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MasterCard Incorporated Reports Fourth-Quarter and Full-Year 2012 Financial Results



  MasterCard Incorporated Reports Fourth-Quarter and Full-Year 2012 Financial
  Results

  * Fourth-quarter net income of $605 million, or $4.86 per diluted share
  * Fourth-quarter net revenue increase of 10%, to $1.9 billion
  * Fourth-quarter gross dollar volume up 14% and purchase volume up 13%

Business Wire

PURCHASE, N.Y. -- January 31, 2013

MasterCard Incorporated (NYSE: MA) today announced financial results for the
fourth quarter of 2012. The company reported net income of $605 million, up
18%, and earnings per diluted share of $4.86, up 21%, in each case versus the
year-ago period, excluding a special item representing a charge related to the
U.S. merchant litigations taken in the fourth quarter of 2011. These net
income and earnings per diluted share growth figures are reconciled to their
comparable GAAP measures in the accompanying financial tables.

Net revenue for the fourth quarter of 2012 was $1.9 billion, a 10% increase
versus the same period in 2011. Adjusted for currency, net revenue increased
12%. Net revenue growth was driven by the impact of the following:

  * An increase in processed transactions of 20%, to 9.2 billion;
  * An increase in cross-border volumes of 17%; and
  * A 14% increase in gross dollar volume, on a local currency basis, to $986
    billion.

These factors were partially offset by an increase in rebates and incentives,
primarily due to new and renewed agreements and increased volumes.

Worldwide purchase volume during the quarter was up 13% on a local currency
basis versus the fourth quarter of 2011, to $727 billion. As of December 31,
2012, the company’s customers had issued 1.9 billion MasterCard and
Maestro-branded cards.

“We are pleased with our fourth-quarter results, which saw double-digit growth
in net revenue, cross-border volume and processed transactions,” said Ajay
Banga, MasterCard president and CEO. “We are gaining traction in our U.S.
credit business with some recent wins, continuing to experience momentum in
our mobile initiatives around the world, and securing important business in
emerging markets like Africa and Brazil.”

Total operating expenses increased 3%, to $996 million, during the fourth
quarter of 2012 compared to the same period in 2011, excluding the special
item. Adjusted for currency, operating expenses increased 4%. The increase in
total operating expenses was primarily driven by an increase in the number of
employees in support of strategic growth initiatives and the net impact of
foreign exchange activity, partially offset by lower advertising and marketing
expenses. Including the special item from 2011, total operating expenses
decreased 43% from the year-ago period.

Operating income for the fourth quarter of 2012 increased 18% over the
year-ago period, excluding the special item, and the company delivered an
operating margin of 47.4%.

MasterCard's effective tax rate was 32.4% in the fourth quarter of 2012,
versus a rate of 32.3% in the comparable period in 2011, excluding the special
item.

During the fourth quarter of 2012, MasterCard repurchased 1.3 million shares
of class A common stock at a cost of approximately $613 million.
Quarter-to-date through January 25, the company repurchased an additional
322,000 shares at a cost of approximately $165 million, with $440 million
remaining under the current repurchase program authorization.

Full-Year 2012 Results

For the year ended December 31, 2012, MasterCard reported net income of $2.8
billion, up 15%, and earnings per diluted share of $22.04, up 18%, in each
case versus the year-ago period and excluding special items in both 2011 and
2012. The special item in 2012 was an incremental charge taken in the second
quarter related to the U.S. merchant litigations. Including this special item,
full-year 2012 net income remained $2.8 billion and earnings per diluted share
was $21.94.

Net revenue for full-year 2012 was $7.4 billion, an increase of 10% versus
2011. Adjusted for currency, net revenue increased 13%. Processed transaction
growth of 25%, gross dollar volume growth of 15% and cross-border volume
growth of 16% contributed to the net revenue growth in the full-year period.
These increases were partially offset by an increase in rebates and incentives
due to new and renewed customer agreements and increased volumes.

Excluding special items in both years, total operating expenses increased 6%,
to $3.4 billion, for 2012 compared to 2011, primarily due to higher personnel
costs related to strategic initiatives and partially offset by lower
advertising and marketing expenses. Adjusted for currency, total operating
expenses increased 8%. Including special items, total operating expenses in
2012 decreased 14%, to $3.5 billion, versus 2011.

