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Form 8-K MASTERCARD INC For: Jan 30

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January 30, 2015 8:04 AM EST




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________________________________
FORM 8-K
_______________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January�30, 2015
_______________________________________

MasterCard Incorporated�
(Exact name of registrant as specified in its charter)�
_______________________________________

Delaware�
(State or other jurisdiction
of incorporation)
001-32877
(Commission
File Number)
13-4172551�
(IRS Employer
Identification No.)
�
2000 Purchase Street
Purchase, New York�
(Address of principal executive offices)
10577�
(Zip Code)
(914) 249-2000
(Registrant's telephone number, including area code)

NOT APPLICABLE�
(Former name or former address, if changed since last report)
_______________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
�
o
�
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
�
o
�
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
�
o
�
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
�
o
�
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

1



Item�2.02 Results of Operations and Financial Condition

On January�30, 2015, MasterCard Incorporated (MasterCard) issued a press release announcing financial results for its fourth quarter and full year 2014.

A copy of the press release is attached hereto as Exhibit 99.1. All information in the press release is furnished but not filed.

Non-GAAP Financial Information

In the attached press release, MasterCard discloses the following non-GAAP financial measures:
"
Growth rates for total operating expenses, operating income, net income and earnings per diluted share presented on a pro forma basis giving effect to the exclusion of a net incremental charge related to the U.S. merchant litigations accrued during each of the three-month and year-end periods ended December�31, 2013. MasterCard excluded this item because MasterCards management monitors material litigation settlements separately from ongoing operations and evaluates ongoing performance without these amounts. MasterCards management believes that the non-GAAP financial measures presented facilitate an understanding of MasterCards operating performance and meaningful comparison of its results between periods.

"
Effective tax rate presented on a pro forma basis giving effect to the exclusion of income tax benefits associated with the net incremental charge related to the U.S. merchant litigations during the three-month and year-end periods ended December�31, 2013. MasterCards management believes that the non-GAAP financial measure presented facilitates an understanding of MasterCards operating performance and meaningful comparison of its results between periods.

"
Presentation of growth rates adjusted for currency. Due to the impact of foreign currency rate fluctuations on reported results, MasterCards management believes the presentation of certain growth rates adjusted for currency, calculated by re-measuring the prior periods results using the current periods exchange rates, provides relevant information.

MasterCard's management uses non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of performance-based compensation. Pursuant to the requirements of Regulation S-K, the attached press release includes reconciliations of the requisite non-GAAP financial measures to the most directly comparable GAAP financial measures. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for the Company's related financial results prepared in accordance with GAAP.


Item�7.01 Regulation FD Disclosure

On January�30, 2015, MasterCard will host a conference call to discuss its fourth-quarter and full year 2014 financial results. A copy of the presentation to be used during the conference call is attached hereto as Exhibit 99.2. All information in the presentation is furnished but not filed.

Item�9.01 Financial Statements and Exhibits

(d)�Exhibits.

Exhibit Number
Exhibit Description
99.1
Press Release issued by MasterCard Incorporated, dated January 30, 2015
99.2
Presentation of MasterCard Incorporated, dated January 30, 2015


2


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�
�
MASTERCARD INCORPORATED
�
�
�
�
Date:
January�30, 2015
By:
�
/s/ Janet McGinness
�
�
�
�
Janet McGinness
�
�
�
�
Corporate Secretary

3



EXHIBIT INDEX

Exhibit Number
Exhibit Description
99.1
Press Release issued by MasterCard Incorporated, dated January 30, 2015
99.2
Presentation of MasterCard Incorporated, dated January 30, 2015


4
�


MasterCard Incorporated Reports
Fourth-Quarter and Full-Year 2014
Financial Results

"
Fourth-quarter net income of $801 million, or $0.69 per diluted share
"
Fourth-quarter net revenue increase of 14%, to $2.4 billion
"
Fourth-quarter gross dollar volume up 13% and purchase volume up 12%

Purchase, NY, January�30, 2015 - MasterCard Incorporated (NYSE: MA) today announced financial results for the fourth quarter of 2014. The company reported net income of $801 million, an increase of 17% or 21% adjusted for currency, and earnings per diluted share of $0.69, up 21% or 25% adjusted for currency, in each case versus the year-ago period and excluding the special item related to the U.S. merchant litigation taken in that period. Acquisitions had a $0.03 dilutive impact on earnings per diluted share.

