MasterCard 2009 Annual Report Download - page 75

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Future Obligations
The following table summarizes our obligations as of December 31, 2009 that are expected to impact
liquidity and cash flow in future periods. We believe we will be able to fund these obligations through cash
generated from operations and our existing balances of cash and cash equivalents.
Payments Due by Period
Total 2010 2011-2012 2013-2014
2015 and
thereafter
(In millions)
Capital leases1....................................... $ 52 $ 7 $ 8 $ 37 $—
Operating leases2..................................... 101 26 33 19 23
Sponsorship, licensing and other3,4 ....................... 496 261 214 18 3
Litigation settlements5................................ 910 606 304 — —
Debt6.............................................. 21 — 21 — —
Total .............................................. $1,580 $900 $580 $ 74 $ 26
* Note that totals in above table may not sum due to rounding.
1Mostly related to certain property, plant and equipment. Capital lease for global technology and operations
center located in O’Fallon, Missouri has been excluded from this table; see Note 8 (Property, Plant and
Equipment) to the consolidated financial statements included in Part II, Item 8 for further discussion. There
is a capital lease for the Kansas City, Missouri co-processing data center.
2We enter into operating leases in the normal course of business. Substantially all lease agreements have
fixed payment terms based on the passage of time. Some lease agreements provide us with the option to
renew the lease or purchase the leased property. Our future operating lease obligations would change if we
exercised these renewal options and if we entered into additional lease agreements.
3Amounts primarily relate to sponsorships with certain organizations to promote the MasterCard brand. The
amounts included are fixed and non-cancelable. In addition, these amounts include amounts due in
accordance with merchant agreements for future marketing, computer hardware maintenance, software
licenses and other service agreements. Future cash payments that will become due to our customers under
agreements which provide pricing rebates on our standard fees and other incentives in exchange for
transaction volumes are not included in the table because the amounts due are indeterminable and
contingent until such time as performance has occurred. MasterCard has accrued $598 million as of
December 31, 2009 related to customer and merchant agreements.
4Includes current liability of $10 million relating to the accounting for uncertainty in income taxes. Due to
the high degree of uncertainty regarding the timing of the non-current liabilities for uncertainties in income
taxes, we are unable to make reasonable estimates of the period of cash settlements with the respective
taxing authority.
5Represents amounts due in accordance with the American Express Settlement and other litigation settlements.
The American Express Settlement requires six remaining quarterly payments of $150 million each.
6Debt primarily represents amounts due for the acquisition of MasterCard France. We also have various
credit facilities for which there were no outstanding balances at December 31, 2009 that, among other
things, would provide liquidity in the event of settlement failures by our members. Our debt obligations
would change if one or more of our members failed and we borrowed under these credit facilities to settle on
our members’ behalf or for other reasons.
Seasonality
The changes in the global economic environment during 2009 and 2008 impacted our historical trends
experienced during the fourth quarter each year, which have included increased revenues and expenses related to
end of the year activities. Our revenues depend heavily upon the overall level of consumer, business and
government spending. Our lower revenue growth rates began in the fourth quarter 2008 and continued during
2009 and are primarily due to lower growth rates in purchase volumes and transactions than in the past. In
addition, MasterCard implemented resource realignment and cost savings initiatives, with particular focus on
personnel, travel expenditures and advertising, during 2009 and 2008. As our business and the economic
environment continue to evolve, we expect new trends to emerge.
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