Mastercard (MA) 8-K Record quarterly net income up 69.6% to $215 million, or $1.57 per share, on a diluted basis

MasterCard

Incorporated

1

st

Quarter

2007

Financial

Results

Conference

Call

May

2,

2007

Exhibit 99.2

2

1

st

Quarter Financial Results

•

Delivered

net

income

of

$215

million

and

earnings

per

share

of

$1.57,    

on

a

diluted

basis

•

Achieved

record

revenue

growth

of

23.9%

primarily

due

to:

Gross

dollar

volume

growth

(16.4%

to

$509

billion)

Increase

in

processed

transactions

(19.4%

to

4.2

billion)

Restructured

cross-border

pricing

(implemented

April

2006)

•

Improved

operating

margin

to

34.3%

from

24.7%

in

2006

•

Maintained

already

solid

financial

position

-

$2.5

billion

of

cash,

cash

equivalents

and

available-for-sale

securities

at

quarter

end

3

1

st

Quarter Selected Financial Performance

($ in Millions, except percentages and per share data)

82.7%

(66)

(121)

Tax

Expense

34.9%

(11)

(14)

Interest

Expense

(4.1%)

25

24

Depreciation

and

Amortization

$

0.94

127

21

183

24.7%

183

348

$

739

Actual

1Q 06

67.0%

$

1.57

Diluted

EPS

69.6%

215

Net

Income

(2.3%)

178

Advertising

and

Marketing

75.2%

36

Investment

Income

14.6%

399

General

and

Administrative

71.8%

314

34.3%

Operating

Income

Operating

Margin

23.9%

$

915

Net

Revenue

Growth vs.

1Q 06

Actual

1Q 07

4

MasterCard Branded Volume (GDV) 

First Quarter 2007

Note:

Figures

may

not

sum

due

to

rounding

15.7

15.7

237

United

States

16.4

19.1

509

Worldwide

14.2

12.7

18

Canada

47.0

36.0

9

South

Asia/Middle/East

Africa

(SAMEA)

15.1

18.5

69

Asia

Pacific

23.9

21.8

34

Latin

America

15.2

25.0

141

Europe

Local

Currency

U.S.

Dollar

GDV

($  billions)

YOY Growth Rate %

5

1

st

Quarter Revenue -

Assessments

($ in Millions)

$262

$244

$0

$50

$100

$150

$200

$250

$300

1Q06

1Q07

20%

30%

40%

50%

60%

70%

80%

Net

Assessment

Fees

Net

Assessment

Fees

as

a

%

of

Gross

Assessment

Fees

•

Net

assessments

increased

$18

or

7.4%

to

$262

•

Gross

assessments

increased

$49

or

11.9%

over

2006.

Key

drivers

include:

GDV

growth:

16.4%

Restructured

pricing,

primarily

$31

reclassification

to

operations

fees

(offsets

gross

assessments)

•

Net

assessments

as

a

%

of

gross

assessments

declined

due

to

an

increase

in

incentives

primarily

from:

New

and

renewed

customer

and

merchant

agreements

6

1

st

Quarter

Revenue

-

Operations

Fees

($ in Millions)

•

Net

operations

fees

up

$158

or

31.9%

to

$653

•

Gross

operations

fees

increased

$181

or

33.3%

over

2006.

Key

drivers

include

increases

in:

–

Processed

transactions

growth:

19.4%

–

GDV

growth:

16.4%

–

Restructured

pricing,

including

$31

million

reclassification

from

assessments

•

Net

operations

fees

as

a

%

of

gross

operations

fees

slightly

decreased:

–

New

and

renewed

customer

agreements

–

Impact

of

restructured

pricing

$653

$495

$0

$100

$200

$300

$400

$500

$600

$700

1Q06

1Q07

85%

88%

91%

94%

97%

100%

Net Operations Fees

Net

Operations

Fees

as

a

%

of

Gross

Operations

Fees

7

1

st

Quarter Operating Expenses

($ in Millions)

$0

$100

$200

$300

$400

$500

1Q06

1Q07

General & Administrative

Advertising & Marketing

Depreciation & Amortization

•

Total

operating

expenses

increased

8.2%

to

$601

•

G&A

increased

14.6%

or

$51:

–

Driven

by

increases

in

personnel

costs

and

professional

fees

•

Advertising

and

market

development

decreased

2.3%

to

$178:

Reflects

a

shift

in

planned

spending

to

later

quarters

in

2007

$348

$183

$25

$399

$178

$24

8

Cash Flow Statement and

Balance Sheet Highlights

•

Cash,

cash

equivalents

and

available-for-sale

securities

of

$2.5

billion

•

Stockholders’

equity

at

$2.6

billion

•

Prepaid

expenses

increased

$60

million

primarily

due

to

timing

of

payments

related

to

advertising

and

amounts

due

to

customers

under

incentive

agreements

•

Accrued

expenses

decreased

$134

million

mainly

due

to

payments

of

2006

employee

performance

incentives

and

advertising

•

Generated

$71

million

in

cash

flow

from

operations

during

the

three

months

ended

March

31,

2007

9

2

nd

Quarter 2007 Items for Consideration

($ in millions)

•

No

“grow-over”

effect

from

April

2006

cross-border

pricing

restructuring

•

Rebates

and

incentives

exclude

large

payment

to

debit

issuer

•

Shift

in

“traditional”

A&M

expense

to

the

second

quarter

to

leverage

opportunities

•

2Q06

Special

Items

Litigation settlements

($23)

Contribution

of

stock

to

the

MasterCard

Foundation                    ($395)

Interest

income

on

IPO

proceeds

held

for

redemption                      $7