Net revenue for the fourth quarter of 2014 was $2.4 billion, a 14% increase versus the same period in 2013 as-reported and 17% increase adjusted for currency. Net revenue growth was driven by the impact of the following:

"
An increase in cross-border volumes of 19%;
"
A 13% increase in gross dollar volume, on a local currency basis, to $1.2 trillion; and
"
An increase in processed transactions of 11%, to 11.6 billion.

These factors were partially offset by an increase in rebates and incentives. Acquisitions contributed 3 percentage points to total net revenue growth.

Worldwide purchase volume during the quarter was up 12% on a local currency basis versus the fourth quarter of 2013, to $858 billion. As of December�31, 2014, the companys customers had issued 2.1 billion MasterCard and Maestro-branded cards.

Despite a mixed global economy, we delivered solid results for the quarter and for the full year in 2014, said Ajay Banga, president and CEO, MasterCard.� This year is off to a good start with several new wins, as well as renewals of some important customer agreements, with more in the pipeline. Looking ahead, we will continue to be at the forefront of our industry by driving payment innovation with solutions such as MasterPass, and by increasing electronic payments usage globally as demonstrated by our significant expanded acceptance footprint across Africa.

Total operating expenses increased 26%, or 29% adjusted for currency, to $1.4 billion, during the fourth quarter of 2014 compared to the same period in 2013, excluding that periods special item. The primary driver of this quarters expense growth was an $87 million restructuring charge taken in this years period.

-more-


MasterCard Incorporated - Page 2

The charge is related to actions to better position ourselves for the future, such as realigning some roles within the companys business groups, redeploying resources geographically and consolidating all processing assets under one organization. The remainder of the increase was primarily driven by G&A expenses, continuing our investments in strategic initiatives, similar to recent quarters. Acquisitions contributed 9 percentage points to the growth. Including last years special item, total operating expense increased 16%, or 18% adjusted for currency, from the year-ago period.

Operating income for the fourth quarter of 2014 was flat or increased 3% adjusted for currency versus the year-ago period, excluding the special item, and the company delivered an operating margin of 42.1%.

MasterCard reported other expense of $11 million in the fourth quarter of 2014 versus $9 million in the fourth quarter of 2013. The change was mainly driven by higher interest expense related to the companys inaugural debt issuance in March 2014.

MasterCards effective tax rate was 20.3% in the fourth quarter of 2014, versus a rate of 32.0% in the comparable period in 2013, excluding the special item. The decrease was primarily due to the impact of our continued efforts to better align our tax structure with our business footprint outside of the U.S.

During the fourth quarter of 2014, MasterCard repurchased approximately 2.1 million shares of Class�A common stock at a cost of approximately $155 million. Quarter-to-date through January 23rd, the company repurchased an additional 2.5 million shares at a cost of approximately $215 million, with $3.8 billion remaining under the current repurchase program authorizations.

Full-Year 2014 Results

For the year ended December 31, 2014, MasterCard reported net income of $3.6 billion, an increase of 14%, both before and after adjusting for currency, and earnings per diluted share of $3.10, up 19%, in each case versus the year-ago period and excluding last years special item. Acquisitions had a $0.04 dilutive impact on earnings per diluted share.

Net revenue for the full-year 2014 was $9.5 billion, an increase of 14% versus 2013, both before and after adjusting for currency. Gross dollar volume growth of 13%, cross-border volume growth of 16% and transaction processing growth of 12% contributed to full-year net revenue growth. These factors were partially offset by an increase in rebates and incentives. Acquisitions contributed 2 percentage points to total net revenue growth.

Total operating expenses increased 17%, both before and after adjusting for currency, to $4.4 billion, compared to full-year 2013 and excluding last years special item. The increase was primarily due to on-going investments to support strategic initiatives. Acquisitions contributed 6 percentage points to total operating expense growth. Including last years special item, total operating expense increased 14%, both before and after adjusting for currency, from the year-ago period.

Excluding last years special item, operating income increased 11% before and after adjusting for currency for 2014 versus 2013, delivering an operating margin of 53.9% for the full-year 2014.



MasterCard Incorporated - Page 3


MasterCards effective tax rate was 28.8% in full-year 2014, versus a rate of 30.9% in full-year 2013, excluding the special item. The decrease was primarily due to the impact of our continued efforts to better align our tax structure with our business footprint outside of the U.S.

For full-year 2014, MasterCard repurchased 44.5 million shares at a cost of approximately $3.4 billion.

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 877-201-0168 (within the U.S.) and 647-788-4901 (outside the U.S.), and the passcode is 60630733. A replay of the call will be available for one week and can be accessed by dialing 855-859-2056 (within the U.S.) and 404-537-3406 (outside the U.S.), and using passcode 60630733.

