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Exhibit 99.1

 

 

LOGO

   LOGO

MasterCard Incorporated Reports

Fourth-Quarter and Full-Year 2013 Financial Results

 

    Fourth-quarter net income of $684 million, excluding a special item, or $0.57 per diluted share

 

    Fourth-quarter net income of $623 million, including a special item, or $0.52 per diluted share

 

    Diluted EPS figures adjusted for the company’s ten-for-one stock split

 

    Fourth-quarter net revenue increase of 12%, to $2.1 billion

 

    Fourth-quarter gross dollar volume up 14% and purchase volume up 12%

Purchase, NY, January 31, 2014 – MasterCard Incorporated (NYSE: MA) today announced financial results for the fourth quarter of 2013. Excluding a special item, the company reported net income of $684 million, up 13%, and earnings per diluted share of $0.57 (adjusted for the company’s ten-for-one stock split), up 16%, versus the year-ago period. Including the special item, a $61 million after-tax charge related to the opt-outs in the U.S. merchant litigations, the company reported net income of $623 million, or $0.52 per diluted share. The net income and earnings per diluted share, excluding the special item, are reconciled to their comparable GAAP measures in the accompanying tables.

Net revenue for the fourth quarter of 2013 was $2.1 billion, a 12% increase versus the same period in 2012. Adjusted for currency, net revenue increased 11%. Net revenue growth was driven by the impact of the following:

 

    A 14% increase in gross dollar volume, on a local currency basis, to $1.1 trillion;

 

    An increase in cross-border volumes of 18%; and

 

    An increase in processed transactions of 13%, to 10.4 billion.

These factors were partially offset by an increase in rebates and incentives, primarily due to new and renewed agreements and increased volumes.

Worldwide purchase volume during the quarter was up 12% on a local currency basis versus the fourth quarter of 2012, to $805 billion. As of December 31, 2013, the company’s customers had issued almost 2 billion MasterCard and Maestro-branded cards.

“We are very pleased with our performance this quarter and our full-year 2013 results reflect the overall strength of our global business,” said Ajay Banga, MasterCard president and CEO. “In addition to signing several significant deals last quarter, we made new investments in processing and person-to person payments while expanding our MasterPass digital platform - all supporting safe and seamless payment experiences.”

Excluding the special item, total operating expenses increased 11%, both before and after adjusting for currency, to $1.1 billion for the fourth quarter of 2013 compared to the same period in 2012. The increase was primarily driven by higher investments in people and marketing to support strategic initiatives. Including the special item, total operating expenses increased 21% from the year-ago period.

 

-more-


MasterCard Incorporated – Page 2

 

Operating income for the fourth quarter of 2013 increased 13% over the year-ago period, excluding the special item, and the company delivered an operating margin of 47.7%.

MasterCard reported total other expense of $9 million in the fourth quarter of 2013 versus $5 million in the fourth quarter of 2012. The increase was primarily driven by joint venture-related expenses.

MasterCard’s effective tax rate was 32.0% in the fourth quarter of 2013, versus a rate of 32.4% in the comparable period of 2012, excluding the special item. The decrease in the effective tax rate for the period was primarily due to a more favorable geographic mix of earnings and a lower state effective tax rate, partially offset by higher discrete benefits in 2012.

During the fourth quarter of 2013, MasterCard repurchased 9.8 million shares of Class A common stock at a cost of approximately $751 million. Quarter-to-date through January 24th, the company repurchased an additional 4.2 million shares at a cost of approximately $351 million, with $3.3 billion remaining under the current repurchase program authorization.

Full-Year 2013 Results

For the year ended December 31, 2013, MasterCard reported net income of $3.2 billion, up 15%, and earnings per diluted share of $2.61, up 19%, in each case versus the year-ago period and excluding the special items representing charges related to the U.S. merchant litigations taken in both 2012 and 2013. Including the 2013 special item, full-year 2013 net income was $3.1 billion and earnings per diluted share was $2.56.

Net revenue for full-year 2013 was $8.3 billion, an increase of 13% versus 2012 both before and after adjusting for currency. Gross dollar volume growth of 14%, cross-border volume growth of 18% and processed transaction growth of 13%, contributed to the net revenue growth in the full-year period. These increases were partially offset by an increase in rebates and incentives.

