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" and "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 our Annual Report on Form 10-K for the year ended December 31, 2021. This discussion contains forward-looking statements that involve risks and uncertainties. MoneyGram'sactual results could differ materially from those anticipated due to various risks and factors discussed above under Cautionary Statements Regarding Forward-Looking Statements and elsewhere in this Quarterly Report on Form 10-Q and in our 2021 Form 10-K, as well as any additional risk factors that may be described in our other periodic filings with the SECfrom 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
MoneyGramis a global leader in cross-border 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, kiosks, or any one of the hundreds of thousands of agent locations in over 200 countries and territories, with over 100 now digitally enabled, the innovative MoneyGramplatform 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 our Digital Channel and third-party agents. The Digital Channel includes MGO (our direct-to-consumer business), digital partners, direct transfers to bank accounts, mobile wallets and debit card solutions such as Visa Direct. Third-party agents include retail chains, independent retailers, post offices and financial institutions. MoneyGramalso has a limited number of Company-operated retail locations. We manage our revenue and related commissions expense through two reporting segments: GFT and FPP. The GFT segment provides global money transfer services in more than 440,000 agent locations. Our global money transfer services are our primary revenue driver, accounting for 92% of total revenue for both the three and six months ended June 30, 2022. The GFT 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 Canadian, Caribbeanand European countries and through our Digital Channel. The FPP segment provides money order services to consumers through retail locations and financial institutions located in the U.S.and Puerto Ricoand provides official check services to financial institutions in the U.S.
The competitive environment continues to change as both established players and new, digital-only entrants work to innovate and deliver 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 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 and convenience. We continue to 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 and digital capabilities enables us to differentiate against digital-only competitors
whoare not able to serve a significant portion of the remittance market that relies on cash. As a leader in the evolution of digital P2P payments, we were the first company to utilize blockchain technology at scale for cross-border payments. Given our extensive global network, strong culture of fintech innovation, expertise in compliance and API-driven infrastructure, we are well-positioned to lead cross-border payment innovation. 21
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February 14, 2022, we entered into a Merger Agreement by and among the Company, Parent and an affiliate of Madison Dearborn, and Merger Sub. The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company. Following the Merger the Company will become a subsidiary of Parent. At the effective time of the Merger, each outstanding share of common stock will be automatically canceled and converted into the right to receive $11.00in cash. Consummation of the Merger is subject to the satisfaction or, if permitted by law, waiver by Parent, the Company or both of a number of conditions, including, among other things, (a) approval of the Merger Agreement by the affirmative vote of the holders of a majority of the Company's outstanding shares of common stock, (b) expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (c) the receipt of required approvals with respect to money transmitter licenses and applicable foreign investment and competition laws, (d) the absence of any material adverse effect on the Company's business and (e) other customary closing conditions. The Merger Agreement contains certain termination rights for the parties, including the right of the parties, subject to specified limitations, to terminate the Merger Agreement if the Merger is not consummated by February 13, 2023, although the End Date may be extended to May 14, 2023in certain circumstances to obtain required money transfer approvals. On March 16, 2022, we announced that a final agreement has been reached to settle its previously disclosed legacy enforcement matter with NYDFS through a consent order. The Company paid a civil monetary penalty of $8.3 millionto the NYDFS and will undertake various reporting obligations. This payment is consistent with the estimated amount that MoneyGrampreviously accrued in the fourth quarter of 2021. On March 11, 2022, MoneyGramand Stellar Development Foundationannounced a new partnership with Techstars, a global investment business that provides access to capital, one-on-one mentorship and customized programming for entrepreneurs. The program will recruit founders across the world whoare focused on driving technological innovation in areas such as blockchain and digital payments to further streamline cross-border payments and support financial inclusion. In the first half of 2022, the U.S.dollar strengthened significantly against all major currencies. The impact was a reduction in the value of foreign-based revenue as it is converted to our reporting currency, the U.S.dollar.
