MasterCard Incorporated Reports Third-Quarter Financial Results

PURCHASE, New York, November 1 /PRNewswire/ --

- Net income of US$1.42 per share, or US$193 million

- Net revenues up 13.9% to US$902 million

- Gross Dollar volume up 15.0%, purchase volume up 17.2%

MasterCard Incorporated (NYSE: MA) today announced financial results for the third quarter of 2006. The company reported net income of US$193 million, or US$1.42 per share. Net revenues for the quarter were US$902 million, a 13.9% increase versus the same period in 2005. Currency fluctuations (driven by the movement of the euro relative to the US dollar) contributed approximately 1% of the increase in revenues for the quarter.

(Logo: http://www.newscom.com/cgi-bin/prnh/20061031/MCLOGO )

Fueling the higher revenue in the third quarter was growth in MasterCard's gross dollar volume (GDV), which increased 15.0%, on a local currency basis, to US$502 billion; an 18.9% increase in the number of transactions processed; and a restructuring of cross-border transaction fees which was implemented in April 2006. Worldwide purchase volume rose 17.2%, on a local currency basis, during the quarter to US$365 billion driven by increased cardholder spending on a growing number of MasterCard cards. As of September 30, 2006, the company's customers had issued 818 million MasterCard cards, an increase of 12.6% percent over the same period in 2005.

"These strong results underscore our success in displacing paper-based forms of payment in all corners of the globe in the face of a highly competitive payments market," said Robert W. Selander, MasterCard president and chief executive officer. "This marks the twelfth consecutive quarter of double-digit purchase volume growth and the tenth consecutive quarter of double-digit GDV growth. Over our forty year history, we have invested heavily in our global brand and payments network. We believe that merchants, consumers, corporations and governments have recognized the convenient and secure electronic payment solutions which this investment has enabled.

"With our unified global organization and our unique structure as a franchisor, processor and advisor, we are focusing our efforts full time on delivering value-added products and services that enhance the profitability of our customers' businesses, and provide innovative programs that meet and exceed their cardholders' and merchants' needs," Selander said. "At the same time, we recognize that results are best delivered locally, and our structure allows us to develop solutions that work for our customers wherever, and however, they do business."

Total operating expenses decreased 2.6% to US$627 million during the quarter compared to the same period in 2005. Excluding the year-ago impact of litigation settlements and an adjustment to reflect an accounting methodology change for cash-based executive incentive plans, operating expenses increased 8.8%. This was primarily driven by an increase in personnel costs related to the hiring of additional staff to support the company's customer-focused strategy; a severance expense resulting from an update in plan estimates; and higher professional fees related to legal costs to defend outstanding litigation. As expected, advertising and market development expenses decreased 4.6% to US$209 million versus the year-ago period due to higher spending for the 2006 FIFA World Cup earlier in the year. Currency fluctuations contributed approximately 1% of the increase in expenses for the quarter. Total operating expenses, excluding special items, is a non-U.S. GAAP financial measure that is reconciled to the most directly comparable U.S. GAAP measure in the accompanying financial tables.

Total other income was US$17 million in the third quarter 2006 versus US$16 million in the third quarter of 2005. The increase was driven primarily by interest income from higher cash balances related to proceeds received from the company's May 2006 initial public offering. This increase was offset by a gain the company recorded in 2005 from the settlement of a contractual dispute.

Chris A. McWilton, MasterCard's chief financial officer, noted that "In our first full quarter as a publicly listed company, MasterCard delivered strong revenue and earnings growth while further improving operating margins. The third-quarter results continue to demonstrate the strength of our business model and the momentum within the overall payments industry. These results are particularly notable when measured against last year's strong third-quarter performance."

Year-to-Date 2006 Results

For the nine months ended September 30, 2006, MasterCard reported net income of US$9 million or US$0.07 per share. Excluding the impact of special items, the company reported net income of US$420 million, or US$3.11 per share.

Special items, each of which occurred in the second quarter of 2006, included:

- A US$395 million non-cash expense resulting from the donation of approximately 13.5 million shares of Class A common stock to the MasterCard Foundation that occurred simultaneously with the company's IPO, which was not deductible for tax purposes; - A US$23 million reserve recorded for litigation settlements; and - US$7 million in interest income earned on the IPO proceeds ultimately used for redemption of shares of Class B common stock.

