-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MhWXh+dvBbeRvQq0TsHkXF7xbjEwUC8NKrf6/xywP9Ce1srt8MTtNwG84KqQLqfA U/WZZwDTVgl5fgBoTZ4ygw== 0001157523-04-009985.txt : 20041028 0001157523-04-009985.hdr.sgml : 20041028 20041028081826 ACCESSION NUMBER: 0001157523-04-009985 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041028 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20041028 DATE AS OF CHANGE: 20041028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONEYGRAM INTERNATIONAL INC CENTRAL INDEX KEY: 0001273931 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 161690064 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31950 FILM NUMBER: 041100950 BUSINESS ADDRESS: STREET 1: 1550 UTICA AVENUE SOUTH CITY: MINNEAPOLIS STATE: MN ZIP: 55416 BUSINESS PHONE: 9525913000 MAIL ADDRESS: STREET 1: 1550 UTICA AVENUE SOUTH CITY: MINNEAPOLIS STATE: MN ZIP: 55416 8-K 1 a4752588.txt MONEYGRAM INTERNATIONAL, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 28, 2004 MoneyGram International, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 001-31950 16-1690064 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 1550 Utica Avenue South, Minneapolis, Minnesota 55416 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (952) 591-3000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) None - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition --------------------------------------------- On October 28, 2004, MoneyGram International, Inc. issued a press release reporting financial results for its third quarter ended September 30, 2004, a copy of which is furnished herewith as Exhibit 99.1. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MONEYGRAM INTERNATIONAL, INC. By: /s/ Teresa H. Johnson -------------------------------------- Name: Teresa H. Johnson Title: Vice President, General Counsel and Secretary Date: October 28, 2004 EXHIBIT INDEX Exhibit No. Description of Document - ----------- ----------------------- 99.1 Press Release dated October 28, 2004 EX-99.1 2 a4752588ex991.txt MONEYGRAM INTERNATIONAL, INC. EXHIBIT 99.1 Exhibit 99.1 MoneyGram International Announces Third Quarter Results; Money Transfer Volume Grows 35 percent MINNEAPOLIS--(BUSINESS WIRE)--Oct. 28, 2004-- - ---------------------------------------------------------------------- ($ in millions) Q3 Q3 % 2004 2003 Change ---------------------- Revenue $216.2 $188.0 14.9% Commissions Expense 104.3 97.3 7.2 Net Revenue 111.9 90.8 23.4 Expenses 78.4 69.1 13.5 Income from Continuing Operations 24.5 18.5 32.6 Income from Discontinued Operations, net of tax - 6.3 NM Net Income 24.5 24.8 -1.3 Earnings per share Income from Continuing Operations $0.28 $0.22 27.3 Income from Discontinued Operations - $0.07 NM Net Income $0.28 $0.29 -3.4 Operating Margin 15.5% 11.5% NM - ---------------------------------------------------------------------- MoneyGram International, Inc. (NYSE:MGI), today announced third quarter 2004 income from continuing operations of $24.5 million, or $0.28 per share, up 33 percent from income from continuing operations of $18.5 million, or $0.22 per share in the third quarter 2003. Earnings per share from continuing operations of $0.28 in the third quarter 2004 includes net securities gains and charges for capitalized technology costs and intangibles assets, which in aggregate, netted to $0.04 per share. Net income for the third quarter 2004 was $24.5 million, or $0.28 per share, compared with $24.8 million, or $0.29 per share in the third quarter 2003. In the third quarter 2003, net income included discontinued operations related to Viad Corp of $6.3 million, or $0.07 per share. Third quarter 2004 results reflect: -- Strong performance of the Global Funds Transfer segment. Segment revenue grew nearly 20 percent in the third quarter 2004, driven by 27 percent revenue growth of money transfer. -- Net investment margin of 1.22 percent, computed as shown in Table One. As expected, this was less than second quarter 2004 net investment margin of 1.39 percent primarily due to higher short term interest rates mitigated by our hedging strategy. -- Net securities gains of $10.9 million pre-tax ($6.8 million after tax, which amounts to $0.08 per share). These net securities gains resulted from the early pay off of a security held in the investment portfolio, impairments of certain securities, and realized losses from repositioning of the portfolio. -- A charge of $3.1 million pre-tax ($1.9 million after tax, which amounts to $0.02 per share) for capitalized technology costs related primarily to a discontinued