MoneyGram 2009 Annual Report Download - page 126

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other Commitments — The Company has agreements with certain co-investors to provide funds related to investments in limited
partnership interests. As of December 31, 2009, the total amount of unfunded commitments related to these agreements was $0.4 million.
The Company has entered into a debt guarantee for $1.7 million on behalf of a money order and transfer agent. This debt guarantee will
be reduced as the agent makes payments on its debt. The term of the debt guarantee is for an indefinite period. The Company accrued a
liability of $0.3 million for the fair value of this debt guarantee. A corresponding deferred asset was recorded and was fully amortized as
of March 2009. The amortization expense was recognized as part of "Transaction and operations support" expense in the Consolidated
Statements of Loss.
Minimum Commission Guarantees — In limited circumstances as an incentive to new or renewing agents, the Company may grant
minimum commission guarantees for a specified period of time at a contractually specified amount. Under the guarantees, the Company
will pay to the agent the difference between the contractually specified minimum commission and the actual commissions earned by the
agent. Expense related to the guarantee is recognized in the "Fee commissions expense" line in the Consolidated Statements of Loss.
As of December 31, 2009, the liability for minimum commission guarantees is $1.7 million and the maximum amount that could be paid
under the minimum commission guarantees is $7.9 million over a weighted average remaining term of 1.3 years. The maximum payment
is calculated as the contractually guaranteed minimum commission times the remaining term of the contract and, therefore, assumes that
the agent generates no money transfer transactions during the remainder of its contract. However, under the terms of certain agent
contracts, the Company may terminate the contract if the projected or actual volume of transactions falls beneath a contractually specified
amount. With respect to minimum commission guarantees expiring in 2009 and 2008, the Company paid $0.7 million and $0.6 million,
respectively, or 18 percent and 15 percent, respectively, of the estimated maximum payment for the year.
Note 17 — Segment Information
The Company's reporting segments are primarily organized based on the nature of products and services offered and the type of consumer
served. During the fourth quarter of 2009, the Company revised its segment reporting to reflect changes in how it manages its business,
reviews operating performance and allocates resources. The Company now manages its business primarily through two reporting
segments, Global Funds Transfer and Financial Paper Products. The Global Funds Transfer segment provides bill payment services and
global money transfers to consumers through a network of agents and, in select markets, company-operated locations. The Financial
Paper Products segment provides official check services to financial institutions in the United States and money orders to consumers
through agent and financial institution locations in the United States and Puerto Rico. One agent of both the Global Funds Transfer
segment and the Financial Paper Products segment accounted for 29 percent, 26 percent and 20 percent of total fee and investment
revenue in 2009, 2008 and 2007, respectively. Businesses which are not operated within these segments are categorized as "Other," and
primarily relate to discontinued products and businesses. Prior year results have been revised for comparative purposes.
The Global Funds Transfer segment is managed as two regions, the Americas and EMEAAP, to coordinate sales, agent management and
marketing activities. The Americas region is composed of the United States, Canada, Mexico, Caribbean and Latin America. EMEAAP is
composed of Europe, Middle East, Africa and Asia Pacific. We monitor performance and allocate resources at both a regional and
reporting segment level. As the two regions routinely interact in completing money transfer transactions and share systems, processes and
licenses, we view the Global Funds Transfer segment as one global network. The nature of the consumers and products offered is the
same for each region, and the regions utilize the same agent network, systems and support functions. In addition, the regions have similar
regulatory requirements and economic characteristics. Accordingly, we aggregate the two regions into one reporting segment.
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