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Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
variable receive rate of 4.6 percent and 3.9 percent, respectively. See Note 5 for further information regarding the Company's portfolio of
derivative financial instruments.
In connection with the spin-off, Viad repurchased substantially all of its outstanding medium-term notes and subordinated debentures in
the amount of $52.6 million. The amounts not paid off were retained by New Viad. Viad also repaid all of its outstanding commercial
paper in the amount of $188.0 million and retired its industrial revenue bonds of $9.0 million. The Company incurred a loss of
$3.5 million in connection with these activities.
All amounts classified as debt on December 31, 2006 mature in June 2010. Total cash paid for interest on outstanding debt was
$8.5 million, $5.8 million and $2.0 million in 2006, 2005 and 2004, respectively.
Note 10. $4.75 Preferred Stock Subject to Mandatory Redemption
At December 31, 2003, Viad had 442,352 authorized shares of $4.75 preferred stock that were subject to mandatory redemption
provisions with a stated value of $100.00 per share, of which 328,352 shares were issued. Of the total shares issued, 234,983 shares were
outstanding at a net carrying value of $6.7 million, and 93,369 shares were held by Viad. In connection with the spin-off, Viad redeemed
its preferred stock for an aggregate call price of $23.9 million.
Note 11. Income Taxes
The components of income from continuing operations before income taxes are as follows for the year ended December 31:
(Amounts in thousands) 2006 2005 2004
United States $ 171,681 $ 111,868 $ 53,507
Foreign 5,092 34,508 35,513
Income from continuing operations before income taxes $ 176,773 $ 146,376 $ 89,020
Foreign income consists primarily of statutory income from MIL. MIL recognizes revenue based on a Services Agreement between MIL
and MPSI. Through 2005, MIL recognized revenue associated with the money transfer transactions generated by agents signed through
MIL. Effective January 1, 2006, MPSI entered into a new Services Agreement with MIL under which MIL recognizes revenue based on
their operating expenses incurred and reimbursed by MPSI. This change was made to recognize that the money transfer product is
licensed by MPSI and therefore, the transaction revenue and related costs should be reflected by MPSI for statutory purposes.
Income tax expense related to continuing operations for the year ended:
(Amounts in thousands) 2006 2005 2004
Current:
Federal $ 13,716 $ 27,324 $ 4,386
State 2,968 (1,038) 4,962
Foreign 2,880 5,004 8,261
Current income tax expense 19,564 31,290 17,609
Deferred income tax expense 33,155 2,880 6,282
Income tax expense $ 52,719 $ 34,170 $ 23,891
Income tax expense totaling $0.5 million, and $13.8 million in, 2005 and 2004, respectively, is included in "Income and gain from
discontinued operations, net of tax" in the Consolidated Statement of Income. Taxes paid were $38.7 million,
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