MasterCard 2006 Annual Report Download - page 6

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For MasterCard, 2006 was no ordinary year. Through the talent and dedication of our
4,600 employees around the world, we delivered exceptional fi nancial results and
transformed our company into a publicly traded enterprise, committed to increasing
shareholder value. This transformation took years of hard work, and I thank our
employees for their extraordinary accomplishments. Today, with our corporate strategy
and unique business model as a franchisor, processor and advisor, we are fi rmly
positioned to deliver value to each of our constituents.
More than ever, our business depends on the strength of the relationships we foster. We are a critical link among tens of
thousands of fi nancial institutions, millions of businesses and hundreds of millions of cardholders. What’s more, we are a
driving force in revolutionizing the way the world does business, advancing commerce through innovations that benefi t
everyone, everywhere.
To customer fi nancial institutions, MasterCard is an essential engine of growth, expanding the use of electronic payments,
providing an unsurpassed technology network, leveraging powerful global brands and delivering effi ciencies through a unifi ed
global structure.
To merchants, we’re a business partner offering valuable co-branding opportunities and commerce intelligence that drive
incremental revenue while providing a connection to hundreds of millions of cardholders who live around the world.
To consumers, we’re a convenient way to pay for everything that matters, offering brands that say “yes” in any language
at over 25 million locations — not to mention hundreds of thousands more online.
Indeed, we are now so much a part of everyday life and business, it’s easy to take our role for granted. Yet without our
products and services, I believe that much of modern commerce would be affected. By advancing new and better ways
to pay and building a global web of economic connections, we have positioned ourselves at The Heart of Commerce™
.
A Year of Exceptional Results
In 2006, we met or exceeded the expectations we had set for ourselves.
Revenue for the year grew by 13.2%, from $2.9 billion to $3.3 billion. We also generated net income of $457 million1 for
the year, or $3.371 per share, compared with $317 million,
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or $2.351 per share, a year ago.
MasterCard generated worldwide gross dollar volume (GDV) of almost $2 trillion, up 14.9% in local currency terms over 2005.
It is worth noting that this level is double the GDV we reported just fi ve years ago. Also in 2006, worldwide purchase volume
rose 16.9% in local currency terms, to $1.4 trillion, driven by increased cardholder spending on a growing number of our cards.
At the end of 2006, our fi nancial institution customers had issued 817 million MasterCard® cards, an increase of 12.3% over
the cards issued in 2005. Transactions processed across the MasterCard network increased 17.5% to 16.1 billion transactions.
In addition to these results, 2006 was a year of accomplishment on many strategic fronts. Chief among these was the
completion of our initial public offering — the largest listing in the United States during 2006 — and the election of what
I believe to be an exceptional board of directors.
I thank the members of our former board who had the vision and the fortitude to lead us through the company’s
transformation, and for whose support and courage we are all grateful. I also welcome the members of our new board,
who offer a collective wealth of business know-how, strategic insight and global experience. In particular, I am pleased
to welcome Rick Haythornthwaite as our new chairman. His deep knowledge of international markets and his strong
leadership skills will surely prove valuable as we execute our strategy around the world.
Dear Fellow Shareholders,
Letter from the President and Chief Executive Offi cer