MasterCard 2011 Annual Report Download - page 108

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth the estimated future amortization expense on amortizable intangible assets for
the years ending December 31:
(in millions)
2012 .................................................................... $131
2013 .................................................................... 108
2014 .................................................................... 82
2015 .................................................................... 53
2016 and thereafter ........................................................ 102
$476
Note 11. Accrued Expenses
Accrued expenses consisted of the following at December 31:
2011 2010
(in millions)
Customer and merchant incentives ...................................... $ 889 $ 666
Personnel costs ..................................................... 345 307
Advertising ........................................................ 144 162
Income and other taxes ............................................... 82 76
Other ............................................................. 150 104
Total accrued expenses ............................................... $1,610 $1,315
As of December 31, 2011, the Company accrued $770 million related to the U.S. merchant litigation; the
amount represents an estimate of the Company’s financial liability that could result from a settlement based on
progress in the mediation process. This amount is not included in the accrued expense table above and is
separately reported as accrued litigation on the consolidated balance sheet. See Note 20 (Legal and Regulatory
Proceedings) for further discussion.
Note 12. Pension Plans, Postretirement Plan, Savings Plan and Other Benefits
The Company maintains a non-contributory, qualified, defined benefit pension plan (the “Qualified Plan”)
with a cash balance feature covering substantially all of its U.S. employees hired before July 1, 2007. In
September 2010, the Company amended the Qualified Plan to phase out participant pay credit percentages in the
years 2011 and 2012 and eliminate the pay credit beginning January 1, 2013. Plan participants will continue to
earn interest credits. As a result of the amendment to the Qualified Plan, the Company recognized a curtailment
gain of $6 million in the third quarter of 2010 and a reduction in pension liability of $17 million at December 31,
2010. The Company also recognized corresponding effects in accumulated other comprehensive income and
deferred taxes.
The Company also has an unfunded non-qualified supplemental executive retirement plan (the “Non-
qualified Plan”) that provides certain key employees with supplemental retirement benefits in excess of limits
imposed on qualified plans by U.S. tax laws. The Non-qualified Plan had settlement gains in 2011 and 2009
resulting from payments to participants. The term “Pension Plans” includes both the Qualified Plan and the
Non-qualified Plan.
The Company maintains a postretirement plan (the “Postretirement Plan”) providing health coverage and
life insurance benefits for substantially all of its U.S. employees hired before July 1, 2007. In 2009, the Company
recorded a $4 million expense as a result of enhanced postretirement medical benefits under the Postretirement
Plan provided to employees that chose to participate in a voluntary transition program.
104