Mastercard Incorporated (MA) Q1 2011 Earnings Report, Transcript and Summary

Great day, ladies and gentlemen, and welcome to the First Quarter 2011 MasterCard Earnings Conference Call. My name is Thelma, and I will be your coordinator for today's event. [Operator Instructions] As a reminder, today's presentation is being recorded for replay purposes. I would now like to turn today's presentation over to Ms. Barbara Gasper, Head of Investor Relations.

Thank you, Thelma. Good morning, everyone, and thank you for joining us today either by phone or webcast for a discussion about our first quarter 2011 financial results. With me on the call this morning are Ajay Banga, our President and Chief Executive Officer; and Martina Hund-Mejean, our Chief Financial Officer. Following comments from Ajay and Martina, highlighting some key points about the business and our first quarter results, we will open up the call for your questions. This morning's earnings release and the slide deck that will be referenced on this call can be found in the Investor Relations section of our website at mastercard.com. The earnings release and slide deck have also been attached to an 8-K that we filed with the SEC earlier today. A dial-in replay of this call will be available for one week through May 10. Finally, as set forth in more detail in today's earnings release, I need to remind everyone that today's call may include some forward-looking statements about MasterCard's future performance. Actual performance could differ materially from what is suggested by our comments today. Information about the factors that could affect future performance are summarized at the end of our press release, as well as contained in our recent SEC filings. With that, I'd now like to turn the call over to our President and CEO, Ajay Banga. Ajay?

Thank you, Barbara. Good morning, everybody. Before Martina gets into the details of the results, I thought I'd comment as usual on some operational drivers from the quarter, as well as some recent business highlights. In the first quarter, we saw net revenue growth of 14.8% with essentially no real impact from foreign currency exchange rates. We saw healthy GDV growth of 12.8% and an 18.5% increase in cross-border volume. And all of this kind of put together helped fuel first quarter operating income growth of nearly 20% and an EPS growth of 24%. Actually, quite pleased with the solid start to 2011, delivering our second consecutive quarter of double-digit volume growth, including improvement in the United States. Outside of the United States, volumes continue to grow double digit with solid increases in Europe, Latin America and the Asia, Middle East, Africa region, which is up about 20% this last one Asia, Middle East, Africa despite the natural disasters and political upheavals that have occurred there recently. So in particular, we're going to be watching what kind of impact these last mentioned events may have on cross-border volumes. So far, what we've seen is that some of the affected markets have experienced double-digit declines in inbound volumes. But outbound volumes have actually jumped. Other markets have seen related increases in inbound travel volumes, markets such as the United Arab Emirates and Turkey. These variations are normal and usually relatively short-lived, following disruptive events of the type that, that region has seen. We're keeping a close eye on these developments. Returning to the economy. Well I think I'm really glad to see a number of positive trends across the world over the past 6 months, some of which as you can imagine are reflected in our numbers. I still remain concerned…

Thanks, Ajay, and good morning, everyone. Let me begin on Page 3 of the deck, which shows our reported results versus last year's first quarter. Net revenue grew 14.8% to $1.5 billion. Foreign exchange rate fluctuations had essentially no impact. Net revenue growth was driven by increases of 12.8% in gross dollar volume on a local currency basis, 18.5% in cross-border volume, and 11.1% in process transactions. Approximately 5 percentage points of net revenue growth came from pricing. These drivers were partially offset by an increase in rebates and incentives. This quarter, the full 60% of net revenue was generated outside the U.S. as non-U.S. revenue growth continues to outpace growth in the United States. Total operating expenses were up 9.4%. This was primarily due to higher G&A expenses, as a result of strategic investments and the DataCash acquisition, as well as higher marketing expense. Operating income was $836 million, up 19.4%. This resulted in an operating margin for the quarter of 55.7%, 2.2 percentage points higher than last year's first quarter. The effective tax rate declined to 32.8%, primarily due to the geographic mix of earnings and tax planning initiatives. We delivered net income of $562 million, up 23.6%. Earnings per share were $4.29 on a diluted basis, up 24%. So on the next couple of slides we have the breakdown of operational metrics for the first quarter of 2011, compared to the same quarter a year ago. Let's go on Page 4 first, and here you see that worldwide gross dollar volume or GDV was up 12.8% on a local currency basis and grew 15.2% on a U.S. dollar converted basis to $728 billion. This is the highest quarterly growth rate we have seen since the third quarter of 2008. U.S. volume growth was 5.8%. And across the…

Thank you, Martina. We're now ready to begin the question-and-answer period. [Operator Instructions] Operator?

