Affordable
Reliable
Convenient
2004 Annual Report
1
A Letter from the CEO
MoneyGram 2004 Annual Report
A Letter from the CEO
Our Purpose:
To Our Shareholders:
To help people and businesses by
providing affordable, reliable, and
Welcome to MoneyGram International, Inc. and our first annual report. The
convenient payment services
year 2004 was remarkable for our business. We successfully completed two
Our Corporate Values:
Respect, Courage, Passion,
Integrity, Teamwork
major structural changes, saw significant growth in our money transfer
business, and repositioned our Payment Systems official check business.
These events and many other accomplishments in 2004 prepare our
company for a bright future.
Phil Milne
President and CEO
In March 2004, we sold our Game Financial business, enabling us to sharpen
our focus on our core business. In June we completed our spin-off from Viad
Corp, and MoneyGram International began “when-issued” trading on the
NYSE on June 22. Our total return from the beginning of “when-issued”
trading through December 31, 2004, was 8.5 percent, compared to 7.8
percent for the S&P 500.
Our employees rose to the challenge of bringing our company public, while
never losing sight of our core purpose: to provide people and businesses
with affordable, reliable and convenient payment services.
At MoneyGram International, our corporate values form the foundation of
our organization and have been the basis of our success. Our values of
respect, courage, passion, integrity and teamwork define how we interact
with all our stakeholders, from our consumers and customer-partners to our
shareholders and one another. Every employee is expected to demonstrate
these traits every day, as well as comply with the requirements of our
corporate code of ethics.
We leave 2004 having reached several milestones:
• Grew the global money transfer agent network by 22 percent to more
than 77,000 agent locations.
• Achieved money transfer transaction volume growth of more than
25 percent for 14 consecutive quarters.
• Expanded the money transfer business into the financial institution
market in the U.S. with the signing of two major domestic banks as
money transfer agents.
• Enhanced our value proposition to more consumers around the globe
by introducing the right currency with the right fee structure.
MoneyGram 2004 Annual Report
A Letter from the CEO
2
• Broadened distribution channels for global money transfer by introducing
Internet money transfers through MoneyGram eMoney Transfer.
• Positioned the official check business to capitalize on improving interest
rates over the long term and increased fees.
To enhance stockholder value in 2005, we plan to:
• Continue to expand our agent base and broaden our distribution channels.
• Increase our investment in our global branding strategy, technology
and people.
• Introduce new products and enhancements.
• Step up our initiative to cross-sell our Global Funds Transfer products to
the financial institution marketplace.
• Continue to invest in compliance with regulatory requirements, including
money transfer regulations and Sarbanes-Oxley.
• Continue to support the communities where we do business through our
five-year commitment with Habitat for Humanity to build homes around
the world and our MoneyGram Global Giving initiative.
We have adopted strong corporate governance policies, adhering to
principles that are required by the New York Stock Exchange. A majority
of our board of directors is independent and all are experienced business
people. I want to thank them for the invaluable support and counsel as
we worked through the successful spin-off and launch of MoneyGram
International as an independent, publicly traded New York Stock
Exchange company.
I would like to thank everyone who helped us accomplish so much in 2004.
This includes our hard-working employees who share our vision and values,
our business partners, our loyal customers and our shareholders.
As we look forward to 2005 and beyond, we are driven by our vision to
provide affordable, reliable and convenient payment services, and are guided
by our values. Thank you for your continued support.
Corporate Governance
MoneyGram International is
committed to fair and ethical
business practices that
incorporate clear corporate
values, strong corporate
governance, integrity in
financial reporting and strict
compliance with laws governing
our business activities.
The values that are the
cornerstone of our corporate
culture are respect, courage,
passion, integrity and
teamwork.
MoneyGram has a code of
ethics. Our employees are
educated to conduct themselves
in a manner that demonstrates
high standards of business and
personal ethics as well as
compliance with laws.
The majority of our board is
independent. MoneyGram’s
audit committee, human
resources committee, finance
and investment committee, and
corporate governance and
nominating committees are all
composed entirely of
independent directors.