Excluding special items in both years, total operating expenses increased 9%, compared to 2012, both before and after adjusting for currency, to $3.7 billion, primarily due to higher personnel costs related to strategic initiatives. Including special items, total operating expenses increased 11%, to $3.8 billion, versus 2012.

Excluding special items, operating income increased 16% for 2013 versus 2012, delivering an operating margin of 55.1% for full-year 2013.

Total other expense was $3 million for full-year 2013 versus $4 million in 2012.

MasterCard’s effective tax rate was 30.9% for full-year 2013, versus a rate of 29.9% for full-year 2012, excluding special items. The increase was primarily due to higher discrete benefits in 2012, partially offset by a more favorable geographic mix of earnings in 2013. Including special items, the effective tax rate was 30.8% for full-year 2013, versus a rate of 29.9% for full-year 2012.

For full-year 2013, MasterCard repurchased 41 million shares at a cost of approximately $2.4 billion.


MasterCard Incorporated – Page 3

 

Fourth-Quarter and Full-Year Financial Results Conference Call Details

At 9:00 a.m. ET today, the company will host a conference call to discuss its fourth-quarter and full-year financial results.

The dial-in information for this call is 800-708-4540 (within the U.S.) and 847-619-6397 (outside the U.S.), and the passcode is 36351326. A replay of the call will be available for one week and can be accessed by dialing 888-843-7419 (within the U.S.) and 630-652-3042 (outside the U.S.), and using passcode 36351326.

This call can also be accessed through the Investor Relations section of the company’s website at www.mastercard.com.

Non-GAAP Financial Information

The company’s total operating expenses, operating income, effective tax rate, net income and earnings per diluted share, excluding special items, are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying tables.

The presentation of growth rates adjusted for currency also represent a non-GAAP measure and are calculated by remeasuring the prior period’s results using the current period’s exchange rates.

About MasterCard Incorporated

MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.

Forward-Looking Statements

Statements in this press release which are not historical facts, including statements about MasterCard’s plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company’s ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation, statements related to the company’s continued ability to invest in processing and person-to-person payments, as well as expand its MasterPass digital platform.


MasterCard Incorporated – Page 4

 

Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2012, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that were filed with the SEC during 2013, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.

###

Contacts:

Investor Relations: Barbara Gasper, investor_relations@mastercard.com, 914-249-4565

Media Relations: Jim Issokson, james_issokson@mastercard.com, 914-249-6286


MasterCard Incorporated – Page 5

 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2013     2012     2013     2012  
     (in millions, except per share data)  

Net Revenue

   $ 2,126      $ 1,895      $ 8,346      $ 7,391   

Operating Expenses

        

General and administrative

     719        639        2,649        2,429   

Advertising and marketing

     321        295        841        775   

Depreciation and amortization

     71        62        258        230   

Provision for litigation settlement

     95        —          95        20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     1,206        996        3,843        3,454   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     920        899        4,503        3,937   

Other Income (Expense)

        

Investment income

     8        10        38        37   

Interest expense

     (7     (7     (14     (20

Other income (expense), net

     (10     (8     (27     (21
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (9     (5     (3     (4
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     911        894        4,500        3,933   

Income tax expense

     288        289        1,384        1,174   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 623      $ 605      $ 3,116      $ 2,759   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Earnings per Share

   $ 0.52      $ 0.49      $ 2.57      $ 2.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Weighted-Average Shares Outstanding

     1,201        1,240        1,211        1,253   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Earnings per Share

   $ 0.52      $ 0.49      $ 2.56      $ 2.19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Weighted-Average Shares Outstanding

     1,205        1,246        1,215        1,258   
  

 

 

   

 

 

   

 

 

   

 

 

 


MasterCard Incorporated – Page 6

 

MASTERCARD INCORPORATED

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

     December 31,  
     2013     2012  
     (in millions, except share data)  
ASSETS     

Cash and cash equivalents

   $ 3,599      $ 2,052   

Restricted cash for litigation settlement

     723        726   

Investment securities available-for-sale, at fair value

     2,696        2,951   

Accounts receivable

     966        925   

Settlement due from customers

     1,351        1,117   

Restricted security deposits held for customers

     911        777   

Prepaid expenses and other current assets

     471        681   

Deferred income taxes

     233        128   
  

 

