MasterCard 2011 Annual Report Download - page 95

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Access manages and delivers consumer and corporate prepaid travel cards through business partners around
the world, including financial institutions, retailers, travel agents and foreign exchange bureaus. The acquisition
of Access enables the Company to offer end-to-end prepaid card solutions encompassing branded switching,
issuer processing, and program management services, primarily focused on the travel sector and in markets
outside the United States.
The following table summarizes the purchase price allocation for the Access acquisition:
Fair Value at
April 15, 2011
(in millions)
Current assets ........................................................... $ 50
Property, plant and equipment .............................................. 2
Intangible assets ......................................................... 164
Goodwill ............................................................... 354
Total assets acquired ................................................. 570
Current liabilities ........................................................ (56)
Non-current liabilities .................................................... (33)
Total liabilities assumed .............................................. (89)
Net assets acquired ................................................... $481
Purchase consideration has been allocated to the tangible and identifiable intangible assets and to liabilities
assumed based on their respective fair values on April 15, 2011, the acquisition date. The excess of purchase
consideration over net assets acquired was recorded as goodwill. The amount of goodwill expected to be
deductible for local tax purposes is not significant.
The “earn-out” was based on Access revenues in 2011. The potential undiscounted amount of all future
payments that MasterCard could have been required to pay the former owners of Access under the earn-out
arrangement was between nothing and 35 million U.K. pound sterling, or approximately $57 million. As of
June 30, 2011, the Company recognized 6 million U.K. pound sterling, or approximately $9 million, and
included the amount of the earn-out in current liabilities. The fair value of the earn-out arrangement was
estimated by applying a probability-weighted income approach. The full year revenues for 2011 did not meet the
requirements for payment of the earn-out and therefore the liability was eliminated and the Company recorded
other income of $9 million in 2011. As of December 31, 2011, the Access long-term business plan was generally
consistent with original expectations from the time of the acquisition.
Intangible assets consist of customer relationships, developed technologies and tradenames, which have
useful lives ranging from 1.5 to 10 years. See Note 10 (Other Intangible Assets). The following table summarizes
the fair value of the acquired intangible assets: Fair Value at
April 15, 2011
Weighted-Average
Useful Life
(in millions) (in years)
Customer relationships .................................... $132 8
Developed technologies ................................... 17 4
Tradenames ............................................ 15 6
Total intangible assets .................................... $164
91