Slide 1: MasterCard Incorporated Quarter 2007 Financial Results Conference Call
October 31, 2007 MasterCard Incorporated Quarter 2007 Financial Results Conference Call
Slide 2: Quarter Financial Results
2 • Delivered quarterly net income of $314 million and earnings per share of $2.31, on a diluted basis (including $0.51 from gains on partial sale of Redecard investment) • Achieved record quarterly net revenue of $1.08 billion, growth of 20.1% primarily due to: – Gross dollar volume growth (12.8% *
Slide 3: Quarter Highlights
3 • Announcing incremental $750 million Class A share repurchase program and a second 2007 Class B share conversion program • Repurchased approximately 2 million shares of Class A common stock for $277 million as of 9/30/07 – Completed $500 million Class A share repurchase plan in October • Converte
Slide 4: Quarter Selected Financial Performance
4 $ 2.31 $ 314 (168) (1) (16) 146 353 32.6% 22 10 _ 264 433 $ 1,083 Actual 3Q 07 _ _ Litigation 69.4 (99) Tax Expense 1.9 (17) Interest Expense (11.4) 25 Depreciation and Amortization NM _ Charitable Contribution $ 1.42 $ 193 _ 34 275 30.5% 209 393 $ 902 Actual 3Q 06 NM Other Income 62.7 Diluted EPS
Slide 5: MasterCard Branded Volume (GDV)
5 Note: Figures may not sum due to rounding 7.7 7.7 256 United States 12.8 16.6 577 Worldwide 13.3 21.2 23 Canada 36.8 41.3 11 South Asia/Middle East/Africa (SAMEA) 17.1 22.3 78 Asia Pacific 20.2 24.2 39 Latin America 16.1 25.8 171 Europe Local Currency U.S. Dollar GDV ($ billions) YOY Growth Rate %
Slide 6: Quarter Revenue - Assessments
6 • Net assessments increased 20.7%, or $50 to $291 • Gross assessments increased 15.4%, or $70 to $525 due to strong GDV growth of 12.8%* • Net assessments as a % of gross assessments improved slightly Net Assessment Fees Net Assessment Fees as a % of Gross Assessments * On a local currency basis $
Slide 7: Quarter Revenue - Operations Fees
7 • Net operations fees up 19.8%, or $131 to $792 • Gross operations fees increased 20.6%, or $150 to $879. Key drivers include: – Processed transactions growth: 13.3% – GDV growth: 12.8%* – Cross-border volume growth of 20.6% – Pricing adjustments and new programs • Net operations fees as a % of gr
Slide 8: Quarter Operating Expenses
8 • Total operating expenses increased 16.3% to $730 • G&A increased 10.2%, or $40, driven by: – Higher personnel costs for additional staff/contractors – Increased employee performance incentives • A&M increased 26.4%, or $55, due to: – Initiatives to support company strategy – Planned shift in spe
Slide 9: Quarter Cash Flow Statement and Balance Sheet Highlights
9 • Generated $718 million in cash flow from operations during the nine months ended 9/30/07 • Cash, cash equivalents and available-for-sale securities of $3.3 billion and stockholders’ equity of $3.2 billion at 9/30/07 • Repurchased approximately 2 million Class A shares for $277 million; classifie
Slide 10: Quarter 2007 Items for Consideration
10 • Special items – Litigation settlements of $2 million in 4Q 2006 • G&A – now expect: – Second half growth to be slightly lower than first half – 4Q will have highest sequential and YOY growth rate in 2007 • A&M - continue to expect: – Low single-digit growth for the full-year – Highest spend in
Slide 11: MasterCard Worldwide: The Heart of Commerce
MasterCard Worldwide The Heart of Commerce”