FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: management’s judgment using internal and external data, these fair value determinations are classified in Level 3 of the Valuation Hierarchy (as defined in Fair value subsection below).
−Removed: Impairment of assets - Goodwill and indefinite-lived intangible assets are not amortized but tested annually for impairment at the reporting unit level in the fourth quarter, or sooner when circumstances indicate an impairment may exist.
−Removed: The impairment evaluation for goodwill utilizes a qualitative assessment to determine whether it is more likely than not that goodwill is impaired.
−Removed: The qualitative factors may include, but are not limited to, macroeconomic conditions, industry and market conditions, operating environment, financial performance and other relevant events.
−Removed: If it is determined that it is more likely than not that goodwill is impaired, then the Company is required to perform a quantitative goodwill impairment test.
−Removed: If the fair value of the reporting unit exceeds the carrying value, goodwill is not impaired.
−Removed: If the fair value of the reporting unit is less than its carrying value, goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment charge.
−Removed: The impairment test for indefinite-lived intangible assets consists of a qualitative assessment to evaluate relevant events and circumstances that could affect the significant inputs used to determine the fair value of indefinite-lived intangible assets.
−Removed: If the qualitative assessment indicates that it is more likely than not that indefinite-lived intangible assets are impaired, then a quantitative assessment is required.
−Removed: If the fair value of the indefinite-lived intangible asset exceeds the carrying value, the asset is not impaired.
−Removed: If the fair value of the indefinite-lived intangible asset is less than its carrying value, the asset is impaired and the excess of the asset’s carrying value over the fair value is recognized as an impairment charge.
−Removed: Long-lived assets, other than goodwill and indefinite-lived intangible assets, are tested for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable.
−Removed: If the carrying value of the asset cannot be recovered from estimated future cash flows, undiscounted and without interest, the fair value of the asset is calculated using the present value of estimated net future cash flows.
−Removed: If the carrying amount of the asset exceeds its fair value, an impairment is recorded.
−Removed: Impairment charges, if any, are recorded in general and administrative expenses on the consolidated statement of operations.
−Removed: Litigation - The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters.
−Removed: The Company evaluates the likelihood of an unfavorable outcome of all legal or regulatory proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable.
−Removed: Loss contingencies are recorded in provision for litigation on the consolidated statement of operations.
−Removed: These judgments are subjective based on the status of the legal or regulatory proceedings, the merits of its defenses and consultation with in-house and external legal counsel.
−Removed: Legal costs are expensed as incurred and recorded in general and administrative expenses on the consolidated statement of operations.
−Removed: Settlement and other risk management - Mastercard’s rules guarantee the settlement of many of the payment network transactions between its customers.
−Removed: Settlement exposure is the outstanding settlement risk to customers under Mastercard’s rules due to the difference in timing between the payment transaction date and subsequent settlement.
−Removed: For those transactions the Company guarantees, the guarantee will cover the full amount of the settlement obligation to the extent the settlement obligation is not otherwise satisfied.
−Removed: The duration of the settlement exposure is short-term and generally limited to a few days.
−Removed: The Company also enters into agreements in the ordinary course of business under which the Company agrees to indemnify third parties against damages, losses and expenses incurred in connection with legal and other proceedings arising from relationships or transactions with the Company.
−Removed: As the extent of the Company’s obligations under these agreements depends entirely upon the occurrence of future events, the Company’s potential future liability under these agreements is not determinable.
−Removed: The Company accounts for each of its guarantees by recording the guarantee at its fair value at the inception or modification date through earnings.
−Removed: Settlement assets/obligations - The Company operates systems for settling payment transactions among participants in the payments ecosystem in which the Company operates.
−Removed: Settlement is generally completed on a same-day basis.
−Removed: In some circumstances, however, funds may not settle until subsequent business days.
−Removed: In addition, the Company may receive or post funds in advance of transactions related to certain payment capabilities over its multi-rail payments network.
−Removed: The Company classifies the balances arising from these various activities as settlement assets and settlement obligations.
−Removed: Income taxes - The Company follows an asset and liability based approach in accounting for income taxes as required under GAAP.
−Removed: Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of temporary differences between the financial statement carrying amounts and income tax bases of assets and liabilities.
−Removed: Deferred income taxes are displayed separately as noncurrent assets and liabilities on the consolidated balance sheet.
−Removed: Valuation allowances are provided against assets which are not more likely than not to be realized.
−Removed: The Company recognizes all material tax positions, including uncertain tax positions in which it is more likely than not that the position will be sustained based on its technical merits and if challenged by the relevant taxing authorities.
−Removed: At each balance sheet date, unresolved uncertain tax positions are reassessed to determine whether subsequent developments require a change in the amount of recognized tax benefit.
−Removed: The allowance for uncertain tax positions is recorded in other current and noncurrent liabilities on the consolidated balance sheet.
−Removed: MASTERCARD 2023 FORM 10-K 76
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: records interest expense related to income tax matters as interest expense on the consolidated statement of operations.
−Removed: The Company includes penalties related to income tax matters in the income tax provision.
−Removed: Cash and cash equivalents - Cash and cash equivalents include certain investments with daily liquidity and with an original maturity of three months or less from the date of purchase.
−Removed: Cash equivalents are recorded at cost, which approximates fair value.
−Removed: Restricted cash - The Company classifies cash and cash equivalents as restricted when it is unavailable for withdrawal or use in its general operations.
−Removed: The Company has the following types of restricted cash and restricted cash equivalents which are included in the reconciliation of beginning-of-period and end-of-period amounts shown on the consolidated statement of cash flows:
−Removed: • Restricted cash for litigation settlement - The Company had restricted cash for litigation within a qualified settlement fund related to the settlement agreement for the U.S.
−Removed: merchant class litigation.
−Removed: During 2023, the Company fully reduced its Restricted cash for litigation settlement balance as the settlement became final in August 2023.
−Removed: Refer to Note 21 (Legal and Regulatory Proceedings) for further details.
−Removed: • Restricted security deposits held for customers - The Company requires certain customers to enter into risk mitigation arrangements, including cash collateral and/or other forms of credit enhancement such as letters of credit and guarantees, for settlement of their transactions.
−Removed: Certain risk mitigation arrangements for settlement, such as standby letters of credit and bank guarantees, are not recorded on the consolidated balance sheet.
−Removed: The Company also holds cash deposits and certificates of deposit from certain customers as collateral for settlement of their transactions, which are recorded as assets on the consolidated balance sheet.
−Removed: These assets are fully offset by corresponding liabilities included on the consolidated balance sheet.
−Removed: The amount of these security deposits and the duration held are determined by the risk profile of the individual customer and the Company’s risk management practices.
−Removed: • Other restricted cash balances - The Company has other restricted cash balances which include contractually restricted deposits, as well as cash balances that are restricted based on the Company’s intention with regard to usage.
−Removed: These funds are classified on the consolidated balance sheet within prepaid expenses and other current assets and other assets.
−Removed: Fair value - The Company measures certain financial assets and liabilities at fair value on a recurring basis by estimating the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants.
−Removed: The Company also measures certain financial and non-financial assets and liabilities at fair value on a nonrecurring basis, when a change in fair value or impairment is evidenced.
−Removed: The Company classifies these recurring and nonrecurring fair value measurements into a three-level hierarchy (“Valuation Hierarchy”).
−Removed: The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.
−Removed: A financial instrument’s categorization within the Valuation Hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
−Removed: The three levels of the Valuation Hierarchy are as follows:
−Removed: • Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
−Removed: • Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets and inputs that are observable for the asset or liability.
−Removed: • Level 3 - inputs to the valuation methodology are unobservable and cannot be directly corroborated by observable market data.
−Removed: The Company’s financial assets and liabilities measured at fair value on a recurring basis include investment securities available-for-sale, marketable securities, derivative instruments and deferred compensation.
−Removed: The Company’s financial assets measured at fair value on a nonrecurring basis include nonmarketable securities.
−Removed: The Company’s non-financial assets measured at fair value on a nonrecurring basis include property, equipment and right-of-use assets, goodwill and other intangible assets and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.
−Removed: Contingent consideration - Certain business combinations involve the potential for future payment of consideration that is contingent upon the achievement of performance milestones.
−Removed: These liabilities are classified within Level 3 of the Valuation Hierarchy as the inputs used to measure fair value are unobservable and require management’s judgment.
−Removed: The fair value of the contingent consideration at the acquisition date and subsequent periods is determined utilizing an income approach based on a Monte Carlo technique and is recorded in other current liabilities and other liabilities on the consolidated balance sheet.
−Removed: Changes to projected performance milestones of the acquired businesses could result in a higher or lower contingent consideration liability.
−Removed: The changes in fair value as a result of updated assumptions are recorded in general and administrative expenses on the consolidated statement of operations.
−Removed: 77 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Investment securities - The Company classifies investments as available-for-sale or held-to-maturity at the date of acquisition.
−Removed: • Available-for-sale debt securities:
−Removed: ◦ Investments in debt securities that are available to meet the Company’s current operational needs are classified as current assets and the securities that are not available for current operational needs are classified as noncurrent assets on the consolidated balance sheet.
−Removed: The debt securities are carried at fair value, with unrealized gains and losses, net of tax, recorded as a separate component of accumulated other comprehensive income (loss) on the consolidated statement of comprehensive income.
−Removed: Net realized gains and losses on debt securities are recognized in investment income on the consolidated statement of operations.
−Removed: The specific identification method is used to determine realized gains and losses.
−Removed: The Company evaluates its debt securities for impairment on an ongoing basis.
−Removed: When there has been a decline in fair value of a debt security below the amortized cost basis, the Company recognizes an impairment if:
−Removed: (1) it has the intent to sell the security;
−Removed: (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis;
−Removed: or (3) it does not expect to recover the entire amortized cost basis of the security.
−Removed: The credit loss component of the impairment is recognized as an allowance and recorded in other income (expense), net on the consolidated statement of operations while the non-credit related loss remains in accumulated other comprehensive income (loss) until realized from a sale or subsequent impairment.
−Removed: • Held-to-maturity securities:
−Removed: ◦ Time deposits - The Company classifies time deposits with original maturities greater than three months as held-to-maturity.
−Removed: Held-to-maturity securities that mature within one year are classified as current assets within investments on the consolidated balance sheet while held-to-maturity securities with maturities of greater than one year are classified as other assets.
−Removed: Time deposits are carried at amortized cost on the consolidated balance sheet and are intended to be held until maturity.
−Removed: Equity investments - The Company holds equity securities of publicly traded and privately held companies.
−Removed: • Marketable equity securities - Marketable equity securities are strategic investments in publicly traded companies and are measured at fair value using quoted prices in their respective active markets with changes recorded through gains (losses) on equity investments, net on the consolidated statement of operations.
−Removed: Marketable equity securities that are expected to be held as part of the Company’s long-term investment strategy are classified in other assets on the consolidated balance sheet.
−Removed: • Nonmarketable equity investments - The Company’s nonmarketable equity investments, which are reported in other assets on the consolidated balance sheet, include investments in privately held companies without readily determinable market values.
−Removed: The Company uses discounted cash flows and market assumptions to estimate the fair value of its nonmarketable equity investments when certain events or circumstances indicate that impairment may exist.
−Removed: The Company’s nonmarketable equity investments are accounted for under the measurement alternative method or equity method.
−Removed: ◦ Measurement alternative method - The Company accounts for investments in common stock or in-substance common stock under the measurement alternative method of accounting when it does not exercise significant influence, generally when it holds less than 20 % ownership in the entity or when the interest in a limited partnership or limited liability company is less than 5 % and the Company has no significant influence over the operations of the investee.
−Removed: Investments in companies that Mastercard does not control, but that are not in the form of common stock or in-substance common stock, are also accounted for under the measurement alternative method of accounting.
−Removed: Measurement alternative investments are measured at cost, less any impairment and adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
−Removed: Fair value adjustments, as well as impairments, are included in gains (losses) on equity investments, net on the consolidated statement of operations.
−Removed: ◦ Equity method - The Company accounts for investments in common stock or in-substance common stock under the equity method of accounting when it has the ability to exercise significant influence over the operations of the investee, generally when it holds between 20% and 50% ownership in the entity.
−Removed: The excess of the cost over the underlying net equity of investments accounted for under the equity method is allocated to identifiable tangible and intangible assets and liabilities based on fair values at the date of acquisition.
−Removed: The amortization of the excess of the cost over the underlying net equity of investments and Mastercard’s share of net earnings or losses of entities accounted for under the equity method of accounting is included in other income (expense), net on the consolidated statement of operations.
−Removed: In addition, investments in flow-through entities such as limited partnerships and limited liability companies are also accounted for under the equity method when the Company has the ability to exercise significant influence over the operations of the investee, generally when the investment ownership percentage is equal to or greater than 5% of the
−Removed: MASTERCARD 2023 FORM 10-K 78
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: outstanding ownership interest.
−Removed: The Company’s share of net earnings or losses for these investments are included in gains (losses) on equity investments, net on the consolidated statement of operations.
−Removed: Derivative and hedging instruments - The Company’s derivative financial instruments are recorded as either assets or liabilities on the balance sheet and measured at fair value.
−Removed: The Company’s foreign exchange and interest rate derivative contracts are included in Level 2 of the Valuation Hierarchy as the fair value of the contracts are based on inputs that are observable based on broker quotes for the same or similar instruments.
−Removed: The Company does not enter into derivative instruments for trading or speculative purposes.
−Removed: For derivatives that are not designated as hedging instruments, realized and unrealized gains and losses from the change in fair value of the derivatives are recognized in current earnings.
−Removed: The Company’s derivatives that are designated as hedging instruments are required to meet established accounting criteria.
−Removed: In addition, an effectiveness assessment is required to demonstrate that the derivative is expected to be highly effective at offsetting changes in fair value or cash flows of the underlying exposure both at inception of the hedging relationship and on an ongoing basis.
−Removed: The method of assessing hedge effectiveness and measuring hedge results is formally documented at hedge inception and assessed at least quarterly throughout the designated hedge period.
−Removed: The Company may designate derivative instruments as cash flow, fair value and net investment hedges, as follows:
−Removed: • Cash flow hedges - Fair value adjustments to derivative instruments are recorded, net of tax, in other comprehensive income (loss) on the consolidated statement of comprehensive income.
−Removed: Any gains and losses deferred in accumulated other comprehensive income (loss) are subsequently reclassified to the corresponding line item on the consolidated statement of operations when the underlying hedged transactions impact earnings.
−Removed: For hedges that are no longer deemed highly effective, hedge accounting is discontinued prospectively, and any gains and losses remaining in accumulated other comprehensive income (loss) are reclassified to earnings when the underlying forecasted transaction occurs.
−Removed: If it is probable that the forecasted transaction will no longer occur, the associated gains or losses in accumulated other comprehensive income (loss) are reclassified to the corresponding line item on the consolidated statement of operations in current earnings.
−Removed: • Fair value hedges - Changes in the fair value of derivative instruments are recorded in current-period earnings, along with the gain or loss on the hedged asset or liability (“hedged item”) that is attributable to the hedged risk.
−Removed: All amounts recognized in earnings are recorded to the corresponding line item on the consolidated statement of operations as the earnings effect of the hedged item.
−Removed: Hedged items are measured on the consolidated balance sheet at their carrying amount adjusted for any changes in fair value attributable to the hedged risk (“basis adjustments”).
−Removed: The Company defers the amortization of any basis adjustments until the end of the derivative instrument’s term.
−Removed: If the hedge designation is discontinued for reasons other than derecognition of the hedged item, the remaining basis adjustments are amortized in accordance with applicable GAAP for the hedged item.
−Removed: • Net investment hedges - The Company has numerous investments in foreign subsidiaries.
−Removed: The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates.
−Removed: The Company may use foreign currency denominated debt and/or derivative instruments to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates.
−Removed: The effective portion of the foreign currency gains and losses related to the hedging instruments are reported in accumulated other comprehensive income (loss) on the consolidated balance sheet as a cumulative translation adjustment component of equity.
−Removed: Gains and losses in accumulated other comprehensive income (loss) are reclassified to earnings only if the Company sells or substantially liquidates its net investments in foreign subsidiaries.
−Removed: Amounts excluded from effectiveness testing of net investment hedges are recognized in earnings over the life of the hedging instrument.
−Removed: The Company evaluates the effectiveness of the net investment hedge each quarter.
−Removed: Property, equipment and right-of-use assets - Property and equipment are stated at cost less accumulated depreciation and amortization.
−Removed: Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets.
−Removed: Depreciation of leasehold improvements and amortization of finance leases is included in depreciation and amortization expense on the consolidated statement of operations.
−Removed: Operating lease amortization expense is included in general and administrative expenses on the consolidated statement of operations.
−Removed: The Company determines if a contract is, or contains, a lease at contract inception.
−Removed: The Company’s right-of-use (“ROU”) assets are primarily related to operating leases for office space, automobiles and other equipment.
−Removed: Leases are included in property, equipment and right-of-use assets, other current liabilities and other liabilities on the consolidated balance sheet.
−Removed: ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.
−Removed: ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.
−Removed: In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date, and exclude lease incentives.
−Removed: As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the
−Removed: 79 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: commencement date in determining the present value of lease payments.
−Removed: The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment.
−Removed: Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
−Removed: Leases with a term of one year or less are excluded from ROU assets and liabilities.
