MasterCard 2010 Annual Report Download - page 69
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The major components of our operating expenses were as follows:
For the Years Ended
December 31,
Dollar Increase
(Decrease)
Percent
Increase (Decrease)
2010 2009 2008 2010 2009 2010 2009
(in millions, except percentages)
General and administrative .......... $1,852 $1,935 $1,996 $(83) $ (61) (4.3)% (3.1)%
Advertising and marketing .......... 782 756 935 26 (179) 3.5% (19.2)%
Litigation settlements .............. 5 7 2,483 (2) (2,476) (26.2)% (99.7)%
Depreciation and amortization ........ 148 141 112 7 29 4.8% 26.2%
Total operating expenses ............ $2,787 $2,839 $5,526 $(52) $(2,687) (1.8)% (48.6)%
Total operating expenses as a
percentage of net revenues ........ 50.3% 55.7% 110.7%
Operating expenses decreased $52 million, or 1.8%, in 2010, compared to 2009, primarily due to lower
general and administrative expenses, partially offset by increased advertising and marketing expenses. The
impact of foreign currency relating to translation from the euro and Brazilian real to U.S. dollars reduced
operating expenses by approximately 1 percentage point in 2010.
Operating expenses decreased approximately $2.7 billion in 2009, compared to 2008. These changes in
operating expenses were primarily due to decreased litigation settlements in 2009. In addition, in 2009,
MasterCard initiated resource realignment programs, which increased personnel costs due to severance-related
expenses, and implemented contingency plans, which reduced certain other operating expenses. The following
table compares and reconciles operating expenses, excluding the Litigation Settlements, which is a non-GAAP
financial measure, to the operating expenses including the Litigation Settlements, which is the most directly
comparable GAAP measurement. Management believes this analysis may be helpful in evaluating ongoing
operating expenses and allows for a more meaningful comparison between periods.
For the year ended
December 31, 2009
For the year ended
December 31, 2008 Percent
Increase
(Decrease)
Actual
Percent
Increase
(Decrease)
Non-GAAPActual
Special
Items Non-GAAP Actual
Special
Items Non-GAAP
(in millions, except percentages)
General and administrative ..... $1,935 $— $1,935 $1,996 $ — $1,996 (3.1)% (3.1)%
Advertising and marketing ..... 756 — 756 935 — 935 (19.2)% (19.2)%
Litigation settlements ......... 7 (7) — 2,483 (2,483) — (99.7) **
Depreciation and amortization . . 141 — 141 112 — 112 26.2% 26.2%
Total operating expenses ...... $2,839 $ (7) $2,832 $5,526 $(2,483) $3,043 (48.6)% (6.9)%
Total operating expenses as a
percentage of net revenues . . . 55.7% 55.5% 110.7% 61.0%
* Note that figures in the above table may not sum due to rounding.
** Not meaningful, see “—Litigation Settlements” for more information.
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