MoneyGram 2009 Annual Report Download - page 16

Table of Contents
terrorism or health emergencies) that make it more difficult for individuals to migrate or work abroad could adversely affect our money
transfer remittance volume or growth rate. Sustained weakness in global economic conditions could reduce economic opportunities for
migrant workers and result in reduced or disrupted international migration patterns. Reduced or disrupted international migration patterns,
particularly in the United States or Europe, are likely to reduce money transfer transaction volumes and therefore have an adverse effect
on our results of operations.
If we lose key agents or are unable to maintain our Global Funds Transfer agent or biller networks, our business and results of
operations could be adversely affected.
Revenue from our money transfer and urgent bill payment services is derived from transactions conducted through our retail agent and
biller networks. Many of our high volume agents are in the check cashing industry. There are risks associated with the check cashing
industry that could cause this agent base to decline. We may not be able to retain all of our current retail agents or billers for other
reasons, as the competition for retail agents and billers is intense. If agents or billers decide to leave our agent network, or if we are
unable to add new agents or billers to our network, our revenue would decline.
Larger agents and billers in our Global Funds Transfer segment are increasingly demanding financial concessions and more information
technology customization. The development, equipment and capital necessary to meet these demands could require substantial
expenditures and there can be no assurance that we will have the available capital after paying dividends to the Investors and servicing
our debt, or that we will be allowed to make such expenditures under the terms of our debt agreements. If we were unable to meet these
demands, we could lose customers and our business and results of operations would be adversely affected.
A substantial portion of our transaction volume is generated by a limited number of key agents. During 2009 and 2008, our 10 largest
agents accounted for 48 percent and 44 percent, respectively, of our total company fee and investment revenue and 53 percent and
53 percent, respectively, of the fee and investment revenue of our Global Funds Transfer segment. In 2009 and 2008, our largest agent,
Walmart, accounted for 29 percent and 26 percent, respectively, of our total company fee and investment revenue and 32 percent and
31 percent, respectively, of the fee and investment revenue of our Global Funds Transfer segment. The term of our agreement with
Walmart runs through January 2013. If any of our key agents were not to renew their contracts with us, or if such agents were to reduce
the number of their locations, or cease doing business, we might not be able to replace the volume of business conducted through these
agents, and our business and results of operations would be adversely affected.
Litigation or investigations involving MoneyGram or our agents, which could result in material settlements, fines or penalties, may
adversely affect our business, financial condition and results of operations.
We are currently the subject of an informal SEC inquiry and stockholder litigation, including a securities class action lawsuit and one
lawsuit under ERISA. While we believe the suits are without merit and intend to vigorously defend against such claims, the outcome of
the lawsuits cannot be predicted at this time. The cost to defend the stockholder and ERISA litigation could be substantial, regardless of
the outcome. In addition, we have been, and in the future may be, subject to allegations and complaints that individuals or entities have
used our money transfer services for fraud-induced money transfers which may result in fines, settlements and litigation expenses.
Regulatory and judicial proceedings and potential adverse developments in connection with ongoing stockholder litigation may adversely
affect our business, financial condition and results of operations. There may also be adverse publicity associated with lawsuits and
investigations that could decrease agent and customer acceptance of our services. Additionally, our business has been in the past, and
may be in the future, the subject of class action lawsuits, regulatory actions and investigations and other general litigation. The outcome
of class action lawsuits, regulatory actions and investigations is difficult to assess or quantify. Plaintiffs or regulatory agencies in these
lawsuits, actions or investigations may seek recovery of very large or indeterminate amounts, and the magnitude of these actions may
remain unknown for substantial periods of time. The cost to defend or settle future lawsuits or investigations may be significant.
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