, 2020		December 31, 2019		(Amounts in millions, except share data)	March 31, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	131.0	$	146.8	Cash and cash equivalents	$	152.8	$	196.1
Settlement assets	Settlement assets	2,944.5		3,237.0		Settlement assets	3,667.0		3,702.9
Property and equipment, net	Property and equipment, net	169.6		176.1		Property and equipment, net	142.7		148.1
Goodwill	Goodwill	442.2		442.2		Goodwill	442.2		442.2
Right-of-use assets						Right-of-use assets	54.5		55.1
Other assets	Other assets	208.4		182.9		Other assets	128.4		129.7
Total assets	Total assets	$	3,895.7	$	4,185.0	Total assets	$	4,587.6	$	4,674.1
LIABILITIES	LIABILITIES					LIABILITIES
Payment service obligations	Payment service obligations	$	2,944.5	$	3,237.0	Payment service obligations	$	3,667.0	$	3,702.9
Debt, net	Debt, net	877.5		850.3		Debt, net	858.8		857.8
Pension and other postretirement benefits	Pension and other postretirement benefits	76.8		77.5		Pension and other postretirement benefits	75.0		74.5
Lease liabilities						Lease liabilities	58.0		59.1
Accounts payable and other liabilities	Accounts payable and other liabilities	264.6		260.6		Accounts payable and other liabilities	188.0		216.8
Total liabilities	Total liabilities	4,163.4		4,425.4		Total liabilities	4,846.8		4,911.1
COMMITMENTS AND CONTINGENCIES (NOTE 12)	COMMITMENTS AND CONTINGENCIES (NOTE 12)					COMMITMENTS AND CONTINGENCIES (NOTE 12)	0		0
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
STOCKHOLDERS' DEFICIT						STOCKHOLDERS' DEFICIT

Common stock, $0.01 par value, 162,500,000 shares authorized, 80,273,419 and 72,530,770 shares issued, 79,741,398 and 72,517,539 shares outstanding at March 31, 2021 and December 31, 2020, respectively						Common stock, $0.01 par value, 162,500,000 shares authorized, 80,273,419 and 72,530,770 shares issued, 79,741,398 and 72,517,539 shares outstanding at March 31, 2021 and December 31, 2020, respectively	0.8		0.7
Additional paid-in capital	Additional paid-in capital	1,118.8		1,116.9		Additional paid-in capital	1,297.8		1,296.0
Retained loss	Retained loss	(1,488.5)		(1,460.1)		Retained loss	(1,490.8)		(1,475.3)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(70.3)		(63.5)		Accumulated other comprehensive loss	(63.4)		(58.4)
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
Treasury stock: 532,021 and 13,231 shares at March 31, 2021 and December 31, 2020, respectively						Treasury stock: 532,021 and 13,231 shares at March 31, 2021 and December 31, 2020, respectively	(3.6)		0
Total stockholders' deficit						Total stockholders' deficit	(259.2)		(237.0)
Total liabilities and stockholders' deficit						Total liabilities and stockholders' deficit	$	4,587.6	$	4,674.1

See Notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions, except per share data)	(Amounts in millions, except per share data)	2020		2019		(Amounts in millions, except per share data)	2021		2020
REVENUE	REVENUE					REVENUE
Fee and other revenue	Fee and other revenue	$	280.8	$	301.0	Fee and other revenue	$	308.1	$	280.8
Investment revenue	Investment revenue	10.1		14.4		Investment revenue	2.0		10.1
Total revenue	Total revenue	290.9		315.4		Total revenue	310.1		290.9
EXPENSES
Fee and other commissions expense		143.2		149.6
COST OF REVENUE						COST OF REVENUE
Commissions and other fee expense						Commissions and other fee expense	149.9		143.2
Investment commissions expense	Investment commissions expense	3.0		6.3		Investment commissions expense	0.2		3.0
Direct transaction expense	Direct transaction expense	8.2		5.0		Direct transaction expense	15.2		8.2
Total commissions and direct transaction expenses		154.4		160.9
Total cost of revenue						Total cost of revenue	165.3		154.4
GROSS PROFIT						GROSS PROFIT	144.8		136.5
OPERATING EXPENSES						OPERATING EXPENSES
Compensation and benefits	Compensation and benefits	53.4		59.4		Compensation and benefits	62.2		53.4
Transaction and operations support	Transaction and operations support	38.0		52.1		Transaction and operations support	43.4		38.0
Occupancy, equipment and supplies	Occupancy, equipment and supplies	14.9		15.4		Occupancy, equipment and supplies	15.5		14.9
Depreciation and amortization	Depreciation and amortization	17.1		19.0		Depreciation and amortization	15.3		17.1
Total operating expenses	Total operating expenses	277.8		306.8		Total operating expenses	136.4		123.4
OPERATING INCOME	OPERATING INCOME	13.1		8.6		OPERATING INCOME	8.4		13.1
Other expenses	Other expenses					Other expenses
Interest expense	Interest expense	23.8		13.9		Interest expense	22.3		23.8
Other non-operating expense	Other non-operating expense	1.1		1.6		Other non-operating expense	1.0		1.1
Total other expenses	Total other expenses	24.9		15.5		Total other expenses	23.3		24.9
Loss before income taxes	Loss before income taxes	(11.8)		(6.9)		Loss before income taxes	(14.9)		(11.8)
Income tax expense	Income tax expense	9.7		6.6		Income tax expense	0.5		9.7
NET LOSS	NET LOSS	$	(21.5)	$	(13.5)	NET LOSS	$	(15.4)	$	(21.5)

Basic and diluted loss per common share	Basic and diluted loss per common share	$	(0.28)	$	(0.21)	Basic and diluted loss per common share	$	(0.19)	$	(0.28)

Basic and diluted weighted-average outstanding common shares and equivalents used in computing loss per share		77.4		64.8
Basic and diluted weighted-average outstanding common shares and equivalents used in computing loss per common share						Basic and diluted weighted-average outstanding common shares and equivalents used in computing loss per common share	79.6		77.4

See Notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
NET LOSS	NET LOSS	$	(21.5)	$	(13.5)	NET LOSS	$	(15.4)	$	(21.5)
OTHER COMPREHENSIVE LOSS	OTHER COMPREHENSIVE LOSS					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
Net change in unrealized holding loss on available-for-sale securities arising during the period, net of tax expense of $0.1 and $0.0 for the three months ended March 31, 2021 and 2020, respectively						Net change in unrealized holding loss on available-for-sale securities arising during the period, net of tax expense of $0.1 and $0.0 for the three months ended March 31, 2021 and 2020, respectively	0.3		0
Net change in pension liability due to amortization of prior service credit and net actuarial loss, net of tax benefit of $0.1 and $0.1 for the three months ended March 31, 2021 and 2020, respectively						Net change in pension liability due to amortization of prior service credit and net actuarial loss, net of tax benefit of $0.1 and $0.1 for the three months ended March 31, 2021 and 2020, respectively	0.5		0.4

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)
Unrealized non-U.S. dollar translation adjustments, net of tax expense of $0.0 and $0.0 for the three months ended March 31, 2021 and 2020, respectively						Unrealized non-U.S. dollar translation adjustments, net of tax expense of $0.0 and $0.0 for the three months ended March 31, 2021 and 2020, respectively	(5.8)		(7.2)
Other comprehensive loss	Other comprehensive loss	(6.8)		(2.1)		Other comprehensive loss	(5.0)		(6.8)
COMPREHENSIVE LOSS	COMPREHENSIVE LOSS	$	(28.3)	$	(15.6)	COMPREHENSIVE LOSS	$	(20.4)	$	(28.3)

See Notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED


		Three Months Ended March 31,							Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:					CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	Net loss	$	(21.5)	$	(13.5)	Net loss	$	(15.4)	$	(21.5)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:						Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	17.1		19.0		Depreciation and amortization	15.3		17.1
Signing bonus amortization	Signing bonus amortization	12.5		11.7		Signing bonus amortization	14.3		12.5
Change in right-of-use assets						Change in right-of-use assets	3.6		3.0
Amortization of debt discount and debt issuance costs	Amortization of debt discount and debt issuance costs	2.9		0.7		Amortization of debt discount and debt issuance costs	2.9		2.9

Non-cash compensation and pension expense	Non-cash compensation and pension expense	3.1		4.1		Non-cash compensation and pension expense	2.8		3.1
Signing bonus payments	Signing bonus payments	(25.0)		(10.1)		Signing bonus payments	(13.0)		(25.0)
Change in other assets	Change in other assets	(21.2)		(4.0)		Change in other assets	(12.9)		(24.2)
Change in lease liabilities						Change in lease liabilities	(3.9)		(4.4)
Change in accounts payable and other liabilities	Change in accounts payable and other liabilities	5.7		(12.0)		Change in accounts payable and other liabilities	(20.7)		10.1
Other non-cash items, net	Other non-cash items, net	—		4.4		Other non-cash items, net	0.1		0
Net cash (used in) provided by operating activities		(26.4)		0.3
Net cash used in operating activities						Net cash used in operating activities	(26.9)		(26.4)
CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:					CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(10.1)		(12.7)
Payments for capital expenditures						Payments for capital expenditures	(11.2)		(10.1)
Net cash used in investing activities	Net cash used in investing activities	(10.1)		(12.7)		Net cash used in investing activities	(11.2)		(10.1)
CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:					CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on debt	Principal payments on debt	(1.6)		(2.5)		Principal payments on debt	(1.6)		(1.6)
Proceeds from revolving credit facility	Proceeds from revolving credit facility	23.0		—		Proceeds from revolving credit facility	0		23.0

Payments to tax authorities for stock-based compensation	Payments to tax authorities for stock-based compensation	(0.7)		(0.7)		Payments to tax authorities for stock-based compensation	(3.6)		(0.7)

Net cash provided by (used in) financing activities		20.7		(3.2)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(5.2)		20.7
NET CHANGE IN CASH AND CASH EQUIVALENTS	NET CHANGE IN CASH AND CASH EQUIVALENTS	(15.8)		(15.6)		NET CHANGE IN CASH AND CASH EQUIVALENTS	(43.3)		(15.8)
CASH AND CASH EQUIVALENTS—Beginning of period		146.8		145.5
CASH AND CASH EQUIVALENTS—Beginning of year						CASH AND CASH EQUIVALENTS—Beginning of year	196.1		146.8
CASH AND CASH EQUIVALENTS—End of period	CASH AND CASH EQUIVALENTS—End of period	$	131.0	$	129.9	CASH AND CASH EQUIVALENTS—End of period	$	152.8	$	131.0
Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash payments for interest	Cash payments for interest	$	17.6	$	12.8	Cash payments for interest	$	11.9	$	17.6

See Notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

MONEYGRAM INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

UNAUDITED


(Amounts in millions)	(Amounts in millions)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Loss		Accumulated Other Comprehensive Loss		Treasury Stock		Total		(Amounts in millions)	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)
January 1, 2021																January 1, 2021	$	0.7	$	1,296.0	$	(1,475.3)	$	(58.4)	$	0	$	(237.0)
Net loss	Net loss	—		—		—		(21.5)		—		—		(21.5)		Net loss	—		—		(15.4)		—		—		(15.4)
Stock-based compensation activity	Stock-based compensation activity	—		—		1.9		(6.9)		—		6.0		1.0		Stock-based compensation activity	—		1.9		(0.1)		—		(3.6)		(1.8)
Exercise of Ripple Warrants																Exercise of Ripple Warrants	0.1		(0.1)		—		—		—		—
Other comprehensive loss	Other comprehensive loss	—		—		—		—		(6.8)		—		(6.8)		Other comprehensive loss	—		—		—		(5.0)		—		(5.0)
March 31, 2020		$	183.9	$	0.7	$	1,118.8	$	(1,488.5)	$	(70.3)	$	(12.3)	$	(267.7)
March 31, 2021																March 31, 2021	$	0.8	$	1,297.8	$	(1,490.8)	$	(63.4)	$	(3.6)	$	(259.2)


(Amounts in millions)	(Amounts in millions)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Loss		Accumulated Other Comprehensive Loss		Treasury Stock		Total		(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)
January 1, 2020																January 1, 2020	$	183.9	$	0.7	$	1,116.9	$	(1,460.1)	$	(63.5)	$	(18.3)	$	(240.4)
Net loss	Net loss	—		—		—		(13.5)		—		—		(13.5)		Net loss	—		—		—		(21.5)		—		—		(21.5)
Stock-based compensation activity	Stock-based compensation activity	—		—		2.6		(9.5)		—		9.0		2.1		Stock-based compensation activity	—		—		1.9		(6.9)		—		6.0		1.0
Cumulative effect of adoption of ASU 2018-02		—		—		—		15.1		(15.1)		—		—
Other comprehensive loss	Other comprehensive loss	—		—		—		—		(2.1)		—		(2.1)		Other comprehensive loss	—		—		—		—		(6.8)		—		(6.8)
March 31, 2019		$	183.9	$	0.6	$	1,049.4	$	(1,411.5)	$	(84.7)	$	(20.0)	$	(282.3)
March 31, 2020																March 31, 2020	$	183.9	$	0.7	$	1,118.8	$	(1,488.5)	$	(70.3)	$	(12.3)	$	(267.7)

See Notes to the Unaudited Condensed Consolidated Financial Statements

Table of Contents

MONEYGRAM INTERNATIONAL, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- UNAUDITED~~

Note 1 — Description of the Business and Basis of Presentation

References to ~~“MoneyGram,”~~"MoneyGram," the ~~“Company,” “we,” “us”~~"Company," "we," "us" and ~~“our”~~"our" are to MoneyGram International, Inc. and its subsidiaries.

Nature of Operations — MoneyGram offers products and services under its 2 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~~retail and digital. Through our ~~walk-in channel,~~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 ~~solutions~~services such as moneygram.com, mobile solutions, ~~fintech~~account deposit and ~~digital partners, wallets and account deposit~~kiosk-based services as part of our ~~digital channel.~~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”)~~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 Novel Coronavirus ~~(“COVID-19”~~("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 ~~rapidly-evolving.~~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 ~~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 resulting government actions taken in response to the virus have ~~negatively affected our workforce, agents, customers, financial markets, employment rates, consumer spending~~caused, and ~~credit markets, caused~~may continue to cause significant economic and business disruption, volatility and financial uncertainty, and ~~led~~a continued significant global economic downturn. This has had, and may continue to have, a ~~significant~~negative impact on our workforce, agents, customers, financial markets, consumer spending and credit markets. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic ~~downturn.~~

~~We have assessed various accounting estimates and other matters, including those~~recession or depression that ~~require consideration of forecasted financial information,~~has occurred or may occur in ~~context of~~ the ~~unknown~~future. Therefore, the Company cannot reasonably estimate the future ~~impacts of COVID-19 using information that is reasonably available to us~~impact at this time. ~~The accounting estimates and other matters we assessed included, but~~

There 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~~impacts to our unaudited condensed consolidated financial statements as of and for the quarter ended March 31, ~~2020,~~2021, 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~~Unaudited Condensed Consolidated Financial Statements in future reporting periods.

Use of Estimates — The preparation of 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.

~~Recent~~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.

Reclassification — Certain prior amounts have been reclassified in order to conform to the current year presentation. In 2020, the Company changed the presentation of its right-of-use assets and associated lease liabilities in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows. Increases to our right-of-asset and liabilities that result from new operating leases, extension of existing operating leases or modifications of existing operating leases are excluded from the Condensed Consolidated Statements of Cash Flows as these are non-cash items in the period they occur.

Table of Contents

Presentation — During the first quarter of 2021, the Company changed its presentation to disclose "Gross profit" in the Condensed Consolidated Statements of Operations. The presentation of gross profit is intended to supplement investors with an understanding of our operating performance. Gross profit is calculated as total revenue less commissions and direct transaction expenses. These expenses were previously included within "Operating expenses" and are now presented within "Cost of revenue" in the Condensed Consolidated Statements of Operations. The change in presentation was applied retrospectively to all periods presented in the Condensed Consolidated Statements of Operations and it had no effect on Operating income, Net loss or Loss per share. The Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Comprehensive Loss, Condensed Consolidated Statements of Stockholders' Deficit and Condensed Consolidated Statements of Cash Flows are not affected by this change in presentation.

Recently Issued Accounting ~~Pronouncements~~Standards and Related ~~Developmen~~Developments Not Yet Adopted ts — In June 2016, the Financial Accounting Standards Board ~~(“FASB”~~("FASB") issued Accounting Standards Update ~~(“ASU”~~("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:

~~Table of Contents~~

•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 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. MoneyGram is a smaller reporting company and, as such, ~~will~~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.

~~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.

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. We are currently evaluating the impact of this standard 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.

