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Mastercard Incorporated (NYSE:MA)

Q1 2012 Earnings Call

May 02, 2012 9:00 am ET

Executives

Barbara Gasper -

Ajaypal S. Banga - Chief Executive Officer, President, Director, Member of Executive Committee, Chief Executive Officer of MasterCard International and President of Mastercard International

Martina Hund-Mejean - Chief Financial Officer and Member of Executive Committee

Analysts

David S. Hochstim - The Buckingham Research Group Incorporated

Christopher Brendler - Stifel, Nicolaus & Co., Inc., Research Division

Bill Carcache - Nomura Securities Co. Ltd., Research Division

Bryan Keane - Deutsche Bank AG, Research Division

Darrin D. Peller - Barclays Capital, Research Division

Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc., Research Division

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

Patrick O'Brien

Donald Fandetti - Citigroup Inc, Research Division

Moshe Katri - Cowen and Company, LLC, Research Division

Marc Lombardo - Meredith Whitney Advisory Group LLC

Craig J. Maurer - Credit Agricole Securities (NYSE:USA) Inc., Research Division

Glenn Fodor - Morgan Stanley, Research Division

Julio C. Quinteros - Goldman Sachs Group Inc., Research Division

John T. Williams - UBS Investment Bank, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2012 MasterCard Earnings Conference Call. My name is Pam, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Ms. Barbara Gasper, Head of Investor Relations. Please proceed.

Barbara Gasper

Thank you, Pam. Good morning, everyone, and thank you for joining us today either by phone or webcast for a discussion about our first quarter 2012 financial results. With me on the call today are Ajay Banga, our President and Chief Executive Officer; and Martina Hund-Mejean, our Chief Financial Officer. Following comments from Ajay and Martina, the operator will announce your opportunity to get into the queue for the Q&A session. Up until then, no one is actually registered to ask a question.

This morning's earnings release and the slide deck that will be referenced on this call can be found in the Investor Relations section of our website, at mastercard.com. The earnings release and slide deck have also been attached to an 8-K that we filed with the SEC earlier this morning. A dial-in replay of this call will be available for one week through May 9. Finally, as set forth in more detail in today's earnings release, I need to remind everyone that today's call may include some forward-looking statements about MasterCard's future performance. Actual performance could differ materially from what is suggested by our comments today. Information about the factors that could affect future performance are summarized at the end of our press release, as well as contained in our recent SEC filings. With that, I will now turn the call over to our President and CEO, Ajay Banga. Ajay?

Ajaypal S. Banga

Thank you, Barbara. Good morning, everybody. So in the first quarter, we reported a net revenue growth as reported of 17%. Now that's driven by healthy process transaction and volume growth, and this helped to fuel net income growth of 21% and EPS growth of 25%. We continue to see some improvement in U.S. economic news, with unemployment dropping to 8.2%, a 3-year low, below the 9% we saw a year ago. Consumer confidence, while roughly flat the month, is higher than a year ago, and of course, this was offset by news the housing market has recently hit its lowest level in a decade. You've seen the ADP payroll report this morning. Having said all that, the overall trend continued to have a positive impact on total consumer retail spending, as reflected in our SpendingPulse insight, which showed that in March, U.S. consumer increased spending in all 11 retail sectors that we track. The strongest growth came from restaurants, apparel, hardware and electronics. Now this trend should continue for a sustained period of time. We're going to look for additional improvement in unemployment and a positive turn in housing prices.

Having said all that, the strength in consumer spending as a whole also showed up in MasterCard's own U.S. GDV, which is up 14% for the first quarter. In Europe, quarterly volumes remained strong, growing 19%, slightly above the level we've actually seen over the recent quarters. Now this is driven by both strong cross-border and domestic volume growth. And similar to the last quarter, process transactions in the region were up over 40% in the first quarter as they continue to benefit from the roll-on of domestic processing in The Netherlands. And while there has been renewed concerns in the press about European consumer confidence, it's little interesting fact, it actually held steady in the Eurozone this past quarter after significant declines in the second half of 2011. It does take a few quarters before changing consumer sentiment impacts our volumes in this region. And as such, we are watching our European business very closely.

Looking at our first quarter, we saw process volumes of Portugal, Italy, Ireland, Greece and Spain in aggregate continue to post growth rates in the mid-teens. New business wins, particularly in Italy and Ireland, were compensating for the slowing in Spain and Greece in these peripheral economies as they're called. Elsewhere in the world, Latin America, the Asia Pacific/Middle East/Africa region, volume growth remains healthy, with domestic and cross-border volume growth rates all greater than 20%. Volume growth in these regions will have difficult comparisons, particularly in the second and third quarters of 2012. Also, be mindful that any softening in the major economies of Europe or the U.S. would likely negatively impact these regions as well. But in the meanwhile, we continue to execute our business strategy.

And the first item I want to focus on is the U.S. debit market, where we are executing well in a challenging and shifting environment. We mentioned last year that the primary element of our U.S. debit strategy post the Durbin Amendment was to maximize our presence on these cards. Before the regulations went into effect, MasterCard functionality was an approximately 25% of U.S. debit cards. Now MasterCard is enabled on about half, including 3 of the largest portfolios in the market. In addition, we estimate that our share of PIN debit transactions exceeded 20% in April, up from high-single digits last year. It's too soon to know how routing will play out longer-term. In the short term, we have roughly doubled our presence in U.S. debit cards and nearly tripled our share of U.S. PIN debit transactions.

At this point, I usually walk through a series of business highlights from around the world. But instead, given that we are past the 1 year anniversary of both the acquisitions of DataCash and Access Prepaid, I thought it would be helpful to use this time to update you on the progress we've made with these businesses. Recall that these extend MasterCard's capabilities in the payments value chain in fast-growing categories, e-commerce and prepaid. In both cases, the integration into the MasterCard business is largely complete and behind us. We have been moving people across the businesses, as you would expect, such as Ajay Bhalla, who moved over from our Asia Pacific/Middle East/Africa region to run the DataCash business; and Neville Hall, MasterCard's new Global Head of Compliance, who's coming to us from the Access Prepaid business, and there are others at all levels below them. And this type of movement will continue to ensure that we build over time and integrate a culture of innovation and accountability.

