MoneyGram 2007 Annual Report Download - page 6

Table of Contents
Our Segments
We conduct our business through two segments: Global Funds Transfer and Payment Systems. In 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. However, management continues to review financial results and evaluate the performance of the
Company based on these two segments. For financial information regarding our segments, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations — Results of Operations — Segment Performance" and Note 16 — Segment
Information of the Notes to Consolidated Financial Statements. Following is a description of each segment.
Global Funds Transfer Segment
Our Global Funds Transfer segment provides money transfer services, money orders and bill payment services to consumers. Our
primary consumers are "unbanked," "underbanked" and "convenience users." "Unbanked consumers" are those consumers who do not
have a traditional relationship with a financial institution. "Underbanked consumers" are consumers who, while they may have a savings
account with a financial institution, do not have a checking account. "Convenience users" are consumers who, while they may have a
checking account, prefer to use our products and services on the basis of convenience or value.
In 2007, the Global Funds Transfer segment had revenue of $771.0 million and an operating loss of $60.4 million, including net securities
losses of $234.2 million primarily attributable to our money order product line. During 2007, 2006 and 2005, our international operations
generated 21 percent, 20 percent and 19 percent, respectively, of our total fee and investment revenue, and 29 percent, 28 percent and
29 percent, respectively of our Global Funds Transfer segment fee and investment revenue.
We conduct our Global Funds Transfer operations primarily through a worldwide network of agents. Our largest agent, Wal-Mart Stores,
Inc. ("Wal-Mart"), accounted for 20 percent, 17 percent and 13 percent of our total fee and investment revenue and 27 percent, 24 percent
and 19 percent of the fee and investment revenue of our Global Funds Transfer segment in 2007, 2006 and 2005, respectively. Wal-Mart
is the only customer that accounts for more than 10 percent of our total fee and investment revenue. Our contract with Wal-Mart in the
U.S. provides for the sale by Wal-Mart of our money orders, money transfer services and real-time, urgent bill payment services on an
exclusive basis. In conjunction with our Capital Transaction, we extended the term of the current agreement with Wal-Mart through
January 2013, agreed to certain commission increases over the term of the contract and agreed to create a trust for the benefit of
consumers who purchase money transfers and money orders at Wal-Mart locations.
During 2007, our largest agent in the United Kingdom increased the number of locations offering money transfers as they completed the
installation of the AgentConnect® platform. Domestically, we had two new significant national retail agent signings and one significant
agent renewal during 2007. During the first quarter of 2008, we extended the terms of the contracts with ACE Cash Express, Inc., in
addition to Wal-Mart (two of our largest agents). During 2007, 2006 and 2005, our ten largest agents accounted for 36 percent,
34 percent, and 28 percent, respectively, of our total fee and investment revenue and 49 percent, 48 percent and 42 percent, respectively,
of the fee and investment revenue of our Global Funds Transfer segment.
We provide Global Funds Transfer products and services utilizing a variety of proprietary point-of-sale platforms. We also operate two
customer service call centers in the United States and contract for additional call center services in Bulgaria and, starting in late 2007, the
Dominican Republic. These call centers provide multi-lingual customer service for both agents and consumers 24 hours per day, 365 days
per year.
Money Transfers: During 2007, 94 percent of our Global Funds Transfer segment fee and other revenue was generated by our money
transfer services (including bill payment). Money transfers are transfers of funds between consumers from one location to another.
Money transfers are used by consumers who want to transfer funds quickly, safely and efficiently to another individual within a country
or internationally. As of December 31, 2007, we provided money transfer services through approximately 143,000 money transfer agent
locations in approximately 180 countries and territories worldwide. These agent locations are located in the following geographic regions:
33,300 locations in North America; 22,200 locations in Latin America (including Mexico which represents 10,600 locations); 44,200
locations in Western Europe and the Middle East; 10,800 locations in the Indian subcontinent;
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