Table of Contents

Note 2 — Reorganization Costs

In the ~~fourth~~first quarter of ~~2019,~~2021, the Company committed to an operational plan to reduce overall operating expenses, including the elimination of approximately ~~120~~110 positions ac~~ross~~across the Company and certain actions to reduce other ongoing operating expenses, including real estate-related expenses (the ~~“2019~~“2021 Organizational Realignment”). The ~~workforce reduction was~~actions are designed to streamline operations and structure the Company in a way that will be more agile and aligned around ~~our~~its plan to execute digital and market-specific ~~strategies tailored to different segments.~~strategies. The workforce reduction portion of the 2021 Organizational Realignment was substantially completed in the first quarter of ~~2020 with $7.5 million~~2021 and the Company anticipates related cash expenditures to be substantially paid out by the end of ~~costs~~2021. Costs incurred ~~consisting~~in the first quarter of 2021 consisted primarily of one-time termination benefits for employee severance and related costs, which are recorded in ~~“Compensation~~"Compensation and ~~benefits”~~benefits" on the Condensed Consolidated Statements of ~~Operations~~Operations. The Company’s estimates are based on a number of assumptions. Actual results may differ materially, and additional charges not currently expected may be incurred in connection with, or as a result of, the ~~Global Funds Transfer reporting segment.~~2021 Organizational Realignment.

The following table is a roll-forward of the reorganization costs accrual as of March 31, ~~2020:~~2021:


(Amounts in millions)	~~2019~~2021 Organizational Realignment
Balance at December 31, ~~2019~~2020	$	~~4.6~~0
Expenses	~~0.7~~5.9
Cash payments	~~(4.6)~~(4.3)

Balance at March 31, ~~2020~~2021	$	~~0.7~~1.6

~~Table of Contents~~

The following table is a summary of the cumulative reorganization costs incurred to date in operating expenses and the estimated remaining reorganization costs to be incurred as of March 31, ~~2020:~~2021:

(Amounts in millions)

~~2019~~2021 Organizational
Realignment

~~Balance, December 31, 2019~~Cumulative reorganization costs incurred to date in operating expenses

~~6.8~~5.9

~~First quarter 2020~~Estimated additional reorganization costs to be incurred

~~0.7~~3.8

Total ~~cumulative~~ reorganization costs incurred and to ~~date~~be incurred

~~7.5~~9.7

The following table is a summary of the cumulative reorganization costs incurred to date in operating expenses by reporting segment:


(Amounts in millions)	Global Funds Transfer		Financial Paper Products		Total
Balance at December 31, 2020	$	0	$	0	$	0
First quarter 2021	5.7		0.2		5.9


Total cumulative reorganization costs incurred to date	$	5.7	$	0.2	$	5.9

Table of Contents

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)	(Amounts in millions)	March 31, 2020		December 31, 2019		(Amounts in millions)	March 31, 2021		December 31, 2020
Settlement assets:	Settlement assets:					Settlement assets:
Settlement cash and cash equivalents	Settlement cash and cash equivalents	$	1,371.6	$	1,531.1	Settlement cash and cash equivalents	$	1,846.4	$	1,883.2
Receivables, net	Receivables, net	579.5		715.5		Receivables, net	824.9		825.0
Interest-bearing investments	Interest-bearing investments	989.1		985.9		Interest-bearing investments	992.3		991.2
Available-for-sale investments	Available-for-sale investments	4.3		4.5		Available-for-sale investments	3.4		3.5
Total settlement assets						Total settlement assets	$	3,667.0	$	3,702.9
		$	2,944.5	$	3,237.0
Payment service obligations	Payment service obligations	$	(2,944.5)	$	(3,237.0)	Payment service obligations	$	(3,667.0)	$	(3,702.9)

~~Table of Contents~~

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.

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

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

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

•Derivative financial instruments — Derivatives consist of forward contracts to manage income statement exposure to 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 No te 6 — Derivative Financial Instruments for additional disclosure on the Company's forward contracts.

Table of Contents

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


(Amounts in millions)	(Amounts in millions)	Level 2		Level 3		Total		(Amounts in millions)	Level 2		Level 3		Total
March 31, 2020
March 31, 2021								March 31, 2021
Financial assets:	Financial assets:							Financial assets:
Available-for-sale investments:	Available-for-sale investments:							Available-for-sale investments:
Residential mortgage-backed securities	Residential mortgage-backed securities	$	3.5	$	—	$	3.5	Residential mortgage-backed securities	$	2.8	$	0	$	2.8
Asset-backed and other securities	Asset-backed and other securities	—		0.8		0.8		Asset-backed and other securities	0		0.6		0.6
Forward contracts	Forward contracts	4.3		—		4.3		Forward contracts	2.3		0		2.3
Total financial assets	Total financial assets	$	7.8	$	0.8	$	8.6	Total financial assets	$	5.1	$	0.6	$	5.7
Financial liabilities:	Financial liabilities:							Financial liabilities:
Forward contracts	Forward contracts	$	—	$	—	$	—	Forward contracts	$	0.1	$	0	$	0.1

December 31, 2019
December 31, 2020								December 31, 2020
Financial assets:	Financial assets:							Financial assets:
Available-for-sale investments:	Available-for-sale investments:							Available-for-sale investments:
Residential mortgage-backed securities	Residential mortgage-backed securities	$	3.6	$	—	$	3.6	Residential mortgage-backed securities	$	3.0	$	0	$	3.0
Asset-backed and other securities	Asset-backed and other securities	—		0.9		0.9		Asset-backed and other securities	0		0.5		0.5
Forward contracts	Forward contracts	—		—		—		Forward contracts	0.1		0		0.1
Total financial assets	Total financial assets	$	3.6	$	0.9	$	4.5	Total financial assets	$	3.1	$	0.5	$	3.6
Financial liabilities:	Financial liabilities:							Financial liabilities:
Forward contracts	Forward contracts	$	0.8	$	—	$	0.8	Forward contracts	$	2.2	$	0	$	2.2

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~~2021 and December 31, ~~2019,~~2020, the fair value of the first lien credit facility was ~~$460.9~~$633.7 million and ~~$577.6~~$635.3 million, respectively, with a carrying value of ~~$640.2~~ $633.7 million and ~~$641.8~~$635.3 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~~2021 and December 31, ~~2019,~~2020, the fair value of the second lien credit facility was ~~$185.7~~ $248.8 million and ~~$236.7~~$254.3 million, respectively, with a carrying value of $254.6 million and ~~$251.4~~$254.6 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~~2021 and December 31, ~~2019.~~2020.

Table of Contents

Note 5 — Investment Portfolio

The following table shows the components of the investment portfolio:


(Amounts in millions)	(Amounts in millions)	March 31, 2020		December 31, 2019		(Amounts in millions)	March 31, 2021		December 31, 2020
Cash	Cash	$	1,500.1	$	1,675.4	Cash	$	1,999.2	$	2,076.8
Money market securities	Money market securities	2.5		2.5		Money market securities	0		2.5

Cash and cash equivalents ⁽¹⁾	Cash and cash equivalents ⁽¹⁾	1,502.6		1,677.9		Cash and cash equivalents (1)	1,999.2		2,079.3
Interest-bearing investments	Interest-bearing investments	989.1		985.9		Interest-bearing investments	992.3		991.2
Available-for-sale investments	Available-for-sale investments	4.3		4.5		Available-for-sale investments	3.4		3.5
Total investment portfolio	Total investment portfolio	$	2,496.0	$	2,668.3	Total investment portfolio	$	2,994.9	$	3,074.0

⁽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.

~~Table of Contents~~

The following table is a summary of the amortized cost and fair value of available-for-sale investments:


(Amounts in millions)	(Amounts in millions)	Amortized Cost		Gross Unrealized Gains		Fair Value		(Amounts in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2020
March 31, 2021								March 31, 2021
Residential mortgage-backed securities	Residential mortgage-backed securities	$	3.1	$	0.4	$	3.5	Residential mortgage-backed securities	$	2.5	$	0.3	$	0	$	2.8
Asset-backed and other securities	Asset-backed and other securities	0.2		0.6		0.8		Asset-backed and other securities	0		0.6		0		0.6
Total	Total	$	3.3	$	1.0	$	4.3	Total	$	2.5	$	0.9	$	0	$	3.4

December 31, 2019
December 31, 2020								December 31, 2020
Residential mortgage-backed securities	Residential mortgage-backed securities	$	3.3	$	0.3	$	3.6	Residential mortgage-backed securities	$	2.6	$	0.4	$	0	$	3.0
Asset-backed and other securities	Asset-backed and other securities	0.2		0.7		0.9		Asset-backed and other securities	0.2		0.5		(0.2)		0.5
Total	Total	$	3.5	$	1.0	$	4.5	Total	$	2.8	$	0.9	$	(0.2)	$	3.5

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, ~~81%~~82% and ~~80%~~86%, 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 months ended March 31, 2021 and 2020, 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.

Table of Contents

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.~~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) ~~gains~~ related to assets and liabilities denominated in non-U.S. dollar are included in ~~“Transaction~~"Transaction and operations ~~support”~~support" in the Condensed Consolidated Statements of Operations and in the "Net cash ~~provided by~~used in operating activities" line in the Condensed Consolidated Statements of Cash Flows:


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
Net realized non-U.S. dollar loss	Net realized non-U.S. dollar loss	$	(3.8)	$	(3.5)	Net realized non-U.S. dollar loss	$	(8.2)	$	(3.8)
Net gain from the related forward contracts	Net gain from the related forward contracts	6.3		5.1		Net gain from the related forward contracts	6.6		6.3
Net gain from non-U.S. dollar transactions and related forward contracts		$	2.5	$	1.6
Net (loss) gain from non-U.S. dollar transactions and related forward contracts						Net (loss) gain from non-U.S. dollar transactions and related forward contracts	$	(1.6)	$	2.5

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had $~~389.4~~501.5 million and ~~$349.1~~$643.8 million, respectively, of outstanding notional amounts relating to its non-U.S. dollar forward contracts.

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, 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								Gross Amount of Recognized Assets				Gross Amount of Offset		Net Amount of Assets Presented in the Condensed Consolidated Balance Sheets
(Amounts in millions)	(Amounts in millions)	Balance Sheet Location	March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019		(Amounts in millions)		Balance Sheet Location	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Forward contracts	Forward contracts	Other assets	$	4.8	$	0.2	$	(0.5)	$	(0.2)	$	4.3	$	—	Forward contracts		"Other assets"	$	4.0	$	1.0	$	(1.7)	$	(0.9)	$	2.3	$	0.1

~~Table of Contents~~


			Gross Amount of Recognized Liabilities						Gross Amount of Offset							Net Amount of Liabilities Presented in the Consolidated Balance Sheets								Gross Amount of Recognized Liabilities				Gross Amount of Offset		Net Amount of Liabilities Presented in the Condensed Consolidated Balance Sheets
(Amounts in millions)	(Amounts in millions)	Balance Sheet Location	March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019		(Amounts in millions)		Balance Sheet Location	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Forward contracts	Forward contracts	Accounts payable and other liabilities	$	0.5	$	1.0	$	(0.5)	$	(0.2)	$	—	$	0.8	Forward contracts		"Accounts payable and other liabilities"	$	1.8	$	3.1	$	(1.7)	$	(0.9)	$	0.1	$	2.2

The ~~Company’s~~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~~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.

Table of Contents

Note 7 — Debt

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


(Amounts in millions, except percentages)	(Amounts in millions, except percentages)	March 31, 2020		December 31, 2019		(Amounts in millions, except percentages)	March 31, 2021		December 31, 2020
6.95% first lien revolving credit facility due 2022		$	23.0	$	—

7.00% first lien credit facility due 2023	7.00% first lien credit facility due 2023	640.2		641.8		7.00% first lien credit facility due 2023	$	633.7	$	635.3
13.00% second lien credit facility due 2024	13.00% second lien credit facility due 2024	254.6		251.4		13.00% second lien credit facility due 2024	254.6		254.6
Senior secured credit facilities	Senior secured credit facilities	917.8		893.2		Senior secured credit facilities	888.3		889.9
Unamortized debt issuance costs and debt discounts	Unamortized debt issuance costs and debt discounts	(40.3)		(42.9)		Unamortized debt issuance costs and debt discounts	(29.5)		(32.1)
Total debt, net	Total debt, net	$	877.5	$	850.3	Total debt, net	$	858.8	$	857.8

First Lien Credit Agreement and Revolving Credit Facility — The First Lien Credit Agreement provides for ~~(i)~~(a) 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~~"First Lien Revolving Credit ~~Facility”~~Facility") and ~~(ii)~~(b) a senior secured four-year term loan facility in an aggregate principal amount of $645.0 million (the ~~“First~~"First Lien Term Credit ~~Facility”~~Facility" and together with the First Lien Revolving Credit Facility, the ~~“First~~"First Lien Credit ~~Facility”~~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~~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. As of March 31, 2021, the Company had 0 borrowings and nominal outstanding letters of credit under the First Lien Revolving Credit Facility.

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~~"Second Lien Term Credit ~~Facility”~~Facility" and together with the First Lien Credit Facility, the ~~“Credit Facilities”~~"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~~Company's assets and its material domestic subsidiaries that guarantee the payment and performance of the ~~Company’s~~Company's obligations under the Credit Facilities.

Debt Covenants and Other Restrictions — The Credit Facilities contain various limitations that restrict the ~~Company’s~~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 First Lien Credit Facility requires the Company to not exceed a maximum first lien leverage ratio of 4.00:1.00 and 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.

~~Table of Contents~~

The asset coverage covenant contained in the First Lien Credit Agreement requires the aggregate amount of the ~~Company’s~~Company's cash and cash equivalents and other settlement assets to 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~~ $152.8 million and ~~$146.8~~$196.1 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The table below summarizes the Revolver Financial Covenants Under the First Lien Credit Agreement, 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,~~2021, the Company was in compliance with its financial covenants: our interest coverage ratio was ~~3.374~~ 3.161 to 1.00, our first lien leverage ratio was ~~2.900~~2.527 to 1.00 and our total leverage ratio was ~~4.013~~3.542 to 1.00. We continuously monitor our compliance with our debt covenants.

Table of Contents

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~~Pension Plan and supplemental executive retirement plans, collectively referred to as "Pension":


		Three Months Ended March 31,							Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020

Interest cost	Interest cost	$	0.8	$	1.7	Interest cost	$	0.5	$	0.8
Expected return on plan assets	Expected return on plan assets	(0.2)		(1.1)		Expected return on plan assets	(0.2)		(0.2)

Amortization of net actuarial loss	Amortization of net actuarial loss	0.5		0.9		Amortization of net actuarial loss	0.6		0.5
Net periodic benefit expense	Net periodic benefit expense	$	1.1	$	1.5	Net periodic benefit expense	$	0.9	$	1.1

The Company ~~had~~had nominal net periodic benefit expense for the three months ended March 31, 2021 and 2020, ~~and 2019,~~respectively 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 — NaN dividends were paid during the three months ended March 31, 2021 or 2020.

Series D Participating Convertible Preferred Stock (the "D Stock") — In 2011, the Company issued 71,282 shares of D Stock to Goldman Sachs. Each share of D Stock has a liquidation preference of $0.01 and is convertible into 125 shares of common stock. In 2020, Goldman Sachs converted all of its 71,282 shares of D Stock into 8,910,234 shares of common stock with a par value of $0.01 per share. As of March 31, 2021 and December 31, 2020, the Company had 200,000 shares of D Stock with a par value of $0.01 per share, authorized and none issued.