Now let me talk about each business in a bit more depth. Let's start with Access Prepaid, which we bought from Travelex in April 2011. For us to be successful in prepaid around the world, we need to have 3 core capabilities: brand, processing and program management. This Access Prepaid acquisition provides us the program management capabilities across multiple markets with a strong position in the all-important travel vertical and a position we will continue to leverage for future growth. In this past year 2011, Access Prepaid saw substantial growth. Volume on Access Prepaid cards increased roughly 25% versus 2010. And just as important, we are continuing to build a foundation for future growth. Since the end of 2010, we have entered 7 additional markets, including Germany, China, India and South Korea. In India, for example, we signed a deal with Thomas Cook, the largest money changer in that country. They will begin issuing Access Prepaid MasterCards in the second half of this year, displacing the competitive cards that they currently distribute. In Australia, we launched a multi-currency purse that can hold as many as 10 currencies. This capability allowed us to gain a foothold with National Australia Bank, which traditionally has been an issuer of a competitive cards.

So now let's move onto our DataCash Internet Gateway business, which we purchased about 18 months back. DataCash enables acquirers to efficiently gain new business. It also helps merchants and consumers connect via e-commerce or any type of device, the personal computer, the phone or a tablet with speed, dependability and security. And as we connect more high-volume merchants and more of the world's leading acquirers together, we increase our opportunity to drive acceptance and preference for MasterCard products. Like other e-commerce gateways, DataCash handles non-MasterCard transactions as well. So even if you don't switch the transaction, which does happen as you know in many markets, we'll still see it. We have an opportunity to gain insights from the breadth of transactions we see. Similar to Access Prepaid, we are expanding the geographic reach of DataCash services, helping to drive nearly 25% transaction growth over the past year.

Let me tell you a little bit about how we are growing this gateway services business. The first way we go to market is to sell to merchants directly, and then deliver that business to acquirers. For the past year or so, we have directly signed up several thousand merchants, including many in the travel sector. I'll give you few examples: Jetstar and Scoot, both airlines in Asia/Pacific/Middle East/Africa; Arik Air in the U.K; Eurostar, the European rail operator; Volotea, a Spanish airline; South Africa. We've added these merchants to a portfolio of customers that already included marquee names like Qantas and Singapore Airlines. There have also been numerous merchants beyond the travel sector such as Groupon in Taiwan and several retailers in the U.K., including Ocado, a grocery delivery service and Sports Direct Group. That's the first way we go to market.

The second go-to-market strategy is to white label our services for acquirers to include in their offering to merchants. So Unicredit, for example, an Italian acquirer, also a big client of ours as a bank is live with the gateway functionality and first started servicing merchants in Eastern Europe. Elavon, part of U.S. Bancorp, is also actively using our white label offering for its own newly launched gateway solution in Europe, and there are more of these in the hopper to come. The third way we go to market is to bundle our capabilities as part of another company's prepackaged e-commerce solution. So take the example of Capgemini, which as part of its consultancy business, works with large merchants to implement payment solutions. We are prepackaged in there. Finally, we are leveraging our Internet gateway capabilities to gain further entry into large and fast-growing markets to maximize our participation in those markets and their growth. So for example, the Japanese e-commerce market is the third largest in the world. DataCash have just completed integration with JCB to enable multinational merchants to accept payments on their website from JCB cardholders in Japan.

Similar example, moving to China, which is projected to be the second-largest e-commerce market in the world by 2016. DataCash have successfully completed the integration, technical integration, with China UnionPay, which as you know, was part of our MOU with them, thereby opening cross-border e-commerce for consumers in China. We're already working with a number of large airlines and retailers, travel agencies to enable use of these services. We're also in the process of customizing our fraud system for the Chinese market. That's an area of great interest in that location. These fraud management tools actually are excellent and, as you will recall, were one of the primary reasons we purchased DataCash. They provide cross-sell opportunities to existing customers, as well as open the door with potential new customers as they address a major paying point with e-commerce merchants. And as we connect to more merchants, we increase our ability to deliver these fraud management tools, as well as other value-added services.

So with that, let me turn the call over to Martina for a detailed update on our financial for the first quarter. Martina?

Martina Hund-Mejean

Thanks, Ajay, and good morning, everyone. Turning to Page 3 of our slide deck, you can see that we're delivering a solid top line and bottom line results. Net revenue grew 17%, driven by strong volume and transaction growth, as well as new deals. Pricing contributed about 3 percentage points of this growth. Total operating expenses increased 14%. That resulted in an operating income growth of 20%. Bottom line, we delivered net income of $682 million, up 21% and diluted earnings per share of $5.36, up 25%. Cash flow from operations was $427 million. We ended the quarter with cash, cash equivalents and investments of about $5.1 billion.

While not shown on this chart, let me put our results in the same terms as our long-term financial objectives, which are on a constant currency basis. On that basis, net revenue growth was 19% and EPS growth was 27%. So there was a 2-percentage-point impact on each quarter from FX. Operating margin was essentially unaffected.

On the next couple of slides, we are presenting the operational metrics for the first quarter of 2012. So let's turn to Page 4, and here you can see that worldwide growth dollar volume or GDV was up 18% on a local-currency basis, including double-digit growth in all regions. U.S. volume growth was 14%, driven by almost 21% debit growth, as a result of stronger underlying volumes, including prepaid, as well as recent signature debit wins. Credit volumes in the U.S. grew about 7%, with consumer credit growth staying steady with previous quarters in the 3 to 4 percentage range, and commercial credit posting its seventh consecutive quarter of double-digit growth.

Outside of the United States, our volume growth was 21% on a local-currency basis, including about 23% growth in Latin America and Asia Pacific/Middle East/Africa and 19% growth in Europe. The growth rate of volumes outside of the U.S. were driven by strength in both MasterCard credit and debit volumes, which were up 20% and 22%, respectively. Cross-border volume grew 18% on a local-currency basis, and we saw double-digit growth in every region, including growth rates above 20% in Latin America and APMEA. In total, European cross-border volume growth was in the high-teens, consistent with previous quarters.

Turning to Slide 5. You can see that process transactions were up 29%, and this is the highest quarterly growth rate for process transactions since we went public in 2006. The growth was primarily driven by the U.S. and Europe as we continue to see the impact of debit regulation in the U.S., as well as new deal signings in both regions. Global card growth was 9% to 1.8 billion MasterCard and Maestro-branded cards.

