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Exhibit 99.1

 

 

LOGO

   LOGO

MasterCard Incorporated Reports

Second-Quarter 2014 Financial Results

 

    Second-quarter net income of $931 million, or $0.80 per diluted share

 

    Second-quarter net revenue increase of 13%, to $2.4 billion

 

    Second-quarter gross dollar volume up 13% and purchase volume up 13%

Purchase, NY, July 31, 2014 – MasterCard Incorporated (NYSE: MA) today announced financial results for the second quarter of 2014. The company reported net income of $931 million, up 10%, or 9% adjusted for currency, and earnings per diluted share of $0.80, up 14%, in each case versus the year-ago period. Acquisitions had no impact on earnings per diluted share.

Net revenue for the second quarter of 2014 was $2.4 billion, a 13% increase versus the same period in 2013, both as-reported and adjusted for currency. Net revenue growth was driven by the impact of the following:

 

    A 13% increase in gross dollar volume, on a local currency basis, to $1.1 trillion;

 

    An increase in cross-border volumes of 16%; and

 

    An increase in processed transactions of 12%, to 10.6 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 13% on a local currency basis versus the second quarter of 2013, to $821 billion. As of June 30, 2014, the company’s customers had issued 2 billion MasterCard and Maestro-branded cards.

“We are pleased with another quarter of solid performance, driven by healthy volume and revenue growth,” said Ajay Banga, president and CEO, MasterCard. “We continue to invest in our strategic initiatives, including acquisitions, while strengthening partnerships with banks, merchants, governments and mobile operators to grow and improve our business and theirs.”

Total operating expenses increased 15%, or 14% after adjusting for currency, to $994 million, during the second quarter of 2014 compared to the same period in 2013. Excluding the impact of acquisitions, total operating expenses increased 12%, or 11% after adjusting for currency. The increase was primarily driven by higher investments in people to support strategic initiatives.

Operating income for the second quarter of 2014 increased 13% over the year-ago period and the company delivered an operating margin of 58.2%.

 

-more-


MasterCard Incorporated – Page 2

 

MasterCard reported other expense of $10 million in the second quarter of 2014 versus other income of $5 million in the second quarter of 2013. The change was mainly driven by higher interest expense related to the company’s inaugural debt issuance in late March.

MasterCard’s effective tax rate was 32.2% in the second quarter of 2014, versus a rate of 31.2% in the comparable period in 2013. The increase was primarily due to a less favorable geographic mix of taxable earnings.

During the second quarter of 2014, MasterCard repurchased approximately 15.7 million shares of Class A common stock at a cost of approximately $1.2 billion. Quarter-to-date through July 24, the company repurchased an additional 1.4 million shares at a cost of approximately $106 million, with $728 million remaining under the current repurchase program authorization.

Year-to-Date 2014 Results

For the six months ended June 30, 2014, MasterCard reported net income of $1.8 billion, up 12%, or 11% adjusted for currency, compared to the first half of 2013. Earnings per diluted share was $1.53, up 16%, from the first half of 2013, both including and excluding the impact of acquisitions.

Net revenue for the six months ended June 30, 2014 was $4.6 billion, an increase of 14%, or 13% adjusted for currency, versus the same period in 2013. Gross dollar volume growth of 13%, transaction processing growth of 13% and cross-border volume growth of 16% contributed to the net revenue growth in the year-to-date period. These factors were partially offset by an increase in rebates and incentives.

Total operating expenses increased 13%, both before and after adjusting for currency, to $1.9 billion, for the six months ended June 30, 2014, compared to the same period in 2013. Excluding the impact of acquisitions, total operating expenses increased 11%, or 10% after adjusting for currency. The increase was primarily due to higher personnel costs related to strategic initiatives.

Operating income increased 14% for the first half of 2014 versus the first half of 2013, delivering an operating margin of 58.6%.

MasterCard’s effective tax rate was 32.1% in the six months ended June 30, 2014, versus a rate of 30.9% in the same period in 2013. The increase was primarily due to a less favorable geographic mix of taxable earnings.