The following table is a summary of changes in the number of shares of the Company’s authorized, issued and outstanding stock as of March 31, 2021:


	Common Stock		Treasury Stock
		Authorized		Issued		Outstanding
December 31, 2020		162,500,000	72,530,770		(72,517,539)		13,231

Exercise of Ripple Warrants		—	5,948,895		(5,948,895)		—
Release for restricted stock units		—	1,793,754		(1,274,964)		518,790
March 31, 2021		162,500,000	80,273,419		(79,741,398)		532,021

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,								Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		Statement of Operations Location	(Amounts in millions)	2021		2020		Statement of Operations Location

Pension and Postretirement Benefits adjustments:	Pension and Postretirement Benefits adjustments:						Pension and Postretirement Benefits adjustments:
Amortization of net actuarial loss	Amortization of net actuarial loss	$	0.5	$	0.9	"Other non-operating expense"	Amortization of net actuarial loss	$	0.6	$	0.5	"Other non-operating expense"

Total before tax	Total before tax	0.5		0.9			Total before tax	0.6		0.5
Tax benefit, net	Tax benefit, net	(0.1)		(0.1)			Tax benefit, net	(0.1)		(0.1)
Total reclassified for the period, net of tax	Total reclassified for the period, net of tax	$	0.4	$	0.8		Total reclassified for the period, net of tax	$	0.5	$	0.4

1214

Table of Contents

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


(Amounts in millions)	(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		(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)
January 1, 2021										January 1, 2021	$	1.2	$	(20.9)	$	(38.7)	$	(58.4)
Other comprehensive loss before reclassification	Other comprehensive loss before reclassification	—		(7.2)		—		(7.2)		Other comprehensive loss before reclassification	0.3		(5.8)		0		(5.5)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	—		—		0.4		0.4		Amounts reclassified from accumulated other comprehensive loss	0		0		0.5		0.5
Net current period other comprehensive (loss) income		—		(7.2)		0.4		(6.8)
March 31, 2020		$	1.6	$	(35.3)	$	(36.6)	$	(70.3)
Net current period other comprehensive loss										Net current period other comprehensive loss	0.3		(5.8)		0.5		(5.0)
March 31, 2021										March 31, 2021	$	1.5	$	(26.7)	$	(38.2)	$	(63.4)

(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)


(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	0		(7.2)		0		(7.2)
Amounts reclassified from accumulated other comprehensive loss	0		0		0.4		0.4
Net current period other comprehensive loss	0		(7.2)		0.4		(6.8)
March 31, 2020	$	1.6	$	(35.3)	$	(36.6)	$	(70.3)

Note 10 — Stock-Based Compensation

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


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020

Stock-based compensation expense	Stock-based compensation expense	$	2.0	$	2.6	Stock-based compensation expense	$	1.8	$	2.0

Stock Options — The following table is a summary of the ~~Company’s~~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
Options outstanding, vested or expected to vest, and exercisable at March 31, 2020 387,215 $ 19.27 2.1 years $ —


	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ($000,000)
Options outstanding at December 31, 2020	277,962	$	19.58	1.8 years	$	0
Forfeited/Expired	(8,751)	17.17
Options outstanding, vested or expected to vest, and exercisable at March 31, 2021	269,211	$	19.66	1.6 years	$	0

As of March 31, ~~2020,~~2021, the Company had 0 unrecognized stock option expense related to outstanding options.

Restricted Stock Units — ~~In March 2020,~~On February 24, 2021, the Company granted time-based and performance-based restricted stock units. The time-based restricted stock units ~~which~~ vest in three equal installments on each anniversary of the grant date. AsThe performance-based restricted stock units are subject to performance conditions and a one-year performance period. When and if the conditions are satisfied at the end of ~~March 4, 2020,~~the one-year performance period, vesting of the performance-based restricted stock units are subject only to the passage of time and vest in three equal installments on each anniversary of the grant date, the Company had remaining authorization to issue grants of up to 1,919,406 shares under its 2005 Omnibus Incentive Plan (“2005 Plan”). If the March 2020 grants were to be fully settled in stock, an additional 1,279,888 shares of Company common stock would be needed under the 2005 Plan to be able to settle those awards. At the 2020 Annual Meeting of Stockholders, the stockholders will be asked to approve the amendment and restatement of the 2005 Plan, which includes among other items, approval for increasing the number of shares that may be issued under the plan by 8,900,000 shares. If the amendment and restatement is approved at the 2020 Annual Meeting of Stockholders, it will become effective as of May 6, 2020.date.

1315

Table of Contents

The following table is a summary of the ~~Company’s~~Company's restricted stock unit activity:


		Total Shares	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value ($000,000)			Total Shares	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value ($000,000)
Restricted stock units outstanding at December 31, 2019		2,731,758	$	5.02	0.9 years	$	5.7
Restricted stock units outstanding at December 31, 2020								Restricted stock units outstanding at December 31, 2020	5,158,235	$	2.62	0.95 years	$	28.2
Granted	Granted	3,199,294	2.12					Granted	1,495,575	5.49
Vested and converted to shares	Vested and converted to shares	(997,868)	6.90					Vested and converted to shares	(1,795,796)	3.31
Forfeited	Forfeited	(99,042)	3.73					Forfeited	(546,259)	2.29
Restricted stock units outstanding at March 31, 2020		4,834,142	$	2.74	1.6 years	$	6.3
Restricted stock units vested and deferred at March 31, 2020		54,472	$	8.26		$	0.1
Restricted stock units outstanding at March 31, 2021								Restricted stock units outstanding at March 31, 2021	4,311,755	$	3.36	1.42 years	$	28.3
Restricted stock units vested and deferred at March 31, 2021								Restricted stock units vested and deferred at March 31, 2021	215,021	$	3.37		$	1.4

The following table is a summary of the Company's restricted stock unit compensation information:


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
Weighted-average grant-date fair value of restricted stock units vested during the period	Weighted-average grant-date fair value of restricted stock units vested during the period	$	6.9	$	8.9	Weighted-average grant-date fair value of restricted stock units vested during the period	$	5.9	$	6.9
Total intrinsic value of vested and converted shares	Total intrinsic value of vested and converted shares	$	2.5	$	2.5	Total intrinsic value of vested and converted shares	$	12.4	$	2.5

As of March 31, ~~2020,~~2021, the ~~Company’s~~Company's outstanding restricted stock units had unrecognized compensation expense of ~~$11.0~~$12.6 million with a remaining weighted-average vesting period of ~~2.4~~1.9 years. ~~The Company had $0.1 million of expense related to liability classified restricted stock units for the three months ended March 31, 2020.~~

Note 11 — Income Taxes

For the three months ended March 31, ~~2020,~~2021, the Company recognized an income tax expense of ~~$9.7~~$0.5 million on a pre-tax loss of ~~$11.8~~$14.9 million primarily due to non-deductible expenses, foreign taxes net of federal income tax benefits, an increase in valuation allowance, U.S. taxation of foreign earnings ~~non-deductible expenses, foreign~~and state taxes, ~~net of federal income tax benefits and the reversal of tax benefits on share-based compensation,~~ all of which were partially offset by U.S. ~~tax credits. The change in valuation allowance was triggered by a three-year cumulative pre-tax loss position inclusive~~general business credits and recognition of 2020 forecasted earnings. While the Company has a long history of profitable operations prior to recent declines, the expected cumulative loss position is significant negative evidence in assessing the recoverability of our deferred tax assets. Therefore, we recorded an additional valuation allowance of $10.6 million, of which $10.1 million related to balances which existed at the beginning of the year, against our deferred tax assets for which ultimate realization is dependent upon the generation of future taxable income during the periods in which they become deductible. The valuation allowance does not, however, impact our cash position, our liquidity, or our tax returns.

For the three months ended March 31, 2019, the Company recognized an income tax expense of $6.6 million on a pre-tax loss of $6.9 million primarily due to non-deductible expenses, U.S. taxation of foreign earnings, the reversal ofexcess tax benefits on share-based compensation, partially offset by U.S. tax credits net of valuation allowance. Additionally, as a result of the issuance of the final Section 965 regulations by the U.S. Treasury Department and the Internal Revenue Service (the "IRS") on January 15, 2019, the Company recorded a discrete tax expense of ~~$0.7 million for an increase in its one-time transition tax.~~compensation.

Unrecognized tax benefits are recorded in ~~“Accounts~~"Accounts payable and other ~~liabilities”~~liabilities" in the Condensed Consolidated Balance Sheets. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the liability for unrecognized tax benefits was ~~$18.2~~$19.7 million for both periods, exclusive of interest and penalties. ~~For the three months ended March 31, 2020 and~~ ~~2019, the net~~The total amount of unrecognized tax benefits that, if recognized, ~~could impact~~would affect the effective tax rate was ~~$18.2~~$19.7 million ~~in both years.~~as of March 31, 2021. The Company accrues interest and penalties for unrecognized tax benefits through ~~“Income~~"Income tax (benefit) ~~expense”~~expense" in the Condensed Consolidated Statements of Operations. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company's accrual for interest and penalties increased by ~~$0.3~~$0.2 million ~~in each period.~~ and $0.3 million, respectively. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had a liability o~~f $8.6~~of $9.6 million and ~~$8.3~~$9.4 million, respectively, for accrued ~~for~~ interest and penalties within "Accounts payable and other liabilities." As a result of the Company's litigation related to its securities losses discussed in more detail in Note 12 — Commitments and Contingencies, it is possible that there could be a significant decrease to the total amount of unrecognized tax benefits over the next 12 months. However, as of March 31, ~~2020,~~2021, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax positions over the next 12 months.

~~Table of Contents~~

Note 12 — Commitments and Contingencies

Letters of Credit — At March 31, ~~2020,~~2021, the Company had 0 borrowings and nominal outstanding letters of credit ~~and $23.0 million borrowings und~~erunder the First Lien Revolving Credit Facility.

Legal Proceedings — The matters set forth below are subject to uncertainties and outcomes that are not predictable. The Company accrues for these matters as any resulting losses become probable and can be reasonably estimated. Further, the Company maintains insurance coverage for many claims and litigation matters. In relation to various legal matters, including those described below, the Company ~~had $57.5~~had $57.0 million of ~~liability~~liability recorded in ~~“Accounts~~"Accounts payable and other ~~liabilities”~~liabilities" in the Condensed Consolidated Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019.~~2020. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, a nominal charge was recorded for legal proceedings in ~~“Transaction~~"Transaction and operations ~~support”~~support" in the Condensed Consolidated Statements of Operations.

Table of Contents

Litigation Commenced Against the Company:

Class Action Securities Litigation — On November 14, 2018, a putative securities class action lawsuit was filed in the United States District Court for the Northern District of Illinois against MoneyGram and certain of its executive officers. The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and alleges that MoneyGram made material misrepresentations regarding its compliance with the stipulated order for permanent injunction and final judgment that MoneyGram entered into with the Federal Trade Commission ~~(“FTC”~~("FTC") in October 2009 and with the deferred prosecution agreement (the "DPA") that MoneyGram entered into with the U.S. Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Justice in November 2012. The lawsuit seeks unspecified damages, equitable relief, interest and costs and ~~attorneys’~~attorneys' fees. The Company believes the case is without merit and is vigorously defending this matter. We are unable to predict the outcome, or the possible loss or range of loss, if any, related to this matter.

Shareholder Derivative Litigation — On February 19 and 20, 2019, two virtually identical shareholder derivative lawsuits were filed in the United States District Court for the Northern District of Texas. The suits, which ~~have since been~~were consolidated, purport to assert claims derivatively on behalf of MoneyGram against MoneyGram’s directors and certain of its executive officers for violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 and for common-law breach of fiduciary duty and unjust enrichment. The complaints ~~assert~~asserted that the individual defendants caused MoneyGram to make material misstatements regarding ~~MoneyGram’s~~MoneyGram's compliance with the stipulated order and DPA described ~~in the preceding paragraph~~below and breached their fiduciary duties in connection with ~~MoneyGram’s~~MoneyGram's compliance programs. The lawsuit ~~seeks~~sought unspecified damages, equitable relief, interest and costs and ~~attorneys’~~attorneys' fees. On February 24, 2020, the United States District for the Northern District of Texas entered an agreed final judgment dismissing the consolidated case. On December 28, 2019, another MoneyGram shareholder filed a putative derivative action suit in the Court of Chancery of the State of Delaware, New Castle County, against certain of ~~MoneyGram’s~~MoneyGram's officers and directors. The Delaware suit asserts claims for breach of fiduciary duty and other common law theories and seeks unspecified damages on behalf of MoneyGram based on allegations that the individual defendants failed to take appropriate actions to prevent or remedy noncompliance with the stipulated order and DPA described ~~above.~~below. On December 31, 2020, the Court of Chancery granted the motion to dismiss filed by MoneyGram and the individual defendants, holding that the complaint failed to plead particularized facts showing a substantial likelihood that MoneyGram’s directors acted in bad faith. The ~~Company believes the derivative cases are without merit and is vigorously defending these matters. We are unable to predict the outcome, or the possible loss or range~~Court of ~~loss, if any, related to these matters.~~Chancery entered a judgment of dismissal with prejudice on January 25, 2021. No appeal has been filed.

Books and Records Requests — The Company has received multiple requests from various putative shareholders for inspection of books and records pursuant to Section 220 of the Delaware General Corporation Law relating to the subject matter of the putative class and derivative lawsuits described in the preceding paragraphs. On February 26, 2019, two of these shareholders filed a petition in the Delaware Court of Chancery to compel MoneyGram to produce books and records in accordance with their request but have since dismissed their action. We are unable to predict the outcome, or the possible loss or range of loss, if any, related to these matters.

Class Action Securities Litigation Relating to XRP Cryptocurrency — On March 1, 2021, a putative securities class action lawsuit was filed in the United States District Court for the Central District of California against MoneyGram and certain of its executive officers. A second substantially similar putative class action was filed March 10, 2021 in the same court. The lawsuits assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and allege that MoneyGram made material misrepresentations regarding its business relationship with Ripple Labs, Inc. (“Ripple”) and MoneyGram’s use of Ripple’s XRP cryptocurrency. The lawsuits seek unspecified damages, equitable relief, interest and costs and attorneys' fees. On April 8, 2021, by agreement of the parties, the court consolidated the two lawsuits and transferred the consolidated action to the United States District Court for the Northern District of Texas, where the case remains pending. The Company believes the case is without merit and is vigorously defending this matter. We are unable to predict the outcome, or the possible loss or range of loss, if any, related to this matter.

It is possible that additional shareholder lawsuits could be filed relating to the subject matter of the above class ~~action,~~actions, derivative actions and Section 220 requests.

Other Matters — The Company is involved in various other claims and litigation that arise from time to time in the ordinary course of the ~~Company’s~~Company's business. Management does not believe that after final disposition any of these matters is likely to have a material adverse impact on the ~~Company’s~~Company's financial condition, results of operations or cash flows.

Government Investigations:

OFAC — In 2015, we initiated an internal investigation to identify any payments processed by the Company that were violations of the U.S. Department of the ~~Treasury’s~~Treasury's Office of Foreign Assets Control ~~(“OFAC”~~("OFAC") sanctions regulations. We notified OFAC of the internal investigation, which was conducted in conjunction with the ~~Company’s~~Company's outside counsel. On March 28, 2017, we filed a Voluntary Self-Disclosure with OFAC regarding the findings of our internal investigation. On April 21, 2021, the Company entered into a settlement agreement with OFAC ~~is currently reviewing~~to settle all pending matters, which included a nominal payment by the ~~results of the Company’s investigation. At~~Company to OFAC. In assessing this ~~time, it is not possible to determine the outcome of this~~nominal penalty, OFAC acknowledged several mitigating factors

1517

Table of Contents

~~matter, or~~including that MoneyGram discovered and voluntarily disclosed the ~~significance, if any,~~apparent violations as part of its ongoing efforts to ~~our business, financial condition or operations,~~improve its compliance program, MoneyGram’s remedial actions, significant investments in compliance-related functions and ~~we cannot predict when OFAC will conclude its review of our Voluntary Self-Disclosure.~~MoneyGram’s cooperation with OFAC’s investigation.

Deferred Prosecution Agreement — In November 2012, we announced that a settlement was reached with the U.S. ~~Attorney’s~~Attorney's Office for the Middle District of Pennsylvania (the ~~“MDPA”~~"MDPA") and the U.S. Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section (the ~~“U.S. DOJ”~~"U.S. DOJ") relating to the previously disclosed investigation of transactions involving certain of our U.S. and Canadian agents, as well as fraud complaint data and the consumer anti-fraud program, during the period from 2003 to early 2009. In connection with this settlement, we entered into the DPA with the MDPA and U.S. DOJ (collectively, the ~~“Government”~~"Government") dated November 9, 2012.

On November 1, 2017, the Company agreed to a stipulation with the Government that the five-year term of the ~~Company’s~~Company's DPA be extended for 90 days to February 6, 2018. Between January 31, 2018 and September 14, 2018, the Company agreed to enter into various extensions of the DPA with the Government, with the last extension ending on November 6, 2018. Each extension of the DPA extended all terms of the DPA, including the term of the monitorship for an equivalent period. The purpose of the extensions was to provide the Company and the Government additional time to discuss whether the Company was in compliance with the DPA.

On November 8, 2018, the Company announced that it entered into (1) an Amendment to and Extension of Deferred Prosecution Agreement (the ~~“Amended DPA”~~"Amended DPA") with the Government and (2) a Stipulated Order for Compensatory Relief and Modified Order for Permanent Injunction (the ~~“Consent Order”~~"Consent Order") with the FTC. The motions underlying the Amended DPA and Consent Order focus primarily on the ~~Company’s~~Company's anti-fraud and anti-money laundering programs, including whether the Company had adequate controls to prevent third parties from using its systems to commit fraud. The Amended DPA amended and extended the original DPA entered into on November 9, 2012 by and between the Company and the Government. The DPA, Amended DPA and Consent Order are collectively referred to herein as the ~~“Agreements.”~~"Agreements." On February 25, 2020, the Company entered into an Amendment to ~~Amendment to~~ and Extension of the DPA Agreement which extended the due date to November 8, 2020 for the final $55.0 million payment due to the Government pursuant to the Amended DPA. ~~The~~On July 24, 2020, the Company ~~continues~~entered into the Second Amendment to ~~engage in discussions with~~ the ~~Government regarding a potential further extension~~Amendment to and Extension of the ~~deadline to make~~Deferred Prosecution Agreement which further extended the ~~final~~due date of the $55.0 million payment to May 9, 2021 and ~~a reduction of such payment. The Company intends to fulfil its obligation regarding~~also reduced the ~~final payment and the other terms~~frequency of the reporting requirements under the Amended ~~DPA.~~DPA from monthly to quarterly.