−Removed: The Company excludes variable lease payments in measuring ROU assets and lease liabilities, other than those that depend on an index, a rate or are in-substance fixed payments.
−Removed: Lease and nonlease components are generally accounted for separately.
−Removed: When available, consideration is allocated to the separate lease and nonlease components in a lease contract on a relative standalone price basis using observable standalone prices.
−Removed: Pension and other postretirement plans - The Company recognizes the funded status of its single-employer defined benefit pension plans and postretirement plans as assets or liabilities on its consolidated balance sheet and recognizes changes in the funded status in the year in which the changes occur through accumulated other comprehensive income (loss).
−Removed: The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation at December 31, the measurement date.
−Removed: Overfunded plans, if any, are aggregated and recorded in other assets, while underfunded plans are aggregated and recorded as accrued expenses and other liabilities on the consolidated balance sheet.
−Removed: Net periodic pension and postretirement benefit cost/(income), excluding the service cost component, is recognized in other income (expense), net on the consolidated statement of operations.
−Removed: These costs include interest cost, expected return on plan assets, amortization of prior service costs or credits and gains or losses previously recognized as a component of accumulated other comprehensive income (loss).
−Removed: The service cost component is recognized in general and administrative expenses on the consolidated statement of operations.
−Removed: Defined contribution plans - The Company’s contributions to defined contribution plans are recorded as employees render service to the Company.
−Removed: The charge is recorded in general and administrative expenses on the consolidated statement of operations.
−Removed: Advertising and marketing - Expenses incurred to promote Mastercard’s brand, products and services are recognized in advertising and marketing on the consolidated statement of operations.
−Removed: The timing of recognition is dependent on the type of advertising or marketing expense.
−Removed: Foreign currency remeasurement and translation - Monetary assets and liabilities in a currency other than the functional currency are remeasured using current exchange rates in effect at the balance sheet date.
−Removed: Non-monetary assets and liabilities are recorded at historical exchange rates.
−Removed: Revenue and expense accounts are remeasured at the weighted-average exchange rate for the period.
−Removed: Resulting exchange gains and losses related to remeasurement are included in general and administrative expenses on the consolidated statement of operations.
−Removed: Where a non-U.S.
−Removed: currency is the functional currency, translation from that functional currency to U.S.
−Removed: dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted-average exchange rate for the period.
−Removed: Resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss).
−Removed: Treasury stock - The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction.
−Removed: These shares are considered treasury stock, which is a reduction to stockholders’ equity.
−Removed: Treasury stock is included in authorized and issued shares but excluded from outstanding shares.
−Removed: Share-based payments - The Company measures share-based compensation expense at the grant date, based on the estimated fair value of the award and uses the straight-line method of attribution, net of estimated forfeitures, for expensing awards over the requisite employee service period.
−Removed: The Company estimates the fair value of its non-qualified stock option awards (“Options”) using a Black-Scholes valuation model.
−Removed: The fair value of restricted stock units (“RSUs”) is determined and fixed on the grant date based on the Company’s stock price, adjusted for the exclusion of dividend equivalents.
−Removed: The Monte Carlo simulation valuation model is used to determine the grant date fair value of performance stock units (“PSUs”) granted.
−Removed: All share-based compensation expenses are recorded in general and administrative expenses on the consolidated statement of operations.
−Removed: Redeemable non-controlling interests - The Company’s business combinations may include provisions allowing non-controlling equity owners the ability to require the Company to purchase additional interests in the subsidiary at their discretion.
−Removed: The interests are initially recorded at fair value and in subsequent reporting periods are accreted or adjusted to the estimated redemption value.
−Removed: The adjustments to the redemption value are recorded to retained earnings or additional paid-in capital on the consolidated balance sheet.
−Removed: The redeemable non-controlling interests are considered temporary and reported outside of permanent equity on the consolidated balance sheet at the greater of the carrying amount adjusted for the non-controlling interest’s share of net income (loss) or its redemption value.
−Removed: MASTERCARD 2023 FORM 10-K 80
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Earnings per share - The Company calculates basic earnings per share (“EPS”) by dividing net income by the weighted-average number of common shares outstanding during the year.
−Removed: Diluted EPS is calculated by dividing net income by the weighted-average number of common shares outstanding during the year, adjusted for the potentially dilutive effect of stock options and unvested stock units using the treasury stock method.
−Removed: The Company may be required to calculate EPS using the two-class method as a result of its redeemable non-controlling interests.
−Removed: If redemption value exceeds the fair value of the redeemable non-controlling interests, the excess would be a reduction to net income for the EPS calculation.
−Removed: Accounting Pronouncements Not Yet Adopted
−Removed: Improvements to Reportable Segment Disclosures - In November 2023, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.
−Removed: This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.
−Removed: The Company will adopt this guidance in its Form 10-K for the year ended December 31, 2024.
−Removed: This guidance is expected to impact the disclosures only with no impact to the results of operations, financial position or cash flows.
−Removed: Improvements to Income Tax Disclosures - In December 2023, the FASB issued accounting guidance to enhance the transparency and decision usefulness of income tax disclosures.
−Removed: The guidance includes improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid.
−Removed: This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.
−Removed: The Company is in the process of evaluating when it will adopt this guidance and the potential effects this guidance will have on its disclosures.
−Removed: In 2023, the Company did not complete any material business acquisitions.
−Removed: In April 2022, Mastercard acquired a 100 % equity interest in Dynamic Yield LTD (“Dynamic Yield”) for cash consideration of $ 325 million.
−Removed: The net assets acquired primarily relate to intangible assets, including goodwill of $ 200 million that is primarily attributable to the synergies expected to arise after the acquisition date.
−Removed: None of the goodwill is expected to be deductible for local tax purposes.
−Removed: In 2021, the Company acquired several businesses for total consideration of $ 4.7 billion representing both cash and contingent consideration.
−Removed: In March 2021, Mastercard acquired a majority of the Corporate Services business of Nets Denmark A/S (“Nets”) for € 3.0 billion (approximately $ 3.6 billion as of the date of acquisition) in cash consideration based on a € 2.85 billion enterprise value, adjusted for cash and net working capital at closing.
−Removed: The business acquired is primarily comprised of clearing and instant payment services and e-billing solutions.
−Removed: The net assets acquired primarily relate to intangible assets, including goodwill of $ 2.1 billion, of which $ 0.8 billion is expected to be deductible for local tax purposes.
−Removed: The goodwill arising from this acquisition is primarily attributable to the synergies expected to arise through geographic, product and customer expansion, the underlying technology and workforce acquired.
−Removed: In June 2021, Mastercard acquired a 100 % equity interest in Ekata, Inc.
−Removed: (“Ekata”) for cash consideration of $ 861 million, based on an $ 850 million enterprise value, adjusted for cash and net working capital at closing.
−Removed: The acquisition of Ekata is expected to broaden the Company’s digital identity verification capabilities.
−Removed: The goodwill arising from this acquisition is primarily attributable to the synergies expected to arise after the acquisition date and none of the goodwill is expected to be deductible for local tax purposes.
−Removed: Mastercard acquired additional businesses in 2021 for consideration of $ 272 million.
−Removed: These businesses were not considered individually material to Mastercard.
−Removed: These acquisitions align with the Company’s strategy to grow, diversify and build the Company’s business.
−Removed: Refer to Note 1 (Summary of Significant Accounting Policies) for the valuation techniques Mastercard utilizes to fair value the respective components of business combinations and contingent consideration.
−Removed: 81 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: In 2023, the Company finalized the purchase accounting for the business acquired during 2022.
−Removed: The final fair values of the purchase price allocations in aggregate, as of the acquisition dates, are noted below for the years ended December 31.
−Removed: (in millions)
−Removed: Cash and cash equivalents $ 11 $ 253
−Removed: Other current assets 7 41
−Removed: Other intangible assets 125 2,071
−Removed: Goodwill 200 2,842
−Removed: Other assets 9 15
−Removed: Total assets 352 5,222
−Removed: Other current liabilities 15 112
−Removed: Deferred income taxes 3 398
−Removed: Other liabilities 9 12
−Removed: Total liabilities 27 522
−Removed: Net assets acquired $ 325 $ 4,700
−Removed: The following table summarizes the identified intangible assets acquired during the years ended December 31:
−Removed: 2022 2021 2022 2021
−Removed: Acquisition Date Fair Value
−Removed: Weighted-Average Useful Life
−Removed: (in millions)
−Removed: Developed technologies $ 100 $ 433 7.8 11.7
−Removed: Customer relationships 25 1,614 17.0 19.2
−Removed: Other — 24 — 7.1
−Removed: Other intangible assets $ 125 $ 2,071 9.6 17.5
−Removed: Proforma information related to these acquisitions was not included because the impact on the Company's consolidated results of operations was not considered to be material.
−Removed: Mastercard is a payments network service provider that generates revenue from a wide range of payment solutions provided to customers.
−Removed: Revenue from contracts with customers is recognized when services are performed in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those services (i.e., fees charged to customers).
−Removed: The Company disaggregates its net revenue from contracts with customers into two categories:
−Removed: (i) payment network and (ii) value-added services and solutions.
−Removed: The Company’s net revenue categories, payment network and value-added services and solutions, are recognized net of rebates and incentives provided to customers.
−Removed: Rebates and incentives can be either fixed or variable and are attributed to the category of revenue to which they pertain.
−Removed: Payment network
−Removed: Mastercard’s payment network involves four participants in addition to the Company:
−Removed: account holders (a person or entity who holds a card or uses another device enabled for payment), issuers (the account holders’ financial institutions), merchants and acquirers (the merchants’ financial institutions).
−Removed: Revenue from the Company’s payment network is primarily generated by charging fees to customers (issuers, acquirers and other market participants) for providing switching and other network-related services, as well as by charging fees to customers based primarily on the gross dollar volume of activity (GDV, which includes both domestic and cross-border volume) on the cards that carry the Company’s brands.
−Removed: As a payments network service provider, the Company provides its customers with continuous access to its global payments network and stands ready to provide transaction processing over the contractual term.
−Removed: Consideration is variable and is recognized as revenue in the period in which volumes and transactions occur.
−Removed: MASTERCARD 2023 FORM 10-K 82
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Value-added services and solutions
−Removed: The Company generates revenues from value-added services and solutions through either fixed or transaction-based fees.
−Removed: These services and solutions can be integrated and sold with the Company’s payment network services or can be sold on a stand-alone basis.
−Removed: These services and solutions primarily include cyber and intelligence, data and services, processing and gateway, ACH batch and real-time account-based payments and solutions, open banking and digital identity.
−Removed: Revenue from these value-added services and solutions is recognized in the period in which the related services and solutions are performed or transactions occur.
−Removed: The Company’s disaggregated net revenue by category and geographic region were as follows for the years ended December 31:
−Removed: 2023 2022 2021
−Removed: (in millions)
−Removed: Revenue by category:
−Removed: Payment network $ 15,824 $ 14,358 $ 11,943
−Removed: Value-added services and solutions 9,274 7,879 6,941
−Removed: Net revenue $ 25,098 $ 22,237 $ 18,884
−Removed: Net revenue by geographic region:
−Removed: North American Markets 1
−Removed: $ 8,359 $ 7,809 $ 6,667
−Removed: International Markets 16,739 14,428 12,217
−Removed: Net revenue $ 25,098 $ 22,237 $ 18,884
−Removed: 1 North American Markets includes the United States and Canada, excluding the U.S.
−Removed: The Company’s customers are generally billed weekly, with certain billings occurring on a monthly and quarterly basis.
−Removed: The frequency of billing is dependent upon the nature of the performance obligation and the underlying contractual terms.
−Removed: The Company does not typically offer extended payment terms to customers.
−Removed: The following table sets forth the location of the amounts recognized on the consolidated balance sheet from contracts with customers at December 31:
−Removed: (in millions)
−Removed: Receivables from contracts with customers
−Removed: Accounts receivable
−Removed: $ 3,851 $ 3,213
−Removed: Contract assets
−Removed: Prepaid expenses and other current assets 133 118
−Removed: Other assets 387 442
−Removed: Deferred revenue 1
−Removed: Other current liabilities 459 434
−Removed: Other liabilities 318 248
−Removed: 1 Revenue recognized from performance obligations satisfied in 2023 was $ 2.1 billion.
−Removed: The Company’s remaining performance periods for its contracts with customers for its payments network services are typically long-term in nature (generally up to 10 years).
−Removed: As a payments network service provider, the Company provides its customers with continuous access to its global payments network and stands ready to provide transaction processing and related services over the contractual term.
−Removed: Consideration is variable as the Company generates volume- and transaction-based revenues from charging fees on its customers’ current period activity.
−Removed: The Company has elected the optional exemption to not disclose the remaining performance obligations related to its payments network services.
−Removed: The Company also earns revenue from value-added services and solutions.
−Removed: At December 31, 2023, the estimated aggregate consideration allocated to unsatisfied performance obligations for these value-added services and solutions is $ 1.5 billion, which is expected to be recognized through 2028.
−Removed: The estimated remaining performance obligations related to these revenues are subject to change and are affected by several factors, including modifications and terminations and are not expected to be material to any future annual period.
−Removed: 83 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Earnings Per Share
−Removed: The components of basic and diluted EPS for common shares for each of the years ended December 31 were as follows:
−Removed: 2023 2022 2021
−Removed: (in millions, except per share data)
−Removed: Net income $ 11,195 $ 9,930 $ 8,687
−Removed: Basic weighted-average shares outstanding 944 968 988
−Removed: Dilutive stock options and stock units 2 3 4
−Removed: Diluted weighted-average shares outstanding 1
−Removed: Earnings per Share
−Removed: Basic $ 11.86 $ 10.26 $ 8.79
−Removed: Diluted $ 11.83 $ 10.22 $ 8.76
−Removed: Table may not sum due to rounding.
−Removed: 1 For the years presented, the calculation of diluted EPS excluded a minimal amount of anti-dilutive share-based payment awards.
−Removed: Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
−Removed: The following table provides the components of cash, cash equivalents, restricted cash and restricted cash equivalents reported on the consolidated balance sheet that total to the amounts shown on the consolidated statement of cash flows for the years ended December 31:
−Removed: (in millions)
−Removed: Cash and cash equivalents $ 8,588 $ 7,008
−Removed: Restricted cash and restricted cash equivalents
−Removed: Restricted cash for litigation settlement 1
−Removed: Restricted security deposits held for customers 1,845 1,568
−Removed: Prepaid expenses and other current assets 32 31
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents $ 10,465 $ 9,196
−Removed: 1 During 2023, the Company reduced its Restricted cash for litigation settlement balance by $ 600 million, including accrued interest, as a settlement became final in August 2023.
−Removed: See Note 21 (Legal and Regulatory Proceedings) for additional information regarding the Company’s restricted cash for litigation settlement.
−Removed: Supplemental Cash Flows
−Removed: The following table includes supplemental cash flow disclosures for each of the years ended December 31:
−Removed: 2023 2022 2021
−Removed: (in millions)
−Removed: Cash paid for income taxes, net of refunds $ 2,746 $ 2,506 $ 1,820
−Removed: Cash paid for interest 477 414 399
−Removed: Cash paid for legal settlements 929 114 98
−Removed: Non-cash investing and financing activities
−Removed: Dividends declared but not yet paid 616 545 479
−Removed: Accrued property, equipment and right-of-use assets 147 118 15
−Removed: Fair value of assets acquired, net of cash acquired — 341 4,969
−Removed: Fair value of liabilities assumed related to acquisitions — 27 522
−Removed: MASTERCARD 2023 FORM 10-K 84
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The Company’s investments on the consolidated balance sheet include both available-for-sale and held-to-maturity debt securities (see Investments section below).
−Removed: The Company’s strategic investments in equity securities of publicly traded and privately held companies are classified within other assets on the consolidated balance sheet (see Equity Investments section below).
−Removed: Investments on the consolidated balance sheet consisted of the following at December 31:
−Removed: (in millions)
−Removed: Available-for-sale securities
−Removed: Held-to-maturity securities 1
−Removed: Total investments $ 592 $ 400
−Removed: 1 Held-to-maturity securities represent investments in time deposits that mature within one year.
−Removed: The cost of these securities approximates fair value.
−Removed: Investment income on the consolidated statement of operations primarily consists of interest income generated from cash, cash equivalents, held-to-maturity and available-for-sale investment securities, as well as realized gains and losses on the Company’s investment securities.
−Removed: The realized gains and losses from the sales of available-for-sale securities for 2023, 2022 and 2021 were not material.
−Removed: Available-for-Sale Securities
−Removed: The major classes of the Company’s available-for-sale investment securities and their respective amortized cost basis and fair values at December 31 were as follows:
−Removed: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value
−Removed: (in millions)
−Removed: Government and agency securities $ 86 $ — $ — $ 86 $ 91 $ — $ ( 2 ) $ 89
−Removed: Corporate securities 200 1 ( 1 ) 200 187 — ( 4 ) 183
−Removed: Total $ 286 $ 1 $ ( 1 ) $ 286 $ 278 $ — $ ( 6 ) $ 272
−Removed: The Company’s government and agency securities include U.S.
−Removed: government bonds, U.S.
−Removed: government sponsored agency bonds and foreign government bonds which are denominated in the national currency of the issuing country.
−Removed: Corporate securities held at December 31, 2023 and 2022, primarily carried a credit rating of A- or better.