So now let's turn to Page 6, where we can discuss our revenue growth in a bit more detail. The higher volume trends that I described when discussing GDV drove domestic assessments and cross-border volume fees growth of 16% and 15%, respectively. Transaction processing fees grew 21%, driven mainly by the 29% process transaction growth. So there continues to be gap in these 2 growth rates. Also this gap is slightly smaller this quarter than it was last quarter due to pricing. If you exclude the impact of pricing, the gap actually widens to about 12 percentage points. The majority of this gap was due to the addition of transactions outside of the U.S. Recall that the incremental revenue from most of these new transactions comes at a lower-than-average revenue yield. Total revenue grew 29%, driven by the acquisition of Access Prepaid, which anniversaried at the beginning of April, as well as other non-volume-related fees. And finally, rebates and incentives increased 24%, driven by the impact of new and renewed deals, as well as strong volume growth.

Moving to Page 7 for some detail on expenses. So within total operating expenses, you see that general and administrative expenses increased 17%. 5 percentage points of this growth came from the inclusion of Access Prepaid, and the remaining 12 percentage points primarily came from the investment in strategic growth initiatives. Advertising and marketing expense was actually 3% lower than last year's first quarter, mainly due to the impact of foreign currency. And depreciation and amortization increased about 30% due to the amortization of intangible assets in Access Prepaid and increased capitalized software associated with our strategic projects.

Turning now to Slide 8. Let's discuss 2012, starting with an update of what we have seen for the second quarter through April 28. Our cross-border volumes grew about 18% globally, in line with the growth that we saw in the first quarter. This was driven by continued healthy growth in all regions. In April, our U.S. process volume of proxy for GDV grew about 10%. This is somewhat lower than the 15% we saw in the first quarter, largely due to the impact of the extra day in the quarter, leap year, the tax refund programs that we've seen in the first quarter and the lacking of new business wins. Process volume growth outside of the U.S. was just above 16%, slightly below the 19% growth that we saw in the first quarter primarily due to the leap year. And in Europe, which I know is of particular interest to many of you, process volume growth softened slightly by a couple of percentage points. Globally, process transaction growth was about 32%, and reflects the impact of U.S. debit rule changes, as well as the continued roll-on of domestic transactions in The Netherlands.

Based on what we see now, let me give you some thoughts for full year 2012. So we had a good start off to the year, though we do not expect the first quarter net revenue growth rate to be the run rate for the balance of the year. In addition to the items I just mentioned, which benefited Q1 versus April, there are several other factors that you should keep in mind, the anniversary of the Access Prepaid acquisition, the lapping of our April 2011 pricing and the expected timing of new and renewed deals over the balance of the year. We also have generally tougher comps in the next 3 quarters, given the very strong revenue growth we saw in the last 9 months of 2011. So while Q1 saw consumer confidence at decent levels, as Ajay told you, this is an economic indicator that we're watching very carefully, particularly in the U.S. and Europe. So you should keep this in mind as you're looking out over the rest of the year.

Assuming the euro trades around the 130 level and the Brazilian real around the 175 level for the rest of the year, we continue to expect about a 2 to 3 percentage point headwind to as-reported net revenue, net income and EPS growth for full year 2012. Based on our current plans for 2012 strategic investments, we continue to believe that we might have an opportunity to deliver some operating margin expansion this year. However, the amount of any improvement will depend on several factors, including global economic conditions and investment opportunities that might surface during the year. Our plans currently call for G&A growing at a higher rate than advertising and marketing expense. We also expect our depreciation and amortization to grow by roughly $30 million this year as a result of our strategic investment activity. And as I said at a conference earlier this year, other income and expense should be negative for the year, driven by anticipated equity losses associated for the 2 Telefónica JVs in Latin America, which are typical in the early stages of many JVs, especially in these new spaces. Also remember that our cash is held in extremely safe and liquid investments, which currently offer de minimis yields.

Turning to the tax rate, we now believe that we could see a full year tax rate of around 31% versus our previous expectation of slightly below 32%. This is due to certain tax planning initiatives from which we expect to recognize some benefits that were not previously anticipated, along with a likelihood that some local tax examination could result in a onetime benefit to our 2012 full year effective tax rate. So for modeling purposes, you should not assume that all of the benefit in the tax line drops to the bottom line since we would opportunistically look to reinvest some of these savings back into the business.

Finally, we remain focused on our objectives for the 2012 to 2013 period of a net revenue compounded annual growth rate of 12% to 14% and minimum annual operating margin of 50% and an earnings per share CAGR of at least 20%. These objectives are all on a constant currency basis and exclude any new acquisitions. Now let me turn the call back to Barbara to begin the Q&A session. Barbara?

Barbara Gasper

Thank you, Martina. We're now ready to begin the question-and-answer period. [Operator Instructions] Pam?

Question-and-Answer Session

Operator

[Operator Instructions] And your first question comes from the line of David Hochstim with Buckingham Research.

David S. Hochstim - The Buckingham Research Group Incorporated

I wonder -- yesterday, the federal reserve board put out some updated data on debit interchange. And I wondered if you could comment about their observation that network fees made by large issuers seem to have declined from 2009 to the end of 2011. You didn't -- obviously, you didn't talk about acquirer fees or any other pricing changes you've made. Your pricing's held up, but I just wonder if you have any comment on what the fed seems to be suggesting.

Martina Hund-Mejean

David, I'm going to take that one. First of all, as you said, the results were only released yesterday, so we're still working through the details in terms of what was really released. But when we're looking at the published network fees, there seem to be some potential disconnects in the comparisons, and we want to understand those before we draw any conclusions. So I'm going to give you a couple of disconnects that we need to understand. So first of all, the fed compared the network fees in the fourth quarter of 2011 with full year 2009. As you know, any fourth quarter is usually a high-spend quarter. So issuers will pay effectively lower fees since core fees are tiered based on volume. We can't really compare a fourth quarter to a full year, and that's one thing we're just going to have to deep dive into it more. The second thing is the fed had actually requested different categories of network fees for each of these periods. So the calculation and the comparison of the pure cost transaction is unclear. In 2011, I can tell you the fed had asked the networks to provide only off-tier [ph] settlement fees. And back in 2009, we provided all fees collected on a transaction. So therefore, the network fees that have been compared in the report might be apples and oranges. The last thing I want to tell you is that we have actually not changed our fee structures to issuers on the debit business. In fact, as you know, in every quarter, we are going after our business very surgically and opportunistically. And we're signing deals, both signature deals and PIN deals in every quarter, and quite frankly, you can see those results in our numbers today. So a lot more to clarify, but I told you as much as we know at this point in time.

