-----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, Hmpjcq560fzY6MnqnF3g3cdGRzTOdFReSX7hbc1+QxZ9Kf0Tn1mRzOBqpGSwEe4H RAELgBBY7Ceo924QO8uwMA== 0001157523-05-000651.txt : 20050126 0001157523-05-000651.hdr.sgml : 20050126 20050126162414 ACCESSION NUMBER: 0001157523-05-000651 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050126 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20050126 DATE AS OF CHANGE: 20050126 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: 05550401 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 a4808425.txt MONEYGRAM 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): January 26, 2005 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 January 26, 2005, MoneyGram International, Inc. issued a press release to report financial results for its fourth quarter and year ended December 31, 2004, and to provide guidance for 2005. A copy of the press release 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: January 26, 2005 EXHIBIT INDEX Exhibit No. Description of Document - ----------- ----------------------- 99.1 Press Release dated January 26, 2005 EX-99.1 2 a4808425ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 MoneyGram International Announces Fourth Quarter and Full Year 2004 Results and Provides Guidance for 2005 MINNEAPOLIS--(BUSINESS WIRE)--Jan. 26, 2005--MoneyGram International, Inc. (NYSE:MGI): Money Transfer Volume Grows 38 percent in the Fourth Quarter and 36 percent for Full Year 2004 ($ in millions) Q4 Q4 % Year Year % 2004 2003 Change 2004 2003 Change Revenue $219.2 $189.8 15.5% $826.5 $737.2 12.1% Commissions Expense 111.3 93.4 19.2% 403.5 377.3 6.9% Net Revenue 107.9 96.4 11.9% 423.1 359.9 17.6% Expenses 79.5 64.8 22.6% 334.0 271.7 22.9% Income from Continuing Operations $22.0 $24.4 -9.8% $65.1 $75.7 -13.9% Income from Discontinued Operations, net of tax 0 $1.8 NM $21.3 $38.2 -44.3% Net Income $22.0 $26.2 -16.0% $86.4 $113.9 -24.1% Earnings per share Income from Continuing Operations $0.25 $0.28 -10.0% $0.75 $0.87 -14.6% Income from Discontinued Operations 0 $0.02 NM $0.24 $0.44 -44.8% Net Income $0.25 $0.30 -16.3% $0.99 $1.31 -24.8% Operating Margin 13.0% 16.7% NM 10.8% 12.0% NM MoneyGram International, Inc. (NYSE:MGI), today announced fourth quarter income from continuing operations of $22.0 million, or $0.25 per diluted share, compared to income from continuing operations of $24.4 million, or $0.28 per share in fourth quarter 2003. The company had provided guidance for income from continuing operations for fourth quarter 2004 in the range of $0.21 to $0.24. Net income in the fourth quarter 2004 of $22.0 million, or $0.25 per diluted share, compares to net income of $26.2 million, or $0.30 per share in fourth quarter 2003. Significant items benefiting the fourth quarter 2003 include discontinued operations of Viad Corp and Game Financial of $1.8 million, or $0.02 per share, and a pension curtailment gain of $3.8 million, which amounts to $0.03 per share. For full year 2004, income from continuing operations was $65.1 million, or $0.75 per share, compared to income from continuing operations of $75.7 million, or $0.87 per share in 2003. The company previously provided full year guidance for income from continuing operations of $0.71 to $0.74. Significant items affecting full year 2004, as previously disclosed, include a second quarter spin-off related charge for debt tender and redemption expenses of $19.3 million after tax which amounts to $0.22 per share, third quarter net securities gains of $6.8 million after tax and write-offs of $3.2 million after tax, which together amount to $0.04 per share. Full year 2004 net income of $86.4 million, or $0.99 per share, compares to net income of $113.9 million, or $1.31 per share in 2003. Net income for full year includes income from discontinued operations, after tax, related to Game Financial and Viad Corp of $0.24 per share in 2004 and $0.44 per share in 2003. In addition, full year 2004 includes the charge for debt tender and redemption, which amounts to $0.22 per share. Philip Milne, president and chief executive officer said, "The year 2004 has been a great one for our company. In June, we successfully completed our spin off from Viad Corp. The money transfer business produced strong results as we continued to invest in the business. During 2004, money transfer transaction volume increased 36 percent and money transfer revenue increased 28 percent. In addition, market conditions stabilized for our PrimeLink/Official