The company's net income and earnings per share, as well as total operating expenses discussed below, each of which exclude special items, are non-U.S. GAAP financial measures that are reconciled to their most directly comparable U.S. GAAP measures in the accompanying financial tables.

Net revenues for the nine months ended September 30, 2006 were US$2.5 billion, an 11.9% increase versus the same period in 2005. Currency fluctuations had a negligible impact on revenues during this period.

Total operating expenses increased 33.2% to US$2.3 billion for the nine-month period compared to the same period in 2005. Excluding the impact of the charitable contribution to the MasterCard Foundation, litigation settlements, and the incentive plan accounting methodology change mentioned above, total operating expenses increased 13.4% due to increased personnel costs, professional fees and sponsorship costs related to the 2006 FIFA World Cup. Currency fluctuations had a negligible impact on operating expenses during this period.

Total other income was US$41 million for the nine-month period versus US$4 million for the same period in 2005. This change was driven by a US$45 million increase in investment income, including the US$7 million special item earned on IPO proceeds. Interest expense also decreased by US$8 million due to a refund of interest assessed in connection with an audit of the company's federal income tax return and a reduction of interest reserve requirements related to the company's tax reserves. In addition, US$3 million was due to lower interest accretion relating to the U.S. merchant lawsuit settlement.

MasterCard's effective tax rate of 95.9% for the nine months ended September 30, 2006 includes the impact of a non-deductible, charitable stock contribution to the MasterCard Foundation. Excluding this impact, the company's tax rate would have been 34.6% vs. 35.5% for the same period in 2005. The company's effective tax rate, excluding the impact of the share donation, is a non-U.S. GAAP financial measure that is reconciled to the most directly comparable U.S. GAAP measure in the accompanying financial tables.

Third Quarter Results Conference Call Details

On Wednesday, November 1, the company will host a conference call to discuss its third quarter financial results at 9:00 a.m. EST.

The dial-in information for this call is +1-866-314-9013 (within the US) and +1-617-213-8053 (outside the US) and the passcode is 60238634. A replay of the call will be available for one week following the meeting. The replay can be accessed by dialing +1-888-286-8010 (within the US) and +1-617-801-6888 (outside the US) and using passcode 52185218.

The live call and the replay, along with supporting materials, can also be accessed through the Investor Relations section of the company's website at www.mastercard.com.

About MasterCard Incorporated

MasterCard Incorporated advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes close to 14 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard(R), Maestro(R) and Cirrus(R), MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.

Forward-Looking Statements

Statements in this press release which are not historical facts, including statements about MasterCard's plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company's ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation:

- the company's ability to displace paper-based forms of payment throughout the globe; - the company's ability to continually invest in its brand and payments network; - the company's ability to provide convenient and secure electronic payment solutions; - the company's commitment to bring its customers value-added products and services to enhance the profitability of their payments businesses; - the company's ability to provide innovative programs that meet or exceed cardholders' and merchants' needs; and - the company's continued strong revenue and earnings growth, improving operating margins and the strong momentum of its business model.

Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company's filings with the Securities and Exchange Commission (SEC), including the company's Annual Report on Form 10-K for the year ended December 31, 2005, the company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that it has filed with the SEC during 2006, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company's results to differ materially from expected results.

