MoneyGram 2006 Annual Report Download - page 40

Table of Contents
shelf registration is intended to provide the Company with additional funding sources for general corporate purposes, including working
capital, capital expenditures, debt payment and the financing of possible acquisitions or stock repurchases.
Stockholders' Equity
On June 30, 2004, MoneyGram charged the historical cost carrying amount of the net assets of Viad in the amount of $426.6 million
directly to equity as a dividend.
On November 18, 2004, the Board authorized a plan to repurchase, at the Company's discretion, up to 2,000,000 shares of MoneyGram
common stock. On August 19, 2005, the Company's Board of Directors increased its share buyback authorization by 5,000,000 shares to
a total of 7,000,000 shares. In 2006, we repurchased 2,129,050 shares of our common stock under this authorization at an average cost of
$30.92 per share. As of December 31, 2006, we have repurchased a total of 5,175,000 shares of our common stock under this
authorization and have remaining authorization to purchase up to 1,825,000 shares.
On August 17, 2006, the Company's Board of Directors approved a small stockholder selling/repurchasing program. This program
enables MoneyGram stockholders with less than 100 shares of common stock as of August 21, 2006, to voluntarily purchase additional
stock to reach 100 shares or sell all of their shares back to the Company. We have purchased a total of 66,191 shares related to this
program, which has ended as of December 31, 2006.
During 2006, we paid $14.4 million in dividends on our common stock. In addition, the Board of Directors declared a dividend of
$0.05 per share of common stock on February 15, 2007 to be paid on April 2, 2007 to stockholders of record on March 16, 2007. Any
future determination to pay dividends on MoneyGram common stock will be at the discretion of our Board of Directors and will depend
on our financial condition, results of operations, cash requirements, prospects and such other factors as our Board of Directors may deem
relevant. During 2006 we increased the quarterly dividend from $0.04 to $0.05 per share. We intend to continue paying a quarterly
dividend of $0.05 per share in 2007, subject to Board approval, which will be funded through cash generated from operating activities.
Viad sold treasury stock in 1992 to its employee equity trust to fund certain existing employee compensation and benefit plans. In
connection with the spin-off, Viad transferred 1,632,964 shares of MoneyGram common stock to the MoneyGram International, Inc.
Employee Equity Trust (the "Trust") to be used by MoneyGram to fund employee compensation and benefit plans. At December 31,
2006, the Trust held 456,393 shares of MoneyGram common stock. The market value of the shares held by this Trust of $14.3 million at
December 31, 2006 represents unearned employee benefits that are recorded as a deduction from common stock and other equity and is
reduced as employee benefits are funded. For financial reporting purposes, the Trust is consolidated.
Off-Balance Sheet Arrangements
The Finance and Investment Committee of the Board of Directors generally approves any transactions and strategies, including any
potential off-balance sheet arrangements, which materially affect investment results and cash flows.
Sale of Receivables — We have an agreement to sell, on a periodic basis, undivided percentage ownership interests in certain receivables,
primarily from our money order agents, in an amount not to exceed $400.0 million. These receivables are sold to commercial paper
conduits (trusts) sponsored by a financial institution and represent a small percentage of the total assets in these conduits. Our rights and
obligations are limited to the receivables transferred, and are accounted for as sales transactions under SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. The assets and liabilities associated with these conduits,
including our sold receivables, are not recorded or included in our financial statements. In the fourth quarter of 2006, the Company
extended the agreement through December 2007. The business purpose of this arrangement is to accelerate cash flow for investment. The
receivables are sold at a discount based upon short-term interest rates. Executive management regularly reviews performance under the
terms of the agreement. On average we sold receivables totaling $382.6 million during 2006 for a total discount of $20.5 million.
Special Purpose Entities — See Notes 2 and 4 of the Notes to Consolidated Financial Statements for a discussion of our special purpose
entities.
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