Exhibit 99.1
MasterCard Incorporated Reports
Second-Quarter 2009 Financial Results
| • | Second-quarter net income of $349 million, or $2.67 per diluted share |
- Net income growth of 26.4%, excluding the special item from last year
| • | Second-quarter net revenue growth of 2.7%, to $1.3 billion |
| • | Second-quarter gross dollar volume down slightly by 0.6%, and purchase volume down slightly by 0.7% |
| • | Second-quarter total operating expenses declined 13%, excluding the special item from last year |
Purchase, NY, July 30, 2009 – MasterCard Incorporated (NYSE:MA) today announced financial results for the second quarter of 2009. The company reported net income of $349 million, or $2.67 per diluted share. Net income grew 26.4%, excluding the special item from last year. The company’s total operating expenses, other income, effective tax rate, net income and earnings per share, excluding special items, are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying GAAP reconciliations.
Net revenue for the second quarter of 2009 was $1.3 billion, a 2.7% increase versus the same period in 2008. On a constant currency basis (excluding the movement of the euro and the Brazilian real relative to the U.S. dollar), net revenue increased 7.0% compared to the same period in 2008. The higher net revenue in the second quarter this year was fueled by:
| • | Pricing changes, which contributed approximately 8 percentage points of the net revenue growth; |
| • | A 7.9% increase in the number of transactions processed to 5.6 billion; and |
| • | A 5.8% decrease in rebates and incentives. |
These contributing factors were partially offset by the impact of lower gross dollar volumes on second-quarter 2009 revenue.
MasterCard’s gross dollar volume was down by 0.6% on a local currency basis, versus the second quarter of 2008, to $595 billion. Worldwide purchase volume during the quarter was down by 0.7% on a local currency basis, versus the second quarter of 2008, to $450 billion. As of June 30, 2009, the company’s financial-institution customers had issued 959 million MasterCard cards, an increase of 1.2% over the cards issued at June 30, 2008.
“We are very pleased with our second-quarter financial performance and are adapting well to the challenging economic environment,” said Robert W. Selander, MasterCard president and chief executive officer. “The thoughtful actions we’ve taken to realign our resources
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MasterCard Incorporated – Page 2
and priorities to match customer and local market needs, as well as our sharp focus on expense management, have enabled us to deliver strong operating margin and net income improvements.
“At the same time, we continue to invest in the future so that we are solidly positioned once the economic tide begins to turn,” said Selander. “We operate a global, flexible and resilient business that will continue to benefit from the ongoing shift toward electronic payments, which consumers, businesses and governments find more efficient, secure and easier to manage.”
The special item for the second quarter of 2009 represented a $0.5 million litigation settlement charge. The special item for the second quarter of 2008 represented a $1.65 billion charge related to a litigation settlement.
Excluding special items, total operating expenses decreased 13.0%, to $722 million, during the second quarter of 2009 compared to the same period in 2008. Currency fluctuations contributed 3.2 percentage points to the rate of decline. The decrease in total operating expenses was driven by:
| • | A 2.9% decrease in general and administrative expenses, primarily resulting from decreases in professional fees and travel expenses, versus the comparable period in 2008. These decreases were partially offset by increased personnel costs due to severance of $51 million in the second quarter of 2009. Excluding the impact of severance costs in both periods, general and administrative expenses declined 10.7% for the second quarter of 2009. A favorable foreign currency impact represented 2.9 percentage points of both rates of decline; and |
| • | A 35.8% decrease in advertising and marketing expenses versus the year-ago period, primarily related to continued cost containment initiatives in response to market realities. Favorable currency fluctuations representing approximately 3.5 percentage points contributed to the rate of decline. |
Including special items, total operating expenses decreased 70.9%, to $723 million, primarily due to the litigation settlement that occurred in the second quarter of 2008.
Operating margin was 43.6 % for the second quarter of 2009, up 10.2 percentage points over the year-ago period, excluding special items.
Total other expense was $21 million in the second quarter of 2009 versus total other income of $10 million in the second quarter of 2008. Interest expense versus the year-ago period increased $16 million, primarily due to the interest accretion associated with the litigation settlement that occurred in the second quarter of 2008.
Excluding special items in both periods, MasterCard’s effective tax rate was 35.0% in the second quarter of 2009, versus 35.3% in the comparable period in 2008. Including the special items, the effective tax rate was 35.0% for the second quarter of 2009, versus 39.0% in the comparable period in 2008. The difference in the effective tax rate was primarily due to the charge for the litigation settlement recorded in the second quarter of 2008.
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Year-to-Date 2009 Results
For the six months ended June 30, 2009, MasterCard reported net income of $717 million excluding the special item and $716 million including the special item, or $5.47 per diluted share in both cases.
