Mastercard Investor Presentation — July 2018 - Mastercard

July 26, 2018 Mastercard Incorporated Second-Quarter 2018 Financial Results Conference Call

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July 26, 2018 Mastercard

Financial & Operational Overview

2nd Quarter Selected Financial Performance

($ in millions, except per share data)

Non-GAAP12Q 17 Non-GAAP Neutral

Net revenue $ 3,665 $ 3,053 20% 18%

Total operating expenses 1,504 1,400 7% 6%

Operating income 2,161 1,653 31% 28%

Operating margin 59.0 % 54.1 % 4.9 ppt 4.7 ppt

Net income $ 1,744 $ 1,177 48% 45%

Diluted EPS $ 1.66 $ 1.10 51% 48%

Effective tax rate 18.8 % 27.7 %

1 Excludes special items relating to litigation provisions. See Appendix A for Non-GAAP reconciliation.

Martina Hund-Mejean:

Thanks Ajay, and good morning everyone. Turning to page 3, we are very pleased to deliver another strong quarter,

even when you exclude the 2 ppt tailwind from foreign exchange to net revenue and the 3 ppt to net income, which

is primarily due to the appreciation of the Euro since last year. I will now highlight the numbers on a currency-

neutral basis, and also exclude special items related to litigation provisions, most of which we had already

announced in late June.

•Net Revenue grew 18% , driven by strong underlying performance, and includes a 4 ppt benefit from the new

revenue recognition rules and acquisitions. Excluding this, underlying revenue growth was 14% .

•Operating Expenses increased by 6%, which includes a 6 ppt increase due to the new revenue recognition rules

•Operating Income grew by 28% , or 26% if you exclude the revenue recognition and acquisition-related impacts

•Net Income was up 45% , reflecting strong operating results and the impact of U.S. Tax Reform, which

contributed approximately 7 ppt to this Net Income growth.

•EPS was $1.66 , up by 48% year-over-year, with share repurchases contributing 3 cents per share. During the

Credit Debit/Prepaid$1,600

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