Excluding special items, operating income increased 14% for 2012 versus 2011,
delivering an operating margin of 53.5% for full-year 2012.

Total other expense was $5 million for full-year 2012 versus total other
income of $33 million in 2011. This was primarily driven by lower investment
income, increased expenses from investments in joint ventures and the
non-recurrence of an adjustment to acquisition-related provisions made last
year.

MasterCard’s effective tax rate was 29.9% for full-year 2012, versus a rate of
31.8% for full-year 2011, excluding the special item in 2011. Including this
special item, the effective tax rate was 30.6% for full-year 2011. The
decrease in the 2012 effective tax rate was primarily due to discrete benefits
related to additional export incentives and the conclusion of tax examinations
in certain jurisdictions, as well as a benefit from a deduction related to the
company’s authorization software.

For full-year 2012, MasterCard repurchased 4.1 million shares at a cost of
approximately $1.7 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 888-771-4371 (within the U.S.) and
847-585-4405 (outside the U.S.), and the passcode is 33858248. 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 33858248.

The live call and the replay, along with supporting materials, can also be
accessed through the Investor Relations section of the company’s website at
mastercard.com.

Non-GAAP Financial Information

The company’s total operating expenses, operating income, net income and
earnings per share, excluding special items, are non-GAAP financial measures
that are reconciled to their most directly comparable GAAP measures in the
accompanying financial tables.

The presentation of growth rates adjusted for currency also 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 Conversations Blog and subscribe for the latest
news.

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 continue to gain
traction in U.S. credit, maintain momentum in mobile and secure new business
in emerging markets.

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, 2011, the company’s
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been
filed with the SEC during 2012, 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            Twelve Months Ended

                        December 31,                  December 31,
                        2012          2011            2012          2011
                        (in millions, except per share data)
                                                                               
Revenues, net           $ 1,895       $ 1,728         $ 7,391       $ 6,714
Operating
Expenses
General and               639           597             2,429         2,196
administrative
Advertising and           295           319             775           841
marketing
Depreciation
and                       62            52              230           194
amortization
Provision for
litigation                -             770             20            770    
settlement
Total operating           996           1,738           3,454         4,001  
expenses
Operating                 899           (10   )         3,937         2,713
income (loss)
Other Income
(Expense)
Investment                10            12              37            52
income
Interest                  (7    )       (7    )         (20   )       (25   )
expense
Other income              (8    )       (7    )         (22   )       6      
(expense), net
Total other
income                    (5    )       (2    )         (5    )       33     
(expense)
Income (loss)
before income             894           (12   )         3,932         2,746
taxes
Income tax
expense                   289           (30   )         1,174         842    
(benefit)
Net income                605           18              2,758         1,904
Loss
attributable to           -             1               1             2      
non-controlling
interests
Net Income
Attributable to         $ 605         $ 19            $ 2,759       $ 1,906  
MasterCard
                                                                               
Basic Earnings          $ 4.88        $ 0.15          $ 22.02       $ 14.90  
per Share
Basic Weighted
Average Shares            124           127             125           128    
Outstanding
Diluted
Earnings per            $ 4.86        $ 0.15          $ 21.94       $ 14.85  
Share
Diluted
Weighted                  125           127             126           128    
Average Shares
Outstanding

                                                                              
                                                                              
MASTERCARD INCORPORATED

CONSOLIDATED BALANCE SHEET

(UNAUDITED)
                                                               