Under the Agreements, as amended, the Company ~~will,~~agreed to, among other things, (1) pay an aggregate amount of $125.0 million to the Government, of which $70.0 million was paid in November 2018 and the remaining $55.0 million ~~must be~~was paid ~~by November 8, 2020,~~in April 2021, and is to be made available by the Government to reimburse consumers who were the victims of third-party fraud conducted through the ~~Company’s~~Company's money transfer services and (2) continue to retain an independent compliance monitor until May 10, 2021 to review and assess actions taken by the Company under the Agreements to further enhance its compliance program. No separate payment to the FTC is required under the Agreements. If the Company fails to comply with the Agreements, it could face criminal prosecution, civil litigation, significant fines, damage awards or regulatory consequences which could have a material adverse effect on the ~~Company’s~~Company's business, financial condition, results of operations and cash flows.

On May 4, 2021, the Company, along with the Government filed the Joint Status Report with the United States District Court for the Middle District of Pennsylvania regarding the status of the DPA, as amended, previously entered into among the parties.

In the Joint Status Report, the parties confirmed that MoneyGram has satisfied its financial obligations under the DPA and that, pursuant to the terms of the DPA, the independent compliance monitor has certified to MoneyGram and the Government that MoneyGram’s anti-fraud and anti-money laundering compliance program, including its policies and procedures, are reasonably designed and implemented to detect and prevent fraud and money laundering and to comply with the Bank Secrecy Act.

In addition, the Joint Status Report states that on May 10, 2021, MoneyGram, through its Chief Executive Officer and Chief Compliance Officer, intends to certify to the United States that the Company has fulfilled its obligations under the DPA, and that after the United States receives the required certifications from MoneyGram, and provided that the Company has otherwise complied with the DPA, the Government will move to dismiss the matter underlying the DPA within 45 days of May 10, 2021.

NYDFS — On June 22, 2018, the Company received a request for production of documents from the New York Department of Financial Services (the ~~“NYDFS”~~"NYDFS") related to the subject of the DPA and FTC matters described above. This request followed previous inquiries by the NYDFS regarding certain of our New York based agents. Following the June 22, 2018 request for production, the Company received and responded to several inquiries from the NYDFS related to this matter and has met with the NYDFS to discuss the matter. The NYDFS did not indicate what, if any, action it intended to take in connection with this matter, although it is possible that it could seek additional information, initiate civil litigation and/or seek to impose fines, damages or other regulatory consequences, any or all of which could have an adverse effect on the ~~Company’s~~Company's business, financial condition, results of operations and cash flows. The Company is unable to predict the outcome, or the possible loss or range of loss, if any, that could be associated with this matter.

Table of Contents

CFPB — On February 12, 2020, the Company received a Report of Examination ("ROE") from the Consumer Financial Protection Bureau ("CFPB") stating that previous findings from a 2019 exam were not remediated, and the matter would be referred to its Enforcement Unit. On March 18, 2020, the Company received a Civil Investigative Demand ("CID") from the CFPB's Enforcement Unit. On June 11, 2020, the Company provided a timely response to the ROE describing the remedial actions taken and that the findings have been substantially remediated. On August 21, 2020, the Company completed its production in response to the CID. On February 25, 2021, the CFPB provided MoneyGram with a Notice and Opportunity to Respond and Advise (“NORA”) letter, documenting the CFPB’s intent to take legal action against MoneyGram based on four alleged violations under the Remittance Rule, the Electronic Fund Transfer Act and the Consumer Financial Protection Act. MoneyGram provided the CFPB with its written response to the NORA letter on March 17, 2021. At this time, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition or results of operations.

Other Matters — The Company is involved in various other government inquiries and other matters that arise from time to time. Management does not believe that after final disposition any of these other matters is likely to have a material adverse impact on the Company’s financial condition, results of operations or cash flows.

Actions Commenced by the Company:

Tax Litigation — The IRS completed its examination of the ~~Company’s~~Company's consolidated income tax returns through 2013 and issued Notices of Deficiency for 2005-2007 and 2009, and an Examination Report for 2008. The Notices of Deficiency and Examination Report disallow, among other items, approximately $900.0 million of ordinary deductions on securities losses in the 2007, 2008 and 2009 tax returns. In May 2012 and December 2012, the Company filed petitions in the U.S. Tax Court (“("Tax ~~Court”~~Court") challenging the 2005-2007 and 2009 Notices of Deficiency, respectively. In 2013, the Company reached a partial settlement with the IRS allowing ordinary loss treatment on $186.9 million of deductions in dispute. In January 2015, the Tax

~~Table of Contents~~

Court granted the ~~IRS’s~~IRS's motion for summary judgment upholding the remaining adjustments in the Notices of Deficiency. The Company filed a notice of appeal with the Tax Court on July 27, 2015 for an appeal to the U.S. Court of Appeals for the Fifth Circuit (“("Fifth ~~Circuit”~~Circuit"). Oral arguments were held before the Fifth Circuit on June 7, 2016, and on November 15, 2016, the Fifth Circuit vacated the Tax Court’s decision and remanded the case to the Tax Court for further proceedings. The Company filed a motion for summary judgment in the Tax Court on May 31, 2017. On August 23, 2017, the IRS filed a motion for summary judgment and its response to the Company’s motion for summary judgment. The Tax Court directed the parties to agree to a joint stipulation of facts, which the parties ~~have~~ filed with the court. Each party ~~has since~~ filed updated memorandums in support of its motions for summary judgment in the Tax Court. The Tax Court held oral arguments on this matter on September 9, 2019 and the Tax Court issued an opinion on December 3, 2019 denying the Company’s motion for summary judgment. MoneyGram disagrees with many of the U.S. Tax ~~Court’s~~Court's findings and filed a Notice of Appeal to the Fifth Circuit ~~Court of Appeals~~ on February 21, 2020. The matter is currently pending in the Fifth Circuit and oral arguments were held before a Fifth Circuit panel of judges on March 1, 2021.

~~The January 2015 Tax Court decision was a change in facts which warranted reassessment of the Company's uncertain tax position.~~ Although the Company believes that it has substantive tax law arguments in favor of its position and has appealed the ruling, the reassessment resulted in the Company determining that it is no longer more likely than not that its existing position will be sustained. Accordingly, the Company re-characterized certain deductions relating to securities losses to be capital in nature, rather than ordinary. The Company recorded a full valuation allowance against these losses in the quarter ended March 31, 2015. This change increased "Income tax expense" in the Condensed Consolidated Statements of Operations in the quarter ended March 31, 2015 by $63.7 million. During 2015, the Company made payments to the IRS of $61.0 million for federal tax payments and associated interest related to the matter. The November 2016 Fifth Circuit decision to remand the case back to the Tax Court did not change the Company’s assessment regarding the likelihood of whether these deductions would ultimately be sustained. Accordingly, no change in the valuation allowance was made for this matter as of March 31, ~~2020.~~2021.

Pending the ultimate outcome of the Tax Court proceeding, the Company may be required to file amended state returns and make additional cash payments up to ~~$20.5~~ $21.4 million for various state taxes on ~~amounts~~amounts that have previously been accrued. The Company ~~recently~~ filed a Notice of Appeal to the Fifth Circuit ~~Court of Appeals~~ on February 21, 2020, and ~~therefore expects that any potential payment would~~has not ~~be due before 2021.~~yet received a decision on the matter.

Table of Contents

Note 13 — ~~Earnings per~~Loss Per Common Share

For all periods in which they are ~~outstanding,~~ outstanding, the ~~Series~~shares of D ~~Participating Convertible Preferred~~ Stock ~~(the "D Stock")~~ and the second lien warrants are included in the weighted-average number of common shares outstanding utilized to calculate basic earnings per common share because the shares of D Stock isare deemed a common stock equivalent and the second lien warrants are considered outstanding common shares.

The following table summarizes the weighted-average share amounts used in calculating loss per common share:


		Three Months Ended March 31,			Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020	2019	(Amounts in millions)	2021	2020
Basic and diluted common shares outstanding	Basic and diluted common shares outstanding	77.4	64.8	Basic and diluted common shares outstanding	79.6	77.4

Potential common shares issuable to employees upon exercise or conversion of shares under the Company's stock-based compensation plans and upon exercise of the Ripple Warrants (as defined below) are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common stockholders. Stock options are anti-dilutive when the exercise price of these instruments is greater than the average market price of the ~~Company’s~~Company's common stock for the period, regardless of whether the Company is in a period of net loss available to common shareholders.

The following table summarizes the weighted-average potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive:


		Three Months Ended March 31,			Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020	2019	(Amounts in millions)	2021	2020
Shares related to stock options	Shares related to stock options	0.4	1.3	Shares related to stock options	0.3	0.4
Shares related to restricted stock units	Shares related to restricted stock units	2.8	2.5	Shares related to restricted stock units	4.8	2.8
Shares related to warrants		6.0	—
Shares related to Ripple Warrants				Shares related to Ripple Warrants	4.3	6.0
Shares excluded from the computation	Shares excluded from the computation	9.2	3.8	Shares excluded from the computation	9.4	9.2

~~Table of Contents~~

Note 14 — Segment Information

The ~~Company’s~~Company's reporting segments are primarily organized based on the nature of products and services offered and the type of consumer served. The Company has 2 reporting segments: Global Funds Transfer and Financial Paper Products. See Note 1 — Description of the Business and Basis of Presentation for further discussion on our segments. Walmart Inc. ("Walmart") is our only agent, for both the Global Funds Transfer segment and the Financial Paper Products segment, that accounts for more than 10% of total revenue. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, Walmart accounted for ~~14%~~12% and ~~16%~~14%, respectively, of total revenue.

The following table is a summary of the total revenue by segment:


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
Global Funds Transfer revenue	Global Funds Transfer revenue					Global Funds Transfer revenue
Money transfer revenue	Money transfer revenue	$	255.9	$	273.3	Money transfer revenue	$	285.4	$	255.9
Bill payment revenue	Bill payment revenue	13.4		15.9		Bill payment revenue	10.8��		13.4
Total Global Funds Transfer revenue	Total Global Funds Transfer revenue	269.3		289.2		Total Global Funds Transfer revenue	296.2		269.3
Financial Paper Products revenue	Financial Paper Products revenue					Financial Paper Products revenue
Money order revenue	Money order revenue	12.1		13.9		Money order revenue	10.4		12.1
Official check revenue	Official check revenue	9.5		12.3		Official check revenue	3.5		9.5
Total Financial Paper Products revenue	Total Financial Paper Products revenue	21.6		26.2		Total Financial Paper Products revenue	13.9		21.6
Total revenue	Total revenue	$	290.9	$	315.4	Total revenue	$	310.1	$	290.9

The following table is a summary of the gross profit by segment:


	Three Months Ended March 31,
(Amounts in millions)		2021		2020
Global Funds Transfer gross profit		$	131.1	$	118.0
Financial Paper Products gross profit		13.7		18.5
Total gross profit		$	144.8	$	136.5

Table of Contents

The following table is a summary of the operating income by segment and detail of the ~~(loss) income~~loss before income taxes:


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
Global Funds Transfer operating income	Global Funds Transfer operating income	$	6.7	$	1.1	Global Funds Transfer operating income	$	6.0	$	6.7
Financial Paper Products operating income	Financial Paper Products operating income	7.0		8.2		Financial Paper Products operating income	2.5		7.0
Total segment operating income	Total segment operating income	13.7		9.3		Total segment operating income	8.5		13.7
Other operating loss	Other operating loss	(0.6)		(0.7)		Other operating loss	(0.1)		(0.6)
Total operating income	Total operating income	13.1		8.6		Total operating income	8.4		13.1
Interest expense	Interest expense	23.8		13.9		Interest expense	22.3		23.8
Other non-operating expense	Other non-operating expense	1.1		1.6		Other non-operating expense	1.0		1.1
Loss before income taxes	Loss before income taxes	$	(11.8)	$	(6.9)	Loss before income taxes	$	(14.9)	$	(11.8)

The following table sets forth assets by segment:


(Amounts in millions)	(Amounts in millions)	March 31, 2020		December 31, 2019		(Amounts in millions)	March 31, 2021		December 31, 2020
Global Funds Transfer	Global Funds Transfer	$	1,259.4	$	1,318.3	Global Funds Transfer	$	1,370.7	$	1,397.2
Financial Paper Products	Financial Paper Products	2,581.5		2,819.1		Financial Paper Products	3,182.5		3,247.4
Other	Other	54.8		47.6		Other	34.4		29.5
Total assets	Total assets	$	3,895.7	$	4,185.0	Total assets	$	4,587.6	$	4,674.1

~~Table of Contents~~

Note 15 — Revenue Recognition

The following table is a summary of the Company's revenue streams disaggregated by services and products for each segment and timing of revenue recognition for such services and products excluding other revenue:


		Three Months Ended March 31,					Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		(Amounts in millions)	2021		2020
Global Funds Transfer revenue	Global Funds Transfer revenue					Global Funds Transfer revenue
Money transfer fee revenue	Money transfer fee revenue	$	251.5	$	269.9	Money transfer fee revenue	$	279.2	$	251.5
Bill payment services fee revenue	Bill payment services fee revenue	13.4		15.9		Bill payment services fee revenue	10.8		13.4
Other revenue	Other revenue	4.4		3.4		Other revenue	6.2		4.4
Total Global Funds Transfer fee and other revenue	Total Global Funds Transfer fee and other revenue	269.3		289.2		Total Global Funds Transfer fee and other revenue	296.2		269.3
Financial Paper Products revenue	Financial Paper Products revenue					Financial Paper Products revenue
Money order fee revenue	Money order fee revenue	2.0		2.3		Money order fee revenue	1.7		2.0
Official check outsourcing services fee revenue	Official check outsourcing services fee revenue	2.0		2.1		Official check outsourcing services fee revenue	1.8		2.0
Other revenue	Other revenue	7.5		7.4		Other revenue	8.4		7.5
Total Financial Paper Products fee and other revenue	Total Financial Paper Products fee and other revenue	11.5		11.8		Total Financial Paper Products fee and other revenue	11.9		11.5
Investment revenue	Investment revenue	10.1		14.4		Investment revenue	2.0		10.1
Total revenue	Total revenue	$	290.9	$	315.4	Total revenue	$	310.1	$	290.9

Timing of revenue recognition:	Timing of revenue recognition:					Timing of revenue recognition:
Services and products transferred at a point in time	Services and products transferred at a point in time	$	266.9	$	288.1	Services and products transferred at a point in time	$	291.7	$	266.9
Products transferred over time	Products transferred over time	2.0		2.1		Products transferred over time	1.8		2.0
Total revenue from services and products	Total revenue from services and products	268.9		290.2		Total revenue from services and products	293.5		268.9
Investment revenue	Investment revenue	10.1		14.4		Investment revenue	2.0		10.1
Other revenue	Other revenue	11.9		10.8		Other revenue	14.6		11.9
Total revenue	Total revenue	$	290.9	$	315.4	Total revenue	$	310.1	$	290.9

Due to the short-term nature of the Company's services and products, the amount of contract assets and liabilities on the Condensed Consolidated Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, is negligible. Assets for unsettled money transfers, money orders and consumer payments are included in "Settlement assets" with a corresponding liability

Table of Contents

recorded in "Payment service obligations" on the Condensed Consolidated Balance Sheets. For more information on these assets and liabilities see Note 3 — Settlement Assets and Payment Service Obligations.

Note 16 — Related Parties

On March 7, 2021, the Company and Ripple signed an agreement to terminate, effective immediately, the commercial agreement between the parties that was originally entered into in June of 2019. The Company had ceased transacting under the commercial agreement in early December 2020. The Company did not resume transacting under the commercial agreement from that period through the termination date and as such, will not receive any market development fees in 2021.

Note 17 — Subsequent Events

DPA — On May 4, 2021, the Company, along with the Government filed a Joint Status Report (the “Joint Status Report”) with the United States District Court for the Middle District of Pennsylvania regarding the status of the DPA, as amended, previously entered into among the parties.

In ~~June 2019,~~the Joint Status Report, the parties confirmed that MoneyGram has satisfied its financial obligations under the DPA and that, pursuant to the terms of the DPA, the independent compliance monitor has certified to MoneyGram and the Government that MoneyGram’s anti-fraud and anti-money laundering compliance program, including its policies and procedures, are reasonably designed and implemented to detect and prevent fraud and money laundering and to comply with the Bank Secrecy Act.