MASTERCARD INCORPORATED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (all figures in US$) September December 30, 31, 2006 2005 (In thousands, except share data) ASSETS Cash and cash equivalents $1,421,139 $545,273 Investment securities, at fair value: Trading 18,658 22,472 Available-for-sale 884,617 714,147 Accounts receivable 444,946 347,754 Settlement due from members 237,049 211,775 Restricted security deposits held for members 113,835 97,942 Prepaid expenses 153,866 167,209 Other current assets 84,336 121,326 Total Current Assets 3,358,446 2,227,898 Property, plant and equipment, at cost (less accumulated depreciation of $214,530 and $373,319) 240,315 230,614 Deferred income taxes 239,877 225,034 Goodwill 210,308 196,701 Other intangible assets (less accumulated amortization of $297,844 and $272,913) 268,688 273,854 Municipal bonds held-to-maturity 193,465 194,403 Prepaid expenses 206,911 201,132 Other assets 153,940 150,908 Total Assets $4,871,950 $3,700,544 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $193,153 $185,021 Settlement due to members 201,353 175,021 Restricted security deposits held for members 113,835 97,942 Obligations under U.S. merchant lawsuit and other litigation settlements - current 117,400 189,380 Accrued expenses 852,038 850,657 Other current liabilities 76,908 58,682 Total Current Liabilities 1,554,687 1,556,703 Deferred income taxes 64,071 61,188 Obligations under U.S. merchant lawsuit and other litigation settlements 447,287 415,620 Long-term debt 229,588 229,489 Other liabilities 251,509 263,776 Total Liabilities 2,547,142 2,526,776 Commitments and Contingencies Minority interest 4,620 4,620 Stockholders' Equity Class A common stock, $.0001 par value; authorized 3,000,000,000 shares, 79,631,922 and no shares issued and outstanding, respectively 8 - Class B common stock, $.0001 par value; authorized 1,200,000,000 shares, 55,337,407 and 134,969,329 shares issued and outstanding, respectively 6 14 Class M common stock, $.0001 par value, authorized 1,000,000 shares, 1,568 and no shares issued and outstanding, respectively - - Additional paid-in capital 3,296,698 974,605 Retained earnings (accumulated deficit) (1,070,098) 145,515 Accumulated other comprehensive income, net of tax: Cumulative foreign currency translation adjustments 96,007 50,818 Net unrealized loss on investment securities available-for-sale (1,880) (2,543) Net unrealized gain (loss) on derivatives accounted for as hedges (553) 739 Total accumulated other comprehensive income, net of tax 93,574 49,014 Total Stockholders' Equity 2,320,188 1,169,148 Total Liabilities and Stockholders' Equity $4,871,950 $3,700,544 MASTERCARD INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (all figures in US$) Three Months Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 (In thousands, except per share data) Revenues, net $901,969 $791,605 $2,486,911 $2,221,710 Operating Expenses General and administrative 392,883 350,064 1,105,881 975,867 Advertising and market development 209,187 219,190 698,936 622,447 Litigation settlements - 48,188 23,250 48,188 Charitable contributions to the MasterCard Foundation - - 400,285 - Depreciation and amortization 25,139 26,270 75,052 83,366 Total operating expenses 627,209 643,712 2,303,404 1,729,868 Operating income 274,760 147,893 183,507 491,842 Other Income (Expense) Investment income, net 34,398 16,084 84,089 39,612 Interest expense (16,757) (17,573) (43,465) (51,906) Other income (expense), net (292) 17,553 303 15,998 Total other income 17,349 16,064 40,927 3,704 Income before income taxes 292,109 163,957 224,434 495,546 Income tax expense 99,105 57,872 215,146 175,919 Net Income $193,004 $106,085 $9,288 $319,627 Basic Net Income per Share $1.42 $.79 $.07 $2.37 Basic Weighted average shares outstanding 135,684 134,969 135,312 134,969 Diluted Net Income per Share $1.42 $.79 $.07 $2.37 Diluted Weighted average shares outstanding 136,134 134,969 135,511 134,969 MASTERCARD INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (all figures in US$) Nine Months Ended September 30, 2006 2005 (In thousands) Operating Activities Net income $9,288 $319,627 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 75,052 83,366 Charitable contribution of common stock to the MasterCard Foundation 394,785 - Share based payments 13,372 - Deferred income taxes 18,962 (55,162) Other 7,440 8,261 Changes in operating assets and liabilities: Trading securities 3,814 4,502 Accounts receivable (90,419) (84,937) Settlement due from members (10,589) 14,561 Prepaid expenses 18,146 (22,761) Other current assets 9,503 552 Prepaid expenses, non-current (4,253) (92,229) Accounts payable 5,695 735 Settlement due to members 13,890 (13,739) Litigation settlement accruals, including accretion of imputed interest (40,313) 68,286 Accrued expenses 1,026 125,226 Net change in other assets and liabilities 21,384 (7,861) Net cash provided by operating activities 446,783 348,427 Investing Activities Purchases of property, plant and equipment (38,599) (27,604) Capitalized software (24,338) (29,860) Purchases of investment securities available-for-sale (2,525,682) (2,172,562) Proceeds from sales and maturities of investment securities available-for-sale 2,349,978 2,102,454 Other investing activities (881) 861 Net cash used in investing activities (239,522) (126,711) Financing Activities Cash received from sale of common stock, net of issuance costs 2,449,910 - Cash payment for redemption of common stock (1,799,937) - Net cash provided by financing activities 649,973 - Effect of exchange rate changes on cash and cash equivalents 18,632 (19,724) Net increase in cash and cash equivalents 875,866 201,992 Cash and cash equivalents - beginning of period 545,273 328,996 Cash and cash equivalents - end of period $1,421,139 $530,988 MASTERCARD INCORPORATED OPERATING PERFORMANCE For the 3 Months ended September 30, 2006 All MasterCard Credit, Purchase Purchase Charge and Debit GDV Growth Volume Growth Transactions Programs (Billions) (Local) (Billions) (Local) (Millions) Asia / Pacific $70 6.1% $42 17.3% 546 Canada 19 13.0% 17 13.7% 199 Europe 135 12.9% 99 13.3% 1,280 Latin America 31 25.2% 15 27.6% 336 South Asia / Middle East Africa 8 44.6% 5 33.4% 73 United States 238 17.3% 187 18.6% 2,892 Worldwide 502 15.0% 365 17.2% 5,327 MasterCard Credit and Charge Programs United States 155 5.0% 129 6.6% 1,505 Worldwide 370 8.7% 287 11.7% 3,585 MasterCard Debit Programs United States 82 50.4% 58 58.8% 1,387 Worldwide 132 37.3% 77 43.7% 1,743 All MasterCard, Credit Charge Cash Cash Acceptance and Debit Volume Growth Transactions Accounts Card Locations Programs (Billions)(Local) (Millions) (Millions) (Millions) (Millions) Asia / Pacific $29 -6.8% 138 140 153 7.1 Canada 3 9.1% 5 28 33 0.7 Europe 36 12.0% 228 132 145 7.6 Latin America 16 23.1% 115 70 83 2.2 South Asia / Middle East Africa 3 65.1% 28 22 25 0.7 United States 51 12.5% 245 325 380 6.5 Worldwide 138 9.5% 759 716 818 24.8 MasterCard Credit and Charge Programs United States 26 -2.2% 17 236 285 Worldwide 83 -0.4% 282 578 670 MasterCard Debit Programs United States 25 33.8% 228 89 95 Worldwide 54 29.1% 478 137 148 For the 9 Months ended September 30, 2006 All MasterCard Credit, Purchase Purchase Charge and Debit GDV Growth Volume Growth Transactions Programs (Billions) (Local) (Billions) (Local) (Millions) Asia / Pacific $209 8.0% $120 16.0% 1,533 Canada 54 14.6% 47 15.7% 559 Europe 375 14.2% 276 14.3% 3,646 Latin America 89 26.6% 42 29.7% 946 South Asia / Middle East Africa 22 49.0% 13 34.3% 206 United States 675 16.2% 528 17.4% 7,977 Worldwide 1,424 15.3% 1,025 16.9% 14,866 MasterCard Credit and Charge Programs United States 451 7.1% 373 8.5% 4,319 Worldwide 1,063 10.6% 816 12.9% 10,197 MasterCard Debit Programs United States 224 40.2% 155 46.5% 3,658 Worldwide 361 31.7% 210 35.9% 4,670 All MasterCard Credit, Cash Cash Charge and Debit Volume Growth Transactions Accounts Cards Programs (Billions) (Local) (Millions) (Millions) (Millions) Asia / Pacific $89 -1.1% 404 140 153 Canada 8 8.2% 14 28 33 Europe 99 14.0% 649 132 145 Latin America 47 24.0% 333 70 83 South Asia / Middle East Africa 9 79.5% 75 22 25 United States 147 12.0% 689 325 380 Worldwide 398 11.3% 2,164 716 818 MasterCard Credit and Charge Programs United States 78 0.8% 49 236 285 Worldwide 247 3.7% 833 578 670 MasterCard Debit Programs United States 69 27.8% 641 89 95 Worldwide 151 26.3% 1,332 137 148

