Attached files

file filename
8-K - 8-K - Mastercard Incd811638d8k.htm
EX-99.2 - EX-99.2 - Mastercard Incd811638dex992.htm

Exhibit 99.1

 

 

LOGO

   LOGO

MasterCard Incorporated Reports

Third-Quarter 2014 Financial Results

 

    Third-quarter net income of $1 billion, or $0.87 per diluted share

 

    Third-quarter net revenue increase of 13%, to $2.5 billion

 

    Third-quarter gross dollar volume up 12% and purchase volume up 11%

Purchase, NY, October 30, 2014 – MasterCard Incorporated (NYSE: MA) today announced financial results for the third quarter of 2014. The company reported net income of $1 billion, up 15%, and earnings per diluted share of $0.87, up 19%. In each case, growth rates are reflective of both as-reported and adjusted for currency, and are versus the year-ago period. Acquisitions had a $0.02 dilutive impact on earnings per diluted share.

Net revenue for the third quarter of 2014 was $2.5 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 12% increase in gross dollar volume, on a local currency basis, to $1.2 trillion;

 

    An increase in cross-border volume of 15%; and

 

    An increase in processed transactions of 10%, to 11 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 11% on a local currency basis versus the third quarter of 2013, to $843 billion. As of September 30, 2014, the company’s customers had issued 2.1 billion MasterCard and Maestro-branded cards.

“We delivered strong results for the quarter, reporting double-digit revenue and net income growth, despite a mixed economic environment,” said Ajay Banga, president and CEO, MasterCard. “We also continue to invest and partner to make payments safer, easier and faster. Within the past two months alone, we opened our new technology hub in New York City, delivered our technology and security protocols as part of the launch of Apple Pay and partnered with the Transport for London to deliver contactless payments system-wide. Through our commitment to innovation, we are making it safer and simpler for people to pay and get paid – today and in the future.”

 

-more-


MasterCard Incorporated – Page 2

 

Total operating expenses increased 12%, both as-reported and adjusted for currency, to $1.1 billion, during the third quarter of 2014 compared to the same period in 2013. The increase was primarily driven by investments in strategic initiatives including acquisitions, which contributed 9 percentage points to the growth.

Operating income for the third quarter of 2014 increased 14% over the year-ago period, or 13% adjusted for currency, and the company delivered an operating margin of 56.7%.

MasterCard reported other expense of $2 million in the third quarter of 2014 versus other income of $6 million in the third 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 28.5% in the third quarter of 2014 versus a rate of 29.9% in the comparable period in 2013. The decrease was primarily due to the impact of higher discrete tax benefits recognized in this year’s quarter.

During the third quarter of 2014, MasterCard repurchased approximately 5.3 million shares of Class A common stock at a cost of $404 million. Quarter-to-date through October 23, the company repurchased an additional 1.7 million shares at a cost of $121 million, with $310 million remaining under the current repurchase program authorization.

Year-to-Date 2014 Results

For the nine months ended September 30, 2014, MasterCard reported net income of $2.8 billion, up 13%, both as-reported and adjusted for currency, versus the year-ago period. Earnings per diluted share was $2.40, up 17%. Acquisitions had a $0.02 dilutive impact on earnings per diluted share.

Net revenue for the nine months ended September 30, 2014 was $7.1 billion, an increase of 13% versus the same period in 2013, both as-reported and adjusted for currency. Gross dollar volume growth of 13%, transaction processing growth of 12% 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. Acquisitions contributed 1 percentage point to total net revenue growth.

Total operating expenses increased 13%, or 12% after adjusting for currency, to $3 billion, for the nine months ended September 30, 2014, compared to the same period in 2013. The increase was primarily due to higher personnel costs related to strategic initiatives. Acquisitions contributed 5 percentage points to total operating expense growth.

Operating income increased 14% for the nine months of 2014 versus the same period in 2013, resulting in an operating margin of 57.9%.

MasterCard’s effective tax rate was 30.9% in the nine months ended September 30, 2014 versus a rate of 30.5% in the same period in 2013. The increase was primarily due to a less favorable geographic mix of taxable earnings, partially offset by the impact of higher discrete benefits.