−Removed: Corporate securities are comprised of commercial paper and corporate bonds.
−Removed: The gross unrealized losses on the available-for-sale securities are primarily driven by changes in interest rates.
−Removed: For the available-for-sale securities in gross unrealized loss positions, the Company (1) does not intend to sell the securities, (2) more likely than not, will not be required to sell the securities before recovery of the unrealized losses, and (3) expects that the contractual principal and interest will be received.
−Removed: Unrealized gains and losses are recorded as a separate component of other comprehensive income (loss) on the consolidated statement of comprehensive income.
−Removed: The maturity distribution based on the contractual terms of the Company’s available-for-sale investment securities at December 31, 2023 was as follows:
−Removed: Cost Fair Value
−Removed: (in millions)
−Removed: Due within 1 year $ 170 $ 169
−Removed: Due after 1 year through 5 years 116 117
−Removed: Total $ 286 $ 286
−Removed: 85 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Equity Investments
−Removed: Included in other assets on the consolidated balance sheet are equity investments with readily determinable fair values (“Marketable securities”) and equity investments without readily determinable fair values (“Nonmarketable securities”).
−Removed: Marketable securities are equity interests in publicly traded companies and are measured using unadjusted quoted prices in their respective active markets.
−Removed: Nonmarketable securities that do not qualify for equity method accounting are measured at cost, less any impairment and adjusted for changes resulting from observable price changes in orderly transactions for the identical or similar investments of the same issuer (“Measurement alternative”).
−Removed: The following table is a summary of the activity related to the Company’s equity investments:
−Removed: Balance at December 31, 2022 Purchases Sales Changes in Fair Value 1
−Removed: Balance at December 31, 2023
−Removed: (in millions)
−Removed: Marketable securities $ 399 $ — $ — $ 97 $ 10 $ 506
−Removed: Nonmarketable securities 1,331 89 ( 44 ) ( 158 ) 5 1,223
−Removed: Total equity investments $ 1,730 $ 89 $ ( 44 ) $ ( 61 ) $ 15 $ 1,729
−Removed: 1 Recorded in gains (losses) on equity investments, net on the consolidated statement of operations.
−Removed: 2 Includes translational impact of currency.
−Removed: The following table sets forth the components of the Company’s Nonmarketable securities at December 31:
−Removed: (in millions)
−Removed: Measurement alternative
−Removed: $ 1,008 $ 1,087
−Removed: Equity method
−Removed: Total Nonmarketable securities $ 1,223 $ 1,331
−Removed: The following table summarizes the total carrying value of the Company’s Measurement alternative investments, including cumulative unrealized gains and losses through December 31:
−Removed: (in millions)
−Removed: Initial cost basis
−Removed: Cumulative adjustments 1 :
−Removed: Upward adjustments 630
−Removed: Downward adjustments (including impairment) ( 175 )
−Removed: Carrying amount, end of period $ 1,008
−Removed: 1 Includes immaterial translational impact of currency.
−Removed: The following table summarizes the unrealized gains and losses included in the carrying value of the Company’s Measurement alternative investments and Marketable securities for the years ended December 31:
−Removed: 2023 2022 2021
−Removed: (in millions)
−Removed: Measurement alternative investments:
−Removed: Upward adjustments $ 7 $ 114 $ 468
−Removed: Downward adjustments (including impairment) $ ( 145 ) $ ( 23 ) $ ( 2 )
−Removed: Marketable securities:
−Removed: Unrealized gains (losses), net $ 97 $ ( 213 ) $ 8
−Removed: MASTERCARD 2023 FORM 10-K 86
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Fair Value Measurements
−Removed: The Company’s financial instruments are carried at fair value, cost or amortized cost on the consolidated balance sheet.
−Removed: The Company classifies its fair value measurements of financial instruments into a three-level hierarchy (the “Valuation Hierarchy”).
−Removed: Financial Instruments - Carried at Fair Value
−Removed: Financial instruments carried at fair value are categorized for fair value measurement purposes as recurring or nonrecurring in nature.
−Removed: Recurring Measurements
−Removed: The distribution of the Company’s financial instruments measured at fair value on a recurring basis within the Valuation Hierarchy were as follows:
−Removed: December 31, 2023 December 31, 2022
−Removed: Quoted Prices
−Removed: (Level 1) Significant
−Removed: (Level 2) Significant
−Removed: (Level 3) Total Quoted Prices
−Removed: (Level 1) Significant
−Removed: (Level 2) Significant
−Removed: (Level 3) Total
−Removed: (in millions)
−Removed: Investment securities available-for-sale 1 :
−Removed: Government and agency securities 33 53 — 86 35 54 — 89
−Removed: Corporate securities — 200 — 200 — 183 — 183
−Removed: Derivative instruments 2 :
−Removed: Foreign exchange contracts — 36 — 36 — 108 — 108
−Removed: Marketable securities 3 :
−Removed: Equity securities 506 — — 506 399 — — 399
−Removed: Deferred compensation plan 4 :
−Removed: Deferred compensation assets 93 — — 93 74 — — 74
−Removed: Derivative instruments 2 :
−Removed: Foreign exchange contracts $ — $ 104 $ — $ 104 $ — $ 21 $ — $ 21
−Removed: Interest rate contracts — 79 — 79 — 105 — 105
−Removed: Deferred compensation plan 5 :
−Removed: Deferred compensation liabilities 91 — — 91 73 — — 73
−Removed: 1 The Company’s U.S.
−Removed: government securities are classified within Level 1 of the Valuation Hierarchy as the fair values are based on unadjusted quoted prices for identical assets in active markets.
−Removed: The fair value of the Company’s available-for-sale non-U.S.
−Removed: government and agency securities and corporate securities are based on observable inputs such as quoted prices, benchmark yields and issuer spreads for similar assets in active markets and are therefore included in Level 2 of the Valuation Hierarchy.
−Removed: 2 The Company’s foreign exchange and interest rate derivative asset and liability contracts have been classified within Level 2 of the Valuation Hierarchy as the fair value is based on observable inputs such as broker quotes for similar derivative instruments.
−Removed: See Note 23 (Derivative and Hedging Instruments) for further details.
−Removed: 3 The Company’s Marketable securities are publicly held and classified within Level 1 of the Valuation Hierarchy as the fair values are based on unadjusted quoted prices in their respective active markets.
−Removed: 4 The Company has a nonqualified deferred compensation plan where assets are invested primarily in mutual funds held in a rabbi trust, which is restricted for payments to participants of the plan.
−Removed: The Company has elected to use the fair value option for these mutual funds, which are measured using quoted prices of identical instruments in active markets and are included in prepaid expenses and other current assets on the consolidated balance sheet.
−Removed: 5 The deferred compensation liabilities are measured at fair value based on the quoted prices of identical instruments to the investment vehicles selected by the participants.
−Removed: These are included in other liabilities on the consolidated balance sheet.
−Removed: 87 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Nonrecurring Measurements
−Removed: Nonmarketable Securities
−Removed: The Company’s Nonmarketable securities are recorded at fair value on a nonrecurring basis in periods after initial recognition under the equity method or measurement alternative method.
−Removed: Nonmarketable securities are classified within Level 3 of the Valuation Hierarchy due to the absence of quoted market prices, the inherent lack of liquidity and unobservable inputs used to measure fair value that require management’s judgment.
−Removed: The Company uses discounted cash flows and market assumptions to estimate the fair value of its Nonmarketable securities when certain events or circumstances indicate that impairment may exist.
−Removed: See Note 7 (Investments) for further details.
−Removed: Financial Instruments - Not Carried at Fair Value
−Removed: Debt instruments are carried on the consolidated balance sheet at amortized cost.
−Removed: The Company estimates the fair value of its debt based on either market quotes or observable market data.
−Removed: Debt is classified as Level 2 of the Valuation Hierarchy as it is generally not traded in active markets.
−Removed: At December 31, 2023, the carrying value and fair value of debt was $ 15.7 billion and $ 14.7 billion, respectively.
−Removed: At December 31, 2022, the carrying value and fair value of debt was $ 14.0 billion and $ 12.7 billion, respectively.
−Removed: See Note 15 (Debt) for further details.
−Removed: Other Financial Instruments
−Removed: Certain other financial instruments are carried on the consolidated balance sheet at cost or amortized cost basis, which approximates fair value due to their short-term, highly liquid nature.
−Removed: These instruments include cash and cash equivalents, restricted cash, time deposits, accounts receivable, settlement assets, restricted security deposits held for customers, accounts payable, settlement obligations and other accrued liabilities.
−Removed: Prepaid Expenses and Other Assets
−Removed: Prepaid expenses and other current assets consisted of the following at December 31:
−Removed: (in millions)
−Removed: Customer incentives
−Removed: $ 1,570 $ 1,392
−Removed: Other 1,073 954
−Removed: Total prepaid expenses and other current assets $ 2,643 $ 2,346
−Removed: Other assets consisted of the following at December 31:
−Removed: (in millions)
−Removed: Customer incentives
−Removed: $ 5,170 $ 4,578
−Removed: Equity investments 1,729 1,730
−Removed: Income taxes receivable 783 633
−Removed: Other 643 639
−Removed: Total other assets $ 8,325 $ 7,580
−Removed: Customer incentives represent payments made to customers under business agreements.
−Removed: Payments made directly related to entering into such an agreement are generally capitalized and amortized over the life of the agreement.
−Removed: MASTERCARD 2023 FORM 10-K 88
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Property, Equipment and Right-of-Use Assets
−Removed: Property, equipment and right-of-use assets consisted of the following at December 31:
−Removed: (in millions)
−Removed: Buildings, building equipment and land $ 678 $ 652
−Removed: Equipment 1,940 1,711
−Removed: Furniture and fixtures 90 96
−Removed: Leasehold improvements 398 376
−Removed: Operating lease right-of-use assets 1,192 1,075
−Removed: Property, equipment and right-of-use assets 4,298 3,910
−Removed: Accumulated depreciation and amortization ( 2,237 ) ( 1,904 )
−Removed: Property, equipment and right-of-use assets, net $ 2,061 $ 2,006
−Removed: Depreciation and amortization expense for the above property, equipment and right-of-use assets was $ 482 million, $ 473 million and $ 424 million for 2023, 2022 and 2021, respectively.
−Removed: Operating lease ROU assets and operating lease liabilities are recorded on the consolidated balance sheet as follows at December 31:
−Removed: (in millions)
−Removed: Balance sheet location
−Removed: Property, equipment and right-of-use assets, net $ 686 $ 679
−Removed: Other current liabilities 142 140
−Removed: Other liabilities 633 630
−Removed: Operating lease amortization expense was $ 141 million, $ 137 million and $ 122 million for 2023, 2022 and 2021, respectively.
−Removed: As of December 31, 2023 and 2022, the weighted-average remaining lease term of operating leases was 8.2 years and 8.4 years and the weighted-average discount rate for operating leases was 3.3 % and 2.5 %, respectively.
−Removed: The useful lives of the Company’s assets are as follows:
−Removed: Asset Category Estimated Useful Life
−Removed: Buildings 30 years
−Removed: Building equipment 10 - 15 years
−Removed: Equipment and furniture and fixtures
−Removed: Leasehold improvements Shorter of life of improvement or lease term
−Removed: Right-of-use assets Shorter of life of the asset or lease term
−Removed: 89 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table summarizes the maturity of the Company’s operating lease liabilities at December 31, 2023 based on lease term:
−Removed: Operating Leases
−Removed: (in millions)
−Removed: Thereafter 325
−Removed: Total operating lease payments 884
−Removed: Interest ( 109 )
−Removed: Present value of operating lease liabilities $ 775
−Removed: The changes in the carrying amount of goodwill for the years ended December 31 were as follows:
−Removed: (in millions)
−Removed: Beginning balance $ 7,522 $ 7,662
−Removed: Additions 46 200
−Removed: Foreign currency translation 92 ( 340 )
−Removed: Ending balance $ 7,660 $ 7,522
−Removed: The Company performed its annual qualitative assessment of goodwill during the fourth quarter of 2023 and determined a quantitative assessment was not necessary.
−Removed: The Company concluded that goodwill was not impaired and had no accumulated impairment losses at December 31, 2023.
−Removed: Other Intangible Assets
−Removed: The following table sets forth net intangible assets, other than goodwill, at December 31:
−Removed: Gross Carrying Amount
−Removed: Accumulated Amortization
−Removed: Net Carrying Amount
−Removed: Gross Carrying Amount
−Removed: Accumulated Amortization
−Removed: Net Carrying Amount
−Removed: (in millions)
−Removed: Finite-lived intangible assets
−Removed: Capitalized software 1
−Removed: $ 3,917 $ ( 1,530 ) $ 2,387 $ 3,448 $ ( 1,402 ) $ 2,046
−Removed: Customer relationships 2,165 ( 641 ) 1,524 2,161 ( 521 ) 1,640
−Removed: Other 51 ( 38 ) 13 54 ( 37 ) 17
−Removed: Total 6,133 ( 2,209 ) 3,924 5,663 ( 1,960 ) 3,703
−Removed: Indefinite-lived intangible assets
−Removed: Customer relationships 162 — 162 156 — 156
−Removed: Total $ 6,295 $ ( 2,209 ) $ 4,086 $ 5,819 $ ( 1,960 ) $ 3,859
−Removed: 1 Includes technology acquired in business combinations.
−Removed: The increase in the gross carrying amount of finite-lived intangible assets in 2023 was primarily related to software additions to support the continued growth of the Company.
−Removed: Certain intangible assets are denominated in foreign currencies.
−Removed: As such, the change in intangible assets includes a component attributable to foreign currency translation.
−Removed: Based on the qualitative assessment performed in 2023, it was determined that the Company’s indefinite-lived intangible assets were not impaired.
−Removed: MASTERCARD 2023 FORM 10-K 90
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Amortization on the finite-lived intangible assets above amounted to $ 457 million, $ 414 million and $ 424 million in 2023, 2022 and 2021, respectively.
−Removed: The following table sets forth the estimated future amortization expense on finite-lived intangible assets on the consolidated balance sheet at December 31, 2023 for the years ending December 31:
−Removed: (in millions)
−Removed: Thereafter 1,546
−Removed: Total $ 3,924
−Removed: Accrued Expenses and Accrued Litigation
−Removed: Accrued expenses consisted of the following at December 31:
−Removed: (in millions)
−Removed: Customer incentives
−Removed: $ 6,219 $ 5,600
−Removed: Personnel costs 1,258 1,322
−Removed: Income and other taxes 486 279
−Removed: Other 554 600
−Removed: Total accrued expenses $ 8,517 $ 7,801
−Removed: Customer incentives represent amounts to be paid to customers under business agreements.
−Removed: As of December 31, 2023 and 2022, long-term customer incentives included in other liabilities were $ 2,777 million and $ 2,293 million, respectively.
−Removed: As of December 31, 2023 and 2022, the Company’s provision for litigation was $ 723 million and $ 1,094 million, respectively.
−Removed: These amounts are separately reported as accrued litigation on the consolidated balance sheet.
−Removed: The decrease during 2023 is primarily due to a $ 600 million decrease in the Company’s provision for litigation and corresponding restricted cash after a settlement became final in August 2023.
−Removed: This decrease was partially offset by the provisions for other litigation.
−Removed: See Note 21 (Legal and Regulatory Proceedings) for additional information regarding the Company’s accrued litigation.
−Removed: Pension, Postretirement and Savings Plans
−Removed: The Company and certain of its subsidiaries maintain various pension and other postretirement plans that cover substantially all employees worldwide.
−Removed: Defined Contribution Plans
−Removed: The Company sponsors defined contribution retirement plans.
−Removed: The primary plan is the Mastercard Savings Plan, a 401(k) plan for substantially all of the Company’s U.S.
−Removed: employees, which is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
−Removed: In addition, the Company has several defined contribution plans outside of the U.S.
−Removed: The Company’s total expense for its defined contribution plans was $ 253 million, $ 204 million and $ 175 million in 2023, 2022 and 2021, respectively.
−Removed: Defined Benefit and Other Postretirement Plans
−Removed: The Company sponsors pension and postretirement plans for certain non-U.S.
−Removed: employees (the “non-U.S.
−Removed: Plans”) that cover various benefits specific to their country of employment.
−Removed: Additionally, Vocalink has a defined benefit pension plan (the “Vocalink Plan”) which was permanently closed to new entrants and future accruals as of July 21, 2013, however, plan participants’ obligations are adjusted for future salary changes.
−Removed: The term “Pension Plans” includes the non-U.S.
−Removed: Plans and the Vocalink Plan.
−Removed: The Company maintains a postretirement plan providing health coverage and life insurance benefits for substantially all of its U.S.
−Removed: employees hired before July 1, 2007 (the “Postretirement Plan”).
−Removed: 91 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The Company uses a December 31 measurement date for the Pension Plans and its Postretirement Plan (collectively the “Plans”).
−Removed: The Company recognizes the funded status of its Plans, measured as the difference between the fair value of the plan assets and the projected benefit obligation, on the consolidated balance sheet.