For the 3 Months ended September 30, 2005 All MasterCard Credit, Purchase Purchase Charge and Debit GDV Growth Volume Growth Transactions Programs (Billions) (Local) (Billions) (Local) (Millions) Asia / Pacific $65 10.0% $35 13.8% 453 Canada 16 13.4% 14 17.7% 180 Europe 116 13.8% 85 12.8% 1,168 Latin America 25 33.3% 11 32.4% 275 South Asia / Middle East Africa 6 43.1% 4 29.2% 57 United States 203 10.1% 158 14.0% 2,289 Worldwide 431 12.7% 307 14.6% 4,422 MasterCard Credit and Charge Programs United States 148 6.3% 121 10.8% 1,432 Worldwide 336 10.7% 254 13.5% 3,252 MasterCard Debit Programs United States 55 21.9% 36 26.3% 857 Worldwide 95 20.0% 53 20.0% 1,170 All MasterCard Credit, Cash Cash Charge and Debit Volume Growth Transactions Accounts Cards Programs (Billions) (Local) (Millions) (Millions) (Millions) Asia / Pacific $30 5.9% 119 127 140 Canada 2 -6.9% 5 25 31 Europe 31 16.6% 207 110 124 Latin America 14 34.1% 102 57 70 South Asia / Middle East Africa 2 79.5% 15 14 17 United States 45 -1.9% 191 295 346 Worldwide 124 8.2% 638 629 726 MasterCard Credit and Charge Programs United States 27 -10.6% 17 228 273 Worldwide 82 3.0% 272 527 613 MasterCard Debit Programs United States 18 14.0% 173 67 72 Worldwide 42 20.1% 366 101 113 For the 9 Months ended September 30, 2005 All MasterCard Credit, Purchase Purchase Charge and Debit GDV Growth Volume Growth Transactions Programs (Billions) (Local) (Billions) (Local) (Millions) Asia / Pacific $193 8.0% $104 15.0% 1,293 Canada 44 14.1% 37 16.6% 498 Europe 334 13.2% 246 13.9% 3,317 Latin America 68 34.7% 31 31.8% 764 South Asia / Middle East Africa 15 34.7% 10 26.1% 161 United States 581 12.6% 450 15.6% 6,568 Worldwide 1,235 13.3% 878 15.7% 12,602 MasterCard Credit and Charge Programs United States 421 5.1% 344 9.0% 4,085 Worldwide 961 9.0% 723 12.6% 9,229 MasterCard Debit Programs United States 160 38.7% 106 43.6% 2,483 Worldwide 274 31.7% 155 32.5% 3,373 All MasterCard Credit, Cash Cash Charge and Debit Volume Growth Transactions Accounts Cards Programs (Billions) (Local) (Millions) (Millions) (Millions) Asia / Pacific $89 0.8% 325 127 140 Canada 7 2.0% 14 25 31 Europe 88 11.2% 587 110 124 Latin America 38 37.2% 290 57 70 South Asia / Middle East Africa 5 57.0% 39 14 17 United States 131 3.6% 578 295 346 Worldwide 357 7.9% 1,832 629 726 MasterCard Credit and Charge Programs United States 77 -9.4% 50 228 273 Worldwide 238 -0.8% 765 527 613 MasterCard Debit Programs United States 54 30.0% 528 67 72 Worldwide 120 30.8% 1,067 101 113

