MasterCard 2010 Annual Report Download - page 111

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 9. Property, Plant and Equipment
Property, plant and equipment consist of the following at December 31:
2010 2009
(in millions)
Building and land $ 402 $ 392
Equipment 265 255
Furniture and fixtures 50 52
Leasehold improvements 54 54
Property, plant and equipment 771 753
Less accumulated depreciation and amortization (332) (304)
Property, plant and equipment, net $ 439 $ 449
Effective March 1, 2009, MasterCard executed a new ten-year lease between MasterCard, as tenant, and the
Missouri Development Finance Board (“MDFB”), as landlord, for MasterCard’s global technology and
operations center located in O’Fallon, Missouri, called Winghaven. See Note 16 (Consolidation of Variable
Interest Entity) for further discussion. The lease includes a bargain purchase option and is thus classified as a
capital lease. The building and land assets and capital lease obligation were recorded at $154 million, which
represented the lesser of the present value of the minimum lease payments or the fair value of the building and
land assets. The Company received refunding revenue bonds issued by MDFB in the exact amount, $154 million,
and with the same payment terms as the capital lease and which contain the legal right of setoff with the capital
lease. The Company has netted its investment in the MDFB refunding revenue bonds and the corresponding
capital lease obligation in the consolidated balance sheet. The related leasehold improvements for Winghaven
will continue to be amortized over the economic life of the improvements.
As of December 31, 2010 and 2009, capital leases of $13 million and $14 million, respectively, were
included in equipment. Accumulated amortization of capital leases was $7 million and $6 million as of
December 31, 2010 and 2009, respectively.
Depreciation expense for the above property, plant and equipment, including amortization for capital leases,
was $70 million, $76 million and $59 million for the years ended December 31, 2010, 2009 and 2008,
respectively.
Note 10. Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2010 and 2009 were as
follows:
2010 2009
(in millions)
Beginning balance $309 $298
Goodwill acquired during the year 402 13
Foreign currency translation (34) 9
Impairment losses — (11)
Ending balance $677 $309
During 2010, the Company recognized $402 million of goodwill in connection with its acquisition of
DataCash. See Note 2 (Acquisition of DataCash Group plc) for further details.
101