−Removed: The following table sets forth the Plans’ funded status, key assumptions and amounts recognized on the Company’s consolidated balance sheet at December 31:
−Removed: Pension Plans Postretirement Plan
−Removed: 2023 2022 2023 2022
−Removed: ($ in millions)
−Removed: Change in benefit obligation
−Removed: Benefit obligation at beginning of year $ 392 $ 596 $ 43 $ 62
−Removed: Service cost 14 12 1 1
−Removed: Interest cost 18 9 2 2
−Removed: Actuarial (gain) loss ( 15 ) ( 156 ) 6 ( 16 )
−Removed: Benefits paid ( 16 ) ( 16 ) ( 6 ) ( 6 )
−Removed: Transfers in 8 5 — —
−Removed: Foreign currency translation 19 ( 58 ) — —
−Removed: Benefit obligation at end of year 420 392 46 43
−Removed: Change in plan assets
−Removed: Fair value of plan assets at beginning of year 430 688 — —
−Removed: Actual gain/(loss) on plan assets ( 8 ) ( 203 ) — —
−Removed: Employer contributions 16 25 6 6
−Removed: Benefits paid ( 16 ) ( 16 ) ( 6 ) ( 6 )
−Removed: Transfers in 5 5 — —
−Removed: Foreign currency translation 22 ( 69 ) — —
−Removed: Fair value of plan assets at end of year 449 430 — —
−Removed: Funded status at end of year $ 29 $ 38 $ ( 46 ) $ ( 43 )
−Removed: Amounts recognized on the consolidated balance sheet consist of:
−Removed: Noncurrent assets $ 38 $ 44 $ — $ —
−Removed: Other liabilities, short-term — — ( 3 ) ( 3 )
−Removed: Other liabilities, long-term ( 9 ) ( 6 ) ( 43 ) ( 40 )
−Removed: Net amounts recognized on the consolidated balance sheet
−Removed: $ 29 $ 38 $ ( 46 ) $ ( 43 )
−Removed: Accumulated other comprehensive income consists of:
−Removed: Net actuarial (gain) loss $ 34 $ 23 $ ( 8 ) $ ( 14 )
−Removed: Prior service credit 1 1 — ( 1 )
−Removed: Balance at end of year $ 35 $ 24 $ ( 8 ) $ ( 15 )
−Removed: Weighted-average assumptions used to determine end of year benefit obligations
−Removed: Discount rate
−Removed: Plans 4.20 % 3.80 % * *
−Removed: Vocalink Plan 5.15 % 4.80 % * *
−Removed: Postretirement Plan * * 5.00 % 5.50 %
−Removed: Rate of compensation increase
−Removed: Plans 1.50 % 1.50 % * *
−Removed: Vocalink Plan 2.75 % 2.70 % * *
−Removed: Postretirement Plan * * 3.00 % 3.00 %
−Removed: * Not applicable
−Removed: MASTERCARD 2023 FORM 10-K 92
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: At December 31, 2023 and 2022, the Company’s aggregated Pension Plan assets exceeded the benefit obligations.
−Removed: For plans where the benefit obligations exceeded plan assets, the projected benefit obligation, the accumulated benefit obligation and plan assets were not material at December 31, 2023 and 2022, respectively.
−Removed: Information on the Pension Plans were as follows as of December 31:
−Removed: (in millions)
−Removed: Projected benefit obligation $ 420 $ 392
−Removed: Accumulated benefit obligation 419 388
−Removed: Fair value of plan assets 449 430
−Removed: For the year ended December 31, 2023, the Company’s projected benefit obligation related to its Pension Plans increased $ 28 million, primarily attributable to foreign currency translation.
−Removed: For the year ended December 31, 2022, the Company’s projected benefit obligation related to its Pension Plans decreased $ 204 million, primarily attributable to actuarial gains related to higher discount rate assumptions.
−Removed: Components of net periodic benefit cost recorded in earnings were as follows for the Plans for each of the years ended December 31:
−Removed: Pension Plans Postretirement Plan
−Removed: 2023 2022 2021 2023 2022 2021
−Removed: (in millions)
−Removed: Service cost $ 14 $ 12 $ 14 $ 1 $ 1 $ 1
−Removed: Interest cost 18 9 9 2 2 2
−Removed: Expected return on plan assets ( 18 ) ( 14 ) ( 19 ) — — —
−Removed: Amortization of actuarial loss — — ( 1 ) — — —
−Removed: Amortization of prior service credit — — — ( 1 ) ( 1 ) ( 1 )
−Removed: Net periodic benefit cost $ 14 $ 7 $ 3 $ 2 $ 2 $ 2
−Removed: The service cost component is recognized in general and administrative expenses on the consolidated statement of operations.
−Removed: Net periodic benefit cost, excluding the service cost component, is recognized in other income (expense) on the consolidated statement of operations.
−Removed: Other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31 were as follows:
−Removed: Pension Plans Postretirement Plan
−Removed: 2023 2022 2021 2023 2022 2021
−Removed: (in millions)
−Removed: Current year actuarial loss (gain) $ 11 $ 61 $ ( 50 ) $ 6 $ ( 16 ) $ ( 7 )
−Removed: Amortization of prior service credit $ — $ — $ — $ 1 $ 1 $ 2
−Removed: Total other comprehensive loss (income) $ 11 $ 61 $ ( 50 ) $ 7 $ ( 15 ) $ ( 5 )
−Removed: Total net periodic benefit cost and other comprehensive loss (income) $ 25 $ 68 $ ( 47 ) $ 9 $ ( 13 ) $ ( 3 )
−Removed: 93 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Weighted-average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31:
−Removed: Pension Plans Postretirement Plan
−Removed: 2023 2022 2021 2023 2022 2021
−Removed: Discount rate
−Removed: Plans 3.80 % 0.90 % 0.70 % * * *
−Removed: Vocalink Plan 4.80 % 1.75 % 1.55 % * * *
−Removed: Postretirement Plan * * * 5.50 % 2.75 % 2.50 %
−Removed: Expected return on plan assets
−Removed: Plans 1.80 % 1.60 % 1.60 % * * *
−Removed: Vocalink Plan 5.25 % 2.30 % 3.20 % * * *
−Removed: Rate of compensation increase
−Removed: Plans 1.50 % 1.50 % 1.50 % * * *
−Removed: Vocalink Plan 2.70 % 3.20 % 2.75 % * * *
−Removed: Postretirement Plan * * * 3.00 % 3.00 % 3.00 %
−Removed: * Not applicable
−Removed: The Company’s discount rate assumptions are based on yield curves derived from high quality corporate bonds, which are matched to the expected cash flows of each respective plan.
−Removed: The expected return on plan assets assumptions are derived using the current and expected asset allocations of the Pension Plans’ assets and considering historical as well as expected returns on various classes of plan assets.
−Removed: The rates of compensation increases are determined by the Company, based upon its long-term plans for such increases.
−Removed: The following additional assumptions were used at December 31 in accounting for the Postretirement Plan:
−Removed: Healthcare cost trend rate assumed for next year 7.00 % 6.50 %
−Removed: Ultimate trend rate 5.00 % 5.00 %
−Removed: Year that the rate reaches the ultimate trend rate 8 6
−Removed: Plan assets are managed taking into account the timing and amount of future benefit payments.
−Removed: The Vocalink Plan assets are managed with the following target asset allocations:
−Removed: cash and cash equivalents 13 %, U.K.
−Removed: government securities 35 %, fixed income 34 %, equity 7 % and real estate 11 %.
−Removed: For the non-U.S.
−Removed: Plans, the assets are concentrated primarily in insurance contracts.
−Removed: The Valuation Hierarchy of the Pension Plans’ assets is determined using a consistent application of the categorization measurements for the Company’s financial instruments.
−Removed: See Note 1 (Summary of Significant Accounting Policies) for additional information.
−Removed: MASTERCARD 2023 FORM 10-K 94
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table sets forth by level within the Valuation Hierarchy, the Pension Plans’ assets at fair value:
−Removed: December 31, 2023 December 31, 2022
−Removed: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant
−Removed: (Level 3) Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant
−Removed: (Level 3) Fair Value
−Removed: (in millions)
−Removed: Cash and cash equivalents 1
−Removed: $ 43 $ — $ — $ 43 $ 43 $ — $ — $ 43
−Removed: Mutual funds 2
−Removed: 124 109 — 233 106 128 — 234
−Removed: Insurance contracts 3
−Removed: — 124 — 124 — 114 — 114
−Removed: Total $ 167 $ 233 $ — $ 400 $ 149 $ 242 $ — $ 391
−Removed: Investments at Net Asset Value (“NAV”) 4
−Removed: Total Plan Assets $ 449 $ 430
−Removed: 1 Cash and cash equivalents are valued at quoted market prices, which represent the net asset value of the shares held by the Plans.
−Removed: 2 Certain mutual funds are valued at quoted market prices, which represent the value of the shares held by the Plans, and are therefore included in Level 1.
−Removed: Certain other mutual funds are valued at unit values provided by investment managers, which are based on the fair value of the underlying investments utilizing public information, independent external valuation from third-party services or third-party advisors, and are therefore included in Level 2.
−Removed: 3 Insurance contracts are valued at unit values provided by investment managers, which are based on the fair value of the underlying investments utilizing public information, independent external valuation from third-party services or third-party advisors.
−Removed: 4 Investments at NAV include mutual funds (comprised primarily of credit investments) and other investments (comprised primarily of real estate investments) and are valued using the net asset value provided by the administrator as a practical expedient, and therefore these investments are not included in the valuation hierarchy.
−Removed: These investments have quarterly redemption frequencies with redemption notice periods ranging from 60 to 90 days.
−Removed: The following table summarizes expected benefit payments (as of December 31, 2023) through 2033 for the Pension Plans and the Postretirement Plan, including those payments expected to be paid from the Company’s general assets.
−Removed: Actual benefit payments may differ from expected benefit payments.
−Removed: Pension Plans Postretirement Plan
−Removed: (in millions)
−Removed: 2024 $ 35 $ 3
−Removed: 2029 - 2033 133 20
−Removed: 95 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Debt consisted of the following at December 31:
−Removed: 2023 2022 Effective
−Removed: Interest Rate
−Removed: (in millions)
−Removed: 2023 USD Notes 4.875 % Senior Notes due March 2028 $ 750 $ — 5.003 %
−Removed: 4.850 % Senior Notes due March 2033 750 — 4.923 %
−Removed: 2022 EUR Notes 1
−Removed: 1.000 % Senior Notes due February 2029 830 800 1.138 %
−Removed: 2021 USD Notes 2.000 % Senior Notes due November 2031 750 750 2.112 %
−Removed: 1.900 % Senior Notes due March 2031 600 600 1.981 %
−Removed: 2.950 % Senior Notes due March 2051 700 700 3.013 %
−Removed: 2020 USD Notes 3.300 % Senior Notes due March 2027 1,000 1,000 3.420 %
−Removed: 3.350 % Senior Notes due March 2030 1,500 1,500 3.430 %
−Removed: 3.850 % Senior Notes due March 2050 1,500 1,500 3.896 %
−Removed: 2019 USD Notes 2.950 % Senior Notes due June 2029 1,000 1,000 3.030 %
−Removed: 3.650 % Senior Notes due June 2049 1,000 1,000 3.689 %
−Removed: 2.000 % Senior Notes due March 2025 750 750 2.147 %
−Removed: 2018 USD Notes 3.500 % Senior Notes due February 2028 500 500 3.598 %
−Removed: 3.950 % Senior Notes due February 2048 500 500 3.990 %
−Removed: 2016 USD Notes 2.950 % Senior Notes due November 2026 750 750 3.044 %
−Removed: 3.800 % Senior Notes due November 2046 600 600 3.893 %
−Removed: 2015 EUR Notes 2
−Removed: 2.100 % Senior Notes due December 2027 885 854 2.189 %
−Removed: 2.500 % Senior Notes due December 2030 166 160 2.562 %
−Removed: 2014 USD Notes 3.375 % Senior Notes due April 2024 1,000 1,000 3.484 %
−Removed: 2023 INR Term Loan 3
−Removed: 9.430 % Term Loan due July 2024 338 — 9.780 %
−Removed: 2022 INR Term Loan 4
−Removed: 8.640 % Term Loan due July 2023 — 275 9.090 %
−Removed: 15,869 14,239
−Removed: Unamortized discount and debt issuance costs ( 109 ) ( 111 )
−Removed: Cumulative hedge accounting fair value adjustments 5
−Removed: ( 79 ) ( 105 )
−Removed: Total debt outstanding 15,681 14,023
−Removed: Short-term debt 6
−Removed: ( 1,337 ) ( 274 )
−Removed: Long-term debt $ 14,344 $ 13,749
−Removed: 1 € 750 million euro-denominated debt issued in February 2022.
−Removed: 2 € 950 million euro-denominated debt remaining of the € 1.650 billion issued in December 2015.
−Removed: 3 INR 28.1 billion Indian rupee-denominated loan issued in July 2023.
−Removed: 4 INR 22.7 billion Indian rupee-denominated loan issued in July 2022.
−Removed: 5 The Company has an interest rate swap which is accounted for as a fair value hedge.
−Removed: See Note 23 (Derivative and Hedging Instruments) for additional information.
−Removed: 6 The 2014 USD Notes due April 2024 and the INR Term Loan due July 2024 are classified as short-term debt, net of unamortized discount and debt issuance costs, on the consolidated balance sheet as of December 31, 2023.
−Removed: The 2022 INR Term Loan due July 2023 was classified as short-term debt, net of unamortized issuance costs, on the consolidated balance sheet as of December 31, 2022.
−Removed: MASTERCARD 2023 FORM 10-K 96
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Scheduled annual maturities of the principal portion of long-term debt outstanding at December 31, 2023 are summarized below.
−Removed: (in millions)
−Removed: Thereafter 9,896
−Removed: Total $ 15,869
−Removed: In March 2023, the Company issued $ 750 million principal amount of notes due March 2028 and $ 750 million principal amount of notes due March 2033 (collectively the “2023 USD Notes”).
−Removed: The net proceeds from the issuance of the 2023 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $ 1.489 billion.
−Removed: In February 2022, the Company issued € 750 million ($ 830 million and $ 800 million as of December 31, 2023 and 2022, respectively) principal amount of notes due February 2029 (the “2022 EUR Notes”).
−Removed: The net proceeds from the issuance of the 2022 EUR Notes, after deducting the original issue discount, underwriting discount and offering expenses, were € 743 million ($ 843 million as of the date of settlement).
−Removed: In March 2021, the Company issued $ 600 million principal amount of notes due March 2031 and $ 700 million principal amount of notes due March 2051.
−Removed: In November 2021, the Company also issued $ 750 million principal amount of notes due November 2031.
−Removed: The two issuances in 2021 are collectively referred to as the “2021 USD Notes”.
−Removed: The net proceeds from the issuance of the 2021 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $ 2.024 billion.
−Removed: The Senior Notes described above are not subject to any financial covenants and may be redeemed in whole, or in part, at the Company’s option at any time for a specified make-whole amount.
−Removed: These notes are senior unsecured obligations and would rank equally with any future unsecured and unsubordinated indebtedness.
−Removed: Indian Rupee (“INR”) Term Loan
−Removed: In July 2022, the Company entered into an unsecured INR 22.7 billion term loan originally due July 2023 (the “2022 INR Term Loan”).
−Removed: The net proceeds of the 2022 INR Term Loan, after deducting issuance costs, were INR 22.6 billion ($ 284 million as of the date of settlement).
−Removed: In April 2023, the Company entered into an additional unsecured INR 4.97 billion term loan, also originally due July 2023 (the “April 2023 INR Term Loan”).
−Removed: The stated interest rate and effective interest rate were 9.480 % and 9.705 %, respectively.
−Removed: The net proceeds of the April 2023 INR Term Loan, after deducting issuance costs, were INR 4.96 billion ($ 61 million as of the date of settlement).
−Removed: In July 2023, the Company modified and combined the 2022 INR Term Loan and April 2023 INR Term Loan (the “2023 INR Term Loan”), increasing the total unsecured loans to INR 28.1 billion ($ 342 million as of the date of settlement).
−Removed: The 2023 INR Term Loan is due July 2024.
−Removed: The Company obtained the INR Term Loans to serve as economic hedges to offset possible changes in the value of INR-denominated monetary assets due to foreign exchange fluctuations.
−Removed: The INR Term Loans are not subject to any financial covenants and they may be repaid in whole at the Company’s option at any time for a specified make-whole amount.
−Removed: Commercial Paper Program and Credit Facility
−Removed: As of December 31, 2023, the Company has a commercial paper program (the “Commercial Paper Program”) under which the Company is authorized to issue up to $ 8 billion in unsecured commercial paper notes with maturities of up to 397 days from the date of issuance.
−Removed: The Commercial Paper Program is available in U.S.
−Removed: In conjunction with the Commercial Paper Program, the Company has a committed five-year unsecured $ 8 billion revolving credit facility (the “Credit Facility”).
−Removed: The Credit Facility, which previously was set to expire on November 10, 2027, was extended and now expires on November 8, 2028.
−Removed: Borrowings under the Credit Facility are available in U.S.
−Removed: dollars and/or euros.
−Removed: The facility fee under the Credit Facility is determined according to the Company’s credit rating and is payable on the average daily commitment, regardless of usage, per annum.
−Removed: In addition to the facility fee, interest rates on borrowings under the Credit Facility would be based
−Removed: 97 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: on prevailing market interest rates plus applicable margins that fluctuate based on the Company’s credit rating.
−Removed: The Credit Facility contains customary representations, warranties, affirmative and negative covenants, events of default and indemnification provisions.
