MasterCard 2012 Annual Report Download - page 72
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As of December 31, 2012, all forward contracts to purchase and sell foreign currency had been entered into with
customers of MasterCard. MasterCard’s derivative contracts are summarized below:
December 31, 2012 December 31, 2011
Notional
Estimated Fair
Value Notional
Estimated Fair
Value
(in millions)
Commitments to purchase foreign currency ........ $ 76 $(1) $ 21 $—
Commitments to sell foreign currency ............. 1,571 (2) 279 2
Our settlement activities are subject to foreign exchange risk resulting from foreign exchange rate fluctuations.
This risk is typically limited to the one business day between setting the foreign exchange rates and clearing the
financial transactions.
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
Financial Instrument Summary Terms
Fair Market
Value at
December 31,
2012 2013 2014 2015 2016 2017
2018 and
there-after
(in millions)
Municipal securities ..... Fixed / Variable Interest $ 531 $ 174 $136 $ 78 $ 55 $ 38 $ 50
Corporate securities ...... Fixed / Variable Interest 1,246 607 470 159 1 9 —
U.S. Government and
Agency securities ..... Fixed / Variable Interest 582 355 150 37 22 8 10
Taxable short-term bond
funds ............... Fixed / Variable Interest 2101————— —
Asset-backed securities . . . Fixed / Variable Interest 316 259 45 8 — 4 —
Auction rate securities .... Variable Interest 32 ————— 32
Other ................. Fixed / Variable Interest 66 23 27 15 1 — —
Total .................. $2,983 $1,418 $828 $297 $ 79 $ 59 $ 92
1Short-term bond funds of $210 million have no contractual maturity.
Maturity
Financial Instrument Summary Terms
Fair Market
Value at
December 31,
2011 2012 2013 2014 2015 2016
2017 and
there-after
(in millions)
Municipal securities ....... Fixed / Variable Interest $ 393 $109 $ 74 $ 62 $ 59 $ 40 $ 49
Corporate securities ....... Fixed / Variable Interest 325 146 91 88 — — —
U.S. Government and
Agency securities ....... Fixed / Variable Interest 205 176 15343 4
Taxable short-term bond
funds ................. Fixed / Variable Interest 2031————— —
Asset-backed securities .... Fixed / Variable Interest 69 43 24 2 — — —
Auction rate securities ..... Variable Interest 70 ————— 70
Other ................... Fixed / Variable Interest 20 16 4 — — — —
Total ................... $1,285 $490 $208 $155 $ 63 $ 43 $123
1Short-term bond funds of $203 million have no contractual maturity.
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