Masking that displays correctly in ArcMap Layout to Layer Masking settings applied in Advanced Drawing Options, also known as layer masks or Variable Depth Masking, disappear when printing or exporting from ArcMap.
Advanced Drawing Options was replaced in ArcMap 9.0 with ArcGIS symbol level drawing. This knowledgebase article applies to both Advanced Drawing Options and ArcGIS symbol level drawing.
This problem can occur when the layer that is being masked contains transparency.
This is a known limitation.