−Removed: The Company was in compliance in all material respects with the covenants of the Credit Facility at December 31, 2023 and 2022.
−Removed: Borrowings under the Commercial Paper Program and the Credit Facility are to be used to provide liquidity for general corporate purposes, including providing liquidity in the event of one or more settlement failures by the Company’s customers.
−Removed: The Company may borrow and repay amounts under the Commercial Paper Program and Credit Facility for business continuity purposes.
−Removed: The Company had no borrowings under the Credit Facility or the Commercial Paper Program at December 31, 2023 and 2022.
−Removed: Stockholders' Equity
−Removed: Classes of Capital Stock
−Removed: Mastercard’s amended and restated certificate of incorporation authorizes the following classes of capital stock:
−Removed: Class Par Value Per Share Authorized Shares
−Removed: (in millions) Dividend and Voting Rights
−Removed: A $ 0.0001 3,000 One vote per share
−Removed: Dividend rights
−Removed: B $ 0.0001 1,200 Non-voting
−Removed: Dividend rights
−Removed: Preferred $ 0.0001 300 No shares issued or outstanding at December 31, 2023 and 2022.
−Removed: Dividend and voting rights are to be determined by the Board of Directors of the Company upon issuance.
−Removed: The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2023, 2022 and 2021.
−Removed: The total per share dividends declared during the years ended December 31 is summarized below:
−Removed: 2023 2022 2021
−Removed: (in millions, except per share data)
−Removed: Dividends declared per share $ 2.37 $ 2.04 $ 1.81
−Removed: Total dividends declared $ 2,231 $ 1,968 $ 1,781
−Removed: Ownership and Governance Structure
−Removed: Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31:
−Removed: Equity Ownership General Voting Power Equity Ownership General Voting Power
−Removed: Public Investors (Class A stockholders) 88.8 % 89.5 % 88.5 % 89.3 %
−Removed: Mastercard Foundation (Class A stockholders) 10.4 % 10.5 % 10.7 % 10.7 %
−Removed: Principal or Affiliate Customers (Class B stockholders) 0.8 % — % 0.8 % — %
−Removed: Class B Common Stock Conversions
−Removed: Shares of Class B common stock are convertible on a one-for-one basis into shares of Class A common stock.
−Removed: Entities eligible to hold Mastercard’s Class B common stock are defined in the Company’s amended and restated certificate of incorporation (generally the Company’s principal or affiliate customers), and they are restricted from retaining ownership of shares of Class A common stock.
−Removed: Class B stockholders are required to subsequently sell or otherwise transfer any shares of Class A common stock received pursuant to such a conversion.
−Removed: MASTERCARD 2023 FORM 10-K 98
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Mastercard Foundation
−Removed: In connection and simultaneously with its 2006 initial public offering (the “IPO”), the Company issued and donated 135 million newly authorized shares of Class A common stock to Mastercard Foundation.
−Removed: Mastercard Foundation is a private charitable foundation incorporated in Canada that is controlled by directors who are independent of the Company and its principal customers.
−Removed: Historically, Mastercard Foundation had been restricted from selling or otherwise transferring its shares of Class A common stock prior to May 1, 2027, except to the extent necessary to satisfy its charitable disbursement requirements.
−Removed: In July 2023, pursuant to an application in consultation with the Company, Mastercard Foundation received court approval to advance that date to January 1, 2024.
−Removed: As a result, Mastercard Foundation is now permitted to sell all or part of its remaining shares, subject to certain conditions.
−Removed: Mastercard Foundation would do so pursuant to an orderly and structured plan to diversify its Mastercard shares over a seven-year period, while remaining a long-term Mastercard stockholder and retaining a significant holding of Mastercard shares in its portfolio.
−Removed: Common Stock Activity
−Removed: The following table presents the changes in the Company’s outstanding Class A and Class B common stock:
−Removed: Outstanding Shares
−Removed: Class A Class B
−Removed: (in millions)
−Removed: Balance at December 31, 2020 986.9 8.3
−Removed: Purchases of treasury stock ( 16.5 ) —
−Removed: Share-based payments 1.2 —
−Removed: Conversion of Class B to Class A common stock 0.5 ( 0.5 )
−Removed: Balance at December 31, 2021 972.1 7.8
−Removed: Purchases of treasury stock ( 25.7 ) —
−Removed: Share-based payments 1.8 —
−Removed: Conversion of Class B to Class A common stock 0.2 ( 0.2 )
−Removed: Balance at December 31, 2022 948.4 7.6
−Removed: Purchases of treasury stock ( 23.8 ) —
−Removed: Share-based payments 2.3 —
−Removed: Conversion of Class B to Class A common stock 0.4 ( 0.4 )
−Removed: Balance at December 31, 2023 927.3 7.2
−Removed: The Company’s Board of Directors have approved share repurchase programs of its Class A Common Stock authorizing the Company to repurchase shares.
−Removed: The following table summarizes the Company’s share repurchase authorizations of its Class A common stock for the years ended December 31:
−Removed: 2023 2022 2021
−Removed: (In millions, except per share data)
−Removed: Board authorization $ 11,000 $ 9,000 $ 8,000
−Removed: Dollar-value of shares repurchased 1
−Removed: $ 9,032 $ 8,753 $ 5,904
−Removed: Shares repurchased 23.8 25.7 16.5
−Removed: Average price paid per share $ 379.49 $ 340.60 $ 356.82
−Removed: 1 The dollar-value of shares repurchased does not include a 1% excise tax that became effective January 1, 2023.
−Removed: The incremental tax is recorded in treasury stock on the consolidated balance sheet and is payable annually beginning in 2024.
−Removed: As of December 31, 2023, the remaining authorization under the share repurchase programs approved by the Company’s Board of Directors was $ 14.1 billion.
−Removed: 99 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Accumulated Other Comprehensive Income (Loss)
−Removed: The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2023 and 2022 were as follows:
−Removed: December 31, 2022 Increase / (Decrease) Reclassifications December 31, 2023
−Removed: (in millions)
−Removed: Foreign currency translation adjustments 1
−Removed: $ ( 1,414 ) $ 295 $ — $ ( 1,119 )
−Removed: Translation adjustments on net investment hedges 2
−Removed: 309 ( 128 ) — 181
−Removed: Cash flow hedges
−Removed: Foreign exchange contracts 3
−Removed: ( 8 ) ( 31 ) 22 ( 17 )
−Removed: Interest rate contracts ( 123 ) — 5 ( 118 )
−Removed: Defined benefit pension and other postretirement plans 4
−Removed: ( 11 ) ( 13 ) ( 1 ) ( 25 )
−Removed: Investment securities available-for-sale ( 6 ) 5 — ( 1 )
−Removed: Accumulated other comprehensive income (loss) $ ( 1,253 ) $ 128 $ 26 $ ( 1,099 )
−Removed: December 31, 2021 Increase / (Decrease) Reclassifications December 31, 2022
−Removed: (in millions)
−Removed: Foreign currency translation adjustments 1
−Removed: $ ( 739 ) $ ( 675 ) $ — $ ( 1,414 )
−Removed: Translation adjustments on net investment hedges 2
−Removed: Cash flow hedges
−Removed: Foreign exchange contracts 3
−Removed: 4 1 ( 13 ) ( 8 )
−Removed: Interest rate contracts ( 128 ) — 5 ( 123 )
−Removed: Defined benefit pension and other postretirement plans 4
−Removed: 21 ( 31 ) ( 1 ) ( 11 )
−Removed: Investment securities available-for-sale ( 1 ) ( 5 ) — ( 6 )
−Removed: Accumulated other comprehensive income (loss) $ ( 809 ) $ ( 435 ) $ ( 9 ) $ ( 1,253 )
−Removed: 1 During 2023, the decrease in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the appreciation of the euro and British pound against the U.S.
−Removed: During 2022, the increase in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the depreciation of the euro and British pound against the U.S.
−Removed: 2 During 2023, the decrease in the accumulated other comprehensive income related to the net investment hedges was driven by the appreciation of the euro against the U.S.
−Removed: During 2022, the increase in the accumulated other comprehensive income related to the net investment hedges was driven by the depreciation of the euro against the U.S.
−Removed: See Note 23 (Derivative and Hedging Instruments) for additional information.
−Removed: 3 Certain foreign exchange derivative contracts are designated as cash flow hedging instruments.
−Removed: Gains and losses resulting from changes in the fair value of these contracts are deferred in accumulated other comprehensive income (loss) and subsequently reclassified to the consolidated statement of operations when the underlying hedged transactions impact earnings.
−Removed: See Note 23 (Derivative and Hedging Instruments) for additional information.
−Removed: 4 During 2023, the increase in the accumulated other comprehensive loss related to the Plans was driven primarily by a net actuarial loss within the Pension Plans.
−Removed: During 2022, the increase in the accumulated other comprehensive loss related to the Plans was driven primarily by a net actuarial loss within the Pension Plans.
−Removed: See Note 14 (Pension, Postretirement and Savings Plans) for additional information.
−Removed: Share-Based Payments
−Removed: In May 2006, the Company granted the following awards under the Mastercard Incorporated 2006 Long Term Incentive Plan, which was amended and restated as of June 22, 2021 (the “LTIP”).
−Removed: The LTIP is a stockholder-approved plan that permits the grant of various types of equity awards to employees.
−Removed: The Company has granted Options, RSUs and PSUs under the LTIP.
−Removed: The Company uses the straight-line method of attribution for expensing all equity awards.
−Removed: Compensation expense is recorded net of estimated forfeitures, with estimates adjusted as appropriate.
−Removed: MASTERCARD 2023 FORM 10-K 100
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: There are approximately 116 million shares of Class A common stock authorized for equity awards under the LTIP.
−Removed: Although the LTIP permits the issuance of shares of Class B common stock, no such shares have been authorized for issuance.
−Removed: Shares issued as a result of Option exercises and the conversions of RSUs and PSUs were funded primarily with the issuance of new shares of Class A common stock.
−Removed: Stock Options
−Removed: Options expire ten years from the date of grant and vest ratably over three years for awards granted on or after March 1, 2022.
−Removed: For awards granted before March 1, 2022, they vest ratably over four years .
−Removed: For Options granted, a participant’s unvested awards are forfeited upon termination.
−Removed: In the event a participant terminates employment due to disability or retirement more than seven months after receiving the award, however, the participant retains all of their awards without providing additional service to the Company.
−Removed: Retirement eligibility is dependent upon age and years of service.
−Removed: Compensation expense is recognized over the vesting period as stated in the LTIP.
−Removed: The fair value of each Option is estimated on the date of grant using a Black-Scholes option pricing model.
−Removed: The following table presents the weighted-average assumptions used in the valuation and the resulting weighted-average fair value per Option granted for the years ended December 31:
−Removed: 2023 2022 2021
−Removed: Risk-free rate of return 4.2 % 1.6 % 0.9 %
−Removed: Expected term (in years) 6.00 6.00 6.00
−Removed: Expected volatility 29.5 % 24.6 % 26.1 %
−Removed: Expected dividend yield 0.6 % 0.6 % 0.5 %
−Removed: Weighted-average fair value per Option granted $ 123.22 $ 86.92 $ 91.70
−Removed: The risk-free rate of return was based on the U.S.
−Removed: Treasury yield curve in effect on the date of grant.
−Removed: The expected term and the expected volatility were based on historical Mastercard information.
−Removed: The expected dividend yields were based on the Company’s expected annual dividend rate on the date of grant.
−Removed: The following table summarizes the Company’s option activity for the year ended December 31, 2023:
−Removed: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value
−Removed: (in millions) (in years) (in millions)
−Removed: Outstanding at January 1, 2023 4.7 $ 173
−Removed: Granted 0.3 $ 354
−Removed: Exercised ( 1.9 ) $ 124
−Removed: Forfeited ( 0.1 ) $ 338
−Removed: Expired 0.0 $ 283
−Removed: Outstanding at December 31, 2023 3.0 $ 217 5.0 $ 632
−Removed: Exercisable at December 31, 2023 2.4 $ 184 4.2 $ 581
−Removed: Options vested and expected to vest at December 31, 2023 3.0 $ 217 5.0 $ 632
−Removed: As of December 31, 2023, there was $ 16 million o f total unrecognized compensation cost related to non-vested Options.
−Removed: The cost is expected to be recognized over a weighted-average period of 1.6 years.
−Removed: 101 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Restricted Stock Units
−Removed: For RSUs granted on or after March 1, 2022, the awards generally vest ratably over three years .
−Removed: For RSUs granted on or after March 1, 2020 but before March 1, 2022, the awards generally vest ratably over four years .
−Removed: A participant’s unvested awards are forfeited upon termination of employment.
−Removed: In the event of termination due to job elimination (as defined by the Company), however, a participant will retain a pro-rata portion of the unvested awards for services performed through the date of termination.
−Removed: In the event a participant terminates employment due to disability or retirement more than seven months after receiving the award, the participant retains all of their awards without providing additional service to the Company.
−Removed: Compensation expense is recognized over the shorter of the vesting periods stated in the LTIP or the date the individual becomes eligible to retire but not less than seven months .
−Removed: The following table summarizes the Company’s RSU activity for the year ended December 31, 2023:
−Removed: Units Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value
−Removed: (in millions) (in millions)
−Removed: Outstanding at January 1, 2023 1.8 $ 335
−Removed: Granted 1.2 $ 350
−Removed: Converted ( 0.7 ) $ 331
−Removed: Forfeited ( 0.1 ) $ 343
−Removed: Outstanding at December 31, 2023 2.2 $ 344 $ 945
−Removed: RSUs expected to vest at December 31, 2023 2.1 $ 344 $ 913
−Removed: The fair value of each RSU is the closing stock price on the New York Stock Exchange of the Company’s Class A common stock on the date of grant, adjusted for the exclusion of dividend equivalents.
−Removed: Upon vesting, a portion of the RSU award may be withheld to satisfy the minimum statutory withholding taxes.
−Removed: The remaining RSUs will be settled in shares of the Company’s Class A common stock after the vesting period.
−Removed: As of December 31, 2023, there was $ 372 million of total unrecognized compensation cost related to non-vested RSUs.
−Removed: The cost is expected to be recognized over a weighted-average period o f 1.7 years.
−Removed: Performance Stock Units
−Removed: PSUs vest after three years and are subject to a mandatory one-year post-vest hold, during which they are eligible for dividend equivalents.
−Removed: A participant’s unvested awards are forfeited upon termination of employment.
−Removed: In the event of termination due to job elimination (as defined by the Company), however, a participant will retain a pro-rata portion of the unvested awards for services performed through the date of termination.
−Removed: In the event a participant terminates employment due to disability or retirement more than seven months after receiving the award, the participant retains all of their awards without providing additional service to the Company.
−Removed: The following table summarizes the Company’s PSU activity for the year ended December 31, 2023:
−Removed: Units Weighted-Average
−Removed: Grant-Date Fair Value Aggregate Intrinsic Value
−Removed: (in millions) (in millions)
−Removed: Outstanding at January 1, 2023 0.4 $ 352
−Removed: Granted 0.2 $ 365
−Removed: Converted ( 0.1 ) $ 296
−Removed: Other 0.1 $ 386
−Removed: Outstanding at December 31, 2023 0.6 $ 365 $ 271
−Removed: PSUs expected to vest at December 31, 2023 0.6 $ 365 $ 266
−Removed: MASTERCARD 2023 FORM 10-K 102
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Since 2013, PSUs containing performance and market conditions have been issued.
−Removed: Performance measures used to determine the actual number of shares that vest after three years include net revenue growth, EPS growth and relative total shareholder return (“TSR”).
−Removed: Relative TSR is considered a market condition, while net revenue and EPS growth are considered performance conditions.
−Removed: The Monte Carlo simulation valuation model is used to determine the grant-date fair value.
−Removed: Compensation expense for PSUs is recognized over the requisite service period, or the date the individual becomes eligible to retire but not less than seven months , if it is probable that the performance target will be achieved and subsequently adjusted if the probability assessment changes.
−Removed: As of December 31, 2023, there was $ 34 million of total unrecognized compensation cost related to non-vested PSUs.
−Removed: The cost is expected to be recognized over a weighted-average period of 1.6 years.
−Removed: Additional Information
−Removed: The following table includes additional share-based payment information for each of the years ended December 31:
−Removed: 2023 2022 2021
−Removed: (in millions, except weighted-average fair value)
−Removed: Share-based compensation expense:
−Removed: Options, RSUs and PSUs $ 460 $ 295 $ 273
−Removed: Income tax benefit recognized for equity awards 99 61 57
−Removed: Income tax benefit realized related to Options exercised 95 49 36
−Removed: Total intrinsic value of Options exercised 487 231 169
−Removed: Weighted-average grant-date fair value of awards granted 350 340 358
−Removed: Total grant-date fair value of awards vested 235 305 202
−Removed: Total intrinsic value of RSUs converted into shares of Class A common stock 253 420 360
−Removed: Weighted-average grant-date fair value of awards granted 365 335 385
−Removed: Total grant-date fair value of awards vested 12 — 20
−Removed: Total intrinsic value of PSUs converted into shares of Class A common stock 14 — 32
−Removed: At December 31, 2023, the Company had the following future minimum payments due under noncancelable agreements, primarily related to sponsorships to promote the Mastercard brand and licensing arrangements.
−Removed: The Company has accrued $ 21 million of these future payments as of December 31, 2023.