This call can also be accessed through the Investor Relations section of the companys website at�www.mastercard.com/investor.

Non-GAAP Financial Information

The company has presented certain financial data that are considered 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 represent a non-GAAP measure and are calculated by remeasuring the prior periods results using the current periods exchange rates.

About MasterCard Incorporated

MasterCard�(NYSE: MA),�www.mastercard.com, is a technology company in the global payments industry. We operate�the worlds fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCards 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 MasterCards 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 companys ongoing obligations under the U.S. federal



MasterCard Incorporated - Page 4

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 companys efforts in payment innovation.

Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the companys filings with the Securities and Exchange Commission (SEC), including the companys Annual Report on Form 10-K for the year ended December�31, 2013, the companys Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC during 2014, 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 companys results to differ materially from expected results.

###

Contacts:

Investor Relations: Barbara Gasper or Matt Lanford,�[email protected], 914-249-4565
Media Relations: Seth Eisen,�[email protected],�914-249-3153




MasterCard Incorporated - Page 5


MASTERCARD INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

�
�
Three Months Ended December 31,
�
Twelve Months Ended December 31,
�
2014
�
2013
�
2014
�
2013
�
(in�millions,�except�per�share�data)
Net Revenue
$
2,416

�
$
2,126

�
$
9,473

�
$
8,346

Operating Expenses
�
�
�
�
�
�
�
General and administrative
977

�
719

�
3,184

�
2,649

Advertising and marketing
337

�
321

�
862

�
841

Depreciation and amortization
84

�
71

�
321

�
258

Provision for litigation settlement


�
95

�


�
95

Total operating expenses
1,398

�
1,206

�
4,367

�
3,843

Operating income
1,018

�
920

�
5,106

�
4,503

Other Income (Expense)
�
�
�
�
�
�
�
Investment income
7

�
8

�
28

�
38

Interest expense
(16
)
�
(7
)
�
(48
)
�
(14
)
Other income (expense), net
(2
)
�
(10
)
�
(7
)
�
(27
)
Total other income (expense)
(11
)
�
(9
)
�
(27
)
�
(3
)
Income before income taxes
1,007

�
911

�
5,079

�
4,500

Income tax expense
206

�
288

�
1,462

�
1,384

Net Income
$
801

�
$
623

�
$
3,617

�
$
3,116

�
�
�
�
�
�
�
�
Basic Earnings per Share
$
0.70

�
$
0.52

�
$
3.11

�
$
2.57

Basic Weighted-Average Shares Outstanding
1,153

�
1,201

�
1,165

�
1,211

Diluted Earnings per Share
$
0.69

�
$
0.52

�
$
3.10

�
$
2.56

Diluted Weighted-Average Shares Outstanding
1,157

�
1,205

�
1,169

�
1,215




MasterCard Incorporated - Page 6

MASTERCARD INCORPORATED
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

�
�
December 31,
�
2014
�
2013
�
(in�millions,�except�share�data)
ASSETS
�
�
�
Cash and cash equivalents
$
5,137

�
$
3,599

Restricted cash for litigation settlement
540

�
723

Investment securities available-for-sale, at fair value
1,168

�
2,696

Accounts receivable
1,109

�
966

Settlement due from customers
1,052

�
1,351

Restricted security deposits held for customers
950

�
911

Prepaid expenses and other current assets
741

�
471

Deferred income taxes
300

�
233

Total Current Assets
10,997

�
10,950

Property, plant and equipment, net
615

�
526

Deferred income taxes
96

�
70

Goodwill
1,522

�
1,122

Other intangible assets, net
714

�
672

Other assets
1,385

�
902

Total Assets
$
15,329

�
$
14,242

LIABILITIES AND EQUITY
�
�
�
Accounts payable
$
419

�
$
338

Settlement due to customers
1,142

�
1,433

Restricted security deposits held for customers
950

�
911

Accrued litigation
771

�
886

Accrued expenses
2,439

�
2,101

Other current liabilities
501

�
363

Total Current Liabilities
6,222

�
6,032

Long-term debt
1,494

�


Deferred income taxes
115

�
117

Other liabilities
674

�
598

Total Liabilities
8,505

�
6,747

Commitments and Contingencies

�

Stockholders Equity
�
�

Class�A common stock, $0.0001 par value; authorized 3,000,000,000 shares, 1,352,378,383 and 1,341,541,110 shares issued and 1,115,369,640 and 1,148,838,370 outstanding, respectively


