MoneyGram International Reports Third Quarter 2012 Financial Results

  MoneyGram International Reports Third Quarter 2012 Financial Results

     Sends Originated Outside the U.S. Grew 18 Percent; a Four Year High

Business Wire

DALLAS -- November 09, 2012

MoneyGram International, Inc. (NYSE:MGI), a leading global payment services
company, reported financial results for the third quarter, which ended
September 30, 2012. Total revenue of $338.6 million increased 5 percent
compared to $321.9 million in the third quarter of 2011.

  *Money transfer fee and other  revenue increased 8 percent over the prior
    year, and increased 11 percent on a constant currency basis.
  *Money transfer transaction volume increased 13 percent over the prior
    year, led by:

       *18 percent growth in sends originated outside of the U.S.
       *13 percent growth in U.S. outbound on the strength of U.S.-to-Mexico
         sends, which grew 19 percent,
       *9 percent growth in U.S.-to-U.S. sends.

  *Global agent locations increased 15 percent to 293,000.
  *The bill payment business showed 5 percent transaction growth driven by
    new channel expansion, excluding the prior year divestiture.
  *The Company reported net loss of ($54.8) million and negative EBITDA of
    ($8.2) million. Both net income and EBITDA were impacted by:

       *$70.0 million incremental accrual in connection with the settlement
         with the U.S. Attorney’s Office for the Middle District of
         Pennsylvania (“MDPA”) investigation
       *$3.9 million of restructuring and reorganization costs
       *$2.4 million of stock-based compensation
       *$2.2 million of legal expenses related to the MDPA investigation and
         the settled shareholder lawsuit.

  *Adjusted EBITDA for the third quarter decreased 2 percent to $70.4 million
    from $72.0 million in the prior year. In the quarter, adjusted EBITDA
    margin was 20.8 percent, down from 22.4 percent compared to the same
    period last year. Adjusted EBITDA was negatively impacted by $4.9 million
    of increased marketing spend, $2.4 million related to a lower euro
    valuation against the U.S. dollar compared to the prior year, and $1.0
    million of lower investment revenue.
  *Diluted loss per common share was ($0.77), including a negative $1.00 per
    share impact due to the legal accrual and expenses, a negative $0.03 per
    share impact from restructuring and reorganization costs, and a negative
    $0.02 per share impact from stock-based compensation.
  *For the nine months ended September 30, 2012, total revenue was $986.8
    million, an increase of 7 percent year-over-year. Adjusted EBITDA
    increased 5 percent to $207.2 million, which includes a negative impact of
    $5.2 million related to a lower euro valuation against the U.S. dollar
    compared to the prior year.

“Consumers continue to recognize MoneyGram’s compelling products and valuable
services as evidenced by our third-quarter results, which included our sixth
consecutive quarter of double-digit constant currency money transfer growth.
We are focused on delivering strong operating results and building on the
positive momentum in our core money transfer and bill payment businesses,”
said Pamela H. Patsley, chairman and chief executive officer. “At the same
time, we have worked diligently to address the Middle District of Pennsylvania
investigation in a way that is best for all stakeholders. This settlement is a
significant step forward for MoneyGram in resolving our legacy issues. We
remain fully committed to employing the highest standards of compliance at
MoneyGram and continue to focus our efforts on building a stronger company.”

Balance Sheet

MoneyGram ended the quarter with assets in excess of payment service
obligations of $266.1 million, and outstanding debt principal of $813.5
million. Interest expense was $17.7 million in the quarter, down $4.5 million
from the prior year as a result of refinancing activities. Book income tax
expense in the quarter was $9.6 million, with approximately $0.1 million in
cash tax expenses.

Cash Flow

Free cash flow for the quarter was $24.6 million, down from the prior year
driven by higher signing bonuses for strategic agent renewals, and the timing
of capital expenditures offset by lower interest payments. For the nine months
ended September 30, 2012, free cash flow was $91.5 million, up 8 percent from
the prior year period. This was driven by strong money transfer results and
lower interest payments offset by higher capital expenditures and signing
bonuses.

