MoneyGram 2004 Annual Report Download - page 61

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The results of operations of Viad included in "Income and gain from discontinued operations" in the Consolidated Statement of Income include the following:
2004 2003 2002
(Dollars in thousands)
Revenue $ 414,933 $ 770,468 $ 844,486
Earnings (loss) before income taxes 13,495 60,142 (32,157)
Income (loss) from discontinued operations 8,233 36,386 (19,455)
As part of the transaction, we entered into several agreements with Viad for the purpose of governing the relationship. A Separation and Distribution
Agreement provides for the principal corporate transactions required to effect the separation of MoneyGram from Viad and the spin-off and other matters
governing the relationship between New Viad and MoneyGram following the spin-off. The Employee Benefits Agreement provides for the allocation of
employees, employee benefit plans and associated liabilities and related assets between Viad and MoneyGram. The Interim Services Agreement provides for
services to be provided by Viad for MoneyGram on an interim basis. The Tax Sharing Agreement provides for the allocation of federal, state, and foreign tax
liabilities for all periods through the Distribution Date.
The services to be provided under the Interim Services Agreement will generally be provided by New Viad for a term of two years beginning on the
Distribution Date. We may, at any time after the first year anniversary of the Distribution, request termination of the service upon 90 days advance notice to
Viad. However, certain services may not be terminated prior to the second anniversary of the Distribution Date without Viad's consent. Under the Interim
Services Agreement, we will incur annual expenses of $1.6 million. During 2004, expenses totaling $0.8 million were recognized in connection with this
agreement.
In January 2005, the Company acquired a 50% interest in a corporate aircraft owned by Viad at a cost of $8.6 million. The Company will pay 50% of all fixed
costs associated with this asset and is responsible for the variable costs associated with its direct usage of the asset.
Game Financial Corporation: During the first quarter of 2004, we completed the sale of one of our subsidiaries, Game Financial Corporation ("Game
Financial"), for approximately $43.0 million in cash, resulting in net cash received of $15.2 million. Game Financial provides cash access services to casinos
and gaming establishments throughout the United States. As a result of the sale, we recorded a gain of approximately $18.9 million ($11.4 million after-tax) in
2004. In addition, we recorded a gain of $1.1 million (net of taxes) in 2004 as a result of the settlement of a lawsuit brought by Game Financial. We may
record future after-tax gains of approximately $4.0 million, based on contingencies in the Sales and Purchase Agreement related to the continued operations of
Game Financial with two casinos. Game Financial was a part of our Payment Systems segment.
In accordance with SFAS No. 144, the results of operations of Game Financial and the gain on the disposal of Game Financial have been reflected as
components of discontinued operations. All prior periods in the historical Consolidated Statements of Income have therefore been restated. Game Financial
assets and liabilities have not been restated on the Consolidated Balance Sheets. The results of operations of Game Financial, included in "Income and gain
from discontinued operations" include the following:
2004 2003 2002
(Dollars in thousands)
Revenue $ 10,668 $ 36,548 $ 37,920
Earnings before income taxes 852 3,025 4,260
Gain on disposition 11,417 — —
Income and gain from discontinued operations 13,050 1,830 2,577
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