- Second-quarter net income of $983
million, including a special item, or $0.89 per diluted
share
- Second-quarter net income of $1.1
billion, excluding a special item, or $0.96 per diluted
share
- Second-quarter net revenue increase
of 13%, to $2.7 billion
- Second-quarter gross dollar volume
up 11% and purchase volume up 9%
MasterCard Incorporated (NYSE:MA) today announced financial
results for the second quarter of 2016. The company reported net
income of $983 million, an increase of 7% or 8% on a
currency-neutral basis, and earnings per diluted share of $0.89, up
10% or 11% on a currency-neutral basis versus the year-ago period.
Excluding special items related to separate U.K. merchant
litigations taken in both this quarter and the previous year’s
quarter, the company reported net income of $1.1 billion, an
increase of 10% or 11% on a currency-neutral basis, and earnings
per diluted share of $0.96, up 13% or 14% on a currency-neutral
basis versus the year-ago period.
Net revenue for the second quarter of 2016 was $2.7 billion, a
13% increase versus the same period in 2015. On a currency-neutral
basis, net revenue increased 14%. Net revenue growth was driven by
the impact of the following:
- An increase in processed transactions
of 14%, to 13.7 billion;
- An 11% increase in gross dollar volume,
on a local currency basis, to $1.2 trillion; and
- An increase in cross-border volumes of
10%.
These factors were partially offset by an increase in rebates
and incentives, primarily due to increased volumes and new and
renewed agreements.
Worldwide purchase volume during the quarter was up 9% on a
local currency basis versus the second quarter of 2015, to $897
billion. As of June 30, 2016, the company’s customers had
issued 2.3 billion MasterCard and Maestro-branded cards.
“We carried solid momentum into the second quarter, delivering
14 percent revenue growth for the first half of the year, after
adjusting for currency,” said Ajay Banga, president and CEO,
MasterCard. “With last week’s VocaLink announcement, we will expand
our capabilities beyond core card-based solutions into a broader
set of transactions and payments. The collective technology and
experience will provide consumers, businesses and governments more
choice and value in how they pay and are paid.”
Total operating expenses increased 15%, or 17% on a
currency-neutral basis, to $1.3 billion during the second quarter
of 2016 compared to the same period in 2015. Excluding special
items, total operating expenses were $1.2 billion, an increase of
12%, or 13% on a currency-neutral basis, compared to the year-ago
period. The increase was primarily due to continued investments in
strategic initiatives, as well as higher legal costs.
Operating income for the second quarter of 2016 increased 10%,
or 11% on a currency-neutral basis, versus the year-ago period.
Excluding special items, operating income increased 13%, or 15% on
a currency-neutral basis, versus the year-ago period. The company
delivered an operating margin of 51.2% or 55.2% excluding special
items.
MasterCard reported other expense of $15 million in the second
quarter of 2016, versus $10 million in the second quarter of 2015.
The change was mainly driven by higher interest expense related to
the company’s Euro bond debt issuance in November 2015.
MasterCard’s effective tax rate was 28.0% in the second quarter
of 2016, versus a rate of 25.7% in the comparable period in 2015.
Excluding special items, the effective tax rate was 27.9% in the
second quarter of 2016, versus a rate of 25.8% in the comparable
period in 2015. The increase was primarily due to the recognition
of a discrete U.S. foreign tax credit benefit which occurred in the
second quarter of 2015, as well as a larger 2015 repatriation
benefit.
During the second quarter of 2016, MasterCard repurchased
approximately 5 million shares of Class A common stock at a
cost of $462 million. Quarter-to-date through July 21, the
company did not repurchase any additional shares, which leaves $2.7
billion remaining under the current repurchase program
authorization.
Year-to-Date 2016 Results
For the six months ended June 30, 2016, MasterCard reported net
income of $1.9 billion, essentially flat, or an increase of 2% on a
currency-neutral basis, and earnings per diluted share of $1.75, up
4% or 6% on a currency-neutral basis versus the year-ago period.
Excluding special items, net income was $2.0 billion, up 2% or 4%
on a currency-neutral basis, and earnings per diluted share was
$1.82, up 5%, or 8% on a currency-neutral basis, compared to the
same period in 2015.