�


Class B common stock, $0.0001 par value; authorized 1,200,000,000 shares, 37,192,165 and 45,350,070 issued and outstanding, respectively


�


Additional paid-in-capital
3,876

�
3,762

Class�A treasury stock, at cost, 237,008,743 and 192,702,740 shares, respectively
(9,995
)
�
(6,577
)
Retained earnings
13,169

�
10,121

Accumulated other comprehensive income (loss)
(260
)
�
178

Total Stockholders Equity
6,790

�
7,484

Non-controlling interests
34

�
11

Total Equity
6,824

�
7,495

Total Liabilities and Equity
$
15,329

�
$
14,242




MasterCard Incorporated - Page 7

MASTERCARD INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
�
For the Years Ended December 31,
�
2014
�
2013
�
2012
�
(in millions)
Operating Activities
�
�
�
�
�
Net income
$
3,617

�
$
3,116

�
$
2,759

Adjustments to reconcile net income to net cash provided by operating activities:
�
�
�
�
�
Amortization of customer and merchant incentives
691

�
603

�
519

Depreciation and amortization
321

�
258

�
230

Share-based payments
(15
)
�
63

�


Deferred income taxes
(91
)
�
(119
)
�
241

Other
52

�
67

�
52

Changes in operating assets and liabilities:
�
�
�
�
�
Accounts receivable
(164
)
�
(42
)
�
(121
)
Income taxes receivable
(8
)
�
153

�
(185
)
Settlement due from customers
185

�
(194
)
�
(500
)
Prepaid expenses
(1,316
)
�
(598
)
�
(573
)
Accrued litigation and legal settlements
(115
)
�
160

�
(44
)
Accounts payable
61

�
(20
)
�
(2
)
Settlement due to customers
(165
)
�
322

�
348

Accrued expenses
389

�
315

�
221

Net change in other assets and liabilities
(35
)
�
51

�
3

Net cash provided by operating activities
3,407

�
4,135

�
2,948

Investing Activities
�
�
�
�
�
Purchases of investment securities available-for-sale
(2,385
)
�
(2,526
)
�
(2,981
)
Acquisition of businesses, net of cash acquired
(525
)
�


�
(70
)
Purchases of property, plant and equipment
(175
)
�
(155
)
�
(96
)
Capitalized software
(159
)
�
(144
)
�
(122
)
Proceeds from sales of investment securities available-for-sale
2,477

�
1,488

�
390

Proceeds from maturities of investment securities available-for-sale
1,358

�
1,321

�
891

Decrease (increase) in restricted cash for litigation settlement
183

�
3

�
(726
)
Proceeds from maturities of investment securities held-to-maturity


�
36

�


Other investing activities
(84
)
�
(27
)
�
(125
)
Net cash provided by (used in) investing activities
690

�
(4
)
�
(2,839
)
Financing Activities
�
�
�
�
�
Purchases of treasury stock
(3,386
)
�
(2,443
)
�
(1,748
)
Proceeds from debt
1,530

�
35

�


Dividends paid
(515
)
�
(255
)
�
(132
)
Tax benefit for share-based payments
54

�
19

�
47

Cash proceeds from exercise of stock options
28

�
26

�
31

Other financing activities
(50
)
�
(11
)
�
4

Net cash used in financing activities
(2,339
)
�
(2,629
)
�
(1,798
)
Effect of exchange rate changes on cash and cash equivalents
(220
)
�
45

�
7

Net increase (decrease) in cash and cash equivalents
1,538

�
1,547

�
(1,682
)
Cash and cash equivalents - beginning of period
3,599

�
2,052

�
3,734

Cash and cash equivalents - end of period
$
5,137

�
$
3,599

�
$
2,052

�
�
�
�
�
�
Non-Cash Investing and Financing Activities
�
�
�
�
�
Fair value of assets acquired, net of cash acquired
$
768

�
$


�
$
77

Fair value of liabilities assumed related to acquisitions
$
141

�
$


�
$
2




MasterCard Incorporated - Page 8


MASTERCARD INCORPORATED OPERATING PERFORMANCE
�
For the 3 months ended December 31, 2014
�
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
$
345

