![]() MasterCard Incorporated 1 st Quarter 2007 Financial Results Conference Call May 2, 2007 Exhibit 99.2 |
![]() 2 1 st Quarter Financial Results • Delivered net income of $215 million and earnings per share of $1.57, on a diluted basis • Achieved record revenue growth of 23.9% primarily due to: Gross dollar volume growth (16.4% to $509 billion) Increase in processed transactions (19.4% to 4.2 billion) Restructured cross-border pricing (implemented April 2006) • Improved operating margin to 34.3% from 24.7% in 2006 • Maintained already solid financial position - $2.5 billion of cash, cash equivalents and available-for-sale securities at quarter end |
![]() 3 1 st Quarter Selected Financial Performance ($ in Millions, except percentages and per share data) 82.7% (66) (121) Tax Expense 34.9% (11) (14) Interest Expense (4.1%) 25 24 Depreciation and Amortization $ 0.94 127 21 183 24.7% 183 348 $ 739 Actual 1Q 06 67.0% $ 1.57 Diluted EPS 69.6% 215 Net Income (2.3%) 178 Advertising and Marketing 75.2% 36 Investment Income 14.6% 399 General and Administrative 71.8% 314 34.3% Operating Income Operating Margin 23.9% $ 915 Net Revenue Growth vs. 1Q 06 Actual 1Q 07 |
![]() 4 MasterCard Branded Volume (GDV) First Quarter 2007 Note: Figures may not sum due to rounding 15.7 15.7 237 United States 16.4 19.1 509 Worldwide 14.2 12.7 18 Canada 47.0 36.0 9 South Asia/Middle/East Africa (SAMEA) 15.1 18.5 69 Asia Pacific 23.9 21.8 34 Latin America 15.2 25.0 141 Europe Local Currency U.S. Dollar GDV ($ billions) YOY Growth Rate % |
![]() 5 1 st Quarter Revenue - Assessments ($ in Millions) $262 $244 $0 $50 $100 $150 $200 $250 $300 1Q06 1Q07 20% 30% 40% 50% 60% 70% 80% Net Assessment Fees Net Assessment Fees as a % of Gross Assessment Fees • Net assessments increased $18 or 7.4% to $262 • Gross assessments increased $49 or 11.9% over 2006. Key drivers include: GDV growth: 16.4% Restructured pricing, primarily $31 reclassification to operations fees (offsets gross assessments) • Net assessments as a % of gross assessments declined due to an increase in incentives primarily from: New and renewed customer and merchant agreements |
![]() 6 1 st Quarter Revenue - Operations Fees ($ in Millions) • Net operations fees up $158 or 31.9% to $653 • Gross operations fees increased $181 or 33.3% over 2006. Key drivers include increases in: – Processed transactions growth: 19.4% – GDV growth: 16.4% – Restructured pricing, including $31 million reclassification from assessments • Net operations fees as a % of gross operations fees slightly decreased: – New and renewed customer agreements – Impact of restructured pricing $653 $495 $0 $100 $200 $300 $400 $500 $600 $700 1Q06 1Q07 85% 88% 91% 94% 97% 100% Net Operations Fees Net Operations Fees as a % of Gross Operations Fees |
![]() 7 1 st Quarter Operating Expenses ($ in Millions) $0 $100 $200 $300 $400 $500 1Q06 1Q07 General & Administrative Advertising & Marketing Depreciation & Amortization • Total operating expenses increased 8.2% to $601 • G&A increased 14.6% or $51: – Driven by increases in personnel costs and professional fees • Advertising and market development decreased 2.3% to $178: Reflects a shift in planned spending to later quarters in 2007 $348 $183 $25 $399 $178 $24 |
![]() 8 Cash Flow Statement and Balance Sheet Highlights • Cash, cash equivalents and available-for-sale securities of $2.5 billion • Stockholders’ equity at $2.6 billion • Prepaid expenses increased $60 million primarily due to timing of payments related to advertising and amounts due to customers under incentive agreements • Accrued expenses decreased $134 million mainly due to payments of 2006 employee performance incentives and advertising • Generated $71 million in cash flow from operations during the three months ended March 31, 2007 |
![]() 9 2 nd Quarter 2007 Items for Consideration ($ in millions) • No “grow-over” effect from April 2006 cross-border pricing restructuring • Rebates and incentives exclude large payment to debit issuer • Shift in “traditional” A&M expense to the second quarter to leverage opportunities • 2Q06 Special Items Litigation settlements ($23) Contribution of stock to the MasterCard Foundation ($395) Interest income on IPO proceeds held for redemption $7 |
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