Net revenue for the first half of 2016 was $5.1 billion, an
increase of 11%, or 14% on a currency-neutral basis, versus the
same period in 2015. Transaction processing growth of 14%, gross
dollar volume growth of 12% and cross-border volume growth of 11%
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 were $2.4 billion, an increase of 20%,
or 22% on a currency-neutral basis for the first half of 2016,
compared to the same period in 2015. Excluding special items, total
operating expenses were $2.3 billion, an increase of 18%, or 20% on
a currency-neutral basis, compared to the same period in 2015. The
increase was primarily due to continued investments to support
strategic initiatives, as well as higher legal costs. In addition,
the impact from foreign currency hedging activity and balance sheet
remeasurement had a negative impact of approximately 6 percentage
points on operating expense growth, compared to the same period in
2015.
Operating income for the six months ended June 30, 2016 was $2.7
billion, an increase of 5%, or 8% on a currency-neutral basis,
versus the same period in 2015. Excluding special items, operating
income was $2.8 billion, an increase of 6%, or 9% on a
currency-neutral basis, compared to the same period in 2015. The
company delivered an operating margin of 53.1% or 55.2% excluding
special items.
MasterCard’s effective tax rate was 28.1% for six months ended
June 30, 2016, versus a rate of 24.8% in the same period in 2015.
Excluding special items, the effective tax rate was 28.1% in the
first half of 2016, versus a rate of 24.9% in the comparable period
in 2015. The increase was primarily due to the recognition of a
discrete U.S. foreign tax credit benefit which occurred in 2015, as
well as a larger 2015 repatriation benefit.
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 877-201-0168 (within
the U.S.) and 647-788-4901 (outside the U.S.), and the passcode is
40840885. 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 40840885.
This call can also be accessed through the Investor Relations
section of the company’s website at www.mastercard.com/investor.
Presentation slides used on this call are also available on the
website.
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 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 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 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.
MASTERCARD INCORPORATED
CONSOLIDATED STATEMENT OF
OPERATIONS
(UNAUDITED)
Three Months Ended June
30, Six Months Ended June 30, 2016
2015 2016 2015
(in millions, except per share data) Net Revenue $
2,694 $ 2,390 $ 5,140 $ 4,620
Operating Expenses General and
administrative 930 810 1,798 1,460 Advertising and marketing 184
176 319 318 Depreciation and amortization 93 92 188 179 Provision
for litigation settlements 107 61 107 61
Total operating expenses 1,314 1,139 2,412
2,018 Operating income 1,380 1,251 2,728 2,602
Other Income (Expense) Investment income 10 6 20 15 Interest
expense (22 ) (17 ) (42 ) (34 ) Other income (expense), net (3 ) 1
(4 ) (2 ) Total other income (expense) (15 ) (10 ) (26 ) (21
) Income before income taxes 1,365 1,241 2,702 2,581 Income tax
expense 382 320 760 640
Net
Income $ 983 $ 921 $ 1,942 $ 1,941
Basic Earnings per Share $ 0.89 $ 0.81
$ 1.76 $ 1.70 Basic Weighted-Average Shares
Outstanding 1,098 1,138 1,104 1,143
Diluted Earnings per Share $ 0.89 $ 0.81 $