Operator

And your next question comes from the line of Chris Brendler with Stifel, Nicolaus.

Christopher Brendler - Stifel, Nicolaus & Co., Inc., Research Division

I just wonder if you could give us a little more detail, little more color on the U.S. process transactions growth. I think you said it was above or globally above 30% in April and some benefit from the April 1 exclusivity provision. Can you give us any color on what your U.S. volume looks like in April on a process transaction basis and where you're seeing those gains?

Martina Hund-Mejean

Look, April is very similar to the first quarter, but it's a higher growth rate, right. So the growth rate in first quarter was 29%. In April, we're seeing 32%, and the growth is both benefited by what's happening in the United States, as well as The Netherlands but very, very typical trend. In the 29%, by the way, that we saw in the first quarter, we believe that a fairly significant portion probably in the neighborhood of 13 percentage points is due to new deals and really adds to what we need to be doing in the market. April is not shaping up any different, it's the same, just continue to get the business.

Christopher Brendler - Stifel, Nicolaus & Co., Inc., Research Division

I guess my focus was more on the PIN debit business and how much that's moving the needle in April?

Martina Hund-Mejean

Again, as I said before, it's very similar to the first quarter. April is just an extrapolation for what happened in the first quarter. We're seeing more PIN business.

Ajaypal S. Banga

You just got to remember that the -- a lot of the cards that got enabled for PIN didn't get enabled in the first day of January. They kind of got enabled over the course of first quarter. So over the next 2, 3, 4 quarters, you will get moving around on the PIN debit transaction growth because you will get cards coming on, but you'll also see routing changes as merchants and acquirers respond to what issuers, networks do. So it's going to be a little bit of in and outs for the next few months, and that's how we think about it. But our first task, as we said, was to get onto these cards and be enabled on them. That's what we've been trying to do over the last few months. And our next task is to try and surgically manage as much of that routing as makes economic sense for us. That's kind of how we're approaching this business.

Operator

And your next question comes from the line of Bill Carcache with Nomura.

Bill Carcache - Nomura Securities Co. Ltd., Research Division

Question on your EMV initiative. What kind of merchant pushback are you getting, if any? And what do you see as some of the hurdles to completing the migration by the 2015 liability transfer date that you've established?

Ajaypal S. Banga

All right. So Bill, the fact is the way we went about EMV was that we actually created a consultative process with a ton of merchants, issuers and acquirers, and had them come in together and talk about what's involved in saying that EMV should happen as compared to just mandating it, which we felt would have been one way of doing it, but probably not the best way to get so many people together on the same page. And thus far, by and large, the reaction of the roadmap has kind of been sort of the same consistency of we've got to make sure that we can get this done. We've got to make sure that the investment that goes into it make sense. We've got to -- there's a lot of moving parts around how it will actually get implemented. What we did was we created a set of incentives for merchants and issuers to use the most secure verification methods, and we created a sliding scale on that security angle. So the more secure your verification as an issuer or as a merchant, the liability shifts and the incentives go towards that party. And that's what they're trying to work their way through and understand and work with. And so frankly, right now, what we've got is a good dialogue going on. At this early stage, you expect some issuers, some merchants, to go in slightly different directions, and that's what we are seeing. But in truth, when they come together, we have a healthy dialogue. They kind of come around saying, "Makes sense, right thing to do. It gives more security." The question is if they're incented, it makes it easier for us to do it, all that have been factored into the way we've constructed our EMV strategy. But it's very early days, and it's going to take a few quarters to work its way through the way we actually deliver what they're going to say they will deliver.

Bill Carcache - Nomura Securities Co. Ltd., Research Division

Okay. And can you talk about how we should think about the economic impact to your P&L given that EMV economics -- our understanding is they're PIN-debit-like? How should we think about that? And that's it.

Martina Hund-Mejean

So first of all, just because by the implementation of EMV, you should not be jumping that everything goes to PIN economics. For instance, EMV has been rolled out in a significant way in Europe, and you have -- there's absolutely no difference from a signature credit PIN point of view, for instance, from a pricing. So you cannot analogize EMV everything goes to PIN pricing. It does not.

Operator

And your next question comes from the line of Bryan Keane with Deutsche Bank.

Bryan Keane - Deutsche Bank AG, Research Division

What's been the impact on the market on Visa's new merchant pricing initiative and maybe you can update us on the strategic direction MasterCard plans to take due to what Visa's doing on merchant pricing?

Ajaypal S. Banga

So Bryan, it's Ajay. And I -- in truth, you've got to ask you Visa what they see as the response from merchants to that. From our perspective, it's very early. I haven't seen much happen. There's -- remember, the first quarter was where all this is being constructed. It's really over the next few quarters, as I said, in response to an earlier question, that these routing transactions will become clearer. And as I've said a couple of times now, our focus is going to be on making sure that we operate strategically and surgically to try and keep those routings with us to the extent we can and to the extent it makes sense economically. The -- we did the same thing with getting ourselves on the back of issuers' cards. We're going to do the same thing with working with merchants and acquirers on the routing. So it's early stages. That's where it is today.

Bryan Keane - Deutsche Bank AG, Research Division

Okay, just a quick follow-up. Any update on the mercenary exchange litigation settlement? I know we have a trial date set that's coming up here in September.

Ajaypal S. Banga

No, nothing new at all there, nothing new. No change to our views, by the way.

Operator

And the next question comes from the line from Darrin Peller with Barclays Capital.

Darrin D. Peller - Barclays Capital, Research Division

Over the past few quarters, we've seen obviously Huntington, Sovereign, Swedbank and then in Europe, Italy and Netherlands, and then PIN debit wins among others. I think you mentioned Italy and now Ireland actually, which sounds a little newer. Can you just help us understand the opportunity actually in Ireland? And then more longer-term and just overall, are these opportunities similar to what we've seen in The Netherlands and obviously in Italy? And how long is this runway? And then lastly, is there other conversions like the Huntington or Sovereigns that we can expect in the near few quarters?