MasterCard Incorporated – Page 3

 

Second-Quarter Financial Results Conference Call Details

At 9:00 a.m. ET today, the company will host a conference call to discuss its second-quarter 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 37600138. 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 37600138.

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 presentation of growth rates adjusted for currency represent a non-GAAP measure and are calculated by remeasuring the prior period’s results using the current period’s exchange rates. In addition, the presentation of certain growth rates are adjusted for the impact of the current year acquisitions.

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 investments in strategic initiatives and its business prospects, including partnerships with banks, merchants, governments and mobile operators.


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, 2013, the company’s 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 company’s results to differ materially from expected results.

###

Contacts:

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

Media Relations: Seth Eisen, Seth_Eisen@mastercard.com, 914-249-3153


MasterCard Incorporated – Page 5

 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2014     2013     2014     2013  
     (in millions, except per share data)  

Net Revenue

   $ 2,377      $ 2,096      $ 4,554      $ 4,002   

Operating Expenses

        

General and administrative

     740        621        1,410        1,229   

Advertising and marketing

     173        186        322        315   

Depreciation and amortization

     81        61        154        123   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     994        868        1,886        1,667   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,383        1,228        2,668        2,335   

Other Income (Expense)

        

Investment income

     6        11        13        19   

Interest expense

     (15     (5     (21     (10

Other income (expense), net

     (1     (1     (6     (9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (10     5        (14     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,373        1,233        2,654        2,335   

Income tax expense

     442        385        853        721   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 931      $ 848      $ 1,801      $ 1,614   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Earnings per Share

   $ 0.80      $ 0.70      $ 1.53      $ 1.32   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Weighted-Average Shares Outstanding

     1,165        1,214        1,175        1,220   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Earnings per Share

   $ 0.80      $ 0.70      $ 1.53      $ 1.32   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Weighted-Average Shares Outstanding

     1,169        1,217        1,179        1,223   
  

 

 

   

 

 

   

 

 

   

 

 

 


MasterCard Incorporated – Page 6

 

MASTERCARD INCORPORATED

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

     June 30, 2014     December 31, 2013  
     (in millions, except share data)  
ASSETS     

Cash and cash equivalents

   $ 2,878      $ 3,599   

Restricted cash for litigation settlement

     540        723   

Investment securities available-for-sale, at fair value

     2,836        2,696   

Accounts receivable

     1,134        966   

Settlement due from customers

     1,343        1,351   

Restricted security deposits held for customers

     918        911   

Prepaid expenses and other current assets

     641        471   

Deferred income taxes

     287        233   
  

 

 

   

 

 

 

Total Current Assets

     10,577        10,950   

Property, plant and equipment, net of accumulated depreciation of $422 and $394, respectively

     539        526   

Deferred income taxes

     86        70   

Goodwill

     1,527        1,122   

Other intangible assets, net of accumulated amortization of $629 and $534, respectively

     759        672   

Other assets

     887        902   
  

 

 

   

 

 

 

Total Assets

   $ 14,375      $ 14,242   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Accounts payable

   $ 420      $ 338   

Settlement due to customers

     1,335        1,433   

Restricted security deposits held for customers

     918        911   

Accrued litigation

     799        886   

Accrued expenses

     1,903        2,101   

Other current liabilities

     415        363   
  

 

 

   

 

 

 

Total Current Liabilities

     5,790        6,032   

Long-term debt

     1,494          

Deferred income taxes

     125        117   

Other liabilities

     652        598   
  

 

 

   

 

 

 

Total Liabilities

     8,061        6,747   

Commitments and Contingencies

    

Stockholders’ Equity

    

Class A common stock, $0.0001 par value; authorized 3,000,000,000 shares, 1,345,233,452 and 1,341,541,110 shares issued and 1,115,642,807 and 1,148,838,370 outstanding, respectively

     —          —     

Class B common stock, $0.0001 par value; authorized 1,200,000,000 shares, 43,614,765 and 45,350,070 issued and outstanding, respectively

     —          —     

Additional paid-in-capital

     3,811        3,762   

Class A treasury stock, at cost, 229,590,645 and 192,702,740 shares, respectively

     (9,399     (6,577

Retained earnings

     11,666        10,121   

Accumulated other comprehensive income

     188        178   
  

 

