MasterCard Inc.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
SunTrust Robinson Humphrey	Andrew Jeffrey	andrew.jeffrey@suntrust.com
Nomura Research	Bill Carcache	bill.carcache@nomura.com
Deutsche Bank Research	Bryan Keane	bryan.keane@db.com
Stifel Nicolaus	Christopher C. Brendler	ccbrendler@stifel.com
Atlantic Equities	Christopher Hickey	c.hickey@atlantic-equities.com
Sandler O’Neill & Partners	Christopher R. Donat	cdonat@sandleroneill.com
RBC Capital Markets	Daniel Perlin	daniel.perlin@rbccm.com
Evercore ISI	David Togut	david.togut@evercoreisi.com
Guggenheim Securities	Eric Wasserstrom	eric.wasserstrom@guggenheimpartners.com
Cowen & Company	Georgios Mihalos	george.mihalos@cowen.com
Wedbush Securities	Gil Luria	gil.luria@wedbush.com
Oppenheimer	Glenn Greene	glenn.greene@opco.com
BMO Capital Markets	James Fotheringham	james.fotheringham@bmo.com
Susquehanna Financial Group	James Friedman	james.friedman@sig.com
Piper Jaffray	Jason Deleeuw	jason.s.deleeuw@pjc.com
Jefferies	Jason Kupferberg	jkupferberg@jefferies.com
Compass Point Research	John T. Williams	jwilliams@compasspointllc.com
Pacific Crest Securities-KBCM	Josh Beck	jbeck@pacific-crest.com
Bernstein Research	Lisa D. Ellis	lisa.ellis@bernstein.com
CRT Capital Group	Moshe Katri	mkatri@sterneageecrt.com
Credit Suisse	Moshe Orenbuch	moshe.orenbuch@credit-suisse.com
William Blair	Robert Napoli	bnapoli@williamblair.com
Keefe Bruyette & Woods	Sanjay Sakhrani	ssakhrani@kbw.com
Wells Fargo Securities	Timothy Willi	timothy.willi@wellsfargo.com
Raymond James	Wayne Johnson	wayne.johnson@raymondjames.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	3,254	3,825	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	3,866	4,269	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	14	81	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	10,000	11,469	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	32.54%	33.35%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	1,259	1,842	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	38.69%	48.16%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	2.80%	2.42%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	10.30%	8.71%
Enterprise value	EV_Market	104,509	107,712	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	103,063	107,987
Long-Run Growth	g = IR x ROIC	12.59%	16.06%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	51.78%	54.60%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	6.81%	5.96%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	10.81	10.00	-0.34%	-1.27%	-1.01%	-0.90%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	19.45	17.21	-0.34%	-1.27%	-1.01%	c-0.90%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	32.12	28.16	-0.34%	-1.27%	-1.01%	-0.90%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	27.03	25.23	-0.34%	-1.27%	-1.01%	-0.90%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	20.88	18.31	-0.34%	-1.27%	-1.01%	-0.90%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	c10.45	9.39	-0.34%	-1.27%	-1.01%	-0.90%