Net revenue for the six months ended June 30, 2009 was $2.4 billion, or essentially flat versus the same period in 2008. On a constant currency basis, net revenue increased 4.5%. Increased processed transactions of 6.9% and pricing changes of approximately 6 percentage points contributed to the revenue growth in the year-to-date period. These contributing factors were partially offset by the impact of lower gross dollar volumes on revenue for the six months ended June 30, 2009.
Total operating expenses decreased 12.0%, to $1.3 billion, for the six-month period compared to the same period in 2008, excluding special items for both periods. Currency fluctuations contributed 3.2 percentage points of this decrease. Including special items, operating expenses decreased 58.1%, to $1.3 billion.
Total other expense was $32 million for the six-month period versus total other income of $183 million for the same period in 2008, including special items. The decrease was primarily driven by gains from the sale of Redecard securities and the termination of a customer business agreement in 2008.
MasterCard’s effective tax rate, excluding special items, was 34.1% in the six months ended June 30, 2009, versus a rate of 35.2% in the comparable period in 2008. The decrease in the effective tax rate was primarily due to an adjustment to deferred taxes reflected in the first quarter of 2009. Including the special items, the effective tax rate was 34.1% for the 2009 period, and 43.9% for the 2008 period. The difference in the effective tax rate was primarily due to the impact of the charge for the litigation settlement in 2008.
MasterCard Incorporated – Page 4
Second-Quarter 2009 Financial Results Conference Call Details
At 9:00 a.m. EDT today, the company will host a conference call to discuss its second-quarter 2009 financial results.
The dial-in information for this call is 866-730-5763 (within the U.S.) and 857-350-1587 (outside the U.S.) and the passcode is 10997135. A replay of the call will be available for one week thereafter. The replay can be accessed by dialing 888-286-8010 (within the U.S.) and 617-801-6888 (outside the U.S.) and using passcode 96583440.
The live call and the replay, along with supporting materials, can also be accessed through the Investor Relations section of the company’s website at www.mastercard.com.
About MasterCard Incorporated
MasterCard Incorporated advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go towww.mastercard.com.
Forward-Looking Statements
Statements in this press release which are not historical facts, including statements about MasterCard’s plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company’s ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation:
| • | The company’s ability to invest in and be properly positioned for the future; and |
| • | The company’s ability to continue to benefit from the ongoing shift toward electronic payments. |
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Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2008, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC during 2009, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.
###
Contacts:
Investor Relations: Barbara Gasper, investor_relations@mastercard.com, 914-249-4565
Media Relations: Chris Monteiro, chris_monteiro@mastercard.com, 914-249-5826
MasterCard Incorporated – Page 6
MASTERCARD INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
Revenues, net | $ | 1,279,889 | $ | 1,246,504 | $ | 2,435,991 | $ | 2,428,588 | ||||||||
Operating Expenses | ||||||||||||||||
General and administrative | 506,004 | 521,357 | 953,857 | 982,982 | ||||||||||||
Advertising and marketing | 180,478 | 281,056 | 296,447 | 460,644 | ||||||||||||
Litigation settlements | 500 | 1,649,345 | 500 | 1,649,345 | ||||||||||||
Depreciation and amortization | 35,721 | 27,950 | 66,708 | 53,214 | ||||||||||||