1.75 $ 1.69 Diluted Weighted-Average Shares
Outstanding 1,101 1,141 1,107 1,146
MASTERCARD INCORPORATED
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30, 2016
December 31,
2015
(in millions, except per share data) ASSETS Cash and
cash equivalents $ 5,176 $ 5,747 Restricted cash for litigation
settlement 542 541 Investments 1,271 991 Accounts receivable 1,203
1,079 Settlement due from customers 1,005 1,068 Restricted security
deposits held for customers 936 895 Prepaid expenses and other
current assets 865 663
Total Current Assets
10,998 10,984 Property, plant and equipment, net of accumulated
depreciation of $561 and $491, respectively 680 675 Deferred income
taxes 337 317 Goodwill 1,834 1,891 Other intangible assets, net of
accumulated amortization of $910 and $816, respectively 762 803
Other assets 1,671 1,580
Total Assets $ 16,282
$ 16,250
LIABILITIES AND EQUITY Accounts
payable $ 452 $ 472 Settlement due to customers 828 866 Restricted
security deposits held for customers 936 895 Accrued litigation 810
709 Accrued expenses 2,753 2,763 Other current liabilities 683
564
Total Current Liabilities 6,462 6,269
Long-term debt 3,306 3,268 Deferred income taxes 83 79 Other
liabilities 562 572
Total Liabilities 10,413
10,188
Commitments and Contingencies Stockholders’
Equity
Class A common stock, $0.0001 par value;
authorized 3,000 shares, 1,373 and 1,370 shares issued and
1,077 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 4,072 4,004 Class A treasury stock,
at cost, 295 and 275 shares, respectively (15,284 ) (13,522 )
Retained earnings 17,746 16,222 Accumulated other comprehensive
income (loss) (697 ) (676 )
Total Stockholders’ Equity 5,837
6,028 Non-controlling interests 32 34
Total
Equity 5,869 6,062
Total Liabilities and
Equity $ 16,282 $ 16,250
MASTERCARD INCORPORATED
CONSOLIDATED STATEMENT OF CASH
FLOWS
(UNAUDITED)
Six Months Ended June 30,
2016 2015 (in millions)
Operating Activities Net income $ 1,942 $ 1,941 Adjustments
to reconcile net income to net cash provided by operating
activities: Amortization of customer and merchant incentives 396
358 Depreciation and amortization 188 179 Share-based payments (11
) (23 ) Deferred income taxes (8 ) 1 Other (28 ) (23 )
Changes
in operating assets and liabilities: Accounts receivable (100 )
(51 ) Income taxes receivable — (63 ) Settlement due from customers
75 (290 ) Prepaid expenses (522 ) (522 ) Accrued litigation and
legal settlements 107 (49 ) Accounts payable (18 ) 37 Settlement
due to customers (50 ) 261 Accrued expenses — (120 ) Net change in
other assets and liabilities 96 96 Net cash provided
by operating activities 2,067 1,732
Investing
Activities Purchases of investment securities
available-for-sale (561 ) (789 ) Purchases of investments
held-to-maturity (139 ) (744 ) Proceeds from sales of investment
securities available-for-sale 107 716 Proceeds from maturities of
investment securities available-for-sale 162 322 Proceeds from
maturities of investments held-to-maturity 130 — Acquisition of
businesses, net of cash acquired — (584 ) Purchases of property,
plant and equipment (101 ) (56 ) Capitalized software (80 ) (87 )
Increase in restricted cash for litigation settlement (2 ) (1 )
Other investing activities (11 ) 1 Net cash used in
investing activities (495 ) (1,222 )
Financing Activities
Purchases of treasury stock (1,819 ) (1,795 ) Dividends paid (421 )
