MoneyGram 2010 Annual Report Download - page 71

Table of Contents
We account for our liability for unrecognized tax benefits using a two-step approach to recognizing and measuring uncertain tax
positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is
more likely than not that the position will be sustained upon audit by the tax authority, including resolution of any related appeals or
litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50 percent likely of being
realized upon settlement. Our tax filings for various periods are subject to audit by various tax authorities. Actual tax amounts may be
materially different from amounts accrued based upon the results of audits by the tax authorities. The amount of income tax or benefit
recognized in our Consolidated Statements of Income (Loss) includes the impact of reserve provisions and changes to reserves that are
considered appropriate based on current information and management's best estimate, as well as any applicable related net interest and
penalties.
Prior to our June 2004 spin-off from Viad, income taxes were determined on a separate return basis as if we had not been eligible to be
included in the consolidated income tax return of Viad and its affiliates. We are considered the divesting entity in the spin-off and treated
as the "accounting successor" to Viad, with the continuing business of Viad is referred to as "New Viad." As part of the spin-off, we
entered into a Tax Sharing Agreement with Viad which provides for, among other things, the allocation between MoneyGram and New
Viad of federal, state, local and foreign tax liabilities and tax liabilities resulting from the audit or other adjustment to previously filed tax
returns. Although we believe that we have appropriately proportioned such taxes between MoneyGram and Viad, subsequent adjustments
may occur upon filing of amended returns or resolution of audits by various taxing authorities.
Recent Accounting Developments
Recent accounting developments are set forth in Note 2 — Summary of Significant Accounting Policies of the Notes to Consolidated
Financial Statements.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K and the documents incorporated by reference herein may contain forward-looking statements with
respect to the financial condition, results of operation, plans, objectives, future performance and business of MoneyGram International,
Inc. and its subsidiaries. Statements preceded by, followed by or that include words such as "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "believes" or similar expressions are intended to identify some of the forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with this statement, for purposes of
complying with the safe harbor provisions of that Act. These forward-looking statements involve risks and uncertainties. Actual results
may differ materially from those contemplated by the forward-looking statements due to, among others, the risks and uncertainties
described in this Annual Report on Form 10-K, including those described below and under Part I, Item 1A titled "Risk Factors," and in
the documents incorporated by reference herein. These forward-looking statements speak only as of the date on which such statements
are made. We undertake no obligation to update publicly or revise any forward-looking statements for any reason, whether as a result of
new information, future events or otherwise, except as required by federal securities law.
• Substantial Debt Service and Dividend Obligations. Our substantial debt service and our covenant requirements may adversely
impact our ability to obtain additional financing and to operate and grow our business and may make us more vulnerable to negative
economic conditions.
• Completion of the Proposed 2011 Recapitalization. Our proposed 2011 Recapitalization is subject to a number of conditions
beyond our control that may prevent, delay or otherwise materially adversely affect the completion of the 2011 Recapitalization.
• Significant Dilution to Stockholders and Control of Investors. The Series B Stock issued to the Investors at the closing of our 2008
Recapitalization, dividends accrued on the Series B Stock post-closing and special voting rights provided to the Investors' designees
on the Company's Board of Directors significantly dilute the interests of our existing stockholders and give the Investors control of
the Company.
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