MoneyGram 2009 Annual Report Download - page 53

Table of Contents
$1.1 million. We purchased $46.0 million of treasury stock during 2007 and paid dividends on our common stock of $16.6 million.
Mezzanine Equity and Stockholders' Deficit
Mezzanine Equity — See Note 12 — Mezzanine Equity of the Notes to the Consolidated Financial Statements for information regarding
the mezzanine equity.
Stockholders' Deficit — On May 9, 2007, our Board of Directors approved a 5,000,000 share increase in our current authorization to
purchase shares of common stock for a total authorization of 12,000,000 shares. In 2007, we repurchased 1,620,000 shares of our
common stock under this authorization at an average cost of $28.39 per share. We suspended the buyback program in the fourth quarter
of 2007. As of December 31, 2009, we had repurchased a total of 6,795,000 shares of our common stock under this authorization and
have remaining authorization to purchase up to 5,205,000 shares.
Under the terms of the equity instruments and debt issued in connection with the recapitalization, we are limited in our ability to pay
dividends on our common stock. No dividends were paid on our common stock in 2009 and we do not anticipate declaring any dividends
on our common stock during 2010.
Off-Balance Sheet Arrangements
Through December 31, 2007, we had an agreement to sell undivided percentage ownership interests in certain receivables, primarily from
our money order agents, in an amount not to exceed $400.0 million. These receivables were sold to commercial paper conduits (trusts)
sponsored by a financial institution and represented a small percentage of the total assets in these conduits. Our rights and obligations
were limited to the receivables transferred, and were accounted for as sales. As a result, the assets and liabilities associated with these
conduits, including our sold receivables, were not recorded or included in our financial statements. The business purpose of this
agreement was to accelerate cash flow for investment. The receivables were sold at a discount based upon short-term interest rates. In
December 2007, we decided to cease selling receivables through a gradual reduction in the balances sold each period. In January 2008,
we terminated the facility. The agreement included a 5 percent holdback provision of the purchase price of the receivables and is included
in the Consolidated Statements of Loss in "Investment commissions expense." There was no expense recorded in 2009 related to the sales
of receivable, while expenses totaled $0.2 million and $23.3 million during 2008 and 2007, respectively.
ENTERPRISE RISK MANAGEMENT
Risk is an inherent part of any business. Our most prominent risk exposures are credit, interest rate, foreign currency exchange and
operational risk. See Part 1, Item 1A "Risk Factors" for a description of the principal risks to our business. Appropriately managing risk is
important to the success of our business and the extent to which we properly and effectively manage each of the various types of risk is
critical to our financial condition and profitability. Our risk management objective is to monitor and control risk exposures to produce
steady earnings growth and long-term economic value.
Management implements policies approved by our Board of Directors that cover our investment, capital, credit and foreign currency
policies and strategies. The Board receives periodic reports regarding each of these areas and approves significant changes to policy and
strategy. An Asset/Liability Committee, composed of senior management, routinely reviews investment and risk management strategies
and results. A Credit Committee, composed of senior management, routinely reviews credit exposure to our agents.
Following is a discussion of the strategies we use to manage and mitigate the risks we have deemed most critical to our business. While
containing forward-looking statements related to risks and uncertainties, this discussion and related analyses are not predictions of future
events. MoneyGram's actual results could differ materially from those anticipated due to various factors discussed under "Cautionary
Statements Regarding Forward-Looking Statements."
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