MasterCard 2010 Annual Report Download - page 84

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Interest Rate Risk
Our interest rate sensitive assets are our investments in debt securities, which we generally hold as
available-for-sale investments. Our general policy is to invest in high quality securities, while providing adequate
liquidity and maintaining diversification to avoid significant exposure. The fair value and maturity distribution of
the Company’s available for sale investments as of December 31 was as follows:
Maturity
(in millions)
Financial Instrument Summary Terms
Fair Market
Value at
December 31,
2010
No
Contractual
Maturity 2011 2012 2013 2014 2015
2016 and
thereafter
Municipal
bonds ......... fixed interest $315 $— $ 8 $ 33 $ 93 $ 69 $ 55 $ 57
Short-term bond
funds .........
fixed/variable
interest 516 516 ————— —
Auction rate
securities ...... variable interest 106 — ————— 106
Total ........... $937 $516 $ 8 $ 33 $ 93 $ 69 $ 55 $163
Maturity
(in millions)
Financial Instrument Summary Terms
Fair Market
Value at
December 31,
2009
No
Contractual
Maturity 2010 2011 2012 2013 2014
2015 and
thereafter
Municipal
bonds ......... fixed interest $ 514 $— $ 28 $ 97 $ 96 $120 $ 80 $ 93
Short-term bond
funds .........
fixed/variable
interest 310 310 ————— —
Auction rate
securities ...... variable interest 180 — ————— 180
Total ........... $1,004 $310 $ 28 $ 97 $ 96 $120 $ 80 $273
At December 31, 2010, we have a credit facility which provides liquidity for general corporate purposes,
including providing liquidity in the event of one or more settlement failures by the Company’s customers. This
credit facility has variable rates, which are applied to the borrowing based on terms and conditions set forth in the
agreement. We had no borrowings under this facility at December 31, 2010 or 2009. See Note 15 (Debt) to the
consolidated financial statements in Part II, Item 8 for additional information.
Equity Price Risk
The Company did not have significant equity price risk as of December 31, 2010 and 2009.
74