In 2004, we began our
Sarbanes-Oxley Section 404
assessment of the design and
effectiveness of our internal
controls over financial reporting.
We will report on internal
controls for the year ending
December 31, 2005.
Sincerely,
Philip W. Milne
Chief Executive Officer
What Guides Us: Our Strategic Focus
3
Global Funds Transfer
MoneyGram 2004 Annual Report
Global Funds Transfer Group
Products & Services:
Money Transfer
The MoneyGram® International
money transfer service allows
consumers to send money
around the world in as little
as 10 minutes. The global
network comprised of retailers,
international post offices and
financial institutions, now has
more than 77,000 agents in
more than 170 countries.
Bill Payment Services
ExpressPaymentsm is an urgent
bill payment service that
consumers can use at any
money transfer agent location
in the U.S. Typically it is used
by consumers who may be late
in paying a bill such as a car or
mortgage payment.
FlashPay® and BuyPay® are
routine bill payment services for
many unbanked or underbanked
consumers. These services are
available at selected money
order agent locations.
Money Orders
Travelers Express money orders
can be purchased at more than
53,000 agent locations in the
U.S. Money orders are
commonly used by individuals
without checking accounts for
paying bills, and they are also
used by consumers to pay for
Internet purchases.
Global Funds Transfer
The Global Funds Transfer (GFT) segment encompasses MoneyGram’s fast-
growing international money transfer business and urgent bill pay business,
as well as money orders and in-person bill payments. MoneyGram is still in
the early stages of this product life cycle, and we see excellent opportunity
for growth. When the MoneyGram money transfer business was purchased
in 1998, there were only 25,000 money transfer agents in the network
representing about 100 countries. Today, the network has grown to more
than 77,000 agents in more than 170 countries.
Global remittances are growing at a
steady clip, and the core consumer of
our services - the immigrant -
continues to move to countries with
greater economic opportunity.
MoneyGram continues to expand its
network and products to provide
affordable, reliable and convenient
payment services to these consumers,
every step along their way.
MoneyGram’s eMoney Transfer service, launched in early 2004, is providing
our customers with the convenience of the Internet channel with ACH,
credit card and debit card payment choices. We will continue to expand
payment options for our consumers with the introduction in 2005 of new
products utilizing stored value cards and bank account direct deposits.
GFT aims to increase its market share through focused value pricing,
network expansion and investments in technology and marketing.
Pricing: MoneyGram continues to lead the way in providing competitive
pricing and remains committed to providing the better value proposition
market by market. GFT has carefully positioned its consumer pricing
between the higher priced competition in the market and the smaller niche
players. It continues to offer the right value by getting the fee and foreign
exchange combination right, and paying receive funds in the preferred
local currency.
Network Expansion: GFT significantly expanded its distribution channels in
2004, adding agent locations in key send markets such as the U.S., Spain and
Italy, as well as key receive markets such as China, India, Brazil and Nigeria.
GFT also expanded its money transfer network into domestic banking
channels with the addition of two major U.S. banks.
MoneyGram 2004 Annual Report
Global Funds Transfer
4
Technology: In addition to the new products already mentioned, GFT will
strive to maintain its leadership in point-of-sale (POS) technology. Our POS
systems allow us to interact with our customers and agents via a PC with
a dedicated line or dial-up, an agent’s own POS platform or through
MoneyGram’s call center.
Marketing: MoneyGram understands the importance of brand presence and
consistency in its messaging to create a strong relationship with its
consumers as they migrate around the globe. We implement marketing
tactics to reach out and speak to the customer in his or her native language
and build brand loyalty at the local level. Street teams and task forces made
up of local people work in their own communities to build awareness and a
positive image for MoneyGram and its neighborhood agents. Outdoor signs
in high-traffic areas reach consumers where they live, work and play.
MoneyGram carefully selects key areas around the world to run broad-based
advertising on television, radio, print and other media – to build strong
name recognition and ensure that consumers in both the send and receive
markets identify MoneyGram as a name they can trust.
Flexibility and co-branding with local
agents is one of MoneyGram’s strengths.