Ajaypal S. Banga

So the fact is that we had a lower market share in some of these markets, as you know, and that's what we are basically trying to win back deals in. The Ireland deal win is the beginnings of what we hope will turn our business around Ireland, but it's going to be a 2, 3, 4, 5 year slog because typically, deals with the other banks have signed up with competitive brands for certain number of year at a time. So I kind of tend to view these as building blocks, and I tend to view our business and approach to selling in these countries as building the right relationships, bringing value to these clients and starting to win small business and the ones that have large business tie-ups with competitors, and then wait for our opportunity to get a bigger deal with them. That's true of every market around the world. What you're seeing in us in the last couple of years is an engagement with issuers and merchants both -- both financial institution issuers and non-FI issuers, as well as merchants around the world to build our position and our relationship with them. So we're in the right place, we're trying to take advantage of opportunities as they come up. It's nothing more strategic or rocket science than that. It's global fashion selling. Now, as far as what's going on in The Netherlands is concerned, The Netherlands in particular was a large, onetime switch of the way in which those transactions are processed from a local debit switch to us. Now that's giving us a lot of benefit in lap. We're working on other such things in SEPA, as a whole, in the European area, our -- actually our transactions seen are up 280% over the prior quarter, which by the way, is similar to the number in the prior quarter. The fact is we are beginning to see transactions in France and Belgium and Germany and Italy, not with the same kind of impact as The Netherlands mass movement, but we're beginning to see them. So I think we are on the spot of building our business brick-by-brick and deal-by-deal, and what we're getting is the result of that. So I wouldn't conclude that there's some dramatic thing that's going to happen tomorrow, neither would I conclude that the runway is nearing anywhere near an end. We've got a lot of market share to gain and bigger than that, we've got this whole fight against cash, which is where our real growth is coming from. So we've got both things to do here, but it's going to take years to fulfill that strategy.

Operator

And your next question comes from the line of Sanjay Sakhrani with KBW.

Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc., Research Division

I guess when I look at the rebates and incentive lines, I look at it relative to gross revenues. That percentage was up like 100 basis points to 25%. Can you just talk about how much of that increase was driven by wins versus renewals, and then how we should think about that line going forward?

Martina Hund-Mejean

Sanjay, first of all, a lot of this was actually driven by the volume increases that we had. So the business has increased. So obviously, with volume increases, you're paying more rebates out, and then a smaller portion of that was related to new and renewed wins. I'm not going to break that up for you. But again, yes, you didn't see an increase in this quarter. I also said in our thoughts of 2012, we -- and as Ajay was just saying, we are running after other deals. And depending on when they come through, in which quarter, you will see some changes to rebates and incentives. But I know you guys have a love for looking at rebates and incentives as a percent of growth. I -- look, in 2010, the contra as percent of growth was actually 27%. It was 25% in 2011. It's now a little higher. As you can appreciate over the last 5 to 6 years, first of all, it will jump around by year, depending on what kind of deals we do and what the volume development is in that particular year, and you have the same kind of phenomena also on the quarterly basis. So all I want to tell you with all of these is there is nothing to read into this. This is just us going after the business the right way.

Operator

And your next question comes from the line of Tom McCrohan with Janney.

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

Can you help us quantify how much of your revenues today have already benefited from your increased penetration in the U.S. debit business as a result of Durbin? And then looking ahead, can you help us quantify what you see to be the incremental revenue you expect to pick up? I know it's hard to -- there's probably going to be a range based on your execution of getting your brand put on a lot of the issuer debit cards here in the United States. So just trying to get a revenue impact from all of these activities.

Martina Hund-Mejean

Look. I mean, the only statistics that we have from a revenue perspective out there on the debit side is that at one point in time, we told you that debit is about, what, 14% of revenues. It's a little lower at this point in time, 13% of revenues, but that's just because of how actually our overall business has been growing both in the United States on the credit side as well as overseas outside of the United States. So revenues are growing in the debit business. And as you can see from Ajay's remarks earlier this morning, we're winning very nicely both from a signature, as well as from a PIN share point of view.

Ajaypal S. Banga

I'll give you this little additional thought around this, but I'm not going to make a prediction going forward on what I think revenues could be from PIN debit because of 2 reasons. One is I don't like making those predictions and two, I'm genuinely unsure of how routing will play out over the next few quarters. So I actually haven't really got a lot of revenue built in from there in my expectations. But you have to remember the dynamics of this revenue. PIN revenue in the United States is a low-yield business. And by low, I mean substantially lower than the other yields we have. The only good deals is because they're leveraging our fixed cost infrastructure for driving this volume even though its billions of transaction incrementally. The good news is that the profit yield from these transactions is still attractive to our company. And so we look at it that way that our revenue yield will probably be small, but our profit yield will be attractive enough for us to keep going after it. But it's difficult to predict, given that we've just completed one part of the chessboard game, which is the getting ourselves on the back of the issuer cards. The second part is going on right now with the merchant acquirer incentive play. And then there will be the third part that will come in a year or 2, which will be the increase in payments towards EMV, which will also change this mix a little. So I kind of view this as interesting, nice to have, worth showing that we can bid our share on it, but kind of move from it. There's a lot more going on in our business that has greater revenue impact than just the PIN debit business in the United States.

Operator

And your next question comes from the line of Patrick O'Brien with Brown Advisory.

Patrick O'Brien

A couple of questions. Your tax rate is going down quite a bit over the years, I guess, as the earnings from lower tax jurisdictions become more important. Is that cash now trapped in low-cash, low-tax environments, or do you have a policy for repatriating it?

Martina Hund-Mejean

Okay, Patrick, it's Martina. So let me take that. First of all, yes, your observation is absolutely right. We have been working on our tax rate quite considerably. There are number of factors that you work on from a tax planning point of view, one of which is obviously which -- the one that you were referencing. You make earnings in lower tax jurisdictions. It's lower tax there to the extent you can actually lock those earnings into those jurisdictions, and then you have the whole issue of how can you bring the cash back. I have to tell you we are in a very early innings of this game. MasterCard essentially was a 2-country kind of company: United States, as well as Belgium and Europe, and we've been diversifying quite significantly from that. You might -- when you read our annual report as well as our Qs, you might be able to pick up that we've been actually trying to make sure that our Asia Pacific/Middle East/Africa business get recognized as such, doesn't get run back into the United States, but gets run into Singapore, where we obviously negotiated a great tax agreement with the Singaporean authorities. And over time, and this will take a long time, we will be having the benefits of those kind of structure. At this point in time, we have mostly cash sitting in the United States, as well as in Europe. We have not built up a significant amount of cash in other jurisdictions and with the way that we built up our structure for the foreseeable future, so let's say for the next few years, I see absolutely no restrictions on being able to utilize the cash wherever we need to utilize the cash in the world, be it for what we're doing at the moment from a share repurchase program point of view or, at some point in time, acquisitions.