Market Developments

  *Announced a new agreement with Walmart, extending our relationship through
    March 31, 2016. MoneyGram will continue to offer money transfer, bill
    payment and money order products at all Walmart stores in the U.S. and
    Puerto Rico.
  *Renewed and expanded our relationship with Advance America, a leading
    provider of consumer financial services with more than 2,400 retail
    locations.
  *Signed a new global agreement with PayPal that will enable consumers to
    easily access money in their digital wallets. PayPal’s 117 million active
    account holders will have the option to put cash in and take funds out of
    their PayPal accounts at MoneyGram locations. Consumers underserved by
    traditional banking institutions will be able to fund PayPal accounts
    giving them convenient access to e-commerce.
  *Entered into an agreement with Gemalto, integrating MoneyGram’s money
    transfer platform with Gemalto’s LinqUs mobile payment platform solution,
    allowing customers to send international transfers from a mobile phone to
    a MoneyGram location or receive transfers directly to their mobile wallet.
  *Grew self-service and new channel revenue by 40 percent, which represented
    5 percent of money transfer revenue in the quarter.
  *Network expansion activities during the quarter:

       *Entered into a strategic relationship with Payment Center to provide
         services in the Russian retail sector, opening up to 10,000 retail
         locations during the next two years.
       *Activated an additional 1,500 locations in the Indian Subcontinent
         with Federal Bank, Muthoot Finance and more than 600 retail
         locations.
       *Signed three additional banks in Latin America adding 1,000 locations
         in this important market.
       *Doubled our network in South Africa through the signing of First
         National Bank, one of the largest banks in the country.
       *Increased our agent locations in Malaysia through the signing of CIMB
         Islamic Bank.

“We remain steadfastly focused on positioning MoneyGram as the leading value
brand for consumers to send and receive funds. Through continued global
expansion, the extension of key agents like Walmart and the addition of new
relationships like PayPal we ensure that vital financial services are provided
safely and reliably to consumers who are underserved by traditional financial
institutions around the world,” Patsley added.

Global Funds Transfer Segment Results

Total revenue for the Global Funds Transfer segment was $317.9 million, up 6
percent from $298.9 million in the third quarter of 2011. The segment reported
operating income of $39.3 million and operating margin of 12.4 percent.
Adjusted operating margin was 14.2 percent in the quarter, down from 16.4
percent in the prior year as a result of increased marketing spend and a lower
euro valuation to the U.S. dollar. The increase in marketing was a planned
shift in spend from the fourth quarter to the third quarter to take advantage
of certain seasonal and global campaigns. For the full year, the Company still
expects total marketing spend of approximately 4.5 percent of total revenue.

During the quarter, money transfer transaction volume increased 13 percent,
continuing the Company’s double-digit growth trend. Money transfer fee and
other revenue increased 8 percent to $291.3 million, compared with $270.4
million in the third quarter of 2011. On a constant currency basis, money
transfer  fee and other revenue increased 11 percent, the Company’s sixth
consecutive quarter of double-digit growth.

Money transfer transactions originating outside of the U.S. increased a robust
18 percent over the prior year. U.S.-to-U.S. money transfer transaction volume
continued its strong growth, increasing 9 percent over the prior year. U.S.
Outbound transaction volume growth was 13 percent for the quarter led by
U.S.-to-Mexico growth of 19 percent.

Bill payment transaction volume decreased 4 percent, while fee and other
revenue decreased 7 percent to $26.4 million from the third quarter of 2011.
Excluding the fourth quarter 2011 divestiture, transactions increased 5
percent and fee and other revenue decreased slightly.

Financial Paper Products Segment Results

Total revenue in the Financial Paper Products segment declined 10 percent to
$20.3 million in the quarter, down from $22.5 million in the prior year
quarter. Operating income was $7.6 million, up from $5.5 million in the third
quarter of 2011. Operating margin was 37.3 percent. Adjusted operating margin
was 39.7 percent in the quarter, up from 30.5 percent in the same period last
year.

Outlook

For the fiscal year 2012, management is guiding to the low end of the
previously provided ranges: total revenue growth of 7 percent to 9 percent;
adjusted EBITDA growth in the range of 7 percent to 9 percent; and constant
currency, adjusted for the impact of the euro to U.S. dollar exchange rate,
adjusted EBITDA growth of 9 percent to 11 percent.

Legal Matters

The Company today issued a press release and filed a Form 8-K announcing that
it has reached a settlement with the U.S. Attorney’s Office for the Middle
District of Pennsylvania and the Asset Forfeiture and Money Laundering Section
of the Criminal Division of the Department of Justice relating to the
previously disclosed investigation of transactions involving certain of the
Company’s U.S. and Canadian agents, as well as its fraud complaint data and
consumer anti-fraud program, during the period from 2003 to early 2009.