Note that the figures in the preceding tables may not sum due to rounding; growth represents change from the comparable year-ago period.

Footnote

Set forth above is information regarding the performance results for the three and nine month periods ended September 30, 2006 and September 30, 2005 for the payment programs of MasterCard International Incorporated and MasterCard Europe sprl (collectively, "MasterCard"), the principal operating subsidiaries of MasterCard Incorporated.

The table sets forth the gross dollar volume ("GDV"), purchase volume, cash volume and the number of purchase transactions, cash transactions, accounts, cards and acceptance locations on a regional basis for MasterCard(R)-branded and MasterCard Electronic(TM)-branded cards. Growth rates over prior periods are provided for volume-based data.

Debit transactions on Maestro(R) and Cirrus(R) -branded cards, Mondex(R) transactions and other branded transactions are not included in the preceding tables.

For purposes of the table: GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; "purchase volume" means the aggregate dollar amount of purchases made (including PIN point-of-sale) with MasterCard-branded cards for the relevant period; and "cash volume" means the aggregate dollar amount of cash disbursements obtained with MasterCard-branded cards for the relevant period. The number of cards includes virtual cards, which are MasterCard-branded payment accounts in connection with which functional cards are not generally issued. Acceptance locations include merchant locations, ATMs and other locations where cash may be obtained.