                                            December 31,        December 31,
                                            2012                2011
                                            (in millions, except share data)
ASSETS
Cash and cash equivalents                   $   2,052           $  3,734
Restricted cash for litigation                  726                —
settlement
Investment securities                           2,951              1,215
available-for-sale
Accounts receivable                             925                808
Settlement due from customers                   1,117              601
Restricted security deposits held for           777                636
customers
Prepaid expenses and other current              681                404
assets
Deferred income taxes                           128                343      
Total Current Assets                            9,357              7,741
Property, plant and equipment, at               472                449
cost, net
Deferred income taxes                           60                 88
Goodwill                                        1,092              1,014
Other intangible assets, net                    672                665
Other assets                                    809                736      
Total Assets                                $   12,462          $  10,693   
LIABILITIES AND EQUITY
Accounts payable                            $   357             $  360
Settlement due to customers                     1,064              699
Restricted security deposits held for           777                636
customers
Accrued litigation                              726                770
Accrued expenses                                1,748              1,610
Other current liabilities                       234                142      
Total Current Liabilities                       4,906              4,217
Deferred income taxes                           104                113
Other liabilities                               523                486      
Total Liabilities                               5,533              4,816
Commitments and Contingencies
Stockholders’ Equity
Class A common stock, $0.0001 par
value; authorized 3,000,000,000
shares,
133,604,903 and 132,771,392 shares              —                  —
issued and 118,405,075 and
121,618,059
outstanding, respectively
Class B common stock, $0.0001 par
value; authorized 1,200,000,000
shares, 4,838,840                               —                  —
and 5,245,676 issued and outstanding,
respectively
Additional paid-in-capital                      3,641              3,519
Class A treasury stock, at cost,
15,199,828 and 11,153,333 shares,               (4,139  )          (2,394  )
respectively
Retained earnings                               7,354              4,745
Accumulated other comprehensive                 61                 (2      )
income (loss)
Total Stockholders’ Equity                      6,917              5,868
Non-controlling interests                       12                 9        
Total Equity                                    6,929              5,877    
Total Liabilities and Equity                $   12,462          $  10,693   

                                                                              
                                                                              
MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)
                                    
                                     For the Years Ended December 31,
                                     2012           2011           2010
                                     (in millions)
Operating Activities
Net income                           $ 2,758        $ 1,904        $ 1,847
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization          230            194            148
Share based payments                   89             80             63
Stock units withheld for taxes         (42    )       (33    )       (126  )
Tax benefit for share based            (47    )       (12    )       (85   )
compensation
Deferred income taxes                  241            (175   )       248
Other                                  53             19             41
Changes in operating assets
and liabilities:
Accounts receivable                    (121   )       (162   )       (115  )
Income taxes receivable                (185   )       —              (50   )
Settlement due from customers          (500   )       (114   )       (61   )
Prepaid expenses                       (81    )       27             (48   )
Obligations under litigation           —              (303   )       (603  )
settlements
Accrued litigation                     (44    )       770            —
Accounts payable                       (2     )       67             (19   )
Settlement due to customers            348            74             186
Accrued expenses                       221            296            265
Net change in other assets and         30             52             6      
liabilities
Net cash provided by operating         2,948          2,684          1,697  
activities
Investing Activities
Increase in restricted cash            (726   )       —              —
for litigation settlement
Acquisition of businesses, net         (70    )       (460   )       (498  )
of cash acquired
Purchases of property, plant           (96    )       (77    )       (61   )
and equipment
Capitalized software                   (122   )       (100   )       (90   )
Purchases of investment                (2,981 )       (899   )       (329  )
securities available-for-sale
Proceeds from sales of
investment securities                  390            485            297
available-for-sale
Proceeds from maturities of
investment securities                  891            63             110
available-for-sale
Proceeds from maturities of
investment securities                  —              300            —
held-to-maturity
Investment in nonmarketable            (118   )       (74    )       (67   )
equity investments
Other investing activities             (7     )       14             (3    )
Net cash used in investing             (2,839 )       (748   )       (641  )
activities
Financing Activities
Purchases of treasury stock            (1,748 )       (1,148 )       —
Dividends paid                         (132   )       (77    )       (79   )
Payment of debt                        —              (21    )       —
Tax benefit for share based            47             12             85
compensation
Cash proceeds from exercise of         31             19             11
stock options
Other financing activities             4              —              2      
Net cash (used in) provided by         (1,798 )       (1,215 )       19     
financing activities
Effect of exchange rate
changes on cash and cash               7              (54    )       (63   )
equivalents
Net (decrease) increase in             (1,682 )       667            1,012
cash and cash equivalents
Cash and cash equivalents -            3,734          3,067          2,055  
beginning of period
Cash and cash equivalents -          $ 2,052        $ 3,734        $ 3,067  
end of period

                                                                                                                                       
                                                                                                                                       