OFAC — On April 21, 2021, the Company entered into a ~~multiple element arrangement~~settlement agreement with ~~Ripple Labs Inc. ("Ripple") consisting of two contracts:~~OFAC to settle all pending matters, which included a ~~securities purchase agreement (the “SPA”) and a commercial agreement. Pursuant to the SPA,~~nominal payment by the Company ~~issued~~to OFAC. In assessing this nominal penalty, OFAC acknowledged several mitigating factors including that MoneyGram discovered and ~~sold~~voluntarily disclosed the apparent violations as part of its ongoing efforts to ~~Ripple an aggregate of 6,237,523 shares of common stock~~improve its compliance program, MoneyGram’s remedial actions, significant investments in compliance-related functions, and warrants to purchase 5,957,600 shares of common stock (“Ripple Warrants”) pursuant to separate issuances of common stock and Ripple Warrants, one in June 2019 and another in November 2019. Through the commercial agreement, which is scheduled to expire on July 1, 2023, we utilize Ripple’s On Demand Liquidity ("ODL") platform (formerly known as xRapid), as well as XRP, to facilitate cross-border non-U.S. dollar exchange settlements.

~~Related party transactions are not necessarily indicative of an arm’s length transaction or comparable to a transaction that had been entered into~~MoneyGram’s cooperation with ~~independent parties.~~

The “Transaction and operations support” line on the Condensed Consolidated Statements of Operations includes market development fees of $16.6 million for the three months ended March 31, 2020. As of March 31, 2020, the “Other assets” line in the Condensed Consolidated Balance Sheets included accounts receivable and a cryptocurrency indefinite-lived intangible asset of $0.9 million and $3.1 million, respectively.OFAC’s investigation.

1922

Table of Contents

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is to provide an understanding of MoneyGram International, Inc.'s (“("MoneyGram,”" the ~~“Company,” “we,” “us”~~"Company," "we," "us" and ~~“our”~~"our") financial condition, results of operations and cash flows by focusing on changes in certain key measures. This MD&A is provided as a supplement to, and should be read in conjunction with, our Unaudited Condensed Consolidated Financial Statements and related Notes included in this Quarterly Report on Form 10-Q and the Consolidated Financial Statements and Notes included in ~~the Company's~~our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. This discussion contains forward-looking statements that involve risks and uncertainties. ~~MoneyGram’s~~MoneyGram's actual results could differ materially from those anticipated due to various risks and factors discussed ~~below~~above under “Cautionary Statements Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report on Form ~~10-Q.~~10-Q and in our 2020 Form 10-K, as well as any additional risk factors that may be described in our other periodic filings with the SEC from time to time.

The comparisons presented in this MD&A refer to the same period in the prior year, unless otherwise noted. This MD&A is organized in the following sections:

•Overview

•Results of Operations

•Liquidity and Capital Resources

•Critical Accounting Policies and Estimates

•~~Cautionary Statements Regarding Forward-Looking Statements~~

OVERVIEW

MoneyGram is a global leader in cross-border ~~peer-to-peer~~P2P payments and money transfers. Our consumer-centric capabilities enable the quick and affordable transfer of money to family and friends around the world. Whether through online and mobile platforms, integration with mobile wallets, ~~a kiosk,~~kiosks, or any one of the hundreds of thousands of agent locations in ~~approximately~~over 200 countries and territories, with ~~over 70 countries~~94 now digitally enabled, the innovative MoneyGram platform connects consumers in ways designed to be convenient for them. In the U.S. and in select countries and territories, we also provide bill payment services, issue money orders and process official checks. We primarily offer our services and products through third-party agents and ~~directly to consumers~~ through our direct-to-consumer digital ~~solutions.~~business. Third-party agents include retail chains, independent retailers, post offices and financial institutions. Digital solutions include moneygram.com, mobile solutions, ~~fintech~~virtual agents, account deposit and ~~digital partners,~~ wallets, card solutions such as Visa Direct and ~~account deposit~~kiosk-based services. MoneyGram also has a limited number of Company-operated retail locations.

We manage our revenue and related commissions expense through two reporting segments: Global Funds Transfer and Financial Paper Products. The Global Funds Transfer segment provides global money transfer services in more than ~~380,000~~410,000 agent locations. Our global money transfer services are our primary revenue driver, accounting for ~~88%~~92% of total revenue for the three months ended March 31, ~~2020.~~2021. The Global Funds Transfer segment also provides bill payment services to consumers through substantially all of our money transfer agent locations in the U.S., at certain agent locations in select Caribbean and European countries and through our digital solutions. The Financial Paper Products segment provides money order services to consumers through retail locations and financial institutions located in the U.S. and Puerto Rico and provides official check services to financial institutions in the U.S. Corporate expenses that are not related to our segments’ performance are excluded from operating income for Global Funds Transfer and Financial Paper Products segments.

COVID-19 Update

General Economic Conditions and MoneyGram Impact

~~Over~~The global spread and unprecedented impact of COVID-19 is complex and ever-evolving. In March 2020, the ~~past few months,~~World Health Organization declared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak reached all of the regions in which we do business. Since the outbreak, we have seen the profound ~~impact the outbreak of COVID-19~~effect it is having on human health, the global economy and society at large. Public and private sector policies aimed at reducing the transmission of COVID-19 have varied significantly ~~across~~in different regions of the ~~globe~~world, but have resulted in ~~stay-at-home~~shelter-in-place orders and the mandatory closing of ~~retail establishments~~various businesses across many of the countries in which we operate.

~~MoneyGram observed a decline in transaction volume~~It is impossible to predict the scope and ~~related revenue in its walk-in channel in the middle~~duration of ~~March 2020 as~~ the impact of ~~mandatory closures and stay-at-home orders took effect. Many of our agents around~~ the ~~world were forced to suspend operations due to mandatory government closure orders. In addition, demand for money transfer services~~COVID-19 pandemic as the situation has ~~decreased as lower levels of economic activity and increases in unemployment have impacted consumers.~~

been different on a country by country basis. The impact of COVID-19 ~~for the remainder of the year~~in 2021 and beyond will depend ~~significantly~~ on the duration and ~~potential cyclicality~~severity of economic conditions resulting from the ~~health~~ crisis, ~~and the related~~its impact on public health, public policy actions, ~~additional~~expansion and duration of returns to lockdowns and shelter-in-place orders by governments, new initiatives ~~we undertake~~undertaken by the Company and changes in response to employee, market or regulatory needs or demands, the length and severity of the global economic slowdown, the rate and nature of any economic recovery and whether and how our customers change their behaviorsconsumer behavior over the ~~longer~~long term.

2023

Table of Contents

~~MoneyGram Response to COVID-19~~

The Company has been actively addressing the COVID-19 situation and its impact globally with a COVID Task Force working to mitigate the potential impacts to our people and business. MoneyGram has taken the following steps to preserve value and maintain continuity of operations in response to the pandemic:

•~~Implementing its global Business Continuity Plan;~~

•~~Establishing employee support initiatives including mandatory work from home arrangements;~~

•~~Reducing expenses and preserving cash by:~~

◦~~Suspending a majority of discretionary expenses not directly related to revenue-generating activity;~~

◦~~Reducing salaries of non-hourly employees, including executive officers and board of director cash retainers, by 20%;~~

◦~~Deferring employer Social Security tax payments as allowed by the Coronavirus Aid, Relief, and Economic Security (CARES) Act; and~~

◦~~Borrowing $23.0 million under the revolving credit facility to increase our cash position and preserve financial flexibility.~~

•~~Conducting proactive outreach to governmental and regulatory bodies;~~

•~~Proactively managing fraud prevention programs to protect consumers from COVID-19-related financial scams; and~~

•~~Alerting and directing consumers to the website and app, and encouraging direct-to-account transfers.~~

We continue to place a priority on business continuity and contingency planning, including for potential extended closures of any key agents or disruptions related to our contractual counterparties that might arise as a result of COVID-19. While we have not experienced material disruptions in our service offerings aside from ~~mandatory~~temporary agent location closures, it is possible that further disruptions could occur as the pandemic ~~continues, though we~~continues. We cannot reasonably estimate the potential impact or timing of those events, and we may not be able to mitigate such impact.

Business Environment and Recent Developments

~~Worldwide political and economic conditions remained highly dynamic,~~MoneyGram reported positive developments as ~~evidenced by political unrest in certain markets, currency controls in select countries and a volatile immigration environment. Given~~it nears the ~~global extent~~end of the ~~current political~~term of its DPA. On May 4, 2021, the Company, along with the Government filed the Joint Status Report with the United States District Court for the Middle District of Pennsylvania regarding the status of the DPA, as amended, previously entered into among the parties.

In the Joint Status Report, the parties confirmed that MoneyGram has satisfied its financial obligations under the DPA and ~~economic conditions, money transfer volumes~~that, pursuant to the terms of the DPA, the independent compliance monitor has certified to MoneyGram and the ~~average face value of~~Government that MoneyGram’s anti-fraud and anti-money laundering compliance program, including its policies and procedures, are reasonably designed and implemented to detect and prevent fraud and money ~~transfers continue~~laundering and to ~~be highly variable by corridor~~comply with the Bank Secrecy Act.

In addition, the Joint Status Report states that on May 10, 2021, MoneyGram, through its Chief Executive Officer and ~~country. The World Bank is predicting significant reductions in global remittance levels for the remainder of this year due~~Chief Compliance Officer, intends to certify to the ~~economic impact~~United States that the Company has fulfilled its obligations under the DPA, and that after the United States receives the required certifications from MoneyGram, and provided that the Company has otherwise complied with the DPA, the Government will move to dismiss the matter underlying the DPA within 45 days of ~~COVID-19.~~May 10, 2021.

The competitive environment continues to change as both established players and new, digital-only entrants work to innovate and deliver ~~a low cost~~an affordable and convenient customer experience to win market share. Our competitors include a small number of large money transfer and bill payment providers, financial institutions, banks and a large number of small niche money transfer service providers that serve select regions. We generally compete on the basis of customer experience, price, agent commissions, brand awareness, ~~customer experience~~ and convenience.

In 2018, the Company and Walmart announced the launch of Walmart2World, Powered by MoneyGram, a new white-label money transfer service that allows customers to send money from Walmart in the U.S. to any non-U.S. MoneyGram location. The lower price point of the white-label service has negatively impacted our revenue and operating income. On November 4, 2019, Walmart announced that the white-label money transfer service would be joined by other brands in becoming part of a marketplace of money transfer services at Walmart stores across the U.S. For the first quarter of 2020, the MoneyGram “powered by” white-label Walmart2World product represented approximately 9% of total revenue. In the first quarter of 2020, the Walmart marketplace impacted revenue but had a negligible impact on transaction volumes on a year-over-year basis.

As of March 31, ~~2020,~~2021, the Company ~~has~~had digital capabilities through which consumers can send and receive money in ~~over 70~~94 countries ~~across~~around the globe. Furthermore, the Company is expanding its online presence through the continued growth of its native application, which was available in 26 countries as of March 31, 2020. In the first quarter of 2020, the Company removed its kiosk-based services from its digital channel. Prior year amounts have been updated to reflect this change.world. Digital ~~solutions~~ revenue for the three months ended March 31, ~~2020~~2021 was ~~$33.0~~$60.4 million, or ~~13%~~21% of money transfer revenue, compared to ~~$28.3~~$34.1 million or ~~10% of~~13% for the same period in the prior year. Total digital money transfer ~~revenue, for the three months ended March 31, 2019. Total digital~~ transactions represented ~~18%~~31% and 19% of money transfer transactions for the three months ended March 31, ~~2020.~~2021 and 2020, respectively.

In 2019, we announced a commercial agreement with Ripple, which is scheduled to expire on July 1, 2023. The commercial agreement allows MoneyGram to utilize Ripple's ODL platform (formerly known as xRapid), as well as XRP, to facilitate foreign exchange trading. The Company is compensated by Ripple for developing and bringing trading volume and liquidity to

~~Table of Contents~~

foreign exchange markets, facilitated by the ODL platform, and providing a reliable level of foreign exchange trading activity. The Company anticipates that this partnership, at scale, could reduce our working capital needs in the future. The Company also expects that the partnership willWe continue to ~~positively impact EBITDA~~invest in innovative products and services, such as our leading mobile app and integrations with mobile wallets, and account deposit services, to position the Company to meet consumer needs. Furthermore, our partnership with Visa Direct provides consumers with additional choices on how to receive funds across a broader number of countries. We believe that combining our cash ~~flows during the term~~and digital capabilities enables us to differentiate against digital-only competitors who are not able to serve a significant portion of the ~~commercial agreement.~~remittance market that relies on cash.

On January 19, 2021, Walmart informed us of a new agreement that would enable Western Union money transfer, bill payment and money order services at U.S. Walmart locations. For the three months ended March 31, ~~2020,~~2021, Walmart international marketplace represented less than 9% of total revenue. Currently, it is difficult to predict exactly how Western Union's participation in the ~~Company received~~Walmart marketplace will impact current transaction volumes and profit margins. Any impact to financial results will depend on a ~~net benefit~~variety of ~~$12.1 million composed~~factors including the timing of ~~$16.6 million~~the rollout of ~~Ripple market development fees, which were partially offset by related transaction~~the Western Union products into Walmart Stores, how the products are placed at the point-of-sale and ~~trading expenses of $4.5 million, both of which were included in "Transaction and operations support" line on~~how the ~~Condensed Consolidated Statements of Operations.~~competitive price environment develops.

In addition to the ~~fourth quarter of 2019,~~changes in the ~~Company~~competitive environment, MoneyGram’s global compliance requirements have remained complex, which has affected our top line growth and profit margin in certain markets. We continue to enhance and automate our compliance tools to comply with various government and other regulatory programs around the world, as well as address Corridor-specific risks associated with fraud and money laundering.

On January 11, 2021, MoneyGram committed to an operational plan to reduce overall operating expenses, including the elimination of approximately ~~120~~110 positions across the Company and certain actions to reduce other ongoing operating expenses, including real estate-related expenses (the ~~“2019~~“2021 Organizational Realignment”). The ~~workforce reduction was~~actions are designed to streamline operations and structure the Company in a way that will be more agile and aligned around ~~our~~its plan to execute market-specific ~~strategies tailored~~strategies. The total expected cost of the 2021 Organizational Realignment is approximately $9.7 million, which includes approximately $6.2 million in one-time cash severance expenditures and $3.5 million in real estate-related and other cash expenditures. The Company expects the 2021 Organizational Realignment to ~~different segments.~~reduce operating expenses by approximately $18.0 million on an annualized basis. The workforce reduction portion of the 2021 Organizational Realignment 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~~2021 and the Company anticipates related ~~costs, all of which resulted in~~ cash expenditures ~~that were~~to be substantially paid out by the end of 2021.The Company’s estimates are based on a number of assumptions.Actual results may differ materially, and additional charges not currently expected may be incurred in connection with, or as a result of, the ~~first quarter~~2021 Organizational Realignment.

Table of Contents

On March 7, 2021, the Company and Ripple signed an agreement to terminate, effective immediately, the commercial agreement between the parties that was originally entered into in June of 2019. The Company had ceased transacting under the commercial agreement in early December 2020. ~~We expect~~The Company did not resume transacting under the ~~2019 Organizational Realignment to reduce annualized operating expenses by approximately $18.0 million beginning~~commercial agreement from that period through the termination date and as such, will not receive any market development fees in ~~2020.~~2021.

Anticipated Trends

This discussion of trends expected to impact our business in ~~2020~~2021 is based on information presently available and reflects certain assumptions, including assumptions regarding future economic conditions. Differences in actual economic conditions compared with our assumptions could have a material impact on our results. See “Cautionary Statements Regarding Forward-Looking Statements” and Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and Part I, Item 1A, Risks Factors of our 2020 Form 10-K for additional factors that could cause results to differ materially from those contemplated by the following forward-looking statements.

~~As a result of the uncertainty created by the COVID-19 pandemic,~~In 2021, MoneyGram focused on positioning the Company ~~is unable~~ to ~~predict whether~~better compete by building and expanding customer-direct capabilities, accelerating digital growth, expanding through partnerships, and modernizing operations.

