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press-release-details

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

01/30/2015
  • 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, N.Y.--(BUSINESS WIRE)-- 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 company’s 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 period’s special item. The primary driver of this quarter’s expense growth was an $87 million restructuring charge taken in this year’s period. The charge is related to actions to better position ourselves for the future, such as realigning some roles within the company’s 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 year’s 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 company’s inaugural debt issuance in March 2014.

MasterCard’s 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 year’s 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 year’s 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 year’s special item, total operating expense increased 14%, both before and after adjusting for currency, from the year-ago period.

Excluding last year’s 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’s 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 company’s 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 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 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 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.

 
 

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

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

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 OPERATING PERFORMANCE

                       
  For the 3 Months ended December 31, 2014  

All MasterCard Credit,

Charge and Debit Programs

 

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.)

 
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  
All MasterCard Credit, GDV Growth Growth

Purchase

Volume

Growth

Purchase

Trans.

Cash

Volume

Growth

Cash

Trans.

Accounts Cards
Charge and Debit Programs   (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)  
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  
All MasterCard Credit, GDV Growth Growth

Purchase

Volume

Growth

Purchase

Trans.

Cash

Volume

Growth

Cash

Trans.

Accounts Cards
Charge and Debit Programs   (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)  
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  
All MasterCard Credit, GDV Growth Growth

Purchase

Volume

Growth

Purchase

Trans.

Cash

Volume

Growth

Cash

Trans.

Accounts Cards
Charge and Debit Programs   (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)  
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
 
 

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.

 
 

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

Source: MasterCard Incorporated

MasterCard Incorporated

Investor Relations:

Barbara Gasper / Matt Lanford, 914-249-4565

investor_relations@mastercard.com

or

Media Relations:

Seth Eisen, 914-249-3153

Seth_Eisen@mastercard.com

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