8-KOther EventsExhibits & Filings

Mastercard Inc 8-K Report, Corporate Update (Apr 7, 2009)

Filed April 7, 2009For Securities:MA

Summary

Mastercard Inc. (MA) announced in this Form 8-K filing dated April 6, 2009, a change in how it will present certain financial information to better align with management's view of business drivers. Specifically, the company is modifying the presentation of its major revenue categories within the Management's Discussion and Analysis (MD&A) section of future SEC filings. This change involves reporting net revenues under four main categories: Domestic Assessments, Cross-Border Volume Fees, Transaction Processing Fees, and Other Revenues, along with a combined contra-revenue line for Rebates and Incentives. Importantly, these presentation changes will not alter the overall calculation of net revenue or affect historical financial statements. Additionally, certain cardholder-related enhancement expenses, previously under advertising and marketing, will be reclassified to general and administrative expenses, with no impact on total operating expenses. These changes will be effective starting with the Q1 2009 Form 10-Q.

Key Highlights

  • 1Mastercard is updating its financial reporting presentation for revenue categories to better reflect business operations and management analysis.
  • 2New revenue categories will be: Domestic Assessments, Cross-Border Volume Fees, Transaction Processing Fees, and Other Revenues, with a Rebates and Incentives contra-revenue line.
  • 3These presentation changes do not affect the total reported net revenue in financial statements or historical financial data.
  • 4Certain cardholder-related enhancement expenses will be reclassified from advertising and marketing to general and administrative expenses.
  • 5The reclassification of expenses will not impact the company's overall operating expenses.
  • 6The new presentation will be adopted starting with the Form 10-Q for the quarter ended March 31, 2009.
  • 7Detailed definitions of the new revenue categories and an explanation of the changes are provided in accompanying exhibits (99.1 and 99.2).

Frequently Asked Questions

No, the company explicitly states that these changes are purely presentational. They will not result in any changes to the Company's historical financial statements, nor will they affect the overall calculation of net revenue or operating expenses presented in future financial statements.

Mastercard is making these changes to better align the presentation of its financial information, particularly revenue categories and certain expenses, with the way management views the underlying drivers of the business and analyzes the company's results of operations.

Prospectively, Mastercard will report net revenues within the MD&A using four major categories: Domestic Assessments, Cross-Border Volume Fees, Transaction Processing Fees, and Other Revenues. A fifth line, Rebates and Incentives, will be presented as a contra-revenue.

Detailed definitions of the new revenue categories and an explanation of the changes from the historical to the modified presentation are available in Exhibits 99.1 and 99.2, which are incorporated by reference into this filing. Historical financial information on a quarterly basis for 2008, 2007, and 2006 reflecting these changes is also available on the Investor Relations section of Mastercard's website.