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Mastercard Incorporated - Page

The following excerpt is from the company's SEC filing.

quarter of 2016. Additionally, this year’s period included the impact of higher investments to support our strategic initiatives.

Operating income for the

quarter of

was flat, or up

on a currency-neutral basis, versus the year-ago period. The company delivered an operating margin of

MasterCard reported other expense of

$11 million

in the

, the same as the

MasterCard’s effective tax rate was

, versus a rate of

in the comparable period in

. The increase was primarily due to the non-recurrence of a discrete U.S. foreig n tax credit benefit which occurred in the

During the

, MasterCard repurchased approximately

15 million

shares of Class A common stock at a cost of almost

$1.4 billion

. Quarter-to-date through

April 21

, the company repurchased an additional

3.0 million

shares at a cost of

$288 million

, with

$2.9 billion

remaining under current repurchase program authorizations.

-Quarter Financial Results Conference Call Details

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

-quarter financial results.

The dial-in information for this call is 866-393-4306 (within the U.S.) and 734-385-2616 (outside the U.S.), and the passcode is 81063498. A replay of the call will be available for 30 days and can be accessed by dialing 855-859-2056 (within the U.S.) and 404-537-3406 (outside the U.S.), and using passcode 81063498.

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 presentation of growth rates on a currency-neutral basis represent a non-GAAP measure and are calculated by remeasuring the prior period’s results using the current period’s exchange rates for both the translational and transactional impacts in our operating results.

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

MasterCard Incorporated - Page

us on Twitter @MasterCardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.

Forward-Looking Statements

This press release contains forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements. When used in this press release, the words “believe”, “expect”, “could”, “may”, “would”, “will”, “trend” and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements that relate to the MasterCard’s future prospects, developments and business strategies. We caution you to not place undue reliance on these forward-looking statements, as they speak only as of the date they are made. 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.

Many factors and uncertainties relating to our operations and business environment, all of which are difficult to predict and many of which are outside of our control, influence whether any forward-looking statements can or will be achieved. Any one of those factors could cause our actual results to differ materially from those expressed or implied in writing in any forward-looking statements made by MasterCard or on its behalf, including, but not limited to, the following factors:

payments system-related legal and regulatory challenges (including interchange fees, surcharging and the extension of current regulatory activity to additional jurisdictions or products);

the impact of preferential or protective government actions;

regulation to which we are subject based on our participation in the payments industry;

regulation of privacy, data protection and security;

the impact of competition in the global payments industry (including disintermediation and pricing pressure);

the challenges relating to rapid technological developments and changes;

the impact of information security failures, breaches or service disruptions on our business;

issues related to our relationships with our customers (including loss of substantial business from significant customers, competitor relationships with our customers and banking industry consolidation);

the impact of our relationships with stakeholders, including issuers and acquirers, merchants and governments;

exposure to loss or illiquidity due to settlement guarantees and other significant third-party obligations;

the impact of global economic and political events and conditions, including global financial market activity, declines in cross-border activity; negative trends in consumer spending and the effect of adverse currency fluctuation;

reputational impact, including impact related to brand perception, account data breaches and fraudulent activity;

issues related to acquisition integration, strategic investments and entry into new businesses; and

potential or incurred liability and limitations on business resulting from litigation.

For additional information on these and other factors that could cause MasterCard’s actual results to differ materially from expected results, please see the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the year ended

December 31, 2015

and any subsequent reports on Forms 10-Q and 8-K.

Contacts:

Investor Relations: Barbara Gasper or Matt Lanford, investor.relations@mastercard.com, 914-249-4565

Media Relations: Seth Eisen, Seth.Eisen@mastercard.com

914-249-3153

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

Three Months Ended March 31,

(in millions, except per share data)

Net Revenue

Operating Expenses

General and administrative

Advertising and marketing

Depreciation and amortization

Total operating expenses

Other Income (Expense)

Investment income

Interest expense

Other income (expense), net

Total other income (expense)

Income before income taxes

Income tax expense

Net Income

Basic Earnings per Share

Basic Weighted-Average Shares Outstanding

Diluted Earnings per Share

Diluted Weighted-Average Shares Outstanding

CONSOLIDATED BALANCE SHEET

March 31, 2016

(in millions, except per share data)

ASSETS

Cash and cash equivalents

Restricted cash for litigation settlement

Investments

Accounts receivable

Settlement due from customers

Restricted security deposits held for customers

Prepaid expenses and other current assets

Total Current Assets

10,606

10,984

Property, plant and equipment, net of accumulated depreciation of $526 and $491, respectively

Deferred income taxes

Goodwill

Other intangible assets, net of accumulated amortization of $871 and $816, respectively

Other assets

Total Assets

15,905

16,250

LIABILITIES AND EQUITY

Accounts payable

Settlement due to customers

Accrued litigation

Accrued expenses

Other current liabilities

Total Current Liabilities

Long-term debt

Deferred income taxes

Other liabilities

Total Liabilities

10,394

10,188

Commitments and Contingencies

Stockholders’ Equity

Class A common stock, $0.0001 par value; authorized 3,000 shares, 1,372 and 1,370 shares issued and 1,082 and 1,095 outstanding, respectively

Class B common stock, $0.0001 par value; authorized 1,200 shares, 20 and 21 issued and outstanding, respectively

Additional paid-in-capital

Class A treasury stock, at cost, 291 and 275 shares, respectively

(14,882

(13,522

Retained earnings

16,972

16,222

Accumulated other comprehensive income (loss)

Total Stockholders’ Equity

Non-controlling interests

Total Equity

Total Liabilities and Equity

CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

Operating Activities

Net income

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

Amortization of customer and merchant incentives

Share-based payments

Changes in operating assets and liabilities:

Income taxes receivable

Accrued litigation and legal settlements

Net change in other assets and liabilities

Net cash provided by operating activities

Investing Activities

Purchases of investment securities available-for-sale

Purchases of other short-term investments held-to-maturity

Proceeds from sales of investment securities available-for-sale

Proceeds from maturities of investment securities available-for-sale

Proceeds from maturities of investment securities held-to-maturity

Acquisition of businesses, net of cash acquired

Purchases of property, plant and equipment

Capitalized software

Other investing activities

Net cash used in investing activities

Financing Activities

Purchases of treasury stock

(1,357

Dividends paid

Tax benefit for share-based payments

Cash proceeds from exercise of stock options

Other financing activities

Net cash used in financing activities

(1,545

(1,100

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Non-Cash Investing and Financing Activities

Fair value of assets acquired, net of cash acquired

Fair value of liabilities assumed related to acquisitions

MASTERCARD INCORPORATED OPERATING PERFORMANCE

For the 3 Months Ended March 31, 2016

GDV (Bil.)

Growth (USD)

Growth (Local)

Purchase Volume (Bil.)

Purchase Trans. (Mil.)

Cash Volume (Bil.)

Cash Trans (Mil.)

Accounts (Mil.)

Cards (Mil.)

All MasterCard Credit, Charge and Debit Programs

Canada

Europe

Latin America

Worldwide less United States

10,046

15,819

MasterCard Credit and Charge Programs

MasterCard Debit Programs

For the 3 months ended March 31, 2015

13,467

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 2015 Q3, several customers purged inactive MasterCard cards and accounts. Data for the comparable periods has been revised to be consistent with this approach.

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

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Mastercard Incorporated's Chief Human Resources Officer just cashed-in 5,784 options - April 19, 2016
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