[Operator Instructions] Our first question comes from the line of Bryan Keane with Credit Suisse. Bryan Keane - Crédit Suisse AG: I did want to ask, Ajay, you commented a little bit about impacts or potential impacts due to Durbin. One of the things you said is that there could be a potential benefit from routing of non-exclusivity. So I just want to dig down on that a little bit. Because I remember on the last call, I thought you guys made a point that multiple routing options on signature could be a negative for the industry and maybe MasterCard. So are we specifically talking about both multiple routing options on both signature and PIN, or are you trying to make a distinction there?

It is actually that if there were multiple routing options on signature and PIN, I remember saying that will not be a good outcome for the industry. It will be very confusing. That still remains the case. It's only if the routing options that come out are somewhat simpler than that and are limited to having a non-connected PIN brand along with a signature brand, one at the back, one on the front on the card. I think that is the opportunity when given our lower share of volume today that we would have a volume opportunity. It's not clear to me how this will work out. It's not clear to me what will eventually come out in the rules. It's not yet clear to me what the shorter-term impact will be versus the medium term. But I am looking out and saying just given the reality of my lower share, that should give me some volume benefit over a period of time. Bryan Keane - Crédit Suisse AG: July 21, do you still expect the Fed to have a decision or at least some kind of decision on Durbin by then, or do you think that could be postponed as well?

No, that's what the Fed chairman has said repeatedly, that he and his team will be ready by that date. And I expect him to be absolutely on schedule for that one. I just don't know any more than you do.

Our next question comes from the line of Adam Frisch with Morgan Stanley.

Ajay, you've made several positive and strategic hires lately, both the operating and the board levels. I'm wondering if you could give us a little bit more color on your thoughts and rationale there. What drove these changes, and what we can expect over the next 12 to 18 months, as you continue to accelerate your investments in growth and opportunities around the world in lots of different areas.

We've described our strategy as the strategy of trying to grow our current core businesses of credit, debit, prepaid, commercial. And so part of my hires are meant to reinforce our ability in those spaces, both in terms of product knowledge but also in terms of local regional delivery by country and by region so that's one part of the story. The second part of our investment has been in diversifying our revenue streams across different kinds of clients, not just issuing banks, but also merchants and governments and transit authorities, whether it be the Social Security Administration or the government of Costa Rica, as I just talked about, or the Indian government or stuff of that type. That requires a certain skill set, both in terms of the product, as well as the kind of selling that is required in going to a government or a transit authority, as compared to a normal issuing bank partner of ours. So that's a different kind of space, and so some of the hiring is in that. And finally, a third part of our strategy has been to build out new revenue streams, whether it be get back into competing in e-commerce for a fair share of growth in that booming area, or whether it be to get to play to define the mobile ecosystem, or it be beginning to take advantage of advisors and our very talented people there to start using the data we have to create an information services business. In all of those I needed new talent in some ways. So really what I'm doing is filling out the space that we needed against that grow/diversify/build strategy. We've looked at people in the company, and a number of the jobs have been filled, actually internally, and some have been filled by bringing in people from outside. Martina, do you want to add something on that?

Yes, in addition to that, one facet of this strategy is obviously what we're doing from an acquisition point of view or what we're doing from partnering with other companies. As you know, with the DataCash acquisition and the Travelex and the Card Program Management business for Travelex, we will be -- we have acquired great resources, in terms of people to be really driving spaces in those particular arenas. So that's just another facet of how you can do it.

And Adam, the last thing I'd add is we just added a new member to our board, a lady called Rima Qureshi, who comes from Ericsson and hopefully brings not just global knowledge with her background and her global expertise in running a business, as well as being a very active research and development scientist at Ericsson, but also brings direct, let's say, domain expertise in the mobile space.

Our next question comes from the line of Tim Willi with Wells Fargo.

Another question around mobile. If you think around the emerging markets in the international growth, Ajay, I was wondering if you could just sort of talk about sort of thinking between the actual consumer application of mobile and making a payment versus the impact of the terminalization of these emerging and growing markets. And if you sort of said 2 or 3 years ago, we would expect a growth curve of merchant acceptance points growing at a certain rate. With all that's happened on mobile and the speed of the development there, do you feel like that curve of merchant acceptance has potentially moved to a steeper climb and more rapid terminalization over time to drive the availability of card payment options for consumers?

