Mastercard Incorporated · NYSE:MA
Mastercard — Q1 2008 Earnings Presentation
12 slides from Mastercard's earnings presentation, Apr 29, 2008
Slide 1: MasterCard 1st Quarter 2008 Financial Results Conference Call
MasterCard Incorporated 1st Quarter 2008 Financial Results Conference Call April 29, 2008
Slide 2: 1st Quarter Financial Results
1st Quarter Financial Results • Net income of $398 million, or $3.01 per share, on a diluted basis – Excluding a special item* of $49 million, or $0.37 per share – Including gains from sales of Redecard shares of $56 million, or $0.42 per share • Net income of $447 million, or $3.38 per share, on a
Slide 3: Business Update
Business Update • Economic Overview • IPS Debit Processing • Legal and Regulatory Update • Redecard Sales • Share Repurchase and Conversion Programs 3
Slide 4: 1st Quarter Selected Financial Performance
1st Quarter Selected Financial Performance ($ in millions, except percentages and per share data) 1Q 2008 YOY 1Q 2008 adjusted for 1Q 2007 Adjusted Actual special items* Actual Growth % Net revenue $ 1,182 $ 1,182 $ 915 29.2 Total operating expenses 666 666 601 10.9 Operating income 516 516 314 64.2
Slide 5: MasterCard Branded Volume (GDV) 1st Quarter 2008
MasterCard Branded Volume (GDV) 1st Quarter 2008 YOY Growth Rate % GDV U.S. Local ($ billions) Dollar Currency Asia Pacific 89 27.8 18.7 Canada 24 31.6 13.0 Europe 183 30.2 17.4 Latin America 44 28.7 20.7 South Asia/Middle East/Africa (SAMEA) 12 33.5 31.3 United States 259 8.9 8.9 Worldwide $611 20.
Slide 6: 1st Quarter Revenue - Operations Fees
1st Quarter Revenue - Operations Fees ($ in millions) • Net operations fees increased $858 31.4%, or $205 to $858 $900 100% $750 $653 97% • Gross operations fees increased 30.2%, or $219 to $944. Key $600 drivers included: 94% $450 – Processed transactions growth: 15.7% 91% $300 – Cross-border volum
Slide 7: 1st Quarter Revenue - Assessments
1st Quarter Revenue - Assessments ($ in millions) • Net assessments increased $350 $324 80% 23.7%, or $62, to $324 $300 $262 70% $250 60% • Gross assessments increased $200 20.4%, or $94 to $554 due to 50% strong GDV growth of 14.1%* $150 40% $100 $50 30% • Net assessments as a % of gross assessment
Slide 8: 1st Quarter Operating Expenses
1st Quarter Operating Expenses ($ in Millions) $600 • Total operating expenses increased 10.9%, or $65, to $500 $442 $666 $399 $400 • G&A increased 10.9%, or $43, to $442 primarily due to: $300 – Higher personnel costs for $199 additional staff and $200 $178 contractors $100 • A&M increased 11.6%, o
Slide 9: Cash Flow Statement and Balance Sheet Highlights
Cash Flow Statement and Balance Sheet Highlights • Generated $224 million in cash flow from operations during the quarter • Cash, cash equivalents and available-for-sale securities of $2.9 billion at 3/31/08 • Available-for-sale securities (short & long term) decreased $281 million primarily due to:
Slide 10: Items for Consideration
Items for Consideration • 2Q07 special items: – Litigation settlements of $3 million – Other income of $90 million related to the World Cup settlement agreement • Thoughts for 2008: – Net revenue growth: slower than 2007, but still double-digit – G&A growth: slower than net revenue growth and below
Slide 11: MasterCard Worldwide: The Heart of Commerce
MasterCard Worldwide The Heart of Commerce”
Slide 12: Appendix A: GAAP Reconciliation
Appendix A: GAAP Reconciliation Reconciliation to Net Income, Earnings Per Share and Total Operating Expenses ($ million) For the three months ended 3/31/08 For the three months ended 3/31/07 YOY Growth Special Special As Actual Items As Adjusted Actual Items Adjusted As Adjusted Revenues, net $1,18