This discussion of trends expected to impact our business in 2022 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, Part II, Item 1A, Risk Factors of this Quarterly Report on Form 10-Q and Part I, Item 1A, Risks Factors of our 2021 Form 10-K for additional factors that could cause results to differ materially from those contemplated by the following forward-looking statements. Through 2022, we believe the industry will continue to see a number of trends, including the growth of digital transactions, a competitive pricing environment, continuing focus on customer experience and a broader trend towards potential diversification of product and service offerings.
We also anticipate a
To position the Company to respond to these trends, our digital-first strategy is creating tremendous value for consumers and the Company's strategy will continue to focus on growing our digital business. To address this new and evolving digital consumer, we expect to continue to invest in product innovation as we look to go deeper and wider in our consumer-direct digital offerings. We also plan to expand MGO to new countries, add new digital send partners and add more wallets and account deposit offerings. As we grow our digital business, we will also focus on maintaining our global cash network. The cash receive network is important to millions of receivers around the world
whorely on cash to support the urgent needs of their families; additionally, in many markets the cash network continues to provide benefit for those consumers that need to send cash.
Additionally, in 2022 we plan to further execute our strategy to lead cross-border payment innovation and blockchain-enabled settlement through growing our partnership with the
We continue monitoring the social, political, regulatory and economic environment around the world and will consider taking actions as appropriate. There could be adverse impacts to our revenues, earnings and cash flows should the situation escalate beyond its current scope, including, among other potential impacts, economic recessions in certain countries or globally due to inflation and changes in the interest rate environment. 22
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We expect a high level of competition for agents and customers, along with competitive pricing to be a continuous challenge through 2022. Currency volatility, inflation, liquidity pressure on certain central banks, immigration restrictions and continuing immobility of labor throughout the world may also continue to impact our business. We anticipate continuing prioritization of our operating cost structure as well as our transaction related expenses and expect to remain price competitive across our product line. For our FPP 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 FPP, is dependent on the prevailing short-term interest rate environment in
the United States. The Company will see a positive impact on its investment revenue as U.S.money market rates rise in conjunction with actions by the Federal Reserve.
General Economic Conditions and MoneyGram Impact
The global spread and unprecedented impact of COVID-19 and its variants, is complex and ever-evolving. In
March 2020, the World Health Organizationdeclared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak is global and has impacted all the countries in which we do business. Since the outbreak, we have seen the profound 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 in different regions of the world, but have resulted in travel restrictions as well as certain business closures across many of the countries in which we operate. Multiple variants of COVID-19 combined with a lack of vaccinations in many countries have resulted in new waves of infections and new restrictions. These restrictions, combined with limitations on labor mobility, often have an impact on the ability of consumers to transact at agent locations, which can cause temporary reductions in remittance activity. It is impossible to predict the scope and duration of the impact of the COVID-19 pandemic as the situation has been different on a country by country basis. The impact of COVID-19 and its variants in 2022 and beyond will depend on the duration and severity of economic conditions resulting from the crisis, its impact on public health, immigration, public policy actions, vaccination rates and expansion and duration of returns to lockdowns and shelter-in-place orders by governments, as well as changes in consumer behavior over the long term. 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 disruptions in our service offerings have occurred from time to time from temporary agent location closures, the inability of labor markets to return to normal mobility can represent a longer impact on the Company. We cannot reasonably estimate the potential impact or timing of those events, and we may not be able to mitigate such impact.
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, commissions and other 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 and are not necessarily comparable with similarly named metrics of other companies. 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. We believe that the non-GAAP financial measures enhance investors' understanding of our business and performance because they are an indicator of the strength and performance of ongoing business operations. The non-GAAP measures 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. They are also used by management in reviewing results of operations, forecasting, allocating resources or establishing employee incentive programs. 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).
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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.