Patrick O'Brien

You suffer a tax consequence for using that cash in a low-tax jurisdiction?

Martina Hund-Mejean

What I wanted to tell you is at this point in time, I don't have that tax consequence because we put some planning strategies in place, as well as we are only in the early innings of actually pushing earnings out to lower tax jurisdictions. So it's going to take some years to be building up cash in those lower tax jurisdictions, and then it's going to take some time for us to ever having to use those -- that cash somewhere else.

Ajaypal S. Banga

The only thing I'd add to that is think about what those jurisdictions are. We are investing a lot of time, effort and energy into building our footprint across Asia, and in Singapore is the hub of where we're putting a lot of this. And in truth, I see a lot of opportunity for growth in that part of the world over the next 2 years. So in fact, if that cash were to be there, I believe it will give us some opportunity for adding to our footprint and our franchise through an acquisitive nature of growth in that part of the world. So I think there's going to be opportunities to use that right now. We're fortunately at very early stages of this. So as Martina was trying to tell you, we are in a type of stage where we have this as an issue. We actually see this as a big opportunity for our company over the next 4, 5 years.

Operator

And your next question comes from the line of Donald Fandetti with Citigroup.

Donald Fandetti - Citigroup Inc, Research Division

Ajay, I just talked to the bank issuers on the card side, they clearly seem to be struggling with some regulatory issues from the CFPB and others. I'm just curious on your thoughts in the U.S. It seems like a pretty good environment for you right now. Is there anything percolating? Or do you generally feel pretty about the good environment from a reg standpoint?

Ajaypal S. Banga

Yes. Well, I -- the fact is that -- I can tell you what my perspective is as the MasterCard guy talking to these banks. I think they're all going through the early stages of trying to figure out their new P&L and its construct, given all the regulatory changes. And you know those regulatory changes extend way beyond the card business to very fundamental things and the way the money center banks are constructed, how their capital is used and what they can do with it. So I think they're all going through that phase right now. In our specific space, the fact is the payments industry probably becomes a little more interesting in terms of its capital utilization for banks over a period of time. So they have also realized, as we all have, there's an opportunity to grow there. How they grow and how they construct that growth is what they're all working their way through. So it's actually good discussion. I feel that these are discussions that are -- that changes stuff for them. But eventually, coming out of this 1 year or 2 down the road, I suspect we'll all be in a better place, and that's what I'm hoping for. So we are engaged in a constructive, practical way on payment strategy with a number of banks in the U.S. and elsewhere. That's kind of where I am right now.

Operator

And your next question comes from Moshe Katri with Cowen.

Moshe Katri - Cowen and Company, LLC, Research Division

Just maybe focusing on credit trends. I think Martina, you said that credit trends in the U.S. remain stable. I think from a gross dollar volume perspective, they're up maybe 6%, 7% for the quarter or similar to last quarter. Rest of the world looked better, globally, it looked better. What do you think we should kind of look for, for the remainder of the year?

Martina Hund-Mejean

You asked again a good question, right. So this is always tough to do. I think you have to put it into the context of what we said about the economic environment. We are very much focused on making sure that we understand where consumer confidence is, what's happening on the unemployment rate, what's happening on housing starts. We're, obviously, feeling relatively good, what we've seen in the first quarter. But this has to persist for the rest of the year in order to have these kind of growth rates coming in. The other issue that you're going to have to think about is, look back to the last 3 quarters, in particular, the last 2 quarters in 2011. Those had already some fairly healthy rates. The credit growth in the United States in the third quarter and the fourth quarter of 2011 were 7 percentage -- 7% each. So I would suggest to you that there might be a bit of a tougher comparison coming in. And that's why we also said when we talked about our revenue growth, don't just take the first quarter revenue growth and chart it out for the rest of the year.

Moshe Katri - Cowen and Company, LLC, Research Division

Do you think it's too early to say that this is an inflection point on the credit side? Or as you said, we have to keep on looking at that environment?

Martina Hund-Mejean

I think we have to look at it. I think it's far too early to say that there's an inflection point on the credit side.

Ajaypal S. Banga

A lot depends also on the specific institution and its appetite right now. You will see that for the last few quarters, different banks and institutions have moved differently in terms of acquiring new credit cards. Some that were very aggressive till a couple of quarters ago have slowed down. Others have moved up. I've seen that happen with a number of issuers. So I think it's still moving around, and it's connected a little bit to Don's question earlier about how the banks are looking at the payments business. So it's not -- it's a bit tough to declare this as an inflection point yet. I look at all the banks. I look at their delinquencies improving. I look at early-stage delinquencies coming down. So I think about all of that change in their portfolio. And I think about the fact that they do want to grow their revenue. But it's based on the risk appetite, but they need to get into a place, depending on how the regulatory capital needs move around and then across their entire franchise. That is happening as we speak. So tough to say it's an inflection point, but it is not in bad shape. April is the month where you see all the consumer spending. That's the time we know how April did, but 1 month does not a quarter make and does not a trend make. And I said March was a good month. 11 out of the 11 retail sectors were positive, by the way, so was February and that is not the case in January. So if that's anything to go by. Remember, February also has a little benefit of an extra day, which is 1 day out of 90 is more than a percentage point of growth for a company. So you've just got to factor all that in, and not conclude yet that we're at that inflection point. That's how I see it.

Operator

And your next question comes from the line of Marc Lombardo with Meredith Whitney Advisor.

Marc Lombardo - Meredith Whitney Advisory Group LLC

I just wanted to hear if there was a restatement on the split of debit and credit for Rest of World volumes and if there was, just what the motivation was around this?

Martina Hund-Mejean

I'm sorry, can you repeat that question? You were very faint.

Marc Lombardo - Meredith Whitney Advisory Group LLC

Yes, so just wanted to hear if there was a restatement on the split of the volumes for credit and debit for the Rest of World?

Martina Hund-Mejean

I'm not sure what you mean about restatement.

Marc Lombardo - Meredith Whitney Advisory Group LLC

So the split from fourth quarter volumes of $405 million for worldwide for credit and charge. When we look, this quarter is now $384 million for GDV.

