Net revenue for the first quarter of 2009 was $1.2 billion, a 2.2% decline versus the same period in 2008. The decline in net revenue growth was primarily due to the unfavorable impact of foreign currency exchange and higher rebates and incentives, partially offset by pricing, increased processed transactions and increases in other payment-related services. On a constant currency basis, net revenue increased 1.8% compared to the same period in 2008.

MasterCard's gross dollar volume was up 0.3%, on a local currency basis, versus the first quarter of 2008, to $550 billion. Worldwide purchase volume during the quarter was also up 0.3% on a local currency basis versus the first quarter of 2008, to $411 billion. The number of processed transactions increased 5.8% compared to the same period in 2008, to 5.1 billion. As of March 31, 2009, the company's financial-institution customers had issued 967 million MasterCard cards, an increase of 4.0% over the cards issued at March 31, 2008.

"As we navigate through these challenging economic times, we've taken important steps to better align our operations with the current environment," said Robert W. Selander, MasterCard president and chief executive officer. "We've taken considerable cost-reduction actions allowing us to deliver a strong operating margin of 48.6%, while keeping focused to ensure MasterCard is well positioned for long-term growth.

"As we move forward," Selander added, "we're maintaining a flexible and adaptable approach to ensure we continue to deliver value to our customers. Whether through the innovative products and solutions we offer, or our unmatched advisory and information services, we're making payments easier and more efficient for everyone involved."

Total operating expenses decreased 10.8%, to $595 million, $595 million, during the first quarter of 2009 compared to the same period in 2008. Currency fluctuations contributed 2.9 percentage points to the rate of decline. The decrease in total al operating expenses was driven by:

* A 3.0% decrease in general and administrative expenses, primarily resulting from continued initiatives to reduce travel expenses, professional fees and personnel costs, which included severance costs of $19 million in the quarter. Currency fluctuations representing approximately 2.6 percentage points contributed to the rate of decline; and
* A 35.4% decrease in advertising and marketing expenses versus the year-ago period related to cost containment initiatives, and a favorable foreign currency impact of 3.0 percentage points.

The operating margin was 48.6% for the first quarter of 2009, up 5.0 percentage points over the year-ago period.

Total other expense was $11 million in the first quarter of 2009 versus total other income of $173 million in the first quarter of 2008. The decrease was primarily due to gains realized in the first quarter of 2008 from the sale of a portion of the company's investment in Redecard S.A. Interest expense versus the year-ago period increased $20 million, primarily due to the interest accretion associated with a litigation settlement that occurred in the second quarter of 2008.

MasterCard's effective tax rate was 33.2% in the first quarter of 2009, versus 35.1% in the comparable period in 2008. The decrease was primarily due to an adjustment of deferred taxes.

There were no special items for the first quarter of 2009. The special item for the first quarter of 2008 related to a $75 million pre-tax gain from the termination of a customer business agreement. The company's total other income, 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.