MasterCard 2010 Annual Report Download - page 109

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
The table below summarizes the maturity ranges of the ARS portfolio, based on relative par value, as of
December 31, 2010:
Par
Amount
%of
Total
(in millions)
Due within 10 years $4 3%
Due year 11 through year 20 11 9%
Due year 21 through year 30 81 69%
Due after year 30 22 19%
Total $118 100%
Investment Income:
Components of net investment income were as follows:
2010 2009 2008
(in millions)
Interest income $ 48 $ 56 $109
Dividend income — — 1
Investment securities available-for-sale:
Gross realized gains 9 2 88
Gross realized losses — — (4)
Other than temporary impairment on short-term bond fund — — (11)
Total investment income, net $ 57 $ 58 $183
Interest income is generated from cash and cash equivalents, available-for-sale investment securities and
held-to-maturity investment securities. Dividend income primarily consists of dividends received on the
Company’s cost method investments.
At December 31, 2008, the Company held investments in short-term bond funds, with underlying holdings
in structured products such as mortgage-backed securities and asset-backed securities. During 2008, certain of
these investments were deemed to be other-than-temporarily impaired and an impairment loss of $11 million was
recorded. Due to the high credit quality of the Company’s other investment securities, no other investment
securities were considered to be other-than-temporarily impaired in 2008.
During 2008, MasterCard sold all of its remaining shares of Redecard S.A. and realized a pre-tax gain, net
of commissions, of $86 million. This gain was included in investment income within the consolidated statements
of operations.
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