Martina Hund-Mejean

I don't understand what he means.

Barbara Gasper

There hasn't been any restatement.

Martina Hund-Mejean

No, there hasn't been any restatement. There hasn't been any change whatsoever. Are you looking at local rates? Because you got to have to look at the volume growing in a local way not on U.S. dollar because U.S. dollar is distorted, obviously, by the foreign exchange impact. But there has been absolutely no change in terms of how we're reporting it. And look, maybe we should take that off-line, Mark. So if you can -- we can call you.

Barbara Gasper

We'll get in touch with you.

Martina Hund-Mejean

Yes.

Operator

And your next question comes from the line of Craig Maurer with CLSA.

Craig J. Maurer - Credit Agricole Securities (USA) Inc., Research Division

Just had a question for Ajay regarding what's going on in the U.S. It seems to me that the U.S. issuers have a complete disconnect versus with merchants and the way U.S. issuers are strategizing around their rates and their product emphasis is in complete opposite of what retailers are thinking about, which is pushing large retailers to again discuss their own payment system. I was wondering how you talk to issuers about being more retailer-friendly or else this might become the type of issue that eventually comes back to kill their own business if they don't be careful.

Ajaypal S. Banga

Craig, boy, you chose to put a grenade on the table, which I'm trying to figure out what the -- so here's the thing with that. I think that this disconnect is more is made out of it than is true. At the end of the day, in most of these banks, there is -- the fact is that merchants have got one perspective in growing their revenue and their P&L. And at the other end of the pipe is the bank that's trying to grow its revenue and P&L. And all that happens is the natural tension of the 2 opposing views between these parties. I actually think a number of the banks and issuers have built reasonably good relationships with some of the big merchants over the last few years. They're doing a lot of promotions together. They're doing a lot of things together. But the fact is that the economic value of what's involved in the payment system is a constant matter of interest to merchants, as well as to the banks, and so there's always some hustling going on there. But even we ourselves have been in regular contact with a series of merchants over the last few months, and I haven't seen anything new in that dimension compared to what it used to be 1 year or 2 ago, but it's the natural tension that you're referring to between those 2 constituents of the payment system. So that's kind of what's going on there. I don't think there's anything more than that.

Operator

And your next question comes from the line of Glenn Fodor with Morgan Stanley.

Glenn Fodor - Morgan Stanley, Research Division

Ajay or Martina, whoever wants to take it, since the Durbin regulation went into effect, you've done a very good job of winning PIN business. But if you had to apportion the wins that you got, can you characterize for us how much of -- what percent of them were you winning, all the business -- PIN business outright versus just a portion of it being just the second mark on the card?

Ajaypal S. Banga

So we aren't at liberty unfortunately to tell you that because every single issuer is being cautious and careful in this environment about how this is explained and talked about. Remember, they don't have to reissue the cards with the brands at the back, and so everyone's on that statement right now. So unfortunately, I don't have the liberty to tell you that. We've got a mix of both. We've got a mix of deals where we are the only PIN brand at the back, and there are deals where we are an additional PIN brand at the back along with other PIN brands. I just am not at liberty to tell you what the break up is.

Glenn Fodor - Morgan Stanley, Research Division

Sure. Fair enough. Just switching to -- just some color on investments. It's clear you're still investing. This is what people want to see. But investors also want to be able to characterize the go-forward trajectory, the pay-off of those investments, and how it's going to contribute to revenues and margins. So can you give us perhaps a view on fiscal '13? I guess, every year has a certain amount of revenue growth that's attributable to investments that were made, say, in the last 2 or 3 years, so some of those are now going to be paying off in '13. So is the contribution of growth investments in '13 going to be, say, bigger than it might have been in '11 and '12? Or is it kind of like an average year? How should we think about your investments today and when they're going to be paying off?

Martina Hund-Mejean

So Glenn, thanks for trying on this one. Well, first of all, I mean, you obviously know that for 2012 and 2013, on a combined way of compounded annual growth rate for net revenues, we said 12% to 14%, right? So in the 12% to 14%, we obviously have to make our judgment of how much our newer investments would be contributing to the top line. And I think you have heard me lay out before, many of you heard -- that we have investments in the category that are more shorter-term investments, return investments, mid-term investments and longer-term investments. So for instance, when we invest into the commercial business or in the prepaid business, we probably get a payoff over an 18- to 24-month period. So of course, you should be seeing in 2013 some contribution of these kind of investments. Conversely, when we go to the longer-term, such as for instance, the mobile investments that we have been making, we've been very public out there that we might not be seeing a return for 4 or 5 years, okay. So we obviously wouldn't be putting a lot of that into our revenue lines for 2013. But I think that's how you're going to have to think about it. And when we put out in a public way our net revenue growth like we did for the next 2 years, the 12% to 14% is basically recognizing the investment and how it might come to fruition from a return point of view over time.

Operator

And your next question comes from the line of Julio Quinteros with Goldman Sachs.

Julio C. Quinteros - Goldman Sachs Group Inc., Research Division

I wanted to just check in on a couple of quick things on the expense trends for the year and also the joint venture losses for the rest of this year, just how to think about the seasonality of any of that? Or if there's anything unusual that you'll be rolling on, rolling off?

Martina Hund-Mejean

Well, let me take the last one first because, obviously, when you look at the other income and expense line, it will be tracking differently than what you have seen in the prior years because we are charting the investments that we are making in the joint ventures in Telefónica in there. So you see, almost $1 million negative in Q1, which has a number of components in there, right. It's not just the Telefónica JV. You have what's happening from an interest, income and expense point of view, et cetera. And basically, you should be taking this forward and you should be thinking about negative numbers, a bigger magnitude as the quarters go along because remember, we only started the investment in the joint venture for Telefónica in Brazil very recently, right. So you're going to have -- you have to recognize that every quarter, we'll be investing a bit more. So this will be a negative trend. From a G&A point of view, I am not sure if I can say more. What we basically said is you will -- you should expect some growth in G&A for sure. I think we gave you a little bit of the split in the first quarter, so that you can analyze Access Prepaid, right, which was 5 percentage points out of the 17, so the 12 was kind of the baseline. You will continue to see some increase in G&A. Remember, we hired about a little over 1,000 people back in 2011, of which around 400 people or so Access Prepaid. So organic hire was 700 people. That's kind of a 12% increase on our headcount, which has to work its way through the personnel line. So, you're going to have to look at that. And then for advertising and marketing, we definitely said that, that will be a lower growth rate than G&A. It will be just slightly higher than what you see in 2012 -- in 2011, sorry.