 

   

 

 

 

Total Stockholders’ Equity

     6,266        7,484   

Non-controlling interests

     48        11   
  

 

 

   

 

 

 

Total Equity

     6,314        7,495   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 14,375      $ 14,242   
  

 

 

   

 

 

 


MasterCard Incorporated – Page 7

 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

     Six Months Ended
June 30,
 
     2014     2013  
     (in millions)  

Operating Activities

    

Net income

   $ 1,801      $ 1,614   

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

    

Depreciation and amortization

     154        123   

Share-based payments

     (46     (1

Deferred income taxes

     (77     (32

Other

     22        29   

Changes in operating assets and liabilities:

    

Accounts receivable

     (121     (36

Income taxes receivable

     —          158   

Settlement due from customers

     1        444   

Prepaid expenses

     (162     (112

Accrued litigation and legal settlements

     (87     —     

Accounts payable

     29        (97

Settlement due to customers

     (90     (451

Accrued expenses

     (209     (87

Net change in other assets and liabilities

     82        62   
  

 

 

   

 

 

 

Net cash provided by operating activities

     1,297        1,614   
  

 

 

   

 

 

 

Investing Activities

    

Purchases of investment securities available-for-sale

     (1,473     (1,311

Acquisition of businesses, net of cash acquired

     (341     —     

Purchases of property, plant and equipment

     (39     (48

Capitalized software

     (63     (55

Proceeds from sales of investment securities available-for-sale

     426        855   

Proceeds from maturities of investment securities available-for-sale

     887        644   

Decrease in restricted cash for litigation settlement

     183        2   

Proceeds from maturities of investment securities held-to-maturity

     —          36   

Other investing activities

     (12     (5
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (432     118   
  

 

 

   

 

 

 

Financing Activities

    

Purchases of treasury stock

     (2,827     (1,347

Proceeds from debt

     1,487        —     

Dividends paid

     (260     (110

Tax benefit for share-based compensation

     42        20   

Cash proceeds from exercise of stock options

     16        16   

Other financing activities

     (43     —     
  

 

 

   

 

 

 

Net cash used in financing activities

     (1,585     (1,421
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (1     (15
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (721     296   

Cash and cash equivalents - beginning of period

     3,599        2,052   
  

 

 

   

 

 

 

Cash and cash equivalents - end of period

   $ 2,878      $ 2,348   
  

 

 

   

 

 

 

Non-Cash Investing and Financing Activities

    

Fair value of assets acquired, net of cash acquired

   $ 572      $ —     
  

 

 

   

 

 

 

Fair value of liabilities assumed related to acquisitions

   $ 128      $ —     
  

 

 

   

 

 

 


MasterCard Incorporated – Page 8

 

MASTERCARD INCORPORATED OPERATING PERFORMANCE

 

 

     For the 3 Months ended June 30, 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

   $ 320         14.5     17.8   $ 214         17.6     2,419       $ 106         18.1     916         421         453   

Canada

     33         -0.9     5.4     31         7.2     382         2         -14.4     6         40         49   

Europe

     344         14.0     13.0     233         10.2     3,578         111         19.4     667         328         345   

Latin America

     88         4.5     13.2     54         20.7     1,240         34         2.9     204         129         148   
  

 

 

        

 

 

    

 

 

   

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     785         12.3     14.6     532         13.9     7,619         253         16.0     1,793         918         995   

United States

     339         9.2     9.2     289         10.1     5,135         50         4.1     325         308         344   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,124         11.4     12.9     821         12.5     12,754         302         13.9     2,118         1,226         1,339   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     461         9.4     11.3     412         12.8     4,992         49         0.5     211         500         565   

United States

     161         9.8     9.8     155         10.3     1,713         6         -0.8     7         146         178   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     623         9.5     10.9     567         12.1     6,705         56         0.4     217         645         742   

MasterCard Debit Programs

                            

Worldwide less United States

     324         16.8     19.5     120         17.9     2,627         204         20.5     1,582         419         430   