�
10.3
�%
�
14.7
%
�
$
233

�
14.5
%
�
2,720

�
$
112

�
15.1
�%
�
1,008

�
450

�
482

Canada
35

�
2.0
�%
�
10.5
%
�
33

�
12.6
%
�
421

�
2

�
-16.3
�%
�
5

�
44

�
53

Europe
347

�
1.8
�%
�
16.2
%
�
235

�
12.3
%
�
4,051

�
112

�
25.2
�%
�
718

�
356

�
374

Latin America
97

�
3.3
�%
�
16.0
%
�
60

�
22.2
%
�
1,377

�
38

�
7.3
�%
�
223

�
138

�
158

Worldwide less United States
824

�
5.4
�%
�
15.3
%
�
560

�
14.2
%
�
8,569

�
263

�
17.6
�%
�
1,954

�
988

�
1,066

United States
348

�
7.5
�%
�
7.5
%
�
298

�
8.2
%
�
5,299

�
50

�
3.4
�%
�
325

�
334

�
372

Worldwide
1,172

�
6.0
�%
�
12.9
%
�
858

�
12.1
%
�
13,868

�
313

�
15.0
�%
�
2,279

�
1,323

�
1,437

MasterCard Credit and Charge Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
476

�
2.2
�%
�
10.6
%
�
430

�
11.7
%
�
5,403

�
47

�
0.9
�%
�
201

�
512

�
576

United States
166

�
6.9
�%
�
6.9
%
�
160

�
8.0
%
�
1,781

�
6

�
-15.3
�%
�
8

�
159

�
191

Worldwide
642

�
3.4
�%
�
9.6
%
�
589

�
10.7
%
�
7,184

�
53

�
-1.3
�%
�
208

�
671

�
767

MasterCard Debit Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
348

�
10.0
�%
�
22.4
%
�
131

�
23.3
%
�
3,166

�
217

�
21.9
�%
�
1,753

�
477

�
490

United States
182

�
8.1
�%
�
8.1
%
�
138

�
8.5
%
�
3,518

�
44

�
6.6
�%
�
317

�
175

�
181

Worldwide
530

�
9.3
�%
�
17.1
%
�
269

�
15.2
%
�
6,684

�
261

�
19.0
�%
�
2,070

�
652

�
670

�
For the 12 Months ended December 31, 2014
�
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
$
1,308

�
13.4
�%
�
16.9
%
�
$
877

�
16.4
%
�
9,913

�
$
431

�
17.9
�%
�
3,786

�
450

�
482

Canada
131

�
-0.2
�%
�
6.9
%
�
122

�
8.7
%
�
1,531

�
9

�
-12.8
�%
�
23

�
44

�
53

Europe
1,356

�
9.5
�%
�
14.0
%
�
918

�
10.7
%
�
14,647

�
438

�
21.6
�%
�
2,664

�
356

�
374

Latin America
359

�
5.0
�%
�
14.9
%
�
220

�
21.2
%
�
5,105

�
140

�
6.2
�%
�
832

�
138

�
158

Worldwide less United States
3,154

�
10.1
�%
�
15.0
%
�
2,137

�
13.9
%
�
31,196

�
1,017

�
17.3
�%
�
7,304

�
988

�
1,066

United States
1,344

�
8.2
�%
�
8.2
%
�
1,144

�
8.8
%
�
20,323

�
201

�
4.4
�%
�
1,297

�
334

�
372

Worldwide
4,499

�
9.5
�%
�
12.8
%
�
3,281

�
12.1
%
�
51,519

�
1,218

�
15.0
�%
�
8,602

�
1,323

�
1,437

MasterCard Credit and Charge Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
1,842

