UPDATE: MasterCard details '09 net income guidance, plans for shelf filing

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Related Companies MasterCard Inc. (MA)

Related Documents Investor Presentation (EP) MasterCard Inc. 9/30/2009, filed on 11/3/2009 Transcript (ET) MasterCard Inc. 11/3/2009

MasterCard Inc. management on Nov. 3 provided guidance on expenses, net revenue growth and net income growth and detailed plans for a shelf registration.

During an earnings conference call, MasterCard CFO Martina Hund-Mejean said the company expects rebates and incentives to be higher than in the year-ago period due to new and renewed customer agreements and rebates related to pricing initiatives that were recently implemented.

Despite the increase, Hund-Mejean said MasterCard expects full-year total operating expenses to be down on a year-over-year basis, including the impact of all severance charges, adding that the company will incur additional severance charges in the fourth quarter, but it is too early to determine the scope of the charges.

Hund-Mejean reiterated that the fiscal year's advertising and marketing spending will be lower than fiscal year 2008, and spending in the third and fourth quarters will be "significantly higher" than in the first half of 2009. Advertising and marketing expenses are now expected to be 20% higher in the fourth quarter than in the year-ago quarter, and Hund-Mejean reaffirmed expectations that MasterCard will fall below its long-term minimum average net revenue growth objective of 12% on a constant currency basis.

"We now expect our full-year 2009 tax rate to be approximately 34%," Hund-Mejean said. "Since our year-to-date tax rate at 33.6% is lower than this, keep in mind that our fourth-quarter rate will have to be higher than the previous quarters. Based on these assumptions, we anticipate we would be able to achieve at least 20% net income growth for 2009 excluding any impact of severance charges."

Regarding the company's shelf registration, which Hund-Mejean expects to file "in the next few days," the CFO said the company does not have any specific plans to complete an offering or pursue an acquisition. CEO Robert Selander added that MasterCard is committed to properly screening investment opportunities for potential synergies, and the company continues to be opportunistic in looking at the market.

"Clearly, with our balance sheet and capital position, we feel we have the flexibility when we see opportunities to move on them," he said.