Total operating expenses | 722,703 | 2,479,708 | 1,317,512 | 3,146,185 | ||||||||||||
Operating income (loss) | 557,186 | (1,233,204 | ) | 1,118,479 | (717,597 | ) | ||||||||||
Other Income (Expense) | ||||||||||||||||
Investment income, net | 13,630 | 25,685 | 31,031 | 140,455 | ||||||||||||
Interest expense | (31,771 | ) | (15,438 | ) | (67,569 | ) | (30,756 | ) | ||||||||
Other income (expense), net | (2,599 | ) | (225 | ) | 4,383 | 73,297 | ||||||||||
Total other income (expense) | (20,740 | ) | 10,022 | (32,155 | ) | 182,996 | ||||||||||
Income (loss) before income taxes | 536,446 | (1,223,182 | ) | 1,086,324 | (534,601 | ) | ||||||||||
Income tax expense (benefit) | 187,567 | (476,529 | ) | 370,235 | (234,826 | ) | ||||||||||
Net income (loss) | 348,879 | (746,653 | ) | 716,089 | (299,775 | ) | ||||||||||
Loss attributable to non-controlling interests | 195 | — | 243 | — | ||||||||||||
Net Income (Loss) Attributable to MasterCard | $ | 349,074 | $ | (746,653 | ) | $ | 716,332 | $ | (299,775 | ) | ||||||
Basic Earnings (Loss) per Share | $ | 2.67 | $ | (5.70 | ) | $ | 5.49 | $ | (2.28 | ) | ||||||
Basic Weighted Average Shares Outstanding | 129,743 | 130,073 | 129,689 | 130,750 | ||||||||||||
Diluted Earnings (Loss) per Share | $ | 2.67 | $ | (5.70 | ) | $ | 5.47 | $ | (2.28 | ) | ||||||
Diluted Weighted Average Shares Outstanding | 130,118 | 130,073 | 130,048 | 130,750 | ||||||||||||
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MASTERCARD INCORPORATED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| June 30, 2009 | December 31, 2008 | |||||||
| (In thousands, except share data) | ||||||||
| ASSETS | ||||||||
Cash and cash equivalents | $ | 2,048,194 | $ | 1,505,160 | ||||
Investment securities, at fair value: | ||||||||
Available-for-sale | 605,403 | 588,095 | ||||||
Municipal bonds held-to-maturity | — | 154,000 | ||||||
Accounts receivable | 545,255 | 639,482 | ||||||
Income taxes receivable | — | 198,308 | ||||||
Settlement due from customers | 625,572 | 513,191 | ||||||
Restricted security deposits held for customers | 243,330 | 183,245 | ||||||
Prepaid expenses | 284,647 | 213,612 | ||||||
Deferred income taxes | 262,764 | 283,795 | ||||||
Other current assets | 75,037 | 32,619 | ||||||
Total Current Assets | 4,690,202 | 4,311,507 | ||||||
Property, plant and equipment, at cost (less accumulated depreciation of $307,935 and $278,269) | 456,750 | 306,798 | ||||||
Deferred income taxes | 502,161 | 567,567 | ||||||
Goodwill | 300,364 | 297,993 | ||||||
Other intangible assets (less accumulated amortization of $393,398 and $377,570) | 397,345 | 394,282 | ||||||
Auction rate securities available-for-sale, at fair value | 187,000 | 191,760 | ||||||
Municipal bonds held-to-maturity | 36,910 | 37,450 | ||||||
Prepaid expenses | 306,757 | 302,095 | ||||||
Other assets | 106,444 | 66,397 | ||||||
Total Assets | $ | 6,983,933 | $ | 6,475,849 | ||||
LIABILITIES AND EQUITY | ||||||||
Accounts payable | $ | 259,484 | $ | 253,276 | ||||
Settlement due to customers | 610,028 | 541,303 | ||||||
Restricted security deposits held for customers | 243,330 | 183,245 | ||||||
Obligations under litigation settlements | 709,835 | 713,035 | ||||||
Accrued expenses | 955,278 | 1,032,061 | ||||||
Short-term debt | — | 149,380 | ||||||
Other current liabilities | 203,657 | 118,151 | ||||||
Total Current Liabilities | 2,981,612 | 2,990,451 | ||||||
Deferred income taxes | 73,668 | 74,518 | ||||||
Obligations under litigation settlements | 772,755 | 1,023,263 | ||||||
Long-term debt | 20,564 | 19,387 | ||||||
Other liabilities | 461,293 | 436,255 | ||||||
Total Liabilities | 4,309,892 | 4,543,874 | ||||||
Commitments | ||||||||
Stockholders’ Equity | ||||||||
Class A common stock, $.0001 par value; authorized 3,000,000,000 shares, 109,663,493 and 105,126,588 shares issued and 116,404,083 and 98,385,998 outstanding, respectively | 11 | 10 | ||||||