So Tim, there are 2 angles to this. One angle is in the emerging markets, given the current absence of terminals that would accept something to do with the mobile phone, it's not -- I'm not sure that the mobile payment system ecosystem in those markets was developed the same way, as it might in a somewhat more advantaged country that has better terminalization in place. Mind you, having said that, contactless terminalization is still relatively small, even in the United States and in developed countries. But whether mobile payments develop, and I've said this earlier, as a contactless based system or the SMS based money movement system or as a true mobile commerce-enabled system with the rapid deployment of smart phones in the world, I think that some version of all 3 will begin to develop. Now what we are trying to do is to place bets in all 3 and to be partners with institutions, banks and phone companies and merchants in all 3 spaces. Now will this lead to a more rapid expansion of terminalization? In the sense that if this is part of how you get cash to convert, particularly small ticket cash to convert to electronic payments a CAP [Chip Authentication Program] payments, a newspaper bought somewhere, a transit payment somewhere, yes, I think it will drive terminalization faster. But lots of what needs to happen for that to happen. The cost of those terminals needs to become somewhat cheaper. The fact that if you could find intelligent ways to make that terminal more easy for a small merchant to adapt to, that would help us out. So there's a lot of work to be done in this ecosystem yet. The one angle is to get the issuers and the phone companies and all of us aligned. The other angle is to get terminalization so that the consumers can actually get their money out at the other end or use their phone sensibly at the other end. So I think you'll see a lot of energy going into that space. But I don't know that it’ll happen in 6 months or 1 year, compared to 2 years or 3 years. I don't know the answer to that yet.

Our next question comes from the line of Craig Maurer with CLSA. Craig Maurer - Credit Agricole Securities (USA) Inc.: I wanted to ask, Ajay, your thoughts on the global economy and how recovery is shaping up. I mean, we've got some data out of Hong Kong this morning talking about total retail sales up 26%. But that the high end was up 54%, which is dramatic acceleration over the last 3 months. I mean is the recovery that you're seeing outside the U.S. very similar to what has happened in the U.S. where the haves are dramatically outspending the have-nots in terms of growth? And also if Martina could just comment, are there any seasonal aspects or sponsorship aspects to the marketing line that we should think about for the rest of the year?

Craig, I'm going to answer you the M&A cadence first. We have some very smart seasonal aspects to the sponsorship activity. But maybe it's a little bit more helpful if I can just sketch out for you how we see the rest of the year developing. You saw 12.1% increase in the first quarter numbers. I think for the second and the third quarter, you should also be expecting to see some increases, mainly in the neighborhood of around 10 percentage points versus last year. And then in the fourth quarter, you probably should see a number maybe slightly below of what we have been spending in the last fourth quarter of 2010. So hopefully that's helpful for your model.

And Craig, on the first question. In the U.S., you would expect that when you have a recovery from the kind of difficult circumstances you've been through, that if recovery were to be sustained, you would expect that in the beginning, it would be the more affluent that would come back into the spending circumstance. Think of the stock market going back up again. Think of asset prices, and think of the affluent therefore getting back to feeling that their space and their world is improving again. Think of big companies and manufacturing recovering in the United States, and you'll think of the owners of those companies and the well-placed executives in those, and you'd find that their recovery would spark their spending first. But hopefully as this recovery starts spreading, you will get back to the mass of consumers in the United States coming back into spending. You can see that in the Fed report recently, banks have become more open with their lending standards again in an effort to: one, revise that portion of the market; but two, it reflects their relative comfort of their capital position, compared to where they were, let's say, a year ago. And so it's going to take some time. But I believe it starts from the affluent. But it really spreads through the middle class, and that's where it gets its bedrock. I think overseas in Asia and Latin America, it's a little different. They didn't go through the same, let's say, financial turmoil in exactly the same way that we did in the United States. And to that extent, I think their affluent classes have actually had a relatively good run over the last few years. And the recovery in property prices and the recovery in the global commodity price system and stock price system has generated an enormous amount of wealth in those markets. And that's the spend you're seeing. I used to live in Hong Kong ‘til 2 years ago. Even 2 years ago in the midst of the economic crisis from a developed world, I would tell you the kind of expenditure patterns I saw in Hong Kong were remarkable. And so Hong Kong is what it is, with the prices of everything from jewelry to wine to Christie's auctions, that's Hong Kong. I'm not sure that you should extrapolate from Hong Kong for the rest of the, let's say, newer developing world. Hong Kong is truly a little different from some of the others. But I’d say, as we go along, with a little bit of luck to back to what I've said, if the economic recovery is sustained, then I think you'll see a broader middle class spend coming in. But there are lots of factors that go against it. Martina?