(367 ) Tax benefit for share-based payments 33 34 Cash proceeds
from exercise of stock options 16 21 Other financing activities (3
) (9 ) Net cash used in financing activities (2,194 ) (2,116 )
Effect of exchange rate changes on cash and cash equivalents 51
(170 ) Net decrease in cash and cash equivalents (571 )
(1,776 ) Cash and cash equivalents - beginning of period 5,747
5,137 Cash and cash equivalents - end of period $
5,176 $ 3,361
Non-Cash Investing and
Financing Activities Fair value of assets acquired, net of cash
acquired $ — $ 625 Fair value of liabilities assumed
related to acquisitions $ — $ 41
MASTERCARD INCORPORATED OPERATING
PERFORMANCE
For the 3 Months ended June
30, 2016 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 $ 371 7.9 % 12.8 % $ 247 11.0 % 3,565 $ 124
16.7 % 1,259 547 584 Canada 36 5.8 % 10.9 % 34 10.7 % 511 2 13.8 %
6 43 49 Europe 351 9.7 % 13.7 % 234 8.8 % 5,158 117 25.0 % 888 412
427 Latin America
79 -1.6 % 14.7 %
47 14.8 %
1,558 32
14.6 %
248 149 167 Worldwide
less United States 837 7.6 % 13.3 % 562 10.3 % 10,792 275 19.8 %
2,401 1,151 1,227 United States
391 7.5 % 7.5 %
335 8.0 %
6,169
56 4.8 %
351 349
384 Worldwide 1,228 7.6 % 11.4 % 897 9.4 % 16,961 331
17.0 % 2,752 1,500 1,611
MasterCard Credit and Charge
Programs Worldwide less United States 458 2.7 % 7.9 % 419 8.4 %
6,213 39 2.5 % 189 526 583 United States
184
6.9 % 6.9 %
177 6.9 %
2,018
8 5.8 %
9 164
195 Worldwide 642 3.9 % 7.6 % 596 8.0 % 8,231 46 3.0 %
198 690 778
MasterCard Debit Programs Worldwide less
United States 379 14.2 % 20.5 % 143 16.3 % 4,579 236 23.2 % 2,213
625 644 United States
207 8.1 % 8.1 %
159 9.2 %
4,152 49
4.7 %
342 185 189 Worldwide
586 11.9 % 15.8 % 302 12.4 % 8,730 285 19.6 % 2,554 810 833
For the 6 Months ended June 30, 2016 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 $ 720 6.9 % 12.8 % $ 479 11.3 % 6,831 $ 241
16.0 % 2,468 547 584 Canada 65 2.2 % 9.9 % 62 10.2 % 956 4 4.8 % 11
43 49 Europe 668 10.4 % 15.7 % 451 11.4 % 10,014 217 25.8 % 1,684
412 427 Latin America
152 -5.1 % 14.6 %
89 14.9 %
3,041 63
14.1 %
486 149 167 Worldwide
less United States 1,606 6.8 % 14.1 % 1,082 11.6 % 20,842 524 19.6
% 4,649 1,151 1,227 United States
764 8.6 % 8.6
%
652 9.1 %
11,942
112 6.0 %
689 349
384 Worldwide 2,369 7.4 % 12.3 % 1,733 10.6 % 32,783
636 16.9 % 5,339 1,500 1,611
MasterCard Credit and Charge
Programs Worldwide less United States 879 1.4 % 8.2 % 804 8.8 %
11,988 75 2.3 % 366 526 583 United States
354
9.1 % 9.1 %
339 8.9 %
3,861
15 11.8 %
18 164
195 Worldwide 1,233 3.5 % 8.5 % 1,143 8.9 % 15,849 90
3.7 % 384 690 778
MasterCard Debit Programs Worldwide
less United States 727 14.1 % 22.0 % 278 20.3 % 8,853 449 23.0 %
4,283 625 644 United States
410 8.3 % 8.3 %
313 9.3 %
8,081
97 5.1 %
671 185
189 Worldwide 1,137 11.9 % 16.7 % 590 14.2 % 16,934
546 19.4 % 4,954 810 833
For the 3 Months ended
June 30, 2015 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 $ 344 7.3 % 15.1 % $ 232 15.7 % 2,907 $ 112
14.1 % 1,074 476 509 Canada 34 3.8 % 17.3 % 33 19.2 % 453 2 -8.2 %
6 39 45 Europe 320 -7.1 % 16.4 % 220 14.9 % 4,389 100 19.8 % 756
371 389 Latin America
80 -9.1 % 15.4 %
47 18.3 %
1,386 33
11.6 %
225 139 157 Worldwide
less United States 778 -1.0 % 15.8 % 532 15.8 % 9,135 247 15.7 %
2,061 1,025 1,100 United States
364 7.2 % 7.2 %
310 7.1 %
5,582
54 7.6 %
344 326
360 Worldwide 1,142 1.5 % 12.9 % 842 12.4 % 14,718 300
14.2 % 2,404 1,351 1,460