RESULTS OF OPERATIONS
The following table is a summary of the results of operations:
Three Months Ended June 30, Six Months Ended June 30, (Amounts in millions) 2022 2021 2022 2021 Revenue Fee and other revenue
$ 324.5 $ 327.3 $ 630.0 $ 635.4Investment revenue 5.1 2.0 7.2 4.0 Total revenue 329.6 329.3 637.2 639.4 Cost of revenue Commissions and other fee expense 156.5 161.3 305.2 311.2 Investment commissions expense 2.4 0.2 2.8 0.4 Direct transaction expense 13.8 16.2 26.1 31.4 Total cost of revenue 172.7 177.7 334.1 343.0 Gross profit 156.9 151.6 303.1 296.4 Operating expenses Compensation and benefits 59.3 59.0 115.8 121.2 Transaction and operations support 53.3 40.3 98.4 83.7 Occupancy, equipment and supplies 15.1 16.3 29.6 31.8 Depreciation and amortization 12.1 14.1 24.3 29.4 Total operating expenses 139.8 129.7 268.1 266.1 Operating income 17.1 21.9 35.0 30.3 Other expenses Interest expense 12.1 22.5 23.0 44.8 Loss on early extinguishment of debt - 10.3 - 10.3 Other non-operating expense 1.1 0.8 2.0 1.8 Total other expenses 13.2 33.6 25.0 56.9 Income (loss) before income taxes 3.9 (11.7) 10.0 (26.6) Income tax expense (benefit) 0.8 (0.6) 1.8 (0.1) Net income (loss) $ 3.1 $ (11.1)$ 8.2 $ (26.5)Revenue Revenue remained relatively flat for the three months ended June 30, 2022and revenue declined by $2.2 millionfor the six months ended June 30, 2022, due to a decrease in GFT revenue of $5.8 million, partially offset by an increase in FPP revenue of $3.6 million. See the "Segments Results" section below for further discussions.
Cost of Revenue
Cost of revenue decreased by
$5.0 millionfor the three months ended June 30, 2022, due to a decrease in GFT cost of revenue of $7.3 millionoffset by an increase in FPP investment commissions expense of $2.3 million. Cost of revenue decreased by $8.9 millionfor the six months ended June 30, 2022, due to a decrease in GFT cost of revenue of $11.4 millionoffset by an increase in FPP investment commissions expense of $2.5 million. See the "Segments Results" section below for further discussions. 24
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Compensation and Benefits
Compensation and benefits remained relatively flat for the three months ended
June 30, 2022, and decreased by $5.4 millionfor the six months ended June 30, 2022, primarily due to the absence of severance costs in the current period.
Transaction and Operations Support
Transaction and operations support primarily includes marketing, professional fees. customer care 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. Transaction and operations support increased by $13.0 millionand $14.7 millionfor the three and six months ended June 30, 2022, respectively. The increase is primarily due to a return to pre-pandemic levels of activities such as marketing campaigns and business travel, combined with the impact of a strengthening U.S.dollar against almost all major currencies resulting in foreign exchange losses and an increase in bank charges resulting from fees on foreign exchange trades and an increase in legal expenses due to Merger-related costs.
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. Occupancy, equipment and supplies expense remained relatively flat for the three months ended
June 30, 2022and decreased by $2.2 millionfor the six months ended June 30, 2022, primarily due to a decrease in facilities costs as a result of a significant reduction of our global footprint since providing our employees with the option of a work-from-home policy in the second quarter of 2021.
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. Depreciation and amortization decreased by
$2.0 millionand $5.1 millionfor the three and six months ended June 30, 2022, primarily due to a continued decrease in purchases of hardware and software as a result of our migration to cloud computing and a decrease in office furniture and equipment. Other Expenses Interest Expense decreased by $10.4 millionand $21.8 millionfor the three and six months ended June 30, 2022, respectively, primarily due to interest savings as a result of our refinancing of high-cost debt in the third quarter of 2021 and the loss on early extinguishment of debt in the second quarter of 2021.