Together we create awareness for
MoneyGram and its agents, making each a
hometown favorite while continually
driving the business growth at a record
pace. Through sponsorship programs with
Habitat for Humanity, disaster relief
programs and other community outreach
efforts, MoneyGram demonstrates its
strong commitment to giving back to
communities around the world.
MoneyGram-sponsored Habitat
home dedication
Quezaltenango, Guatemala
March, 2004
This stepped-up marketing approach, additional sales and marketing “feet
on the ground” and a sharper focus on receive market activity puts
MoneyGram in an excellent position to expand its market share. We
continue to remain disciplined in measuring and controlling our marketing
expenses. Our increased marketing spending in 2005 will be allocated
to tried-and-tested ethnic marketing campaigns and activity in the
receive markets.
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Payment Systems
MoneyGram 2004 Annual Report
Payment Systems
Products & Services:
PrimeLink® Official Check
Services – PrimeLink is a
complete official check
outsourcing solution utilized
by financial institutions for
all of their official check
disbursement needs. PrimeLink
helps clients reduce costs,
enhance revenue, and improve
operational efficiency.
PrimeLinkPlus® Check
Disbursement Service – This
state-of-the-art disbursement
process utilizes Internet
technology to deliver an
efficient, financial-institution-
controlled check issuance
solution to companies who
have a business need to issue
good fund checks, either locally
or remotely.
Travelers Express/MoneyGram
financial money orders – These
money orders are issued by
banks, thrifts and credit unions.
Financial Institutions can take
advantage of the same
advanced dispenser technology
and online tools as our retail
money order agents.
MoneyGram Money Transfer
Service – For financial
institutions that wish to provide
a “retail” money transfer service
to customers, we offer access to
our network and a turnkey
installation of our systems.
FSMC – FSMC is a subsidiary that
processes high volume, low
dollar transactions for Fortune
500, commercial and
government entities. These
payments include consumer
rebates, gift certificates, direct
mail checks and government
benefit payments.
Payment Systems
MoneyGram International’s Payment Systems segment has been providing
financial institutions with payment processing services, primarily official
checks and money orders, for more than 30 years. In 2004, the Payment
Systems team continued to develop new business and expand existing
relationships. Through additional service offerings, Payment Systems was
able to leverage this delivery channel as well as retain valuable financial
institution customers.
An increased emphasis was placed on assisting financial institutions in
meeting the needs of their commercial customers. Payment Systems also
continues to develop and offer products and operational processes in
support of Check 21 and industry trends related to the transition from paper
to electronic transactions and imaging services.
In implementing these strategies, Payment Systems successfully launched
the MoneyGram money transfer service within the financial institution
channel. This was a very timely offering due to the growing demand by
financial institutions to provide money transfer services to their customers.
Through a strategic alliance, Payment Systems also began offering financial
institutions new options for enabling their corporate customers to use
electronic funds management. These options allow the financial institution
to offer products that automate the collection of paper-based items via the
ACH network.
In addition, the PrimeLinkplus product was enhanced in 2004 to include an
online funds verification integration option, enabling financial institutions
to verify and secure funds automatically for good fund checks initiated by
their corporate client base.
FSMC continues to be the industry leader in rebate and fulfillment
processing. Technology enhancements, such as FSMC On-Line, created
significant efficiencies for our customers. Additionally, FSMC introduced
and continues to grow a Canadian rebate program to meet the needs of
its global corporate customers.
In support of these strategies, Payment Systems continues to expand
product and service offerings for this important business segment. These
products will enable our corporate and financial institutions clients to meet
the evolving needs of their commercial clients, broadening our relationships
with this strong and loyal customer base.
MoneyGram 2004 Annual Report
Corporate Leadership
MoneyGram International
Board of Directors
Robert H. Bohannon, Chairman
Phoenix, Arizona
Chairman, President & Chief Executive
Officer, Viad Corp, tradeshow and
exhibit services; travel and
recreation services
Philip W. Milne
Minneapolis, Minnesota
President & Chief Executive Officer,
MoneyGram International, Inc.