Craig, the one thing that we are really watching very carefully, and Ajay said it in his opening remarks, are food and gas prices, inflation in general. While at the moment, we are really seeing no impact, other than some positive impact from a spending point of view, from a volume point of view on our volume, over the long term, the inflation could be crowding out other discretionary purchases that people can be making. So that is one thing that we all need to be very focused on.

Our next question comes from the line of Andrew Jeffrey with SunTrust.

You laid out a number of different investment initiatives globally from prepaid to mobile, et cetera, SEPA, too. Is there a point at which you start to look at the investment spend in aggregate, both acquisition and sort of organic investment in new initiatives and you start to evaluate ROI? And for those of us on the outside looking in, when do those investments start to move the needle top and bottom line? How should we be thinking about them?

Andrew, let me start. First of all, we are looking at all of our investments together. We don't just look at individual investments and then just add it up. We really look at everything that we need to be doing in certain spaces. We look at the specific business cases. We look at return on investments. But the one thing that we always try to do is we try to make sure that we have some short-term investments that give us shorter-term returns. We look at some medium-type investments that the returns might come over a 2-, 3-year period. And we're doing some longer-term investments. And you could put for instance the mobile activities in there from a longer-term point of view that are returning, or that we think will be returning profits over the longer term, and that's probably beyond the 3-year period. So from a spending point of view, we are very critically evaluating it every step of the way how we do these kind of things. But let me just give you some examples from a shorter-term point of view. We are hoping to have the return come fairly quickly. But when you look at it a quarterly basis, there might be some pain that we have in the meantime. So look at our acquisitions for instance. Look at DataCash, right. We said DataCash to the bottom line in 2011 will not rise the bottom line at this point in time. When in fact you're looking at the first quarter, DataCash contributed about 1.5 percentage points to our 14.8% revenue growth. And it contributed about 3 percentage points to our 9.4% operating expenses. So you can see that there's already a little bit of pain that we have to endure from a shorter perspective on a particular acquisition. And based on what the comment we made from Travelex with the $0.04 to $0.06 dilution in 2011 starting in the second quarter since we just closed the transaction, you will see a little bit pain there. That's why we're saying what we're saying from an operating expense point of view, as well as from an operating margin point of view.

The only thing I'd add is I continue to believe that with so much of the world's transactions being in cash and check, investing some of our capacity to invest in trying to accelerate our position in those places makes a lot of sense. We've been fortunate to have a company with a business model and with a revenue to expense ratio that gives us the opportunity to put some money back. But every single investment inside the company is pretty, let's say, let's call it hotly debated before it reaches the ability to spend money. And Martina is part of that hot debate process.

Our next question comes from the line of Bill Carcache with Macquarie.

Ajay, you mentioned a solution that you, Airtel Africa and Standard Chartered Bank created that won the GSMA Award. I wonder whether you could comment on whether financial inclusion initiatives like these help to better position you with regulators in emerging markets around the world, relative to more developed markets like the U.S. given that you're effectively helping to bring the unbanked into the financial mainstream. And then separately, can you give us an update on the unique identification program in India, and how long it will take before we start seeing some transaction volume as a result of this?

Sure. Working with governments in some of the developing countries in the newer growth countries is actually a very important thing to do, both for purposes of our positioning with regulators, but even more so for actually getting into the business model that will develop in those markets. So it's kind of a two-way thing. I don't think we have a choice if we want to grow in those markets and if we see the ability to convert cash to electronic payments in those markets as a very sizable opportunity then we must do some of these things in a smart and sensible way. So I think working with financial inclusion in those markets -- frankly, I think working on financial inclusion, even in the United States, is the right thing to do where 45-odd million people -- people estimate. I don't know if the number is right. It could be off by a few. But 45-odd million people do not have access to full banking. And if all the implications at Durbin come through, who knows that number may actually increase if retail bank accounts end up getting fees of a certain volume. So I see opportunity in that entire space, both from a business perspective but also from the right kind of image for our company locally. I want consumers to choose what we do with our banks and our merchants because of our offering the right solution for them. And so if there are people who need financial inclusion, you've got to find the right fix for them. That's one part of the answer. The unique identifier project in India, I was in India just a couple of weeks back and met with the authority again. We're at an active stage right now as we demonstrated to…

Our next question comes from the line of Jim Kissane with Bank of America Merrill Lynch.