MasterCard Credit and Charge
Programs Worldwide less United States 446 -3.1 % 11.3 % 406
12.6 % 5,544 40 -0.6 % 189 510 572 United States
172 6.7 % 6.7 %
165 6.4 %
1,836 7 13.4 %
9
155 186 Worldwide 618 -0.5 % 10.0 % 571
10.8 % 7,380 48 1.3 % 198 665 757
MasterCard Debit
Programs Worldwide less United States 332 2.0 % 22.4 % 126 27.2
% 3,591 206 19.6 % 1,871 515 528 United States
192 7.6 % 7.6 %
145 7.9 %
3,746 46 6.8 %
335
171 174 Worldwide 524 4.0 % 16.5 % 271
16.1 % 7,338 252 17.0 % 2,206 686 702
For the 6
Months ended June 30, 2015 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 $ 674 8.1 % 15.1 % $ 452 15.4 % 5,588 $ 222
14.5 % 2,099 476 509 Canada 64 3.1 % 16.3 % 60 18.3 % 846 4 -8.9 %
11 39 45 Europe 605 -7.7 % 15.8 % 420 14.1 % 8,329 185 19.8 % 1,427
371 389 Latin America
160 -6.1 % 15.2 %
95 18.7 %
2,725 65
10.4 %
439 139 157 Worldwide
less United States 1,504 -0.6 % 15.4 % 1,028 15.3 % 17,488 476 15.7
% 3,976 1,025 1,100 United States
703 6.9 % 6.9
%
597 7.1 %
10,698
106 5.7 %
669 326
360 Worldwide 2,206 1.7 % 12.6 % 1,625 12.2 % 28,187
581 13.7 % 4,645 1,351 1,460
MasterCard Credit and Charge
Programs Worldwide less United States 867 -2.4 % 11.1 % 788
12.5 % 10,707 79 -0.9 % 368 510 572 United States
324 6.0 % 6.0 %
311 6.3 %
3,445 13 1.2 %
16
155 186 Worldwide 1,191 -0.2 % 9.7 %
1,099 10.7 % 14,151 93 -0.6 % 384 665 757
MasterCard
Debit Programs Worldwide less United States 637 2.0 % 21.9 %
240 25.7 % 6,781 396 19.7 % 3,607 515 528 United States
379 7.6 % 7.6 %
286 8.0 %
7,254 92 6.3 %
654
171 174 Worldwide 1,015 4.0 % 16.1 % 526
15.4 % 14,035 489 16.9 % 4,261 686 702 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.
Non-GAAP Reconciliations
($ in millions, except per share data)
Three Months Ended June
30,
Percent
Increase/(Decrease)
2016 2015 Actual
Special
Item
Non-
GAAP 1
Actual
Special
Item
Non-
GAAP 1
Actual
Special
Items
Non-
GAAP 1
Total operating expenses $ 1,314 $ (107 ) $ 1,207 $ 1,139 $ (61 ) $
1,078 15 % 3 % 12 % Operating income $ 1,380 $ 107 $ 1,487 $ 1,251
$ 61 $ 1,312 10 % (3 )% 13 % Operating Margin 51.2 % 55.2 % 52.4 %
54.9 % Income tax expense $ 382 $ 29 $ 411 $ 320 $ 17 $ 337 20 % (2
)% 22 % Effective Tax Rate 28.0 % 27.9 % 25.7 % 25.8 % Net Income $
983 $ 78 $ 1,061 $ 921 $ 44 $ 965 7 % (3 )% 10 %
Diluted
Earnings per Share $ 0.89 $ 0.07 $ 0.96 $ 0.81 $ 0.04 $ 0.85 10
% (3 )% 13 %
Six Months Ended June 30,
Percent
Increase/(Decrease)
2016 2015 Actual
Special
Item
Non-
GAAP 1
Actual
Special
Item
Non-
GAAP 1
Actual
Special
Items
Non-
GAAP 1
Total operating expenses $ 2,412 $ (107 ) $ 2,305 $ 2,018 $ (61 ) $
1,957 20 % 2 % 18 % Operating income $ 2,728 $ 107 $ 2,835 $ 2,602
$ 61 $ 2,663 5 % (1 )% 6 % Operating Margin 53.1 % 55.2 % 56.3 %
57.7 % Income tax expense $ 760 $ 29 $ 789 $ 640 $ 17 $ 657 19 % (1
)% 20 % Effective Tax Rate 28.1 % 28.1 % 24.8 % 24.9 % Net income $
1,942 $ 78 $ 2,020 $ 1,941 $ 44 $ 1,985 — % (2 )% 2 %
Diluted
Earnings per Share $ 1.75 $ 0.07 $ 1.82 $ 1.69 $ 0.04 $ 1.73 4
% (1 )% 5 % Note: Figures may not sum due to rounding
1 Represents effect of excluding the U.K. merchant litigation
provisions
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160728005813/en/
MasterCard IncorporatedInvestor Relations:Barbara Gasper or
Jesal Meswani, 914-249-4565investor.relations@mastercard.comorMedia
Relations:Seth Eisen, 914-249-3153Seth.Eisen@mastercard.com
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