Through 2021, we believe the ~~trends discussed below~~industry will continue ~~during~~to see a number of trends: the ~~remainder~~growth of digital transactions, aggressive pricing strategies, the ~~year. As a result~~importance of ~~COVID-19, we expect pricing pressure~~customer experience, and competition to be continuous challenges through 2020. Currency volatility, liquidity pressure on central banks, geopolitical volatility and pressure on labor markets may also continue to impact our business.continuing global economic weakness. To ~~position~~position the Company to respond to these trends, we are continuing to focus on our strategy to deliver a differentiated customer experience, ~~accelerate~~scale our digital ~~growth,~~properties, be the preferred partner for agents ~~and evaluate~~in cross-border transactions, capture new revenue ~~streams~~ by ~~pursuing business models~~monetizing our capabilities and have continuous improvement in the cost structure and efficiency of the ~~future.~~

~~From a digital channel perspective,~~Company. In 2021, we are focusing on new products and expanding our digital capabilities into new countries. In February 2020, the Company launched MoneyGram FastSend, a new service through which consumers can send money quickly and easily to their friend's mobile phone number via the MoneyGram website and mobile app.

~~In 2020, we expect to~~will continue to ~~enhance~~broaden our global ~~walk-in business across several key regions.~~ digital footprint through innovative digital partnerships while continuing to focus on enhancing our direct to account reach and real-time deposit capabilities.

In the first quarter of ~~2020, we signed~~2021, the Company announced the following:

•The expansion of our Visa Direct relationship through Checkout.com. The new partnership provides our consumers with near real-time deposit capabilities to Visa debit card holders in 25 countries and 575 Corridors.

•The launch of a real-time peer-to-peer payment solution to Vietnam with our partnership with ~~EBIX Inc.~~Visa, Sacombank and other leading bank across the country, enabling customers to ~~become~~transfer money from the ~~Company’s exclusive walk-in provider~~United States, United Kingdom and 18 European countries.

•A five-year extension to our partnership with Ooredoo Qatar, the leading telecommunications operator in ~~India.~~Qatar. The renewal enables MoneyGram customers to continue to send money in near real-time to family and friends through Ooredoo Money Wallet, a virtual account that allows customers to easily deposit, access or withdraw money.

•We signed an agreement to launch our leading international money transfer capabilities on Pay+, a mobile wallet powered by Ooredoo Oman and the National Bank of Oman. This partnership will ~~provide~~give customers the ~~Company~~ability to use the mobile wallet to transfer money in near real-time with ~~significantly increased reach~~access to the MoneyGram global distribution network.

•The launch of MoneyGram as a Service, a new business line that enables other companies to access its leading global money transfer network through its powerful API-driven infrastructure and best-in-class technology. With this launch, enterprise customers can now leverage the Company's core capabilities as productized service offerings to meet their various business needs and quickly add services and scale.

We expect pricing pressure and competition to be continuous challenges through 2021. Currency volatility, liquidity pressure on central banks, immigration limitations, and pressure on labor markets in ~~the rural areas of India, the world’s largest receive market. Additionally, we have signed a strategic partnership with LuLu Money~~specific countries may also continue to ~~extend the Company’s network in the Asia-Pacific region and Oman.~~impact our business.

For our Financial Paper Products segment, we expect the decline in overall paper-based transactions to continue primarily due to continued gradual migration by customers to other payment methods. Our investment revenue, which consists primarily of interest income generated through the investment of cash balances received from the sale of our Financial Paper Products, is dependent on the prevailing interest rate ~~environment.~~environment in the United States. The Company would see a positive impact on its investment revenue if U.S. interest rates rise, and conversely, a negative impact if interest rates decline. ~~The decline in interest-rates due to the COVID-19 pandemic has negatively impacted our investment revenue.~~

Table of Contents

Financial Measures and Key Metrics

This Quarterly Report on Form 10-Q includes financial information prepared in accordance with U.S. GAAP as well as certain non-GAAP financial measures that we use to assess our overall performance.

U.S. GAAP Measures — We utilize certain financial measures prepared in accordance with U.S. GAAP to assess the Company's overall performance. These measures include fee and other revenue, ~~fee~~commissions and other ~~commissions~~fee expense, fee and other revenue less commissions, gross profit, operating income and operating margin.

Non-GAAP Measures — Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with U.S. GAAP. We strongly encourage investors and stockholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. While we believe that these metrics enhance investors' understanding of our business, these metrics

~~Table of Contents~~

are not necessarily comparable with similarly named metrics of other companies. The following are non-GAAP financial measures we use to assess our overall performance:

EBITDA (Earnings before interest, taxes, depreciation and amortization, including agent signing bonus amortization).

Adjusted EBITDA (EBITDA adjusted for certain significant items) — Adjusted EBITDA does not reflect cash requirements necessary to service interest or principal payments on our indebtedness or tax payments that may result in a reduction in cash available.

Adjusted Free Cash Flow (Adjusted EBITDA less cash interest, cash taxes, cash payments for capital expenditures and cash payments for agent signing bonuses) — Adjusted Free Cash Flow does not reflect cash payments related to the adjustment of certain significant items in Adjusted EBITDA.

Constant Currency — Constant currency metrics assume that amounts denominated in non-U.S. dollars are translated to the U.S. dollar at rates consistent with those in the prior year.

~~The Company utilizes specific terms related to our business throughout this document, including the following:~~

~~Corridor~~— ~~With regard to a money transfer transaction, the originating "send" location and the designated "receive" location are referred to as a corridor.~~

~~Corridor mix~~— ~~The relative impact of increases or decreases in money transfer transaction volume in each corridor versus the comparative prior period.~~

~~Face value~~— ~~The principal amount of each completed transaction, excluding any fees related to the transaction.~~

~~Non-U.S. Dollars~~— The impact of non-U.S. dollar exchange rate fluctuations on our 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. We use this method 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.

~~Walk-In Channel~~ ~~— Transactions in which both the send transaction and the receive transaction occur at one of our physical agent locations.~~

~~Digital Channel~~ — Transactions in which either the send transaction, the receive transaction, or both occur through one of our digital solutions such as moneygram.com, mobile solutions, fintech and digital partners, wallets or account deposit services.

2326

Table of Contents

RESULTS OF OPERATIONS

The following table is a summary of the results of operations:


		Three Months Ended March 31,							Three Months Ended March 31,
(Amounts in millions, except percentages)	(Amounts in millions, except percentages)	2020		2019		% Change		(Amounts in millions, except percentages)	2021		2020		% Change
Revenue	Revenue							Revenue
Fee and other revenue	Fee and other revenue	$	280.8	$	301.0	(7)	%	Fee and other revenue	$	308.1	$	280.8	10	%
Investment revenue	Investment revenue	10.1		14.4		(30)	%	Investment revenue	2.0		10.1		(80)	%
Total revenue	Total revenue	290.9		315.4		(8)	%	Total revenue	310.1		290.9		7	%
Expenses
Fee and other commissions expense		143.2		149.6		(4)	%
Cost of revenue								Cost of revenue
Commissions and other fee expense								Commissions and other fee expense	149.9		143.2		5	%
Investment commissions expense	Investment commissions expense	3.0		6.3		(52)	%	Investment commissions expense	0.2		3.0		(93)	%
Direct transaction expense	Direct transaction expense	8.2		5.0		64	%	Direct transaction expense	15.2		8.2		85	%
Total commissions and direct transaction expenses		154.4		160.9		(4)	%
Total cost of revenue								Total cost of revenue	165.3		154.4		7	%
Gross profit								Gross profit	144.8		136.5		6	%
Operating expenses								Operating expenses
Compensation and benefits	Compensation and benefits	53.4		59.4		(10)	%	Compensation and benefits	62.2		53.4		16	%
Transaction and operations support	Transaction and operations support	38.0		52.1		(27)	%	Transaction and operations support	43.4		38.0		14	%
Occupancy, equipment and supplies	Occupancy, equipment and supplies	14.9		15.4		(3)	%	Occupancy, equipment and supplies	15.5		14.9		4	%
Depreciation and amortization	Depreciation and amortization	17.1		19.0		(10)	%	Depreciation and amortization	15.3		17.1		(11)	%
Total operating expenses	Total operating expenses	277.8		306.8		(9)	%	Total operating expenses	136.4		123.4		11	%
Operating income	Operating income	13.1		8.6		52	%	Operating income	8.4		13.1		(36)	%
Other expenses	Other expenses							Other expenses
Interest expense	Interest expense	23.8		13.9		71	%	Interest expense	22.3		23.8		(6)	%
Other non-operating expense	Other non-operating expense	1.1		1.6		(31)	%	Other non-operating expense	1.0		1.1		(9)	%
Total other expenses	Total other expenses	24.9		15.5		61	%	Total other expenses	23.3		24.9		(6)	%
Loss before income taxes	Loss before income taxes	(11.8)		(6.9)		71	%	Loss before income taxes	(14.9)		(11.8)		26	%
Income tax expense	Income tax expense	9.7		6.6		47	%	Income tax expense	0.5		9.7		(95)	%
Net loss	Net loss	$	(21.5)	$	(13.5)	59	%	Net loss	$	(15.4)	$	(21.5)	(28)	%

Table of Contents

Revenues

The following table is a summary of the Company's revenues:


		Three Months Ended March 31,									Three Months Ended March 31,
(Amounts in millions, except percentages)	(Amounts in millions, except percentages)	2020		Percent of Total Revenue		2019		Percent of Total Revenue		(Amounts in millions, except percentages)	2021		Percent of Total Revenue		2020		Percent of Total Revenue
Global Funds Transfer fee and other revenue	Global Funds Transfer fee and other revenue	$	269.3	93	%	$	289.2	92	%	Global Funds Transfer fee and other revenue	$	296.2	95	%	$	269.3	93	%
Financial Paper Product fee and other revenue	Financial Paper Product fee and other revenue	11.5		4	%	11.8		4	%	Financial Paper Product fee and other revenue	11.9		4	%	11.5		4	%
Investment revenue	Investment revenue	10.1		3	%	14.4		5	%	Investment revenue	2.0		1	%	10.1		3	%

Total revenue	Total revenue	$	290.9	100	%	$	315.4	100	%	Total revenue	$	310.1	100	%	$	290.9	100	%

For the three months ended March 31, ~~2020,~~2021, total revenue declined when compared to the prior reporting period, primarily due to the decline in the Global Funds Transfer fee and other revenue, as a result of agent locations closing due to COVID-19, the Walmart2World service and pricing pressure due to increased ~~competition. For the three months ended March 31, 2020, Financial Paper Product fee and other revenue remained relatively flat when compared to 2019.~~by $19.2 million. See the "Segments Results" section below for a detailed discussion of revenues by segment.

Cost of Revenue

The following table is a summary of the cost of revenue:


	Three Months Ended March 31,
(Amounts in millions, except percentages)		2021		Percent of Total Revenue		2020		Percent of Total Revenue
Commissions and other fee expense		$	149.9	48	%	$	143.2	49	%
Investment commissions expense		0.2		—	%	3.0		1	%
Direct transaction expense		15.2		5	%	8.2		3	%
Total cost of revenue		$	165.3	53	%	$	154.4	53	%

For the three months ended March 31, ~~2020, investment~~2021, total cost of revenue ~~decreased primarily~~increased by $10.9 million due to ~~lower interest rates when compared to~~an increase in commissions and direct transaction expenses which are discussed in the ~~prior period.~~"

~~Table of Contents~~Segments Results

" section below.

Operating Expenses

The following table is a summary of the operating expenses:

Three Months Ended March 31,
(Amounts in millions, except percentages) 2020 Percent of Total Revenue 2019 Percent of Total Revenue
Total commissions and direct transaction expenses $ 154.4 53 % $ 160.9 51 %
Compensation and benefits 53.4 18 % 59.4 19 %
Transaction and operations support 38.0 13 % 52.1 17 %
Occupancy, equipment and supplies 14.9 5 % 15.4 5 %
Depreciation and amortization 17.1 6 % 19.0 6 %
Total operating expenses $ 277.8 95 % $ 306.8 97 %

For the three months ended March 31, 2020, total operating expenses as a percentage of total revenue declined when compared to the prior period, primarily due to a decrease in transaction and operations support driven by the benefit from the market development fees received from Ripple and the realization of cost efficiencies from our 2019 Organizational Realignment.

~~Total Commissions and Direct Transaction Expenses~~


	Three Months Ended March 31,
(Amounts in millions, except percentages)		2021		Percent of Total Revenue		2020		Percent of Total Revenue
Compensation and benefits		$	62.2	20	%	$	53.4	18	%
Transaction and operations support		43.4		14	%	38.0		13	%
Occupancy, equipment and supplies		15.5		5	%	14.9		5	%
Depreciation and amortization		15.3		5	%	17.1		6	%
Total operating expenses		$	136.4	44	%	$	123.4	42	%

For the three months ended March 31, ~~2020,~~2021, total ~~commissions and direct transaction~~operating expenses ~~as a percentage of total revenue~~ increased ~~when compared to the prior period, primarily due to the increase in direct transaction expense.~~by $13.0 million. See the "Segments Results" section below for more ~~information on commissions and direct transaction expense by segment.~~information.

Compensation and Benefits

Compensation and benefits include salaries and benefits, management incentive programs, related payroll taxes and other employee related costs. The following table is a summary of the change in compensation and benefits from 2019 to 2020:


~~(Amounts in millions)~~	~~Three Months Ended~~
~~For the period ended March 31, 2019~~	$	~~59.4~~
~~Change resulting from:~~
~~Restructuring and reorganization costs~~	~~(2.6)~~
~~Net salaries, related payroll taxes and cash incentive compensation~~	~~(1.2)~~
~~Employee stock-based compensation~~	~~(0.6)~~

~~Employee capitalized software development~~	~~(0.5)~~
~~Impact from changes in exchange rates~~	~~(0.5)~~
~~Other~~	~~(0.6)~~
~~For the period ended March 31, 2020~~	$	~~53.4~~

For the three months ended March 31, ~~2020,~~2021, compensation and benefits ~~decreased~~increased by $8.8 million primarily ~~due to a reduction in headcount and the completion of the restructuring and reorganization activities.~~

~~Table of Contents~~

driven by severance expenses.

Transaction and Operations Support

Transaction and operations support primarily includes marketing, professional fees and other outside services, telecommunications, agent support costs, including forms related to our products, non-compensation employee costs, including training, travel and relocation costs, non-employee director stock-based compensation expense, bank charges, the impact of non-U.S. dollar exchange rate movements on our monetary transactions and assets and liabilities denominated in a currency other than the U.S. dollar, and Ripple market development fees and related transaction and trading expenses.

~~The following table is a summary~~

Table of ~~the change in transaction and operations support from 2019 to 2020:~~Contents


~~(Amounts in millions)~~	~~Three Months Ended~~
~~For the period ended March 31, 2019~~	$	~~52.1~~
~~Change resulting from:~~
~~Market development fees~~	~~(16.6)~~
~~Transaction and trading expenses~~	~~4.5~~
~~Marketing costs~~	~~(3.0)~~
~~Outsourcing, independent contractor and consultant costs~~	~~(2.4)~~
~~Provision for loss~~	~~2.1~~
~~Bank charges~~	~~0.9~~
~~Other~~	~~0.4~~
~~For the period ended March 31, 2020~~	$	~~38.0~~

For the three months ended March 31, ~~2020,~~2021, transaction and operations support ~~decreased~~increased by $5.4 million primarily due to athe elimination of the $12.1 million net benefit from Ripple market development fees ~~which was partially offset by related transaction and trading expenses.~~generated for the same period in the prior year due to the halting of transactions under the commercial agreement with Ripple effective early December 2020.

Occupancy, Equipment and Supplies

Occupancy, equipment and supplies expense includes facilities rent and maintenance costs, software and equipment maintenance costs, freight and delivery costs and supplies.

For the three months ended March 31, ~~2020,~~2021, occupancy, equipment and supplies expense remained relatively ~~flat when compared to the prior period.~~flat.

Depreciation and Amortization

Depreciation and amortization includes depreciation on computer hardware and software, agent signage, point of sale equipment, capitalized software development costs, office furniture, equipment and leasehold improvements and amortization of intangible assets.

For ~~the~~ three months ended March 31, ~~2020,~~2021, depreciation and amortization decreased by ~~$1.9~~$1.8 million ~~when compared to the prior period~~primarily due to a decrease in ~~capital expenditures as a result of our migration to cloud computing.~~agent signage.