Non-GAAP Measures

In addition to results presented in accordance with GAAP, this press release
and related tables include certain non-GAAP financial measures, including a
presentation of EBITDA (earnings before interest, taxes, depreciation and
amortization, including agent signing bonus amortization), Adjusted EBITDA
(EBITDA adjusted for significant items), Adjusted EBITDA Margin and Free Cash
Flow (Adjusted EBITDA less cash interest expense, cash tax expense, cash
payments for capital expenditures and agent signing bonuses). In addition, we
also present Adjusted Operating Income and Adjusted Operating Margin for our
two reporting segments. The following tables include a full reconciliation of
these non-GAAP financial measures to the related GAAP financial measures.

We believe that these non-GAAP financial measures provide useful information
to investors because they are an indicator of the strength and performance of
ongoing business operations, including our ability to service debt and fund
capital expenditures, acquisitions and operations. These calculations are
commonly used as a basis for investors, analysts and credit-rating agencies to
evaluate and compare the operating performance and value of companies within
our industry. In addition, the Company’s debt agreements require compliance
with financial measures based on EBITDA and Adjusted EBITDA. Finally, EBITDA,
Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow are financial
measures used by management in reviewing results of operations, forecasting,
assessing cash flow and capital, allocating resources or establishing employee
incentive programs. Although MoneyGram believes the above non-GAAP financial
measures enhance investors’ understanding of its business and performance,
these non-GAAP financial measures should not be considered an exclusive
alternative to accompanying GAAP financial measures.

Description of Tables

Table One – Consolidated Statements of (Loss) Income
Table Two – Segment Results
Table Three – Segment Reconciliations
Table Four – EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
Table Five – Consolidated Balance Sheets
Table Six – Assets in Excess of Payment Service Obligations
Table Seven – Free Cash Flow

Conference Call

MoneyGram International will host a conference call today at 9 a.m. ET, 8 a.m.
CT, to discuss its third quarter results. Pamela H. Patsley, chairman and
chief executive officer, will host the call.The conference call can be
accessed by calling 1-888-339-3504 (U.S.) and +1-719-325-4937(International).
The participant code is 6426555. Slides are available on MoneyGram’s website
at moneygram.com. A replay of the conference call will be available at noon ET
on November 9, 2012, through 11:59 p.m. ET on November 16, 2012. The replay of
the call is available at 1-877-870-5176 (U.S.) or +1-858-384-5517
(International). The replay participant code is 6246555.

About MoneyGram International, Inc.

MoneyGram International, Inc. is a leading global payment services company.
The Company's major products and services include global money transfers,
money orders and payment processing solutions for financial institutions and
retail customers. MoneyGram is a New York Stock Exchange listed company with
293,000 global money transfer agent locations in 197 countries and
territories. For more information, visit the Company's website at
moneygram.com.