−Removed: (in millions)
−Removed: Total $ 2,243
−Removed: 103 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Components of Income and Income Tax Expense
−Removed: The domestic and foreign components of income before income taxes for the years ended December 31 were as follows:
−Removed: 2023 2022 2021
−Removed: (in millions)
−Removed: United States $ 4,506 $ 4,228 $ 4,261
−Removed: Foreign 9,133 7,504 6,046
−Removed: Income before income taxes $ 13,639 $ 11,732 $ 10,307
−Removed: The total income tax provision for the years ended December 31 is comprised of the following components:
−Removed: 2023 2022 2021
−Removed: (in millions)
−Removed: Federal $ 991 $ 1,024 $ 663
−Removed: State and local 127 133 51
−Removed: Foreign 1,563 1,296 976
−Removed: 2,681 2,453 1,690
−Removed: Federal ( 180 ) ( 661 ) ( 31 )
−Removed: State and local ( 18 ) ( 40 ) ( 4 )
−Removed: Foreign ( 39 ) 50 ( 35 )
−Removed: ( 237 ) ( 651 ) ( 70 )
−Removed: Income tax expense $ 2,444 $ 1,802 $ 1,620
−Removed: Effective Income Tax Rate
−Removed: A reconciliation of the effective income tax rate to the U.S.
−Removed: federal statutory income tax rate for the years ended December 31, is as follows:
−Removed: 2023 2022 2021
−Removed: Amount Percent Amount Percent Amount Percent
−Removed: ($ in millions)
−Removed: Income before income taxes $ 13,639 $ 11,732 $ 10,307
−Removed: Federal statutory tax 2,864 21.0 % 2,464 21.0 % 2,164 21.0 %
−Removed: State tax effect, net of federal benefit 82 0.6 % 72 0.6 % 60 0.6 %
−Removed: Foreign tax effect ( 393 ) ( 2.9 ) % ( 347 ) ( 3.0 ) % ( 283 ) ( 2.7 ) %
−Removed: Valuation allowance - U.S.
−Removed: foreign tax credit 327 2.4 % ( 333 ) ( 2.8 ) % — — %
−Removed: tax expense on foreign operations 39 0.3 % 111 0.9 % 63 0.6 %
−Removed: Foreign-derived intangible income deduction ( 144 ) ( 1.1 ) % ( 129 ) ( 1.1 ) % ( 69 ) ( 0.7 ) %
−Removed: — — % — — % ( 132 ) ( 1.3 ) %
−Removed: Windfall benefit ( 88 ) ( 0.6 ) % ( 68 ) ( 0.6 ) % ( 67 ) ( 0.7 ) %
−Removed: Other, net ( 243 ) ( 1.8 ) % 32 0.3 % ( 116 ) ( 1.1 ) %
−Removed: Income tax expense $ 2,444 17.9 % $ 1,802 15.4 % $ 1,620 15.7 %
−Removed: Table may not sum due to rounding.
−Removed: The effective income tax rates for the years ended December 31, 2023, 2022 and 2021 were 17.9 %, 15.4 % and 15.7 %, respectively.
−Removed: The effective income tax rate for 2023 was higher than the effective income tax rate for 2022, primarily due to changes in the valuation allowance associated with the deferred tax asset related to U.S.
−Removed: foreign tax credits.
−Removed: In 2022, the Company recognized a discrete tax benefit of $ 333 million to release the valuation allowance resulting from U.S.
−Removed: tax regulations published in the first
−Removed: MASTERCARD 2023 FORM 10-K 104
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: quarter of 2022 (the “2022 Regulations”).
−Removed: In 2023, the treatment of foreign taxes paid under the 2022 Regulations changed due to foreign tax legislation enacted in Brazil and Notice 2023-55 (the “Notice”), released by the U.S.
−Removed: Department of Treasury (“Treasury”).
−Removed: Therefore, the Company recognized a total $ 327 million discrete tax expense in 2023 to establish the valuation allowance.
−Removed: The discrete tax expense recognized in 2023 was partially offset by the Company’s ability to claim more U.S.
−Removed: foreign tax credits generated in 2022 and 2023 due to the Notice released by Treasury.
−Removed: The effective income tax rate for 2022 was lower than the effective income tax rate for 2021, primarily due to a discrete tax benefit in the first quarter of 2022 related to final U.S.
−Removed: tax regulations published in 2022.
−Removed: These regulations resulted in a valuation allowance release of $ 333 million associated with the U.S.
−Removed: foreign tax credit carryforward deferred tax asset.
−Removed: The regulations limited the Company’s ability to generate foreign tax credits starting in 2022 for certain foreign taxes paid, resulting in additional U.S.
−Removed: Additionally, a more favorable geographic mix of earnings in 2022 contributed to the lower effective tax rate.
−Removed: The lower effective income tax rate in 2022 was partially offset by:
−Removed: • the recognition of U.S.
−Removed: tax benefits in 2021 (the majority of which were discrete) resulting from a higher foreign derived intangible income deduction and greater utilization of foreign tax credits in the U.S.
−Removed: • a discrete tax benefit in 2021 related to the remeasurement of the Company’s net deferred tax asset in the U.K.
−Removed: due to an enacted tax rate change in 2021
−Removed: • a discrete tax expense related to an unfavorable court ruling in 2022
−Removed: Singapore Income Tax Rate
−Removed: In connection with the expansion of the Company’s operations in the Asia Pacific, Middle East and Africa region, the Company’s subsidiary in Singapore, Mastercard Asia Pacific Pte.
−Removed: (“MAPPL”) received an incentive grant from the Singapore Ministry of Finance in 2010.
−Removed: The incentive had provided MAPPL with, among other benefits, a reduced income tax rate for the 10 -year period commencing January 1, 2010 on taxable income in excess of a base amount.
−Removed: The Company continued to explore business opportunities in this region, resulting in an expansion of the incentives being granted by the Ministry of Finance, including a further reduction to the income tax rate on taxable income in excess of a revised fixed base amount commencing July 1, 2011 and continuing through December 31, 2025.
−Removed: Without the incentive grant, MAPPL would have been subject to the statutory income tax rate on its earnings.
−Removed: For 2023, 2022 and 2021, the impact of the incentive grant received from the Ministry of Finance resulted in a reduction of MAPPL’s income tax liability of $ 571 million, or $ 0.60 per diluted share, $ 454 million, or $ 0.47 per diluted share, and $ 300 million, or $ 0.30 per diluted share, respectively.
−Removed: Indefinite Reinvestment
−Removed: As of December 31, 2023 the Company does not accrue taxes on $ 3.6 billion of foreign earnings which remain permanently reinvested outside the U.S.
−Removed: The Company expects that taxes associated with any future repatriation of these earnings are immaterial.
−Removed: 105 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Deferred Taxes
−Removed: Deferred tax assets and liabilities represent the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities.
−Removed: The components of deferred tax assets and liabilities at December 31 were as follows:
−Removed: (in millions)
−Removed: Deferred Tax Assets
−Removed: Accrued liabilities $ 863 $ 697
−Removed: Compensation and benefits 335 316
−Removed: State taxes and other credits 47 43
−Removed: Net operating losses 149 156
−Removed: foreign tax credits 635 274
−Removed: Property and equipment
−Removed: Intangible assets 182 186
−Removed: Lease liabilities
−Removed: Other items 156 155
−Removed: Valuation allowance ( 758 ) ( 114 )
−Removed: Total Deferred Tax Assets 2,044 1,830
−Removed: Deferred Tax Liabilities
−Removed: Prepaid expenses and other accruals 211 186
−Removed: Gains on equity investments 112 132
−Removed: Goodwill and intangible assets 518 561
−Removed: Right-of-use lease assets
−Removed: Other items 79 135
−Removed: Total Deferred Tax Liabilities 1,058 1,072
−Removed: Net Deferred Tax Assets $ 986 $ 758
−Removed: The changes in the Company’s valuation allowance on deferred tax assets were as follows:
−Removed: Balance at December 31, 2020
−Removed: Changes to Related Gross Deferred Tax Assets
−Removed: Change/(Release)
−Removed: Balance at December 31, 2021
−Removed: Changes to Related Gross Deferred Tax Assets
−Removed: Change/(Release)
−Removed: Balance at December 31, 2022
−Removed: Changes to Related Gross Deferred Tax Assets
−Removed: Change/(Release)
−Removed: Balance at December 31, 2023
−Removed: (in millions)
−Removed: foreign tax credit carryforward 1
−Removed: $ 276 $ 57 $ — $ 333 $ — $ ( 333 ) $ — $ 308 $ 327 $ 635
−Removed: Net operating and capital losses 2
−Removed: 77 11 ( 6 ) 82 23 9 114 12 ( 3 ) 123
−Removed: Total $ 353 $ 68 $ ( 6 ) $ 415 $ 23 $ ( 324 ) $ 114 $ 320 $ 324 $ 758
−Removed: 1 The 2022 activity resulted in a full release of the valuation allowance associated with the U.S.
−Removed: foreign tax credit carryforward due to final U.S.
−Removed: tax regulations published in 2022.
−Removed: The 2023 activity resulted in the establishment of the valuation allowance associated with the U.S.
−Removed: foreign tax credit carryforward due to foreign tax legislation enacted in Brazil and the Notice released by Treasury.
−Removed: 2 Capital losses are included within other items in the deferred tax assets section of the components of the Deferred Taxes table above.
−Removed: MASTERCARD 2023 FORM 10-K 106
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The recognition of foreign tax credits is dependent upon the realization of future foreign source income in the appropriate foreign tax credit basket in accordance with U.S.
−Removed: federal income tax law.
−Removed: The recognition of the net operating and capital losses is dependent on the timing and character of future taxable income in the applicable jurisdictions.
−Removed: As of December 31, 2023, the Company had a foreign tax credit carryforward and tax effected net operating loss carryforwards of $ 635 million and $ 149 million, respectively.
−Removed: The foreign tax credits begin to expire in 2029 and the majority of the net operating losses can be carried forward indefinitely.
−Removed: A reconciliation of the beginning and ending balance for the Company’s unrecognized tax benefits for the years ended December 31, is as follows:
−Removed: 2023 2022 2021
−Removed: (in millions)
−Removed: Beginning balance $ 414 $ 360 $ 388
−Removed: Current year tax positions 23 22 17
−Removed: Prior year tax positions 1
−Removed: Prior year tax positions 1
−Removed: ( 7 ) ( 14 ) ( 31 )
−Removed: Settlements with tax authorities — ( 13 ) ( 15 )
−Removed: Expired statute of limitations ( 15 ) ( 6 ) ( 3 )
−Removed: Ending balance $ 431 $ 414 $ 360
−Removed: 1 Includes immaterial translational impact of currency.
−Removed: As of December 31, 2023, the amount of unrecognized tax benefit was $ 431 million.
−Removed: This amount, if recognized, would reduce income tax expense by $ 378 million.
−Removed: The Company is subject to tax in the U.S., Belgium, Singapore, the United Kingdom and various other foreign jurisdictions, as well as state and local jurisdictions.
−Removed: Uncertain tax positions are reviewed on an ongoing basis and are adjusted after considering facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitation.
−Removed: Within the next twelve months, the Company believes that the resolution of certain federal, foreign and state and local examinations is reasonably possible and that a change in estimate, reducing unrecognized tax benefits, may occur.
−Removed: While such a change may be significant, it is not possible to provide a range of the potential change until the examinations progress further or the related statutes of limitation expire.
−Removed: The Company has effectively settled its U.S.
−Removed: federal income tax obligations through 2014.
−Removed: With limited exception, the Company is no longer subject to state and local or foreign examinations by tax authorities for years before 2014.
−Removed: Legal and Regulatory Proceedings
−Removed: Mastercard is a party to legal and regulatory proceedings with respect to a variety of matters in the ordinary course of business.
−Removed: Some of these proceedings are based on complex claims involving substantial uncertainties and unascertainable damages.
−Removed: Accordingly, it is not possible to determine the probability of loss or estimate damages, and therefore, Mastercard has not established liabilities for any of these proceedings, except as discussed below.
−Removed: When the Company determines that a loss is both probable and reasonably estimable, Mastercard records a liability and discloses the amount of the liability if it is material.
−Removed: When a material loss contingency is only reasonably possible, Mastercard does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made.
−Removed: Unless otherwise stated below with respect to these matters, Mastercard cannot provide an estimate of the possible loss or range of loss based on one or more of the following reasons:
−Removed: (1) actual or potential plaintiffs have not claimed an amount of monetary damages or the amounts are unsupportable or exaggerated, (2) the matters are in early stages, (3) there is uncertainty as to the outcome of pending appeals or motions, (4) there are significant factual issues to be resolved, (5) the proceedings involve multiple defendants or potential defendants whose share of any potential financial responsibility has yet to be determined and/or (6) there are novel legal issues presented.
−Removed: Furthermore, except as identified with respect to the matters below, Mastercard does not believe that the outcome of any individual existing legal or regulatory proceeding to which it is a party will have a material adverse effect on its results of operations, financial condition and overall business.
−Removed: However, an adverse judgment or other outcome or settlement with respect to any proceedings discussed below could result in fines or payments by Mastercard and/or could require Mastercard to change its business practices.
−Removed: In addition, an adverse outcome in a regulatory proceeding could lead to the filing of civil damage claims and possibly result in significant damage awards.
−Removed: Any of these events could have a material adverse effect on Mastercard’s results of operations, financial condition and overall business.
−Removed: 107 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Interchange Litigation and Regulatory Proceedings
−Removed: Mastercard’s interchange fees and other practices are subject to regulatory, legal review and/or challenges in a number of jurisdictions, including the proceedings described below.
−Removed: When taken as a whole, the resulting decisions, regulations and legislation with respect to interchange fees and acceptance practices may have a material adverse effect on the Company’s prospects for future growth and its overall results of operations and financial condition.
−Removed: United States.
−Removed: In June 2005, the first of a series of complaints were filed on behalf of merchants (the majority of the complaints were styled as class actions, although a few complaints were filed on behalf of individual merchant plaintiffs) against Mastercard International, Visa U.S.A., Inc., Visa International Service Association and a number of financial institutions.
−Removed: Taken together, the claims in the complaints were generally brought under both Sections 1 and 2 of the Sherman Act, which prohibit monopolization and attempts or conspiracies to monopolize a particular industry, and some of these complaints contain unfair competition law claims under state law.
−Removed: The complaints allege, among other things, that Mastercard, Visa, and certain financial institutions conspired to set the price of interchange fees, enacted point-of-sale acceptance rules (including the “no surcharge” rule) in violation of antitrust laws and engaged in unlawful tying and bundling of certain products and services, resulting in merchants paying excessive costs for the acceptance of Mastercard and Visa credit and debit cards.
−Removed: The cases were consolidated for pre-trial proceedings in the U.S.
−Removed: District Court for the Eastern District of New York in MDL No.
−Removed: 1720 (the “U.S.
−Removed: MDL Litigation Cases”).
−Removed: The plaintiffs filed a consolidated class action complaint seeking treble damages.
−Removed: In July 2006, the group of purported merchant class plaintiffs filed a supplemental complaint alleging that Mastercard’s initial public offering of its Class A Common Stock in May 2006 (the “IPO”) and certain purported agreements entered into between Mastercard and financial institutions in connection with the IPO:
−Removed: (1) violate U.S.
−Removed: antitrust laws and (2) constituted a fraudulent conveyance because the financial institutions allegedly attempted to release, without adequate consideration, Mastercard’s right to assess them for Mastercard’s litigation liabilities.
−Removed: The class plaintiffs sought treble damages and injunctive relief including, but not limited to, an order reversing and unwinding the IPO.
−Removed: In February 2011, Mastercard and Mastercard International entered into each of:
−Removed: (1) an omnibus judgment sharing and settlement sharing agreement with Visa Inc., Visa U.S.A.
−Removed: and Visa International Service Association and a number of financial institutions;
−Removed: and (2) a Mastercard settlement and judgment sharing agreement with a number of financial institutions.
−Removed: The agreements provide for the apportionment of certain costs and liabilities which Mastercard, the Visa parties and the financial institutions may incur, jointly and/or severally, in the event of an adverse judgment or settlement of one or all of the U.S.
−Removed: MDL Litigation Cases.
−Removed: Among a number of scenarios addressed by the agreements, in the event of a global settlement involving the Visa parties, the financial institutions and Mastercard, Mastercard would pay 12 % of the monetary portion of the settlement.
−Removed: In the event of a settlement involving only Mastercard and the financial institutions with respect to their issuance of Mastercard cards, Mastercard would pay 36 % of the monetary portion of such settlement.
−Removed: In October 2012, the parties entered into a definitive settlement agreement with respect to the U.S.
−Removed: MDL Litigation Cases (including with respect to the claims related to the IPO) and the defendants separately entered into a settlement agreement with the individual merchant plaintiffs.
+Added: merchant plaintiffs.
The settlements included cash payments that were apportioned among the defendants pursuant to the omnibus judgment sharing and settlement sharing agreement described above.
Mastercard also agreed to provide class members with a short-term reduction in default credit interchange rates and to modify certain of its business practices, including its no surcharge rule.
−Removed: The court granted final approval of the settlement in December 2013.
−Removed: Following an appeal by objectors and as a result of a reversal by the U.S.
