MasterCard 2011 Annual Report Download - page 115

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
O’Fallon 1999 Trust (the “Trust”) as the lessor. The Trust, which was a variable interest entity, was established
for a single discrete purpose, was not an operating entity, had a limited life and had no employees. The Trust had
financed Winghaven through a combination of a third party equity investment in the amount of $5 million and
the issuance of 7.36% Series A Senior Secured Notes (the “Secured Notes”) with an aggregate principal amount
of $149 million and a maturity date of September 1, 2009. MasterCard International executed a guarantee of
85.15% of the aggregate principal amount of the Secured Notes outstanding, for a total of $127 million.
Additionally, upon the occurrence of specific events of default, MasterCard International guaranteed the
repayment of the total outstanding principal and interest on the Secured Notes and agreed to take ownership of
the facility. During 2004, MasterCard Incorporated became party to the guarantee and assumed certain covenant
compliance obligations, including financial reporting and maintenance of a certain level of consolidated net
worth. As the primary beneficiary of the Trust, the Company had consolidated the assets and liabilities of the
Trust in its consolidated financial statements.
Effective March 1, 2009, the aggregate outstanding principal and accrued interest on the Secured Notes was
repaid, the investor equity was redeemed, and the guarantee obligations of MasterCard International and
MasterCard Incorporated were terminated. The aggregate principal amount and interest plus a “make-whole”
amount repaid to the holders of Secured Notes and the equity investor was $165 million. The “make-whole”
amount of $5 million included in the repayment represented the discounted value of the remaining principal and
interest on the Secured Notes, less the outstanding principal balance and an equity investor premium. Also as a
result of the transaction, $154 million of short-term municipal bonds classified as held-to-maturity investments
were cancelled.
The Trust is no longer considered a variable interest entity and is no longer consolidated by the Company.
During the period when the Trust was a consolidated entity within the year ended December 31, 2009, its
operations had no impact on net income. However, interest income and interest expense were increased by $7
million in 2009. The Company did not provide any financial or other support that it was not contractually
required to provide during the year ended December 31, 2009.
The Company has additional investments in VIEs for which the Company is not the primary
beneficiary. These investments are not consolidated and are accounted for under the equity method of accounting
and recorded in other assets on the consolidated balance sheet.
Note 15. Stockholders’ Equity
Classes of Capital Stock
MasterCard’s amended and restated certificate of incorporation authorizes the following classes of capital
stock:
Class
Par Value
Per Share
Authorized
Shares
(in millions) Dividend and Voting Rights
A $0.0001 3,000 One vote per share
Dividend rights
B $0.0001 1,200 Non-voting
Dividend rights
Preferred $0.0001 300 No shares issued or outstanding at December 31, 2011 and 2010,
respectively. Dividend and voting rights are to be determined by the
Board of Directors of the Company upon issuance.
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