Segments Results

Global Funds Transfer

The following table sets forth our Global Funds Transfer segment results of operations ~~for the~~for the three months ended March ~~31:~~31, 2021:

Three Months Ended March 31,
(Amounts in millions) 2020 2019 2020 vs 2019
Money transfer revenue $ 255.9 $ 273.3 $ (17.4)
Bill payment revenue 13.4 15.9 (2.5)
Total Global Funds Transfer revenue $ 269.3 $ 289.2 $ (19.9)
Fee and other commissions and direct transaction expenses $ 151.3 $ 154.3 $ (3.0)

~~Table of Contents~~


	Three Months Ended March 31,
(Amounts in millions)		2021		2020		2021 vs 2020
Money transfer revenue		$	285.4	$	255.9	$	29.5
Bill payment revenue		10.8		13.4		(2.6)
Total Global Funds Transfer revenue		$	296.2	$	269.3	$	26.9

Commissions and other fee and direct transaction expenses		$	165.1	$	151.3	$	13.8

Money Transfer Revenue

~~The following table details the changes in money transfer fee and other revenue from 2019 to 2020:~~


~~(Amounts in millions)~~	~~Three Months Ended~~
~~For the period ended March 31, 2019~~	$	~~273.3~~
~~Change resulting from:~~
~~Average face value per transaction and pricing~~	~~(22.9)~~
~~Money transfer volume~~	~~4.5~~
~~Corridor mix~~	~~2.8~~
~~Impact from changes in exchange rates~~	~~(2.8)~~

~~Other~~	~~1.0~~
~~For the period ended March 31, 2020~~	$	~~255.9~~

For the three months ended March 31, ~~2020, the decrease in~~2021, money transfer ~~fee and other~~ revenue ~~was~~increased by $29.5 million, primarily ~~driven by the decrease in average face value per transaction and pricing, which was impacted by agent locations closing~~ due to ~~COVID-19, the Walmart2World service and pricing pressure from increased competition. The decrease was partially offset by~~ an increase in money transfer transaction volume ~~from an increase~~driven by the growth of our Digital Channel and the impact of foreign exchange rates, partially offset by the decrease in ~~moneygram.com transactions.~~fees per transaction.

Bill Payment Revenue

For thethree months ended March 31, 2021, bill payment revenue decreased by $2.6 million, or 19%, due to increased competition in the Walmart marketplace and continued impact of the COVID-19 pandemic.

Commissions and Other Fee ~~Revenue~~Expense

For the three months ended March 31, ~~2020, bill payment fee~~2021, commissions and other ~~revenue decreased~~fee expense of $149.9 million, increased by ~~$2.5~~$6.7 million, ~~or 16% when compared to the prior period due to increased competition and the impact of COVID-19.~~

~~Fee and Other Commissions Expense~~

~~The following table details the changes in fee and other commissions expense for the Global Funds Transfer segment from 2019 to 2020:~~


~~(Amounts in millions)~~	~~Three Months Ended~~
~~For the period ended March 31, 2019~~	$	~~149.3~~
~~Change resulting from:~~
~~Money transfer revenue~~	~~(7.0)~~
~~Money transfer corridor and agent mix~~	~~2.0~~
~~Impact from changes in exchange rates~~	~~(1.3)~~
~~Signing bonuses~~	~~1.0~~
~~Bill payment revenue and commission rates~~	~~(0.9)~~
~~For the period ended March 31, 2020~~	$	~~143.1~~

~~For the three months ended March 31, 2020, fee and other commissions decreased~~ primarily due to ~~decreases~~an increase in walk-in money transfer ~~revenue from the decline in pricing discussed above and the impact from changes in exchange rates. The decrease was partially offset by favorable money transfer corridor and agent mix.~~services as restrictions on mobility eased.

Direct Transaction Expense

For the three months ended March 31, ~~2020,~~2021, direct transaction expense of ~~$8.2~~$15.2 million, increased by ~~$3.2~~$7.0 million, ~~when compared to the three months ended March 31, 2019,~~primarily due to ~~an increase~~higher volumes in ~~moneygram.com transactions.~~transactions associated with our Digital Channel.

Table of Contents

Financial Paper Products

The following table sets forth our Financial Paper Products segment results of operations:

Three Months Ended March 31,
(Amounts in millions) 2020 2019 2020 vs 2019
Money order revenue $ 12.1 $ 13.9 $ (1.8)
Official check revenue 9.5 12.3 (2.8)
Total Financial Paper Products revenue $ 21.6 $ 26.2 $ (4.6)
Commissions expense $ 3.1 $ 6.6 $ (3.5)

~~Table of Contents~~

~~Financial Paper Products revenue decreased by $4.6 million or 18% during the three months ended March 31, 2020, primarily due to the decline in investment revenue.~~


	Three Months Ended March 31,
(Amounts in millions)		2021		2020		2021 vs 2020
Money order revenue		$	10.4	$	12.1	$	(1.7)
Official check revenue		3.5		9.5		(6.0)
Total Financial Paper Products revenue		$	13.9	$	21.6	$	(7.7)

Investment commissions expense		$	0.2	$	3.1	$	(2.9)

For the three months ended March 31, ~~2020,~~2021, Financial Paper Products revenue decreased by $7.7 million, or 36%, primarily due to a decline in investment revenue as a result of substantially lower prevailing interest rates driven by a reduction in the federal funds rate in response to the COVID-19 pandemic.

For the three months ended March 31, 2021, commissions expense for Financial Paper Products decreased by ~~$3.5 million when compared~~94%, due to the ~~prior period, due to a decrease~~decline in investment commissions ~~expense.~~expense driven by lower interest rates.

Operating Income and Operating Margin

The following table provides a summary overview of operating income and operating margin:

Three Months Ended March 31,
(Amounts in millions, except percentages) 2020 2019 2020 vs 2019
Operating income:
Global Funds Transfer $ 6.7 $ 1.1 $ 5.6
Financial Paper Products 7.0 8.2 (1.2)
Total segment operating income 13.7 9.3 4.4
Other (0.6) (0.7) 0.1
Total operating income $ 13.1 $ 8.6 $ 4.5
Total operating margin 4.5 % 2.7 % 1.8 %
Global Funds Transfer 2.5 % 0.4 % 2.1 %
Financial Paper Products 32.4 % 31.3 % 1.1 %

For the three months ended March 31, 2020, the Global Funds Transfer segment operating income and margin increased when compared to the three months ended March 31, 2019, by $5.6 million and 2.1%, respectively. The increases in operating income and margin were primarily due to the decrease in operating expenses resulting from the benefit of the market development fees received from Ripple, which were partially offset by the decline in money transfer fee and other revenue.

For the three months ended March 31, 2020, the Financial Paper Products segment operating income decreased when compared to the three months ended March 31, 2019, primarily due to the decrease in investment revenue. The Financial Paper Products operating margin for the three months ended March 31, 2020 increased when compared to the prior year period primarily from the decrease in investment commissions expense.

~~For the three months ended March 31, 2020, the Company's other operating loss remained relatively flat.~~

~~Other Expenses~~


	Three Months Ended March 31,
(Amounts in millions, except percentages)		2021			2020			2021 vs 2020
Operating income:
Global Funds Transfer		$	6.0		$	6.7		$	(0.7)
Financial Paper Products		2.5			7.0			(4.5)
Total segment operating income		8.5			13.7			(5.2)
Other		(0.1)			(0.6)			0.5
Total operating income		$	8.4		$	13.1		$	(4.7)

Total operating margin		2.7		%	4.5		%	(1.8)		%
Global Funds Transfer		2.0		%	2.5		%	(0.5)		%
Financial Paper Products		18.0		%	32.4		%	(14.4)		%

For the three months ended March 31, ~~2020, total other expenses increased~~2021, operating income for the Global Funds Transfer and Financial Paper Products segments decreased by ~~$9.4~~$5.2 million, ~~primarily due to an increase in interest expense~~ as a result of the ~~credit facilities entered into in June 2019, which are~~factors discussed in ~~Note 7 —~~ the "~~Debt~~ Segments Resultsof" section above.

For the ~~Notes~~three months ended March 31, 2021, other operating loss decreased due to ongoing cost-savings initiatives.

Other Expenses

For the ~~Condensed Consolidated Financial Statements.~~three months ended March 31, 2021, total other expenses decreased by $1.6 million, primarily due the decrease in interest expense driven by principal payments on our indebtedness.

Income Taxes


(Amounts in millions)	Three Months Ended March 31,
		2021		2020
Provision for income taxes		$	0.5	$	9.7

For the three months ended March 31, 2019, the Company recognized an income tax expense of $6.6 million on a pre-tax loss of $6.9 million primarily due to non-deductible expenses, U.S. taxation of foreign earnings, the reversal ofexcess tax benefits on share-based ~~compensation, partially offset by U.S.~~compensation. See Note 11 — Income Taxes for additional information related to our unrecognized tax credits net of valuation allowance. Additionally, as a result of the issuance of the final Section 965 regulations by the U.S. Treasury Department and the IRS on January 15, 2019, the Company recorded a discrete tax expense of $0.7 million for an increase in its one-time transition tax.benefits.

2830

Table of Contents

EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow and Constant Currency

We believe that EBITDA (earnings before interest, taxes, depreciation and amortization, including agent signing bonus amortization), Adjusted EBITDA (EBITDA adjusted for certain significant items), Adjusted Free Cash Flow (Adjusted EBITDA less cash interest, cash taxes, cash payments for capital expenditures and cash payments for agent signing bonuses) and constant currency measures (which assume that amounts denominated in non-U.S. dollars are translated to the U.S. dollar at rates consistent with those in the prior year) provide useful information to investors because they are indicators of the strength and performance of our 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. In addition, our debt agreements require compliance with covenants that incorporate a financial measure similar to Adjusted EBITDA.

EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow and constant currency are financial and performance measures used by management in reviewing results of operations, forecasting, allocating resources and establishing employee incentive programs. We also present Adjusted EBITDA growth, constant currency adjusted, which provides information to investors regarding MoneyGram’s performance without the effect of non-U.S. dollar exchange rate fluctuations year-over-year.

Although we believe that EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow and constant currency measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered in isolation or as substitutes for the accompanying GAAP financial measures. These metrics are not necessarily comparable with similarly named metrics of other companies. (Non-GAAP Measures)

The following table is a reconciliation of our non-GAAP financial measures to the related GAAP financial measures:

Three Months Ended March 31,
(Amounts in millions) 2020 2019 Change
Loss before income taxes $ (11.8) $ (6.9) $ (4.9)
Interest expense 23.8 13.9 9.9
Depreciation and amortization 17.1 19.0 (1.9)
Signing bonus amortization 12.5 11.7 0.8
EBITDA 41.6 37.7 3.9
Significant items impacting EBITDA:
Direct monitor costs 4.8 4.1 0.7
Compliance enhancement program 2.0 1.5 0.5
Stock-based, contingent and incentive compensation 2.0 2.6 (0.6)
Restructuring and reorganization costs 0.5 3.5 (3.0)
Legal and contingent matters 0.4 0.6 (0.2)
Severance and related costs 0.2 0.1 0.1
Adjusted EBITDA $ 51.5 $ 50.1 $ 1.4
Adjusted EBITDA change, as reported 3 %
Adjusted EBITDA change, constant currency adjusted 4 %
Adjusted EBITDA $ 51.5 $ 50.1 $ 1.4
Cash payments for interest (17.6) (12.8) (4.8)
Cash payments for taxes, net of refunds (2.1) (1.2) (0.9)
Cash payments for capital expenditures (10.1) (12.7) 2.6
Cash payments for agent signing bonuses (25.0) (10.1) (14.9)
Adjusted Free Cash Flow $ (3.3) $ 13.3 $ (16.6)

~~For the three months ended March 31, 2020, the Company generated EBITDA of $41.6 million and Adjusted EBITDA of $51.5 million.~~ EBITDA and Adjusted EBITDA increased when compared to the same period in 2019 because of cost saving initiatives, which were partially offset by the decrease in fee and other revenue. Additionally, EBITDA and Adjusted EBITDA include the impact from the net benefit of $12.1 million, composed of ~~$16.6 million~~ of ~~Ripple market development fees, which were partially offset by related transaction and trading expenses of $4.5 million~~.

~~Table of Contents~~

~~For the three months ended March 31, 2020, Adjusted Free Cash Flow decreased by $16.6 million when compared to the same periods in 2019.~~ ~~The decline was primarily due to the increase in cash payments for interest and signing bonuses.~~


	Three Months Ended March 31,
(Amounts in millions, except percentages)		2021			2020		Change
Income (loss) before income taxes		$	(14.9)		$	(11.8)	$	(3.1)
Interest expense		22.3			23.8		(1.5)
Depreciation and amortization		15.3			17.1		(1.8)
Signing bonus amortization		14.3			12.5		1.8
EBITDA		37.0			41.6		(4.6)
Significant items impacting EBITDA:
Restructuring and reorganization costs		5.9			0.5		5.4
Direct monitor costs		3.8			4.8		(1.0)
Stock-based, contingent and incentive compensation		1.8			2.0		(0.2)
Compliance enhancement program		1.1			2.0		(0.9)
Severance and related costs		0.2			0.2		—
Legal and contingent matters		0.1			0.4		(0.3)


Adjusted EBITDA		$	49.9		$	51.5	$	(1.6)

Adjusted EBITDA change, as reported		(3)		%
Adjusted EBITDA change, constant currency adjusted		(11)		%

Adjusted EBITDA		$	49.9		$	51.5	$	(1.6)
Cash payments for interest		(11.9)			(17.6)		5.7
Cash payments for taxes, net of refunds		2.7			(2.1)		4.8
Cash payments for capital expenditures		(11.2)			(10.1)		(1.1)
Cash payments for agent signing bonuses		(13.0)			(25.0)		12.0
Adjusted Free Cash Flow		$	16.5		$	(3.3)	$	19.8

See "Results of ~~Operations~~Operations"" and "Analysis of Cash ~~Flows~~Flows"" sections for additional information ~~regarding~~regarding these changes.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

We have various resources available for purposes of managing liquidity and capital needs, including our investment portfolio, credit facilities and letters of credit. We refer to our cash and cash equivalents, settlement cash and cash equivalents, interest-bearing investments and available-for-sale investments collectively as our ~~“investment~~"investment portfolio.”" The Company utilizes cash and cash equivalents in various liquidity and capital assessments.

Cash and Cash Equivalents, Settlement Assets and Payment Service Obligations

The following table shows the components of the Company's cash and cash equivalents and settlement assets:


(Amounts in millions)	(Amounts in millions)	March 31, 2020		December 31, 2019		(Amounts in millions)	March 31, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	131.0	$	146.8	Cash and cash equivalents	$	152.8	$	196.1
Settlement assets:	Settlement assets:					Settlement assets:
Settlement cash and cash equivalents	Settlement cash and cash equivalents	1,371.6		1,531.1		Settlement cash and cash equivalents	1,846.4		1,883.2
Receivables, net	Receivables, net	579.5		715.5		Receivables, net	824.9		825.0
Interest-bearing investments	Interest-bearing investments	989.1		985.9		Interest-bearing investments	992.3		991.2
Available-for-sale investments	Available-for-sale investments	4.3		4.5		Available-for-sale investments	3.4		3.5
Total settlement assets						Total settlement assets	$	3,667.0	$	3,702.9
		$	2,944.5	$	3,237.0
Payment service obligations	Payment service obligations	$	(2,944.5)	$	(3,237.0)	Payment service obligations	$	(3,667.0)	$	(3,702.9)

Our primary sources of liquidity include cash flows generated by the sale of our payment instruments, our cash and cash equivalents and interest-bearing investment balances, and proceeds from our investment portfolio. Our primary operating liquidity needs are related to the settlement of payment service obligations to our agents and financial institution customers, general operating expenses and debt service.

To meet our payment service obligations at all times, we must have sufficient highly-liquid assets and be able to move funds globally on a timely basis. On average, we receive in and pay out a similar amount of funds on a daily basis to collect and settle the principal amount of our payment instruments sold and related fees and commissions with our end-consumers and agents. This pattern of cash flows allows us to settle our payment service obligations through existing cash balances and ongoing cash generation rather than liquidating investments or utilizing ~~the remaining balance under~~ our First Lien Revolving Credit Facility. We have historically generated, and expect to continue generating, sufficient cash flows from daily operations to fund ongoing operational needs.

We preposition cash in various countries and currencies to facilitate settlement of transactions. We also maintain funding capacity beyond our daily operating needs to provide a cushion through the normal fluctuations in our payment service obligations, as well as to provide working capital for the operational and growth requirements of our business. We believe we have sufficient liquid assets and funding capacity to operate and grow our business for the next 12 months. Should our liquidity needs exceed our operating cash flows, we believe that external financing sources, including ~~the remaining~~ availability under our credit facilities, will be sufficient to meet our anticipated funding requirements.

Cash and Cash Equivalents and Interest-bearing Investments

To ensure we maintain adequate liquidity to meet our payment service obligations at all times, we keep a significant portion of our investment portfolio in cash and cash equivalents and interest-bearing investments at financial institutions rated A- or better by two of the following three rating agencies: ~~Moody’s Investor Service (“Moody’s”), Standard & Poor’s (“~~Moody's, S~~&P”)~~&P and ~~Fitch Ratings, Inc.;~~Fitch; and in AAA rated U.S. government money market funds. If the rating agencies have split ratings, the Company uses the lower of the highest two out of three ratings across the agencies for disclosure purposes. If the institution has only two ratings, the Company uses the lower of the two ratings for disclosure purposes. As of March 31, ~~2020,~~2021, cash and cash equivalents (including unrestricted and settlement cash and cash equivalents) and interest-bearing investments totaled ~~$2.5~~$3.0 billion. Cash and cash equivalents consist of interest-bearing deposit accounts, non-interest-bearing transaction accounts and money market securities; interest-bearing investments consist of time deposits and certificates of deposit with maturities of up to 24 months.

