MasterCard 2009 Annual Report Download - page 70

Download and view the complete annual report

Please find page 70 of the 2009 MasterCard annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

We recorded liabilities for these and certain other litigation settlements in 2009 and prior years. Total
liabilities for litigation settlements changed from December 31, 2007, as follows:
(In millions)
Balance as of December 31, 2007 ............................................... $ 404
Provision for Discover Settlement ............................................... 863
Provision for American Express Settlement ....................................... 1,649
Provision for other litigation settlements .......................................... 6
Interest accretion on U.S. Merchant Lawsuit Settlement .............................. 33
Interest accretion on American Express Settlement .................................. 44
Payments on American Express Settlement ........................................ (300)
Payments on Discover Settlement ............................................... (863)
Payment on U.S. Merchant Lawsuit Settlement .................................... (100)
Other payments and accretion .................................................. (1)
Balance as of December 31, 2008 ............................................... 1,736
Interest accretion on U.S. Merchant Lawsuit Settlement .............................. 21
Interest accretion on American Express Settlement .................................. 66
Payments on American Express Settlement ........................................ (600)
Payment on U.S. Merchant Lawsuit Settlement .................................... (335)
Gain on prepayment of U.S. Merchant Lawsuit Settlement ........................... (14)
Other payments, accruals and accretion, net ....................................... (4)
Balance as of December 31, 2009 ............................................... $ 870
* Note that table may not sum due to rounding.
Depreciation and Amortization
Depreciation and amortization expenses increased $29 million and $14 million in 2009 and 2008,
respectively. The increases in depreciation and amortization expense were primarily due to increased investments
in data center equipment, capitalized software and leasehold and building improvements. Additionally, in 2009
the increase included depreciation on the Company’s global technology and operations center, which was
acquired under a capital lease arrangement. We expect that depreciation and amortization will continue to
increase as we continue to invest in property, plant and equipment and capitalized software.
Other Income (Expense)
Other income (expense) is comprised primarily of investment income, interest expense and other gains and
losses. The components of Other income (expense) for the years ended December 31, 2009, 2008 and 2007 were
as shown below:
For the Years Ended December 31,
Dollar
Increase (Decrease)
Percent
Increase (Decrease)
2009 2008 2007 2009 2008 2009 2008
(In millions, except percentages)
Investment income, net ........... $ 58 $183 $530 $(125) $(347) (68.5)% (65.5)%
Interest expense ................. (115) (104) (57) (12) (46) 11.1% 80.9%
Other income (expense), net ....... 15 72 90 (57) (18) (78.7)% (20.2)%
Total other income (expense) . . $ (42) $ 151 $563 $(193) $(412) (127.8)% (73.1)%
* Note that table may not sum due to rounding
60