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 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.

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.

Note: The Second-Quarter Financial Statements are attached above.

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 to www.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.

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.