MASTERCARD INCORPORATED OPERATING PERFORMANCE
                                                                                                                          
               For the 3 Months ended December 31, 2012
All                                        Purchase             Purchase   Cash               Cash                         Acceptance
MasterCard     GDV      Growth   Growth               Growth                        Growth             Accounts   Cards
Credit,                                    Volume               Trans.     Volume             Trans.                       Locations
Charge and
Debit          (Bil.)   (USD)    (Local)   (Bil.)     (Local)   (Mil.)     (Bil.)   (Local)   (Mil.)   (Mil.)     (Mil.)   (Mil.)
Programs
APMEA          $271     23.1%    22.6%     $183       19.5%     1,872      $88      29.3%     668      343        371      10.6
Canada         35       11.3%    7.7%      32         8.0%      349        3        4.6%      6        44         53       1.0
Europe         295      14.8%    16.4%     206        13.1%     2,878      89       24.6%     513      259        276      10.1
Latin          84       13.6%    16.1%     50         19.9%     1,060      34       11.0%     190      118        136      5.0
America
Worldwide
less           685      17.6%    18.2%     471        15.9%     6,160      214      23.7%     1,376    764        836      26.7
United
States
United         301      6.8%     6.8%      256        7.1%      4,567      45       4.8%      297      288        321      9.2
States
Worldwide      986      14.1%    14.5%     727        12.6%     10,727     260      20.0%     1,673    1,051      1,158    35.9
                                                                                                                                       
MasterCard
Credit and
Charge
Programs
Worldwide
less           424      14.4%    14.9%     374        15.0%     4,336      51       13.7%     209      480        543
United
States
United         147      2.5%     2.5%      140        4.1%      1,633      7        -21.9%    7        149        178
States
Worldwide      571      11.1%    11.4%     514        11.8%     5,968      58       7.8%      215      629        721
                                                                                                                                       
MasterCard
Debit
Programs
Worldwide
less           260      23.1%    24.1%     97         19.2%     1,824      163      27.2%     1,168    284        293
United
States
United         155      11.2%    11.2%     116        11.1%     2,934      39       11.7%     291      138        143
States
Worldwide      415      18.4%    19.0%     213        14.6%     4,758      202      23.9%     1,458    422        436
                                                                                                                                       
                                                                                                                                       
               For the 12 Months ended December 31, 2012
All                                        Purchase             Purchase   Cash               Cash
MasterCard     GDV      Growth   Growth               Growth                        Growth             Accounts   Cards
Credit,                                    Volume               Trans.     Volume             Trans.
Charge and
Debit          (Bil.)   (USD)    (Local)   (Bil.)     (Local)   (Mil.)     (Bil.)   (Local)   (Mil.)   (Mil.)     (Mil.)
Programs
APMEA          $980     21.4%    22.7%     $662       21.0%     6,852      $318     26.3%     2,385    343        371
Canada         127      6.8%     7.8%      116        8.6%      1,293      11       -0.3%     23       44         53
Europe         1,071    9.3%     16.4%     751        12.6%     10,499     319      26.5%     1,900    259        276
Latin          302      9.2%     18.5%     181        22.9%     3,875      120      12.5%     718      118        136
America
Worldwide
less           2,480    13.6%    18.6%     1,711      16.5%     22,521     769      23.5%     5,026    764        836
United
States
United         1,167    9.1%     9.1%      982        9.0%      17,545     184      9.7%      1,208    288        321
States
Worldwide      3,647    12.1%    15.4%     2,694      13.6%     40,066     953      20.6%     6,234    1,051      1,158
                                                                                                                                       
MasterCard
Credit and
Charge
Programs
Worldwide
less           1,558    11.4%    15.3%     1,368      15.9%     16,080     189      11.2%     787      480        543
United
States
United         562      3.5%     3.5%      534        5.1%      6,241      28       -19.1%    27       149        178
States
Worldwide      2,120    9.2%     11.9%     1,902      12.6%     22,321     218      6.0%      814      629        721
                                                                                                                                       
MasterCard
Debit
Programs
Worldwide
less           923      17.7%    24.5%     343        18.9%     6,441      579      28.2%     4,239    284        293
United
States
United         604      14.9%    14.9%     448        14.1%     11,304     156      17.3%     1,181    138        143
States
Worldwide      1,527    16.6%    20.5%     791        16.1%     17,744     735      25.7%     5,420    422        436
                                                                                                                                       