 

   

 

 

 

Total Current Assets

     10,950        9,357   

Property, plant and equipment, net

     526        472   

Deferred income taxes

     70        60   

Goodwill

     1,122        1,092   

Other intangible assets, net

     672        672   

Other assets

     902        809   
  

 

 

   

 

 

 

Total Assets

   $ 14,242      $ 12,462   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Accounts payable

   $ 338      $ 357   

Settlement due to customers

     1,433        1,064   

Restricted security deposits held for customers

     911        777   

Accrued litigation

     886        726   

Accrued expenses

     2,101        1,748   

Other current liabilities

     363        234   
  

 

 

   

 

 

 

Total Current Liabilities

     6,032        4,906   

Deferred income taxes

     117        104   

Other liabilities

     598        523   
  

 

 

   

 

 

 

Total Liabilities

     6,747        5,533   

Commitments and Contingencies

    

Stockholders’ Equity

    

Class A common stock, $0.0001 par value; authorized 3,000,000,000 shares, 1,341,541,110 and 1,336,049,030 shares issued and 1,148,838,370 and 1,184,050,750 outstanding, respectively

     —          —     

Class B common stock, $0.0001 par value; authorized 1,200,000,000 shares, 45,350,070 and 48,388,400 issued and outstanding, respectively

     —          —     

Additional paid-in-capital

     3,762        3,641   

Class A treasury stock, at cost, 192,702,740 and 151,998,280 shares, respectively

     (6,577     (4,139

Retained earnings

     10,121        7,354   

Accumulated other comprehensive income

     178        61   
  

 

 

   

 

 

 

Total Stockholders’ Equity

     7,484        6,917   

Non-controlling interests

     11        12   
  

 

 

   

 

 

 

Total Equity

     7,495        6,929   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 14,242      $ 12,462   
  

 

 

   

 

 

 


MasterCard Incorporated – Page 7

 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

     For the Years Ended December 31,  
     2013     2012     2011  
     (in millions)  

Operating Activities

      

Net income

   $ 3,116      $ 2,759      $ 1,906   

Adjustments to reconcile net income to net cash provided by operating activities:

      

Depreciation and amortization

     258        230        194   

Share-based payments

     63        —          35   

Deferred income taxes

     (119     241        (175

Other

     67        52        17   

Changes in operating assets and liabilities:

      

Accounts receivable

     (42     (121     (162

Income taxes receivable

     153        (185     —     

Settlement due from customers

     (194     (500     (114

Prepaid expenses

     (70     (81     27   

Accrued litigation and legal settlements

     160        (44     467   

Accounts payable

     (20     (2     67   

Settlement due to customers

     322        348        74   

Accrued expenses

     315        221        296   

Net change in other assets and liabilities

     126        30        52   
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     4,135        2,948        2,684   
  

 

 

   

 

 

   

 

 

 

Investing Activities

      

Purchases of investment securities available-for-sale

     (2,526     (2,981     (899

Proceeds from sales of investment securities available-for-sale

     1,488        390        485   

Proceeds from maturities of investment securities available-for-sale

     1,321        891        63   

Purchases of property, plant and equipment

     (155     (96     (77

Capitalized software

     (144     (122     (100

Proceeds from maturities of investment securities held-to-maturity

     36        —          300   

Investment in nonmarketable equity investments

     (20     (118     (74

Decrease (increase) in restricted cash for litigation settlement

     3        (726     —     

Acquisition of businesses, net of cash acquired

     —          (70     (460

Other investing activities

     (7     (7     14   
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (4     (2,839     (748
  

 

 

   

 

 

   

 

 

 

Financing Activities

      

Purchases of treasury stock

     (2,443     (1,748     (1,148

Dividends paid

     (255     (132     (77

Proceeds from debt

     35        —          —     

Cash proceeds from exercise of stock options

     26        31        19   

Tax benefit for share-based compensation

     19        47        12   

Other financing activities

     (11     4        (21
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (2,629     (1,798     (1,215
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     45        7        (54
  

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     1,547        (1,682     667   

Cash and cash equivalents - beginning of period

     2,052        3,734        3,067   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents - end of period