Martina, you sketched out marketing expense. Is it possible for you to sketch out pricing and rebates incentives for the balance of the year?

Okay, Jim. Somebody had to ask, right? So you are the one. On the pricing side, the only thing that I can really tell you, which I said already in my prepared remarks is that obviously the April 2010 price increase has anniversaried in April. So you're not going to expect to take that going forward. And we also said that over the 2011 to 2013 period, we have included very little pricing going forward. So that should give you a little bit of help for the rest of the year. From a rebates and incentive point of view, we typically don't give any kind of guidance on that. Last year was a little bit of an external ordinary period simply because of all the things we had going on in the rebates and incentive line including the change from a pricing point of view. You should just expect us to continue to go hard after new agreements and we will renew all of our agreements so you should expect another busy period this year.

Our next question comes from the line of Sanjay Sakhrani with KBW. Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc.: My housekeeping question is I was wondering where you stand on providing us updated Maestro data? And I guess the second question is, just that acceleration in U.S. credit card volume growth, I was wondering what was driving that trend. Is it a focus by your customers on the transactor-type customer, or is it same customer volume growth?

Sanjay, let me take your housekeeping item first. Yes, we're trying to get our head around whether or not to put Maestro data out in the market. And we’ve just done quite a bit of analysis. And in the end, we actually concluded that based of the analysis, if you put out the data in the market, it really does not explain our revenues drivers any better than what we have. And let me just explain to you why. First of all, those fees that we're getting from domestic assessment revenues, half of those are actually driven by card fees or other non volume-related fees. So if you want to relate it to volume, half of them just don't relate to volume, and so you just don't have a very good explanation from a driver point of view. The other thing is from a cross-border point of view, as you know, quite a bit of our Maestro fees do come from cross-border transactions. However, the volume of those cross-border transactions compared to total volume is extremely small. And then it's further complicated by that most of those come from the intra-Europe transactions, which have lower pricing as you know, than cards being used outside of Europe. And then lastly, we do still deal with some data inconsistency and particularly in countries where we do not have volume-driven fees, and the volume does not get reported to us. However, the one thing that we do have and we always had in there is Maestro transactions. Any Maestro transactions that we transport over our network are in that process transaction count. And I think that's actually the best way to look at Maestro, simply because it's also over time -- and as Ajay said in his prepared remarks, it will take some time. But over time, you will see some impact from all the great works that our people in Europe do on SEPA. So I think that's where we are leaving it at this point in time.

So as far as your question on U.S. credit volume is concerned, I've said that 2 or 3 things inside there. The first one is, remember, we've also got now some trusts, some business coming in there. Remember that we've got some recovery in the market with most of the banks being willing to go back and look for credit accounts. But the fact is we aren't seeing as yet a huge drop in the number of credit accounts. In fact, in the first quarter, the number of accounts for us still decline by a very small percentage in the United States. But it sort of -- let's say the decline -- the rate of decline has reduced somewhat. So I don't know that the answer has anything to do with accounts. I think it has just to do with the consumer being willing to spend and use their credit lines and their cards. That's truly what's going on. There has been a good recovery in cross-border in the United States both coming in and going out, and I think that's part of it. Promotional cards on the other hand are actually going well and that’s yet another aspect of the business.

Our next question comes from Moshe Katri with Cowen.

Martina, in terms of the impact of contract renewals and rebates for the remainder of the year, are we talking about an unusual number of contract renewals here versus 2012?

2012 or 2010? I didn't know what you were asking – but no, from a renewal point of view, what I'm looking at is a similar active year as in 2010. The only thing that we are still watching out for is, as Ajay had already said from a Durbin point of view, with some issuers are taking business forward as usual, and they're getting their head around it. And for some issuers, they will be waiting a little bit until the final regulations are known. But generally across the world – and you know, now 60% of our revenues come outside of the United States. We are on the ground, and there's a lot of activity going on, so I expect that 2011 will be a similarly active year like 2010.

Our next question comes from the line of Tom McCrohan with Janney Capital Markets.

Martina, just wanted an update on gas prices. They’ll certainly probably provide some benefits this quarter. Can you give us an update on how payment volumes and net revenue growth were impacted by fuel inflation?

Sure. Gas prices did help a little bit in terms of driving. I have to tell you it helped slightly, okay, to drive the volume and the transaction. From a volume point of view, it's now about 8%, just about 8% of volume and it’s just slightly over 15% from a transaction point of view. So it moved the needle just a little bit, and you can see from an average ticket point of view, it also went up just very slightly.