The MasterCard payment product is comprised of credit, charge and debit programs, and data relating to each type of program is included in the tables. Debit programs include MasterCard-branded debit programs where the primary means of cardholder validation at the point of sale is for cardholders either to sign a sales receipt or enter a Personal Identification Number (PIN).

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which MasterCard volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. However, MasterCard reports period-over-period rates of change in GDV, purchase volume and cash volume solely on the basis of local currency information, in order to eliminate the impact of changes in the value of foreign currencies against the U.S. dollar in calculating such rates of change.

The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is derived from information provided by MasterCard members that is subject to verification by MasterCard and partial cross-checking against information provided by MasterCard's transaction processing systems. The data set forth in the accounts, cards and acceptance locations columns is derived from information provided by MasterCard members and is subject to certain limited verification by MasterCard. Certain information with respect to acceptance locations is provided by third parties and has not been independently verified by MasterCard. All data is subject to revision and amendment by MasterCard's members subsequent to the date of its release.

A portion of the data set forth in the accounts and cards columns reflects the impact of routine portfolio changes among members and other practices that may lead to over counting of the underlying data in certain circumstances.

The table includes information with respect to MasterCard-branded transactions that are not processed by MasterCard and transactions for which MasterCard does not earn significant revenues, including PIN point-of-sale volumes for MasterCard-branded debit programs in the U.S. region and credit programs in the Asia/Pacific region.

Performance information for prior periods may be found in the "Investor Relations" section of MasterCard's website at www.mastercard.com.

Reconciliation to Net Income, Earnings Per Share and Total Operating Expenses (US$ million) For the three For the three months ended months ended YOY September 30, 2006 September 30, 2005 Growth Special As Special As As Actual Items Adjusted Actual Items Adjusted Adjusted Revenue $902 - $902 $792 - $792 13.9% General and Administrative 393 - 393 350 19 a 331 18.7% Advertising and Marketing 209 - 209 219 - 219 (4.6%) Litigation Settlements - - - 48 48 b - NM Charitable Contributions - - - - - - NM Deprecation and Amortization 25 - 25 27 - 27 (4.3%) Total operating expenses 627 - 627 644 67 577 8.8% Operating Income 275 - 275 148 67 215 27.9% Investment Income 34 - 34 16 - 16 112.5% Other income (expense) - - - 18 (17) c 1 NM Net Income 193 - 193 106 33 139 38.8% Earnings Per Share 1.42 - 1.42 0.79 0.24 1.03 37.3% (US$ million) For the nine For the nine months ended months ended YOY September 30, 2006 September 30, 2005 Growth Special As Special As As Actual Items Adjusted Actual Items Adjusted Adjusted Revenue $2,487 - $2,487 $2,222 - $2,222 11.9% General and Administrative 1,106 - 1,106 976 19 a 957 15.6% Advertising and Marketing 699 - 699 623 - 623 12.3% Litigation Settlements 23 23 b - 48 48 b - NM Charitable Contributions 400 395 d 5 e - - - NM Deprecation and Amortization 75 - 75 83 - 83 (10.0%) Total operating expenses 2,303 418 1,885 1,730 67 1,663 13.4% Operating Income 184 418 602 492 67 559 7.7% Investment Income 84 (7) f 77 40 - 40 92.5% Other income (expense) - - - 16 (17) c (1) NM Net Income 9 411 g 420 320 33 353 19.0% Earnings Per Share 0.07 3.04 g 3.11 2.37 0.24 2.61 19.0% a Adjustment to reflect accounting methodology change for cash-based executive incentive plans b Litigation settlements c Gains from the settlement of a contractual dispute d Contribution of common stock to the MasterCard Foundation e Contribution of cash to the MasterCard Foundation f Interest income on IPO proceeds held for redemption g Net tax effect of special items is negligible NM = not meaningful Reconciliation to Effective Tax Rate Non- GAAP Non- GAAP GAAP Effective Stock GAAP Effective Actual Tax Rate Donation Adjusted Tax Rate Nine months ended September 30, 2006: Income before income taxes $224 95.9% $395 $619 34.6% Income tax expense(1) 215 214 Net Income $ 9 $405 (1) Income tax expense has been calculated with and without the impact of the stock donation to the Foundation.

For more information about these reconciliations, refer to MasterCard Incorporated's Form 8-K furnished with the Securities and Exchange Commission on November 1, 2006.

Web site: http://www.mastercard.com