development project with Concorde EFS. The charge is included in transaction and operations support expense. -- A charge of $2.1 million pre-tax ($1.3 million after tax, which amounts to $0.02 per share) for other intangible assets. The charge is included in transaction and operations support expense. Philip Milne, president and chief executive officer said, "Money transfer transaction volume increased 35 percent in the third quarter and money transfer revenue increased 27 percent year over year worldwide. Money transfer agents delivered strong performance as a result of the company's point of sale technology, consumer value pricing initiatives, and local currency conversions. Money transfer is the company's growth driver and our developing agent base is becoming increasingly productive. These agents are delivering the affordable, reliable and convenient payment services consumers have come to expect from MoneyGram." Milne continued, "The money order business produced solid third quarter results. Money orders continue to provide a great foundation for the growth of our company. However, the official check and money order businesses still exhibit the effects of a challenging interest rate environment." Segment Highlights MoneyGram operates in two reportable business segments, Global Funds Transfer and Payment Systems. Global Funds Transfer ($ in millions) Q3 Q3 % 2004 2003 Change ---------------------- Revenue $137.7 $114.9 19.8% Commissions Expense 51.6 42.0 23.0 Net Revenue 86.1 72.9 18.0 Operating Income 27.4 24.5 12.0 Operating Margin 19.9% 21.3% NM For the Global Funds Transfer segment, which consists of money transfer (including urgent bill payment) and retail money orders, third quarter revenue increased nearly 20 percent to $137.7 million and operating income increased 12 percent to $27.4 million in the third quarter 2004. Both revenue and operating income improved as a result of money transfer revenue growth of 27 percent. Operating income in the third quarter 2004 includes $2.2 million in net securities gains and a $3.1 million charge for capitalized technology costs. Operating margin in the third quarter 2004 was 19.9 percent compared to 21.3 percent due to the shift in product mix from retail money order to money transfer. Money transfer transaction volume grew 35 percent compared to third quarter 2003, reflecting 13 consecutive quarters of growth over 25 percent. The money transfer agent network grew 21 percent from the third quarter of 2003 to over 74,000 agent locations. Money order transaction volume was flat, despite a market trend of declining paper-based payment instruments. Payment Systems ($ in millions) Q3 Q3 % 2004 2003 Change -------------------- Revenue $78.5 $73.1 7.3% Commissions Expense 52.7 55.3 -4.7 Net Revenue 25.8 17.8 44.5 Operating Income 9.4 3.7 158 Operating Margin 12.0% 5.0% NM The Payment Systems segment includes PrimeLink/Official Check outsourcing services, financial money orders and controlled disbursement processing services. Payment Systems revenue increased $5.3 million or 7 percent to $78.5 million in the third quarter 2004, driven by a $6 million increase in net securities gains. Fee and other revenue increased nearly 12 percent, however, this was offset by a decline in investment revenue (excluding gains) due to lower average invested funds. Operating income for the segment was $9.4 million in the third quarter 2004 and includes $8.7 million of net securities gains and a charge of $2.1 million related to intangible assets. The operating margin increased to 12.0 percent primarily due to higher net securities gains. Outlook MoneyGram International currently expects 2004 full year revenue growth in the range of 10 percent to 12 percent. Income from continuing operations per share is expected to be in the range of $0.21 to $0.24 for the fourth quarter and $0.71 to $0.74 for the full year 2004. The company expects fourth quarter 2004 income from continuing operations to be lower in comparison to the 2003 fourth quarter because last year's fourth quarter results included: -- Higher net investment revenue. Net investment revenue benefited in the fourth quarter 2003 from repositioning of the portfolio and hedge rebalancing activities. -- A pension curtailment gain of $3.8 million pre-tax included in fourth quarter 2003 results. Net investment margin for 2004 is expected to be in the range of 1.30 to 1.35 percent. These estimates are dependent on a variety of factors including interest rate levels and other factors. From time to time, events may occur which can