MasterCard Incorporated (MA)
Q4 2008 Earnings Call Transcript
February 5, 2009 9:00 a.m. ET

Executives

Barbara Gasper – Senior Vice President & Group Executive, Investor Relations
Robert W. Selander – President & Chief Executive Officer
Martina Hund-Mejean – Chief Financial Officer

Analysts

Julio C. Quinteros – Goldman Sachs & Co.
Tien-Tsin Huang – JPMorgan
Andrew Jeffrey – SunTrust Robinson Humphrey
Craig Maurer – Calyon Securities
David Hochstim – Buckingham Research Group
Jason Kupferberg – UBS
Adam Frisch – UBS
Christopher Brendler – Stifel Nicolaus & Co.
Gora Bora – Raymond James & Associates
Christopher Mammone – Deutsche Bank Securities

Presentation

Operator

Good day ladies and gentlemen, and welcome to the Q4 2008 MasterCard earnings conference call. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of this conference at which time you may participate by pressing “*” followed by “1” on your touchtone telephone. If at any time during the call you require audio assistance, please press “*” followed by “0” and an operator will be happy to assist you.

I would now like to turn the call over to Barbara Gasper, Group Executive, Investor Relations. Please proceed ma’am.

Barbara Gasper

Thank you Antoine and good morning to everyone. Thank you for joining us today either by phone or webcast for a discussion about our fourth quarter and full-year 2008 financial results. With me on the call this morning are Bob Selander, our Chief Executive; Martina Hund-Mejean, our Chief Financial Officer and Tara Maguire, our Corporate Controller. Following comments from Bob and Martina highlighting some key points about the business environment and our fourth quarter and full year results we will open the call up for your questions.

This morning’s earnings release and the slide deck that will be referenced on this call can be found in the Investor Relations section of our website www.mastercard.com. The earnings release and slide decks have also been attached to an 8-K that we filed with the SEC earlier this morning. A replay of this call will be posted on our website for one week until February 12th.

Finally, as set forth in more detail in today’s earnings release I need to remind everyone that today’s call may include some forward-looking statements about MasterCard''s future performance. Actual performance could differ materially from what is suggested by our comments today. Information about the factors that could affect future performance are summarized at the end of our press release as well as contained in our recent SEC filings.

With that, I will now to turn the call over to Bob Selander. Bob.

Robert W. Selander

Thanks Barbara and good morning everybody. I would like to start out by saying that I am pleased that we have been able to deliver another strong quarter of earnings results. We saw net revenue growth of over 14% despite the headwinds from the strengthening U.S. dollar and improved our operating margin by approximately 22 percentage points versus the year-ago quarter.

We have seen the economic downturn hit consumers and businesses alike but our business model and global diversity provides a good degree of resilience in this environment. I would like to take a few moments to discuss our view of the global economy, our fourth quarter results which Martina will take you through in more detail and then offer some comments about our capital structure.

I am on slide two in the material that you may be following along. Turning first to the economy, as a result of the current economic turbulence the world is facing significant challenges which can only be addressed with time. The U.S. recession continues with low consumer confidence due to a difficult housing market impacting net worth and rising unemployment now putting more stress on household incomes.

The economic issues are not limited to the United States. We are seeing government bailouts and economic stimulus packages from the U.K. to China to the Netherlands. We are seeing banks in several countries being, or close to being nationalized. We expect the climate to remain challenging in 2009 and we are not counting on any improvements this year.

Although precise timing is something no one can predict we continue to expect that things will begin to improve in 2010 depending on the stabilization in the housing markets, the specifics and timing of any stimulus packages and the resulting impact on consumer confidence and employment.