MasterCard 2013 Annual Report Download - page 55

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51
As of December 31, 2013, 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, 2013 December 31, 2012
Notional Estimated Fair
Value Notional Estimated Fair
Value
(in millions)
Commitments to purchase foreign currency . . . . . . . $ 23 $ (1) $ 76 $ (1)
Commitments to sell foreign currency. . . . . . . . . . . . 1,722 1 1,571 (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
Fair Market
Value at
December 31,
2013
2019
and
there-
after
Financial Instrument Summary Terms 2014 2015 2016 2017 2018
(in millions)
Municipal securities . . . . Fixed / Variable Interest $ 267 $ 200 $ 57 $ 10 $ — $ — $ —
Corporate securities . . . . Fixed / Variable Interest 1,426 646 464 290 9 15 2
U.S. Government and
Agency securities . . . Fixed / Variable Interest 560 376 122 31 12 9 10
Asset-backed securities. . Fixed / Variable Interest 364 307 49 8 — — —
Auction rate securities . . Variable Interest 11 — — — — — 11
Other . . . . . . . . . . . . . . . . Fixed / Variable Interest 79 33 37 7 2 — —
Total . . . . . . . . . . . . . . . . $ 2,707 $1,562 $ 729 $ 346 $ 23 $ 24 $ 23
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 210 — — — — — —
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
1 Short-term bond funds of $210 million had no contractual maturity.