MasterCard 2010 Annual Report Download - page 102

Download and view the complete annual report

Please find page 102 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
In connection with the acquisition, the Company recognized $7 million of acquisition-related expenses
during the year ended December 31, 2010, which consisted primarily of professional fees related to closing the
transaction. These amounts were included in general and administrative expenses. The consolidated financial
statements include the operating results of DataCash from the date of the acquisition.
Note 3. Earnings (Loss) Per Share (“EPS”)
On January 1, 2009, an accounting standard related to the EPS effects of instruments granted in share-based
payment transactions became effective for the Company resulting in the retrospective adjustment of EPS for
prior periods. In accordance with this accounting standard, unvested share-based payment awards which receive
non-forfeitable dividend rights, or dividend equivalents, are considered participating securities and are required
to be included in computing EPS under the two-class method. The Company declared non-forfeitable dividends
on unvested restricted stock units and contingently issuable performance stock units (“Unvested Units”) which
were granted prior to 2009. The Company has therefore calculated EPS under the two-class method pursuant to
this accounting standard.
The components of basic and diluted EPS for common shares under the two-class method for each of the
years ended December 31 were as follows:
2010 2009 2008
(in millions, except per share data)
Numerator:
Net income (loss) attributable to MasterCard $1,846 $1,463 $ (254)
Less: Net income (loss) allocated to Unvested Units 3 9 (1)
Net income (loss) attributable to MasterCard allocated to
common shares $1,843 $1,454 $ (253)
Denominator:
Basic EPS weighted average shares outstanding 131 130 130
Dilutive stock options and restricted stock units — — —
Diluted EPS weighted-average shares outstanding 131 130 130
Earnings (Loss) per Share:
Basic $14.10 $11.19 $(1.94)
Diluted $14.05 $11.16 $(1.94)
The calculation of diluted EPS excluded the following share-based payment awards because the effect
would be antidilutive for each of the years ended December 31:
2010 2009 2008
(in thousands)
Stock options 204 251 705
Restricted stock units 11 — —
92