Check business." Milne added, "I want to thank all MoneyGram employees who are working harder than ever to make our company one of the best payment services providers in the industry. Their efforts, resourcefulness and determination to succeed have produced great results in 2004. Their relentless focus makes it possible for MoneyGram to provide affordable, reliable and convenient payment products to our consumers and business partners." Milne said, "In 2005 we plan to build our brand by increasing our spending on marketing over 40 percent. We plan to enhance our infrastructure to support new product and agent growth. The vast potential of the global remittance market offers great opportunity. By making these investments now and over the next several years, our goal is to create a sustainable platform for future revenue and profitable growth of MoneyGram International." Segment Highlights MoneyGram operates in two reportable business segments, Global Funds Transfer and Payment Systems. Global Funds Transfer ($ in millions) Full Full Q4 Q4 % Year Year % 2004 2003 Change 2004 2003 Change ----------------------------------------------- Revenue $145.2 $118.5 22.6% $532.1 $450.1 18.2% Commissions Expense 55.9 44.3 26.3% 199.8 161.7 23.5% Net Revenue 89.4 74.2 20.4% 332.2 288.4 15.2% Operating Income $29.5 $26.5 11.1% $102.6 $96.8 6.0% Operating Margin 20.3% 22.4% NM 19.3% 21.5% NM For the Global Funds Transfer segment, which consists of money transfer (including urgent bill payment) and retail money orders, fourth quarter revenue increased 23 percent to $145.2 million over fourth quarter 2003 and operating income increased over 11 percent to $29.5 million in the fourth quarter 2004. Both revenue and operating income improved primarily as a result of growth in the money transfer business. Fourth quarter 2004 operating margin was 20.3 percent compared to 22.4 percent in the fourth quarter 2003. The decline in operating margin was due to the ongoing product mix shift from higher margin retail money order to money transfer. For the full year 2004, Global Funds Transfer segment revenue was $532.1 million and operating income was $102.6 million, up 18 percent and 6 percent, respectively, from 2003. Both revenue and operating income improved primarily as a result of growth in the money transfer business. Operating margin for the full year 2004 was 19.3 percent in comparison to 2003 operating margin of 21.5 percent. The decline in operating margin was predominantly due to the ongoing product mix shift from the higher margin retail money order to money transfer. In the fourth quarter 2004, money transfer transaction volume grew 38 percent compared to fourth quarter 2003, representing 14 consecutive quarters of growth over 25 percent. The money transfer agent network grew 22 percent from 63,000 in the fourth quarter 2003 to over 77,000 agent locations in the fourth quarter 2004. Money order transaction volume was flat, despite the market trend of declining paper-based payment instruments. Payment Systems ($ in millions) Full Full Q4 Q4 % Year Year % 2004 2003 Change 2004 2003 Change --------------------------------------------- Revenue $74.0 $71.4 3.7% $294.5 $287.1 2.6% Commissions Expense 55.4 49.1 12.7% 203.7 215.6 -5.5% Net Revenue 18.6 22.2 -16.3% 90.8 71.5 27.0% Operating Income $2.7 $7.8 -65.4% $27.2 $15.1 79.6% Operating Margin 3.6% 10.9% NM 9.2% 5.3% NM The Payment Systems segment includes PrimeLink/Official Check outsourcing services, financial money orders and controlled disbursement processing services. Payment Systems revenue grew 4 percent to $74.0 million in the fourth quarter 2004 compared to fourth quarter 2003. Operating income for the segment was $2.7 million in the fourth quarter 2004, down from $7.8 million in the fourth quarter 2003. Payment Systems operating margin was 3.6 percent in the fourth quarter 2004, down from 10.9 percent in 2003. The decline in margin is primarily due to higher commissions paid to financial institution customers, which was only partially offset by lower swap costs. For full year 2004, Payment Systems segment revenue was $294.5 million and operating income was $27.2 million, up 3 percent and 80 percent compared to 2003. Operating margin for full year was 9.2 percent in comparison to 5.3 percent in 2003. 