In the second quarter of 2021, the Company recorded a loss on early extinguishment of debt associated with the prepayment of
Other non-operating expense remained relatively flat for the three and six months ended
Income Tax Expense
For the three months ended
June 30, 2022, the Company recognized an income tax expense of $0.8 millionon pre-tax income of $3.9 millionprimarily due to a decrease in valuation allowance, U.S.general business credits and recognition of excess tax benefits on share-based compensation, all of which were partially offset by non-deductible expenses, foreign taxes net of federal income tax benefits, an increase in unrecognized tax benefits and state taxes. For the six months ended June 30, 2022, the Company recognized an income tax expense of $1.8 millionon pre-tax income of $10.0 millionprimarily due to a decrease in valuation allowance, recognition of excess tax benefits on share-based compensation, U.S.general business credits and a recovery of state taxes, all of which were partially offset by foreign taxes net of federal income tax benefits, non-deductible expenses and an increase in unrecognized tax benefits. The decrease in valuation allowance against our U.S.federal and state deferred tax assets is due to the estimated use of $1.1 millionof U.S.general business credits and state net operating losses. As of June 30, 2022, the Company remains in a three-year cumulative pre-tax loss position. However, it is possible that the Company could be out of its current three-year cumulative loss position within the next 12 months. The Company will maintain a valuation allowance on applicable deferred tax assets until there is sufficient evidence to support the reversal of any or all of these valuation allowances. The Company continues to analyze the positive and negative evidence in determining the need for a valuation allowance with respect to its deferred tax assets. It is reasonably possible that, within the next 12 months, the valuation allowance could be reduced if there is sufficient evidence indicating it is more likely than not that all or a portion of the Company's deferred tax assets will be realized. Release of the valuation 25
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allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period in which the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability achieved.
The following table sets forth our GFT segment results of operations for the three and six months ended
Three Months Ended June 30, Six Months Ended June 30, (Amounts in millions) 2022 2021 2022 2021 Money transfer revenue
$ 302.5 $ 304.9 $ 586.8 $ 590.3Bill payment revenue 9.6 10.4 18.9 21.2 Total revenue 312.1 315.3 605.7 611.5 Cost of revenue 170.2 177.5 331.2 342.6 Gross profit $ 141.9 $ 137.8 $ 274.5 $ 268.9Money Transfer Revenue Money transfer revenue decreased by $2.4 millionand $3.5 millionfor the three and six months ended June 30, 2022, primarily due to a U.S.dollar strengthening against major currencies, pricing pressure due to increased competition and the impact of inflation on the discretionary income of our consumers.
Bill Payment Revenue
Bill payment revenue decreased by
Cost of Revenue
Cost of revenue decreased by
$7.3 millionand $11.4 millionfor the three and six months ended June 30, 2022, respectively, primarily due to a decrease in commissions and other fee expense driven by lower rates in commissions associated with both MGO and walk-in business.
The following table sets forth our FPP segment results of operations:
Three Months Ended June 30, Six Months Ended June 30, (Amounts in millions) 2022 2021 2022 2021 Money order revenue $ 10.6
$ 10.6$ 21.1 $ 21.0Official check revenue 6.9 3.4 10.4 6.9 Total revenue 17.5 14.0 31.5 27.9 Investment commissions expense 2.5 0.2 2.9 0.4 Gross profit $ 15.0 $ 13.8$ 28.6 $ 27.5Money Order Revenue
Money order revenue remained flat for the three and six months ended
Official check revenue Official check revenue increased by
$3.5 millionfor the three and six months ended June 30, 2022, primarily due to an increase in investment revenue as a result of interest rate hikes by the federal reserve in response to the high inflation environment.
Investment Commissions Expense
Investment commissions expense is calculated as a percentage of Investment Revenue. In periods of extremely low interest rates, it is possible for commissions to be at or close to zero, resulting in abnormally high gross margin.
