MoneyGram 2006 Annual Report Download - page 47

Table of Contents
income securities. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and
annual liability measurements.
Our assumptions reflect our historical experience and management's best judgment regarding future expectations. Some of these
assumptions require significant management judgment and could have a material impact on the measurement of our pension obligation.
Future actual pension income or expense will depend on future investment performance, changes in future rates and various other factors
related to the populations participating in MoneyGram's pension plans. The discount rates used to determine benefit obligation and
pension expense are reviewed on an annual basis. Lowering the discount rate by 50 basis points would have increased 2006 pension
expense by $0.7 million, while increasing the discount rate by 50 basis points would have decreased 2006 pension expense by
$0.7 million.
MoneyGram's pension assets are primarily invested in marketable securities that have readily determinable current market values.
MoneyGram's investments are rebalanced regularly to stay within the investment guidelines. MoneyGram reviews the expected rate of
return in connection with significant changes in the pension asset allocation, the investing strategy or in inflation and interest rates. The
actual rate of return on average pension assets in 2006 was 11.3 percent, as compared to the expected rate of return of 8.0 percent. As the
expected rate of return is a long-term assumption and the widely accepted capital market principle is that assets with higher volatility
generate greater long-term returns, we do not believe that the actual return for one year is significantly different from the expected return
used to determine the benefit obligation. Changing the expected rate of return by 50 basis points would have increased/decreased 2006
pension expense by $0.6 million.
See Note 2 to the Consolidated Financial Statements for further information on key accounting policies for MoneyGram.
Recent Accounting Developments
Recent accounting developments are set forth in Note 2 of the Notes to the Consolidated Financial Statements.
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K and the documents incorporated by reference herein may contain forward-looking statements with
respect to the financial condition, results of operations, plans, objectives, future performance and business of MoneyGram International,
Inc. and its subsidiaries. Statements preceded by, followed by or that include words such as "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "believes" or similar expressions are intended to identify some of the forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with this statement, for purposes of
complying with the safe harbor provisions of that Act. These forward-looking statements involve risks and uncertainties. Actual results
may differ materially from those contemplated by the forward-looking statements due to, among others, the risks and uncertainties
described in this Annual Report on Form 10-K, including those described below and under Item 1A entitled "Risk Factors," and in the
documents incorporated by reference herein. We undertake no obligation to update publicly or revise any forward-looking statements for
any reason, whether as a result of new information, future events or otherwise.
• Agent Retention. We may be unable to renew material retail agent and financial institution customer contracts, or we may
experience a loss of business from significant agents or customers.
• Development of New and Enhanced Products and Related Investment. We may be unable to successfully and timely implement
new or enhanced technology, delivery methods and product and service offerings and we may invest in new products or services
that are not successful.
• Intellectual Property. The loss of intellectual property protection, the inability to secure or enforce intellectual property protection
or to successfully defend against an intellectual property infringement action could harm our business and prospects.
• Competition. We may be unable to compete against our large competitors, niche competitors or new competitors that may enter the
markets in which we operate.
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