MasterCard 2009 Annual Report Download - page 106

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except percent and per share data)
Certain customer and merchant business agreements provide incentives upon entering into the agreement.
As of December 31, 2009 and 2008, other assets included amounts to be paid for these incentives and the related
liability was included in accrued expenses and other liabilities. Once the payment is made, the liability is relieved
and the other asset is reclassified to a prepaid expense.
Note 8. Property, Plant and Equipment
Property, plant and equipment consist of the following at December 31:
2009 2008
Building and land ...................................... $391,946 $ 216,670
Equipment ............................................ 254,830 250,395
Furniture and fixtures ................................... 52,101 51,124
Leasehold improvements ................................ 53,876 66,878
752,753 585,067
Less accumulated depreciation and amortization .............. (303,759) (278,269)
$ 448,994 $ 306,798
Effective March 1, 2009, MasterCard executed a new ten-year lease between MasterCard, as tenant, and the
Missouri Development Finance Board (“MDFB”), as landlord, for MasterCard’s global technology and
operations center located in O’Fallon, Missouri, called Winghaven (see Note 15 (Consolidation of Variable
Interest Entity)). The lease includes a bargain purchase option and is thus classified as a capital lease. The
building and land assets and capital lease obligation have been recorded at $154,000, which represents the lesser
of the present value of the minimum lease payments and the fair value of the building and land assets. The
Company received refunding revenue bonds issued by MDFB in the exact amount, $154,000, and with the same
payment terms as the capital lease and which contain the legal right of setoff with the capital lease. The Company
has netted its investment in the MDFB refunding revenue bonds and the corresponding capital lease obligation in
the consolidated balance sheet. The related leasehold improvements for Winghaven will continue to be amortized
over the economic life of the improvements.
As of December 31, 2009 and 2008, capital leases of $13,565 and $46,794, respectively, were included in
equipment. Accumulated amortization of capital leases was $6,181 and $36,180 as of December 31, 2009 and
2008, respectively.
Depreciation expense for the above property, plant and equipment, including amortization for capital leases
was $76,121, $59,097 and $49,311 for the years ended December 31, 2009, 2008 and 2007, respectively.
Note 9. Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2009 and 2008 are as
follows:
2009 2008
Beginning balance ....................................... $297,993 $239,626
Goodwill acquired during the year .......................... 13,518 67,066
Foreign currency translation ............................... 9,020 (8,699)
Impairment losses ....................................... (11,303) —
Ending balance ......................................... $309,228 $297,993
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