Jess T. Hay
Dallas, Texas
Chairman, Texas Foundation for
Higher Education
Judith K. Hofer
Portland, Oregon
Consultant to May Department Stores
and former President & Chief Executive
Officer, May Merchandising/MDSI,
a May Department Stores Company
Donald E. Kiernan
Naples, Florida
Retired Senior Executive Vice President
& Chief Financial Officer, SBC
Communications, Inc.,
a telecommunications provider
Robert C. Krueger
New Braunfels, Texas
Business Consultant and former Oxford
University professor, U.S. Senator, U.S.
Congressman and U.S. Ambassador
Linda Johnson Rice
Chicago, Illinois
President & Chief Executive Officer,
Johnson Publishing Company, Inc.,
Publisher of Ebony and Jet magazines
Douglas L. Rock
Houston, Texas
Chairman & Chief Executive Officer,
Smith International, Inc., a producer of
oil & gas field equipment
Albert M. Teplin
Rockville, Maryland
Economist and consultant to
businesses and governments
including the Federal Reserve
Timothy R. Wallace
Dallas, Texas
Chairman, President & Chief Executive
Officer, Trinity Industries, Inc.,
a manufacturer of rail and
trucking equipment
Executive Officers
Philip W. Milne, President & Chief
Executive Officer
David J. Parrin, Chief Financial Officer
Anthony P. Ryan, Vice President
General Manager, Global Funds Transfer
William J. Putney, Vice President
Chief Investment Officer
Mary A. Dutra, Vice President
General Manager, Payment Systems
Teresa H. Johnson, Vice President
General Counsel & Secretary
Cindy J. Stemper, Vice President
Human Resources & Facilities
Jean C. Benson, Vice President
Controller
Theodore F. Ceglia, Vice President
Treasurer
Other Senior Management
David A. Albright, Vice President
Chief Information Officer
Barbara L. Bilow, Vice President
Operations
Daniel J. Collins, Vice President
Audit
Michael Daugherty, Vice President
Payment Systems & Marketing
Robert Wayne Glaus, Vice President
Information Technology
Thomas E. Haider, Vice President
Government Affairs, Associate General
Counsel & Chief Compliance Office
John Hempsey, Chief Executive Officer
MoneyGram International Limited
Ann G. Jackson, Vice President
Market Development
Mark A. Kruempel, Vice President
Operations
Daniel J. O’Malley, Vice President
Domestic - The Americas
Patricia D. Phillips, Vice President
Investor Relations & Corporate
Communications
Stockholder Information
Corporate Headquarters
MoneyGram International, Inc.
1550 Utica Avenue South
Suite 100
Minneapolis, MN 55416
(952) 591-3000
www.moneygram.com
Annual Meeting
MoneyGram International, Inc. will hold
its Annual Meeting of stockholders
at 9:00 a.m. on May 10, 2005, at The
Grand Hotel, 615 Second Avenue South,
Minneapolis, MN 55402
Investor Information
Securities analysts and investors
seeking additional information about
MoneyGram International, Inc. should
contact the Investor Relations
Department at (952) 591-3840
Transfer Agent
To change your address, make inquiries
regarding dividend payments or to
mail Common Stock certificates for
transfer, please contact:
Wells Fargo Shareowner Services
P.O. Box 64854
St. Paul, MN 55164-0854
(866) 877-6290
www.wellsfargo.com/shareownerservices
Common Stock certificates may be
delivered to the following offices for
transfer:
Wells Fargo Shareowner Services
161 North Concord Exchange
South St. Paul, MN 55075-1139
Wells Fargo Shareowner Services
c/o Depository Trust Co., T.A. Drop
55 Water Street
New York, NY 10041-0001
Certifications
The Company has included with this
Annual Report the Chief Executive
Officer and Chief Financial Officer
certifications required by Section 302 of
the Sarbanes-Oxley Act. The Company
has also submitted the required annual
Chief Executive Officer certification to
the New York Stock Exchange.
Corporate Headquarters
MoneyGram International, Inc.
1550 Utica Avenue South
Suite 100
Minneapolis, MN 55416
(952) 591-3000
www.moneygram.com