MasterCard Incorporated

3

rd

Quarter 2007

Financial Results Conference Call

October 31, 2007

2

3

rd

Quarter Financial Results

•

Delivered quarterly net income of $314 million and earnings per share

of $2.31, on a diluted basis (including $0.51 from gains on partial sale

of Redecard investment)

•

Achieved record quarterly net revenue of $1.08 billion, growth of 20.1%

primarily due to:

–

Gross dollar volume growth (12.8%

*

to $577 billion)

–

Increase in processed transactions (13.3% to 4.8 billion)

–

Increase in cross-border volumes (20.6%)

–

Pricing adjustments (2%)

•

Improved operating margin by 2.1 ppts. to 32.6% from 30.5% in Q3

2006

*

On a local currency basis

3

3

rd

Quarter Highlights

•

Announcing incremental $750 million Class A share repurchase program

and a second 2007 Class B share conversion program

•

Repurchased approximately 2 million shares of Class A common stock for

$277 million as of 9/30/07

–

Completed $500 million Class A share repurchase plan in October

•

Converted approximately 5 million shares of Class B to Class A common

stock as of 9/30/07

–

Total of 7.6 million shares converted in first conversion program

•

Realized gain from sale of 25% of Redecard investment

4

$

2.31

$

314

(168)

(1)

(16) 

146

353

32.6%

22 

10

_

264

433

$

1,083

Actual

3Q 07

_

_

Litigation

69.4

(99)

Tax Expense

1.9

(17)

Interest Expense

(11.4)

25

Depreciation and Amortization                  

NM

_

Charitable Contribution

$

1.42

$

193

_

34

275

30.5%

209

393

$

902

Actual

3Q 06

NM

Other Income

62.7

Diluted EPS

62.9

Net Income

26.4

Advertising and Marketing

325.4

Investment Income

10.2

General and Administrative

28.6

2.1 ppts

Operating Income

Operating Margin

20.1

Net Revenue

Growth %

3

rd

Quarter Selected Financial Performance

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

Note: Figures may not sum due to rounding

5

MasterCard Branded Volume (GDV) 

3

rd

Quarter 2007

Note: Figures may not sum due to rounding

7.7

7.7

256

United States

12.8

16.6

577

Worldwide

13.3

21.2

23

Canada

36.8

41.3

11

South Asia/Middle East/Africa (SAMEA)

17.1

22.3

78

Asia Pacific

20.2

24.2

39

Latin America

16.1

25.8

171

Europe

Local

Currency

U.S.

Dollar

GDV

($  billions)

YOY Growth Rate %

6

3

rd

Quarter Revenue -

Assessments

($ in millions)

•

Net assessments increased

20.7%, or $50 to $291

•

Gross assessments increased

15.4%, or $70 to $525 due to

strong GDV growth of 12.8%*

•

Net assessments as a % of

gross assessments improved

slightly

Net Assessment Fees

Net Assessment Fees as a % of Gross Assessments

* On a local currency basis

$0

$50

$100

$150

$200

$250

$300

$350

3Q06

3Q07

20%

30%

40%

50%

60%

70%

80%

$241

$291

7

3

rd

Quarter Revenue -

Operations Fees

($ in millions)

•

Net operations fees up 19.8%, 

or $131 to $792

•

Gross operations fees

increased 20.6%, or $150 to

$879.  Key drivers include:

–

Processed transactions

growth: 13.3%

–

GDV growth: 12.8%*

–

Cross-border volume

growth of 20.6%

–

Pricing adjustments and

new programs

•

Net operations fees as a % of

gross operations fees

decreased slightly

Net Operations Fees

Net Operations Fees as a % of Gross Operations Fees

* On a local currency basis

$0

$100

$200

$300

$400

$500

$600

$700

$800

3Q06

3Q07

85%

88%

91%

94%

97%

100%

$661

$792

8

3

rd

Quarter Operating Expenses

($ in millions)

•

Total operating expenses

increased 16.3% to $730

•

G&A increased 10.2%, or

$40, driven by:

–

Higher personnel costs for

additional staff/contractors

–

Increased employee

performance incentives

•

A&M increased 26.4%, or

$55, due to:

–

Initiatives to support 

company strategy

–

Planned shift in spending

to the second half of 2007

•

Charitable cash contribution

of $10 to MasterCard

Foundation

$0

$100

$200

$300

$400

$500

3Q07

3Q06

General & Administrative

Advertising & Marketing

Depreciation & Amortization

Charitable Contribution

$393

$209

$22

$433

$264

$25

$10

9

3

rd

Quarter Cash Flow Statement and

Balance Sheet Highlights

•

Generated $718 million in cash flow from operations during the nine months

ended 9/30/07

•

Cash, cash equivalents and available-for-sale securities of $3.3 billion and

stockholders’

equity of $3.2 billion at 9/30/07

•

Repurchased approximately 2 million Class A shares for $277 million;

classified as treasury stock

•

Prepaid expenses increased $66 million primarily due to higher customer

incentives and advertising and marketing expenses

•

Accrued expenses increased $32 million mainly due to customer and

merchant incentives

•

Investment securities, available for sale, increased $299 million mainly due

to mark-to-market adjustment of Redecard investment

10

4

th

Quarter 2007 Items for Consideration

•

Special items

–

Litigation settlements of $2 million in 4Q 2006

•

G&A –

now expect:

–

Second half growth to be slightly lower than first half

–

4Q will have highest sequential and YOY growth rate in 2007

•

A&M -

continue to expect:

–

Low single-digit growth for the full-year

–

Highest spend in 4Q, but more evenly distributed between 3Q and 4Q

than in prior years

•

Will provide update on second Class B share conversion program and

incremental $750 million Class A share repurchase on 4Q 2007 earnings call

Income Statement