MasterCard 2008 Annual Report Download - page 107
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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except percent and per share data)
gains are included in investment income within the consolidated statements of operations. Unrealized holding
gains, net of tax, of $62,366, were included in other comprehensive income for the year ended December 31,
2007 relating to the remaining ownership of this investment.
Note 5. Prepaid Expenses
Prepaid expenses consisted of the following at December 31:
2008 2007
Customer and merchant incentives ......................... $397,563 $ 357,761
Advertising ........................................... 45,608 33,603
Other ................................................ 72,536 39,856
Total prepaid expenses .................................. 515,707 431,220
Prepaid expenses, current ................................ (213,612) (156,258)
Prepaid expenses, long-term .............................. $302,095 $ 274,962
Prepaid customer and merchant incentives represent payments made to customers and merchants under
business agreements.
Note 6. Other Assets
Other assets consisted of the following at December 31:
2008 2007
Customer and merchant incentives .......................... $46,608 $ 70,043
Cash surrender value of keyman life insurance ................. 18,552 23,957
Cost and equity method investments ......................... 12,500 8,286
Other ................................................. 21,356 18,569
Total other assets ........................................ 99,016 120,855
Other assets, current ...................................... (32,619) (33,733)
Other assets, long-term ................................... $66,397 $ 87,122
Certain customer and merchant business agreements provide a bonus for agreeing to enter into the
agreement. As of December 31, 2008 and 2007, other assets included payments to be made for these bonuses and
the related liability was included in accrued expenses. The bonus is amortized over the life of the agreement.
Once the payment is made, the liability is relieved and the other asset is reclassified to a prepaid expense.
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