Class B common stock, $.0001 par value; authorized 1,200,000,000 shares, 19,977,657 and 30,848,778 issued and outstanding, respectively | 3 | 4 | ||||||
Class M common stock, $.0001 par value; authorized 1,000,000 shares, 1,772 and 1,728 shares issued and outstanding, respectively | — | — | ||||||
Additional paid-in-capital | 3,346,557 | 3,304,604 | ||||||
Class A treasury stock, at cost, 6,740,590 shares, respectively | (1,250,000 | ) | (1,250,000 | ) | ||||
Retained earnings (accumulated deficit) | 440,901 | (236,100 | ) | |||||
Accumulated other comprehensive income: | ||||||||
Cumulative foreign currency translation adjustments | 186,915 | 175,040 | ||||||
Defined benefit pension and other postretirement plans, net of tax | (41,320 | ) | (43,207 | ) | ||||
Investment securities available-for-sale, net of tax | (16,798 | ) | (22,996 | ) | ||||
Total accumulated other comprehensive income | 128,797 | 108,837 | ||||||
Total Stockholders’ Equity | 2,666,269 | 1,927,355 | ||||||
Non-controlling interests | 7,772 | 4,620 | ||||||
Total Equity | 2,674,041 | 1,931,975 | ||||||
Total Liabilities and Equity | $ | 6,983,933 | $ | 6,475,849 | ||||
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MASTERCARD INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, | ||||||||
| 2009 | 2008 | |||||||
| (In thousands) | ||||||||
Operating Activities | ||||||||
Net income (loss) | $ | 716,089 | $ | (299,775 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 66,708 | 53,214 | ||||||
Gain on sale of Redecard S.A. available-for-sale securities | — | (85,903 | ) | |||||
Share based payments | 40,614 | 28,989 | ||||||
Stock units settled in cash for taxes | (26,506 | ) | (66,090 | ) | ||||
Tax benefit for share based compensation | (25,547 | ) | (43,829 | ) | ||||
Impairment of assets | 15,266 | 8,900 | ||||||
Accretion of imputed interest on litigation settlements | 49,977 | 16,124 | ||||||
Deferred income taxes | 84,204 | (573,927 | ) | |||||
Other | (760 | ) | 5,208 | |||||
Changes in operating assets and liabilities: | ||||||||
Trading securities | — | 2,561 | ||||||
Accounts receivable | 110,383 | (15,809 | ) | |||||
Income taxes receivable | 190,000 | — | ||||||
Settlement due from customers | (108,826 | ) | (8,172 | ) | ||||
Prepaid expenses | (69,897 | ) | (75,658 | ) | ||||
Other current assets | (56,685 | ) | (1,723 | ) | ||||
Obligations under litigation settlements | (303,685 | ) | 1,648,859 | |||||
Accounts payable | 5,230 | (272 | ) | |||||
Settlement due to customers | 67,796 | 21,577 | ||||||
Accrued expenses | (58,548 | ) | (155,076 | ) | ||||
Net change in other assets and liabilities | 82,270 | 83,601 | ||||||
Net cash provided by operating activities | 778,083 | 542,799 | ||||||
Investing Activities | ||||||||
Purchases of property, plant and equipment | (25,028 | ) | (28,961 | ) | ||||
Capitalized software | (37,586 | ) | (38,784 | ) | ||||
Purchases of investment securities available-for-sale | (64,425 | ) | (422,739 | ) | ||||
Proceeds from sales and maturities of investment securities, available-for-sale | 59,009 | 737,616 | ||||||
Investment in affiliates | (18,084 | ) | — | |||||
Acquisition of business, net of cash acquired | (2,913 | ) | — | |||||
Other investing activities | 1,307 | 709 | ||||||
Net cash provided by (used in) investing activities | (87,720 | ) | 247,841 | |||||
Financing Activities | ||||||||
Dividends paid | (39,359 | ) | (39,878 | ) | ||||
Cash proceeds from exercise of stock options | 2,269 | 4,656 | ||||||
Tax benefit for share based compensation | 25,547 | 43,829 | ||||||
Purchase of treasury stock | — | (649,468 | ) | |||||
Payment of debt | (149,380 | ) | (80,000 | ) | ||||
Redemption of non-controlling interest | (4,620 | ) | — | |||||
Net cash used in financing activities | (165,543 | ) | (720,861 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 18,214 | 40,137 | ||||||
Net increase in cash and cash equivalents | 543,034 | 109,916 | ||||||