Forward Looking Statements

This Form 8-K may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, 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. Forward-looking statements can be identified by words
such as “believes,” “estimates,” “expects,” “projects,” “plans,” “will,”
“should,” “could,” “would” and other similar expressions. 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 statement, except as required by federal securities law. These
forward-looking statements are based on management’s current expectations 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 $100 million forfeiture on our financial condition and results
of operations, the Company’s compliance with the terms of the deferred
prosecution agreement, the effect of the settlement and compliance with the
deferred prosecution agreement on the Company’s reputation and business; the
outcome of ongoing investigations by several state governments; our ability to
maintain key agent or biller relationships, or a reduction in transaction
volume from these relationships; our substantial debt service obligations,
significant debt covenant requirements and credit rating; our capital
structure and the special voting rights provided to designees of Thomas H. Lee
Partners, L.P. on our Board of Directors; sustained financial market
illiquidity, or illiquidity at our clearing, cash management and custodial
financial institutions; continued weakness in economic conditions, in both the
United States and global markets; a material slow down or complete disruption
of international migration patterns; litigation involving MoneyGram or its
agents, which could result in material settlements, fines or penalties;
fluctuations in interest rates; our ability to manage credit risks from our
retail agents and official check financial institution customers; our ability
to manage fraud risks from consumers or agents; the ability of MoneyGram and
its agents to maintain adequate banking relationships; our ability to retain
partners to operate our official check and money order businesses; our ability
to maintain sufficient capital; our ability to attract and retain key
employees; our ability to successfully develop and timely introduce new and
enhanced products and services; investments in new products, services or
infrastructure changes; our ability to adequately protect our brand and
intellectual property rights and to avoid infringing on the rights of others;
our ability to compete effectively; the ability of us and our agents to comply
with U.S. and international laws and regulations, including the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010; changes in tax laws or
an unfavorable outcome with respect to the audit of our tax returns or tax
positions, or a failure by us to establish adequate reserves for tax events;
our offering of money transfer services through agents in regions that are
politically volatile or, in a limited number of cases, are subject to certain
restrictions by the Office of Foreign Assets Control; a security or privacy
breach in our facilities, networks or databases; disruptions to our computer
network systems and data centers; our ability to effectively operate and adapt
our technology to match our business growth; our ability to manage risks
related to the operation of retail locations and the acquisition or start-up
of businesses; our ability to manage risks associated with our international
sales and operations; our ability to maintain effective internal controls; 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 MoneyGram’s public reports filed with the SEC, including
MoneyGram’s Form 10-K for the year ended December 31, 2011 and its Form 10-Q
for the quarter ended September 30, 2012.

                                                                              
TABLE ONE
MONEYGRAM INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(Unaudited)
                                                                                                
                                                                                                
(Amounts in     Three Months Ended                      Nine Months Ended
thousands,
except per      September 30,             2012 vs       September 30,                2012 vs
share data)     2012          2011        2011          2012          2011           2011
                                                                                                
REVENUE
Fee and other   $ 335,630     $ 318,022   $ 17,608      $ 977,254     $ 912,105      $ 65,149
revenue
Investment       2,920       3,925      (1,005  )    9,533       13,819       (4,286   )
revenue
Total revenue    338,550     321,947    16,603      986,787     925,924      60,863   
EXPENSES
Fee and other
commissions       152,372       141,010     11,362        440,960       405,631        35,329
expense
Investment
commissions      94          99         (5      )    274         350          (76      )
expense
Total
commissions       152,466       141,109     11,357        441,234       405,981        35,253
expense
Compensation      54,744        60,635      (5,891  )     172,838       177,843        (5,005   )
and benefits
Transaction
and               135,604       57,375      78,229        291,826       166,378        125,448
operations
support
Occupancy,
equipment and     12,270        11,090      1,180         36,623        34,480         2,143
supplies
Depreciation
and              10,840      11,413     (573    )    32,576      34,958       (2,382   )
amortization
Total
operating        365,924     281,622    84,302      975,097     819,640      155,457  
expenses
OPERATING        (27,374 )    40,325     (67,699 )    11,690      106,284      (94,594  )
(LOSS) INCOME
Other
(income)
expense
Net
securities        -             -           -             -             (32,816  )     32,816
gains
Interest          17,710        22,234      (4,524  )     53,230        65,720         (12,490  )
expense
Other            50          770        (720    )    397         15,626       (15,229  )
Total other      17,760      23,004     (5,244  )    53,627      48,530       5,097    
expense, net
(Loss) income
before income     (45,134 )     17,321      (62,455 )     (41,937 )     57,754         (99,691  )
taxes
Income tax       9,626       1,487      8,139       27,610      1,471        26,139   
expense
NET (LOSS)      $ (54,760 )   $ 15,834    $ (70,594 )   $ (69,547 )   $ 56,283      $ (125,830 )
INCOME
                                                                                                
(Loss)
earnings per
common share:
Basic           $ (0.77   )   $ 0.22      $ (0.99   )   $ (0.97   )   $ (10.82   )   $ 9.85
Diluted         $ (0.77   )   $ 0.22      $ (0.99   )   $ (0.97   )   $ (10.82   )   $ 9.85
                                                                                                
Net (loss)
income
available to
common
stockholders:
Net (loss)
income as       $ (54,760 )   $ 15,834    $ (70,594 )   $ (69,547 )   $ 56,283       $ (125,830 )
reported
Accrued
dividends on      -             -           -             -             (30,934  )     30,934
mezzanine
equity
Accretion on
mezzanine         -             -           -             -             (80,023  )     80,023
equity
Additional
consideration
issued in
connection        -             -           -             -             (366,797 )     366,797
with
conversion of
mezzanine
equity
Cash
dividends
paid on          -           -          -           -           (20,477  )    20,477   
mezzanine
equity
Net (loss)
income
available to    $ (54,760 )   $ 15,834    $ (70,594 )   $ (69,547 )   $ (441,948 )   $ 372,401  
common
stockholders
                                                                                                