results in unanticipated gains or losses. Our outlook does not reflect such events. Presentation of 2004 Financial Statements MoneyGram International, Inc. was spun off from Viad Corp on June 30, 2004. MoneyGram is considered the divesting entity and treated as the accounting successor to Viad for financial reporting purposes in accordance with the EITF No. 02-11, "Accounting for Reverse Spinoffs." MoneyGram results in 2004 include one-time debt tender and redemption expenses of $20.7 million, which amounts to $0.22 per share, related to the spin-off in the second quarter 2004. The historical results of MoneyGram through June 30, 2004, include Viad Corp as discontinued operations. Description of Tables Table One - Net Investment Revenue Analysis Table Two - Consolidated Statements of Income Table Three - Consolidated Balance Sheet Table Four - Consolidated Statements of Changes in Stockholders' Equity Table Five - Consolidated Statements of Income (2003 Quarterly) Table Six - Consolidated Statements of Income (2002 Quarterly) Table Seven - Segment Information Conference Call and Webcast MoneyGram International will have a conference call today at 9:00 a.m. EDT, 8:00 a.m. CDT to discuss third quarter results. Phil Milne, Chief Executive Officer, and Dave Parrin, Chief Financial Officer, will speak on the call. The conference call can be accessed by calling (800) 599-9795 in the U.S. or (617) 786-2905 internationally. The participant passcode is 87025068. The conference call will also be webcast through the company's website at www.moneygram.com. A replay of the conference call and webcast will be available one hour after the call concludes through 5:00 p.m. on November 4, 2004. The replay of the call is available at (888) 286-8010 in the U.S., or (617) 801-6888 internationally, passcode 22643499. The internet audio cast replay will be available at www.moneygram.com. About MoneyGram International, Inc. MoneyGram International, Inc., is a leading global payment services company and S&P MidCap 400 company. The company's major products and services include global money transfer, money orders and payment processing solutions for financial institutions and retail customers. For more information, visit the company's website at www.moneygram.com. Cautionary Information Regarding Forward-Looking Statements The statements contained in this press release regarding the business of MoneyGram International, Inc. that are not historical facts are forward-looking statements and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances due to a number of factors, including, but not limited to: (a) fluctuations in interest rates that may materially adversely affect revenue derived from investment of funds received from the sale of payment instruments; (b) material changes in the market value of securities we hold; (c) material changes in our need for and the availability of liquid assets; (d) successful management of the credit and fraud risks of retail agents, and the credit risk related to our investment portfolio; (e) continued growth rates approximating recent levels for consumer money transfer transactions and other payment product markets; (f) renewal of material retail agent and financial institution customer contracts, or loss of business from significant agents or customers; (g) technological and competitive changes in the payment services industry; (h) changes in laws, regulations or other industry practices and standards which may require significant systems redevelopment, reduce the market for or value of the company's products or services or render products or services less profitable or obsolete; (i) continued political stability in countries in which MoneyGram has material agent relationships; (j) material lawsuits or investigations; (k) catastrophic events that could materially adversely impact operating facilities, communication systems and technology of MoneyGram, its clearing banks or major customers, or that may have a material adverse impact on current economic conditions or levels of consumer spending; (l) material breach of security of any of our systems; and (m) other factors more fully discussed in MoneyGram's filings with the Securities and Exchange Commission. Actual results may differ materially from historical and anticipated results. These forward-looking statements speak only as of the date on which such statements are made, and MoneyGram undertakes no obligation to update such statements to reflect events or circumstances arising after such date. TABLE ONE MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES