MasterCard 2005 Annual Report Download - page 6

4
Letter to Shareholder
s
On May 25, 2006, MasterCard representatives rang
the opening bell at the New York Stock Exchange, marking
the company’s debut as a publicly traded company.
U
nvei
l
ing t
h
e New MasterCar
d
O
ver the past
y
ear, we be
g
an to articulate a much
b
roa
d
er va
l
ue proposition — esta
bl
is
h
ing MasterCar
d
not merel
y
as a card compan
y
, or even a
g
lobal pa
y
ments
leader, but as a driving
f
orce at the heart o
f
commerce.
We are committed to reshapin
g
the wa
y
the world does
business and delivering bene
fi
ts to all o
f
our constituents,
including,
f
or the
fi
rst time, public investors.
More t
h
an ever, we
h
ave t
h
e a
b
i
l
ity to
d
isp
l
ace tra
d
itiona
l
forms of payment by bringing the benefi ts of electronic
c
ommerce to ever
y
corner of the world. We are
leveraging a range o
f
major strengths, including a uni
fi
ed
g
lobal or
g
anization, one of the world’s most advanced
transaction networ
k
s, a ste
ll
ar
b
ran
d
an
d
MasterCar
d
Advisors, the onl
y
g
lobal consultanc
y
dedicated exclusivel
y
to t
h
e payments in
d
ustry
.
Above all, we have worked hard to differentiate MasterCard in the pa
y
ments industr
y
, with a business strate
gy
focused
squarely on the needs o
f
our customers. Armed with a unique business model — as a processor,
f
ranchisor and advisor
—
we are helpin
g
to build a powerful web of economic connections, drivin
g
profi table
g
rowth for our customers and
d
e
l
ivering va
l
ue to our s
h
are
h
o
ld
ers.
D
emonstratin
g
Stron
g
Performance
Clearly, our company delivered exceptional per
f
ormance in 2005 — a year in which we continued to manage our business
with discipline, transparenc
y
and control. We achieved health
y
mar
g
ins, increased our return on equit
y
,
g
enerated stron
g
operating cash
fl
ow and maintained a solid balance sheet.
Around the world
,
cardholders used MasterCar
d
®
-
branded cards (excludin
g
Maestr
o
®
a
n
d
C
irr
us
®
)
for 19.1 billion transactions,
generating worldwide gross dollar volume (GDV) of
$
1.7 trillion, up 12 percent in local currency terms over a year ago.
Revenue, meanwhile,
g
rew b
y
13 percent, from $2.6 billion to $2.9 billion, a ma
j
or achievement. We also
g
enerated record
net income of
$
267 million for the year as compared to
$
238 million in 2004.
This performance was fueled b
y
increases in credit and debit pro
g
rams, refl ectin
g
solid
g
rowth in all of our re
g
ions.
We continued to deliver impressive results in the
fi
rst quarter o
f
2006, during which we achieved record net income o
f
$
127 million driven by GDV of
$
425.9 billion, up 13 percent in local currency terms over the fi rst quarter of 2005.
Q
uarter over quarter, net revenue
g
rew 12 percent to $739 million
.
As a global leader in online debit, Maestro continues to prove its strength as a highly competitive,
fl
exible and secure debit solution.
For the
f
ull
y
ear 2005, online PIN-based processed transactions, the ma
j
orit
y
o
f
which were Maestro transactions,
g
rew to over
2.6
b
i
ll
ion wor
ld
wi
d
e, a 15 percent increase over 2004. At t
h
e same time, t
h
e Maestro
b
ran
d
mar
k
appeare
d
on approximate
l
y
601 million cards. In Europe, fi nancial institutions will soon be
g
in mi
g
ratin
g
from national-use-onl
y
debit schemes to
g
lobal
and pan-European solutions to accommodate the requirements o
f
the Single Euro Payment Area (SEPA) initiative. Maestro is
fi
rmly
positioned as the solution that enables a smooth transition for European bankin
g
communities, merchants and cardholders
.
These results are grati
f
ying, re
fl
ecting the company we’ve become: MasterCard Worldwide
™
— customer-
d
riven, g
l
o
b
a
ll
y
c
onnected, deliverin
g
value in multiple wa
y
s and drivin
g
commerce around the world.