�
6.8
�%
�
11.0
%
�
1,648

�
12.2
%
�
20,189

�
194

�
1.5
�%
�
814

�
512

�
576

United States
633

�
7.8
�%
�
7.8
%
�
607

�
8.4
%
�
6,727

�
26

�
-5.1
�%
�
28

�
159

�
191

Worldwide
2,475

�
7.1
�%
�
10.1
%
�
2,256

�
11.2
%
�
26,917

�
219

�
0.7
�%
�
842

�
671

�
767

MasterCard Debit Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
1,312

�
15.0
�%
�
21.1
%
�
489

�
20.0
%
�
11,006

�
823

�
21.7
�%
�
6,490

�
477

�
490

United States
711

�
8.5
�%
�
8.5
%
�
536

�
9.3
%
�
13,596

�
175

�
6.0
�%
�
1,269

�
175

�
181

Worldwide
2,024

�
12.6
�%
�
16.3
%
�
1,025

�
14.2
%
�
24,602

�
999

�
18.6
�%
�
7,760

�
652

�
670

�
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
$
313

�
14.7
�%
�
20.6
%
�
$
211

�
19.8
%
�
2,253

�
$
101

�
22.2
�%
�
869

�
392

�
421

Canada
35

�
0.6
�%
�
6.6
%
�
32

�
7.1
%
�
376

�
3

�
-0.3
�%
�
6

�
39

�
47

Europe
340

�
15.3
�%
�
14.1
%
�
230

�
10.1
%
�
3,382

�
111

�
23.4
�%
�
618

�
307

�
323

Latin America
94

�
10.3
�%
�
17.1
%
�
56

�
23.4
%
�
1,214

�
38

�
8.7
�%
�
209

�
122

�
142

Worldwide less United States
782

�
13.7
�%
�
16.6
%
�
530

�
14.9
%
�
7,224

�
252

�
20.2
�%
�
1,702

�
860

�
933

United States
324

�
7.4
�%
�
7.4
%
�
275

�
7.6
%
�
4,937

�
48

�
6.5
�%
�
311

�
297

�
332

Worldwide
1,105

�
11.8
�%
�
13.7
%
�
805

�
12.3
%
�
12,161

�
300

�
17.8
�%
�
2,013

�
1,157

�
1,265

MasterCard Credit and Charge Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
466

�
10.4
�%
�
13.6
%
�
413

�
14.3
%
�
4,856

�
53

�
8.9
�%
�
214

�
489

�
552

United States
155

�
5.6
�%
�
5.6
%
�
148

�
5.7
%
�
1,679

�
7

�
4.5
�%
�
7

�
144

�
175

Worldwide
621

�
9.2
�%
�
11.5
%
�
561

�
11.9
%
�
6,535

�
60

�
8.3
�%
�
221

�
633

�
726

MasterCard Debit Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
316

�
18.8
�%
�
21.3
%
�
117

�
17.4
%
�
2,368

�
199

�
23.7
�%
�
1,488

�
372

�
382

United States
169

�
9.1
�%
�
9.1
%
�
127

�
9.8
%
�
3,258

�
41

�
6.8
�%
�
304

�
153

�
157

Worldwide
485

�
15.3
�%
�
16.8
%
�
244

�
13.4
%
�
5,626

�
240

�
20.4
�%
�
1,792

�
524

�
539

�
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
$
1,153

�
17.5
�%
�
21.7
%
�
$
771

�
19.9
%
�
8,226

�
$
383

�
25.4
�%
�
3,135

�
392

�
421

Canada
131

�
3.4
�%
�
6.7
%
�
121

�
7.2
%
�
1,403

�
11

�
1.0
�%
�
24

�
39

�
47

Europe
1,239

�
15.6
�%
�
14.5
%
�
846

�
11.4
%
�
12,398

�
393

�
21.8
�%
�
2,271

�
307

�
323

Latin America
342

�
12.2
�%
�
16.4
%
�
204

�
21.3
%
�
4,467

�
139

�
9.8
�%
�
789

�
122

�
142

Worldwide less United States
2,866

�
15.3
�%
�
17.1
%
�
1,941

�
15.3
%
�
26,494

�
925

�
21.0
�%
�
6,218

�
860

�
933

United States
1,243

�
6.6
�%
�
6.6
%
�
1,051

�
7.0
%
�
18,858

�
192

�
4.2
�%
�
1,250

�
297

�
332

Worldwide
4,108

�
12.5
�%
�
13.7
%
�
2,992

�
12.3
%
�
45,352

�
1,117

�
17.7
�%
�
7,468

�
1,157

�
1,265

MasterCard Credit and Charge Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
1,725

�
11.5
�%
�
13.9
%
�
1,521

�
14.3
%
�
18,060

�
203

�
10.8
�%
�
831

�
489

�
552

United States
587

�
4.4
�%
�
4.4
%
�
560

�
4.9
%
�
6,353

�
27

�
-5.0
�%
�
26

�
144

�
175

Worldwide
2,312

�
9.6
�%
�
11.3
%
�
2,081

�
11.6
%
�
24,414

�
230

�
8.7
�%
�
856

�
633

�
726

MasterCard Debit Programs
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Worldwide less United States
1,141

�
21.5
�%
�
22.3
%
�
420

�
19.2
%
�
8,434

�
721

�
24.2
�%
�
5,388

�
372

�
382

United States
656

�
8.6
�%
�
8.6
%
�
491

�
9.5
%
�
12,504

�
165

�
5.9
�%
�
1,224

�
153

�
157

Worldwide
1,797

�
16.5
�%
�
16.9
%
�
910

�
13.8
%
�
20,938

�
887

�
20.3
�%
�
6,612

�
524

�
539

�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�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 and 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 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 MasterCards 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 MasterCards customers subsequent to the date of its release.

