MoneyGram 2006 Annual Report Download - page 4

Table of Contents
PART I
Item 1. BUSINESS
MoneyGram International, Inc. ("MoneyGram," the "Company," "we," "us" and "our") is a leading global payment services company.
Our core purpose is to provide consumers with affordable, reliable and convenient payment services. We offer our products and services
to consumers and businesses primarily through our network of agents and our financial institution customers. The diverse array of
products and services we offer enables consumers, many of whom are not fully served by traditional financial institutions, to make
payments and to transfer money around the world, helping them meet the financial demands of their daily lives.
Our business is conducted through our wholly owned subsidiary formerly known as Travelers Express Company, Inc. ("Travelers"),
which has been in operation since 1940. In June 1998, we acquired MoneyGram Payment Systems, Inc. ("MPSI"), adding the
MoneyGram® branded international money transfer services to our group of services. We were incorporated in Delaware on
December 18, 2003 in connection with the June 30, 2004 spin-off from our parent company, Viad Corp ("Viad") (referred to hereafter as
the "spin-off"). In the spin-off, Travelers was merged with our wholly owned subsidiary and Viad distributed all of our issued and
outstanding shares of common stock to Viad stockholders in a tax-free distribution. Stockholders of Viad received one share of our
common stock for every one share of Viad common stock owned. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations — Our Separation from Viad Corp."
In March 2004, we completed the sale of our subsidiary, Game Financial Corporation, for approximately $43.0 million in cash, to
continue our focus on our core businesses. See "Management's Discussion and Analysis of Financial Condition and Results of
Operations — Basis of Presentation."
In April 2005, we acquired substantially all of the assets of ACH Commerce, LLC ("ACH Commerce"), an automated clearing house
("ACH") payment processor. The acquisition provides the Company with the technology and systems platform to expand its bill payment
services.
In 2005, we consolidated the operations of Travelers with MPSI to eliminate duplication and overlapping costs of operating the two
businesses under separate corporate entities, and to complete the transition of our business from the Travelers Express brand to the
MoneyGram brand. Effective December 31, 2005, the entity that was formerly Travelers merged with and into MPSI, with MPSI
remaining as the surviving corporation and our primary operating subsidiary.
In May 2006, we completed the acquisition of Money Express S.r.l., a former super agent of the Company in Italy. The acquisition of
MoneyExpress provides us with the opportunity for further network expansion and more control of marketing and promotional activities
in the region. A subsidiary called MoneyGram Payment Systems Italy, S.r.l. was established, which operates the former Money Express
network comprised of approximately 900 active Italian agents.
During 2006, we continued to develop our retail strategy in Western Europe. Due to licensing requirements and marketing constraints in
certain European countries, operating Company owned retail stores and kiosks in addition to our typical agent model is a preferred
method of expanding the number of locations offering our services. In May 2006 we formed an entity in France, MoneyGram France
S.A. In order to offer the MoneyGram service directly to the public in France, our French subsidiary was required to become a licensed
financial institution. We were granted the license in September 2006 and opened our first store in France shortly thereafter. As of year-
end, we are operating Company owned retail stores or kiosks in France and Germany. We expect to open additional locations in these and
other markets on a targeted basis.
For additional information regarding our business, including our financial results, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
Our Segments
We conduct our business through two reportable business segments: Global Funds Transfer and Payment Systems. In late 2006, the sales,
marketing and product development teams for the two segments were combined to take advantage of the overlap and synergies between
the products and services offered by the two segments. While the sales, marketing and product development teams for the two segments
have merged, management continues to
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