Cash and cash equivalents — beginning of period | 1,505,160 | 1,659,295 | ||||||
Cash and cash equivalents — end of period | $ | 2,048,194 | $ | 1,769,211 | ||||
MasterCard Incorporated – Page 9
MASTERCARD INCORPORATED OPERATING PERFORMANCE
| For the 3 Months ended June 30, 2009 | |||||||||||||||||||||||||||||
| GDV (Bil.) | Growth (USD) | Growth (Local) | Purchase Volume (Bil.) | Growth (Local) | Purchase Trans. (Mil.) | Cash Volume (Bil.) | Growth (Local) | Cash Trans. (Mil.) | Accounts (Mil.) | Cards (Mil.) | Acceptance Locations (Mil.) | ||||||||||||||||||
All MasterCard Credit, | |||||||||||||||||||||||||||||
APMEA | $ | 114 | 7.5 | % | 17.4 | % | $ 77 | 16.3 | % | 1,010 | $ 37 | 19.8 | % | 279 | 233 | 256 | 8.9 | ||||||||||||
Canada | 23 | -16.6 | % | -3.4 | % | 20 | -2.2 | % | 254 | 3 | -11.3 | % | 5 | 35 | 43 | 0.8 | |||||||||||||
Europe | 173 | -15.5 | % | 2.1 | % | 130 | 3.0 | % | 1,679 | 43 | -0.6 | % | 284 | 181 | 196 | 8.6 | |||||||||||||
Latin America | 41 | -13.2 | % | 7.0 | % | 22 | 11.2 | % | 463 | 19 | 2.2 | % | 140 | 96 | 118 | 3.0 | |||||||||||||
United States | 245 | -9.7 | % | -9.7 | % | 202 | -8.8 | % | 3,611 | 43 | -13.4 | % | 261 | 300 | 347 | 8.1 | |||||||||||||
Worldwide | 595 | -9.3 | % | -0.6 | % | 450 | -0.7 | % | 7,017 | 145 | -0.5 | % | 968 | 846 | 959 | 29.4 | |||||||||||||
MasterCard Credit and Charge Programs | |||||||||||||||||||||||||||||
United States | 133 | -18.7 | % | -18.7 | % | 120 | -15.6 | % | 1,497 | 13 | -39.4 | % | 10 | 184 | 220 | ||||||||||||||
Worldwide less United States | 266 | -12.3 | % | 2.8 | % | 218 | 5.3 | % | 2,852 | 49 | -7.2 | % | 251 | 438 | 496 | ||||||||||||||
Worldwide | 399 | -14.5 | % | -5.5 | % | 338 | -3.2 | % | 4,350 | 61 | -16.6 | % | 261 | 622 | 716 | ||||||||||||||
MasterCard Debit Programs | |||||||||||||||||||||||||||||
United States | 112 | 4.1 | % | 4.1 | % | 82 | 3.4 | % | 2,114 | 30 | 6.3 | % | 252 | 116 | 127 | ||||||||||||||
Worldwide less United States | 84 | 3.3 | % | 21.9 | % | 31 | 21.4 | % | 553 | 53 | 22.2 | % | 456 | 108 | 116 | ||||||||||||||
Worldwide | 196 | 3.8 | % | 11.1 | % | 113 | 7.7 | % | 2,667 | 83 | 16.0 | % | 707 | 224 | 242 | ||||||||||||||
APMEA = Asia Pacific / Middle East / Africa | |||||||||||||||||||||||||||||
| For the 6 Months ended June 30, 2009 | |||||||||||||||||||||||||||||
| GDV (Bil.) | Growth (USD) | Growth (Local) | Purchase Volume (Bil.) | Growth (Local) | Purchase Trans. (Mil.) | Cash Volume (Bil.) | Growth (Local) | Cash Trans. (Mil.) | Accounts (Mil.) | Cards (Mil.) | |||||||||||||||||||
All MasterCard Credit, | |||||||||||||||||||||||||||||
APMEA | $ | 216 | 4.9 | % | 16.7 | % | $ 145 | 15.6 | % | 1,941 | $ 71 | 18.9 | % | 534 | 233 | 256 | |||||||||||||
Canada | 42 | -18.1 | % | -2.0 | % | 36 | -0.3 | % | 477 | 6 | -11.7 | % | 10 | 35 | 43 | ||||||||||||||
Europe | 326 | -15.8 | % | 2.9 | % | 243 | 3.5 | % | 3,220 | 82 | 0.9 | % | 541 | 181 | 196 | ||||||||||||||
Latin America | 78 | -14.5 | % | 7.0 | % | 42 | 10.8 | % | 908 | 36 | 2.8 | % | 277 | 96 | 118 | ||||||||||||||
United States | 483 | -8.8 | % | -8.8 | % | 394 | -8.0 | % | 6,945 | 89 | -12.5 | % | 518 | 300 | 347 | ||||||||||||||
Worldwide | 1,145 | -9.5 | % | -0.2 | % | 861 | -0.2 | % | 13,491 | 283 | -0.2 | % | 1,880 | 846 | 959 | ||||||||||||||
MasterCard Credit and Charge Programs | |||||||||||||||||||||||||||||
United States | 261 | -18.0 | % | -18.0 | % | 233 | -14.8 | % | 2,885 | 28 | -37.7 | % | 20 | 184 | 220 | ||||||||||||||
Worldwide less United States | 507 | -13.1 | % | 3.6 | % | 412 | 6.1 | % | 5,516 | 95 | -6.1 | % | 489 | 438 | 496 | ||||||||||||||
Worldwide | 767 | -14.8 | % | -4.9 | % | 645 | -2.5 | % | 8,401 | 123 | -15.7 | % | 509 | 622 | 716 | ||||||||||||||
MasterCard Debit Programs | |||||||||||||||||||||||||||||
United States | 222 | 4.9 | % | 4.9 | % | 160 | 4.1 | % | 4,060 | 62 | 6.9 | % | 498 | 116 | 127 | ||||||||||||||
