MoneyGram 2011 Annual Report Download - page 107

Table of Contents
Available−for−sale Investments (substantially restricted) — Available−for−sale investments consist of mortgage−backed securities, asset−backed securities
and agency debenture securities. After other−than−temporary impairment charges, the amortized cost and fair value of available−for−sale investments are as
follows at December 31:
2011
(Amounts in thousands, except net average price) Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Fair Value
Net
Average
Price
Residential mortgage−backed securities−agencies $ 65,211 $ 4,501 $ — $ 69,712 $107.63
Other asset−backed securities 8,951 15,281 — 24,232 5.49
United States government agencies 7,723 1,104 — 8,827 98.08
Total $ 81,885 $ 20,886 $ — $102,771 $ 21.83
2010
(Amounts in thousands, except net average price) Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Fair Value
Net
Average
Price
Residential mortgage−backed securities−agencies $121,677 $ 7,001 $ (93) $128,585 $106.37
Other asset−backed securities 10,690 13,020 — 23,710 4.68
United States government agencies 7,273 1,368 — 8,641 96.01
Total $139,640 $ 21,389 $ (93) $160,936 $ 25.27
At December 31, 2011 and 2010, approximately 76 percent and 85 percent, respectively, of the available−for−sale portfolio is invested in debentures of U.S.
government agencies or securities collateralized by U.S. government agency debentures. These securities have always had the implicit backing of the U.S.
government and the Company expects to receive full par value upon maturity or pay−down, as well as all interest payments. Included in other asset−backed
securities are collaterized debt obligations backed primarily by high−grade debt, mezzanine equity tranches of collateralized debt obligations and home
equity loans, along with private equity investments. The Other asset−backed securities continue to have market exposure. The Company has factored this
risk into its fair value estimates, with the average price of an asset−backed security at $0.05 per dollar of par at December 31, 2011.
Gains and Losses and Other−Than−Temporary Impairments — At December 31, 2011 and 2010, net unrealized gains of $21.5 million and $21.3 million,
respectively, are included in the Consolidated Balance Sheets in “Accumulated other comprehensive loss.” During 2011, 2010 and 2009, net losses of less
than $0.1 million, $0.3 million and $4.1 million, respectively, were reclassified from “Accumulated other comprehensive loss” to “Net securities (gains)
losses” in connection with other−than−temporary impairments and realized gains and losses recognized during the year. “Net securities (gains) losses” were
as follows for the year ended December 31:
(Amounts in thousands) 2011 2010 2009
Realized gains from available−for−sale investments $(32,820) $ — $ —
Realized losses from available−for−sale investments — — 2
Other−than−temporary impairments from available−for−sale investments 4 334 4,069
Valuation gains on trading investments and related put options — — (4,304)
Realized gains from trading investments and related put options — (2,449) (7,557)
Net securities gains $(32,816) $(2,115) $(7,790)
During 2011, the Company recognized settlements of $32.8 million equal to all of the outstanding principal from two securities classified in its “other
asset−backed securities”. These securities had previously been written down
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