MasterCard 2010 Annual Report Download - page 101

Download and view the complete annual report

Please find page 101 of the 2010 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 162

  • 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
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162

MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
DataCash provides e-Commerce merchants with the ability to process secure payments across the world.
DataCash develops and provides outsourced electronic payments solutions, fraud prevention, alternative payment
options, back-office reconciliation and solutions for merchants selling via multiple channels. DataCash also has a
fraud solutions and technology platform. MasterCard believes the acquisition of DataCash will create a long-term
growth platform in the e-Commerce category while enhancing existing MasterCard payment products and
expanding its global presence in the internet gateway business.
MasterCard had exposure to foreign exchange rate fluctuations related to the DataCash acquisition price. As
a result, the Company purchased foreign currency option contracts to limit the risk. See Note 24 (Foreign
Exchange Risk Management) for further details.
The following table summarizes the purchase price allocation for the DataCash acquisition:
Fair Value at
October 22,
2010
(in millions)
Current assets $ 48
Property, plant and equipment 3
Intangible assets 129
Goodwill 402
Other assets 7
Total assets acquired 589
Current liabilities (24)
Non-current liabilities (31)
Total liabilities assumed (55)
Net assets acquired $534
Purchase consideration has been allocated to the tangible and identifiable intangible assets and to liabilities
assumed based on their respective fair values on October 22, 2010, the acquisition date. The excess of purchase
consideration over net assets acquired was recorded as goodwill. The Company expects value from expanding
the Company’s e-Commerce payment and related electronic payments solutions, fraud prevention, alternative
payment options, back-office reconciliation and solutions for merchants selling via multiple channels, and other
synergies. None of the $402 million of goodwill is expected to be deductible for tax purposes.
Intangible assets consist of developed technologies, customer relationships, tradenames and non-compete
agreements, which have useful lives ranging from 1 to 10 years. See Note 11 (Other Intangible Assets). The
following table summarizes the fair value of the acquired intangible assets:
Fair Value at
October 22,
2010
Weighted-Average
Useful Life
(in millions) (in years)
Customer relationships $ 74 7
Developed technologies 42 5
Tradenames 11 5
Non-compete agreements 2 1
Total intangible assets $129
91