|Barbara Gasper MasterCard Worldwide 914-249-4565|
|Chris Monteiro MasterCard Worldwide 914-249-5826|
MasterCard Incorporated Reports First-Quarter 2009 Financial Results
• First-quarter net income of $367 million, or $2.80 per diluted share
• First-quarter net revenue decline of 2.2%, to $1.2 billion
• First-quarter gross dollar volume and purchase volume up 0.3%
Net revenue for the first quarter of 2009 was $1.2 billion, a 2.2% decline versus the same period in 2008. The decline in net revenue growth was primarily due to the unfavorable impact of foreign currency exchange and higher rebates and incentives, partially offset by pricing, increased processed transactions and increases in other payment-related services. On a constant currency basis, net revenue increased 1.8% compared to the same period in 2008.
MasterCard’s gross dollar volume was up 0.3%, on a local currency basis, versus the first quarter of 2008, to $550 billion. Worldwide purchase volume during the quarter was also up 0.3% on a local currency basis versus the first quarter of 2008, to $411 billion. The number of processed transactions increased 5.8% compared to the same period in 2008, to 5.1 billion. As of March 31, 2009, the company’s financial-institution customers had issued 967 million MasterCard cards, an increase of 4.0% over the cards issued at March 31, 2008.
“As we navigate through these challenging economic times, we’ve taken important steps to better align our operations with the current environment,” said Robert W. Selander, MasterCard president and chief executive officer. “We've taken considerable cost-reduction actions allowing us to deliver a strong operating margin of 48.6%, while keeping focused to ensure MasterCard is well positioned for long-term growth.
“As we move forward,” Selander added, “we're maintaining a flexible and adaptable approach to ensure we continue to deliver value to our customers. Whether through the innovative products and solutions we offer, or our unmatched advisory and information services, we're making payments easier and more efficient for everyone involved.”
Total operating expenses decreased 10.8%, to $595 million, during the first quarter of 2009 compared to the same period in 2008. Currency fluctuations contributed 2.9 percentage points to the rate of decline. The decrease in total operating expenses was driven by:
- A 3.0% decrease in general and administrative expenses, primarily resulting from continued initiatives to reduce travel expenses, professional fees and personnel costs, which included severance costs of $19 million in the quarter. Currency fluctuations representing approximately 2.6 percentage points contributed to the rate of decline; and
- A 35.4% decrease in advertising and marketing expenses versus the year-ago period related to cost containment initiatives, and a favorable foreign currency impact of 3.0 percentage points.
Total other expense was $11 million in the first quarter of 2009 versus total other income of $173 million in the first quarter of 2008. The decrease was primarily due to gains realized in the first quarter of 2008 from the sale of a portion of the company’s investment in Redecard S.A. Interest expense versus the year-ago period increased $20 million, primarily due to the interest accretion associated with a litigation settlement that occurred in the second quarter of 2008.
MasterCard's effective tax rate was 33.2% in the first quarter of 2009, versus 35.1% in the comparable period in 2008. The decrease was primarily due to an adjustment of deferred taxes.
There were no special items for the first quarter of 2009. The special item for the first quarter of 2008 related to a $75 million pre-tax gain from the termination of a customer business agreement. The company's total other income, 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.
*Q12009 Financial Statements are attached above.
First-Quarter 2009 Financial Results Conference Call Details
At 9:00 a.m. EDT today, the company will host a conference call to discuss its first-quarter 2009 financial results.
The dial-in information for this call is 866-711-8198 (within the U.S.) and 617-597-5327 (outside the U.S.) and the passcode is 20007083. 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 64388164.
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 to www.mastercard.com.
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 be well positioned for long-term growth; and
- The company’s ability to continue making payments easier and more efficient for all involved through the offering of innovative products and solutions, and advisory and information services