MasterCard 2008 Annual Report Download - page 101

MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except percent and per share data)
recurring basis, until fiscal years and interim periods beginning after November 15, 2008. As permitted by FSP
157-2, the Company has elected to delay the adoption of SFAS 157 for qualifying non-financial assets and
liabilities, such as property, plant and equipment, goodwill and intangible assets. The Company does not believe
the adoption of SFAS 157 for its non-financial assets and liabilities, that are not recognized at fair value on a
recurring basis, will have a material impact on the Company’s consolidated results of operations or financial
position.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities an amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 requires enhanced disclosures
about an entity’s derivative and hedging activities in an effort to improve the transparency of financial reporting
and is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 will not
impact the Company’s consolidated results of operations or financial position as its requirements are disclosure-
only in nature.
In June 2008, the FASB issued Staff Position Emerging Issues Task Force 03-6-1, “Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”).
FSP EITF 03-6-1 requires entities to allocate earnings to unvested and contingently issuable share-based payment
awards that have non-forfeitable rights to dividends or dividend equivalents when calculating EPS and also
present both basic EPS and diluted EPS pursuant to the two-class method described in SFAS No. 128, “Earnings
per Share”. FSP EITF 03-6-1 is effective January 1, 2009 and requires retrospective application. The Company
will adopt FSP EITF 03-6-1 during 2009 and is not able to project its impact on future presentations of EPS due
to the inherent complexities associated with projecting future financial performance. See Note 2 (Earnings (Loss)
Per Share (“EPS”)) for the Company’s calculation of the expected impact of FSP EITF 03-6-1 for the years
ended December 31, 2008 and 2007.
In December 2008, the FASB issued Staff Position 132(R)-1, “Employers’ Disclosures about Postretirement
Benefit Plan Assets” (“FSP SFAS 132R-1”). FSP SFAS 132R-1 provides guidance on an employer’s disclosures
about plan assets of a defined benefit pension plan or other postretirement plan, including disclosure of how
investment allocation decisions are made, major categories of plan assets, inputs and valuation techniques used to
measure the fair value of plan assets and concentrations of credit risk. FSP SFAS 132R-1 is effective for fiscal
years ending after December 15, 2009. FSP SFAS 132R-1 will not impact the Company’s consolidated results of
operations or financial position as its requirements are disclosure-only in nature.
Note 2. Earnings (Loss) Per Share (“EPS”)
The components of basic and diluted earnings per share are as follows for each of the years ended
December 31:
2008 2007 2006
Numerator:
Net income (loss) ............................... $(253,915) $1,085,886 $ 50,190
Denominator:
Basic EPS weighted average shares outstanding ....... 130,148 134,887 135,411
Dilutive stock options and restricted stock units ....... — 808 368
Diluted EPS weighted-average shares outstanding ..... 130,148 135,695 135,779
Earnings (Loss) per Share:
Basic ......................................... $ (1.95) $ 8.05 $ 0.37
Diluted ....................................... $ (1.95) $ 8.00 $ 0.37
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