MoneyGram 2005 Annual Report Download - page 94

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Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 16. Commitments and Contingencies
Operating Leases: The Company has various noncancelable operating leases for buildings and equipment that terminate through 2015. Certain of these leases
contain rent holidays and rent escalation clauses based on pre-determined annual rate increases. The Company recognizes rent expense under the straight-line
method over the term of the lease. Any difference between the straight-line rent amounts and amounts payable under the leases are recorded as deferred rent
in "Accounts payable and other liabilities" in the Consolidated Balance Sheets. Cash or lease incentives received under certain leases are recorded as deferred
rent when the incentive is received and amortized as a reduction to rent over the term of the lease using the straight-line method. Incentives received relating
to tenant improvements are capitalized as leasehold improvements and depreciated over the remaining term of the lease. At December 31, 2005, the deferred
rent liability was $2.8 million.
Rent expense under these operating leases totaled $5.8 million, $6.5 million and $5.8 million during 2005, 2004 and 2003 respectively. Minimum future rental
payments for all noncancelable operating leases with an initial term of more than one year are (dollars in thousands):
2006 $ 5,534
2007 5,198
2008 4,963
2009 4,973
2010 5,134
Later 17,688
$ 43,490
Legal Proceedings: The Company is party to a variety of legal proceedings that arise in the normal course of our business. While the results of these legal
proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on
the Company's consolidated results of operations or financial position.
Credit Facilities: At December 31, 2005, the Company has various reverse repurchase agreements, letters of credit and overdraft facilities totaling $1.8 billion
to assist in the management of investments and the clearing of payment service obligations. These credit facilities are in addition to available amounts under
the revolving credit agreement described in Note 9. Included in this amount is an uncommitted reverse repurchase agreement with one of the clearing banks
totaling $1.0 billion. Overdraft facilities consist of a $20.0 million line of credit and $10.4 million of letters of credit. Letters of credit totaling $0.4 million
reduce amounts available under the revolving credit agreement. Fees on the letters of credit are paid in accordance with the terms of the revolving credit
agreement described in Note 9. At December 31, 2005, there was $100.0 million outstanding under a reverse repurchase agreement and $10.4 million
outstanding under various letters of credit.
The Company has agreements with certain other co-investors to provide funds related to investments in limited partnership interests. As of December 31,
2005, the total amount of unfunded commitments related to these agreements was $6.1 million.
F-40