MasterCard 2015 Annual Report Download - page 73

MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
67
The increase in the net carrying amount of amortized intangible assets in 2015 was primarily related to our acquired businesses.
Certain intangible assets, including amortizable and unamortizable customer relationships and trademarks and tradenames, are
denominated in foreign currencies. As such, the change in intangible assets includes a component attributable to foreign currency
translation.
Amortization on the assets above amounted to $235 million, $214 million and $166 million in 2015, 2014 and 2013, respectively.
The following table sets forth the estimated future amortization expense on amortizable intangible assets on the balance sheet
at December 31, 2015 for the years ending December 31:
(in millions)
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 231
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2020 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
$ 643
Note 10. Accrued Expenses and Accrued Litigation
Accrued expenses consisted of the following at December 31:
2015 2014
(in millions)
Customer and merchant incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,748 $ 1,433
Personnel costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 531
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 154
Income and other taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 105
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 216
Total accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,763 $ 2,439
As of December 31, 2015 and 2014, personnel costs included a restructuring accrual with a remaining balance of $25 million and
$84 million, respectively. This accrual relates to a restructuring charge of $87 million recorded in general and administrative
expenses in 2014. The Company restructured its organization to align with its strategic priorities and to best meet the Company’s
continued growth. The Company is substantially complete with these restructuring activities. The decrease in the balance was
primarily due to payments and lower than expected severance actions.
As of December 31, 2015 and 2014, the Company’s provision related to U.S. merchant litigations was $709 million and $771
million, respectively. These amounts are not included in the accrued expenses table above and are separately reported as accrued
litigation on the consolidated balance sheet. During 2015 and 2014, MasterCard executed settlement agreements with a number
of opt-out merchants and no adjustment to the amount previously recorded was deemed necessary. See Note 18 (Legal and
Regulatory Proceedings) for further discussion of the U.S. merchant class litigation.
Note 11. Pension, Postretirement and Savings Plans
Defined Contribution
The Company sponsors defined contribution retirement plans. The primary plan is the MasterCard Savings Plan, a 401(k) plan
for substantially all of the U.S. employees, which is subject to the provisions of the Employee Retirement Income Security Act of
1974 (“ERISA”), as amended. In addition, the Company has several defined contribution plans outside of the U.S. The Company’s
total expense for its defined contribution plans was $61 million, $57 million and $51 million in 2015, 2014 and 2013, respectively.
Defined Benefit and Other Postretirement Plans
During the third quarter of 2015, the Company terminated its non-contributory, qualified, U.S. defined benefit pension plan (the
“U.S. Employee Pension Plan”). The U.S. Employee Pension Plan participants had the option to receive a lump sum distribution
or to participate in an annuity with a third-party insurance company. As a result of this termination, the Company settled its