In 2013 Q4, a large Maestro customer revised their number of Maestro cards to exclude inactive cards.�Data for the comparable periods in 2013 and 2012 have been revised to be consistent with this approach.�In 2014 Q2, a large customer revised their number of MasterCard credit cards to exclude inactive cards. Data for the comparable periods in 2013 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 the MasterCard website at www.mastercard.com.



MasterCard Incorporated - Page 10




GAAP Reconciliations
($ in millions, except per share data)
�
Three Months Ended December 31, 2014
�
Three Months Ended
December 31, 2013
�
Year-over-year % Growth
�
Actual
�
Actual
�
Special Item (a)
�
Non-GAAP
�
Actual
�
Special Item (a)
�
Non-GAAP
Provision for litigation settlement


�
$
95

�
$
(95
)
�
$


�


�


�


Total operating expenses
$
1,398

�
$
1,206

�
$
(95
)
�
$
1,111

�
16
�%
�
(10
)%
�
26
�%
Operating income
$
1,018

�
$
920

�
$
95

�
$
1,015

�
11
�%
�
10
�%
�

�%
Operating Margin
42.1
%
�
43.3
%
�
�
�
47.7
%
�
�
�
�
�
�
Income before income taxes
$
1,007

�
$
911

�
$
95

�
$
1,006

�
11
�%
�
11
�%
�

�%
Income tax expense
$
206

�
$
288

�
$
34

�
$
322

�
(29
)%
�
7
�%
�
(36
)%
Effective Tax Rate
20.3
%
�
31.6
%
�
0.4
%
�
32.0
%
�
�
�
�
�
�
Net Income
$
801

�
$
623

�
$
61

�
$
684

�
29
�%
�
11
�%
�
17
�%
Basic Earnings per Share
$
0.70

�
$
0.52

�
$
0.05

�
$
0.57

�
35
�%
�
12
�%
�
23
�%
Diluted Earnings per Share
$
0.69

�
$
0.52

�
$
0.05

�
$
0.57

�
33
�%
�
12
�%
�
21
�%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Note: Figures may not sum due to rounding
(a) Represents effect of net incremental accrual for U.S. merchant litigations
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Twelve Months Ended December 31, 2014
�
Twelve Months Ended
December 31, 2013
�
Year-over-year % Growth
�
Actual
�
Actual
�
Special Item (a)
�
Non-GAAP
�
Actual
�
Special Item (a)
�
Non-GAAP
Provision for litigation settlement


�
$
95

�
$
(95
)
�
$


�


�


�


Total operating expenses
$
4,367

�
$
3,843

�
$
(95
)
�
$
3,748

�
14
�%
�
(3
)%
�
17
�%
Operating income
$
5,106

�
$
4,503

�
$
95

�
$
4,598

�
13
�%
�
2
�%
�
11
�%
Operating Margin
53.9
%
�
54.0
%
�
�
�
55.1
%
�
�
�
�
�
�
Income before income taxes
$
5,079

�
$
4,500

�
$
95

�
$
4,595

�
13
�%
�
2
�%
�
11
�%
Income tax expense
$
1,462

�
$
1,384

�
$
34

�
$
1,418

�
6
�%
�
3
�%
�
3
�%
Effective Tax Rate
28.8
%
�
30.8
%
�
0.1
%
�
30.9
%
�
�
�
�
�
�
Net Income
$
3,617

�
$
3,116

�
$
61

�
$
3,177

�
16
�%
�
2
�%
�
14
�%
Basic Earnings per Share
$
3.11

�
$
2.57

�
$
0.05

�
$
2.62

�
21
�%
�
2
�%
�
19
�%
Diluted Earnings per Share
$
3.10

�
$
2.56

�
$
0.05

�
$
2.61

�
21
�%
�
2
�%
�
19
�%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Note: Figures may not sum due to rounding
(a) Represents effect of net incremental accrual for U.S. merchant litigations
�
�
�
�
�
�

�2015 MasterCard. Proprietary MasterCard Incorporated Fourth-Quarter and Full-Year 2014 Financial Results Conference Call January 30, 2015

�
�2015 MasterCard. Proprietary Business Update Financial & Operational Overview Economic Update Business Highlights Page 2

�
�2015 MasterCard. Proprietary 4th Quarter Selected Financial Performance ($ in millions, except per share data) 4Q 14 4Q 13 Non-GAAP excl. special item* Net revenue 2,416$ 2,126$ 14% 17% Total operating expenses 1,398 1,111 26% 29% Operating income 1,018 1,015 0% 3% Operating margin 42.1% 47.7% (5.6) ppts (5.4) ppts Net income 801$ 684$ 17% 21% Diluted EPS 0.69$ 0.57$ 21% 25% Effective tax rate 20.3% 32.0% FX Adjusted YOY Growth As Reported excl. special item* Note: Figures may not sum due to rounding. *See Appendix of this presentation and our earnings release for GAAP reconciliations of the special item. Page 3

