MoneyGram 2007 Annual Report Download - page 95

Download and view the complete annual report

Please find page 95 of the 2007 MoneyGram annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
ACH Commerce — The Company purchased ACH Commerce, LLC ("ACH Commerce") in April 2005 for $8.5 million, of which
$1.1 million was to be paid upon the second anniversary of the acquisition. Based on the terms of the acquisition agreement, the
Company paid this amount during the second quarter of 2007.
Game Financial Corporation — In 2005, the Company recorded a gain of $0.7 million (net of tax) due to the partial resolution of
contingencies relating to the sale of Game Financial Corporation ("Game Financial"), which was completed in 2004. During 2007, the
Company paid $3.3 million in connection with the settlement of a contingency in the Sales and Purchase Agreement related to the
continued operations of Game Financial with one casino. The Company recognized a loss from discontinued operations of $0.3 million in
the Consolidated Statements of (Loss) Income in 2007, representing the recognition of a deferred tax asset valuation allowance, partially
offset by the reversal of the remaining liability.
Note 4 — Investments (Substantially Restricted)
At December 31, 2007 and 2006, no investments were classified as held-to-maturity. Trading investments have contractual maturities in
the year 2049, with auction dates typically 28 days after the date the Company purchases the security. After other-than-temporary
impairment charges, the amortized cost and fair value of available-for-sale investments are as follows at December 31, 2007:
Gross Gross
Amortized Unrealized Unrealized Fair
(Amounts in thousands) Cost Gains Losses Value
Obligations of states and political subdivisions $ 574,124 $ 23,255 $ — $ 597,379
Commercial mortgage-backed securities 250,726 3,097 — 253,823
Residential mortgage-backed securities 1,409,489 4,633 (2,170) 1,411,952
Other asset-backed securities 1,308,699 9,543 — 1,318,242
U.S. government agencies 373,173 1,768 (88) 374,853
Corporate debt securities 215,795 2,572 — 218,367
Preferred and common stock 12,768 — — 12,768
Total $ 4,144,774 $ 44,868 $ (2,258) $ 4,187,384
The amortized cost and fair value of available-for-sale investments are as follows at December 31, 2006:
Gross Gross
Amortized Unrealized Unrealized Fair
(Amounts in thousands) Cost Gains Losses Value
Obligations of states and political subdivisions $ 765,525 $ 25,006 $ (490) $ 790,041
Commercial mortgage-backed securities 585,611 6,659 (2,148) 590,122
Residential mortgage-backed securities 1,623,220 3,876 (23,219) 1,603,877
Other asset-backed securities 1,992,164 36,920 (7,839) 2,021,245
U.S. government agencies 342,749 2,564 (6,589) 338,724
Corporate debt securities 311,465 7,745 (470) 318,740
Preferred and common stock 30,175 13 (2,337) 27,851
Total $ 5,650,909 $ 82,783 $ (43,092) $ 5,690,600
Investment Ratings: In rating the securities in its investment portfolio, the Company uses ratings from Moody's Investor Service
("Moody's), Standard & Poors ("S&P") and Fitch Ratings ("Fitch"). If the rating agencies have split ratings, the Company uses the
highest rating from either Moody's or S&P. Securities issued or backed by
F-21