Mastercard (MA) 8-K Fourth-quarter net revenue growth, up 27.8%, to $1.07 billion

MasterCard

Incorporated

4

th

Quarter

and

Full-Year

2007

Financial

Results

Conference

Call

January 31, 2008

Exhibit 99.2

2

4

th

Quarter

Financial

Results

•

Delivered quarterly net income of $304 million and earnings per

share

of

$2.26,

on

a

diluted

basis

(including

$1.37

from

gains

on

additional

sales

of

Redecard

investment)

•

Achieved

quarterly

net

revenue

of

$1.07

billion,

representing growth of

27.8% primarily due to:

–

Gross

dollar

volume

growth

(15.2%

*

to

$634

billion)

–

Increase

in

processed

transactions

(17.2%

to

5.2

billion)

–

Increase

in

cross-border

volumes

(27.7%)

–

Pricing

adjustments

(2%)

•

Improved operating margin by 10.3 ppts. to 16.0% from 5.7% in Q4

2006**

*

On a local currency basis

** Excluding special items; see Appendix A for a GAAP reconciliation of special items for the three and twelve months ended    

December 31, 2006 and 2007

3

Impact

of

U.S.

Economic

Uncertainty

MasterCard‘s

distinct

business

drivers

help

to

weather

U.S.

economic

slowdown:

•

Despite

change

in

spending

patterns,

consumers

continue

to

transact

•

About

half

of

business

outside

the

U.S.

•

Continued

secular

shift

from

paper

to

electronic

payments

•

No

direct

consumer

credit

exposure

4

Business

Update

•

EC

Decision

•

SEPA

Update

•

Litigation

Update

•

Redecard

Investment

•

Share

Conversion

and

Repurchase

5

$   0.30

$

41

46                                                               

5.5%

793

$       839 

4Q 2006

Actual

$

2.26

$

304

172

16.0%

901

$

1,073

4Q 2007

Actual

$

0.31

$

42

48

5.7%

791

$

839

4Q 2006

adjusted for

special items*

629.0

Diluted

EPS

623.8

Net income

13.9

Total

operating

expenses

258.3

10.3 ppts

Operating income

Operating margin

27.8

Net revenue

YOY Adjusted

Growth %

4

th

Quarter

Selected

Financial

Performance

($

in

millions,

except

percentages

and

per

share

data)

Note: Figures may not sum due to rounding

*See

Appendix

A

for

a

GAAP

reconciliation

of

special

items

for

the

three

and

twelve

months

ended

December

31,

2006

and

2007

6

MasterCard Branded Volume (GDV) 

4

th

Quarter 2007

Note: Figures may not sum due to rounding

10.0

10.0

268

United

States

15.2

20.9

634

Worldwide

16.6

35.1

27

Canada

34.1

43.6

12

South

Asia/Middle

East/Africa

(SAMEA)

19.0

26.4

88

Asia

Pacific

22.0

28.2

47

Latin America

18.4

31.7

190

Europe

Local

Currency

U.S.

Dollar

GDV

($  billions)

YOY Growth Rate %

7

4

th

Quarter

Revenue

-

Operations

Fees

($

in

millions)

•

Net operations fees up 25.2%,  or

$167 to $829

•

Gross

operations

fees

increased

25.2%, or $186 to $925.  Key

drivers included:

–

Processed

transactions

growth: 17.2%

–

Cross-border

volume growth

of 27.7%

–

GDV growth: 15.2%*

–

Pricing

adjustments

of

2%

•

Net operations fees as a % of

gross operations fees remained

unchanged

* On a local currency basis

$662

$829

$0

$150

$300

$450

$600

$750

$900

4Q06

4Q07

85%

88%

91%

94%

97%

100%

Net Operations Fees

Net Operations Fees as a % of Gross Operations Fees

8

4

th

Quarter

Revenue

-

Assessments

($

in

millions)

•

Net

assessments

increased

37.9%, or $67 to $244

•

Gross

assessments

increased

18.5%, or $89 to $569 due to

strong

GDV

growth

of

15.2%*

•

Net

assessments

as

a

%

of

gross

assessments

improved

* On a local currency basis

$177

$244

$0

$50

$100

$150

$200

$250

$300

4Q06

4Q07

20%

30%

40%

50%

60%

70%

80%

Net

Assessment

Fees

Net

Assessment

Fees

as

a

%

of

Gross

Assessment

Fees

9

4

th

Quarter

Operating

Expenses

($

in

millions)