MasterCard Incorporated – Page 3

 

Third-Quarter Financial Results Conference Call Details

At 9:00 a.m. ET today, the company will host a conference call to discuss its third-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 38167441. 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 38167441.

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.

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 ability to simplify payments through innovation.


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
September 30,
    Nine Months Ended
September 30,
 
     2014     2013     2014     2013  
     (in millions, except per share data)  

Net Revenue

   $ 2,503      $ 2,218      $ 7,057      $ 6,220   

Operating Expenses

        

General and administrative

     797        701        2,207        1,930   

Advertising and marketing

     203        205        525        520   

Depreciation and amortization

     83        64        237        187   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     1,083        970        2,969        2,637   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,420        1,248        4,088        3,583   

Other Income (Expense)

        

Investment income

     8        11        21        30   

Interest expense

     (11     3        (32     (7

Other income (expense), net

     1        (8     (5     (17
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (2     6        (16     6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,418        1,254        4,072        3,589   

Income tax expense

     403        375        1,256        1,096   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 1,015      $ 879      $ 2,816      $ 2,493   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Earnings per Share

   $ 0.88      $ 0.73      $ 2.41      $ 2.05   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Weighted-Average Shares Outstanding

     1,157        1,205        1,169        1,215   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Earnings per Share

   $ 0.87      $ 0.73      $ 2.40      $ 2.05   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Weighted-Average Shares Outstanding

     1,160        1,209        1,172        1,219   
  

 

 

   

 

 

   

 

 

   

 

 

 


MasterCard Incorporated – Page 6

 

MASTERCARD INCORPORATED

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

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

Cash and cash equivalents

   $ 4,462      $ 3,599   

Restricted cash for litigation settlement

     540        723   

Investment securities available-for-sale, at fair value

     1,857        2,696   

Accounts receivable

     1,071        966   

Settlement due from customers

     1,188        1,351   

Restricted security deposits held for customers

     953        911   

Prepaid expenses and other current assets

     602        471   

Deferred income taxes

     283        233   
  

 

 

   

 

 

 

Total Current Assets

     10,956        10,950   

Property, plant and equipment, net of accumulated depreciation of $433 and $394, respectively

     553        526   

Deferred income taxes

     102        70   

Goodwill

     1,456        1,122   

Other intangible assets, net of accumulated amortization of $651 and $534, respectively

     705        672   

Other assets

     887        902   
  

 

 

   

 

 

 

Total Assets

   $ 14,659      $ 14,242   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Accounts payable

   $ 319      $ 338   

Settlement due to customers

     1,226        1,433   

Restricted security deposits held for customers

     953        911   

Accrued litigation

     789        886   

Accrued expenses

     2,098        2,101   

Other current liabilities

     464        363   
  

 

 

   

 

 

 

Total Current Liabilities

     5,849        6,032   

Long-term debt

     1,494          

Deferred income taxes

     119        117   

Other liabilities

     649        598   
  

 

 

   

 

 

 

Total Liabilities

     8,111        6,747   

Commitments and Contingencies

    

Stockholders’ Equity

    

Class A common stock, $0.0001 par value; authorized 3,000,000,000 shares, 1,349,345,980 and 1,341,541,110 shares issued and 1,114,440,917 and 1,148,838,370 outstanding, respectively

     —          —     

Class B common stock, $0.0001 par value; authorized 1,200,000,000 shares, 40,060,155 and 45,350,070 issued and outstanding, respectively

     —          —     

Additional paid-in-capital

     3,843        3,762   

Class A treasury stock, at cost, 234,905,063 and 192,702,740 shares, respectively

     (9,803     (6,577

Retained earnings

     12,553        10,121   

Accumulated other comprehensive income (loss)

     (92     178   
  

 

 

   

 

 

 

Total Stockholders’ Equity

     6,501        7,484   

Non-controlling interests

     47        11   
  

 

 

   

 

 

 

Total Equity

     6,548        7,495   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 14,659      $ 14,242   
  

 

 

   

 

 

 