United States

     177         8.5     8.5     134         9.8     3,422         43         4.9     318         162         166   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     501         13.7     15.4     254         13.5     6,049         247         17.4     1,900         581         596   
     For the 6 Months ended June 30, 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

   $ 622         13.5     18.3   $ 416         18.0     4,619       $ 206         18.9     1,787         421         453   

Canada

     62         -1.4     6.3     58         8.1     718         5         -12.1     11         40         49   

Europe

     656         13.8     13.8     445         10.5     6,825         210         21.3     1,263         328         345   

Latin America

     171         3.7     14.3     104         21.2     2,434         67         5.1     402         129         148   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     1,511         11.7     15.3     1,023         14.4     14,596         488         17.4     3,464         918         995   

United States

     658         8.9     8.9     557         9.5     9,852         101         5.8     636         308         344   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     2,168         10.8     13.3     1,580         12.6     24,448         589         15.2     4,100         1,226         1,339   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     890         8.6     11.9     793         13.1     9,619         98         2.8     409         500         565   

United States

     306         9.0     9.0     293         9.2     3,223         13         3.6     13         146         178   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,196         8.7     11.1     1,086         12.1     12,842         111         2.9     422         645         742   

MasterCard Debit Programs

                            

Worldwide less United States

     620         16.5     20.6     230         18.8     4,977         390         21.7     3,055         419         430   

United States

     352         8.8     8.8     264         9.7     6,629         87         6.1     623         162         166   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     972         13.6     16.1     494         13.7     11,606         478         18.6     3,678         581         596   
     For the 3 Months ended June 30, 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

   $ 279         19.2     21.4   $ 185         19.1     1,996       $ 95         26.1     751         366         396   

Canada

     34         6.1     7.5     31         7.9     353         3         3.5     6         37         45   

Europe

     302         14.5     14.1     206         11.5     3,044         95         20.1     564         279         295   

Latin America

     84         17.0     16.7     49         19.6     1,083         35         12.7     197         114         134   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     699         16.2     16.9     472         14.9     6,476         227         21.1     1,518         797         869   

United States

     310         6.5     6.5     263         6.7     4,727         48         5.1     316         283         320   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,009         13.0     13.4     734         11.8     11,203         275         18.0     1,835         1,079         1,189   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     422         12.2     13.7     371         13.9     4,439         51         12.2     210         475         538   

United States

     147         3.3     3.3     141         3.9     1,591         6         -8.6     6         142         176   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     569         9.7     10.8     512         11.0     6,030         57         9.4     217         618         714   

MasterCard Debit Programs

                            

Worldwide less United States

     277         22.9     22.0     101         18.8     2,037         176         23.9     1,308         322         331   

United States

     163         9.5     9.5     122         10.1     3,136         41         7.6     310         140         144   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     441         17.6     17.0     223         13.9     5,173         218         20.4     1,618         462         475   
     For the 6 Months ended June 30, 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

   $ 548         19.8     21.9   $ 363         19.3     3,836       $ 185         27.3     1,456         366         396   

Canada

     63         4.5     5.6     58         6.0     657         6         1.6     12         37         45   

Europe

     576         14.0     13.6     398         10.9     5,772         179         20.0     1,057         279         295   

Latin America

     165         13.9     15.8     97         18.9     2,102         68         11.7     383         114         134   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     1,352         15.7     16.6     915         14.6     12,367         437         21.3     2,907         797         869   

United States

     604         5.1     5.1     509         5.6     9,087         95         2.1     618         283         320   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,956         12.2     12.8     1,424         11.2     21,455         532         17.3     3,525         1,079         1,189   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     820         11.7     13.3     721         13.5     8,523         99         11.6     403         475         538   

United States

     281         2.4     2.4     268         3.2     3,029         13         -11.2     12         142         176   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,101         9.2     10.3     989         10.5     11,552         111         8.4     415         618         714   

MasterCard Debit Programs

                            

Worldwide less United States

     533         22.5     22.2     194         18.5     3,845         339         24.4     2,504         322         331   

United States

     323         7.4     7.4     241         8.5     6,058         82         4.5     605         140         144   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     856         16.4     16.2     435         12.7     9,903         421         19.9     3,110         462         475   

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 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 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.

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