MoneyGram 2009 Annual Report Download - page 127

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Segment accounting policies are the same as those described in Note 3 — Summary of Significant Accounting Policies in the Notes to the
Consolidated Financial Statements. The Company manages its investment portfolio on a consolidated level, with no specific investment
security assigned to a particular segment. However, investment revenue is allocated to each segment based on the average investable
balances generated by that segment's sale of payment instruments during the period. Net securities gains (losses) are not allocated to the
segments as the investment portfolio is managed at a consolidated level. While the derivatives portfolio is also managed on a
consolidated level, each derivative instrument is utilized in a manner that can be identified to a particular segment. Interest rate swaps
historically used to hedge variable rate commissions were identified with the official check product in the Financial Paper Products
segment, while forward foreign exchange contracts are identified with the money transfer product in the Global Funds Transfer segment.
Any interest rate swaps related to the Company's credit agreements are not allocated to the segments.
Also excluded from operating income for Global Funds Transfer and Financial Paper Products are interest and other expenses related to
the Company's credit agreements, items related to the Company's preferred stock, operating income from businesses categorized as
"Other," certain pension and benefit obligation expenses, director deferred compensation plan expenses, executive severance and related
costs, and certain legal and corporate costs not related to the performance of the segments. Unallocated expenses in 2009 include
$20.3 million of legal reserves related to securities litigation and stockholder derivative claims, a net curtailment gain on benefit plans of
$14.3 million, $7.0 million of asset impairments and $4.4 million of executive severance and related costs. Unallocated expenses in 2008
include $16.7 million of executive severance and related costs and $7.7 million of transaction costs related to the recapitalization.
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