                                                                                                                                       
               For the 3 Months ended December 31, 2011
All                                        Purchase             Purchase   Cash               Cash
MasterCard     GDV      Growth   Growth               Growth                        Growth             Accounts   Cards
Credit,                                    Volume               Trans.     Volume             Trans.
Charge and
Debit          (Bil.)   (USD)    (Local)   (Bil.)     (Local)   (Mil.)     (Bil.)   (Local)   (Mil.)   (Mil.)     (Mil.)
Programs
APMEA          $220     23.5%    22.4%     $152       23.3%     1,565      $69      20.5%     502      296        321
Canada         31       5.5%     6.5%      29         9.3%      316        2        -17.4%    6        41         50
Europe         257      13.6%    16.7%     184        12.6%     2,455      73       28.7%     424      222        238
Latin          74       12.5%    20.3%     45         24.8%     917        29       14.1%     180      107        131
America
Worldwide
less           582      16.5%    18.6%     409        17.4%     5,253      173      21.8%     1,111    666        740
United
States
United         282      12.1%    12.1%     239        11.5%     4,241      43       15.6%     279      274        307
States
Worldwide      865      15.0%    16.4%     648        15.1%     9,494      216      20.5%     1,390    940        1,046
                                                                                                                                       
MasterCard
Credit and
Charge
Programs
Worldwide
less           371      13.3%    14.8%     326        16.6%     3,815      45       3.3%      183      450        511
United
States
United         143      6.6%     6.6%      134        6.3%      1,616      9        10.7%     8        146        175
States
Worldwide      514      11.4%    12.4%     461        13.4%     5,431      53       4.5%      190      596        686
                                                                                                                                       
MasterCard
Debit
Programs
Worldwide
less           212      22.5%    26.0%     83         20.4%     1,439      129      29.8%     929      216        229
United
States
United         139      18.4%    18.4%     104        19.0%     2,625      35       16.9%     271      128        131
States
Worldwide      350      20.9%    22.9%     187        19.6%     4,064      163      26.9%     1,200    344        360
                                                                                                                                       
                                                                                                                                       
               For the 12 Months ended December 31, 2011
All                                        Purchase             Purchase   Cash               Cash
MasterCard     GDV      Growth   Growth               Growth                        Growth             Accounts   Cards
Credit,                                    Volume               Trans.     Volume             Trans.
Charge and
Debit          (Bil.)   (USD)    (Local)   (Bil.)     (Local)   (Mil.)     (Bil.)   (Local)   (Mil.)   (Mil.)     (Mil.)
Programs
APMEA          $808     30.5%    23.3%     $548       24.8%     5,736      $259     20.3%     1,831    296        321
Canada         119      11.7%    7.3%      108        9.4%      1,171      11       -9.8%     22       41         50
Europe         979      21.0%    16.7%     709        13.3%     9,028      271      26.6%     1,572    222        238
Latin          276      25.4%    22.5%     164        27.1%     3,297      112      16.3%     683      107        131
America
Worldwide
less           2,183    24.3%    19.2%     1,529      18.3%     19,232     654      21.4%     4,107    666        740
United
States
United         1,069    10.4%    10.4%     901        11.0%     15,916     168      7.8%      1,079    274        307
States
Worldwide      3,252    19.4%    16.2%     2,430      15.5%     35,148     822      18.3%     5,186    940        1,046
                                                                                                                                       
MasterCard
Credit and
Charge
Programs
Worldwide
less           1,399    20.4%    15.3%     1,222      17.5%     14,104     177      2.1%      710      450        511
United
States
United         543      6.0%     6.0%      508        6.1%      6,064      35       5.1%      30       146        175
States
Worldwide      1,942    16.0%    12.6%     1,730      13.9%     20,169     212      2.6%      741      596        686
                                                                                                                                       
MasterCard
Debit
Programs
Worldwide
less           784      32.0%    26.8%     307        21.5%     5,127      477      30.5%     3,397    216        229
United
States
United         526      15.4%    15.4%     393        18.0%     9,852      133      8.5%      1,049    128        131
States
Worldwide      1,310    24.8%    22.0%     699        19.5%     14,979     610      25.0%     4,445    344        360

 
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,
cards and acceptance locations 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, Mondex® transactions
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. Acceptance locations include merchant
locations, ATMs and other locations where cash may be obtained.

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. In
order to provide a true indication of how broadly our cards can be used,
MasterCard seeks to provide the most accurate acceptance figures possible and
to maintain that MasterCard acceptance is unsurpassed worldwide by
periodically validating our results with third parties. The data set forth in
the acceptance locations column is derived through a proprietary methodology
designed to minimize the impact of multiple acquiring in certain markets. This
data is based on information provided by our customers and other third parties
and is subject to certain limited verification by MasterCard and partial
cross-checking against information provided by MasterCard’s transaction
processing systems. All data is subject to revision and amendment by
MasterCard’s customers subsequent to the date of its release.

