MasterCard 2007 Annual Report Download - page 23

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10 %
Cert no. SW-COC-1576 R
Sandy Alexander Inc., an ISO 14001:2004 certified printer with Forest Stewardship Council (FSC) Chain of Custody
Certification, printed this report with the use of certified renewable wind energy, resulting in nearly zero volatile organic
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It is manufactured with renewable energy in the form of wind, hydro and biogas.
Reconciliation to Net Income, Earnings Per Share and Total Operating Expenses*
For the year ended 12/31/07 For the year ended 12/31/06 Year-Over-Year Growth
Special As Special As As
($ million) Actual Items Adjusted Actual Items Adjusted 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 31 — 25 251 — —
Charitable Contributions to The MasterCard Foundation 20 — 202 415 3953 202 —
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)4 118 349.2%
Interest Expense (57) — (57) (61) — (61) (6.6)%
Other Income, Net 90 905 — 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%
(1) Litigation settlements
(2) Contribution of cash to The MasterCard Foundation
(3) Contribution of stock to The MasterCard Foundation
(4) Interest income on IPO proceeds held for redemption
(5) 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
*Note that figures in the table may not sum due to rounding.