MoneyGram 2015 Annual Report Download - page 38

Table of Contents
The following table is a summary of the change in transaction and operations support from the respective prior year for the years ended December 31 :
(Amounts in millions) 2015
2014
For the period ended December 31 $ 332.2
$ 253.7
Change resulting from:
Outsourcing, independent contractor and consultant costs 19.9
19.3
Realized foreign exchange gains (12.1)
(0.9)
Impact from changes in exchange rates (11.7)
—
Legal expenses (9.9)
13.4
Non-income taxes (8.5)
5.0
Provision for loss 6.6
6.6
Other 5.2
(1.8)
Direct monitor costs 5.0
0.4
Reorganization and restructuring (2.1)
9.3
Marketing costs 0.4
7.3
Compliance enhancement program (0.2)
19.9
For the period ended December 31 $ 324.8
$ 332.2
In 2015 , transaction and operations support expense decreased primarily due to realized foreign exchange gains, the impact of the strengthening U.S. dollar, a
decrease in legal expenses due to the State Civil Investigative Demands matter which was substantially accrued for in 2014 and the wind down of the 2014 Global
Transformation Program reorganization and restructuring activities. These decreases were partially offset by an increase in outsourcing, independent contractor and
consulting costs as a result of continued investment in our compliance systems and operations as well as increased call volume due to initiatives under the
compliance enhancement program and an increase in our provision for loss due to our new instant ACH product. Additionally, direct monitor costs increased due
to remediation efforts related to the DPA.
In 2014 , transaction and operations support expense increased primarily as a result of the expenses associated with the 2014 Global Transformation Program,
which includes costs related to our reorganization and restructuring activities and our compliance enhancement program. The increase in costs for the 2014 Global
Transformation Program was $32.6 million , partially offset by a decrease in expenses of $3.4 million associated with the 2010 Global Transformation Initiative
which concluded in 2013. Expenses related to the compliance enhancement program increased $19.9 million as we continue to implement compliance
enhancement tools and processes. Additionally, we incurred increased expenses for outsourcing due to the shift from internal employees to outsourced vendors as
part of the 2014 Global Transformation Program. Capital transaction costs are related to the underwritten secondary public offering and share repurchase which
were completed on April 2, 2014. We incurred increased marketing costs due to the launch of our new low U.S. to U.S. pricing. Legal expenses increased primarily
due to the $11.0 million accrual associated with the State Civil Investigative Demands matter. Increased expenditures related to telecommunication costs are a
result of continued network, product and infrastructure growth. The increase in the provision for loss consists of amounts related to the closure of two agents
during 2014.
Occupancy,EquipmentandSupplies
Occupancy, equipment and supplies expense include facilities rent and maintenance costs, software and equipment maintenance costs, freight and delivery costs
and supplies.
In 2015 , occupancy, equipment and supplies increased $7.9 million , or 15 percent , when compared to 2014 , primarily due to maintenance charges on new
licenses and other software projects, including those relating to the compliance enhancement program. These increases were partially offset by the impact of the
strengthening U.S. dollar.
In 2014 , occupancy, equipment and supplies increased $5.4 million , or 11 percent , when compared to 2013 , as a result of increased rent and building operation
costs, equipment maintenance and compliance enhancement costs associated with the 2014 Global Transformation Program.
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