Shares used
in computing
(loss)
earnings per
share: ^(1)
Basic             71,512        71,478      34            71,501        40,854         30,647
Diluted           71,512        72,176      (664    )     71,501        40,854         30,647
                                                                                                
                                                                                                
^(1) Includes common stock equivalents of 13.7 million for the three and nine months ended
September 30, 2012, respectively. The following weighted-average potential common shares are
excluded from diluted income (loss) per common share as their effect is anti-dilutive. All
potential common shares are anti-dilutive in periods of net loss available to common
stockholders.
                                                                                                
                                                                                                
Shares
related to        4,593         2,950                     4,996         5,108
stock options
Shares
related to
restricted        541           -                         462           26
stock and
restricted
stock units
Shares
related to        -             -                         -             28,062
preferred
stock
                                                                                                

                                                                            
TABLE TWO
MONEYGRAM INTERNATIONAL, INC.
SEGMENT RESULTS
(Unaudited)
                                                                                            
Global
Funds
Transfer
              Three Months Ended                       Nine Months Ended
              September 30,               2012 vs      September 30,               2012 vs
(Amounts in   2012          2011          2011         2012          2011          2011
thousands)
                                                                                            
Money
transfer
revenue:
Fee and
other         $ 291,305     $ 270,407     $ 20,898     $ 841,628     $ 766,198     $ 75,430
revenue
Investment      138           207           (69    )     568           405           163
revenue
Bill
payment
revenue:
Fee and
other           26,439        28,278        (1,839 )     80,091        85,905        (5,814 )
revenue
Investment     -           -           -          -           4           (4     )
revenue
Total          317,882     298,892     18,990     922,287     852,512     69,775 
revenue
                                                                                            
Commissions    151,996     140,857     11,139     439,799     404,149     35,650 
expense
                                                                                            
Operating     $ 39,279     $ 39,083     $ 196       $ 111,187    $ 91,441     $ 19,746 
income
                                                                                            
Operating       12.4    %     13.1    %                  12.1    %     10.7    %
margin
                                                                                            
                                                                                            
Financial
Paper
Products
              Three Months Ended                       Nine Months Ended
              September 30,               2012 vs      September 30,               2012 vs
(Amounts in   2012          2011          2011         2012          2011          2011
thousands)
                                                                                            
Money order
revenue:
Fee and
other         $ 13,450      $ 14,181      $ (731   )   $ 41,761      $ 43,568      $ (1,807 )
revenue
Investment      468           639           (171   )     1,565         2,605         (1,040 )
revenue
Official
check
revenue:
Fee and
other           4,382         4,947         (565   )     13,724        16,162        (2,438 )
revenue
Investment     1,991       2,716       (725   )    6,428       9,683       (3,255 )
revenue
Total          20,291      22,483      (2,192 )    63,478      72,018      (8,540 )
revenue
                                                                                            
Commissions    470         332         138        1,436       1,912       (476   )
expense
                                                                                            
Operating     $ 7,564      $ 5,533      $ 2,031     $ 24,634     $ 23,257     $ 1,377  
income
                                                                                            
Operating       37.3    %     24.6    %                  38.8    %     32.3    %
margin
                                                                                            

                                                                                   
TABLE THREE
MONEYGRAM INTERNATIONAL, INC.
SEGMENT RECONCILIATIONS
(Unaudited)
                                                                                                   
Global Funds
Transfer
                 Three Months Ended                         Nine Months Ended
                 September 30,                 2012 vs      September 30,                 2012 vs
(Amounts in      2012           2011           2011         2012           2011           2011
thousands)
                                                                                                   
Revenue (as      $ 317,882     $ 298,892     $ 18,990    $ 922,287     $ 852,512     $ 69,775 
reported)
                                                                                                   
Adjusted
operating        $ 45,070       $ 48,978       $ (3,908 )   $ 130,904      $ 115,890      $ 15,014
income
                                                                                                   