Worldwide less United States | 155 | 1.6 | % | 20.9 | % | 56 | 17.7 | % | 1,030 | 99 | 22.7 | % | 872 | 108 | 116 | ||||||||||||||
Worldwide | 377 | 3.5 | % | 10.9 | % | 216 | 7.3 | % | 5,090 | 161 | 16.1 | % | 1,371 | 224 | 242 | ||||||||||||||
| For the 3 Months ended June 30, 2008 | |||||||||||||||||||||||||||||
| GDV (Bil.) | Growth (USD) | Growth (Local) | Purchase Volume (Bil.) | Growth (Local) | Purchase Trans. (Mil.) | Cash Volume (Bil.) | Growth (Local) | Cash Trans. (Mil.) | Accounts (Mil.) | Cards (Mil.) | |||||||||||||||||||
All MasterCard Credit, | |||||||||||||||||||||||||||||
APMEA | $ | 106 | 28.1 | % | 21.5 | % | $ 72 | 23.6 | % | 843 | $ 33 | 17.3 | % | 215 | 204 | 223 | |||||||||||||
Canada | 27 | 22.2 | % | 12.4 | % | 24 | 13.5 | % | 244 | 4 | 5.9 | % | 5 | 31 | 38 | ||||||||||||||
Europe | 205 | 30.8 | % | 17.9 | % | 151 | 18.4 | % | 1,567 | 53 | 16.4 | % | 272 | 175 | 189 | ||||||||||||||
Latin America | 47 | 26.4 | % | 17.3 | % | 24 | 19.9 | % | 435 | 23 | 14.6 | % | 141 | 86 | 106 | ||||||||||||||
United States | 271 | 6.2 | % | 6.2 | % | 221 | 8.0 | % | 3,489 | 50 | -0.9 | % | 258 | 334 | 391 | ||||||||||||||
Worldwide | 656 | 18.4 | % | 13.0 | % | 493 | 14.0 | % | 6,578 | 163 | 10.2 | % | 891 | 830 | 947 | ||||||||||||||
MasterCard Credit and Charge Programs | |||||||||||||||||||||||||||||
United States | 163 | 0.7 | % | 0.7 | % | 142 | 2.8 | % | 1,590 | 21 | -11.3 | % | 15 | 224 | 274 | ||||||||||||||
Worldwide less United States | 303 | 27.2 | % | 17.3 | % | 242 | 19.8 | % | 2,644 | 62 | 8.4 | % | 253 | 421 | 475 | ||||||||||||||
Worldwide | 467 | 16.5 | % | 10.9 | % | 384 | 12.9 | % | 4,234 | 83 | 2.5 | % | 268 | 644 | 749 | ||||||||||||||
MasterCard Debit Programs | |||||||||||||||||||||||||||||
United States | 107 | 15.9 | % | 15.9 | % | 79 | 18.7 | % | 1,899 | 28 | 8.8 | % | 243 | 110 | 117 | ||||||||||||||
Worldwide less United States | 81 | 35.1 | % | 22.5 | % | 30 | 16.4 | % | 446 | 52 | 26.4 | % | 380 | 75 | 81 | ||||||||||||||
Worldwide | 189 | 23.5 | % | 18.7 | % | 109 | 18.1 | % | 2,345 | 80 | 19.5 | % | 623 | 185 | 198 | ||||||||||||||
| For the 6 Months ended June 30, 2008 | |||||||||||||||||||||||||||||
| GDV (Bil.) | Growth (USD) | Growth (Local) | Purchase Volume (Bil.) | Growth (Local) | Purchase Trans. (Mil.) | Cash Volume (Bil.) | Growth (Local) | Cash Trans. (Mil.) | Accounts (Mil.) | Cards (Mil.) | |||||||||||||||||||
All MasterCard Credit, | |||||||||||||||||||||||||||||
APMEA | $ | 206 | 28.2 | % | 20.8 | % | $ 141 | 23.2 | % | 1,641 | $ 65 | 15.9 | % | 411 | 204 | 223 | |||||||||||||
Canada | 51 | 26.4 | % | 12.7 | % | 44 | 13.3 | % | 456 | 8 | 9.3 | % | 10 | 31 | 38 | ||||||||||||||
Europe | 387 | 30.6 | % | 17.7 | % | 287 | 18.2 | % | 3,015 | 100 | 16.4 | % | 518 | 175 | 189 | ||||||||||||||
Latin America | 91 | 27.5 | % | 19.0 | % | 47 | 21.3 | % | 851 | 44 | 16.6 | % | 276 | 86 | 106 | ||||||||||||||
United States | 530 | 7.5 | % | 7.5 | % | 428 | 9.1 | % | 6,742 | 102 | 1.5 | % | 511 | 334 | 391 | ||||||||||||||
Worldwide | 1,265 | 19.2 | % | 13.6 | % | 946 | 14.5 | % | 12,705 | 320 | 10.9 | % | 1,727 | 830 | 947 | ||||||||||||||
MasterCard Credit and Charge Programs | |||||||||||||||||||||||||||||
United States | 318 | 2.5 | % | 2.5 | % | 274 | 4.3 | % | 3,079 | 44 | -7.7 | % | 30 | 224 | 274 | ||||||||||||||
Worldwide less United States | 583 | 28.2 | % | 17.5 | % | 462 | 19.8 | % | 5,111 | 120 | 9.5 | % | 497 | 421 | 475 | ||||||||||||||
Worldwide | 901 | 17.8 | % | 11.7 | % | 736 | 13.5 | % | 8,190 | 165 | 4.3 | % | 527 | 644 | 749 | ||||||||||||||
MasterCard Debit Programs | |||||||||||||||||||||||||||||
United States | 212 | 16.1 | % | 16.1 | % | 154 | 18.7 | % | 3,663 | 58 | 9.8 | % | 481 | 110 | 117 | ||||||||||||||
Worldwide less United States | 153 | 33.3 | % | 21.6 | % | 56 | 15.8 | % | 852 | 97 | 25.2 | % | 719 | 75 | 81 | ||||||||||||||