   $ 3,599      $ 2,052      $ 3,734   
  

 

 

   

 

 

   

 

 

 


MasterCard Incorporated – Page 8

 

MASTERCARD INCORPORATED OPERATING PERFORMANCE

 

 

     For the 3 Months ended December 31, 2013  
     GDV
(Bil.)
     Growth
(USD)
    Growth
(Local)
    Purchase
Volume
(Bil.)
     Growth
(Local)
    Purchase
Trans.
(Mil.)
     Cash
Volume
(Bil.)
     Growth
(Local)
    Cash
Trans.
(Mil.)
     Accounts
(Mil.)
     Cards
(Mil.)
 

All MasterCard Credit, Charge and Debit Programs

                            

APMEA

   $ 312         14.5     20.4   $ 211         20.0     2,235       $ 101         21.3     858         393         422   

Canada

     35         0.6     6.6     32         7.1     376         3         -0.3     6         45         55   

Europe

     341         15.5     14.3     230         10.1     3,379         111         24.0     619         306         323   

Latin America

     93         10.2     17.0     56         23.4     1,214         37         8.4     203         125         145   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     781         13.7     16.6     530         15.0     7,204         251         20.1     1,686         869         944   

United States

     324         7.4     7.4     275         7.6     4,938         48         6.4     311         300         337   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,104         11.8     13.8     805         12.4     12,142         299         17.7     1,997         1,168         1,281   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     466         10.6     13.8     413         14.5     4,839         53         9.2     213         497         563   

United States

     155         5.7     5.7     148         5.7     1,681         7         4.6     7         146         178   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     621         9.4     11.7     561         12.0     6,520         60         8.6     220         643         741   

MasterCard Debit Programs

                            

Worldwide less United States

     314         18.5     21.0     117         17.1     2,365         198         23.4     1,473         372         382   

United States

     169         9.1     9.1     127         9.8     3,257         41         6.7     304         154         158   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     483         15.1     16.5     244         13.2     5,622         239         20.2     1,777         525         540   
     For the 12 Months ended December 31, 2013  
     GDV
(Bil.)
     Growth
(USD)
    Growth
(Local)
    Purchase
Volume
(Bil.)
     Growth
(Local)
    Purchase
Trans.
(Mil.)
     Cash
Volume
(Bil.)
     Growth
(Local)
    Cash
Trans.
(Mil.)
     Accounts
(Mil.)
     Cards
(Mil.)
 

All MasterCard Credit, Charge and Debit Programs

                            

APMEA

   $ 1,150         17.1     21.3   $ 770         19.8     8,179       $ 380         24.4     3,101         393         422   

Canada

     131         3.4     6.7     121         7.2     1,403         11         1.0     24         45         55   

Europe

     1,239         15.6     14.5     846         11.4     12,394         393         21.9     2,272         306         323   

Latin America

     340         12.2     16.4     204         21.3     4,466         136         9.7     768         125         145   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     2,860         15.2     17.0     1,940         15.3     26,442         920         20.7     6,165         869         944   

United States

     1,243         6.6     6.6     1,051         7.0     18,861         192         4.3     1,250         300         337   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     4,103         12.4     13.6     2,991         12.2     45,304         1,112         17.5     7,416         1,168         1,281   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     1,724         11.5     13.9     1,521         14.3     18,016         203         10.8     827         497         563   

United States

     587         4.4     4.4     560         4.9     6,357         27         -5.0     26         146         178   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     2,311         9.6     11.3     2,081         11.6     24,372         230         8.7     853         643         741   

MasterCard Debit Programs

                            

Worldwide less United States

     1,136         21.2     22.0     419         19.0     8,427         716         23.8     5,339         372         382   

United States

     656         8.6     8.6     491         9.5     12,505         165         6.0     1,224         154         158   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,792         16.3     16.7     910         13.7     20,932         882         20.0     6,563         525         540   
     For the 3 Months ended December 31, 2012  
     GDV
(Bil.)
     Growth
(USD)
    Growth
(Local)
    Purchase
Volume
(Bil.)
     Growth
(Local)
    Purchase
Trans.
(Mil.)
     Cash
Volume
(Bil.)
     Growth
(Local)
    Cash
Trans.
(Mil.)
     Accounts
(Mil.)
     Cards
(Mil.)
 