2005 Outlook MoneyGram International offers first time guidance for full year 2005 as follows: -- Net revenue (total revenue less total commissions) is expected to be in the range of $450 million to $475 million. -- Net investment margin is expected to be in the range of 130 to 140 basis points. Portfolio balances are expected to average $6.5 billion for the year, declining slightly from 2004 due to bank consolidation and the company's efforts to focus more on fee-based business. -- Income from continuing operations before taxes is expected to grow in the range of 28 percent to 35 percent from the $89.0 million income from continuing operations before taxes in 2004. As previously noted, the $89.0 million includes debt tender and redemption costs of $20.7 million, third quarter net securities gains of $10.9 million and third quarter write-offs of $5.2 million. Taking these items into account, 2004 income from continuing operations before tax is $104 million, and the expected growth in income from continuing operations before taxes for 2005 is in the range of 10 percent to 15 percent. -- Earnings per share is expected to be in the range of $0.99 to $1.03, which reflects an annual tax rate assumption of 25 percent. Income from continuing operations before taxes of $104 million and net investment margin are measures of performance that are not defined by generally accepted accounting principles (GAAP). This information is provided solely to assist an investor's understanding of the company's operations and should not be construed as an alternative to the reported results determined in accordance with GAAP. These estimates are dependent on a variety of factors including interest rate levels. From time to time, events may occur which can result in unanticipated gains or losses. Our outlook does not reflect such events. In addition, our outlook does not reflect the impact of Financial Accounting Standards No. 123R, Share-Based Payment. This standard requires that all share-based compensation awards be measured at fair value at the date of grant and expensed over their vesting or service periods. FAS 123R is effective for the company beginning in the third quarter 2005, however it can be adopted earlier. While the company has not determined whether it will early adopt, the estimated impact could be as much as $0.02 per share in 2005. 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." The historical results of MoneyGram through June 30, 2004, include Viad Corp as discontinued operations. Index of Tables Table One - Net Investment Revenue Analysis Table Two - Consolidated Statements of Income Table Three - Consolidated Statements of Income (2003 Quarterly) Table Four - Consolidated Statements of Income (2002 Quarterly) Table Five - Segment Information Conference Call and Webcast MoneyGram International will have a conference call today at 5:00 p.m. EST, 4:00 p.m. CST to discuss fourth quarter and full year results and guidance for 2005. 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) 299-7089 in the U.S. or (617) 801-9714 internationally. The participant passcode is 89535394. 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 February 3, 2005. The replay of the call is available at (888) 286-8010 in the U.S., or (617) 801-6888 internationally, passcode 23159420. 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 (m) our ability to comply with the requirements of Sarbanes-Oxley Section 404 regarding the effectiveness of internal controls; and (n) 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) Fourth Quarter 2004 vs 2004 2003 2003 ---- ---- ---- Components of net investment revenue: Investment revenue $84,473 $77,661 $6,812 Investment commissions expense (1) 59,748 53,200 6,548 --------------------------------- Net investment revenue $24,725 $24,461 $264 ================================= Average balances: Cash equivalents and Investments $6,900,848 $6,646,112 $254,736 Payment service obligations (2) 5,498,039 5,291,010 207,029 Average yields earned and rates paid (3): Investment yield 4.87% 4.64% 0.23% Investment commission rate 4.32% 3.99% 0.33% Net investment margin 1.43% 1.46% -0.03% Year to Date 2004 vs 2004 2003 2003 ---- ---- ---- Components of net investment revenue: Investment revenue $315,983 $323,099 $(7,116) Investment commissions expense (1) 219,912 232,336 (12,424) --------------------------------- Net investment revenue $96,071 $90,763 $5,308 ================================= Average balances: Cash equivalents and Investments $6,772,124 $6,979,247 ($207,123) Payment service obligations (2) 5,370,768 5,615,562 (244,794) Average yields earned and rates paid (3): Investment yield 4.67% 4.63% 0.04% Investment commission