�
�2015 MasterCard. Proprietary 4th Quarter Gross Dollar Volume (GDV) ($ in billions) Notes: 1. Growth rates are shown in local currency 2. Figures may not sum due to rounding $621 $642 $155 $166 $466 $476 $485 $530 $169 $182 $316 $348 $0 $200 $400 $600 $800 $1,000 $1,200 4Q 13 4Q 14 4Q 13 4Q 14 4Q 13 4Q 14 Credit Debit $1,105 $1,172 $324 $348 $782 $824 4 Worldwide 13% Growth United States 8% Growth Rest of World 15% Growth Page

�
�2015 MasterCard. Proprietary 4th Quarter Processed Transactions and Cards Cards 9% Growth Note: Figures may not sum due to rounding 1,265 1,437 705 703 0 500 1,000 1,500 2,000 4Q 13 4Q 14 C ar ds (i n m ill io ns ) MasterCard Cards Maestro Cards 1,970 10,372 11,562 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 4Q 13 4Q 14 Tr an sa ct io ns (i n m ill io ns ) Processed Transactions 11% Growth 5 2,140 Page

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�2015 MasterCard. Proprietary $972 $730 $949 $400 ($925) $2,126 $1,018 $774 $1,063 $495 ($934) $2,416 -$1,500 -$1,000 -$500 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Domestic Assessments Cross-Border Volume Fees Transaction Processing Fees Other Revenues Rebates and Incentives Total Net Revenue 4Q 13 4Q 14 Note: Figures may not sum due to rounding 4th Quarter Revenue ($ in millions) 5% 6% 12% 24% 1% 14% As-reported 17% 3% 28% 15% 8% FX-adjusted 7% Page 6

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�2015 MasterCard. Proprietary $719 $321 $71 $1,111 $977 $337 $84 $1,398 $0 $400 $800 $1,200 $1,600 General & Administrative Advertising & Marketing Depreciation & Amortization Total Operating Expenses* 4Q 13 4Q 14 4th Quarter Operating Expenses ($ in millions) 36% 5% 19% 26%* As-reported 29%* FX-adjusted 38% 9% 19% Note: Figures may not sum due to rounding *See Appendix of this presentation and our earnings release for GAAP reconciliations of the special item. Page 7

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�2015 MasterCard. Proprietary Looking Ahead Business update through January 21 Thoughts for 2015 Long-Term Performance Objectives " Discussion on FX " Revenue " Expenses " Tax Rate Page 8

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�2015 MasterCard. Proprietary

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�2015 MasterCard. Proprietary Appendix A Impact of Various Items on Financial Results Page 10 Note: Figures may not sum due to rounding 1 Incremental accrual for U.S. merchant litigation of $95M taken in Q4 2013; conforms to GAAP Reconciliation table in earnings release 2 Restructuring charge of $87M taken in Q4 2014 3 Tax benefit of $139M relating to a tax reorganization 4 Impact of acquisitions includes results of businesses acquired in 2014 and consolidation of our majority-owned investment in HomeSend Q4 2014 - Increase / (Decrease) As Reported 2013 MDL Accrual1 Non-GAAP Restructuring2 Tax Reorganization3 Acquisitions4 Excluding All Impacts Net revenue growth 14%  14%   3% 11% Total operating expense growth 16% (10)% 26% 8%  9% 10% Net income growth 29% 11% 17% (9)% 20% (5)% 10% Effective Tax Rate 20.3% 20.3% 0.1% (13.7)% 1.0% 33.0% Diluted Earnings per Share $0.69 $0.69 ($0.05) $0.12 ($0.03) $0.65 Full-Year 2014 - Increase / (Decrease) As Reported 2013 MDL Accrual1 Non-GAAP Restructuring2 Tax Reorganization3 Acquisitions4 Excluding All Impacts Net revenue growth 14%  14%   2% 12% Total operating expense growth 14% (3)% 17% 2%  6% 8% Net income growth 16% 2% 14% (2)% 4% (2)% 13% Effective Tax Rate 28.8% 28.8%  (2.7)% (0.1)% 31.6% Diluted Earnings per Share $3.10 $3.10 ($0.05) $0.12 ($0.04) $3.07

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