Julio C. Quinteros - Goldman Sachs Group Inc., Research Division

No impact from the Olympics or anything along those lines to think about...

Martina Hund-Mejean

What you might see of us, and this why we are not giving you the quarterly cadence. We're moving some monies around, obviously, quarter-over-quarter, depending what kind of activities are happening in the world where we want to participate.

Operator

And your last question comes from the line of John Williams with UBS.

John T. Williams - UBS Investment Bank, Research Division

Just a quick question, Ajay. I know you've mentioned a couple of times you've seen positive trends in the 11 spending categories. I just was hoping you might be able to provide a little color on what you've seen perhaps among the high-end, the luxury categories, the shift, credit versus debit, or perhaps nondiscretionary versus discretionary?

Ajaypal S. Banga

Yes. John, I haven't seen a lot of shift in credit versus debit in total because I think that's still early days, and I'm not sure that there's any great trend coming out of that yet. Actually, I haven't even seen a big shift between PIN and signature other than the fact that our own volumes, because of the PIN deals we have won over these last 2 months, are moving around a little bit. But your question is more about the market and the consumer as a whole rather than MasterCards, per se, right? So I haven't seen any great moves on that. What I would tell you is that what's really been interesting, I've been tracking SpendingPulse for the better part of 2.5 years now because I have a frequent call with some really interested parties, who take this information from us and use it as part of their decision-making process in various governmental bodies. And it's fascinating what's happened over the last 6, 8 months -- 6, 7 months ago, hardware, electronic, stuff that had to do with home improvement were actually languishing in pretty negative territory. In the last few months, that has moved to the point where now those are actually the growth areas, and that tells me that people are either using that to reinvest in renovating their homes or they're putting it into their homes that they are buying and it kind of links up with some of the things you're reading about some activity improving in home building and home buying, still not showing up in the prices of homes, but has it bottomed out. So that's the first thing I'm seeing there. The second thing I'm seeing is that in luxury goods, jewelry, fine dining, slightly different trends. Luxury goods and jewelry were doing well. Jewelry is moving around a little bit, a bit depends on festivals and stuff like that. But mostly luxury goods were doing well. Fine dining, on the other hand, has moved through cycles, where they're in great shape, and then it's taking a beating. It's actually taking a beating recently again, but casual dining and family dining has come back up on that growth rate. So it's kind of moving around on us a little bit, and I don't yet have a good trend on that aspect.

John T. Williams - UBS Investment Bank, Research Division

That's super helpful. Just one other question on -- Martina, I think you had mentioned Europe's process volume had come down by a couple of percentage points. I just wanted to make sure you weren't specifically saying 2% or anything like that. You were just giving kind of a general direction there, right?

Martina Hund-Mejean

You're assuming?

John T. Williams - UBS Investment Bank, Research Division

Yes, correct.

Martina Hund-Mejean

Yes, yes, I was just right. Well, look, I can give you the numbers, right? So Ajay was saying 19% growth in Europe for the first quarter. When you actually do the analogous process volume calculation, as we do it, it's about 17%. So the 19% is equal to 17%, and what we are seeing in the first quarter of -- what we are seeing in April is about 15%, which is -- so it's a very healthy growth rate, let me tell you, 15%, that is a couple of percentage points below what we are seeing -- what we saw in the first quarter.

John T. Williams - UBS Investment Bank, Research Division

Have you directionally given what an equivalent same -- I guess, cards sales metric would be in terms of x-ing out the impact of perhaps the new portfolios that you've signed?

Martina Hund-Mejean

Well, I think, no, we have not.

Ajaypal S. Banga

No, we haven't, but I can tell you little bit. If you look at things like SpendingPulse, you can come to conclusions pretty quickly, about what's going on at the core versus new business. And very similarly in Europe, spending is actually holding up. What happens, as I've said about Europe very often, in the global days, Europe never went crazy with spending, and now there is -- they have a far more stable pattern on saving and spending in Northern Europe. Southern Europe can be a little complicated and can move a little differently from Northern Europe. In our company, it's interesting, but a majority of our European business, because of the way it was constructed from its beginning, as well as the acquisition of Europe peers that happened along the ways some years back that our predecessor have done. We've actually got a mix of volume that comes more from Northern Europe than from the Southern European countries, which actually have seen us have a more stable pattern over the course of this last year or so. Now, the other good news is we are winning deals in some of those Southern European markets. So even if Spain and Greece are slowing down, that's where the Ireland, Italy angle came from. So we've got a mix of portfolio changing, along with the nature of the business on how consumers are spending in Europe. But essentially, consumer spending as a whole in Europe is holding up, and consumer confidence as a whole in the first quarter actually held up. Now it moved differently. Germany went up. The U.K. went up. Spain and Greece went down. But Europe, as a whole, held up. That's actually public data on consumer confidence that you can get from the Nielsen guys, which I just saw again the other day. Thanks a lot for your questions.

Operator

And with no further questions in queue, I would like to turn the call over to Mr. Ajay Banga for closing remarks.

Ajaypal S. Banga

So let me leave you with just a few closing thoughts after those set of questions. We are off to a good start for 2012. We have made some really solid progress, particularly, as we've all been discussing in our U.S. debit business. But of course, there's more to come there. Just remember that any incremental PIN debit transaction come at a lower-than-average yield, though with good profitability and things are moving around with the routing. Remember that as Martina mentioned, our first quarter net revenue growth rate will not be a representative run rate for the balance of the year. That's because we will be faced with more difficult comparisons as the year progresses, as well as several items that lap, which by the way, contribute to the difficult comparisons, including the Access acquisition and several new business wins that we had over the course of the previous 2 years that came up with cards in this period last year. I also want to remind you that there is the potential for us to increase our level of investment, depending on how much room we have in our P&L. That room could come from things such a stronger than expected top line growth or the potential lower tax rate that Martina mentioned. There is no shortage of growth opportunities in this business, and we want to evaluate as many as we can. We will act on the ones that provide the best potential for maximizing our long-term growth and let anything left over drop to the bottom line. Net, we're working hard to deliver another good year and meet our performance objective. Thank you for your time today, and thank you for your interest in MasterCard.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a great day.

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