rate 4.09% 4.14% -0.05% Net investment margin 1.42% 1.30% 0.12% (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 ($394 million and $411 million for the fourth quarter of 2004 and 2003, respectively, $405 million and $428 million for the full year 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 "Components 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 Year ended December 31 December 31, 2004 2003 2004 2003 --------- --------- --------- --------- REVENUE: Fee and other revenue $137,234 $111,044 $500,940 $419,002 Investment revenue 84,473 77,661 315,983 323,099 Securities gains and losses, net (2,471) 1,123 9,607 (4,878) --------- --------- --------- --------- Total revenue 219,236 189,828 826,530 737,223 Fee commissions expense 51,540 40,199 183,561 144,997 Investment commissions expense 59,748 53,200 219,912 232,336 --------- --------- --------- --------- Total commissions expense 111,288 93,399 403,473 377,333 --------- --------- --------- --------- Net revenue 107,948 96,429 423,057 359,890 EXPENSES: Compensation and benefits 30,931 24,399 126,641 107,497 Transaction and operations support 31,695 24,801 120,767 101,513 Depreciation and amortization 7,509 7,305 29,567 27,295 Occupancy, equipment and supplies 8,102 6,328 30,828 25,557 Interest expense 1,214 1,980 5,573 9,857 Debt tender and redemption costs - - 20,661 - --------- --------- --------- --------- Total expenses 79,451 64,813 334,037 271,719 --------- --------- --------- --------- Income from continuing operations before income taxes 28,497 31,616 89,020 88,171 Income tax expense 6,526 7,265 23,891 12,485 --------- --------- --------- --------- Income from continuing operations 21,971 24,351 65,129 75,686 Income and gain from discontinued operations, net of tax - 1,816 21,283 38,216 --------- --------- --------- --------- NET INCOME $21,971 $26,167 $86,412 $113,902 ========= ========= ========= ========= Basic earnings per share Income from continuing operations $0.25 $0.28 $0.75 $0.87 Income from discontinued operations, net of tax - 0.02 0.24 0.44 --------- --------- --------- --------- Earnings per common share $0.25 $0.30 $0.99 $1.31 ========= ========= ========= ========= Average outstanding common shares 86,761 86,387 86,916 86,223 ========= ========= ========= ========= Diluted income per share Income from continuing operations $0.25 $0.28 $0.75 $0.87 Income from discontinued operations, net of tax - 0.02 0.24 0.44 --------- --------- --------- --------- Earnings per common share $0.25 $0.30 $0.99 $1.31 ========= ========= ========= ========= Average outstanding and potentially dilutive common shares 87,117 86,891 87,330 86,619 ========= ========= ========= ========= TABLE THREE 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 ======== ========= ========= ========= ========= 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 ======== ========= ========= ========= ========= 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 ======== ========= ========= ========= ========= TABLE FOUR 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 ======== ======== ======== ======== ========= 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 ======== ======== ======== ======== ========= 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 ======== ======== ======== ======== ========= TABLE FIVE 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 Fourth Full Quarter Quarter Quarter Quarter Year ------- ------- ------- ------- ---- Revenue: Global Funds Transfer $120,969 $128,165 $137,688 $145,243 $532,065 Payment Systems 70,352 71,655 78,465 73,993 294,465 --------------------------------------------- 191,321 199,820 216,153 219,236 826,530 Operating income: Global Funds Transfer 20,978 24,777 27,393 29,458 102,606 Payment Systems 9,190 5,848 9,429 2,696 27,163 --------------------------------------------- 30,168 30,625 36,822 32,154 129,769 Debt tender and redemption costs - 20,661 - - 20,661 Interest expense 1,222 1,905 1,234 1,214 5,575 Other unallocated expenses 4,899 5,042 2,129 2,443 14,513 --------------------------------------------- Income from continuing operations before income taxes $24,047 $3,017 $33,459 $28,497 $89,020 ============================================= Operating Margin: Global Funds Transfer 17.3% 19.3% 19.9% 20.3% 19.3% Payment Systems 13.1% 8.2% 12.0% 3.6% 9.2% CONTACT: MoneyGram International, Inc., Minneapolis Investor Relations: Patricia D. Phillips, 952-591-3840 ir@moneygram.com -----END PRIVACY-ENHANCED MESSAGE-----