Mastercard Investor Presentation — May 2018 - Mastercard

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May 2, 2018 Mastercard

Financial & Operational Overview

1st Quarter Selected Financial Performance

($ in millions, except per share data)

1Q 18 1Q 17 Currency

Non-GAAP1Non-GAAP1Non-GAAP Neutral

Net revenue $ 3,580 $ 2,734 31% 27%

Total operating expenses 1,638 1,213 35% 32%

Operating income 1,942 1,521 28% 23%

Operating margin 54.2 % 55.6 % (1.4) ppt (1.8) ppt

Net income $ 1,581 $ 1,091 45% 39%

Diluted EPS $ 1.50 $ 1.01 49% 43%

Effective tax rate 17.7 % 26.9 %

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

Martina Hund-Mejean:

Thanks Ajay, and good morning everyone. We are very pleased to deliver a strong start to the year, even when you

exclude the 4 ppt tailwind from foreign exchange to net revenue and the 6 ppt to net income, primarily due to the

appreciation of the Euro since last year. Here on page 3 , I will now highlight the numbers on a currency-neutral

basis, excluding special items related to litigation provisions.

•Net Revenue grew 27% , driven by strong underlying performance, and includes a 4 ppt benefit from the new

revenue recognition rules and a 2.5 ppt benefit from acquisitions. Excluding these items, underlying revenue

•Operating Expenses increased by 32% which includes 20 ppt of growth due to acquisitions, our charitable

contribution to the Center for Inclusive Growth, and the impact of the new revenue recognition rules. Underlying

expense growth was 12% .

•Operating Income grew by 23%, or 27% on an underlying basis based on the adjustments to revenue and

operating expense I just noted.

•Net Income was up 39% , reflecting strong operating results and the impact of the U.S. Tax Reform, which

contributed approximately 8 ppt to this Net Income growth.

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