MasterCard 2012 Annual Report Download - page 110

MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Effective June 1, 2010, the outstanding shares of the Company’s Class B common stock represented for the
first time less than 15% of the aggregate outstanding shares of the Class A common stock and Class B common
stock. Accordingly, pursuant to the Company’s amended and restated certificate of incorporation in effect at that
time, all outstanding shares of the Company’s Class M common stock were automatically transferred to the
Company and retired, and are no longer available for issue or reissue. Additionally, the Company no longer has
authority to issue additional shares of Class M common stock. The retirement of the Class M common stock had
no effect on the Company’s financial position or basic or diluted EPS.
The MasterCard Foundation
In connection and simultaneously with the IPO, the Company issued and donated 13.5 million newly
authorized shares of Class A common stock to The MasterCard Foundation (the “Foundation”). The Foundation
is a private charitable foundation incorporated in Canada that is controlled by directors who are independent of
the Company and its principal customers. Under the terms of the donation, the Foundation became able to resell
the donated shares in May 2010 and to the extent necessary to meet charitable disbursement requirements
dictated by Canadian tax law. Under Canadian tax law, the Foundation is generally required to disburse at least
3.5% of its assets not used in administration each year for qualified charitable disbursements. However, the
Foundation obtained permission from the Canadian tax authorities to defer the giving requirements for up to ten
years, which was extended in 2011 to 15 years. The Foundation, at its discretion, may decide to meet its
disbursement obligations on an annual basis or to settle previously accumulated obligations during any given
year. The Foundation will be permitted to sell all of its remaining shares beginning twenty years and eleven
months after the consummation of the IPO.
Stock Repurchase Programs
In June 2012, the Company’s Board of Directors approved a share repurchase program authorizing the
Company to repurchase up to $1.5 billion of its Class A common stock (the “June 2012 Share Repurchase
Program”). This program became effective in June 2012 at the completion of the Company’s previously
announced $2 billion Class A share repurchase program. (This $2 billion repurchase program consisted of
$1 billion authorized in September 2010 and $1 billion authorized in April 2011.)
The following table summarizes the Company’s share repurchase authorizations of its Class A common
stock through December 31, 2012, as well as historical purchases:
Authorization Dates
June
2012
April
20111Total
(in millions, except average price
data)
Board authorization ......................................... $ 1,500 $ 2,000 $ 3,500
Dollar-value of shares repurchased in 2011 ....................... ** $ 1,148 $ 1,148
Remaining authorization at December 31, 2011 ................... ** $ 852 $ 852
Dollar-value of shares repurchased in 2012 ....................... $ 896 $ 852 $ 1,748
Remaining authorization at December 31, 2012 ................... $ 604 $ — $ 604
Shares repurchased in 2011 ................................... ** 4.43 4.43
Average price paid per share in 2011 ............................ ** $258.92 $258.92
Shares repurchased in 2012 ................................... 1.95 2.11 4.06
Average price paid per share in 2012 ............................ $460.22 $403.53 $430.71
Cumulative shares repurchased through December 31, 2012 ......... 1.95 6.54 8.49
Cumulative average price paid per share ......................... $460.22 $305.60 $341.04
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