MoneyGram 2008 Annual Report Download - page 32

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Table of Contents
(2) Loss (income) from continuing operations before income taxes for 2008 includes a $29.7 million net loss on the termination of
swaps, a $26.5 million gain from put options on our trading investments, a $16.0 million non-cash valuation loss from changes in
the fair value of embedded derivatives on our Series B Stock and a goodwill impairment of $8.8 million related to a component of
our Global Funds Transfer segment. Net loss from continuing operations for 2007 includes a goodwill impairment of $6.4 million
related to a component of our Payment Systems segment.
(3) Unrestricted assets are substantially restricted assets less payment service obligations as calculated in Note 3 — Summary of
Significant Accounting Policies of the Notes to Consolidated Financial Statements. Substantially restricted assets are comprised of
cash and cash equivalents, receivables and investments. Substantially restricted assets for 2008 include $26.5 million for the
valuation of put options on our trading investments.
(4) Mezzanine Equity relates to our Series B Stock issued in the Capital Transaction described in Note 2 — Capital Transaction of the
Notes to Consolidated Financial Statements. See Note 12 — Mezzanine Equity of the Notes to Consolidated Financial Statements for
the terms of the Series B Stock.
(5) Cash dividends declared per share for 2004 is based on Viad declared dividends of $0.18 per share during the first half of 2004 and
MoneyGram declared dividends of $0.02 per share during the second half of 2004.
(6) Investable balances are comprised of cash and cash equivalents and investments.
(7) Net investment margin is determined as net investment revenue (investment revenue less investment commissions) divided by daily
average investable balances.
(8) Includes 30,000, 18,000, 16,000, 16,000 and 15,000 locations in 2008, 2007, 2006, 2005 and 2004, respectively, that issue both
money orders and offer money transfers.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our Consolidated Financial Statements and related Notes. This discussion
contains forward-looking statements that involve risks and uncertainties. MoneyGram's actual results could differ materially from those
anticipated due to various factors discussed under "Cautionary Statements Regarding Forward-Looking Statements" and elsewhere in this
Annual Report on Form 10-K.
Basis of Presentation
On December 18, 2003, MoneyGram International, Inc. ("MoneyGram") was incorporated in the state of Delaware as a subsidiary of
Viad Corp ("Viad") to effect the spin-off of Viad's payment services business (the "spin-off") operated by Travelers Express Company,
Inc. ("Travelers"). On June 30, 2004, Travelers was merged with a subsidiary of MoneyGram and Viad then distributed
88,556,077 shares of MoneyGram common stock to Viad's stockholders in a tax-free distribution. Effective December 31, 2005, the
entity that was formerly Travelers was merged into MoneyGram Payment Systems, Inc. ("MPSI"), with MPSI remaining as the surviving
corporation. The financial statements in this Annual Report on Form 10-K are presented on a consolidated basis and include the accounts
of the Company and our subsidiaries. See Note 3 — Summary of Significant Accounting Policies of the Notes to the Consolidated
Financial Statements for further information regarding consolidation. References to "MoneyGram," the "Company," "we," "us" and "our"
are to MoneyGram International, Inc. and its subsidiaries and consolidated entities. Our Consolidated Financial Statements are prepared
in conformity with accounting principles generally accepted in the United States of America ("GAAP").
During 2007, we paid $3.3 million in connection with the settlement of a contingency arising from the Sale and Purchase Agreement
related to the continued operations of Game Financial Corporation with one casino. We 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 for contingencies which expired. The following discussion of our
results of operations is focused on our continuing businesses.
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