Mastercard Inc Quarterly Report for Q1 Ended Mar 31, 2011

Summary

Mastercard Inc. (MA) reported strong financial results for the first quarter ended March 31, 2011. Net income attributable to the company surged by 23.6% year-over-year to $562 million, translating to a diluted EPS of $4.29, up from $3.46 in the prior year. This performance was driven by a robust 14.8% increase in net revenues to $1.501 billion, largely fueled by higher transaction volumes and pricing adjustments. The company's balance sheet remains solid, with total assets of $8.502 billion and total equity of $5.202 billion. Liquidity is strong, evidenced by $2.954 billion in cash and cash equivalents. Mastercard also demonstrated a commitment to returning capital to shareholders, repurchasing $654 million worth of its common stock during the quarter and announcing an expanded $2 billion share repurchase program. The acquisition of Travelex's prepaid card program management operations (CPM) for approximately $481 million, completed in April 2011, is expected to expand Mastercard's offerings in the prepaid segment, particularly in markets outside the United States.

Key Highlights

• 1Net income increased 23.6% to $562 million, or $4.29 per diluted share.
• 2Net revenues grew 14.8% to $1.501 billion, driven by increased transaction volumes and pricing changes.
• 3Gross Dollar Volume (GDV) on a U.S. dollar converted basis increased 15.2% year-over-year.
• 4Operating expenses increased 9.4%, primarily due to higher general and administrative and advertising/marketing expenses.
• 5The company repurchased $654 million of its Class A common stock in the first quarter of 2011.
• 6Acquisition of Travelex's prepaid card program management operations (CPM) for approximately $481 million completed in April 2011.
• 7Strong operating cash flow of $355 million for the quarter.

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