NET INVESTMENT REVENUE ANALYSIS (In thousands) (Unaudited) Third Quarter 2004 vs 2004 2003 2003 ----------- ----------- ---------- Components of net investment revenue: Investment revenue $77,276 $76,783 $493 Investment commissions expense (1) 56,712 59,408 (2,696) ------------------------------------ Net investment revenue $20,564 $17,375 $3,189 ==================================== Average balances: Cash equivalents and Investments $6,714,587 $7,390,634 ($676,047) Payment service obligations (2) 5,315,246 6,034,968 (719,722) Average yields earned and rates paid (3): Investment yield 4.58% 4.12% 0.46% Investment commission rate 4.24% 3.91% 0.33% Net investment margin 1.22% 0.93% 0.29% September Year to Date 2004 vs 2004 2003 2003 ----------- ----------- ---------- Components of net investment revenue: Investment revenue $231,510 $245,439 $(13,929) Investment commissions expense (1) 160,164 179,136 (18,972) ------------------------------------ Net investment revenue $71,346 $66,303 $5,043 ==================================== Average balances: Cash equivalents and Investments $6,729,216 $7,090,293 ($361,077) Payment service obligations (2) 5,328,344 5,723,746 (395,402) Average yields earned and rates paid (3): Investment yield 4.60% 4.63% -0.03% Investment commission rate 4.02% 4.18% -0.16% Net investment margin 1.42% 1.25% 0.17% (1) Investment commissions expense reported includes payments made to financial institution customers, costs associated with swaps and the sale of receivables program. (2) Commissions are paid to financial institution customers based upon average outstanding balances generated by the sale of official checks only. The average balance in the table reflects only the payment service obligations for which commissions are paid and does include the average balance of the sold receivables ($400 million and $428 million for the third quarter of 2004 and 2003, respectively, $408 million and $434 million for the first nine months of 2004 and 2003, respectively) as these are not recorded on the consolidated balances sheets. (3) Average yields/rates are calculated by dividing the applicable amount shown in the "component of net interest revenue" section by the applicable amount shown in the "Average balances" section divided by the number of days in the period presented and multiplied by the number of days in the year. The "net investment margin" is calculated by dividing "Net investment revenue" by the "Cash equivalents and investments" average balance divided by the number of days in the period presented and multiplied by the number of days in the year. TABLE TWO MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data) (Unaudited) Three months ended Nine months ended September 30 September 30 2004 2003 2004 2003 --------- --------- --------- --------- REVENUE: Fee and other revenue $128,000 $108,067 $363,706 $307,958 Investment revenue 77,276 76,783 231,510 245,439 Securities gains and losses, net 10,877 3,198 12,078 (6,001) --------- --------- --------- --------- Total revenue 216,153 188,048 607,294 547,396 Fee commissions expense 47,593 37,864 132,021 104,798 Investment commissions expense 56,712 59,408 160,164 179,136 --------- --------- --------- --------- Total commissions expense 104,305 97,272 292,185 283,934 --------- --------- --------- --------- Net revenue 111,848 90,776 315,109 263,462 EXPENSES: Compensation and benefits 29,320 28,499 95,709 83,098 Transaction and operations support 33,383 26,030 89,069 76,712 Depreciation and amortization 7,439 6,841 22,058 19,990 Occupancy, equipment and supplies 7,012 5,894 22,727 19,230 Interest expense 1,234 1,882 4,361 7,877 Debt tender and redemption costs - - 20,661 - --------- --------- --------- --------- Total expenses 78,388 69,146 254,585 206,907 --------- --------- --------- --------- Income from continuing operations before income taxes 33,460 21,630 60,524 56,555 Income tax expense 8,945 3,142 17,365 5,220 --------- --------- --------- --------- Income from continuing operations 24,515 18,488 43,159 51,335 Income and gain from discontinued operations, net of tax - 6,348 21,282 36,400 --------- --------- --------- --------- NET INCOME $24,515 $24,836 $64,441 $87,735 ========= ========= ========= ========= Basic earnings per share Income from continuing operations $0.28 $0.22 $0.50 $0.59 Income from discontinued operations, net of tax - 0.07 0.24 0.42 --------- --------- --------- --------- Earnings per common share $0.28 $0.29 $0.74 $1.01 ========= ========= ========= ========= Average outstanding common