Total operating expenses decreased 10.8%, to $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 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.