MasterCard 2010 Annual Report Download - page 76

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Net cash used in investing activities in 2010 primarily related to the DataCash acquisition and expenditures
for our global network, partially offset by net cash inflows from investment security activities. Net cash used in
investing activities in 2009 primarily related to net purchases of investment securities and expenditures for our
global network. Net cash provided by investing activities in 2008 primarily related to net sales of investment
securities, partially offset by expenditures for our payment card network and an acquisition of a business.
The auction rate securities (“ARS”) market was illiquid as of December 31, 2010 and 2009 and therefore
our ARS are classified as long-term available-for-sale securities. We had $118 million and $212 million of ARS,
at amortized cost, as of December 31, 2010 and 2009, respectively. Although the ARS market is illiquid, issuer
call and redemption activity at par occurred periodically during 2010 and 2009. See Note 6 (Investment
Securities) to the consolidated financial statements included in Part II, Item 8 for more information.
Net cash used in financing activities in 2010 and 2009 included the payment of dividends offset by cash
provided by the tax benefit from share based compensation. The repayment of debt in 2009 and 2008 utilized
cash of $149 million and $80 million, respectively. In addition, the acquisition of 2.8 million shares of our
Class A common stock in 2008 under share repurchase programs utilized approximately $650 million. See
Note 16 (Consolidation of Variable Interest Entity), Note 15 (Debt) and Note 17 (Stockholders’ Equity) to the
consolidated financial statements included in Part II, Item 8 for more information on our debt repayments of
$149 million and $80 million and the stock repurchases, respectively.
Dividends
On December 7, 2010, our Board of Directors declared a quarterly cash dividend of $0.15 per share payable
on February 9, 2011 to holders of record on January 10, 2011 of our Class A common stock and Class B common
stock. The aggregate amount payable for this dividend was $20 million as of December 31, 2010.
On February 8, 2011, our Board of Directors declared a quarterly cash dividend of $0.15 per share payable
on May 9, 2011 to holders of record on April 8, 2011 of our Class A common stock and Class B common stock.
The aggregate amount needed for this dividend is estimated to be $20 million. The declaration and payment of
future dividends will be at the sole discretion of our Board of Directors after taking into account various factors,
including our financial condition, settlement guarantees, operating results, available cash and anticipated cash
needs.
Credit Availability
On November 22, 2010, the Company entered into a committed three-year unsecured $2.75 billion
revolving credit facility (the “Credit Facility”) with certain financial institutions. The Credit Facility, which
expires on November 22, 2013, replaced the Company’s prior credit facility which was to expire on April 26,
2011 (the “Prior Credit Facility”). The available funding under the Prior Credit Facility was $2.5 billion from
April 28, 2006 through April 27, 2010 and then decreased to $2 billion for the remaining period of the Prior
Credit Facility agreement. Borrowings under the Credit Facility are available to provide liquidity for general
corporate purposes, including providing liquidity in the event of one or more settlement failures by our
customers. The facility fee and borrowing cost under the Credit Facility are contingent upon our credit rating. At
December 31, 2010, the applicable facility fee was 20 basis points on the average daily commitment (whether or
not utilized). In addition to the facility fee, interest on borrowings under the Credit Facility would be charged at
the London Interbank Offered Rate (LIBOR) plus an applicable margin of 130 basis points or an alternate base
rate plus 30 basis points.
The Credit Facility contains customary representations, warranties and affirmative and negative covenants,
including a maximum level of consolidated debt to earnings before interest, taxes, depreciation and amortization
(EBITDA) financial covenant and events of default. MasterCard was in compliance with the covenants of the
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