For MasterCard, 2006 was no ordinary year. Through the talent and dedication of our 4,600 employees around the world, we delivered exceptional financial 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 firmly 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 financial 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 benefit everyone, everywhere.

To customer financial 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 efficiencies through a unified 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,1 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 five 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 financial 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.