~~Table of Contents~~

Available-for-sale Investments

Our investment portfolio includes ~~$4.3~~$3.4 million of available-for-sale investments as of March 31, ~~2020.~~2021. U.S. government agency residential mortgage-backed securities comprise ~~$3.5~~$2.8 million of our available-for-sale investments, while asset-backed and other securities compose the remaining ~~$0.8~~$0.6 million.

Table of Contents

Credit Facilities

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


(Amounts in millions, except percentages)	(Amounts in millions, except percentages)	March 31, 2020		December 31, 2019		(Amounts in millions, except percentages)	March 31, 2021		December 31, 2020
6.95% first lien revolving credit facility due 2022		$	23.0	$	—

7.00% first lien credit facility due 2023	7.00% first lien credit facility due 2023	640.2		641.8		7.00% first lien credit facility due 2023	$	633.7	$	635.3
13.00% second lien credit facility due 2024	13.00% second lien credit facility due 2024	254.6		251.4		13.00% second lien credit facility due 2024	254.6		254.6
Senior secured credit facilities	Senior secured credit facilities	917.8		893.2		Senior secured credit facilities	888.3		889.9
Unamortized debt issuance costs and debt discounts	Unamortized debt issuance costs and debt discounts	(40.3)		(42.9)		Unamortized debt issuance costs and debt discounts	(29.5)		(32.1)
Total debt, net	Total debt, net	$	877.5	$	850.3	Total debt, net	$	858.8	$	857.8

As of March 31, ~~2020,~~2021, the Company had ~~$23.0 million~~no borrowings ~~and~~and nominal outstanding letters of credit under its revolving credit facility and had ~~$11.9~~$34.9 million of availability. The First Lien Credit Agreement provides that in the event the ~~Company’s~~Company's cash balance exceeds ~~$130.0~~$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~~the 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~~$130.0 million after giving effect to such borrowing. As of March 31, ~~2020,~~2021, the Company had cash and cash equivalents of ~~$131.0~~$152.8 million. ~~The~~The effective interest rate on the ~~first lien credit facility decreased from 7.80% as of December 31, 2019, to~~First Lien Credit Facility remained flat and was 7.00% as of March 31, ~~2020, due to decreases in the Eurodollar rate.~~2021 and December 31, 2020. See Note 7 — Debt of the Notes to the Unaudited Condensed Consolidated Financial Statements for additional ~~disclosure~~disclosure related to the credit facilities.

Credit Ratings

As of March 31, ~~2020,~~2021, our credit ratings from ~~Moody’s~~Moody's and S&P were B3 with a negative outlook and B with a stable outlook, respectively. ~~In April 2020, S&P updated their outlook from stable to negative. Our~~The Company does not have rating triggers associated with its credit ~~facilities,~~agreements or its regulatory capital ~~requirements and other obligations are not linked or impacted by changes in our credit ratings.~~requirements.

Analysis of Cash Flows


		Three Months Ended March 31,									Three Months Ended March 31,
(Amounts in millions)	(Amounts in millions)	2020		2019		2020 vs 2019		(Amounts in millions)	2021		2020		2021 vs 2020
Net cash (used in) provided by operating activities		$	(26.4)	$	0.3	$	(26.7)
Net cash used in operating activities								Net cash used in operating activities	$	(26.9)	$	(26.4)	$	(0.5)
Net cash used in investing activities	Net cash used in investing activities	(10.1)		(12.7)		2.6		Net cash used in investing activities	(11.2)		(10.1)		(1.1)
Net cash provided by (used in) financing activities		20.7		(3.2)		23.9
Net cash (used in) provided by financing activities								Net cash (used in) provided by financing activities	(5.2)		20.7		(25.9)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	(15.8)	$	(15.6)	$	(0.2)	Net change in cash and cash equivalents	$	(43.3)	$	(15.8)	$	(27.5)

Cash Flows from Operating Activities

For the three months ended March 31, ~~2020,~~ 2021, net cash used in operating cash ~~decreased when compared to the prior period primarily due to an increase in payments for agent signing bonuses and the increase in cash payments for interest.~~activities remained relatively flat.

Cash Flows from Investing Activities

~~Items impacting~~For the three months ended March 31, 2021, net cash used in investing activities ~~for the three months ended March 31, 2020 and 2019, included~~increased, primarily due to an increase in capital ~~expenditures of $10.1 million and $12.7 million, respectively.~~expenditures.

Cash Flows from Financing Activities

During the three months ended March 31, ~~2020,~~2021, net cash ~~provided by~~used in financing activities increased, ~~by $23.9 million as a result of borrowing~~primarily due to no borrowings on our First Lien Revolving Credit ~~Facility and lower principal payments on debt.~~Facility.

3133

Table of Contents

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts and related disclosures in the Unaudited Condensed Consolidated Financial Statements. Actual results could differ from those estimates. On a regular basis, management reviews its accounting policies, assumptions and estimates to ensure that our financial statements are presented fairly and in accordance with GAAP. Our significant accounting policies are discussed in Note 2 — Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or complex. There were no changes to our critical accounting policies and estimates during the quarter ended March 31, ~~2020.~~2021. For further information regarding our critical accounting policies and estimates, refer to Part II, Item 7, “~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in the ~~Company’s Annual Report on~~Company's 2020 Form ~~10-K for the year ended December 31, 2019.~~10-K.

~~CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS~~RECENT ACCOUNTING PRONOUNCEMENTS

~~This Annual Report on Form 10-K and the documents incorporated by reference herein may contain forward-looking statements within the meaning~~See Note 1 — Description of the ~~Private Securities Litigation Reform Act~~Business and Basis 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,” “would,” “goals” and other similar expressions are intended to identify somePresentation 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 and are subject to certain risks, uncertainties and changes in circumstances due to a number of factors. These factors include, but are not limited to:

•the impact of the COVID-19 outbreak or future epidemics 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;~~

•~~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; litigation and regulatory proceedings involving us or our agents, 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;

•uncertainties relating to compliance with the 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;

•~~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 and our ability to maintain sufficient capital;

•~~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;~~

•~~our ability to manage risks associated with our international sales and operations, including exchange rates among currencies;~~

~~Table of Contents~~

•~~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;~~

•~~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~~Notes to the ~~operation of retail locations and the acquisition or start-up of businesses;~~Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for information regarding recent accounting pronouncements.

•~~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~~

•~~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 Annual Report on Form 10-K for the year ended December 31, 2019, as well as any additional risk factors that may be described in our other filings with the SEC from time to time.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk since December 31, ~~2019.~~2020. For further information on market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market ~~Risk”~~Risk in the ~~Company’s Annual Report on~~Company's 2020 Form ~~10-K for the year ended December 31, 2019.~~10-K.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report (the ~~“Evaluation Date”~~"Evaluation Date"), the Company carried out an evaluation, under the supervision and with the participation of management, including the ~~Company’s~~Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the ~~Company’s~~Company's disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~"Exchange Act")). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the ~~Company’s~~Company's disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in the ~~Company’s~~Company's internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended March 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the ~~Company’s~~Company's internal control over financial reporting.

3334

Table of Contents

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

A description of our legal proceedings is included in and incorporated by reference to Note 12 —Commitments and Contingencies of the Notes to the Unaudited Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report.

ITEM 1A. RISK FACTORS

The following risk factor ~~disclosure~~disclosures should be read in conjunction with the risk factors described in the ~~Company’s Annual Report on~~Company's 2020 Form 10-K ~~for~~and subsequent periodic filings with the ~~year ended December 31, 2019 (the “2019 10-K”). For further information, refer~~SEC. We are supplementing the risk factors previously disclosed in such filings to ~~Part I, Item 1A, "~~include the following updated risk factors:~~Risk Factors~~,"

An “ownership change” could limit our ability to utilize our net operating loss carryforwards and other tax attributes, which could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and other tax benefit carryforwards. We have entered into a Rights Plan to reduce the likelihood of an ownership change, but if the preferred share purchase rights were to be exercised pursuant to the Rights Plan, the market price of our common stock could be materially and adversely affected.

Federal tax laws impose restrictions on the utilization of net operating loss (“NOL”) carryforwards and other tax attributes in the ~~Company's 2019 10-K.~~event of an “ownership change” as defined by Section 382 of the Internal Revenue Code (“Section 382”). A corporation generally will experience an “ownership change” if the percentage of the corporation’s stock owned by its “5-percent shareholders,” as defined in Section 382, increases by more than 50 percentage points over their lowest ownership percentage within the “testing period” as defined in Section 382, which is generally a rolling three-year period. Under Section 382, if a corporation undergoes an “ownership change,” such corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. While the Company has not experienced an “ownership change,” future changes in our stock ownership, which may be outside of our control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component of the consideration could result in an “ownership change.” If an “ownership change” occurs in the future, utilization of our NOL carryforwards or other tax attributes may be limited, which could potentially result in increased future tax liability to us.

Accordingly, we have adopted a Tax Benefits Preservation Plan, dated as of July 28, 2020 (the “Rights Plan”), designed to reduce the risk that our ability to use our NOL carryforwards and other tax attributes would become subject to limitations by reason of the Company experiencing an “ownership change.” The ~~recent Novel Coronavirus outbreak,~~Rights Plan is designed to reduce the likelihood that we will experience an “ownership change” under Section 382 by (i) discouraging any person or group of persons from acquiring beneficial ownership of more than 4.95% of our Company Stock, which ~~has been declared a pandemic by~~is defined in the ~~World Health Organization~~Rights Plan and ~~has spread~~includes, among other things, our common stock and currently outstanding warrants, and (ii) discouraging any existing shareholder beneficially holding 4.95% or more of our Company Stock at the time the Rights Plan was adopted from acquiring any additional shares of Company Stock.

Under the terms of the Rights Plan, an Acquiring Person, as defined in the Rights Plan, that acquires or obtains the right to acquire beneficial ownership of 4.95% or more of our Company Stock could suffer substantial dilution of its ownership interest. In addition, if the preferred share purchase rights issued pursuant to the ~~United States~~Rights Plan were exercised, the market price of our common stock could be materially and ~~many other parts~~adversely affected. Moreover, sales in the public market of any shares of our common stock issued upon such exercise, or the ~~world has~~perception that such sales may occur, could also adversely ~~affected, and~~affect the market price of our common stock. These issuances may ~~continue~~also cause our per share net income, if any, to ~~materially~~decrease in future periods.

Although the Rights Plan is intended to reduce the likelihood of an “ownership change” that could adversely affect our ~~business operations, financial condition, liquidity and cash flow.~~

The outbreak of the Novel Coronavirus (“COVID-19”) has been declared a pandemic by the World Health Organization and has spread to the United States and continues to grow both in the U.S. and globally, causing significant macroeconomic uncertainty, volatility and disruption. In response, many governments have initiated social distancing rules, lockdowns or shelter-in-place orders resulting in the closure of many businesses. ~~These actions have resulted in an overall reduction in consumer activity and the closure of many of our agent locations.~~

COVID-19 and the related economic fallout began to adversely impact MoneyGram’s results of operations in the middle of March 2020. The inability of our agents to operate normally has reduced the volume of consumer transactions in almost all of the 200 countries and territories in whichNOL utilization, we ~~operate. These recent developments have negatively impacted and may continue to negatively impact our sales and operating margin as well as our workforce, agents and customers.~~

It is impossible to predict the scope and duration of the impact of COVID-19 on our business as the situation is rapidly evolving and there are a number of uncertainties related to this pandemic. These uncertainties include, but are not limited to, the potential adverse effect on the global economy, our agent network, travel and transportation services, our employees and customers. ~~Even after the government begins to lift the~~cannot provide assurance that these restrictions on ~~citizens and businesses, the resulting economic impact of COVID-19 may continue to negatively impact our business and increases in COVID-19 cases~~transferability will prevent all transfers that could result in ~~a return to lockdowns and shelter-in-place orders.~~ This situation continues to evolve rapidly, and additional adverse effects may arise that we are not aware of currently. All of these effects discussed above could have a material adverse effect our near-term and long-term revenues, earnings, liquidity and cash flows.

such an “ownership change.”

3435

Table of Contents

ITEM 6. EXHIBITS

The following exhibits are filed or incorporated by reference herein in response to Item 601 of Regulation S-K. The Company files Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K pursuant to the Exchange Act under Commission File No. 1-31950.


Exhibit Number	Description
3.1		Amended and Restated Certificate of Incorporation of MoneyGram International, Inc., dated June 28, 2004 (Incorporated by reference from Exhibit 3.1 to Registrant's Annual Report on Form 10-K filed on March 15, 2010).
3.2		Certificate of Amendment of Amended and Restated Certificate of Incorporation of MoneyGram International, Inc., dated May 12, 2009 (Incorporated by reference from Exhibit 3.1 to Registrant’s Annual Report on Form 10-K filed March 15, 2010).
3.3		Certificate of Amendment of Amended and Restated Certificate of Incorporation of MoneyGram International, Inc., dated May 18, 2011 (Incorporated by reference from Exhibit 3.1 to Registrant's Current Report on Form 8-K filed May 23, 2011).
3.4		Certificate of Amendment of Amended and Restated Certificate of Incorporation of MoneyGram International, Inc., dated November 14, 2011 (Incorporated by reference from Exhibit 3.1 to Registrant's Current Report on Form 8-K filed November 14, 2011).
3.5		Amended and Restated Bylaws of MoneyGram International, Inc., as amended and restated October 28, 2015 (Incorporated by reference from Exhibit 3.5 to Registrant’s Quarterly Report on Form 10-Q filed on November 2, 2015).
3.6		Amendment to the Amended and Restated Bylaws of MoneyGram International, Inc., dated March 2, 2016 (Incorporated by reference from Exhibit 3.6 to Registrant’s Annual Report on Form 10-K filed on March 2, 2016).
3.7		Amended and Restated Certificate of Designations, Preferences and Rights of Series D Participating Convertible Preferred Stock of MoneyGram International, Inc., dated May 18, 2011 (Incorporated by reference from Exhibit 3.2 to Registrant's Current Report on Form 8-K filed May 23, 2011).
~~10.1~~	3.8	~~Termination Agreement dated March 23, 2020, by and among~~Certificate of Designations of Series E Junior Participating Preferred Stock of MoneyGram International, Inc.~~, affiliates of Thomas H. Lee Partners, L.P. and affiliates of Goldman, Sachs & Co.~~ (Incorporated by reference from Exhibit ~~10.1~~3.1 to Registrant’s Current Report on Form 8-K filed ~~March 23,~~July 28, 2020).
10.2*	4.1	~~Letter Agreement~~Tax Preservation Plan, dated ~~March~~26 ,as of July 28, 2020, by and between ~~the~~MoneyGram International, Inc. and Equiniti Trust Company, ~~and W. Alexander Holmes~~as Rights Agent (Incorporated by reference from Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed July 28, 2020).
10.3*	10.1*	Form of ~~Letter Agreement by~~MoneyGram International, Inc. Amended and ~~between the Company and each~~Restated 2005 Omnibus Incentive Plan, as of May 6, 2020 Executive Officer Performance-Based Cash Award Agreement.
10.2*	Form of ~~the Company dated~~ MoneyGram International, Inc. Amended and Restated 2005 Omnibus Incentive Plan, as of May 6, 2020 Executive Officer Time-Based Restricted Stock Unit Award Agreement.
10.3*	~~March~~30 ,Form of MoneyGram International, Inc. Amended and Restated 2005 Omnibus Incentive Plan, as of May 6, 2020 Executive Officer Performance-Based Restricted Stock Unit Award Agreement.
31.1*		Section 302 Certification of Chief Executive Officer
31.2*		Section 302 Certification of Chief Financial Officer
32.1**		Section 906 Certification of Chief Executive Officer
32.2**		Section 906 Certification of Chief Financial Officer
101*			The following materials from MoneyGram's Quarterly Report on Form 10-Q for the three months ended March 31, ~~2020,~~2021, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of ~~Stockholders’~~Stockholders' Deficit, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Unaudited Condensed Consolidated Financial Statements.
104*	Cover Page Interactive Data File (formatted as iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101).
*		Filed herewith.
**		Furnished herewith.

3536

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	MoneyGram International, Inc.
	(Registrant)

May ~~1, 2020~~7, 2021	By:	/s/ ~~LAWRENCE ANGELILLI~~CHRISTOPHER RUSSELL
		~~Lawrence Angelilli~~Christopher Russell
		Chief ~~Financial~~Accounting Officer
		(~~Principal Financial~~Duly Authorized Officer and Principal Accounting Officer)

3637