Accrued Expenses

21 Months Ended

Sep. 30, 2012

Accrued expenses consisted of the following:



	September 30, 2012		December 31, 2011
	(in millions)
Customer and merchant incentives	$	957	$	889
Personnel costs	294		345
Advertising	76		144
Income and other taxes	163		82
Other	130		150
Total accrued expenses	$	1,620	$	1,610

As of September 30, 2012 and December 31, 2011, the Company had an accrued liability of $790 million and $770 million, respectively, related to the U.S. merchant litigations. MasterCard and the other defendants had been participating in separate court-recommended mediation sessions with the individual merchant plaintiffs and the class plaintiffs. MasterCard recorded a $770 million pre-tax charge in the fourth quarter of 2011. This charge represented MasterCard's estimate for the financial portion of a settlement in these cases. On July 13, 2012, MasterCard entered into a memorandum of understanding to settle the merchant class litigation, and separately agreed in principle to settle all claims brought by the individual merchant plaintiffs. MasterCard's financial portion of the settlements is estimated to total $790 million on a pre-tax basis, with the additional $20 million pre-tax charge having been recorded in the second quarter of 2012. This amount is not included in the accrued expense table above and is separately reported as accrued litigation on the consolidated balance sheet. See Note 11 (Legal and Regulatory Proceedings) for further discussion.