MasterCard 2003 Annual Report Download - page 5
Download and view the complete annual report
Please find page 5 of the 2003 MasterCard annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.3
In2003,wedemonstratedboththestrengthandthepromiseofour
company.Inthefaceofnumerouschallenges,wemadegoodprogress
againstourobjectivesandincreasedrevenueswhilecloselymanaging
ourexpenses.Atthesametime,wemovedforwardwithinitiativesthat
willstrategicallypositionMasterCardforfuturegrowth.
Despiteeconomicweakness,theoutbreakofSARS,andgeopoliticalinstability,cardholdersworldwideusedMasterCard-
brandedcardsforsome15billiontransactionsin2003.Thisgeneratedapurchasevolumeof$922billion,anincreaseof
10percentonalocalcurrencybasisover2002,andagrossdollarvolume(GDV)of$1.27trillion,anincreaseof5.9percent
onalocalcurrencybasisover2002.Meanwhile,ourcustomershaveissuedmorethan632millionMasterCard-branded
cards,7percenthigherthanayearago.Inaddition,Maestro®
,ouronlinedebitprogram,grewto520millioncards,a
13.8percentincreaseover2002.Majordebitbrandconversions
—
includingRedeshop®inBrazilandSwitch®intheUnited
Kingdom
—
havecontributedtothisincreaseandreectarepositioningofMasterCarddebitproductstoservebothcross-
borderanddomesticmarketneeds.
Weexperiencedgrowthinallbutoneofourregionsaroundtheworld,withGDVrising6.3percentinNorthAmerica,
13.5percentinEurope,31.2percentinLatinAmerica,and17.5percentinourSouthAsia,MiddleEastandAfricaRegion.
Asia/PacicwastheonlyregioninwhichGDVdeclined(by9percent),dueprimarilytothecreditdelinquencyproblem
inKoreaandtheeffectofSARSacrosstheregion.
IntheUnitedStates,whichaccountsforabouthalfofourglobalGDV,transactionsrose7.6percentlastyear,generating
$637billioninGDV.ThenumberofMasterCard-brandedcards,meanwhile,increasedby3.2percentto326million.
Thisperformancehelpedusdealeffectivelywiththehurdlesbeforeus,amongthemaclass-actionlawsuitbroughtagainst
usbymerchantsintheUnitedStates.Whilewebelievethislawsuitwaswithoutmerit,wealsobelievethatreachinganout-
of-courtsettlementwasthebestwaytoavoidthepotentialofsignicantlyhigherdamages,giventheinherentuncertainty
ofajurytrial.Asaresult,weagreedtoa$1billionsettlement,whichwillbepaidoutover10yearsfromU.S.revenues,and
securedageneralreleaseofallclaimsinthelitigation.Afterconsideringthetaxbenetwewillreceivefromthissettlement
andthetimevalueofmoney,wetookachargetoourequityof$486millionfromthesettlementandothermerchantsuits.
Givenourstrongbalancesheet,wechosetoabsorbthischargewithoutassessinganyofourmembers.Evenaswework
toreplenishourcapital,MasterCardremainsinasolidnancialposition.
Fromtheofceofthe
PresidentandChiefExecutiveOfcer
RobertW.Selander