shares 87,262 86,273 86,968 86,168 ========= ========= ========= ========= Diluted income per share Income from continuing operations $0.28 $0.22 $0.50 $0.59 Income from discontinued operations, net of tax - 0.07 0.24 0.42 --------- --------- --------- --------- Earnings per common share $0.28 $0.29 $0.74 $1.01 ========= ========= ========= ========= Average outstanding and potentially dilutive common shares 87,588 86,720 87,400 86,524 ========= ========= ========= ========= TABLE THREE MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) September 30 December 31 2004 2003 ------------ ------------ ASSETS Cash and cash equivalents $- $33,832 Cash and cash equivalents (substantially restricted) 788,687 1,025,026 Receivables, net (substantially restricted) 844,956 755,734 Investments (substantially restricted) 6,279,016 6,013,757 Property and equipment 90,273 95,207 Intangible assets 16,355 18,818 Goodwill 395,526 395,526 Assets of discontinued operations - 641,724 Other assets 103,023 242,530 ------------ ------------ Total assets $8,517,836 $9,222,154 ============ ============ LIABILITIES Payment service obligations $7,532,691 $7,421,481 Debt 150,000 201,351 Derivative financial instruments 77,307 174,588 Pension and other postretirement benefits 105,541 101,039 Preferred stock subject to mandatory redemption - 6,733 Accounts payable and other liabilities 92,731 115,922 Liabilities of discontinued operations - 332,257 ------------ ------------ Total liabilities 7,958,270 8,353,371 STOCKHOLDERS' EQUITY: Common shares, $.01 par value: 250,000,000 shares authorized, 88,556,077 issued and outstanding 886 149,610 Additional paid-in capital 75,360 218,783 Retained income 485,519 863,944 Unearned employee benefits and other (25,956) (35,442) Accumulated other comprehensive income (loss) 23,757 (35,208) Treasury stock - (292,904) ------------ ------------ Total stockholders' equity 559,566 868,783 ------------ ------------ Total liabilities and stockholders' equity $8,517,836 $9,222,154 ============ ============ TABLE FOUR MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands, except share data) (Unaudited) Unearned Employee Common Additional Retained Benefits Stock Capital Income and Other --------- ---------- --------- --------- Balance, December 31, 2003 $149,610 $218,783 $863,944 $(35,442) Net income 40,993 Dividends on common and preferred stock - - (7,807) - Employee benefit plans - (4,635) - 2,815 Treasury shares acquired Unrealized foreign currency translation adjustment - - - - Unrealized gain on available- for-sale securities - - - - Unrealized loss on derivative financial instruments - - - - Other, net - - 48 - --------- ---------- --------- --------- Balance, March 31, 2004 149,610 214,148 897,178 (32,627) Net income (loss) - - (1,067) - Dividends on common and preferred stock - - (7,822) - Employee benefit plans - 4,972 - 217 Unrealized foreign currency translation adjustment - - - - Unrealized gain on available- for-sale securities - - - - Unrealized loss on derivative financial instruments - - - - Other, net - - 170 - Spin off from Viad Corp (148,724) (139,051) (426,556) - --------- ---------- --------- --------- Balance, June 30, 2004 886 80,069 461,903 (32,410) Net income - - 24,515 - Dividends on common and preferred stock - - (899) - Employee benefit plans - (4,709) - 6,454 Unrealized foreign currency translation adjustment - - - - Unrealized gain on available- for-sale securities - - - - Unrealized loss on derivative financial instruments - - - - Other, net - - - - --------- ---------- --------- --------- Balance, September 30, 2004 $886 $75,360 $485,519 $(25,956) ========= ========== ========= ========= Accumulated Other Comprehensive Common (Loss) Stock in Income Treasury Total ------------- ---------- --------- Balance, December 31, 2003 $(35,208) $(292,904) $868,783 Net income 40,993 Dividends on common and preferred stock - - (7,807) Employee benefit plans - 5,474 3,654 Treasury shares acquired - Unrealized foreign currency translation adjustment (408) - (408) Unrealized gain on available-for- sale securities 31,035 - 31,035 Unrealized loss on derivative financial instruments (2,992) - (2,992) Other, net - - 48 ------------- ---------- --------- Balance, March 31, 2004 (7,573) (287,430) 933,306 Net income (loss) - - (1,067) Dividends on common and preferred stock - - (7,822) Employee benefit plans - (345) 4,844 Unrealized foreign currency translation adjustment (172) - (172) Unrealized gain on available-for- sale securities (76,570) - (76,570) Unrealized loss on derivative