MasterCard Incorporated – Page 7

 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

     Nine Months Ended
September 30,
 
     2014     2013  
     (in millions)  

Operating Activities

    

Net income

   $ 2,816      $ 2,493   

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

    

Depreciation and amortization

     237        187   

Share-based payments

     (43     27   

Deferred income taxes

     (80     (34

Other

     24        48   

Changes in operating assets and liabilities:

    

Accounts receivable

     (96     (67

Income taxes receivable

     (12     158   

Settlement due from customers

     86        (192

Prepaid expenses

     (156     (44

Accrued litigation and legal settlements

     (97     —     

Accounts payable

     (39     (76

Settlement due to customers

     (124     126   

Accrued expenses

     60        209   

Net change in other assets and liabilities

     106        101   
  

 

 

   

 

 

 

Net cash provided by operating activities

     2,682        2,936   
  

 

 

   

 

 

 

Investing Activities

    

Purchases of investment securities available-for-sale

     (1,977     (1,936

Acquisition of businesses, net of cash acquired

     (336     —     

Purchases of property, plant and equipment

     (97     (65

Capitalized software

     (75     (88

Proceeds from sales of investment securities available-for-sale

     1,444        1,349   

Proceeds from maturities of investment securities available-for-sale

     1,322        959   

Decrease (increase) in restricted cash for litigation settlement

     184        (1

Proceeds from maturities of investment securities held-to-maturity

     —          36   

Other investing activities

     (17     (19
  

 

 

   

 

 

 

Net cash provided by investing activities

     448        235   
  

 

 

   

 

 

 

Financing Activities

    

Purchases of treasury stock

     (3,231     (1,692

Proceeds from debt

     1,487        —     

Dividends paid

     (388     (182

Tax benefit for share-based payments

     53        23   

Cash proceeds from exercise of stock options

     23        22   

Other financing activities

     (39     (8
  

 

 

   

 

 

 

Net cash used in financing activities

     (2,095     (1,837
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (172     27   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     863        1,361   

Cash and cash equivalents - beginning of period

     3,599        2,052   
  

 

 

   

 

 

 

Cash and cash equivalents - end of period

   $ 4,462      $ 3,413   
  

 

 

   

 

 

 

Non-Cash Investing and Financing Activities

    

Fair value of assets acquired, net of cash acquired

   $ 574      $ —     
  

 

 

   

 

 

 

Fair value of liabilities assumed related to acquisitions

   $ 134      $ —     
  

 

 

   

 

 

 


MasterCard Incorporated – Page 8

 

MASTERCARD INCORPORATED OPERATING PERFORMANCE

 

     For the 3 Months ended September 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

   $ 340         16.2     16.4   $ 228         15.7     2,576       $ 112         17.9     980         435         466   

Canada

     34         0.4     5.2     32         6.5     393         2         -11.2     6         41         50   

Europe

     353         9.8     12.1     238         9.4     3,762         115         18.4     680         343         360   

Latin America

     91         9.4     14.5     57         20.0     1,293         34         6.5     206         133         152   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     818         11.9     13.8     554         12.8     8,025         264         16.1     1,873         951         1,028   

United States

     339         7.5     7.5     288         8.2     5,157         50         3.7     334         314         349   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,157         10.6     11.9     843         11.1     13,182         314         14.0     2,207         1,265         1,377   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     477         8.7     10.1     427         11.4     5,175         50         0.0     205         504         569   

United States

     161         6.6     6.6     155         7.4     1,723         6         -10.4     8         147         177   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     638         8.2     9.2     582         10.3     6,898         56         -1.3     213         652         746   

MasterCard Debit Programs

                            

Worldwide less United States

     341         16.7     19.5     127         17.7     2,850         214         20.7     1,668         447         459   

United States

     178         8.3     8.3     133         9.1     3,435         44         6.1     326         166         172   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     519         13.7     15.4     260         13.1     6,285         258         17.9     1,994         613         631   
     For the 9 Months ended September 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

   $ 963         14.5     17.8   $ 644         17.2     7,195       $ 319         18.9     2,778         435         466   