•

Total

operating

expenses

increased

13.5%,

or

$107

to

$901

•

G&A increased 24.1%, or $96, to $496 driven by:

–

Higher

personnel

costs

for

additional

staff

–

Increased

employee

performance

incentives

–

Severance

expense

for

staff

realignment

–

Professional

fees

for

legal

costs

to

defend

outstanding

litigation

•

A&M

increased

4.5%,

or

$16,

to

$369

primarily due

to currency fluctuations

•

Charitable

cash

contribution

of

$10

to

MasterCard

Foundation

10

Full-Year 2007 Highlights

•

Delivered

full-year

net

income

of

$1.09

billion

and

earnings

per

share

of

$8.00,

on

a

diluted

basis

(including

$1.87

from

gains

on

sale

of

a

significant

portion

of

Redecard

investment)

•

Achieved

full-year

net

revenue

of

$4.1

billion,

representing

growth

of 22.3%

primarily due to:

–

Gross

dollar

volume

growth

(14.4%

*

to

$2.3

trillion)

–

Increase

in

processed

transactions

(16.2%

to

18.8

billion)

–

Increase

in

cross-border

volumes

(21.1%)

–

Pricing

adjustments

(2%)

•

Improved

operating

margin

by

7.8

ppts.,

to

27.3%

from

19.5%

in

the full-

year

2006**

*

On a local currency basis

** Excluding special items; see Appendix A for a GAAP reconciliation of special items for the three and twelve months ended    

December 31, 2006 and 2007

11

Cash

Flow

Statement

and

Balance

Sheet

Highlights

•

Generated

$770

million

in

cash

flow

from

operations

during

the

year

ended

12/31/07

•

Cash,

cash

equivalents

and

available-for-sale

securities

of

$3

billion

at

12/31/07

•

Capital

expenditures

increased

to

$156

million

•

Repurchased

approximately

4

million

Class

A

shares

for

$601

million

–

As

of

January

25,

2008,

repurchased

additional

657

thousand

shares

for

$124

million

•

Accrued

expenses

increased

$135

million

mainly

due

to

customer

and

merchant

incentives

and

higher

personnel

costs

12

2008

Outlook

•

Evaluating

existing

3-5

year,

long-term

performance

objectives

–

Will

address

at

Investment

Community

meeting

in

Spring 2008 

•

Thoughts

for

2008:

–

Net

revenue

growth:

slower

than

2007,

but

still

double-digit

–

G&A

growth:

slower

than

net

revenue

growth

and

below

2007

G&A

growth

rate

–

A&M

growth:

continued

modest

growth

•

Assume

current

F/X

rates,

no

global

recession

and

no

event

which

significantly

disrupts

cross-border

travel

14

Appendix

A:

GAAP

Reconciliation

a

Litigation settlements

b

Contribution of cash to the MasterCard Foundation

c

Contribution of stock to the MasterCard Foundation

d

Interest income on IPO proceeds held for redemption

e

Other income related to a settlement agreement to discontinue the company's sponsorship of the 2010 and 2014 World Cup soccer events

NM = Not meaningful

Figures may not sum due to rounding

($ million)

YOY Growth

Actual

Special

Items

As Adjusted

Actual

Special

Items

As

Adjusted

As Adjusted

Revenues, net

$1,073

-

$1,073

$839

-

$839

27.8%

Operating Expenses

General and administrative

496

-

496

399

-

399

24.3%

Advertising and marketing

369

-

369

353

-

353

4.5%

Litigation settlements

-

-

-

2

2

a

-

-

Charitable contributions to the MasterCard Foundation

10

-

10

b

14

-

14

b

(28.6%)

Depreciation and amortization

26

-

26

25

-

25

4.0%

Total operating expenses

901

-

901

793

2

791

13.9%

Operating income

172

-

172

46

2

48

258.3%

Operating Margin

16.0%

-

16.0%

5.5%

-

5.7%

10.3 ppts.

