MasterCard 2009 Annual Report Download - page 142

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except percent and per share data)
The currencies underlying the foreign currency forward contracts consist primarily of the euro, U.K. pound
sterling, Australian dollar, and Norwegian Krone. The fair value of the foreign currency forward contracts
generally reflects the estimated amounts that the Company would receive or (pay), on a pre-tax basis, to
terminate the contracts at the reporting date based on broker quotes for the same or similar instruments. The
terms of the foreign currency forward contracts are generally less than 18 months. The Company had no deferred
gains or losses in accumulated other comprehensive income as of December 31, 2009 and 2008 as there were no
derivative contracts accounted for under hedge accounting.
The Company’s derivative financial instruments are subject to both credit and market risk. Credit risk is the
risk of loss due to failure of the counterparty to perform its obligations in accordance with contractual terms.
Market risk is the potential change in an instrument’s value caused by fluctuations in interest rates and other
variables related to currency exchange rates. Credit and market risk related to derivative instruments were not
material at December 31, 2009 and 2008.
Generally, the Company does not obtain collateral related to forward contracts because of the high credit
ratings of the counterparties. The amount of loss the Company would incur if the counterparties failed to perform
according to the terms of the contracts is not considered material.
Note 24. Segment Reporting
MasterCard has one reportable segment, “Payment Solutions.” All of the Company’s activities are
interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant
operating decisions are based upon analyses of MasterCard as one operating segment. The Chief Executive
Officer has been identified as the chief operating decision-maker.
Revenue by geographic market is based on the location of the Company’s customer that issued the cards
which are generating the revenue. Revenue generated in the U.S. was approximately 45.5%, 47.2% and 49.7% of
net revenues in 2009, 2008 and 2007, respectively. No individual country, other than the U.S., generated more
than 10% of total revenues in those periods. MasterCard does not maintain or measure long-lived assets by
geographic location.
MasterCard did not have any one customer that generated greater than 10% of net revenues in 2009, 2008 or
2007.
Note 25. Other Income
During the year ended December 31, 2009, the Company recognized a gain of approximately $14,000 on the
prepayment of the Company’s remaining obligation on a litigation settlement. During the year ended
December 31, 2008, the Company recognized $75,000, pre-tax, in other income, related to the termination of a
customer business agreement for a customer exiting a specific line of business. During the year ended
December 31, 2007, the Company recognized $90,000, pre-tax, in other income related to a settlement agreement
to discontinue its relationship with the organization which operates the World Cup soccer events and not sponsor
the 2010 and 2014 World Cup soccer events.
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