Worldwide | 365 | 22.8 | % | 18.4 | % | 210 | 17.9 | % | 4,515 | 155 | 19.0 | % | 1,200 | 185 | 198 | ||||||||||||||
Note that columns in the tables above may not add due to rounding; growth represents change from the comparable year-ago period.
MasterCard Incorporated – Page 10
Footnote
The tables set forth the gross dollar volume (“GDV”), purchase volume, cash volume and the number of purchase transactions, cash transactions, accounts, cards and acceptance locations on a regional and global basis for MasterCard®-branded and MasterCard Electronic™-branded cards. Growth rates over prior periods are provided for volume-based data.
Debit transactions on Maestro® and Cirrus®-branded cards, Mondex® transactions and transactions involving brands other than MasterCard are not included in the preceding tables.
For purposes of the table: GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; “purchase volume” means the aggregate dollar amount of purchases made with MasterCard-branded cards for the relevant period; and “cash volume” means the aggregate dollar amount of cash disbursements obtained with MasterCard-branded cards for the relevant period. The number of cards includes virtual cards, which are MasterCard-branded payment accounts in connection with which functional cards are not generally issued. Acceptance locations include merchant locations, ATMs and other locations where cash may be obtained.
The MasterCard payment product is comprised of credit, charge and debit programs, and data relating to each type of program is included in the tables. Debit programs include MasterCard-branded debit programs where the primary means of cardholder validation at the point of sale is for cardholders either to sign a sales receipt or enter a PIN. The tables include information with respect to transactions involving MasterCard-branded cards that are not processed by MasterCard and transactions for which MasterCard does not earn significant revenues.
Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which MasterCard volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. MasterCard reports period-over-period rates of change in purchase volume and cash volume on the basis of local currency information, in order to eliminate the impact of changes in the value of foreign currencies against the U.S. dollar in calculating such rates of change.
The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is provided by MasterCard customers and is subject to verification by MasterCard and partial cross-checking against information provided by MasterCard’s transaction processing systems. The data set forth in the accounts and cards columns is provided by MasterCard customers and is subject to certain limited verification by MasterCard. A portion of the data set forth in the accounts and cards columns reflects the impact of routine portfolio changes among customers and other practices that may lead to over counting of the underlying data in certain circumstances. In order to provide a true indication of how broadly our cards can be used, MasterCard seeks to provide the most accurate acceptance figures possible and to maintain that MasterCard acceptance is unsurpassed worldwide by periodically validating our results with third parties. The data set forth in the acceptance locations column is derived through a proprietary methodology designed to minimize the impact of multiple acquiring in certain markets. This data is based on information provided by our customers and other third parties and is subject to certain limited verification by MasterCard and partial cross-checking against information provided by MasterCard’s transaction processing systems. All data is subject to revision and amendment by MasterCard’s customers subsequent to the date of its release.
Performance information for prior periods can be found in the “Investor Relations” section of MasterCard’s website at www.mastercard.com.
