Mastercard Incorporated · NYSE:MA
Mastercard — Q4 2006 Earnings Presentation
14 slides from Mastercard's earnings presentation, Feb 9, 2007
Slide 1: Fourth Quarter and Full-Year 2006 Financial Results Conference Call
February 9, 2007 Exhibit 99.2 MasterCard Incorporated th Quarter and Full-Year 2006 Financial Results Conference Call
Slide 2: Fourth Quarter Financial Results
2 • Delivered net income of $41 million and earnings per share of $0.30 • Achieved strong revenue growth of 17.2% primarily due to: – Gross dollar volume growth (13.8% to 532 billion) – Increase in processed transactions (17.4% to 4.4 billion) – Restructured cross-border pricing (implemented April 2
Slide 3: 2006 Accomplishments
3 • Largest U.S. listed IPO in 2006 • Transformed governance structure - new Board of Directors with global representation • Celebrated 40th anniversary and successfully launched new corporate brand • Established The MasterCard Foundation • Made great progress with PayPass initiative • Maestro annou
Slide 4: Fourth Quarter Selected Financial Performance
4 ($0.26) (35) 26 7 (18) 21 (71) (9.9%) 26 _ _ 386 375 $ 716 4Q 2005 adjusted for special items* $0.30 41 (29) _ (17) 41 46 5.5% 25 14 2 353 399 $ 839 4Q 2006 GAAP NM _ Litigation settlements 140.0% (30) Income tax expense (5.6%) (17) Interest expense (3.8%) 25 Depreciation and amortization NM 14 Ch
Slide 5: MasterCard Branded Volume (GDV) Fourth Quarter 2006
5 Note: Figures may not sum due to rounding 14.5 14.5 244 United States 13.8 16.8 532 Worldwide 13.2 16.8 20 Canada 38.3 30.9 9 South Asia / Middle East / Africa 6.8 11.2 77 Asia Pacific 24.8 24.5 37 Latin America 12.9 21.5 145 Europe Local Currency U.S. Dollar GDV ($ billions) YOY Growth Rate % Mas
Slide 6: Fourth Quarter Revenue - Assessments
6 $177 $189 $0 $50 $100 $150 $200 $250 $300 4Q05 4Q06 20% 30% 40% 50% 60% 70% 80% Net Assessment Fees Net Assessment Fees as a % of Gross Assessment Fees • Net assessments down $12 or 6.4% • Gross assessments increased $53 or 12.4% over 2005. Key drivers include: – GDV increases – Restructured prici
Slide 7: Fourth Quarter Revenue - Operations Fees
7 • Net operations fees up $135 or 25.6% • Gross operations fees increased $159 or 27.3% over 2005. Key drivers include increases in: – Processed transactions: 17.4% – GDV: 13.8% – Restructured pricing, including $33 reclassification from assessments • Net operations fees as a % of gross operations
Slide 8: Fourth Quarter Operating Expenses
8 $0 $100 $200 $300 $400 $500 4Q05 4Q06 General & Administrative Advertising & Marketing Depreciation & Amortization Charitable Contributions $375 $386 $26 $399 $353 $25 • Total operating expenses decreased 2.6% to $793: – Adjusted for special items, increased 0.5% • Charitable contributions increas
Slide 9: Cash Flow Statement and Balance Sheet Highlights
9 • Generated $650 million in cash flow from operations during 2006 • Cash, cash equivalents and available-for-sale securities of $2.5 billion • Stockholders’ equity at $2.4 billion • Accounts receivable increased $104 million primarily due to: – Pricing recalibration in Europe – Higher volume and a
Slide 10: 2007 Items for Consideration
10 • No “special items” in 1Q 2006 • 1Q07 last “grow-over” quarter resulting from April 2006 cross-border price restructuring • Advertising and marketing spend pattern more representative of a non-World Cup soccer year 2007 Items for Consideration
Slide 11: Full-Year 2006 Progress
11 30.9% Return on equity, excluding IPO proceeds 44.2% Deliver net income growth* 2.9 ppt improvement versus 2005 Continued margin improvement* 13.2% Grow revenue FY 2006 * See Appendix A for a GAAP reconciliation of special items for the three and twelve months ended December 31, 2005 and 2006 Ful
Slide 12: MasterCard Worldwide: The Heart of Commerce
MasterCard Worldwide The Heart of Commerce”
Slide 13: Appendix A: GAAP Reconciliation, Fourth Quarter
13 a Litigation settlements b Contribution of cash to the MasterCard Foundation NM = Not meaningful ($ million) YOY Growth Actual Special Items As Adjusted Actual Special Items As Adjusted As Adjusted Revenues, net $839 - $839 $716 - $716 17.2% Operating Expenses General and administrative 399 - 399
Slide 14: Appendix A: GAAP Reconciliation, Full Year
14 a Litigation settlements b Contribution of cash to the MasterCard Foundation c Adjustment to reflect accounting methodology change for cash-based executive incentive plans d Contribution of common stock to the MasterCard Foundation e Interest income on IPO proceeds which were used for redemption