MasterCard 2011 Annual Report Download - page 105

MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other assets consisted of the following at December 31:
2011 2010
(in millions)
Customer and merchant incentives ......................................... $409 $386
Nonmarketable equity investments ......................................... 160 107
Income taxes receivable ................................................. 15 50
Other ................................................................ 46 47
Total other assets ....................................................... $630 $590
Certain customer and merchant business agreements provide incentives upon entering into the agreement.
Customer and merchant incentives represent payments made or amounts to be paid to customers and merchants
under business agreements. Amounts to be paid for these incentives and the related liability were included in
accrued expenses and other liabilities. Once the payment is made, the liability is relieved. Costs directly related
to entering into such an agreement are deferred and amortized over the life of the agreement.
Investments for which the equity method or historical cost method of accounting are used are recorded in
other assets on the consolidated balance sheet. The Company accounts for investments in common stock or
in-substance common stock under the equity method of accounting when it has the ability to exercise significant
influence over the investee, generally when it holds 20% or more of the common stock in the entity.
MasterCard’s share of net earnings or losses of entities accounted for under the equity method of accounting is
included in other income (expense) on the consolidated statement of operations. The Company accounts for
investments under the historical cost method of accounting when it does not exercise significant influence,
generally when it holds less than 20% ownership in the common stock of the entity.
Note 8. Property, Plant and Equipment
Property, plant and equipment consisted of the following at December 31:
2011 2010
(in millions)
Building and land ..................................................... $413 $402
Equipment ........................................................... 298 265
Furniture and fixtures .................................................. 53 50
Leasehold improvements ............................................... 55 54
Property, plant and equipment ........................................... 819 771
Less accumulated depreciation and amortization ............................. (370) (332)
Property, plant and equipment, net ........................................ $449 $439
Effective March 1, 2009, MasterCard executed a 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 14 (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 and the fair value of the building and
land assets at the inception of the lease. The Company received refunding revenue bonds issued by MDFB in the
same amount, $154 million, with the same payment terms as the capital lease and which contain the legal right of
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