Restructuring
and                (3,620  )      (6,160  )      2,540        (12,917 )      (14,050 )      1,133
reorganization
costs
Stock-based
compensation      (2,171  )     (3,735  )     1,564      (6,800  )     (10,399 )     3,599  
expense
Total              (5,791  )      (9,895  )      4,104        (19,717 )      (24,449 )      4,732
adjustments
                                                                                 
Operating
income (as       $ 39,279      $ 39,083      $ 196       $ 111,187     $ 91,441      $ 19,746 
reported)
                                                                                                   
Adjusted
operating          14.2    %      16.4    %                   14.2    %      13.6    %
margin
Total              (1.8    %)     (3.3    %)                  (2.1    %)     (2.9    %)
adjustments
Operating
margin (as         12.4    %      13.1    %                   12.1    %      10.7    %
reported)
                                                                                                   
                                                                                                   
Financial
Paper Products
                 Three Months Ended                         Nine Months Ended
                 September 30,                 2012 vs      September 30,                 2012 vs
(Amounts in      2012           2011           2011         2012           2011           2011
thousands)
                                                                                                   
Revenue (as      $ 20,291      $ 22,483      $ (2,192 )   $ 63,478      $ 72,018      $ (8,540 )
reported)
                                                                                                   
Adjusted
operating        $ 8,052        $ 6,859        $ 1,193      $ 26,477       $ 26,663       $ (186   )
income
                                                                                                   
Restructuring
and                (241    )      (671    )      430          (1,066  )      (1,673  )      607
reorganization
costs
Stock-based
compensation      (247    )     (655    )     408        (777    )     (1,733  )     956    
expense
Total              (488    )      (1,326  )      838          (1,843  )      (3,406  )      1,563
adjustments
                                                                                 
Operating
income (as       $ 7,564       $ 5,533       $ 2,031     $ 24,634      $ 23,257      $ 1,377  
reported)
                                                                                                   
Adjusted
operating          39.7    %      30.5    %                   41.7    %      37.0    %
margin
Total              (2.4    %)     (5.9    %)                  (2.9    %)     (4.7    %)
adjustments
Operating
margin (as         37.3    %      24.6    %                   38.8    %      32.3    %
reported)
                                                                                                   

                                                              
TABLE FOUR
MONEYGRAM INTERNATIONAL, INC.
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
(Unaudited)
                                                                             
                                                                             
                   Three Months Ended                Nine Months Ended
                   September 30,                     September 30,
(Amounts in        2012              2011            2012          2011
thousands)
                                                                             
(Loss) income
before income      $  (45,134  )     $  17,321       $ (41,937 )   $ 57,754
taxes
Interest              17,710            22,234         53,230        65,720
expense
Depreciation
and                   10,840            11,413         32,576        34,958
amortization
Amortization of
agent signing        8,377           8,115        24,761      24,182  
bonuses
EBITDA                (8,207   )        59,083         68,630        182,614
                                                                             
Significant
items impacting
EBITDA:
Net securities        -                 -              -             (32,816 )
gains
Severance and
related costs         -                 -              1,029         (31     )
^(1)
Restructuring
and                   3,949             6,375          14,163        17,259
reorganization
costs
Capital
transaction           -                 (114    )      -             5,407
costs ^(2)
Asset
impairment            -                 884            -             2,686
charges ^(3)
Contribution
from investors        -                 -              347           -
^(4)
Debt
extinguishment        -                 -              -             5,220
^(5)
Stock-based
compensation          2,419             4,403          7,579         12,166
expense
Legal accruals       72,215          1,341        115,463     3,954   
and fees ^(6)
Adjusted EBITDA    $  70,376        $  71,972      $ 207,211    $ 196,459 
                                                                             
Adjusted EBITDA       20.8     %        22.4    %      21.0    %     21.2    %
margin ^(7)
                                                                             
                                                                             
^(1) Severance and related costs from executive terminations.
^(2) Represents professional and legal fees related to the 2011
Recapitalization.
^(3) Impairments of assets in 2011 relate to disposition activity.
^(4) Expense resulting from payment by an investor to Wal-Mart upon
liquidation of their investment and as required by the Participation
Agreement.
^(5) Debt extinguishment loss upon the termination of the senior facility in
connection with the 2011 Recapitalization.
^(6) Legal expenses for 2012 primarily include accruals in connection with the
settlement related to the U.S. Attorney's Office for the Middle District of
Pennsylvania investigation and the shareholder derivative litigation, and
legal fees and expenses related to these matters. Legal expenses for 2011
related primarily to the shareholder derivative litigation.
^(7) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Total
Revenue.


