Demonstrating Strong Performance

Clearly, our company delivered exceptional performance in 2005 — a year in which we continued to manage our business with discipline, transparency and control. We achieved healthy margins, increased our return on equity, generated strong operating cash flow and maintained a solid balance sheet.

Around the world, cardholders used MasterCard®-branded cards (excluding Maestro® and Cirrus®) 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, grew by 13 percent, from $2.6 billion to $2.9 billion, a major achievement. We also generated record net income of $267 million for the year as compared to $238 million in 2004.

This performance was fueled by increases in credit and debit programs, reflecting solid growth in all of our regions. We continued to deliver impressive results in the first quarter of 2006, during which we achieved record net income of $127 million driven by GDV of $425.9 billion, up 13 percent in local currency terms over the first quarter of 2005. Quarter over quarter, net revenue grew 12 percent to $739 million.

As a global leader in online debit, Maestro continues to prove its strength as a highly competitive, flexible and secure debit solution. For the full year 2005, online PIN-based processed transactions, the majority of which were Maestro transactions, grew to over 2.6 billion worldwide, a 15 percent increase over 2004. At the same time, the Maestro brand mark appeared on approximately 601 million cards. In Europe, financial institutions will soon begin migrating from national-use-only debit schemes to global and pan-European solutions to accommodate the requirements of the Single Euro Payment Area (SEPA) initiative. Maestro is firmly positioned as the solution that enables a smooth transition for European banking communities, merchants and cardholders.

These results are gratifying, reflecting the company we've become: MasterCard Worldwide™ — customer-driven, globally connected, delivering value in multiple ways and driving commerce around the world.

Fueling Connections to Drive Growth

At its most fundamental, MasterCard Worldwide is a link among the world's largest financial institutions, millions of businesses, hundreds of millions of individual cardholders and millions of merchant locations. Far from being a passive network, we are a powerful business catalyst, promoting the advantages of electronic payments, helping to grow profitable card portfolios, developing innovative payment solutions and, as a result, stimulating global commerce.

Nothing is more important to this role than our ability to focus on what matters to cardholders seeking easier, safer, more rewarding ways to pay. Our knowledge of their needs and desires is the foundation of our award-winning Priceless® campaign. This global advertising platform, which has appeared in 106 countries and in 50 languages, gets to the heart of what people care about most: flexibility, convenience and freedom to live life to the fullest. We are leveraging the strength of Priceless in digital media as well with the recent launch of Priceless.com, a new interactive consumer website that helps drive card usage.