MasterCard 2012 Annual Report Download - page 94

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
U.S. federal antitrust litigation between MasterCard and American Express Company. Under the terms of
the American Express Settlement, MasterCard made 12 quarterly payments of $150 million beginning in the
third quarter of 2008. The Company made its final quarterly payment of $150 million in June 2011.
2See Note 2 (Acquisitions) for further details.
Note 5. Fair Value and Investment Securities
Financial Instruments—Recurring Measurements
In accordance with accounting requirements for financial instruments, the Company is disclosing the
estimated fair values as of December 31, 2012 and 2011 of the financial instruments that are within the scope of
the accounting guidance, as well as the methods and significant assumptions used to estimate the fair value of
those financial instruments. Furthermore, the Company classifies its fair value measurements in the Valuation
Hierarchy. No transfers were made among the three levels in the Valuation Hierarchy during the years ended
December 31, 2012 and 2011.
The distribution of the Company’s financial instruments which are measured at fair value on a recurring
basis within the Valuation Hierarchy was as follows:
December 31, 2012
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair
Value
(in millions)
Municipal securities1..................... $— $ 531 $— $ 531
U.S. Government and Agency securities2..... — 582 — 582
Taxable short-term bond funds .............. 210 — — 210
Corporate securities ...................... — 1,246 — 1,246
Asset-backed securities ................... — 316 — 316
Auction rate securities .................... — — 32 32
Other .................................. — 63 — 63
Total .................................. $210 $2,738 $ 32 $2,980
December 31, 2011
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Fair
Value
(in millions)
Municipal securities1..................... $— $ 393 $— $ 393
U.S. Government and Agency securities ...... — 205 — 205
Taxable short-term bond funds .............. 203 — — 203
Corporate securities ...................... — 325 — 325
Asset-backed securities ................... — 69 — 69
Auction rate securities .................... — — 70 70
Other .................................. — 22 — 22
Total .................................. $203 $1,014 $ 70 $1,287
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