financial instruments 72,448 - 72,448 Other, net - - 170 Spin off from Viad Corp - 287,775 (426,556) ------------- ---------- --------- Balance, June 30, 2004 (11,867) 0 498,581 Net income - - 24,515 Dividends on common and preferred stock - - (899) Employee benefit plans - - 1,745 Unrealized foreign currency translation adjustment 293 - 293 Unrealized gain on available-for- sale securities 45,787 - 45,787 Unrealized loss on derivative financial instruments (10,456) - (10,456) Other, net - - - ------------- ---------- --------- Balance, September 30, 2004 $23,757 $- $559,566 ============= ========== ========= TABLE FIVE MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data) (Unaudited) Year Ended 1st 2nd 3rd 4th December Quarter Quarter Quarter Quarter 31 2003 2003 2003 2003 2003 -------- --------- --------- --------- --------- REVENUE: Fee and other revenue $97,063 $102,828 $108,067 $111,044 $419,002 Investment revenue 86,638 82,017 76,783 77,661 323,099 Securities gains and losses, net (12,075) 2,876 3,198 1,123 (4,878) -------- --------- --------- --------- --------- Total revenue 171,626 187,721 188,048 189,828 737,223 Fee commissions expense 31,947 34,987 37,864 40,199 144,997 Investment commissions expense 58,926 60,802 59,408 53,200 232,336 -------- --------- --------- --------- --------- Total commissions expense 90,873 95,789 97,272 93,399 377,333 -------- --------- --------- --------- --------- Net revenue 80,753 91,932 90,776 96,429 359,890 EXPENSES: Compensation and benefits 28,066 26,533 28,499 24,399 107,497 Transaction and operations support 25,386 25,296 26,030 24,801 101,513 Depreciation and amortization 6,523 6,626 6,841 7,305 27,295 Occupancy, equipment and supplies 6,373 6,962 5,894 6,328 25,557 Interest expense 3,230 2,765 1,882 1,980 9,857 -------- --------- --------- --------- --------- Total expenses 69,578 68,182 69,146 64,813 271,719 -------- --------- --------- --------- --------- Income from continuing operations before income taxes 11,175 23,750 21,630 31,616 88,171 Income tax (benefit) expense (1,215) 3,293 3,142 7,265 12,485 -------- --------- --------- --------- --------- Income from continuing operations 12,390 20,457 18,488 24,351 75,686 Income from discontinued operations, net of tax 9,641 20,411 6,348 1,816 38,216 -------- --------- --------- --------- --------- NET INCOME $22,031 $40,868 $24,836 $26,167 $113,902 ======== ========= ========= ========= ========= Diluted income per share Income from continuing operations $0.14 $0.24 $0.22 $0.28 $0.87 Income from discontinued operations, net of tax 0.11 0.23 0.07 0.02 0.44 -------- --------- --------- --------- --------- Earnings per common share $0.25 $0.47 $0.29 $0.30 $1.31 ======== ========= ========= ========= ========= Average outstanding and potentially dilutive common shares 86,326 86,508 86,720 86,891 86,619 ======== ========= ========= ========= ========= Basic earnings per share Income from continuing operations $0.14 $0.24 $0.22 $0.28 $0.87 Income from discontinued operations, net of tax 0.11 0.23 0.07 0.02 0.44 -------- --------- --------- --------- --------- Earnings per common share $0.25 $0.47 $0.29 $0.30 $1.31 ======== ========= ========= ========= ========= Average outstanding common shares 86,008 86,224 86,273 86,387 86,223 ======== ========= ========= ========= ========= TABLE SIX MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data) (Unaudited) Year Ended 1st 2nd 3rd 4th December Quarter Quarter Quarter Quarter 31 2002 2002 2002 2002 2002 -------- -------- -------- -------- --------- REVENUE: Fee and other revenue $83,060 $91,010 $94,320 $97,245 $365,635 Investment revenue 84,882 85,733 88,827 91,890 351,332 Securities gains and losses, net (2,341) (1,255) 2,954 (8,635) (9,277) -------- -------- -------- -------- --------- Total revenue 165,601 175,488 186,101 180,500 707,690 Fee commissions expense 25,856 29,484 30,510 32,418 118,268 Investment commissions expense 55,607 58,088 62,541 63,916 240,152 -------- -------- -------- -------- --------- Total commissions expense 81,463 87,572 93,051 96,334 358,420 -------- -------- -------- -------- --------- Net revenue 84,138 87,916 93,050 84,166 349,270 EXPENSES: Compensation and benefits 26,309 23,881 27,462 22,037 99,689 Transaction and operations support 25,825 25,578 23,597 21,608 96,608 Depreciation and amortization 6,514 6,191 6,497 6,692 25,894 Occupancy, equipment and supplies 5,932 6,112 5,888 7,248 25,180 Interest expense 3,930 3,846 4,101 3,335 15,212 -------- -------- -------- -------- --------- Total expenses 68,510 65,608 67,545 