MasterCard Incorporated – Page 11
GAAP Reconciliations
| ($ millions except per share data) | Three Months ended June 30, 2009 | Three Months ended June 30, 2008 | ||||||||||||||||||||||
| Actual | Special Item | Non - GAAP | Actual | Special Item | Non - GAAP | |||||||||||||||||||
| Litigation settlements | $ | 1 | $ | (1 | )a | $ | — | $ | 1,649 | $ | (1,649 | )a | $ | — | ||||||||||
| Total operating expenses | 723 | (1 | ) | 722 | 2,480 | (1,649 | ) | 830 | ||||||||||||||||
| Operating income (loss) | 557 | 1 | 558 | (1,233 | ) | 1,649 | 416 | |||||||||||||||||
| Operating Margin | 43.5 | % | 43.6 | % | (98.9 | %) | 33.4 | % | ||||||||||||||||
| Income (loss) before income taxes | 536 | 1 | 537 | (1,223 | ) | 1,649 | 426 | |||||||||||||||||
| Income taxes (benefit) | 187 | — | 188 | (477 | ) | 627 | 150 | |||||||||||||||||
| Net Income (Loss) | $ | 349 | $ | — | $ | 349 | $ | (747 | ) | $ | 1,023 | $ | 276 | |||||||||||
| Basic Net Income (Loss) per Share | $ | 2.67 | $ | 0.01 | $ | 2.68 | ($ | 5.70 | )c | $ | 7.80c | $ | 2.10c | |||||||||||
| Diluted Net Income (Loss) per Share | $ | 2.67 | — | $ | 2.67 | ($ | 5.70 | )c | $ | 7.80c | $ | 2.10c | ||||||||||||
| Six Months ended June 30, 2009 | Six Months ended June 30, 2008 | |||||||||||||||||||||||
| Actual | Special Item | Non - GAAP | Actual | Special Items | Non - GAAP | |||||||||||||||||||
| Litigation settlements | $ | 1 | $ | (1 | )a | $ | — | $ | 1,649 | $ | (1,649 | )a | $ | — | ||||||||||
| Total operating expenses | 1,318 | (1 | ) | 1,317 | 3,146 | (1,649 | ) | 1,497 | ||||||||||||||||
| Operating income (loss) | 1,118 | 1 | 1,119 | (718 | ) | 1,649 | 932 | |||||||||||||||||
| Operating Margin | 45.9 | % | 45.9 | % | (29.5 | %) | 38.4 | % | ||||||||||||||||
| Other income (expense), net | 4 | — | 4 | 73 | (75 | )b | (2 | ) | ||||||||||||||||
| Total other income (expense) | (32 | ) | — | (32 | ) | 183 | (75 | ) | 108 | |||||||||||||||
| Income (loss) before income taxes | 1,086 | 1 | 1,087 | (535 | ) | 1,574 | 1,040 | |||||||||||||||||
| Income taxes (benefit) | 370 | — | 370 | (235 | ) | 601 | 366 | |||||||||||||||||
| Net Income (Loss) | $ | 716 | $ | — | $ | 717 | $ | (300 | ) | $ | 973 | $ | 674 | |||||||||||
| Basic Net Income (Loss) per Share | $ | 5.49 | — | $ | 5.49 | $ | (2.28 | )c | $ | 7.39c | $ | 5.11c | ||||||||||||
| Diluted Net Income (Loss) per Share | $ | 5.47 | — | $ | 5.47 | $ | (2.28 | )c | $ | 7.38c | $ | 5.10c | ||||||||||||
a - Litigation Settlements
b - Gain from the termination of a customer business agreement
c - Amounts have been revised to conform with the adoption of FASB Staff Position EITF 03-06-1
Note that the figures in the preceding tables may not sum due to rounding
MasterCard Incorporated – Page 12
Reconciliation to Effective Tax Rate for the American Express Litigation Settlement
| (In millions, except percentages) | Actual | Actual Effective Tax Rate | Special Item | Non-GAAP | Non-GAAP Effective Tax Rate | |||||||||||
Three months ended June 30, 2008: | ||||||||||||||||
Income (loss) before income taxes | $ | (1,223 | ) | 39.0 | % | $ | 1,649 | $ | 426 | 35.3 | % | |||||
Income tax expense (benefit) | (477 | ) | 627 | 150 | ||||||||||||
Net income (loss) | $ | (747 | ) | $ | 1,023 | $ | 276 | |||||||||
Six months ended June 30, 2008: | ||||||||||||||||
Income (loss) before income taxes | $ | (535 | ) | 43.9 | % | $ | 1,649 | $ | 1,114 | 35.2 | % | |||||
Income tax expense (benefit) | (235 | ) | 627 | 392 | ||||||||||||
Net income (loss) | $ | (300 | ) | $ | 1,023 | $ | 722 | |||||||||
Note that the figures in the preceding tables may not sum due to rounding
For more information about these reconciliations, refer to MasterCard Incorporated’s Form 8-K filed with the Securities and Exchange Commission on July 30, 2009.
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