MoneyGram 2008 Annual Report Download - page 114

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
pay the Company par value plus accrued interest. The put options are non-transferable and the Company retains its rights under the put
options in the event the preferred put options in the auction rate securities are exercised. The Company has recognized an asset related to
the put options with a fair value of $26.5 million in the "Other assets" line on the Consolidated Balance Sheets, with a corresponding gain
in the "Net securities losses" line in the Consolidated Statements of (Loss) Income. The fair value of the put options will be remeasured
each period through earnings, and should significantly offset any further unrealized losses recognized in the Consolidated Financial
Statements related to the Company's trading investments.
Available-for-sale Investments — Available-for-sale investments consist of mortgage-backed securities, asset-backed securities and
agency debenture securities. After other-than-temporary impairment charges, the amortized cost and fair value of available-for-sale
investments are as follows at December 31, 2008:
Gross Gross Net
Amortized Unrealized Unrealized Fair Average
(Amounts in thousands) Cost Gains Losses Value Price
Residential mortgage-backed securities — agencies $ 385,276 $ 6,523 $ (2) $ 391,797 $ 102.37
Other asset-backed securities 27,703 1,825 — 29,528 4.43
U.S. government agencies 16,463 986 — 17,449 91.84
Total $ 429,442 $ 9,334 $ (2) $ 438,774 $ 41.05
In connection with the Company's realignment of its investment portfolio, five securities that were previously included in "Residential
mortgage-backed securities" were reclassified to "Other asset-backed securities" during the first quarter of 2008. At December 31, 2008,
these five securities had a fair value of $1.0 million and an unrealized gain of less than $0.1 million. At December 31, 2007, the Company
had 81 securities of a similar nature with a fair value of $598.0 million and gross unrealized gains of $1.2 million. The classification of
securities has not been revised in disclosures pertaining to December 31, 2007 as the first quarter 2008 reclassification is not
representative of the Company's view of the investment portfolio as of December 31, 2007. After other-than-temporary impairment
charges, the amortized cost and fair value of available-for-sale investments were 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
Gains and Losses and Other-Than-Temporary Impairments: At December 31, 2008 and 2007, net unrealized gains of $9.3 million and
$42.6 million ($26.4 million net of tax), respectively, are included in the Consolidated Balance Sheets in "Accumulated other
comprehensive loss." No deferred tax liability is currently recognized for the net unrealized gains due to the deferred tax position
described in Note 15 — Income Taxes. During 2008, 2007 and 2006, losses of $33.7 million, $737.6 million and $1.7 million,
respectively, were reclassified from "Accumulated other comprehensive loss" to earnings in connection with the sale, maturity or pay-
down of the underlying securities
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