60,920 262,583 -------- -------- -------- -------- --------- Income from continuing operations before income taxes 15,628 22,308 25,505 23,246 86,687 Income tax expense 352 3,290 4,502 3,779 11,923 -------- -------- -------- -------- --------- Income from continuing operations 15,276 19,018 21,003 19,467 74,764 (Loss) income from discontinued operations, net of tax (24,619) 10,697 11,254 (14,210) (16,878) -------- -------- -------- -------- --------- NET (LOSS) INCOME $(9,343) $29,715 $32,257 $5,257 $57,886 ======== ======== ======== ======== ========= Diluted income per share Income from continuing operations $0.18 $0.22 $0.24 $0.23 $0.86 (Loss) income from discontinued operations, net of tax (0.29) 0.12 0.13 (0.17) (0.21) -------- -------- -------- -------- --------- (Loss) earnings per common share $(0.11) $0.34 $0.37 $0.06 $0.65 ======== ======== ======== ======== ========= Average outstanding and potentially dilutive common shares 86,095 87,672 86,616 86,068 86,716 ======== ======== ======== ======== ========= Basic earnings per share Income from continuing operations $0.18 $0.22 $0.24 $0.23 $0.87 (Loss) income from discontinued operations, net of tax (0.29) 0.12 0.13 (0.17) (0.21) -------- -------- -------- -------- --------- (Loss) earnings per common share $(0.11) $0.34 $0.37 $0.06 $0.66 ======== ======== ======== ======== ========= Average outstanding common shares 86,095 86,693 86,188 85,738 86,178 ======== ======== ======== ======== ========= TABLE SEVEN MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES SEGMENT INFORMATION (In thousands) (Unaudited) 2002 ------------------------------------------------- First Second Third Fourth Full Quarter Quarter Quarter Quarter Year --------- --------- --------- --------- --------- Revenue: Global Funds Transfer $94,992 $103,621 $107,638 $106,702 $412,953 Payment Systems 70,609 71,867 78,463 73,798 294,737 ------------------------------------------------- 165,601 175,488 186,101 180,500 707,690 Operating income: Global Funds Transfer 18,370 28,303 24,860 27,628 99,161 Payment Systems 6,421 5,270 7,873 2,094 21,658 ------------------------------------------------- 24,791 33,573 32,733 29,722 120,819 Interest expense 3,930 3,846 4,101 3,335 15,212 Other unallocated expenses 4,769 6,421 1,295 1,183 13,668 Minority interest in earnings 464 998 1,832 1,958 5,252 ------------------------------------------------- Income from continuing operations before income taxes $15,628 $22,308 $25,505 $23,246 $86,687 ================================================= Operating Margin: Global Funds Transfer 19.3% 27.3% 23.1% 25.9% 24.0% Payment Systems 9.1% 7.3% 10.0% 2.8% 7.3% 2003 ------------------------------------------------- First Second Third Fourth Full Quarter Quarter Quarter Quarter Year --------- --------- --------- --------- --------- Revenue: Global Funds Transfer $105,226 $111,500 $114,916 $118,466 $450,108 Payment Systems 66,400 76,221 73,132 71,362 287,115 ------------------------------------------------- 171,626 187,721 188,048 189,828 737,223 Operating income: Global Funds Transfer 21,690 24,169 24,453 26,511 96,823 Payment Systems (2,611) 6,289 3,650 7,795 15,123 ------------------------------------------------- 19,079 30,458 28,103 34,306 111,946 Interest expense 3,230 2,765 1,882 1,980 9,857 Other unallocated expenses 4,674 3,943 4,591 710 13,918 ------------------------------------------------- Income from continuing operations before income taxes $11,175 $23,750 $21,630 $31,616 $88,171 ================================================= Operating Margin: Global Funds Transfer 20.6% 21.7% 21.3% 22.4% 21.5% Payment Systems -3.9% 8.3% 5.0% 10.9% 5.3% 2004 ----------------------------- First Second Third Quarter Quarter Quarter --------- --------- --------- Revenue: Global Funds Transfer $120,969 $128,165 $137,688 Payment Systems 70,352 71,655 78,465 --------- --------- --------- 191,321 199,820 216,153 Operating income: Global Funds Transfer 20,978 24,777 27,393 Payment Systems 9,190 5,848 9,429 --------- --------- --------- 30,168 30,625 36,822 Debt tender and redemption costs - 20,661 - Interest expense 1,222 1,905 1,234 Other unallocated expenses 4,899 5,042 2,128 --------- --------- --------- Income from continuing operations before income taxes $24,047 $3,017 $33,460 ========= ========= ========= Operating Margin: Global Funds Transfer 17.3% 19.3% 19.9% Payment Systems 13.1% 8.2% 12.0% CONTACT: MoneyGram International, Inc., Minneapolis Investor Relations: Patricia D. Phillips, 952-591-3840 ir@moneygram.com -----END PRIVACY-ENHANCED MESSAGE-----