In 2012, certain MasterCard Debit and Credit Programs in the Europe region
have changed due to a reclassification of programs. There is no impact at the
All MasterCard Programs level. In addition, Purchase Transactions for certain
Credit Programs in the Latin America region have been revised due to changes
from several customers. MasterCard revenue is not impacted from these changes.
Data for the comparable periods in 2012, 2011 and 2010 have been revised to be
consistent with these approaches. For 2012Q4, U.S. acceptance locations
reflect an increase, primarily due to customer revisions.

Performance information for prior periods can be found in the "Investor
Relations" section of MasterCard's website at www.mastercard.com.

 
 
GAAP Reconciliation

($ in millions, except per share data)
                                                                     
                      Three
                      Months            Three Months Ended
                      Ended
                                        December 31, 2011
                      December
                      31, 2012
                                                                       
                      Actual            Actual       Special          Non-GAAP
                                                     Item
                                                                       
Provision for
litigation            $  -              $ 770        $  (770)         $  -
settlement
                                                                       
Total operating          996              1,738         (770)            968
expenses
                                                                       
Operating                899              (10)          770              760
income (loss)
                                                                       
Operating                47.4%            (0.6%)                         44.0%
Margin
                                                                       
Income (loss)
before income            894              (12)          770              758
taxes
                                                                       
Income tax
expense                  289              (30)          275     a        245
(benefit)
                                                                       
Net Income
Attributable to          605              19            495              514
MasterCard
                                                                       
                                                                       
Basic Earnings        $  4.88           $ 0.15       $  3.90          $  4.05
per Share
                                                                       
Diluted
Earnings per          $  4.86           $ 0.15       $  3.88          $  4.03
Share
                                                                       
a- Tax effect of provision for litigation settlement

                                                                           
                 Twelve Months Ended                 Twelve Months Ended

                 December 31, 2012                   December 31, 2011
                                                                             
                 Actual    Special      Non-GAAP     Actual    Special      Non-GAAP
                           Item                                Item
                                                                             
Provision
for              $ 20      $  (20)      $  -         $ 770     $ (770)      $  -
litigation
settlement
                                                                             
Total
operating          3,454      (20)         3,434       4,001     (770)         3,231
expenses
                                                                             
Operating          3,937      20           3,957       2,713     770           3,483
income
                                                                             
Operating          53.3%                   53.5%       40.4%                   51.9%
Margin
                                                                             
Income
before             3,932      20           3,952       2,746     770           3,516
income taxes
                                                                             
Income tax         1,174      7     a      1,181       842       275    a      1,117
expense
                                                                             
Net Income
Attributable       2,759      13           2,772       1,906     495           2,401
to
MasterCard
                                                                             
                                                                             
Basic
Earnings per     $ 22.02   $  0.10      $  22.12     $ 14.90   $ 3.87       $  18.77
Share
                                                                             
Diluted
Earnings per     $ 21.94   $  0.10      $  22.04     $ 14.85   $ 3.85       $  18.70
Share
                                                                             
a- Tax effect of provision for litigation settlement

                                                                              
                                                                              
Reconciliation to Effective Tax Rate

($ millions)
                                                                  
                                               Provision for
                                 GAAP          Litigation          Non-GAAP
                                 Actual        Settlement          Adjusted
Three months ended
December 31, 2011:
                                                                              
Income (loss) before             $ (12   )     $     770           $ 758
income taxes
Income tax expense                 (30   )           275             245
(benefit)
Net income attributable to         19                495             514
MasterCard
                                                                              
Effective Tax Rate                 251.6 %                           32.3  %
                                                                              
                                                                              
Twelve months ended
December 31, 2011:
                                                                              
Income before income taxes       $ 2,746       $     770           $ 3,516
Income tax expense                 842               275             1,117
Net income attributable to         1,906             495             2,401
MasterCard
                                                                              
Effective Tax Rate                 30.6  %                           31.8  %
                                                                              
Note that the figures in the preceding tables may not sum / calculate due to
rounding
                                                                              

Contact:

MasterCard Incorporated
Investor Relations:
Barbara Gasper, 914-249-4565
investor_relations@mastercard.com
or
Media Relations:
Jim Issokson, 914-249-6286
james_issokson@mastercard.com
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