Slide 1: Third-Quarter 2010 Financial Results Conference Call
MasterCard Incorporated Thi d Q Third-Quarter 2010 Financial Results Conference Call November 2, 2010
Slide 2: Business Update
Business Update • Economic Overview • Regulatory Update • Business Highlights 2
Slide 3: Quarter Selected Financial Performance
3rd Q Quarter Selected Financial Performance ($ in millions, except per share data) 3Q 2010 3Q 2009 YOY Actual Actual Growth % Net revenue $ 1,428 $ 1,364 4.7 Total operating expenses 662 691 (4.1) Operating income 766 673 13.6 Operating margin 53.6% 49.4% 4.2 ppts Net income $ 518 $ 452 14.6 Dil t
Slide 4: 3rd Quarter Gross Dollar Volume (GDV)
3rd Quarter Gross Dollar Volume (GDV) 800 Worldwide 8.5% Growth 700 $685 $636 600 Rest of World $237 14.9% Growth ns) $212 GDV (in $billion 500 $445 400 United States $392 1.7% Decline $128 $100 300 $244 $240 $425 $449 200 $112 $108 $292 $317 $ 100 $133 $132 0 3Q 09 3Q 10 3Q 09 3Q 10 3Q 09 3Q 10 Cre
Slide 5: 3rd Quarter Processed Transactions and Cards
3rd Quarter Processed Transactions and Cards Processed Transactions Cards 0.6% Growth 0.8% Growth (12.9% excl. deconversions) 6,000 2,000 1,800 1,597 1,609 5 000 5,000 1,600 Trransactions ((in millions) millions) 1,400 4,000 651 654 1,200 Cards (in m 3,000 1,000 5,785 5,822 800 2,000 600 400 946 955
Slide 6: 3rd Quarter Revenue
3rd Q Quarter Revenue ($ in millions) $1,800 • Net Revenue increased 4.7%; 3Q 2009 3Q 2010 $1,600 $1,364 $1,428 or 7.3% on a constant currency $1,400 $1,200 basis $1,000 $800 $603 $672 $541 $546 $550 $600 $386 • Domestic Assessments $400 $192 $200 $187 increased 11.4% $0 -$200 -$400 • Cross Border V
Slide 7: 3rd Quarter Operating Expenses
3rd Q Quarter Operating p g Expenses p ($ in millions) • Total Operating Expenses 3Q 2009 3Q 2010 decreased d d44.1%; 1% or 22.6% 6% on a constant currency basis $800 $700 $691 $662 • G&A decreased 6.7% primarily due to decreased personnel costs $600 $500 $475 $443 • A&M increased 4.7%; or 6.2% on $
Slide 8: 3rd Quarter 2010 Cash Flow Statement and Balance Sheet Highlights
3rd Quarter 2010 Cash Flow Statement and d Balance B l Sh Sheett Highlights Hi hli ht • Generated $589 million in cash flow from operations for the quarter ended 9/30/2010 • Cash, cash equivalents and other liquid investments of $3 $3.6 6 billion at 9/30/2010 8
Slide 9: Thoughts for 2010
Thoughts for 2010 • Net Revenue • Total Operating Expenses – General & Administrative – Advertising & Marketing • Tax rate • Net income growth 9
Slide 10: MasterCard Worldwide: The Heart of Commerce
MasterCard Worldwide The Heart of Commerce”
Slide 11: Cross-Border Pricing Change
APPENDIX A Cross-Border Cross Border Pricing Change ($ in millions) Simplified structure with no Net Revenue impact Adjusted View [1] As Reported B/(W) B/(W) Q1 2010 $ % growth $ % growth Gross Revenue 1,683 12.7 1,748 17.1 Rebates & Incentives (375) (11.3) (440) (30.7) Net Revenue 1,308 13.1 1,308
Slide 12: Net Revenue - U.S. vs. Rest of World
APPENDIX B Net Revenue - U.S. U S vs. vs Rest of World 2006 2007 2008 2009 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Historic Treatment U.S. % 52.3% 49.7% 47.2% 45.5% 50.1% 47.5% 44.7% 46.7% 48.4% 49.0% 46.5% 38.2% 44.2% 45.3% 43.4% ROW % 47.7% 50.3% 52.8% 54.5% 49.9% 52.5% 55.3% 53.3%