Canada

     96         -0.9     5.7     89         7.3     1,110         7         -11.8     17         41         50   

Europe

     1,009         12.3     13.2     683         10.1     10,585         326         20.3     1,944         343         360   

Latin America

     262         5.7     14.4     160         20.8     3,728         102         5.7     609         133         152   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     2,330         11.8     14.8     1,577         13.8     22,618         753         17.2     5,348         951         1,028   

United States

     996         8.3     8.3     845         9.0     15,014         150         4.7     971         314         349   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     3,326         10.8     12.8     2,422         12.1     37,632         904         14.9     6,320         1,265         1,377   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     1,366         8.5     11.2     1,219         12.4     14,782         147         1.9     614         504         569   

United States

     467         8.1     8.1     448         8.6     4,946         19         -1.4     21         147         177   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,833         8.4     10.4     1,667         11.3     19,728         167         1.5     635         652         746   

MasterCard Debit Programs

                            

Worldwide less United States

     964         16.8     20.5     358         18.7     7,835         606         21.6     4,734         447         459   

United States

     529         8.5     8.5     398         9.5     10,069         131         5.6     951         166         172   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,493         13.7     16.0     756         13.7     17,904         737         18.4     5,685         613         631   
     For the 3 Months ended September 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

   $ 292         16.4     22.3   $ 197         21.1     2,138       $ 96         25.0     807         378         408   

Canada

     34         4.3     8.9     31         9.6     370         3         1.1     6         38         46   

Europe

     322         18.8     16.6     218         13.7     3,243         103         23.4     596         293         309   

Latin America

     83         11.0     16.7     50         23.9     1,151         33         7.3     196         117         137   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     731         16.2     18.5     496         17.2     6,901         235         21.2     1,605         827         900   

United States

     315         8.6     8.6     267         9.1     4,833         49         6.2     322         288         322   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,046         13.8     15.3     763         14.2     11,735         284         18.3     1,927         1,115         1,222   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     439         12.3     15.3     387         15.9     4,680         52         11.4     214         482         545   

United States

     151         6.9     6.9     144         7.4     1,645         7         -1.9     7         142         172   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     590         10.9     13.0     531         13.4     6,325         59         9.6     221         624         718   

MasterCard Debit Programs

                            

Worldwide less United States

     292         22.5     23.5     109         22.3     2,221         183         24.2     1,391         345         354   

United States

     164         10.3     10.3     122         11.2     3,188         42         7.7     315         146         150   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     456         17.8     18.4     231         16.2     5,409         225         20.8     1,706         491         504   
     For the 9 Months ended September 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

   $ 841         18.6     22.1   $ 559         19.9     5,974       $ 282         26.6     2,265         378         408   

Canada

     97         4.5     6.7     89         7.2     1,026         8         1.5     18         38         46   

Europe

     898         15.6     14.6     616         11.9     9,015         282         21.2     1,653         293         309   

Latin America

     248         12.9     16.1     147         20.6     3,253         101         10.2     579         117         137   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide less United States

     2,084         15.9     17.3     1,411         15.5     19,268         673         21.3     4,515         827         900   

United States

     919         6.3     6.3     775         6.8     13,921         144         3.5     939         288         322   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     3,003         12.8     13.7     2,187         12.2     33,189         816         17.7     5,455         1,115         1,222   

MasterCard Credit and Charge Programs

                            

Worldwide less United States

     1,259         11.9     14.0     1,109         14.3     13,203         150         11.6     617         482         545   

United States

     432         4.0     4.0     412         4.6     4,675         20         -8.1     19         142         172   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,691         9.8     11.3     1,521         11.5     17,878         170         8.9     636         624         718   

MasterCard Debit Programs

                            

Worldwide less United States

     825         22.6     22.7     303         19.8     6,065         522         24.4     3,899         345         354   

United States

     487         8.4     8.4     363         9.4     9,246         124         5.6     920         146         150   
  

 

 

        

 

 

      

 

 

    

 

 

      

 

 

    

 

 

    

 

 

 

Worldwide

     1,312         16.9     16.9     666         13.9     15,311         646         20.3     4,819         491         504   

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.

###