MasterCard 2014 Annual Report Download - page 45

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43
As of December 31, 2014, 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, 2014 December 31, 2013
Notional Estimated Fair
Value Notional Estimated Fair
Value
(in millions)
Commitments to purchase foreign currency . . . . . . . . . . . . $ 47 $ 4 $ 23 $ (1)
Commitments to sell foreign currency . . . . . . . . . . . . . . . . 614 27 1,722 1
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 for debt
securities as of December 31 was as follows:
Maturity
Fair Market
Value at
December 31,
2014 2015 2016 2017 2018 2019
2020
and
there-
after
Financial Instrument Summary Terms
(in millions)
Municipal securities . . . . . . . . . . . . . . . Fixed / Variable Interest $ 135 $ 82 $ 48 $ 2 $ — $ — $ 3
Corporate securities . . . . . . . . . . . . . . . Fixed / Variable Interest 618 325 211 82 — — —
U.S. government and agency
securities. . . . . . . . . . . . . . . . . . . . . Fixed / Variable Interest 199 132 52 2 — — 13
Asset-backed securities . . . . . . . . . . . . Fixed / Variable Interest 178 4 59 75 28 7 5
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed / Variable Interest 25 15 5 1 — — 4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,155 $ 558 $ 375 $ 162 $ 28 $ 7 $ 25
Maturity
Financial Instrument Summary Terms
Fair Market
Value at
December 31,
2013 2014 2015 2016 2017 2018
2019
and
there-
after
(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 — — —
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed / Variable Interest 90 33 37 7 2 — 11
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,707 $1,562 $ 729 $ 346 $ 23 $ 24 $ 23
At December 31, 2014, we have a credit facility which provides liquidity for general corporate purposes, including providing
liquidity in the event of one or more settlement failures by the Company’s customers. This credit facility has variable rates, which
are applied to the borrowing based on terms and conditions set forth in the agreement. See Note 12 (Debt) to the consolidated
financial statements in Part II, Item 8 of this Report for additional information on the Company’s current and prior credit facilities.
We had no borrowings under the current or prior credit facilities at December 31, 2014 and 2013.
Equity Price Risk
The Company did not have significant equity price risk as of December 31, 2014 and 2013.