Mastercard Incorporated · NYSE:MA
Mastercard — Q3 2006 Earnings Presentation
12 slides from Mastercard's earnings presentation, Nov 1, 2006
Slide 1: MasterCard Incorporated 3rd Quarter 2006 Financial Results Conference Call
MasterCard Incorporated 3rd Quarter 2006 Financial Results Conference Call November 1, 2006
Slide 2: 3rd Quarter Financial Results
3rd Quarter Financial Results • Delivered net income of $193 million and earnings per share of $1.42 • Achieved strong revenue growth of 13.9% primarily due to: – Gross dollar volume growth (15.0% to $502 billion) – Increased processed transactions (18.9% to 4.2 billion) – Restructured cross-border
Slide 3: 3rd Quarter Selected Financial Performance
3rd Quarter Selected Financial Performance ($ in Millions, except percentages and per share data) 3Q 2005 YOY adjusted for % Growth 3Q 2006 special items Rate Net Revenue $902 $792 13.9 General and Administrative 393 331 a 18.7 Advertising and Market Development 209 219 (4.6) Litigation Settlements
Slide 4: MasterCard Branded Volume (GDV) Third Quarter 2006
MasterCard Branded Volume (GDV) Third Quarter 2006 % Year-Over-Year Growth GDV U.S. Local ($ Billions) Dollar Currency Asia Pacific 70 7.8 6.1 Canada 19 21.2 13.0 Europe 135 16.7 12.9 Latin America 31 25.1 25.2 South Asia / Middle East / Africa 8 36.7 44.6 United States 238 17.3 17.3 Worldwide 502 1
Slide 5: 3rd Quarter Revenue - Assessments
3rd Quarter Revenue - Assessments ($ in Millions) • Net assessments down $37 $278 or 13.3% $300 80% • Gross assessments increased $250 $241 70% $20 or 4.6% over 2005. Key drivers include: $200 60% – GDV increases $150 50% – Restructured pricing, primarily $42 $100 40% reclassification to $50 30% ope
Slide 6: 3rd Quarter Revenue - Operations Fees
3rd Quarter Revenue - Operations Fees ($ in Millions) • Net operations fees up $147 or 28.6% $700 100% • Gross operations fees increased $661 $600 $514 $169 or 30.2%. Key drivers 97% include increases in: $500 – Processed transactions $400 94% – GDV $300 91% – Restructured pricing, $200 including $4
Slide 7: 3rd Quarter Operating Expenses
3rd Quarter Operating Expenses ($ in Millions) Total operating expenses $500 decreased 2.6% to $627: – Adjusted for 2005 special $393 items, increased 8.8% a $400 $331 a General and administrative, increased 12.2% to $393: $300 – Adjusted for 2005 special $219 items, increased 18.7% a $209 $200
Slide 8: Balance Sheet and Cash Flow Statement Highlights
Balance Sheet and Cash Flow Statement Highlights • Cash, cash equivalents and available-for-sale securities of $2.3 billion • Stockholders’ Equity at $2.3 billion • Accounts receivable increased $97 million primarily due to: – Pricing recalibration in Europe – Volume increases – An increase in VAT r
Slide 9: 4Q Special Items for Consideration
4Q Special Items for Consideration ($ in Millions) Pre-Tax 4Q05 Special Items: (Expense) Currency Conversion Reserve (reported as Litigation Settlements expense) ($27) 9
Slide 10: Long-Term Performance Objectives
Long-Term Performance Objectives • Grow revenue • Continued margin improvement • Deliver net income growth • Return on equity 10
Slide 11: MasterCard Worldwide: The Heart of Commerce
MasterCard Worldwide The Heart of Commerce”
Slide 12: Appendix A: GAAP Reconciliation
Appendix A: GAAP Reconciliation ($ million) For the three months ended September 30, 2006 For the three months ended September 30, 2005 YOY Growth Actual Special Items As Adjusted Actual Special Items As Adjusted As Adjusted Revenue $902 - $902 $792 - $792 13.9% General and Administrative 393 - 393