All MasterCard Credit, Charge and Debit Programs

                            

APMEA

   $ 272         23.6     23.1   $ 183         19.8     1,882       $ 89         30.5     676         339         367   

Canada

     34         11.2     7.6     32         7.8     347         3         4.5     6         40         48   

Europe

     295         14.9     16.4     206         13.2     2,881         89         24.5     514         257         273   

Latin America

     85         14.3     16.8     50         20.2     1,062         34         12.3     192         112         131   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     687         17.9     18.5     471         16.0     6,172         216         24.4     1,388         748         820   

United States

     301         6.8     6.8     256         7.2     4,569         45         4.8     297         274         311   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     988         14.3     14.7     727         12.7     10,741         261         20.5     1,685         1,021         1,131   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     421         14.6     15.0     372         15.1     4,315         50         14.2     199         470         534   

United States

     147         2.5     2.5     140         4.1     1,632         7         -21.9     7         141         175   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     568         11.2     11.5     512         11.9     5,946         56         8.1     205         611         709   

MasterCard Debit Programs

                            

Worldwide less United States

     265         23.6     24.6     99         19.5     1,858         166         27.9     1,189         277         286   

United States

     155         11.3     11.3     116         11.2     2,937         39         11.7     291         133         136   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     420         18.8     19.3     215         14.9     4,795         205         24.5     1,479         410         422   
     For the 12 Months ended December 31, 2012  
     GDV
(Bil.)
     Growth
(USD)
    Growth
(Local)
    Purchase
Volume
(Bil.)
     Growth
(Local)
    Purchase
Trans.
(Mil.)
     Cash
Volume
(Bil.)
     Growth
(Local)
    Cash
Trans.
(Mil.)
     Accounts
(Mil.)
     Cards
(Mil.)
 

All MasterCard Credit, Charge and Debit Programs

                            

APMEA

   $ 981         21.6     22.9   $ 662         21.1     6,862       $ 319         26.8     2,396         339         367   

Canada

     127         6.7     7.7     116         8.5     1,288         11         -0.3     23         40         48   

Europe

     1,072         9.3     16.5     752         12.6     10,503         320         26.5     1,903         257         273   

Latin America

     303         9.8     19.1     181         23.2     3,883         121         13.5     723         112         131   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     2,483         13.8     18.7     1,711         16.5     22,535         772         23.9     5,046         748         820   

United States

     1,166         9.1     9.1     982         9.0     17,542         184         9.7     1,208         274         311   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     3,650         12.2     15.5     2,693         13.7     40,077         956         20.9     6,254         1,021         1,131   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     1,546         11.5     15.4     1,361         15.9     15,992         185         11.5     748         470         534   

United States

     562         3.5     3.5     534         5.1     6,236         28         -19.1     27         141         175   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     2,109         9.2     12.0     1,895         12.7     22,228         213         6.2     775         611         709   

MasterCard Debit Programs

                            

Worldwide less United States

     937         17.8     24.7     350         18.9     6,543         587         28.4     4,298         277         286   

United States

     604         14.9     14.9     448         14.1     11,306         156         17.2     1,181         133         136   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,541         16.6     20.7     798         16.2     17,849         743         25.9     5,479         410         422   

APMEA = Asia Pacific / Middle East / Africa

Note that the figures in the preceding tables may not sum due to rounding; growth represents change from the comparable year-ago period


MasterCard Incorporated – Page 9

 

Footnote

The tables set forth the gross dollar volume (“GDV”), purchase volume, cash volume and the number of purchase transactions, cash transactions, accounts, cards on a regional and global basis for MasterCard®-branded and MasterCard Electronic™-branded cards. Growth rates over prior periods are provided for volume-based data.

Debit transactions on Maestro® and Cirrus®-branded cards, Mondex® transactions and transactions involving brands other than MasterCard are not included in the preceding tables.

For purposes of the table: GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; “purchase volume” means the aggregate dollar amount of purchases made with MasterCard-branded cards for the relevant period; and “cash volume” means the aggregate dollar amount of cash disbursements obtained with MasterCard-branded cards for the relevant period. The number of cards includes virtual cards, which are MasterCard-branded payment accounts that do not generally have physical cards associated with them.

