MoneyGram 2006 Annual Report Download - page 13

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Table of Contents
Available Information
Our principal executive offices are located at 1550 Utica Avenue South, Minneapolis, Minnesota 55416, and our telephone number is
(952) 591-3000. Our website address is www.moneygram.com. We make our reports on Forms 10-K, 10-Q and 8-K, Section 16 reports
on Forms 3, 4 and 5, and all amendments to those reports, available electronically free of charge in the Investor Relations section of our
website as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission (the "SEC").
Item 1A. RISK FACTORS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Various risks and uncertainties could affect our business. Any of the risks described below or elsewhere in this Annual Report on
Form 10-K or our other filings with the Securities and Exchange Commission could have a material impact on our business, financial
condition or results of operations. It is not possible to predict or identify all risk factors. Additional risks and uncertainties not presently
known to us or that we believe to be immaterial may also impair our business operations. Therefore, the following is not intended to be a
complete discussion of all potential risks or uncertainties.
RISK FACTORS
If we lose key retail agents or are unable to maintain our Global Funds Transfer agent network, our business and results of
operations could be adversely affected.
We may not be able to retain all of our current retail agents. The competition for retail agents is intense, and larger agents are increasingly
demanding financial concessions and more information technology customization. The development and equipment necessary to meet
agent demands could require substantial capital expenditures. If we were unable to meet these demands, we could lose agents and our
volume of money transfers would be substantially reduced. If agents decide to leave our network, or if we are unable to sign new agents,
our revenue would decline.
Existing agents may generate fewer transactions or less revenue for various reasons, including increased competition. An agent may
encounter business difficulties unrelated to its provision of our services, which could cause the agent to reduce its number of locations or
hours of operation, or cease doing business altogether.
A substantial portion of our transaction volume is generated by a limited number of key agents. During 2006 and 2005, our ten largest
agents accounted for 31 percent of our total revenue and 44 percent and 46 percent, respectively, of the revenue of our Global Funds
Transfer segment. Our largest agent, Wal-Mart Stores, Inc., accounted for 17 percent and 13 percent of our total revenue and 24 percent
and 19 percent of the revenue of our Global Funds Transfer segment in 2006 and 2005, respectively. If any of these key agents were not
to renew their contracts with us, or if such agents were to reduce the number of their locations, or cease doing business, we might not be
able to replace the volume of business conducted through these agents, and our business and results of operations would be adversely
affected.
In addition, many of our high volume agents are in the check cashing industry. There are risks associated with the check cashing industry
that could cause this portion of our agent base to decline. Any regulatory action that adversely affects check cashers could also cause this
portion of our agent base to decline.
If we lose large financial institution customers in our Payment Systems segment, our business and results of operation could be
adversely affected.
During 2006 and 2005, our ten largest financial institution customers accounted for 10 percent and 13 percent, respectively, of our total
revenue and 36 percent and 39 percent, respectively, of the revenue of our Payment Systems segment in 2006 and 2005. Our largest
financial institution customer generated 4 percent of our total revenue and 12 percent and 11 percent of the revenue in our Payment
Systems segment in 2006 and 2005, respectively. The loss of any of our top financial institution customers could adversely affect our
business and results of operations.
If we fail to successfully develop and timely introduce new and enhanced products and services or we make substantial investments in
an unsuccessful new product or service, our business, prospects, financial condition and results of operations could be adversely
affected.
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