Our next question comes from the line of Julio Quinteros with Goldman Sachs.

Just quickly on the specialty. Just on the discussions with the banks, maybe, Ajay, if you could just give us some sense on whether the banks are at this point at all indicating that they want to bundle discussions potentially on credit and debit as you sort of think about a post-Durbin post-Card Act world, and just help us walk through what you guys are hearing from the banks directly, and maybe any sense from you guys on what you're thinking around some of the mitigation strategies might be. Obviously new products and things like that are going to help, but any sense there in terms of how the banks are talking to you guys, and are they bundling credit or debit at this point?

Your question’s a very deep question. And I haven't yet seen bundling of debit and credit discussions. Although remember that the way banks operate those 2 businesses tend to be in somewhat different business lines inside, and they're answering different consumer needs in many ways. So I don't know that, that actually will lead to a bundling in some way other than with maybe a few very large global accounts where that kind of conversation may happen. This fee, it's early -- it's very, very difficult to talk about what banks are planning to do with Durbin just because in the last couple of months, given all the progress on trying to get the bill on the floor of Congress, the focus has been around that. At the same time, within our company is with all the issuing organizations. There are teams of people working on different scenarios to do with where this could end up. My sense is that some of it is pretty much out there in the open, that the level if it were to go through the way it was originally proposed, the level of, let's say, revenue going away from issuer revenue lines is so large that they're going to have to find ways to get back some of that. And that's the experience we had in Australia, whether it be through fees on checking accounts or fees on cards, or restricted expenditure on debit cards of certain types, or the stoppage of rewards on debit cards or the disincenting of employees in branches to sell debit cards, all of which might lead to a somewhat different way of consumer spending, maybe more on their credit line. It might also lead to a number of consumers not being able to afford their banking accounts with as much ease as they used to, and that may lead to a prepaid card getting more and more attention, and issuers as a way to cater to that customer. So at the lower end of the spectrum, you know what I mean? So from credit on one end, to paper at the lower end, to the actual impact on debit, then think within debit, it's unclear to me right now, whether signature and PIN will be here the way they used to. It's unclear to me whether merchants will be incented to put in more PIN pads or not if the -- if the discount rate on the 2 is the same. It's unclear to me therefore how merchants will behave in this. And so there are so many imponderables that what we've got is a series of different, let's say, situations and our operating system within those. And that's what we're doing, and it's like a whole laundry list of things that are going on inside our company and inside our competitors, I'm sure, and inside issuing banks. That's kind of where it is.

At this time, our next question comes from the line of David Togut with Evercore Partners.

I apologize if this question was asked. I was joining late from another call. But Ajay, have you had any conversations with the Federal Reserve with respect to their leanings on network non-exclusivity, alternative a versus alternative b?

No, I haven't actually. Because if you remember during the comment period, they had no conversations whatsoever. And they're still now working through figuring it out because I am not going to have any direct conversation with them after the original discussions that have been happening. However, people in different organizations, ours and others, have, I'm sure, in the last couple of weeks been engaged in those conversations. But we have no way of knowing what's in their mind.

This concludes our time for questions. I would like to turn the call back over to Barbara for closing remarks.

Ajay, do you have something you’d like to add at the end?

Just a few closing thoughts. As we have said, Martina and I, we're off to a really good start for 2011. We kind of remain positive about our ability to deliver on those longer-term financial objectives that she reminded you about. But we are very cognizant of 2011 not being without its challenges. First and foremost, there is the impact of those natural disasters and political upheaval that we’ve just got to continue to keep an eye on. Secondly, while there are a number of positive signs in the economy, we continue to watch the economy very carefully, given concerns that remain around unemployment and the housing market in the United States, and as Martina reminded you, around food and oil prices around the globe. And of course, we've got to keep working our way through the ultimate impact of this U.S. debit regulation, which will depend both on the final regulation, the outcome of the bill, what the Fed said and of the reactions of all the stakeholders. As we've said and as Martina said, we are going to continue to invest in our business. This is part of the execution of our strategy to differentiate MasterCard and position the company to capture more than its fair share of growth. We have made several significant steps recently, including the acquisition of Travelex's Card Program Management assets and DataCash, as well as we've established for some JVs, mostly in the mobile payment space. We look forward to communicating more such developments in the future. Thank you for your time today, and thank you for your faith in our company.

Thank you for your participation in today's conference. That concludes the presentation. You are free to disconnect, and have a great day.