−Removed: Court of Appeals for the Second Circuit, the district court divided the merchants’ claims into two separate classes - monetary damages claims (the “Damages Class”) and claims seeking changes to business practices (the “Rules Relief Class”).
+Added: The court granted final approval of the settlement in 2013.
+Added: Following an appeal by objectors and as a result of a reversal of the settlement approval by the U.S.
+Added: Court of Appeals for the Second Circuit, the case was sent back to the district court for further proceedings.
+Added: The court divided the merchants’ claims into two separate classes - monetary damages claims (the “Damages Class”) and claims seeking changes to business practices (the “Rules Relief Class”).
The court appointed separate counsel for each class.
−Removed: In September 2018, the parties to the Damages Class litigation entered into a class settlement agreement to resolve the Damages Class claims, with merchants representing slightly more than 25 % of the Damages Class interchange volume ultimately choosing to opt out of the settlement.
−Removed: The district court granted final approval of the Damages Class settlement in December 2019, which was upheld by the appellate court in March 2023 and became final in August 2023 pursuant to the terms of the agreement.
−Removed: Mastercard has commenced settlement negotiations with a number of the opt-out merchants and has reached settlements and/or agreements in principle to settle a number of these claims.
−Removed: Separately, settlement negotiations with the Rules Relief Class are ongoing.
−Removed: Briefing on summary judgment motions in the Rules Relief Class and opt-out merchant cases was completed in December 2020.
−Removed: In September 2021, the district court granted the Rules Relief Class’s motion for class certification.
−Removed: In January 2024, the district court denied certain of the defendants’ motions for summary judgment and the parties are awaiting decisions on the remaining motions.
+Added: In 2018, the parties to the Damages Class litigation entered into a class settlement agreement to resolve the Damages Class claims, with merchants representing slightly more than 25 % of the Damages Class interchange volume choosing to opt out of the settlement.
+Added: The Damages Class settlement agreement became final in August 2023.
+Added: Since 2018, Mastercard has reached settlements or agreements in principle to settle with over 250 opt-out merchants.
+Added: These opt-out merchant settlements, along with the Damages Class settlement, represent over 90 % of Mastercard’s U.S.
+Added: interchange volume.
+Added: Approximately 65 individual opt-out merchants continue to litigate, seeking treble damages and attorneys’ fees and costs.
+Added: During the first quarter of 2024, the district court denied the defendants’ motions for summary judgment with respect to these ongoing individual opt-out merchant cases, sending the cases back to their original jurisdictions for trials.
+Added: In October 2024, the remaining opt-out merchants submitted expert reports on liability and damages issues.
+Added: The aggregate single damages claimed by these merchants total approximately $ 12 billion with respect to their Mastercard purchase volume.
+Added: Mastercard would be responsible for 36 % of any Mastercard-related judgment pursuant to the December 2011 judgment and settlement sharing agreement discussed above.
+Added: The first trial in the opt-out merchant cases, which will involve six of the larger opt-out merchants, has been scheduled for October 2025.
+Added: In 2021, the district court granted the Rules Relief Class’s motion for class certification.
+Added: In March 2024, the parties to the Rules Relief Class litigation entered into a settlement agreement to resolve the Rules Relief Class claims.
+Added: The court held a preliminary settlement approval hearing in June 2024, and subsequently issued a decision denying approval of the settlement.
+Added: The parties are in ongoing settlement discussions.
+Added: The court has not yet scheduled a trial date.
As of December 31, 2024 and 2023, Mastercard had accrued a liability of $ 559 million and $ 596 million, respectively, for the U.S.
MDL Litigation Cases.
−Removed: During 2023, Mastercard reduced both the accrued liability and restricted cash for litigation settlement by $ 600 million, including accrued interest, as the Damages Class settlement became final in August 2023.
−Removed: As such, as of December 31,
−Removed: MASTERCARD 2023 FORM 10-K 108
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: 2023, Mastercard had no balance remaining in a qualified cash settlement fund related to the Damages Class litigation.
−Removed: As of December 31, 2022, the Company had $ 589 million in a qualified cash settlement fund classified as restricted cash on its consolidated balance sheet.
−Removed: During 2023, Mastercard recorded additional accruals of $ 344 million as a result of changes in the estimate with respect to the claims of merchants who opted out of the Damages Class litigation.
−Removed: The liability as of December 31, 2023 for the opt-out merchants represents Mastercard’s best estimate of its probable liabilities in these matters and does not represent an estimate of a loss, if any, if the matters were litigated to a final outcome.
+Added: The liability as of December 31, 2024 represents Mastercard’s best estimate of its probable liabilities in these matters and does not represent an estimate of a loss, if any, if the matters were litigated to a final outcome.
Mastercard cannot estimate the potential liability if that were to occur.
−Removed: Since May 2012, a number of United Kingdom (“U.K.”) merchants filed claims or threatened litigation against Mastercard seeking damages for excessive costs paid for acceptance of Mastercard credit and debit cards arising out of alleged anti-competitive conduct with respect to, among other things, Mastercard’s cross-border interchange fees and its U.K.
+Added: Since 2012, a number of United Kingdom (“U.K.”) merchants filed claims or threatened litigation against Mastercard seeking damages for excessive costs paid for acceptance of Mastercard credit and debit cards arising out of alleged anti-competitive conduct with respect to, among other things, Mastercard’s cross-border interchange fees and its U.K.
and Ireland domestic interchange fees (the “U.K.
2 unchanged sentences
Mastercard has resolved a substantial amount of these damages claims through settlement or judgment.
−Removed: During 2023, Mastercard incurred charges of $ 195 million as a result of settlements with a number of U.K.
−Removed: and Pan-European merchants.
−Removed: During 2022, Mastercard incurred charges of $ 223 million as a result of settlements (both final and agreements in principle) with a number of U.K.
−Removed: During 2021, Mastercard incurred charges of $ 94 million to reflect both the litigation settlements and estimated attorneys’ fees with a number of U.K.
−Removed: and Pan-European merchants.
Following these settlements, approximately £ 0.3 billion (approximately $ 0.4 billion as of December 31, 2024) of unresolved damages claims remain.
2 unchanged sentences
A number of those matters are now progressing with motion practice and discovery.
−Removed: A hearing involving multiple merchant cases is scheduled for February 2024 concerning certain liability issues with respect to merchant claims for damages related to post-Interchange Fee Regulation consumer interchange fees as well as commercial and inter-regional interchange fees.
+Added: A hearing involving multiple merchant cases was completed in March 2024 concerning certain liability issues with respect to merchant claims for damages related to post-Interchange Fee Regulation consumer interchange fees as well as commercial and inter-regional interchange fees.
In a separate matter, Mastercard and Visa were served with a proposed collective action complaint in the U.K.
1 unchanged sentence
and the European Union.
−Removed: In June 2023, the court denied the plaintiffs’ collective action application.
−Removed: In December 2023, the plaintiffs filed a revised application claiming damages against Mastercard in excess of £ 1 billion (approximately $ 1.3 billion as of December 31, 2023) and the court has scheduled a hearing on this application for April 2024.
−Removed: In September 2016, a proposed collective action was filed in the United Kingdom on behalf of U.K.
−Removed: consumers seeking damages for intra-EEA and domestic U.K.
+Added: In December 2023, the plaintiffs filed a revised collective action application claiming damages against Mastercard in excess of £ 1 billion (approximately $ 1.3 billion as of December 31, 2024).
+Added: In June 2024, the court granted the plaintiffs’ collective action application.
+Added: Mastercard’s request for permission to appeal this ruling was denied.
+Added: In 2016, a proposed collective action was filed in the United Kingdom on behalf of U.K.
+Added: consumers seeking damages for intra-European Economic Area (“EEA”) and domestic U.K.
interchange fees that were allegedly passed on to consumers by merchants between 1992 and 2008.
The complaint, which seeks to leverage the European Commission’s 2007 decision on intra-EEA interchange fees, claims damages in an amount that exceeds £ 10 billion (approximately $ 13 billion as of December 31, 2024).
−Removed: Following various hearings since July 2017 regarding collective action and scope, in August 2021, the trial court issued a decision in which it granted class certification to the plaintiffs but narrowed the scope of the class.
+Added: In 2021, the trial court issued a decision in which it granted class certification to the plaintiffs but narrowed the scope of the class.
Since January 2023, the trial court has held hearings on various issues, including whether any causal connection existed between the levels of Mastercard’s intra-EEA interchange fees and U.K.
domestic interchange fees and regarding Mastercard’s request to narrow the number of years of damages sought by the plaintiffs on statute of limitations grounds.
+Added: In February 2024, the trial court ruled in
+Added: 101 MASTERCARD 2024 FORM 10-K
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Mastercard’s favor, finding no causal connection between the levels of Mastercard’s intra-EEA interchange fees and U.K.
+Added: domestic interchange fees.
+Added: In June 2024, the trial court ruled in Mastercard’s favor with respect to its request to dismiss five years of the plaintiffs’ damages claims on statute of limitations grounds.
+Added: The plaintiffs’ request for permission to appeal this ruling was granted.
+Added: In December 2024, the parties entered into a settlement agreement to resolve this matter.
+Added: The parties have submitted supporting papers to the court seeking approval of the settlement, and the court has scheduled a hearing on settlement approval for late February 2025.
+Added: Mastercard recorded an accrual of £ 200 million ($ 251 million as of December 31, 2024) in connection with this settlement agreement.
Mastercard has been named as a defendant in a proposed consumer collective action filed in Portugal on behalf of Portuguese consumers.
1 unchanged sentence
Mastercard has submitted a statement of defense that disputes both liability and damages.
−Removed: In April 2023, the Serbian Competition Commission issued a Statement of Objections (“SO”) against Mastercard.
−Removed: The SO covers historic domestic interchange fees from 2013 to 2018.
−Removed: The SO seeks monetary fines and costs but no business practices changes.
−Removed: In May 2022, the Australian Competition & Consumer Commission (“ACCC”) filed a complaint targeting certain agreements entered into by Mastercard and certain Australian merchants related to Mastercard’s debit program.
+Added: In 2022, the Australian Competition & Consumer Commission (“ACCC”) filed a complaint targeting certain agreements entered into by Mastercard and certain Australian merchants related to Mastercard’s debit program.
The ACCC alleges that by entering into such agreements, Mastercard engaged in conduct with the purpose of substantially lessening competition in the supply of debit card acceptance services.
1 unchanged sentence
A hearing on liability issues has been scheduled for March 2025.
−Removed: 109 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ATM Non-Discrimination Rule Surcharge Complaints
−Removed: United States.
−Removed: In October 2011, a trade association of independent Automated Teller Machine (“ATM”) operators and 13 independent ATM operators filed a complaint styled as a class action lawsuit in the U.S.
−Removed: District Court for the District of Columbia against both Mastercard and Visa (the “ATM Operators Complaint”).
+Added: In 2011, a trade association of independent ATM operators and 13 independent ATM operators filed a complaint styled as a class action lawsuit in the U.S.
+Added: District Court for the District of Columbia against both Mastercard and Visa (the “ATM Operators Class Complaint”).
Plaintiffs seek to represent a class of non-bank operators of ATM terminals that operate in the United States with the discretion to determine the price of the ATM access fee for the terminals they operate.
2 unchanged sentences
Subsequently, multiple related complaints were filed in the U.S.
−Removed: District Court for the District of Columbia alleging both federal antitrust and multiple state unfair competition, consumer protection and common law claims against Mastercard and Visa on behalf of putative classes of users of ATM services (the “ATM Consumer Complaints”).
−Removed: The claims in these actions largely mirror the allegations made in the ATM Operators Complaint, although these complaints seek damages on behalf of consumers of ATM services who pay allegedly inflated ATM fees at both bank and non-bank ATM operators as a result of the defendants’ ATM rules.
+Added: District Court for the District of Columbia alleging both federal antitrust and multiple state unfair competition, consumer protection and common law claims against Mastercard and Visa on behalf of different putative classes of users of ATM services.
+Added: The claims in these actions largely mirror the allegations made in the ATM Operators Class Complaint, although these complaints seek damages on behalf of consumers of ATM services who pay allegedly inflated ATM fees at both bank (“Bank ATM Consumer Class Complaint”) and non-bank (“Non-bank ATM Consumer Class Complaint”) ATM operators as a result of the defendants’ ATM rules.
Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees.
−Removed: In January 2012, the plaintiffs in the ATM Operators Complaint and the ATM Consumer Complaints filed amended class action complaints that largely mirror their prior complaints.
−Removed: In September 2019, the plaintiffs filed with the district court their motions for class certification in which the plaintiffs, in aggregate, allege over $ 1 billion in damages against all of the defendants.
−Removed: In August 2021, the trial court issued an order granting the plaintiffs’ request for class certification.
−Removed: In July 2023, the D.C.
−Removed: Circuit Court affirmed the district court order granting class certification.
−Removed: In January 2024, the defendants requested that the U.S.
−Removed: Supreme Court hear the defendants’ appeal of the certification decision.
−Removed: Mastercard was named as a defendant in an action brought by Euronet 360 Finance Limited, Euronet Polska Spolka z.o.o.
−Removed: and Euronet Services spol.
−Removed: (“Euronet”) alleging that certain rules affecting ATM access fees in Poland, the Czech Republic and Greece by Visa and Mastercard, and certain of their subsidiaries, breach various competition laws.
−Removed: Euronet sought damages, costs and injunctive relief to prevent the defendants from enforcing these rules.
−Removed: The matter was resolved via a settlement in October 2023.
+Added: In 2019, the plaintiffs in all three class complaints filed with the district court their motions for class certification.
+Added: In 2023, the D.C.
+Added: Circuit Court affirmed the district court’s previous order granting class certification.
+Added: Supreme Court declined to hear the defendants’ appeal of the certification decision.
+Added: In May 2024, Mastercard executed a settlement agreement with the class lawyers representing the Bank ATM Consumer Class, subject to court approval.
+Added: At a hearing held in January 2025, the court indicated that it intends to provide final approval of the settlement.
+Added: During the first quarter of 2024, Mastercard recorded an accrual of $ 93 million in connection with this matter.
+Added: The litigation with the ATM Operators Class and Non-bank ATM Consumer Class is ongoing.
+Added: The plaintiffs in these two remaining class complaints, in aggregate, allege over $ 1 billion in single damages against all of the defendants.
+Added: MASTERCARD 2024 FORM 10-K 102
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Liability Shift Litigation
−Removed: In March 2016, a proposed U.S.
+Added: In 2016, a proposed U.S.
merchant class action complaint was filed in federal court in California alleging that Mastercard, Visa, American Express and Discover (the “Network Defendants”), EMVCo, and a number of issuing banks (the “Bank Defendants”) engaged in a conspiracy to shift fraud liability for card present transactions from issuing banks to merchants not yet in compliance with the standards for EMV chip cards in the United States (the “EMV Liability Shift”), in violation of the Sherman Act and California law.
Plaintiffs allege damages equal to the value of all chargebacks for which class members became liable as a result of the EMV Liability Shift on October 1, 2015.
−Removed: The plaintiffs seek treble damages, attorney’s fees and costs and an injunction against future violations of governing law, and the defendants filed a motion to dismiss.
−Removed: In September 2016, the district court denied the Network Defendants’ motion to dismiss the complaint, but granted such a motion for EMVCo and the Bank Defendants.
−Removed: In May 2017, the district court transferred the case to New York so that discovery could be coordinated with the U.S.
+Added: The plaintiffs seek treble damages, attorney’s fees and costs and an injunction against future violations of governing law.
+Added: The district court denied the Network Defendants’ motion to dismiss the complaint, but granted such a motion for EMVCo and the Bank Defendants.
+Added: In 2017, the district court transferred the case to New York so that discovery could be coordinated with the U.S.
MDL Litigation Cases described above.
−Removed: In August 2020, the district court issued an order granting the plaintiffs’ request for class certification and in January 2021, the Network Defendants’ request for permission to appeal that decision was denied.
−Removed: The plaintiffs have submitted expert reports that allege aggregate damages in excess of $ 1 billion against the four Network Defendants.
−Removed: The Network Defendants have submitted expert reports rebutting both liability and damages and all briefs on summary judgment have been submitted.
+Added: In 2020, the district court issued an order granting the plaintiffs’ request for class certification.
+Added: The plaintiffs have submitted expert reports that allege aggregate single damages in excess of $ 1 billion against the four Network Defendants.
+Added: The Network Defendants submitted expert reports rebutting both liability and damages and all briefs on summary judgment have been submitted.
+Added: In September 2024, the district court denied the Network Defendants’ motion for summary judgment.
Telephone Consumer Protection Class Action
3 unchanged sentences
Mastercard has asserted various defenses to the claims, and has notified FAB of an indemnity claim that it has (which FAB has disputed).
−Removed: In December 2019, the Federal Communications Commission (“FCC”) issued a declaratory ruling clarifying that the TCPA does not apply to faxes sent to online fax services that are received online via email.
−Removed: In December 2021, the trial court granted plaintiffs’ request for class certification, but narrowed the scope of the class to stand alone fax recipients only.
+Added: In 2019, the Federal Communications Commission (“FCC”) issued a declaratory ruling clarifying that the TCPA does not apply to faxes sent to online fax services that are received online via email.
+Added: In 2021, the trial court granted plaintiffs’ request for class certification, but narrowed the scope of the class to stand alone fax recipients only.
Mastercard’s request to appeal that decision was denied.
