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.

“Despite a mixed global economy, we delivered solid results for the quarter and for the full year in 2014”

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 demonstra 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.