The MasterCard payment product is comprised of credit, charge and debit programs, and data relating to each type of program is included in the tables. Debit programs include MasterCard-branded debit programs where the primary means of cardholder validation at the point of sale is for cardholders either to sign a sales receipt or enter a PIN. The tables include information with respect to transactions involving MasterCard-branded cards that are not processed by MasterCard and transactions for which MasterCard does not earn significant revenues.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which MasterCard volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. MasterCard reports period-over-period rates of change in purchase volume and cash volume on the basis of local currency information, in order to eliminate the impact of changes in the value of foreign currencies against the U.S. dollar in calculating such rates of change.

The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is provided by MasterCard customers and is subject to verification by MasterCard and partial cross-checking against information provided by MasterCard’s transaction processing systems. The data set forth in the accounts and cards columns is provided by MasterCard customers and is subject to certain limited verification by MasterCard. A portion of the data set forth in the accounts and cards columns reflects the impact of routine portfolio changes among customers and other practices that may lead to over counting of the underlying data in certain circumstances. All data is subject to revision and amendment by MasterCard’s customers subsequent to the date of its release.

In 2012, certain MasterCard Debit and Credit Programs in the Europe region have changed due to a reclassification of programs. There is no impact at the All MasterCard Programs level. In addition, Purchase Transactions for certain Credit Programs in the Latin America region have been restated due to revisions from several customers. MasterCard revenue is not impacted from these changes. Data for the comparable periods in 2012, 2011 and 2010 have been restated to be consistent with these approaches.

In 2013Q4, a large Maestro customer revised their number of Maestro cards to exclude inactive cards. Data for the comparable periods in 2013, 2012, and 2011 have been revised to be consistent with this approach. MasterCard revenue is not impacted from these historical changes.

Performance information for prior periods can be found in the “Investor Relations” section of MasterCard’s website at www.mastercard.com.

###


MasterCard Incorporated – Page 10

 

GAAP Reconciliations

($ in millions, except per share data)

 

     Three Months Ended
December 31, 2013
    Three Months Ended
December 31, 2012
 
     Actual     Special Item (a)     Non-GAAP     Actual  

Provision for litigation settlement

   $ 95      $ (95 )    $ —        $ —     

Total operating expenses

     1,206        (95 )      1,111        996   

Operating income

     920        95        1,015        899   

Operating Margin

     43.3 %        47.7 %      47.4 % 

Income before income taxes

     911        95        1,006        894   

Income tax expense

     288        34        322        289   

Effective Tax Rate

     31.6     0.4 %      32.0     32.4

Net Income

     623        61        684        605   

Basic Earnings per Share

   $ 0.52      $ 0.05      $ 0.57      $ 0.49   

Diluted Earnings per Share

   $ 0.52      $ 0.05      $ 0.57      $ 0.49   

 

(a) Represents effect of net incremental accrual for U.S. merchant litigations

 

     Twelve Months Ended
December 31, 2013
    Twelve Months Ended
December 31, 2012
 
     Actual     Special Item (a)     Non-GAAP     Actual     Special Item (a)     Non-GAAP  

Provision for litigation settlement

   $ 95      $ (95 )    $ —        $ 20      $ (20 )    $ —     

Total operating expenses

     3,843        (95 )      3,748        3,454        (20 )      3,434   

Operating income

     4,503        95        4,598        3,937        20        3,957   

Operating Margin

     54.0 %        55.1 %      53.3 %        53.5 % 

Income before income taxes

     4,500        95        4,595        3,933        20        3,953   

Income tax expense

     1,384        34        1,418        1,174        7        1,181   

Effective Tax Rate

     30.8     0.1 %      30.9     29.9     —          29.9

Net Income

     3,116        61        3,177        2,759        13        2,772   

Basic Earnings per Share

   $ 2.57      $ 0.05      $ 2.62      $ 2.20      $ 0.01      $ 2.21   

Diluted Earnings per Share

   $ 2.56      $ 0.05      $ 2.61      $ 2.19      $ 0.01      $ 2.20   

 

(a) Represents effect of net incremental accrual for U.S. merchant litigations