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Investment commissions expense increased by
EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow (Non-GAAP Measures)
The following table is a reconciliation of our non-GAAP financial measures to the related
Three Months Ended June 30, Six Months Ended June 30, (Amounts in millions, except percentages) 2022 2021 2022 2021 Income (loss) before income taxes
$ 3.9 $ (11.7) $ 10.0 $ (26.6)Interest expense 12.1 22.5 23.0 44.8 Depreciation and amortization 12.1 14.1 24.3 29.4 Signing bonus amortization 13.5 14.7 27.4 29.0 EBITDA 41.6 39.6 84.7 76.6 Significant items impacting EBITDA: Stock-based, contingent, incentive compensation and other 5.4 1.5 8.2 3.3 Merger-related costs 1.1 - 4.8 - Severance and related costs 1.0 - 1.0 0.2 Legal and contingent matters 0.7 (0.1) 1.3 - Restructuring and reorganization costs 0.3 2.2 (1.0) 8.1 Direct monitor costs (0.1) 1.1 - 4.9 Loss on early extinguishment of debt - 10.3 - 10.3 Compliance enhancement program - 0.2 - 1.3 Adjusted EBITDA 50.0 54.8 99.0 104.7 Cash payments for interest (5.9) (27.1) (22.5) (39.0) Cash (payments) refunds for taxes, net (3.0) (1.5) (6.3) 1.2 Cash payments for capital expenditures (12.1) (10.0) (22.4) (21.2) Cash payments for agent signing bonuses (6.9) (9.7) (21.6) (22.7) Adjusted Free Cash Flow $ 22.1 $ 6.5$ 26.2 $ 23.0
See “Results of Operations” and “Analysis of Cash Flows” sections for additional information regarding these changes.
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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 deposits and available-for-sale interest-bearing investments collectively as our "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) June 30, 2022 December 31, 2021 Cash and cash equivalents
$ 117.4$ 155.2 Settlement assets: Settlement cash and cash equivalents $ 1,606.9$ 1,895.7 Receivables, net 1,050.8 700.4 Interest-bearing investments 993.6 992.3 Available-for-sale investments 2.8 3.0 Total settlement assets $ 3,654.1$ 3,591.4 Payment service obligations $ (3,654.1)$ (3,591.4) Our primary sources of liquidity include cash flows generated by the sale of our payment instruments, our cash and cash equivalents and interest-bearing deposit 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 our 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 availability under our Revolving Credit Facility, 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, S&P and 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 June 30, 2022, cash and cash equivalents (including unrestricted and settlement cash and cash equivalents) and interest-bearing investments totaled $2.7 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.
Our investment portfolio includes
$2.8 millionof available-for-sale investments as of June 30, 2022. U.S.government agency residential mortgage-backed securities comprise $1.9 millionof our available-for-sale investments, while asset-backed and other securities compose the remaining $0.9 million. 28
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Clearing and Cash Management Banks
We collect and disburse money through a network of clearing and cash management banks. The relationships with these banks are a critical component of our ability to maintain our global active funding requirements on a timely basis. In the
U.S., we have agreements with four active clearing banks that provide clearing and processing functions for official checks, money orders and other draft instruments. We believe that this network of banks provides sufficient capacity to handle the current and projected volumes of items for these services. We also maintain relationships with a variety of domestic and international cash management banks for electronic funds transfer and wire transfer services used in the movement of consumer funds and agent settlements.
Term Loan and Notes
The following is a summary of the Company’s outstanding debt:
December 31, (Amounts in millions, except percentages) June 30, 2022 2021 Term Loan due 2026
$ 382.0 $ 384.05.38% Senior Secured Notes due 2026 415.0 415.0 Total debt at face value 797.0 799.0 Unamortized debt issuance costs and debt discounts (11.0) (12.3) Total debt, net $ 786.0 $ 786.7As of June 30, 2022, the Company had no borrowings and no outstanding letters of credit under its Revolving Credit Facility and had $40.0 millionof availability. See Note 6 - Debt of the Notes to the Unaudited Condensed Consolidated Financial Statements for additional disclosure related to the credit facilities.
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