Other Income (Expense)

Investment income, net

311

-

311

41

-

41

658.5%

Interest expense

(15)

-

(15)

(17)

-

(17)

(11.8%)

Other income, net

(1)

-

(1)

-

-

-

NM

Total other income

295

-

295

24

-

24

NM

Income before income taxes

467

-

467

70

2

72

548.6%

Income tax expense

163

-

163

29

1

30

443.3%

Net Income (loss)

$304

-

$304

$41

1

$42

623.8%

Basic Net Income (Loss) per Share

$2.28

-

$2.28

$0.30

$0.01

$0.31

635.5%

Diluted Net Income (Loss) per Share

$2.26

-

$2.26

$0.30

$0.01

$0.31

629.0%

For the three months ended 12/31/07

For the three months ended 12/31/06

15

Appendix

A

(cont.):

GAAP

Reconciliation

a

Litigation settlements

b

Contribution of cash to the MasterCard Foundation

c

Contribution of stock to the MasterCard Foundation

d

Interest income on IPO proceeds held for redemption

e

Other income related to a settlement agreement to discontinue the company's sponsorship of the 2010 and 2014 World Cup soccer events

NM = Not meaningful

Figures may not sum due to rounding

($ million)

YOY Growth

Actual

Items

As Adjusted

Actual

Items

Adjusted

As Adjusted

Revenues, net

$4,068

-

$4,068

$3,326

-

$3,326

22.3%

Operating Expenses

General and administrative

1,758

-

1,758

1,505

-

1,505

16.8%

Advertising and marketing

1,080

-

1,080

1,052

-

1,052

2.7%

Litigation settlements

3

3

a

-

25

25

a

-

-

Charitable contributions to the MasterCard Foundation

20

-

20

b

415

395

c

20

b

-

Depreciation and amortization

98

-

98

100

-

100

(2.0%)

Total operating expenses

2,959

3

2,956

3,097

420

2,677

10.4%

Operating income

1,108

3

1,111

229

420

649

71.2%

Operating Margin

27.2%

-

27.3%

6.9%

-

19.5%

7.8 ppt.

Other Income (Expense)

Investment income, net

530

-

530

125

(7)

d

118

349.2%

Interest expense

(57)

-

(57)

(61)

-

(61)

(6.6%)

Other income, net

90

90

e

-

1

-

1

NM

Total other income (expense)

563

90

473

65

(7)

58

715.5%

Income before income taxes

1,671

(87)

1,584

294

413

707

124.0%

Income tax expense

586

30

556

244

6

250

122.4%

Net Income

$1,086

($57)

$1,029

$50

$407

$457

125.2%

Basic Net Income per Share

$8.05

($0.42)

$7.63

$0.37

$3.00

$3.37

126.4%

Diluted Net Income per Share

$8.00

($0.42)

$7.58

$0.37

$3.00

$3.37

124.9%

For

the

year

ended

12/31/06

For

the

year

ended

12/31/07

16

Appendix

B:

4

Quarter

Operations

Fees

Detail

25.2

$167

$662

$829

Net

operations

fees

24.7

(19)

(77)

(96)

Rebates

25.0

186

739

924

Gross

operations

fees

30.0

36

120

156

Other

operations

fees

31.8

7

22

29

Consulting

and

research

fees

21.7

5

23

28

Connectivity

-

-

18

18

Warning

bulletin

fees

28.3

17

60

77

Acceptance

development

fees

30.0

54

180

234

Currency

conversion

and

cross-border

20.9

66

$316

$382

Authorization,

settlement

and

switch

2007 vs.

2006

2007 vs.

2006

2006

2007

Percent

Increase

(Decrease)

Dollar

Increase

(Decrease)

For

the

three

months

ended

December 31, 2007

(In millions, except percentages)

Note: Figures may not sum due to rounding

th

17

Appendix

C:

4

Quarter

G&A

Detail

24.1

$96

$399

$496

General

and

administrative

expenses

11.1

4

36

40

Other

(3.8)

(1)

26

25

Travel

and

entertainment

13.3

2

15

17

Data

processing

-

-

18

18

Telecommunications

19.2

10

52

63

Professional

fees

32.2

81

$252

$333

Personnel

2007 vs.

2006

2007 vs.

2006

2006

2007

Percent

Increase

(Decrease)

Dollar

Increase

(Decrease)

For

the

three

months

ended

December 31, 2007

(In millions, except percentages)

Note:

Figures

may

not

sum

due

to

rounding

th