                                                             
TABLE FIVE
MONEYGRAM INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                             
                                                                
                                               September 30,    December 31,
(Amounts in thousands, except share and per    2012             2011
share data)
ASSETS
Cash and cash equivalents                      $ -              $ -
Cash and cash equivalents (substantially         2,539,844        2,572,174
restricted)
Receivables, net (substantially restricted)      1,330,018        1,220,065
Short-term investments (substantially            524,428          522,024
restricted)
Available-for-sale investments                   79,907           102,771
(substantially restricted)
Property and equipment                           119,906          116,341
Goodwill                                         428,691          428,691
Other assets                                    224,201        213,512    
Total assets                                   $ 5,246,995     $ 5,175,578  
                                                                             
LIABILITIES
Payment service obligations                    $ 4,208,052      $ 4,205,375
Debt                                             810,112          810,888
Pension and other postretirement benefits        110,931          120,252
Accounts payable and other liabilities          281,513        149,261    
Total liabilities                               5,410,608      5,285,776  
                                                                             
STOCKHOLDERS' DEFICIT
Participating Convertible Preferred Stock -
Series D, $0.01 par value, 200,000 shares        281,898          281,898
authorized, 109,239 issued at September 30,
2012, and December 31, 2011, respectively
Common Stock, $0.01 par value, 162,500,000
shares authorized, 62,263,963 shares issued      623              623
at September 30, 2012, and December 31,
2011, respectively
Additional paid-in capital                       999,464          989,188
Retained loss                                    (1,286,065 )     (1,216,543 )
Accumulated other comprehensive loss             (32,794    )     (38,028    )
Treasury stock: 4,407,038 and 4,429,184
shares at September 30, 2012, and December      (126,739   )    (127,336   )
31, 2011, respectively
Total stockholders' deficit                     (163,613   )    (110,198   )
Total liabilities and stockholders' deficit    $ 5,246,995     $ 5,175,578  
                                                                             

                                                                   
TABLE SIX
MONEYGRAM INTERNATIONAL, INC.
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS
(Unaudited)
                                                                                     
                                                                                     
                     September 30,    June 30,         March 31,        December 31,
(Amounts in          2012             2012             2012             2011
thousands)
                                                                                     
Cash and cash        $ 2,539,844      $ 2,548,257      $ 2,547,250      $ 2,572,174
equivalents
Receivables, net       1,330,018        1,266,882        1,210,506        1,220,065
Short-term             524,428          524,055          525,356          522,024
investments
Available-for-sale    79,907         85,281         93,127         102,771    
investments
                       4,474,197        4,424,475        4,376,239        4,417,034
Payment service       (4,208,052 )    (4,155,880 )    (4,152,604 )    (4,205,375 )
obligations
Assets in excess
of payment service   $ 266,145       $ 268,595       $ 223,635       $ 211,659    
obligations
                                                                                     

                                                              
TABLE SEVEN
MONEYGRAM INTERNATIONAL, INC.
FREE CASH FLOW
(Unaudited)
                                                                             
                                                                             
                         Three Months Ended          Nine Months Ended
                         September 30,               September 30,
(Amounts in thousands)   2012          2011          2012          2011
                                                                             
Adjusted EBITDA          $ 70,376      $ 71,972      $ 207,211     $ 196,459
                                                                             
Cash payments for          (16,454 )     (21,107 )     (48,903 )     (60,109 )
interest
Cash payments for tax      (115    )     (102    )     (913    )     (611    )
Cash payments for          (12,918 )     (6,761  )     (43,213 )     (30,606 )
capital expenditures
Cash payments for          (16,297 )     (7,568  )     (22,637 )     (20,371 )
agent signing bonuses
                                                                 
Free Cash Flow           $ 24,592     $ 36,434     $ 91,545     $ 84,762  
                                                                             

Contact:

MoneyGram International, Inc.
Media Relations:
Patty Sullivan, 214-303-9923
media@moneygram.com
or
Investor Relations:
Eric Dutcher, 214-999-7508
edutcher@moneygram.com
 
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