−Removed: Briefing on plaintiffs’ motion to amend the class definition and Mastercard’s cross-motion to decertify the stand alone fax recipient class was completed in April 2023.
−Removed: MASTERCARD 2023 FORM 10-K 110
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Federal Trade Commission Investigation
−Removed: In June 2020, the U.S.
−Removed: Federal Trade Commission’s Bureau of Competition (“FTC”) informed Mastercard that it initiated a formal investigation into compliance with the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
−Removed: In particular, the investigation focused on Mastercard’s compliance with the debit routing provisions of the Durbin Amendment.
−Removed: In December 2022, the FTC voted to issue an administrative complaint and accept a consent agreement with Mastercard.
−Removed: Pursuant to this agreement, Mastercard agreed to provide primary account numbers (PANs) so that merchants can route tokenized online debit transactions to alternative networks.
−Removed: The consent agreement does not include any monetary penalty.
−Removed: Following a public comment period, the FTC finalized the consent agreement in May 2023.
+Added: Briefing on plaintiffs’ motion to amend the class definition and Mastercard’s cross-motion to decertify the stand alone fax recipient class was completed in April 2023 and the parties await the court’s decision.
Department of Justice Investigation
4 unchanged sentences
Mastercard is cooperating with the DOJ in connection with the CID.
+Added: European Commission Investigation
+Added: In August 2024, Mastercard received a formal request for information from the European Commission seeking documents and information in connection with an investigation into alleged anti-competitive behavior of certain card scheme services in the European Union/EEA.
+Added: The request focuses on Mastercard’s practices regarding network fees related to acquirers.
+Added: Mastercard is cooperating with the European Commission in connection with the request.
Settlement and Other Risk Management
10 unchanged sentences
Mastercard monitors its credit risk portfolio and the adequacy of its risk mitigation arrangements on a regular basis.
−Removed: Additionally, from time to time, the Company reviews its risk management methodology and standards.
+Added: Additionally, the Company periodically reviews its risk management methodology and standards.
As such, the amounts of estimated settlement exposure are revised as necessary.
+Added: 103 MASTERCARD 2024 FORM 10-K
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company’s estimated settlement exposure was as follows at December 31:
5 unchanged sentences
$ 64,919 $ 62,856
−Removed: 1 The Company corrected its estimated net settlement exposure as of December 31, 2022.
−Removed: The correction was not material to the net settlement exposures previously reported and had no impact to any of the Company’s financial statement line items.
Mastercard also provides guarantees to customers and certain other counterparties indemnifying them from losses stemming from failures of third parties to perform duties.
−Removed: This includes guarantees of Mastercard-branded travelers cheques issued, but not yet cashed of $ 340 million and $ 342 million at December 31, 2023 and 2022, respectively, of which the Company has risk mitigation arrangements for $ 272 million and $ 273 million at December 31, 2023 and 2022, respectively.
+Added: This includes guarantees of Mastercard-branded travelers cheques issued, but not yet cashed.
In addition, the Company enters into agreements in the ordinary course of business under which the Company agrees to indemnify third parties against damages, losses and expenses incurred in connection with legal and other proceedings arising from relationships or transactions with the Company.
2 unchanged sentences
Historically, payments made by the Company under these types of contractual arrangements have not been material.
−Removed: 111 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative and Hedging Instruments
The Company monitors and manages its foreign currency and interest rate exposures as part of its overall risk management program which focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.
−Removed: A primary objective of the Company’s risk management strategies is to reduce the financial impact that may arise from volatility in foreign currency exchange rates principally through the use of both foreign exchange derivative contracts and foreign currency denominated debt.
+Added: A primary objective of the Company’s risk management strategies is to reduce the financial impact that may arise from volatility in foreign currency exchange rates.
+Added: The Company uses both foreign exchange derivative contracts (when the hedge costs are economically justified) and foreign currency denominated debt to manage its currency exposure.
In addition, the Company may enter into interest rate derivative contracts to manage the effects of interest rate movements on the Company’s aggregate liability portfolio, including potential future debt issuances.
3 unchanged sentences
The objective of these hedging activities is to reduce the effect of movement in foreign exchange rates for a portion of revenues and expenses forecasted to occur.
−Removed: As these contracts are designated as cash flow hedging instruments, gains and losses resulting from changes in fair value of these contracts are deferred in accumulated other comprehensive income (loss) and are subsequently reclassified to the consolidated statement of operations when the underlying hedged transactions impact earnings.
+Added: As these contracts are designated as cash flow hedging instruments, gains and losses resulting from changes in fair value of these contracts are deferred in accumulated other comprehensive income (loss) and are subsequently reclassified to the consolidated statements of operations when the underlying hedged transactions impact earnings.
+Added: The terms of these contracts are for generally less than 18 months.
+Added: In April 2024, the Company entered into foreign exchange derivative contracts to hedge its exposure to variability in cash flows related to foreign denominated assets.
+Added: Gains and losses resulting from changes in fair value of these contracts are deferred in accumulated other comprehensive income (loss) and are subsequently reclassified to the consolidated statements of operations when the hedged transactions impact earnings.
+Added: Forward points are excluded from the effectiveness assessment and are amortized to general and administrative expenses on the consolidated statements of operations over the hedge period.
+Added: The maximum term of these contracts was for approximately 7 years.
In addition, the Company may enter into interest rate derivative contracts to manage the effects of interest rate movements on the Company’s aggregate liability portfolio, including potential future debt issuances, and designate such derivatives as hedging instruments in a cash flow hedging relationship.
Gains and losses resulting from changes in fair value of these contracts are deferred in accumulated other comprehensive income (loss) and are subsequently reclassified as an adjustment to interest expense over the respective terms of the hedged debt issuances.
−Removed: As of December 31, 2023, a cumulative loss of $ 118 million, after tax, remains in accumulated other comprehensive income (loss) associated with these contracts and will be reclassified as an adjustment to interest expense over the respective terms of the 2020 USD Notes due in March 2030 and March 2050.
Fair Value Hedges
The Company may enter into interest rate derivative contracts, including interest rate swaps, to manage the effects of interest rate movements on the fair value of the Company's fixed-rate debt and designate such derivatives as hedging instruments in a fair value hedging relationship.
−Removed: Changes in fair value of these contracts and changes in fair value of fixed-rate debt attributable to changes in the hedged benchmark interest rate generally offset each other and are recorded in interest expense on the consolidated statement of operations.
−Removed: Gains and losses related to the net settlements of interest rate swaps are also recorded in interest expense on the consolidated statement of operations.
−Removed: The periodic cash settlements are included in operating activities on the consolidated statement of cash flows.
+Added: Changes in fair value of these contracts and changes in fair value of fixed-rate debt attributable to changes in the hedged benchmark interest rate generally offset each other and are recorded in interest expense on the consolidated statements of operations.
+Added: Gains and losses related to the net settlements of interest rate swaps are also recorded in interest
+Added: MASTERCARD 2024 FORM 10-K 104
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: expense on the consolidated statements of operations.
+Added: The periodic cash settlements are included in operating activities on the consolidated statements of cash flows.
In 2021, the Company entered into an interest rate swap designated as a fair value hedge related to $ 1.0 billion of the 3.850 % Senior Notes due March 2050.
4 unchanged sentences
The effective portion of the net investment hedge is recorded as a currency translation adjustment in accumulated other comprehensive income (loss).
−Removed: Forward points are excluded from the effectiveness assessment and are recognized in general and administrative expenses on the consolidated statement of operations over the hedge period.
−Removed: The amounts recognized in earnings related to forward points for 2023, 2022 and 2021 were not material.
−Removed: In 2015 and 2022, the Company designated its € 1,650 million and € 750 million euro-denominated debt, respectively, as hedges of a portion of its net investment in its European operations.
−Removed: In 2022, € 700 million of the 2015 euro-denominated debt matured and was de-designated as a net investment hedge.
−Removed: In 2023, the Company de-designated an aggregate notional amount of € 2,825 million foreign exchange derivative contracts and € 109 million of the euro-denominated debt as net investment hedges to effectively manage changes in its net investment exposures in foreign subsidiaries.
−Removed: The Company accounts for the de-designated foreign exchange derivative contracts as economic hedges as of the de-designation date.
−Removed: The foreign currency transaction gains and losses on the euro-denominated debt that is not designated as a hedging instrument for accounting purposes are recorded in general and administrative expenses on the consolidated statement of operations, net as of the de-designation date.
−Removed: The de-designated foreign exchange derivative contracts and euro-denominated debt will serve as economic hedges to offset possible changes in monetary assets due to foreign exchange fluctuations.
−Removed: MASTERCARD 2023 FORM 10-K 112
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: As of December 31, 2023 and 2022, the Company had € 1.6 billion and € 1.7 billion euro-denominated debt outstanding designated as hedges of a portion of its net investment in its European operations, respectively.
−Removed: During 2023, 2022 and 2021 the Company recorded a pre-tax net foreign currency loss of $ 67 million, gain of $ 176 million and gain of $ 155 million, respectively, in other comprehensive income (loss).
+Added: Forward points are excluded from the effectiveness assessment and are amortized to general and administrative expenses on the consolidated statements of operations over the hedge period.
+Added: The amounts recognized in earnings related to forward points for the years ended December 31, 2024, 2023 and 2022 were not material.
+Added: As of December 31, 2024 and 2023, the Company had € 1.3 billion and € 1.6 billion euro-denominated debt outstanding designated as hedges of a portion of its net investment in its European operations.
+Added: In December 2024 and 2023, the Company de-designated € 400 million and € 109 million of the euro-denominated debt as net investment hedges to effectively manage changes in its net investment exposures in foreign subsidiaries.
+Added: The € 109 million of euro-denominated debt de-designated in December 2023 was subsequently re-designated as a net investment hedge effective April 2024.
+Added: For the years ended December 31, 2024, 2023 and 2022 the Company recorded pre-tax net foreign currency gains (losses) of $ 104 million, $( 67 ) million and $ 176 million, respectively, in other comprehensive income (loss).
As of December 31, 2024 and 2023, the Company had net foreign currency gains of $ 295 million and $ 181 million, after tax, respectively, in accumulated other comprehensive income (loss) associated with this hedging activity.
5 unchanged sentences
The objective of these activities is to reduce the Company’s exposure to volatility arising from gains and losses resulting from fluctuations of foreign currencies against its functional currencies.
−Removed: Gains and losses resulting from changes in fair value of these contracts are recorded in general and administrative expenses on the consolidated statement of operations, net, along with the foreign currency gains and losses on monetary assets and liabilities.
+Added: Gains and losses resulting from changes in fair value of these contracts are recorded in general and administrative expenses on the consolidated statements of operations, net, along with the foreign currency gains and losses on monetary assets and liabilities.
The following table summarizes the fair value of the Company’s derivative financial instruments and the related notional amounts:
12 unchanged sentences
2,741 17 30 5,424 34 79
−Removed: Total derivative assets/liabilities $ 7,430 $ 36 $ 183 $ 3,977 $ 108 $ 126
−Removed: 1 Foreign exchange derivative assets and liabilities are included within prepaid expenses and other current assets and other current liabilities, respectively, on the consolidated balance sheet.
−Removed: 2 Interest rate derivative liabilities are included within other current liabilities and other liabilities on the consolidated balance sheet.
+Added: $ 10,203 $ 206 $ 99 $ 7,430 $ 36 $ 183
+Added: 1 Foreign exchange derivative assets and liabilities are included within prepaid expenses and other current assets, other assets and other current liabilities on the consolidated balance sheets.
+Added: 2 Interest rate derivative liabilities are included within other current liabilities and other liabilities on the consolidated balance sheets.
+Added: 105 MASTERCARD 2024 FORM 10-K
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The pre-tax gain (loss) related to the Company's derivative financial instruments designated as hedging instruments are as follows:
−Removed: Gain (Loss) Recognized in OCI Gain (Loss) Reclassified from AOCI
−Removed: Year ended December 31, Location of Gain (Loss) Reclassified from AOCI into Earnings Year ended December 31,
+Added: Gain (Loss) Recognized in Other Comprehensive Income (Loss)
+Added: Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
+Added: Years ended December 31, Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Earnings
+Added: Years ended December 31,
2024 2023 2022 2024 2023 2022
1 unchanged sentence
Derivative financial instruments in a cash flow hedge relationship:
−Removed: Foreign exchange contracts $ ( 41 ) $ 1 $ 6 Net revenue $ ( 29 ) $ 16 $ 1
+Added: Foreign exchange contracts 1
+Added: $ 161 $ ( 41 ) $ 1 Net revenue $ 8 $ ( 29 ) $ 16
+Added: General and administrative 2
+Added: $ 177 $ — $ —
Interest rate contracts $ — $ — $ — Interest expense $ ( 7 ) $ ( 6 ) $ ( 6 )
1 unchanged sentence
Foreign exchange contracts $ 43 $ ( 98 ) $ 177
−Removed: The Company estimates that the pre-tax amount of the net deferred loss on cash flow hedges recorded in accumulated other comprehensive income (loss) at December 31, 2023 that will be reclassified into the consolidated statement of operations within the next 12 months is not material.
−Removed: The term of the foreign exchange derivative contracts designated in hedging relationships are generally less than 18 months.
−Removed: 113 MASTERCARD 2023 FORM 10-K
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The amount of gain (loss) recognized on the consolidated statement of operations for non-designated derivative contracts is summarized below:
−Removed: Year ended December 31,
+Added: 1 Includes immaterial amounts excluded from the effectiveness assessment recognized in other comprehensive income (loss).
+Added: 2 Includes immaterial amounts excluded from the effectiveness assessment recognized in earnings.
+Added: The Company estimates that the pre-tax amount of the net deferred loss on cash flow hedges recorded in accumulated other comprehensive income (loss) at December 31, 2024 that will be reclassified into the consolidated statements of operations within the next 12 months is not material.
+Added: The amount of gain (loss) recognized on the consolidated statements of operations for non-designated derivative contracts is summarized below:
+Added: Years ended December 31,
Derivatives not designated as hedging instruments:
7 unchanged sentences
The Company’s derivative contracts are subject to enforceable master netting arrangements, which contain various netting and setoff provisions.
−Removed: However, the Company has elected to present derivative assets and liabilities on a gross basis on the consolidated balance sheet.
+Added: However, the Company has elected to present derivative assets and liabilities on a gross basis on the consolidated balance sheets.
To mitigate counterparty credit risk, the Company enters into derivative contracts with a diversified group of selected financial institutions based upon their credit ratings and other factors.
1 unchanged sentence
Segment Reporting
−Removed: Mastercard has concluded it has one reportable operating segment, “Payment Solutions.” Mastercard’s Chief Executive Officer has been identified as the chief operating decision-maker.
−Removed: All of the Company’s activities are interrelated, and each activity is dependent upon and supportive of the other.
+Added: Mastercard has concluded it has one reportable operating segment, “Payment Solutions.” The Payment Solutions segment derives its revenues from a wide range of payment solutions provided to customers.
+Added: Revenue is generated from offering customers access to Mastercard’s continuous payment network, as well as by providing value-added services and solutions, whether integrated and sold with the payment network or on a stand-alone basis.
+Added: Revenue is recognized when services are performed in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services (i.e., fees charged to customers).
+Added: All of the segment’s activities are interrelated, and each activity is dependent upon and supportive of the other.
Accordingly, all significant operating decisions are based upon analysis of Mastercard at the consolidated level.
+Added: The accounting policies of the Payment Solutions segment are the same as those described in Note 1 (Summary of Significant Accounting Policies).
+Added: Mastercard’s Chief Executive Officer has been identified as the chief operating decision-maker (“CODM”).
+Added: The CODM assesses performance for the Payment Solutions segment and decides how to allocate resources, including whether to reinvest profits into the Payment Solutions segment or into other business activities such as for acquisitions, to pay dividends or for share repurchases, based on net income as reported on the consolidated statements of operations (“Consolidated Net Income”).
+Added: The CODM uses
+Added: MASTERCARD 2024 FORM 10-K 106
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Consolidated Net Income and other measures for internal planning and forecasting purposes and in the calculation of performance-based compensation.
+Added: The following represents the selected financial information regularly reviewed by the CODM to assess performance of the Payment Solutions segment for the years ended December 31:
+Added: 2024 2023 2022
+Added: (in millions)
+Added: $ 28,167 $ 25,098 $ 22,237
+Added: 6,673 6,022 5,263
+Added: Professional Fees
+Added: Data processing and telecommunications
+Added: 1,119 1,008 926
+Added: Foreign exchange activity
+Added: Advertising and marketing
+Added: Depreciation and amortization
+Added: Provision for litigation
+Added: Investment Income
+Added: ( 327 ) ( 274 ) ( 61 )
+Added: (Gains) losses on equity investments, net
+Added: Interest expense
+Added: Other (income) expense, net
+Added: ( 20 ) 7 ( 23 )
+Added: Income tax expense
+Added: 2,380 2,444 1,802
+Added: Other segment items 1
+Added: 1,787 1,319 1,307
+Added: Consolidated Net Income
+Added: $ 12,874 $ 11,195 $ 9,930
+Added: 1 Includes fulfillment costs, occupancy costs, travel and meeting expenses, and other overhead expenses.
Revenue by geographic market is based on the location of the Company’s customer that issued the card, the location of the merchant acquirer where the card is being used or the location of the customer receiving services.
14 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.