MasterCard Reports Big Fourth QuarterLoss

PURCHASE, N.Y. - (03/17/06) – MasterCard International, whichis planning to go public in the second half of the year, reportedThursday it had a $52 million loss in the fourth quarter of 2005, atraditionally slow period. The number two cards company, which ekedout a $1.2 million profit in the fourth quarter of 2004, said in afiling with the Securities and Exchange Commission that customerand merchant incentives, which are recorded as contra-revenue, andadvertising, holiday promotions and incentives also increase alongwith holiday spending, “generally causing our profitabilityto decline in the fourth quarter.” Last year’s fourthquarter included a $99 million operating loss, up from a $20million loss for the fourth quarter 2004. The fourth quarterincluded a 5% rise in revenues to $715.9 million. The fourthquarter loss was only mentioned on page 116 of the company’sannual report. For the year, MasterCard reported a 13% rise inrevenues to $2.9 billion, and a 12% increase in net income to$266.7 million, or $1.98 a share. Filings of the company’sfinancials comes as MasterCard is preparing to raised as much as$2.5 billion in an initial public offering. The majority of theproceeds will be used to buy back shares from the company’sbank and credit union owners, and $650 million will be used to setup a legal defense contingency against the numerous antitrust suitsstill facing MasterCard.