MasterCard 2010 Annual Report Download - page 50

need for industry-wide standards, by resistance from customers or merchants to such changes by the complexity
of our systems or by intellectual property rights of third parties. We have received, and we may in the future
receive, notices or inquiries from other companies suggesting that we may be infringing a pre-existing patent or
that we need to license use of their patents to avoid infringement. Such notices may, among other things, threaten
litigation against us. Our future success will depend, in part, on our ability to develop or adapt to technological
changes and evolving industry standards.
Adverse currency fluctuations and foreign exchange controls could decrease revenue we receive from our
operations outside of the United States.
During 2010, approximately 58.4% of our revenue was generated from activities outside the United States.
Some of the revenue we generate outside the United States is subject to unpredictable currency fluctuations
(including devaluations of currencies) where the values of other currencies change relative to the U.S. dollar.
Resulting exchange gains and losses are included in our net income. Our risk management activities provide
protection with respect to adverse changes in the value of only a limited number of currencies and are based on
estimates of exposures to these currencies. Furthermore, we may become subject to exchange control regulations
that might restrict or prohibit the conversion of our other revenue currencies into U.S. dollars. The occurrence of
any of these factors could decrease the value of revenues we receive from our international operations and have a
material adverse impact on our business.
If we do not adequately manage the changes necessary to implement our strategy, our results of
operations may suffer.
MasterCard continues to experience a significant amount of changes associated with items related to our
strategy, including changes in technology, the marketplace, our customers and our products. In particular, our
expansion into new businesses could result in unanticipated or unfamiliar issues which may be difficult to
manage. If not adequately managed, these changes could result in missed opportunities for the business or could
impact the effectiveness of our organization’s execution of its strategy. As we manage these changes, any
difficulty in retaining or attracting key management and employees could result in inadequate depth of
institutional knowledge or skill sets necessary for the organization’s effective execution of its strategy.
Acquisitions or strategic investments could disrupt our business and harm our financial condition or
reputation.
Although we may continue to make strategic acquisitions of, or acquire interests in joint ventures or other
entities related to, complementary businesses, products or technologies, we may not be able to successfully
partner with or integrate any such acquired businesses, products or technologies. In addition, the integration of
any acquisition or investment (including efforts related to an acquisition of an interest in a joint venture or other
entity) may divert management’s time and resources from our core business and disrupt our operations.
Moreover, we may spend time and money on projects that do not increase our revenue. To the extent we pay the
purchase price of any acquisition in cash, it would reduce our cash reserves available to us for other uses, and to
the extent the purchase price is paid with our stock, it could be dilutive to our stockholders. Furthermore, we may
not be able to successfully finance the business following the acquisition as a result of costs of operations,
including any litigation risk which may be inherited from the acquisition. Any of these acquisitions could also
result in control issues which could negatively affect our reputation. Although we periodically evaluate potential
acquisitions of businesses, products and technologies and anticipate continuing to make these evaluations, we
cannot guarantee that we will be able to execute and integrate any such acquisitions.
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