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Actual results may differ materially from expectations, plans, and prospects contemplated in any forward-looking statements as a result of various factors, including those discussed in our filings with the SEC. I encourage everyone on this call to read our SEC filings, including our 10-K for the year ended December 31, 2011, and 10-Q for the quarter ended March 31, 2012.Additionally, I want to note that today's remarks include certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin and free cash flow. Our earnings release includes the full reconciliation of these non-GAAP financial measures to the related GAAP financial measures. Now, I'll turn the call over to Pam. Pamela Patsley Thanks Eric. Good morning everyone. Our business performed well in a challenging environment through creative business initiatives and disciplined execution by our global teams. We achieved impressive growth in sends originating outside of the US, and built upon our positive momentum from the first quarter, despite the impact of the declining euro, economic malaise in southern Europe and high global unemployment. We are driving performance through double-digit growth in agent locations, money transfer transactions and money transfer fee and other revenue. In fact, we had the fifth consecutive quarter of double-digit constant currency money transfer revenue growth. Our expansion in fast growing alternative channels continues and that now represents 5% of money transfer revenue. Bottom line, we continue to outperform our peers in the marketplace and at the same time position MoneyGram for the future. This is a true testament to the strength of the MoneyGram team. I now would like to turn to two foundational items that impacted the second quarter results. First, I’m pleased to report that last week we agreed terms on a proposed settlement in the shareholder derivative litigation in the Delaware Chancery Court. The proposed settlement has been submitted for approval to the court, and provides for an overall settlement at $10 million as divided among several of the defendants and certain other parties.
After taking into account the various parties contributions to the settlement, the company accrued $6.5 million for the quarter related to this proposed settlement in addition of course to associated legal expenses. As you may recall, the litigation related to our 2011 recapitalization transaction, which allowed our largest investors THL and Goldman Sachs to convert their Series B preferred stock interest into common stock and common stock equivalents.We all know that this is a positive transaction for MoneyGram as evidenced by the overwhelming vote of support, 94%, from the unaffiliated shareholders. While we would have preferred no litigation at all, we feel this settlement is a good result which enables the company to avoid future costs and put this matter behind us. The second is our ongoing investigation in the matter before the US district court for the Middle District of Pennsylvania. As you know from the earnings release, we accrued $30 million in connection with a possible resolution of this matter based upon facts and circumstances we know today. We continue to engage in discussions with US government representatives, and our goal is to resolve this matter as soon as possible and with the best solution for all stakeholders. That said, we can’t predict the ultimate outcome or potential losses that may be associated with this matter, and we can’t predict whether they will be other remedies or penalties. I can say that we continue to dedicate significant resources towards obtaining a resolution in this legacy matter. This investigation is about MoneyGram’s consumer antifraud program from 2004 to early 2009. I have said this before, but it bears repeating now, MoneyGram continually intensifies its efforts to thwart fraudsters, and we partner with law enforcement and other agencies like the Federal Trade Commission to provide information and assist in the arrest, indictment and prosecution of criminals.
We continue to invest in compliance systems and programs and use best in class technology to detect fraud. Our efforts in these areas have been recognized by various regulators and law enforcement agencies. You know that our services and products are used by millions of people around the world that handle important and sometimes critical needs in their lives, and from a business perspective just in the US alone there are over 14,000 small to medium-sized businesses, where MoneyGram products are an important part of their revenue stream. Few things anger us more than when people use our service or really the service of any other money transfer company to engage in illegal activity.Read the rest of this transcript for free on seekingalpha.com